Investor Update

Sep 9, 2020

Slides

Hello, and welcome to the Lumis Conference Call. Throughout the call, all participants will be in a listen only mode and afterwards, there will be a question and answer session. And just to remind you, this conference call is being recorded. Today, I'm pleased to present CEO, Patrick Anderson. Please go ahead with your meeting. Thank you very much. Good morning, and welcome to this call and the presentation of the new our new initiative, Loomis Pay. As mentioned, my name is Patrick Anderson. I'm the CEO of the Loomis Group. And with me here today, I have Christian Akerbe, our CFO Anders Harker, who is responsible for Investor Relations and also Christoffer Waldmann, who is Chief Marketing Officer for Loomis Pay. I will start with the presentation, and after that, we will have we will open up for Q and A. So let's turn to next slide, which is Slide number 2. And despite being hit by the effects of COVID-nineteen during the Q2, Loomis launching Loomis Pay from a position of strength, as I see it at least. Since the IPO was more than 10 years ago, the development speaks for itself when it comes to the financial operational performance, as you can see from this slide. Just to recap, Loomis has a leading position in many countries. We're aiming to be number 1 or number 2, and we have now over 25,000 employees globally. And it's also worth mentioning that we have approximately 40,000 installed safe points globally, which you will see later is an important part of the puzzle when launching Luminess Pay. Let's turn to the next slide, Slide number 3. And just going back a bit to 2017, already back at that point in time, we had a clear and transparent view on our strategy. So firstly, the core business like CIT, CMS, SafePoint and then also transport and storage of valuables is and will be the base for Lumis also going forward. Lumis is and will be investing in the core business. I mean, still, Loomis cash is the foundation of Loomis. Cash is the foundation of Loomis. But secondly, we have now also added other services, what we call adjacent services, like FX, where we have now a company in France, but also business in many other countries. But we also recently signed a deal with an AGM provider in the Nordics. And thereby, we also increased the market potential and the scope following in the future, also including the margin opportunity. So for those who have seen this model, the further we go Northeast in the model, the better we think the margins would be or they will be better. And now, actually, we take the 3rd step in the strategy and launching Loomis Pay. This is something that's been on the agenda since back in 2017 and been talking a lot about during the last couple of years. So it's not about one of these elements, it's about all of these elements. And the starting journey of LoomisPay was the establishment of the innovation center in Stockholm already in 2018. And the innovation center spent a lot of time on building knowledge around non cash payments. We know a lot about cash payments, but not so much about non cash payments and what position Luma should take in this value chain. We later acquired Go Apifyd, which is a Danish point of purchase company with both hardware and software. I'll come back to that a little bit later. At the same time, we continue to build knowledge and competence. We now have a full management team and all necessary competence in place. And of course, one of the Lumi's strength is the strong relationship with merchants in all our markets. And we can, with Lumispay, offer unique full service solution combining both in cash and digital. Being in Sweden, we should remind ourselves, of course, that cash is the biggest payment method and more than 70% of all payments in the euros, so below €20 are made in cash. Let's turn so and also finally, cash in circulation is growth both in Europe and the U. S, as I've said many times. And there has never ever been so much cash in the world as it is right now, and cash payments are a vital part of the payment landscape. Let's turn to the next slide, Slide number 4. So LoomisPay will significantly increase the market potential for Loomis. So even though cash is a big and important payment method, the market for non cash payments is worth $1,000,000,000,000 globally with merchants and forecasted to grow CAGR at 6%. The markets in the Nordics have been early adopters as in many other aspects when it comes to non cash payments and the market and the volume is getting close to SEK 4,000,000,000, the volume, the total volume of all transactions. 70% of that is in store. However, as everybody knows, e commerce is growing. We will then focus on the SME segment, which is the small and mid sized customers as a first step. And this segment in the Nordics is representing 30% to 3% of the volume, but 50% of the revenue potential. So careful estimate is that the market potential for a payment facilitator role focusing on the SME segment is more than SEK 10,000,000,000 in the Nordics. Let's then turn to the next slide, Slide number 5. We will let Lorne start by launching NumisPay in Denmark during Q4 this year. But I'm actually happy to say that we already signed the first customers. We actually have 13 customers already now in Copenhagen area. And this is the result of some test selling, of course. Before we go live, we do some test selling, and the response has been very positive. And one of the reasons actually is the inclusion of the SafePoint concept in all of this. So that's very nice and promising. So we will start in Denmark. And after that, the rest of the Nordic countries, Sweden, Norway and Finland will follow during 2021. But at the same time, we constantly are optimizing the service and the offering, of course, as we go. And as a next step, the plan is to roll out in further Loomis markets down the road. Within 5 years, Loomis Pay should have a revenue exceeding SEK 3,000,000,000. The margin in this market is high and attractive, and we expect the margins to be above the levels we have for SafeGuard. So we are following our strategy and the strategy model as presented earlier to add services with higher and higher margins. So let's then turn to next slide, which has exactly the how we can present LoomisPay in one sentence, and that is a complete one contract payment solution for merchants. I'll explain a bit more about that in the following slides. So let's turn to the next slide, Slide 7. So what is the problem we want to solve for the merchant for our customers? Before we decided to launch LoomisPay, we did a lot of market research to better understand the situation for the merchant. But our offer is also based on the knowledge we have gathered by physically visiting customers on a daily basis. We are out there every day talking to our customers, of course. What is quite clear on what we have understood is that the different payment types are increasing all the time. And there are a number of supplier across the payment landscape that the merchant needs to handle and relate to. And that is to be able to manage payments in store and on the web. This takes time from the core task of a merchant that is, of course, to sell to meet customers and sell the goods. And this slide, I will not go through all the details, but it gives an overview of the challenges for merchants and the issues that need to be managed. I think you understand the complexity, and this complexity is increasing all the time based on our research. Let's then turn to the next slide, which is Slide 8. And then to handle this complex situation, it's, of course, costing both time and money, and it's for sure impacting both the top and bottom line of the merchant. We know that based on our research. What we also have seen from that research is that the SME merchant don't always have the necessary knowledge and time to successfully navigate in the payment landscape. We also know that many merchants want to simplify the situation by decreasing complexity and the number of providers, especially when it comes to the number of settlements and contracts. As Luminess is regularly physically present, we will be able to support the merchant with spare parts, but also new terminals, for instance, if that is good for buyer. We are out there with our trucks and vehicles all the time and can give a good support. Let's then turn to next page, Slide number 9. So this is, as you can see, the problem that Loomis wants to solve. And this slide, as you have in front of you, is illustrating the position Loomis will take. So you see how it looks today and also what we want to achieve tomorrow. So we will offer one contract, one contract, one settlement, and that is for all payments, both in store and then online. And that will offer a lot of positive benefits for the merchants. So let's turn then to next page. And if you start then to in the box at the left hand of the slide, you can see that NumisPay is agnostic. So no matter how you choose to pay or which channel you choose to use, Luminess Pay provides full flexibility, all payments. Luminess Pay is the only player that can do this as we are able to handle cash. Nobody else is really integrating cash in this solution. As I said, we will also integrate the same SafePoint concept in this solution. And that was, of course, what we've seen also from the first reaction is a very positive thing. Through the acquisition of GrafixWise, we will offer state of the art front and point of purchase devices, including software, which all are certified in all possible ways. When it comes to the gateway, we have multiple acquire solution. We are routing payments to many different certified acquirers. And the solution includes user friendly interface to provide merchants with transaction insights. Acquiring, our solution is independent of acquirer and transaction will be routed to the most suitable already set by merchant. We don't want to compete with the banks in this space. And at the end of the process, Lubis Pay will settle and bundle all payments to the merchants' bank accounts. So this is the setup. Let's turn to next page. And here, you can actually see some photos of the Lumix Pay offering. And the two photos at the bottom of the slide are showing the mobile payment terminal. You have PAX A920 to the left and PAX E800 terminal to the right. And that is then point of sales used in point of sales, either a mobile version to the left or then a more fixed version to the right. And sorry, in the upper right hand corner, you see the eCheckout solution for merchants. And upper left, you see the photo from the merchant's own view of the Loomis Pay portal. So here, the merchant can follow all things that are happening with the payments. And here, all transaction can be monitored. So it's very simple and user friendly. All of this is, of course, now in place as we start. Let's then turn to next page, Slide 12. So the question is, of course, then why will Lumis be successful in this new space? One reason is that we have direct contact with 85,000 merchants in Nordics alone, and we meet these customers physically on a regular basis, sometimes many times a week. We have 25,000 employees globally that can support the launch in the field. We have more than 1,000 clients facing employees handling 2,300,000 customer interactions per year in the Nordics. Our vehicles can have spare parts and terminals, so that the service level and uptime for NumisTek can be very high. Finally, NumisTek has had a great success with SafePoint, where we now have 40,000, as I mentioned before. And SafePoint has taught us a lot about launching new and complex services, but also that there is an appetite for new technology from Luminess among the customer base. So let's then turn to the next page, Slide 13. LoomisPay has actually been able to attract the necessary competence and experience. On this slide, you see the management team of Lumi's. We have earlier announced recruitment of the Managing Director of Lumi's Bank, Christophe Labouc, who's coming from Klarna. You see him to the left. He's coming from Klarna, one of the bigger fintech companies in Europe, and he has both the necessary knowledge and leadership to make LoomisPay a success. However, the rest of the managed team has also extensive experience from payments and fintech from leading companies, as you can see from this slide. On top of that, we have been able to recruit senior sales and marketing people to LoomisPay, both to the Loomis Pay headquarter in Stockholm, but also out in the Nordic countries. So each country in the Nordics we launch in will have the dedicated sales and marketing organization and resources for Lumispay. Let's then turn to the next slide, which is Slide 14. And here, I just want to summarize some of the key points. We will launch in Denmark this year and in the Nordic other Nordic countries during 2021. The next country out is actually Sweden. After that, more lunis countries will follow. And in 5 years, we will reach a turnover of SEK5 1,000,000,000 with high and nice margins. We will have a positive result by 2023, and we will invest about SEK100 1,000,000 per year in product development, marketing, etcetera, during 2020 up to 2022. And I would say that this is quite a cost efficient way of building the offering, having looked at other possibilities. So this was my last slide. We are, of course, very excited to be able to present Lumispay to all of you. It creates many interesting business opportunities, I think, at least. So thank you for listening. And let's then turn to next page. At the same time as we operator, we now open up for Q and A. Thank Our first question comes from the line of Thomas Kraft from Handelsbanken. Please go ahead. Yes. Hello, everyone. Thanks for taking my call. Just if you could bring some talk a little bit about current competition for this. What how will it evolve with the likes of Klarna and PayPal and so on? And what will be your role? And so and what are like current competitors in this? Thank you. Yes. I think that one thing is quite clear that there is no one in the market today that is offering to bundle all payment methods, including cash. Then there are a number of other players, some, as you mentioned, that are offering to bundle other solutions. And there are a number of players that are offering point of sale equipment. However, again, there is no one taking this position as we know. That I don't know, Christophe, if you want to elaborate on that one. Sure. No, as you pointed out Patrick, we will mostly compete with POS and PSP providers. But this is a platform made for integration with other type of services related to the merchant, we believe that we will also be an attractive partner to many players in this landscape. Okay. And then with the 85,000 contacts you have now, When you talk about when you talk with them, what are sort of the current setup for them in this regard? They have many, many contracts with different solutions within maybe you handle the cash and another one for the online business and so on. So what are the current setup? And what will you so what current contract will you push away with this, if you know what I mean? No, that's right. I think that as I tried to show on one of the slides is that they have many different suppliers. They could be online. It could be point of sale. It could be different payment methods. It could be a lot of players. And we want to go to the merchant and be one point of contact. Then some of these players, of course, we like to push out, but many of them will be part of this ecosystem as well. But we will be the first point of contact for the customers and handle all these relationships for the merchant. That's our purpose. Okay. And with the acquisition of Go Apifyd in Denmark then, so what will you be able to use from them now? And what will you need to complement sort of when you can launch the full solution? So what do you have? And what will you need more of? Okay. So we have the acquisition for managing cash related services and hardware in place out at the merchants already. With the POS solutions that we do, again, with the acquisition of Graphify, we can strengthen our position further at the point of purchase. So that means that in store, we'll be able to accept all type of digital payments, those for cards, card schemes later on account to account and PLP2 bank payments, driving the cards, smartphones, etcetera. And then in parallel with that, we're also developing in house, as David mentioned, our own gateway as well as the web checkouts. So we take strengthen our position at the merchants' front end by means the acquisition of Guatified. Okay. Thank you for that. That's all for me. And the next question comes from the line of Daniel Torsion from ABG. Please go ahead. Yes, hi. Thank you very much. A very enthusiastic presentation. Looks very interesting. If I can ask around your current customers, the 85,000 you have, do you know if they have similar solutions in place now that you need to replace in terms of POS systems, for example? Yes. That's right. I mean, some of the so why do we have 85,000 customers? I think that keeps coming from that before the banks had direct contract with these merchants and handling the CIP and CMS with us. Now that interface is done. That's why we have a direct contact to these merchants, which makes Nordic a good place to start, just having said that. I think that some of these customers, they have solutions in place, which are then running out. I mean, the contract is expiring. Maybe they don't have to. Maybe they want to have a solution for both cash and other payments. But there could be a number of reasons to change. And I think that even though some of them are in the middle of a contract, there are means to get out of the contracts if they think that this one this solution is better. Okay. I see. And when you say SME as a client, can you give us some sense of what is typical client in terms of number of employees or transaction volumes? Is it a food store? Is it the hairdresser? What type of client would you like to target? A very valid question. We define it as a merchant with a total revenue roundabout or tops SEK 15,000,000 a year in that area, in that range. Okay. So SEK 15,000,000 in revenue for their own business that you can address? Yes. Okay. That is not written in stone, but that's what we will target when we go to market now in Q4 and even 2021. Yes. And it's covering all kinds of sectors like restaurants, hairdressers, food, retail? Yes. We have actually we are targeting 6 different segments. Restaurants and bars is 1. We're looking into convenience stores. We're looking into tourism, hotels, etcetera. Looking into retail and transportation, it could be tax additional and also health and health care and professional services, just as I said, that's it, like you mentioned. Okay. Excellent. And then another one on the business model here. Are you going to sell the product as a software service solution on a monthly subscription? As you have, for example, percentage of the value as you see all of that content there. It will be a mix of that depending on what and the relation between monthly subscription fee and transaction will vary depending on what type of package the merchant decides to go for as it's possible to tailor make this according to segment specific needs. Okay. Do you think that we heard from competitors today? Do they have a mix? Or do they usually have transaction based? To my knowledge, they usually have transaction based, but I could be wrong. Yes. It's very strong competitor to competitor. So there are both options. We know that some charge a lot upfront for investment. Some use revenue based models. Some use subscription models or inventory. Okay. Okay. I see. And then a final one on the SEK 3,000,000,000 in sales target at 5 years. I think that we heard the question before, but does it require any more acquisitions? Or do you have the go to market organization is already in place? You have the cash solution. You have now the POS, and you will develop your own gateway in house. So no more acquisitions needed to reach the target. Is that true? No. Not to reach the target. However so this is assuming what we have already today. However, of course, that we should not exclude that could be some kind of acquisition to strengthen some area. But we are good to go to the SEK 3,000,000,000 as we speak. Okay. That's clear. Thank you very much. And the next question comes from the line of Erik Paulsen from Nordea Markets. Please go ahead. Yes, hi. It's Erik Paulsen at Nordea. I had a question. You signed an agreement with Westpay around a year ago for payment solutions. And I wonder how that comes into play now and going forward. I think it was a 4 year contract signed then. Yes. It was that's right. And that was in the early stage of this, and it was more for the operational business in Sweden and does not have a direct impact on this business case you see. So it's more towards the Swedish market. It's more towards the Swedish operation, and it was a bit earlier in this respect. So that's not taken into account in this business case. All right, great. Thank you very much. And the next question comes from the line of Johan Beyl from Danske Bank. Please go ahead. Yes, good morning. I was wondering, could you talk a little bit about this SEK 3,000,000,000 target that you're looking at? What does that basically mean in terms of customers actually, number of customers, etcetera, and penetration in your current base? Is it possible to talk about that a little bit? Yes. That we can do that. I mean, because we are just taking the Nordics as an example, so you know the magnitude. To be successful in Nordic, we assume and that's not the total business case, but this is part. But just to give you an understanding is that we will transform 20% of the existing customer base into the solution. So 20% of all the customers we have in SME segment will be transferred or rather say, they would like this to have this service and then a couple of small percentage points from totally new customers. So that's what we have assumed in the business case for Nordics. But then when you go look out in Europe, it's much, much smaller numbers than that. But just to give you a flavor of what we think in the Nordics. And in terms of I heard what you said regarding transaction based and field based. But if you compare the visibility in these contracts compared to SafePoint, for example, what are the main differences? Or how are they similar? No. I mean, SafePoint is a subscription in I mean, the main thing with SafePoint is a subscription. So we have a monthly fee, and that covers everything. Here, we have a subscription model, but also based on the volume of the transaction. So it's a bit different than Segment. To what extent will you share revenues with the sort of partners that you've needed to enroll into this offering? And to what extent are revenues sort of ending up entirely at Luxe? In this respect, we think that, of course, we want to keep most of the revenues as we provide this service. But of course, I think that everybody is starting to understand FinTech. It's more about partnering up. It's more about creating some kind of ecosystem. In that respect, we are very much open to work with other players in this field. And I think that, of course, there are some direct competitors, but there are many, many, many partners we can have. And we actually have been already been talking to a number of them as we speak. Can you put some numbers to the organizations, Patrick, that will actually sell this? If you look just how it looks today and where you expect this to be in perhaps a 12 months' time? So right now, we have about 50 people in LumiSpa. Of course, many of them are consultants working mostly now with the development work of the solution. Of course, it's ready to go or in a couple of weeks, it's ready to go. But as we now move on, I think that we will strengthen more and more the sales and marketing organization, both in the countries and here at Loomis' headquarter. I think that one key element is, of course, to be able to together with Loomis' pay people and the salespeople in Loomis to build up the merchant base. But I assume that we will, in a year or 2 years' time, be around 120 people about in the Loomis Pay organization about. Thanks. And the next question comes from the line of Matti Gergalot from Goldman Sachs. Please go ahead. Yes, hello. I have 3 questions from my side. Firstly, on your revenue target of $3,000,000,000 Can you just help us understand, so you talked about the Nordics, you talked about some European clients. Does the SEK 3,000,000,000 also include, say, some revenues in the U. S, first of all? And also within the SEK 3,000,000,000, is there not some element of, say, safe points incremental sales? Then the second question is so we are cash handling analysts and we need to learn a lot about new things about digital payments. Can you help us understand what's really here your proprietary software proprietary, let's say, IP that will be difficult to replicate? I understand, okay, you have the client relationships, you will handle the cash, but presumably, you also say you need to develop some proprietary IP to be able to be really successful longer term. So what is that exactly? And then thirdly, you mentioned, okay, there is a whole ecosystem behind it that LumiSpay will handle to basically simplify the merchants' life job. Are these already established? Or are you basically going to establish these in the next few months? And in a way, what do you think is the most critical part? What would be for you the most difficult part in establishing these relationships? Okay. Thank you very much. Good questions. I can take the first one and then we Christophe can take the second one and I come back on the third one. So the revenue, we have in this business case, we have the basics, of course, in Nordic countries. And then we have some inroads some of the European markets in this business. It's not total Europe. It's some markets in Europe. So that's included in the business case. U. S. Is not included in the business case. However, we will not exclude going to the U. S. But of course, it will require some resources. And of course, it's easier in a way to expand in Europe as we have a license that can be passportable. So that's and SafePoint is in a way, you can say that SafePoint is included because that's often I mean, in the part of the package when we go to the retailer, I mean, SafePoint is included. But that is not so we say that the total European SafePoint potential is included there. No. It's just the addition of SafePoint for sale going to these merchants, if you understand what I mean. Yes. Yes. IP, should you talk a bit about that, Christopher? Yes. And unique selling points as well, as I understood the question. But we know that Lonestpay has many confirmed strong unique selling points, helping the merchants to become more efficient, productive and successful in their daily work. So our unique ability to offer this one stop shop omni channel solution for all payments, including cash, makes us confident that we have an important role to play in this market. So the one settlement for all payments and the possibility to add credit solutions to that, meaning next day settlement already is something that will make us unique. Also, our presence in the field, like Patrick mentioned earlier, we know that uptime these type of systems are super critical for the merchants. And with our daily presence in the field, we are sure that we can provide something that most of our future digital potential competitors are not capable of doing. And then the third question sorry. Sorry, just on that one, if I may. But is there like any structure involved, let's say, no, we saw an acquisition this morning, but not that acquisition sales worth, let's say, SEK 60,000,000. Here it seems that the business case is no massive. It's a significant multiple of that acquisition. Is there any additional, say, software IP that you have developed, let's say, in the last one, 2 years, let's say, nobody else in the market has But what you're saying, okay, you're the only one that has the trans relationship, yes, but now how easy is for somebody else to say, okay, I also have some relationship here. I'm a supplier of Holidays. I supply just general goods, so I do cleaning, and therefore, I have lots of customers as well. I will start basically offering them also on IP to handle their payments as well. As Patrick mentioned earlier, we're also developing our own payment gateway And the abilities and capabilities of that one gives us the opportunity to realize this service. So the potential and abilities that comes with our own developed omni channel gateway, managing both online and offline payments and being acquiring agnostic or allow for several different type of acquirers. And the one settlement with the credit service will put us in a unique position in the market. Okay. Thank you. And then the last question you had, my CFO, remind me here, I said at one point in time, SEK 5,000,000,000 taking turnover. No, the SEK 3,000,000,000 as mentioned in the press release, it's SEK 3,000,000,000 that we're aiming for, so just to give that clarity. Now the difficulty is to reach the merchants to build the volume, to get the contract. So the challenge is in the sales and marketing to scale this. I think that, of course, all people working with the technical aspects say that it may be differently. But in my view, it's really to be able to convince the retailers that this is a good solution. I think that we have a good pitch. I think we've seen in the last couple of weeks that it's working, but that I think that, that could be the challenge. Okay. Very clear. Well, thank you very much. Thanks. And the next question comes from the line of Michael Rudel from Carnegie. Please go ahead. Yes. Hi, guys. First of all, on the sales target, and maybe forgive me if I missed anything here during the presentation, but when you speak about SEK 3,000,000,000 in sales, is that sort of on top of current sales? Or will I mean, I guess, there's going to be some sort of cannibalization from converting customers, which currently has a pure CIT engagement with you, into a Lumis Pay Solutions solution. So will there be a net positive impact of SEK 3,000,000,000? Is that your expectation? Or yes? Yes. That's right. It's a net. It's net. So we have calculated back and forth, and this is the net effect on top of everything else we have in the pipeline, yes. Okay. Another question then on you're saying that you're going to have strong or good margins. Could you, first of all, quantify that? And secondly, when you look at other or from the merchants' point of view, if you're going to have good margins, in my world, that's double digit margins. And if that's the case, I guess the merchant has to give away quite a lot for you to make that money or other sort of partners in this will have to give away quite a lot. So how because in my world, this is a low margin business and typically based on transactions and so on. So how is that really possible to make that kind of money? No, I think that's a good question. You can I mean, if you follow many of the competitors, they're measuring margins and profitability in very different ways? So it's quite difficult to get a sort of total good picture on that. But what we have said in our calculations is that we will have margins above save point levels. And save point varies, of course, from country to country, but it's around 20%. And that is what we're aiming for. We don't think that, that is too high because we have that for Safeco, and we think that this is very reasonable. And we made, as I said, many calculations on the price level and acceptance and things like that. And we think that's very doable. And then it's very difficult to compare that with other players because, as I said, they are measuring it in very different ways. But that's what we're aiming for. Christopher? Adding to that, I think it's important to keep in mind that we are not a regular PSP processing payment and charging for that. In this offer, there is much more like POS system. We offer quick settlement, etcetera. So cannot be 1 to 1 compared with the standard pure payment transaction company solution. I just want to like to mention one thing, which is important is that when it comes to Safepoint, we have settlements in the bank account of the retailer the next day. And that is what we're also going to offer to the retailer, that all payments will be settled on the bank account the next day. All payments will be settled, including cash. And that, I think, is a very, very strong pitch. And that is the secret, to some extent, behind Safe Point. One of the secrets or one of the pitches behind SafePoint. And that is what we're going to offer here for all payment methods. Okay. A question on the competition side. You mentioned some of that earlier in the presentation. But if we take 2 quite large Swedish companies, iSettle and Kvaana, for instance, Are you going to be partnering with any of them? Or are you seeing an opportunity to grab a piece of their share just to see where you think you fit in? I think it's very difficult to say. I mean, to some of these players, we will be competitors for sure. I mean, if you compete on the payment terminals in store, I mean, you have competitors. But I don't see it as direct competitors to China, for instance, if you take that example. But on the contrary, I think we need some of these players in our offering and might be that they need us also. So I see that there is some competition, but there's a lot of partnerships going into this as well. Okay. Final question from me. On the financials, you're mentioning $100,000,000 in cost. And I think you said net I don't know what you what the expression was in the tax release, net cost or something like that. But will those SEK 100,000,000 be reported as nonrecurring items, I. E, below the EBITA level? Or how will and it will be reported in the other segment. That, I understand from the press release. But will it be nonrecurring items? As we look at it right now, we do not look at it as nonrecurring items. So it will be part of the operation. And it's a mix sort of also revenue and cost, we should say. So we expect a net negative impact on EBITDA to be $100,000,000 on a yearly basis. Okay. And in terms of sales, how will this be reported? Sales, it will be revenue, and you will then have a revenue on the other segment. But if you look in 2020, for example, that will, of course, be a very small number. Okay. But it will be in the other segment, not in Europe then? Exactly. In 2020, that's our structure. Okay. Okay. Thank The next question comes from the line of Johan Eliason from Kepler Cheuvreux. Please go ahead. Yes. Hi. This is Johan at Kepler Cheuvreux. Just to get a bit of an understanding how this will impact your average SME. I understand the user friendliness of having just one contact for all of these payment solutions and obviously the key pitch of getting paid the next day, independent of what type of payment the customer use. But if you take one of these average €50,000,000 turnover SME, how much do they sort of pay for these aggregated solutions today? And what are the savings, hard savings you are sort of putting on the plate for him from day 1? I think it's as I say, as Christophe said, it's very difficult to make a direct comparison with the different so many different ways of taking getting paid. I think that when we look at it, the total package of our offering is very price competitive. So of course, we have checked if you bundle everything and offer that to a certain price, I think that our solution is very price competitive. Without getting into all the different details around pricing because then it gets a bit sensitive. Now it sounds like a very neat method for the SMEs to have. I mean, we are seeing a lot of shops in Sweden with no cash accepted, etcetera. Do you think this could reverse that trend a little bit to get some more revenue potential for some of these? Yes. I think that's a good question. We think so. We think we can help the merchant to make it easier to handle cash. And hopefully, they will use a safe point. If not, then we can solve that as well. But I think it makes it much easier to handle cash as a bundle service together with everything else. So the answer is yes, yes. And you talked about a license that you can transfer in Europe. Is this requiring some sort of new banking license or so? Or do you have everything in place already? We have everything in place place already? We have everything in place to be able to expand in the Nordics and then later on into Europe, yes. Okay. Excellent. Sounds interesting. Thank you very much. And the last question is a follow-up question from the line of Johan Den from Danske Bank. Please go ahead. Just a quick follow-up. What is the P and L impact in the last 12 months from this initiative? Sorry to understand the delta as you continue. I'll hand over to Christian. Last 12 months or rather, we included from this year what we call Lumi's page. We don't disclose for the innovation team. And this first half of this year, it was approximately CHF 20,000,000. Thank you. As there are no further questions, I'll hand it back to the speakers for closing remarks. I will just thank everybody for listening in on this short notice, and thank you for all very good questions. Have a nice day, and thank you very much. This now concludes the conference call. Thank you all for attending. 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