Slide 1: Q4 & FY 2020
Q4 & FY 2020 24 February 2021
Slide 2: Q4 highlights
Q4 highlights • Positive trend on Gross revenue in all segments Q4 Financials • Several items affecting Q4 - both positively and negatively • Annualized Return on Equity excluding non-controlling interest of 4% in Q4 • EUR 50 million in new equity raised1 Refinancing and • Reduced funding cost equit
Slide 3: Key Financial Highlights
Key Financial Highlights All numbers in EUR Q4 95m 58m 64m 21m 4% Gross revenue Total income Cash EBITDA EBITDA ROE1 2020 328m 205m 213m 36m -5% Gross revenue Total income Cash EBITDA EBITDA ROE1 3 1) ROE excluding non-controlling interest. Q4 ROE is annualized
Slide 4: All business segments with positive gross revenue development in Q4
All business segments with positive gross revenue development in Q4 Core business segments Run-off business segment NPL Gross revenue 3PC Gross revenue REO’s Gross revenue (EUR million) (EUR million) (EUR million) 69 16 20 21 61 62 13 14 54 54 54 12 11 10 12 12 10 7 Q3 Q4 Q1 Q2 Q3 Q4 Q3 Q4 Q1 Q2 Q3
Slide 5: Margin expansion by increasing gross revenues and driving down operating expenses
We are delivering a meaningful margin expansion by increasing gross revenues combined with driving down operating expenses Core business segments Gross revenue & Total operating expenses (excl. REO) (EUR million) 82.8 +7% • Axactor industry leading cost-to-collect on 77.5 NPL portfolios in 20191 30.
Slide 6: NPL with gross revenue growth
NPL with gross revenue growth - But negative revaluations put pressure on margins NPL Gross Revenue and CM1% (EUR million and %) 80% 78% 77% 75% 73% • Increased amortization level as collections improve 69% 68% • 40% in Q4 2020 (34% in Q3, 28% in Q2) 69 61 62 9 • Net negative revaluations of EUR 8.9
Slide 7: NPL active forecast aligned with current performance
NPL active forecast aligned with current performance - Supporting correct portfolio valuations going forward Active forecast versus cash collected1 • Cash collected in Q4 did not meet the active forecast • Current active forecast aligned with current performance • Historic underperformance assumed l
Slide 8: 3PC Development
3PC Development - Improving trend in both revenues and margins 3PC income and CM1% (EUR million and %) 16 16 14 13 14 • Revenue improving compared to Q2 pandemic 12 low-point 11 • Still burdened by the pandemic - down 11% YoY 10 50% • Existing contracts with lower volumes as banks and 44% 34% 40% 40
Slide 9: REO Development (run-off segment)
REO Development (run-off segment) - Revenue and margins improving REO income and CM1% (EUR million and %) 25 25 • Revenue and margins improving compared to Q2 20 21 pandemic low-point • External valuation more positive than expected • EUR 5.9m release of impairment accrual in Q4 12 12 10 • Remaining
Slide 10: Summary: Total income burdened by revaluations. Cash EBITDA with positive trend
Summary: Total income burdened by revaluations. Cash EBITDA with positive trend from Q2-lowpoint Total Income EBITDA and EBITDA-margin Cash EBITDA (EUR million) (EUR million and %) (EUR million) 49% 36% 31% 32% 36% 75 29% 30% 25% 67 74 72 65 64 68 59 60 64 62 56 58 30 56 26 24 48 20 22 20 21 45 44 1
Slide 11: Net profit after tax of EUR 3.3 million for the quarter
Net profit after tax of EUR 3.3 million for the quarter Figures in EUR million Q4-20 Q4-19 FY 2020 FY 2019 EBITDA 21.3 23.8 35.9 92.1 • Interest cost includes EUR 7 Depreciation & amortization -3.0 -2.8 -10.8 -10.1 million write-down of EBIT 18.4 21.0 25.0 82.0 capitalized loan fees due to Net finan
Slide 12: Several significant items affecting Q4 result
Several significant items affecting Q4 result Five items affecting Q4 2020 result Excluding Figures in EUR million Reported A B C D E A-E Gross revenue 94.9 -3.0 0.0 0.0 0.0 0.0 92.0 NPL portfolio amortization & revaluation -36.4 0.0 10.3 0.0 0.0 0.0 -26.1 Total income 58.5 -3.0 10.3 0.0 0.0 0.0 65.
Slide 13: Agenda
Agenda Q4 Financials Refinancing and equity issue Strategy update Outlook
Slide 14: Major multi-step financial transaction announced 9 December 2020
On 9 December 2020 we announced a major multi-step financial transaction to improve our competitive position Element Key details Simplify Maturity Capacity • An equity issue of EUR 30 million Equity issue ✓ • A subsequent repair offering of EUR 20 million • Early redemption of AXA01 Bond refinancing
Slide 15: All maturities refinanced to 2024 ensuring a robust debt maturity schedule
All maturities refinanced to 2024 ensuring a robust debt maturity schedule Previous maturity profile1 New maturity profile1 EUR million EUR million 1000 1000 Mezzanine, 140 Mezzanine 140 900 900 Axactor Invest RCF, Axactor 800 800 75 120 Invest2 700 700 75 600 600 RCF, Axactor Group4 500 500 RCF, Ax
Slide 16: Pro-forma transactions increase shareholder's equity to equity ratio of 31%
On a pro-forma basis will the transactions increase shareholder’s equity with EUR ~100m to an equity ratio of 31% (EUR million) Assets Equity and liabilities (EUR million) 1,367 1,396 1,367 1,396 90 90 304 402 74 25 Tangible and intangible assets Shareholder’s equity NPL portfolios Non-controlling i
Slide 17: Agenda
Agenda Q4 Financials Refinancing and equity issue Strategy update Outlook
Slide 18: Our strategy consist of three pillars
Our strategy consist of three pillars Bank & Finance • The preferred partner for Banks and Financial (B&F) institutions Growth • Profitable organic growth to harvest economies of scale OneAxactor • Continued emphasis on building the best debt collection platform in Europe 18
Slide 19: How will we pursue profitable growth?
How will we pursue profitable growth? Markets • Targeting organic growth within our existing markets to harvest economies of scale • We have carefully chosen and entered attractive European markets - Sound margins, well functioning legal systems and large NPL transaction volumes Products • Our core
Slide 20: 94% of Axactor portfolio book value exposure within our strategic core
94% of Axactor portfolio book value exposure within our strategic core NPL & REO book value (EURm)1 1,203 48 1,156 3% - REO (run-off segment) 3% 3% 3% - NPL Secured 94% 94% - NPL Unsecured Total book Non-Axactor Axactor value exposure2 exposure 20 1) Pro-forma after Axactor Invest I roll-up, conduct
Slide 21: Our number one goal is to increase Return on Equity
Our number one goal is to increase Return on Equity - And start paying dividends Return on Equity excl. minorities per quarter1 – Total and excluding REO’s2 • Return on Equity (ROE) excl. Covid-19 minorities, excl. run-off segment 12% 11% REO’s, reached 11% before Covid-19 10% 9% 9% 8% 7% • ROE in 2
Slide 22: Agenda
Agenda Q4 Financials Refinancing and equity issue Strategy update Outlook
Slide 23: Identified key Return on Equity factors going forward
Identified key Return on Equity factors going forward • Vaccination normalize working conditions for our employees and normalize debtor’s willingness and ability to resolve their debt + • Increased 3PC volumes and expected lower NPL prices as part of the Covid-19 aftermath • Expect continued margin
Slide 24: Q4 highlights
Q4 highlights • Positive trend on Gross revenue in all segments Q4 Financials • Several items affecting Q4 - both positively and negatively • Annualized Return on Equity excluding non-controlling interest of 4% in Q4 • EUR 50 million in new equity raised1 Refinancing and • Reduced funding cost equit
Slide 25: Supporting information
Supporting information
Slide 26: NPL portfolio Q4 2020
NPL portfolio Q4 2020
Slide 27: NPL with gross revenue growth
NPL with gross revenue growth - But negative revaluations put pressure on margins NPL Gross Revenue and CM1% (EUR million and %) 80% 78% 77% 75% 73% • Increased amortization level as collections improve 69% 68% • 40% in Q4 2020 (34% in Q3, 28% in Q2) 69 61 62 9 • Net negative revaluations of EUR 8.9
Slide 28: Somewhat slower recovery in collection in Q4 than expected in Q2
Somewhat slower recovery in collection in Q4 than was expected in Q2, underlying trend is still positive Actual collection vs. active forecast1 (LTM, rolling) 112% 108% 106% • Q4 collection performance of 95% 100%101% 101% 98% 97% 94% 95% 95% 97% 96% 90% 92% 93% • LTM collection performance of 96% •
Slide 29: Axactor invested EUR 208m in NPL portfolios in 2020
Axactor invested EUR 208m in NPL portfolios in 2020 - Prioritizing high IRR portfolios, and expecting significant volumes to be offered in H2 2021 Quarterly NPL investments (EUR million) • Total investment of EUR 95 90 196m in forward flow contracts in 2020 • Estimated Q1 2021 forward flow 62 capex
Slide 30: ERC growing at a steady pace despite revaluations in Q4
ERC growing at a steady pace despite revaluations in Q4 ERC development Forward ERC profile by year (EUR million) (EUR million) 2,153 2,160 2,169 283 2,038 2,052 253 222 199 179 160 143 128 116 106 96 87 79 66 52 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 Y12 Y13 Y14 Y15 FIN GE
Slide 31: 3PC Q4 2020
3PC Q4 2020
Slide 32: 3PC Development
3PC Development - Improving trend in both revenues and margins 3PC income and CM1% (EUR million and %) 16 16 14 13 14 • Revenue improving compared to Q2 pandemic 12 low-point 11 • Still burdened by the pandemic - down 11% YoY 10 50% • Existing contracts with lower volumes as banks and 44% 34% 40% 40
Slide 33: 3PC volumes by geographic region
3PC volumes by geographic region 3PC total income split by geographic region 3% • Revenue increase of 22% from Q3 2020 1% • Spain increasing revenues by 36% QoQ 21% • Germany FY 2020 revenue share of 21%, Q4’20 up 4ppt from 2019 Total income 5% • Nordics accounting for 22% of revenue in 2020 EUR 13.
Slide 34: REO portfolio (run-off segment) Q4 2020
REO portfolio (run-off segment) Q4 2020
Slide 35: REO Development (run-off segment)
REO Development (run-off segment) - Revenue and margins improving REO income and CM1% (EUR million and %) 25 25 • Revenue and margins improving compared to Q2 20 21 pandemic low-point • External valuation more positive than expected • EUR 5.9m release of impairment accrual in Q4 12 12 10 • Remaining
Slide 36: REO portfolio moving towards the tail
REO portfolio moving towards the tail REO book value* REO # of units* (EUR million) 223 7,388 198 200 6,703 187 181 6,161 6,323 5,773 157 162 5,130 148 4,825 4,612 129 120 4,024 3,740 3,489 89 84 3,076 79 2,694 8 521 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Slide 37: REO statistics
REO statistics* (EUR million) Current book Asset class # assets % of total Book value % of total • Housing represent 54% of current book value Housing 1,101 41 % 42.5 54 % • Limited exposure to commercial assets Parking, annex etc. 903 34 % 3.4 4% Land 274 10 % 4.6 6% Commercial 416 15 % 29.7 38 % E
Slide 38: Appendix
Appendix
Slide 39: Refinancing structure
Refinancing structure Simplifying financing structure while providing the basis for a resilient long term funding profile Previous structure New structure EUR 55 m equity AXACTOR02 from Axactor Invest 2024 - EUR 200m acquisition2 AXA01 2021 - EUR 200m Axactor SE Axactor SE Mezzanine EUR 50m new 2024
Slide 40: P&L statement
P&L statement EUR thousand Interest income from purchased loan portfolios For the quarter end 31 Dec 2020 41,758 31 Dec 2019 37,239 Year to date 31 Dec 2020 163,093 31 Dec 2019 134,531 Net gain/loss purchased loan portfolios -12,241 -412 -49,813 -319 Other operating revenue 29,003 36,865 91,724 148,
Slide 41: Balance sheet statement
Balance sheet statement EUR thousand 31 Dec 2020 31 Dec 2019 EUR thousand 31 Dec 2020 31 Dec 2019 ASSETS EQUITY AND LIABILITIES Intangible non-current assets Equity attributable to equity holders of the parent Intangible Assets 19,989 21,486 Share Capital 97,040 81,338 Goodwill 54,879 56,170 Other p
Slide 42: Legal organization December 2020
Legal organization December 2020 Axactor SE (Norway) 50% Axactor Invest 1 S.à r.l.* (Luxembourg) 50% Axactor Platform Holding AB Axactor Portfolio Holding AB Axactor Italy Holding Reolux Holding S.à r.l. S.r.l. (Italy) (Sweden) (Sweden) Axactor Finland Axactor Germany Axactor España, Axactor Sweden
Slide 43: Terms and abbreviations
Terms and abbreviations APM / KPI definition Cash EBITDA EBITDA adjusted for calculated cost of share option program, portfolio amortizations and revaluations, REO cost of Terms and abbreviations sales and REO impairments CM1 Margin Total operating expenses (excluding SG&A, IT and corporate cost) as
Slide 44: axactor.com
axactor.com AXACTOR
Slide 45: Slide 45