Intrum Ab · OMXSTO:INTRUM
Intrum Ab — Intrum Justitia Group — FY2006 Earnings Presentation
28 slides from Intrum Ab's earnings presentation, Feb 15, 2007
Slide 1: Full-Year 2006
Intrum Justitia Group Full-Year 2006 Presented by Michael Wolf, CEO, and 15 February Monika Elling, CFO 2007
Slide 2: Focus on client solutions is key
Focus on client solutions is key Our aim is to drive the level of outsourcing in Europe by moving from being perceived as debt collection agency to become a client focused organisation 2
Slide 3: Growth Drivers
Growth Drivers • Short term B2C – Consumer credit growth and increased indebtedness levels B2B – Basel II • Medium to long term – Strengthen our client relationship – Information advantage – Operational excellence – Brand name – Debtor focus (Fair pay… please!) 3
Slide 4: Experiences from building a premium brand
Experiences from building a premium brand Long term Structural and relationship sustainable growth 4
Slide 5: Conclusions from the Strategic Review Process
Conclusions from the Strategic Review Process • Sales focus – Key Account Management with the aim be a partner by providing solutions earlier in the value chain! • Operational excellence – Alignment in all markets is a target to be achieved by the end of 2008 • Regionalization – Enhance capabilities
Slide 6: IJ Sweden has taken the step
IJ Sweden has taken the step • New Sales/CRM structure to drive a segmented approach • Operation alignment – Customer based process structure for B2B and B2C • Net staff reduction of appr. 20FTE and cost savings of SEK 8M in 2007 6
Slide 7: IJ Group Q4 2006
IJ Group Q4 2006 Q4 2006 Q4 2005 Deviation Total revenues 797,5 759,3 5,0% Operating Cost Total -599,6 -638,3 -6,1% Cost of sales -437,0 -464,3 -5,9% Sales & marketing -71,6 -69,5 3,0% General & administration -91,0 -104,5 -12,9% Part in assoc companies -0,1 -0,7 - EBIT 197,8 120,3 64,4% Net financi
Slide 8: Regional development, Sweden, Norway & Denmark
Regional development, Sweden, Norway & Denmark Market share - Profitability and quality is strong, revenue generation > 25% need support. Therefore… 10–25% … Sweden is reorganising from seven service lines to two client lines, B2B and B2C. Focus is on client solutions. 20% - The financial consequenc
Slide 9: Regional development, The Netherlands, Belgium & Germany
Regional development, The Netherlands, Belgium & Germany Market share > 25% - After the Q3 dip, the region recovered to mid single < 10% digit revenue growth and EBIT margin expansion - The contribution arrives across the region - The large German bank portfolio acquired in July 2006 continues to pe
Slide 10: Regional development, Switzerland, Austria & Italy
Regional development, Switzerland, Austria & Italy Market share > 25% - Excluding the revaluation in Purchased debt the < 10% region continues to report EBIT margin expansion and organic growth of mid single digit - The portfolio revaluation relate to a number of portfolios where the purchase price
Slide 11: Regional development, France, Spain & Portugal
Regional development, France, Spain & Portugal Market share 10–25% - The number one growth region - Although difficult comps from Q4 2005 the trend of double digit revenue growth rates, excluding PD revaluations, continues - The flat EBIT development y-o-y excl PD 16% revaluation is temporary Percen
Slide 12: Regional development, Finland, Estonia, Latvia & Lithuania
Regional development, Finland, Estonia, Latvia & Lithuania Market share > 25% - Finland continues its above or nearly double digit growth 10–25% trend, which has been reported for 11 consecutive quarters - The EBIT margin in Finland is seasonally high due to VAT income and tax refunds 15% Percentage
Slide 13: Regional development, United Kingdom & Ireland
Regional development, United Kingdom & Ireland - The region has reached break-even, although at a low level Market share 10–25% - The number of employees has decreased by 93 to 414 - England restructuring 2006: divestment of the Field service, reduction in staff by 85 persons and concentration of ac
Slide 14: Regional development, Poland, Czech Rep., Slovakia & Hungary
Regional development, Poland, Czech Rep., Slovakia & Hungary Market share > 25% - Poland still suffers from a low PD activity 10–25% - PD revaluation took place in Q3 2006 versus Q4 2005. - The heterogenic characteristics continues 5% Percentage of Group revenues, Q4 2006 Reported Oct–Dec % Oct–Dec
Slide 15: Purchased Debt Investments 2001–2006
Purchased Debt Investments 2001–2006 SEK M 1000 900 800 700 600 500 870 400 822 300 200 258 267 100 201 106 0 2001 2002 2003 2004 2005 2006 15
Slide 16: Purchased Debt book value 2001–2006
Purchased Debt book value 2001–2006 SEK M 1400 1200 1000 800 1318 600 933 400 200 313 340 391 225 0 2001 2002 2003 2004 2005 2006 16
Slide 17: Purchased Debt
Purchased Debt - PD investments in Q4(06) was SEK 389.9M vs SEK 195.8M in Q4(05) -Total investments during the twelve months were SEK 869.7M vs SEK 821.7M same period last year - No. of portfolios at end of Q4: 14% 1,205 in a total of 20 countries. Percentage of Group revenues, Q4 2006 Reported numb
Slide 18: A broad indication going forward
A broad indication going forward Book value 31 Dec 2006: SEK 1,318 M => + 41% y-o-y (SEK 933 M) Gross collection: Book value x 2 Cash flow distribution of Gross collection 2006 (31%) 2007 27% (20%) 2008 19% (15%) 2009 14% (12%) 2010 11% (8%) 2011 8% (6%) A slightly higher mix 2012 6% (4%) of bank po
Slide 19: Segmental distribution of portfolios
Segmental distribution of portfolios Other, 12% (13) Mail order, 1% (5) Finance, 11% (7) Bank loan, 53% (50) Telecom, 13% (11) Credit card, 10% (14) Distribution of portfolios by purchase price, end of December 2006 (end of September 2006) 19
Slide 20: Cash flow statement – Q4 and FY 2006
Cash flow statement – Q4 and FY 2006 SEK M Q4 Q4 Dev. Jan–Dec Jan–Dec Dev. 2006 2005 % 2006 2005 % Operating earnings (EBIT) 197.8 120.3 64.4 586.7 503.6 16.5 Income tax paid –47.1 –27.2 73.2 –164.5 –74.7 120.2 Change in working capital –36.9 20.7 –178 7.6 –5.5 n/a Cash flow from operating 122.0 159
Slide 21: Balance Sheet – Highlights
Balance Sheet – Highlights SEK M 29 Dec 30 Dec Dev. 2006 2005 % Total assets 4,461.5 4,136.0 7.9 Goodwill 1,524.4 1,573.4 –3.1 Total financial fixed assets 1,382.4 965.4 43.2 where of Purchased Debt 1,317.9 933.0 41.3 Shareholders’ equity 1,492.6 1,316.1 13.4 Net debt/equity ratio, % 98.1 90.6 – 21
Slide 22: Credit Management Services
Credit Management Services - As of Q1 2007 we will start to report and comment on Credit Management Services besides our comments on Purchased Debt. - This new segment is a merger of historic figures in Consumer Collection & Debt Surveillance, Commercial & International Collection and 86% Other Serv
Slide 23: IJ Group full year 2006
IJ Group full year 2006 2006 AC 2005 LY Deviation Total revenues 2 939,6 2 823,2 4,1% Operating Cost Total -2 353,4 -2 320,2 1,4% Cost of sales -1 705,9 -1 679,5 1,6% Sales & marketing -261,9 -273,1 -4,1% General & administration -385,6 -367,6 4,9% Part in assoc companies 0,4 0,7 - EBIT 586,6 503,7
Slide 24: Accounting for purchased portfolios
Accounting for purchased portfolios SEK M FY 2006 Gross collection 812.1 Amortization –409.8 Reported revenues 402.3 Commission + service line costs –240.5 Operating earnings (EBIT) 161.8 EBIT margin 40.2% 24
Slide 25: Solid performance in Q4 2006
Solid performance in Q4 2006 • The Credit Management Service business delivers improved performance - Southern Europe double digit growth in 6 consecutive quarters - Finland and Switzerland solid performance - UK and Norway on track • Purchased Debt activity better than expected - Record number of p
Slide 26: Intrum Justitia Group
Intrum Justitia Group Europe’s leading Credit Management Services company Disclaimer: Except for the historical information contained herein, the matters discussed in this presentation include forward looking statements that involve risk and uncertainties that could cause actual results to differ ma
Slide 27: Financial calendar 2007
Financial calendar 2007 • Annual Report 2006 End of March 2007 on www.intrum.com • Interim Report January–March 2007 April 24, 2007 • Annual General Meeting in Stockholm April 25, 2007 • Capital Markets Day in Helsinki May 22, 2007 • Interim Report January–June 2007 July 26, 2007 • Interim Report Ja
Slide 28: Shareholders’ structure, December 31
Shareholders’ structure, December 31 Ten largest shareholders = 48.1% Number of Capital and No of shares: 77,956,251 shares votes, % Landsbanki Íslands 9,129,784 11.7 Cevian Capital 7,846,494 10.1 Lannebo Funds 4,643,410 6.0 SEB Funds 3,387,410 4.3 Parkerhouse Investments 3,000,000 3.8 Didner & Gerg