Slide 1: Q4 2022
Q4 2022 17 February 2023
Slide 2: Q4 and full year highlights
Q4 and full year highlights Financial update Outlook Q&A
Slide 3: Financial highlights for the quarter on continuing operations
Financial highlights for the quarter on continuing operations Strong EBITDA margin – reaching 49% for the quarter • EBITDA of EUR 31m, up from EUR -17m last year Cash EBITDA growth of 18% y-o-y • Cash EBITDA of EUR 58m, up from EUR 49m last year Profit after tax of EUR 10m, up from EUR -32m last yea
Slide 4: 2022 is a material step in the right direction on key financials
2022 is a material step in the right direction on key financials NPL investments Book value of NPL portfolios Gross revenue +10% (EUR million) (EUR billion, end of period) (EUR million) 449 1.3 337 398 1.1 1.1 308 1.0 280 289 288 0.7 198 208 153 114 0.3 99 76 0.1 40 ’16 ’17 ’18 ’19 ’20 ’21 ’22 ’16 ’
Slide 5: 2022 is a material step in the right direction on key ratios
2022 is a material step in the right direction on key ratios Gross IRR on the total NPL book NPL cost-to-collect Return on equity to shareholders1 (%, end of period) (%) (%) 17.3% 59% 9% 6% 16.3% 48% 1% 2% 16.0% 15.8% 45% 43% 44% 15.7% 39% -6% -6% -9% ’16 ’17 ’18 ’19 ’20 ’21 ’22 ’16 ’17 ’18 ’19 ’20
Slide 6: Discontinued operation is expected to be fully exited during the year
Discontinued operation is expected to be fully exited during the year REO book value (EUR million, end of period) 197 157 • REO book value down to only EUR 8m at year- end 124 • Expect to fully exit discontinued operations during 2023 75 • 1pp uplift in return on equity in 2022 excluding 27 disconti
Slide 7: Axactor on track to deliver material growth on NPL in 2023
Axactor on track to deliver material growth on NPL in 2023 Interest income is the key NPL top-line driver… … with minimum 10% estimated growth in 2023 Interest income from purchased loan portfolios (EURm, 2016-2023e) +10% NPL segment with several similarities to how a bank report income 206 187 9 •
Slide 8: Going forward we will stick to our successful strategy developed in 2020
Going forward we will stick to our successful strategy developed in 2020 1 Accretive investments • Invest in accretive portfolios with attractive gross IRR driving margin expansion on NPL • Target of reaching total backbook Gross IRR above 20%. Currently experiencing Gross IRR of 22+% on newly signe
Slide 9: Financial update
Q4 and full year highlights Financial update Outlook Q&A
Slide 10: Group: Continued growth on gross revenue y-o-y
Group: Continued growth on gross revenue y-o-y Gross revenue (EUR million) +13% 87 89 81 83 82 76 79 78 15 15 14 12 13 70 14 13 13 • Gross revenue is up 13% y-o-y 11 • NPL gross revenue growth of 15% y-o-y • 3PC gross revenue growth of 5% y-o-y 68 70 73 69 74 64 59 64 65 • Significant NPL investment
Slide 11: NPL segment: Steady total income growth with stable margins
NPL segment: Steady total income growth with stable margins NPL Total income and CM% (EUR million, and %) NPL Total income CM % Total income growth drivers 48 44 46 46 40 41 • Interest income increased by 16% • Book value of NPL portfolios up 14% y-o-y 30 76% 79% 28 76% 77% 78% 75% • Gross IRR incre
Slide 12: 3PC segment: Total income growth of 5% compared to last year
3PC segment: Total income growth of 5% compared to last year 3PC Total income and CM% (EUR million and %) +5% 15 15 14 14 13 13 13 12 11 • Total income growth of 5% y-o-y driven by the acquisition of C.R. Service 44% 47% 37% 41% 41% 34% 35% 30% • Year-end bonuses came in lower this year compared to
Slide 13: Group: Strong EBITDA margin expansion through 2022 and Cash EBITDA growth of 18%
Group: Strong EBITDA margin expansion through 2022 and Cash EBITDA growth of 18% compared to last year Total income EBITDA and EBITDA-margin Cash EBITDA (EUR million) (EUR million and %) (EUR million) +350% 50% 51% 48% 49% -68% 63 38%47% +18% 60 59 28% 33% -7% 57 31 54 30 30 58 58 52 28 55 25 52 54
Slide 14: Interest expenses on borrowings expected to increase slightly in Q1
Interest expenses on borrowings expected to increase slightly in Q1 driven by accretive investments Quarterly interest expense on borrowings (EUR million) ACTUAL - Q4 2022 16.1 Interest rates 0.0 • Interest rates are increasing but expected to be fully offset by interest rate hedge1 • Accretive inve
Slide 15: Refinancing of the RCF is going according to the plan. Awaiting refinancing of ACR02
Refinancing of the RCF is going according to the plan. Awaiting refinancing of ACR02 Facility Facility type size1 Maturity profile Refinancing strategy Banks - Strong relationship with the banks. Refi. process initiated and expected to be finished before the summer Bank 545m RCF ACR02 • Secure funds
Slide 16: ROE for the year came in at 10% on continuing operations
ROE for the year came in at 10% on continuing operations Return on equity to shareholders (%) 10% Continuing operations 6% 9% ROE to shareholders 1% 2% -6% -6% -9% 2016 2017 2018 2019 2020 2021 2022 16
Slide 17: Financial targets announced 11 January 2023
Financial targets announced 11 January 2023 Dimension Targets 2023 Targets 2024 and beyond Growth • NPL investments of EUR 100 - 150 million1 • NPL investments of EUR 200 – 300 million Profit • Minimum 9% ROE • To be announced towards end of year Returns • 20 - 50% dividend pay-out ratio2 • 20 - 50%
Slide 18: Outlook
Q4 and full year highlights Financial update Outlook Q&A
Slide 19: Outlook
Outlook Key driver Outlook Accretive investments + • Highly accretive gross IRR on new deals of 22+% compared to the backbook of 17% • NPL: Minimum 10% growth in interest income in 20231 Growth + • 3PC: Expect market growth driven by increased defaults in the society • Interest rate hedge secures fl
Slide 20: Q&A
Q4 and full year highlights Financial update Outlook Q&A
Slide 21: Supporting information
Supporting information
Slide 22: NPL investment commitments of EUR 68m next 12 months
NPL investment commitments of EUR 68m next 12 months Quarterly NPL investments (EUR million) 93 80 69 54 Additional forward 47 flow agreements and one-off acquisitions 32 31 expected to further increase NPL 22 20 investments 16 12 9 8 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 ’20 ’21 ’21 ’21 ’21 ’22 ’2
Slide 23: ERC increasing by 19% y-o-y driven by increased NPL investments in 2022
ERC increasing by 19% y-o-y driven by increased NPL investments in 2022 ERC development Forward ERC profile by year (EUR million) (EUR million) +19% 2,545 310 306 2,367 2,259 2,279 271 2,169 2,159 2,119 2,130 2,141 237 212 186 168 152 138 125 114 100 84 75 67 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Y1 Y2 Y3 Y4 Y
Slide 24: 3PC volumes by geographic region
3PC volumes by geographic region 3PC Total income split by geographic region 1% 3% 14% • Spain accounting for 53% of total income on 3PC Q4’22 Total income 19% EUR 15.0m 53% • Italy share of Total income increased to 19% (5%) following the acquisition of C.R. Service and subsequent organic growth in
Slide 25: Discontinued operations
Discontinued operations - REO book value reduced to EUR 8m ultimo Q4 REO Total income and net profit1 REO book value REO number of units (EUR million and %) (EUR million) Total Income Net profit 12 75 2,553 10 65 2,259 9 8 8 1,908 51 1,640 5 4 42 3 1,322 2 1,106 27 946 835 21 711 4 16 -3 -3 -2 -2 -2
Slide 26: Bond covenants (1/2)
Bond covenants (1/2) - Secured LTV is increasing as bond repurchase is funded by drawing on the secured RCF Loan-to-value - covenant ≤75% Secured Loan-to-value - covenant ≤65% (Total portfolio book value divided by net interest-bearing debt) (Total portfolio book value divided by secured net interes
Slide 27: Bond covenants (2/2)
Bond covenants (2/2) - Leverage ratio increasing due to 1) investment ramp-up and 2) discontinued operations Leverage ratio - covenant ≤4.0x Interest coverage ratio - covenant ≥4.0x (Net interest-bearing debt divided by LTM Pro-forma adjusted cash EBITDA (Pro-forma adjusted cash EBITDA divided by ne
Slide 28: Terms and abbreviations
Terms and abbreviations Abbreviations 3PC Third-party collection AGM Annual general meeting APM Alternative performance measures ARM Accounts receivable management B2B Business to business Terms B2C Business to consumer Active forecast Forecast of estimated remaining collection on NPL portfolios BoD
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