Slide 1: Presentation Q3 2023
AXACTOR Presentation Q3 2023
Slide 2: Q3 highlights
Q3 highlights Financial update Outlook Q&A
Slide 3: Financial highlights for the quarter on continuing operations
Financial highlights for the quarter on continuing operations Gross revenue growth of 3% y-o-y • 5% y-o-y with constant currency Cash EBITDA growth of 2% y-o-y • 5% y-o-y with constant currency Healthy EBITDA margin of 54% • EBITDA of EUR 34m, up from EUR 30m last year Annualized return on equity of
Slide 4: Key profit improvement initiatives
Key profit improvement initiatives Funding • Secure long-term funding and stable credit rating Done • Accretive investments – Solve old claims with low profitability and Portfolio profitability Ongoing replace them with claims with high profitability • Invest heavily in data-driven valuation and -op
Slide 5: After successfully refinancing both the RCF and ACR02 there are no maturities until June 2026
Funding Accretive investments Cost position After successfully refinancing both the RCF and ACR02 there are no maturities until June 2026 Facility Facility Current type size1 draw2 Maturity profile Comments • 3-year facility with option to prolong two more Bank years, dependent on separate credit ap
Slide 6: Stable positive development has secured affirmation of credit ratings
Funding Accretive investments Cost position Stable positive development over time has secured affirmation of credit ratings despite industry turmoil EBITDA and EBITDA-margin Unchanged credit rating since initiation1 (EUR million and %) 34 33 30 30 31 30 28 Rating B1 B 50% 49% 49% 54% 48% 51% 50% Out
Slide 7: NPL gross IRR on the total book is steadily increasing
Funding Accretive investments Cost position NPL gross IRR on the total book is steadily increasing - Currently signing deals with a gross IRR almost twice as high as the total NPL book Signed Dec. Total NPL book ’22 or later Gross IRR 35% 34.5% • Gross IRR for new acquisitions upheld at same 30% lev
Slide 8: NPL investment estimate of EUR 100 - 150m for the year
Funding Accretive investments Cost position NPL investment estimate of EUR 100 - 150m for the year NPL investments (EUR million) 449 450 398 400 350 • NPL investment estimate of EUR 100 - 150m 288 for the year 300 250 • Invested EUR 19m during the quarter and 198 208 200 EUR 92m YTD Estimate 2023 15
Slide 9: NPL cost-to-collect stabilizing at a record low level
Funding Accretive investments Cost position NPL cost-to-collect stabilizing at a record low level - Materializing in an EBITDA percentage among the best in the industry Axactor NPL cost-to-collect per year1 59% 48% 45% 44% 43% 39% 37% ’17 ’18 ’19 ’20 ’21 ’22 ’23 YTD 9 1) Cost is calculated as segmen
Slide 10: Axactor is exiting the 3PC market in Sweden and Finland to increase profits
Funding Accretive investments Cost position Axactor is exiting the 3PC market in both Sweden and Finland to increase profits 3PC total income split by geography YTD Q3‘23 EUR 39m 49% • Axactor has not been able to grow sizable 3PC revenue in Sweden and Finland • Furthermore, the market prices are lo
Slide 11: Financial update
Q3 highlights Financial update Outlook Q&A
Slide 12: Group: Continued growth on gross revenue y-o-y
Group: Continued growth on gross revenue y-o-y Gross revenue (EUR million) +3% +17% 91 87 89 82 83 84 79 78 15 13 15 70 13 13 13 13 • Gross revenue is up 3% y-o-y 14 11 • NPL gross revenue growth of 4% y-o-y • 3PC gross revenue growth of -3% y-o-y 73 74 78 72 64 65 69 70 59 • Estimated gross revenue
Slide 13: 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 % +13% • Satisfying total income growth of 13% y-o-y +63% 52 52 with stable margins, despite macroeconomic 48 49 44 46 46 headwinds 28 • Collection performance of 98% for the
Slide 14: 3PC segment: Total income and margins under pressure
3PC segment: Total income and margins under pressure 3PC Total income and CM% (EUR million and %) +20% -3% 15 15 14 13 13 13 13 13 • 3PC total income growth of -3% y-o-y 11 • Competition puts pressure on both total income and contribution margin 47% 37% 41% 41% 35% 34% 31% 33% 33% • Axactor is curre
Slide 15: Group: Growth y-o-y in all key parameters despite headwind on currency and macro
Group: Growth y-o-y in all key parameters despite headwind on currency and macro Total income EBITDA and EBITDA-margin Cash EBITDA (EUR million) (EUR million and %) (EUR million) +9% +51% 50% 51% 65 48% 49% 49% 50%54% 63 64 +2% 62 +22% 60 59 33% 33 34 57 30 30 31 30 60 28 58 58 54 55 49 51 49 44 39
Slide 16: Stable ROE of 9% on continuing operations last twelve months
Stable ROE of 9% on continuing operations last twelve months – despite increased cost of funding Return on equity to shareholders (%) 9% 9% Continuing operations 1% 6% 8% ROE to shareholders 1% 2% -6% -6% -9% 2016 2017 2018 2019 2020 2021 2022 LTM 16
Slide 17: Outlook
Q3 highlights Financial update Outlook Q&A
Slide 18: Outlook
Outlook Key driver Outlook Accretive investments + • Highly accretive gross IRR on new deals of 30+% compared to the backbook of 18% • NPL: Minimum 10% growth in interest income in 20231 Growth + • 3PC: Competition puts pressure on both total income and contribution margin • Interest rate hedge secu
Slide 19: Q&A
Q3 highlights Financial update Outlook Q&A
Slide 20: Supporting information
Supporting information
Slide 21: NPL investment commitments of EUR 20m next 12 months
NPL investment commitments of EUR 20m next 12 months Quarterly NPL investments (EUR million) 93 80 69 54 Additional forward 47 flow agreements and 40 one-off acquisitions 32 33 expected to further increase NPL 19 investments 12 5 2 1 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 ’21 ’21 ’22 ’22 ’22 ’22 ’23
Slide 22: ERC increasing by 9% y-o-y driven by increased NPL investments in 2022
ERC increasing by 9% y-o-y driven by increased NPL investments in 2022 ERC development Forward ERC profile by year (EUR million) (EUR million) +9% 2,545 2,523 2,563 2,586 312 302 2,367 278 2,259 2,279 2,130 2,141 252 216 191 173 157 142 129 116 95 83 74 66 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Y1 Y2 Y3 Y4 Y5 Y
Slide 23: 3PC volumes by geographic region
3PC volumes by geographic region 3PC Total income split by geographic region 4% 2% 12% Q3’23 • Spain accounting for 49% of total income on 3PC Total income 22% EUR 12.7m 49% • Italy share of Total income increased to 22% (17%) following organic growth in Italy 11% FIN DEU ITA NOR ESP SWE 23
Slide 24: Discontinued operations
Discontinued operations - REO book value reduced to EUR 4m ultimo Q3 REO Total income and net profit1 REO book value REO number of units (EUR million and %) (EUR million) Total Income Net profit 8 8 42 1,640 5 4 1,322 3 2 1,106 2 27 1 0 946 21 835 -1 -1 711 695 -2 -2 -2 -2 16 -3 -3 13 516 451 8 6 5
Slide 25: Bond covenants (1/2)
Bond covenants (1/2) Loan-to-value - covenant ≤80% Secured Loan-to-value - covenant ≤60% (Net interest-bearing debt divided by total portfolio book value) (Secured net interest-bearing debt divided by total portfolio book value) 80% 60% 73% 73% 73% 73% 72% 72% 72% 72% 37% 38% 39% 69% 35% 35% 33% 30%
Slide 26: Bond covenants (2/2)
Bond covenants (2/2) Leverage ratio - covenant ≤4.0x Interest coverage ratio - covenant ≥3.0x (Net interest-bearing debt divided by LTM Pro-forma adjusted cash EBITDA (Pro-forma adjusted cash EBITDA divided by net interest expenses) 4.0 3.8 3.8 5.3 5.4 5.2 5.2 5.2 3.8 5.0 3.7 4.6 3.6 3.6 4.2 3.5 3.8
Slide 27: 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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