B2 Impact Asa · OSL:B2I
B2 Impact Asa — B2Holding — Debt Investor Presentation (September 2016)
37 slides from B2 Impact Asa's debt investor presentation, Sep 19, 2016
Slide 1: Investor presentation
Investor presentation -- 19 September 2016
Slide 2: Important information (1/2)
Important information (1/2) This Presentation (the “Presentation") has been produced by B2Holding AS (the “Company”) solely for use in connection with a contemplated offering of bonds by the Company (the “Bonds”) initiated in September 2016 (the “Offering”) as described herein, and may not be reprod
Slide 3: Important information (2/2)
Important information (2/2) Neither this Presentation nor any copy of it nor the information contained herein is being issued, and nor may this Presentation nor any copy of it nor the information contained herein be distributed directly or indirectly, to or into Canada, Australia, Hong Kong, Italy,
Slide 4: Risk factors (1/3)
Risk factors (1/3) Investing in the Bonds involves inherent risks. Prospective investors should carefully consider, among other things, the risk factors for the Bond Issue before making an investment decision. The risk factors included below are some of the main risk factors for the Bond Issue. The
Slide 5: Risk factors (2/3)
Risk factors (2/3) There can be no assurances that the Group will continuously be able to identify and/or acquire sufficient volume of portfolios at appropriate prices, leading to disruptions in the Group's operations, loss of efficiency, low employee loyalty, fewer experienced employees and excess
Slide 6: Risk factors (3/3)
Risk factors (3/3) Change of control - the Company’s ability to redeem the Bonds with cash may be limited. Upon the occurrence of a change of control event, each individual bondholder shall have a right of prepayment of the Bonds as set out in the Bond Agreement. However, it is possible that the Iss
Slide 7: Agenda
Agenda 1. Transaction overview 2. Refresher on B2H 3. Industry dynamics and B2H's market position 4. Portfolio overview 5. Financials 6. Appendix |7
Slide 8: Summary of B2H02 bond terms
Summary of B2H02 bond terms Issuer: B2Holding ASA Status of the bond: Senior unsecured Initial amount: EUR 175 million Borrowing limit: EUR 250 million Use of proceeds: General corporate purposes Issue price: 100% of par value Coupon rate: 3m EURIBOR + 700bps p.a., quarterly interest payments EURIBO
Slide 9: B2H01, issued in Dec'15: A protective covenant package and attractive credit metrics
B2H01, issued in Dec’15: A protective covenant package and attractive credit metrics Key terms B2H01 (issued in December 2015) Simplified legal structure Status of the bond: Senior unsecured EUR 150m Sileo Size: EUR 150 million B2Holding ASA bond issue Finans Issue price: 100% of par value Coupon ra
Slide 10: Since the first bond issue, B2H has become a listed entity with a more diversified asset base
Since the first bond issue, B2H has become a listed entity with a more diversified asset base Developments since the last bond issue in Dec’15 Share price performance (NOK/share) 13.5 MCAP (NOKm) The listing has improved the equity position and widened the shareholder base 13.0 12.8 - B2H raised N
Slide 11: Credit highlights
Credit highlights 1 Leading debt purchase Leading position in Poland, the Nordics and South East Europe (“SEE”) within debt purchase and collection company in the Nordics Established relationships with key providers of non-performing loan (“NPL”) portfolios and Central Eastern Europe Best-in c
Slide 12: Agenda
Agenda 1. Transaction overview 2. Refresher on B2H 3. Industry dynamics and B2H's market position 4. Portfolio overview 5. Financials 6. Appendix | 12
Slide 13: 12 platforms managing over 2,500 portfolios in 15 countries
12 platforms managing over 2,500 portfolios in 15 countries, estimated to generate NOK ~8.2bn in collection Mature market Platforms The Nordics • Stable flow • Mainly unsecured debt • High cash flow projection certainty 12 • High price in % of face value Countries with portfolios Poland • Large and
Slide 14: B2Holding group functions
B2Holding group functions CEO Olav Dalen Zahl Office Manager Ingeborg Andresen BD / Strategy / M&A CFO Chief Group Controller Head of Legal Chief Investment Officer Henrik Wennerholm Harald Henriksen Erik Just Johnsen Thor Christian Moen Jeremi Bobowski Rasmus Hansson CEO CEO CEO CEO CEO CEO Reg. ma
Slide 15: Focus on all critical elements needed for securing attractive purchases and collection
Focus on all critical elements needed for securing attractive purchases and ensuring successful collection processes Data collection and analysis People business Centre of excellence Data People Ability to attract talent Critical to be regarded as trusted partner Optimal collection strat
Slide 16: Agenda
Agenda 1. Transaction summary 2. Refresher on B2H 3. Industry dynamics and B2H's market position 4. Portfolio overview 5. Financials 6. Appendix | 16
Slide 17: Debt purchasing is highly attractive for both buyers and sellers
Debt purchasing is highly attractive for both buyers and sellers SELLERS BUYERS Make provisions on non-performing loans, writing down the book Acquire the NPL loans at a discount to face value, but at a higher value of the receivable price than the banks’ book value 1 Banks Shadow banks 2 Debt Inter
Slide 18: Attractive industry characteristics based on strong macroeconomic and industry specific drivers
Attractive industry characteristics based on strong macroeconomic- and industry specific drivers The level of NPLs on banks’ balance sheets Face value of European bank NPLs EURbn 1,000 935 +11% M A 800 C 600 R 400 O 200 0 2009 2010 2011 2012 2013 2014 Q3 2015 The banks’ propensity to sell portfolios
Slide 19: B2Holding has become one of the leading debt purchasers globally
B2Holding has become one of the leading debt purchasers globally Largest debt purchasers operating in Europe Gross estimated remaining collections (ERC) Nordic 4,984 4,800 UK 1) 2,493 2,043 1,930 Poland 1,819 1,814 2) 1,625 1,562 SEE 888 850 320 285 Source: ERC figures for B2Holding, Arrow, Intrum,
Slide 20: Offering a mix of first mover advantage and mature market presence
Offering a mix of first mover advantage and mature market presence Typical development stages of debt purchasing markets (illustrative only) Early phase Growth phase Mature phase • Regulatory or Cultural barriers and • Increasing competition across debt • Large share of NPL stock sold annually «deni
Slide 21: Agenda
Agenda 1. Transaction summary 2. Refresher on B2H 3. Industry dynamics and B2H's market position 4. Portfolio overview 5. Financials 6. Appendix | 21
Slide 22: Highly diversified portfolio yielding stable and predictable cash flows
Highly diversified portfolio yielding stable and predictable cash flows Portfolio statistics Geographic split (ERC) Type split (book value) NOK NOK Claims (#): Finland and Baltics 12% Secured ~4.5m Rest of Nordics 11% 39% Poland 28% NOK 8.2bn NOK 4.0bn Face value (NOK): 72% ~52bn 38% Unsecured SEE L
Slide 23: Total Gross ERC passed NOK 8bn in the second quarter
Total Gross ERC passed NOK 8bn in the second quarter Development in Total Gross ERC Total Gross ERC split by estimated collection time NOK million NOK million Baltics 8,186 1,721 1,733 1,551 Finland Rest of Nordics 1,144 SEE 6,822 643 Poland 6,490 448 298 208 236 126 77 1 2 3 4 5 6 7 8 9 10 >10 4,43
Slide 24: Agenda
Agenda 1. Transaction summary 2. Refresher on B2H 3. Industry dynamics and B2H's market position 4. Portfolio overview 5. Financials 6. Appendix | 24
Slide 25: Financial highlights as of H1'16
Financial highlights as of H1’16 Increasing collections and cash EBITDA Increasing profits and acquisition activity Solid balance sheet and return on capital Gross Cash collection (NOK)1) Adjusted net profit (NOK)2) Equity ratio Adjusted ROE2) +47% +5% Q2’16: Q2’16 LTM: 840 75 79 572 44.3% 16.1% H1’
Slide 26: Continuing the disciplined cost control
Continuing the disciplined cost control Total operational costs per quarter Operational costs split NOK million NOK million Personnel costs Non-recurring costs 107 Higher costs due to an Recurring costs 93 72 81 increase in number of 60 employees from 1,186 to 228 1,374 (FTEs) and NOK 5,1 million in
Slide 27: Income statement Q2'16
Income statement Q2’16 Income statement Comments 2015 NOKm Q2’15 Q1’16 Q2’16 Strong operational performance audited in Q2, with cash EBITDA Interest income on purchased loan portfolios1 189 915 233 284 growing 49% on a y-o-y basis Revenue from external collection 23 104 24 26 Other operating revenue
Slide 28: A diversified balance sheet structure, leverage profile to support controlled growth
A diversified balance sheet structure, leverage profile to support controlled growth Balance sheet – Q2’16 Prudent financial policy Long-term target equity ratio of 30% - RCF covenant of 28% equity ratio Additional liquidity 1,300 1,300 Undrawn RCF Maintain adequate liquidity (undrawn RCF capacity a
Slide 29: Balance sheet Q2'16
Balance sheet Q2’16 Balance sheet Comments 2015 NOKm Q2’15 Q1’16 Q2’16 Strong growth in NPL and loan audited receivables with a 81% increase Tangible and intangible assets 396 418 404 499 y-o-y Other long-term financial assets 2 2 2 2 Net debt of ~NOK 2.2bn and Non-performing loans portfolio 2,196 3
Slide 30: Agenda
Agenda 1. Transaction summary 2. Refresher on B2H 3. Industry dynamics and B2H's market position 4. Portfolio overview 5. Financials 6. Appendix | 30
Slide 31: Cash revenue mix
Cash revenue mix Cash revenue mix Comments NOK million 43% of net operating revenues from Poland vs. 52% in 2015 Cash revenue mix as of H1’16 Interest income and excess cash collection on purchased loan portfolio representing 90% of total cash revenues Interest income Income from external collection
Slide 32: Financial highlights: Cash flow
Financial highlights: Cash flow Consolidated cash flow Comments 2015 NOKm Q2’15 Q1’16 Q2’16 Strong Cash flow from operation audited Cash EBITDA 176 829 272 264 q-o-q Interest expenses paid -17 -91 -47 -39 Working capital and FX revaluation -8 -145 -58 15 Portfolio investments in the Income tax paid
Slide 33: A disciplined investment process
A disciplined investment process BoD Analyse recommendations Approve critical decisions The Committee consists Approve investment strategy of the shareholders’ Investment Analyse investment representatives (the recommendations Chairman + two other), Committee Group’s CEO, CFO, CIO Review and adjust
Slide 34: The Board of Directors
The Board of Directors Jon Harald Nordbrekken Trygve Lauvdal Per Kristian Spone Former CEO of Intrum Justitia Norway Board member since 2013 Board member since 2012 Founded Aktiv Kapital in 1991, CEO Investment director at CFO of Indigo Invest AS, an until 1998, chairman from 1998 to RASMUSSENGRUPPE
Slide 35: The Management
The Management Olav Dalen Zahl Harald Henriksen Erik Just Johnsen Joined the parent to Gothia and Joined B2Holding in January 2015 Joined B2Holding in March 2013 Bank2 as a CEO in 2006, joined Mr. Henriksen held various controller Mr Johnsen held various positions in B2Holding as CEO in 2012 positio
Slide 36: Legal structure
Legal structure *) B2Holding ASA Sileo Finans AB Bond Loan (Norway) (Sweden) 90.1% 5% *) Kontant Finans Sverige Ultimo AB (Sweden) 95% Ultimo DCR SRL Revolving Credit Facility Netherlands BV (Romania) (the Netherlands) B2Kapital Holding B2Kapital d.o.o. B2Kapital d.o.o. B2Kapital GmbH Interkreditt A
Slide 37: B2Holding ASA
B2Holding ASA | Stortingsgaten 22 | P.O. Box 1642 Vika | N-0119 Oslo www.b2holding.no | Tel: +47 22 83 39 50 | E-mail: post@b2holding.no
B2Holding — Debt Investor Presentation (September 2016) on 6ix