Slide 1: Q2 2022
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Slide 2: Q2 highlights
Q2 highlights Financial update Outlook Q&A
Slide 3: Financial highlights for the quarter
Financial highlights for the quarter Increasing NPL investment estimate to EUR 250 - 300m for the year • NPL investment of 2.3x – 2.8x replacement capex in 2022 • Total committed capex EUR 223m so far in 2022 Cash EBITDA growth of 5% y-o-y • EBITDA of EUR 30m, up from EUR 25m last year Annualized re
Slide 4: Axactor is pursuing a strategy based on three strategic levers
Axactor is pursuing a strategy based on three strategic levers Blending the book • Solve old claims with low gross IRR and replace them with new higher gross IRR claims • Accelerate blending and secure growth through investing significantly above replacement capex Cost leadership • Axactor was incep
Slide 5: First half 2022 puts Axactor back to growth
First half 2022 puts Axactor back to growth - Second half of 2020 and 2021 used to stabilize operations after rapid growth NPL ERC and company acquisitions (EUR million) 2,259 2,279 2,153 2,160 2,169 2,159 2,119 2,130 2,141 2,038 2,052 1,877 1,721 1,473 1,388 821 726 729 633 493 507 427 253 317 61 1
Slide 6: NPL gross IRR on the total book is steadily increasing
NPL gross IRR on the total book is steadily increasing - Current market prices significantly more favorable compared to the total book Gross IRR on the total NPL book1… …and per vintage2 24% 23.4% • The single most important profit 22% improvement initiative 21.4% 20.4% Medium term average expected
Slide 7: NPL investment estimate increased to EUR 250-300m for the year
NPL investment estimate increased to EUR 250 - 300m for the year – securing growth on NPL NPL investments (EUR million) 500 462 450 398 400 NPL investments of EUR 47m in Q2, with overflow 350 of several deals to Q3 300 Estimate 2022 250 223 206 208 NPL investment estimate increased to EUR 250 - 200
Slide 8: Axactor EBITDA percentage among the best in the industry
Axactor EBITDA percentage among the best in the industry – driven by a leading cost position EBITDA estimates selected peers (%) Peer 1 63% • Axactor delivered an EBITDA of 50% for the Axactor 49% quarter and 49% year to date Peer 2 43% • The key driver is the industry leading position on Peer 3 41%
Slide 9: Financial update
Q2 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) +5% +28% 87 81 83 79 78 74 14 76 13 70 15 • Gross revenue is up 5% y-o-y from a solid 65 12 14 13 11 11 quarter last year 10 • NPL gross revenue growth of 4% y-o-y 70 73 • 3PC gross revenue growth of 13% y-o-y 63 68 64 64 65
Slide 11: NPL segment: Total income growth of 13% with stable margins
NPL segment: Total income growth of 13% with stable margins NPL Total income and CM% (EUR million, and %) NPL Total income CM % +13% +213% 46 44 42 40 41 Total income growth drivers 30 • Gross revenue growth of 4% 28 3,488% • Collection performance of 99% 77% 76% 79% 76% 77% • Reduced amortization r
Slide 12: 3PC segment: Total income growth of 13% compared to last year
3PC segment: Total income growth of 13% compared to last year 3PC Total income and CM% (EUR million and %) +13% +34% 14 15 14 13 13 • Total income growth of 13% y-o-y driven by the 11 12 11 acquisition of C.R. Service 10 47% 40% 44% 37% 41% • Marginal organic growth on 3PC driven by Spain 30% 34% an
Slide 13: Group: Total income growth of 13% and Cash EBITDA growth of 5%
Group: Total income growth of 13% and Cash EBITDA growth of 5% compared to last year Total income EBITDA and EBITDA-margin Cash EBITDA (EUR million) (EUR million and %) (EUR million) +13% 52% 47% 48% +136% 50% 60 38% +5% 57 28% 33% +37% 53 52 54 58 55 52 44 -12% 49 49 49 39 30 44 44 27 25 28 40 20 1
Slide 14: Interest rate sensitivity
Interest rate sensitivity - 1%-point increase in interest rates will increase quarterly interest expense by EUR 1.9m Quarterly interest expense on borrowings (EUR million) Q2 actual 14.3 Changes in Q2 -0.8 Q2 restated 13.5 • Interest rates, debt structure and capitalized loan fees per 30 June 2022 1
Slide 15: Q2 is a continuation of the positive development from Q1
Q2 is a continuation of the positive development from Q1 - 10% ROE year to date 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 YTD ’22 15
Slide 16: Axactor has a robust balance sheet positioned for growth
Axactor has a robust balance sheet positioned for growth Equity • Satisfying equity ratio of 29% Liquidity • Available cash of EUR ~30m • Unused funding line of EUR ~125m on the revolving credit facility Covenant headroom • Satisfying headroom to bond covenants • Loan to value of 72% vs. the covenan
Slide 17: Outlook
Q2 highlights Financial update Outlook Q&A
Slide 18: Outlook
Outlook Increased cost of funding • Expect further increase in interest rates • 1%-point increase in interest rate will increase quarterly interest cost by EUR 1.9m and reduce ROE by 1.5% Mixed outlook on backbook collections • Rising inflation and interest rates • Low unemployment rates, increasing
Slide 19: Q&A
Q2 highlights Financial update Outlook Q&A
Slide 20: Supporting information
Supporting information
Slide 21: NPL investment commitments of EUR 108m next 12 months
NPL investment commitments of EUR 108m next 12 months Quarterly NPL investments (EUR million) 80 62 54 47 Additional forward flow agreements and 35 one-off acquisitions 32 28 29 expected to further 26 25 22 increase NPL 16 investments 12 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Q4
Slide 22: ERC increasing by 8% y-o-y driven by increased NPL investments
ERC increasing by 8% y-o-y driven by increased NPL investments in 2022 ERC development Forward ERC profile by year (EUR million) (EUR million) +8% 2,259 2,279 289 2,153 2,160 2,169 2,159 2,119 2,130 2,141 274 244 221 189 167 151 136 122 110 99 89 73 63 52 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Q1
Slide 23: 3PC volumes by geographic region
3PC volumes by geographic region 3PC Total income split by geographic region 4% 1% 15% Q2’22 • Spain accounting for 52% of total income on 3PC Total income 15% EUR 14.6m 52% • Italy share of Total income increased to 15% following the acquisition of C.R. Service 11% FIN DEU ITA NOR ESP SWE 23
Slide 24: Discontinued operations
Discontinued operations - REO book value reduced to EUR 16m ultimo Q2 REO Total income and net profit1 REO book value REO number of units (EUR million and %) (EUR million) Total Income Net profit 12 83 3,364 78 10 75 2,957 9 9 65 2,553 8 8 6 2,259 5 51 4 1,908 42 1,640 1,322 27 1,106 21 946 2 4 16 -
Slide 25: 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-value1 - Covenant ≤75% Secured Loan-to-value1- Covenant ≤65% (Total portfolio book value divided by net interest-bearing debt) (Total portfolio book value divided by secured net intere
Slide 26: Bond covenants (2/2)
Bond covenants (2/2) - Leverage ratio increasing due to 1) investment ramp-up and 2) discontinued operations Leverage ratio1 - Covenant ≤4.0x Interest coverage ratio1- Covenant ≥4.0x (Net interest-bearing debt divided by LTM Pro-forma adjusted cash EBITDA (Pro-forma adjusted cash EBITDA divided by n
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 B2C Business to Consumer BoD Board of Directors Terms BS Consolidated Statement of Financial Position (Balance
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