Slide 1: Q4 2017 Axactor AB
Q4 2017 Axactor AB February 13, 2018
Slide 2: Key highlights Q4
Key highlights Q4 34.5 858 5.6 13.5 48.6 REVENUE ERC EBITDA CASH EBITDA CASH BALANCE EUR MILLION EUR MILLION EUR MILLION EUR MILLION EUR MILLION +87% y/y +171% y/y 20% margin • Co-investment partnership with Geveran established - first transaction completed • Refinancing of existing debt facility wi
Slide 3: Axactor revenue mix
Axactor revenue mix Revenue per Quarter (EUR million) Q4 Revenue Distribution per Country 35 34.5 30 SWE 24.9 * 9% GER 25 23.6 18% 19.7 20 18.5 ITA 15 Q4 7% 34.5m NOR 10 9% 5 SPA 57% 0 -5 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 GER ITA NOR SPA SWE • Significant CAPEX investments in 2H – securing 2018 growth •
Slide 4: Axactor revenue mix
Axactor revenue mix Revenue Development per Product (EUR million) 35 34.5 30 • Good balance between NPL and 3PC 24.9 * 25 23.6 • NPL segment (including REO) growing significantly on the 20 19.7 back of Q4 investments 18.5 • 87% revenue growth y/y in Q4 ‘17 driven by new business 15 secured in 2017 1
Slide 5: Collection on NPL portfolios vs. Initial business case
Collection on NPL portfolios vs. Initial business case (EUR million) Performance vs. business case 25.0 120% • Continued positive trend in collection 100% 101% performance 97% 20.0 92% 91% 100% • Effect partly driven by new collections systems and robot dialer system 22.1 80% 72% 80% 15.0 14.2 14.0
Slide 6: Financial performance 2017 vs 2016
Financial performance 2017 vs 2016 Gross Revenue (EUR million) ERC (EUR million) +159% +171% 110 105 900 858 100 800 90 700 80 70 600 60 500 50 400 41 317 40 300 30 200 20 10 100 0 0 2016 2017 2016 2017 • Revenue growth driven by NPL acquisitions in • Book value of NPL portfolios has increased from
Slide 7: Financial performance 2017 vs 2016
Financial performance 2017 vs 2016 EBITDA (EUR million) Cash EBITDA (EUR million) +328% 1586% 14,8 15 35 32,7 30 10 25 5 20 15 0 10 5 -5 0 -6,5 -10 -5 -2,2 2016 2017 2016 2017 • Profitability improves with growth in revenue and better utilization of resources • Siginificantly reduction in M&A activi
Slide 8: What we said (from Q4´15 presentation)
What we said (from Q4´15 presentation)…… Step 1 Step 2 Step 3 • Top 3 market share in debt collection in Spain • Enter new growth markets with • Establish debt collection Strategy platform and portfolio service platform in Spain • Collection of debt on acquired acquisitions in Germany an
Slide 9: 2016/2017 Major Achievements
2016/2017 Major Achievements • +900 employees Platform • System consolidation Aquisitions • One Axactor/3PC/Portfolios/ARM • € 471m book value Portfolio • € 485m Investments • € 858m est. remaining collection Acquisitions • 120 Portfolios • Unsecured/Secured/REOs • 11 rights issues • € 250m equity F
Slide 10: 2016/2017 Main Achievements/Priorities
2016/2017 Main Achievements/Priorities Group Priorities Country Priorities • Intility (IT Infrastructure) • Improve old collection system • Miratech partnership (AD/AM) • Skill based collection • ERP/Finance/HR • ARM Roll-out • Portfolio pricing • New collection system implementation • Digitalizatio
Slide 11: Portfolio Statistics
Portfolio Statistics Historical Development ERC (EUR million) ERC per year (EUR million) 900 858.3 220 213 800 200 180 700 160 600 142 140 525.8 140 510.7 500 120 427.1 400 100 317.1 80 300 64 60 48 200 42 40 36 32 28 25 22 20 18 100 20 16 14 0 0 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8
Slide 12: The Spanish Real Estate Owned (REO) market
The Spanish Real Estate Owned (REO) market Attractive stand-alone returns (IRR normally 30-60% higher than for B2C unsecured) Regulatory changes driving Improved macro large transaction volumes environment in Spain (More than 70 transactions last 3 (Real estate prices are increasing, years, 15 last
Slide 13: REO vs NPL portfolios - examples
REO vs NPL portfolios - examples • NPL portfolios with finance claims are characterized by long and stable cash flows (15 years+) • REO portfolios typically last 3-5 years before depletion • REOs with a low money multiple, but short payback time ensures healthy IRR levels • Accounting treatment of N
Slide 14: Portfolio Statistics
Portfolio Statistics Book value Portfolios (EUR million) Capex (EUR million) 500 471.3 240 234.1 450 220 400 200 180 350 160 300 140 241.5 246.3 250 120 200 191.9 100 150 128.0 80 66.5 60 54.3 100 40 33.8 50 20 7.0 0 0 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 GER ITA NOR SPA REO S
Slide 15: Axactor Structure Chart
Axactor Structure Chart Axactor AB (Sweden) Axactor Incentive LuxCo Invest 50% Sweden Luxembourg Axactor AS (Norway) 20% Axactor Platform Axactor Portfolio 80% Reolux S.à r.l. HoldCo Italy Holding (Sweden) Holding (Sweden) Luxembourg HoldCo HoldCo HoldCo HoldCo REO 1 Spain Axactor Capital ITA Ops/Ca
Slide 16: Co-invest and REO capital structure
Co-invest and REO capital structure Axactor Geveran Bank 50% 50% 30m 120m 30m 80+40m equity mezz loan equity bank debt Co-invest SPV Share holder agreement for Co-invest SPV gives Luxembourg Axactor operational control in Co-invest 4m 110m 16m equity bridge loan equity REO Holding Share holder agree
Slide 17: Q4 Income statement
Q4 Income statement Income statement Key comments 87% revenue growth Q4’17 y/y driven by new 4Q 4Q Jan - Dec Jan - Dec EURO 1000' 2017 2016 2017 2016 • business secured in 2017 Income 34 485 18 473 104 734 40 490 Amortization of debt portfolios -5 833 -2 034 -14 948 -3 417 • Cash EBITDA at EUR 13.5
Slide 18: Balance Sheet structure
Balance Sheet structure Assets Equity & Liabilities 622 622 • Book value of NPLs is EUR 32 Cash 50 Other 471m, including REO Intangibles IBD 76 Other Equity • Available cash at end of Q4 is Portfolios 25 EUR 50.4m 299 402 402 57 26 • Equity ratio 47.0% • Portfolio net LTV at 52.8% 75 116 282 282 23
Slide 19: Axactor funding availability is strong and flexible
Axactor funding availability is strong and flexible Existing funding facilities Being Considered/additional capacity Axactor base funding Geveran/Axactor funding Bank facility – REO SPV Bond offering €410m 60 Italian debt • Discussions with • Axactor is considering the €300m international banks ongo
Slide 20: Market Trends 2018
Market Trends 2018 • Banks with € 2 billion of NPL • Regulatory pressure (Basel III, IFRS, ECB, country specifics) • Carve-out of collection platforms continues • Consolidation of the CMS industry • Large REO market opportunity in Spain 20
Slide 21: Axactor Strategic Direction
Axactor Strategic Klikk for å redigereDirection tittelstil Mergers & acquisitions 5 Product strategy 1 Portfolio acquisitions 2 6 Organization 3 Bank carve-outs Scale and skills 7 Financing 4 Operations Market 8 communication IT Sales 9 Compliance AXACTOR 21 Confidential
Slide 22: Summary
Summary Klikk forQ4 Presentation å redigere tittelstil • 2017/2016 Revenue growth of 159% • Strong Q4 financial performance • Solid growth in 3PC from new business • Closed first co-investment deal with Geveran • Refinanced existing bank facilities with new facility of EUR 350m (incl. ERU 150m accor
Slide 23: Klikk for å redigere tittelstil
Klikk for å redigere tittelstil AXACTOR Confidential 23