Slide 1: Company presentation
Company presentation Xtrainvestor live event June 2nd 2021
Slide 2: Agenda
Axactor SE Agenda Company presentation June 2nd 2021 Company introduction Presenting: 1 Industry trends 2 Why invest in Axactor Johnny Tsolis, CEO 3 Q&A 4 Kyrre Svae, Interim CFO 2
Slide 3: Axactor is an established European debt collection company that has grown rapidly in targeted markets
Axactor is an established European debt collection company that has grown rapidly in targeted markets A leading European debt collector Operating in a few, stable and well developed markets Share of revenue1,2 • Established in Q4 2015 with headquarters in Oslo, Norway, and is one of Europe’s top-ten
Slide 4: Our core business areas simply explained
Our core business areas simply explained Non-Performing Loans (NPL) Third-party collection (3PC) • Buy defaulted debt at discount to face value • Traditional debt collection on behalf of external • Price variations between markets, age and customers type of debt • Typically a fixed fee or a commissi
Slide 5: Axactor follows a clear and simple niche strategy
Axactor follows a clear and simple niche strategy VALUE CHAIN POSITION Axactor 3PC Axactor NPL Account Credit Invoice Amicable Legal Surveillance Factoring receivable information admin. collection collection and recovery management NICHE STRATEGY • Six carefully selected geographies • Business-to-co
Slide 6: From start-up to established player
From start-up to established player - After five years in business, Axactor enters a new phase with increased focus on earnings Start-up (2016-2020) Established player (2021-2024) Steady state (2025→) Grow revenue & scale Grow return on equity Grow presence • Aggressive growth • Grow size in existin
Slide 7: Key Financial Highlights Q1 2021
Key Financial Highlights Q1 2021 All numbers in EUR 7% 10% 26% 85m 61m 18m Gross revenue Total income EBITDA 8% -130% -9ppt 52m -2m -2% Cash EBITDA Profit before tax ROE1 YoY growth 7 1) ROE excluding non-controlling interest, annualized
Slide 8: NPL active forecast aligned with current performance
NPL active forecast aligned with current performance - Supporting correct portfolio valuations going forward Business case and active forecast versus cash collected1 • Cash collected in 2020 did not meet the original business case primarily due to Covid-19 • Active forecast is aligned with current V
Slide 9: Agenda
Agenda Company introduction 1 Industry trends 2 Why invest in Axactor 3 Q&A 4 9
Slide 10: Key industry trends 2021
Key industry trends 2021 1 2 Portfolio Cost-to- price level collect 3 4 Increased focus on ESG 3PC 5 6 Adjacent Alternative asset funding classes sources 10
Slide 11: Expect IRR to converge towards historic average
1 Portfolio price Expect IRR to converge towards historic average level - Significantly above historic IRR for Axactor Estimated IRR development 2016 - 2023 Factors affecting future IRR Upwards pressure • Overhang of unsold NPLs after the pandemic • Increased regulatory pressure on banks - Prudentia
Slide 12: Cost-to-Collect (NPL)
2 Cost-to- collect Increasing focus on cost level in the industry - Axactor with industry leading cost-to-collect and aiming for further improvements NPL Cost-to-Collect & total income per market 2016-20201 (EURm) 70% ‘17 ‘18 • Axactor incepted to disrupt the industry on 65% ‘16 ‘16 ‘17 cost-to-coll
Slide 13: Trend of improving utilization of collection platform
3 Increased focus on Trend of improving utilization of collection platform 3PC - Different strategies to reach optimal utilization 3PC Total income & Contribution margin 1 • Capital light, recurring revenue with good (EURm) Covid-19 impact margin and diversification benefits 58 52 48 42 • Synergies
Slide 14: ESG with increasing importance
4 ESG ESG with increasing importance - Axactor ranked #2 in consumer finance sector by Sustainalytics1 Axactor ESG rating Relative performance Rank1 • ESG an important part of Axactor’s DNA Consumer finance subindustry 2 out of 145 • Increasing attention from all stakeholders Diversified financials
Slide 15: Agenda
Agenda Company introduction 1 Industry trends 2 Why invest in Axactor 3 Q&A 4 15
Slide 16: Why invest in the debt collection industry?
Why invest in the debt collection INDUSTRY? Driver Comments • Volume sent to debt collection expected to increase as societies reopen and moratoriums end 1 Revenue growth • Large NPL-volumes expected for sale - Overhang from the pandemic and Prudential backstop rules 2 Margin expansion • Expect IRR
Slide 17: Why invest in Axactor?
Why invest in AXACTOR? Driver Comments • NPL - Expect material revenue growth next 12 months • EUR ~550m1 in est. investment capacity limit 1 Revenue growth • EUR ~130m in est. replacement CAPEX • 3PC - revenues reverting to pre-covid levels and beyond • Replacing low IRR portfolios with new acquisi
Slide 18: Agenda
Axactor SE Agenda Company presentation June 2nd 2021 Company introduction Presenting: 1 Industry trends 2 Why invest in Axactor Johnny Tsolis, CEO 3 Q&A 4 Kyrre Svae, interim CFO 18
Slide 19: Terms and abbreviations
Terms and abbreviations APM / KPI definition EBITDA adjusted for change in forward flow derivatives, calculated cost of share option program, portfolio Terms and abbreviations Cash EBITDA amortizations and revaluations, REO cost of sales and REO impairments CM1 Margin Total operating expenses (exclu
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