Slide 1: Interim report January - March 2017
Interim report January - March 2017 April 25th, 2017 Mikael Ericson, CEO Erik Forsberg, CFO
Slide 2: Intrum Justitia
intrum Ww justitia
Slide 3: Q1 2017 Highlights
Q1 2017 Highlights Strong financial performance ‒ EBIT excluding revaluations, fx-impact and IACs increased by 16% vs Q1-16 ‒ PD book value up 43% YoY while returns remaining solid at 17% ‒ All three financial targets met, with EPS growth at +22% last twelve months. Continued good investment momentu
Slide 4: Lindorff transaction update as of late April 2017
Lindorff transaction update as of late April 2017 Background and strategic rationale for planned merger ‒ Creating an industry leader with significant scale and diversification ‒ Excellent strategic fit – cultural heritage, business mix, geographic footprint and sector expertise ‒ Significant financ
Slide 5: Financial summary
Financial summary Q1 Q1 Change FY 2017 2016 % 2016 Revenues,SEK M 1 609 1 408 14 6 088 EBIT,SEK M * 480 428 12 1 978 EBIT margin, % 30 30 n/a 32 EPS growth, % 12 30 n/a 27 Cash flow from operations,SEK M 707 730 -3 3 374 Investments in purchased debt,SEK M 2377 738 222 3 100 Return on purchased debt
Slide 6: Northern Europe
Regional development Market leader Northern Europe Top five 41 percent of total revenues Other Q1 Highlights • Underlying revenue growth excluding fx-impact due to organic Q1 Q1 Change Fx Adj and acquired growth with CMS Excl. PD Revaluations, Quarter 2017 2016 % % Revenues, SEK M 665 646 3 1 • Unde
Slide 7: Central Europe
Regional development Market leader Central Europe Top five 34 percent of total revenues Other Q1 Highlights • Continued strong growth for underlying revenues and EBIT Q1 Q1 Change Fx Adj • Successful operational excellence Excl. PD Revaluations, Quarter 2017 2016 % % Revenues, SEK M 551 415 33 30 pr
Slide 8: Western Europe
Regional development Market leader Western Europe Top five 25 percent of total revenues Other Q1 Highlights • Revenue growth from increased PD investments and CMS acquisitions, Q1 Q1 Change Fx Adj partially offset by negative organic Excl. PD Revaluations, Quarter 2017 2016 % % growth for CMS Revenu
Slide 9: Credit Management Services
Market leader Credit Management Services Top five 60 percent of total revenues Other Q1 Highlights • Good revenue growth driven by increased volumes from servicing of own portfolios and recent acquisitions in Spain and Denmark. Q1 Q1 Change Fx Adj Revenues from external clients Reported numbers, Qua
Slide 10: Financial Services
Market leader Financial Services Top five 40 percent of total revenues Other Q1 Highlights • Strong YoY growth for revenues and PD book value due to solid increase in PD investments. R12 PD investment levels per Q1-17 at Q1 Q1 Change Fx Adj record high of SEK 4,7 bn. Reported numbers, Quarter 2017 2
Slide 11: PD Carrying value & growth
PD Carrying value & growth PD carrying value: SEK 10 623 M Book Value growth: 43% SEK M PD carrying value % Growth YoY 11 000 43% 50% 10 000 45% 24% 9 000 40% 8 000 13% 35% 7 000 15% 30% 6 000 33% 25% 5 000 26% 20% 4 000 36% 3 000 24% 3% 15% -1% 2 000 10% 1 000 5% 0 0% 2008 2009 2010 2011 2012 2013
Slide 12: Purchased Debt, investments & ROI
Purchased Debt, investments & ROI Q1 17 RTM Investments: SEK 4,7bn (Q1 16 RTM: SEK 2,7bn) MSEK 3 500 3 100 25% MSEK 266 3 000 2 428 MSEK 20% 2 500 1 937 1166 FY 2 000 MSEK 15% 1130 Q1 477 646 1 500 10% Q2 2475 267 320 2377* 1 000 1804 2014 574 550 Q3 509 5% 500 872 871 1050 738 Q4 619 469 0 0% 2008
Slide 13: Purchased Debt - revaluations
Purchased Debt - revaluations Q1 Q1 FY PD revaluations, SEK M 2017 2016 2016 Northern Europe -21 -1 -7 Central Europe 14 17 50 Western Europe 7 -11 6 Total 0 5 49 13
Slide 14: Balance sheet – Highlights
Balance sheet – Highlights 31 Mar 31 Mar Dev SEK M 2017 2016 % Intangible fixed assets 3 555 3 095 15 - whereof goodwill 3 237 2 804 15 Tangible fixed assets 109 113 -4 Financial fixed assets 10 690 7 462 43 - whereof purchased debt 10 623 7 403 43 Current assets 2 193 1 893 16 Total assets 16 547 1
Slide 15: Cash flow statement
Cash flow statement Qi Qi Dev FY SEKM 2017 2016 % 2016 Operating earnings (EBIT) 480 428 12 1978 Depreciation 41 40 2 171 Amortization and revaluation of purchased debt 507 374 36 1606 Income tax paid -139 -24 479 -257 Changes in factoring receivables -31 13 -338 -46 Other changes in working capital
Slide 16: Funding base
Funding base • Syndicated bank loan facility (up to about SEK 9bn) ‒ About SEK 3,7 bn utilized per 31 Mar 2017 Debt Maturity Schedule (SEK million) 6000 • Corporate bonds (up to SEK 5 bn under MTN program) ‒ SEK 1 bn, 5Y note, issued in June 2013 (margin of 2,22%) 5000 ‒ SEK 1 bn, 5Y note, issued in
Slide 17: Financial targets
Financial targets Financial targets Q1 17 Q1 17 RTM FY 2016 1. EPS growth to exceed 10% per year 12% 22% 27% 2. Return on PD investments to exceed 15% per year 17% 18% 20% 3. Net Debt/EBITDA should be between 2.0 and 3.0 2.2 2.2 1.9 17
Slide 18: Delivering on our growth journey
Delivering on our growth journey Intrum’s business model Solid market potential provides a sustainable competitive advantage Our financial platform Concrete priorities for supports our growth continued growth journey 18
Slide 19: Concrete priorities for continued growth
Concrete priorities for continued growth GROWTH AREA PRIORITY 2017 YTD KEY DELIVERIES • Continued investment growth for our • Excluding the 1st Credit PD core, consumer unsecured portfolios acquisition, PD investments up 41% YoY. • Operational excellence to drive organic growth and margins • CMS
Slide 20: Q1 2017 Items Affecting Comparability
Q1 2017 Items Affecting Comparability Q1 2017 IAC Regions Service lines SEK M NEU CEU WEU Group CMS FS Common Group EBIT Reported (including revaluations) 160 224 96 480 273 418 -211 480 Items Affecting Comparability -8 -5 -4 -17 0 0 -17 -17 of which, Lindorff transaction related IAC -8 -5 -4 -17 -1
Slide 21: Q&A
Q&A intrum mn) justitia
Slide 22: Appendix
Appendix intrum mn) justitia
Slide 23: This is Intrum Justitia
Market leader This is Intrum Justitia Top five Other European market leader in an attractive growth market Proven hybrid business model serving the full credit management value chain Delivering consistent, strong financial returns 2016 2015 Revenue, MSEK 6 088 5 628 Diversification of risk through b
Slide 24: Intrum Way
Intrum Way Objectives, Strategies & Capabilities Stakeholder Objectives Citizen Client Customer Employee Shareholder Better Increased A better life The place The share Business Profibility to be to own for all Core strategies Ensure Establish Ensure Contribute market leading superior credit operatio
Slide 25: Gross Collections vs. Active Forecast - R12
Gross Collections vs. Active Forecast - R12 14% 12% 10% 8% 6% 4% 2% 0% *The R12 numbers have been adjusted for the portfolio sales in WEU in Q3 16 and NEU in Q4 16 as well as the sale in Q1 17 25
Slide 26: One-offs vs Forward Flow, as a % of PD Investments
One-offs vs Forward Flow, as a % of PD Investments 100% 8% 13% 12% 90% 18% 19% 26% 28% 25% 31% 31% 30% 29% 30% 33% 32% 34% 80% 40% 38% 50% 48% 51% 52% 49% 51% 52% 50% 49% 49% 70% 59% 56% 61% 75% 60% 79% 50% 92% 87% 88% 40% 82% 81% 74% 72% 75% 69% 69% 70% 71% 70% 67% 68% 66% 30% 60% 62% 50% 52% 49% 4
Slide 27: A broad indication going forward
A broad indication going forward Carrying value 31 March 2017: SEK 10,623 M +43% y-o-y (SEK 7,403 M) Gross collection: Carrying value x 2.0 Cash flow distribution 31 Mar of Gross collection 2017 2016 Y1 19% 22% Y2 18% 17% Y3 13% 13% Y4 11% 10% Y5 9% 8% Y6 8% 7% Y7 6% 6% Y8 5% 5% Y9 4% 4% 27
Slide 28: Illustrative example of PD accounting
Illustrative example of PD accounting Invested amount: 100 SEK M Gross collection 2.05 x invested amount Y11- (SEK M) Y1 Y2 Y3 Y4 Y5 Y6-Y10 Y1-Y15 Y15 Cash-flow distribution 29% 18% 12% 9% 8% 20% 4% 100% Gross collection 60 38 25 19 15 40 8 205 Amortisation * -31 -17 -11 -9 -7 -20 -5 -100 Amortisati
Slide 29: Better business for all
intrum oD justitia Better business for all