Slide 1: Axactor Q4 2016 Presentation
AXACTOR Q4 2016 PRESENTATION February 28, 2017
Slide 2: 4th Quarter 2016 – Axactor AB
4h Quarter 2016 — Axactor AB AXACTOR
Slide 3: Key highlights Q4
Key highlights Q4 REVENUE ERC CASH EBITDA Share Issue Proceeds CASH BALANCE SEK MILLION SEK MILLION SEK MILLION SEK MILLION SEK MILLION +71% Q/Q +21% Q/Q • Large portfolio purchased in Spain; estimated gross collection first year EUR 7 million • Forward flow deal Norway signed; start-up Apr-17; SEK
Slide 4: Growth through acquisitions – balanced revenue mix
Growth through acquisitions – balanced revenue mix Revenue Development per Country • Axactor represented in 3 of the largest NPL markets in Europe (GER, ITA and SPA) Norway shows good potential for further 200 • 3PC growth and NPL acquisitions 180 160 140 • Well balanced revenue mix geographically 1
Slide 5: Growth through acquisitions – balanced revenue mix
Growth through acquisitions – balanced revenue mix Revenue Development per Product • Year end 2016 with a healthy balance between NPL and 3PC revenue Continue to focus on 3PC growth to drive cash flow 200 180 • 180 • Q4 without full effect of 2016 NPL portfolio acquisitions 160 140 • Important to ke
Slide 6: Axactor Management Plan one year ago
Axactor Management Plan one year ago (Q4/´15 presentation)..... Axactor Strategy & Action plan Step 1 Step 2 Step 3 • Top 3 market share in debt • Establish debt collection collection in Spain • Enter new growth markets with Strategy platform and portfolio acquisitions service platform i
Slide 7: What did we deliver - Axactor 2016 Main Milestones
…. and what did we deliver - Axactor 2016 Main Milestones 2016 Q1 Q2 Q3 Q4 Platform New collection center Ikas acquisition closed New 3PC contract with Altor acquisition New 3PC Acquisitions opened in Valladolid the largest electrical contract with top (NOK 300m) company in Spain announced 3PC (thir
Slide 8: 1H 2017 Main Focus Areas
1H 2017 Main Focus Areas NPL portfolio acquisitions – Primary Sales from Financial Institutions Leveraging existing products in new markets Nordic expansion - acquisition of Profact in Sweden Operational improvements & system implementation to increase efficiency Establish the Co-invest structure to
Slide 9: The Profact deal - access to the attractive Swedish NPL market
The Profact deal - access to the attractive Swedish NPL market Strategic rationale The Profact transaction will give Axactor: Immediate access to the Swedish debt collection market Axactor to establish “Nordic” value proposition A high quality collection system, including collection data Team
Slide 10: Status Operational Improvements & Systems Implementation
Status Operational Improvements & Systems Implementation Behind plan Amber – Plan initiated System/ Overall Standard status Planned Planned Planned Planned On Track completion completion completion completion Country COLLECTION SYSTEM May-17 specific Axactor DIALER April-17 Sept-17 April-17 Q3
Slide 11: Co-Invest Structure – EUR 200m Investment Capacity (illustrative)
Co-Invest Structure – EUR 200m Investment Capacity (illustrative) • SPV to acquire 3-7 portfolios in the “Axactor countries” CO-INVESTOR AXACTOR • Axactor gets servicing agreement for entire set of portfolios 80% 20% with associated solid EBITDA EUR 80m EUR 20m • Increases Axactor’s CAPEX capacity a
Slide 12: Key financials Q4-16
Key financials Q4-16 Income statement Key comments • Altor included in Q4 P&L • Interest cost for the quarter is SEK 10.3 million • Unrealized FX effect is SEK -23.2 million • Amortization of NPLs and depreciation of (mainly) goodwill amounts to SEK -62.5 million. • Cash EBITDA positive for the last
Slide 13: 2016 EBITDA adjusted for non-recurring items
2016 EBITDA adjusted for “non-recurring” items EBITDA bridge to pro-forma adjusted EBITDA • Significant cost related to transaction support and DD related to 4 acquisitions • Restructuring in Spain 10 • Corporate team sized for a “fully fledged” 0 -10 organization 5 -20 9 -21 SEK million -30 26 -40
Slide 14: Growth through acquisitions – balanced revenue mix
Growth through acquisitions – balanced revenue mix 2016 Revenue mix per service per country • NPL relative size is expected to increase through 2017 as we ramp up NPL portfolio acquisitions Large carve-out agreements would bolster the 100 % • 90 % 3PC relative size to the extent we are successful 80
Slide 15: Q4 Balance Sheet
Q4 Balance Sheet Assets Equity and liabilities 15
Slide 16: Portfolio Statistics
Portfolio Statistics Historical Development ERC Collection curves - ERC per year – as of end 2016 3 500 450 3 012 397 397 400 363 3 000 2 486 350 320 2 500 300 275 2 000 228 250 SEK m SEK m 1 500 1 290 190 200 165 141 1 000 150 123 579 109 96 85 100 75 500 45 50 0 Q1-16 SPA Q2-16 ITA GER Q3-16 Q4-16
Slide 17: Portfolio Statistics
Portfolio Statistics Book value Portfolios Capex 400 378 1 400 1 225 350 323 1 200 293 300 267 1 000 951 250 800 SEK m 200 595 SEK m 600 150 400 100 251 200 50 0 0 Q1-16 Q2-16 Q3-16 Q4-16 Q1-16 Q2-16 Q3-16 Q4-16 SPA ITA GER SPA ITA GER • Includes portfolios held by platform companies at the time of
Slide 18: Debt and Leverage
Debt and Leverage 800 DNB/Nordea RCF • Currently max leverage on portfolio is 35% 700 • Leverage ratio to increase to 50% when; 600 • 7 approved loan portfolios with acquisition price of >1m EUR have a performance of a minimum 95% last 6 months 500 • Leverage ratio to increase to 65% when; • 14 appr
Slide 19: DNB/Nordea Revolving Credit Facility
DNB/Nordea Revolving Credit Facility Investment restrictions • Max Portfolio size (15m EUR) • Max average claim size (30k EUR) • Min IRR (10%) on investment • Max share of Telco/retail claims (15% of aggregate) • Country/Region restrictions • Forward flow contracts a maximum duration of 12 months or
Slide 20: Summary
Summary • EUR 100-150m as 2017 NPL Portfolio CAPEX Plan (without co-investor) • Ambition to increase gearing to 50% in 1H2017 • Co invest – a game changer – increases investment capacity significantly • Bolt-on acquisitions to get access to special competencies in our existing markets • Nordic expan
Slide 21: Investor Relations in Axactor
Investor Relations in Axactor First quarter results Next event: May 31, 2017 Investor Relations Contact: Geir Johansen CFO For more information see: Email: Geir.johansen@axactor.com www.axactor.com/investor-relations Mobil +47 477 10 451 21
Slide 22: www.axactor.com
www.axactor.com
Slide 23: Appendix
Appendix AXACTOR
Slide 24: Board of Directors
Board of Directors Bjørn Erik Næss Beate Skjerven Nygårdshaug Brita Eilertsen Merete Haugli Chairman Board Member Board Member Board Member • CFO of DNB ASA since 2008 • Holds several board positions • Chairman of the Board of NEXT Biometrics, as • Experience as board member of several • Previous ex
Slide 25: www.axactor.com
www.axactor.com