Slide 1: Presentation Q1 2023
AXACTOR Presentation Q1 2023
Slide 2: Q1 highlights
Q1 highlights Financial update Outlook Q&A
Slide 3: Financial highlights for the quarter on continuing operations
Financial highlights for the quarter on continuing operations Renewal of EUR 545m revolving credit facility • 3-year maturity, option to extend the maturity with additional two years1 • Satisfying terms Cash EBITDA growth of 4% y-o-y • Estimated growth of 11% y-o-y with constant currency and normali
Slide 4: Going forward we will stick to our successful strategy developed in 2020
Going forward we will stick to our successful strategy developed in 2020 1 Accretive investments • Invest in accretive portfolios with attractive gross IRR driving margin expansion on NPL • Target of reaching total backbook Gross IRR above 20%. Currently experiencing Gross IRR of 25+% on newly signe
Slide 5: Axactor has had healthy growth since year-end 2021
Axactor has had healthy growth since year-end 2021 NPL ERC and company acquisitions (EUR billion) +18% -1% 2.5 2.5 2.4 2.3 2.3 2.2 2.2 2.2 2.2 2.1 2.1 2.1 2.0 2.1 1.9 1.7 1.4 1.5 0.8 0.6 0.7 0.7 0.4 0.5 0.5 0.3 0.3 0.1 0.0 0.1 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q
Slide 6: NPL gross IRR on the total book is steadily increasing
NPL gross IRR on the total book is steadily increasing - Gross IRR on total NPL book gradually increasing, up 1.7pp last 2 years Gross IRR on the total NPL book… …and per vintage 24% 22.2% 22.0% 22% • Accretive committed NPL investments, 20% 4.6pp above the total NPL book +1.7pp 18% • Current market
Slide 7: NPL investment estimate of EUR 100 - 150m for the year
NPL investment estimate of EUR 100 - 150m for the year NPL investments (EUR million) 449 450 398 400 350 NPL investment estimate of EUR 100 - 150m 288 for the year 300 250 • Invested EUR 33m during the quarter 198 208 200 • Additional EUR 42m in committed NPL 150 114 investments Estimate 2023 100 76
Slide 8: NPL cost-to-collect stabilizing at a record low level
NPL cost-to-collect stabilizing at a record low level - Materializing in an EBITDA percentage among the best in the industry Axactor NPL cost-to-collect per year1 59% 48% 45% 44% 43% 39% 39% ’17 ’18 ’19 ’20 ’21 ’22 ’23 YTD 8 1) Cost is calculated as segment OPEX + allocation of unallocated OPEX and
Slide 9: Financial update
Q1 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% 87 89 83 82 83 79 78 76 13 70 15 13 15 13 • Gross revenue is up 5% y-o-y 12 14 13 11 • NPL gross revenue growth of 7% y-o-y • 3PC gross revenue growth of -4% y-o-y 70 73 69 74 70 64 59 64 65 • Estimated gross revenue grow
Slide 11: NPL segment: Steady total income growth with stable margins
NPL segment: Steady total income growth with stable margins NPL Total income and CM% (EUR million, and %) NPL Total income CM % +12% Satisfying growth in total income of 12% y-o-y, 46 46 48 49 with stable margins, despite headwind. 44 40 41 Collection performance of 98% for the quarter 28 • Debtors
Slide 12: 3PC segment: Total income burdened by strike and FX
3PC segment: Total income burdened by strike and FX 3PC Total income and CM% (EUR million and %) -4% 15 15 14 • 3PC total income growth of 4% y-o-y excluding 13 13 13 13 Spain 12 11 • Spain burdened by negative effects from legal strike1 47% 37% 41% 41% • Total income in Norway and Sweden 34% 35% 30
Slide 13: Group: Growth y-o-y in all key parameters despite legal strike in Spain and headwind on currency
Group: Growth y-o-y in all key parameters despite legal strike in Spain and headwind on currency Total income EBITDA and EBITDA-margin Cash EBITDA (EUR million) (EUR million and %) (EUR million) +8% 50% 51% +11% 48% 49%49% 63 62 38%47% +4% 60 59 33% +11% 57 31 30 54 30 30 58 58 52 28 55 25 54 49 51
Slide 14: RCF refinanced according to the plan. Expect to refinance ACR02 in Q2 or Q3
RCF refinanced according to the plan. Expect to refinance ACR02 in Q2 or Q3 according to the plan Facility Facility Current type size1 draw2 Maturity profile Refinancing Bond On- • The plan is to refinance ACR02 in Q2 or Q3. 200m 156m ACR02 going EUR 44m already repurchased • The RCF was renewed acc
Slide 15: Update on hedging
Update on hedging Cash effects • Axactor currently has a 1-year, EUR 573m, 0.5% EURIBOR strike contract with end date 15 Dec 2023 P&L effects • The current 1-year hedge was obtained by swapping with a previous 3-year hedge of EUR 200m • IFRS hedge accounting requires the positive effects of the hedg
Slide 16: Stable ROE of 10% on continuing operations last twelve months
Stable ROE of 10% on continuing operations last twelve months Return on equity to shareholders (%) 10% Continuing operations 9% 1% 6% 9% ROE to shareholders 1% 2% -6% -6% -9% 2016 2017 2018 2019 2020 2021 2022 LTM 16
Slide 17: Outlook
Q1 highlights Financial update Outlook Q&A
Slide 18: Outlook
Outlook Key driver Outlook Accretive investments + • Highly accretive gross IRR on new deals of 25+% compared to the backbook of 17% • NPL: Minimum 10% growth in interest income in 20231 Growth + • 3PC: Expect market growth driven by increased defaults. Axactor is reviewing customer profitability an
Slide 19: Q&A
Q1 highlights Financial update Outlook Q&A
Slide 20: Supporting information
Supporting information
Slide 21: NPL investment commitments of EUR 46m next 12 months
NPL investment commitments of EUR 46m next 12 months Quarterly NPL investments (EUR million) 93 80 69 54 Additional forward 47 flow agreements and one-off acquisitions 32 33 expected to further 27 increase NPL investments 16 12 8 7 4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 ’21 ’21 ’21 ’21 ’22 ’22 ’22
Slide 22: ERC increasing by 12% y-o-y driven by increased NPL investments in 2022
ERC increasing by 12% y-o-y driven by increased NPL investments in 2022 ERC development Forward ERC profile by year (EUR million) (EUR million) +12% 2,545 2,523 314 305 2,367 2,259 2,279 2,159 2,119 2,130 2,141 266 237 209 184 165 150 135 123 112 96 83 74 67 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Y1 Y2 Y3 Y4 Y5
Slide 23: 3PC volumes by geographic region
3PC volumes by geographic region 3PC Total income split by geographic region 1% 4% 15% Q1’23 • Spain accounting for 48% of total income on 3PC Total income 48% EUR 12.7m 20% • Italy share of Total income increased to 20% (15%) following organic growth in Italy 12% FIN DEU ITA NOR ESP SWE 23
Slide 24: Discontinued operations
Discontinued operations - REO book value reduced to EUR 6m ultimo Q1 REO Total income and net profit1 REO book value REO number of units (EUR million and %) (EUR million) Total Income Net profit 12 65 2,259 9 1,908 51 8 8 1,640 42 5 1,322 4 3 1,106 2 946 2 27 835 21 711 695 16 13 -3 -5 -3 -2 -2 -2 -
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-value - covenant ≤75% Secured Loan-to-value - covenant ≤65% (Total portfolio book value divided by net interest-bearing debt) (Total portfolio book value divided by secured net interes
Slide 26: Bond covenants (2/2)
Bond covenants (2/2) - Leverage ratio increasing due to FX and new portfolios with low initial cash flow Leverage ratio - covenant ≤4.0x Interest coverage ratio - covenant ≥4.0x (Net interest-bearing debt divided by LTM Pro-forma adjusted cash EBITDA (Pro-forma adjusted cash EBITDA divided by net in
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 Terms B2C Business to consumer Active forecast Forecast of estimated remaining collection on NPL portfolios BoD
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