Intrum Ab · OMXSTO:INTRUM
Intrum Ab — Investor Day (2023)
41 slides from Intrum Ab's investor day presentation, Sep 13, 2023
Slide 1: Agenda
Agenda Introduction Leading the way — today and tomorrow Operations Operational excellence Servicing Profitable growth through client focus Investing Value extraction and pivot to capital light Financials Servicing growth and accelerated deleveraging Closing remarks intrum Intrum today and tomorrow
Slide 2: Intrum is a services company focused on credit management
Intrum its a. services. company focused on ; credit spartageomrtp
Slide 3: Intrum today
Intrum today >100 Y of operation ~4.6M customers debt free with Intrum >100M data on European consumers Servicing ~250 K customer interactions per day SEK ~92 bn collected for clients SEK ~25 bn cash revenues intrum ~98% 20 countries in Europe! coverage of European NPL stock 8 2 @ Northern Europe s
Slide 4: A simple and integrated business model with continuum of solutions to meet client needs
A simple and integrated business model with continuum of solutions to meet client needs a a (a Need to collect Two integrated ..one core Help repay debt against unpaid claims businesses... operating activity and financially reintegrate Collected Servicing Northern Europe 4.6 M became debt free SEK 9
Slide 5: Value based profit generation model
Value based profit generation model Assets under Management Collections Revenues EBITDA B & o Gar Recovery rate Conversion rate Cost to Collect Collections / AuM Revenues / Collections Costs / Collections intrum
Slide 6: Agenda
Agenda Introduction Leading the way — today and tomorrow Operations Operational excellence Servicing Profitable growth through client focus Investing Value extraction and pivot to capital light Financials Servicing growth and accelerated deleveraging Closing remarks intrum Intrum today and tomorrow
Slide 7: Since last CMD Intrum became bigger without benefits of scale
Since last CMD Intrum became bigger without benefits of scale SEK bn 2020 Today intrum Investing portfolio, BV 33.3 41.0 External servicing revenues 9.8 10.6 Cash EBITDA 11.6 12.8 Net debt 46.9 58.7 Leverage ratio 4.0x 4.6x
Slide 8: Today's challenges are tomorrow's opportunities, building on a market leading foundation
Today's challenges are tomorrow's opportunities, building on a market leading foundation Where did Insufficient commercial we go wrong? focus and performance . management Foundation Europe’s most for our diversified servicer, management in the ne t reorganisation and three Danes supporting culture i
Slide 9: Near term and long term actions to deliver on our targets
Near term and long term actions to deliver on our targets Near term tactical measures Long term fundamental measures intrum Lower proprietary investments Cost reduction Exiting selected markets Tactically selling back book Become a tech driven company Intense commercial focus Leverage third-party ca
Slide 10: We have already started to deliver on the way forward
We have already started to deliver on the way forward Business simplification Two main lines: intrum Recent progress on key strategic priorities Operational excellence Empowered local teams, re-established performance accountability and completed tech acquisition Client focus Strengthened Intrum’s p
Slide 11: De-risked financial profile, cumulative cash flows and cash at hand
De-risked financial profile, cumulative cash flows and cash at hand cover debt maturities through YE2025 Estimated cash generation 2024-2025 SEK bn @s) - , 2 2¢g Cash EBITDA Investments Tax and Discretionary Back-book / Cash Total and capex net financial items cash flow country exits at hand intrum
Slide 12: Financial trajectory by focusing on Servicing, value extraction and deleveraging
Financial trajectory by focusing on Servicing, value extraction and deleveraging... SEK bn Investing portfolio, BV Today 41.0 2026 intrum ~30 External servicing revenues 10.6 ~15 Servicing EBIT adj margin 17.8% >25% Net debt Leverage ratio 4.6x <3.5x 12
Slide 13: With upside potential to our base case financial trajectory
..With upside potential to our base case financial trajectory Financing costs Back book disposals Reduced financing costs given deleveraging focus Asset management Retention of servicing for disposed back book Tech acceleration Successful implementation of asset management model intrum Upside from O
Slide 14: The way forward — a journey underpinned by three strategic pillars
The way forward — a journey underpinned by three strategic pillars Capital light Operational excellence Profitable growth through Value extraction and client centricity pivot to capital light Tech-driven operations intrum 14
Slide 15: New financial targets for 2026
New financial targets for 2026 Growth EBIT margin ~10% 3 CAGR 725% External servicing Total adjusted revenues of growth servicing margin intrum ; Balance sheet intensity Leverage Dividend SEK 35x Subject ~30bn , to $3.5x Proprietary Leverage ratio by Dividends subject to Investing book value end of
Slide 16: Intrum today
Intrum today
Slide 17: Intrum leading the way through the century
Intrum leading the way through the century Oslo, Norway, 1933, : Valladolid, Spain, 2023
Slide 18: Wy PVE UZ
Wy PVE UZ wn i o £ =] n ¢ fe} 13) ‘= © oO a ° ho =] Wl = [=] (o) = A i= ° © ~ © me) xe] Oo _ 18) 2 ° 1) me) ¢ ©
Slide 19: Diversified business profile across clients, geographies, assets and services
Diversified business profile across clients, geographies, assets and services Clients +> Geographies ~— Assetclasses ~ Services * Banks * Northern Europe ¢ Performing Loans * Debt collection * Financial Investors + Middle Europe * UTPs * Credit optimisation * Utilities and Telcos * Southern Europe *
Slide 20: Integrated model and scale a clear differentiator
Integrated model and scale a clear differentiator... 1,000 = = [a4 & 500 wu doValue wn o = § 300 > o - iad 2 PRELIOS * 2 200 ) > = o . ” iQere 50 500 intrum 1 ARROW Lowell > AXAGTOR __ F roistrinance ; encore B2 HOLDING’ PRA ik Group a 1,500 2,500 3,500 4,500 5,500 6,500 7,500 120M ERC Investing (EU
Slide 21: With an unrivalled geographic footprint
..With an unrivalled geographic footprint Northern Europe Middle Europe Southern Europe Posies FEOU OFOeSTO TO Segoe Market leader Top 3 Market leader Market size NPL + Stage 2 EUR ~150bn EUR ~2,400bn EUR ~560bn Share of EU impaired loans! 5% 74% 17% Clients S Handelsbanken = © fFjordkraft @ Santand
Slide 22: Impaired credits expected to grow as consumers face soaring living costs
Impaired credits expected to grow as consumers face soaring living costs Average annual Households’ cost of Average annual Declarations of inflation, EU borrowing, euro area real wages bankruptcies, EU (sf 7,2% oo 3,6% as oe 106 48,5k > 48,5k 89 17% 17% Q2 2019 Q2 2023 Q2 2019 Q2 2023 2019 2022 Q2 2
Slide 23: Stage-2 loans as a good indicator of coming NPLs generation
Stage-2 loans as a good indicator of coming NPLs generation Stage-1 Stage-2 Stage-3 Performing Under performing Impaired 12-month Loss Expected Credit Lifetime ECL Loss provision intrum an Increased credit risk Default Sources: EBA risk dashboard for Q4 of 2019 and Qt 2023, Stage-2 Development in EU
Slide 24: Already seeing the impact, with increasing Intrum AuM and Servicing revenues
Already seeing the impact, with increasing Intrum AuM and Servicing revenues Total AuM 1in 2 European 9% companies expect late payments to increase during the coming 12 months... Q2'23 External 8% servicing “fede t ..While 1 in 3 expec revenues default volumes to increase across Europe! Q2'22 Q2'23
Slide 25: Increasing regulatory demand favouring large and reputable industrial service providers
Increasing regulatory demand favouring large and reputable industrial service providers Continued regulatory pressure intrum Constant dialogue with regulators Driving industry standards Staying ahead of regulatory trends 25
Slide 26: Intrum plays a critical role in the ecosystem
| Intrum plays a critical role in the 7 = ecosystem -
Slide 27: Intrum's purpose built around value contribution to all key stakeholders
Intrum's purpose built around value contribution to all key stakeholders 76/100 Client satisfaction 4.6M Debt free with Intrum LTM -10 % Greenhouse gas emissions since 2019 80/100 Engagement index intrum 27
Slide 28: Overarching ESG focus areas permeating our business
Overarching ESG focus areas permeating our business... SOCIAL Ethical collections to serve our clients and contribute to a sound economy and empower our people GOVERNANCE Responsible business ENVIRONMENT Climate change intrum Customer Clients Employees Employees & Society Society TARGET 2026 Increas
Slide 29: And has resulted in an all around strong ESG profile
... and has resulted in an all around strong ESG profile 14.7 Low ESG Risk since 2020 intrum since 2019 Climate Change 2022 Annual and Sustainability report externally validated by company auditor and aligned with ESG frameworks Sustainability efforts linked with the United Nations Agenda 2030 and t
Slide 30: The way forward — a journey underpinned by three strategic pillars
The way forward — a journey underpinned by three strategic pillars Operational excellence Tech-driven operations intrum 30
Slide 31: Reversing ONE Intrum to simplify and balance operating model
Reversing ONE Intrum to simplify and balance operating model Empower markets and Reduce complexity create better and simplify ownership QB the organisation Improve effectiveness and achieve Ensure clear P&L f cost savings accountability intrum 5
Slide 32: Potential to address more customers digitally and save costs
Potential to address more customers digitally and save costs Today Tomorrow Operation FTEs 6 6% * People intense * Reduced FTE executing front (e) * Inefficient intensity office activities Customer (o) + Address customer through Increased digital damn ~60 % rule-based network penetration and custome
Slide 33: Significant potential through scale to improve operations
Significant potential through scale to improve operations The vast scale of our operating platform... +130 M annual activities ~60% of the total agent time is productive 4,000 agents handling ~55% of productive time 22 M calls and 40M spent on simple calls emails yearly and emails Average call lengt
Slide 34: The way forward — a journey underpinned by three strategic pillars
The way forward — a journey underpinned by three strategic pillars Profitable growth through client centricity intrum
Slide 35: We view Intrum as our partner in managing and lowering our cost-of-risk
“We view Intrum as our partner in managing and lowering our cost-of-risk” Spanish bank CEO intrum
Slide 36: Supporting our banking partners through our collection services
Supporting our banking partners through our collection services Top 25 European banks by total assets Illustrative annual savings Intrum, case studies EUR bn Ee Cost-of-risk EUR 1.2 bn Improved NPE r 35bps | Benefit generated by performance by decreasing CoR by 1 bps 10-15% for partner Loans Provisi
Slide 37: The way forward — a journey underpinned by three strategic pillars
The way forward — a journey underpinned by three strategic pillars Capital light Value extraction and pivot to capital light intrum »
Slide 38: Maintain our investment franchise while building an asset manager
Maintain our investment franchise while building an asset manager Proprietary origination fe) a (Or Lo>» +toso = QYO O--O Underwriting Industrial Third-party Asset track record collection capital manager intrum 3
Slide 39: Increased capital efficiency from the asset management business
Increased capital efficiency from the asset management business Investment Investing net Fee based cash flows Cumulative result collections today, 100 150 6 57% ROI Intrum capital Net collections marlcap 1 .6x MoM awe 830/70 45 6 8 97% ROI Third party capital Net collections alcao Fees 2.0x MoM intr
Slide 40: The way forward — a journey underpinned by three strategic pillars
The way forward — a journey underpinned by three strategic pillars Capital light Operational excellence Profitable growth through Value extraction and client centricity pivot to capital light Tech-driven operations intrum 0
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