Slide 1: Interim report July - September 2016
Interim report July - September 2016 October 19th, 2016 Mikael Ericson, CEO Erik Forsberg, CFO
Slide 2: intrum Ww justitia
intrum Ww justitia
Slide 3: Q3 2016 Highlights
Q3 2016 Highlights Continued good financial development ‒ All financial targets met: EPS growth, PD RoI and ND/EBITDAA ‒ All time high for EBIT at 517 MSEK for the quarter Delivering on our core strategies ‒ Improving market position for PD: R12 investments at SEK 3,1 bn (vs SEK 1,8 bn per Q3-15) ‒
Slide 4: Financial summary
Financial summary Q3 Q3 Change YTD YTD Change 2016 2015 % 2016 2015 % Revenues,SEK M 1 486 1 386 7 4 369 4 232 3 EBIT,SEK M * 517 452 14 1 419 1 239 15 EBIT margin, % 35 33 n/a 32 29 n/a EPS growth, % 14 10 n/a 17 26 n/a Cash flow from operations,SEK M 837 805 4 2 262 2 027 12 Investments in purchas
Slide 5: Northern Europe
Regional development Market leader Northern Europe Top five 47 percent of total revenues Other Q3 Highlights • Excluding IACs, revenues growth Q3 Q3 Change Fx Adj Excl. PD Revaluations, Quarter 2016 2015 % % mainly from purchased debt through Revenues, SEK M 674 627 7 7 increased investments in the
Slide 6: Central Europe
Regional development Market leader Central Europe Top five 29 percent of total revenues Other Q3 Highlights Q3 Q3 Change Fx Adj • Solid revenue growth from Excl. PD Revaluations, Quarter 2016 2015 % % Revenues, SEK M 435 393 11 10 increased PD investments. EBIT, SEK M 159 125 27 26 • Strong EBIT inc
Slide 7: Western Europe
Regional development Market leader Western Europe Top five 24 percent of total revenues Other Q3 Q3 Change Fx Adj Q3 Highlights Excl. PD Revaluations, Quarter 2016 2015 % % Revenues, SEK M 348 337 3 3 • Revenues and EBIT positively EBIT, SEK M 88 81 9 12 impacted by good growth in EBIT margin, % 25
Slide 8: Credit Management Services
Market leader Credit Management Services Top five 60 percent of total revenues Other Q3 Q3 Change Fx Adj Q3 Highlights Reported numbers, Quarter 2016 2015 % % • Underlying revenue adjusted for fx Revenues, SEK M 1 047 1 008 4 3 Service line earnings, SEK M 286 279 3 2 impact unchanged versus last ye
Slide 9: Financial Services
Market leader Financial Services Top five 40 percent of total revenues Other Q3 Highlights Q3 Q3 Change Fx Adj Reported numbers, Quarter 2016 2015 % % • Strong quarter for PD investments. Revenues, SEK M 718 596 20 20 R12 PD investments at SEK 3,1 bn, Service line earnings, SEK M 413 328 26 26 up fr
Slide 10: PD Carrying value & growth
PD Carrying value & growth PD carrying value: SEK 8 059 M Book Value growth: 26% SEK M PD carrying value % Growth YoY 26% 50% 8 000 13% 45% 7 000 15% 40% 6 000 33% 35% 5 000 30% 26% 4 000 25% 36% 20% 3 000 24% -1% 3% 15% 2 000 10% 1 000 5% 0 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q3 Y o Y c
Slide 11: Purchased Debt, investments & ROI
Purchased Debt, investments & ROI 2008–2016 Q3 16 RTM Investments: SEK 3,1bn (Q3 15: SEK 1,8bn) SEK M 2 428 MSEK 2 500 25% 1 937 266 MSEK 2 000 20% 1130 477 646 1 500 15% FY 2475 267 Q1 320 1 000 1804 2014 574 550 10% Q2 509 Q3 500 872 871 1050 5% 619 738 Q4 469 0 0% 2008 2009 2010 2011 2012 2013 20
Slide 12: Purchased Debt - revaluations
Purchased Debt - revaluations Q3 YTD Q3 YTD PD revaluations, SEK M 2016 2016 2015 2015 Northern Europe 14 25 -6 -27 Central Europe 9 43 31 68 Western Europe 6 -17 4 26 Total 29 51 29 67 12
Slide 13: Balance sheet – Highlights
Balance sheet – Highlights 30 Sep 30 Sep Dev SEK M 2016 2015 % Intangible fixed assets 3 210 2 995 7 - whereof goodwill 2 909 2 753 6 Tangible fixed assets 108 119 -9 Financial fixed assets 8 121 6 655 22 - whereof purchased debt 8 059 6 418 26 Current assets 2 192 1 854 18 Total assets 13 631 11 62
Slide 14: Cash flow statement
Cash flow statement Q3 Q3 Dev YTD YTD Dev SEK M 2016 2015 % 2016 2015 % Operating earnings (EBIT) 517 452 14 1 419 1 239 15 Depreciation 40 41 -2 121 122 -1 Amortization and revaluation of purchased debt 397 355 12 1 160 1 067 9 Income tax paid -34 -32 6 -198 -193 3 Changes in factoring receivables
Slide 15: Funding base
Funding base • Syndicated bank loan facility (up to SEK 7,5bn) ‒ Renegotiated in December 2015 Debt Maturity Schedule (SEK million) ‒ About SEK 1,5 bn utilized per 30 September 2016 4000 3500 • Corporate bonds (up to SEK 5 bn under MTN program) 3000 ‒ SEK 1 bn, 5Y note, issued in March 2012 (margin
Slide 16: Financial targets
Financial targets Financial targets Q3 16 Q3 16 RTM FY 2015 1. EPS growth to exceed 10% per year 14% 12% 18% 2. Return on PD investments to exceed 15% per year 21% 20% 20% 3. Net Debt/EBITDA should be between 2.0 and 3.0 2.0 2.0 1.8 16
Slide 17: 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 17
Slide 18: Concrete priorities for continued growth
Concrete priorities for continued growth GROWTH AREA PRIORITY 2016 Q3 YTD DELIVERIES - Continued investment growth for our • PD LTM Investments at SEK 3,1bn core, consumer unsecured portfolios (vs SEK 1,8bn one year ago) PD - Operational excellence to drive organic growth and margins • Service L
Slide 19: Q&A
Q&A intrum mn) justitia
Slide 20: Appendix
Appendix intrum mn) justitia
Slide 21: 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 2015 2014 Revenue 5 628 5 184 Diversification of risk through broad b
Slide 22: 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 23: Gross Collections vs. Active Forecast - R12
Gross Collections vs. Active Forecast - R12 14% 12% 10% 8% 6% 4% 2% 0% Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 23
Slide 24: 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 25: One-offs vs Forward Flow, as a % of PD Investments
One-offs vs Forward Flow, as a % of PD Investments 25
Slide 26: A broad indication going forward
A broad indication going forward Carrying value 30 Sep 2016: SEK 8,059 M +26% y-o-y (SEK 6,418 M) Gross collection: Carrying value x 2.0 Cash flow distribution 30 Sep of Gross collection 2016 2015 Y1 21% 23% Y2 17% 17% Y3 13% 13% Y4 11% 11% Y5 9% 9% Y6 7% 7% Y7 6% 6% Y8 5% 5% Y9 4% 3% 26
Slide 27: Better business for all
intrum oD justitia Better business for all