B2 Impact Asa · OSL:B2I
B2 Impact Asa — B2Holding — Debt Investor Presentation (May 2018)
39 slides from B2 Impact Asa's debt investor presentation, May 2, 2018
Slide 1: Investor presentation
Investor presentation 2 May 2018
Slide 2: Important information (1/2)
Important information (1/2) This Presentation (the “Presentation") has been produced by B2Holding ASA (the “Company”) solely for use in connection with a contemplated offering of bonds by the Company (the “Bonds”) initiated 2 May 2018 (the “Offering”) as described herein, and may not be reproduced o
Slide 3: Important information (2/2)
Important information (2/2) Neither this Presentation nor any copy of it nor the information contained herein is being issued, and nor may this Presentation nor any copy of it nor the information contained herein be distributed directly or indirectly, to or into Canada, Australia, Hong Kong, Italy,
Slide 4: Agenda
Agenda 1. Transaction overview 2. Company snapshot 3. Market 4. Portfolio overview 5. Financials 6. Appendix 7. Risk factors |4
Slide 5: Summary of B2H04 bond terms
Summary of B2H04 bond terms Issuer: B2Holding ASA CFR (S&P / Moody’s): BB- / Ba3 Status of the bonds: Senior unsecured1) Initial amount: EUR [●] million Borrowing limit: EUR 250 million Use of proceeds: General corporate purposes Issue price: 100% of par value Coupon rate: 3m EURIBOR + [●] bps p.a.,
Slide 6: Credit highlights
Credit highlights Attractive market with significant strategic entry barriers Attractive industry with Stable, cash-generative industry – macroeconomic drivers are to some extent off-setting sound market outlook Favourable market outlook with increased demand for B2H’s services across geograph
Slide 7: Agenda
Agenda 1. Transaction overview 2. Company snapshot 3. Market 4. Portfolio overview 5. Financials 6. Appendix 7. Risk factors |7
Slide 8: Trading update: Record strong cash collection, portfolio purchases in all regions present and ERC at NOK 18.2b
Trading update: Record strong cash collection, portfolio purchases in all regions present and ERC at NOK 18.2b Comments on Q1 2018 Gross cash collection on portfolios NOK million Record strong cash collection of NOK 775m in Q1 2018 (+35% y-o-y), operational costs continues to trend down +35% 775 NOK
Slide 9: A leading pan-European debt purchaser with platforms
A leading pan-European debt purchaser with 22 platforms Central Europe Northern Europe Croatia Norway Serbia Sweden B&H 27% Denmark 25% Slovenia Lithuania Montenegro Latvia Czech Rep. Finland NE Hungary Estonia P Lithuania WE CE Southeastern SEE Western Europe 20% Europe2 Italy 10% Greece Spain Cypr
Slide 10: Decentralised management model with strong local competence
Decentralised management model with strong local competence Olav Dalen Zahl CEO Erik J. Johnsen Danckert Mellbye Jeremi Bobowski Harald Henriksen Thor Christian Moen Rasmus Hansson Chief Financial Chief Org & Chief Investment Chief Compliance Chief Legal M&A Director Officer Improvement Officer Offi
Slide 11: A disciplined investment process, consistent across geographies, supported by a centralized data warehouse
A disciplined investment process, consistent across geographies, supported by a centralized data warehouse 35+m Analyse recommendations BoD EUR Approve critical decisions Broad Coverage – Chairman, BoD Rep, CEO, CFO, CIO, CCO and CLO 88% Group level 10–35m Investment Approve investment strategy & re
Slide 12: Strict code of conduct across all geographies
Strict code of conduct across all geographies Significant Clearly defined Collection activity Complaints countries ranked Data protection statute of Collection activity recording and management Current / past Regulatory by ERC Specific license system in place limitation limitations 1 monitoring proc
Slide 13: Publicly traded company with a stable shareholder base
Publicly traded company with a stable shareholder base Successful public listing Top investors comprised of long-term, long-only shareholders # Shareholder Percentage The shares were listed on NOTC, the Norwegian Over-The- 1 PRIORITET GROUP AB 12.58 % Counter Market in December 2014 2 RASMUSSENGRU
Slide 14: Agenda
Agenda 1. Transaction overview 2. Company snapshot 3. Market 4. Portfolio overview 5. Financials 6. Appendix 7. Risk factors | 14
Slide 15: Highly diversified vendor base
Highly diversified vendor base Diversified set of debt vendors across the financial industries, covering banks, in-store credit, credit cards, micro loans and leasing companies, as well as other industries, including utility and telecommunication companies 21% of 2017 purchases attributable to forwa
Slide 16: Attractive industry characteristics, over 1 trillion in NPLs in Europe and significant volumes coming to market
Attractive industry characteristics, over 1 trillion in NPLs in Europe and significant volumes coming to market The level of NPLs on banks’ balance sheets Face value of European bank NPLs1) Face value, EURbn 1,400 M 1,200 1,084 A Over EUR 1 trillion in 1,000 C European bank NPLs 800 R – Italy, Greec
Slide 17: Broad geographical reach across the maturity spectrum
Broad geographical reach across the maturity spectrum One of the largest opportunity sets across both mature and early stage markets European countries present (#) 24 Early phase Growth phase Mature phase 22 Regulatory or Cultural barriers Increasing competition across Large share of NPL stock sold
Slide 18: Strong position across its key markets
Strong position across its key markets Market Position1 Competitive edge Market Position1 Competitive edge Northern Europe Central Europe Among industry leaders on cost to collect Largest secured portfolio acquirer Finland Key player Significant forward flow volumes Croatia Key player Low cost to co
Slide 19: Access to a vast opportunity set for the future
Access to a vast opportunity set for the future Coverage of 73% of the EU NPL stock across our 22 platforms European bank NPL per country1 EUR millions 196 Over EUR 850 billion in European bank NPLs – Italy, France, Spain and Greece, the four largest markets, account for approx. 65% of EU NPLs as of
Slide 20: Agenda
Agenda 1. Transaction overview 2. Company snapshot 3. Market 4. Portfolio overview 5. Financials 6. Appendix 7. Risk factors | 20
Slide 21: Highly diversified portfolio yielding stable and predictable cash flows: total gross ERC of approx. NOK 18.2bn
Highly diversified portfolio yielding stable and predictable cash flows: total gross ERC of approx. NOK 18.2bn (84% growth y-o-y) Development in total gross ERC Portfolio details (total gross ERC) NOK million NOK million WE Claims (#):1 Face value (NOK):1 CE 10% Secured Poland 27% 30% 18% ~6,49m ~13
Slide 22: Agenda
Agenda 1. Transaction overview 2. Company snapshot 3. Market 4. Portfolio overview 5. Financials 6. Appendix 7. Risk factors | 22
Slide 23: Strong historical financial performance
Strong historical financial performance Total ERC and portfolio acquisitions Total operating revenue NOK millions NOK millions 1,551 1,358 2,584 4,112 CAGR 2,013 CAGR 15,264 51% 58% 7% 1,396 6% 9,489 1,076 6% 6,490 5% 7% 87% 4,430 511 10% 86% 4% 85% 18% 78% 2014 2015 2016 2017 2014 2015 2016 2017 To
Slide 24: Income statement
Income statement Income statement Comments NOKm 2015 2016 2017 Rapid increase in acquired Audited Audited Audited portfolios drives strong growth in Revenue from purchased loan portfolios 915 1,206 1,757 Revenue from external collection 104 104 124 revenue from purchased loan Other operating revenue
Slide 25: Balance sheet
Balance sheet Balance sheet Comments NOKm 2015 2016 2017 Increase in intangible assets and Audited Audited Audited goodwill due to recent Tangible and intangible assets 100 91 201 acquisitions in Spain Goodwill 318 395 522 Purchased loan portfolios 3,168 4,752 8,732 Other long-term financial assets
Slide 26: Cash flow
Cash flow Consolidated cash flow Comments NOKm 2015 2016 2017 Rapid growth in operating cash Audited Audited Audited flows Profit for the period before tax 243 227 648 Amortisation/revaluation of purchased loan portfolios 424 664 795 Investing cash flows driven by Adjustment other non-cash items 74
Slide 27: Continued focus on cost and economies of scale – cost of collect trending down
Continued focus on cost and economies of scale – cost of collect trending down Operational costs split Total operational costs per quarter NOK million NOK million Personnel costs Personnel 155 311 123 costs higher due to stock 119 99 94 option program, costs related to severance pay in Poland , high
Slide 28: Mature funding structure with prudent leverage
Mature funding structure with prudent leverage Strategy Successful issuance of three bonds at ever better terms Bond and bank debt is used to get access to capital for when larger EUR millions portfolios or platform acquisition opportunities arise E+7.50% E+7.00% E+4.25% ? Adequate liquidity includi
Slide 29: Agenda
Agenda 1. Transaction overview 2. Company snapshot 3. Market 4. Portfolio overview 5. Financials 6. Appendix 7. Risk factors | 29
Slide 30: Northern Europe (NE)
Northern Europe (NE) GDP growth Market dynamics 8% Mature market 6% Estonia Main competitors are PRA Group, Intrum, Lowell, Marginalen Latvia 4% Lithuania Solid portfolio visibility in the pipeline Sweden Finland Purchase primarily from banks and consumer lending banks 2% Denmark Norway Mainly unsec
Slide 31: Central Europe (CE)
Central Europe (CE) GDP growth Market dynamics Market is in a growth phase 5% Slovenia Czech Rep. Main competitors are KKR, EOS, Hoist Hungary 3% Good regulatory environment Serbia Montenegro Strong portfolio pipeline in all of the major countries in the 1% Croatia region Bosnia and Herz. -1% Purcha
Slide 32: Western Europe (WE)
Western Europe (WE) GDP growth Market dynamics 4% Growing market in secured space Spain Main competitors are MCS (France only), Intrum/Lindorff, 2% France Italy Kruk, Axactor Stable regulatory environment 0% More than EUR 400 billion of NPLs outstanding in the three -2% markets combined Large volume
Slide 33: Poland (P)
Poland (P) GDP growth Market dynamics 6% Mature market 5% Main competitors are Kruk, Get Back, PRA Group, Intrum, Hoist, EOS 4% EU law – Government introduced legislative changes 3% Purchase mainly from banks and consumer lending 2% businesses. Mainly unsecured portfolios Net IRR target in range of
Slide 34: Southeastern Europe (SEE)
Southeastern Europe (SEE) GDP growth Market dynamics 6% Romania Market is in an early phase Bulgaria 4% Main competitors are Kruk, EOS, Intrum, APS Cyprus 2% Greece EU law 0% -2% Good visibility of portfolio pipeline in all countries -4% Purchase primarily from Banks and Joint ventures. Mix of -6% s
Slide 35: Agenda
Agenda 1. Transaction overview 2. Company snapshot 3. Market 4. Portfolio overview 5. Financials 6. Appendix 7. Risk factors | 35
Slide 36: Risk factors (1/3)
Risk factors (1/3) Investing in the Bonds involves inherent risks. Prospective investors should carefully consider, among other things, the risk factors for the Bond Issue before making an investment decision. The risk factors included below are some of the main risk factors for the Bond Issue. The
Slide 37: Risk factors (2/3)
Risk factors (2/3) There can be no assurances that the Group will continuously be able to identify and/or acquire sufficient volume of portfolios at appropriate prices. The Group may be unable to identify sufficient levels of attractive portfolios and generate an appropriate return on purchased loan
Slide 38: Risk factors (3/3)
Risk factors (3/3) The Bonds may be subject to optional redemption by the Company, which may have a material adverse effect on the value of the Bonds. The Issuer has the right to redeem all outstanding Bonds prior to the Maturity Date by paying the nominal amount of each Bond, plus the accrued inter
Slide 39: Stortingsgaten 22, Oslo contact details
Stortingsgaten 22 | P.O. Box 1642 Vika | N-0119 Oslo www.b2holding.no | Tel: +47 22 83 39 50 | E-mail: post@b2holding.no