Intrum Ab · OMXSTO:INTRUM
Intrum Ab — Investor Day (September 2023)
99 slides from Intrum Ab's investor day presentation, Sep 13, 2023
Slide 1: Capital Markets Day: Leading the Way
Capital Markets Day Intrum Leading the Way intrum
Slide 2: Today's presenters
Today’s presenters Andrés Rubio Annette Kumlien Georgios Georgakopoulos Javier Aranguren Michael Ladurner President and CEO Chief Operating Officer Global Head of Servicing Chief Investment Officer Chief Financial Officer intrum 2
Slide 3: 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 4: Intrum
Intrum its a. services. company focused on ; credit spartageomrtp
Slide 5: 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 6: A simple and integrated business model
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 7: 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 8: 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 9: 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 10: Today's challenges are tomorrow's opportunities
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 ithe ne t reorganisation and three Danes supporting culture int
Slide 11: 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 12: 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 13: 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 14: 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 14
Slide 15: 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 16: 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 ‘6
Slide 17: 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 18: Intrum today
Intrum today
Slide 19: Intrum leading the way through the century
Intrum leading the way through the century Oslo, Norway, 1933, : Valladolid, Spain, 2023
Slide 20: 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 21: 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 22: 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 23: 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 24: 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 25: Stage-2 loans as an indicator of coming NPL 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 26: Already seeing the impact in 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 27: Increasing regulatory demand favouring large 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 27
Slide 28: Intrum plays a critical role in the ecosystem
| Intrum plays a critical role in the 7 = ecosystem -
Slide 29: 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 29
Slide 30: Overarching ESG focus areas
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 31: 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 32: Pillar: Operational excellence
The way forward — a journey underpinned by three strategic pillars Operational excellence Tech-driven operations intrum 32
Slide 33: 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 Pe
Slide 34: 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 35: 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 36: Pillar: Profitable growth through client centricity
The way forward — a journey underpinned by three strategic pillars Profitable growth through client centricity intrum 36
Slide 37: Spanish bank CEO quote
“We view Intrum as our partner in managing and lowering our cost-of-risk” Spanish bank CEO intrum
Slide 38: Supporting our banking partners through 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 39: Pillar: Value extraction and pivot to capital light
The way forward — a journey underpinned by three strategic pillars Capital light Value extraction and pivot to capital light intrum 3
Slide 40: Maintain 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 0
Slide 41: Increased capital efficiency from asset management
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 42: 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 2
Slide 43: 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 44: Operational set-up: serving customers to become debt free
Operational set-up: serving customers to become debt free +35M cases handled by our Operating platform each year ... leading to +130 M annual customer interactions 41 call centers — of which 5 global 6,000 operations employees, whereof 4,000 call agents 20 countries intrum 2M portal visits 40M email
Slide 45: Evolving operating model in a technological context
Evolving operating model in a technological context Operating model Tech intrum
Slide 46: Intrum leading the way through the century
Intrum leading the way through the century Oslo, Norway, 1933, : Valladolid, Spain, 2023
Slide 47: The best operating platform in the industry
The best operating platform in the industry intrum
Slide 48: Operating platform through assets under management, recovery, conversion and cost to collect
We see our operating platform through the lenses of assets under management, recovery rate, conversion rate and cost to collect Assets under Management Collections Revenues EBITDA / [TEN i © i © i fe » eI a . oe , Je Recovery rate Conversion rate Cost to Collect Collections / AUM Revenues / Collecti
Slide 49: Commercial and operational excellence
Intrum commercial and operational excellence People Tech A digital-first customer and client journey & Operational decisions powered by analytics and data Recovery rate Our employees at the core (organisation and talent) Critical business data readily available in one source of truth Conversion rate
Slide 50: Operational Scorecard driving performance
Operational Scorecard driving performance across platform Proactively driving enterprise-wide performance management Value Driver Tree Holistic view from key targets to we oe ° operational activities ° e. ° . Prioritised metrics to track and Operational follow operational performance = = = - al - ——
Slide 51: Our tech journey: an outline
Our tech journey: an outline Value driver Main levers Cash EBITDA contribution SEK M Customer Self Service * Increase customer experience with self-service solutions * Omnichannel approach to match our customers behavior * Harmonise and digitalise processes ~400 Customer Communication * From standar
Slide 52: Acquisition of Ophelos
Acquisition of Ophelos: A tech-powered autonomous debt resolution platform Dynamically and proactively optimising collection strategy : Eliminate unproductive actions A catalyst to Se eee eanteaten Drive traffic to self-service I y t S customer portals accelerate a Increasing digital penetration, te
Slide 53: Ophelos platform modules
sGeIRibis Meedular Client Analytics jeourneys Hyper- Machine Learning personalised Decision Engine customer journeys A i0 i van ay detection Ss Cc a | e Custom payment options Digital self-serve intrum Secure by design OphelosGPT Bespoke conversations at
Slide 54: Decisions powered by analytics and data
Decisions powered by analytics and data Intelligent tools enable tailored customer support and efficiencies What to do? il ¢ Use data to segment the customers ‘Ga west to optimise the customer journey "a ’ > and interaction * Calls will see a substantial reduction in handling time as agents are supp
Slide 55: Best-in-class client onboarding time
Best-in-class client onboarding time Digitisation and standardisation reduces client registration lead time What to do? Further digitalisation of client (oreo aN fe ° j ae onboarding S / | sents ns * Onboarding of large clients require } \ @ - > manual actions but to a larger extent standardised * B
Slide 56: Operational excellence drivers
Operational excellence Drivers People Organisation and capabilities for agile and efficient delivery Action learning program to develop key employees Incentive structure to align targets with journey intrum Process Operating processes to be digital- first and automated Transparency and objectivity o
Slide 57: 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 58: More business with more clients in a more profitable way
More business with more clients in a more profitable way Build organisation with Best-in-class value Ethical, professional Consistently high strong client focus offering for our clients and knowledgeable profitability across all across the credit company clients lifecycle intrum
Slide 59: The largest credit servicing business in Europe
The largest credit servicing business in Europe <10% market share SEK 10.6 bn SEK ~60-80 bn 10208 market shee . GB ~20-30% market share External Servicing Addressable GHB 50% marketshare Revenue market! EK 2.4 bn SEIS ~80,000 Total Servicing Client Adj. EBIT2 tents #1 >1,000 bn Position in majority
Slide 60: Industry and client mix offers risk mitigation
Industry and client mix offers risk mitigation and business development opportunity External servicing revenues distribution Northern Europe Middle Europe 10.6 bn External servicing revenues 5% 12% 13% # Clients 56k 23k #Customers 7M 10M Hl Top 15 clients incl. joint ventures HB Remaining external c
Slide 61: Long-term client relationships are the foundation
Long-term client relationships are the foundation Intrum top 15 clients Diversified > 15 years across markets and industries average relationship length ~50% 82/100 of external servicing revenues client satisfaction score intrum ~85% contract renewal rate +3 years average contract length 61
Slide 62: What our clients are saying about us
What our clients are saying about us ... Delivering services at a | am happy with the cooperation level that goes beyond we have. You are always ready what we expect” to help” Decision maker, Finance, VIP Decision maker, Professional services, VIP Very good follow-up of the Our relationship and coll
Slide 63: Results from Servicing focus: big boost in origination
We see results from our Servicing focus — big boost in origination Pipeline Win rate! Value of new signings SEK bn +0.4 26 22 21 2021 2022 2023 Q2 Pipeline for new deals (New, Cross and Upsell) SEK +0.4 bn In pipeline, net of closed deals inrate intrum 49% - 46% 2021 2022 2023 Win rate New clients =
Slide 64: Servicing contracts signed this year are at a higher margin
Servicing contracts signed this year are at a higher margin Servicing margin historically’ Margins from signings in H1 2023 37% 38% 36% Northern Europe 23% 23% Southern Europe 2021 2022 2023 Q2 RTM mNorthern Europe mMiddle Europe m Southern Europe intrum sos bos soni een 7
Slide 65: Solid servicing origination capability and process
Solid servicing business origination capability, process and IT system to support sales Strengthened local in dedicated new sales, Global team with CRM, sales tools, account management and client surveys, multinational sales ~170 FTEs industry tailored roles support tenders Lead generation > Top pro
Slide 66: Unique client proposition in breadth and depth
Unique client proposition in Europe in breadth and depth — adapted to client needs per market Intrum service offering at a glance Service offering Northern Europe Middle Europe Southern Europe Performing Loans x} 1 1 Different types of a —_ services offered in UnlikelytoPay (4 O (vy) different regio
Slide 67: Providing existing offering to new markets
Providing existing offering to new markets Intrum future service offering Service offering | Northern Europe Middle Europe Southern Europe . oe = = Growing by providing existing Performing Loans x} Vv} Vv} offering to new markets _ ons ras on Unlikely to Pay iw (Vw) (vy) 7 ; ont Invoicing Services (
Slide 68: Providing existing offering to new markets
Providing existing offering to new markets Intrum future service offering Service offering | Northern Europe Middle Europe Southern Europe . oa = = Growing by providing existing Performing Loans x} Vv} Vv} offering to new markets = oe , ra Unlikely to Pay YY —V a @ 1 * Expand Secured Services = from
Slide 69: Providing existing offering to new markets
Providing existing offering to new markets Intrum future service offering Growing by providing existing offering to new markets 2 * Expand Invoicing Services from Nordics to rest of Europe * Improve Digital Collection capabilities across footprint intrum Service offering | Northern Europe Middle Eur
Slide 70: Active client profitability management
Active client profitability management leads to significant benefit Consistent performance management process Turn-around of unprofitable clients Impact of full process implementation * Optimal client work-out strategy * Right balance of performance and profitability * Constantly improve performance
Slide 71: Middle Europe largest growth driver for revenues
Middle Europe largest growth driver for revenues Servicing revenue growth drivers CAGR Northern Europe CAGR Growth driven by improving digital proposition and ————- ( >15%) expanding service offering CAGR a @q Middle Europe _ Growth strategy focused on Banking and FS, including large transformationa
Slide 72: Yearly growth of ~10% in revenue and >20% in EBIT until 2026
Yearly growth rate of ~10% in revenue and >20% in EBIT until 2026 Servicing revenues and Servicing adj. EBIT growth ambition SEK bi if 17.8% 25% ~15 ~10% yearly >20% yearly growth Q2 2023 RTM 2026 MServicing revenues Servicing Adj. EBIT © Adj. EBIT margin intrum * Growth ambition based on our market
Slide 73: Client focus drivers
Client focus Drivers More business with more profitable clients Commercial success and win-rate Focus on top clients and prevent churn intrum Expand products and solutions Digital solutions Value-chain expansion Improve client profitability Pricing and commercial terms Client profitability and perfo
Slide 74: 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 75: Pivoting towards capital light
Pivoting towards capital light Extract value from existing book Unparalleled investing platform Maintain collection performance Leverage our proprietary pipeline in addition to market exits and and industrial collections tactical actions capabilities intrum Asset management Use 3rd party capital to
Slide 76: The largest industrial investment franchise across Europe
The largest industrial investment franchise across Europe SEK 41.0 bn >200 deals £2 e book value across ~20k portfolios won per year (average deal size 2 3 @ Middle Europe of SEK ~35M ce @ Southern Europe @ Tactical markets SEK 86 bn <15 deals = Tactical markets exitin, Estimated Remaining of SEK >5
Slide 77: Delivering resilient performance through challenging times
Delivering resilient performance also through challenging times 106% 110% 17x 14% 2.0x avg. performance index vs. Performance last Increased collections avg. unlevered IRR gross MoM original forecast since 2004 four quarters since 2004 since 2018 since 2018 Performance Index, RTM%! Gross collections
Slide 78: Our diversified ERC will deliver cash flow for years
Our diversified ERC will deliver cash flow for years to come SEK 86 bn ERC intrum 24M customers SEK ~740 bn balances oo Only 11% Of Balance to be collected SEK 31 bn Cumulative collections over 2024-26 SEK 25 bn Cumulative pre-tax! cash-flow over 2024-26 78
Slide 79: Platform reaches EUR >3 tn of impaired credits
Our platform reaches EUR >3 tn of impaired credits creating diversified origination opportunities coverage of the European NPL stock and Stage-2 loans ~98% EU/EEA (as of Q1 '23) EUR 433 bn! 1.5%! NPL volume and ratio on banks’ balance sheet Stage-2 loans and ratio on banks’ balance sheet EUR 2,795 b
Slide 80: How we will move forward: pivoting to an asset manager
How we will move forward Pivoting to an asset manager Solid underwriting and portfolio Strong value proposition to 3'¢ management capabilities party capital + Specialised teams with proprietary underwriting * Leverage our existing investing models capabilities, providing exclusivity to * Global team
Slide 81: Largest investors in European credit
Cerberus Davidson Kempner Blackstone CarVal Intrum PIMCO AMCO Fortress Quaestio Capital… Lone Star Goldman Sachs Bain Capital King Street Hoist doValue Banca Ifis Barclays Deutsche Bank Elliott Bank of Ireland
Slide 82: Our approach to Investing
Slide 83: Capital light drivers
Slide 84: Agenda
Slide 85: Three years ago we promised to grow Cash EBITDA while keeping net debt flat
Slide 86: Three strategic pillars: Servicing, value extraction and deleveraging
Slide 87: • • • • • • • • • • •
• • • • • • • • • • •
Slide 88: Profitable growth and operating leverage in Servicing: trajectory
Slide 89: Unlocking value of back book and franchise in Investing: trajectory
Slide 90: De-risked financial profile with >SEK 16bn available to de-lever
Slide 91: Capital light: de-risking and deleveraging the balance sheet
Slide 92: Potential upsides and risks to our financial trajectory
Slide 93: New financial targets for 2026
Slide 94: Agenda
Slide 95: Near term and long term actions to deliver on our targets
Slide 96: Our key message for the day
Slide 97: • • • • •
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Slide 98: Legal disclaimer
Slide 99: Slide 99