Intrum Ab · OMXSTO:INTRUM

Intrum Ab — Intrum Justitia — Q3 2013 Earnings Presentation

25 slides from Intrum Ab's earnings presentation, Oct 24, 2013

  1. Slide 1: Interim report January-September 2013

    Interim report January-September 2013 October 24th 2013 Lars Wollung, CEO Erik Forsberg, CFO

  2. Slide 2: Quarterly highlights

    Quarterly highlights 32% RTM EPS growth EBIT growth (adjusted for currency and debt 22% portfolio revaluations) 34% Growth in operating cash flow 19% Return on purchased debt 692 MSEK investments in purchased debt 2(25) © Intrum Justitia AB 2013. All rights reserved.

  3. Slide 3: Intrum Justitia's cash flow generation model

    Intrum Justitia’s cash flow generation model – a self-reinforcing cycle and a base for reaching our financial targets Clients Clients Clients Financing Clients and Clients and cases CMS cases PD Services Op. cashflow Stable and strong cash flow Our Financial Targets 1. EPS growth to exceed 10% per y

  4. Slide 4: Financial summary

    Financial summary Jul-Sep Jul-Sep Change Jan-Sep Jan-Sep 2013 2012 % 2013 2012 Revenues, MSEK: 1 135 1 001 13 3 335 2 994 EBIT, MSEK: 330 271 22 867 649 EBIT margin, %: 29 27 n/a 26 22 EPS growth, %: 26 3 n/a 42 5 Cash flow from operations, MSEK: 647 452 34 1 641 1 333 Investments in purchased debt,

  5. Slide 5: Revenues and operating margin, rolling 12 months

    Revenues and operating margin, rolling 12 months Revenues: SEK 4 389 M Operating margin: 25% SEK M % Revenues 4 000 25 EBIT 3 500 EBIT margin 3 000 2 500 20 2 000 1 500 15 1 000 500 0 10 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2005 200

  6. Slide 6: Northern Europe

    Regional development Market position Market leader Northern Europe Top 5 47 percent of total revenues Q3 Highlights Jul-Sept Jul-Sept Change Fx Adj • Continued revenue growth due to higher Excl. PD Revaluations 2013 2012 % % level of PD investments Revenues, SEKm 541 493 10% 9% EBIT, SEKm 209 164 27

  7. Slide 7: Central Europe

    Regional development Market position Central Europe Market leader Top 5 24 percent of total revenues Other Jul-Sept Jul-Sept Change Fx Adj Q3 Highlights Excl. PD Revaluations 2013 2012 % % Revenues, SEKm* 272 224 20% 19% • Solid growth for PD investments during the EBIT, SEKm 69 55 25% 25% quarter a

  8. Slide 8: Western Europe

    Market position Regional development Market leader Western Europe Top 5 29 percent of total revenues Other Q3 Highlights Jul-Sept Jul-Sept Change Fx Adj Excl. PD Revaluations 2013 2012 % % • Good growth in PD investments Revenues*, SEKm 324 277 17% 14% EBIT, SEKm 54 45 20% 16% • Positive development

  9. Slide 9: Credit Management Services

    Credit Management Services 66 percent of total revenues Q3 Highlights Jul-Sept Jul-Sept Change Fx Adj • Revenue growth from servicing of Reported numbers 2013 2012 % % acquired PD portfolios Revenues, SEKm 857 810 6% 4% Service line earnings, SEKm 217 210 3% 2% • Relatively stable trend for revenues

  10. Slide 10: Financial Services

    Financial Services 34 percent of total revenues Q3 Highlights Jul-Sept Jul-Sept Change Fx Adj Reported numbers 2013 2012 % % Revenues, SEKm* 450 315 42% 40% • Improved growth and service line earnings Service line earnings, SEKm 235 172 37% 35% from uptake in PD investments levels in the Service lin

  11. Slide 11: PD ROI – rolling 12 months

    PD ROI – rolling 12 months PD carrying value: SEK 5 320 M ROI RTM, excl. reval: 20% SEK M PD carrying value ROI RTM ROI RTM excl. reval 5 200 4 800 20% 4 400 4 000 3 600 15% 3 200 2 800 2 400 10% 2 000 1 600 1 200 5% 800 400 0 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2

  12. Slide 12: Purchased debt, investments

    Purchased debt, investments 2002–2013 SEK M 2 500 2 209 2 014 2 000 692 FY Q1 1 500 753 Q2 597 Q3 299 1 000 1804 Q4 667 500 822 870 996 872 871 1050 920 258 201 267 295 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 12(25) © Intrum Justitia AB 2013. All rights reserved.

  13. Slide 13: Purchased debt – revaluations

    Purchased debt – revaluations Q3 Q3 PD revaluations, SEK m 2013 2012 Northern Europe -3 6 Central Europe -1 0 Western Europe 2 1 Total -2 7 13(25) © Intrum Justitia AB 2013. All rights reserved.

  14. Slide 14: Balance sheet – Highlights

    Balance sheet – Highlights 30 Sep 30 Sep Dev SEK m 2013 2012 % Total assets 9 720 8 065 21 Goodwill 2 400 2 334 3 Total financial fixed assets 5 388 3 643 48 - whereof purchased debt 5 320 3 428 55 Shareholders' equity 3 003 2 801 7 Net debt/ R12 EBITDA* 1.72 1.43 20 14(25) * EBITDA = operating resu

  15. Slide 15: Cash flow statement

    Cash flow statement Jul-Sep Jul-Sep Dev Jan-Sep Jan-Sep Dev SEK m 2013 2012 % 2013 2012 % Operating earnings (EBIT) 330 271 22 867 649 34 Depreciation 38 40 -5 117 126 -7 Amortization and revaluation of purchased debt 340 250 36 979 793 23 Income tax paid -20 -35 43 -85 -124 31 Changes in Factoring

  16. Slide 16: Funding base

    Funding base • Syndicated bank loan facility (up to SEK 5bn) Debt Maturity Schedule ‒ SEK 2 bn utilized per September 2013 (SEK million) ‒ Loan facility allows a total financing of up to SEK 8 bn 2500 • Corporate bonds (up to SEK 3 bn under current 2000 MTN program) ‒ SEK 1 bn, 5Y note, issued in Ma

  17. Slide 17: Financial targets

    Financial targets Financial target Q313 RTM FY 2012 1. EPS growth to exceed 10% per year 32% 6% 2. Return on PD investments to exceed 15% per year 20% 17% 3. Net Debt/EBITDA should be between 2,0 and 3,0 1.72 1.47 17(25) © Intrum Justitia AB 2013. All rights reserved.

  18. Slide 18: Q&A

    Q&A 18(25) © Intrum Justitia AB 2013. All rights reserved.

  19. Slide 19: Appendix

    Appendix 19(25) © Intrum Justitia AB 2013. All rights reserved.

  20. Slide 20: Intrum Justitia in brief

    Intrum Justitia in brief Europe’s leading provider of credit management services, with operations in 20 countries Revenue 2012: SEK 4.1 billion Avrg nr of employees in Q3 2013: 3 589 Listed on NASDAQ OMX, Stockholm, Mid-Cap Market capitalization, Sep 30, 2013: SEK 13.7 billion Intrum Justitia's mark

  21. Slide 21: Indicative Financial illustration

    Indicative Financial illustration Invested amount: 100 SEK M Gross collection 2.05 x invested amount (SEK M) Y1 Y2 Y3 Y4 Y5 Y6-Y10 Y11-Y15 Y1-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 Amortisation ra

  22. Slide 22: Purchased debt, carrying value

    Purchased debt, carrying value SEK M 5 000 4 750 4 500 4 250 4 000 3 750 3 500 3 250 3 000 2 750 2 500 2 250 2 000 1 750 1 500 1 250 1 000 750 500 250 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 22(25) © Intrum Justitia AB 2013. All rights reserved.

  23. Slide 23: Gross Collections vs. Active Forecast - R12

    Gross Collections vs. Active Forecast - R12 14,00% 12,00% 10,00% 8,00% 6,00% R12 GC/AFC 4,00% 2,00% 0,00% Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213 Q313 -2,00% -4,00% 23(25) © Intrum Justitia AB 2013. All rights reserved.

  24. Slide 24: One-offs vs Forward Flow, as a % of PD Investments

    One-offs vs Forward Flow, as a % of PD Investments 100% 90% 31% 26% 28% 30% 31% 34% 80% 40% 38% 50% 48% 51% 52% 49% 51% 70% 61% 59% 56% 60% 75% 79% 50% 40% 69% 74% 72% 70% 69% 66% 30% 60% 62% 50% 52% 49% 48% 51% 49% 20% 39% 41% 44% 10% Forward flows One-offs 25% 21% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

  25. Slide 25: A broad indication going forward

    A broad indication going forward Carrying value 30 Sep 2013: SEK 5,320 M +55% y-o-y (SEK 3,428 M) Gross collection: Carrying value x 2.1 Cash flow distribution 30 Sep of Gross collection 2013 2012 Y1 23% 24% Y2 17% 17% Y3 14% 14% Y4 11% 11% Y5 9% 9% Y6 7% 7% Y7 6% 6% Y8 5% 4% Y9 3% 3% 25(25) © Intru

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