B2 Impact ASA · OSL:B2I
B2 Impact ASA — B2Holding — Q1 2020 Earnings Presentation
33 slides from B2 Impact ASA's earnings presentation, May 7, 2020
Slide 1: First quarter 2020
First quarter 2020 = Oslo, 7 May 2020
Slide 2: Key figures Q1 2020
Key figures Q1 2020 NOKm Total revenues Gross Cash Collections Cash EBITDA 775 1,315 966 (795) (1,248) (964) Net profit Portfolio purchases Leverage ratio 24 491 3.26x (106) (570) (3.0x) (Comparable numbers for Q1 2019 in brackets) |2
Slide 3: Highlights Q1 2020
Highlights Q1 2020 Volume ▪ Modest purchase volume in Q1 and reduced planned purchase volume for the next quarters ▪ Portfolios mainly acquired in Northern Europe Effectiveness & ▪ Stable gross cash collections - able to uphold high efficiency under extraordinary circumstances Efficiency ▪ Cost redu
Slide 4: Business update
Business update
Slide 5: Our Covid-19 priorities: Our people and operations
Our Covid-19 priorities: Our people and operations Our top priority has been the health … while upholding business continuity and well-being of employees … in all markets ▪ Compliance with rules and recommendations ▪ High social and economic impact in Spain and Italy from local and national authorit
Slide 6: Current Covid-19 business impact on our platforms
Current Covid-19 business impact on our platforms Most of our platforms estimate current Covid-19 impact on daily business as medium Low impact Medium impact High impact Poland and Northern Europe, representing 54 % of total ERC, estimate the impact as low Most affected platforms of Italy and Spain,
Slide 7: Ethical and responsible collections
Covid-19 mitigating actions Ethical and responsible collections Measures include: Softer communication Promoting online platforms and digital payments Scoring adapted to a changing environment in order to increase precision and reduce costs for legal collection Sustainable payment plans Introducing
Slide 8: Preparing for delays in collections and recoveries
Covid-19 mitigating actions Preparing for delays in collections and recoveries Monitoring operations through stress test analysis and forecasting SHORT-TERM Implementing operating cost reducing Low impact on cash collections in Q1, but shift in curves to prepare for delays measures with low/no busin
Slide 9: Reducing forward flow agreements
Covid-19 mitigating actions Reducing forward flow agreements Committed Forward Flow contracts 2020 180 NOKm Actual Q1 B2Holding has actively approached vendors in order to put 160 160 154 152 purchases on hold for a limited period or terminate contracts 140 124 We focus on amicable solutions to main
Slide 10: Preserving liquidity
Covid-19 mitigating actions Preserving liquidity Liquidity reserve 266 - Currently good liquidity - Portfolio purchases reduced to Frequent dialogue with the RCF banks: Positive feedback from preserve liquidity the banks on mitigating actions and transparency EUR million Equity ratio1) 25.1 Changes
Slide 11: Financial performance
Financial performance
Slide 12: First quarter 2020 summary
First quarter 2020 summary Financial summary NOKm Q1 2020 Q1 2019 % change Stable cash collection from portfolios Total revenues excl. net credit gain/(loss) 837 793 6% - relatively low impact from Covid-19 Net credit gain/(loss) from purchased loan portfolios -62 2 - close to the curves Total reven
Slide 13: Income statement
Income statement 2020 2019 2019 NOKm Q1 Q1 Full Year Interest income from purchased loan portfolios 693 658 2 713 Historically large FX fluctuations Net credit gain/loss purchased loan portfolios -62 2 -400 affecting P/L: Profit from shares, associated companies and JVs 3 15 64 Interest income from
Slide 14: Focus on costs reductions
Focus on costs reductions Personnel costs1 External costs1 Other operating costs1 126 138 60 62 106 11 % 90 10 % 8% 7% 5% 5% NOKm NOKm NOKm Q’19 Q1’20 Q1’19 Q1’20 Q1’19 Q’20 CtC% Personnel costs CtC% External costs CtC% Other operating costs Cost to Collect 275 300 Cost to collect down 1.1 percentag
Slide 15: Balance sheet
Balance sheet 2020 2019 NOKm % change 31 Mar 31 Mar Deferred tax asset 218 93 134 % Goodwill 885 763 16 % Tangible equity ratio of 20.5 %1) Tangible and intangible assets 395 382 4% Investments in associated companies and joint ventures 395 117 239 % NOK 988 million of assets in portfolio co- Purcha
Slide 16: Capital structure
Capital structure Funding Debt maturity profile Funding structure with sound leverage levels EUR millions - EUR 266 million in liquidity reserves I+3.25- E+7.50% E+7.00% E+4.25% E+4.75% E+6.35% 3.75% Public rating (Corporate Family Rating) 510 - S&P: B+ and Moody’s: Ba3 Repurchased EUR 28.1 million
Slide 17: Capital structure: Covenants
Capital structure Covenants RCF covenants In line with original RCF covenants and expect compliance going Equity Ratio 1 Total Loan to Value2 forward - In dialogue with RCF banks to increase headroom even further due to Covid-19 27.3% 25.2% 25.1% 75.0% 73.2% 76.2% 75.4% 74.2% 74.7% 25.0% 23.6% 24.2%
Slide 18: Modest portfolio purchase in first quarter
Modest portfolio purchase in first quarter Portfolio purchase volumes1) Geography distribution 2016 2017 2018 2019 2020 NOKm SEE 10% 2 273 WE 9% NOK 70% 491m 1 951 CE 0% 12% Poland 1 667 NE 1 634 1 485 1 231 1 120 Distribution by type 1 054 988 827 702 570 566 491 Secured 3% NOK 448 97% Unsecured 34
Slide 19: Increase in ERC attributed to FX effects
Increase in ERC attributed to FX effects Secured 26% Development in total gross ERC1) +24% Forward 120m ERC profile by year1) NOKm NOKm 26,528 6,723 Unsecured 74% 24,708 23,809 Pol 22,262 22,595 21,434 5,493 20,608 20,119 SEE Poland 18,116 NE 13% 15% 4,336 WE 12% 15,264 CE NE CE 21% 38% 9,489 2,490
Slide 20: Summary
Summary
Slide 21: Summary
Summary The organization proved agile and sustainable in an extraordinary situation Limited Covid-19 impact on cash collections in Q1 – preparing for a delay in collections/recoveries in the upcoming months, but need more data to forecast the impact Focus on cost reductions and reduced investments t
Slide 22: Q&A
Q&A
Slide 23: Quarterly financial performance
Quarterly financial performance Total ERC1) and portfolio purchases Total revenues NOKm NOKm 570 1,667 1,231 566 491 880 795 819 775 24,708 26,528 379 21,434 22,595 23,809 Q1’19 Q2’19 Q3’19 Q4’19 Q1’20 Q1’19 Q2’19 Q3’19 Q4’19 Q1’20 Total ERC Purchased loan portfolios Cash EBITDA EBITDA NOKm NOKm 47%
Slide 24: Diversified portfolio
Diversified portfolio Year Total Unsecured 1 2 3 4 5 6 7 8 9 10 120m ERC ERC Pol 997 777 531 387 284 209 154 111 81 61 3,592 3,742 NE 1,758 1,496 1,249 1,034 859 707 579 477 391 318 8,869 10,077 CE 394 337 283 233 188 145 93 53 22 12 1,759 1,777 WE 263 235 183 155 120 91 64 44 22 7 1,183 1,185 SEE 6
Slide 25: Northern Europe (NE)
Northern Europe (NE) Norway, Sweden, Denmark, Finland, Estonia, Latvia and Lithuania NOKm 2020 Q1 2019 Q1 Change (%) Highlights & KPIs Total revenues 257 204 26 % Portfolio purchase volume of NOK 341m in the quarter EBIT 149 115 29 % Gross cash collection of NOK 428m in Q1 Profit margin (%) 58 % 57
Slide 26: Western Europe (WE)
Western Europe (WE) Spain, Italy, France and Portugal NOKm 2020 Q1 2019 Q1 Change (%) Highlights & KPIs Total revenues 112 136 -18 % Portfolio purchases of NOK 42m in the quarter EBIT 16 52 -68 % Gross cash collection in Q1 of NOK 138m Profit margin (%) 15 % 38 % Cash EBITDA was NOK 94m, down 24 % f
Slide 27: Central Europe (CE)
Central Europe (CE) Slovenia, Croatia, Bosnia and Herzegovina, Serbia, Montenegro, Hungary and Czech Republic NOKm 2020 Q1 2019 Q1 Change (%) Highlights & KPIs Total revenues 125 180 -30 % No portfolio purchases in the quarter EBIT 52 120 -56 % Gross cash collection in Q1 of NOK 325m Profit margin (
Slide 28: South East Europe (SEE)
South East Europe (SEE) Romania, Bulgaria, Greece and Cyprus NOKm 2020 Q1 2019 Q1 Change (%) Highlights & KPIs Total revenues 92 111 -17 % Portfolio purchases of NOK 47m in the quarter EBIT 6 46 -87 % Gross cash collection in Q1 of NOK 170m Profit margin (%) 6% 41 % Cash EBITDA was NOK 101m, down 3
Slide 29: Poland
Poland Poland NOKm 2020 Q1 2019 Q1 Change (%) Highlights & KPIs Total revenues 189 164 15 % Portfolio purchases of NOK 61m in the quarter EBIT 76 49 54 % Gross cash collection in Q1 of NOK 254m Profit margin (%) 40 % 30 % Cash EBITDA was NOK 188m, up 23 % from Q1 2019 ERC 4,059 3,508 16 % Portfolio
Slide 30: 20 largest shareholders
20 largest shareholders # Shareholder No of shares Percentage 1 PRIORITET GROUP AB 52 913 000 12.91 % 2 RASMUSSENGRUPPEN AS 43 073 236 10.51 % 3 VALSET INVEST AS 26 000 000 6.34 % 4 STENSHAGEN INVEST AS 18 893 376 4.61 % 5 K11 INVESTOR AS 9 766 680 2.38 % 6 DNB MARKETS AKSJEHANDEL/-ANALYSE 9 244 035
Slide 31: Definitions
Definitions 120-month ERC Cash revenue Estimated remaining collection, which expresses the gross cash collection in face value expected to be Cash revenue consists of “Total revenues” added back amortisation and revaluation of purchased loan collected in the future over a 120-month period from the p
Slide 32: Definitions (cont'd)
Definitions (cont’d) Forward flow agreements Operating cash flow per share Forward flow agreements are agreements where the Group agrees with the portfolio provider that it will, Operating cash flow per share is operating cash flow from consolidated statement of cash flows divided on over some perio
Slide 33: B2Holding ASA contact details
B2Holding ASA | Stortingsgaten 22 P.O. Box 1726 Vika | N-0121 Oslo www.b2holding.no | Tel: +47 22 83 39 50 E-mail: post@b2holding.no