Slide 1: Axactor Q2 2021
AXACTOR Q2 2021 17 August 2021
Slide 2: Agenda
Agenda Company introduction 1 Main events Q2 2021 2 Financial highlights 3 Outlook 4 2
Slide 3: Axactor is an established European debt collection company
Axactor is an established European debt collection company that has grown rapidly in targeted markets A leading European debt collector Operating in a few, stable and well developed markets Share of revenue1 • Established in Q4 2015 with headquarters in Oslo, Non- Norway, and is one of Europe’s top-
Slide 4: Strategic focus has shifted from growing scale to growing return on equity
Strategic focus has shifted from growing scale during the start-up phase to growing return on equity Start-up (2016-2020) Established player (2021-2024) Steady state (2025→) Grow scale Grow return on equity Grow presence • Aggressive growth • Grow size in existing markets • Steady state • Market ent
Slide 5: Niche strategy to disrupt the industry on cost-to-collect
Axactor is pursuing a niche strategy to disrupt the industry on cost-to-collect NPL Cost-to-Collect for selected peers in 20201 (EURm) • Axactor incepted to disrupt the industry on 86% 59% cost-to-collect 48% • Continued innovation and growing economies 45% 43% of scale to fuel further improvements
Slide 6: Agenda
Agenda Company introduction 1 Main events Q2 2021 2 Financial highlights 3 Outlook 4 6
Slide 7: Key financial highlights Q2 2021
Key financial highlights Q2 2021 All numbers in EUR 34% 130% 52m • Positive development in Q2 both QoQ and YoY on all numbers, except investments 95m 66m 22m Gross revenue Total income EBITDA • Q2 is seasonally a strong quarter 48% 43ppt -80% • Weak Q2 last year heavily affected by “first wave” of C
Slide 8: Credit rating from Moody's and S&P
Axactor has obtained credit rating from Moody’s and S&P to attract a larger investor base and reduce cost of funding Rating agency Rating1 Outlook Comments • Dual rating obtained from leading credit rating agencies B1 Positive • Important step to reduce future funding cost • Access to a larger inves
Slide 9: Cost reduction program on track
Cost reduction program on track Cost reduction program, annualized1) (EUR million) 5.2 3.9 4.2 1.2 • Realized savings ahead of plan in Q2 0.3 • Outsourced car repossession service in Germany • Home shoring back-office functions in Finland 2.3 3.9 3.9 • Various other improvement initiatives • Cost re
Slide 10: Acquiring portfolios at attractive rates
Axactor is currently acquiring portfolios at attractive rates - Expect current book gross IRR to improve over time Gross IRR on NPL – current and on forward flows1 (% and EUR million) +47% 23.2% 22.0% • Gross IRR on signed forward flow contracts 15.8% 47% higher than on the current book • Expect pri
Slide 11: Rated second best on ESG within consumer finance
In Q2 we are rated second best on ESG within consumer finance globally and signed UN Global Compact • Ranked as second best of 151 companies within consumer finance and among top 5% globally1 ✓ • In Q2 Axactor signed up on the world’s largest corporate sustainability initiative – UN Global Compact 1
Slide 12: Agenda
Agenda Company introduction 1 Main events Q2 2021 2 Financial highlights 3 Outlook 4 12
Slide 13: Gross revenue with positive development in a seasonally strong quarter
Gross revenue with a positive development on the back of a seasonally strong quarter with tax returns for debtors Gross revenue (EUR million) +34% 99 95 91 91 92 87 83 85 79 71 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 13
Slide 14: NPL segment gross revenue growth and increasing CM1 margin
NPL segment with continued gross revenue growth and increasing CM1 margin NPL Gross Revenue and CM1% (EUR million and %) 80% 79% 77% 75% 77% 73% 69% 78% 64% 69 66 54 61 62 63 1 • All-time high gross revenue on NPL 54 54 0 9 52 50 • 27% YoY gross revenue growth 1 21 24 28 27 17 27 23 28 • Despite mar
Slide 15: NPL active forecast aligned with current performance
NPL active forecast aligned with current performance Active forecast versus cash collected1 • Unsecured NPL collection performance in Q2 2021 of 99% • Historic underperformance assumed lost – prudent approach • Expect long-term performance to fluctuate around 100% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Slide 16: NPL investments at a historic low of EUR 12m
NPL investments at a historic low of EUR 12m - Investments expected to exceed replacement CAPEX over the next 12 months NPL book value (EUR million) 0% 1,107 1,115 1,125 1,124 1,104 1,042 1,065 35 22 16 12 62 964 95 90 909 85 • Low portfolio investment of EUR 12m for the 781 149 69 quarter • Expect
Slide 17: 3PC development
3PC development - Total income and margins are improving. Expected to continue improving as society reopens CM1 margin in Q1 and 3PC total income and CM1% CM1 margin affected by (EUR million and %) Q2 affected negatively restructuring cost by restructuring cost 16 +34% 16 14 13 14 13 12 • Negative i
Slide 18: REO development (run-off segment)
REO development (run-off segment) - Good sales momentum on a declining asset base, but with negative margins REO total income and CM1% (EUR million and %) 25 25 21 • Revenue upheld on good level despite declining 20 asset base • Inventory down 42% since Q2 2020 13 • 361 assets sold during Q2 2021 12
Slide 19: Summary: growth on total income, margin expansion, cash EBITDA
Summary: Growth on total income, margin expansion and second highest cash EBITDA ever Total Income EBITDA and EBITDA-margin Cash EBITDA (EUR million) (EUR million and %) (EUR million) 49% 36% 31% 32% 32% 29%34% 75 30% 25% 67 74 72 65 66 66 59 60 61 64 62 56 61 30 26 52 56 55 24 48 22 20 22 44 17 18
Slide 20: All-time high net profit after tax to equity holders
All-time high net profit after tax to equity holders D&A1, Net financials and tax Net profit after tax (EUR million) (EUR million) 24 7 • Cost discipline materializing in lower 3 17 21 20 5 5 depreciation for the quarter 18 2 16 17 14 3 3 18 5 4 2 2 4 3 3 3 3 3 • Positive development in net financia
Slide 21: RoE to shareholders back on pre-pandemic levels
RoE to shareholders back on pre-pandemic levels - Aim to initiate dividend payments as return on equity gradually improves Return on Equity excl. minorities per quarter (annualized) Covid-19 Q3 unnaturally high due to REO impairment reversal 12% 11% and low NPL amortization • Expect RoE to improve o
Slide 22: Agenda
Agenda Company introduction 1 Main events Q2 2021 2 Financial highlights 3 Outlook 4 22
Slide 23: Outlook
Outlook ROE expected to increase over time, but with short term fluctuations • 3PC volume expected to return to pre-pandemic levels as societies re-open • Cost reduction program targeting EUR 1.2m additional annualized savings by year-end • Increasing market activity for both 3PC and NPL • Axactor s
Slide 24: Supporting information
Supporting information
Slide 25: NPL portfolio Q2 2021
NPL portfolio Q?2 2021
Slide 26: NPL segment gross revenue growth and increasing CM1 margin
NPL segment with continued gross revenue growth and increasing CM1 margin NPL Gross Revenue and CM1% (EUR million and %) 80% 79% 77% 75% 77% 73% 69% 78% 64% 69 66 54 61 62 63 1 • All-time high gross revenue on NPL 54 54 0 9 52 50 • 27% YoY gross revenue growth 1 21 24 28 27 17 27 23 28 • Despite mar
Slide 27: Improving collection performance
Improving collection performance Actual collection vs. active forecast1 (LTM, rolling) 112% 108% 106% • Q2 collection performance of 99% 100% 101% 101% 98% 98% 98% 97% 96% 92% 93% • LTM collection performance of 98% • Curves for 2021 aligned with current performance • Long term average performance e
Slide 28: Investment commitments are increasing
Investment commitments are increasing - Prioritizing high IRR portfolios, and expecting significant volumes to be offered in Q4 2021 Quarterly NPL investments (EUR million) 149 • Increasing forward flow commitments 95 85 90 • Expect significant volumes to be offered in Q4 2021 69 62 • Commitments de
Slide 29: ERC decreasing by 2% YoY due to low investment levels
ERC decreasing by 2% YoY due to low investment levels Estimated ERC development Forward ERC profile by year (EUR million) (EUR million) -2% 2,153 2,160 2,169 2,159 2,119 287 2,038 2,052 1,877 248 1,721 219 1,473 194 173 155 139 126 114 103 93 84 76 59 50 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-
Slide 30: ERC split on estimated yield and amortization
ERC split on estimated yield and amortization - Axactor uses the IFRS industry standard, the effective interest method, to calculate amortization ERC next four quarters ERC next 15 years (EUR million) (EUR million) 80 287 72 68 68 248 219 39 154 194 41 135 173 38 37 155 119 139 106 126 93 114 82 103
Slide 31: 3PC Q2 2021
3PC Q?2 2021
Slide 32: 3PC Development
3PC Development - Total income and margins are improving. Expected to continue improving as society reopens CM1 margin in Q1 and 3PC total income and CM1% CM1 margin affected by (EUR million and %) Q2 affected negatively restructuring cost by restructuring cost 16 +34% 16 14 13 14 13 12 • Negative i
Slide 33: 3PC volumes by geographic region
3PC volumes by geographic region 3PC total income split by geographic region 1% 2% 21% • Spain generate majority of 3PC income Q2’21 • Nordics accounting for 19% of revenue Total income 4% EUR 12.9m 56% 15% FIN DEU ITA NOR ESP SWE 33
Slide 34: REO portfolio (run-off segment)
REO portfolio (run-off segment) Q2 2021
Slide 35: REO development (run-off segment)
REO development (run-off segment) - Good sales momentum on a declining asset base, but with negative margins REO total income and CM1% (EUR million and %) 25 25 21 • Revenue upheld on good level despite declining 20 asset base • Inventory down 42% since Q2 2020 13 • 361 assets sold during Q2 2021 12
Slide 36: REO portfolio moving towards the tail
REO portfolio moving towards the tail REO book value* REO # of units* (EUR million) 223 7,388 198 200 6,703 187 181 6,161 6,323 5,773 157 162 5,130 148 4,825 4,612 129 120 4,024 3,740 3,489 89 84 3,076 2,694 79 2,391 68 2,039 55 8 521 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 2017 2018 2018 20
Slide 37: REO statistics
REO statistics* (EUR million) Current book Asset class # assets % of total Book value % of total • Housing represent 54% of current book value Housing 810 40 % 29.6 54 % Parking, annex etc. 683 33 % 2.5 4% Land 237 12 % 3.8 7% Commercial 309 15 % 20.3 37 % • Average book value per remaining asset EU
Slide 38: Appendix
Appendix
Slide 39: P&L statement
P&L statement EUR thousand Interest income from purchased loan portfolios For the quarter end 30 Jun 2021 41,779 30 Jun 2020 40,511 Year to date 30 Jun 2021 83,677 30 Jun 2020 79,838 Net gain/(loss) purchased loan portfolios -2,084 -28,147 -4,120 -36,906 Other operating revenue 26,161 16,219 47,331
Slide 40: Balance sheet statement
Balance sheet statement EUR thousand 30 Jun 2021 30 Jun 2020 Full year 2020 EUR thousand 30 Jun 2021 30 Jun 2020 Full year 2020 ASSETS EQUITY AND LIABILITIES Intangible non-current assets Equity attributable to equity holders of the parent Intangible Assets 19,064 21,184 19,989 Share Capital 158,150
Slide 41: Legal organization June 2021
Legal organization June 2021 Axactor SE (Norway) 50%* Axactor Platform Holding AB Axactor Portfolio Holding AB Reolux Holding S.à r.l. Axactor Italy Holding (Sweden) (Sweden) (Luxembourg) S.r.l. (Italy) Axactor Finland Axactor Capital Axactor Norway Axactor Germany Axactor España, Axactor Sweden Bet
Slide 42: Terms and abbreviations
Terms and abbreviations APM / KPI definition EBITDA adjusted for change in forward flow derivatives, calculated cost of share option program, portfolio Terms and abbreviations Cash EBITDA amortizations and revaluations, REO cost of sales and REO impairments CM1 Margin Total operating expenses (exclu
Slide 43: axactor.com
axactor.com AXACTOR
Slide 44: Slide 44