Slide 1: Q4 2018 presentation
Q4 2018 presentation Axactor SE February 13, 2019
Slide 2: From start-up to top-10 player in Europe in 3 years
From start-up to top-10 player in Europe in 3 years Estimated Remaining Collection (ERC in EUR bn) € 1.7 • Axactor has become a leading European debt management provider • Accumulated investments of € 0.9 >EUR 1bn since inception • Established collection platform companies in six countries € 0.3 201
Slide 3: Generated strong revenue growth
Generated strong revenue growth Gross revenue (EUR million) € 239 • More than doubling of revenues • Growth in all segments • Investments and contracts signed in 2018 point towards € 105 continued revenue growth in 2019 € 40 2016 2017 2018 3
Slide 4: Scalability beginning to show through in earnings
Scalability beginning to show through in earnings EBITDA in EUR million € 46 • Tripling of EBITDA • 22% EBITDA-margin • Improvement reflecting higher volumes, better geographical mix and high operational € 15 leverage -€ 6 2016 2017 2018 4
Slide 5: Focus on profitable growth
Focus on profitable growth • Large and increasing NPL opportunities with attractive IRR • Strengthening the 3PC and ARM business • Relentless focus on ONEAXACTOR to sharpen the competitive edge 5
Slide 6: Key highlights Q4 2018
Key highlights Q4 2018 GROSS REVENUE EBITDA EBITDA-margin CASH EBITDA CASH BALANCE 75 EUR MILLION 20 EUR MILLION 29 PERCENT 45 EUR MILLION 71 EUR MILLION +116% y/y +246% y/y +9%p y/y +231% y/y • Continued strong growth in revenue and sharp increase in EBITDA-margin • Positive development across all
Slide 7: Events post Q4 closing
Events post Q4 closing • Acquisition of minority shareholder position (10%) in Axactor Italy S.p.A • DnB/Nordea release of EUR 100 million of RCF accordion option (of total EUR 150 million) • Signed small forward flow agreement and acquired NPL portfolio from a financial institution in Sweden 7
Slide 8: Growth and margin improvement
Growth and margin improvement Gross revenue development EBITDA (EUR million) and Cash EBITDA (EUR million) EBITDA-margin (EUR million) 80 25 50 70 75 29% 45 67 20 40 41 60 20 57 50 21% 15 20% 20% 30 33 17% 40 41 34 10 11 20 30 10 18 20 13 5 6 6 10 10 0 0 0 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q4
Slide 9: Growth across all segments
Growth across all segments Gross revenue per segments (EUR million) 80 • Investment driven NPL growth, with limited effect of 75 ARM large investments in Q4 70 67 3PC • REO sales on par with previous two quarters 60 57 REO portfolios • Limitations in sales capacity NPL 50 portfolios • Market pausing
Slide 10: Growing geographical footprint
Growing geographical footprint Gross revenue per country (EUR million) 80 • 2018 with gross revenue growth in all countries 75 FIN 70 67 ITA • Positive entry into Finland SWE 60 57 • Revenue of EUR 3m based on one month of DEU operation - exceeding Sweden and Italy NOR 50 ESP • Started implementing
Slide 11: EBITDA & Cash EBITDA: Profitability development LTM
EBITDA & Cash EBITDA: Profitability development LTM EBITDA (EUR million) and cash EBITDA, Last 12 months 150 • 2018 EBITDA increased to EUR 46m 136 • High volume growth 125 105 • Favourable revenue mix 100 • High operational leverage 78 75 • 2018 Cash EBITDA increased to EUR 136m 50 47 46 33 32 • NP
Slide 12: NPL portfolio
NPL portfolio AXACTOR
Slide 13: NPL: High investment level in more balanced portfolio
NPL: High investment level in more balanced portfolio Quarterly NPL investments (EUR million) NPL investments (EUR million), LTM rolling 350 329 500 462 450 300 400 250 350 300 200 250 220 206 150 187 200 158 100 87 150 69 100 47 50 17 50 0 0 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q4 2017 Q1 2018 Q
Slide 14: NPL: Step change in total portfolio size
NPL: Step change in total portfolio size ERC development (EUR million) NPL book value per country (EUR million) 1 600 800 729 1 388 1 400 700 1 200 600 1 000 500 821 419 800 726 729 400 354 359 633 317 600 300 400 200 200 100 0 0 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q4 2017 Q1 2018 Q2 2018 Q3 201
Slide 15: NPL: Forward flow build-up
NPL: Forward flow build-up Estimated FF from signed contracts (EUR million) 30 • Continued inflow of new forward flow contracts 25 25 24 24 24 • Several new contracts in Sweden, including large 21 21 18-month contract starting up in March 21 20 20 18 19 19 19 • Added large financial institution to t
Slide 16: NPL: Estimated collection points to profitable growth
NPL: Estimated collection points to profitable growth Actual collection vs. original business case (LTM, rolling) Forward ERC profile by year (EUR million) 110% 250 105% 105% 105% 225 105% 103% 198 200 101% 183 100% 175 100% 147 96% 150 124 95% 125 111 92% 99 91% 100 89 80 90% 71 75 64 57 50 50 44 3
Slide 17: REO portfolio
REO portfolio AXACTOR
Slide 18: REO: Reduced capex – asset bulk sales in 2019
REO: Reduced capex – asset bulk sales in 2019 REO in Spain (EUR million) 300 274 • Axactor tuning down the REO investment level – deployed only EUR 6m into REO assets in Q4 250 225 • 2019 focus is NPL investments, with good portfolio availability and increasing IRRs 200 156 161 150 • Timing of asset
Slide 19: Quarterly REO capex, book value and ERC
Quarterly REO capex, book value and ERC REO investments, Spain (EUR million) REO book value and ERC, Spain (EUR million) 160 350 147 304 140 300 274 274 120 250 250 225 213 100 200 200 193 181 80 154 150 60 45 44 100 40 20 50 5 6 0 0 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q4 2017 Q1 2018 Q2 2018 Q3
Slide 20: REO – Lifetime KPIs
REO – Lifetime KPIs Sales (EUR million)* No. of assets sold* 2 223 • Lifetime portfolio performance ahead of original 2 114 97 business case 89 • Low quality assets sold at a discount in Q4 • Average sales prices: • Lifetime: EUR 44 k • 2018: EUR 45 k (2.001 units sold) • Q4’18: EUR 38 k ( 612 units
Slide 21: 3PC & ARM
3PC & ARM AXACTOR
Slide 22: Growing the platform business
Growing the platform business Gross revenue (EUR million) 15 • Targeting a more balanced product portfolio 3PC ARM 2 13 • Established 3PC businesses in all markets • Strong 3PC offers synergies in terms of business 10 origination, collection execution and data generation • Established customer relat
Slide 23: One Axactor
One Axactor AXACTOR
Slide 24: Digitalization Partnerships Systems
2019 AEM 2.0 & IT Sales acceleration Innovation & Digital • Digitalization • Partnerships 2017 • Systems Basics Scale benefits Partners • Standardization • Common KPIs 2015 • Benchmarking Structure People Systems 24
Slide 25: Financials
Financials AXACTOR
Slide 26: Contribution per segment – excl. unallocated overhead costs
Contribution per segment – excl. unallocated overhead costs Contribution per segment (EUR million)* 35 • Stronger NPL contribution due to higher volumes 30 and more favourable geographical mix 25 • Steadily improving 3PC contribution with new contracts continuing to add volumes 20 • Stable developme
Slide 27: Net finance, tax and net profits
Net finance, tax and net profits Condensed Income statement Key comments EUR thousand Q4 2018 Q4 2017 2018 2017 • Total net financial cost of EUR 12.4m in Q4 EBIT 17 885 4 237 40 297 9 488 Net financial items -12 447 -5 596 -34 138 -7 515 • Interest cost of EUR 9.5m, of which EUR 1.4m Profit/ -loss
Slide 28: Balance sheet structure
Balance sheet structure Assets (EUR million) Equity & Liabilities (EUR million) Cash 1,108 Other 1,108 Other 71 45 IB debt 26 Intangibles 82 Equity Portfolios 929 734 622 622 49 32 27 76 471 299 292 328 YE 2017 YE 2018 YE 2017 YE 2018 28
Slide 29: Debt maturity profile
Debt maturity profile Revolving Credit Facility, EUR 250m + EUR 150m accordion Option Axactor Invest 1, EUR120m senior debt facility Axactor Invest 1, EUR 120m mezzanine Bond, EUR 150m + EUR 100m tap option Reolux/Nomura, EUR 99m outstanding balance 31.12.2018 31.12.2019 30.12.2020 30.12.2021 30.12.
Slide 30: Summary & Outlook
Summary & Outlook AXACTOR
Slide 31: Q4 & 2018 Summary
Q4 & 2018 Summary • Continued growth and margin expansion • High investments in several markets – step change in portfolio size • Geographical expansion - positive entry into Finland • Continuing to drive efficiency and cost through “ONEAxactor” 31
Slide 32: Outlook
Outlook • High investment level in 2018 secures healthy profitable growth in 2019 • Increasing revenue expected from 3PC and ARM • Margin expansion expected to continue from 2018 to 2019, with quarterly fluctuations • High volume of NPL portfolios for sale in our markets, with portfolio IRRs on the
Slide 33: Klikk for å redigere tittelstil
Klikk for å redigere tittelstil AXACTOR Confidential 33
Slide 34: Appendix
Appendix AXACTOR
Slide 35: Legal Organization February 2019
Legal Organization February 2019 Axactor SE (Norway) 50% Axactor Incentive AB Axactor Invest 1 S.à r.l. (Sweden) (Luxembourg) 50% Axactor Italy Holding Axactor Platform Holding AB Axactor AS Axactor Portfolio Holding AB S.r.l. Reolux Holding S.à r.l. (Sweden) (Norway) (Sweden) (Italy) Axactor Finlan
Slide 36: P&L statement
P&L statement {for the quarter end Full Year 31Dec 31 Dec 31 Dec 31Dec 2018 "2017 2018 2017 EUR thousand Note Net revenue 34 68.034 28652 206909 87 745 Other revenue 3 0 ° ° 2040 Total revenue esosst = 28652206 909, 89785 Cost of secured assets sold (REOs) 7 16417 “1321 54491 “144s, Personnel expens
Slide 37: Balance sheet statement
Balance sheet statement Equity and liabilities Equity attributable to equity holders of the parent Share Capital 8 81 115 79 377 Other paid-in equity 200 298 196 298 Retained earnings profit/(Loss) -14 172 -15 630 Reserves -2 817 13 Non-controlling interests 63 746 31 776 Total equity 328 171 291 83