Intrum Ab · OMXSTO:INTRUM

Intrum Ab — Intrum Justitia — Q2 2013 Earnings Presentation

24 slides from Intrum Ab's earnings presentation, Jul 19, 2013

  1. Slide 1: Interim report January-June 2013

    Interim report January-June 2013 July 19th 2013 Lars Wollung, CEO Erik Forsberg, CFO

  2. Slide 2: Quarterly highlights

    Quarterly highlights 25% RTM EPS growth EBIT growth (adjusted for currency and debt 42% portfolio revaluations) 45% Growth in operating cash flow 22% Return on purchased debt 597 MSEK investments in purchased debt 2(24) © 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 Apr-Jun Apr-Jun Change Jan-Jun Jan-Jun 2013 2012 % 2013 2012 Revenues, MSEK: 1 152 1 037 11 2 200 1 993 EBIT, MSEK: 301 218 38 537 378 EBIT margin, %: 26 21 N/A 24 19 EPS growth, %: 45 27 N/A 54 7 Cash flow from operations, MSEK: 621 428 45 1 085 851 Investments in purchased debt,

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

    Revenues and operating margin, rolling 12 months Revenues: SEK 4 255 M Operating margin: 24% 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 2005 2006 2

  6. Slide 6: Northern Europe

    Regional development Market position Market leader Northern Europe Top 5 49 percent of total revenues Q2 Highlights Apr-Jun Apr-Jun Change Fx Adj Excl. PD Revaluations 2013 2012 % % • Revenue increase due to uptake in PD Revenues, SEKm 559 486 15% 17% investments during the last 12 months EBIT , SEK

  7. Slide 7: Central Europe

    Regional development Market position Central Europe Market leader Top 5 22 percent of total revenues Other Q2 Highlights Apr-Jun Apr-Jun Change Fx Adj Excl. PD Revaluations 2013 2012 % % • Good year on year growth for PD Revenues, SEKm* 248 218 14% 21% investments, driving revenue and EBIT EBIT, SEK

  8. Slide 8: Western Europe

    Market position Regional development Market leader Western Europe Top 5 29 percent of total revenues Other Q2 Highlights Apr-Jun Apr-Jun Change Fx Adj • Improved revenue development mainly Excl. PD Revaluations 2013 2012 % % Revenues, SEKm 339 330 3% 7% from PD investment growth and prior years EBIT

  9. Slide 9: Credit Management Services

    Credit Management Services 66 percent of total revenues Q2 Highlights Apr-Jun Apr-Jun Change Fx Adj Reported numbers 2013 2012 % % • Year-on-year revenue growth mainly due Revenues, SEKm 871 854 2% 6% Service line earnings, SEKm 207 197 5% 9% to growth from servicing of acquired PD Service line earn

  10. Slide 10: Financial Services

    Financial Services 34 percent of total revenues Q2 Highlights Apr-Jun Apr-Jun Change Fx Adj • Increase in PD investments during late 2012 Reported numbers 2013 2012 % % Revenues, SEKm 458 305 50% 55% and 2013 drives revenue and service line Service line earnings, SEKm 254 165 54% 60% earnings growth

  11. Slide 11: PD ROI – rolling 12 months

    PD ROI – rolling 12 months PD carrying value: SEK 4 970 M ROI RTM, excl. reval: 20% SEK M PD carrying value ROI RTM ROI RTM excl. reval 4 800 4 400 20% 4 000 3 600 3 200 15% 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 2008 2009

  12. Slide 12: Purchased debt, investments

    Purchased debt, investments 2002–2013 SEK M 2 500 2 014 2 000 FY 1 517 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(24) © Intrum Justitia AB 2013. All rights reserved.

  13. Slide 13: Purchased debt – revaluations

    Purchased debt – revaluations Q2 Q2 PD revaluations, SEK m 2013 2012 Northern Europe 3 2 Central Europe 7 1 Western Europe -4 0 Total 6 3 13(24) © Intrum Justitia AB 2013. All rights reserved.

  14. Slide 14: Balance sheet – Highlights

    Balance sheet – Highlights 30 Jun 30 Jun Dev SEK m 2013 2012 % Total assets 9 599 8 217 17 Goodwill 2 420 2 405 1 Total financial fixed assets 5 038 3 733 35 - whereof purchased debt 4 970 3 511 42 Shareholders' equity 2 980 2 685 11 Net debt/ R12 EBITDA* 1.74 1.56 12 14(24) * EBITDA = operating res

  15. Slide 15: Cash flow statement

    Cash flow statement Apr-Jun Apr-Jun Dev Jan-Jun Jan-Jun Dev SEK m 2013 2012 % 2013 2012 % Operating earnings (EBIT) 301 218 38 537 378 42 Depreciation 40 44 -9 79 86 -8 Amortization and revaluation of purchased debt 321 261 23 639 543 18 Income tax paid -28 -40 30 -65 -89 27 Changes in working capit

  16. Slide 16: Funding base

    Funding base • Syndicated bank loan facility (up to SEK 5bn) Debt Maturity Schedule ‒ SEK 2 bn utilized per June 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 March 2

  17. Slide 17: Financial targets

    Financial targets Financial target Q213 RTM FY 2012 1. EPS growth to exceed 10% per year 25% 6% 2. Return on PD investments to exceed 15% per year 19% 17% 3. Net Debt/EBITDA should be between 2,0 and 3,0 1.74 1.47 17(24) © Intrum Justitia AB 2013. All rights reserved.

  18. Slide 18: Q&A

    Q&A 18(24) © Intrum Justitia AB 2013. All rights reserved.

  19. Slide 19: Appendix

    Appendix 19(24) © 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 Q2 2013: 3 524 Listed on NASDAQ OMX, Stockholm, Mid-Cap Market capitalization, Jun 30, 2013: SEK 11.0 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(24) © Intrum Justitia AB 2013. All rights reserved.

  23. Slide 23: 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% 31% 34% 80% 40% 38% 50% 48% 51% 52% 49% 51% 70% 61% 59% 56% 60% 75% 79% 50% 40% 69% 74% 72% 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 Q3 Q4 Q1

  24. Slide 24: A broad indication going forward

    A broad indication going forward Carrying value 30 Jun 2013: SEK 4,970 M +42% y-o-y (SEK 3,511 M) Gross collection: Carrying value x 2.1 Cash flow distribution 30 Jun of Gross collection 2013 2012 Y1 23% 24% Y2 17% 18% Y3 14% 13% Y4 11% 11% Y5 9% 8% Y6 7% 7% Y7 6% 5% Y8 4% 4% Y9 3% 3% © Intrum Justi

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