Slide 1: Axactor Presentation Q2 2024
AXACTOR Presentation + N =) N N Oo
Slide 2: Highlights, Financial update, Outlook, Q&A
Highlights Financial update Outlook Q&A
Slide 3: Financial highlights for the quarter
Financial highlights for the quarter Gross revenue declining by 2% y-o-y • On the back of a challenging macro situation and moderate investments in 2023 • Ramping up NPL investments to EUR 70m – a first start to return to growth Cash EBITDA increasing by 3% y-o-y • Strict cost control in all markets
Slide 4: Ramping up NPL investments on an accretive price level
Ramping up NPL investments on an accretive price level - Gross IRR on the total NPL book up 3.0pp last 3 years NPL investments and Gross IRR on the total NPL book (EUR million, %) NPL Investments Gross IRR 100 18.7% 19% 17.7% 18% 75 16.7% 17% 50 93 15.7% 80 16% 69 70 25 54 47 15% 40 32 33 19 24 16 1
Slide 5: Strict cost control enables a reduction in total operating expenses of 11% y-o-y
Strict cost control enables a reduction in total operating expenses of 11% y-o-y, despite inflationary pressure Total operating expenses (EUR million) +7% -11% 32 32 32 Total operating expenses down 11% y-o-y 31 30 30 30 • Third consecutive quarter with y-o-y reduction despite inflationary pressure
Slide 6: Two new projects under implementation to absorb inflation
Two new projects under implementation to support the goal of being able to continue to “absorb” inflation • Closure of the office in Cuneo was announced on 1 July affecting approximately 100 employees in Italy • All employees will be offered to relocate to the three Site consolidation competence cen
Slide 7: Axactor will benefit materially if interest rates declines
Axactor will benefit materially if interest rates declines EURIBOR 3 months (Jan ’20 – Jul ’24)1 4% Axactor is exposed to changes in interest rates • 95% of net interest-bearing debt is unhedged 3% Status on interest rate hedges 2% • 5% of net interest-bearing debt is hedged2 • In addition, in the P
Slide 8: Highlights, Financial update, Outlook, Q&A
Highlights Financial update Outlook Q&A
Slide 9: Group: Gross revenue is down 2% y-o-y
Group: Gross revenue is down 2% y-o-y on the back of low NPL investments in 2023 Gross revenue (EUR million) +5% -2% 89 91 89 87 84 85 82 83 13 15 15 13 15 79 13 • Gross revenue is down 2% y-o-y 13 13 12 • NPL gross revenue declining by 3% y-o-y • 3PC gross revenue increasing by 2% y-o-y 73 74 78 72
Slide 10: NPL segment: Total income is up q-o-q with improved margins
NPL segment: Total income is up q-o-q with improved margins NPL Total income and CM% (EUR million, and %) +13% -12% 49 52 52 50 • Total income down y-o-y on the back of 46 46 48 45 46 macroeconomic headwinds • Improved margin, from 76% to 78% y-o-y, driven by cost improvement projects 77% 78% 76% 76
Slide 11: 3PC segment: Positive development on both the top line and margins
3PC segment: Positive development on both the top line and margins 3PC Total income and CM% (EUR million and %) -10% +2% 15 15 15 • 3PC total income growth of 2% y-o-y 13 13 13 13 13 • 8% growth excluding the closure of 3PC in 12 Sweden and Finland 46% 41% 35% 41% 36% • Margins slightly up driven by
Slide 12: Group: Cash EBITDA turned back to growth and is up EUR 12m q-o-q
Group: Cash EBITDA turned back to growth and is up EUR 12m q-o-q Total income EBITDA and EBITDA-margin Cash EBITDA (EUR million) (EUR million and %) (EUR million) +8% -9% 51% 54% 53% 65 65 51% 63 62 64 50% 49% 49% 50% +4% +3% 60 59 59 34 34 46% 57 33 61 30 30 31 30 30 58 58 60 54 55 55 26 51 49 Q2 Q
Slide 13: ROE of 4% last twelve months
ROE of 4% last twelve months – despite increased cost of funding and a challenging collection environment Return on equity to shareholders (%) 9% 7% 6% 4% 1% 2% -6% -6% -9% 2016 2017 2018 2019 2020 2021 2022 2023 LTM Q2-24 13
Slide 14: Highlights, Financial update, Outlook, Q&A
Highlights Financial update Outlook Q&A
Slide 15: Outlook for 2024
Outlook for 2024 • Experience a challenging collection environment which is expected to 1 Collection prevail throughout 2024 • Absorbed inflation and achieved OPEX reduction y-o-y last three 2 OPEX quarters. Expect to be able to continue the trend 3 Cost of funding • Expect only modest reduction in
Slide 16: Highlights, Financial update, Outlook, Q&A
Highlights Financial update Outlook Q&A
Slide 17: Supporting information
Supporting information
Slide 18: NPL investment commitments of EUR 8m next 12 months
NPL investment commitments of EUR 8m next 12 months Quarterly NPL investments (EUR million) 93 69 70 47 40 33 Additional forward 24 flow agreements and 19 one-off acquisitions 11 expected to further 4 3 2 increase NPL 0 investments Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 ’22 ’22 ’22 ’23 ’23 ’23 ’23 ’
Slide 19: ERC increasing by 4% last twelve months
ERC increasing by 4% last twelve months ERC development Forward ERC profile by year (EUR million) (EUR million) +4% 2,664 334 323 2,545 2,523 2,563 2,586 2,620 2,555 2,367 300 2,279 263 230 196 175 158 142 127 107 93 82 72 63 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 Y12 Y13 Y14
Slide 20: 3PC volumes by geographic region
3PC volumes by geographic region 3PC Total income split by geographic region 10% 20% Q2’24 • Spain accounting for 56% of total income on 3PC Total income EUR 13.4m 56% • Segment closed down in Finland and Sweden, with no active clients per year-end 2023 14% DEU ITA NOR ESP 20
Slide 21: Bond covenants (1/2)
Bond covenants (1/2) Leverage ratio - covenant ≤4.0x Interest coverage ratio - covenant ≥3.0x (Net interest-bearing debt divided by LTM Pro-forma adjusted cash EBITDA) (Pro-forma adjusted cash EBITDA divided by net interest expenses) 4.0 3.0 4.0 5.2 5.2 5.0 3.9 3.9 4.6 3.8 3.8 4.2 3.8 3.8 3.5 3.2 3.
Slide 22: Bond covenants (2/2)
Bond covenants (2/2) Loan-to-value - covenant ≤80% Secured Loan-to-value - covenant ≤60% (Net interest-bearing debt divided by total portfolio book value) (Secured net interest-bearing debt divided by total portfolio book value) 60% 80% 73% 74% 39% 73% 73% 73% 73% 73% 37% 38% 37% 72% 72% 35% 35% 35%
Slide 23: Terms and abbreviations
Terms and abbreviations Abbreviations 3PC Third-party collection AGM Annual general meeting APM Alternative performance measures ARM Accounts receivable management B2B Business to business Terms B2C Business to consumer Active forecast Forecast of estimated remaining collection on NPL portfolios BoD
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