Slide 1: Q1 2020 – 21 April 2020
AXACTOR QI 2020 21 April 2020
Slide 2: Our Covid-19 priorities
Our Covid-19 priorities Protecting people, organization and operation • The main priorities have been to protect employees and safeguard business continuity • Spain and Italy with significant social and economic impact HQ • In full operation for customers, debtors and partners in all six markets - c
Slide 3: Significant impact on growth and margin development
Significant impact on growth and margin development Gross revenue development EBITDA and EBITDA-margin Cash EBITDA (EUR million) (EUR million and %) (EUR million) 36% 99 91 91 26 31% 32% 87 30% 29% 65 67 24 79 75 22 25% 59 60 67 20 20 21% 48 20% 57 45 17% 41 14 41 33 11 10 6 18 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Slide 4: High impact in Spain – particularly in the REO segment
High impact in Spain – particularly in the REO segment • Partly closing of public notary offices hindered Gross revenue development Spain, by segment (EUR million) conclusion of already entered REO sales agreements 53.7 53.3 • The escalation of the Covid-19 situation has 50.9 47.7 51.8 reduced the n
Slide 5: More resilience in the Nordics and Germany through Q1
More resilience in the Nordics and Germany through Q1 • Relatively stable gross revenue development from Gross revenue development, excluding Spain (EUR million) Q4 to Q1 in Germany and the Nordics 46.0* 46.7 • Forward flow agreements generating YoY growth 42.5 • Strong Q1 performance in Norway, esp
Slide 6: Further declines expected in Q2 - mitigating actions taken
Further declines expected in Q2 - mitigating actions taken • Q2 revenues depending on magnitude and length of the extraordinary measures • Reopening of public notary offices in Spain • Resuming of normal banking operation in Spain and Italy • Continued operational bailiff systems in the Nordics and
Slide 7: Mixed impact on the longer-term position
Mixed impact on the longer-term position Gross revenue 12 months rolling 368 Negative medium-term effects: (EUR million) 357 344 – Economic setback, higher unemployment and lower 313 consumer affordability 288 – Sharp increase in current unemployment rates across 239 Europe, although mainly due to t
Slide 8: RCF maturity extended 12 months
RCF maturity extended 12 months EUR million 50 Bond 200 Axactor Invest 1, senior debt 120 75 Revolving Credit Facility 425 Reolux/Nomura REO financing 42 Axactor Invest 1, mezzanine 140 Option 31.12.2019 30.12.2020 30.12.2021 30.12.2022 • Equity ratio of 29%, following EUR 51 million • Extended EUR
Slide 9: Assessing impact of Covid-19 on portfolio valuation
Assessing impact of Covid-19 on portfolio valuation Assets Equity and Liabilities • Present value of NPL portfolios and REO assets will (EUR million) (EUR million) depend on the length and depth of extraordinary measures and economic setback 40% 1 500 1 349 1 349 1 198 1 198 35% • No impairment char
Slide 10: Quarterly update Q1 2020
Quarterly update Q1 2020
Slide 11: Q1 2020 - Key highlights
Q1 2020 - Key highlights Gross revenue EBITDA and margin Cash EBITDA ERC (EUR million) (EUR million and %) (EUR million) (EUR million) 100 90 2 187 80 -13% 20 -36% -18% +27% 135 70 1 717 60 244 50 40 10 2 052 30% 30 25% 1 473 20 91 79 22 14 59 48 10 0 0 Q1 2019 Q1 2020 Q1 2019 Q1 2020 Q1 2019 Q1 202
Slide 12: Decline in revenue primarily driven by REO segment
Decline in revenue primarily driven by REO segment Gross revenue development • Negative impact of coronavirus outbreak and measures (EUR million) to stop the spread: 99 • Impact most apparent in Spain and Italy 91 91 • REO segment particularly affect as the closure of public 87 79 notary offices hin
Slide 13: NPL portfolio Q1 2020
NPL portfolio Q1 2020
Slide 14: Capex mainly deployed in Nordic forward flow deals
Capex mainly deployed in Nordic forward flow deals NPL gross revenue development Quarterly NPL investments (EUR million) (EUR million) 61 149 54 54 52 50 40 95 86 90 31 69 25 21 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 2018 2018 2018 2018 2019 2019 2019 2019 2020 ESP NOR DE
Slide 15: Collection performance impacted by Covid-19
Collection performance impacted by Covid-19 Actual collection vs. active forecast* • Weaker collection performance following (LTM, rolling) comprehensive Covid-19 measures: 112% • In Italy and Spain, many debtors experience a worse financial 108% 106% 100% 101% 101% 98% situation and processes have
Slide 16: Forward flow outlook
Forward flow outlook Estimated FF investments from signed contracts • As announced, Axactor has suspended its (EUR million) investment target for 2020 • Total estimated forward flow volume of 30 approximately EUR 225m in 2020 27 26 • Focusing on combined forward flow and 3PC 25 23 22 22 contracts 20
Slide 17: NPL: Increased Nordic exposure
NPL: Increased Nordic exposure ERC development Forward ERC profile by year (EUR million) (EUR million) 2 500 300 268 2 052 275 2 038 250 2 000 1 877 250 1 721 225 211 1 500 1 473 200 184 175 160 145 132 150 120 1 000 125 109 100 91 100 83 76 75 69 500 54 50 25 0 0 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1
Slide 18: 3PC Q1 2020
3PC Q1 2020
Slide 19: 3PC – increased relevance for customers
3PC – increased relevance for customers Gross revenue 3PC • Mixed effect following Covid-19 outbreak 18 (EUR million) • Negative FX effect in Norway, lower volume in Spain and field 16 16,0 15,6 service shut-down in Germany 14 14,7 13,4 13,6 13,5 12 12,3 12,5 • Axactor expects higher demand for 3PC
Slide 20: Building for the future of debt management
Building for the future of debt management 3PC revenue split by geographic region FIN; 3% • Increasing the Nordic 3PC business • Synergies to be extracted from cross-border deals ITA; 5% • Nordics accounted for 22% in the quarter • New deals signed in Q1 generating revenue from late DEU; 19% March 2
Slide 21: REO portfolio Q1 2020
REO portfolio Q1 2020
Slide 22: REO: Disruption from coronavirus in Spain
REO: Disruption from coronavirus in Spain REO gross revenue development • Revenue shortfall in the quarter (EUR million) • All REO assets are in Spain where the closure of public notary 30 7 388 800 0 offices affected both ongoing sales and the completion of already 6 703 entered sales 6 323 700 0 6
Slide 23: Book value of EUR 120m at end Q1 2020
Book value of EUR 120m at end Q1 2020 REO: ERC profile (EUR million) 90 • ERC decreased by 10% in the quarter 82 Total ERC: • EUR 2m discount vs ERC in Q4 EUR135m 80 70 • EUR 5m reduction of future ERC 60 • REO represents 6% of Group ERC and declining 50 42 • Target to realize approximately 30% of r
Slide 24: Financials Q1 2020
Financials Q1 2020
Slide 25: Contribution per segment
Contribution per segment Contribution per segment* Total: (EUR million) - Excluding unallocated overhead cost • Contribution margin of 46% in Q1, same as last year 35 36 • Reflects revenue mix as REO carries lower contribution margins 34 1 1 31 3 2 29 NPL: 6 5 4 8 1 1 25 • Contribution margin of 69%
Slide 26: Minority shareholders in both NPL and REOs
Minority shareholders in both NPL and REOs - Axactor REO exposure down to ~2.5% of total consolidated ERC Total ERC exposure (EUR million) 2 187 • Axactor has approximately 40% of the total 135 6% exposure for REO 1 765 • Minority shareholders in both Reolux and its 54 3% subsidiaries • Axactor’s sh
Slide 27: Axactor targeting improved ROE over time
Axactor targeting improved ROE over time Return on Equity* Drivers Leading up to Q1 2020 Outlook (Periodic, %) • NPL portfolio prices • Increasing IRR during 2019 • Improved IRR levels to be and stabilizing into 2020 blended in over time • Economies of scale • EBITDA margin improving • Stabilizing w
Slide 28: Net finance, tax and net profits
Net finance, tax and net profits Condensed Income statement (EUR thousand) EUR thousand For the quarter end / YTD 31 Mar 2020 31 Mar 2019 Full year 2019 • Total net financial cost of EUR 5.9m EBIT 11,517 19,875 82,025 • Interest cost of EUR 14.3 Financial revenue 9,733 16 2,787 • Average blended int
Slide 29: Summary Q1 2020
Summary Q1 2020
Slide 30: Summary and outlook
Summary and outlook • First quarter 2020 impacted by the outbreak of coronavirus and the measures to contain it • Spain and REO performance particularly affected by the situation • Safeguarding employees and operations top priority • Negative effects expected to deepen in the second quarter – analys
Slide 31: Appendix
Appendix
Slide 32: P&L statement
P&L statement EUR thousand Interest income from purchased loan portfolios For the quarter end / YTD 31 Mar 2020 39,326 31 Mar 2019 28,989 Full year 2019 134,531 Net gain/loss purchased loan portfolios -8,758 6,371 -319 Other operating revenue 25,003 38,259 148,926 Other revenue 28 30 2,021 Total Rev
Slide 33: Balance sheet statement
Balance sheet statement EUR thousand 31 Mar 2020 31 Mar 2019 Full year 2019 EUR thousand 31 Mar 2020 31 Mar 2019 Full year 2019 ASSETS EQUITY AND LIABILITIES Intangible non-current assets Equity attributable to equity holders of the parent Intangible Assets 21,216 18,992 21,486 Share Capital 97,040
Slide 34: Legal organization March 2020
Legal organization March 2020 Axactor SE (Norway) Axactor Incentive AB Axactor Invest 1 S.à r.l.* 50% (Sweden) (to be discontinued) (Luxembourg) 50% Axactor Platform Holding AB Axactor Portfolio Holding AB Axactor Italy Holding Reolux Holding S.à r.l. S.r.l. (Italy) (Sweden) (Sweden) Axactor Finland
Slide 35: axactor.com
axactor.com AXACTOR