Slide 1: Nordea NPL Seminar
Nordea NPL Seminar Erik Just Johnsen, CFO – 22 March 2019
Slide 2: A Pan-European debt solutions provider
A Pan-European debt solutions provider GROUP REGIONS Northern Europe (NE) Poland 16% Norway, Sweden, Denmark, NE 30% Finland, Latvia, Lithuania, Estonia 22.3bn Poland Total ERC CE (NOK)1 26% Poland WE Western Europe (WE) 12% SEE Spain, Portugal, Italy, 16% France Central Europe (CE) Czech Republic,
Slide 3: Organisational overview
Organisational overview Olav Dalen Zahl CEO Harald Henriksen Chief Governance Officer Erik J. Johnsen Danckert Mellbye Jeremi Bobowski Harald Henriksen Thor Christian Moen Rasmus Hansson Chief Financial Chief Operation Chief Investment Chief Legal and General Counsel Director M&A Officer Officer Off
Slide 4: 2018 overview
2018 overview NOKm FY 2018 FY 2017 Change% Revenues1) 2,906 2,083 40% EBIT 1,378 984 40% EBIT margin1) 47 % 47 % ERC2) 22,262 15,264 46% Gross Cash Collection 3,997 2,552 57% #FTEs 2,420 2,067 17% #Claims ~7.1m ~6.1 16% Face value of portfolios ~152bn ~96bn 58% WE 1) Including the Group’s share of p
Slide 5: Strong historical financial performance
Strong historical financial performance CAGR Development in total gross ERC1 Total operating revenues2 NOK millions NOK millions 22,262 2,906 +51% +39% 15,264 2,013 1,396 9,489 1,076 6,490 4,430 510 1,371 232 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 Cash EBITDA EBITDA NOK millions
Slide 6: Increased diversification (1/2)
Increased diversification (1/2) Quarterly collection & relative distribution 60% 1 200 1 169 50% 1 000 1 032 1 022 40% 800 775 30% 723 600 604 650 556 575 20% 474 400 413 427 10% 200 0% - Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Total Northern Europe Poland Central Eur
Slide 7: Increased diversification (2/2)
Increased diversification (2/2) Quarterly Cash EBITDA & relative distribution 50% 833 423 900 000 759 432 777 839 800 000 40% 700 000 581 177 524 226 600 000 30% 472 117 399 274 419 623 500 000 400 000 20% 300 000 10% 200 000 100 000 0% 0 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Total Norther
Slide 8: Established as one of top ten European debt collectors
Established as one of top ten European debt collectors European countries present (#) Estimated remaining collection (120m ERC, EURm) 24 5 210 1 23 3 348 23 3 315 14 2 985 11 2 197 10 2 167 7 1 930 6 1 956 5 1 686 1 5 1 514 Source: Company information and J.P.Morgan Credit Management Services Valuat
Slide 9: Access to a vast opportunity set for the future
Access to a vast opportunity set for the future Coverage of 78% of the EU NPL stock across our 23 countries European 200 bank NPL per country1 50 EURbn 45% Total volume of banking NPLs in Europe exceed EUR 780bn. 180 45 Italy, France, Spain and Greece, the four largest markets, account for ca. 159,0
Slide 10: Strategic directions
Strategic directions Continue growth in a changing market Focus Areas Growth in existing markets: Focus on increasing market - Continue growth by penetration and/or product expansion by taking advantage of the exploiting access to large large pipeline and access to the major NPL markets, while pipel
Slide 11: Financial targets for 2021
Financial targets for 2021 Assuming no new equity needed in the period ROI1 ≥ 14% ROE ≥ 20% Dividend ≥ 20–30% Net interest-bearing Debt/Cash EBITDA Leverage ≤ 3x Equity ratio ≥ 25% 1. ROI before tax, excl. overhead cost of B2Holding ASA Oslo and Luxembourg | 11
Slide 12: Aiming for operational excellence
Aiming for operational excellence Principles governing our business plans initiatives IT Software Collection strategies Pursuit of appropriate goals and doing them right High Pursuing right goals Pursuing right goals Digitalisation but inefficiently In an efficient manner (costly to execute) (High R
Slide 13: Aiming for operational excellence
Aiming for operational excellence Best Practice Case study: Scalability effect in our portfolio purchase - Practical examples of implementing efficiency programs & scale effects Development Finland 170,0 30% Efficiency program started in 2013 150,0 25% 130,0 FTE decreased to 126 110,0 20% 90,0 Book
Slide 14: Record purchase volume in 2018 of NOK 6,380m
Record purchase volume in 2018 of NOK 6,380m Portfolio purchase volumes1) Comments NOKm Record purchase volume in 2018 2014 2015 2016 2017 2018 Portfolio purchases mainly in Northern Europe 2 273 67% of purchases was unsecured portfolios 33% of purchases was secured portfolios 1 951 1 634 1 485 Key
Slide 15: Highly diversified portfolio yielding stable and predictable cash flows
Highly diversified portfolio yielding stable and predictable cash flows: Total gross ERC of approx. NOK 22.3bn (46% growth y-o-y) Development in total gross ERC1) Portfolio details (total gross ERC)1) NOKm NOKm Claims (#): Face value1) (NOK): Geography distribution Distribution by type SEE Poland ~7
Slide 16: Mature funding structure with prudent leverage
Mature funding structure with prudent leverage Strategy Successful issuance of four bonds Equity, bond and bank debt is used to get access to capital for when larger EUR millions portfolios or platform acquisition opportunities arise E+7.50% E+7.00% E+4.25% E+4.75% - Total equity raised since 2011:
Slide 17: Q&A
— a BZHOLDING*® Making cach ctl Q&A
Slide 18: Appendix
ae a BZHOLDING® Making cach ct ial Appendix
Slide 19: Record strong EBITDA, cash EBITDA and EBIT
Record strong EBITDA, cash EBITDA and EBIT Income statement Comments 2017 NOKm 2018 2017 Cost to collect was 24% at year audited Interest income from purchased loan portfolios 2,537 1,680 1,680 end 2018 (29% at year end 2017). Net credit gain/loss purchased loan portfolios -58 77 77 Volume effect ma
Slide 20: Financial highlights: Balance sheet
Financial highlights: Balance sheet Balance sheet Comments 2017 NOKm 2018 2017 Increase in purchased loan audited Tangible and intangible assets 274 201 201 portfolios of 53% in 2018 vs 2017 Goodwill 785 522 522 Purchased loan portfolios 13,346 8,732 8,732 Equity ratio 26.9%, high cash Other long-te
Slide 21: Key figures used in the sector
Key figures used in the sector Different portfolios with different MM and ERC but same net IRR, will have the same return on investment over time given reinvestment of the amortized amount in the same type of portfolio Secured portfolio Portfolio Characteristics 250 000 150% MM 1,5 Short curve 200 0
Slide 22: Financial risk management
Financial risk management The strategy of the Group is to manage and limit both currency and interest rate risk. The Group holds various derivative financial instruments with the purpose of reducing its interest rate exposure and achieving a suitable currency ratio between its assets and liabilities
Slide 23: Stortingsgaten 22, Oslo contact details
Stortingsgaten 22 | P.O. Box 1726 Vika | N-0121 Oslo www.b2holding.no | Tel: +47 22 83 39 50 | E-mail: post@b2holding.no