B2 Impact Asa · OSL:B2I
B2 Impact Asa — B2Holding — Debt Investor Presentation (November 2017)
42 slides from B2 Impact Asa's debt investor presentation, Nov 2, 2017
Slide 1: Investor presentation
Investor presentation -- 2 November 2017
Slide 2: Important information (1/2)
Important information (1/2) This Presentation (the “Presentation") has been produced by B2Holding ASA (the “Company”) solely for use in connection with a contemplated offering of bonds by the Company (the “Bonds”) initiated 2 November 2017 (the “Offering”) as described herein, and may not be reprodu
Slide 3: Important information (2/2)
Important information (2/2) Neither this Presentation nor any copy of it nor the information contained herein is being issued, and nor may this Presentation nor any copy of it nor the information contained herein be distributed directly or indirectly, to or into Canada, Australia, Hong Kong, Italy,
Slide 4: Agenda
Agenda 1. Transaction overview 2. Company snapshot 3. Market 4. Portfolio overview 5. Financials 6. Appendix 7. Risk factors |4
Slide 5: Summary of B2H03 bond terms
Summary of B2H03 bond terms Issuer: B2Holding ASA Status of the bonds: Senior unsecured1) Initial amount: EUR 200 million Borrowing limit: EUR 300 million Use of proceeds: General corporate purposes Issue price: 100% of par value Coupon rate: 3m EURIBOR + [•]bps p.a., quarterly interest payments (su
Slide 6: Credit highlights
Credit highlights Attractive market with significant strategic entry barriers Attractive industry with Stable, cash-generative industry – macroeconomic drivers are to some extent off-setting sound market outlook Favourable market outlook with increased demand for B2H’s services across geograph
Slide 7: Agenda
Agenda 1. Transaction overview 2. Company snapshot 3. Market 4. Portfolio overview 5. Financials 6. Appendix 7. Risk factors |7
Slide 8: Trading update: Record strong cash collection, portfolio purchases in all regions present
Trading update: Record strong cash collection, portfolio purchases in all regions present, targeting an official rating in 2018 Comments on Q3 2017 Gross cash collection on portfolios NOK million Record strong cash collection of NOK 650m in Q3 2017 (+37% y-o-y), operational costs in line with expect
Slide 9: A leading pan-European debt collector with 19 platforms and total gross ERC of NOK 12.2bn
A leading pan-European debt collector with 19 platforms and total gross ERC of NOK 12.2bn Mature Platforms market Northern Europe (“NE”) 19 NE Countries with portfolios Poland (“P”) P 17 Central Europe Employees (FTEs) CE (“CE”) SEE 1,688 Southeast Europe (“SEE”) Total Gross ERC (NOKm) Growth market
Slide 10: Developments since Q3 2016: ERC over NOK 12bn, seven new platforms added
Developments since Q3 2016: ERC over NOK 12bn, seven new platforms added, MCAP approx. NOK 7bn Comments Share price performance NOK per share The asset base has continued to increase and diversify 20 19.0 - B2H has added seven platforms since Q3 2016; including Italy, MCAP (NOKm) Greece, Denmark and
Slide 11: Focus on all critical elements needed for securing attractive purchases
Focus on all critical elements needed for securing attractive purchases and ensuring successful collection processes Data collection and analysis People business Centre of excellence Data People Ability to attract talent Critical to be regarded as trusted partner Optimal collection strat
Slide 12: A disciplined investment process
A disciplined investment process BoD Analyse recommendations Approve critical decisions The Committee consists Approve investment strategy of the shareholders’ Investment Analyse investment representatives (the recommendations Chairman + two other), Committee Group’s CEO, CFO, CIO Review and adjust
Slide 13: Agenda
Agenda 1. Transaction overview 2. Company snapshot 3. Market 4. Portfolio overview 5. Financials 6. Appendix 7. Risk factors | 13
Slide 14: Debt purchasing is highly attractive for both buyers and sellers
Debt purchasing is highly attractive for both buyers and sellers SELLERS BUYERS Make provisions on non-performing loans, writing down the book Acquire the NPL loans at a discount to face value, but at a higher value of the receivable price than the banks’ book value 1 Banks Shadow banks 2 Debt Inter
Slide 15: Attractive industry characteristics, over 1 trillion in NPLs in Europe
Attractive industry characteristics, over 1 trillion in NPLs in Europe and significant volumes coming to market The level of NPLs on banks’ balance sheets Face value of European bank NPLs1) Face value, EURbn 1,400 M 1,200 1,084 A Over EUR 1 trillion in 1,000 C European bank NPLs 800 R – Italy, Greec
Slide 16: B2Holding has become a leading pan-European debt purchaser
B2Holding has become a leading pan-European debt purchaser ERC (EURm) # platforms Nordic 4,159 31 2,646 5 UK 2,226 9 2,162 4 Poland 2,031 14 1,946 5 1,930 28 CE and SEE 1,297 19 1,227 7 511 5 Source: Company information, USD/EUR 0.85, GBP/EUR 1.12, EUR/NOK 9.40 B2H per Q3 2017, Intrum, Hoist, Arrow,
Slide 17: One of the most diversified debt purchasers
One of the most diversified debt purchasers – balanced mix of mature- and growth markets Typical development stages of debt purchasing markets (illustrative only) Early phase Growth phase Mature phase • Regulatory or Cultural barriers and • Increasing competition across debt • Large share of NPL sto
Slide 18: Agenda
Agenda 1. Transaction overview 2. Company snapshot 3. Market 4. Portfolio overview 5. Financials 6. Appendix 7. Risk factors | 18
Slide 19: NOK 3.2bn in portfolio purchases LTM, up 46% from 2016
NOK 3.2bn in portfolio purchases LTM, up 46% from 2016 Portfolio purchases Comments NOK million Record strong volume for a third quarter (usually a less busy 2014 2015 2016 2017 quarter) Portfolio purchases in all regions present during the quarter, 81% unsecured 1,120 1,054 NOK 2.2bn in purchases Y
Slide 20: Highly diversified portfolio yielding stable and predictable cash flows
Highly diversified portfolio yielding stable and predictable cash flows: total gross ERC of approx. NOK 12.2bn (52% growth y-o-y) Development in total gross ERC Portfolio details (total gross ERC) NOK million NOK million SEE Claims (#): Face value (NOK): Secured 12% NE 26% 33% ~5.9m ~77bn Poland 25%
Slide 21: Agenda
Agenda 1. Transaction overview 2. Company snapshot 3. Market 4. Portfolio overview 5. Financials 6. Appendix 7. Risk factors | 21
Slide 22: Q2 2017 cash EBITDA grew 59% to a record-high of NOK 420m
Q2 2017 cash EBITDA grew 59% to a record-high of NOK 420m Financial summary Comments % NOKm Q3’17 Q2’17 Q2’16 Record-high portfolio acquisition change Net operating revenues 466 331 41% volume EBITDA 226 121 87% Operating profit (EBIT) 217 113 92% Profit margin 47% 34% - Continued strong gross colle
Slide 23: Record gross collection, +37% to NOK 650m
Record gross collection, +37% to NOK 650m – strong growth in SEE, NE and CE Bridge Q3’16-Q3’17: Gross cash collection on portfolios Comments NOK million +37% Strong gross cash collection, slightly above curves 650 10 33 Solid growth in NE (+63%), CE 50 (+40%) and SEE (+126%) 83 Expect continued stro
Slide 24: Continued focus on cost and economies of scale
Continued focus on cost and economies of scale – cost of collect trending down Operational costs split Total operational costs per quarter NOK million NOK million Personnel costs Non-recurring costs 119 Recurring costs 99 Personnel 93 86 94 costs higher due to stock 265 option program, currency 256
Slide 25: Q2 2017: Another record quarter in terms of EBIT and cash EBITDA
Q2 2017: Another record quarter in terms of EBIT and cash EBITDA EBIT Cash EBITDA NOK million NOK million Non-recurring items Non-recurring items As reported As reported 213 217 420 399 349 168 326 1 1 151 274 10 123 10 166 325 264 113 Q2’16 Q3’16 Q4’16 Q1’17 Q2’17 Q2’16 Q3’16 Q4’16 Q1’17 Q2’17 | 25
Slide 26: A diversified balance sheet structure, leverage profile to support controlled growth
A diversified balance sheet structure, leverage profile to support controlled growth Balance sheet per Q3 2017 (including new term loan) Prudent financial policy Long-term target equity ratio of 30% Additional liquidity 1,580 942 Undrawn term loan 638 Undrawn RCF - RCF covenant of 28% equity ratio C
Slide 27: Agenda
Agenda 1. Transaction overview 2. Company snapshot 3. Market 4. Portfolio overview 5. Financials 6. Appendix 7. Risk factors | 27
Slide 28: Q2 2017: Income statement
Q2 2017: Income statement Income statement Comments 2017 2016 2017 2016 2016 NOKm Continued strong gross Q2 Q2 H1 H1 audited Revenue from purchased loan portfolios 411 284 807 518 1,206 collection on portfolios: NOK Other operating revenues 55 47 105 93 190 18m above the curves Total operating reven
Slide 29: Q2 2017: Balance sheet
Q2 2017: Balance sheet Balance sheet Comments 2017 2016 2016 NOKm Increase in purchased loan Q2 Q2 audited Tangible and intangible assets 97 88 91 portfolios with 54% due to Goodwill 431 411 395 record-high portfolio acquisition Purchased loan portfolios 6,242 4,030 4,752 volume and currency effect
Slide 30: Q2 2017: Cash flow
Q2 2017: Cash flow Consolidated cash flow Comments 2017 2016 2017 2016 2016 NOKm Net cash flow from operating Q2 Q2 H1 H1 audited Profit for the period before tax 143 77 281 83 227 activities increases Amortisation/revaluation of purchased loan portfolios 193 143 372 323 664 Adjustment other non-cas
Slide 31: Segment financials Northern Europe (NE)
Segment financials Northern Europe (NE) Comments Purchased loan portfolios NOK million Record-high portfolio acquisition volume of NOK 687m (YTD NOK 848m) 687 Gross cash collection NOK 192m, in line with the curve (-NOK 2m revaluation of the curve) 273 227 164 122 Operating margin 42% - expect stron
Slide 32: Segment financials Poland
Segment financials Poland Comments Purchased loan portfolios NOK million Gross collection of NOK 227m, NOK 5m below the curve (- NOK 5m revaluation of the curve) 233 Improved operating margin - lower legal costs 83 Portfolio purchases NOK 83m (YTD NOK 139m) 58 37 17 Competitive market landscape cont
Slide 33: Segment financials Central Europe (CE)
Segment financials Central Europe (CE) Comments Purchased loan portfolios NOK million Gross collection of NOK 135m, NOK 24m above the curve 667 Good operating performance continues 386 314 Portfolio purchases NOK 314m (YTD NOK 378 mill) - Portfolio purchases in Italy NOK 201m (YTD NOK 221m) 66 6 Str
Slide 34: Segment financials: Southeast Europe (SEE)
Segment financials: Southeast Europe (SEE) Comments Purchased loan portfolios1) NOK million Gross cash collection NOK 51m, in line with the curve (+NOK 5 revaluation) 177 Joint venture portfolio (with EOS) performing above expectation 60 36 Strong operational performance – cost to collect percentage
Slide 35: 20 largest shareholders
20 largest shareholders # Shareholder No of shares Percentage 1 PRIORITET GROUP AB 51,118,519 13.85 % 2 RASMUSSENGRUPPEN AS 43,073,236 11.67 % 3 VALSET INVEST AS 24,000,000 6.50 % 4 STENSHAGEN INVEST AS 16,899,549 4.58 % 5 INDIGO INVEST AS 15,642,619 4.24 % 6 VERDIPAPIRFONDET DNB NORGE (IV) 9,982,64
Slide 36: The Board of Directors
The Board of Directors Jon Harald Nordbrekken Trygve Lauvdal Per Kristian Spone Former CEO of Intrum Justitia Norway Board member since 2013 Board member since 2012 Founded Aktiv Kapital in 1991, CEO Investment director at CFO of Indigo Invest AS, an until 1998, chairman from 1998 to RASMUSSENGRUPPE
Slide 37: Legal structure
Legal structure [Rating 1) Porto Cotlection (0) Realestate * share quota owned by Ultimo Holding S.a.r1 B2 HOLDING’
Slide 38: Agenda
Agenda 1. Transaction overview 2. Company snapshot 3. Market 4. Portfolio overview 5. Financials 6. Appendix 7. Risk factors | 38
Slide 39: Risk factors (1/3)
Risk factors (1/3) Investing in the Bonds involves inherent risks. Prospective investors should carefully consider, among other things, the risk factors for the Bond Issue before making an investment decision. The risk factors included below are some of the main risk factors for the Bond Issue. The
Slide 40: Risk factors (2/3)
Risk factors (2/3) There can be no assurances that the Group will continuously be able to identify and/or acquire sufficient volume of portfolios at appropriate prices, leading to disruptions in the Group's operations, loss of efficiency, low employee loyalty, fewer experienced employees and excess
Slide 41: Risk factors (3/3)
Risk factors (3/3) Change of control - the Company’s ability to redeem the Bonds with cash may be limited. Upon the occurrence of a change of control event, each individual bondholder shall have a right of prepayment of the Bonds as set out in the Bond Agreement. However, it is possible that the Iss
Slide 42: Stortingsgaten 22 | P.O. Box 1642 Vika | N-0119 Oslo www.b2holding.no | Tel: +47
Stortingsgaten 22 | P.O. Box 1642 Vika | N-0119 Oslo www.b2holding.no | Tel: +47 22 83 39 50 | E-mail: post@b2holding.no
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