Axactor Asa · OSL:ACR
Axactor Asa — Q1 2022 Earnings Presentation
29 slides from Axactor Asa's earnings presentation, Apr 28, 2022
Slide 1: Q1 2022
AXACTOR Q1 2022 28 April 2022
Slide 2: Q1 highlights, Financial update, Outlook, Q&A
Q1 highlights Financial update Outlook Q&A
Slide 3: Financial highlights for the quarter
Financial highlights for the quarter Collection performance back to 100% NPL investments of EUR 80m • Investments and committed investments already ~50% above replacement capex in 2022 Cash EBITDA growth of 10% y-o-y Annualized return on equity of 8% 3 Comment: Stated numbers are for continuing oper
Slide 4: Q1 puts Axactor back to growth
Q1 puts Axactor back to growth - Last 6 quarters used to stabilize operations after rapid growth NPL ERC and company acquisitions (EUR million) 2,259 2,153 2,160 2,169 2,159 2,119 2,130 2,141 2,038 2,052 1,877 1,721 1,473 1,388 821 726 729 633 493 507 427 253 317 126 0 61 Q4-15 Q1-16 Q2-16 Q3-16 Q4-
Slide 5: We have a solid foundation to accelerate going forward
We have a solid foundation to accelerate going forward Winning 78% of all 3PC benchmarks High debtor satisfaction Industry leading on NPL cost-to-collect1 score of 4.6 (5 is best) High customer satisfaction Ranked as top 5% globally on ESG by score of 8.5 (10 is best) Sustainalytics High employee sa
Slide 6: Collection performance is back at 100%
Collection performance is back at 100% Actual collection vs. active forecast1 120% • Q1 collection performance of 100% • Supported by revaluation in Q4 100% 101% 100% and increased cash collection 98% 99% 100% 95% • LTM collection performance of 95% 91% 89% 88% • Long term average performance 80% ex
Slide 7: NPL investments increasing for the third consecutive quarter
NPL investments increasing for the third consecutive quarter NPL investments (EUR million) 90 80 • NPL investment market back to pre-pandemic 62 levels 54 • NPL investments increasing for the third consecutive quarter 35 32 22 • Expect NPL investments of EUR 200 – 250m in 16 2022, well above the est
Slide 8: NPL investments and committed investments in 2022 already exceeding replacement capex by ~50%
NPL investments and committed investments in 2022 already exceeding replacement capex by ~50% NPL investments in 2022 (EUR million) 250 50 NPL investments of EUR 158m signed for 2022 +46% +92 • Q1 investment of EUR 80m 158 • Furthermore, EUR 78m signed in forward flow contracts 108 • Already exceedi
Slide 9: NPL gross IRR on total book steadily increasing
NPL gross IRR on total book steadily increasing - Current market prices significantly more favorable compared to the total book Gross IRR on total NPL book1… …and per vintage2 23.4% 24% • The single most important profit 22% improvement initiative 20.9% Medium term average expected to • 1%-point cha
Slide 10: Q1 highlights, Financial update, Outlook, Q&A
Q1 highlights Financial update Outlook Q&A
Slide 11: Positive development on gross revenue compared to last year
Positive development on gross revenue compared to last year Gross revenue (EUR million) +11% +3% 80 82 75 78 77 73 13 68 14 70 64 12 14 13 11 11 13 10 • Gross revenue is up 3% y-o-y 69 54 54 62 66 63 59 63 64 • Gross revenue growth on both the NPL and the 3PC segment with y-o-y growth of 1% and 14%
Slide 12: NPL Total income growth of 9% with stable margins
NPL Total income growth of 9% with stable margins NPL Total income and CM% (EUR million, and %) NPL Total income CM % +9% +29% Total income growth drivers 43 41 39 40 • Gross revenue growth of 1% 31 29 • Collection performance of 100% 28 736% • Reduced amortization rate following the 78% 77% 79% 77%
Slide 13: 3PC Total income growth of 14% compared to last year
3PC Total income growth of 14% compared to last year 3PC Total income and CM% (EUR million and %) +14% -14% 14 13 14 13 13 11 12 11 • Total income growth of 14% y-o-y driven by the 10 acquisition of C.R. Service 47% 44% 40% 37% 36% 34% • Marginal organic growth on 3PC 30% 20% • Improved margins stem
Slide 14: Total income and Cash EBITDA growth of 10% compared to last year
Total income and Cash EBITDA growth of 10% compared to last year Total income EBITDA and EBITDA-margin Cash EBITDA (EUR million) (EUR million and %) (EUR million) +10% +16% 52% 39% 47% 48% 56 33% +10% 52 53 34% 32% +12% 51 54 44 51 42 -13% 48 48 48 39 44 44 27 27 39 39 25 20 15 14 13 22 13 -3 -132%
Slide 15: Q1 – a first step in the right direction on profitability
Q1 – a first step in the right direction on profitability Return on equity to shareholders (%) 8% Continuing operations 6% 7% ROE to shareholders 1% 2% -6% -6% -9% 2016 2017 2018 2019 2020 2021 Q1 ’22 15
Slide 16: Axactor has a robust balance sheet positioned for growth
Axactor has a robust balance sheet positioned for growth Equity • Satisfying equity ratio of 29% Liquidity • Available cash of EUR 35m • Unused funding line of EUR ~150m on the revolving credit facility Covenant headroom • Satisfying headroom to bond covenants • Loan to value of 72% vs. the covenant
Slide 17: Q1 highlights, Financial update, Outlook, Q&A
Q1 highlights Financial update Outlook Q&A
Slide 18: Outlook
Outlook European consumer consumption is returning as restrictions related to the pandemic are lifted • Expect a gradual increase in formation of new NPL’s which in turn will increase the 3PC and the NPL-market Increasing geopolitical risk in Europe with the ongoing conflict in Ukraine with marginal
Slide 19: Several new initiatives in place to make us more available and transparent
Several new initiatives in place to make us more available and transparent Join the Investorweb webinar live • Presenter: CEO Johnny Tsolis on Monday 2 May at 7pm (CET) • Q&A session: Analyst Tiril Støle (SpareBank1 Markets) as moderator • Do you have a question? Please send it to ir@axactor.com • L
Slide 20: Q1 highlights, Financial update, Outlook, Q&A
Q1 highlights Financial update Outlook Q&A
Slide 21: Supporting information
Supporting information
Slide 22: NPL investment commitments of EUR 102m next 12 months
NPL investment commitments of EUR 102m next 12 months Quarterly NPL investments (EUR million) 90 80 62 54 Additional forward flow agreements and 35 one-off acquisitions 32 expected to further 27 25 27 24 22 increase NPL 16 investments 12 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3
Slide 23: ERC increasing by 5% y-o-y driven by increased NPL investments
ERC increasing by 5% y-o-y driven by increased NPL investments for the quarter ERC development Forward ERC profile by year (EUR million) (EUR million) +5% 2,259 291 2,153 2,160 2,169 2,159 2,119 2,130 2,141 279 2,052 247 216 188 164 147 132 119 107 97 87 72 61 52 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21
Slide 24: 3PC volumes by geographic region
3PC volumes by geographic region 3PC Total income split by geographic region 1% 4% 15% Q1’22 • Spain accounting for 52% of total income on 3PC Total income 15% EUR 13.2m 52% • Italy share of Total income increased to 15% following the acquisition of C.R. Service 13% FIN DEU ITA NOR ESP SWE 24
Slide 25: Discontinued operations: REO
Discontinued operations: REO REO Total income and net profit1 REO book value REO number of units (EUR million and %) (EUR million) Total Income Net profit 13 120 3,740 12 3,489 12 10 10 3,076 9 89 8 84 2,694 7 6 79 2,391 68 2,039 55 1,773 46 1,446 1,204 29 2 2 23 -3 -3 -4 -3 -2 -10 -29 Q1 Q2 Q3 Q4 Q
Slide 26: Bond covenants (1/2)
Bond covenants (1/2) - Compliant with all covenants Loan-to-value1 - Covenant ≤75% Secured Loan-to-value1- Covenant ≤65% (Total portfolio book value divided by net interest-bearing debt) (Total portfolio book value divided by secured net interest-bearing debt) 75% 75% 74% 75% 65% 72% 72% 58% 58% 71%
Slide 27: Bond covenants (2/2)
Bond covenants (2/2) - Compliant with all covenants Leverage ratio1 - Covenant ≤4.0x Interest coverage ratio1- Covenant ≥4.0x (Net interest-bearing debt divided by LTM Pro-forma adjusted EBITDA (Pro-forma adjusted cash EBITDA divided by net interest expenses) 4.0 4.0 3.9 5.8 3.7 5.4 3.6 5.2 5.2 5.2
Slide 28: 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 B2C Business to Consumer BoD Board of Directors Terms BS Consolidated Statement of Financial Position (Balance
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