Slide 1: Q2 2018 Axactor AB
Q2 2018 Axactor AB July 25, 2018
Slide 2: Key highlights Q2 2018
Key highlights Q2 2018 GROSS REVENUE ERC EBITDA CASH EBITDA CASH BALANCE 66.7 EUR MILLION 979 EUR MILLION 10.6 EUR MILLION 40.6 EUR MILLION 121.0 EUR MILLION +148% y/y +92% y/y +158% y/y* +423% y/y* • Continued margin expansion – EBITDA margin of 20% in Q2 2018 • Cash EBITDA of EUR 41m, illustrating
Slide 3: Axactor events post Q2 closing
Axactor events post Q2 closing • New funding line for REOs with Nomura International plc • Will release approximately EUR 100m in cash • Lowering funding cost for REOs significantly • Subject to final documentation. Signing/closing within 3 weeks • Signed important forward flow contract in Germany •
Slide 4: Axactor will establish new credit line for funding of REOs
Axactor will establish new credit line for funding of REOs • Axactor will establish a new funding line for REOs with Nomura International plc • The transaction will release cash of approximately EUR 100m and will be used to pay down intercompany loan to Axactor AB • The released funds will be availa
Slide 5: Standardization is used to reduce costs and to drive efficiency
Standardization is used to reduce costs and to drive efficiency Standardization - “One Axactor” Positive effects from “One Axactor” • Intility (IT Infrastructure) • Miratech partnership (AD/AM) IT & SG&A share of cost will continue to 1 • ERP/Finance/HR decrease year over year • Portfolio pricing •
Slide 6: Axactor revenue mix – distribution per country
Axactor revenue mix – distribution per country Gross revenue per quarter (EUR million) Q2 Revenue Distribution per Country 70 66.7 ITA 60 5% SWE GER 6% 8% NOR 50 5% 41.0 40 34.5 30 24.9* Q2 23.6 19.7 66.7m 20 10 SPA 0 76 % -10 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 ITA NOR SWE GER SPA • Significant gro
Slide 7: Axactor revenue mix – distribution per business segment
Axactor revenue mix – distribution per business segment Gross revenue development per segment (EUR million) 70 66.7 • 148% revenue growth y/y* in Q2 2018 primarily driven by 60 REO and NPL portfolios 50 • Ramp-up of the REO segment continues, and REOs 41.0 40 34.5 represented 33% of total gross reve
Slide 8: Profitability development – EBITDA and Cash EBITDA
Profitability development – EBITDA and Cash EBITDA EBITDA per quarter (EUR million) Cash EBITDA per quarter (EUR million) 11 10.6 10 45 40.6 9 40 8 35 7 30 6.1 6 5.6 25 5 * 4.1 20 18.1 4 15 13.5 3 2.0 10 7.8 * 2 6.2 1.0 3.6 1 5 0 0 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2
Slide 9: EBITDA and cash EBITDA - quarter by quarter
EBITDA and cash EBITDA - quarter by quarter EBITDA (EUR million) Cash EBITDA (EUR million) +158% +423% 12 45 10.6 40.6 10 40 35 8 30 6 25 4.1 * 4 20 2 15 10 7.8 * 0 5 -2 0 -4 -3.4 -5 -2.1 Q2-16 Q2-17 Q2-18 Q2-16 Q2-17 Q2-18 • Continued significant growth • Maintained strong cash flow development • I
Slide 10: Gross revenue and ERC - quarter by quarter
Gross revenue and ERC - quarter by quarter Gross revenue (EUR million) ERC (EUR million) +168% +92% 70 67 1 000 979 REOs NPLs 900 60 250 800 50 700 40 600 511 500 18 30 25 * 400 729 20 300 493 200 126 10 8 100 0 0 Q2-16 Q2-17 Q2-18 Q2-16 Q2-17 Q2-18 • The good development continues in Q2-18 with 168
Slide 11: Collection on portfolios versus business case
Collection on portfolios versus business case LTM Performace vs. Business Case 1,7 • NPL collection performance stabilizing at 152% 143% ~100%, with a strong LTM performance of 1,5 105% in Q2-18 1,3 117% 1,1 • High REO performance in Q4 2017 based 103% 105% on moderate volume 0,9 100% 101% 92% 91% 9
Slide 12: Portfolio statistics NPL
Portfolio statistics NPL Historical development ERC (EUR million) ERC per year (EUR million) 800 120 113 109 726.2 729.0 700 633.0 100 600 86 492.6 506.9 80 500 427.1 64 400 60 55 48 300 42 38 40 34 30 27 200 24 22 20 17 20 100 0 0 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y
Slide 13: Portfolio statistics NPL
Portfolio statistics NPL Book value portfolios (EUR million) Capex (EUR million) 400 90 87.0 354.0 358.5 350 80 317.1 70 66.5 300 60 250 233.4 237.9 50 46.2 46.8 200 191.9 40 150 30 100 20 17.5 50 10 6.6 0 0 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 -10 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 NOR GER ITA SWE
Slide 14: Portfolio statistics REOs
Portfolio statistics REOs Historical development ERC (EUR million) ERC per year (EUR million) 300 140 274.3 249.7 120 250 120 110 225.3 100 200 80 150 60 100 40 50 18 20 18.2 18.9 2 0 0 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 Y12 Y13 Y14 Y15 SPA SPA • First REO portfol
Slide 15: Portfolio statistics REOs
Portfolio statistics REOs Book value portfolios (EUR million) Capex (EUR million) 200 192.7 150 147.0 180.5 154.1 150 100 100 50 44.7 50 8.1 8.4 8.1 5.2 0.4 0 0 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 SPA SPA • REO portfolios account for 33% of total portfolio balance
Slide 16: REO portfolios lifetime KPIs
REO portfolios lifetime KPIs* Actual Business case • Lifetime performance ahead of business case • More than 1.000 units sold • Quicker liquidation 47.7 1 043 • Higher money multiple 823 33.5 • Total of 6 portfolios serviced by two different providers: GIA and Altamira • New funding line for REOs an
Slide 17: Opex profile REOs
Opex profile REOs • REO opex consist of three main elements: • Sales commission paid to servicer • Servicing fee (maintenance, marketing etc.) • Cost of sale – reversal of book value upon sale (no cash impact) • Sales commission generally fixed percentage of sales *Excluding cost of sales • Servicin
Slide 18: Q2 income statement
Q2 income statement Income statement Key comments 2Q 2Q LTM 2Q Jan - Dec EURO thousand 2018 2017 2018 2017 • Net financial items were negative EUR 8.5m for the Income 66,696 26,922 165,813 104,734 quarter: Amortization of debt portfolios -12,310 -3,290 -26,901 -14,948 Net revenue 54,386 23,632 138,9
Slide 19: Balance sheet structure
Balance sheet structure Assets Equity & Liabilities 760 760 Cash Other • Portfolio book value is EUR 39 Intangibles 121 IBD 539m, including REO Other Equity 622 622 Portfolios 80 32 • Available cash at end of Q2 is 50 EUR 121m 76 19 407 25 • Equity ratio of 41% 299 355 355 21 35 74 539 18 128 471 29
Slide 20: Legal organization July 2018
Legal organization July 2018 Link between Luxco Invest I and Reolux has been broken - Axactor AB Both companies are now (Sweden) stand-alone SPVs owned 50% 50/50 by Axactor and Geveran Axactor Incentive AB Luxco Invest 1 S.à r.l. (Sweden) (Luxembourg) 50% Axactor Platform Holding AB Axactor AS Axact
Slide 21: Forward flow build-up
Forward flow build-up 15 14 14 15 15 15 • Significant forward flow contracts have been signed during the first half of 2018 in Germany, Actual FF investments Italy, Norway and Sweden Estimated FF investments • Some of the new contracts started late in Q2, while the rest are due to start later in the
Slide 22: Axactor funding capacity
Axactor funding capacity 250 450 • Axactor with approximately 450 mEUR in funding capacity (after closing the Nomura agreement) • Additional capacity 250 • Axactor has close to 200 mEUR in accordion options with the Nordic banks • Bond tap option of 100 mEUR 200 • Full utilization of additional capa
Slide 23: Outlook
Outlook • REO market in Spain remains strong • Rapid growth in Spanish market for secured NPL • Continued high volumes of unsecured NPL forward flow portfolios from Nordic consumer banks • Solid 3PC pipeline in Spain • Expect high cash flow generation to continue in the second half of 2018 23
Slide 24: Summary Q2 presentation
Summary Q2 presentation • Significant ramp-up of cash generation (Cash EBITDA of EUR 41m) • 20% EBITDA margin in Q2 • Signed significant forward flow portfolios in Germany, Italy, Norway and Sweden • Establishing new funding line for REO portfolios with Nomura, releasing approximately EUR 100m in ca
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