Slide 1: Company presentation and effects of Covid-19
Company presentation and effects of Covid-19 Nordea Small Cap Days Johnny Tsolis, CEO
Slide 2: Agenda
Agenda 1 Axactor in brief 2 Q2 Highlights 3 Outlook 2
Slide 3: Axactor in brief
Axactor in brief • Established in Q4 2015 with headquarter in Oslo, Norway • Main focus on collection and acquisition of non-performing loans (“NPL”) from financial institutions • Management team with strong track record from purchased debt and debt collection industry HQ • Operations in six Europea
Slide 4: Our core business areas
Our core business areas Non-Performing Loans (NPL) Third-party collection (3PC) • Buy defaulted debt at discount to face value • Traditional debt collection on behalf of external • Price variations between markets, age and customers type of debt • Typically a fixed fee or a commission to Axactor on
Slide 5: Axactor positioned in the value chain from debtor default
Axactor positioned in the value chain from debtor default Outside Axactor scope Axactor focus area Account Credit Invoice Amicable Legal Surveillance Factoring receivable information admin. collection collection and recovery management • Collecting and • Ledger • Purchase of • Follow-up of • Traditi
Slide 6: We are one of the fastest growing companies at Oslo Stock Exchange
We are one of the fastest growing companies at Oslo Stock Exchange Total revenue per segment (EUR million) Covid-19 effect, incl. NPL revaluation 285 CAGR +97% • Focus on financial institutions, both in NPL and 3PC 223 207 134 • Targeting combined 3PC and forward flow deals 85 110 • Product synergie
Slide 7: We have been able to establish a significant revenue stream in all our markets
We have been able to establish a significant revenue stream in all our markets Total revenue per country LTM • Targeting sound markets for owning and 6% collecting on non-performing loans 14% • Increased the Nordic exposure through 2019 6% and 2020 • Synergies to be extracted from cross-border 14% d
Slide 8: Where are we on our journey? - Just about to enter phase II with focus on ROE-growth
Where are we on our journey? - Just about to enter phase II with focus on ROE-growth Phase I Today Phase II Phase III Year 2016-2020 2021-2024 2025→ Key focus “Grow revenue & scale” “Grow ROE” “Grow presence” Key activities ▪ Aggressive growth ▪ Controlled growth ▪ Annual dividend payments ▪ Market
Slide 9: Covid-19 effect on Axactor ROE drivers
Covid-19 effect on Axactor ROE drivers Drivers Q2 2020 Covid-19 impact Outlook • Portfolios acquired at attractive Positive • Improved IRR levels to be blended • NPL portfolio prices IRRs in the Nordic market in over time • EBITDA margin significantly affected Neutral • Volume growth through 2020 an
Slide 10: Agenda
Agenda 1 Axactor in brief 2 Q2 Highlights 3 Outlook 10
Slide 11: Lockdowns and impairments significantly affected first half 2020 financials
Lockdowns and impairments significantly affected first half 2020 financials Total revenue development EBITDA and EBITDA-margin Cash EBITDA (EUR million) (EUR million and %) (EUR million) 60 55 90% 50 45 67 40 41%** 65 36% 35 75 29% 30% 31% 32% 59 60 74 25% 30 40% 72 20% 21% 68 25 26 64 20 22 24 23**
Slide 12: April and May significantly impacted by Covid-19, strong pick-up in June expected to continue
April and May significantly impacted by Covid-19, strong pick-up in June expected to continue Gross revenue (EUR million) 27.4 26.5 26.0 26.6 2.7 4.4 3.5 3.7 22.5 20.9 3.0 6.7 0.9 6.6 7.4 7.1 4.2 4.6 18.1 15.6 15.1 15.9 15.8 14.9 Jan Feb Mar Apr May Jun All markets Spain excl. REO Spain REO 12
Slide 13: Prudent revaluation and impairment of EUR 53m following Covid-19
Prudent revaluation and impairment of EUR 53m following Covid-19 NPL book value REO book value (EUR million) (EUR million) 1,134 27 1,107 -2.4% 115 • Net negative revaluation of 26 -22.7% EUR 27m of NPL portfolio 89 • Based on estimated short-term financial impact of Covid-19 • Estimated impairment
Slide 14: Axactor has aligned costs with market activity throughout the crisis
Axactor has aligned costs with market activity throughout the crisis Actions to align • Temporary workforce reductions of ~400 employees during Q2 costs to activity • Executive team salary reductions in Q2 extended through Q3 level • Temporary price reductions from IT vendors Site consolidation • No
Slide 15: Agenda
Agenda 1 Axactor in brief 2 Q2 Highlights 3 Outlook 15
Slide 16: Covid-19 long term effects for the collection industry
Covid-19 long term effects for the collection industry 1 Portfolio prices – a supply overhang of NPLs cause pressure on portfolio prices 2 Increased 3PC volumes – capital constraints and lower prices increase focus on 3PC servicing 3 Industry consolidation – expected to increase medium to long term
Slide 17: Why invest in the debt collection industry?
Why invest in the debt collection industry? ▪ From 10% IRR or below in 2017/early 2018 to 12-14% IRR in all Axactor markets The prices on NPL portfolios has come 1 ▪ Significant imbalance in demand and supply of unsecured NPLs (will also increase 3PC down significantly since 2017 volumes) ▪ Regulato
Slide 18: Axactor with six key competitive advantages
Axactor with six key competitive advantages - The combination makes Axactor unique Axactor competitive advantages… ▪ Strong focus on becoming best in Europe on unsecured consumer finance 1 Strong niche focus ▪ Not trying to be best on “everything” ▪ All six markets carefully chosen with regards to s
Slide 19: Why invest in Axactor?
Why invest in Axactor? Our competitive advantages will unlock company value going forward Axactor competitive advantages… …enables us to excel on key stock value drivers… …to create superior share holder value 1 Strong niche focus Buy high quality portfolios at A 2 Most attractive markets attractive
Slide 20: Questions?
Questions? AXACTOR