Axactor Asa · OSL:ACR
Axactor Asa — Investor Presentation (October 2016)
33 slides from Axactor Asa's investor presentation, October 2016
Slide 1: Investor presentation October 2016
Investor presentation October, 2016
Slide 2: The Altor acquisition
The Altor acquisition AXACTOR
Slide 3: Altor transaction details
Altor transaction details Key transaction details • Deal value of EUR 34.1m on an enterprise value basis with equity valued at of ~EUR 17.7m – The acquisition (on an enterprise value basis) will be financed through ~EUR 17.1m debt financing from the DNB and Nordea facility, remaining amount will be
Slide 4: Altor in brief
Altor in brief Overview Key financials (EURm) – German GAAP2 • A leading independent debt purchase/debt collection company in Revenue EBITDA EBITDA margin (%) Germany with EUR 2.1bn under management • Altor had gross collections of more than EUR 10m in 2015 15% 19% 18% • In 2016, the company acquire
Slide 5: Altor fulfills Axactor's strategy for market entry
Altor fulfills Axactor’s strategy for market entry • Traditionally a strong NPL market, with large volumes for sale Highly attractive • Highly attractive portfolios with stable cash flow German market • We expect increased momentum in the German NPL the next 12-24 months Strong business with pro
Slide 6: This is Axactor
This is Axactor AXACTOR
Slide 7: This is Axactor
This is Axactor Axactor in brief Pan-European growth strategy • Established in Q4 2015 as an ambitious and fast-growing debt Established collection platform collection and debt purchase company1) • Main focus on collection and acquisition of non-performing loans (“NPL”) from financial institutions O
Slide 8: Axactor 2016 milestones - to date
Axactor 2016 milestones - to date 2016 Q1 Q2 Q3 Platform New collection center opened in Valladolid Ikas acquisition closed New 3PC contract with the largest electrical Altor acquisition Acquisitions 3PC (third party (NOK 300m) Geslico company in Spain CS Union acquisition announced (and 3PC collect
Slide 9: Overall strategic direction remains unchanged
Overall strategic direction remains unchanged Focus on established markets with strong growth Axactor entry strategy Cover all major parts of the value chain Focus mainly on Financial Institutions market Co-investment with Master Servicing Typical collection profile FI claims Typical collection prof
Slide 10: Axactor short-term priorities
Axactor short-term priorities 1 Continue acquisition of attractive portfolios in all four countries 2 Secure new 3PC clients in all markets, including bank carve-outs Operational focus – standardize IT platform, implement group dialer in 3 all countries, align KPIs across countries and cross-country
Slide 11: Company priorities next 3-6 months
Company priorities next 3-6 months Axactor Operational efficiency New model – standardized Digital focus Debtor portal priorities operational dialer excellence Group IT Data warehouse Reporting/ infrastructure for portfolios, Group HR CRM system systems and new ERP portfolio and system system ERC re
Slide 12: Axactor key investment attractions
Axactor key investment attractions • Large European NPL stocks on banks’ balance sheets Attractive fundamentals within • Double-digit growth in NPL sales volume in Europe driven by regulatory changes (Basel III, IFRS 1 NPL purchase market etc.) • Strong growth trend in second-hand portfolio sales •
Slide 13: Key market dynamics
Key market dynamics AXACTOR
Slide 14: Key market dynamics in Spain
Key market dynamics in Spain Portfolio [ ] dynamics Key highlights / trends AXA key focus • Funds shifting focus more towards secured assets • Firsthand portfolios, sold directly form the IRR: 10% - 11% largest banks • However, still strong competition on large, Size: EUR 30m+ • Tender offers with
Slide 15: Key market dynamics in Italy
Key market dynamics in Italy Portfolio dynamics Key highlights / trends AXA key focus • The international funds have clear focus on secured debt due to higher ticket/investments • Firsthand portfolios, sold directly form the largest banks IRR: 10% - 13% Size: EUR 30m+ • Tender offers with several bi
Slide 16: Key market dynamics in Germany
Key market dynamics in Germany Portfolio dynamics Key highlights / trends AXA key focus • All the largest industrial players are represented in Germany, creating tough competition for large FI portfolios • Firsthand portfolios, sold directly form the largest banks IRR: 10% - 11% Size: EUR 30m+ • T
Slide 17: Key market dynamics in Norway
Key market dynamics in Norway Portfolio dynamics Key highlights / trends AXA key focus • We have seen some large transactions the last 12 months at high prices and single digit IRR • Firsthand portfolios, sold directly form the largest banks IRR: 10% - 11% Size: EUR 30m+ • Tender offers with several
Slide 18: Financial considerations
Financial considerations 18
Slide 19: Axactor financial targets
Axactor financial targets Target To date Medium-to-long term target 1 Axactor Portfolio investment sizes Portfolio investment sizes Portfolio investments of ~EUR 1-15 million of ~EUR 1-25 million size (EURm) Portfolio investment sizes Co-investments n.a. of ~EUR 25-100 million 2 Portfolio MoC (“Mult
Slide 20: Axactor purchased debt portfolio overview
Kosmetisk endring – siste Axactor purchased debt portfolio overview bullet Axactor debt portfolio Comments Altor (final numbers to be concluded) • Book Value (BV) includes portfolios in Spain and CS Union at the time of acquisition Total: 2.8x • Combined face value of portfolios in Spain and Italy i
Slide 21: Financing – gearing to increase investment capacity
Financing – gearing to increase investment capacity… Spain illustrative example (EURm) Considerations • Gearing will increase gradually as the portfolio becomes more diversified • 50% gearing targeted by Q2 2017, and 65% by year-end 2017 on Incremental investment capacity of portfolio level EUR 35m
Slide 22: … and be a direct value contributor
… and be a direct value contributor Cash collection from portfolios acquired by increased gearing amplified by portfolio money multiple… … feeding directly into the company’s profitability Portfolio money multiple (x) Note: Normally 1-4 months from portfolio acquisition to Axactor starts collecting
Slide 23: Funding considerations
Funding considerations Approx. EUR 20m cash available post Q3 2016 + available gearing Funding opportunities: Italy outside ring fence – own funding Increase gearing towards 50% gearing targeted by Q2 2017, and 65% by year- end 2017 on portfolio level Bank carve-outs – 3PC (seller’s credit)
Slide 24: Key financials Q1- and Q2-16
Key financials Q1- and Q2-16 Income statement Key comments SEK thousand Q2-16 Q1-16 H1-16 2015 Gross revenue 72 270 29 404 101 674 4 437 • ALD Abogados included in Q1-16 financials Amortization of debt portfolios -7 833 -1 492 -9 325 0 Net revenue 64 437 27 912 92 349 4 437 • Full quarter effect of
Slide 25: Appendix
Appendix AXACTOR
Slide 26: > € 1trillion Non-Performing Loan (NPL) FI market in Europe
> € 1trillion Non-Performing Loan (NPL) FI market in Europe B2C Unsecured B2C Unsecured 10% B2B Corporate B2B Credit card debt, private leasing, Corporate Corporate loans / bank term debt residual mortgages, consumer loans 30% ~EUR ~EUR 100bn 300bn B2C Secured 35% B2C Secured B2B SME B2B SME 25% Mor
Slide 27: Key trends in the debt purchase/debt collection industry
Key trends in the debt purchase/debt collection industry 1 • Strong growth in second-hand portfolio transactions Unsecured B2C NPL transactions (face value) EURbn Strong growth of NPL • Regulatory changes driving debt sales 30 portfolios coming to market • Strengthened FI balance sheets enable portf
Slide 28: Axactor entry strategy
Axactor entry strategy Established collection platform 1 Acquire high-quality debt collection company in each priority market Opportunistic view on the Nordics. Other geographies under 2 Grow through NPL portfolio acquisitions evaluation. 3 Carve-out of collection platforms from financial institutio
Slide 29: Axactor will cover all major parts of the value chain
Axactor will cover all major parts of the value chain Outside Axactor scope Focus area Portfolio acquisitions Credit information Invoice Factoring Amicable collection Legal collection Surveillance and recovery • Fresh claims • Legal action taken when • Unrecoverable claims move to claims can not be
Slide 30: Axactor focus on established markets with strong growth
Axactor focus on established markets with strong growth The development curve of debt collection/debt purchase markets Early phase Growth phase Mature phase Axactor – established collection platform • Axactor’s initial focus is Spain, Germany and Italy – Developed markets with strong growth – Strong
Slide 31: Axactor value drivers: debt purchase and debt collection
Axactor value drivers: debt purchase and debt collection Debt purchase 3rd party debt collection Portfolio purchase Portfolio cash flow (collection) • Strong value proposition in Europe many customers require cross-border 3rd party collection Portfolio – Axactor has strong execution capabilities a
Slide 32: Q2 balance sheet
Q2 balance sheet Assets Equity and liabilities SEK thousand 31.06.2016 31.03.2016 31.06.2015 SEK thousand 31.06.2016 31.03.2016 31.06.2015 ASSETS EQUITY & LIABILITIES Intangible non-current assets Equity attributable to equity holders of the parent Intangible assets 118 044 43 718 31 742 Share capit
Slide 33: axactor.com
axactor.com