B2 Impact ASA · OSL:B2I
B2 Impact ASA — B2Holding — Q4 2020 Earnings Presentation
31 slides from B2 Impact ASA's earnings presentation, February 2021
Slide 1: Fourth quarter 2020
Fourth quarter 2020 + B2HOLDING*
Slide 2: Highlights Q4 2020
Highlights Q4 2020 Operations Steady business operations in Q4 with resilience in key markets Positive cash generation after portfolio investments and interest coverage Reorganisation of Secured business starting to yield results Effectiveness & Unsecured collections were above expectations
Slide 3: Key figures Q4 2020
Key figures Q4 2020 NOKm Total revenues Gross Collections1) Cash EBITDA2) 852 1,315 905 (819) (1,370) (940) Net profit Portfolio purchases Leverage ratio 123 437 3.04x (90) (566) (2.91x) Comparable numbers for Q4 2019 in brackets. 1) Includes the Group’s share of gross collection for portfolios purc
Slide 4: Business update
Business update \ B2HOLDING’
Slide 5: Ending the year with close to normal activity in most markets
Ending the year with close to normal activity in most markets Low impact Medium impact High impact Both unsecured collections and secured recoveries above latest forecast - Pandemic impact most visible in markets where the lock down affected the bailiff and legal system Stricter pandemic measure
Slide 6: Successful transformation of Secured Asset Management
Successful transformation of Secured Asset Management Beginning of new era Transformation Period Way forward 2H 2019 1H 2020 1H / 2H 2020 2021 New Management Structure Change Mentality Match new expectations with Building a strong Competence Introduce the new current ERC profile with focus on Deep d
Slide 7: REO Assets Under Management showing positive development
REO Assets Under Management showing positive development Increased pace in the fourth quarter, satisfactory quality of disposals and proven resilience amidst Covid-19 REO Assets Under Management have grown significantly in the last 12 months, mainly driven by the repossession of key assets – REO s
Slide 8: Core priorities going forward
Core priorities going forward • Utilising economies of scale in key markets expected to improve margins for future investments Operations • Continued focus on business transformation towards higher degree of automation in collection and big data analytics • Expected improved market conditions with l
Slide 9: Financial performance
Financial performance B2HOLDING’
Slide 10: Fourth quarter 2020 summary
Fourth quarter 2020 summary Financial summary NOKm 2020 2019 % 2020 2019 % Q4 Q4 Change Full year Full year Change Total revenues 852 819 4% 3,174 2,874 10 % Operating profit (EBIT) 355 291 22 % 1,224 959 28 % Stable and resilient collections - Unsecured collections at 101% of Profit after tax 123
Slide 11: Cash earnings utilized to reduce leverage and secure investment capacity
Cash earnings utilized to reduce leverage and secure investment capacity Cash flow Q4 2020 Additional investment capacity 662 491 473 438 437 253 264 204 113 Investments 83 Cash earnings Q4’19 Q1’20 Q2’20 Q3’20 Q4’20 Deleveraging 3.4x 3.2x 3.2x 3.0x 2.9x 3.3x 3.1x 2.9x 2.9x 2.7x Lev.ratio Lev.ratio
Slide 12: Operating expenses reduced in accordance with cost saving targets
Operating expenses reduced in accordance with cost saving targets Cost savings fourth quarter, FX adjusted NOKm 509 9 6 In line with cost saving programme launched in Q1 19 6 Cost savings of NOK 47 million (10 %) delivered in Q4 compared to Q1 22 (excludes Depreciation, Amortisation & Impairment
Slide 13: Portfolio Investments and Estimated Remaining Collections
Portfolio Investments and Estimated Remaining Collections Portfolio investments in Q4 Committed Forward Flow contracts, Q3’20 – Q2’21 NOKm Geographical distribution Asset class distribution 120 CE SEE Unsecured Forward Flow Actual H2’20 WE 110 0% 3% 47% 103 98 10% 100 97 90 NOK NOK 437m 34% Secured
Slide 14: Capital structure
Capital structure Funding Outstanding bonds Unutilised RCF Treasury bonds Utilised bridge facility Debt maturity profile Utilised RCF Unutilised bridge facility Public rating (Corporate Family Rating/Bond Issue rating) EUR millions - S&P: B+/B+ I+3.25- - Moody’s: Ba3/B1 E+7.00% I+4.50% E+4.25% E+4.7
Slide 15: Summary
Summary \ B2HOLDING’
Slide 16: Summary
Summary Unsecured collections and secured recoveries above latest forecast Flexible work arrangements ensuring stable operations through second wave Cash earnings enables further reduced leverage and secures additional investment capacity NPL market outlook remains positive | 16
Slide 17: Q&A
Q&A
Slide 18: Quarterly financial performance
Quarterly financial performance Total revenues Cash EBITDA EBITDA NOKm NOKm Cash EBITDA Cash margin EBITDA EBITDA margin NOKm 47% 69% 69% 45% 67% 67% 65% 42% 39% 36% 398 387 819 845 852 775 344 702 940 927 932 905 881 281 272 Q4’19 Q1’20 Q2’20 Q3’20 Q4’20 Q4’19 Q1’20 Q2’20 Q3’20 Q4’20 Q4’19 Q1’20 Q2
Slide 19: Quarterly financial performance
Quarterly financial performance NOKm 2019 2019 2019 2019 2020 2020 2020 2020 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Total revenues 795 379 880 819 775 702 845 852 Operating profit 350 -69 387 291 255 245 369 355 Profit after tax 106 -270 181 90 24 34 128 123 Cash revenue 1,354 1,401 1,492 1,396 1,364 1,343 1,348 1
Slide 20: ERC development
ERC development Geographical distribution Development in total gross ERC1) Forward 120m ERC profile by year1) SEE NOKm NOKm Poland 14% 16% 26,528 6,008 25,298 WE 12% 24,708 24,616 23,809 Pol 23,100 5,234 22,262 22,595 CE NE 21,434 19% 20,608 40% 20,119 18,116 NE Asset class distribution 15,264 3,007
Slide 21: Portfolio diversification
Portfolio diversification UNSECURED Year Total 1 2 3 4 5 6 7 8 9 10 120m ERC ERC Pol 888 683 483 360 273 206 151 111 83 63 3,302 3,463 NE 1,594 1,354 1,124 938 778 639 528 437 359 294 8,043 9,123 CE 323 285 240 186 144 111 71 34 19 12 1,424 1,430 WE 235 202 165 122 98 75 58 37 16 2 1,010 1,011 SEE 5
Slide 22: Capital structure covenants
Capital structure Covenants RCF covenants Well in line with all original covenants1) Equity Ratio 2) Total Loan to Value 3) Expect to increase headroom going forward Temporary Temporary covenant covenant 26.8% 27.7% 77.5% 74.2% 74.7% 25.2% 25.1% 25.7% 73.7% 72.1% 71.1% 22.5% Covenant 75 % Covenant 2
Slide 23: Northern Europe (NE)
Northern Europe (NE) Norway, Sweden, Denmark, Finland, Estonia, Latvia and Lithuania NOKm 2020 Q4 2019 Q4 Change (%) Highlights & KPIs Total revenues 248 229 17 % Portfolio purchase volume of NOK 147m in the quarter EBIT 129 119 25 % Gross collection in Q4 of NOK 427m Profit margin (%) 52 % 52 % 4 p
Slide 24: Western Europe (WE)
Western Europe (WE) Spain, Italy and France NOKm 2020 Q4 2019 Q4 Change (%) Highlights & KPIs Total revenues 111 131 -15 % Portfolio purchases of NOK 11m in the quarter EBIT 16 27 -41 % Gross collection in Q4 of NOK 147m Profit margin (%) 14 % 21 % -7 pp. ERC 2,669 2,837 -6 % Portfolio purchases Cos
Slide 25: Central Europe (CE)
Central Europe (CE) Slovenia, Croatia, Bosnia and Herzegovina, Serbia, Montenegro, Hungary and Czech Republic NOKm 2020 Q4 2019 Q4 Change (%) Highlights & KPIs Total revenues 189 159 3% No portfolio purchases in the quarter EBIT 103 73 7% Gross collection in Q4 of NOK 180m Profit margin (%) 54 % 46
Slide 26: South East Europe (SEE)
South East Europe (SEE) Romania, Bulgaria, Greece and Cyprus NOKm 2020 Q4 2019 Q4 Change (%) Highlights & KPIs Total revenues 118 115 3% Portfolio purchases of NOK 42m in the quarter EBIT 39 41 -5 % Gross collection in Q4 of NOK 177m Profit margin (%) 33 % 35 % -2 pp. ERC 3,169 3,134 1% Portfolio pu
Slide 27: Poland
Poland Poland NOKm 2020 Q4 2019 Q4 Change (%) Highlights & KPIs Total revenues 186 186 - Portfolio purchases of NOK 237m in the quarter EBIT 85 78 9% Gross collection in Q4 of NOK 273m Profit margin (%) 46 % 42 % 4 pp. ERC 3,718 3,812 -2 % Portfolio purchases Cost to Collect 237 81 74 32 % 108 -5 pp
Slide 28: 20 largest shareholders
20 largest shareholders # Shareholder No of shares Percentage 1 PRIORITET GROUP AB 52 913 000 12.91 % 2 RASMUSSENGRUPPEN AS1) 51 873 266 12.65 % 3 VALSET INVEST AS 26 000 000 6.34 % 4 STENSHAGEN INVEST AS 18 893 376 4.61 % 5 VERDIPAPIRFONDET ALFRED BERG GAMBA 13 329 295 3.25 % 6 DNB MARKETS AKSJEHAN
Slide 29: Definitions
Definitions 120-month ERC Cash revenue Estimated remaining collection, which expresses the gross collection in face value expected to be collected in the Cash revenue consists of “Total revenues” added back amortisation and revaluation of purchased loan portfolios, future over a 120-month period fro
Slide 30: Definitions (cont'd)
Definitions (cont’d) Gross collection Gross collection is the actual cash collected and assets recovered from purchased portfolios before costs related to Other revenues collect the cash received. Other revenues includes revenue from external collection, interest on loan receivables as well as subsc
Slide 31: B2Holding ASA contact details
B2Holding ASA Stortingsgaten 22 P.O. Box 1726 Vika N-0121 Oslo www.b2holding.no Tel: +47 22 83 39 50 E-mail: post@b2holding.no