Slide 1: Q1 2021
Q1 2021 30 April 2021
Slide 2: Agenda
Agenda Who is Axactor - About us 1 - Strategy Main events Q1 2021 2 Financial highlights 3 Outlook 4 2
Slide 3: Axactor is an established European debt collection company that has grown rapidly in targeted markets
Axactor is an established European debt collection company that has grown rapidly in targeted markets A leading European debt collector Operating in a few, stable and well developed markets Share of revenue2 • Established in Q4 2015 with headquarters in Oslo, Norway, and is one of Europe’s top-ten d
Slide 4: Unique strategic direction to drive profitable growth
Unique strategic direction to drive profitable growth Markets NPL Cost-to-Collect vs. income per market1 (EUR million and %) • Organic growth in existing markets • Carefully selected attractive markets 65% Products 60% ’17 • Core products: NPL and 3PC Cost-to-Collect (NPL) • Fresh unsecured consumer
Slide 5: Key factors to improve return on equity
Key factors to improve return on equity - Leveraging scale benefits as Axactor continue the growth journey Reduce Enhance IRR on Lower Grow 3PC Maturity effects cost-to-collect NPL portfolios funding cost Technology development and Capital light, recurring business Enhanced IRR through careful Lower
Slide 6: Agenda
Agenda Who is Axactor 1 Main events Q1 2021 - Financial highlights 2 - Key events - ESG update Financial highlights 3 Outlook 4 6
Slide 7: Key Financial Highlights Q1 2021
Key Financial Highlights Q1 2021 All numbers in EUR 7% 10% 26% 85m 61m 18m Gross revenue Total income EBITDA 8% -130% -9ppt 52m -2m -2% Cash EBITDA Profit before tax ROE1 YoY growth 7 1) ROE excluding non-controlling interest, annualized
Slide 8: Restructuring of balance sheet finalized in Q1
Restructuring of balance sheet finalized in Q1 Main deal components: Key effects: ✓ EUR ~50m equity raise ✓ Reduced complexity ✓ Axactor Invest I roll-up ✓ Extended maturities ✓ All major credit facilities ✓ Reduced funding cost refinanced ✓ Increased investment capacity ✓ Increased equity ratio 8
Slide 9: Cost reduction program targeting EUR ~5m in savings
Cost reduction program targeting EUR ~5m in savings - Further improving our competitive advantage • Site-consolidation in Spain: Expected savings, annualized1) (EUR million) 4.8 • Sevilla, Bilbao and Zaragoza to be closed 4.0 • Large number of smaller initiatives: 3.3 • Optimizing the organization •
Slide 10: 3PC market improving, although slower than anticipated
3PC market improving, although slower than anticipated • High customer retention through the pandemic • Lower volumes received – expect reversion as societies reopen • Moratorium in Italy extended until June 2021 • Building strong 3PC pipeline across all markets • Advanced negotiations over signific
Slide 11: Improving ESG ratings step-by-step
Improving ESG ratings step-by-step - Independent rating agencies Vigeo.Eiris and Sustainalytics cover Axactor Vigeo.Eiris1) Sustainalytics2) 50 24.8 • Focus on ESG related topics from inception 17.8 • Sustainability report implemented in AR 2019, 34 Medium significantly improved in AR 2020 20 21 ris
Slide 12: Agenda
Agenda Who is Axactor 1 Main events Q1 2021 2 Financial highlights - Operating segments 3 - Profit & Loss - Return on equity Outlook 4 12
Slide 13: Q1 normally a seasonally weak quarter
Q1 normally a seasonally weak quarter - Continued NPL growth, lower 3PC volumes through Covid-19 pandemic Core business segments Run-off business segment NPL Gross revenue 3PC Gross revenue REO Gross revenue (EUR million) (EUR million) (EUR million) 17% 66 16 -14% 21 61 62 63 13 14 54 54 11 12 -13%
Slide 14: Further improving the industry leading cost level
Further improving the industry leading cost level - Cost cutting initiative to drive additional improvements over coming quarters Core business segments Gross revenue & Total operating expenses (excl. REO) (EUR million) • Industry leading cost-to-collect is a key element of Axactor’s strategy +11% G
Slide 15: NPL with continued gross revenue growth
NPL with continued gross revenue growth - Supported by portfolio investments north of EUR 200m through 2020 NPL Gross Revenue and CM1% (EUR million and %) 78% 77% 75% 69% • 17% YoY gross revenue growth 64% • Driven by continued investments in NPL portfolios 66 61 62 63 • Seasonally slow quarter and
Slide 16: NPL active forecast aligned with current performance
NPL active forecast aligned with current performance - Stronger seasonality in the second quarter Active forecast versus cash collected1 • Unsecured NPL collection performance in Q1 2021 of 98% • Historic underperformance assumed lost – prudent approach • Expect long-term performance to fluctuate ar
Slide 17: 3PC Development
3PC Development - Restructuring cost of EUR ~3m included in a seasonally slow quarter 3PC income and CM1% (EUR million and %) 16 • Negative impacts related to Covid-19 continue, 13 14 particularly for Spain and Italy 12 • High customer retention during the pandemic, but lower 11 volumes – expect vol
Slide 18: REO Development (run-off segment)
REO Development (run-off segment) - Good sales momentum on a declining asset base REO income and CM1% (EUR million and %) 21 • Revenue upheld on good level despite declining asset base • Inventory down 36% since Q1 2020 12 12 • 304 assets sold during Q1 2021 10 10 • 2,391 assets in inventory at quar
Slide 19: Summary: YoY income growth and margin expansion
Summary: YoY income growth and margin expansion - Despite EUR ~3m restructuring cost included in the quarter Total Income EBITDA and EBITDA-margin Cash EBITDA (EUR million) (EUR million and %) (EUR million) 49% 36% 31% 32% 32% 29% 75 30% 25% 67 74 72 65 59 60 60 64 62 56 61 30 26 52 56 55 24 48 22 2
Slide 20: Earnings hit by unrealized FX loss
Earnings hit by unrealized FX loss Figures in EUR million Q1-21 Q1-20 EBITDA 17.7 14.1 • Net financial items include unrealized FX loss of Depreciation & amortization -2.6 -2.6 EUR 4.0m EBIT 15.1 11.5 • Q1-20 included unrealized FX gain of EUR 9.6m Net financial items -16.8 -5.9 • Net tax expense de
Slide 21: Two significant items affecting Q1 result
Two significant items affecting Q1 result Two items affecting Q1 2021 result Restructuring FX impact Excluding Figures in EUR million Reported cost (A) (B) (A)-(B) Gross revenue 84.9 0.0 0.0 84.9 • EUR 3.2m restructuring cost primarily NPL portfolio amortization & revaluation -23.5 0.0 0.0 -23.5 rel
Slide 22: Our number one goal is to increase Return on Equity
Our number one goal is to increase Return on Equity - Aim to initiate dividend payments as return on equity gradually improves Return on Equity excl. minorities per quarter (annualized) Covid-19 Q3 unnaturally high due to REO impairment reversal 12% 11% and low NPL amortization • 2020 heavily affect
Slide 23: Agenda
Agenda Who is Axactor 1 Main events Q1 2021 2 Financial highlights 3 Outlook 4 23
Slide 24: Outlook
Outlook • Covid-19 impact on business stabilized – do not anticipate sudden movements in either direction • 3PC volume expected to return to pre-pandemic levels as societies re-open • Cost reduction program targeting EUR 4.8m annualized savings by year-end • EUR ~1.0m restructuring cost expected in
Slide 25: Supporting information
Supporting information
Slide 26: NPL portfolio Q1 2021
NPL portfolio Q1 2021
Slide 27: NPL with continued gross revenue growth
NPL with continued gross revenue growth - Supported by portfolio investments north of EUR 200m through 2020 NPL Gross Revenue and CM1% (EUR million and %) 78% 77% 75% 69% • 17% YoY gross revenue growth 64% • Driven by continued investments in NPL portfolios 66 61 62 63 • Seasonally slow quarter and
Slide 28: Improving collection performance
Improving collection performance Actual collection vs. active forecast1 (LTM, rolling) 112% 108% 106% • Q1 collection performance of 98% 100% 101% 101% 98% 98% 95% 97% 96% 92% 93% • LTM collection performance of 98% • Curves for 2021 aligned with current performance • Long term average performance e
Slide 29: Modest investment commitments
Modest investment commitments - Prioritizing high IRR portfolios, and expecting significant volumes to be offered in H2 2021 Quarterly NPL investments (EUR million) 90 • Stable forward flow volume • Improving pipeline, but expect 62 majority of 2021 volume in H2 35 • Increased focus on one-off trans
Slide 30: Stable ERC level
Stable ERC level ERC development Forward ERC profile by year (EUR million) (EUR million) 2,153 2,160 2,169 2,159 290 2,052 249 221 198 178 159 142 128 116 105 95 87 78 63 52 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 Y12 Y13 Y14 Y15 FIN GER ITA NOR SPA SWE FIN GER ITA NOR SPA S
Slide 31: 3PC Q1 2021
3PC Q1 2021
Slide 32: 3PC Development
3PC Development - Restructuring cost of EUR ~3m included in a seasonally slow quarter 3PC income and CM1% (EUR million and %) 16 • Negative impacts related to Covid-19 continue, 13 14 particularly for Spain and Italy 12 • High customer retention during the pandemic, but lower 11 volumes – expect vol
Slide 33: 3PC volumes by geographic region
3PC volumes by geographic region 3PC total income split by geographic region 2% 2% • Spain generate majority of 3PC income 24% • Germany share of revenue continue to increase Q1’21 Total income • Nordics accounting for 21% of revenue 51% EUR 11.5m 4% 18% FIN DEU ITA NOR ESP SWE 33
Slide 34: REO portfolio (run-off segment) Q1 2021
REO portfolio (run-off segment) Q1 2021
Slide 35: REO Development (run-off segment)
REO Development (run-off segment) - Good sales momentum on a declining asset base REO income and CM1% (EUR million and %) 21 • Revenue upheld on good level despite declining asset base • Inventory down 36% since Q1 2020 12 12 • 304 assets sold during Q1 2021 10 10 • 2,391 assets in inventory at quar
Slide 36: REO portfolio moving towards the tail
REO portfolio moving towards the tail REO book value* REO # of units* (EUR million) 223 7,388 198 200 6,703 187 181 6,161 6,323 5,773 157 162 5,130 4,612 148 4,825 129 120 4,024 3,740 3,489 89 84 3,076 79 2,694 2,391 68 8 521 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 2017 2018 2018 2019 2019 2
Slide 37: REO statistics
REO statistics* (EUR million) Current book Asset class # assets % of total Book value % of total • Housing represent 53% of current book value Housing 960 40 % 36.5 53 % Parking, annex etc. 797 33 % 3.0 4% • Limited exposure to commercial assets Land 258 11 % 4.4 6% Commercial 376 16 % 25.8 38 % Eli
Slide 38: Appendix
Appendix
Slide 39: P&L statement
P&L statement EUR thousand Interest income from purchased loan portfolios For the quarter end 31 Mar 2021 41,898 31 Mar 2020 39,326 For the quarter end / YTD 31 Mar 2021 41,898 31 Mar 2020 39,326 Net gain/(loss) purchased loan portfolios -2,036 -8,758 -2,036 -8,758 Other operating revenue 21,170 25,
Slide 40: Balance sheet statement
Balance sheet statement EUR thousand 31 Mar 2021 31 Mar 2020 Full year 2020 EUR thousand 31 Mar 2021 31 Mar 2020 Full year 2020 ASSETS EQUITY AND LIABILITIES Intangible non-current assets Equity attributable to equity holders of the parent Intangible Assets 19,450 21,216 19,989 Share Capital 158,150
Slide 41: Legal organization March 2021
Legal organization March 2021 Axactor SE (Norway) Axactor Platform Holding AB Axactor Portfolio Holding AB Reolux Holding S.à r.l. 50%* Axactor Italy Holding (Sweden) (Sweden) (Luxembourg) S.r.l. (Italy) Axactor Finland Axactor Capital Axactor Norway Axactor Germany Axactor España, Axactor Sweden Be
Slide 42: Terms and abbreviations
Terms and abbreviations APM / KPI definition EBITDA adjusted for change in forward flow derivatives, calculated cost of share option program, portfolio Terms and abbreviations Cash EBITDA amortizations and revaluations, REO cost of sales and REO impairments CM1 Margin Total operating expenses (exclu
Slide 43: axactor.com
axactor.com AXACTOR
Slide 44: Slide 44