Intrum Ab · OMXSTO:INTRUM

Intrum Ab — Intrum Justitia — Q3 2015 Earnings Presentation

26 slides from Intrum Ab's earnings presentation, Oct 21, 2015

  1. Slide 1: Interim report July - September 2015

    Interim report July - September 2015 October 21st 2015 Lars Wollung, CEO & President Erik Forsberg, CFO

  2. Slide 2: We are a catalyst for a sound economy

    WE ARE A CATALYST FOR A SOUND ECONOMY 2 © Intrum Justitia AB 2015. All rights reserved.

  3. Slide 3: Q3 Key highlights

    Q3 Key highlights • Solid financial development ‒ Reported EBIT of 452 MSEK at all time high ‒ Underlying EBIT growth at +10% (excluding revaluations, fx and accounting adjustments) ‒ EPS growth last 12 months at 26% • Opex program delivering results ‒ CMS: margins improving, at +2%-pts for the quar

  4. Slide 4: Q3 Key financials

    Q3 Key financials 3% EBIT growth (adjusted for currency and debt portfolio revaluations) 26% RTM EPS growth 20% Return on purchased debt 8% Growth in purchased debt book value 320 MSEK investments in purchased debt 4(26) © Intrum Justitia AB 2015. All rights reserved.

  5. Slide 5: Financial summary

    Financial summary Q3 Q3 Change YTD YTD Change 2015 2014 % 2015 2014 % Revenues, MSEK 1 386 1 309 6 4 232 3 814 11 EBIT, MSEK 452 415 9 1 239 1 070 16 EBIT margin, % 33 32 n/a 29 28 n/a EPS growth, % 10 46 n/a 26 32 n/a Cash flow from operations, MSEK 805 788 2 2 027 1 888 7 Investments in purchased

  6. Slide 6: Northern Europe

    Regional development Market leader Northern Europe Top five 46 percent of total revenues Other Q3 Highlights • Continued stable performance with Q3 Q3 Change Fx Adj EBIT margins at a solid 35%, in line Excl. PD Revaluations, Quarter 2015 2014 % % with last year Revenues, SEK M 627 635 -1 -2 EBIT, SE

  7. Slide 7: Central Europe

    Regional development Market leader Central Europe Top five 29 percent of total revenues Other Q3 Highlights Q3 Q3 Change Fx Adj • Good quarter with continued strong Excl. PD Revaluations, Quarter 2015 2014 % % EBIT margins at 32% Revenues, SEK M 393 362 9 1 • Solid returns from the PD book, as EBIT,

  8. Slide 8: Western Europe

    Regional development Market leader Western Europe Top five 25 percent of total revenues Other Q3 Highlights • Strong quarter with solid year-on-year Q3 Q3 Change Fx Adj growth, with improved performance Excl. PD Revaluations, Quarter 2015 2014 % % for both CMS and PD Revenues, SEK M 337 297 13 11 EB

  9. Slide 9: Credit Management Services

    Market leader Credit Management Services Top five 63 percent of total revenues Other Q3 Highlights • Revenue growth excluding currency Q3 Q3 Change Fx Adj Reported numbers, Quarter 2015 2014 % % impact mainly from acquired units Revenues, SEK M 1 008 960 5 2 • Improved Service Line Earnings from Ser

  10. Slide 10: Financial Services

    Market leader Financial Services Top five 37 percent of total revenues Other Q3 Highlights Q3 Q3 Change Fx Adj Reported numbers, Quarter 2015 2014 % % • PD Carrying Value growth adjusted for Revenues, SEK M 596 564 6 2 fx-impact at 6% Service line earnings, SEK M 328 308 6 3 Service line earnings ma

  11. Slide 11: PD Carrying value & growth

    PD Carrying value & growth PD carrying value: SEK 6 418 M Book Value growth: 8% SEK M PD carrying value % Growth YoY 50% 6 000 8% 45% 15% 40% 5 000 33% 35% 4 000 30% 26% 25% 3 000 36% 20% 2 000 24% -1% 3% 15% 10% 1 000 5% 0 0% 2008 2009 2010 2011 2012 2013 2014 2015 Q3 Y o Y comparison 11(26) © Intr

  12. Slide 12: Purchased debt, investments & ROI

    Purchased debt, investments & ROI 2008–2015 PD ROI RTM excl revaluation SEK M 2 500 1 937 25% 266 MSEK 2 000 20% 477 1 298 1 500 15% FY MSEK 2475 267 Q1 320 1 000 1804 2014 574 10% Q2 509 Q3 500 872 871 1050 5% 619 Q4 469 0 0% 2008 2009 2010 2011 2012 2013 2014 2015 1) 2008 – 2013 paid investments 2

  13. Slide 13: Purchased debt - revaluations

    Purchased debt - revaluations Q3 YTD Q3 YTD PD revaluations, SEK M 2015 2015 2014 2014 Northern Europe -6 -27 19 19 Central Europe 31 68 -4 6 Western Europe 4 26 0 3 Total 29 67 15 28 13(26) © Intrum Justitia AB 2015. All rights reserved.

  14. Slide 14: Balance sheet – Highlights

    Balance sheet – Highlights 30 Sep 30 Sep Dev SEK M 2015 2014 % Intangible fixed assets 2 995 2 855 5 - whereof goodwill 2 739 2 616 5 Tangible fixed assets 119 124 -4 Financial fixed assets 6 655 6 012 11 - whereof purchased debt 6 418 5 941 8 Current assets 1 854 1 863 0 Total assets 11 623 10 854

  15. Slide 15: Cash flow statement

    Cash flow statement Q3 Q3 Dev YTD YTD Dev SEK M 2015 2014 % 2015 2014 % Operating earnings (EBIT) 452 415 9 1 239 1 070 16 Depreciation 41 40 2 122 118 3 Amortization and revaluation of purchased debt 355 339 5 1 067 1 036 3 Income tax paid -32 -10 220 -193 -111 74 Changes in factoring receivables -

  16. Slide 16: Funding base

    Funding base • Syndicated bank loan facility (up to SEK 5bn) Debt Maturity Schedule ‒ About SEK 1,8 bn utilized per Sep 2015 (SEK million) ‒ Loan facility allows a total financing of up to SEK 10 bn 3500 • Corporate bonds (up to SEK 5 bn under MTN program) 3000 ‒ SEK 1 bn, 5Y note, issued in March 2

  17. Slide 17: Financial targets

    Financial targets Financial targets Q3 15 Q3 15 RTM FY 2014 1. EPS growth to exceed 10% per year 10% 26% 31% 2. Return on PD investments to exceed 15% per year 20% 21% 20% 3. Net Debt/EBITDA should be between 2.0 and 3.0 1.8 1.8 1.9 17(26) © Intrum Justitia AB 2015. All rights reserved.

  18. Slide 18: Q&A

    Q&A 18(26) © Intrum Justitia AB 2015. All rights reserved.

  19. Slide 19: Appendix

    Appendix 19(26) © Intrum Justitia AB 2015. All rights reserved.

  20. Slide 20: This is Intrum Justitia

    Market leader Top five This is Intrum Justitia Other European market leader in an attractive growth market Proven hybrid business model serving the full credit management value chain Delivering consistent, strong financial returns 2014 2013 Revenue 5 184 4 566 Diversification of risk through broad b

  21. Slide 21: Revenues and EBIT margin, rolling 12 months

    Revenues and EBIT margin, rolling 12 months Revenues: SEK 5 602 M EBIT margin: 29% SEK M 6 000 Revenues 30 5 500 EBIT 5 000 EBIT-margin (RHS) 25 4 500 4 000 20 3 500 % 3 000 15 2 500 2 000 10 1 500 1 000 5 500 0 0 2008 2009 2010 2011 2012 2013 2014 2015 Q3 21(26) © Intrum Justitia AB 2015. All right

  22. Slide 22: Gross Collections vs. Active Forecast - R12

    Gross Collections vs. Active Forecast - R12 14% 12% 10% 8% 6% 4% 2% 0% Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215 Q315 22(26) © Intrum Justitia AB 2015. All rights reserved.

  23. Slide 23: Indicative Financial illustration

    Indicative Financial illustration Invested amount: 100 SEK M Gross collection 2.05 x invested amount (SEK M) Y1 Y2 Y3 Y4 Y5 Y6-Y10 Y11-Y15 Y1-Y15 Cash-flow distribution 29% 18% 12% 9% 8% 20% 4% 100% Gross collection 60 38 25 19 15 40 8 205 Amortisation * -31 -17 -11 -9 -7 -20 -5 -100 Amortisation ra

  24. Slide 24: One-offs vs Forward Flow, as a % of PD Investments

    One-offs vs Forward Flow, as a % of PD Investments 100% 90% 26% 28% 30% 29% 30% 31% 31% 34% 33% 32% 80% 40% 38% 50% 48% 51% 52% 49% 51% 52% 50% 49% 49% 70% 59% 56% 61% 75% 60% 79% 50% 40% 74% 72% 70% 71% 70% 69% 69% 66% 67% 68% 30% 60% 62% 50% 52% 49% 48% 51% 49% 48% 50% 51% 51% 20% 41% 44% 39% 25%

  25. Slide 25: A broad indication going forward

    A broad indication going forward Carrying value 30 Sep 2015: SEK 6,418 M +8% y-o-y (SEK 5,941 M) Gross collection: Carrying value x 2.1 Cash flow distribution 30 Sep of Gross collection 2015 2014 Y1 23% 22% Y2 17% 17% Y3 13% 14% Y4 11% 11% Y5 9% 9% Y6 7% 7% Y7 6% 6% Y8 5% 5% Y9 3% 4% 25(26) © Intrum

  26. Slide 26: Intrum Justitia - Better business for all

    intrum (~))) justitia Better business for all

Intrum Justitia — Q3 2015 Earnings Presentation on 6ix