Intrum Ab · OMXSTO:INTRUM

Intrum Ab — Intrum Justitia — Q2 2014 Earnings Presentation

25 slides from Intrum Ab's earnings presentation, Jul 17, 2014

  1. Slide 1: Interim report April - June 2014

    Interim report April - June 2014 July 17th 2014 Lars Wollung, CEO Erik Forsberg, CFO

  2. Slide 2: Quarterly highlights

    Quarterly highlights 28% RTM EPS growth EBIT growth (adjusted for currency and debt 14% portfolio revaluations) 8% Growth in operating cash flow 21% Return on purchased debt 537 MSEK investments in purchased debt 2(25) © Intrum Justitia AB 2014. All rights reserved.

  3. Slide 3: Financial summary

    Financial summary Apr-Jun Apr-Jun Change Jan-Jun Jan-Jun Change 2014 2013 % 2014 2013 % Revenues, MSEK: 1 301 1 152 13 2 505 2 200 14 EBIT, MSEK: 372 301 24 655 537 22 EBIT margin, %: 29 26 n/a 26 24 n/a EPS growth, %: 26 45 n/a 24 54 n/a Cash flow from operations, MSEK: 570 530 8 1 100 994 11 Inves

  4. Slide 4: Revenues and operating margin, rolling 12 months

    Revenues and operating margin, rolling 12 months Revenues: SEK 4 871 M Operating margin: 27% SEK M 5 000 Revenues % 4 500 EBIT EBIT margin 25 4 000 3 500 3 000 20 2 500 2 000 1 500 15 1 000 500 0 10 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

  5. Slide 5: Northern Europe

    Regional development Market position Northern Europe Market leader Top 5 50 percent of total revenues Q2 Highlights Apr-Jun Apr-Jun Change Fx Adj Excl. PD Revaluations 2014 2013 % % • Growth in EBIT excluding Revenues, SEKm 636 642 -1% -4% revaluations due to improved CMS EBIT, SEKm 200 189 6% 3% gr

  6. Slide 6: Central Europe

    Regional development Market position Central Europe Market leader Top 5 26 percent of total revenues Other Apr-Jun Apr-Jun Change Fx Adj Q2 Highlights Excl. PD Revaluations 2014 2013 % % • Growth in PD investments during prior Revenues, SEKm 337 248 36% 30% EBIT, SEKm 87 56 55% 49% periods drives im

  7. Slide 7: Western Europe

    Regional development Market position Western Europe Market leader Top 5 24 percent of total revenues Other Apr-Jun Apr-Jun Change Fx Adj Q2 Highlights Excl. PD Revaluations 2014 2013 % % Revenues, SEKm 305 256 19% 13% • Good year-on-year EBIT EBIT, SEKm 62 50 24% 17% development, mainly from improve

  8. Slide 8: Credit Management Services

    Credit Management Services 64 percent of total revenues Apr-Jun Apr-Jun Change Fx Adj Q2 Highlights Reported numbers 2014 2013 % % Revenues, SEKm 957 871 10% 6% • Revenue growth mainly from acquired Service line earnings, SEKm 235 207 14% 10% units and increased volumes from Service line earnings ma

  9. Slide 9: Financial Services

    Financial Services 36 percent of total revenues Apr-Jun Apr-Jun Change Fx Adj Q2 Highlights Reported numbers 2014 2013 % % Revenues, SEKm 554 458 21% 16% • Revenue and earnings growth due Service line earnings, SEKm 312 254 23% 18% to uptake in PD investments in Service line earnings margin % 56% 55

  10. Slide 10: PD ROI – rolling 12 months

    PD ROI – rolling 12 months PD carrying value: SEK 6 030 M ROI RTM, excl. reval: 20% SEK M 6 000 PD carrying value ROI RTM ROI RTM excl. reval 5 600 5 200 20% 4 800 4 400 4 000 15% 3 600 3 200 2 800 10% 2 400 2 000 1 600 1 200 5% 800 400 0 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q

  11. Slide 11: Purchased debt, investments

    Purchased debt, investments 2002–2014 SEK M 2 475 2 500 2 014 266 266 2 000 692 FY 753 1 225 Q1 1 500 Q2 597 Q3 299 1 000 1804 537 Q4 667 500 822 870 996 872 871 1050 920 688 258 201 267 295 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 11(25) © Intrum Justitia AB 2014. All righ

  12. Slide 12: Purchased debt - revaluations

    Purchased debt - revaluations Q2 YTD Q2 YTD PD revaluations, SEK m 2014 2014 2013 2013 Northern Europe 12 0 -3 -6 Central Europe 8 10 7 5 Western Europe 3 3 2 3 Total 23 13 6 2 12(25) © Intrum Justitia AB 2014. All rights reserved.

  13. Slide 13: Balance sheet – Highlights

    Balance sheet – Highlights 30 Jun 30 Jun Dev SEK m 2014 2013 % Total assets 10 969 9 605 14 Goodwill 2 608 2 420 8 Total financial fixed assets 6 122 5 044 21 - whereof purchased debt 6 030 4 970 21 Shareholders' equity 2 982 2 945 1 Net debt/ R12 EBITDA* 1.90 1.76 * EBITDA = operating result before

  14. Slide 14: Cash flow statement

    Cash flow statement Apr-Jun Apr-Jun Dev Jan-Jun Jan-Jun Dev SEK m 2014 2013 % 2014 2013 % Operating earnings (EBIT) 372 301 24 655 537 22 Depreciation 40 40 0 78 79 -1 Amortization and revaluation of purchased debt 337 321 5 697 639 9 Income tax paid -56 -28 100 -101 -65 55 Changes in factoring rece

  15. Slide 15: Funding base

    Funding base • Syndicated bank loan facility (up to SEK 5bn) Debt Maturity Schedule ‒ About SEK 2 bn utilized per June 2014 (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 20

  16. Slide 16: Financial targets

    Financial targets Financial targets Q2 14 Q2 14 RTM FY 2013 1. EPS growth to exceed 10% per year 26% 28% 41% 2. Return on PD investments to exceed 15% per year 21% 20% 21% 3. Net Debt/EBITDA should be between 2.0 and 3.0 1.90 1.90 1.61 16(25) © Intrum Justitia AB 2014. All rights reserved.

  17. Slide 17: Q&A

    Q&A 17(25) © Intrum Justitia AB 2014. All rights reserved.

  18. Slide 18: Appendix

    Appendix 18(25) © Intrum Justitia AB 2014. All rights reserved.

  19. Slide 19: Intrum Justitia in brief

    Intrum Justitia in brief Europe’s leading provider of credit management services, with operations in 20 countries Revenue 2013: SEK 4.6 billion Avrg nr of employees in Q2 2014: 3 815 Listed on NASDAQ OMX, Stockholm, Large-Cap Market capitalization, June 30, 2014: SEK 15.3 billion Intrum Justitia's m

  20. Slide 20: 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

  21. Slide 21: Purchased debt, carrying value

    Purchased debt, carrying value SEK M 6 250 6 000 5 750 5 500 5 250 5 000 4 750 4 500 4 250 4 000 3 750 3 500 3 250 3 000 2 750 2 500 2 250 2 000 1 750 1 500 1 250 1 000 750 500 250 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 21(25) © Intrum Justitia AB 2014. All rights reserved.

  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 -2% -4% 22(25) © Intrum Justitia AB 2014. All rights reserved.

  23. Slide 23: One-offs vs Forward Flow, as a % of PD Investments

    One-offs vs Forward Flow, as a % of PD Investments 23(25) © Intrum Justitia AB 2014. All rights reserved.

  24. Slide 24: A broad indication going forward

    A broad indication going forward Carrying value 30 Jun 2014: SEK 6,030 M +21% y-o-y (SEK 4,970 M) Gross collection: Carrying value x 2.1 Cash flow distribution 30 Jun of Gross collection 2014 2013 Y1 22% 23% Y2 17% 17% Y3 13% 14% Y4 11% 11% Y5 9% 9% Y6 7% 7% Y7 6% 6% Y8 5% 4% Y9 4% 3% 24(25) © Intru

  25. Slide 25: Intrum Justitia - Better business for all

    intrum (~))) justitia Better business for all

Intrum Justitia — Q2 2014 Earnings Presentation on 6ix