B2 Impact ASA · OSL:B2I
B2 Impact ASA — B2Holding — Q4 2019 Earnings Presentation
33 slides from B2 Impact ASA's earnings presentation, Feb 28, 2020
Slide 1: Fourth quarter and full year 2019 presentation
Q4 Fourth quarter and full year 2019 presentation Oslo, 28 February 2020
Slide 2: Key figures Q4 2019
Key figures Q4 2019 Total revenues Gross Cash Collections Cash EBITDA 819 1,295 963 (753) (1,169) (833) Net profit Portfolio purchases Leverage ratio 90 566 2.86x (156) (1,634) (3.53x) Same quarter last year in brackets. Figures in NOK million, except leverage ratio. Definitions on page 31-32 |2
Slide 3: Highlights Q4 2019
Highlights Q4 2019 Volume Servicing fees and other income continue to increase growth Prudent level of portfolio purchases Portfolios mainly acquired in Northern Europe through forward flow deals Gross cash collections and Cash EBITDA increased Effectiveness & Efficiency Cost to collect (CtC) trendi
Slide 4: Business update
Business update |4
Slide 5: Secured recoveries
Secured recoveries Secured 28% The organizational changes within secured are starting to show positive effects; More specialized teams are able to extract additional value through restructuring In line with the new strategy, several cases have gone through a strategic review in order to maximize val
Slide 6: Unsecured collections in line with expectations
Unsecured collections in line with expectations Unsecured 72% Positive trend continues in main markets Stable market for portfolio acquisitions with good pipeline visibility Continued focus on improving collection strategies in order to achieve higher effectiveness and economies of scale With unsecu
Slide 7: Increasing share of forward flow agreements
Increasing share of forward flow agreements Vintage share of Forward Flows 71% 157 Signed Forward Flow contracts 2020 160 (% of unsecured Book Value) (NOKm) 140 132 121 120 48% 102 100 80 69 68 66 28% 27% 61 60 57 57 19% 14% 40 33 23 20 3% 0 2013 2014 2015 2016 2017 2018 2019 Jan Feb Mar Apr May Jun
Slide 8: JVs and partnerships for portfolio acquisitions
JVs and partnerships for portfolio acquisitions Actively pursuing JVs to gain access to a larger pipeline The Group has established co-investments for portfolios in Romania, Greece, Croatia and Sweden and further co-investments are under consideration. Two new partnerships in 2020: Banca Sella for I
Slide 9: Market development
Market development Regulatory changes Portfolio purchases JVs and partnerships ▪ Prudential backstop with effect from April ▪ Market improved in 2019 with decreasing ▪ Starting trend of a closer cooperation 2019 – banks expected to sell off NPLs more prices and improving IRRs mainly within between b
Slide 10: Market overview
Market overview Northern Europe Poland Western Europe Central Europe South East Europe Market position Top 3 Top 3 Top 10 Top 3 Top 3 Q4’19 NOK 8.51bn NOK 3.81bn NOK 2.84bn NOK 5.51bn NOK 3.13bn NOK 23.8bn 36 % 16% 12% 23% 13% ERC1) (Q4’18) (NOK 6.74bn) (NOK 3.64bn) (NOK 2.65bn) (NOK 5.76bn) (NOK 3.
Slide 11: Financial performance
Financial performance | 11
Slide 12: Fourth quarter and full year 2019 summary
Fourth quarter and full year 2019 summary Financial summary 2019 2018 2019 2018 NOKm % change % change Q4 Q4 Full Year Full Year Total revenues excl. net credit gain/(loss) 836 750 12 % 3,274 2,963 10 % Net credit gain/(loss) from purchased loan portfolios -17 3 -400 -58 Total Revenues2) 819 753 9%
Slide 13: Income statement
Income statement 2019 2018 2019 2018 EBITDA includes non-recurring NOKm Q4 Q4 Full Year FY Audited expenses in the quarter of NOK Interest income from purchased loan portfolios 692 676 2,713 2,537 39 million, mainly relating to Net credit gain/loss purchased loan portfolios -17 3 -400 -58 software i
Slide 14: Increasing focus on costs and economies of scale
Increasing focus on costs and economies of scale Personnel costs1 External costs1 Other operating costs1 135 118 77 113 64 89 10% 10% 9% 8% 7% 5% NOKm NOKm NOKm Q4’18 Q4’19 Q4’18 Q4’19 Q4’18 Q4’19 CtC% Personnel costs CtC% External costs CtC% Other operating costs Cost to Collect 311 Cost to collect
Slide 15: Balance sheet
Balance sheet 2019 2018 NOKm % change Available investment capacity of 31 Dec Audited Deferred tax asset 189 97 94 % NOK 2.1bn1) plus monthly cash Goodwill 778 785 -1 % flow Tangible and intangible assets 363 274 32 % Investments in associated companies and joint ventures 387 12 3087 % Equity ratio
Slide 16: Capital structure with prudent leveraging
Capital structure with prudent leveraging Status Staggered maturity with ample liquidity headroom Funding structure with sound leverage levels, significant financial flexibility EUR millions and supporting liquidity reserves I+3.25- E+7.50% E+7.00% E+4.25% E+4.75% E+6.35% 3.75% Leverage ratio down t
Slide 17: A modest quarter for portfolio purchases
A modest quarter for portfolio purchases Portfolio purchase volumes1) 2014 2015 2016 2017 2018 2019 NOKm Geography distribution SEE 2 273 WE CE 9% 1% 4% 1 951 Poland 19% NOK 566m 1 667 67% 1 634 1 485 NE 1 231 1 120 Distribution by type 988 1 054 Secured 827 Unsecured 2% 702 672 20% 570 566 448 NOK
Slide 18: Diversified portfolio yielding stable cash flows
Diversified portfolio yielding stable cash flows Development in total gross ERC1) Forward 120m ERC profile by year1) NOKm +7% NOKm 24,708 5,420 5,452 23,809 22,262 22,595 Secured 21,434 Pol 28% 20,608 NOK 20,119 23.8bn 18,116 4,079 Unsecured 72% NE 15,264 SEE Poland 13% 16% WE 12% NOK 2,252 23.8bn N
Slide 19: Summary
Summary | 19
Slide 20: 2020 – A year of transition
2020 – A year of transition Develop from mainly being a portfolio purchaser to becoming a hybrid company with debt servicing capabilities New organization and structure to support the strategic direction Investment strategy with focus on operational efficiency and economies of scale Focused footprin
Slide 21: Q&A
Q&A
Slide 22: Financial highlights: Quarterly financial performance
Financial highlights: Quarterly financial performance Total ERC1) and portfolio purchases Total revenues NOKm NOKm 880 1,6342) 570 1,667 1,231 566 819 795 14% 753* 7% 15% 2% 16% 3% 2% 1% 379 22,595 24,708 23,809 84% 22,262 21,434 90% 83% 31% 82% 6% 63% Q4´18 Q1’19 Q2’19 Q3’19 Q4’19 Q4´18 Q1’19 Q2’19
Slide 23: Diversified portfolio yielding stable cash flows
Diversified portfolio yielding stable cash flows Year Total Unsecured 1 2 3 4 5 6 7 8 9 10 120m ERC ERC Poland 909 728 507 369 271 200 148 106 78 58 3,375 3,519 NE 1,484 1,253 1,043 863 716 594 486 399 328 266 7,432 8,463 CE 365 314 268 219 178 141 95 56 24 12 1,672 1,691 WE 224 203 160 132 101 78 5
Slide 24: B2Holding Group Organizational Structure
B2Holding Group Organizational Structure Audit Committee Board of Directors CEO Internal Audit Erik J. Johnsen to be hired Legal & Financial IR and M&A Investment Risk Compliance to be hired Rasmus Hansson Johannes Raschke Jeremi Bobowski Cecilie Kjelland Personnel, Secured Asset Unsecured Asset Cor
Slide 25: Northern Europe (NE)
Northern Europe (NE) Norway, Sweden, Denmark, Finland, Estonia, Latvia and Lithuania NOKm 2019 Q4 2018 Q4 Change (%) Highlights & KPIs Total revenues 229 220 4% Portfolio purchase volume of NOK 376m in the quarter EBIT 119 125 -5 % Gross cash collection of NOK 390m in Q4 Profit margin (%) 52 % 57 %
Slide 26: Western Europe (WE)
Western Europe (WE) Spain, Italy, France and Portugal NOKm 2019 Q4 2018 Q4 Change (%) Highlights & KPIs Total revenues 131 148 -12 % Portfolio purchases of NOK 25m in the quarter EBIT 27 57 -52 % Gross cash collection in Q4 of NOK 215m Profit margin (%) 21 % 39 % Cash EBITDA was NOK 164m, up 89% fro
Slide 27: Central Europe (CE)
Central Europe (CE) Slovenia, Croatia, Bosnia and Herzegovina, Serbia, Montenegro, Hungary and Czech Republic NOKm 2019 Q4 2018 Q4 Change (%) Highlights & KPIs Total revenues 159 159 0% Portfolio purchases of NOK 6m in the quarter EBIT 73 100 -27 % Gross cash collection in Q4 of NOK 256m Profit marg
Slide 28: South East Europe (SEE)
South East Europe (SEE) Romania, Bulgaria, Greece and Cyprus NOKm 2019 Q4 2018 Q4 Change (%) Highlights & KPIs Total revenues 115 67 73 % Portfolio purchases of NOK 50m in the quarter EBIT 41 -4 -1212 % Gross cash collection in Q4 of NOK 181m Profit margin (%) 35 % -5 % Cash EBITDA was NOK 131m, up
Slide 29: Poland (P)
Poland (P) Poland NOKm 2019 Q4 2018 Q4 Change (%) Highlights & KPIs Total revenues 186 159 17 % Portfolio purchase volume of NOK 108m in the quarter EBIT 78 59 33 % Gross collection in Q4 of NOK 253m Profit margin (%) 42 % 37 % Cash EBITDA was NOK 195m, up 27% from Q4 2018 ERC 3,812 3,640 5% Portfol
Slide 30: 20 largest shareholders
20 largest shareholders # Shareholder No of shares Percentage 1 PRIORITET GROUP AB 52 913 000 12.91 % 2 RASMUSSENGRUPPEN AS 43 073 236 10.51 % 3 VALSET INVEST AS 26 000 000 6.34 % 4 STENSHAGEN INVEST AS 18 893 376 4.61 % 5 VERDIPAPIRFONDET DNB NORGE 15 262 347 3.72 % 6 K11 INVESTOR AS 9 766 680 2,38
Slide 31: Definitions
Definitions 120-month ERC Estimated remaining collection, which expresses the gross cash collection in face value Cash revenue expected to be collected in the future over a 120-month period from the purchased Cash revenue consists of “Total revenues” added back amortisation and revaluation of portfo
Slide 32: Definitions (cont’d)
Definitions (cont’d) Forward flow agreements Operating cash flow per share Forward flow agreements are agreements where the Group agrees with the portfolio Operating cash flow per share is operating cash flow from consolidated statement of cash provider that it will, over some period in fixed interv
Slide 33: Stortingsgaten 22 | P.O. Box 1726 Vika | N-0121 Oslo www.b2holding.no | Tel: +47
Stortingsgaten 22 | P.O. Box 1726 Vika | N-0121 Oslo www.b2holding.no | Tel: +47 22 83 39 50 | E-mail: post@b2holding.no