Slide 1: Interim report January - June 2017
Interim report January - June 2017 July 25th, 2017 Mikael Ericson, CEO Erik Forsberg, CFO
Slide 2: Agenda
Agenda 1. Q2 Highlights 2. Reported Financials 3. Pro Forma Financials 4. Future Outlook 5. Appendix 2
Slide 3: Intrum Justitia
intrum Ww justitia
Slide 4: Q2 2017 Operational Highlights
Q2 2017 Operational Highlights Merger with Lindorff completed according to plan ‒ June 12: EU competition approval ‒ June 16: Debt refinancing successfully completed ‒ June 29: New group management team appointed with combined strengths from both units Solid pro forma revenue growth at +25% YoY ‒ St
Slide 5: Q2 2017 Financial Highlights
Q2 2017 Financial Highlights Reported Financials 1) ‒ Underlying EBIT +30% YoY (excluding NRIs, fx and revaluations) ‒ Solid quarter for Purchased Debt, with investments at +53% YoY and RoI at 20% ‒ Good growth for CMS, with fx adjusted revenue growth at +13% YoY Pro Forma Financials 2) ‒ Purchased
Slide 6: Agenda
Agenda 1. Q2 Highlights 2. Reported Financials Excludes P&L impact from Lindorff and discontinued operations of IJ Norway 3. Pro Forma Financials 4. Future Outlook 5. Appendix 6
Slide 7: Financial summary
Financial summary Q2 Q2 Change YTD YTD Change 2017 2016 % 2017 2016 % Revenues,SEK M 1 796 1 421 26 3 347 2 778 20 Cash EBITDA excl NRIs, SEK M 1 158 891 30 2 145 1 673 28 EBITDA excl NRIs, SEK M 681 509 34 1 166 925 26 EBIT excl NRIs,SEK M 639 467 37 1 124 883 27 EBIT excl NRIs margin, % 36 33 n/a
Slide 8: Northern Europe
Northern Europe Q2 Q2 Change FX Adjust YTD YTD Change FX Adjust Excl PD Revals and Excl NRI 2017 2016 % % 2017 2016 % % Revenues 716 639 12 9 1 324 1 234 7 5 EBIT 220 223 -2 -4 397 410 -3 -5 EBIT Margin 31 35 30 33 Q2 Highlights • Positive revenue development mainly from good CMS trend for both acqu
Slide 9: Western Europe
Western Europe Q2 Q2 Change FX Adjust YTD YTD Change FX Adjust Excl PD Revals and Excl NRI 2017 2016 % % 2017 2016 % % Revenues 407 354 15 10 800 696 15 11 EBIT 98 82 20 15 191 165 16 12 EBIT Margin 24 23 24 24 Q2 Highlights • Revenue growth due to increased PD investments and CMS acquisitions, part
Slide 10: Central Europe
Central Europe Q2 Q2 Change FX Adjust YTD YTD Change FX Adjust Excl PD Revals and Excl NRI 2017 2016 % % 2017 2016 % % Revenues 632 411 54 48 1183 826 43 39 EBIT 280 145 93 85 495 286 73 67 EBIT Margin 44 35 42 35 Q2 Highlights • Continued strong profitable growth, in line with the trend in previous
Slide 11: Credit Management Services
Credit Management Services Q2 Q2 Change FX Adjust YTD YTD Change FX Adjust Excl NRI 2017 2016 % % 2017 2016 % % Revenues, SEK M 1 185 1 006 18 13 2 294 1 984 16 12 Service Line Earnings, SEK M 307 264 16 12 564 492 15 11 Service Line Earnings Margin, % 26 26 25 25 Q2 Highlights • Good double-digit r
Slide 12: Financial Services
Financial Services Q2 Q2 Change FX Adjust YTD YTD Change FX Adjust Excl NRI 2017 2016 % % 2017 2016 % % Revenues, SEK M 982 682 44 40 1 752 1 311 34 31 Service Line Earnigns, SEK M 538 379 42 36 950 736 29 27 Service Line Earnings Margin, % 55 56 -1 ppt 54 56 +/-0 ppt Investments in PD, SEK M 835 54
Slide 13: Common Costs
Common Costs Q2 Q2 Change FX Adjust YTD YTD Change FX Adjust 2017 2016 % % 2017 2016 % % Common Costs Excl NRI, SEK M -206 -176 17 13 -390 -345 13 10 Q2 Highlights • Year on year increase mainly due to acquired units – underlying cost development relatively unchanged. 13
Slide 14: Purchased Debt - revaluations
Purchased Debt - revaluations Q2 YTD Q2 YTD PD revaluations, SEK M 2017 2017 2016 2016 Northern Europe 1 -21 12 11 Central Europe 36 50 17 34 Western Europe 4 11 -12 -23 Total 41 40 17 22 14
Slide 15: Q2 2017 NRIs for Reported Financials
Q2 2017 NRIs for Reported Financials - Total NRIs in Q2 of SEK 733 M, of which 163M booked to EBIT, 316 MSEK booked to the financial net and SEK 254M booked to equity. See below for further details. - In addition, make whole-costs of EUR 98 M for Lindorff’s pre-existing bonds treated as a fair value
Slide 16: Cash flow statement
Cash flow statement Q2 Q2 Dev YTD YTD Dev SEK M 2017 2016 % 2017 2016 % Operating earnings (EBIT) 476 457 4 944 873 8 Depreciation 42 41 2 83 81 2 Amortization and revaluation of purchased debt 477 382 25 979 749 31 Income tax paid -52 -131 -60 -186 -154 21 Changes in factoring receivables -15 -33 -
Slide 17: Balance sheet – Highlights
Balance sheet – Highlights 30 Jun 30 Jun Dev SEK M 2017 2016 % Intangible fixed assets 29 211 3 159 825 - whereof goodwill 25 453 2 860 790 Tangible fixed assets 249 110 126 Financial fixed assets 19 653 7 712 155 - whereof purchased debt 18 748 7 649 145 Current assets 4 582 2 272 102 Non-current a
Slide 18: Funding base
Funding base • Syndicated revolving credit facility EUR 1.1bn ‒ EUR 200 m utilized per 30 Jun 2017 25 000 • Swedish MTN program ‒ SEK 1 bn, 5Y, issued June 2013 (margin of 2,22%) 20 000 ‒ SEK 1 bn, 5Y, issued May 2014 (margin of 1,60%) • Senior Bonds issued June 2017 15 000 ‒ MSEK SEK 3.0bn, 5Y (sti
Slide 19: Agenda
Agenda 1. Q2 Highlights 2. Reported Financials 3. Pro forma Financials Includes full impact of Lindorff but excludes discontinued operations of IJ Norway and Lindorff Sweden, Denmark, Finland, Estonia 4. Future Outlook 5. Appendix 19
Slide 20: Pro Forma - Financial summary
Pro Forma - Financial summary Q2 Q2 Change YTD YTD Change 2017 2016 % 2017 2016 % Revenues,SEK M 3 205 2 565 25 6 133 4 852 26 Cash EBITDA excl NRIs, SEK M 2 037 1 713 19 3 861 3 152 22 EBITDA excl NRIs, SEK M 1 281 1 076 19 2 374 1 912 24 EBIT excl NRIs,SEK M 1 058 941 12 1 988 1 659 20 EBIT excl N
Slide 21: Pro Forma Credit Management Services
Pro Forma Credit Management Services Q2 Q2 Change YTD YTD Change Excl NRI 2017 2016 % 2017 2016 % Revenues, SEK M 2 292 1 823 26 4 445 3 452 29 Service Line Earnings, SEK M 684 602 14 1 269 1 021 24 Service Line Earnings Margin, % 30 33 29 30 Q2 Highlights • Revenue growth mainly driven by nine acqu
Slide 22: Pro Forma Financial Services
Pro Forma Financial Services Q2 Q2 Change YTD YTD Change Excl NRI 2017 2016 % 2017 2016 % Revenues, SEK M 1 462 1 178 24 2 742 2 250 22 Service Line Earnigns, SEK M 755 658 15 1 451 1 256 16 Service Line Earnings Margin, % 52 56 53 56 Investments in PD, SEK M 1 287 934 38 3 809 1 801 111 ROI, % 17 1
Slide 23: Pro Forma Common Costs
Pro Forma Common Costs Q2 Q2 Change YTD YTD Change 2017 2016 % 2017 2016 % Common Costs Excl NRI, SEK M -380 -319 19 -732 -618 18 Q2 Highlights • Year on year increase mainly due to acquired units – underlying cost development relatively unchanged. 23
Slide 24: Q2 2017 NRIs for Pro Forma Financials
Updated Q2 2017 NRIs for Pro Forma Financials Service lines SEK M, excluding discontinued business CMS FS Common Group EBIT including NRIs 676 766 -577 865 Lindorff Transaction NRIs -156 -156 Lindorff Integration NRIs -40 -40 Other NRIs -8 11 -1 2 EBIT excluding NRIs 684 755 -380 1 059 Revaluations
Slide 25: Agenda
Agenda 1. Q2 Highlights 2. Reported Financials 3. Pro Forma Financials 4. Future Outlook 5. Appendix 25
Slide 26: Near-term priorities for 2H 2017
Near-term priorities for 2H 2017 Continue to execute on current business momentum ‒ Organization designed to ensure that integration efforts does not limit our current ‘business as usual’ momentum Swift execution of merger integration priorities ‒ Divestments of remedy units: process well under way
Slide 27: Agenda
Agenda 1. Q2 Highlights 2. Reported Financials 3. Pro Forma Financials 4. H2 2017 Outlook 5. Appendix 27
Slide 28: Pro Forma PD carrying value and growth
Pro Forma PD carrying value and growth PD carrying value: SEK 18 748 M SEK M Book Value growth y-o-y: 31% 20 000 31% 50% 45% 22% 40% 15 000 22% 35% 23% 30% 10 000 23% 25% 20% 15% 5 000 10% 5% 0 0% 2012 2013 2014 2015 2016 YTD Q2 2017 Y o Y comparison 28
Slide 29: Pro Forma PD Investments and ROI
Pro Forma PD Investments and ROI Q2 17 RTM Investments: SEK 6 987 M MSEK 8 000 20% 266 7 000 6 000 15% 5 036 4 979 5 000 FY 3 809 4 000 10% Q4 3 150 2350 Q3 3 000 1287 Q2 2 000 3 785 3 431 3 867 828 5% Q1 537 2522* 1 000 671 934 678 567 0 0% 2012 2013 2014 2015 2016 2017 PD ROI RTM * 1st Credit PD I
Slide 30: Pro forma ERC
Pro forma ERC 40 157 40 000 Combined ERC (SEK millions) 35 140 Cash Multiple (ERC/Current BV) 30 000 as of 30th June 2017 28 558 = 2,14 23 287 20 000 19 027 15 398 12 355 9 682 10 000 7 539 5 772 4 347 3 169 2 156 1 284 572 16 0 30 June 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 203
Slide 31: Proforma PD Collections vs. Active Forecast
Proforma PD Collections vs. Active Forecast 14% 12% 10% 8% 6% 4% 2% 0% Collections vs Active Forcast per Quarter Collections vs Active Forcast R12 *The R12 numbers have been adjusted for the portfolio sales in WEU in Q3 16 and NEU in Q4 16 as well as the sale in Q1 17 31
Slide 32: Pro Forma Gross Cash-on-Cash Multiple
Pro Forma Gross Cash-on-Cash Multiple Vintage Purchase Gross Cash-on- Price Cash Multiple Before 2008 786 2,54 2009 132 2,27 2010 212 2,57 2011 296 2,31 2012 426 2,28 2013 409 2,11 2014 419 2,23 2015 536 2,09 2016 548 2,19 2017 406 1,94 32
Slide 33: Current IR activities planned for 2H 2017
Current IR activities planned for 2H 2017 Quarterly Roadshows Other selected investor events • Q2 17 • Carnegie Small & Mid Cap Seminar, ‒ Stockholm, July 25 Stockholm, September 6 ‒ London, July 26 • Erik Penser Bank Seminarium, ‒ Paris, July 27 Stockholm, September 21 ‒ Frankfurt, July 28 • Swedba
Slide 34: Intrum Justitia - Better business for all
intrum oD justitia Better business for all