Slide 1: Q3 2019
AXACTOR Q3 2019 25 October, 2019
Slide 2: A next-generation debt management company
A next-generation debt management company • Growth strategy built on scalable, lean and efficient debt management operations across six well-established European markets • Focused on debt collection on owned portfolios of non-performing loans (NPL) and third-party debt collection, primarily for bank
Slide 3: Q3 2019 - Key highlights
Q3 2019 - Key highlights Gross revenue EBITDA and margin Cash EBITDA ERC 100 (EUR million) (EUR million and %) (EUR million) (EUR million) +55% 2 070 90 +83% 80 20 +100% +84% 193 70 60 50 1 125 40 10 304 1 877 30 31% 21% 821 20 57 87 10 20 33 60 10 0 0 Q3 2018 Q3 2019 Q3 2018 Q3 2019 Q3 2018 Q3 2019
Slide 4: YTD Q3 2019 - Key highlights
YTD Q3 2019 - Key highlights Gross revenue EBITDA and margin Cash EBITDA ERC ,30 5 ,29 5 (EUR million) (EUR million and %) (EUR million) (EUR million) ,80 ,28 5 +64% 2 070 ,27 5 ,26 5 +101% +156% +84% ,25 5 193 ,70 ,24 5 ,23 5 ,22 5 ,21 5 ,60 ,20 5 ,19 5 ,18 5 ,50 ,17 5 ,16 5 1 125 ,15 5 ,14 5 ,40 ,
Slide 5: Year-on-year improvements and with less seasonality effect
Year-on-year improvements and with less seasonality effect Gross revenue development EBITDA and EBITDA-margin Cash EBITDA (EUR million) (EUR million and %) (EUR million) 36% 91 91 26 31% 87 30% 29% 65 75 22 59 60 67 20 20 21% 20% 57 17% 45 41 41 33 11 10 6 18 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q
Slide 6: Year-on-year revenue growth in all areas
Year-on-year revenue growth in all areas Gross revenue development • Continued YoY revenue growth: (EUR million) • NPL +113% 91 91 • 3PC +1% 87 • REO +7% 75 67 57 • QoQ decline due to slow summer months: 41 • NPL +7% • 3PC -22% • REO -19% Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 NPL p
Slide 7: NPL portfolio
NPL portfolio Q3 2019
Slide 8: NPL q-o-q growth despite seasonal slowdown
NPL q-o-q growth despite seasonal slowdown NPL gross revenue development Actual collection vs. active forecast (EUR million) (LTM, rolling) 54 112% 52 108% 106% 50 100% 101% 101% 95% 40 31 25 21 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q
Slide 9: NPL: Capex mainly into forward flow agreements
NPL: Capex mainly into forward flow agreements Quarterly NPL investments • EUR 68m invested in forward flow in Q3 (EUR million) 329 • Acquired German unsecured portfolio with outstanding balance of EUR 145m across 65,000 claims • EUR 303m invested year to date 149 • Expected capex level in the regio
Slide 10: NPL: Forward flow outlook
NPL: Forward flow outlook Estimated FF investments from signed contracts • Total estimated forward flow volume of EUR (EUR million) 277m in 2019, of which EUR 61m remaining in Q4’19 28 25 27 • Selective approach given upwards trend in IRRs 24 23 22 22 23 • Renegotiating or discontinuing existing con
Slide 11: NPL: Increasing and balanced portfolio
NPL: Increasing and balanced portfolio ERC development Forward ERC profile by year (EUR million) (EUR million) 1 877 2 000 300 1 800 1 721 275 250 238 237 1 473 1 600 1 388 225 1 400 200 193 1 200 175 166 144 131 1 000 150 821 119 800 125 108 99 91 100 83 600 77 70 64 56 75 400 50 200 25 0 0 Q3 2018
Slide 12: 3PC
3PC Q3 2019
Slide 13: Growing the third-party collection business
Growing the third-party collection business Gross revenue 3PC • +1% YoY (EUR million) 18 • Seasonal effects explain decline from previous quarter 16 • Sharpened focus on combined forward flow 16 14 15 and 3PC deals to increase 3PC volumes 13 14 • Product synergies in business origination, collection
Slide 14: REO portfolio
REO portfolio Q3 2019
Slide 15: Maintained high REO revenue on declining asset base
Maintained high REO revenue on declining asset base REO gross revenue development • Revenue up 7% y-o-y on significantly lower asset (EUR million) base 7 388 30 8 000.0 6 703 • Higher unit sales dampened by asset mix and 6 323 moderate price decline 7 000.0 6 161 5 773 • Sold 530 units, down 19% fro
Slide 16: REO ERC of EUR 193m remaining per Q3
REO ERC of EUR 193m remaining per Q3 REO: ERC profile • ERC decreased by 11% in the quarter (EUR million) 100 92 • Expecting to realize almost 50% of remaining Total ERC: 90 81 EUR 193m asset base over the next 12 months 80 70 • REO now represents <10% of Group ERC, 60 and set to decline rapidly 50
Slide 17: IT & Systems
IT & Systems Q3 2019
Slide 18: A unique IT platform designed for scaling up operations
A unique IT platform designed for scaling up operations • Axactor Group Standardization from Day1, Accounts receivable one exception: Core Collections System mgmt. • Taken out legacy with industry standard SW Cloud based BizIntel & Infrastructure • Outsourcing to two strategic partners: Data • Mirat
Slide 19: Financials
Financials Q3 2019
Slide 20: Contribution per segment
Contribution per segment • Total: • Contribution margin of 45% (37%) Contribution per segment* (EUR million) - Excluding unallocated overhead cost • NPL: • Portfolio amortization of EUR 23.1m (7.8), up from 35 35 EUR 18.8m in the previous quarter 31 • Contribution margin of 73% (69%) 4 8 29 5 3 2 1
Slide 21: Net finance, tax and net profits
Net finance, tax and net profits Condensed Income statement (EUR thousand) • Total net financial cost of EUR 11.1m For the quarter end YTD • Interest cost of EUR 13.4 30 Sep 30 Sep 30 Sep 30 Sep • Average blended interest costs of approx. 5% EUR thousand 2019 2018 2019 2018 Full year 2018 EBIT 17 40
Slide 22: Scale and maturity drives efficiency, profitability and ROE
Scale and maturity drives efficiency, profitability and ROE Revenue, EBITDA, Local SG&A, IT & corporate costs • Growth strategy with focus on efficient (LTM) 300 scaling and low collection costs 29.8 % • Continued decline in Opex ratio 250 24.8 % • Improved financing costs and tax rates set to 200 2
Slide 23: Balance sheet structure
Balance sheet structure Assets Equity and Liabilities (EUR million) (EUR million) 1 291 1 291 63 46 34 1 108 82 1 108 71 43 26 82 1 000 1 000 842 842 38 874 112 Cash 20 737 Other 78 Other IB debt 1 112 Intangibles 477 500 500 Equity 929 Portfolios 632 327 328 371 0 0 Q3 2018 YE 2018 Q3 2019 Q3 2018
Slide 24: Current funding structure
Current funding structure* Revolving Credit Facility, EUR 425m + EUR 75m option Option Axactor Invest 1, EUR120m senior debt facility Axactor Invest 1, EUR 140m mezzanine Bond, EUR 200m + EUR 50m tap option Reolux/Nomura REO financing EUR 65m 31.12.2018 31.12.2019 30.12.2020 30.12.2021 30.12.2022 •
Slide 25: Summary and outlook
Summary and outlook Q3 2019
Slide 26: Q3 Summary/Outlook
Q3 Summary/Outlook • Solid NPL performance • Seasonally slower in 3PC and REO • Earnings Before Tax of EUR 6 million • Continuing to drive efficiency and cost improvements through ‘One Axactor’ • Lucrative NPL market in Europe: Axactor targeting FY 2019 capex level in the region of EUR 400 million •
Slide 27: Appendix
Appendix
Slide 28: P&L statement
P&L statement For the quarter end YTD EUR thousand 30 Sep 2019 30 Sep 2018 30 Sep 2019 30 Sep 2018 Full year 2018 Interest income from purchased loan portfolios 35 828 17 781 97 292 52 247 74 536 Net gain/loss purchased loan portfolios -5 089 -385 93 -152 10 599 Other operating revenue 33 523 31 292
Slide 29: Balance sheet statement
Balance sheet statement EUR thousand 30 Sep 2019 30 Sep 2018 31 Dec 2018 EUR thousand 30 Sep 2019 30 Sep 2018 31 Dec 2018 ASSETS EQUITY AND LIABILITIES Intangible non-current assets Equity attributable to equity holders of the parent Intangible Assets 20 098 19 544 19 170 Share Capital 81 338 80 842
Slide 30: Legal organization October 2019
Legal organization October 2019 Axactor SE (Norway) 50% Axactor Incentive AB Axactor Invest 1 S.à r.l.* (Sweden) (Luxembourg) (to be discontinued) 50% Axactor Italy Holding Axactor Platform Holding AB Axactor Portfolio Holding AB S.r.l. Reolux Holding S.à r.l. (Sweden) (Sweden) (Italy) Axactor Finla
Slide 31: axactor.com
axactor.com AXACTOR