Slide 1: Q3 2018 presentation
Q3 2018 presentation Axactor SE October 30, 2018
Slide 2: Key highlights Q3 2018
Key highlights Q3 2018 GROSS REVENUE ERC EBITDA CASH EBITDA CASH BALANCE 56.5 EUR MILLION 1.1 EUR BILLION 10.0 EUR MILLION 32.7 EUR MILLION 112.0 EUR MILLION +139% y/y +114% y/y +397% y/y +426% y/y • Continued margin expansion: 21 % EBITDA margin in Q3 2018 • EUR 33m in cash EBITDA, illustrating the
Slide 3: Axactor events post Q3 closing
Axactor events post Q3 closing • Acquisition of 100% of the shares in SPT - providing a servicing platform in the Finnish market • Acquired a significant unsecured portfolio from Bank Norwegian in Finland • Upsized the REO funding facility with Nomura to EUR 119m • Acquisition of a NPL portfolio in
Slide 4: Axactor enters the Finnish market through a scalable platform
Axactor enters the Finnish market through a scalable platform in combination with a major NPL transaction SPT Bank Norwegian Portfolio acquisition Strategic rationale Axactor´s largest NPL acquisition to date Leverage • The portfolio will immediately provide a large paying book Nordic value Geograph
Slide 5: Standardization is used to reduce costs and to drive efficiency
Standardization is used to reduce costs and to drive efficiency Standardization - “One Axactor” Positive effects from “One Axactor” • Intility (IT Infrastructure) • Miratech partnership (AD/AM) IT & SG&A share of cost will continue to 1 • ERP/Finance/HR decrease year over year • Portfolio pricing •
Slide 6: Axactor revenue mix – distribution per country
Axactor revenue mix – distribution per country Gross revenue per quarter (EUR million) 70 66.7 60 56.5 50 41.0 40 34.5 30 Q3 24.9 * 23.6 56.5m 20 10 0 -10 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 ITA SWE GER NOR SPA • 139% growth vs Q3 2017 • Shift from Q2 2018 with increased share for Norway and Germany
Slide 7: Axactor revenue mix – distribution per business segment
Axactor revenue mix – distribution per business segment Gross revenue development per segment (EUR million) 70 66.7 • Q3 2018 y/y growth primarily driven by NPL and REO 60 56.5 portfolios 50 • REO segment continues to grow as share of total 41.0 revenue, accounting for 34% in Q3 2018 40 34.5 30 • 3P
Slide 8: Profitability development – EBITDA and Cash EBITDA
Profitability development – EBITDA and Cash EBITDA EBITDA per quarter (EUR million) Cash EBITDA per quarter (EUR million) 11 10.6 10.0 45 10 40.6 9 40 8 35 32.7 7 30 6.1 6 5.6 25 5 4.1 * 20 18.1 4 15 13.5 3 2.0 10 7.8 * 2 6.2 1 5 0 0 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18
Slide 9: EBITDA and cash EBITDA - quarter by quarter
EBITDA and cash EBITDA - quarter by quarter EBITDA (EUR million) Cash EBITDA (EUR million) +426% 12 +397% 35 32.7 10.0 10 30 8 25 6 20 4 15 2.0 2 10 6.2 0 5 -0.8 0.1 -2 0 Q3-16 Q3-17 Q3-18 Q3-16 Q3-17 Q3-18 • Significant EBITDA growth continues • Strong cash flow development • 21% EBITDA margin • Gr
Slide 10: Gross revenue and ERC - quarter by quarter
Gross revenue and ERC - quarter by quarter Gross revenue (EUR million) ERC (EUR million) +139% +114% 60 56.5 1,200 REOs NPLs 1,125.1 50 1,000 304.2 40 800 30 600 525.8 23.6 18.9 20 400 820.9 11.1 253.2 506.9 10 200 0 0 Q3-16 Q3-17 Q3-18 Q3-16 Q3-17 Q3-18 • 139% growth compared to Q3 2017 • ERC growt
Slide 11: Collection on NPL & REO portfolios versus business case
Collection on NPL & REO portfolios versus business case LTM Performance vs. Business Case 170% • Continued positive trend in NPL collection 152% 143% performance, with 105% LTM performance in 150% 142% Q3 2018 130% 117% 110% • Q3 2018 with continued strong REO 103% 105% 105% performance 90% 100% 101
Slide 12: Portfolio statistics NPL (excluding REOs)
Portfolio statistics NPL (excluding REOs) Historical development ERC (EUR million) ERC per year (EUR million) 900 140 130 820.9 126 800 726.2 729.0 120 700 633.0 100 94 600 492.6 506.9 500 80 70 62 400 60 54 48 300 43 40 38 34 30 27 200 25 22 19 100 20 0 0 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Y1 Y2 Y
Slide 13: Portfolio statistics NPL (excluding REOs)
Portfolio statistics NPL (excluding REOs) Book value portfolios (EUR million) Capex (EUR million) 450 90 87.0 419.1 400 80 354.0 358.5 70 68.7 350 317.1 300 60 250 233.4 237.9 50 46.2 46.8 200 40 150 30 100 20 17.5 50 10 6.6 0 0 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 -10 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q
Slide 14: Portfolio statistics REOs
Portfolio statistics REOs Historical development ERC (EUR million) ERC per year (EUR million) 350 200 183 304.2 300 274.3 249.7 150 250 225.3 200 100 93 150 100 50 50 22 18.2 18.9 7 0 0 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 Y12 Y13 Y14 Y15 SPA SPA • Growth due to new
Slide 15: Portfolio statistics REOs
Portfolio statistics REOs Book value portfolios (EUR million) Capex (EUR million) 220 212.6 150 147.0 200 192.7 180.5 180 160 154.1 140 100 120 100 80 50 44.7 43.8 60 40 20 8.1 8.4 8.1 5.2 0.4 0 0 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 SPA SPA • REO portfolios accoun
Slide 16: REO portfolios lifetime KPIs
REO portfolios lifetime KPIs* Actual Business case • Lifetime performance ahead of business case • More than 1,600 units sold • Quicker liquidation 74.3 1 609 • Higher money multiple 1 248 52.2 • More than 500 assets sold in Q3 2018 • Closed re-financing of REO portfolios in Q3 2018 • EUR 88m releas
Slide 17: Q3 income statement
Q3 income statement Income statement Key comments 3Q 3Q LTM 3Q Jan - Dec • Net financial items were negative EUR 7.7m for the EURO thousand 2018 2017 2018 2017 quarter: Income 56,506 23,617 198,702 104,734 Amortization of debt portfolios -7,818 -3,544 -31,175 -14,948 • Interest cost of EUR 7.0m of w
Slide 18: Balance sheet structure
Balance sheet structure Assets Equity & Liabilities 842 842 Cash Other 38 • Portfolio book value is EUR 632m, Intangibles 112 IBD including REOs Other Equity Portfolios 78 • EUR 112m of available cash at end 622 20 622 50 32 of Q3 477 76 25 • Equity ratio of 39% 402 402 299 57 26 75 632 116 23 471 3
Slide 19: Legal Organization September 2018
Legal Organization September 2018 Axactor SE (Sweden) 50% Axactor Incentive AB Axactor Invest 1 S.à r.l. (Sweden) (Luxembourg) 50% Axactor Platform Holding AB Axactor AS Axactor Portfolio Holding AB Axactor Italy Holding S.r.l. Reolux Holding S.à r.l. (Sweden) (Norway) (Sweden) (Italy) 90% Axactor G
Slide 20: Forward flow build-up
Forward flow build-up (EUR million) 19 18 • Significant forward flow contracts signed during 2018 Actual FF investments 16 16 in Germany, Italy, Norway and Sweden Estimated FF investments 15 15 • Extraordinary volumes received from a few clients during Q3 • New signed contracts with start late Q4 20
Slide 21: Axactor funding capacity (estimate)
Axactor funding capacity (estimate) 130 280 • Axactor with approximately EUR 280m in funding capacity at end Q4 2018 • After closing of the BN portfolio (estimated to be 130 end November) • Cash flow from operations within the restricted group 150 more than covers the forward flow commitments (after
Slide 22: Outlook
Outlook • High volume of NPL portfolios for sale • Tendency of increased IRRs on NPL portfolios • Expect continued growth from investments made in NPL and REO portfolios • Solid 3PC pipeline in Spain • Expect further margin expansion over the coming quarters 22
Slide 23: Q3 2018 Summary
Q3 2018 Summary • Margin expansion continues • Portfolio investments of EUR 113m in Q3 2018, with signed forward flow portfolios starting during next two quarters • Closed new funding line for REO portfolios with Nomura, releasing EUR 88m in cash at attractive margin, lowering the interest costs • S
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