Slide 1: Q1 2019 presentation
Q1 2019 presentation Axactor SE April 26, 2019
Slide 2: Q1 2019 - Key highlights
Q1 2019 - Key highlights Gross revenue EBITDA and margin Cash EBITDA ERC (EUR million) (EUR million) 1 717 +121% +72% +225% 244 +263% 30% 1 001 274 1,473 17% 1 473 726 41 91 6 22 18 59 Q1 2018 Q1 2019 Q1 2018 Q1 2019 Q1 2018 Q1 2019 Q1 2018 Q1 2019 NPL REO • Revenue more than doubling and with conti
Slide 3: Attractive European NPL market
Attractive European NPL market • Q1’19 NPL gross revenue of EUR 52.4m (20.9) • NPL contribution margin of EUR 27.1m (10.4) or 77% of net revenue (67%) • Steady flow of new portfolios coming to the market • Attractive opportunities in all Axactor markets • Declining portfolio prices - “Axactor market
Slide 4: The REO sales growing
The REO sales growing REO gross revenue (EUR million) • Q1 REO gross revenue of EUR 24.7m (8.7) • Sales growth of 22% vs Q4’18 - and return to 25 profitability 22 20 • REO contribution margin of EUR 2.8 or 11%, 19 up from EUR -0.8m (-4%) in Q4’18 • Prioritizing margins over sales volumes and expecti
Slide 5: Improved funding
Improved funding • ~EUR 185m in increased funding capacity Axactor Invest 1 funding (EUR million) • EUR 100m accordion option in February • EUR 50m bond tap option in March 350 15 • EUR 15m equity investment and 300 15 20 45 • EUR 20m loan from Geveran to Axactor 30 45 30 Invest 1 in April’19 140 12
Slide 6: Revenue growth and margin improvement
Revenue growth and margin improvement Gross revenue development EBITDA (EUR million) and Cash EBITDA (EUR million) EBITDA-margin (EUR million) 100 30 60 30% 59 90 29% 91 25 50 80 70 75 22 45 20 40 67 21% 41 60 20% 20 57 17% 50 15 30 33 40 41 10 20 30 11 10 18 20 5 6 10 10 0 0 0 Q1 2018 Q2 2018 Q3 20
Slide 7: NPL and REO growth from Q4 to Q1
NPL and REO growth from Q4 to Q1 Gross revenue per segments (EUR million) 100 91 • NPL collection up 32% from Q4’18, driven by large 90 investments in Q4’18 80 75 • REO sales up 22% from Q4’18 70 67 • 3PC with 22% y/y growth 60 57 • Stable ARM business before roll-out to new markets 50 41 40 30 20 1
Slide 8: More balanced geographical footprint
More balanced geographical footprint REO portion set to decline over time REO; 14% REO; 27% ESP; 32% ESP; 30% FIN; 12% Q1-2019 Q1-2019 Gross revenue ERC FIN; 6% EUR 90.7m EUR 1,717m ITA; 10% ITA; 7% NOR; 11% NOR; 13% SWE; 5% SWE; 11% DEU; 10% DEU; 12% 8
Slide 9: NPL portfolio
NPL portfolio AXACTOR
Slide 10: Strong NPL growth – solid collection performance
Strong NPL growth – solid collection performance NPL gross revenue development (EUR million) Actual collection vs. original business case (LTM, rolling) 60 110 % 105 % 105 % 105 % 104 % 50 52 105 % 103 % 101 % 100 % 40 100 % 40 96 % 30 31 95 % 91 % 25 20 90 % 21 10 85 % 0 80 % Q1 2018 Q2 2018 Q3 201
Slide 11: NPL: Investments set to increase through 2019
NPL: Investments set to increase through 2019 Quarterly NPL investments (EUR million) 400 350 329 • CAPEX deployment in several NPL forward 300 flow contracts 250 • Acquired new Spanish NPL portfolio in April: • Outstanding balance of EUR 77m across 22,000 claims 200 150 100 69 69 47 50 17 0 Q1 2018
Slide 12: NPL: Forward flow build-up
NPL: Forward flow build-up Estimated FF from signed contracts (EUR million) 30 27 27 26 25 25 24 24 • Graph illustrates already contracted volumes 23 23 23 23 22 • Additional volumes (on top) from renegotiations/ 20 19 renewals with improved IRRs 15 • Estimated forward flow volume of EUR 286m from s
Slide 13: NPL ERC: Growing and more diversified
NPL ERC: Growing and more diversified ERC development (EUR million) Forward ERC profile by year (EUR million) 1 600 250 1 473 1 388 225 1 400 211 201 200 1 200 175 1 000 151 150 821 132 800 726 729 125 117 105 100 94 600 84 75 75 67 60 400 53 47 50 42 34 200 25 0 0 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1
Slide 14: REO portfolio
REO portfolio AXACTOR
Slide 15: REO sales growth
REO sales growth REO gross revenue development (EUR million) 30 • Q4 issues with notary & stamp costs resolved 25 • First small bulk sale closed in Q1 20 22 • Continued ramp-up of sales expected in Q2 20 19 • Margin prioritized over sales volume 10 9 0 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 15
Slide 16: REO ERC: Protecting margins – flatter sales curve
REO ERC: Protecting margins – flatter sales curve REO ERC per year (EUR million) 140 • REO sales of EUR 24.7m in Q1’19 123 • 555 units at average price of EUR 44k 120 Total REO ERC Q1 2019: • 5,773 units remaining in inventory 100 EUR 244m • Good cash-flow 80 • Remaining ERC lowered by EUR 6m (2.5%)
Slide 17: The REO exposure will be quickly reduced going forward
The REO exposure will be quickly reduced going forward ERC by segment 2000 REO • No new REO portfolio acquisitions 1500 14% • Current REO portfolio to be halved over next 12 months 1000 • Investments in NPL will reduce the share of REO ERC REO 27% further in 2019 500 NPL NPL 73% 86% 0 Q1 2018 Q2 201
Slide 18: 3PC & ARM
3PC & ARM AXACTOR
Slide 19: Growing the platform business
Growing the platform business Gross revenue (EUR million) • 3PC sales up 22% y/y 15 • Collection platforms established in all six markets 3PC ARM 1 • Product synergies in terms of business origination, 12 collection execution and data generation 10 • Customer relationships with leading financial ins
Slide 20: Financials
Financials AXACTOR
Slide 21: Contribution per segment
Contribution per segment Contribution per segment (EUR million) Excluding unallocated overhead cost 40 • NPL: Continued contribution growth 35 • 77% contribution margin of net revenue 30 • REO: Return to profitability 25 • 11% contribution margin in Q1’19 vs. -4% in Q4’18 20 • 3PC: Steady y/y improv
Slide 22: Cost efficiency increasing with scale
Cost efficiency increasing with scale Revenue, Local SG&A, IT and Corporate costs, LTM 300 • One Axactor - Clear strategy with focus on 30 % 250 streamlined organization secures scalable platform 25 % • Standardization reduces costs and improves cross- 200 21 % border cooperation 18 % 17 % • Expect
Slide 23: Net finance, tax and net profits
Net finance, tax and net profits Condensed Income statement Key comments For the quarter end/YTD Full year 2018 • Total net financial cost of EUR 11.9m EUR thousand 31 Mar 2019 31 Mar 2018 EBIT 19,875 4,757 40,298 • Interest cost of EUR 10.9m, of which EUR 1.5m Financial revenue 16 91 453 amortized
Slide 24: Balance sheet structure
Balance sheet structure Assets (EUR million) Equity & Liabilities (EUR million) 1,198 1,198 125 1,108 51 1,108 29 71 43 82 26 82 962 842 929 842 Cash 79 Other 198 Other 787 737 IB debt Intangibles 20 Equity 78 Portfolios 467 547 360 328 296 Q1-19 Q1-18 YE 2018 Q1-19 Q1-18 YE 2018 24
Slide 25: Debt maturity profile
Debt maturity profile Revolving Credit Facility, EUR 300m + EUR 50m accordion Option Axactor Invest 1, EUR 120m senior debt facility Axactor Invest 1, EUR 140m mezzanine Bond, EUR 200m + EUR 50m tap option Reolux/Nomura, EUR 89m outstanding balance 31.12.2018 31.12.2019 30.12.2020 30.12.2021 30.12.2
Slide 26: Summary & Outlook
Summary & Outlook AXACTOR
Slide 27: Q1 Summary
Q1 Summary • Solid financial performance in Q1 • 22% y/y growth in 3PC • Continued strong collection performance • Growth in REO sales and profitability • Improved financial capacity • Continuing to drive efficiency and cost improvement through ‘One Axactor’ • Finland integration on track 27
Slide 28: Outlook
Outlook • Attractive NPL market – increasing IRRs • Increased NPL capex guiding (EUR 400-450m) • Expect continued growth in the 3PC market • Continued profitable growth and margin expansion 28
Slide 29: Klikk for å redigere tittelstil
Klikk for å redigere tittelstil AXACTOR Confidential 29
Slide 30: Appendix
Appendix AXACTOR
Slide 31: P&L statement
P&L statement EUR thousand Interest income from purchased loan portfolios Note 6 For the quarter end/YTD 31 Mar 2019 28,989 31 Mar 2018 17,442 Full year 2018 74,536 Net gain/loss purchased loan portfolios 6 6,371 -1,802 10,599 Other operating revenue 38,289 20,160 121,774 Total Revenue 3,4 73,649 35
Slide 32: Balance sheet statement
Balance sheet statement EUR thousand Note 31 Mar 2019 31 Mar 2018 31 Dec 2018 EUR thousand Note 31 Mar 2019 31 Mar 2018 31 Dec 2018 ASSETS EQUITY AND LIABILITIES Intangible non-current assets Equity attributable to equity holders of the parent Intangible Assets 18,992 18,522 19,170 Share Capital 81,
Slide 33: Legal organization April 2019
Legal organization April 2019 Axactor SE *** (Norway) 50% Axactor Incentive AB (Sweden) Axactor Invest 1 S.à r.l.* (Luxembourg) (to be discontinued) 50% Axactor Italy Holding Axactor Platform Holding AB Axactor AS *** Axactor Portfolio Holding AB S.r.l. Reolux Holding S.à r.l. (Sweden) (Norway) (Swe