Intrum Ab · OMXSTO:INTRUM
Intrum Ab — Intrum Justitia — Q1 2010 Earnings Presentation
38 slides from Intrum Ab's earnings presentation, Apr 22, 2010
Slide 1: Interim report January-March 2010
Interim report January-March 2010 A il 22nd April 22 d 2010 © Intrum Justitia AB 2010. All rights reserved.
Slide 2: Presented by
Presented by y Lars Wollung CEO and President Bengt Lejdström CFO © Intrum Justitia AB 2010. All rights reserved.
Slide 3: Highlights Q1 2010
Highlights g g Q1 2010 • Fx adjusted operating earnings up 9% and revenues up 2% • Solid financial platform & increased cash flow – Net debt to equity q y ratio of 65% ((91)) – Cash flow from operations increased with 56% • Strong S performance f in i Purchased P h d Debt D b – ROI up 4.3 ppt to 15.
Slide 4: Regional highlights Q1 2010
Regional g highlights g g Q1 2010 • Good p performance in region g UK & Ireland,, Benelux and Southern Region • Early signs of improvement effects – Scandinavia, EBIT up 8% fx adjusted – Region Switzerland, Germany & Austria down 5%, fx adjusted, but 13% higher than the seasonally stronger Q4 last y
Slide 5: Growth drivers
Growth drivers Service offering expansion Acquisitions - CMS companies i - Clients CMS units Purchased P h d debt d bt - Own investments - Investment partnerships Information superiority & operational p excellence 5 © Intrum Justitia AB 2010. All rights reserved.
Slide 6: Q1 2010 financial summary
Q1 2010 financial summaryy Jan–Mar Jan–Mar Rolling 12 2010 2009 2009-2010 Revenues, SEK M: 955 1,008 4,075 EBIT, SEK M: 157 156 738 EBIT margin, margin %: 16 4 16.4 15 5 15.5 18 1 18.1 Organic growth, %: 1.4 4.8 PD investments: 171 111 931 Net debt to equity: y 65 91 6 © Intrum Justitia AB 2010. All
Slide 7: © Intrum Justitia AB 2010. All rights reserved.
© Intrum Justitia AB 2010. All rights reserved.
Slide 8: Purchased Debt
Purchased Debt 21 percent of total revenues • Q1 ROI is 15.7% (11.4) Jan-Mar Jan-Mar Change FX Adj Reported numbers 2010 2009 % % • Rolling ROI is 16.8% (16.1) Revenues, SEKm 217.0 189.5 14.5% 26.1% EBIT SEKm EBIT, 88 2 88.2 65 5 34.7% 65.5 34 7% 55 5% 55.5% • Investments in Q1 were SEK 170.8 M (110
Slide 9: Purchased Debt – revaluations
Purchased Debt – revaluations Q1 Q1 FY FY PD revaluations, SEK M 2010 2009 2009 2008 Sweden, Norway & Denmark 0.0 0.0 -0.7 -0.9 Netherlands & Belgium 0.0 0.0 0.0 0.0 Germany , Austria & Switzerland 0.0 2.4 2.4 -0.1 France, Spain Portugal & Italy 0.0 -26.2 -30.1 -14.8 Finland Estonia, Finland, Estoni
Slide 10: Purchased Debt, investments 2001–2010
Purchased Debt, investments 2001–2010 SEK M 1,200 996* 870 872 871 1 000 1,000 822 800 205 211 600 212 179 258 267 996 400 822 870 201 251 106 369 171 200 258 201 267 204 171 0 106 111 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 * Incl acquisition of Austrian portfolio of written-off receivabl
Slide 11: PD ROI – rolling 12 months
PD ROI – rolling g 12 months PD carrying value: SEK 2,170 M ROI 12: 16.8% PD carrying value ROI 12 SEK M 20% 2 400 2,400 2,000 15% 1 600 1,600 10% 1,200 800 % 5% 400 0 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2006 2007 2008 2009 2010 11 © Intrum Justitia AB 2010. All rights reserved.
Slide 12: Credit Management Services
Credit Management g Services 79 percent of total revenues • Organic growth is 0% Jan-Mar Jan-Mar Change FX Adj • Increased activities to maintain high Reported numbers 2010 2009 % % collection ll ti performance f Revenues SEK M Revenues, 823 7 823.7 900 3 -8.5% 900.3 -8 5% -1 4% -1.4% EBIT, SEK M 10
Slide 13: Sweden, Norway & Denmark
Market share Regional development > 25% Sweden Norway & Denmark Sweden, 10–25% 19 percent of total revenues Jan-Mar Jan-Mar Change FX Adj • Improvement journey on its way – but still in Excl. PD early stage Revaluations 2010 2009 % % Revenues SEK M Revenues, 181.3 181 3 176.1 176 1 3.0% 3 0% 5.1% 5
Slide 14: The Netherlands & Belgium
Market share Regional development > 25% The Netherlands & Belgium < 10% 16 percent of total revenues Jan-Mar Jan-Mar Change FX Adj • Satisfying sales and EBIT development in Excl. PD CMS and continued market share gains Revaluations 2010 2009 % % Revenues SEK M Revenues, 155.4 155 4 149.3 149 3 4 1%
Slide 15: Germany, Austria & Switzerland
Market share Regional development > 25% Germany Austria & Switzerland Germany, < 10% 23 percent of total revenues Jan-Mar Jan-Mar Change FX Adj • Early signs of effects from improvement Excl. PD programme; quarter on quarter EBIT growth of Revaluations 2010 2009 % % 13% Revenues SEK M Revenues, 217
Slide 16: France, Spain, Portugal & Italy
Regional development Market share France Spain France, Spain, Portugal & Italy 10 25% 10–25% 20 percent of total revenues Jan-Mar Jan-Mar Change FX Adj • Successful start of Coface JV in France Excl. PD • Strong recovery in PD performance, partly due Revaluations 2010 2009 % % Revenues SEK M Revenue
Slide 17: Finland, Estonia, Latvia & Lithuania
Market share Regional development > 25% Finland Estonia, Finland, Estonia Latvia & Lithuania 10–25% 15 percent of total revenues Jan-Mar Jan-Mar Change FX Adj • Good growth in CMS, however still high cost Excl. PD to maintain solid collection Revaluations 2010 2009 % % Revenues SEK M Revenues, 142.4
Slide 18: United Kingdom & Ireland
Regional development Market share United Kingdom & Ireland <10% 3 percent of total revenues Jan-Mar Jan-Mar Change FX Adj • Continued satisfying outcome from restructuring in Excl. PD UK & Ireland Revaluations 2010 2009 % % Revenues, Revenues SEK M 26.7 26 7 55.0 55 0 -51.5% -47.5% • Good G d PD pro
Slide 19: Poland, Czech Rep., Slovakia & Hungary
Market share Regional development > 25% Poland Czech Rep Poland, Rep., Slovakia & Hungary 10–25% 4 percent of total revenues Jan-Mar Jan-Mar Change FX Adj • Expenses in legal services was SEK 6m in Q1 Excl. PD – mainly related to Poland Revaluations 2010 2009 % % Revenues SEK M Revenues, 43 0 43.0 4
Slide 20: Balance sheet – Highlights
Balance sheet – Highlights g g 31 M Mar 31 M Mar D Dev SEK M 2010 2009 % Total assets 6 412 8 6,412.8 6 796 4 6,796.4 -6% 6% Goodwill 1,756.7 1,913.8 -8% Total financial fixed assets 2,363.5 2,508.5 -6% -whereof Purchased Debt 2,169.7 2 246.6 -3% Sh h ld ' equity Shareholders' it 2 610 8 2,610.8 2 5
Slide 21: Cash flow statement
Cash flow statement Jan-Mar 2010 Jan-Mar J M Jan-Mar J M Dev D SEK M 2010 2009 % Operating earnings (EBIT) 157.0 156.4 0.4% Depreciation 43 5 43.5 39 4 39.4 10 4% 10.4% Amortization of purchased debt 202.4 205.3 -1.4% Income tax paid -28.0 -48.8 -42.6% Changes in working capital -19.9 -92.3 -78.4% O
Slide 22: Revenues and operating margin, rolling 12 months
Revenues and operating p g margin, g rolling g 12 months Revenues: SEK 3,329m Revenues: SEK 4 075 M Margin: 20.5 % Margin: 18.1% 18 1% SEK M Revenues EBIT margin 4,000 % 20 3,500 15 3,000 2,500 10 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2005 2006 2007 2008 2009 2010 22 Excl. d
Slide 23: Annika Billberg, new IR & Communications Director
Annika Billberg, Billberg new IR & Communications Director from 1st of June 23 © Intrum Justitia AB 2010. All rights reserved.
Slide 24: Save the date, 1 of June Capital Markets Day
Capital C it l M Markets k t DDay Save the date, date 1 of June Summit Grev Ture, Stockholm The content of this presentation contains 24 forward looking statements. Such statements are based on our current expecations and are subject to certain risks and uncertainties that could negatively affect ou
Slide 25: Q&A
Q&A 25 © Intrum Justitia AB 2010. All rights reserved.
Slide 26: Appendix
Appendix 26 © Intrum Justitia AB 2010. All rights reserved.
Slide 27: Financial objectives
Financial objectives j • Organic growth of 10 percent per year • Generate earnings before tax, at least in line with annual organic growth • Actively seek growth opportunities through selective acquisitions • Achieve an annual return on investment in Purchased Debt of at least 15 percent • Maintain
Slide 28: Intrum Justitia in brief
Intrum Justitia in brief Europe s leading provider of credit Europe’s management services, with operations in 22 countries R Revenue 2009 FY: FY SEK 4.1 4 1 billion billi Avrg nr of employees in Q1: 3 200 Listed Li t d on NASDAQ OMX OMX, St Stockholm, kh l Mid-Cap Market capitalization, March 31, 20
Slide 29: © Intrum Justitia AB 2010. All rights reserved.
© Intrum Justitia AB 2010. All rights reserved.
Slide 30: Gross collections versus active forecast
Gross collections versus active forecast 12% 10% 8% 6% 4% 2% 0% Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407 Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 -2% -4% -6% 30 © Intrum Justitia AB 2010. All rights reserved.
Slide 31: Carrying Value PD – segmented in acquired year
Carrying y g Value PD – segmented g in acquired q yyear - 2008-2010 represents 52% of carrying value 250 EUR M 2010 200 2009 150 2008 100 2007 50 2006 2005 2004 0 <2004 Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407 Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 31 © Intrum Justitia AB 2010. All rights reser
Slide 32: Accounting for purchased portfolios
Accounting g for p purchased p portfolios Q1 Q1 Full year SEK m 2010 2009 2009 Gross collection 409.7 382.5 1 699.4 Amortization -202.4 -205.3 -816.5 Reported p revenues* 217.0 189.5 924.1 Commission + service line costs -128.8 -124.0 -562.2 Operating earnings (EBIT) 88.2 65.5 361.9 EBIT margin, mar
Slide 33: A broad indication going forward
A broad indication g going g forward Carrying value 31 March 2010: SEK 2,170 M -3% y-o-y (SEK 2,247 M) Gross collection: Carrying value x 2.25 Cash flow distribution 31 Mar of Gross collection 2010 2009 Y1 26% 24% Y2 19% 18% Y3 14% 14% Y4 11% 11% Y5 8% 9% Y6 7% 7% Y7 5% 5% Y8 3% 4% Y9 3% 3% Amortiza
Slide 34: Mix of forward flows and one-offs
Mix of forward flows and one-offs 100% 8% 8% 90% 16% 28% 31% 37% 33% 38% 80% 44% 42% 51% 48% 46% 50% 48% 51% 70% 61% 60% 50% 92% 92% 40% 84% 72% 69% 63% 67% 62% 30% 56% 58% 49% 52% 54% 50% 52% 49% 20% 39% 10% Forward f lows One-of f s 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2006 2007 2
Slide 35: Purchased Debt, carrying value
Purchased Debt, carrying y g value -3% yoy SEK M 2,500 2,300 2,100 1,900 1,700 1,500 1 300 1,300 1,100 900 700 500 300 100 -100 2003 2004 2005 2006 2007 2008 2009 2010 35 © Intrum Justitia AB 2010. All rights reserved.
Slide 36: The net revaluations since 2006 add up to EUR -1.1 M
The net revaluations since 2006 add up to EUR -1.1 M 2,000 1,500 1,000 500 0 Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407 Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 ‐500 ‐1,000 ‐1,500 ‐2,000 36 © Intrum Justitia AB 2010. All rights reserved.
Slide 37: Organic growth 2003-2010
Organic g g growth 2003-2010 Organic O i growthth % in Q1(10): 1.4% 15 10 Financial target 5 0 ‐5 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2005 2006 2007 2008 2009 2010 37 © Intrum Justitia AB 2010. All rights reserved.
Slide 38: EBIT Margin Y-o-Y
EBIT* Margin g Y-o-Y Ppt 6 5 4 3 2 1 0 -1 2 -2 -3 -4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2005 2006 2007 2008 2009 38 *Excluding Goodwill write-downs, restructuring ,disposals © Intrum Justitia AB 2010. All rights reserved.