Slide 1: Presentation Q2 2023
AXACTOR Presentation Q2 2023
Slide 2: Q2 highlights
Q2 highlights Financial update Outlook Q&A
Slide 3: Financial highlights for the quarter on continuing operations
Financial highlights for the quarter on continuing operations Gross revenue growth of 5% y-o-y • 8% y-o-y with constant currency Cash EBITDA growth of 4% y-o-y • 6% y-o-y with constant currency Healthy EBITDA margin of 50% • EBITDA of EUR 33m, up from EUR 30m last year Double digit annualized return
Slide 4: Going forward we will stick to our successful strategy developed in 2020
Going forward we will stick to our successful strategy developed in 2020 1 Accretive investments • Invest in accretive portfolios with attractive gross IRR driving margin expansion on NPL • Target of reaching total backbook Gross IRR above 20%. Currently experiencing Gross IRR of 30+% on newly signe
Slide 5: Axactor has had a healthy growth of 20% in ERC since year-end 2021
Axactor has had a healthy growth of 20% in ERC since year-end 2021 NPL ERC and company acquisitions (EUR billion) +20% -1% 2.5 2.5 2.6 2.4 2.3 2.3 2.2 2.2 2.2 2.2 2.1 2.1 2.1 2.0 2.1 1.9 1.7 1.4 1.5 0.8 0.6 0.7 0.7 0.4 0.5 0.5 0.3 0.3 0.1 0.0 0.1 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Slide 6: NPL gross IRR on the total book is steadily increasing
NPL gross IRR on the total book is steadily increasing - Currently signing deals with a gross IRR twice as high as the total NPL book Signed Dec. Total NPL book ’22 or later Gross IRR 35% 34.5% 30% 25% +1.9pp 20% 17.7% 15.8% 16.7% 0% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Recent ’21 ’21 ’21 ’22 ’22 ’22 ’22 ’23
Slide 7: NPL investment estimate of EUR 100 - 150m for the year
NPL investment estimate of EUR 100 - 150m for the year NPL investments (EUR million) 449 450 398 400 NPL investment estimate of EUR 100 - 150m 350 for the year 300 288 • Invested EUR 40m during the quarter and EUR 250 198 208 73m YTD 200 150 Estimate 2023 • Additional EUR 20m in committed NPL 114 in
Slide 8: NPL cost-to-collect stabilizing at a record low level
NPL cost-to-collect stabilizing at a record low level - Materializing in an EBITDA percentage among the best in the industry Axactor NPL cost-to-collect per year1 59% 48% 45% 44% 43% 39% 38% ’17 ’18 ’19 ’20 ’21 ’22 ’23 YTD 8 1) Cost is calculated as segment OPEX + allocation of unallocated OPEX and
Slide 9: Financial update
Q2 highlights Financial update Outlook Q&A
Slide 10: Group: Continued growth on gross revenue y-o-y
Group: Continued growth on gross revenue y-o-y Gross revenue (EUR million) +5% +5% 89 91 87 83 82 83 13 79 78 15 15 13 70 13 13 13 • Gross revenue is up 5% y-o-y 14 11 • NPL gross revenue growth of 8% y-o-y • 3PC gross revenue growth of -10% y-o-y 73 74 78 70 64 65 69 70 59 • Estimated gross revenue
Slide 11: NPL segment: Steady total income growth with stable margins
NPL segment: Steady total income growth with stable margins NPL Total income and CM% (EUR million, and %) NPL Total income CM % +13% +13% Satisfying growth in total income of 13% y-o-y, 52 with stable margins, despite headwind. 48 49 44 46 46 41 28 79% 78% 76% 77% 75% 76% 76% Collection performance
Slide 12: 3PC segment: Total income and margins under pressure
3PC segment: Total income and margins under pressure 3PC Total income and CM% (EUR million and %) -10% +13% 15 15 14 13 13 13 13 13 • 3PC total income growth of -10% y-o-y 11 • Competition puts pressure on both total income and contribution margin 47% 37% 41% 41% 34% 35% 33% 30% 31% • Axactor is cur
Slide 13: Group: Growth y-o-y in all key parameters despite headwind on currency and macro
Group: Growth y-o-y in all key parameters despite headwind on currency and macro Total income EBITDA and EBITDA-margin Cash EBITDA (EUR million) (EUR million and %) (EUR million) +8% 50% 51% +13% 47% 48% 49% 49%50% 63 65 +4% 60 62 33% +5% 59 31 33 57 30 30 30 60 54 28 58 58 25 55 54 49 51 49 44 39 1
Slide 14: RCF refinanced according to the plan in Q2. Expect to refinance ACR02 in Q3
RCF refinanced according to the plan in Q2. Expect to refinance ACR02 in Q3 according to the plan Facility Facility Current type size1 draw2 Maturity profile Refinancing Bond On- • The plan is to refinance ACR02 in Q3. EUR 200m 156m ACR02 going 44m already repurchased • The RCF was renewed according
Slide 15: Stable ROE of 10% on continuing operations last twelve months
Stable ROE of 10% on continuing operations last twelve months – despite increased cost of funding Return on equity to shareholders (%) 10% Continuing operations 9% 1% 6% 9% ROE to shareholders 1% 2% -6% -6% -9% 2016 2017 2018 2019 2020 2021 2022 LTM 15
Slide 16: Outlook
Q2 highlights Financial update Outlook Q&A
Slide 17: Outlook
Outlook Key driver Outlook Accretive investments + • Highly accretive gross IRR on new deals of 30+% compared to the backbook of 18% • NPL: Minimum 10% growth in interest income in 20231 Growth + • 3PC: Competition puts pressure on both total income and contribution margin • Interest rate hedge secu
Slide 18: Q&A
Q2 highlights Financial update Outlook Q&A
Slide 19: Supporting information
Supporting information
Slide 20: NPL investment commitments of EUR 26m next 12 months
NPL investment commitments of EUR 26m next 12 months Quarterly NPL investments (EUR million) 93 80 69 54 Additional forward 47 flow agreements and 40 one-off acquisitions 32 33 expected to further increase NPL investments 12 15 6 4 2 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 ’21 ’21 ’21 ’22 ’22 ’22 ’22
Slide 21: ERC increasing by 12% y-o-y driven by increased NPL investments in 2022
ERC increasing by 12% y-o-y driven by increased NPL investments in 2022 ERC development Forward ERC profile by year (EUR million) (EUR million) +12% 2,545 2,523 2,563 312 2,367 297 2,259 2,279 273 2,119 2,130 2,141 245 214 188 169 154 140 128 116 97 86 76 68 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Y1 Y2 Y3 Y4 Y5
Slide 22: 3PC volumes by geographic region
3PC volumes by geographic region 3PC Total income split by geographic region 4% 1% 15% Q2’23 • Spain accounting for 49% of total income on 3PC Total income EUR 13.1m 20% 49% • Italy share of Total income increased to 20% (15%) following organic growth in Italy 11% FIN DEU ITA NOR ESP SWE 22
Slide 23: Discontinued operations
Discontinued operations - REO book value reduced to EUR 5m ultimo Q2 REO Total income and net profit1 REO book value REO number of units (EUR million and %) (EUR million) Total Income Net profit 12 51 1,908 1,640 42 8 8 1,322 5 1,106 4 27 3 946 2 835 2 21 1 711 695 16 13 516 -3 -2 -2 -2 -3 -2 -1 8 -
Slide 24: Bond covenants (1/2)
Bond covenants (1/2) Loan-to-value - covenant ≤75% Secured Loan-to-value - covenant ≤65% (Total portfolio book value divided by net interest-bearing debt) (Total portfolio book value divided by secured net interest-bearing debt) 75% 65% 73% 73% 73% 72% 72% 72% 72% 69% 69% 39% 39% 37% 38% 35% 33% 30%
Slide 25: Bond covenants (2/2)
Bond covenants (2/2) Leverage ratio - covenant ≤4.0x Interest coverage ratio - covenant ≥4.0x (Net interest-bearing debt divided by LTM Pro-forma adjusted cash EBITDA (Pro-forma adjusted cash EBITDA divided by net interest expenses) 4.0 3.8 5.3 5.4 3.8 5.2 5.2 5.2 5.2 5.0 3.7 3.6 3.6 4.6 3.5 4.2 3.4
Slide 26: Terms and abbreviations
Terms and abbreviations Abbreviations 3PC Third-party collection AGM Annual general meeting APM Alternative performance measures ARM Accounts receivable management B2B Business to business Terms B2C Business to consumer Active forecast Forecast of estimated remaining collection on NPL portfolios BoD
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