Slide 1: Year-end report October - December 2016
Year-end report October - December 2016 January 26th, 2017 Mikael Ericson, CEO Erik Forsberg, CFO
Slide 2: intrum Ww justitia
intrum Ww justitia
Slide 3: Q4 2016 Highlights
Q4 2016 Highlights Strengthening our platform for future profitable growth ‒ Two acquisitions in Spain and Denmark to grow presence in SME segment ‒ First major investment of secured PD portfolio at 600 MSEK ‒ Market entry in the UK through acquisition of 1st Credit, expected to close in Q1-17 Annou
Slide 4: Lindorff transaction update
Lindorff transaction update Background and strategic rationale for planned merger ‒ Creating an industry leader with significant scale and diversification ‒ Excellent strategic fit – cultural heritage, business mix, geographic footprint and sector expertise ‒ Significant financial value creation thr
Slide 5: Financial summary
Financial summary Q4 Q4 Change FY FY Change 2016 2015 % 2016 2015 % Revenues,SEK M 1 719 1 396 23 6 088 5 628 8 EBIT,SEK M * 559 385 45 1 978 1 624 22 EBIT margin, % 33 28 n/a 32 29 n/a EPS growth, % 57 -2 n/a 27 18 n/a Cash flow from operations,SEK M 1 112 878 27 3 374 2 905 16 Investments in purch
Slide 6: Northern Europe
Regional development Market leader Northern Europe Top five 47 percent of total revenues Other Q4 Q4 Change Fx Adj Q4 Highlights Excl. PD Revaluations, Quarter 2016 2015 % % Revenues, SEK M 807 669 21 17 • Underlying revenue growth EBIT, SEK M 318 227 40 36 excluding fx-impact mainly from EBIT margi
Slide 7: Central Europe
Regional development Market leader Central Europe Top five 29 percent of total revenues Other Q4 Q4 Change Fx Adj Q4 Highlights Excl. PD Revaluations, Quarter 2016 2015 % % • Solid underlying revenue and EBIT Revenues, SEK M 514 419 23 16 growth, mainly from PD. EBIT, SEK M 171 128 34 26 EBIT margin
Slide 8: Western Europe
Regional development Market leader Western Europe Top five 24 percent of total revenues Other Q4 Highlights Q4 Q4 Change Fx Adj Excl. PD Revaluations, Quarter 2016 2015 % % • Revenue growth from increased PD Revenues, SEK M 400 344 16 11 investments in several countries and EBIT, SEK M 72 66 9 4 EBI
Slide 9: Credit Management Services
Market leader Credit Management Services Top five 60 percent of total revenues Other Q4 Q4 Change Fx Adj Reported numbers, Quarter 2016 2015 % % Q4 Highlights Revenues, SEK M 1 212 1 160 4 0 • Underlying revenue growth from Service line earnings, SEK M 325 278 17 12 Service line earnings margin, % 2
Slide 10: Financial Services
Market leader Financial Services Top five 40 percent of total revenues Other Q4 Q4 Change Fx Adj Reported numbers, Quarter 2016 2015 % % Q4 Highlights Revenues, SEK M 849 581 46 40 Service line earnings, SEK M 473 328 44 38 • Good increase in underlying service Service line earnings margin, % 56 56
Slide 11: PD Carrying value & growth
PD Carrying value & growth PD carrying value: SEK 8 733 M Book Value growth: 24% SEK M PD carrying value % Growth YoY 9 000 24% 50% 8 000 45% 13% 7 000 40% 15% 33% 35% 6 000 30% 5 000 26% 25% 4 000 36% 20% 3 000 24% -1% 3% 15% 2 000 10% 1 000 5% 0 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 Y o
Slide 12: Purchased Debt, investments & ROI
Purchased Debt, investments & ROI FY 2016 Investments: SEK 3,1bn (2015: SEK 2,4bn) MSEK 3 100 3 500 MSEK 25% 266 2 428 3 000 MSEK 20% 2 500 1 937 1166 FY 2 000 MSEK 15% 1130 Q1 477 646 1 500 10% Q2 2475 267 320 1 000 1804 2014 574 550 Q3 509 5% 500 872 871 1050 738 Q4 619 469 0 0% 2008 2009 2010 201
Slide 13: Purchased Debt - revaluations
Purchased Debt - revaluations Q4 FY Q4 FY PD revaluations, SEK M 2016 2016 2015 2015 Northern Europe -32 -7 -52 -79 Central Europe 7 50 1 69 Western Europe 23 6 15 41 Total -2 49 -36 31 13
Slide 14: Balance sheet – Highlights
Balance sheet – Highlights 31 Dec 31 Dec Dev SEK M 2016 2015 % Intangible fixed assets 3 423 3 098 10 - whereof goodwill 3 120 2 810 11 Tangible fixed assets 104 118 -12 Financial fixed assets 8 777 7 078 24 - whereof purchased debt 8 733 7 027 24 Current assets 2 100 1 851 13 Total assets 14 404 12
Slide 15: Cash flow statement
Cash flow statement Q4 Q4 Dev FY FY Dev SEK M 2016 2015 % 2016 2015 % Operating earnings (EBIT) 559 385 45 1 978 1 624 22 Depreciation 50 42 19 171 164 4 Amortization and revaluation of purchased debt 446 428 4 1 606 1 495 7 Income tax paid -59 -36 64 -257 -229 12 Changes in factoring receivables -1
Slide 16: Funding base
Funding base • Syndicated bank loan facility (up to SEK 7,5bn) ‒ About SEK 1,5 bn utilized per 31 December 2016 Debt Maturity Schedule (SEK million) 4000 • Corporate bonds (up to SEK 5 bn under MTN program) ‒ SEK 1 bn, 5Y note, issued in March 2012 (margin of 3,10%) 3500 ‒ SEK 1 bn, 5Y note, issued
Slide 17: Financial targets
Financial targets Financial targets Q4 16 FY 2016 FY 2015 1. EPS growth to exceed 10% per year 57% 27% 18% 2. Return on PD investments to exceed 15% per year 22% 20% 20% 3. Net Debt/EBITDA should be between 2.0 and 3.0 1.9 1.9 1.8 17
Slide 18: Delivering on our growth journey
Delivering on our growth journey Intrum’s business model Solid market potential provides a sustainable competitive advantage Our financial platform Concrete priorities for supports our growth continued growth journey 18
Slide 19: Concrete priorities for continued growth
Concrete priorities for continued growth GROWTH AREA PRIORITY FY 2016 DELIVERIES • Continued investment growth for our • PD Investments SEK 3,1bn PD core, consumer unsecured portfolios - All Time High • Operational excellence to drive organic growth and margins • Service Line Margin improvement
Slide 20: Q4 2016 & FY 2016 Items Affecting Comparability
Q4 2016 & FY 2016 Items Affecting Comparability Q4 2016 IAC Regions Service lines SEK M NEU CEU WEU Group CMS FS Common Group EBIT Reported (including revaluations) 286 178 95 559 325 473 -239 559 Items Affecting Comparability 55 -9 -7 39 11 70 -42 39 of which, Lindorff transaction related IAC -14 -
Slide 21: Q&A
Q&A intrum mn) justitia
Slide 22: Appendix
Appendix intrum mn) justitia
Slide 23: This is Intrum Justitia
Market leader This is Intrum Justitia Top five Other European market leader in an attractive growth market Proven hybrid business model serving the full credit management value chain Delivering consistent, strong financial returns 2016 2015 Revenue, MSEK 6 088 5 628 Diversification of risk through b
Slide 24: Intrum Way
Intrum Way Objectives, Strategies & Capabilities Stakeholder Objectives Citizen Client Customer Employee Shareholder Better Increased A better life The place The share Business Profibility to be to own for all Core strategies Ensure Establish Ensure Contribute market leading superior credit operatio
Slide 25: Gross Collections vs. Active Forecast - R12
Gross Collections vs. Active Forecast - R12 12% 10% 8% 6% 4% 2% 0% *The R12 numbers have been adjusted for the portfolio sales in WEU in Q3 16 and NEU in Q4 16 25
Slide 26: One-offs vs Forward Flow, as a % of PD Investments
One-offs vs Forward Flow, as a % of PD Investments 100% 13% 12% 90% 18% 19% 26% 28% 25% 31% 31% 30% 29% 30% 33% 32% 34% 80% 40% 38% 50% 48% 51% 52% 49% 51% 52% 50% 49% 49% 70% 59% 56% 61% 75% 60% 79% 50% 87% 88% 40% 82% 81% 74% 72% 75% 69% 69% 70% 71% 70% 67% 68% 66% 30% 60% 62% 50% 52% 49% 48% 51%
Slide 27: A broad indication going forward
A broad indication going forward Carrying value 31 Dec 2016: SEK 8,733 M +24% y-o-y (SEK 7,027 M) Gross collection: Carrying value x 2.0 Cash flow distribution 31 Dec of Gross collection 2016 2015 Y1 20% 22% Y2 17% 17% Y3 13% 13% Y4 10% 10% Y5 9% 8% Y6 7% 7% Y7 7% 6% Y8 5% 5% Y9 4% 4% 27
Slide 28: Illustrative example of PD accounting
Illustrative example of PD accounting Invested amount: 100 SEK M Gross collection 2.05 x invested amount Y11- (SEK M) Y1 Y2 Y3 Y4 Y5 Y6-Y10 Y1-Y15 Y15 Cash-flow distribution 29% 18% 12% 9% 8% 20% 4% 100% Gross collection 60 38 25 19 15 40 8 205 Amortisation * -31 -17 -11 -9 -7 -20 -5 -100 Amortisati
Slide 29: Better business for all
intrum oD justitia Better business for all