Intrum Ab · OMXSTO:INTRUM
Intrum Ab — Intrum Justitia — Q2 2007 Earnings Presentation
21 slides from Intrum Ab's earnings presentation, Jul 26, 2007
Slide 1: Intrum Justitia Group Q2(07)
Intrum Justitia Group January–June 2007 Q2(07) Presented by Michael Wolf, CEO, and Monika Elling, CFO July 26, 2007
Slide 2: Focus on client solutions is key to unlock the market potential
In t r u m J u s t i t i a ’ s C h a n g e J o u r n e y F Focus on client li t solutions l ti is i key k to t unlock l k the th market k t potential t ti l Our aim is to drive the level of outsourcing in Europe by moving from being perceived as debt collection agency to become a client focused orga
Slide 3: We have the broadest geographical coverage…
We have the broadest geographical coverage… coverage Intrum Justitia Justitia’s s Nordic UK DACH Benelux Latin CEE service offering & IE Credit decision Credit information services Payment monitoring & Pre legal collection Debt surveillance Purchased Debt Intrum Justitia geographical coverage 3
Slide 4: … so expanding our market offering would improve our competitive position
… so expanding our market offering would improve our competitive position Intrum Justitia Justitia’s s Nordic UK DACH Benelux Latin CEE service offering & IE Credit decision Credit information services Payment monitoring & Pre legal collection Debt surveillance Purchased Debt Intrum Justitia geograp
Slide 5: Growth by region
Growth by y region g Intrum Justitia Group Q2 11 Q2: 11.3% 3% | YTD: YTD 9.1% 9 1% SE, NO & DK Q2: 6.3% | YTD: 6.7% FI, EE, LV & LT UK & IE Q2: 14.7% | YTD: 13.4% Q2: 2.7% | YTD: –2.3% NL, BE & DE Q2: 5.9% | YTD: 7.2% PL, CZ, SK & HU Q2: 45.2% | YTD: 24.3% FR ES & PT FR, Q2: 15.0% | YTD: 14.8% CH, A
Slide 6: Organic growth has reached a new and higher level
Organic growth has reached a new and higher level UK inflated numbers 20 15 10 5 0 -5 ) ) ) ) ) ) ) ) ) ) ) 02 02 03 03 04 04 05 05 06 06 07 1( 3( 1( 3( 1( 3( 1( 3( 1( 3( 1( Q Q Q Q Q Q Q Q Q Q Q Organic growth, % 6
Slide 7: Q2 2007 – Highlights
Q2 2007 – Highlights g g • Organic growth in Q2 at 11.7% underpinned by strong improvement in Credit Management S Services i reaching hi 6.2% 6 2% • Operating margin 18.8 % an increase of 3 ppt. • EBIT increased with 32.1% to 147.7 MSEK (111.8) • Purchased Debt delivers a return of 18.8% (14.5) 7
Slide 8: Intrum Justitia Group second quarter
Intrum Justitia Group p second quarter q MSEK Q2 2007 Q2 2006 Dev. % Total Revenues 786.9 707.2 11.3 Operating cost, total –639.2 –594.5 7.4 Cost of sales –462.0 –425.4 8.6 Sales & Marketing g –71.7 –64.1 11.9 Administration –105.8 –106.0 – 0.0 Part in associate companies 0.3 0.1 — EBIT 147.7 111.8
Slide 9: Regional development: Sweden, Norway & Denmark
Regional development Sweden Norway & Denmark Sweden, • The Swedish structural reorganization g completed, with positive impact on revenues and earnings Market share g y ahead of • Net cost reductions slightly > 25% Sweden SEK 8M in 2007, gross impact SEK 12M 10–25% Norway & Denmark • New large contr
Slide 10: Regional development: The Netherlands, Belgium & Germany
Regional development The Netherlands, Netherlands Belgium & Germany • Investments to strengthen the Dutch client offering, incl upgrade of processes and increase level of automation is ongoing Market share eg • Beginningg in Q3 the t e number u be of o temporary te po a y staff sta > 25% The Netherl
Slide 11: Regional development: Switzerland, Austria & Italy
Regional development Switzerland Austria & Italy Switzerland, • The regionalisation g in the DACH countries (Germany, Austria and Switzerland) is proceeding within all areas of operations Market share • Good momentum with new clients,, > 25% Switzerland reduced dependency on key clients < 10% Austri
Slide 12: Regional development: France, Spain & Portugal
Regional development France Spain & Portugal France, • The trend of mid-teens revenue growth rate Market share continues 10–25% France, Spain & Portugal • Continued initiatives to improve efficiency and quality of collection Group revenues: 16% 450 Reported Apr–Jun Apr–Jun Change, 400 350 numbers 20
Slide 13: Regional development: Finland, Estonia, Latvia & Lithuania
Regional development Finland Estonia, Finland, Estonia Latvia & Lithuania • Finland continues its development with organic growth above the Group’s target, combined with positive development in EBIT Market share margin > 25% Finland • New market segments are unlocked and 10–25% Estonia, Latvia & Lit
Slide 14: Regional development: United Kingdom & Ireland
Regional development United Kingdom & Ireland • New clients contracts signed, g , compensating p g for closing of old cases and low investment activity in debt purchases Market share g continue with p • The restructuring presently y < 10% United Kingdom SEK 46M in total annual cost reductions and &
Slide 15: Regional development: Poland, Czech Rep., Slovakia & Hungary
Regional development Poland Czech Rep., Poland, Rep Slovakia & Hungary • Q2 is harvesting on back of the start-up start up costs taken in Q1 related to new Purchased debt portfolios. Market share eg o a revenues • Regional e e ues aandd ea earnings gs for o tthe e > 25% Poland, Czech Rep., & Hungary
Slide 16: Credit management services
Credit management g services • Step up in organic growth to 6.2 percent • As about 30 percent of portfolios bought relates to cases that IJ already has in the commission co ss o base bus business ess Group revenues: 83% 3000 Reported Apr–Jun Apr–Jun Change, 2500 numbers 2007 2006 % 2000 1500 Revenue
Slide 17: Purchased Debt
Purchased Debt • PD investments in Q2(07) was SEK 125.2M vs SEK 69.5M in Q2(06), +80.1%. • Net revenue and EBIT impact of revaluation: positive pos t eS SEK 2.0M. 0 • Purchased Debt delivers a return of 18.8% (14.5) Group revenues: 17% • No. of portfolios at end of Q2: 1,390 in a total of 20 countri
Slide 18: Cash flow statement – Q2 and YTD 2007
Cash flow statement – Q2 and YTD 2007 SEK M Q2 Q2 Dev. Jan–Jun Jan–Jun Dev. 2007 2006 % 2007 2006 % Operating earnings (EBIT) 147.7 111.8 32.1 288.7 232.2 24.3 Income tax paid –41.2 –33.5 23.0 –85.5 –72.7 17.6 Changes in working capital 21.6 21.7 –0.5 –6.0 2.2 -172.7 Cash flow from operating 135.1 1
Slide 19: Balance Sheet – Highlights
Balance Sheet – Highlights g g SEK M 30 Jun 30 Jun Dev. Dev 2007 2006 % Total assets 4,724.5 3,966.2 19.1 Goodwill 1,614.4 1,545.6 4.5 Total financial fixed assets 1,444.8 940.2 53.7 where of Purchased Debt 1 362 7 1,362.7 897 9 897.9 51 8 51.8 Shareholders’ equity 1,493.8 1,262.4 18.3 Net debt/equi
Slide 20: Intrum Justitia Group Jan–June
Intrum Justitia Group p Jan–June MSEK YTD 2007 YTD 2006 Dev. % Total Revenues 1,544.7 1,416.5 9.1 Operating cost, total –1,256.5 –1,184.6 6.1 Cost of sales –907.4 –853.9 6.3 Sales & Marketing –140.7 –126.1 11.6 Administration –208.4 –204.6 1.9 Part in associate companies 0.5 0.3 — EBIT 288.7 232.2 2
Slide 21: New financial objectives
New financial objectives P Presented t d att the th CMD iin M May 2007 • Organic growth of 10% per year • Generate pre-tax earnings at least in line with annual organic g g growth • Actively seek out opportunities to grow through selective acquisitions • Achieve an annual return on investments in Pu