Intrum Ab · OMXSTO:INTRUM

Intrum Ab — Intrum Justitia — FY2011 Earnings Presentation

31 slides from Intrum Ab's earnings presentation, Feb 8, 2012

  1. Slide 1: Year-end release January-December 2011

    Year-end release January-December 2011 February 8th 2012

  2. Slide 2: Presented by

    Presented by Lars Wollung CEO and President Erik Forsberg CFO

  3. Slide 3: Quarterly highlights

    Quarterly highlights 4.5% Organic revenue growth 25% EBIT growth (currency adjusted) 10% Dividend growth (Board of Director’s proposal) 19% Growth in PD investments (72% y/y) © Intrum Justitia AB 2011. All rights reserved.

  4. Slide 4: A broad offering in credit management

    A broad offering in credit management 4 © Intrum Justitia AB 2011. All rights reserved.

  5. Slide 5: Debt collection services enable us to deliver high value added services

    Debt collection services enable us to deliver high value added services Payment monitoring Credit policy & Payment risk & collection in decisions reduction client/Intrum name Client sales Efficient payment Financing of credit Financing of credit optimisations methods not in default in default Sustai

  6. Slide 6: Acquisition of Buckaroo B.V.

    Acquisition of Buckaroo B.V. • Dutch payment service provider ‒ 40 employees, 2 500 merchant clients ‒ Revenues of around EUR 5 M at approximately 10% EBIT-margin, estimated for 2011 • Strategic rationale: ‒ Accelerated expansion into e-commerce segment ‒ Combination of traditional Intrum services w

  7. Slide 7: Financials

    Financials

  8. Slide 8: Financial summary

    Financial summary Oct–Dec Oct–Dec FY FY 2011 2010 2011 2010 Revenues, SEK M: 1 042 965 3 950 3 766 EBIT, SEK M: 227.7 181.8 867.6 730.6 EBIT margin, %: 21.8 18.8 22.0 19.4 Organic growth, %: 4.5 -0.2 2.1 -0.8 PD investments: 498 417 1 804 1 050 Net debt to equity, %: 96 85 96 85 Net debt to EBITDAA:

  9. Slide 9: Revenues and operating margin, rolling 12 months

    Revenues and operating margin, rolling 12 months Revenues: SEK 3 950 M Operating margin: 22.0% SEK M Revenues 4 000 % EBIT 3 500 EBIT margin 20 3 000 2 500 2 000 15 1 500 1 000 500 0 10 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2005 2006 2007 2008 2009 2010

  10. Slide 10: Northern Europe

    Regional development Market position Market leader Northern Europe Top 5 46 percent of total revenues Q4 Highlights Oct-Dec Oct-Dec Change Fx Adj Excl. PD Revaluations 2011 2010 % % • Strong regional growth, driven mainly by Revenues, SEKm 478.2 373.8 27.9% 29.3% acquisitions EBIT, SEKm 107.9 77.0 4

  11. Slide 11: Central Europe

    Regional development Market position Central Europe Market leader Top 5 24 percent of total revenues Other Oct-Dec Oct-Dec Change Fx Adj Q4 Highlights Excl. PD Revaluations 2011 2010 % % • Good growth driven by strong performance Revenues, SEKm 250.4 232.1 7.9% 6.0% in Eastern European countries EBI

  12. Slide 12: Western Europe

    Market position Regional development Market leader Western Europe Top 5 30 percent of total revenues Other Q4 Highlights Oct-Dec Oct-Dec Change Fx Adj • Challenging macro in some countries, Excl. PD Revaluations 2011 2010 % % impacting revenues Revenues, SEKm 320.4 354.1 -9.5% -8.3% • Solid EBIT dev

  13. Slide 13: Credit Management Services

    Credit Management Services 71 percent of total revenues Oct-Dec Oct-Dec Change Fx Adj Q4 Highlights Reported numbers 2011 2010 % % • Stable revenue and EBIT development Revenues, SEKm 867.7 829.5 4.6% 6.9% • Investments in legal activities EBIT, SEKm 137,2 121.1 13.3% 12.5% strengthens longer-term c

  14. Slide 14: Purchased Debt

    Purchased Debt 29 percent of total revenues Q4 Highlights • Total investments amounted to SEK 498 M (417), up 19% Oct-Dec Oct-Dec Change Fx Adj Reported numbers 2011 2010 % % • Strong EBIT-margin improvement despite Revenues, SEKm 298.0 236.5 26.0% 27.4% negative YoY impact from revaluation EBIT, SE

  15. Slide 15: Purchased Debt – revaluations

    Purchased Debt – revaluations Q4 Q4 FY FY PD revaluations, SEK m 2011 2010 2011 2010 Northern Europe 0.6 4.9 18.0 11.0 Central Europe 0.0 3.1 7.3 -1.9 Western Europe -7.2 -2.6 -6.5 -5.9 Total -6.6 5.4 18.8 3.2 15 © Intrum Justitia AB 2011. All rights reserved.

  16. Slide 16: PD ROI – rolling 12 months

    PD ROI – rolling 12 months PD carrying value: SEK 3 229 M ROI 12: 19.5% SEK M PD carrying value ROI 12 3 200 20% 2 800 2 400 15% 2 000 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 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2006 2007 2008 2009 2010 2011 16 © Intrum Justitia AB 2011. A

  17. Slide 17: Purchased Debt, investments 2002–2011

    Purchased Debt, investments 2002–2011 SEK M 1 804 2 000 1 500 498 996 872 871 1 050 822 870 1 000 660 417 500 258 201 267 870 996 872 871 263 276 822 258 267 198 370 0 201 171 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 17 © Intrum Justitia AB 2011. All rights reserved.

  18. Slide 18: Balance sheet – Highlights

    Balance sheet – Highlights 30 Dec 30 Dec Dev SEK m 2011 2010 % Total assets 7 907 7 115 11,1 Goodwill 2 204 2 153 2,4 Total financial fixed assets 3 344 2 519 32,8 - whereof Purchased Debt 3 229 2 373 36,0 Shareholders' equity 2 813 2 577 9,2 Net debt/equity ratio, % 96 85 - 18 © Intrum Justitia AB

  19. Slide 19: Cash flow statement

    Cash flow statement Jan-Dec 2011 Jan-Dec Jan-Dec Dev SEK m 2011 2010 % Operating earnings (EBIT) 868 731 18.8 Depreciation 173 171 1.1 Amortization of purchased debt 888 800 11.0 Income tax paid -177 -105 -68.4 Changes in working capital 84 104 -19.4 Financial Net & and other non-cash items -68 -72

  20. Slide 20: Q&A

    Q&A 20 © Intrum Justitia AB 2011. All rights reserved.

  21. Slide 21: Appendix

    Appendix 21 © Intrum Justitia AB 2011. All rights reserved.

  22. Slide 22: Intrum Justitia in brief

    Intrum Justitia in brief Europe’s leading provider of credit management services, with operations in 20 countries Revenue 2011 FY: SEK 4.0 billion Avrg nr of employees in Q4 2011: 3 314 Listed on NASDAQ OMX, Stockholm, Mid-Cap Market capitalization, December 30, 2011: SEK 8.6 billion Intrum Justitia

  23. Slide 23: Purchased Debt – An illustrative financial example

    SEK Purchased Debt Gross collection - An illustrative financial example Revenue Amortizations Time Invested amount: 100 SEK M Gross collection 2.25 x invested amount (SEK M) Y1 Y2 Y3 Y4 Y5 Y6-Y10 Y10-Y15 Y1-Y15 Cash-flow distribution 19% 24% 16% 9% 8% 19% 5% 100% Gross collection 43 54 36 20 18 43 1

  24. Slide 24: Purchased Debt, carrying value

    Purchased Debt, carrying value SEK M 3 250 3 000 2 750 2 500 2 250 2 000 1 750 1 500 1 250 1 000 750 500 250 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 24 © Intrum Justitia AB 2011. All rights reserved.

  25. Slide 25: Organic growth revenue 2005-2011

    Organic % growth revenue 2005-2011 Organic growth in Q4(11): 4.5% 15 10 5 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 -5 2005 2006 2007 2008 2009 2010 2011 25 © Intrum Justitia AB 2011. All rights reserved.

  26. Slide 26: EBIT Margin Y-o-Y

    EBIT* Margin Y-o-Y Ppt 6 5 4 3 2 1 0 -1 -2 -3 -4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2005 2006 2007 2008 2009 2010 2011 26 Excl. UK downsizing in 2009 and goodwill write-down in 2008 © Intrum Justitia AB 2011. All rights reserved.

  27. Slide 27: Gross collections versus active forecast

    Gross collections versus active forecast 12% 10% 8% 6% 4% 2% 0% Q107 Q207 Q307 Q407 Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 -2% © Intrum Justitia AB 2011. All rights reserved.

  28. Slide 28: One-offs vs Forward Flow, as a % of PD Investments

    One-offs vs Forward Flow, as a % of PD Investments 100% 8% 90% 28% 31% 31% 26% 33% 38% 80% 44% 42% 40% 48% 46% 50% 48% 51% 49% 52% 56% 70% 61% 59% 60% 50% 92% 40% 72% 69% 69% 74% 67% 62% 30% 56% 58% 60% 52% 54% 50% 52% 49% 51% 48% 44% 20% 39% 41% 10% Forward flows One-offs 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

  29. Slide 29: Revaluation pattern in KSEK

    Revaluation pattern in KSEK 20,000 15,000 10,000 5,000 0 Q107 Q207 Q307 Q407 Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 -5,000 -10,000 -15,000 -20,000 © Intrum Justitia AB 2011. All rights reserved.

  30. Slide 30: A broad indication going forward

    A broad indication going forward Carrying value 31 December 2011: SEK 3,229 M +36% y-o-y (SEK 2,373 M) Gross collection: Carrying value x 2.25 Cash flow distribution 30 Dec of Gross collection 2011 2010 Y1 25% 26% Y2 18% 19% Y3 13% 13% Y4 10% 10% Y5 8% 8% Y6 6% 6% Y7 5% 5% Y8 4% 4% Y9 3% 3% Amortiza

  31. Slide 31: Carrying Value PD – segmented in acquired year

    Carrying Carrying Value Value – segmented PDPD – segmented in acquired in acquired year year 400 350 2011 300 2010 2009 250 2008 2007 EUR M 200 2006 2005 150 2004 <2004 100 50 0 Q107 Q207 Q307 Q407 Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 31 © Intrum Justitia A

Intrum Justitia — FY2011 Earnings Presentation on 6ix