Intrum Ab · OMXSTO:INTRUM
Intrum Ab — Intrum Justitia — FY2009 Earnings Presentation
52 slides from Intrum Ab's earnings presentation, Feb 3, 2010
Slide 1: Full-Year Report 2009 January-December
Full-Year Report 2009 January-December F b February 3 3rd 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: Performance 2009: Net result
Performance 2009 Net result SEK 441 M • Unchanged from 2008 3 © Intrum Justitia AB 2010. All rights reserved.
Slide 4: Performance 2009: EBIT
Performance 2009 Reported EBIT SEK 668 M • 4 percent down Adjusted* EBIT SEK 774 M Adjusted • 4 percent growth * Excluding UK restructuring costs and PD revaluation 4 © Intrum Justitia AB 2010. All rights reserved.
Slide 5: Performance 2009: Cash flow from operations
Performance 2009 Cash flow from operations SEK 1 523 M • 21 percent growth 5 © Intrum Justitia AB 2010. All rights reserved.
Slide 6: Performance 2009: Net debt equity
Performance 2009 Net debt equity: 78 percent • Objective < 150 percent 6 © Intrum Justitia AB 2010. All rights reserved.
Slide 7: Performance 2009: New financing package
Performance 2009 New financing package closed for 2010-2012 • EUR 310 M • Possibility to extend the club deal • Possibility to complementary bilateral funding © Intrum Justitia AB 2010. All rights reserved.
Slide 8: Performance 2009: Dividend proposal
Performance 2009 Dividend proposal of SEK 3.75 (3.50) per share © Intrum Justitia AB 2010. All rights reserved.
Slide 9: Performance 2009
Performance 2009 Credit Management Services EBIT excluding UK restructuring cost down 10 percent CMS margin down 3 ppt Purchased debt (PD) ROI 16 percent (17) PD EBIT growth 4 percent PD margin down 5 ppt, ppt whereof revaluations explain 3 ppt PD investments SEK 871 M (872) © Intrum Justitia AB 201
Slide 10: Increased confidence but increased unemployment
Increased confidence but increased unemployment Unemployment rate, % Consumer confidence, % 11 0 -5 5 10 -10 -15 15 9 -20 -25 8 -30 7 -35 Mar-09 Mar-09 Apr-09 Apr-09 Oct-09 Jan-09 Feb-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-09 Feb-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Nov-09 D
Slide 11: 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 11 © Intrum Justitia AB 2010. All rights reserved.
Slide 12: Current status and ambitions going forward
Current status and ambitions g going g forward • Operational excellence Encourage • Growth • Mergers and acquisitions 12 © Intrum Justitia AB 2010. All rights reserved.
Slide 13: Recent actions
Recent actions • Expansion of legal collection • Russia R i – new PD market k t iin 2010 Encourage • Joint venture with Coface – stronger market position in France 13 © Intrum Justitia AB 2010. All rights reserved.
Slide 14: Current status and ambitions going forward
Current status and ambitions g going g forward • Leadership and performance management Adjust • Increase CMS productivity • Sharpen CMS offering 14 © Intrum Justitia AB 2010. All rights reserved.
Slide 15: Recent actions
Recent actions • Revitalized region DACH and Scandinavian Adjust management team • Sales and cost efficiency focus in region DACH 15 © Intrum Justitia AB 2010. All rights reserved.
Slide 16: Current status and ambitions going forward
Current status and ambitions g going g forward • Increased support to and focus on current Turn Around underperforming p g areas 16 © Intrum Justitia AB 2010. All rights reserved.
Slide 17: Recent actions
Recent actions • UK restructuring finalized Turn Around • Intensified improvement p p program g in CEE 17 © Intrum Justitia AB 2010. All rights reserved.
Slide 18: Summary
Summaryy Flat 2009 • A year with a world financial crisis Excellent financial platform 2010 • Encourage PD • Enhance CMS offering • Working hard on CMS productivity © Intrum Justitia AB 2010. All rights reserved.
Slide 19: © Intrum Justitia AB 2010. All rights reserved.
© Intrum Justitia AB 2010. All rights reserved.
Slide 20: Q4 and FY 2009 financial summary
Q4 and FY 2009 financial summaryy Oct - Dec Jan - Dec 2009 2009 Revenues, SEK M: 1,046 (1 020) 4,128 (3 678) Adjusted EBIT*, SEK M: 210 (208) 774 (747) Adjusted EBIT margin %: 20.0 (20.3) 18.6 (20.3) R Reported t d EBIT EBIT, SEK M: M 206 (143) 668 (697) Reported p EBIT margin g %: 19.7 ((14.0)) 16.
Slide 21: Purchased Debt
Purchased Debt 22 percent of total revenues • Q4 ROI is 18.6 percent (19.6) Oct-Dec Oct-Dec Change • Rolling ROI is 15.6 percent (16.6) Reported numbers 2009 2008 % • Investments in Q4(09) ( ) were SEK 211.3 M Revenues, SEKm 247.1 223.3 10.7% EBIT, SEKm 107.0 108.4 -1.3% (205.1), and FY 2009 were SE
Slide 22: Purchased Debt – revaluations
Purchased Debt – revaluations Q4 Q4 FY FY PD revaluations, SEK m 2009 2008 2009 2008 Sweden Norway & Denmark Sweden, -0.4 04 -1.0 10 -0.7 07 -0.9 09 Netherlands & Belgium 0.0 0.0 0.0 0.0 Switzerland, Germany & Austria 0.0 -0.2 2.4 -0.1 France, Spain Portugal & Italy 0.3 -4.5 -30.1 -14.8 Finland, Fi
Slide 23: Purchased Debt, investments
Purchased Debt, investments 2001–2009 SEK M 1 200 996* 1 000 870 872 871 822 800 205 211 600 212 179 996 400 822 870 258 267 201 251 369 200 106 258 201 267 204 106 111 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 * Incl acquisition of Austrian portfolio of written written-off off receivables with
Slide 24: PD ROI – rolling 12 months
PD ROI – rolling g 12 months PD carrying value: SEK 2,312 M ROI 12: 15 15.6% 6% PD carrying value ROI 12 SEK M 20% 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 2006 2007 2008 2009 24 © Intrum Justitia AB 2010. All rights reserved.
Slide 25: Credit Management Services
Credit Management g Services 78 percent of total revenues Oct-Dec Oct-Dec Change • Q4 organic growth is -2% Reported numbers 2009 2008 % (unchanged excl UK) Revenues, SEKm 872.4 877.2 -0.5% EBIT, SEKm 106.5 121.0 -12.0% • General G l impact i t from f macro remains i – EBIT margin % 12.2% 13.8% -1.6
Slide 26: Sweden, Norway & Denmark
Market share Regional development > 25% Sweden Norway & Denmark Sweden, 10–25% 17 percent of total revenues • Improvement journey initiated; Rickard Westlund acting RMD. Oct-Dec Oct-Dec Change Excl. PD Revaluations 2009 2008 % • Breakthrough in Swedish banking sector. Revenues,, SEKm 177.7 175.7 1.1
Slide 27: The Netherlands & Belgium
Market share Regional development > 25% The Netherlands & Belgium < 10% 16 percent of total revenues • Continued market share gains in Q4 on back of strengthening of sales organization Oct-Dec Oct-Dec Change Excl. PD Revaluations 2009 2008 % and the integration of acquired businesses. Revenues, SEKm
Slide 28: Germany, Austria & Switzerland
Market share Regional development > 25% Germany, Austria & Switzerland < 10% 22 percent of total revenues • Reduced R d d CMS revenues from f ageing i PD portfolios. Oct-Dec Oct-Dec Change Excl. PD Revaluations 2009 2008 % • Half of EBIT reduction in Q4 is due to one off Revenues, SEKm 233.6 230.2 1
Slide 29: France, Spain, Portugal & Italy
Regional development Market share France Spain France, Spain, Portugal & Italy 10 25% 10–25% 21 percent of total revenues • Good revenue growth and acquisition is now Oct-Dec Oct-Dec Change consolidated. Excl. PD Revaluations 2009 2008 % Revenues SEKm Revenues, 216 9 216.9 194 6 194.6 11 5% 11.5% •
Slide 30: Finland, Estonia, Latvia & Lithuania
Market share Regional development > 25% Finland Estonia, Finland, Estonia Latvia & Lithuania 10–25% 17 percent of total revenues • Good growth in CMS, particularly in early Oct-Dec Oct-Dec Change part of CMS chain (i.e. payment monitoring) Excl. PD revaluations 2009 2008 % Revenues, SEKm 175.4 163.8
Slide 31: United Kingdom & Ireland
Regional development Market share United Kingdom & Ireland <10% 3 percent of total revenues Oct-Dec Oct-Dec Change • Satisfying outcome of restructuring in region UK & Excl. PD Revaluations 2009 2008 % Ireland. Revenues, SEKm 27.5 55.0 -50.0% EBIT SEKm EBIT, 89 8.9 -85.1 85 1 na n.a • Solid PD profi
Slide 32: Poland, Czech Rep., Slovakia & Hungary
Market share Regional development > 25% Poland Czech Rep Poland, Rep., Slovakia & Hungary 10–25% 5 percent of total revenues • Outcome of cost reductions and efficiency Oct-Dec Oct-Dec Change measures taken in 2009 has not fully lived up Excl. PD Revaluations 2009 2008 % to expectations. Revenues, S
Slide 33: Balance sheet – Highlights
Balance sheet – Highlights g g 31 Dec 31 Dec Dev SEK m 2009 2008 % Total assets 6 624.1 6 741.0 -2% 2% whereof: Goodwill 1 825.3 1 895.9 -4% Total financial fixed assets: 2 506.7 2 580.7 -3% - Purchased P h dDDebt bt 2 311 311.9 9 2 330 330.3 3 -1% 1% Shareholders' equity 2 548.9 2 395.2 6% Net debt
Slide 34: Cash flow statement
Cash flow statement Jan-Dec 2009 Jan-Dec Jan-Dec Dev SEK m 2009 2008 % Operating earnings (EBIT) 668.2 697.3 -4.2% 4.2% Depreciation and goodwill writedown 164.9 182.2 -9.5% Amortization of purchased debt 816.5 653.8 24.9% Income tax paid -124.5 -136.1 -8.5% Changes in working capital 63.4 -48.2 n.a
Slide 35: Revenues and operating margin, rolling 12 months
Revenues and operating p g margin, g rolling g 12 months Revenues: SEK 3,329m Revenues: SEK 4,128 M Margin: 20.5 % Margin: 17.9% 17 9% SEKm 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 2005 2006 2007 2008 2009 35 Excl. disposals,
Slide 36: Capital Markets Day
Capital C it l Markets M k t D Day Save the date date, 1 of June Summit Grev Ture, Stockholm The content of this presentation contains 36 forward looking statements. Such statements are based on our current expecations and are subject to certain risks and uncertainties that could negatively affect o
Slide 37: Q&A
Q&A 37 © Intrum Justitia AB 2010. All rights reserved.
Slide 38: Appendix
Appendix 38 © Intrum Justitia AB 2010. All rights reserved.
Slide 39: 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 40: Intrum Justitia in brief
Intrum Justitia in brief Europe s leading provider of credit Europe’s management services, with operations in 23 markets* R Revenue 2009 FY: FY SEK 4.1 4 1 billion billi 3,300 employees Listed Li t d on NASDAQ OMX OMX, St Stockholm, kh l Mid-Cap Market capitalization, December 31, 2009: SEK 7.2 bill
Slide 41: © Intrum Justitia AB 2010. All rights reserved.
© Intrum Justitia AB 2010. All rights reserved.
Slide 42: 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 -2% -4% -6% 42 © Intrum Justitia AB 2010. All rights reserved.
Slide 43: Carrying Value PD – segmented in acquired year
Carrying y g Value PD – segmented g in acquired q yyear - 2008/2009 represents 50% of carrying value EUR M 250 200 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 43 © Intrum Justitia AB 2010. All rights reserved.
Slide 44: PD – Successful risk allocation although cherry picking
PD – Successful risk allocation although g cherry yppicking g Spain 2% Germany 1% Austria 2% 2009 December Finland 21 countries 14% 1999 47% UK 6 countries Others 34% Germanyy Switzerland 18% 13% Carrying value SEK 175 M Country 9 Sweden 5% 12% Others Country 8 Sweden 6% Austria 8% 2% UK Country 7 7
Slide 45: Accounting for purchased portfolios
Accounting g for p purchased p portfolios Q4 Q4 Full year Full year SEK m 2009 2008 2009 2008 Gross collection 441.2 390.6 1699.4 1410.2 Amortization -203.8 -174.2 -816.5 -653.8 Reported revenues* 247.1 223.3 924.1 783.6 Commission + service line costs -140.1 140 1 -114.9 114 9 -562.2 62 2 -434.3 43
Slide 46: A broad indication going forward
A broad indication g going g forward Carrying value 31 Dec 2009: SEK 2,312 M -1% y-o-y (SEK 2,330 M) Gross collection: Carrying value x 2.25 Cash flow distribution 31 Dec of Gross collection 2009 2008 Y1 26% 23% Y2 19% 17% Y3 14% 14% Y4 11% 11% Y5 8% 8% Y6 6% 7% Y7 5% 5% Y8 3% 4% Y9 2% 3% Amortizati
Slide 47: 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% 60% 50% 92% 92% 40% 84% 72% 69% 63% 67% 62% 30% 56% 58% 49% 52% 54% 50% 52% 49% 20% 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 2006 2007 2008 2009 47
Slide 48: Purchased Debt, carrying value
Purchased Debt, carrying y g value SEK m -1% vs FY 2008 2 500 2 300 2 100 1 900 1 700 1 500 1 300 1 100 900 700 500 300 100 -100 2003 2004 2005 2006 2007 2008 2009 48 © Intrum Justitia AB 2010. All rights reserved.
Slide 49: PD portfolio prices
PD p portfolio p prices Market imperfections: Our pricing model d l iis lless competitive titi on th the ttop PD price/quality PD collection performance Time/ Economic Cycle As on top of an imperfect market: Now: Portfolio prices We acquire more than an average year have bottomed 49 on larger portfo
Slide 50: Net revaluations since 2006
The net revaluations since 2006 add up to EUR -1.1 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 50 © Intrum Justitia AB 2010. All rights reserved.
Slide 51: Organic growth 2003-2009
Organic g g growth 2003-2009 Organic O i growthth % in Q4(09): 1.6% 15 10 Financial target 5 0 ‐5 5 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 51 © Intrum Justitia AB 2010. All rights reserved.
Slide 52: 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 2005 2006 2007 2008 2009 52 *Excluding Goodwill write-downs, restructuring ,disposals © Intrum Justitia AB 2010. All rights reserved.