Intrum Ab · OMXSTO:INTRUM

Intrum Ab — Intrum Justitia — Q3 2011 Earnings Presentation

29 slides from Intrum Ab's earnings presentation, Oct 26, 2011

  1. Slide 1: Interim report January-September 2011

    Interim report January-September 2011 October 26th 2011

  2. Slide 2: Presented by Lars Wollung, CEO and President

    Presented by Lars Wollung CEO and President

  3. Slide 3: Key growth highlights Q3 2011

    24.7% Currency adjusted EBIT growth 8.5% Currency adjusted revenue growth 151% Growth of investments in purchased debt 19.1% Return on investments in purchased debt 3.1% Currency adjusted EBIT growth in CMS 3 © Intrum Justitia AB 2011. All rights reserved.

  4. Slide 4: Intrum Justitia

    intrum (~))) justitia

  5. Slide 5: Financial summary

    Financial summary Jul–Sep Jul–Sep Rolling 12 FY 2011 2010 2010-2011 2010 Revenues, SEK M: 998.1 922.9 3 872.8 3 766.0 EBIT, SEK M: 263.6 211.2 821.7 730.6 EBIT margin, %: 26.4 22.9 21.2 19.4 Organic growth, %: 2.9 -2.2 - -0.8 PD investments: 659.7 263.1 1 723.5 1 049.6 Net debt to equity: 103.5 68.2

  6. Slide 6: Revenues and operating margin, rolling 12 months

    Revenues and operating margin, rolling 12 months Revenues: SEK 3 873 M Margin: 21.2% SEK M 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 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2005 2006 2007 2008 2009 2010 2011 6 Excl. disposals, restructuring and

  7. Slide 7: Northern Europe

    Regional development Market position Market leader Northern Europe Top 5 44 percent of total revenues • Very strong performance in the region with Jul-Sep Jul-Sep Change Fx Adj increasing EBIT margin Excl. PD Revaluations 2011 2010 % % Revenues, SEKm 446.7 369.9 20.8% 22.7% • Good EBIT growth both w

  8. Slide 8: Central Europe

    Regional development Market position Central Europe Market leader Top 5 24 percent of total revenues Other • Sourcing opportunities in the region are Jul-Sep Jul-Sep Change Fx Adj improving and paving the way for additional Excl. PD Revaluations 2011 2010 % % growth Revenues, SEKm 234.2 218.4 7.2% 1

  9. Slide 9: Western Europe

    Market position Regional development Market leader Western Europe Top 5 32 percent of total revenues Other Jul-Sep Jul-Sep Change Fx Adj • Continued positive EBIT trend in the region Excl. PD Revaluations 2011 2010 % % Revenues, SEKm 313.5 335.4 -6.5% -4.3% • Improved collection productivity & EBIT,

  10. Slide 10: Credit Management Services

    Credit Management Services 75 percent of total revenues Jul-Sep Jul-Sep Change Fx Adj • Investments in legal activities shows Reported numbers 2011 2010 % % positive results Revenues, SEKm 826.7 806.3 2.5% 2.7% • Further analysis to increase EBIT, SEKm 152.5 145.7 4.7% 3.1% investment activities in

  11. Slide 11: Purchased Debt

    Purchased Debt 25 percent of total revenues • Investments in Q3 were SEK 660 M (263), Jul-Sep Jul-Sep Change Fx Adj • Commerzbank deal successfully executed Reported numbers 2011 2010 % % Revenues, SEKm 272.9 205.1 33.1% 33.9% with revenue recognition as from July. EBIT, SEKm 138.9 85.0 63.4% 66.2%

  12. Slide 12: Purchased Debt – revaluations

    Purchased Debt – revaluations Q3 Q3 9M 9M 12M PD revaluations, SEK m 2011 2010 2011 2010 2010 Northern Europe 2.9 4.2 17.4 6.1 11.0 Central Europe -0.2 -2.0 7.3 -5.0 -1.9 Western Europe 1.0 -3.0 0.7 -3.3 -5.9 Total 3.7 -0.8 25.4 -2.2 3.2 12 © Intrum Justitia AB 2011. All rights reserved.

  13. Slide 13: PD ROI – rolling 12 months

    PD ROI – rolling 12 months PD carrying value: SEK 3 160.1 M ROI 12: 19.8% 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 2006 2007 2008 2009 2010 2011 13 © Intrum Justitia AB 2011. Al

  14. Slide 14: Purchased Debt, investments

    Purchased Debt, investments 2002–2011 SEK M 1 306 1 500 996* 871 1 050 870 872 1 000 822 660 417 500 258 870 996 872 871 263 276 201 267 822 198 370 258 201 267 171 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 * Incl acquisition of Austrian portfolio of written-off receivables with an aggrega

  15. Slide 15: Balance sheet – Highlights

    Balance sheet – Highlights 30 Sep 30 Sep Dev SEK m 2011 2010 % Total assets 7 827.0 6 296.6 24.3 Goodwill 2 245.0 1 697.0 32.3 Total financial fixed assets 3 310.8 2 318.1 42.8 - whereof Purchased Debt 3 160.1 2 138.5 47.8 Shareholders' equity 2 705.4 2 496.9 8.4 Net debt/equity ratio, % 103.5 68.2

  16. Slide 16: Cash flow statement

    Cash flow statement Jan-Sep 2011 Jan-Sep Jan-Sep Dev SEK m 2011 2010 % Operating earnings (EBIT) 639.9 548.8 16.6 Depreciation 128.4 129.6 -0.1 Amortization of purchased debt 633.2 598.8 5.7 Income tax paid -153.6 -109.7 -40.0 Changes in working capital 2.6 11.6 -77.6 Other -58.0 -58.2 0.0 Cash flow

  17. Slide 17: Q&A

    Q&A 17 © Intrum Justitia AB 2011. All rights reserved.

  18. Slide 18: Appendix

    Appendix 18 © Intrum Justitia AB 2011. All rights reserved.

  19. Slide 19: Financial objectives

    Financial objectives • 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 a

  20. Slide 20: Intrum Justitia in brief

    Intrum Justitia in brief Europe’s leading provider of credit management services, with operations in 22 countries Revenue 2010 FY: SEK 3.8 billion Avrg nr of employees in Q3 2011: 3 282 Listed on NASDAQ OMX, Stockholm, Mid-Cap Market capitalization, September 30, 2011: SEK 6.8 billion Intrum Justiti

  21. Slide 21: © Intrum Justitia AB 2011. All rights reserved.

    © Intrum Justitia AB 2011. All rights reserved.

  22. Slide 22: Purchased Debt, carrying value

    Purchased Debt, carrying value SEK M 3 200 3 000 2 800 2 600 2 400 2 200 2 000 1 800 1 600 1 400 1 200 1 000 800 600 400 200 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 22 © Intrum Justitia AB 2011. All rights reserved.

  23. Slide 23: Organic growth revenue 2005-2011

    Organic % growth revenue 2005-2011 Organic growth in Q3(11): 2.9% 15 Financial 10 target 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 -5 2005 2006 2007 2008 2009 2010 2011 23 © Intrum Justitia AB 2011. All rights reserved.

  24. Slide 24: 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 2005 2006 2007 2008 2009 2010 2011 24 *Excluding Goodwill write-downs, restructuring ,disposals © Intrum Justitia AB 2011. All rights reserved.

  25. Slide 25: A broad indication going forward

    A broad indication going forward Carrying value 30 September 2011: SEK 3,160 M 48% y-o-y (SEK 2,139 M) Gross collection: Carrying value x 2.25 Cash flow distribution 31 Sep of Gross collection 2011 2010 Y1 24% 26% Y2 19% 19% Y3 14% 13% Y4 10% 10% Y5 8% 8% Y6 6% 6% Y7 5% 5% Y8 4% 4% Y9 3% 3% Amortiza

  26. Slide 26: Increased share of one-off's in Q3 due to Commerzbank portfolio

    Increased share of one-off’s in Q3 due to the acquisition of a Commerzbank portfolio in Germany. 100% 8% 8% 90% 16% 28% 31% 26% 33% 31% 37% 80% 44% 42% 38% 40% 51% 48% 46% 50% 48% 51% 52% 49% 70% 61% 59% 60% 50% 92% 92% 40% 84% 72% 69% 74% 67% 69% 63% 30% 56% 58% 62% 60% 49% 52% 54% 50% 52% 49% 48%

  27. Slide 27: Q3 revaluations continue the indications from last quarter

    Q3 revaluations continue the indications from last quarter 15,000 10,000 5,000 0 Q106Q206Q306Q406Q107Q207Q307Q407Q108Q208Q308Q408Q109Q209Q309Q409Q110Q210Q310Q410Q111Q211Q311 -5,000 -10,000 -15,000 -20,000 © Intrum Justitia AB 2011. All rights reserved.

  28. Slide 28: Gross collections versus active forecast

    Gross collections versus active forecast 12% 10% 8% 6% 4% 2% 0% Q106Q206Q306Q406Q107Q207Q307Q407Q108Q208Q308Q408Q109Q209Q309Q409 Q110Q210Q310Q410 Q111 Q211 Q311 -2% -4% -6% © Intrum Justitia AB 2011. All rights reserved.

  29. Slide 29: Carrying Value PD – segmented in acquired year

    Carrying Carrying Value Value PDPD – segmented – segmented in acquired in acquired year year 350 300 2011 2010 250 2009 2008 EUR M 200 2007 2006 2005 150 2004 <2004 100 50 0 Q106Q206Q306Q406Q107Q207Q307Q407Q108Q208Q308Q408Q109Q209Q309Q409Q110Q210Q310Q410Q111Q211Q311 29 © Intrum Justitia AB 2011. All

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