Intrum Ab · OMXSTO:INTRUM

Intrum Ab — Intrum Justitia — Q4 2013 Earnings Presentation

25 slides from Intrum Ab's earnings presentation, Feb 5, 2014

  1. Slide 1: Interim report January-December 2013

    Interim report January-December 2013 February 5th 2014 Lars Wollung, CEO Erik Forsberg, CFO

  2. Slide 2: Quarterly highlights

    Quarterly highlights 41% RTM EPS growth EBIT growth (adjusted for currency and debt 18% portfolio revaluations) 2% Growth in operating cash flow 21% Return on purchased debt 266 MSEK investments in purchased debt 2(25) © Intrum Justitia AB 2013. All rights reserved.

  3. Slide 3: Intrum Justitia's cash flow generation model

    Intrum Justitia’s cash flow generation model – a self-reinforcing cycle and a base for reaching our financial targets Clients Clients Clients Financing Clients and Clients and cases CMS cases PD Services Op. cashflow Stable and strong cash flow Our Financial Targets 1. EPS growth to exceed 10% per y

  4. Slide 4: Financial summary

    Financial summary Oct-Dec Oct-Dec Change Jan-Dec Jan-Dec Change 2013 2012 % 2013 2012 % Revenues, MSEK: 1 231 1 054 17 4 566 4 048 13 EBIT, MSEK: 340 230 48 1207 879 37 EBIT margin, %: 28 22 n/a 26 22 n/a EPS growth, %: 37 7 n/a 41 6 n/a Cash flow from operations, MSEK: 664 653 2 2305 1986 16 Invest

  5. Slide 5: Revenues and operating margin, rolling 12 months

    Revenues and operating margin, rolling 12 months Revenues: SEK 4 566 M Operating margin: 26% SEK M % Revenues 4 500 EBIT 4 000 EBIT margin 25 3 500 3 000 2 500 20 2 000 1 500 15 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 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

  6. Slide 6: 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 • Increased PD investments during 2012- Excl. PD Revaluations 2013 2012 % % 2013 drives revenue growth and margin Revenues, SEKm 567 547 4% 3% improvement

  7. Slide 7: Central Europe

    Regional development Market position Central Europe Market leader Top 5 26 percent of total revenues Other Q4 Highlights Oct-Dec Oct-Dec Change Fx Adj Excl. PD Revaluations 2013 2012 % % • Good year-on-year EBIT development, also Revenues, SEKm 315 259 22% 21% when adjusting for one-off effects in Q

  8. Slide 8: Western Europe

    Market position Regional development Market leader Western Europe Top 5 28 percent of total revenues Other Q4 Highlights • Continued stable improvements within both Oct-Dec Oct-Dec Change Fx Adj PD and CMS: PD investments increasing Excl. PD Revaluations 2013 2012 % % Revenues, SEKm 342 296 16% 13%

  9. Slide 9: Credit Management Services

    Credit Management Services 65 percent of total revenues Q4 Highlights • Revenue growth mainly from servicing of Oct-Dec Oct-Dec Change Fx Adj Reported numbers 2013 2012 % % acquired PD portfolios Revenues, SEKm 927 868 7% 6% • Revenue trend from external clients Service line earnings, SEKm 219 222 -

  10. Slide 10: Financial Services

    Financial Services 35 percent of total revenues Q4 Highlights Oct-Dec Oct-Dec Change Fx Adj Reported numbers 2013 2012 % % • Strong revenue and earnings development Revenues, SEKm 495 340 46% 44% following recent years’ increase in PD Service line earnings, SEKm 273 161 70% 68% investment levels Ser

  11. Slide 11: PD ROI – rolling 12 months

    PD ROI – rolling 12 months PD carrying value: SEK 5 411 M ROI RTM, excl. reval: 21% SEK M 5 600 PD carrying value ROI RTM ROI RTM excl. reval 5 200 4 800 20% 4 400 4 000 3 600 15% 3 200 2 800 2 400 10% 2 000 1 600 1 200 5% 800 400 0 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q

  12. Slide 12: Purchased debt, investments

    Purchased debt, investments 2002–2013 SEK M 2 475 2 500 266 2 014 2 000 692 FY 753 Q1 1 500 Q2 597 Q3 299 1 000 1804 Q4 667 500 822 870 996 872 871 1050 920 258 201 267 295 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 12(25) © Intrum Justitia AB 2013. All rights reserved.

  13. Slide 13: Purchased debt – revaluations

    Purchased debt – revaluations Q4 Q4 PD revaluations, SEK m 2013 2012 Northern Europe 6 0 Central Europe -3 -44 Western Europe 4 -4 Total 7 -48 13(25) © Intrum Justitia AB 2013. All rights reserved.

  14. Slide 14: Balance sheet – Highlights

    Balance sheet – Highlights 31 Dec 31 Dec Dev SEK m 2013 2012 % Total assets 10 222 8 475 21 Goodwill 2 542 2 369 7 Total financial fixed assets 5 486 4 155 32 - whereof purchased debt 5 411 4 064 33 Shareholders' equity 3 316 2 986 11 Net debt/ R12 EBITDA* 1.61 1.49 8 14(25) * EBITDA = operating res

  15. Slide 15: Cash flow statement

    Cash flow statement Oct-Dec Oct-Dec Dev Jan-Dec Jan-Dec Dev SEK m 2013 2012 % 2013 2012 % Operating earnings (EBIT) 340 230 48 1207 879 37 Depreciation 40 61 -34 157 187 -16 Amortization and revaluation of purchased debt 341 340 0 1320 1133 17 Income tax paid -26 -21 -24 -111 -145 23 Changes in Fact

  16. Slide 16: Funding base

    Funding base • Syndicated bank loan facility (up to SEK 5bn) Debt Maturity Schedule ‒ SEK 2 bn utilized per December 2013 (SEK million) ‒ Loan facility allows a total financing of up to SEK 8 bn 2500 • Corporate bonds (up to SEK 3 bn under current 2000 MTN program) ‒ SEK 1 bn, 5Y note, issued in Mar

  17. Slide 17: Financial targets

    Financial targets Financial target FY 2013 FY 2012 1. EPS growth to exceed 10% per year 41% 6% 2. Return on PD investments to exceed 15% per year 21% 17% 3. Net Debt/EBITDA should be between 2,0 and 3,0 1.61 1.49 17(25) © Intrum Justitia AB 2013. All rights reserved.

  18. Slide 18: Q&A

    Q&A 18(25) © Intrum Justitia AB 2013. All rights reserved.

  19. Slide 19: Appendix

    Appendix 19(25) © Intrum Justitia AB 2013. All rights reserved.

  20. Slide 20: Intrum Justitia in brief

    Intrum Justitia in brief Europe’s leading provider of credit management services, with operations in 20 countries Revenue 2013: SEK 4.6 billion Avrg nr of employees in Q4 2013: 3 599 Listed on NASDAQ OMX, Stockholm, Large-Cap Market capitalization, Dec 31, 2013: SEK 14.3 billion Intrum Justitia's ma

  21. Slide 21: Indicative Financial illustration

    Indicative Financial illustration Invested amount: 100 SEK M Gross collection 2.05 x invested amount (SEK M) Y1 Y2 Y3 Y4 Y5 Y6-Y10 Y11-Y15 Y1-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 Amortisation ra

  22. Slide 22: Purchased debt, carrying value

    Purchased debt, carrying value SEK M 5 500 5 250 5 000 4 750 4 500 4 250 4 000 3 750 3 500 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 2012 2013 22(25) © Intrum Justitia AB 2013. All rights reserved.

  23. Slide 23: Gross Collections vs. Active Forecast - R12

    Gross Collections vs. Active Forecast - R12 14,00% 12,00% 10,00% 8,00% 6,00% R12 GC/AFC 4,00% 2,00% 0,00% Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q413 -2,00% -4,00% 23(25) © Intrum Justitia AB 2013. All rights reserved.

  24. Slide 24: One-offs vs Forward Flow, as a % of PD Investments

    One-offs vs Forward Flow, as a % of PD Investments 100% 90% 31% 26% 28% 30% 31% 34% 80% 40% 38% 50% 48% 51% 52% 49% 51% 52% 70% 61% 59% 56% 60% 75% 79% 50% 40% 69% 74% 72% 70% 69% 66% 30% 60% 62% 50% 52% 49% 48% 51% 49% 48% 20% 39% 41% 44% 10% Forward flows One-offs 25% 21% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q

  25. Slide 25: A broad indication going forward

    A broad indication going forward Carrying value 31 Dec 2013: SEK 5,411 M +33% y-o-y (SEK 4,064 M) Gross collection: Carrying value x 2.1 Cash flow distribution 31 Dec of Gross collection 2013 2012 Y1 23% 25% Y2 17% 18% Y3 13% 14% Y4 11% 11% Y5 9% 8% Y6 7% 7% Y7 6% 5% Y8 4% 4% Y9 4% 3% 25(25) © Intru

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