Intrum Ab · OMXSTO:INTRUM

Intrum Ab — Intrum Justitia — Q1 2011 Earnings Presentation

32 slides from Intrum Ab's earnings presentation, May 3, 2011

  1. Slide 1: Interim report January-March 2011

    Interim report January-March 2011 May 3rd 2011

  2. Slide 2: Presented by Lars Wollung and Bengt Lejdström

    Presented by Lars Wollung CEO and President Bengt Lejdström CFO

  3. Slide 3: Key growth figures Q1 2011

    18.2% Currency adjusted EBIT growth 5.1% Currency adjusted revenue growth 117% Growth of investments in purchased debt 19.3% Return on investments in purchased debt Currency adjusted revenue growth in CMS with 3.3% stable margins. 12% currency adjusted EBIT growth excl. the Netherlands 3 © Intrum Ju

  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: Intrum Justitia strategy 2011-2015

    Intrum Justitia strategy 2011-2015 - The leading CMS provider in Europe Client Employee Shareholders Society Consumer/debtor Increased The place The share Better business A better life profitability to be to own for all Establish superior Ensure operational Contribute to healthy Ensure market credit

  6. Slide 6: 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

  7. Slide 7: Slide 7

  8. Slide 8: Financial highlights Q1 2011

    Financial highlights Q1 2011 • EBIT margin expansion to 17.8% (16.4%) ‒ Margin of 18.7% excluding loss of SEK -8.1 M from divestment of minority interest ‒ Group EBIT affected by SEK -7.8 M related to costs for integration of acquired companies • Solid financial platform & strong cash flow ‒ Net deb

  9. Slide 9: Financial summary

    Financial summary Jan–Mar Jan–Mar Chg. % Rolling 12 2011 2010 (fx adj) 2010-2011 Revenues, SEK M: 931.8 955.2 5.1% 3 742.6 EBIT, SEK M: 173.8* 157.0 18.2% 747.4* EBIT margin, %: 18.7 16.4 - 20.0 Organic growth, %: 1.4 1.4 - - PD investments: 370 171 144% 1 249 Net debt to equity: 81.7% 68.8% - - 9 *

  10. Slide 10: Revenues and operating margin, rolling 12 months

    Revenues and operating margin, rolling 12 months Revenues: SEK 3,329m Revenues: SEK 3 743 M Margin: 20.5 % Margin: 20.0% 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 2005 2006 2007 2008 2009 2010 2011 10 Excl

  11. Slide 11: Northern Europe

    Regional development Market position Market leader Northern Europe Top 5 44 percent of total revenues Top 10 • Strong performance in the region following Jan-Mar Jan-Mar Change Fx Adj increased volumes in PD & CMS Excl. PD Revaluations 2011 2010 % % • Doubled investment levels in PD portfolios Reven

  12. Slide 12: Central Europe

    Regional development Market position Central Europe Market leader Top 5 22 percent of total revenues Top 10 • Former CEE countries are developing well and according to plan Jan-Mar Jan-Mar Change Fx Adj • Weak start in Germany affecting EBIT Excl. PD Revaluations 2011 2010 % % • Decay on existing PD

  13. Slide 13: Western Europe

    Market position Regional development Market leader Western Europe Top 5 34 percent of total revenues Top 10 • Positive EBIT development following Jan-Mar Jan-Mar Change Fx Adj excellent performance on PD portfolios & Excl. PD Revaluations 2011 2010 % % cost control in CMS Revenues, SEKm 314.8 373.7

  14. Slide 14: Credit Management Services

    Credit Management Services 77 percent of total revenues • Restructuring programs and activities to Jan-Mar Jan-Mar Change Fx Adj push sales show positive effects Reported numbers 2011 2010 % % Revenues, SEKm 786.4 823.7 -4.5% 3.3% • First signs of improvements in the EBIT, SEKm 98.4 105.6 -6,8% -1.7

  15. Slide 15: Purchased Debt

    Purchased Debt 23 percent of total revenues • Investments in Q1 were SEK 370 M (171), a Jan-Mar Jan-Mar Change Fx Adj 117% growth rate Reported numbers 2011 2010 % % Revenues, SEKm 238.1 217,0 9.7% 18.2% • Q1 ROI is 19.3% (15.7%) EBIT, SEKm 117.5 88.2 33.2% 44.0% • Nice Invest Nordic performs well i

  16. Slide 16: Purchased Debt – revaluations

    Purchased Debt – revaluations Q1 Q1 12M 12M PD revaluations, SEK m 2011 2010 2010 2009 Northern Europe 2.4 1.7 11.0 3.3 Central Europe 4.8 -4.1 -1.9 -6.8 Western Europe -1.4 0.0 -5.9 -32.2 Total 5.8 -2.4 3.2 -35.7 16 © Intrum Justitia AB 2011. All rights reserved.

  17. Slide 17: PD ROI – rolling 12 months

    PD ROI – rolling 12 months PD carrying value: SEK 2 503.9 M ROI 12: 18.2% PD carrying value ROI 12 SEK M 20% 2 400 2 000 15% 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 2006 2007 2008 2009 2010 2011 17 © Intrum Justitia AB 2011. All rights reserved.

  18. Slide 18: Purchased Debt, investments 2002–2011

    Purchased Debt, investments 2002–2011 SEK M 1 500 996* 871 1 050 870 872 1 000 822 417 500 258 822 870 996 872 871 263 201 267 198 370 258 201 267 171 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 * Incl acquisition of Austrian portfolio of written-off receivables with an aggregate 18 outstand

  19. Slide 19: Balance sheet – Highlights

    Balance sheet – Highlights 31 Mar 31 Mar Dev SEK m 2011 2010 % Total assets 6,899.2 6,600.6 4.5 Goodwill 2,136.2 1,756.7 21.6 Total financial fixed assets 2,641.8 2,363.4 11.8 -whereof Purchased Debt 2,503.9 2,169.7 15.4 Shareholders' equity 2,705.7 2,610.8 3.6 Net debt/equity ratio, % 81.7 68.8 12.

  20. Slide 20: Cash flow statement

    Cash flow statement Jan-March 2011 Jan-Mar Jan-Mar Dev SEK m 2011 2010 % Operating earnings (EBIT) 165.7 157.0 5.5 Depreciation 42.6 43.5 -2.1 Amortization of purchased debt 196.3 202.4 -2.9 Income tax paid -63.8 -28.0 -56.1 Changes in working capital -9.9 -31.6 219.2 Other -8.1 -16.3 101.2 Cash flo

  21. Slide 21: Q&A

    Q&A 21 © Intrum Justitia AB 2011. All rights reserved.

  22. Slide 22: Appendix

    Appendix 22 © Intrum Justitia AB 2011. All rights reserved.

  23. Slide 23: 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

  24. Slide 24: 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 Q1 2011: 3 169 Listed on NASDAQ OMX, Stockholm, Mid-Cap Market capitalization, March 31, 2011: SEK 7.4 billion Intrum Justitia's

  25. Slide 25: © Intrum Justitia AB 2011. All rights reserved.

    © Intrum Justitia AB 2011. All rights reserved.

  26. Slide 26: Purchased Debt, carrying value

    Purchased Debt, carrying value 5.5% y/y SEK M 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 2010 2011 26 © Intrum Justitia AB 2011. All rights reserved.

  27. Slide 27: Organic growth revenue 2005-2011

    Organic % growth revenue 2005-2011 Organic growth in Q1(11): 1.4% 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 -5 2005 2006 2007 2008 2009 2010 2011 27 © Intrum Justitia AB 2011. All rights reserved.

  28. Slide 28: 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 2005 2006 2007 2008 2009 2010 2011 28 *Excluding Goodwill write-downs, restructuring ,disposals © Intrum Justitia AB 2011. All rights reserved.

  29. Slide 29: A broad indication going forward

    A broad indication going forward Carrying value 31 Mar 2011: SEK 2,504 M 15% y-o-y (SEK 2,170 M) Gross collection: Carrying value x 2.25 Cash flow distribution 31 Mar of Gross collection 2011 2010 Y1 25% 26% Y2 17% 19% Y3 13% 14% Y4 10% 11% Y5 8% 8% Y6 6% 7% Y7 5% 5% Y8 4% 3% Y9 3% 3% Amortization:

  30. Slide 30: Share of new one-offs in total purchases

    In Q1 the share of new One-off’s was 51% of total purchases, giving a well balanced picture. 100% 8% 8% 90% 16% 28% 31% 31% 37% 33% 80% 44% 42% 38% 40% 51% 48% 46% 50% 48% 51% 52% 49% 70% 61% 60% 50% 92% 92% 40% 84% 72% 69% 69% 63% 67% 30% 56% 58% 62% 60% 49% 52% 54% 50% 52% 49% 48% 51% 20% 39% 10%

  31. Slide 31: 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 Q110 Q210 Q310 Q410 Q111 -2% -4% -6% 32 © Intrum Justitia AB 2011. All rights reserved.

  32. Slide 32: PD carrying value segmented in acquired year

    Carrying Carrying Value PDPD––segmented Value segmented in acquired year year in acquired 300 250 2011 2010 200 2009 2008 EUR M 2007 150 2006 2005 2004 100 <2004 50 0 Q106Q206Q306Q406Q107Q207Q307Q407Q108Q208Q308Q408Q109Q209Q309Q409Q110 Q210Q310Q410 Q111 33 © Intrum Justitia AB 2011. All rights reser

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