Intrum Ab · OMXSTO:INTRUM

Intrum Ab — Intrum Justitia — Q3 2012 Earnings Presentation

25 slides from Intrum Ab's earnings presentation, Oct 24, 2012

  1. Slide 1: Interim report January-September 2012

    Interim report January-September 2012 October 24th 2012

  2. Slide 2: Presented by Lars Wollung and Erik Forsberg

    Presented by Lars Wollung CEO and President Erik Forsberg CFO

  3. Slide 3: Quarterly highlights

    Quarterly highlights EBIT growth (adjusted for currency and debt 10% portfolio revaluations) 299 MSEK investments in purchased receivables 19% Return on purchased receivables 6% Organic growth 3 © Intrum Justitia AB 2012. All rights reserved.

  4. Slide 4: Financial summary

    Financial summary Jul–Sep Jul-Sep FY 2012 2011 RTM 2011 Revenues, SEK M: 1 003 998 4 046 3 950 EBIT, SEK M: 271 264 877 868 EBIT margin, %: 27 26 22 22 Organic growth, %: 6 3 - 2 Cash flow from operations, SEK M: 496 544 1 924 1 768 Investments in receivables: 299 660 1 759 1 804 Net debt to equity,

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

    Revenues and operating margin, rolling 12 months Revenues: SEK 4 046 M Operating margin: 22% SEK M Revenues % 4 000 EBIT 3 500 EBIT margin 3 000 20 2 500 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 2005 2006 2007 2008 200

  6. Slide 6: Northern Europe

    Regional development Market position Market leader Northern Europe Top 5 49 percent of total revenues Q3 Highlights • Good growth in revenues and EBIT, driven Jul-Sep Jul-Sep Change Fx Adj mainly by increased investments in Excl. PD Revaluations 2012 2011 % % purchased receivables Revenues, SEKm 496

  7. Slide 7: Central Europe

    Regional development Market position Central Europe Market leader Top 5 23 percent of total revenues Other Jul-Sep Jul-Sep Change Fx Adj Q3 Highlights Excl. PD Revaluations 2012 2011 % % Revenues, SEKm 227 233 -3% 8% • Positive development in the region as a EBIT, SEKm 55 59 -7% 4% whole, with good

  8. Slide 8: Western Europe

    Market position Regional development Market leader Western Europe Top 5 28 percent of total revenues Other Q3 Highlights Jul-Sep Jul-Sep Change Fx Adj • Revenues continues to be impacted mainly Excl. PD Revaluations 2012 2011 % % by weak macro and selectively reduced Revenues, SEKm 277 315 -12% -4%

  9. Slide 9: Credit Management Services

    Credit Management Services 72 percent of total revenues Q3 Highlights Jul-Sep Jul-Sep Change Fx Adj Reported numbers 2012 2011 % % • Stable development with single digit Revenues, SEKm 810 827 -2% 5% revenue growth, adjusted for negative FX- impact Service line earnings, SEKm 210 234 -10% -4% Servic

  10. Slide 10: Financial Services

    Financial Services 28 percent of total revenues Jul-Sep Jul-Sep Change Fx Adj Q3 Highlights Reported numbers 2012 2011 % % Revenues, SEKm 321 273 17% 27% • Strong revenue development with high Service line earnings, SEKm 174 150 16% 25% margins, following good growth in Service line earnings margin

  11. Slide 11: Purchased receivables – revaluations

    Purchased receivables – revaluations Q3 Q3 9M FY PD revaluations, SEK m 2012 2011 2012 2011 Northern Europe 3 3 6 18 Central Europe 0 0 0 7 Western Europe 1 1 -41 -6 Total 4 4 -35 19 Excluding the revaluation of a Spanish portfolio following the ruling of a court case, revaluations during Jan-Sept 2

  12. Slide 12: PD ROI – rolling 12 months

    PD carrying value: SEK 3 528 M PD ROI – rolling 12 months ROI RTM: 18% ROI RTM:* 21% *Excluding one-off item related to Spanish court case in Q1 2012 SEK M PD carrying value ROI RTM* 3 600 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

  13. Slide 13: Purchased receivables, investments 2002–2012

    Purchased receivables, investments 2002–2012 SEK M 1 804 2 000 1 500 498 1 261 Q1 299 Q2 1 000 660 Q3 Q4 1050 667 500 822 870 996 872 871 276 258 201 267 370 295 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 13 © Intrum Justitia AB 2012. All rights reserved.

  14. Slide 14: Balance sheet – Highlights

    Balance sheet – Highlights 30 Sep 30 Sep Dev SEK m 2012 2011 % Total assets 8 071 7 827 3 Goodwill 2 334 2 245 4 Total financial fixed assets 3 629 3 311 10 - whereof purchased receivables 3 528 3 160 12 Shareholders' equity 2 801 2 705 4 Net debt/ R12 EBITDA* 1.40 1.53 -8 Net debt/equity ratio, % 1

  15. Slide 15: Cash flow statement

    Cash flow statement Jul-Sep Jul-Sep Dev Jan-Sep Jan-Sep Dev SEK m 2012 2011 % 2012 2011 % Operating earnings (EBIT) 271 264 3 649 640 1 Depreciation 40 43 -7 126 128 2 Amortization of purchased receivables 262 247 6 830 633 31 Income tax paid -35 -25 -40 -124 -154 20 Changes in working capital -18 4

  16. Slide 16: Q&A

    Q&A 16 © Intrum Justitia AB 2012. All rights reserved.

  17. Slide 17: Appendix

    Appendix 17 © Intrum Justitia AB 2012. All rights reserved.

  18. Slide 18: 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 Q3 2012: 3 406 Listed on NASDAQ OMX, Stockholm, Mid-Cap Market capitalization, Sep 30, 2012: SEK 7.7 billion Intrum Justitia's ma

  19. Slide 19: Purchased receivables – an illustrative financial example

    SEK Purchased receivables 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

  20. Slide 20: Purchased receivables, carrying value

    Purchased receivables, carrying value SEK M 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 20 © Intrum Justitia AB 2012. All rights reserved.

  21. Slide 21: Organic growth revenue 2005-2012

    Organic % growth revenue 2005-2012 Organic growth in Q3(12): 6% 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 Q1 Q2 Q3 -5 2005 2006 2007 2008 2009 2010 2011 2012 21 © Intrum Justitia AB 2012. All rights reserved.

  22. Slide 22: 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 Q1 Q2 Q3 2005 2006 2007 2008 2009 2010 2011 2012 Excl. UK downsizing in 2009, goodwill write-down in 2008 and non-recurring 22 item in Spain in Q1 2012 © Intrum Justit

  23. Slide 23: One-offs vs Forward Flow, as a % of PD Investments

    One-offs vs Forward Flow, as a % of PD Investments 100% 90% 31% 26% 31% 80% 42% 38% 40% 38% 48% 46% 49% 52% 56% 70% 59% 60% 75% 79% 50% 40% 69% 74% 69% 30% 58% 62% 60% 62% 52% 54% 51% 48% 44% 20% 41% 10% Forward flows One-offs 25% 21% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2008 2009 2011 20

  24. Slide 24: Revaluation picture (SEK)

    Revaluation picture (SEK) SEK 19,000 9,000 -1,000 Q107Q207Q307Q407Q108Q208Q308Q408Q109Q209Q309Q409Q110Q210Q310Q410Q111Q211Q311Q411Q112Q212Q312 -11,000 -21,000 -31,000 -41,000 © Intrum Justitia AB 2012. All rights reserved.

  25. Slide 25: A broad indication going forward

    A broad indication going forward Carrying value 30 Sep 2012: SEK 3,528 M +12% y-o-y (SEK 3,160 M) Gross collection: Carrying value x 2-2.5 Cash flow distribution 30 Sep of Gross collection 2012 2011 Y1 24% 24% Y2 17% 18% Y3 14% 13% Y4 11% 11% Y5 9% 8% Y6 7% 7% Y7 6% 5% Y8 4% 4% Y9 3% 3% © Intrum Jus

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