Intrum Ab · OMXSTO:INTRUM

Intrum Ab — Intrum Justitia — Q2 2011 Earnings Presentation

29 slides from Intrum Ab's earnings presentation, Jul 18, 2011

  1. Slide 1: Interim report January-June 2011

    Interim report January-June 2011 July 18th 2011

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

    Presented by Lars Wollung CEO and President Bengt Lejdström CFO

  3. Slide 3: Q2 2011 key growth figures

    22.2% Currency adjusted EBIT growth 10.1% Currency adjusted revenue growth 39% Growth of investments in purchased debt 22.7% Return on investments in purchased debt 9.0% Currency adjusted EBIT growth in CMS 3 © Intrum Justitia AB 2011. All rights reserved.

  4. Slide 4: Slide 4

  5. Slide 5: Financial summary

    Financial summary Apr–Jun Apr–Jun Chg. % Rolling 12 2011 2010 (fx adj) 2010-2011 Revenues, SEK M: 977.5 922.5 10.1% 3 797.6 EBIT, SEK M: 210.6 180.6 22.2% 769.3 EBIT margin, %: 21.5 19.6 - 20.3% Organic growth, %: 2.7 -1.2 - - PD investments: 276.4 198.3 48% 1 326.9 Net debt to equity: 101.7% 80.5%

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

    Revenues and operating margin, rolling 12 months Revenues: SEK 3 798 M Margin: 20.3% 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 2005 2006 2007 2008 2009 2010 2011 6 Excl. disposals, restructuring and GW

  7. Slide 7: Northern Europe

    Regional development Market position Market leader Northern Europe Top 5 44 percent of total revenues Apr-Jun Apr-Jun Change Fx Adj • Strong YTD performance in the region with Excl. PD Revaluations 2011 2010 % % increasing EBIT margins for both PD & Revenues, SEKm 428.1 353.8 21.0% 26.0% CMS EBIT, S

  8. Slide 8: Central Europe

    Regional development Market position Central Europe Market leader Top 5 22 percent of total revenues Other Apr-Jun Apr-Jun Change Fx Adj • Limited supply of high quality portfolios the past Excl. PD Revaluations 2011 2010 % % years affects EBIT negatively Revenues, SEKm 208.4 228.4 -8.8% -8.1% • Maj

  9. Slide 9: Western Europe

    Market position Regional development Market leader Western Europe Top 5 34 percent of total revenues Other Apr-Jun Apr-Jun Change Fx Adj • Continued positive EBIT trend (fx adjusted) Excl. PD Revaluations 2011 2010 % % in the region Revenues, SEKm 325.0 339.3 -4.2% 2.6% • Improved collection product

  10. Slide 10: Credit Management Services

    Credit Management Services 76 percent of total revenues Apr-Jun Apr-Jun Change Fx Adj • Operational excellence program show Reported numbers 2011 2010 % % good progress, e.g: Revenues, SEKm 812.1 814.8 -0.3% 4.1% • Legal debt collection EBIT, SEKm 104.1 99.5 4.6% 9.0% • Collection strategy and scori

  11. Slide 11: Purchased Debt

    Purchased Debt 24 percent of total revenues Apr-Jun Apr-Jun Change Fx Adj • Investments in Q2 were SEK 276 (198) Reported numbers 2011 2010 % % • Q2 ROI is 22.7% (19.4%) Revenues, SEKm 279.2 201.8 38.3% 44.0% EBIT, SEKm 146.2 104.7 39.6% 46.6% • High margin in Q2 due to collections above EBIT margin

  12. Slide 12: Purchased Debt – revaluations

    Purchased Debt – revaluations Q2 Q2 H1 12M PD revaluations, SEK m 2011 2010 2011 2010 Northern Europe 12.1 0.2 14.5 11.0 Central Europe 2.7 1.1 7.5 -1.9 Western Europe 1.1 -0.3 -0.3 -5.9 Total 15.9 1.0 21.7 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 2 645.8 M ROI 12: 19.2% 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 Q2 2006 2007 2008 2009 2010 2011 13 © Intrum Justitia AB 2011. All rights reserv

  14. Slide 14: Purchased Debt, investments 2002–2011

    Purchased Debt, investments 2002–2011 SEK M 1 500 996* 871 1 050 870 872 1 000 822 417 646 500 258 870 996 872 871 263 276 201 267 822 198 370 258 201 267 171 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 * Incl acquisition of Austrian portfolio of written-off receivables with an aggregate 14

  15. Slide 15: Balance sheet – Highlights

    Balance sheet – Highlights 30 Jun 30 Jun Dev SEK m 2011 2010 % Total assets 7 184.8 6 333.5 13.4 Goodwill 2 193.3 1 758.8 24.7 Total financial fixed assets 2 779.5 2 335.8 19.0 - whereof Purchased Debt 2 645.8 2 151.6 23.4 Shareholders' equity 2 534.4 2 387.3 6.2 Net debt/equity ratio, % 101.7 80.5

  16. Slide 16: Cash flow statement

    Cash flow statement Jan-Jun 2011 Jan-Jun Jan-Jun Dev SEK m 2011 2010 % Operating earnings (EBIT) 376.3 337.6 11.5 Depreciation 85.2 86.5 -1.5 Amortization of purchased debt 386.3 395.7 -2.4 Income tax paid -128.7 -74.4 -73.0 Changes in working capital -38.3 -6.2 -517.7 Other -31.6 -46.4 31.9 Cash fl

  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 Q1 2011: 3 188 Listed on NASDAQ OMX, Stockholm, Mid-Cap Market capitalization, June 30, 2011: SEK 7.4 billion Intrum Justitia's m

  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 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 22 © Intrum Justitia AB 2011. All rights reserved.

  23. Slide 23: Organic growth revenue 2005-2011

    Organic % growth revenue 2005-2011 Organic growth in Q2(11): 2.7% 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 -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 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 June 2011: SEK 2 646 M 23% y-o-y (SEK 2,152 M) Gross collection: Carrying value x 2.25 Cash flow distribution 31 Mar of Gross collection 2011 2010 Y1 25% 26% Y2 18% 19% Y3 13% 14% Y4 10% 11% Y5 8% 8% Y6 6% 6% Y7 5% 5% Y8 4% 3% Y9 3% 3% Amortization:

  26. Slide 26: Share of new one-offs was 41% of total purchases

    In Q2 the share of new One-off’s was 41% of total purchases. 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% 59% 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% 41% 10% Forward flows One-offs 0

  27. Slide 27: Q2 revaluations continue the indications from last quarter

    Q2 revaluations continue the indications from last quarter (SEK) 15,000 10,000 5,000 0 Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407 Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 -5,000 -10,000 -15,000 -20,000 -25,000 © 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% Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407 Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 -2% -4% -6% © Intrum Justitia AB 2011. All rights reserved.

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

    Carrying Carrying Value Value – segmented PDPD – segmented in acquired in acquired year year 300 250 2011 2010 200 2009 2008 EUR M 2007 150 2006 2005 2004 100 <2004 50 0 Q107 Q207 Q307 Q407 Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Q211 29 © Intrum Justitia AB 2011. All rights

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