Axactor company presentation - MeetMax · Axactor company presentation DNB SME CONFERENCE...
Transcript of Axactor company presentation - MeetMax · Axactor company presentation DNB SME CONFERENCE...
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Axactor company presentation
DNB SME CONFERENCE
Bjørvika, March 21st, 2018
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• Axactor is a Nordic-based debt management company with operations
in five European countries
− Established in December 2015 – rapid expansion
− En route to execute on clearly defined strategy to build an
efficient and high-quality debt collection company without any
legacy burdens
• Main investment focus area has been unsecured B2C loans – also
invested in portfolios of secured non-performing loans and REOs in ‘17
• Specialises in both purchasing and collection on own debt portfolios,
and providing collection services for 3rd party owned portfolios
• Headquartered in Oslo, Norway, with a total of +900 employees
• Listed on the Oslo Stock exchange (ticker: AXA)
This is Axactor
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Axactor in brief
Collection on own NPLs1
Axactor service offerings
HQ
Axactor geographic footprint
Axactor established as a
large debt collection player
with platform companies1
and own portfolios in 5
European countries
1: Note: Platform companies refer to companies performing debt collection services
Collection on 3rd party owned NPLs3
Accounts Receivable Management4
Acquisitions of REOs2
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Executive management team with solid track record
Endre Rangnes (CEO)
Oddgeir Hansen
(COO)
Siv Farstad
(EVP HR)
Johnny Tsolis
(CFO)
Robin Knowles
(Investment Director)
Massimiliano Ciferri Ceretti
(Country Mgr. Italy)
Andrés Lopez
(Country Mgr. Spain)
David Martin
(Country Mgr. Spain)
Doris Pleil
(Country Mgr. Germany)
Fredrik Kessler
(Country Mgr. Sweden)
Oddgeir Hansen
(Acting Country Mgr. Norway)
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Significant expansion since start-up in December 2015
4 1: Source: Factset. Enterprise value based on market cap plus EUR 250m in NIBD as per Q4 reporting
Note: Profiles of acquired companies are included in the appendix of this presentation
Key milestones and achievements
Platform
acquisitionsJun ‘16
Dec ‘15 Sep ‘16
Feb ‘17
May ‘16
Apr ‘16
• +900 employees
• System consolidation across
platforms to secure optimal
operational setup
• One Axactor: 3PC / portfolios /
ARM
Equity capital markets development1
Portfolio
acquisitions
• EUR 485m in investments made per
Q4 2017
• As per Q4 2017, 120 portfolios
acquired
• EUR 471m in book value per Q4 2017
• EUR 858m est. remaining collection
per Q4 2017
• Unsecured B2C loans/secured non-
performing loans and REOs
Financing
• 11 equity issues
• Co-investment partnership
established with Geveran
• Bank facilities secured and
expanded
• EUR 250m in equity raised from
leading Norwegian institutions that
remain as large investors
• Geveran co-investment partnership
with EUR 300m in funding secured
• DnB/Nordea facility of EUR 350m
(200+150)
Share price development (NOK)
Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
x2
0
100
200
300
400
500
Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18
Market cap development (EURm)
EURm
Market cap ~410
Enterprise value ~660
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Axactor covers all major parts of the value chain
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Legal
collection
Surveillance and
recovery
Portfolio acquisitions
• Fresh claims
• “Call center” contact
• Low marginal cost
• Efficient systems /
automation
yields economies of
scale
• Legal action taken when
claims can not be collected
amicably
• Higher marginal cost
• Legal alternatives differ
greatly between
jurisdictions
• Local presence and
competence is key
Amicable
collectionFactoringCredit information Invoice
• Unrecoverable claims
move to surveillance
• Recovery reinitiated when
economic capacity
improves
• Large volume, minimal
cost
• Efficient systems /
automation yields
economies of scale
Note: Value chain based on management considerations
Axactor focus areaOutside Axactor scope
Payment
service
• “Call center” contact
on behalf of 3PC
customers
• Follow-up of
outstanding invoices
• Manage the invoice
until amount is
collected
• If invoice remains
unpaid – automatic
transfer to collection
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Operational achievements completed through 2016/2017
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• Intility (IT Infrastructure)
• Miratech partnership (AD/AM)
• ERP/Finance/HR
• Portfolio pricing
• Digitalization
− Dialer
− BI/DW
− Core collection Systems
− Debtor/Client Portals
− Skill based collection
• CRM
• Branding
• Common KPIs
• Accounts Receivable Management (ARM)
Group level Country specific achievements and priorities
One
Axactor
✓ New collection system implementation
✓ Bank of Italy 106 license
✓ Legal collection
✓ Consolidate core collection systems
✓ New infrastructure
✓ REO start-up
✓ Improve old collection system
✓ Skill based collection
✓ ARM roll-out ongoing
✓ New organisation
✓ ARM roll-out ongoing
✓ 3PC collection start up
✓ New collection system implemented
✓ Portfolio collection start up in 2017
✓ New ARM solution
Increased efficiency in collection operations going forward on the back of operational achievements made to date
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Acquisition of REO portfolios highly attractive for Axactor
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Real Estate Owned (REO) attractions
Attractive stand-alone
returnsIRR normally 30-60% higher than for
B2C unsecured
1
Improved macro
environment in SpainReal estate prices are increasing,
labour market improving in
combination with low interest rates
2
Increased diversificationThe REO segment and increased
exposure to secured assets increases
diversification
3
Creating even stronger
relationships with banksAxactor better positioned to acquired
other NPL assets and 3PC business
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Access to attractive fundingInternational banks with long
experience and high appetite for
REOs funding and vendor financing
possible
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Regulatory changes driving
large transaction volumesMore than 70 transactions last 3 years,
15 last year with asset value
exceeding EUR 35 billion
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Pipeline illustration: Axactor acquisitions 2017 vs pipeline H1 2018 (EURm)
Trends in Spanish macro and banking supportive of REOs
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Unemployment declining2 After years of decline, lending in the banking sector is rising
Housing prices on the rise2 Healthy pipeline of Spanish REO opportunities
+37%
Q4-17
9,800
Q4-16
7,138
0%
5%
10%
15%
20%
25%
30%
20172016201520142013201220112010200920082007
Unemployment rate
0
20
40
60
80
100
120
20172016201520142013201220112010200920082007
Housing prices (2007-index)
+22%
Q4-17
9,929
Q4-16
8,109
+15%
Q4-17
3,336
Q4-16
2,911
1: Source: Bankia (consumer finance), CaixaBank (consumer lending in Spain) and BBVA (consumer, performing loans under management in Spain)
2: Source: Statista
Development in consumer lending balances among selected Spanish banks (EUR million)1
156
AXA H1 2018 pipeline
~8,200
AXA 2017 acquisitions
+10 dealsApprox. 500k residential real estate
units sold in Spain in 2017 – this level
of activity was last observed in 2008
http://www.google.no/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=2ahUKEwiSzeL53qXZAhXFCywKHcUVBi0QjRx6BAgAEAY&url=http://logo-logos.com/bankia-logo-1269.html&psig=AOvVaw3-y3JSY8dFGIKlddMiWQ55&ust=1518709240947602https://www.google.no/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=2ahUKEwjH1qnI36XZAhUD6CwKHYbYD5MQjRx6BAgAEAY&url=https://www.bbva.com/&psig=AOvVaw2xKhbzhDbblO7_jhjo0apc&ust=1518709407708841
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• NPL portfolios with finance claims are characterised by long and stable
cash flows (+15 years)
− REO portfolios typically last 3-5 years before depletion
• REOs with a lower money multiple, but shorter payback time, ensuring
healthy IRR levels
• Accounting treatment of NPLs rely on amortized cost principle, i.e.
amortization is based on forecasted collections and reported above net
revenue
− Accounting treatment of REOs rely on stock held for sale
principle, i.e. cost of sale is performed when an asset is sold and
posted as opex
REOs with significantly shorter payback time compared to NPLs
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Gross collection in year
Y14Y6 Y8 Y12Y7 Y11Y10 Y15Y13Y5 Y9Y4Y3Y2Y1
NPL REO
NPL (FI) REO
Gross payback 40-50 months 20-30 months
Money multiple >2.0 ~1.4
Lifetime >15 years 3-5 years
CommentsPortfolio cash flow characteristics
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Key highlights 2017
• Significant growth, Gross revenue EUR 104.7m (EUR 40.5m in ‘16), cash EBITDA EUR 32.7m (negative EUR 2.5m in ‘16)
• Co-investment partnership with Geveran established - first transactions completed
• Refinancing of existing debt facility with a new facility of EUR 350m (EUR 200m +EUR150m accordion)
• EUR 362m portfolio investments – including EUR 156m of REO assets in Spain
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GROSS REVENUE
104.7EUR MILLION
ERC
858EUR MILLION
+171% y/y
EBITDA
14.8EUR MILLION
ADJ CASH EBITDA1
33.9EUR MILLION
CASH BALANCE
48.6EUR MILLION
+159% y/y 17% margin
1: Cash EBITDA adjusted for non-recurring items related to SPV setups and restructuring cost of EUR 1.2m in 2017. Cash EBITDA was EUR 32.7m in 2017
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Financial performance – Gross revenue and ERC
105
40
2016 2017
+159%
858
317
2016 2017
+171%
• Revenue growth driven by NPL acquisitions in all countries and
3PC growth, particularly in Spain
• Book value of NPL portfolios has increased from EUR 128m to
EUR 471m from 2016 to 2017
• REO a significant contributor to the growth
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Gross Revenue (EUR million) ERC (EUR million)
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Financial performance – EBITDA and Cash EBITDA
+21.3
2017
14.8
2016
-6.5
+35.2
2017
32.7
2016
-2.5
• Profitability driven by growth in revenue and improved utilization of resources
• Reduction in M&A activities in 2017 impacting costs
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EBITDA (EUR million) Cash EBITDA (EUR million)
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13
Q4-17
34.5
Q3-17
23.6
Q2-17
24.91
Q1-17
19.7
Q4-16
18.5
SPAITA SWENORGER
CommentsDevelopment gross revenue mix (EUR million)
24.91
Q2-17 Q3-17
23.6
Q4-17
34.5
Q1-17Q4-16
19.718.5
NPL Portfolios3PCARM
• Q4 a seasonally strong quarter
− Strong Q4 performance in all geographies
• Stable balance between NPL and 3PC
− Several new 3PC contracts in Spain during 2H 2017 supporting growth in 3PC
− NPL segment (including REO) growing significantly on the back of Q4 investments
− Stable Accounts Receivable Management (ARM) development –ongoing roll-out in Sweden, Germany and Italy
7%
18%
9%
57%
9%
31%
64%
5%
NORSPA SWEGER ITA 3PCNPL Portfolios ARM
Gross revenue mix Q4 2017
By geography
By segment
1: Q2 settlement with former IGE board members is excluded
Axactor gross revenue mix by geography and segment
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• REO investments are made in REO holding SPV (Reolux)
• Book value of REO assets amounted to EUR 154m per Q4’17
• Book value include minority shareholders interest
Q4-17
471
Q4-16
128
Q3-17
246
Q2-17
241
Q1-17
192
SWEREOSPANORITAGER
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Book value of portfolios (EUR million)Capex (EUR million)
Portfolio statistics – Capex and book value
• Total of EUR 362m invested in portfolios in 2017
• REO investments in Q4’17 of EUR 147m (incl. minority)
• Capex deployed in all Axactor geographies in Q4’17
• EUR 20m invested in NPL in Italy in Q4’17
Q2-17 Q4-17
234
Q3-17
7
Q1-17
66
Q4-16
34
54
REO SWEITAGER SPANOR
Significant growth
investments made
in Q4 2017
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Portfolio statistics – ERC
Q4-17
858
Q3-17
526
Q2-17
511
Q1-17
427
Q4-16
317
Y15
14
Y14
16
Y13
18
Y12
20
Y11
22
Y10
25
Y9
28
Y8
32
Y7
36
Y6
42
Y5
48
Y4
64
Y3
140
Y2
213
Y1
142
SWEREOSPANORITAGER
• ERC increase of 171% compared to same quarter last year
• REO portfolios represent EUR 225m of ERC as per Q4 2017
• ERC figures include minority shareholders interest
SWEREOSPANORITAGER
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ERC per year (EUR million)Historical development ERC (EUR million)
• NPLs with finance claims have long and stable cash flows (+15 years)
• REO portfolios typically last 3-5 years before depletion
• Compared to NPLs, REOs typically have a lower money multiple, but shorter payback time, ensuring healthy IRR levels
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Portfolio collection vs. initial business case: +100% performance per Q4 ‘17
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• Continued positive trend in collection performance
• Effect partly driven by new collections systems and robot
dialer system
• Significant uplift in gross collections in 2018 on the back
of Q4’17 investments
CommentsPerformance vs. business case (EUR million)
97%100%
91%92%
72%
0
5
10
15
20
25
0%
20%
40%
60%
80%
100%
120%
14.2
Q2-17
14.0
101%
Q3-17Q4-16
10.4
Q1-17 Q4-17
22.1
8.5
Q3-16
3.9
80%
Q2-16
1.4
Q1-16
0.9
Gross cash collection on portfoliosLTM performance vs business case
Note: Performance graph includes REOs
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Axactor investment capacity post bond placement
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Axactor AB
• 200 mEUR
• 150 accordion options
DNB/Nordea RCF
• 150 mEUR
• 100 mEUR tap option
• 60 mEUR
• To be further increased,
maximum 100 mEUR
Italian credit lines
• 60 mEUR equity
• 120 mEUR mezzanine
• 80+40 mEUR DNB
Geveran SPV
• 156 mEUR invested
• No gearing in Reolux
SPV
Reolux SPV
• 50-60% LTV on
Axactor/Geveran REO
investments
International bank
Total “as is” investment capacity of 350 – 400 mEUR• Excluding running cash flow
• Excluding potential financing on REOs
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Shareholders and BoD
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Bjørn Erik Næss
Chairman
Beate S.
Nygårdshaug
Board member
Brita Eilertsen
Board member
Merete Haugli
Board member
Terje Mjøs
Board member
Michael Hylander
Board member
(Deputy)
Harald Thorstein
Board member
Board of directorsTop 20 shareholders
Source: VPS register 20 March 2018
Investor Number of shares % of total
Geveran trading 173 902 500 11,5 %
Verdipapirfondet DNB Norge 106 704 919 7,0 %
Tvenge Torstein 70 000 000 4,6 %
Ferd 53 351 399 3,5 %
Songa Trading 47 423 467 3,1 %
Verdipapirfondet Alfred Berg Gamba 35 553 765 2,3 %
Verdipapirfondet Alfred Berg Norge 28 901 448 1,9 %
Arctic Funds 24 845 540 1,6 %
Gvepsborg 20 364 945 1,3 %
VPF Nordea Norge 20 131 026 1,3 %
Verdipapirfondet Delpi Norden 19 241 228 1,3 %
Statoil Pensjon 18 634 327 1,2 %
Alpette 16 616 431 1,1 %
Skøien 15 304 397 1,0 %
Nordnet Livsforsikring 15 132 690 1,0 %
Pacunia Forvaltning 13 900 000 0,9 %
Verdipapirfondet Alfred Berg Aktiv 13 410 518 0,9 %
Handelsbanken fonds 12 158 703 0,8 %
VPF Nordea Kapital 12 147 486 0,8 %
Martin Ibas David 11 451 250 0,8 %
Total top 20 729 176 039 48,1 %
Total shares 1 516 237 427