Welcome to the Axactor SE presentation of Q3 2021 results. Throughout the call, all participants will be in listen-only mode, and afterwards there'll be a question and answer session. Today, I am pleased to present CEO Johnny Tsolis and CFO Nina Mortensen. Please go ahead with your meeting. Good morning and welcome to Axactor's third quarter presentation for 2021. This presentation will be divided into five parts. I will start by giving a short recap of who is Axactor and take you through the third quarter highlights. Then our CFO, Nina Mortensen, will present the Q3 financials before we round off with an updated outlook and a Q&A session. As always, you may ask questions live after we are done presenting or through the available chat function. Now let us move to slide three for a short company introduction. Axactor was established in 2015 with headquarters in Oslo. Our main focus is on collection and acquisition of non-performing loans from financial institutions, meaning we are both buying non-performing loans and do collection on behalf of banks and other financial customers. Axactor operates in six European countries, Spain, Germany, Italy, Norway, Sweden, and Finland, and we are north of 1,100 FTEs. The company is listed at Oslo Stock Exchange, and our main shareholder, Geveran, owns approximately 46% of the shares, up from 44% when we presented the Q2 results in August. Please move to the next slide for a quick reminder of our main focus areas. The first five years, Axactor focused on aggressive growth to build scale and market entries to get presence and diversification. Establishing effective and efficient IT and operations was important in order to handle own portfolios and third-party clients in the best possible way. Today, the focus is on profitability, operational excellence, and to grow scale and size in existing markets. The goal is to improve return on equity and to create long-lasting competitive cost advantages. Please move to the next page for more details on our strategic positioning. Axactor is pursuing a niche strategy to disrupt the industry on cost to collect. The main elements of this strategy are the following. We have carefully selected the six markets where we believe to have the best risk-reward. These markets have well-developed and functioning legal systems for debt collection, an efficient market for portfolio transactions, and financial institutions that are actively using the 3PC Market. Main focus is on fresh business-to-consumer unsecured debt within the bank and finance segment. The explanation is high volumes in combination with high average claim size, and the financial institutions are willing to pay for the additional value created by the collection companies. Axactor also clearly prioritize the combination of NPL acquisitions and third-party collection. In addition to be a product area with attractive margins, this strategy gives scale advantages without requiring significant capital. It offers access to relevant data. It has a clear diversification effect and strengthen customer relationships. As you can see, the result when it comes to the cost position has been satisfying. Here it is important to focus on the trend as we obviously have higher cost to collect versus income the first years of operations due to scale disadvantages. We expect the ratio to continue to go down over time as we gain more scale effects, and we consider our cost position to be one of our key competitive advantages also in the future. That was just a short recap of Axactor, and I will now move to slide seven for Q3 highlights. In-depth collection. Q3 is normally a seasonally weak quarter. Although this was not the case last year when Q3 was relatively strong, driven by a rebound after the first COVID-19 wave, it was certainly the case in Q3 this year. In addition to the well-known vacation effects, this year we also saw debtors prioritizing private consumption over repayments as COVID restrictions eased in Europe. Key figures were on the soft side. However, it is difficult to find a quarter to compare with as Axactor has never really experienced a situation where societies have been partly locked down for a period of three quarters before reopening. NPL investments increased from a low level of EUR 12 million in the previous quarter to a still moderate but increasing level of EUR 32 million. We have seen a gradual pickup in the number of launched NPL transactions, and we expect several deals to close in Q4, which is normally the strongest quarter for CapEx deployment. I will come back with more details on how we see the price development on our acquisitions and the market in general. Of all the key financial highlights in Q3, I would like to mention the 5-year, EUR 300 million rated bond that we successfully placed in the beginning of September. On the next page, I will explain more in detail the main reasons for the soft financials in Q3. The fact that the debtors are starting to spend money again, and in particular on private consumption, is obviously positive for Axactor and for the debt collection industry in the longer run, actually, it is rather crucial. However, this consumption will partly be at the expense of repayment of existing debt obligations. As the amortization level for the current quarter for all practical purposes is fixed, such a change in debtor behavior will lead to underperformance compared to active forecast. For Axactor, this amounted to EUR 7.7 million, which immediately hit our P&L in Q3. In addition, lower collections than anticipated will normally also lead to adjustments in the future expected collection and hence revaluations. Axactor did the negative revaluation of EUR 7 million for the quarter to reflect lower expected collections going forward, both on unsecured NPL, but also an adjustment on secured assets has been done due to delays in the court system in Spain and to lower expected value on assets taken as collateral on secured portfolios. The graph on slide eight is merely to give an illustration of how collection underperformance and revaluations are hitting our P&L in the third quarter. Although the revaluation is only 0.5% of our book values, the immediate P&L effect is substantial. We are, of course, doing everything in our power to improve the situation going forward. Luckily, we also had some very positive events in the quarter as well. Let's move to slide nine for more details on the Italian acquisition that we announced yesterday. For Axactor, building a strong 3PC business is a vital part of our strategy. We have also clearly stated that strengthening the position in our current six markets is crucial to build both scale and market position. The acquisition of CR Service fits perfectly into this. With a pure focus on 3PC bank and finance and their top-five market position within the segment will definitely strengthen Axactor in the Italian market. With this acquisition, Axactor Italy is prepared to take on new high-quality clients and are preparing for post-pandemic volumes in 2022 and beyond. After this acquisition, Axactor will have approximately 280 FTEs in our Italian operation and are continuing to build our market position in Italy step-by-step. As already mentioned, we placed a new EUR 300 million rated bond in September. Please move to the next slide for a short update on key terms. The margin was Euribor plus 535 basis points, reducing the interest rate by 165 basis points, compared to the latest bond placement in December 2020. The proceeds was used to repay the EUR 140 million bond issued by Geveran and to repay local credit lines in Italy to clean up the funding structure. The remains was used as a down payment on the RCF. The bond placement did reduce interest cost and increased investment capacity. Both Nordic and European funds subscribed in the placement. Axactor has a material headroom to covenants with a leverage ratio of 3.3x and equity ratio of 32%. The investment capacity is significant, with close to EUR 250 million in unutilized credit lines and approximately EUR 40 million in cash. As already mentioned, portfolio investments are increasing from very low levels so far in 2021. Please turn to next slide for more details. Although Axactor invested substantially more than replacement CapEx in 2020, we have been investing less than amortization for a few quarters in a row. For Q3, the investments were slightly above replacement levels, and going forward, we expect this to continue, but to an even larger degree. We have already committed to EUR 86 million on forward flow purchases the next 12 months. Further, we adjust our full year CapEx guidance down to EUR 150 million, and we will only invest if we find the portfolio prices reasonable and attractive. The reason for the reduction is that during the third quarter, Axactor refrained from following bidding to unattractive levels in some of the processes Axactor attended to, which we normally would be very competitive. Hence, the CapEx will most likely come in lower than previously estimated. The positive part is that even though we have seen examples of very aggressive pricing lately in some markets and on some one-off portfolios, we are improving the Gross IRR on our NPL book. On the next slide, you can see the actual development. As part of our work to increase and improve transparency, we have started to share more details on Gross IRRs, both on the current book, on recent acquisitions, and on committed future volumes. We can see a slight increase in the current book Gross IRRs, but the more interesting part here is the expected pickup in Gross IRRs from the current book to the committed future volumes. The Gross IRRs can vary from quarter to quarter, depending on deal types, markets, et cetera. For Axactor, it is important to buy prices where it is possible to show necessary profitability. We expect the gross IRRs to stabilize in the area between 18%-22%. Over time, our book will gradually become more profitable. Now, I would like to give you our latest insight in how prices on portfolios are developing in Axactor's markets. Please turn to slide 13 for more details. We have seen price pressure on portfolios, reducing the IRRs throughout 2021. It has been a high number of deals launched in the market, with lower volumes than normal due to unusual small 2020 and 2021 vintages. However, it is important to note that despite the price pressure, the IRRs are still significantly above the historic average for Axactor. Another trend that we have noticed is that it is stronger competition on one-off transactions than on forward flow contracts, most likely driven by the need for instant new volumes among peers. We also see significant price differences across markets, where Spain has been highly competitive and prices historically high on NPL unsecured portfolios. Axactor will continue to show capital discipline, but we also believe that it is possible to invest substantial amounts at attractive prices with IRRs significantly above our historical average. Regarding our cost program, please move to slide 14 for a status update. In Q3, Axactor realized higher savings than estimated. We did a final site consolidation in Norway, closing down our Hamar office. All collection activities are now located in our operational center in Drammen. We also saw higher impact of previously implemented activities, and we are targeting a total annualized cost reduction of EUR 5.6 million, up from the original EUR 4.8 million when the program was announced. The program will reach full P&L effect from fourth quarter. Now I will leave the word to Nina, who will present Q3 financials starting at slide 16. Thank you, Johnny. Starting with the development in gross revenue, we see that gross revenues in Q3 are seasonally weak. The gross revenue was down by 6% compared to Q3 last year. In light of the COVID effects, Q3 last year was quite a strong quarter, with the recovery and reopening of legal systems in Spain and Italy. In the previous quarter, we saw an improvement in all business segments, almost back on pre-pandemic levels. This quarter, we see an effect from the reopening of the society and the willingness to pay debt has been reduced. Gross revenue for Q3 is normally a weak quarter due to vacations, but this quarter has been even softer than expected. Let's now look a bit more into details on each of the business segments, starting with NPL on the next slide. In Q3, the NPL collections showed a decline of 4% compared to last year. I would also like to mention that the portfolio amortization rate has increased to 43% in Q3. The contribution margin was at 66%, but adjusted for net negative revaluations of EUR 5.6 million, the contribution margin was at 72%. On the next page, we will give more details on which assumptions we are taking regarding the collection curves going forward and show the performance in Q3 versus active forecast. During the last quarters, we have seen performance in line with our active forecast, while we in Q3 experienced a performance of 89% of the active forecast. The last 12 months rolling performance has however been at 95%. We have seen, as mentioned, a sharp decline in willingness to repay debt in Q3 due to debtors reprioritizing private consumption since European societies have reopened. We expect this impact to be short-term and that the performance will improve during Q4 and beginning of next year. Please turn to the next slide for comments on the TPC development. The TPC revenues reached EUR 11 million for the quarter, which was in line with Q3 last year. The customer retention during the pandemic continues to be high, but the volumes have been on the low side. We expect this to reverse as societies now are reopening. We have seen a positive change in the bank's willingness to sign new contracts. During the first nine months of this year, we have signed several large TPC agreements. We also see that the market is improving with increasing pipelines across several countries. It is important to note that there is a lag from increased debtor spending until Axactor receive new volumes. The contribution margins are returning towards pre-pandemic levels, ending at 37% for the quarter. Please note that the contribution margin in the third quarter is burdened with EUR 0.3 million in restructuring costs, and adjusting for this, the contribution margin was at 40%. Please let's move to the next slide for more details on our run-off segment, REO. The REO segment is treated as a run-off segment, meaning that we are not doing any new investments in this segment. The revenues in Q3 were upheld at a good level of EUR 8 million. This is despite declining asset base and vacation periods. As in the previous quarter, the prices were a bit disappointing, taking the contribution margin down to -31%. We sold 267 assets in Q3, and the inventory is down by 42% compared to Q3 last year. The fully consolidated book value at the end of the quarter was reduced to EUR 46 million. Let us move on to the next slide, where I will present more details on the reported financials. To summarize, we reported total income at EUR 47 million in Q3, down from EUR 62 million in Q3 last year. As already commented, the Q3 was impacted by debtors prioritizing private consumption over repayments along with the reopening of the society. Total income was also negatively impacted by net revaluations of EUR 5.6 million in the quarter. The reported EBITDA came in at EUR 10 million, corresponding to a margin of 22%. Cash EBITDA came in at EUR 51 million, compared to EUR 56 million in the same quarter last year. The cash EBITDA was upheld on a reasonable level despite the mentioned challenges and low NPL investments so far this year. On the next slide, we continue with details on elements below EBITDA. Looking at the components below EBITDA, we see that the cost discipline continues to be visible in lower depreciation and amortization. Net financial items are also showing a positive development, with interest expenses of almost EUR 30 million in the quarter, EUR 1.4 million below last year. This is, among other things, a result of the balance sheet restructuring in Q1 this year and the issuing of the new bond this quarter. The effective tax rate was -9% in the quarter. The effective tax rate is impacted by losses in the REO segment that are treated as non-tax deductible. Net profit after tax came in at -EUR 5 million. On the next page, slide 23, we will look closer at the return on equity development. The return on equity level has been quite volatile during the pandemic. The analyzed ROE, excluding non-controlling interest, was negative 3% in Q3. The return on equity might vary quarter by quarter due to seasonality and business performance, but we do expect the trend to be positive year-over-year going forward as the underlying business improves. I'll now hand it back to Johnny for a short summary and updated outlook. Thank you, Nina. We see reduced short-term visibility on NPL portfolio performance following a sharp decline in debtors' willingness to pay. 3PC volume is expected to return to pre-pandemic levels over time as private consumption again increases, and with that, also default rates. We see increasing market activities for both 3PC and NPL transactions, and Axactor will continue to strictly prioritize the best NPL deals. We adjust our NPL investment guidance from EUR 200 million to EUR 150 million for 2021, but the final investment level is highly dependent on the volume of transactions in Q4. This concludes the presentation, and we will now open for questions. Please remember that you can find more information in the supporting information and appendix attached to this presentation. Our first question is from Neil Simpson of ICG. Please go ahead. Your line is open. Hi, thanks for taking my question. Just wanted to dig in a bit more on collections. Can you you talk a lot about the reason for the sharp decline as sort of a lower willingness to pay as societies reopen. Can you go into detail as to what's driving that conclusion, I guess? Just seeing if you have any third-party data validation on that point. Just maybe if you can go into the timing on that. Did it sort of accelerate over the quarter? You know, just walk me through the cadence of how those collections evolved over Q3. Yeah, it's more. It's an observation. Assumption is not documented through any other questionnaires with debtors or anything like that. It's our observation. I would say that it was more or less equal all the three months during the quarter. We saw that it started more or less spot on 1st of July. Then also we have seen an improvement in October, but still not back to satisfying levels. We see an improvement at least in five out of six countries. Yeah. Got it. Just on the third party collection segment, I know on the last call you mentioned that you had won some contracts in Southern Europe and the moratoriums had ended. I think you were pretty optimistic on the outlook there. I guess, has your outlook changed or what exactly changed in Q2 or in Q3 that segment is down year-over-year? Yeah. First of all, it's mostly a vacation effect on 3PC. Also to add on that, the moratoriums is not ended. They have been prolonged in both Italy and Spain. I think now it's we see less and less effects from moratoriums. We expect 3PC revenues to increase again in Q4 without being very specific on the level. I think that what you see here in Q3, that's basically the vacation effect. Got it. Sorry, I missed the first part. The contracts that you won in Southern Europe that were ramping up in Q3, are they sort of in line with expectations or were they pushed out a bit? In Italy, we are still in testing phase. We are getting new volumes and testing it, putting it into the system. In Spain, we see that the volumes are starting now in Q4. Okay, great. Thank you very much. Thank you. Just as a reminder, if you wish to ask a question, that's zero one on your telephone keypad. There'll be another brief pause while any questions are registered. There are no further questions at this time, so I'll hand back over to our speakers. Yes. We have a few questions here on the live chat. The first one is, do Axactor look into other markets like Denmark, Poland, France, et cetera? We are not actively looking for new markets, not actively looking for M&A transactions in new markets. However, it is a chance that we will follow some of our major clients into new markets. I would say, the most likely countries would be Portugal and Austria. We are not looking at Poland and/or France, and also not Denmark currently. That was one question. We have another question here, which actually consists of four or five different questions. The first one is: Could you please elaborate on the significant hike in the discount for acquired loan portfolios that were booked this quarter? If I understand the question correctly, it's asked about the increased gross IRR. What I could say is that this is mainly due to one bilateral process that we got at fair price, high gross IRR. Again, I would like to emphasize that this, the gross IRR in one quarter could vary depending on type of deals, if it's a secured deal, an unsecured deal, which market is it in, and so on. I think it's better here to look at the committed forward flow book, and also maybe year to date, since it's also three quarters. One quarter specifically is maybe too narrow data point, I think. Second question is: How have the NPL portfolio prices developed throughout the year in comparison with 2020 and 2019? I think I've covered it quite well in the presentation as well. In 2020, if I start with that, there were very few transactions. Most transaction that was done, at least in our markets, were forward flow contracts and renewals of these. Very few one-off transactions. What we have seen so far this year is that the prices have started to increase, but particularly for one-off transactions. On forward flow contracts, we see that the prices are more, say, reasonable and possible to for us at Axactor to acquire. Especially in Spain, where we have new entrants coming to the market and so on, we have seen that prices on unsecured portfolios have been high. The third question is: At what kind of discount the NPLs are being sold at in the market currently versus pre-pandemic? I think, again, I don't recall exactly the slide number. We have one slide showing that the prices are increasing, but still substantially lower prices than what we saw. If you mean by pre-pandemic, you mean 2016, 2017, and 2018, there's still a substantial deviation on the prices. I'm not sure exactly the percentage, but we're talking probably 10%-15% price difference still compared to prices in that time period in our markets. Can you provide an exact date for the REO portfolio run-off? Well, I mean, if you mean when they sell the last item, I cannot give a timing. What I can say is that we are reducing the book by 50% in 2021 compared to 2020, and we will reduce the book most likely more than 50% in 2022 compared to 2021. I would say at that time, the book is starting to become insignificant. If you look at the total book value of REOs being EUR 46 million end of this quarter, you also know that Axactor doesn't own all of it. It's, we own basically 40% of the book value, and it's starting to become insignificant already compared to our portfolio book. How do you see debt repayments behavior developing in Q4? Of course, it's early. It's still October. Also knowing that most of the collections are coming the last few days of a month. It's too early to say, but we see an improvement. Like I said earlier, in five out of six countries, we see an improvement. But it's too early to say if we are able to have a significant improvement compared to Q3. We are, it looks positive without being too optimistic here. Let's see. We have a few more questions. Could you please indicate how much you paid for the Italian servicer, CRS, and/or a range? Yes. So, these companies usually trade around between five and 10 EV/EBITDA multiple. I can say that we are definitely in the lower range of that. I think it's a fair price. It's a rather small transaction, but for us, it's a really important one because it gives us a stronger foothold in the TPC market in Italy, where we have signed new large clients. We will make sure to use this, the new company to also help out to do collection on the new clients. For us, it's a very important transaction, but of course, size-wise, it's not the biggest one. That's obvious. We have just a follow-up on the slowdown in collections. Are these the same customers you know paying less, or new customers that are even paying less than expected? What I could do to say to elaborate a little bit, we know that there's also some legal collections not coming in in certain markets. I'm talking especially Sweden, but partly also Norway. We have some delays in the legal system. This does not go for Spain that much when it comes to unsecured, but secured is something different. What we also can say that, because we have such a new book, we are highly dependent on large one-off transactions. We have seen fewer refinancing or one-off payments, especially in the Nordics. This takes the average payment down, but the number of payers is actually stable or increasing in most markets, but the average payment is less. In the Nordics, this will mean that we will accrue interest over time, but of course, short term, a reduction in large one-off payments hit our collection immediately. That was the last question we have here on the chat. Unless there are any other questions from the audience, I think that we say thank you so much for calling in. If you have other questions, of course, we are available. You could just reach out directly. Thank you so much.