Slides
Page 1
Q2 2025 Presentation
Page 2
Agenda Highlights Financial update Outlook Q&A
Page 3
3 1 Excluding divested portfolios in Spain 2 Excluding non-recurring items (NRI) related to legal proceedings, IT infrastructure migration and refinancing activities Financial highlights for the quarter RCF and majority of ACR03 successfully refinanced • The ACR05 bond placed at more than 3 percentage points lower total interest rate compared to ACR04 • Well positioned to shift strategic focus from refinancing to investments and growth Collection performance of 102% • Beating collection forecast second quarter in a row • Affirming updated forecast based on current portfolio performance Healthy gross revenue of EUR 81m • 1% reduction y-o-y1 driven by low investments recent quarters • 3PC total revenue increasing by 14% y-o-y and well positioned for further growth Annualized return on equity to shareholders of 8% (12% excluding NRIs2) • YTD return on equity to shareholders of 10% (12% excluding NRIs2)
Page 4
4 Collection performance Beating collection forecast Comments Q2 ’23 Q3 ’23 Q4 ’23 Q1 ’24 Q2 ’24 Q3 ’24 Q4 ’24 Q1 ’25 102% 98% 99% 92% 93% 90% 94% 101% Q2 ’25 102% • Collection performance of 102% in Q2’25 • Supported by Q4’24 revaluation • Expect collection in line with forecast going forward
Page 5
5 3PC total revenue1 1 Excluding 3PC segment in Finland and Sweden closed end of 2023 3PC revenue ramping up to double-digit growth Comments 12 12 15 12 13 13 16 15 15 Q2 ’23 Q3 ’23 Q4 ’23 Q1 ’24 Q2 ’24 Q3 ’24 Q4 ’24 Q1 ’25 Q2 ’25 +8% +14% • 3PC segment with continued momentum • Growth in all markets • Norway and Spain primary growth drivers • Breakthrough in Norwegian 3PC market for banks and financial institutions • Expect to more than double 3PC revenues in Norway from 2025 to 2027 • New landmark agreement with estimated start Q4’25 • Growing pipeline with solid prospects providing foundation for continued growth EURm
Page 6
6 Successful refinancing initiatives 1 Sum of difference in margin and difference between 3M EURIBOR and 3M NIBOR as of 05.08.2025 between ACR05 and ACR04 2 Nominal values RCF and majority of ACR03 successfully refinanced - Well positioned with no major maturities next two years Debt structure as of Q2 20252 3.8 • RCF extended two years at existing compelling terms • Continued strong support from RCF banks • Successful placement of new 4-year EUR 125m senior unsecured bond • 3M EURIBOR + 7.5% • 3.08pp lower total interest rate compared to previous placement1 Years to maturity1.1 2.1 65 899 193 517 125 ACR03 ACR04 RCF ACR05 Total debt EURm RCF Bond 2.9
Page 7
Agenda Highlights Financial update Outlook Q&A
Page 8
8 Gross revenue Note: Stated numbers are for continuing operations 1 Excluding divested portfolios in Spain Group: Healthy gross revenue of EUR 81m Comments 78 72 70 67 76 73 144 62 65 13 13 15 12 13 13 16 15 15 Q2 ’23 Q3 ’23 Q4 ’23 Q1 ’24 Q2 ’24 Q3 ’24 Q4 ’24 Q1 ’25 Q2 ’25 91 84 85 79 89 86 161 77 81 -9% NPL 3PC EURm • Gross revenue down 9% y-o-y, driven by sale of Spanish portfolios last year • 1% decrease excl. divested portfolios in Spain • NPL gross revenue decreasing by 14% y-o-y • 4% decrease excl. divested portfolios in Spain – driven by low investments recent quarters • Strong 3PC revenue growth of 14% y-o-y (-1% adj.1)
Page 9
9 NPL Total revenue and CM% Note: Stated numbers are for continuing operations NPL segment: Total revenue increasing 6% y-o-y with stable margins Comments 52 52 50 45 46 42 50 48 76% Q2 ’23 78% Q3 ’23 75% Q4 ’23 75% Q1 ’24 78% Q2 ’24 Q3 ’24 Q4 ’24 77% Q1 ’25 -59 Q2 ’25 77%76% -12% +6% NPL Total revenue CM % EURm and % • Total revenue increasing 6% y-o-y • Reduced effective NPL amortization rate following Q4’24 revaluations • Stable contribution margin • Collection performance of 102% for the quarter • Affirming new active forecast post Q4 revaluation
Page 10
EURm and % 10 3PC Total revenue and CM%1 1 Including 3PC segments in Finland and Sweden closed end of 2023 3PC segment: Ramping up to double-digit growth Comments 13 13 15 12 13 13 16 15 15 Q2 ’23 33% Q3 ’23 46% Q4 ’23 32% Q4 ’24 Q1 ’25 31%33% Q2 ’25 44% Q3 ’24 37% Q2 ’24 36% Q1 ’24 33% +2% +14% 3PC Total revenue CM % • 3PC total revenue increasing by 14% y-o-y • All markets delivering healthy revenue growth • Particularly good results in Norway and Spain • Decline in margin y-o-y related to implementation and build-up phase of new contracts
Page 11
11 Total revenue 1 Q2’25 EBITDA margin of 54% excluding NRIs Group: Solid growth y-o-y on total revenue and EBITDA - Cash EBITDA decline reflecting Spanish portfolio sale last year EBITDA and EBITDA-margin1 Cash EBITDA 65 64 65 57 59 55 65 64 Q2 ’23 Q3 ’23 Q4 ’23 Q1 ’24 Q2 ’24 Q3 ’24 Q4 ’24 Q1 ’25 Q2 ’25 -43 33 34 34 26 30 27 32 33 50% Q2 ’23 54% Q3 ’23 53% Q4 ’23 46% Q1 ’24 51% Q2 ’24 48% Q3 ’24 Q4 ’24 50% Q1 ’25 51% Q2 ’25 -74 60 55 55 49 61 59 47 50 Q2 ’23 Q3 ’23 Q4 ’23 Q1 ’24 Q2 ’24 Q3 ’24 Q4 ’24 Q1 ’25 Q2 ’25 130 EURm EURm and % EURm
Page 12
12 Return on equity to shareholders1 1 YTD Q2’25 annualized ROE of 12% excluding NRIs 2 Annualized Double-digit annualized ROE YTD - All-time high H1 ROE -6% 1% 2% 6% -6% -9% 9% 7% -19% 10% 2016 2017 2018 2019 2020 2021 2022 2023 2024 YTD Q2’252
Page 13
Agenda Highlights Financial update Outlook Q&A
Page 14
• Well positioned with no major maturities next two years 14 1 Full effect of savings expected from Q4 2025, minimum 50% of cost savings expected from Q3 2025 Outlook • ~100% collection performance • Shifting strategic focus from refinancing to accretive NPL investments • Quarterly OPEX expected to be reduced by EUR ~800k post IT migration1 Solid collection NPL Investments Declining cost Refinancing • Several large new 3PC agreements secured during the quarter will ensure continued significant growth for the next 12 monthsGrowth
Page 15
Agenda Highlights Financial update Outlook Q&A
Page 16
Supporting information
Page 17
17 Quarterly NPL investments NPL investment commitments of EUR 6m next 12 months EURm 2 2 1 1 Q2 ’23 Q3 ’23 Q4 ’23 Q1 ’24 Q2 ’24 Q3 ’24 Q4 ’24 Q1 ’25 Q2 ’25 Q3 ’25 Q4 ’25 Q1 ’26 Q2 ’26 40 19 24 11 70 13 34 5 27 FIN DEU ITA NOR ESP SWE Committed NPL investments (est.) Additional forward flow agreements and one-off acquisitions expected to further increase NPL investments
Page 18
18 ERC development ERC down 13% y-o-y due to portfolio sale and revaluation Forward ERC profile by year Q2 ’23 Q3 ’23 Q4 ’23 Q1 ’24 Q2 ’24 Q3 ’24 Q4 ’24 Q1 ’25 2,563 2,586 2,620 2,555 2,664 2,602 2,340 2,346 Q2 ’25 2,320 -13% FIN DEU ITA NOR ESP SWE Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 Y12 Y13 Y14 Y15 265 276 268 246 209 176 154 138 124 104 90 80 71 61 56 FIN DEU ITA NOR ESP SWE EURm EURm
Page 19
19 3PC Total revenue split by geographic region 3PC volumes by geographic region • Spain accounting for 53% of total revenue on 3PC • Norway with increasing share of total revenue Comments 11% 18% 17% 53% DEU ITA NOR ESP Q2’25 Total revenue EUR 15.3m
Page 20
20 Leverage ratio - covenant ≤4.0x1 1 EUR 31m of ACR03 was repurchased at end of Q1 with cash settlement the following quarter which temporarily reclassified EUR 31m of NIBD into NWC. Adjusted for the delayed settlement, leverage was 2.7x for Q1 Bond covenants (1/2) Interest coverage ratio - covenant ≥3.0x Net interest-bearing debt divided by LTM Pro-forma adjusted cash EBITDA Pro-forma adjusted cash EBITDA divided by net interest expenses 3.8x Q2 ’23 3.8x Q3 ’23 3.9x Q4 ’23 Q1 ’24 3.9x Q2 ’24 Q4 ’24 4.0x 2.8x2.7x 4.0x 2.7x1 Q3 ’24 Q1 ’25 2.6x 3.8x Q2 ’25 Covenant NIBD / Pro-forma Cash EBITDA 4.2x Q2 ’23 3.8x Q3 ’23 3.5x Q4 ’23 3.2x Q1 ’24 3.1x Q2 ’24 3.0x Q3 ’24 3.7x Q4 ’24 3.8x Q1 ’25 3.0x 3.9x Q2 ’25 Covenant Interest coverage
Page 21
21 Loan-to-value - covenant ≤80%1 1 EUR 31m of ACR03 was repurchased at end of Q1 with cash settlement the following quarter which temporarily reclassified EUR 31m of NIBD into NWC. Adjusted for the delayed settlement, LTV was 77% and secured LTV was 43% in Q1 Bond covenants (1/2) Secured Loan-to-value - covenant ≤60%1 Net interest-bearing debt divided by total portfolio book value Secured net interest-bearing debt divided by total portfolio book value Q2 ’23 Q3 ’23 Q4 ’23 Q1 ’24 Q2 ’24 Q3 ’24 74% Q1 ’25 80% 73% 75% 79% 73% Q4 ’24 78% 73% 74%73% Q2 ’25 77%1 Covenant LTV 60% Q2 ’23 Q3 ’23 Q4 ’23 Q1 ’24 Q2 ’24 Q3 ’24 Q4 ’24 40% Q1 ’25 Q2 ’25 39% 35% 35% 35% 37% 37% 40% 43%1 43% Covenant Secured LTV