Welcome to DDM Holding Q4 report for 2022. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing star five on their telephone keypad. I will hand the conference over to CEO Florian Nowotny. Please go ahead. Welcome everybody to this Q4 results call from DDM. I'll be presenting today. I'm Florian Nowotny, the CEO. Fredrik Olsson our CFO is on a business trip, but of course, he's available for any questions you might have afterwards. Let me start by giving you a quick reminder of where we stand with our businesses. We have positioned ourselves as having four distinct investment focuses. The one is on what we call the consumer and embedded finance investments. I'll talk about our Nordiska acquisition in a second. Secondly, our core non-performing loan business, where we see quite interesting opportunities coming up throughout the year. Thirdly, our what we call servicing and digitalization around our subsidiary AxFina, where we support AxFina in its growth to capture the market opportunities in digital servicing and related offerings. F ourthly, special situations where we have adjacent businesses like our participation in the Italian platform, Borgosesia S.p.A., and assets. Let me just right on the next page on where we stand regarding our investment into Nordiska. So the aim is to create a Pan-European champion in embedded finance by combining Nordiska, which is a Swedish-based bank that already now is engaged in Lending as a Service business offerings. Secondly, Swiss Bankers, which is the largest issuer of prepaid credit cards in Switzerland and has a significant franchise in digital payments. Thirdly, Omnio, which is a U.K.-based fintech, which is focused on the tech side of things and offering the platform technical solutions for embedded finance and the necessary infrastructure for it. The next step that we expect in this transaction now is that we will take up a capital increase in Nordiska. We invest CHF 40.5 million into Nordiska. Nordiska will then with this capital acquire 100% of Swiss Bankers. In parallel, DDM and the other shareholders of Omnio would contribute Omnio to Nordiska, so that also Nordiska becomes the owner of Omnio. DDM would end up with around 37% stake in Nordiska, which then would hold Swiss Bankers and Omnio. We have made significant progress in the regulatory approvals to close this transaction. We have the Swedish approvals necessary for DDM becoming a shareholder in Nordiska. Nordiska got the approval for the acquisition. Now we are waiting that also the Swiss regulators sign off on this transaction. We expect this closing to happen still in Q1. Ideally very, very soon, but you never know with regulators and with they work on their own timetable. But we're quite confident that before the end of March, we should see a closing for this transaction. The liquidity for our investments in Nordiska obviously comes from the more than EUR 50 million of cash that we had at the end of the year. That is well covered. On the next page, a short overview on how we see this newly created Nordiska Swiss Bankers Omnio Group, which will really have a Pan-European reach with the existing operations of Nordiska in the Nordics, plus actually deposit taking in Germany. Then we've got Switzerland and Swiss Bankers also has a e-money license in Liechtenstein, a nd the U.K.-based operations of Omnio really are wide reach. Omnio also has a quite significant subsidiary in Italy, focusing on loyalty cards, which is also a good fit to the Swiss Bankers product. There are already a large number of initiatives to really create innovative products that can be introduced to these markets. Obviously the better banking market where you provide banking services to intermediaries who themselves do not have a banking license but wanna provide either payment or credit to their customers is a market which is to a large extent also driven by regulatory movement. We think that having a platform which is offering has access to various regulatory environments and has experience in various regulatory environments is a quite big advantage, especially as the Swedish regulators, I think, are more receptive to some innovative offerings than let's say the German regulator. There definitely is a market for product offerings with the setup that is created here. It's also the clear intention of this newly formed Nordiska to as a next step seek a listing because with these three companies together, there's a very compelling equity story. There's a size, there's a Pan-European footprint that should enable Nordiska to come to the markets hopefully still this year. On the next page, AxFina. As I already explained, AxFina is on one hand our main servicer for our existing DDM NPL portfolio, but it's much more than that. It really is rolling out a digital offering across the CE region. Last year also acquired platforms in Poland, so it's now rolling out in the Polish market. We have a good partnership with EBRD in this business who's also supporting us. This There we expect also to add servicing revenues to our otherwise more capital-intensive business. We think there's a good complement to our existing NPL and investment business. With this, I come to the financials, starting with the net collections. I think for the full year, we saw a nice increase in net collections compared to 2021. Also in cash EBITDA, a significant improvement for the full year to the previous year. Q4 itself, I think was in line with expectations. Obviously Q3 we had a significant inflow from a larger sale of a real estate asset in Croatia. Q4 was a more normalized quarter, but I think it's turned out well. On the next page, looking at the income statement of DDM Debt AB. I think the one thing to point out in Q4 is that there was a positive effect from the share price improvement of Addiko Bank. If you remember, Addiko Bank share price deteriorated quite a lot at the beginning of 2022 due to a Swiss franc law in Slovenia. In December, the Supreme Court in Slovenia withdrew that law. So that it had an immediate positive effect also on the share price of Addiko. It's actually went up a bit further now under the last days compared to year-end, so that there was a reversal of previous impairments, which is shown as this financial income in the P&L. As over the for the full year, obviously you show the net effect for the full year. There's still a negative mark-to-market adjustment on the Addiko stake of EUR 4.9 million in the full year P&L. I think otherwise, the quarter was pretty stable and few other extraordinary impacts. On the next page, looking at the balance sheet of DDM Debt AB. The key item on the asset side obviously is, in addition to the portfolios, the cash position. There was around EUR 52 million of cash at year-end. We have in February signed and drawn a super senior facility with a Swedish bank of EUR 1.5 million. That in the meantime is also in our accounts. We are well prepared to have the liquidity for the investment in Nordiska and obviously for the upcoming coupon payment on our bonds early April. Our equity ratio as defined by the bond terms is 22% at year-end, that's stable. I think otherwise not many movements in the balance sheet compared to what we've seen in Q3. On the ERC, we went through our ERC expectations, including various assumptions we are making about when we expect to especially see inflows from the sale of real estates. As we are progressing in our mostly secured portfolio, especially Croatia, we also now have a higher number of REOs on our balance sheet, where we also then have sales strategies for each of these assets, which are included here. We expect from the ERC around a bit over EUR 60 million collections 2023, going up to EUR 86 million in 2024. As you know, in the ERC headline number of EUR 284 million, in addition to the kind of like core ERC related to the NPL portfolio, we also include expected cash flows and dividends, et cetera, from other investments. The core ERC attributable to NPLs in here is EUR 121 million, which is directly DDM Debt AB. There's another EUR 22 million ERC within AxFina, who also buys portfolios as part of servicing contracts or when they take over a servicer where there's still a tail portfolio and things like this. They also have around a bit over EUR 20 million of ERC in their books. This brings me to the summary. What lies ahead for DDM in 2023? Clearly the key event and, what will define 2023 is our Nordiska transaction. Closing this, making sure that Nordiska becomes listed, which hopefully can also should make the value inherent in this platform more transparent. That clearly will be the key driver. That's where our key focus is for this year. Secondly, of course, the overall macroeconomic environment is improving again for NPLs. We also see more possible transaction coming to the market. You know, banks provisioning levels going up a little bit, et cetera. It's not there yet, but definitely for the second half of the year and especially in some of the regions where we are active, which are smaller markets where some players want to exit, et cetera. There could be interesting opportunities coming up. Thirdly, 2023 will also be the year where AxFina will make progress on its rollout of its digital product offering so that AxFina clearly more and more has more and more third-party business unrelated to DDM on its books and its P&L from which we will then also profit. Thanks for listening to this short overview of where DDM stands at the end of the year. Our report is obviously on the on the web page, and Fredrik and myself are, of course, always happy to take your your questions by email or to set up a conference call. Now the floor is open for questions. Moderator, please. If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star five again on your telephone keypad. The next question comes from Patrik Brattelius from ABG. Please go ahead. Thank you. Thank you for the presentation. Just a few follow-up questions, just some questions for clarification purposes. Closing of this transaction with Nordiska that you expect to close here in Q1. I expect that will reduce your cash position. You mentioned you have received a financing agreement with a Swedish bank, do you foresee any need to strengthen the liquidity position in 2023 after this transaction is completed? On the one hand, it's clear we have the liquidity we now need for this transaction and, you know, the immediate cash flow needs. Of course, for us to make any additional investments in, let's say, NPL portfolios or so, we will need to build up our cash buffer again. Which will on the one hand happen from the collections we do. Secondly, there are other assets on our balance sheet where there might be some progress throughout 2023. It's clear that whenever we look at any additional investments, we are very disciplined and keep in mind that we know where our bonds are trading. That we have a quite high threshold for deploying additional capital at the moment. That's why the key focus is now executing the Nordiska transaction and then building up our cash position again to look at additional investments. It's clear, you know, the more interesting thing is this senior facility where we're now at EUR 4.5 million, it's clearly something which could be increased down the road because that's the most efficient way of financing. It's clear that otherwise with, you know, the bonds trading where they are, we are not tapping the bond market at the moment. I see. Thank you. My next question is turning to the slide 11, the ERC. Could you elaborate a little bit why we see a step up in expected remaining collection in 2024 compared to 2023, and what's driving that? The key driver there is the status in the legal process where these assets are. There is a lot large part of our portfolio are secured assets and we have, you know, a plan when, where, when they will come to auction, et cetera. Some of that will take until 2024. It's also a real. To provide a breakdown, how much of that is attributable to NPL and how much is attributable to the non-NPL part of the ERC. Just give you the correct figures. Of the EUR 86 million you see in 2024. Yeah. There is EUR 53 million of that is kind of like core NPL ERC. Whereas in 2023, basically all of that is what I would call core NPL ERC. Okay. That is interesting. These other investments, in 2024 that you expect to collect upon, could you elaborate on that? What that is? Is that like a divestment of Addiko Bank or is that a revaluation? Or what is that? No. It's less for Addiko. It's has to do with the investment we hold in Omnio, which actually will be turned over into Nordiska shares anyhow. That's why from, you know, from a technical perspective, it is included here at the ERC in 2024, a portion of the Omnio investment. That will be regrouped anyhow as part of the Nordiska transaction. You would say that is the large difference then between the EUR 86 million and EUR 53 million in 2024? The largest one. Yes. Perfect. Thank you. My last question was just if you could elaborate a little bit on the view on the NPL market in your regions here in terms of competitive pressure, in terms of price development of portfolios, expected future IRR development, what are you seeing, et cetera? What we see is that, as is usual in, in, you know, when markets get a little bit more difficult, smaller markets, you see participants leaving smaller markets like, I don't know, Romania, Bulgaria. We are not active in Bulgaria, but for Romania you definitely see it, that there are some people who have portfolios there and now looking maybe to get out. Which opens opportunities for us, because we obviously are a smaller, more nimble investor than some of the others. At the moment it's the collections themselves are stable, so there's no, you know, big change in the underlying collection dynamic yet or maybe less than people probably expected so far. The key driver going forward is always, you know, what material will come from the banks. During the last 12 months, the banks have been have had sufficient capital buffers that they had no rush to sell off portfolios. I think as we now see the provisioning levels for the various categories going up, I would expect that towards the end of 2023, also banks become sellers of portfolios again throughout the region. At the moment it's still, you know, what I would say, pretty quiet and there are no big transactions happening. We see that people are reaching out again and that there are more initial preliminary discussions happening, which would point towards more transaction activity towards the middle of the year. Interesting. Competition a little bit, moving away from these regions would indicate better prices on portfolios for you guys, strengthening the IRR all else equal, no? Yes. There are opportunities, and there's also, for example, it helps with AxFina that we have, sometimes there are also people with both portfolios and services, and there it's good to approach them and giving them a solution for both. Or smaller services in Poland, for example, the number of services who had some sort of financial difficulties, and that opens up opportunities. Poland is a focus market for AxFina for example, which is quite interesting. There are pockets of opportunities for us. That said, it's clearly that, you know, the first half of the year at least, we are limited by the capital we can deploy. Either we find innovative structures where we, I don't know, team up with somebody or do other structures. We need to be highly selective at the moment given our own cost of capital. I understand. Thank you so much. As a reminder, if you wish to ask a question, please dial star five on your telephone keypad. There are no more questions at this time. I hand the conference back to the speakers for any closing comments. Thanks, everybody. Obviously, I think we will definitely make an announcement when we close Nordiska. I think that's the key item to watch out for. Otherwise, always feel free to reach out to Fredrik or myself if you have any questions. Thank you. Bye. That concludes the call. You may now disconnect.