Welcome to the DDM Holding Q1 Report 2023. For the first part of the conference call, participants will be in listen-only mode. During the question-and-answer session, participants may ask questions by dialing star five on their telephone keypad. I will now hand the conference over to the speakers: Executive Chairman, Andreas Tuczka, and CFO, Fredrik Olsson. Please go ahead. Good morning. This is Andreas Tuczka. Welcome to our Q1 2023 report. Today’s agenda includes a business overview of recent developments and our current standing. Our CFO, Fredrik Olsson, will review the financials, and I will conclude the presentation with closing remarks. We are focusing on higher-margin deals within the NPL segments; however, the anticipated supply levels for these transactions have not yet materialized. Adjusted gross collections exceeded expectations in Q1 2023, despite the challenging macroeconomic environment, political uncertainties, and the market conditions previously characterized. As a reminder, the European Bank for Reconstruction and Development (EBRD) is the other co-shareholder. In Q1, we converted our convertible bonds in OmniOne, our embedded finance Banking-as-a-Service platform, into equity. This conversion was planned in conjunction with the transaction announced in October 2022 to combine Omnio with Swiss Bankers and Nordiska. The group's structure reflects our focus over the past two years on pan-European investment across various business lines. Our primary interests include financial services, consumer finance, and embedded finance. We currently hold a 9.9% stake in Addiko Bank and a significant shareholding in Omnio, our embedded finance platform. One significant special situation is our involvement in Italy, specifically regarding real estate opportunities on Borsa Italiana. Turning to page 5, I will provide further detail on Omnio, our cloud-based banking platform. While our origins lie in the non-performing loan segment—providing solutions for non-performing consumers—our strategy is to move upstream to address the unprofitable consumer segment. Omnio is a scalable, white-label platform where DDM is now the largest shareholder alongside approximately 100 co-shareholders. Although the planned combination with Nordiska and Swiss Bankers was terminated in April, we are currently assessing opportunities for the platform and its compatibility with our other businesses. We intend to present further strategic solutions during the current year. Poland is a key market for AxFina and the company remains active in Romania and several other emerging European countries. The strategy focuses on third-party and captive servicing solutions for DDM, specifically regarding business process outsourcing and collections. Digital solutions are a priority, and we utilize an in-house proprietary platform called Finastic. Please turn to slide 8, which illustrates the DDM Debt Group income statement for Q1 2023 compared to the prior year. Interest income on invested assets for the quarter was largely in line with Q1 2022. However, the corresponding period in the prior year benefited from a EUR 1.7 million upward revaluation of portfolios across the Balkans following the lifting of COVID-19 restrictions and improved economic expectations. Operating expenses increased by EUR 2.7 million year-over-year, following the acquisition of AxFina at the beginning of Q3 2022. Financial income totaled EUR 4 million for the quarter, supported by a EUR 3.6 million mark-to-market gain on the Addiko Bank investment. This follows improved results, the reinstatement of a dividend, and the announcement of a share buyback program, compared to a EUR 3.4 million loss in Q1 2022. We hold EUR 171 million in invested assets across portfolios, joint ventures, associates, and financial assets at fair value. Our liabilities consist primarily of long-term bonds maturing in April 2026. Additionally, we secured a EUR 4.5 million Revolving Credit Facility (RCF) with a Swedish bank during Q1. As illustrated in the upper right-hand corner of the slide, approximately two-thirds of the ERC for the next three years is secured. This demonstrates the strong credit value of our future collections. I will now hand the presentation back to Andreas for the concluding remarks. To summarize, our strong cash position—maintained following the termination of the Nordiska transaction—provides significant flexibility. We are currently evaluating several transactions in both the NPL and financial services markets. We anticipate an increasing volume of attractive investment opportunities emerging in the coming months. We will focus on the AxFina rollout while enhancing our embedded finance and digital solutions. These capabilities are increasingly critical for all financial services companies, including DDM. This concludes our formal presentation. I will now hand the call back to the operator to open the floor for the question-and-answer session. If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. To withdraw your question, please dial star five again. The next question comes from Patrik Brattelid from ABG. Please go ahead. I have a few questions regarding collection performance. Could you provide more detail on recent performance and your outlook for the coming years? Additionally, could you clarify how the collection performance in Q1 compared against your internal forecasts? As outlined on slide 10 regarding our expectations for 2023, the primary factor is that as the NPL book runs off, collections will naturally decrease over time unless replaced by new portfolios. Although the market remains tough, we are identifying potentially attractive opportunities within the NPL sector. Andreas, do you have any additional comments? As we have diversified the business, DDM has evolved into a more varied investment company. While collections remain a significant component, our strategy depends on where the best opportunities arise over the coming months. We will decide whether to increase our position in NPLs or in our other business lines based on market conditions. That would obviously increase the focus on collections again. Could you discuss the internal rate of return (IRR) on the front book versus the back book? Given that the cost of capital has increased, at what IRR level do you find investment in these types of portfolios sufficiently attractive? Our cost of capital for the bonds is approximately 9%, or nearly 10% when including all associated fees. Additionally, our operating expenses (OpEx) add another 2% to 3%. When accounting for liquidity costs and risk premiums, it is clear that a mid-teens return is the minimum required to maintain profitability. Target returns were difficult to achieve in 2022 and remained challenging through Q1 2023. Currently, the cost of capital is increasing rather than declining. We must observe how NPL market pricing adjusts in response. To date, we still see significant liquidity from competitors, many of whom are larger entities with substantial operational requirements to satisfy. Inflationary pressures will inevitably increase costs for every servicing platform, even those in lower-cost regions of Emerging Europe. Consequently, one would expect internal rates of return (IRRs) to move higher. Ultimately, this is a matter of supply and demand, determined by the number of active competitors, the depth of their liquidity, and their urgency to deploy capital. That covers as with covers the topic thoroughly. Following up on that, could you state the current IRR on the back book? Is that information available? I do not think that we have with the definitive we have not. is not available for disclosure at this time. I understand. Given this liquidity that you now sit on the cash position of EUR 57 million, you're not seeing an attractive market as of now. It sounds like you're hoping that 2023 will turn out better towards the end of the year for NPL. What do you think about this cash position? Are you want to buy more NPL portfolios, or are you looking to buy back bonds, or how should we think about this? As we have indicated, yes, we are looking to buy NPLs at the right IRRs. We are happy to buy platforms and servicing platforms, and adding that into AxFina. We are happy to find Banking-as-a-Service in the platforms f or Omnio or banking solutions, combining this with Omnio. As every company, asset liability management, definitely things which we will, we will look, but these are the four ways where we are focusing now to deploy the cash. The view on buybacking and buyback bonds was not included there. it is more on these other type of acquisitions than I should assume going forward. We prioritize three business lines alongside asset-liability management. These represent the four pillars of our strategic framework and how we evaluate capital allocation. Moving on to the Omnio deal, the final bullet on slide 5 mentions that you are reassessing the investment opportunity. This suggests a potential divestment. Am I misunderstanding the situation? Are there any ongoing discussions, or could you clarify how you view this platform’s trajectory over the next few years? Predicting a trajectory several years down the road is difficult in this segment because it evolves rapidly. However, Omnio is a compelling platform capable of providing financial services to non-core retail customers across Europe. Just as banks shifted away from serving non-performing customers—which established the debt purchasing and collection markets—we see a similar trend in the retail sector. Given the scale of this opportunity, we are reassessing the investment through several potential paths: a strategic combination, a public listing, a divestment, or further internal investment. In this fast-moving segment, it is essential to remain agile to capitalize on the right trends and secure the most effective partners. Consequently, 2023 serves as a pivotal year for this reassessment. Thank you. My last question, I know I've taken up a lot of time and questions. Sorry about that, but, is regarding AxFina. Can you talk a little bit about how you see demand for AxFina's services? I think, what we have established here is a clean, cut, and very understandable position on a servicing platform. We know what we are earning on collections, and we know exactly what it costs to service. We were always very open and quite skeptical about amalgamating and merging servicing costs and investment income into one big balance sheet. We want to have a separate companies. We also want AxFina to be open for third-party servicing. They are winning mandates in their markets as we speak. Also, digital solutions are super important. What do we mean here? Our strategy is centered on an app-based approach, utilizing push notifications for consumer collections. This provides a Software-as-a-Service (SaaS) value proposition to large corporations managing high volumes of small-ticket debt. AxFina is focused primarily on third-party loan servicing and collections, as captive management.We believe these digital solutions are essential for the efficient recovery of smaller tickets. Regarding the shift in demand, have you seen an increase in activity during the first quarter of 2023 given the tougher macroeconomic climate, or do you expect that supply to materialize at a later stage? You mean in general about the NPL markets and the pickup and the collections or? I am referring specifically to the servicing side of the business. Other debt collectors have reported a strong increase in new case inflows during 2023. I would like to know if you share that view. Is demand for AxFina’s services accelerating, or has it remained consistent with the levels observed in 2022? The macro trend of large corporations and financial institutions outsourcing collections to third parties is firmly established and expected to continue. We do not anticipate a shortage of supply in this regard. The challenge lies in securing these contracts while maintaining a highly profitable and cost-efficient servicing operation. One needs to be very cautious on the cost side here, and therefore need to invest i n technology-driven solutions. As a last follow-up there, how much of the revenues for the company comes from the AxFina business? AxFina generated approximately EUR 10 million to EUR 12 million in revenue last year, with an EBITDA of roughly EUR 3.5 million. This reflects the current profitability profile of the servicing platform. Perfect. Thank you so much for answering all my questions. Pleasure. Thank you. The next question comes from Gustav Larsson from Arctic. Please go ahead. Good morning. Regarding the consolidation of AxFina as a majority-owned subsidiary, we note that operating expenses have increased significantly year-over-year. Could you provide a like-for-like comparison of OpEx and discuss the measures you are implementing to combat wage inflation moving forward? We are focused intently on cost management within AxFina, and the CEO of that platform is responsible for maintaining strict fiscal control. We are not increasing costs within DDM itself; rather, AxFina remains a separate, ring-fenced entity. It is a standalone, profitable company focused on growth and independent profitability. I hope that is clear that we are, that we are not doing this, and this is really run as a separate company. With regard to the likes for likes, if you can address that question. Yeah, no, I think it is a little bit difficult considering that AxFina has continued to grow. They also acquired, made a smaller acquisition in Poland. I can't give you a very good like to like, since it is, let's say, it is a rather young business and it is been continuously growing. I think as Andreas said yes, we are keeping a very let's say, an eye on the cost, making sure that inflation and limiting inflation as much as possible. Otherwise, we'll have to come back to you with let's say, more specific numbers afterwards. Typically our DDM, core people, yeah, who are not in operating companies. This is a very small amount of people which we are running here. Therefore, which are anyway, high-paid guys. Therefore, here, I think the inflation cost, will not hit us too much. Thank you very much. Another question then on AxFina and investment in DDM in general. Has your appetite on the claims mix changed following this acquisition? You have increased unsecured exposure to 1/3 from previously 20%. Is this something that is related to AxFina? We are an opportunistic investor. we want to see high IRRs, as I've mentioned before. Where we see the right portfolios, the right businesses, we will invest when it is in our core markets and around the assets, loans, and financial services businesses which we know and which we understand. Yes, there is a shift in this regard, but I think it is opportunistic driven, not focus driven. Opportunistic driven very much means IRR driven. Thank you very much. I have no further questions. 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, so I hand the conference back to the speakers for any closing comments. t hank you, ladies and gentlemen, for your interest. I think, you also see on the last page of the presentation, the next report. This is the 29th of August, and the AGM will be hosted on the 29th of June. Thank you for your interest, and goodbye.