Welcome to DDM Debt Q3 presentation for 2023. During the questions and answer session, participants are able to ask questions by dialing star five on their telephone keypad. Now, I will hand the conference over to the CEO, Razvan Munteanu, and CFO, Fredrik Olsson. Please go ahead. Ladies and gentlemen, good morning. Welcome to DDM's update after the third quarter of 2023. I am Razvan Munteanu, and together with Fredrik Olsson, we'll present our results, share our views for the short term, and answer the questions you might have at the end of the session. As customary, we will share the view from the business in the first part, and after that, we will look in more details at the financials at the end of September. At the end, as I mentioned, we will take questions from the audience. So let me start. I'm moving now to the first content page. Over the past few months, we continued to work on sharpening our strategy and focus. Without reshuffling much, we narrow our priorities, and I'm confident this is very good for the team and also for the consistency and the transparency in our communication. There are three important, important areas for DDM, and I list them in order of their priority to us: NPLs, servicing, and consumer financial services. First, purchasing NPLs. We target transactions in our geographies of predilection in Central and Eastern Europe, where margins and IRRs are still attractive. We also look broader than CEE when we can target transactions which are too complex for smaller players and not big enough to attract bigger players, which are usually depressing the margins. Second, we continue to push the servicing through AxFina. With over EUR 1.5 billion notional amount under management across five markets, we see ourselves on a good path, making this a success story, building together with EBRD, a regional servicer, using digital capabilities for efficient collection. This is key to well-functioning credit markets and therefore a very relevant development, very relevant investment, on our side. We remain focused, and this is the third area, to the consumer finance and embedded finance through our Addiko and Omnio investments. We see improvements in both organizations, content, stable performance, better financial. It gives me confidence, therefore, that we come closer to the moment when we will be able to monetize these key investments. Let me illustrate on this page the summary of our quarter. First of all, we had a marked shift, as I mentioned, towards our core NPL activity. Three specific deals I would mention, and I will come back to this on the following pages. First, we signed the acquisition of an NPL portfolio in Romania, with closing expected to happen early in December. Second, AxFina acquired E-Kancelaria. The signing was in Q4, but most of the work was done in Q3, so I think it was relevant to share this with you. Third, we completed the sale of Borgosesia, and through this we demonstrate that we can monetize profitable key investments. Second important part of that quarter relates to streamlining the group and, in more general terms, adjustments in group governance. We completed the delisting of DDM Holding AG and start the simplification of the group this way. Andreas Tuczka, a key figure who decided to leave the group, was replaced in the board by Keith Halsey. Third important aspect of the quarter that I would like to share with you, obviously, regards the financial performance. It was more modest in the quarter, with a seasonal slowdown, combined with certain delays in collections from our secured portfolio, which led to a year-to-date loss of EUR 4 million. This is somewhat compensated by a strong cash position at EUR 33 million and a positive outlook for collections in 2024, based on the regular re-underwriting and validation our value-- our various portfolios. Let me take the main areas one by one and give you some views on them. First of all, on the non-performing loans. I mentioned already several times our renewed focus on NPLs. Over the past couple of quarters, DDM prioritized the core business. The interest rate environment, the challenges to the debt purchasing industry, also the high volatility in general in the global context, should create interesting opportunities. It should be both in the secondary market as well as in new NPLs. In my view, less opportunities than what we expected, given this overall environment actually materialized. I'm, however, quite confident that they will come up, and we're holding to good liquidity position, exactly to take advantage of the context as it continues to evolve. On the transactions that materialize for us, the most important are in Romania and Poland. In Romania, we come closer to scale through the acquisition of a portfolio of 1 million consumers and EUR 1 billion gross collection value. This consolidates our and AxFina's position in a very good market. E-Kancelaria in Poland is also a very good step in the consolidation of the servicing market, and it strengthens our position in the biggest market in the region, both for DDM and AxFina. An interesting aspect that I want also to cover is our position on our growth assets, and I would like to spend a few moments on this. We actively work on improving our growth assets and creating paths, a path towards liquidity for each of them individually. On the right side of this page, you have the balance sheet view, and please allow me to cover a few of the key positions. First, Addiko. It continues to perform well, and I am convinced that the sustained performance, their dividend distribution, and our activities to socialize the asset, will eventually draw attention to this underpriced stock and allow a profitable monetization for us. Second, the team works hard on the SPAC position. We see interesting developments with key targets for the SPAC. In this context, in the next half of the year, we anticipate that our position will crystallize here, and we'll be in a position to provide you clear guidance. Third, Borgosesia, I mentioned earlier. This demonstrates that we can succeed in monetizing in a profitable manner our investments. And finally, I want to mention again, AxFina, an important investment of ours. We're confident in the positive success story developing here under EBRD and our oversight. We maintain a consistent strategic approach, consolidate the position in core markets, and diversify the revenues through third-party collections. Before handing over to Fredrik on the financials, as I promised last quarter, I provide the audience with a bit more color about Omnio. Please let me spend a couple of minutes on this. I'm increasingly confident in the path to success, considering the progress we achieved with our midterm plans. Omnio is active in a very exciting area of financial services, banking as a service, and embedded finance. There are many businesses in the business- to- consumer, B2C, perimeter, which are interested to engage more with their customers by offering direct payments and lending services in a cost-effective and simple, accessible manner. There are four key aspects I would like to mention on Omnio, and they reflect why I'm confident in this investment and its perspectives. First, since the beginning of the year, we have new management in place, and they brought in a solid sense of focus and financial discipline. This way, they reduced the financing needs in order to achieve cash flow positive status. Second, the content strategy of Omnio is very clear. Not more, not less than banking as a service and embedded finance. Both are fast growth areas in financial services. Omnio will enable large customer-focused organizations to increase the engagement with their customers by combining loyalty with payments in a profitable manner. Very important, this is supported by simple implementation mechanics. This is an essential differentiator in this perimeter. Third aspect, we base the growth plan on existing business to business to customers approach. So we have interaction with other businesses, which in turn are passing the services to their own customer base, which is an essential approach in order to reduce the cost of acquisition of customers. So we're basing our growth plans on existing B2B2C approach, where we have service agreements with an extraordinary portfolio of customers. Last, and not least, the corollary is a credible path to profitability in the next three years, supported by an exciting set of indicators, such as EUR 40 million annual recurring revenues, 48% gross margins. So in summary, our focus and steering of Omnio can be defined as follows: strict discipline and focus to limit the further investment needs, acceleration of content and revenue to demonstrate the value of the model, and finally, engage with diverse investors and third parties to set a path to monetization between now and 2026. With this, I hand over to Fredrik for the financial details before taking your questions. Thank you, Razvan. Please go to slide nine. It shows the DDM Debt Group income statement for Q3 and the first nine months of 2023, compared to last year. There are a few things to highlight. Interest income on invested assets for the third quarter was EUR 3.3 million, EUR 2.9 million lower than the third quarter of 2022, mainly due to lower gross collections, as already mentioned by Razvan. The expected timing of the collections on some secured cases was postponed, resulting in a negative revaluation of EUR 1.3 million in the quarter. Hence, collections now are expected to take place at a later point in time. The share of net profits of associate and joint venture in Q3 2023 was EUR 1 million, benefiting from continued good performance by the Solaris joint venture. Operating expenses increased by 1.2 in Q3 compared to last year, following the acquisition of a further 25% of AxFina at the beginning of Q2 2023. Financial income for the quarter benefited from EUR 0.9 million fair value gain, recognized in the income statement relating to the investment in Addiko Bank, due to an increase in the share price in the quarter. Along with a EUR 3.6 million gain in the first quarter of 2023, being offset by a 4.1, let's say, fair value loss recognized in the financial expenses in the second quarter of 2023, resulting in a net EUR 0.4 million fair value gain for the first nine months of 2023. The third quarter of 2023 also benefited from a EUR 1 million gain within financial income due to the repurchase of EUR 3.8 million of the DDM Debt AB senior secured bonds at a discount. This resulted in about EUR 168 million of bonds outstanding at quarter end. The net result for the third quarter was therefore a loss of EUR 4.4 million, compared to a profit of EUR 1 million in Q3 2022. Please turn to the next slide. This slide shows, as you've seen in the past, the DDM Debt Group balance sheet structure as of 3rd September 2023, with total assets of EUR 232 million. As already mentioned, we have a strong liquidity position of EUR 33 million of cash available to fund investments and acquisitions to capitalize on the market opportunities. We also have EUR 164 million of invested assets across portfolios, joint ventures, associates, and financial assets at fair value. Our liabilities are mainly long-term bonds, which mature in April 2026. We also have a small RCF of EUR 4.5 million, as previously mentioned. Please move on to the next slide, which shows our ERC. The ERC amounted to EUR 246 million at the end of Q3, a EUR 38 million decrease from 31st December 2022, mainly due to collections that was being received during the first nine months of 2023, partially offset by acquisition, acquisitions. Please note, however, that the recent acquisitions in Romania and Poland are not included in the ERC as of 30th September. This is expected to be, let's say, included at the year-end, as we expect to close the two transactions or both transactions expected to be closed here in the quarter. At the end of September, 75% of the gross collections are expected to be received in the next three years. And with that, I would like to hand the word back to Razvan for some final remarks. Yeah. So, before taking your questions, let me repeat what I see important as takeaways from our third quarter's activities update. First, weaker collections and financial performance are compensated by a strong cash position and a positive outlook for 2024. Second, we focus on NPLs in the last few quarters, and results will show this. Third, we actively work on our growth assets in the portfolio, both to increase their value and to create paths, credible paths to liquidity. With this, I thank you for the attention to our presentation and open the floor to questions. ...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. Yes, a couple of questions from my end. Let's start with the Romanian NPL transaction. In the Q2 report, you expected that transaction to close a month later in end of September, but now it seems to be end of December. What was the reason for the delay of the close of that transaction, please? It was a regulatory approval. We had to wait for the regulatory approval, which we just received, so there was nothing else but administration. Okay. So from this point, you're fairly certain that end of Q4, or is it something you still are waiting for some final details? No, no, it is done. Okay, perfect. And then, what is the expected ERC benefit of this transaction? Let's say, you know, the purchase price has been communicated by the seller. As time has passed since, you know, this transaction was agreed, the purchase price should be assumed to be, you know, lower than what has been communicated by the seller. I think in terms of the ERC, I think there's, you know, rough estimate could be, EUR 20 million. But I have to say that as we onboard the portfolio right now, as indicated, we had a slight delay because of the regulatory approval. As we onboard the portfolio, we're validating and revalidating our underwriting case. And I think it would be fair to come back with an answer to this in our next call once AxFina has taken over the servicing of the portfolio. But again, as a guiding number, you can use the EUR 20 million that Fredrik indicated. Thank you. And you highlighted here that the purchase price had has been slightly reduced. I think Intrum highlighted in the press release it was EUR 17 million, if I'm not mistaken. Can we get the, like a rough understanding of how much of that price has been reduced? Are we talking 10%, or are we talking a larger number, or how should we think about this? It's a larger number. You should see the... I believe, what the seller, communicated as well was that it was the gross purchase price. You know, in many transactions, there is an agreed purchase price that, you know, with a reference date. If, you know, then the collections are, you know, happening between the reference points until you pay or close the transaction, that normally reduces the purchase price. So you should expect a much more, let's say, a little bigger reduction than the 10%. There is a mechanic to the price that includes the ongoing collection since the closing date, since the set date. And then, there is an element of cash, and then there is an element of sharing proceeds of collections in the future. So, the cash outlay is a combination of all these elements, and it will be lower by a factor of higher than 10% you indicated. Okay. If we look at Intrum's reporting, the multiple on ERC versus the portfolio's book value is just above two, and if you expect an ERC of 20-ish, then is it fair to assume it will be closer to 10 then? That's probably a fair assumption, yes. Okay. Thank you. Continuing on the ERC, we see a large shift here in the ERC curve from 2024 to 2025. Can you highlight again, please, a little bit more in detail what has caused this shift, and what has driven this change, please? Well, I would say that the fact that we had a bulk of ERCs into secured portfolios, these have sometimes less predictable collection pattern, and we had certain seasonal delays. There were some legal changes in the Croatia, Slovenia perimeter. So, mostly these administrative things and the seasonality of it are driving the collection patterns, given the fact that we have a considerable amount in secured portfolios. Now, with the acquisition that we mentioned in Romania, we start- ... shifting into more, we have a bigger book in unsecured, which will give us better predictability from a timeline perspective. Okay. Thank you. Continuing on collection, you highlight yourself in the report that a gross collection and adjusted Cash EBITDA was lower than we have seen historically. Can you please talk a little bit about how the collection performance is impacting this? And if you are at a level which you are satisfied with, and how do you expect this to develop if we're looking into the coming 12 months, given that you have a positive outlook on the debt collection market? Yes, I think, you know, let's say, as Razvan mentioned earlier, there were a few, let's say, sizable cases, so secured cases that were postponed, I mean, resulting in the negative revaluation in the quarter. So once again, it's not that, you know, there is no expectations on the collections, it's rather a delay of the collections. I think that's one thing. Of course, also with, you know, a shrinking NPL portfolio, of course, the expectation is, you know, collections will, by default, go down. However, now, with adding back, let's say, making new acquisitions into NPL, we expect, you know, to, to add on to the ERC curve, you know, counterbalancing part of this. But we cannot. We don't have any, you know, big concerns in terms of, you know, that suddenly the secured collections are not working anymore, or, there's, let's say, there's nothing, let's say, you know, versus one quarter ago, that the market has changed in a significant way. Okay. Thank you. But, like, there are some peers to you that are highlighting very weak collection performance in the low 90%, while other peers are delivering collection performance above 100% compared to the active forecast. Mm-hmm. What can you say about your collection performance? Are you, are you satisfied? Can you highlight the percentage, if that's available? This we have not communicated, but I think as said, of course, we're not, you know, happy with, let's say, collections not, not coming in as expected. I think it would be, can't say, let's say anything else. However, as, as said, we see it as a delay of the collections, not that collections will not happen. So yeah. Razvan...? Yeah. No, I think I wouldn't necessarily mention a percentage other than saying that, we're not in low 90s, we're above that. But, we're actively looking at portfolios and, as Fredrik indicated, we have a number of large secured cases which are simply postponed. We're very confident in their value and in the ability to collect. In terms of strict performance, I'm rather satisfied, but again, the portfolio is less granular right now, and as a consequence, you know, you see this lumpy effect where, in one quarter we might considerably overperform, but then, in another, a bit less. And as a consequence, we shifted focus in rebuilding NPL portfolios and ERCs. But we're very cautious not to jump the gun and, you know, buy NPLs only to build the volumes without having the IRRs. We believe that the profitability is as important as the volume. So, we're very picky on what we make offers for. I've shown a number of transactions that materialized in the quarter. I can tell you that in terms of pipeline and offers made, quarter three was much more active than before. But again, the fact that not more deals materialized indicates, or I would say, is a consequence of the fact that we're very cautious on the IRR front as well. Again, I do not have concerns with regards to the collection performance. It seems to be... Well, I'm quite satisfied, and overall, the only aspect is the one that we mentioned, a delay in some larger cases of secured loans. Thank you. Moving on to looking at the equity ratio, it stands at, you report 20%. Correct me if I'm wrong, but I think your financial covenants, according to the terms and conditions, is to have it at least at 20%. How are you working with this ratio, and what do you expect, how this to develop going forward? No, let's say, first of all, of course, just, you're correct, that it's 20%. However, of course, also very important to mention that is not maintenance covenants. ... but it's of course something that, you know, we are discussing and, you know, raising with the board of directors and also with the owners. I don't think that we, at this point in time, can provide guidance on the equity ratio. This is something we'll, you know, as an ongoing discussions with the board and owners, we'll discuss and have to come back to you on. Okay, thank you. My last question is on Omnio, very, I like the fact that you, you highlighted it on a, on a slide like this. Just on a clarification point, the, the, last bullet, on the, the, on the right lower side, is that—those numbers that we see there, are those the targets by 2026? Or is that what we have? Yes. These, these are, to be, to be perfectly transparent, these are the run rates that we'll achieve, at the end of 2026 on an annualized basis. Okay. So in very, very current terms, this would be quarter four 2026, based on our best case scenario right now. So it's not the upside scenario, it's not the downside scenario, it's our base, best case scenario, in the current plan. Great. Then, my follow-up is, can you give some flavor on what the year-to-date numbers are for Omnio in terms of income, profits, and cash flow, and how that has developed compared to a year ago? The only guidance I would give is, well, or the only transparency I can offer without having the numbers detailed, is that the improvement is very material compared to the previous year, and at this stage, they're still cash flow negative. Okay. However, the burn, the burn rate has deteriorated, has improved, has reduced considerably. Okay, I understand. Thank you so much for answering all my questions. Pleasure. Thank you. The next question comes from Gustav Larsson from Arctic Securities. Please go ahead. Good morning, and thank you for taking the questions. A few follow-ups, I guess, from Patrik. Regarding the adjusted collections, if we include associates and JVs, how should we think about the timing between quarters? One thing is delays, of course, but is there some seasonality patterns outside the normal NPL seasonality that we could consider, or is it just discretionary and lumpy by nature? I mean, there is, I mean, with the seasonality, if we think in terms of the Q3, there is, of course, the, let's say, impact of the summer period, especially, you know, in markets such as Croatia, courts not operating as normally and, you know, also, you know, in general, market not being as active in the quarter three as, other, let's say, quarters. But it is, let's say, lumpy by nature very much, as you've also seen in the past. But I, I, I would also add that, you know, the lumpiness becomes more visible as we progress, in time through various portfolios. Obviously, we have more polarized portfolios with a combination of high tickets, which sometimes are less, I mean, but we remain very confident in their value and smaller tickets, which again, also might take less path. We compensate this as indicated by looking, becoming more active and more focused on the NPL market, and anticipating that in the context of the market, you know, with interest rates high, with the general difficulties, I would say, of the industry, which would create opportunities on the secondary market, and in general, with the volatile political environment we're in. We believe that there will be opportunities, and we believe there is a virtue in us being patient with cash position we have in order to target interesting portfolios going forward. So we're looking into that, and we make this a priority, as I mentioned. Thank you. Regarding the Romanian portfolio, can you perhaps give some more granular details? How does it look like compared to your existing NPL portfolio, split between secured and unsecured? Does it come from the financial sector, those kind of characteristics? So then we maybe can understand the ERC profile a bit better. Yeah, it's what I would share is that it's all unsecured, and it is a mix of financial services and telecoms and other utilities. I wouldn't venture right now in sharing splits and other details, but it is the entire portfolio is unsecured. And again, it's we have both financial services and telecoms, mostly. Okay, thank you. Regarding Borgosesia, you mentioned it was a profitable exit now. Can you comment about this now in retrospect, as an investment? Is this the kind of investment you would consider also going forward? I think we can comment, yes, I think it's definitely an investment we would consider to, I mean, or a similar transaction we would consider again. However, as you might remember, let's say from the very beginning, we communicated that that was the, the intention was to have, the cooperation with this, local third party. So making a, you know, a combined investment together as the starting point and then to add on additional, let's say, opportunities to this platform. This for, you know, a number of reasons, didn't, or we decided not to go ahead with this, and, sorry, and instead exited. So it once again, you know, we are very, let's say, I think, you know, diligent in terms of where we want to put the money into the NPL portfolios. We believe that, you know, it was the right thing to exit this one and instead, for example, go for this opportunity in Romania. So it's, it's actively managing the portfolios, on a continuous basis. Maybe what I would add, as I mentioned, so we're focusing on NPLs for sure, but we're also looking at opportunistic transactions which have these characteristics that I mentioned earlier. They're complex or too complex for smaller players and not so big so that they attract large players, which often depress the price. So we're looking at these things quite actively. What I'm very satisfied is to see the focus and the serious discussions internally with regards to path to liquidity on any such new investment. Okay, thank you. So my last question then, how should we think about, liquidity in a fully invested DDM? You have, stable cash quarter on quarter, but how much do you need to operate, and how much, would you want to invest, until you are fully invested, so to speak? I mean, as communicated, we had EUR 33 million of cash at the end of Q3. Obviously, that's, you know, still a significant number for us in cash. We've, you know, considering in a, let's say, fully invested basis, I would say that, you know, that number should obviously go down significantly. At the same time, considering the lumpiness of the business, we also do need to have, you know, a cash buffer to reflect this. On the other hand, you know, I think it's important to stress once again, which unfortunately, you know, makes the forecasting more difficult. But once again, as Razvan mentioned, to just give one example, it should not be forgotten that there is, you know, EUR 20 million plus of value in Addiko Bank. It is, you know, an asset that is being considered to be, you know, a path to liquidity, which should not be, you know, forgotten when thinking about liquidity here going forward. And, you know, there is Addiko Bank, is, of course, part of, you know, the, let's say, expectations of liquidity in the coming years. But, you know, we're working actively on this, and should therefore be considered or could therefore happen, you know, much faster than, or much earlier than we have currently in the plan. Okay, thank you very much. That's all of my questions. Okay, thank you. Thank you, Gustav. As a reminder, if you wish to ask a question, please dial star five on your telephone keypad. The next question comes from Frank, from Salo Capital. Please go ahead. Yes, good morning, and, first of all, thank you, Razvan. On the last call, I inquired on Omnio, and you have delivered a few pages or a page now, and that's most appreciated. And, I think it's very important that, when bond trade in the low 70s, it's, it takes a bit of communication from the management of the issuer, to convince the bondholders to hang on to their bonds. So, yes, so thank you for that. I do have a follow-up question on, on Omnio, and that is, if you look at that plan, 2026, does it require further cash injection from DDM into Omnio to keep, or to execute the plan? Or do you see a cash buffer in Omnio that's sufficient to cover the cash consumption over the next couple of years or next one or two years until break even? That will be my first question. The second question is on buybacks. I noticed that you have done a small buyback, and I was wondering if that's more from an opportunistic point of view or if you would be interested in doing more, et cetera, et cetera. Thank you. First of all, thank you for appreciating. I think it's part of a culture, and I'm sure that DDM will demonstrate in the future, which is better transparency and, you know, keeping our promises. If we say that we'll talk about something, we will. So, but thank you for noting that and quite appreciate it. On the Omnio question. There is a need for further cash injection in Omnio, in order to achieve the plan that we mentioned here. This is not in the overall scheme of things a very significant level, but more important than that, we do not associate it at this stage with a DDM commitment. Mm-hmm. What we're doing is we're actively talking now with the other investors in Omnio in order to step up in terms of supporting the relatively small amount that they still need on their path to cash flow positive status. So, we think again, that the plan is now very credible. It's not just a paper plan. Mm-hmm. We believe that other investors will be now willing to shoulder the cash needs that Omnio still has to achieve that. Yeah, that's what I can say on that topic. So, Fredrik, maybe you can cover the question on the bond buyback. Yeah. I think it should be seen as, you know, opportunistic trades as you said. As mentioned before, we bought back EUR 3.8 million of bonds in Q3, resulting in... It's something that, you know, is evaluated basis whether to buy back more bonds, and that to, you know, if there are any of the other assets that are, you know, liquidated, creating more liquidity and then could be used to, to, let's say, extend or, you know, larger buybacks. That might be supported as well by our positive outlook of collections in 2024. Mm-hmm. But you know, we need to be very pragmatic and address it on a continuous basis. Seasonality was not optimal in terms of collections in Q3, so therefore we need to balance with that. All right. Thank you very much, and good luck in executing quarter four. Speak again in February. Bye-bye. Thank you. Thank you. Bye. There are no more questions at this time, so I hand the conference back to the speakers for any closing comments. Well, I guess if there are no further questions, we thank you very much for the attention. We wish you a very happy and successful end of the year, and we look forward to talking to you in 2024. Thank you very much.