Good morning everyone, and welcome to this call. I'm Lars Wollung, CEO of Hoist Finance. With me, I have our CFO, Christian Wallentin. Good morning, everyone. Our Communications and IR director, Ingrid Östlund. We wanted to explain a little bit more what we have done and why we have done that and then open up for questions. We thought it is most useful for you if we have a very short introduction and then we open up for questions so that we talk about things that you are interested in. Let me start by summarizing then the situation. We have entered an agreement with Lowell to sell our subsidiary in the U.K. containing the debt collection platform for unsecured credits. With that, in that package is also then our complete unsecured credit portfolio in the U.K. The reason is that our returns in the U.K. have been low for many years. We've concluded that to be successful long term in a highly regulated market with substantial fixed and semi-fixed costs that requires scale, and currently, our platform does not have that scale. In addition, we have not been able to acquire enough portfolios with sufficient net IRRs to make the whole equation work. That's the underlying reason for why our net returns have been low in the U.K. for many years. We think the fit with Lowell is good. Lowell is one of the two largest companies in the NPL sector in the U.K. With this acquisition, they will become the clear market leader. They expand in financial services in the U.K., which is what Hoist Finance UK is all about. The strategic fit is good, so we think this is a good place for that platform and our local people in the U.K. The deal represents 19% of our total credit portfolio. It's a fundamental transaction, so to speak. It means that we will be able to refresh a substantial part of our total group portfolio, replacing low-yielding assets with hopefully higher-yielding assets. The closing is expected in quarter three. It's business as usual for a number of months still. The plan is to close when we got all necessary approvals sometime in the beginning of quarter three. I think I stop there with the introduction, and then we just open up for questions. Operator, do you open up for questions? Yes. Sorry, I was on mute. Thank you. The first question we've received is from Jacob Hesslevik, SEB. The line is now open. Please go ahead. Yes. Hi, good morning, everyone. Can you hear me? Yes, we can. Perfect. You have a secured debt in the U.K. of SEK 240 million. My question is this also for sale? Will you exit altogether going forward, you know, the U.K. market, or what's your future in this country? Yeah. That's an interesting question. The way we look at the U.K. is the following: It's one of the larger NPL markets in Europe. It's an advanced market. The consumers, a good part of the consumers, prefer to work digital way and to be communicated with through digital channels, which is attractive. All in all, we see that the U.K. market is attractive. We will be open to acquire portfolios in the U.K. going forward. But it will be portfolios where we have clear competitive advantages, or bilateral relationships. We will not participate in the large bank auctions, since we believe that we were not able to motivate that from an IRR perspective. If we buy new portfolios in the U.K., we will not build up a new platform ourselves. Instead we will use partners to do credit management services on our behalf. We think Lowell is well-positioned to be such a partner, but there are also other great DCAs that we could use or partner up with for the practical collection work on the ground. We have an investment appetite for U.K. We don't have an appetite to run a collection organization. That's the summary. Okay. Thank you. Very clear. You're clearing out the non-performing units or where you deemed to be small, too small. We could also expect more transactions like this across other European countries or how should I view today's statement as? If you take our total group portfolio and divide it into the countries, U.K. is a large part of our group portfolio, and it has been underperforming for a long time. That is not true for the other countries. It means U.K. is a bit of a special case for us. We don't foresee now that we withdraw from any other country. However, we will do everything we can to meet our financial objectives. One financial objective is a return on equity exceeding 15%, and we will do everything we can to reach that goal. That means if we have an asset class in a certain country or an individual portfolio that doesn't contribute to the goal, then we will take action. The first action is to adjust the collection strategy and increase efficiency. If we can't do that, then it's to outsource collection services to the best-in-class provider for that exact type of credit in that specific country or even part of a country, to improve cash flow. The third option is to divest. It's to sell portfolios or parts of portfolios that does not work well for us. I foresee that we will look upon ourselves as an active asset manager, where we work with our balance sheets in the same way as we see our partner banks selling portfolios to us that they are doing. We will not keep credit cases that contribute to our financial goal. We'd rather try to see if someone else are better than us for that portfolio and therefore willing to pay a higher price compared to the net present value we have if we keep it. We will be more active than before to think in those terms. I guess in the past, we've been more thinking that, you know, we buy a portfolio and then we hold on to it to the end. That's not how we look at things going forward. Okay. Thank you. You said the transaction is expected to close in the third quarter of this year, but how quickly do you believe you can reduce and maybe optimize the cost base following, you know, the sale of today's portfolio? I think there's an immediate benefit at closing because we will redeploy this freed-up capital and the gains we're making on this sale as soon as we can in attractive higher-yielding portfolios. That will of course be if we would do it in our existing platforms, then we would invest with a smaller total cost base. We would have one less platform cost. That is of course immediate benefit to us. In terms of looking at overall group costs, et cetera, that's a continuing work that we're doing. We will of course now take into account that we are one country smaller, so to speak, and adjust as relevant from that point of view as well. We do see that the one less platform, while we can still invest into what Lars laid out in the most attractive situations, meaning the bilateral ones, is a really big advantage for us. Okay. Thank you. That's clear. How confident are you in being able to replace this portfolio and utilize the cash that you get in from today? I mean, the Greek acquisition that you announced during December is a step on the way, but where do you see growth going forward? Is it to continue in Southern Europe or are you looking at all markets or where do you see supply being? Yeah. We primarily will deploy the capital in the markets we exist. We'll deploy the capital to get a good risk diversification coupled with an attractive return on equity. Over time, since our total investment capacity is so small fraction of the total market, we believe we will be able to deploy the capital or the investment capacity we have. We won't be pressed to deploy the capital immediately because then we may do deals that in the end doesn't meet the return requirements. We will only invest when it's attractive and if we have to wait, we wait. To deploy the freed up investment capacity can possibly not be a problem if you take the longer view. I mean, you know, longer view is more than a year. That's how we think about it. The plan is not to be a smaller company. This is temporary where we free up a part of the balance sheet. The idea is to grow. Another goal we have is to grow with 15% per year on average. That means double the size in five years. That's the target. Okay. Thank you. I just have one last question before I will let the others ask as well. Is Moody's on point with everything here or will your rating, you know, be changed due to this divestiture? Sorry, we didn't catch the first part of the question. Yeah. Is your rating agency Moody's, do they know where like? Have you been in discussion with them regarding your rating and then divesting 19% of the portfolio value? I guess they won't have any opinion on it or have you said anything? I think we've been in touch with all our key partners, either before if it's been relevant or we contacted them today to explain just we're having this call. We absolutely see this as a highly positive credit event. Perfect. Thank you. Thank you for all the answers. The next question is from [Fara Ramirez], Citi. The line is open. Please go ahead. Hello. Good morning. Thank you very much for your time and for taking my questions. I have two quick questions, if I may. The first question is, I understand this is linked to the subpar profitability from the portfolio. I would like to check what are the regions where you see that there maybe also subpar returns. Then my second question would be on the capital that will be generated from the transaction, which, if I understand, is 280 basis points. This will be on top of the benefit from the change in risk weights, is still pending regulatory approvals. Given the improved capital position in coming quarters, would you consider maybe also returning some of that capital to shareholders or is it the strategy to use that capital to grow? Thank you. The first question was which regions do we see. You broke up. Sorry. Yes. My first question is, in which regions or areas you see that maybe the profitability is maybe below the target profitability or the average profitability of the group? You mean for us or as in, as we see, challenging markets currently? Yes. Okay. Well, in the market we are in now, except the U.K., we see that it's possible for us to have a return on equity of 15%. By being very selective in which portfolios we buy and which ones we walk away from, we think we will be able to produce and meet that financial objective in all the other countries we're in. If you go down one level, it's different attractiveness between different asset classes in a certain country. In one country, we could have appetite for more secured assets in other countries, an appetite for an overweight in unsecured assets. It varies country by country. If we step back to the country level, we think that all other countries are attractive for us to stay in and be active. Then on the, you're right that these 280 points are coming on top of the likely change in risk weights from 150% back to 100%, if you're talking unsecured assets. The freed-up book value in this transaction of a bit more than SEK 4 billion, that means risk-weighted assets of SEK 6 billion. If the risk weights goes back from 150% to 100%, it means this corresponds to investment capacity of SEK 6 billion. Then we also improve the earnings. The earnings level is instantly improved by the transaction. That means that the investment capacity increases further above those six. On your question, will we then distribute that back to the shareholders or will we invest? The view we have there is that if we can deploy the capital to the financial objectives we have, the shareholders are best off by having us do that. Therefore, that is priority number one, to deploy the whole investment capacity into credit portfolios. If we can't meet the financial objectives or if it takes too long time to deploy the capital, I guess theoretically, we would consider to start to distribute the money. We will not sit on an unnecessarily high cash level. If we can't deploy to attract the returns, we of course give the money back to the shareholders. As the market is expected to evolve the next five years, we think the chances that we will be able to find attractive portfolios that meets our objectives, that probability is high. The likely scenario is that we don't distribute the money, but rather deploy them. That means deploy means only if we can have a return on equity exceeding 15%. If we can't have that, we would distribute the money back to the shareholders. Thank you. Very clear. The next question is from Ermin Keric, Carnegie. Please go ahead. Good morning. I hope you can hear me. Good morning. The first question was on the central cost. Could you talk anything more about how much you expect that you could improve efficiency there and kind of reduce that cost bucket with this transaction? The central cost, yes? Yes, please. Yeah. No, I think we're redeploying certain resources, and we will stop doing certain things because of this transaction. We won't guide on any actual number at this point. We are doing, as you're aware, a larger transformation where non-operating costs will in absolute terms go down. That's will be updated with these new developments, of course. Over the year, we will guide more in detail on this. Okay. Got it. Thank you. You're selling the U.K. unsecured book at 108% of your book value. Do you see that you have more to take on other portfolios that are undervalued? If you look in the more recent quarters, you've had more of net impairment or net negative revaluations. If we see more undervalued portfolios, yes? That's the question? Exactly. I think we, of course, hold our portfolios to the value that we see are the right one. That's the starting point. That said, I think we've been through a difficult period over the last few years, as you're all aware. This divestment is part of that transformation work, where we see that we can find a better home for, in this case, a platform and the older unsecured portfolios in the U.K. We will continue, as Lars said, where we see that others might create more value, then we will consider that. However, we see that overall we are working the portfolios as we see fit, and we are now in a really strong position in terms of risks in the portfolio if you compare with two years ago, for example, where we had all of these revaluations that we've been facing the last two years coming up. We see that we are in a very good position in terms of risks in the portfolio currently and we believe that it's a really healthy portfolio. Perfect. Thank you. A little bit coming back to the question before here on capital distribution. When you say that you think you can redeploy all capital, is that including both this transaction and a potential risk weight reduction? Just if you could elaborate a little bit more on how you're balancing off the opportunity to just buy back your own share, because it sounds like you believe you can do more than 15% ROI on the remaining book. Wouldn't that be a low risk investment where you get more than 15% ROI if you buy your own shares? Yeah, that's a good question. As management, we shouldn't comment too much on the share price, but since you asked the question, it's difficult to avoid talking about the perspective that it may be a very good deal to buy the share. Especially if you see, you know, what's the market value compared to book value for the whole firm. Now we sold one of the most underperforming parts for 108%. The question is, what does that say about the true market value? We take the longer term. We have a five-year plan, and this is going to be a great company five years from now on. We think we need all the capital we can generate to build a great company. Yes, if it takes time. As I said before, we will not in any way feel stressed to deploy the capital and buy mediocre portfolios. Then we wait. If it takes a long time, I mean several years to deploy investment capacity, I guess it would be reasonable to think about buying back the share as an alternative. We haven't come to that stage in detail, actually. We worked hard to complete this transaction, and we're happy that our, you know, capital situation has changed fundamentally and that we get the chance to refresh more than a third of the total book. We'll see how much good NPL volumes that comes out on the market and then balance that with the available cash. Thank you. One final question, just you mentioned that you are aiming to grow about 15% per annum. If you just look at the market as it is currently, do you think the market is there to do those kind of volumes, or is it more based on an expectation of activity picking up from here? That assumes that, first of all, it's 15% on average a year, and that goal assumes that the NPL market will be more active with larger volumes coming out compared to what we've seen 2020 and 2021. We're not saying that that's going to come already this year or even next year. In a five-year period, we think it's reasonable to believe that the NPL market will pick up substantially. You can see the tendencies today. You have investment firms that have bought very large portfolios, and they own them for a number of years. You see several of them are thinking about selling. That seems to be a secondary market developing as well in the coming years. On average 15% during a five-year period, we think is a reasonable goal. That's not a new goal, by the way. It's an existing goal we have, and we think it's a reasonable goal. Got it. That's all for me, and congratulations on transaction. Thank you. Thank you very much. The next question is a follow-up question from Jacob Hesslev, SEB. The line is now open. Please go ahead. Yeah. Hi. I just have one last question. You're selling your unsecured portfolio, but you're keeping the secured one. What do you consider your core areas to be in going forward? Should I expect you to buy secured portfolios, or where do you believe you can easiest find the 15% ROE? Thanks. If you take the group perspective, we have a investment appetite for both asset classes. The mix we have now is a minor share that contains secured portfolios, and most of it are unsecured portfolios. We'd like that mix to change a bit so that the secured part becomes a bit larger as a share of the total portfolio. The important thing is the returns, the IRRs level and most of all, return on equity. Wherever we can find that, we will obviously go for that. That All right. You should not see the divestment of unsecured in the U.K. and that we keep secured. You should not see that as a signal that we want to focus the group on secured assets. We still have an appetite as before for the unsecured segment. All right. Very clear. Thank you. Happy Easter to you all. Likewise. Thank you very much. Thank you. There are no further questions at this time. I hand back to you. Okay. Well, if there are no more questions, I guess we can wrap up. Thank you for your interest and your time. We close the meeting for now. Thank you, everyone. Bye-bye. Bye-bye. Thank you for your attendance. This call has been concluded. You may disconnect.