Q1 2017 presentation
Oslo, 24 May 2017
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B2Holding status update Q1 2017
Overview
Gross cash collection on portfolios above expectations – total NOK 575m (vs. NOK 413m Q1 2016)
Financial
developments
Cash EBITDA increased 47% to NOK 399m (NOK 271m Q1 2016)
High geographical diversity in portfolio acquisitions – NOK 340m (vs. NOK 448m Q1 2016)
High investment capacity – NOK 1,845m
Operationaland
organisational
developments
Geographical expansion with platforms in 18 countries and portfolios in 17 countries - new portfolios in Czech,
Italy and Bosnia-Hercegovina
Record strong operating performance in first quarter with operating margin of 48%
Core team for secured assets in operation in seven countries
|2
18 platforms, total gross ERC of NOK 9.85bn
Mature market
Northern Europe
(“NE”)
Platforms
18
Countries with portfolios
Poland
17
Employees (FTEs)
Central Europe
(“CE”)
1,591
Total Gross ERC (NOKm)
Collection platforms
Portfolios only
Office only
Southeast Europe
(“SEE”)
9,852
Growth market
Note: Total gross ERC includes the Group’s share of portfolios owned by joint ventures
|3
Segment financials
Northern Europe (NE)
Comments
Strong operating performance – operating margin 44%
Purchased loan portfolios
NOK million
273
227
Gross cash collection NOK 149m, slightly below the curve
(-NOK 2m)
Portfolio purchases of NOK 161m – mainly from forward flow
agreements
- New forward flow agreements signed in Finland and Sweden
SVC in Lithuania acquired – 3rd party collection platform
161
120
102
Q1’16
Q2’16
Q3’16
Q4’16
Q1’17
Gross cash collection on portfolios
NOK million
Increased activity in the Baltics
+21%
149
Solid portfolio visibility in the pipeline
123
Q1’16
Q1’17
|4
Segment financials
Poland
Comments
Gross collection of NOK 209m, significantly above the curve
(+NOK 23m)
Purchased loan portfolios
NOK million
334
233
High legal costs – expected to be lower going forward
Portfolio purchases NOK 57m
40
Competitive market landscape
Q1’16
Q2’16
57
17
Q3’16
Q4’16
Q1’17
Good macroeconomic development
Gross cash collection on portfolios
Further restructuring of the bailiff system possible
NOK million
+3%
203
209
Q1’16
Q1’17
|5
Segment financials
Central Europe (CE)
Comments
Gross collection of NOK 167m, above the curve (+NOK 6m)
Purchased loan portfolios
NOK million
660
Operating performance increase - cost to collect in % falling
386
Portfolio purchases NOK 64m
New portfolio markets – Czech, Italy and Bosnia- Hercegovina
Strong portfolio pipeline
Strong economic growth
0
64
6
Q1’16
Q2’16
Q3’16
Q4’16
Q1’17
Gross cash collection on portfolios
NOK million
+117%
167
77
Q1’16
Q1’17
|6
Segment financials:
Southeast Europe (SEE)
Comments
Gross cash collection NOK 49m, above the curve (+NOK 4m)
Purchased loan portfolios1)
NOK million
177
Good operational performance – cost to collect percentage is
decreasing
59
Greek collection licence application submitted
Good visibility of portfolio pipeline
0
2
5
Q1’16
Q2’16
Q3’16
Q4’16
Q1’17
Gross cash collection on portfolios2)
NOK million
49
0
Q1’16
Q1’17
1)Including
2)Not
JV with EOS in Q4’16
including JV with EOS
|7
Continued good collection and operational performance
- Record high EBITDA and cash EBITDA
Financial summary
Comments
Q1’17
Q1’16
446
221
213
48%
279
92
85
30%
%
change
60%
140%
151%
-
Cash Revenue
Cash EBITDA
625
399
459
272
36%
47%
Profit for the period after tax
Earnings per share (EPS)
104
0.28
-2
-0.01
-
Cash flow from operating activities
Operating cash flow per share
211
0.57
135
0.43
56%
33%
340
575
9,852
448
413
6,822
-24%
39%
44%
NOKm
Net operating revenues
EBITDA
Operating profit (EBIT)
Profit margin
Portfolio acquisitions
Cash collection from portfolios
ERC (at end of month)
Strong gross collection on
portfolios
- Collection above curves
Strong cost control – operating
margin of 48%
Record-high EBITDA and cash
EBITDA
Portfolio acquisition – smaller
portfolios in all geographies
|8
Financial highlights: Income statement
Income statement
Comments
Q1’17
Q1’16
Revenue from purchased loan portfolios
Other operating revenues
Total operating revenues
397
50
446
233
46
279
2016
audited
1,206
190
1,396
External costs of services provided
Personnel costs
Other operating expenses
Depreciation and amortisation of tangible and intangible assets
Profit from shares and participation in associated companies and JVs
Operating profit (EBIT)
-85
-94
-59
-8
13
213
-53
-81
-53
-7
0
85
-244
-359
-248
-30
0
516
Financial income
Financial expenses
Net exchange gain (loss)
Net financial items
0
-74
-1
-75
1
-57
-23
-79
10
-232
-66
-288
Profit before tax
138
6
227
Income tax expense
Net profit
Non-recurring items (net of tax)
Adjusted net profit
-35
104
0
104
-8
-2
9
7
-46
181
20
203
Cash revenue
Cash EBITDA
EBITDA
625
399
221
459
272
92
2,061
1,210
546
NOKm
Strong gross cash collection
Other operating revenue stable
Good cost control – still high
filings of legal claims in Poland
Financing – interest include
commitment fee on undrawn
amount – high investment
capacity
Tax costs temporarily higher
|9
Gross collection increase YoY of 39% to NOK 575m
Bridge Q1’16-Q1’17: Gross cash collection on portfolios
Comments
NOK million
5
575
26
Strong gross cash collection
compared to curves in Poland,
SEE and CE
40
Good growth in NE (+21%) and
CE (+117%)
91
Poland maintain position in
highly competitive market
413
Q1’16
CE
SEE
NE
Poland
Q1’17
Note. Not including JV with EOS
| 10
Record high quarterly EBIT and Cash EBITDA
EBIT
Cash EBITDA
NOK million
NOK million
Non-recurring items
Non-recurring items
As reported
As reported
+127%
+42%
399
213
168
1
326
1
281
9
151
349
274
10
123
10
94
9
325
166
272
264
Q1’16
Q2’16
113
85
Q1’16
Q2’16
Q3’16
Q4’16
Q1’17
Q3’16
Q4’16
Q1’17
| 11
Demonstrating strong cost control
Total operational costs per quarter
Operational costs split
NOK million
NOK million
Non-recurring costs
Personnel costs
81
93
86
99
Recurring costs
94
265
Stable personnel
costs
238
Q1’16
Q2’16
Q3’16
Q4’16
Q1’17
187
9
External costs
87
53
58
Q1’16
Q2’16
85
Q4’16
Q1’17
178
53
Q1’16
Other operating costs
72
64
60
Q2’16
Q3’16
196
1
Still high legal costs
in Poland – will fall
the next quarters
46
Q3’16
211
10
Q4’16
59
No major project
costs in the quarter
Q1’17
New projects will
increase costs
somewhat next
quarters
Q1’16
201
194
Q2’16
Q3’16
Q4’16
Q1’17
| 12
Balance sheet
Balance sheet
Comments
Q1’17
unaudited
93
409
5,051
519
73
6,145
Q1’16
unaudited
94
311
3,379
275
24
4,082
2016
audited
91
395
4,752
507
64
5,808
132
223
354
95
273
368
123
218
340
Total assets
6,499
4,450
6,149
Total equity
2,620
1,667
2,425
Long-term interest bearing loans and borrowings
Deferred tax liabilities
Other long-term liabilities
Total non-current liabilities
3,396
56
77
3,529
2,471
55
32
2,558
3,218
51
65
3,333
82
83
185
350
68
29
128
225
156
62
172
391
6,499
4,450
6,149
NOKm
Tangible and intangible assets
Goodwill
Purchased loan portfolios
Other long term financial assets
Deferred tax asset
Total non-current assets
Other short-term assets
Cash & short-term deposits
Total current assets
Accounts and other payables
Income tax payable
Other short-term liabilities
Total current liabilities
Total equity and liabilities
Increase in purchased loan
portfolios with 50%
Equity ratio 40%
Investment capacity
NOK 1,845m
Net interest bearing debt
NOK 3,172m
Significant headroom for growth
in financial covenants
| 13
NOK 340m in portfolio acquisitions in Q1’17, NOK 2.5bn last four
quarters
Portfolio purchases
Comments
NOK million
2014
2015
2016
Q1 and Q3 usually low activity quarters
2017
Portfolio purchases in all geographies present
1,054
Strong forward flow (frame agreements) from the Nordic region
827
672
Key details portfolio purchases
Geography distribution
448
340
318
253
39
64
Q1
304
Poland
255
98
Q3
Q4
47%
NOK
340m
NE
CE
Retail
unsecured
28%
NOK
340m
SEE 17%
Q2
Non-retail
secured
17%
259
Distribution by type
72%
19%
| 14
Total Gross ERC of approx. NOK 9.85bn
– 44% growth y-o-y
Development in Total Gross ERC
Total Gross ERC split by estimated collection time
NOK million
NOK million
+44%
9,489
8,186
9,852
2,266
2,371
SEE
CE
1,886
NE
Poland
8,014
1,106
6,490
6,822
687
467
4,430
1
2
3
4
5
338
6
237
7
257
147
89
9
10
>10
120m
ERC
Total
ERC
8
Year
1,371
2013
2014
2015
Q1’16
Q2’16
Q3’16
Q4’16
Q1’17
1
2
3
4
5
6
7
8
9
Poland
833
675
521
366
262
186
131
94
61
38
3,167
3,258
NE
595
437
338
268
220
183
154
117
77
50
2,438
2,603
CE
579 1,017
836
354
142
70
41
20
7
0
3,065
3,067
SEE
260
191
118
65
29
12
6
2
0
924
924
2,266 2,371 1,886 1,106
687
467
338
237
147
89
9,595
9,852
Total
242
10
| 15
Outlook
Expected continued growth in 2017 – strong focus on operational performance
Well positioned for further growth with operating platforms in 18 markets
Financial
Significant investment capacity and covenant headroom for future growth, without issuing new shares
Focus on financial targets
Strong pipeline within both secured and unsecured portfolios – geographically diversified
Operational
and
organisational
New best practice programs initiated – strong focus on operational efficiency
Access to the largest NPL markets in Europe through newly established platforms in Greece and Italy
| 16
Agenda
Appendices
| 17
Financial highlights: Cash flow
Consolidated cash flow
Comments
Q1’17
Q1’16
Profit for the period before tax
Amortisation/revaluation of purchased loan portfolios
Adjustment other non-cash items
Interest expense on interest bearing loans
Interest paid on interest bearing loans and borrowings
Unrealised foreign exchange differences
Income tax paid during the year
Change in working capital
Change in other balance sheet items
Net cash flow from operating activities
138
178
7
73
-65
-7
-12
-124
23
211
6
180
9
51
-47
25
-6
-65
-18
135
2016
audited
227
664
37
227
-184
180
-60
-15
-275
802
Purchase of loan portfolios
Net investments in intangible and tangible assets
Investments in business acquisitions
Net cash flow from investing activities
-340
-7
0
-347
-448
-3
-161
-612
-2,432
-27
-255
-2,713
Net new share issue
Net receipts (payments) on interest bearing loans and borrowings
Dividends paid to non-controlling interest
Net cash flow from financing activities
0
125
0
125
0
0
0
0
662
738
0
1,400
Net cash flow in the period
-11
-476
-511
Cash and cash equivalents at beginning of the period
Exchange rate difference on cash and cash equivalents
Cash and cash equivalents at end of the period
218
6
213
765
-16
273
765
-36
218
NOKm
Strong increase in operating
cash flow
| 18
Cash collection and net operating revenue at record high levels
Gross cash collection on portfolios
Net operating revenue
NOK million
NOK million
+39%
+60%
556
575
446
416
370
474
413
427
332
279
Q1’16
Q2’16
Q3’16
Q4’16
Q1’17
Q1’16
Q2’16
Q3’16
Q4’16
Q1’17
| 19
Portfolio composition
Portfolio distribution by type (measured by purchase price)1)
Portfolio distribution by type (measured by purchase price)
NOK million
NOK million
Secured
Unsecured
10%
11%
Non-retail
secured
17%
26%
23%
16%
Non-retail
unsecured
1%
Retail
secured 7%
90%
89%
83%
74%
Retail
unsecured
77%
76%
2013
2014
2015
2016
Q1’17
1) 2013 and 2014 extrapolated based on portfolios per 31/12/2015
| 20
B2Holding ASA | Stortingsgaten 22 | P.O. Box 1726 Vika | N-0121 Oslo
www.b2holding.no | Tel: +47 22 83 39 50 | E-mail: [email protected]