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Axactor SE
Quarterly Report • Aug 15, 2024
3549_rns_2024-08-15_8c102fc5-00b5-4787-9af8-521c602dd2a8.pdf
Quarterly Report
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Axactor helps people and society to a better future
We are passionate, proactive and act with integrity
/ Highlights1
Second quarter 2024
- Investments in NPL portfolios of EUR 70.4 million for the second quarter (40.2), and increasing the average gross IRR for the total NPL book to 19% (18%)
- Gross revenue of EUR 89.2 million, compared to EUR 91.3 million in the second quarter 2023, a 2% reduction driven by a continued tough collection environment in especially Germany and Northern Europe
- Total income ended at EUR 59.1 million, down 9% compared to the second quarter last year (65.1)
- Opex in percent of gross revenue of 32% (35%) which is the lowest recorded since inception
- An improved EBITDA margin of 51% (50%) with EBITDA of EUR 30.3 million, 7% lower than the same quarter last year (32.7)
- Cash EBITDA growth of 3%, ending at EUR 61.1 million for the quarter (59.6)
- Annualized return on equity to shareholders of 4% for the quarter (10%)
- 10 July 2024 the Swedish Financial Supervisory Authority approved Axactor's application relating to the EU NPL directive
First half year 2024
- Gross revenue of EUR 168.3 million, down 3% from EUR 174.1 million and total income down 9% to EUR 115.6 million (127.2), compared to the first half 2023
- EBITDA of EUR 56.6 million, down 10% from the first half 2023 (63.1), with an upheld solid EBITDA margin ending at 49% (50%)
- Cash EBITDA ended at EUR 110.1 million, down 1% from EUR 111.0 million in the corresponding period last year
- Both annualized return on equity and annualized return on equity to shareholders ended at 2% (9%), driven by a tough collection environment and increased interest rates
- Invested EUR 81.2 million in NPL portfolios (73.0) at attractive price levels, contributing to a 4% growth in ERC compared to last year
- Solid performance on 3PC benchmarks together with positive new sales within the 3PC bank and finance segment are expected to further improve 3PC volumes going forward
1 Prior period figures refer to Axactor's continuing operations, unless explicitly stated otherwise
Key figures that cannot be directly found in the Group's consolidated statements are reconciled in the APM tables. All prior year figures presented are for continuing operations unless otherwise stated.
| For the quarter end | Year to date | ||||
|---|---|---|---|---|---|
| EUR million | 30 Jun 2024 30 Jun 2023 | 30 Jun 2024 30 Jun 2023 | Full year 2023 | ||
| Gross revenue | 89 | 91 | 168 | 174 | 344 |
| Total income | 59 | 65 | 116 | 127 | 257 |
| EBITDA | 30 | 33 | 57 | 63 | 132 |
| Cash EBITDA | 61 | 60 | 110 | 111 | 221 |
| Net profit/(loss) after tax | 4 | 11 | 5 | 18 | 34 |
| EBITDA margin | 51% | 50% | 49% | 50% | 51% |
| Return on equity to shareholders, annualized1 | 4% | 10% | 2% | 9% | 7% |
| Return on equity, annualized | 4% | 11% | 2% | 9% | 8% |
| Equity ratio | 29% | 28% | 29% | 28% | 29% |
| Acquired NPL portfolios | 70 | 40 | 81 | 73 | 116 |
| Book value of NPL portfolios | 1,284 | 1,241 | 1,284 | 1,241 | 1,265 |
| Estimated remaining collections (ERC) | 2,664 | 2,563 | 2,664 | 2,563 | 2,620 |
| Number of employees (FTEs) | 1,228 | 1,293 | 1,228 | 1,293 | 1,255 |
| Price per share, last day of period (NOK) | 4.11 | 5.09 | 4.11 | 5.09 | 5.08 |
| Market capitalization (NOK million) | 1,242 | 1,538 | 1,242 | 1,538 | 1,535 |
1 Prior year figures for return on equity to shareholders include continuing and discontinued operations
/ Operations
The second quarter of 2024 followed the trend from the first quarter, with stronger performance in Spain and Italy compared to Germany and the Nordic countries. The NPL segment reported gross revenue of EUR 75.8 million (78.2), resulting in a collection performance of 93% (102%), while the 3PC revenues for the quarter was EUR 13.4 million (13.1). To mitigate for the reduction in collection, cost efficiency measures have been a key focus also in the second quarter of 2024. A historical low opex in percent of gross revenue was achieved as a testament to the improvements and ended at 32% for the second quarter of 2024 (35%).
During the first half of 2024, Axactor has experienced substantial positive development in the 3PC segment in Norway. The strategic focus on enhancing our product offering, particularly within the 3PC bank and finance sector is so far showing great results. The feedback on the value offering within the bank and finance segment is very positive from both customers and prospects, as the approach differentiates us from our competitors. Building on this momentum, continued growth is expected over the next six to nine months, reinforcing a strong commitment to innovation and excellence within the segment.
The Spanish portfolio team was successful in acquiring seven new portfolios during the second quarter of 2024, of which four portfolios secured by real estate collaterals and three unsecured portfolios with more than 100,000 cases in total. The new volumes will be serviced mainly through the Madrid and Valladolid offices.
High activity level in the call centers
It is key to establish dialogue with the debtors in order to give support and advice on finding a solution to their financial situation. To do so, the main channel for communication is inbound and outbound telephony. For the second quarter of 2024, Axactor had a high level of operational activity, and the call centers handled more than 4.3 million calls. Despite a significant increase in digital communication, telephony is by far the most used communication channel with debtors. Axactor Finland is currently the most digital market where the debtors prefer to use the self-service portal or the online chat function. For the second quarter of 2024 the digital communication in Finland almost outnumbered handled phone calls by 2:1.
New partner for IT infrastructure services
During the first half of 2024 an extensive RFP process has been conducted to determine the future partner for the Group's IT
infrastructure services. Several vendors were evaluated and a 3-year agreement was signed with Advania end of June. Axactor believes that Advania will be a strong partner for future growth supported by improved terms, flexible solutions and an impressive cybersecurity set-up. The migration project will start in August 2024 and is expected to be finalized within June 2025.
Penetration test confirming a strong cybersecurity defense
In June, Axactor recieved feedback from a new penetration testing partner on the IT security level for the Group. Their final report was very positive, stating that Axactor has advanced security in place, and a strong defense compared to peers within the finance and banking sector. It is clear that the biggest threat is still attacks aimed at Axactor's emloyees, such as phishing attacks. The internal phishing campaigns from the IT security department have been increased to target special departments that are more vulnerable. As an example, the finance department, sales, HR, and IT, were all targeted with specialized campaigns in order to improve awareness and build a stronger cybersecurity defense.
Data privacy and information security
A working group has been established to make a gap analysis between Axactor's current operations and the requirements of the Digital Operations Resilience Act ("DORA"), which will be effective from 17 January 2025, and to propose necessary changes. The new infrastructure vendor announced above will also ensure compliance with DORA as part of the transition project.
Trainings have been held related to values and ethics, confidentiality, password management, cyberattacks and scams, mobile device security, smishing, email and shadow IT. The business continuity plans have been reviewed and the plan to prevent and manage phishing attacks has been updated.
The annual general meeting
Axactor held its annual general meeting 8 May 2024. All the proposals from the Board of Directors were approved, including the 2023 annual report. No changes to the composition of the Board of Directors were proposed. It was decided to change the company's auditor from PWC to EY.
Long-term incentive program
A long-term incentive program designed to align and incentivize senior management in the Group to create shareholder value and retain key employees went into effect 14 June 2024. The program is based on performance share units and reflects the Group's longterm performance. The options will vest after three years.
Human- and workers' rights
The results of the human rights due diligence assessment, confirming compliance with fundamental human rights and decent working conditions, was included in the annual report of 2023 and published on the company's websites. Through this assessment, Axactor has not found evidence of any adverse human rights impacts caused or contributed to by Axactor. At the same time, this is not something which can be taken for granted, and Axactor will continue to work towards improving its human rights impact assessment.
The EU Council approved the Corporate Sustainability Due Diligence Directive 15 March 2024. It is expected that information on actual or potential human rights risks and impacts in indirect value chains will become more easily available in the years to come, which will enable companies to gain a better understanding of its impact on human- and workers' rights. The company will continue to follow the development diligently going forward.
Axactor has been a signatory of UN Global Compact since June 2021. The communication of progress was submitted 10 June 2024. Axactor discloses its continuous efforts to integrate the Ten Principles into its business strategy, culture, and daily operations. Axactor contributes to the United Nations goals, particularly the Sustainable Development Goals, and reaffirms its support of the Ten Principles of the United Nations Global Compact in the areas of Human Rights, Labour, Environment, and Anti-Corruption.
NPL directive
In line with the EU NPL Directive, the Swedish Financial Supervisory Authority granted on 10 July 2024 Axactor Sweden AB permission to be a credit manager, without the right to receive and hold funds from borrowers. Axactor has also submitted an application to the German Federal Financial Supervisory Authority (BaFin) 27 March 2024. In Finland, Italy, Norway and Spain local implementation of the NPL Directive is ongoing, including considerations of new supervisory authorities and stricter regulations. As Axactor already holds a license as financial intermediary in Norway and Italy, few changes are expected in these countries.
/Financials
Total income and Gross revenue
Axactor's operations are split into two business segments, acquisition and collection on own portfolios: NPL, and collection on behalf of third-party clients: 3PC. Note that unless explicitly stated otherwise, figures for prior periods are stated for continuing operations, i.e. excluding portfolios of purchased real estate (REO).
Revenue
Total income for the second quarter ended at EUR 59.1 million, down from EUR 65.1 million in the second quarter last year. Gross revenue came in at EUR 89.2 million compared to EUR 91.3 million in the same quarter last year. The main driver for the lower gross revenue is the continued pressure on collection levels from
macroeconomic headwinds and government-imposed debtor relief initiatives, resulting in an NPL collection performance of 93% in the second quarter 2024 compared to 102% in the second quarter 2023.
The NPL segment delivered a total income of EUR 45.7 million for the quarter, down 12% from the second quarter 2023 (51.9). The lower total income is further explained by net NPL revaluations and changes in fair value forward flow commitments of combined EUR -4.6 million (-1.4). Gross revenue ended at EUR 75.8 million (78.2). The NPL amortization rate increased to 34% (32%).
The 3PC segment total income ended at EUR 13.4 million, up from EUR 13.1 million in the second quarter 2023. Excluding the 3PC businesses in Sweden and Finland that was closed during 2023, the growth was 8% driven by double-digit growth in both Spain and Norway. The Norwegian 3PC business is experiencing solid growth from new sales within the bank and finance segment, a key focus area of Axactor's strategy.
For the first half year, the Group delivered total income of EUR 115.6 million (127.2) and a gross revenue of EUR 168.3 million (174.1). The NPL segment total income was EUR 90.4 million for the first half year (101.3), down 11% from the first half of 2023. The decline is partially explained by net NPL revaluations and changes in fair value forward flow commitments of combined EUR -9.4 million (-2.2). The NPL gross revenue fell 3% compared to the same period last year, to EUR 143.0 million (148.2). 3PC total income for the first half year was EUR 25.2 million (25.9), down 2% from the first half year 2023. Excluding the Swedish and Finnish 3PC business, the first half year 3PC total income grew 3%.
Operating expenses
Total operating expenses before depreciation and amortization was EUR 28.7 million for the second quarter (32.4). The cost reduction compared to the second quarter last year reflects the action taken on the organizational capacity as well as improved processes for selecting cases to proceed with legal measures. The continued
focus on cost efficiency and process improvements ensured that the operating expenses as a percentage of gross revenue fell to 32% for the second quarter from 35% for the second quarter last year.
Depreciation and amortization – excluding amortization of NPL portfolios – was EUR 2.4 million (2.3) for the quarter.
For the first half year, total operating expenses before depreciation and amortization ended at EUR 59.1 million (64.1), or 35% of gross revenue (37%). Depreciation and amortization – excluding amortization of NPL portfolios – ended at EUR 4.5 million (4.5).
Operating results
EBITDA and EBITDA margin
Total contribution margin from the business segments was EUR 40.3 million for the quarter, compared to EUR 43.9 million for the second quarter last year. Supported by the positive cost
0 quarter last year. 5 10 15 20 25 30 35 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 EUR million and % 33 50% 54% 34 34 53% 26 46% 30 51%
development, the contribution margin over total income thus increased marginally from 67% to 68%.
The NPL segment delivered a contribution margin of EUR 35.5 million in the second quarter, down from EUR 39.6 million in the same quarter last year. The total operating expenses for the NPL segment ended at EUR 10.2 million, down from 12.4 million in the second quarter 2023. The contribution margin over total income ended at 78%, up from 76% in the second quarter 2023.
The contribution margin for the 3PC segment was EUR 4.9 million, up from EUR 4.3 million in the second quarter 2023. The increase is supported by both an increase in total income, and a reduction in operating expenses of 3% to EUR 8.5 million (8.8). The contribution margin over total income thus ended at 36% for the quarter (33%).
Total contribution from the business segments for the first half year ended at EUR 77.8 million (85.5), of which NPL contributed EUR 69.2 million (77.2) and 3PC contributed EUR 8.6 million (8.3).
EBITDA for the second quarter came in at EUR 30.3 million, a reduction from EUR 32.7 million in the same quarter last year. The reduction is reflecting the tougher collection environment especially in Axactor's Nordic and German operations. The EBITDA margin increased to 51%, up from EUR 50% in the second quarter 2023. For the first half year, EBITDA was EUR 56.6 million (63.1), resulting in a healthy EBITDA margin of 49% (50%).
The difference between contribution margin and EBITDA is comprised of unallocated SG&A, IT and corporate costs, which amounted to EUR 10.0 million for the quarter. This compares to EUR 11.2 million in the corresponding quarter 2023. For the first half year, unallocated SG&A, IT and corporate costs amounted to EUR 21.3 million (22.4).
Cash EBITDA ended at EUR 61.1 million for the second quarter, up 3% from EUR 59.6 million in the corresponding quarter last year. The improvement was mainly driven by the lower operating expenses offsetting the lower gross revenue.
Operating profit (EBIT) was EUR 28.0 million for the second quarter, compared to EUR 30.4 million in the second quarter last year. For the first half year, operating profit was EUR 52.0 million (58.6).
Net financial items
Total net financial items for the quarter were negative EUR 22.1 million (negative 16.4). The main part of the financial items was interest expense on borrowings of EUR 22.4 million (18.6). The increase from the second quarter last year is partly attributable to higher gross debt, but also to the significant increases in interest rates combined with the higher margin on the ACR04 bond which was issued in the third quarter 2023.
The net foreign exchange impact for the quarter was positive EUR 0.7 million, compared to negative EUR 0.3 million in the second For the first half year, total net financial items were negative EUR 45.1 million (negative 34.7), of which interest expenses on borrowings were EUR 44.8 million (36.5), and the net foreign exchange impact was positive 0.3 million (negative 0.7).
Earnings and taxes
Earnings before tax ended at EUR 5.9 million for the second quarter (13.9), while net profit ended at EUR 4.3 million (10.6). The effective tax rate was thus 27% for the quarter (24%). For the second quarter 2023 net profit including contribution from discontinued operations was EUR 9.6 million.
The net profit to shareholders of the parent company ended at EUR 4.2 million for the second quarter (10.3), and at EUR 0.1 million for non-controlling interests (-0.7). The resulting earnings per share was thus EUR 0.014 both on a reported basis and fully diluted (0.034), based on the average number of shares outstanding in each period.
For the first half year, earnings before tax ended at EUR 6.9 million (23.9), while the net profit ended at EUR 5.0 million (18.3). The effective average tax rate for the period was 27%, up from 24% in the first half year of 2023. For the first half year 2023 the net profit including discontinued operations was EUR 15.8 million. EUR 4.9 million of the net profit was attributable to shareholders of the parent company (17.5), while the remaining EUR 0.1 million was attributable to non-controlling interests (-1.7).
Cash flow
For prior year figures, the following text regarding cash flow includes contribution from both continuing and discontinued operations.
Net cash flow from operating activities, including NPL investments, amounted to EUR -17.8 million (21.0) for the quarter, of which the amount paid for NPL portfolios was EUR 71.0 million (42.8). The deviation between the investment in NPL portfolios and the cash paid for NPL portfolios in the period relates to deferred payments on certain portfolios. The negative cash flow from operating activities is mainly a result of increased investments in NPL portfolios. The total cash flow from operations excluding investments in NPL portfolios ended at EUR 53.3 million (63.8), with the reduction compared to 2023 mainly explained by an increase in working capital of EUR 5.0 million compared to a decrease of EUR 6.9 million in the same quarter last year.
For the first half year, net cash flow from operating activities was EUR 10.4 million (28.4), including NPL investments of EUR 84.3 million (78.3), cash EBITDA of EUR 110.1 million (112.6), taxes paid of EUR 11.6 million (6.0) and an increase in net working capital of EUR 3.8 million (-0.2).
Total net cash flow from investing activities, not including investments in NPL portfolios, was EUR -0.7 million for the second quarter, compared to EUR -1.1 million for the second quarter 2023. The net cash flow from investments for the first half year was EUR -1.3 million, compared to EUR -1.9 million in the first half year 2023. Total net cash flow from financing activities was EUR 17.9 million for the quarter (-10.6), with a net drawdown on credit facilities of EUR 41.2 million (18.1). Interests paid increased from EUR 15.7 million in the second quarter last year, to EUR 22.5 million in the second quarter 2024. In the second quarter last year a total of EUR 11.4 million of loan fees relating to refinancing processes was paid.
For the first half year, total net cash flow from financing activities was EUR -6.2 million (-20.5), with interests paid of EUR 44.2 million (31.2), a net drawdown on credit facilities of EUR 39.8 million (24.5).
Total net cash flow was thus EUR -0.5 million for the quarter (9.4) and EUR 2.9 for the first half year (6.0), leaving total cash and cash equivalents at EUR 37.1 million at the end of the period (44.5). This includes EUR 1.9 million in restricted cash (7.9).
Equity position and balance sheet considerations
Total equity for the Group was EUR 422.9 million at the end of June (403.9), including non-controlling interests of EUR -9.5 million (-8.1). The main reason for the increased equity compared to last year is the profit recognized during the last twelve months.
The resulting equity ratio at the end of the first half of 2024 was 29%, increased from 28% at the end of the first half last year.
Return on equity
Annualized return on equity (ROE) ended at 4% (11%), and equally the annualized return on equity for shareholders ended at 4% for
the second quarter (10%). The corresponding figures for the first half year were 2% (9%) and 2% (9%), respectively.
Axactor will aim for further improvements of key drivers such as economies of scale, changes in the business mix, and accretive portfolio investments. At the same time, the interest rate increases put negative pressure on the return on equity development compared to last year.
Capital expenditure and funding
Axactor invested EUR 70.4 million in NPL portfolios during the second quarter (40.2). The invested amount is significantly above the replacement capex and the estimated remaining collections thus grew by 4% from the first quarter 2024, to EUR 2,664.0 million (2,563.1). Adding the investments made during the first quarter, the total NPL investments for the first half year was EUR 81.2 million (73.0). Estimated NPL investment commitments for the remainder of 2024 stand at EUR 6.3 million at the end of the first half year.
Axactor has two outstanding bond loans per the end of the second quarter 2024. The EUR 300 million bond with ticker ACR03 matures in September 2026, and adjusting for treasury bonds the outstanding face value of the bond is EUR 281.1 million. The NOK 2,300 million bond with ticker ACR04 was placed during the third quarter 2023, with a maturity in September 2027.
Axactor's multi-currency revolving credit facility (RCF) has a total limit of EUR 545 million, of which EUR 509.0 million were drawn per the end of the second quarter (527.0). The maturity of the RCF agreement is 30 June 2026, with two one-year extension options contingent on separate credit approval.
Total interest-bearing debt including capitalized loan fees amounted to EUR 975.8 million at the end of the second quarter 2024 (944.5).
Axactor is in compliance with all loan covenants as per the end of the second quarter 2024.
Outlook
Market prices for NPL portfolios have been adjusting down towards what Axactor considers fair levels given the increased funding cost for the industry. Recent deals have been signed on significantly higher gross IRR levels compared to Axactor's early years. This has resulted in a gradual increase of the average gross IRR for the total portfolio quarter after quarter, ending at 19% at the end of the second quarter 2024, up from 18% at the end of first quarter 2024.
The estimated replacement capex for 2024 is approximately EUR 106 million, and the previously communicated target of EUR 100-200 million in investments should thus secure a relatively stable or growing book value throughout the year. With investments of EUR 81 million in the first half of 2024 the investment target is well within reach. The 3PC segment is showing a positive trend with revenue growth and increased margins. Especially in the Norwegian 3PC business Axactor is experiencing solid growth from new sales within the bank and finance segment.
Collections are expected to continue to be impacted by the higher interest rates levels and macroeconomic uncertainty, but Axactor aims to continue to deliver stable earnings during these turbulent times. Potential upsides could arise from interest rates and inflation falling faster than the current consensus, an improving bond market, and higher investment volumes at sustained attractive price levels. The Group executive management and Board continue to closely monitor the general macroeconomic situation and its potential business impacts, including the limited headroom under the interest coverage ratio and leverage ratio covenants pertaining to the two outstanding bond loans.
Brita Eilertsen Board member
We confirm that, to the best of our knowledge, that the condensed set of interim consolidated financial statements for the first half of 2024 has been prepared in accordance with IAS 34 Interim Financial Reporting and gives a true and fair view of the assets, liabilities, financial position and profit or loss for the Group and the company taken as whole.
We also confirm that, to the best of our knowledge, that the half-yearly report gives a fair overview of important events that have occurred during the first six months of the financial year and their impact on the half-yearly financial report, any significant related party transactions, and a description of the principal risks and uncertainties for the remaining six months of the financial year.
Oslo, 14 August 2024
Terje Mjøs Chair
Lars Erich Nilsen Board member
Kjersti Høklingen Board member
Johnny Tsolis CEO
Ørjan Svanevik Board member
/Interim condensed consolidated financial statements
| Interim condensed consolidated statement of profit or loss | 13 |
|---|---|
| Interim condensed consolidated statement of comprehensive income | 14 |
| Interim condensed consolidated statement of financial position | 15 |
| Interim condensed consolidated statement of cash flows | 16 |
| Interim condensed consolidated statement of changes in equity | 17 |
| Notes to the interim condensed consolidated financial statements | 18 | |
|---|---|---|
| Note 1 | Reporting entity and accounting principles | 18 |
| Note 2 | Financial risks | 18 |
| Note 3 | Operating segments | 20 |
| Note 4 | Financial items | 23 |
| Note 5 | Income | 24 |
| Note 6 | Purchased loan portfolios | 26 |
| Note 7 | Interest-bearing loans and borrowings | 29 |
| Note 8 | Leases | 32 |
| Note 9 | Fair value of forward flow commitments | 33 |
| Note 10 | Issued shares and share capital | 34 |
| Note 11 | Discontinued operations | 35 |
Interim condensed consolidated statement of profit or loss
| For the quarter end | Year to date | |||||
|---|---|---|---|---|---|---|
| EUR thousand | Note | 30 Jun 2024 30 Jun 2023 | 30 Jun 2024 30 Jun 2023 | Full year 2023 | ||
| Continuing operations | ||||||
| Interest income from purchased loan portfolios | 5, 6 | 54,839 | 52,194 | 109,076 | 104,150 | 211,289 |
| Net gain/(loss) purchased loan portfolios | 5, 6 | -10,249 | -505 | -20,149 | -5,591 | -13,082 |
| Revenue from sale of repossessed assets | 5 | 1,085 | 1,020 | 1,584 | 1,409 | 2,587 |
| Other operating revenue | 13,377 | 12,363 | 25,107 | 27,212 | 55,843 | |
| Total income | 3, 5 | 59,051 | 65,073 | 115,619 | 127,180 | 256,637 |
| Cost of repossessed assets sold, | ||||||
| incl impairment | 5 | -538 | -538 | -690 | -735 | -1,759 |
| Personnel expenses | -15,459 | -17,047 | -32,568 | -33,586 | -66,576 | |
| Other operating expenses | -12,709 | -14,771 | -25,792 | -29,742 | -56,454 | |
| Total operating expenses | -28,706 | -32,355 | -59,050 | -64,064 | -124,789 | |
| EBITDA | 30,345 | 32,718 | 56,568 | 63,116 | 131,848 | |
| Amortization and depreciation | -2,358 | -2,332 | -4,521 | -4,510 | -9,050 | |
| Operating profit | 27,988 | 30,386 | 52,047 | 58,606 | 122,797 | |
| Financial revenue | 4 | 803 | 2,681 | 459 | 2,960 | 3,389 |
| Financial expenses | 4 | -22,862 | -19,121 | -45,591 | -37,665 | -84,750 |
| Net financial items | -22,059 | -16,439 | -45,132 | -34,705 | -81,360 | |
| Profit/(loss) before tax from continuing | ||||||
| operations | 5,929 | 13,947 | 6,916 | 23,902 | 41,437 | |
| Income tax expense | -1,601 | -3,342 | -1,867 | -5,645 | -7,874 | |
| Net profit/(loss) after tax from continuing operations |
4,328 | 10,605 | 5,049 | 18,257 | 33,563 | |
| For the quarter end | Year to date | |||||
|---|---|---|---|---|---|---|
| EUR thousand | Note | 30 Jun 2024 30 Jun 2023 | 30 Jun 2024 30 Jun 2023 | Full year 2023 | ||
| Discontinued operations | ||||||
| Net profit/(loss) after tax from discontinued | ||||||
| operations | 11 | - | -997 | - | -2,504 | -5,969 |
| Net profit/(loss) after tax | 4,328 | 9,608 | 5,049 | 15,752 | 27,594 | |
| Attributable to: | ||||||
| Non-controlling interests: | ||||||
| Net profit/(loss) after tax from continuing | ||||||
| operations | 95 | -83 | 140 | -226 | 182 | |
| Net profit/(loss) after tax from discontinued | ||||||
| operations | - | -594 | - | -1,494 | -3,418 | |
| Net profit/(loss) after tax | 95 | -676 | 140 | -1,720 | -3,235 | |
| Shareholders of the parent company: | ||||||
| Net profit/(loss) after tax from continuing | ||||||
| operations | 4,233 | 10,688 | 4,908 | 18,483 | 33,381 | |
| Net profit/(loss) after tax from discontinued | ||||||
| operations | - | -403 | - | -1,010 | -2,551 | |
| Net profit/(loss) after tax | 4,233 | 10,284 | 4,908 | 17,473 | 30,830 | |
| Earnings per share: | ||||||
| From continuing operations, basic and diluted: | 0.014 | 0.035 | 0.016 | 0.061 | 0.110 | |
| From continuing and discontinued operations, basic and diluted: |
0.014 | 0.034 | 0.016 | 0.058 | 0.102 | |
Interim condensed consolidated statement of comprehensive income
| For the quarter end | Year to date | ||||
|---|---|---|---|---|---|
| EUR thousand | 30 Jun 2024 | 30 Jun 2023 | 30 Jun 2024 | 30 Jun 2023 | Full year 2023 |
| Net profit/(loss) after tax | 4,328 | 9,608 | 5,049 | 15,752 | 27,594 |
| Items that will not be reclassified subsequently to profit or loss | |||||
| Remeasurement of pension plans | - | - | - | - | -48 |
| Items that may be reclassified subsequently to profit or loss | |||||
| Foreign currency translation differences - foreign operations | 4,274 | -7,224 | -4,125 | -19,636 | -10,495 |
| Fair value net gain/(loss) on cash flow hedges during the period | -216 | - | -216 | - | - |
| Cumulative net (gain)/loss on cash flow hedges reclassified to profit or loss | -796 | -1,288 | -1,593 | -2,081 | -3,569 |
| Other comprehensive income/(loss) after tax | 3,261 | -8,512 | -5,934 | -21,718 | -14,112 |
| Total comprehensive income/(loss) for the period | 7,589 | 1,096 | -885 | -5,965 | 13,482 |
| Attributable to: | |||||
| Non-controlling interests | 95 | -676 | 140 | -1,720 | -3,235 |
| Shareholders of the parent company | 7,494 | 1,773 | -1,025 | -4,245 | 16,718 |
Interim condensed consolidated statement of financial position
| For the quarter end / YTD | |||||
|---|---|---|---|---|---|
| EUR thousand | Note | 30 Jun 2024 | 30 Jun 2023 | Full year 2023 | |
| Assets | |||||
| Non-current assets | Equity | ||||
| Intangible assets | |||||
| Goodwill | 59,498 | 59,015 | 59,799 | ||
| Deferred tax assets | 7,036 | 2,999 | 8,502 | ||
| Other intangible assets | 14,049 | 15,877 | 15,116 | ||
| Tangible assets | |||||
| Property, plant and equipment | 1,806 | 2,179 | 2,036 | ||
| Right of use assets | 8 | 9,364 | 12,127 | 11,604 | |
| Financial assets | |||||
| Purchased loan portfolios | 6 | 1,283,894 | 1,241,373 | 1,265,327 | |
| Other non-current assets | 1,548 | 565 | 2,495 | ||
| Total non-current assets | 1,377,196 | 1,334,135 | 1,364,879 | ||
| Current assets | |||||
| Repossessed assets | 4,076 | 3,180 | 2,664 | ||
| Accounts receivable | 6,991 | 5,834 | 6,636 | ||
| Other current assets | 32,582 | 30,993 | 27,196 | ||
| Restricted cash | 1,945 | 7,935 | 2,613 | ||
| Cash and cash equivalents | 35,167 | 34,217 | 31,826 | ||
| Total current assets | 80,761 | 82,161 | 70,935 | ||
| Assets classified as held for sale | 11 | - | 7,538 | - | |
| Total assets | 1,457,958 | 1,423,834 | 1,435,815 | ||
| For the quarter end / YTD | |||||
|---|---|---|---|---|---|
| EUR thousand | Note | 30 Jun 2024 | 30 Jun 2023 | Full year 2023 | |
| Equity and liabilities | |||||
| Equity | |||||
| Share capital | 10 | 158,369 | 158,369 | 158,369 | |
| Other paid-in equity | 271,063 | 270,621 | 270,831 | ||
| Retained earnings | 31,991 | 13,773 | 27,082 | ||
| Other components of equity | -29,014 | -30,734 | -23,080 | ||
| Non-controlling interests | -9,527 | -8,128 | -9,667 | ||
| Total equity | 422,881 | 403,902 | 423,534 | ||
| Non-current liabilities | |||||
| Interest-bearing debt | 7 | 975,805 | 783,206 | 939,104 | |
| Deferred tax liabilities | 10,106 | 8,374 | 10,549 | ||
| Lease liabilities | 8 | 7,442 | 9,397 | 8,969 | |
| Other non-current liabilities | 1,943 | 3,834 | 2,740 | ||
| Total non-current liabilities | 995,296 | 804,811 | 961,361 | ||
| Current liabilities | |||||
| Accounts payable | 4,663 | 5,546 | 4,057 | ||
| Interest-bearing debt | 7 | - | 155,002 | - | |
| Taxes payable | 5,370 | 15,979 | 12,243 | ||
| Lease liabilities | 8 | 3,264 | 3,243 | 3,194 | |
| Other current liabilities | 26,484 | 28,402 | 31,425 | ||
| Total current liabilities | 39,781 | 208,173 | 50,919 | ||
| Liabilities directly associated with assets classified as held for sale | 11 | - | 6,948 | - | |
| Total liabilities | 1,035,077 | 1,019,932 | 1,012,281 | ||
| Total equity and liabilities | 1,457,958 | 1,423,834 | 1,435,815 |
Interim condensed consolidated statement of cash flows
| For the quarter end | Year to date | ||||||
|---|---|---|---|---|---|---|---|
| EUR thousand | Note | 30 Jun 2024 30 Jun 2023 | 30 Jun 2024 30 Jun 2023 | Full year 2023 | |||
| Operating activities | |||||||
| Profit/(loss) before tax from continuing operations |
5,929 | 13,947 | 6,916 | 23,902 | 41,437 | ||
| Profit/(loss) before tax from discontinued operations |
11 | - | -997 | - | -2,504 | -5,969 | |
| Taxes paid | -2,800 | -3,120 | -11,593 | -6,023 | -11,616 | ||
| Adjustments to reconcile profit before tax to net cash flows: |
|||||||
| Net financial items, continuing operations | 4 | 22,059 | 16,439 | 45,132 | 34,705 | 81,360 | |
| Net financial items, discontinued operations | 11 | - | 115 | - | 268 | 348 | |
| Portfolio amortization and revaluation | 30,149 | 25,464 | 52,537 | 48,259 | 88,840 | ||
| Change in fair value of forward flow commitments |
- | 762 | 120 | -1,358 | -1,805 | ||
| Cost of repossessed assets sold, incl impairment |
538 | 538 | 690 | 735 | 1,759 | ||
| Cost of REOs sold, incl impairment | 11 | - | 1,280 | - | 3,797 | 8,422 | |
| Depreciation and amortization | 2,358 | 2,332 | 4,521 | 4,510 | 9,050 | ||
| Calculated cost of employee share options | 110 | 141 | 232 | 241 | 450 | ||
| Change in working capital | -5,015 | 6,935 | -3,830 | 220 | -7,318 | ||
| Cash flow from operating activities before NPL investments |
53,327 | 63,835 | 94,726 | 106,752 | 204,959 | ||
| Purchase of loan portfolios | 6 | -71,020 | -42,765 | -84,266 | -78,302 | -119,987 | |
| Purchases related to repossessed assets | -57 | -28 | -74 | -60 | -73 | ||
| Net cash flow from operating activities | -17,750 | 21,041 | 10,385 | 28,390 | 84,898 |
| For the quarter end | Year to date | |||||
|---|---|---|---|---|---|---|
| EUR thousand | Note | 30 Jun 2024 30 Jun 2023 | 30 Jun 2024 30 Jun 2023 | Full year 2023 | ||
| Investing activities | ||||||
| Purchase of intangible and tangible assets | -734 | -1,118 | -1,455 | -1,954 | -3,874 | |
| Interest received | 81 | 48 | 116 | 85 | 385 | |
| Net cash flow from investing activities | -653 | -1,070 | -1,339 | -1,869 | -3,489 | |
| Financing activities | ||||||
| Proceeds from borrowings | 7 | 41,205 | 38,503 | 41,205 | 100,268 | 343,274 |
| Repayment of debt | 7 | - | -20,400 | -1,430 | -75,737 | -341,873 |
| Interest paid | -22,464 | -15,692 | -44,210 | -31,181 | -67,737 | |
| Loan fees paid | 7 | - | -11,449 | -117 | -11,449 | -15,376 |
| Lease payments, principal amount | 8 | -820 | -726 | -1,619 | -1,458 | -3,143 |
| Repayments to non-controlling interests | - | -792 | - | -967 | -992 | |
| Net cash flow from financing activities | 17,921 | -10,555 | -6,171 | -20,522 | -85,847 | |
| Net change in cash and cash equivalents | -483 | 9,416 | 2,875 | 5,999 | -4,438 | |
| Cash and cash equivalents at the beginning of | ||||||
| period, incl. restricted cash | 36,995 | 35,218 | 34,439 | 39,679 | 39,679 | |
| Currency translation | 600 | -84 | -201 | -1,128 | -802 | |
| Cash and cash equivalents at end of period, | ||||||
| incl. restricted cash | 37,112 | 44,550 | 37,112 | 44,550 | 34,439 |
Interim condensed consolidated statement of changes in equity
| Equity attributable to the shareholders of the parent company | ||||||||
|---|---|---|---|---|---|---|---|---|
| EUR thousand | Restricted | |||||||
| Share capital | Other paid in equity | Retained earnings Translation reserve | Cash flow hedge reserve |
Total | Non-controlling interests |
Total equity | ||
| Balance on 31 Dec 2022 | 158,369 | 270,381 | -3,699 | -18,417 | 9,401 | 416,033 | -5,441 | 410,593 |
| Result of the period | 17,473 | 17,473 | -1,720 | 15,752 | ||||
| Other comprehensive income of the period | -19,636 | -2,081 | -21,718 | -21,718 | ||||
| Total comprehensive income for the period | - | - | 17,473 | -19,636 | -2,081 | -4,245 | -1,720 | -5,965 |
| Repayments to non-controlling interests | - | -967 | -967 | |||||
| Share-based payment | 241 | 241 | 241 | |||||
| Balance on 30 Jun 2023 | 158,369 | 270,621 | 13,773 | -38,053 | 7,319 | 412,031 | -8,128 | 403,902 |
| Balance on 31 Dec 2023 | 158,369 | 270,831 | 27,082 | -28,912 | 5,832 | 433,202 | -9,667 | 423,534 |
| Result of the period | 4,908 | 4,908 | 140 | 5,049 | ||||
| Other comprehensive income of the period | -4,125 | -1,809 | -5,934 | -5,934 | ||||
| Total comprehensive income for the period | - | - | 4,908 | -4,125 | -1,809 | -1,025 | 140 | -885 |
| Repayments to non-controlling interests | - | - | ||||||
| Share-based payment | 232 | 232 | 232 | |||||
| Balance on 30 Jun 2024 | 158,369 | 271,063 | 31,991 | -33,037 | 4,023 | 432,408 | -9,527 | 422,881 |
Notes to the interim condensed consolidated financial statements
Note 1 Reporting entity and accounting principles
The parent company Axactor ASA (the Company) is a company domiciled in Norway. These condensed consolidated interim statements ("interim financial statements") comprise the Company and its subsidiaries (together referred to as "the Group"). The Group is primarily involved in debt management, specializing on both purchasing and collection on own portfolios and providing collection services for third-party owned portfolios. The activities are further described in note 3.
This unaudited interim report has been prepared in accordance with IAS 34. The accounting policies applied correspond to those described in the annual report 2023. This interim report does not contain all the information and disclosures available in the annual report and the interim report should be read together with the annual report 2023.
In preparing these interim financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual result may differ from these estimates.
Accounting policies and significant judgements, estimates and assumptions are more comprehensively discussed in the annual report 2023. The significant judgements made by management applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those described in the last annual financial statements. Management continues to assess the data and information available at the reporting date.
All prior year figures presented are for continuing operations, unless otherwise stated.
Note 2 Financial risks
All economic activities are associated with risk. Axactor's risks are managed within the Group in accordance with the policies established by the Board. For more information on financial risks and risk management, one is referred to note 3 of the Group's financial statements in the annual report 2023.
Interest rate and currency risk
The Group's long-term strategy is to hedge between 50% and 70% of interest-bearing debt with a duration of three to five years. The Group is gradually implementing the strategy in line with new portfolio investments and has in the second quarter entered into interest rate swap agreements at a nominal value of EUR 50.0 million. These instruments are recognized as hedge instruments to reduce the interest volatility in the income statement.
The Group aims to reduce currency risk by keeping interest-bearing debt in the same currencies as the Group's assets. The Group also holds cross currency interest rate swaps to reduce currency risk.
Liquidity risk
The Group monitors its risk of a shortage of funds using cash flow forecasts regularly. On 30 June 2024, the Group had an unused part of the RCF agreement of EUR 36.0 million, in addition to unrestricted cash and cash equivalents of EUR 35.2 million. The Group had positive cash flow from operating activities before NPL investments of EUR 94.7 million in the first half of 2024, and cash flows from operating activities amounted to EUR 10.4 million.
The table of contractual maturities analyses non-derivative financial liabilities of the Group into relevant maturity groupings based on the remaining period from the balance sheet date to the contractual maturity date. The contractual maturity is based on the earliest date on which the Group may be required to pay. The amounts disclosed in the table are the contractual undiscounted cash flows of liabilities. For NPL investment commitments, expected cash flows are presented.
The maturity calculation is made under the assumption that Axactor has a constant revolving credit facility draw in the period. The table includes both interest and principal cash flows. The loan repayment amounts presented are subject to change dependent on changes in variable interest rates. To the extent that interest rates are floating, the undiscounted payable interest is derived from the interest rate curves at the end of the reporting period.
The Group's estimated remaining collections from purchased loan portfolios for the next 15 years are presented below the table of contractual maturities (see also note 6).
| EUR thousand | Contractual maturities per 30 Jun 2024 | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Q3-24 | Q4-24 | Q1-25 | Q2-25 | 1-2 years | 2-4 years | 4+ years | Total | ||
| NPL investment commitments, non-cancellable 1 | 3,781 | 60 | 60 | 60 | - | - | - | 3,961 | |
| NPL investment commitments, cancellable1 | - | 2,490 | 1,660 | - | - | - | - | 4,150 | |
| Revolving credit facility (RCF) | 8,907 | 8,556 | 8,090 | 7,867 | 540,573 | - | - | 573,994 | |
| Bond ACR03 (ISIN NO0011093718) | 6,533 | 6,349 | 6,050 | 5,961 | 23,842 | 287,011 | - | 335,745 | |
| Bond ACR04 (ISIN NO0013005264) | 6,486 | 6,431 | 6,218 | 6,142 | 24,569 | 232,422 | - | 282,269 | |
| Other non-current liabilities | - | - | - | - | - | - | 1,943 | 1,943 | |
| Accounts payable | 4,663 | - | - | - | - | - | - | 4,663 | |
| Lease liabilities | 975 | 967 | 971 | 903 | 3,420 | 3,243 | 1,602 | 12,082 | |
| Other current liabilities | 21,195 | 800 | 1,000 | 3,489 | - | - | - | 26,484 | |
| Total contractual maturities | 52,542 | 25,654 | 24,049 | 24,422 | 592,404 | 522,676 | 3,544 | 1,245,291 |
1 Expected cash flows based on the last three months' actual deliveries and future deliveries on new agreements confirmed at the balance sheet date. Per 30 June 2024, cash flows are limited to EUR 48.2 million by contracted capex limits. The NPL commitments that are cancellable are cancellable with three to twelve months' notice.
| ERC per 30 Jun 2024 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| EUR thousand | Q3-24 | Q4-24 | Q1-25 | Q2-25 | 1-2 years | 2-4 years | 4+ years | Total | |
| Estimated remaining collections (ERC) | 78,393 | 84,697 | 85,173 | 85,348 | 322,721 | 563,172 | 1,444,534 | 2,664,038 |
Note 3 Operating segments
Axactor delivers credit management services and the Group's revenue is derived from the following two operating segments:
• Non-performing loans (NPL)
• Third-party collection (3PC)
The NPL segment invests in portfolios of non-performing loans, presented as 'Purchased loan portfolios' in the consolidated statement of financial position. Subsequently, the outstanding loans are collected through either amicable or legal proceedings.
The 3PC segment's focus is to perform debt collection services on behalf of third-party clients. The operating segment applies both amicable and legal proceedings to collect the non-performing loans, and normally receive a commission for these services. Other services provided include, amongst others, helping creditors to prepare documentation for future legal proceedings against debtors, handling of invoices between the invoice date and the default date and sending out reminders. For these latter services, Axactor normally receives a fixed fee.
Axactor reports its business through reporting segments which correspond to the operating segments. Segment profitability and country profitability are the two most important dimensions when making strategic priorities and deciding where to allocate the Group's resources. Segment revenue reported represents revenue generated from external customers.
The accounting policies of the reportable segments are the same as the Group's accounting policies described in note 1. Segment contribution margin represents contribution margin earned by each segment. The measurement basis of the performance of the segment is the segment's contribution margin.
For the quarter end 30 Jun 2024
| EUR thousand | NPL | 3PC | Eliminations/ Not allocated |
Total |
|---|---|---|---|---|
| Collections on own portfolios | 74,738 | - | - | 74,738 |
| Portfolio amortization and revaluation | -30,149 | - | - | -30,149 |
| Revenue from sale of repossessed assets | 1,085 | - | - | 1,085 |
| Other operating income: | ||||
| Change in fair value forward flow commitments | - | - | - | - |
| Other operating revenue and other income | - | 13,377 | - | 13,377 |
| Total income | 45,675 | 13,377 | - | 59,051 |
| Cost of repossessed assets sold | -538 | - | - | -538 |
| Impairment repossessed assets | - | - | - | - |
| Direct operating expenses | -9,670 | -8,506 | - | -18,176 |
| Contribution margin | 35,467 | 4,870 | - | 40,337 |
| SG&A, IT and corporate cost | -9,992 | -9,992 | ||
| EBITDA | 30,345 | |||
| Amortization and depreciation | -2,358 | -2,358 | ||
| Operating result | 27,988 | |||
| Total operating expenses | -10,208 | -8,506 | -9,992 | -28,706 |
| Contribution margin (%) | 77.7% | 36.4% | na | 68.3% |
| EBITDA margin (%) | 51.4% | |||
| Opex ex SG&A, IT and corporate cost / Gross revenue | 13.5% | 63.6% | na | 21.0% |
| SG&A, IT and corporate cost / Gross revenue | 11.2% |
For the quarter end 30 Jun 2023
| EUR thousand | NPL | 3PC | Eliminations/ Not allocated |
Total |
|---|---|---|---|---|
| Collections on own portfolios | 77,154 | - | - | 77,154 |
| Portfolio amortization and revaluation | -25,464 | - | - | -25,464 |
| Revenue from sale of repossessed assets | 1,020 | - | - | 1,020 |
| Other operating income: | ||||
| Change in fair value forward flow commitments | -762 | - | - | -762 |
| Other operating revenue and other income | - | 13,125 | - | 13,125 |
| Total income | 51,947 | 13,125 | - | 65,073 |
| Cost of repossessed assets sold | -538 | - | - | -538 |
| Impairment repossessed assets | - | - | - | - |
| Direct operating expenses | -11,829 | -8,794 | - | -20,624 |
| Contribution margin | 39,580 | 4,331 | - | 43,911 |
| SG&A, IT and corporate cost | -11,193 | -11,193 | ||
| EBITDA | 32,718 | |||
| Amortization and depreciation | -2,332 | -2,332 | ||
| Operating result | 30,386 | |||
| Total operating expenses | -12,367 | -8,794 | -11,193 | -32,355 |
| Contribution margin (%) | 76.2% | 33.0% | na | 67.5% |
| EBITDA margin (%) | 50.3% | |||
| Opex ex SG&A, IT and corporate cost / Gross revenue | 15.8% | 67.0% | na | 23.2% |
| SG&A, IT and corporate cost / Gross revenue | 12.3% |
Year to date 30 Jun 2024
| EUR thousand | NPL | 3PC | Eliminations/ Not allocated |
Total |
|---|---|---|---|---|
| Collections on own portfolios | 141,464 | - | - | 141,464 |
| Portfolio amortization and revaluation | -52,537 | - | - | -52,537 |
| Revenue from sale of repossessed assets | 1,584 | - | - | 1,584 |
| Other operating income: | ||||
| Change in fair value forward flow commitments | -120 | - | - | -120 |
| Other operating revenue and other income | - | 25,228 | - | 25,228 |
| Total income | 90,391 | 25,228 | - | 115,619 |
| Cost of repossessed assets sold | -690 | - | - | -690 |
| Impairment repossessed assets | - | - | - | - |
| Direct operating expenses | -20,516 | -16,580 | - | -37,097 |
| Contribution margin | 69,184 | 8,647 | - | 77,832 |
| SG&A, IT and corporate cost | -21,263 | -21,263 | ||
| EBITDA | 56,568 | |||
| Amortization and depreciation | -4,521 | -4,521 | ||
| Operating result | 52,047 | |||
| Total operating expenses | -21,207 | -16,580 | -21,263 | -59,050 |
| Contribution margin (%) | 76.5% | 34.3% | na | 67.3% |
| EBITDA margin (%) | 48.9% | |||
| Opex ex SG&A, IT and corporate cost / Gross revenue | 14.8% | 65.7% | na | 22.5% |
| SG&A, IT and corporate cost / Gross revenue | 12.6% |
Year to date 30 Jun 2023
| EUR thousand | NPL | 3PC | Eliminations/ Not allocated |
Total |
|---|---|---|---|---|
| Collections on own portfolios | 146,818 | - | - | 146,818 |
| Portfolio amortization and revaluation | -48,259 | - | - | -48,259 |
| Revenue from sale of repossessed assets | 1,409 | - | - | 1,409 |
| Other operating income: | ||||
| Change in fair value forward flow commitments | 1,358 | - | - | 1,358 |
| Other operating revenue and other income | - | 25,855 | - | 25,855 |
| Total income | 101,325 | 25,855 | - | 127,180 |
| Cost of repossessed assets sold | -735 | - | - | -735 |
| Impairment repossessed assets | - | - | - | - |
| Direct operating expenses | -23,373 | -17,571 | - | -40,944 |
| Contribution margin | 77,217 | 8,284 | - | 85,501 |
| SG&A, IT and corporate cost | -22,385 | -22,385 | ||
| EBITDA | 63,116 | |||
| Amortization and depreciation | -4,510 | -4,510 | ||
| Operating result | 58,606 | |||
| Total operating expenses | -24,109 | -17,571 | -22,385 | -64,064 |
| Contribution margin (%) | 76.2% | 32.0% | na | 67.2% |
| EBITDA margin (%) | 49.6% | |||
| Opex ex SG&A, IT and corporate cost / Gross revenue | 16.3% | 68.0% | na | 23.9% |
| SG&A, IT and corporate cost / Gross revenue | 12.9% |
Full year 2023
| EUR thousand | NPL | 3PC | Eliminations/ Not allocated |
Total |
|---|---|---|---|---|
| Collections on own portfolios | 287,046 | - | - | 287,046 |
| Portfolio amortization and revaluation | -88,840 | - | - | -88,840 |
| Revenue from sale of repossessed assets | 2,587 | - | - | 2,587 |
| Other operating income: | ||||
| Change in fair value forward flow commitments | 1,805 | - | - | 1,805 |
| Other operating revenue and other income | - | 54,039 | - | 54,039 |
| Total income | 202,598 | 54,039 | - | 256,637 |
| Cost of repossessed assets sold | -1,759 | - | - | -1,759 |
| Impairment repossessed assets | - | - | - | - |
| Direct operating expenses | -46,186 | -34,492 | - | -80,678 |
| Contribution margin | 154,653 | 19,547 | - | 174,200 |
| SG&A, IT and corporate cost | -42,352 | -42,352 | ||
| EBITDA | 131,848 | |||
| Amortization and depreciation | -9,050 | -9,050 | ||
| Operating result | 122,797 | |||
| Total operating expenses | -47,945 | -34,492 | -42,352 | -124,789 |
| Contribution margin (%) | 76.3% | 36.2% | na | 67.9% |
| EBITDA margin (%) | 51.4% | |||
| Opex ex SG&A, IT and corporate cost / Gross revenue | 16.6% | 63.8% | na | 24.0% |
| SG&A, IT and corporate cost / Gross revenue | 12.3% | |||
Note 4 Financial items
| For the quarter end | Year to date | ||||
|---|---|---|---|---|---|
| EUR thousand | 30 Jun 2024 | 30 Jun 2023 | 30 Jun 2024 | 30 Jun 2023 | Full year 2023 |
| Financial revenue | |||||
| Interest on bank deposits | 81 | 48 | 116 | 85 | 385 |
| Net foreign exchange gain 1 | 716 | - | 328 | - | - |
| Gain on purchase of treasury bonds (note 7) | - | - | - | 115 | 115 |
| Other financial income | 6 | 2,633 | 15 | 2,760 | 2,889 |
| Total financial revenue | 803 | 2,681 | 459 | 2,960 | 3,389 |
| Financial expenses | |||||
| Interest expense on borrowings | -22,375 | -18,551 | -44,799 | -36,535 | -81,594 |
| Net foreign exchange loss 1 | - | -317 | - | -696 | -815 |
| Other financial expenses | -487 | -252 | -792 | -434 | -2,341 |
| Total financial expenses | -22,862 | -19,121 | -45,591 | -37,665 | -84,750 |
| Total net financial items | -22,059 | -16,439 | -45,132 | -34,705 | -81,360 |
1 Foreign exchange gains and losses are presented net as either financial revenue or financial expenses, depending on the net position. The amount includes changes in fair value of currency derivatives.
Note 5 Income
The Group delivers credit management services in six European countries: Finland, Germany, Italy, Norway, Spain and Sweden. Axactor also owns some portfolios through entities based in Luxembourg.
The Group's income from from external customers by location of operations and information about its non-current assets by location of assets are detailed below.
The information in the table presented is based on the location of the debtors and the country of the company performing the collection (which correspond). This is not necessarily the same as the country owning the portfolio. The same principle is used for the allocation of the non-current assets. Non-current assets presented in the table consists of intangible assets, goodwill, property, plant and equipment and right of use assets.
Total income
| Full year 2023 | ||||
|---|---|---|---|---|
| 3,266 | 3,261 | 3,920 | 6,963 | 14,425 |
| 7,175 | 10,017 | 16,279 | 19,735 | 40,759 |
| 9,543 | 9,409 | 19,649 | 18,029 | 38,438 |
| 9,719 | 7,570 | 19,076 | 19,398 | 41,088 |
| 27,136 | 29,086 | 49,422 | 51,435 | 100,498 |
| 2,211 | 5,729 | 7,274 | 11,621 | 21,428 |
| 59,051 | 65,073 | 115,619 | 127,180 | 256,637 |
| For the quarter end 30 Jun 2024 30 Jun 2023 |
Year to date 30 Jun 2024 30 Jun 2023 |
Non-current assets
| Book value | |||
|---|---|---|---|
| EUR thousand | 30 Jun 2024 30 Jun 2023 | Full year 2023 | |
| Finland | 2,876 | 3,424 | 3,017 |
| Germany | 15,411 | 16,372 | 15,903 |
| Italy | 15,658 | 15,919 | 15,825 |
| Norway | 28,227 | 30,186 | 30,186 |
| Spain | 19,696 | 19,845 | 20,299 |
| Sweden | 2,849 | 3,452 | 3,325 |
| Total assets | 84,718 | 89,198 | 88,555 |
Portfolio revenue
Portfolio revenue consists of interest income from purchased loan portfolios, net gain/(loss) from purchased loan portfolios and revenue from sale of repossessed assets. Net gain/(loss) from purchased loan portfolios is split into collections above/(below) collection forecasts and net present value of changes in collection forecasts.
For the quarter end 30 Jun 2024
| EUR thousand | Finland | Germany | Italy | Norway | Spain | Sweden | Total |
|---|---|---|---|---|---|---|---|
| Interest income from purchased loan portfolios | 3,759 | 8,926 | 7,456 | 9,689 | 18,807 | 6,202 | 54,839 |
| Collections above/(below) forecasts | -492 | -1,816 | -576 | -2,386 | -94 | -322 | -5,686 |
| NPV of changes in collection forecasts | -5 | -1,300 | 6 | 537 | -132 | -3,668 | -4,562 |
| Net gain/(loss) purchased loan portfolios | -498 | -3,116 | -570 | -1,849 | -226 | -3,990 | -10,249 |
| Sale of repossessed assets | 1,085 | 1,085 | |||||
| Total portfolio revenue | 3,261 | 5,810 | 6,886 | 7,840 | 19,666 | 2,211 | 45,675 |
EUR thousand Finland Germany Italy Norway Spain Sweden Total Interest income from purchased loan portfolios 7,647 18,093 14,917 19,312 36,509 12,599 109,076 Collections above/(below) forecasts -1,329 -3,530 -470 -4,151 -624 -759 -10,863 NPV of changes in collection forecasts -2,409 -1,195 -9 584 -1,691 -4,566 -9,286 Net gain/(loss) purchased loan portfolios -3,738 -4,725 -479 -3,567 -2,315 -5,325 -20,149 Sale of repossessed assets 1,584 1,584 Total portfolio revenue 3,909 13,368 14,438 15,745 35,778 7,274 90,511
For the quarter end 30 Jun 2023
| EUR thousand | Finland | Germany | Italy | Norway | Spain | Sweden | Total |
|---|---|---|---|---|---|---|---|
| Interest income from purchased loan portfolios | 3,933 | 9,530 | 6,407 | 8,785 | 17,179 | 6,361 | 52,194 |
| Collections above/(below) forecasts | -572 | -1,036 | 203 | -1,173 | 3,728 | -1,012 | 138 |
| NPV of changes in collection forecasts | -283 | -386 | 120 | -675 | 773 | -192 | -642 |
| Net gain/(loss) purchased loan portfolios | -855 | -1,422 | 323 | -1,848 | 4,501 | -1,204 | -505 |
| Sale of repossessed assets | 1,020 | 1,020 | |||||
| Total portfolio revenue | 3,077 | 8,108 | 6,730 | 6,936 | 22,700 | 5,158 | 52,709 |
Year to date 30 Jun 2023
Year to date 30 Jun 2024
| EUR thousand | Finland | Germany | Italy | Norway | Spain | Sweden | Total |
|---|---|---|---|---|---|---|---|
| Interest income from purchased loan portfolios | 7,898 | 18,739 | 12,193 | 18,129 | 34,276 | 12,915 | 104,150 |
| Collections above/(below) forecasts | -978 | -2,389 | 459 | -2,285 | 4,727 | -1,522 | -1,988 |
| NPV of changes in collection forecasts | -321 | -489 | 212 | -696 | -1,491 | -818 | -3,604 |
| Net gain/(loss) purchased loan portfolios | -1,299 | -2,878 | 670 | -2,981 | 3,236 | -2,340 | -5,591 |
| Sale of repossessed assets | 1,409 | 1,409 | |||||
| Total portfolio revenue | 6,598 | 15,861 | 12,864 | 15,148 | 38,921 | 10,575 | 99,968 |
Full year 2023
| EUR thousand | Finland | Germany | Italy | Norway | Spain | Sweden | Total |
|---|---|---|---|---|---|---|---|
| Interest income from purchased loan portfolios | 15,713 | 37,520 | 26,730 | 36,345 | 69,649 | 25,332 | 211,289 |
| Collections above/(below) forecasts | -1,654 | -2,774 | 296 | -3,274 | 3,696 | -2,295 | -6,004 |
| NPV of changes in collection forecasts | -779 | -861 | 335 | 338 | -2,915 | -3,196 | -7,078 |
| Net gain/(loss) purchased loan portfolios | -2,433 | -3,635 | 631 | -2,935 | 781 | -5,491 | -13,082 |
| Sale of repossessed assets | 2,587 | 2,587 | |||||
| Total | 13,280 | 33,885 | 27,361 | 33,409 | 73,017 | 19,841 | 200,793 |
Note 6 Purchased loan portfolios
Purchased loan portfolios consists of portfolios of delinquent consumer debts purchased significantly below nominal value, reflecting incurred and expected credit losses, and thus defined as credit impaired. For purchased loan portfolios, timely collection of principal and interest is no longer reasonably assured at the date of purchase. Purchased loan portfolios are recognized at fair value at the date of purchase. Since the loans are measured at fair value, which includes an estimate of future credit losses, no allowance for credit losses is recorded on the day of acquisition of the loans. The loans are subsequently measured at amortized cost according to a credit adjusted effective interest rate.
Since the delinquent consumer debts are a homogenous group, the future cash flows are projected on a portfolio basis except for secured portfolios, for which cash flows are projected on a collateral asset basis. The majority of the purchased loan portfolios are unsecured, whereas approximately 6% of the book value of the loans are secured by a property object per 30 June 2024 (2023: 6%).
The carrying amount of each portfolio is determined by projecting future cash flows discounted to present value using the credit adjusted effective interest rate as at the date the portfolio was acquired. The total cash flows (both principal and interest) expected to be collected on purchased credit impaired loans are regularly reviewed. Changes in expected cash flows are adjusted in the carrying amount and are recognized in the profit or loss as income or expense in 'Net gain/ (loss) purchased loan portfolios'. Interest revenue is recognized using a credit adjusted effective interest rate, included in 'Interest income from purchased loan portfolios'.
The estimation of future cash flows is affected by several factors, including general macro factors, market specific factors, portfolio specific factors and internal factors. Axactor has incorporated into the estimated remaining collections the effect of the economic factors and conditions that is expected to influence collections going forward. Scenarios have been used to consider possible non-linear relationships between macroeconomic factors and collections.
For more information on accounting principles and a description of significant accounting judgments, estimates and assumptions related to purchased loan portfolios, see note 2.9.1 and note 4 in the Group's annual report 2023.
| For the quarter end | Year to date | ||||
|---|---|---|---|---|---|
| EUR thousand | 30 Jun 2024 30 Jun 2023 | 30 Jun 2024 30 Jun 2023 | Full year 2023 | ||
| Balance at start of period | 1,235,256 | 1,242,411 | 1,265,327 | 1,252,642 | 1,252,642 |
| Acquisitions during the period | 70,438 | 40,155 | 81,202 | 72,973 | 116,118 |
| Collections | -74,738 | -77,154 | -141,464 | -146,818 | -287,046 |
| Interest income from purchased loan portfolios | 54,839 | 52,194 | 109,076 | 104,150 | 211,289 |
| Net gain/(loss) purchased loan portfolios | -10,249 | -505 | -20,149 | -5,591 | -13,082 |
| Repossessions | -321 | -380 | -2,028 | -626 | -1,123 |
| Deliveries on forward flow contracts | - | 378 | 185 | 378 | 1,435 |
| Currency translation differences | 8,670 | -15,726 | -8,255 | -35,735 | -14,905 |
| Balance at end of period | 1,283,894 | 1,241,373 | 1,283,894 | 1,241,373 | 1,265,327 |
Acquisitions during the period can be split into nominal value of the acquired portfolios and expected credit losses at acquisition as follows:
| For the quarter end | Year to date | ||||
|---|---|---|---|---|---|
| EUR thousand | 30 Jun 2024 30 Jun 2023 | 30 Jun 2024 30 Jun 2023 | Full year 2023 | ||
| Nominal value acquired portfolios | 2,001,445 | 461,129 | 2,483,893 | 548,164 | 3,659,615 |
| Expected credit losses at acquisition | -1,931,007 | -420,974 | -2,402,690 | -475,191 | -3,543,497 |
| Acquisitions during the period | 70,438 | 40,155 | 81,202 | 72,973 | 116,118 |
Purchase of loan portfolios presented in the consolidated statement of cash flows will not correspond to acquisitions during the period due to deferred payments.
| 30 Jun 2024 | 30 Jun 2023 | Full year 2023 | ||||
|---|---|---|---|---|---|---|
| EUR thousand | Book value | % of total | Book value | % of total | Book value | % of total |
| Finland | 112,035 | 9% | 120,228 | 10% | 118,453 | 9% |
| Germany | 181,438 | 14% | 195,299 | 16% | 189,308 | 15% |
| Italy | 161,589 | 13% | 155,324 | 13% | 165,929 | 13% |
| Norway | 242,364 | 19% | 221,599 | 18% | 240,989 | 19% |
| Spain | 394,403 | 31% | 359,349 | 29% | 349,715 | 28% |
| Sweden | 192,066 | 15% | 189,574 | 15% | 200,932 | 16% |
| Total book value | 1,283,894 | 100% | 1,241,373 | 100% | 1,265,327 | 100% |
The book value of purchased loan portfolios per market is presented in the table below:
The ERC represents the estimated gross collections on the purchased loan portfolios. ERC, amortization, and interest income from purchased loan portfolios per year are specified below (year 1 means the first 12 months from the reporting date):
| EUR thousand | Estimated remaining collections (ERC), amortization and interest income from purchased loan portfolios per year | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Year | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | Total ERC |
| 30 Jun 2024 | ||||||||||||||||
| ERC | 333,611 | 322,721 | 299,774 | 263,399 | 229,823 | 196,013 | 175,431 | 157,718 | 141,788 | 127,279 | 106,772 | 92,858 | 81,561 | 72,229 | 63,063 | 2,664,038 |
| Amortization | 113,702 | 126,812 | 129,516 | 118,419 | 105,984 | 89,545 | 83,167 | 78,469 | 74,768 | 71,924 | 62,324 | 58,310 | 56,564 | 56,832 | 57,557 | 1,283,894 |
| Interest income | 219,909 | 195,909 | 170,258 | 144,979 | 123,839 | 106,467 | 92,264 | 79,249 | 67,020 | 55,355 | 44,448 | 34,547 | 24,997 | 15,397 | 5,507 | 1,380,144 |
| 30 Jun 2023 | ||||||||||||||||
| ERC | 312,324 | 296,629 | 273,436 | 244,812 | 213,873 | 188,201 | 169,008 | 153,907 | 139,956 | 127,850 | 116,138 | 97,355 | 85,612 | 76,061 | 67,903 | 2,563,067 |
| Amortization | 111,646 | 117,603 | 116,154 | 107,627 | 95,068 | 84,080 | 77,650 | 74,455 | 71,912 | 70,891 | 70,147 | 61,871 | 59,928 | 60,164 | 62,177 | 1,241,373 |
| Interest income | 200,679 | 179,026 | 157,282 | 137,185 | 118,805 | 104,120 | 91,358 | 79,452 | 68,044 | 56,959 | 45,991 | 35,484 | 25,684 | 15,898 | 5,726 | 1,321,694 |
| Full year 2023 | ||||||||||||||||
| ERC | 314,676 | 308,058 | 283,589 | 259,528 | 225,064 | 195,895 | 176,394 | 158,644 | 143,318 | 129,194 | 112,964 | 93,850 | 81,633 | 72,962 | 64,648 | 2,620,416 |
| Amortization | 105,653 | 120,186 | 118,013 | 116,194 | 102,024 | 89,571 | 83,946 | 79,066 | 75,868 | 73,397 | 68,420 | 59,450 | 56,796 | 57,606 | 59,135 | 1,265,327 |
| Interest income | 209,023 | 187,871 | 165,575 | 143,334 | 123,040 | 106,323 | 92,448 | 79,578 | 67,450 | 55,797 | 44,544 | 34,400 | 24,838 | 15,356 | 5,513 | 1,355,089 |
Note 7 Interest-bearing loans and borrowings
| EUR thousand | Currency | Facility limit | Nominal value | Treasury bonds | Carrying amount, EUR | Interest coupon | Maturity |
|---|---|---|---|---|---|---|---|
| Facility | |||||||
| Bond ACR03 (ISIN NO0011093718) | EUR | 300,000 | -18,950 | 277,850 | 3m EURIBOR+535bps | 15.09.2026 | |
| Bond ACR04 (ISIN NO0013005264) | NOK | 201,710 | 200,179 | 3m NIBOR + 825bps | 07.09.2027 | ||
| Total bond loans | 501,710 | -18,950 | 478,030 | ||||
| Revolving credit facility | EUR | 349,498 | 338,280 | EURIBOR+ margin | 30.06.2026 | ||
| (multi-currency facility) | NOK | 14,032 | 14,032 | NIBOR+ margin | 30.06.2026 | ||
| SEK | 145,463 | 145,463 | STIBOR+ margin | 30.06.2026 | |||
| Total credit facilities | 545,000 | 508,994 | 497,775 | ||||
| Total interest-bearing loans and borrowings at end of period | 1,010,704 | -18,950 | 975,805 |
Of the total interest-bearing loans and borrowings per 30 June 2024, EUR 975.8 million is classified as non-current and EUR 0 million is classified as current.
Change in loans and borrowings from financial activities
| EUR thousand | Bond loans | Credit facilities | Total Borrowings |
|---|---|---|---|
| Balance on 1 Jan | 480,214 | 458,889 | 939,104 |
| Proceeds from loans and borrowings | - | 41,205 | 41,205 |
| Repayment of loans and borrowings | - | -1,430 | -1,430 |
| Loan fees | -117 | - | -117 |
| Total changes in financial cash flow | -117 | 39,775 | 39,658 |
| Amortization of capitalized loan fees | 805 | 2,591 | 3,395 |
| Currency translation differences | -2,990 | -3,480 | -6,470 |
| Other non-cash movements | 117 | - | 117 |
| Total interest-bearing loans and borrowings at end of period | 478,030 | 497,775 | 975,805 |
Maturity
The maturity calculation is made under the assumption that no new portfolios are acquired, and the revolving credit facility draw is constant to maturity date
| Estimated future cash flow within | |||||||
|---|---|---|---|---|---|---|---|
| Currency | Carrying amount | Total estimated future cash flow |
6 months or less | 6-12 months | 1-2 years | 2-5 years | |
| Bond ACR03 (ISIN NO0011093718) | EUR | 277,850 | 335,745 | 12,882 | 12,010 | 23,842 | 287,011 |
| Bond ACR04 (ISIN NO0013005264) | NOK | 200,179 | 282,269 | 12,917 | 12,360 | 24,569 | 232,422 |
| Total bond loan | 478,030 | 618,014 | 25,800 | 24,370 | 48,412 | 519,432 | |
| Revolving credit facility (multi-currency facility) | EUR/NOK/SEK | 497,775 | 573,994 | 17,464 | 15,957 | 540,573 | - |
| Total credit facilities | 497,775 | 573,994 | 17,464 | 15,957 | 540,573 | - | |
| Total interest-bearing loans and borrowings at end of period | 975,805 | 1,192,007 | 43,263 | 40,327 | 588,984 | 519,432 |
Revolving credit facility DNB/Nordea
The revolving credit facility consists of EUR 545 million in a multi-currency facility. The loan carries a variable interest rate based on the interbank rate in each currency with a margin. The maturity date for the facility is 30 June 2026.
The following financial covenants apply:
- NIBD ratio to pro-forma adjusted cash EBITDA ≤ 3:1
- (secured loans (RCF) less cash to pro-forma adjusted cash EBITDA L12M)
- Portfolio loan to value ratio ≤ 60% (NIBD to total book value of loan portfolios)
- Portfolio collection performance ≥ 90% (actual portfolio performance L6M to active forecast L6M)
- Parent loan to value ≤ 80% (total loans for the Group less cash to total book value of all loan portfolios and REOs)
Axactor is compliant with all covenants.
All subsidiaries of the Group, except Reolux Holding S.à r.l. and its subsidiaries, are part of the security package for this facility. The subsidiaries that are part of the security package are guarantors and have granted a share pledge and a bank account pledge with the exception of Axactor Italy SpA and the subsidiaries of Axactor Portfolio Holding where there is only granted a share pledge.
Bond loans
ACR03 (ISIN NO0011093718)
The bond was placed at 3m EURIBOR + 5.35% interest, with maturity date 15 September 2026. The bond is listed on Oslo Børs. On 30 June 2024, the Group holds treasury bonds in ACR03 with a nominal value of EUR 19.0 million.
ACR04 (ISIN NO0013005264)
The bond was placed at 3m NIBOR + 8.25% interest, with maturity date 7 September 2027. The bond is listed on Oslo Børs.
The following financial covenants apply to both bond loans:
- Interest coverage ratio: ≥ 3.0x (Pro-forma adjusted Cash EBITDA to net interest expenses)
- Leverage ratio: ≤ 4.0x (NIBD to pro-forma adjusted cash EBITDA)
- Net loan to value: ≤ 80% (NIBD to total book value all loan portfolios and REOs)
- Net secured loan to value: ≤ 60% (secured loans less cash to total book value all loan portfolios and REOs)
Axactor is compliant with all covenants.
Trustee: Nordic Trustee
Note 8 Leases
From June 2024, Axactor has subleased part of its leased office space, resulting in a reduction of right of use assets of EUR 0.7 million and recognition of lease receivables of EUR 0.6 million. The lease receivables are included in the line items 'Other current assets' and 'Other non-current assets' in the consolidated statement of financial position.
Right of use assets
| EUR thousand | Buildings | Vehicles | Other | Total |
|---|---|---|---|---|
| Right of use assets on 31 Dec 2022 | 11,263 | 401 | 93 | 11,757 |
| Additions | 1,826 | 573 | 53 | 2,452 |
| Depreciation | -1,477 | -186 | -19 | -1,682 |
| Disposals | -34 | - | - | -34 |
| Currency translation differences | -362 | -2 | -1 | -365 |
| Right of use assets on 30 Jun 2023 | 11,216 | 786 | 125 | 12,127 |
| Right of use assets on 31 Dec 2023 | 10,711 | 792 | 101 | 11,604 |
| Additions | 172 | 150 | - | 323 |
| Depreciation | -1,557 | -208 | -25 | -1,790 |
| Disposals | -675 | -18 | - | -694 |
| Currency translation differences | -77 | -2 | - | -79 |
| Right of use assets on 30 Jun 2024 | 8,574 | 714 | 75 | 9,364 |
| Remaining lease term | 1-8 years | 1-4 years | 1-4 years | |
| Depreciation method | Linear | Linear | Linear | |
Lease liabilities
| EUR thousand | 30 Jun 2024 | 30 Jun 2023 | Full year 2023 |
|---|---|---|---|
| Lease liabilities on 1 Jan | 12,163 | 12,239 | 12,239 |
| Net new leases | 242 | 2,240 | 3237 |
| Lease payments, principal amount | -1,619 | -1,458 | -3143 |
| Currency translation differences | -80 | -380 | -171 |
| Lease liabilities at period end | 10,706 | 12,641 | 12,163 |
| Current | 3,264 | 3,243 | 3,194 |
| Non-current | 7,442 | 9,397 | 8,969 |
The future aggregated minimum lease payments under lease liabilities are as follows:
| 30 Jun 2024 | 30 Jun 2023 | Full year 2023 |
|---|---|---|
| 3,817 | 3,851 | 3,837 |
| 3,420 | 3,420 | 3,598 |
| 2,366 | 2,965 | 3,232 |
| 877 | 2,025 | 1,237 |
| 566 | 628 | 700 |
| 1,036 | 1,491 | 1,261 |
| 12,082 | 14,379 | 13,866 |
| -1,376 | -1,738 | -1,703 |
| 10,706 | 12,641 | 12,163 |
Note 9 Fair value of forward flow commitments
Changes in the fair value of forward flow commitments are shown below. For additional information, see note 2.9.2 in the Group's annual report 2023.
| EUR thousand | 30 Jun 2024 | 30 Jun 2023 | Full year 2023 |
|---|---|---|---|
| Balance on 1 Jan | 311 | - | - |
| Value change | -120 | 1,358 | 1,805 |
| Deliveries | -185 | -378 | -1,435 |
| Currency translation differences | -5 | -75 | -58 |
| Balance at period end | - | 904 | 311 |
The changes in fair value of forward flow commitments are included in 'Other current assets' in the consolidated statement of financial position;
| EUR thousand | 30 Jun 2024 | 30 Jun 2023 | Full year 2023 |
|---|---|---|---|
| Fair value of forward flow commitments (asset) | - | 904 | 311 |
| Balance at period end | - | 904 | 311 |
Note 10 Issued shares and share capital
Issued shares and share capital
| Number of shares | Share capital (EUR) | |
|---|---|---|
| On 31 Dec 2022 | 302,145,464 | 158,368,902 |
| On 31 Dec 2023 | 302,145,464 | 158,368,902 |
| On 30 Jun 2024 | 302,145,464 | 158,368,902 |
Shares owned by the Board and Group executive management on 30 Jun 2024
| Name | Shareholding | Share % |
|---|---|---|
| Latino Invest AS 1 | 1,040,000 | 0.3% |
| Terje Mjøs Holding AS 2 | 750,000 | 0.2% |
| Johnny Tsolis 1 | 730,000 | 0.2% |
| Vibeke Ly 3 | 203,750 | 0.1% |
| Arnt Andre Dullum 3 | 200,000 | 0.1% |
| Karl Mamelund 3 | 196,858 | 0.1% |
| Nina Mortensen 3 | 160,000 | 0.1% |
| Kjersti Høklingen 2 | 21,000 | 0.0% |
| Brita Eilertsen 2 | 19,892 | 0.0% |
| Ørjan Svanevik, through Oavik Capital AS2 | 13,000 | 0.0% |
1 CEO/related to the CEO of Axactor ASA
2 Member of the Board/controlled by member of the Board
3 Member of the Group executive management
20 largest shareholders on 30 Jun 2024
| Name | Shareholding | Share % |
|---|---|---|
| Geveran Trading Co Ltd | 150,385,439 | 49.8% |
| Torstein Ingvald Tvenge | 10,000,000 | 3.3% |
| Skandinaviska Enskilda Banken AB | 5,500,000 | 1.8% |
| Skandinaviska Enskilda Banken AB (Nominee) | 5,279,467 | 1.7% |
| Verdipapirfondet Nordea Norge Verdi | 4,454,162 | 1.5% |
| Spectatio Finans AS | 3,454,355 | 1.1% |
| Nordnet Livsforsikring AS | 2,927,117 | 1.0% |
| Nordnet Bank AB (Nominee) | 2,597,975 | 0.9% |
| Endre Rangnes | 2,017,000 | 0.7% |
| Gvepseborg AS | 1,782,826 | 0.6% |
| Alpette AS | 1,661,643 | 0.5% |
| Stavern Helse og Forvaltning AS | 1,500,000 | 0.5% |
| Velde Holding AS | 1,194,915 | 0.4% |
| Andres Lopez Sanchez | 1,177,525 | 0.4% |
| David Martin Ibeas | 1,177,525 | 0.4% |
| Verdipapirfondet Storebrand Norge | 1,166,706 | 0.4% |
| Øen Holding AS | 1,100,000 | 0.4% |
| Avanza Bank AB | 1,084,200 | 0.4% |
| Latino Invest AS | 1,040,000 | 0.3% |
| Herman Alfred Brenaas | 1,020,000 | 0.3% |
| Total 20 largest shareholders | 200,520,855 | 66.4% |
| Other shareholders | 101,624,609 | 33.6% |
| Total number of shares | 302,145,464 | 100% |
| Total number of shareholders | 8,383 |
Note 11 Discontinued operations
There are no discontinued operations or assets classified as held for sale in 2024.
The results of the discontinued operations, which have been included in net profit/(loss) after tax for 2023, were as follows:
| For the quarter end | Year to date | ||
|---|---|---|---|
| EUR thousand | 30 Jun 2023 | 30 Jun 2023 | Full year 2023 |
| Other operating revenue | 792 | 2,335 | 4,296 |
| Total income | 792 | 2,335 | 4,296 |
| Cost of REOs sold, incl impairment | -1,280 | -3,797 | -8,422 |
| Other operating expenses | -394 | -774 | -1,495 |
| Total operating expenses | -1,674 | -4,571 | -9,917 |
| EBITDA | -882 | -2,236 | -5,621 |
| Amortization and depreciation | - | - | - |
| Operating profit | -882 | -2,236 | -5,621 |
| Financial expenses | -115 | -268 | -348 |
| Net financial items | -115 | -268 | -348 |
| Profit/(loss) before tax | -997 | -2,504 | -5,969 |
| Income tax expense | - | - | - |
| Net profit/(loss) after tax | -997 | -2,504 | -5,969 |
| Attributable to: | |||
| Non-controlling interests | -594 | -1,494 | -3,418 |
| Shareholders of the parent company | -403 | -1,010 | -2,551 |
| Earnings per share: basic and diluted | -0.001 | -0.003 | -0.008 |
The major classes of assets and liabilities comprising the operations classified as held for sale in 2023 were as follows:
The net cash flows incurred by the operations classified as held for sale in 2023 were as follows:
| EUR thousand | 30 Jun 2023 | Full year 2023 |
|---|---|---|
| Current assets | ||
| Stock of secured assets | 4,621 | - |
| Accounts receivable | 133 | - |
| Other current assets | 386 | - |
| Cash and cash equivalents | 2,397 | - |
| Total current assets | 7,538 | - |
| Assets classified as held for sale | 7,538 | - |
| Non-current liabilities | ||
| Interest-bearing debt | 6,271 | - |
| Total non-current liabilities | 6,271 | - |
| Current liabilities | ||
| Interest-bearing debt | - | - |
| Other current liabilities | 677 | - |
| Total current liabilities | 677 | - |
| Liabilities directly associated with assets classified as held for sale | 6,948 | - |
| Net assets classified as held for sale | 590 | - |
| For the quarter end | Year to date | ||
|---|---|---|---|
| EUR thousand | 30 Jun 2023 | 30 Jun 2023 | Full year 2023 |
| Net cash flow from operating activities | 397 | 1,561 | 2,801 |
| Net cash flow from investing activities | - | - | - |
| Net cash flow from financing activities | -1,731 | -2,771 | -6,409 |
| Total net cash flow | -1,333 | -1,210 | -3,607 |
/ Alternative performance measures
Alternative performance measures (APMs) used in Axactor
| APM | Definition | Purpose of use | Reconciliation IFRS |
|---|---|---|---|
| Gross revenue | Total income plus portfolio amortizations and revaluation, and change in fair value of forward flow commitments |
To review the revenue before split into interest and amortization (for own portfolios) |
Total income from consolidated statement of profit or loss plus portfolio amortization and revaluation and change in fair value of forward flow commitments in the consolidated statement of cash flows |
| Cash EBITDA | EBITDA adjusted for calculated cost of share option program, portfolio amortization and revaluation, change in fair value of forward flow commitments and repossessed assets cost of sale and impairment |
To reflect cash from operating activities, excluding timing of taxes paid and movement in working capital |
EBITDA (total income minus total operating expenses) in consolidated statement of profit or loss adjusted for specified elements from the consolidated statement of cash flows |
| Cash EBITDA, incl. discontinued operations | Cash EBITDA plus EBITDA from discontinued operations, adjusted for REO cost of sale, including impairment |
To reflect cash from continuing and discontinued operating activities, excluding timing of taxes paid and movement in working capital |
EBITDA (total income minus total operating expenses) in consolidated statement of profit or loss plus EBITDA from discontinued operations according to note 11, adjusted for specified elements from the consolidated statement of cash flows |
| Estimated remaining collections (ERC) | Estimated remaining collections express the expected future cash collections on purchased loan portfolios in nominal values, over the next 180 months. The ERC does not include sale of repossessed assets if the assets are already repossessed |
ERC is a standard APM within the industry with the purpose to illustrate the future cash collections including estimated interest income and opex |
Purchased loan portfolios in the consolidated statement of financial position, plus estimated operating expenses for future collections at time of acquisition and estimated discounted gain |
| Net interest-bearing debt (NIBD) | Net interest-bearing debt reflects total interest-bearing debt less total amount of unrestricted cash and cash equivalents |
NIBD is used as an indication of the Group's ability to pay off all of its debt |
Non-current and current portion of interest-bearing debt and cash and cash equivalents from the consolidated statement of financial position and as attributable to discontinued operations according to note 11, with adjustments to get to nominal value of the debt, less treasury bonds |
| Return on equity to shareholders, annualized | Net profit/(loss) after tax attributable to shareholders divided by average equity for the period attributable to shareholders, annualized |
Measures the profitability in relation to shareholders' equity | Net profit/(loss) after tax attributable to shareholders of the parent company from the consolidated statement of profit or loss divided by average equity attributable to shareholders from the consolidated statement of changes in equity |
| Return on equity, annualized | Net profit/(loss) after tax divided by average total equity for the period, annualized |
Measures the profitability in relation to total equity | Net profit/(loss) after tax from continuing operations from the consolidated statement of profit or loss divided by average total equity from the consolidated statement of changes in equity |
Gross revenue
| For the quarter end | Year to date | ||||
|---|---|---|---|---|---|
| Full year 2023 | |||||
| 59,051 | 65,073 | 115,619 | 127,180 | 256,637 | |
| 30,149 | 25,464 | 52,537 | 48,259 | 88,840 | |
| - | 762 | 120 | -1,358 | -1,805 | |
| 89,200 | 91,299 | 168,276 | 174,081 | 343,672 | |
| 30 Jun 2024 30 Jun 2023 | 30 Jun 2024 30 Jun 2023 |
EBITDA and Cash EBITDA
| For the quarter end | Year to date | ||||
|---|---|---|---|---|---|
| EUR thousand | 30 Jun 2024 30 Jun 2023 | 30 Jun 2024 30 Jun 2023 | Full year 2023 | ||
| Total income | 59,051 | 65,073 | 115,619 | 127,180 | 256,637 |
| Total operating expenses | -28,706 | -32,355 | -59,050 | -64,064 | -124,789 |
| EBITDA | 30,345 | 32,718 | 56,568 | 63,116 | 131,848 |
| Calculated cost of share option program | 110 | 141 | 232 | 242 | 450 |
| Portfolio amortization and revaluation | 30,149 | 25,464 | 52,537 | 48,259 | 88,840 |
| Change in fair value of forward flow commitments | - | 762 | 120 | -1,358 | -1,805 |
| Cost of repossessed assets sold, incl. impairment | 538 | 538 | 690 | 735 | 1,759 |
| Cash EBITDA | 61,142 | 59,623 | 110,149 | 110,995 | 221,092 |
| EBITDA from discontinued operations | - | -882 | - | -2,236 | -5,621 |
| Cost of REOs sold, incl. impairment | - | 1,280 | - | 3,797 | 8,422 |
| Cash EBITDA, incl discontinued operations | 61,142 | 60,020 | 110,149 | 112,556 | 223,894 |
| Taxes paid | -2,800 | -3,120 | -11,593 | -6,023 | -11,616 |
| Change in working capital | -5,015 | 6,935 | -3,830 | 220 | -7,318 |
| Cash flow from operating activities before NPL | |||||
| investments | 53,327 | 63,835 | 94,726 | 106,752 | 204,959 |
Estimated remaining collections (ERC)
| For the quarter end | Year to date | ||||
|---|---|---|---|---|---|
| EUR thousand | 30 Jun 2024 30 Jun 2023 | 30 Jun 2024 30 Jun 2023 | Full year 2023 | ||
| Purchased loan portfolios | 1,283,894 | 1,241,373 | 1,283,894 | 1,241,373 | 1,265,327 |
| Estimated opex for future collections at time of | |||||
| acquisition | 378,176 | 368,757 | 378,176 | 368,757 | 369,720 |
| Estimated discounted gain | 1,001,968 | 952,936 | 1,001,968 | 952,936 | 985,368 |
| Estimated remaining collections (ERC) | 2,664,038 | 2,563,067 | 2,664,038 | 2,563,067 | 2,620,416 |
Net interest-bearing debt (NIBD)
| For the quarter end | Year to date | ||||
|---|---|---|---|---|---|
| EUR thousand | 30 Jun 2024 30 Jun 2023 | 30 Jun 2024 30 Jun 2023 | Full year 2023 | ||
| Non-current portion of interest-bearing debt from financial position |
975,805 | 783,206 | 975,805 | 783,206 | 939,104 |
| Current portion of interest-bearing debt from financial position |
- | 155,002 | - | 155,002 | - |
| Interest-bearing debt, discontinued operations | - | 6,271 | - | 6,271 | - |
| Total interest-bearing debt | 975,805 | 944,478 | 975,805 | 944,478 | 939,104 |
| Capitalized loan fees and other adjustments | 15,948 | 19,564 | 15,948 | 19,564 | 19,344 |
| Cash and cash equivalents from financial position | -35,167 | -34,217 | -35,167 | -34,217 | -31,826 |
| Cash and cash equivalents, discontinued operations | - | -2,397 | - | -2,397 | - |
| Net interest-bearing debt (NIBD) | 956,586 | 927,427 | 956,586 | 927,427 | 926,622 |
Return on equity to shareholders, annualized
| For the quarter end | Year to date | ||||
|---|---|---|---|---|---|
| EUR thousand | 30 Jun 2024 | 30 Jun 2023 | 30 Jun 2024 | 30 Jun 2023 | Full year 2023 |
| Net profit/(loss) after tax attributable to shareholders of the parent company | 4,233 | 10,284 | 4,908 | 17,473 | 30,830 |
| Average equity for the period related to shareholders of the parent company | 428,606 | 411,073 | 430,138 | 412,727 | 419,074 |
| Return on equity to shareholders, annualized | 4.0% | 10.0% | 2.3% | 8.5% | 7.4% |
Return on equity, annualized
| For the quarter end | Year to date | ||||
|---|---|---|---|---|---|
| EUR thousand | 30 Jun 2024 | 30 Jun 2023 | 30 Jun 2024 | 30 Jun 2023 | Full year 2023 |
| Net profit/(loss) after tax1 | 4,328 | 10,605 | 5,049 | 18,257 | 33,563 |
| Average total equity for the period | 419,032 | 403,679 | 420,532 | 405,984 | 411,350 |
| Return on equity, annualized | 4.2% | 10.5% | 2.4% | 9.1% | 8.2% |
1 Prior year figures are net profit/(loss) after tax from continuing operations
/ Glossary
Terms
| Active forecast | Forecast of estimated remaining collections on purchased loan portfolios |
|---|---|
| Board | Board of Directors |
| Cash EBITDA margin | Cash EBITDA as a percentage of gross revenue |
| Chair | Chair of the Board of Directors |
| Contribution margin (%) | Total operating expenses (excluding SG&A, IT and corporate cost) as a percentage of total income |
| Collection performance | Gross collections on purchased loan portfolios in relation to active forecast, including sale of repossessed assets in relation to book value |
| Cost-to-collect | Cost to collect is calculated as segment operating expenses plus a pro rata allocation of unallocated operating expenses and unallocated depreciation and amortization. The segment operating expense is used as allocation key for the unallocated costs |
| Equity ratio | Total equity as a percentage of total equity and liabilities |
| Forward flow agreement | Agreement for future acquisitions of loan portfolios at agreed prices and delivery |
| Gross IRR | The credit adjusted interest rate that makes the net present value of ERC equal to the book value of purchased loan portfolios, calculated using monthly cash flows over a 180-months period |
| Group | Axactor ASA and all its subsidiaries |
|---|---|
| NPL amortization rate | Portfolio amortization divided by collections on own portfolios for the NPL segment |
| NPL cost-to-collect ratio | NPL cost to collect divided by NPL total income excluding NPV of changes in collection forecasts and change in fair value of forward flow commitments |
| One off portfolio acquisition | Acquisition of a single loan portfolio |
| Opex | Total operating expenses |
| Recovery rate | Portion of the original debt repaid |
| Replacement capex | Amount of acquisitions of new loan portfolios needed to keep the book value of purchased loan portfolios constant compared to last period |
| Repossession | Taking possession of property due to default on payment of loans secured by property |
| Repossessed assets | Property repossessed from secured loan portfolios |
| SG&A, IT and corporate cost | Total operating expenses for overhead functions, such as HR, finance and legal etc |
| Solution rate | Accumulated paid principal amount for the period divided by accumulated collectable principal amount for the period. Usually expressed on a monthly basis |
Abbreviations
| 3PC | Third-party collection |
|---|---|
| AGM | Annual general meeting |
| APM | Alternative performance measures |
| ARM | Accounts receivable management |
| B2B | Business to business |
| B2C | Business to consumer |
| BoD | Board of Directors |
| BS | Consolidated statement of financial position (balance sheet) |
| CF | Consolidated statement of cash flows |
| CGU | Cash generating unit |
| CM | Contribution margin |
| D&A | Depreciation and amortization |
| Dopex | Direct operating expenses |
| EBIT | Operating profit/Earnings before interest and tax |
| EBITDA | Earnings before interest, tax, depreciation and amortization |
| ECL | Expected credit loss |
| EGM | Extraordinary general meeting |
| EPS | Earnings per share |
| ERC | Estimated remaining collections |
| ESG | Environmental, social and governance |
| ESOP | Employee stock ownership plan |
| FSA | The financial supervisory authority |
| FTE | Full time equivalent |
|---|---|
| GHG | Greenhouse gas emissions |
| HQ | Headquarters |
| IFRS | International financial reporting standards |
| LTV | Loan to value |
| NCI | Non-controlling interests |
| NPL | Non-performing loan |
| OB | Outstanding balance, the total amount Axactor can collect on claims under management, including outstanding principal, interest and fees |
| OCI | Consolidated statement of other comprehensive income |
| P&L | Consolidated statement of profit or loss |
| PCI | Purchased credit impaired |
| PPA | Purchase price allocations |
| REO | Real estate owned |
| ROE | Return on equity |
| SDG | Sustainable development goal |
| SG&A | Selling, general & administrative |
| SPV | Special purpose vehicle |
| VIU | Value in use |
| VPS | Verdipapirsentralen/Norwegian central securities depository |
| WACC | Weighted average cost of capital |
| WAEP | Weighted average exercise price |
Highlights Key figures Operations Financials APM Glossary
