Quarterly Report • Apr 28, 2022
Quarterly Report
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| For the quarter end / YTD | |||
|---|---|---|---|
| EUR million | 31 Mar 2022 | 31 Mar 2021 5) | Full year 2021 5) |
| Gross revenue | 77.2 | 74.9 | 304.6 |
| Total income | 56.2 | 51.0 | 155.3 |
| EBITDA | 27.0 | 19.7 | 40.3 |
| Net profit/(loss) after tax from continuing operations | 7.2 | (0.3) | (25.1) |
| Net profit/(loss) after tax from discontinued operations | (1.6) | (3.1) | (20.9) |
| Net profit/(loss) after tax | 5.7 | (3.4) | (46.0) |
| Return on equity, excluding non-controlling interests, annualized | 7.0% | (1.6%) | (8.5%) |
| Return on equity, continuing operations, annualized | 7.6% | (0.3%) | (6.5%) |
| Growth gross revenue, period to period | 3.2% | 10.7% | 6.9% |
| Cash and cash equivalents, end of period 1) | 39.5 | 47.1 | 38.2 |
| Cash EBITDA from continuing operations 2) | 48.1 | 43.6 | 189.8 |
| Cash EBITDA 3) | 53.4 | 52.1 | 223.8 |
| Gross revenue from NPL portfolios | 64.0 | 63.3 | 254.9 |
| Acquired NPL portfolios during the period | 79.6 | 16.1 | 114.0 |
| Book value of NPL, end of period | 1,160.4 | 1,123.6 | 1,095.8 |
| Estimated remaining collection (ERC), NPL | 2,258.7 | 2,158.8 | 2,140.5 |
| Interest bearing debt, end of period 4) | 888.1 | 865.9 | 838.3 |
| Number of employees (FTEs), end of period | 1,229 | 1,095 | 1,096 |
| Price per share, last day of period | 6.68 | 9.17 | 7.55 |
1) Total cash and cash equivalents from continuing and discontinued operations, excluding restricted cash. See APM table
2) Cash EBITDA from continuing operations is EBITDA adjusted for change in forward flow derivatives, portfolio amortizations and revaluations and calculated cost of share option program. See APM table
3) Cash EBITDA is total EBITDA (continuing and discontinued operations) adjusted for change in forward flow derivatives, portfolio amortizations and revaluations, REO cost of sales and impairments, and calculated cost of share option program. See APM table
4) Interest bearing debt is total interest bearing debt allocated to continuing and discontinued operations. See APM table.
5) For some figures, comparative information has been re-presented due to a discontinued operation, see note 12.
Collections continued the positive trend from December 2021 into the new year, securing a solid topline for the first quarter 2022 with NPL gross revenue of EUR 64.0m and 3PC income of EUR 13.2m. The operational efficiency has been constantly improved over the last two years, leading to an historically low cost-to-collect ratio for the quarter. The combination of strong pipelines and successful sales within both NPL and 3PC will further improve the economies of scale and support operational efficiency going forward.
The integration of Credit Recovery Service (CRS) in Italy started immediately after the formal transaction was closed in January. A post-merger integration team has been established with members from both CRS and the Italian country management team. The focus in the first quarter has been to integrate financial reporting, set the company structure and governance, as well as feeding the CRS data into Axactor's enterprise data warehouse. The integration is on track, and CRS has delivered according to the business case in the first quarter.
The market activity for both 3PC and NPL business has been high so far in 2022. Axactor signed several significant 3PC contracts during the first quarter, and the pipeline remains strong. The positive impacts for the 3PC segment will be visible already in the spring and summer of 2022. The deployment of EUR 79.6m in NPL portfolios is important to support growth and realize increased economies of scale. The investments were done at an average gross IRR of 20.0%, significantly higher than the average for the current portfolio stack and thus supporting increased future profitability.
To become the industry benchmark, continuous improvement is necessary. During the quarter, a project with an external consultancy company was conducted to analyze the methodology and efficiency of portfolio pricing, operational excellence, and administrative cost levels. The report confirmed the positive traits of Axactor's organization and operations. Its conclusions were well-aligned with internal assessments and ambitions to work even more data driven, focusing on predictive modeling and utilization of machine learning technology.
The total NPL collection performance ended at 100% for the quarter. Collections were in line with the revised curves put in place during the fourth quarter 2021, and Axactor expects collection performance to continue to fluctuate around 100% going forward.
Axactor currently has approximately 1.2 million active unsecured NPL claims, and a key operational goal is to improve the payment ratio
for these claims. A positive development was observed through the quarter, and 5.9% of all active unsecured claims in the NPL segment had received at least one payment during March. Out of all payments in the quarter, 67% were related to monthly installment plans. The high portion of payments coming from installment plans stipulates a steady cash flow also going forward.
A new dedicated team of specialists have developed and integrated an updated collection strategy for the secured NPL claims. The team currently manages six portfolios in Spain, with a total of 986 assets in collateral. Although unsecured claims remain Axactor's core business, the Group will continue to explore the secured NPL segment in Spain.
3PC volumes are increasing steadily in the important Southern European markets, and the segment total income grew 14% in the first quarter 2022 compared to the corresponding quarter last year. The acquisition of CRS contributes to this improvement, as well as a very solid organic development in Spain. Axactor is consistently winning a majority of the benchmark competitions participated in, and as a result the volumes from existing customers are expected to increase further over the coming quarters.
The usage of self-service portals grew 60% in the first quarter 2022 compared to the first quarter 2021. The increase is partly attributed to the introduction of the debtor portal in Finland. The increased usage resulted in a 20% increase in the number of digital payments through the portals.
The main use of the debtor portal can be attributed to the Nordic countries, while debtors in Spain and Italy make use of the QuickPay! functionality where no log-in is required. Further development of digital payment solutions and self-service functionality remains a key focus area for Axactor also going forward, providing easy access for debtors in a cost-efficient manner.
In January the organization was the victim of a phishing attempt related to the Office365 platform, where the attackers managed to exploit the human factor to gain access to an email account. Through solid cyber security routines, and close cooperation between internal IT resources and the external infrastructure provider, the phishing attempt was promptly mitigated. No data was lost or shared with the attackers, and no consequences were identified. The incident was routinely reported to the Norwegian Financial Supervisory Authority on behalf of the Norwegian organization and to the Norwegian Data Protection Authority on a group level. Both cases were closed without any further follow-up from the authorities.
The incident was educating for the organization, proving that continuous focus on awareness, business continuity and information security are key success factors to mitigate the adverse consequences of such events. It is safe to say that Axactor's investments in these areas were of paramount importance to limiting the consequences of the attack. Despite the limited consequences, improvements to the cyber security defense have been implemented as a response to the lessons learned.
The advanced analytics ramp-up progresses according to plan, and the team was expanded during the first quarter to support the ambitions in the area. The advanced analytics team assists all countries with machine learning initiatives. The aim is to further benefit from the successful models delivered to the operational units during the past two years through a higher level of automation. This will allow Axactor to improve collection strategies, resulting in increased efficiency in the collection processes. The goal is to escalate both the ambition level and number of resources within the advanced analytics team further throughout 2022.
Strong ethical values promoting fair treatment of its stakeholders, to protect reputation and company values, are essential to the company's success. These are principles upon which Axactor was founded. Axactor aims to contribute to building a viable financial system for people and the society, through own contributions and by engaging actively with its stakeholders. The increased focus on sustainable growth enables Axactor to not only achieve this, but also to take these advancements and translate them into a competitive advantage. Further details on Axactor's corporate governance and sustainability
performance may be found in the updated sustainability and corporate governance reports, published together with the 2021 annual report. The updated report show significant improvements in all areas through 2021. The 2021 reports are available at www.axactor.com.
Continued focus has been attributed to vendor management during the quarter, with new procedures for purchasing and vendor management under development. The new procedures are put in place to ensure that Axactor's vendors foster sustainable and responsible corporate behavior. They also allow for good cost control, which in turn improves value creation for investors and shareholders.
The internal auditor has investigated the payment processes in Norway and Finland, and the physical security in Norway, as well as followed up on the closure of previously identified deviations. Several customer audits have also been performed across the group. No significant deviations were discovered. Despite the fact that internal and external audits show that Axactor has an effective internal control system in place and continues to deliver high quality services to its customers, the company is constantly looking for areas in which to improve. Anti-money laundering (AML) has been a focus area during the first quarter and several improvements have been made, e.g. improved automation of transaction monitoring processes, regular review of the AML risk assessments, and updated know-your-customer (KYC) evaluations.
Compliance awareness e-learning trainings within data privacy and information security have been reviewed and prepared for distribution throughout 2022.
By the end of the first quarter, all Axactor employees were back in the office full-time after the Covid-19 pandemic.
An updated short-term incentive model was implemented during the first quarter, and targets for 2022 have been set for all employees. Among the incentive targets, all managers have been given specific targets focusing on topics related to environmental, social and governance related topics. Appraisal talks with focus on employee satisfaction, development, and performance management have been conducted for all employees.
Axactor focuses on building a strong corporate culture. Key areas of attention have been performance management, career planning, leadership development, and fostering a positive and social work environment. Axactor will continue to invest heavily in its employees going forward.
The REO segment is treated as discontinued operations effective from the fiscal year 2022, and Axactor continues with two business segments: NPL and 3PC. All comments and numbers in the following text refer to continuing operations unless explicitly stated otherwise. This also applies to figures for previous periods.
Total income for the first quarter ended at EUR 56.2 million, up 10% from the corresponding quarter last year. This was partially due to an increase in gross revenue from EUR 74.9 million in the first quarter 2021 to EUR 77.2 million in the first quarter 2022. The total income increase was also positively affected by a decline in the NPL portfolio amortization rate from 38% to 32%, helped by the NPL curve revision in the fourth quarter 2021.
The NPL total income was EUR 43.0 million for the quarter, up from EUR 39.5 million in the first quarter 2021. Segment gross revenue ended at EUR 64.0 million, representing a 1% increase compared to the first quarter last year. The effective NPL portfolio amortization rate was 32% (38%), while net NPL revaluations ended at EUR 0.1 million (0.5).
The 3PC segment is fully back in growth mode, with the positive volume development observed towards the end of 2021 continuing into 2022. Total income for the segment ended at EUR 13.2 million, up 14% from EUR 11.5 million last year. The acquisition of Italian debt collection service provider Credit Recovery Service was formally finalized in January 2022 and contributes positively to the growth in the quarter.
Total operating expenses before depreciation and amortization amounted to EUR 29.2 million for the first quarter, down from EUR 31.4 million in the corresponding quarter last year. Operating expenses as a percent of gross revenue was stable at 38% when excluding EUR 3.2 million of restructuring cost in 2021, despite a shift in business mix towards the lower margin 3PC segment. This comes as a result of the successful cost reduction program carried out in 2021.
Depreciation and amortization – excluding amortization of NPL portfolios – was EUR 2.1 million for the quarter, down from EUR 2.6 million in the corresponding quarter last year.
Total contribution from the business segments came in at EUR 37.5 million for the first quarter, compared to EUR 31.1 million in the corresponding quarter last year. Both segments saw improvements in their underlying contribution margins in the quarter. In addition, the contribution margin for the first quarter of 2021 included EUR 2.8 million of restructuring cost. The contribution margin over total income was 67%, compared to 61% in the first quarter 2021.
The NPL segment delivered a contribution margin of EUR 33.0 million in the first quarter 2022, up from EUR 30.5 million in the same quarter last year. The main driver for the improvement was the growth in total income. Margin on total income thus ended at 77%, same as for the first quarter 2021.
Contribution from 3PC was EUR 4.5 million, up from EUR 0.7 million in the first quarter 2021. The large improvement is mainly due to EUR 2.8 million in restructuring cost in the first quarter 2021, but also driven by positive volume development and the inclusion of Credit Recovery Service. The corresponding margin on segment income grew to 34% for the quarter (6%).
EBITDA for the quarter ended at EUR 27.0 million, up from EUR 19.7 million in the first quarter last year. The EBITDA margin was 48%, up from 39% in the same quarter last year.
The difference between contribution margin and EBITDA comprises unallocated SG&A and IT costs, which amounted to EUR 10.5 million for the quarter, down from EUR 11.5 million in the first quarter 2021. The reduction is driven by increased efficiency following the cost reduction program implemented in 2021, as well as EUR 0.4 million in restructuring cost in the first quarter 2021.
Cash EBITDA came in at EUR 48.1 million for the first quarter 2022, compared to EUR 43.6 million for the first quarter 2021. The improvement was driven by increased NPL collection performance, higher 3PC income and improved cost efficiency. The first quarter 2021 was also impacted by EUR 3.2 million of restructuring costs. Adding the contribution from discontinued operations, Cash EBITDA was EUR 53.4 million (52.1).
Operating profit (EBIT) was EUR 24.9 million for the first quarter 2022, up from EUR 17.1 million in the first quarter last year.
Total net financial items for the quarter were negative EUR 13.1 million, compared to negative EUR 15.6 million in the first quarter last year. Total interest expense on borrowings for the quarter was EUR 13.2 million (12.3). Axactor took measures to reduce its net FX exposure through 2021, and net FX impact for the first quarter 2022 was EUR 0.2 million compared to negative EUR 3.2 million last year.
Discontinued operations is comprised of the REO segment. Total income for the segment ended at EUR 6.3 million for the quarter (10.0), while EBITDA ended at -1.0 million (-1.9). The net profit was negative EUR 1.6 million, compared to negative EUR 3.1 million in the first quarter 2021.
Earnings before tax ended at EUR 11.8 million for the first quarter (1.5), while net profit ended at EUR 7.2 million (-0.3). The effective tax rate was thus 39% for the quarter (119%). Adding discontinued operations, the net profit was EUR 5.7 million, up from EUR -3.4 million in the first quarter 2021.
The net profit including discontinued operations for the first quarter 2022 ended at EUR 6.6 million for shareholders of the parent company (-1.4), and at EUR -1.0 million for non-controlling interests (-2.0). The resulting earnings per share was thus EUR 0.022 both on a reported basis (-0.005) and fully diluted (-0.005), based on the average number of shares outstanding in each period.
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 -27.7 million (38.7) for the quarter. The decrease compared to last year is mainly related to higher NPL investments. The amount paid for NPL portfolios increased from EUR 22.6 million in the first quarter 2021 to EUR 82.8 million in the first quarter 2022. 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.
Excluding investments in NPL portfolios, cash flow from operations for the quarter amounted to EUR 55.2 million, down from EUR 61.2 million in the corresponding period last year. Net working capital decreased EUR 2.9 million in the quarter, compared to a decrease of EUR 9.8 million in the corresponding quarter last year. Taxes paid increased
from EUR 0.3 million in the first quarter 2021, to EUR 1.2 million in the first quarter 2022. The increased working capital and taxes paid were partly offset by the increase in Cash EBITDA.
Total net cash flow from investments, not including investments in NPL portfolios, was EUR -4.3 million for the first quarter (-1.1), including EUR -3.1 million related to the acquisition of Credit Recovery Service.
Total cash flow from financing activities was EUR 33.8 million (-39.2) in the first quarter, with a net drawdown on credit facilities of EUR 47.2 million (net repayment of 58.8).
Total net cash flow was EUR 1.8 million for the quarter (-1.6), leaving total cash and cash equivalents at EUR 46.0 million at the end of the first quarter (50.1). This includes EUR 6.5 million in restricted cash (2.9).
Total equity for the Group was EUR 394.8 million at the end of the first quarter 2022 (430.1), including non-controlling interests of EUR -1.1 million (17.4). The main reason for the reduced equity compared to last year is the losses recognized during 2021.
The resulting equity ratio at the end of the first quarter was 29% (32%), same as at the end of 2021.
Including both continuing and discontinued operations, the annualized return on equity excluding non-controlling interests for the first quarter 2022 was 7.0% (-1.5%), while annualized return on equity for continuing operations ended at 7.6% (-0.3%).
Axactor targets improved return on equity over time, based on increasing economies of scale, changes in the business mix, reduced funding cost and the gradual blending in of lower NPL portfolio prices. The company sees growth opportunities in the capital light 3PC segment and increasing 3PC and NPL synergies. The company also expects a gradual lowering of the effective tax rate towards 25%, which will further improve the return on equity.
Axactor invested EUR 79.6 million (16.1) in NPL portfolios during the first quarter of 2022. Total estimated NPL investment commitments for the remainder of 2022 amounts to EUR 78.1 million. A total of
EUR 157.7 million in NPL investments is thus already secured for 2022, compared to the modest investment level of EUR 114.0 million in 2021.
Axactor have two outstanding bond loans, both listed on Oslo Børs with respective tickers ACR02 and ACR03. ACR02 has a nominal value of EUR 200 million and matures in January 2024. ACR03 has a nominal value of EUR 300 million and matures in September 2026.
The revolving credit facility from DNB and Nordea has a total size of EUR 545 million, with an additional EUR 75 million accordion option. At the end of the first quarter 2022 the drawn amount on the revolving credit facility was EUR 399.7 million.
Total interest-bearing debt including capitalized loan fees and accrued interest amounted to EUR 888.1 million at the end of the first quarter (865.9), including EUR 27.3 million allocated to discontinued operations.
Axactor are in compliance with all loan covenants as per the end of the first quarter 2022.
3PC volumes have been improving gradually through the end of 2021 and into 2022. Banks and financial institutions are again putting out new tenders on the market after a period of low new sales during the Covid-19 pandemic. Taking the 2021 cost reduction program into account, Axactor is confident that the 3PC segment will see both organic growth and margin expansion in 2022. In addition, the inclusion of Credit Recovery Service will continue to contribute positively to the income growth.
The market activity for NPL acquisitions is high, and Axactor expect it to remain high through 2022. With EUR 79.6 million invested in the first quarter, and forward flow commitments of EUR 78.1 million for the remainder of 2022, Axactor has already secured a healthy book value growth for the next quarters. The EUR 157.7 million of investments and committed investments have an average gross IRR of 20.9%. This is significantly above the 16.5% average gross IRR for the current NPL portfolios, and will thus contribute positively to the future profitability for Axactor. The stronger gross IRR level for new acquisitions is expected to continue, and Axactor expects total investments for 2022 to be EUR 200-250 million.
The first quarter of 2022 has seen increasing geopolitical risk in Europe with the ongoing conflict in Ukraine. Although Axactor's operations are not directly impacted by the conflict, the executive management and Board closely monitors the situation and potential indirect business impacts, and maintains the business continuity plans.
| EUR thousand | Note | 31 Mar 2022 | 31 Mar 2021 1) | Full year 2021 1) |
|---|---|---|---|---|
| Continuing operations | ||||
| Interest income from purchased loan portfolios | 5, 6 | 42,820 | 41,898 | 168,421 |
| Net gain/(loss) purchased loan portfolios | 5, 6 | 155 | (2,036) | (62,013) |
| Other operating revenue | 13,212 | 11,174 | 48,858 | |
| Other income | 14 | - | 15 | |
| Total income | 3, 5 | 56,202 | 51,036 | 155,280 |
| Personnel expenses | (15,702) | (18,867) | (61,313) | |
| Operating expenses | (13,467) | (12,496) | (53,645) | |
| Total operating expenses | (29,170) | (31,363) | (114,958) | |
| EBITDA | 27,033 | 19,673 | 40,322 | |
| Amortization and depreciation | (2,113) | (2,578) | (9,613) | |
| Operating profit | 24,919 | 17,095 | 30,709 | |
| Financial revenue | 4 | 346 | 904 | 3,033 |
| Financial expenses | 4 | (13,474) | (16,542) | (53,504) |
| Net financial items | (13,128) | (15,638) | (50,471) | |
| Profit/(loss) before tax from continuing operations | 11,791 | 1,457 | (19,763) | |
| Tax (expense) | (4,567) | (1,737) | (5,323) | |
| Net profit/(loss) after tax from continuing operations | 7,224 | (280) | (25,085) | |
| Discontinued operations | ||||
| Net profit/(loss) after tax from discontinued operations | 12 | (1,554) | (3,114) | (20,906) |
| Net profit/(loss) after tax | 5,670 | (3,394) | (45,992) | |
| Attributable to: Non-conrolling interests: |
||||
| Net profit/(loss) after tax from discontinued operations | (960) | (1,959) | (13,194) | |
| Net profit/(loss) after tax | (960) | (1,959) | (13,194) | |
| Shareholdes of the parent company: | ||||
| Net profit/(loss) after tax from continuing operations | 7,224 | (280) | (25,085) | |
| Net profit/(loss) after tax from discontinued operations | (594) | (1,154) | (7,712) | |
| Net profit/(loss) after tax | 6,631 | (1,434) | (32,797) | |
| Earnings per share: | ||||
| From continuing operations, basic and diluted: | 0.024 | (0.001) | (0.085) | |
| From continuing and discontinued operations, basic and diluted: | 0.022 | (0.005) | (0.112) |
1) Comparative information has been re-presented due to a discontinued operation, see note 12.
| For the quarter end / YTD | |||
|---|---|---|---|
| EUR thousand | 31 Mar 2022 | 31 Mar 2021 | Full year 2021 |
| Net profit/(loss) after tax | 5,670 | (3,394) | (45,992) |
| Items that will not be classified subsequently to profit and loss | |||
| Remeasurement of pension plans | - | - | (4) |
| Net gain/(loss) on equity instruments designated at fair value through OCI | - | - | (16) |
| Items that may be classified subsequently to profit and loss | |||
| Foreign currency translation differences - foreign operations | 5,904 | 9,862 | 8,924 |
| Net gain/(loss) on cash flow hedges | 3,051 | - | (230) |
| Other comprehensive income/(loss) after tax | 8,955 | 9,862 | 8,675 |
| Total comprehensive income for the period | 14,625 | 6,468 | (37,317) |
| Attributable to: | |||
| Non-controlling interests | (960) | (1,959) | (13,194) |
| Shareholders of the parent company | 15,585 | 8,428 | (24,123) |
| EUR thousand | Note | 31 Mar 2022 | 31 Mar 2021 | Full year 2021 |
|---|---|---|---|---|
| Assets | ||||
| Intangible non-current assets | ||||
| Intangible assets | 17,512 | 19,450 | 17,824 | |
| Goodwill | 63,058 | 55,874 | 55,960 | |
| Deferred tax assets | 12,811 | 7,760 | 13,700 | |
| Tangible non-current assets | ||||
| Property, plant and equipment | 2,440 | 2,328 | 2,290 | |
| Right of use assets | 8 | 11,561 | 4,477 | 10,768 |
| Financial non-current assets | ||||
| Purchased debt portfolios | 6 | 1,160,374 | 1,123,596 | 1,095,789 |
| Other non-current receivables | 3,938 | 467 | 338 | |
| Other non-current investments | 28 | 196 | 28 | |
| Total non-current assets | 1,271,722 | 1,214,148 | 1,196,698 | |
| Current assets | ||||
| Stock of secured assets | - | 68,463 | 29,310 | |
| Repossessed assets | 304 | - | - | |
| Accounts receivable | 5,293 | 7,229 | 7,060 | |
| Other current assets | 12,979 | 11,531 | 16,154 | |
| Restricted cash | 6,497 | 2,921 | 5,798 | |
| Cash and cash equivalents | 35,459 | 47,131 | 38,155 | |
| Total current assets | 60,533 | 137,276 | 96,476 | |
| Assets classified as held for sale | 12 | 28,875 | - | - |
| Total assets | 1,361,130 | 1,351,424 | 1,293,175 |
| EUR thousand | Note | 31 Mar 2022 | 31 Mar 2021 | Full year 2021 |
|---|---|---|---|---|
| Equity and liabilities | ||||
| Share capital | 158,150 | 158,150 | 158,150 | |
| Other paid-in equity | 269,953 | 269,839 | 269,919 | |
| Retained earnings | (33,845) | (9,108) | (40,475) | |
| Translation reserve | (1,170) | (6,137) | (7,074) | |
| Other reserves | 2,805 | - | (245) | |
| Non-controlling interests | (1,084) | 17,361 | 976 | |
| Total equity | 394,809 | 430,105 | 381,249 | |
| Non-current liabilities | ||||
| Interest bearing debt | 7 | 857,140 | 714,283 | 834,411 |
| Deferred tax liabilities | 11,351 | 6,566 | 6,144 | |
| Lease liabilities | 8 | 9,471 | 2,390 | 8,866 |
| Other non-current liabilities | 2,133 | 1,606 | 1,994 | |
| Total non-current liabilities | 880,095 | 724,845 | 851,415 | |
| Current liabilities | ||||
| Accounts payable | 9,990 | 6,832 | 7,282 | |
| Current portion of interest bearing debt | 7 | 3,737 | 151,577 | 3,845 |
| Taxes payable | 17,691 | 13,275 | 20,259 | |
| Lease liabilities | 8 | 2,342 | 2,342 | 2,185 |
| Other current liabilities | 9 | 23,591 | 22,449 | 26,941 |
| Total current liabilities | 57,351 | 196,474 | 60,511 | |
| Liabilities directly associated with assets classified as held for sale | 12 | 28,875 | ||
| Total liabilities | 966,321 | 921,319 | 911,925 | |
| Total equity and liabilities | 1,361,130 | 1,351,424 | 1,293,175 | |
| EUR thousand | Note | 31 Mar 2022 | 31 Mar 2021 | Full year 2021 |
|---|---|---|---|---|
| Operating activities | ||||
| Profit/(loss) before tax from continued operations | 11,791 | 1,457 | (19,763) | |
| Profit/(loss) before tax from discontinued operations | 12 | (1,554) | (3,141) | (20,933) |
| Taxes paid | (1,038) | (297) | (3,261) | |
| Adjustments for: | ||||
| - Finance income and expenses | 4 | 13,726 | 16,833 | 54,775 |
| - Portfolio amortization and revaluation | 21,041 | 23,472 | 148,542 | |
| - Cost of secured assets sold, incl. impairment | 12 | 6,285 | 10,386 | 50,515 |
| - Depreciation and amortization | 2,113 | 2,594 | 9,654 | |
| - Calculated cost of employee share options | 34 | 100 | 180 | |
| Change in working capital | 2,920 | 9,794 | 4,991 | |
| Cash flow from operating activities before NPL and REO investments |
55,157 | 61,198 | 224,700 | |
| Purchase of debt portfolios | 6 | (82,826) | (22,623) | (115,402) |
| Sale of debt portfolio | 6 | - | 150 | 450 |
| Purchases related to REO/repossessed assets | (49) | (44) | (193) | |
| Net cash flow from operating activities | (27,718) | 38,681 | 109,555 | |
| Investing activities | ||||
| Investment in subsidiaries, net of cash aquired | 11 | (3,085) | - | - |
| Purchase of intangible and tangible assets | (1,213) | (1,114) | (4,718) | |
| Interest received | 14 | - | 5 | |
| Net cash flow from investing activities | (4,285) | (1,114) | (4,712) | |
| Financing activities | ||||
| Proceeds from borrowings | 7 | 167,632 | 26,050 | 542,496 |
| Repayment of debt | 7 | (120,412) | (84,899) | (628,681) |
| Interest paid | (11,586) | (7,796) | (42,050) | |
| Loan fees paid | 7 | (81) | (19,758) | (24,033) |
| Lease payments | 8 | (683) | (645) | (2,812) |
| New share issues | - | 50,792 | 50,792 | |
| Repayments to non-controlling interests | (1,100) | (1,475) | (6,625) | |
| Cost related to share issues | - | (1,460) | (1,460) | |
| Net cash flow from financing activities | 33,770 | (39,192) | (112,373) | |
| Net change in cash and cash equivalents | 1,766 | (1,624) | (7,531) | |
| Cash and cash equivalents at the beginning of period | 43,953 | 50,725 | 50,725 | |
| Currency translation | 258 | 951 | 759 | |
| Cash and cash equivalents at end of period, incl. restricted funds | 45,978 | 50,051 | 43,953 |
| Equity related to the shareholders of the parent company | ||||||||
|---|---|---|---|---|---|---|---|---|
| Restricted | Non-restricted | |||||||
| EUR thousand | Share Capital |
Other paid in equity |
Translation reserve |
Other reserves |
Retained earnings |
Total | Non controlling interest |
Total Equity |
| Closing balance at 31 Dec 2020 | 97,040 | 236,562 | (15,999) | (16,036) | 301,566 | 74,113 | 375,680 | |
| Result of the period | (1,434) | (1,434) | (1,959) | (3,394) | ||||
| Remeasurement of pension plans | - | - | - | |||||
| Foreign currency translation differences - foreign operations | 9,862 | 9,862 | 9,862 | |||||
| Total comprehensive income for the period | - | - | 9,862 | (1,434) | 8,428 | (1,959) | 6,468 | |
| Repayments to non-controlling interests | - | (1,475) | (1,475) | |||||
| Acquisition of remaining 50% of Axactor Invest 1 | 7,319 | 8,363 | 15,682 | (53,317) | (37,635) | |||
| New share issues | 61,110 | 27,318 | 88,427 | 88,427 | ||||
| Cost related to share issues | (1,460) | (1,460) | (1,460) | |||||
| Share-based payment | 100 | 100 | 100 | |||||
| Closing balance at 31 Mar 2021 | 158,150 | 269,839 | (6,137) | (9,108) | 412,743 | 17,361 | 430,105 | |
| Result of the period | - | - | - | - | (31,363) | (31,363) | (11,235) | (42,598) |
| Other comprehensive income of the period | - | - | (938) | (245) | (4) | (1,187) | - | (1,187) |
| Total comprehensive income for the period | - | - | (938) | (245) | (31,367) | (32,550) | (11,235) | (43,785) |
| Repayments to non-controlling interests | - | (5,150) | (5,150) | |||||
| Share-based payment | 80 | 80 | 80 | |||||
| Closing balance at 31 Dec 2021 | 158,150 | 269,919 | (7,074) | (245) | (40,475) | 380,273 | 976 | 381,249 |
| Result of the period | 6,631 | 6,631 | (960) | 5,670 | ||||
| Other comprehensive income of the period | 5,904 | 3,051 | 8,955 | 8,955 | ||||
| Total comprehensive income for the period | - | - | 5,904 | 3,051 | 6,631 | 15,585 | (960) | 14,625 |
| Repayments to non-controlling interests | - | (1,100) | (1,100) | |||||
| Share-based payment | 34 | 34 | 34 | |||||
| Closing balance at 31 Mar 2022 | 158,150 | 269,953 | (1,170) | 2,805 | (33,845) | 395,893 | (1,084) | 394,809 |
The Parent Company Axactor SE (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 principles applied correspond to those described in the Annual Report for the Financial Year 2021. 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 for the Financial Year 2021.
In preparing these interim financial statements, management has made judgements and estimates 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. Critical accounting estimates and judgements in terms of accounting policies are more comprehensively discussed in the Group Annual Report for the Financial Year 2021, which is available on Axactor's website: www.axactor.com.
The significant judgements made by management applying the Group's accounting policies and the key resources 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.
As communicated in a press release on 13 December 2021, Axactor SE has received a conclusion from the Norwegian Financial Supervisory Authority (FSA) in accordance with the preliminary conclusion as stated in the press release of 2 September 2021. The FSA requires that the company expands its valuation model for portfolios of non-performing loans (NPL) with more input variables capturing current and future macroeconomic conditions and use of scenarios with effect from the reporting of the annual accounts for the financial year 2022.
The estimation of future cash flow is affected by several factors, including general macro factors, market specific factors, portfolio specific factors and internal factors. Axactor is already considering relevant macro factors and market specific factors when estimating future cash flow but not as direct input generating output in the forecast models. The company takes notice of the conclusion from the FSA and has started the work on expanding the portfolio valuation model to better reflect the macro factors and scenarios as required. The company is working on analyzing macroeconomic variables and other variables to identify any variance explained by macroeconomic factors. The work also includes implementing a scenario approach based on the most relevant external and internal drivers for cash collection.
The company has implemented requirements for documentation of the relevant macroeconomic assumptions in portfolio acquisition processes. The company considers interest rate, unemployment, GDP growth, housing price growth, inflation, salary growth and regulation changes to be the most relevant macroeconomic factors. The company will have the expanded model implemented with effect for the annual accounts for 2022.
Axactor's regular business activities entail exposure to various types of risk. The Group manages such risks proactively and the Board of Directors regularly analyses its operations and potential risk factors and takes steps to reduce risk exposure. Axactor gives strong emphasis to quality assurance and has quality systems implemented, or under implementation in line with the requirements applicable to its business operations.
The risks include but are not limited to credit risk, risk inherent in purchased debt, interest rate risk, regulatory risk, liquidity risk and financing risk. The Group tightly monitors its different risks in all countries where Axactor companies are present. The credit management is negatively affected by a weakened economy. Risks associated with changes in economic conditions are monitored through on-going dialogue with each country management team and through regular follow up on macro-economic development in each country. For a more elaborate discussion on the aforementioned risks one is referred to the Group's Annual Report for the Financial Year 2021, which is available on Axactor's website: www.axactor.com (Note 3 of the Group financial statement).
The first quarter of 2022 has seen increasing geopolitical risk in Europe with the ongoing conflict in Ukraine. Although Axactor's operations are not directly impacted by the conflict, the executive management and the Board of Directors closely monitor the situation and potential indirect business impacts, and maintain the business continuity plans.
The Group holds interest rate caps, a derivative financial instrument with the purpose of reducing the Group's interest rate exposure. At quarter end the fair value of the interest rate hedging derivatives was positive EUR 3.6 million. The Group holds two contracts at quarter end hedging a total of EUR 200 million in interest rate risk on bond loans. The Group started with hedge accounting at the end of 2021. The Group's strategy is to hedge between 50% and 70% of interest bearing debt with a duration of three to five years. At the end of the first quarter of 2022 the hedging ratio was 23%. For further information see note 19 in the annual report for 2021.
The Group monitors its risk of a shortage of funds using cash flow forecasts regularly. The Group had cash and cash equivalents incl. restricted funds of EUR 46.0 million at 31 March 2022 (31 March 2021: EUR 50.1 million), as reconciled in the consolidated statement of cash flows.
The following table details the Group's remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. For forward flow NPL agreements 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. To the extent that interest flows are floating rate, the undiscounted amount is derived from the interest rate curves at the end of the reporting period. The contractual maturity is based on the earliest date on which the Group may be required to pay.
The loan repayment amounts presented are subject to change dependent on a change in variable interest rates.
| EUR thousand | Q2-22 | Q2-22 | Q4-22 | Q1-23 | 1-2 years | 2-4 years | 4+ years | Total |
|---|---|---|---|---|---|---|---|---|
| Forward flow NPL agreements, non-cancellable 1) 2) | 26,705 | 18,151 | 21,069 | 18,553 | 18,073 | - | - | 102,551 |
| Forward flow NPL agreements, cancellable 1) 2) 3) | - | 6,415 | 5,788 | 5,788 | 41,140 | 10,200 | - | 69,332 |
| Revolving credit facility DNB/Nordea | 3,139 | 3,139 | 3,139 | 3,139 | 371,374 | - | 383,931 | |
| Bond (ISIN: NO0010914666) | 3,500 | 3,539 | 3,578 | 3,578 | 214,194 | - | 228,388 | |
| Bond (ISIN: NO0011093718) | 4,102 | 4,102 | 4,057 | 4,013 | 16,273 | 32,590 | 308,203 | 373,339 |
| Other non-current liabilities | - | - | - | - | - | - | 2,133 | 2,133 |
| Accounts payable | 9,990 | - | - | - | - | - | - | 9,990 |
| Other current liabilities | 19,827 | 3,764 | - | - | - | - | - | 23,591 |
| Total allocated to continuing operations | 67,264 | 39,110 | 37,631 | 35,070 | 661,054 | 42,790 | 310,336 | 1,193,255 |
| Total allocated to discontinued operations | 1,621 | - | - | - | 27,254 | - | - | 28,875 |
| Total | 68,884 | 39,110 | 37,631 | 35,070 | 688,307 | 42,790 | 310,336 | 1,222,130 |
1) Forward flow NPL agreements split by country:
2) Expected cash flows. Cash flows are limited to EUR 282.7 million by contracted capex limits.
3) Cancellable with three months notice
Norway 53 %
Germany 41 % Finland 5 %
The ERC represents the estimated gross collection on the NPL portfolios. The yield represents the interest income from purchased loan portfolios and can be reconciled as the ERC less amortization. The ERC, amortization and yield can be broken down per year as follows (year 1 means the first 12 months from the reporting date):
| EUR thousand | Estimated remaining collection (ERC), amortization and yield next four quarters | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Year | Q2 2022 | Q3 2022 | Q4 2022 | Q1 2023 | Year 1 | ||||||||
| ERC | 74,745 | 68,964 | 72,483 | 74,710 | 290,903 | ||||||||
| Amortization | 29,766 | 25,017 | 29,530 | 32,974 | 117,287 | ||||||||
| Yield | 44,979 | 43,947 | 42,953 | 41,737 | 173,616 | ||||||||
| EUR thousand |
Estimated remaining collection (ERC), amortization and yield per year | ||||||||||||
| Year | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | Total |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ERC | 290,903 | 278,755 | 246,589 | 215,891 188,085 164,488 | 147,115 | 132,351 | 119,229 | 106,801 | 96,539 | 86,867 | 72,420 | 60,725 | 51,928 | 2,258,684 | ||
| Amortization | 117,287 | 125,716 | 114,241 | 101,165 | 88,713 | 78,120 | 72,015 | 67,699 | 64,412 | 61,324 | 60,046 | 59,210 | 53,262 | 49,217 | 47,945 | 1,160,374 |
| Yield | 173,616 | 153,039 | 132,347 | 114,725 | 99,371 | 86,368 | 75,100 | 64,652 | 54,817 | 45,476 | 36,494 | 27,657 | 19,158 | 11,508 | 3,983 | 1,098,310 |
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)
Axactor's operations are managed through these two operating segments.
The NPL segment invests in portfolios of non-performing loans. Subsequently, the outstanding debt is 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 in order to collect the non-performing loans, and typically receive a commission for these services. Other services provided include, amongst other, 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 typically 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 total income 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 without allocation of management fee, central administration costs, other gains, and losses as well as finance costs. The measurement basis of the performance of the segment is the segment's contribution margin.
The Group has classified the operating segment real estate owned (REO) as a discontinued operation in 2022. The Group has not disclosed the results of discontinued operations within the segment disclosures under IFRS 8, neither for the current nor previous periods presented.
| EUR thousand | NPL | 3PC | Eliminations/ Not allocated |
Total |
|---|---|---|---|---|
| Collection on own portfolios | 64,017 | - | - | 64,017 |
| Portfolio amortization and revaluation | (21,041) | - | - | (21,041) |
| Other operating income: | ||||
| -Change in forward flow derivatives | - | - | - | - |
| -Other operating revenue and other income | - | 13,212 | 14 | 13,227 |
| Total income | 42,976 | 13,212 | 14 | 56,202 |
| Direct operating expenses | (10,024) | (8,668) | - | (18,692) |
| Contribution margin | 32,952 | 4,544 | 14 | 37,510 |
| SG&A, IT and corporate cost | (10,477) | (10,477) | ||
| EBITDA | 27,033 | |||
| Amortization and depreciation | (2,113) | (2,113) | ||
| Operating result | 24,919 | |||
| Total operating expenses | (10,024) | (8,668) | (10,477) | (29,170) |
| Contribution margin (%) | 76.7% | 34.4% | na | 66.7% |
| EBITDA margin (%) | 48.1% | |||
| Opex ex SG&A, IT and corp.cost / Gross revenue | 15.7% | 65.6% | na | 24.2% |
| SG&A, IT and corporate cost / Gross revenue | 13.6% |
| EUR thousand | NPL | 3PC | Eliminations/ Not allocated |
Total |
|---|---|---|---|---|
| Collection on own portfolios | 63,334 | - | - | 63,334 |
| Portfolio amortization and revaluation | (23,472) | - | - | (23,472) |
| Other operating income: | ||||
| -Change in forward flow derivatives | (375) | - | - | (375) |
| -Other operating revenue and other income | - | 11,549 | - | 11,549 |
| Total income | 39,487 | 11,549 | - | 51,036 |
| Direct operating expenses | (9,026) | (10,873) | - | (19,899) |
| Contribution margin | 30,461 | 676 | - | (31,137) |
| SG&A, IT and corporate cost | (11,464) | (11,464) | ||
| EBITDA | 19,673 | |||
| Amortization and depreciation | (2,578) | (2,578) | ||
| Operating result | 17,095 | |||
| Total operating expenses | (9,026) | (10,873) | (11,464) | (31,363) |
| Contribution margin (%) | 77.1% | 5.9% | na | 61.0% |
| EBITDA margin (%) | 38.5% | |||
| Opex ex SG&A, IT and corp.cost / Gross revenue | 14.3% | 94.1% | na | 26.6% |
| SG&A, IT and corporate cost / Gross revenue | 15.4% |
| EUR thousand | NPL | 3PC | Eliminations/ Not allocated |
Total |
|---|---|---|---|---|
| Collection on own portfolios | 254,949 | - | - | 254,949 |
| Portfolio amortization and revaluation | (148,542) | - | - | (148,542) |
| Other operating income: | ||||
| -Change in forward flow derivatives | (782) | - | - | (782) |
| -Other operating revenue and other income | - | 49,640 | 15 | 49,655 |
| Total income | 105,625 | 49,640 | 15 | 155,280 |
| Direct operating expenses | (36,168) | (34,235) | - | (70,404) |
| Contribution margin | 69,456 | 15,405 | 15 | 84,876 |
| SG&A, IT and corporate cost | (44 554) | (44,554) | ||
| EBITDA | 40,322 | |||
| Amortization and depreciation | (9,613) | (9,613) | ||
| Operating result | 30,709 | |||
| Total operating expenses | (36,168) | (34,235) | (44,554) | (114,958) |
| Contribution margin (%) | 65.8% | 31.0% | na | 54.7% |
| EBITDA margin (%) | 26.0% | |||
| Opex ex SG&A, IT and corp.cost / Gross revenue | 14.2% | 69.0% | na | 23.1% |
| SG&A, IT and corporate cost / Gross revenue | 14.7% |
| For the quarter end / YTD | ||||
|---|---|---|---|---|
| EUR thousand | 31 Mar 2022 | 31 Mar 2021 | Full year 2021 | |
| Financial revenue | ||||
| Interest on bank deposits | 14 | - | 5 | |
| Exchange gains realized | 71 | 882 | 2,982 | |
| Net unrealized exchange gain | 248 | - | - | |
| Other financial income | 13 | 22 | 46 | |
| Total financial revenue allocated to continuing operations | 346 | 904 | 3,033 | |
| Total financial revenue allocated to discontinued operations | - | - | - | |
| Total financial revenue | 346 | 904 | 3,033 | |
| Financial expenses | ||||
| Interest expense on borrowings | (13,231) | (12,336) | (48,591) | |
| Exchange losses realized | (74) | (138) | (3,161) | |
| Net unrealized exchange loss | - | (3,985) | (1,326) | |
| Other financial expenses 1) | (170) | (83) | (427) | |
| Total financial expenses allocated to continuing operations | (13,574) | (16,542) | (53,504) | |
| Total financial expenses allocated to discontinued operations | (598) | (1,195) | (4,304) | |
| Total financial expenses | (14,074) | (17,737) | (57,810) | |
| Net financial items allocated to continuing operations | (13,129) | (15,638) | (50,472) | |
| Net financial items allocated to discontinued operations | (598) | (1,195) | (4,304) | |
| Total net financial items | (13,726) | (16,833) | (54,775) |
1) Includes interest expense from negative bank accounts in group multicurrency cash pool and negative interest on bank deposits.
The Group operates in seven European countries: Finland, Germany, Italy, Luxembourg, Norway, Spain, and Sweden. Apart from in Luxembourg, Axactor delivers credit management services in all countries. The Group's revenue from continuing operations from external customers by location of operations are detailed below.
| Total income | For the quarter end / YTD | ||
|---|---|---|---|
| EUR thousand | 31 Mar 2022 | 31 Mar 2021 | Full year 2021 |
| Finland | 3,850 | 3,934 | 10,113 |
| Germany | 7,871 | 8,561 | 30,331 |
| Italy | 6,354 | 4,839 | 17,387 |
| Norway | 12,023 | 9,734 | 35,271 |
| Spain | 18,701 | 15,375 | 55,991 |
| Sweden | 7,404 | 8,592 | 6,187 |
| Total income from continuing operations | 56,202 | 51,036 | 155,280 |
| Total income from discontinued operations | 6,272 | 9,996 | 39,846 |
| Total income | 62,474 | 61,031 | 195,127 |
| EUR thousand | 31 Mar 2022 | 31 Mar 2021 | Full year 2021 |
|---|---|---|---|
| Finland | 3,911 | 4,411 | 4,052 |
| Germany | 15,727 | 13,262 | 15,884 |
| Italy | 16,135 | 9,526 | 9,184 |
| Norway | 36,585 | 33,673 | 36,088 |
| Spain | 18,190 | 19,138 | 17,519 |
| Sweden | 4,023 | 2,118 | 4,115 |
| Total assets | 94,571 | 82,129 | 86,843 |
1) Non-current assets consist of intangible assets, goodwill, property, plant and equipment and right of use assets. There are no non-current assets related to discontinued operations.
Portfolio revenue is recognized as 'Interest income from purchased loan portfolios' and 'Net gain/(loss) purchased loan portfolios' in the consolidated statement of profit or loss and can be split further down as follows:
| EUR thousand | Yield 1) | CU1 2) | CU2 3) | CU2 tail 4) | For the quarter end / YTD 31 Mar 2022 |
|---|---|---|---|---|---|
| Finland | 3,590 | 172 | (56) | - | 3,706 |
| Germany | 6,332 | (708) | 163 | 126 | 5,914 |
| Italy | 4,142 | 151 | 10 | 35 | 4,337 |
| Norway | 9,220 | 929 | (168) | 329 | 10,311 |
| Spain | 12,360 | (352) | (490) | 277 | 11,795 |
| Sweden | 7,177 | (159) | (632) | 526 | 6,912 |
| Total | 42,820 | 34 | (1,172) | 1,294 | 42,976 |
| For the quarter end | |||||
|---|---|---|---|---|---|
| EUR thousand | Yield 1) | CU1 2) | CU2 3) | CU2 tail 4) | / YTD 31 Mar 2021 |
| Finland | 3,747 | (165) | 96 | - | 3,678 |
| Germany | 5,305 | 406 | - | 114 | 5,826 |
| Italy | 4,161 | 119 | 11 | 30 | 4,322 |
| Norway | 8,789 | (1,566) | 456 | 405 | 8,083 |
| Spain | 11,258 | (594) | (1,410) | 286 | 9,541 |
| Sweden | 8,637 | (726) | (111) | 612 | 8,413 |
| Total | 41,898 | (2,526) | (958) | 1,448 | 39,862 |
| EUR thousand | Yield 1) | CU1 2) | CU2 3) | CU2 tail 4) | Full year 2021 |
| Finland | 14,931 | (1,728) | (3,817) | - | 9,385 |
| Germany | 21,612 | (1,223) | (671) | 442 | 20,160 |
| Italy | 16,023 | (272) | (816) | 133 | 15,067 |
| Norway | 36,889 | (5,932) | (4,343) | 1,614 | 28,230 |
| Spain | 44,911 | (1,605) | (15,700) | 1,111 | 28,716 |
| Sweden | 34,055 | (7,107) | (24,465) | 2,367 | 4,849 |
| Total | 168,421 | (17,868) | (49,812) | 5,666 | 106,407 |
1) Interest income from purchased loan portfolios
2) Catch up 1. Over- or underperformance compared to collection forecast
3) Catch up 2. Revaluations and net present value of changes in forecast
4) Catch up 2 tail. The net present value effect of rolling 180 months forecast, except for Finland who is limited to 180 months from legal date
| For the quarter end / YTD | ||||
|---|---|---|---|---|
| EUR thousand | 31 Mar 2022 | 31 Mar 2021 | Full year 2021 | |
| Balance at start of period | 1,095,789 | 1,124,699 | 1,124,699 | |
| Acquisitions during the period 3) | 79,617 | 16,121 | 113,979 | |
| Collection | (64,017) | (63,334) | (254,949) | |
| Interest income from purchased loan portfolios | 42,820 | 41,898 | 168,421 | |
| Net gain/(loss) purchased loan portfolios 1) | 155 | (2,036) | (62,013) | |
| Repossession of secured NPL | (304) | (18) | (845) | |
| Deliveries on forward flow contracts | (409) | (377) | (1,221) | |
| Disposals 1) | - | - | (193) | |
| Translation difference | 6,723 | 6,643 | 7,911 | |
| Balance at end of period | 1,160,374 | 1,123,596 | 1,095,789 | |
| Payments during the year for investments in purchased debt amounted to EUR 2) | 82,826 | 22,623 | 115,402 |
1) Gain on disposals is netted in P&L as 'Net gain/(loss) purchased loan portfolios'
2) Payments during the year will not correspond to credit impaired acqusitions during the year due to deferred payments
3) Reconciliation of credit impaired acquisitions during the period;
| Nominal value acquired portfolios | 200,715 | 29,279 | 827,810 |
|---|---|---|---|
| Expected credit losses at acquisition | (121,098) | (13,158) | (713,831) |
| Credit impaired acquisitions during the period | 79,617 | 16,121 | 113,979 |
For an elaborate description of Axactor's accounting principles for purchased debt, see note 2.12.1, and for a description of revenue recognition and fair value estimation, see note 4, in the Group's Annual Report for the Financial Year 2021.
Non-performing loans consist of portfolios of delinquent consumer debts purchased significantly below nominal value, reflecting incurred and expected credit losses, and thus defined as credit impaired. NPLs 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 in the consolidated balance sheet 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 an asset collateral basis.
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 and updated in line with expectation on an array of economic factors and conditions that will be experienced over time. Changes in expected cash flow are adjusted in the carrying amount and are recognized in profit or loss as income or expense in 'Net gain/(loss) purchased loan portfolios'. Interest income is recognized using a credit adjusted effective interest rate, included in 'Interest income from purchased loan portfolios'.
The majority of the non-performing loans are unsecured. Only a small part of the loans, approximately 5% of the book value of the loans, is secured by a property object.
| Market | Book value |
|---|---|
| Finland | 113,708 |
| Norway | 261,485 |
| Sweden | 225,220 |
| Germany | 141,675 |
| Italy | 141,723 |
| Spain | 276,562 |
| Total | 1,160,374 |
The estimation of future cash flow is affected by several factors, including general macro factors, market specific factors, portfolio specific factors and internal factors. Axactor considers relevant macro factors and market specific factors when estimating future cash flow but not as direct input generating output in the forecast models. Portfolio specific factors and internal factors are considered to affect the estimation of future cash flow significantly more than changes in general macro factors and market specific factors.
Axactor has incorporated into the estimated remaining collection (ERC) the effect of the economic factors and conditions that is expected to influence collections going forward. An analysis of the effects of historical crisis like the financial crisis in 2008 and the experience on collections of the Covid-19 over the last year has formed the basis for the current ERC. The ERC table is included in note 2.
| EUR thousand | Currency | Facility limit | Nominal value | Capitalized loan fees |
Accrued interest |
Carrying amount, EUR |
Interest coupon | Maturity |
|---|---|---|---|---|---|---|---|---|
| Facility | ||||||||
| Bond (ISIN: NO0010914666) | EUR | 200,000 | (4,223) | 3,033 | 198,810 3m EURIBOR+700bps | 12.01.2024 | ||
| Bond (ISIN: NO0011093718) | EUR | 300,000 | (3,673) | 713 | 297,040 3m EURIBOR+535bps | 15.09.2026 | ||
| Total bond loan | 500,000 | (7,896) | 3,746 | 495,850 | ||||
| Revolving credit facility DNB/Nordea | EUR | 63,368 | (7,425) | (8) | 55,935 | EURIBOR+ margin | 22.12.2023 | |
| (multiple currency facility) | NOK | 118,482 | 118,482 | NIBOR+ margin | 22.12.2023 | |||
| SEK | 217,864 | 217,864 | STIBOR+ margin | 22.12.2023 | ||||
| Total credit facilities | 545,000 | 399,714 | (7,425) | (8) | 392,281 | |||
| Total borrowings at end of period | 899,714 | (15,320) | 3,737 | 888,131 | ||||
| Allocated to continuing operations: | 860,877 | |||||||
| Allocated to discontinued operations: | 27,254 | |||||||
| whereof: | ||||||||
| Non-current | 884,394 | |||||||
| Allocated to continuing operations: | 857,140 | |||||||
| Allocated to discontinued operations: | 27,254 | |||||||
| Current | 3,737 | |||||||
| Allocated to continuing operations: | 3,737 | |||||||
| Allocated to discontinued operations: | - | |||||||
| of which in currency: | ||||||||
| NOK | 118,482 | |||||||
| SEK | 217,864 | |||||||
| EUR | 551,784 | |||||||
All borrowings in discontinued operations are nominated in EUR.
| EUR thousand | Bond loan | Credit facilities | Total Borrowings |
|---|---|---|---|
| Balance at 1 Jan | 495,193 | 343,063 | 838,256 |
| Proceeds from loans and borrowings | - | 167,632 | 167,632 |
| Repayment of loans and borrowings | - | (120,412) | (120,412) |
| Loan fees | - | (81) | (81) |
| Total changes in financial cash flow | - | 47,139 | 47,139 |
| Change in accrued interest | (78) | (73) | (151) |
| Amortization capitalized loan fees | 735 | 1,592 | 2,327 |
| Currency translation differences | - | 561 | 561 |
| Total borrowings at end of period | 495,850 | 392,281 | 888,131 |
| Allocated to continuing operations: | 860,877 | ||
| Allocated to discontinued operations: | 27,254 |
| Total | Estimated future cash flow within | ||||||
|---|---|---|---|---|---|---|---|
| EUR thousand | Currency | Carrying amount |
estimated future cash flow |
6 months or less | 6-12 months | 1-2 years | 2-5 years |
| Bond (ISIN: NO0010914666) | EUR | 198,810 | 228,388 | 7,039 | 7,156 | 214,194 | - |
| Bond (ISIN: NO0011093718) | EUR | 297,040 | 373,339 | 8,203 | 8,070 | 16,273 | 340,794 |
| Total bond loan | 495,850 | 601,728 | 15,242 | 15,225 | 230,467 | 340,794 | |
| Revolving credit facility DNB/Nordea (multiple currency facility) |
EUR/NOK/SEK | 392,281 | 411,184 | 6,278 | 6,278 | 398,628 | - |
| Total credit facilities | 392,281 | 411,184 | 6,278 | 6,278 | 398,628 | - | |
| Total borrowings at end of period | 888,131 | 1,012,912 | 21,521 | 21,504 | 629,094 | 340,794 | |
| Allocated to continuing operations: | 860,877 | ||||||
| Allocated to discontinued operations: | 27,254 |
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.
Bond (ISIN NO 0010914666) ACR02 was placed at 3m EURIBOR +7.00% interest, with maturity date 12 January 2024.
The following financial covenants apply:
Bond (ISIN NO 0011093718) ACR03 was placed at 3m EURIBOR +5.35% interest, with maturity date 15 September 2026.
The bond is listed on Oslo Børs.
The following financial covenants apply:
Trustee: Nordic Trustee
The revolving credit facility consists of EUR 545 million in a multicurrency facility, with an addtional EUR 75 million accordion option. The loan carries a variable interest rate based on the interbank rate in each currency with a margin.
The following financial covenants apply:
The maturity date for the facility is 22 December 2023.
All material subsidiaries of the Group are guarantors and have granted a share pledge and bank account pledge as part of the security package for this facility. ReoLux Holding Sarl is not part of the agreement nor the security arrangement.
All leases are related to continuing operations.
| EUR thousand | Buildings | Vehicles | Other | Total |
|---|---|---|---|---|
| Right of use assets at 1 Jan 2021 | 3,949 | 797 | 80 | 4,826 |
| New leases and lease modifications | 429 | (46) | - | 383 |
| Depreciation of the year | (577) | (89) | (45) | (711) |
| Disposals | (24) | (10) | - | (34) |
| Currency exchange effects | 14 | 1 | - | 14 |
| Right of use assets at 31 Mar 2021 | 3,791 | 652 | 35 | 4,477 |
| New leases and lease modifications | 8,904 | 153 | 51 | 9,109 |
| Depreciation of the year | (1,926) | (257) | (35) | (2,218) |
| Disposals | (461) | (73) | (4) | (538) |
| Currency exchange effects | (61) | - | - | (62) |
| Right of use assets at 31 Dec 2021 | 10,247 | 475 | 46 | 10,768 |
| New leases and lease modifications | 1,456 | 51 | - | 1,507 |
| Depreciation of the period | (573) | (86) | (3) | (662) |
| Disposals | (48) | (3) | - | (51) |
| Currency exchange effects | (2) | - | (1) | (2) |
| Right of use assets at 31 Mar 2022 | 11,080 | 439 | 42 | 11,561 |
| Remaining lease term | 0-10 years | 0-3 years | 0-3 years | |
| Depreciation method | Linear | Linear | Linear |
| EUR thousand | 31 Mar 2022 | 31 Mar 2021 | Full year 2021 | |
|---|---|---|---|---|
| Lease liabilities at 1 Jan | 11,051 | 5,086 | 5,086 | |
| New leases, modifications and terminations | 1,447 | 273 | 8,812 | |
| Lease payments | (683) | (645) | (2,812) | |
| Currency exchange effects | (2) | 18 | (35) | |
| Lease liabilities at period end | 11,813 | 4,732 | 11,051 | |
| Current: | 2,342 | 2,342 | 2,185 | |
| Non-current | 9,471 | 2,390 | 8,866 | |
| EUR thousand | 31 Mar 2022 | 31 Mar 2021 | Full year 2021 | |
|---|---|---|---|---|
| Undiscounted lease liabilities and maturity of cash outflow | ||||
| < 1 year | 2,970 | 2,533 | 2,195 | |
| 1-2 years | 2,735 | 1,231 | 1,976 | |
| 2-3 years | 2,297 | 878 | 1,527 | |
| 3-4 years | 2,061 | 302 | 1,281 | |
| 4-5 years | 1,844 | 73 | 1,247 | |
| > 5 years | 1,932 | 61 | 2,100 | |
| Total undiscounted lease liabilities, end of period | 13,839 | 5,079 | 10,325 | |
| Discount element | (2,026) | (347) | 726 | |
| Total discounted lease liabilities, end of period | 11,813 | 4,732 | 11,051 |
Changes in the forward flow agreements is shown below. For additional information, see Note 2.12.2 in Group Annual Report for the Financial Year 2021.
| EUR thousand | 31 Mar 2022 | 31 Mar 2021 | Full year 2021 |
|---|---|---|---|
| Balance at 1 Jan | (409) | (834) | (834) |
| Deliveries | 409 | 377 | 1,221 |
| Value change | - | (375) | (782) |
| Translation difference | - | (23) | (14) |
| Balance at period end | - | (855) | (409) |
The changes in forward flow derivatives is included in 'Other current assets' and 'Other current liabilities' in the consolidated statement of financial position;
| EUR thousand | 31 Mar 2022 | 31 Mar 2021 | Full year 2021 |
|---|---|---|---|
| Forward flow derivatives, asset | - | - | - |
| Forward flow derivatives, liability | - | (855) | (409) |
| Balance at period end | - | (855) | (409) |
| Number of shares | Share capital (EUR) |
|
|---|---|---|
| At 31 Dec 2020 | 185,395,464 | 97,040,286 |
| New share issues, Jan | 50,000,000 | 26,171,159 |
| New share issues, Jan | 40,000,000 | 20,936,928 |
| New share issues, Mar | 26,750,000 | 14,001,570 |
| At 31 Dec 2021 | 302,145,464 | 158,149,942 |
| At 31 Mar 2022 | 302,145,464 | 158,149,942 |
| Name | Shareholding | % Share |
|---|---|---|
| Geveran Trading Co Ltd | 138,920,892 | 46.0% |
| Skandinaviska Enskilda Banken AB | 10,623,411 | 3.5% |
| Torstein Ingvald Tvenge | 10,000,000 | 3.3% |
| Ferd AS | 7,864,139 | 2.6% |
| Verdipapirfondet Nordea Norge Verdi | 4,454,162 | 1.5% |
| Nordnet Livsforsikring AS | 2,360,313 | 0.8% |
| Endre Rangnes | 2,017,000 | 0.7% |
| Gvepseborg AS | 2,009,694 | 0.7% |
| Alpette AS | 1,661,643 | 0.5% |
| Nordnet Bank AB | 1,651,279 | 0.5% |
| Verdipapirfondet Nordea Avkastning | 1,611,984 | 0.5% |
| Velde Holding AS | 1,500,000 | 0.5% |
| Nordea Bank Abp | 1,347,253 | 0.4% |
| Verdipapirfondet Nordea Kapital | 1,318,222 | 0.4% |
| Andres Lopez Sanchez | 1,177,525 | 0.4% |
| David Martin Ibeas | 1,177,525 | 0.4% |
| Latino Invest AS | 1,040,000 | 0.3% |
| Titas Eiendom AS | 1,000,000 | 0.3% |
| Vardfjell AS | 919,372 | 0.3% |
| Verdipapirfondet Nordea Norge Plus | 911,421 | 0.3% |
| Total 20 largest shareholders | 193,565,835 | 64.1% |
| Other shareholders | 108,579,629 | 35.9% |
| Total number of shares | 302,145,464 | 100% |
| Total number of shareholders | 10,496 |
| Name | Shareholding | % Share |
|---|---|---|
| Latino Invest AS 1) | 1,040,000 | 0.3% |
| Johnny Tsolis Vasili 1) | 670,000 | 0.2% |
| Terje Mjøs Holding AS 3) | 500,000 | 0.2% |
| Robin Knowles 2) | 183,714 | 0.1% |
| Kyrre Svae 2) | 150,000 | 0.0% |
| Vibeke Ly 2) | 133,750 | 0.0% |
| Arnt Andre Dullum 2) | 131,000 | 0.0% |
| Nina Mortensen 2) | 95,000 | 0.0% |
| Hans Olov Harén 3) | 22,150 | 0.0% |
| Brita Eilertsen 3) | 19,892 | 0.0% |
1) CEO/Related to the CEO of Axactor
2) Member of the Executive Management Team of Axactor
3) Member of the Board of Directors of Axactor / controlled by member of the Board of Directors of Axactor
The Group secured 100% of the shares in C.R. Service - Credit Recovery Service S.r.l (CRS) on 26 October 2021 and the transaction was closed 3 January 2022.
CRS is an Italian debt collection agency, managed from the headquarter in Grosseto (Tuscany) and has a contact center in Milazzo (Sicily) with a total of 155 employees. After the transaction Axactor has a strong footprint with 279 employees in Italy. CRS is a top-5 independent 3PC-player in the Italian bank and finance segment. The acquisition supports the Group's strategy of strengthening the position in existing countries, improving capabilities on 3PC and preparing for post-pandemic volumes and new signed contracts in Italy.
The purchase price allocation identifies a fair value of the equity of EUR 0.7 million, the residual value of the transferred consideration, EUR 6.3 million, is allocated to goodwill. All goodwill in the acquistion is related to CRS' 3PC business. The total amount of goodwill recognized in the period that is expected to be deductible for tax purposes is nil. The Group has recognized a provision per 3 January 2022 of EUR 2.6 million related to three contingent considerations. The payments are contingent upon retention and financial performance.
The table below discloses the impact from the transaction effective from 3 January 2022.
| 2022 | |
|---|---|
| EUR thousand | CRS |
| Date of acquisition | 3 Jan 2022 |
| Acquired part of company | 100% |
| Purchase price | 7,033 |
| - Whereof cash consideration | 4,433 |
| - Whereof contingent consideration | 2,600 |
| Assets | |
| Deferred tax assets | 103 |
| Other intangible fixed assets | 15 |
| Leases | 990 |
| Other tangible assets | 50 |
| Current receivables | 989 |
| Cash and cash equivalents | 1,348 |
| Total assets | 3,495 |
| Liabilities | |
| Non-current interest bearing debt | 67 |
| Deferred tax liabilities | 265 |
| Trade payables | 256 |
| Lease liabilities | 1,095 |
| Other short-term liabilities | 1,105 |
| Total liabilities | 2,788 |
| Total net assets acquired | 707 |
| Identified goodwill | 6,326 |
| Cash consideration | 4,433 |
| Less: cash and cash equivalent balances acquired | 1,348 |
| Net cash outflow arising on acquisition: | 3,085 |
On 15 December 2021 the Board resolved to dispose of the Group's Real estate owned (REO) operating segment. The disposal is consistent with the Group's long-term policy to focus its activities on the Group's other businesses. These operations, which are expected to be sold within 12 months, have been classified as a disposal group held for sale and presented separately in the statement of financial position.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between discontinued operations and discontinued operations are eliminated. The elimination of the intragroup transactions seeks to portray the results of the continuing operations after the disposal. The discontinued operation has intragroup debt related to their operations. To seek to portray the results of the continuing operations after disposal, the intragroup debt and corresponding interest is eliminated within continuing operations. A part of the Group's total debt and interest expense are hence allocated to discontinued operations.
The results of the discontinued operations, which have been included in net profit/(loss) after tax, were as follows:
| For the quarter end / YTD | |||
|---|---|---|---|
| EUR thousand | 31 Mar 2022 | 31 Mar 2021 | Full year 2021 |
| Other operating revenue | 6,272 | 9,996 | 39,846 |
| Total income | 6,272 | 9,996 | 39,846 |
| Cost of REO's sold, incl impairment | (6,285) | (10,386) | (50,515) |
| Operating expenses | (942) | (1,540) | (5,920) |
| Total operating expenses | (7,227) | (11,926) | (56,435) |
| EBITDA | (956) | (1,930) | (16,589) |
| Amortization and depreciation | - | (16) | (40) |
| Operating profit | (956) | (1,946) | (16,629) |
| Financial expenses | (598) | (1,195) | (4,304) |
| Net financial items | (598) | (1,195) | (4,304) |
| Profit/(loss) before tax | (1,554) | (3,141) | (20,933) |
| Tax (expense) | - | 27 | 27 |
| Net profit/(loss) after tax | (1,554) | (3,114) | (20,906) |
| Attributable to: | |||
| Non-controlling interests | (960) | (1,959) | (13,194) |
| Shareholders of the parent company | (594) | (1,154) | (7,712) |
| Earnings per share: basic | (0.002) | (0.004) | (0.026) |
| Earnings per share: diluted | (0.002) | (0.004) | (0.026) |
The major classes of assets and liabilities comprising the operations classified as held for sale are as follows:
| EUR thousand | 31 Mar 2022 |
|---|---|
| Current assets | |
| Stock of secured assets | 23,074 |
| Accounts receivable | 1,191 |
| Other current assets | 589 |
| Cash and cash equivalents | 4,021 |
| Total current assets | 28,875 |
| Assets classified as held for sale | 28,875 |
| Non-current liabilities | |
| Interest bearing debt | 27,254 |
| Total non-current liabilities | 27,254 |
| Current liabilities | |
| Accounts payable | 80 |
| Other current liabilities | 1,540 |
| Total current liabilities | 1,621 |
| Liabilities directly associated with assets classified as held for sale | 28,875 |
| Net assets directly associated with disposal group | - |
The net cash flows incurred by the operations classified as held for sale are as follows:
| For the quarter end / YTD | ||||
|---|---|---|---|---|
| EUR thousand | 31 Mar 2022 | 31 Mar 2021 | Full year 2021 | |
| Net cash flow from operating activities | 5,311 | 8,589 | 29,212 | |
| Net cash flow from investing activities | - | - | - | |
| Net cash flow from financing activities | (6,050) | (9,589) | (32,609) | |
| Total net cash flow | (739) | (1,000) | (3,398) | |
On 21 April 2022, the annual general meeting voted to convert Axactor SE from a Societas Europaea company to a Norwegian Allmennaksjeselskap (ASA). The process is expected to conclude within the second quarter of 2022.
On 21 April 2022, the annual general meeting re-elected Terje Mjøs, Kathrine Astrup Fredriksen, Brita Eilertsen and Lars-Erich Nilsen as Board members for another term. The newly elected chair, Kristian Melhuus, will also continue in his role for the commencing term.
| APM | Definition | Purpose of use | Reconciliation IFRS |
|---|---|---|---|
| Gross revenue | Total income plus portfolio amortizations and revaluations, and change in forward flow derivatives |
To review the revenue before split into interest and amortization (for own portfolios) |
Total income from consolidated statement of profit or loss plus portfolio amortizations and revaluations in the consolidated statement of cash flows and change in forward flow derivatives |
| Cash and cash equivalents | Consolidated cash and cash equivalents, from continuing and discontinued operations |
To reflect the Group's total cash position |
Cash and cash equivalents from the consolidated statement of financial position plus cash and cash equivalents from discontinued operations according to note 12 |
| Cash EBITDA from continuing operations |
EBITDA adjusted for change in forward flow derivatives, calculated cost of share option program and portfolio amortizations and revaluations |
To reflect cash from continuing operating activities, excluding timing of taxes paid and movement in working capital |
EBITDA from continuing operations (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 | Cash EBITDA from continuing operations 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 from continuing operations (total income minus total operating expenses) in consolidated statement of profit or loss plus EBITDA from discontinued operations according to note 12, adjusted for specified elements from the consolidated statement of cash flows |
| Estimated remaining collection (ERC) |
Estimated remaining collection express the expected future cash collection on own portfolios (NPLs) in nominal values, over the next 180 months |
ERC is a standard APM within the industry with the purpose to illustrate the future cash collection including estimated interest income and opex |
Purchased debt portfolios from the consolidated statement of financial position |
| Net interest bearing debt (NIBD) |
Net interest bearing debt means the aggregated amount of interest bearing debt allocated to both continuing and discontinued operations, less aggregated amount of unrestricted cash and cash equivalents, on a consolidated basis |
NIBD is used as an indication of the Group's ability to pay off all of its debt |
Non-current interest bearing debt, current portion of interest bearing debt and unrestricted cash and cash equivalents from the consolidated statement of financial position plus debt allocated to discontinued operations according to note 12, adjusted for capitalized loan fees and accrued interest according to note 8. |
| Return on equity (ROE), annualized, excluding non-controlling interests |
Net consolidated result from continuing and discontinued operations divided by average equity for the period attributable to shareholders, annualized |
Measures the profitability in relation to shareholders' equity |
Net profit/(loss) after tax from the consolidated statement of profit or loss and equity attributable to shareholders from the consolidated statement of changes in equity |
| Return on equity, continuing operations, annualized |
Net consolidated result from continuing operations divided by average equity for the period attributable to shareholders, annualized |
Measures the profitability in relation to shareholders' equity. This new APM has replaced 'Return on equity, including non-controlling interests, annualized' to measure the profitability in relation to continuing operations. |
Net profit/(loss) after tax from continuing operations from the consolidated statement of profit or loss and equity attributable to shareholders from the consolidated statement of changes in equity |
| For the quarter end / YTD | |||
|---|---|---|---|
| EUR thousand | 31 Mar 2022 | 31 Mar 2021 1) | Full year 2021 1) |
| Total income | 56,202 | 51,036 | 155,280 |
| Portfolio amortizations and revaluations | 21,041 | 23,472 | 148,542 |
| Change in forward flow derivatives | - | 375 | 782 |
| Gross revenue | 77,244 | 74,883 | 304,604 |
1) Comparative figures has been re-presented due to a discontinued operation, see note 12.
| For the quarter end / YTD | |||
|---|---|---|---|
| EUR thousand | 31 Mar 2022 | 31 Mar 2021 1) | Full year 2021 1) |
| Total income | 56,202 | 51,036 | 155,280 |
| Total operating expenses | (29,170) | (31,363) | (114,958) |
| EBITDA from continuing operations | 27,033 | 19,673 | 40,322 |
| Change in working capital related to forward flow derivatives | - | 375 | 782 |
| Calculated cost of share option program | 34 | 100 | 180 |
| Portfolio amortizations and revaluations | 21,041 | 23,472 | 148,542 |
| Cash EBITDA from continuing operations | 48,108 | 43,620 | 189,826 |
| EBITDA from discontinued operations | (956) | (1,930) | (16,589) |
| REO cost of sale, including impairment | 6,285 | 10,386 | 50,515 |
| Cash EBITDA | 53,437 | 52,075 | 223,752 |
| Taxes paid | (1,200) | (297) | (3,261) |
| Change in working capital, excl. forward flow derivatives | 2,920 | 9,419 | 4,209 |
| Cash flow from operating activities before NPL and REO investments | 55,157 | 61,198 | 224,700 |
1) Comparative figures has been re-presented due to a discontinued operation, see note 12.
| For the quarter end / YTD | ||||
|---|---|---|---|---|
| EUR thousand | 31 Mar 2022 | 31 Mar 2021 | Full year 2021 | |
| Purchased debt portfolios | 1,160,374 | 1,123,596 | 1,095,789 | |
| Estimated opex for future collection at time of acquisition | 310,993 | 298,810 | 296,290 | |
| Estimated discounted gain | 787,317 | 736,402 | 748,463 | |
| Estimated remaining collection, NPL | 2,258,684 | 2,158,808 | 2,140,543 |
| For the quarter end / YTD | ||||
|---|---|---|---|---|
| EUR thousand | 31 Mar 2022 | 31 Mar 2021 | Full year 2021 | |
| Cash and cash equivalents from financial position | 35,459 | 47,131 | 38,155 | |
| Cash and cash equivalents, discontinued operations | 4,021 | |||
| Cash and cash equivalents | 39,480 | 47,131 | 38,155 |
| For the quarter end / YTD | ||||
|---|---|---|---|---|
| EUR thousand | 31 Mar 2022 | 31 Mar 2021 | Full year 2021 | |
| Non-current portion of interest bearing debt from financial position | 857,140 | 714,283 | 834,411 | |
| Current portion of interest bearing debt from financial position | 3,737 | 151,577 | 3,845 | |
| Interst bearing debt allocated to discontinued operations | 27,254 | |||
| Total interest bearing debt | 888,131 | 865,860 | 838,256 | |
| Capitalized loan fees | (15,320) | (1,283) | (17,566) | |
| Accrued interest | 3,738 | 705 | 3,845 | |
| Nominal value interest bearing debt | 899,714 | 866,438 | 851,977 | |
| Cash and cash equivalents | 39,480 | 47,131 | 38,155 | |
| Net interest bearing debt (NIBD) | 860,234 | 819,307 | 813,821 |
| For the quarter end / YTD | ||||
|---|---|---|---|---|
| EUR thousand | 31 Mar 2022 | 31 Mar 2021 | Full year 2021 | |
| Net profit/(loss) after tax attributable to shareholders of the parent company |
6,631 | (1,434) | (32,797) | |
| Average total equity for the period related to the shareholders of the parent company |
388,083 | 357,156 | 384,751 | |
| Return on equity, excluding non-controlling interests, annualized | 7.0% | (1.6%) | (8.5%) |
| For the quarter end / YTD | ||||
|---|---|---|---|---|
| EUR thousand | 31 Mar 2022 | 31 Mar 2021 | Full year 2021 | |
| Net profit/(loss) after tax from continuing operations | 7,224 | (280) | (25,085) | |
| Average total equity for the period related to the shareholders of the parent company | 388,083 | 357,156 | 384,751 | |
| Return on equity, continuing operations, annualized | 7.6% | (0.3%) | (6.5%) |
| Active forecast | Forecast of estimated remaining collection on NPL portfolios |
|---|---|
| Board | Board of directors |
| Cash EBITDA margin | Cash EBITDA as a percentage of gross revenue |
| Chair | Chari 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 | Collection on own NPL portfolios in relation to active forecast |
| Equity ratio | Total equity as a percentage of total equity and liabilities |
| Forward flow agreement | Agreement for future aquisitions of NPLs at agreed prices and delivery |
| Gross IRR | The credit adjusted interest rate that makes the net present value of ERC equal to NPL book value, calculated using monthly cash flows over a 180-months period |
| Group | Axactor SE and all its subsidiaries |
| NPL amortization rate | NPL amortization divided by NPL gross revenue |
| One off portfolio aquisitions | Aquisition of a single portfolio of NPLs |
| Opex | Total operating expenses |
| Recovery rate | Portion of the original debt repaid |
| Replacement capex | Aquisitions of new NPLs to keep the same book value of NPLs from last period |
| 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 |
| Yield | Interest revenue from purchased loan portfolios |
| 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 |
| CM1 | 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 Collection |
| ESG | Environmental, social and governance |
| ESOP | Employee Stock Ownership Plan |
| FSA | The Financial Supervisory Authority |
| FTE | Full Time Equivalent |
| GHG | Greenhouse gas emissions |
| 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 |
| Interim report - Second quarter of 2022 | 18 Aug, 2022 |
|---|---|
| Interim report - Third quarter of 2022 | 27 Oct, 2022 |
| Interim report - Fourth quarter of 2022 | 17 Feb, 2023 |
Axactor SE (publ) Drammensveien 167 0277 Oslo Norway
www.axactor.com
The shares of Axactor SE (publ.) are listed on the Oslo Stock Exchange, ticker ACR.
Cautionary Statement: Statements and assumptions made in this document with respect to Axactor SE's ("Axactor") current plans, estimates, strategies and beliefs, and other statements that are not historical facts, are forward-looking statements about the future performance of Axactor. Forward-looking statements include, but are not limited to, those using words such as "may", "might", "seeks", "expects", "anticipates", "estimates", "believes", "projects", "plans", strategy", "forecast" and similar expressions. These statements reflect management's expectations and assumptions in light of currently available information. They are subject to a number of risks and uncertainties, including, but not limited to, (i) changes in the economic, regulatory and political environments in the countries where Axactor operates; (ii) changes relating to the statistic information available in respect of the various debt collection projects undertaken; (iii) Axactor's continued ability to secure enough financing to carry on its operations as a going concern; (iv) the success of its potential partners, ventures and alliances, if any; (v) currency exchange rate fluctuations between the euro and the currencies in other countries where Axactor or its subsidiaries operate. In the light of the risks and uncertainties involved in the debt collection business, the actual results could differ materially from those presented and forecast in this document. Axactor assumes no unconditional obligation to immediately update any such statements and/or forecasts.
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