Quarterly Report • Aug 17, 2021
Quarterly Report
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· Earnings before tax ended at EUR 8.0 million (-46.9), while net profit came in at EUR 4.4 million (-44.4). Adjusting for non-controlling interests, this translates to an annualized return on equity for shareholders of 6.9% for the quarter (-36.1%)
· Investments in NPL portfolios amounted to EUR 12.3 million for the quarter (62.0), made entirely under forward flow agreements. Several new forward flow contracts have been signed during the second quarter and committed NPL investments for the remainder of 2021 stand at EUR 55-60 million
· Investments in NPL portfolios amounted to EUR 28.4 million (151.8)
· During the first half of 2021, the large balance sheet restructuring announced at the end of 2020 was finalized:
In August, Axactor obtained and published credit ratings from leading credit rating agencies Moody's and S&P. The ratings obtained were B1 and B, respectively. The credit ratings will enable Axactor to access a much wider investor market in potential future bond placements, and is expected to lower the cost of debt over time.
| For the quarter end | Year to date | ||||
|---|---|---|---|---|---|
| EUR million | 30 Jun 2021 | 30 Jun 2020 | 30 Jun 2021 | 30 Jun 2020 | Full year 2020 |
| Gross revenue | 95.2 | 70.8 | 180.1 | 150.0 | 325.2 |
| Total income | 65.9 | 28.7 | 126.9 | 84.3 | 201.2 |
| EBITDA | 22.2 | -30.0 | 39.9 | -15.8 | 32.0 |
| Cash EBITDA 1) | 65.7 | 44.4 | 117.8 | 92.6 | 209.5 |
| Depreciation and amortization (excl Portfolio Amortization) | -2.3 | -2.6 | -4.9 | -5.2 | -10.8 |
| Net financial items | -11.8 | -14.4 | -28.7 | -20.3 | -53.4 |
| Tax (expense) | -3.6 | 2.5 | -5.3 | 0.4 | -1.8 |
| Net profit/(loss) after tax | 4.4 | -44.4 | 1.0 | -40.9 | -34.0 |
| Return on Equity, excluding Non-controlling interests, annualized | 6.9 % | -36.1 % | 3.1 % | -14.9 % | -6.1 % |
| Return on Equity, including Non-controlling interests, annualized | 4.1 % | -46.9 % | 0.5 % | -21.8 % | -9.1 % |
| Growth total income | 129.8 % | -60.4 % | 50.6 % | -42.3 % | -29.5 % |
| Cash and Cash Equivalents, end of period 2) | 44.4 | 31.4 | 44.4 | 31.4 | 47.8 |
| Gross revenue from NPL Portfolios | 69.0 | 54.5 | 132.4 | 108.6 | 236.5 |
| Gross revenue from REO Portfolios | 13.3 | 6.6 | 23.3 | 18.1 | 40.4 |
| Acquired NPL portfolios during the period | 12.3 | 62.0 | 28.4 | 151.8 | 208.2 |
| Acquired REO portfolios during the period | 0.1 | 0.1 | 0.1 | 0.3 | 0.4 |
| Book value of NPL, end of period | 1,104.1 | 1,107.3 | 1,104.1 | 1,107.3 | 1,124.7 |
| Book value of REO, end of period | 55.0 | 88.6 | 55.0 | 88.6 | 78.8 |
| Estimated Remaining Collection, NPL | 2,119.3 | 2,153.1 | 2,119.3 | 2,153.1 | 2,169.2 |
| Interest bearing debt, end of period | 831.4 | 918.5 | 831.4 | 918.5 | 936.2 |
| Number of Employees (FTEs), end of period | 1,062 | 1,135 | 1,062 | 1,135 | 1,128 |
| Price per share, last day of period | 10.35 | 6.01 | 10.35 | 6.01 | 10.70 |
1) Cash EBITDA is EBITDA 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
2) Restricted cash excluded
The second quarter of 2021 continued the return towards normality, with improving collections and recovery rates, as well as improved cost position within the core business of NPL and 3PC. The total NPL collection performance for the second quarter reached 99% of the active forecast, with improving performances both in Italy and Spain indicating that the pandemic-related struggles are beginning to subside. The 3PC volumes continue to be lower than normal, but new contracts signed in Spain, Italy and Sweden during the second quarter are promising signals for the coming quarters. The REO segment is treated as a run-off scenario, but continues with high sales volumes despite a rapidly declining asset base.
Several of the initiatives under the cost saving program launched in the first quarter of 2021 were finalized during the second quarter. The site-consolidation in Spain was finalized in May, by closing the operational sites in Sevilla, Bilbao and Zaragoza. The home shoring of back office tasks from the Baltics to Finland was finalized in June. In total 51 employees were affected in Spain and 11 employees in Estonia and Latvia combined. The legal entities in the Baltics will be liquidated in the third quarter of 2021.
As part of the updated strategy direction with more focus on Axactor's core competence, the German field-service operation has been outsourced during the second quarter affecting 26 employees. The service offering includes repossession of collateralized cars and will still be offered through Axactor for both existing and new customers.
With the restructuring initiatives, the operational divisions have reduced the total operating staff to 849 FTEs at the end of the second quarter 2021. This represents 80% of all FTEs within the Axactor Group.
As inflow of new NPL claims has slowed down over the past months, most of the focus within the NPL segment has been on the back-book portfolios and the debt collection cases segmented as surveillance portfolios. The combination of tax refund months and increased amicable solutions were the main drivers to achieve a gross revenue of EUR 69.0 million within the NPL segment, an increase of 27% compared to the second quarter of 2020 (54.5). The results were achieved with less operational resources and higher efficiency, and is aligned with the Axactor goal of being the industry leader in terms of cost-to-collect.
The 3PC area had total income of EUR 12.9 million in the second quarter of 2021, an increase of 34% from the corresponding quarter last year (9.7). The segment is still experiencing lower volumes from the existing customers than anticipated, but the sales pipeline is currently transforming into signed contracts with start-up dates in the third quarter of 2021. Axactor continues to perform well on
benchmark competitions within the bank and financial sector, with results particularly good on consumer loans and credit card portfolios.
The positive sales momentum continued within the REO segment and 361 assets were sold during the second quarter of 2021. This leaves 2,039 assets in inventory at quarter-end, with the majority being residential and parking space assets.
Axactor has always focused on being available for debtors to help in a potentially difficult situation. In the second quarter of 2021, the Group had an average answering rate of 98% of all inbound phone calls addressed to the contact centers. The high focus on telephony service levels, in combination with increased investments in self-service solutions, ensures availability for debtors needing help.
The debtor satisfaction survey launched in all markets is also an important tool to understand how debtors view the assistance they get from Axactor. The results have stabilized during the second quarter at an average score of 4.5 out of maximum 5. The results are highly valued and motivates the operational staff to continue to work hard for both debtors and customers.
There is also a continued focus on being available in the digital space and to offer new and innovative payment methods. A project has been started to include Germany in the Group wide debtor portal initiative, with the aim of launching the inhouse built payment portal, QuickPay!, for Germany in the fourth quarter of 2021. Axactor has also recently signed a contract with Neonomics to offer their open banking solutions for the debtor portal across the Group, making it easier for debtors to conduct payments. This cost-efficient solution will be launched first in the Nordic countries, with Spain, Germany and Italy expected to follow.
Axactor has had a strong focus on ESG from the inception, with emphasis on responsible operations to enable long-term value creation in an ethical, sustainable, environmentally and socially responsible manner. The Group continuously strive to become better and to improve the communication around its work. Axactor is pleased to see that external rating agencies are recognizing the effort, with Sustainalytics improving Axactor's rating for the second time this year. Axactor has moved from the "medium risk" category with a score of 24.8 in 2020, to the "low risk" category with a current score of 13.3. This means Axactor is now rated as the second-best company in terms of ESG out of the 151 rated companies within the consumer finance sub-industry. It also places Axactor among the top 5% best performing companies world-wide, regardless of sector.
During second quarter, Axactor has made further improvements within the ESG area through signing the UN Global Compact, implementing a common governance risk and compliance tool to further strengthen the internal control and risk management across the group, providing whistle blowing e-learning training to all employees and preparing for environmental certifications in all countries, and more.
Moreover, all HR processes have been reviewed and improvements to be implemented during the second half of 2021 identified. Career pages have been developed for all countries to strengthen the recruitment processes, and leadership development programs have been initiated cross the group.
Multiple digital nano learning trainings have been provided to all employees covering security and GDPR related topics, such as mobile phone security, usage of home office network, verification of links in e-mail, privacy risks, confidentiality, data minimization, privacy across devices and digital security in general. The encryption procedure has also been updated, and training has been provided to operational staff. The business continuity plan (BCP) has been reviewed in all countries and different scenario trainings conducted in Norway, Spain and Italy. The remaining countries and group will conduct the training in August.
The European Banking Authority (EBA) has approved and suggested several changes to its guidelines, and Axactor have evaluated the consequences for the Group. On 4 May 2021, the EBA published a discussion paper to facilitate the review of the standardized NPL data templates providing common data sets for the screening, financial due diligence and valuation during NPL transactions in the EU of which Axactor has prepared a reply. Axactor has also reviewed the proposal for a Directive on credit servicers and credit purchasers after the political agreement between the European Parliament and the Council. Axactor already operate in line with the key objectives of the directive besides in Spain where debt collection legislation and license requirements are expected. As Axactor already operate in line with the expectations and are strongly involved in the local branch association ANGECO, the consequences of the directive are not conceived as high risk.
The internal audit has continued focus on identifying risks for fraud and corruption, and have among others reviewed the payment process in Italy during the second quarter. The NPL post-sale process in Norway and the physical security in Sweden have also been tested. The audits identified only limited risks, and no breaches.
Total income ended at EUR 65.9 million for the second quarter 2021, up from EUR 28.7 million in the corresponding quarter last year. The 130% growth is primarily explained by the impacts of the Covid-19 pandemic on the second quarter results last year. Activity levels were below normal in the second quarter 2020 and gross revenue thus increased 34% to EUR 95.2 million for the second quarter 2021 (70.8). In addition, Axactor booked a net revaluation of NPL portfolios during the second quarter 2020 of EUR -27.0 million. This compares to EUR -1.4 million for the second quarter this year. The impact of less revaluation was partially offset by an 85% increase in NPL amortization.
Comparing to the first quarter of 2021, total income grew by 8%, while gross revenue grew by 12%. The growth was spread across all three busines segments.
For the first half of 2021, total income ended at EUR 126.9 million, up from EUR 84.3 million during the first half of 2020. Gross revenue grew 20% to EUR 180.1 million for the first half 2021 (150.0).
The NPL total income grew 221% to EUR 39.7 million from the second quarter last year (12.4), while gross revenue increased by 27% to EUR 69.0 million (54.5). The growth came partially as a result of higher activity levels as societies are reopening, but also as a result of continuous investments in new NPL portfolios over the last twelve months. NPL amortization and revaluation ended at EUR 29.3 million, down from EUR 42.1 million last year. This includes net revaluations of EUR -1.4 million for the second quarter 2021, compared to EUR -27.0 million in the corresponding period last year.
NPL total income grew 1% compared to the first quarter 2021, while NPL gross revenue grew 9%. The difference in growth rates is explained by higher NPL amortization and revaluation.
For the first half 2021, NPL total income ended at EUR 79.2 million (42.9), while NPL gross revenue ended at EUR 132.4 million (108.6).
3PC total income grew 34% compared to the second quarter last year, ending at EUR 12.9 million (9.7). The impacts of government-imposed restrictions throughout Europe are still affecting operations, although the impacts are gradually reducing. Several new 3PC deals have been signed during the quarter, including a transformational deal for Axactor Sweden. The deal establishes Axactor as a serious contender in the Swedish 3PC market, a market where Axactor has previously held a very small market share.
For the first half 2021, total income for the 3PC segment ended at EUR 24.4 million, up from EUR 23.1 million for the first half 2020.
Total income for the REO segment ended at EUR 13.3 million for the quarter (6.6), with 361 assets sold. The inventory of REO assets was 2,039 at the end of the second quarter, down 42% over the last twelve months. The REO segment is treated as a run-off segment, with a remaining book value of EUR 55.0 million (88.6).
REO total income for the first half 2021 was EUR 23.3 million, up from EUR 18.1 million in the corresponding period last year. The number of assets sold increased from 563 in the first half 2020 to 665 in the first half 2021.
Total operating expenses before depreciation and amortization amounted to EUR 43.7 million for the second quarter, down from EUR 58.6 million in the second quarter last year. This includes EUR 14.1 million in REO cost of sale, compared to EUR 6.0 million in REO cost of sale and EUR 26.0 million in REO impairments during the second quarter last year.
The operating expenses for the quarter also include EUR 0.9 million in restructuring costs related to a cost saving program initiated earlier in 2021. The restructuring cost is mainly related to outsourcing of the German field-service operation and home shoring of Finnish back-office tasks from the Baltic countries. The second quarter 2020 included restructuring costs as well, totaling at EUR 1.2 million.
The cost saving program is progressing well and estimated annual savings from actions implemented during the first half 2021 is EUR 3.9 million. Expected annual savings when all initiatives are implemented at year-end is EUR 5.2 million.
The operating expenses in percent of gross revenue was 46% in the second quarter 2021, a decline from 83% in the second quarter of 2020 and from 51% in the first quarter 2021.
Total operating expenses before depreciation and amortization for the first half 2021 were EUR 87.0 million, down from EUR 100.1 million in the first half 2020. This includes restructuring costs of EUR 4.0 million for the first half 2021, and EUR 1.2 million for the first half 2020.
Depreciation and amortization – excluding amortization of NPL portfolios – was EUR 2.3 million for the second quarter 2021, down from EUR 2.6 million in the second quarter last year. For the first half 2021, depreciation and amortization amounted to EUR 4.9 million (5.2).
Total contribution from the business segments came in at EUR 32.8 million for the quarter, compared to EUR -20.9 million in the corresponding quarter last year. All three segments saw significantly improved earnings, with the NPL revaluation and REO impairment last year being the most important explanatory factors. The resulting margin on total income was 50% (-73%).
The NPL segment delivered a contribution margin of EUR 31.4 million in the second quarter 2021, up from EUR 4.0 million for the same quarter last year. The margin on segment income was thus 79% (33%). Comparing towards the previous quarter, the NPL contribution grew 3%, from EUR 30.5 million.
Contribution from 3PC was EUR 3.9 million, including EUR 0.7 million in restructuring cost. This represents an increase of 105% from the same period last year (1.9). The resulting margin on segment income was 30% (20%), and would have been 35% excluding the restructuring cost. Contribution margin grew from EUR 0.7 million in the first quarter, which included EUR 2.8 million of restructuring cost. Contribution from the 3PC segment is expected to continue to increase as the full effect of the ongoing cost savings are realized, and the volumes return towards pre Covid-19 levels.
Contribution from the REO segment was EUR -2.5 million for the second quarter (-27.0). This corresponded to a -19% margin on segment income (-411%). The main reason for the improved margin compared to last year is the impairments booked in the second quarter 2020.
For the first half 2021, total contribution from the business segments came in at EUR 61.9 million (4.5), of which NPL accounted for EUR 61.9 million (25.1), 3PC accounted for EUR 4.6 million (6.7) and REO accounted for EUR -4.6 million (-27.4).
EBITDA for the quarter ended at EUR 22.2 million, up from EUR -30.0 million in the second quarter last year and from EUR 17.7 million in the first quarter 2021. The EBITDA margin was 34%, up from -105% in the same quarter last year, and from 29% in the previous quarter. Excluding restructuring cost, the second quarter EBITDA margin would have been 35%.
EBITDA for the first half 2021 ended at EUR 39.9 million, up from EUR -15.8 million in the first half 2020.
The difference between contribution margin and EBITDA comprises unallocated SG&A and IT costs, which amounted to EUR 10.7 million in the second quarter. This includes restructuring costs of EUR 0.2 million, and compares to EUR 9.0 million for the second quarter 2020 and to EUR 11.3 million for the first quarter 2021. For the first half 2021, unallocated SG&A and IT costs amounted to EUR 22.0 million (20.3).
Cash EBITDA came in at EUR 65.7 million (44.4) for the second quarter 2021. Cash EBITDA is EBITDA adjusted for change in forward flow derivatives, portfolio amortizations and revaluations, REO cost of sales and impairments, and calculated cost of share option program.
Cash EBTIDA for the first half 2021 ended at EUR 117.8 million, up from EUR 92.6 million in the first half 2020.
Operating profit (EBIT) was EUR 19.8 million for the second quarter 2021 (-32.6), and EUR 35.0 for the first half 2021 (-21.1).
Total net financial items for the quarter were negative EUR 11.8 million, compared to negative EUR 14.4 million in the second quarter last year and to negative EUR 16.8 million in the first quarter 2021. Net financial items include a EUR 1.5 million net FX gain (0.1), compared to a net FX loss of EUR 3.2 million in the first quarter 2021. The FX gain comes primarily as a result of closing open SEK positions at favorable exchange rates. Interest expense on borrowings for the quarter ended at EUR 13.3 million, 5% lower than last year (13.9).
During the quarter, the REO funding facility from Nomura was paid down in full, which triggered an early write down of EUR 0.6 million of remaining capitalized loan fees.
For the first half 2021, total net financial items ended at EUR 28.7 million (20.3), including interest expenses of EUR 26.8 million (28.3), net FX impacts of EUR -1.7 million (8.9) and other financial items of EUR -0.1 million (-0.9).
Earnings before tax ended at EUR 8.0 million for the second quarter (-46.9), while net profit ended at EUR 4.4 million (-44.4). The effective tax rate was thus 45.2% (5.4%). The high effective tax rate came mainly as a result of losses in the REO companies that are not tax deductible. Excluding the REO companies, the effective tax rate for the quarter would have been a more modest 28%. The tax rate is expected to decline going forward as the legal structure is further simplified and the REO segment is gradually phased out.
The net profit to shareholders ended at EUR 7.2 million for the second quarter 2021 (-26.7), the highest reported profit in Axactor's history. The net profit to non-controlling interests was EUR -2.8 million (-17.7).
The earnings per share was hence EUR 0.024 on a reported basis (-0.144), and EUR 0.023 on a fully diluted basis (-0.144), based on the average number of shares outstanding in each period.
Earnings before tax for the first half 2021 ended at EUR 6.3 million (-41.3), while net profit ended at EUR 1.0 million (-40.9). The net profit was split EUR 5.7 million to shareholders (-21.5) and EUR -4.7 million to non-controlling interests (-19.4). The resulting earnings per share
was thus EUR 0.020 on reported basis (-0.120), and EUR 0.019 on a fully diluted basis (-0.120), based on the average number of shares outstanding in the period.
Net cash flow from operating activities, including NPL and REO investments, amounted to EUR 49.1 million (-20.5) for the second quarter 2021. The improvement compared to last year is mainly related to lower NPL investments and improved cash EBITDA. The amount paid for NPL portfolios fell from EUR 65.1 million in the second quarter 2020 to EUR 13.2 million in the second quarter 2021.
Excluding investments in NPL and REO portfolios, cash flow from operations for the quarter increased to EUR 62.2 million, from EUR 44.6 million in the corresponding period last year. The difference between Cash EBITDA and cash flow from operations excluding investments in NPL and REO portfolios reflects an increase in working capital of EUR 3.3 million (decrease of 0.3) and taxes paid of EUR 0.1 million (0.1).
For the first half 2021, net cash flow including NPL and REO investments amounted to EUR 87.1 million (-53.8). The amount paid for NPL portfolios fell from EUR 148.2 million during the first half 2020 to EUR 35.8 million in the first half 2021. Excluding investments in NPL and REO portfolios, cash flow from operations for the first half 2021 was EUR 122.7 million (94.0).
Total net cash flow from investments, not including investments in NPL and REO portfolios, were EUR -1.5 million for the second quarter (-1.6), and EUR -2.6 million for the first half (-3.5).
Total cash flow from financing activities was EUR -50.3 million (9.7) in the second quarter, with a net repayment of debt of EUR 37.1 million (net drawdown of 27.2). For the first half, total cash flow from financing activities was EUR -88.8 million (15.8).
Total net cash flow was EUR -2.7 million (-12.4) for the quarter and EUR -4.3 million for the first half (-41.5). Total cash and cash equivalents were thus EUR 47.3 million at the end of the second quarter 2021 (34.3), including EUR 2.9 million in restricted cash (2.9).
Total equity for the Group was EUR 428.9 million at the end of the first half 2021 (363.1), including non-controlling interests of EUR 12.4 million (73.6). This compares to total equity of EUR 375.7 million at the end of 2020 and EUR 430.1 million at the end of the first quarter 2021. The main reason for the increased equity compared to last year is the share issue performed during the first quarter of 2021.
The equity ratio at the end of the first half 2021 was thus 33%, up from 27% at the end of the first half 2020 and up from 28% at the end of 2020.
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, whereas the non-core REO business will be phased-out over time. The company also expects a gradual lowering of the effective tax rate towards 25% to support the return on equity.
The annualized return on equity excluding non-controlling interests for the second quarter 2021 was 6.9% (-36.1%), while return on equity including non-controlling interests ended at 4.1% (-46.9%). Correspondingly, the annualized first half 2021 return on equity ended at 3.1% excluding non-controlling interests (-14.9%) and at 0.5% on a reported basis (-21.8%).
Axactor invested EUR 12.3 million (62.0) in NPL portfolios during the second quarter of 2021, down from EUR 16.1 million in the previous quarter. NPL portfolio investments for the first half amounted to EUR 28.4 million (151.8), all of which were invested under forward flow contracts.
After a period of reducing forward flow commitments due to the Covid-19 induced volatility, Axactor has during the past two quarters secured additional volumes for the coming months. Total estimated forward flow commitments for the remainder of 2021 stands at EUR 55-60 million.
During the first quarter 2021, a large balance sheet restructuring involving several separate transactions was conducted. The main elements were share issues of EUR 51 million, buying Geveran's share of Axactor Invest I, merging the two credit lines from DNB and Nordea, as well as refinancing of the outstanding bond loan.
The revolving credit facility from DNB and Nordea has a total size of EUR 620 million after the transaction, whereof EUR 75 million are in the form of an accordion option. The maturity of the revolving credit facility is at the end of 2023. At the end of the first half 2021, the drawn amount on the revolving credit facility was EUR 464.1 million.
There are two outstanding bond loans at the end of the first half 2021. The publicly listed ACR02 has a nominal value of EUR 200.0 million. The other outstanding bond is held in full by Geveran, and has a nominal value of EUR 140.0 million.
Axactor's Italian entity is locally funded through different facilities with a number of Italian banks. The total outstanding amount at the end of the first half was EUR 39.5 million.
The previous REO financing arrangement with Nomura was paid down in full during the second quarter 2021.
Total interest-bearing debt including capitalized loan fees and accrued interest amounted to EUR 831.4 million (918.5).
Axactor are in compliance with all loan covenant as per the end of the first half of 2021.
The cost savings program initiated in the first quarter 2021 is progressing well, and will lower operating expenses going forward. There are still some initiatives under implementation, and there will be additional restructuring costs estimated to EUR 0.4 million for the third quarter of the year. When all initiatives are fully implemented at year-end, total expected annual savings is estimated to EUR 5.2 million.
3PC sales are in a good trend with several attractive contracts signed over the first half of 2021. New and softer moratorium rules are applicable in Italy from July 1, and Axactor expects the volume to gradually return to a more normalized level for all geographies as societies continue the reopening.
Although the volume of NPL portfolios for sale has increased during the first half of 2021, the activity level is still below pre-pandemic levels. There is fierce competition in certain markets, as several players have increased their investment capacity and are competing for a limited number of one-off transactions. The market activity is expected to pick up further in the second half of the year, with gross IRRs stabilizing at 18%-22%. Axactor will continue to show investment discipline and strictly prioritize deals with high expected return and that fits Axactor's niche strategy: fresh unsecured debt originated from banks or financial institutions. The expected investment level for 2021 is approximately EUR 200 million, but Axactor will prioritize deleveraging over investments if market prices are perceived as unfavorable.
In August, Axactor obtained credit ratings from leading credit rating agencies S&P and Moody's. The ratings will allow Axactor access to a larger bond investor market than previously, which in turn should reduce the interest cost on potential future bond loans.
Through continued focus on cost efficiency, improving tax rates and lower funding cost, Axactor expects return on equity to increase further over time. Favorable changes to the business mix is also expected to have a positive impact, through growth in the capital light 3PC segment and a decreasing REO portfolio.
We confirm that, to the best of our knowledge, the unaudited Financial Statements for the first half of 2021 have been prepared in accordance with IFRS as adopted by EU, with such additional information as required by the Norwegian Accounting Act, and give a true and fair view of the Group's consolidated assets, liabilities, financial position and results of operations.
We confirm that, to the best of our knowledge, the report provides a true and fair view of the development and performance of the business and the position of the Group, together with a description of the key risks and uncertainty factors that the Group is facing.
Oslo, 16 August 2021 The Board of Directors of Axactor SE
Merete Haugli Chair of the Board
Brita Eilertsen Board member Lars Erich Nilsen Board member
Kathrine Astrup Fredriksen Board member
Terje Mjøs Board member
Hans Harén Board Member
Johnny Tsolis Chief Executive Officer
| For the quarter end | Year to date | |||||
|---|---|---|---|---|---|---|
| EUR thousand | Note | 30 Jun 2021 | 30 Jun 2020 | 30 Jun 2021 | 30 Jun 2020 | Full year 2020 |
| Interest income from purchased loan portfolios | 6 | 41,779 | 40,511 | 83,677 | 79,838 | 163,093 |
| Net gain/(loss) purchased loan portfolios | 6 | -2,084 | -28,147 | -4,120 | -36,906 | -49,813 |
| Other operating revenue | 26,161 | 16,219 | 47,331 | 41,222 | 87,871 | |
| Other income | 3 | 71 | 2 | 99 | 24 | |
| Total income | 3,5 | 65,859 | 28,654 | 126,891 | 84,253 | 201,175 |
| Cost of REO's sold, incl impairment | 7 | -14,144 | -32,033 | -24,530 | -42,207 | -52,932 |
| Personnel expenses | -14,252 | -12,923 | -33,120 | -27,824 | -54,872 | |
| Operating expenses | -15,313 | -13,663 | -29,348 | -30,058 | -61,372 | |
| Total operating expenses | -43,709 | -58,619 | -86,997 | -100,089 | -169,176 | |
| EBITDA | 22,150 | -29,965 | 39,893 | -15,836 | 31,999 | |
| Amortization and depreciation | -2,325 | -2,612 | -4,919 | -5,224 | -10,838 | |
| EBIT | 19,826 | -32,577 | 34,975 | -21,060 | 21,161 | |
| Financial revenue | 4 | 1,565 | 201 | 1,010 | 9,934 | 12,650 |
| Financial expenses | 4 | -13,391 | -14,558 | -29,669 | -30,213 | -66,039 |
| Net financial items | -11,826 | -14,357 | -28,659 | -20,279 | -53,390 | |
| Profit/(loss) before tax | 8,000 | -46,934 | 6,316 | -41,339 | -32,228 | |
| Tax (expense) | -3,619 | 2,538 | -5,329 | 393 | -1,774 | |
| Net profit/(loss) after tax | 4,380 | -44,396 | 987 | -40,946 | -34,002 | |
| Attributable to: | ||||||
| Non-controlling interests | -2,771 | -17,722 | -4,730 | -19,438 | -15,871 | |
| Equity holders of the parent company | 7,152 | -26,674 | 5,717 | -21,508 | -18,131 | |
| Earnings per share: basic | 0.024 | -0.144 | 0.020 | -0.120 | -0.099 | |
| Earnings per share: diluted | 0.023 | -0.144 | 0.019 | -0.120 | -0.099 |
| For the quarter end | Year to date | ||||
|---|---|---|---|---|---|
| EUR thousand | 30 Jun 2021 | 30 Jun 2020 | 30 Jun 2021 | 30 Jun 2020 | Full year 2020 |
| Net profit/(loss) after tax | 4,380 | -44,396 | 987 | -40,946 | -34,002 |
| Items that will not be classified subsequently to profit and loss | |||||
| Remeasurement of pension plans | 0 | 0 | 0 | 0 | -58 |
| Items that may be classified subsequently to profit and loss | |||||
| Foreign currency translation differences - foreign operations | -3,433 | 12,006 | 6,429 | -19,963 | -11,278 |
| Other comprehensive income/(loss) afer tax | -3,433 | 12,006 | 6,429 | -19,963 | -11,336 |
| Total comprehensive income for the period | 948 | -32,390 | 7,416 | -60,908 | -45,338 |
| Attributable to: | |||||
| Non-controlling interests | -2,771 | -17,722 | -4,730 | -19,438 | -15,871 |
| Equity holders of the parent company | 3,719 | -14,667 | 12,146 | -41,470 | -29,467 |
| EUR thousand | Note | 30 Jun 2021 | 30 Jun 2020 | Full year 2020 |
|---|---|---|---|---|
| ASSETS | ||||
| Intangible non-current assets | ||||
| Intangible Assets | 19,064 | 21,184 | 19,989 | |
| Goodwill | 55,527 | 54,087 | 54,879 | |
| Deferred tax assets | 7,766 | 11,776 | 7,769 | |
| Tangible non-current assets | ||||
| Property, plant and equipment | 2,509 | 2,787 | 2,530 | |
| Right-of-use assets | 9 | 3,704 | 5,765 | 4,826 |
| Financial non-current assets | ||||
| Purchased debt portfolios | 6 | 1,104,079 | 1,107,257 | 1,124,699 |
| Other non-current receivables | 416 | 530 | 458 | |
| Other non-current investments | 196 | 193 | 196 | |
| Total non-current assets | 1,193,260 | 1,203,579 | 1,215,346 | |
| Current assets | ||||
| Stock of Secured Assets | 7 | 55,012 | 88,625 | 78,786 |
| Accounts Receivable | 5,975 | 6,468 | 7,124 | |
| Other current assets | 10 | 12,832 | 11,797 | 11,645 |
| Restricted cash | 2,909 | 2,891 | 2,946 | |
| Cash and Cash Equivalents | 44,429 | 31,398 | 47,779 | |
| Total current assets | 121,157 | 141,179 | 148,281 | |
| TOTAL ASSETS | 1,314,417 | 1,344,758 | 1,363,627 |
| EUR thousand | Note | 30 Jun 2021 | 30 Jun 2020 | Full year 2020 |
|---|---|---|---|---|
| EQUITY AND LIABILITIES | ||||
| Share Capital | 158,150 | 97,040 | 97,040 | |
| Other paid-in equity | 269,907 | 236,454 | 236,562 | |
| Retained Earnings | -1,956 | -19,354 | -16,036 | |
| Reserves | -9,570 | -24,684 | -15,999 | |
| Non-controlling interests | 12,365 | 73,595 | 74,113 | |
| Total Equity | 428,895 | 363,052 | 375,680 | |
| Non-current Liabilities | ||||
| Interest bearing debt | 8 | 695,658 | 802,240 | 579,282 |
| Deferred tax liabilities | 6,395 | 15,409 | 6,436 | |
| Lease liabilities | 9 | 2,078 | 3,395 | 2,804 |
| Other non-current liabilities | 1,567 | 1,334 | 1,433 | |
| Total non-current liabilities | 705,698 | 822,378 | 589,955 | |
| Current Liabilities | ||||
| Accounts Payable | 6,145 | 3,584 | 6,147 | |
| Current portion of interest bearing debt | 8 | 135,737 | 116,225 | 356,903 |
| Taxes Payable | 16,944 | 9,535 | 12,002 | |
| Lease liabilities | 9 | 1,866 | 2,613 | 2,282 |
| Other current liabilities | 10 | 19,132 | 27,371 | 20,657 |
| Total current liabilities | 179,824 | 159,328 | 397,992 | |
| Total Liabilities | 885,522 | 981,706 | 987,947 | |
| TOTAL EQUITY AND LIABILITIES | 1,314,417 | 1,344,758 | 1,363,627 |
| For the quarter end | Year to date | |||||
|---|---|---|---|---|---|---|
| EUR thousand | Note | 30 Jun 2021 | 30 Jun 2020 | 30 Jun 2021 | 30 Jun 2020 | Full year 2020 |
| Operating activities | ||||||
| Profit/(loss) before tax Taxes paid |
8,000 -127 |
-46,934 -77 |
6,316 -424 |
-41,339 -858 |
-32,228 -5,515 |
|
| Adjustments for: | ||||||
| - Finance income and expenses | 11,826 | 14,357 | 28,659 | 20,279 | 53,390 | |
| - Portfolio amortization and revaluation | 29,330 | 42,127 | 52,802 | 65,713 | 123,179 | |
| - Cost of secured assets sold, incl. Impairment | 14,144 | 32,033 | 24,530 | 42,207 | 52,932 | |
| - Depreciation and amortization | 2,325 | 2,612 | 4,919 | 5,224 | 10,838 | |
| - Calculated cost of employee share options | 68 | 164 | 168 | 471 | 578 | |
| Change in Working capital | -3,328 | 276 | 5,754 | 2,261 | 3,309 | |
| Cash flow from operating activities before NPL and REO investments | 62,236 | 44,557 | 122,723 | 93,958 | 206,483 | |
| Purchase of debt portfolios | 6 | -13,218 | -65,074 | -35,841 | -148,171 | -213,032 |
| Sale of debt portfolio | 6 | 150 | 150 | 300 | 750 | 2,050 |
| Purchase of REO's | 7 | -69 | -134 | -113 | -292 | -399 |
| Net cash flow from operating activities | 49,099 | -20,501 | 87,069 | -53,755 | -4,898 | |
| Investing activities | ||||||
| Purchase of intangible and tangible assets | -1,453 | -1,633 | -2,567 | -3,561 | -6,114 | |
| Interest received | 0 | 1 | 0 | 22 | 25 | |
| Net cash flow from investing activities | -1,453 | -1,632 | -2,567 | -3,539 | -6,089 | |
| Financing activities | ||||||
| Proceeds from borrowings | 8 | 128,440 | 32,526 | 154,490 | 68,222 | 81,631 |
| Repayment of debt | 8 | -165,561 | -5,318 | -250,460 | -69,752 | -84,395 |
| Interest paid | -10,783 | -11,989 | -18,512 | -24,060 | -48,058 | |
| Loan fees paid | 8 | -215 | -4,348 | -19,973 | -4,479 | -4,503 |
| New Share issues | 0 | 0 | 50,792 | 50,767 | 50,767 | |
| Proceeds (repayments) from (to) Non-controlling interests | -2,225 | -1,132 | -3,700 | -3,944 | -6,994 | |
| Cost related to share issues | 0 | 0 | -1,460 | -959 | -959 | |
| Net cash flow from financing activities | -50,343 | 9,739 | -88,823 | 15,795 | -12,512 | |
| Net change in cash and cash equivalents | -2,697 | -12,394 | -4,321 | -41,499 | -23,499 | |
| Cash and cash equivalents at the beginning of period | 50,052 | 48,808 | 50,725 | 75,395 | 75,396 | |
| Currency translation | -17 | -2,125 | 934 | 393 | -1,172 | |
| Cash and cash equivalents at end of period, incl. restricted funds | 47,338 | 34,289 | 47,338 | 34,289 | 50,725 |
| Equity related to the shareholders of the Parent Company | |||||||
|---|---|---|---|---|---|---|---|
| Restricted | Non-restricted | ||||||
| EUR thousand | Share Capital |
Other paid in equity |
Reserves | Retained earnings and profit for the year |
Total | Non controlling interest |
Total Equity |
| Closing balance on 31 Dec 2019 | 81,338 | 201,879 | -4,721 | 2,153 | 280,648 | 96,977 | 377,626 |
| Result of the period | -18,131 | -18,131 | -15,871 | -34,002 | |||
| Remeasurement of pension plans | -58 | -58 | -58 | ||||
| Foreign currency translation differences - foreign operations | -11,278 | -11,278 | -11,278 | ||||
| Total comprehensive income for the period | 0 | 0 | -11,278 | -18,190 | -29,467 | -15,871 | -45,338 |
| Proceeds from Non-controlling interests | 0 | -6,994 | -6,994 | ||||
| New Share issues | 15,703 | 35,064 | 50,767 | 50,767 | |||
| Cost related to share issues | -959 | -959 | -959 | ||||
| Share based payment | 578 | 578 | 578 | ||||
| Closing balance on 31 Dec 2020 | 97,040 | 236,562 | -15,999 | -16,036 | 301,566 | 74,113 | 375,680 |
| Result of the period | 5,717 | 5,717 | -4,730 | 987 | |||
| Foreign currency translation differences - foreign operations | 6,429 | 6,429 | 6,429 | ||||
| Total comprehensive income for the period | 0 | 0 | 6,429 | 5,717 | 12,146 | -4,730 | 7,416 |
| Proceeds from Non-controlling interests | 0 | -3,701 | -3,701 | ||||
| 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 | 168 | 168 | 168 | ||||
| Closing balance on 30 Jun 2021 | 158,150 | 269,907 | -9,570 | -1,956 | 416,530 | 12,364 | 428,895 |
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 portfolio.
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 2020. 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 2020.
In preparing these interim financial statements, management has made judgements and estimates that effects the application and 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 comprehensive discussed in the Group Annual report for the Financial Year 2020, which is available on Axactor's website: www.axactor.com.
The significant judgements made by managements 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. Also, the effect of Covid-19 on expectations of future events that are believed to be reasonable under the circumstances, has been described in Annual report. Management continues to assess the data and information available at the reporting data.
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 risks. Following the Covid-19 pandemic, 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 and the industry as such is also negatively impacted by the ongoing Covid-19 pandemic. 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. Nevertheless, the long-term effects remain uncertain. For a more elaborate discussion on the aforementioned risks one is referred to the Group's Annual Report for the Financial Year 2020, which is available on Axactor's website: www.axactor.com (Note 3 of the Group financial statement).
The Group monitors its risk of a shortage of funds using cash flow forecasts regularly. The driver of negative cash flow from operating activities is investments in NPL portfolios. The Group had cash and cash equivalent of EUR 47.3 million at 30 June 2021 (EUR 34.3 million). The following tables detail the Group's remaining contractual quarterly maturity for its liabilities based on the most likely date on which cash flows can be required to pay.
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 tables have been drawn based on the undiscounted cash flows of financial liabilities based on the most likely date on which the Group can be required to pay. 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 most likely date on which the Group may be required to pay.
The amounts presented are subject to change dependent on a change in variable interest rates.
| EUR thousand | Q3-21 | Q4-21 | Q1-22 | Q2-22 | 1-2 years | 2-4 years | 4+ years | Total |
|---|---|---|---|---|---|---|---|---|
| Forward flow NPL agreements, non-cancellable 1)2) | 27,871 | 20,146 | 19,118 | 17,288 | 52,538 | 0 | 0 | 136,961 |
| Forward flow NPL agreements, cancellable 1)2)3) | 0 | 8,201 | 7,367 | 5,300 | 3,000 | 0 | 0 | 23,868 |
| Interest bearing loans DNB/Nordea | 4,061 | 4,061 | 4,284 | 4,284 | 55,248 | 442,395 | 0 | 514,333 |
| Interest bearing loans Italy | 2,522 | 2,170 | 1,980 | 2,105 | 480 | 200 | 32,024 | 41,481 |
| Bond loan | 3,539 | 3,578 | 3,578 | 3,500 | 14,194 | 210,694 | 0 | 239,083 |
| Bond loan / Obligation | 2,301 | 2,326 | 2,326 | 2,250 | 9,226 | 149,316 | 0 | 167,744 |
| Other non-current liabilities | 0 | 0 | 0 | 0 | 0 | 0 | 1,567 | 1,567 |
| Accounts payable | 6,145 | 0 | 0 | 0 | 0 | 0 | 0 | 6,145 |
| Other current liabilities | 15,632 | 883 | 2,618 | 0 | 0 | 0 | 0 | 19,132 |
| Total | 62,071 | 41,364 | 41,270 | 34,727 | 134,687 | 802,605 | 33,591 | 1,150,315 |
1) Forward flow NPL agreements split by country:
2) Expected cash flows. Cash flows are limited to EUR 240.4 million by contracted capex limits. There is one minor contracts without contracted limits
3) Cancellable with three months notice
The table above shows an estimated calculation of repayment on interest bearing loans of EUR 171.3 million for the next 12 months. The calculation is made under the assumption that no new portfolios are acquired and that Axactor therefore partly need to repay the facility to stay below the LTV covenant (Loan to Value) in order to match portfolio amortization and decrease in portfolio value. The same mechanism as for amortization applies for any impairment situation. The table above does not reflect any repayments based on impairment.
The ERC represent the expected gross collection on the NPL portfolios and can be broken down per year as follows (year 1 means the first year from the reporting date):
| EUR thousand | Estimated remaining collection (ERC , amortization and yield) next four quarters | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Year | Q3 2021 | Q4 2021 | Q1 2022 | Q2 2022 | Year 1 | |||||
| ERC | 71,738 | 80,153 | 67,617 | 67,742 | 287,250 | |||||
| Amortization | 31,083 | 40,823 | 29,885 | 31,162 | 132,953 | |||||
| Yield | 40,655 | 39,330 | 37,732 | 36,580 | 154,297 |
| 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 | 287,250 | 247,905 | 218,625 | 193,670 | 173,112 | 155,096 | 139,417 | 125,768 | 113,669 | 102,770 | 92,692 | 84,251 | 75,590 | 59,033 | 50,433 | 2,119,282 |
| Amortization | 132,953 | 112,478 | 99,247 | 88,138 | 79,991 | 73,301 | 67,995 | 64,019 | 61,054 | 58,906 | 57,282 | 57,165 | 56,812 | 48,101 | 46,637 | 1,104,079 |
| Yield | 154,297 | 135,427 | 119,378 | 105,532 | 93,121 | 81,795 | 71,422 | 61,749 | 52,615 | 43,864 | 35,410 | 27,086 | 18,778 | 10,932 | 3,796 | 1,015,203 |
As the Covid-19 situation will continue to impact the financials in 2021, the Group proceeds to ensure a satisfactory liquidity situation.
Germany 57 %
Norway 40 % Finland 3 %
Axactor delivers credit management services and the Group's revenue is derived from the following three operating segments: Non-performing loans (NPL), Third-party collection (3PC) and Real estate owned (REO). Axactor's operations are managed through these three 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. They apply both amicable and legal proceedings in order to collect the Non-performing loans, and typically receive a commission for these services. They also help creditors to prepare documentation for future legal proceedings against debtors, and for this they typically receive a fixed fee.
The REO segment relates to the investments done real estate assets held for sale.
Axactor reports its business through reporting segment which corresponds 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.
| EUR thousand | NPL | 3PC | REO | Eliminations/ Not allocated |
Total |
|---|---|---|---|---|---|
| Collection on own portfolios | 69,025 | 0 | 13,260 | 0 | 82,286 |
| Portfolio amortization and revaluation | -29,330 | 0 | 0 | 0 | -29,330 |
| Other operating income: | |||||
| -Change in forward flow derivatives | 1 | 0 | 0 | 0 | 1 |
| -Other operating revenue and other income | 0 | 12,899 | 0 | 3 | 12,902 |
| Total income | 39,697 | 12,899 | 13,260 | 3 | 65,859 |
| REO cost of sales | 0 | 0 | -14,144 | 0 | -14,144 |
| Impairment REOs | 0 | 0 | 0 | 0 | 0 |
| Direct operating expenses | -8,284 | -8,990 | -1,599 | 0 | -18,874 |
| Contribution margin | 31,413 | 3,909 | -2,483 | 3 | 32,842 |
| SG&A, IT and corporate cost | -10,692 | -10,692 | |||
| EBITDA | 22,150 | ||||
| Amortization and depreciation | -2,325 | -2,325 | |||
| EBIT | 19,826 | ||||
| Total operating expenses | -8,284 | -8,990 | -15,743 | -10,692 | -43,709 |
| CM1 Margin | 79.1 % | 30.3 % | -18.7 % | na | 49.9 % |
| EBITDA Margin | 33.6 % | ||||
| Opex ex SG&A, IT and corp.cost / Gross revenue | 12.0 % | 69.7 % | 118.7 % | na | 34.7 % |
| SG&A, IT and corporate cost / Gross revenue | 11.2 % |
| EUR thousand | NPL | 3PC | REO | Eliminations/ Not allocated |
Total |
|---|---|---|---|---|---|
| Collection on own portfolios | 54,491 | 0 | 6,564 | 0 | 61,054 |
| Portfolio amortization and revaluation | -42,127 | 0 | 0 | 0 | -42,127 |
| Other operating income: | |||||
| -Change in forward flow derivatives | 0 | 0 | 0 | 0 | 0 |
| -Other operating revenue and other income | 0 | 9,655 | 0 | 71 | 9,726 |
| Total income | 12,364 | 9,655 | 6,564 | 71 | 28,654 |
| REO cost of sales | 0 | 0 | -6,028 | 0 | -6,028 |
| Impairment REOs | 0 | 0 | -26,005 | 0 | -26,005 |
| Direct operating expenses | -8,320 | -7,746 | -1,490 | 0 | -17,556 |
| Contribution margin | 4,044 | 1,909 | -26,958 | 71 | -20,934 |
| SG&A, IT and corporate cost | -9,031 | -9,031 | |||
| EBITDA | -29,965 | ||||
| Amortization and depreciation | -2,612 | -2,612 | |||
| EBIT | -32,577 | ||||
| Total operating expenses | -8,320 | -7,746 | -33,522 | -9,031 | -58,619 |
| CM1 Margin | 32.7 % | 19.8 % | -410.7 % | na | -73.1 % |
| EBITDA Margin | -104.6 % | ||||
| Opex ex SG&A, IT and corp.cost / Gross revenue | 15.3 % | 80.2 % | 510.7 % | na | 70.1 % |
| SG&A, IT and corporate cost / Gross revenue | 12.8 % |
| EUR thousand | NPL | 3PC | REO | Eliminations/ Not allocated |
Total |
|---|---|---|---|---|---|
| Collection on own portfolios | 132,360 | 0 | 23,256 | 0 | 155,616 |
| Portfolio amortization and revaluation | -52,802 | 0 | 0 | 0 | -52,802 |
| Other operating income: | |||||
| -Change in forward flow derivatives | -374 | 0 | 0 | 0 | -374 |
| -Other operating revenue and other income | 0 | 24,448 | 0 | 2 | 24,451 |
| Total income | 79,184 | 24,448 | 23,256 | 2 | 126,891 |
| REO cost of sales | 0 | 0 | -24,487 | 0 | -24,487 |
| Impairment REOs | 0 | 0 | -42 | 0 | -42 |
| Direct operating expenses | -17,310 | -19,863 | -3,291 | 0 | -40,464 |
| Contribution margin | 61,874 | 4,585 | -4,564 | 2 | 61,897 |
| SG&A, IT and corporate cost | -22,004 | -22,004 | |||
| EBITDA | 39,893 | ||||
| Amortization and depreciation | -4,919 | -4,919 | |||
| EBIT | 34,975 | ||||
| Total operating expenses | -17,310 | -19,863 | -27,821 | -22,004 | -86,997 |
| CM1 Margin | 78.1 % | 18.8 % | -19.6 % | na | 48.8 % |
| EBITDA Margin | 31.4 % | ||||
| Opex ex SG&A, IT and corp.cost / Gross revenue | 13.1 % | 81.2 % | 119.6 % | na | 36.1 % |
| SG&A, IT and corporate cost / Gross revenue | 12.2 % |
| EUR thousand | NPL | 3PC | REO | Eliminations/ Not allocated |
Total |
|---|---|---|---|---|---|
| Collection on own portfolios | 108,645 | 0 | 18,087 | 0 | 126,732 |
| Portfolio amortization and revaluation | -65,713 | 0 | 0 | 0 | -65,713 |
| Other operating income: | |||||
| -Change in forward flow derivatives | 0 | 0 | 0 | 0 | 0 |
| -Other operating revenue and other income | 0 | 23,135 | 0 | 99 | 23,234 |
| Total income | 42,932 | 23,135 | 18,087 | 99 | 84,253 |
| REO cost of sales | 0 | 0 | -15,100 | 0 | -15,100 |
| Impairment REOs | 0 | 0 | -27,107 | 0 | -27,107 |
| Direct operating expenses | -17,791 | -16,435 | -3,313 | 0 | -37,539 |
| Contribution margin | 25,141 | 6,700 | -27,434 | 99 | 4,506 |
| SG&A, IT and corporate cost | -20,342 | -20,342 | |||
| EBITDA | -15,836 | ||||
| Amortization and depreciation | -5,224 | -5,224 | |||
| EBIT | -21,060 | ||||
| Total operating expenses | -17,791 | -16,435 | -45,521 | -20,342 | -100,089 |
| CM1 Margin | 58.6 % | 29.0 % | -151.7 % | na | 5.3 % |
| EBITDA Margin | -18.8 % | ||||
| Opex ex SG&A, IT and corp.cost / Gross revenue | 16.4 % | 71.0 % | 251.7 % | na | 53.2 % |
| SG&A, IT and corporate cost / Gross revenue | 13.6 % |
| EUR thousand | NPL | 3PC | REO | Eliminations/ Not allocated |
Total |
|---|---|---|---|---|---|
| Collection on own portfolios | 236,459 | 0 | 40,407 | 0 | 276,866 |
| Portfolio amortization and revaluation | -123,179 | 0 | 0 | 0 | -123,179 |
| Other operating income: | |||||
| -Change in forward flow derivatives | -826 | 0 | 0 | 0 | -826 |
| -Other operating revenue and other income | 0 | 48,290 | 0 | 24 | 48,314 |
| Total income | 112,454 | 48,290 | 40,407 | 24 | 201,175 |
| REO cost of sales | 0 | 0 | -36,818 | 0 | -36,818 |
| Impairment REOs | 0 | 0 | -16,114 | 0 | -16,114 |
| Direct operating expenses | -37,174 | -30,938 | -8,433 | 0 | -76,546 |
| Contribution margin | 75,280 | 17,352 | -20,958 | 24 | 71,698 |
| SG&A, IT and corporate cost | -39,699 | -39,699 | |||
| EBITDA | 31,999 | ||||
| Amortization and depreciation | -10,838 | -10,838 | |||
| EBIT | 21,161 | ||||
| Total operating expenses | -37,174 | -30,938 | -61,365 | -39,699 | -169,176 |
| CM1 Margin | 66.9 % | 35.9 % | -51.9 % | na | 35.6 % |
| EBITDA Margin | 15.9 % | ||||
| Opex ex SG&A, IT and corp.cost / Gross revenue | 15.7 % | 64.1 % | 151.9 % | na | 39.8 % |
| SG&A, IT and corporate cost / Gross revenue | 12.2 % |
| For the quarter end | Year to date | ||||
|---|---|---|---|---|---|
| EUR thousand | 30 Jun 2021 | 30 Jun 2020 | 30 Jun 2021 | 30 Jun 2020 | Full year 2020 |
| Financial revenue | |||||
| Interest on bank deposits | 0 | 1 | 0 | 22 | 25 |
| Exchange gains realized | 103 | 150 | 985 | 247 | 705 |
| Net unrealized exchange gain | 1,459 | 47 | 0 | 9,655 | 11,901 |
| Other financial income | 3 | 4 | 24 | 10 | 20 |
| Total financial revenue | 1,565 | 201 | 1,010 | 9,934 | 12,650 |
| Financial expenses | |||||
| Interest expense on borrowings 1) | -13,253 | -13,947 | -26,783 | -28,265 | -63,554 |
| Exchange losses realized | -66 | -131 | -203 | -977 | -1,153 |
| Net unrealized exchange loss 2) | 0 | 0 | -2,526 | 0 | 0 |
| Other financial expenses 3) | -72 | -480 | -156 | -970 | -1,332 |
| Total financial expenses | -13,391 | -14,558 | -29,669 | -30,213 | -66,039 |
| Net financial items | -11,826 | -14,357 | -28,659 | -20,279 | -53,390 |
1) Full year 2020 includes expensed capitalized loan fees of EUR 7.1 million related to the refinancing. See Note 8 'Borrowings and other interst-bearing debt' for more information
2) Relates to unrealised exchange loss on intercompany loans
3) Includes interest from negative bank accounts in group multicurrency cash pool
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 and information about its non-current assets by location of assets are detailed below.
| Total income | For the quarter end | Year to date | ||||
|---|---|---|---|---|---|---|
| EUR thousand | 30 Jun 2021 | 30 Jun 2020 | 30 Jun 2021 | 30 Jun 2020 | Full year 2020 | |
| Finland | 3,722 | 2,942 | 7,656 | 6,349 | 10,710 | |
| Germany | 8,068 | 7,084 | 16,629 | 15,465 | 31,964 | |
| Italy | 4,589 | 1,283 | 9,428 | 4,642 | 14,424 | |
| Norway | 10,832 | 6,373 | 20,566 | 16,356 | 37,949 | |
| Spain | 28,940 | 10,562 | 54,310 | 36,483 | 87,962 | |
| Sweden | 9,709 | 410 | 18,301 | 4,958 | 18,165 | |
| Total | 65,859 | 28,654 | 126,891 | 84,253 | 201,175 |
The result from the fair value calculation of the derivative (forward flow agreements) appears in the line "other income" in the Profit and loss" statement. The fair value adjustment of both realized and unrealized derivatives are EUR 1 during the period.
Interest income from purchased loan portfolios & net gain /(loss) purchased loan portfolios are represented by Yield, and the accumulative of CU1, CU2 and CU2 tail.
| EUR thousand | Yield 1) | CU1 2) | CU2 3) | CU2 tail 4) | For the quarter end 30 Jun 2021 |
|---|---|---|---|---|---|
| Finland | 3,750 | -139 | -79 | 0 | 3,531 |
| Germany | 5,139 | 43 | 0 | 111 | 5,293 |
| Italy | 4,079 | -67 | 15 | 31 | 4,058 |
| Norway | 9,240 | -657 | -80 | 411 | 8,914 |
| Spain | 10,993 | -133 | -2,638 | 279 | 8,501 |
| Sweden Total |
8,578 41,779 |
280 -674 |
-60 -2,841 |
600 1,432 |
9,398 39,695 |
| For the quarter end | |||||
| EUR thousand | Yield 1) | CU1 2) | CU2 3) | CU2 tail 4) | 30 Jun 2020 |
| Finland | 3,663 | -1,002 | -95 | 0 | 2,566 |
| Germany | 5,898 | -1,034 | -196 | 152 | 4,820 |
| Italy | 4,310 | -356 | -3,328 | 73 | 699 |
| Norway | 7,190 | 931 | -4,325 | 456 | 4,252 |
| Spain | 11,980 | 1,015 | -13,540 | 243 | -303 |
| Sweden | 7,470 | -660 | -7,021 | 541 | 330 |
| Total | 40,511 | -1,107 | -28,506 | 1,465 | 12,364 |
| EUR thousand | Yield 1) | CU1 2) | CU2 3) | CU2 tail 4) | Year to date 30 Jun 2021 |
| Finland | 7,497 | -304 | 16 | 0 | 7,209 |
| Germany | 10,444 | 450 | 0 | 225 | 11,119 |
| Italy | 8,240 | 52 | 27 | 61 | 8,380 |
| Norway Spain |
18,028 22,252 |
-2,224 -727 |
377 -4,048 |
816 565 |
16,997 18,042 |
| Sweden | 17,216 | -446 | -171 | 1,211 | 17,810 |
| Total | 83,677 | -3,200 | -3,799 | 2,879 | 79,557 |
| EUR thousand | Yield 1) | CU1 2) | CU2 3) | CU2 tail 4) | Year to date 30 Jun 2020 |
| Finland | 7,248 | -1,577 | -95 | 0 | 5,577 |
| Germany | 11,677 | -1,377 | -50 | 304 | 10,554 |
| Italy | 8,510 | -1,946 | -3,335 | 148 | 3,377 |
| Norway | 13,854 | 1,164 | -4,284 | 923 | 11,657 |
| Spain | 24,511 | -2,382 | -15,683 | 493 | 6,940 |
| Sweden | 14,038 | -3,241 | -7,028 | 1,058 | 4,827 |
| Total | 79,838 | -9,358 | -30,474 | 2,926 | 42,932 |
| EUR thousand | Yield 1) | CU1 2) | CU2 3) | CU2 tail 4) | Full year 2020 |
| Finland | 14,727 | -2,155 | -3,218 | 0 | 9,353 |
| Germany | 23,015 | -2,260 | 355 | 595 | 21,705 |
| Italy | 16,996 | -1,776 | -3,559 | 275 | 11,936 |
| Norway | 29,703 | 1,997 | -4,032 | 1,775 | 29,443 |
| Spain | 47,790 | -2,427 | -23,574 | 978 | 22,767 |
| Sweden | 30,864 | -6,325 | -8,728 | 2,266 | 18,076 |
| Total | 163,093 | -12,946 | -42,755 | 5,888 | 113,280 |
1) The effective interest rate on 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 | Year to date | ||||
|---|---|---|---|---|---|
| EUR thousand | 30 Jun 2021 | 30 Jun 2020 | 30 Jun 2021 | 30 Jun 2020 | Full year 2020 |
| Balance at start of period | 1,123,596 | 1,064,618 | 1,124,699 | 1,041,919 | 1,041,919 |
| Acquisitions during the period 2) | 12,317 | 62,014 | 28,438 | 151,751 | 208,250 |
| Collection | -69,025 | -54,491 | -132,360 | -108,645 | -236,459 |
| Yield - Interest income from purchased loan portfolios | 41,779 | 40,511 | 83,677 | 79,838 | 163,093 |
| Net gain/(loss) purchased loan portfolios 1) | -2,084 | -28,147 | -4,120 | -36,906 | -49,813 |
| Repossession of secured NPL to REO | -623 | -177 | -642 | -1,500 | -2,279 |
| Deliveries on forward flow contracts | -976 | 0 | -976 | 0 | 0 |
| Disposals 1) | 0 | 0 | 0 | -384 | -403 |
| Translation difference | -904 | 22,929 | 5,362 | -18,817 | 392 |
| Balance at end of period | 1,104,079 | 1,107,257 | 1,104,079 | 1,107,257 | 1,124,699 |
| Payments during the period for investments in purchased debt amounted to EUR |
13,218 | 65,074 | 35,841 | 148,171 | 213,032 |
| Deferred payment | -901 | -3,060 | 2,883 | 13,866 | 5,504 |
| 1) Gain on disposals is netted in P&L as 'Net gain/(loss) purchased loan portfolios' 2) Reconciliation of credit impaired acquisitions during the year; |
| Nominal value acquired portfolios | 22,668 | 103,944 | 51,946 | 295,595 | 424,062 |
|---|---|---|---|---|---|
| Expected credit losses at acquisition | -10,351 | -41,930 | -23,508 | -143,844 | -215,812 |
| Credit impaired acquisitions during the period | 12,317 | 62,014 | 28,438 | 151,751 | 208,250 |
For an elaborate description of Axactor's accounting principles for Purchased Debt, see Note 2, and description of revenue recognition and fair value estimation, see Note 4, in the Group's Annual Report for the Financial Year 2020.
Non-performing loans, consists 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 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.
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 the 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 bulk of the non-performing loans are unsecured. Only an immaterial part of the loans, approximately 2% of the loans, are secured by a property object.
| Market | Book value | Market specific | All markets |
|---|---|---|---|
| Finland Norway Sweden Germany |
117,950 245,267 260,822 118,515 |
· Level of settlements vs payment agreements · Efficient legal system · Interest charges · High recovery rate · Interest level · House pricing |
· Documentation of claims · Operational efficiency · Economic growth · Unemployment rate · Debtor contact information |
| Italy Spain |
118,247 243,278 |
· Discounts · Economic growth · Tracing activity · Legal activities costly and time consuming |
|
| Total | 1,104,079 |
For additional information, see Note 2.13.1 in the Group's Annual Report for the Financial Year 2020.
Axactor has incorporated into the ERC the effect of the economic factors and conditions that is expected to influence collections going forward, based on the continued Covid-19 crisis and its development. 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.
| For the quarter end | Year to date | ||||
|---|---|---|---|---|---|
| EUR thousand | 30 Jun 2021 | 30 Jun 2020 | 30 Jun 2021 | 30 Jun 2020 | Full year 2020 |
| Acquisition cost at 1 Jan | 68,463 | 120,346 | 78,786 | 129,040 | 129,040 |
| Acquisitions during the year 1) | 69 | 134 | 113 | 292 | 399 |
| Repossession of secured NPL | 623 | 177 | 642 | 1,500 | 2,279 |
| Cost of sold secured assets | -14,144 | -6,028 | -24,487 | -15,100 | -36,818 |
| Total acquisition cost | 55,012 | 114,630 | 55,054 | 115,732 | 94,901 |
| Impairment | 0 | -26,005 | -42 | -27,107 | -16,114 |
| Balance at end of period | 55,012 | 88,625 | 55,012 | 88,625 | 78,786 |
| Number of assets | 2,039 | 3,489 | 2,694 |
1) Capex includes expenses for registry, inscription and upgrades to existing assets in inventory. No new REOs are acquired.
REO assets are held for sale and therefore considered as stock of secured assets in accordance to IAS 2 Inventories, valued at the lower of cost price and net realizable value.
Axactor SE has provided an interest-bearing loan to Reolux Holding Sarl with an outstanding balance of EUR 44.7 million at the end of Q2 2021. The interest rate is 7% per annum. There is no maturity date on the loan. Reolux Holding Sarl will use its cash flow from sale of REO assets to pay down the loan.
| EUR thousand | Currency | Facility limit | Nominal value | Capitalized loan fees |
Accrued interest |
Carrying amount, EUR |
Interest coupon | Maturity |
|---|---|---|---|---|---|---|---|---|
| Facility | ||||||||
| ISIN NO 0010914666 | EUR | 200,000 | -5,855 | 3,033 | 197,179 | 3m EURIBOR+700pbs | 12.01.2024 | |
| Total Bond loan | 197,179 | |||||||
| Revolving credit facility DNB/Nordea | EUR | 620,000 | 203,289 | -11,036 | 1 | 192,254 | EURIBOR+ margin | 22.12.2023 |
| (multiple currency facility) | NOK | 38,224 | 38,224 | NIBOR+ margin | 22.12.2023 | |||
| SEK | 222,596 | 222,596 | STIBOR+ margin | 22.12.2023 | ||||
| Total Credit facilities | 453,074 | |||||||
| Geveran / ISIN NO 0010924715 | EUR | na | 140,000 | 0 | 1,328 | 141,328 | 6.500 % | 13.07.2024 |
| Italian banks | EUR | na | 39,519 | 0 | 296 | 39,814 | EURIBOR+ margin | 2021-2026 |
| Total Other borrowings | 181,142 | |||||||
| Total Borrowings at end of period | 831,395 | |||||||
| whereof: | ||||||||
| Non-current borrowings | 695,658 | |||||||
| Current borrowings | 135,737 | |||||||
| of which in currency: | ||||||||
| NOK | 38,224 | |||||||
| SEK | 222,596 | |||||||
| EUR | 570,575 | |||||||
| EUR thousand | Bond loan | Credit facilities | Other borrowings |
Total Borrowings |
|---|---|---|---|---|
| Balance at 1 Jan | 200,283 | 530,278 | 205,625 | 936,186 |
| Proceeds from loans and borrowings | 11,050 | 143,440 | 0 | 154,490 |
| Repayment of loans and borrowings | -11,050 | -212,473 | -26,937 | -250,460 |
| Loan fees | -6,888 | -13,087 | 2 | -19,973 |
| Total changes in financial cash flow | -6,888 | -82,120 | -26,935 | -115,943 |
| Change in accrued interest | 2,722 | -81 | 1,288 | 3,930 |
| Amortization capitalized loan fees | 1,062 | 2,139 | 1,165 | 4,365 |
| Currency translation differences | 0 | 2,857 | 0 | 2,857 |
| Total Borrowings at end of period | 197,179 | 453,073 | 181,144 | 831,395 |
| Estimated future cash flow within | |||||||
|---|---|---|---|---|---|---|---|
| EUR thousand | Currency | Carrying amount |
Total future cashflow |
6 months or less | 6-12 months | 1-2 years | 2-5 years |
| ISIN NO 0010914666 | EUR | 197,179 | 203,033 | 3,033 | 0 | 0 | 200,000 |
| Total Bond loan | 197,179 | 203,033 | 3,033 | 0 | 0 | 200,000 | |
| Revolving credit facility DNB/Nordea | |||||||
| (multiple currency facility) | EUR/NOK/SEK | 453,074 | 464,109 | 67,799 | 57,347 | 102,873 | 236,091 |
| Total Credit facilities | 453,074 | 464,109 | 67,799 | 57,347 | 102,873 | 236,091 | |
| Geveran / ISIN NO 0010924715 | EUR | 141,328 | 141,328 | 1,328 | 0 | 0 | 140,000 |
| Italian banks | EUR | 39,814 | 39,814 | 6,202 | 6,479 | 9,140 | 17,993 |
| Total Other borrowings | 181,142 | 181,142 | 7,530 | 6,479 | 9,140 | 157,993 | |
| Total Borrowings at end of period | 831,395 | 848,285 | 78,362 | 63,826 | 112,013 | 594,084 |
The maturity calculation is made under the assumption that no new portfolios are acquired and that Axactor therefore partly need to repay the facility to stay below the LTV covenant (Loan to Value) in order to match portfolio amortization and decrease in portfolio value. The same mechanism as for amortization applies for any impairment situation. The table above does not reflect any repayments based on impairment.
During the fourth quarter 2020, a refinancing of the AXA01 bond loan was announced. A new bond, AXACTOR02 (ISIN NO 0010914666), was fully subscribed in December 2020 with the majority of AXA01 holders agreeing to roll the debt into the new bond. AXACTOR02 is placed on similar terms as AXA01, at 7.00% interest, the same covenant structure, and a maturity date in January 2024.
The AXA01 bonds that were not rolled into AXACTOR02 was liquidated during the first quarter 2021.
The bonds are listed on Oslo Exchange.
The following financial covenants applies:
During the fourth quarter 2020, Axactor announced that they will acquire the minority stake in Axactor Invest I, as well as the remaining outstanding A-notes. The transaction has been settled in the first quarter by a conversion to shares in Axactor SE. The class B-notes of EUR 140 million has been settled during first quarter, funded by a new bond loan full subscribed by Geveran to Axactor SE of the same amount. The new bond is placed at 6.50% interest, with a maturity date in July 2024.
Following the announcement that Axactor SE has acquired the minority stake in Axactor Invest I, as well as the remaining outstanding A-notes, the two facility agreements with DNB Bank ASA and Nordea Bank AB have been merged into one facility agreement of EUR 545 million, with an additional 75 million in the form of accordion options. The loan carries a variable interest rate based on the interbank rate in each currency with a margin.
Under the terms of this debt facility the group is required to comply with the following financial covenants:
The new loan agreement was signed in Q4 2020 with effective date in January 2021. The maturity table above reflects the projected repayment schedule for the portfolios owned as of end of Q1 2021. The maturity date for the new facility is January 2024.
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.
Italian subsidiaries together as well as the REO Holding company in Luxembourg are not a part of the agreement nor the security arrangement.
In August 2018, Reolux Holding S.à.r.l signed a EUR 96 million senior secured term loan facility with Nomura International plc ("Nomura") to refinance Reolux's existing Spanish Real Estate Owned (REO) investments. The facility was amended in September 2019 to facilitate new Spanish Real Estate Owned (REO) investments.
As of Q2 2021 the bond has been repaid in full.
The facilities of the Italian banks relate to different facilities and agreements with several Italian banks. The loans carry variable interest rates based on the interbank rate with a margin. Some of the loans are secured with collaterals worth EUR 33 million.
| EUR thousand | Buildings | Vehicles | Other | Total |
|---|---|---|---|---|
| Right-of-use assets per 1 Jan 2020 | 5,039 | 541 | 267 | 5,846 |
| New leases | 1,421 | 780 | 0 | 2,201 |
| Depreciation of the year | -2,358 | -502 | -187 | -3,048 |
| Disposals | -94 | -18 | 0 | -112 |
| Currency exchange effects | -58 | -3 | 0 | -61 |
| Right-of-use assets per 1 Jan 2021 | 3,949 | 797 | 80 | 4,826 |
| New leases | 429 | -46 | 0 | 383 |
| Depreciation of the year | -1,152 | -182 | -74 | -1,408 |
| Disposals | -67 | -38 | -4 | -110 |
| Currency exchange effects | 12 | 1 | 0 | 13 |
| Carrying amount of right-of-use assets, end of period | 3,171 | 532 | 1 | 3,704 |
| Remaining lease term | 1-6 years | 1-4 years | 1-3 years | |
| Depreciation method | Linear | Linear | Linear |
| EUR thousand | 30 Jun 2021 | 30 Jun 2020 | Full year 2020 |
|---|---|---|---|
| Undiscounted lease liabilities and maturity of cash outflow | |||
| < 1 year | 2,024 | 2,873 | 2,496 |
| 1-2 years | 1,171 | 1,642 | 1,396 |
| 2-3 years | 702 | 1,026 | 1,027 |
| 3-4 years | 216 | 644 | 368 |
| 4-5 years | 67 | 226 | 125 |
| > 5 years | 45 | 112 | 78 |
| Total undiscounted lease liabilities, end of period | 4,225 | 6,523 | 5,492 |
| Discount element | -282 | -515 | -405 |
| Total discounted lease liabilities, end of period | 3,943 | 6,008 | 5,086 |
Changes in the Forward flow agreements is shown below. For additional information, see Note 2.13.2 in Group Annual report for the Financial Year 2020.
| EUR thousand | 30 Jun 2021 | 30 Jun 2020 | Full year 2020 |
|---|---|---|---|
| Opening balance at 1 Jan | -834 | 0 | 0 |
| Deliveries | 976 | 0 | 0 |
| Value change | -374 | 0 | -826 |
| Translation difference | -14 | 0 | -8 |
| Closing balance | -245 | 0 | -834 |
The changes in forward flow derivatives is included in 'Other current assets' and 'Other current liabilities' in balance sheet;
| EUR thousand | 30 Jun 2021 | 30 Jun 2020 | Full year 2020 |
|---|---|---|---|
| Forward flow derivatives, asset | 0 | 0 | 257 |
| Forward flow derivatives, liability | -246 | 0 | -1,091 |
| Closing balance | -246 | 0 | -834 |
| Number of shares | Share capital (EUR) |
|
|---|---|---|
| At 31 Dec 2019 | 155,395,464 | 81,337,590 |
| New share issues, Feb | 30,000,000 | 15,702,696 |
| 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 30 Jun 2021 | 302,145,464 | 158,149,942 |
| Name | Shareholding | % Share |
|---|---|---|
| Geveran Trading Co Ltd | 133,251,495 | 44.1 % |
| Torstein Ingvald Tvenge | 10,000,000 | 3.3 % |
| Ferd AS | 7,864,139 | 2.6 % |
| Verdipapirfondet Nordea Norge Verd | 4,024,699 | 1.3 % |
| VPF Dnb Am Norske Aksjer | 3,301,597 | 1.1 % |
| Verdipapirfondet Dnb Norge | 3,048,034 | 1.0 % |
| Nordnet Livsforsikring AS | 2,511,348 | 0.8 % |
| Skandinaviska Enskilda Banken AB | 2,500,000 | 0.8 % |
| Gvepseborg AS | 2,018,694 | 0.7 % |
| Endre Rangnes | 2,017,000 | 0.7 % |
| Stavern Helse Og Forvaltning AS | 2,000,000 | 0.7 % |
| Nordnet Bank AB | 1,681,918 | 0.6 % |
| Alpette AS | 1,661,643 | 0.5 % |
| Verdipapirfondet Nordea Avkastning | 1,549,528 | 0.5 % |
| Verdipapirfondet Klp Aksjenorge IN | 1,541,276 | 0.5 % |
| Velde Holding AS | 1,400,000 | 0.5 % |
| Cam AS | 1,312,000 | 0.4 % |
| The Bank Of New York Mellon Sa/Nv | 1,287,582 | 0.4 % |
| Verdipapirfondet Nordea Kapital | 1,250,037 | 0.4 % |
| Andres Lopez Sanchez | 1,177,525 | 0.4 % |
| David Martin Ibeas | 1,177,525 | 0.4 % |
| Skandinaviska Enskilda Banken AB | 1,144,420 | 0.4 % |
| Svein Dugstad | 1,094,187 | 0.4 % |
| Nordea Bank AB | 1,089,229 | 0.4 % |
| Latino Invest AS | 1,040,000 | 0.3 % |
| Titas Eiendom AS | 1,000,000 | 0.3 % |
| Klotind AS | 971,162 | 0.3 % |
| Danske Bank A/S | 930,000 | 0.3 % |
| Vardfjell AS | 919,372 | 0.3 % |
| AS Clipper | 900,000 | 0.3 % |
| Total 30 largest shareholders | 195,664,410 | 64.8 % |
| Other shareholders | 106,481,054 | 35.2 % |
| Total number of shares | 302,145,464 | 100 % |
| Total number of shareholders | 11,844 |
| Name | Shareholding | % Share |
|---|---|---|
| Latino Invest AS 2) | 1,040,000 | 0.3 % |
| Johnny Tsolis Vasili 2) | 670,000 | 0.2 % |
| Robin Knowles 1) | 303,180 | 0.1 % |
| Terje Mjøs Holding AS 3) | 200,000 | 0.1 % |
| Kyrre Svae 1) | 150,000 | 0.0 % |
| Vibeke Ly 1) | 133,750 | 0.0 % |
| Arnt Andre Dullum 1) | 110,000 | 0.0 % |
| Hans Olov Harén 3) | 22,150 | 0.0 % |
| Brita Eilertsen 3) | 19,892 | 0.0 % |
1) Member of the Executive Management Team of Axactor
2) CEO/Related to the CEO of Axactor
3) Member of the Board of Directors of Axactor / controlled by member of the Board of Directors of Axactor
| APM | Definition | Purpose of use | Reconciliation IFRS |
|---|---|---|---|
| Gross revenue | 3PC revenue, REO sale, cash collected on own portfolios and other revenue, excluding change in forward flow derivatives |
To review the revenue before split into interest and amortization (for own portfolios) |
Total income, P&L |
| Cash EBITDA | EBITDA adjusted for change in forward flow derivatives, calculated cost of share option program, portfolio amortizations and revaluations, REO cost of sales and REO impairments |
To reflect cash from operating activities, excluding timing of taxes paid and movement in working capital |
EBITDA in P&L and Net cash flow from operating activities in Cash flow statement |
| 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 revenue and opex |
Purchased debt portfolios in Balance sheet |
| Net interest bearing debt (NIBD) | Net Interest Bearing Debt means the aggregated amount of interest bearing debt, less aggregated amount of unrestricted cash and bank deposits, on a consolidated basis |
NIBD is used as an indication of the Group's ability to pay off all of its debt |
Note 'Borrowings and other interest-bearing debt' |
| Return on equity (ROE), annualized, including or excluding non controlling interests |
Net result divided by average quarterly equity for the period, annualized |
Measures the profitability in relation to stockholders' equity |
Equity |
| Year to date | |||
|---|---|---|---|
| EUR million | 30 Jun 2021 | 30 Jun 2020 | Full year 2020 |
| Total income | 126.9 | 84.3 | 201.2 |
| Portfolio amortizations and revaluations | 52.8 | 65.7 | 123.2 |
| Change in forward flow derivatives | 0.4 | 0.0 | 0.8 |
| Gross revenue | 180.1 | 150.0 | 325.2 |
| Year to date | |||
|---|---|---|---|
| EUR million | 30 Jun 2021 | 30 Jun 2020 | Full year 2020 |
| EBITDA | 39.9 | -15.8 | 32.0 |
| Change in forward flow derivatives | 0.4 | 0.0 | 0.8 |
| Calculated cost of share option program | 0.2 | 0.5 | 0.6 |
| Portfolio amortizations and revaluations | 52.8 | 65.7 | 123.2 |
| REO Cost of sale, including impairment | 24.5 | 42.2 | 52.9 |
| Cash EBITDA | 117.8 | 92.6 | 209.5 |
| Taxes paid | -0.4 | -0.9 | -5.5 |
| Change in forward flow derivatives | -0.4 | 0.0 | -0.8 |
| Change in Working capital | 5.8 | 2.3 | 3.3 |
| Cash flow from operating activities before NPL and REO investments | 122.7 | 94.0 | 206.5 |
| Year to date | |||
|---|---|---|---|
| EUR million | 30 Jun 2021 | 30 Jun 2020 | Full year 2020 |
| Purchased debt portfolios | 1,104.1 | 1,107.3 | 1,124.7 |
| Estimated opex for future collection at time of acquisition | 298.8 | 303.9 | 303.7 |
| Estimated discounted gain (after tax) | 716.4 | 741.9 | 740.7 |
| Estimated Remaining Collection, NPL | 2,119.3 | 2,153.1 | 2,169.2 |
| Cash EBITDA | EBITDA adjusted for change in forward flow derivatives, calculated cost of share option program, portfolio amortizations and revaluations, REO cost of sales and REO impairments |
|---|---|
| CM1 Margin | Total operating expenses (excluding SG&A, IT and corporate cost) as a percentage of total income |
| Debt-to-equity ratio | Total interest bearing debt as a percentage of total equity |
| Discount | The rate of discount of original debt balance used to negotiate repayment of debt |
| EBITDA margin | EBITDA as a percentage of total income |
| Economic growth | GDP (Gross Domestic Product) growth |
| Efficient Legal system | Governmental bailiff exchanging information electronically |
| Equity ratio | Total equity as a percentage of total equity and liabilities |
| ERC | Estimated Remaining Collection express the expected future cash collection on own portfolios (NPLs) in nominal values, over the next 180 months |
| Gross IRR | The internal rate of return that makes the net present value of ERC equal to NPL book value. Calculated using monthly cash flows over a 180-month period |
| Gross margin | Cash EBITDA as a percentage of gross revenue |
| Gross revenue | 3PC revenue, REO sale, cash collected on own portfolios and other revenue, excluding change in forward flow derivatives |
| House pricing | House price index, development of real estate values |
| Interest changes | The interest charged to debtors on active claims |
| Interest level | Lending rate in the market |
| NIBD | Net Interest Bearing Debt means the aggregated amount of interest bearing debt, less aggregated amount of unrestricted cash and bank deposits, on a consolidated basis |
| Opex ex SG&A, IT and corp.cost | Total expenses excluding overhead functions |
| Payment agreement | Agreement with the debtors to repay their debt |
| Recovery rate | Portion of the original debt repaid |
| Return on Equity, excluding minorities, annualized |
Net profit/(loss) to equity holders as a percentage of total average equity in period excluding Non-controlling interests, annualized based on number of days in period |
| Return on Equity, including minorities, annualized |
Net profit/(loss) after tax as a percentage of total average equity in period, annualized based on number of days in period |
| Settlements | One payment of full debt |
| SG&A, IT and corporate cost | Total operating expenses for overhead functions |
| Solution rate | Accumulated paid principal amount for the period divided by accumulated collectable principal amount for the period. Usually expressed on a monthly basis |
| Total estimated capital commitments | The total estimated capital commitments for the forward flow agreements are calculated based on the volume |
| for forward flow agreements | received over the last months and limited by the total capex commitment in the contract |
| Total income | Gross revenue minus portfolio amortizations and revaluations |
| 3PC | Third-party collection |
|---|---|
| APM | Alternative Performance Measures |
| ARM | Accounts Receivable Management |
| B2B | Business to Business |
| B2C | Business to Consumer |
| BoD | Board of Directors |
| CGU | Cash Generating Unit |
| CM1 | Contribution Margin |
| Dopex | Direct Operating expenses |
| EBIT | Operating profit, Earning before Interest and Tax |
| EBITDA | Earnings Before Interest, Tax, Depreciation and Amortization |
| ECL | Expected Credit Loss |
| EPS | Earnings Per Share |
| EUR | Euro |
| FTE | Full Time Equivalent |
| IFRS | International Financial Reporting Standards |
| NCI | Non-controlling interests |
| NOK | Norwegian Krone |
| NPL | Non-performing loan |
| OB | Outstanding Balance, the total amount Axactor can collect on claims under management, including outstanding principal, interest and fees |
| PCI | Purchased Credit Impaired |
| PPA | Purchase Price Allocations |
| REO | Real Estate Owned |
| SEK | Swedish Krone |
| SG&A | Selling, General & Administrative |
| SPV | Special Purpose Vehicle |
| VIU | Value in Use |
| WACC | Weighted Average Cost of Capital |
| WAEP | Weighted Average Exercise Price |
| Quarterly Report - Q3 | 27.10.2021 |
|---|---|
| Quarterly Report - Q4 | 24.02.2022 |
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.
axactor.com
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