Quarterly Report • Feb 13, 2018
Quarterly Report
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February 13, 2018
Axactor recorded gross revenue of 34.5 million in Q4. This is a 46% growth compared to previous quarter and 87% above same period last year. The growth story of Axactor continues and Q4 saw a record high portfolio investment of EUR 234 million with ERC reaching EUR 858 million for the group.
At the end of 2017, the second full year in operation, Axactor has become a serious contender in the European debt purchaseand service market, employing more than 900 employees in 5 countries. The full year shows gross revenue of EUR 104.7 million, EBITDA of EUR 14.8 million and cash EBITDA of EUR 32.7 million. Net result for 2017 was EUR 2.6 million. The company has invested a total of EUR 362 million in NPLs and REOs in the 5 countries where it operates, increasing the total ERC for the group to EUR 858 million at the end of the year. At the end of 2017 the company had a total EUR 664 million in credit facilities whereof EUR 190 million are in the form of flexible accordion options. Total utilization of these credit facilities at the end of year was EUR 299 million. This has been accomplished in parallel with the development and integration of the organization while deploying new and efficient IT systems that enables the company to continue the growth story in 2018 and beyond.
Axactor achieved an EBITDA of EUR 5.6 million and Cash EBITDA of EUR 13.5 million in Q4. The corresponding numbers for the same period in 2016 are EUR -1.2 million and EUR 0.3 million. The operating margin for the quarter was 20 %, compared to -7 % in the same quarter in 2016. Total cost for the quarter was EUR 23.0 million. The increase compared to Q3 was driven by a 46% revenue growth, EUR 1.2 million in cost for SPV setups and restructuring, as well as EUR 1.3 million in cost of sales for REOs.
Axactor made a significant entry into the Spanish REO market during fourth quarter 2017. A total of EUR 117 million was invested in two REO transactions using the Geveran co-investment vehicle. The largest of the two transactions saw nearly EUR 100 million being used to acquire a 75% stake in two property companies owned by a large Spanish bank. Combined the two companies own more than 4000 properties in Spain.
The co-operation with Geveran has added substantial flexibility to Axactor's investment strategy and enhanced our CAPEX capacity significantly. On an operational level the experience of Geveran has proved to be equally valuable to Axactor.
In addition to the REO investments, Axactor deployed EUR 87 million in unsecured and secured NPLs across the 5 countries where Axactor is present. The company deployed EUR 22 million in NPLs in Italy during the quarter, and made the largest Italian investment since we acquired the Italian platform company in June 2016. In total Axactor deployed EUR 362 million in portfolios during 2017
To fund the continued growth of the company Axactor concluded the refinancing process of the current RCF with DNB and Nordea during fourth quarter. The facility now allows for a higher gearing and more operational flexibility and the size of the facility has increased by nearly EUR 200 million to 350 million, whereof EUR 150 million is in the form of accordion options. This facility comes in addition to the EUR 80+40 million loan which DNB has made available to the co-investment vehicle which Axactor established with Geveran in Q4.
With the market for REO acquisitions remaining buoyant, particularly in Spain, Axactor has initiated discussions with several global banks with a view to enhance our investment capacity in this segment. Global banks have experience and appetite for financing such transactions due to the portfolios high cash flow generation and short payback time.
| EUR million | Q4 2017 | Q4 2016 | FY 2017 | FY 2016 |
|---|---|---|---|---|
| Gross Revenue | 34.5 | 18.5 | 104.7 | 40.5 |
| Net Revenue | 28.7 | 16.4 | 89.8 | 37.1 |
| EBITDA | 5.6 | -1.2 | 14.8 | -6.5 |
| Cash EBITDA 1) | 13.5 | 0.3 | 32.7 | -2.5 |
| Depreciation and Amort. (excl. Portfolio Amortization) | -1.4 | -1.2 | -5.3 | -3.1 |
| Net Financial Items | -5.6 | -3.1 | -7.5 | -2-3 |
| Tax | 0.7 | 0.9 | 0.6 | 0.7 |
| Net Result | -0.7 | -4.7 | 2.6 | -11.2 |
| Cash and Cash Equivalents at end of period | 48.6 | 64.6 | 48.6 | 64.6 |
| Acquired NPL portfolios during the period 2) 3) | 234.1 | 33.8 | 362.0 | 75.6 |
| Book Value of NPL portfolios at end of period 2) | 471.3 | 128.0 | 471.3 | 128.0 |
| Gross Collection on Debt Portfolios during the quarter 2) 4) | 22.1 | 8.5 | 60.8 | 15.0 |
| Estimated Remaining Collection (ERC) at end of quarter 2) | 858.3 | 317.1 | 858.3 | 317.1 |
| Interest Bearing Debt at end of period | 298.8 | 74.0 | 298.8 | 74.0 |
| Number of Employees (FTE) at end of period | 934 | 850 | 934 | 850 |
1) Cash EBITDA is adjusted for calculated cost of share option program and portfolio amortizations and revaluations and REO cost of sales
2) Includes stock of secured assets
3) Includes portfolios on the balance sheet of CS Union and Altor at the time of acquisition.
4) Excluding collections on CS Union portfolios in Q2 2016 and Altor portfolios in Q3 2016.
Gross revenue for the fourth quarter 2017 was MEUR 34.5 (18.5). Comparing to Q3 2017, the gross revenue increased by 46%. The fourth quarter is generally a strong quarter, as evidenced by the reported revenue. In addition to the seasonality impacts, the new business secured during the second half of 2017 is beginning to show results in the P&L. Total amortization and revaluation of NPL portfolios was MEUR 5.8 (2.0) in Q4 2017, leaving the net revenue for the quarter at MEUR 28.7 (16.4).
NPL portfolios incl. REOs continue to be the largest segment in terms of gross revenue, accounting for MEUR 22.1 (8.7) or 64% (47%) of total gross revenue in Q4 2017. Axactor acquired portfolios with a total capex of MEUR 234.1 (33.8) in the quarter, out of which MEUR 147.0 are related to REO portfolios. The capex figures include the minority shareholder interest for the Spanish REO portfolios acquired in December. The fourth quarter of 2017 is Axactor's strongest quarter to date in terms of portfolio investments, and despite investing a lot late in the quarter the impacts on P&L are significant. The NPL book value including REO portfolios grew from MEUR 246.3 in Q3 2017 to MEUR 471.3 in Q4 2017. Out of the MEUR 471.3 NPL book value, MEUR 154.1 represents REO portfolios. Spain remains the largest country within the NPL segment, helped by the large REO portfolios acquired in the quarter. Capex was deployed in all five Axactor geographies in Q4 2017, helping to diversify risk and establish a pan-European footprint.
The 3PC segment delivered a gross revenue of MEUR 10.8 (8.2) in Q4 2017, and accounted for 31% (44%) of total gross revenue. The new 3PC contracts closed during the third quarter of 2017 are contributing to the growth, and one major contract was signed with a large Spanish financial institution in December providing further momentum going forward.
Accounts Receivable Management (ARM) is currently being rolled out as a business segment throughout the Group. In 2017, however, all revenue is from Norwegian clients. The ARM segment contributed MEUR 1.6 (1.6), or 5% (8%) of the total gross revenue for the fourth quarter of 2017.
The reported EBITDA for the fourth quarter of 2017 was MEUR 5.6 (-1.2). Comparing to Q3 2017, the EBITDA increased by MEUR 3.6. The increase in earnings is partly due to the new business secured through the second half of 2017, as well as seasonality effects. The cash EBITDA, (EBITDA excluding amortization and revaluations of NPL portfolios and REO cost of sales, as well as calculated costs related to the share option program) was MEUR 13.5 (0.3) for Q4 2017.
Net profit for the period amounted to MEUR -0.7 (-4.7) for the fourth quarter of 2017.
The total operating expenses for the fourth quarter of 2017 amounted to MEUR 23.0 (17.6). This amount includes REO cost of sales, which represent the reversal of the book value of sold assets, and can thus be compared to the amortization of NPL portfolios. The cost increase compared to Q3 was driven by a 46% revenue growth, EUR 1.2 million in cost for SPV setups and restructuring, as well as EUR 1.3 million in cost of sales for REOs. Direct costs, which includes cost for collection staff, phone, printing & postage, fees & commission paid to external sources and legal fees comprised 45% of total operating expenses, whereof MEUR 7.4 is cost for the collection staff.
IT and local SG&A costs amounted to MEUR 6.4 (5.5). The increase can be attributed to increased size of the business.
Depreciation and amortization excluding amortization of NPL portfolios was MEUR 1.4 (1.2). Most of the depreciation and amortization is related to intangible assets acquired through the acquisition of subsidiaries.
Interest cost on outstanding debt for the fourth quarter of 2017 was MEUR 2.6 (1.1). Additionally, the parent company changed its functional currency from NOK to EUR in Q4-2017, resulting in a one-time negative currency effect of MEUR 2.0 from the conversion. Adding other financial items, the total net financial items for the quarter ended at MEUR -5.6.
Tax expense for the fourth quarter of 2017 was positive MEUR 0.7 (0.9). The positive tax is mainly due to a reduction in deferred tax liabilities pertaining to amortization of intangible assets from business combinations.
The cash flow from operating activities in the fourth quarter of 2017 amounted to MEUR 9.9 (-4.7). The cash EBITDA for Q4 2017 was MEUR 13.5. The main difference between the cash EBITDA and the cash flow from operating activities relates to an increase in net working capital of MEUR 3.4 (3.2).
Acquisition of NPL portfolios during Q4 2017 was MEUR 234.1, out of which MEUR 147.0 is related to REO portfolios.
Adjusting for deferred payment on one portfolio, the total amount paid for portfolios in the quarter was MEUR 227.7. In addition, Axactor continues to invest in IT systems to optimize efficiency, thus, the total cash flow from investments was MEUR -229.0 (-33.1).
Total cash flow from financing activities was MEUR 213.0 (67.4) in Q4 2017. Total cash and cash equivalents at the end of the
period was MEUR 48.6 (62.5) with an additional MEUR 1.9 (1.5) in restricted cash, for a total cash balance of MEUR 50.5 (64.0).
At the end of the fourth quarter of 2017, the total equity for the Group is MEUR 291.8, compared to MEUR 182.9 in Q4 2016. The resulting equity ratio at the end of the quarter was 47%, compared to 65% at the same time last year.
Gross revenue for the full year of 2017 was MEUR 104.7 (40.5), while net revenue for the same period was MEUR 89.8 (37.1). Reported EBITDA for 2017 was MEUR 14.8 (-6.5). Net financial items ended at MEUR -7.5 (-2.3) for 2017, resulting in a net profit of MEUR 2.6 (-11.2).
The parent company's business activity is to manage the Group's operations. The result after tax for the fourth quarter 2017 ended at MEUR -4.1 (+1.4). Total equity at the parent company at the end of the quarter was MEUR 275.2 (198.1).
The market for purchase of NPL portfolios remains strong and we see interesting opportunities in both Spain, Nordics and Italy while Germany remains somewhat less active. The competition for NPLs remains robust and some of the price pressure we saw in Q4 2017 continues into first quarter 2018. In the Nordics we see an increasing interest from banks in doing forward flow agreements, typically for 12 or 24 month periods, in parallel with larger one-off NPL sales being discussed.
The REO market in Spain continues to present attractive investment opportunities for Axactor, and the company expect to deploy additional capital to this segment in the coming quarters.
This report has not been reviewed by the auditor.
Stockholm, 13 February 2018 The Board of Directors
Bjørn Erik Næss Chairman of the Board
Harald Thorstein Board member
Merete Haugli Board member
Brita Eilertsen Board member
Beate S. Nygårdshaug Board member
Terje Mjøs Board member
Endre Rangnes Chief Executive Officer
| For the quarter end | YTD | |||||
|---|---|---|---|---|---|---|
| EUR thousand | Note | 31 Dec 2017 |
31 Dec 2016 |
31 Dec 2017 |
31 Dec 2016 |
|
| Net revenue | 3 | 28,652 | 16,439 | 87,745 | 37,074 | |
| Other revenue | 3 | -0 | - | 2,040 | - | |
| Total revenue | 28,652 | 16,439 | 89,785 | 37,074 | ||
| Cost of secured assets sold | 6 | -1,321 | -1,445 | |||
| Personnel expenses collection | -7,400 | -6,773 | -26,578 | -12,038 | ||
| Personnel expenses other | -5,431 | -3,270 | -17,331 | -9,703 | ||
| Operating expenses | -8,852 | -7,604 | -29,616 | -21,821 | ||
| EBITDA | 5,649 | -1,208 | 14,815 | -6,488 | ||
| Amortization and depreciation | -1,412 | -1,197 | -5,327 | -3,126 | ||
| EBIT | 4,237 | -2,406 | 9,488 | -9,614 | ||
| Financial revenue | 4 | 252 | -1,767 | 3,070 | 1,279 | |
| Financial expenses | 4 | -5,848 | -1,379 | -10,585 | -3,562 | |
| Net financial items | -5,596 | -3,145 | -7,515 | -2,283 | ||
| Profit/(loss) before tax | -1,359 | -5,551 | 1,974 | -11,897 | ||
| Tax expense | 706 | 872 | 611 | 727 | ||
| Net profit/(loss) for the period | -653 | -4,679 | 2,585 | -11,169 | ||
| Net profit/(loss) to minority interest | -32 | - | -32 | - | ||
| Net profit/(loss) to equity holders | -622 | -4,679 | 2,617 | -11,169 | ||
| Earnings per share: basic | -0.000 | -0.002 | 0.002 | -0.013 | ||
| Earnings per share: diluted | -0.000 | -0.002 | 0.002 | -0.012 |
| For the quarter end | YTD | |||
|---|---|---|---|---|
| EUR thousand | 31 Dec 2017 |
31 Dec 2016 |
31 Dec 2017 |
31 Dec 2016 |
| Net profit/(loss) net of income tax | -653 | -4,679 | 2,585 | -11,170 |
| Items that will not be classified subsequently to profit or loss | ||||
| Remeasurement of pension plans | 8 | 124 | 8 | 124 |
| Items that may be classified subsequently to profit or loss | ||||
| Foreign currency translation differences - foreign operations | 197 | -546 | -3,702 | 2,226 |
| Other comprehensive income/ (loss) for the period net of income tax | 206 | -422 | -3,694 | 2,350 |
| Total comprehensive income for the period attributable to: | -448 | -5,101 | -1,109 | -8,820 |
| - Equity holders of the parent company | -416 | -5,101 | -1,077 | -8,820 |
| - Non-Controlling interests | -32 | - | -32 | - |
| EUR thousand | Note | 31 Dec 2017 |
31 Dec 2016 |
|---|---|---|---|
| ASSETS | |||
| Intangible non-current assets | |||
| Intangible assets | 18,359 | 18,347 | |
| Goodwill | 53,582 | 53,491 | |
| Deferred tax asset | 3,945 | 1,442 | |
| Tangible non-current assets | |||
| Property, Plant and equipment | 2,499 | 2,365 | |
| Financial non-current assets | |||
| Purchased debt portifolios | 5 | 317,150 | 127,989 |
| Other long term receivables | 1,086 | 998 | |
| Other long term investments | 170 | 415 | |
| Total non-current assets | 396,791 | 205,046 | |
| Current assets | |||
| Stock of secured assets (REOs) | 6 | 154,101 | |
| Current receivables | 8,589 | 5,652 | |
| Other current assets | 12,528 | 7,563 | |
| Restricted cash | 1,878 | 1,510 | |
| Cash and cash equivalents | 48,604 | 62,476 | |
| Total current assets | 225,700 | 77,202 | |
| TOTAL ASSETS | 622,491 | 282,248 |
| EUR thousand | Note | 31 Dec 2017 |
31 Dec 2016 |
|---|---|---|---|
| EQUITY AND LIABILITIES | |||
| Equity attributable to equity holders of the parent | |||
| Share Capital | 79,377 | 64,198 | |
| Other paid-in equity | 196,298 | 262,414 | |
| Retained earnings profit/(Loss) | -15,630 | -147,438 | |
| Reserves | 13 | 3,714 | |
| Non-controlling interests | 31,776 | - | |
| Total equity | 291,833 | 182,888 | |
| Non-current liabilities | |||
| Non-current interest bearing debt | 7 | 237,571 | 25,149 |
| Deferred tax liabilities | 5,887 | 5,960 | |
| Other non-current liabilities | 3,002 | 3,400 | |
| Total non-current liabilities | 246,459 | 34,510 | |
| Current liabilities | |||
| Accounts payables | 4,029 | 6,648 | |
| Current portion of non-current borrowings | 7 | 61,189 | 48,852 |
| Taxes Payable | 1,376 | 387 | |
| Other current liabilities | 17,603 | 8,962 | |
| Total current liabilities | 84,198 | 64,850 | |
| TOTAL EQUITY AND LIABILITIES | 622,491 | 282,248 |
| 31 Dec 31 Dec 31 Dec 31 Dec EUR thousand Note 2017 2016 2017 2016 Operating actitvities Profit before tax -5,552 1,974 -11,897 -1,359 Taxes paid -112 -439 -1,531 -2,271 Finance income and expense 5,596 3,726 7,514 2,283 Amortization of debt portfolios 5,842 2,034 14,957 3,417 Cost of sales stock of secured assets 1,321 - 1,445 - Depreciation and amortization 1,412 1,198 5,327 3,126 Calculated cost of employee share options 547 -559 1,806 603 Unrealised foreign currency (gains)/losses - -1,921 - -2,875 Working capital changes -3,350 -3,170 -8,099 -6,151 Net cash flows operating activities 9,897 -4,682 23,393 -13,765 Investing actitvities Purchase of debt portfolios and REO's 5 -227,651 -32,899 -355,202 -75,610 Investment in subsidiaries 8 - - -1,409 -47,707 Purchase of intangible and tangible assets -1,378 -288 -5,401 -2,209 Sales of financial assets - - 175 - Interest received - 71 96 89 Net cash flows investing activities -229,029 -33,116 -361,741 -125,436 Financing actitvities Proceeds from borrowings 7 198,695 6,373 277,752 57,134 Repayment of debt 7 -7,566 -16,782 -42,485 -18,307 Interest paid -1,882 -855 -5,315 -1,306 Loan fees paid 7 -8,074 - -10,188 -1,491 Proceeds from share issue - 81,106 75,274 132,620 Proceeds from non-controlling interests 31,808 31,808 Share issue costs -22 -2,423 -1,885 -4,434 Net cash flows financing activities 67,419 324,961 164,215 212,959 Currency translation 258 -117 -1,792 -682 Net change in cash and cash equivalents -6,173 29,621 -13,387 25,014 Restricted cash at the beginning of period - - - - Restricted cash at end of period - - - - Cash and cash equivalents at the beginning of period 57,337 34,108 63,986 40,764 Cash and cash equivalents at end of period 50,482 63,987 50,482 63,987 |
For the quarter end | YTD | ||
|---|---|---|---|---|
| Equity related to the shareholders of the Parent Company | |||||||
|---|---|---|---|---|---|---|---|
| EUR thousand | Share capital |
Other paid in capital |
Exchange differences |
Retained earnings and profit for the year |
Total | Non controlling interest |
Total Equity |
| Closing balance on 31 December 2015 | 32,655 | 160,787 | -11 | -141,216 | 52,215 | 52,215 | |
| Balance on 1 January 2016 | 32,655 | 160,787 | -11 | -141,216 | 52,215 | 52,215 | |
| Net result for the period | - | - | - | -11,169 | -11,169 | -11,169 | |
| Comprehensive loss for the period | -1,726 | -8,748 | 3,726 | 5,234 | -1,514 | -1,514 | |
| Total comprehensive result | -1,726 | -8,748 | 3,726 | -5,935 | -12,683 | -12,683 | |
| New share issues, February | 3,148 | 7,883 | 11,031 | 11,031 | |||
| New Share issues, May | 11,642 | 27,853 | 39,493 | 39,493 | |||
| Acquisition subsidiary, IKAS group | 2,590 | 6,589 | 9,179 | 9,179 | |||
| Acquisition subsidiary, CS Union | 1,101 | 2,829 | 3,930 | 3,930 | |||
| New share issues, October | 3,788 | 17,753 | 21,541 | 21,541 | |||
| New share issues, November | 8,360 | 39,157 | 47,517 | 47,517 | |||
| New share issues, December | 2,641 | 11,898 | 14,539 | 14,539 | |||
| Costs related to fund-raising | -4,470 | -4,470 | -4,470 | ||||
| Share based payment | 595 | 595 | 595 | ||||
| Closing balance on 31 December 2016 | 64,197 | 262,127 | 3,715 | -147,151 | 182,887 | 182,887 | |
| Balance on 1 January 2017 | 64,197 | 262,127 | 3,715 | -147,151 | 182,887 | 182,887 | |
| Allocation of result from discontinued operations 1) | -128,896 | 128,896 | 0 | 0 | |||
| Net result for the period | 2,617 | 2,617 | -32 | 2,585 | |||
| Comprehensive Profit/(Loss) Foreign currency translation differences - foreign operations |
-3,702 | -3,702 | -3,702 | ||||
| Comprehensive Profit/(Loss) Remeasurement of pension plans |
8 | 8 | |||||
| Total comprehensive result for the period | 0 | 0 | -3,702 | 2,617 | -1,077 | -32 | -1,109 |
| Minority of newly consolidated companies | 31,807 | 31,807 | |||||
| New Share issues, May | 2,617 | 8,799 | 11,417 | 11,417 | |||
| New Share issues, August | 3,957 | 16,223 | 20,180 | 20,180 | |||
| New Share issues, September | 8,605 | 35,073 | 43,678 | 43,678 | |||
| Costs related to fund-raising | -1,885 | -1,885 | -1,885 | ||||
| Share based payment | 1,806 | 1,806 | 1,806 | ||||
| Grant of Warrants 2) | 3,051 | 3,051 | 3,051 | ||||
| Closing balance on 31 December 2017 | 79,377 | 196,298 | 13 | -15,638 | 260,057 | 31,776 | 291,833 |
1) Ref. resolution in Annual general meeting on 31. May 2017.
2) 130 million American style warrants in Axactor to Geveran with an exercise price of NOK 3,25 have been granted. The warrants expire after 2 years.
Face value per share have been changed from SEK 0,50 to EUR 0,0523.
| For the quarter end | YTD | ||||
|---|---|---|---|---|---|
| EUR thousand Note |
31 Dec 2017 |
31 Dec 2016 |
31 Dec 2017 |
31 Dec 2016 |
|
| Other operating income | 1,556 | 27 | 5,809 | 1,133 | |
| Operating expenses | -2,125 | 747 | -7,380 | -4,243 | |
| Personell expenses | - | - | - | - | |
| EBITDA | -569 | 774 | -1,571 | -3,110 | |
| Amortization and depreciation | - | - | - | - | |
| EBIT | -569 | 774 | -1,571 | -3,110 | |
| Financial revenue | 708 | 630 | 5,347 | 8,141 | |
| Financial expenses | -4,271 | -45 | -4,971 | -582 | |
| Net financial items | -3,563 | 585 | 376 | 7,559 | |
| Profit/(loss) before tax | -4,131 | 1,359 | -1,195 | 4,449 | |
| Tax expense | - | - | - | - | |
| Net profit/(loss) to equity holders 1) | -4,131 | 1,359 | -1,195 | 4,449 |
1) No other comprehensive income in parent company.
| EUR thousand | Note | 31 Dec 2017 |
31 Dec 2016 |
|---|---|---|---|
| ASSETS | |||
| Intangible non-current assets | |||
| Investment in subsidiaries | 129,562 | 135,421 | |
| Loans to group companies | 105,602 | 21,365 | |
| Other long-term receivables | 30,170 | - | |
| Total non-current assets | 265,334 | 156,786 | |
| Current assets | |||
| Short-term intercompany receivables | 3,238 | 1,310 | |
| Other current assets | 2,838 | 9 | |
| Restricted cash | 406 | 418 | |
| Cash and cash equivalents | 5,235 | 41,941 | |
| Total current assets | 11,717 | 43,678 | |
| TOTAL ASSETS | 277,050 | 200,463 | |
| SHAREHOLDERS' EQUITY | |||
| Restricted equity | |||
| Share Capital | 79,377 | 64,197 | |
| Statutory reserve | 240 | 240 | |
| Total restricted equity | 79,617 | 64,437 | |
| Non-restricted equity | |||
| Share premium reserve | 196,304 | 262,131 | |
| Retained earnings | 476 | -132,845 | |
| Result for the period | -1,195 | 4,426 | |
| Total non-restricted equity | 195,585 | 133,712 | |
| TOTAL SHAREHOLDERS EQUITY | 275,202 | 198,149 | |
| LIABILITIES | |||
| Non-current liabilities | |||
| Other long term liabilities | - | 1,444 | |
| Total non-current liabilities | - | 1,444 | |
| Current liabilities | |||
| Accounts payables | 187 | 94 | |
| Short-term intercompany liabilities | 1,531 | - | |
| Other current liabilities | 131 | 775 | |
| Total current liabilities | 1,849 | 869 | |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 277,050 | 200,463 |
| Restricted Equity | Non-restricted Equity | |||||
|---|---|---|---|---|---|---|
| EUR thousand | Share capital | Statutory reserve |
Share premium reserve |
Retained earnings |
Result of the period |
Total Equity |
| Opening balance of January 1, 2016 | 32,655 | 240 | 160,787 | -117,265 | -22,415 | 54,001 |
| Transfer of prior year's net result | - | - | -21,629 | 21,629 | 0 | |
| New share issues, February | 3,148 | 7,883 | 11,031 | |||
| New Share issues, May | 11,641 | 27,853 | 39,493 | |||
| Acquisition subsidiary, IKAS group | 2,590 | 6,589 | 9,179 | |||
| Acquisition subsidiary, CS Union | 1,101 | 2,829 | 3,930 | |||
| New share issues, October | 3,788 | 17,753 | 21,541 | |||
| New share issues, November | 8,360 | 39,157 | 47,517 | |||
| New share issues, December | 2,641 | 11,898 | 14,539 | |||
| Costs related to fund-raising | -4,470 | -4,470 | ||||
| Share based payment | 595 | 595 | ||||
| Result of the period | 4,449 | 4,449 | ||||
| Translation differences | -1,725 | -8,744 | 6,049 | 762 | -3,658 | |
| Closing balance on 31 December 2016 | 64,197 | 240 | 262,131 | -132,845 | 4,425 | 198,149 |
| Balance on 1 January 2017 | 64,197 | 240 | 262,131 | -132,845 | 4,425 | 198,149 |
| Transfer of prior years net result | - | - | - | 4,425 | -4,425 | 0 |
| Allocation of result from discontinued operations 1) | -128,896 | 128,896 | 0 | |||
| New Share issues, May | 2,617 | 8,799 | 11,416 | |||
| New Share issues, August | 3,957 | 16,223 | 20,180 | |||
| New Share issues, September | 8,605 | 35,073 | 43,678 | |||
| Costs related to fund-raising | -1,885 | -1,885 | ||||
| Share based payment | - | 1,806 | - | 1,806 | ||
| Grant of Warrants 2) | 3,051 | 3,051 | ||||
| Comprehensive Profit/(Loss) Foreign currency translation differences - foreign operations |
0 | |||||
| Result of the period | -1,195 | -1,195 | ||||
| Closing balance on 31 December 2017 | 79,377 | 240 | 196,302 | 476 | -1,194 | 275,201 |
1) Ref. resolution in Annual general meeting on 31. May 2017.
2) 130 million American style warrants in Axactor to Geveran with an exercise price of NOK 3,25 have been granted. The warrants expire after 2 years.
| EUR thousand | 2017 | 2016 | 2015 | 2014 | 2013 | |
|---|---|---|---|---|---|---|
| Number of outstanding shares at beginning of reporting period 2) |
Number | 1,226,488,769 | 596,614,360 | 90,809,360 | 18,174,922 | 18,174,922 |
| New share issue | Number | 290,000,000 | 629,874,409 | 505,805,000 | 72,634,438 | - |
| Number of outstanding shares at the end of reporting period 1) and 2) |
Number | 1,516,488,769 | 1,226,488,769 | 596,614,360 | 90,809,360 | 18,174,922 |
| Average number of shares 2) | Number | 1,327,030,991 | 849,072,460 | 133,687,416 | 29,804,775 | 18,174,922 |
| Operating result, for continued operations | TEUR | 9,488 | -9,614 | -3,360 | -1,214 | -2,478 |
| Result after tax | TEUR | 2,585 | -11,169 | -17,810 | -5,055 | -12,748 |
| Operating result per share | EUR | 0.007 | -0.011 | -0.02 | -0.15 | -0.14 |
| Result after financial items per share | EUR | 0.001 | -0.014 | -0.05 | -0.15 | -0.98 |
| Result per share after tax | EUR | 0.002 | -0.013 | -0.13 | -0.17 | -0.70 |
| Shareholders equity per share before dilution 2) | EUR | 0.220 | 0.149 | 0.09 | 0.19 | 0.77 |
| Dividend 3) | TEUR | - | - | 59.69 | - | |
| Price per share at the end of reporting period | NOK | 2.90 | 2.650 | 2.00 | 1.42 | 3 1) |
1) A reversed share split of 1:10 was conducted on December 13, 2013.
2) The average number of shares during the 12 m period 2013 has been adjusted for the reversed split as from the beginning of the year.
3) Total dividend. Not per share.
The interim report has been prepared in accordance with IAS 34 and recommendations RFR 1 and the Swedish Financial Reporting Board (RFR), and recommendation RFR 2 and the Annual Accounts Act with regards to the Parent Company. The accounting principles applied correspond to those described in the Annual Report for the Financial Year 2016. 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 2016.
The Company has from 2017 converted the presentation currency from SEK to EUR to better reflect the currency in which the business operates. Comparable figures relating to 2016 are calculated based on the historic currency translation rate at the actual presented period.
Real Estate Owned consists of portfolios of properties held for sale as a part of the ordinary course of business. The properties are acquired exclusively with a view to subsequent resale in the near future, thus no renting business. Since REO are held for sale they are considered stock of secured assets and valued according to IAS2.
The standard comes into force for financial years beginning in 2018 or thereafter and replaces IAS 39.
The implementation of the standard has been analyzed and will not have any material impact on the Group as the treatment of the NPL portfolios under IFRS 9 will remain as according to IAS 39 due to the fact that IAS 39 AG8 is unchanged in IFRS 9.
The standard comes into force on 1st January 2018 and replaces existing standards and interpretations on revenues.
The implementation of the standard has been analyzed and will impact on the Group accounts in 2018 and will be treated as a change in the opening balance on the equity on the 1 of January with EUR - 3.3 million using the modified retrospective method.
The operations of Axactor involve certain significant risks, including but not limited to credit risk, risk inherent in purchased debt, interest rate risks and regulatory risks. For a complete discussion of the a forementioned risks, refer to the Company's Annual Report for the Financial Year 2016, which is available on Axactor website; www.axactor.com. In addition, a detailed risk factor account is given in the various prospectuses published and available at Axactor's website.
| EUR thousand | NPL | 3PC 1) | Payment Services |
Eliminations/ Not allocated |
Total |
|---|---|---|---|---|---|
| Collections on own portfolios | 20,083 | 20,083 | |||
| REO sales | 1,976 | 1,976 | |||
| Other revenue | 10,804 | 1,622 | 0 | 12,426 | |
| Portfolio amortization and revaluation | -5,833 | -5,833 | |||
| Net revenue | 16,226 | 10,804 | 1,622 | 0 | 28,652 |
| REO cost of sales | -1,321 | -1,321 | |||
| Other direct operating expenses | -4,616 | -7,010 | -801 | -0 | -12,427 |
| Contribution margin | 10,289 | 3,794 | 821 | 0 | 14,905 |
| Local SG&A, IT and corporate cost | -9,256 | -9,256 | |||
| EBITDA | -9,256 | 5,649 | |||
| Total Opex | -5,937 | -7,010 | -801 | -9,256 | -23,004 |
| CM1 margin | 63.4 % | 35.1 % | 50.6 % | 100.0 % | 52.0 % |
| EBITDA margin | 19.7 % | ||||
| Dopex / Gross revenue | 26.9 % | 64.9 % | 49.4 % | 0.0 % | 39.9 % |
| Local SG&A, IT and corporate cost / Gross revenue | 26.8 % |
1) External revenue.
No comparable figures available.
| EUR thousand | NPL | 3PC 1) | Payment Services |
Eliminations/ Not allocated |
Total |
|---|---|---|---|---|---|
| Collections on own portfolios | 58,552 | -30 | 58,523 | ||
| REO sales | 2,282 | 2,282 | |||
| Other revenue 2) | 35,830 | 6,059 | 2,040 | 43,929 | |
| Portfolio amortization and revaluation | -14,948 | -14,948 | |||
| Net revenue | 45,886 | 35,830 | 6,059 | 2,010 | 89,785 |
| REO cost of sales | -1,445 | -1,445 | |||
| Direct operating expenses | -14,037 | -25,585 | -3,195 | -0 | -42,817 |
| Contribution margin | 30,405 | 10,245 | 2,864 | 2,010 | 45,523 |
| Local SG&A, IT and corporate cost | -30,707 | -30,707 | |||
| EBITDA | -28,697 | 14,815 | |||
| Total Opex | -15,482 | -25,585 | -3,195 | -30,707 | -74,970 |
| CM1 margin | 66.3 % | 28.6 % | 47.3 % | 100.0 % | 50.7 % |
| EBITDA margin | 16.5 % | ||||
| Dopex / Gross revenue | 25.4 % | 71.4 % | 52.7 % | 0.0 % | 42.3 % |
| Local SG&A, IT and corporate cost / Gross revenue | 29.3 % |
1) External revenue
2) Settlement former BoD
| Quarter ended | Year to date | |||
|---|---|---|---|---|
| EUR thousand | 31 Dec 2017 |
31 Dec 2016 |
31 Dec 2017 |
31 Dec 2016 |
| Financial revenue | ||||
| Interest on bank deposits | 12 | 71 | 109 | 89 |
| Re-evaluation external investments | - | 309 | - | 309 |
| Exchange gains | 158 | -2,146 | 2,704 | 881 |
| Other financial income | 82 | - | 257 | - |
| Total financial revenue | 252 | -1,766 | 3,070 | 1,279 |
| Financial expenses | ||||
| Interest expenses on borrowings | -2,572 | -1,053 | -6,942 | -2,003 |
| Exchange losses | -2,981 | -233 | -3,144 | -1,373 |
| Other financial expenses | -294 | -93 | -498 | -186 |
| Total financial expenses | -5,848 | -1,379 | -10,585 | -3,562 |
| Net finance | -5,596 | -3,145 | -7,515 | -2,282 |
| EUR thousand 31.12.2017 |
31.12.2016 |
|---|---|
| Acquisition cost, opening balance 131,729 |
- |
| Purchase 206,446 |
74,955 |
| Purchase from acquired business - |
56,408 |
| Disposals -132 |
|
| Translation differences -652 |
366 |
| Accumulated acquisition cost 337,391 |
131,729 |
| Amortization, opening balance -3,744 |
|
| Re-valuation opening balance - |
- |
| Amortization for the year -16,139 |
-3,744 |
| Re-valuation of the year 1,190 |
|
| Disposals 55 |
|
| Translation differences -1,603 |
|
| Accumulated amortization, closing balance -20,240 |
-3,744 |
| Net book value 317,150 |
127,985 |
Description of Axactor's accounting principles for Purchased Debt, see note 1 in the annual accounts.
| EUR thousand | 31.12.2017 | 31.12.2016 |
|---|---|---|
| Acquisition cost, opening balance | 0 | 0 |
| Purchase | 155,546 | |
| Cost of sold secured assets | -1,445 | |
| Total | 154,101 | 0 |
Secured assets contains approximately 4,800 assets. The assets are held for sale.
| Currency | Interest rate | Carrying amount 31.12.2017 EUR thousand |
Year of maturity |
|
|---|---|---|---|---|
| Balance at 1 January 2017 | 1) EUR /NOK | Variable | 74,002 | 2017-2020 |
| New issues | ||||
| Italian Banks | 30,188 | |||
| DnB/Nordea | 97,564 | |||
| A/ B Notes 2) | 150,000 | |||
| Repayments | ||||
| Italian Banks | EUR | -8,904 | ||
| DnB/Nordea | EUR | -33,256 | ||
| Other | EUR | -325 | ||
| Other movements | ||||
| Capitalized loan fees | -11,456 | |||
| Amortized loan fees on loans | 948 | |||
| Currency translations | ||||
| Balance at 31 December 2017 | 298,760 |
1) Relates to different facilities and draw downs with an interest between EURIBOR + 2% - 4%.
2) Interest on B notes EURIBOR 6.5%.
As of 31 December 2017, the Company had long-term loan balance of NOK 101 million relating to the financing of the Axactor Norway (former "IKAS") acquisition in Q2 2016, EUR 13,7 million relating to the Altor acquisition in Q4 2016, EUR 50,9 million relating to purchase of portfolios and secured assets in Spain and SEK 305 million relating to the purchase of Swedish portfolios.
The existing agreeement with DNB Bank ASA and Nordea Bank AB has been renegotiated about the terms for refinancing of the existing debt facility. The debt facility will increase from current EUR 160m to EUR 350m, whereof 150m are in the form of accordion options. The new facility allows for a significant increase of the current NPL loan-to-value ratio for new and existing NPL portfolios, includes a true borrowing base concept, and removes the current cash sweep mechanism. The new facility has final maturity 3 years after signing.
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 with the co-invest vehicle in Luxembourg as well as the REO Holding company in Luxembourg are not a part of the agreement or the security arrangement.
The Co-invest SPV which the company owns with Geveran has issued Notes in the amount of EUR 150 million which Sterna Finance, a company in the Geveran Group, has subscribed to.
Axactor has during the last twelve months acquired shares in the below companies and consequently controls the subsidiaries from the date of acquisition. In the purchase price allocations (PPA), the assets and liabilities of the companies have been measured at the estimated fair value at the acquisition dates.
The preliminary purchase price allocation identified fair value adjustments on intangible assets like customer relations, databases, off market contracts, goodwill and deferred tax liabilities/assets. The residual value of the purchase price will be allocated to goodwill.
| Company | |
|---|---|
| EUR thousand | Profact |
| Date of acquisition | Feb 28, 2017 |
| Acquired part of company | 100 % |
| Purchase price | 1,257 |
| - whereof cash consideration | 1,257 |
| - whereof share consideration | |
| - whereof Put/Call option liability | |
| ASSETS | |
| Non-current assets | |
| Intangible assets | |
| Database | 314 |
| Goodwill | 1,242 |
| Tangible assets | |
| Plant and machinery | 50 |
| Long term financial assets | |
| Total non-current assets | 1,606 |
| Current assets | |
| Current receivables | 351 |
| Other current assets | 94 |
| Cash & cash equivalents | |
| Total current assets | 445 |
| Total Assets | 2,051 |
| Non-current liabilities | |
| Total non-current liabilities | - |
| Current liabilities | |
| Trade payables | 433 |
| Other short-term liabilities | 361 |
| Total current liabilities | 794 |
| Total Net assets | 1,257 |
| Net sales 2017 (full year) | 9,176 |
| Profit 2017 (full year) | 2,831 |
| Net sales 2017 for Axactor period | 8,917 |
| Profit 2017 for Axactor period | 2,867 |
| Name | Holding of shares |
% Share |
|---|---|---|
| GEVERAN TRADING CO LTD | 173,902,500 | 11.47 % |
| VERDIPAPIRFONDET DNB | 104,394,050 | 6.89 % |
| TVENGE TORSTEIN INGVALD | 70,000,000 | 4.62 % |
| FERD AS | 53,351,399 | 3.52 % |
| SONGA TRADING INC | 47,423,467 | 3.13 % |
| VERDIPAPIRFONDET ALFRED BERG GAMBA | 35,553,765 | 2.34 % |
| VERDIPAPIRFONDET DELPHI NORDEN | 28,848,609 | 1.90 % |
| ARCTIC FUNDS PLC | 24,845,540 | 1.64 % |
| VERDIPAPIRFONDET ALFRED BERG NORGE | 21,901,448 | 1.44 % |
| FIRST GENERATOR | 20,537,076 | 1.35 % |
| STATOIL PENSJON | 20,494,327 | 1.35 % |
| GVEPSEBORG AS | 20,364,945 | 1.34 % |
| VPF NORDEA NORGE VERDI | 20,131,026 | 1.33 % |
| DnB NOR MARKETS, AKSJEHAND/ANALYSE | 18,627,202 | 1.23 % |
| MOHN STEIN | 17,506,240 | 1.15 % |
| ALPETTE AS | 16,616,431 | 1.10 % |
| NORDNET LIVSFORSIKRING AS | 15,682,640 | 1.03 % |
| CITIBANK, N.A. | 13,870,653 | 0.91 % |
| NOMURA INTERNATIONAL PLC | 11,955,765 | 0.79 % |
| VERDIPAPIRFONDET ALFRED BERG AKTIV | 11,910,518 | 0.79 % |
| MARTIN IBEAS DAVID | 11,451,250 | 0.76 % |
| LOPEZ SANCHEZ ANDRES | 11,451,250 | 0.76 % |
| BORGEN INVESTMENT GROUP NORWAY AS | 11,000,000 | 0.73 % |
| TVENGE ØYSTEIN ERLING | 11,000,000 | 0.73 % |
| VPF NORDEA KAPITAL | 10,493,597 | 0.69 % |
| LATINO INVEST AS | 10,300,000 | 0.68 % |
| JPMORGAN CHASE BANK, | 9,924,655 | 0.65 % |
| PECUNIA FORVALTNING AS | 9,900,000 | 0.65 % |
| VPF NORDEA AVKASTNING | 9,517,055 | 0.63 % |
| VERDIPAPIRFONDET DELPHI NORGE | 9,000,000 | 0.59 % |
| Total 30 largest shareholders | 851,955,408 | 56.18 % |
| Other shareholders | 664,533,361 | 43.82 % |
| Total number of shares | 1,516,488,769 | 100.0 % |
| Total number of shareholders | 11,456 |
| Name | Holding of shares |
% Share |
|---|---|---|
| GEVERAN TRADING CO LTD 1) | 173,902,500 | 11.47 % |
| LOPEZ SANCHEZ, ANDRES 2) | 11,451,250 | 0.76 % |
| MARTIN IBEAS, DAVID 3) | 11,451,250 | 0.76 % |
| ALPETTE AS 4) | 16,616,431 | 1.10 % |
| LATINO INVEST AS 5) | 10,300,000 | 0.68 % |
| BANCA SISTEMA S.P.A 6) | 6,045,041 | 0.40 % |
| FARSTAD, SIV 7) | 2,000,000 | 0.13 % |
| BJØRN ERIK NESS 8) | 775,000 | 0.05 % |
| SCHNEIDER, SUSANNE LENE RANGNES 9) | 398,320 | 0.03 % |
| BRITA EILERTSTEN 10) | 100,000 | 0.01 % |
| BERGSJO AS 11) | 63,000 | 0.00 % |
1) Geveran Trading Co Ltd owns 50% of Luxco Invest1 S.A., a company controlled and consolidated by Axactor Group.
2) Andres Lopez Sanche is a member of the Axactor Spain management team and former owner of ALD, Spain
3) David Martin Ibeas is a member of the Axactor Spain management team and former owner of ALD, Spain
4) Alpette AS is controlled by Endre Rangnes who is the CEO of Axactor AB
5) Latino Invest AS is controlled by Johnny Tsolis who is a member of the executive management team of Axactor AB
6) Banca Sistema S.P.A. owns 10% of the shares in CS Union, the Axactor collection platform in Italy
7) Siv Farstad is a member of the executive management team of Axactor AB
8) Bjørn Erik Ness is the chairman of the Board of Directors of Axactor AB
9) Susanne L. R. Schneider is related to the CEO of Axactor AB
10) Brita Eilertsten is member of the Board of Directors of Axactor AB
11) Bergsjo AS is controlled by Beate Nygårdshaug who is member of the Board of Directors of Axactor AB
| 03.05.2018 |
|---|
| 25.07.2018 |
| 30.10.2018 |
| 01.02.2019 |
| 04.05.2018 |
| 05.04.2019 |
The company's annual report will be available on the company's website.
Contact details
Axactor AB (publ) Hovslagargatan 5B, bottom floor 111 48 STOCHOLM Sweden
Telephone: +46 8 402 28 00 [email protected] www.axactor.com
The shares of Axactor AB (publ.) are listed on the Oslo Stock Exchange, ticker symbol AXA.
Cautionary Statement: Statements and assumptions made in this document with respect to Axactor AB'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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