Earnings Release • Mar 12, 2019
Earnings Release
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| Informazione Regolamentata n. 1967-17-2019 |
Data/Ora Ricezione 12 Marzo 2019 18:41:23 |
MTA | |
|---|---|---|---|
| Societa' | : | doBank SpA | |
| Identificativo Informazione Regolamentata |
: | 115000 | |
| Nome utilizzatore | : | DOBANKN02 - Fabio Ruffini | |
| Tipologia | : | 3.1; 1.1 | |
| Data/Ora Ricezione | : | 12 Marzo 2019 18:41:23 | |
| Data/Ora Inizio Diffusione presunta |
: | 12 Marzo 2019 18:41:24 | |
| Oggetto | : | Statements for 2018, Call of Ordinary Shareholders Meeting and Other Resolutions |
BoD meeting: Approval of Draft Financial |
| Testo del comunicato |
Vedi allegato.
Rome, 12 March 2019 – Confirming the preliminary results disclosed on February 11, 2019, the Board of Directors of doBank S.p.A. (the "Company" or "doBank") today approved the draft financial statements, which will be submitted to the approval of the Shareholders' Meeting, and the consolidated financial statements at December 31, 2018.
Consolidated financial highlights as at December 31, 2018 compared with December 31, 2017.
Portfolio under management
The Board of Directors has resolved to propose to the Shareholders' Meeting the distribution of dividends related to the fiscal year 2018 for € 36,836,956 corresponding to 70% of consolidated net income excluding non-recurring items (70% payout). Dividend per each ordinary share as at December 31, 2018, including treasury shares equal to 1.9% of share capital, is equal to €0.460, before taxes.
1 Excluding non-recurring items connected with the launch of our new businesses, notably our operations in Greece and in the UTP segment, and part of the costs associated with the acquisition of Altamira Asset Management
In 2018, doBank had gross revenues of €233.5 million, up 9% compared with the previous year (€213.5 million) thanks to the expansion of all the main revenue components.
More specifically servicing revenues, the focus of the Group's operations and representing 88% of consolidated revenues, amounted to €205.5 million, compared with €194.7 million (+6%) the previous year. The growth mainly reflects the increase in performance fees, connected with developments in collections and assets under management, as well as portfolio transfer indemnities. The average level of base fees and performance fees was stable in 2018 compared with the previous year, reflecting the criteria adopted in selecting new contracts, which gave preference to those with the greatest fee-generation potential.
Revenues from co-investment and revenues from ancillary products and minor activities totalled €28.0 million, an increase of 49% compared with 2017, equal to 12% of total revenues. The expansion reflected income from the ABSs issued in the Romeo SPV and Mercuzio Securitisation securitisations, the growth in revenue from data remediation, business information, due diligence and master servicing activities and the reimbursement of expenses incurred by the doBank Hellas branch in Greece, which amounted to €3.2 million.
Fee and commission expense amounted to €23.9 million (€20.1 million in 2017), with the rise reflecting the expansion of collections and ancillary services. Net revenues amounted to €209.6 million at December 31, 2018, up 8% on 2017 (€193.4 million).
Operating expenses amounted to €128.3 million, up 4% compared with €123.3 million in 2017, despite the increase of 9% in revenues and the launch of new initiatives in Greece and Italy, underscoring the Group's operating leverage. The rise in staff expenses (from €83.4 million at December 31, 2017 to €94.0 million in 2018) is attributable to the strengthening of top management and the introduction of the new incentive mechanism introduced following the listing. This increase was attenuated by a decline in IT costs, due to lower running costs and the absence of the projects under way in 2017, as well as gains from cost efficiencies in overheads.
EBITDA before non-recurring items at end of 2018 amounted to €84.0 million, up about €13.9 million (+20%) compared with 2017 (€70.1 million). As a percentage of revenues, EBITDA before non-recurring items improved by 3 percentage points, going from 33% in 2017 to 36% in 2018. Including the non-recurring costs recognised in the year, which were equal to €2.7 million and included the start-up costs incurred to begin operations in Greece, those associated with the development of the UTP business in Italy and part of the costs connected with the Altamira acquisition, EBITDA would have amounted to €81.3 million, up 16% compared with 2017 (and an EBITDA margin of 35%).
The profit/loss of equity investments at December 31, 2018 amounted to €0.9 million, reflecting the gain on the disposal of the 45% stake in BCC Gestione Crediti S.p.A., a member of the Iccrea Banking Group.
Net profit excluding non-recurring items amounted to €52.6 million in 2018, up 17% compared with the €45.0 million posted at December 31, 2017. Net profit for 2018 amounted to €50.9 million, an increase of 13% compared with the previous year.
Net working capital amounted to €77.4 million, an improvement on the €78.3 million registered at December 31, 2017 despite the higher revenues. The positive developments in working capital, in line with expectations, are linked to the shift of the portfolio towards the Investor customer segment, which has a more favourable working capital cycle.
The positive net financial position (cash) amounted to €67.9 million at December 31, 2018, a substantial improvement on the €38.6 million posted at the end of 2017, and was characterised by the absence of bank
debt. The net financial position includes the distribution of dividends of €30.9 million and the investment in units of the Italian Recovery Fund (formerly Atlante II) of €13 million. Free cash flow generation in 2018 amounted to €65.6 million.
Deferred tax assets amounted to €81.4 million at December 31, 2018, slightly down compared with the end of 2017 (€94.0 million), mainly reflecting the reversal of assets on prior-year tax losses.
The CET1 ratio was 26.1%, compared with 26.4% at December 31, 2017 (the CET1 ratio for the CRR Group was 19.4%, compared with 29.8% at December 31, 2017).
Assets under management (GBV) at December 31, 2018 amounted to €82.2 billion, an increase on €76.7 billion at the end of 2017, primarily reflecting the entry of €13.2 billion in GBV from new servicing contracts. During 2018, the portfolio transferred by REV, the Berenice portfolio, the portfolio of loans originated by the MPS Group, by Banca Agricola Popolare di Ragusa and that associated with the "Milano" project, together with minor portfolios, were gradually onboarded. These contracts were accompanied by about €1.2 billion (GBV) in loans from existing customers as well ordinary developments in collections, cancellations and transfers of portfolios. If we also include the €1.8 billion contract signed with Greece's four systemic banks, for which active management began in 2019 following completion of the onboarding and business planning stages, the €2 billion contract granted by the Iccrea Banking Group and the "Riviera" portfolio, assets under management at the end of December would amount to €86.4 billion.
At December 31, 2018, collections on loans under management amounted to €1,961 million, an increase of 7% compared with €1,836 million in 2017, in line with developments in the GBV of assets under management, which gradually increased over the course of the year.
The collection rate at the end of 2018 (the ratio of collections in the last 12 months to end-period GBV), excluding new management contracts, was 2.5% (2.4% at December 31, 2017). Including new servicing contracts, the indicator would be 2.4%, unchanged on the 2.4% registered at the end of 2017. The developments in collections in 2018 confirm the forecasts in the 2018-2020 Business Plan, including the target of raising the collection rate to more than 2.6% in 2020.
The Board of Directors has also approved the financial statements for the fiscal year 2018 of the group parent company doBank S.p.A., which reported net revenues equal to € 147,7 million (€135,1 million in 2017), EBITDA equal to € 52,5 million (€53,0 million in 2017) and Net Income, after taxes, equal to € 43,4 million (€33,9 million in 2017).
The Board of Directors has resolved to propose to the Shareholders' Meeting the distribution of dividends related to the fiscal year 2018 for €36,836,956, corresponding to 70% of consolidated net income excluding non-recurring items (70% payout). Dividend per each ordinary share as at December 31, 2018, including treasury shares corresponding to 1.9% of share capital, is equal to €0.460, before taxes. No dividend will be distributed in relation to treasury shares held by doBank as of the dividend record date. The dividend, pending approval by the Shareholder's Meeting, will be payable as of May 29, 2019 (with coupon detachment on May 27 and record date on May 28).
There were no significant events following the close of the period.
Performance in 2018 confirms the objectives of the 2018-2020 Business Plan, presented in June 2018, which is focused on strengthening doBank's leadership in the European credit servicing market.
More specifically, Group revenues are expected to grow by an average of 8% to 9% per year between 2017 and 2020 (CAGR), while Group EBITDA is forecast to rise by at least 15% per year on average over the same period, with earnings per share expanding faster than EBITDA and a dividend payout ratio of at least 65% of consolidated net profit.
In view of the importance of the agreement for the acquisition of Altamira Asset Management (press release of December 31, 2018), the Group plans to update its Business Plan targets following the closing of the acquisition, which is expected by May 2019.
During today's meeting, the Board of Directors has also:
a) resolved to call the Ordinary Shareholders' Meeting, on 17 April 2019, in single call, for the approval of the individual and consolidated Financial Statements at 31 December 2018 (and the expected Reports); the allocation of the profit for the year and distribution of the dividend; the annual report on remuneration and incentive policies, with financial instrument plans and Severance policy; the integration of the fees to the auditing company for the years ended December 31, 2019 to December 31, 2024..
The notice of call will be published within the terms of the law on the Company's website at www.dobank.com, in the section "Governance - Shareholders' Meeting https://www.dobank.com/it/governance/ shareholders' meeting at the "eMarket Storage" storage mechanism, managed by Spafid Connect SpA and available on the website as well as an excerpt in the newspaper MF / Milano Finanza.
The documentation and Reports relating to the aforementioned Ordinary Shareholders' Meeting will be made available to the public in the manner and within the terms of the law.
***
1) possession of the requisites provided for by the current legislation of the Director Marella Idi Maria Villa, appointed by the Shareholders' Meeting on March 5, 2019 and previously co-opted on January 25, 2019. In particular, the Board of Directors has ascertained:
that the independence requirements set forth in art. 148, 3rd paragraph, of Legislative Decree 58/1998 (TUF), by art. 3 of the Corporate Governance Code for listed companies and by the Articles of Association are not met;
The curriculum vitae of the Director Marella Idi Maria Villa is available on the Company's website at www.doBank.com, in the section "Governance / Board of Directors".
c) resolved, subject to the favorable opinion of the Statutory Auditors, to appoint Elena Gottardo as Financial Reporting Officer in charge of preparing corporate accounting documents pursuant to the art. 154-bis of the Consolidated Finance Act, a position previously held by Mauro Goatin, called, with effect from 13 March 2019, to fill the new position of Chief Operations Officer, reporting directly to the Chief Executive Officer.
***
The curriculum vitae of Elena Gottardo, which on the basis of the information available to the company does not hold doBank shares, is available at the registered office of the Company .
***
Finally, the Board of Directors has approved:
Mauro Goatin, in his capacity as the officer responsible for preparing corporate accounting documents, certifies – pursuant to Article 154-bis, paragraph 2, of Legislative Decree 58/1998 (the Consolidated Financial Intermediation Act) – that the accounting information in this press release is consistent with the data in the accounting documentation, books and other accounting records.
All the documents submitted to the approval of the Shareholders' Meeting, including the Annual Financial Report as at December 31, 2018 will be made available to the public at the Company's headquarters and at Borsa Italiana, as well as on the website www.dobank.com in the Investor Relations/Financial Reports and Presentations" section by the statutory deadlines.
doBank subscribes to the simplified regime stipulated by articles 70, clause 8 and 71, clause 1-bis, of Consob Regulation for issuers n. 11971/1999, as subsequently modified, taking advantage of the possibility to waiver the obligation to publish information documents as per articles 70, clauses 6 and 71, clause 1 of the said
***
Regulation in case of significant transactions of merger, spin-off, capital increase via contribution in kind, acquisitions and divestitures.
***
doBank, listed on the Electronic Stock Market (Mercato Telematico Azionario) organised and operated by Borsa Italiana S.p.A. since July 2017, is a leader in Italy in the business of managing primarily non-performing loans. With more than 18 years of experience in the sector, the Group is a long-standing partner of leading financial institutions and national and international investors. It had a portfolio of assets under management of €82 billion (in terms of gross book value) at December 31, 2018. Managing all phases of the loan lifecycle with an advanced operational approach and the highest servicer ratings in Europe, in 2018 the Group had gross revenues of about €234 million, with an EBITDA margin of 36% (excluding non recurring items) and strong cash generation.
| Image Building | Investor Relations |
|---|---|
| doBank S.p.A. | doBank S.p.A. |
| Simona Raffaelli – Emilia Pezzini | Fabio Ruffini |
| [email protected] | 06 47979154 |
(€/000)
| Condensed consolidated income statement | Year | Year | Change | ||
|---|---|---|---|---|---|
| 2018 | 2017 | Amount | % | ||
| Serv icing rev enues | 205,539 | 194,746 | 10,793 | 6% | |
| Co-inv estment rev enues | 911 | 665 | 246 | 37% | |
| Ancillary and other rev enues | 27,053 | 18,136 | 8,917 | 49% | |
| Gross Revenues | 233,503 | 213,547 | 19,956 | 9% | |
| Outsourcing fees | (23,910) | (20,141) | (3,769) | 19% | |
| Net revenues | 209,593 | 193,406 | 16,187 | 8% | |
| Staff expenses | (94,054) | (83,391) | (10,663) | 13% | |
| Administrativ e expenses | (34,246) | (39,913) | 5,667 | (14)% | |
| Operating expenses | (128,300) | (123,304) | (4,996) | 4% | |
| EBITDA | 81,293 | 70,102 | 11,191 | 16% | |
| EBITDA Margin | 35% | 33% | 2% | 6% | |
| Non-recurring items included in EBITDA ⁽¹⁾ | (2,712) | - | (2,712) | n.s. | |
| EBITDA excluding non-recurring items | 84,005 | 13,903 | 20% | ||
| EBITDA Margin excluding non-recurring items | 36% | 3% | 10% | ||
| Impairment/Write-backs on property, plant, equipment and intangible assets | (2,750) | (2,284) | (466) | 20% | |
| Net Prov isions for risks and charges | (318) | (4,041) | 3,723 | (92)% | |
| Net Write-downs of loans | 862 | 1,776 | (914) | (51)% | |
| Net income (losses) from inv estments | 917 | 2,765 | (1,848) | (67)% | |
| EBIT | 80,004 | 68,318 | 11,686 | 17% | |
| Net financial interest and commissions | 198 | (184) | 382 | n.s. | |
| EBT | 80,202 | 68,134 | 12,068 | 18% | |
| Income tax for the year | (29,362) | (22,750) | (6,612) | 29% | |
| Profit (loss) from group of assets sold and held for sale net of tax | - | (390) | 390 | (100)% | |
| Net Profit (Loss) attributable to the Group | 50,840 | 44,994 | 5,846 | 13% | |
| Non-recurring items included in Net Profit (Loss) attributable to the Group (1,784) | - | (1,784) | n.s. | ||
| Net Profit (Loss) attributable to the Group excluding non-recurring items 52,624 | 7,630 | 17% | |||
| Earnings per share (Euro) | 0.65 | 0.58 | 0.07 | 13% | |
| Earnings per share excluding non-recurring items (Euro) | 0.67 |
| Change | ||||
|---|---|---|---|---|
| Condensed balance sheet | 12/31/2018 | 12/31/2017 | € | % |
| Cash and liquid securities | 74,443 | 50,364 | 24,079 | 48% |
| Financial assets | 36,312 | 25,960 | 10,352 | 40% |
| Equity inv estments | - | 2,879 | (2,879) | (100)% |
| Tangible assets | 2,810 | 2,772 | 38 | 1% |
| Intangible assets | 8,327 | 6,041 | 2,286 | 38% |
| Tax assets | 87,355 | 103,941 | (16,586) | (16)% |
| Trade receiv ables | 99,224 | 99,337 | (113) | (0)% |
| Assets on disposal | 710 | 10 | 700 | n.s. |
| Other assets | 7,855 | 6,196 | 1,659 | 27% |
| Total assets | 317,036 | 297,500 | 19,536 | 7% |
| Financial liabilities: due to customers | - | 11,759 | (11,759) | (100)% |
| Trade payables | 21,848 | 21,072 | 776 | 4% |
| Tax Liabilities | 10,174 | 6,105 | 4,069 | 67% |
| Employee Termination Benefits | 9,577 | 10,360 | (783) | (8)% |
| Prov ision for risks and charges | 20,754 | 26,579 | (5,825) | (22)% |
| Liabilities on disposal | 6,532 | - | 6,532 | n.s. |
| Other liabilities | 15,362 | 14,928 | 434 | 3% |
| Total Liabilities | 84,247 | 90,803 | (6,556) | (7)% |
| Share capital | 41,280 | 41,280 | - | n.s. |
| Reserv es | 140,915 | 120,700 | 20,215 | 17% |
| Treasury shares | (246) | (277) | 31 | (11)% |
| Result for the period | 50,840 | 44,994 | 5,846 | 13% |
| Total shareholders' equity | 232,789 | 206,697 | 26,092 | 13% |
| Total liabilities and shareholders' equity | 317,036 | 297,500 | 19,536 | 7% |
(€/000) EBITDA 81,293 70,102 Capex (5,408) (6,557) EBITDA-Capex 75,885 63,545 as % of EBITDA 93% 91% Adjustment for accrual on share-based incentiv e system payments 5,814 2,195 Changes in NWC 889 1,055 Changes in other assets/liabilities (6,454) 6,666 Operating Cash Flow 76,134 73,461 Tax paid (IRES/IRAP) (10,480) (1,170) Free Cash Flow 65,654 72,291 (Inv estments)/div estments in financial assets (8,051) (12,509) Equity (inv estments)/div estments 2,610 1,694 Div idend paid (30,907) (52,330) Net Cash Flow of the period 29,306 9,146 Net financial Position - Beginning of period 38,605 29,459 Net financial Position - End of period 67,911 38,605 Change in Net Financial Position 29,306 9,146 Cash Flow 12/31/2018 12/31/2017
| (€/000) | ||
|---|---|---|
| Key performance indicators | 12/31/2018 | 12/31/2017 |
| Gross Book Value (Eop) - in millions of Euro - | 82,179 | 76,703 |
| Collections for the period - in millions of Euro - | 1,961 | 1,836 |
| Collections for the Last Twelv e Months (LTM) - in millions of Euro - | 1,961 | 1,836 |
| LTM Collections/GBV (EoP) | 2.4% | 2.4% |
| LTM Collections Stock/GBV Stock (EoP) | 2.5% | 2.4% |
| Staff FTE/Total FTE | 37% | 37% |
| LTM Collections/Serv icing FTE | 2,668 | 2,510 |
| Cost/Income ratio | 61% | 64% |
| EBITDA | 81,293 | 70,102 |
| Non-recurring items | (2,712) | - |
| EBITDA excluding non-recurring items | 84,005 | 70,102 |
| EBT | 80,202 | 68,134 |
| EBITDA Margin | 35% | 33% |
| EBITDA Margin excluding non-recurring items | 36% | 33% |
| EBT Margin | 34% | 32% |
| Earning per share (Euro) | 0.65 | 0.58 |
| Earning per share excluding non-recurring items (Euro) | 0.67 | 0.58 |
| EBITDA – Capex | 75,885 | 63,545 |
| Net Working Capital | 77,376 | 78,265 |
| Net Financial Position of cash/(debt) | 67,911 | 38,605 |
Gross Book Value (EoP): Indicates the book value of the loans under management at the end of the reference period, gross of any potential write-downs due to expected loan losses.
Collections for the period: used to calculate commissions for the purpose of determining revenues from the servicing business, they illustrate the Group's ability to extract value from the portfolio under management.
Collections for last 12 months (LTM): collections in the twelve months prior to the reference date. The aggregate is used in interim periods to enable a like-for-like comparison with the annual figure.
LTM collections/GBV (Gross Book Value): the ratio between total gross LTM collections and the period-end GBV of the total portfolio under management. This indicator represents another metric to analyse collections for the period and LTM in absolute terms, calculated in relation to the effectiveness rate of collections, i.e. the yield of the portfolio under management in terms of annual collections and, consequently, commission income from management activities.
LTM collections Stock/GBV Stock (Gross Book Value): the ratio between total gross LTM collections on the portfolio at the start of the reference year and the end-period GBV of that portfolio. Compared with the previous indicator LTM collections/GBV, this metric represents the effectiveness rate of recoveries normalised for the entry of new portfolios during the reference year.
Staff FTE/Total FTE: the ratio between the number of employees who perform support activities and the total number of full-time employees of the Group. The indicator illustrates the efficiency of the operating structure and the focus on management activities.
LTM collections/Servicing FTE: the ratio between total LTM collections and the number of employees who perform servicing activities. The indicator provides an indication of the collection efficiency rate, i.e. the yield of each individual employee specialised in servicing activities in terms of annual collections on the portfolio under management.
Cost/Income ratio: calculated as the ratio between operating expenses and total operating revenues presented in the reclassified Income Statement. It is one of the main indicators of the Group's operating efficiency: the lower the value of the indicator, the greater the efficiency of the Group.
EBITDA and EBT: together with other relative profitability indicators, they highlight changes in operating performance and provide useful information regarding the Group's economic performance.
Non-recurring items: items generated in extraordinary operations such as corporate restructurings, acquisitions or disposals of entities, start-up of new businesses or entry into new markets.
EBITDA excluding non-recurring items: EBITDA attributable to core operations, excluding all items connected with extraordinary operations such as corporate restructurings, acquisitions or disposals of entities, start-up of new businesses or entry into new markets.
EBITDA Margin and EBT Margin: obtained by dividing EBITDA and EBT by Gross Revenues.
Earnings per share: calculated as the ratio between net profit for the period and the number of outstanding shares at the end of the period.
Earnings per share excluding non-recurring items: the calculation is the same as that for earnings per share, but the numerator is equal to net profit for the period excluding non-recurring items net of the associated tax effects. The latter is calculated using the normalised tax rate for the period, i.e. excluding the DTA charge.
EBITDA – Capex: calculated as EBITDA net of investments in fixed capital (including property, plant and equipment and intangible assets) ("Capex"). Together with other relative profitability indicators, it highlights changes in operating performance and provides an indication on the Group's ability to generate cash. As from 2018, Capex also includes leasehold improvements. Accordingly the figure for 2017 has been adjusted in accordance with this approach.
Net Working Capital: this is represented by receivables for fees invoiced and accruing, net of payables to suppliers for invoices accounted for and falling due in the period.
Net Financial Position: this is calculated as the sum of cash, cash equivalents and highly-liquid securities, net of amounts due to banks for loans and due to customers for the current accounts opened with the Group.
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