Intrum — Interim / Quarterly Report 2018

Jul 24, 2018

Interim report January-June 2018

Interim report January-June 2018

Second quarter 2018

• Consolidated net revenues for the second quarter of 2018 increased to SEK 3,630 M (1,796). Pro forma for the second quarter of 2017, net sales were SEK 3,204 M.
• Operating earnings improved to SEK 1,240 M (476). Pro forma for the second quarter of 2017, operating earnings were SEK 865 M.
• The operating earnings of SEK 1,240 M include non-recurring items of SEK-173 M (pro forma in the preceding year-192), items affecting comparability of SEK 218 M (pro forma in the preceding year, 0) and revaluations of SEK -1 M (pro forma in the preceding year 64). Accordingly, operating earnings excluding non-recurring items, items affecting comparability and revaluations increased to SEK 1,196 M (pro forma in the preceding year 993).
• Net earnings for the quarter amounted to SEK 701 M (98) and earnings per share were SEK 5.33 (1.32).
• Cash flow from operating activities increased to SEK 1,679 M (703).
• The carrying amount for portfolio investments has risen by 7 percent since the end of the preceding quarter. Portfolio investments for the quarter amounted to SEK 2,385 M (pro forma in the preceding year 1,287). The return on portfolio investments was 15 percent (pro forma in the preceding year, 17 percent).
• In Credit Management, revenue growth on a pro forma basis was 16 percent (6 percent excluding items affecting comparability), and the operating margin increased to 34 percent (28 percent excluding non-recurring items and items affecting comparability).

Second quarter

20%

Quarterly change in EBIT excluding nonrecurring items, items affecting comparability and revaluations

$7%$

Quarterly change in book value of portfolio investments

15%

Quarterly return on portfolio investments

28%

Operating margin for the quarter, excluding non-recurring items and items affecting comparability, for Credit Management

SEK 2.4 billion

Investments in portfolios for the quarter

Pro forma

The merger with Lindorff was implemented on June 27, 2017. Accordingly, Lindorff has been included in the consolidated income statement and balance sheet since the second quarter of 2017. Where comparative figures are referred to as "pro forma", this mean that they are reported with Lindorff consolidated as of January 1, 2016. In connection with the merger, Intrum Justitia undertook to divest its Norwegian subsidiaries, as well as Lindorff's Swedish, Finnish, Danish and Estonian subsidiaries. These subsidiaries were divested in the second quarter of 2018, and are therefore reported as discontinued operations.

SEKM unless otherwise indicated	April-June 2018	April-June 2017	Pro forma April-June 2017	Pro forma Change %	Jan-June 2018	Jan-June 2017	Pro forma Jan-June 2017	Pro forma Change %	Full-year 2017	Pro forma Full-year 2017
Revenues Thereof revenues in Euro (%)	3,630 64	1.796 49	3,204 63	13	6,745 61	3,347 50	6,132 61	10	9,433 56	12,219 59
Cash EBITDA EBITDA EBIT Thereof EBIT in Euro (%)	2.596 1.593 1,240 66	995 518 476 34	1,843 1.088 865 50	41 46 43	4.544 2.667 2.137 61	2.006 1.027 944 41	3.579 2.093 1,706 54	27 27 25	5.953 3.165 2.728 52	7.526 4,231 3,489 57
Non-recurring items (NRI's) in EBIT Non-recurring items (NRI's) in net financial items Items affecting comparability Amortization on client relationships Revaluations of portfolio investments	$-173$ $\mathbf o$ 218 $-288$ -1	$-163$ $-316$ $\circ$ $-7$ 41	$-192$ $-316$ $\circ$ n/a 64		$-262$ $\circ$ 218 $-378$ 12	$-180$ $-316$ $\circ$ $-13$ 40	$-282$ $-316$ $\Omega$ n/a 105	$\Omega$	$-397$ -316 25 $-209$ $-3$	$-499$ $-316$ 25 $-362$ 63
Cash EBITDA excl NRI's EBITDA excl NRI's EBIT excl NRI's EBIT excl NRI's, items affecting comparability and revaluations	2.769 1,766 1,413 1.196	1,158 681 639 598	2.035 1.280 1.057 993	36 38 34 20	4,806 2,929 2.399 2.169	2.186 1,207 1,124 1.084	3.861 2.375 1,988 1.883	24 23 21 15	6,350 3.562 3,125 3.103	8.025 4,730 3,988 3,900
Net earnings	701	98	$-17$		1.065	445	261		1,503	1,318
CMS growth, % CMS service line margin excl NRI's, %	16 34	18 26	n/a 30		9 30	16 25	n/a 29		65 26	16 28
Estimated remaining collections, ERC Portfolio investments Book value portfolio investments Return on portfolio investments excl NRI's, %	49.313 2.385 24,244 15	40,006 835 18,748 20	40,006 1,287 18,748 17	23 85 29	49,313 3.758 24,244 15	40,006 3,209 18,748 19	40.006 3.809 18,748 17	23 $-1$ 29	44,603 7.170 21,149 16	44,603 7,804 21,149 16
Net Debt/Pro forma Cash EBITDA excl NRI's	3.9	3.9	n/a		3.9	3.9	n/a		4.1	n/a

Comment by President and CEO Mikael Ericson

I am very pleased with the result of the second quarter of 2018. We have been making good and continued progress since the start of the year, hence there are encouraging signs that we are beginning to build momentum. This is clearly seen in the strong underlying EBIT which is up 20% compared to the first quarter.

The Portfolio Investments half of the business continues to deliver sustainable growth with a high investment level of SEK 2,4bn. At the same time, and more importantly, we have been able to maintain a healthy level of returns (ROI at 15 percent) by focusing on pricing discipline and sustained high level of collection performance. We are also making progress in the CMS area as synergy benefits and production efficiency activities start to take effect. Underlying revenues are up 2 percent compared to Q1 and margins reached 28 percent from 25 percent in Q1 2018. We are conscious of remaining challenges, particularly in Spain where the top line remains under pressure and where we will continue to take action on costs to protect margins if necessary.

The post-merger integration of our operations is progressing well and the relocation of activities, closure of sites and reductions of FTEs is approaching the final phase in all countries. We have now reached an annualized synergy run-rate of SEK 380M and we will deliver the full synergy benefit on time and according to previously communicated costs.

The second half of 2018 will undoubtedly be a period of intense activity in the European purchased debt market with a number of large transactions underpinning generally high levels of supply. Given our strong cash flow and solid funding position we are remaining confident in our ability to continue to source attractive deals at good returns. Those will support both our longer term growth and deleveraging objectives. The finalization of details of our strategic partnership with Banca Intesa Sanpaolo is also proceeding as planned and the portfolio is performing well in line with our business case. The close cooperation between the two companies has been highly productive and we anticipate closing in Q4 as earlier communicated.

After the end of the quarter our first acquisition in Brazil was realized, which will enable us to explore and familiarize ourselves with the market.

In late May we published our yearly European Payment Report, which showed among other things that a prospering economy shrinks bad debt losses among European companies. This yearly report, closely monitoring fair payment terms, is one of many important efforts we make to promote what we call a sound economy.

We anticipate a busy remainder of the year. It is a very active market and we have a strong pipeline for portfolio investments and good opportunities in CMS. Hence, we are confident of being able to continue to take advantage of our competitive strengths, broad and deep footprint, and further improve our fundamental collection performance demonstrating steady progress towards our 2020 goals.

Group

SEK M unless otherwise indicated	April June 2018	April-June 2017	Pro forma April-June 2017	Pro forma Change %	Jan-June 2018	Jan-June 2017	Pro forma Jan-June 2017	Pro forma Change	Full-vear 2017	Pro forma Full-year 2017
Revenues EBIT	3.630 .240	.796 476	3.204 865	13 43	6.745 2.137	3.347 944	6.132 1.706	1 C 25	9.433 2.728	12.219 3,489
Cash EBITDA excl NRI's EBITDA excl NRI's	2.769 .766	1.158 681	2.035 1.280	36 38	4,806 2.929	2.186 1.207	3.861 2,375	24 23	6,350 3.562	8.025 4,730
EBIT excl NRI's	1,413	639	1.057	34	2.399	1.124	1.988	21	3.125	3.988
Net financial items Tax Net earnings	$-344$ $-194$ 701	$-358$ $-21$ 98	$-883$ $-59$ $-17$	$-61$	$-667$ $-320$ 1.065	$-404$ $-105$ 445	$-1.373$ $-183$ 261	$-51$	-404 $-105$ 445	$-1.942$ $-467$ .318

Revenues and operating earnings

Consolidated net revenues for the second quarter increased to SEK 3.630 M (1.796). Pro forma for the second quarter of 2017, net sales were SEK 3,204 M. Consolidated operating earnings for the second quarter improved to SEK 1,240 M (476). The increase in revenues and operating earnings is primarily attributable to the merger with Lindorff. Pro forma for the second quarter of 2017, operating earnings were SEK 865 M. The operating earnings of SEK 1,240 M include nonrecurring items of SEK -173 M (pro forma in the preceding year, -192), items affecting comparability of SEK 218 M (pro forma in the preceding year, 0) and revaluations of SEK -1 M (pro forma in the preceding year, 64). Accordingly, operating earnings excluding non-recurring items, items affecting comparability and revaluations increased to SEK 1,196 M (pro forma in the preceding year, 993).

The outcome in the Group's regions and service lines is accounted for in greater detail below.

Net financial items

Net financial items for the quarter amounted to SEK -344 M (-358). Net interest for the quarter amounted to SEK -289 M (-30). Exchange rate differences are included in net financial items in the amount of SEK -5 M (0), and other financial items are included by SEK -50 M (-328). Other financial items during the second quarter of the preceding year included non-recurring costs of SEK 316 M in connection with the Group's refinancing. Net interest and other financial items have been adversely affected by increased borrowing to finance the merger with Lindorff.

Taxes

Earnings for the quarter were charged with tax of 22 percent. Further information regarding an assessment of future tax expenses is provided in the section 'Taxation assessments'.

Cash flow and investments

SEKM unless otherwise indicated	April-June 2018	April-June 2017	Jan-June 2018	Jan-June 2017	Full-year 2017
Cash flow from operating activities	1.679	703	3.127	1.398	4,535
Cash flow from investing activities	$-2,865$	$-313$	2.765	$-2.465$	$-7.547$
Total cash flow from operating and investing activities	$-1,186$	390	5,892	$-1,067$	$-3,012$
Cash flow from investing activities excl liquid assets in acquired subsidiaries	$-2,865$	$-1.278$	3.165	$-3.439$	-8,585
Total cash flow from operating and investing activities excl liquid assets in acquired subsidiaries	$-1,186$	-575	6.292	$-2.041$	-4,050

Over the second quarter, cash flow from operating activities increased to SEK 1,679 M (703). The increase is attributable to increased cash flow deriving from the merger with Lindorff.

Financing

SEK M	30 Junl	30 Jun	Change
unless otherwise indicated	2018	2017	%
Net Debt	35.265	34.254
Net Debt/Pro forma Cash EBITDA excl NRI's	3.9	3.9
Shareholders' equity	23.150	21.198	9
Cash and cash equivalents	968	1.335	$-27$

Consolidated net debt has decreased by approximately SEK 2 billion since the start of the year. The proceeds have been received from the sale of Intrum Justitia's former subsidiary in Norway and Lindorff's former subsidiaries in Sweden, Denmark, Finland and Estonia, with the sale transaction being completed on March 20, 2018, while, on the other hand, disbursements have been made for the year's share dividend and investments in portfolios and joint ventures.

Net debt in relation to pro forma rolling 12-month adjusted cash EBITDA amounted to 3.9 at the end of the quarter. This ratio is calculated by placing current consolidated net debt at the end of the quarter in relation to pro forma cash EBITDA, including operations being phased out and including a calculated cash EBITDA throughout the period for larger units acquired during the period, and excluding non-recurring items (NRIs). Net debt in relation to pro forma rolling 12month adjusted cash EBITDA increased by approximately 0.1 in the second quarter.

At the end of June, Intrum issued a two-year, non-covered bond of SEK1 billion, at STIBOR 3m +190 basis points. The bonds have been issued within the existing Swedish MTN program, with a settlement date in July, and will be listed on Nasdaq Stockholm. The funds will be used in the company's ongoing operations.

The merger with Lindorff was implemented on June 27, 2017 through a non-cash issue, whereby Intrum Justitia AB issued 59,193,594 new Intrum shares in exchange for all shares in Lock TopCo AS, the parent company of the Lindorff group. Accordingly, there were 131,541,320 shares in Intrum outstanding in the latter part of 2017. Over the second quarter of 2018, 250,000 shares were repurchased for SEK 56 M. Accordingly, the average number of shares outstanding in the second quarter of 2018 was 131,491,591 whereas the average number of shares outstanding in the second quarter of 2017 was 74,299,163.

Goodwill

On June 30, 2018, consolidated goodwill amounted to SEK 31,783 M, compared with SEK 29,565 M on December 31, 2017. Of the increase, SEK 169 M is attributable to the adjustment of the acquisition analysis from the merger with Lindorff, SEK 8 M to new acquisitions during the six-month period and SEK 2,041 M to exchange rate differences.

Regions

Northern Europe

SEKM	April-Junel 2018	Pro forma April-June 2017	Pro forma Change ℅	Fx adi	Jan-June 2018	Pro forma Jan-June 2017	Pro forma Change %	Fx adj	Pro forma Full Year 2017
Revenues excluding revaluations	,020	983			.935	1,910			3.827
EBIT excluding revaluations and NRI's	400	380			688	678		-	.402
EBIT margin excluding revaluations and NRI's, %	39	39			36	35			37

On a pro forma basis, revenues and operating earnings were marginally ahead of last year after adjusted for currency effects. The improvement in earnings is primarily attributable to organic growth in Credit Management.

Central and Eastern Europe

SEKM	April-June 2018	Pro forma April-June 2017	Pro forma Change %	Fx adi	Jan-June 2018	Pro forma Jan-June 2017	Pro forma Change	Fx adi	Pro forma Full Year 2017
Revenues excluding revaluations	903	836		д	1,759	1,610			3.233
EBIT excluding revaluations and NRI's	361	322			660	587	12		1.117
EBIT margin excluding revaluations and NRI's, %	40	39			38	36			35

On a pro forma basis, both service lines have continued their strong momentum, supporting growth in revenues and earnings. Earnings were underpinned by an increased portfolio value and margin improvements from operational excellence. High investment levels in the quarter are driven mainly by major portfolio acquisitions in Greece and Hungary.

Western and Southern Europe

SEK M	April-June 2018	Pro forma April-June 2017	Pro forma Change %	Fx adi $\mathcal{O}/$	Jan-June 2018	Pro forma Jan-June 2017	Pro forma Change %	Fx adj $\mathsf{o}$	Pro forma Full Year 2017
Revenues excluding revaluations EBIT excluding revaluations and NRI's	745 186	613 -97	22 91	16 86	.433 372	1,135 200	26 86	81	2.391 522
EBIT margin excluding revaluations and NRI's, %	25	16			26	18			22

On a pro forma basis, growth was supported by an expanded investment portfolio supported by strong collection performance throughout the region and a step up provided by the acquisition of Italian company CAF in the fourth quarter of 2017, increasing both revenues and earnings. Intrum's strategic partnership with Banca Intesa Sanpaolo will not affect earnings until the completion of the transaction. Intrum's payments to the joint venture company, primarily regarding a pre-payment for the portfolio, are reported in the balance sheet and cash flow statement, while all costs for external funding of the transaction are capitalized to be paid later by the joint venture company. Pure transaction costs for the acquisition are included in common costs as an item affecting comparability (NRI).

Spain

April June 2018	Pro forma April-June 2017	Pro forma Change %	Fx adi	Jan-June 2018	Pro forma Jan-June 2017	Pro forma Change	Fx adi	Pro forma Full Year 2017
963 467 48'	708 195 28	36 139	31 136	1,606 667 42	.372 418 30	60	54	2.705 883 33

On a pro forma basis, earnings were affected by the net effect of a large positive item affecting comparability of SEK 401 M due to the one-off compensation payment from the early termination of a major client contract and SEK -183 M for impairment write-down of client relationships for a client contract with Sabadell. Excluding these items affecting comparability, underlying operating earnings are up by 28 percent. The strong growth in operating earnings, excluding items affecting comparability, against a relatively weak comparison period, temporarily obscures the underlying maturing of several acquired client contracts. At the same time, earnings were affected positively by the growth in the investment portfolio and the effects of the restructuring announced in the first quarter.

The positive items affecting comparability of SEK 401 M provides compensation for lost future revenues and therefore has a long-term financially neutral effect for the Group. The negative item affecting comparability of SEK -183 M pertains to the impairment of an acquired client contract, where the reported value is no longer supported by expected future cash flows. The contract contains significantly poorer contractual protection for the Group than other client contracts acquired in Spain.

Service lines

Credit Management

SEKM	April-June 2018	Pro forma April-June 2017	Pro forma Change	Fx adi	Jan-June 2018	Pro forma Jan-June 2017	Pro forma Change	Fx adj	Pro forma Full Year 2017
Revenues Service line earnings excl NRI's Service line margin excl NRI's, %	2,651 905 34	2,292 684 30	16 32	29	4,860 .453 30	4.445 1,269 29	14		8.852 2,475 28

Growth in revenues and earnings on a pro forma basis is affected positively by the net effect of major positive and negative items affecting comparability in Spain. Excluding currency effects, underlying revenues increased marginally, and service line earnings declined marginally. Most of the units are developing well, with improved collection performance and cost efficiency supporting revenue growth, while the decline in underlying volumes in Spain reduces the overall growth rate. The service line margin for the quarter, excluding non-recurring items (NRIs) and items affecting comparability, is 28 percent, which is 3 percentage points higher than in the first quarter, although still slightly down year on year. Integration synergy benefits from the Merger with Lindorff and operational effectiveness activities are beginning to contribute and are expected to continue to increase going forward. External organic growth in Credit Management was $-1$ percent.

Financial Services

		Pro forma	Pro forma			Pro forma	Pro forma		Pro forma
SEKM	April-June	April-June	Change	Fx adi	Jan-June	Jan-June	Change	Fx adj	Full Year
	2018	2017	℅	%	2018	2017		℅	2017
			o
Revenues	1,588	1.462		4	3.096	2.742	13		5,506
Service line earnings excl NRI's	882	755		12	1.709	1,451	18	14	2.946
Service line margin excl NRI's, %	56	52			55	53			54
Estimated remaining collections	49,313	40.006	23		49.313	40.006	23		44,603
Portfolio investments	2,385	1.287	85		3.758	3.809	$\sim$		7.170
PI book value	24.244	18.748	29		24.244	18.748	29		21.149
Return on portfolio investments, %	15	17			15	17			16

The increase in operating earnings on a pro forma basis is primarily attributable to the greater portfolio value.

On a pro forma basis, continued momentum in portfolio investments, combined with price discipline and strong collection performance, drives another strong quarter of financial

development for portfolio investments. Service line earnings increased by 12 percent excluding currency effects and by 23 percent excluding revaluations and currency effects. The carrying amount for portfolio investments has increased a further 7 percent since the end of the first quarter and is up 29 percent year-on-year. The relatively high level of investment for the quarter is explained by major acquisitions in Greece and Hungary, but also by a diverse range of medium-sized deals in both mature and fast growing markets. The return on portfolio investments was 15 percent. The large portfolios in Greece and Hungary added at the end of the quarter have not yet contributed any earnings but are included in the book value at the end of the quarter, thereby temporarily marginally lowering the return.

Common costs

Common costs decreased by SEK 15 M compared with the preceding quarter, as the benefits of integration synergies come through and the overhead activity levels normalize as anticipated.

Taxation assessments

Intrum Justitia's assessment is that the tax expense will, over the next few years, be around 20-25 percent of earnings before tax for each year, excluding the outcome of any tax disputes.

Parent Company

The Group's publicly listed Parent Company, Intrum AB (publ), owns the subsidiaries, provides the Group's head office functions and handles certain Group-wide development work, services and marketing.

The Parent Company reported net revenues of SEK 88 M (48) for the six-month period and earnings before tax of SEK 2,382 M (-849). During the first half of the year, the Parent Company invested SEK 7 M (0) in fixed assets and held cash and cash equivalents of SEK 68 M (321) at the end of the first half of the year. The average number of employees was 72 (55).

Transactions with related parties

During the quarter, there have been no significant transactions between Intrum and other closely related companies, boards or Group management teams.

Accounting principles

This interim report has been prepared in accordance with the Annual Accounts Act and IAS 34 Interim Financial Reporting for the Group and in accordance with Chapter 9 of the Annual Accounts Act for the Parent Company.

In addition to appearing in the financial statements, disclosures in accordance with IAS 34.16A also appear in other parts of the interim report.

The Group applies IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. For reasons of competition, the Group was obliged to divest Intrum Justitia's subsidiaries in Norway and Lindorff's subsidiaries in Sweden, Finland, Denmark and Estonia within a certain period following the merger with Lindorff. In accordance with IFRS 5, net earnings after tax in these companies is reported on a separate line in the consolidated income statement, Earnings for the period from discontinued operations after tax. The comparative figures for previous periods are recalculated accordingly. Assets and liabilities are reported on separate lines in the consolidated balance sheet. Assets and liabilities in operations held for sale, effective from the date on which the Group undertook to sell the companies. In accordance with IFRS 5, the comparative figures in the balance sheets are not recalculated for prior periods.

Effective from January 1, 2018, the Group applies IFRS 9 Financial Instruments. The Group's accounting principles have thus changed with regard to portfolio investments, such that the Group's previous limitation that these could never be revalued to a higher value than their cost has been removed. The effect is an increase in the carrying amount as of January 1, 2018 of SEK 53 M and an increase in equity of SEK 50 M. In accordance with the exception stated in IFRS 9, comparison figures for earlier periods have not been recalculated. In connection with the introduction of IFRS 9, IAS 1 Presentation of Financial Statements has also been adjusted, with the effect that income from portfolio investments according to the effective interest rate method, and positive and negative revaluations are now reported on separate lines in the consolidated income statement.

Effective from January 1, 2018, IFRS 15 Revenue from Contracts with Customers is also applied. However, the introduction of IFRS 15 has not had a material impact on the Group's earnings or financial position. Group revenues are according to the disclosure requirements in IFRS 15 disaggregated into categories. Intrum reports revenues by region, service line and revenue type under the heading 'Operating segments'.

The Group is preparing for the introduction of IFRS 16 Leases, which will come into effect in 2019. See also Note 1 in the 2017 Annual Report.

Significant risks and uncertainties

Risks to which the Group and Parent Company are exposed include risks relating to economic developments, compliance and changes in regulations, reputation risks, tax risks, risks attributable to IT and information management, risks attributable to acquisitions, market risks, liquidity risks, credit risks, risks inherent in purchased debt and payment guarantees, as well as financing risks. The risks are described in more detail in the Board of Directors' report in Intrum's 2017 Annual Report. No significant risks are considered to have arisen besides those described in the annual report.

Merger with Lindorff

On June 27, 2017, the merger between Intrum Justitia and Lindorff was completed and Lock TopCo AS (parent company in the Lindorff Group) with all subsidiaries has, since then, been owned by Intrum Justitia AB (publ). The sale of Lindorff's operations in Denmark, Estonia, Finland and Sweden, and Intrum's operations in Norway, which was a condition for the European Commission's approval of the transaction, was completed on March 20, 2018.

The merger was effectuated through a non-cash issue whereby Intrum AB issued 59,193,594 new Intrum shares, with a total market value of SEK 17,332 M, in exchange for all shares in Lock TopCo AS.

The preliminary acquisition analysis prepared by Intrum in connection with the merger has been adjusted to the following final acquisition analysis. A change from the preliminary acquisition analysis previously prepared is that contingent liabilities regarding some of Lindorff's litigation and tax disputes, that were ongoing as per the transaction date, are reported as short-term provisions in the final acquisition analysis.

		Preliminary PPA from June 2017		Final PPA in June 2018
(SEKM)	Carrying value before acquisition	Fair value adjustments	Fair value	Fair value adjustments	Fair value
Intangible assets	19,001	$-15,248$	3,753	$-16,072$	2,929
Database with credit information	0			261	261
Tangible assets	138		138		138
Portfolio investments	7,826		7,826	$-34$	7,792
Other fixed assets	508	334	842	489	997
Current assets	1,778		1.778	89	1.867
Cash and bank	684		684		684
Assets held for sale	5,184		5,184		5,184
Long-term liabilities	$-22,940$	$-1,392$	$-24,332$	$-1,408$	$-24,348$
Short-term liablities and provisions	$-2,047$		$-2,047$	$-155$	$-2,202$
Liabilities in operation held for sale	$-3,091$		$-3,091$		$-3,091$
Net assets	7,041	$-16,306$	$-9,265$	$-16,830$	$-9,789$
Acquisition value			17,332		17,332
Goodwill			26,597		27,121
Thereof in assets held for sale			4,255		1,826
Thereof in continuing operation			22,342		25,295

Partnership with Banca Intesa Sanpaolo

In accordance with the description given in the interim report for the first quarter, Intrum signed a partnership agreement with the Italian bank Banca Intesa Sanpaolo in April, contributing a collection department with a labor force of 600 and a portfolio of overdue receivables that will be held alongside other investors. Intrum's net investment is calculated at EUR 670 M.

The transaction is conditional on the approval of the authorities and is expected to take place in November. It will comprise a significant contribution to Intrum's planned portfolio investments and acquisition strategy for 2018, supporting the Group's ambitions for profitable growth.

In the second quarter, Intrum made a contribution to the jointly owned company to be used, among other things, as advance payment for the portfolio investment. In the balance sheet, SEK 1,726 M is reported as participations in joint ventures.

Events after the end of the period

In July, a majority shareholding of 51 percent was acquired in the Brazilian credit management company iPlatform for a purchase consideration of USD 3.6 M. The company will be renamed Intrum.

Presentation of the interim report

The interim report and presentation material are available at www.intrum.com/Investor relations. President & CEO Mikael Ericson and Acting CFO Thomas Moss will comment on the report at a teleconference on July 24, starting at 9:00 CET. The presentation can also be followed at www.intrum.com and/or www.financialhearings.com. To participate by phone, call +46 8 506 395 49 (SE), +44 20 300 898 17 (UK), 04 +1-855-831-5947 (US).

For further information, please contact

Mikael Ericson, President and CEO, tel: +46 8 546 102 02 Thomas Moss, Acting CFO, tel: +46 8 546 102 02

Thomas Moss is the contact under the EU Market Abuse Regulation.

The information in this six-month report is such that Intrum AB (publ) is required to disclose pursuant to the EU's markets abuse directive and the Securities Markets Act. The information was provided under the auspices of the contact person above for publication on July 24, 2018 at 7.00 a.m. CET.

Financial calendar 2018

October 26, 2018, Interim report for the third quarter January 30, 2019, Year-end report 2018

The interim report and other financial information are available at Intrum Justitia's website: www.intrum.com

Denna delårsrapport finns även på svenska.

The Board of Directors and the President provide their assurance that this six-month report provides an accurate overview of the operations, position and earnings of the Company and the Group, and that it also describes the principal risks and sources of uncertainty faced by the Company and its subsidiaries.

Stockholm, July 24, 2018

Per E. Larsson Chairman of the Board	Magnus Yngen Deputy Chairman of the Board Board member	Hans Larsson
Kristoffer Melinder	Andreas Näsvik	Magdalena Persson
Board member	Board member	Board member
Synnöve Trygg	Fredrik Trägårdh	Ragnhild Wiborg
Board member	Board member	Board member

Mikael Ericson

President and CEO

The interim report has not been reviewed by the Company's auditors.

About the Intrum Group

Intrum is the industry-leading provider of Credit Management Services with a presence in 24 markets in Europe. Intrum helps companies prosper by offering solutions designed to improve cash flows and long-term profitability and by caring for their customers. To ensure that individuals and companies get the support they need to become free from debt is one important part of the company's mission. Intrum has more than 8,000 dedicated and empathetic professionals who serve some 80,000 companies across Europe. In 2017, the company generated pro forma revenues of SEK 12.2 billion. Intrum is headquartered in Stockholm, Sweden and the Intrum share is listed on the Nasdaq Stockholm exchange. For further information, please visit www.intrum.com

FINANCIAL REPORTS

CONSOLIDATED INCOME STATEMENT

SEKM Revenues from clients	April-June 2018 2,091 1,540	April-June 2017 843	April-June 2017	Jan-June 2018	Jan-June 2017	Jan-June 2017	Full Year 2017
			1,773	3,735	1,648	3,441	6,834
Revenue on Portfolio investments		912	1,368	2,998	1,659	2,586	5,322
calculated using the effective interest
method
Positive revaluations of Portfolio	216	78	100	261	133	198	398
investments
Negative revaluations of Portfolio	$-217$	$-37$	$-37$	$-249$	$-93$	$-93$	$-335$
investments
Total revenue	3,630	1,796	3,204	6,745	3.347	6,132	12,219
Cost of sales	$-1,898$	$-889$	$-1,680$	$-3,616$	$-1,727$	$-3,260$	$-6.583$
Gross earnings	1,732	907	1,524	3,129	1,620	2,872	5,636
Sales, marketing and administrative	$-492$	$-430$	$-658$	$-992$	$-674$	$-1,164$	$-2,157$
expenses
Participation in associated companies	$\circ$	$-1$	$-1$	$\circ$	$-2$	$-2$	10
and joint ventures
Operating earnings (EBIT)	1,240	476	865	2,137	944	1,706	3.489
Net financial items	$-344$	$-358$	$-883$	$-667$	$-404$	$-1,373$	$-1.942$
Earnings before tax	896	118	$-18$	1,470	540	333	1,547
Tax	$-194$	$-21$	-59	$-320$	$-105$	$-183$	$-467$
Net income from continuing	702	97	$-77$	1,150	435	150	1,080
operations
Profit from discontinued operations, net	$-1$	$\mathbf{1}$	60	$-85$	10	111	238
of tax	701	98	$-17$	1.065	445	261
Net earnings for the period							1,318
Of which attributable to:
Parent company's shareholders	701	98	$-17$	1,065	443	259	1,318
	O	$\circ$	$\circ$	$\circ$	2	$\overline{2}$	2
Non-controlling interest	701	98	$-17$			261	1,320
Net earnings for the period				1,065	445
Earnings per share before and after
dilution
Profit from continuing operations	5.34	1.31		8.75	5.90
Profit from discontinued operations	$-0.01$	0.01		$-0.65$	0.14
Total earnings per share before and after dilution	5.33	1.32		8.10	6.04

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

SEK M	April-June 2018	April-June 2017	Jan-June 2018	Jan-June 2017
Net income for the period	701	98	1,065	445
Other comprehensive income, items
that will be reclassified to profit and
loss:
Currency translation difference	123	27	902	27
Other comprehensive income, items
that will not be reclassified to profit and
loss:
Remeasurement of pension liability	O	O	$\circ$	O
Comprehensive income for the	824	125	1,967	472
period
Of which attributable to:
Parent company's shareholders	824	125	1,967	470
Non-controlling interest	$\Omega$	O	$\Omega$	$\mathcal{P}$
Comprehensive income for the	824	125	1,967	472
period

CONSOLIDATED BALANCE SHEET

SEKM	30 Jun	30 Jun	31 Dec
	2018	2017	2017
ASSETS
Intangible fixed assets
Goodwill	31,783 449	25,453	29.565 422
Capitalized expenditure for IT development and other intangibles		1,263
Client relationships	1,867	2,495	2,703
Total intangible fixed assets	34,099	29,211	32,690
Tangible fixed assets	252	249	245
Other fixed assets Shares in joint ventures	1,726	20	O
Other shares and participations	4	2	3
Portfolio investments	24,244	18,748	21,149
Deferred tax assets	722	835	692
Other long-term receivables Total other fixed assets	41 26,737	48 19,653	36 21,880
Total fixed assets	61,088	49.113	54,815
Current Assets Accounts receivable	778	586	755
Inventory of real estate for sale	132	6	93
Client funds	873	865	902
Tax assets	394	250	347
Other receivables Prepaid expenses and accrued income	1,391 502	875 665	931 737
Cash and cash equivalents	968	1,335	881
Total current assets	5,038	4,582	4,646
Non-current assets of disposal group	O	10,069	8,314
held for sale
TOTAL ASSETS	66,126	63,764	67,775
SHAREHOLDERS' EQUITY AND LIABILITIES
Attributable to parent company's	23,147	21,194	22,436
shareholders
Attributable to non-controlling interest	3	4	3
Total shareholders' equity	23,150	21,198	22,439
Long-term liabilities Liabilities to credit institutions
Bond loans	1,356 32,883	1,798 32,524	2,703 32,052
Other long-term liabilities	404	302	374
Provisions for pensions	193	162	175
Other long-term provisions	11	21	9
Deferred tax liabilities Total long-term liabilities	1,258 36,105	1,426 36,233	1,206 36,519
Current liabilities Liabilities to credit institutions	1	13	O
Medium term note	1.000	O	1,000
Commercial paper	800	1,075	2,269
Client funds payable	873	865	902
Accounts payable Income tax liabilities	548 611	501 252	572 364
Advances from clients	65	43	64
Dividend declared but not paid	O	651	O
Other current liabilities	1,107	695	541
Accrued expenses and prepaid income Other short-term provisions	1,753 113	1,221 91	1,794 143
Total current liabilities	6,871	5,407	7,649
Non-current liabilities of disposal group held for sale	O	926	1,168
TOTAL SHAREHOLDERS' EQUITY AND	66,126	63,764	67,775
LIABILITIES

FAIR VALUE OF FINANCIAL INSTRUMENTS

Most of the Group's financial assets and liabilities (purchased debt, accounts receivable, other receivables, cash and equivalents, liabilities to credit institutions, bonds, commercial papers, accounts payable and other liabilities) are carried in the accounts at amortized cost. For these financial instruments, the carrying amount is assessed to be a good estimate of fair value. The Group also has financial assets and liabilities in the form of currency forward exchange contracts, which are carried in the accounts at fair value in the income statement. They amount to small sums.

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

SEK M		2018			2017
	Attributable to Parent Company's shareholders	Non-controlling interest	Total	Attributable to Parent Company's shareholders	Non-controlling interest	Total
Opening Balance, January 1	22,436	3	22,439	4,043	87	4,130
Change in accounting principles according to IFRS 9	50		50			$\Omega$
Dividend	$-1,250$		$-1,250$	$-651$		$-651$
New issue of shares			O	17,332		17,332
Acquired non-controlling interest			$\circ$		$-85$	$-85$
Repurchase of shares	$-56$		$-56$			O
Comprehensive income for the period	1,967	0	1,967	470	2	472
Closing Balance, June 30	23,147	3	23,150	21,194	4	21,198

In addition to appearing in the financial statements, disclosures in accordance with IAS 34.16A also appear in other parts of the interim report.

CONSOLIDATED CASH FLOW STATEMENT

SEK M	April-June 2018	April-June 2017	Jan-June 2018	Jan-June 2017
Cash flows from continuing operations
Operating activities
Operating earnings (EBIT) Depreciation/amortization and	1,240 353	476 42	2,137 530	944 83
impairment write-down Amortization/revaluation of purchased debt	1,003	478	1,877	979
Other adjustment for items not included in cash flow	$-224$	$-11$	$-207$	-16
Interest received Interest paid and other financial expenses	13 $-150$	12 $-310$	25 $-555$	16 -361
Income tax paid	-85	-52	-209	-186
Cash flow from operating activities before changes in working capital	2,150	635	3,598	1,459
Changes in factoring receivables Other changes in working capital	$-50$ -421	$-15$ 83	$-70$ $-401$	$-45$ $-16$
Cash flow from operating activities	1,679	703	3,127	1,398
Investing activities
Purchases of tangible and intangible fixed assets	-80	-42	-156	$-77$
Portfolio investments in receivables and inventory of real estate	$-1,840$	$-1,123$	$-3,241$	-3,193
Purchases of shares in subsidiaries and associated companies	$-1,663$	$-112$	$-1,663$	$-169$
Liquid assets in acquired/divested subsidiaries Proceeds from divestment of subsidiaries	O O	965 O	-400 7,511	974 O
and associated companies Other cash flow from investing activities	718	-1	714	O
Cash flow from investing activities	$-2,865$	$-313$	2,765	$-2,465$
Financing activities
Borrowings and repayment of loans	873	911	$-4,534$	2,288
Repurchase of shares	$-56$	O	$-56$	O
Share dividend to parent company's shareholders	$-1,250$	0	$-1,250$	O
Cash flow from financing activities	-433	911	$-5,840$	2,288
Cash flows from continuing operations	$-1,619$	1,301	52	1,221
Cash flows from discontinued operations	O	$-1$	$-372$	O
Total change in liquid assets	$-1,619$	1,300	-320	1,221
Opening balance of liquid assets	2,583	318	1,253	396
Exchange rate differences in liquid assets	4	-2	35
Closing balance of liquid assets	968	1,616	968	1,617
Thereof liquid assets in discontinued operations	O	281	O	281
Discontinued operations
Cash flow from operating activities	0	-2	13	10
Cash flow from investing activities	0	$-2$	$-589$	-5
Cash flow from financing activities	O	3	204	-5
Group total Cash flow from operating activities	1,679	701	3,140	1,408
Cash flow from investing activities	$-2,865$	-315	2,176	$-2,470$
Cash flow from financing activities	$-433$	914	$-5,636$	2,283

CONSOLIDATED QUARTERLY OVERVIEW

	Quarter 2 2018	Quarter 1 2018	Quarter 4 2017	Quarter 3 2017	Quarter 2 2017	Quarter 1 2017	Quarter 4 2016	Quarter 3 2016
Revenues, SEK M	3,630	3,115	3,101	2,986	1,796	1,551	1,657	1,433
Revenue growth, %	102	101	4	66	26	14	23	7
Cash EBITDA, SEK M	2,596	1,948	1,943	2,005	995	1,011	1,034	934
EBITDA, SEK M	1,593	1,074	1,000	1,139	518	508	592	546
EBIT, SEK M	1,240	897	807	977	476	468	543	506
Non-recurring items (NRI's) in EBIT, SEK M	$-173$	$-89$	$-157$	$-60$	$-163$	$-17$	5	15
Non-recurring items (NRI's) in net financial items, SEK M	$\circ$	$\circ$	$\circ$	$\circ$	$-316$	$\circ$	O	$\circ$
Revaluations of portfolio investments, SEK M	$-1$	13	$-44$	$\mathbf{1}$	41	$-1$	5	$-29$
Cash EBITDA excl NRI's, SEK M	2,769	2,037	2,100	2,065	1,158	1,028	1,029	919
EBITDA excl NRI's, SEK M	1,766	1,163	1,157	1,199	681	526	587	531
EBIT excl NRI's, SEK M	1,413	986	967	1,037	639	485	538	491
Net earnings, SEK M	701	364	443	615	98	347	429	375
Earnings per share, SEK	5.33	2.77	3.37	4.68	1.32	4.77	5.90	5.14
EPS growth, %	304	$-42$	$-43$	$-9$	$-73$	12	57	14
Average number of shares, '000	131,442	131,541	131,541	74,299	74,299	72,348	72,348	72,348
Number of shares outstanding at end of period, '000	131,291	131,541	131,541	131,541	131,541	72,348	72,348	72,348
Net Debt, SEK M	35,265	32,043	37,322	34,290	34,254	8,738	7,260	7,053
SERVICE LINE EARNINGS EXCL NRI'S BY SERVICE LINE, SEK M
Credit Management	905	548	610	596	307	257	332	259
Financial Services	882	827	743	752	538	412	393	406
Common costs	$-374$	$-389$	$-390$	$-311$	$-206$	$-184$	$-188$	$-174$
Estaimated remaining collections (ERC), SEK M	49,313	46,929	44,603	40,179	40,006	21,409	17,645	16,012
Return on portfolio investments, %	15	15	15	15	20	17	22	21
Portfolio investments, SEK M	2,385	1,373	2,784	1,177	835	2,374	1,162	643
Average number of employees	7,886	8,318	7,806	8,349	4,369	4,172	3,993	3,864

CONSOLIDATED FIVE-YEAR OVERVIEW

	2018	2017	2016	2015	2014
	April-June	April-June	April-June	April-June	April-June
Revenues, SEK M	3,630	1,796	1,421	1,419	1,247
Revenue growth, %	102	26	O	14	13
Cash EBITDA, SEK M	2,596	995	880	805	721
EBITDA, SEK M	1,593	518	498	468	392
EBIT, SEK M	1,240	476	457	428	356
Non-recurring items (NRI's) in EBIT, SEK M	$-173$	$-163$	$-10$	$\circ$	$\circ$
Non-recurring items (NRI's) in net financial	0	$-316$	$\circ$	0	O
items, SEK M
Revaluations of portfolio investments, SEK M	-1	41	17	45	23
Cash EBITDA excl NRI's, SEK M	2,769	1,158	890	805	721
EBITDA excl NRI's, SEK M	1,766	681	508	468	392
EBIT excl NRI's, SEK M	1,413	639	467	428	356
Net earnings, SEK M	701	98	354	324	252
Earnings per share, SEK	5.33	1.32	4.85	4.38	3.23
EPS growth, %	304	$-73$	11	36	26
Average number of shares, '000	131,442	74,299	72,348	72,348	76,983
Number of shares outstanding at end of	131,291	131,541	72,348	72,348	76,600
period, '000
Net Debt, SEK M	35,265	34,254	6,937	6,234	5,423
SERVICE LINE EARNINGS EXCL NRI'S BY
SERVICE LINE, SEK M
Credit Management	905	307	264	235	213
Financial Services	882	538	379	372	312
Common costs	-374	$-206$	$-176$	$-179$	$-169$
Estaimated remaining collections (ERC), SEK M	49,313	22,260	15,191	10,945	13,766
Return on portfolio investments, %	15	20	20	24	21
Portfolio investments, SEK M	2,385	835	545	502	529
Average number of employees	7,886	4,369	3,832	3,771	3,706

CONSOLIDATED FIVE-YEAR OVERVIEW

	2017 Full Year	2016 Full Year	2015 Full Year	2014 Full Year	2013 Full Year
Revenues, SEK M Revenue growth, %	9,434 61	5,869 8	5,419 9	4,958 14	4,355 13
Cash EBITDA, SEK M	5,953	3,668	3,193	2,916	2,623
EBITDA, SEK M	3,165	2,090	1,736	1,546	1,318
EBIT, SEK M	2,728	1,921	1,577	1,382	1,168
Non-recurring items (NRI's) in EBIT, SEK M	$-397$	10	-54	36	0
Non-recurring items (NRI's) in net financial	$-316$	$\circ$	O	O	$-13$
items, SEK M
Revaluations of portfolio investments, SEK M	$-3$	45	32	33	5
Cash EBITDA excl NRI's, SEK M	6,350	3,658	3,247	2,880	2,623
EBITDA excl NRI's, SEK M	3,562	2,080	1,790	1,510	1,318
EBIT excl NRI's, SEK M	3,125	1,911	1,631	1,346	1,168
Net earnings, SEK M	1,503	1,468	1,172	1,041	819
Earnings per share, SEK	14.62	20.15	15.92	13.48	10.30
EPS growth, %	$-27$	27	18	31	41
Dividend per share, SEK	9.50	9.00	8.25	7.00	5.75
Average number of shares, '000	102,674	72,348	73,097	76,462	79,306
Number of shares outstanding at end of	131,541	72,348	72,348	73,848	78,547
period, '000
Net Debt, SEK M	37,322	7,260	6,026	5,635	4,328
SERVICE LINE EARNINGS EXCL NRI'S BY SERVICE LINE, SEK M
Credit Management	1,770	1,098	998	868	761
Financial Services	2,445	1,521	1,332	1,190	958
Common costs	$-1,091$	$-708$	$-699$	$-712$	$-551$
Estaimated remaining collections (ERC), SEK М	44,603	17,645	15,073	13,682	12,454
Return on portfolio investments, %	16	20	20	20	21
Portfolio investments, SEK M	7,170	3,084	2,271	1,909	2,503
Average number of employees	6,293	3,865	3,738	3,694	3,427

RECONCILIATION OF KEY FIGURES

			Pro forma	Pro forma			Pro forma	Pro forma	Pro forma
SEKM	April-June	April-June	April-June	Change	Jan-June	Jan-June	Jan-June	Change	Full-year
unless otherwise indicated	2018	2017	2017	%	2018	2017	2017	%	2017
Service line earnings portfolio investments	857	541	801	$\overline{7}$	1.671	944	1,490	12	2.979
Average carrying value of portfolio	23,421	10,722	18,466	27	22,696	9,764	17,542	29	18,743
investments
Return on portfolio investments, %	15	20	17	$-16$	15	19	17	$-13$	16
EBIT	1,240	476	865	43	2.137	944	1,706	25	3,489
Depreciation	353	42	223	58	530	83	387	37	742
Amortization and revaluations	1,003	477	755	33	1,877	979	1,486	26	3,295
Cash EBITDA	2,596	995	1,843	41	4,544	2,006	3,579	27	7,526
EBIT	1,240	476	865	43	2,137	944	1,706	25	3,489
Depreciation	353	42	223	58	530	83	387	37	742
EBITDA	1.593	518	1,088	46	2.667	1,027	2.093	27	4,231
Cash EBITDA	2,596	995	1,843	41	4,544	2,006	3,579	27	7,526
Non-recurring items, NRI's	173	163	192	$-10$	262	180	282	$-7$	499
Cash EBITDA excl NRI's	2,769	1,158	2.035	36	4,806	2.186	3,861	24	8.025
EBITDA	1,593	518	1,088	46	2,667	1,027	2,093	27	4,231
Non-recurring items, NRI's	173	163	192	$-10$	262	180	282	$-7$	499
EBITDA excl NRI's	1,766	681	1,280	38	2.929	1,207	2,375	23	4,730
EBIT	1,240	476	865	43	2,137	944	1,706	25	3,489
Non-recurring items, NRI's	173	163	192	$-10$	262	180	282	$-7$	499
EBIT excl NRI's	1,413	639	1,057	34	2,399	1,124	1,988	21	3.988
Liabilities to credit institutions	1,357	1,811	1,811	$-25$	1,357	1,811	1,811	$-25$	2.703
Bond loans	33,883	32,524	32,524	$\overline{4}$	33,883	32,524	32,524	$\overline{4}$	33,052
Provisions for pensions	193	162	162	19	193	162	162	19	175
Commercial paper	800	1,075	1,075	$-26$	800	1,075	1,075	$-26$	2,269
Other interest-bearing liabilities	O	17	17	$-100$	$\circ$	17	17	$-100$	$\overline{4}$
Cash and cash equivalents	$-968$	$-1,335$	$-1,335$	$-27$	$-968$	$-1,335$	$-1,335$	$-27$	$-881$
Net Debt	35,265	34,254	34,254	3	35,265	34,254	34,254	3	37,322

OPERATING SEGMENTS

REGIONS - REVENUES FROM EXTERNAL CLIENTS

SEK M	April-June 2018	April-June 2017	Pro forma April-June 2017	Pro forma Change %	Jan-June 2018	Jan-June 2017	Pro forma Jan-June 2017	Pro forma Change ℅	Pro forma Full Year 2017
Northern Europe	1,022	567	984	4	1.951	1.074	1.930		3.869
Central & Eastern Europe	882	657	893	-1	1,761	1,204	1,675		3.246
Western & Southern Europe	756	512	618	22	1.427	947	1.156	23	2.410
Spain	970	60	709	37	1.606	122	1,371		2.694
Total revenues from external clients	3.630	1.796	3,204	13	6.745	3,347	6,132	10	12,219

REGIONS - REVALUATIONS OF PORTFOLIO INVESTMENTS

			Pro forma		Pro forma	Pro forma
SEK M	April-June	April-June	April-June	Jan-June	Jan-June	Jan-June	Full Year
	2018	2017	2017	2018	2017	2017	2017
Northern Europe		0		16	- 5	20	42
Central & Eastern Europe	$-21$	37	57		32	65	13
Western & Southern Europe		5		-6	14	2 1	19
Spain		$\sim$		$\Omega$	$-3$	$\overline{\phantom{0}}$	$-11$
Total revaluation	-1	41	64	12	40	105	63

REGIONS - REVENUES EXCLUDING REVALUATIONS

SEK M	April-June 2018	April-June 2017	Pro forma April-June 2017	Pro forma Change ℅	Jan-June 2018	Jan-June 2017	Pro forma Jan-June 2017	Pro forma Change ℅	Pro forma Full Year 2017
Northern Europe	1,020	567	983		1.935	i.077	1.910		3,827
Central & Eastern Europe	903	620	836	8	1,759	1.172	1,610		3.233
Western & Southern Europe	745	507	613	22	1.433	933	1,135	26	2,391
Spain	963	61	708	36	1,606	125	1.372	17	2.705
Total revenues excluding revaluations	3,631	1.755	3,140	16	6,733	3,307	6.027	12	12,156

REGIONS - OPERATING EARNINGS (EBIT)

			Pro forma	Pro forma			Pro forma	Pro forma	Pro forma
SEK M	April-June	April-June	April-June	Change	Jan-June	Jan-June	Jan-June	Change	Full Year
	2018	2017	2017	%	2018	2017	2017	%	2017
Northern Europe	380	156	298	28	658	328	585	12	1,261
Central & Eastern Europe	274	248	314	$-13$	567	431	568	$-0$	971
Western & Southern Europe	141	71	69	104	285	175	178	60	483
Spain	445		185	141	627	10	375	67	773
Total EBIT	1,240	477	866	43	2,137	944	1.706	25	3.489
Net financial items	$-344$	$-359$	$-883$	$-61$	$-667$	$-404$	$-1,373$	$-51$	$-1.942$
Earnings before tax	896	118	$-17$	$-5,371$	1.470	540	333	341	1,547

REGIONS - NON-RECURRING ITEMS (NRI'S)

			Pro forma			Pro forma	Pro forma
SEKM	April-June	April-June	April-June	Jan-June	Jan-June	Jan-June	Full Year
	2018	2017	2017	2018	2017	2017	2017
Northern Europe	$-22$	$-74$	$-83$	$-46$	$-81$	$-113$	$-183$
Central & Eastern Europe	$-66$	$-60$	$-65$	$-95$	$-66$	$-84$	$-159$
Western & Southern Europe	$-56$	$-29$	$-33$	$-81$	$-33$	$-43$	$-58$
Spain	$-29$	$\circ$	$-11$	$-40$	$\Omega$	$-42$	$-99$
Total NRI's	$-173$	$-163$	$-192$	$-262$	-180	$-282$	-499

REGIONS - EBIT EXCLUDING REVALUATIONS AND NRI'S

SEKM	April-June	April-June	Pro forma April-June	Pro forma Change	Jan-June	Jan-June	Pro forma Jan-June	Pro forma Change	Pro forma Full Year
	2018	2017	2017	%	2018	2017	2017	%	2017
Northern Europe	400	230	380	5	688	412	678		.402
Central & Eastern Europe	361	271	322	12	660	465	587		1,117
Western & Southern Europe	1861	95	97	91	372	194	200	86	522
Spain	467	3	195	139	667	13	418	60	883
Total EBIT excluding revaluations and NRI's	1,414	599	994	42	2,387	1.084	1,883	27	3,925

REGIONS - EBIT MARGIN EXCLUDING REVALUATIONS AND NRI'S

		Pro forma			Pro forma	Pro forma
April-June	April-June	April-June	Jan-June	Jan-June	Jan-June	Full Year
2018	2017	2017	2018	2017	2017	2017
						37
40	44	39	38	40	36	35
25	19	16	26	21	18	22
48	-5	28	42	10	30	33
39	34	32	35	33	31	32
	39	41	39	36	38	35

REGIONS - BOOK VALUE PORTFOLIO INVESTMENTS

SEKM	30 Juni 2018	30 Jun 2017	Change %	30 Jun 2018	30 Jun 2017	Change %	31 Dec 2017
Northern Europe	7,237	6,326	14	7,237	6,326	14	6,607
Central & Eastern Europe	7,936	6.367	25	7,936	6,367	25	6,915
Western & Southern Europe	5,817	3.951	47	5,817	3,951	47	5,004
Spain	3.254	2.104	55	3.254	2.104	55	2,623
Total book value (excl assets held for sale)	24.244	18,748	29	24.244	18.748	29	21,149

SERVICE LINES - REVENUES

April-June 2018	April-June 2017	Pro forma April-June 2017	Pro forma Change %	Jan-June 2018	Jan-June 2017	Pro forma Jan-June 2017	Pro forma Change	Pro forma Full Year 2017
2,651 .588 $-609$	,185 982 $-371$	2,292 .462 $-550$	16 ۰ 11	4,860 3.096 $-1.211$	2,294 1,752 $-699$	4,445 2,742 $-1.055$	13 15	8,852 5,506 $-2.138$ 12,220
	3.630	1.796	3,204	13	6,745	3.347	6,132	10

REVENUES BY TYPE

			Pro forma	Pro forma			Pro forma	Pro forma	Pro forma
SEK M	April-June	April-June	April-June	Change	Jan-June	Jan-June	Jan-June	Change	Full Year
	2018	2017	2017	%	2018	2017	2017	%	2017
External Credit Management revenues	2,042	814	1.742	17	3.649	1.595	3.390	8	6.714
Collections on portfolio investments	2,542	.430	2,187	16	4,887	2,678	4,178	17	8,680
Amortization of portfolio investments	$-1,002$	$-518$	$-818$	22	$-1.889$	$-1,019$	$-1,591$	19	$-3,358$
Revaluation of portfolio investments	-1	41	63	$-102$	12	40	105	$-89$	63
Other revenues from Financial Services	49	29	30	63	86	53	50	72	121
Total revenues	3.630	1.796	3,204	13	6.745	3,347	6,132	10	12,220

SERVICE LINES - SERVICE LINE EARNINGS

		Pro forma	Pro forma				Pro forma	Pro forma
April-June	April-June	April-June	Change	Jan-June	Jan-June	Jan-June	Change	Full Year
2018	2017	2017		2018	2017	2017		2017
845	307	676	25	. 371	564	.254		2.394
880	549	766	15	1.706	961	i,462		2.957
-485	$-379$	-576	$-16$	$-940$	$-581$	$-1.010$	$\sim$ .	$-1.863$
1,240	477	866	43	2,137	944	1,706	25	3,489
							Pro forma

SERVICE LINES - NON-RECURRING ITEMS (NRI'S)

SEK M	April-June 2018	April-June 2017	Pro forma April-June 2017	Jan-June 2018	Jan-June 2017	Pro forma Jan-June 2017	Pro forma Change %	Pro forma Full Year 2017
	$-60$			$-82$			447	$-81$
Credit Management			-8			-15
Financial Services	-4		11	-3			$-127$	11
Common costs	$-111$	$-174$	$-196$	$-177$	$-191$	$-278$	-36	$-429$
Total NRI's	$-173$	$-163$	$-193$	$-262$	$-180$	$-282$	-7	-499

SERVICE LINES - SERVICE LINE EARNINGS EXCLUDING NRI'S

			Pro forma	Pro forma			Pro forma	Pro forma	Pro forma
SEK M	April-June	April-June	April-June	Change	Jan-June	Jan-June	Jan-June	Change	Full Year
	2018	2017	2017		2018	2017	2017		2017
Credit Management	905	307	684	32	1.453	564	1.269	14	2.475
Financial Services	882	538	755		1.709	950	1,451	18	2.946
Common costs	$-374$	$-205$	$-380$	$-2$	$-763$	$-390$	$-732$	4	$-1.434$
Total EBIT excl NRI's	1.413	640	1,059	33	2,399	1.124	1.988	21	3,988

SERVICE LINES - SERVICE LINE MARGINS EXCLUDING NRI'S

			Pro forma			Pro forma	Pro forma
%	April June	April-June	April-June	Jan-June	Jan-June	Jan-June	Full Year
	2018	2017	2017	2018	2017	2017	2017
Credit Management	34	26	30	30	25	29	28
Financial Services	56	55	52	55	54	53	54
EBIT margin excl NRI's	39	36	33	36	34	32	33

PARENT COMPANY INTRUM JUSTITIA AB (PUBL)

INCOME STATEMENT - PARENT COMPANY

SEK M	Jan-June 2018	Jan-June 2017	Full Year 2017
Revenues	88	48	159
Gross earnings	88	48	159
Sales and marketing expenses Administrative expenses	-30 $-356$	$-10$ $-259$	-36 $-460$
Operating earnings (EBIT)	-298	-221	-337
Income from subsidiaries Exchange rate differences on monetary items classified as expanded investment	1,643 1,131	Ω -347	368 -166
Net financial items	$-94$	$-281$	-444
Earnings before tax	2,382	-849	-579
Tax	0	Ω	199
Net earnings for the period	2,382	-849	-380

STATEMENT OF COMPREHENSIVE INCOME - PARENT COMPANY

SEK M	Jan-June 2017	Jan-June 2016	Full Year 2016
Net earnings for the period Other comprehensive income: Change of translation reserve (fair value reserve)	2,382 $-2,350$	$-849$ 267	$-380$ 47
Total comprehensive income	32	-582	$-333$

BALANCE SHEET - PARENT COMPANY

SEK M	30 Jun 2018	30 Jun 2017	31 Dec 2017
ASSETS
Fixed assets
Intangible fixed assets	13	∩	10
Financial fixed assets	49,175	53,144	53,541
Total fixed assets	49.188	53.144	53,551
Current assets
Current receivables	9,658	5,344	7,365
Cash and cash equivalents	68	321	95
Total current assets	9.726	5.665	7,460
TOTAL ASSETS	58,914	58,809	61,011
SHAREHOLDERS' EQUITY AND
LIABILITIES
Restricted equity	285	285	285
Unrestricted equity	16,036	17,060	17,310
77 - Anii 10 - Anii 10 - Anii 110 - Anii 120 .		-----	47 PAP

Total shareholders' equity	10,321	17,345	17,595
Long-term liabilities	36,402	36.768	38,006
Current liabilities	6.191	4.696	5.410
TOTAL SHAREHOLDERS' EQUITY	58,914	58,809	61.011
AND LIABILITIES

SHARE PRICE TREND

OWNERSHIP STRUCTURE

30 June 2018	No of shares	Capital and Votes, %
Nordic Capital	57,728,956	44.O
NN Investment Partners	6,831,746	5.2
Handelsbanken Funds	5,938,000	4.5
Lannebo Funds	4,577,767	3.5
Jupiter Asset Management	3,329,418	2.5
AMF Insurance & Funds	2,876,940	2.2
Swedbank Robur Funds	2.742.936	2.1
Vanguard	2,254,890	1.7
Odin Funds	2,243,707	1.7
BNP Paribas Investments Partners	1,925,167	1.5
Janus Henderson Investors	1,802,335	1.4
TIAA - Teachers Advisors	1,114,202	0.8
Baring Asset Management	1,074,395	0.8
BlackRock	1,045,834	0.8
AFA Insurance	1,010,831	0.8
Total, fifteen largest shareholders	96,497,124	73.5

Total number of shares:

131,291,320

Treasury shares, 250,000 shares, are not included in the total number of shares outstanding.

Swedish ownership accounted for 25.4 percent (institutions 5.4 percentage points, mutual funds 14.3 percentage points, retail 5.7 percentage points) Source: Modular Finance Holdings and Intrum

Definitions

Result concepts, key figures and alternative performance measures

Consolidated net revenues

Consolidated net revenues include external credit management income (variable collection commissions, fixed collection fees, debtor fees, guarantee commissions, subscription income, etc.), income from portfolio investments operations (collected amounts less amortization and revaluations for the period) and other income from financial services (fees and net interest from financing services).

Operating earnings (EBIT)

Operating earnings consist of net revenues less operating expenses as shown in the income statement.

Operating margin

The operating margin consists of operating earnings expressed as a percentage of net revenues.

Portfolio investments – collected amounts, amortizations and revaluations

Portfolio investments consist of portfolios of delinquent consumer debts purchased at prices below the nominal receivable. These are recognized at amortized cost applying the effective interest method, based on a collection forecast established at the acquisition date of each portfolio. Net revenues attributable to portfolio investments consist of collected amounts less amortization for the period and revaluations. The amortization represents the period's reduction in the portfolio's current value, which is attributable to collection taking place as planned. Revaluation is the period's increase or decrease in the current value of the portfolios attributable to the period's changes in forecasts of future collection.

Revenues, operating earnings and operating margin, excluding revaluations

The revaluation of portfolio investments in the period is included in consolidated net revenues and operating earnings. Revaluations are performed in connection with changes in estimates of future collections and are therefore inherently difficult to predict. They have low forecast values for future earnings trends, particularly for an individual geographical region. Consequently, Intrum also reports alternative key figures in which revenues, operating earnings and operating margin are calculated excluding purchased debt revaluations.

Organic growth

Organic growth refers to the average increase in net revenues in local currency, adjusted for revaluations of portfolio investments and the effects of acquisitions and divestments of Group companies. Organic growth is a measure of the development of the Group's existing operations that management has the ability to influence.

Service line earnings

Service line earnings relate to the operating earnings of each service line, Credit Management and Financial Services, excluding common costs for sales, marketing and administration.

Service line margin

The service line margin consists of service line earnings expressed as a percentage of net revenues.

Return on portfolio investments

Return on portfolio investments is the service line earnings for the period, excluding the Group's new services such as factoring and payment guarantees, recalculated on a full-year basis, as a percentage of the average carrying amount of the balance-sheet item purchased debt. The ratio sets the service line's earnings in relation to the amount of capital tied up and is included in the Group's financial targets.

Net debt

Net debt is interest-bearing liabilities and pension provisions less liquid assets and interestbearing receivables.

FBITDA

Operating earnings before depreciation and amortization (EBITDA) are operating earnings after reversal of depreciation of fixed assets except portfolio investments.

Cash EBITDA

Cash EBITDA is operating earnings after depreciation on fixed assets as well as amortization and revaluations of portfolio investments are added back.

RTM

The abbreviation RTM refers to figures on a rolling 12-month basis.

Net debt/RTM operating earnings before depreciation and amortization (EBITDA)

This key figure refers to net debt divided by consolidated operating earnings before depreciation, amortization and impairment (EBITDA) on a rolling 12-month basis. The key figure is included among the Group's financial targets, is an important measure for assessing the level of the Group's borrowings, and is a widely-accepted measure of financial capacity among lenders.

Currency-adjusted change

With regard to trends in revenues and operating earnings, excluding revaluations for each region, the percentage change is stated in comparison with the corresponding year-earlier period, both in terms of the change in the respective figures in SEK and in the form of a currency-adjusted change, in which the effect of changes in exchange rates has been excluded. The currencyadjusted change is a measure of the development of the Group's operations that management has the ability to influence.

Non-recurring items (NRIs)

Significant earnings items that are not included in the Group's normal recurring operations and that are not expected to return on a regular basis. Non-recurring items include restructuring costs, closure costs, reversal of restructuring or closure reservations, cost savings programs, integration costs, extraordinary projects, divestments, impairment of non-current fixed assets other than portfolio investments, acquisition and divestment costs, advisory costs for

discontinued acquisition projects, costs for relocation to new office space, termination and recruitment costs for members of Group Management and country managers, as well as external costs for disputes and unusual agreements. Non-recurring items are specified because they are difficult to predict and have low forecast values for the Group's future earnings trend.

Items affecting comparability

Significant income statement items included in the Group's regular recurring operations and which may recur in any form, but which distort the comparison between the periods.

EBIT, EBITDA and Cash EBITDA, excluding NRIs

In accordance with the above, the key figures EBIT, EBITDA and Cash EBITDA are also reported after recurring non-recurring items, NRIs.

Expected remaining collections, ERC

Estimated remaining collections are the nominal value of expected future collections on the Group's portfolio investments.

Pro forma financial reports including Lindorff

Pro forma financial reports are issued for the Group including Lindorff, as if Lindorff had been included in the Group for the entire period, as well as in the comparative figures. Pro forma earnings have been calculated by adding Intrum's and Lindorff's actual results for each period without making adjustments for the periods in which transaction costs would have been incurred if the acquisition had taken place at another time. Fair value adjustments made in the acquisition analysis on Intrum Justitia's acquisition of Lindorff are not recognized in earnings for any period, although they can be recognized as costs in the acquired legal entity.

Portfolio investments

Investments in portfolios of overdue receivables for the period, with and without collateral, and investments in properties held for sale, acquired together with portfolios of receivables.

Region Northern Europe

Region Northern Europe comprises the Group's activities for external clients and debtors in Denmark, Estonia, Finland, Latvia, Lithuania, Norway and Sweden.

Region Central and Eastern Europe

Region Central and Eastern Europe comprises the Group's activities for external clients and debtors in Austria, the Czech Republic, Germany, Greece, Hungary, Poland, Romania, Slovakia and Switzerland.

Region Western and Southern Europe

Region Western & Southern Europe comprises the Group's activities for external clients and debtors in Belgium, France, Ireland, Italy, the Netherlands, Portugal and the United Kingdom.

Region Spain

Region Spain comprises the Group's activities for external clients and debtors in Spain.