Intrum — Interim / Quarterly Report 2020

Oct 23, 2020

Interim report Third quarter 2020

Third quarter, July–September 2020

• Revenues increased to SEK 4,521 M (3,786) and adjusted revenues increased to SEK 4,520 M (3,777).
• Operating earnings amounted to SEK 1,688 M (1,375). The adjusted operating earnings increased to SEK 1,687 M (1,476). The operating margin for the quarter was 37 percent (36) and the adjusted operating margin was 37 percent (39).
• Cash flow from operating activities increased to SEK 2,060 M (1,306) and available liquidity at the end of the quarter amounted to SEK 16 billion. The net debt ratio decreased to 4.2x (4.4x), due to strong cash flow.
• For the Credit Management segment, the operating margin increased to 29 percent (26) and the adjusted margin increased to 29 percent (28). For Strategic Markets, the operating margin increased to 30 percent (16) and the adjusted operating margin increased to 30 percent (17).
• The return on portfolio investments (ROI) was 12 percent (15) for the quarter. Portfolio investments for the quarter amounted to SEK 837 M (831).
• Net earnings for the quarter amounted to SEK 864 M (579), and earnings per share were SEK 6.97 (4.26).

							Rolling
		Third quarter			9 months		12 months	Full year
	July–Sep	July–Sep	Change	Jan–Sep	Jan–Sep	Change	Oct 2019–
SEKm, unless otherwise indicated	2020	2019	%	2020	2019	%	Sep 2020	2019
Net revenues	4,521	3,786	19	11,739	11,322	4	16,402	15,985
Adjusted revenues	4,520	3,777	20	12,372	11,118	11	17,034	15,780
Operating earnings (EBIT)	1,688	1,375	23	3,495	4,197	-17	1,358	2,060
EBIT adjusted	1,687	1,476	14	4,127	4,387	-6	5,948	6,208
Earnings per share, SEK	6.97	4.26	64	11.80	16.06	-26	-6.73	–2.76
Cash flow from operating activities	2,060	1,306	58	7,228	4,555	57	9,065	6,392
Adjusted segment earnings Credit Management Services	482	489	-2	1,285	1,362	-6	1,716	1,793
Adjusted segment earnings Strategic Markets	515	161	220	962	601	60	1,479	1,118
Adjusted segment earnings Portfolio Investments	1,093	1,236	-12	3,133	3,739	-16	4,341	4,947
Portfolio investments	837	831	1	3,754	3,544	6	7,534	7,324
Carrying value portfolio investments	34,940	33,196	5	34,940	33,196	5	34,940	35,429
Return on portfolio investments, ROI, %	12	15		9	15		10	15
Adjusted return on portfolio investments, ROI, %	12	15		12	15		12	15
Cash EBITDA	3,142	2,609	20	8,484	7,593	12	11,546	11,444
Net Debt/RTM Cash EBITDA							4.2	4.3

As of 1 January 2020, Intrum report on three segments, these being Credit Management Services (CMS), Portfolio Investments (PI) and Strategic Markets (Greece, Italy and Spain). At the same time, the previous segmentation into four geographical regions is being discontinued.

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Comment by the President and CEO A strong quarter but uncertainties remain

It is with great pride and humbleness that I in my new role as President and CEO of Intrum, write my fist CEO comment. I would like to start by thanking my predecessor Mikael Ericson for his great contribution to Intrum the last 4 years, where the latest quarter is one of the strongest during recent years.

Because, with the third quarter behind us, we see a considerably more positive development of our business activities than we predicted in the spring. We were operational in all 25 of our countries throughout the quarter, and we have successfully worked actively to serve our clients while maintaining control of costs. Activity is typically lower during the third quarter because it includes the summer holiday period, but in the wake of the pandemic we note that seasonal patterns have diverged so far in 2020. We regained business volumes to some extent during the third quarter, volumes that had previously been expected in the first and second quarters of the year, but which were delayed due to the pandemic.

We are extremely pleased with our strong performance in the third quarter, although we are careful not to extrapolate too much from this recovery into the final quarter of the year, as business volumes from new sales remain limited. We expect this to be reflected also in our figures for the fourth quarter. With that said, we retain our optimistic view of business opportunities for 2021 and beyond, which is supported by, among other things, megatrends in consumer behaviour, digitalisation, continued regulation in the financial sector as well as volumes in the aftermath of the pandemic.

The work of harmonising and streamlining our operations across all markets was intensified during the third quarter. We are working purposefully to create "One Intrum", where we are co-ordinating and simplifying as much as we can in terms of systems, processes, and operational methods, in order to sharpen our client offering and meet our clients and customers consistently, responsively, and efficiently. At the same time, the centralisation of processes and support functions makes us more competitive and allows us to take advantage of the economies of scale of being the largest player in Europe.

Strong organic growth embedded in a strong financial position

Group revenues amounted to SEK 4,521 M (3,786). Organic revenues increased 10 per cent on the previous year, while the business we acquired in Greece contributed 14 percentage points to growth. Operating income for the quarter amounted to SEK 1,688 M (1,375).

Cash flow from operating activities increased by 58 per cent to SEK 2,060 M (1,306). Our cash EBITDA amounted to SEK 3,142 M (2,609), corresponding to an increase of 20 per cent compared to the previous year. Due to declining net debt and rising cash EBITDA, net debt ratio decreased to 4.2x compared to 4.4x at the end of the second quarter.

Intrum's financial position is strong. At the end of the quarter, we had available liquidity of SEK 16,0 billion. During the quarter, we refinanced parts of our loan structure and extended its maturity profile. This means that we have very limited loan volumes that fall due over the coming three years. This, together with our liquidity position and strong cash flow, provides favourable conditions for attractive investment opportunities in overdue receivables that we anticipate coming to market in 2021 and beyond.

Robust profitability despite reduced revenues in Credit Management Services

The Credit Management Services segment performed stably, although the trend from the second quarter – with a lower inflow of new business volumes – continued to have a negative impact on revenues. Organic revenues decreased 4 percent, while operating result of SEK 482 M (489) was 1 per cent down on the same period last year. The adjusted operating margin of 29 per cent (28) was supported by good "The work of harmonising and streamlining our operations across all markets was intensified during the third quarter."

Q3 in brief

Comment by the President and CEO

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internal cost control and the previous year's cost savings programme but was also held back by lower sales in the quarter.

Strong recovery in business volumes for Strategic Markets

Strategic Markets registered a strong quarter with operating income at SEK 515 M (161). In contrast to last year, our operations in Greece are included in this segment's results as these activities were consolidated in the fourth quarter of 2019, but even excluding Greece, earnings improved markedly compared to the previous year. The quarter was characterised by generally good business activity and a recovery of delayed volumes from previous quarters. The adjusted operating margin improved to 30 per cent (17) due to unseasonal high business volumes and from savings generated by our cost savings programme launched in 2019.

Stable collections in Portfolio Investments

The Portfolio Investments segment reported a solid operating income performance of SEK 1,093 M (1,236). Results were positively affected by solid collection levels, which overall amounted to 117 per cent of the Covid-19-adjusted forecast and 102 per cent of our pre-Covid-19 forecast. For the first nine months of the year we have collected 99 per cent of the pre-pandemic forecast. The decrease in earnings compared to the previous year is entirely attributable to our participations in joint ventures decreasing to SEK 60 M (310). The performance of our participations in joint ventures is primarily our Italian SPV portfolio, which performed strongly in 2019 and has a natural decaying contribution over its lifetime, while its contribution to income in 2020 is also being affected by the pandemic.

Portfolio Investments amounted to SEK 837 M (831) in the quarter. The expected return level on investments made in the quarter continues to be significantly above the level we invested at in 2019 and before the outbreak of the pandemic. This is of course encouraging, but at the same time we are mindful of that in light of our ambition to increase our level of investment in 2021 and beyond, current return levels are unlikely to be maintained.

A key role in the financial ecosystem

Intrum recently published its European Payment Report 2020, in which approximately 10,000 companies in 29 countries in Europe were interviewed about how payments affect their operations. It is clear that the pandemic has had a negative impact, and many are now taking steps, such as cost savings and more prudent lending, to counteract an economic slowdown. Payment periods are generally increasing, especially in southern Europe, where more than half of those surveyed indicated that they accept longer payment periods than desired in order not to lose customers.

The decline in GDP during the year has hit European companies' revenues and has had a strongly negative impact on both liquidity and cash flow. At Intrum, we work every day to help companies get paid for the goods and services they provide. Intrum's role, to work for a sound economy, is based on the fact that in close dialogue with our clients we find solutions to assist their customers in identifying payment solutions that are individualised and result-oriented for all parties. To constantly have our goal of "leading the way to a sound economy" and value creation for our various stakeholders in focus, is the core of our sustainability agenda. This is especially true in these challenging times when a healthy economy is a must for Europe to rapidly return to normalcy.

Simplicity in a strengthened client offering

Although Intrum is of course affected by the pandemic, I look back on the first three quarters of the year with pride and confidence. It is great to see how the organisation has handled the challenges that have arisen, and I would like to thank each and every one of our dedicated employees. I look forward to taking on the role as CEO of Intrum, a company which I have gotten to know very well during my six years in various leading positions. Together with our management and employees, my priority will be to develop a new more efficient operational model which will enable us to further improve our competitiveness and allow for an enhanced offering to our clients and customers. In that way, we create further opportunities for long-term organic growth and profitability. I look forward to updating you more about our way forward and our updated financial targets at the digital capital markets day that we will hold on 18 November.

Stockholm, October 2020

Anders Engdahl President & CEO

"To constantly have our goal of "leading the way to a sound economy" and value creation for our various stakeholders in focus, is the core of our sustainability agenda."

Comment by the President and CEO

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Group overview

Development during the third quarter

Revenues and operating earnings

Revenues for the third quarter increased to SEK 4,521 M (3,786), corresponding to a 19 percent increase, with organic growth accounting for 10 percent, acquisitions for 14 percent and currency effects for –5 percent. The share of revenue denominated in EUR amounted to 67 percent (61).

Operating earnings (EBIT) for the third quarter amounted to SEK 1,688 M (1,375), with items affecting comparability of SEK 1 M (–101). The adjusted operating earnings, excluding items affecting comparability, increased to SEK 1,687 M (1,476).

Items affecting comparability

Operating earnings for the quarter included items affecting comparability of SEK 1 M (–101).

Net financial items

Net financial items for the quarter amounted to SEK –573 M (–633). Net interest amounted to SEK –452 M (–381), exchange rate differences to SEK 19 M (–17) and other financial items to SEK –140 M (–235). Other financial items for the quarter include SEK -87 M (-190) in expenses for early redemption of bonds

Earnings for the period and taxes

The tax expense for the quarter amounted to 22.5 percent of earnings before tax. Accordingly, net earnings for the quarter amounted to SEK 864 M (579), corresponding to earnings per share of SEK 6.97 (4.26) before and after dilution.

The company'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.

Cash flow and investments

Cash flow from operating activities during the third quarter amounted to SEK 2,060 M (1,306). The increase is largely due to a positive change in working capital.

Assets and financing

At the end of the quarter, total assets amounted to SEK 84 billion, compared with SEK 86 billion at the end of 2019. Net debt amounted to SEK 48.9 billion, down SEK 0.2 billion since the start of the year, despite Intrum having implemented share repurchases and dividends totalling SEK 2.5 billion. Net debt in relation to rolling 12-month adjusted Cash EBITDA amounted to 4.2x, compared with 4.3x at the end of 2019.

In July, Intrum issued a five-year unsecured bond of EUR 600 M at a fixed interest rate of 4.875 percent. The proceeds were used to refinance a fixed-rate bond maturing in 2022. In September, a supplementary issue of EUR 250 M was placed at an issue price of 100.75, giving an effective interest rate of 4.70 percent. The proceeds of the supplementary issue were used to repay outstanding amounts under Intrum's credit facility.

Also during the quarter, Intrum issued two unsecured bonds – a two-year bond of SEK 750 M at STIBOR 3m +250 basis points, and a five-year bond of SEK 1250 M at STIBOR 3m +460 basis points. The bonds were issued within the framework of the existing Swedish MTN programme.

Also, during the quarter, Intrum increased its borrowing by issuing commercial papers for SEK 0.3 billion.

The proceeds from the issues under the MTN program and the increase in commercial papers issued have been used to repay outstanding amounts within Intrum's credit facility.

At the end of the quarter, SEK 3.7 billion of Intrum's credit facility had been utilised, a decrease of SEK 5.5 billion compared with the second quarter.

Adjusted revenues, SEKm

Net Debt/RTM Cash EBITDA

Segment overview

Group overview

Credit Management Services, Strategic Markets and Portfolio Investments

Key figures, Q3 2020

	Credit Management	Strategic	Portfolio	Group
SEKm	Services	Markets	Investments	items	Group
Reported revenue	1,647	1,738	1,795	-659	4,521
Items affecting comparability	–	–	-1	–	-1
Adjusted revenues	1,647	1,738	1,794	-659	4,520
Reported segment earnings	482	515	1,094	-403	1,688
Items affecting comparability	–	–	-1	–	-1
Adjusted segment earnings	482	515	1,093	-403	1,687
Depreciation and amortisation	55	380	2	48	485
Depreciation	55	380	2	48	485
EBITDA	537	895	1,096	-355	2,173
Items affecting comparability	–	–	-1	–	-1
EBITDA excluding items affecting comparability	537	895	1,095	-355	2,172
Portfolio amortisations	–	–	972	–	972
Adjustment earnings from joint ventures	–	–	-60	–	-60
Adjustment cash flow from joint ventures	–	–	57	–	57
Cash EBITDA	537	895	2,065	-355	3,142

Key figures, Q3 2019

	Credit Management	Strategic	Portfolio	Group
SEKm	Services	Markets	Investments	items	Group
Reported revenue	1,764	961	1,696	-635	3,786
Items affecting comparability	–	–	-9	–	-9
Adjusted revenues	1,764	961	1,687	-635	3,777
Reported segment earnings	459	153	1,246	-482	1,375
Items affecting comparability	30	8	-8	71	101
Adjusted segment earnings	489	161	1,238	-411	1,476
Depreciation and amortisation	87	166	2	46	301
Depreciation and amortisation excluding	87	166	2	46	301
items affecting comparability
EBITDA	546	319	1,246	-436	1,676
Items affecting comparability	30	8	-8	71	101
EBITDA excluding items affecting comparability	576	327	1,238	-365	1,777
Portfolio amortisations	–	–	1,061	–	1,061
Adjustment earnings from joint ventures	–	–	-310	–	-310
Adjustment cash flow from joint ventures	–	–	81	–	81
Cash EBITDA	576	327	2,070	-365	2,609

Financial reports

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Credit Management Services

Credit management with a focus on late payment and collection. This segment includes 21 of the 24 European countries in which Intrum maintains credit management operations.

		Third quarter			Full year
	July–Sep	July–Sep	Change	Jan–Sep	Jan–Sep	Change
SEKm	2020	2019	%	2020	2019	%	2019
External revenues	1,089	1,190	-9	3,276	3,563	-8	4,736
Internal revenues	559	574	-3	1,667	1,658	1	2,278
Total revenues	1,647	1,764	-7	4,943	5,221	-5	7,014
Items affecting comparability	–	–		–	–	–	–
Adjusted revenues	1,647	1,764	-7	4,943	5,221	-5	7,014
Segment earnings	482	459	5	1,285	1,303	-1	1,558
Items affecting comparability	–	30		–	58	-100	235
Adjusted segment earnings	482	489	-1	1,285	1,361	-6	1,793
KPI's
External organic revenue change, %	-4	–	–	-6	–	–	–
Exchange rates, %	-4	–	–	-2	–	–	–
Acquired growth, %	–	–	–	–	–	–	–
Operating margin, %	29	26	3	26	25	1	22
Adjusted operating margin, %	29	28	1	26	26	–	26

The segment's operations developed stably during the third quarter. Organic revenues decreased by 4 percent compared with the preceding year, although the trend improved sequentially at the same time. Just as in the second quarter, the segment continued to experience lower business volumes in recently overdue receivables, with some clients having introduced temporary payment relief for their customers.

Despite a 4-percent organic decline and a negative currency effect of 4 percent, operating earnings decreased by only 1 percent. At the same time, the adjusted operating margin increased to 29 percent (28) as the decline in revenues was largely offset by higher efficiency and the preceding year's cost savings programme.

With the cost-savings programme beginning to have an impact during the first quarter of 2020, it is also expected to support the year-on-year profitability trend in the fourth quarter, even though new sales and the temporarily lower trend in business volumes are expected to restrain earnings in the final quarter of the year.

Credit Management Services, adjusted operating margin, %

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Strategic Markets

Credit management focusing on late payment and collection in Italy, Spain and Greece.

Group overview

	Third quarter				9 months	Full year
	July–Sep	July–Sep	Change	Jan–Sep	Jan–Sep	Change
SEKm	2020	2019	%	2020	2019	%	2019
External revenues	1,637	899	82	3,948	2,570	54	4,180
Internal revenues	101	62	62	249	200	25	256
Total revenues	1,738	961	81	4,197	2,770	52	4,436
Items affecting comparability	–	–	–	–	–177	-100	–177
Adjusted revenues	1,738	961	81	4,197	2,593	62	4,259
Segment earnings	515	153	236	962	728	32	–1,974
Items affecting comparability	–	8	-100	–	-127	-100	3,092
Adjusted segment earnings	515	161	219	962	601	60	1,118
KPI's
External organic revenue change, %	28	–	–	-7	–	–	–
Exchange rates, %	-4	–	–	–	–	–	–
Acquired growth, %	58	–	–	60	–	–	–
Operating margin, %	30	16	14	23	26	-3	–44
Adjusted operating margin, %	30	17	13	23	23	–	26

The segment's operations developed very strongly during the third quarter. Organic external revenue increased by 28 percent while revenues added 58 percent to the total. The acquired revenue are attributable entirely to our partnership with Piraeus Bank in Greece. During the quarter, the segment's revenue benefited from the favourable level of business, which we believe to be due to some extent to volumes delayed from previous quarters.

Earnings increased substantially compared with the preceding year and the operating margin increased by 30 percent (17). The increase is mainly related to the consolidation of our Greek operations, but even when adjusting for Greece, the segment's earnings increased more than organic revenues.

Although financial development in the segment is usually seasonal with a lower level of activity over the summer period, in the wake of the pandemic and with recovered business volumes being delayed from the first and second quarters, we are seeing a different seasonal pattern in 2020 and expect a more stable end to the year, given the current inflow of new business volumes.

Strategic Markets, adjusted operating margin, %

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Portfolio Investments

Intrum invests in portfolios of overdue receivables, after which Intrum's service operations collects on the receivables acquired.

Group overview

			Third quarter 2020			Third quarter 2019
	Overdue		Financial	Joint	Segment	Overdue		Financial	Joint	Segment
SEKm	receivables	REO	services	ventures	total	receivables	REO	services	ventures	total
Gross cash collections	2,700	–	–	–	2,700	2,679	–	–	–	2,679
Portfolio amortisations	-972	–	–	–	-972	-1,061	–	–	–	-1,061
Portfolio revaluations	1	–	–	–	1	9	–	–	–	9
Other revenues	–	30	36	–	66	8	21	40	–	69
Revenues	1,729	30	36	–	1,795	1,635	21	40	–	1,696
Collection costs	-711	-32	-17	–	-761	-728	-19	-13	–	-760
Earnings from joint ventures	–	–	–	60	60	–	–	–	310	310
Segment earnings	1,017	-2	19	60	1,094	907	1	27	310	1,245
Items affecting comparability	-1	–	–	–	-1	-9	–	–	–	-9
Adjusted segment earnings	1,016	-2	19	60	1,093	898	1	27	310	1,236
KPI's
Investments	837	36	–	–	873	831	50	–	–	880
Average book value	27,999	411	–	6,532	34,942	26,253	353	–	6,181	32,787
Book value	27,966	416	–	6,557	34,940	26,279	372	–	6,546	33,196
ERC	55,082	710	–	8,601	64,393	51,373	657	–	9,280	61,310
Cash multiple	1.97	1.71	–	1.31	1.84	1.95	1.77	–	1.42	1.85
Cost-to-Collect, %	26	107	–	–	27	27	94	–	–	28
Amortisation ratio, %	36	–	–	–	36	40	–	–	–	40
Operating margin, %	59	-7	53	–	61	55	7	67	–	73
Adjusted operating margin, %	59	-7	53	–	61	55	7	67	-	73
Return on portfolio investments, ROI%	15	-1	–	4	12	14	2	–	20	15
Adjusted return on portfolio investments, ROI, %	15	-1	–	4	12	14	2	–	20	15
Segment cash flow	1,989	-2	19	57	2,063	1,959	1	27	81	2,068
Replenishment investment level	1,202	–	–	–	1,202	1,157	–	–	–	1,157
Cash flow after replenishment investments	787	–	–	–	787	802	–	–	–	802

The segment's operations developed well in the third quarter, with a solid collection level of SEK 2,700 M (2,679). For the Group as a whole, 117 percent of the Covid-19 adjusted forecast was collected and 99 percent of the pre-Covid-19 forecast.

The adjusted segment's earnings decreased to SEK 1,093 M (1,236) in the quarter and the decrease in earnings compared with the preceding year is attributable entirely to earnings from joint ventures decreasing to SEK 60 M (310). Earnings from joint ventures mainly include our Italian SPV portfolio, which developed strongly in 2019 and earnings from which decline naturally over its lifetime, while its contribution to earnings in 2020 is also being impacted by due to the pandemic.

Portfolio investments for the quarter amounted to SEK 0.8 billion (0.8), with the book value of our investments increasing by 5 percent to SEK 34.9 billion (33.2) compared with the corresponding quarter in the preceding year. The return (ROI) on the portfolio amounted to 12 percent (15) and portfolio revaluations of SEK 1 M (9) had no significant impact on the segment's earnings.

The expected return on investments made in the quarter continues to be significantly above the level we at which we invested in 2019 and before the outbreak of the pandemic. Although this is naturally encouraging, we are at the same time aware that current return levels probably will not be sustained given our ambition to increase our level of investment in 2021 and beyond.

Portfolio Investments, book value and adjusted return, SEK Billion

Financial reports

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Portfolio Investments, cont.

			9 months 2020					9 months 2019
	Overdue		Financial	Joint	Segment	Overdue		Financial	Joint	Segment
SEKm	receivables	REO	services	ventures	total	receivables	REO	services	ventures	total
Gross cash collections	8,020	–	–	–	8,020	7,946	–	–	–	7,946
Portfolio amortisations	-3,095	–	–	–	-3,095	-3,125	–	–	–	-3,125
Portfolio revaluations	-632	–	–	–	-632	27	–	–	–	27
Other revenues	–	105	117	–	222	9	223	108	–	340
Revenues	4,293	105	117	–	4,515	4,857	223	108	–	5,188
Collection costs	-2,101	-95	-60	–	-2,257	-2,157	-203	-47	–	-2,407
Earnings from joint ventures	–	–	–	242	242	–	–	–	985	985
Segment earnings	2,192	9	57	242	2,501	2,700	20	61	985	3,765
Items affecting comparability	632	–	–	–	632	-27	–	–	–	-27
Adjusted segment earnings	2,824	9	57	242	3,133	2,673	20	61	985	3,739
KPI's
Investments	3,754	102	–	–	3,856	3,544	195	–	–	3,739
Average book value	28,237	399	–	6,548	35,185	25,555	1,528	–	5,646	32,729
Book value	27,966	416	–	6,557	34,940	26,279	372	–	6,546	33,196
ERC	55,082	710	–	8,601	64,393	51,373	657	–	9,280	61,310
Cash multiple	1.97	1.71	–	1.31	1.84	1.95	1.77	–	1.42	1.85
Cost-to-Collect, %	26	91	–	–	27	27	91	–	–	29
Amortisation ratio, %	39		–	–	39	39	–	–	–	39
Operating margin, %	51	9	49	–	55	56	9	56	–	73
Adjusted operating margin, %	57	9	49	–	61	55	9	56	–	72
Return on portfolio investments, ROI%	10	3	–	5	9	14	2	–	23	15
Adjusted return on portfolio investments, ROI, %	13	3	–	5	12	14	2	–	23	15
Segment cash flow	5,919	9	57	310	6,295	5,798	20	61	166	6,045
Replenishment investment level	3,607	–	–	–	3,607	3,471	–	–	–	3,471
Cash flow after replenishment investments	2,312	–	–	–	2,312	2,327	–	–	–	2,327

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Financial overview

Alternative P&L, Adjusted Group figures

		Third quarter			9 months
	July–Sep	July–Sep	Change	Jan–Sep	Jan–Sep	Change
SEKm	2020	2019	%	2020	2019	%	2019
External revenues	2,792	2,159	30	7,446	6,297	18	9,191
Gross cash collections	2,700	2,679	1	8,020	7,946	1	10,772
Cash flow from joint ventures	57	81	-30	310	166	87	197
Cash revenue	5,549	4,919	13	15,775	14,409	9	20,160
Expenses	-2,407	-2,310	4	-7,292	-6,816	7	–9,504
Cash EBITDA excluding pro forma	3,142	2,609	20	8,484	7,593	12	10,656
adjustments
Cash EBITDA margin excluding pro forma adjustments, %	57	53	4	54	52	2	53
Depreciation and amortisation	-485	-301	61	-1,194	-900	33	–1,246
Portfolio amortisations	-972	-1,061	-8	-3,095	-3,125	-1	–4,183
Adjustment earnings from joint ventures	60	310	-81	242	985	-75	1,179
Adjustment cash flow from joint ventures	-57	-81	-30	-310	-166	87	–197
Adjusted EBIT	1,688	1,476	14	4,127	4,387	-6	6,208
Operating cash flow to Cash EBITDA
Operating cash flow	2,060	1,306	56	7,228	4,555	59	6,392
Items affecting comparability excluding impairment	–	110	-100	–	217	-100	1,138
Cash financial items	877	832	6	1,525	1,553	-1	1,875
Paid tax	135	267	-43	346	480	-28	802
Change in working capital (NWC)	36	-24	-249	-1,013	590	-271	371
Other non-cash items	38	346	-89	330	1,018	-68	1,059
Adjustment earnings from joint ventures	-60	-310	-81	-242	-985	-75	–1,179
Adjustment cash flow from joint ventures	57	81	-30	310	166	87	197
Pro forma adjustments							789
Cash EBITDA	3,142	2,609	20	8,484	7,593	12	11,444

Alternative P&L, Adjusted Group figures

	Third quarter 2020						9 months 2020
	Credit					Credit
	Man		Portfolio			Man		Portfolio
	agement	Strategic	Invest	Group		agement	Strategic	Invest	Group
SEKm	Services	Markets	ments	items	Group	Services	Markets	ments	items	Group
External revenue	1,089	1,637	66	–	2,792	3,276	3,948	222	–	7,446
Gross cash collections	–	–	2,700	–	2,700	–	–	8,020	–	8,020
Cash flow from joint ventures	–	–	57	–	57	–	–	310	–	310
Cash revenue	1,089	1,637	2,823	–	5,549	3,276	3,948	8,552	–	15,775
Expenses	-552	-742	-759	-355	-2,407	-1,777	-2,140	-2,251	-1,125	-7,292
Cash EBITDA	537	895	2,065	-355	3,142	1,499	1,808	6,301	-1,125	8,484
Depreciation and amortisation	-55	-380	-2	-48	-485	-214	-846	-6	-128	-1,194
Portfolio amortisations	–	–	-972	–	-972	–	–	-3,095	–	-3,095
Adjustment earnings from joint ventures	–	–	60	–	60	–	–	242	–	242
Adjustment cash flow from joint ventures	–	–	-57	–	-57	–	–	-310	–	-310
Adjusted segment earnings	482	515	1,093	-403	1,687	1,285	962	3,133	-1,253	4,127
Cash EBITDA margin, %	49	55	73	–	57	46	46	74	–	54

Group overview Financial reports

information Definitions About Intrum

Financial overview, cont.

Revenues by type

		Third quarter			Full year
	July–Sep	July–Sep	Change	Jan–Sep	Jan–Sep	Change
SEKm	2020	2019	%	2020	2019	%	2019
External Credit Management revenues	2,725	2,090	30	7,224	6,134	18	8,930
Gross cash collections	2,700	2,679	1	8,020	7,946	1	10,772
Other Portfolio Investment segment	66	69	5	222	340	-35	438
revenues
Associate earnings cash contribution	57	81	-30	310	166	87	197
Cash revenue	5,549	4,919	13	15,775	14,586	8	20,337
Portfolio investment amortisations	-972	-1,061	-8	-3,095	-3,125	-1	–4,183
Portfolio investment revaluations	1	9	-90	-632	27	-2 441	28
Joint venture cash contribution	-57	-81	-30	-310	-166	87	–197
Total revenues	4,521	3,786	19	11,739	11,322	4	15,985

Change in revenue

	Third quarter		9 months		Full year
Change in revenues, %	July–Sep	July–Sep 2019	Jan–Sep 2020	Jan–Sep
	2020			2019	2019
Organic growth	10	-2	-3	-3	–2
Acquired growth	14	19	14	14	18
Portfolio revaluations	–	–	-6	–	0
Exchange rates	-5	2	-1	3	3
Total	19	19	4	14	19

Items affecting comparability in operating earnings

	Third quarter		9 months	Full year
	July–Sep	July–Sep	Jan–Sep	Jan–Sep
SEKm	2020	2019	2020	2019	2019
Positive revaluations of portfolio	71	131	115	545	920
investments
Negative revaluations of portfolio	-71	-122	-746	-518	–892
investments
Integration costs Lindorff	–	-22	–	-90	–224
Transaction costs for M&A	–	-27	–	-138	–274
Received compensation for terminated	–	–	–	147	147
BPO contract
Impairment write-down of goodwill	–	–	–	–	–2,700
Efficiency improvement programme	–	-35	–	-35	–656
Other items affecting comparability	–	-26	–	-100	–469
Total items affecting comparability	1	-101	-632	-189	–4,148
in operating earnings

Net financial items specification

	Third quarter			9 months			Full year
	July–Sep	July–Sep	Change	Jan–Sep	Jan–Sep	Change
SEKm	2020	2019	%	2020	2019	%	2019
Interest earnings	2	22	-89	32	44	-27	63
Interest costs	-444	-392	13	-1,319	-1,088	21	–1,512
Interest cost on leasing liability according to IFRS 16	-10	-11	-7	-31	-33	-6	–43
Exchange rate differences	19	-17	-209	20	15	33	18
Amortisation of borrowing costs	-46	-23	102	-86	-65	32	–94
Commitment fee	-24	-22	8	-89	-51	74	–80
Other financial items	-69	-190	-64	-84	-203	-59	–273
Total net financial items	-573	-633	-9	-1,557	-1,381	13	–1,921

Financial reports

Other

information Definitions About Intrum

Quarterly overview

Group

	Quarter 3	Quarter 2	Quarter 1	Quarter 4	Quarter 3	Quarter 2	Quarter 1	Quarter 4
SEKm	2020	2020	2020	2019	2019	2019	2019	2018
Revenues	4,521	3,885	3,333	4,663	3,786	3,784	3,752	3,517
Adjusted revenues	4,520	3,882	3,969	4,662	3,777	3,780	3,561	3,441
Operating earnings (EBIT)	1,688	1,348	459	–2,137	1,375	1,475	1,347	1,003
EBIT adjusted	1,687	1,345	1,095	1,821	1,476	1,561	1,350	1,236
Cash EBITDA	3,142	2,709	2,633	3,063	2,609	2,670	2,314	2,401
Net earnings	864	671	–33	–2,482	579	879	739	482
Earnings per share, SEK	6.97	5.39	–0.25	–18.84	4.26	6.26	5.63	3.70
Return on equity, %	16	13	0	–42	9	13	12	8
Equity per share, SEK	166.15	159.46	165.62	168.12	193.28	187.54	188.55	195.16
Cash flow from operating activities per share, SEK	17.01	23.88	17.37	14.03	9.97	14.47	10.30	13.81
Number of employees (FTEs)	9,446	9,366	9,188	9,430	8,959	8,542	8,133	7,711

Credit Management Services

	Quarter 3	Quarter 2	Quarter 1	Quarter 4	Quarter 3	Quarter 2	Quarter 1
SEKm	2020	2020	2020	2019	2019	2019	2019
Revenues	1,647	1,590	1,705	1,792	1,764	1,741	1,716
– thereof external clients	1,089	1,048	1,139	1,182	1,190	1,194	1,179
– thereof intercompany revenues	559	542	566	610	574	547	537
Adjusted revenues	1,647	1,590	1,705	1,793	1,765	1,740	1,716
Segment earnings	482	383	420	255	459	448	396
Adjusted segment earnings	482	383	420	430	490	460	412
Items affecting comparability	–	–	–	–176	–30	–12	–15
Adjusted operating margin, %	29	24	25	24	28	26	24

Strategic Markets

	Quarter 3	Quarter 2	Quarter 1	Quarter 4	Quarter 3	Quarter 2	Quarter 1
SEKm	2020	2020	2020	2019	2019	2019	2019
Revenues	1,738	1,265	1,194	1,665	961	975	834
– thereof external clients	1,637	1,202	1,108	1,610	899	905	766
– thereof intercompany revenues	101	63	86	55	62	70	68
Adjusted revenues	1,738	1,265	1,194	1,665	961	973	659
Segment earnings	515	345	102	–2,702	153	334	241
Adjusted segment earnings	515	345	102	517	161	337	103
Items affecting comparability	–	–	–	–3,219	–8	–3	138
Adjusted operating margin, %	30	27	9	31	17	35	16

Portfolio Investments

	Quarter 3	Quarter 2	Quarter 1	Quarter 4	Quarter 3	Quarter 2	Quarter 1	Quarter 4
SEKm	2020	2020	2020	2019	2019	2019	2019	2018
Gross cash collections	2,700	2,536	2,784	2,826	2,679	2,671	2,594	2,663
Portfolio amortisations	-972	–994	–1,129	–1,058	–1,061	–1,068	–996	–1,055
Portfolio revaluation	1	3	–636	1	9	2	16	76
Other Portfolio Investment segment	66	90	66	98	68	80	193	57
revenues
Revenue	1,795	1,635	1,085	1,867	1,695	1,685	1,807	1,741
Segment earnings	1,094	1,006	401	1,195	1,246	1,215	1,306	1,057
Adjusted segment earnings	1,093	1,003	1,037	1,208	1,236	1,214	1,289	982
Portfolio investments	837	1,267	1,650	3,780	831	1,436	1,277	5,444
Total carrying value of portfolio	34,940	34,945	36,297	35,429	33,196	32,377	31,392	32,261
investments
– thereof purchased receivables	27,966	28,032	29,026	28,508	26,279	26,228	25,628	24,830
– thereof joint ventures	6,557	6,507	6,855	6,539	6,546	5,815	5,477	4,746
– thereof real estate	416	406	416	382	371	334	287	2,685
Adjusted return on portfolio	12	11	11	14	15	15	16	13
investments, %
Amortisation ratio, %	36	39	41	37	40	40	38	40
ERC	64,393	64,674	68,551	64,995	61,310	60,896	58,686	57,382
Cash multiple	1.84	1.85	1.89	1.83	1.87	1.88	1.87	1.94

Group

Financial reports

Other

information Definitions About Intrum

Five year overview

Group

SEKm	2019	2018	2017	2016	2015
Revenues	15,985	13,442	9,434	5,869	5,419
Adjusted revenues	15,780	13,131	9,437	5,824	5,387
EBIT	2,060	3,978	2,728	1,921	1,577
Adjusted EBIT	6,208	4,500	3,128	1,866	1,599
Net earnings	–285	1,943	1,503	1,468	1,172
Earnings per share, SEK	–2,76	14,18	14,62	20,15	15,92
Return on equity, %	–2	8	11	41	38
Equity per share, SEK	168,12	195,16	170,59	55,88	42,66
Cash flow from operating activities per share, SEK	48,77	48,10	–	46,64	39,74
Number of employees (FTEs)	8,766	7,910	6,293	3,865	3,738

Group

	Quarter 3	Quarter 3	Quarter 3	Quarter 3	Quarter 3
SEKm	2020	2019	2018	2017	2016
Revenues	4,521	3,786	3,180	2,986	1,433
Adjusted revenues	4,520	3,777	3,180	2,985	1,462
EBIT	1,688	1,375	838	977	506
Adjusted EBIT	1,687	1,476	1,095	1,036	520
Cash EBITDA	3,142	2,609	2,247	2,065	919
Net earnings	864	579	396	615	375
Earnings per share, SEK	6,97	4,26	3,02	4,68	5,14
Return on equity, %	16	9	7	11	44
Equity per share, SEK	166.15	193,28	177,57	166,46	44,58
Cash flow from operating activities per share, SEK	17.01	9,97	9,25	13,65	11,57
Number of employees (FTEs)	9,446	8,959	7,571	8,349	3,864

Segment overview

Financial reports

Reconciliation of alternative performance measures

					Rolling
	Third quarter 9 months				Full year
	July–Sep	July–Sep	Jan–Sep	Jan–Sep	Oct 2019–
SEKm	2020	2019	2020	2019	Sep 2020	2019
Items affecting comparability in revenues
Positive revaluations of portfolio investments	71	131	115	545	490	920
Negative revaluations of portfolio investments	-71	-122	-746	-518	-1,120	–892
Impact from early terminated BPO	–	–		177	0	177
Total items affecting comparability in revenues	1	9	-632	204	-630	205
Items affecting comparability in operating earnings
Positive revaluations of portfolio investments	71	131	115	545	490	920
Negative revaluations of portfolio investments	-71	-122	-746	-518	-1,120	–892
Integration costs Lindorff	–	-22	–	-90	-134	–224
Transaction costs for M&A	–	-27	–	-138	-136	–274
Impact from early terminated BPO contract	–	–	–	147	–	147
Impairment write-down of goodwill	–	–	–	–	-2,700	–2,700
Efficiency improvement programme	–	-35	–	-35	-621	–656
Other items affecting comparability	–	-26	–	-100	-369	–469
Total items affecting comparability in operating	1	-101	-632	-189	-4,591	–4,148
earnings
Items affecting comparability by earnings statement
line
Revenues from clients	–	–	–	177	0	177
Positive revaluations of portfolio investments	71	131	115	545	490	920
Negative revaluations of portfolio investments	-71	-122	-746	-518	-1,120	–892
Cost of sales	–	-37	–	-109	-710	–819
Sales, marketing and administration costs	–	-72	–	-284	-550	–834
Impairment write-down of goodwill	–	–	–	–	-2,700	–2,700
Total items affecting comparability in operating	1	-101	-632	-189	-4,591	–4,148
earnings
Other items affecting comparability by segment
Credit Management Services	–	-30	–	-58	-177	–235
Strategic Markets	–	-8	–	127	-3,219	–3,092
Portfolio Investments	–	-1	–	-2	-13	–15
Common costs	–	-71	–	-284	-550	–834
Total other items affecting comparability	–	-110	–	-217	-3,959	–4,176
Adjusted revenue
Revenues	4,521	3,786	11,739	11,322	16,402	15,985
Items affecting comparability	-1	-9	632	-204	631	–205
Adjusted revenue	4,520	3,777	12,371	11,118	17,032	15,780
Adjusted EBIT
EBIT	1,688	1,375	3,494	4,197	1,358	2,060
Items affecting comparability	-1	101	632	189	4,591	4,148
Total adjusted EBIT	1,687	1,476	4,126	4,386	5,948	6,208

Comment by the President and CEO

Group overview Financial reports

Reconciliation of alternative performance measures, cont.

Segment overview

					Rolling
	Third quarter		9 months		12 months	Full year
	July–Sep	July–Sep	Jan–Sep	Jan–Sep	Oct 2019–
SEKm	2020	2019	2020	2019	Sep 2020	2019
Portfolio Investment segment earnings excluding
revaluations
Portfolio Investment segment earnings	1,094	1,219	2,501	3,704	3,674	4,877
Revaluations	-1	-9	632	-27	631	–28
Portfolio Investment segment earnings excluding	1,093	1,210	3,133	3,677	4,304	4,849
revaluations
Average carrying value
Average carrying value receivables	27,999	26,253	28,237	25,555	28,383	26,669
Average carrying value joint ventures	6,532	6,181	6,548	5,646	6,615	5,643
Average carrying value real estate	411	353	399	1,528	403	1,534
Total average carrying value	34,942	32,787	35,185	32,729	35,401	33,846
Return including revaluations	12	15	9	15	10	15
Return excluding revaluations	12	15	12	15	12	15
Cash EBITDA
EBIT	1,688	1,375	3,495	4,197	1,358	2,060
Depreciation and amortisation	485	301	1,194	900	1,541	1,246
Portfolio amortisations	972	1,061	3,095	3,125	4,153	4,183
Portfolio revaluations	-1	-9	632	-27	630	–28
Adjustments according to loan covenants:
Adjustment earnings from joint ventures	-60	-310	-242	-985	-436	–1,179
Adjustment cash flow from joint ventures	57	81	310	166	341	197
Goodwill impairment	–	–	–	–	2,700	2,700
Items affecting comparability	–	110	–	216	1,260	1,476
Other pro forma adjustments	–	–	–	–	–	789
Cash EBITDA	3,142	2,609	8,484	7,593	11,546	11,444
Net debt
Liabilities to credit institutions	3,602	4,995	3,602	4,995	3,602	6,186
Bond loans	45,743	40,883	45,743	40,883	45,743	41,644
Provisions for pensions	400	268	400	268	400	387
Commercial paper	1,553	3,274	1,553	3,274	1,553	2,794
Cash and cash equivalents	-2,417	-4,438	-2,417	-4,438	-2,417	–1,906
Net debt at end of period	48,880	44,982	48,880	44,982	48,880	49,105
Net Debt/RTM Cash EBITDA					4.2	4.3

Financial reports

Financial reports

Group overview

Consolidated earnings statement in summary

					Rolling
	Third quarter			9 months		Full year
	July–Sep	July–Sep	Jan–Sep	Jan–Sep	Oct 2019–
SEKm	2020	2019	2020	2019	Sep 2020	2019
Revenues from clients	2,799	2,159	7,449	6,474	10,346	9,368
Revenue on portfolio investments calculated	1,721	1,618	4,922	4,821	6,686	6,589
using the effective interest method
Positive revaluations of Portfolio investments	71	131	115	545	490	920
Negative revaluations of Portfolio	-71	-122	-746	-518	-1,120	–892
investments
Total revenues	4,521	3,786	11,739	11,322	16,402	15,985
Cost of sales	-2,421	-2,220	-7,056	-6,409	-10,454	–9,807
Gross earnings	2,100	1,566	4,682	4,913	5,948	6,178
Sales, marketing and administrative expenses	-472	-501	-1,430	-1,701	-2,327	–2,597
Goodwill impairment					-2,700	–2,700
Participation in associated companies and joint ventures	60	310	242	985	437	1,179
EBIT	1,688	1,375	3,494	4,197	1,358	2,060
Net financial items	-573	-633	-1,557	-1,381	-2,096	–1,921
Earnings before tax	1,115	742	1,938	2,816	-739	139
Tax	-251	-163	-436	-619	-241	–424
Net earnings for the period	864	579	1,502	2,197	-979	–285
Of which attributable to:
Parent company's shareholders	844	558	1,471	2,105	-995	–362
Non-controlling interest	21	21	31	92	17	77
Net earnings for the period	864	579	1,502	2,197	-979	–285
Average no of shares before and after dilution, '000	121,121	130,941	124,665	131,108	126,363	131,066
Earnings per share before and after dilution
Profit from continuing operations, SEK	6,97	4,26	11,80	16,06	-6,73	–2,76
Total earnings per share before and after dilution, SEK	6,97	4,26	11,80	16,06	-6,73	–2,76

Consolidated statement of comprehensive earnings in summary

	Third quarter			9 months
	July–Sep	July–Sep	Jan–Sep	Jan–Sep	Rolling
SEKm	2020	2019	2020	2019	12 months	2019
Net earnings for the period	864	579	1,502	2,197	-980	–285
Other comprehensive earnings, items that will be reclassified to profit and loss:
Currency translation difference	29	416	-705	981	-1,368	318
Other comprehensive earnings, items that will not be reclassified to profit and loss:
Remeasurement of pension liability					-32	–32
Comprehensive earnings for the period	893	995	797	3,178	-2,388	1
Of which attributable to:
Parent company's shareholders	811	875	692	2,987	-2,389	–94
Non-controlling interest	82	120	105	191	9	95
Comprehensive earnings for the period	893	995	797	3,178	-2,383	1

Consolidated balance sheet in summary

Group overview

	30 Sep	30 Sep	31 Dec
SEKm	2020	2019	2019
ASSETS
Intangible fixed assets
Goodwill	32,855	35,407	33,358
Capitalized expenditure for IT development and	868	1,022	802
other intangibles
Client relationships	5,386	4,326	6,079
Total intangible fixed assets	39,109	40,755	40,239
Tangible fixed assets
Right-of-use assets	880	632	888
Investment property	0	0	0
Other tangible fixed assets	199	235	212
Total tangible fixed assets	1,079	867	1,100
Other fixed assets
Shares in joint ventures	6,557	6,546	6,539
Other shares and participations	0	0	0
Portfolio investments	27,966	26,279	28,508
Deferred tax assets	1,274	613	1,300
Other long-term receivables	94	199	183
Total other fixed assets	35,893	33,637	36,530
Total fixed assets	76,080	75,259	77,869
Current Assets
Accounts receivable	1,157	1,570	1,860
Inventory of real estate	416	371	382
Client funds	1,142	1,059	1,060
Tax assets	304	291	382
Other receivables	1,410	1,389	1,334
Prepaid expenses and accrued earnings	1,349	1,341	1,343
Cash and cash equivalents	2,417	4,438	1,906
Total current assets	8,195	10,459	8,267
TOTAL ASSETS	84,275	85,718	86,136
SHAREHOLDERS' EQUITY AND LIABILITIES
Attributable to parent company's shareholders	20,124	25,308	22,014
Attributable to non-controlling interest	2,943	2,441	2,879
Total shareholders' equity	23,067	27,749	24,893
Long-term liabilities
Liabilities to credit institutions	3,602	4,986	6,186
Bond loans	45,743	39,883	40,644
Long-term leasing liabilities	692	456	474
Other long-term liabilities	684	1,038	1,303
Provisions for pensions	400	268	387
Other long-term provisions	57	6	19
Deferred tax liabilities	1,304	1,985	1,938
Total long-term liabilities	52,481	48,622	50,951
Current liabilities
Liabilities to credit institutions	0	9	0
Bond loans	0	1,000	1,000
Commercial paper Client funds payable	1,553 1,142	3,274 1,059	2,794 1,060
Accounts payable	562	406	512
Earnings tax liabilities	1,042	490	422
Advances from clients	65	102	88
Short-term leasing liabilities	227	198	443
Other current liabilities	1,541	661	810
Accrued expenses and prepaid earnings	2,559	2,097	3,014
Other short-term provisions	35	51	149
Total current liabilities	8,727	9,347	10,292
TOTAL SHAREHOLDERS' EQUITY AND	84,275	85,718	86,136

LIABILITIES

Other

Consolidated statement of changes in shareholders' equity

	2020			2019
	Attributable to Parent Company's	Non-controlling		Attributable to Parent Company's	Non-controlling
SEKm	shareholder	interest	Total	shareholder	interest	Total
Opening balance, January 1	22,014	2,879	24,893	23,666	2,006	25,672
Share dividend	-1,332	-41	-1,373	-1,247	-12	-1,259
Repurchase of shares	-1,250		-1,250	-86		-86
Change in Group structure				-12	256	244
Divestment of shares in company with non-controlling interest
Comprehensive earnings for the period	692	105	797	2,987	191	3,178
Closing balance, September 30	20,124	2,943	23,067	25,308	2,441	27,749

Consolidated cash flow statement in summary

	Third quarter		9 months		Full year
	July–Sep	July–Sep	Jan–Sep	Jan–Sep
SEKm	2020	2019	2020	2019	2019
Operating activities
EBIT	1,688	1,375	3,495	4,197	2,060
Depreciation/amortisation and impairment write-down	485	301	1,194	900	4,284
Amortisation/revaluation of purchased debt	971	1,052	3,726	3,098	4,155
Other adjustment for items not included in cash flow	-38	-347	-330	-1,017	–1,059
Interest received	2	22	32	44	62
Interest paid	-786	-609	-1,384	-1,317	–1,454
Other financial expenses paid	-93	-245	-173	-280	–483
Earnings tax paid	-135	-267	-346	-480	–802
Cash flow from operating activities before changes in	2,096	1,281	6,216	5,144	6,763
working capital
Changes in factoring receivables	-29	22	-6	-49	–47
Other changes in working capital	-7	3	1 019	-540	–324
Cash flow from operating activities	2,060	1,306	7,228	4,555	6,392
Investing activities
Purchases of tangible and intangible fixed assets	-166	-89	-481	-438	–699
Portfolio investments in receivables and inventory of real estate	-747	-959	-3,728	-3,884	–7,612
Acquisition of subsidiaries and joint ventures	0	0	-6	-1,958	–5,135
Liquid assets in acquired/divested subsidiaries	0	0	0	344	384
Proceeds from divestment of subsidiaries and associated	0	0	0	1,488	1,488
companies
Other cash flow from investing activities	111	-11	404	-29	–72
Cash flow from investing activities	-802	-1,059	-3,811	-4,477	–11,646
Financing activities Borrowings and repayment of loans	-1,671	2,908	-146	4,293	7,229
Repurchase of shares	0	0	-1,250	-86	–86
Share dividend to parent company's shareholders	0	0	-1,332	-1,247	–1,247
Dividend to non-controlling shareholders	-41	-12	-41	-12	–58
Cash flow from financing activities	-1,712	2,896	-2,769	2,948	5,838
Total change in liquid assets	-457	3,143	644	3 026	584
Opening balance of liquid assets	2,879	1,237	1,906	1,348	1,348
Exchange rate differences in liquid assets	-8	58	-136	64	–26
Closing balance of liquid assets	2,414	4,438	2,414	4,438	1,906
Group total
Cash flow from operating activities	2,060	1,306	7,228	4,555	6,392
Cash flow from investing activities	-802	-1,059	-3,811	-4,477	–11,646
Cash flow from financing activities	-1,712	2,896	-2,759	2,948	5,838

Other

information Definitions About Intrum

Earnings statement – parent company

Group overview

	9 months		Full year
	Jan–Sep	Jan–Sep
SEKm	2020	2019	2019
Revenues	409	174	402
Gross earnings	409	174	402
Sales and marketing expenses	-18	-17	–25
Administrative expenses	-552	-498	–793
EBIT	-161	-341	–416
Earnings from subsidiaries	114	158	1,181
Exchange rate differences on monetary items	297	-806	–578
classified as expanded investment and hedging activities
Net financial items	-721	-315	–970
Earnings before tax	-471	-1,304	–783
Tax	81	0	96
Net earnings for the period	-390	-1,304	–687

Net earnings for the period corresponds to comprehensive earnings for the period.

Balance sheet – parent company

SEKm	30 Sep 2020	30 Sep 2019	31 Dec 2019
ASSETS
Fixed assets
Intangible fixed assets	268	118	141
Tangible fixed assets	11	13	13
Financial fixed assets	69,409	54,236	69,627
Total fixed assets	69,688	54,367	69,781
Current assets
Current receivables	521	16,512	1,484
Cash and cash equivalents	294	0	220
Total current assets	815	16,512	1,704
TOTAL ASSETS	70,503	70,879	71,485
SHAREHOLDERS' EQUITY AND LIABILITIES
Restricted equity	285	285	285
Unrestricted equity	11,170	13,525	14,142
Total shareholders' equity	11,455	13,810	14,427
Long-term liabilities	54,980	49,087	50,192
Current liabilities	4,068	7,982	6,866
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES	70,503	70,879	71,485

Other information

Group overview

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 409 M (174) for the ninemonth period and earnings before tax of SEK –471 M (1,304). The Parent Company invested SEK 148 M (97) in fixed assets during the nine-month period and had, at the end of the period, SEK 294 M (0) in cash and cash equivalents. The average number of employees was 56 (68).

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 accounting principles applied by the Group and the Parent Company are essentially unchanged compared with the 2019 Annual Report.

Changes in IFRS standards as of 1 January 2020 have not had any material impact on this interim report.

Transactions with related parties

Neither during the quarter nor during the full-year, have any significant transactions occurred between Intrum and other closely related companies, boards or Group management teams.

Market development and outlook

In Intrum's integrated business model, consisting of credit management services and portfolio investments, we see favourable development in both areas, even though Q1, 2020 has been impacted by considerable macroeconomic insecurity, which, in the short term affects our clients decision making. Much of the groundwork has now been done to enable us to start the execution of our production transformation programme in the credit management operations. Intrum will gradually centralise, standardise and improve large parts of the collection process. In the future, we anticipate the actions being taken in this area will continuing to improve efficiency and the CMS margin.

Significant risks and uncertainties

Risks to which the Group and Parent Company are exposed include risks relating to economic developments, Brexit, 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 portfolio investments and payment guarantees, as well as financing risks. The risks are described in more detail in the Board of Directors' report in Intrum's 2019 Annual Report. No significant risks are considered to have arisen besides those described in the Annual Report.

New segmentation as of 2020

To reflect Intrum's growth in southern Europe, a third segment has been established, comprising Intrum's markets in southern Europe, in parallel with the existing Credit Management Services and Portfolio Investments segments. Accordingly, as of 2020, Intrum is organised and into, and will report on three segments, these being Credit Management Services (CMS), Portfolio Investments (PI) and Strategic Markets (Greece, Italy and Spain). At the same time, the previous segmentation into four geographical regions is being discontinued.

Fair value of financial instruments

Most of the Group's financial assets and liabilities (portfolio investments, accounts receivable, other receivables, cash and cash equivalents, liabilities to credit institutions,bonds, commercial papers, accounts payable and other liabilities) are carried in the accounts at amortised cost. For most of these financial instruments, the carrying amount is assessed to be a good estimate of fair value. For outstanding bonds with a total carrying value of SEK 45,743 M (40,883) at the end of the quarter, fair value is, however, calculated at SEK 43,076 M (41,277). The Group also holds forward exchange contracts and other financial assets of SEK 384 M (363), as well as financial liabilities of SEK 100 M (146) carried at fair value in the earnings statement.

Group overview Segment overview

Financial reports

Other

The share

Q3 in brief

Comment by the President and CEO

Intrum's share is included in Nasdaq Stockholm's Large Cap list. During the period 1 July–30 September 2020 29,590,089 shares were traded for a total value of SEK 6 317 M, corresponding to 24 percent of total number of shares at the end of the period.

The highest price paid during the period 1 July–30 September 2020 was SEK 238,20 kr (16 July) and the lowest was SEK 168,70 kr (1 July). On the last trading day of the period, 30 September 2020, the price was SEK 220,8 (latest paid). During the period 1 July–30 September 2020, Intrum's share price rose by 27 percent, while Nasdaq OMX Stockholm rose by 10 percent.

Share price, SEK

Shareholders

30 Sep 2020	No of shares	Capital and Votes, %
Nordic Capital	57,728,956	47.4
AMF Försäkring & Fonder	9,624,328	5.7
Handelsbanken Fonder	5,439,138	4.5
Swedbank Robur Fonder	3,171,125	2.6
Vanguard	2,559,805	2.1
Första AP-fonden	2,294,409	1.9
TIAA - Teachers Advisors	1,756,663	1.5
Nordnet Pensionsförsäkring	1,848,475	1.5
C WorldWide Asset Management	1,486,999	1.2
Lannebo Fonder	1,200,000,	1.0
Degroof Petercam	1,134,402	0.9
Avanza Pension	1,169,108	0.9
BlackRock	1,063,550	0.9
Folketrygdfondet	1,047,404	0.9
Folksam	1,060,833	0.8
Total, fifteen largest shareholders	89,876,467	74.2
Total number of shares excluding treasury shares	121,120,918

Source: Modular Finance Holdings and Intrum

The company has between the 13 March 2020 to 15 April 2020 repurchased 9,829,402 shares in a buy-back programme. On the 2 June 2020, in accordance with the resolution by the Annual General Meeting, all shares were withdrawn, corresponding to 0.49 percent of the total number of shares and votes in the company. In the future, these 600,000 shares may be transferred to meet commitments under incentive programmes for company management. No dilution effect has been calculated for these shares.

	Comment by
Q3 in brief	the President and CEO

Segment overview

Financial reports

Other

Treasury holdings of 600,000 shares are not included in the number of shares outstanding. The proportion of Swedish ownership amounted to 33.3 percent (institutions 6.8 percentage points, mutual funds 16.4 percentage points and private individuals 10.1 percentage points).

Currency exchange rates

	Closing rate	Closing rate	Average rate	Snittkurs	Average rate	Average rate
	30 sep	30 sep	July–Sep	juli–sep	Jan–Sep	Jan–Sep
	2020	2019	2020	2019	2020	2019
1 EUR=SEK	10.57	10.72	10.35	10.67	10.57	10.23
1 CHF=SEK	9.78	9.87	9.62	9.75	9.88	8.82
1 NOK=SEK	0.95	1.08	0.97	1.08	0.99	1.07
1 HUF=SEK	0.0289	0.0320	0.0292	0.0325	0.0309	0.0322

Events after the balance sheet date

On 18 October 2020 the Board of Directors of Intrum AB appointed Anders Engdahl to the position of President and CEO. Michael Ladurner has been appointed acting Chief Financial Officer.

For further information, please contact

Anders Engdahl, President and CEO, tel: +46 8 546 102 02 Michael Ladurner, CFO, tel: +46 8 546 102 02 Viktor Lindeberg, Investor Relations, tel: +46 8 546 102 02

Michael Ladurner is the contact under the EU Market Abuse Regulation.

The information in this interim 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 23 October 2020 at 08.00 a.m. CET.

Year-end reports, interim reports and other financial information are available via www.intrum.com

Denna delårsrapport finns även på svenska.

Stockholm, 23 October 2020

Anders Engdahl VD och koncernchef

Segment overview

Review report

To the Board of Directors of Intrum AB (publ), corporate identity number 556607-7581.

Introduction

We have reviewed the summary financial information (interim report) for Intrum AB (publ) as per 30 September 2020 and for the nine-month period ending on that date. The Board of Directors and the CEO are responsible for the preparation and presentation of this interim financial information in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.

Focus and scope of the review

We conducted our review in accordance with the International Standard on Review Engagements ISRE 2410, Review of Interim Financial Information performed by the Company's elected auditor. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review has another focus and is substantially less in scope than an audit conducted in accordance with the ISA International Standards on Auditing and other generally accepted auditing practices.

The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the conclusion expressed based on a review does not give the same level of assurance as a conclusion expressed based on an audit.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying Interim Report is not prepared, in all material respects, for the Group in accordance with IAS 34 and the Annual Accounts Act and for the Parent Company in accordance with the Annual Accounts Act.

Stockholm, 23 October 2020 Ernst & Young AB

Jesper Nilsson Authorised Public Accountant

Definitions

Comment by the President and CEO

Result concepts, key figures and alternative indicators

Consolidated net revenues

Q3 in brief

Consolidated net revenues include external credit management earnings (variable collection commissions, fixed collection fees, debtor fees, guarantee commissions, subscription earnings, etc.), earnings from portfolio investments operations (collected amounts less amortisation and revaluations for the period) and other earnings 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 earnings statement.

Operating margin

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

Adjusted net revenues/revenues

Net revenue/revenues excluding portfolio revaluations and other items affecting comparability.

Adjusted operating earnings (EBIT)

Adjusted operating earnings (EBIT) is operating earnings excluding revaluations of portfolio investments and other items affecting comparability.

Adjusted operating margin

Adjusted operating earnings (EBIT) in relation to adjusted net revenue/revenue.

Cash revenue

An alternative performance indicator that includes net revenues and cashflow from gross collections and cash flow from joint ventures.

External revenue

Revenue from Intrum's external clients and revenue generated from Real Estate Owned assets (REO).

Internal revenue

Predominantly related to revenue paid by the Portfolio Investment segment to Credit Management Services and Strategic Markets segments for collection activities made on the behalf of Intrum's own portfolios.

EBITDA

EBITDA is defined as operating earnings (EBIT) adding back deprecation and amortisations of tangible and intangible assets.

Cash EBITDA

Cash EBITDA is adjusted operating earnings (EBIT) adding back depreciation and amortisations and portfolio amortisations. In addition, the EBIT contribution from joint ventures is replaced by the actual cash contribution from the joint venture. For rolling 12-month and full-year figures, pro forma adjustments are also added.

Items affecting comparability

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. These include portfolio revaluations, 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 expenses, 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 expenses for disputes and unusual agreements. Items affecting comparability are specified because they are difficult to predict and have low forecast values for the Group's future earnings trend.

Portfolio investments

The investments for the period in portfolios of overdue receivables, with and without collateral, investments in real estate and in joint ventures whose operations entail investing in portfolios of receivables and properties.

Portfolio investments – collected amounts, amortisations and revaluations

Portfolio investments consist of portfolios of delinquent consumer debts purchased at prices below the nominal receivable. These are recognised at amortised 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 amortisation for the period and revaluations. The amortisation 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.

Amortisation percentage

Amortisation on portfolio investments during the period, as a percentage of collections.

Return on portfolio investments (ROI)

Return on portfolio investments is the service line earnings for the period, excluding operations in factoring and payment guarantees (financial services), 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 segment's earnings in relation to the amount of capital tied up and is included in the Group's financial targets. The definition of average book value is based on using average values for the quarters.

Estimated remaining collections, ERC

The estimated remaining collections represent the nominal value of the expected future collection on the Group's portfolio investments, including Intrum's anticipated cash flows from investments in joint ventures.

Cashflow from joint ventures

The cashflow received by Intrum in form of distributions and dividends from investments in non-consolidated joint ventures.

Cash multiple

Estimated remaining collections (ERC) on all the Group's portfolio investments, as a share of the total book value amount.

Replenishment investment level

Replenishment investment level defined as keeping 12 month forward ERC divided by last 12 month MoM multiple (quarterly using 1/4 of full year).

Organic growth

Other

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.

Segment earnings

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

Operating margin, segment

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

Net debt

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

RTM

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

Pro forma adjustments

Businesses that have been acquired during the period are included on a pro forma basis during the entire twelve month period.

Net debt/Cash EBITDA

This key figure refers to net debt divided Cash 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. This key figure is calculated in accordance with the definitions stated in the terms of the Group's revolving syndicated loan facility, which means, among other things, that participations in non-consolidated joint ventures is only included to the extent that earnings are distributed to Intrum and that operations acquired during the period are included on a pro forma-basis throughout the 12-month period.

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.

Group overview

Financial reports

About Intrum

Comment by the President and CEO

Group overview

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 around 10,000 dedicated professionals who serve around 80,000 companies across Europe. In 2019, the company generated revenues of SEK 16.0 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.

Segment overview

Financial reports

Other

Business model

Q3 in brief

We ensure that companies are paid by offering two types of services. Credit Management-services focusing on late payments (that is, collection), as well as purchasing of portfolios of overdue receivables. Beyond this, we offer a full range of services covering companies' entire credit management chain.

Intrum as an investment

Growing market – The market for our services is growing. With digitisation, credit sales are increasing, the market is being consolidated and new types of receivables are being sold as companies and banks seek to focus more on their core operations.

Market-leading position – Intrum is the industry leader in Europe, with a presence in 24 countries. We also have partners in another 160 countries. Our size allows us to partner with clients across several markets. Our broad knowledge spans multiple industries and we have opportunities to invest in new technologies and innovative solutions.

A complete range – Intrum offers a complete range of credit management services, covering companies' complete credit management chains.

Considerable trust and 100 years of experience – Our work can only be performed if we have our clients' complete trust and conduct our operations ethically and with respect for the end-customer. Our 100 years of experience demonstrate the strength of our business model and our view of business. We build long-term partnerships with our clients.

Intrum leads the way towards a sound economy – A functioning credit market is a prerequisite for the business community, and consequently for society as a whole, to perform properly. Intrum plays an important role in this context.

Financial calendar 2020

23 October 2020, Interim report for the third quarter

18 November 2020, Capital Markets Day

28 January 2021, Year end report 2020

29 april 2021, Interim report for the first quarter

29 april 2021, Annual General Meeting

Intrum AB (publ) Sicklastråket 4, Nacka 105 24 Stockholm, Sweden Tel +46 8 546 10 200 Fax +46 8 546 10 211 www.intrum.com info@intrum.com