Interim report
Third quarter 2023 highlights
- Seasonally slow Q3 in transitory 2023
- Income increased 9% vs. Q3'22 and 5% vs. YTD 22 driven by both Servicing and Investing segments
- Adjusted EBIT reduced by 13% vs. Q3'22 and 18% vs. YTD'22 driven by cost growth in excess of income
- EBIT for the YTD, which includes a provision of SEK 583 M in respect of costs to execute the cost saving program, increased by 108% vs. YTD'22 due to the impact of the JV write down in YTD'22
- Leverage ratio decreased 0.2x to 4.4x in the quarter driven by favourable FX movements and recent acquisition in Spain
- Delivered on several strategic priorities during the quarter: completed the divestment of Estonia and Latvia and the acqui- sition of Haya Real Estate in Spain and e-collect in Switzerland. Also, completed the acquisition of Ophelos Ltd in the UK on 17 October 2023
- The third quarter report has been updated to provide increased transparency and clarity. Full details of these GAAP and non- GAAP changes are provided on page 18 and 23 of this report
Third quarter, 2023 | Third quarter | 9 months | 12 months | Full year | ||||
Rolling | ||||||||
July-Sep | July-Sep | Change | Jan-Sep | Jan-Sep | Change | |||
SEK M, unless otherwise indicated | 2023 | 2022 | % | 2023 | 2022 | % | 2023 | 2022 |
Unadjusted Accounting Metrics | ||||||||
Income | 4,959 | 4,530 | 9 | 14,460 | 13,826 | 5 | 20,002 | 19,368 |
EBITDA | 884 | -831 | 206 | 3,753 | 2,792 | 34 | 3,153 | 2,192 |
EBIT | 509 | -1,576 | 132 | 2,719 | 1,307 | 108 | 1,566 | 154 |
Net Income/(Loss) attributable to parent company's | -411 | -2,055 | 80 | -375 | -839 | -55 | -4,008 | -4,473 |
shareholders | ||||||||
Earnings/(Loss) Per Share, SEK | -3.41 | -17.05 | 80 | -3.11 | -6.95 | -55 | -33.23 | -37.07 |
Adjusted Accounting Metrics | ||||||||
Adjusted Income | 4,959 | 4,530 | 9 | 14,460 | 13,826 | 5 | 19,594 | 18,960 |
Adjusted EBITDA | 1,727 | 1,924 | -10 | 4,922 | 5,824 | -15 | 7,215 | 8,117 |
Adjusted EBIT | 1,353 | 1,564 | -13 | 3,888 | 4,736 | -18 | 5,816 | 6,664 |
Adjusted Net Income/(Loss) attributable to parent company's | 222 | 760 | -71 | 769 | 2,165 | -64 | 438 | 1,834 |
shareholders | ||||||||
Adjusted Earnings/(Loss) Per Share, SEK | 1.84 | 6.31 | -71 | 6.38 | 17.93 | -64 | 3.66 | 15.21 |
Adjusted Cash Metrics | ||||||||
Cash Income | 6,336 | 5,736 | 10 | 18,420 | 17,594 | 5 | 25,106 | 24,280 |
Cash EBITDA | 3,160 | 3,009 | 5 | 9,124 | 9,452 | -3 | 12,910 | 13,238 |
Investing Segment: Capex Deployed | 530 | 1,335 | -60 | 4,977 | 6,260 | -20 | 6,255 | 7,538 |
Cash EBITDA (proforma) | 13,239 | |||||||
Net Debt before Other Obligations/RTM cash EBITDA | - | - | - | - | - | 4.4x | 4.1x | |
(proforma), x | ||||||||
Q3 in brief Comment by the President and CEOKey financial metrics Segment overview Financial overview Financial reports Other information Definitions About Intrum | Intrum Interim report, third quarter 2023 2 |
Continued high commercial activity in a seasonally slower quarter
Operational excellence, client focus and capital light
In September at our Capital Markets Day, we presented our strategic priorities for the coming three years underpinned by three pillars. First, operational excellence: technology and automation will permeate our operating model to create an efficient and scalable operating platform while improving our collections capabil- ity. Second, client focus: emphasising profitable growth through client centricity. Third, capital light: extract cash from our back- book and pivot to a capital-light business model.
In our continuous effort to build a stronger and tech-driven fran- chise, we also announced the acquisition of Ophelos and eCol- lect, two companies set to accelerate our tech-transition. With these additions, we will advance our client value proposition while becoming more efficient by leveraging Ophelos - the only tech-powered autonomous debt resolution platform in Europe. Tech-driven decisions do not only allow us to be more profitable and relevant to our clients and customers but also drive other key benefits. For example, in Denmark, we transitioned from sending customers ~3 M physical letters annually to now sending more than 80 percent in digital form. Since August, when this program was initiated, we have not only increased our customer response rate by more than 700 percent, but we will also eliminate the emission of 61 tons of CO2 annually. This clearly shows that all stakeholders and our society as a whole benefit by driving technology within Intrum.
I also want to repeat and emphasise that our top near-term priority is to reduce our leverage and cost base. This quarter, we have lowered our proprietary investments, reduced operating costs and we are progressing on our plan to potentially exit selected Tactical markets and part of our back book. All cash flows from these tactical measures will repay debt and de-risk our platform.
In the third quarter, Income was SEK 4,959 M (4,530), translating to an increase of 9 per cent. Servicing Income amounted to SEK 3,441 M (3,103), while Investing Income stood at SEK 2,173 M (2,083). Cash EBITDA for the group was SEK 3,160 M (3,009), up 5 per cent. Adjusted EBIT decreased 13% to SEK 1,353 M (1,564) for the quarter and reduced 18% to SEK 3,888 M (4,736) for YTD due to increased costs in excess of increased income.
Direct and Indirect Costs totalled SEK 4,436 M for the quarter and SEK 11,767 M for the YTD. This includes SEK 791 M and SEK 1,110 M respectively of Items Affecting Comparability predominantly relating to the cost saving program and IT transformation (see page 10). Underlying costs, excluding these Items Affecting Comparability, have increased 15% to SEK 3,647 M (3,161) and 12% to SEK 10,657 M (9,503) for the quarter and the year, respec- tively, with currency movements contributing 10% for the quarter compared to Q3 '22 and 8% YTD. The cost program launched during the first quarter is principally focused on non-production elements which constitute approximately half of the above mentioned adjusted cost base.
Acceleration commercial success
On the commercial side, during the quarter we signed a transformational contract with Buildingcenter in Spain and a meaningful increased mandate with Virgin Money in the UK. We have also been awarded a large contract with Sykehusinnkjøp (hospitals) in Norway where the key reason for our selection was the quality of our service rather than the price of our offer. These efforts to drive the commercial development of the company are visible in our total annual contract value (ACV) signings. At the end of Sep- tember, the ACV signings in 2023 amounted to SEK 1.1 bn (690 M). During the third quarter alone, the ACV signings, excluding the
"I also want to repeat and emphasise that our top near-term priority is to reduce our leverage and cost base"
Q3 in brief Comment by the President and CEOKey financial metrics Segment overview Financial overview Financial reports Other information Definitions About Intrum | Intrum Interim report, third quarter 2023 3 |
transformational contract with Buildingcenter, reached SEK 261 M with a win rate greater than 55 per cent.
Progress on cost program, cash extraction and leverage
By the end of the quarter, we have already achieved run rate cost savings of SEK ~350 M, mainly from redundancies which will gradually come into the results over the coming quarters. Given progress during the third quarter, we have taken a provision for costs to achieve of SEK ~ 580 M. The progress to date and our high ambition level make me comfortable with the previously communicated target of more than SEK 800 M with the majority to be achieved on a run-rate basis by end of 2023.
Our near term ambition to extract value from our Investing business delivered a cash EBITDA of SEK 2.8 bn, with SEK 531 M reinvested in portfolios in the quarter. The investments were made at an average unlevered IRR of 18 per cent (15). The leverage ratio Net debt before other obligations/RTM Cash EBITDA currently stands at 4.4x. The leverage reduction, compared to Q2 '23, is mainly driven by including the RTM results of Haya. In addi- tion, we had favourable FX movements in the quarter.
Reducing disposable income and extended payment terms Surging inflation and higher borrowing costs continue to be a problem for European household finances. As their real earnings stagnate or even decline, consumers will have to make difficult choices. In our own data, we see around half of consumers breaking even on their finances each month, while 24 per cent are overspending - and the average over-spender is exceeding their budget by EUR 232.
In September, the European Commission presented the "SME Relief Package", with the overarching ambition to empower SMEs across Europe. The European Commission highlights that late payments are causing severe liquidity issues for companies across Europe - in extreme cases directly leading to the compa- ny's bankruptcy. This is congruent with our '23 European Payment Report showed that 66 per cent of the respondents have been asked to accept longer payment terms. These numbers are worrisome, shedding light on the importance of not only address- ing, but acting on Europe's late payment problem now, but also supporting consumers as disposable income is being squeezed. We will closely monitor the developments, on the presented regulation and continue to maintain an active dialogue with regulators and support individuals to become debt free with Intrum.
The first small steps on a long journey
We have taken some important steps in improving and strengthening Intrum, and I am confident that we are on the right track. The journey we presented during the Capital Markets Day has only just begun. Step by step, we will execute on the realisation of Intrum's full potential over the coming years. In the meantime, we will concurrently focus on delivering on our near-term tactical measures.
Stockholm, October 2023
Andrés Rubio
President & CEO
"We have taken some important steps in improving and strengthening Intrum, and I am confident that we are on the right track"
Q3 in brief Comment by the President and CEO Key financial metricsSegment overview Financial overview Financial reports Other information Definitions About Intrum | Intrum Interim report, third quarter 2023 4 |
Key financial metrics
Quarterly development
Adjusted EBIT decreased 13% to SEK 1,353 M (1,564) for the quarter and reduced 18% to SEK 3,888 M (4,736) for YTD due to increased costs in excess of increased income. Direct and Indirect Costs totalled SEK 4,436 M for the quarter and SEK 11,767 M for the YTD. This includes SEK 791 M and SEK 1,110 M respectively of Items Affecting Comparability predominantly relating to the cost saving program and IT transformation (see page 10). Underlying costs, excluding these Items Affecting Comparability, have increased 15% to SEK 3,647 M (3,161) and 12% to SEK 10,657
M (9,503) for the quarter and the year respectively with fx movements contributing 10% for the quarter (8% for the YTD). The cost saving program, which to date has identified savings > SEK 0.8 bn, will focus on the c.50% of adjusted costs that are not directly driving income and will be visible in our 2024 results.
In Servicing, new case inflows and assets under management continue to grow with exceptional new ACV signings of SEK 594 M (164) in the quarter, an all-time high for the segment. External Servicing Income for the quarter has benefited from increased inflows, rising to SEK 2,785 M (2,447) and reaching SEK 10,957
M on a rolling 12 month basis. However, Servicing Adjusted Margin for the quarter reduced to 12% (18) driven by cost growth in excess of income. Portfolio Investments performance for the quarter was in line with expectations at 100% of active forecast with an Adjusted ROI of 14% (14).
The leverage ratio reduced to 4.4x compared to the previous quarter driven by favourable FX movements and recent acqui- sitions. In Q3'23, Income and Adjusted Income for the quarter increased to SEK 4,959 M (4,530), EBIT increased to SEK 509 M (-1,576) and Adjusted EBIT decreased to SEK 1,353 M (1,564).
Balance | |||
Growth | sheet intensity | ||
~10% | EBIT margin | SEK | Leverage |
CAGR | >25% | ~30 bn | 3.5x |
Total adjusted | Leverage ratio by | ||
External servicing | servicing margin | Proprietary investing | end of 2025 |
Income growth | book value excl. | ||
revaluations | |||
External Servicing Adjusted Income | |||
Growth, RTM bn | Servicing Adjusted EBIT Margin, RTM | Investing BV excl. Revaluations, Quarter End | Leverage Ratio, RTM |
10.6 | 10.5 | 10.4 | 10.6 | 11.0 |
CAGR: 13% | ||||
CMD | Q 4 | Q 1 | Q2 | Q 3 |
Sep'23 | 2022 | 2023 | 2023 | 2023 |
21 | ||||
18 | 19 | 18 | ||
17 | ||||
CMD | Q 4 | Q 1 | Q2 | Q 3 |
Sep'23 | 2022 | 2023 | 2023 | 2023 |
41 | 38 | 41 | 39 | |
37 | ||||
CMD | Q 4 | Q 1 | Q2 | Q 3 |
Sep'23 | 2022 | 2023 | 2023 | 2023 |
4.6x | 4.6x | 4.4x | ||
4.3x | ||||
4.1x | ||||
CMD | Q 4 | Q 1 | Q2 | Q 3 |
Sep'23 | 2022 | 2023 | 2023 | 2023 |
Q3 in brief Comment by the President and CEO Key financial metrics Segment overviewFinancial overview Financial reports Other information Definitions About IntrumIntrum Interim report, third quarter 2023 5
Segment overview
Key figures, 2023
Third quarter, July-Sep 2023 | 9 months, Jan-Sep 2023 | |||||||||
SEK M | Servicing | Investing | Central | Eliminations | Consolidated | Servicing | Investing | Central | Eliminations | Consolidated |
External Income | 2,785 | 2,173 | 1 | - | 4,959 | 8,028 | 6,431 | 2 | - | 14,460 |
Internal Income | 656 | - | 66 | -722 | - | 2,016 | - | 139 | -2,155 | - |
Income1 | 3,441 | 2,173 | 67 | -722 | 4,959 | 10,044 | 6,431 | 141 | -2,155 | 14,460 |
Items Affecting Comparability in Income3 | - | - | - | - | - | - | - | - | - | - |
Adjusted Income | 3,441 | 2,173 | 67 | -722 | 4,959 | 10,044 | 6,431 | 141 | -2,155 | 14,460 |
Direct Costs | -2,252 | -833 | -37 | 695 | -2,427 | -6,509 | -2,461 | -181 | 2,129 | -7,022 |
Indirect Costs | -893 | -59 | -1,084 | 27 | -2,009 | -2,557 | -290 | -1,925 | 27 | -4,745 |
Share of Associates and Joint Ventures | 2 | -27 | - | - | -25 | 13 | 6 | - | - | 19 |
Net Credit Gains / (Losses) | - | 12 | - | - | 12 | - | 7 | - | - | 7 |
EBIT2 | 298 | 1,266 | -1,054 | - | 509 | 991 | 3,693 | -1,965 | - | 2,719 |
Items Affecting Comparability in EBIT3 | 118 | 73 | 653 | - | 844 | 306 | 165 | 698 | - | 1,169 |
Adjusted EBIT | 416 | 1,339 | -401 | - | 1,353 | 1,297 | 3,858 | -1,267 | - | 3,888 |
Cash Income | 3,441 | 3,551 | 66 | -722 | 6,336 | 10,044 | 10,390 | 141 | -2,155 | 18,420 |
Cash EBITDA | 742 | 2,775 | -356 | - | 3,160 | 2,175 | 8,079 | -1,130 | - | 9,124 |
Adjusted Income | 3,441 | 2,173 | 67 | -722 | 4,959 | 10,044 | 6,431 | 141 | -2,155 | 14,460 |
- thereof Northern Europe | 688 | 449 | - | -103 | 1,035 | 2,074 | 1,294 | - | -295 | 3,073 |
- thereof Middle Europe | 952 | 648 | - | -229 | 1,372 | 2,569 | 1,857 | - | -739 | 3,687 |
- thereof Southern Europe | 1,616 | 583 | - | -180 | 2,019 | 4,829 | 1,840 | - | -535 | 6,134 |
- thereof Tactical Markets | 185 | 492 | - | -145 | 532 | 572 | 1,439 | - | -447 | 1,565 |
- thereof Central | - | - | 67 | -66 | 1 | - | - | 141 | -139 | 2 |
Adjusted EBIT | 416 | 1,339 | -401 | - | 1,353 | 1,297 | 3,858 | -1,267 | - | 3,888 |
- thereof Northern Europe | 66 | 324 | - | - | 390 | 170 | 922 | - | - | 1,092 |
- thereof Middle Europe | 55 | 341 | - | - | 396 | 121 | 969 | - | - | 1,091 |
- thereof Southern Europe | 322 | 384 | - | - | 706 | 1,098 | 1,188 | - | - | 2,286 |
- thereof Tactical Markets | -28 | 292 | - | - | 264 | -92 | 778 | - | - | 686 |
- thereof Central | - | - | -401 | - | -401 | - | - | -1,267 | - | -1,267 |
- Income of SEK 4,959 M for Q3'23 and SEK 14,460 M for the 9 month period ended 30 September 2023 includes SEK 80 M and SEK 131 M related to the discontinued operations for Q3'23 and the 9 month period ended 30 September 2023, respectively.
- EBIT of SEK 509 M for Q3'23 and SEK 2,719 M for the 9 month period ended 30 September 2023 includes SEK 12 M and SEK 10 M related to the discontinued operations for Q3'23 and the 9 month period ended 30 September 2023, respectively.
- Refer to page 10 for details on Items Affecting Comparability
Q3 in brief Comment by the President and CEO Key financial metrics Segment overviewFinancial overview Financial reports Other information Definitions About IntrumIntrum Interim report, third quarter 2023 6
Key figures, 2022
Third quarter, July-Sep 2022 | 9 months, Jan-Sep 2022 | |||||||||
SEK M | Servicing | Investing | Central | Eliminations | Consolidated | Servicing | Investing | Central | Eliminations | Consolidated |
External Income | 2,447 | 2,083 | - | - | 4,530 | 7,495 | 6,331 | - | - | 13,826 |
Internal Income | 656 | - | 29 | -685 | - | 1,962 | - | 75 | -2,037 | - |
Income1 | 3,103 | 2,083 | 29 | -685 | 4,530 | 9,457 | 6,331 | 75 | -2,037 | 13,826 |
Items Affecting Comparability in Income | - | - | - | - | - | - | - | - | - | - |
Adjusted Income | 3,103 | 2,083 | 29 | -685 | 4,530 | 9,457 | 6,331 | 75 | -2,037 | 13,826 |
Direct Costs | -2,319 | -780 | -12 | 685 | -2,426 | -6,280 | -2,411 | -48 | 2,037 | -6,702 |
Indirect Costs | -737 | -80 | -434 | - | -1,251 | -2,134 | -383 | -1,147 | -3,664 | |
Share of Associates and Joint Ventures | 15 | -2,482 | - | - | -2,467 | 14 | -2,267* | - | - | -2,253 |
Net Credit Gains / (Losses) | - | 40 | - | - | 40 | - | 101 | - | - | 101 |
EBIT2 | 62 | -1,220 | -418 | - | -1,576 | 1,057 | 1,371 | -1,121 | - | 1,307 |
Items Affecting Comparability in EBIT | 496 | 2,564 | 80 | - | 3,140 | 702 | 2646 | 80 | 3,428 | |
Adjusted EBIT | 558 | 1,344 | -338 | - | 1,564 | 1,759 | 4,017 | -1,040 | - | 4,736 |
Cash Income | 3,103 | 3,289 | 29 | -685 | 5,736 | 9,456 | 10,100 | 75 | -2,037 | 17,594 |
Cash EBITDA | 853 | 2,446 | -289 | 3,009 | 2,698 | 7,669 | -915 | 9,452 | ||
Adjusted Income | 3,103 | 2,083 | 29 | -685 | 4,530 | 9,457 | 6,331 | 75 | -2,037 | 13,826 |
- thereof Northern Europe | 669 | 481 | - | -112 | 1,038 | 1,975 | 1,401 | - | -325 | 3,051 |
- thereof Middle Europe | 701 | 641 | - | -266 | 1,076 | 2,080 | 1,914 | - | -761 | 3,233 |
- thereof Southern Europe | 1,568 | 527 | - | -140 | 1,955 | 4,874 | 1,669 | - | -429 | 6,114 |
- thereof Tactical Markets | 164 | 434 | - | -137 | 461 | 527 | 1,347 | - | -446 | 1,428 |
- thereof Central | - | - | 29 | -29 | - | - | - | 75 | -75 | - |
Adjusted EBIT | 558 | 1,344 | -338 | - | 1,564 | 1,759 | 4,017 | -1,040 | - | 4,736 |
- thereof Northern Europe | 152 | 347 | - | - | 499 | 354 | 1,003 | - | - | 1,358 |
- thereof Middle Europe | 41 | 265 | - | - | 306 | 180 | 990 | - | - | 1,170 |
- thereof Southern Europe | 426 | 488 | - | - | 914 | 1,409 | 1,337 | - | - | 2,746 |
- thereof Tactical Markets | -61 | 244 | - | - | 183 | -185 | 687 | - | - | 502 |
- thereof Central | - | - | -338 | - | -338 | - | - | -1,040 | - | -1,040 |
- Income of SEK 4,530 M for Q3'22 and SEK 13,826 M for the 9 month period ended 30 September 2022 includes SEK 103 M and SEK 180 M related to the discontinued operations for Q3'22 and the 9 month period ended 30 September 2022, respectively.
- EBIT of SEK -1,576 M for Q3'22 and SEK 1,307 M for the 9 month period ended 30 September, 2022 includes SEK 44 M and SEK 72 M related to the discontinued operations for Q3'22 and the 9 month period ended 30 September 2022, respectively.
Q3 in brief Comment by the President and CEO Key financial metrics Segment overviewFinancial overview Financial reports Other information Definitions About Intrum | Intrum Interim report, third quarter 2023 7 |
Servicing
Credit management with a focus on late payments and collections.
Third quarter | 9 months | Full year | |||||
July-Sep | July-Sep | Change | Jan-Sep | Jan-Sep | Change | ||
SEK M | 2023 | 2022 | % | 2023 | 2022 | % | 2022 |
External Income | 2,785 | 2,447 | 14 | 8,028 | 7,495 | 7 | 10,424 |
Internal Income | 656 | 656 | 0 | 2,016 | 1,962 | 3 | 2,664 |
Income | 3,441 | 3,103 | 11 | 10,044 | 9,457 | 6 | 13,088 |
Items Affecting Comparability in Income | - | - | - | - | - | - | - |
Adjusted Income | 3,441 | 3,103 | 11 | 10,044 | 9,457 | 6 | 13,088 |
Direct Costs | -2,252 | -2,319 | -3 | -6,509 | -6,280 | 4 | -8,543 |
Indirect Costs | -893 | -737 | 19 | -2,557 | -2,134 | 19 | -2,900 |
Share of Associates and Joint Ventures | 2 | 15 | -87 | 13 | 14 | -7 | 24 |
Other Operating Items | - | - | - | - | - | ||
EBIT | 298 | 62 | 381 | 991 | 1,057 | -5 | 1,669 |
Items Affecting Comparability in EBIT | 118 | 496 | -76 | 306 | 702 | -56 | 1,065 |
Adjusted EBIT | 416 | 558 | -25 | 1,297 | 1,759 | -26 | 2,734 |
Cash Income | 3,441 | 3,103 | 11 | 10,044 | 9,456 | 6 | 13,087 |
Cash EBITDA | 742 | 853 | -12 | 2,175 | 2,698 | -25 | 4,037 |
KPIs | |||||||
Change in Adjusted Income, % | 14 | 14 | 7 | 9 | 7 | ||
- thereof organic growth | -6 | 9 | -4 | 5 | 2 | ||
- thereof acquisitions | 10 | - | 4 | - | - | ||
- thereof foreign exchange | 10 | 5 | 7 | 4 | 5 | ||
Adjusted EBIT Margin | 12 | 18 | -6ppt | 13 | 19 | -6ppt | 21 |
Capex Deployed | -43 | -33 | 30 | -117 | -76 | 54 | -146 |
Cash Income, 9 months
Northern Europe: 2,074
Middle Europe: 2,569
Southern Europe: 4,829
Tactical markets: 572
Cash EBITDA, 9 months
Northern Europe: 244
Middle Europe: 193
Southern Europe: 1,796
Tactical markets: -57
In the third quarter, the strong commercial performance contin- ued, with new signings of SEK 594 M (164) in ACV. In total, new signings are at SEK 1.1 bn for the first 9 months of the year, an increase of 60% compared to 2022. We continue seeing a positive development also in terms of higher margins in new signings compared to existing stock.
In total, the Adjusted Income for Servicing was at SEK 3,441 M (3,103) in the quarter, up by 11% compared to Q3 22. The External Income was at SEK 2,785 (2,447), up by 14%. Adjusted EBIT decreased by 23% to SEK 416 M (558), while Cash EBITDA decreased by 12% to SEK 742 M (853).
The decrease in Adjusted EBIT and Cash EBITDA is due to increased cost to collect and also higher Indirect Costs. The cost programme announced in Q1 23 has been launched and effects are starting to materialise, though not visible in financials yet.
Q3 in brief Comment by the President and CEO Key financial metrics Segment overviewFinancial overview Financial reports Other information Definitions About Intrum | Intrum Interim report, third quarter 2023 8 |
Investing
Intrum invests in portfolios of overdue receivables and similar claims, after which Intrum's servicing operations collect on the claims acquired.
Third quarter | 9 months | Full year | |||||
July-Sep | July-Sep | Change | Jan-Sep | Jan-Sep | Change | ||
SEK M | 2023 | 2022 | % | 2023 | 2022 | % | 2022 |
Income | 2,173 | 2,083 | 4 | 6,431 | 6,331 | 2 | 8,944 |
Items Affecting Comparability in Income | - | - | - | - | - | -408 | |
Adjusted Income | 2,173 | 2,083 | 4 | 6,431 | 6,331 | 2 | 8,536 |
- thereof REOs | 34 | 35 | -3 | 92 | 127 | -28 | 192 |
-thereof Other Income | 5 | 73 | -93 | 20 | 197 | -90 | 103 |
Direct Costs | -833 | -780 | 7 | -2,461 | -2,411 | 2 | -3,246 |
Indirect Costs | -59 | -80 | -27 | -290 | -383 | -17 | -528 |
Share of Associates and Joint Ventures | -27 | -2,482 | -99 | 6 | -2,267 | -100 | -5,246 |
Other Operating Items | - | - | - | - | - | - | |
Net Credit Gains / (Losses) | 12 | 40 | -70 | 7 | 101 | -93 | 117 |
EBIT | 1,266 | -1,220 | 204 | 3,693 | 1,371 | 167 | 42 |
Items Affecting Comparability in EBIT | 73 | 2,564 | -97 | 165 | 2,646 | -94 | 5,333 |
Adjusted EBIT | 1,339 | 1,344 | -0 | 3,858 | 4,017 | -5 | 5,374 |
- thereof REOs | -5 | 6 | -183 | 5 | 15 | -67 | 32 |
-thereof Other ncome | 1 | 200 | -100 | 3 | 486 | -99 | 622 |
Cash Income | 3,551 | 3,289 | 8 | 10,390 | 10,100 | 3 | 13,857 |
Cash EBITDA | 2,775 | 2,446 | 13 | 8,079 | 7,669 | 5 | 10,528 |
KPIs | |||||||
Internal Gross Collections | 3,497 | 3,170 | 10 | 10,261 | 9,774 | 5 | 13,426 |
Amortisation % | 39 | 38 | 1ppt | 39 | 39 | 0ppt | 40 |
Capex Deployed | 530 | 1,335 | -60 | 4,977 | 6,260 | -20 | 7,538 |
ERC | 81,522 | 82,832 | -2 | 81,522 | 82,832 | -2 | 77,634 |
Collection Index vs. Active Forecast | 100 | 105 | -5 | 101 | 110 | -8 | 117 |
Book Value | 38,785 | 39,693 | -2 | 38,785 | 39,693 | -2 | 37,109 |
Adjusted Return on Portfolio Investments % | 14 | 14 | 0ppt | 13 | 13 | 0ppt | 14 |
Cash Income, 9 months
Northern Europe: 2,204
Middle Europe: 3,320
Southern Europe: 2,708
Tactical markets: 2,158
Cash EBITDA, 9 months
Northern Europe: 1,833
Middle Europe: 2,433
Southern Europe: 2,314
Tactical markets: 1,498
Despite the challenging macro environment, collection performance for the quarter came in at 100 % of active forecast with an Adjusted ROI of 14 % (14). The Q3 performance is seasonally weaker but still landed in line with forecast. We also completed the divestment of our platforms in Estonia and Latvia.
During the quarter, we invested SEK 530 M (1,335) in new portfolios with a net IRR of 18 % (15 %). The investment levels are aligned with our updated reduced investment appetite. The real-
ised investments are predominantly forward flow commitments across our markets. Cash Income came in at SEK 3,551 M (3,289), an increase compared to the same quarter last year. Cash EBITDA for the segment was SEK 2,775 M (2,446) and Adjusted EBIT was SEK 1,339 M (1,344), up 13 % and flat, respectively, compared to the same quarter last year.
Our Book Value decreased to SEK 38.8 bn from SEK 41.0 bn last quarter, aligned with the overall strategy.
Q3 in brief Comment by the President and CEO Key financial metrics Segment overview Financial overviewFinancial reports Other information Definitions About IntrumIntrum Interim report, third quarter 2023 9
Financial overview
Adjusted P&L
Third quarter | 9 months | Rolling 12 months | Full year | ||||||
July-Sep | July-Sep | Jan-Sep | Jan-Sep | Oct 2022- | |||||
SEK M | 2023 | 2022 | 2023 | 2022 | Sep 2023 | 2022 | 2021 | 2020 | 2019 |
Adjusted Income | 4,959 | 4,530 | 14,460 | 13,826 | 19,594 | 18,960 | 17,655 | 16,730 | 15,779 |
Adjusted Direct Costs | -2,341 | -2,015 | -6,862 | -6,204 | -8,975 | -8,317 | -7,910 | -7,908 | -7,674 |
- thereof personnel | -1287 | -979 | -3,694 | -3,022 | -4,758 | -4,086 | -3,968 | -3,923 | -3,615 |
- thereof non-personnel | -1054 | -1,037 | -3,168 | -3,182 | -4,217 | -4,231 | -3,942 | -3,985 | -4,059 |
Adjusted Indirect Costs | -1,306 | -1,146 | -3,795 | -3,299 | -5,020 | -4,524 | -3,312 | -3,389 | -3,076 |
- thereof personnel | -615 | -526 | -1,818 | -1,495 | -2,420 | -2,097 | -1,617 | -1,511 | -1,601 |
- thereof non-personnel | -691 | -620 | -1,977 | -1,804 | -2,600 | -2,427 | -1,695 | -1,878 | -1,475 |
Adjusted Share of Associates and Joint Ventures | 40 | 195 | 85 | 413 | 217 | 545 | 581 | 306 | 1,179 |
Adjusted EBIT | 1,353 | 1,564 | 3,888 | 4,736 | 5,816 | 6,664 | 7,014 | 5,739 | 6,208 |
Adjusted D&A | 375 | 360 | 1,034 | 1,088 | 1,399 | 1,453 | 1,318 | 1,529 | 1,246 |
Adjusted EBITDA | 1,727 | 1,924 | 4,922 | 5,824 | 7,215 | 8,117 | 8,332 | 7,268 | 7,454 |
Adjusted Financial Items | -1,004 | -497 | -2,655 | -1,643 | -3,421 | -2,409 | -2,174 | -2,062 | -1,921 |
Adjusted Tax | -68 | -85 | -292 | -467 | -954 | -1,129 | -910 | -555 | -424 |
Adjusted Consolidated Earnings | 281 | 982 | 941 | 2,626 | 1,441 | 3,126 | 3,930 | 3,122 | 3,863 |
Adjusted Consolidated Earnings attributable to | 222 | 760 | 769 | 2,165 | 438 | 1,835 | 3,487 | 2,689 | 2,797 |
parent company's shareholders | |||||||||
Average number of shares outstanding | 121 | 121 | 121 | 121 | 121 | 121 | 121 | 124 | 131 |
Adjusted EPS, SEK | 1.84 | 6.31 | 6.38 | 17.93 | 3.66 | 15.21 | 28.86 | 21.70 | 21.34 |
Adjusted EBITDA | 1,727 | 1,924 | 4,922 | 5,824 | 7,215 | 8,117 | 8,332 | 7,268 | 7,454 |
Amortisation of Portfolio Investments | 1,378 | 1,206 | 3,959 | 3,768 | 5,511 | 5,320 | 4,311 | 4,308 | 4,183 |
Income from Associates and Joint Ventures | -40 | -195 | -85 | -413 | -217 | -545 | -581 | -306 | -1,179 |
Cash from Associates and Joint Ventures | 95 | 75 | 328 | 274 | 401 | 347 | 248 | 338 | 197 |
Cash EBITDA | 3,160 | 3,009 | 9,124 | 9,453 | 12,910 | 13,238 | 12,310 | 11,608 | 10,655 |
Proforma adjustments | 330 | ||||||||
Cash EBITDA (proforma) | 13,239 |
Net Debt Reconciliation
Third quarter | 9 months | Rolling 12 months | Full year | ||||||
July-Sep | July-Sep | Jan-Sep | Jan-Sep | Oct 2022- | |||||
SEK M | 2023 | 2022 | 2023 | 2022 | Sep 2023 | 2022 | 2021 | 2020 | 2019 |
Borrowings | 61,007 | 56,662 | 61,007 | 56,662 | 61,007 | 56,519 | 52,501 | 48,703 | 50,625 |
Lease Liability | 718 | 742 | 718 | 742 | 718 | 712 | 805 | 871 | 917 |
Deferred Liabilities | 346 | 374 | 346 | 374 | 346 | 384 | 406 | 1,073 | 926 |
Gross Debt | 62,071 | 57,778 | 62,071 | 57,778 | 62,071 | 57,615 | 53,713 | 50,647 | 52,468 |
Cash and Cash Equivalents | -3,465 | -4,541 | -3,465 | -4,541 | -3,465 | -3,474 | -4,553 | -2,134 | -1,906 |
Net Debt before Other Obligations | 58,606 | 53,237 | 58,606 | 53,237 | 58,606 | 54,141 | 49,160 | 48,513 | 50,562 |
Net Defined Benefit Liability | 144 | 367 | 144 | 367 | 144 | 141 | 329 | 381 | 387 |
Payable to Non-controlling Interest | 123 | 401 | 123 | 401 | 123 | 397 | 430 | - | - |
Net Debt after Other Obligations | 58,873 | 54,004 | 58,873 | 54,004 | 58,873 | 54,678 | 49,919 | 48,894 | 50,949 |
Net Debt before Other Obligations/RTM cash EBITDA | 4.4 | 4.1 | 4.0 | 4.2 | 4.7 | ||||
(proforma) |
Q3 in brief Comment by the President and CEO Key financial metrics Segment overview Financial overviewFinancial reports Other information Definitions About IntrumIntrum Interim report, third quarter 2023 10
Reconciliation
Third quarter | 9 months | Rolling 12 months | Full year | |||
July-Sep | July-Sep | Jan-Sep | Jan-Sep | |||
SEK M | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 |
INCOME RECONCILIATION | ||||||
Income | 4,959 | 4,530 | 14,460 | 13,826 | 20,002 | 19,368 |
IACs in Income | - | - | - | - | -408 | |
Adjusted Income | 4,959 | 4,530 | 14,460 | 13,826 | 19,594 | 18,960 |
Portfolio Amortisation | 1,378 | 1,206 | 3,959 | 3,768 | 5,511 | 5,320 |
Cash Income | 6,338 | 5,736 | 18,420 | 17,594 | 25,106 | 24,280 |
EBITDA RECONCILIATION | ||||||
EBIT | 509 | -1,576 | 2,719 | 1,307 | 1,566 | 154 |
Depreciation and Amortisation | 367 | 745 | 1,010 | 1,485 | 1,563 | 2,038 |
EBITDA | 876 | -831 | 3,729 | 2,792 | 3,129 | 2,192 |
IAC - NCIs | ||||||
Impairments / (Reversals) | 71 | 2,662 | 80 | 2,666 | 3,182 | 5,768 |
Net Credit Gains/(Losses) | -11 | -39 | -7 | -101 | -23 | -117 |
- thereof Portfolio Investment Gains | -461 | -571 | -1,059 | -1,250 | -1,604 | -1,795 |
- thereof Portfolio Investment Losses | 450 | 532 | 1,051 | 1,149 | 1,581 | 1,678 |
IAC - Restructuring | ||||||
IT Transformational Costs | 74 | 113 | 243 | 352 | 403 | 512 |
Merger & Acquisition | 20 | - | 31 | - | 42 | 11 |
Group Restructuring | 681 | - | 721 | 3 | 136 | -583 |
- therof cost saving provision | 583 | - | 583 | - | 583 | - |
IAC - NRIs | ||||||
Hungarian Tax Effects | 13 | - | 90 | 74 | 90 | 74 |
Other | 3 | 19 | 35 | 38 | 257 | 260 |
Adjusted EBITDA | 1,727 | 1,924 | 4,922 | 5,824 | 7,215 | 8,117 |
JV Cash Adjustments | ||||||
IFRS Earnings | -40 | -195 | -85 | -414 | -216 | -545 |
Cash Earnings | 95 | 75 | 328 | 274 | 401 | 347 |
Portfolio Amortisation | 1,378 | 1,206 | 3,959 | 3,768 | 5,511 | 5,320 |
Cash EBITDA | 3,160 | 3,009 | 9,124 | 9,452 | 12,910 | 13,238 |
EPS RECONCILIATION | ||||||
Earnings Per Share, SEK | -3.41 | -17.05 | -3.11 | -6.95 | -33.2 | -37.07 |
IAC - NCIs | ||||||
Impairments / (Reversals) | 0.50 | 22.08 | 0.61 | 22.09 | 26.3 | 47.8 |
Portfolio Investments Costs of Sales | ||||||
Other Operating (Gains) / Losses | 4.75 | 1.27 | 8.88 | 2.80 | 10.6 | 4.47 |
Adjusted Earnings Per Share, SEK | 1.84 | 6.31 | 6.38 | 17.93 | 3.66 | 15.21 |
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Intrum AB published this content on 25 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 October 2023 05:20:06 UTC.