Interim Report Third quarter

Transcription

1 2016 A leading debt restructuring partner to international banks and financial institutions Interim Report Third quarter October 28

2 Today s presentation 1. Key highlights and market update 2. Q3 Financial update 3. Q&A

3 1 Key highlights and market update

4 Building for the future Future Q3 Highlights vs Q Strengthened geographical footprint; servicing company in Spain and presence in Greece Acquisition of secured portfolio in Italy Tap issue under the EMTN programme at attractive new levels Increased shareholder base Total revenue +13% EBIT +24% EBIT margin 35% EBT +38% ROE 16,8% vs 13,9% Since IPO Seven quarters of growth Profit before tax growth of 145% * Gross collection growth of 23% ** * Comparing Q vs Q3 2016, adjusted for IPO costs 2015 ** Comparing Jan-Sep 2016 vs Jan-Sep

5 Delivering on the IPO promise Strengthen and expand in current markets, and grow in select new markets Maintain investment disipline and focus on core assets Build upon our status as a regulated credit institution Develop collection strategies with emphasis on in-house collection Leverage benefits of scale Maintain and develop strong funding base and leverage on solid capital and liquidity positions UK position boosted through Compello Spanish market entered Greek market entered Investment criteria unchanged Acqusitions of utility assets phased out Trusted with central bank mandate Investing for the future, e.g. In optimal support for legal procedures in the UK EBIT margin improved to 35% Ba1 rating recieved EMTN program launched 5

6 Q Highlights Gross cash collections SEK 1,075m (Q3 2015: SEK 974m) +10% EBIT SEK 233m (Q3 2015: SEK 187m) +24% EBIT margin 35% (Q3 2015: SEK 32%) +3 pp RoE 17% (Q3 2015: 14%) +3 pp Portfolio acquisitions SEK 607m (Q3 2015: SEK 1,982m) -69% ERC SEK 19.4bn (Q3 2015: SEK 18.1bn) +7% 6

7 Well balanced and diversified business mix Portfolio acquisitions, SEKm West Europe 37% Central % Carrying 33% Central East Europe East 37% West Value (1) Europe 607 Europe SEK 11.7bn Mid Europe Net revenue from acquired loan portfolios SEK 606m Central East Europe Mid Europe 30% West Europe Q Q Mid Europe 30% Portfolio acquisitions Q3, SEKm Full year Q1 Q2 Q3 Q4 3,267 3,227 4,370 Full year acquisition target, in the range of SEK bn , ) Including run-off consumer loan portfolio and portfolios held in joint venture. 7

8 Total deal value is projected to continue to grow with ~7% p.a. Projected growth for NPL deal value in Europe 1 EURbn, unsecured consumer NPLs originated by financial institutions ~2,0 ~2,1 ~2,2 Hoist Finance ~2,4 ~2,6 ~2,8 ~3,0 ~3,3 +7% p.a. ~3,6 ~3,8 ~3, E 17E 18E 19E 2020E 1 Covering Hoist focus markets: DE, PL, RO, AT, UK, IE, NL, BE, FR, PT, ES, IT, GR SOURCE: EBA, IMF, Euromonitor, Third party reports 8

9 The share Share price development - March 25, 2015, to September 30, % HOFI OMXSPI March 25, September 30, % Well diversified Close to shareholders Largest shareholders ( ) % Swedbank Robur Fonder 9.7 Carve Capital AB 9.3 Toscafund Asset Management LLP 9.1 Handelsbanken Funds 6.3 Carnegie Funds 4.9 Danske Invest Funds 3.1 Jörgen Olsson (via Deciso AB) 3.0 Costas Thoupos 2.9 Svenskt Näringsliv 2.7 La Financière de l'echiquier 2.3 9

10 Well on track towards our medium term financial targets Profitability Q Q FY 2015 RoE, % 16.8% 16.9% 12.5% Medium term RoE 20% Profitability Capitalization CET1 ratio 12% Q Q FY 2015 CET1 ratio, % 12.6% 12.9% 12.3% Q Q FY 2015 EBIT margin, % 35.0% 35.2% 30.0% Medium term EBIT margin 40% Dividend policy Medium term 25-30% of annual net profit Long term 50% FY 2015 Dividend 26% of annual net profit

11 2 Q3 Financial update

12 Financial summary Q3 Highlights Solid gross cash collection levels, with growth rates coming down as contribution from Compello is now included in comparison Adjusted for revaluations and other extraordinary items, EBIT margins and return on book are stable Strong EBT development, increase by 38% with operational improvements supporting RoE development SEK million Q Q Change % Jan-Sep 2016 Jan-Sep 2015 Change % Gross cash collections 1, ,206 2, Total revenue ,955 1, EBIT * 50 EBIT margin, % pp pp Financial net EBT * >100 RoE, % pp * 7.5 pp RoB, % pp pp Acquisition of loan portfolios / Investments 607 1,982 ** -69 1,762 2, * The Jan-Sep 2015 period includes IPO costs of SEK 46m ** Whereof the portfolio acquired as part of the Compello transaction represented SEK 1,469m 12

13 Regional development West Europe 37% of net revenues from acquired loan portfolios Q3 Highlights Strengthened position in Spain through acquisition of servicing company (Optimus) Improved collections throughout the region in combination with the addition of Spanish portfolio in Q Improvement in EBIT margin driven by increased collection levels in both the UK and France, and negatively affected by acquisition in Spain High portfolio acquisition, with the comparison to last year being highly influenced by the Compello transaction SEK million Q Q Change % Jan-Sep 2016 Jan-Sep 2015 Change % Gross cash collections Total revenue EBIT EBIT margin, % pp pp RoB, % pp pp Carrying value of acquired loans 4,281 3, N/A N/A N/A Gross 120 month ERC 7,461 6,973 7 N/A N/A N/A Acquisition of loan portfolios 486 1, ,065 1, * Whereof the portfolio acquired as part of the Compello transaction represented SEK 1,469m * 13

14 Regional development Mid Europe 30% of net revenues from acquired loan portfolios Q3 Highlights Strong collection levels throughout the region Stable underlying EBIT margin and Return on Book. Comparable numbers for 2015 affected by positive revaluations and larger than expected VAT recoveries The activities in Greece is proceeding as planned, with only a marginal impact on the result during the quarter Acquisitions at low levels in the third quarter but with strong pipeline for Q4 SEK million Q Q Change % Jan-Sep 2016 Jan-Sep 2015 Change % Gross cash collections , Total revenue EBIT EBIT margin, % pp pp RoB % pp pp Carrying value of acquired loans 3,491 2, N/A N/A N/A Gross 120 month ERC 5,840 4, N/A N/A N/A Acquisition of loan portfolios

15 Regional development Central East Europe 33% of net revenues from acquired loan portfolios Q3 Highlights Solid gross cash collections in both Poland and Germany Return on Book recovering in comparison with previous year in which the level was negatively affected by revaluations SEK million Q Q Change % Jan-Sep 2016 Jan-Sep 2015 Change % Gross cash collections , Total revenue EBIT EBIT margin, % pp pp RoB % pp pp Carrying value of acquired loans 3,638 3,695-2 N/A N/A N/A Gross 120 month ERC 6,239 6,371-2 N/A N/A N/A Acquisition of loan portfolios

16 Bond issue has increased senior unsecured debt and diversified funding mix SEK m Cash and Interestbearing Securities 19,152 19,152 35% Liquidity Floating Deposits Tap issue under EMTN-programme of Euro 50m at 1,71% (total size EUR 300m) Other Liabilities Acquired Loans Other assets 54% Term funding 1-3 Year Deposits Senior Unsecured Debt Subordinated Debt Shareholders Equity (incl. Tier 1) SEK million 30 Sep Dec 2015 Change % Cash and interest-bearing securities 6,623 5, Acquired loans 1 11,658 11,279 3 Other assets Total 19,152 17, Deposits 12,293 12,791-4 Senior unsecured debt 3,227 1,238 >100 Subordinated debt Other liabilities Shareholders equity 2,525 2, Total 19,152 17, ) Including run-off portfolio of consumer loans and portfolios held in joint venture 16

17 Funding structure, capital- and liquidity ratios Funding structure Capital ratios 30 Sep Dec % 12.32% 13.24% 12.94% 15.45% 15.21% 44% 49% 23% 27% 17% 7% 2% 2% 14% 15% Floating deposits 1-3 Year deposits Senior unsecured debt Subordinated debt Equity Common Equity Tier 1 capital ratio Liquidity reserve 30 Sep Dec 2015 Tier 1 capital ratio Total capital ratio 30 Sep Dec 2015 Capital ratios has increased during the year primarily as a result of retained earnings Liquidity reserve increased due to bonds issued under EMTN programme 6,520 5,156 Liquidity reserve 17

18 Key takeaways Third quarter well in line with our expectations with stable top-line and earnings growth Stable acquisition volumes and a good start of the fourth quarter All regions performing in line with expectations Strong balance sheet yielding a good position to acquire larger portfolios in the banking and financial sector 18

19 3 Q&A

20 4 Appendix

21 Hoist Finance in brief Leading debt restructuring partner to international banks with high growth Pan-European focus with presence in 11 countries 1,341 FTEs as per 30 September 2016 Licensed and supervised by the Swedish FSA Listed since 2015, market capitalisation of SEK 6.6 bn Main focus on acquisition and management of bankoriginated non-performing unsecured consumer loans (NPLs) and with increased activity in asset classes such as secured and SME loans 21

22 Our position in the financial ecosystem a specialist in handling NPLs Loans Partner Plan Acquisition Payments Non-Performing Loans, NPL Banks not specialised in handling non-performing loans Even non-performing loans require capital and capital adequacy requirements are increasing Trustworthy, transparent, licenced and supervised partner to banks Specialised work out unit/credit department Focus on long-term amicable installment plans with our customers Will be able to sort out their economy... through a realistic payment plan... and return as a bank customer 22

23 20 year track record of successful growth and strategic entry into new markets Enters Germany and operates with an in-house model with two collection platforms 1997 Sets up collection platforms in both Belgium and the Netherlands 2007 Acquires two collection platforms, a large data warehouse and a significant portfolio of debt claims 2012 Acquired assets and operations of Hoist s service partner TRC in Italy. Acquires Polish debt collector 2014 Enters into a new asset class through acquiring an SME portfolio from Banco Populare 2015 Enters into strategic partnership with Bank of Greece servicing 9bn of NPLs from 16 Greek banks Starts acquiring non-performing portfolios in Sweden 2001 Enters France and operates both own portfolios and third-party debt servicing operations 2011 Acquires its first portfolio in Italy. Enters a 50/50 joint venture in Poland 2013 Acquires three collection platforms and a significant portfolio of debt claims 2013 Acquires portfolios in Austria, managed from the German platforms 2015 Acquires a well-diversified banking portfolio with and an established and proven collection platform First portfolio and platform acquisition in Spain Carrying value of acquired loans (1) SEK 11.0bn CAGR 26% SEK 1.8bn (1) Balance sheet financials translated from reporting currency to EUR at spot rate as of date of reporting, income statement financials translated at average LTM EUR spot rate for the period 23

24 Unsecured consumer NPLs originated by financial institutions EURbn, 2015 Total non-performing loan stock in Europe 1 ~1,100 Consumer loans Corporate loans ~1,100 Unsecured loans Secured loans ~500 Financial institutions Trade originated 105 ~125 Primary target segments for Hoist Finance ~84 ~105 EUR ~105 billion in primary target segments for Hoist 1, of which EUR ~84 billion in Hoist focus markets 2 1 EU28; 2 Hoist focus markets: DE, PL, RO, AT, UK, IE, NL, BE, FR, PT, ES, IT, GR SOURCE: EBA, IMF, Euromonitor, Third party reports 24

25 Assets are held and collected over a ten year period and beyond Criteria for portfolio acquisitions is in the range of 10-12% net IRR or above Portfolios are generally bought at per cent discount to face value dependant on the age of the claim Gross cash-on-cash multiple ~2x Gross portfolio payback time approximately three to four years Total collections over a ten year period Beyond the ten year horizon collections are also expected Face value Purchase Price Y1 Y2 Y3 Y4 Y5 Y6-10 Cash Collection >10Y 25

26 The Hoist Finance DNA Our Mission Your Trust Preferred by customers Preferred partner Respect for customers and partners Attractive to investors Best place to work CSR Respect for business ethics Respect for the environment Respect for human and labour rights 26

27 Cash flow (incl. Adjusted EBITDA) Adjusted EBITDA reconciliation SEK million Q Q Jan-Sep 2016 Jan-Sep 2015 Full Year 2015 Net profit for the period income taxes portfolio revaluations interest income (excl. interest from run-off performing portfolio) + interest expense /- net result from financial transactions depreciation and amortisation EBITDA Adjusted EBITDA development SEK million +28% 1,698 2,404 2,173 + amortisation on run-off portfolio amortisation on acquired loan portfolios ,404 1,113 1,588 Adjusted EBITDA ,173 1,698 2,404 Capital expenditure PPE and IT Operating cash flow ,136 1,658 2, % Net interest expenses (excl. Interest from run-off performing portfolio) Operating cash flow after financing expenses ,911 1,405 2,019 Portfolio acquisitions 607 1,982 1,762 2,920 4,370 Q Q Jan-Sep 2015 Jan-Sep 2016 Full year

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