Intrum AB – Interim results April-June 2022
- Seasonally strong second quarter with record new servicing sales, up 60 per cent compared to same quarter 2021 · Portfolio Investments delivered record gross collections, outperforming the active forecast by 15 per cent - Continued delivery on key priorities, organic growth and transformation program – with no visible adverse impact from rising economic uncertainty - Well positioned from a capacity and capability perspective to support clients’ increasing new case inflows and expanded need for our services - ONE Intrum program progressing at full speed and well on track, good progress across all initiatives and continuous increase of volumes
Financial results in brief, April-June 2022 (April-June 2021)
- Adjusted EBIT increased to SEK 1,701 M (1,594)
- Cash EBIT increased to SEK 1,595 M (1,413)
- Cash EPS increased to SEK 9.12 (5.67)
- Cash RoIC increased to 8.4 per cent (8.0)
- Available liquidity at the end of the quarter was SEK 17.3 bn (16.8)
Presentation of the interim report
Anders Engdahl, President & CEO and Michael Ladurner, CFO, will present the results and answer questions in an audio cast with telephone conference at 9:00 a.m. CET. Link to the audiocast. The conference will be held in English, to listen in, please dial:
+46 8 505 163 86 (SE)
+44 20 319 84884 (UK)
+1 412 317 6300 (US)
Pin code: 2724302
Comment by President & CEO Anders Engdahl
“During the second quarter we delivered on the previously communicated seasonal performance step-up, whilst continuing to execute our transformation trajectory. Cash revenues grew by 12 per cent compared to the same period last year and cash EBIT is up 13 per cent. Our leverage ratio is temporarily elevated at 4.0 times due to a strong investment quarter, the dividend payment and adverse FX impact.
Credit Management Services continues to be affected by lower like-for-like new case inflows compared to pre-pandemic levels. On average, we saw increases of lower balance, lower commission invoice claims where cash collections are higher but come at a lower margin. While the challenging macro environment is expected to negatively impact collectability, revenue conversion and costs, these factors are expected to be substantially outweighed by the larger AuM due to the commercial successes over the preceding quarters as well as increasing case inflows. This will drive profitability and margin improvements in due course. Cash revenues increased by 1 per cent while cash EBIT decreased due to higher operating expenses.
Despite the macroeconomic challenges, Strategic Markets excels across all metrics and all three markets. Greece continues its strong performance and in Italy and Spain we are adding new third-party volumes with AuM increasing by a gross total of circa SEK 40 bn during the first half of the year. In Spain, the offboarding of SAREB volumes has started and is expected to be completed by the end of the third quarter. We do not foresee any meaningful impact to the expected profit contribution from Spain.
In Portfolio Investments we saw record high collections with collection performance at 15 per cent above active forecast for the second quarter. Payment plans continue to perform solidly with settlements becoming somewhat more difficult to complete. The development is consistent with the gradual normalisation in outperformance to our historical range of 5 to 10 per cent compared to the active forecast. The quarter was also strong from a new investment perspective, with SEK 3,131 M deployed. We have focused on portfolios that are less sensitive to macro factors such as changes in inflation and employment, offering good protection in the current macroeconomic environment.
ONE Intrum, our transformation program, is progressing at full speed. Our full year run-rate savings realised from the transformation program are at SEK 172 M, well on track towards the target of SEK 1 bn of recurring benefits. We are particularly proud of our ability to increase volumes benefitting from our global footprint. Our 4 global front offices are now serving 17 Intrum markets, all sites are ISO 27001 certified, and the new global operating platform is the largest collection system with 25 per cent of all cases.
Looking forward, we expect a slow summer quarter with a strong finish to the year – fully in line with a normalised seasonality pattern. As always, we continue to execute on our strategy of organic growth and the ONE Intrum transformation program, with full benefit realisation expected over the coming 18 months. In the current turbulent environment, Intrum’s diversified and macro hedged business model delivers stability across the business cycle.”
For further information, please contact
Michael Ladurner, Chief Financial Officer
+46 8 546 102 02
This information is information that Intrum AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out below, at 07.00 CET on 21 July 2022.