Intrum AB – Interim results January-March 2022
- Strong delivery in seasonally slower first quarter, with no direct impact from the war in Ukraine · Macro challenges expected to further drive demand for Intrum services - Delivery on key priorities, transformation program and organic growth – all segments positively contributing to 10 per cent cash revenues growth compared to first quarter 2021 - ONE Intrum program remains fully on track, the new global operating platform is now covering 20 per cent of all cases and global front offices are now serving 16 Intrum markets
Financial results in brief, January-March 2022 (January-March 2021)
- Adjusted EBIT decreased to SEK 1,471 M (1,532)
- Cash EBIT increased to SEK 1,409 M (1,365)
- Cash EPS decreased to SEK 4.58 (5.68)
- Cash RoIC decreased to 7.7 per cent (7.8)
- Available liquidity at the end of the quarter was SEK 20 bn (18)
Comment by President & CEO Anders Engdahl
“In the first quarter of 2022, our strong organic delivery continued, resulting in 10 per cent growth in cash revenues despite it being a seasonally slower period. Cash EBITDA grew by 12 per cent and cash EBIT by 3 per cent. Strong cash flow growth contributed to reducing our leverage ratio to 3.8 times.
We see steady progress in Credit Management Services with improving business conditions and increasing new case inflows. In terms of new contract signings, the quarter was one of the strongest ever with new sales exceeding our ambitious target, including the partnership with Sainsbury’s Bank in the UK and additional, sizeable new contracts across geographies and a large number of important renewals with existing clients. Cash revenues increased while cash EBIT decreased mainly due to FX development and external spend, which will start generating incremental revenues during the coming quarters. Overall, the underlying cost trajectory is well on track.
Our Strategic Markets continued to deliver a strong underlying performance in all three countries, Greece, Italy and Spain, with a strong improvement in the earnings quality. In Italy our franchise has improved significantly across all asset classes, which is reflected in increased client activity. 60 per cent of our Italian assets under management now relate to other parties than our partner Intesa Sanpaolo. In Spain, the positive momentum will further support continued profit growth in the segment.
Portfolio Investments continue to perform strongly and in the first quarter the collection performance was 110 per cent relative to the active forecast, with a cash return on invested capital of 9.6 per cent. We collected SEK 3,145 million, up 15 per cent from the same quarter last year, and invested SEK 1,784 million at fairly stable expected return levels. Performance and deployment are in line with the expected contribution, both in terms of self-funded organic growth as well as financial targets.
The ONE Intrum transformation program is fully on track with progress across all initiatives, and we continuously increase volumes benefitting from our global footprint. Our global front offices are now serving 16 Intrum markets and the new global operating platform is handling 20 per cent of all cases. We are on track to deliver SEK 1 billion of recurring benefits by end of 2023, with even more potential in the years beyond based on a foundation of being simple, scalable, digital, relevant, and growing.
Our sustainability agenda is making good progress towards the targets. For the third consecutive year, we have reduced our greenhouse gas emissions. During the quarter we developed a new Global Sustainability Policy to further clarify governance, responsibilities and expectations throughout the business and in relation to key stakeholders.
In the near term, we are entering a seasonally stronger second quarter and I expect continued growth in our servicing segments. Additionally, the growing supply of portfolios will support our ability to select attractive investments. Despite the macro challenges, the back book performance is expected to remain strong. We expect performance for 2022 in line with financial targets – cash EPS growth of 10 per cent or above and a leverage ratio at or below 3.5 times. Key priorities for the coming quarters are unchanged: to deliver on ONE Intrum and organic growth.”
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 29 April, 2022.