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30 October 2018, 07:00 CET

Axactor Group

Stock notice

A solid quarter with strong capex deployment and margin expansion in a seasonally slow quarter

Axactor continues to grow and expand the business according to the company´s proven strategy. In the third quarter of 2018 Axactor delivers a 397% EBITDA growth compared to the same quarter in 2017. EBITDA ended at EUR 10.0 million and Cash EBITDA at EUR 32.7 million in the third quarter of 2018. The corresponding numbers for the same period in 2017 was EUR 2.0 million and EUR 6.2 million. The operating margin increased to 21% in the third quarter of 2018, up from 10% in the third quarter last year.

Gross revenue for the third quarter of 2018 ended at EUR 56.5 million, compared to EUR 23.6 million in the corresponding quarter last year. This means that triple digit gross revenue growth is achieved for all three quarters so far in 2018.

To secure future growth, Axactor invested EUR 112.6 million in NPL and REO portfolios during the third quarter of 2018, as well as signing two significant 3PC contracts in Spain. To reduce the company’s funding cost, a refinancing deal for the existing REO portfolios was closed with Nomura International plc, freeing up a total of approximately EUR 96 million for new investments.

The running forward flow volume is currently at a level of close to EUR 15 million per month, and with new contracts signed during the third quarter, this is expected to increase further through the fourth quarter of 2018 and into 2019. This volume will generate significant revenue for Axactor going forward, and the pipeline for NPL portfolios remains strong across the Axactor geographies.

The collection performance vs. original business case for NPL portfolios continue the strong trend seen over the past quarters, with last twelve months (LTM) numbers at the third quarter of 2018 coming in at 105%. When it comes to the REO portfolios, these continue to liquidate quicker than initially anticipated, and the LTM collection performance vs. original business case for REO portfolios was 142% for the same period.

Despite the fact that the third quarter is negatively impacted by the summer holiday in both Scandinavia and across Southern Europe, Axactor once again prove its ability to continue the growth and increase the margins.

“This emphasizes Axactor’s ability to deliver on our investments. It also proves our strong and continued focus on scale benefits and how we are able to increase the efficiency of the collection platforms through sharing of best practices and know-how across the Group”, says Endre Rangnes, CEO of Axactor.

Fresh news after the period – Axactor enters the Finnish market

Axactor is about to enter Finland, as the company has agreed to acquire the Finnish debt collection company SPT Group Ltd. (SPT), which will be Axactor´s platform in the Finnish market. Through this transaction a solid foundation for becoming a significant player within the debt collection and debt purchase market in Finland has been established. In Finland, Axactor meet many of the same banks and financial institutions as in Sweden and Norway, which ensures strong synergies across the Nordic countries.

In addition to the acquisition of SPT Group, Axactor are about to acquire the company´s largest unsecured NPL portfolio so far. The portfolio is originated by Bank Norwegian in Finland and contains unsecured consumer claims with a total outstanding balance of approximately EUR 160 million, across more than 16,000 thousand credit card and personal loan accounts. This portfolio acquisition exceeds the Bank Norwegian deal in Sweden in 2017, increases Axactor’s ERC by 15% and secures Axactor´s entry to the Finnish market by generating an immediate revenue stream for the new platform in Finland.

“We are very pleased to enter the Finnish market, and to acquire our largest unsecured NPL portfolio supporting a good start in this new, exciting market. Now we will do exactly the same in Finland as we have done in the other countries we have business; establish a scalable platform and standardized systems and procedures to ensure maximum efficiency and low IT costs, which is an essential part of Axactor's proven strategy and success recipe”, says Johnny Tsolis.

For further information regarding the acquisitions in Finland, please see separate announcements and Axactor´s 3rd quarter presentation.

Attachment

Axactor´s 3rd quarter report

For additional information, please contact:

Endre Rangnes, CEO Axactor
Mobile phone: +47 482 21 111
Email: endre.rangnes@axactor.com

or

Johnny Tsolis, CFO Axactor
Mobile phone: +47 913 35 461
Email: johnny.tsolis@axactor.com