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30 April 2021, 07:00 CET
Axactor SE: First quarter 2021 financial results
Axactor SE (Axactor, OSE: ACR) delivered total income in the first quarter 2021 of EUR 61.0 million, an increase of 10% from the first quarter last year (55.6 million), and an EBITDA of EUR 17.7 million (14.1). A completed balance sheet restructuring and identification of EUR 4.8 million in annual cost savings provide a solid platform for improved profitability going forward.
“We delivered sound progress in what is normally considered a slow quarter. During the first quarter we also completed the comprehensive financial restructuring announced at the end of 2020, which has put Axactor in a comfortable liquidity position. A cost reduction program was also initiated, where we target EUR 4.8 million in annual savings. Both will be important contributors toward our number one goal of increasing return on equity and start paying dividends,” says Johnny Tsolis, CEO of Axactor.
Axactor SE delivered a 7% increase in gross revenue to EUR 84.9 million (79.2). Total income in the first quarter 2021 was EUR 61.0 million (55.6). EBITDA* was EUR 17.7 million in the first quarter (14.1), while the cash EBITDA* amounted to EUR 52.1 million (48.2). Operating profit (EBIT) was EUR 15.1 million in the first quarter 2021 (11.5). Profit before tax was EUR -1.7 million (5.6), negatively affected by EUR 3.2 million in one-off restructuring costs and an unrealized FX loss of EUR 4.0 million.
Business segment update
Axactor operates in two main segments: non-performing loans (NPL) and third-party collection (3PC). Real estate owned (REO) is treated as a run-off segment and is thus expected to steadily decline over time.
The NPL gross revenue grew 17% compared to the same quarter last year on the back of continued investments in NPL portfolios over the last twelve months. Axactor invested EUR 16.1 million (89.7) in NPL portfolios during the first quarter of 2021. The company has purposely reduced its forward flow commitments over the past twelve months to safeguard liquidity during the volatile situation caused by the Covid-19 pandemic. Now that the funding situation has been sorted, Axactor signed two new forward flow deals during the quarter. The estimated forward flow commitment for the remainder of 2021 is EUR 50-55 million.
3PC total income ended at EUR 11.5 million for the quarter, down from EUR 13.5 million in the first quarter 2020. Implications of the ongoing Covid-19 pandemic continue to affect the volumes received under current contracts, as governments and customers temporarily give debtors more flexibility during this challenging situation. In addition, the government-imposed restrictions throughout Europe is causing longer sales processes compared to normal. The market for new 3PC deals is however showing signs of improvement, and Axactor closed several new contracts across Italy and the Nordic countries during the first quarter and April.
Refinancing and outlook
During the first quarter 2021, the significant balance sheet restructuring announced at the end of 2020 and involving several separate transactions was conducted. Amongst the transactions, Axactor acquired Geveran’s shares and A-notes in Axactor Invest I and raised EUR ~50 million through share issues. All major credit lines were refinanced, resulting in extended maturities and improved average effective funding cost.
A new cost cutting program has been initiated during the first quarter 2021, targeting EUR 4.8 million in annualized savings. The program involves a large number of smaller initiatives, as well as a site consolidation in Spain. Most of the initiatives will be implemented over the first half of 2021, and the program will be concluded by year-end. EUR 3.2m of restructuring cost was booked in the first quarter, primarily related to the Spanish site consolidation.
“Axactor targets improved return on equity over time, based on increasing economies of scale, changes in the business mix, reduced funding cost and the gradual blending in of lower NPL portfolio prices. The company sees growth opportunities in the capital light 3PC segment and through increased 3PC and NPL synergies, whereas the non-core REO business will be phased-out over time,” Tsolis concludes.
*EBITDA and other alternative performance measures (APMs) are defined and reconciled to the IFRS financial statements as a part of the APM section of the first quarter 2020 financial report on pages 32-33.
Axactor will present its interim report for the first quarter 2021 today at 08:30 am (CET). The presentation can be followed from this link: https://streams.eventcdn.net/axactor/2021q1/
For additional information, please contact:
Johnny Tsolis, CEO Axactor, tel: +47 913 35 461, e-mail: email@example.com
Kyrre Svae, Interim CFO and Chief of Strategy & IR Axactor, tel: +47 478 39 405, e-mail: firstname.lastname@example.org
Axactor Group is a next-generation debt management company operating in Norway, Sweden, Finland, Germany, Spain and Italy with an ambitious growth strategy. Axactor acquires and collects on own portfolios of non-performing loans and also provides debt collection and accounts receivable management for third parties. After only five years in business, external analysis show that Axactor already has an industry leading cost-to-collect ratio on NPL. The company has approximately 1,200 employees.
To learn more, visit www.axactor.com
This information is considered to be inside information pursuant to the EU Market Abuse Regulation and is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act. This stock exchange announcement was published by Kyrre Svae, interim CFO of Axactor SE, on 30 April 2021 at 07:00 CET.