17 January 2022, 19:00 CET
Market update stock exchange notice
(Oslo, 17 January 2022) Axactor SE (Axactor, OSE: ACR) reported a collection performance of 89% in Q3. As expected, the collection performance improved in Q4 and came in at 91% for the quarter and 97% in December. Although the development is positive it is not sufficiently improved to support the book value of the portfolios as collection performance should fluctuate around 100% over time. Axactor will therefore book a negative revaluation of EUR 43m in Q4 2021 whereof EUR 37m relates to NPL and EUR 6m relates to REO. A majority of the revaluation relates to legacy portfolios acquired during the start-up phase of the company. Approximately 55% of the revaluation relates to portfolios in Sweden whereas on the other hand unsecured portfolios in Spain, Italy and Germany accounts for less than 1%. The company has acquired NPL portfolios at a gross IRR of 23% in 2021, 8%-points higher than the gross IRR on the total NPL portfolio at year end 2020.
The company complies with all covenants as of year-end 2021.
Reference is made to the stock exchange notice “Update on process with FSA” dated 13 December 2021. EUR 1.8m of the revaluation relates to one specific NPL portfolio the Norwegian Financial Supervisory Authority (FSA) has required a new valuation of.
Axactor has been in a legal proceeding regarding termination of a forward flow agreement with a Swedish bank. The contract was terminated one year earlier than stipulated as Axactor regarded the contract as violated. As part of the settlement Axactor will pay EUR 2.2m. The cost will be booked in Q4.
Preliminary figures Q4 2021 (Q4 2020 in brackets)*
- Gross revenue of EUR 86m (EUR 92m)
- Total income of EUR 22m (EUR 55m)
- EBITDA of EUR -26m (EUR 17m)
- Cash EBITDA of EUR 55m (EUR 61m)
- Net profit before tax of EUR -42m (EUR -3m)
- NPL portfolio investments of EUR 53m (EUR 22m)
The company is pleased to see that the 3PC segment accounts for 17% of gross revenue in Q4. The negative trend on 3PC revenue y-o-y has turned into growth and the contribution margin has improved to 47% for the quarter (44%). Furthermore, the effects of the cost reduction program contributed to a reduction of OPEX of 5% y-o-y (excluding OPEX related to the REO segment and cost in the legal dispute). NPL portfolio investments are increasing steadily and came in at EUR 53m for the quarter, up from EUR 22m in Q4 2020 and up from EUR 32m in previous quarter.
Axactor has sold off ~90% of the REO portfolio. Gross revenue for the segment came in at EUR 40m in 2021 and consolidated book values are down to only EUR 29m at year end. In 2022 the REO segment will be reported as discontinued operations in the financial statement.
The revaluation in Q4 is expected to put Axactor back on a collection performance fluctuating around 100% going forward. Furthermore, the investment capacity for 2022 is at a satisfying level of EUR ~300m enabling growth. The company expect NPL investments of EUR 200 - 250m in 2022, well above the estimated replacement CAPEX of EUR 108m. Axactor has already EUR 117m in committed forward flow agreements for 2022 at a satisfying gross IRR level of 22%.
“I am fully convinced that Axactor is on the right path. We are acquiring portfolios at attractive rates and have an investment capacity of almost 3x replacement CAPEX. Customer satisfaction is very high, we are improving efficiency and reducing funding cost. We are well positioned to succeed going forward” says Johnny Tsolis, CEO of Axactor.
Global investor call
The company would like to invite to a global investor call tomorrow Tuesday 18 January at 13:00 CET.
Participation will be possible via the following: https://streams.eventcdn.net/a...
DK: +45 78 15 01 10
NO: +47 23 50 02 36
SE: +46 850 558 355
UK: +44 333 300 9273
US: +1 646 722 4957
For additional information, please contact:
Johnny Tsolis, CEO, Axactor, tel: +47 913 35 461, e-mail: email@example.com
Kyrre Svae, Chief of Strategy & IR, Axactor, tel: +47 478 39 405, e-mail: firstname.lastname@example.org
To learn more about Axactor please visit www.axactor.com.
*Please note that numbers are unaudited and might be subject to changes. Alternative performance measures (APMs) are defined and reconciled to the IFRS financial statements as a part of the APM section on page 32 of the third quarter 2021 financial report.
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, Chief of Strategy & IR at Axactor SE, on 17 January 2022 at 19:00 CET.