LINDORFF SECOND QUARTER 2015 PAGE 1/29 QUARTERLY REPORT

Transcription

1 LINDORFF SECOND QUARTER 2015 PAGE 1/29 Q1 QUARTERLY REPORT 2017

2 PAGE 2/29 LINDORFF SECOND QUARTER 2015

3 LINDORFF FIRST QUARTER 2017 PAGE 3/29 Financial highlights Q1 Net revenue of EUR 179m, up 33% y/y Organic revenue growth in 3PC of 9% EBITDA excl. NRIs of EUR 71m in Q1, up 38% y/y ERC of EUR 2,621m, up 9% y/y Adjusted EBITDA Up 23% ERC Up 9% Investments in DP (LTM) EUR241m Adj. EBITDA (excl. NRIs) EURm ERC 180 month EURm 2,700 2,600 2,500 2,400 2, Investments in Debt Purchasing LTM EURm Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 2,200 Q1 16 Q2 16 Q3 16 Q4 16 Q Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 EURm unless otherwise stated Jan-Mar 2017 Jan-Mar 2016 Change % Jan-Dec 2016* LTM* Net revenue % EBITDA % EBITDA margin (%) 35% 34% 39% 39% EBITDA excl. NRIs % Adjusted EBITDA % Adjusted EBITDA excl. NRIs % EBIT % NIBD 2,372 2,073 14% 2,329 2,372 NIBD / Proforma Adjusted EBITDA (LTM)** ERC, end of period 2,621 2,412 9% 2,641 2,621 Investments in Debt Purchasing % Return in Debt Purchasing (LTM) 14.3% 15.5% 14.1% 14.3% * Aktua included from 1 June ** See definition on page 27 and reconciliation on page 18.

4 LINDORFF FIRST QUARTER 2017 PAGE 4/29 Operational and Market update Continued double digit growth in revenue and earnings Lindorff delivered strong performance in Q1, with Net revenue of EUR 179m representing an increase of 33% compared to the same quarter last year. The growth was driven by the Debt Collection business following the acquisition of Aktua in 2016 and positive development in the underlying external servicing revenue in the 3PC business. The net revenue in the Debt Collection unit grew by 48% in Q compared to Q1 2016, mainly driven by the acquisition of Aktua and the positive impact of initiatives to drive 3PC collection performance. Excluding the effects of the acquisition of Aktua and two bolt-on acquisitions in Germany from 2016, the organic net revenue growth in 3PC was 9% compared to same quarter last year. The Q1 Adjusted EBITDA excluding NRIs was up 23% compared to the same quarter last year, coming in at EUR 108m. The reported EBITDA was up 35% and up by 38% excluding NRIs compared to Q The EBITDA margin in quarter consequently increased to 35% from 34% in Q The margin increase is mainly driven by high margin contribution from Aktua. Excluding Aktua the main revenue growth is coming from the 3PC business this quarter where margins are somewhat lower than in the Debt Purchasing business. Investments in Debt Purchasing amounted to EUR 23m in Q compared to EUR 24m in Q The investment level reflects a normal seasonality pattern. However, in addition to the one-off investments, the company signed several notable forward-flow deals in the quarter and expect full year forward flow capex in excess of EUR 100m which is double the amount achieved over the last twelve months. Lindorff continued to deliver solid collection performance at 103% of active forecasts in Q1. Well balanced and diversified growth The first quarter of 2017 was yet another quarter with strong growth for Lindorff across both business lines and geographies. This is a key success factor for the company and strategically important in order to diversify risk and increase the addressable market size. The pipeline for both DP investments and M&A continues to be healthy with several attractive opportunities throughout Lindorff s markets. Investments made late in 2016 contributed to 4% growth in the DP business, despite a strong Q following the EUR 395m investments in Investments and signed forward flows in the quarter represented a mix of both financial institutions and utility related debt across all Lindorff s markets. One of Lindorff s key priorities is to extract more value out of existing volume in the Debt Collection business as well winning new market share. In the quarter these efforts resulted in 9% organic growth in 3PC revenue. The Debt Collection business continued to grow in Southern Europe driven mainly by the acquisition of Aktua which also provides the company with a broader service offering and platform to grow in to the secured NPL servicing and Real Estate Servicing. The Debt Collection business delivered strong growth in the Nordic countries driven by the organic growth initiatives, and in the Central European region through the bolt-on acquisitions in Germany. The underlying 3PC margin development has also improved through strict cost control and more effective cash collection. After the quarter, Lindorff increased its foothold in Italy through a small bolt-on acquisition in April. The acquisition provides Lindorff with additional Debt Collection capabilities and is another step forward for the company in establishing a solid platform for both servicing and Debt Purchasing capabilities in the Italian market. During the first quarter, Lindorff continued its preparations for the planned combination with Intrum Justitia. A competition filing was submitted to the European Commission in April and the aim is still to complete the transaction in the second quarter of 2017 in line with what has been previously communicated.

5 LINDORFF FIRST QUARTER 2017 PAGE 5/29 Financial review Q Lindorff Group Lindorff Group consists of Lock Lower Holding AS, Corporate Identity Number , as parent company with subsidiary Lock AS together with Lindorff AB and its subsidiaries. Subsidiaries are consolidated from acquisition date. Lindorff s ownership in the Spanish group Aktua Soluciones Financieras Holdings amounts to 85%. Due to reporting requirements in the current bond indenture, Aktua Group is organised as unrestricted subsidiaries, and separate figures for the restricted Group are presented in Note 6. Throughout the report the terms Lindorff and Lindorff Group mean Lock Lower Holding AS and all subsidiaries. Net revenue Net revenue was EUR 179m in Q This represents an increase of 33% compared to EUR 135m in Q1 2016, mainly driven by the acquisition of Aktua, organic growth of 9% in 3PC driven by a mix of improved efficiency and new volumes, as well as two bolt-on acquisitions in Germany in Net revenue EURm Earnings The reported Adjusted EBITDA amounted to EUR 100m in Q compared to EUR 83m in Q Excluding NRIs, the Adjusted EBITDA was EUR 108m in the first quarter, up 23% compared to same period last year. The EBITDA increased from EUR 46m in Q to EUR 63m in Q due to the increase in revenue and positive margin contribution from new investments. Adjusting for NRIs the Q1 EBITDA was EUR 71m, up 38% compared to the same period last year. The EBITDA margin increased from 34% in Q to 35% in Q Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Adjusted EBITDA (reported) EURm Reported EBIT amounted to EUR 48m in Q compared to EUR 36m in Q1 2016, representing an increase of 32%. Operating expenses Total operating expenses excluding depreciation and amortisation amounted to EUR 117m in Q1 2017, up from EUR 88m in Q A large portion of the expenses relates to Aktua. Excluding Aktua, operating costs increased by EUR 15m. In Q employee benefit expenses amounted to EUR 60m, up by EUR 10m from EUR 50m in Q The increase relates mainly to Aktua (EUR 6m), acquisitions in Germany and growth in operations in Spain. Legal fees amounted to EUR 13m in Q1 2017, up by EUR 2m from EUR 11m in Q The increase is related to higher legal collection activities which are expected to secure additional future revenue. Phone, postage and packaging expenses amounted to EUR 5m in both Q and Q Other operating costs increased by EUR 16m in the first quarter 2017, from EUR 23m in 2016 to EUR 39m. Excluding Aktua, other operating costs increased by 9m. The increase is mainly related to the planned merger with Intrum Justita and one-off expenses related to preparations for a potential listing in H2 2016, reported as non-recurring items (NRIs). NRIs in Q1 were EUR 8m compared to EUR 5m in the first quarter Depreciation and Amortisation Depreciation and amortisation (excl. portfolio amortisation) increased by EUR 4m from EUR 10m in Q to EUR 14m in Q The increase mainly 100 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17

6 LINDORFF FIRST QUARTER 2017 PAGE 6/29 relates to amortisation of client contracts in Aktua of EUR 4m. SG&A and IT SG&A and IT costs increased by EUR 5m, from EUR 24m in Q to EUR 29m in Q The increase is mainly related to growth in the business, through additions in Germany, Italy and Spain. SG&A/Net revenue ratio decreased from 11% in Q to 9% in Q1 2017, while IT cost/net revenue ratio remained stable at 7% for Q and Q Net financial items Net financial costs increased by EUR 18m from EUR 32m in Q to EUR 50m in Q The main reasons for the increase is higher net interest bearing debt, a net foreign exchange loss in 2017 as opposed to a gain in 2016 and costs related to the additional funding secured in October Investments and cash flow Investments in Debt Purchasing were EUR 23m in Q compared to EUR 24m the same period last year. For the last twelve months investments in Debt Purchasing were EUR 241m. Cash flow from operating activities was EUR 35m in Q compared to EUR 18m in Q Increase in cash flow is mainly attributable to the contribution of Aktua to the Group EBITDA. Cash flow used on investment activities increased by EUR 32m mainly due to deferred payment for a portfolio acquisition in December Tax The income tax expense for the quarter was EUR 5m (2016: 5m). The high effective tax rate is mainly due to not recognised deferred tax asset on losses in some jurisdictions. Funding Lindorff Group is funded through a Super Senior RCF of EUR 342m, Senior Secured Notes of EUR 1,466m equivalent (issued in EUR and NOK) and Senior Notes of EUR 444m equivalent (issued in EUR and SEK), a nonsyndicated loan facility of EUR 200m and a NOK bilateral credit facility of EUR 53m equivalent. The average interest rate on the notes is 7% with an average duration of 4.3 years. The multicurrency RCF is priced at a margin of 3.5% with a commitment fee equivalent to 35% of the applicable margin on any undrawn amount. At the end of Q1 2017, the RCF draw amounted to EUR 93m (excluding a draw for unfunded guarantees of EUR 11m). The non-syndicated loan facility bears interest at an initial rate of EURIBOR plus 5.5%, subject to margin increases over time. The EUR 53m equivalent bilateral credit facility bears interest at NIBOR plus a margin of 4.5%. Lindorff also has a EUR 50m receivable financing solution for the payment service with an interest margin of 2.9% over the interbank rate. EUR 32m was drawn at the end of the quarter. In addition to the above mentioned borrowings, Aktua has senior facilities totalling EUR 94m with an interest of EURIBOR plus 3.0%, Mezzanine facilities totalling EUR 50m carrying an interest rate of EURIBOR plus 9.75%, and a PIK loan of EUR 30m priced at 3.75% over EURIBOR. At end of Q the Net Interest Bearing Debt (NIBD) was EUR 2,372 (Receivables financing is not included in the calculation of NIBD), which implies 5.1x NIBD/Adjusted EBITDA excluding NRIs (LTM) and including pro-forma effect for the acquisition of Cross Factor, Aktua and the two bolt-on acquisitions in Germany. Available liquidity EURm RCF capacity at the end of period amount drawn amount allocated to guarantees -25 Available RCF Cash total Group 73 Available liquidity total Group Cash Aktua group -27 Available liquidity restricted Group 271 Goodwill Consolidated goodwill amounted to EUR 1,582m at the end of Q1 2017, and increased by EUR 191m from EUR 1,391m at the end of March The main reason for the increase was the acquisition of Aktua Soluciones Financieras Holdings, S.L. in Spain, HIT/DMV Group in Germany and foreign exchange changes.

7 LINDORFF FIRST QUARTER 2017 PAGE 7/29 Operating segments Revenue mix in Q Segment Earnings EURm 120 4% 41% Debt Purchasing Debt Collection Other Debt Collection 55% Other 40 Debt Purchasing Q1 16 Q1 17 Debt Collection Net revenue in Q1 2017, excluding intersegment revenue of EUR 27m from collection on Lindorff owned portfolios, amounted to EUR 99m, compared to EUR 59m in Q This represents an increase of 67%. The increase was mainly driven by the acquisition of Aktua in Spain. Excluding the acquisition of Aktua and bolt-on acquisitions in Germany the organic growth in 3PC was 9%. The Segment Earnings increased 75% from EUR 35m in Q to EUR 61m in Q The Earnings margin increased from 41% in Q to 49% in Q The increase was mainly related to Aktua, as well as improved efficiency in the 3PC business. The Debt Collection segment, excluding intersegment revenue, accounted for 55% of the Group Net revenue and 59% of the Group Segment Earnings in Q Debt Purchasing Net revenue in Q amounted to EUR 73m compared to EUR 70m in Q1 2016, representing an increase of 4%. Lindorff s debt portfolios continue to perform strongly with collection performance in Q1 at 103% of forecast. Net portfolio revaluations in Q1 were EUR 1m. The Segment Earnings came in at EUR 41m in Q compared to EUR 39m in Q The earnings margin remained stable at 56% in Q and Total investment in Debt Purchasing during the first quarter was EUR 23m compared to EUR 24m in Q Total investments last twelve months amounted to EUR 241m. Debt Purchasing accounted for 41% of Group Net revenue and 40% of Group Segment Earnings in Q Return in Debt Purchasing (LTM) as of 31 March 2017 was 14.3% compared to 15.5% for the same period last year. The main reason for decrease is a slightly lower collection performance compared to last year and 18% increase in average book value of the portfolios. Estimated Remaining Collections (ERC) on Lindorff s own portfolios was EUR 2,621m at 31 March 2017, up 9% from EUR 2,412m at 31 March 2016.

8 LINDORFF FIRST QUARTER 2017 PAGE 8/29 ERC, next 180 months EURm 450,0 400,0 350,0 300,0 250,0 200,0 150,0 100,0 50, Other Services Other services consist of invoicing, payment services and other income. Revenue in Q was EUR 7.4m, compared to EUR 6.0m in Q Other services continue to be important for Lindorff to drive growth in the core collection business. Payment services is showing a positive development, with revenue increasing from EUR 2.3m in Q to EUR 3.0m in Q Total Segment Earnings for Other Services decreased by 2%, from EUR 1.3m in Q to EUR 1.2m in Q Summary of Operating Segments EURm Jan-Mar 2017 Jan-Mar 2016 Change % Jan-Dec 2016* LTM Revenue per segment Debt Purchasing % Debt Collection % Other % Total % Earnings per segment Debt Purchasing % Debt Collection % Other % 8 8 Total % * Aktua included from 1 June 2016.

9 LINDORFF FIRST QUARTER 2017 PAGE 9/29 Significant risk and uncertainties The Group s and parent company s risks include, among other things, strategic risks related to economic development and acquisitions, regulatory changes, possible errors and omissions and financial risks such as market risk, funding risk and credit risk inherent in purchased loans and receivables and counter party risk for third party business. Tax Lindorff has ongoing discussions with tax authorities in some countries mainly related to the deductibility of interest on Group internal loans. The additional tax cost if these cases will be finally lost have been recognised and if unpaid provided for in the statement of financial position. Financial risk The financial position of the parent company and Group is strong. The company has through its interest rate policy limited the risk of adverse effects from changes in the market s interest rates on the Group s interest bearing liabilities. The Group s currency exposure is limited through an alignment of Lindorff s interest-bearing loans relative to operational cash flow denominations. The Group is exposed to transaction risks on acquisitions/disposals and other transactions involving foreign currency. The currency exposure is in EUR, NOK, SEK, DKK and PLN. Share and shareholders The company s shareholder is Lock Upper Holding AS (100%). Parent company The parent company is a holding company with 2 employees per 31 March Net result for Q was EUR -1m. Events after the end of the period On April 12 Nordic Capital Fund VIII, currently the indirect majority shareholder in Lindorff, notified the European Commission of the intended combination of Intrum Justitia and Lindorff in order to proceed under the EU Merger Regulation. Target remains to close the transaction during Q2 2017, as previously communicated. At the end of April 2017 Lindorff increased its foothold in Italy through a small bolt-on acquisition. The acquisition provides Lindorff with additional Debt Collection capabilities and is another step forward for the company in establishing a solid platform for both servicing and Debt Purchasing capabilities in the Italian market. The risks are described in more detail in the Board of Directors report, and Note 3 and 4 in Lock Lower Holding AS consolidated 2016 Annual report.

10 LINDORFF FIRST QUARTER 2017 PAGE 10/29 Consolidated Income Statement EURm Jan-Mar 2017 Jan-Mar 2016 Jan-Dec 2016* LTM Net revenue Employee benefit expense Legal fee cost Phone, postage and packaging Other operating costs Depreciation, amortisation and impairment Results from operating activities (EBIT) Net financial items Profit (loss) before tax Income tax expense Profit (loss) for the period Profit (loss) attributable to: Owners of the Company Profit (loss)for the period * Aktua included from 1 June Consolidated Statement of comprehensive income EURm Jan-Mar 2017 Jan-Mar 2016 Jan-Dec 2016* LTM Profit (loss) for the period Other comprehensive income: Items that will not be reclassified to profit or loss Remeasurements of post-employment benefit obligations Items that may be subsequently reclassified to profit or loss Currency translation differences Total comprehensive income for the period Attributable to: Owners of the Company Total comprehensive income for the year * Aktua included from 1 June 2016.

11 LINDORFF FIRST QUARTER 2017 PAGE 11/29 Consolidated Statement of financial position EURm 31 Mar Mar Dec 2016 ASSETS Fixtures and furniture Goodwill 1,582 1,391 1,584 Other intangible assets Loans and receivables 1,169 1,061 1,176 Deferred tax assets Other financial assets Non-current assets 3,211 2,868 3,235 Trade receivables Current tax receivable Other short-term receivables Client funds Cash and cash equivalents Current assets Total assets 3,499 3,063 3,514 EQUITY Share capital Share premium Retained earnings Total equity LIABILITIES Liabilities to credit institutions Bonds 1,870 1,864 1,868 Other long-term liabilities Employee benefit obligation Deferred tax liabilities Derivative financial instruments Non-current liabilities 2,381 1,922 2,385 Trade payables Borrowings Client liabilities Current tax liabilities Other liabilities Derivative financial instruments Current liabilities Total liabilities 2,737 2,273 2,745 Total equity and liabilities 3,499 3,063 3,514

12 LINDORFF FIRST QUARTER 2017 PAGE 12/29 Consolidated Statement of changes in equity EURm Jan-Mar 2017 Jan-Dec 2016 Beginning balance, 1 January Net income (loss) for the period Remeasurements of post-employment benefit obligations 0-0 Currency translation differences -0 7 Other comprehensive income -0 6 Total comprehensive income Capital increase 0 1 Sold put option to non-controlling interest Ending balance

13 LINDORFF FIRST QUARTER 2017 PAGE 13/29 Consolidated Statement of cash flow EURm Jan-Mar 2017 Jan-Mar 2016 Jan-Dec 2016* Operating activities: Results from operating activities (EBIT) Amortisation, depreciation and impairment Amortisation and revaluation of Purchased Debt Interest paid Corporate Income tax paid Cash flow from operating activities before changes in working capital Cash flow from changes in working capital: Decrease(+) / increase(-) in trade receivable Decrease(+) / increase(-) in other receivables Decrease(+) / increase(-) in payment services receivables Decrease(-) / increase(+) in trade payable Decrease(-) /increase(+) in other current liabilities Cash flow (used in)/from operating activities Investment activities: Acquisition of subsidiary, net of cash acquired Acquisition of tangible fixed assets Acquisition of intangible fixed assets Proceeds from sale of shares Acquisition of loans and receivables Cash flow (used in)/from investing activities Financing activities: Proceeds from new debt Retirement of debt Other financial expenses paid Cash flow (used in)/from financing activities Cash flow for the period Currency effect Cash and cash equivalents at the beginning of the period Cash and cash equivalents at end of period * Aktua included from 1 June 2016.

14 LINDORFF FIRST QUARTER 2017 PAGE 14/29 Income Statement Parent Company EURm Jan-Mar 2017 Jan-Mar 2016 Jan-Dec 2016 Net revenue Other operating costs Results from operating activities (EBIT) Finance income Finance costs Net finance costs Profit before tax Income tax expense Profit for the period

15 LINDORFF FIRST QUARTER 2017 PAGE 15/29 Statement of financial position Parent Company EURm 31 Mar Mar Dec 2016 ASSETS Investment in subsidiaries Long-term receivables Deferred tax assets Non-current assets 1,405 1,191 1,412 Other short-term receivables Current assets Total assets 1,441 1,197 1,454 EQUITY Share Capital Total restricted capital Share Premium Retained earnings Total non-restricted capital Total equity LIABILITIES Liabilities to credit institutions Bonds Other long-term liabilities Non-current liabilities Borrowings Other liabilities* Current liabilities Total liabilities Total equity and liabilities 1,441 1,197 1,454 Pledged assets (shares in subsidiaries) * EUR 13m has been reclassified from Other liabilities to Borrowings for the period ended 31 December 2016.

16 LINDORFF FIRST QUARTER 2017 PAGE 16/29 Notes Note 1 Accounting Principles Lock Lower Holding AS consolidated financial statements for first quarter of 2017 has been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union, as well as the Norwegian Accounting Act. The consolidated financial statements have been prepared in accordance with the historical cost method, except for derivative instruments that are measured according to IAS 32. The parent company s financial statements have been prepared in accordance with the Norwegian Accounting Act as well as NGAAP. policies adopted are consistent with those of the previous financial year for Lock Lower Holding AS (see consolidated Financial Statements of Lock Lower Holding AS 2016). The Parent Company s reporting currency is euro (EUR), which is also the reporting currency for the Group. The consolidated financial statements are presented in EUR and all values are rounded to the nearest million (EURm) except when otherwise indicated. The consolidated and parent company accounts pertain to 1 January to 31 March for income statements and 31 March for items on the statements of financial position. This interim report has been prepared in accordance with IAS 34, Interim Financial Reporting. The accounting

17 LINDORFF FIRST QUARTER 2017 PAGE 17/29 Note 2 Operating segments Management has determined the operating segments based on information reviewed by management for the purpose of allocating resources and assessing performance. Management considers the performance from a product perspective and separately considers the Debt Purchasing and Debt Collection segments. Both segments meet the quantitative thresholds required by IFRS 8 for reportable segments. Management assesses the performance of the operating segments based on a measure of Segment Earnings which is Net revenue minus direct operating expenses. Revenues Sales between segments are carried out at arm s length. Net revenue from external parties reported to management is measured in a manner consistent with that in the income statement. The following table presents a reconciliation of the reportable segments main captions from profit and loss to the entity s profit and loss before tax. EURm Jan-Mar 2017 Jan-Mar 2016 Jan-Dec 2016* Net revenue from external customers Debt Purchasing Debt Collection Other Total Inter- segment revenue Debt Collection Elimination Earnings per segment Debt Purchasing Debt Collection Other Total Unallocated cost SG&A IT Other not allocated expenses EBITDA Depreciation and amortisation EBIT Net financial Items Profit (loss) before tax Purchased loans and receivables Beginning value 1,176 1,070 1,070 Amortisation Revaluation** Portfolio acquisitions Investment in portfolios through acquisitions*** Divestment and disposals Effect of change in FX rates Ending value 1,169 1,061 1,176 Average carrying value of purchased debt 1,173 1,066 1,123 Return in Debt Purchasing (LTM) 14.3 % 15.5 % 14.1 % * Aktua included from 1 June ** Revaluation includes net portfolios revaluations and tail extensions. *** Investment in portfolios through acquisitions for Q (EUR 9m) relates to consolidation of co-investment due to IFRS requirements.

18 LINDORFF FIRST QUARTER 2017 PAGE 18/29 Note 3 Alternative Performance Measures The Lindorff Group uses the alternative performance measures Adjusted EBITDA, Adjusted EBITDA excluding NRIs, Net Interest Bearing Debt to Proforma Adjusted EBITDA excluding NRIs (LTM) and Return in Debt Purchasing (LTM). The Group believes that the alternative performance measures are useful complements for users of the financial report. Adjusted EBITDA serves as a cash proxy and a measure that the Group considers to be relevant for understanding the results from operating activities adjusted for portfolio amortisation and revaluation. Adjusted EBITDA excluding NRIs is a similar measure which after the exclusion of non-recurring items provides a run rate result from operating activities. The Net Interest Bearing Debt to Proforma Adjusted EBITDA excluding NRIs (LTM) ratio is a leverage ratio used for reporting in relation to the Group s bond indentures. Return in Debt Purchasing (LTM) is a ratio used for measuring the segment earnings in percentage of average book value of purchased loans and receivables for the last twelve months. Group definitions are unchanged from previous periods and ratios defined as below: EURm Jan-Mar 2017 Jan-Mar 2016 Jan-Dec 2016* LTM Mar 2017 LTM Mar 2016 Net revenue from Debt Purchasing Amortisation and revaluation Collections and other revenue on purchased loans and receivables Revenue from Debt Collection and Other Services Employee benefit expense Legal fee cost Phone, postage and packaging Other operating costs Adjusted EBITDA Non Recurring Items (NRIs) Adjusted EBITDA excl. NRIs * Aktua included from 1 June EURm LTM Mar 2017 LTM Mar 2016 Adjusted EBITDA excl. NRIs Proforma acquisitions 14 8 Proforma Adjusted EBITDA excl. NRIs EURm LTM Mar 2017 LTM Mar 2016 Debt Purchasing Segment Earnings / Average carrying value of purchased debt 1, Return in Debt Purchasing (LTM) 14.3 % 15.5 % EURm LTM Mar 2017 LTM Mar 2016 Net Interest Bearing Debt 2,372 2,073 Proforma Adjusted EBITDA excl. NRIs NIBD / Proforma Adjusted EBITDA excl. NRIs (LTM) EURm 31 Mar Mar 2016 Bonds 1,870 1,864 + Non amortised fees and interest on bonds Liabilities to credit institutions Capitalised fees on liabilities to credit institutions 3 0 Borrowings Accrued interest on short term loan and bonds Payment services financing Other liabilities* Cash and cash equivalents Net Interest Bearing Debt 2,372 2,073 *Other liabilities related to consolidation of co-investment due to IFRS requirements.

19 LINDORFF FIRST QUARTER 2017 PAGE 19/29 Note 4 Fair value of financial assets and liabilities Book value Fair value* EURm 31 Mar Mar 2017 FV - hierarchy Financial assets at amortised cost Loans and receivables 1,169 1,169 3 Other financial assets Trade receivables Other short-term receivables Cash and cash equivalents Financial assets at fair value through profit or loss Investment in shares and bonds Total 1,408 1,408 Financial liabilities at fair value through profit or loss Other liabilities Financial liabilities at fair value through equity Put option Financial liabilities at amortised cost Bonds 1,870 2,015 1 Long-term loan Trade payables Borrowings Other liabilities Total 2,547 2,692 * See Annual Report Lock Lower Holding AS 2016 for description of calculation of fair value.

20 LINDORFF FIRST QUARTER 2017 PAGE 20/29 Note 5 Borrowing Revolving Credit Facility (RCF) Drawn* Security Maturity Interest Margin Participants EURm 93 Super Senior secured Floating EURIBOR+3.50% Nordea, DNB, SEB, NYK * Total RCF facility is EUR 342m, whereof EUR 25m is allocated to guarantees. As at 31 March 2017 EUR 93m was drawn, excluding EUR 11m in guarantees. Non-syndicated loan Drawn Security Maturity Interest Margin Lender EURm 200 Share Pledge Floating EURIBOR+5.50% GS International Bank Bilateral facility Drawn Security Maturity Interest Margin Lender NOKm 490 Negative pledge Floating 3m NIBOR+4.50% Nordea Securitization Facility Drawn* Security Maturity Interest Margin Lender EURm 32 Receivables pledge Floating 3m IBOR+2.90% Nordea * Total facility is EUR 50m. As at 31 March 2017 EUR 32m was drawn. The securitization facility is not included in NIBD calculations in accordance with the Bond Indenture. Bonds Issue Date Issue Security Maturity Interest Coupon Issuer EURm Senior secured notes Floating 3m EURIBOR+5.50% Lock AS EURm Senior secured notes Floating 3m EURIBOR+5.50% Lock AS EURm Senior secured notes Floating 3m EURIBOR+5.50% Lock AS NOKm ,680 Senior secured notes Floating 3m NIBOR+5.75% Lock AS EURm Senior secured notes Fixed 7.0 % Lock AS EURm Senior secured notes Fixed 7.0 % Lock AS EURm Senior secured notes Fixed 7.0 % Lock AS EURm Senior notes Fixed 9.5 % Lock Lower Holding AS SEKm ,850 Senior notes Floating 3m STIBOR+8.775% Lock Lower Holding AS Total (EURm)* 1,910 * Total is in EURm equivalent based on closing rates 31 March Book value of long term liabilities is net of capitalised fees. Lock Lower Holding AS Senior notes are on-lent to Lock AS at the same interest conditions as the issuer has. Planned refinancing The merger between Intrum Justitia and Lindorff announced on November 14, 2016 is subject to the approval of regulatory authorities in relevant jurisdictions as well as by the EU competition authorities. The transaction is expected to be completed during the second quarter of 2017, depending on the time required to obtain the regulatory approvals. If the transaction is completed as planned, substantially all of Lindorff's indebtedness, including the senior secured and senior notes and the RCF, will be refinanced.

21 LINDORFF FIRST QUARTER 2017 PAGE 21/29 Aktua facilities PIK facility Limit Security Maturity Interest Margin Participants EURm 30 Guarantee from Nordic Floating EURIBOR+3.75% DNB Senior facility (Aktua) Limit Security Maturity Interest Margin Participants EURm 70 Senior secured Floating EURIBOR+3.00% Deutsche, Santander, Sabadell and BankInter Mezzanine facility (Aktua) Limit Security Maturity Interest Margin Participants EURm 38 Secured Floating EURIBOR+9.75% Deutsche Bank Senior facility (Kite) Limit Security Maturity Interest Margin Participants EURm 24 Senior secured Floating EURIBOR+3.00% Deutsche, Santander, Sabadell and BankInter Mezzanine facility (Kite) Limit Security Maturity Interest Margin Participants EURm 12 Secured Floating EURIBOR+9.75% Deutsche Bank

22 LINDORFF FIRST QUARTER 2017 PAGE 22/29 Note 6 Restricted Group With reference to the indentures governing the outstanding notes of Lock Lower Holding AS and Lock AS as well as Lock AS s revolving credit facility, the companies in the Aktua Group are organised as unrestricted subsidiaries. A separate disclosure of Lindorff Group excluding the Aktua Group is presented in this note. Financial highlights Restricted Group EURm unless otherwise stated Jan-Mar 2017 Jan-Mar 2016 Change % Jan-Dec 2016 LTM Net revenue % EBITDA % EBITDA margin (%) 30% 34% 37% 36% EBITDA excl. NRIs % Adjusted EBITDA % Adjusted EBITDA excl. NRIs % EBIT % NIBD 2,223 2,073 7% 2,166 2,223 NIBD / Proforma Adjusted EBITDA (LTM)* ERC, end of period 2,621 2,412 9% 2,641 2,621 Investments in Debt Purchasing % Return in Debt Purchasing (LTM) 14.3% 15.5% 14.1% 14.3% * See definition on page 27.

23 LINDORFF FIRST QUARTER 2017 PAGE 23/29 Consolidated Income Statement Restricted Group EURm Jan-Mar 2017 Jan-Mar 2016 Jan-Dec 2016 LTM Net revenue Employee benefit expense Legal fee cost Phone, postage and packaging Other operating costs Depreciation, amortisation and impairment Results from operating activities (EBIT) Net financial items Profit (loss) before tax Income tax expense Profit (loss) for the period Profit (loss) attributable to: Owners of the Company Profit (loss)for the period Consolidated Statement of comprehensive income Restricted Group EURm Jan-Mar 2017 Jan-Mar 2016 Jan-Dec 2016 LTM Profit (loss) for the period Other comprehensive income: Items that will not be reclassified to profit or loss Remeasurements of post-employment benefit obligations Items that may be subsequently reclassified to profit or loss Currency translation differences Total comprehensive income for the period Attributable to: Owners of the Company Total comprehensive income for the year

24 LINDORFF FIRST QUARTER 2017 PAGE 24/29 Consolidated Statement of financial position Restricted Group EURm 31 Mar Mar Dec 2016 ASSETS Fixtures and furniture Goodwill 1,412 1,391 1,413 Other intangible assets Loans and receivables 1,169 1,061 1,176 Deferred tax assets Other financial assets Non-current assets 3,004 2,868 3,025 Trade receivables Current tax receivable Other short-term receivables Client funds Cash and cash equivalents Current assets Total assets 3,240 3,063 3,264 EQUITY Share capital Share premium Retained earnings Total equity Liabilities Liabilities to credit institutions Bonds 1,870 1,864 1,868 Other long-term liabilities Employee benefit obligations Deferred tax liabilities Non-current liabilities 2,199 1,922 2,198 Trade payables Borrowings Client liabilities Current tax liabilities Other liabilities Derivative financial instruments Current liabilities Total liabilities 2,494 2,273 2,502 Total equity and liabilities 3,240 3,063 3,264

25 LINDORFF FIRST QUARTER 2017 PAGE 25/29 Consolidated Statement of cash flow Restricted Group EURm Jan-Mar 2017 Jan-Mar 2016 Jan-Dec 2016 Operating activities: Results from operating activities (EBIT) Amortisation, depreciation and impairment Amortisation and revaluation of Purchased Debt Interest paid Corporate Income tax paid Cash flow from operating activities before changes in working capital Cash flow from changes in working capital: Decrease(+) / increase(-) in trade receivable Decrease(+) / increase(-) in other receivables Decrease(+) / increase(-) in payment product receivables Decrease(-) / increase(+) in trade payable Decrease(-) /increase(+) in other current liabilities Cash flow (used in)/from operating activities Investment activities: Acquisition of subsidiary, net of cash acquired Acquisition of tangible fixed assets Acquisition of intangible fixed assets Proceeds from sale of shares Acquisition of loans and receivables Cash flow (used in)/from investing activities Financing activities: Proceeds from new debt Retirement of debt Other financial expenses paid Cash flow (used in)/from financing activities Cash flow for the period Currency effect Cash and cash equivalents at the beginning of the period Cash and cash equivalents at end of period

26 LINDORFF FIRST QUARTER 2017 PAGE 26/29 Note 7 Events after the end of the period On April 12 Nordic Capital Fund VIII, currently the indirect majority shareholder in Lindorff, notified the European Commission of the intended combination of Intrum Justitia and Lindorff in order to proceed under the EU Merger Regulation. Target remains to close the transaction during Q2 2017, as previously communicated. At the end of April 2017 Lindorff increased its foothold in Italy through a small bolt-on acquisition. The acquisition provides Lindorff with additional Debt Collection capabilities and is another step forward for the company in establishing a solid platform for both servicing and Debt Purchasing capabilities in the Italian market.

27 LINDORFF FIRST QUARTER 2017 PAGE 27/29 Definitions and abbreviations Definitions Adjusted EBITDA EBITDA adjusted for amortisation and revaluation of portfolios of purchased loans and receivables Collection performance Collection performance on purchased loans and receivables compared to forecast Direct opex Operational expenses related to collection activities, excluding SG&A and IT cost ERC Estimated Remaining Collections next 180 months on purchased loans and receivables in Debt Purchasing Gross collection in Debt Purchasing Total principal, interest, collection fees and legal fees collected on purchased loans Intersegment Revenue - Commission to the Debt Collection segment from the Debt Purchasing segment Investments in Debt Purchasing Acquisitions of non-performing loans and receivables (may differ from acquisition of loans and receivables in the cash flow statement due to actual payment of the acquisition may be due in another period) NIBD Net Interest Bearing Debt. Receivables financing is not included in the calculation of NIBD in accordance with the current Bond Indentures NIBD/Proforma Adj EBITDA (LTM) Net interest bearing debt divided by Proforma Adjusted EBITDA LTM excluding NRIs (Leverage ratio is adjusted for proforma effect of acquisitions in the given period. Not including investments in Debt Purchasing) Portfolio revaluation Change in carrying value of purchased loans and receivables due to changed collection forecasts Restricted Group Lock Lower Holding AS and all its subsidiaries subject to the restrictive covenants of the Senior Secured Notes, Senior Notes and RCF indenture Return in Debt Purchasing Last Twelve Months (LTM) segment earning in % of average book value of purchased loans and receivables for the last twelve months Segment earnings Segment EBITDA excluding SG&A and IT cost Segment earnings Debt Collection Includes earnings from collection on own portfolios and third party debt as well as Real Estate Servicing Abbreviations 3PC Third Party Collection IDC Internal Debt Collection CAGR Compounded Annual Growth Rate Constant Currency Fixed currency rates for comparable reporting periods EBITDA Earnings Before Interest Tax Depreciation and Amortisation FTE Full Time Equivalent employees IRR Internal Rate of Return NIBD Net Interest Bearing Debt NPL Non-performing Loan NRIs Non-recurring Items LTM Last Twelve Months RES Real Estate Servicing

28 LINDORFF FIRST QUARTER 2017 PAGE 28/29 Other information Contact info Visiting Address Headquarters: Lindorff Group Hoffsveien 70b 0377 Oslo Norway Switchboard: Investor Contacts André Adolfsen SVP Group Controlling and Investor Relations Phone:

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