Presentation Friday July Helping people keep their commitments

Transcription

1 Presentation Friday July Q Helping people keep their commitments 1

2 Today s presenters Klaus-Anders Nysteen CEO Christer Johansson CFO 2

3 AGENDA 1 Key highlights Q and update on operational efficiency 2 Financial update 3 Summary and key take-aways 3

4 1 Key highlights Q2 4

5 Q Highlights Growth Portfolio acquisitions +198% YoY 165 LTM portfolio growth +37% Strong expansion in new asset classes Financial performance Total operating income excl. i.a.c +9% YoY Profit before tax excl i.a.c. 165 MSEK Return on Equity excl. i.a.c 15% Collection performance of 103% Outlook Strong transaction market growth Stabilised front book returns Decisions taken on long and short term initiatives to increase operational efficiency 15% Return on equity excl i.a.c. Q Profit before tax excl i.a.c Q2 2018, MSEK +198% Portfolio acquisitions, YoY 5

6 Our overarching goals Top 3 position in priority markets Provide investors with attractive returns Leading operational efficiency 6

7 Our position Capital market funding Diversified funding base Complexity and diversification Focus and specialisation Unregulated Regulated 7

8 WACD Hoist Finance has the lowest cost of funding among the peer group Weighted average cost of debt (WACD) Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Net debt / LTM adjusted EBITDA 3.2x 3.6x 5.2x 4.1x 3.4x Net debt / Tangible equity 24% 84% (51%) (14%) 46% 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% Peer 6 Peer 5 Peer 1 Peer 2 Peer 3 Peer 4 Peer 7 Peer 6 Peer 7 Peer 8 ~1,2% 0,0% 2,0% 4,0% 6,0% 8,0% 10,0% 2.0x 4.0x 3.9x 4.0x Listed peers Privately-owned peers Bubble size represents ERC Note: Numbers latest disclosed by the peers. Hoist Finance numbers exclude AT1. Hoist Finance adjusted for IACs Source: Company reports, Bloomberg 98% (4%) (31%) 23% 3.0% 2.0% 1.0% Peer 8 0.0% 1.5x 2.0x 2.5x 3.0x 3.5x 4.0x 4.5x 5.0x 5.5x 6.0x Net debt / LTM adjusted EBITDA 8

9 Today our gap in operational efficiency is compensated by low funding costs, giving us a big potential to outperform by improving operations Earnings before tax margin (including interest expense) 22% 21% Peer average Gap in operational efficiency vs. peers Funding cost advantage vs. peers Hoist Finance

10 Cornerstones of our strategy aiming to increase operational efficiency Clear focus on prioritised markets to leverage benefits of scale and reduce complexity Expansion into new asset classes for profitable growth Effective and efficient operating model Banking licence is a competitive advantage 1 One Hoist Finance Unique funding Market leadership Financial Institutions Knowledge driven Digital leader 10

11 One Hoist Finance to improve operational efficiency Key message Operating as one company Standardization and harmonization instead of duplication Initiatives Simplified operating model with fewer layers and strong functional responsibility Implementing revised legal structure and converting subsidiaries to branches Site consolidation in Germany and potentially the UK Process initiated to establish shared services in low cost jurisdiction taken First steps taken to identify savings through procurement 1 One Hoist Finance Unique funding Market leadership Digital leader Financial Institutions Knowledge driven Benefits Cost/income ratio 11

12 Market leadership and specialisation to secure economies of scale Key message Focused and at scale in priority markets targeting 80 % of European transaction volumes Diversified across asset classes in priority markets Specialised leader in FI originated debt Initiatives Built competence and established teams in new asset classes 1 One Hoist Finance Market leadership Financial Institutions Continue to build out capabilities to price and assess opportunities in new asset classes Expand services to meet the full spectrum of client needs Unique funding Knowledge driven Benefits Digital leader Operating leverage Specialisation and reduced complexity Cost/income ratio 12

13 Harmonised and efficient ways of working Key message Best in class ways of working in terms efficiency and effectiveness Strengthened functional capabilities and sharing of best practices Initiatives Unified data model and standardised KPI s 1 One Hoist Finance Market leadership Financial Institutions Centre of expertise in core collection strategies and campaign management Standardised best practise systems Unique funding Knowledge driven Standardised core processes Benefits Harmonised way of working Increased collection performance Digital leader Cost/income ratio 13

14 Maintain competitive advantage by being regulated Key message Maintain competitive advantage of unique deposit funding Offer unique value proposition and offering to customers enabled through bank license Leading stability and best equipped to be best positioned in capital constrained environments Initiatives Expand deposit offering 1 One Hoist Finance Market leadership Financial Institutions Maintain Baa3 rating Highest level of ethics and regulatory compliance Unique funding Knowledge driven Benefits Digital leader Low funding costs Cost/income ratio 14

15 Digitalisation Key message Spearhead industry development and use of digital and analytics Leverage digital capabilities that to enable unique value to our partners Initiatives Cloud based diallers in all jurisdictions 1 One Hoist Finance Market leadership Financial Institutions Centre of expertise in big data/machine learning End-to-end service self-service and omni-channel support Harmonised core collection platform Improved segmentation, customer personas and scorecards Benefits Unique funding Digital leader Knowledge driven Increased number of instalment plans through self service channel Increased customer engagement Cost/income ratio 15

16 Initial review indicates MSEK or more in cost savings during the next three years taking the C/I-ratio below 70% 1 One Hoist Finance Market leadership Financial Institutions Over the next three years achieve Cost savings and cost avoidance of at least MSEK Unique funding Knowledge driven C/I-ratio below 70% Digital leader 16

17 2 Financial update 17

18 Financial summary SEK million Q Q Change, % Net interest income n/a Net operating income % Total operating expenses % Net operating profit % Profit from participations in joint ventures % Profit before tax % Ratios Q Q Change pp Net operating income Portfolio growth contribution Total expenses impacted by 24 MSEK in items affecting comparability Strong portfolio acquisition concentrated to end of the quarter Return on Equity, % 12% 10% 2 pp Cost/Income ratio, % 79% 81% -2 pp EBIT-margin, % 30% 35% -5 pp Volumes, SEKbn Q Q Change, % Carrying value on acquired loan portfolios 17,8 15,0 18% ERC (120-month) 25,7 24,0 7% 18

19 Operational efficiency Cost/Income ratio, % 100% 90% 83% 81% 79% C/I-ratio 80% 76% 74% 71% 70% C/I-ratio excl i.a.c. 70% 75% 75% 71% 72% 74% 75% 70% 60% 50% FY Q Q Q Q Q Q2 Increased capabilities in other asset classes Advisory costs Cost mitigating efforts in progress Site consolidation Project portfolio review SEK million Q Q Change, % Personnel expenses % Collection costs % Administrative expenses % Depreciation and amortisation % Total operating expenses % 19

20 Financial summary segments 1 Acquired loan portfolios, SEKbn 2 Net operating income, SEKm 3 Profit before tax, SEKm 1% 14% 17% 12% 29% 26% 8% 33% 16% SEK 17,8bn 13% SEK 648m 9% SEK 141m 13% 27% 14% 30% 38% Country Q Q Change (%) UK 5,099 4,056 26% Italy 4,823 3,032 59% Germany 2,269 1,917 18% Poland 2,848 1,519 87% Other segments 2,492 2,313 8% Central functions % Total 17,176 13,079 36% Country Q Q Change (%) UK % Italy % Germany % Poland % Other segments % Central functions and eliminations % Total % Country Q Q Change (%) UK % Italy % Germany % Poland % Other segments 25 1 >100% Central functions and eliminations % Total % 20

21 Funding and funding costs Funding excluding equity and AT1-capital, SEKbn SEKbn % 25 2,0% 1,16% 1,72% 1,8% 20 1,6% 1,4% 15 1,2% 1,0% 10 0,8% 0,6% 5 0,4% 0,2% 0 0,0% Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Deposits Senior unsecured debt Subordinated liabilities Commercial Paper Average cost of funding, % Key takeaways Established commercial paper program AT1-issue and buy-back Deposits in euro, 22 per cent of total deposits Interest expenses/book value well below 2% Interest expense/ Book value 2,3% 2,2% 2,1% 2,2% 1,9% 1,7% 1,5% 1,4% 21

22 Capital and liquidity ratios Capitalisation, % Capital ratios, % Liquidity reserve 31 Dec Jun ,7% 18,0% 31 Dec Jun 2018 CET1-Target 7,9% 3,3% 11,1% 11,7% 11,1% 13,6% 14,2% Regulatory capital requirement Margin above capital requirement CET1-ratio Common Equity Tier 1 capital ratio Tier 1 capital ratio Total capital ratio 22

23 3 Summary and key take aways 23

24 Summary and key take aways 1 Strong growth and continued expansion into newer asset classes +37% Portfolio growth LTM 2 Further diversification of funding base and strenghtening of Tier1 capital 17,8 Carrying value Q2 2018, SEKbn 3 Several initiatives launched to increase operational efficiency 11,13% Q CET1-ratio 24

25 Appendix 25

26 Adjusted EBITDA Adjusted EBITDA reconciliation SEK million Q Q Full year 2017 Net profit for the period income taxes /- net result from financial transactions interest expense interest income (excl. interest from run-off performing portfolio) portfolio revaluations /- impairment gains and losses depreciation and amortisation EBITDA Adjusted EBITDA, excl i.a.c. development SEK million amortisation on run-off portfolio amortisation on acquired loan portfolios 553 2,244 + gross cash collections on acquired loan 1,395 portfolios - Interest income on acquired loan portfolios -672 Adjusted EBITDA , Q Q Q Q Q

27 The share Share price development since IPO - March 25, 2015, to June 30, 2018 HOFI OMXSPI +12,9% +4,4% Largest shareholders ( ) Swedbank Robur Funds 9.7 Carve Capital AB 9.7 Zeres Capital 8.6 Handelsbanken Funds 8.5 Didner & Gerge Funds 6.2 Jörgen Olsson private and company 4.1 Danske Invest Funds 3.4 Svenskt Näringsliv 2.8 Holberg 2.7 Carnegie Funds 2.7 Geographical Split Norway 3% United States 6% Denmark 2% France 1% Other 4% % Sweden 84% March 25, Jun 30,

28 Investor Relations Most recent stock recommendations Date Institution Recommendation TP Nordea Buy SEK Carnegie Buy SEK 83 Recommendations Buy Hold Sell Analyst coverage Institution Analyst Carnegie Viktor Lindeberg Citi Investment Research Owen Jones Morgan Stanley Anil Sharma Nordea Markets Ermin Keric Pareto Securities Vegard Toverud Selected Investor Relations events in 2018 Carnegie Small & Mid Cap Seminar, Stockholm 5 August Nordea Small & Mid Cap Seminar, Stockholm 16 August Jefferies 2018 Specialty Finance Summit, London, 19 September NPL meeting, Venice, 28 September For more information: Web: ir.hoistfinance.com/en Head of Investor Relations: Michel Fischier michel.fischier@hoistfinance.com +46 (0)

29 This is Hoist Finance Focus on acquisition and management of bank-originated non-performing loans Pan-European debt restructuring partner licensed and supervised by the SFSA Helping people keep their commitments The Hoist Way 1. Contact 2. Open Dialogue 3. Agreement Solid business model with over 20 years experience Scalable business model delivering strong financial returns SEK million Change Total revenue % EBT* % Return on Equity*, % pp *Excluding items affecting comparability amounting to 118 MSEK. 29

30 VISION Helping people keep their commitments POSITION Hoist Finance is a trusted partner to financial institutions MISSION Our mission Your trust VALUES TRUST Transparency, Results, Uniqueness, Skills and Teamwork 30

31 Our Mission Your Trust