FIRST QUARTER 2017
• Consolidated net revenues for the first quarter of 2017 amounted to SEK 1,609 M (1,408).
• Operating earnings (EBIT) amounted to SEK 480 M (428). Operating earnings include revaluations of purchased debt portfolios by SEK 0 M (5) and non-recurring expenses for the planned merger with Lindorff of SEK 17 M. The operating margin excluding revaluations was 30 percent (30).
• Net earnings for the quarter amounted to SEK 347 M (310) and earnings per share were SEK 4.77 (4.26).
• Cash flow from operating activities amounted to SEK 707 M (730).
• The carrying value of purchased debt has increased by 43 percent compared with the first quarter of 2016. Investments in purchased debt for the quarter amounted to SEK 2,377 M (738), of which SEK 1,334 M relates to receivable purchased through the acquisition of 1st Credit. Return on purchased debt was 17 percent (20).
COMMENT BY PRESIDENT AND CEO MIKAEL ERICSON
Intrum Justitia continued to perform well in the first quarter of 2017, with strong earnings growth and a high level of investment activity. We achieved all of our three financial targets for growth in earnings per share, return on purchased debt and capital structure. Earnings per share rose by 12 percent in the quarter and have risen by 22 percent over the past 12 months.
Consolidated operating earnings rose by 12 percent compared with the corresponding period in the preceding year. The improvement is primarily attributable to Financial Services and the increased levels of investment in purchased debt with good returns. The Credit Management service line also experienced favorable development with good growth and stable margins. In our regions, we experienced strong development in Central Europe. The major investments made in this region over the past six months, mainly the purchase of a debt portfolio of covered debt and an acquisition in the UK, developed in line with our expectations.
We had a continued high level of investment activity in the first months of the year, as a result of favorable market conditions and our ability to take advantage of the Group’s broad geographical presence in different customer segments and different asset classes. In Purchased Debt, excluding the previously announced acquisition in the UK, we increased the level of investment in the first quarter to approximately SEK 1 billion, compared with SEK 700 M in the corresponding period last year. In Credit Management, we are continuing our strategy of growth through acquisitions, carrying out two investments in France. Finally, we announced in April that we are strengthening our presence in Eastern Europe through the acquisition of a company in Romania.
During the first quarter, we continued to prepare for the planned merger with Lindorff. An application for the planned merger was submitted to the European Commission in April and the objective remains of completing the transaction in the second quarter of 2017.
We are continuing our drive to further develop our work in terms of sustainability and sound economy. In April, Intrum Justitia completed its first report to the UN Global Compact following the first year as a signatory to the ten principles for a sustainable society. The report is available on our website. Another example of the Group’s sustainability work in the first quarter, was the initiative in developing a code for sound payment periods in Swedish business. Intrum Justitia is driving work on the code, partnering with several Swedish business organizations to influence both policy makers and players in the business community to encourage companies no to pressure their suppliers to accept longer payment terms than the current practice of 30 days and to pay within the agreed credit period.
Intrum Justitia offers companies the most competitive solutions in credit management and financial services, whereby our customers are afforded more resources to be able to focus on their core business. Geographically, we can offer customers solutions in more countries than any competitor, through our presence in 21 countries in Europe. Our performance in the first months confirms our strong business model and the confidence of our customer base. The Group’s prospects for sustained, profitable growth over the upcoming years are good.
PRESENTATION OF THE INTERIM REPORT
The year-end report and presentation materials are available at www.intrum.com > Investor relations. President & CEO Mikael Ericson and Chief Financial Officer Erik Forsberg will comment on the report at a teleconference January 25, starting at 9:00 CET. The presentation can be followed at www.intrum.com and/or www.financialhearings.com. To participate by phone, call +46 8 566 425 09 (SE) or +44 20 300 898 07 (UK).
FOR FURTHER INFORMATION, PLEASE CONTACT
Mikael Ericson, President and CEO, tel.: +46 8 546 102 02
Erik Forsberg, Chief Financial Officer, tel.: +46 8 546 102 02
Erik Forsberg is the contact under the EU Market Abuse Regulation. This information is such that Intrum Justitia AB (publ) is required to publish under the EU Market Abuse Regulation. The information was provided under the auspices of the contact person above for publication on April 25, 2017 at 7.00 P.M. CET.