- Consolidated net revenues for the second quarter of 2016 amounted to SEK 1,475 M (1,476).
- Operating earnings (EBIT) amounted to SEK 474 M (448). The operating earnings include revaluations of purchased debt portfolios amounting to SEK 17 M (45). The operating margin excluding revaluations was 31 percent (28).
- Net earnings for the quarter amounted to SEK 354 M (324) and earnings per share were SEK 4.85 (4.38).
- Cash flow from operating activities amounted to SEK 695 M (739).
- The carrying amount of purchased debt has increased by 19 percent compared with the second quarter of 2015. Investments in purchased debt during the quarter amounted to SEK 550 M (509).
COMMENT BY PRESIDENT AND CEO MIKAEL ERICSON
Intrum Justitia continued to perform very well during the second quarter 2016. We achieved all of our financial targets for growth in earnings per share, return on purchased debt and capital structure. Earnings per share rose by 11 percent over the quarter, and by 11 percent over the past 12 months, which is slightly above our target of 10-percent annual growth. Over the quarter, we also increased our financial flexibility by issuing bonds of EUR 160 M to Svensk Exportkredit, which strengthens our preparedness for capturing future investment opportunities.
Our operational development is good, with an increase in operating earnings, excluding revaluations and currency effects of 15 percent for the second quarter. Geographically, our development is stable, with all three of our regions reporting improved operating profit and operating margins, adjusted for currency effects and revaluations. Among our service lines, earnings improved well in both Financial Services and Credit Management. Within Financial Services, operating earnings improved due to growth in acquisitions of purchased debt portfolios over the past 12 months. The return on purchased debt decreased compared with the year-earlier period, due to continued price pressure, although it reached a favorable level of 19 percent excluding revaluations. Investments in purchased debt amounted to SEK 2.7 billion for the twelve-month period ending as of the second quarter 2016, against SEK 1.7 billion for the twelve-month period ending as of the second quarter 2015. In Credit Management, we are increasing our operating earnings, primarily through tight cost control and positive effects from acquisitions.
In our efforts to promote a healthy economy, on April 19, Intrum Justitia signed the United Nations’ “Global Compact”. Intrum Justitia thereby undertakes to work to integrate the ten principles of human rights, labor rights, environmental work and anti-corruption that the Global Compact encompasses, and to submit an annual report describing how our Group follows these principles. In addition, we will continue our efforts to contribute to sustainable Business by improving our customers’ competitiveness to increase employment and help debt-burdened consumers achieve a better life by, for example, facilitating the settlement of debts at a pace suited to the individual.
Despite certain increased political turmoil in Europe following “Brexit”, my view of Intrum Justitia’s future potential remains positive, with us achieving value-building growth in line with our objective of increasing our earnings per share by at least 10 percent per year. Market conditions are generally good, particularly in terms of the ample supply of debt portfolios and acquisition opportunities in Credit Management. We have a proven and effective strategy whereby, growth in purchased debt, continuous improvements in operational efficiency and value-creating acquisitions form the cornerstones for years to come.
PRESENTATION OF THE INTERIM REPORT
The interim report and presentation material are available at https://www.intrum.com/en/investor-relations/. President & CEO Mikael Ericson and Chief Financial Officer Erik Forsberg will comment on the report at a teleconference today, starting at 9:00 a.m. CET. The presentation can be followed at www.intrum.com and/or www.financialhearings.com. To participate by phone, call +46 566,426 98 (SE) or +44 20 300 898 01 (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
The information in this interim report is such that Intrum Justitia AB (publ) is required to disclose pursuant to the Securities Markets Act. The information was released for publication on July 19, 2016 at 7:00 a.m. CET.