Year-end report 2017
Another successful year closes with strong growth
October – December 2017
• Total revenue increased 11 per cent to SEK 744m (672).
• Items affecting comparability totalled SEK 59m excluding tax.
• Profit before tax excluding items affecting comparability1) amounted to SEK 169m.
• Profit before tax decreased 29 per cent to SEK 110m (155).
• Diluted earnings per share amounted to SEK 0.92 (1.38).
Figures in brackets refer to fourth quarter 2016.
• Total revenue increased 7 per cent to SEK 2,811m (2,627).
• Items affecting comparability totalled SEK 118m excluding tax.
• Profit before tax excluding items affecting comparability1) amounted to SEK 699m.
• Profit before tax increased 9 per cent to SEK 581m (533).
• Diluted earnings per share amounted to SEK 5.09 (4.97).
• Return on equity excluding items affecting comparability1) was 19 per cent.
• Return on equity was 15 per cent (17).
• Carrying value of acquired loan portfolios totalled SEK 15,024m (12,658).
• The total capital ratio was 17.71 per cent (16.76) and the CET1 capital ratio was 11.70 per cent (12.46).
• The Board of Directors proposes a dividend distribution of SEK 1.90 (1.30) per share.
Figures in brackets refer to 31 December 2016.
Events during the quarter
• Hoist Finance reported its largest acquisition volumes for a single quarter, totalling SEK 2,075m.
• Hoist Finance decided to centralise its German operations in Duisburg and its Belgian and Dutch operations in Amsterdam.
• Hoist Finance AB (publ) was granted permission to merge with subsidiary Hoist Kredit AB (publ). The merger was finalised on 2 January 2018.
1) Key figures have been adjusted to show underlying earnings excluding items affecting comparability which arose in connection with the repurchase of subordinated debt and outstanding bonds during second quarter 2017 and with restructuring costs and an adjustment of previous cost accruals during the fourth quarter 2017. For the fourth quarter, these items totalled SEK 59m excluding tax, SEK 58m including tax. For the full year 2017 the corresponding figures were SEK 118m excluding tax, SEK 102m including tax.
Statement by the CEO
Strong growth in the final quarter
We have now closed 2017 and summarise a year with high acquisition volumes. Our pan-European presence, combined with our strong position, resulted in significant business during the year. During the last quarter alone we reached the highest acquisition volumes during a single quarter. This leads to a portfolio growth of 19 per cent seen over the last 12 months.
Market players are consolidating, while existing players are broadening their geographic presence. Taken together, this results in healthy – yet tougher – competition and margin contraction. In such a market, it is important to navigate correctly by making well-founded and long-term investments, both in terms of portfolio acquistions and in investments to develop the company. It is also important to increase focus on cost efficiency in order to be competitive and offer a stronger comprehensive offer to our bank partners.
We therefore decided to restructure the business to reduce our cost base. We also accelerated our digital initiative during the quarter and strengthened our expertise in other asset classes. We are doing this to improve our cost efficiency as we prepare to meet the strong market growth ahead of us.
Profit for the quarter was therefore weaker than we previously planned. This is mainly due to the restructuring of our German and Belgian operations. Our office in Bremen will be closed, with our German operations centralised in Duisburg. We will also be closing our office in Brussels and centralising our presence in Belgium and the Netherlands in Amsterdam. These changes make us more flexible while also adjusting costs as we move forward. During the fourth quarter, restructuring costs totalled SEK 36 million. Profit for the quarter was also charged with an SEK 24 million item affecting comparability for the adjustment of previous cost accruals in Italy.
Adjusted for these items, underlying operating profit is somewhat lower year-on-year, mainly due to a mix of increased revenues but also to the increase in our investments.
Strong investment volumes in all regions
On a regional level the fourth quarter was a strong quarter for acquisitions, with investments exceeding the same quarter last year in all regions. In Italy we continued our expansion in the SME loan market, with another acquisition from Banco BMP.
Operating profit (EBIT) improved in Region West driven by strong portfolio growth and greater cost efficiency. Regions Mid and Central East are reporting comparatively lower operating profit. The negative development in Region Mid is due to the above-referenced cost accruals adjustment, and in Region Central East to the fact that portfolio growth took place late in the year and therefore contributed only marginally to the year’s profit.
We continue to build a company for the future. Banks will have even greater need for support when it comes to non-performing loans and our goal is to be their partner of choice. As I mentioned above, we will increase our focus in the coming year on building the company for the future. We will accelerate investments in digital processes to improve cost efficiency and to expand our customers’ self-service options. We will also invest in the expertise needed to manage and expand in other asset classes, including SME loans and secured loans.
These investments, most of which will contribute to profit in 2019 and onwards, also entail costs in 2018. Our assessment is that this will result in return on equity falling short of our target, in the range of 17–18 per cent range for full-year 2018.
This is my final interim report as Hoist Finance’s CEO, and I will soon be handing over to Klaus-Anders Nysteen. I would like to take this opportunity to extend our warmest welcome to him. I know he is looking forward to continue the work with our ambitious agenda, and that he will be sharing his views on the future once he has joined us and had the opportunity to form an opinion.
Finally, I would like to express my deepest thanks to all of the group’s employees, partners and investors with whom I have had the pleasure of sharing this journey. Together, we have made Hoist Finance the strong, stable company it is today. Onward and upward!
Hoist Finance AB (publ)
Presentation of the interim report
Jörgen Olsson, CEO and Pontus Sardal, CFO will present and comment the report at a teleconference on Tuesday, 13th of February, starting at 9:30 AM (CET).
The presentation can be followed at
To participate by phone Dial-in details for the conference call:
UK: +442030089804 SE: +46850556453 US: +18558315947
For further information please contact:
Michel Fischier, Group Head of IR
Telephone: +46 (0)8 555 177 19
The information in this interim report has been published pursuant to the EU’s Financial Instruments Trading Act and Securities Market Act. This information was submitted for publication on 13 February 2018 at 8:00 AM CET.
Hoist Finance AB (publ) (the “Company” or the “Parent”) is the parent company of the Hoist Finance group of companies (“Hoist Finance”). The Company is a regulated credit market company. Hence, Hoist Finance produces financial statements in accordance with the Swedish Annual Accounts Act for Credit Institutions and Securities Companies. In order to assess the operational performance of the debt purchasing and collection operations and to facilitate comparison with our competitors, Hoist Finance supplements its statutory financial statements with an operating income statement. The operating income statement includes items that have been reclassified relative to the statutory income statement, although valuations and earnings measurements for the two income statements do not differ.
About Hoist Finance
Hoist Finance is a trusted debt restructuring partner to international banks and financial institutions. We are specialised in serving banks in handling non-performing loans, and supporting individuals in becoming debt free. Through expertise and rigorous compliance we earn the banks’ trust. Through respect, honesty and fairness we earn the trust of our customers. For further information, please visit hoistfinance.com.