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Year-end release 2010

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Fourth quarter 2010

  • Consolidated revenues for the fourth quarter of 2010 amounted to SEK 965.4 M (1,046.3), a decline of 7.7 percent. Currency effects amounted to -7.5 percent. Organic growth was -0.2 percent (1.6).
  • Operating earnings (EBIT) amounted to SEK 181.8 M (206.1) including costs for acquisitions and regional restructuring of SEK -24.8 M. Revenues and operating earnings include net Purchased Debt revaluations of SEK 5.4 M (-3.7). Excluding these items, the operating margin was 21.0 percent (20.0).
  • Adjusted for costs for acquisitions and regional restructuring in the quarter EBIT amounted to SEK 206.6 M (206.1). Taking currency effects into account this corresponds to an increase by 7.1 percent.
  • Aktiv Kapital's Nordic credit management operations and Nice Invest Nordic, a company that acquires written off debt from Swedish mail-order companies, were acquired during the quarter.
  • Net earnings for the fourth quarter amounted to SEK 121.4 M (138.7) and earnings per share were SEK 1.52 (1.74).
  • Disbursements for investments in Purchased Debt amounted to SEK 417.4 M (211.3), an increase of 97.5 percent.
  • Consolidated revenues for the 2010 full-year amounted to SEK 3,766.0 M (4,127.8), a decline of 8.8 percent. Currency effects amounted to -7.1 percent. Organic growth was -0.8 percent (3.9).
  • Operating earnings (EBIT) amounted to SEK 730.6 M (668.2) including costs for acquisitions and regional restructuring of SEK -24.8 M (-70.1). Revenues and operating earnings include net Purchased Debt revaluations of SEK 3.2 M (-35.7). Excluding these items, the operating margin was 20.0 percent (18.6).
  • Net earnings for the year amounted to SEK 452.0 M (440.6) and earnings per share were SEK 5.67 (5.53).
  • Disbursements for investments in Purchased Debt amounted to SEK 1,049.6 M (870.6), an increase of 20.6 percent.
  • Cash-flow from operations amounted to SEK 1,629.8 M (1,433.4)
  • The Board of Directors proposes a dividend of SEK 4.10 per share, totaling SEK 328 M.

Full-year 2010
  • Consolidated revenues for the 2010 full-year amounted to SEK 3,766.0 M (4,127.8), a decline of 8.8 percent. Currency effects amounted to -7.1 percent. Organic growth was -0.8 percent (3.9).
  • Operating earnings (EBIT) amounted to SEK 730.6 M (668.2) including costs for acquisitions and regional restructuring of SEK -24.8 M (-70.1). Revenues and operating earnings include net Purchased Debt revaluations of SEK 3.2 M (-35.7). Excluding these items, the operating margin was 20.0 percent (18.6).
  • Net earnings for the year amounted to SEK 452.0 M (440.6) and earnings per share were SEK 5.67 (5.53).
  • Disbursements for investments in Purchased Debt amounted to SEK 1,049.6 M (870.6), an increase of 20.6 percent.
  • Cash-flow from operations amounted to SEK 1,629.8 M (1,433.4)
  • The Board of Directors proposes a dividend of SEK 4.10 per share, totaling SEK 328 M.

Comment by CEO & President Lars Wollung

In the fourth quarter, operating earnings rose by 7 percent adjusted for currency effects and costs related to acquisitions and regional restructuring. Cash flow from operations in the full year increased by 14 percent to SEK 1,630 M. The Board of Directors proposes a dividend of SEK 4.10 per share to our owners. I am pleased with the development of our operations and take a confident view of the challenges that await us in 2011.

In the fourth quarter, we implemented the final planned change in our organization and we now have a strong structure with three geographical regions. We worked hard throughout the year to adapt our cost structure to the prevailing market climate and we intensified our sales and marketing activities throughout the Group. We have also carried out two strategic acquisitions of which one within Purchased Debt. In total we have doubled our level of investment in Purchased Debt. Intrum Justitia stands well prepared to meet demand for value-adding credit management services throughout Europe.

In our Credit Management service line, currency-adjusted operating earnings rose by 19.8 percent in the fourth quarter and the margin strengthened to 14.6 percent from 12.2 percent in the year-earlier period. The effects of our internal efficiency enhancement efforts, such as cost reductions in Sweden and Switzerland, have allowed our Credit Management operations to develop in a positive direction.

In Purchased Debt, we are seeing a favorable trend in existing portfolios with a return of 18.6 percent for the quarter. In addition, we have been seeing a higher level of activity in the market and our investments in the fourth quarter were 98 percent up on the year-earlier period, totaling SEK 417 M. For the full-year, our investments increased by 21 percent. Today, we have a favorable level of forward-flow contracts, meaning that the prospects are good for continued investment growth in 2011.

In the Northern Europe region (consisting of Denmark, Estonia, Finland, Latvia, Lithuania, Norway, Poland, Russia and Sweden), development has been very good. In the final quarter of the year, we began the integration of the operations acquired from Aktiv Kapital. In the Nordic countries, operations are developing strongly in both Credit Management and Purchased Debt. The acquisitions of Aktiv Kapital’s operations and of Nice Invest Nordic in the fourth quarter contribute to favorable prospects for 2011.

The Central Europe region (consisting of Switzerland, Slovakia, the Czech Republic, Germany, Hungary and Austria) ended the year strongly. Even when adjusted for non-recurring costs in the fourth quarter of 2009, earnings growth was in double digits. Pleasingly, the trend for our operations in Hungary, the Czech Republic and Slovakia has now turned and instead of being well in the red, they are now reporting positive figures.

With the exception of the Netherlands, our third region, Western Europe (Belgium, France, Ireland, Italy, the Netherlands, Portugal, Spain and the UK), developed well in the fourth quarter given the weak macroeconomic trend there. Development was, however, weak in the Netherlands with the quarter being impacted by both restructuring costs and poorer underlying results than in the fourth quarter of 2009. During 2011, we will be adjusting our cost structure and intensifying our sales efforts.

All indicators suggest that demand for services combining traditional Credit Management with Purchased Debt will continue to increase in 2011. As a market leader, with an integrated range of services in these areas, Intrum Justitia benefits by this trend.

The interim report and presentation material are available at www.intrum.com. > Investors. President & CEO Lars Wollung and Chief Financial Officer Bengt Lejdström 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 (0)8 5051 3794 (SE) or +44 (0)20 7806 1967 (UK). Code: 8621845.

For more information, please contact:

Lars Wollung, President and CEO, Tel.: +46 (0)8 546 10 202

Bengt Lejdström, Chief Financial Officer, Tel.: +46 (0)8-546 10 237, mobile: +46 (0)70-274 2200

Annika Billberg, IR & Communications Director, Tel: +46 (0)8 545 10 203, mobile: +46 (0)70 267 9791

Intrum Justitia is Europe’s leading Credit Management Services (CMS) group and offers services designed to measurably improve clients’ cash flows and long-term profitability. Intrum Justitia was founded in 1923, has around 3,100 employees in 22 countries and revenues of approximately SEK 3.8 billion in 2010. Intrum Justitia AB is listed on NASDAQ OMX Stockholm since 2002. For further information, please visit www.intrum.com

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