Axactor Q1 2018 - The growth story continues
Highlights from the first quarter of 2018
Gross Revenue of EUR 41.0 million (19.7), representing a 108 % growth y/y
EBITDA of EUR 6.1 million (1.0)
Cash EBITDA of EUR 18.1 million (3.6)
Portfolio investments of EUR 92 million for the quarter, whereof EUR 45 million invested in REOs
Acquired portfolio from Santander Consumer Finance, with total outstanding balance of EUR 133 million
Acquired a REO portfolio from the financial institution Cajamar, with an appraisal value of more than EUR 26 million and approximately 650 assets
Acquired a combined portfolio from a large Spanish financial group, consisting of a REO segment and an unsecured consumer loans segment
Passed EUR 1 billion in ERC (Estimated Remaining Collection)
Completion of a EUR 150 million bond issue with maturity in June 2021
In the first quarter of 2018, Axactor achieved an EBITDA of EUR 6.1 million and Cash EBITDA of EUR 18.1 million, compared to an EBITDA of EUR 1.0 million and a Cash EBITDA of EUR 3.6 million in the corresponding quarter of 2017. Gross revenue for the quarter once again ended record high at EUR 41.0 million, which is 108% above the corresponding number for the same period in 2017, and a 19% growth compared to the fourth quarter of 2017. Thus, the growth story of Axactor continues.
The first quarter of the year is generally characterized by low activity in the market for portfolio acquisitions. Still, Axactor won portfolios with a total investment of EUR 92 million in NPL and REO portfolios during the quarter, whereof EUR 45 million was invested in REOs - a segment Axactor entered for the first time in 2017.
While NPL portfolios continue to be the largest segment in terms of gross revenue, REO portfolios has been established as a major business segment for Axactor during the last two quarters, accounting for 21% of the total gross revenue by end of the first quarter of 2018. In March, Axactor acquired two REO portfolios in Spain, whereas one was acquired from Spanish Cajamar and had an appraisal value of more than EUR 26 million.
"Our improved profitability comes through a combination of higher volumes and improved scale and skill benefits, in lines with our ambitions. In a traditionally quiet period of the year, we were able to do portfolio investments at a level that brought the ERC (Estimated Remaining Collection) to more than EUR 1 billion for the first time," says Endre Rangnes, CEO of Axactor.
The largest transaction in the quarter was a bilateral deal where Axactor acquired a bundled portfolio of unsecured NPL claims and REOs. The total capex was close to EUR 40 million and was done through the investment companies co-owned with Geveran Trading.
"This combined transaction confirms our ability to leverage on our communicated strategy of building strong relationships with key financial institutions in the markets where Axactor is present. These relationships put us in a unique position where we get access to portfolios not sold in the open market," says Rangnes.
Two new forward flow contracts were signed during the quarter in Norway and Sweden, respectively, further securing future NPL volumes. Axactor experiences great interest from Nordic banks in doing forward flow agreements, in parallel with larger one-off NPLs.
Accounts Receivable Management (ARM) is currently being rolled out as a business segment throughout the Group. The Norwegian business shows modest growth, and the product is now ready for the Swedish and German market. The ARM segment contributed MEUR 1.5, or 4% of the total gross revenue for the first quarter of 2018.
Axactor see attractive investment opportunities in the Spanish REO market and expect to deploy additional capital to this market going forward. The market for purchase of NPL portfolios remains strong and Axactor see attractive opportunities especially in Spain, but also in Italy, Germany and the Nordics.
In order to fund the company's continued growth, Axactor successfully issued a EUR 150 million senior unsecured bond in Q1 2018. In addition, Axactor has signed a mandate letter and term sheet with a global bank with a view to enhance the investment capacity in the REO segment. Combined with Axactor´s existing bank facilities, this transaction (should it be completed) ensures that Axactor is in a good position to acquire new portfolios going forward.
Oslo, 3 May 2018
For additional information, please contact:
Endre Rangnes, CEO Axactor
Mobile phone: +47 4822 1111
Johnny Tsolis, CFO & Investor Relations, Axactor
Mobile phone: +47 9133 5461
Axactor Group specializes in both Debt Collection and Debt Purchasing across several countries, with operations in Italy, Germany, Norway, Sweden and Spain. The company has a Nordic base and an ambitious Pan-European growth strategy, which targets the market for non-performing loans (NPL) in Europe. This market is estimated to be about 1,500 billion euros across Europe providing significant opportunities for Axactor's future expansion. Axactor has approximately 950 employees.