Q3 and nine months report January – September 2024

Active asset management and solid collections

Highlights third quarter 2024

• Gross ERC at the end of September 2024 was EUR 310m (280 at December 2023)
• Gross collections amounted to EUR 13.8m (9.1)*
• Net collections amounted to EUR 11.0m (8.1)*
• Cash EBITDA amounted to EUR 8.3m (3.8)*

Highlights nine months 2024

• Gross collections amounted to EUR 39.4m (39.4)*
• Net collections amounted to EUR 32.5m (34.5)*
• Cash EBITDA amounted to EUR 20.0m (22.0)*
• Erik Fällström appointed as CEO, replacing Razvan Munteanu

Significant events after the end of the quarter

• Sivers Semiconductors AB decided to pause discussions with byNordic Acquisition Corporation regarding a proposed merger of the Sivers’ Photonics AI unit and byNordic SPAC
• DDM Debt AB successfully issued super senior secured bonds of EUR 25m

* Key financial highlights above include non-IFRS alternative performance measures that represent underlying business performance.

Comment by the CEO

During the third quarter of 2024 we have been working hard on managing our asset portfolio, with significant efforts made towards exiting certain historical assets going forward, and we are confident that these efforts will come into fruition in the first half of 2025 depending on market conditions. While our primary focus remains on investing in and managing non-performing loan portfolios, we also actively pursue related and complementary investments.

Following DDM Debt’s investments in Sivers Semiconductors AB (“Sivers”) in H1 2024, in August it was announced that Sivers has entered into a non-binding letter of intent to merge its Photonics AI subsidiary with byNordic Acquisition Corporation (“byNordic”), a publicly-traded special purpose acquisition company. However, on 11 November Sivers announced that it had decided to pause discussions with byNordic Acquisition Corporation regarding a proposed merger. The DDM Debt Group currently indirectly holds approximately 30% of sponsor shares in byNordic Acquisition Corporation.

The DDM Debt Group’s first hearing of the case against Alta Pay Group d.o.o., a Serbian bank, regarding the sale approximately 1.34 million shares in Addiko Bank AG was held on 27 September 2024. Currently the Board is of the view that the case will result in a positive outcome for the DDM Debt Group.

DDM Debt AB has appointed Forvis Mazars (”Mazars”) as auditor for the Company, with the authorized public accountant Åsa Thelin as auditor in charge. Mazars have replaced PricewaterhouseCoopers (“PwC”) (auditor in charge, Sussanne Sundvall), following Sussanne Sundvall’s retirement from PwC. 

On 29 November 2024 DDM Debt AB announced that it had successfully issued super senior secured fixed rate bonds (the “Bonds”) of EUR 25 million. The Bonds have a final maturity date of 30 March 2027 and carry a fixed rate coupon of 9.50 per cent per annum. The Bonds are permitted under the current senior secured bond framework (ISIN: SE0015797683) (the “Existing Bonds”), and the proceeds will mainly be used to finance the acquisition of Existing Bonds by way of a reverse Dutch auction, and to repay the current Revolving Credit Facility of EUR 4.5m with a Swedish bank. The remaining proceeds will be used for transaction costs and for general corporate purposes.

Outlook

Continuing credit risks, along with refinancing risks particularly in the commercial real estate segment, are expected to potentially increase loan portfolio sale activity. As result of the low NPL ratios and the healthy capital adequacy ratios in the SCEE region, banks can approach portfolio sales from a tactical perspective rather than a crisis response, which may result in a steady pipeline of smaller, but continuous NPL portfolio deals. The consolidation dynamics started in the credit servicer industry may also accelerate the deal flow in the short term via secondary loan portfolio sales. We will continue to monitor investment cases on both a strategic and opportunistic basis, as well as actively managing our portfolio. 

Financial calendar

DDM Debt AB (publ) intends to publish financial information on the following dates:

Q4 report for January – December 2024:       28 February 2025

Annual report 2024:                                        30 April 2025

Other financial information from DDM is available on DDM’s website, www.ddm-group.ch.

Presentation of the report

The report is available at www.ddm-group.ch on 29 November 2024, at 17:40 CET.

The information in this report requires DDM Debt AB (publ) to publish the information in accordance with the EU Market Abuse Regulation and the Securities Market Act. The information was submitted for publication on 29 November 2024 at 17:40 CET.

For more information, please contact:

Mail: investor@ddm-group.ch

DDM Debt AB (publ) (Nasdaq Stockholm: DDM Debt 2026) is part of the DDM Group, a specialized multinational investor in situations arising out of the general strategic challenges in the European banking markets. This includes investments into assets and companies previously held by financial institutions, including performing and non-performing loans and special situations. The DDM Debt Group also engages in businesses that are related, complimentary, incidental, ancillary or similar to any of the foregoing. DDM strives to create value for its stakeholders by combining significant expertise in financial services, credit underwriting and technology with a focus on operational excellence.