Interim report January - June 2005

• Consolidated revenues during the first half year 2005 amounted to SEK 1,358.9 M (1,362.3). • Net earnings for the six-month period January–June amounted to SEK 171.2 M (144.0). • Earnings per share for the first half year 2005 amounted to SEK 1.95 (1.66). • The Group’s operating margin rose to 17.9 percent (14.0). • Cash flow from operating activities improved to SEK 205.5 M (96.8).

“The Intrum Justitia Group developed positively during the second quarter,” said CEO Jan Roxendal in a comment. “We have become more efficient at collecting on behalf of our clients, while we have also decisively increased our investments to purchase portfolios of written-off receivables. Consumer and commercial debt continue to rise throughout Europe and lenders are increasingly seeking out the assistance of professional debt service providers. In addition, we are seeing a greater interest in selling written-off receivables at an earlier stage.” January–June 2005: Revenues and Earnings Consolidated revenues during the period January–June amounted to SEK 1,358.9 M (1,362.3), which includes SEK 18.2 M for the Irish company Legal & Trade Collections for the period November 2004–June 2005. Growth occurred primarily in Finland, Spain, Sweden and Switzerland. An important reason is the Group’s increased focus on Purchased Debt. The Group’s growth was offset by lower volumes in the United Kingdom and Italy. The effect of fluctuations in exchange rates was marginal. Operating earnings amounted to SEK 243.8 M (190.3). The improvement is mainly attributable to England and Germany, where substantial cost cuts were implemented during the period, though also to the Nordic countries. After a weak start in the first quarter, the Netherlands recovered during the second. Earnings before tax for the period increased to SEK 228.2 M (169.4), while net earnings for the period amounted to SEK 171.2 M (144.0). April–June 2005: Revenues and Earnings Consolidated revenues during the period April–June amounted to SEK 713.2 M (681.9), which includes SEK 18.2 M for the Irish company Legal & Trade Collections for the period November 2004–June 2005. Of the 5 percent revenue increase, the acquisition accounted for 3 percentage points, while currency effects and organic growth each accounted for 1 percentage point. The growth occurred primarily in Finland, where collections of written-off receivables were good, and in Sweden, where tax refunds contributed to higher revenues in Debt Surveillance. Revenues in Spain have continued to trend higher, mainly from new and existing clients in Consumer Collection. Operating earnings amounted to SEK 143.9 M (90.4). Much of the improvement was due to cost cuts in England, Germany and the Netherlands. Improved earnings were also achieved in countries that raised their revenues during the period. Earnings before tax for the quarter increased to SEK 138.3 M (80.2), while net earnings for the period amounted to SEK 103.8 M (77.0). Geographic regions, April–June 2005 Sweden, Norway & Denmark The region’s quarterly revenues increased to SEK 171.4 M (154.9) and its operating earnings to SEK 49.7 M (39.1), partly because a portion of this year’s Swedish tax refund was paid out in June and therefore affected the Debt Surveillance service line positively. Volume gains in Denmark and improved collection results in Norway contributed to the region’s higher revenues and earnings. United Kingdom & Ireland The region’s quarterly revenues amounted to SEK 98.3 M (93.7), which includes SEK 18.2 M for the Irish company Legal & Trade Collections for the period November 2004–June 2005. Operating earnings amounted to SEK 0.6 M (–9.1). Added volume from new and existing clients in the UK did not fully compensate for lower volumes from certain major clients in Consumer Collection & Debt Surveillance. The earnings improvement was achieved through cost cuts, mainly from a major staff reduction in the English subsidiary during 2004. Netherlands, Belgium & Germany Second-quarter revenues amounted to SEK 141.3 M (142.7) with operating earnings of SEK 32.1 M (11.4). The Netherlands recovered significantly from the first quarter, mainly thanks to a higher collection rate for telecom clients and to Purchased Debt. Revenues were affected negatively in Germany by the previously terminated unprofitable contracts and lower volumes from key clients in the telecom sector. The earnings improvement is largely due to cost savings in the Netherlands and Germany. Switzerland, Austria & Italy The region’s quarterly revenues amounted to SEK 89.7 M (95.0) with operating earnings of SEK 17.8 M (14.8). The revenue decrease is mainly due to continued weak volume growth in Italy. The gain in earnings, on the other hand, was generated mainly in Switzerland, with a positive trend in Commercial Collection from telecom and media clients as well as further productivity improvements implemented late last year and this year. Finland, Estonia, Latvia & Lithuania Revenues for the report period amounted to SEK 85.7 M (79.1) with operating earnings of SEK 37.5 M (34.0). Higher activity in Purchased Debt in Finland, with purchases of portfolios from customers in the banking and telecom sectors, improved the region’s revenues and earnings. New laws regulating debtor fees that took effect on June 1 had a marginal effect during the second quarter. France, Spain & Portugal The region’s quarterly revenues amounted to SEK 87.8 M (81.1) with operating earnings of SEK 16.5 M (11.9). Regional growth is mainly attributable to Spain and Portugal, where volumes have increased in the telecom, media and banking sectors. A large debt portfolio was acquired in Spain last year, which positively contributed to revenues and earnings. Poland, Czech Republic, Slovakia & Hungary Quarterly revenues amounted to SEK 39.0 M (35.4) with operating earnings of SEK 8.2 M (3.3). Positive development in Hungary and the Czech Republic has raised the region’s revenues and earnings. The recovery has been most evident in Hungary as a result of improved production routines. The Slovakian company Creditexpress was acquired at the end of the period and has not yet had an impact on consolidated revenues or earnings. Since April 2003 there is a 40 percent minority interest in the region’s companies. Purchased Debt service line Service line revenues increased to SEK 78.0 M (57.3) in the second quarter. Earnings also improved, amounting to SEK 31.8 M (20.0). Finland, the Netherlands, Spain, Sweden and Portugal contributed to the service line’s positive development. In accordance with IFRS Intrum Justitia applies an accounting model, where the book value of each portfolio of purchased debt, and thereby the result for the quarter, is based on an estimation of future cash flows which is updated quarterly. The effect on the operating earnings in the second quarter from such estimations was positive, SEK 10.7 M. The Group’s increased focus on this service line, and the resources it invested during the first quarter, have led to higher investment activity, which continued in the second quarter. Investments in portfolios during the first half year 2005 amounted to SEK 254.2 M, against SEK 134.3 M in the corresponding period a year earlier. In several markets, there it is evidence of growing interest in selling portfolios in an earlier phase, which is generating more activity. The Board of Directors has therefore decided to raise the service line’s investment limit from SEK 600 M to SEK 1.2 billion. Expenses The gross profit margin was 43 percent (43) in the second quarter of the year. Sales, marketing and administrative expenses were lower in the second quarter than a year earlier thanks to the continued success of cost controls in a number of countries. Depreciation/amortization Quarterly operating earnings were charged with depreciation/amortization of SEK 23.6 M (27.2). Operating earnings before depreciation/amortization therefore amounted to SEK 167.5 M (117.6). Operating earnings before depreciation/amortization for the first half year were SEK 289.0 M (240.9). Expenses for incentive program Operating earnings for the first half year were charged with SEK 3.8 M (1.2) for warrants for the Group's Employee Stock Option Program 2003/2009. Of this amount, SEK 1.9 M (1.2) was reported in the second quarter. The expense does not represent an actual disbursement by the company. The Employee Stock Option Program comprises warrants to subscribe for 3,358,250 shares. The dilution effect during the first half year, calculated according to IAS 33 Earnings per share, corresponds to 410,728 shares. The Employee Stock Option Program did not dilute earnings for the full year 2004 since the share’s average market value was less than the present value of the option premium. The warrants were allotted in May 2004. Net Financial Items Financial expenses during the second quarter were lower than the corresponding period of 2004 due to lower market interest rates, better loan conditions and a lower debt level. Cash Flow and Investments Cash flow from operating activities amounted to SEK 205.5 M during the first half year, against SEK 96.8 M for the corresponding period of 2004. Share Redemption The Extraordinary General Meeting (EGM) on June 16, 2005 passed a resolution to offer the shareholders to redeem every twelfth share for SEK 84, corresponding to approximately SEK 7 per share. A total of 7,029,353 shares were tendered for redemption, an acceptance level of 99.25 percent. The redemption amount was paid end of June 2005. The EGM also resolved on a directed issue of 7,029,353 redeemable series C shares to Svenska Handelsbanken AB (publ) and the redemption of a corresponding number of shares to fund a payment to the shareholders of SEK 590.5 M through reductions in the share premium reserve and share capital. Court approval of the reduction is expected to be received during the third or fourth quarter of 2005, at which point the number of shares outstanding will be reduced from 84,985,604 to 77,956,251. The redemption of the C shares will reduce the Group's shareholders’ equity and raise its net debt. Financing Net debt as of June 30, 2005 amounted to SEK 542.2 M (before redemption of C shares), compared with SEK 480.2 M at year-end 2004. Shareholders’ equity including the minority share amounted to SEK 1,751.8 M (before redemption of C shares), compared with SEK 1,531.0 M on December 31, 2004. As of June 30, 2005 the Group had liquid assets of SEK 147.0 M, against SEK 338.3 M on December 31, 2004. On June 30, 2005 unutilized credit facilities amounted to SEK 1,442.0 M. The corresponding figure on December 31, 2004 was SEK 385.8 M. Goodwill Consolidated goodwill amounted to SEK 1,588.8 M, against SEK 1,505.8 M at year-end 2004. The change during the first half year is due to fluctuating exchange rates. All goodwill in the Group was tested for impairment at year-end 2004. In the six-month financial statements these tests were updated, but showed no need for write-downs. Human Resources The average number of employees during the half year was 2,863 (2,916). The number of employees decreased mainly in the English subsidiary, while more staff was added in Spain to handle previously outsourced operations. Parent Company The publicly listed parent company, Intrum Justitia AB (publ), owns the subsidiaries, provides the Group’s head office functions, and handles certain Group-wide development, services and marketing activities. The parent company had revenues of SEK 23.1 M (8.0) and reported a pre-tax deficit of SEK –4.5 M (–37.7). The parent company invested SEK 0.3 M (0.3) in fixed assets during the half year and had liquid assets of SEK 0.0 M (0.0) as of June 30. The average number of employees was 22 (20). Acquisitions Intrum Justitia’s acquisition of Legal & Trade Collections (Ireland) Limited in October 2004 has been the subject of a dispute due to an unfulfilled guarantee on the part of the seller, Legal & Trade Financial Services Limited. In June 2005 the Irish High Court ruled that Intrum Justitia will receive a partial refund on the purchase price of the company. The company has now been consolidated in the Intrum Justitia Group retroactively to November 2004. In June 2005 Intrum Justitia acquired the Slovakian company Creditexpress Slovakia s.r.o. for SKK 24.0 M, corresponding to SEK 5.9 M, a third of which was paid when the contract was signed. The company was consolidated as of the acquisition date and in the six-month accounts affects only the consolidated balance sheet. Highlights After Closing Date Intrum Justitia has after the end of the period in a number of countries agreed upon purchases of written-off receivables, primarily bank debt, at a purchase price of more than SEK 400 M. In July 2005 the Polish Securities Exchange Commission approved Intrum Justitia’s application to establish an Investment Fund Society (“IFS”) in Poland. An IFS is important for companies that invest in portfolios of written-off receivables. The Intrum Justitia Share Intrum Justitia’s market capitalization on June 30, 2005 was SEK 4,229 M based on the number of shares after the redemption of C shares. During the period January 1–June 30, 2005 the share price excluding the redemption rose by 5.3 percent, compared with an increase of 11.9 percent for Stockholmsbörsen’s All Share Index. The return for investors who utilized the share redemption was 10.2 percent during the period. The number of shareholders as of June 30, 2005 was 4,200 (3,633). Accounting Principles This is the Intrum Justitia Group’s second interim report according to the International Financial Reporting Standards (IFRS). In accordance with the requirements in the Swedish Financial Accounting Standards Council's recommendation RR 31 Interim reports for groups, the interim report for the Group is prepared according to IAS 34 Interim Financial Reporting. The accounting principles applied in the interim report are described in the Annual Report for 2004 in Note 1 as well as in Note 36 with regard to changes in connection with the introduction of IFRS. Although Intrum Justitia began reporting according to IFRS in 2005, the comparative figures for 2004 are restated to IFRS, so January 1, 2004 is considered Intrum Justitia’s transition date to IFRS. A reconciliation of the estimated effects of IFRS on the consolidated income statement and balance sheet for the first six months and full year 2004, including the effect on deferred tax, is provided in the attachment. The figures in the balance sheet have been adjusted relative to previously released information – also in relation to previous interim report – on the basis of new information. The description of the effects of IFRS and amounts are still preliminary and may change if the IFRS recommendations or their interpretation change during the year. Consolidation and Goodwill As of 2004 the acquisition cost of an acquired subsidiary is eliminated against the net of the market value of the subsidiary's assets and liabilities, including intangible assets such as client relations, cases in progress and internally developed brands. If the market values identified do not correspond to the acquisition cost, goodwill arises. Negative goodwill is not reported, but in such cases is charged against earnings immediately after acquisition. Goodwill is not amortized but is tested for impairment, whereupon the estimated future cash flows from the cash-generating unit are discounted by an interest rate corresponding to the Group's weighted average cost of capital. If the present value less sales expenses calculated in this manner is less than the book value net of the cash-generating unit’s assets and liabilities, goodwill is written down. Financial Assets and Liabilities Intrum Justitia reports financial instruments, including foreign exchange contracts and other derivatives, at fair value. Any changes in fair value are reported in the income statement. At present hedge accounting is not applied. Purchased Debt Purchased debt consists of portfolios of overdue consumer receivables purchased at significantly below their nominal value. Purchased debt is reported according to an effective interest rate method, where the book value of each portfolio corresponds to the present value of all estimated future cash flows discounted by an effective interest rate determined when the portfolio is purchased, based on the relationship between the acquisition cost and estimated future cash flows at the time of acquisition. Changes in the book value of the portfolios are reported in the income statement on the revenue line. Employee Stock Option Program The Annual General Meeting in 2003 approved the adoption of Employee Stock Option Program 2003/2009. Warrants were allocated in May 2004. The theoretical value of the warrants on the date of issue, calculated according to the Black-Scholes model, is accrued over the vesting period (May 2004–December 2006), i.e., the period during which the conditions necessary to exercise the warrants will be met. Reporting Dates The Interim Report for the third quarter (January–September) 2005 will be published on October 26, 2005. The Full Year Report for 2005 will be published on February 15, 2006. Stockholm, August 17, 2005 Intrum Justitia AB (publ) Jan Roxendal President & Chief Executive Officer Auditors’ report We have reviewed the interim report of Intrum Justitia AB (publ) for the six-month period ending June 30, 2005. Our review has been conducted in accordance with the recommendation issued by the Swedish Institute of Authorized Public Accountants. The review has been planned and performed to obtain limited assurance that the interim report is free of material misstatement. A review is largely limited to queries of the company’s personnel and an analytical evaluation of financial data, and our assurance is limited compared to an audit. Nothing has come to our attention during the review that causes us to believe that the interim report does not comply with the requirements for interim reports according to the Annual Accounts Act and IAS 34. Stockholm, August 17, 2005 KMPG Bohlins AB Carl Lindgren Authorized Public Accountant This Interim Report and other financial information are available at Intrum Justitia’s website: www.intrum.com Presentation of the Interim Report This Interim Report and presentation material are available at www.intrum.com > Investors. President & CEO Jan Roxendal and CFO Bo Askvik will comment on the report on a telephone conference today at 10:00 a.m. CET. To participate by telephone, call +44 207 162 0192. A recorded version will be available through August 23, 2005 by telephone +44 207 031 4064, using the code 671 525. For further information, please contact: Jan Roxendal, President & CEO Tel: +46 8 546 10 200 Bo Askvik, Chief Financial Officer Tel: +46 8 546 10 200 Anders Antonsson, Investor Relations Tel: +46 8 546 10 206, mobile: +703 36 78 18