In This Article:
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EBIT Increase: 26% year-on-year and quarter-on-quarter increase.
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Servicing Margin: 30% in Q4 2024, up from 23% in the prior year.
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Collections Performance: 103% for Q4 2024 and 101% for the full year against active forecast; 110% and 111% against original forecast for the quarter and year, respectively.
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Book Size: SEK25 billion, down from approximately SEK35-36 billion a year ago.
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Investment in Quarter: Over SEK500 billion with an elevated IRR.
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Leverage Ratio: Increased to 4.5.
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Net Income: Minus SEK767 million for Q4 2024.
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Cash and Cash Equivalents: SEK2.5 billion at year-end.
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Cost Reduction: FTE reduction of 1,745 year-on-year.
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Servicing AUM Growth: From SEK1.3 trillion in 2023 to SEK1.621 trillion in 2024.
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CapEx Deployed: SEK512 million in Q4 2024.
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Interest Rate Sensitivity: Around SEK500 million.
Release Date: January 30, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Intrum AB (ITJTQ) reported a strong fourth quarter with a 26% year-on-year EBIT increase, marking the second strongest servicing quarter in five years.
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The company achieved a significant margin improvement, with a fourth-quarter margin of 30%, up from 23% the previous year.
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Collections performance exceeded forecasts, with a 103% collection rate for the quarter and 101% for the year against active forecasts.
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Intrum AB (ITJTQ) continues to invest strategically, with over SEK500 billion invested in the quarter, achieving elevated IRRs compared to historical averages.
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The company is making progress in its transformation into a technology-driven collections company, with successful rollouts of new technology initiatives in major markets.
Negative Points
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The leverage ratio increased to 4.5, higher than expected, due to structural factors and discontinued operations affecting comparables.
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Southern Europe continues to face a structural decline in assets under management, impacting business performance in the region.
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Items affecting comparability (IACs) remain a concern, with significant write-downs related to intangibles and restructuring costs.
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The company's net income remains negative, with a reported loss of SEK767 million for the quarter.
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The conversion rate in servicing declined slightly, attributed to changes in business mix and pricing optimization challenges.
Q & A Highlights
Q: Can you provide more details on the items affecting comparability in Southern Europe, particularly regarding the Spanish service contract? A: We have some service contracts where we paid an upfront fee, and one in Spain wasn't amortized in line with revenue collection. We did a catch-up write-down to better reflect the remaining revenue. Additionally, there were restructuring and integration costs, mainly in Spain, contributing to the items affecting comparability.