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EBIT Increase: 45% increase year-over-year.
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Servicing Margin: Improved from 12% to 18% year-over-year.
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Cost Savings: SEK1.1 billion realized out of SEK1.5 billion target.
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Leverage Ratio: 4.2 in the quarter, compared to 4.4 a year ago.
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Investment Collections: 98% in the quarter, 100% year-to-date.
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Investment IRR: 20% on SEK311 million invested.
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Net Debt: Slight increase due to timing of interest payments and investments.
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Goodwill Write-down: SEK700 million, mainly in UK and Norway.
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Cost Reduction: 8% decrease year-over-year.
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Cash and Cash Equivalents: SEK3.4 billion.
Release Date: October 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Intrum AB (ITJTY) reported a significant increase in EBIT margin, rising from 12% to 18% year-over-year, indicating improved operational efficiency.
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The company achieved a 45% increase in EBIT compared to the previous year, showcasing strong financial performance despite a seasonally weak quarter.
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Intrum AB (ITJTY) has successfully transitioned its investing business, with collections at 98% for the quarter and 106% against original forecasts, demonstrating effective portfolio management.
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The company has identified SEK1.5 billion in run-rate cost savings, with SEK1.1 billion already realized, reflecting a strong focus on cost efficiency.
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Intrum AB (ITJTY) has made progress in its recapitalization efforts, with overwhelming creditor support for a prepackaged Chapter 11 plan, ensuring a more stable capital structure moving forward.
Negative Points
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The third quarter was slightly behind expectations due to seasonal weaknesses, impacting overall performance.
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Goodwill write-downs of SEK700 million were recorded, primarily related to the UK and Norway, affecting the company's financial results.
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The company's leverage ratio increased to 4.2 from 3.9 in the previous quarter, indicating higher financial risk.
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Investment in the quarter was lower than anticipated at SEK311 million, below the target run rate, potentially impacting future growth.
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Organic growth in servicing was negative, particularly in Southern Europe, posing challenges to offsetting declines in other regions.
Q & A Highlights
Q: Can you provide details on the 98% portfolio collections performance and whether this underperformance is a one-off or a trend? A: The 98% collection rate is slightly below our active forecast but is 106% against historical forecasts. The underperformance is concentrated in a few portfolios, particularly in Portugal and another Southern European country. We are addressing these issues by deploying more resources and expect to return to around 100% by year-end. (Andres Rubio, CEO)