Investor presentation Q1 2020 Results
May 2020
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Investor presentation Q1 2020 Results May 2020 1 Disclaimer THIS - - PowerPoint PPT Presentation
Investor presentation Q1 2020 Results May 2020 1 Disclaimer THIS PRESENTATION IS NOT AN OFFER OR SOLICITATION OF AN OFFER TO BUY OR SELL SECURITIES. IT IS CONFIDENTIAL AND IT IS FOR INFORMATIONAL PURPOSES ONLY. This presentation and any
May 2020
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Disclaimer
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THIS PRESENTATION IS NOT AN OFFER OR SOLICITATION OF AN OFFER TO BUY OR SELL SECURITIES. IT IS CONFIDENTIAL AND IT IS FOR INFORMATIONAL PURPOSES ONLY. This presentation and any related oral information is strictly confidential and has been prepared solely for use in this presentation. This presentation is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident of, or located in, any locality, state, country or other jurisdiction where such distribution or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction. This presentation may include unpublished price sensitive information that may constitute “insider information” for the purposes of any applicable legislation and each recipient should comply with such legislation and restrictions and take appropriate advice as to the use to which such information may lawfully be put. We do not accept any responsibility for any violation by any person of such legal restrictions under any applicable jurisdictions. This presentation may include financial information and/or operating data and/or market information regarding our business, assets and liabilities and the markets in which we are active. Unless indicated otherwise, such financial information may not have been audited, reviewed or verified by any independent accounting firm and/or such operating information is based on management estimates or on reports prepared by third parties which we have not independently verified. Certain financial data included in this presentation consists of “non-IFRS financial measures”. These non-IFRS financial measures may not be comparable to similarly titled measures presented by other companies, nor should they be construed as an alternative to other financial measures determined in accordance with IFRS. You are cautioned not to place undue reliance on any non-IFRS financial measures and ratios included herein. This presentation contains various forward-looking statements. All statements other than statements of historical fact included in this presentation are forward-looking
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Key Highlights of Q1 2020 results
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Robust Cash Revenues in Q1 2020 (+11%(1) versus Q1 2019) despite first Covid-19 slowdown impacts
In Debt Purchasing, Gross collections increased by 29% in Q1 2020 versus Q1 2019 thanks to a solid Backbook performance beyond our expectations. In Debt Servicing, revenues were resilient in Q1 2020 (-6% versus Q12019) whilst we started to feel the initial impacts of COVID-19 beginning in March 2020. Costs remained under control in Q1 2020 (+4% versus Q1 2020) in spite of a robust top line growth.
Significant market activity during Q1 2020, with more expected to follow later this year
We made significant debt portfolio purchases in France in Q1 2020 (+€21 million), on the back of some transactions originated in 2019. In
revenues going forward. For both of our activities in our two core markets (France and Italy), caution should prevail given macro-uncertainty but we believe the business pipe is gaining momentum for the second half of this year.
Stable leverage, increased liquidity
Our leverage ratio on Attributable Cash EBITDA was at 3.4x(2) as of March 31, 2020, unchanged vs. the previous quarter and within guidance of 2.5 – 3.5x. As we drew €44m of residual RCF in order to be best prepared against potential COVID-19 related challenges, our liquidity reached €79m at the end of Q1 2020.
(1) Q1 2019 figures are pro forma including Sistemia (2) Ratio calculation based on iQera Q1 2020 and including full-year effect savings to be generated from 2020 from our new optimization initiatives (operations transformation – €2.7m – and support function plans – €0.7m). (3) Ratio calculation based on Q1 2020 results
COVID-19 – update
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Operational response
reopened on a selective basis, with appropriate security measures
situations
Financial impacts
different reasons. Although we have taken a number of mitigating measures to adjust costs to this lower revenue environment, there will be a temporary negative impact on Cash EBITDA.
end of Q2. Given the focus of our Debt Purchasing business on secured loans, as well as our track-record of conservative underwriting, the most probable scenario is that potential changes will consist in cash-flow postponements, rather than cash-flow reductions.
In addition, we are finalizing discussions to take out a GGL (Government Guaranteed Loan) to ensure that COVID-19 will not hinder our investment capacities in quarters to come.
Solid P&L in Q1 2020 despite first COVID 19 slowdown impacts
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KEY HIGHLIGHTS
Backbook.
impact was partially offset in Italy by the contribution of a large contract we onboarded during Q1 2020.
EBITDA margin slightly decreased from 40% in Q1 2019 to 38% in Q1 2020 due to the significant reimbursement of co-investors debt during the last quarter.
Q1 Cash revenues(1) Q1 Cash EBITDA(1) & Margin Q1 costs(1)
(1) Q1 2019 figures are pro forma including Sistemia (2) Ratio calculation based on Q1 2020 results
34.1 35.6
Q1 2019 Q1 2020
(€m)
4%
23.1 24.5
Q1 2019 Q1 2020
Attributable Cash EBITDA
40% 38%
(€m)
6%
28.7 37.0 28.9 27.1
Q1 2019 Q1 2020
Gross collections Debt Servicing revenues
(€m) 57.6 64.1
29% 11%
116.8 158.2 121.1 119.7
LTM Q1 2019 LTM Q1 2020
Gross collections Debt Servicing revenues
(€m) 237.9 277.9
35% 17%
Continued progress of LTM performance (revenues and margins)
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KEY HIGHLIGHTS
solid performance in our Backbook collections, and (ii) dynamic Frontbook collections (€40 million) following significant acquisitions in 2019.
(ii) solid contribution by our French Debt Servicing Business partly offset by run-off contracts.
2020 driven by (i) synergies continuing to flow into P&L and (ii) higher contribution of Debt Purchasing activities
LTM Cash revenues(1) LTM Cash EBITDA(1) & Margin LTM costs(1)
(1) pro forma figures are pro forma including DSO, Serfin and Sistemia for both 2018 et 2019
134.2 138.6
LTM Q1 2019 LTM Q1 2020
(€m)
3%
102.5 128.3
LTM Q1 2019 LTM Q1 2020
Attributable Cash EBITDA
43% 46%
(€m)
25%
Debt purchasing dynamic remained strong
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KEY HIGHLIGHTS
Collections) with limited Covid-19 impact in March. This performance was 7% above our ERC assumptions for Q1 2020.
initiated in 2019 and partly on the back of some transactions originated in 2019. Despite the current context, we maintained our disciplined portfolio acquisitions standards.
Q1 2020 collections, 120M Gross ERC remained stable vs Q4 2019.
Q1 stock portfolio acquisitions 120M Gross ERC
19 21
Q1 2019 Q1 2020
(€m)
13%
403 400 383 398 542 543
Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20
(€m) 28 28 43 49 37
20 30 40 50 60 Q1-2019 Q2-2019 Q3-2019 Q4-2019 Q1-2020
Quarterly collections
Resilience in Debt Servicing despite initial impacts of COVID 19 slowdown
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KEY HIGHLIGHTS
and (ii) initial impacts of COVID-19 on our revenues.
new contract with a leading bank.
Quarterly Servicing revenues(1)
Servicing
Revenues
Q1-2020
(1) 2019 figures are pro forma including Sistemia which was acquired on July 2019 (2) Ratio calculation based on iQera LTM pro forma figures including Sistemia as of March 31, 2020
19.7 20.2 19.1 19.8 17.8 9.1 10.3 9.4 13.7 9.3 28.9 30.5 28.6 33.4 27.1
Q1 19 Q2 19 Q3 19 Q4 19 Q1 20
France Italy Total
In €m
Continued cost control
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KEY HIGHLIGHTS
initial target, new initiatives have been launched to increase savings by another €3.4 million :
digitalization streams (+€2.7 million);
Synergies plan secured
increase in costs between Q1 2019 & Q1 2020
18% 41% 59% 12% 43% 56% 0% 10% 20% 30% 40% 50% 60% 70% Variable costs Fixed costs C/I Ratio
Cost Income ratio evolution
Q1 2019 Q1 2020
synergies plan in France from 2020
iQera Group consolidated cash flows – Q1 2020
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KEY HIGHLIGHTS
and payment of interests on HYB and other loans (€8.4 million).
investment capacities in quarters to come.
€26m
Net cash flows from operating activities
Q1-2020
€79m
Net closing cash excluding restricted cash
Mar-20
€m 2020 Net cash flows from operating activities 26.0 Net cash flows for investment activities (21.8) Net cash from financing activities 33.4 Net change in cash and cash equivalents 37.6 Opening cash and cash equivalents 50.7 Closing cash and cash equivalents 88.3
9.0
For the first quarter ended March 31
Capital structure & leverage position – Q1 2020
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Leverage on Attributable Cash EBITDA incl. Synergies
Mar-20
KEY HIGHLIGHTS
Leverage Ratio on Attributable Cash EBITDA was 3.4x(3) as of March 31, 2020
(1) Includes DSO (BPI), Serfin loans, a Sistemia acquisition loan, a portfolio loan and RCF drawings for €50 million. (2) Includes profit sharing accruals and EFFICO put for €6.1 million (3) LTM pro forma Cash EBITDA includes the full-year effect savings to be generated in 2021 from our new optimization initiatives (operations transformation are expected to account for approximately €2.7 million and support function plans are expected to account for approximately €0.7 million). (4) Ratio calculation based on iQera Q1 2020
(4)
Currency: € m Mar-20 Synergies impact (3) Mar-20 with synergies
High Yield Bonds
433.7
Other loans (1)
84.3
Co-investors' Debt
34.9
Others (2)
7.4
Gross Debt (IFRS)
560.3
Cash including restricted cash
88.3
Restricted cash
9.0
Cash and cash equivalents excL. restricted cash
79.3
Net Debt (IFRS)
481.1
LTM Cash EBITDA (3)
139.3 3.4 142.7
Leverage on Cash EBITDA
3.5x 3.4x
Net Debt excluding co-investors debt
446.2
LTM Attributable cash EBITDA (3)
128.3 3.4 131.6
Leverage on Attributable Cash EBITDA
3.5x 3.4x
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Financial Performance iQera – Q1-2020
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Highlights
KEY HIGHLIGHTS
+29% increase in gross collections essentially due to Backbook performance on the period Decreasing servicing revenues with slightly increasing performance in Italy (+2% / +€0.2 million) offset by an 11% decrease in France mainly due to deferred business
some contracts.
Professional fees and services decreased by +€2.3 million (-23%) essentially due to the alignment of iQera allocation rules in Italian branches (-€3.0 million impact) Personnel costs increased by €1.2 million (+8%) less quickly than revenues growth linked to servicing activity and support staffing catch up following two years of significant growth Committed costs increased by €2.5 million (+34%) with an impact of €3.3 million in Italy following high local development in 2019 and including an impact of allocation alignment for €3.0 million with professional fees and services. Considering
France, committed costs decreased by 12% impacted both by a good level of cost control and the impact of our synergies plan from the beginning of 2019.
(1) 2019 figures are based on iQera pro forma figures including Sistemia
(1)
€m 2019 2020 Variation (%) Ended Q1-19 Ended Q1-20 Variation (%) Gross Collections 28.7 37.0 29% 116.8 158.2 35%
28.4 33.0 16% 115.6 147.2 27% Non Attr. Gross Collection 0.3 4.0 1186% 1.2 11.1 827% Servicing Revenues 28.9 27.1
121.1 119.7
Total Cash Revenues 57.6 64.1 11% 237.9 277.9 17% Professional fees and services (10.3) (8.0)
(42.3) (32.8)
Personnel costs (16.4) (17.6) 8% (63.7) (68.4) 7% Committed costs (7.5) (10.0) 34% (28.1) (37.4) 33% Total costs (34.1) (35.6) 4% (134.2) (138.6) 3% Cash EBITDA 23.4 28.5 22% 103.7 139.3 34% Cash distributions to SPV co-investors (0.4) (4.0) 1013% (1.3) (11.0) 769% Attributable Cash EBITDA 23.1 24.5 6% 102.5 128.3 25% Cash EBITDA Margin 41% 44% 44% 50%
40% 38% 43% 46% For the first quarter ended March 31 LTM
(1)