Q2 2024 Intrum AB Earnings Call Transcript
Key Points
- Intrum AB (ITJTY) successfully completed an asset sale to Cerberus, raising significant liquidity.
- The company achieved SEK900 million out of a targeted SEK1.5 billion in cost reductions, enhancing efficiency.
- Servicing income grew by 10%, outperforming expectations, and EBIT grew by 23%, indicating margin expansion.
- The investment portfolio shrank from SEK37 billion to SEK26 billion while maintaining strong cash flow and collection rates above 100%.
- A long-term investment management agreement with Cerberus was signed, aligning with the capital-light strategy and enhancing future investment capabilities.
- Despite the positive developments, the leverage ratio remains high at 3.9 times net debt to cash EBITDA.
- The company's adjusted EBIT decreased by 15% due to temporary delays in collections and increased costs.
- The investment business saw a 12% decrease in adjusted income and a 33% decrease in adjusted EBIT, impacted by higher activity levels and inflation.
- The cost base increased by SEK1.7 billion due to acquisitions, inflation, and currency effects, offsetting some of the cost savings achieved.
- The company's equity decreased by 20% this quarter due to hedge effects related to the sale of assets.
Thank you, operator, and good morning from a cloudy and somewhat wet Stockholm. I'm here as the operator indicated with Emil, the acting CFO, and thank you for joining us this morning.
Before we jump into the heart of the presentation, I just wanted to take a little bit of step back and set the stage. I think it's very important to see, and this quarter was a very active one. We've been very busy across several fronts. We've accomplished a lot and I think it's very important to always go back to what we set out to do and how we -- what we've done thus far.
So everyone on this call is going to remember that less than a year ago in September of '23 at the Capital Markets Day, we set up some near-term and long-term goals. Near term, we wanted to strengthen our financial profile. We wanted to cut costs. We wanted to deleverage. Long term, we wanted to lead with client-facing servicing. We wanted to shrink our proprietary investment portfolio,. And we wanted to become an investment manager.
I think this quarter
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