Intrum Justitia AB: Year-End Report 2015

Regulatory News:

Fourth quarter 2015

• Consolidated net revenues for the fourth quarter of 2015 amounted to SEK 1,396 M (1,370).
• Operating earnings (EBIT) amounted to SEK 385 M (360). The operating earnings include revaluations of purchased debt portfolios amounting to SEK –36 M (7). Earnings for the fourth quarter of 2014 were charged with non-recurring items of net SEK –35 M. The operating margin excluding revaluations of purchased debt and non-recurring items was 29 percent (28).
• Net earnings for the quarter amounted to SEK 274 M (294) and earnings per share were SEK 3.76 (3.85).
• Cash flow from operating activities amounted to SEK 878 M (784).
• The carrying amount of purchased debt has increased by 13 percent compared with the fourth quarter of 2014. Investments in purchased debt during the quarter amounted to SEK 1,130 M (477).

Full-year 2015

• Consolidated revenues during the 2015 full-year amounted to SEK 5,628 M (5,184).
• Operating earnings (EBIT) amounted to SEK 1,624 M (1,430). The operating earnings include revaluations of purchased debt portfolios amounting to SEK 31 M (35). Earnings for 2014 were burdened by non-recurring items amounting to a net of SEK –35 M. The operating margin excluding revaluations of purchased debt and non-recurring items was 28 percent (28).
• Net earnings for the year amounted to SEK 1,172 M (1,041) and earnings per share totaled SEK 15.92 (13.48).
• Cash flow from operating activities amounted to SEK 2,905 M (2,672).
• Investments in purchased debt during the year amounted to SEK 2,428 M (1,937).
• The Board of Directors proposes a dividend of SEK 8.25 per share (7.00), corresponding to a total of SEK 597 M (514).

Comments by Acting President and CEO Erik Forsberg

Intrum Justitia performed well during the fourth quarter. Operating earnings rose by 7 percent compared with the year-earlier period, adjusted for revaluations, currency effects and non-recurring items. Among our regions, it is primarily Northern Europe that has contributed to the improvement in earnings and, in our service lines, the quarter was particularly strong for purchased debt within Financial Services. In December, we were also able to announce two events that will strengthen the Group for the upcoming years. We acquired two major debt portfolios from financial institutions for a total investment of about SEK 670 M and we increased our financial flexibility by entering an agreement for an extended credit facility.

We can look back on a very successful 2015 for Intrum Justitia – a year in which we acted in accordance with our strategy. We strengthened our market presence through increased investment in purchased debt and through acquisitions in credit management services. We developed our customer offering, including through the launch of financing solutions for e-trade. Furthermore, through continuous efforts to improve and expand our extensive database we also strengthened our operational efficiency. This resulted in a continued strong financial performance in 2015 compared with the preceding year. Earnings per share rose by 18 percent and the return on purchased debt was 20 percent, well above our financial targets of 10 percent and 15 percent respectively. With regard to our capital structure, we were, over the year, just below or on par with our financial target of net debt in relation to operating earnings before impairment, depreciation and amortization of 2.0-3.0.

For the coming year, we see continued favorable opportunities for profitable growth for Intrum Justitia. We have a strong offering with a combination of services and financing that we develop continuously in close cooperation with our customers. We have a solid financial position and through our broad geographical presence in various customer segments, we achieve good commercial stability. Intrum Justitia shall also contribute to a healthy economy. Through effective credit management, we help build viable companies with the resources to recruit new employees and invest, and by treating people responsibly, we can also contribute to sound private finances by helping consumers deal with debt on terms that the individual can manage.

Presentation of the Interim Report

The interim report and presentation material are available at www.intrum.com/Investor relations. Acting President & CEO Erik Forsberg will comment on the report at a teleconference today, starting at 9:00 a.m. CET. The presentation can be followed at www.intrum.com and/or www.financialhearings.com. To participate by phone, call +46 8 505 564 505 (SE) or +44 20 342 628 45 (UK).

Intrum Justitia is Europe’s leading Credit Management Services (CMS) group, offering comprehensive services, including purchase of receivables, designed to measurably improve clients’ cash flows and long-term profitability. Founded in 1923, Intrum Justitia has some 3,850 employees in 20 markets. Consolidated revenues amounted to about SEK 5.6 billion in 2015. Intrum Justitia AB is listed on Nasdaq Stockholm since 2002. For further information, please visit www.intrum.com

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