Axactor ASA

Hello and welcome to the X-Acto ASA Q3 2025 results presentation. My name is Alex. I'll be coordinating today's call. If you'd like to ask a question at the end of the presentation, please press star followed by one on your telephone keypad. Or if you've joined us via the webcast, please type your question into the Q&A text box. I'll now hand it over to Johnny Solis, CEO, to begin. Please go ahead.

Good morning and welcome to AXAktor's third quarter presentation. By my side, I have Nina Mortensen, our CFO. This presentation will be divided into four parts. First, I will take you through Q3 highlights. Then Nina will present the financials before I give an updated outlook. We will round off with a Q&A session. Let us move to slide three and have a look at the highlights for the quarter. In Q3, AXAktor delivered double-digit revenue growth with solid contributions from both segments. Gross revenue grew by 11% year over year and total revenue growth was 12%. It was also positive to see that the contribution margin increased by 2 percentage points. The numbers are adjusted for the divested portfolios in Spain and a positive one-off effect from court cash bookings that we had in Spain in Q3 last year. EBITDA ended at 33 million euros, up from 27 million euros last year. The 23% EBTA growth is driven by increased revenue in combination with strict cost control. Annualized return on equity to shareholders was 11%. We now see the positive effects from both changes in the IBOR interest levels and reduced net debt, resulting in a 23% year-over-year reduction in financial expenses. One last item to mention is that we have secured the option to utilize our RCF to refinance the residual outstanding balance on our bond ACR03. This gives us high flexibility in terms of refinancing when it matures in September next year. Let us move to slide four for more comments on the collection performance. Q3 ended on the soft side regarding collections. Both July and September were good months, but August was slower than anticipated. The collection performance landed at 98% for the quarter and 100% year to date. Going forward, we expect collections in line with forecast. Moving on to slide 5 and more comments on the strong development in the 3PC segment. The 3PC segment continues to deliver impressive results. MPL is still the largest part of our business, but 3PC is a very important part of Axtractor's business model. 3PC, which is a capitalized model, offers low risk and generates strong cash flows at healthy margins. In Q3, their revenue growth ended at 19% year-over-year. We saw growth in all markets, but still, it is Norway and Spain where we can observe the strongest trend. In Spain, the growth is fueled by a successful partnership with a major investment fund. We see a clear trend that the customers are more willing to pay for high-quality collection services, and the growing pipeline with solid prospects gives a very positive foundation for further growth and margin expansions for 3PC, not only in Norway, but the total group. Let us move on to the next topic, refinancing, on page six. As you are well aware, 2025 has been a year where Axtactor has focused a lot on the balance sheet. The RCF is extended and matures mid-2028. Given normal circumstances and the long-lasting relationship we have with our RCF banks, renewal processes are doable at fair terms. In Q2, we placed our last bond, ACR05, at more than 3 percentage points better total interest rate than the previous bond. And as mentioned earlier, we can use our RCF to refinance the remaining part of ACR03. AXAktor has now full flexibility with regards to the refinancing of the last 65 million euros outstanding in ACR03. This means that we don't have any substantial maturities before towards the end of Q3 2027. We are continuing to work on our maturity profile and the target is still to have more frequent and smaller bond placements than we have had historically. With that, I'll leave the word to Nina for the financial update.

Thank you, Johnny. So now I'll take you through the Q3 financial performance, starting with an overall figures and then a bit more context on what is behind the numbers. Gross revenue for the group ended at 78 million euros in the quarter, down 9% compared to the third quarter of 2024. The decline was mainly a result of the sale of portfolios in Spain last year and a low investment level during recent quarters. Excluding the portfolio sold and a positive one-off effect from court cash bookings in Spain last year, the underlying like-for-like growth year-on-year was 11%. The MPL segment reported a gross revenue of 63 million euros. Excluding the sale of the Spanish portfolios last year and the positive one-off, the gross revenue increased 9% compared to Q3 2024, driven by improved collection performance. The CPC segment continued to deliver a strong top line of 15 million euros, up 19% from the third quarter in 2024. Let's look a bit more into details on each of the business segments, starting with NPL on the next slide. The NPL segment delivered an increase of 10% compared to the third quarter of 2024, with total revenue of 46 million euros. Collection performance continues to fluctuate around 100% and ended up at 98% for the quarter. Year-to-date, the collection performance is at 100%. This affirms the collection forecast we provided after the Q4 revaluation last year, with adjusted ERC curves. The improvement in total revenues was also supported by lower net negative revaluations and a lower effective NPL amortization rate. The amortization rate was reduced to 22%, down from 33% in the third quarter of 2024. The contribution margin ended at 79% for the quarter, up from 76% in the third quarter last year. The margin is supported by both rising total revenues and lower operating costs. Total operating expenses for the MPL segment decreased 5% compared to the third quarter last year. The decrease in cost level reflects the impact of ongoing cost reduction and efficiency improvement initiatives. Please turn to the next slide for comments on the development in the CCC segment. The CCC revenues ended at 15 million euros per quarter, equal to a growth of 19%. All countries with CCC business deliver solid growth, with Norway and Spain being the main contributors. The CPC growth is tightly linked to the quality of services we provide. During the third quarter, AXACTO won approximately 80% of benchmarks they participated in. The solid benchmark performance means that AXACTO has allocated a high share of the volumes going forward. AXACTO's quality focus confirms the company's intention to continue investing in competence and improved solutions. The contribution margin was 36% down from 37% in the third quarter 2024. The decline in margin year-over-year is related to implementation and build-up phase of new contracts. Further expansion in the CPC segment is expected going forward based on the strong momentum across all four geographies supported by a solid pipeline for new business and implementation of recently signed contracts. Let us move on to the next slide where I present more details on the reported financials. Total revenue at group level ended at 62 million euros, up from 55 million euros in the third quarter in 2024, up 12% year over year. The reported EBITDA ended at 33 million euros with a strong EBITDA margin of 53%. So we continue to see results from our cost reduction and revenue growth initiatives. Cash EBITDA ended at 49 million euros for the third quarter, compared to 59 million euros in the corresponding quarter in 2024. The reduction is mainly due to the sale of the Spanish portfolios last year. Now on to the next slide for a look at the development in return on equity. The analyzed return on equity for the first nine months reached double digits, coming in at 10%, increasing to 11% when excluding NRIs. This result was mainly achieved through improvements in total revenue and lower financial expenses. With lower interest rates, improved and failed collection performance, strong CPC growth, and a continued focus on cost, Axactor expects to maintain a healthy return on equity. With that, I'll now hand it back to Jonny for the comments on the outlook.