Hoist Finance AB (publ)

Thank you very much. Good morning, everyone, and welcome to this Hoist Finance earnings call for the fourth quarter and full year of 2025. I'm Harry Vranjes, CEO of Hoist Finance, and with me in the room here is Magnus Söderlund, our CFO, and Karin Tycke, our Chief Investor Relations Officer. So thank you again for logging on this morning and showing your interest in Hoyst Finance. We will try to run through the presentation in some 30 minutes to leave ample room for any questions you may have. But before we get going on the quarter and the year itself, I just want to take a minute on some perspectives on 2025. 2025 was an action-packed year again. with lots of activity on the funding side of the business in the beginning of the year. But when it came to investments, we started the year slowly with a sleepy first quarter with a pipeline that then gradually grew and eventually culminated in Q4. and especially in December. So we booked about 4 billion SEC in the quarter, which is 40% of our 2025 volumes, and most of that in December. So this has been a drag on the interest income development in 2025, but will give us a great start in 2026, especially as we have already secured about 1.4 billion SEC for the first half of the year. But I guess in quarter four, our core business really, really delivered. 108% collection performance is a new record, certainly for the time I've been here. And just to put those percentages in perspective, so the fact that we collected 108% instead of 104%, which we had done Q1 to Q3, added 105 million SEK profit to the quarter. So a big thank you to the whole organization for an incredible finish of the year. We also launched our new internal HoistBar platform in Germany in Q4, in November. The reception and the uptake has been significantly above our expectations. So in the first three months, we've onboarded more than 4,000 new customers who've deposited the equivalent of 1.5 billion SEC. And we're very happy about that. This will help bring our funding costs down over time. On top of this, as we announced two days ago, we are now a specialized debt restructurer and we will now have the larger addressable market. We will become more competitive on the margin and especially for unsecured. And we will also have more firepower going forward. Now let's go through the highlights. Some parts here might be a little bit repetitive. I apologize for that in that case. Profit before tax came in at a strong 492 sec compared to 281 last year. The main driver of the result, as I just mentioned, comes from the very strong collection performance in unsecured as well as secured. Both came in higher than ever in the quarter. That brought a return on equity to a record 21.8%, driven by stable IRRs, very strong collection performance, and good cost control. Then on the investment side, we closed, as I mentioned, 4 billion in the SEC at good returns. And yeah, as we talked about basically all of 2025, it has been a very backloaded year with sellers waiting almost until Christmas to close the transactions and transfer the portfolios. Q4 was a mostly unsecured quarter with only smaller investments in secured, great geographical spread and our German colleagues can now claim the largest portfolio in Hoist beating Italy by a few million. I'm sure they are happy about that. After the quarter closing, we have signed an additional 1.4 billion SEK, which we aim to close in Q1 or Q2. So our portfolio now stands at 33.4 billion SEK, and compared to last year, that's a growth of 9%. But if we adjust for currency, which has been at significant movements, the growth is underlying 15%. So we are inching ever closer to our ambition of having a 36 billion portfolio by the end of 26. real driver again operations a very strong collection performance 108 and 105 million i've already spoken about now uh on the sdr uh we are now specialized debt restructure as of the 4th of february With that, we release 1.2 billion SEC backstop reservation. And after deducting the six SEC total dividend, our performance CET ratio is then 13.5%, which leaves us plenty of firepower to invest for 2026 and beyond. I think as a well-capitalized SDR, we will now strive to increase our market share further in Europe. If we look at the full year, nice growth there as well. Profit before tax, 1.5 billion compared to 1.3 billion in 24. 14% growth or 16, excluding FX. And this is, I mean, this is despite taking increased cost to qualify as SDR compared to 24 when we had a significantly smaller liquidity buffer. Now, return on equity for the full year, 17.6%, well above our externally communicated targets compared to 16.8 last year. And it is the underlying business that is driving this profitability. Now, continued high investment pace with the 9.9, a little bit irritating that we couldn't get that to a 10, invested in new portfolios in a very, very backloaded year. And the portfolio is 33.4 billion. And for the year, we had a strong and stable annual collection performance at 105%. That is now two years in a row. We're very happy about that level, although it fluctuates between quarters. uh cost control solid uh there were of course helped by the fx so they dropped six percent but if we exclude the fx effect it's still a drop of four percent earnings per share for the year eps 11.59 compared to 10.1 and this gives us a growth of 15 against tough comparables So finishing the year, strong capital and liquidity positions well above regulatory requirements. And also earlier in the year, in July, Moody's adjusted the outlook for our rating to positive from stable. And this year, we entered Finland through a co-investment to strengthen the footprint in Northern Europe. In 24, we opened Portugal, and they've had a fantastic development now in 2025. So with that, I will hand over to Magnus to take us through the quarter in more detail.

Thank you, Harry. Good morning, all, and thanks for calling in. So we concluded the year with a very strong fourth quarter, both in terms of earnings as well as in the new investment volumes and collection performance. A profit before tax at 492, so that's a 76% increase year on year. An annualized ROE of 21.8% compared to last year's 15.5%. So starting with the interest income, including the co-investments, we see a 2% growth year on year. Since the income from co-investments gradually impacts the P&L more and more, we should note that this is a netted income. So this means that the 55 million we see as interest income is coming from 91 million of interest income and 36 million of costs. This is obviously also true for the 28 million we see from last year, but the cost part has grown by 29 million year on year delta. So considering this, we have an underlying growth of 9%, which is more in line with our portfolio growth. We do also have an impact from the majority of the investments coming in during December, meaning we don't see the full impact in interest income coming from these new volumes in the quarter, whereas Q4 of last year was more front-loaded. We also see the full cost of the NSFO requirements, where we had a lesser impact in Q4 of 2024. The net interest margins overall remain stable and aligned with the previous three quarters of this year or 2025. uh looking at the net interest income adjusting for the built-in costs coming from the co-investments and the fx the growth is positive by one percent and this is not taking the timing impact from later investments into consideration so we are seeing a favorable returns in the market and the very good return levels in the four billion of new volumes we acquired during the quarter As Harry mentioned, we saw a record strong collection performance in the quarter at 108%. And this combined with the positive revaluation triggered by the good health of the book brings a strong impairment gain for the quarter. Furthermore, we saw the two portfolios bringing a net gain of 64 million in the other income line. And if and when we see an opportunity to sell certain segments of our book with a favorable outcome, we will obviously explore it. It is part of our everyday business. And this was two very successful transactions for us. In other income, we also see gains from real estate sales in Spain and a small portion of servicing revenue in Germany. And looking at the costs, the direct costs are flat year on year, but are also impacted by a provision coming from an OVT case related to Poland. That's 65 million. Excluding for this and effects, we see a 6% drop in the direct costs, which we are very happy with. For the indirect costs, Q4 of last year included 57 million of restructuring costs related to Spain. So adjusting for this, the costs remain flat-ish year on year. So all in all, we are very happy to conclude that our efforts in controlling the cost remain successful. And all of this leads up to profit before tax of 492 million SEK. And we are obviously very happy with the strong outcome of this quarter. To the next slide. Looking at our investment portfolio acquisition. So after a slow start of the year, we see a short bump in the last quarter. As mentioned, we closed these deals at attractive return levels and a healthy geographical spread. No single market represents more than 22% out of the new investments in the quarter. And considering the somewhat slow start of the year, we end up at a strong 10 billion for the full year. This in combination with the favorable returns we have seen over the years, a clear result of the quality of our investment organization and acquisition capabilities. All in all, a very strong investment year. We are well on track to reach our ambition of a 36 billion portfolio book value during 2026. Moving to the asset class mix. So as we're growing, we're also improving our geographical spread. No market representing more than 16%. The split of unsecured and secured remains similar to previous quarters, where we do see a gradual increase of secured over the last couple of years. And this is something we are happy with as both asset classes offers great opportunities and brings us a diversified risk spread. we can move to the next slide looking at our funding the mix remains similar we have a competitively priced and stable funding base which is supporting our growth the average cost is going down and we are now at an average 3.4 percent where the funding cost in relation to our mpl book value remains at around 4.4 percent and this is clearly an edge for us We issued one senior preferred bond for the quarter and our own deposit platform is in Germany. It's off to flying stock with roughly 150 million euro of deposits since the start of November. Over time this will improve our funding costs even further and we are now in the planning phase of setting up the next one. uh looking at the five quarters cost trend we continue to deliver on our ambitions of having the direct costs move in line with collection and the indirects to stay flat the non-recurring part indirect cost in q4 is coming from the vat case i mentioned underlying we remain at the same level of cost to collect as the previous quarters we see an uptick in legal costs as the courts in our southern markets become more active after the q3 summer vacation period and all in all we are very pleased with the with the developments So our capital position. The movement from last quarter's 12.2% to the 10.8% now in Q4 is mainly driven by the large volume of new investments and also the six SEC per share dividend. and the performance section shows the sharp impact coming from the backstop release providing a very solid base to keep growing the business so we basically see the 2.5 ish percent increase that we have a guided for an earlier course LCR and NSFR at stable levels compared to previous quarters. NSFR of 143% with good margin to the regulatory required 130%. The size of our liquidity reserve in comparison to the portfolio book value, the MPL portfolio book value remains at lower levels than before. and the increased use of our own platforms will enable enable us to keep tightening this ratio over time and then if we look at the full year of 2025 so in short we're achieving roughly a 1.5 billion profit before tax to be compared to the 1.3 billion in 2024 a 16 growth excluding ethics If we include the impact from the increased underlying costs in the interest income from co-investments, this means that 20% growth year on year. And this is with a full year of SDR costs where the interest expense increase is mainly driven by the SDR qualification and then obviously the growth of the NPL portfolio. A return on equity of 17.6% compared to last year's 16.8%. So all in all, a very strong year. We managed to reach a collection performance of 105% and demonstrated a strong cost discipline throughout the year. We collected almost 1 billion SEK more in 2025 versus 2024 at lower cost. Our operational capabilities have become more flexible and hybrid between insourced outsourced collection activities and this will continue to be a benefit for us also during 2026. So in short we have established a cost-based structure that will create a strong operating leverage as we continue to grow the business. And despite the slow start of the year, we ended strongly to reach the 10 billion invested. And now we move into this year with a strong pipeline and many interesting opportunities and also ample capital and a bigger addressable market. So all in all, a really, really strong year with an exciting 2026 ahead of us.

So with that, I hand back to you. Thank you, Magnus. Yes, so how are we tracking against our financial targets? Well, if we look at our core target on which we are all measured on, the ROE is at 18% for the full year. driven by the underlying business, as you can see in the graph here. In terms of capitalization, with a 13.5% C to 1 ratio as SDR, we will have ample purchasing power for this year and beyond. Over time, we will of course strive to get back down into the gold corridor and with the regulatory stability that the SDR gives us and the growing size, we will be able to use the capital more efficiently going forward. And looking then at earnings per share, Keger over the last three years, 28%, but also very, very proud of the fact that we managed to do 15% growth year on year against really tough comps. And finally, as communicated, six SEC per share dividend out of which 3.26 is the ordinary and 2.74 the extraordinary on the back of the STR status. So doing well against the targets. so then key key takeaways as you've heard many times during this presentation already the core business is really delivering solid investments solid collections for the quarter but but also throughout the full year continued profitability improvements, increasing the ROE. And then in terms of the market, we do see rising MPL ratios across Europe, especially in France, Germany. We also see certain asset classes in Spain. And we expect that the MPL market in 2026 to be at least the same or larger than 25. And with all these benefits that we get with the SDR status, we will strive to take market share. As always, though, provided that it is at attractive and accretive returns. And with that, it's time to open up for questions.