Hoist Finance AB (publ)

Thank you. Good morning everyone and welcome to this Hoist Finance earnings call for the second quarter of 2026. I am Harry Vranjes and next to me I have Magnus Söderlund, our CFO and Karin Tycke, our Chief Investor Relations Officer. Thank you all for logging in today and for showing interest in Hoist Finance. We'll try to run you through this quite action-packed quarter in about 30 minutes and try to leave as much room for questions as possible. There's a lot to cover. We have also understood some of you are looking for some more color on the Azuro acquisition, so we have added a slide about that later in the pack. But in general, we are very pleased that we managed to close that transaction already in Q1. But as Magnus will talk to you about later, they are not in the P&L yet. So we have the company, the people and the assets on the balance sheet, but revenues and costs will only be visible from July onwards. We are, however, already operating on the market and we've been able to win a number of smaller portfolios since closing. Now, Hoist Finance is a growth company operating in a growing market. Although the stock of MPLs on the balance sheets of the European banks is growing at a relatively modest pace. The stock today generates more MPL sales than it did in the past, as sellers sell earlier. Now, this change in behavior is driven by a combination of factors, but certainly regulation is one of them. The European regulators are still laser focused on the MPL topic. and we expect them to be so for the foreseeable future. And all in all, we assess that we will have favourite market conditions for the foreseeable future. There are many things to highlight this quarter. I think one of the highlights is of course also this Moody's rating hike. It will make our market financing marginally cheaper and we also see it as a recognition of our rigorous risk management. And with this rating we believe we have the highest credit rating in the industry. Now over to the highlights. Yes, it has been a record quarter. We closed portfolio investments of some 3.5 billion SEK in the quarter at good returns. That is our highest Q2 ever. Now, combined with the Asura portfolio of 2.6 billion SEX, that means we added about 6.1 billion to the total portfolio in the quarter, another record. The market is active, the pipeline is healthy and our investment team is fully occupied for the second half of the year. Currently our portfolio stands at 39.2 billion SEK, up 26% from last year. And of course with that we have reached and surpassed our volume ambition of 36 billion by the end of 2026. That doesn't mean that we will be pausing acquisitions in any way. We will of course continue to invest and build scale on this platform that we have. And when it comes to new volume ambitions, we'll get back to you with that at the Capital Markets Day in September. Very strong collection performance this quarter, 108%, broad-based. And I just want to thank all our operational teams for this delivery. Really great work. Profit before tax came in at a strong 632. million SEK compared to 310 last year. Now we did get the VAT refund and adjusting for that and the transaction costs, the last batch of transaction costs I should say for Azure, we end up at an underlying earnings before tax of 501 million SEK, another record. And I think we continue to see the benefits of the scale that we are now reaching. Return on equity, our core target, came in at 27.5% and of course if you then make the same adjustments as on the EBT, we end up with an underlying 21.6% return on equity above the 20%. Now earnings per share doubled or more than doubled as you said to 5.15 sec per share and at the end of the period we had a CET1 ratio of just over 13%, a very strong capital position. Moving over to the portfolio and the investment. So it has been a busy quarter. And as we have highlighted before, to be the leading investor and manager of MPLs in Europe, you need to have significant presence in the six largest European economies. That is simply where the bulk of the MPLs are. We now have about 80% of our portfolio diversified over those six markets, Germany, France, Italy, Spain, Poland, and now the UK. During the quarter, main investments were in France, Poland, Italy, and we're happy to also have closed a larger portfolio in Sweden. It's been mostly unsecured this quarter, and then combined with the Azure portfolio, which is also unsecured, the share of unsecured of the portfolio went up with a few percentage points, but this will fluctuate quarter by quarter. IRRs are holding up. We have seen selective aggressiveness around certain transactions. But if returns drop below our hurdles, we walk away. Discipline is key and the pipeline is healthy. So far in July, we've signed transactions for about 1 billion SEC. We expect to close those transactions during the second half of the year. The market trend of MPL volumes moving north continues. At present, almost half of the EU MPL volumes are on the balance sheets of French and German banks. and if you then add UK there it's you know they have MPL stocks similar to Germany's but a slightly more active MPL market and let's say before Azure we had strong market positions in in two of these three markets and now we have it in all three so very happy about that And then as per the end of the second quarter, the total portfolio now stands at 39.2 billion SEK book value with an estimated remaining collections of 66.9 billion SEK. With that, I'll hand over to Magnus to take you through the quarter in more detail.

Thank you, Harry. Good morning all and thank you for calling in. So if we look at the quarter, we see a continued strong delivery during a rather busy quarter with a record investment volume and the final implementation of the Azure acquisition, amongst other things. Profit before tax at 632 million SEK versus 310 last year, meaning a 103% growth year on year, 105% excluding the FX impact. As we have communicated during the quarter, we have received a VAT refund from the Swedish tax authorities after a mutually concluded agreement with a one-off P&L impact of 164 million SEK, which impacts this quarter. We also saw the last bit of the transaction costs related to the Azuro acquisition, 33 million SEK. If we exclude for these one of items, we have an underlying profit before tax of 501 million SEK to be compared to last year's underlying 335 million. Last year we had a negative VAT court ruling in the Netherlands, so the underlying growth ends at 49%. We have a net profit of 474 million SEK to be compared to last year's 234, rolling up in the same growth percentages as for pre-tax earnings. Excluding the mentioned one-off items, we see an underlying 376 million SEK of net profit for the quarter to be compared to 254 million last year. This leads up to a 48% growth in the underlying net profit, a really strong number. So in the reported figures we arrive at an ROE of 27.5% which adjusted for the one of items becomes 21.6% to be compared to last year's underlying 16.1%. If we look at the P&L in a bit more detail, interest income including the income from co-investments at a combined 1.46 billion SEK leading up to a 19% growth compared to last year. This to be compared to a book value growth of 26%. And then obviously as Harry said, the one thing to keep in mind for the second quarter is that we see the 2.6 billion SEK investment of Asura in the reported closing portfolio book value. But we don't see any P&L contribution. Since we closed the deal at the very end of June. So adjusting for this, the book value growth is at 18% and in line with the interest income development. In the net interest expenses, we see an increased cost of 20 million SEK year on year, so a 6% increase. This is a result of a more favorable interest rate environment combined with a lower NSFR for the quarter. We report 138% compared to 143 last year. And the fact that we are becoming more NSFR efficient in our deposit composition. We continue to see a steady net interest margin in line with previous quarters and also last year. In the impairment line, we see a continued strong performance coming from our collection activities. We closed the quarter with 108% compared to forecast and compared to last year's 104%. We have collected a total 3.1 billion SEK in the quarter. And as per normal, we have adjusted for timing for the majority of the secured overperformance. And we also see a strong overperformance in the unsecured collection. We had a total over performance of 447 million SEK where we did timing adjustments for 218 million SEK. We also saw some performance related net negative write downs in the quarter of roughly 50 million SEK. All part of our intention to manage our book, our portfolio in a prudent and responsible manner. and we also made an ECL adjustment related to the German performing portfolio of minus 53 million SEK. So all of this leads up to the 135 million SEK we see in the impairment line. Looking at other income, this is where we have booked the refunded VAT of 164 million SEK and on top of that we have contributions from the real estate sales in Spain and servicing revenue in Germany that we normally see every quarter. Net result of financial transactions is mainly driven by our performance and gains coming from the notes held in our co-investment vehicles. So this all leads up to total operating income of 1.44 billion SEK, which is a 38% growth compared to last year and a 23% growth excluding the VAT refund. On the cost side, the direct costs are growing by 15% compared to last year to be compared to the portfolio book value growth of 18%. So we're continuing to demonstrate a controlled and healthy cost level. And if we look at the indirect costs we see a reported 4% increase compared to last year. In the second quarter the costs also include the last bit of transaction costs from the Azure transaction. So if we exclude this the underlying indirect costs are on flat levels compared to last year where we also had the aforementioned 25 million impact coming from the VAT case. So to conclude, adjusting for the one of events in the quarter, we are at 21.6% ROE to be compared to last year's underlying 16.1. So we're very happy with the continued strong performance in 2026. We have a record high investment volumes. We have good cost control and a very strong operational performance. So we can move to the next slide. This is basically a recap, so just a short one. Net interest income, 19% growth year-on-year compared to portfolio book value growth of 18% if we exclude the Azure portfolio book value. And we see a net interest income growth of 23%, further adding the increased liquidity efficiency where we have an MSFR materially lower than last year, 138% compared to last year's 143%. We see another quarter of very strong operational performance. Our costs are at continued good and control levels. The net profit reported at the year-on-year 103% growth or 45% growth in the underlying results adjusting for the one-off items. We can move to the next one. Looking at the five-quarter trend, we see that the direct costs are developing at a somewhat lower rate compared to collections in the second quarter, further illustrating our cost control and strong operational performance. The collection figures in the second quarter is however positively impacted to some extent, as we had two significant payments totaling roughly 180 million SEK. which were timing related so if we adjust for those two we see a quarterly collection of roughly 2.9 billion second total and this pretty much leads up to the underlying stable ratio that we now see on a regular basis. Our indirect costs adjusting for the last piece of Azure transaction costs remain on flat levels compared to previous quarters. And for the FTE numbers, we see a rather static level for the total business. And here we also illustrate the immediate size of the organization post acquisition. So we have a total of 197 FTEs coming in where the split of direct indirect is fairly similar to our existing business. Can go to the next slide. Looking at our funding structure, the mix of sources is pretty much identical to Q1. We see a further improvement of the overall cost of funding down to 3.23% and we remain competitively priced to further support our growth ambitions. And looking at the funding cost in relation to our portfolio book value, we land at 4.1% for the second quarter. This is a further improvement from the first quarter where we saw 4.3%. So we're maintaining our strong position from a funding perspective. We do have a lower NSFR ratio in the second quarter, which helps us. And on top of that, we are currently very NSFR efficient in our deposit pool. We issued an AT1 during the quarter at very favorable market terms to manage our capital position in this period of the strong growth. And we also did a total 500 million tap into our existing senior preferred instruments. 350 of that at STIBOR plus 125 BIPs and 150 million at STIBOR plus 100. So all in all, we're maintaining and improving our competitive edge on the funding side. Our CET1 ratio comes in just above 13% down from 13.9% in Q1 and this is mainly driven by the record quarter investments leaving us with a continued strong capital position moving forward. LCR remains at continued high levels and looking at our liquidity reserve it remains at around 27 billion SEK So we're becoming more efficient in the deposit structure. And if we look at the ratio between our liquidity portfolio and our NPL portfolio, it comes in at 70%, which is a significant tightening from previous quarters. And we also have a slightly lower and as far ratio as I mentioned. So to conclude, A very strong continuation of the year with record investment volumes, a continued great operational performance and the costs at control levels. This to achieve increased earnings and increased profitability moving forward. So I think with that I will hand back to you. Thank you, Magnus.

Yes, so on Azuro, so we closed the acquisition in the last days of June. And we're of course very happy about that. And with this acquisition, we doubled our portfolio in the UK. And as you can see, the UK now is by portfolio book value, our second largest market. We now have a larger presence in a very interesting market and in a very interesting segment, the SME segment in the UK. And up until now, as those of you who have been following us know, we have been handling the UK in a 100% outsourced model. But of course now going forward, we'll have greater optionality when it comes to servicing also our consumer debt portfolios, which we will continue to invest in. And with this acquisition, we now have a solid presence on the ground in all the six largest economies in Europe, where the bulk of the MPLs are. UK REPRESENTS, THEY DON'T REPORT STATISTICS THROUGH EURO STAT ANYMORE SINCE BREXIT UNFORTUNATELY BUT IT REPRESENTS CIRCA 30 TO 35 BILLION POUNDS OF MPL'S WHICH WE SEE AS SIMILAR LEVELS AS GERMANY BUT WITH MAYBE A SLIGHTLY MORE ACTIVE PORTFOLIO MARKET. Now the team for the combined unit is up and running, and we expect to be fully integrated by the end of the year. This is not heavy integration.