Intrum AB (publ)

Thank you and good morning, everyone. I'm very pleased to be here. As was said, I'm Anders Engdahl. I'm the new CEO of Intrum and with me today is Michael Ladurner, our acting CFO. First of all, I want to just say that I'm very honored by the trust given by the board appointing me as CEO to lead Intrum going forward and humbled by the task to take Intrum into its next phase of development. But turning to the quarter and the results presentation, if we start on page three in the presentation, I'm very pleased to present the results of the third quarter. The third quarter was, in all and overall, a very strong quarter for Intrum, demonstrating the strength of our business model, also through adverse times like the one that we've seen over the past six, seven months. It demonstrates the resilience of our business model and how it balances through and changes over the business cycle. EBIT adjusted of 1647 was 25% ahead of the second quarter despite what is normally a seasonally slower quarter in Q3 due to the holiday season normally over the summer months. But this year clearly we had a stronger third quarter than that seasonality would normally give. Looking across our segments, looking at the key drivers for our results, a couple of highlights I wanted to bring up, and Michael will go into more detail later on, is we clearly saw a strong rebound in our strategic markets segment, driven by both a catch-up on volumes delayed from the second quarter, as well as the underlying gradual normalization of the activity level. Clearly, the strategic markets were most impacted by the lockdowns in the second quarter, and we saw activity opening up in June at the end of the second quarter and with further acceleration through July and the summer months. Noteworthy is clearly the contribution from our Greek partnership, which contributed meaningfully both in a year-over-year comparison, as it was not included in the third quarter last year, as well as on a quarter-on-quarter comparison to the second quarter. um we also from on the portfolio investment side we saw the continuation of the graduate recovery of collection performance on our back book that started in june and continued into the third quarter the third quarter um most you know in the third quarter most of our markets operated at effectively pre-covered performance levels which contributed to an overall outperformance versus the pre-covered forecast and a very meaningful outperformance to the COVID-adjusted forecast. We only see a few markets, particularly in Southern Europe, still effectively operating on a below pre-COVID level, but we can come back to that at a later point in the presentation. Thirdly, looking at the CMS segment, we continue to see the trend of lower case inflows dampening the top-line performance. This continued to be driven by our clients being more restrictive in sending overdue cases to collections, as well as the continued effects of various moratoria, especially related to overdue financial receivables from our banking clients. And fourthly, we continue to see very strong cost control, and the cost control supporting the margin development both in strategic markets and CMS. In total, the strong performance led to meaningful increase in our cash flow and cash EBITDA, which came in at 3.1 billion SEK in the quarter. And at the same time, our strong free cash flow supported the reduction of our absolute net debt. The combination of these two factors helped reduce our leverage ratio to 4.2 times, continuing the deleveraging path that we resumed in the second quarter. Furthermore, the financing activities we undertook during the quarter assisted in strengthening our available liquidity even further, which is now amounting to 16 billion SEK at the end of the quarter, as well as removing all meaningful near-term maturities before 2024. Turning to page four, in terms of outlook, clearly the second wave of COVID and the pandemic trajectory increases the uncertainty near term in particularly as it relates to the fourth quarter. I mean we're seeing again locally and throughout our footprint that locally markets are increasing restrictions in certain countries and local lockdowns are being introduced but so far it's to a limited extent translating into the full scale lockdowns what we saw in in q2 and so far we haven't seen entire countries being shut down in a similar way that said our readiness is high to respond to changes in circumstances and at the moment we're operating approximately 50 in office and 50 capacity from home and we are fully prepared to adjust and change rapidly as all units have remained at full alert since q2 The strong performance and response at the onset of the pandemic gives me comfort that we are able to navigate successfully also through a second wave. We're therefore a bit cautious in terms of the outlook for the Q4 and do not expect the same seasonal pattern that we usually see in the fourth quarter. As you see, we've seen a strong Q3 and we're also a little bit cautious on Q4. Looking beyond, though, into 2021, we see that the pandemic effects will continue to linger as the recessionary impact of the pandemic takes full effect. On the other hand, we do see that economic support counterbalance this in part, and many government stimuli programs supporting also into 2021. Therefore, we expect to see a gradual normalization of the operating and economic conditions through 2021, leading to gradual normalization of case inflows and gradual resumptions of portfolio sales activity. Beyond that, into the medium term, we do see increasing MPL formation in the pandemic aftermath, creating a supporting tailwind later in 2021 and beyond. Furthermore, we believe that our clients will continue to seek externalized servicing solutions and increase sales of portfolios, driven by the structured need to limit capital drag from increasing MPL ratios. the need to modernize NPL management as well as the changing consumer behavior leading to growth in consumer credit.

But with that, I will hand it over to Michael who can take us through some of the details of the report.

Thank you Anders and good morning everyone. I'm turning to page six now, group financials and summary. As Anders has just stated, we're very pleased with the strong financial performance in Q3, again, highlighting the resilience of Interim's integrated business model. Supported by catch-up effects in what is usually a seasonally slower quarter, revenues grew 16% relative to Q2 to SAC 1.521 billion and are also up to 19% year-over-year. EBIT adjusted came in at SAC 1.687 billion, an increase of 25% relative to the preceding quarter and 14% relative to Q3 2019. Earnings per share for Q3 stand at 6.97 SEC per share, significantly up from 4.26 SEC per share in Q3 2019. When looking at the quarterly results on a cash basis, cash revenues came in at 5.5 billion SEC and cash EBITDA at 3.1 billion SEC. up 16% versus Q2, and 20% year-over-year. This development highlights the favorable growth trajectory of our cash results. Furthermore, expenses, 2.4 billion SEC, were only up 4% year-over-year in comparison to the revenue increase of 19% for the same period, a testament to the ongoing benefit of the efficiency program executed in 2019, as well as continued successful focus on cost control during the pandemic. Focusing on leverage, we continue to de-labor. The ratio stood at 4.2 versus 4.4 in Q2, supported by growing cash EBITDA as well as a reduction in net debt despite FX headwinds during Q3. Focusing on the segments, I'm looking at page 7 of the presentation. credit management services are servicing operations in the mature and emerging markets experienced a quarter characterized by continued slower business volume inflow as well as an adverse fx development the slower business volume inflow continues to be driven by our clients extending payment terms and moving fewer cases into collection as well as moratoria currently in force the decrease in revenues 1.647 billion SEC in Q3 2020 compared to 1.764 billion SEC in Q3 2019 was, however, fully offset by efficiency gains with adjusted segment earnings of 482 million SEC compared to 489 million SEC in Q3 2019. The resulting margin expanded by one percentage point year-over-year and five percentage points quarter-over-quarter, standing now at 29%. Based on conversations with clients across our footprint, we anticipate seeing a normalization of business volumes in 2021. Turning to strategic markets, page eight, our servicing operations in Spain, Italy, and Greece. It should be noted that under normal circumstances, Q3 usually is a seasonally slow quarter. However, while the segment was significantly impacted by the pandemic and associated lockdowns, including of the legal systems earlier in the year, In Q3, we observed more normalized business volumes, also due to postponed volumes from previous quarters. Greece in particular had a strong quarter due to recouping business volumes. Overall revenues came in at 1.738 billion, 37% higher than in Q2 and 81% higher than in Q3 2019. The margin improved to 30%, an increase of 3 percentage points compared to the last quarter and 13 percentage points compared to Q3 2019. This development again highlights the continuing benefits of the efficiency program carried out in late 2019, as well as ongoing focus on cost control. Segment earnings therefore came in at 515 million SEC. an increase of 49% compared to Q2, and more than twice the level observed in Q3 2019. Now focusing on the portfolio investment segments, page 9, we saw continued solid performance above pre-COVID active forecast of 102%, 117% on a post-COVID basis. Gross collections came in at 2.7 billion SEC, 6% higher than in the previous quarter and up 1% year-over-year. The amortization of 972 million is explained by the significant outperformance previously mentioned versus the post-COVID active forecast. Earnings from joint ventures were 60 million SEC in Q3 compared to 102 million in Q2 and 310 million in Q3 2019. Segment earnings stood at 1.093 billion, up 9% relative to Q2, and down 12% year-over-year. However, removing the contribution of earnings from joint ventures, the underlying performance is improving year-over-year, from SEC 926 million to SEC 1.033 billion in Q3 2020. This translates into a return on investments of 12% for the quarter, up one percentage point from Q2 and down three percentage points from Q3 2019. Excluding the contribution from joint ventures, the return on investments for the quarter was 14%, up two percentage points versus Q2 and flat year over year. Investments of 837 million SEC were flat in comparison to Q3 2019. In addition, the underwriting levels in our investments remain attractive on the portfolios acquired during the ongoing pandemic. Turning to page 10. As mentioned before, collection performance for the quarter came in at 102% of the pre-COVID forecast and 117% of the post-COVID forecast. The post-COVID forecast here reflects the changes in expectations and associated write-down taken during Q1 to account for the risks and continued uncertainty of the pandemic effect on collections. Also noteworthy is our year-to-date performance against the pre-COVID forecast of 99%, highlighting the resilience of our collections against a very challenging operating environment in the context of the ongoing pandemic. In addition, we also benefit from our geographic diversification and that 85% of our collections came from digital and automated channels. Looking at the chart on the right hand side, this is evidenced very clearly by the performance of our static back book based on pre-2019 vintages. Actual cash collections only marginally dip below the original forecast during two months, April and May. the months when the most restrictive COVID-related measures to date were observed. On a cumulative basis, we collected 180% of our original expectations over the period shown for this reference portfolio. Diving deeper into the cash flow, page 11. We're seeing a continuing trend of increases across all cash metrics, cash revenue, cash EBITDA, and operating cash flow on a rolling 12-month basis. This development is particularly noteworthy in the context of a very challenging operating environment and is a testament to the resilience of our cash flow. Looking at the chart on the right, which highlights the strong cash flow generated by our business, I would also like to point out that adjusting the free cash flow of $9.6 billion for the quarter for maintenance portfolio investment CAPEX of circa $5 billion results in a free cash flow to equity of circa $4.6 billion. This is free cash flow available to be deployed on growth, deleveraging, or shareholder remuneration. I'm now on page 12, looking at funding sources and maturity profile. In Q3, the absolute net debt has decreased, standing at 48.9 billion ZEC, despite adverse FX effects of circa 300 million. At the end of the quarter, we had 16 billion SEC of available liquidity, an ample headroom under our covenants, allowing us to normalize our investment pace into 2021. We remain fully committed to our deleveraging path with a leverage ratio between 2.5 and 3.5 by the end of 2022 and evaluate capital deployment opportunities against delivering on this target. In terms of the maturity profile, I would like to point out that we have fully addressed all near-term maturities with no significant maturities pre-2024 remaining. Furthermore, our cash generating capacity exceeds the maturities in any given year in addition to the capacity available under the RCF. Turning to the net data overview, page 13. On the left, we're illustrating how the leverage is impacted by the Italian SPV portfolio. The net debt to cash EBITDA of our Italian SPV portfolio stood at two times. As previously explained, as we do not consolidate this investment, the impact is dilutive to the group's consolidated leverage ratio of 4.2. Adjusting for the impact of the SPV portfolio, the group's leverage ratio would have been at 3.9. On the right-hand side, we have put net debt in relation to year C, highlighting a decrease in the ratio in Q3 and bringing it in line with levels observed during 2018 and the first three quarters of 2019. Furthermore, the share of asset-light servicing revenues in the overall mix continues to grow, in line with the trend over the past two years and further supporting our deleveraging path. And with this, I would like to hand it back to you, Anders, for a look at our near-term priorities.