Intrum AB (publ)

So good morning, everyone. It's been a busy morning. We have a lot of things to cover in this call. We will start with the Q1 presentation and then we will move forward to the rights issue or the capital race. I think we will go through both of them and then we'll move into Q&A rather than to pause in between. So if we start with the first quarter highlights for 26, and again, this is the first quarter of our strategic execution, which has an end date, which is 2030. But I think we think that we are moving according to plan. I mean, if we look at the P&L, we are ahead on the cost reductions and the servicing income is slightly behind. and a lot of FX effects in there. The service leverage is largely unchanged and the overall leverage is slightly down, but it's supported by the consolidation of Savoy Group, and we think that there will be further improvements to come in q2 when we close the portfolio if we would close the portfolio sale announced in january uh i think one of the important highlights obviously not part of the quarter but that's been announced today is that we have a fully guaranteed capital raise of seven and a half billion which will help us accelerate uh but we'll talk about more about that later moving on to the servicing I mean, margins quarter this quarter versus last year's Q1 are slightly up. So we move from 20 to 21. The rolling 12 remains at 25%. We do have organic growth in our traditional markets. They continue to grow on aggregate. But it doesn't fully offset the natural decline that we have in the specialized markets. Our client satisfaction index remains high. And we continue with a strong cost discipline. Cost levels are now 10% lower year on year. We have an 11% increase in rolling through months on the adjusted EBIT compared to Q1. And the sales execution in Q1 is more than 30% higher than Q125. And we will continue to focus a lot on the ACV to top line conversions. Moving to the next slide around our investment portfolio, we are closing the quarter with higher volumes than we guided, if you take that on a run rate basis. However, now with the race of capital, obviously, we will have to look at different volumes going forward. The good thing is that we are still very disciplined in terms of how we invest and what returns. And with the consolidation of Savoy, that increases the book materially. And the collection index is at the 100% versus the active forecast. And you... A new slide that we have introduced, and we will continue to follow up on this, is that we are making good progress when it comes to the AI and tech implementation. This is just to highlight the main areas where we're working. So we are spending a lot of time on our document AI. We are handling millions of documents every year, and a lot of them are done either manually or semi-manually. And we are now looking to automate that management and processing using AI. We are exploring, we're live in Spain, and then we are running seven countries or eight countries additionally, where we either are in pilot phase or exploration. And we're doing this in a coordinated effort between a central team and local resources. When it comes to AI, we are doing millions of calls, both outbound and inbound, and all of them, almost all of them, are managed by people. So in terms of using agented AI, there's a huge potential, and we're already exploring that. In Spain, which I think we talked about before, we have Olivia that is running roughly 80 to 100,000 calls per month. I think so far she has been able to process over a million calls. And then we are now running pilots in Germany and Spain, and we are exploring use cases in Italy and Poland. This will also have a major impact on the way we operate going forward and also in the way it will impact our cost to collect. And the conversion rate so far is in par or maybe sometimes even better. On the email AI, again, another big driver of the work that we do, millions of emails are being processed. Some of them manually, some of them semi-manual. We're now moving into automated email responses and also send outs. We are live with a prototype in Belgium and we are doing work in another three countries to start implementation. And here we think that there's actually a possibility to develop a solution that we can use in almost every country that we operate. It just needs the local connection to the core systems. So this is super exciting. We'll continue to follow up on this and we'll be more specific as we go in terms of the impact it could bring. I'll hand over to Masi.

Thank you, Ivan. Let's move into the P&L on slide seven. So we've talked about some of this before, but total income is down 12% versus the first quarter last year. We do have some FX headwinds. So despite the fact that the corona was actually weaker than the euro by the end of the quarter, on average during the quarter, the corona was strong, which has a negative impact on our income line, as well as a positive impact on the cost line. So that compounds the numbers here. As you can see, what stands out this quarter is that we have a capital gain from the constellation of Savoy. I'll come back to that later on, but that has a big impact on EBIT this quarter. We also have some extraordinary items on the net financial expense line. So the interest expense in the quarter is what it should be about 870 million based on what we're paying for our debt, but we have some non-cash items there impacting that number. There's an FX effect. As I said before, the corona was weaker by the end of the quarter, which has a negative FX effect on the net financial expense line. We have fair value adjustments, and we have a write-down of shares related to the constellation of Savoy that impacts that number. So net financial expense accounting-wise is almost double the level it is cash wise normally this quarter, which leads to the fact that we report a net income, a negative net income in the quarter. If you move on to the JV Savoy, we've named it Penelope sometimes in the past as well. There are different names in this structure, but we'll call it Savoy here. So what we've done during the quarter is that we've increased our share of this JV as we see value in it. And we have taken control of the structure by having more board seats. This allows us to consolidate the JV. and therefore it has implications on both our P&L as well as our balance sheet. Here in the P&L you can see that we have a credit gain as we've done a revaluation of the portfolio, but we also have impairments of financial assets in the notes in the group. So the net P&L impact is plus 254 million. At the same time, as we're consolidating, the book value of our portfolio investment goes up by 3.7 billion. There are some property holdings in there as well. And in the structure, there is some restricted cash. And we're now including all this senior debt in the structure in our own debt stack, which adds 1.9 billion of debt to our debt stack. But also we're including the cash that is related to this structure in the consolidated numbers. The net effect of the cash being included, as well as the debt being included, is a positive impact on our total leverage ratio of about 50 basis points. So to be clear, this is a JV where we think that there is cash flows coming in in the future. We want to visualize that, that there is value in this JV. Therefore, we've increased our stake. We've taken control. In practical terms, in the near future, the cash that has been generating in this JV will be paying down the senior debt that's in the structure. We own the mezzanine and junior nodes. And as the senior debt has been fully paid down, we will start to receive cash from this structure. And at this point, we expect that to happen sometime by mid-2028 as a starting point. And then this is a very large portfolio and it could be a long tail of cash being generated, and we'll see how long that tail is. Now we've done a valuation of this, we revalued it, and we've used the best estimate that we have in terms of the future cash generation. If I move to servicing, so on the headline numbers, it's down 10% on the external income. About half of that is organic. About almost half is FX. As Johan mentioned before, we continue to grow in the traditional markets, but it's not fully offsetting the decay we have in the specialized markets. I think the difference between the quarters in the past, the Q3 and Q4, when we reported overall organic growth, is the fact that the traditional markets are growing slightly less this quarter. The decay in the specialized markets are approximately the same as they have been in the past. We continue to have good cost control, down 10% year on year in servicing, and that is obviously helped by FX to some extent, but is also driven by the efficiency work we're doing. We're in line with our plan or slightly ahead of our plan of reducing costs in total by 5% this year compared to last year. If I move to investing, income is down clearly more than in servicing, 18%, again, impacted by FX. But obviously what's happening here as well is that we are investing less than what is amortizing. So the book is shrinking and therefore the income generation is lower. What also has impacted results this quarter is that we have a performance which is in line with active forecast. So the performance is at 100%. But the first quarter last year, it was at 102. And that sort of deterioration in performance, even though it's at 100%, also has a negative impact on the on the income line. Again, we're doing new investments at very high price discipline, which means that this quarter we've done a blended IR of 19%. And again, recall that when we do investments together with servers, we do get the servicing revenues as well. So typically the consolidated IRs are clearly higher than the 19%. So I'll ask you on to summarize the quarter before we move into the capital race.

Yeah. So, um, I think what we said upfront and I mean, that's part of the situation. I mean, top line development is slightly behind plan. Um, but, um, we don't see any structural changes. Uh, it's, it's also some seasonality. We have a positive sales momentum. We continue to increase how much we actually close in terms of new business. And that we now need to convert into real top line. The margins are stable. I think in our guidance, we have said that we will move slightly upwards, but it's going to be in a steady pace. On the investing side, I think the trend continues. The 345 comes at a very high IRR. And as Marcia also said, I mean, it brings servicing income. And we now have the full launch of the execution of the strategy and we have a full management team in place and our operation efficiencies are ahead of plan. And most importantly, with the fully guaranteed capital raise, we can speed up the execution of our 2030 strategy. So let's move to the next part, which is around the capital raise. So the capital raise is 7.5 billion. It's fully guaranteed. We have clearly articulated as part of our strategy that we want to focus a lot on our deleveraging. So the intention is to use around 5 billion to reduce debt and the remainder will support growth and profitability through investing volumes could be increased and to selectively speed up initiatives that we do in our operational transformation. That includes adjusting our way of working, that includes speeding up the AI initiatives that I talked about before, but it also includes how we can leverage data and technology in becoming more efficient in how we serve our customers and clients. The capital raise has a very positive effect on how our cash flows are impacted. First of all, it will lead to direct deleveraging. That in itself should help us to move our credit rating in the right direction, which will lead to lower funding costs when we go out and either refinance and work with our capital stack. That itself will help us to free up cash to accelerate our growth in the investing and the servicing business, and that in itself will improve the cash flow. So every step we take leads to an improvement in the next step, which in the end has a multiplier effect on how much profit we can generate. So we believe that the acceleration is two years via the strategy that we presented at the end of January income in terms of reaching our leverage target of 3.0. It will help us improve our refinancing profile and it will create a much stronger credit rating trajectory. It will reduce the funding costs immediately and it will continue to reduce the funding costs as we address the capital stack. And it will also help us to get much better access to capital markets. And the capacity to increase portfolio investments will be there. And we will also do the targeted efficient initiatives. And I think as we very clearly articulated in the strategy is that the better we can be in operating our platform, the more attractive we will be in terms of generating new revenue to the servicing line. And with reaching the leveraging target of 3.0, we also now open up for a potential dividend post the 28th financial year. I'll hand over to Masi who will take us through a little bit more of the exact implications.