Intrum AB (publ)

Welcome to the interim Q2 2026 report presentation. For the first part of the presentation, participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to CEO Johan Akerblom and CFO Masi Yazdi. Please go ahead.

Thank you and good morning everyone. Welcome to this second quarter report call. We start with the first page where we want to do a couple of highlights. I'd like to comment that this is the second quarter where we are executing on a new strategy. The number one priority when we introduced our strategy was how to improve the leverage and the balance sheet of the company. And as you all know, a huge amount of work has been dedicated to do exactly so in Q2 with the capital raise and the 2.4 billion portfolio sale. And we have also seen the effects of that by Standard & Poor and Moody's improving our credit ratings. The service leverage ratio on a performer basis has moved from 6.2 to 4.3 and the long-term target is 3.0. We also see that our operational transformation is continuing to pay off. Our costs are developing according to plan, and when looking at FDEs, which is one of the things that we are working with, making our processes automated or AI-fied or just more efficient, has reduced by 8% year on year. Our total costs are currently at 11.9 on a rolling 12-month basis. And the target in 2030 is 10 to 11, depending on our servicing income. The growth that we have in our traditional markets, we see the fourth quarter of growth. We see actually higher growth in this quarter than previous quarters. But it's not sufficient to offset the decline that we have in the specialized markets. And therefore, given that we had a negative growth in Q1 as well, even though it was higher than Q2, we do see that it's going to be more challenging to achieve the larger flat servicing income that we want to achieve in 2026. The servicing EBIT margin remains at 25, and the target is 30 to 35%. stable margins on the servicing. I mean, we are now at 25. We've been at 25 for, I think, the third quarter in a row. And we have good organic growth in the traditional markets. We maintain this strong cost discipline. but we will now accelerate on the cost side. So we will accelerate our progress, our operational excellence program, and we will include more countries going forward. We have five countries right now that operates under it, and we will see how many countries we will have by the end of the year, but it will be a material increase versus today. To illustrate a little bit more the dynamics around our external servicing income, you can see here that first of all, the Savoy consolidation, it moves basically external income to internal income. So you have a minus negative one there on a year-on-year comparison. The specialized markets, they go down 4%, of which organic growth is six. And the traditional markets, they help 2% up on a total basis with an organic growth of 5%. The decline, as we discussed many times before, is in particular in Greece and Spain and partially in Italy. And then UK has a performance that is impacted by slower and delayed new sales. So it's actually slightly different dynamics depending on which country you look at. In the traditional markets, which is 45% of the income, we have organic growth of 5%. And most of them are growing. And we have a couple of top contributors. We do, however, see a challenge right now in Germany, where we have had issues both with onboarding of new clients, which has been taking much longer than expected, and we also have a bit of performance challenges with some of the existing clients. But we're doing a transformation to get this fully in line, and there could be more potential on how we stabilize that going forward. On the Operational Excellence Program, we launched this in Q1. It is essentially a group-led program where we execute locally and we move the traditional bespoke model into the next gen, which is much more standardized, which is automated and where we have a lot of AI support to make it as efficient and effective as possible. We have an ambition to significantly increase the efficiency. We have on the FTE-based cost base in scope a 35-40% ambition over the next three years. We utilize all the new technologies, but we also use older technologies to make sure that we get the best possible outcome and we spend a balanced amount versus the outcome that we expect. And performance management is obviously very important when we then start tracking our lower cost to collect. The good thing is that the identified savings are actually exceeding the ambition, so we see that the impact could be bigger than we anticipated from the beginning. But we will now, as said, accelerate this, expand it, and do more countries in parallel. We center this, and I think we talked about this in Q1, there are three different buckets that are material, and that's where we focus. It's document management, it's email management or email automation, and it's also around how we deal with calls. And everything, not everything, but a lot of things that we try to build are things that we can then scale across the different markets that we have. So we don't build a bespoke solution, we build generic solutions, we implement them locally, and then we export them to the next country to get the scale and the synergies in the group. Investing, we haven't talked much about, but we did 197 million, which is according to the previous ambition. We did it at 19%. We are still very disciplined in our execution. And the collection has been 102 in the quarter versus 100 in Q1. What you see on the page is the rolling 12 months. So the collection has actually improved queue on queue and of course now we need to ramp up with the capital race I mean with the increased financial flexibility we have an ambition to make these volumes higher and we are already working on a number of interesting deals and we are confident that they will materialize in the second half with that I'll hand over to Masi to go take you through the financials

Thank you, Johan, and good morning, everyone. I think Johan has gone through the highlights, but just to mention a couple of things. Obviously, income is coming down, both on the back of negative growth in servicing as well as the decay in investment book. Obviously, the plan going forward is to change trajectory on both of those, investing more and at some point getting organic growth in the servicing business. I would comment on the cost side. It is down 2% year-on-year. It was down more in Q1. One thing to flag there is that the consolidation of Savoy is leading to about 100 million higher costs this quarter compared to Q2 last year. and I think that's something you should expect for the full year that it's going to be around that level per quarter which means that the cost level we are on track on the plans we have and we will try to offset parts of this but nevertheless moving Savoy from the JV line to the income and cost line leads to this impact on the cost side on the underlying development we are fully on track with the plans and the targets we've set for the full year I just mentioned also on the numbers that on the net financial expense line we have a reversal from Q1 of about 300 million which is helping that line But also as of May, we are doing hedge accounting on the FX swings we have. So in Q2 and also going forward, the FX effect on our debt and the net financial expense time will be less than it has been historically. I think if you take Q2 as an example, we've offset about 400 million of FX swings that otherwise would have materialized on this line. On the tax expense, it's a bit elevated this quarter. That's related to a one-off tax expense in Italy that is part of a tax audit that's dealt with previously years, so back a few years. That's a one-off cost of almost 100 million in the quarter. We're showing a positive net income, which is obviously good, but the ambitions are clearly higher for the future. On the servicing side, I mean, we've gone through most of the numbers. There's a negative minus three percent fully, but the organic growth is minus two and the Savoy consolidation is minus one and FX is neutral in the quarter on the cost side that is coming down in line with the total income so which means that overall year on year if you look at the running 12 months margins are stable at 25% obviously Given that it's a bit more challenging on the top line on servicing and to have the margin improvements that we're looking to get until 2030, we need to do a bit more on the cost side to keep this stable and moving in a positive trajectory. And as Johan said, we see growth in traditional markets, that growth is higher than it has been in the last few quarters, but it's being more than offset by the specialized markets for now. On the investing side, same kind of trends we've had previously as we keep having less new investments compared to what is amortizing, which means that we have a headwind on the income side. Going forward, we are planning to increase the investment pace and at some point offsetting that headwind. I think it will probably, we see a better deal flow now. We see that we are engaging in more investments. But it will take a couple of quarters before you see that coming into the numbers as there is a delay between engaging in new investments and getting those signed and onboarded. So you should expect that they will take a couple of quarters before you see the investment pace actually picking up in the numbers we report. Also obviously due to the fact that there's been summer months and the capital waves were just executed in July. And as Johan said, obviously, 197 million of new portfolio investments, high blended IR. Obviously, with the higher investment base going forward, it's very likely that the blended IR will start to move downwards, but we will be disciplined in our execution and we will make sure that the IR is nevertheless clearly above the cost of funding that we have. ESPECIALLY WHEN WE TAKE INTO ACCOUNT THE CO-INVESTMENTS WE DO WITH BROCK WHERE WE TYPICALLY GET SERVICING REVENUES AS WELL AND WE LOOK AT CONSOLIDATED IRs INCLUDING BOTH THE INVESTMENT REVENUES AS WELL AS THE SERVICING REVENUES THAT'S IT FROM ME I'LL ASK YOU WANT TO SUMMARIZE THE QUARTER BEFORE WE OPEN UP FOR Q&A