Intrum AB (publ) (ITJTQ) Q1 2025 Earnings Call Transcript

2025-05-10 21:29:33 ET

Intrum AB (publ) (ITJTQ)

Q1 2025 Earnings Call Transcript

May 7, 2025 03:00 AM ET

Company Participants

Andres Rubio - Chief Executive Officer

Johan Akerblom - Chief Financial Officer

Conference Call Participants

Jacob Hesslevik - SEB

Ermin Keric - Carnegie

Angeliki Bairaktari - JPMorgan

Wolfgang Felix - Sarria

Presentation

Andres Rubio

Good morning everyone. This is Anders Rubio. Good morning from a blue sky and sunny, although probably a bit chillier than everyone would hope, Stockholm. I'm here, as the moderator said, with Johan, our CFO, and thank you for dialing in to our quarterly results call. I'm also happy, before I jump into the results, to say that as usual, Jacob Hesslevik from SEB is first in line for questions and we will be going through the business over the next call at 20 to 30 minutes, then opening it up for questions. And I see that not only him, but many others have already lined up for questions. We look forward to that.

If we can turn please to the first page, Page 3 of the presentation. The first quarter is a good set of numbers, as you can see in the top left. On an overall basis, our EBIT has more than doubled to more than a billion. We have continued our focus on cost. We'll get into more of that later and we have produced a positive net income quarter for the first time since 2023. That's a very important indicator that all of our collective efforts to refocus the business, refine the strategy, cut costs, become more effective and more efficient, are starting to flow to the bottom line. Our leverage ratio is stable as a result of many different factors which Johan will go through later, but the real drivers of the business are the servicing and investing.

So on servicing, our income was slightly down, I'll address that a little bit more later, but our EBIT on both on reported basis and adjusted basis are significantly up year-on-year. This is driven by the margin improvement. As you can see here, our margin in the quarter was 21% in the first quarter of 2025. In the equivalent first quarter of 2024 it was 9%. Not only is that an absolute increase, that's very significant, 12 percentage points, but as you can see, it's broad based. It's both across all three of our major regions; north, middle and southern Europe have very, very meaningful margin expansion. And what it means is we have a more profitable and a stronger servicing business, I believe, than we've ever had.

On the investing side, bottom right, we have collected above active forecast. Our income is down merely because we have less assets; that is very mathematical. But ultimately our EBIT is still strong because we continue to collect above active forecast 102 in the quarter and that 102 was equivalent to 108 of our original forecast, indicating the trend continues that when we originally make investments, we generally and consistently over history have outperformed that. Well, during the last few quarters we have started ramping up, although we still have more to go on the ramp up, our investment management activities specifically with Cerberus as a partner. And we've invested there ultimately 647 which our share was 111 at a very, very healthy IRR. And I'll talk more about IRRs and volumes in investing later in the presentation. ...

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