INTERIM REPORT JANUARY–SEPTEMBER 2016 Consolidated

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News Desk 2018

Oct 19, 2016 at 2:15 AM

INTERIM REPORT JANUARY–SEPTEMBER 2016

· Consolidated revenues for the third quarter of 2016 amounted to SEK 1,486 M (1,386). · Operating earnings (EBIT) amounted to SEK 517 M (452). Operating earnings include revaluations of purchased debt portfolios amounting to SEK 29 M (29). The operating margin excluding revaluations was 33 percent (31). Earnings also include a positive effect of SEK 15 M from a divestment of purchased debt portfolios. · Net earnings for the quarter amounted to SEK 375 M (330) and earnings per share were SEK 5.14 (4.51). · Cash flow from operating activities amounted to SEK 837 M (805). · The carrying amount of purchased debt has increased by 26 percent compared with the year-earlier period. Investments in purchased debt for the quarter amounted to SEK 646 M (320). COMMENT BY PRESIDENT AND CEO MIKAEL ERICSON Intrum Justitia continued to perform well during the third quarter. As in the second quarter, we achieved all of our financial targets with regard to growth in earnings per share, return on purchased debt and capital structure. Our operating earnings of SEK 517 M are the highest in the Group’s history to-date. Earnings per share increased over the twelve past months by 12 percent. In our regions, the third quarter entails a strong development, mainly for Central Europe, where good growth in purchased debt and high operating efficiency contributes to profitable growth. Adjusted for items affecting comparability, operating earnings in Northern Europe and Western Europe for the third quarter were somewhat lower than the previous year. For our service areas, we have strong growth in Financial Services. For the third quarter, investments in purchased debt amounted to SEK 646 M, compared with SEK 320 M for the year-earlier period. So far this year, we have increased investments in purchased debt by around 50 percent compared with the previous year. The return on purchased debt adjusted for items affecting comparability and revaluations decreased compared with the year-earlier period, but remains at a very strong level of around 18 percent. In the Credit Management Services, we have a stable development with unchanged income and operating margins compared to the same period last year. I continue to view Intrum Justitia’s conditions for growth as very positive, in a market characterized by significant opportunities. We have a good momentum in our core business with an investment level in purchased debt that amounted to SEK 3.1 billion in the past 12 months, compared with SEK 1.8 billion for the same period last year. The market for purchased debt is currently undergoing a period of price pressure, but we also see a very strong supply for the next several years, entailing good chances to continue increasing our earnings. In Credit Management, we have good conditions for profitable growth through add-on acquisitions. In October, we concluded two such transactions in Denmark and Spain and we have thereby made four add-on acquisitions so far this year. We also continue the work to increase our addressable market through a disciplined increase in our presence in new asset classes for purchased debt and through growth in new customer segments. In some of our markets, we see good opportunities to grow through acquisitions of secured debt. In both purchased debt and in credit management, we see good potential to grow in the customer segment for small and medium-sized enterprises. We also do not rule out expansion to new countries in Europe if we can identify acquisitions that enable us to reach a marketleading position. Altogether, we therefore see very good growth opportunities for Intrum Justitia in coming years. PRESENTATION OF THE INTERIM REPORT The interim report and presentation material are available at www.intrum.com/Investor relations. President & CEO Mikael Ericson and Chief Financial Officer Erik Forsberg will comment on the report at a teleconference on October 19, starting at 9:00 a.m. CET. The presentation can be followed at www.intrum.com and/or www.financialhearings.com. To participate by phone, call +46 (0)8 566 426 98 (SE) or +44 20 300 898 01 (UK). FOR FURTHER INFORMATION, PLEASE CONTACT Mikael Ericson, President and CEO, tel: +46 8 546 102 02 Erik Forsberg, Chief Financial Officer, Tel.: +46 8 546 102 02 The information in this interim report is such information that Intrum Justitia AB (publ) is obliged to publish according to the Securities Market Act. The information was released for publication at 7:00 a.m. CET on October 19, 2016. Intrum Justitia is Europe’s leading Credit Management Services (CMS) group, offering comprehensive services, including purchase of receivables, designed to measurably improve clients’ cash flows and long-term profitability. Founded in 1923, Intrum Justitia has some 3,850 employees and operations in 19 markets. Consolidated revenues amounted to about SEK 5.6 billion in 2015. Intrum Justitia AB is listed on Nasdaq Stockholm since 2002. For further information, please visit www.intrum.com

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