Interim Report January - September 2010
Third quarter 2010
· Consolidated revenues for the third quarter of 2010 amounted to
SEK 922.9 M (1,023.2), a decline of 9.8 percent. Currency effects
amounted to ‑6.3 percent. Organic growth was ‑2.2 percent (5.2).
· Operating earnings (EBIT) amounted to SEK 211.2 M (147.2). Adjusted
for currency effects and non‑recurring items in the United Kingdom &
Ireland region in the third quarter of 2009, operating earnings rose by
11.0 percent. Revenues and operating earnings include net Purchased Debt
revaluations of SEK ‑0.8 M (‑6.5).
· Adjusted for revaluations of Purchased Debt portfolios, the
operating margin amounted to 23.0 percent, compared with 20.2 percent
for the third quarter of 2009 (adjusted for non‑recurring costs in
2009).
· Net earnings for the third quarter amounted to SEK 144.9 M (98.7)
and earnings per share before dilution amounted to SEK 1.82 (1.24).
· Disbursements for investments in Purchased Debt amounted to
SEK 263.1 M (179.7), an increase of 46.4 percent.
Comment by CEO and President Lars Wollung
Intrum Justitia is developing well given the prevailing market
conditions with a slow macroeconomic recovery, primarily in Southern
Europe. We continue to improve the Group's operating earnings, with an
increase of 11 percent in the third quarter, adjusted for currency
effects and non‑recurring costs in 2009. The operating margin
strengthened to 23 percent, compared with 20 percent for the
corresponding quarter in 2009.
In the Credit Management service line, operating earnings (adjusted for
currency effects) rose by 21 percent in the third quarter and the margin
strengthened to 18 percent from 14 percent last year (adjusted for
non-recurring costs attributable to the restructuring of operations in
the United Kingdom). Over the year, we have implemented extensive
personnel cutbacks throughout the Group and worked hard to enhance the
efficiency of our operations and increase our market activities. This is
now giving results in our Credit Management operations, which is of
course pleasing.
In Purchased Debt, we are seeing a favorable trend in existing
portfolios with a return of 16 percent for the quarter. The lower level
of investment in 2009 has had a negative impact on revenues and earnings
for the quarter. However, we are seeing increasing activity in the area
and investments rose by 46 percent in the third quarter compared with
last year.
In the region Sweden, Norway, Denmark, Finland, Baltics and Russia, we
saw a highly favorable trend during the quarter with both increased
revenues and operating earnings. Adjusted for currency effects,
operating earnings rose 10 percent in the third quarter. During the
quarter, the process of enhancing the efficiency of our operations while
increasing sales efforts has produced the desired results, particularly
in Scandinavia where we have implemented an extensive restructuring
program this year. The trend in Credit Management in Sweden and Finland
is positive, while we are now seeing the effects of reduced debtor fees
in the Norwegian market.
In the United Kingdom & Ireland region, we are showing stable
profitability and existing Purchased Debt portfolios are developing as
planned. During the third quarter, we made a small number of investments
in new portfolios, but a recovery in the Purchased Debt market has yet
to materialize.
In the Netherlands & Belgium region Credit Management services are
developing well. In local currency, the growth in revenue for the region
was 6 percent adjusted for the change in accounting principles
introduced in the second quarter.
In the Poland, Czech Republic, Slovakia & Hungary region, operating
earnings for the third quarter improved to a loss of SEK 2 M, as an
effect of the cost reduction program initiated during the year.
Investments in legal measures are having an effect and revenues from
early investments are now visible in earnings. However, we are
continuing to increase the number of cases in the legal systems,
particularly in Poland, which is increasing costs.
Although the France, Spain, Portugal & Italy region continues to be
burdened by macroeconomic conditions, performance remains good. As a
consequence of decreased Purchased Debt over the past year, operating
earnings decreased by 15 percent adjusted for currency effects. Thanks
to rigorous efforts to improve internal efficiency and intensified sales
activities, a positive profitability trend can now be seen in
Credit Management in most countries in the region.
We continue to work on cost efficiency and other measures to strengthen
profitability in the Switzerland, Germany & Austria region. We are
seeing the effects of the program of measures initiated early in the
year, although progress has been slower than expected. A lower level of
investment in Purchased Debt over the past year has had a negative
impact on earnings and revenues.
In the third quarter, we implemented the last in a long line of measures
to create a strong organization able to meet demand for value‑adding
Credit Management services throughout Europe. By creating three larger
regions, we will be able to launch new services more rapidly and derive
economies of scale within the Intrum Justitia Group. The three regions
new regions are
Northern Europe (Denmark, Estonia, Finland, Latvia, Lithuania, Norway,
Poland and Sweden), Central Europe (Austria, Czech Republic, Germany,
Hungary, Slovakia and Switzerland) and Western Europe (Belgium, France,
Italy, Ireland, Netherlands, Portugal, Spain and United Kingdom)
Today, we see that demand is increasing for services combining
traditional Credit Management with Purchased Debt. As a market leader,
with an integrated range of services in these areas, Intrum Justitia
benefits by this trend.
For further information, please contact
Lars Wollung, President and
CEO, Tel.: 08-546 10 202
Bengt Lejdström, Chief Financial Officer,
Tel.: +46 (0)8-546 10 237, mobile: +46 (0)70-274 2200
Annika Billberg, IR & Communications Director,
Tel: +46 (0)8-546 10 203, mobile: +46 (0)70-267
9791
Intrum Justitia AB (publ)
SE-105 24 Stockholm
Tel: +46 (0)8-546 10 200, fax: +46 (+)08-546 10 211
Website: www.intrum.com (http://www.intrum.com/)
E-mail: ir@intrum.com (ir@intrum.com)
Swedish corporate identity no.: 556607-7581
