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Axactor

Axactor

Axactor is a pan-European debt collector with operations in Finland, Germany, Italy, Norway, Spain and Sweden. Headquartered in Oslo, Norway, Axactor was established in late 2015 and has grown to become one of the ten-largest players in the industry, with support from its cornerstone- and co-investor Geveran. Its core business areas are purchased debt and 3PC (third-party collection), focusing on well-developed NPL markets with a legal environment beneficial for collection. Through its streamlined “One Axactor” operating model, it has developed a scalable, no legacy and low-complexity NPL platform.

We believe that Axactor and the industry as a whole will benefit from an increased supply of NPLs, further increasing the imbalance in the NPL market, leading to a prolonged period of lower NPL prices and thus increased IRRs. In addition, we see strong opportunities for growth within 3PC (third-party collection), which is capital light and highly recurring revenue. On a more company-specific note, Axactor might be attractive to private equity, given its best-in-class scalability. In addition, we anticipate improved funding cost, phased-out REOs, lowered tax-rate and increased scale to further increase earnings.

Investment risk, macro risk and regulatory risk are the biggest risks in the Axactor investment case. We see investment risk as the largest risk as we estimate that the company will have high capex going forward, and an investment into a ‘bad’ portfolio and/or company could have a detrimental impact on earnings in the coming years. Furthermore, changes in the macro environment could affect cash collection and the 3PC business.

EURm 2020 2021e 2022e
Sales 205 279 310
Sales growth (%) -28,1 36,2 11,1
EBITDA 36 113 143
EBITDA margin (%) 17,5 40,5 46
EBIT adj 92 103 132
EBIT adj margin (%) 45 36,8 42,7
Pretax profit -28 52 80
EPS rep -0,08 0,16 0,23
EPS growth (%) -177,9 297,6 39,4
EPS adj 0,14 0,16 0,23
DPS 0 0 0
EV/EBITDA (x) 30 10,6 8,8
EV/EBIT adj (x) 11,6 11,7 9,4
P/E (x) -12,4 6,1 4,3
P/E adj (x) 7,4 6,1 4,3
EV/sales (x) 5,2 4,3 4
FCF yield (%) -33,9 -22 -16,6
Dividend yield (%) 0 0 0
Net IB debt/EBITDA 24,7 8 6,7
Lease adj. FCF yield (%) -33,9 -22 -16,6
Lease adj. ND/EBITDA 0 0 0
EURm 2020 2021e 2022e
Leasing payments 0 0 0
Sales 205 279 310
COGS -169 -166 -168
Gross profit 36 113 143
Other operating items 0 0 0
EBITDA 36 113 143
Depreciation on tangibles -11 -10 -10
Depreciation on intangibles 0 0 0
EBITA 25 103 132
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 25 103 132
Other financial items -1 0 0
Net financial items -65 -51 -52
Associated income 0 0 0
Other EO items 11 0 0
Pretax profit -28 52 80
Tax -3 -13 -20
Net profit -31 39 60
Minority interest 16 10 8
Net profit discontinued 0 0 0
Net profit to shareholders -15 49 68
EPS -0,08 0,16 0,23
EPS Adj 0,14 0,16 0,23
Total extraordinary items after tax -61,1 0 0
Tax rate (%) 9,6 -25 -25
Gross margin (%) 17,5 40,5 46
EBITDA margin (%) 17,5 40,5 46
EBITA margin (%) 12,2 36,8 42,7
EBIT margin (%) 12,2 36,8 42,7
Pretax margin (%) -13,8 18,5 25,8
Net margin (%) -15,2 13,9 19,3
Growth rates Y/Y 2020 2021 2022
Sales growth (%) -28,1 36,2 11,1
EBITDA growth (%) -61,1 215,2 26,4
EBIT growth (%) -69,5 310,6 28,9
Net profit growth (%) -248,4 224,6 54,8
EPS growth (%) -177,9 297,6 39,4
Profitability 2020 2021 2022
ROE (%) -5,2 12,9 14
ROE Adj (%) 8,7 12,9 14
ROCE (%) 2,7 7,6 9,1
ROCE Adj(%) 6,9 7,6 9,1
ROIC (%) 2,2 5,8 6,9
ROIC Adj (%) 8 5,8 6,9
Adj earnings numbers 2020 2021 2022
EBITDA Adj 103 113 143
EBITDA Adj margin (%) 50,3 40,5 46
EBITA Adj 92 103 132
EBITA Adj margin (%) 45 36,8 42,7
EBIT Adj 92 103 132
EBIT Adj margin (%) 45 36,8 42,7
Pretax profit Adj 27 52 80
Net profit Adj 10 39 60
Net profit to shareholders Adj 26 49 68
Net Adj margin (%) 4,7 13,9 19,3
Depreciation and amortisation -11 -10 -10
Of which leasing depreciation 0 0 0
EO items -67 0 0
Impairment and PPA amortisation 0 0 0
EBITDA lease Adj 0 0 0
EBITDA lease Adj margin (%) 0 0 0
EURm 2020 2021e 2022e
EBITDA 36 113 143
Net financial items -65 -51 -52
Paid tax -3 -13 -20
Non-cash items 186 171 185
Cash flow before change in WC 154 220 255
Change in WC -1 1 2
Operating cash flow 154 221 258
CAPEX tangible fixed assets -212 -280 -300
CAPEX intangible fixed assets -6 -7 -7
Acquisitions and disposals 0 0 0
Free cash flow -64 -65 -49
Dividend paid 0 0 0
Share issues and buybacks 0 0 0
Other non cash items 35 42 -4
Decrease in net IB debt -31 -20 -49
Balance Sheet (EURm) 2020 2021 2022
Goodwill 55 55 55
Indefinite intangible assets 20 20 20
Definite intangible assets 15 15 15
Tangible fixed assets 1203 1309 1421
Other fixed assets 1 1 1
Fixed assets 1294 1400 1512
Inventories 0 0 0
Receivables 7 10 11
Other current assets 15 14 16
Cash and liquid assets 51 34 20
Total assets 1367 1459 1559
Shareholders equity 304 453 521
Minority 74 9 1
Total equity 379 462 522
Long-term debt 579 904 975
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 7 7 7
Other long-term liabilities 4 4 4
Short-term debt 357 36 0
Accounts payable 6 8 8
Other current liabilities 34 37 42
Total liabilities and equity 1367 1459 1559
Net IB debt 885 906 955
Net IB debt excl. pension debt 885 906 955
Capital invested 1276 1380 1489
Working capital -18 -21 -23
EV breakdown 2020 2021 2022
Market cap. diluted (m) 189 297 297
Net IB debt Adj 885 906 955
Market value of minority 0 0 0
Reversal of shares and participations 0 0 0
Reversal of conv. debt assumed equity 0 0 0
EV 1074 1202 1252
Capital efficiency (%) 2020 2021 2022
Total assets turnover (%) 15 19,8 20,6
Capital invested turnover (%) 16,2 21 21,6
Capital employed turnover (%) 15,6 20,6 21,4
Inventories / sales (%) 0 0 0
Customer advances / sales (%) 0 0 0
Payables / sales (%) 2,9 2,5 2,6
Working capital / sales (%) -7,8 -7 -7
Financial risk and debt service 2020 2021 2022
Net debt / equity (%) 233,9 195,9 182,8
Net debt / market cap (%) 551,1 305,3 321,9
Equity ratio (%) 27,7 31,7 33,5
Net IB debt adj. / equity (%) 233,9 195,9 182,8
Current ratio (%) 18,3 72 95,4
EBITDA / net interest (%) 56,4 221,4 272,4
Net IB debt / EBITDA (%) 2469,8 801,6 668,8
Interest cover (%) 39,4 200,6 253
Lease liability amortisation 0 0 0
Other intangible assets 35 35 35
Right-of-use asset 0 0 0
Total other fixed assets 1 1 1
Leasing liability 0 0 0
Total other long-term liabilities 12 12 12
Net IB debt excl. leasing 0 0 0
Net IB debt / EBITDA lease Adj (%) 0 0 0
EURm 2020 2021e 2022e
Shares outstanding adj. 185 302 302
Fully diluted shares Adj 185 302 302
EPS -0,08 0,16 0,23
Dividend per share Adj 0 0 0
EPS Adj 0,14 0,16 0,23
BVPS 1,64 1,5 1,73
BVPS Adj 1,26 1,27 1,5
Net IB debt / share 4,8 3 3,2
Share price 0,87 0,98 0,98
Market cap. (m) 161 297 297
Valuation 2020 2021 2022
P/E -12,4 6,1 4,3
EV/sales 5,24 4,31 4,03
EV/EBITDA 30 10,6 8,8
EV/EBITA 43 11,7 9,4
EV/EBIT 43 11,7 9,4
Dividend yield (%) 0 0 0
FCF yield (%) -33,9 -22 -16,6
P/BVPS 0,62 0,65 0,57
P/BVPS Adj 0,81 0,77 0,66
P/E Adj 7,4 6,1 4,3
EV/EBITDA Adj 10,4 10,6 8,8
EV/EBITA Adj 11,6 11,7 9,4
EV/EBIT Adj 11,6 11,7 9,4
EV/cap. employed 0,8 0,9 0,8
Investment ratios 2020 2021 2022
Capex / sales 106,3 102,6 98,9
Capex / depreciation 2010,6 2787,1 2968,6
Capex tangibles / tangible fixed assets 17,6 21,4 21,1
Capex intangibles / definite intangibles 40,3 44,1 44,3
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 0,9 0,8 0,7
Lease adj. FCF yield (%) -33,9 -22 -16,6

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Axactor - Company presentation with CEO Johnny Tsolis

Main shareholders -

Main shareholders Share capital % Voting shares % Verified
John Fredriksen 40.5 % 40.5 % 19 Apr 2021
Torstein Tvenge 3.3 % 3.3 % 19 Apr 2021
Ferd AS 2.6 % 2.6 % 19 Apr 2021
DNB Fonder 2.4 % 2.4 % 19 Apr 2021
Nordea Fonder 2.2 % 2.2 % 19 Apr 2021
Endre Rangnes 1.2 % 1.2 % 19 Apr 2021
Stavern Helse og Forvaltning AS 0.9 % 0.9 % 19 Apr 2021
Nordnet Livsforsikring AS 0.8 % 0.8 % 19 Apr 2021
Andrés López 0.8 % 0.8 % 31 Dec 2019
David Martín 0.8 % 0.8 % 31 Dec 2019
Source: Holdings by Modular Finance AB