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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 2019 2020e 2021e
Sales 285 210 266
Sales growth (%) 37,8 -26,3 26,5
EBITDA 92 41 104
EBITDA margin (%) 32,3 19,4 39,1
EBIT adj 84 90 93
EBIT adj margin (%) 29,4 42,9 35,1
Pretax profit 33 -19 39
EPS rep 0,11 -0,05 0,18
EPS growth (%) 307,2 -147,9 461
EPS adj 0,1 0,16 0,18
DPS 0 0 0
EV/EBITDA (x) 12,5 25,5 10,1
EV/EBIT adj (x) 13,8 11,5 11,2
P/E (x) 18,3 -17,7 4,9
P/E adj (x) 18,4 5,6 4,9
EV/sales (x) 4 4,9 3,9
FCF yield (%) -72,1 -43,8 -5,6
Dividend yield (%) 0 0 0
Net IB debt/EBITDA 9,3 21,4 8,5
N/A N/A N/A
EURm 2019 2020e 2021e
Sales 285 210 266
COGS -193 -169 -162
Gross profit 92 41 104
Other operating items 0 0 0
EBITDA 92 41 104
Depreciation on tangibles -10 -11 -11
Depreciation on intangibles 0 0 0
EBITA 82 30 93
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 82 30 93
Other financial items 0 -1 0
Net financial items -51 -57 -55
Associated income 0 0 0
Other EO items 2 8 0
Pretax profit 33 -19 39
Tax -12 -8 -10
Net profit 21 -27 29
Minority interest -5 18 5
Net profit discontinued 0 0 0
Net profit to shareholders 16 -9 34
EPS 0,11 -0,05 0,18
EPS Adj 0,1 0,16 0,18
Total extraordinary items after tax 0,1 -73,5 0
Tax rate (%) -35,7 40,6 -25
Gross margin (%) 32,3 19,4 39,1
EBITDA margin (%) 32,3 19,4 39,1
EBITA margin (%) 28,8 14,4 35,1
EBIT margin (%) 28,8 14,4 35,1
Pretax margin (%) 11,4 -9,2 14,5
Net margin (%) 7,4 -12,9 10,9
Growth rates Y/Y 2019 2020 2021
Sales growth (%) 37,8 -26,3 26,5
EBITDA growth (%) 99 -55,8 155,4
EBIT growth (%) 103,6 -63,2 209,1
Net profit growth (%) 781 -229,5 206,7
EPS growth (%) 307,2 -147,9 461
Profitability 2019 2020 2021
ROE (%) 6 -3,2 10,7
ROE Adj (%) 5,9 10,3 10,7
ROCE (%) 7,1 2,9 7,2
ROCE Adj(%) 7,1 6,9 7,2
ROIC (%) 4,7 3,4 5,5
ROIC Adj (%) 4,8 10,1 5,5
Adj earnings numbers 2019 2020 2021
EBITDA Adj 94 101 104
EBITDA Adj margin (%) 32,9 47,9 39,1
EBITA Adj 84 90 93
EBITA Adj margin (%) 29,4 42,9 35,1
EBIT Adj 84 90 93
EBIT Adj margin (%) 29,4 42,9 35,1
Pretax profit Adj 32 33 39
Net profit Adj 21 12 29
Net profit to shareholders Adj 16 30 34
Net Adj margin (%) 7,3 5,7 10,9
N/A N/A N/A
EURm 2019 2020e 2021e
EBITDA 92 41 104
Net financial items -51 -57 -55
Paid tax -12 -8 -10
Non-cash items 167 173 161
Cash flow before change in WC 196 148 200
Change in WC -1 0 -2
Operating cash flow 196 148 198
CAPEX tangible fixed assets -401 -214 -200
CAPEX intangible fixed assets -10 -7 -7
Acquisitions and disposals 0 0 0
Free cash flow -215 -73 -9
Dividend paid 0 0 0
Share issues and buybacks 0 0 0
Other non cash items 14 62 -7
Decrease in net IB debt -191 -19 -9
Balance Sheet (EURm) 2019 2020 2021
Goodwill 56 54 54
Indefinite intangible assets 21 21 21
Definite intangible assets 18 13 13
Tangible fixed assets 1171 1188 1223
Other fixed assets 1 1 1
Fixed assets 1268 1276 1312
Inventories 0 0 0
Receivables 13 8 10
Other current assets 15 11 14
Cash and liquid assets 75 33 28
Total assets 1372 1327 1364
Shareholders equity 281 298 332
Minority 97 72 65
Total equity 378 370 397
Long-term debt 466 587 766
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 18 11 11
Other long-term liabilities 5 4 4
Short-term debt 464 319 145
Accounts payable 6 8 4
Other current liabilities 36 28 36
Total liabilities and equity 1372 1327 1364
Net IB debt 855 873 883
Net IB debt excl. pension debt 855 873 883
Capital invested 1255 1259 1295
Working capital -13 -17 -16
EV breakdown 2019 2020 2021
Market cap. diluted (m) 300 166 166
Net IB debt Adj 855 873 883
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 1155 1039 1048
Capital efficiency (%) 2019 2020 2021
Total assets turnover (%) 23 15,6 19,8
Capital invested turnover (%) 25,2 16,7 20,8
Capital employed turnover (%) 24,1 16,3 20,6
Inventories / sales (%) 0 0 0
Customer advances / sales (%) 0 0 0
Payables / sales (%) 1,8 3,2 2,2
Working capital / sales (%) -3,8 -7,3 -6,3
Financial risk and debt service 2019 2020 2021
Net debt / equity (%) 226,3 235,9 222,2
Net debt / market cap (%) 291,6 526,8 532,3
Equity ratio (%) 27,5 27,9 29,1
Net IB debt adj. / equity (%) 226,3 235,9 222,2
Current ratio (%) 20,5 14,4 28
EBITDA / net interest (%) 180,1 72,6 190
Net IB debt / EBITDA (%) 927,4 2144,2 848,2
Interest cover (%) 160,2 53,9 170,2
N/A N/A N/A
EURm 2019 2020e 2021e
Shares outstanding adj. 155 185 185
Fully diluted shares Adj 155 185 185
EPS 0,11 -0,05 0,18
Dividend per share Adj 0 0 0
EPS Adj 0,1 0,16 0,18
BVPS 1,81 1,61 1,79
BVPS Adj 1,33 1,25 1,43
Net IB debt / share 5,5 4,7 4,8
Share price 1,89 0,89 0,89
Market cap. (m) 293 166 166
Valuation 2019 2020 2021
P/E 18,3 -17,7 4,9
EV/sales 4,05 4,94 3,94
EV/EBITDA 12,5 25,5 10,1
EV/EBITA 14,1 34,4 11,2
EV/EBIT 14,1 34,4 11,2
Dividend yield (%) 0 0 0
FCF yield (%) -72,1 -43,8 -5,6
P/BVPS 1,07 0,56 0,5
P/BVPS Adj 1,46 0,72 0,62
P/E Adj 18,4 5,6 4,9
EV/EBITDA Adj 12,3 10,3 10,1
EV/EBITA Adj 13,8 11,5 11,2
EV/EBIT Adj 13,8 11,5 11,2
EV/cap. employed 0,9 0,8 0,8
Investment ratios 2019 2020 2021
Capex / sales 144,1 105,2 77,9
Capex / depreciation 4062,6 2102,5 1943,3
Capex tangibles / tangible fixed assets 34,3 18 16,4
Capex intangibles / definite intangibles 51,6 51,6 53,5
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 0,9 0,9 0,9
N/A N/A N/A

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Main shareholders -

Main shareholders Share capital % Voting shares % Verified
John Fredriksen 31.8 % 31.8 % 30 Nov 2020
Torstein Tvenge 4.9 % 4.9 % 30 Nov 2020
Ferd AS 3.4 % 3.4 % 30 Nov 2020
Nordea Fonder 2.4 % 2.4 % 30 Nov 2020
DNB Fonder 1.9 % 1.9 % 30 Nov 2020
Endre Rangnes 1.6 % 1.6 % 30 Nov 2020
Gvepseborg AS 1.1 % 1.1 % 30 Nov 2020
Stavern Helse og Forvaltning AS 1.1 % 1.1 % 30 Nov 2020
Nordnet Livsforsikring AS 1.0 % 1.0 % 30 Nov 2020
Dimensional Fund Advisors 1.0 % 1.0 % 30 Sep 2020
Source: Holdings by Modular Finance AB