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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 210 275 309
Sales growth (%) -26,3 30,6 12,6
EBITDA 41 110 141
EBITDA margin (%) 19,4 40 45,6
EBIT adj 90 99 130
EBIT adj margin (%) 42,9 36,1 42,2
Pretax profit -19 48 78
EPS rep -0,05 0,19 0,27
EPS growth (%) -147,7 472,2 43,6
EPS adj 0,16 0,19 0,27
DPS 0 0 0
EV/EBITDA (x) 25,7 10,6 8,4
EV/EBIT adj (x) 11,6 11,7 9,1
P/E (x) -18,7 5 3,5
P/E adj (x) 5,8 5 3,5
EV/sales (x) 5 4,2 3,9
FCF yield (%) -41,7 -40,1 -13,7
Dividend yield (%) 0 0 0
Net IB debt/EBITDA 21,4 8,4 6,8
N/A N/A N/A
EURm 2020 2021e 2022e
Sales 210 275 309
COGS -169 -165 -168
Gross profit 41 110 141
Other operating items 0 0 0
EBITDA 41 110 141
Depreciation on tangibles -11 -11 -11
Depreciation on intangibles 0 0 0
EBITA 30 99 130
Goodwill impairment charges 0 0 0
Other impairment and amortisation 0 0 0
EBIT 30 99 130
Other financial items -1 0 0
Net financial items -57 -51 -53
Associated income 0 0 0
Other EO items 8 0 0
Pretax profit -19 48 78
Tax -8 -12 -19
Net profit -27 36 58
Minority interest 18 11 9
Net profit discontinued 0 0 0
Net profit to shareholders -9 47 68
EPS -0,05 0,19 0,27
EPS Adj 0,16 0,19 0,27
Total extraordinary items after tax -73,6 0 0
Tax rate (%) 40,8 -25 -25
Gross margin (%) 19,4 40 45,6
EBITDA margin (%) 19,4 40 45,6
EBITA margin (%) 14,4 36,1 42,2
EBIT margin (%) 14,4 36,1 42,2
Pretax margin (%) -9,2 17,5 25,2
Net margin (%) -12,9 13,1 18,9
Growth rates Y/Y 2020 2021 2022
Sales growth (%) -26,3 30,6 12,6
EBITDA growth (%) -55,8 169,7 28,5
EBIT growth (%) -63,2 228,3 31,5
Net profit growth (%) -229,2 233,1 62
EPS growth (%) -147,7 472,2 43,6
Profitability 2020 2021 2022
ROE (%) -3,2 12,7 14,1
ROE Adj (%) 10,3 12,7 14,1
ROCE (%) 2,9 7,5 9
ROCE Adj(%) 6,9 7,5 9
ROIC (%) 3,4 5,6 6,8
ROIC Adj (%) 10,1 5,6 6,8
Adj earnings numbers 2020 2021 2022
EBITDA Adj 101 110 141
EBITDA Adj margin (%) 47,9 40 45,6
EBITA Adj 90 99 130
EBITA Adj margin (%) 42,9 36,1 42,2
EBIT Adj 90 99 130
EBIT Adj margin (%) 42,9 36,1 42,2
Pretax profit Adj 33 48 78
Net profit Adj 12 36 58
Net profit to shareholders Adj 30 47 68
Net Adj margin (%) 5,7 13,1 18,9
N/A N/A N/A
EURm 2020 2021e 2022e
EBITDA 41 110 141
Net financial items -57 -51 -53
Paid tax -8 -12 -19
Non-cash items 173 164 188
Cash flow before change in WC 148 211 257
Change in WC 0 1 2
Operating cash flow 148 212 260
CAPEX tangible fixed assets -214 -300 -285
CAPEX intangible fixed assets -7 -7 -7
Acquisitions and disposals 0 0 0
Free cash flow -73 -95 -32
Dividend paid 0 0 0
Share issues and buybacks 0 0 0
Other non cash items 62 36 -5
Decrease in net IB debt -19 -50 -32
Balance Sheet (EURm) 2020 2021 2022
Goodwill 54 54 54
Indefinite intangible assets 21 21 21
Definite intangible assets 13 13 13
Tangible fixed assets 1188 1319 1412
Other fixed assets 1 1 1
Fixed assets 1276 1408 1501
Inventories 0 0 0
Receivables 8 10 11
Other current assets 11 14 16
Cash and liquid assets 20 24 23
Total assets 1315 1457 1551
Shareholders equity 299 445 513
Minority 74 8 -1
Total equity 372 453 512
Long-term debt 574 911 979
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 11 11 11
Other long-term liabilities 4 4 4
Short-term debt 319 36 0
Accounts payable 6 4 4
Other current liabilities 28 37 41
Total liabilities and equity 1315 1457 1551
Net IB debt 873 923 956
Net IB debt excl. pension debt 873 923 956
Capital invested 1261 1392 1483
Working capital -15 -16 -18
EV breakdown 2020 2021 2022
Market cap. diluted (m) 174 236 236
Net IB debt Adj 873 923 956
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 1047 1159 1192
Capital efficiency (%) 2020 2021 2022
Total assets turnover (%) 15,6 19,8 20,6
Capital invested turnover (%) 16,7 20,7 21,5
Capital employed turnover (%) 16,3 20,6 21,4
Inventories / sales (%) 0 0 0
Customer advances / sales (%) 0 0 0
Payables / sales (%) 2,7 1,7 1,2
Working capital / sales (%) -6,8 -5,7 -5,6
Financial risk and debt service 2020 2021 2022
Net debt / equity (%) 234,6 203,6 186,7
Net debt / market cap (%) 543,5 390,7 404,4
Equity ratio (%) 28,3 31,1 33
Net IB debt adj. / equity (%) 234,6 203,6 186,7
Current ratio (%) 11 63,6 110,6
EBITDA / net interest (%) 72,7 214,9 268,5
Net IB debt / EBITDA (%) 2144 840,2 676,8
Interest cover (%) 54 193,6 248,4
N/A N/A N/A
EURm 2020 2021e 2022e
Shares outstanding adj. 185 252 252
Fully diluted shares Adj 185 252 252
EPS -0,05 0,19 0,27
Dividend per share Adj 0 0 0
EPS Adj 0,16 0,19 0,27
BVPS 1,61 1,77 2,04
BVPS Adj 1,25 1,5 1,77
Net IB debt / share 4,7 3,7 3,8
Share price 0,87 0,94 0,94
Market cap. (m) 161 236 236
Valuation 2020 2021 2022
P/E -18,7 5 3,5
EV/sales 4,98 4,22 3,85
EV/EBITDA 25,7 10,6 8,4
EV/EBITA 34,7 11,7 9,1
EV/EBIT 34,7 11,7 9,1
Dividend yield (%) 0 0 0
FCF yield (%) -41,7 -40,1 -13,7
P/BVPS 0,58 0,53 0,46
P/BVPS Adj 0,75 0,62 0,53
P/E Adj 5,8 5 3,5
EV/EBITDA Adj 10,4 10,6 8,4
EV/EBITA Adj 11,6 11,7 9,1
EV/EBIT Adj 11,6 11,7 9,1
EV/cap. employed 0,8 0,8 0,8
Investment ratios 2020 2021 2022
Capex / sales 105,2 111,8 94,4
Capex / depreciation 2102,5 2881,8 2729
Capex tangibles / tangible fixed assets 18 22,7 20,2
Capex intangibles / definite intangibles 51,6 53,5 53,7
Depreciation on intangibles / definite intangibles 0 0 0
Depreciation on tangibles / tangibles 0,9 0,8 0,8
N/A N/A N/A

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Main shareholders -

Main shareholders Share capital % Voting shares % Verified
John Fredriksen 44.3 % 44.3 % 5 Jan 2021
Torstein Tvenge 3.6 % 3.6 % 11 Jan 2021
Ferd AS 2.9 % 2.9 % 11 Jan 2021
Nordea Fonder 2.4 % 2.4 % 11 Jan 2021
DNB Fonder 1.8 % 1.8 % 11 Jan 2021
Endre Rangnes 1.3 % 1.3 % 11 Jan 2021
Dimensional Fund Advisors 1.0 % 1.0 % 30 Nov 2020
Alfred Berg Kapitalforvaltning 0.8 % 0.8 % 11 Jan 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