Axactor (ACR) Q3 2024 earnings summary

Executive summary

• Gross revenue increased 2% year-over-year to EUR 86.1 million, but declined 3% when adjusted for a EUR 4 million portfolio sale in Spain; total income fell 15% to EUR 54.9 million due to higher NPL amortization and negative revaluations.

• Cash EBITDA rose 6% year-over-year to EUR 59 million, supported by cost reductions and the Spanish portfolio sale.

• EBITDA was EUR 27 million (margin 48%), down from EUR 34 million last year, including EUR 0.8 million restructuring costs in Italy.

• Net profit after tax was EUR 0.6 million, down from EUR 6.1 million, with annualized ROE to shareholders at 0%, reflecting ongoing macroeconomic and funding challenges.

• NPL investments for the quarter were EUR 12.6 million, bringing year-to-date investments to EUR 94 million.

Financial highlights

• Total income at group level was EUR 54.9 million in Q3, down from EUR 64 million in Q3 2023, impacted by negative revaluations and higher amortization.

• Cash EBITDA reached EUR 59 million, up 6% year-over-year, supported by lower operating expenses and the Spanish portfolio sale.

• EBITDA margin stood at 48% due to strict cost control.

• Operating expenses decreased by 5% year-over-year, with an OpEx ratio of 33%.

• Net profit after tax: EUR 0.6 million (vs. EUR 6.1 million y/y); EPS: EUR 0.001 (vs. EUR 0.020 y/y).

Outlook and guidance

• Challenging collection environment expected throughout 2024 and into 2025, with inflation and interest rates impacting performance.

• Cost inflation anticipated to be absorbed through ongoing OpEx reductions and efficiency initiatives.

• Investment target for 2024 remains up to EUR 150 million, with EUR 94 million invested year-to-date.

• Modest reduction in funding costs expected in the short to mid-term.

• Compliance with all financial covenants as of end Q3, but limited headroom on leverage and interest coverage ratios.