Axactor (ACR) Q4 2024 earnings summary

Executive summary

• Gross revenue nearly doubled year-over-year in Q4 2024 to EUR 161 million, mainly due to a Spanish portfolio sale; adjusted for this, revenue declined 4%.

• Cash EBITDA rose to EUR 130 million from EUR 55 million, but excluding the portfolio sale, it declined 6%.

• A significant negative revaluation of EUR 104 million was recorded, mainly impacting Sweden and Germany, leading to a book value decline of 14% quarter-over-quarter.

• Return on equity (ROE) for 2024 was -19% due to the revaluation; excluding it, ROE was 6%.

• The company maintains a solid balance sheet with a 26% equity ratio and over EUR 100 million in liquidity.

Financial highlights

• Gross revenue for Q4 2024 was EUR 161 million, up from EUR 85 million in Q4 2023; excluding portfolio sales, revenue was EUR 82 million, down 4%.

• NPL segment total revenue was EUR -59 million in Q4, mainly due to EUR 104 million in net negative revaluation; collection performance at 94%.

• 3PC segment revenue grew 5% to EUR 16 million; up 10% excluding closed operations in Sweden and Finland.

• Operating expenses for 2024 decreased by 5%, with OPEX as a percentage of gross revenue dropping from 36% to 29%.

• ERC (Estimated Remaining Collection) declined 11% due to portfolio sale and revaluation.

Outlook and guidance

• Higher collection performance is expected after the Q4 revaluation.

• OPEX is targeted to remain flat, with continued cost control despite inflation.

• Cost of funding is expected to decrease due to lower IBOR rates and bond buybacks.

• Investment in 2025 is expected at the lower end of the EUR 100-200 million target range.

• 3PC business is expected to continue solid growth at healthy margins, especially in Norway and Italy.