Intrum Aktie

Welcome to the Intrum Q3 2026 Report Presentation. [Operator Instructions] Now I will hand the conference over to President and CEO, Johan Akerblom; and CFO, Masih Yazdi. Please go ahead.

Good morning, everyone, and welcome to this Q3 presentation. I'm here with Masih, and will take you through the results, and then we will open up for Q&A. So if we start with the highlights of the quarter. It feels like it's a Q2 event, but we actually did close the capital raise and the asset sale in Q3. And that, together, coupled with cost control, moves the service leverage to 4.5. We started the year at 5.7, and we have set out the course towards 3.0 in 2028. The negative trend on the income side, unfortunately continues from H1.

And the drivers of that is mainly that we have development not according to plan in Germany and U.K. And the German development has led that we have taken a goodwill impairment of SEK 1.5 billion. It also means that the goodwill that we used to have in Germany is now completely written off. And as we said already in Q2, we have accelerated the operational excellence program, and we're now working on a plan to take us towards SEK 11 billion on total cost already in 2027. The cost base on a rolling 12 months in Q3 is SEK 11.8 billion, and we started the year at SEK 12.3 billion.

The investment pace has developed better than expected. We are underwriting SEK 617 million onto our balance sheet in the quarter. And we have done so with an investment IRR of 17% blended which is actually higher than we expected, both in terms of volume and the returns, which is a very good sign, and it shows that we can hopefully get to replenishing levels at some stage and then make sure that the book stays flat. The servicing margin is flat year-on-year, and we stay at 25%, and we are here targeting 30% to 35% in 2030.

If we move on and talk about the servicing, as I said, the margins remain stable, and you will get a bit more details later on from Masih. And the organic growth as in Q2 in the traditional markets can only partly offset the natural decline that we have in the specialized markets. But the 2 big deviations are U.K. and Germany. The traditional markets, excluding Germany, they grew 3% in the quarter, organic growth. And the margins remain stable. And I mean, the trend that we've had in the first half sort of continues into Q3.

To give a little bit more details on what has happened, I mean, we had a plan. We think that the plan delivers, but we have 2 things that are standing out on the negative side. I mean, traditional markets, we see growth. We see the decline in Greece, Italy and Spain pretty much in line where we expected. But when we don't get the force of growth in U.K. and Germany, but rather having a decline in those 2 markets, that leads to an overall negative effect. And those are the 2 outliers that we didn't have in the original plan.

Obviously, we are now taking measures to address that. And in Germany, we have strengthened the management team during the year. We have a new commercial lead that starts next week or the week after. In Germany, we have a new management -- sorry, in the U.K., we have a new Managing Director that joined us 1st of September. He's coming from Coeo, and he has a very strong commercial focus. And we have also recruited a new commercial lead that started after summer in the U.K. And on top of that, we have also increased the sales capacity, the new sales capacity of more than 30% across the board, and we have now a much more structured and focused approach on our commercial performance. And we will continue to take actions to improve the way we execute on the top line.

What we have also done during the quarter is we have accelerated the operational excellence program. We had a plan from the beginning to do 7 countries in 2026. We started the year with a central OpEx team that has fairly limited capacity. We have now recruited a number of people so we can broaden and -- broaden the program across almost the entire group. And we are now covering 17 countries this year. And that also means that we will see more effects and we will have quicker effects in general. And this is also why we are now working on a plan to get to a cost base of -- total cost base of SEK 11 billion in 2027, and we'll come back with more details when we have our Q4 results.

Last but not least, on the investing side, the collections continue to be in line with our forecast or slightly above actually. We land the quarter at 101%. We are at 107% versus the original forecast. But more importantly, the volumes have increased already the same quarter as we closed the capital raise. And this is one of the benefits with having a stronger balance sheet and more financial flexibility. We are keeping a blended IRR of 17% in the quarter, and our investment levels are already now at the same level as they were in 2025.

And as I think we said before, and we will continue to repeat, we have an aim to reach replenishing levels, which is around SEK 3 billion annually, while maintaining the return requirements that we have. When expanding the volumes, we do expect that we will not be able to stay at 17%, 18% as we have been over the last quarters, but rather the return requirements will slightly go down, but they will still be sufficient enough for us to deploy capital. I think with that, I will hand over to Masih to take you through the financials.

Thank you, Johan. So looking at Slide 8 and looking at the group financials. In addition to what Johan already have said, just a few points. On the cost side, we have obviously an elevated level. A lot of that is driven by the impairment in Germany as well as other items affecting comparability. Those other items totaled around SEK 150 million during the quarter, and it's very much related to the acceleration of the OpEx program we're doing.

On an underlying basis, the costs are developing slightly ahead of plan given the fact that we've had a consolidation of the Savoy portfolio, which increases the cost base for 2026 by about SEK 300 million, which would take our cost target for the year to around SEK 12 billion. Right now, we're trending slightly below that, and we expect to end the year below the SEK 12 billion level.

On the net financial expense, it is now coming down on an underlying basis. If you look at the cash component of it, that is obviously driven by the capital raise and the asset sale, which reduces the debt level. So we're seeing a positive impact there. That positive impact should be a bit larger going forward as the liquidity management in the quarter hasn't been optimal due to the fact that we've done tenders and bought back bonds. So we've had to hold more liquidity on deposit accounts rather than to fully use the capital to reduce the debt.

So we should see further tailwinds on the cash component of the net financial expense in Q4 and onwards, marginally offset with the higher interest rates, which is only affecting our RCF and not the other debt as the other debt is on a fixed coupon basis. And then you can see that there's been a few one-offs on the net financial expense, mainly related to the bond buybacks that we did for '27 that were bought back above 100. So there's a negative effect there. And then we paid a consent fee to the RCF holders when we did the asset sale, which also has a negative effect.

Move to the next page, which is on the servicing income. Johan has gone through most of the things here with a negative development on the external income. But at the same time, we've had good cost control, which means that the margin is stable in terms of the 12-month outlook. But year-on-year, we see an improvement of the margin going from 22% to 24% this quarter.

Moving to the investing P&L. There's a pretty large decrease if you look at the adjusted EBIT and that is very much related to the consolidation of Savoy, which typically seasonally has a very weak Q3. Cost level in Savoy is just over SEK 100 million in Q3 with income being less than that. So there's actually a negative contribution for Savoy. That typically changes quite a bit in Q4 where Savoy has its seasonally strongest quarter, and we expect the cost level to be approximately the same in Q4, but with income and collections more than doubling. So the negative effect we had in Q3 from this consolidation would reverse in Q4 and be a positive effect instead.

Here, we should also mention that the EBIT is stronger compared to last year, very much related to the asset sale of the Orange portfolio that led to a capital gain of about SEK 430 million. On the portfolio investments that Johan mentioned, which is SEK 617 million in the quarter, we think the outlook looks pretty good for Q4, and we expect to be able to be above that level with similar levels of returns in the next quarter. That's going to be dependent on 1 or 2 deals that could be binary, but assuming that everything goes according to plan, we expect to be able to improve volumes further.

And then on the cost development on the next slide, obviously, we've had a good development over the past couple of years with personnel expenses coming down by 20% and other costs by 14%. We are obviously continuing to work on this. We expect this development to continue and accelerate a bit in 2027 compared to development we've seen in 2026. You can already see in the Q3 numbers that there is a slightly larger decline of the FTE base in Q3 versus what we've seen in the last couple of quarters. That should accelerate further going forward. This has led to some restructuring costs that we've taken in Q3, and we expect these costs to be clearly higher in Q4, which will enable us to transform the business faster. And again, we will come back with further details, but the plan is to approach about towards SEK 11 billion in total cost in 2027.

And then if I summarize the quarter, obviously, the main priority for us as a company is to delever. We are doing that right now, obviously, help with the capital raise and the asset sale. But going forward, the deleveraging will be fully driven by the organic development. We've had this large goodwill write-down in Germany, and we are accelerating the operational excellence program. On the servicing side, we continue to see, unfortunately, the negative external income development, mainly driven by U.K. and Germany, but we are able to offset that by reducing the cost level and therefore, keeping the margin largely flat.

On the investing side, we see an acceleration of investments. We expect that acceleration to continue. For now, if returns are stable at high levels, we expect returns to come down, but still be at sufficiently good levels for us to do these investments.

With that, we'll stop and open up for Q&A.

[Operator Instructions]

The next question comes from Patrik Brattelius from ABG.

Can you hear me?

Yes.

Yes. My first question is on servicing. You had a chart there on Slide 4, explaining the difference. Could you break it down a little bit on the underlying dynamics here? You flagged that traditional markets is improving and growing, while Greece, Italy, Spain, and U.K., Germany are reducing. Can you talk about a little bit how you see the risk of more markets moving in the same direction as the markets that are falling in growth or the opposite way? What needs to change in the U.K. and the German market in order for them to come back to growth, the underlying dynamics in your view here?

I mean if we start with U.K. and Germany, I mean, U.K., if we look at the background, U.K. comes from a history of acquisitions, right? There was a big acquisition done a couple of years ago, and then we've been working on that integration. Then unfortunately, we had one of our larger clients that was acquired and then they decided to move the servicing during last year, and we were expecting that we could offset part of that with new clients coming in. That transition has just taken longer. And we've also been -- to be fair, we haven't had sort of a firm leadership because we've had the last MD left during 2024 and the new MD now started this fall.

So U.K. is now continuing its integration and continuing its transition from a BPO to a more traditional NPL player. And with that, we also expect that the efforts were taken will start showing going forward. Germany is another story. Germany, there we have operational issues, and we're basically rebuilding the platform. We're changing the infrastructure. And Germany is more an effect of sort of not being able to have the right setup in order to facilitate growth. And we thought that we had that. Now when we have spent more time with Germany, and we also have the sort of the new management working on it, we can clearly see that there needs to be a complete rebuild, and that's what we're doing.

Coming to your question around do we have other markets. I mean, the bulk of our markets on the traditional side, they are organically built. I mean they have no sort of legacy of big acquisitions, big mergers. So -- and they also have seen a number of quarters in a row where we see growth. And then you have Greece, Italy and Spain, which I think we all know how they've been built up and what the history is. So -- and there, we have a very good view on how they will develop going forward.

So I think that's how we see it. If we would have had U.K. and Germany performing according to our plan, then the negative income growth that we are now seeing in Q3 would have been much less of an issue.

And going back a little bit to the financial plan laid out in Q4, we discussed flat development in servicing to then gradually increasing and accelerating later on. We have now talked that it will rather shrink in 2026. How should we think about the growth trajectory from 2026? Will -- are you aiming for more flat ambition in 2027? Or do you still believe that you can start to achieve growth looking into 2027?

Patrik, I'll take that one. I think given that the development so far this year has been more negative than we expected, we want to be a bit humble in terms of giving any forecast for 2027. What I can say at this point in terms of our expectations is that we expect the traditional markets to continue to grow going forward. And we expect the Southern European markets, Greece, Spain and Italy to, on average, continue to have a decay.

At the same time, when you look at the U.K. and Germany, we believe that going into next year, the comps will be easier. We believe that we are approaching the trough in those 2 markets. So the comps will be easier for those 2. And I think the goodwill write-down in Germany and not doing the same thing in the U.K. gives some indication as well that in Germany, we probably have a larger structural challenge to grow, whereas in the U.K., we believe that this is more cyclical and in the long term, we have a plan and we have more conviction that, that market can grow.

What a net effect of all of this is, we'll have to come back with. But in terms of the overall development, it's difficult to see that it's going to be as negative as this year as, again, it's driven largely by 2 markets where we've seen most of the headwinds already, and it's difficult to see that those headwinds continue into '27.

The next question comes from Björn Olsson from SEB.

So first, if we just -- I mean, extrapolating basically your baseline growth trajectory from here with the SEK 11 billion target, '27, how would you expect that the servicing -- how should we view the servicing margin impact then? I understand that it's moving parts, but still from a sort of -- from your perspective, are you defending the margin? Or do you expect it to pick up?

Björn, well, if you look at this year, we've had a clearly worse development on the servicing top line than we expected. And despite that, we've been able to keep the margin largely flat. It's actually marginally up quarter-on-quarter despite this negative organic growth. Obviously, going into next year, we don't expect the organic growth to be as negative as it is now. And simultaneously, we're accelerating the cost reductions. So in terms of our expectations, that dynamic should lead to the margin going up.

Now obviously, overall, it's the combination of the margin and the income you generate that is most important. You can always defend a high margin. But if your income is coming down simultaneously, you're just generating less cash flows. So obviously, we want to see an improvement of the margin simultaneously as the income improves. But overall, I would say that our expectation is that the margin will go up next year as the cost reduction should be larger than any downside risk we have on the income side.

Okay. That's clear. And then just second, I mean, you sort of hinted that you in Q3 had roughly SEK 150 million in redundancy costs and that this will be higher in Q4. Could you give any flavor of the size in Q4?

Well, as we say in the presentation, we're working on the plan. It's not finalized yet, and it's going to be finalized in December when it's approved by the Board. So as long as that's not the case, we can't give you a firm number. I think I can say at this point, it will be clearly higher than what we had in Q3. We're just started the work, and we've been able to take the restructuring that we have already identified, but there'll be more of that coming in Q4. You'll have to wait until that report before you see the full disclosure of that number.

The next question comes from Johan Ekblom from UBS.

The first question is really thinking around leverage and your refinancing plans. I mean it's been a difficult market over the last 2 or 3 months, and we've seen significant increase in high-yield credit spreads, et cetera. How has this impacted how you think about the refinancing? I guess it's relatively little left for '27. But when you think about the optionality you have and timing of dealing with the '28, et cetera, maybe if you can talk a little bit about that.

And the second question would be around Spain specifically. I mean there's been some press stories that you're looking to potentially sell the majority of your Spanish business. Do you have any comments to that? And then just if I could bring that back to, I think Masih said in Q2 that the Spanish business is significantly less profitable than the servicing business overall. Is that still a valid comment? Or did I misremember that?

I think Johan, I'll have Masih start on the first one, and then I'll take the second.

Yes. So on the leverage and the refinancing, I mean, you're right. The market has clearly become more negative over the last couple of months. I think one positive aspect of that is that we did refinancing in July when the market still was strong, and we were able to refinance the 1.5 lien bonds that we have maturing in 2027 at sufficiently good levels. In the market we have today, there are very few high-yield issuers that go out to the market. And you have that over the course of a year that happens a couple of times. So you have to be prepared for the market not really being open to you.

I'll just repeat what we've said about the refinancing. So we have a bond maturing in '27. That's about EUR 190 million. We have liquidity to cover that, and we will do that when that comes due, and we won't refinance that. And then the next refinancing need we have is for 2028. So that's almost 2 years away. We're working on that refinancing. We've said in the past that the RCF we have will be materially smaller when we refinance it, and we will make up for the shortfall of the smaller RCF by issuing bonds. And the market we have now is not a market where we will do that in.

So irrespective of what plans we could have had in the past, it is not a market where we will refinance in because the financial cost of that will be too large. But typically, what happens is that you have these kind of episodes in a year, a couple of months with a very sort of lukewarm market with less activity, and you have to be patient and wait for the market to recover and become better. The aim for us is to refinance before the RCF and the bond in '28 becoming current, which is by next summer. So we feel that we have at least time until then to finalize that refinancing.

And obviously, it's difficult to see that the market will be the way it is now for another 9 months. So hopefully, we'll be in a better market at that point. We have a plan, if we look at it now, that will help us delever in the next couple of quarters. We think that we have an organic plan that will enable that. So hopefully, both the market will be better, and we will also be in a better position as a company to refinance when that comes due.

Is there anything preventing you from buying back '28 bonds at a discount?

No, there's nothing preventing us from doing that. We can do tenders. We can buy back bonds '28, '29, and 2030s. We are obviously looking at that. We mentioned that. We did that in Q3 -- during Q3, and we're looking into doing that as well. There are no decisions being made on if we buy and how much we buy and what bonds we buy. We need to manage that together with the liquidity needs we have. I think what's changed marginally since we did the last tender, I mean, spreads are wider, so it's cheaper to buy back.

But simultaneously, we've seen more activity on the investment side than we expected back then. And then it's a balance between having liquidity to do those investments and the returns you can expect on those investments and then the returns you can expect on buyback bonds. So obviously, we keep looking at this and we'll be opportunistic in what we choose. But I think the change really is that we see a bigger potential to invest more than we expected a few months ago.

Okay. And then on the second one, which is around Spain, I mean, there will always be rumors in the market. And I mean, in general, we don't comment on the rumors. I think we said before that we have an organic plan and the organic plan is our base case. And then obviously, if things happen where we can extract value as we have done, for example, with the sale of the Orange portfolio, the back book we sold to Cerberus, we will obviously explore it. And you're right, the Spanish market -- the Spanish servicing market has, in general, a lower margin than the average margin we have in servicing overall.

The next question comes from Ermin Keric from DNB Carnegie.

So if we start on the cost execution, it looks like you're talking about it taking about 1 year to execute and you're talking about SEK 11 billion of full year cost for next year. So what do you expect the run rate to be by the end of '27 then?

Ermin, the run rate, I mean, approaching SEK 11 billion, given the fact that, that's sort of the average level for next year, the run rate by the end of the year should be lower. So it gives us a good fundament to move into 2028 with a good cost trajectory. Exactly what the run rate will be, I can't say at this point. As we've said, we are working on the plans, and we haven't finalized those yet. I think a good assumption is that we will move into 2028 roughly having around 1,000 fewer FTEs than we have today.

Got it. Then on the organic development, I mean, you're talking about increasing sales capacity, I think you talked about 30%. How long lead times do you expect for that to actually come to fruition that's visible in the top line?

I mean we assume if you hire someone on the sales side, on the new sales side, it usually takes between 6 and 12 months depending on, first of all, the experience, their network, but it's also a little bit dependent on the outside factors like are there big tenders in the market. So it's not only dependent on our internal capacity, it's also depending on the demand in the market and the cadence and the pace of bigger servicing contracts being out there.

Got it. And lastly, you touched upon a little bit already, but could you discuss a little bit more on your thinking between the balance, I mean, doing bond buybacks and investments of new portfolios. If you see the 17% IRR currently, how much more can that come down before you feel that it's not really worthwhile given where your incremental funding costs are right now if we just look at market pricing?

Yes. I mean, you're right, it's a balancing act. It's a balancing act between the returns we get and what we can get in terms of buyback bonds. And then it depends on what kind of investments we're doing. Again, we can always invest on our own book or we can co-invest together with Cerberus. And if we co-invest, we get servicing revenues as well, which gives you an uptick on the IRR. So it's not a sort of clear science around it.

We've said that we will invest only when it's sufficiently above the funding cost that we have. So that still holds. And we will try to find a -- strike a balance. So we won't invest at a pace that doesn't allow us to take debt down nominally. That's something we want to do quarter-by-quarter to reduce the debt in absolute terms, but also reducing the leverage. But at the same time, we want to keep the investment pace at a sufficiently high level for the investment income to not be a large headwind for us.

But again, it's not scientific in the sense that we know the exact number. It depends on what kind of investments we're doing, what kind of servicing revenues that also can generate, but obviously on where our bonds trading as well. But if you -- Yes. So the balance will be reduce debt, improve leverage, but also have as little headwind on the investment income as possible.

[Operator Instructions]

The next question comes from Sameer Shah from Citigroup.

Just go back to the specific point on the debt side and your plans for refinancing the RCF. Just in terms of potential timing for any future tenders, can you just confirm that you could launch whenever you wanted based on when you see the best use of capital? And the second question is a specific point in the new bond that you issued, which is the 2031 1.5 liens, you have the concept of an incurrence ratio test. But my understanding is that so long as the current second lien debt remains outstanding, you can't make use of that 3.5x ratio. So can you advise us a plan on how you're going to incur that incremental debt to help with the lower RCF size?

Thanks, Sameer. Your sound was pretty low, so I'm not sure if I caught everything you said. On the RCF refinancing and potential tenders, I think the only sort of balancing act there is that the more tenders we do the less liquidity we would have. And therefore, that would put a limit on how much we could reduce the RCF when we have a new RCF in place. So we have to find that balance there. That's what we're thinking about.

So right now, the planning scenario is that the RCF will be probably less than half than the current RCF. And then we need to think about then how much liquidity do we need to enable that and how large of a bond do we need to issue when we reduce the RCF to half of the current level. So that's the balancing act we have in mind. Other than that, I can't really comment on it. On the 2031 bond that we issued, when our leverage is below 3.5x, we can issue new bonds, any outstanding bonds that we have today on the second lien layer, we can refinance that on the 1.5 lien layer. That's correct. I'm not sure if that answered your question, but there is no limitation on us doing that if the leverage is below 3.5x.

But just to be clear, that your total leverage, not just 1.5 lien leverage?

Yes, that's the total leverage.

Fine. So as of today, you couldn't incur more 1.5 lien debt to refi the second liens?

Exactly.

The next question comes from Robert Dinic from DNB Carnegie.

Just one for me, and it's that one of your large servicing peers have stated that they will target some of your tenders, specifically in Intesa, Danske, and Piraeus over the coming few years. And so my question is, how have you accounted for these sort of large tenders in your business plan? I mean, have you assumed that you win them? And if yes, at what margin compared to today?

I mean I think we know what you're referring to. First of all, some of those contracts have already been prolonged, so they're not even on the market. And then secondly, we take a probability approach on any big contracts and how we can roll them over. And then at the same time, we also take a realistic approach on what margin we can assume. Some of those contracts has very healthy margins. Some of those contracts has very unhealthy margins. So it's a pretty mixed bag of opportunities.

And maybe just one final question. On the 1.5 lien, the refi, is there any limitation in the second lien box in your understanding for doing new 1.5 lien bonds?

Yes. I mean there is limitation, as we said before. So we can only do it if the leverage is below 3.5x. Overall, indeed, for the second lien, you have to ask for consent to put anything in front of them. So that's the limitation here.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

So thank you for listening. Thank you for taking the time. Thank you for the questions. We will speak again when we report our Q4 numbers in January, if I'm not mistaken, actually, I think it's February, sorry, it's beginning of February. So have a great day, everyone. Thank you. Bye.

Welcome to the Intrum Q2 2026 report presentation. [Operator Instructions] Now I will hand the conference over to CEO, Johan Akerblom; and CFO, Masih Yazdi. Please go ahead.

Thank you, and good morning, everyone. Welcome to this second quarter report call. We start with the first page where we want to do a couple of highlights. I'd like to comment that, I mean, this is the second quarter where we are executing on our new strategy.

The #1 priority when we introduced our strategy was how to improve the leverage and the balance sheet of the company. And as you all know, a huge amount of work has been dedicated to do exactly so in Q2 with the capital raise and the SEK 2.4 billion portfolio sale. And we have also seen the effects of that by Standard & Poor and Moody's improving our credit ratings. The operation -- sorry, the service leverage ratio on a pro forma basis has moved from 6.2 to 4.3 and the long-term target is 3.0. We also see that our operational transformation is continuing to pay off.

Our costs are developing according to plan. And when looking at F fees, which is one of the things that we are working with making our processes automated or [ AI ]or just more efficient has reduced by 8% year-on-year. Our total costs are currently at 11.9% on a rolling 12-month basis. And the target in 2030 is 10% to 11%, depending on our Servicing income. The growth that we have in our traditional markets, we see the fourth quarter of growth.

We see actually higher growth in this quarter than previous quarters, but it's not sufficient to offset the decline that we have in the specialized markets. And therefore, given that we had a negative growth in Q1 as well, even though it was higher than Q2, we do see that it's going to be more challenging to achieve the largely flat Servicing income that we want to achieve in 2026. The Servicing EBIT margin remains at 25%, and the target is 30% to 35%.

Stable margins on the Servicing. I mean, we are now at 25%. We've been at 25% for, I think, the third quarter in a row. And we have good organic growth in the traditional markets. We maintained a strong cost discipline, but we will now accelerate on the cost side. So we will accelerate our progress -- or sorry, our operational excellence program, and we will include more countries going forward. We have 5 countries right now that operates under it, and we will see how many countries we will have by the end of the year, but it will be a material increase versus today.

To illustrate a little bit more the dynamics around our external Servicing income, you can see here that, first of all, the Savoy consolidation, it moves basically external income to internal income. So you have a minus negative 1% there on a year-on-year comparison. The specialized markets, they go down 4%, of which organic growth is 6%, and the traditional markets, they held 2% up on a total basis with an organic growth of 5%.

The decline, as we discussed many times before, is in particular, in Greece and Spain and partially in Italy. And then U.K. has a performance that is impacted by slower and delayed new sales. So it's actually slightly different dynamics depending on which country you look at. In the traditional markets, which is 45% of the income, we have organic growth of 5% and most of them are growing, and we have a couple of top contributors.

We do, however, see a challenge right now in Germany, where we have had issues both with onboarding of new clients, which has been taking much longer than expected. And we also have a bit of performance challenges with some of the existing clients. But we're doing a transformation to get this fully in line, and there could be more potential on how we stabilize that going forward.

On the operational excellence program, we launched this in Q1. It is essentially a group-led program where we execute locally. And we move the traditional bespoke model into the next gen, which is much more standardized, which is automated and where we have a lot of AI support to make it as efficient and effective as possible.

We have an ambition to significantly increase the efficiency. We have on the FTE-based cost base in scope, a 30% to -- 35% to 40% ambition over the next 3 years. We utilize all the new technologies, but we also use all the technologies to make sure that we get the best possible outcome, and we spend a balanced amount versus the outcome that we expect. And performance management is obviously very important when we then start tracking our lower cost to collect.

The good thing is that the identified savings are actually exceeding the ambition. So we see that the impact could be bigger than we anticipated from the beginning. But we will now, as said, accelerate this, expand it and do more countries in parallel. We center this, and I think we talked about this in Q1, there are 3 different buckets that are material, and that's where we focus. It's document management, it's e-mail management or e-mail automation, and it's also around how we deal with calls.

And everything -- not everything, but a lot of things that we try to build are things that we can then scale across the different markets that we have. So we don't build a bespoke solution. We build generic solutions. We implement them locally and then we export them to the next country to get the scale and the synergies in the group.

Investing, we haven't talked much about, but we did SEK 197 million, which is according to the previous ambition. We did it at 19%. We are still very disciplined in our execution. And the collection has been SEK 102 million in the quarter versus SEK 100 million in Q1. What you see on the page is the rolling 12 months.

So the collection has actually improved Q-on-Q. And of course, now we need to ramp up with the capital raise. I mean with the increased financial flexibility, we have an ambition to make these volumes higher. And we are already working on a number of interesting deals, and we are confident that they will materialize in the second half.

So with that, I'll hand over to Masih to go to take you through the financials.

Thank you, Johan, and good morning, everyone. I think Johan has gone through the highlights, but just to mention a couple of things. Obviously, income is coming down, both on the back of negative growth in Servicing as well as the investment book. Obviously, the plan going forward is to change the trajectory on both of those by investing more and at some point, getting organic growth in the Servicing business.

I would comment on the cost side. It is down 2% year-on-year. It was down more in Q1. One thing to flag there is that the consolidation of Savoy is leading to about SEK 100 million higher costs this quarter compared to Q2 last year. And I think that's something you should expect for the full year that it's going to be around that level per quarter, which means that the cost level, we are on track on the plans we have, and we will try to offset parts of this. But nevertheless, moving Savoy from the JV line to the income and cost line leads to this impact on the cost side.

On the underlying development, we are fully on track with the plans and the targets we have set for the full year. I just mentioned also on the numbers that on the net financial expense line, we have a reversal from Q1 of about SEK 300 million, which is helping that line. But also as of May, we are doing hedge accounting on the FX swings we have. So in Q2 and also going forward, the FX effect on our debt and the net financial expense line will be less than it has been historically.

I think if you take Q2 as an example, we've offset about SEK 400 million of FX swings that otherwise would have materialized on this line. On the tax expense, it's a bit elevated this quarter. That's related to a tax -- one-off tax expense in Italy that is part of a tax audit that's built with the previous years, so back a few years. That's a one-off cost of almost SEK 100 million in the quarter. We're showing a positive net income, which is obviously good, but the ambitions are clearly higher for the future.

On the Servicing side, I mean we've gone through most of the numbers. There's a negative minus 3% fully, but the organic growth is minus 2% and the Savoy consolidation is minus 1% and FX is neutral in the quarter. On the cost side, that is coming down in line with the total income, so which means that overall, year-on-year, if you look at the running 12 months, margins are stable at 25%.

Obviously, given that it's a bit more challenging on the top line on Servicing to have the margin improvements that we're looking to get until 2030, we need to do a bit more on the cost side to keep this stable and moving in a positive trajectory. And as Johan said, we see growth in traditional markets. That growth is higher than it has been in the last few quarters, but it's being more than offset by the specialized markets for now.

On the investing side, same kind of trends we've had previously as we keep having less new investments compared to what is amortizing, which means that we have a headwind on the income side. Going forward, we are planning to increase the investment pace and at some point, offsetting that headwind. I think it will probably -- we see a better deal flow now.

We see that we are engaging in more investments, but it will take a couple of quarters before you see that coming into the numbers as there is a delay between engaging in new investments and getting those signed and onboarded. So you should expect that it will take a couple of quarters before you see the investment pace actually picking up in the numbers we report, also obviously due to the fact that there's been summer months and the capital raise was just executed in July.

And as Johan said, obviously, SEK 194 million -- 197 million of new portfolio investments, high blended IRR. Obviously, with the higher investment pace going forward, it's very likely that the blended IRR will start to move downwards, but we will be disciplined in our execution, and we will make sure that the IRR is nevertheless clearly above the cost of funding that we have, especially when we take into account the co-investments we do with Brocc, where we typically get Servicing revenues as well, and we look at consolidated IRRs, including both the investment revenues as well as the Servicing revenues. That's it for me.

I'll ask Johan to summarize the quarter before we open up for Q&A.

Yes. So wrapping up, I mean, obviously, the highlight of the quarter was the capital raise and the portfolio sale, even though both of them finalized fully beginning of Q3. We have the continued headwinds in the specialized markets, and we're working there to make sure that we can protect as much of the bottom line as possible. It will be more challenging given the Q2 results to achieve the largely flat Servicing income in 2026.

And we are accelerating our operational transformation, which is also, I think, a tool in order to improve our growth trajectory going forward because the more competitive we become, the more attractive we become from the commercial standpoint. Servicing income outlook is slightly behind plan. We have stable adjusted EBIT margins and the quarterly collection index is higher this quarter than before. It's above our active forecast and the investment pace is increasing post the capital raise.

So I think with that, we can open up for questions.

[Operator Instructions] The next question comes from Patrik Brattelius from ABG.

So my question is regarding Servicing, in particular, in Greece and Spain, as you highlighted as challenging. Could you talk about how you view these challenges as temporary? Or are there more structural issues that you believe can continue into 2027?

As we have talked about this before, but before you have yet said that you expect Servicing to be flat in 2026. Now you are a little bit softer on that guidance. So do you still think that this can turn around? Or how should we think about this into -- going into the second half of 2026?

I mean the fundamentals of the business in Spain and Greece are different. In Greece, we have a big platform on the back of the Greek crisis. We're working with one of the main banks in that country. Here in Greece, it's very much around making sure that we operate more efficiently and we protect the cash flow. There is a limited amount of new business to be made at this point. It could change.

In Spain, I think there's 2 dynamics. One is we do have a big exposure towards the real estate, and we're servicing a big real estate portfolio. I mean we're the biggest real estate servicer in the country. And as we all know, the real estate crisis in Spain is behind us and the real estate market in Spain is booming, which means that we are very successful in executing on our Servicing mission. But the more we sell, the less sales we have ahead of us. So on the real estate side, it's about, again, also restructuring and rightsizing that operations.

And then on the NPL side, we do have room to grow and -- but we will not be able to offset the real estate decline with the NPL growth in the short run. However -- so basically, those are the dynamics, and that's nothing new. That has been the case now for a longer time, but that's how it looks like.

And then the other markets, there we have definitely room to grow, and we are growing. And then as we said in the report, U.K. and Germany are 2 markets where we have been underperforming, and we need to turn that trend around.

And then my next question would be a little bit on this investing side. On the slide, you highlighted, Johan, that you've done interesting deal on the pipeline. Could you elaborate what makes them interesting and what you are primarily focusing on when you're going to allocate this capital from the capital raise going further? Are you -- is it portfolios or are you more focused on co-investment? Could you give some color there, please?

It's both. I mean we will continue to co-invest. I mean we are working a lot with our main partner, Brocc. And we also closed a deal in Q2 in Hungary with a co-investor. We think the Hungarian market has potential. I mean, after the change of government, we see that there are some reforms that can open up the investment space even more. But in general, we have a -- I mean, we've always had an ambition to invest, but we've had limitations in terms of prioritizing our cash flow and our CapEx.

Now we have much more flexibility. So I wouldn't say that we are doing anything fundamentally different. It's just that we can be much more forward leaning in our investment approach, but we will still stay disciplined. So it will be a mix of doing our own and doing with capital partners.

And I think the major difference is that now we can actually do larger deals with some of our bilateral partners on a stand-alone basis if we think that there's an attractive return. Those are the type of deals that we tried to sort of resource before and keep the Servicing. Now we can actually bring them on our balance sheet.

And in terms of geographical mix, are there areas where you see better opportunities versus areas where you do not want to allocate capital at the moment as the competition is too high? Anything regarding that?

No. I would say there's a tough competition in most markets, and we are active in all markets. So no, as long as we are present and we have comfort in the underwriting, we're ready to do transactions.

The next question comes from Björn Olsson from SEB.

Johan, in your CEO letter, you flagged that you're accelerating your efficiency program given the weaker top line growth. Should we view this that are you changing the 2028 potential targets? Or are you rather steepening the curve path to reach those targets?

Björn, I think I can take that one. I mean if you look at the long-term target we have on the cost side, we do say it's going to be somewhere between SEK 10 billion and SEK 11 billion. And we set that interval based on obviously having -- this is a very long-term target and not knowing exactly how the income is going to develop until then.

And we, at that point, said that if income is higher, we'll probably be closer to the SEK 11 billion and income is lower, it's going to be closer to SEK 10 billion. And now when we've had a couple of quarters where income is a bit behind plan, and we now see it challenging to reach the target or the guidance we've given for the full year, then obviously, that means that to any extent we change now in our trajectory, we're more moving towards the lower end of that target. But that's by 2030. Exactly how the trajectory will look like until then, it depends on business momentum to some extent because the more income we generate, the more variable costs we will have associated with that.

But I think you should sort of see that as indications that the slightly softer top line means that we will need to have a trajectory towards the lower end of that target. And then in the next quarter or second half of the year, we'll come back on the cost trajectory for next year and what we see in front of us.

Here and now, what we're saying is that we're accelerating the program. I don't think you should expect any implications on the cost for '26 on that acceleration. It's really just moving in more markets than we had planned into the transformational program earlier than we have planned. And therefore, we should see a benefit of that post this year rather than already this year. But exactly what the benefit will be and how fast that will come, we'll come back with.

Okay. And are there redundancy costs associated with this. So should we expect this to actually have a sort of a negative impact on '26 numbers, I guess, slightly or...

That's possible. I think we've said that on the back of the capital raise that if the capital raise with the financial flexibility that, that gives us, we will look into whether we can accelerate any of the plans that we had. And it is possible that, that acceleration both leads to some investments, but also to get the efficiencies faster, it could lead to redundancy costs. But that's something we will then potentially come back with when that is more clarified.

Okay, clear. And on the investing side, your amortization rate jumped to 43%. I guess it reflects the maturing portfolio. But should we expect the to go to stay at this level? Or should it continue north? Or how should we view this trend?

I mean the more -- if we can increase the pace of investments, that will obviously have an impact on the amortization curve depending on what type of portfolios we buy and how they pay back. I think the biggest impact in this quarter is probably on the back of Savoy, which has had an impact on the overall amortization rate.

The next question comes from Johan Ekblom from UBS.

I just want to come back to the Servicing dynamics between your -- between Greece and Spain and kind of the rest of the group. If I look at your '25 annual report, Spain and Greece are a little bit more than 1/3 of your external revenues. Can you help us dimension the slide you provided today on a forward-looking basis?

So whether it's next 12 months or by '28 or how much further headwind should we expect from Spain and Greece so that we can kind of see how that has developed. I think that slide is helpful, but it would be really useful to see kind of how that's developed over time. Is the market getting smaller? And when do you expect that to finish?

Yes. I mean I can try to answer that. Maybe we can give you a bit more disclosure in the future. it is correct that -- I mean, that's a dynamic you have. I don't think you should expect any change in that headwind, especially in Spain. I think that headwind will continue.

And what we have and the task is to show organic growth that is really driven by not to a large extent, sort of reducing the headwind in Spain is more offsetting that headwind with stronger growth in the traditional markets than we've had historically. That's really the task we have. That's one dimension. The other dimension is obviously that assuming that Spain continues to decay, which it will, it will become a smaller share of the total revenues.

So what we need to do in the traditional markets in terms of growth becomes sort of less and less moving forward and it's going to be less in '28 than it's in '26. So from that perspective, even though obviously, it will be better to have a Spanish business that grows, we don't -- it doesn't require as much growth in the traditional markets to offset that.

I think Greece is more stable. It will probably also have a slightly negative growth rate, but it's not to the extent that you have in Spain. So the dynamics there are quite a bit different. And in U.K. is very different in the sense that we aren't doing extremely well in the U.K. today. So I don't see that as a specialized market in the same kind of way you would look at Spain. It's a market where we can grow going forward. It's a different type of business.

Do you think Spain will be in line -- most of your countries are kind of SEK 0.5 billion, SEK 2 billion in revenues. Spain is SEK 2.5 billion or was SEK 2.5billion last year almost. Is that where we're heading? Or is Spain structurally a much larger market even with the current dynamics?

Spain will become less of an income contributor in the future than it's been in the past. That's clear. But that will also then make -- the headwind will have less of an impact overall. So we're basically rebuilding Spain and Spain will not have as profound impact or part of the overall income as we had in the past.

I mean there are different dynamics. So if you take Greece, Greece is a strong contributor to the group in terms of both income as well as margin and profit. whereas Spain is a big contributor on the income side, but not on the margin side. It's actually a negative effect on the margin side. So a smaller Spain is clearly negative on the income side, but it doesn't have the same kind of magnitude on EBIT, for example, as Greece would have.

Yes.

And secondly, Bloomberg reports this morning, you've launched tenders on your '27 and '28 bonds. Can you update us on what you're doing and how we should think about kind of the refinancing story over the next 6 to 12 months?

Yes. I mean this is very much in line with the refinancing strategy that we have. We have obviously refinanced the 1.5 liens for '27. That's done and extended to 2031. But we have the second lien bonds outstanding. And we're planning to -- with the tender we are doing today to reduce that outstanding amount.

And we will use some of the liquidity we have today to do that, and we will use the remainder to buy back '28, the second lien as well. That will help us from an interest expense perspective because the -- obviously, the coupon we're paying on those bonds is higher than the interest we get on deposits when we have liquidity or the interest we pay on the RCF when we draw on that one.

So we will -- this is a way of reducing the interest expense, but also a way of managing the shorter maturities. And you should expect these kind of actions to come in the next 6 to 12 months in addition to the discussions we will have with banks on the RCF. That is something that is ongoing, and we'll continue to work on that as well. So the priority now is to minimize the shorter-term maturities, especially the '27 and then obviously refinance the RCF at some point.

The next question comes from Ermin Keric from DNB Carnegie.

So you mentioned the 35% to 40% FTE cost base reduction in targeted operations. Could you quantify that more like in relation to the total FTE base or something to get a better sense of how we're expecting to take out, please?

Yes. I mean, the best guidance we can give you, this is -- this program and what we're doing in the program is in line with the cost target we've given for 2030. So I think you can on the sort of back of the envelope, calculate what it requires in terms of FTE reduction to get to that level.

Obviously, there are other factors you have to put into account here. I mean, one is salary inflation for the FTEs we'll have at that point in time until then, and you have also some investments we'll have to do. But we've talked about the automation we need to do in operations. It will mean that we will be fewer FTEs in the operations business, clearly fewer, I would say, by 2030 than we are today.

In actual numbers, I mean, I don't want to give any clear numbers on it, but it's a large share of the part of the operations that this is targeting. But in total, we have about 6,000 people in operations today and automating those processes will lead to that FTE number coming down fairly significantly.

Got it. And on the more short term, you highlighted how Savoy has increased the cost base by, I think you said SEK 100 million. The full year guidance you had for costs down 5%, that still stands still, even including Savoy? Or has that changed?

Well, the underlying cost, that clearly still stands. We have an ambition to offset some of that sort of technical increase that we get from Savoy now being consolidated. I'm not completely sure that we'll be able to offset the full amount. I think for us, it's really the underlying cost development that we look into and what kind of underlying cost base we go into in 2027 that we look at. But that change in accounting could be difficult to fully offset in 2026.

Got it. Then I see that one of the markets you've started the operational excellence program. And you also mentioned you've had some performance challenges there.

Germany.

Yes. Is there any way connected? Like is there a risk that these excellence initiatives are actually going to hurt your collections?

No. I think that the operational excellence program is actually a way for us to improve the processes locally. The challenges we've had are more of an IT infrastructure basis. So we are also running a migration in Germany, and that migration has taken longer than we expected. And that has an implication then on how we can optimize our processes. So the idea is to move from a more unstable environment with a lot of specialized process and bespoke solutions to a standardized and stable environment.

And last question, just on Germany that you say that there's been longer onboarding. Like should we read into that any sense that you have a backlog of clients or contracts that you will be able to onboard when that's done, so that should accelerate the organic development there? Or is it more when you've done the program, then you've been able to go out and win contracts...

I mean we do have a number of clients that we are working with. The question is, I mean -- and we have a continued growth ambition. But when we see that the platform is not as stable as we would want it to be, we have kind of lower our ambition on onboarding of clients because we don't want to sort of take too much on and then not be able to deliver.

So I think to answer your question, there is a pipeline. But right now, the pipeline is not being filled up because we're being careful to take on new clients, additional new clients as long as we are in the stabilization phase. But we think there is a big potential in Germany generally.

The next question comes from Corinne Cunningham from Autonomous.

A couple of debt-related questions, please. So just on the tenders that were announced this morning, what sort of size are you thinking of for the debt element? And then how much equal for the RCF redemption? And then would you mind just going back through what you were talking about with the FX hedges and how that's affecting the interest costs, please?

Yes. I don't know what the release this morning said, but you will see that when that comes out when it comes to the normal amounts. We are doing a tender on the '27 at a fixed amount, and then we're doing a tender on the '28 for the remaining part. We will have to see what the uptake is when it comes to that. So this is the first one we do with the -- using the proceeds from the Orange sale really to do this tender. So we'll see what the uptake is on the prices that we feel comfortable buying back at.

And then, yes, we'll see where that goes. And then we will probably do several of these tenders going forward as well with the liquidity that we generate. You'll be updated on the RCF and the sizing of it when we come to our Q3 report as that is something that we've done in July with the capital raise proceeds as well as the Orange sale. So that's something we don't disclose here now.

Annie, do you want to take the FX question?

Yes. So in terms of the FX -- sorry, did you just want to know what kind of thing that we did? Can you just repeat that question?

Yes, interested in the interplay between that and the interest. I think you said interest -- quarterly interest costs came down because of the hedges. Just wanted to understand how they're working in the P&L, please?

Yes. That was actually the financial net and the FX impact. That's the interplay rather than the interest cost as such. But essentially, what we've used is our euro net investments in subsidiaries and match that with our external euro loans. And therefore, we have taken down that FX exposure meaningfully and significantly. And then what's remaining really is our exposure to non-euro currencies.

If I can just ask one follow-up question. On the Savoy joint venture, are there any plans to do the same with other JVs?

There are no plans at the moment.

The next question comes from Patrik Brattelius from ABG.

Just a short follow-up. I note that the presentation material and all the appendix information has been removed in the Q2 presentation. Is a reasoning behind this? Will there be released somewhere else? And could we expect this going forward as well?

No, that's just a mistake. We'll add that back in probably when we have PDF.

The next question comes from Robert Dinic from DNB Carnegie.

Just one more follow-up on the tender offers going forward. Will you need some sort of new consent from any of the creditors to do more tender offers above par?

No, when it comes to the tenders we're doing in the way we're doing it.

Okay. And will the focus then be on tender offers rather than RCF repayment?

Sorry, can you repeat that, please?

Will the focus coming months be on tender offers of the short-term bonds rather than paying down the RCF.

Well, I mean, we will do more tenders and how we deal with the RCF. That's something we'll do at the same time. We will not exactly sort of say how we deal with the different parts. That's something we want to have some flexibility when it comes to how we deal with it and what timing.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

So thank you for the questions. Thank you for taking the time. And thank you for listening this morning. We will keep in touch. Have a lovely Friday. Thank you. Bye.

Welcome to the Intrum Q1 2026 Report Presentation. [Operator Instructions]

Now I will hand the conference over to CEO, Johan Akerblom; and CFO, Masih Yazdi. Please go ahead.

So good morning, everyone. It's been a busy morning. We have a lot of things to cover in this call. We will start with the Q1 presentation, and then we will move forward to the rights issue or the capital raise. I think we will go through both of them, and then we'll move into Q&A rather than to pause in between.

So if we start with the first quarter highlights for '26. And again, this is the first quarter of our strategic execution, which has an end date, which is 2030. But I think we think that we are moving according to plan. I mean, if we look at the P&L, we are ahead on the cost reductions and the servicing income is slightly behind and a lot of FX effects in there.

The service leverage is largely unchanged and the overall leverage is slightly down, but it is supported by the consolidation of Savoy Group. And we think that there will be further improvements to come in Q2 when we close the portfolio -- if we would close the portfolio sale announced in January.

I think one of the important highlights, obviously, not part of the quarter, but that's been announced today, is that we have a fully guaranteed capital raise of SEK 7.5 billion, which will help us accelerate. But we'll talk more about that later.

Moving on to the servicing. I mean, margins quarter -- this quarter versus last year's Q1 are slightly up. So we moved from 20% to 21%. The rolling 12 remains at 25%. We do have organic growth in our traditional markets. They continue to grow on aggregate, but it's part -- but it doesn't fully offset the natural decline that we have in the specialized markets. Our client satisfaction index remains high, and we continue with a strong cost discipline. Cost levels are now 10% lower year-on-year. We have an 11% increase in rolling 12 months on the adjusted EBIT compared to Q1. And the sales execution in Q1 is more than 30% higher than Q1 '25, and we will continue to focus a lot on the ACV to top line conversion.

Moving to the next slide around our investment portfolio. We are closing the quarter with higher volumes than we guided, if you take that on a run rate basis. However, now with the raise of capital, obviously, we will have to look at different volumes going forward. The good thing is that we are still very disciplined in terms of how we invest and what returns. And with the consolidation of Savoy, that increases the book materially. And the collection index is at 100% versus the active forecast.

A new slide that we have introduced, and we will continue to follow-up on this, is that we are making good progress when it comes to the AI and tech implementation. This is just to highlight the main areas where we're working. So we are spending a lot of time on our document AI. We are handling millions of documents every year, and a lot of them are done either manually or semi-manually. And we are now looking to automate that management and processing using AI. We are exploring -- we're live in Spain and then we are running 7 countries or 8 countries additionally, where we either are in pilot phase or exploration. And we're doing this in a coordinated effort between a central team and local resources.

When it comes to AI, we are doing millions of calls, both outbound and inbound, and all of them -- almost all of them are managed by people. So in terms of using agentic AI, there's a huge potential and we're already exploring that. In Spain, which I think we talked about before, we have Olivia that is running roughly 80,000 to 100,000 calls per month. I think so far, she has been able to process over 1 million calls.

And then we are now running pilots in Germany and Spain and we are exploring use cases in Italy and Poland. This will also have a major impact on the way we operate going forward and also in the way it will impact our cost to collect. And the conversion rate so far is in par or maybe sometimes even better.

On the e-mail AI, again, another big driver of the work that we do, millions of e-mails are being processed. Some of them manually, some of the semi-manual. We're now moving into automated e-mail responses and also send outs. We are live with the prototype in Belgium and we are doing work in another 3 countries to start implementation. And here, we think that there's actually a possibility to develop a solution that we can use in almost every country that we operate. It just needs a local connection to the core systems.

So this is super exciting. We will continue to follow-up on this and we will be more specific as we go in terms of the impact it could bring.

I'll hand over to Masih.

Thank you, Johan. Let's move into the P&L on Slide 7. So we've talked about some of this before, but our total income is down 12% versus the first quarter last year. We do have some FX headwinds. So despite the fact that the krona was actually weaker than the euro by the end of the quarter, on average during the quarter, the krona was strong, which has a negative impact on our income line as well as a positive impact on the cost line. So that compounds the numbers here.

As you can see, what stands out this quarter is that we have a capital gain from the consolidation of Savoy. I'll come back to that later on, but that has a big impact on EBIT this quarter. We also have some extraordinary items on the net financial expense line. So the interest expense in the quarter is what it should be, about SEK 870 million based on what we're paying for our debt.

But we have some noncash items there impacting that number. There is an FX effect. As I said before, the krona was weaker by the end of the quarter, which has a negative FX effect on the net financial expense line. We have fair value adjustments and we have a write-down of shares related to the consolidation of Savoy that impacts that number. So net finance expense accounting-wise is almost double the level it is cash-wise normally this quarter, which leads to the fact that we report a net income -- a negative net income in the quarter.

If we move on to the JV. Savoy, we've named it Penelope sometimes in the past as well. There are different names in this structure, but we will call it Savoy here. So what we've done during the quarter is that we've increased our share of this JV as we see value in it and we have taken control of the structure by having more Board seats. This allows us to consolidate the JV, and therefore, it has implications on both our P&L as well as our balance sheet.

Here in the P&L, you can see that we have a credit gain in the -- as we've done a revaluation of the portfolio, but we also have impairments of financial assets in the notes in the group. So the net P&L impact is plus SEK 254 million. At the same time, as we are consolidating, the book value of our portfolio investment goes up by SEK 3.7 billion. There are some property holdings in there as well. And in the structure, there is some restricted cash. And we're now including all the senior debts in the structure in our own debt stack, which adds SEK 1.9 billion of debt to our debt stack. But also we're including the cash that is related to this structure in the consolidated numbers. The net effect of the cash being included as well as the debt being included is a positive impact on our total leverage ratio of about 50 basis points.

So to be clear, this is a JV where we think that there is cash flows coming in, in the future. We want to visualize that, that there is value in this JV. Therefore, we've increased our stake, we've taken control. In practical terms, in the near future, the cash that has been generating in this JV will be paying down the senior debt that's in the structure.

We own the mezzanine and junior notes, and as the senior debt has been fully paid down, we will start to receive cash from this structure. And at this point, we expect that to happen sometime by mid-2028 as a starting point. And then this is a very large portfolio, and it could be a long tail of cash being generated. And we'll see how long that tail is. Now we've done a valuation of this. We revalued it, and we've used the best estimate that we have in terms of the future cash generation.

If I move to servicing. So on the headline numbers, it's down 10% on the external income. About half of that is organic, almost half is FX. As Johan mentioned before, we continue to grow in the traditional markets, but it's not fully offsetting the decay we have in the specialized markets. I think the difference between the quarters in the past, the Q3 and Q4, when we reported overall organic growth is the fact that the traditional markets are growing slightly less this quarter. The decay in the specialized markets are approximately the same as they have been in the past.

We continue to have good cost control, down 10% year-on-year in servicing. And that is obviously helped by FX to some extent, but it's also driven by the efficiency work we're doing. We're in line with our plan or slightly ahead of our plan of reducing costs in total by 5% this year compared to last year.

If I move to investing, income is down clearly more than in servicing, 18%, again, impacted by FX. But obviously, what's happening here as well is that we are investing less than what we are -- than what is amortizing. So the book is shrinking, and therefore, the income generation is lower. What also has impacted results this quarter is that we have a performance which is in line with active forecast. So the performance is at 100%, but the first quarter last year it was at 102%. And that sort of deterioration in performance, even though it's at 100%, also has a negative impact on the income line.

Again, we are doing new investments at very high price discipline, which means that this quarter we've done a blended IRR of 19%. And again, recall that when we do investments together with Cerberus, we do get the servicing revenues as well. So typically, the consolidated IRRs are clearly higher than the 19%.

So I'll ask Johan to summarize the quarter before we move into the capital raise.

Yes. So I think what we said upfront, and I mean, that's part of the situation. I mean, top line development is slightly behind plan. But we don't see any structural changes. It's also some seasonality. We have a positive sales momentum. We continue to increase how much we actually close in terms of new business, and that we now need to convert into real top line. The margins are stable. I think in our guidance, we have said that we will move slightly upwards, but it's going to be in a steady pace.

On the investing side, I think the trend continues. The SEK 345 million comes at a very high IRR. And as Masih also said, I mean, it brings servicing income. And we now have the full launch of the execution of the strategy and we have a full management team in place and our operational efficiencies are ahead of plan. And most importantly, with the fully guaranteed capital raise, we can speed up the execution of our 2030 strategy.

So let's move to the next part, which is around the capital raise. So the capital raise is SEK 7.5 billion. It's fully guaranteed. We have clearly articulated as part of our strategy that we want to focus a lot on our deleveraging. So the intention is to use around SEK 5 billion to reduce debt and the remainder will support growth and profitability through investing volumes to be increased and to selectively speed up initiatives that we do in our operational transformation. That includes adjusting our way of working. That includes speeding up the AI initiatives that I talked about before, but it also includes how we can leverage data and technology in becoming more efficient in how we serve our customers and clients.

The capital raise has a very positive effect on how our cash flows are impacted. First of all, it will lead to direct deleveraging. That in itself should help us to move our credit rating in the right direction, which will lead to lower funding costs when we go out and either refinance and work with our capital stack. That itself will help us to free up cash to accelerate our growth in the investing and the servicing business and that in itself will improve the cash flow. So every step we take leads to an improvement in the next step, which in the end has a multiplier effect on how much profit we can generate.

So we believe that the acceleration is 2 years vis-a-vis the strategy that we presented at the end of January. In terms of reaching our leverage target of 3.0, it will help us improve our refinancing profile and it will create a much stronger credit rating trajectory. It will reduce the funding cost immediately, and it will continue to reduce the funding cost as we address the capital stack. And it will also help us to get much better access to capital markets.

And the capacity increase portfolio investments will be there, and we will also do the targeted efficiency initiatives. And I think as we very clearly articulated in the strategy is that the better we can be in operating our platform, the more attractive we will be in terms of generating new revenue to the servicing line. And with reaching the deleveraging target of 3.0, we also now open up for a potential dividend post the '28 financial year.

I'll hand over to Masih, who will take us through a little bit more of the exact implications.

Yes. So this slide we showed in conjunction with our strategy presentation in January. We indicated on a few different lines how we think the development will look like from 2026 on to 2030. And here, we're trying to indicate how we think the capital raise will impact the way forward.

We don't see any significant impact on the servicing income or on the cost line. It is possible that with some of the acceleration in the operational excellence work that we do that we could front-load some of those investments, which would then lead to a better cost trajectory beyond that, but also with the platform improving faster than what we have assumed in the past, leading to better service income growth. But at this point, we haven't -- we don't think that's going to be a significant magnitude, and therefore, we haven't changed our indications in terms of service income and on total costs.

The main delta will obviously come on the interest cash expense. We're at SEK 3.5 billion last year. That will start to come down as soon as the capital raise has been concluded as we can park the money, for example, in the RCF and reduce our interest expense immediately. And then over time, as we refinance with a better rating, we will refinance at better terms, and therefore, reduce our interest expense faster than earlier indicated.

And then, obviously, the big delta is on portfolio investments, where we had a plan this year to do slightly less investments than we did last year and then accelerate afterwards. Now we think that with this capital raise, we can potentially increase investments this year compared to the levels we saw last year. And then going forward from 2027 and onwards, we will be able to increase investments faster than we planned to do previously.

Now in terms of portfolio investments, we will continue to be extremely disciplined on price and in our underwriting, and we won't do investments if we feel that the price or the market isn't right. But at least the capital raise gives us the potential to do so. And if we don't think that it is the right market to do so, we'll obviously use that capital for other purposes. Obviously, an important purpose is to reduce debt faster.

On the next slide, you can see how we now think about the leverage going forward. We reported a total leverage of 4.6 now in Q1, and we now expect that to move down to around 3x by 2028 instead of reaching that level by 2030. On servicing leverage, we were at 5.8x now in Q1, and we believe that, that will go down to about 3x already in 2028 rather than in 2030. So this is the 2-year acceleration that Johan mentioned.

So I mean, in terms of the speed of how we reduce our leverage, obviously, the curve will be slightly steeper now. But if we compare to what we have achieved so far, the curve will pretty much be in line when it comes to total leverage. And for the service leverage, it will actually be slightly slower than we've done in the past. So we see this as very much achievable, and let's see how we progress as we move along.

And then finally -- hopefully, you've seen this already, but here's just a time line of how this will be executed. We're calling to an EGM on the 9th of June. We're asking for the EGM to approve the rights issue. And then this will go along for the remainder of the month of June and be settled early July.

And as you've probably seen in the press release, this capital raise is divided into a directed issuance of SEK 1.5 billion. You've seen hopefully the names that have been announced. So it's supported by Kistefos, a few funds in Carnegie Fonder, funds managed by DNB Asset Management as well as Toluma. And on the guarantee side, all of these are participating. And we have several other long-term investors that have undertaken to guarantee the rights issue.

And the main shareholders today, Nordic Capital, which holds 7.8%, they've undertaken to support the transaction and vote in favor of the directed issue and the rights issue on the EGM that has been called now.

I think we'll stop there, and we'll open up for Q&A.

[Operator Instructions] The next question comes from Jacob Hesslevik from SEB.

You stated that the majority of proceeds will reduce net debt and that interest cost currently at a weighted average of 7.6% will be substantially reduced. Which specific debt instruments or tranches are targeted for repayment first? And can you quantify the expected annualized cash interest savings once the SEK 7.5 billion is fully deployed?

So we haven't decided what parts of the bonds or the RCF we will address. We are very cognizant of seeing the market reactions and making sure that we do what creates most value. So we will use this money to reduce debt by approximately SEK 5 billion, as we said in the presentation, but we haven't decided exactly what bonds or whether it's going to be the RCF. Again, we have to look at how the market reacts to this capital raise and what makes most sense for us to do from a practical point of view on addressing the debt stack.

Obviously, what happens right away when the capital is being raised and we get it in is that we can park it in the RCF, where we have an RCF of SEK 11 billion, and we can reduce that by SEK 7 billion from day 1, which means that -- and the current interest rate on that is about 6%. So right away from day 1, we start saving SEK 7 billion times 6%. And then depending when and how we address different bonds, that cost will be reduced further as we keep generating more cash flow. As the debt has been reduced, we're paying less on interest. So therefore, the cash flow improves. And with that, we can start to either buyback bonds, refinance at cheaper levels or address the RCF.

We haven't decided because we need to be very cognizant of seeing the data points on how things trade and what the impact is and obviously await more clarity from rating agencies on how this will impact our rating going forward.

Okay. And on that comment, I mean, you said SEK 5 billion will be used for deleveraging and you have stated that you will invest an additional SEK 6.5 billion between 2026 to 2028. So the remaining is SEK 4 billion. And also saying you might start paying a dividend on top of it. So I'm just wondering where will the additional cash come from? Is it all from lower interest payments or you accelerate investments in servicing that quickly that it starts to generate cash?

You shouldn't see the additional investments nor the dividend as something that we are today saying we will definitely do. Those numbers only indicate what is possible to do. Again, we'll only do the investments to the degree that we feel that it makes sense, that the returns are good enough and we're getting the returns that we require. Those numbers are just indications of what is possible with the capital raise.

What happens with the balance sheet is very dynamic in the sense that we have bonds that are maturing and we have estimates of at what levels we will be able to refinance those bonds and to what extent we'll be able to reduce the nominal amount of those bonds. Together with the higher investment volumes, that improves the cash flow generation going forward. And the combined effect is the delta, which gives you that number of SEK 6 billion of additional investments that are possible to do during this period.

Again, it's not something we've decided today that we will definitely do. We will use the cash flow that we have in the best way possible. If returns are good enough, we will do more portfolio investments. If they're not, we'll use the cash flow for other purposes. And obviously, one main purpose would be to reduce the debt further and faster than what is currently planned.

Okay. And then just a final question from my side. On servicing income, it was already below plan in Q1 with specialized market declining and new sales not yet converting. What gives you the confidence that full year service income will be largely flat versus 2025, given that Q1 is running an annualized shortfall versus last year's base at SEK 12.3 billion? And is the guidance at risk if FX stays at current levels?

I mean, first of all, I think the guidance we made was on the basis of FX being the same. So of course, if the FX remains negative, then the top line will most likely come in slightly lower than the flat that we guided. I think on the servicing income, I mean, the specialized markets that have had the biggest -- or has the biggest impact on the decline would be Greece and Spain. Spain, I think we have discussed many times, and we are running there a business that is predominantly driven by the sale of real estate. That pool of real estate is not unlimited. And therefore, every quarter, the more we sell, basically the less -- the lower the book becomes.

Greece, you also know about our relationship with Piraeus and how we manage the hubs. That is also a business where we now focus a lot on making it super-efficient to make sure that we keep the cash impact, but the top line has a natural runoff. So that's, I think, the answer to that one.

And then, I mean, there's also some things that we know will come most likely that didn't come in Q1 that gives us comfort around the overall guidance.

I would just add to that, Jacob, is that the thing that gives us most comfort is that Q1 actually is just marginally below the internal business plan that we had for the full year.

Yes.

So we have a tilt in the business plan that is more towards the second half of the year rather than the first half.

Yes. And the conversion, I mean, from top line to -- from ACV to top line, I mean, that's not something that is an issue. It's just that we will continue to make sure that we get the volumes as fast as possible, which means that we need to increase the speed of onboarding. And then we need to continue to perform because that's how you get the allocation.

The next question comes from Johan Ekblom from UBS.

So first of all, just when we come to talk about retiring the outstanding debt, could you just highlight to us what your options are, i.e., are you able to call parts of existing bonds? Or do they have to be called in full? I guess buybacks, you can structure differently. But just to understand what your flexibility is in kind of altering the term structure of your debt? That's the first question.

Johan, we can call bonds, and obviously, we can call bonds and refinance parts of it, which would have the same impact as calling parts of the bonds. But we can call bonds up to a year prior to the maturities. So that's something we can consider doing. And obviously, then if we call the entire bond, we can refinance what is necessary to refinance at that point in time. And obviously, the whole idea here is to then be able to refinance at lower levels and have savings there. I didn't capture the second part of your question.

No, I was just trying to understand. I guess, with buybacks, you can kind of target the whole series of bonds. But I'm just trying to understand what the -- when you say up to a year, does it mean from a year before maturity you can call or the last call date is a year before?

So basically, the '27s, they have a non-call one. So they will be called as we move into the fall. The '28th has a non-call, too. So they will come due the next year. And then that continues along the debt stack. The RCF can be refinanced at any time. And then we can do buybacks. So those are the sort of optionalities we have. And then on top of that, we can always probably go and discuss with our debtholders if there's a bigger refinancing package to be made as well. So I think we have quite a big flexibility.

Excellent. And then you mentioned that part of the use of proceeds was to finance the kind of cost takeout that you flag. But if we go back to the Q4 results, I mean, the SEK 10 billion to SEK 11 billion cost, I'm guessing those cost takeout was kind of fully costed in the plan. So if you're putting more money into accelerating efficiency, should we think about moving lower in that range? Or is it turning out to be more expensive to achieve the cost saves that you planned for 3 months ago?

I mean, the work we've done so far this quarter, I mean, we just started the sort of operational excellence work more bottom up, and we are starting out with 2 markets where we sort of are accelerating this. And so far, we actually have found slightly more cost savings than we had initially indicated. So I think so far, it's going according to plan or even slightly better than plan.

In that cost trajectory you have until 2030, we had a plan of implementing this in several markets, but going it step-by-step. We can't do 20 markets at the same time. So we are onboarding more and more markets. What we will be able to do now is to increase the pace of that onboarding. We can have a bit more staff to be able to implement the platform improvements in more markets simultaneously.

As I said before, we haven't exactly decided to what extent we'll be able to accelerate this. We need to manage these funds between the different purposes that it has, reducing debt, increasing investments as well as improving the operational platform. But in theory, it could mean that you have a cost trajectory that in the initial phase is slightly less, so the reduction is slightly less, but then the endpoint is probably not lower than what we've indicated, but we reach it earlier than the 2030 targets.

Yes. And I think here, Johan -- I mean, we have indicated that we can move and achieve the leverage target 2 years earlier. We have kept the target that we have in terms of service margin and cost for 2030. Obviously, with this capital raise, we will sit down and we will also go through what's doable and how do we deploy the money in the best way. And if we would see that the outcome of that materially deviates from what we have given in the 2030 strategy, we will give an update.

But we shouldn't read into this that you think it will be more costly to achieve the SEK 10 billion to SEK 11 billion?

Not at all. It's more of a question of is it possible to reach that level earlier. And that practical work is starting now.

Perfect. And then the next one is just in terms of the accounting treatment of the Savoy transaction. I'm guessing this will mean that the investing business will show a lower cash conversion than in the past because you don't own 100%, right?

Yes. I mean it dilutes the cash conversion when the structure is moved in. That's correct.

How does that come through in the accounts? Like, where do we see that cash adjustment? Because I guess, previously, the only cash adjustments we had was related to the JV line?

Exactly. You won't -- I don't think you will be able to see it because the cash -- I mean, we will -- this is now fully consolidated, so whatever cash it produces will be consolidated. But then that cash is to a large extent used to pay down the senior, which is on our balance sheet as well.

Yes. But the ERC I see is 100% of...

Exactly.

So the gross collections is noncash, but there's going to be an adjustment somewhere that reverses that, right? We can take this offline after the [ webcast ]. I'm just trying to understand...

Yes, I think let's take this offline. I think we need to -- yes.

Understand how we should model the...

I understand.

Cash generation and -- because we don't know what part of the ERC by year is related to Savoy from what I've seen in the material. And then just finally -- I don't know if there's a reason. The slides you went through in the webcast are not the slides that are on the website. So if you're able to share those with us later today, that would be helpful.

They will be posted with the webcast link. So it's a combo.

[Operator Instructions] The next question comes from Rickard Hellman from Nordea.

I think most of my questions was related to the debt, which you have discussed. But just a follow-up on that. You earlier said you have an ambition to refinance the new money notes before the summer of 2027. I guess what you said earlier, just to be clear now, that, that statement is not necessarily accurate anymore. You will wait a little bit and see.

Rickard, which new money notes are you referring to?

The 2027.

The SEK 1.5 billion?

Yes.

We have an ambition to obviously deal with that this year. But now we've been working on the capital raise, so that's been a priority. But as soon as this has been settled, obviously, the work on the debt stack will emerge.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

So thank you all for listening. I think we might have a bit more follow-ups with some of you after this call. And yes, we're really excited. We think this is a very good outcome for the company. We're moving ahead and we're very excited to see this capital raise all the way through and continue to work on our strategic plan and the execution of it. Thank you so much and have a fantastic day.

So welcome, everyone. Today, myself and Masih will take you through our Q4 report, and our strategic review. We will start with the fourth quarter and the year-end 2025, then we will go through the strategic review presentation, and we will wrap up with Q&A.

Moving into the fourth quarter, and looking at the developments, we've had a continued underlying business progress in both servicing and investing. We have had underlying costs that continue to go down. And we did take as part of the yearly review, a goodwill write-down, and we did also a tax asset write-down. We continue to focus on deleveraging. And if you look on year-on-year, the leverage ratio has improved from 5.3 down to 4.8. On top of that, we're continuously working on strengthening the balance sheet, and we did announce a sale in January '26 of the remaining stake of our joint venture with Brocc. This will have a positive impact on the leverage when we close it.

On the servicing side, we see a continued organic growth. The margins remain elevated and steady, and we have had a strong sales execution in the fourth quarter. On the investing side, collection index continued to be above 100%. We did close SEK 436 million of new investments with an IRR of 18% in Q4, and we have, for the year done SEK 1.2 billion with an IRR of 20%.

As you can see on the chart, the service margin has steadily been going up, and it continues up in Q4 as well. In Q4, we have a 31% margin on the quarter standalone. If we look at the servicing income, it's very positive to see 2 quarters now in a row, we have external servicing income growth, taking into account FX-neutral assumptions. On top of that, we continue to increase our pipeline, so we're moving into 2026 with SEK 2 billion in our pipeline. And we have continuously been working on the pricing model and strengthening the sales team.

Investing displays another quarter of high collections, and we continue to extract a lot of value out of our portfolios. If we compare it to the original forecast, we're now at 109%. And it's interesting to see that our investing book and the performance on it remains very strong, even though we sold a large part of the back pool (sic) [ book ] in 2024. The ERC as we end 2025 sits at SEK 46 billion.

Moving over to Masih, and the financials.

Thank you, Johan. So let's go into the Q4 P&L a bit more in detail. So income is down compared to a year ago, 7%. That is almost exclusively driven by FX. The investment book is a bit smaller as well, but a large share of decline in the investment book is also driven by FX this quarter. As Johan alluded to before, we did have a goodwill write-down. It's coming from a few different countries, we had preannounced that at SEK 3.1 billion, it ended up at SEK 2.9 billion, and the difference there is really driven by FX changes from the announcement to the end of the year, as well as some small adjustments to the WACC we use in the goodwill calculations.

The adjusted EBIT is largely unchanged as the income decline has been largely offset with cost reductions. And here are the cost reductions, so the underlying costs continue to go down. It's down about SEK 1.6 billion on an annual basis in Q4, if you look at the 12-month trend, and it's mainly driven by personnel reductions. So FTEs are now down at year-end to around 8,500 people in the company.

Looking into servicing, as Johan mentioned, so we do see organic growth for the second quarter running, but we do have FX headwinds here. So the income is down 3% year-on-year. But as I said, 1% organic growth underneath the surface. Cost development continues to be good. Here is the area where we continuously do take out costs and plan to do that also going forward, which means that we continue to have a good development of adjusted EBIT, which is up 31% compared to -- so full year 2025 compared to full year 2024.

On the investing side, income is down more, 11% year-on-year if you compare '25 to '24 and 17% Q4 versus Q4 2024, very much driven by the fact that we have a portfolio that is shrinking as our new investments are less than what is being amortized. But at the same time, the performance we have, keep performing above the 100% means that the investment book, the income from the investment book is going down less than the size of the investment book, which is obviously a good development that we are extracting more value than what was initially thought in the forecast that we had.

On leverage, we see a decline of leverage, 5.3 a year ago to 4.8 at the end of the year. It is marginally going up quarter-on-quarter. That increase is largely driven by the fact that we have improvement on the servicing side, but the cash flow improvements on servicing is not sufficient to offset the decline of cash flows coming from investing. That's the case in this quarter. Obviously, the plan going forward is to make sure that the improvements we see in servicing is more than offsetting the decline coming from the investing side.

Johan is going to summarize the quarter.

Yes. So I mean, to wrap up, I think we said it all, but Q4 delivered continued underlying business progress. And we've also spent a large amount of time to actually do the strategic review. And I think with that, we move into the next section, and talk about what we have discovered.

So let's talk about the strategic review. We have obviously spent a lot of time during the fall to look at where the company is, what the recapitalization entails, but also in terms of strategy and the way forward. I think the previous strategy was done in 2023. Some of the targets that were mapped out then has either been fulfilled or partly become obsolete. The company has changed dramatically. A lot of events that probably wasn't part of the first strategic review in '23 has happened. So it was time to do a strategic review, and really to set the foundation for the way forward. We will take you through what we think is the strategy for 2030, how we will execute, and then finally, what the financial impact will be delivering the strategy.

So talking about Intrum 2030, it all starts with a continued focus on deleveraging and derisking. This has been very important over the last year. It will continue to be very important going forward, and it will be one of the guiding stars in everything we do in terms of activities. At the same time, we will also start working on our '26 to 2030 priorities, which are servicing performance, growth acceleration, and expanding our holistic view as an investing partner. When doing so, we will cement our positioning as the leading credit management servicer, and most attractive investment partner in Europe. And this will set a reinforcing wheel of value creation, an emotion, and that will deliver our 2030 financial targets, which are around service leveraging, total cost, and servicing EBIT margin.

If we talk about Intrum and where we are today, first of all, we are already Europe's largest debt collector, and we have the scalability. We operate in 20 markets and the markets has slightly different characteristics, and we manage 400,000 customer interactions on a daily basis. We are working with 70,000 clients, and we are, as I said, in 20 countries. And every year, we basically have around 6 million debtors fully repaying their debt, out of 22 million active on an ongoing basis.

When it comes to the markets, we have split them into three segments. One is the investing focused markets, which would be the Eastern European markets, Czech, Slovakia and Hungary. Then you would have the specialized markets where we have a composition of the business, which is built on something that has happened in the history. So there you would have Spain, you would have Italy, you would have Greece, and the U.K. And then you have the rest of our traditional servicing and investing markets.

The way we operate is with the dual engine. We have the servicing where we collect debt on behalf of the clients, and we have the investing where we purchase debt portfolios either into our own balance sheet or together with the partner. These 2 engines are highly complementary and they're also reinforcing.

Moving over to Masih.

Thanks, Johan. So already in the last couple of years, there's been a large transition in the company, moving more into becoming a servicer. You can see it in the financials. So the investment book has come down by 40% over the last couple of years. Obviously, a big chunk of that is due to the book sale that was done in 2024. But at the same time as that has happened, we've seen an increase of the external servicing revenue of 8%. The margin has gone up by more than 50% in the same period, and the share of the revenues generated for the company has increased when it comes to servicing from about 1/3 or 30% in '23 to now being the majority of the revenues being generated. And simultaneously to this happening, the net debt has gone down by 23% or almost SEK 14 billion.

I think also just to add to this, I think when you make this transition from more of an investing focus to servicing company, you actually remove the business risk in the franchise, which is an important part of the strategy going forward as well.

Yes. When it comes to the market environment, we think there are a few trends that we believe are favorable for us. A large reason for why these are favorable for us is that we are a large company in a dominating position in Europe with significant scale. If you look at the competitive landscape, we can see that companies in our industry are specializing more, either becoming investor and servicer, and there are a few that have this full range of services that they offer as we do.

On the technology side, this is still a very manual industry, and we know that there is a lot of new tech that has come into the market the last few years and will come into the market the next few years. And it's very difficult to find an industry where this can be more applicable than within our industry. And with the scale we have, we can justify the investments in the technology, because basically, what they do is that they help you with something that is repetitive and scalable, and we think we have a large advantage there. And the same goes with regulation, more regulation means that you need more scale to be able to absorb it and comply with everything that is being introduced.

When it comes to the market as a whole, we know that the economy goes in cycles. And with the dual engine we have, we know that those 2 business lines generally offset each other. So when the market is benign, servicing does better, we have an easy way of collecting. And when the market is going down to a rough cycle, we know that the nonperforming loans typically increase, and we have a better opportunity investing.

We've gathered some data on how these 2 business lines could grow in the market in the coming years. On servicing, we expect about 3% annualized growth until 2030. When it comes to servicing collections within the financial industry, we think that's going to grow slightly more, about 4%. And that's also where we have the bulk of our business today. So about 60%, 70% of the servicing revenues we have today is coming from financial sector. But at the same time, 90% of the collection business is outside of financial services. And what we plan to do is penetrate that part to a lot much larger degree than what we have historically going forward.

On the portfolio side, there's been a significant decline of nonperforming loans in recent years after the increase we had post the financial crisis. The general expectation is that we are at the trough point. We're at trough point in 2024, and we'll see an increase of portfolio investments going forward, and that that will grow by about 9% annually until 2030.

So talking about the 2030 strategy. First of all, as I said, in the near term, we will have a lot of focus on deleveraging and derisking. We have already started this journey. We started that journey already a year ago. I think we have started with an acceleration by the sale of the portfolio that we announced in January this year with the intent to repay the 2027 maturities. We are, as part of the strategic review, also looking into other type of divestments when it comes to either portfolios or nonstrategic assets, and this is carefully being evaluated. And again, the guiding star is that we can improve our leverage ratio.

We will continue to apply very strict cost control. We are guiding a 5% lower cost in '26 versus '25 on the underlying basis, and also with the FX rates as we are experience right now. And the limited portfolio investments with a focus on return will continue, as we said, focusing on the deleveraging, which means that the cash flow will be used to a large degree for debt repayments. And this is necessary to give us the full flexibility in our strategy execution.

So talking about the strategic priorities. We have a strategic ambition to become and cement the leading credit management servicer and the most attractive investing partner in Europe. That means that we need to have a superior servicing performance, we need to achieve growth acceleration, and we need to be the preferred investing partner in this segment. And I think Masih alluded to that before, we think a lot of this can be achieved by actually just starting to use technology data and AI in a completely different manner and scale than we do today. When we look at this, and both me and Masih are coming from the banking industry, we've been through the transition that the banking industry did. And we actually think that this industry is an even better used case than the banking industry, and the banking industry has received a massive amount of value from applying technology data and AI. We think that there is more value to be captured in this industry.

To be a bit more concrete, what do we mean, i.e., where are we today, and what do we want to be in 2030? Talking about servicing performance and excelling in that area. Today, we have a quite bespoke and largely manual collection process. We need to be highly digital, automated, and we need to be very standardized across our processes. This means that we have to make a lot of changes in the way we work. On top of that, in order to make that changes happen and to be effective in our collection process when it's more digital, we need to leverage the data we have. Today, data is used in some processes and some decision-making, but it's not fully utilized. When we operate this in 2030, it should be a fully data-driven operations decision-making process. And that's going to give us not only much better predictability on what we can do, but it will give us a lot of other benefits.

On accelerating the growth, we have very much a financial services focus today. We need to diversify our presence across other segments, and we need to be competitive, and we will explain later on how we will become competitive in those segments. And we are already today competitive in those segments in some markets. We have today a value chain expansion in some markets. So when we look at the collection business, there's a lot of services around it that are non-collection, but very closely related, that's why we see us as a full credit management service provider in the future.

On the investing side, is just the fact that the investing volumes today are impacted by our funding cost and our capital structure. We need to create a very sustainable and competitive funding cost to be able to invest more and mainly continue to invest through the partnerships. And finally, we have been in a capital partnership now for a year, we need to build something which is more of a full stop shop full service offering for investors, because we have all those capabilities.

So how will we make this happen? Well, first of all, we now have a new executive management team. It's not fully in place, but everyone has been recruited, and everyone has either started or is about to start. And I think a couple of common denominators for this management team is, first of all, they have a very long experience in the financial industry, which has been going through quite some changes if you look back 20 years, 25 years. Secondly, they have experience of being part of transformation or driving transformation journeys, which is exactly what we need to do going forward. And I think thirdly, they've been in a business where technology, data and -- not AI yet, but a little bit the ember of AI has made a huge difference in the way you operate. And those are the things we'll take with us. And on top of that, we have a lot of collection experience in our markets with our experienced managing directors.

So in terms of strategy execution, we'll start talking about the servicing performance. We have basically an ambition to drive our platform optimization. And the way we do that is, first of all, we will consolidate our platform further, and this is a little bit coming back to how we think about our markets. Secondly, or in parallel actually, we have basically 5 major areas across the collection process that plays an impact. You have the inbound customer contact, and we have millions of calls, the outbound customer contacts where we also have millions of calls, you have the whole capacity management. And remember here, we have roughly 6,000 people working in this process. So to get the capacity management right makes a huge difference. So you can get the efficiency of every operator and every agent as high as possible.

Then we have the agent productivity. So actually, when they are on a call, how do you make that call as productive as possible and how do you coach them and create a continuous learning to make sure that, yes, tomorrow is going to be a little bit better than today and the day after tomorrow will be even better than tomorrow. And then finally, there's a lot of work to be done on the noncore process optimization. In here, you would find pure process reengineering levers, you would find levers that are around performance management. So everything is not driven by just tech or data or AI. But if you apply the basic process optimization tools, and then you add technology, data and AI in there, you get very fast traction on that transformation. But it also has to have a lot of focus.

So as you can see, the bars on the bottom basically shows how big the cost-out potential could be. And with 6,000 people in operations, we think that the cost trajectory that we've had in the past will continue going forward. At the same time, we will also make the user experience much, much better.

To give an example of what we have done, and this is basically just illustrating how much you can do without actually making -- even starting to adopt some of the more modern technologies. In Norway, we've had a top line that has been flattish, slightly declining for structural reasons. The production cost to collect has gone down 36%. The collection per FTE has gone up 46%. And in the end, the adjusted EBIT margin has increased almost 50%. This not only gives us a much more competitive business today, it also allows us to win and be more -- much more competitive in winning new business going forward. So we think that this is the starting point to actually become a growing entity. You need to be efficient first and then you can basically become much more competitive in your offering.

Yes. I mean, Norway is probably the prime example we have of adopting new ways and improving the processes. But they already have all the tools. So we have that in the group. So just getting every other market to be on par with Norway in terms of how you collect and how you can perform that more efficiently takes us a long way across this journey we're planning for. Obviously, in addition to that, we will apply new tools that everyone will use as well as Norway to become even better. And Norway has not done this through AI or some massive technology shift, this has mainly been done on standardization, process optimization, and proper capacity and performance management.

Another area which we have just sort of scraped the surface on is how we can use the data. Today, we have 20,000 PI portfolios, so we have invested historically over 20,000 portfolios. We use that data, but that data is just a small fraction of all the data that we sit on in the group. Today, in the group, we have 70,000 clients, as I said before. A lot of those clients, they actually have several different portfolios that we have been or are collecting on. So when we can start pulling some of the insights out of that data stack, which we already started working on, so we're basically taking the same approach that we've done on our PI portfolio data analysis, and we're trying now to apply that for the bigger universe of servicing data.

Then we can move from the current use of data to something that is much more value-enhancing going forward, which is around improving the underwriting data on the portfolio investments. We can add a lot of value-adding client services. Essentially, we can go and advise the client on the best way to collect on their debt, and the best way to structure insourcing versus outsourcing and so forth. We will use it more and more in our action decision engine to make the right decision rather than to make a decision based on your own experience. And then we can also do very good statistical servicing pricing and benchmarking to identify best practice both across verticals, but also in -- across geographies.

On growth acceleration, which is the next element of the strategy, we think that the first part, what we talked about servicing performance, that is a very important foundation to accelerate the growth, because as we discussed with Norway, but in general, you need to be the best service performers in order to actually grow in the existing segments more than we do today. When you have the best competitive offering by being the most efficient and the smartest on how you collect, you can be much more competitive in pricing, you can get a better result for your clients, and you can also protect and grow your existing business. And when you have done that, you also underwrite to grow a new segments, because the new segments outside the FS, they are usually smaller tickets and it's usually faster processes, and they need to be driven by a very efficient collection process. So in order to excel there, we need to be the best when it comes to service performance.

The top line that we're looking at is quite significant. So just to do more where we stand, i.e., close the white space within financial services, strengthen our strategic partnerships, continue adding value to our services, and be better in sales effectiveness, we think there's roughly SEK 0.5 billion to capture. And this is, again, comparing 2030 to 2025. If we can start capturing the untapped potential outside the large non-FS segments, there's another maybe SEK 2 billion of potential. And that means that we need to enhance our offering, and we need to be more on the digital collections, and we also need to start being better in offering adjacent services.

Lastly, on the B2B segment, there's a little bit more than SEK 0.5 billion in potential. And that is a little bit aligned with the second part, because the need there is very much similar, and you can almost create a plug-and-play platform where SMEs plug in, load their cases and they run on our platform.

So again, to be very concrete, for example, in Switzerland, where we've been very successful in growing outside the collection space, we have roughly 15% to 20% of our revenue in the non-collection. We make almost 3x as much the group average income per FTE. On the group, we would say we have somewhere around 5%. So by moving into this non-collection, you can actually capture a much bigger part of the value chain, and you actually get the leverage on the services you already provide as a collection partner.

In Germany, we have a different situation, where the market size is really, really big. We have a 10% to 15% market share in the FS segment. In the other collections -- in the other industries, we have less than 1%. But the total market size is SEK 2 billion. So by just being able to move in and capture our fair share in the other services, there's a big, big upside in terms of income, and in the end, in terms of generating more profit.

Finally, we also have, as you all know, Ophelos, which is a digital standalone platform. Here, we have now pivot from the fully integrated approach where we started to a standalone model. We think Ophelos should almost compete with us as a different business offering. We are today doing this by plugging it in, in Portugal, and then we're moving either existing clients onto that platform and also using to acquire new businesses. And then we were going to scale it across the group. And we already have good progress with some of the leading buy now pay later players, not only in Portugal, because it exists -- Ophelos still exists in pockets across the group, and that works extremely well. And the benefit with Ophelos is that there's a massive improvement in terms of speed, scalability, product innovation and the performance uplift. But to be a little bit conservative here, we have actually not fully -- we have not included the upside from Ophelos in the base case financial plan.

So with that, I'm going to hand over to Masih to take you through the last element of the strategy.

Thanks, Johan. So let's talk about the third leg, investing partner. Here, our current situation is a bit different compared to the servicing side, where there are clear improvements to be made. On the investing side, we are clearly a dominant force in Europe. We see basically every deal that goes through, we get to analyze them, we get to see the deal flow. Obviously, recently, we've invested less, but at the same time, we see all the deals, we see all the data, and we've been able to combine some larger deals that typically have lower returns with smaller deals, which typically have higher returns and have a good enough blended return.

As you know, most of you, in the last year or so, we've done this in one partnership with Cerberus. If you look at performance, the performance here has been very good. So every portfolio has a forecast, where we have an assumption of future cash flows that index is 100%, whereas if you look at the actual performance of the last 20 years, it's been at 107%. So the book value that we have and have had historically, this company has basically almost outperformed on that book value. Even in deep economic downturns, the performance has been almost in line with the forecast that has been used.

I would just like to add here. I mean, I think there was some skepsis in the market when we sold the back book in 2024. Now we sold the second part of that back book that the rest of the portfolio would actually not perform in line with historical performance. What we see now being basically more than a year down the road is that we continue to perform almost even better than we've done in the past. Yes.

So if you look at the strategy we aim to have when it comes to investing, we look at this in sort of a few different perspectives. There are investments on our own balance sheet. So the investments we do ourselves. In the near term, as we start out saying, we will be more conservative. We will have more limited volumes, and we'll focus quite a bit more on returns. We need to do that to make sure that we use the cash flows we generate to reduce the debt burden of the company.

In the longer term, and this will be dependent on the evolution of funding costs, as the funding costs come down, we'll be more competitive on new investments and investments will be ramped up. And we believe that during the period '26 to 2030 at some point, investing more will be a contribution to the income growth we have as a company.

On the capital partnership side, we will continue that. This is something we want to expand. We want to have capital partners. We believe that there are investors out there that would like to benefit from the underwriting capabilities we have, and the deal flow we see, and the fact that we can help servicing the portfolios and invest together with us. We typically take a smaller share, but we can offer other capabilities that they typically don't have. And we want to continue to work on that. And in the future, we'd like to add more partnerships in different shapes and forms than what we have today.

Then there's an SDR option. In the near term, it's probably not feasible. We are continuously evaluating if there is a scope for us to have an access to an SDR vehicle. It could be a minority access, it could be a majority access. There are pros and cons with both of those. But during 2026, we expect to have fully evaluated that and have understood what the next best step for us is. And obviously, if we get that access, then that will also have a significant impact on the investment volumes we can do in the SDR vehicle given the funding cost we'll have at that point.

So let's move into the financials and starting with the 3 new financial targets we've set. So the reason we set these targets is that we want -- for it to be something extremely relevant, help us in our strategy execution, but also be something that we feel that we have fairly good control over. Clearly, the most important one is leverage. We need to reduce leverage, and we've set a new target, which is 3x that the net debt when excluding 80% of whatever the book value is investing. So the book value is assumed to consume debt up to 80% of the book value. And then all the rest of the debt is allocated to the servicing business, and that leverage needs to come down to 3x. If you compare this to the current way of formulating the leverage, which was 4.8x, 3x on servicing and 80% LTV on investing is just below 3x leverage on the current definition. So it's a more ambitious target than we've had in the past, but we're giving ourselves a bit more time to get there, because obviously this needs to be realistic.

On the cost side, the underlying cost in '25 were SEK 12.3 billion, we've guided for that to be reduced by another 5% in '26. And then we expect cost to come down every single year until 2030 to reach a level of SEK 10 billion to SEK 11 billion. And this level will be dependent on the actual growth on the servicing top line. If we have growth of, say, low single digits, we're more likely to be at the SEK 10 billion mark. And if growth is, let's say, high single digit, it's likely to be more closer to SEK 11 billion level.

Then on the margins, there's been good margin improvement, and we are targeting to increase that further to somewhere between 30% and 35% by 2030. The reason we have an upper limit here is that we want to strike a balance between finding cost efficiencies and then transforming those efficiencies to our offering, so that we can offer a better price for customers, and therefore, gain market shares. So we want to find a good combination of a sufficiently good margin, but also growing our business faster.

If you look at all of these 3 targets we're setting, and the development we've had, we actually are already moving in the right direction. Service deleveraging is coming down. The cost level is already down more than SEK 2 billion in the last couple of years, and servicing EBIT margin is up by 9 percentage points last couple of years. And if you look at those 2 targets, actually the trajectory at forward has a slower pace of improvement than the improvements we've seen in the last couple of years. So we think this is clearly realistic and something that we can achieve. And obviously, it's going to be a guiding star for the company.

So let's talk about the debt we have and our view on how to deal with that. So we have about SEK 45 billion of nominal debt outstanding, the first maturities are in 2027. We had -- the announcement of the portfolio sale in January, the proceeds from that sale, combined with the organic cash flow we believe we will generate will be sufficient to completely redeem or pay back the second lien maturities in 2027, which is about EUR 370 million. When it comes to the other maturities in 2027, given the market input we have and the secondary market trading of those instruments, we believe we can refinance those at better terms than currently outstanding, and we plan to do so first half of 2026.

When it comes to future maturities, we have made a plan of our P&L development and looked at the organic cash flow generation in that plan. And we believe that there will be a certain part of each year's maturities that we will be able to repay or redeem. And in combination throughout these years, we believe that we can reduce the debt by somewhere between SEK 10 billion and SEK 15 billion. Obviously, almost SEK 4 billion out of that is coming from the 2027 maturities already probably this year. And the SEK 10 billion to SEK 15 billion is really dependent on, obviously, the success of executing on the organic path, but also to what extent we can extract the value from the balance sheet by selling nonstrategic portfolios or assets that we have. And obviously, we're working on those different projects.

Then at the bottom of the slide, you can see this is not a guidance or -- it's a forecast or guiding for us when we come up with the deleveraging plan that we have. Maybe just pointing out a couple of things here. On the servicing income, we expect it to be largely flat this year, and that's mainly due to the fact that already going into the year, we have fairly significant FX headwinds with the Swedish krona strengthening by about 5% versus the euro. So we need to see clearly good organic growth to offset that.

Then on interest expense, we assume that will come down over the coming years as our debt burden comes down as we continue to see improvements in our operating performance. And portfolio investments, slightly lower in '26 than '25, and then we expect to be able to ramp that up slowly, and then at some point in time, invest more than what we are amortizing and this being a contribution to the general income growth of the company.

Repeating what we started with, near-term focus, deleveraging and derisking, this is something we need to have to have flexibility in our strategy. We have the priorities, servicing performance, growth acceleration and being a good investing partner. We believe that we could be on the verge of coming into this positive momentum of deleveraging, lowering funding costs, being able to accelerate growth, which will continue to delever and so forth. And we have the guiding stars in our financial targets we will be working on.

That's the end of the presentation, and we will open up for Q&A.

Yes. Before we start on the Q&A, I just want to say that the strategy here, what it actually accomplishes is not only creates shareholder value, but by transforming the company in this direction and working on these levers, we will actually create a much more stable business model. And that's the whole idea to create something that could sustain for a long, long time and that can carry a certain level of debt, but also give the flexibility to manage that up and down depending on the opportunities that are out there. So part of the strategy is actually creating something that fundamentally removes a lot of risk in what we've had as a previous franchise model.

Q&A?

Yes. Let's start the Q&A.

So as we kick off the Q&A, we will actually start with some of the questions coming from the teleconference.

[Operator Instructions] The next question comes from Jacob Hesslevik from SEB.

Maybe we could begin on your financial target regarding the servicing EBIT margin. Could you provide some details on the drivers behind the margin expansion? Is it mainly from lower cost or rather growing top line to better scale the cost base?

Jacob, yes, I mean, it will be initially a lower cost. That's been the main driver between -- behind the improvements of the margin, and that will be the case at least in 2026. Then obviously, we're hoping and planning to see some revenue growth, which this year will be more difficult, because of FX headwinds, but organic growth is something we're planning for. And as we expand into new industries, you'll see that as well.

When it comes to some of the other industries, so outside financial services, margins are typically lower than what we have today. So that expansion doesn't improve margins that much. So margin improvements really comes from lower costs. And we are planning as we lower the cost level to be able to translate some of that or pass that on to customers, because we think that's a good lever for us to grow the business more. So the real combination between sort of revenues or income and cost over this whole period is difficult to say. But I would say at the early parts of the period, it's going to be mainly a cost reduction.

Yes. And an important part is also to create the scalability. So when we start adding on more volumes on the income side, it actually implicitly increases the margin. So you add on basically more variable cost or more -- sorry, you add on more income with the limited variable cost on a scalable platform. So that will also help eventually the margin improvements. But as Masih said, initially, when entering all these new segments, they would probably come with slightly lower margin than we have today.

Great. And then a follow-up on the cost message there. Could you pinpoint it to which division do you see the largest potential to streamline? Is it within servicing? Or is it rather investing, which you are shrinking somewhat given the divestment you announced in January?

You mean in terms of cost?

Yes.

I mean the big bulk of cost sits in servicing. Investing, they are using servicing as a supplier, but the bulk of cost is in our collection process. Then obviously, when the investment book goes down, we have to adjust the servicing provided to the investing business, but the cost out and the process optimization is happening within our servicing business.

Great. And final question from my side is just on how large share of today's collection are automated? And how does that compare to the industry average?

We have less than 10% automated. So it's a small piece. And the problem is when you start talking about the industry, I think on average, the industry is probably slightly worse than we are, but then there's a couple of players, but they mainly operate outside the financial service industry. They have a higher level of automation.

Okay. Moving on to the next.

The next question comes from Ermin Keric from DNB Carnegie.

Maybe first, do you expect any kind of implementation or execution costs for getting to a lower cost? And also, given that you're going to automate more, will you capitalize any IT investments and kind of how much will that CapEx be included in your leverage in any way?

Yes. Yes, there will be some implementation costs when it comes to future technology. I would say in the first couple of years, '26, '27, we basically have the tools we need. We just need to apply them to a larger base of the collection process, just like Norway has done. But when it comes to implementation costs in general, we will be fitting those into the cost targets that we have. So the cost target you see and what you will see over the course of the next few years underneath that target, we will have the implementation cost being fitted. So there won't be additional costs than the targets that we've had.

On CapEx, I think we already have had CapEx on the balance sheet, and I don't think that's going to be higher in the future than it's been historically, to be honest. I don't see that as a big headwind going forward. And then I think also, I mean, in terms of -- I mean, we're obviously a people's business today. We have a lot of employees working across our processes. But so far, I mean, there's been a couple of bigger programs announced externally. I think going forward and what we've basically done during the last year is that a lot of this comes through natural attrition. We have a fairly high attrition rate in some of the -- especially in the sort of the more of the collection part of our business, and we intend to kind of continue working with that rather than announcing any big programs. I think it will be a very natural evolution as we sort of implement new services and new solutions.

Then about your leverage targets. How are you doing with central costs? Where are they allocated in the leverage target? And also, do you include the full contribution from your kind of consolidated JVs in the servicing, because I suppose you need to pay some of that minorities later on?

Yes. I mean today, basically, all the central expenses have been allocated. So it's very, very little left centralized. On the JVs, we will be updating our reporting. So these targets are now set. So we had the old target of '25, and we'll be updating our reporting to reflect the new targets from Q1 2026. So exactly how we're going to do that, you'll see that in the coming quarters. But I would say, in general, the target we're setting now means a lower leverage than the old target we had as a company.

Then the last one would be on the better usage of data. Do you mainly expect that to lower your cost to collect? Or how much more do you expect that you can increase your collections, for instance, on your own NPL book?

I think the data is probably more a driver of collection performance rather than cost to collect. Cost to collect is a way to -- I mean, you can automate a lot of things, and you can get your cost to collect very low, right? But if your recovery rate suffers, the equation might not hold. So I think data is for me to basically decide on what is the next best action. So that's one used case, that's going to be very helpful. The other part on the data is to use it to be better in advising our clients on the best way to structure their thinking around collections and maximize the money they get back on every late payment. So those are two areas. Then, of course, you can use data for many other things. But -- and then sorry, the third sort of used case is obviously to further enhance our underwriting capacities.

Can I just put in one last question? It would just be on -- you showed the example with Norway, which I think is helpful, and its impressive improvements you've done there. But how replicable is it to Southern Europe? Because aren't the claims quite different that you're managing in Southern Europe and digitalization generally in those countries compared to Norway?

I mean, absolutely. I mean the way we think about our markets is that you have your 13 traditional servicing and investment markets where you would have Norway as a cluster in the Nordics, you have Germany, Austria, Switzerland, you have Ben there, so Belgium, Netherlands, you would have France and then you would have Portugal. Spain, Italy and Greece are different. And we will also manage them differently, and we will have different tactics in terms of implementing the strategy. So we think about the 30 markets, that's where we can apply a lot of common levers. And then for Italy, Spain and Greece and also the U.K., which is more of a BPO market, at least for us right now, we would have to be a little bit more specialized in how we implement the strategy. So one solution doesn't fit all. So let's go to the next question.

The next question comes from Patrik Brattelius from ABG.

So my first question would be regarding the income trajectory in the investing side, the coming years. As we saw on the last slide, you will invest less in portfolios the coming year in the short term. And we have seen investing falling for the last few quarters. Should we expect further decline? And when do you foresee in your financial planning that this will level out and more flat line?

Yes, I can start. The only thing we're guiding on today is that in '26, we're likely to invest less than we did in '25, because the priority we have is to reduce our leverage. When it comes to the evolution of investing beyond '26, it really depends on the evolution of our funding costs. We will make sure that we get a sufficient uplift in the returns we have on investing versus our funding cost. So the faster our funding costs come down, the more we can invest earlier. So we can't really dictate that. What we're trying to say is priority 1 is to delever, and then we will be disciplined on price, and we won't have volume targets. We do expect, we believe, and we want investing to contribute to income growth for this company at some point in time during this period, whether that's going to be '26, '27 -- or it's not probably not '26, '27, '28 or later, it's difficult for us to say.

We have a plan of deleveraging. And to what extent and when the market translates that plan into a better rating and lower funding cost, it's very difficult to say without actually seeing it. And obviously, we need to execute quarter-by-quarter, so that -- I mean, presenting the strategy is one thing, executing on it is a different thing, and we need to execute on it to get the trust and see the funding costs come down, and that will lead to higher investment volumes eventually.

But I think also, I mean, on the slide where Masih shows sort of some estimates on how we think things will evolve, you clearly see when we see trends shifting. And I think that's probably your best input on how we see the future.

My next and final question is regarding the JVs. We saw a divestment here announced at the beginning of the year. So could you talk a little bit how you see the divestment environment currently? And also when we look at the presentation, you have almost just below SEK 5 billion in JVs out of your ERC. Can you talk a little bit more and elaborate how much that is for sale and a little bit on that topic, please?

I mean I'll start, and then I think Masih can continue. We are always looking to optimize our portfolio. So if that means that we can recycle and we can sell something where we think the value is X and someone else ready to pay more, that makes -- I mean, that creates value for us. There's also the balance between cash now and cash later in terms of how the collection curve looks like, especially with our focus on deleveraging. But specifically on the JVs, I think we're going to have an opportunistic approach. And as we said, we already have a couple of things that we have identified that we continue to work on.

Yes. I mean there are differences between the JVs. And we have a JV, [ kind of LOP ], you can see it in our IR presentation. We are expecting cash flows from that JV of about SEK 1.5 billion between '27 and '29. It's not paying anything now. And the question there is that should we keep it and get those cash flows? Or is there a way to do something else? So it's this balance, as Johan mentioned, do we need the cash flows today? Or do we have the time and patience to wait for it? And we do that assessment for all the JVs we have. I mean accelerating cash is for us a good thing if we can clearly show that it adds value. At the same time, we also need to find someone on the other side who's ready to make that transaction happen.

Okay. So we have one more question on the phone.

The next question comes from Johan Ekblom from UBS.

Just a couple of quick ones, please. So first, on the deleveraging target. Am I understanding correct that we should look at the cash EBITDA from servicing without any adjustments for Central or JVs or anything like that to be on a like-for-like basis? That's the first question.

You should look at the EBITDA, not the cash EBITDA. We will not be using the cash EBITDA.

But it's servicing only. There is no adjustments. And I guess we'll get the new structure at some point before Q1?

Yes, correct.

Perfect. And then on the margin assumptions, I think, Johan, when we met back in September and debated kind of what AI could do to servicing margins, et cetera. I think your view was that there's a kind of upper bound what the industry will accept before you kind of get intensified competition. And my sense was that at the time, you thought that was lower than the 30% to 35%. So just interesting to see if there's been any change in your thinking or if there are interim specific things that think you can be a huge outlier versus your peers?

I think we do think that there's more to capture. I mean here, you always need to be humble in terms of how much margin you can take and when it becomes unsustainable. But moving from '25 -- I mean, we already see today that we do deals that has a 30% margin. So if we can operate today with a 30% margin in an environment which we think is more inefficient than it will be in the future, I don't think it's very aggressive to assume that the margins in the future can actually be between 30% and 35%. So I think that's the simple logic. I think when we have done the analysis, we have come to realize that we can probably continue to expand our margins a little bit.

Yes. I mean just to add, I mean, we are reporting 25% on average. When you're in 17 markets, it means that you have markets that are clearly above that level and the markets that are clearly below. We can see in the data that where we are clearly below that, we actually have more structural issues, and we are markets -- we have markets operating at 35% today, without really seeing increased competition. We've just done more things. I mean, Norway is a good example, which is higher than the 25% we have as a group. So based on that data, we think that this is possible. And obviously, to some extent, we are trying and will be a first mover and adapt things faster than others. And that's a way, obviously, to improve your margin.

I think another point which we never discussed, I think, it's also when you move into value-adding services, your margins should be higher, but they will still contribute to our servicing margin. And that's something that we can clearly see when we look at some of the markets where we have expanded into the value chain.

Yes. Perfect. And then I guess in an interview in the press today, you were -- or you made a comment that it would be nice to get a new core shareholder or a larger shareholder. And I don't know to what extent the journalist is putting words in your mouth. But is there anything you can tell us? I mean, is there any strategic action being taken to try and source that or anything you can share? Or was it kind of an offhand?

I mean -- I think what I said was we are always meeting investors. We are always welcoming long-term investors that shares our view on what can be achieved in the future. And I mean, it's a very generic statement, and I think that's where we will leave it. But I mean, the fact is that we have one major shareholder that has gone from plus 30% to maybe 10% or 11% -- and then we don't really have much institutional ownership. So of course, we would welcome a long-term investor or a couple of long-term investors that shares our view on what we can create in the future.

Perfect. That's how I thought I should understand it. And then just finally, I mean, you say you're going to be opportunistic about things like JVs, et cetera. I mean when we think about it, when you say, okay, this one has cash flow 2 or 3 years out, your funding cost, I guess, on the margin, at least today is high single digits. I mean, should we interpret that as you would be maybe not very willing, but at least willing to consider selling things at a book loss, because it would allow you to deleverage faster. I mean you haven't sold at any meaningful loss in the past. So I just wondered if there's a change in how you view these things now?

I mean -- I think we are going to be very sensitive to selling anything below book value. I think the recent transaction just shows what kind of appetite we have. So I mean, I think there's a strong hurdle before we actually go ahead and do something opportunistic. And that is we can clearly show there's a value for Intrum and its shareholders, and it helps us on the deleveraging. And I think that's where we're going to leave it. But there are -- there's a lot of people out there who looks into the space and what might be less value to us might be much more value to them. And I think that's the kind of the type of combinations we're trying to find.

I'm going to transform myself from a CFO to a moderator, because we have a few questions coming in, in writing format as well. I'll ask you one. So the first one is, what are your major considerations when assessing the advantages and disadvantages between owning 100% and minority stake in an SDR?

I mean that's a very interesting question, because owning a majority of an SDR comes with a lot of benefits. I mean, first of all, we would control the investment decisions. We would control the definitions of how much CapEx should be spent, how much dividend should be paid out. Of course, we would be regulated, but in line with all the regulatory requirements, we would still be the driver of that agenda. The downside of owning an SDR is that it creates regulatory complexity. It puts another pressure on how we run the group. And there's also a question around consolidation. So if we flip that into minority, being a minority, we need to have a very high comfort that whoever we own this with and whatever shareholder agreement we have, we have a lot of input when it comes to CapEx and dividend distribution. And also, we are probably then maybe an outsource provider of some underwriting advice.

So I think those are the things. And then also having a minority stake, I think our partner needs to be someone where we feel that there's a natural flow. Either there's a natural flow of business that can go into the SDR or it's an investor that needs our support to basically build their book in this area. I don't know if you want to add something.

No. That's very good. I'll ask myself a question. So we have a question here on what the leverage ratio would have been had FX not moved in the quarter. And there's same person has asked a question about what targets we have in terms of servicing revenue.

On the leverage ratio, generally, if the krona weakens, we benefit, because income is greater than cost. So you have a long period of weakening krona, we make more money and that has a positive impact on leverage. In a single quarter, that could differ. It depends on what the FX ended that quarter at versus the average during that quarter. In Q4, I would say the effect was very marginal from FX on the actual outcome of the leverage ratio. On the revenue target on servicing, it is by design. We have 3 financial targets and none of them are related to revenues.

I mean, obviously, margins in combination with cost, that is to some extent, related to revenues, but we don't have an actual income target, because it's something we can't fully dictate. We've presented the data we have, which is that the market should grow by 3%. We presented data on pockets we think we can penetrate, which is up and above the 3%. So obviously, the goal for us is to grow faster than the market by improving our servicing performance and penetrating portions of the potential we've seen -- we see in financial services, nonfinancial services and SMEs. That's the ambition, but we don't set a target, because it's very difficult to know exactly at what pace, how quickly we can execute on the things we see in the market.

So one more question to you then. Can future partnerships be different -- different type of investors than private equity like Cerberus and with different or better fee structures?

I think the future partnerships, if I understand the question, can it be different than Cerberus?

Than private equity?

Than private equity. Yes. Okay, the like. So basically, yes, definitely. I mean, I think that future partnerships, as I think I said earlier, could also be more of a passive investor that actually wants to have the experience and the capacity and also the servicing aspect of working with someone who's been in the industry for a long time. That could be one type of partner. It could also be an industrial partner. I mean, today, we see the dynamics in the industry changing. And a lot of the players are moving into either a pure servicing direction or a pure investing direction. We have both channels.

We're obviously focusing more on the servicing, because we're changing the franchise model. But to work with someone who's in a pure play on the investing side, I don't necessarily think that that's ruled out either. So I think there's many opportunities. We just need to be treading carefully to always keep our credibility and our professionalism in every time we work with someone who's sometimes in conflict in business with us, sometimes in conflict of business with other partners we have.

Good answer. There's one more question. I'll take that myself. We have mentioned Norway as a leading example. Could you provide some color on how the EBIT margin in Norway compares to other geographies?

The margin in Norway is higher than the average we show for the group of 25%. And this is despite the fact that in Norway, you've had a regulation in place since 2018, where you haven't been allowed to adjust servicing fees. So basically, with the exact same servicing fee for 8, 9 years, we've been able to improve the margin quite significantly only by reducing costs through operational efficiency. So that shows you the force in being able to do that across all the traditional markets that we have.

The debtor fees has been locked. But now we actually are -- they are getting unlocked in '26, and there will be an adjustment to partly compensate for the historical non-adjustments. And that hopefully will make the Norwegian market even more interesting going forward.

Okay. We have one more question from the telephone. So let's go to that.

The next question comes from Jacob Hesslevik from SEB.

Just one more question on Slide 31. You state that you plan to redeem SEK 10 billion to SEK 15 billion until 2030. Does that mean your net debt is expected to be SEK 29 billion to SEK 34 billion, where you aim to have a 3x leverage? Was that too simple to look at it? I'm just trying to see if I can backtrack the EBITDA target for servicing going forward.

Yes. No, that's the right way we're looking at it. What you also need to make an assumption for is how large our investment book is at that point in time, because that will consume some of the remaining debt we will have at that point. So -- and we're not guiding on that, but you can make your own assumptions based on the guidance we have, which is more limited investments in the short term, ramping up later on, and hopefully contributing to income growth later in this period '26 to 2030. But sure, I mean, you can start with the current net debt, reduce that with that amount and you get an understanding of where the debt will be and then assume something on the investment book and what is required from EBITDA and servicing to get to the 3x.

Great. And is it possible to state anything what your replacement CapEx level is currently on your portfolio investments?

It's slightly below SEK 3 billion, around SEK 3 billion. SEK 2.5 billion to SEK 3 billion.

So I think with that, we are concluding today's session. I think we have basically shown you where Intrum is heading. In 2030, the company will be a completely different franchise. We have taken a more ambitious approach when it comes to our targets. We have also said that it will take slightly longer. But in the end, we want to focus on the leverage. We want to deleverage. We want to create a much more stable franchise. We are continuing to take out the cost and be more efficient and basically make ourselves ready to compete outside the space where we're operating today. And thirdly, by doing so and capturing more business, both within where we work today, but also with outside in new verticals and new value-adding services, we will increase our margin. And with that, we basically create a much more stable business model.

I would like to thank you all for listening. Thank you for many good questions. It's always great that Jacob is the first, and now he was also the last question. And yes, I guess we will have some bilaterals with some of you going forward. Thank you very much, and have a nice afternoon.

Welcome to the Intrum Q3 2025 Report Presentation. [Operator Instructions] Now, I will hand the conference over to President and CEO, Johan Akerblom; and CFO, Masih Yazdi. Please go ahead.

Good morning, everyone. Thank you for listening. It's great to have you back for another quarterly earnings call. Today, we have a new setup. I am obviously in the new position, and I also want to sort of say hello to Masih, who's been with us now for, what is it, 8 weeks, roughly, almost?

Yes.

And yes, we will go through the Q3 results. In normal order, we will take you through the presentation, and then we'll open up for Q&A at the end. If we start with the quarterly, I think the quarter as such, it is a bit messy when you start looking at it. But a few things to highlight. I mean, on the underlying, we have a higher servicing income.

The underlying business is, in general, performing well. The adjusted EBIT has been increasing 30% year-on-year, and we continue to report net profits. This is the third quarter in a row. And the leverage ratio is going in the right direction, and the investing volumes are increasing if we compare to Q1 and Q2 earlier this year.

On the servicing side, we have now reached the 25% on an adjusted EBIT margin rolling 12 months. And on the investing side, I think the collections, they are slightly above the forecast again. However, the income is down, but I mean, that is on the back of the lower -- the book that we have, which is now at SEK 22.5 billion.

If we go to the servicing a little bit more specific. I mean, this is the first quarter where we have an organic growth since 2022. I think it was Q3 2022, the last time. So, we're now actually not only improving the margins, we're also having a top line that is going in the right direction. We did grow in 10 out of 16 servicing markets. The pipeline is increasing. So, we've had a lot of focus on the top line. I think we discussed this earlier with you, and we continue to now see hopefully a bit of results from that.

We're working closely with the entire sales organization. We're adding new people. We are upgrading. We are working with target lists, pipeline. We're working closely with churn. And the good thing is that there's still potential from our pricing program that should trickle through going into 2026. And we also see that the margin that we get on the new deals is higher than the current margin.

On top of that, we also have now started, and that will be something we'll probably speak about a little bit more when we get to the Q4, what kind of ancillary business is there -- out there and what's the growth potential.

Moving to the investing side. I think here, it's a bit of a -- I mean, the good thing is it's a quarter where we see the investments increasing. So, we're now at SEK 303 million. The IRR remains at a very high and comforting level. And I think for us, it's very important that the discipline on price is always going to be more important than the volume as such.

Of course, we want to increase the volumes, but we will never increase the volumes on the back of being undisciplined on the pricing. We see that we are successful in smaller deals. But on the bigger deals, I think there is an overall market pressure on the downward side, and we have not gone all the way to meet that where the market is.

We'll see where the market takes us going forward. And we're also working closely with Cerberus. So, half of the -- more than half of the deals has been done with them. And we now have deployed SEK 2.9 billion since we started in total. And the good thing is, I mean, we continue to extract value out of the portfolio. So, performance index remains above 100%. And if you compare to the original curve or original forecast, we're now at 109% in the quarter.

I think, with that, I'm handing over to Masih, who will take us through the financials in a little bit more details.

Yes. Thank you, Johan, and good morning to everyone. I thought I'd start with going through all the one-offs we have. I think it's natural, both me and Johan, new in our positions to do a thorough analysis of the balance sheet, and what we've tried to do here is to apply a more conservative approach as well as trying to minimize items affecting comparability going forward.

So, therefore, this quarter, we have a pretty messy quarter in terms of write-downs of impairments and goodwill and also some one-off tax items. So, as you can see, the reported EBIT is almost minus SEK 600 million. If you move that to the net income to shareholders, that has impacted by the gain we had on recapitalization of SEK 2.3 billion, and we have underlying financial expense of SEK 838 million.

We had a couple of one-off tax items and underlying tax of SEK 158 million, which takes you to the almost SEK 400 million net profit. Then we have a goodwill impairment related to Spain, where the development has been more negative than was assumed in our goodwill calculations, and therefore, we have that impairment.

And then we have some other impairments mainly of client contracts on the balance sheet that we have now written down. So, overall, a messy quarter, a lot of one-offs. But as I said, we have taken a conservative approach on the balance sheet, and we're hoping that you'll see much less of IACs going forward.

If I move to the next slide, Slide 9, and look at the key financials for the group. As you probably have seen, income is down 3% compared to a year ago. More than half of that is FX related. At the same time, the cost trend continues to be positive, as you can see, and the cash generation has improved compared to a year ago.

The leverage ratio has been restated. Again, here, a bit more conservative approach. We're looking at the nominal value of debt rather than the book value, which means that the leverage ratio is higher than it otherwise would have been had we used the old definition. With the old definition, it would be at 4.4. And I should also mention that full year 2024, without the discontinued operations, it would have been at 5.3. So, we are moving in the right direction in terms of leverage, but obviously, we want to move this even further going forward.

If I move to the next slide and look at the underlying cost trend, you can see that we've had a strong cost discipline also in Q3, the run rate is now SEK 12.5 billion in terms of costs and costs are down 10% compared to the same quarter last year. And that is mainly driven by a reduction of FTEs, down about 1,000 people compared to a year ago.

Moving into servicing. As Johan said, encouraging to see that we have organic growth in the quarter. The total income is flat, but that is completely driven by FX of a 3% negative effect, offset by organic growth of 3%. A lot of the one-offs is in the servicing business, so the EBIT is distorted by that. But if you look at the adjusted EBIT, it's up 27%, and it's also up 30% so far in 2025 versus the same period in 2024.

We want to double-click on the leverage we have. What's happened in this company the last couple of years is a quite large shift in the composition of the business. If you look at the bars, you can see that 2 years ago, 24% of the cash generation was coming from the servicing business that has almost doubled to 43%.

In our view, I think the general conception is that servicing is less risky than the investment business, which means that the cash flows generated from that business should be able to cope with a higher leverage. Here, we have assumed that our investment business has an LTV of 80% that should be financed by debt of 80%. And if we assume that the remainder of the debt on the balance sheet is in the servicing business, you can see that the leverage ratio for the servicing business is actually coming down quite a lot, especially the last few quarters, given the fact that the cash generation from the servicing business has improved quite a lot.

I think if anything, this chart shows that we want to, going forward, take into account the riskiness of our business when we set our leverage targets so that it takes into account if we continue to derisk and have a larger share of our revenues and profit coming from servicing.

Moving into next slide, Slide 13, investing. You've seen this, but the income is down. This is partly FX, but largely due to the lower investments compared to the amortizations we have. So, a smaller book value leads to lower income. We are collecting well on this portfolio, which means that income is down slightly less than the book value. Nevertheless, as Johan said before, we have done more investments this quarter. We want to do even more going forward, but we want to strike a good balance between pricing discipline and volumes.

Moving to Slide 14. Looking at the debt and maturity profile. You can see that net debt is now at just below SEK 45 billion. We have about SEK 5 billion of cash, SEK 2 billion of that is restricted. It could be used to buy back bonds. The remaining cash is free will. And you can see the maturity profile with about SEK 12 billion of maturities in 2027, of which about half is the new money notes we've issued.

I think with that, I'll hand back to Johan, and he'll do a couple of final remarks before we open up for Q&A.

Okay. So, I think, first of all, the quarter is a quarter where we see the underlying business performing well. It is positive to see a servicing top line year-on-year organic growth. I mean, I think we discussed and talked about this a lot. We are really emphasizing the top line, and we are putting a lot of effort in making sure that we get new business into the group. However, I think servicing business as such is a slow-moving business. It comes with RFP processes, there's onboarding, there's ramp-up, et cetera. But there's definitely an ambition to keep this top line growing.

And the investing volumes, as we said, we will continue to have a balance between volumes and returns, but it's always good to see volumes going up when the returns remain high, and we will continue to focus on developing the partnership with Cerberus. The one-offs from the recapitalization and impairments, I'm sure we'll get a lot of questions on, so I'll leave that for the Q&A.

And we have now reached a 25% margin. I think everyone expected us to reach it, but it's always good to reach a goal that everyone expects you to reach. So, it's a tick in the box. And we will come back when we present our full year results with the strategic review and also updated financial targets.

So, I think with that, I think we can open up for questions.

[Operator Instructions] The next question comes from Jacob Hesslevik from SEB.

So, my first question is on the adjusted EBIT margin for servicing, which reached 25% in Q3, which is up from 18% a year ago. It seems to be driven primarily by cost reduction. How sustainable is this margin expansion? And what portion came from operational improvements versus onetime efficiencies?

I can start here. I mean, I think that the margin has proven to be sustainable. It's been proven to increase quarter-by-quarter. Given the focus that we now have on growing the top line, I think we will have to strike a balance between how much more margin improvements we want and how much do we want to actually put into our commercial proposition in order to grow the top line. And if you ask me, on the balance, I would say, I'm quite happy with 25% margin if I can grow my business at the same time.

All right. Perfect. And then, if we move to investing side, collection performance was 101% in this quarter, slightly better than a year ago at 98%, but cash EBITDA from investing still declined to SEK 1.35 billion from SEK 1.5 billion a year ago due to a smaller book. When should we expect cash EBITDA to stabilize or grow again given your stated intention to increase the investment pace?

I mean, it's a very tricky question to answer because I cannot predict how much we will invest over the next quarters. But the ambition is clearly that we want to get the investing business to flatten out. So, if you think about the decay, we've had over the last years in terms of portfolios going down, investment volume going down, now it's time to turn that around and stabilize.

But we also said that we have a SEK 2 billion target. Let's make sure that we reach the SEK 2 billion target first, and then we'll get sort of to the next level. And by then, I think also we will have our, let's say, Q4 report, and we'll give more guidance on where we see a future portfolio.

Okay. And just finally, on your updated financial targets, you mentioned focusing on improving profitability, driving growth and strengthening the balance sheet. These can sometimes conflict with each other. So, which takes a priority if you face trade-offs? For example, would you sacrifice near-term growth investment to the 3.5x leverage target faster? Or how should we think?

I think in -- I mean, we need to address our leverage. That's the main priority. But then doing that, I think it's also important to always strike a balance between sort of short-term sacrifices and long-term gains. But I think we will give you more clarity on that when we talk again in 3 months' time.

The next question comes from Patrik Brattelius from ABG.

Can you hear me?

Yes.

Perfect. So, my first question is to Masih as he comes in with a little bit of a new outsider's perspective. So, in your new role and given that you're new, can you talk a little bit how you view a sustainable and long-term capital structure in Intrum? And how do you think that should look in terms of leverage ratio?

Thanks, Patrick, for that question. A sustainable balance sheet is a balance sheet that is in better shape than the current balance sheet. I think that's clear for everyone. We'll come back with actual targets on that when we present the Q4 results. But generally, I would say that we need to take into account what the composition of the business will be in the future depending on how we grow our servicing and investing business, and we will take the different levels of riskiness of those 2 different business lines into account when we set new leverage targets.

That's the hint I can give you in addition to what I started with saying that we need to be in better shape in the future than we are today. So that's the main priority of this company. That's going to be my main priority of -- myself as well, obviously. So yes, you need to give it some time. We'll come back, but the direction is clear. We need to be in better shape.

Okay. And speaking of the balance sheet, you have some new money notes given out in connection with this restructuring. And to my understanding, those will partly be used to buy back bonds. So, can you talk about how much you aim to buy back with this? And when should we start seeing that these actions being taken?

Yes. I mean, we can use that money to buy back. We'll do that if we believe that, that's good for the company as a whole. We can't give you any timing of that. We will do that when we think that the timing is right, if we do it. But the whole purpose would be to make sure that we deal with the maturities we have in the sort of short term, the 2027s. But again, it's an opportunistic action tactics from us. So, we can't give you any timing on it. But if we feel that it's going to address the balance sheet to some extent, we'll do that.

Okay. And servicing, it's growing with 3%. It's, however, below a little bit the old target level. Do you see that you need to invest more in the cost side in order for this to ramp up? Or is there anything you can do that wouldn't drive increased cost in the short term to ramp up income on this side?

I mean I'll start here and then Masih can add. But in servicing, I think the cost trend will always be sort of, on a relative basis, going down. We need to become more efficient. We need to be more automated. We need to be -- we basically need to build on a scalable platform. Are there short-term investments we need to grow -- we need to do to grow the servicing business? Nothing that is material from my perspective.

But then, I think one of the key questions that we have that we will have to address in the sort of strategic review is also how -- what's the ancillary business that we can grow? Because right now, we are involved in some very important processes with our clients, and there could be opportunities to grow ancillary business out of that, that would be sort of a nice add-on to the business we run today. But -- and that could require CapEx. But I think that's something, again, we will have to come back to when we have done our own homework.

Yes. I mean if I add what's, I think, interesting with the servicing business is that there's a lot of legacy in that business, not just with Intrum, but with the whole business. And really improving the offering has a lot to do with becoming more cost efficient. So, it's actually the case that the more cost efficient we become, the more automated we are in that business, the better the offering will be to our customers and the more deals we will win at better margins.

And so, in that business, it is not really a conflict between investing more and you seeing more higher cost in our P&L and winning business. I mean we are hiring salespeople now, but we're talking about 30 people, and we have almost 7,000 people working with collections within servicing. So, it's nothing compared to the base we have to work with in terms of becoming more efficient.

Given that you were at the other seat of the table when you -- in your previous job, do you see any immediate actions that the Intrum could do in order to improve their -- the top line growth within servicing to win new inflow from, for say, banks?

There are things we're looking at in terms of how we price deals. We have a fairly large, fixed cost base. And obviously, the more servicing revenue we have on the platform, the smaller is the fixed cost base per deal, so to say. So, we are making some changes to how we price new deals. And I hope and we think that that change in financial steering will make us more competitive in new deals and still uphold or maybe even improve the margins from current levels. So yes, there are things we can do, and we're looking into it, and we're trying to apply it as quickly as possible.

A very last question from my side is just on Slide 12. You -- on that changed composition of cash flows, you showed the total leverage. Can you -- the dotted line there, the servicing leverage, which we don't see a number for. Can you please share the detail what that level would be in Q3 '25? Can we get a reference?

Yes. I think if you look at where that dash line was a year ago, so it was above 10x, and now it's around 7x. So, it's a pretty strong deleveraging if you allocate some of the debt to the servicing business. So, it pretty much follows obviously the improved cash generation from that business.

The next question comes from Ermin Keric from DNB Carnegie.

I'll continue on Slide 12. Thank you for that, I've asked for a long time, so appreciate it. And just to hear a little bit how you're reasoning with the 80% LTV you're assuming on the investment. I suppose on the Cerberus Project Orange, you had 60%, if I remember correctly, on the Intesa SPV, it was 60%. Why do you feel 80% would be the kind of fair level to assume for investing?

I mean, you can argue whether it could be 60%, 70%, 80% or 90%. I don't think that's the main point. I think the main point is to show that irrespective of how much you allocate to it, if you allocate the remaining debt we have on the balance sheet to the servicing business with stronger cash generation in the servicing business, you would have seen a declining leverage for that business.

I mean, coming from the banking world, a comparison I would make is that if you have a bank that is only doing consumer lending and then a few years later, it's only doing mortgages, you should probably view that bank as being less risky and therefore, would be allowed to have more leverage. And I think this is a -- it's a fair comparison with our business as we are more and more moving towards servicing, which we believe is less risky and therefore, should be allowed to have a higher leverage on.

This doesn't mean that we will set leverage targets in the future that are less ambitious than the ones we've had, we just think it's important to take into account how the composition of our business changes.

But if I can follow up on that, maybe I'm thinking about it the wrong way, but [indiscernible] the opposite. If you are a bank, when you have a lending book, you can have some leverage. If you just have commissions, you would have less leverage.

Well, I would -- yes, I mean, if you take a bank, it's typically the case that you have risk weights for the lending business and the riskier the lending is, the higher is the risk weight and therefore, the more capital you have to have. That's the way I would look at it.

Yes. And I wouldn't compare -- I mean, remember, when we do the servicing business, I mean, the contracts that we run are usually sort of 3 to 5 years. It's a long-term relationship, and it's also -- it creates quite a lot of stickiness. So, I think that's where we're coming from. Whereas on the investing side, in the end, it very much depends on what's your investment appetite and how much can you invest to continue to either replenish your portfolio, increase your portfolio or decrease your portfolio.

So, it's going to be more sensitive in the short run in terms of your investment appetite. And then also, there's always a, I think, a question mark, at least from the market when you invest into these type of portfolios, will they actually yield the returns that you put up when you made the investment.

Fair enough. Then moving over to the servicing side. Organic growth, now you're back to organic growth again, which I think is, of course, highly positive. Is -- around the 3%, is that a new baseline we should think about? And maybe extending the question a little bit, I suppose getting back to organic growth has been a focus for several years. Why have you tweaked now that's making it possible to do that while also doing it in a profitable manner?

And maybe lastly on that question, the SEK 1.8 billion pipeline you mentioned, how should we think about that? What's your typical win rate? I suppose that's a gross number. How should we think about the underlying churn you have? So how much from that SEK 1.8 billion should we think about adding to your future income?

If we start with your first question, which is, is this a new sort of baseline? I think that one we will have to refer to when we come back in Q4. Then we will try to -- if we articulate something, it will be then hopefully answering your question.

I think there were many questions in one. But churn, I mean, in general, we tend to manage churn in a good way. So, we actually don't lose that many contracts. And then there might be always -- I mean, contract could also be amended. So, there could be parts of what was in scope before is not in scope in the future. I mean a lot of clients, they usually use 2 or 3 providers to have benchmarks. So, the composition might change.

When it comes to new business, I mean, as I said, we have a very high focus on this. And this is now about sort of moving the organization from a very margin sort of focused type of effort to something that is much more forward leaning and thinking about new business.

So, coming back to your question around the pipeline, a lot of this business -- a lot of those tenders will materialize in Q4. It doesn't mean that that will bring income from the 1st of January. It means that we will start ramping up the new contracts during 2026. And for bigger contracts, the ramp-up period can be as long as 6 to 12 months, especially if it's with the banking client where you do sort of gradual steps.

So, I think that the SEK 1.8 billion should be just seen as a -- there's a big amount out there. We're trying to get the biggest share out of it as possible. But I wouldn't sort of -- I wouldn't expect that, that just means that we suddenly add all these revenues from the 1st of January on top of what we have today. It's a bit more complicated than that.

Got it. That's helpful. Then, just one final question. On cost, how much more is left to be done there? And I suppose common costs looked very strong this quarter, down almost SEK 100 million quarter-on-quarter. Is that a sustainable level that we should think about going forward? And I suppose generally with cost, have you compromised the servicing quality to an extent? Or have you been able to add more technology usage already now?

Yes, I can start with that. I think there is a lot more to be done on the cost side when I'm talking about the mid-to-long-term, and that has to do with applying new tech and making the manual processes more automatic. So, I think this business over time should have a clearly lower cost base than it has at this point. How quickly that goes obviously depends on how quickly we apply best practice from different markets we work in but also use tech in a higher degree than we have today.

In terms of the central costs, I think that most of the work there has been done, but I still think that there is some more to be done. I would also add that if you look at the impairments we've taken in the quarter, those will just in itself lead to about SEK 300 million less cost in 2026 than otherwise would have been the case. So, we are obviously moving into '26 with a positive momentum on the cost side given the FTEs we have today compared to a few quarters ago.

And we think that this is a long game where the cost trend should be downwards in the mid-to-long term. Then the question is, to what extent do you use that to reinvest in your business and grow top line even more? And to what extent do you allow it to improve margins. And that's a balance we need to sort of try to strike in the future.

The next question comes from Markus Sandgren from Kepler Cheuvreux.

So, I had one -- starting with one technical question. The gains you're making on the debt that you -- that has been written down, it seems like there is an element of mark-to-market of the outstanding debt. Is that something new or -- because you did write it down by SEK 3.5 billion, right?

Yes. It is a mark-to-market, which happens when you do the recapitalization. So, you use the bid price basically that establishes just after the recapitalization and the difference between that nominal value of the debt and the bid price leads to a gain for us as the bid price was lower than nominal level.

Exactly.

Exactly. So, it's like a fair value adjustment.

Okay. But that is not going to be fair value going forward from here?

No.

Okay. And then secondly, I was thinking about the aging back book in investments. What's your take on the collection performance over time when the portfolio gets older? Is it kind of constant or is it gradually degrading?

I mean if your question is, if we will continue to collect according to our forecast or better, I think we have taken in -- I mean, when you do the portfolio and you put out the forecast, you obviously take into account the decay. And we have an ambition to continue to collect above the index. But I mean, any portfolio -- well not any, but most portfolios, they have a higher collection rate in the beginning rather than the end. But that's also why I think we emphasize that our investment pace should continue to increase because we need to replenish.

Okay. And then lastly, regarding the market. Now we've been through a rate hike cycle and rates are coming down. What's your feeling on your markets that -- I mean, how much should we expect the market to grow when rates are much lower now in the coming years?

You're talking about the servicing business?

Yes, servicing, yes, right.

I mean, I think there's a -- I mean, there are a few trends in the servicing business. I mean one is obviously the macro has an impact on, especially banks, utilities, telcos. But there's also a lot of new kind of business verticals that has had an impact on the market as such. I'm thinking about Buy Now Pay Later, the steady state of increase of consumer lending, new entrants, all of that.

And then you have -- in many parts of Europe, we also have some of the traditional business that we see in the North, it doesn't even exist. So, I think we will continue to see this market sort of growing but not growing massively. And then, as I said, I think in the previous interview, when we plan, we have to plan for a normal business cycle, which means that we cannot plan for another euro crisis, real estate crisis, financial crisis. That's when things sort of shift around.

But we should be able to replenish and grow the servicing business, just basically capitalizing on the fact that we are in every country, we meet every different dynamics. And then, on top of that, we hope we can also figure out what's the next step when it comes to ancillary business because we are closely tied to many clients, and there are services that we don't provide today that we can probably provide tomorrow.

The next question comes from Angeliki Bairaktari from JPMorgan.

Just 4 questions from me as well. First of all, with regards to the servicing pipeline of SEK 1.8 billion that you mentioned, can you give us some color on where those clients -- those new clients could be coming from in terms of sort of industry? Are we talking mostly about banks or other type of clients?

And secondly, with regards to the organic servicing revenue growth, can you break the 3% down into regions like Northern Europe, Middle Europe and Southern Europe, like you've done in the past?

So, yes, on the first one, I think some of the bigger clients or potential clients in the pipeline are bank related because that's usually when you have sort of bigger size. But it is a mix, but the bigger contracts are bank related. I think when it comes to the growth, I don't have the numbers in my head. I don't know if you remember, Masih, but I think we -- I have -- yes, we need to -- let us come back to that. We'll just get the numbers.

And if I just may ask a couple of questions on the leverage ratio and the debt. So, first of all, you mentioned, I think, in your remarks that you have restated the debt and the leverage ratio to now take into account the market value of the debt. Can you give us some more details? Maybe I misunderstood that. And why are you doing that? Because I thought the typical definition of leverage ratio for every company is just the nominal value of the debt divided by the 12 months EBITDA. So, if you can just give us some more color with regards to the restated calculation?

And then second question on the debt. How do you plan to refinance the 2027 maturities at the moment? I appreciate that this may change, but based on where we currently stand, what would be the plan?

Yes. We haven't used the market value when it comes to the leverage ratio. So, we are using nominal value. The market value was referring to the effect of the recapitalization and that net gain we had. So, when calculating the leverage ratio, we do it exactly the way you described it. We look at the nominal value and the 12-month running cash EBITDA.

On the refinancing, the 2027, obviously, we have a few quarters to go before we need to deal with that. The whole purpose is to put the company in a better position so that refinancing goes well. So, it's about continuing to improve the business, generating more cash, improving the top line, continuing to reduce costs. So, we can only sort of focus on the company and how we're doing operationally to put ourselves in a good position before we need to deal with that maturity.

If I just may come back to the leverage ratio...

On the growth, just to answer your question, most of the growth is from Middle Europe, but we also have some growth in selected markets in the South, in particular, Italy. And then the North is fairly sort of neutral.

Sorry, just to come back to the leverage ratio because I think you mentioned in the beginning that you have obviously reported 4.7, consensus was looking for 4.5. And I think you mentioned that under the old definition, it would be 4.4. So, I'm not sure what you have changed. If you can just explain what you have restated, if there's something that has been restated in the calculation.

Yes. So, now we are looking at the nominal value of the debt, whereas with the old definition, it was the book value, and the nominal value is a higher number. And therefore, the new definition leads to a higher leverage ratio than would have been the case with the old definition.

Right. And are you -- is that because in your covenants, you have to use the nominal value of the debt? Or what is the reason behind the change?

Well, it is more in line with the covenants. So, it's not a perfect, but it's a very, very close proxy to how the covenants are set up. And we also did change because if we would have done the old method, we would basically take benefit out of this accounting adjustment, and that's why we say with the old definition, it should have been 4.4, but we think it's more right to actually look at the nominal value and then talk about 4.7.

The next question comes from Alexander Koefoed from Nordea.

Can you hear me?

Yes.

Just coming back again there to the leverage ratio. Sorry if you get tired of it. But this view that you can lever the company more on service as opposed to investing. I think that has -- some would challenge that view, although I agree and appreciate that lower risk, everything else equal, would be possible to finance.

But again, yes, I think Ermin alluded to it as well, having investable assets on balance sheet would also be financeable. So that view, has any of that been cleared with creditor group out of curiosity? Or is that strictly your own view? That would be my first question.

And then maybe secondly, if I can ask on your non-recurring items and I think SEK 2 billion in one-offs related to restructuring. Is there any of that actual payments, bills you need to pay from that, that -- how much of that is a hit? And when is those costs expected to be completely over and done with also in your cash flow statements?

Yes. If I start with the first question, as I said before, this analysis of looking at the leverage for the different parts of our business will not mean that we will set a leverage target in the future that is less ambitious than we otherwise would.

We just think it's fair for ourselves to look at the riskiness of the business when we do set that target. So, I think we're just basically alluding to that we will probably look at having different leverage targets for the 2 types of business that we operate.

What that lands in terms of aggregate leverage, whether that's going to be a target that's at the 3.5x that we have today or what it's going to be more ambitious than that and what the time frame of that will be, we'll come back with it in Q4, we just think for ourselves and how to operate the business, it's good to look at different targets for the different business lines that we operate and take into account how we think that those business lines will develop going forward a few years from now.

On your second question, yes.

Yes. It's Anne here. On your second question regarding the costs that went through from cash in the third quarter, around SEK 550 million went through as cash. And then I think you also asked about the tail, if there's anything more to come through. It's very, very small. I don't think there's anything material.

Yes. I mean, I would say, as for Q3, the recap is closed. And yes, going forward, it's sort of business as usual.

Okay. No fine. I was just curious on it. So, appreciate that. Maybe a third question, if I can. And so just it appears that my interpretation of what you're saying is that growth ahead might be a tad difficult for you, I mean, also on lower FTE base that for you to capture any growth, maybe underlying growth seen in Europe for you to really capture that, you need to sort of invest in automations, et cetera, to actually release capacity with your employee base to actually capture this top line. Otherwise, it will be more or less a lost opportunity for you because there's not too much capacity left with the current FTE base. Is that a fair way to say it like that?

No. I mean, I think what we're saying is we have room to grow with the current capacity. We think that if we can be even more efficient going forward, we will naturally win even more business. So, part of the -- sort of by being the more efficient you are, the more attractive value proposition you have. So, I think we have a different take on that. I mean, today, we can grow. We have capacity to grow in every market. But the more efficient we become; the higher likelihood is that we can grow even more.

Yes. Okay. That's fair enough. Understood. I think there is some comments in the market that Buy Now Pay Later loans are perhaps seeing particular growth. Would you capture any of that? Or would this bank-related clients coming in, would that be more to your larger ticket items, maybe not to the same growth? Or would you comment on that?

I think Buy Now Pay Later is a very interesting segment, and we're already working with it, and we have been successful to actually onboard more Buy Now Pay Later volumes just in the last 2 quarters. And it's a segment that we will continue to target. And I think it's a segment that, in particular, fits with our digital collection platform. And yes -- so, yes, I don't see any -- it's a big opportunity.

The next question comes from Rickard Hellman from Nordea.

Hi, can you hear me?

Yes.

So, to start with, yes, to be sure, looking at the cash flow, you have very high interest paid in Q3. And I assume this is related to accumulated interest from the capitalization. And you said that we're more or less done with all the cash flow now. Is that also [ for ] interest? So, we will not see any more tails out of this on the financial side?

Yes. All the accrued interest was paid in Q3.

Super. We talked a lot about the growth in frequency. Just a follow-up on that also. Have you seen any changes from your bank customers around handling non-performing loans in terms of volumes and signs of earlier collections or earlier divestments of portfolios?

No, nothing that is particular for the quarter. I mean this continues to evolve differently depending on market, depending on the situation. I mean, for now, now we have a situation in Germany where you see the Stage 2 is going up. So, it's very -- there's no sort of a coherent trend across Europe.

Okay. I see. And then, of course, also, I'm not sure if you would like to answer, but -- and it has been discussed a lot around this Page 12 about leverage. But if you would have a fully service business, I mean, without any investing vehicle at all, what would you say a total leverage would be for such business?

I think -- again, I think that's something we will leave for the future. I think the point we're trying to make is not that -- I think the point -- we're just trying to show that our business has fundamentally changed. And the 2 legs, they have a very different type of business profile. And we will have to come back to this when we come with our Q4 strategic review and explain more how we see the future. But all things equal, we definitely have an ambition to become a much more resilient company when it comes to leverage. But we don't have a number for you.

So, fully understand. But as you also understand, I mean, this -- all this kind of discussion around leverage probably we have a lot of attention among investors and analysts.

Of course. So, I think the message that we -- if we want to conclude one message, it's that the leverage has to go down. I think it has to continue to go down and it needs to be sustainable. And we will tell you more in Q4 how we will make it happen.

The next question comes from Wolfgang Felix from Sarria.

Hello, can you hear me?

Yes.

I have 2 remaining really, only. One is regarding the SEK 2 billion target that you were mentioning earlier in the context of your investment division bottoming out. I'm not really sure what target you were referring to there. If you could just repeat that again, that would be fantastic.

And then obviously, you've just restructured. And if you're looking across to your competitors, say, in the U.K., for instance, after the restructuring can be before the restructuring. And so, I guess if you're looking at your own balance sheet and given your restructuring has also just been a very light restructuring, despite the complexion perhaps, how would you rate your options today to manage liabilities perhaps a little further?

First one, I mean, we have -- I think we've mentioned before that we have an ambition to invest SEK 2 billion per year, so roughly or SEK 500 million per quarter. That's the SEK 2 billion I'm referring to. And then I think on your question on leverage, I think Masih did answer that before. I mean the way we see is that we need to continue to operate our business in an improving fashion. We need to continue to become more efficient. We need to continue to improve our servicing business and adding top line growth.

And then on the investing side, we need to, at the first instance, reach the SEK 2 billion per year as replenishing. And then we'll see what the next step is in terms of investment volumes. And that's the organic path on how we can delever.

And so, you're not currently looking at anything -- we shouldn't be expecting anything inorganic, so to speak, over the next, say, year?

I mean when we do a strategic review, we will look at all options, and we will see which one creates the most value. But the base case is obviously always that we move on organic path.

The next question comes from Ines Charfi from Napier Park.

Hi, can you hear me?

Yes.

Just going back to the one-off. So, can you talk about the impairments, the goodwill impairments and what kind of -- what does that mean basically for the future?

Yes. I mean there are a few different impairments. The big one is the goodwill impairment we have done for Spain. As I said previously, it's related to what we thought would happen with that business and the actual performance, and we could see that the actual performance had been worse in the short term. And therefore, we felt that it would be conservative to do a goodwill impairment there.

The other impairments mainly relate to client contracts we've had on the balance sheet, where you do the same kind of assessment of what kind of revenues you think you're going to generate from those customers going forward. And again, we've taken a conservative approach and have a lower assessment on those revenues, and therefore, we've done impairments there.

And the remaining impairments relate to software we've had on the balance sheet that we've written down. And as I said before, what this means is that D&A will be lower than otherwise would have been the case going forward. And for 2026, we're talking around SEK 300 million lower D&A expense.

Okay. But just to understand that a bit more, does that mean -- like, should we expect kind of less -- I was trying to understand the impact of the -- in terms of collections, et cetera, going forward. Like would the impact be for the short term as in like next quarters? Or like how should I think about that?

There is no impact on collections. It's just an impact on the cost line, which will be -- everything else equal will be lower in Q4 and also lower in 2026. But this is not related to how collections will perform going forward.

Okay. And then, just looking at the maturity profile, Page 14. So just to be clear, you still have outstanding in 2025?

That's a term loan that we're paying back to some extent, and it's been -- it has been extended. So, it's not a -- yes, so it's nothing you need to be concerned about.

So that has been extended?

We're currently in negotiations on that.

Well, it should be done fairly short -- fairly soon. And it's not fully being -- I mean, it's partly being paid, partly is extended, and it's just to give us a bit more flexibility going forward.

Okay. So, I guess it will be dealt with...

Before we -- when we announced Q4, it's fully dealt with.

So partly extended and partly paid down.

Correct.

And just looking at the RCF, so what's the drawn amount as of 3Q?

RCF.

Sorry, say that again?

What is the drawn amount of the RCF?

It's around 11 point….

10 point -- yes, I mean it's almost fully drawn.

The next question comes from Wolfgang Felix from Sarria.

One follow-up question really quickly. Can you give us some guidance on your sort of speed of collection going forward? Are you going to maintain the same rate of collection? Do you think you're going to maybe slow it down a little bit? What should be sort of a stable case from here, all else equal?

When you talk about our collection rate, in what context? Are you thinking about our investing portfolios or...?

Yes. I'm sorry, only the investing portfolio.

I mean the investing portfolios, they will -- it's hard to predict, but we've -- historically, we've been collecting slightly more than our forecast. And I think that's the ambition going forward as well. And then obviously, the amount of collections depends on the size of the book and the profile.

Yes. So, if -- I'm trying to picture it like this. If you are maintaining as many people as you were before, but you have a smaller book, then you would be churning that book or turning it over a little bit more quickly. Is that the idea? Or is the idea to shrink your collection engine, if I can call it like that, to maintain the same speed of working out the smaller book?

I mean, we're always trying to collect as much as possible. And then at the same time, we're trying to be more efficient in every collection. So, I think your analogy is not really the way it works in reality. But of course, if you have lower volumes, you need less people. But I mean, out of our 7,000 people working in collections, serving our own portfolios is just one part of it. I mean we have a much bigger book with our clients where we operate.

Yes. No, that I understand. So -- but I think I understand your answer.

There are no more questions at this time. So, I hand the conference back to the speakers for any closing comments.

So, thank you for a lot of questions today. I hope we've been able to clarify what is a little bit of a difficult quarter to understand, given all the one-offs. But I think as we pointed out, we're happy with the underlying. We're making progress. We're deleveraging. Cost continues down. We see a bit of servicing income growth and the investing portfolios are collecting slightly better than planned. And the investing volumes are higher than before. And, obviously, we want to further improve going forward. And we hope to see you when we present the Q4 and talk more about the way forward. Thanks a lot and have a great day.