Axactor - Q4: lots of moving parts, but cash EBITDA better
Q4’20: reported EBITDA EUR 1. 8m below ABG… …Cash EBITDA EUR 1. 6m ahead in the quarter Revaluations blurred, cash EBITDA better than expected Q4: reported EBITDA of EUR 21. 3m, EUR 1.
8m below ABG Reported EBITDA of EUR 21. 3m was ~8% below ABG in Q4 and 11% below consensus. The deviation was driven by lower net revenues (gross revenue net of amortization and revaluations), as total opex was better than expected in the quarter.
The lower net revenues were entirely driven by higher net negative revaluations of EUR 12. 2m vs. our expectation of EUR 4m, as total gross revenue was 1% ahead of or estimate.
Reported net profit was EUR 0. 2m below our estimate, while a further reversal of the REO impairments (EUR 5. 9m) meant that net profit to minorities was better than expected.
In addition, net financial expenses of was EUR ~2m higher than expected due to the EUR 7. 1m in write-down of capitalized expenses related to refinancing in Q4. In sum, this led to a net profit after minorities of EUR 2.
7m, 1. 7m below our estimate. Cash EBITDA 3% ahead of ABG on better opex and REOs Cash revenue was slightly ahead (+1%) of ABG in Q4’20, primarily driven by better REO sales (EUR 12.
2m vs. ABG at EUR 11m) as gross collections on NPLs and third-party collection revenues were in-line with our expectations. Combined with better opex as Axactor continues to run a lean operation, this led to a Cash EBITDA of EUR ~64m in Q4 (+3% vs.
ABG) and a margin of 67. 2% which was 90bp better than expected. Well positioned to capitalize on improving market condition Following the restructuring of the balance sheet made in Q4’20 and start of Q1’21 (as well as continued improvements on opex) we find that Axactor is well position to capitalize on the increasingly attractive NPL market during 2021 and see margin expansion through increased scale.
We still see that recovery in collection is expected to be slower due to Covid-19 (LTM performance 96% vs. active forecast) but fluctuate around active fore.
