Axactor - Underlying better, but one-offs blur
Q1’21: Cash EBITDA EUR 52m, 4m below ABG and cons Deviation driven by one-offs from cost reduction initiative EUR 4m EBITDA uplift from YE’21 from cost reductions Cash EBITDA EUR 4m below ABG and cons due to one-offs Reported Cash EBITDA came in at EUR 52m in Q1’21, up 8% y-o-y, but about EUR 4m below both our and consensus estimates at EUR 56m. The deviation was mostly driven by the one-off restructuring costs of EUR 3.2m in the quarter (mainly severance). The company will book another EUR 1m in restructuring costs in Q2’21 and all restructuring costs are taken during H1’21, these relate to site consolidation in Spain where offices in Sevilla, Bilbao and Zaragoza are closed. The company expects to realize EUR 4.8m in annual savings from this initiative, with full effect from Q4’21.
The net effect of the restructuring costs is EUR 2.6m in Q1, as about EUR 0.6m of savings had an effect in Q1’21. Adj. for these one-offs, reported EBITDA would have been EUR 1m ahead of our estimate, while Cash EBITDA would have been EUR 1.5m below (primarily due to slightly lower REO sales and 3PC than expected).
Underlying earnings significantly better than expected Gross revenue came in at EUR 85m in Q1, up 7% y-o-y but about EUR 2m lower than our estimate. This was primarily driven by slightly lower REO sales and 3PC revenue just shy of our estimate. Gross revenue from NPLs (collection) was EUR 63m in Q1, up 17% y-o-y and in-line with our estimate, while portfolio amortization was somewhat lower due to better collection performance than we had anticipated.
We also note that an unrealized FX loss of EUR 4m blurs the picture significantly vs. our estimate. Adj.
for the unrealized FX effect and for restructuring costs (net of savings) in Q1, reported net profit would have been EUR 3.3m (assuming 30% tax rate), EUR 1.5m ahead of ABG and EUR 1.2m ahead of consensus. Similarly, net profit to shareholders would be EUR 5.2m, EUR 1m ahead of ABG and EUR 1.7m ahead of consensus. Cl....