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Statement by the CEO
Intrum Justitia is Europe’s leading provider of credit
management services (CMS). We are active in 22
countries with signifi cant differences in market size,
traditions and regulations. Our business mission is the
same throughout Europe, however: To help our clients
accelerate their cash fl ows and thereby improve
long-term profi tability.
2005 by the numbers
• Revenues amounted to SEK 2,823.2 M (2,740.5).
• Operating earnings (EBIT) rose to SEK 503.6 M (430.6).
• Net earnings rose to SEK 333.6 M (323.4).
• Cash fl ow from operating activities amounted to SEK 527.0 M
(485.3).
• Earnings per share before dilution amounted to SEK 3.84 (3.68).
• The Board of Directors proposes a dividend of SEK 2.25 per
share (approximately SEK 6.95 per share was distributed for
2004 through a redemption program in 2005).
Another record result
As was the case the year before, 2005 was a year of record
earnings for Intrum Justitia. Operating earnings rose by 17 percent
to SEK 503.6 M, corresponding to an operating margin of
17.8 percent. Furthermore, the margin gradually improved over
the course of the year. Cash fl ow also continued to develop
strongly, amounting to SEK 527.0 M.
Among the countries that performed strongly during the
year were Finland, the Netherlands, Spain and Switzerland.
However, I believe that we have strengthened our position in
practically every country, with the exception of England, where
we are still reporting a loss despite lower costs. In 2006 additional
measures will therefore be taken to reduce costs and raise
effi ciency in the UK operations.
The Group’s earnings improved in 2005, with revenues
remaining largely unchanged compared with the previous year.
By no means are we satisfi ed with the latter fact, even though
we noted an upswing in the last quarter. One of the principal
challenges in 2006 will be to raise sales without compromising
our aims in terms of effi ciency and profi tability.
Improved operational effi ciency
Several reasons lay behind our positive earnings trend. In many
key countries we have benefi ted from a favorable market.
Greater activity in the Purchased Debt service line was also a
contributing factor, as was the fact that we terminated a number
of unprofi table contracts during the year.
Jan Roxendal, President and CEO
Our success lies also in the continuous efforts to develop and
refi ne our business processes. Among other things, we have
introduced our unique scoring methods in more countries and
expanded the use of Fair Pay Web, our Internet-based tool for
communication with clients and registering collection cases.
Other positive effects have been achieved by raising the
competence level of senior executives in a number of countries,
at the same time that several previous turn-around programs are
starting to produce results. In Germany and Italy in particular,
we are seeing clear indications that a previously weak earnings
trend has now been reversed.
For the vast majority of our clients, effective cash fl ow
management is critical in order to build on a fi nancially solid
foundation. One of the cornerstones of our strategy is therefore
to further develop and strengthen our core business,
Consumer and Commercial Collection. At the same time we
are striving in each local market to provide just the right offering
that clients demand. To succeed, we have to be attuned to
what our clients need help with, in the form of credit management
services, and fl exible enough to adapt and expand our
offering. For example, we have begun offering VAT refund and
factoring services in some countries.
Leadership development and knowledge transfers
Another priority in 2005 was to build a Group-wide structure for
leadership training. During the year around 25 top managers
at Group level and a further hundred managers and potential
leaders at the local level participated. These men and women
represent an asset that we shall even better motivate and rely on
in the future. Besides encouraging current leaders and identifying
those of the future, the leadership program is an excellent
way to transfer knowledge and share the best methods and
tools within the Group.
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