ANNUAL REPORT INTRUM JUSTITIA A N N U A L R EP O R T 2 0 ...

34 Board of Directors’ Report
Board of Directors’ Report
The Board of Directors and the President
& CEO of Intrum Justitia AB
(publ) hereby submit the annual
report and consolidated financial
statements for the 2010 fiscal year.
The company is registered in Stockholm and
its corporate identity number is 556607-7581.
THE INTRUM JUSTITIA GROUP
Intrum Justitia is Europe’s leading credit management
services (CMS) company offering
comprehensive services designed to improve
client cash flows and profitability. Founded in
1923, Intrum Justitia now has just over 90,000
clients and 3,100 employees in subsidiaries in
22 countries and an associated company in Iceland.
The share has been listed on NASDAQ
OMX Stockholm since 2002.
SIGNIfICANT EVENTS DURING THE YEAR
• In January Intrum Justitia, East Capital Explorer
and East Capital Financials Fund announced
that they intend to invest in a joint
venture that will purchase portfolios of unsecured
nonperforming consumer credit primarily
in the Russian market. The portfolios purchased
by the joint venture will be serviced by
selected local credit management companies.
• At the Annual General Meeting in March,
Matts Ekman, Helen Fasth-Gillstedt, Lars Förberg,
Charlotte Strömberg, Fredrik Trägårdh
and Lars Lundquist were re-elected as Board
members. Joakim Rubin was elected as a new
member of the Board. Lars Lundquist was reelected
as Chairman of the Board. Bo Ingemarson
declined re-election. The Annual General
Meeting also approved the Board’s proposal for
principles of remuneration and other terms of
employment for senior executives.
• During the year the company changed its organisational
structure so that the previous seven
geographic regions were replaced with three:
Northern Europe (Denmark, Estonia, Finland,
Latvia, Lithuania, Norway, Poland, Russia and
Sweden), Central Europe, (Switzerland, Slovakia,
Czech Republic, Germany, Hungary
and Austria) and Western Europe (Belgium,
France, Ireland, Italy, the Netherlands, Portugal,
Spain and the United Kingdom). The
purpose of the change is to enable new services
to be launched more quickly and achieve benefits
of scale within the Intrum Justitia Group.
• In November Intrum Justitia announced the
acquisition of Aktiv Kapital’s Nordic operation
which provides credit management services to
external clients. The acquisition was finalized
on 16 December. The acquired business has
around 150 employees in Norway, Sweden
and Finland and had sales of NOK 234.6 M
in 2010. The acquisition strengthens Intrum
Justitia’s market position, mainly in the Norwegian
market. In Finland and Sweden the
company’s leading position in the market is
further reinforced.
• In December Intrum Justitia announced the
acquisition of Nice Invest Nordic AB, a company
that invests in overdue receivables from
mail order and e-commerce clients and the
financial debt arising in connection with the
receivables. This acquisition, which was finalized
on 28 December, further strengthened Intrum
Justitia’s market position in Sweden. The
acquisition consists of an existing portfolio as
well as forward-flow contracts.
• In December a new joint venture was formed
between the European Bank for Reconstruction
and Development (EBRD) and the joint
venture company that is co-owned by East
Capital Explorer, East Capital Financials
Fund and Intrum Justitia. The purpose of this
company is to acquire written-off consumer
loans from Russian financial institutions. The
commitment of Intrum Justitia, East Capital
Explorer and East Capital Financials Fund remains
the same; the investment capacity may,
however, increase over the next three years.
REVENUES AND EARNINGS
The consolidated net revenues for the year
amounted to SEK 3,766.0 M (4,127.8). The
revenue change of –8.8 percent includes organic
growth of –0.8 percentage points, currency
effects of –7.1 percentage points, the effect of
revaluations of purchased receivables of 0.9
percentage points, acquisition effects of –0.2
percentage points and the effect of changes in
the financial statements in the Netherlands of
–1.6 percentage points. The operating earnings
amounted to SEK 730.6 M (668.2). Revenues
and operating earnings included net purchased
debt revaluations of SEK 3.2 M (–35.7).
The operating earnings for the year were
charged with integration and regional restructuring
costs of SEK –24.8 M (acquisition and
integration costs of SEK –15.3 M and restructuring
costs of SEK –9.4 M).
The operating earnings for the previous
year were charged with nonrecurring costs of
SEK –70.1 M (loss from the divestment of the
Scottish operations of SEK –16.0 M, nonrecurring
costs in connection with efficiency improvements
in England of SEK –43.8 M and
SEK M
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
SEK M
800
720
640
560
480
400
320
240
160
80
0
2,940
3,225
3,678
06 07 08 09 10
587
668
Revenues
758
provisions for anticipated losses related to lease
guarantees for the company’s former offices of
SEK –10.3 M).
The operating earnings excluding revaluations
were SEK 727.4 M (703.9), equivalent to an operating
margin of 19.3 percent (16.9). Earnings
before tax amounted to SEK 639.3 M (588.4) and
net earnings were SEK 452.0 M (440.6).
GEOGRAPHIC REGIONS
Northern Europe
The region consists of Denmark, Estonia, Finland,
Latvia, Lithuania, Norway, Poland, Russia
and Sweden.
4,128
668
3,766
731
06 07 08 09 10
Operating earnings
(excl. goodwill impairment)
Northern Europe 39%
Central Europe 24%
Western Europe 37%
GEOGRAPHICAL REGIONS
Share of consolidated revenues, %