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

6
Statement by the CEO
”By having fewer regions
we can make better use of
the economies of scale that
exist between our national
organizations and thereby
be more cost effective.”
Creating this kind of value for our clients
and their customers has made Intrum Justitia
the leading credit management company
in Europe. Our operating earnings in 2010
amounted to SEK 731 million. After adjustment
for the costs incurred in connection
with acquisitions and restructuring, as well
as currency effects, our operating earnings
increased by 7 percent in 2010. Cash flow
from operations reached SEK 1.6 billion.
The corresponding figure in 2009 was SEK
1.4 billion.
HOW DID OUR
BUSINESS DEVELOP IN 2010?
In 2009 we launched an extensive process of
organizational change. This was concluded
at the end of 2010 when we reduced the
number of regions from seven to three. This
change is an important parameter allowing
us to create the dynamic and client-oriented
organization we have been aiming for. By
having fewer regions we can make better use
of the economies of scale that exist between
our national organizations and thereby be
more cost effective. We will be able to launch
new services more quickly in an organization
with fewer but larger regions.
Credit management is a fragmented industry
which means there is good potential
for us to complement our organic growth
with acquisitions. In 2010, for example, we
made two acquisitions for a total consideration
of SEK 750 M.
In November we signed an agreement to
acquire part of Aktiv Kapital’s Nordic operation.
This transaction has significantly improved
our market position in the Nordic re-
gion, above all in Norway where we are now
one of the three biggest players in the market.
In December we acquired Nice Invest
Nordic, a company that invests in overdue
receivables from mail order and e-commerce
clients, as well as the associated accrued financial
receivables. The acquisition consists
of an existing portfolio and exclusive forward
flow contracts for the next five years.
fINANCIAL SERVICES – CONTINUED
STABILITY WITH A GOOD YIELD
There have been no major changes in our
investment activity involving the purchase
of overdue receivables. It has been another
stable year with a good yield and a low level
of risk. We raised our investment level to
SEK 1,050 M, an increase of 21 percent.
The return on our investments was 16.3
percent for the full year. Operating earnings
from this segment, adjusted for currency effects,
increased by 7 percent. We also had a
good spread of risk in our investment activities
in 2010, both geographically and across
different sectors.
Operating earnings within Purchased Debt increased
by 7 percent adjusted for currency effects.
Operating earnings within Credit Management
Services increased by 26 percent adjusted for
currency effects.
BETTER CREDIT MANAGEMENT
Our credit management business showed
substantial improvement in 2010. Major restructuring
in countries like Spain, the UK
and Hungary resulted in reduced sales but
increased operating earnings for the Group.
Our ongoing efficiency improvement efforts
and intensified sales initiatives are also producing
the desired results. The macroeconomic
situation is, however, still problematic
in large parts of Europe, which means that
the costs we incur in solving debtors’ problems
are higher. Our operating earnings in the
credit management segment increased by 26
percent after adjustment for currency effects,
and our margin was 14.4 (11.2) percent.
Intrum Justitia is well capitalized and had a
debt/equity ratio of 85.1 percent at the end of
the year. This means that financially we have
the capacity to continue to expand in both
credit management and financial services.
WHAT WILL HAPPEN IN 2011?
I am optimistic about the year that has just
started. There are many indications that we
will continue to see slow macroeconomic
recovery in the southern parts of Europe. As
unemployment goes down, payment capac-