Axactor ASA (ACR) Earnings Call Transcript & Summary

Hello, and welcome to the Axactor SE Presentation of Q1 2021 Results. [Operator Instructions] Today, I'm pleased to present Johnny Tsolis. Please go ahead with your meeting.

Good morning, and welcome to Axactor's first quarter presentation for 2021. We will divide this presentation into 5 parts. I would like to start by giving a short recap of who is Axactor. It will only take a few minutes, and I hope that everyone can find such a recap valuable, both the ones that know us well from before, investors that has recently entered our share and potential new investors. After the recap, I will go through first quarter main events, followed by the financial highlights. We will round off the presentation with an updated outlook and a Q&A session. As always, you may ask questions live, ask from them presenting or through the available chat function. Now let us move to Slide 3 for a short company introduction. Axactor was established in December 2015 with headquarter in Oslo. Our main focus is on collection and acquisition of nonperforming loans from financial institutions. Meaning, we are both buying nonperforming loans and do collection on behalf of banks and other financial customers. Axactor operates in 6 European countries: Spain, Germany, Italy, Norway, Sweden and Finland. And currently, we are just below 1,100 FTEs. We have been one of the largest purchasers of NPL unsecured debt in Europe over the last few years. And we have done portfolio acquisitions north of EUR 600 million for 2019 and 2020 combined. The company is listed at Oslo Stock Exchange, and our main shareholder, Geveran, owns approximately 40% of the company. Please go to the next slide for more details on Axactor's strategic positioning. When Axactor was established, we had a clear idea regarding our strategic positioning. In brief, it was the following: cost leadership was a clear strategic target. We carefully selected 6 markets where we believe to have the best risk reward. And the main focus were on fresh business-to-consumer unsecured debt within the bank and finance segment. The startup approach was also simple, acquisition of a relatively small platform company as bridge into a new market. We immediately recreate main systems and process to the unified OneAxactor platform. And we used our strong balance sheet to scale the business organically in both NPL and to equity. As we can see, the result when it comes to the cost position has been satisfying. Here, it is important to focus on the trend as we obviously have higher cost-to-collect versus income the first year of operations due to scale disadvantages. We expect the ratio to continue to go down over time, as we gain more [ CL effect ] and we consider our cost position to be one of our key competitive advantages also in the future. Let's move to Slide 5, where I'll present the more key contributors that will improve our return on equity over time. The first 4 to 5 years of operation are capital focused on aggressive growth, market entries and to establish an efficient IT and operations platform. We are now into a new and second phase, where the focus has shifted towards profitability, operational excellence and control growth. We're also aiming to pay dividends as return on equity improves. Axactor has at least 5 areas where we continue to improve in order to increase return on equity. The first one is cost-to-collect. Even though, we have one of the lowest cost-to-collect ratios in the NPL industry, we still need to keep high attention on continuous cost improvement. Several of our competitors have reduced cost reduction programs in the last year, and they are also trying to get closer to our OneAxactor way of thinking with streamlining operations and to implement cloud-based IT systems. Our cost-to-collect will continue to increase as we are growing the top line more than the costs, basically taking out scale ahead. But as you will learn more about later in this presentation, we have introduced, and to a large part already implemented, a new cost reduction program to further trim our cost base. More details will be given under the part main event in Q1. Axactor aims to fill volumes into the collection platform, not only through acquisitions of NPLs, but also by growing our 3PC business. 3PC is capitalized, recurrent business, which will contribute to increased return on equity as it reaches a certain scale in each respective country. 3PC is also an important source to gain high-quality data on fresh claims, which can be used in valuations of portfolio to reduce risk and acquisition. Currently, Spain is the only Axactor country where we have significant scale in our 3PC business, but we see positive development in several other countries. During the last 12 months, we have changed our sales strategy and focusing primarily on bank and finance lines. An important part in being a successful 3PC company is to create a collection platform that can deliver satisfying collection performance, high level of compliance and comply with a significant reporting requirement that is expected by financial institution. We are, therefore, pleased to see that Axactor is doing well in so-called benchmarks with our collection companies. But we still have a significant improvement potential in this area. The third area I would like to highlight is the improved IRR on portfolios acquired by Axactor. The IRR uplift comes mainly through 2 different sources. Firstly, the majority of all new portfolios acquired over the last 2 years has a higher IRR than the average IRR on our back book. This means that everything else equal, the price reduction we have seen and are seeing in the market will improve Axactor's return on equity. But it is important to remember that the new prices are blended in over time and the positive effect will become visible in our financials gradually. Secondly, Axactor is prioritizing portfolios where we have in-depth knowledge about the claims, either from previous acquisitions from a seller or through handling of the portfolio or there is a new portfolio on 3PC contracts. Over time, this will reduce the risk of doing errors in portfolio acquisition, which is obviously very important for the realized IRR level for our NPL business. In addition to operational contributors, Axactor has improved potential on funding costs and what we call other maturity effect. If I start with the first one, funding cost. Given the fact that Axactor is still a young company, we have had significant start-up costs on the funding side, both when borrowing from banks and when addressing the Nordic bond market. We still have a disadvantage compared to several of our competitors when it comes to funding, but we are working hard to reduce the gap. We did manage to reduce the average funding costs through the restructuring exercise we finalized in Q1, but we still should be able to reduce this further over time. Currently, we are working on establishing a credit rating that we expect to be finalized in the second half of 2021. With rating, Axactor will have flexibility to reach a wider investor base for our bond, both in the Nordics and potentially the European bond market. After the restructuring, we have more flexibility to refinance parts of our balance sheet if the bond market reveals attractive opportunities. And hopefully, the next time we address the market, we will not be in a pandemic situation. Older maturity effect consists of at least 3 different elements. The effective tax rate is still too high. But as we are gradually getting a positive earnings position in most of our legal entities, the effective tax rate will be reduced. Simplification of our legal structure will contribute to both lower cost on administration, but also to improve our tax position. The last item I would like to address is that we are phasing out the nonprofitable REO segment, and this will have a positive effect on return on equity as well. To summarize, Axactor has several contributors to improve return on equity going forward, and we are working very hard every day with both small and large improvements to realize this potential. This was just a short recap of Axactor, and I will now move to Slide 7 to present the main events in Q1. Axactor was still affected by the pandemic during first quarter, and Q1 was another step in the right direction towards normality on underlying operational performance. Last year, the negative effects from the pandemic started in March. But this year, we have had COVID affecting us the entire quarter in all of our countries. However, actually, so much lesser extent than what we experienced with the lockdowns last year. Year-over-year, we saw improvements on gross collection, which was up 7%. The total income was up 10%. And EBITDA up a healthy 26% compared to last year. Cash EBITDA came in at EUR 52 million, which was also 8% higher than Q1 last year. As in previous quarters, the financials were affected by one-off effects, obviously, of a different nature than in 2020. I will come back with more details about restructuring costs related to our cost reduction program, was one of them. Furthermore, unrealized FX loss had a negative impact on profit before tax and then the return on equity for the quarter. Let us move to Slide 8 for a final reminder of the balance sheet restructuring that was concluded in the first quarter. I guess some of you know this by heart now. But since this was one of the most important events we had in the quarter, I will quickly summarize the transaction and its main effect. Axactor raised EUR 50 million in new equity. It was a combination of EUR 30 million in a private placement and EUR 20 million in a repair issue. We acquired Geveran’s 60% stake in our daughter company, Axactor Invest I and we refinanced all major credit facilities. The main motivation for the transaction was to reduce complexity and simplify the structure, extend maturities on both the bank facilities and on our unsecured bonds, reduce funding costs and to increase investment capacity. Our equity ratio is also strengthened as a result of the transaction. On Page 9, I will give more details about the new cost reduction program we introduced in December. The program is targeting an annual saving of approximately EUR 5 million, and most of the cost-saving initiatives will be implemented during first half. We expect full saving impact from Q4 this year. As part of the cost reduction program, we are doing a site consolidation in Spain, resulting in shutting down 3 of our offices, Sevilla, Bilbao and Zaragoza. In addition, a large number of other initiatives will be implemented such that optimizing the organization in terms of equities, evaluating and renegotiating vendor contracts and outsourcing of noncore account. Such initiatives usually comes at the cost, and these ones are no exception. We expect that the total restructuring cost will amount to EUR 4.2 million, whereof EUR 3.2 million has been booked in Q1 and the estimated remaining EUR 1 million will be booked in Q2. I will now move to the next slide to give a short status on the 3PC market. Even though the development in the 3PC market is maybe not the main event, we find it important to update the investors on the situation. First, I would like to say that Axactor has not lost any significant 3PC customers during the last 12 months. However, it is true that the volumes we have received from our customers has been lower than expected, but we believe that the volumes will increase as the societies reopen. The lower volumes has also been a result of authorities giving a payment holiday to debtors. For example, the moratorium situation in Italy has been extended several times. The latest extension will last until the end of June. On the positive note, Axactor is building a strong 3PC pipeline across all markets. And we are in advanced stage for several significant 3PC deals. We have also signed a couple of new deals where we combined 3PC services with NPL acquisitions of the claims at a likely stage. Hence, further volume improvements are expected in the second half of 2021. The last item I will present on the main events is the significant improvement that Axactor received on ESG rating. Please turn to Page 11 for more detail. Axactor has had a strong focus on ESG-related topics from the inception of the company. And from 2019, we have received external ESG ratings, first from VE in 2019 and then later from Sustainalytics in 2020. In order to fully understand these ratings, it is important to know that they are primarily relying on information announced by the company in annual reports and on company website. In addition to actual improvement, Axactor has over the last couple of years, strengthened the reporting and increased the level of disclosure. And this has given us a significant improvement in ESG rating. Please note that the 2021 scores does not fully reflect 2020 annual report improvements due to announcement dates underwriting, which was before we announced the 2020 annual report. Hence, we expect further improvements to be visible when the rating agencies update their rating scores. Axactor is determined to continue to drive ESG improvements and contribute to raise the bar for the industry. ESG was the last item we had under main events. So please move to Slide 13 for our first quarter financial highlights. Those of you that followed the debt collection industry closely has probably noticed that the first quarter of the year normally is the weakest, maybe together with the vacation period in Q3. This year is no exception. If we look closer at the 3 segments, starting with NPL, we did achieve a gross revenue of EUR 63 million, up from EUR 54 million same quarter last year, corresponding to 17% growth. We had a slow start in January, but saw strong improvements in February and March. The growth is a result of Axactor being able to invest north of EUR 200 million in new portfolios last year, but we also see positive effect of normalization towards pre-pandemic level. For third-party collection, the gross revenue came in at EUR 12 million, down 14% compared to same quarter last year. As discussed under main events, we are not back at pre-pandemic levels yet. We have been experiencing that closing of new 3PC contracts has taken longer time than what we consider normal as some customers are postponing the decision regarding new collection partners. Other customers have been holding back on volumes and to collection, and moratoriums has been extended. We do expect that volumes will pick up moving further in 2021. For our run-off segment, REOs, with sales came in at EUR 10 million, which we consider an acceptable level and in line with our budget. However, REOs is only accounting for a small part of our balance sheet, some 2.3% of total book value exposure on portfolios, excluding minority. Please move to next slide where we can see that Axactor continues to focus on cost discipline. As I mentioned in the introduction, to be industry-leading on cost-to-collect is a key element in our strategy. Our cost position continued to improve and was down 5% in Q1 compared to same quarter last year, adjusted for restructuring costs. Let me underline that these figures are excluding REOs. At the same time, our gross revenue increased 11% year-over-year. The cost reduction program is expected to drive further improvement throughout 2021. Let's now look a bit more into details on each of the business segments, starting with NPL on the next slide. In Q1, the NPL collections continued to normalize and we delivered a 17% growth year-over-year. The contribution margin is still at a satisfying level of 77% and actually 8 percentage points higher than the same quarter last year. No revaluations has been required. And as previously communicated, we expect to have done the necessary changes in active forecast for 2021 and the second half of 2022, primarily linked to the pandemic. On the next page, we will give more details on which assumptions we are taking regarding the collection curves going forward and also show the performance in Q1 versus our active quarter. Axactor delivered 98% collection performance on unsecured NPL collections in Q1. The reason why we did not hit 100% was primarily due to slow January in Norway. The performance did gradually pick up in February, and March came in strong across all Axactor markets. We likely communicated during our Q4 presentation, there are different ways of implementing curve adjustments. Axactor takes a prudent approach. And accounting-wise, we assume historical underperformance as lost. This is a more conservative approach than the one assuming that all or part of the underperformance can be recaptured in the future. However, it is worth mentioning that this does not necessarily mean that the collections are actually lost, as there are not made any adjustments to the claims against debtors and the debt can be partly or fully repaid. Now please turn to next slide for further comments on the 3PC development. As already mentioned, the 3PC revenue reached EUR 12 million for the quarter. We have already been through 3PC market conditions on Page 10, so I will not repeat it. However, please note that the 6% contribution margin is burdened with EUR 2.8 million of restructuring costs in connection with the earlier mentioned cost reduction program. Adjusted for this, the contribution margin will be 30%, which is down from Q4 last year, mainly due to seasonality, but also some overcapacity in operations as volumes came in lower than expected. Please move to the next slide for more details on our run-off segment, REOs. As you know, we are not doing any new investment in REOs, and this is a pure run-off segment. We are satisfied with the revenue level of EUR 10 million in Q1, but the prices was a bit disappointing, taking the contribution margin down to minus 21%. We sold just north of 300 assets in the quarter, and the inventory is down 36% since Q1 last year. The fully consolidated book value at the end of the quarter was EUR 68 million, and Axactor's exposure is 39% of this amount due to minority interest in the structure. Let's move on to the next slide, where we will present more details on the reported financials. Total income came in at EUR 61 million for the quarter, up from EUR 56 million same quarter last year and also up EUR 6 million from the previous quarter. The reported EBITDA came in at EUR 80 million, corresponding to a margin of 29%. Please note that the EBITDA was burdened with EUR 3.2 million restructuring costs. Cash EBITDA came in at EUR 52 million for the quarter, up from EUR 48 million same quarter last year, but down EUR 8 million from previous quarter, primarily due to gross revenue reduction from Q4 and restructuring cost. More details on items affecting the financials will be given in the next couple of slides. Let me start with net profit after tax on Page 20. As we saw previously, Axactor reported an EBITDA of EUR 17.7 million. Depreciation and amortization were at an expected level of 2.6%. However, the net financial items are extraordinarily high with EUR 16.8 million booked. The reason is that the net financial items includes a net unrealized FX loss of EUR 3.2 million. Just for comparison, same quarter last year had unrealized FX gain of close to EUR 10 million. The tax expense came in at minus EUR 1.7 million despite negative profit before tax. The main reason for this is that the unrealized FX loss is not tax deductible. Hence, the net profit after tax came in at minus EUR 1.4 million, with a corresponding minus 1.6% annualized return on equity, excluding noncontrolling interest. On the next slide, we have summarized the 2 most significant items affecting the quarter. Firstly, restructuring costs of EUR 3.2 million is booked as operating expense, reducing the EBITDA from EUR 20.9 million, down to the reported EUR 17.7 million. Secondly, the net FX impact hitting our net financial items by EUR 3.2 million, bringing the net financial items from EUR 13.6 million, up the reported level of EUR 16.8 million. In total, these items will bring the profit before tax up to EUR 4.7 million compared to the minus EUR 1.7 million reported results. On the next page, Slide 22, we will look closer at the development of return on equity. I will start by repeating what I said during the fourth quarter presentation in February. One, there is no big secret that the profitability on REOs has been disappointing since the acquisitions back in 2018; and two, the return on equity during the pandemic has been weak, both for Axactor and the industry as such. But we also show that the difference between reported consolidated return on equity and return on equity, excluding REOs, was 4 percentage points in Q4 2019. In the following quarters, heavily impacted by the pandemic, the return on equity dropped significantly, both on consolidated levels and excluding REOs. Although still impacted by COVID-19, Q1 looks to be the quarter where we, again, start to see a gap between the 2 curves, although not huge. We expect this trend to continue over the coming quarters. With that said, let us move on to Slide 24 for an updated outlook. Since we are still in the third COVID-19 wave, the outlook is, of course, burdened with a certain level of uncertainty or maybe, I should say, an even higher level of uncertainty than what we normally would face. We believe that the COVID-19 impact on business has stabilized, and we do not anticipate sudden movement in either direction. 3PC volumes are expected to return to pre-pandemic levels as societies reopen. Our cost reduction program is targeting a EUR 4.8 million annualized saving effect by year-end, and we see an increasing market activity for both 3PC and NPL for the coming quarters. We expect an overhang on portfolios released to the market in the second half of 2021. Axactor will continue to strictly prioritize best NPL deal and we stick to the guiding that NPL investments will exceed EUR 200 million for the year. This concludes the presentation, and we will now open up for questions. Please remember that you can find more information in the supporting information and appendix attached to this presentation.

[Operator Instructions] Our first question comes from the line of Ulrik Zürcher from Nordea Markets.

I have a bit of maybe a boring question, but it's regarding the rebound in 3PC volumes. And I was wondering what are the banks telling you there. And like how certain can we be that it will rebound already maybe in the third quarter given that societies are opening up? And the reason I'm asking is that will the banks be willing to maybe stress their clients like 1 quarter after lockdowns? Or like what is the reason they haven't been sending new volumes here? So a bit on the timing and the certainty of the 3PC rebound.

Yes. I could elaborate a bit on that. So thank you for the question. First of all, I think it's several reasons why the banks are not sending all the volumes currently. So for some countries, like Spain and Italy, you have the moratorium effect, where basically the debtors has been given a holiday on payments. So we have signed 3PC clients in both of those markets where the contract is signed, but they are not in a position to send up the claims. And we have no indications that as soon as the moratorium is finished that they will not send claims. So we expect claims to be send to us from Q3. And then you have the situation maybe more characteristic for the Nordics, where we, as you know, have a lot of consumer banks on our 3PC client list. And I think that there is just a question that they have less lending volumes and less default range. So I think there, the volume will increase when society reopens and people starts to, again, use their credit cards. So I think -- we are pretty confident that in second half, and it's hard to say exactly when, but in the second half, the volumes will start to increase again on 3PC.

Is there a risk that maybe when these known moratoriums or -- in Spain and Italy, when they run out that the economies or the households are so stressed that it actually will be very difficult to collect on the 3PC? Or do you have any comments on that?

Well, we -- it's hard to say exactly how this will play out because it's linked to what kind of supporting packages and so on the government will provide for each and every market. I think, again, you have to look at this country by country. Again, the Nordics, we don't expect a huge drop in collections. What we have seen is actually quite the opposite that people are prioritizing to repay their debt. We believe that to continue, but I cannot rule out that certain debtors will have payment issues. But this is -- I don't have a good estimate for the risk on this, unfortunately.

But if they have payment issue, then maybe it's reasonable to assume you will get even more volumes or...

Yes. They have the volumes. And this is the thing, right? So it's -- when there are macroeconomic, call it, challenges, then default rate usually goes up. And then the volumes usually, over time, will go down because the credit will be a bit tightened. And then -- but yes, we believe that what we see here now in the Nordics, the volumes is down mainly because the debtors or the bank's customers are not using their credit cards. And that is the big source of volumes for us, right? When credit cards and personal loans are going into default, that is when we come into the picture and that volume is down.

And the next question comes from the line of Joakim Svingen from Arctic Securities.

I was just wondering if you could elaborate a bit on the savings program. And perhaps indicate how much will be taken under direct operating expenses? And how much will be SG&A?

Thank you so much for the question. We -- could you please repeat the last part of your question?

Yes. Because you're stating that some will be efficiency measures on closing of offices in Spain and some is renegotiating contracts and efficiencies made centrally. So I'm just wondering how much will be taken in Spain and how much will be taken under SG&A and general expenses.

Yes. I think how you should look upon this is more than 80% will be part of direct OpEx and roughly 20% will be on SG&A.

Okay. And then I was just wondering if perhaps this is something I'm missing here, but the cost of secured assets sold were higher than the income in the quarter. What's the reason for this? And also, perhaps you could comment on the low amortization rate in Q1?

Yes. I can do so. If you look at the REOs for the secured assets, we are more or less having the same purchase price as the asset is valued on our balance sheet. And then we get a negative margin for the segment due to operational expenses for selling it.

Okay because -- I think that's trended around 85% historically. But do you expect that to continue then? Will that be at the same level or...

Yes, that's our expectations going forward.

Okay. And then I just had one follow-up on 3PC, yes, I'll recast as well. With the growth you plan within 3PC, is that purely organic? Or are you also considering M&A in certain markets?

I would say that this is mainly organic growth, but we are looking into small M&A transaction in certain markets, but I would say the vast majority would be organic 3PC. And we're also looking at a couple of minor, what you call, carve-out deals. That's basically that you'd buy volumes, say, for example, a 5-year period with an upfront payment and then you collect with a certain volume guarantee for either 3 or 5 years, for example. So we are looking into that as well, but mainly organic 3PC growth.

Yes. Sorry, just one final thing then. Is there anything -- if you look at the run rate collections in NPLs, REOs and 3PC, you said that 3PC you expect it will pick up in the second half. But adjusted for seasonalities, do you expect the same level approximately for the areas in Q2?

Yes, I would say that's for REOs because it started up, but I think will be more or less the same level. Potentially a bit from May. There may be a bit higher, but not so much risk on the downside, I think, based on what we see of -- in the pipeline now. 3PC will be adjusted for seasonality, and hopefully, a small pickup. But the issue here is that the moratoriums are extended until, for example, like in Italy it's end of June. So I don't expect a quick pickup in 3PC volumes. And for NPL, I think we have a seasonality effect as well, but also knowing that we had a pretty weak January, I think that it will be maybe a small uptick as well above the adjustment for seasonality.

[Operator Instructions] We have another question from the line of Håkon Astrup from DNB Markets.

Some questions from me as well. The first one on the cost and the new program. So just to make sure I understand this correctly. So in Q1, you already have an annual positive impact from the cost program of EUR 2.3 million. So the net incremental improvement from the Q1 level, that should be then EUR 2.5 million. Is that understanding is correct one?

Thank you so much, Håkon. That is correct.

Perfect. Very clear. And then also a follow-up on the 3PC. So you mentioned that there will be some -- say, the start of this year will be a bit challenging. I don't understand you correctly that we should not expect to see, say, revenues on the 3PC side at the same level or see that lower in 2021 than we saw in 2019?

No. I think I remember that question from the last time, Håkon, and I will stick to what I've said the last time. We still have reasons to believe that we will reach the 2019 level on 3PC for 2021.

Perfect. And then also my question on Q2, and how do you see investment trajectory into Q2? Should we expect similar as in Q1 and then an uptick in the second quarter? Or are you seeing some improvement in terms of Q2 versus Q1?

Yes. We expect the investments to be above Q1 levels for Q2. But then, of course, this is very dependent on if we close one-off deals or not. Because if you look at the pure for the flow commitment, there's just a small uptick. But there are definitely coming opportunities to the market, and we are in a few processes right now. And normally, we would be able to close some of these one-off deals. And hence, Q2 investments would probably be higher. But again, I would just like to underline, if we don't see the necessary IRRs, we will not do investments in Q2 on the one-offs. We will -- then we will continue to work hard on getting the right prices like we do on the forward flow agreements and then wait for the higher volumes to come in, in second half of the year.

And there are no further questions from the phones.

Okay. Then we have a few questions that have come in through the chat function. And the first one being from [ Yu Mott ]. He asked if, could you give an indication to what the tax rate would have been in the quarter, excluding the FX effect? And I'll now have our CFO, Kyrre Svae, to answer it.

Thank you so much for the question, [ Yu Mott ]. So to put this very simple, we have reported profit before tax of negative EUR 1.7 million. And then we have unrealized FX losses, which is nontax deductible of EUR 4 million. So that would fit us into a profit before tax adjusted of EUR 2.3 million. And then the tax would roughly be unchanged of the EUR 1.7 million, giving us some tax rate of 75% roughly. But here, I think it's important to note that when the figures are so close to 0, looking at the tax rate doesn't make that much sense. Over time, we expect to get to the normalized level of 25% tax rate.

Good. And then we have second question from Johan Ström in Carnegie. The question goes like this. Do you consider a deconsolidation or spin-off of REOs? And to that, we could say, yes, we are considering the consolidation. It's not decided, but we will look into it. So that is definitely on the table. When it comes to spin-off of REOs, this is something that we continuously are looking at. But like I think I commented on this last time, what was it the quarter before, the challenge is that we believe that we have the correct asset prices now in our balance sheet. So for a new player to buy it, they would need to buy it at a discount to get their necessary IRR. So we have sub-costs already taken. So we believe that the most value-creating thing that we could do is to actually sell off these assets ourselves. So I think that's the most realistic view on it currently at least. Then we have the question of the second part. And that was, what was the underlying CM1 margin in 3PC adjusted for restructuring costs? That was also commented during -- on Page 17, it's 30%. Then we have another question here from [ Ola Stolberg ]. I think we have answered at least part of this. But first part was, can you elaborate on the restructuring cost? And I think we have done it already. When was 3PC volumes improved? I think we have answered that already. A large competitor reported yesterday seemed to indicate 3PC was improving during the first quarter. That might be correct. To be honest, I don't know which competitor, and I don't know which market they operate and so on. So it's a bit hard to comment what they are seeing. So I think we will stick to the comments we have given that is kind of covering the Axactor country. Then we have another question from [ Magnus Rosenson ] in [ Sberbank ]. And he's asking from which rating agencies are you seeking an official credit rating? And that would be Moody's and S&P. Should the euro EUR 5 million of savings all come within 3PC? And that I will -- if not all, but I think, Kyrre, you have a better split of it.

I don't have the exact split. But I think roughly, I would estimate that we have 70% of the effect within the 3PC segment and the rest split on NPL and SG&A.

Then we have the last question from Ian Christopherson. And he asked, do you have any comments to the private investors sold off their shares at a price lower than stock market value in the voluntary offer? And the answer to that is no. So we don't have any other questions on our side. So unless there are more questions on the phone.

There are no further questions on the phone.

Okay. Then I think I would just say, again, thank you to all of you for attending this first quarter presentation. And we wish all of you a very nice day. Bye-bye.