Axactor ASA (ACR) Earnings Call Transcript & Summary

Hello, and welcome to the Axactor SE market update. [Operator Instructions] I'll now hand the floor to CEO, Johnny Tsolis. Please begin your meeting.

Good afternoon, and welcome to this global investor call. Thank you all for calling in. With me today, I have our CFO, Nina Mortensen; and Head of Investor Relations, Kyrre Svae. The purpose of this call is to give a bit more flavor to the 5 different topics that we raised in the market update earlier or yesterday, and to give all of you an opportunity to ask questions. Let me start with the most important item, the revaluation of book values. Axactor reported collection performance of 89% in Q3. As expected, the collection performance improved in Q4 and came in at 91% for the quarter and 97% in December. Although the development was positive, it is not sufficiently improved to support the book values of the portfolios as collection performance should fluctuate around 100% versus active forecast over time. Axactor will, therefore, book a negative revaluation of EUR 43 million in Q4 2021, whereof EUR 37 million related to NPL and EUR 6 million relates to our noncore REO segment. We have acquired NPL portfolios at a gross IRRs of 23% in 2021, 8 percentage points higher than the gross IRR of the total NPL portfolio at year-end 2020. As you also saw from the announcement, the majority of the revaluations relates to legacy portfolios acquired in 2017 and 2018. That also includes write-down on the REO segment, which primarily was acquired in the same period. Please note that the company complies with all covenants as of year-end 2021. As communicated to the market several times, Axactor have had a process with the Norwegian FSA and EUR 1.8 million of the revaluation relates to one specific NPL portfolio where the FSA has requested our renewed valuation. The second area I would like to highlight is the following. Axactor has been in a legal proceeding regarding termination of a forward flow agreement with a Swedish bank. The contract was terminated 1 year earlier than stipulated, as Axactor regarded the contract as violated. As part of the settlement, Axactor will pay EUR 2.2 million, and the cost will be booked in Q4 2021. The third subject is regarding preliminary figures for Q4. To avoid reading a lengthy list of numbers, I will only mention the highlights here. Please see the stock exchange notice for more details. Cash EBITDA came in at EUR 55 million, down from EUR 61 million in Q4 last year. Adjusted for settlement costs and lower revenues on the run-off segment REO, cash EBITDA development is flat, compared to same quarter last year. Net profit before tax came in at a negative EUR 42 million for the quarter, driven by the revaluations. Further, we are pleased to see that the 3PC segment accounts for 17% of gross revenues in Q4. The negative trend on 3PC revenues year-over-year has turned into growth and the contribution margin has improved from 47% for the quarter, up from -- sorry, up to 47% for the quarter, up from 44% last quarter -- the same quarter last year. Furthermore, the effect of the cost reduction program contributed to reduced OpEx of 5% year-over-year, excluding OpEx related to REO segment and the cost in the mentioned legal disputes. NPL portfolio investments are increasing steadily and came in at EUR 53 million for the quarter, up from EUR 22 million in Q4 2020, and up from EUR 32 million in the previous quarter. Subject #4 is regarding a change in how we will report on our noncore segment REO going forward. Axactor has sold off 90% of the REO portfolio that was primarily acquired in '17 and 2018. Gross revenue for the segment came in at EUR 40 million in 2021 and consolidated book values are down to only EUR 29 million at year-end. In 2022, the REO segment will be reported as discontinued operations in the financial statements. The fifth and last element is outlook. The revaluations in Q4 is expected to put Axactor back on collection performance, fluctuating around 100% going forward. Furthermore, the investment capacity for 2022 is at a satisfying level of approximately EUR 300 million, enabling growth. The company expects NPL investments of EUR 200 million to EUR 250 million in 2022, well above the estimated replacement CapEx of EUR 108 million. Hence, we are looking for a growth phase also for 2022. Axactor has already EUR 117 million committed in forward flow agreements, at a satisfying gross IRR level of 22%. I am fully convinced that Axactor is on the right path, we are acquiring portfolios at attractive rates, and we have an investment capacity of almost 3x replacement CapEx, buying the right quality portfolios at the right price, that is what this is all about. And in this respect, we are well positioned going forward. With that, I would like to round our introduction and move to the Q&A session. So please move to the next slide.

[Operator Instructions] And whilst we're waiting for phone questions to be registered, I'll hand back to our speakers for the questions online. Okay. We currently have one question on the phone line so far. That's from the line of Neil Simpson at ICG.

So just on the write-down, just if we could go into a bit more detail on that. First comment, it seems quite large relative to history. I mean this is bigger than the write-down that was taken in Q2 of 2020. And given that you're at 97% of collections in December and especially after the end of the last call, it sounded like things were improving. So just curious what trends you're seeing or if you could give us any more color on what you're seeing on those legacy portfolios that led to such a material write-down?

Yes. Sure. I can expand on that. So first of all, compared to write-downs we have done earlier, I agree this is sizable. But with that in mind, if you compare it to peers, we have not done large write-downs on the NPL book in the last couple of years. So we have had 2, 3 other players writing down substantially more. And then we have been more or less in line with the next 2, 3 players in -- at least that is operating in our markets. So in 2020, we took EUR 26 million on the NPL book, which was primarily linked to the lockdown as a consequence of COVID. So this write-down is a bit different because it's more linked to the quality of the book. What we did see in terms of performance, we saw that the performance was improving every quarter from 2020 and up until even Q2 2021, but then we saw an 89% performance. And we were hoping for a quicker catch-up. And yes, I agree, yes, December was good, but Axactor has always used kind of, say, a prudent approach to portfolio write-downs. And this is the level we need -- we believe to need to meet the curves, which should be plus/minus 100% of active forecast. And it's always, of course, uncertainty regarding this, but we have -- we believe that we have done the sufficient and correct write-down. And the trends, as you can see, if you take the EUR 43 million and divide it a little bit, which we have done in the press release or the notice, the market update as well, you see that EUR 6 million is related to REOs. And then another EUR 5.5 million is not written straight out, but it's secured NPLs in Spain. So 1/3 is related to Spain and old portfolios and then 55% in Sweden. And in Sweden, we have seen that the number of cases going to debt restructuring has increased. We have seen that we have had challenges with the Bailiff system, but also referring back to this settlement obviously, since we have chosen to cancel a contract. And we clearly state that we believe that the contract is violated, and due to quality on the claims. Also part of the write-down is related to that contract.

Okay. Got it. So my next question is sort of related to this. Obviously, we're hearing quite a bit about cost to living prices, rising inflation, rising energy prices. Have you seen any change in ability or willingness to pay on your back book? And does this relate to the write-down?

Yes,what we said after Q3 that we saw that -- what we referred to as a reopening effect, a full reopening effect was basically that the consumer chose to spend the disposable income in a different way. And what we also clearly saw that all markets -- all our 6 markets were below the collection curves in Q3. But if you look at Q4, definitely, it has recaptured in Italy, Spain and Germany. And we see [ that ] Nordic has been lagging a little bit, even though the total was 97%. So then you can imagine that we know that Sweden has been underperforming, but other market has been performing above 100%, but we are taking the write-downs basically, I should say, here in Sweden and some old legacy portfolios.

Okay. Okay. Got it. So it sounds like it's pretty geographically specific to the Nordics. So as it relates to the NPL portfolio, so it's about EUR 1.1 billion, how much can -- are you able to break that down into how much is sort of what you would classify as legacy, which are underperforming versus more recent vintage portfolios that are performing in line with plan?

I think that -- we don't -- I don't have the breakdown with me here, but I think you can easily read it out of the quarterly report and the annual report because there we give ERC distribution per country. But with this revaluation, we believe to have done the necessary adjustments to meet the curves going forward. So like I said, a very specific. I could go through the portfolio, but there are very specific explanation on this. And I think they have been through it before, but on the REOs, it was outlined strategy. We didn't have the experience. We didn't have the sector for it. I've admitted earlier that, that investment should not have been done or those investments on REOs and the first secure books in Spain. And then if you look at these other portfolios, like I said, is this dispute that accounts for some. And then we have a handful of portfolios with very clear explanation. We're not -- I'm not going to go into all of them, but it's quality issues on a certain amount of portfolios that is now gaining up. Most of our portfolio is performing exactly as it shall, but there are certain portfolios acquired in 2017 and '18 that has shown to be of lower quality than what we anticipated when we acquired them. And also, I think, to be fair, when you are a start-up company, you have to take a little bit more risk when you buy portfolios, because we didn't have sufficient data and actually our own data to base all the acquisitions on. So that has been, of course, improved substantially, and we have done a lot of actions to prevent this to reoccur.

Okay. Got it. And then my last question, and then I'll hand it back. So on the last call, you guided full year acquisitions of EUR 150 million, which implied about EUR 86 million for Q4, you did about EUR 53 million. So what explains that gap?

Price -- market prices. We were not willing to pay the prices. There were not lack of portfolios. We had 3, 4 other portfolios that we were in competition to buy. But at the end of the day, we were not willing to push those additional percentages. It would have been no problem filling the EUR 150 million or even EUR 200 million, but -- and it's one portfolio we like it. We have 3, 4 portfolios in the area of EUR 30 million to EUR 40 million, but we were not willing to push the last piece on it.

Just for context, what IRRs would you have to pay to compete?

If you talk net IRRs on these specific portfolios, I think you have to go below 10%. And the other portfolios, we're talking about in Germany and Spain primarily. It's on [indiscernible].

We currently have one further question coming through on the phones. That's from the line of Rickard Hellman at Nordea Credit Research.

My first question relates to the write-down, if you could share some distribution between what is delayed or expected delayed cash flow and what is actually lowered expectations?

This is -- with our approach, Rickard, this is -- we assume that this cash flow is gone. It's not a delay. It's a pure reduction. But with that said, we have not -- of course, we've not given up on trying to collect on the debt. So it could still be an upside. But at this point in time, we -- to be prudent, we take the write-down. So not pushing, I know there are different schools that -- how to do this and others have different views. I want to -- you could probably argue that you could delay part of it, but we are not on that. We haven't taken it.

No, I see. Great. Second question is related to the debt covenants. Can you share some info around what levels you're at? You only state that you do comply with all of your covenants.

Yes. I'm not going to give you the numbers, but we say that we have comfortable headroom on all covenants at year-end, except for the collection covenant, the performance covenant, which should be above 90% in the last 6 months. And obviously, that is exactly what this exercise is opposed to remedy, right? So when we do this, we will automatically come much closer to 100%, that's a given. And for the other covenants, we have substantial headroom, I would say.

Okay. Final question is regard -- I mean, looking at your gross IRRs, what you acquired in 2021 and also what you have all [ rev'd ] is secured to forward flow agreements. It's quite high and promising. And would you say that the net IRRs are the same in that sense, it's not an increase in collection costs for these portfolios?

No, this is -- we assume the same level of costs. And obviously, we are actually taking down the cost level, but to keep it at a kind of a more aggregate level. We said that the collection cost is the same. And of course, you're right because you could -- one thing is the cost, but it's also the blended type of portfolios, right? Because if you choose to buy a paying book, for example, the cost level will be much lower than on nonpaying book. And by that, you will take down -- you could buy a gross portfolio at a low gross IRR, but still have a high net IRR. So there are nuances to this. But I think that it's pretty comparable, vintage over vintage, at least it will be so for the next 2 to 3 years, I think, because we have already secured substantial amounts on forward flow contracts actually all the way into 2024.

[Operator Instructions] There seems to be no further questions coming from the phone lines at this time. So I'll hand back to our speakers for either any questions on the Internet or for closing comments.

Yes. I have received a few questions here online. So I could start by answering some of those. And then if anyone have any additional questions on the phone, I'm, of course, available. So first question is, why was not write-downs announced in connection with the presentation of the Q3 numbers? And I will take this one. Well, firstly, remember that we came from a very strong Q2, one of the best quarters we have had and the collection performance was above 100%, if I recall correctly, it was 102%. And we also saw that collections have been steadily increasing from Q2 2020 every quarter, up until -- and including Q2 2021. Normally, we do an impairment process based on either the second or the third month in a quarter. Since Q3 2021 was kind of, I would say, around a special quarter with -- first of all, it's a vacation quarter, for sure, but that's the same every year. But also we have the full reopening of the society after COVID. We felt that we need to have more data to make sure that when we set new curves that we're actually having enough data to set it at the right level. So that was the reason why we had to wait for a couple of more months. And then unfortunately, as you have seen, October and November came in also weak, and then December was strong, but we did -- but based on the total picture of 5 weak month and 1 strong, December is not enough to pull you through, you need to do adjustment of the [ kinds ]. Second question here, and I will read it up, and then I will leave it to Kyrre to answer. The question goes, how many years of the future ERC forecast have you written down in Sweden? The full curve for certain portfolios or just a few years? So Kyrre?

Thank you so much, Johnny. So how you should think about this is that we have taken down the ERC curve with an overweight during the first period of the portfolio. And with an underweight for the latest years. And the reason for this is that we see that the debtors are to a larger extent than we expected entering into long-term payment plans in opposite to do full settlement on the portfolio.

Thank you, Kyrre. And then next question here, have you discussed with the rating agencies regarding the write-down? And if yes, how do they look at today's news from a credit perspective? And we have not discussed this with any credit rating agency. And then we have next one, why the impact booked for Q4 have not been previously communicated? That we have already answered. And the next one, what would your collection performance be excluding the legacy portfolios in Q4 and Q3? Sorry, I don't have those numbers ahead of me, unfortunately. Jonas -- this is from Jonas, we will get back to you on that later on. Next one, can you offer more color on the portfolios you wrote down? What are the drivers behind the weaker collection than expected? Yes, I can elaborate a bit on that. So I think we've already been through some of it. So it is -- I've been through what happened in Spain, EUR 6 million on REOs and then EUR 5.5 million on secured portfolios all acquired in 2017 and '18. And here, the reason like I've also been through not good enough due diligence process, and it was not core. And for sure, this was something that we should not have done. But with this, the value left on the books from REOs and the first secured portfolios in Spain are more or less insignificant. And also, like I said, we will now start to report the last of piece of REO tale as discontinued business. And then we have the Swedish one. I think I've been through it already, but part of it relates to the contract that we signed. And part of it is basically goes to 2, 3 other portfolios as well, where we have had quality issues with the portfolio. And some of it has been also related to the fact that Swedish Bailiff have issues. And we see it delay, but we don't know if we are able to catch up the whole delay and hence, we are taking a write-down on it. And for the remaining part we have -- I also mentioned already EUR 1.8 million on the one portfolio that FSA asked us to revaluate. And then other than that, we have one portfolio in Norway, where a portfolio, forward flow portfolio that -- the clients have done some errors in the way the interest were booked, and we had to stop the collection of the portfolio for a while, actually a long time, 6 months almost, and that has given long-term effects on collection that we now see coming through. So we have also written down a small part, a couple of million, I think. So that is -- I think that answers this question. And then the next one, what's the sudden drop in collection performance on the legacy portfolio, something you have not seen indication of earlier and how much of the ERC related to these portfolios? So the ERC, I think, Kyrre have answered. And also, like I said, our collection increased quarter-by-quarter from Q2 2020, the next 4 quarters, including Q2 2022. If we have -- sorry, 2021. If we have seen it before, we would obviously have changed the curves before. So unfortunately, like I said, we saw it, of course, in Q3, but we needed more data in order to be able to set a solid curve going forward. And that's why it was not written down already in Q3 based on that limited data sample. Translating the gross IRRs into net IRRs, what would be a reasonable level? Okay, yes, we've also touched slightly into this. It varies from portfolio to portfolio, depending on kind of what kind of portfolio is it? So is it a portfolio with the paying book, there's a small difference between gross and net IRR because the cost level in between is limited. If it's a secured book, it's completely the opposite because there we have a lot of cost because you have to go legal with the claims and so on. So -- but on average, I think that the development in gross IRRs at least were factored in the next couple of years, it's a really good indicator of how we see also the net IRRs are moving. So net IRR is a bit challenging expression to use because the collection companies are calculating it in different ways because they have different cost structures. So if I should say the gross IRRs we are now currently buying up, which is [ 22, 23 ], our net IRR on that would be something in the area plus/minus 12%, [indiscernible]. But again, it varies from portfolio to portfolio. And then I said 12%, then I mean with full tax and full OpEx. We know that peers sometimes price marginally. And then you cannot compare IRRs across companies. Next question. There has been speculations about this write-down. It's from one of your first large Swedish portfolios. Could you confirm or deny? And I can deny. This is not relating to the first portfolios and probably here, it's linked to the Bank Norwegian portfolio that we acquired, and I confirm that this is not linked to Bank Norwegian. It's a small, small part of EUR 24 million, but it's just negligible compared to the full EUR 24 million in Sweden. It's other portfolios, primarily forward flow portfolios. The Bank of Norwegian portfolio is -- has been delivered well and it's a one-off portfolio. Let's see. Peers do not seem to have reporting on the same reopening effects. Why? So first of all, the reopening effect, it partly explains it. But as you can see here, it's also other explanation. So many of the peers has a much more mature book than we have. And we have had these quality issues. I'm not trying to deny it. That is basically what we're gearing up in now. This is -- this revaluation has very little actually to do with corona, I would say. The first realization we did in Q2 2020 was more or less 100% related to corona effect because legal systems were shutting down and so on. Of course, a part of this revaluation would have not been -- it maybe wouldn't have been EUR 43 million, if we haven't had corona, but this is -- these issues are related to quality. Of course, the corona situation might have increased it and pushed it forward and so on, but this is -- has more to do with the quality of the claims. So I'm not in a position to say exactly why all the peers have not reported the same effects. I know that some companies did large write-downs in 2019, which, of course, gives some help on the curve for 2020 and 2021. And if you have already taken down the curves, of course, it's more likely to reach the new levels. And as I said earlier, we have not been the one taking down the most. We have other peers taking substantially more than us. So I think it's hard here to just simply compare company to company. We are in different markets. We have a different aging of the book. If I have to point on one thing there, I would say that when you have a young book like ourselves, you will be hit by increased number of debtors going for debt restructuring like we have seen in Sweden. If you have an age book, that process has already been done. So you will not be hit as hard if the general number of debtors going to restructuring is increasing because that effect is already taken out. That is one thing if you want one specific example of why that could be different. So next question, why should we now think that there are no more write-downs ahead? And like I said earlier, we have done a lot of things to prevent reoccurrence. The most important are the already mentioned change in portfolio acquisition strategy. We are now focusing on well-known sellers and well-known debt. This really takes down the risk and probably the single most important change that we have done since 2020. Second, stick to strategy, and that is business to consumer unsecured debt as main, but also secure debt in selected markets where we have a competitive edge, like in Spain. We have gained a lot of more relevant data to be used in our innovation process compared to where we were in 2017 and 2018, both through our NPL portfolio acquisitions, but also by having a substantial 3PC business in several of our countries. So -- and operationally, we are in a completely different place than where we were compared to 2, 3 years ago. We have implemented machine learning, debtor portals, improved scorecards, fully implemented our new data warehouse being some of the ingredients. The onboarding process is also improved in all Axactor companies. And this is really important when it comes to, for example, be able to put back claims at the right time when the quality has not been the right for sale under forward flow agreement as an example. And regarding forward flow contracts, we have implemented substantial number of improvements in the contracts. All contracts now have volume caps. They have balanced down pricing, clear putback mechanisms and some have even a cancellation opportunity. So I hope that was okay on -- let's see here I just have to look at the list. Next question. Q4 is supposed to be the best quarter for debt collection and yet the company had its worst quarter ever. For the last many quarters, you have heard promises that things were getting better and that we are from -- yesterday announcement. What are your bottom line message to shareholders? Well, first of all, I think I agree Q4 is a disappointing quarter. No doubt about it. But I think as a shareholder, I think it's important to try to look and do the analysis and see what is -- what belongs to the past and what belongs to the future. So this revaluation is more or less 100% connected with decision taken in 2017 and 2018. The company has undergone a huge, huge change during the last 2 years. We have a new management team. We have a new strategy. We started off with a new strategy process in early 2020, and we launched it during summer 2020. And one of the most important changes was that instead of focus strongly on growth in the NPL book, we started to prioritize to acquire debt that we know well from before. Only because we have acquired it from the same seller previously or that we have had the claims or there is similar claims on 3PC. This strategy has significantly reduced the risk of doing portfolio errors. And in addition, we, as I said earlier, improved our valuation methodology, onboarding processes and so on. So as a consequence, the 2020 and 2021 vintages thus have a much lower risk of negative revaluations. Actually, year-to-date, we have a small positive revaluation on these 2 last vintages. And the price level in the market has been reduced compared to 2016 to 2018. That certainly also helps as it's easier to focus on the high-quality sellers when you're not pushing for growth all the time. So a lot of stakeholders that on a risk-weighted profile have done a great business on Axactor. Unfortunately, us, shareholders, has not been among them. I believe that the adjustment of book values in combination with our strong financial position and excellent market position, we are set to deliver shareholder values as well. We know that we are very cost competitive and not least as good as our peers to actually collect the money. And why do we know that? Well, we know that because we are still winning a substantial share of the benchmark competitions that we are participating, and we also have a successful 3PC business. That is not possible if you're not good at actually collecting the money from the debtors. So I'm still very positive. And I think this is a major step to kind of start the equity journey here as well. I hope that was okay. Let's see, for how long has collection on the affected portfolio's been lagging behind? Can you please confirm and reiterate from which vintage year most of the affected portfolio -- I think maybe this has been more or less already answered. So '21 and '22 vintages are -- have actually a positive development. And if you look at 2019, we have also negative, I would say, a part of it, maybe 25%, and that -- but most of it is related to this settlement -- transaction on the forward flow that we were reaching. And then the rest of it is on 2017 and 2018. 2018 be definitely the biggest one of the two, probably accounting for more than 2/3 of the combined from 2017 and 2018 and then just a small number from 2016. That was the first 2 portfolios that we acquired -- were acquiring in Spain, but we have done small adjustment on. So let me just go back to the questions here. Can you please comment on the other portfolio valuation remarks the Norwegian FSA had? It's fully implemented. Would that, in your view, after all your ability to develop accurately? Or could it eventually affect your ability to stay competitive when it comes to bidding processes if your valuation deviates from your competitors? So First of all, what we -- what the FSA said for those that have not kind of fully informed about it, that they wanted us to include more macro factors into the model when we do portfolio valuations. And in our world, we have been using the market standard for how to do portfolio acquisitions. And we are -- we have said that there are other elements that explains the portfolio performance over a 15-year term other than macro factors. With that said, of course, we are doing as requested, and we are trying now to improve our valuation models with more macroeconomic data. And also our peers will have the same request. I'm fully convinced other listed companies will have the same request from FSA. I don't think that this will be something that gives us a negative position when it comes to competition for the portfolios. As you have seen today, this is a perfect example of what is really hitting you as a collection company buying NPL. It's not the macro, certainly not. It's when you do an error in either the due diligence or the quality that you buy over a forward flow is suddenly changed or you do other errors. That is what's really hurting you. If you buy a portfolio and you believe that it will give you a 13% net IRR and it gives you 12% or it gives you 14%, it really, really does matter. It's -- when you try and think you buy something at 13% and it's minus 10%. That is what really, really hurts you. And no macroeconomic model in the world would capture it. But with that said, we will, of course, always try to improve our models, and we will do so here as well. But I don't see how this will put us in a different position when it comes to bidding on portfolios. If any, if it improves our models, which we, of course hope, then I don't want to buy a portfolio if I do it on the wrong valuation model just because I have a high number out of the valuation model. If it's a higher quality model with more macroeconomic data, and it turns out that, that it gives us a lower price than -- and I cannot win at that price, well, then I don't want the portfolio. So all quality improvements are good.

Johnny, if I also may just add to that, the FSA has not commented specifically on the valuation of the portfolios when you buy them, it's more the evaluation process afterwards. Just to be clear on that. The FSA has not said anything about when you are buying the portfolio.

That is correct. Thank you, Nina. And then we have another question here. And given the discount at which your share price trades to book value, are you considering allocating capital to buy back shares? Well, The short answer to that is currently, no. Because we still believe that there are so many good opportunities in the market currently that we -- for now, it makes more sense for Axactor at least, to buy high-quality, low-risk portfolios at gross IRRs in -- at 22% compared to buying back shares. So short term, I would say, no, we would like to build scale in our 6 markets. It's much better. I mean we still are subscale in some of our markets. And that is something that we will continue to work on to gain more scale effects. We will -- as long as we can buy low-risk portfolios at the current market prices and we are able to buy for, say, between EUR 200 million and EUR 250 million, maybe up to EUR 300 million, we would prefer to do that at least in, I would say, for 2022. But it's a good question, and it's always -- it's a difficult -- yes, it's difficult to be one of the [ so ] sure on this because, of course, we, as a management team, think it's also a good -- it's a good business case to buyback when you are trading at maybe [ 0.5 ] or whatever it is now of book values. But right now, we are not considering to do any buybacks. And we also don't have the approval from the general assembly to do it. Yes. That was the last question that I have here. I don't know if there are any more questions on the phone.

We've had one further come through. It's a follow-up from Rickard Hellman at Nordea Credit Research.

Just one question regarding, you mentioned that you have growth in the 3PC and also improved margins. Could you say something about that in which market do you see it is? And also if you have any good explanations for why it has turned?

Yes. So I would say it's 2 markets now that are really developing well on 3PC and that is Spain and in Italy. And a clear explanation about the moratoriums has now started to expire or has actually been stopped. So we see that the volumes are coming back. So that explains partly the top line. We also have one large 3PC client in Sweden, which is of a certain size. So he'd be already -- we see that the 3PC volume from Sweden is also increasing. The reason why the margin is going up. It's a combination of those exact things that so the volume is flowing back, but also -- as you remember, we have a cost reduction program running throughout last year. We have every quarter last year, we were booking -- restructuring costs in connection with that program. And now that restructuring costs have been taken and now we will start to see the full year or the full effect of those cost reductions also in 3PC.

[Operator Instructions] Okay. There seems to be no further questions from the phones at this time.

Okay. Well, then I thank everyone for dialing in and also for asking a lot of good questions. Thank you so much, and have a nice afternoon.

This now concludes the conference. Thank you all very much for attending. You may now disconnect.