Intrum AB (publ) (INTRUM) Earnings Call Transcript & Summary

Welcome to Intrum [ Agricoles ] Telephone Conference 2022. [Operator Instructions] Today, I'm pleased to present Magnus Lindquist, Chairman of the Board. Please begin your meeting.

Thank you, Andreas, and thank you, everyone, for joining this video and phone conference regarding the recent CEO change in Intrum. Just to present myself, my name is Magnus Lindquist [indiscernible]. I'm the Chairman of Intrum since April this year. And just coming directly to the point then. As we all know, Intrum is a European leader in credit management with fantastic opportunities in many markets and have very, very strong market positions and good customer relationships, and developing well. The strategy of Intrum tends to focus on the transformation that I think we all know about, and also organic growth. And a major part of the transformation is, of course, a successful implementation of that ONE Intrum program, which is a multi-year program and also a program that follows plan. We also know, I think all of us, that macroenvironment is quite volatile. And at the same time, the fintech, Paytech and banking markets are developing faster and faster. So therefore, in order to facilitate organic growth, in order to maintain and improve increased market shares, Intrum also has to move faster. And hence, the Board has to, I would say, a rigorous discussion and assessment, come to the conclusion that in order to both accelerate the commercial development of the company and also safeguard the successful implementation of ONE Intrum as well as other ongoing continuous improvement programs within Intrum, we need a new leadership. And Intrum is an organization with very many good people, strong management team, but the leadership needed to be changed. And therefore, we made a decision last Sunday in the evening, and we communicated that decision immediately thereafter. We think this will improve from, essentially this week, the speed in change in Intrum when it comes to both the transformation as well as the focusing on the commercial development, leading to a strong organic growth development. We have put in place an Intrum Chief Executive, who has extensive experience from both credit management services as well as investment activities, and he has also been part of the Board throughout the last 3 years. Meaning that we think that this will, of course, help both the Board and management to facilitate an acceleration in the company. And as well also have, I would say, very rigorous and detailed assessment on who should be the next permanent Chief Executive of Intrum. With that, in a nutshell, the reasons behind the target that the company has, of course, remain. The strategy will remain, and that we are, therefore, confident that this will lead to a successful development of the company. So I have to end the intro there, and open up for Q&A. So Andreas, maybe you can manage that.

[Operator Instructions] And our first question comes from Robin Rane from Kepler Cheuvreux. Please go ahead, your line is now open.

Yes. So a couple of questions from my side. So you say that you are -- you want to accelerate this development, both on the commercial side and also on the transformation side. But can you be a bit more explicit, what can be done differently? How is this change, as opposed to [indiscernible]. We are also aware that the -- the COO will leave the companies to take another position. So how -- is this really the right moment to change the CEO?

I think -- to answer the rough question, yes, it's difficult to make that decision. And why is that? As I mentioned, ONE Intrum and the transformation is a multi-year program. And of course that program, the targets remain, and there are some activities that are ongoing. But it might require a reprioritization fine-tuned throughout the time span while it's incremental, because markets are changing, macro is changing, et cetera. Thus, it's very important to have a leadership who has done it before, has a track record of really taking care of this transformation. And we have had a CEO who has been a very strong CFO, who has a background, as I mentioned, from CFO and previously, investment banking. We have come to the position that we need a CEO who has not only done this transformation in previous careers, so to say, but also have a much more commercial oriented focus. Meaning that in terms of the customers, we have become too much of internal focus and a little bit too much of, call it, ONE Intrum program focus. But there are also other things that need to be taken care of if you are CEO, and we believe that will improve by the -- what we are doing. Coming to the commercial development, I think that's kind of closer to customers, more focus to our clients, more focus on sales. We have a fantastic market presence where I think we can further expand. And therefore also, I would say we will even further focus on the scale of synergies between -- for its investment activities, like the full investments, but also credit management services where we can really make a difference to our clients. We have certain markets that we think that we can do much better, and we have certain markets that are extremely strong in, where we also can maintain and gradually improve our position. So there are a lot of opportunities by having a more external focus. At the same time, markets are changing. Customers are having changed demand requirements, competition is changing, and therefore, we also have to move faster.

Okay. And during the past 2 years, I guess, Intrum has perhaps focused more on the transition and focused also on deleveraging as compared to before when Intrum was maybe more focused or had a larger focus on growth by acquisition. Is this something that we might revisit? I mean, growth by being a more acquisite -- having a more acquisitive approach to the strategy?

I think the first priority is organic growth. And therefore, the target of deleveraging the business is the same. But it's the same strategy, the same. It's more up to the implementation of the strategy that we want to accelerate.

Okay. And just the last question then. Sometimes, when this type of sudden CEO changes come, there is -- there can be some write-downs hidden in the books or such. But is that something we should expect, or it's nothing to do with such things?

There's nothing that we, as a Board, knows about that should come because of the CEO change, not at all. So it's pure an assessment and decision about the leadership of the business.

[Operator Instructions] And our next question comes from Rickard Strand, Nordea.

Some questions from my side. It sounds like your view, Magnus, is that ONE Intrum is running according to plan, but there are other transitional actions that needs to be taken outside of this program. Is that sort of -- should we read that's the ONE Intrum scope, could increase? Or does that view sort of impact it in any way?

It's too early to tell, but I think we have to develop the business not only by implementing ONE Intrum in a successful way, which, of course, is the ambition and the clear commitment from management, Board side.

And is it possible to be a bit more specific on the transition, that transitional work there where you feel that Intrum is not sort of currently keeping up the pace that it needs to be, and where competitors might be transforming in a quicker pace? Is it possible to be any more specific? And any fields where you feel this is needed to step up the pace?