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

Good afternoon, everyone, afternoon. My name is Andrés Rubio, and I have privilege of being the Chief Executive Officer of Intrum. I hope you noticed on the way in, we welcomed you in the 38 languages in which we operate every day. On behalf of everyone at Intrum, I'd like to welcome you and give you a true Intrum welcome, greeting to this Capital Markets Day. There overarching theme today is going to be Intrum leading the way. We want to show you how we've been able to lead our industry for the last 100 years. We want to show you how what we've built today is a unique and absolute leadership position but also talk importantly about how we need to continue to develop and how we will continue to lead the industry and deliver for our stakeholders for several decades to come. Just introducing who you're going to hear from today. I will kick it off with a bit of an intro, also some discussions about where we are and where we're going tomorrow. I'll be followed by Annette Kumlien, our Chief Operating Officer. Many of you are familiar with Annette. She is a veteran of working with listed and unlisted companies in this part of the world. Then we'll transition over to George Georgakopoulos, who is the Global Head of Servicing. This is importantly a role that never existed in the history of the company and is, I think, indicative of what you'll hear today, which is a focus on building our client services. Javier Aranguren, our Chief Investment Officer, will talk about our investing business. Michael, who many of you know, our CFO, will come in, in the end and kind of translate all of these wonderful thoughts, directions, et cetera, into our trajectory and our official targets. And then we're going to wrap it up at the end and open it up to Q&A. But it's not just going to be us. All of you here in Stockholm, all of you watching around the world are also going to be involved today. So we've asked Emelie Lundgren to help us coordinate our interactivity this morning. Good morning, Emelie.

Good morning or good afternoon, maybe, I think. Thank you, Andrés. My name is Emelie Lundgren. I'm a Director at Fogel & Partners. And yes, I will be the moderator for today. However, I will, as often as I can fade, into the background since you want to hear from the key speakers themselves. And before I get into some practicalities, this is also the order of the agenda we have today.

This is our agenda. It's going to guide the discussions. Again, I'm going to talk about where we are today, where we're going tomorrow. And that's going to talk about some exciting potential as well as recent activities on the operational front to make us more both effective as well as efficient. George is going to talk about how much momentum we already have and how much potential we have in our client service business. We're going to talk about over the near term, how we're reorienting our investing business to extract cash and then long term towards a capital-light asset management model. Michael is going to talk about how it all wraps up. And then at the end, I'll just make a few remarks, and you will be able to ask questions of all of us at the end and also along the way, right, Emelie?

Yes. So today is divided into 2 parts, you can say. Now until roughly 02:30 with Andrés and Annette. Then we have a coffee break of about 30 minutes. And after that, we'll hear from 3 presenters. The end, we have an extended Q&A. After each segment, I will reappear to just ask a few questions. And for you in the room, you can, as you see across the room and as you have also received in the confirmation e-mail from your registration before today, you have a QR code, where you can go to the QR code and submit your question via the link. And I will get it, and I will ask them whenever it fits into the program. Or also, for you in the room, if you rather want to raise your hand, that's going to be an option as well at the end of this Capital Markets Day. And for you watching on the live stream, just below the video frame where you see me or us or the slides for that matter, you have -- just below that, you have a questionnaire where you can submit your question as well, and I will take them up as we go along. And I think it's time to get started.

Yes, so let's keep going. You're going to hear -- or see, excuse me, several videos throughout the day. These videos are critical because they're not just words that we're delivering or graphs or figures on a screen. They're actual human people who talk about what Intrum does and the impact we have. And you'll also see that they're organized all along our main key stakeholders. Initially, this first one is just a general introduction video, which I'm sure you will enjoy. [Presentation]

Wonderful. Again, as I said, I think these videos are really going to show you how we impact not just clients, not just customers but society as a whole. And I think many of you who follow the company have heard me say this already and even the short time that I've been CEO many times, one of the things that I'm most proud of is actually how we not only create a wonderful amount of value for our clients, but just as importantly, if not more importantly, we helped 4.6 million individuals in the last year who have fallen on difficult times, who can't meet their obligations, who've been excluded from financial society, can't get a bank account, can't get a credit card, gain control of their situation, recover, repay and reintegrate into society. It's a tremendously high-impact activity that we do, and it's fundamental to how the financial ecosystem functions. Let's start today's presentation with a simple statement about what we are. What we are is a services company focused on credit management. This is what we've been for over 100 years. This is what we will continue to be for the next 100 years or more, and it's as simple as that. Here, much more specifically, you can see on the top left, we've been doing this for over 100 years in Sweden, over 125 years in Norway. We have a geographic footprint that covers almost 100% of the ENPL stock across all of Europe, so we're a truly pan-European platform. As you've already heard me say, we impact 4.6 million people a year by helping them become debt-free. 80,000 clients trust us with their customers. And over our long history and given the amount of activity we do with customers and consumers, we have accumulated data on over 100 million European consumers. And our platform is not only geographic. The largest -- it's the largest in terms of human resources as well, with 10,000 people across our 20 markets. Our 2 key businesses, which we're going to talk about today, servicing and investing, on servicing, we have 250,000 -- we conduct 250,000 customer interactions every business day. You don't need to do the math. That's over 60 million interactions every year. No one has that scale. No one has that level of touch with the market. And we collect, as you saw on the video, over SEK 90 billion a year on behalf of our clients. So we're incredibly financially relevant to our clients. We're incredibly individually and socially relevant to our customers. On the investing side, we've put SEK 41 billion of our own capital, with confidence behind our ability to collect against that and generate more than 2x, SEK 86 billion of estimated remaining collections. And what that all translates into is the industry's largest revenue base at roughly SEK 25 billion and, by far, the largest profit base of EBITDA of approximately SEK 13 billion. One point of clarification for the remainder of the day. For those of you who follow us, you probably know this, but for everyone's benefit, when we say clients, we mean companies for whom we collect. When we say customers, we mean individuals, consumers, who we interact every day with and we collect from. Also, we think of our servicing business on a holistic basis. So that is not only third-party clients, which are roughly SEK 79 billion of the SEK 92 billion, but also how we service the existing book that exists on the service -- on the investing side of Intrum. How do we make money? What's our business model? We make money through the value that we add, sitting in between clients and customers. We have 80,000 clients, collect over SEK 90 billion. We have over 25 million customers today in the book and from our clients, who we help repay their debt and financially reintegrate. We do one thing operationally. We have one core operating activity. It is to collect against unpaid claims. We do that across 4 regions in Europe, and we have 2 businesses organized around that activity, servicing when we collect on behalf of clients and investing where we put our own money and capital behind the ability to collect against the claim. Much more specifically, how do we make money and, particularly, in servicing, which is one of the focus areas as we go forward? We start with assets under management. You're going to hear a little bit later, our AUMs today have hit an all-time high of SEK 2 trillion. We try to collect against that asset under management, and we drive collections. That's our recovery rate. That's the percentage of our total claims or total collectible value that we actually bring in, in cash every period. Against those collections, which belong to our clients, we get paid a fee. That's our revenue. That's our conversion rate of collections to revenue. We need to deduct our cost of our platform, i.e., our cost to collect, and then we yield EBITDA, which is the total profit. Again, that's generated by all the activities in the company and all of the capital employed in the company. Before I get into the heart of my presentation, I think it's important to reflect on where we've come from; recently, how we've communicated to the market in the past; and our trajectory against previously communicated targets. Since the last CMD, it is very clear to me that we've certainly become bigger, but we haven't fully benefited from our scale. You're going to hear a lot about that today. We've also not fulfilled the trajectory that we indicated in 2020 on certain key variables. Left to right, investing portfolio, we increased it meaningfully. Our external servicing revenues and cash EBITDA certainly have increased meaningfully over this period, but we did so while increasing not only absolute leverage but also our leverage ratio. These last 2 variables are the places where we have not fulfilled what we told you previously. We thought we were going to grow our way out of this as opposed to actively divert cash flow to lower leverage and net debt. And now we're in an environment that could be somewhat understandable in the past because money was practically free, but now we're in an environment where we can't ignore this different trajectory. And as what you'll hear today is lowering net debt, lowering absolute leverage as well as lowering our leverage ratio is one of our highest priorities over the near term in order to derisk our financial profile. Where did we go wrong, but what have we built as a result of it? It's not all doom and gloom. We have a wonderful foundation from which we can build upon our leadership position. So we didn't have in the past, in our opinion, sufficient commercial focus and performance management, but we have built Europe's most diversified servicer. We have now -- we are building the best management team in the country, and it's not just the people you've heard to -- you're going to hear from today. It's people 1 and 2 and 3 levels down that we're making significant changes to activate our organization and capture our opportunity. And very importantly, we're creating a supporting, collaborative structure that is critical for long-term success -- and supporting culture, sorry. We had increased costs from what I believe to be a failed technological transformation. You'll hear more about that later. And we had a complex and overly central operating model. Well, today, we're moving -- and we've already announced this in the last few quarters. We're moving towards a more simplified and balanced operating model, which balances central with local, empowers local teams, enhances accountability at the local markets, lets decisions that are driven locally that are necessary locally be done locally but also certain elements, ops, IT, sales, that are critical that affect more than one market are driven by a centralized specialized capability. And we had an overreliance on debt-funded investing, but we actually today have probably the best granular credit investing platform in Europe with unique origination and a significant capital base and a cash flow expected on the existing capital invested, all of which can form the basis or the foundation of an asset management business going forward. In addition to formal targets, which we announced this morning, I'm going to touch upon in a few pages and Michael is going to touch upon at the end, we wanted to give you near-term direction and initiatives -- the near-term and long-term initiatives and direction that you can use to measure our progress as we continue to communicate to the market in the quarters to come. Over the near term, it's very simple. We want to reduce leverage and derisk our platform. What are the levers we're pulling to accomplish this? We've already announced this. We're lowering our proprietary investments from -- typically, we invest SEK 6 billion, SEK 7 billion, SEK 8 billion a year. We're lowering it to SEK 2 billion a year. What that means is we're going to be a net extractor of cash from our PI book. The tactical cost reduction program that we announced earlier this year, originally SEK 600 million, we expanded it to SEK 800 million is well underway. And I expect to exceed that SEK 800 million meaningfully. We've already announced the exiting of 5 markets, and we've announced that we're exploring the exit of additional 3. Those last 3 are purely PI markets where we don't have a servicing franchise. And what they'll do is they'll raise liquidity that we can further add to our organic cash flow to reduce debt. And then we're tactically evaluating a sale of a piece of our back book, which would further raise liquidity and further allow us to accelerate the reduction in absolute leverage and get us sooner to that lower leverage ratio. Long term, you're going to hear about this a lot. We're going to become a tech-driven company. And in fact, I believe that you hear a lot about tech-driven, tech-enabled. I think we need a complete mindset shift. Particularly given the nature of our business, where we deal with so many clients and so many customers, I think we need to think of ourselves as a services company, not as a services company who uses tech but as a tech company who does services. I think that shift is an important mindset shift. We've taken some actions in that regard already, both internally as well as externally with the acquisition that we put into our press release this morning. And I think that's going to maximize the potential to leverage technology within our platform. Intense commercial focus. Again, I don't want to preempt George's presentation, but his presentation is chockful of wonderful data on where we've come from, where we're going and why we're comfortable that we're going to get there. And again, this is the first time ever. This used to be a function that was largely distributed to the local markets. We believe that a centralized focus on our commercial development is a critical value-add and gives another tool for the local management teams to develop their business. On the PI side, we're going to leverage third-party capital. You've heard from me already in the last few quarters about a capital partnership. You've heard from me also about our ultimate goal of creating a broad-based credit asset manager. That is still our plan. In the months to come as that takes form, we're going to come back to you and explain more about what exactly, what exact form it's going to take and what impact it has. And then we're doing all of this with a very simplified and balanced operating model, which I'll comment later. But our goal long term is to grow profit and create the leading servicer and asset manager. It's important to note that this is not something we just created for the Capital Markets Day because we have to give you a new direction. This is something we've already been doing for the better part of the last year since I became CEO. We're simplifying our business. We have 2 businesses: servicing run by George and investing run by Javier. It's as simple as that. Operationally, we're already changing our business model, our operating model. We have reestablished a performance culture across the markets that's consistent. They can look at drivers. They can look at the performing markets and the less performing markets, why are they performing differently so that we can create a continuous improvement culture based on performance. We have done acquisitions, and it's important to note that our acquisitions, we will continue to see acquisition opportunities. We're the biggest player by far in a sector that inevitably will have strategic activity and may even go into a wave of consolidation. As the market leader, we're going to be the first phone call every time. But it's very important to be disciplined, and we look at the 2 acquisitions we completed this year through a very particular lens. Any strategic or inorganic growth opportunity has to fulfill 2 criteria fundamentally and then others that are more specific to the situation. But fundamentally, they have to add to our client franchise. Such as Haya did, bringing on Caixa and BBVA, adding to Sabadell and Santander in Spain, basically giving us the entire big bank market in Spain. And Arrow, which took us from not a leadership position, somewhere between 5 and 10 to #2 basically in that market, gave us 2 very important servicing platforms as well as a large asset base. So it made us a leader in one of the biggest economies in Europe. The second criteria is that it has to be consistent with our long-term deleveraging strategy. It cannot be off of that. Our view is that we're going to delever over the near term. So any acquisition has to fit within that requirement. And then we've already started going to capital light. We've already started to focus our business model, agreeing to exit the Baltics, Brazil and Romania. You've heard me say this, those businesses were about 1% of our assets and were about 0.2%, 0.3% of our EBIT, so that wasn't about raising liquidity or anything. That was about focusing resources. And then we've announced the potential exit that we're exploring of the Czech Republic, Hungary and Slovakia. Those markets are PI -- are investing markets. They are several hundred million euros. And those would add meaningfully to our liquidity that we could then use in addition to organic cash flow to reduce leverage. Okay. This is one of the most important pages that we're going to present today, and I'm sure it's going to be very topical for everyone because it says basically how these near-term tactical measures, also the beginnings of our fundamental long-term transformation of the business translate into financial performance and how we're going to delever. So here, 2024 and '25, we will produce approximately SEK 25 billion of cash EBITDA. We have already reduced, as I said, our annual investing budget from SEK 7 billion, SEK 8 billion down to SEK 2 billion a year. So over the next 2 years, we'll invest roughly SEK 4 billion. You deduct that. We have to obviously pay our cash taxes, our cash interest, and that gets us to SEK 12 billion of discretionary cash flow. This is a figure that we often say but I don't think is fully appreciated by the market. And maybe it's the way we present it. Maybe the market doesn't fully understand it, but this discretionary cash flow, we have always said, in the past, can be deployed at our discretion 4 ways. We could buy assets. We could do M&A. We could reduce leverage. We could pay dividends. Between now and the end of '25, we are going to dedicate all our discretionary cash flow to reducing leverage to derisking our profile. To this discretionary cash flow, you need to add the potential back book sale as well as the 3 country exits that we referred that are in process that are going to produce, in my opinion, at least SEK 6 billion and our cash on hand. That gives us total cash that we can divert to debt reduction of SEK 20 billion over this time period. What are our debt maturities through year-end 2025? SEK 20 billion. What this means is that we can fulfill our obligations without relying on the market. We will probably be in the market to maintain access as well as flexibility. We don't have to be in the market. Even if the market completely shut down, we could fulfill all of our obligations through the end of 2025, a key part of derisking over the near term. What does this mean in terms of financial trajectory? We're going to reduce our investing portfolio by virtue of that reduction and extract cash from our portfolio. We're going to grow our external servicing revenues from about a little bit under SEK 11 billion to SEK 15 billion. We're going to increase the profitability. George is going to talk a lot about how we're going to accomplish that. And consequently, we're going to drop our net debt or absolute leverage level down 30%, and we're going to come down to a leverage ratio of 3.5 by the end of '25 and lower than that in '26. This potential, which again, Michael is going to go into more detail, has certain elements that we have not included that represent significant upside. So some are just conservative assumptions. Financing costs. We have assumed that the financing costs in anything during this period remains at the current elevated level. That means we have not assumed the normalization of the market. We also have not assumed that even if we delever that our own cost of capital comes down. We've assumed that when we exit a country or exit back book assets that we don't retain the servicing, that's not going to happen. I believe that will not be the case. I believe anyone we transact either in those countries or in the back book will want us to continue to service those assets, but it is a prudent and conservative assumption. Asset management. What I talked about, a capital partnership over the near term. A true asset management over the medium to long term is not in these numbers. And again, as I said earlier, as that takes form, we're going to come back to the market, explain it to you, but it is not in these numbers, and it will be additive to these numbers. And then tech acceleration. We have a tech path. We announced this morning that we've acquired -- agreed to acquire pending FCA approval, Ophelos, which is the only purely digital autonomous debt collection platform in our industry. What that's going to do for us is accelerate our journey to do more things like digital interaction, self-service interaction, make us more efficient, lower our collection cost while simultaneously increasing our effectiveness, increasing our collections. None of this is in here, although the acquisition cost of Ophelos is, but the benefit is not. Okay. Fundamentally, we've organized ourselves today, and we think of ourselves this way, which is our operations and our 2 businesses. Today, you're going to hear about operational excellence, where we want to be more tech-driven. We want to be more of a technology company that can only lead to, as I said, improved efficiency and improved effectiveness. Improve our client value proposition, which leads us to then get more clients and do more with them. We want to do more with more clients at a higher profit. If we improve our product, which is fundamentally operational, we can sell better, and we can make more money over time on it. And finally, over the near term, we're going to extract value from the significant ERCs that we have, SEK 86 billion. But over time, we're going to use that significant capital base to be the anchor of a capital-light asset management strategy. Formal targets. We announced them this morning. They're corresponding to the page. We did a couple of pages -- or the figures of a couple of pages earlier. That SEK 10.6 billion to SEK 15 billion roughly is about 10% CAGR in our servicing growth. Our EBIT margin will be above 25%. That's total adjusted servicing margin. Michael will explain what that is. We are going to reduce our balance sheet intensity, which means we're going to reduce our book value to approximately SEK 30 billion, plus or minus. Our leverage level will be at 3.5 by the end of '25, and it will be lower in '26. And it is our intention to resume rewarding our shareholders for owning our stock in the form of a dividend as soon as we achieve that 3.5. Where are we today? What have we built? How do we stack up? We've always been a leader. I said this earlier. For over 100 years, far left, Oslo, Norway, 1933, one of our operation centers, kind of looks like some of our offices today, except it's in black and white. 1960s, we started using phone calls as a collections mechanism. That's in Stockholm, Sweden in 1964. And today, we have 4,000 people who have 22 million phone conversations a year who manage those 130 million-plus customer activities, collections activities, of which 500 are in this one call center in Valladolid, Spain. So clearly, we've evolved. Also during this time frame, as I said earlier, we have had the privilege of interacting with over 100 million consumers. We have data on over 100 million consumers. And thankfully, unlike the 1960s in Stockholm when they were in paper files, today, they're in electronic form, which means we can use them readily with the application of technology to not only improve our collections but also create new products for our clients and new revenue opportunities for ourselves. Again, sales and margin. What have we built? We have built the most -- the largest, the most diversified business in the industry. We deal with a cross-section of clients, banks, financial investors, industrials. We do so across all of Europe. We have a full spectrum from performing to nonperforming, to assets, to consumer, to secured of asset classes. And we have a full range of services that George is going to go into much more detail on later. But how does that stack up against our competitors? This page is also one of the most important pages. They're all important, but this one is particularly important, I think. It is very simple. If you want to invest in the credit management solutions space, there is only one choice, and it's Intrum. What is this page? The vertical axis is servicing revenues as a proxy for the size and the importance and the relevance of your client service business. The horizontal axis is your ERC 120 months as a proxy for how large and relevant your investing business is. And then the size of the circles indicates how many markets you operate in. The larger the circle, the more market to operate in. What does this page clearly show that when you look at the pure-play servicers, you have 2 right there. We are 2x the size of doValue. We're 5x the size of Prelios. doValue operates in 4 or 5 countries. Prelios operates in one country. Prelios also operates in precollections, an indicator of where the market is going. Prelios traded a few weeks ago for over EUR 1.3 billion, and that's almost 10x EBITDA, telling you how valuable that access is, how valuable that business is. We're bigger than both of them, and we're in more markets, and we're more profitable. When you look at other people who I'm still somewhat surprised that people view as our competitors across the bottom, you can see that they're not very meaningfully in servicing because they're really only in servicing to the extent they have their own book, but they are essentially just investors, where they take capital from one person and invest it and they make a spread. That's capital. But even there, we're bigger than all of them comparable to Encore, but they're a U.S. entity, does something different, but we're still bigger than all of them. I think what you see here is that we have an absolute leadership position that we can continue to build upon. And we're the only person who brings that integrated model, bringing both sides of the equation, to bear for our shareholders. More specifically across our Northern, Middle in Europe -- Northern Europe, Middle Europe and Southern Europe, franchise regions. And these are 16 markets, plus Poland, who I would classify as our 17th franchise market. In each one, we're the top player or in the top 3. All of them are very sizable, in particular, in Middle Europe. You're going to hear about that later. We have clients across all 3 geographies, and we have some clients who follow us in all 3. So we have Santander in all of them, but in every one, we have unique clients and specific clients. And we also have broad-based and more region-specific competition. And again, some of these competitions are capital. they're not necessarily servicers. But we have competition everywhere. We don't lack competition. But we just -- we actually win on a regular basis, which we'll get into later. This page is important because my belief is that the most critical variable to determine revenue growth and profit in servicing is market leadership, which is why you've heard me say several times since I took over, that I want to be #1 in servicing, #1 in investing in all our franchise markets. This is critical. The environment we're in, this is important. I can say without a doubt that our clients are going to need our services more in the next 5 years than they have in the last 5 years. Why? Because the environment is driving towards consumer distress, so to speak. Far left, inflation, no one here, that's not a surprise to anyone, has exploded from under 2% to 7%. Household cost of borrowing has gone from under 2% to above 3.6%, more than 2x since 2019. This is an effect that hasn't been fully felt throughout Europe yet. And it's going to create ripples and impact for several years to come and across all of Europe. Wages have been flat, which means the consumer is basically going backwards in terms of purchasing power. And then bankruptcies, just to give you an SME or corporate proxy for the amount of distress in the system, are accelerating, and they're at the all-time high since 2015, the year those kind of statistics began to be recorded. Why is this important? Because most of our large clients are banks or financial institutions. And you can see here, when a claim or a loan goes from performing to underperforming and, in particular, when it goes to impaired, there's a significant ramp-up in capital cost in terms of provisioning for our clients. Why is it important now? Because as you can see here, since 2019, Stage 2 loans have doubled. The percentage of the total stock of loans in Europe has gone from under 7% to almost 10%. This is incredibly relevant. We deal with human lives. You're going to hear about that a lot today. We also deal with incredibly valuable factors for our clients. This is also translating into our own numbers. We will see, long term, all of these factors translate into AUM, servicing revenue and, with a lag, investment opportunities. But just in the last year alone, you see that our AUM, as I mentioned earlier, recently hit an all-time high at SEK 2 trillion has grown 9%. And then last year, not surprising, our external servicing revenues, as our clients need our help more, has grown almost correspondingly at an 8% rate, but also anecdotally, when we talk to our clients, 1 in 2 expect late payments to increase, 1 in 3, expect defaults, NPLs to increase. Anecdotally, statistically, economically, it's all moving towards more assets for us to manage and us being more important to our clients and, with a lag, an opportunity to invest in those assets. Another factor that is often thought of as a headwind but I believe it to be a tailwind for us is regulatory. Our industry touches financial institutions and consumers, therefore, is continually under regulatory scrutiny and pressure. But as the market leader, we're in constant dialogue with the regulators. We drive industry standards. We've been working with Brussels for the last few years on the new NPL directive. We try to stay ahead of regulatory trends. Why is this important? Because when a client trusts us to collect against their claim, they're trusting us with their customers. They're trusting us that we're going to do things in the right way. They're trusting us that they are dealing with the best platform, the platform that most knows the regulatory framework. They won't run afoul of the regulatory framework. We have an investment over our history across all of our markets. We give clients the greatest level of comfort. And this is something that is actually a tailwind because none of our competitors have the ability to replicate this in my opinion. All right. Now it's time to talk a little bit about our role in the financial ecosystem. And I'd love to start with a video which talks about or shows you the motivation of our employees. [Presentation]

I love these videos. I'm not going to be a nurse. I'm not a doctor, but I think leading this company is one of the things that I can most do with my life to impact people. And you see that. You saw that in that video, and you'll see that throughout the day. At Intrum, sustainability cuts across everything we do. And we look at it as to how do we deliver for our key stakeholders. Top left, we deal with something that's very important to our clients, and we have a high level of client satisfaction. Top right, you've already heard about this a few times, but we help people who are in a difficult situation get through that and reintegrate into financial society. That client impact, that customer benefit leads to an incredibly high engagement index. I don't even need to talk about this. You saw that video. You saw the faces. You saw the words. Every time do I go to a call center, I'm blown away by the energy that exists in these centers. And it exists because of that feeling that you saw in that video. And the bottom left, we're not an industrial company, but we do need to think about the direct impact we have on the environment. And within the context of our business model, we do everything to improve on that front. In addition to the formal financial targets we announced this morning and I showed earlier, we have specific ESG targets across the board with regard to customers, clients, employees, society, and we always strive to do better. But where we are today even is already highly rated by a broad panel of third-party experts. So with regard to ESG, we're more S than E or G, and we're high-impact. That's important. Okay. Now I want to give you a little bit of a summary from my perspective and a bit of a sneak peek as to what you're going to hear from Annette, George and Javier. Operational excellence, tech-driven operations, how do we get better? It starts and ends with how we work together, how we collaborate, what talents mesh together, the people we have, the seats we put them in. We are going and reversing ONE Intrum in my opinion. ONE Intrum was necessary at the time that we implemented it because having 20 different countries do 20 different things makes no sense. But at the same time, having one central direction in operation of the company does not make sense. So we're going to a more simplified and a more balanced operating model. What that does is it empower markets who previously had to listen to the center to see what they would do, creates ownership, ensures clear P&L accountability. We want local markets to drive decisions and profitability because they're closest to the clients and closest to the customers. We want to give them the tools, the knowledge, the support to be successful. You're going to hear about performance management. You're going to hear about technology. You're going to hear about lots of commercial focus. You're going to hear about putting capital behind our activities. All that supports the local market heads and being more effective in their business, and that will translate to the bottom line. We're going to reduce complexity and simplify the organization by creating more collaboration and more clarity and more transparency, and we're going to improve effectiveness, and we're going to achieve cost savings, which we already are, particularly in the center but also in the local. By supporting them, by making them more effective, we also make the local markets more efficient. We certainly are going to reduce our central costs. Okay, let's talk about our digital journey or tech road map. While I said earlier, and it always sounds wonderful, we're the leader, we've evolved, et cetera, we still have a lot more to go. There is no doubt about it that we have a lot more to go. Today, 4,000 out of our 6,000 employees in operations under Annette still just make phone calls. They spend time making phone calls. Remember, we started making phone calls in 1960s. Have we really evolved? Annette's going to talk a little bit about that. But what do we can do there? We can automate. We can make it actually more efficient, more automatic -- or more automated but make it also a better experience for our customers. That's the challenge, but that's also an opportunity. We have 60% of our agents -- our agents spend 60% of their time, excuse me, dealing with e-mails and SMSs, things that are not digital. They are digital relative to 20 years ago, but they're not truly digital. They are normal means of communications now. That is not digital. What really is digital is what's at the bottom. How can we engage with the customer who can get on to a portal, can figure out what is this related to? It's related to this debt. Okay, I can only pay this month. I have to pay it back, get into a payment plan and actually then get a solution. Portal visits, less than 1% of our actions. We have 130-plus million actions a year, less than 1%, our digital portal, interactive self-serve. We have 80,000 clients. We have some big clients, which George is going to focus a lot on. We've got a lot of small clients. We need to work for both of them. We need to make sure that our model is profitable with both. This is a big driver of efficiency and effectiveness. How does this translate into numbers? 130-plus million activities, 4,000 agents handling 22 million actual calls. We make -- we dial a lot more calls, but we make 22 million phone conversations, 40 million e-mails. Well, 60% of the time that an agent is in the call center during their working hours, they're productive. The other 40%, they're not directly productive. We can improve upon that. More than half of their productive time is spent on simple e-mails and simple calls, things we can easily automate. In fact, we can probably automate it by -- and enhance the customer experience. When you translate that into numbers, and these are indicative, top-down examples, all else being equal, if we increase self-serve to 20% or 25%, which in today's day and age is absolutely achievable, we could improve our annual EBITDA by SEK 400 million. All other things being equal, no increased volumes, no increase [ cost ], just [ on ] our current base. If we amplify efficiency and effectiveness, in other words, we become a little bit more efficient, lower cost to collect and become a little bit more better at becoming at driving collections, there's another SEK 700 million. These are illustrative examples, but what they show you is we have potential benefits of scale going back to that early page that we haven't benefited from despite our size. But thankfully, given our size, these are things that if we focus on, we can achieve. Okay. Client focus. You're going to hear lots of figures from George. He does a great job presenting this, and I'm so -- I'm delighted with the progress we've made in commercial effectiveness since I took over but more particularly since it's accelerated since he took over his position. But I'm going to bring it back to one small anecdote. I was in June at a CEO meeting in Spain. In fact, this is with the CEO of Bank Sabadell, one of the top 3 or 4 banks. And I was with Jose Luis Bellosta, who's right here, our Head of Spain. And very early in the meeting, he turned to us and said, "We view Intrum as our partner in managing and lowering our cost of risk." That's an incredibly powerful statement. Think about that. And the 2 words that I really focus on are partner and cost of risk. What does partner mean? Partner doesn't mean you're a mere service provider that you're going to be negotiated with continually or put into competition [ if you ] -- no, no, they look at us as a partner in finding solutions for really complicated problems. That, over long term means you're going to do more things with that client. You're going to deliver greater value. And if you improve your value proposition, you'll make more money. Cost of risk. Cost of risk is something which is very financial. Most of our large clients are financial entities, and it's a massive, massive variable in their results. It's a significant, significant financial importance to them, and they trust us as their partner in dealing with that. Again, translate this concept to figures. Here, you see cost of risk across the top and operational efficiency across the bottom, the 2 impacts that we have when we work with someone to outsource their collections activities. Top 25 European banks who, by the way, 23 are interim clients, total loans, EUR 11.8 trillion. Provisions at 35 basis points cost of risk, about EUR 41 billion. Just reduce that 35 bps by 1 bp, you generate EUR 1.2 billion across the system every year. We have real-life case studies that we work with large clients to see what our impact is. What we've seen on sizable client relationships that we can improve their nonperforming exposure performance by 10% to 15%. The other benefit, which I don't think always everyone appreciates, is that when we provide collection services, they're outsourcing an important industrial activity of these clients. And here you see 55% cost-income ratio across those same top 25 European banks, EUR 275 billion cost base. Just lower that by 10 basis points, you get EUR 0.5 billion of every year benefit. Well, we have specific real-life case studies, where we can reduce your IT cost by more than 50%. Our annual third-party servicing revenues are a bit above SEK 10 billion, call it, give or take, a little bit under EUR 1 billion. We can deliver many, many multiples of value on that -- of that, many, many multiples of that in terms of value to our clients. Finally, Javier in our investing business and our rotation to capital light. Over the near term, we're going to extract value. Over the long term, we're going to pivot to a capital-light partnership and then, ultimately, a broad-based credit asset manager. Why are we doing that? Because what we have today is unique. We have a proprietary origination capability, where last year, we invested SEK 7 billion across more than 250 deals. And where more than half the assets we bought, we had touched at some point as a servicer. That's proprietary origination that no one else has access to that just comes in off the platform. That's incredibly valuable. If any of you are investors -- private investors, you know how valuable having access to that flow is. We have an underwriting track record, which over 18 years -- and it's my favorite graph when we show it every quarter, over 18 years, we've grown our investing business by 17x. Yet during that 18-year period, we have a track record of collecting 106% of what we originally forecasted when we bought the assets, even though we've grown 17x. What that says is we're prudent in our underwriting. And the industrial expertise, which is the third element here, we get better at collecting every time. In our investing business in the future, our investing partners will benefit from that. You add this together, which is unparalleled to third-party capital, you get the potential for an incredible, sizable, value-add, differentiated asset manager. Why did we do this from a numbers perspective? Why? Because it improves our profitability and our scalability, profitability, unit economics. Today, in our model where we invest 1 unit of our own capital, 1 unit leverage, it equals 1 unit of return. So the 100 become 150. We get a servicing markup, which is our servicing profit on our own assets because we price these things on an arm's length basis. We make good money, 57% ROI, 1.6 money multiple. But what if we transition to something where we're investing 30%. Someone else is investing 70%. We make the same 1.5 on our investment. We make the same servicing margin because it's the same perimeter of assets. It's 1 -- 100 units and 100 units in the other. But we also make origination fees. We make asset management fees. We make performance fees, all of which doesn't consume capital. What happens? We make a meaningful amount of more money. Not only this but also by leveraging third-party capital, we don't hit the ceiling or the constraints that we have in funding everything with our own balance sheet. So we can scale up. So not only are we going to scale up in volumes and really invest more, but we're also going to make more money. What that means is the quality of earnings, and this is what I said earlier, that -- those people on the horizontal axis, they're capital. Are they differentiated? Do they have our proprietary origination? Can they do what we're talking about here? What we're going to deliver as a result of this is there's still a capital-based return, but there's a business return on top of it. It's going to be higher-quality earnings and greater earnings over. With that, I think I'm done, and I think you want to ask me some questions, Emelie.

Many want to ask you questions because they're coming in from you as well, either on the live stream or via the QR code. But I just have to ask you, Andrés, I find it interesting, what you've begun talking about, the simplification of your business model because in my experience, analysts, fund managers, investors have said, you're too complicated to understand. Are you kind of giving them a little bit of right here, you were very complicated? Or do you find that Intrum was rather misunderstood?

I think it's a combination of both. I don't think we did ourselves any favor by the way we presented our business in the past and our focus on portfolio investments because when you translate portfolio investments into accounting, it confuses the picture. We're emphasizing services. There's no such thing as distinction on the servicing side. And on asset management, it's going to be more clear. Also, what we're going to be doing, we've also simplified our business. We don't have strategic markets. We don't have [indiscernible]. We don't have CMS. And what you're going to see as of later this year in our new disclosure is there's going to be an investing P&L. There's going to be a servicing P&L. There's going to be central items, and then there's consolidated. And you can literally add across. We're also going to give some data across regions. I think that's going to infinitely make it easier for people to understand our business for people to project our business, also to very quickly look at what are the drivers, where are we making money, where are we growing, where are we highest profit and why. I think we can do a lot better, and we're moving towards it.

I also want to backtrack to the -- what you talked about the new financial targets and the dividend. And just to make it clear then, you're passing dividend until you deliver on your debt level of 3.5 or less. So no dividend until 2026?

Okay. We are pausing our dividend until we reach what we're -- what the market thinks and what we think is a more sustainable level of leverage, which is 3.5. We're going to reach that by the end of '25. And then we will resume -- go back to rewarding our shareholders.

And some questions are coming in as well. Speaking of that, you said simplification, you're looking to exit some markets, you have decided to exit some markets. Kamil wonders, could you explain the logic behind having Poland as the only tactical market?

Well, it's interesting, Poland. It's a very good question. And I get this question often. Poland, unlike the other 3 markets does have a somewhat, I would call it, burgeoning servicing market. There's lots of projections out there, the Poland market, the economy is going to be bigger than the U.K. in 10 years. It's a fantastic economy, I think. I think it's one that has significant potential for servicing, and therefore, we've decided not to explore exiting it at this time.

And we have -- now they're pouring in the questions just because of that, so I'm going to find wherever I'm at. Johan wonders the target below 3.5x your leverage ratio. What is the right leverage level long term for your type of business?

It's a great question. And I think most of the market's heard me say, I don't think we have an issue with leverage necessarily. In this world where our leverage cost is much higher and we have large maturities, it's prudent to delever. But I'm comfortable with 3.5. I think when you look at our ERC and just run it off, we could pay off all our debt. We're the only person in the entire industry who can do that. That doesn't even count the fact that we make SEK 2-plus billion in EBIT from our servicing every year, going to SEK 4 billion, which you'll see later on. So I'm comfortable with our risk profile relative to our debt. But regardless, we're still going to delever over the near term because I think that's prudent given the environment.

Jacob wants to know, how do you expect the EBIT margin to increase from roughly 18% to 25%? How quickly should we expect?

So again, these targets are from now to '26. You'll see it later very clearly in George's materials across new products, across new regions. But it fundamentally is focused and growing and becoming that -- remember that market leadership point I made? That is important. If we grow and become the market leader, we will have the highest margins. We're very comfortable. We've already seen recently an improvement in our margin trajectory. And I'm very comfortable we're going to get '25 or higher, but it will be in much more detail in George's section.

And this might be a bit technical, but [ Patrick ] wants to know, you mentioned you might tactically sell back book. Historically, that has been out of question given IRR levels versus financial cost. What has changed your thinking?

Simple. We want to have -- and it may be in conjunction with a long-term capital partner that we do a piece of the back book. It may be just a back book deal. We're still evaluating both alternatives. But I think it's important in this moment, we're going to transact at or above book value. So that validates our book value. It also raises further liquidity, and we can use that cash to reduce debt. Our cost of debt in the secondary market, as you can see, is in the 12%, 13%, 14% range. Our ERC, after operating costs relative to our invested book value over time, produces a 14% return. So that equation has gotten a lot narrower. I think it's prudent for us to think about a tactical back book sale to further add to our ability to delever over the near term.

And Jacob wants to know the SEK 6 billion you point to from back book and exits, could you give the split or the [indiscernible]?

I cannot. I cannot, unfortunately. I think it's very meaningful. What I said is the 3 markets are several hundred. You can interpret what several means. And also, I think we'll get at least to SEK 6 billion. So that gives you an idea that we're not talking about a small back book deal. We're talking about a meaningful back book deal. I suspect -- or expect to probably exceed that SEK 6 billion figure.

And [ Wyatt ] wants to know, how are costs allocated across business segments?

So cost, local common costs are allocated. Central costs are allocated according to revenues. Local costs are allocated mostly to the servicer. Michael can answer that question later in more detail than me.

Angeliki wants to know, will you pay the final dividend of about SEK 6.75, which was already announced last year?

Absolutely, yes.

Okay. Let me see. I kind of want to touch upon the dividend again for you while I kind of go through your questions. We have a few more questions before we let Annette up on stage as well. Given that it was basically an interim identity to be a high-yield stock, was it hard to pass the dividend?

It was not an easy decision. Intrum has paid dividends for as long as they've been listed. We had long discussions with the management team. Obviously, it's not a management discussion or a decision, I should say. It's not even a Board decision. It's recommended, and then ultimately, our shareholders agree. We have some very large shareholders who are on our Board, are also big beneficiaries. But everyone realized that the world's changed. I have challenges sitting in my seat that my predecessors didn't have. And you have to act accordingly, and the derisking emphasis over the near term, while still building the business, everyone in the management team, everyone at the Board, and hopefully, most of our shareholders completely agree with that. And that meant that for a period of time, we needed to pause the dividend. And in the end, it wasn't controversial.

I'll let you off the hook for now, Andrés, because we need to get moving. But I'm very grateful that you all are very active because the questions are really flowing in. So we hope that, that is going to be able to be covered later as well. But for now then, the newest member of the executive management team, Annette Kumlien, to talk about the operations. Annette?

So thank you very much, Emelie. Yes, I am the rookie in the team, and I am the rookie in this market as well. I am Annette Kumlien. I've worked 5 months now for Intrum. Prior to that, I have worked in everything, from steel to health care. You might ask yourself, what is common about that? Well, all of my companies, they have sold on content, what's in the offering. And that creates a culture of how you run innovation, both from a continuous improvement perspective but also learning how to jump the curve and not making -- and making sure that, that is not competing with each other. This is important. So when it comes to Intrum then, I am on my exploratory journey, but looking at [ the journey ] as Andrés says as well, our offering is really making sure that our customers are becoming debt-free. Now what does it mean to be in debt? And what does it mean to become debt-free? Let's look at one of the customers we have. [Presentation]

Big words, leading our way to a sound economy, but it's these people that we're talking about and that we are working with. So all the numbers that you have heard, all the numbers that you see, I mean, 35 million cases; 130 million customer interactions; 41 call centers, where 5 of them are global; 6,000 people in operations; 4,000 call agents. We have 2 million portal visits, 22 million connected calls, 40 million emails, 33 million letters, 40 million SMSs, 0.6 million field visits. All of them are customers like Ronnie. And all of them, if you heard also our employee movie, it's about our employees driving them empathical discussion to help the customers actually become debt-free. That's what we are doing. Now it is undeniable so that Intrum is the true market leader. Our clients, they trust in what we're doing and trusting us solving a problem for them. George will later talk about the success rate we have in new contracts and old contracts. But we know that there are disruptive local players. The world has moved on, and we have actually not really changed the way that we have been operating. And if you look at what Intrum is, it's a company that have consolidated and rolled up individual businesses over a long period of time, without reflecting on the operating model nor implementing a performance management culture to make sure that we drive and develop our offering to our customers. And don't confuse delegation of authorities and responsibilities with understanding how to drive a business in local regulatory set markets at the same time as driving economies of scale because at the end of the day, we need to make sure that we drive collections in an empathic way. And you have seen the numbers. We're talking about massive numbers in the interactions. And obviously, when you look at then this rollout without integration, that has led us into a very complicated tech market or tech geography, you can say, also a very complicated way of dealing things. And eventually, if you don't work with your design, you will be caught up in it. Andrés showed this picture before. 1930s, paper. 1960s, we started to call. But if you look at the picture today and you start to dive into it, have we really fundamentally changed the way we are working with our customers? Yes, there are screens, and yes, we have the papers on data, but we're still making the calls. That's still the main contact for how we reach out to the customers. So what do we want to do then? What do we want to be? Well, we want to be the best operating platform in the business because that's really the offering that we're giving to our clients. It's all about people, it's about process, and it's about tech at the end of the day. It doesn't have to be more difficult than that. And simplification is the name of the game. Andrés showed this picture as well because, I mean, there's a lot of noise. You sort of have to shave off the noise to understand what's really going on. At the end of the day, we have asset under management, the collection side, the revenues, and it ends up nicely in the cash EBITDA. But from an operational perspective, we need to make sure that we then have an effective way of driving home the collections, the recovery rate. We need to make sure that we set up the way we're doing it in a smart way. So the cost to collect becomes as valuable as possible. But it doesn't stand on its own feet because obviously, it's communicating buckets between commercial and operations for that perspective. So when you look at what we're doing is that, yes, the asset under management, how we actually design our agreements with the clients, that impacts on actually how we can drive home the collections. And then when we look at how we drive home the collections, actually, we work with our customers. That impacts actually how we sign the contracts as well and becoming the true partner with our clients. And what we look at what we need to do, I mean, obviously, from a people perspective, we need to become tech savvy. You can never lose the control from a human perspective, but you can ask yourself, if we make out of those 22 million calls that you have heard, 13 million of them are outbound, but actually, to get those 13 million connected calls, we do have a call strategy where we actually run up to [ 154 million ] calls to reach to the 13 million connected calls. Do we know our process? We also have the employees at the core. So it's about making sure that we have organized them in the right way, get the right people on board and also develop ourselves so that we can run the business and get into this continuous improvement process. From a process point of view, yes, we need to understand what are the drivers, how do we work with the drivers, what can we do locally and what can we do together to drive down the costs. How do we automate it? Or how do we use tech where it's appropriate to do it? And then how do we make sure also with the clients that we do our best onboarding in time? Because today, when we look at onboarding, it's actually quite complicated. And if you look at it also, is that basically, when the onboarding time to get up to a run rate in our collection rate, it's more than 1 year. That's how complicated it is sometimes. And out of those [ 13 million ] cases that we're working on, 1/3 of them, we don't even have an e-mail address to them. And almost 2 million, we don't have any contact details at all. So then you can ask yourself, how do you actually automate something where we don't have the data? And at the end of the day, it's also to make sure then that the data we have because there is an amount of a lot of data, how can we use it to become smarter in the way we're operating, still keeping the human touch on it? So there are 2 fundamentals that we are working with, and they're split in a little bit different way. One of them is driving the operational scorecard because it's, again, understanding what are the drivers to our EBITDA? How do we make sure that we find a way to discuss it and actually drive it? And how do we find a way to cooperate to make it better? Again, there's local legislation, yes. But that doesn't mean that you can't do things out of economies of scale and do some things together. So that's fundamental when we're trying to build the operating model and actually becoming a smaller company in a way to drive the business forward. The other one is the tech journey, where there are 3 elements to it. One is obviously, how do we interact with the customers? The other one is, how do we drive our own processes when we look into the customer communications and also how we work with the client onboarding? And there is value at the table. We're talking about almost -- talking about SEK 1.1 billion that actually could influence us from a profitability point of view if we get this right. Sounds nice on the paper. So what are we doing then? Well, one of them you've already heard about. We actually -- to get the customer self-support in, we actually have invested in Ophelos, subject obviously to get antitrust approvals. So what it is really about, yes, on the face of it, it's driving up customer self-service. Today, we are 1%. We expect a lot of it coming out of it. But it's really looking into how can we eliminate those unproductive actions and meet the customers with empathy because we have customers that don't want to have a phone call. They want to be able to run it on himself. And tech, yes, it should be huggable, to say the least, which you will see when we show the trailer later on. It's also to make sure that we have the digital penetration and use the data, and there are a lot of opportunities to drive this into an even higher pace than what we have when we look at the business case from the beginning. Again, it serves as a catalyst for us. So without further ado, what is it? [Presentation]

So in short, what we're talking about getting client analytics, having hyper-personalized customer interaction, driving empathy at a scale because here we can do a lot actually to get things going much quicker, machine learning. Obviously, security around it. And at the end of the day, an increased digital self-service. That's what we're after. But not only that, it's actually driving the tech platform even further. So we look forward to the work together with the Ophelos team. And other things that we're doing, it's not only with Ophelos. It's obviously coming back to that. We need to work with our data in a much smarter way than what we're doing today, really use it to drive down sort of the manual tasks and make us accelerate in the way we're interacting with our customers. As we talked about before, we only have 1 -- less than 1%, which is basically self-service, and we have a lot of costs that we're making. Onboarding time, it's actually quite complicated. As I said, sometimes data missing. It takes a long time to get it in. We need to build the systems around it but also making sure then that we get effective in ramping up the run rate from the beginning, which is more than 1 year, and we need to get down to that too much shorter time period. It's again coming back to the recovery rate that we're working on because this is really what the clients are buying. So just to conclude, what are the drivers? Again, it is about people because people build businesses. Company doesn't build businesses. It's about making sure that we have an agile and efficient delivery and people that want to be in this world. It's about making sure that we develop our people and also make them feel that they are part of the change that's going on. And that's why an actual learning program is very important. And then again, incentive structures need to be aligned because at the end of the day, this is also how we act as human beings. Processes, yes, tech first and make sure that we automate as much as we can so we can drive it in a sort of empathy with scale. Transparency on how we work across the group because that is the only way that we are going to build best-in-class practices. Again, best-in-class practices. We have 20 countries or 17 at the end of the day. 17 different ways of working, 7 different ways that we could actually, if we get the brains going between us, this is where we can compare ourselves and become much better than we are today. And it is that continuous improvement culture we need to get into because at the end of the day, what we do operations when we meet the customers, that's where the innovation starts. Tech, yes, we need to have a modern self-servicing client platform, but also, portals, that's going. We need to transform our contact centers. We are in the process of doing that. We need to make sure then, and you have heard part of this before, integration layer so we can connect towards our little bit old legacy systems to get going but also get the data management correct because at the end of the day, without the data, we cannot move on this empathy at scale. So that's what it's all about. With that, Emelie, I'm done.

For now. I'd like to ask you about this lag of digitalization as you talk about within your sector or within your business. Is that an interim issue or has been or a sector issue or culture?

There are other sectors that were not very high up on the digitalization agenda. And you can look at health care as a great example to use as an analogy. They actually started much earlier. And I think that -- partly, that comes out of us. If you have the right people that really work with innovation, we would have been on this much earlier. So -- and then I know that most of the other -- most of our other competitors, they are not so digitalized either. So -- but I wouldn't say it's an industry. It's actually how you are actually playing and getting people on board and how you drive innovation.

Because given the video that you showed and the acquisition of Ophelos, we're talking AI, ChatGPT, those kind of things. So how is that going to affect your business? We actually had a question from [ Lars ] asking about that, how generative, something like that, AI...

Generative AI.

Sorry. AI will affect your business because with some sectors or industries, you say that, that is going to be revolutionizing. Is that the same effect on you, too?

We are very -- today, a very people-intensive business. Obviously, if you become a bit smarter in how you drive your processes, we will get effectiveness out of it. So yes, there will be a change if you look at the footprint. It will impact us. But I think also what people are seeing, and you heard that from different industries as well, it is important that people are on top of the tech and not the other way around. We have seen -- we are -- it's not that we're totally blank. We're doing some automated things. But as I gave you the example of the call strategy, that's a typical example where the people are not on top of the tech. We let the tech live its own life. And suddenly, we are making 250 calls to get to that 12 million or 13 million connected outbound calls. So yes, it will change, but it's about how you manage it.

[ Asfan ] wants to know, what are the key areas within the collection value chain that technology is expected to enhance, ultimately boosting margins and efficiency? Which countries are likely to experience the most significant improvements in this regard?

I think it's across the board because it starts with actually the onboarding of the client cases basically. But it ends -- or you can say also starts with actually how we interact with the customers. And you saw the trailer that we've done. So I think it goes the whole way through the value chain.

But then I'm guessing that some regions or countries have gone different steps already in this process because as you said, you have 41 call centers, over 10,000 employees. I mean it's a massive transformation.

Yes, it is. But in general speaking, coming back to the picture that Andrés showed about 1930 to today, we have truly not -- even if we are building things, we have truly not changed the way that we are interacting with the customers, nor really with the clients. That is the power that's going to happen with this.

Could you give me some kind of time frame on what we're talking about? Are we talking years? Are we talking quarters?

We're not talking about months. It will take longer than a month. It will take some years, yes. But it's about continuous improvement, building it into it because that's what will generate things further on because I think the biggest problem is -- what I started with in the beginning is if you don't have a continuous improvement culture, you will lose out eventually, and then you need to do that jump to curve activity again. So it's getting that in, then you can move.

And is this transformation an investment, meaning you expect it to pay back later? Or is it a cost reduction from day 1?

It is an investment, but it's also about making sure that we take the low-hanging fruit so we can get sort of certain things coming in already into the P&L earlier on. And part of the cost improvement program that we have introduced, you will overall see effects during next year. But the bigger impact comes later on, yes.

Okay. Well, Annette, I'll let you go for now. We'll be back at the end, too, for the Q&A, of course. Let me take that one out of your hands. And that actually concludes the -- thank you. That concludes the first part of today. So the second part is going to be servicing, investing and financials before the Q&A. We give you 30 minutes to stretch your legs and top of your coffee. It's just outside of this room for you who are here, and you on the live stream, we'll be back in 30 minutes. Thank you. Enjoy your break. [Break]

So, welcome back for the final part of today's Capital Markets Day. We have 3 presentations as well as Andres' summary and the Q&A at the end. And to start us off on this part 2, we have George Georgakopoulos, he's Global Head of Servicing, who will elaborate on one of Interim's main business areas. All yours. - go?

Thank you, Emelie. Good afternoon, everyone. I am George. I am the Global Head of Service at Intrum -- is a new role created in April this year to signify -- give the signal everywhere about our new strategic direction, i.e., with a strong focus on servicing. My job for the next 3 years is to do mainly 2 things: one, is to grow our servicing revenues from what is today SEK 10.6 billion, aiding anyway number in the industry from SEK 10.6 billion to about SEK 15 billion or more and double the profit of servicing. Today, EBIT of external servicing is about EUR 2 billion -- sorry, SEK 2 billion to make it SEK 4 billion. What I will talk about today is our clients. But before I speak about the clients, I would like you to hear what our clients think of us, think of Intrum. [Presentation] [Foreign Language]

This is actually highly representative of the few of clients of Intrum for the services and the work we do with them and for them. We have high client satisfaction indexes, and I will speak about them, higher renewal rates, higher conversion rates and so on and so forth. We have quite a bit of data to support what you see here. Now what I'm going to do today is talk to you about how we are going to grow the business for the level that it is today SEK 10.6 billion to about SEK 15 billion revenues and how we're going to double our profits from SEK 2 billion to SEK 4 billion. In short, I'm going to describe to you that we have an excellent momentum already built in the business quarter 2, quarter 3 in terms of our commercial and sales development. So we'll speak to you about the sales strengths and the momentum we have in the commercial development. Secondly, I will speak about the client propositions we have today and how we are going to further grow the business by expanding those client propositions. And thirdly, I will focus more on increasing the profitability of our existing client base and contracts. I will speak about how we work on client profitability and what sort of results we expect. I will set the scene by describing where we are today as a servicing platform. But before I get into that, the core premise of what I am telling you today is that fundamentally, Intrum is a very good company. Obviously, I believe this, and that's why we have decided to be with the company in the role of the Global Head of Servicing. Importantly, though, our clients believe this. We'll discuss later and see the importance of the renewal rates that we have in the business, the client satisfaction we have in the business, the longevity of the contracts we have in the business. Hugely further important, the market overall believes that Intrum is a very good company. Evidence is the fact that when we go out there to win business, the win rates we have in the tenders we participate, and I will show you in detail information about it, is more than 50%. We win most of the cases on the back of higher quality services. It is a sound foundation to do more and better with the business. Getting a bit of sense for you the scene before I get into sales, client propositions, growth propositions and profitability set this in a bit what today's platform looks like. It looks like the leading provider in the industry in Europe. It has a very, very substantive external servicing revenue base of SEK 10.6 billion, importantly though, in a market that it is very material, SEK 60 million to SEK 80 billion, we calculated the addressable market to be, and we have about SEK 10.6 billion. The SEK 60 billion -- SEK 60 billion to SEK 80 billion is a market of existing revenue base of existing outsourced type activities that we service as well. If you want to consider how much major organizations, banks, telecoms, but smaller SMEs, keep and they do themselves -- credit management themselves, at least at early stages. This market here is a substantially bigger market. I will get back to it because with the new propositions we are thinking, certainly, we go to get market share here, but we think we can unlock untapped markets as well. The servicing EBIT, we call it adjusted EBITDA, here is the profit. It's the best profit proxy we could have for servicing. It is SEK 2.4 billion out of which about SEK 2 billion is external servicing. Intrum has a very large client base, EUR (sic) [ SEK ] 80,000. I will speak a bit more about the revenues to give you the right feel about the revenues and the clients going forward, that it is a very large base, hugely important for the further growth of the company. because obviously, we do and we intend to intensify that do more business with existing clients as well. The position in the majority of our franchise markets is leadership. I spoke about the revenues, SEK 10.6 billion revenue. I wanted to bring a bit closer and connect revenues to clients, client types and geographical markets that we operate in, what we call, the regions. We have a good distribution. First of all, we have a good distribution in the sense that out of the SEK 10.6 billion half of the business, half of the revenue is with select 15 clients. That's a big advantage. And the big advantage for Intrum, I will speak about it. But we have a very large revenue base, SEK 0.5 billion to many more clients giving a fair amount of diversification. Importantly, we have presence across the 3 markets, slightly different, but the substance of it is substantive books of clients in all of them and very large numbers of end customers. This is about 26 million customers. Andres and Annette spoke about the impact we make on society. We're handling Europe, 26 million customers as we speak, external servicing at this point in time. A big impact on society. And obviously, we are highly conscious of that and take it into account and we do the best for customers as well. Back into clients for a minute, we have highly diversified among industries, customer client base in Northern Europe. In Middle Europe, we are more concentrated in banking in Southern Europe because mainly this is how the industry developed. Now we do half of our business, our revenue at Intrum, about SEK 5 billion with 15 top clients and 2/3 of the revenue with about 50 clients, 5-0 clients. This is a significant advantage for Intrum going forward. Because this revenue in reality is recurring revenue is the -- what I would call it more commercially sticky type of revenue recurring, you can count on it year after year after year. Why? Because those clients have very, very high satisfaction scores -- satisfaction rates. They stay with us for very long. Average relationship in the top clientele is 15 years or more. The contract renewal rate when eventually they come to renewal, is 85%. Contract length going forward is over 3 years, is a base on which Intrum come and will build its revenue base going forward. Now these are things that we have directly from clients. They are locked us comments into our annual surveys. We do them -- and we lock them into sales force, our tool to manage sales. This is what they say about Intrum. I would like to give you a few seconds to read them. Consistently, our clients either when at the tenders we win them or when they give us feedback, month after month, year after year, they say pretty much the same thing. That's way consistently we have those high satisfaction, client satisfaction rates. They say, Intrum is a highly professional company, manages the relationship very well, hugely important for the clients, and they stated Intrum understands the industry I am in, they understand my business, and they add value to my business. How do those now positive market leader, clientele translate into sales. And importantly, how is the momentum, the commercial momentum and the sales momentum at the company at this point in time. On the left side, we show here the pipeline of deals we have, the metric that we use is the so-called annual contract value, meaning when I sign a contract, what's the revenue annually I expect from that contract. The pipeline that we have at this point in time is the largest in living memory, it is SEK 2.6 billion. This is, by the way, all we have in history since we implemented Salesforce. So from 2.2, 2.1, now 2.6 is the largest. But in the team I work with, we have people who have been with Intrum for 10 years or 15 years in commercial roles. They all stayed the same. It's the highest pipeline I ever remember in terms of contracts in the company. We are in a good place. We generate excellent, very strong pipeline. Once you have the pipeline, you need to convert the pipeline into actual contracts to sign them. Our signing rates for the last 3 years, '21, '22, '23 are in a very good place. And actually, with an improving trend broadly for any new tender, any new deal we are bidding for, we are winning 1 out of 2, statistically actually a bit more. If you take into account, clients that we have existing business with, the win rate totally is in the range of 56% at this point in time. It's very strong win rate. Why? Because they appreciate what Intrum does for them, the service we give them, the understanding of the business, understanding of the industry, their industry. Now, how do those convert eventually into annual contract value, i.e., total sales per year? This year, the conclusion is we expect the strongest performance in living memory. We expect this year annual contract value signed contracts in the range of SEK 1.4 billion. 2 years ago, we had half that SEK 0.7 billion. Once you signed the contracts, it takes some time for the volumes to come through, be implemented and mature. So you don't see them in most cases from day 1 to day 2. But it's a matter of quarters, but you see them. Last year, we had contracts in the range of 1.1%. Now we're at 1.4%. Importantly, we are managing now ever more precisely and intensively the churn in the business because naturally, you lose some clients. Last year, the net business after we lost SEK 400 million last year, a couple of main contracts, a couple of geographies, but after we lost SEK 400 million last year, the net business last year was SEK 0.7 billion. Business we wrote last year to be implemented this year and next year. The net business this year, we expect it to be at SEK 1.3 billion, sort of double what we wrote last year. In short, is very, very good momentum. Proof that our focus works in combination with the tremendous assets that we have in the markets, which is our people, our relationships with clients and so on. I will speak a bit more about it. And natural I think normal question to be asked when somebody sees that kind of momentum in sales is whether this is done as a trade-off and possibly to the detriment of margin. So a fair question is, when you do all this and you go from SEK 1.1 [ billion] to SEK 1.4 [ billion] and actually, we have not lost any business. In the reality, we have doubled the net business year-on-year, which happened to the margin of the new signings. The answer is it's actually higher than the stock margin. So here, I have the stock margin numbers that the market yourselves and the broader public has seen from our financial statements, we operated in Middle Europe last year in '22 at 16% service level margin -- service line margin. This year, we are writing the contracts -- we are writing at 26%, almost 10% higher, the new contracts. Last year, in Northern Europe, we had margins of 20%. Stock business reported this year, in Northern Europe, we are signing contracts and the new signings are at 35% and more. So in short, what we have done, is a lot more business, a lot more origination this year, a lot more business that we write this year at significantly higher margins. How is this miracle happening? And how sustainable it is? I believe that it is happening because we really utilize via the focus, the commercial assets that we have which is clients, our branding, our access in the industry and the reputation that we have in the market. Now a very fair question is, how sustainable that is? Our premise, our view and my strong belief is that it is very sustainable for 2 or 3 significant reasons. Reason number one. At the end of the day, with SEK 10 billion revenue that we have, we participate in a huge market. There is room to grow. The market is SEK 60 million, SEK 80 billion. And if you take the potential for in-sourced to go out is even higher. The second is that in a key client segment, which is banking, we have more and more of an advantage driven by the implementation of the NPL directive. Smaller competitors who offer servicing to banks, they need to get to the same standard of operation as we are, and we operate globally anyway, which makes them a bit less competitive. The third one is what we described here is that we have set up over the last couple of years, this year, really maturing and really firing on all cylinders, but we have set up a very strong commercial organization that can originate at scale and it does it. We have 170 salespeople across all markets. We have central coordination of those 170 people. We have sales tool, actually, we use Salesforce to coordinate our sales across the platform. We have set standards and margin rates at which this can be signed. Any deal that we signed today at Intrum needs to go through an assessment and we have to see that we believe that the margin goes above a given level we have set per market. Either it could be profitable enough, but obviously to remain competitive. We have sales tools and sales practices that we learn from each other. The combination of the above is what I described a strong sales organization. I believe we can and we will continue delivering excellent performance, commercial performance in the years to come. I have spoken about sales as the first part and the first driver for the growth of the business. The second one is client propositions. I will start describing briefly what we have today and what we do today and how much further we can expand and we can go on. The propositions we have in the market or if I call it, the proposition we have in the market for servicing is the broadest and deepest. No competitor, I believe, can do what we do at that scale, that width, that breadth and that depth. We cover from performing loans, not in all markets, but we cover from performing loans and not in all markets the same from performing loans to unlikely to pay loans. These are stage 2 loans that Andreas showed earlier, there is a huge universe in Europe, unlikely to pay, invoicing, digital collection, unsecured collection in all our markets actually being the leader. Secured collection, certainly the leader in the South, big participant elsewhere and real estate services. From that point on, how can development of client propositions help Intrum to grow in 2 ways. The first one is we would take and we will take offerings that we have -- existing offerings that we have in some of our markets where it makes sense expand them in other markets. I have here as an illustrative example, the unlikely to pay proposition, which means Stage 2 loans in reality and the secured collection proposition. In Southern Europe, we are genuine leaders in this kind of activity. We run between Italy and Greece securitized vehicles with state guarantees by the way, a very complex type of operation to run in the range of SEK 35 billion gross book volume, massive books, extremely high-quality expertise. Our expectation is as regulation is pushing banks around Europe via provisioning and overall pressure to deconsolidate, they will need solutions to start derecognizing assets. This is where our expertise and it is true deep expertise, will come very handy. We expect high demand and will be there to serve that demand. Same goes for secured -- same goes for unlikely to pay. Andres said earlier, that out of the 25 banks -- top 25 banks in Europe, 23 are clients of Intrum. Not all 23 have those propositions today. The simple intend is, we go and we talk to them and we have started talking to them to see how we can assist them and there is plenty of room to expand. The second one, as an illustrative example, type proposition is areas where today we know that we do not have necessarily surely not market's best-in-class proposition. The secured I said earlier, the same goes for real estate, by the way, the secured UTP, secured NPL -- sorry, UTP, secured NPL and real estate, truly, we have best-in-class propositions. Now it's another picture where we have propositions and segments that were not best-in-class. We know it. We acknowledge it, and I will tell you what we do about it. I have as examples here, digital collection and invoicing services. We do them in some markets today. We want to be best-in-class in them. This is where from a commercial perspective, Anette spoke earlier about how Ophelos for example, would be an important component for Intrum in the -- managing the cost of collection fundamentally and modernizing overall the operation. I will give you the commercial perspective, and it is the following. Today, in digital collection, we participate possibly in some tenders, not necessarily in all of them. There cases where clients have very high volume of claims typically unsecured, but very small amounts. The collection effort that has to go into it, has to be adjusted to what the potential return is, i.e., very small. You need tools, you need collection and general capability to service those kind of markets. We do them sort of thing today, but not optimally. The immediate effect with Ophelos coming into the picture is we'll start bidding for contracts and businesses and clients that so far, we have not been able to service to the level we would like to and win those contracts. But over and above, I can give you an example of a second market that we would untap. Today, there are major companies, telecoms, utilities across Europe that they have that kind of claims at a very early stage. Typically, they do not outsource to the like of those claims. They do them in-house. With an Ophelos, and I will speak about the collectors as well the invoicing capability, we would be able to go and start untapping those markets that today are not even outsourced, and we'll find the right commercial formula to untap the markets. Similarly, it goes for the invoicing services. Let me tell you a bit what they are in case that you don't have the top of your head, unless you have it. And the invoicing services second nature to you, so I don't think about them. But in case it is not the case, I'm a banker by training, by the way. myself [indiscernible] was in banking. So invoicing is new to me, but I think it's very exciting because what it does is the following. Major clients think of big telecom utility companies, what they do is they want to get away from the billing problem, produce invoices, send them to clients, get the payment, so they outsource and they are setting to outsource in particularly in the northern region, where we are now to outsource the invoicing. So they want to send you the data, the billing data and somebody, this somebody will be us now with that we have a collect, we take the data, we produce invoices. They go into an app, client sees, starts paying from the app. The huge percentage just pay, whatever it does not pay, and we get remunerated as Intrum for our services when we provide that service. What is not paid becomes delinquent account and naturally comes into our decision and collection engine, and we start collecting on it. Therefore, via both components and upgrading our capability. What we will do pretty quickly is start bidding for contracts we don't have today and start getting into client relationships even deeper, even better. those with a great degree actually of conservatism have been incorporated into the growth plan. Now the third element of doubling the profit from SEK 2 billion to SEK 4 billion. I spoke about sales, we have the momentum, client propositions, we certainly have the momentum. We just announced our investment in upgrading our capability. Third one is client profitability. I spoke when I spoke about sales about how you set standards and manage the mix of the contracts in a way to increase profitability on the new contracts. And actually, this is the new signings of the year that happened to be the record signings in living memory. But we have -- but this would be SEK 1 billion revenue next year, the year after. What about the other SEK 10 billion revenue that we already have? How do we optimize that SEK 1 billion revenue to make it more profitable? The stock. And the answer is, we work on what we have called client profitability tools. Every company wants client profitability tools. I have worked for many, we all wanted client profitability tools. But when we started in previous lives, you have issues to deal with, the data, the consistency, the methodology, the impact and so on and so forth. We have cracked those at Intrum at this point in time. We have developed tools, having clean data, developed consistent methodologies for measurement across markets and having found the right accounting ways to allocate all types of costs. We have tools implemented in a number of our markets, expect to almost all of our markets by the year-end that we take the 130 million actions that -- and interactions that Annette spoke about earlier, we allocated them into the accounts. We allocate into the accounts with consistent methodologies, other indirect costs, and we end up with profitability. Now there is a percentage in this customer -- client base or client bases, that is unprofitable. So what do you do then? What do we do then is we review the collection strategies because we have in the profitability tools, [ action per action], all the actions have done on the account. We review the profitability, we review the collection actions and strategies and we optimize them. Sometimes you find out that you better optimize your fixed costs as well. Rarely, you find out, but you do that is an issue of pricing with a client. So you need to have a fair commercial discussion with that client, so you can continue servicing the clients successfully. But the outcome is that slowly but surely out of the SEK 10 billion revenue, you start optimizing your revenues. Your profitability per client, granularly, specifically and with evidence. The SEK 2 billion profit that we do from that action only, next year, we should give us the actions we have planned to do. A win rate of boost in the profitability in the range of SEK 200 million to SEK 400 million. This is 10% to 20% profit increase from that specific action only. Combine this with what I said about the new contracts, is what we say, and it is our motto, more business with more clients in a more profitable way. Now the growth I said where it will come from. And Andres said in the morning, Michael will speak more about it, its 10% aggregate growth rate in our revenue. That's the expectation and double the profit in 3 years. When you break it down, I said where it will come from? It will come from the sales momentum we have seen, from the sales structure, we have discussed it. It will come from the new propositions and client account profitability, measurement and adjustment. Now how does it look revenue per geography -- revenue growth per geography? Firstly, we expect to have revenue growth in all our regions. And in the North, which is a very mature market and the South, we think that will be about 5%, most likely a little bit around it, maybe a few basis points below, but we expect a 5% growth rate in those markets. We expect more growth rate in the middle. Let me comment on the 3 geographies for a minute. The South, which we have a growth in the 3 years, so this is '22, this is '26. So we expect to grow in the 3 years. We have an extremely strong position in market share today. In Greece, we have pretty much 1/3 of the market, but the assets have been divided. There are 3 big services that have the assets. In Spain, after the Haya transaction, we are managing 210, let's say, more than 200,000 real estate assets most likely the biggest servicer in Europe, fully managing, including sales, maintenance, et cetera, of the assets. And in Italy, we already have big position, big carve-out done with 1 of the major banks Intesa and a fair amount, a very strong amount actually and market share of whatever new comes to the market. So the market position in those 3 is already extremely strong. The priority from that point is to maintain it. We think actually with specific actions that we have, mostly inorganic action -- sorry, mostly organic actions, organic actions we can achieve a 5% growth rate. In Northern Europe, we have the expectation of growth, the 5% annually, driven mostly by the new propositions, the new propositions of invoicing and digital servicing, digital collection as we call it, apply mostly in -- or immediately in that region. Then we have doubling but not from the very high base in view of the market sizes and the NPL sizes and the company size and the client sizes growth. This is from the middle, for us the middle is the major markets of the U.K., France, Germany, the Netherlands. We have done groundwork on them already. There is excellent regional management. Alberto Marone actually has taken over as the regional manager. We have senior and highly competent managing directors in all our markets. In the U.K., we have done the merger with Arrow and we have got a new team combined with the existing team, best-in-class, we believe. In France, we have a new Managing Director one year now, and we already see strong and important performance. In Germany, we have a very experienced team doing the transition from servicing as a [ captive ] servicer, Intrum's investments to bring a lot more out there commercially and doing a lot more third client third-party servicing. We have done the work with the team. We have propositions that are coming to those markets. Digital will be very relevant, Invoicing will be relevant in some of them, all the trends that we see are positive. They are in the right direction, and we believe in them. This is where our 15% is coming from. Now additionally, in Middle Europe, mostly in the U.K., but not only, Germany, we won a big contract as well, has a lot of BPO, business process outsourcing contracts to the market, already are out there and we're bidding for them. Already we have won one -- we won one last year, we are still implementing and therefore, we'll see the revenues ongoing. And we think there will be a lot more of those large material contracts in the U.K. market. Take all together, the green shoots in France, the sound business we already have in Switzerland, what we have done and will do in Germany, the U.K., I think, very well justifies, together with the management structure we have put in place justifies the expected growth. Now, the financials of the business, I talked a bit about them on a couple of occasions, Andres did as well. We're looking to get the SEK 10.6 billion, more than SEK 15 billion. This is a 10% annual growth rate. And the SEK 2 billion, actually out of the SEK 2.4 billion, SEK 2 billion is external, the SEK 2 billion external to become SEK 4 billion, the SEK 0.3 billion that is here, SEK 0.4 billion is internal. So double the external profit -- servicing profit and increased a 10% yearly growth in the next 3 years our servicing revenue. Now I have spoken to wrap it up and made the following argument. We start from a very strong position with recurring basis, happy clients. We can build further on this. Our sales momentum is very encouraging. We have made steps towards upgrading our proposition to the market. We announced digital and invoicing capabilities, that will come to the market with effect, I said. And lastly, very good work on profitability, but we'll see the results starting next year as well. That's it for me. Thank you for listening. And Emelie, if we have any kind questions, I'm happy to take them.

Can you please leave the button over. Thank you. I don't have invoicing on top of mind either. So I'm happy you're here to help out. I'd like to ask you first, you have the smallest market share in middle Europe, as you said, Germany, U.K., France. Why is that, this fierce competition?

It is smaller in terms comparative to what we have in Southern Europe, but it is still a substantive market share. So we are players in France, surely in Switzerland, in the U.K., we're now the #2 servicer and so on and so forth. So we are a player. Andres said we will become the leader. I think this is what we aspire here.

And Johan actually asked this question 2 hours ago, but since it's important, I'll take it again, what makes you confidence in hitting a 10% growth rate in external servicing revenues? Taking out acquisitions and currency effect, growth has been close to 0 over the last couple of years.

What I described, the sales momentum, the new propositions and the profitability work we are doing and the fact that we're not doing this in a vacuum. We are doing this with clients who like Intrum, trust Intrum, do more and more business with us.

And Rickard wants to know, can you explain -- please explain why margins on existing contracts in servicing is falling?

Driven by the cost base primarily, which is well known to the market. It has gone not the way we want it as a result of the one Intrum primarily. Andres has said, Michael will confirm -- reconfirm, we are doing well on the cost program, and this will stabilize.

Victoria wants to know what is the contract renewal rate for top 50 clients?

It's in the range of 80%. 80%, 90%, typically they are for the top 50.

And putting that into context, is that outstanding in the sector? Or is that good?

I think it's outstanding in any sector. It is a very, very high, there are not many -- I mean -- if you're BMW and I love BMW. You do not have contracts and orders for the next 10 years. You have much shorter. We are different. The top 2 or 3 contracts that we have actually were the big securitized vehicles that we are servicing, they have another 10 years to go. It is very, very stable type revenue.

Also going back.

You have to perform for clients day in day out. Don't get me wrong. You have to perform. But this is what we do for a living, and we continue performing.

You also said that 50% of your external revenues come from 15 clients, that sounds like quite a small group. Is that risky to be dependent on few?

I attempted to make the argument that actually, it is a positive because it means, at the end of the day, a rather low risk in reality in view of the high renewal rate, the high client satisfaction. The average length with us, which is typically 15 years or more and so on and so forth. It is a positive for Intrum. Think of it this way. You have to put some farmers deal with them. We use those pedestrian expressions in commercial activities, farmers, hunters and the likes. But you put some people who manage those accounts, but you do not have to chase a huge amount of contracts that you need a sales force 10x the size to go and chase them. And you need huge operational effort to go and implement them. This is the big advantage for the company.

On the slide of annual growth from 2022 to 2026. It showed for Northern and Southern Europe it showed 5% or less. You kind of alluded to it that it's not -- we're not talking 1%, we're talking closer to 5%?

Yes, we do.

Because when you see the difference between the growth you expect from Middle Europe, the impression could be that mainly all your growth is going -- within this business area is going to come from Middle Europe.

You've taken away my pointer.

Do You want it back?

Well, in absolute numbers, there's a lot of growth coming from this and this combined is pretty much similar to this or a bit less. So in terms of absolute numbers, let's say, a bit more than half would come from the middle for the good reasons that we said. The aggregate growth rates are the way we describe them and we show them. That all said, again, the size of that market, the size of the Stage 2 of that market, which is about 4x, 5x the size of Southern Europe. Andres showed it in his part. The work we have done in terms of putting a strong team together, the new propositions we are doing, we are comfortable about what we show the market.

In the beginning of your presentation, you showed that you estimate an addressable market of SEK 60 billion to SEK 80 billion. How do you reach that interval?

Public information, taking statements, financial statements of all sorts of competitors with our own adjusting and interpreting. That's why we have a range SEK 60 billion to SEK 80 billion. But let me say that which I think I mentioned probably in my presentation is that this is already outsourced business that we and our sector is managing. There is huge other parts that they do at early stages, our clients themselves for a number of reasons. With our new technology type of invoicing and with our new technology type of digital collecting, which is very easy low-touch kind of activity that can even be branded by the name of the client, we think that we can start unlocking well beyond the SEK 60 billion to SEK 80 billion revenues.

I think it's time to let you go, George, because you're going to be back during the Q&A as well. So thank you for now.

That's very kind. Thank you.

Let me take that from you. And that also kind of makes a very informative presentation about 1 of the parts of Intrum's business. The other one will be presented to you, should be a picture by Javier Aranguren, who's the Chief Investment Officer. You'll see him here instead.

Good afternoon, everyone. I'm Javier Aranguren, I'm the Chief Investment Officer at Intrum. I've been working at Intrum for the last 12 years already. All those years within the investment area, which I'm very proud to have actually helped built all the way down from doing this in markets through different roles and then becoming the CIO a bit more than 3 years ago. And hopefully, if Andres wants I don't know where he is, but hopefully, for many more years to come. I hope you have enjoyed the videos that we have shown. We run out of those. So you will have to bear this with me in my presentation. I think -- let's recap a bit. Andres described at the beginning that our business is a bit simple. So we have servicing, which I think George described great, and I have always the issue to go after George. But then we have the investing part. And the investing part is also simple. So what we do is we buy nonperforming loan portfolios from our clients. So our clients, we collect on our clients' NPL as in the servicing at some point as part of their balance sheet management, they end up selling those portfolios. And that is when Intrum buys those portfolios. When Intrum buys those portfolios, actually, we become a client also to our servicing platform. So I'm also a client to George. There's a key message, I want to leave with you today, and that is that Intrum investment business is moving towards a capital-light model. And what does that mean? Well, first of all, it means that our full focus will be on extracting value from our existing book, which is, by the way, quite large. We'll do that. We'll see a bit later by maintaining the high collection performance that actually we have enjoyed the last few years. And on top of that, as Andres mentioned in his presentation, we're going to also explore some other significant actions like some potential market exits and some tactical actions on our back book. At the same time, capital light does not mean that we can actually stop using our investment capabilities, our investment platform. On the contrary, I would say. What we want is actually leverage our pipeline and industrial collection capabilities to do more in the investment space. And how can we do that? You could say, I mean, how can we keep on using our investment platform at the same time, become more capital light? Well, the answer is that we're going to transform into an asset manager. And we will use third-party capital to grow our total assets under management, while at the same time, Intrum book value actually would reduce. But let's start actually by looking how is the investment business today. Today, Intrum is the largest industrial investment franchise across Europe. We have been buying portfolios for a bit more than 30 years now. And over all those years, we have built this experience, and we have built a very large, very granular and actually very diversified business. We have SEK 41 billion of book value, which are coming from actually SEK 86 billion of ERCs or Estimated Remaining Collections. And that's across 20,000 different portfolios that we have acquired over this very long period of time. At the same time, we collect more than SEK 1 billion collections every month, and those are coming actually from 800,000 payments from our customers. Again, all those large figures, what they speak, it's about our granularity of our book. which is actually a key driver of the stability and the good performance that we have had in our investment business as we will see a bit later. But I mean, not only we have built a quite large and grown our portfolio is actually quite well diversified. If you look at the map, where you see where our assets are sitting, you can see that actually 31% of our ERCs are in Middle Europe. 29% are in Southern Europe, 24% are in Northern Europe and only 15% are in the Tactical Markets. That means that we have -- none of our franchise markets actually have more than 1/3 of our portfolio, which again speaks about the diversification of our book. Finally, I think in terms of new investments, we invest roughly a bit more than SEK 7.5 billion a year for the last few years. And we do that, as Andres mentioned, in more than 200 deals every year. That means that actually on average, the average deal size that we do and that we invest on is actually not very large. It's actually rather small. And actually, when you look at the number of large deals that we do on a yearly basis, that's rather small. That, again, supports our granularity, but also it creates further opportunities to grow if we decide to actually to go and target those larger investments. I think this is the page that actually Andres likes. Not only we have built a quite large investment business, but actually, I'm proud that our performance has been very, very strong even through very challenging times. In the graph, you can see the blue area, which is the size of our investment business, measured in terms of gross collections, so how much we collect on our portfolios on a yearly basis. You can see in 2004, we had a bit less than SEK 1 billion of collections on a yearly basis that went all the way up to close to SEK 14 billion at the end of Q2 2023. That means a 17x growth in our investment business. At the same time, our performance, which is this line that you can see there, and the performance is measuring how much we collect in our portfolios versus the original forecast when we buy those, has been on the same period, 106%. That means that we have actually done 6% better than what we underwrote those portfolios. And actually, in the last year, has been 110%. And even more importantly, even through challenging time, you see the COVID pandemic, you see some global financial crisis, the lowest point that our performance went in any quarter was 98%. And actually with very fast recovery afterwards. That again speaks about the resilience of our investing book, which is mainly coming from the granularity and actually the diversification that we show in the previous page. Now all this large investment book, which is again built on many, many portfolios, very diversified, will deliver our really strong cash flows for the years to come. As I said before, we have SEK 86 billion of Estimated Remaining Collections in our portfolios. As some of you may think this is a very large amount. Are you comfortable delivering that? I think, yes, based on the previous page, definitely. I mean our performance has been really, really strong in the past few years. But even if you don't believe me, I think when you put that number into context as well, that gives also a bit more confidence, we do have 24 million customers in our portfolios. And we have SEK 740 billion balances to collect on. That means that we only have to collect 11% of the balances that we have in our customers to meet our ERCs. That, I think, provides also -- if you think about it, a lot of potential for upside. If we look at the performance that we have in recent years and think about it a little bit. I mean, if you take that 11% and you increase it a little bit, let's say, let's move it to 12%. It's only 1% increase. That means that our ERCs will go up for almost 9%. And then in terms of cash flows, our book will expect to deliver not assuming any type of over-performance in the next 3 years, SEK 31 billion of gross collections, which will turn into SEK 25 billion when we take out actually all the servicing costs. Those SEK 25 billion then can be used by Michael, and I think that he will show you later how he is planning to use that, but that is my commitment to deliver that amount in the next 3 years, the same way by the way that we have done on the previous ones. We've talked already a bit about our investing platform at Intrum, but I think there is also a large growth opportunity in the future of this business. Our platform today reaches 98% of the European NPL stock and Stage-2 loans across Europe. That is more than EUR 3 trillion of loans. That is a massive amount, which means basically, there is a huge opportunity to keep growing in this business because our clients will continue to dispose portfolios because selling portfolio is actually part of their strategy in the way they manage their balance sheet. So this opportunity will still be there. And this large number needs to actually -- look at it combined with our strong origination capabilities. We have more actually around 100 investment professionals fully dedicated to our investment business across 20 different countries in Europe, but very important as well, they are supported by our servicing units and all the client relationships that actually George described earlier. As a result, in the last couple of years, we have on average around EUR 8 billion to EUR 10 billion worth of potential investments. Part of that, obviously, we select the type of portfolios that we want to invest on. But because of our extensive data, our underwriting capabilities, we are able to win 38% of all the bids that we put. That's actually 600 deals that we actually bid on every year. That's a number which is very difficult to achieve. And the reason if you're asking why we have such a high number, there are a couple of main reasons. One is, as Andres mentioned, we actually manage a large part of the portfolio that we end up buying later on. So that means that we are very well positioned to have that number. I think in summary of these 2 factors on a amazing potential business opportunity combined with our origination capabilities actually means that there is also a big future potential for this business going forward. So -- but how do we move forward, right? So as we said at the beginning, we are actually moving to a capital light, right? But at the same time, I'm telling you how amazing is our investment business, the potential for growth of our business. So how do we combine all that. Well, the answer, as I said later, we're actually moving and pivoting towards an asset manager. I think our track record, again, that I showed, we have a very solid underwriting. We have our strong portfolio management capabilities with specialized teams, model data and everything. Actually, we have a quite large capacity. As I said before, we have 600 deals that we analyze every year and 20,000 different portfolios with data. I think that is actually the foundation of our underwriting and our performance, the data, and that is impossible to replicate. If you think about our value proposition, there's no one in the market that can actually provide that value proposition. And that is the key difference. When you see the bubbles that Andres showed and the extensive data or database and everything, that's why this granular pipeline and the performance is so difficult to replicate in the market. At the end of the day, all that means that we truly believe we do have a very strong value proposition to attract third-party capital to build this asset management. We will use our investing capabilities, our pipeline -- proprietary pipeline will provide exclusivity to this partner, to all deals, all jurisdictions and we'll deliver the strong track record that we have actually delivered on our own investments. And at the end of the day, everything will be serviced by the largest credit servicing business in Europe, Intrum. Now again, I said this before, I think this is a unique opportunity to combine our expertise with financial investors. The vast majority of the NPLs that actually were traded in the last 7 years or so were bought by financial investors. The only exception to that list and the top part of the list is Intrum. That means that, first of all, I mean, we are already competing with these financial investors in this space, but also more importantly, we're actually ideally positioned to provide those very same services we're doing for ourselves to these financial investors or to new ones. As we have seen before, NPL market will continue to be there, the clients will continue to dispose portfolios and financial investors will be very keen on actually keep buying portfolios, and they will demand the value proposition that Intrum brings to the table. Granular pipeline, sourcing capabilities, collection industry expertise and also the extensive data set that we have for underwriting and actually collecting our portfolios. So all this means that we will move from today. Today, basically, we do stand-alone investments. All of our investments are funded 100% by Intrum. Today, we primarily invest on granular consumer unsecured loans. Today, we do on average SEK 7 billion, SEK 7.5 billion of investment per annum. And as a result of that, we have actually built a SEK 41 billion of book value to tomorrow. Tomorrow, we'll become an asset manager and we'll have a capital partnership. With that, we'll be able to actually target more deals. And the idea is that we will actually target more than SEK 10 billion of new investments per annum, which will be mostly funded by third-party capital. The business will continue to be primarily granular consumer unsecured loans, but we'll be able to expand into different new pool of assets, for example, we'll expand further into consumer secure or some other assets that are actually being managed today by our servicing platforms. We will also create a new income stream, which is going to come from fees based on this asset management model. And as a result, we'll have an increased total asset under management, which will imply more business for Intrum also on the servicing side, while the Intrum balance sheet exposure and Intrum book value will reduce to the SEK 30 billion that Andres mentioned earlier this afternoon. So to conclude my part and as a final summary, what will be the main drivers of this Capital Light strategy. I think on one hand, something that is fully under our control, which is to extract the value from our existing book and reduced it to SEK 30 billion. We'll do that, and I will commit to deliver those SEK 25 billion net collections in the next few years. But again, that's something we do day to day today. And on top of that, we're going to explore some other additional actions like some market exits and some tactical actions on our back book. Then the second leg will be to actually leverage our origination and management capabilities providing access to our pipeline, our workout capabilities, our collection expertise to build this attractive asset management proposition to attract third-party capital. With that, I think we'll have a larger business to manage, a larger business to service but with a more limited use of our balance sheet. I think with that, I'm done, Emelie.

For now.

Do you have any easy questions for me?

Yes, we have a lot about Italy. As you may. Well, I'm going to merge some questions together because they're quite similar. Can you please elaborate on both the recent proposed NPL legislation in Italy and its potential implications to Intrum? How likely do you think that it is -- that it will become reality?

You start with easy ones. I mean, it's true. There's been some news regarding the potential new regulation, I mean, the customers could be actually buying some of the bad loans back at the premium. I think that, again, that regulation has been discussed already in the past a few times that has never been approved by the Italian parliament. There was I think another effort this summer and it has been paused. And actually, from the Prime Minister of Italy, I think Alberto is here, he can actually correct me if I am wrong, released a statement last week by which they said basically that this is on hold and any further developments will be discussed with the private sector, including Intrum. So we are being part of those discussions, and I'm actually confident that those discussions will end up well for us.

Follow-up, Well, you have to write down Italian NPL portfolio values?

No. That's not the idea. I think that we have the correct value there.

Will you have to write down Italian subsidiary, goodwills?

Not at this stage, no.

Are you planning to exit from Italy after the negative adjustments that you had this fall?

No, not at all. Actually, I think the Italian business, it's something that actually we want to grow like many others. I think that, I'm sure that you have a follow-up question on the Italian write-down last autumn. I think, again, we have and I think -- Andres has actually answered that many times. As part of our standard process at Intrum, we do have a revaluation process every quarter, where we actually, we look at the book value of our portfolios, and we assess that but value is correct nor not. As part of that process, in the last autumn, we did a revaluation in one of our portfolios in Italy, which was quite large. But it was a one-off thing. I think since then, we have gone through almost a year of different revaluations and there's not been any meaningful changes in our book value since then. So we are -- I'm actually quite confident with the book value that we have today.

Are you comfortable now given that you have had some time to operate within this environment with higher interest rates and high inflation? Do you feel like you have the data that you need to be confident about the value going forward?

Yes. I mean the environment, of course, is challenging, which, again, that may create certain more opportunities when it comes to new investments and potentially higher pipeline. But at the same time, it's also a more challenging environment to collect on. However, I'm confident if you see actually the page we described with -- we've been through a different crisis in our last 20 years, and actually, our performance has been very, very resilient. So I'm also very confident. And when you look at the performance, the last year has been 110%. So I'm confident that we're going to have -- still have a good level of performance going forward.

And parallel follow-up. Similarly, are there other potential regulatory changes in other geographies? Sweden, for example. Any changes that may impact the competition from public debt collection agencies?

Well, I mean changes in regulation is something that we continue to monitor, given in the sector we are in. I'm not aware of any potential changes that may affect that, but I may not be fully up to date on that.

And Tom also know, given most of the industry's cutting investments, what gives you confidence that you will be able to execute back book sales at or above book value? Could you give some indication as to the expected launch timing of the various sales process?

So as we have said, I mean, back book sales or part of a back book sale is something that we are exploring. I cannot give any more details on that. I think we have already had certain initial discussions with potential partners, which is not only for the back book deal, but also to set up this capital partnership. All the indications we're getting until now is that our book values are fair, and I don't expect any issues there. But obviously, I mean, there's not much permission I can give you at this stage.

And I feel like Nicola's question is a good follow-up on that. Do you think it will be easy to get third-party capital investors aboard? And what kind of investors do you think will be interested in these kind of opportunities? And what kind of returns would you promise to that?

Listen, I don't know if it's going to be easy or not. What I'm confident is that we actually have a very strong value proposition to offer.

Yes. So this -- it also sounds to me like these investors you're looking for, like you're saying partnership rather than you're going on fundraising, if you find.

We have had so far very selective discussion with potential partners. -- and we have received many other inbound interest on this partnership actually. But we have been very selective in the -- with the number of names of people that we have actually discussed to. So far, all the indications that we're getting is that actually they see strongly the value proposition that we are delivering and they're more than happy to make business with us. But this is going to be a journey. I mean this is not something that is going to be done the next day. This is not something, as Andres said to me, but it's not a trade. I mean we're looking for a partner. It's going to take some time. It's going to be journey.

A partner or partners?

I think the first step, to be honest, is that we're going to set up most likely a capital partnership with a partner, where we can actually probably might be a partner that is familiar with NPL business that is familiar with Intrum, where we can build this capital partnership. Long term, the idea is to become an asset manager. We probably have more partners, more access to capital. But I think the first stage, most likely will be our capital partnership.

I'll let you off the hook for now Javier. And I'm thinking what could be more suitable, yes, please, excuse me, that pool. What could be more suitable after the investing part then to follow up with the numbers guy -- who has a picture.

Thank you, Emil. And I'm really happy that Javier got all the tough questions. So it would be good to me, okay. So my name is Michael. I've had the privilege of being the Chief Financial Officer here at Interim for about 3 years. And I know it's been 3 hours and all you've been waiting for is hearing about how all of this translates into the numbers. But please bear with me for another 1 or 2 minutes. Because I think it's equally important to kind of go a little bit down memory lane and think about how we got to where we are today because that's really going to contrast what we do going forward. So if I go to my first slide, how we got to where we are today. And for that, I need to go back to the last Capital Markets Day in late 2020. And if I had to identify the sort of the key element of the story we talked about then it would be to grow cash EBITDA. That was sort of the foundation of everything we talked about. So what did we do? So if you look at the chart on the left, we did grow cash EBITDA. We grew it by 16%. But when we then look at the building blocks that we laid out at the time, 3 of them, for those of you who followed us then, was normalization, it was transformation, and there was business growth. It's equally important to analyze how we did do on those, right, because that was really underpinning that trajectory. Well, normalization or coming out of COVID going back to where we used to be and maybe a little bit beyond, we didn't fully deliver on that. That didn't fully happen. It happened in the South. But when we look at the other geographies, we had less inflows, and we had some margin challenges. Now obviously, the inflows have really turned around in the last 2 to 3 quarters, but that normalization didn't fully happen. When we look at transformation, second building block, important building block. Well, again, we did not fully deliver on that. We had some gains limited gains, but they were very much overshadowed by increases in costs and overheads also due to an overly complex operating model, which Andres has talked about and which we have already addressed. So we have the foundation going forward. And lastly, business growth. well, I would call it patchy or uneven, but I think that sort of overshadows a little bit what the truth is, which is we grew the book value of our investment. So the business growth very much came from the capital-heavy investing side of the business. And because we grew the book value of our investments by 17%, we also expanded our net debt and our leverage went up. So where does that leave us today? What's the foundation going forward? Because obviously, we haven't delivered on everything we set out to do. Well, we have the largest servicing business in Europe. And we have a very large valuable back book. And I think that's 2 elements that are very important in the story going forward. So what are the building blocks of the story going forward? It's profitable growth in servicing, focusing on that core servicing business that we have that we want to further emphasize and build on in investing, it's all about extracting value, and it's about a potential additional upside from the pivot to capital-light and then obviously, that comes together in the balance sheet. And the story around the balance sheet is a one of derisking and deleveraging. What I've done on this page is bring a little bit together what you've heard from all the speakers today, what you've heard from Annette, what you've heard from George and what you've heard from Javier. So if we look at our businesses and we start with servicing, -- in servicing, we want to grow. We want to grow profitably. So that means we are client-centric. We work with our clients we find new clients, we expand the relationship with existing clients, but we're also focused. We take down our geographic footprint to where we can really make a difference where we have the right foundation. And that's our franchise market essentially. And the drivers for that are really commercial focused commercial excellence and the value chain expansion that George has talked about. That's the growth element. Then there's a margin element. There's a tactical element to the margin, which is the cost program that we've talked about that we're executing on. And there's a medium to longer-term element that we're phasing in, which very much ties into the operational building and transformation and work and the use of technology that Annette has spoken about. Investing, very different story. -- investing, it's really about taking that back book, extracting value from that back book, strictly limiting new investments and having the upside potential from the pivot to capital light from the asset management model. How does that come together into derisking and deleveraging. Well, we're going to reduce the book value of our investments. We're going to use the cash flow. It's a highly cash-generative business. You've heard me say this very often, but we're going to use that cash flow to very much address our debt and then that gives us the opportunity once we've delevered to resume remunerating our shareholders as well by paying a dividend. So when I translate this into assumptions that underpin our financial trajectory. And again, going a little bit back to what George says is really a story of growth in servicing, half of it, about half of it comes from Middle Europe, but all the areas contribute. In terms of the margin, the tactical short-term measure is really our cost program. It's a cost program, as we said in Q2 of more than SEK 800 million. We're executing on it. And most of that will be achieved on a run rate basis by the end of this year and then come into the actual accounting numbers throughout the course of next year. On top of that, we have all the operational efficiency and technology journey measures that further underpin that margin trajectory and allow us to realize operating leverage and get bottom line out of the revenue growth that George has spoken about. On the investing side, we are planning to unwind our back book at equal or greater than the estimated remaining collections. And remember, we have a history of good over performance. We're planning to limit new investments and new investments from our own balance sheet, our own capital to around about SEK 2 billion a year and that's really reflective of volumes that are contractually locked in or volumes that really are interlinked and support the servicing business. And we've assumed no upside from asset management in the financial trajectory that I'm going to get into. Now in terms of accelerating the deleveraging, generating liquidity, we're also looking at selling some of the back book and that can basically take 2 forms. On the one hand, we've talked about this, we're looking at exiting 3 markets: Hungary, Czech Republic and Slovakia. We're exploring that at the moment. These are essentially investment markets only. And we're also looking at adding some back book on top of that. And as an assumption for our trajectory as a basis, we've assumed proceeds of around about SEK 6 billion and a sale at roundabout book value. So when I combine all of this, what does that get us to? It's profitable growth in servicing, value extraction and investing to derisk and deleverage. Now you're going to ask me what does that mean in terms of numbers? I'll get there. I'll start with investing. So you've heard 10% CAGR service sorry, servicing. 10% CAGR. We go from SEK 10.6 billion to SEK 15 billion. That's a contrast to what we've done in the past. In the past, we've delivered about 4%. If I strip out FX, it's around about 3%. So what is different? Well, we have a head of servicing, and we're really focusing on that business, and we don't have the alternative to deploy cheap capital into assets. So it's really a question of focus and we have the right foundation and the right tools and elements outlined by George to really deliver that trajectory. Now obviously, we want to have profitable growth. Which takes me to the margin. And there, we want to go from around about 18% EBIT adjusted margin for the total servicing business to more than 25%. Now this is a new metric. And we're going to talk more about this and introduce it also in the context of our updated disclosure, which we're going to bring with later this year with the Q3 release. But to just give you a sense of what goes into this and how we've constructed this for transparency is we take all the revenues and servicing, so external and internal revenues, and we deduct all the relevant costs, which is to say the direct costs, the indirect costs and the overheads that are related to servicing. And that gives us a true underlying view on the profitability of that business. And we want to increase that by more than 7 percentage points based on the actions that and Annette has outlined and obviously, the commercial focus on targets that George is setting in his area. In absolute numbers, that means our servicing adjusted EBIT goes to around about SEK 2.4 billion today. to more than SEK 4 billion at the end of 2026. And that, if you look at the CAGRs between revenues and EBIT, really highlights the operating leverage that we are wanting to -- that we're working on unlocking, very different story for investing. So in investing, just to recall what I just said, we're extracting value, which means that from a P&L perspective, we really have a shrinking base, which means cash revenues go down to around about SEK 10 billion, investing cash EBITDA goes down to around about SEK 8 billion, and we have limited capital invested around about $2 billion per annum. But what's not on the page, but what comes out in aggregate, when we look at the balance sheet, this is really unlocking cash. It's generating very significant amount of cash that we can direct to deleveraging. So what happens when we put these 2 businesses together and look at the group as a whole. Well, we have one business servicing that's growing. We have a second business investing that's shrinking. We put it together. We have a relatively stable trajectory going forward. So in terms of revenues and in terms of EBITDA, I would expect them to be relatively flat over the coming 3 years. But I think there's 2 very important facts in this page. And for me, they are that when we look at the revenues and implicitly then also the earnings, the quality of those changes. And it changes because, as of today, the contribution from servicing is around about 43%. In 2026, based on this trajectory, it will be 60%. So in terms of having a higher contribution from high-value recurring fee-based revenue stream, we go from a very more investment focused model to a very much servicing led and focused model. And on top of that, that's the second element that's very important in this page, we generate SEK 16 billion or more than SEK 16 billion of discretionary cash. Discretionary cash is cash that we can use to reduce debt. Now what does the SEK 16 billion include? It includes what we generate out of our operations. It's net of expected taxes, it's net of expected interest, but it does not include the proceeds from selling some of our back book. And that takes me to the next page because there, we bring it together in terms of the balance sheet in terms of what this means for derisking and deleveraging. And top of the page, first chart is net debt. I would call that an absolute measure of risk, and we take that from just under SEK 60 billion to round about SEK 40 billion by the end of 2026. And that shows how we use that cash generation to really bring that absolute level of leverage down. Now in terms of deleverage ratio, we're bringing absolute leverage down, but we're also growing our servicing business, growing the profitability of our service business, which means that we have a gradual, sustained deleveraging trajectory. And we go to around 4x by the end of 2024 to 3.5x by 2025 and to less than 3.5x by the end of 2026. At the same time, we obviously bring the book value of our investments down. Now what I haven't put on this page but what's implied in our action is that obviously changes our funding and liquidity needs quite substantially. So where in the past, I would say, on average, we had a funding need of around about SEK 1 billion or more per annum. Because of this, going forward, that decreases to around about SEK 500 million or less. Having said that, Andres mentioned it before, if we direct everything against our upcoming maturities we do not have to go to market, we can cover the maturities out to the end of 2025. It's not our base case, but we can do it if we choose to do so. Now in terms of the financial trajectory, it's really, as I said before, gross servicing, it's extract value, generate cash and derisk and deleverage. And in a way, because I'm the CFO when I talk about what are the upsides to this. I also have to talk about what are the risks, right? Start with the upside there. One upside is asset management. So successfully executing the pivot to asset management that Andres and Javier have talked about, that would imply that we invest more in aggregate, but less from our own balance sheet, significantly less that we've invested in the past. So we grow the overall pool of assets that we service, which means it helps to boost our external servicing revenues growth further and it also generates additional fee income as Javier and Andres have illustrated. That's not included in the baseline trajectory. That's an upside, and we'll talk more about it when we're in place and can give you an informed view. Another upside is our investment in technology. So here, we have included the costs, but we've only included very limited benefits. And as we execute and everything that Annette has laid out, I believe there is more potential, but we need to get everything on board. We need to execute and we need to unlock it over time. Another upside, financing costs. So in our refinancings that we've assumed for this trajectory, we have assumed current market rates. Obviously, we would hope that as we derisk and delever that's recognized and then that could create a further upside. Back book disposals, we've assumed we lose the servicing, but obviously retaining any servicing, which I would think likely would give us a small upside as well. Now moving over to risk. I think environment and regulation, we've not assumed any material adverse changes. And we've assumed an FX rate that's consistent with the rates observed at the end of June of this year. And that takes me to execution. And execution is important. It's really about getting our head down, putting our head down delivering on what Annette, on what George and what Javier have laid out because at the end of the day, we have the foundation. We have all the ingredients but it's up to us to actually step by step, working on this day by day, deliver on it and then translate it into the financial trajectory, as I've just talked about. And financial trajectory is, I think, is a good buzzword to take me to my final slide, which is our financial targets. So going back to what I said before, we have a business that's growing, servicing. And we have a business that's shrinking, investing, and we need to reflect that into our financial targets. So if I start with servicing, I think demand for there is really profitable growth, and that's what's reflected in our targets. Growth, growing external servicing revenues with a 10% CAGR, so going from SEK 10.6 billion at present to round about SEK 15 billion by the end of 2026, is really based on executing on commercial excellence. It's based on what George has talked about. In terms of doing that profitably, profitable growth, it's really based on expanding that margin on implementing the measures that Annette has talked about, implementing the performance and profitability management that George has talked about. So we want to take that margin from around about 18% today to more than 25% at the end of 2026. That takes us to investing. And there, as I said, it's about value extraction. And value extraction, a proxy for that is balance sheet intensity. So we want to take the book value of investing of our investment portfolio from currently SEK 41 billion to round about SEK 30 billion. And that then comes together in the derisking and deleveraging part of our priorities. So our leverage ratio target is 3.5x by the end of 2025. And that would then also be a catalyst to resuming payment of dividends. Now if I had to put all of what I've just said into one sentence, then it's really that our priorities are to profitably grow servicing extract value from investing and to derisk and delever. And I think with that, I want to hand it over to Andres for some concluding remarks.

Thank you very much, Michael. That's great. So I hope what's come across here is the sincere belief in the direction that we're going. Every time I see those videos, even though I've seen them a lot, I get motivated, listening to the story again today. I truly believe that we have the right team with a plan that's ambitious, but achievable, and also considers what is the optimal risk-adjusted path for our shareholders is realistic and looks at the risks. So what have you heard today? Near term, we're going to reduce risk. We're going to dedicate all our cash flow to reducing leverage, and we're going to derisk. At the same time, we're still going to be building the business and capitalizing on the momentum. We're going to grow profit. We're going to capitalize on the servicing momentum that George described so well, continue that, grow that, do more business with more clients, more profitably, improve our value proposition. We're going to create a leading asset manager. We have the foundation for it. That's something that's still to be more precisely defined going forward, but it's something we're definitely pursuing. And part of profit is not just the revenue side. It's also what Annette talked about, which is becoming more effective, becoming more technological, becoming more cost effective, cost efficient. But long term, we do this in the same way. We become operationally excellent through tech, through getting the right people in the right places, working together with a common goal, client focus. There is nothing more powerful than investing in the client relationship and seeing it rewarded with business. It's worth repeating. We win 50% of new business. When we go to an existing client and ask them to do a new piece of business with us either the same thing in a different market, either upsell or cross-sell or something more than 50% of the time, they say, yes, getting more clients, as George is doing, getting into the funnel means we increase that recurring, sticky revenue base, which is ultimately very good for us and our shareholders long term. Client centricity, capital light. Over the near term, we have a wonderful big back book that we can extract cash from that flexibility is what allows us to delever rapidly, but ultimately long-term pivot to a capital-light model. And concluding today, tomorrow, I love these slides. Today, we're a traditional large-scale debt collector in 20 markets. Tomorrow, we want to be a debt resolution platform that's tech-driven. Today, we're 100% debt funded pipeline investor. Tomorrow, we want to be a large-scale asset manager dealing in granular credit assets funded primarily by third-party capital across all of Europe. What does this all mean? Higher quality earnings. More earnings, higher quality earnings, greater recurring nature to our earnings, we're delivering, and we're going to deliver. So with that, I think we're going to have a group Q&A, right, Emelie?

Hopefully.

So I asked that all my partners come up to the stage. And now you guys are also going to have an ability to grill us in the room as well as I'm sure there's a lot of questions from the, I think, 600 to 700 people who were watching, right? Anna? Yes, almost 700 people are watching on the live feed.

They're pouring in to my iPad. So yes. So we'll see how much we're actually going to cover. But for you in the room, if you don't want to submit via the QR code, you can raise your hand. It's a fairly big room. So we ask you to stand up and wait for the microphone so everyone can hear your question. And while you gather your thoughts together, Andres, is this interim 2.0, 3.0?

That's a good question. Well, we've been doing this for 100 years. So I don't know what dot 0 it is.

100.0?

But the whole point of it is that we'll have a 4.0, 5.0, 6.0, If you want to start with 1.0 now, or 2.0 now. We need to continually develop. We've been doing this for a long time. What I love is the fact when I look at my 4 partners, 2 are new in their seat, and 1 is completely doing his business in a different fashion going forward. That, to me, is putting people talented people in the right seat and having the right plan. In my opinion, I'm incredibly confident of what we laid out today. And I'm incredibly proud of what the company does.

Do I see any hands in the room? Yes, we have one.

In the middle out there.

Thanks for all the presentations today. My name is Rickard Strand from Nordea Equity Research. I would just like to ask you regarding the more capital-light model. There are a few of your peers out there. They have similar plans. I was just wondering if you have taken into consideration the increased competition as more debt collectors try to get more capital efficient.

I'm sure they have -- can you hear me? Okay. I'm sure they have similar plans, but as I said, I doubt they have the same value proposition. I think, again, as I described before, the value proposition of the granular pipeline, our sourcing capabilities and the right capabilities and the track record that we have delivered that is unique. That it is impossible to replicate. So even if they move towards these capital light, which I understand why they want to do it, I truly believe that we have a value proposition, which is invitable. And actually, we have had initial discussion with potential partners and that actually support that assessment.

I'm sure one of the competitors you're talking about is Arrow. It's a very well-known transition from effectively someone who looked very much like us a few years ago to effectively a credit manager. They're getting out of consumer unsecured. They're getting out of servicing. They don't have the integrated proposition that we have integrated business model that we have. And as Javier correctly said, they don't have that proprietary access to this granular assets. They don't have the 18-year track record of providing the return, which is the value proposition that the third-party investors that Javier just talked about are very interested in.

[indiscernible] right?

We have as was mentioned before, had quite a bit of inbound on this topic. And there are situations where people hear about competitors, et cetera, they reach out to advisers. And what they usually hear is, listen, if you want to do this and you want to do it right, you have to come to Intrum because nobody has the foundation that we have, as Javier has laid out.

But even if you don't believe us, which you may don't believe us, I mean, at the end of the day, as Michael mentioned, we are not adding that into our trajectory. -- if we manage to deliver that, which I truly believe we're going to do it, that will be on top.

Do you want to follow up?

Yes. And also more specifically on the service side, I was thinking that there's going to be a crowd there as well.

What do you have in mind? You mean in terms of competition?

Yes, exactly.

I think, look, a combination of regulation and the economics of the industry is getting many players out of the way. We do know that a number of participants in this market included, by the way, they are loss-making or they are very marginally profitable. They do not have sustainable business models. Intrum has a sustainable business model. We believe in the profitability we have shown, we can deliver it, and we have a sustainable advantage going forward. footprint, client relationships, ability to originate ability to continue delivering good results for clients, I remind you that we are in panels in many occasions with our competitors. Pretty much we win all the time. That's why we have the relationships and we keep having the clients, et cetera, et cetera, et cetera. So we think it will be less and less crowded for all the above reasons, we will fare very well.

Just let the microphone passed the gentleman in the middle.

This is Stefan Erik Andersson from [ Prata Management ]. I was wondering if you can shed some light on the Ophelos acquisition? Do you have any -- are you able to shed any light on the cost or the price for that? And then on a follow-up, is it going to involve a lot of redoing from the IT infrastructure? Is it more of an overlay. So that was both an operational and the cost.

And I'll address the M&A element of it and the acquisition element. I'll ask Annette to address the more integration challenge and operational challenges and how it changes our landscape and our trajectory on the operational front. But I'll take a small step back and just say, remember the criteria I said for M&A. Everything says it has to build our business, particularly on the client side or make us very efficient. This does both. And everything has to fit within our long-term deleveraging trajectory, which -- this is included, the purchase price that I'm about to tell you is included in these figures. But this one and also eCollect, which is actually a very important recent acquisition that George talked about, invoice services. We looked at the specifics of the nature of the transaction. We -- in each case, bought 100% to be clear. And that's used the word invested in. We did, but we invested in 100% in partnership with the founders, so there was a structure where we paid something upfront mostly to take out long non-long-term investors and isolate a relationship where we're partnering with the founders. And in Ophelos case, we are paying a little bit under SEK 30 million or so upfront and then another SEK 30 million or so over the next 3 years, a big part of which is KPI dependent. On eCollect, we paid about [ SEK 65 million ] and we are going to have a payment in 2026. Per will keep me honest here, somewhere between SEK 10 million or SEK 15 million to SEK 20 million, I believe it is, that is also back-ended and also very KPI dependent. So we added the additional thing of we wanted to isolate our partnership with the founders. We wanted to create a deferred component and a contingent component to the consideration. And -- but we own 100% of them, which is the transition over to Annette so that we can keep them separate, but also integrate them into our operations from a day-to-day perspective. And Annette, do you want to talk about how particularly Ophelos because it's a little bit more operational, how that's going to change our tech road map.

Just because there's a lot of questions about Ophelos. And the tech journey, as you're embarking upon, One question is about what stage of integration of Ophelos is with interim, where does it stand today? And from there...

Okay. Let's start then from that. You have seen a small trailer run. It's front end driven, and we're getting into the customer service activities, which we want to drive up. So we have a better way of working with our customers. But also when we look at the whole tech landscape that we have, obviously, that will influence a bit on how we're working with the new environment that we're getting into, not all of it, the part of them, but then we also need to look at how do you modernize and set things up so that you have a good journey throughout the value chain that we have, but add on specifics on top of it. So this is currently what we are addressing. And again, the acquisition has not been approved by the antitrust authorities. We have a little bit light until we get in there. There's a pilot ongoing in 1 of our countries or in one part of our countries. -- which we're very much looking forward to see the completion of it.

And follow-up, do you aim 100% evolution from phone calls to Ophelos enabled operations?

You can't do that at the end of the day because if we look at it, we look at us, younger generation, they are fully sort of on different apps, platform and really want to use a digital interface and also depending on what type of debt collection we're looking at, you can do the easy stuff on this platform. However, if you look at the more severe cases and also elderly population. You can just look at your own grandmother or grandfather would they be on a digital platform? No. So this is how we have to balance it today, but also over time tomorrow.

Thinking of digital platforms. Will you launch an app?

Tech is the important thing to take from how you want to drive it. So we will do what is best for us. But yes, there is past battle.

And follow-up Annette. What is the cost of the tech journey? Well, maybe Annette, Michael and Andres, what is the cost of tech journey and is this cost included or embedded into the disposable liquidity waterfall presented by Andres?

Again, every development, including the integration of fellows as well as our tech road map as envisioned and communicated by Annette is in these plants. So -- and it is part of the calculation of my page when I looked at the liquidity that we're going to dedicate to reducing debt. There's no cost being excluded or anything like that. As Annette said earlier in your one-on-one yes, we're going to make investments, which are going to have some low-hanging fruit initially with some long-term very fundamental benefits, all of which are here and beyond, but this is only a 3-year plan. We expect these benefits, these measures to benefit for many years beyond that. I don't know, Annette, if you would add to that, please.

And on top of that is obviously that when you do -- when you embark on a texturant like this, it's easier to maybe understand where the cost side is, but actually, the benefits is probably a lot more than what we see today. Because again, look at the landscape and the platforms that we are working with. We have 41 call centers. We have around 4,000 caller agents in. And if you look at how we can transform that landscape, we can probably do a lot around it. And then also looking into how can we drive sort of the economies of scale, both taking into consideration the local regulations, but also understanding how we draw that out into making a bit more agile eco environment for us.

I mean just -- sorry, go ahead, Michael, please.

From my perspective, what's important to understand about this trajectory and I tried to get it across, there's no silver bullet in this trajectory. It's really about execution. It's really about putting our heads down and executing every day, which also means that we realize small benefits every day. So there's no massive transformation, no big promises. This is putting the heads down. I know Andres doesn't like to work, grinding, working hard and just delivering that trajectory step by step.

I don't know I'm perfectly happy with those words. But anyway, just to preempt the question, Again, no silver bullet. This is accelerating a path that we are already going. It's leapfrogging, I think, is the phrase that Annette held. And we didn't include the effect here because it's very electivity recent. We haven't closed on it. But we did have a business case, obviously, when we agreed to it. And the consideration that I just mentioned to you, when we just look at improving our collections a bit, improving our cost a bit has many, many, many multiples of what we pay for it, obviously, to be executed upon, -- execution is the big risk. But it is there. I actually think that's even -- that's just scratching the surface because that doesn't include anything in Georgia's world. where we actually have a much better ability to win or right to win even more business than we do today because we have a better product. I think we can look at embedded collections as a service products put into our clients before we even touch something, but we're still going to get paid on it, which has tremendously high. It's a Trojan horse, so to speak. So I think there's so much possibility here, which is why when we got to know the Ophelos people, we're like this is logical. We're the biggest code collector in the world, and they're the only AI, tech-driven, however you want to say, an autonomous debt resolution platform, you put it together, you put their model with our data and our footprint together, tremendous value creation.

But we need to remember, it's journey, it's not done in 1 month. It takes some time to get through and also realizing the values on how we integrate in a smart way.

I have one last for your section, Annette, I just want to check if there's anyone in the room who is Yes, there is. Here we go.

Ermin Keric from Carnegie Equity Research. So maybe a question to start with just given the DK you're expecting on your PI business, and you're planning for an asset management business. How will you handle the collection capacity? Do you scale it down initially until you have the asset management commitment? Or do you hold it? Or how do you think about that? Maybe I can just take all 3 questions right away, so you don't have to hear from you anymore. Then another one just on the Middle Europe, you talked about BPOs being up for tender and so on. How should we think about cash flows for that in the coming years since those are usually some upfront payments? And then lastly, just on Southern Europe. Since you have less than 5% growth assumed there -- is that assuming the higher will just be a runoff business? Or are you assuming some other loss of mandate underlying there?

We take the BPO question first, if I may. The trend in the industry is not to make upfront payments. So none of the tenders that are out there have upfront payments. So the way to think about it is in the trajectory we have shown. There is no upfront payments to go with them. Regarding, IA, I think Andres may want to.

No. I mean -- and just on that point also, that's a form -- Southern Europe historically was that way because the industry in Southern Europe, as George described earlier, came out of a distressed financial system that wanted to externalize activities, which with all those benefits, but also raise some capital -- so there was a capital orientation to buying those contracts. That doesn't exist anymore. That doesn't happen anymore. Southern European banks are in much better shape now. And in fact, older contracts. We're doing it right now in Spain with something there, for example, older contracts that were originally paid for that are coming near the end of their life are getting extended at slightly lower margins, still very attractive. Still within the parameters that George laid out and being extended without any upfront payment, it's industrializing that benefits us ultimately on the BPO. On IAS specifically, it absolutely is not a runoff. And I'll give you a perfect example. We bought it. It was a runoff in services hands. It is not a runoff in our hands because it brought us 2 clients. BBVA and Kaiser also brought XXXXXXXXXXXXXXX and others. Since then, what happened? There was a tender with no upfront payment, for all the remaining real estate business that Kaiser has with servicers that wasn't already in IA. -- who want it? Interim did. We now have 100% of Kaiser real estate management business in Spain. That's possible because of IA. That extends the life of what we bought in IA. That means it's not a runoff actually. And that's in here. And I would also remind you that even though we have 5% growth, everyone focused on 5% growth in Southern Europe, it's still even after this 2-year period, by far the biggest region. So it's not like we don't -- it's maintaining what is already a very sizable business. What was the third question, the servicing capability?

Yes. So I think on the capacity reaction the slower investment I'm not worried about. I mean we are slowing down investments that you have to realize -- I mean not in any year, we invest in the same place. So I mean there are some markets that we invest on a even year even in the past, we have not invested in the next 2, so it's not that we have a committed capacity to our servicing unit year after year. Our servicing unit actually, that's another benefit of our integrated model. They have been able to manage their capacity, balancing investment and servicing opportunities. So I'm not concerned with that at all. The only you could say, I mean, even if we do a back book deal, and I know it's not included in the numbers, we do expect actually also to keep the services of that as well. So I don't think there will be an issue with the capacity.

I mean even if our proprietary collections goes from 13%, 13.5% down to, let's say, 10% or whatever. On the total collections of the 90 something, it's 3%, something like that. That's within variability of our operating platform.

And again. Yes. That the book value of interim goes from 41% to 30%. But if we managed to pull the asset management as an just showed on the last page, our total value under management will be from SEK 40 billion to, let's say, EUR 80 billion. So we are plan to service more assets under management, it's not in the plan, but at SEK 30 billion.

Some more hands -- question Yes.

So Jacob from SEB. A couple of questions. If we begin on third-party capital, Will you be adding depth in different tranches to this structure similar to the TSS PV? Or how do you expect financing to look like?

Well, the answer is, under our own covenants, we have a limited capacity or a fixed capacity, I should say, and Michael can talk to us better than I can of having investing capital in levered vehicles. So if we're going to do something on a back book deal, it might be in there might not because most of our investors that we're talking with, we probably want some level of leverage, but we're looking at structural alternatives to make sure that we can do everything within our covenant and also they get the return they want. On a going forward basis, we have to do any kind of a capital partnership going forward on an unlevered basis as it relates to us, and there are structures that allow us to do that. and we're working obviously with professional advisers, Jack to ultimately put in place those structures.

And I think your question also goes a little bit towards disclosure because in the past, in our joint ventures, it's been on a one-line basis. Obviously, this is developing a business, changing the way we invest and that would also impact our disclosure. And we would actually want a need to make that as transparent as possible. because we invest less, but we generate a lot more valuable fee income out of that business. So that would be reflected -- fully reflected.

This is not an isolated deal an XYZ market, which gets thrown into JV. This is a business line we're dedicating and giving, as I think Javier said in his section, exclusively our origination capacity and our servicing capacity. So we're going to be much more transparent, as Michael says, and much more open about that development when it does take place.

Jacob you are very specfic, I see that in the chat.

Maybe like 10 questions.

Yes. So I'll give you 3 and then we can come back to you later on.

All right. So you stated portfolio investments will be SEK 2 billion on a run rate going forward in 2024 and 2025 and 2026, how should we expect the run rate to be in the second half of this year, as I assume you have already won a certain contracts, which you need to fulfill on so.

I'll take that. We've talked in the past about a very clear envelope for the rest of the year. And if you take that on a quarter-by-quarter basis, the second half of the year is very consistent with that SEK 2 billion per annum. So we invested more during the first half, but a lot of that was out of deals that we already won into the back end of last year. So it took a little bit of time to just wind that down, but it's going to be much reduced from a portfolio investment perspective during the second half. But maybe, Javier, you want to add to what I'm saying.

You're totally right. I think we do -- I mean, we do expect the second half to be in the run rate of SEK 2 billion per annum and this will be mostly dedicated to committed flows that we have to support our servicing business.

All right. And then another thought. I mean, we have talked about your leverage ratio quite a bit, and we hear that FX is giving quite a bit of headwind there. Have you thought about doing an FX hedge on your remaining debt in order to make sure you actually reach 3.5x.

The reason we have a headwind in FX is actually not really something that's hedgeable where it makes sense to economically hedge it. our business and our balance sheet are 60%-plus euros, right? But obviously, we're based in Sweden, we report in Swedish crowns, which means that our balance sheet is translated at the spot rate whereas our P&L is translated at an average rate. So if the FX stops moving, all of this catches up. It's just in any given quarter, you have a dislocation, particularly when the FX has moved a lot versus the euro. So that's something that's just inherent in the buildup.

Okay. Another question in the room? Please.

Patrik Brattelius from ABG. Just 1 question for me. Given you talked a lot about the cost base and automation and you want to be more efficient. Can you talk a little bit about the percentage of the cost base that is -- that comes from the personnel side and the need for personnel reductions going forward?

Michael can correct me. I'm going to talk about this in broad terms, but we roughly have a cost base of around SEK 12 million plus or minus, roughly half is personnel. And of that, 2/3 is operations in IT. So that gives you a sense for how it all breaks down. Am I roughly right, Michael?

I have nothing to correct.

Thank you. Does that answer your question?

Okay. No. The need for personnel reductions going forward, given that you automate your business?

Okay. So let me take that. So of the SEK 6 billion, roughly $6 billion to $6.5 billion, that's personnel a year. We're reducing at least 800 in the tactical cost program. Half to 2/3 of that comes out of personnel. The other comes out of other things, contracts, other things. So you already have a sense there that we're reducing, I don't know, 8%, 9%, 10%, something like that. I think that number will ultimately be higher. That does not contemplate the automation and the road and the technology road map that Annette talked about, that will add further need to adjust our people and are operating our granular operating model, how many people we do and what we do with actions we take. That's not in this.

I can also say when you do transformation, bringing in new process and the tech around it, that's when you then offload the resources that no longer is required. So that will come later on.

I would also encourage you to think about this as a very dynamic equation because we're growing the business at the same time. So effectively, what's happening is our business is ultimately about intensity. So how you contact your customers, how we contact our customers and that we do it with the right channel for them. So if we're able to win additional business, if we're able to pivot towards asset management, that give us an additional pull. So which means that if we have more effective instruments, right, our existing workforce can focus on more value-added tasks. So it's a dynamic equation between the growth and where the cost base is. But ultimately, it translates into margin. And you can see from our trajectory that we plan to expand that by at least 7 percentage points that gives you a sense, depending on exactly how these lines move, what we have to do to our cost base to get there.

And then also on top of that is that you have a churn in the -- you can also use while you're transforming.

Do we have any other questions. Otherwise, I'm thinking Jacob since Okay, sorry. Now -- there's another.

It's another question. You don't get to Dominic, take -- we'll come back to you.

[ Eric Andon ] here from Carnegie. I just wondered, in your new business, what is your expectation of your future cost of funds for the business.

Good question to build -- we built this trajectory as we presented it. We assumed for any refinancing that we would face the current market rates, I call it, around about 14% for the Eurobond side of things. And you can see the other ones on the screen. But as I said before, there is an upside as we derisk and delever that, that comes down. But we haven't baked that into our projections. It's an upside.

Yes. We -- as I said in my section, we haven't assumed any more normalization of the market, and we haven't assumed any lowering of our cost of leverage due to the deleveraging. We've maintained all of our costs whenever the existing maturities come up to be refinanced at market rates. But again, if we choose not to, and we choose just to use all of it, which is our intention to largely and almost entirely use that cash flow to reduce debt, we don't have to do anything in the marketplace until the end of '25.

So it's blended 14% across the board then?

Really on the Eurobonds, it's 14% and some of the other minor component ends there a little bit lower, but they are at current market rates.

So I just want to pop in a with a few questions because Patrick is kind of following up with the investments within IT. So he's wondering these investments are completely included in the numbers until 2025. It's not going to be any surprises within the year.

I mean all of your activities are included in our 3-year plan all the way through 26, right?

What we know today, but obviously, we have also the benefit now when we get offers coming and looking into or revisiting it. And then also from a pure -- I mean, CapEx point of view, with the investment side, there's also upside coming.

So you can tell, Patrick. We don't expect any surprises.

And I also want to -- we did cover this earlier, but Shell maybe wasn't present at the time. The dividend intended to be paid in November is still?

Yes. Well, absolutely.

Anyone else in the room? Yes, Jacob?

Yes. So my next question is to actually George. So looking at the margin on service contract signs in H1 this year, it's substantially higher than your back book. You mentioned the cost program will help with some margin expansion, but are there other main drivers, for example, reduction in cost to collect? Or have you changed any of your pricing?

I think a combination of all of the Bovis, optimizing the collection strategy as S1 and the selection of what business we pursue. -- because at the end of the day, there are businesses out there and contracts are there at a higher or lower margin. So we go to the ones that are more suitable to us. The benefit in the contracts we have signed this year for all good purposes, and the margins we have shown for this year, significantly higher than the stock is on the current cost base. The cost income, the cost program will come as a boost in most cases you have seen.

Okay. I'll take some from the e-mail as well. Petros is wondering why 1 interim doesn't make any sense.

I didn't say it didn't make sense to be clear. it made a tremendous amount of sense when it was put in place several years ago when we largely ran the 25 or 6 markets we were in then, very independently. A, centralization of management makes sense, a centralization of direction makes sense. A complete centralization of operations does not. And also, we also didn't execute as well. The center didn't deliver as much for the local and it also created a lack of empowerment, the lack of a distant franchise then at the local level. What we're going back to and, by the way, we consolidated those benefits. And now we're going to a more balanced business model, where the local management teams feel empowered to make decisions. Our customers and our clients are in the local markets. So we need to allow people who run businesses in specific markets to be able to run their business and make decisions. We need to give them the tools to be effective having someone like George sit above the commercial gives them tools, gives them information that they get from other markets. There's not -- there wasn't historically a cross-fertilization there wasn't as much ownership in account of Italy local. There wasn't as much on things that are important, like IT, ops, commercial, investing and finance cuts across the entire thing. Those are where we need to have experts, really capable people delivering for the markets and giving them greater tools to understand how they can improve their businesses. The performance scorecard that Annette talked about earlier, we didn't have one. Markets didn't actually know why they were certain -- collecting at a certain rate and the other market wasn't at that rate or was at that rate. We have 3 -- I just named 3 great businesses: Switzerland, Portugal, Greece, just to name 3 of our best-performing businesses. Well, Spain, Italy and Germany didn't have access to those numbers. So what we're trying to also do is bring people together, but empower our local people with information to create a continuous improvement and performance management culture.

And that's kind of following up on the same subject. Have you seen any opportunities using AI? I think your answer will be yes. So elaborate on how in the collection process.

First, before I get into that, I think it's also important to understand that we are in a regulated market, which looks a little bit different locally. And that's also why 1 interim didn't work because you need to understand what the differences are before you can actually draw on the economies of scale of it. I think one of the most obvious one, and this is also why we are going to work with Ophelos, the customers have service processes that we need to get into. We are making a lot of calls, which are not effective and that we need to sort of take out and there's also a lot of document handling. There's all along the step you can actually take out a bit just by looking into how you can automate it more. But the biggest one is really looking into how we face the customers.

I mean think about our business model. We're a 10,000 people that sit in between 80,000 clients and more than 25 million customers. If we can use technology to make that interaction more efficient, more effective, more clear, it can only benefit our clients and our customers. I think AI is not a term I necessarily agree with because I don't think it's necessarily intelligent for saying we can get into that, but that's not for today. That's not today. But I do think that the customer interactivity, but also the decision science behind their model and figuring out what actions are positive or not, those 130 million actions. We're going to become more efficient, more targeted. You can get a text in the morning because your profile says you're a morning person and you like text, I get a phone call. I get a phone call because I make more phone calls and more active generally in the afternoon. What Ophelos also does to us is -- it allows us to focus on every individual, not batches of individuals and also be much more targeted and efficient and only do actions that are likely to elicit a response is NPV positive. A large portion of those 130 million actions don't yield the result, just eliminating was a massive benefit.

But I think at the end of the day, it's a slow looking at the human interaction because we know we have automated things. We are looking into part of the AI already from the beginning. The problem is how you apply it and actually how you're sitting on top of it because you can't just interact and add on an automization without understanding how it works. We see that we actually are doing things because of letting the machine rule rather than use ruling. So that interaction needs to happen as well. That's also why it's important to have this -- have the cowork between local countries and also sort of people sitting on the central levels. And that's also why you cannot go either way. You have to work and be balanced in the middle of it.

We have a question in the far back.

Yes. Thank you. I'm Ben XXXXXXXXXXXXXXX from AFA Insurance. May ask you first, like-for-like if unemployment goes up in Europe with 1 percentage point, what is the effect on you because you have so much statistics for 100 years, you must know. That's my first question. And I guess I forgot my second one.

Do you want to Michael, do you want to -- I can as well, please?

There's 2 sides to that equation, right? Unemployment goes up. Obviously, that is usually accompanied by other macro indicators as well, which means on the back of that, driven by that, we get more inflows. But at the same time, we probably find it a bit more difficult to collect. So it gets a little bit more expensive, and we might collect a little bit less on an individual claim. And exactly depending on where you are in that cycle, you have a minor negative to a minor positive. I think that is the best way of explaining it. I don't know whether you..

No, you're absolutely right. That subsequently to any increase in unemployment, typically, there's unpaid claims, which then leads to an increase in servicing, et cetera, et cetera, but there is a limited -- a more difficult time or cost effort and cost to collect. There's no doubt about it. But you bring up -- bringing up unemployment is a very important thing. You noticed my Marcus is because didn't have unemployment. This crisis is very different. -- than those of us who remember the last crisis. The last crisis was an unemployment crisis fundamentally driven by an asset bubble that bursts. This crisis is not that way. People have jobs. They just don't have enough income. Their income is falling short. So -- that's one of the reasons I think when you look at the shape of the curve of what's coming, it's going to be very different. Banks are in a better situation today. The problem isn't accelerating is acutely and there isn't an unemployment crisis, but it is coming. There's no doubt about it. And so what it's going to be, it's going to be flatter for a while to because it will eat a greater lag and we're in the middle of that lag right now, then it's going to be steeper because as soon as 1 or 2 do it, there's going to be a flow because the environment over the last 15 years is that sellers are sophisticated. They don't have -- there's no stigma around selling as there was 15 years ago. Then it's going to be very steep, and it's not going to reach the peaks of last time because sellers are sophisticated. And they're always looking for the right partner in doing this. And that's where we're going to benefit from this. And that is coming, Absolutely.

I may say from studies we have done, not any European, but we have done a number of markets and looked into the other reality is that unemployment by itself may not affect anything because there are other things in between, for example, what the fiscal policy in the various markets will be. I mean we do have seen in the COVID in the pandemic is the biggest number of people not doing anything and the highest number of collections because the state steps since with fiscal policy benefits, et cetera, et cetera, et cetera. So there are quite a few, I think, elements there that have to do with the monetary policy chosen by the Central Bank, which was expensive for years with a fiscal policy in the various countries, et cetera. But to emphasize, again, in reality, the interim model is pretty much weatherproof in the sense that we have stock business in the hundreds of millions by the way. I think we showed here SEK 1 trillion only external -- and in the stock business, effectively, what matter is, the better the economy, the better the recoverability. But even if the economy is not that good, and this creates -- assuming there are no government interventions and there have been in the last few years. And you have decreased disposable unmet you have new cases that pretty much mitigate what you have lost in capability. I see the model is pretty much weatherproof. And if you look at the revenue base of interim the last few years, with so much happening around Europe positive and negative. I think this may be a good indication that what I'm saying is about rate.

George. You make a very important point because what we've talked to is really the like-for-like point. But if you actually apply it to interim, we operate in 20 countries in Europe, right? And they are at slightly different stages of what's happening in the macro economy out there. I know Andres likes to call it a train, right? And if we look at how that train sort of winds through Europe, U.K. is probably at the front. I mean the crisis there is pretty deep. We're seeing people acting. We're seeing people and challenges, but we also see inflows, and we see growth opportunities in servicing. And the end of the train is probably in Greece. They're coming out of the last crisis, and they're doing very well. So our diversification also gives us a bit of a hedge against what you talked about, and that contributes to the stability that George just talked about in terms of our trajectory.

Okay guys, we are coming very close to 5:00. So I just want to bring some in here before we say thank you for today. Mark wants to know, I understand no dividends until the under 3.5 leverage. What about buybacks?

We are dedicating all our cash flow until the end of '25 to reducing leverage.

Mark wait and see. And what about buying back bonds, Michael?

I very much talked about reducing net debt. And we'll obviously look at the appropriate ways and instruments that we have available at any given point in time. So we'll look at all forms of executing on that net debt reduction strategy.

Okay. Last question. Susan asks or claims. Culture beats strategy with interim direction presented on what to drive for future, how does the Board and the management secure interim cultural and behavioral commitment to change.

I think you've been sitting in at our Board meetings. My Chairman is sitting in the back. We have -- it's a well-known phrase, but also a slide that we use at the Board, which is culture eats strategy for breakfast, lunch and dinner. And it's true -- you can't pre-prescribe everything, which is why I'm so excited about what we presented today. We have great people and great seats. We have great people running our markets, not without changes. We've made a fair amount of changes. We've already started a lot of these initiatives a year ago, and then we're working through them and now they crystallize and come together in this plan. So we need to put the good people in good -- in the right position, give them the tools and then let them run the business. You can't -- and that's culture. And the culture is about collaboration about performance management and performance focus about working towards a common good for the company about delivery, delivery from the center is also delivery locally. That culture, if we do that, -- the plan is going to be slightly different than whatever we put on the page, but I'm positive it's going to be positive. I'm positive, it's going to be up into the right, so to speak.

[indiscernible] that's also a cultural.

Okay. That concludes the Q&A. Thank you so much, everybody, in the room for your presence and your questions. For those who want to look at this broadcast again, it will be out on the Interim Investor Relations website tomorrow. And for you here, there will be some mingle out and about just now. And yes, you will get the feel -- you will get the final word. And for you at home, I'm sorry, I hope you have some good drinks for yourself. Andres, please.

No, no. Listen, I just want to, first of all, thank the team. I think -- not just this team, you're seeing here, the tip of the iceberg is a whole iceberg underneath a lot of our senior management team is in the audience. A lot went into presenting this, but a lot more goes into actually what we do every day. It's a 10,000 people. Every person has that purpose, -- every person contributes to what we're showing you every single person. So I'd like to thank the team. I'd like to thank the Board, in particular, in our major shareholders who are quite supportive. And then ultimately tell you that this is a journey. I've been asked indirectly and directly will the market recognizes, et cetera. I don't expect the market to just recognize it or rely on it just because we tell you it when we start delivering on it, I do expect the market to recognize it and reflect it but this is a journey. And I appreciate you sticking with us for exactly 4 hours and 2 minutes today. And I will even more appreciate those of you who are along the ride with us for the journey. And we will come back and you will have similar type transparency, honesty and disclosure and obsolete ambition going forward from us as a team. I promise you that. So thank you all for today, and look forward to our next interaction.