Intrum : Report Q422 Eng

Year end report

Fourth quarter 2022 highlights

• Strong finish to the year, especially within Strategic Markets and Portfolio Investments segments
• In CMS we saw increasing inflows, predominantly from lower balance, lower margin invoices
• All segments contributed positively to cash revenues growth for the full year
• Cash revenues increased 12% and cash EBITDA 2%, while cash EBIT decreased 11% in Q4 '22 compared to Q4 last year
• Leverage ratio is stable at 4.0x, negative impact from depreci- ating currency compared to last year
• We expect 2023 to be a transition year where we will see increased inflows of financial services claims to our servic- ing business and a moderate pace of investments in a more uncertain risk environment across our footprint and to address leverage
• We look forward to laying out further details in respect of our strategic priorities in a Capital Markets Day to be held during Q2 '23
• The Board of Directors proposes a dividend of SEK 13.50 (13.50) per share payable in two equal instalments in May and November 2023, corresponding to a total of SEK 1,627 M (1,632)

Fourth quarter, 2022

		Fourth quarter			Full year
	Oct-Dec	Oct-Dec	Change			Change
SEK M, unless otherwise indicated	2022	2021	%	2022	2021	%
Revenues	5,557	4,870	14	19,485	17,789	10
Adjusted revenues	5,134	4,853	6	18,960	17,656	7
Operating earnings (EBIT)	-1,153	2,040	-157	154	6,475	n.m.
Adjusted operating earnings (EBIT)	1,928	2,355	-18	6,664	7,014	-5
Net earnings for the period	-3,576	1,251	n.m.	-4,379	3,391	n.m.
Earnings per share, SEK	-30.14	8.98	n.m.	-37.07	25.88	n.m.
Adjusted earnings per share, SEK	-2.74	10.69	-126	15.21	28.86	-47
Cash revenues	6,759	6,053	12	24,627	22,215	11
Cash EBITDA	3,786	3,726	2	13,238	12,310	8
Cash EBIT	1,943	2,171	-11	6,344	6,343	0
Cash EPS, SEK	8.56	13.93	-39	24.76	28.98	-15
Cash RoIC, %	10.3	12.0	-14	8.4	8.9	-6
Net debt/RTM cash EBITDA, x				4.0	3.9
Cash EBIT: Credit Management Services	315	437	-29	1,317	1,640	-20
Cash EBIT: Strategic Markets	1,137	1,310	-13	3,399	3,009	13
Cash EBIT: Portfolio Investments	1,234	901	37	4,240	3,561	19
Total portfolio investments made	1,277	2,683	-52	7,538	8,106	-7
Carrying value of portfolio investments	37,109	38,231	-3	37,109	38,231	-3
Adjusted return on portfolio investments, (ROI), %	15	14	1	14	14	0

Q4 in brief Comment by the President and CEOKey financial metrics ONE Intrum Segment overview Financial overview Financial reports Other information Definitions About Intrum Intrum  Year end report, fourth quarter 2022 2

Strong finish to 2022 provides a solid foundation for the future

Following the announcement on the 18th of January, I am excited and privileged to have been entrusted with the challenge to lead Intrum through its next chapter as President and CEO. While I am convinced that we have a very solid foundation with many strengths, I also see substantial opportunities for further commercial development and organisational improvement ahead. A strong fourth quarter ended 2022 and provides a positive environment in the years to come.

Strong cash generation and finish to 2022

Our performance during 2022 - as well as the fourth quarter - has showcased Intrum's fundamental strengths, given the backdrop of a challenging macroeconomic environment across our foot- print. Our multi-market integrated business model has enabled us to significantly grow cash revenues, up 11% and 12%, as well as cash EBITDA, up 8% and 2%, year on year and quarter on quarter, respectively. This positive development is rooted in the strong contribution from both Portfolio Investments and Strategic Mar- kets. Portfolio Investments delivered strong underlying collection outperformance of 108% for the full year and 111% for the fourth quarter, a testament to the quality of our underwriting and work- out competencies, particularly important in this difficult market environment. In line with previous guidance, we have moderated our investment pace, with SEK 7.5 billion deployed in 2022 and SEK 1.2 billion during the fourth quarter, at increasing internal rate of return amounting to 15% in the second half of 2022 vs. 12% in first half of 2022. Strategic Markets delivered a consistently strong trajectory throughout the year with Greece and Italy outperforming relative to expectations and to other markets.

On the other hand, our challenges have also been consistent throughout the year as the CMS segment has not yet seen material increases in higher value, higher margin financial services inflows. At the same time, costs have increased due to higher levels of activity required to maintain revenues, given efforts to collect and increase inflows of lower value, lower margin industrial invoices. Costs overall have also been impacted by our efforts to enable and support the ONE Intrum transformation, as well as

building and enhancing both our commercial and data and analytics capabilities.

The leverage ratio is still at 4.0x at the end of the year, adversely impacted by the continued depreciation of the SEK throughout 2022 as well as the settlement of the derivative agreement with CarVal. We remain committed to achieving our 3.5x leverage ratio target as soon as possible.

Our success benefits key stakeholders and society

Looking beyond financial indicators, we have made significant progress with our clients who benefit from our solutions, which enable us to win new and extend existing mandates. In 2022 Intrum won new servicing contracts with a 36% higher annual value compared to 2021. This comes in large part from new clients but also from our existing clients. Some of the largest deals last year included Sainsbury's Bank in the UK, Credit Agricole Italy and Vattenfall in Sweden. Satisfied clients are also a particularly important enabler for our commercial success. In our Annual Client Satisfaction Survey, we achieved a high score of 7.6 out of 10 overall and 8.4 out of 10 for larger and key clients.

Just as important, we have helped our customers resolve their financial challenges in a fair and ethical manner, with circa 4 million customers becoming debt free with Intrum in 2022 alone. This highlights the contribution we make to the functioning of the financial ecosystem and is only possible due to our highly competent and dedicated workforce, evidenced by a strong Employee Engagement Index of 80 out of 100 and Culture Index of 85 out of 100.

Strengths, opportunities and initiatives

We expect increasing demand for our services and solutions in 2023. Stage-2 loans have increased from 1.2 trillion to 2.0 trillion over the last three years, household cost of borrowing has more than doubled in 2022 and one of every three European households expect to miss at least one bill payment in the coming twelve months. In addition, the overall risk environment has started to adjust to increasing interest rates and risk premia.

We therefore expect 2023 to be a transition year where we

"Our performance during 2022 - as well as the fourth quarter - has showcased Intrum's fundamental strengths, particularly against the backdrop of a challenging macroeconomic environment across our footprint."

Q4 in brief Comment by the President and CEO Key financial metrics ONE Intrum Segment overviewFinancial overview Financial reports Other information Definitions About Intrum Intrum  Year end report, fourth quarter 2022 3

will see: (i) an increased flow of financial services claims into our servicing business to add to the already strong flow of industrial invoices and (ii) a more moderate pace of investments given the more uncertain risk environment and our ambition to lower leverage.

Going forward, we believe that the significant increases in the volumes of potential investments (generated by the key drivers of Stage-2 loan and household borrowing cost increases) will begin near the end of 2023 and continue for several years. In the mean- time, we will focus on driving collections performance on our existing portfolio in the increasingly challenging environment.

The servicing business will be driven by a general increased need for our services and, more specifically, the continued strong performance in those markets where we have a strong leadership position - Scandinavia, Greece, Italy, Spain and UK. In addition, it is incumbent on us to continue to improve our efficiency and service functionality across all of our key markets through a continued overview of our operations.

In sum, we expect 2023 to bring increased flows of financial services claims, moderate and selective investments, and a focus on deleveraging.

Our priorities going forward

Our fundamental and long-term strategic priorities remain unchanged - profitable growth and improved effectiveness and efficiency through a number of key initiatives. In this context, our key themes for our long-term development are simplify and focus as well as grow and transform.

Simplify and focus means making our organisation and communication more targeted, coherent and transparent. We will increase our focus on the geographies where we can achieve leadership in both servicing and investing, to set the foundation for the highest growth and profitability. Grow and transform encompasses all initiatives enabling profitable growth and fostering a culture of continuous improvement. In 2023 we will therefore pursue a number of specific initiatives.

Organisation and footprint: We will simplify and focus on two businesses - Servicing and Investing - plus clusters of geographies with distinct commonalities. Our overall footprint is generally characterised by Franchise markets across Northern, Middle and Southern Europe and investment-dominated Tactical markets

predominantly in Eastern Europe. Franchise markets are defined by strong, deep and long-standing client relationships with leadership in both Servicing and Investing, while Tactical markets are dependent on continuous investment volumes and need to be monitored carefully over time. In line with this increased focus and simplification, we are investigating a potential exit from the Bal- tics, Romania and Brazil - reducing our jurisdictions from 25 to 20.

Value chain extension: In our Franchise markets we want to continue to expand our product capabilities in line with our clients' evolving needs, including early-stage solutions as well as secured and real estate services. This will allow us to broaden and deepen client relationships, supporting growth of the Servicing business.

Client and customer-centric approach: The value generation for our clients and customers is at the very centre of everything we do. We will continue to harmonise our technology platform, focusing on increasing the efficiency and effectiveness of our touchpoints with clients and customers. During 2023 we will update and harmonise our client and customer portals, roll out a state-of-the-art dialer system and introduce an end-to-end digital collection solution in our key markets.

Capital partnership: We will explore opportunities over the near term to establish a balance-sheet-light capital partnership, where a financial partner complements our Investing activities. This enables the further monetisation of our origination, underwriting and workout capabilities, adding additional revenues. This would allow us to significantly increase overall portfolio investments as well as the asset base for our servicing platform, while keeping our book value stable.

We will detail these themes as well as associated trajectory and targets on a Capital Markets Day to be held during the second quarter.

Stockholm, January 2023

Andrés Rubio

President & CEO

"Our fundamental and long-term strategic priorities remain unchanged

• profitable growth and improved effectiveness and efficiency through our overall transformation program. In this context, my key themes for our long-term development are simplify and focus as well as grow and transform."

Q4 in brief Comment by the President and CEO Key financial metricsONE Intrum Segment overview Financial overview Financial reports Other information Definitions About Intrum Intrum  Year end report, fourth quarter 2022 4

Key financial metrics

Cash metrics	Financial targets	Quarterly development
Cash metrics help us present a transparent view of performance	Returns: Cash RoIC >10% medium term	Q4 2022 was a seasonally strong quarter, with strong and resil-
for the business in which we operate. Our servicing business	Growth : Cash EPS > 10% p.a. on average medium term	ient underlying performance. Strategic Markets continue to per-
area is not capital intensive but in our investment business area	Leverage: Net debt/Cash EBITDA 2.5-3.5x by end of 2022	form well. Underlying outperformance in Portfolio Investments,
we utilise capital in terms of our investments. These investments	Shareholder remuneration: Absolute annual increase in	albeit strong, is starting to normalise and CMS again continues
and our servicing activities generate cash revenues and require	dividend per share	to be affected by lower new financial services inflows. The lever-
cash expenses. When adjusting for cash items like replenishment		age ratio also continues to be adversely affected by currency
capex, other capex, cash net financials and cash tax, we have a		movements.
performance measurement of cash return on invested capital		In Q4 2022 cash revenues increased to SEK 6,759 M (6,053),
(Cash RoIC) and cash earnings per share (Cash EPS) on a recur-		cash EBITDA to SEK 3,786 M (3,726) and cash EBIT decreased
ring basis.		to SEK 1,943 M (2,171). Cash EPS was SEK 8.56 (13.93), Cash RoIC
Cash metrics are central to our financial targets set out at the		stood at 10.3 (12.0) and leverage ratio at 4.0x (3.9x).
Capital Markets Day in late 2020.		On a rolling 12-month basis cash revenues increased to SEK
		24,627 M (22,215), cash EBITDA to SEK 13,238 SEK (12,310) and
		cash EBIT to SEK 6,344 M (6,343). Cash EPS decreased to SEK
		24.76 (28.98), and cash RoIC decreased to 8.4% (8.9).

Cash revenues, SEK M

Cash revenues rolling 12 months,

SEK M

				6,759
6,053		6,266
5,792		5,810
22,215	22,758	23,433	23,921	24,627
Q 4	Q 1	Q 2	Q 3	Q 4
2021	2022	2022	2022	2022

Cash EBIT, SEK M

Cash EBIT rolling 12 months, SEK M

2,171
				1,943
		1,595
	1,409		1,396
6,343	6,387	6,569	6,572	6,344
Q 4	Q 1	Q 2	Q 3	Q 4
2021	2022	2022	2022	2022

Cash EPS, SEK M

Cash EPS rolling 12 months, SEK M

13.93
		9.12		8.56
			Target: >10% p.a.
	4.58		2.48
28.98	27.89	31.34	30.16	24.76
Q 4	Q 1	Q 2	Q 3	Q 4
2021	2022	2022	2022	2022

Cash RoIC, %

Cash RoIC rolling 12 months, %

12.0
				10.3
		8.4
	7.7		7.3
			Target: >10%
8.9	8.9	9.0	8.8	8.4
Q 4	Q 1	Q 2	Q 3	Q 4
2021	2022	2022	2022	2022

Net Debt/RTM cash EBITDA

3.9x		4.0x	4.0x	4.0x
3.8x
			Target: 2.5x-3.5x
Q 4	Q 1	Q 2	Q 3	Q 4
2021	2022	2022	2022	2022

Q4 in brief Comment by the President and CEO Key financial metrics ONE IntrumSegment overview Financial overview Financial reports Other information Definitions About Intrum Intrum  Year end report, fourth quarter 2022 5

ONE Intrum

Transforming the operating model to reach full potential of scale and efficiency

Intrum has a solid foundation and proud heritage with over 80,000 clients across Europe, where we are the leading credit management services company. Our transformation program ONE Intrum has involved a number of milestones to ensure that we remain relevant in a changing market and is constantly being altered to its implications.

We have implemented a global operating model and established operational hubs. We are establishing simpler, more data- driven business processes and have transitioned portfolios from multiple countries to a global collection system.

Transformation program spend, SEK M

Our global front offices serve 18 Intrum markets and 19.2 per cent of all calls. The global collection system is our largest collection system, handling 9.4 million cases, 25 per cent of all cases globally, across 7 markets. No new migrations took place during the fourth quarter of 2022.

At the end of Q4 2022, our full year run-rate savings realised from the transformation program are at SEK 290 M. Our rolling twelve month FTE cost-to-collect ratio improved to 5.8 per cent in Q4 2022 vs. 6.2 per cent in Q4 2021.

FTE cost-to-collect RTM, %

A broadened focus for increased client centricity and value creation

Our fundamental strategic priorities remain unchanged - profitable growth and improved efficiency through our transformation program. To succeed, we will increasingly focus on delivering value in our front-end touchpoints with clients and customers, with a more agile, needs basis approach to converting additional countries to a global collection system. We will continue to harmonise our technology platform, front end and back-end, on a bespoke basis in balance with other strategic priorities.

To strengthen the commercial development of Intrum, key themes will be simplify and focus our operations and market presence, as well as grow and transform to achieve profitable growth and fostering a culture of continuous improvement.

Planned vs. realised program savings, run-rate SEK M

150													1,500	7
100													1,000	6
50													500	5
0													0	4
Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4		Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4
20	21	21	21	21	22	22	22	22	23	23	23	23		20	21	21	21	21	22	22	22	22	23	23	23	23
Actuals	Budget												Quarterly actuals	RTM actuals

1,500

	2023 P&L savings:	2024 and beyond
	0.7 bn SEK	P&L savings
1,000		≥ 1 bn SEK

2022 P&L savings:

0.1 bn SEK

500

0

Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4

22

22

22

22

23

23

23

23

24

24

24

24

Budget accumulated (RHS)

Actuals accumulated (RHS)

Quarterly target

RTM target