ANNUAL REPORT INTRUM JUSTITIA A N N U A L R EP O R T 2 0 ...

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Outcome of investments in written-off receivables Making a difference We don’t look for problems, we find solutions. We help our clients by providing credit management services that make them more competitive. Informed credit decisions, faster payment and smooth debt collection processes improve margins and cash flow. Intrum Justitia makes a difference – not just for our clients, employees and shareholders, but for society in general. Profitable companies create jobs and help society move in a positive direction.
Credit institutions, private and public companies and public authorities are among them. By selling their receivables they can quickly access liquid assets and concentrate on their core business, at the same time as they avoid not getting paid at all. Buyers of overdue receivables include companies in the industry such as Intrum Justitia and financial ones such as international investment banks. Around one third of Intrum Justitia’s portfolio of purchased receivables comes from our credit management clients. The remainder is purchased by Intrum Justitia from external partners. In the case of large portfolio investments, Intrum Justitia often works with financial partners such as Crédit Agricole or Goldman Sachs. Other partnerships are being evaluated on a continuous basis, and in January 2010, we announced a partnership with East Capital and the European Bank of Reconstruction and Development relating to joint investment in the Russian market. SPECIALISTS IN CONSUMER DEBT The market for written-off receivables mainly consists of receivables that are secured, e.g. real estate. We have decided, however, to concentrate on small and medium-sized unsecured consumer debt as this is an area where we have extensive collection experience and well-developed analysis and valuation methods. The portfolios Intrum Justitia purcha- ses consist largely of unsecured bank loans and credit card debt belonging to private individuals, followed by receivables originating from telecom, mail order and infrastructure, as well as receivables, e.g. from municipal companies. Most of the portfolios thus have amounts of around SEK 7,100 per claim. TRANSPARENT ACCOUNTS In our income statement, revenue from receivables is recognized as the collected amount less amortization. In recent years amortization has been around 50 percent of the collected amount. The amortization of each portfolio’s carrying value is based on the change in the discounted present value of future cash flows between two periods according to the portfolio’s initial effective interest rate. The amortization amount is a relatively stable portion of the anticipated collections over the remaining life of the portfolio. The return on purchased debt has been between 14.4 and 17.0 percent over the past five years. The goal is to achieve an annual return of at least 15 percent. In the balance sheet, the value of each portfolio is recognized as the discounted value of all anticipated future cash flows. Cash flow forecasts are reviewed quarterly and reassessed based on, for example, achieved collection results, agreements with debtors on installment plans and macroeconomic information. Outcome of investment in purchased debt % 20 15 10 5 0 MSEK 1 200 1 000 800 600 400 200 0 PORTfOLIOS BY BUSINESS SECTOR Bank loans 35% (39) Credit cards 14% (15) Telecom 25% (23) Finance 14% (15) Mail-order 1% (1) Utilities 11% (7) YIELD 06 07 08 09 10 The return on investments in overdue receivables was 16.3% in 2010. INVESTMENTS IN PURCHASED DEBT 03 04 05 06 07 08 09 10 The investment level in 2010 exceeded 1 billion SEK. 23
Page 1 and 2: INTRUM JUSTITIA ANNUAL REPORT
Page 3 and 4: Net earnings amounted to SEK 452 M
Page 5 and 6: We are working to promote healthy p
Page 7 and 8: ity will increase in these countrie
Page 9 and 10: In addition to being present in 22
Page 11 and 12: We are the market-leading credit ma
Page 13 and 14: Our services Respectful credit mana
Page 15 and 16: insight to feed innovation We are a
Page 17 and 18: Payment services Information is imp
Page 19 and 20: Payment guarantee Many of our custo
Page 21: Committing to challenge We are ofte
Page 25 and 26: Our goal is to be the employer of c
Page 27 and 28: Benefits of credit management Sound
Page 29 and 30: Regions Intrum Justitia has operati
Page 31 and 32: No. of shares traded Intrum Justiti
Page 33 and 34: financial overview Income statement
Page 35 and 36: There are several attractive commer
Page 37 and 38: NET fINANCIAL ITEMS The net financi
Page 39 and 40: GOODWILL The Group’s goodwill amo
Page 41 and 42: PROPOSED APPROPRIATION Of PROfIT Th
Page 43 and 44: Consolidated balance sheet SEK M NO
Page 45 and 46: Consolidated cash flow statement SE
Page 47 and 48: Parent Company income statement SEK
Page 49 and 50: Parent Company balance sheet SEK M
Page 51 and 52: Condensed statement of changes in s
Page 53 and 54: NOTE 1 SIGNIfICANT ACCOUNTING AND V
Page 55 and 56: Legal outlays The Group incurs outl
Page 57 and 58: iod of employment of the employees
Page 59 and 60: GROUP Tangible and intangible fixed
Page 61 and 62: GROUP 2010 2009 Reconciliation SEK
Page 63 and 64: NOTE 11 TANGIBLE fIXED ASSETS GROUP
Page 65 and 66: NOTE 13 JOINT VENTURES Intrum Justi
Page 67 and 68: NOTE 21 LIQUID ASSETS GROUP PARENT
Page 69 and 70: ity amounted to SEK 168.7 M (849.7)
Page 71 and 72: SEK Base salary/fee Variable comp-
Page 73 and 74:
2010 PARENT COMPANY SEK M At fair v
Page 75 and 76:
Accounts receivable The Group’s a
Page 77 and 78:
Audit Report We have audited the an
Page 79 and 80:
CHARLOTTE STRÖMBERG Age 51 Directo
Page 81 and 82:
PER CHRISTOFFERSON Age 42, Director
Page 83 and 84:
ATTENDANCE AT BOARD MEETINGS IN 201
Page 85 and 86:
The Board of Directors’ report on
Page 87 and 88:
able on the intranet and ongoing em
Page 89 and 90:
Information for shareholderst Annua
Page 91 and 92:
Intrum Justitia’s annual report 2
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