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

There are several attractive commercial opportunities
in the region, particularly in the banking
sector.
Earnings have improved in Denmark in particular,
where Intrum Justitia is working more
closely with clients to manage current bank
loans. Earnings improved towards the end of
the year in Sweden as well, when internal efficiency
improvements had the desired effect.
Meanwhile, sales activities were intensified in
2010 and several new contracts were signed,
which is now bearing fruit in the form of increased
revenues. Cost control and sales activities
are also continuing in the Norwegian
operation. In Finland Intrum Justitia has successfully
penetrated the energy sector. Earnings
in Poland are still negatively affected by
expenditure related to legal action.
The region’s margin was negatively affected
by a higher amortization rate on purchased
portfolios compared with previous years. This
is partly due to the higher proportion of fresh
receivables. These types of cases typically involve
a smaller debt and faster repayment pace, and
are mainly purchased from clients in the telecom
sector. The risk level is lower but they have a negative
impact on the margin.
Regional revenues for the year excluding,
purchased debt revaluations, amounted to SEK
1,434.1 M (1,432.2). Earnings in local currencies
increased by 5.9 percent. Operating earnings
excluding revaluations amounted to SEK
321.6 M (354.2), equivalent to a margin of
22.4 percent (24.7). Operating earnings fell in
local currencies by –3.3 percent.
Central Europe
The region consists of Switzerland, Slovakia,
Czech Republic, Germany, Hungary and Austria.
The new management team for the old
Switzerland, Austria and Germany region
implemented a comprehensive improvement
program at the beginning of the year aimed
at achieving higher sales and cost efficiencies.
This bore fruit in the second half of 2010 and
its full effects are expected in 2011. Activity on
the market for purchased debt is still at a low
level and consequently, Intrum Justitia’s investment
level has been low for a long period.
Earnings for the year in the Czech Republic,
Slovakia and Hungary have been effected
by significant expenses that have been expensed
and that relate to court costs. However, a savings
program was implemented in Hungary
where the number of employees was cut by
about a quarter. Efforts to turn the negative
Board of Directors’ report
NET REVENUES EXCLUDING
REVALUATIONS. SEK M 2010 2009 2008 2007 2006
Northern Europe 1,434.1 1,432.2 1,323.5 1,189.7 1,092.0
Central Europe 926.2 1 039.2 922.6 759.6 654.7
Western Europe 1,402.5 1,692.1 1,429.4 1,264.4 1,185.7
Total 3,762.8 4,163.5 3,675.5 3,213.7 2,932.4
OPERATING EARNINGS EXCLUDING
REVALUATIONS, SEK M 2010 2009 2008 2007 2006
Northern Europe 321.6 354.2 369.5 329.0 297.5
Central Europe 198.2 207.4 259.4 209.3 152.0
Western Europe 208.5 142.0 65.4 117.2 129.6
Participations in
associated companies
–0.9 0.3 0.8 0.8 0.4
Total 727.4 703.9 695.1 656.3 579.5
NET REVENUES BY
SERVICE LINE, SEK M 2010 2009 2008 2007 2006
Credit Management 3,274.3 3,548.3 3,217.9 2,852.1 2,706.6
Purchased Debt 860.5 924.1 783.6 573.7 402.3
Elimination of internal transactions –368.8 –344.6 –323.8 –200.6 –169.3
Total 3,766.0 4,127.8 3,677.7 3,225.2 2,939.6
OPERATING EARNINGS (EBIT) BY
SERVICE LINE, SEK M 2010 2009 2008 2007 2006
Credit Management 471.9 398.3 501.0 494.8 508.0
Purchased Debt 382.6 361.9 349.3 271.8 161.8
Disposal of operations/
Goodwill impairment
– –16.0 –51.8 – –
Participations in associated companies -0.9 0.3 0.8 0.8 0.4
Central costs –123.0 –76.3 –102.0 –99.6 –83.5
Total 730.6 668.2 697.3 667.8 586.7
trend around in Hungary, Czech Republic and
Slovakia have been successful and resulted in
profitability in these countries at the end of
the year.
Regional revenues for the year, excluding
purchased debt receivables, amounted to SEK
926.2 M (1,039.2). Revenue fell in local currencies
by –5.5 percent. Operating earnings excluding
revaluations amounted to SEK 198.2
M (207.4), equivalent to a margin of 21.4
percent (20.0). Operating earnings fell in local
currencies by –0.2 percent.
Western Europe
The region consists of Belgium, France, Ireland,
Italy, the Netherlands, Portugal, Spain
and the United Kingdom.
Based on the macroeconomic development
in southern Europe, this region performed
well during the year. Cost control
measures and good growth in purchased debt
operations resulted in an improved margin.
Intrum Justitia’s market share has increased
and the partnership with Coface, which
started at the end of 2009, got off to a successful
start. The partnership involves B2C
collections in the French market. As part of
the efforts to improve the region’s profitability,
the number of employees in Spain has
been reduced.
Intrum Justitia’s Belgian operation also
demonstrated strong growth, with the addition
of new clients in both CMS and purchased
debt operations. The region was,
however, affected by a weak trend in the
Netherlands, where earnings were affected
by restructuring costs and weak growth.
Cost adjustments and intensified sales activities
are important priorities in 2011.
The restructuring in the United Kingdom
& Ireland is still satisfactory. The purchased
debt operation is profitable and the
focus continues to be on investing in additional
portfolios in the British market.
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