CEO statement: "Focus on transformation and organic growth"

In a time of uncertainty, we have implemented a large number of specific measures as part of our large-scale transformation that will ensure we are able to meet the future needs of our clients and customers.

At the same time, we have taken care of day-to-day operations and continued to serve our clients and customers every day. Looking back, it is clear to me that we have done a good job, with a final spurt at the end of the year that  managed to exceed expectations.

In 2021, we focused strongly on establishing a simpler, more digital and scalable business model through our ONE Intrum transformation programme.

In a digitalised world, the demands on ­flexible processes, efficient working methods and niche expertise are high. At Intrum, we must be able to provide our clients with in-depth industry knowledge and relevant services as well as local knowledge and high quality, regardless of market.

In 2021, we focused strongly on establishing a simpler, more digital and scalable business model through our ONE Intrum transformation programme. The aim is to further enhance our client offering while also taking advantage of our size and laying the foundation for continued long-term organic growth.

Economic recovery and focus on organic growth contributed to good results

During the first half year, we observed a gradually increased in­flow of credit management services and as summer approached we saw the first signs of recovery. The macroeconomic situation was generally positive and various measures were implemented to open up European economies. Europeans started going on holiday again and the gradual normalisation continued throughout the autumn, in terms of both consumer and business behaviour.

Our financial trend was in line with expectations, we began to see a return to a more normal seasonal pattern and cash revenues increased by 4 per cent over the year as a whole. Our clients and customers had a more positive outlook on the near future and the demand for our services increased, thanks to both higher consumption and confidence in economic growth. Clients in the financial sector also required more proactive management of their balance sheets. The trend of improved in­flows of new cases is expected to continue in 2022 also in the light of increased in­flation, weakened purchasing power and uncertain external factors.

In general, we find that an increasing number of clients see the benefits of outsourcing the management of late payments and debt collection so that they can concentrate on their core business. This also proves that our increased focus on customer care, compliance and ethical collection practices is appreciated.

The high level of commercial activity, combined with our work to improve the client offering, has produced results in the form of key new contracts across the board including sizeable servicing contracts in Spain, Italy and Greece and new partnerships with for example Svenska Handelsbanken in Sweden and Sainsbury’s Bank in the UK.

I am looking forward to these wins starting to positively impact revenues and profitability in the CMS segment. In general, we find that an increasing number of clients see the benefits of outsourcing the management of late payments and debt collection so that they can concentrate on their core business. This also proves that our increased focus on customer care, compliance and ethical collection practices is appreciated.

We saw a clear and broad-based recovery within Strategic Markets (Greece, Italy and Spain), which performed very strongly towards the end of 2021. The Portfolio Investments segment achieved record gross cash collections, exceeding expectations in 2021. This strong result was driven by all our markets and is testament to the strength of our operations, our ability to select and win transactions with a strong risk/return profile as well as our highly diversified portfolio composition.

Strengthened client proposition through ONE Intrum

With the ambition of fundamentally rebuilding Intrum to a technology and data driven, client oriented company which is simple, scalable, digital and organically growing, we are now pursuing our transformation program ONE Intrum. This is a comprehensive work which strengthens our competitiveness, our client offering and supports our growth ambitions and we are pleased that we so far have been able to deliver according to plan.

In order to meet our clients’ customers in a more aligned and efficient way and as part of the transformation program, we are expanding our global front offices and during the year we opened new centres in Athens, Bucharest and Malaga. In December, our global front offices served 15 of Intrum’s total of 25 markets and managed 16 per cent of all Intrum’s calls with end customers. The team leaders continued to focus strongly on recruitments, introductions and training of new employees.

In order to meet our clients’ customers in a more aligned and efficient way and as part of the transformation program, we are expanding our global front offices and during the year we opened new centres in Athens, Bucharest and Malaga.

This work is based on Intrum’s values and our principles for ethical and sound collection practices, which are also key parts of our sustainability agenda and common corporate culture. In addition to our physical front offices, we can also connect virtually with local agents and use the latest technology to share and establish best practice throughout the organisation.

I am also very excited about the increased client value and potential that data, analytics and automation technology can further unlock when implemented across global processes and systems. We can see significant benefits from advanced analysis and an automation roadmap, which are already visible beyond the scope and timeframe of the transformation.

Contributing to more sustainable development

There are few things that are as important to us as contributing to a sound economy where companies can grow and individuals have healthy finances. We strive to be a role model in the industry and in 2021 we made great strides in our sustainability agenda.

At the heart of our business is the “S” in ESG, in other words the social aspects. As part of our sustainability work, we have developed our “Treating Customers Fairly Instruction” which is based on 10 principles for ethical and sound collection and which we hope will be used as industry best practice.

During autumn 2021, we completed our first human rights due diligence in line with the UN Guiding Principles on Business and Human Rights and we are now working on defining actions to address these risks, important work that will continue during 2022. 

We strive to be a role model in the industry and in 2021 we made great strides in our sustainability agenda.

We have also moved climate change further up the agenda. We joined the Task Force on Climate Related Financial Disclosures (TCFD) during the year to help us report climate-related risks and opportunities in a transparent way and at the same time address those that are to be found within our operations. 

We have also started to report to the Carbon Disclosure Project (CDP), which evaluates companies’ climate efforts and actions to mitigate the effects of climate change. Taking responsibility for our carbon footprint, we are also financing UN-certified projects creating positive climate value corresponding to our greenhouse gas emissions in 2021.

It is very pleasing to see that our efforts have received external recognition in the form of strong ratings from MSCI and Sustainalytics, with Intrum scoring AA and being named a leader by MSCI, while being placed among the top 5 per cent of the best companies in the world by Sustainalytics.

Intrum has been committed to the UN Global Compact since 2016. We therefore report annually how we apply the Global Compact’s 10 sustainability principles, and we are constantly working to further integrate these principles into our business. We also continue to work with legislators and other bodies at European and national level to develop our industry in a sound and even more professional direction.

Russia’s invasion of Ukraine and the ongoing war is a terrible humanitarian catastrophe and our thoughts go to the millions of people affected. Intrum has, as many other corporations and private individuals, contributed with financial support to UNHCR’s work with supporting the many refugees who have been forced to leave their homes.

A team effort

There are plenty of signs that we are heading in the right direction. Both Intrum’s client satisfaction index and employee engagement index increased for the third year in a row and are now at the highest levels we have ever seen.

I am proud to be able to lead an organisation with such committed and competent team players, because it is this team that has enabled us to considerably improve all our key cash indicators, both year-on-year and in comparison with the pre-pandemic year of 2019.

Our main priorities, alongside serving our clients and customers in the best way possible, will be to continue to focus on the ONE Intrum transformation programme and to build up our organic growth.

I am looking forward to the coming year, even if the external factors currently are uncertain. At this point in time, we see insignificant direct effects on Intrum’s business activities of the ongoing war in Ukraine, but we are of course following the developments closely.

Notwithstanding the Ukraine-crisis, we expect to see increased growth as the commercial successes of 2021 start to make a more significant contribution, together with greater leverage resulting from the ONE Intrum programme in the form of improved profitability. Intrum is very well positioned in order to continue leading the development in Europe within both credit management services and portfolio investments.

Our main priorities, alongside serving our clients and customers in the best way possible, will be to continue to focus on the ONE Intrum transformation programme and to build up our organic growth.

Stockholm, March 2022

Anders Engdahl

President & CEO