B2Holding ASA: Financial results for the second quarter

The B2Holding Group is well diversified geographically with presence in 23 European countries. During the second quarter the Group observed large variations on how the operations across Europe were affected by the Covid-19 pandemic, while the impact on the Group as a whole was limited. B2Holding has managed to maintain a high level of business activity, and at the same time been able to safeguard the health and safety of the employees in accordance with recommendations from and restrictions imposed by the authorities in the countries where the Group operates.

The Group has made various stress test scenarios during the ongoing pandemic and the collections in the second quarter have exceeded these scenarios, while costs are in line with the initiated cost saving program.

In Northern Europe and Poland, representing more than 50% of the Group’s estimated remaining collections (ERC), the pandemic has had little or no impact on collections. Of the countries most affected by the pandemic, such as Italy and Spain with a combined ERC of around 7%, there has been a larger impact on collections. France, representing around 5% of ERC, has only been moderately affected. The impact on the Group’s business in South East Europe, representing 13% of ERC, has been larger than in Poland and Northern Europe, with Bulgaria the most affected so far.

In the Central European countries, representing 23% of ERC, the Balkan countries were most affected, however the Group has observed fairly good recoveries on secured portfolios during the quarter. The unsecured collections in Croatia have been significantly constrained as the Croatian authorities have closed down their bailiff services in response to the pandemic.

Second quarter financial highlights (preliminary figures):

* Gross cash collection: EUR 117 million

* Operating profit: EUR 22.5 million

* Cash EBITDA: EUR 84 million

* Portfolio purchases: EUR 43 million

* ERC at end of quarter: EUR 3 billion

“During this challenging period, B2Holding has been able to preserve capital by renegotiating forward flow agreements and reducing investments in the second quarter. We have also been able to reduce costs in accordance with our cost saving targets, and will have continued focus on cost saving initiatives going forward. We will be cautious going forward as the macroeconomic effects of the pandemic are still uncertain.

During the quarter we have had a good dialogue with our banks, and we are very pleased with the support they have shown us by modifying our covenant structure. A changed covenant structure combined with a robust balance sheet leaves us in a good position to take an active role in the European NPL market going forward. We expect an improved market and interesting opportunities for debt purchasing, but also an increased potential for servicing revenues”, says Erik J. Johnsen, CEO of B2Holding ASA.