B2Holding provides an update on the Group’s operations and financial position 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. Business operations 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 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 of NOK 1,276 million 1) * Operating profit of NOK 245 million 2) * Cash EBITDA of NOK 916 million * Portfolio purchases of NOK 473 million * ERC at end of quarter NOK 25,431 million 3) 1) "Gross cash collection" includes the Group’s share of gross cash collection for portfolios purchased and held in SPVs and joint ventures amounting to NOK 75 million. 2) "Operating profit" includes a net credit loss of NOK 155 million 3) "ERC" includes Group’s share of ERC for portfolios purchased and held in SPVs and joint ventures amounting to NOK 1,935 million. Financial position With reference to the bond buy-back announced 11 May 2020, B2Holding has repurchased additional bonds in the second quarter in the nominal amount of EUR 4.8 million in the Company’s outstanding bond with ticker B2H01 (ISIN: NO0010753072) maturing on 8 December 2020. The bonds were repurchased at a price of 100 % (par). After the transaction, the Company owns EUR 79.8 million in B2H01 which leaves EUR 70.2 million still outstanding. Per end of June, B2Holding had a liquidity reserve of EUR 275 million. The liquidity reserve includes among others Treasury Bond with the fair value amount of EUR 105 million and EUR 155 million in unutilised RCF. B2Holding was in line with all the original financial covenants as of second quarter and expects to be in compliance going forward. However, the most pessimistic Covid-19 stress test scenarios indicated a pressure on covenants short term, therefore new temporary financial covenants until 30 March 2021 have been agreed with the RCF banks to increase the headroom even further. “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. *Definitions of alternative performance measures can be found in B2Holding’s Annual report 2019 (b2holding-annualreport.no) and are also available on the Company's website: www.b2holding.no For further information, please contact: Erik J. Johnsen CEO, B2Holding ASA Mobile: +47 415 77 055 E-mail: ejj@b2holding.no or Rasmus Hansson Head of M&A and IR, B2Holding ASA Mobile: +47 952 55 842 E-mail: rh@b2holding.no
