Justus Hecking-Veltman is highly satisfied with the EOS Group result. The Member of the EOS Group’s Board of Directors and Chief Financial Officer explains the business performance and why investments played a major role in it.
Mr Hecking-Veltman, how did the recent financial year go from your point of view?
Justus Hecking-Veltman: I am happy about the extremely satisfactory result for the past financial year. Both for revenue and for earnings before tax, or EBT for short, we once again achieved the outstanding level of the previous year. That is remarkable because of the harmonization of the financial year we completed in the 2017/18 reporting period. At that time we included around 30 companies with 14 months in the consolidated year-end financial statements, which showed extraordinarily strong results because of that. Still, at EUR 813.7 million, EOS Group’s revenue exceeded the revenue from the previous year by 2.3 percent. With an EBT of EUR 270.5 million, we greatly surpassed the 200-million-euro mark for the second time in a row. This is a clear sign of our sustainable business growth.
How did you accomplish that?
Hecking-Veltman: We are much more diversified today than we were a few years ago because our investments are more balanced in the regions with EOS companies. In the last financial year, Germany was once more the most important market for the EOS Group. Western and Eastern Europe have caught up, though. In addition, we again held our ground in a highly competitive environment. With an investment of EUR 668 million in unsecured and secured receivables and real estate, we have further stepped up our exposure. Especially in the secured receivables segment, we have purchased NPL portfolios in numerous countries and increased our expertise and capacities.
The low interest rate phase is continuing. Doesn’t that make activities in debt purchasing more difficult?
Hecking-Veltman: Yes, because of the low interest rate phase most of the leading companies in the industry have intensified their investments in non-performing loans in the last few years. They saw good opportunities for high returns here. At the same time, some competitors recently merged and now have access to a broader capital base. However, some buyers have lately paid excessive amounts and many lenders of capital have become more cautious. This could mean that the market will not heat up further. The EOS Group also sees great potential in the purchase of NPLs in the future because we already have a lot of expertise in that business in numerous regions. We want to extend this to other countries and operate even more strongly in the future as a globally connected financial investor. In the current fiscal year we are again planning on an intense engagement in secured and unsecured debt purchase in Germany, Western and Eastern Europe.
EOS is increasingly operating as a globally connected investor.
How did the investments in IT at EOS last year turn out?
Hecking-Veltman: Overall, we invested EUR 10 million in technology in the last reporting year. For one thing, we are further expanding our Center of Analytics internationally. It forms the basis for the application of advanced analytics. The Center of Analytics platform analyses large data volumes and puts them in a form that our debt collection systems can work with. EOS in Germany is already connected to this platform. Our companies in France, Spain, and Belgium will follow. We are simultaneously advancing our trendsetting debt collection software systems and rolling them out internationally. For example, we are currently designing the Kollekto+ system for 12 countries in Eastern Europe. We are doing all of this not least of all to make greater use of synergies, reduce IT complexity within the Group, and thereby become more efficient. Over the longer term, it remains our goal to maintain or achieve a top three position in all established markets.
All of these investments require a strong capital base. What is the situation with regards to that?
Hecking-Veltman: Our capital structure continues to be very good. We deploy our capital in a profit-oriented manner and are continuously optimizing our financial structure. With an equity ratio of 28.7 percent, we are structured very solidly. This is also demonstrated by our A rating from Euler Hermes Rating, the 15th in a row for us.
EOS Annual Report 2018/19
July 2019
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