Thank you. Good morning, everyone, and welcome to this Hoist Finance earnings call for the second quarter of 2026.

I am Harry Vranjes, and next to me, I have Magnus Söderlund, our CFO, and Karin Tyche, our Chief Investor Relations Officer. Thank you all for logging in today and for showing interest in Hoist Finance.

We'll try to run you through this quite action-packed quarter in about 30 minutes, and try to leave as much room for questions as possible. There is a lot to cover.

We have also understood some of you are looking for some more color on the Azuro acquisition, we have added a slide about that later in the pack. In general, we are very pleased that we managed to close that transaction already in Q1.

As Magnus will talk to you about later, they are not in the P&L yet. We have the company, the people, and the assets on the balance sheet, but revenues and costs will only be visible from July onwards.

We are, however, already operating on the market, and we've been able to win a number of smaller portfolios since closing. Now, Hoist Finance is a growth company operating in a growing market.

Although the stock of NPLs on the balance sheets of the European banks is growing or are growing at a relatively modest pace, the stock today generates more NPL sales than it did in the past as sellers sell earlier. Now, this change in behavior is driven by a combination of factors, but certainly regulation is one of them.

The European regulators are still laser-focused on the NPL topic, and we expect them to be so for the foreseeable future. All in all, we assess that we will have favorable market conditions for the foreseeable future.

There are many, many things to highlight this quarter. I think one of the highlights is, of course, also this Moody's rating hike.

It will make our market financing marginally cheaper, and we also see it as a recognition of our rigorous risk management. With this rating, we believe we have the highest credit rating in the industry.

Now over to the highlights. Yes, it has been a record quarter.

We closed portfolio investments of some SEK 3.5 billion in the quarter at good returns. That is our highest Q2 ever.

Now, combined with the Azuro portfolio of SEK 2.6 billion, that means we added about SEK 6.1 billion to the total portfolio in the quarter, another record. The market is active, the pipeline is healthy, and our investment team is fully occupied for the second half of the year.

Currently, our portfolio stands at SEK 39.2 billion, up 26% from last year, and, of course, with that, we have reached and surpassed our volume ambition of SEK 36 billion by the end of 2026. That doesn't mean that we will be pausing acquisitions in any way.

We will, of course, continue to invest and build scale on this platform that we have. When it comes to new volume ambitions, we'll get back to you with that at the Capital Markets Day in September.

Very strong collection performance this quarter, 108%, broad-based, and I just want to thank all our operational teams for this delivery, really great work. Profit before tax came in at a strong SEK 632 million compared to SEK 310 million last year.

Now, we did get the VAT refund, and adjusting for that and the last batch of transaction costs for Azuro, we end up at an underlying earnings before tax of SEK 501 million, another record. I think we continue to see the benefits of the scale that we are now reaching.

Return on equity, our core target, came in at 27.5%, and, of course, if you then make the same adjustments as on the EBT, we end up at an underlying 21.6% return on equity, above the 20%. Now, earnings per share doubled, or more than doubled, I should say, to SEK 5.15 per share.

At the end of the period, we had a CET1 ratio of just over 13%, a very strong capital position. Moving over to the portfolio and the investments, it has been a busy quarter.

As we have highlighted before, to be the leading investor and manager of NPLs in Europe, you need to have significant presence in the six largest European economies. That is simply where the bulk of the NPLs are.

We now have about 80% of our portfolio diversified over those six markets: Germany, France, Italy, Spain, Poland, and now the UK. During the quarter, main investments were in France, Poland, Italy, and we're happy to also have closed a larger portfolio in Sweden.

It's been mostly unsecured this quarter, and then combined with the Azuro portfolio, which is also unsecured, the share of unsecured of the portfolio went up with a few percentage points, but this will fluctuate quarter-by-quarter. IRRs are holding up.

We have seen selective aggressiveness around certain transactions, but if returns drop below our hurdles, we walk away. Discipline is key, and the pipeline is healthy.

Far in July, we've signed transactions for about SEK 1 billion. We expect to close those transactions during the second half of the year.

I think the market trend of NPL volumes moving north continues. At present, almost half of the EU NPL volumes are on the balance sheets of French and German banks.

If you then add UK there, they have a NPL stock similar to Germany's, but a slightly more active NPL market. Let's say before Azuro, we had strong market positions in two of these three markets, and now we have it in all three.

Very happy about that. Then as per the end of the second quarter, the total portfolio now stands at SEK 39.2 billion book value, with an estimated remaining collections of SEK 66.9 billion.

With that, I'll hand over to Magnus to take you through the quarter in more detail.

Thank you, Harry. Good morning, all, and thank you for calling in.

If we look at the quarter, we see a continued strong delivery during a rather busy quarter with a record investment volume and the final implementation of the Azuro acquisition, amongst other things. Profit before tax at SEK 632 million versus SEK 310 million last year, meaning a 103% growth year-on-year, 105% excluding the FX impact.

As we have communicated during the quarter, we have received a VAT refund from the Swedish tax authorities after a mutually concluded agreement with a one-off P&L impact of SEK 164 million, which impacts this quarter. We also saw the last bit of transaction costs related to the Azuro acquisition, SEK 33 million.

If we exclude for these one-off items, we have an underlying profit before tax of SEK 501 million to be compared to last year's underlying SEK 335 million. Last year, we had a negative VAT court ruling in the Netherlands, the underlying growth ends at 49%.

We have a net profit of SEK 474 million to be compared to last year's SEK 234 million, rolling up in the same growth percentages as for pre-tax earnings. Excluding the mentioned one-off items, we see an underlying SEK 376 million of net profit for the quarter to be compared to SEK 254 million last year.

This leads up to a 48% growth in the underlying net profit, a really strong number. In the reported figures, we arrive at an ROE of 27.5%, which adjusted for the one-off items becomes 21.6% to be compared to last year's underlying 16.1%.

Then if we look at the P&L in a bit more detail, interest income, including the income from co-investments, at a combined SEK 1.46 billion, leading up to a 19% growth compared to last year. This to be compared to a book value growth of 26%.

Then, obviously, as Harry said, the one thing to keep in mind for the second quarter is that we see the SEK 2.6 billion investment of Azuro in the reported closing portfolio book value, but we don't see any P&L contribution since we closed the deal at the very end of June. Adjusting for this, the book value growth is at 18% and in line with the interest income development.

In the net interest expenses, we see an increased cost of SEK 20 million year-on-year, a 6% increase. This is a result of a more favorable interest rate environment combined with a lower NSFR for the quarter.

We report 138% compared to 143% last year and the fact that we are becoming more NSFR-efficient in our deposit composition. We continue to see a steady net interest margin in line with previous quarters and also last year.

In the impairment line, we see a continued strong performance coming from our collection activities. We closed the quarter with 108% compared to forecast and compared to last year's 104%.

We have collected a total SEK 3.1 billion in the quarter. As per normal, we have adjusted for timing for the majority of the secured overperformance, and we also see a strong overperformance in the unsecured collection.

We had a total overperformance of SEK 447 million, where we did timing adjustments for SEK 218 million. We also saw some performance-related net negative write-downs in the quarter of roughly SEK 50 million, all part of our intention to manage our portfolio in a prudent and responsible manner.

We also made an ECL adjustment related to the German performing portfolio of minus SEK 53 million. All of this leads up to the SEK 135 million we see in the impairment line.

Looking at other income, this is where we have booked the refunded VAT of SEK 164 million, and on top of that, we have contributions from the real estate sales in Spain and servicing revenue in Germany that we normally see every quarter. Net result of financial transactions is mainly driven by overperformance and gains coming from the notes held in our co-investment vehicles.

This all leads up to a total operating income of SEK 1.44 billion, which is a 38% growth compared to last year and a 23% growth excluding the VAT refund. On the cost side, the direct costs are growing by 15% compared to last year to be compared to the portfolio book value growth of 18%.

We're continuing to demonstrate a controlled and healthy cost level. If we look at the indirect costs, we see a reported 4% increase compared to last year.

In the second quarter, the costs also include the last bit of transaction costs from the Azuro transaction. If we exclude this, the underlying indirect costs are on flat levels compared to last year, where we also had the aforementioned SEK 25 million impact coming from the VAT case.

To conclude, adjusting for the one-off events in the quarter, we are at 21.6% ROE to be compared to last year's underlying 16.1%. We're very happy with the continued strong performance in 2026.

We have record-high investment volumes, we have good cost control, and a very strong operational performance. We can move to the next slide.

This is basically a recap. Just a short one.

Net interest income, 19% growth year-on-year compared to portfolio book value growth of 18% if we exclude the Azuro portfolio book value. We see a net interest income growth of 23%, further adding the increased liquidity efficiency where we have an NSFR materially lower than last year, 138% compared to last year's 143%.

We see another quarter of very strong operational performance. Our costs are at continued good and controlled levels, and the net profit reported at year-on-year 103% growth or 45% growth in the underlying result, adjusting for the one-off items.

We can move to the next one. Looking at the five-quarter trend, we see that direct costs are developing at a somewhat lower rate compared to collections in the second quarter, further illustrating our cost control and strong operational performance.

The collection figures in the second quarter is, however, positively impacted to some extent as we had two significant payments totaling roughly SEK 180 million, which were timing-related. If we adjust for those two, we see a quarterly collection of roughly SEK 2.9 billion in total.

This pretty much leads up to the underlying stable ratio that we now see on a regular basis. Our indirect costs, adjusting for the last piece of Azuro transaction costs, remain on flat levels compared to previous quarters.

For the FTE numbers, we see a rather static level for the total business. Here we also illustrate the immediate size of the organization post-acquisition.

We have a total of 197 FTEs coming in, where the split of direct/indirect is fairly similar to our existing business. Can go to the next slide.

Looking at our funding structure, the mix of sources is pretty much identical to Q1. We see a further improvement of the overall cost of funding down to 3.23%, and we remain competitively priced to further support our growth ambitions.

Looking at the funding cost in relation to our portfolio book value, we land at 4.1% for the second quarter. This is a further improvement from the first quarter, where we saw 4.3%.

We're maintaining our strong position from a funding perspective. We do have a lower NSFR ratio in the second quarter, which helps us, and on top of that, we are currently very NSFR-efficient in our deposit pool.

We issued an AT1 during the quarter at very favorable market terms to manage our capital position in this period of strong growth, and we also did a total SEK 500 million tap into our existing senior preferred instruments, SEK 350 [million] of that at STIBOR plus 125 bps and SEK 150 million at STIBOR plus 100. All in all, we're maintaining and improving our competitive edge on the funding side.

Can move to the next slide. Our CET1 ratio comes in just above 13%, down from 13.9% in Q1, and this is mainly driven by the record quarter investments, leaving us with a continued strong capital position moving forward.

LCR remains at continued high levels. Looking at our liquidity reserve, it remains at around SEK 27 billion.

We're becoming more efficient in the deposit structure. If we look at the ratio between our liquidity portfolio and our NPL portfolio, it comes in at 70%, which is a significant tightening from previous quarters.

We also have a slightly lower NSFR ratio, as I mentioned. To conclude, a very strong continuation of the year with record investment volumes, a continued great operational performance, and costs at controlled levels, this to achieve increased earnings and increased profitability moving forward.

I think with that, I will hand back to you, Harry.

Thank you, Magnus. Yes, on Azuro, we closed the acquisition in the last days of June, and we're, of course, very happy about that.

With this acquisition, we doubled our portfolio in the UK. As you can see, the UK now is by portfolio book value our second largest market.

We now have a larger presence in a very interesting market and in a very interesting segment, the SME segment in the UK. Up until now, as those of you who have been following us know, we have been handling the UK in a 100% outsourced model.

Of course, now going forward, we'll have greater optionality when it comes to servicing also our consumer debt portfolios, which we will continue to invest in. With this acquisition, we now have solid presence on the ground in all the six largest economies in Europe, where the bulk of the NPLs are.

UK represents, they don't report statistics through Eurostat anymore since Brexit, unfortunately, but it represents circa £30 billion to £35 billion of NPLs, which we see as similar levels as Germany, but with a maybe slightly more active portfolio market. Now, the team for the combined unit is up and running, and we expect to be fully integrated by the end of the year.

This is not a heavy integration. These teams are highly complementary.

Since closing this transaction in the last days of June, we have already won a few smaller SME portfolios, and we are looking forward to the autumn pipeline. Then to close off before we open up for questions, obviously strong quarter, we were happy with that.

Our business model on the surface is quite simple: so we invest in portfolios at good risk-adjusted returns; we then collect at or above 100% on the pricing curves of those purchases on those portfolios; and we ensure that we at all times have capital and liquidity to do so. I think, as you can see from this report in Q2, we have done well and even very well in all of these areas.

Of course, this builds a larger portfolio over time, and that generates more interest income. The scale has its benefits, right, obviously for covering our fixed costs and growing the operational leverage, but also in terms of single risk exposure.

As the portfolio becomes larger, any incremental new investment that we make will add proportionally less risk. We think we've come a long way or come some way towards becoming the leading investor and manager of non-performing loans in Europe, but there is still a lot more to do.

On the 9th of the 9th, we will hold a Capital Markets Day here in Stockholm to lay out our plans for the future. We hope to see as many of you as possible there.

With that, I think we thank you for the attention, and it's time to open up for questions.

Good morning. First, perhaps a technical question to you, Magnus.

You're mentioning that you're increasing your NSFR efficiency, and I guess this is that you're migrating deposits to your own platforms, also explained by the sort of improving ratio versus your book. Could you give any guidance on, I guess, A, inflows into your own deposit platforms, and B, if we can expect this migration to add additional improvements in terms of margins?

Yeah. Hi, Björn.

I think our own platforms is one part of the story, but then we're also becoming more efficient in the stuff we get through Raisin, right? We did the change from overnight a little over a year ago.

Now we are actively moving more of the deposits into longer-term tenures on Raisin, and that's obviously helping us because, as during the last 12 months of the tenure or the run time, the NSFR efficiency drops. Where we are today, we're at a really good place where we have a lot of our Raisin deposits in longer tenures on Raisin.

Then on top of that, we obviously have our own platforms, where we have seen a relatively good inflow since we opened up Germany, and now we also have Spain. I think we can guide a bit about them.

We have roughly SEK 3 billion received on our own platforms in Germany and Spain now as of today.

Thanks. Then on the Azuro acquisition, I guess first it sounds on you, Harry, that you're not only buying the company and its book, but rather you buy a platform to grow a bit more in UK.

How does the UK stand out in terms of, I guess, return metrics and attractiveness versus your other I guess euro area, and is correctly interpreted that this is sort of a trampoline for you as well to grow further in UK?

Thank you, Björn. Yes, this is going to be a platform for further growth in the UK.

I think we are happy with the returns on the consumer side. I think what we can say is that the returns on the SME side are slightly better.

We will continue to grow in both those segments. We believe the UK market is in an interesting moment right now, and we believe there will be volume to pick up there at good returns.

Thanks. Just finally, Azuro in itself as of today, in terms of cost-income, ROE, etc., how does it perform versus you?

If weaker, can we expect you to have some redundancy costs and sort of a right-sizing one-off costs coming this year as well if you want to slim it and improve it?

I think Azuro is performing very nicely. We will not be giving you any ROE or earnings numbers on the call today.

We'll see it baked in the Q3 report. As I mentioned before, I think the integration and so on, this is highly complementary, right?

These are teams doing legal collection on SME cases, and our existing or former UK organization was mainly doing consumer throughout outsourced operations. This will be a fairly light integration going forward.

We don't expect any major integration costs or so. Obviously, they need to come over into our IT cloud and all of this, but those are fairly light-touch activities.

Great. Thank you.

Thank you.

Good morning. Thanks for the presentation and for taking the question.

Maybe first, just to check, Magnus, did I hear you right that you said you had two larger collections of SEK 180 million? If so, what was that?

It sounds very, very high given that you have such a granular book.

We do have a granular book. One of them originates from an indemnity payment, basically.

It's a sort of putback where we have claims that didn't fulfill the contractual obligations with the seller. We on an early basis identify which cases should be sent back, and then we receive the cash back for that.

That's one part of it. Then we had a larger investment in one of our markets where the interim collection piece was significant, but also built into the collection forecast, it doesn't impact collection performance per se, but it obviously drives the total gross collection, which we are looking at at that particular graph.

It's just a coincidence that they both happened in Q2, and they were of such size that I think it's worthwhile highlighting that. Then looking at the gross collection versus direct cost sort of makes sense again in relation to our sort of previous performance.

Got it, thanks. Then on the NSFR, you already touched upon that a bit, but I suppose you look to further increase the efficiency, but how about the actual kind of NSFR percentage?

Would you want to come further down than 138%, or is that a satisfactory level going forward?

We're always looking to optimize our deposit structure, of course, and I think we have done a really good job with that, which is now sort of bearing fruit now in Q2. When it comes to the actual percentage, we obviously want to stay well above the 130 regulatory level.

I'm not going to guide for an exact number, but if we would sort of start closing in on 135%, I would become a bit more active. We are active on a daily basis and monitoring and forecasting this.

I feel very comfortable that we are in a good place to sort of remain at a reasonable gap above the regulatory limits. I have no concerns about that.

Great. Then the last question would be more on the investment pipeline.

How far out do you have visibility, and it sounds like banks have started to sell a bit earlier, I suppose that's part through the backstop, but do you see that there's anything kind of temporary that's getting banks to accelerate now that wouldn't be sustainable over the long term in terms of activity you're seeing in the market?

I think it's difficult to say. I think we have typically, I would say, 9 months concrete, let's say, view, and then we have through our relationships with the banks, we can sort of assume what happens after that.

Some banks are very, very structured and very scheduled in their offloading of NPLs. I think sort of concrete visibility is sort of 9 months.

We don't really see that this is some sort of a bump or temporary push. This has been, I would say, growing gradually over the last 2, 3 years, the pipeline.

Got it. Thanks.

That's all for me. Impressive results, and have a nice summer.

Thank you. You too, Ermin.

Thank you.

Good morning, guys. Took two for me, please.

The first one was the credit loss that you reported. How much of that portfolio that is performing is provisioned including the cost you took for this quarter?

That's the first one. Secondly, the coming on impairment, it seems like you're surprising the market quarter after quarter.

If you look at consensus numbers, is there anything you think the market is not quite understanding rightly or you think those forecasts seems reasonable?

I can start with the second one. I think our forecasts are definitely reasonable.

If we look at a longer time period like six quarters, we have sort of stood out in the last two quarters, but we aim to be above 100%, and this we have done in a really good way. When it comes to the ECL provisioning, I think that's what you're referring to, right, Markus?

Can you just repeat?

The sound was a bit That one, that was exactly right. However, the one that you just answered, I was more referring to when you look at the market's expectations in consensus.

It seems like you have been surprising on that line for many quarters, and I was just thinking if you think that market is not understanding what you're doing there, since you continue to surprise on the upside there.

It's difficult to answer what they put into the models. We have been delivering 105% collection performance on average, I think, all of '24 and '25.

Also in '25, I think we had a very strong 108% Q4. I think we had 106% quarter as well.

I think and typically, we are coming into the seasonally slower Q3 now. I think, above 105 or around 105 is where we've been in the last yeah, what is it, 8 to 10 quarters if you do it some sort of average.

I wouldn't say there are any sort of misconceptions or misunderstandings. It's just that to me, this is a testimony that first of all, we have a great operational set up, we have a great operational box, and we are very prudent in what we buy and we are disciplined, and then this comes out.

As Harry said, it has been fluctuating over time, right? Now in the past 6 to 9 months, we've seen really high levels, but I think that's more to us buying high-quality stuff and actually performing on it.

Then the ECL, Marcus, that's the SEK 43 million you're referring to, right?

Yes.

Sorry, if you could just repeat that question because

I was wondering what the provision level of that portfolio is.

I think it's around, would it be 4,

4%, 5%? 4%, 5%?

Yeah.

Okay. Thanks, that's all for me.

Thanks.

Thank you, Markus.

Hey, good morning. You mentioned Germany and France as markets with high levels of NPLs in absolute level.

It's noted that you made some acquisitions in France during the quarter. Could you please describe or give a comment on the opportunities in France specifically and if you're seeing a greater willingness to transact in that market more recently?

Yes. Hey, good morning, Kyle.

The audio was a little bit choppy. Yes, I think the market in France is, I think, very active at the moment.

There has been a large stock of stage 2 loans in France for quite some time. I guess what we're seeing now is that some of that is bleeding into sort of stage 3.

What we see is typically a lot of secured, a lot of SME portfolios there, right? The market is getting increasingly active here.

Great, thank you very much. Just that one there.

Thank you.

All right. We have one written question: "Please elaborate on the key differences for Hoist between managing NPLs for SMEs and private individuals, respectively, in terms of return and risk characteristics as well as capital adequacy requirements and also debt collection."

A question for you, Harry.

Okay. There's a lot in there.

I think, yeah, the main difference between when we buy consumer portfolios compared to SME portfolios, secured or unsecured, is that the consumer portfolios, typically it's high volume, small ticket, statistical underwriting, where our database from 30 years back basically of continuous investments gives us a really, really strong pricing capability. When it comes to the larger-ticket SMEs and also to some extent mortgages and so on, then it's line-by-line underwriting, right?

Then the teams dive into each and every asset and sort of look at the liquidation values of those, right? We never assume that we will turn a business around.

We price them at liquidation value. In terms of return and risk characteristics, I would say typically we have around the same levels of returns for these, right?

We have our hurdles, and we stick to them regardless if it's unsecured or secured. Then when it comes to capital adequacy requirements, typically, NPLs, regardless if it's SME or consumer, is 100% risk weight.

Then, of course, in the actual debt collection, the teams work very differently. When we talk about SME, line-by-line, and mortgages and so on, it is typically the collectors have a pool of assets each, a pool of loans each that they manage, whereas when it's in the unsecured business or the consumer business, typically, there is a lot more, let's say, machine involvement making sure that the agents are working with the best case at any given time.

I hope that explains that question.

Great. Thanks for that.

One more question then: "Are we looking to do more M&As going forward?"

Yes, thank you for that. We are a well-capitalized actor in the industry, and of course, we do get incoming calls, and there are always interesting opportunities that we are looking for.

I think as we have said before, we are a very, very picky buyer. Our strategy is to buy portfolios, loan portfolios, and any company that we look at will need to have one of those, preferably one of very high quality, so that it becomes profitable for Hoist from day one.

We always are open for opportunities, and I think I'll leave it at that.

Great. That's all the questions we had.

Thanks a lot for dialing in today.

Yes, thank you, everyone. I wish you all a great summer.

For those of you who are already on vacation, sorry to interrupt it, and for those of you who are leaving like myself, enjoy your holidays.

Thank you.