Message from CEO

A Year in Transition

In 2019, we outlined a new strategy for the Group with a stronger focus on our core markets and increased servicing revenues through assets under management, while continuing to improve the effectiveness and efficiency in our operations.

Bridging the gap

In B2Holding we acknowledge that a period of financial difficulty can occur to many of us for various reasons, which eventually can end up in a default situation. The defaulted debt represents a gap in the credit chain, causing a strain on the balance sheet of lenders and a difficult financial situation for the debtor. We work to bridge this gap. That is our purpose and our responsibility as a debt solutions provider. Through our business, we contribute to handling society’s debt problems, and we shall always be a partner that banks and other vendors of non-performing debt portfolios can trust. Last, but most importantly, we aim to give our customers – the debtors – a new chance by finding solutions to repay their debts and help them get back on track.

Focus areas in 2019

The year of 2019 represented a change of leadership in B2Holding. Since August 2019 and permanently from February 2020, I have had the honour of being CEO of the Group. Since joining the Company in 2013, I have witnessed the Company’s development from being a small industry challenger to becoming one of the leading players in Europe. Now, I have taken on the mission to lead the Company into the next phase.

Our primary focus has shifted from mainly being a debt investor to also continue our focus on increased debt servicing. We will leverage our servicing capabilities by increasing assets under management. This is a less capital-intensive model that will reduce the risk of the Company and increase our profitability going forward. Furthermore, we will become more focused as a Group and take advantage of the opportunities we identify in our core markets through a more cost-efficient model.

The first step towards realizing the strategy was the implementation of a new organization structure in October 2019. Our new structure represents a clear distinction between our primary business lines, Unsecured asset management and Secured asset management. This gives us increased operational focus and control. Moreover, the new organization structure improves transparency, risk management and compliance throughout the organization.

I believe that to maintain our position as a competitive player in the debt collection industry we need to continuously improve our effectiveness – do the right things – and efficiency – do things right. Throughout 2019 we have focused on improved use of data and digitalisation of services and processes. We have further developed our Group Data Warehouse to extract more value from our data. This has enabled us to increase the precision of our analytics and the efficiency in reporting and modelling, which in turn leads to more accurate pricing of portfolios.

Technology and digitalisation have also been on top of our agenda in 2019 and will continue to be a priority in 2020. Next-generation robotics was successfully launched as pilot projects in some of our markets and is used in simple and repeatable processes to increase efficiency in operations. We also see that online customer portals with easy payments modules enables more simplified communication and improve our ability to find amicable solutions. With digital and technological improvements, I believe we will see a positive effect on our cost to collect going forward.

Despite seeing many positive developments in the Group in 2019, the full-year results did not match our ambitions. While our core business of unsecured collections performed well, challenges within secured recoveries that surfaced during the first half of 2019 largely affected our overall performance. To reduce the risk of similar challenges in the future, the Secured asset management team was reorganized with additional specialized resources and stronger head office involvement and oversight.

To maintain our position as a competitive player in the debt collection industry we need to continuously improve our effectiveness – do the right things – and efficiency – do things right.

Outlook for 2020

In our fourth quarter report I stated that “2020 will be a year of transition for the Group”. Since then, the Covid-19 outbreak has accelerated all over the world. The pandemic and the measures taken to control the spread have had a major impact on societies and the world economy. Thus, at the time of writing this message, my statement has several new dimensions.

In the time of crisis, I am proud to see that our organization has proved its strength and agility. In a few days, we managed to shift more than 90 % of the operations to work from home to secure the health and safety of our employees. Our employees have ensured business continuity and limited operational impact in a challenging situation. Still, the full extent, consequences and duration of the Covid-19 pandemic are not visible yet.

Ethical and responsible collections always drive our business, but especially in these challenging times. We acknowledge our social responsibility and safeguard a respectful treatment of those customers that are most vulnerable.

Although we must expect some challenging quarters ahead, I am confident that B2Holding will benefit from our strong foundation and overcome this pandemic.

We are planning for the future and shall continue to be an important player in the European credit market with the goal of delivering shareholder value for years to come.

Oslo, April 2020

Erik J. Johnsen

Erik J. Johnsen
Chief Executive Officer