Message from the CEO

Building strength in challenging times

In 2020 our resilience and endurance were tested. Looking back at a demanding year, we are pleased to deliver solid results and emerge as a stronger Group.

2020 was an extraordinary year for individuals, for businesses and for society in general. As we finalise this annual report the world is still fighting the Covid-19 pandemic. The pandemic has challenged us to adapt to new ways of living, working and interacting. While we have not seen the end of the pandemic, our results in 2020 are a testament to our ability to adapt and turn the challenge into an opportunity.

When the world as we knew it changed dramatically in March 2020, our main priority was the health and safety of our employees and this remains our focus. In just a few weeks, we shifted more than 90 % of our operations to work-from-home. We witnessed an organization that was agile and able to quickly find new solutions that ensured both safe working conditions and stable operations. I would like to express my gratitude to all employees in the B2Holding Group. I am proud of how our employees are handling the persistent challenging and uncertain situation, ensuring business continuity and limited operational impact.

B2Holding’s mission is to bridge the gap in the credit chain caused by non-performing loans (NPL). As a result of the pandemic, this is more important than ever. Following years of gradual improvement, the trend of NPL ratios is now rising across Europe and is demonstrative of the financial impact of the pandemic and how it has affected people and businesses. In the aftermath of the pandemic, our mission is being reinforced and the importance of our role in the financial ecosystem prevails.

As a debt collection company, in addition to our responsibilities to our customers, we have a responsibility towards society as a whole. Ethical and responsible collections have always driven our business, and in these challenging times it has been more important than ever. As a result of the pandemic, more people find themselves in challenging and uncertain financial situations. During the year, we have implemented new protocols to identify and follow up those that have been affected by the pandemic so that we can offer tailor-made solutions for them.

In the aftermath of the pandemic, our mission is being reinforced and the importance of our role in the financial ecosystem prevails.

Stress test scenarios were an important tool we employed when planning our responses to the changing environment during the year. Fortunately, collections in every quarter exceeded our expectations in these scenarios. At the end of the year, we are pleased to report gross collections higher than the previous year. Especially Northern Europe and Poland showed resilience, with performance close to pre-pandemic forecasts. In March, we implemented a cost reduction programme with ambitious targets and during the year we have been able to significantly reduce the general cost level in the Group while ensuring limited impact on our workforce.

In an uncertain macroeconomic environment with lower visibility, the valuation and pricing of portfolios is challenging, and as a result of this the Group chose to significantly reduce its investments during 2020 in order to preserve capital. The majority of our investments during the year were forward flow portfolios in Northern Europe and Poland. While the market activity was reduced, we shifted our focus towards organizational and operational improvements. In June 2020 we reviewed our business plan and reinforced our main strategic targets; to maintain profitable growth via focused investments in our core markets and to strengthen the Group’s servicing capabilities. We are in the process of transforming the Group into a more cost-efficient operating model where efficiency is preferred versus footprint, and where we leverage the Group’s servicing capabilities by increasing assets under management.

During 2020 we have reinforced our organization with more centralized risk and investment functions. Additionally, we have established senior positions in compliance and internal control, launched a new Code of Conduct and improved our compliance training and awareness programme.

Operationally, we are continuously exploring new ways to improve efficiency and effectiveness. Program Foresight, a Group-wide program focusing on better utilization of data and artificial intelligence, is progressing and yielding results in both entities and regions. During the pandemic, digital ways to interact with our customers have been important and we see clear indications that the more digitally mature regions are also the most resilient. By the end of 2021, digital customer platforms will be a prioritized channel in all our core markets.

An important part of our revised strategy is our reinforced commitment to sustainable development. In early 2021, B2Holding became a member of the UN Global Compact, committing to the Ten Principles and incorporating them into strategies, policies, and procedures. The sustainability report has been improved and is prepared based on the Global Reporting Initiatives (GRI) standards, as well as the Stock Exchange Guidelines. This helps us to be more transparent and to provide measurable sustainability reporting. Several other initiatives have been carried out in 2020, including an in-depth Environmental, Social and Governance (ESG) analysis carried out by an external adviser. Such an analysis has given us valuable insight to improve and strengthen our ESG activities going forward. ESG is more important than ever, and we are committed to take responsibility and actions.

Outlook for 2021

Going into 2021, we are a quite different company than one year ago. We have a stronger balance sheet and a strengthened liquidity position, providing additional financial flexibility. The Group has improved operations, increased efficiency, and a more developed central organization. This combination gives us a solid foundation to achieve our strategic goals. In the coming years, we expect increased volumes of non-performing loans and improved yields. That said, we remain uncertain about the long-term macroeconomic effects of the pandemic, and we will therefore continue with our cautious approach going forward. Our focus is to further strengthen our earnings via profitable investments and to continue to develop our servicing platforms. We see many positives for our industry going forward and we believe we are very well-positioned for the future.


Oslo, 21 April 2021

Erik J. Johnsen
Chief Executive Officer