annual report 2019 creation. transformation. …...2020/04/28 · annual report 2019 creation...
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ANNUAL REPORT 2019
Companies are not, to borrow a phrase from Spinoza, “an empire within an empire.” To make growth sustainable, attract new talent and win new markets, they must know how to listen and adapt to the changing world around them in order to incorporate these changes into their day-to-day reality. Our group, created by the merger between MCS and DSO, specializes in debt follow-up and collection management and, more broadly, in managing credit and billing chains. In this context, it is up to us to be particularly attentive to major developments in: • technology, with the progressive digitization
of processes and the replacement of employee procedures by algorithms but with the possibility of personalizing the relationships they build with their contacts;
• the environment, with the objective of achieving carbon neutrality to the greatest extent possible;
• society, with, for each company, a responsible commitment to the territories in which it is established and the awareness of being an actor for the common good.
In our activities, some of the business processes that we implement to reach a payment solution with our clients’ clients will be digitized. Our teams will need to mobilize a much higher level of relational intelligence than in the past since technology will handle the simplest processes by itself. To provide ever more support to our clients, we must therefore find a new balance between technological and digital intelligence / human and relational intelligence by developing our ability to listen to an extent never before achieved, and by deftly segmenting the debt that we manage in order to give our clients even more personalized treatment. By doing so, we are preparing our teams to evolve in an increasingly digitalized world by making them aware of the outstanding character of their skills.
This ability to listen serves a simple and clear objective: to find fair solutions for late payments or payment incidents and, for those who are financially vulnerable, to be able to understand their situation and assist and support them over time. We must also demonstrate this concern for the complex individual situations of our clients for our employees, by offering each of them a new experience within the group. Finally, we have a responsibility as a local player in the ecosystems where our offices are located both in France and abroad. As for our environmental footprint, at our scale and as a service company, it is imperative that we review the impact of our data centers, of our travel policies and, more generally, our modes of consumption. Now, as we are finishing our report, the public health crisis that is severely affecting the two countries where our clients operate (France and Italy) strengthens our conviction that our group can fully play its role as a corporate citizen - by adapting, with increased attentiveness, empathy and caring to our environment, our organization, the management of our employer/employee relationship and our collection activities in order to consider the situation of everyone: employees, clients, clients of our clients and partners.When the time came to give the MCS-DSO entity a new name, an operation that consists in defining a new ambition, it was clear to us that the name “iQera“ summarized all of these challenges. In today’s complex and evolving environment, our work and the ethos that underlies it, remains critically important.iQera, to blend technology and heart intelligence.iQera, to prepare for the future effectively and sustainably.
ANNUAL REPORT 2019
Jean-François BensaheliQera CEO
Edit
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iQera.
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06 iQera: 3 syllables, 3 driving forces
08 Mission: create the difference
10 3 firm beliefs
12 They create the difference every day, they are iQera
A creative approach set within a long-term strategy.
ANNUAL REPORT 2019
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Sum
mary iQera,
create the difference.
CREATION
iQera 3 syllables, 3 driving forces
For us, intelligence is characterized by investments in
digitalization and algorithms, but also in human and relational
intelligence. If our employees were musicians, we would want
them to develop near perfect pitch, if they don’t already come by
it naturally.
the English “care” It expresses the attention and care given to our relationships
within the group, but also with our clients, their clients and all of
our stakeholders.
iQ is the symbol of different types of intelligence.
Qer, translates…
era proposes a vision of the future.
ANNUAL REPORT 2019
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This term designates the new era we are entering and for which we are preparing ourselves.
the oak in Latin« Quercus », is the symbol of power, of justice and longevity.
the Breton “ ker” It evokes the home and the living place that we build with and
for our colleagues.
“Leker” in Mauritian CreoleIt means the heart.
CREATIONANNUAL REPORT 2019
Another concept of relationship
Because each interaction counts, we place emotional and relational intelligence at the center of our assistance and support.
Because each bit of information counts, we continually invest in data analysis, technologies and creative processes in order to offer an enhanced client experience.
Finally, because each employee counts, we make sure that our entrepreneurial project can offer a unique adventure and contribute to everyone’s development.
Create the difference: a signature as commitment
In order to create the difference for our teams and our future employees, for our clients, for their clients, for our partners and, more broadly, for our entire ecosystem, we are constantly reinventing our businesses and our practices.
This inclusive value creation process is expressed every day by working on the symmetry of attention to clients and employees and by combining human and digital intelligence, boldness and responsibility, method and creativity.
Because each interaction counts, iQera defines itself visually as an experiential brand. It reveals all of its singularity by combining black & white images, a logo with muted and more vivid colors, visuals that are aesthetic or tinged with humor.
Resolutely turned toward the future, the group nevertheless draws its strength and its personality from its teams, its history and its lengthy experience in the market. This is why the visual identity relies on the richness of the Franco-Italian heritage represented through its arts, its culture, its handicrafts, its architecture and its human capital, the employees of the group.
To watch the film about the brand’s launch:
Our mission
A global view
iQera is the trusted partner of companies and financial institutions. We assist and support them in controlling their risks and in transforming their Finance, Credit and Client Relations functions. We also intervene at each step of the client financial cycle by developing tailor-made solutions, even in the most digitalized cycles, with an innate sense of relationship.
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Create the difference
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Embodying the iQera experience
CRÉATIONCREATIONANNUAL REPORT 2019
3 firm beliefsOne hundred group employees from 11 of our offices around the world identified three firm beliefs that reflect what drives us and what we wish to be in this new group.
They give us a vision and meaning, inspire our organization, reflect our strategy and guide us day-to-day.
These firm beliefs are based on three action verbs and are conveyed by concrete associated behaviors.
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Achieve the new means...
• following our intuition, loving exploration and excelling
• making risk an asset
• learning to let go, to let our personality and our creativity express themselves
• knowing how to embrace change and error in order to transform them into opportunities for learning and innovation
Team play
Leave a positive impact
means...
• recognizing each person’s value, and revealing all forms of talent, to boost performance
• listening, feeling responsible for one another
• taking pleasure in cultivating a community culture
means...
• finding sustenance in one’s mission and one’s relationships in order to find fulfillment and make our company better
• offering a unique experience to our clients
• more broadly, strengthening our community engagement
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CREATIONANNUAL REPORT 2019
They create the difference every day
• AASIYAH • AASIYAH BINT AHMED • ABDOUL • ABDUR RAHMAN TALHA • ABDURRAHMAN ZUBAIR • ABELA • ABIR • ABOUBACAR • ADELE • ADELINE • ADELINE INGRID • ADIL • ADRIANA • ADRIEN • ADRIEN JOSEPH GUILLAUME • AGIGEN NAIDOO • AGNESE • AHLAM • AHLAME • AICHA • AIDA • AISSATA • AKHEEL SHARMA • ALAIN • ALBERTO • ALESSANDRA • ALESSANDRO • ALESSIA • ALESSIO • ALEXANDRA • ALEXANDRE • ALEXIA • ALFIO • ALI • ALICE • ALIM MUHAMMAD TWAHIR • ALINE • ALISIA • ALISON • ALLISON • AL-TAIFF • ALVARO • ALVIN ROAN NATH • ALVINA • AMADOU • AMANDA • AMANDINE • AMBRA • AMEL • AMELIE • AMINA • AMINATA • ANAELLE • ANAIS • ANALIA • ANCHIMED • ANDREA • ANDREA MARIA • ANDREAS • ANGE • ANGELA • ANGELINA • ANGELIQUE • ANGELIQUE PERRINE MARIE • ANGELITA • ANGELO • ANIA • ANJALI • ANNA • ANNA LORI • ANNA MARIA • ANNA MARISA • ANNA TIZIANA • ANNABELLE BLANDINE • ANNAELLE • ANNAGAELLE • ANNALISA • ANNARITA • ANNE • ANNE MARIE JENNIFER LAETICIA • ANNE SOPHIE • ANNE-CLAIRE MARIE-LISA • ANNE-FANNY • ANNE-LAURE • ANNELISE • ANNE-VERONIQUE • ANNIE • ANOOP • ANOUCHKA • ANSHABEE • ANTHEA • ANTHONY • ANTOINE • ANTOINE FRANCOIS JACQUES • ANTONELLA • ANTONIETTA • ANTONIO • ANUSHA NISHA • ARAMATA • ARIANNA • ARMANDO • ARNALDO SULLIVAN • ARNAUD • AROUN • ARTEE • ARTURO • ASHISH KUMAR • ASHLEN MOONSAMY PONNAPPAH • ASHVIN • ASHVIN GUPTA • ASHVIN KUMAR • ASMA • ASSUNTA ASTRID • ATAE • ATISH • AUDE • AUDREY • AURELIA • AURELIE • AURELIE AYEMONE AURORE • AURELIE JANE • AURELIEN • AURORE • AVINDA • AXEL STEPHANE GWENAEL • AXELLE • AYOUB • AZHAR • BARBARA • BARBATA • BASMA • BEATRICE • BEEBEE ZAHRAA • BELAAL ABOO BAKER • BENEDICTE • BENJAMIN • BENOIT • BENOIT DAVID • BERENGERE • BERENICE • BERNARD • BERNARD RALDY • BERTRAND • BHAVNA • BHOOVINDRA SHARMA YADAV • BIBI AZRAA BANON • BIBI FAATWIMAH NOOR AZHAAR • BIBI HANAA • BIBI NOOHAIRAH • BIBI SAMEENA • BIBI SHABNEEZ AYESHAKHAN • BLANCHE • BOOLAKY CASSAM MOHAMED YASSIN • BORIS • BOUCHRA • BRIGITTE • BRIJ • BRINEA • BRUCE ALEXANDRE • BRUNO • BRYAN • BURTY GUILLAUME • CAMILA • CAMILLE • CAMLAH • CARINE • CARLA • CARLO • CARLOTTA • CARMELA • CARMELINA MARIE • CARMEN • CAROLE • CAROLINE • CASSANDRA • CATERINA • CATHERINE • CECILE • CECILIA • CEDRIC • CÉDRIC ALEXANDRE JEAN • CEDRIC EMMANUEL • CELIA • CELINE • CESARE • CHANDHINEE • CHANTAL • CHARFA • CHARLENE • CHARLES • CHARLINE • CHARLOTTE • CHAYA DEVI • CHESHNA • CHIARA • CHLOE • CHRISTEL • CHRISTELE • CHRISTELLE • CHRISTELLE EMILIE • CHRISTIAN • CHRISTIANA • CHRISTINE • CHRISTOPHE • CHRISTOPHER KONG SIN • CIHAM • CINDY • CINZIA • CLAIRE • CLARA • CLAUDE • CLAUDIA • CLAUDIE • CLAUDINE • CLAUDIO • CLEMENTINE • CLOTILDE • COME • CONCHITA • CONSTANT • CONSUELO • CORALIE • CORINA • MIHAELA • CORINNE • CORRADO • COSIMA • COSTANZA • COVILLA • CRISTIANA • CRISTINA • CYRIL • CYRILLE • DALILA • DAMIANO • DANALUTCHMEE • DANEV YDRISS • DANIELA • DANIELE • DANISHA • DANTE • DARIA • DARIO • DARIO DOMENICO • DARREL ADRIEN • DAVID • DAVID • RIDOLPH WILLBY VIRGINO • DAVIDE • DAVILEN DHINAKARAN • DAVON LOUIS JOHNSLEY OLIVER • DAVY GERMAIN • DEBORA • DEBORAH • DEBORAH STEPHANIE • DEEVIAM DORINA • DELPHINE • DESIREE • DHANWANTEE SINGH • DHIRENDRE SHARMA • DIANE ESTELLE • DIANNE BELINDA • DIKRA • DIVYA LOVENAH • DOMENICO • DOMINIQUE • DONOVIC • DOORMEELAH • DORIS • DOROTHEE • DOROTHY • DOURGESHWAREE • DRISS • EDITH REINE • EDOUYNA • EDWIN • ELENA • ELEONORA • ELIANE • ELIES • ELIS • ELISA • ELISABETH • ELISABETTA • ELISE • ELODIE • ELSINA • EMANUELA • EMANUELE • EMELINE • EMERIC • EMILIA ANTONIA RITA • EMILIE • EMILIE DAPHNE • EMMA • EMMANUEL • EMMANUELLE • ENA LUZ • ERIC • ERIKA • ERWAN • ESHA • ESMERALDA • ESTELLE • ESTELLE CHRISTELLE • ESTHER DEBORAH • ETIENNE • EUGENIA • EUGENIE • EVA • EVANDRO • EVANS RUBENS • EVELYNE • EZEKIEL JEAN GREGORY ADRIEN OWEN NILTO • FAAHREEN BANON • FABIANA • FABIEN • FABIENNE • FABIO • FABIOLA • FABRICE • FABRIZIO • FADILA • FADWA • FANELIE • FANNY • FARAH-BIBI • FARID • FATIHA • FATIMA • FATIMA EZZAHRA • FATIMA ZAHRA • FATIN • FATINE • FATMA • FATOUMA • FAYCAL • FEDERICA • FEDERICO • FELIPE • FENOSOA HONORE • FERDINAND • FILIPPO • FILOMENA • FIORELLA • FIRIEL • FLAVIA • FLAVIO • FLORENCE • FLORENT • FOUAD • FRANCE JEAN MARC WINSLEY • FRANCESCA • FRANCESCA VALENTINA • FRANCESCO • FRANCETTE • FRANCISCO • FRANCK • FRANCOIS • FRANCOISE • FRANCY ALBENY • FREDERIC • FREDERIQUE • GABRIEL • GABRIELA • GABRIELE • GABRIELLA • GABRIELLE • GAEL • GAELLE • GANESH • GARY RICHARD • GENEROSA • GENOVEFFA • GEOFFROY • GEORGES • BERNARD BENOIT • GEORGINA • GERALD • GERALDINE • GERARD CHRISTOPHER • GERMANA • GHISLAINE • GIACOMO • GIAMMARCO • GIAMPAOLO • GIANLUCA • GIANMARCO • GIANNA • GILBERT ARNAUD • GILDAS • GINA • GIOACCHINO • GIOIA • GIORGIA • GIOVANNA • GIOVANNI • GIULIA • GIULIA EMMA • GIULIANA • GIUSEPPE • GIUSEPPINA • GLWADYS • GOPALKRISHNA • GOVIND • GRACIETE • GRAZIELLA • GREGOIRE • GREGORIO • GREGORY • GREGORY DESIRE MAXWELL • GROGORY • GUIDO • GUILHAUME • GUILLAUME • GUILLAUME OLIVIER • GUY • GWENAELLE • GWENNAELLE • HAFIDA • HAFSSA • HAIAT • HAIDAR ABOO BAKR • HAIFA • HAJAR • HAKIMA • HAMDI MOHAMMAD ABDOOL AZIZE • HAMZA • HANAA • HANANE • HANS • HANSINI TINA • HARRY • HARSHA • HASSAN • HASSINA • HAYETTE • HEDI • HEEMA LUXMEE DEVI • HELENE • HEMLATA • HERVE • HICHAM • HIND • HOMESH • HOUDA • HOUSSAM • HOUSSEMEDDINE • HUSSEIN • IDALECIA • IGNACIO ANTONIO • ILANIT • ILARIA • ILHAM • IMANE • IMEN • INGRID • INGRID JENNIFER • INGRID TANIA • IRELIE • IRENE • ISABELLA • ISABELLA MARGHERITA • ISABELLE • ISADORA • ISMAIL • IVAN • IVANA • IVICA • JACKY • JACOPO • JACQUES • JACQUES AXEL • JACQUES EMMANUEL NICHOLAS • JACQUES OSCAR • JADE • JADE NATASJA • JAHEEZA BEGUM • JAMIL • JANNA • JANNET • JAOUAD • JASON SYLVAIN • JAWAHIR • JEAN ALAIN DESIRE • JEAN BAPTISTE • JEAN CHRISTOPHE • JEAN CHRISTOPHE LIONEL • JEAN CLAUDE • JEAN DYLAN DIMITRY • JEAN ELIAN SEBASTIEN • JEAN ERIC FABRICE • JEAN FABRICE HENSLEY • JEAN FLORENT • JEAN FRANCOIS MICHAEL THIERY • JEAN JACQUES • JEAN JORDAN • JEAN LUTCHMAN • JEAN MARC • JEAN MARIE • JEAN MARTIAL • JEAN MICHEL • JEAN PHILLIPPE • JEAN SAMUEL • JEAN STEPHANE CEDRICK • JEAN TONI JOEL • JEAN YANNICK BERTRAND LIONEL • JEAN-BENOIST • JEAN-FRANCOIS • JEAN-JACQUES CEDRIC • JEAN-LUC • JEAN-REMI • JEAN-YVES • JED MICHAEL • JEEVESHNEE DEVI • JELLINA • JENNIE • JENNIFER • JENNIFER • FONG YEN • JENNY KETTY • JEREMIE • JEREMY • JEREMY JULIEN ROYD • JEROME • JERUSA • JESSICA • JESSIE • JESSY • JHEEVANADEN • JIHAN • JIHANE • JINAKSHI • JOANA • JOANNE TONIELLA SHARONNE MARIE • JOCELYN • JOEL • JOELLE • JONATHAN • JONATHAN NIELS • JORDAN • JOSHILA • JOSUE • JOUDA • JOYCE INGRID • JOYCIE • JUAN • JUDE DYLAN • JULIA • JULIA BERNADETTE • JULIANNE •
JULIE • JULIEN • JULIETA • JUSTINE • KAISIGHEN • KAMISHA • KAREN • KAREN ESTHER • KARIMA • KARINA • KARINE • KARINE AIDA • KARYL • KASTHTHOORI • KATIA • KATINA MARIE ANASTASIA • KATIUSCIA • KAVISH • KAWSAR BIBI • KEERNA • KENZA • KESHIKA NAVISHTA • KETSIA RIDGIE • KEVIN • KHADIJA • KHALIL • KHAOULA • KHOI • KIMBERLEY • KLARISSE • KOOMARAVEL • KRESHEN PILLAY • KRISTEL GRACE • KUNAL KUMAR • LAETITIA • LAHSEN • LAILA • LAKSHMEE • LALLESH • LAMYAE • LAURA • LAURE • LAUREEN • LAURENCE • LAURENT • LAYLA • LEELDHARAN SHARMA • LENA • LEOLA • LEORDINA • LESLIE • LESLIE OLIVIA • LETIZIA • LEVI • LEWIS TAT FONG • LILLA • LINDA • LINDSAY • LINDSEY • LIONEL • LISE • LIZA • LLOYD • LOIC • LOKESH • LOLA • LOREDANA • LORELLA • LORENZA • LORENZO • LORENZO ALVINIO • LORI BRIAN • LORNA MYRNA CORALISSE • LOUBNA • LOUIS EDLEY JOVANIS CURTIS • LOUIS HANSLEY • LOUIS LAURENT • LOUIS NICHOLAS JULIO • LOUISA • LOUISE • LOUTY • LOVELESH • LOVELY • LUANA • LUCA • LUCIA • LUCIANA • LUCIE • LUCIEN • LUCILE MARCELLE PAULETTE • LUCILLA • LUCY • LUDOVIC • LUDOVINA • LUIGI • LUIGIA • LUISA • LUSIANIO PATRICE • LYDIE • MAEVA • MAEVA AGNES • MAGALI • MAGALIE • MAGHNIA • MAHA • MAHASSINE • MAHESCHAND • MAHEVA • MAITE • MAJIDA • MALEK • MANISSA • MANON • MANUEL • MANUELA • MAPESSA • MARA • MARC • MARCELLA • MARCELO • MARCO • MARGAUX • MARGHERITA • MARGOT • MARIA • MARIA ANATOLIA • MARIA ANNA • MARIA ANTONELLA • MARIA CARLA • MARIA ELISABETTA • MARIA GRAZIA • MARIA LAURA • MARIA NATHALIE • MARIA NORA JANE NORMINA • MARIA PATRICIA JESSICA • MARIA ROSA • MARIA TERESA • MARIAM • MARIANA • MARIANNA • MARIANNE • MARICA • MARIE • MARIE ANASTASIA JELENE• MARIE ANGEL• MARIE ANGELIQUE• MARIE ANNAELLE • CHRISTA • MARIE ANNAELLE SYNIOLLA QUEENCY • MARIE ANNE • MARIE ANNE-LISE • MARIE ANNESELLA • MARIE ANNIELLA BRIGITTA URSULLA • MARIE ANNIFER • MARIE ANOUCHKA • KENZA • MARIE ASHINTA • MARIE ASTRID • MARIE AURELIE • MARIE AURORE CHARLENE • MARIE BEATRICE • MARIE CARINE ANASTAZIA • MARIE CASSANDRA ANGELA KIMBERLEY • MARIE CATHLEEN NATHALIA CAMILLE • MARIE CEDRIC OLIVIER • MARIE CEDRINE CYNTHIA ELODY • MARIE CHERIEJANE INGREID • MARIE CHLOE MEGANE PASCALINE • MARIE CHRISTABELLE MILENA • MARIE CHRISTELLA ORELIE • MARIE CHRISTIE JENNYTA • MARIE CHRISTINE • MARIE CINDY • JACQUELINE KATE • MARIE CORINNE • MARIE CRISTINA SANDRINE • MARIE CRYSTA ALICE • MARIE DAVINAH • MARIE DESIREE ANABELLE • MARIE DESIREE SHERILYN • MARIE DOMINIQUE ORELLIE • INGRID • MARIE DORIANE JOUANA • MARIE DORIS ESTHER STEPHANY • MARIE ELODIE • MARIE ELODIE ANAELLE • MARIE ELODIE KATHY • MARIE ELOJIE AURELIE VIRGINIE • MARIE ELZA ELODY • MARIE EMILY EMANOUELLA • MARIE EMMANUELLE NATHALIA SOPHIE • MARIE ERICA BROOKLYNE • MARIE ERIKA MELANIE • MARIE ESTELLE ADELINE MARGOT • MARIE ESTELLE SHERYLL • MARIE ESTHER • MARIE FLORINA • MARIE FRANCE • MARIE FRANCE NANETTE • MARIE GAELLE AURELLIE • MARIE GENEVIEVE • MARIE GERALLE TATIANA ROSALIE • MARIE JELLA LUCIANA • MARIE JENNIFER • MARIE JHUNCY • MARIE JIOELY CHARINA • MARIE JOAN FABIOLA • MARIE JOELLE PRISCILLA • MARIE JOHAIDA AURELIE • MARIE JULIANA DELPHINE • MARIE JULIETTE AURORE • MARIE KAREN • MARIE KAREN NATACHA • MARIE KATE WENDY • MARIE KATHY CHARBELLE • MARIE KETTY ESTELLINA • MARIE KIRSTY CYNTHIA DESIRE • MARIE LAETITIA • MARIE LAURE • MARIE LAURE VICTORIA • MARIE LAWRENCE MERIMEE • MARIE LEITICHA SHEENA • MARIE LIDIA SARAJANE • MARIE LILIA MARLAYNA SHARONNE • MARIE LINE • MARIE LORINNE JONAELLE • MARIE LOU • MARIE LOUISE SANDRINE • MARIE LUICIE EVANUELLE • MARIE LYSE • MARIE MAIVA CATHYANA • MARIE MAUREEN • ANGELICA • MARIE MEDGINE AUDREY • MARIE MEGANE DELCIA • MARIE MELANIE • MARIE MELISSA • CROUSITA • MARIE MICHAELLA STEPHANIE • MARIE MICHELE STEPHANIE • MARIE MICHELE YOANNE • MARIE NADINE • MARIE NANCY • MARIE NAOMIE TIFANY • MARIE NATACHA FRANCOISE • MARIE NATASHA DESIRELA STEPHANIE • MARIE NOELLE • MARIE ORELIE • MARIE ORNELLA ANASTASIA • MARIE PIERRE • MARIE SANDRINE PRISCA GLORIA • MARIE SANDY • MARIE SHARONNE BEATRICE • MARIE SHIRLEY JOANNA • MARIE SOLDAD • MARIE STEPHANIE JOSEPHINA • MARIE STEPHANIE RICHENELLE • MARIE SVETLANA LAËTICIA • MARIE SYNTIA NATANIELLE • MARIE TESSA SANDY • MARIE THELMA KATHRINA • MARIE VANESSA KATIANA • MARIE VIRGINIA SANDRINE • MARIE YVONNE ANNAIS • MARIE-DOMINIQUE • MARIKA • MARINA • MARINE • MARIO • MARION • MARJORIE • MARJORY • MARLÈNE • MARTA • MARTIN • MARTINA • MARTINA ELDA • MARTINE • MARWA • MARY JOYCE KELLY ROMINA • MARYLENE • MARZIA • MASSIATA • MASSIMILIANO • MASSIMO • MATHIEU • MATHILDE • MATTEO • MATTHIEU • MATTHIEU QUENTIN • MATTHIEU VINCENT ROWAN • MAUD • MAUDE • MAURA • MAUREEN • MAURIZIO • MAURO • MAX • MAXENCE • MAXIME • MEDHA • MEGAN • MEGANE ESTELLE • MEGANE LOVISHKA • MEHDI • MELANIA • MELANIE • MELINDA • MELISHA DEVI • MELISSA • MELISSA ROSE • MERIEM • MERLONI • MERVEILLE • MERYEM • MICHEE REBECCA • MICHEL • MICHELE • MICHELLE-CHIMENE ESTHER ANJEELY • MICKAEL • MIKAEL • MILICA • MIMANSA • MINA • MIRELLA • MODESTA • MOHAMAD ASHRAF ALLY • MOHAMAD SHAMEER • MOHAMADI • MOHAMMAD AASIF SHAHBAAZ • MOHAMMAD FARDIN • MOHAMMAD HAMZA • MOHAMMAD JUNEID YUNOUS • MOHAMMAD KHALID • MOHAMMAD MOUSWADDICK • MOHAMMAD MU’AZ • MOHAMMAD NADEEM • MOHAMMAD RIASOUDDEEN • MOHAMMAD RIDWAAN • MOHAMMAD SHAH ZYADH • MOHAMMAD SHEHZAAD • MOHAMMAD SUHAYL SHAHIR IBN SHAREEF • MOHAMMAD YASIR • MOHAMMAD ZAFIR • MOHAMMAD ZIYAD • MOHAND • MOIRA • MONIA • MONICA • MONTACER • MONTASSAR • MORGANE • MOUNESH • MOUSCOUTA • MOUSTAPHA • MUHAMMAD AJMAL • MUHAMMAD AR-RAYHAAN • MUHAMMAD FADIL • MUHAMMAD IJAAZ E MUDASSIR • MUHAMMAD JUNAYD • MUHAMMAD JUNAYD ISHAAQ • MUHAMMAD MADANI • MUHAMMAD REZA • MUHAMMAD SAMIOULLAH SALIM • MUHAMMAD SUHAYL • MUHAMMAD YUSUF • MUNTASIR AHMAD MAMODE ANIFF • MURIEL • MUSHIIRAH BANON • MUSTAPHA • MYRIAM • MYRIAM FLORENTINE • NABEEL HUSSEIN • NABIIHA WARDAH BIBI • NABILA • NACERA • NADEGE • NADIA • NAGAYSEN • NAHRISSAH • NAIMA • NAJLAE • NAOMIE • NASSIM • NATACHA • NATALIA • NATHALIE • NAWAL • NAWSHEEN BIBI • NAZZARENA • NEBIA • NED GREGORY • NEELESH • NELDA • NIAMA • NICHOLAS • NICOLA DIMITRI • NICOLAS • NICOLETTA • NIDA • NILKANT KUMAR • NIMAH • NIRMALA DEVI • NISHI • NISRINE • NITISHA • NIVES • NOEL KERSLEY DORIAN • NOELINE • NOELLA • NOELLIE • NOEMIE • NOLWENN • NOOR • NORA • NOUARA • NUVIN DEV • OBRIEN JEAN DENIS CHRISTOPHER • OLIVIER • OLIVIER JONATHAN • OMAR • ORNELLA • ORNELLA QUEENCILLA • OTHMAN • OUAFER ZOHRA • OUCHITRASINGH • OULAGANADEN • OUMAIMA • OUMAYMA • OUMME ROUKSAAR • OUSHNA • PABLO HERNAN • PALLAVI • PAMELA • PAMELA YNDA • PAOLA • PAOLO • PARWEEZAH BIBI RAIZA • PASCAL • PASCAL DYLAN • PASCAL LYNSLAY • PASCALINE • PASQUALE • PASQUALINA • PATRICIA • PATRICK • PATRIZIA • PATRIZIO • PAUL • PAULINE • PEARLEEN • PERLE • PHILIPPE • PIA • PIERFRANCESCO • PIERRE • PIERRE ALEXANDRE • PIERRE ANTOINE • PIETRO • PRANAW • PRATIMA • PRISCA • PRISCA GAINAELLE ODILE • PRISCILLA • PRISCILLA MARIE KITZY • QUENTIN EMMANUEL GARRY • RACHEL • ANNAÏSSE RÉA • RACHEL STELLA • RACHELE • RADHA • RADHIKA • RAFAELLA • RAFFAELE • RAILA BIBI • RAJA • RAJESHWAREE • RAJNISSEN (NIREN) • RAMATOU • RAMIA • RASHELL • RAVANNAH • RAVINDRANATH • REBECCA • REDOUANE • REEDHIMA • REETESH RABINDRANATH • REGIS • REINE ROSTANT • REMY • RENATA • RESHMAH BEE • RIAD • RICCARDO • RICHARD • RICO FLAVIEN • RIDHWAN NASSEERUDDIN HUSSAIN • RIME • RINUGI • RITA • RITISH • ROBERTA • ROBERTO • ROCCO • ROGER • ROJO • ROMAIN • ROMANE • ROMINA • ROMINA LORCIANA • ROMY • ROSA • ROSANNA • ROSE MARIE • ROSELLA • ROSHAN • ROSHNI • ROSSANA • ROSSELLA • ROUAA • ROZENN • RUBENS • SABERA • SABINE • SABRINA • SADDY MARY ANNE STEPHANY • SADIA • SAFAE • SAFIR • SAI PHANINDRA • SAIDA • SALAH • SALIMA • SALINEE • SALMA • SALOME • SALVATORE • SALWA • SAMET • SAMIA • SAMIR • SAMIRA • SAMRA • SANAA • SANDEEP • SANDHYA • SANDRA • SANDRINE • SANDRINE SHANE MARIE • SANDRO • SANJIV • SANJNA • SANTOSHI • SARA • SARAH • SAROJADEVI • SAVERIA • SAWAN • KUMAR • SAYED RAYHAAN • SEBASTIEN • SELMA • SELSABIL • SENAMY • SERENA • SEVERINE • SHAHIRA FRANCESCA • SHAKEEL • SHANAELLE MELISSA INGRID • SHANNON KIRK • SHANON • SHARFA KHAN • SHARFAA HAADIYAH • SHARON • SHARVEENA WOOGRA • SHEERINE BIBI BUNOO • SHEIK MOHAMMAD ZAYYAN • SHERIHAAN BIBI AMINAH • SHREEMA • SIHAME • SIHEM • SILVANO • SILVIA • SIMON • SIMONA • SIMONE • SIMONETTA • SOFIA • SOIZIC • SOLANGE • SOLHYNE • SONIA • SOPHIE • SOPHIE-HELENE • SOPHOLLE • SOUADE • SOUFIANE • SOUKAINA • SOUMAYYAH BINT AHMAD FAWZEE • STACY JULIANA • STEFANIA • STEFANO • STEFFIE • STEPHANE • STEPHANIE • STEPHANIE LAETI • STEPHEN • STEVEN • SUBHAM DEV • SUZANNE • SWEETY • SWETA KIRUN • SY KILLY • SYBILLE • SYLVAIN • SYLVAINE • SYLVIE • TAHKY • TANIA • TAOUS • TASHWEEN • ZTATIANA • TATJANA • TEA • TEDDY • TEEMAH • TEHSEEN BIBI SAMIANAH • TERESA • TESY JEAN-FRANCOIS • THI MAI AN • THIBAUD • THIBAULT • THIERRY • THOLKAPPIYAN • THOMAS • THOMAS PASCAL • TIJANA • TIRUMANEE • TIZIANA • TIZIANO • TOLOJANAHARY MARCELLINE • TRISTAN • TUGDUAL • TUSHITAA • UMMEH BIBI SHARMEEN • UNAYZA IYUZIANNE NACERILLA • VALENTIN • VALENTINA • VALERIA • VALERIE • VANELLI MODELY • VANESSA • VANESSA FRANCESKA • VANIA • VARSHA • VASSENI • VEDRAJ • VEGANANDA • VERONICA • VERONIQUE • VICTORIA • VIKTORIA • VILAWAN • VILAYVANE • VINCENT • VINCENT PHILIPPE • VINCENZA • VINCENZO • VIRGINIE • VIVIANA • VIVIEN • VUTHY MAI • VYAS • WAHIBA • WAHIDA • WASEEM • WENDY ACHILLE • WILLIAM • WILLIAM WILLY • WILLY • XAVIER • YAN LUDOVIC • YANN • • YANN PATRICK • YASMINE • YEGANADEN • YERBOU HELENE • YOGESH KUMAR • YOHANN • YOLINE • YOONISHA • YOUB • YOUNESS • YOUNS • YOUSRA • YURI • YUSRAH LUBNAA • YUVNA DEVI • YVANY • YVES • YVES GUY • YVES PAUL • YVONNE • ZAHEERAH BIBI ROUKAIYA • ZAHRA • ZAINAB • ZAIRA • ZAYNA BIBI • ZIAD • ZOHRA • ZOULIKA •
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They are iQera
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19 Governance & strategy 21 “Our choices for tomorrow,”
joint interview with Jérémie Dyen and Jean-François Bensahel
24 The Executive Committee and the key governance principles
31 A new dimension 32 Our business model
34 2019 Key figures
35 History: creating the sector player who knows you the best
37 The transformation targets: performance and meaning
38 2019, sustained growth
42 2019 in “snapshots”
44 Integration
46 Internationalization
47 A new experience of relationships
49 iQera culture: unique experience, community culture and positive impact
Preserving your reputation and that of your customers.
ANNUAL REPORT 2019 TRANSFORMATION
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iQera: another approach to financial performance.
Summ
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Governance & strategy
TRANSFORMATIONANNUAL REPORT 2019
In 2019, we worked alongside iQera’s management to support the group’s development and its conquest of new markets. And our support will continue to increase as the group goes from strength
to strength, generating value.
Cédric Dubourdieu, Partner, BC Partners
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The year 2019 was marked by the birth of iQera, the new group formed by MCS and DSO. Jérémie Dyen, CEO of Louvre Bidco, our group’s holding company, who is also in charge of capital allocation, and Jean-François Bensahel, iQera CEO, look back over this pivotal year during which the new group began a strategic transformation to become a key trusted partner of French and Italian businesses and financial institutions across the entire value chain of the client financial cycle.
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Our choices for tomorrow
Jérémie Dyen
CEO of Louvre Bidco, our group’s holding company, in charge of capital allocation
Jean-François Bensahel
iQera CEO
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TRANSFORMATIONANNUAL REPORT 2019
Joint interview
iQera strength is its human capital. It is an essential lever for
the creation of sustainable value.
Daniel Elalouf, CEO-Partner Montefiore Investment
How would you sum up the year 2019?Jean-François Bensahel2019 was a year of profound transfor-mation during which we succeeded in creating a unique business model in-tegrated in our market. We took on a triple challenge, consisting in combining creation, transformation and performance. I am proud of our employees. I want to thank them individually and collectively for the commitment, the work and the total determination they demonstrated throughout the year to establish the fundamentals of the iQera group.
Jérémie DyenI share Jean-François’ pride in what we have accomplished together with our teams. It’s all the more remarkable since our environment, although promising, is itself undergoing profound change. And we met the challenge of remaining focused on our integration, mobilized to support our clients and present to conquer new markets. With iQera, we are demonstrating that we are building a group with strong value-creation potential for our employees, our clients, their clients and our partners.
In concrete terms, how did this strategic transformation take place? JF. B.We chose to implement an integration plan that deliberately and radically shakes up our pre-existing organizations. In particular, we wanted to bring about a new organizational model that can involve all of our employees. So we carried out several strategic projects simultaneously in order to get to know one another better, and to better grasp the relevance of each historical model in order to retain the best it has to offer. We took advantage of this year to confirm our intuitions concerning subjects as broad as the growth strategy, the client experience, technological innovation, the operational models, culture and our human relationships. Building a common culture was both the central to and the guiding thread of this year of transformation. This is the solid foundation on which everything can then be built for the long-term.
J. D.Carrying out these strategic projects involved a tremendous amount of intense work. We can say that at the end of 2019, we succeeded in laying the foundations of a new group with the definition of a development and growth strategy, a new common culture, organizations that were redesigned, optimized and improved, a unified operating model, an IT convergence roadmap, a new client relations and experience model, mutualized and standardized business processes and support functions and, finally, shared practices.
Why iQera? J. D.We wanted to create a new group that was unified and different from what each of our companies was before. So it was essential to free ourselves from the past by defining a new brand for our group and thus be able to write our new history.
JF. B.This name was supposed to express the essence of the new group, support our strategy and convey our vision. After several attempts, iQera seemed to be the natural choice. Our name contains at its center “Qer,” which expresses the attention paid to others (care in English), the oak, symbol of justice and longevity (quercus in Latin), the living place (ker in the Breton language) and the heart in Mauritian Creole (leker). In at the beginning, “IQ” expresses all the types of intelligence - human and technological - that we are developing to serve our clients and their clients. Finally, the term “era” suggests the future tense and proposes a new era.
What is iQera’s strength in the French market? JF. B.iQera is first and foremost a unique collective. It is a group with know-how and with a wide range of offerings that are also unique and that is emerging as a leader in the French market. We are able to support financial institutions and other businesses, whatever their sector, at each step of the credit and billing chains when human and technological intelligence needs to be activated. We are therefore able to meet, both comprehensively and in a personalized manner, their performance and risk control challenges.
We can do this while strengthening the financial relationship and the dialogue that they maintain with their clients. Finally, we support them in their challenges in transforming their credit, finance and client relations functions.
J. D.We believe we are the only ones to offer a model in which support and management of all of the debt follow-up and collection issues are so integrated. Our model relies on two fundamental assets: expertise and talent that we have cultivated for more than 30 years. Our model is also based on a balance between debt servicing and debt purchasing activities. It is a sign of trust by our clients, of financial stability for our group and that positions us as a key partner of choice.
The group strengthened its positions in Italy with the acquisition of Sistemia. Is internationalization a priority strategic focus for the group? JF. B.The acquisition of Sistemia in July 2019 confirmed our desire to anchor our expertise in Italy. It supplements the acquisition of Serfin in December 2018. Our aim is to be able to support our historical partners in this market - particularly certain large French banking groups. This is why, moreover, we made the choice to create a group there with complete capabilities, a mirror image of iQera in France, under the iQera Italia umbrella.
Since Italy represents 25% of the group’s staff and 25% of the group’s sales, iQera thus becomes a Franco-Italian player. This is illustrated by the fact that the head of the new Italian group joined the group’s Executive Committee in early 2020.
J. D.With iQera Italia, we are giving ourselves the means to offer our bank clients, but also our company clients in the utilities, insurance, telecom or industry sectors, a comprehensive offering of services. Thanks to the combined expertise of Sistemia and Serfin, we can support them with out-of-court and court-ordered debt collection. We can offer complete real estate receivables management solutions, including technical management of complex assets.
Since the Italian market is in full structuring phase and represents one of the principal European NPL markets, the growth prospects are strong for players with state-of-the-art skills. This is why continuing to develop iQera Italia is one of our priorities. At this stage, however, we have no development ambitions in locations other than France and Italy.
What are the challenges for the group in 2020 and in the medium-term? JF. B.The Group, which is solid and in line with its development strategy, is poised to reflect more actively on its raison d’être and its role in contributing to the common good by deploying its new group culture. Our corporate clients entrust us with their most valuable assets, their cash flow and their customers, because of our expertise, but not only because of our know-how. It is also for our pioneering spirit and our responsible and sustainable approach. Reflection on our raison d’être should allow us to identify more clearly the positive impact that we want to leave.
J. D.We intend to further strengthen our synergies to accelerate our growth in France as in Italy and in our two core businesses. We are pursuing, as we have done for more than a year now, this wonderful entrepreneurial project. And today we have the assets to perpetuate what we have built and to create the difference. It is our brand signature, a promise, but also a commitment and a state of mind. It is still too early to quantify precisely the impacts that the current health and economic crisis created by the outbreak of the novel coronavirus may have. Although we believe we have done everything possible, since February, to effectively deal with this crisis and organize, we also see this period as an opportunity to discuss with our clients the role that we play alongside them, by deepening the nature and the bases of our partnerships.
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TRANSFORMATIONANNUAL REPORT 2019
The executive committee and the key governance principles
As of its merger in October 2018, the group made the choice to establish a complete and integrated group governance platform. This challenge was met in 2019 with tightened governance to effectively steer the integration project and the transformation project.
In order to drive our sustainable perfor-mance strategy, we rely on a balanced composition of our governance bodies at all levels: independent chairman, representation of our main sharehol-ders, and application of the principle of diversity of skills and of national and international experience.
The iQera governance platform is organized around a Supervisory Committee, an Executive Committee as well as group committees, which are organized at a local level.
The Executive Committee is collectively charged with defining the group’s strategy and ensuring its implementation. It is composed of 11 individuals who draw from their experience to write the history of iQera. The team meets twice a month.
Stable and experienced, the Executive Committee expanded this year with the inclusion of the senior management of iQera Italia and the Customer delivery division, representing strong strategic focuses for the group in 2020.
Furthermore, the Executive Committee, through a co-construction process, identified the priority projects for transforming iQera and preparing the group for tomorrow’s challenges. It thus developed a transformation program divided into concrete projects, each managed by members of the Executive Committee in association with various group employees.
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An engaged Executive Committee
Solid governance
TRANSFORMATIONANNUAL REPORT 2019
iQera group shareholders
Our shareholders are Louvre Luxco, which is itself wholly-owned by funds advised and managed by BC Partners (72.1%), the fund Montefiore Investment IV (13.2%) and the management of the group (14.7%)
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.The Supervisory Committee convenes at the level of the group’s holding com-pany, Louvre Bidco. It is composed of six non-executive directors who have vast experience in corporate develop-ment and growth. These directors are Alain Demarolle (Independent Chairman), Cédric Dubourdieu, Jérôme Losson, Daniel Elalouf, Pauline Spire and Côme Arhanchiague. The Committee strives to promote the creation of long-term value for iQera. Therefore, it meets every month in the presence of the Chairman and various members of the Executive Committee in order to monitor and supervise the strategic, operational, social and financial development of the group.
This Supervisory Committee has also delegated some of its work to two specialized committees: the Audit Committee and the Compensation Committee. The Audit Committee is composed of three members of the Supervisory Committee and also includes the participation of the auditors. It is responsible for reviewing the Group’s IFRS consolidated financial statements and also deals with relevant issues concerning financial communication. As for the Compensation Committee, it is responsible for examining and validating the group’s overall compensation policy. It is composed of two members of the Supervisory Committee, of the group HR department and the President.
To ensure iQera’s sustainable and responsible growth, the Risk Committee assists and supports the group through a constant questioning of the reliability of the risk management and internal control processes. More broadly, its role is to define the policy for managing major risks, particularly financial, operational, legal, non-compliance and image risks. It meets once a quarter to review risks and incidents. It is composed of the President of Louvre Bidco, the President of iQera, members of the Executive Committee, the General Secretary, the Chief Information Security Officer, the Internal Control Manager and the Data Protection Officer (DPO).
Furthermore, in 2019, iQera created and strengthened a certain number of specialized and active committees responsible for accelerating the integration of the new group and more broadly for supporting our transformation strategy. Such committees include the Performance Review Committee, the Customer Delivery Committee bringing together the commerce, operations and IT teams, the CSR Committee, the Innovation Committee, the CARE Committee, the Risk and IT Security Committee, and the Legal Operations Committee.
The General Secretariat, which includes the legal, risk and compliance functions at the group level, supports the Executive Committee with the deployment of its operational strategy. To successfully carry out its activities, the General Secretariat relies on a corpus of internal charters, policies and procedures, risk mapping, and an Emergency and Recovery Plan.
Reporting to the Presidency of iQera, the General Secretariat is composed of 14 employees, a number that will be increased to 18 in 2020.
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Controlled risk governance
TRANSFORMATIONANNUAL REPORT 2019
Jean-François BensaheliQera CEO
Jérémie DyenCEO of Louvre Bidco, our group’s holding company, in charge of capital allocation
Barbara LucasBanks & Finance markets Director
Marcelo AmramGroup CFO
Anne DenuelleTalent & Engagement Director
Sylvain BourdetteGroup CIO
Francesco Magliocchetti Director iQera Italia
Guillaume DestruelDirector of Customer delivery
Marion GatimelKey account & Public markets Director
Cyrille de CoursonGeneral Manager of Reinvention Strategy
Stéphane MatternHead of Operations
Combine performance and social responsibility
“Become the partner of choice for the transformation of the finance function
“Create a champion of sustainable and responsible growth
Release the energy within the community so that it commits itself with pride
Develop a responsive & agile IT organization
Develop a new multinational player in the Italian market
Be customer-centric, a commitment of everyone all the time
Combine financial experience and client experience
“Imagine know-how 3.0
Get the best out of the teams and the processes
Make credit risk management an opportunity for our clients and our investors
The long-term relationships built between iQera and its clients are based on its ability to manage the risks of the sensitive activities entrusted to us. We have thus developed a risk prevention and management system inspired by the systems established in the banking and insurance sector. This system, designed to be flexible, ensures the security of our activities and thus helps continuously improve processes, performance and development in the service of its clients.
As a business partner, the General Secretariat is composed of three divisions: the Internal Control Division, the Legal Operations Division and the Legal and Compliance Division. The group’s legal and compliance division ensures the overall legal security of the group and of its different entities and assumes responsibility for legal and regulatory subjects.
The legal operations team covers the major legal risks associated with operations. Finally, internal control, which does not carry out any operational activity, is responsible for the coherence and overall effectiveness of the risk control and monitoring system. This division grew in 2019 with the creation of an internal audit division and the appointment of a new Data Protection Officer.
This year, the group continued to work on the compliance of its activities with the privacy and personal data protection regulation. Beyond the application of regulatory requirements, one of the issues identified is to make compliance with the GDPR an opportunity for strengthening the group’s image and reputation with its clients and its partners.
Within the group there exists a corpus of internal charters, policies and procedures (particularly concerning professional ethics, anti-fraud, anti-corruption and anti-money laundering, traceability of online payments, double checks of receipts, etc.) that establishes the principles of action and the conduct that employees must adopt when carrying out their mission.
These documents are shared with all employees when they join our team. Awareness reminders and specific training sessions are conducted regularly within the operational teams as well as occasional checks to ensure strict compliance with these charters, policies and procedures. In 2019, they were standardized in the new group.
Being responsible in one’s collection practices also means being able to carry out these practices at secure sites inspired by the best practices of the banking sector, thus ensuring a greater than 99% service continuity rate.
The group also further strengthened its information systems in 2019 by equipping itself with a technology, using artificial intelligence, capable of automatically detecting emerging cyber threats throughout the entire company and of providing an immediate response to them.
iQera’s overall proactive risk control mechanism ensures continuous monitoring of its activities, favors closed circuits, collective decision-making and the implementation of corrective actions to ensure the efficiency of the overall control system. It is thus a true performance lever for the group.
We are a partner of choice for our clients, which is based on trust. iQera makes every effort to listen as actively as possible during its interactions with debtors and to establish a dialogue with them - particularly in difficult or disputed situations. The group has also established an e-reputation monitoring and management policy for its collection operations, as well as a mediation mechanism with the debtors who are in contact with the group and its subsidiaries. The aim: to protect of our image and the image of our clients, particularly on the Web, in forums or on social networks.
This process is complemented by a series of recurring monthly mitigation actions carried out and coordinated by our operational and legal teams and our in-house mediator and in partnership with an independent service provider specializing in digital and reputation issues.
In 2019, this strategy permitted the group to improve the notoriety index for its subsidiaries followed on line by one point on average by earning an average of 7.5/10 and to enjoy more positive visibility for the portion of its activities concerned.
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iQera is the only player in France to have a Fitch rating since 2017 for its debt management services and the ability to protect the image of its clients.
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Ensuring the security and performance of activities
Responsible collection
Our reputation, an asset to be protected
TRANSFORMATIONANNUAL REPORT 2019
Sophie Waldberg-BillhouetGeneral Secretary Risks and Compliance
Strengthen our company’s resilience
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TRANSFORMATIONANNUAL REPORT 2019
A new dimension
In 2019, with the creation of iQera and the launch of iQera
Italia, we grew and expanded our geographic coverage.
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Our business model
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Comprehensive control of the client financial cycle
Client challenges Strategy Value creation model
• Improve the financial ratios and optimize the management of own funds
• Combine performance, cost control and quality; increase productivity; accelerate the automation and digitization of the financial processes
• Comply with the regulations; reduce financial and operational risks; protect our own image as well as that of our clients
• Support the transformation of the Finance, Credit and Client Relations functions; refocus on its core business
• Improve client knowledge; better anticipate and support clients with outstanding payments and strengthen the client relationship
• Diversify across the entire credit and billing chain
• Invest in our teams and in the technology
• Form strategic partnerships to design the Finance function of tomorrow and become the incubator of innovative expertise
• Develop innovative client financial processes, invent creative processes and mobilize all types of intelligence (relational and digital) to create an enhanced experience
• Be a learning, responsible and attractive company that is always learning
A personalized model for protecting our customer capital
• Tailor-made delegated management• Debt purchasing• Transfer of activity
Comprehensive control of the client financial cycle
• Quality & client knowledge, performing outstanding loans, debt follow-up & collection, disputes & litigation, legal & aged debts
• Any type of debts, secured or unsecured, white label or own name, with or without partner networks: bailiffs and lawyers
TRANSFORMATION
iQera, the partner for your client fi nancia
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ANNUAL REPORT 2019
Cash revenue €m(1) 271 (+15% vs. 2018)
Debt ratio(2)
3,4X Share of net revenue from debt servicing
61%120M ERC €m
542(1) Pro forma including Sistemia. (2) Ratio calculation based on 2019 pro forma
figures for iQera including Sistemia.Cash EBITDA €m(1)
134 (+28% vs. 2018)
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2019
Creation of the iQera group, born of
the merger between MCS Group and
DSOgroup
2019/2018 Acquisition of Serfin and
of Sistemia in Italy
2017 Integration of EFFICO,
subsidiary of BNP Paribas
2015 Capacity expanded to address the trade
receivables value chain, particularly B2B
2014 Integration of expertise
for the management of multi-sector and
industry debts
2005 Acquisition by DSO of an entity for the
management of fresh debts, investigations and Return to Better
Fortune
2001/2000 Creation of DSO and of the first
intermediation platform with bailiffs
1986 Creation of MCS,
specializing in the management and purchasing of
bank debt
In 2019, with the creation of iQera and the launch of iQera Italia, we grew and expanded our geographic coverage. The group is thus continuing a long history of development in the service of its clients. The aim? To be intimately familiar with the issues encountered by French and Italian businesses in order to support them in all of their debt follow-up and collection challenges, where they are and over time.
Italy 25% of group employees and sales
2180 employees
16 sites
FranceAngers, Bourges, Lille, Paris, Poitiers, Toulouse, Tours, Villepinte
Italy Rome, Spoleto
MaroccoRabat
Israel Netanya
Mauritius Port Louis
Uruguay Montevideo
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2019 Key Figures History
Creating the sector player who knows you the best
ANNUAL REPORT 2019
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The transformation targets: performance and meaning
ANNUAL REPORT 2019
Our ambition is to become the key partner of banks and financial institutions and
with all of the major billers in France and Italy.
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2019 was a formative year for the group with an in-depth integration and transformation project, as well as a consolidation of its positions in the Italian market with the acquisition of the company Sistemia - in keeping with iQera’s growth strategy. This growth strategy was based on the diversification of its activities across the client financial path while maintaining the balance between its historical businesses: debt purchasing and debt servicing.
Our main markets, already promising in 2018, were generally strong in 2019, bolstered by the transformations of our clients and the changes in regulations. We believe that we are well-positioned to make the most of the coming opportunities in the French and Italian markets, as a result of our new size, our expertise and our long-standing relationships with our clients across all our businesses and service offerings.
The acquisition of Sistemia in June 2019, as well as the extent of our debt portfolio purchases at the end of the year led to a slight deterioration of our debt ratio, which rose from 3.1x to 3.4x over the year. In a context where we are investing for the future, we believe this ratio nevertheless remains one of the lowest in our industry.
Debt purchasingOne of our two core business is debt purchasing which consists of sourcing, valuing, purchasing, then managing real estate loans, consumer and SME loans portfolios (sound, doubtful or disputed) for our own account or for the SPVs through which we invest in such portfolios and of which we own a significant part of equity.
For the financial year ended December 31, 2019, our debt purchasing business generated €150 million of gross collections, up 28% in comparison with the previous financial year. Total debt portfolio purchases over 2019 amount to €197 million, or approximately five times the amounts recorded in 2018 (€42 million). In carrying out this volatile investment activity, we have endeavoured to maintain attractive return objectives as well as a conservative approach and constant discipline in the analysis and the valuation of our risks.
In the French market, the vitality that we had anticipated at the end of 2018 was confirmed in 2019 with a growth in the number of sales of debt portfolio estimated at +30%. This growth in transaction volume was also characterised by an increase in portfolio sizes.
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In 2019, iQera experienced sustained growth of its debt servicing activities in Italy, as well as growth in its debt purchasing activities in France.
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TRANSFORMATION
2019, sustained growth
Returns from purchases have remained strong and stable over recent years, with an average Gross Money Multiple of 1.8x at underwriting. In 2019, our portfolio acquisitions were made on the basis of a Gross Money Multiple of 1.7x on average. This is mainly due to the acquisition of portfolios with a lower level of risk. Some operations, given the nature of the debt offered, present shorter collection periods and therefore faster paybacks, which will allow us to maintain attractive IRRs for this vintage compared with our weighted financing cost.
We intend to continue leveraging our robust due diligence process and analytics tools to ensure that we only acquire portfolios of non-performing and performing loans that present an attractive risk-adjusted return. In fact, the new group has a database of more than 30 million anonymized profiles making it possible to construct fine and exhaustive analyses, rich in information. In 2020, our aim is to continue to invest in non-performing portfolios of significant size for which we will be able to capitalize on our historical skills, our know-how and the mobilization of our teams.
Another key highlight is that our actual gross money multiples have been consistently higher than the returns at which we priced our portfolios, due to a conservative approach to underwriting and our strong collection performance. Indeed, in all matters, we favor a conservative approach for our cash flow projections.
More specifically, cumulated actual collections for our seasoned vintages (pre-2013) already outperformed our forecasts and there is still value left in our ERC. Based on this solid Background and expertise, the Group is strongly equipped to seize the best opportunities on acquisition market in 2020. And more broadly, the group is now ready to support the transformation of the banking model of tomorrow. The table below shows that the debt collection levels of our teams regularly remain above our historical ERC projections.
In the year ended December 31, 2019, our 120M ERCs increased significantly to reach €542 million, or 34% above their level on December 31, 2018. This growth is directly linked to the sustained level of portfolio acquisitions in 2019, and to good collection projections for our historical vintages. The effects of portfolio rolling and revaluation had an impact of +€5 million.
Acquisitions per year (in €m)
2006
18 17
3833 35 34
2007 20162009 20102008 2012 2013 2014 20152011 2017 2018 2019
4455
38 45
67 62
42
197
ANNUAL REPORT 2019
0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Prior2007
2.1
2.1
2.3
2.4
2.4
2.5
3.1
3.3 3.3
2007 20162009 20102008 2012 2013 2014 20152011 2017 2018 2019
iQera: GMM as of December 31, 2019
2.9
2.7
2.5
2.9
2.3
2.0
2.6
2.4
2.0
2.6
2.2
1.7
2.3
1.9
1.3
2.0
1.8
1.0
1.8
1.9
0.9
1.9
1.7
0.5
1.8
1.7
0.2
1.7
1.9 1.5 1.7 1.9 1.6 1.8 1.9 1.8 1.8 1.7 1.8 1.8 1.7
3.0
Actual+120M MM DDActual 120m implied
120M Gross ERC: 2019 bridge
Q4 2018 Collections Rolling RevaluationAcquisitions Q4 2019
700
650
600
550
500
450
400
350
300
284
-150
9 -4
403
542
The chart below shows our 120-Month Gross ERC as of December 31, 2019, in millions of euros, broken down by the year in which we expect to realize such collections. It stresses the solidity of our backbook characterized by good visibility of our cash flows over the next 10 years and collection projections that are still significant at the end of the curve.
Debt Servicing In 2019, our debt servicing activities represented 61% of our consolidated net revenue (i.e., €121.4 million), up 3% over the year.These results are in line with our projections for France, where we gradually compensate for the falloff in historical contracts due to portfolio runoff by onboarding new activities. In Italy, we noted a strong dynamic with revenue up 11% on an equivalent basis compared to December 31, 2018. This development shows the sturdiness of our service offering during this first year following the merger of MCS & DSO, as well as the pertinence of our investments in Italy, a developing market in which our diversified offering will position us as a new leading player.
With a comprehensive offering, over the years, the iQera group has been able to develop platforms of excellence in certain sectors including the telecom, energy, insurance and banking sectors. In particular, the energy sector experienced significant growth in 2019 with an increase of +23% thanks to the expansion of our offering and our ability to support our historical clients for all of their needs by intervening further and further upstream in the collection cycle (for example by working on the prevention and anticipation of risks of lawsuits and non-payment).
The group has also reinforced its positions in government procurement contracts by strengthening its national network through its network of partner court bailiffs, RNJ (National Justice Network), to assist the French state with its collection issues.
Our ambition is to become the key partner of French and Italian banks and financial institutions and to strengthen our positioning with all of the major billers by continuing our efforts to cover all of the debt collection services for sound, doubtful, disputed, individual or corporate debts, with or without guarantees. Pe
rfor
man
ce.
40 41
TRANSFORMATION
We believe that we are well-positioned to make the most of the coming opportunities
in the French and Italian markets.
ANNUAL REPORT 2019
120M Gross ERC per year (in €m)
10394
51
3324
0 - 12 13 - 24 25 - 36 37 - 48 49 - 60 61 - 72 73 - 84 85 - 96 97 - 108 109 - 120
End of 2018 End of 2019Months
0
30
60
90
120
150
261923
17 13
144 147
94
53
3024
18 14 11 9
Perf
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.
42 43
TRANSFORMATION
2019 in “snapshots”
ANNUAL REPORT 2019
1, 2 & 3: Employees discover the birth announcement card for iQera. 4 & 5: Thank you Chambéry and welcome to Pyrénées, the new group headquarters. 6:« Feel good week » in Tours. 7: Workshops « Defining new group beliefs ». 8: Customers’ party to celebrate the birth of iQera. 9 & 10: Behind the scenes of employee photo shoots. 11: Internal GDPR awareness campaign. 12: The Annual iQera Indian Ocean Party. 13: The Annual iQera Paris Party. 14: Indian Ocean Island Games.
3
7
6
8
10
12
13
14
11
9
1
2
4
5
Perf
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Transform to create the conditions for an integrated groupAfter an initial observation phase that allowed the employees of the group from different backgrounds to get to know and understand one another better, the integration project was organized around three strategic priorities. This project aimed to create a new group having rethought its model concerning businesses and client approach, and having rethought its mode of organization and human relationships, in order to support strong development ambitions.
To create the conditions for an integrated group, two decisions were made in the short-term. The first was to create a single corporate brand that could give concrete form to the added value of the merger, strengthen the feeling of belonging and support the company’s reinvention project. The second was to bring the Paris teams together at the same site. Thus, in the summer of 2019, almost all of the Paris teams were united at a single site at the premises on rue des Pyrénées in Paris, now the group’s corporate headquarters. In October 2019, the iQera brand was born, and at the end of the year, a certain number of group subsidiaries changed their company to in turn take the name iQera. This work will continue in 2020.
After the merger of the MCS and DSO groups in the fall of 2018, the aim was to define and deploy a comprehensive integration plan in order to create iQera, a new and unique group that brings together the best of each of the two companies resulting from the merger, in order to write a new page of its history. To achieve this aim, the year 2019 was therefore a year of structuring and radical transformation.
Putting our clients at the center of our organization and our activity One of the major achievements of this year was the extensive work done to mutualize and rationalize our tools and our organizations at all levels.
First, the group established the bases for a new, entirely client-oriented production model that transforms our way of addressing the financial cycle for all our debt purchasing and delegated management activities. This transversal approach of the group’s businesses represents a competitive advantage, a decisive client benefit and an important engine of growth for iQera. Scalable and open-ended, the new model makes it possible to manage the growth of the activity. Integrated and coordinated, it develops the centers of expertise, boosts our employees’ performance by allowing them to focus on listening to clients with outstanding payments and improve the quality of the client financial relationship. The progressive establishment of this new model, which is to be completed in 2020, was accompanied by a standardization of collection practices and debtors communications. It goes hand in hand with the IT convergence of our business and office technology tools, a large-scale undertaking initiated in 2019 and that is to accelerate in 2020.
The group, which has always been concerned with intervening further upstream in the value chain of the client financial cycle, also created a Reinvention Division, responsible for initiating and steering its operational R&D projects.
As such, it assumes responsibility for defining the reorganization principles and analyzing operational performance (organization, process and tools) by playing the role of “internal client.” At the same time, it reflects on the approach to our know-how in order to imagine the business of tomorrow, mixing technology and interpersonal skills, in a sector that is itself undergoing profound change.
If our operational teams have been entirely redesigned, it is an entire group, in its totality, that brought about its transformation in 2019. The corporate support functions (Finance, Legal, IT, Marketing, Human Resources and Communication) were also reassembled. They played a particularly important role as facilitator in this process of change to define common reference frameworks and KPIs, standardize all of our practices, and create a shared system of values and mode of relating.
This integration phase, decisive for the group, led to crystallizing synergies in line with the initial estimates, while at the same time continuing sustained investments in employees (with the recruitment of 792 people), resources and technologies to effectively support this change in size over the long-term.
44 45
TRANSFORMATION
Integration
ANNUAL REPORT 2019
Three strategic priorities: rethinking the model in terms of business approach, in terms of customer approach and rethinking the mode of organization and human relations.
Perf
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In 2018 and 2019, we carried out two determining external growth operations in Italy, acquiring Serfin, specializing in the management of trade receivables and debt collection (December 2018) and Sistemia, dedicated to credit management covering the entire secured and unsecured debt collection process (July 2019).
iQera’s internationalization strategy consists in expanding the perimeter of its activities to specific markets where its client companies are established and doing so with the same values and the same quality of service as those shared by iQera in France.
A growth leverItaly is one of the principal European NPL markets. Furthermore, this market, in full growth phase, is critical for a number of the group’s historical partners – including the major French banks who have a wide presence there. The creation of iQera Italia, with the acquisition of Serfin and of Sistemia, is therefore a real growth lever for the group.
Italy now represents around 25% of the group’s employees and sales. iQera Italia, headquartered in Rome, also has sites in Spoleto, and in Durrës (Albania). In all, Serfin and Sistemia employ close to 680 people.
With the 16% increase in our activities in 2019, the Italian market has greatly contributed to iQera’s dynamism. iQera Italia should continue to be an important engine of our group’s overall growth in 2020 as a result of its signing of a key contract with the Italian subsidiary of a large French banking group.
46 47
To do this, the group completely rethought the organization of its servicing and collection or debt purchasing operations. Unified, integrated and coordinated, the operations division thus completed its performance management tools with continuous monitoring of the experience delivered and perceived by the clients entrusted to us.
Therefore, the primary mission of a production site is to be guarantor of the overall performance and of the quality of service rendered to the client. iQera intends, with this new organization, to offer its clients “a seamless experience” across the entire management cycle of its debts by offering the most pertinent treatment, the fairest solution, with the best team at the best time in compliance with the group’s rules of ethics.
78% of clients who have settled their debt are satisfied with their iQera experience
After an initial test phase ending in late 2018, iQera extended its comprehensive human listening program throughout the year 2019: the Qer program, in partnership with Eloquant, relies on a client listening mechanism via a management feedback platform. This mechanism makes it possible to measure and reconstruct in real time the perceived quality of its follow-up and collection operations with clients. In all, close to 280,000 people with late payments or outstanding payments in amicable phase were questioned. This relational approach of iQera made it possible to obtain at a key moment in the client cycle scores close to the standards of traditional client relations with an overall satisfaction rate of 67%. This rate is 78% with clients who have settled their debt. We also adapt our employee training programs based on this experiential feedback by contacting unsatisfied clients in order to better understand their situation, and close to 50% of them express their satisfaction with the resolution of their financial problem following this callback.
In addition to the indicators, our listening mechanism also makes it possible to gather clients’ verbatim comments in order to shed specific light on our responsible and ethical collection
Because each interaction counts, whether in our businesses or in our life, we place relationships at the center of our iQera project.
This is based on attention that we must pay to each client, to the clients of our clients, to our employees, shareholders, and partners. It includes the excellence of the services that we are to deliver, but also a personalization of every moment and active listening to what our ecosystem wants to tell us.
47
The end of the year 2018 and the year 2019 have marked a strategic turning point for iQera with its internationalization. If the group had already made a few sporadic incursions outside of France, this is the first time that it established itself abroad with the prospect of long-term development.
TRANSFORMATION
Internationalization A new experience of relationships
ANNUAL REPORT 2019
Perf
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48 49
Relying on collective intelligenceThe entire project to define the new culture attempted to promote listening and collective intelligence in order to design the culture closest to the aspirations of all of the employees. Throughout the year 2019, the iQera group’s employees were therefore consulted regularly through surveys, meetings, workshops, pilot projects, etc. For example, the definition of the group’s new values, which we call “firm beliefs,” was conducted in workshops with around a hundred employees around the world.
Three firm beliefs: achieve the new, team play and leave a positive impactThe three firm beliefs of iQera are 3 engaging action verbs that convey the company’s true spirit (cf. booklet 1: Creation).
This is the basis on which the Human Resources division, newly transformed into the Talent & Engagement Division, relied to define more broadly the group’s entire human relations policy. This policy is now based on three pillars:
• eXperienceOffering each of its stakeholders, employees, clients, principals and partners a unique experience, by creating a relational world based on listening and thus accelerating individual and collective performance.
• Community Culture Nourishing a community culture in which each person experiences a unique professional adventure. Where each person has the opportunity to grow and develop, to participate in the collective adventure by choosing to play different roles and where people listen to one another.
• ImpactBuild a community of responsible collabor’actors, proud of committing themselves and who listen to the world around them.
It is around these three pillars that the Talent & Engagement community launched several key projects in 2019. They will continue in 2020 and must help anchor our iQera culture.
What would a group be without shared culture and values? The guiding thread of our transformation was to establish the base of our culture, the iQera culture.
49
practices. To this end, the group has developed a semantic grammar for debt collection that is unique in the market and that makes it possible, thanks to machine learning, to automatically sort and categorize the major themes broached. This approach allows us to understand situations better, anticipate payment behaviors, prioritize the improvement actions to be carried out and therefore to manage the client financial relationship more deftly.
Symmetry of attention between clients and employeesBecause we are convinced that client satisfaction relies on a successful employee experience, in 2019, iQera intensified its active listening with its employees.
By putting client culture at the center of our organization, we offer ourselves the essential conditions for the creation of a new group capable of creating the difference for its teams. The values must be shared by the new employees joining the company. We therefore prioritized our first “onboarding” phase surveys to measure the perceived quality of the integration of our new employees. Our eNPS score of +30 (on a scale of -100 to +100) based on close to 500 employees establishes very encouraging bases for a true common culture built around our values.
This Qer program is consistent with our strategy of balance between human intelligence and artificial intelligence thanks to the data and in the service of an enhanced client experience. In 2020, its deployment should further accelerate with our major stakeholders: clients, clients of our clients and with our employees at other stages of their career with the group.
TRANSFORMATION
iQera culture: unique experience, community culture and positive impact
ANNUAL REPORT 2019
50
The experiential dimension constituted a key process in 2019 for developing the iQera experience, as we just saw through the active listening approach for involving employees in the creation of the group culture and through the Qer program.
To cultivate a community culture, the group worked on several levers: the new leadership model with the “Leadership Compass,” which aims to support them in their day-to-day role by learning how to know themselves better in order to connect, chart a course and create value. Another illustration, this year, the group structured its internal information and communication system and increased the initiatives at its sites to create the first shared moments of life and establish the first iQera traditions.
Another large-scale project that supports our cultural transformation: the creation of a group learning environment. By relying on the best that the different internal training experiences inherited from each old company had to offer and by shaking up the traditional training plan model, in 2019, the group began a process of reflection to develop new learning methods. The aims? To create a continuous learning process at every level of the company, increase the forms of learning, and make the initial training of employees more effective. It also involves being able to ensure the transfer and retention of know-how at the group level, and, finally, preparing for the development of new “soft” skills that will make the difference in our businesses. More globally, the aim is to allow each employee to play an active role in his learning and thus give him the keys to develop and grow at his own pace in the group.
Opening the way The last component of the iQera culture: positive impact. With its change in size, the group became aware of its responsibility. The group has always encouraged and carried out community campaigns through its support of different causes such as research, disability, insertion or culture. iQera now wishes to structure its CSR efforts and give them more impact, internally and externally, as a player in debt collection and more broadly as a civic player.
In 2019, the group thus launched its first sociological study, with the help of two sociologists from the University of Paris Est Marne la Vallée, to better understand who the clients with outstanding payments that it contacts on a daily basis are. By correlating fundamental approach and field experience, the group wishes to assist and support, with empathy and as relevantly as possible, people in a financially vulnerable situation. The results of this study should be published in the spring of 2020. The group intends to go further beginning in 2020 in its support for people with excessive debt by signing a partnership with the Cresus association.
And as a responsible employer, iQera is concerned about the problems of social and professional integration. The group is therefore continuing its support for the Institut de l’Engagement (Engagement Institute), which allows thousands of youths who are involved in volunteer or charitable activities to leverage their engagement and structure their plans for the future (training, studies, research and job creation). iQera also signed a sponsorship agreement with PSL University to help launch the master’s degree in sustainable development, which will be available in 2020, and with Proxité to assist and support youths from disadvantaged neighborhoods.
By joining in these different projects, iQera wishes to commit itself with and for its teams.
Perf
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TRANSFORMATION
5151
ANNUAL REPORT 2019
Perf
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ance
.
PERFORMANCEANNUAL REPORT 2019
54 5555
57 Risk factors
63 Financial conditions
65 Financial review
69 Consolidated financial statements
77 Notes
Create a sustainable champion.
We are pursuing, as we have done for more than a year now, this wonderful
entrepreneurial project.
Summ
ary
Business and industry risks
Purchasing debt portfolios is one of our two core activities (debt purchasing generated [•]% of our cash revenue for the fiscal year ended December 31, 2019) and there may not be sufficient supply of appropriately priced debt available for purchase by us in the future. The supply of debt portfolios available for purchase varies over time. This unevenness in the availability of portfolios for purchase may mean that during certain financial reporting periods we may make few or no debt purchases. This could adversely affect our [Cash EBITDA] generation because our Gross Collections will suffer, impairing our ability to absorb fixed costs. The availability of debt with the right criteria and at a price that generates profits may be adversely affected by various factors including, among other things, macroeconomic conditions, levels of consumer confidence and consumer spending, availability of credit to SMEs and consumers, changes in the debt collection outsourcing strategy of financial institutions, increasing competition within the sector, increasing or evolving legal and regulatory regimes at the national or supranational level and negative publicity or a loss of trust in the debt purchase and collections industry. We may also misprice the portfolios we purchase and forward flow agreements, which are an important part of our business. may contractually require us to purchase portfolios at a higher price than desired.
If we are unable to identify portfolios at appropriate prices or if we fail to correctly price the portfolios that are for sale, we may purchase portfolios at higher prices, reducing our profitability and we may not be able to meet our historical profit targets, or make any profit at all, from such purchases. If we are unable to purchase portfolios from debt sellers of appropriate quality and at appropriate prices, or if one or more debt sellers stop or decrease their sales of portfolios, or place onerous conditions on the purchasers of their debt portfolios, if we do not replace portfolios as and when needed, if we are unable to procure sufficient funding to purchase further portfolios or if the value of some
or all of our portfolios deteriorates, we could lose a significant potential source of income and our business, prospects, financial condition and results of operations may be materially and adversely affected. We also may not be able to collect sufficient amounts on our debt portfolios to generate expected returns and we may purchase portfolios that contain accounts that are not eligible to be collected, including due to defects in debtor documentation that may make the credit agreements unenforceable.
The majority of our revenue comes from clients in the financial services industry who are particularly sensitive to reputational risks and any material failure in the banking system or the financial services industry could negatively affect our business. Participants in the French and Italian financial services industry actively monitor the reputation and track record of their debt collection providers and any deterioration of our reputation may harm our relationship with our key clients, leading to lost business and fewer opportunities to purchase or service debt portfolios. Negative attention and news regarding the debt purchase, collections or servicing industries or individual debt purchasers, collectors or servicers, (including relating to errors in collections processes) may also have a negative impact on a debtor’s willingness to pay a debt owed to us and may diminish our attractiveness as a counterparty for debt sellers and other third parties.
We operate in industries that are highly competitive. We may be unable to compete with businesses that offer higher prices for debt portfolios or lower prices for services and we may face other intense competitive pressures. Our industry has experienced consolidation in recent years, particularly in France and such consolidation may lead to competitors acquiring the necessary scale and expertise to compete with us for attractive financial services debt portfolios, which are currently offered through tender processes that are typically open to a limited number of bidders.
PERFORMANCEANNUAL REPORT 2019
1. Risk factors
Financial Year
56 5757
As the French market leader in our sector, iQera bears a responsibility with regard
to its entire sphere of influence.
While we have various means of disaster recovery protection, a systemic failure of our data centers or any material disruption to, or failure of, our systems, the systems of our third-party service providers or the systems of the banking and other sectors that are integral to our business, especially if it also impacts our backup or disaster recovery systems, would disrupt our operations and materially and adversely affect our business. Further, as most of the systems, technologies and programs that we use have been developed internally, our level of support and documentation in respect of these systems, technologies and programs may not be comparable to that of third-party software packages or services. Certain of our employees possess important, undocumented knowledge of our proprietary analytics systems and platforms, and the loss of any such employee could limit our ability to maintain, repair or modify these systems and platforms. In addition to risks related to our core IT infrastructure, we may not be able to successfully anticipate, manage or adopt technological changes within the debt purchase and collections industry. We rely on our IT infrastructure platform and proprietary analytics systems: our ability to integrate these technologies into our business is essential to our competitive position and performance although it subjects us to inherent costs and risks associated with maintaining, upgrading, replacing and changing these systems, including impairment of our information technology, substantial capital expenditure and demands on management time. We may not be successful in anticipating, managing or adopting technological changes within the debt purchase and collections industry on a timely basis, which could reduce profitability or disrupt operations and harm our business. IT and telecommunications technologies are evolving rapidly and are characterized by short product life cycles and our future growth may require additional investment in these systems, and we may not be successful in improving them.
In order to win and keep clients, we must comply with their expectations and requirements. In addition to national and supranational legal and regulatory regimes (which are discussed below), we are increasingly becoming subject to industry guidance, voluntary codes of conduct and recovery rules: many debt sellers now expect us to comply with non-mandatory requirements that have come to be seen as essential, rather than merely “good market practice. Although debt purchase, collection and servicing is not regulated by the Autorité de contrôle prudentiel et de résolution (the French banking and insurance regulator), we self-impose, or in some cases our clients impose, similar compliance requirements to those of our banking clients in terms of relationships with debtors.
We also need to adapt to debtors’ changing circumstances or circumstances impacting debtors: if there are adverse changes in the financial circumstances of our debtors after we have acquired their accounts, including as a result of any reduction in debtors’ income or in government benefits received by debtors or indirectly as a result of a further general deterioration in the macroeconomic environment, this could lead to reduced collections, increased collection costs and reduced portfolio returns, which may in turn result in reduced cash flow and imprecise forecasts. Moreover, a portion of our Gross Collections is achieved through litigation and depends on success in individual lawsuits. Litigation may be lengthy and complex, requires an infrastructure to maintain, catalogue and produce accurate and authentic account documents for presentation in court and the outcome of any lawsuit is inherently unpredictable. Any changes to laws, regulations or rules that affect the manner in which we initiate enforcement proceedings, including rules affecting documentation, or a reduction in applicable statutes of limitation, could result in increased administration costs or limit the availability of litigation as a collection tool, which could have a material adverse effect on our business and results of operations.
We are also subject to risks associated with our contracts including, among other things, potential early termination, our ability to correctly assess pricing terms or a reduction in the volume of claims we service. The profitability of our business depends on our ability to successfully calculate prices by taking into consideration all relevant economic factors and our ability to manage day-to-day operations under contracts. Under certain of our debt collection service contracts, we are compensated for our services according to a percentage of Gross Collections and we may be unable to accurately predict the costs or identify the risks associated with these contracts or the complexity of the services we are asked to provide. If our performance under our contracts becomes more costly than anticipated, we may experience lower margins than expected, losses under these contracts, litigation or even the loss of clients. Some of our contracts subject us to penalty clauses, extraordinary termination clauses, as well as service level and audit clauses that permit clients to monitor the quality of our services. If we are unable to fulfil our obligations under our contracts for any reason, we risk the loss of revenue and fees under such contracts, the potential loss of a client and significant harm to our reputation. We may also have disputes or disagreements with our clients as to the level of services we have agreed to provide or contract terms. The potential effects of these risks may increase as we enter into larger contracts.
Changes in the macroeconomic environment in France and Italy, where we conduct the majority of our operations, may adversely affect us. French household consumption, a proxy for the debtor demand that underpins the debt that we purchase, has been uneven over the past few quarters. Economic conditions in France or Italy can impact our business and performance in various ways, including increasing the amount of one-off payments and early repayments made by debtors, reducing the number of attractive portfolio opportunities which are available for us to purchase and service and increasing price competition if financing becomes more widely available for competitors at lower funding cost. Likewise, prolonged economic weakness and poor prospects for economic growth in France or Italy have various impacts on SMEs, consumers and debtors generally, and thus on our business and performance. The volatility and uncertainty that affected the banking system and financial markets during the global financial crisis resulted in a contraction of credit markets. In particular, there was a significant shift in the credit production environment as a result of the collapse of the sub-prime lending market in 2008, which resulted in the tightening of capital requirements and lending standards. Any deterioration in the macroeconomic environment in France or Italy (or the global or European economies more generally) could harm our performance and prospects. Many factors create economic uncertainty including, but not limited to, social and political changes (such as the United Kingdom’s exit from the EU) and catastrophic events such as natural disasters, local and global public health emergencies (such as pandemics and epidemics) and political crises. Unpredictable and fluctuating interest rates, which may in turn be driven by macroeconomic shifts, could impair the ability of debtors to pay their debts which could have a material adverse effect on our financial condition, financial returns and results of operations. These factors are outside our control but may lead to material adverse outcomes for our business.
Operational risks
Anticipating and forecasting future cash flows properly for the debt portfolios we purchase and service is key to our future performance. A lack of reliable information or a failure of our models and analytical tools could lead to mispricing of these portfolios, which may have a material adverse effect on the financial returns from such portfolios. In operating our business, we are dependent on our proprietary analytics systems and if these systems fail or if our competitors develop comparable know-how, our business, financial condition and results of operations could be materially and adversely affected.
For example, we could lose a significant competitive advantage and our business could be negatively affected if current applicable data processing restrictions in France, Italy or the European Union were to change such that credit market participants could access a publicly-available, centralized credit bureau data, as is already the case in certain other jurisdictions, such as the United Kingdom.
We rely on people for our continued success. Our senior management team members and key employees are important to our operations, the loss of one or more members of our senior management team or one or more of our key employees, the failure to hire and retain enough sufficiently trained employees to support our operations, the occurrence of labor disputes or an increase in labor costs could materially and adversely affect our business, prospects, financial condition and results of operations. We are also dependent on a number of third parties for the operation of our business. If we are unable to maintain key relationships such third-party providers our business, prospects, financial condition and results of operations could be materially adversely effected. In addition, we may be held liable for the acts of employees or third parties if we fail to develop, implement, monitor and enforce our own risk and compliance policies and we rely upon unpatented proprietary know-how, continuing technological innovation and other trade secrets to develop and maintain our competitive position. Our employees possess valuable trade secrets about our models and business processes, and the risk of disclosure of such proprietary know-how could be heightened if a significant number of employees cease to work for us or if our confidentiality agreements fail to sufficiently protect us. As a general matter, our internal control system may not detect all irregularities or adequately address any of the aforementioned risks.
Our operations are also highly dependent upon access to, and the functioning and integrity of, core IT applications, systems and infrastructure. We handle and process large amounts of potentially sensitive or confidential information, such as personal information of debtors, including names and account numbers, addresses, contact information and other account specific data. Any security or privacy breaches of these databases could expose us to liability, cause us to incur significant expenses relating to resolution of these breaches, harm our reputation and deter clients from conducting business with us. We also use our IT systems to identify large numbers of debtors, analyze and segment accounts and monitor the results of our collection efforts: information stored about debtors is critical for monitoring Gross Collections and follow-up efforts in respect of an amicable repayment plan.
ANNUAL REPORT 2019 PERFORMANCE
58 5959
• The introduction of the Organization for Economic Cooperation and Development’s Base Erosion and Profit Shifting (“BEPS”) action plan, which was introduced in 2015 and is intended to reform the international tax system so as to prevent tax avoidance and aggressive tax planning, may impact our effective rate of tax in future periods.
• The adoption by the Council of the European Union
of a EU list of non-cooperative jurisdiction for tax purposes and the use of this list in the jurisdictions where we operate may impact our financial results.
• French tax legislation may restrict the deductibility,
for French tax purposes, of all or a portion of interest incurred in France, thus reducing the cash flow available to service our indebtedness.]1
We are also subject to ongoing risks of litigation under credit, collections and other laws. From time to time we may be named as defendants in litigation, including under credit, tax, collections, contract, intellectual property, employment, competition and other laws. Such claims against us, including litigation with a large number of claimants, regardless of merit, could lead to costly proceedings and divert management personnel from their regular responsibilities. If such claims are adversely determined against us, we could be forced to suspend certain collection efforts, pay damages, be subject to enforcement orders or have our registration with a particular regulator revoked, and our reputation, financial condition and results of operations could be materially and adversely affected. In addition, claims management companies and debtor rights groups could increase their focus on the debt collection industry. Such negative publicity or attention could result in increased litigation against us, damage our reputation and attract regulatory inquiries. Additionally, the failure to register under the Investment Company Act may result in a material adverse effect on us.
Financial risks
We use a number of estimates and assumptions in the preparation of our consolidated financial statements, which could prove to be incorrect or cause our earnings to fluctuate. The preparation of our consolidated financial statements requires our management team to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. These estimates and associated assumptions are based on historical experience and various other factors that are considered by management to be reasonable under the circumstances at the time and these estimates and assumptions form the basis of judgments
about the carrying values of assets and liabilities that are not readily available from other sources. Areas requiring more complex judgments may shift over time, based on changes in accounting policies or on changes in our business profile. More complex judgments are required in relation to revenue recognition, impairment of our purchased loan portfolios and cash flow forecasts, among others. Other factors can also create uncertainty in this respect. For example, the availability of debt portfolios for purchase and timing of Gross Collections from debtors displays certain seasonal variation. As a general matter, historical operating results and quarterly Gross Collections may not be indicative of future performance.
[Our current financial statements are prepared, reviewed and revised in accordance with IFRS for ex-MCS perimeter. For DSO, this IFRS alignment is new and is not fully comparable with its prior financial statements prepared in accordance with French GAAP.]2
The valuation of our purchased credit portfolios and goodwill on balance sheet are also susceptible to impairment under IFRS. IFRS requires periodic impairment testing of purchase credit portfolios and goodwill on balance sheet at the time of the preparation of each consolidated balance sheet and more frequently if special circumstances so require. Any impairment of our purchased credit portfolios is mainly assessed on a collective basis and takes into account the likelihood of Gross Collections based on our forecasted Gross ERC. Any impairment of goodwill may result from, among other things, deterioration in our performance, a decline in expected future cash flows, adverse market conditions, adverse changes in applicable laws and regulations and a variety of other factors. The amount of any impairment must be expensed as a charge to the next consolidated income statement at the end of the relevant period. Any future impairment of purchased credit portfolio and goodwill may result in permanent material reductions of our income and equity under IFRS and will not be reversed in the future.
[French tax legislation may restrict our ability to use French tax loss carry-forwards: we may record deferred tax assets on our balance sheet, reflecting future tax savings resulting from discrepancies between the tax and accounting valuation of the assets and liabilities or in respect of tax loss carry forwards from our entities. The actual realization of these assets in future years depends on tax laws and regulations, the outcome of potential tax audits and the future results of the relevant entities. In particular, pursuant Article 209, I, paragraph 3 of the French Tax Code, the fraction of French tax loss carry forwards that may be used to offset
Any of these developments could have a material adverse effect on our business, results of operations or financial condition.
Most of the debt that we purchase benefits from guarantees and/or security, which adds complexity to our operations and we believe the collateral directly or indirectly securing the underlying loans in our purchased portfolios represents significant value. The amount of proceeds realized upon the enforcement of the security interests over the collateral or in the event of liquidation depends upon many factors, including, among others, general market and economic conditions, condition of the market for the collateral, ability to sell collateral, fair value of the collateral, timing and manner of sale, ability to readily liquidate the collateral, restrictions on collection, assignment or onward sale, availability of buyers, condition of the collateral and exchange rates. These assets, in particular, may be subject to significant changes in value due to economic or regulatory trends. To realize the value of the collateral, we need to rely on third-party service providers, notably law firms and bailiffs, which may require us to make significant upfront payments to cover legal and other fees. Any failure to accurately value the collateral or identify any enforcement-related risks could impair or reduce the proceeds realized upon liquidation or enforcement of the security interest. In the event of a foreclosure, liquidation, bankruptcy or similar proceedings, the value of the collateral or the proceeds from any sale or liquidation of such collateral may not be sufficient to recover the price we originally paid for such debt. In addition, the value of the collateral may fluctuate over time and, by its nature, some or all the collateral may not have a readily ascertainable market value or may not be saleable or, if saleable, there may be substantial delays in its disposal. To the extent there are prior liens, security interests and other rights granted to third parties on the same assets that are securing our debt, those parties may seek to enforce their liens on such assets or exercise other rights and remedies with respect to those assets, which could adversely affect the value of that collateral and our ability to realize or enforce that collateral.
We have general liability and property insurance in place to cover liability to which we may be exposed from our business activities and certain of our facilities in amounts that we consider appropriate. However, our insurance coverage may not be sufficient to meet our liabilities. Our insurance policies are subject to certain limits and deductibles, do not include business interruption coverage and not all claims are insurable and we may experience major incidents of a nature not covered by our insurance. Furthermore, our insurance costs may increase over time.
Insurance coverage may not be available in the future at current costs or on commercially reasonable terms, and the insurance proceeds received for any loss of, or any damage to, any of our facilities may not be sufficient to restore the loss or damage. Any of these factors may have a materially adversely effect on our results of operations, financial condition and cash flows.
We have in recent years engaged in an expansion of our business: further expansion may strain our resources, affect our ability to maintain our levels of collections or affect our ability to implement effective portfolio pricing standards. We may also experience difficulties integrating businesses we acquire, make acquisitions or pursue joint ventures, business combinations or other investments that prove unsuccessful or strain or divert our resources and may not be successful in achieving our strategic goals including, among others, maintaining our market share in France and Italy, expanding our third-party servicing business and increasing purchases of performing loans. Any or all of these factors could materially and adversely affect our business.
Legal and regulatory risks
We operate in a variety of jurisdictions and must comply with applicable laws, regulations, licenses and codes of practice across these jurisdictions and any changes to the legal, regulatory or political environments in which we operate may negatively affect our business. Any failure to comply with applicable laws and regulations relating to the purchase and collection of debt and the broader credit industry could negatively affect our business. The volume of legislation that is applicable to our industry in the European, French and Italian markets has increased over the last few years and this trend may continue, depending on the prevailing political environment and attitude towards our sector. In this context, changes to the regulatory and/or political environment in the future or an increasing volume of legislation may materially and adversely affect the debt purchase, collection and servicing industry and impede our business.
[We are also subject to extensive and evolving tax laws and regulations: audits, investigations, examinations and challenges by tax authorities, or changes in tax laws or regulations, or the application thereof, could materially and adversely affect our business, financial condition and results of operations. Some evolutions in tax laws and regulations that may affect our business include:
ANNUAL REPORT 2019 PERFORMANCE
60 6161
the taxable profit with respect to a given fiscal year is limited to €1.0 million plus 50% of the portion of taxable profit exceeding €1 million. Any reduction in our ability to use these assets due to changes in laws and regulations, potential tax reassessment, or lower than expected results could have a negative impact on our business, results of operations and financial condition.]3
Risks related to our indebtedness
Our leverage may make it difficult for us to service our debt, including the Notes, and operate our business. We may incur additional indebtedness, including at the level of our subsidiaries, which could increase our risk exposure from debt and could decrease your share in any proceeds from the enforcement of the Collateral.
We are subject to restrictive covenants under the [Revolving Credit Facility Agreement]and the Indenture, which could impair our ability to run our business. We are also exposed to interest rate risks as borrowings under the Revolving Credit Facility bears interest at floating rates that could rise significantly, increasing our interest cost and reducing cash flow.
We may not be able to generate sufficient cash to meet our debt service obligations or our obligations under other financing agreements and we may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful in which case our creditors could declare all amounts owed to them due and payable, leading to liquidity constraints. We may be unable to raise the funds necessary to refinance indebtedness maturing prior to the stated maturity of the Notes or to repay the Notes at maturity.
ANNUAL REPORT 2019
62
Our debt currently consists of €445 million in aggregate principal amount of Senior Secured Notes and a €50 million Super Senior RCF. In connection with the acquisition of Sistemia, we also took out a €25 million loan via our subsidiary DSO Italia 2 from Credit Agricole. This debt is repayable over four years at the fixed interest rate of 2%. We also took out an additional vendorloan for €38 million to purchase a significant portfolio during the last quarter of 2019. This loan is to be repaid based on the collections achieved from this portfolio and bears an interest rate of 3.25%. This debt also had a significant impact on the portion of collections attributable to iQera.
For this reason, the debt ratio is presented based on Attributable Cash EBITDA including the restatement of co-investor debt from total net debt.
PERFORMANCE
Net Leverage on LTM Cash EBITDA Cash and cash equivalents excl. restricted cash
3
80
9486
40
50
60
70
80
90
100
2.8
3.0
3.2
3.4
3.6
3.8
4.0
Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019
72 3.4
43
LTM Pro Forma View (including Sistemia)
Considering the record amount of portfolio purchases made by iQera in 2019 (€197 million), we ended 2019 with a weaker but still strong cash position as compared to the end of 2018.
2. Financial conditions
Financial Year
63
ANNUAL REPORT 2019
1. Debt Net
Currency: €k Dec-19 Synergies impact(3) Dec-19 with synergies
High Yield Bonds 433,231 - 433,231
Other loans(1) 41,616 - 41,616
Co-investors' Debt 38,714 - 38,714
Others(2) 7,432 - 7,432
GROSS DEBT (IFRS) 520,993 - 520,993
Cash including restricted cash 50 742 - 50,742
Restricted cash 8,171 - 8,171
Cash and cash equivalents excL. restricted cash 42,570 - 42,570
NET DEBT (IFRS) 478,423 - 478,423
LTM Cash EBITDA (3) 134,237 2,694 136,931
LEVERAGE ON CASH EBITDA 3.6x - 3.5x
Net Debt excluding co-investors debt 439,709 - 439,709
LTM Attributable Cash EBITDA 126,813 - 129,507
LEVERAGE ON ATTRIBUTABLE CASH EBITDA 3.5x 2,694 3.4x
6464
Year ended Dec. 31(in € thousands) 2019 2018
Audited Unaudited
Attributable Gross Collections 142,585 116,374
Non-attributable Gross Collections 7,397 1,234
GROSS COLLECTIONS 149,982 117,608
Debt servicing revenue 121,417 119,851
TOTAL CASH REVENUE 271,399 237,459
Professional fees and services (35,119) (39,877)
Personnel costs (67,192) (63,259)
Committed costs (34,851) (29,357)
CASH EBITDA 134,237 104,966
Cash distributions to SPV co-investors (7,424) (1,240)
ATTRIBUTABLE CASH EBITDA 126,813 103,726
Below is a comparison of pro forma cash-based financial information for the combined iQera (including Serfin and Sistemia) for the years ended December 31, 2018 and 2019. This unaudited pro forma cash-based financial information is based on:
3. Financial review
PERFORMANCE
Financial Year
• the unaudited Louvre Bidco SAS (the “issuer”) Cash EBITDA data for the year ended December 31, 2018 derived from the audited consolidated financial statements of the Issuer and its subsidiaries as of and for the year ended December 31, 2018, which includes DSO SAS (“DSO”) and its subsidiaries as from October 4, 2018, the date of the acquisition of DSO, prepared in accordance with IFRS;
• the unaudited DSO Cash EBITDA data for the year ended December 31, 2018 derived from the audited consolidated financial statements of DSO and its subsidiaries as of and for the year ended December 31, 2018 prepared in accordance with French GAAP;
• the unaudited Serfin Cash EBITDA data for the year ended December 31, 2018 derived from the audited consolidated financial statements of Serfin and its subsidiaries as of and for the year ended December 31, 2018 prepared in accordance with Italian GAAP;
• the unaudited Sistemia Cash EBITDA data for the years ended December 31, 2018 and 2019 derived from the audited consolidated financial statements of Sistemia and its subsidiaries as of and for the years ended December 31, 2018 and 2019 prepared in accordance with Italian GAAP; and
• the unaudited Issuer Cash EBITDA data for the year ended December 31, 2019 derived from the audited consolidated financial statements of the Issuer and its subsidiaries, including Serfin, acquired in December 19, 2018, as of and for the year ended December 31, 2019, which includes Sistemia and its subsidiaries as from July 10, 2019, the date of acquisition of Sistemia via the subsidiary DSO Italy 2 Srl, prepared in accordance with IFRS.
65
1. For reference, iQera pro forma net debt including Sistemia on December 31, 2019.
1) Pro forma Issuer figures including Sistemia
ANNUAL REPORT 2019 PERFORMANCE
6666 67
On a pro forma combined basis, gross collections on purchased portfolios increased by €32.4 million, or 27.5%, from €117.6 million in the year ended December 31, 2018 to €150.0 million in the year ended December 31, 2019. The increase is due to the strong performance in Backbook collections (€108 million) and a high level of Frontbook collections (€42 million) resulting from our record level of portfolio acquisitions in 2020 (€197 million).
On a pro forma combined basis, debt servicing revenues grew by €1.6 million, or 1.3%, to €121.4 million for the year ended December 31, 2019 from €119.9 for the year ended December 31, 2018. In 2019, on a pro forma combined basis, debt servicing revenues represented 61% of iQera’s net revenue.
On a pro forma combined basis, total cash revenues increased by €33.9 million, or 14.3%, from €237.5 million in the year ended December 31, 2018 to €271.4 million in the year ended December 31, 2019.
On a pro forma combined basis, total costs increased by 3.5% overall to €137.2 million in the year ended December 31, 2019 as compared to €132.5 million in the year ended December 31, 2018. Compared to total cash revenue, on a pro forma combined basis, costs represented 50.5% of our revenues in the year ended December 31, 2019 versus 55.8% in the year ended December 31, 2018.
This decrease is linked to (i) the considerable growth in collections without additional investment in resources and (ii) the first positive results of the transformation plan carried out from 2019, after the acquisition of DSO.
On a pro forma combined basis, professional fees and services costs decreased by 11.9%, due in large part to allocation restatements in 2019 in Italy between legal costs and overheads costs following the integration of Serfin and Sistemia. Personnel costs increased by 6.2% to reach €67.2 million, a smaller increase than that of total cash revenue (24.8% of total revenue in the year ended December 31, 2019 versus 26.6% in the year ended December 31, 2018). Overheads costs increased by 18.7% to €34.9 million (i.e., 12.8% of total revenue in the year ended December 31, 2019 versus 12.4% in the year ended December 31, 2018) driven mainly by restatements of allocations and investments made in the Italian entities. In France, overhead costs for the year decreased by 10% in the year ended December 31, 2019 compared to the year ended December 31, 2018.
For the foregoing reasons, Attributable Cash EBITDA increased by €23.1 million, or 22.3%, to €126.8 million for the year ended December 31, 2019 from €103.7 million for the year ended December 31, 2018.
Year ended Dec. 31(in € thousands) 2019 2018
IFRS Pro formaUnaudited Unaudited
Attributable Gross Collections 142,585 115,629
Non-attributable Gross Collections 7,397 1,234
GROSS COLLECTIONS 149,982 116,864
Debt servicing revenue 108,250 82,036
TOTAL CASH REVENUE 258,231 198,899
Professional fees and services (29,317) (27,026)
Personnel costs (65,637) (54,934)
Committed costs (33,638) (23,396)
CASH EBITDA 129,640 93,542
Cash distributions to SPV co-investors (7,424) (1,240)
ATTRIBUTABLE CASH EBITDA 122,216 92,302
From Jan 1, 2019 to Jun 30, 2019
Year ended Dec. 31
(in € thousands) 2019 2018Unaudited Unaudited
Attributable Gross Collections - -
Non-attributable Gross Collections - -
GROSS COLLECTIONS - -
Debt servicing revenue 13,167 26,476
TOTAL CASH REVENUE 13,167 26,476
Professional fees and services (5,803) (11,315)
Personnel costs (1,555) (3,084)
Committed costs (1,213) (3,047)
CASH EBITDA 4,596 9,031
Cash distributions to SPV co-investors - -
ATTRIBUTABLE CASH EBITDA 4,596 9,031
Year ended Dec. 31(in € thousands) 2018
Unaudited
Attributable Gross Collections 744
Non-attributable Gross Collections -
GROSS COLLECTIONS 744
Debt servicing revenue 11,340
TOTAL CASH REVENUE 12,084
Professional fees and services (1,536)
Personnel costs (5,241)
Committed costs (2,914)
CASH EBITDA 2,393
Cash distributions to SPV co-investors -
ATTRIBUTABLE CASH EBITDA 2,393
2) Issuer figures including Sistemia and DSO
Issuer perimeter, as unaudited for the year ended December 31, 2019 and unaudited for the year ended December 31, 2018, including Sistemia from July 10, 2019, (the date of the Sistemia acquisition), and pro forma including DSO (as previously reported as of December 31, 2018) from January 1, 2018.
3) Serfin
The table below is provided for informational purposes only, and shows the unaudited Serfin financial figures on a historical stand-alone basis for the year ended December 31, 2018, prepared in accordance with Italian GAAP. Serfin was acquired by December 19, 2018 and was not consolidated in our IFRS consolidated accounts in 2018.
4) Sistemia
The table below is provided for informational purposes only, and shows the unaudited Sistemia financial figures on a historical stand-alone basis for the period from January 1 to June 30, in 2019 and the year ended December 31, 2018, prepared in accordance with Italian GAAP. Sistemia was acquired by July 10, 2019 and was not consolidated in our IFRS consolidated accounts in 2019.
ANNUAL REPORT 2019 PERFORMANCE
6868 69
Net cash flows from operating activities
Net cash flows from operating activities for the year ended December 31, 2019 were recorded as a net inflow of €103.7 million, as compared to a net inflow €72.8 million for the year ended December 31, 2018 mainly driven by the development of our activities in France and Italy.
Net cash flows for investment activities
Net cash flows used for investment activities for the year ended December 31, 2019 were recorded at an outflow of €260.4 million, as compared to an outflow €187.6 million for the year ended December 31, 2018. 2019 saw investments activity at a peak, driven by Sistemia’s acquisition in Italy for c. €70 million & a record level of portfolios purchases in France (€197 million).
Net cash flows for financing activities
Net cash flows related to financing activities for the year ended December 31, 2019 were recorded as a net inflow of €103.4 million, as compared to a net inflow of €166.8 million for the year ended December 31, 2018. In 2019, the increase in capital deployment use was supported by additional financing means of which (i) additional HY Bond for €55 million, (ii) a +€25 million loan following the acquisition of Sistemia, (iii) +€44 million from additional non-recourse financing on portfolio acquisitions, and (iv) +€6 million in RCF drawings end of December 2019. Net cash from financing activities is also including HY bonds interest expenses for the year ended December 31, 2019.
5) Issuer cash flows evolution
Below is a comparison of Louvre Bidco SAS Cash Flows evolution data for the years ended December 31, 2018 and 2019 derived from the audited consolidated financial statements of the Issuer and its subsidiaries as of and for the years ended December 31, 2018 and 2019.
Year ended Dec. 31(in € thousands) 2019 2018
Audited Unaudited
Net cash flows from operating activities 103,739 72,770
Net cash flows for investment activities (260,409) (187,593)
Net cash flows for financing activities 103,386 166,817
Change in net cash position (53,284) 51,994
Opening cash and cash equivalents 104,025 52,031
Closing cash and cash equivalents 50,742 104,025
Louvre BidCo S.A.S.
Statutory auditors’s report on the consolidated financial statements (For the year ended 31 December 2019)
To the Partners of Louvre BidCo S.A.S.SLouvre BidCo S.A.S. 256 BIS RUE DES PYRENEES75020 PARIS
Opinion In compliance with the engagement entrusted to us by the collective decision of the partners, we have audited the accompanying consolidated financial statements of Louvre BidCo S.A.S. (“the Group”) for the year ended 31 December 2019. These financial statements were approved by the President on 20 April 2020 based on information available at that date and in the evolving context of the Covid-19 health crisis.In our opinion, the consolidated financial statements give a true and fair view of the assets and liabilities and of the financial position of the Group as at 31 December 2019 and of the results of its operations for the year then ended in accordance with French accounting principles.
Basis for Opinion
Audit FrameworkWe conducted our audit in accordance with professional standards applicable in France. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.Our responsibilities under those standards are further described in the Statutory Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report.
IndependenceWe conducted our audit engagement in compliance with independence rules applicable to us, for the period from 01 January 2019 to the date of our report and specifically we did not provide any prohibited non-audit services referred to in the French Code of ethics (code de déontologie) for statutory auditors.
Justification of AssessmentsIn accordance with the requirements of Articles L.823-9 and R.823-7 of the French Commercial Code (code de commerce) relating to the justification of our assessments, we inform you of the following assessments that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period.These assessments were addressed in the context of our audit of the consolidated financial statements as a whole, approved in the context described above, and in forming our opinion thereon, and we do not provide a separate opinion on specific items of the consolidated financial statements.
4. Consolidated financial statements
Financial Year
ANNUAL REPORT 2019
7070
• Assesses the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. This assessment is based on the audit evidence obtained up to the date of his audit report. However, future events or conditions may cause the Company to cease to continue as a going concern. If the statutory auditor concludes that a material uncertainty exists, there is a requirement to draw attention in the audit report to the related disclosures in the consolidated financial statements or, if such disclosures are not provided or inadequate, to modify the opinion expressed therein.
• Evaluates the overall presentation of the consolidated financial statements and assesses whether these statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtains sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. The statutory auditor is responsible for the direction, supervision and performance of the audit of the consolidated financial statements and for the opinion expressed on these consolidated financial statements.
Neuilly-sur-Seine and Paris, 23 april 2020
PERFORMANCE
71
Specific verifications We have also performed, in accordance with professional standards applicable in France, the specific verifications required by laws and regulations of the information given in the Group’s management report of the President approved on 20 April 2020. Management has confirmed that events that have occurred and information that has come to light relating to the Covid-19 crisis since the financial statements were closed will be reported to the partners called to approve these financial statements.We have no matters to report as to their fair presentation and their consistency with the consolidated financial statements.
Report on Other Legal and Regulatory Requirements
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial StatementsManagement is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless it is expected to liquidate the Company or to cease operations. The consolidated financial statements were approved by the President.
Statutory Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements Our role is to issue a report on the consolidated financial statements. Our objective is to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with professional standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
As specified in Article L.823-10-1 of the French Commercial Code (code de commerce), our statutory audit does not include assurance on the viability of the Company or the quality of management of the affairs of the Company.
As part of an audit conducted in accordance with professional standards applicable in France, the statutory auditor exercises professional judgment throughout the audit and furthermore:
• Identifies and assesses the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, designs and performs audit procedures responsive to those risks, and obtains audit evidence considered to be sufficient and appropriate to provide a basis for his opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtains an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control.
• Evaluates the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management in the consolidated financial statements.
PricewaterhouseCoopers Ridha Benchamek
The statutory auditors
A.M. Audit ConseilBertrand Miquel
7272 73
ANNUAL REPORT 2019 PERFORMANCE
Consolidated Statement of profit or loss
(in € thousands) Notes December 31, 2019 December 31, 2018
REVENUE
Revenue debt purchasing 3 76,468 63,546
Revenue debt servicing 3 101,971 34,088
Other revenue 3 4,317 996
Total revenue - 182,756 98,630
Professional fees and services 4 (29,317) (12,852)
Personnel expenses 5 (65,637) (32,369)
Committed costs - (34,610) (15,379)
MARGIN FROM OPERATIONS - 53,192 38,030
Amortization of intangible assets acquired through business combinations - (4,088) -
Other income and expenses 6 (13,853) (12,475)
Operating income / (loss) 35,252 25,555
Financial income - 312 164
Financial expenses - (26,084) (17,799)
Net financial income / (loss) 7 (25,772) (17,635)
Pretax income 9,479 7,919
Income tax 8 (2,440) (3,751)
TOTAL NET RESULT 7,039 4,168
Attributable to the owners of the parent - 5,711 4,020
Non-controlling interests - 1,328 149
The impact of the first application of IFRS 16 is presented in note 2.2.1.
Other comprehensive income
(in € thousands) Notes December 31, 2019 December 31, 2018
Profit (loss) for the period - 7,039 4,168
Currency translation differences - (45) 17
Total items that may be reclassified to profit or loss - (45) 17
Actuarial gains and losses on post-employment benefit obligations 15 (74) 217
Total items that may be reclassified to profit or loss - (74) 217
Other comprehensive income (loss), net of tax - (119) 234
TOTAL COMPREHENSIVE INCOME (LOSS) FOR THE PERIOD - 6,920 4,402
Attributable to the owners of the parent - 5 634 4 262
Non-controlling interests - 1 286 141
Consolidated statement of financial position
Shareholders’ equity and liabilities
(in € thousands) December 31, 2019 December 31, 2018
EquityCapital and reserves attributable to the company 14 232,419 226,814Minority interests 9,120 2,474Total shareholders'equity - 241,539 229,288
Non-current liabilitiesPension and other post-employment benefit obligations 15 2,795 567
Long-term financial debt 17 496,431 406,134Long term lease debt 11 11,251 -Co-investors liabilities 18 32,762 1,192Provisions for other liabilities 16 7,751 6,643Deferred tax liabilities 19 26,657 18,254Other non-current liabilities - 1,334 1,580Total non current-liabilities - 578,982 434,370
Current liabilitiesShort-term financial debt 17 9,087 5,081Short term lease debt 11 2,570 -Co-investors liabilities 18 5,952 1,334Trade payables and other account payables 20 23,386 15,603Other current liabilities 20 35,593 33,406Total current liabilities - 76,589 55,424
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 897,110 719,082
Assets
(in € thousands) Notes December 31, 2019 December 31, 2018
Goodwill 9 388,506 340,506Other intangible assets 9 26,311 8,681Tangible assets 10 6,353 6,553Right of use 11 13,689 -Purchased loan portfolio 12 245,727 128,424Financial assets - 939 11,657Other non-current assets - 1,469 1,119Deferred tax assets 19 523 694Total non-currents assets - 683,516 497,635
Purchased loan portfolio 12 94,398 89,132Other receivables 13 68,453 28,291Cash and cash equivalents 17 50,742 104,025Total current assets - 213,593 221,448
TOTAL ASSETS - 897,110 719,082
ANNUAL REPORT 2019
7474
PERFORMANCE
Consolidated statement of changes in equity
75
Consolidated cash flows statement
(in € thousands) Notes December 31, 2019 December 31, 2018
Flows from operating activities Net income / (loss) for the period - 7,039 4,168Non-cash expenses - 14,628 9,583Tax expense 8 2,440 3,751Neutralization of financial cash flows - 24,815 17,217Cash flow from operating activities before change in working capital - 48,922 34,719
Portfolio: 12 - -Remeasurement of receivables - (3,711) (6,807)Amortization of receivables - 79,175 42,958Disposal of receivables - 494 141Co-investors debt: 18 - -Remeasurement of debts - (1,373) (112)Repayment of debts - (6,354) (572)Change in operating working capital (excluding portfolio) - (11,264) 2 443
Income tax paid - (2,150) -NET CASH FLOWS FROM OPERATING ACTIVITIES - 103,739 72 770
Flows for investment operations Acquisitions of portfolios 12 (196,972) (22,210)Acquisitions of co-investors debts 18 - (11,652)Acquisition of subsidiaries, net of cash acquired (1) - (56,853) (151,858)
Acquisitions of intangible assets 9 (3,874) (1,336)Acquisitions of tangible assets 10 (2,360) (610)Sale of tangible assets 10 - 6Other movements - (350) 67
NET CASH FLOWS FOR INVESTMENT ACTIVITIES - (260,409) (187 593)
Flows for financing operation Capital increase - 64,658Proceeds from new borrowings 17 96,044 122,151Repayments of borrowings 17 (6,456) (5,902)Decrease of lease debt 11 (2,824) -Increase of co-investors debts 18 43,915Other movements (2) (27,293) (14,090)
NET CASH FLOWS FOR FINANCING OPERATIONS 103,386 166,817
NET CHANGE IN CASH AND CASH EQUIVALENTS (53,284) 51,994
Opening cash and cash equivalents 104,025 52,031Closing cash and cash equivalents (3) 17 50,742 104,025
(1) This line mainly consists of : - the acquisition of 74,98% of the company Sistemia. The price of this acquisition amounts to €65.0 million and the incoming cash amounted €8,1 million (see note 1.2.2). - Serfin’s incoming cash for €1.8 million (the acquisition price of €11,7 million was paid in 2018) (see note 1.2.1).(2) This amount mainly represents the financial interests paid during the financial year for €21 million.(3) Including €8.171 K in cash received on behalf of third parties, as part of the iQera activity.
(in € thousands) Share capital
Issue preniums
Conso-lidated
reserves
Translation reserves
Actuarial gains and losses on post-employ-ment benefits
obligations
Attributable to the
shareholders of the parent
company
Non controlling
interests
Total
JANUARY, 1 2018 160,000 - (2,040) - - 157,960 22 157,982
Capital increase 60,833 3,825 - - - 64,658 - 64,658
Net income / (loss) for the period - - 4,020 - - 4,020 149 4,168
Payment of dividends - - - - - - (20) (20)
Effect of changes in consolidation scope - - - - - - 2,331 2,331
Other comprehensive income - - - 17 225 242 (8) 234
Other mouvements - - (66) - - (66) - (66)
DECEMBER 31, 2018 220,833 3,825 1,914 17 225 226,814 2,474 229,288
Net income / (loss) for the period - - 5,711 - - 5,711 1,328 7,039
Payment of dividends - - - - - - (12) (12)
Effect of changes in consolidation scop (1) - - - - - - 5,371 5,371
Other comprehensive income - - - (45) (32) (77) (42) (119)
Other mouvements - - (28) - - (28) - (28)
DECEMBER 31, 2019 220,833 3,825 7,597 (28) 193 232,419 9,120 241,539
(1) The impact on retained earnings attributable to minorities refers to the acquisition of 80% of Serfin’s shares and the acquisition of 74,98% of Sistemia’s shares.
ANNUAL REPORT 2019
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Notes
01. General information 7902. Accounting principles and methods 81
Notes to the consolidated income statement
03. Revenue 9304. Professional fees and services 9305. Personnel expenses 9306. Other operating income and expenses 9407. Net financial income / loss 9408. Income tax expense 94
Notes to the consolidated statement of financial position09. Intangible assets 9510. Property, plant and equipment 9611. Right of use and lease debt 9712. Loan portfolio 9813. Other receivables 9814. Equity 9815. Provisions for post employment benefit 9916. Provisions for other liabilities 10017. Borrowings and financial liabilities 10118. Co-investors liabilities 10219. Deferred tax 10320. Other operating liabilities 103
Additional disclosures
21. Risk management 10422. Off-balance-sheet commitments 10423. Related parties’ transaction 10624. Independant auditors’ fees 10625. Subsequent events 10626. Consolidation scope 106
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01. General information
1.1 General presentation
Louvre Bidco SAS is a French holding company located at 256, bis rue des Pyrénées, 75020 Paris. It manages a group of several companies specialising in receivables management.
The Group mainly operates in France and in Italy, acquires and manages receivables portfolios: • directly by acquiring receivables portfolios through it subsidiary MCS et Associés ; • indirectly through specialized structures, Hugo, Victor, Vasco, Cedrus and Quercius securitization
funds or trusts; • and through portfolio management on behalf of third parties.
From the end of 2018, the Group will be more established in Italy through the acquisition of two companies, with an activity dedicated to the processing and collecting of behalf of third parties.The consolidated accounts as of December 31, 2019 were adopted by the Board of Directors on April 22, 2020.
1.2 Highlights
1.2.1 Acquisition of Serfin
On December, 19 2018, via the subsidiary DSO Italy, the Group acquired 80% of the shares of Serfin, an Italian entity, specialized in the receivables management and recovering.Based in Rome, Italy and in Albania, Serfin’s annual revenue is approximately €13 million and the company employs approximately 500 people.
The acquisition price of Serfin is €11.7 million was paid in 2018 and is not subject to any price adjustment clause. The net cash acquired amounted to €1.8 million.
The acquisition costs of Serfin, for a total amount of €1.2 million, of which €0.9 million were already incurred in 2018, are included in the costs presented in the consolidated result for the period.As the acquisition date was close to year-end 2018, the investment remained into the balance-sheet as a financial statement last year. From January 2019, the company has been integrated in the part of the consolidation scope.
The identifiable assets acquired, and liabilities assumed were initially recognized at their fair value on the acquisition date. The main adjustments to those fair values during the reporting period concerned intangible assets, and especially client relationship for €4.6 million. The resulting final goodwill is €4.5 million.
The table below shows the calculation of goodwill: (in € thousands) Total
Total non-current assets 5,798
Total current assets 7,786
Cash and cash equivalents 1,842
Total assets 15,426
Total non-current liabilities 2,863
Total current liabilities 3,635
Total liabilities 6,498
Acquisition-date fair value of assets / (liabilities) 8,928
Effico Non-Controlling interest 1,786
Net equity acquired by Louvre Bidco 7,142
Acquisition price 11,600
Goodwill (4,457)
79
We intend to further strengthen our synergies to accelerate our growth in France as in Italy
and in our two core businesses.
ANNUAL REPORT 2019
During the period, Serfin contributed €13.5 million to revenues (see note 3) and €0.5 million to Group net income.
1.2.2 Acquisition of Sistemia
On July 10, 2019, via the subsidiary DSO Italy 2 Srl, the Group acquired 74.98% of the Italian group Sistemia, specializing in credit management covering the entire process of recovering secured and unsecured debts. Based in Rome in Italy, Sistemia was created in 2003. In continuous growth, it operates in 3 business: real estate, credit management and the development of business technologies. Sistemia employs 185 people and generate annual revenue of €26 million in 2018.
The purchase price of Sistemia is €65.0 million and is not subject to any price adjustment clause. The cash acquired in the transaction amounted to €8.1 million.
Sistemia’s acquisition costs of, for an amount of €1.4 million, are included in the costs presented in the consolidated result for the period.
The identifiable assets acquired, and liabilities assumed were initially recognized at their fair value on the acquisition date and the resulting goodwill amounts to €54.3 million. In accordance with IFRS 3, the purchase price allocation and the amount of goodwill may be adjusted within twelve months of the acquisition date.
The table below show the calculation of goodwill:(in € thousands) Total
Total non-current assets 599
Total current assets 15,148
Cash and cash equivalents 8,190
Total assets 23,937
Total non-current liabilities 784
Total current liabilities 8,868
Total liabilities 9,652
Acquisition-date fair value of assets / (liabilities) 14,285
Non-Controlling interest 3,574
Net equity acquired by Louvre Bidco 10,711
Acquisition price 65,048
Goodwill (54,337)
During the period, Sistemia contributed €16.3 million to revenues (see note 3) and €2.4 million to Group net income.
1.2.3 Financing of Sistemia’s acquisition
As part of the acquisition of Sistemia, the Group issued an additional bond of €55 million in principal, in addition to the existing high-yield bond of €390 million. The newly issued bond constitutes, along with the existing bond of €120 million, a unique category of debt securities (including modifications, waivers, purchase offers), except interest and redemptions. The bond is issued at a floating rate equal to Euribor 3 months plus 5.375% per year and will mature in 2024.
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02. Accounting principles and methods
2.1 Basis of preparation
The consolidated financial statements of LB Group for the year ended December 31, 2019 have been prepared in accordance with International Financial Reporting Standards (IFRS) and interpretations issued by the International Accounting Board (IASB) and adopted by the European Union (available on the following website: http://www.efrag.org/Endorsement., at the date these consolidated statements were authorized for issuance by the Board of Directors.The financial statements have been prepared on a historical cost basis, except for the following for certain categories of assets and liabilities as indicated, in accordance with IFRS principles.The Group did not early adopt any new standards, amendments to the existing standards or interpretations published by the IASB, but not yet adopted or not mandatorily applicable in 2019. The financial statements are presented in thousands of euros.
2.2 New IFRS standards, amendments and interpretations
2.2.1 New standards, amendments to existing standards and interpretations applicable on January 1, 2018
The following new standards, amendments to existing standards and interpretations are mandatorily applicable from January 1, 2019:
• IFRS 16 - LeasesAs of January 1, 2019, IFRS 16 - Leases becomes effective instead of IAS 17 as well as the associated IFRIC and SIC interpretations. The standard imposes a single method of accounting for contracts by lessees by recognizing an asset “Rights of use relating to leases” and a liability “Lease debts”. The Group’s rental contracts mainly relate to real estate assets, especially office premises.On January 1, 2019 the Group has applied the simplified retrospective method consisting in accounting for the cumulative effect of the initial application as an adjustment to opening equity. Consequently, data from previous years is presented in accordance with the accounting methods applied previously, as presented in the consolidated financial statements for the year ended December 31, 2018.
On the transition date, the Group adopted the following simplification measures provided by the standard: • the right of us relating to rental contracts is equal to the amount of the rental debt, adjusted if
necessary, for prepaid rents or provisions relating to the rental recognized in the balance sheet immediately before the date of application;
• the initial direct costs are not taken into account to assess the right of use (commissions, legal fees, negotiation costs, etc.);
• contracts not identified as leases according to IAS 17 and IFRIC 4, prior to the date of 1st application, have not been reviewed.
At the transition date, the Group adopted the following exemption measures: • rental contracts for low-value goods are excluded; • contracts with residual terms of less than one year are excluded.No impact was recognized in equity as of January 1, 2019.
The group has chosen not to recognize deferred taxes on January 1, 2019.
On December 16, 2019, the IFRS IC published an agenda decision on the following topics: • the determination of the enforceable period of a tacitly renewable contract, or of an indefinite
contract, which can be terminated by one of the parties with due notice. In particular, the question was asked about the concept of penalties on which the definition of the enforcement period is based.
• the relation between the amortization period of the arrangement’s inseparable from the leased property, and the duration of a contract.
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As conclusion, the IFRS IC adopted a broad and economical concept of penalties, going beyond contractual payments. Inseparable layouts that are not amortized may constitute a penalty to be taken into account in determining the enforceable period of the contract.Given the late publication of this agenda decision and the practical implementation difficulties for December 31, 2019, the Group is currently analyzing the possible impacts.The rental period is defined contract by contract and corresponds to the firm period of engagement taking into account the optional periods which are reasonably certain to be exercised.
Capitalized leases on the date of first application
Rental debtOn January 1, 2019, the Group recorded a rental debt for € 15.3 million, corresponding to the discounted amount of the payments remaining to be made on the operating leases identified on December 31, 2018.
The rental period used has been defined contract by contract and corresponds to the non-cancellable duration of the rental contract adjusted to consider: • options to extend the contract that the Group is reasonably certain to exercise; • early termination options that the Group is reasonably certain not to exercise.
The discount rates applied on the transition date are based on the Group’s marginal borrowing rate, to which a credit spread is added to take into consideration the economic conditions specific to each country. These discount rates have been determined considering the remaining contract durations from the date of first application, i.e. January 1, 2019 and their maturation.
The weighted average marginal rate at the date of transition is 1.84%.
The finance lease debt appearing on the balance sheet of December 31, 2018 in financial debt is reclassified on January 1, 2019 on the non-current and current lease debt lines for a total of €0.2 million.The Group decided to present the net lease debt in a separate note.
Right of useOn January 1, 2019, the carrying amount of the right of use relating to leases amounted to € 15.3 million and was equal to the rental debt and the reclassification of the following items: • advanced or accrued payments, net of advantages received from the lessor as of December 31.
2018 for €0.2 million; • fixed assets recognized at December 31, 2018 under finance lease in accordance with IAS 17 for an
amount of €0.2 million.Thus, the right of use related to leases amounts €15.7 million.
Presentation impactThe «Right of use relating to rental contracts» and «Rental debts» are presented in the consolidated statement of financial position.Depreciation charges and the resulting interest expense are recognized respectively in operating profit and in financial profit on a separate line «Interest on rental debts».
The following tables present the impacts of the first application of IFRS 16 on the balance sheet:
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Shareholders’ equity and liabilities
(in € thousands)December
31, 2018 First time application
IFRS 16January 1st, 2019
IFRS 16
EquityCapital and reserves attributable to the company 226,814 - 226,814
Minority interests 2,474 - 2,474Total shareholders'equity 229,288 - 229,288
Non-current liabilitiesPension and other post-employment benefit obligations 567 - 567
Long-term financial debt 406,134 (191) 405,943Long term lease debt - 13,056 13,056Co-investors liabilities 1,192 - 1,192Provisions for other liabilities 6,643 - 6,643Deferred tax liabilities 18,254 - 18,254Other non-current liabilities 1,580 - 1,580Total non current-liabilities 434,370 12,865 447,235
Current liabilitiesShort-term financial debt 5,081 - 5,081Short term lease debt - 2,466 2,466Co-investors liabilities 1,334 - 1,334
Trade payables and other account payables 15,603 - 15,603
Other current liabilities 33,406 - 33,406Total current liabilities 55,424 2,466 57,890
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 719,082 15,331 734,413
Assets
(in € thousands)December 31,
2018First time application
IFRS 16January 1st, 2019
IFRS 16
Goodwill 340,506 - 340,506Other intangible assets 8,681 - 8,681Tangible assets 6,553 (184) 6,369Right of use - 15,729 15,729Purchased loan portfolio 128,424 - 128,424Financial assets 11,657 - 11,657Other non-current assets 1,119 - 1,119Deferred tax assets 694 - 694Total non-currents assets 497,635 15,545 513,179
Purchased loan portfolio 89,132 - 89,132Other receivables 28,291 (214) 28,077Cash and cash equivalents 104,025 - 104,025Total current assets 221,448 (214) 221,234
TOTAL ASSETS 719 082 15 331 734 413
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Consolidated income statement
(in € thousands) December 31, 2019 Restatement IFRS 16 IAS 17
REVENUE
Revenue debt purchasing 76,468 - 76,468Revenue debt servicing 101,971 - 101,971Other revenue 4,317 - 4,317Total revenue 182,756 - 182,756Professional fees and services (29,317) - (29,317)Personnel expenses (65,637) - (65,637)Committed costs (34,610) 3,291 (37,901)
MARGIN FROM OPERATIONS 53,192 3,291 49,901
Amortization of intangible assets acquired through business combinations (4,088) - (4,088)
Other income and expenses (13,853) (2,902) (10,951)Operating income / (loss) 35,252 389 34,863Financial income 312 - 312Financial expenses (26,084) (734) (25,350)Net financial income / (loss) (25,772) (734) (25,038)Pretax income 9,479 (345) 9,824Income tax (2,440) - (2,440)
TOTAL NET RESULT 7,039 (345) 7,384
Attributable to the owners of the parent 5,711 (345) 6,055
Non-controlling interests 1,328 - 1,328
(in € thousands)
Commitments given under operating leases as of December 31, 2018 - 12,073PERIMETER - 3,584Effects related to optional periods not taken into account in off-balance sheet commitments 4,196 -
Effects related to deferred availability -612 -OTHERS - 2,199Others effects 2,199 17,856LEASE DEBTS BEFORE DISCOUNTING - 17,856DISCOUNT - -Discounting effect - -2,526
LEASE DEBTS AFTER DISCOUNTING - 15,331
Lease debt as of December 31, 2018 - 191
LEASE DEBT AS OF JANUARY 1st, 2019 AFTER FIRST TIME APPLICATION - 15,522
As of December 31, 2019, the impacts of the application of IFRS 16 (excluding finance leases) on the aggregates of the income statement are as follows:
In 2019, the repayments of the rental debts amounted to €2.8 million. Financial charges are presented in financial flows.The following table reconciles the rental debts at the transition date with the off-balance sheet commitments as of December 31, 2018:
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• IFRIC 23 - Uncertainty over tax treatmentsAs of January 1, 2019, the Group applied IFRIC 23 interpretation «Uncertainty regarding tax treatments».IFRIC 23 clarifies the application of IAS 12 «Income Taxes» regarding recognition and measurement, when there is uncertainty about the treatment of income tax. This application has had no effect on the valuation of current and deferred taxes.
Other standards applicable from January 1, 2019: • Amendments to IFRS 9 - Prepayment features with negative compensation • Amendments to IAS 28 - Long term interest in associates and joint ventures • Amendments to IAS 19 - Plan amendment, reduction or settlement • Annual Improvements to the 2015-2017 IFRS CycleThe application of these new standards has no impact for the Group.
2.2.2 New standards, amendments to existing standards and interpretations applicable in future years early, not early adopted by the Group
• Changes to the references of the conceptual framework in IFRS • Amendments to IAS 1 and IAS 8 - Definition of material
2.2.3 New standards, amendments not yet adopted by the European Union
• IFRS 17 - Insurance contract • Amendment to IFRS 3 - Business combination • Amendments to IFRS 9, IAS 39 and IFRS 7 - Interest rate benchmark reform
2.3 Consolidation methods and principles
Entities controlled by the Group are fully consolidated from the date on which control is transferred to the group and are deconsolidated from the date that control ceases. Joint ventures and associated companies are accounted for using the equity method of accounting after being recognized at cost.
2.3.1 Controlled entities
All subsidiaries or companies controlled by the Louvre Bidco Group are fully consolidated. Control exists when the Group has all of the following: • power over the entity (investee) that give it the ability to direct the investee’s relevant activities; • exposure, or rights, to variable returns from its involvement with the investee; • the ability to use its power over the investee to affect the amount of the investor’s returns. Subsidiaries are fully consolidated as from the date control is acquired until the date the control is transferred outside the Group. The Group reviewed the status of the securitization funds Hugo Créances 1, Hugo Créances 2, Hugo Créances 3, Hugo Créances 4, Cedrus and Quercius in light of the definition of control set out in IFRS 10. It decided that based on the Group’s role with regard to the funds’ relevant activities (acquisition consulting and portfolio management) and its exposure to their variable returns, the funds should be fully consolidated in its consolidated financial statements, even though these funds are represented and administered by an independent management company.The share of the Group’s co-investors in these structures, which entitles those investors to cash payments from the funds concerned, meets the definition of a liability as set out in IAS 32.Under IFRS 9, this liability should be measured at fair value on initial recognition and subsequently measured at amortized cost using the effective interest method.
2.3.2 Joint ventures
A joint venture is a joint arrangement whereby the Group has joint control of an entity with one or several other parties under a contractual agreement granting it rights to the net assets of the entity. Joint ventures are accounted for using the equity method. This consists in accounting for the net assets and net income of a company pro rata to the parent company’s interest in that company’s capital. Upon acquiring an interest in a joint venture, the related goodwill is included in the carrying amount of the investment.
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ANNUAL REPORT 2019
2.3.3 Associates
Associates are entities over which the Group exercises significant influence (generally accompanying a shareholding of over 20%) but not control. Associates are accounted for using the equity method. This consists in recognizing the net assets and net income of a company pro rata to the parent company’s interest in that company’s capital.
Upon acquiring an interest in an associate, the related goodwill is included in the carrying amount of the investment. The financial statements of subsidiaries, joint arrangements and associates are closed at December 31 of each year presented.
2.4 Measurement and presentation of financial statements
2.4.1 Intragroup transactions
Intragroup transactions, including receivables and payables, gains and losses, and internal profit (including dividends) relating to Group companies are eliminated in consolidation.
2.4.2 Tax-driven provisions
Changes in provisions recognized in accordance with tax legislation or treated as reserves are eliminated when determining consolidated net income.
2.4.3 Foreign currency translation
Functional and presentation currencyThe consolidated financial statements are presented in euro, which is the Group’s functional and presentation currency. The financial statements of subsidiaries with a functional currency other than the euro are translated into euros as follows: • assets and liabilities are translated at the closing exchange rate at the end of the reporting period, while
income statement and cash flow items are translated at the average exchange rates for the period; • any resulting translation gains and losses arising from the difference between the closing exchange rate
in the previous year and the current exchange rate, and between the average and closing exchange rates, are shown in translation adjustments within consolidated equity.
Transactions and balancesForeign currency transactions are translated into each entity’s functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in the income statement. Gains and losses on foreign currency cash flow hedges are accumulated in equity and reclassified to the income statement when the exchange gain or loss on the hedged item is recognized.
2.4.4 Significant judgements and estimates
In preparing the consolidated financial statements, the Group’s management is required to make estimates and/or assumptions that may impact the carrying amount of assets and liabilities at the reporting date as well as income and expenses for the year.
Estimates are made based on management’s best knowledge of the facts and circumstances giving consideration to previous experience and other factors deemed reasonable in the circumstances. They are used to determine the carrying amount of assets and liabilities that cannot be obtained directly from other sources. These estimates are continually reviewed. However, the final amounts reported in future consolidated financial statements may differ from the amounts resulting from these estimates.
Estimates are mainly used to price the receivables portfolio and measure intangible assets, and to a lesser extent to measure impairment losses on financial assets, recognize deferred tax assets, determine current and non-current provisions, but also estimate “options on minorities», «post-employment benefits obligations» et «estimated credit losses». Further details of these estimates are given in various notes set out below.
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2.5 Revenue recognition
2.5.1 Income on loan portfolio or Debt purchasing
Under the amortized cost method, income on loans and receivables is accounted for at amortized cost calculated using the effective interest method. The effective interest rate is the rate that exactly discounts the present value of the estimated future cash flows expected to derive from the portfolios to the asset’s carrying amount. In the event the future cash flow estimates are revised, the value of the portfolios included in assets is increased or decreased after applying the historical effective interest rate to the revised future cash flows, with an offsetting entry posted to income.
2.5.2 Income from debt servicing and other revenues
The Group generates revenue from servicing mainly for the management of debt collection for third parties, and to a lesser extent for the sale of ancillary IT services.
Revenue from sales of goods and services is recognized based on the consideration provided for in the contract with the customer and excludes any amounts collected for third parties. The Group recognizes revenue when it transfers control of the good or service to the customer, which takes place when the good or service is delivered in accordance with the terms and conditions agreed with the customer. For all business, control is transferred at a point in time.
The amount recognized in revenue is based on the transaction price set in the contract and corresponds to the amount of consideration that the Group expects to receive in line with the related contractual provisions. The transaction prices applied by the Group do not include any variable amounts requiring the use of estimates.The contracts entered into by the Group do not involve any financing components (either explicitly or otherwise). Consequently, no adjustments are made to the transaction prices to reflect the time value of money.
A receivable is recorded when the Group has performed its obligations, i.e., at the delivery date of the services or goods, which corresponds to the date on which the Group has an unconditional right to receive the consideration.
2.6 Intangible assets
2.6.1 Goodwill
Acquisition method of accountingBusiness combinations are accounted for in accordance with revised IFRS 3 (Business combinations). When the Group obtains control of an acquiree, the business combination is accounted for using the acquisition method of accounting at the date control was acquired: • the identifiable assets acquired and liabilities assumed are measured at their fair values at the acquisition
date; • where applicable, any non-controlling interests in the acquiree are measured either at fair value or at the
non-controlling interest’s proportionate share of the acquiree’s net identifiable assets (including fair value adjustments). This choice may be renewed on a case-by-case basis for each business combination;
• costs directly attributable to the acquisition (transaction costs) are to be recognized separately from the business combination and expensed in the period in which they are incurred;
• any adjustments to the purchase price are measured at fair value at the acquisition date even if it is unlikely that there will be an outflow of resources to settle the obligation. After the acquisition date, further adjustments to the purchase price are measured at fair value at the end of each reporting period.
Measurement of the purchase price, which includes, where applicable, the estimated fair value of any contingent consideration classified either as equity or a financial liability, is to be finalized within 12 months of the combination (measurement period). Any subsequent change in the fair value of amounts classified as a financial liability after the measurement period is taken to profit or loss.
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ANNUAL REPORT 2019
Any previously-held interest in the acquiree must be remeasured to fair value and the resulting gain or loss taken to profit or loss.
GoodwillGoodwill is determined at the acquisition date as the difference between: • the purchase price (consideration transferred) at the acquisition date, plus any non-controlling interests in
the acquiree measured based on either the share of net assets acquired (including fair value adjustments) or the overall enterprise value and acquisition-date fair value of any previous equity interest in the acquire; and
• the net fair value of assets acquired, and liabilities assumed at the acquisition date.Positive goodwill arising on the acquisition of fully or proportionately consolidated companies is included in assets under «Goodwill». Negative goodwill (bargain purchase) is immediately recognized in profit or loss. However, goodwill arising on the acquisition of equity-accounted companies is shown within «Investments in equity-accounted companies» in accordance with IAS 28 (Investments in associates and joint ventures).
Goodwill may be adjusted within the 12-month measurement period following the acquisition date in order to reflect the final calculation of the fair value of the assets acquired and liabilities assumed. Any adjustments to goodwill after this period are taken to profit or loss.
Goodwill is allocated to cash-generating units (CGUs). Goodwill is not amortized but tested for impairment at least annually or whenever events or circumstances indicate that it may be impaired. Where appropriate, an impairment loss is recognized in the income statement and cannot be reversed.
2.6.2 Other intangible assets
Other intangible assets include separately acquired intangibles such as software or client relationships. Costs relating to the acquisition of software licenses are included in assets based on the costs incurred to purchase the software concerned and bring it into service. These costs are amortized over the estimated useful life of the software.
Client relationships acquired in a business combination are recognized separately from goodwill if they are (i) controlled by the Group and (ii) separable, arise from contractual or other legal right. Amortization of those intangible assets related to acquisitions is recorded on a separate line in the income statement. Intangible assets with indefinite useful lives are not amortized but are tested for impairment whenever there is an indication that may be impaired.
2.6.3 Property, plant and equipment
Property, plant and equipment are recorded in the balance sheet at historical cost less accumulated depreciation and any accumulated impairment losses.Depreciation is recognized on a straight-line basis over the estimated useful lives of the different asset categories, taking into account any residual value. The useful lives of the Group’s main assets are as follows: • Buildings: 10 to 20 years • Fixtures and fittings: 3 to 10 years
2.6.4 Impairment of non-current assets
Assets with an indefinite useful life are not depreciated/amortized but are tested for impairment each year. Other depreciable/amortizable assets are tested for impairment when specific events or circumstances indicate that their recoverable amount may be lower than their carrying amount. Impairment is recognized for the excess of the carrying amount over the recoverable amount. Where appropriate, assets are tested individually or within cash-generating units (CGUs) when their value cannot be individually assessed.
Goodwill is not amortized but may be impaired based on the results of impairment tests carried out at least annually and whenever there is an indication that it may be impaired. For the purpose of impairment testing, items of goodwill that cannot be individually tested for impairment are tested at the level of the group of CGUs expected to benefit from the synergies of the business combination. The recoverable amount of a group of CGUs to which goodwill is allocated is the higher of fair value less costs to sell and value in use.
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2.7 Leases under IAS 17
Leases are classified as operating leases when all risks and advantages related to the leased asset are attached to the lessor. Operating leases payments are linearly accounted in the profit and loss statement, over the contract duration.
Lease transactions are classified as finance leases when in substance they transfer virtually all the risks and rewards incidental to ownership of the leased asset to the lessee. In accordance with IAS 17, assets held by the Group under finance leases are shown within assets, with the corresponding debt included under borrowings and debt within liabilities. Lease payments are cancelled, and the finance expense recognized, along with the fair value of the leased assets, in accordance with the Group’s accounting policies. Lease contracts are qualified as finance leases.
2.8 Leases under IFRS 16
The Group recognizes a rental contract as soon as it obtains almost all of the economic advantages linked to the use of an identified asset and that it has a right to control that asset. The Group’s rental contracts mainly relate to real estate assets, mainly office premises.Leases are recognized in the balance sheet at the beginning of the contract, for the present value of future payments. This is reflected in the observation: • a non-current asset “Right of use relating to rental contracts” and, • a rental debt in respect of the payment obligation.Lease contracts correspond to assets of low unit value or of a duration less than or equal to 12 months, are recognized as expenses.
Right of useWhen the property is made available, the right of use evaluated includes: the initial amount of the debt to which are added, if applicable, the initial direct costs, the estimated costs of restoring the asset as well as the advance payments made to the lessor, net if applicable, of the benefits received from the lessor.The right of use is amortized over the duration of the contract, which generally corresponds to the firm duration of the contract, taking into account the optional periods which are reasonably certain to be exercised. Depreciation charges for usage rights are recognized in current operating income.The recoverability of the right of use is tested as soon as events or changes in the market environment indicate a risk of loss of value of the asset. The provisions for implementing the impairment test are identical to those relating to tangible and intangible assets as described in note 2.7.4.
2.9 Financial assets
Financial assets are recognized in accordance with IFRS 9 and may be classified in one of the two categories described below.
2.9.1 Financial assets measured at amortized costs
Purchased portfolios include loans and receivables with similar characteristics. Each portfolio is treated as a homogenous asset class within the financial assets measured at amortized cost category defined by IFRS 9 and is considered as a single group in terms of measurement and revenue recognition.
In accordance with IFRS 9, portfolios are measured at cost on initial recognition. They are subsequently measured at amortized cost using the effective interest method.
The effective interest rate is the rate that exactly discounts the future cash flows expected to result from managing the portfolio to the carrying amount of the portfolio.Based on its knowledge of the portfolios, management makes estimates regarding the future cash flows expected to result from managing the portfolio.
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ANNUAL REPORT 2019
These estimates cover a five to fifteen year rolling period. In the event the future cash flow estimates are revised, the value of the portfolios included in assets is increased or decreased after applying the historical effective interest rate to the revised future cash flows, with an offsetting entry posted to income.
2.9.2 Other financial assets
Other financial assets are measured as described above, depending on the category to which they belong.Financial assets are measured using one of the levels of the fair value hierarchy for financial assets and liabilities set out in IFRS 7: • Level 1: prices quoted on an active market for similar instruments • Level 2: valuation techniques based on observable market inputs • Level 3: valuation techniques based on non-observable inputs
2.9.3 Impairment
The Group recognizes an impairment of financial assets based on expected losses.At each balance sheet date, the amount of the provision is re-measured to reflect the change in the credit risk of the financial instrument since its initial recognition.
In order to assess the evolution of credit risk, the Group compares the risk of default on the financial instrument at the balance sheet date with the risk of default on the financial instrument at the date of initial recognition, taking into account reasonable and justifiable information that can be obtained.
This impairment loss represents the difference between the carrying amount of the asset and its recoverable amount and may be reversed if at some point in the future the recoverable amount once again exceeds the carrying amount.
2.10 Deferred taxes
Deferred taxes are recognized on all temporary differences between the carrying amount of assets and liabilities and their value for tax purposes, with the exception of non-deductible goodwill and other exceptions provided for in IAS 12.
Deferred tax assets are recognized if it is probable that taxable profit will be available against which they can be utilized in future reporting periods.
Deferred taxes are measured at the tax rate expected to apply to the period when the temporary difference will reverse, based on tax rates or tax laws that have been enacted or substantively enacted at the end of the reporting period. The liability method is used and the impact of any change in tax rates is recognized in income, except for changes arising from items recognized directly in equity. Deferred tax assets and liabilities are offset if entities have a legal right of offset and the deferred tax amounts are levied by the same taxation authority. Deferred taxes are not discounted.
2.11 Trade and other receivables
Trade receivables are recognized at fair value and then reassessed at amortized cost through the effective interest rate method, after deduction of the depreciation provisions.
The Group uses the simplified method and recognizes expected credit losses over future trade receivables’ lifetime. Expected credit losses are measured by considering a range of factors specific to customers and other debtors and using current general economic conditions and economic conditions forecasts that are available at closing date without supporting undue cost and effort.
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2.12 Cash and cash equivalents
Cash and cash equivalents include cash, current accounts at banks, very short-term marketable securities readily convertible into cash and subject to an insignificant risk of changes in value. Since cash investments maturing in less than three months are subject to an insignificant risk of changes in value, they are carried at cost (including accrued interest), which approximates their fair value. Bank overdrafts, if any, are included in current liabilities.
2.13 Convertible bonds
A convertible bond is a financial instrument defined as a «compound financial instrument» with a liability and an equity component, which are each recognized and measured separately. In accordance with IAS 32 – “Financial Instruments: Presentation”, the equity component corresponds to the difference between the nominal amount of the issue and the liability component. The liability component is calculated as the fair value of the liability with no conversion option and with identical characteristics. The amount recognized in equity corresponding to the conversion option is not revalued over the life of the bond. The liability component is measured at amortized cost over its estimated useful life based on the calculation of an effective interest rate.
2.14 Financial liabilities
Borrowings are initially carried at fair value net of transaction costs. They are subsequently carried at amortized cost. Any difference between income (net of transaction costs) and the repayment value is taken to income over the life of the debt using the effective interest method.
Borrowings are classified within current liabilities except when the Group has an unconditional right to defer settlement for at least 12 months after the reporting date, in which case they are classified within non-current liabilities.
2.15 Post-employment benefits
Obligations for the payment of post-employment benefits and other long-term employee benefits are measured by the projected unit credit method and recognized in accordance with IAS 19R. The recognized obligation takes into account the fair value of plan assets at the reporting date. Actuarial gains and losses on post-employment benefit obligations are recognized in other comprehensive income and may not be subsequently reclassified to profit or loss.Actuarial gains and losses on other long-term employee benefits and length-of-service awards payable to employees on retirement are recognized in the income statement in the period in which they arise.Gains and losses arising from plan amendments are recognized in the income statement under «Other operating income» or «Other operating expense».
Employee benefit expense is divided into two categories as follows: • the increase in the provision due to the passage of time, net of the return on plan assets, is recognized
as a financial expense. The expected return on plan assets is measured using an interest rate that is the same as the discount rate used for calculating the provision;
• the expense corresponding to service cost is recognized in personnel expenses.
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ANNUAL REPORT 2019
9292
2.16 Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, when it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the reporting date, using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest expense.
PERFORMANCE
Notes to the consolidated income statement
03. Revenue
(in € thousands) December 31, 2019 December 31, 2018
Revenue debt purchasing 76,468 63,546
Revenue debt servicing 101,971 34,088
Other revenue 4,317 996
TOTAL 182,756 98,630
Other revenue relates to other activities run by the iQera, particularly IT services.In the year ended December, 31 2019: • Serfin contributed €13.5 million to the Group’s revenue, of which €0.5 million related to loan activities
and €12.7 million related to service activities; • Sistemia, acquired in July 2019, contributed €16.3 million to the servicing revenues; • iQera contributed €12.2 million to loan income, €70.4 million to service income and other income
for the total amount. In 2018, while it had been acquired in August of the same year, it contributed €3.8 million to loan income, €15.3 million to service income and other income for the total amount.
04. Professional fees and services
As at December 31, 2019, professional fees and services amount €28.5 million. They mainly comprise legal expenses relating to the portfolio acquisition and management business and, postage and routing costs.
05. Personnel expenses
(in € thousands) December 31, 2019 December 31, 2018
Salaries and wages (42,379) (19,292)
Payroll taxes (21,661) (11,803)
Employee profit-sharing (1,597) (1,275)
TOTAL (65,637) (32,369)
The change in personnel expenses is mainly due to the full-year effect of iQera (in 2019, the impact of iQera of theses expenses amounted to €32.6 million compared to €8.5 million in 2018).
Total employees on December 31, 2019 December 31, 2019 December 31, 2018
MCS Group 399 368
iQera 1,104 998
Italy 677 -
TOTAL 2,180 1,366
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ANNUAL REPORT 2019
9494
06. Other operating income and expenses
(in € thousands) December 31, 2019 December 31, 2018
Gains or losses on sales of fixed assets - 6
Tax risk provision (653) (6,292)
Amortization of tangible assets (10,724) (3,169)
Reversal of irrelevant provisions 414 213
Acquisition-related expenses (1,545) (3,084)
Miscellaneous (1,345) (149)
TOTAL (13,853) (12,475)
07. Net financial income / loss
(in € thousands) December 31, 2019 December 31, 2018
Interest and similar expenses (25,244) (17,187)
Income from loans and investments 312 165
Cost of net debt (24,932) (17,022)
Exchange gains and losses (39) (30)
Financial income / (expenses) - co-investors (134) (557)
Interest on lease debt (607) -
Financial expenses on post-employment benefit (60) (26)
Other financial income items (840) (613)
NET FINANCIAL INCOME/LOSS (25 772) (17 635)
08. Income tax expense
(in € thousands) December 31, 2019 December 31, 2018
Current taxes (2,898) (1,433)
Deferred taxes 458 (2,318)
TOTAL (2,440) (3,751)
(in € thousands) December 31, 2019 December 31, 2018
Consolidated income before tax 9,479 7,919
French tax rate 33% 33%
Theorical tax at the above rate (3,160) (2,640)
DIFFERENCES TO BE ANALYSED 719 (1 112)
Permanent differences between consolidated income and taxable income (844) (1,903)
Utilisation of tax losses forward not previously recognized - 191
Effect of unrelieved tax losses - (1,102)
Other (77) 68
Rate change 1,640 1,634
DIFFERENCE ANALYSED 719 (1,112)
PERFORMANCE
Notes to the consolidated statement of financial position
09. Intangible assets
9.1 Goodwill
(in € thousands) Gross value Net value
JANUARY, 1 2018
Acquisitions 340,506 340,506
DECEMBER 31, 2018 340,506 340,506
Acquisitions (1) 58,794 58,794
Other (2) (10,794) (10,794)
DECEMBER 31, 2019 388,506 388,506
(1) New goodwill related to Serfin and Sistemia acquisition respectively amount to €4.5 million and €54.3 million (see note 1.2.1)(2) Change in iQera goodwill comes from:
- the buyout of shares held by employees for €0.8 million; - the recognition of intangible assets such as client relationship as part of the purchase price for €15.8 million (see note 9.2) and €4.2 million for deferred tax liabilities.
In view of the Group’s business activity, the group has identified two cash-generating units (CGU): MCS (purchasing) and iQera (servicing). The goodwill allocated to MCS CGU amounts €230.1 million and the goodwill allocated to iQera CGU amounts to €169.2 million, as at 31 December 2019.
Impairment testAn impairment test was carried out as at 31 December 2019 the global level.The Group estimated the market value of the company by applying industry multiples used for comparable companies. The industry multiples were taken from market data compiled by leading banks.The Company performed a multi-criteria valuation based on EBITDA (adjusted for the co investors’ share) for 2019 as well as estimated future cash inflows (attributable to the Group) from existing portfolios as at 31 December 2019.Estimated future cash inflows were based on a model combining internal estimates (from 12 to 24 months) and statistical extrapolations (for the remaining period).No goodwill impairment came to light as a result of these tests and the amount of goodwill in the statement of financial position as at 31 December 2019.A decrease of 10% in the multiples used would not result in any goodwill impairment.
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ANNUAL REPORT 2019
9.2 Other intangible assets
(in € thousands) Software Others Total
JANUARY 1, 2018 3,483 129 3,612
Acquisitions 42 1,294 1,336
Changes in consolidation scope 827 4,756 5,583
Amortization (1,561) (285) (1,846)
Reclassification - (4) (4)
DECEMBER 31, 2018 2,791 5,890 8,681
Acquisitions 82 3,792 3,874
Disposals (2) - (2)
Changes in consolidation scope - 20,845 20,845
Amortization (1,794) (5,552) (7,346)
Release - 9 9
Reclassification 2,793 (2,547) 246
Foreign exchange effects 3 - 3
DECEMBER 31, 2019 3,874 22,437 26,311
As part of the growth operations carried out during the 2018 and 2019 fiscal years, the allocation of the acquisition lead to recognize, respectively for iQera and Serfin, a customer portfolio of €15.8 million and €4.6 million in gross value.
10. Property, plant and equipment
(in € thousands) Plant Computer equipment Other Total
JANUARY 1, 2018 19 128 2,564 2,710
Acquistions 100 147 364 610
Disposals - - (267) (267)
Changes in consolidation scope 921 1,155 2,283 4,359
Amortization (64) (182) (635) (880)
Reclassification - - 2 2
Foreign exchange effects 12 6 - 19
DECEMBER 31, 2018 988 1,254 4,311 6,553 ,
Transfer related to IFRS 16(1) - (68) (116) (184)
JANUARY 1, 2019 988 1,186 4,195 6,369
Acquistions 528 781 1,051 2,360
Disposals - (7) 47 40
Changes in consolidation scope(1) 171 182 - 353
Amortization (380) (637) (1,469) (2,486)
Reclassification 21 (21) (246) (246)
Foreign exchange effects (32) (5) 1 (36) ,
DECEMBER 31, 2019 1,295 1,479 3,579 6,353
(1) Reclassification of fixed assets held under finance lease as of December 31, 2018 within the “Rights of use” (see note 11) within the framework of the first application of IFRS 16.
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PERFORMANCE
11. Right of use and lease debt
The rights to use tangible goods as defined in note 2.2 have the following net values :
(in € thousands)Land and buildings
Computer equipment
Other Total
DECEMBER 31, 2018 - - - -
Transfert related to IFRS 16 (1) - 68 116 184
IFRS 16 initial application as of 01/01/2019 15,545 - 15,545
Amortization (2,902) (36) (49) (2,987)
Changes in consolidation scope 996 - - 996
Foreign exchange effects (49) - - (49) ,
DECEMBER 31, 2019 13,590 32 67 13,689
1) Reclassification of fixed assets held under finance lease as of December 31, 2018 within the “Rights of use” (see note 10) within the framework of the first application of IFRS 16.
Lease debt variation can be analyzed as follow:
Cash impact
(in € thousands) December 31, 2018 Increase Decrease
Lease debt - - (2,824)
Net lease debt - - (2,824)
Without cash impact
IFRS 16 First application
Transfer related to IFRS 16
Interest Change effect
Scope variation
December 31, 2019
15 331 191 139 (11) 996 13 821
15 331 191 139 (11) 996 13 821
As of December 31, 2019, the maturities of the lease debt are analyzed as follow:
(in € thousands) December 31, 2019 December 31, 2018
Under 1 year 2,570 -
1 to 5 years 9,892 -
Over 5 years 1,360 -
TOTAL 13,821 -
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ANNUAL REPORT 2019
12. Loan portfolio
(in € thousands) 2019 2018
JANUARY, 1 217,556 176,962
Acquisitions (1) 196,972 22,210
Disposals (494) (141)
Changes in scope 1,555 54,676
Amortization (79,175) (42,958)
Revaluation 3,711 6,807
DECEMBER 31 340,125 217,556
Current assets 94,398 89,132
Non-current assets 245,727 128,424
Current assets are calculated by discounting the cash inflows expected to arise from the assets within 12 months of the end of the reporting period. Any other amounts are classified as non-current items. The significant increase in the value of the portfolio between 2018 and 2019 comes essentially from the acquisition of the securitization funds Cedrus and Quercius’s portfolios for €112.8 million. The co-investors’ share of those portfolios at the acquisition date is €43.9 million (see note 18).
13. Other receivables
(in € thousands) December 31, 2019 December 31, 2018
Other taxes 8,621 6,236
Prepaid expenses 1,753 1,595
Other receivables 58,080 20,460
TOTAL 68,453 28,291
14. Equity
Louvre Bidco’s share capital is broken down as 2,208,329,852 shares with a par value of €0.10, carrying 2,208,329,852 attached voting rights.
Total AO ADP A ADP B
Number of shares on 31/12/2018 2,208,329,852 365,038,487 1,822,229,670 21,061,695
Movements of the period - - - -
Number of shares on 31/12/2019 2,208,329,852 365,038,487 1,822,229,670 21,061,695
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PERFORMANCE
Simplified summary of the main rights, preference and restrictions attached to the shares:
Per shareClass A preferred shares
(“ADPA”)Class B preferred shares
(“ADPB”)Ordinary shares
(“AO”)
Nominal value €0.10 €0.10 €0.10
Voting rights 1 1 1
Voting rights
Right to a priority cumula-tive dividend of 8% per year (on a 365 day-basis) of the nominal value of an ADPA, to be capitalized if not paid, and to be paid in priority over any dividend. ADPA do not give right to any dividend payment (or other distributions) beyond their right to the priority cumulative dividend.
Right to a specific dividend triggered by specific events (e.g.: change of control or IPO of the Company), the amount of which depends on financial indicators, and to be paid only when the dividend attached to ADPA has been fully paid (but in priority over any other dividend).ADPB do not give right to any dividend payment (or other distributions) beyond their right to the specific dividend.
Right to dividend pro-rata to its proportion of the share capital, and only if priority cumulative dividend and specific dividend attached to ADPA and ADPB respec-tively have been fully paid.
The terms and conditions of each class of shares issued by the Company are set forth in the Company’s bylaws.
15. Provisions for post employment benefit
Changes in the net defined benefit obligation recognized in the statement of financial position are as follows:
(in € thousands) 2019 2018
JANUARY, 1 567 -
Net expense recognized in the income statement 933 260
Benefits paid during the period (202) -
Actuarial (gains) / losses 85 (217)
Changes in consolidation scope 1,425 575
Translation adjustments on foreign plans (13) 1
Other - (52)
DECEMBER 31 2 795 567
Projected benefit obligation(in € thousands) 2019 2018
JANUARY, 1 3,448 -
Service cost 815 194
Interest cost 60 30
Benefits paid during the period (141) -
Actuarial (gains) / losses 192 (217)
Changes in consolidation scope 1,423 1,974
Translation adjustments on foreign plans (13) 1
Other - 1,466
PROJECTED BENEFIT OBLIGATION DECEMBER 31 5 784 3 448
Funded plans 3,538 2,961
Unfunded plans 2,246 487
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ANNUAL REPORT 2019
Fair value of plan assets(in € thousands) 2019 2018
JANUARY, 1 2,882 -
Changes in consolidation scope - 1,399
Actuarial (gains) / losses 107 -
Expected return on plan assets - (35)
Other - 1,518
FAIR VALUE OF PLAN ASSETS DECEMBER 31 2,989 2,882
Fair value of plan assets(in € thousands) December 31, 2019 December 31, 2018
Service cost 815 159
Interest cost 60 30
NET EXPENSE RECOGNIZED IN THE INCOME STATEMENT 875 189
Analysis of the expense recognized in the income statementThe main inputs used to calculate retirement benefits are described below: • Retirement age: 63-67 • Assumed retirement at the employer’s initiative • Mortality rate (INSEE TH 12-16 and TF 12-16 mortality tables) • Revaluation rate: 2% • Discount rate: 0.77%A 25 bp increase or decrease in the discount rate would have an impact of €165 thousands on the defined benefit obligation.
The expected cash outflows are the followings: • €44 thousand in the year ending 31 December 2020; • €51 thousand in the year ending 31 December 2021; • €29 thousand in the year ending 31 December 2022; • €50 thousand in the year ending 31 December 2023; • €59 thousand in the year ending 31 December 2024.
16. Provisions for other liabilities
(in € thousands)Provisions for
other non current liabilities
Provisions for other current liabilities
Total
JANUARY 1, 2018 156 - 156
Additions 225 6,270 6,495
Reversals (101) (71) (172)
Changes in scope of consolidation 164 - 164
December 31, 2018 444 6,199 6,643
Additions 34 1,412 1,446
Reversals (264) (74) (338)
DECEMBER 31, 2019 214 7,537 7,751
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17. Borrowings and financial liabilities
Net debt
Cash effect Non cash effect
(in € thousands)
Dec. 31, 2018
Increase Decrease Transfer related to
IFRS 16
Changes in scope
of conso-lidation
Effective interest
rate
Others Dec. 31, 2019
Bonds 23,300 - - - - - 570 23,870
Financial liabilities toward credit institutions
378,155 53,947 - - - 1,729 (600) 433,231
Financial lease liabilities
191 - - (191) - - - -
Other borrowings 4,700 42,094 (6,456) - 1,278 - 41,616
Accrued interests 4,869 - (21,233) - - - 23,165 6,801
Total borrowing 411,215 96,041 (27,689) (191) 1,278 1,729 23,135 505,518
Term deposits 20,165 - (20,025) - - - - 140
Cash at bank 83,860 - (43,302) - 10,044 - - 50,602Cash and cash equivalents
104,025 - (63,327) - 10,044 - - 50,742
,
NET DEBT 307,190 96,041 35,638 (191) (8,766) 1,729 23,135 454,776
As of December, 31 2019, the cash and cash equivalents comprise restricted cash for €8.2 million versus €11.6 million as of December, 31 2018 (cash received on behalf of customers and to be repaid within the next three months in the course of the debt servicing activity).
BondsOn October 18, 2017, Louvre Bidco carried out a bond issue for a notional amount of €17,000,000, composed of 17,000,000 bonds with a par value of €1. The bonds have a term of fifteen years and mature in 2032. The principal amount of any bonds shall bear 8% interest, capitalized during the period concerned, and will be repaid to the bondholder in cash at the conversion date, early redemption date or maturity date, as appropriate. The reimbursement of the bond from Cerberus (ex-shareholder) amount to €29.9m.
On October 4, 2018, the holding Louvre Bidco carried out two bonds issued for a notional amount of €3 million and €3.9 million, composed of 2,987,301 and 3,862,620 bonds with a par value of €1. The bonds have a term of fifteen years and mature in 2033. The principal amount of the bonds shall bear 8% interest, capitalized during the period concerned, and will be repaid to the bondholder in cash at the conversion date, early redemption date or maturity date, as appropriate.
High Yield BondIn 2017, Louvre Bidco issued high-yield bonds for a notional amount of €270 million. The bonds bear interest at an annual fixed rate equal to 4.25% per annum, with maturity 2024, reimbursable in fine. In 2018, the Group issued high-yield bonds for a principal amount of €120 million and with an annual floating rate equal to Euribor 3 months plus 5.375% per annum, with maturity 2024, reimbursable in fine. During the second semester of 2019, the Group issued a new high-yield bonds for a principal amount of €55 million and with an annual floating rate equal to Euribor 3 months plus 5.375% per annum, with maturity 2026, reimbursable in fine.
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ANNUAL REPORT 2019
Other loansBPI loanTo finance its investments, IQera put in place from BPI 3 credit facilities for €4.9 million: • BPI 1: €1.5 million, repayable over 7 years (with 2 years threshold) and rate 1.59% plus TME; • BPI 2: €1.5 million, repayable over 7 years (with 2 years threshold) and rate 1.79% plus TME; • BPI 3: €2.0 million, repayable over 7 years (with 2 years threshold) and 2.3% more or less TME variation.
Vendor loanAs part of new portfolios’ acquisition, the group took out a new vendor loan of €8.7 million whose repayment depends on portfolio’s cash collection.
Crédit AgricoleFinancing was provided by Crédit Agricole for €25 million, repayable based on receipts over 5 years at a rate of 2%.
Due dateThe maturities of medium and long-term borrowings and debt are as follows:
(in € thousands) December 31, 2019 December 31, 2018
Under 1 year 9,087 4,848
1 to 5 years 39,330 212
Over 5 years 457,101 406,155
TOTAL 505,518 411,215
18. Co-investors liabilities
(in € thousands) 2019 2018
JANUARY, 1 2,526 3,209
Increase 43,915 -
Repayement (6,354) (572)
Revaluation (1,373) (112)
Autres - 1
DECEMBER 31 38,714 2,526
Current liabilties 5,952 1,192
Non-current liabilities 32,762 1,334
As of 31 December 2019, the debt amounted €38.714k, including €5.952k within one year, against 2.526k, of which €1.192k within one year.During the year 2019, the Group invested in two new funds Quercius and Cedrus. The portion of Cedrus’s portfolio which is attributable to co-investors amounts €43.9 million (see note 12).
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PERFORMANCE
103
19. Deferred tax
December 31, 2019 December 31, 2018
(in € thousands)
Tax losses carryforward
and tax credits
Temporary differences
Total Tax losses carryforward
and tax credits
Temporary differences
Total
Recoverable within 12 months - 633 633 310 485 795
Recoverable beyond 12 months 3,059 6,856 9,914 2,783 5,408 8,191
Deferred tax assets 3,059 7,489 10,547 3,093 5,893 8,986
To be settled within 12 months - - - - - -
To be settled beyond 12 months
- (36,681) (36,681) - (26,546) (26,546)
Deferred tax liabilities - (36,681) (36,681) - (26,546) (26,546)
Total before compensation 3,059 (29,192) (26,134) 3,093 (20,653) (17,560)
Deferred tax assets after compensation - - 523 - - 694
Deferred tax liabilities after compensation
- - (26,658) - - (18,254)
As at 31 December 2019, losses carry forward amount to €10.8 million. The assessment of the ability to recover net deferred tax assets for €3.059k is based on a tax planning over five years, taking account the enacted rate for each recovering period.
20. Other operating liabilities
(in € thousands) December 31, 2019 December 31, 2018
Trade Payables 16,845 9,308
Amounts payable on fixed assets 6,541 6,295
Trade payables and other account payables 23,386 15,603
Personnel liabilities 13,343 11,809
Corporate income tax 131 1,807
Other taxes 9,010 5,459
Other liabilities (1) 13,108 14,331
Other current liabilities 35,592 33,406
TOTAL CURRENT LIABILITIES 58,979 49,009
(1) Including cash collected on behalf trade receivables for €8.2 million in 2019 and €11.6 million for 2018. The counterpart is booked in cash and cash equivalents (see note 17).
ANNUAL REPORT 2019
Additional disclosures21. Risk management
The Group is exposed to certain risks in the ordinary course of its operations.These include: • Strategic risks (including reputation risks) • Operational risks • Financial risks • Investment risks
Strategic risksThe Group’s growth strategy is based on its acquisition and management of bank receivables portfolios. Changes in economic conditions can impact its ability to recover the receivables or the volume of receivables to acquire. The Group is exposed to economic conditions in France, since its investments are made in that country.The Group is also exposed to the reputation risk of the debt recovery industry. Poor debt collection practices can impact the Group’s ability to acquire portfolios or debtors’ incentive to pay down their debts.To mitigate these risks, management ensures that receivables portfolios are purchased at a fair price and looks to maintain and develop good relations with the Group’s clients.The Group constantly strives to improve its ethical conduct and management practices and has put in place quality procedures that go far beyond already strict regulatory requirements in a bid to better protect the image and reputation of its partners
Operational risksIn the course of its business, the Group is exposed to operational risks such as regulatory risks (non-compliance risks), legal risks (in the event of no valid collateral or guarantees for purchased portfolios), and IT risks (system failure, data loss, etc.).To mitigate these risks, the Group has set up an internal control system ensuring the monitoring of both servicing and acquisition processing activities through level 1, 2 and 3 controls with the creation of an internal audit unit in 2019. It ensures that it keeps abreast of regulatory developments on an ongoing basis, offers ongoing training to its employees, and carries out acquisition audits on portfolios acquired to assess the quality of the documentation. It also makes regular back-ups of its IT systems and has a detailed contingency plan.
Financial risksThe Group has no foreign exchange risk exposure since its business is primarily in euros.Liquidity risk is managed by reasonable use of borrowing and the maturity of the Group’s borrowings and debt is aligned with the maturity of its assets.The Group has no interest rate risk exposure on its bank borrowings and debt since they are at floating rates.
Investment risksErrors in the statistical models used to price portfolios could lead to erroneous acquisition bids.Strict checks are carried out before any change in assumptions likely to impact valuation models and acquisition bids are reviewed by investment committees along with senior management.
22. Off-balance-sheet commitments
22.1 Other commitments
LOUVRE BIDCO:In October 2017, the Company issued High Yield Notes (High Yield) for a total amount of €270 million as part of a placement on the international markets to refinance previous debt. An additional issue was made by Louvre BIDCO on October 4,2018 to finance the acquisition of iQera, bringing the debt under the High Yield Bond issue to €390 million.
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An additional issue was carried out in 2019 to finance the acquisition of Sistemia group, bringing the debt to €445 million.
The Company guaranteed the obligations undertaken within the scope of the €40m revolving credit entered into by MCS on October 18th, 2017, up to €50 million on October 2018.To guarantee these obligations, the company pledged the following to the collateral agent, represented by the security agent, US BANK Trustee Limited: • the securities account opened in the books of Promontoria MCS Holding in the name of the Company, in
which all of the securities issued by Promontoria MCS Holding and held by the Company will be registered; • the bank balance of the Company’s bank accounts • intragroup receivables held by Louvre Bidco on all Group entities.
MCS ET ASSOCIES: The company guaranteed the obligations undertaken by Louvre BIDCO for Yield Bond debt amounted to €270m. On the same date, it entered into a revolving credit agreement for a maximum amount of €40m, up to €50 million on October 2018, with banks represented by JP Morgan Europe Limited as agent and US BANK Trustee Limited as collateral agent.
To guarantee the above obligations, the Company pledged the following items to the lenders represented by the collateral agent: • all bank accounts opened in its name in various banks except for trust accounts; • intragroup receivables held by the Company on all Group entities; • all securities issued by the securitization funds Hugo Créances 1, 2, 3 and 4, Victor and Mabimmo.MCS & Associés asked MyPARTNERBANK bank to provide a financial guarantee to FIGEC (professional association of debt recovery companies) for a maximum of €170,000 and to Crédit Agricole Consumer Finance for €15,000.
The Company is the «lessee» in a lease signed with Postimmo on November 2, 2015 for its head office. Under this lease, the Company has waived its triennial right to termination; accordingly, it is committed to the lease until November 2021.
IQeraGiven financial commitmentsDSO Group, now known as iQera, has guaranteed the commitments of MCS et Associés under the Revolving Facility and has pledged the following as collateral in favor of the lenders represented by the collateral agent : • all the bank accounts opened in its name in various establishments with the exception of trust accounts; • the securities account it holds in the registers of MCS et Associés
iQera has agreed to act as a joint guarantor with respect to Heuler Hermes company, in order to allow the company EFFICO to benefit from a GAPD (“Garantie Autonome à Première Demande”) of €3,000 K under the contract signed with ENGIE customer.iQera has agreed to act as a joint guarantor with respect to AXA Co, in order to allow the company PRESTALLIANCE to benefit from a financial guarantee of 150 K € for its debt collection activity.
Others given guarantees As part of its third-party receivables collection activities, the Company maintained, during the year, joint guarantees and GAPD for the benefit of several prime contractors. As at December 31, 2018, the total of these joint guarantees and GAPD amounts to € 1,800K.
Company concerned
Customer Issuing organization
Amount (€) Duration
iQera
GAPD Orange Coface 450,000 31/02/2020
GAPD Bouygues Télécom Coface 500,000 31/12/2020
GAPD Axa Coface 700,000 31/12/2020
Financial guarantee Tout DO Société Générale 150,000 undeterminated
The GAPD in favour of Orange has been renewed on 1 June 2019 for an amount of € 450K considering the increase in flows (in connection with the activity of EFFICO)
EFFICO Guarantees receivedBNPP PERSONAL FINANCE provides a guarantee up to € 1.4 million to cover the funds held by EFFICO on behalf of its clients. HEULER HERMES provides also a guarantee up to € 3 million to cover the funds held by EFFICO on behalf of Engie client.
Financial guarantee receivedA financial guarantee of € 150K with Axa for the benefit of the main customers related to its debt collection activity.
23. Related parties’ transaction
All transactions with related parties are carried out on an arm’s length basis.Accordingly, and in compliance with regulations, no other disclosures are provided in the notes.
24. Independent auditors’ fees
As at December 31, 2019, the fees of the statutory auditors mainly included € 388,000 in certification missions for the consolidated accounts with the following breakdown: • PricewaterhouseCoopers audit for 267k • AMAC for 121k
25. Subsequent events
Health situation relating to Covid-19:The entity’s financial statements have been prepared on a going concern basis. Activities began to be affected by Covid-19 in the first quarter of 2020 and the Group expects to have a negative impact on its financial statements in 2020. The company, given the recent nature of the epidemic and the measures announced by the government to help companies, is not able to assess the possible quantified impact. On the date of the accounts approved by the board of directors, the management of the Group is not aware of any significant uncertainties which call into question the ability of the Group to continue operating.
26. Consolidation scope
Fully consolidated companies
DSO DeveloppementLouvre Bidco 0Entities from the GroupPromontoria MCS Holding 100.00%MCS 100.00%Pointcare Real Estate 100.00%MMCS 100.00%Locaumat 100.00%Ressource 88.00%MC2S 100.00%FCT Hugo 1 100.00%FCT Hugo 2 100.00%FCT Hugo 3 100.00%FCT Hugo 4 100.00%
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FCT Cedrus 100.00%FCT Quercius 100.00%iQera 100.00%DSO Group 100.00%Mazal 100.00%DSO Indian Ocean 100.00%DSO Americas 100.00%Effico 75.50%DSO Italie 80.00%Serfin 80.00%DSO Developpement 100.00%DSO Italie II 74.98%Sistemia 74.98%
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Forward-looking statements give our current
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Louvre Bidco 256 bis, rue des Pyrénées
75020 Paris
Publication Director: Valcor, represented by Jean-François Bensahel • Editorial design and writing: CICOMMUNICATION• Design: Sophie Carton CsDesign • Photo credits: Unsplash, DR, MB Seillant, Eric Lee & i-stock photos
