News

GFKL Lowell

Lowell GFKL Group, a European leader in credit receivables management businesses, today announces strong growth for the period ended 31 December 2015. The first annual results since the combination of Lowell and GFKL demonstrate the successful first phase integration of the two businesses with sustained growth, high returns and visible earnings. The Group also announces the acquisition of IS Inkasso Service, the Austrian market leader in third party collections.

Financial Highlights
• Strong year-on-year growth reported across key income and balance sheet metrics
• Group year-on-year Cash Income growth of 13% and Cash EBITDA growth of 18% to £212m, largely driven by higher Non Performing Loans (NPL) cash collections
• £250m invested in NPLs across multiple sectors; up 43% year-on-year
• Investment diversification continues with 295 NPL Portfolios acquired with a face value of £2.8bn
• FY16 acquisition profile supported by 37 Forward Flow agreements – up 28% year-on-year
• High Estimated Remaining Collection (ERC) accuracy with the Group achieving 100.2% of the collections forecast for the period.
• 120m ERC growth of 24% to £1.4bn

Operational Highlights
• Successful first phase integration of two of the leading players in the largest European credit markets
• James Cornell appointed sole Group CEO; Kamyar Niroumand appointed Chairman of the Supervisory Board of GFKL and Senior Advisor to the Group Board
• GFKL minority shareholder squeeze out successfully completed
• Lowell retained and improved its ‘Exceptional’ rating from Investor in Customers
• Lowell Solicitors Limited went live in H2-15 and is outperforming initial expectations

Commenting on the results, Colin Storrar, CFO, said:

“We are pleased to present such a strong set of financial results for 2015; the first annual results since the successful combination of two of Europe’s leading credit receivables management businesses. The integration of Lowell Group and GFKL offers clients the most comprehensive debt management and data analytics service in Europe and, with the support of our partners Permira Funds and Ontario Teachers’ Pension Plan, we look forward to driving the business forward together.”

Acquisition of IS Inkasso Service
Lowell GFKL Group has entered into agreement to acquire IS Group Management GmbH, trading as IS Inkasso Service. Closing is expected at the end of May subject to anti-trust approvals. IS Inkasso Service is the Austrian market leader in third party collections (3PC) with a strong Swiss business.

It adds a third, highly attractive market position to the Lowell GFKL Group which is an important step towards becoming a pan-European leader in credit receivables management. It also extends the diversification of business mix in the Group’s portfolio.

Context and Insights
The combination of Lowell and GFKL is progressing well with the successful completion of the first integration steps and the appointment of James Cornell as sole Group CEO. The appointment of Kamy Niroumand, CEO of GFKL for the last three and a half years, to the Supervisory Board of GFKL and as Senior Advisor to the Group Board ensures the continuity of key client relationships and access to his extensive experience and expertise.

With the visibility of forward flow agreements, together with the Group’s diversified origination capabilities across different sectors and across the two largest consumer credit markets in Europe, the pipeline for future portfolio acquisitions is encouraging.

Compliance with the evolving regulatory environment and focus on treating customers fairly to achieve the right customer outcomes, continues to be at the forefront of this business.

The focus on creating value remains paramount and the Group is dedicated to building long-term strategic relationships with clients by delivering the best product and service mix across the end to end credit management cycle. It is a source of pride that the Group’s long term commitment to building good relationships with customers has been recognised by the award, once again, of an ‘Exceptional’ rating from Investor in Customers, along with an improved performance on all measures.

The Group believes that sharing best practice is vital to customer experience and customer growth. The approach is to build a strong platform for Europe expansion whilst maintaining a disciplined approach to pricing and investment.

Outlook
Overall, the outlook for the Group remains positive and the Group is well placed to benefit from the structural drivers of growth in the UK, German and now Austrian consumer credit markets.

 

For further information, please contact:
In the UK:
Karen Leech
Telephone: + 44 (0) 113 2856595,  e-mail: MediaEnquiries@lowellgroup.co.uk
In Germany:
Michaela Heitkemper
Telephone: + 49 201 102-1198,  e-mail: pr@gfkl.com

Lowell GFKL Group:
The Lowell GFKL Group was created in October 2015 following the merger of German and UK market leaders GFKL and the Lowell Group. This union created one of the largest credit management companies in Europe. It benefits from the backing of global investment company Permira Funds and Ontario Teachers’ Pension Plan (OTPP). The Group’s experience, expertise and core strengths in data analytics and operational efficiency underpin its vision to be the most reputable and trusted partner in the European credit management sector. For more information on the Group, please visit our investor website: http://investors.garfunkelux.com. For information on the individual companies, please visit https://www.gfkl.com and http://www.lowellgroup.co.uk.

Non- IFRS financial measures
We have included certain non-IFRS financial measures in this annual report, including estimated remaining collections (“ERC”) and Cash EBITDA.

We present ERC because it represents our expected gross cash proceeds of the purchased debt portfolios recorded on our balance sheet (the “Purchased Assets”) over the 84-month, 120-month and 180-month periods. ERC is calculated as of a point in time assuming no additional purchases are made. ERC is a metric that is also often used by other companies in our industry. We present ERC because it represents our best estimate of the undiscounted cash value of our Purchased Assets at any point in time, which is an important supplemental measure for our board of directors and management to assess our performance, and underscores the cash generation capacity of the assets backing our business. In addition, the instruments governing our indebtedness use ERC to measure our compliance with certain covenants and, in certain circumstances, our ability to incur indebtedness. ERC is a projection, calculated by our proprietary analytical models, which utilize historical portfolio collection performance data and assumptions about future collection rates, and we cannot guarantee that we will achieve such collections. ERC, as computed by us, may not be comparable to similar metrics used by other companies in our industry.

We present Cash EBITDA because we believe it may enhance an investor’s understanding of our profitability and cash flow generation that could be used to service or pay down debt, pay income taxes, purchase new debt portfolios and for other uses, and because it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies generally. In addition to ERC, our board of directors and management also use Cash EBITDA to assess our performance. Cash EBITDA is not a measure calculated in accordance with IFRS and our use of the term Cash EBITDA may vary from others in our industry. For a reconciliation of Cash EBITDA to operating profit, see the “Reconciling the Statutory Accounts to this Presentation” section of this document.

ERC and Cash EBITDA and all the other non-IFRS measures presented have important limitations as analytical tools and you should not consider them in isolation or as substitutes for analysis of our results as reported under IFRS.

GFKL Lowell                            IS Inkasso Service

Press Release, April 28 2016

Lowell GFKL Group, a European leader in credit receivables management, today announces that it entered into an agreement to acquire IS Group Management GmbH (trading as IS Inkasso Service) from majority shareholder HANNOVER Finanz. Closing is expected at the end of May, subject to anti-trust approvals. IS Inkasso Service is the Austrian market leader in third party collections (3PC) with a strong Swiss business. 

The acquisition adds a third, highly attractive market position to the Lowell GFKL Group which is an important step towards becoming a pan-European leader in credit receivables management. It also extends the diversification of the regional and business mix in the Group’s portfolio as it increases the share of revenues from servicing.

The combination of Lowell GFKL and IS Inkasso Service concludes a long-standing relationship between the two businesses and allows the Group to serve its clients across the entire German speaking region, offering its combined portfolio of receivables and risk management services. The Lowell GFKL Group brings several highly complementary competences to IS Inkasso Service, including the ability to purchase debt portfolios using an industry leading pricing platform and to further improve collection success rates through data analytics.

The senior management team of IS Inkasso Service around Christian Kren, Wolfgang Affenzeller and Walter Niedermayr, will stay in place and is highly motivated to bring the benefits of becoming part of Lowell GFKL to its clients in the Austrian and Swiss markets.

Christian Kren, Managing Director of IS Inkasso Service, said:

“The combination of IS Inkasso Service and the Lowell GFKL Group is an important milestone in our relationship and the start of an exciting common future. The combination is a win-win, since it allows us to further enhance our customer service through offering debt purchase in Austria. We have the opportunity to benefit from Lowell GFKL’s industry leading expertise in this area.”

Kamyar Niroumand, Chairman of the GFKL Supervisory Board, stated:

“We are looking forward to joining forces with IS Inkasso Service to serve our customers across the entire GAS region. We know the IS Inkasso team well after working together for several years and we have built a great relationship. Today I am thrilled to welcome them to the GFKL Lowell family”

James Cornell, CEO of the Lowell GFKL Group, added:

“The combination enables us to further diversify the Group whilst moving into a very attractive growth market which we know very well already. The acquisition is highly strategic as it further develops our position as a pan-European player whilst yielding significant synergies.”

 

For further information, please contact:
In the UK:
Karen Leech
Telephone: + 44 (0) 113 2856595,  e-mail: MediaEnquiries@lowellgroup.co.uk
In Germany:
Michaela Heitkemper
Telephone: + 49 201 102-1198,  e-mail: pr@gfkl.com

About IS Inkasso Service:
Founded in 1975 and headquartered in Linz, Austria, IS Inkasso Service is the market leader in Austrian receivables management by number of managed cases. The business focuses on servicing non-performing receivables portfolios on behalf of its clients (third party collections) and has a long-standing relationship with several blue-chip customers across various verticals including telecommunications, media services, financial services and commerce. The business employs 66 FTE and serves an annual transaction volume of €50m.

About Lowell GFKL Group:
The Lowell GFKL Group was created in October 2015 following the merger of UK and German market leaders the Lowell Group and GFKL. This union created one of the largest credit management companies in Europe. It benefits from the backing of global investment company Permira Funds and Ontario Teachers’ Pension Plan (OTPP). The Group’s experience, expertise and core strengths in data analytics and operational efficiency underpin its vision to be the most reputable and trusted partner in the European credit management sector. For more information on the Group, please visit our investor website: http://investors.garfunkelux.com. For information on the individual companies, please visit https://www.gfkl.com and http://www.lowellgroup.co.uk.

GFKL Lowell

Press Release, April 19 2016

Key points:

Lowell and GFKL Group today announce the following changes:

  • James Cornell is appointed sole CEO of Lowell and GFKL Group
  • Kamyar Niroumand is appointed new Chairman of the Supervisory Board of GFKL and advisor to the Lowell and GFKL Group Board
  • Heinz Hilgert, Chairman of the Lowell and GFKL Group Board is joined by David Gagie, new Non-Executive Director
  • Adrian Hill steps down after two terms as Non-Executive Chairman of Lowell Group
  • Anke Blietz and Marc Schillinger are appointed Managing Directors of GFKL Financial Services GmbH

Further details:
With immediate effect, James Cornell will lead the Group Executive Board of Lowell and GFKL Group as sole CEO.  James is also appointed Managing Director of GFKL Financial Services GmbH.

Heinz Hilgert, Chairman of the Lowell and GFKL Group said:

“This new leadership structure is the logical next step after James Cornell and Kamyar Niroumand successfully delivered the first integration phase together as Co-CEOs. They have already positioned the new Group very well to capitalise on the strong growth opportunities in Europe by taking advantage of their complementary expertise and I look forward to supporting their continued contribution in their respective new roles”

Kamyar Niroumand, who has been leading the Executive Board jointly with James Cornell, will become the new Chairman of the Supervisory Board of GFKL. He has been asked by investors to act as Advisor to the Group Board in regard to the further development of customer relations in Germany and strategic investment decisions.

The Lowell and GFKL Group was formed by the acquisition of the two companies, which was completed in October 2015 and backed by the international private equity firm Permira Funds and by the Ontario Teachers’ Pension Plan (OTPP). This combination of Lowell and GFKL, both market leaders in the UK and Germany respectively, has created one of the largest credit management businesses in Europe with over 15 million customers.

James Cornell, who founded Lowell in 2004 said:

“I am excited about this next step and the opportunities ahead. I would like to thank Kamyar Niroumand for the great cooperation we have enjoyed in the past months and for the tremendous work he has done. I am very pleased that the Group, and I personally, can continue to build upon his great experience.”

Kamyar Niroumand added:
“The combination of GFKL’s strength in business process outsourcing and Lowell’s strength especially in debt purchase are key to the joint success of the merged company. I am looking forward to further accompanying this process in a leadership role.”

Kamyar Niroumand became CEO of GFKL in 2012. During his leadership, the business achieved a turnaround in performance and double digit growth. In particular, he placed great importance on further sharpening GFKL’s profile as a partner with both clients and customers, promoting the company’s values of Partnership, Openness and Responsibility.

James Cornell said: “These values will retain a central role in everything we do. Based on these values, we are not only able to help our clients to substantially reduce all the financial risks associated with outstanding claims but also help them to retain their reputation for great customer care – as the same three principles are equally valid for us in serving both stakeholder groups”.

The Group further announced today that Adrian Hill has stepped down as Non-Executive Chairman of Lowell Group. He has served two terms since his appointment in 2008 and made an important contribution to Lowell’s development.

David Gagie is appointed Non-Executive Director (NED) and joins the Investor Board of Lowell GFKL Group where Heinz Hilgert is Chair. David has been a Senior Advisor to the Financial Conduct Authority (FCA) and is currently a NED of Shawbrook Bank plc and Payzone Group. David will chair the Group Risk and Audit Committees.

On April 28th the GFKL Lowell Group will release its 2015 full year results and will comment upon the underlying performance of the business. The results will be published on the new investor site: investors.garfunkelux.com

 

Notes to Editors

 

James Cornell

James Cornell co-founded the Lowell Group in 2004 and served as its Group Chief Executive. James was instrumental in the strategy and development of the business which resulted in significant year on year profitable growth for the last 12 years, despite the macroeconomic environment within which it operated.  Previously James headed up a Commercial Finance and Risk team for a major UK Telecommunications supplier during the growth of the UK mobile industry and held senior roles within the Global Credit Bureau giant Equifax Plc.
In October 2015, following the acquisition of Lowell Group by Permira Funds and merger with GFKL, James was appointed Joint CEO of the GFKL Lowell Group.

Kamyar Niroumand

Kamyar Niroumand joined GFKL as Chair of the Management Board in October 2012 and since delivered a business turnaround and significant growth. Prior to this role, Kamy was Chair of the Management Board of Systems Software AG, and served as an executive Board member, responsible for Germany, Austria and Switzerland.  He was Managing Director of T-Systems International GmbH and held a number of senior positions at Debis Systemhaus Solutions for Healthcare GmbH including Managing Director and Director for Eastern Europe. Kamy started his career at Siemens-Nixdorf Computer AG.

In October 2015, GFKL’s investors Permira Funds merged the company with Lowell Group and Kamy was appointed Joint CEO of the GFKL Lowell Group.

Lowell GFKL

The Lowell GFKL Group was created in October 2015 following the merger of German and UK market leaders GFKL and the Lowell Group. This union created one of the largest credit management companies in Europe. It benefits from the backing of global investment company Permira Funds and Ontario Teachers’ Pension Plan (OTPP).

The Group’s experience, expertise and core strengths in data analytics and operational efficiency underpin its vision to be the most reputable and trusted partner in the European credit management sector.

For further information, please contact:
In the UK:      Karen Leech + 44 (0) 113 2856595 or MediaEnquiries@lowellgroup.co.uk
In Germany:  Michaela Heitkemper +49 201 102-1198 or pr@gfkl.com

Press Release, March 16 2016

Garfunkelux Holdco 2 S.A. releases unaudited update for its trading units – Lowell and GFKL

Garfunkelux Holdco 2 S.A., the direct parent company of Garfunkelux Holdco 3 S.A. and the indirect parent company of both Lowell and GFKL, today releases an unaudited update for its trading units, Lowell and GFKL, for the quarter ended 31 December 2015.

This update is subject to certain financial estimates ahead of the Garfunkelux Holdco 2 S.A. audited results for the full year, due to be announced in late April 2016.

Financial Highlights*

Lowell
• Cash EBITDA** up 24% to c. £41m (2014: £33m)
• 120 month Estimated Remaining Collections increased to £1,063m (2014: £809m)

GFKL
• Cash EBITDA** up 29% to c. €22m (2014: €17m)
• 120 month Estimated Remaining Collections increased to €399m (2014: €382m)

Commenting on this announcement, Colin Storrar, Group CFO said:

“I’m pleased to report another strong set of results for the quarter, demonstrating continued momentum for both trading units, year on year.”

“The integration of Lowell and GFKL continues to make good progress, and will enable the combined group, Garfunkelux Holdco. 2 S.A., to become one of the largest receivables management businesses in Europe***, with a market leading presence in the region’s two largest markets.”

“We continue to comply with regulatory requirements and in December 2015 Lowell formally submitted its applications to the Financial Conduct Authority for approval. Whilst no immediate decision is expected – given the volume of submissions – we do not anticipate there being any problems with the applications.”

“I look forward to the bond call in late April where we will be able to provide greater insight into our combined financial performance along with the value being created from the integration of Lowell and GFKL against the market backdrop as a whole.”

The trading update will be made available on both Lowell and GFKL investor websites.

 

* These results do not represent the consolidated results of Garfunkelux Holdco 2 S.A. and are the results of the trading units of GFKL and Lowell only. Please note that the Garfunkelux Holdco 2 S.A. consolidated financial statements will be announced in April 2016 and will apply acquisition accounting to consolidate the results of GFKL and Lowell. As a result these entities will only be included within the Garfunkelux Holdco 2 S.A. consolidated financial statements from the date of the relevant acquisition.

** Cash EBITDA is defined as both Lowell‘s and GFKL‘s Adjusted EBITDA, each as defined in the Offering
Memorandum dated 14 October 2015.

*** Measured by revenue, estimated remaining collections on purchased debt portfolios and current outstanding face value of debt portfolios managed on behalf of third parties.

For further enquiries, please contact:

Lowell
Karen Leech +44 (0) 7880 191 396
Karen.leech@lowellgroup.co.uk

GFKL
Josef Rettenmeier +49 (0) 2011 021 192
Josef.Rettenmeier@gfkl.com

Notes:

Trading Estimates
The above trading estimates, including our estimated Collections, Adjusted EBITDA, cash income and ERC for the relevant periods, were not audited or reviewed by any third-party and are based on our management accounts which are principally prepared in accordance with IFRS. Further, the above trading estimates are not intended to be a comprehensive statement of our financial or operational results for the above mentioned periods. These trading estimates were prepared based on a number of assumptions and judgments and, as a result, reflect a certain level of uncertainty and are subject to revision. Our actual results for the above mentioned periods may vary from these trading estimates, and such variations could be material.

Forward Looking Statements
This press release may include “forward looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. These forward looking statements can be identified by the use of forward looking terminology, including the terms “believes”, “estimates”, “anticipates”, “expects”, “intends”, “may”, “will” or “should” or, in each case, their negative, or other variations or comparable terminology. These forward looking statements include all matters that are not historical facts and include statements regarding Lowell, GFKL or their respective affiliates’ intentions, beliefs or current expectations concerning, among other things, Lowell, GFKL or their respective affiliates’ results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which it operates. By their nature, forward looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Readers are cautioned that forward looking statements are not guarantees of future performance and that Lowell, GFKL or their respective affiliates’ actual results of operations, financial condition and liquidity, and the development of the industry in which they operate may differ materially from those made in or suggested by the forward looking statements contained in this press release. In addition, even if Lowell, GFKL or their respective affiliates’ results of operations, financial condition and liquidity, and the development of the industry in which Lowell or GFKL operate are consistent with the forward looking statements contained in this press release, those results or developments may not be indicative of results or developments in subsequent periods. Given these risks and uncertainties, you should not rely on forward looking statements as a prediction of actual results.

Lowell and GFKL Group Announces New Board Appointments

Lowell and GFKL Group has appointed its new Group Chair, Heinz Hilgert, and announced the appointment of Christopher Trepel, PhD as its Group Chief Science Officer.

Heinz Hilgert has significant international banking experience, was formerly CEO of WestLB and Deputy CEO of DZ Bank, and has served in Non Executive Director and Chairman roles in the areas of consumer credit, asset management and private banking.  Heinz will work with other non-executive representatives from Permira Funds and Ontario Teachers’ Pension Plan (OTPP), the Group’s investors, as well as Adrian Hill, the existing UK Chair, on the Group’s Non-Executive Investor Board.

Christopher Trepel, PhD joins as Group Chief Science Officer from Fenway Summer LLC, a Washington DC-based financial services investment firm, where he serves as an Operating Partner in Fenway Summer’s venture capital fund. He previously held the post of Senior Vice President and Chief Scientific Officer at Encore Capital Group. Chris will lead the enterprise-wide Decision Science Programme to further enhance the Group’s market-leading strengths in data analytics and asset pricing.  

The Group has also announced the remaining members of its Group Executive Board, consisting of key members from both its UK and German Executive Teams:

  • It will be jointly led by James Cornell, CEO of Lowell Group, and Kamyar Niroumand, CEO of GFKL.
  • Lowell’s Colin Storrar will act as overall Group Chief Finance Officer.
  • Lowell’s Sara de Tute will head up Group Legal and Compliance.
  • GFKL’s Marc Schillinger will be responsible for Group Sales with a view to optimising synergies between the UK and German markets.
  • The structure is also complimented by the existing UK and German Boards.

Commenting on the announcement, James Cornell, co-CEO, said:

“We are delighted to announce our new Group and our impressive new appointments: Heinz and Chris. We start a new chapter as one of Europe’s leading end-to-end credit management service providers whose vast experience and expertise will cement our leadership position, which is anchored by our core strengths in data analytics and operational efficiency.  Quite simply, we believe we are well positioned to become the marketplace’s most trusted and reputable partner in European receivables management.”

Kamy Niroumand, co-CEO, said:

“The launch of our Group heralds a new chapter in European consumer receivables management. I am proud to lead this new venture, and our dynamic executive team, alongside James. With our new Group we have brought together the finest talents from across our industry, and are further enhanced by the significant business expertise and experience of Heinz and Chris. Together, we will better serve our core markets in Germany and the UK and, in time, cement our leadership position across the wider European landscape.”

The combination of Lowell and GFKL, market leaders in the UK and Germany, has created one of the largest credit management businesses in Europe. With the backing of both global investment firm Permira funds and OTPP, the new Group will capitalise on the strong growth opportunities available by taking advantage of the complementary skill sets and the collective expertise of the two companies. The Group’s ambition is to be the most trusted and reputable partner in European receivables management.

 

 

Media Contacts:

GFKL

Marc Schillinger +49 (0) 201 102 1195

Marc.Schillinger@gfkl.com

Lowell

Karen Leech +44 (0) 113 285 6595

Karen.Leech@lowellgroup.co.uk

About Lowell and GFKL Group

The Group was created in October 2015, following Lowell’s acquisition by Permira Funds and its subsequent merger with GFKL. Lowell was founded in 2004 and is headquartered in Leeds. It is one of the UK’s largest receivables management companies, employing over 1,200 people and comprises Lowell Financial, Fredrickson and Lowell Solicitors. Lowell has in excess of 17 million accounts and has nine million customers, which represents a significant proportion of the UK’s credit active population. For further information visit http://www.lowellgroup.co.uk/

GFKL is headquartered in Essen, Germany and is the largest non-captive receivables management company in Germany. It is a full service provider – from risk to receivables management services with an international customer portfolio.   It employs 950 people and manages a receivables portfolio of EUR 16.6 billion for clients from various industries, including banks, insurance companies, online retailers and telecommunications companies. The company is one of the very few service providers in the market that has a high-quality professional receivables management offering, servicing not only major corporations but also medium-sized companies.  For further information visit http://www.gfkl.com/

Heinz Hilgert

Heinz was formerly the CEO of WestLB and Deputy CEO of DZ Bank AG. Heinz currently holds the position as Chairman of the Supervisory Board of DataGroup AG and is Senior Advisor to Muzinich & Co, New York and Credit Suisse Investment Bank, London.

Christopher Trepel, PhD

Chris has extensive executive management expertise in corporate strategy, data analytics and consumer behaviour. He is currently an Operating Partner in Fenway Summer’s venture capital fund and was previously SVP and Chief Scientific Officer at Encore Capital Group (NASDAQ: ECPG).  Before that, he served at Wells Fargo Bank and McKinsey & Company.  Chris’ research has been published widely in academic journals and the popular press.