The members of the EOS Group’s Board of Directors look back over a very successful financial year 2016/17. They reveal how they were able to achieve this despite a difficult market environment.
EOS Consolidated achieved an extraordinarily good result in the reporting year 2016/17. At 195.4 million euros, earnings before tax (EBT) significantly exceed the previous year’s figure. This success is all the more remarkable as the competitive pressure is increasing. As a result of the expansionist monetary policy, many competitors with access to plentiful capital are crowding onto the market. Nevertheless, we have held our position in debt purchases very well. Faced with declining margins in fiduciary business we want to increase our efficiency still further. To achieve this we are pushing ahead with the digitalisation of our services. We are currently investing 90 million euros in our IT systems, the biggest sum ever in the history of EOS Consolidated.
We need the right mindset to be in a position to use the opportunities of digitalisation in the best possible way. This is why we have initiated a change process. In our Cultural Journey@EOS we define how we want to work together in the future. For example, by giving our employees greater latitude in decision-making, we make EOS faster and more efficient. Our objective is to continue to be at the forefront in technology and our services. We therefore want to maintain or achieve a position among the top 3 service-providers in all established markets.
One of the reasons behind the excellent annual financial statements of EOS Consolidated in the financial year 2016/17 is the development of new business models. For example, we are increasingly extending the purchase of non-performing receivables secured by real estate and the acquisition of real estate that can be restructured. When we do this, we benefit from the know-how we have developed in Germany over a long time. Happily we have been able once again to noticeably increase the investment volume in debt purchases in the past financial year.
At the same time we have further improved the productivity of our debt collection processes. This is the path we want to follow. In future we will therefore focus even more heavily than before on data-driven debt collection processes. But at the same time we pay particular attention to data security and data protection. This is how we will increase our efficiency, performance and competitiveness in the future.
In Germany we far outperformed our expectations in the financial year 2016/17. Sales increased 11.1 per cent compared with the previous year and were well above the forecast. After adjustment for the sale of our holding in the business information service Bürgel, earnings before tax (EBT) are higher than the previous year and therefore exceed the planned EBT level.
In spite of aggressive pricing by our competition, we were able to increase our investments in debt purchases to an extraordinary degree, compared to the previous year. This applies to the purchase of both unsecured debt portfolios and debt portfolios secured by real estate.
To further increase the productivity of our debt collection processes, we have made significant investments in the redevelopment of our debt collection software, a process we initiated in the financial year 2015/16. With the assistance of digitalisation we are ensuring that we will make a major contribution to the level of earnings of EOS Consolidated also in the future.
In the last financial year in the Western European region we succeeded in exceeding the already outstanding sales level of the previous year by 33.5 per cent. One reason is the very large increase in debt purchases, especially in France and Belgium. Major investments in the purchase of interesting receivables portfolios in Spain contributed to an increase in sales in this country, and in Portugal debt purchases jointly with a partner company produced the same effect.
In addition the purchase of the companies of the Contentia Group in France and Belgium made a considerable contribution to the increase in sales.
In the North American region sales were unfortunately below the level of the previous financial year. This is due for the most part to the downward trend in receivables management for government student loans. In the current financial year we are planning to significantly increase the sales level in the fiduciary area among others, for example in the healthcare sector.
We achieved an outstanding result in the Eastern European region. Sales were 21.5 per cent over the previous year’s level, which was already very high. The outcome was that in the last financial year we achieved sales and earnings before tax (EBT) which were at the highest level ever seen for this region in the history of EOS Consolidated.
The major increases in sales resulting from debt purchases in Croatia and Hungary played an important part in this positive development. The greatly improved performance of the receivables purchased in Russia and the high investment volume in Bulgaria from the previous financial year also contributed to the increased sales.
In the financial year 2016/17 the investment volume in the region increased again over that of the previous year, which was already at a very high level. This was driven by the purchases of real estate and receivables secured by real estate in Romania and Croatia, which were made jointly with external investors.