EOS Insights 2014/2015
Transcription
EOS Insights 2014/2015
Insights The EOS Group in 2014/15 With head and heart in finance EOS business model EOS at a glance Sales development countries on 4 continents. EBITDA In million EUR 458.0 607.3 9,585 9,173 2012/13 2013/14 orm atio n M an a e gem nt Fraud prevention Analytics Target group marketing 2014/15 (As at: 28.02.2015) Volume of debt purchases Nominal amounts in million EUR EOS modules The companies of the EOS Group provide services in three business areas: Receivables Management, Liquidity Management and Information Management. These services can be used individually or in combination. p Centred on the EOS Group’s core competence of Receivables Management, EOS companies offer debt collection, arrears management and support their customers with international debt collection. This includes fiduciary collection and acquiring debt portfolios from customers. 3,773 96 per cent of all paid cases outside of the courts. In f 8,817 In the 2014/15 financial year EOS Consolidated once again acquired a high total volume of receivables portfolios. In terms of international debt collection, EOS resolves i Serving clients Securing cash Risk management Consumer information Business information Property information 2011/12 u id e m en t The total number of EOS Consolidated staff is 8,817 people worldwide. Liq nag 2014/15 en t Ma 150 countries. 2013/14 Employee development 9,185 Operating through an international network of subsidiaries and partner companies, EOS offers services in more than 2012/13 157.1 a m ge Factoring Finetrading ty 50 subsidiaries serve around 20,000 clients worldwide. 2011/12 176.8 143.4 126.7 More than 566.9 515.2 an in 26 Sales worldwide Debt collection (national and international) Debt purchase Field service SAP solutions Arrears management Receiva bl es M The companies of the EOS Group are represented EOS Consolidated was able to maintain the high level of sales it sought in the 2014/15 financial year. 2,844 1,717 p Liquidity Management at EOS includes flexible financing instruments such as factoring and finetrading. EOS thus helps customers increase their liquidity, allowing them to focus on their core business. 2011/12 p Customers use EOS Information Management services to obtain information on a potential business partner before a transaction, exploring their credit rating and fraud probability to miminise credit risk. Another service is individualised marketing information, to reach a target audience most efficiently. 2012/13 2013/14 2,526 2014/15 Contents Major purchase: The most extensive credit portfolio in the history of EOS Immobilienworkout 31 12 24 Rapid growth: How EOS DID became a market leader in the field of debt collection in Germany In line with the times: The EOS consumer portals offer a range of innovative online services Ready for the future: The Managing Director of EOS ÖID in Austria 30 04 Preface CEO Hans-Werner Scherer on why agility is the key to success Being agile 08 Interview The Board of Directors explains how EOS has once again achieved its ambitious goals 11 N ews EOS’ first year in Denmark • Corporate acquisition in Switzerland • ‘A’ rating confirmed again 12 Considerable growth Some 40 years after its establishment, EOS DID is now one of the most successful companies in the EOS Group 14 Keeping watch The experts at EOS IT Services monitor sensitive data at all times 16 A cultural change Belgian bank Belfius puts its trust in value-oriented receivables management from EOS 18 A moral compass The EOS Group shows how to combine ethics with sound economic practices 20 S eeking out trends International studies performed by EOS are showing the trends that are influencing receivables management Staying agile 24 R eady for anything Clarify questions, view outstanding debts, make payments – EOS is offering debtors an innovative range of online services 26 S uccess without limits How EOS is building on the international debt collection service it offers through a new partner network 28 H idden treasures Valuation reports for assigned receivables are making lending decisions easier at Kreissparkasse Biberach in Germany 30 Setting the course The Managing Director of EOS ÖID sets out his plans for the company 31 An impressive mountain of files EOS Immobilienworkout acquires its largest portfolio to date 32 A successful shift How a Polish bank is benefitting from a business process outsourcing arrangement 34 H igh-reaching objectives Petra Scharner-Wolff, Member of the Advisory Board of the EOS Group, on the growing significance of EOS for the Otto Group FIGURES, DATA, FACTS 36 D evelopment EOS Consolidated has maintained stable results in the 2014/15 period 40 F igures An overview of key figures from EOS Consolidated On the cover Philipp Kerstan has been working as an independent cycle courier for some 15 years. He even gave up his studies to become a teacher a few years ago in order to continue with his job. ‘I earn enough to support my family,’ the father-of-one says. On behalf of his clients, Mr Kerstan transports anything from confidential documents to forgotten keys and misplaced mobile phones. Each day, he cycles around 100 kilometres through the streets of Hamburg – whatever the weather. ‘I enjoy being out in the fresh air and love being my own boss,’ the 35-year-old says. 4 PREFACE In a business, you need to remain agile to avoid losing momentum. That’s why ‘agility’ is the focus of the latest ‘Insights’, the annual report of the EOS Group. This image of bike courier Philipp Kerstan sums it up perfectly. Philipp is the embodiment of EOS. Instead of standing still, it is often necessary to swerve around obstacles to get to the destination faster. In doing so, EOS remains creative yet keeps its feet on the ground. We also make use of the tools we have mastered – just like the courier with his bike. Last year, EOS proved its agility several times over. Having acquired the biggest portfolio of loans secured by real estate in the history of EOS Immobilienworkout in Germany, the company is, for the first time, managing both existing properties and performing loans (that is, loans the borrower is servicing as agreed). On the subject of borrowers, EOS has in recent months focused more heavily on debtors, which is a key target group. EOS believes that a more transparent, cooperative and open dialogue with these customers on an equal footing brings about the best solution for all parties. As such, it is important to improve communication with customers. Driven by changing user behaviour and the digital transformation, the Internet is a key area of focus. As a result, the consumer portals worldwide are currently undergoing an overhaul. Among other things, visitors to these pages will receive clear and simple answers to their questions, be able to arrange contact with EOS and access an overview of their outstanding debts. These are just two examples of developments that have driven EOS in the last few months. You can read about them in the following pages – mostly taking a direct route without any detours, but sometimes with a few twists and turns along the way if the subject demands it. I hope you enjoy your journey through the EOS year. Hans-Werner Scherer 4 Dr Helmut Hufnagel: Member of the EOS Group’s Board of Directors and responsible for the Eastern European region Klaus Engberding: Member of the EOS Group’s Board of Directors and responsible for the German market Hans-Werner Scherer: Chairman of the EOS Group’s Board of Directors and responsible for Brazil Justus Hecking-Veltman: Member of the EOS Group’s Board of Directors and Chief Financial Officer Dr Andreas Witzig: Member of the EOS Group’s Board of Directors and responsible for the Western European and North American regions 5 eing agile Being Agile ‘With complex transactions, we’re well ahead of the competition’ Hans-Werner Scherer, CEO with responsibility for Brazil: EOS has once again achieved its ambitious goals The EOS Group has once again brought the financial year to a successful close, despite the unstable global political situation and strong levels of competition. With all these factors at play, the Board of Directors reveals how the company is remaining on course for success. The focus of this year’s edition of the ‘Insights’ annual report is ‘agility’. Mr Scherer, how has EOS been agile over the past year? Mr Scherer: The theme of agility relates to EOS in a number of ways. First of all, we Dr Andreas Witzig, responsible for the regions of Western Europe and North America: EOS has proven itself to be a reliable partner 8 as the EOS Board of Directors have reorganised ourselves. As part of this move, Paul Leary, Sr., who has been our colleague for many years, decided to withdraw from operational responsibility for the region of America in order to retire. After many years of s uccessfully working together, we were very sad to hear of his decision, but were nevertheless prepared. Dr Witzig and I have been involved in managing the region for quite some time now, enabling us to ensure continuity and stability in the region’s leadership. Dr Witzig is now responsible for North America, and I am responsible for Brazil. What’s more, we were able to recruit a colleague from the Otto Group to take over management of the region of Eastern Europe: Dr Helmut Hufnagel, who has already worked with us on a number of projects in his role as Director of the Otto Group consulting department. Dr Hufnagel will be taking over the role previously filled by Christos Savvides, who will continue to work with us in an advisory capacity until the end of the year. Finally, the Otto Group appointed a new member to the Advisory Board of the EOS Group as of 1 December 2014. Petra ScharnerWolff will be working with us following Jürgen Schulte-Laggenbeck’s decision to pursue new challenges having worked as the Otto Group Executive Board Member for Finance for ten years. That in itself is a significant amount of agility from a personnel perspective! Mr Scherer: That’s right. However, the success that the EOS Group has seen on the market over recent years has only been possible by seeking out new sources of momentum and keeping our finger on the pulse. How has this financial year been from an economic perspective? Mr Scherer: We are extremely happy with our performance, even though the continued economic uncertainty has kept us on our toes: a fluctuating euro, the shift of power in Greece and the conflict between Russia and Ukraine are just a few examples to highlight at this point. Against this backdrop, we are proud that EOS has once again achieved its ambitious goals. That is a huge achievement and testament to an impressive team performance. Despite the fact that we achieved what we set out to achieve, the results are not as good as the previous financial year. Mr HeckingVeltman, are you happy as CFO? Mr Hecking-Veltman: Absolutely. The 2013/14 financial year was defined by a number of favourable events. From an early stage, we could see that the results from that year would be exceptional. Looking at our results over a period of five years, we can see that we are right on course with our latest results and are showing stable, reliable development. How has business developed in the various regions? Dr Witzig: In Western Europe, we are continuing on a healthy course of growth. The region has consistently experienced positive growth over recent years, enabling us to maintain a solid position in our markets despite varying conditions. North America was also able to round off the financial year with pleasing results. In particular, the results from work to process student loans for the Department of Education contributed to this success in the USA. Dr Hufnagel: As a region, Eastern Europe is significantly less stable. We were not able to finish the year matching the results of the previous year as planned. In addition to the crises in Russia and Greece that have already been mentioned, the picture coming from the 13 markets in Eastern Europe is differentiated. However, from our perspective, one thing unifies the countries: our colleagues in all the countries are impressing me with their openminded and determined approach. Everyone supports one another. There really is a positive dynamic here. Mr Scherer: Brazil, by way of contrast, is and remains a difficult market, as is Asia. We have decided to withdraw from China. This was not an easy decision to make, but we felt this move was necessary for the development of the Group as a whole. Germany remains the strongest market within the EOS Group in terms of sales. What is the picture coming from this region? Mr Engberding: Current monetary policy is leading to what is almost a boom in Germany. That has two important ramifications for our core business. First of all, there are fewer portfolios available to purchase, as there are ultimately fewer defaults. At the same time, this situation pushes more competitors – increasingly even competitors from other sectors – onto the market as they are looking to invest. Prices therefore rise disproportionately. That is why we are concentrating on what we know we are good at: complex transactions such as breaking off entire debt collection departments from companies. Previous years have seen us prove through mergers and acquisitions in Belgium, Spain and Switzerland that Klaus Engberding, responsible for the German market: Massive potential in the acquisition of loans secured by real estate 9 Being Agile Where does your focus lie in going about this work? Mr Engberding: We have launched a project to increase productivity. As part of this project, we are aiming to rapidly improve our pro cesses, while also working on our most important support: our IT system. The goal is to further develop our pioneering debt collection software in order to retain this essential competitive advantage. Mr Hecking-Veltman: The question really is: what will debt collection be like in the future and what opportunities are presented by new technology? This is a discussion we are currently having in Germany to seek out potential benefits for the Group as a whole. Dr Helmut Hufnagel, responsible for the region Eastern Europe: The dynamic at EOS subsidi aries in Eastern Europe is positive, despite difficult conditions we are a reliable partner in this regard. We offer sellers a high level of security in their transaction, ensure that their reputation is protected and contribute our expertise in contracts and fiscal law. By working with us, our clients are leaving their organisations, and their employees, in safe hands. This is an area in which we are far ahead of the competition. Is managing complexity also a reason for EOS’ growing success in the field of loans secured by real estate? Mr Engberding: It absolutely is. Last year saw us take on the largest receivables portfolio in the history of our subsidiary, EOS Immobilienworkout, in Germany. We see huge potential in developing this business model; after all, no other competitor can master this market segment as effectively as we can. Last year saw a number of new laws come into effect in Germany. How has that affected business? Mr Engberding: One issue we have been working on is implementing the law against dubious business practices into our business operations. That work is now largely complete, and now all our efforts are focusing on increasing productivity in our core business. 10 The issue on everyone’s lips at the moment is ‘data security’. Is that the case at EOS, too? Mr Hecking-Veltman: Yes, it is. Our clients are more interested in issues such as data protection and data security than ever before. The reasons for this are both economic and related to security concerns or concerns surrounding reputation. Data security is a topic we take extremely seriously. For example, our IT department tasks external service providers with testing all IT systems in the EOS Group for security vulnerabilities. These service pro- CFO Justus Hecking-Veltman: The results of EOS Consolidated are exactly as planned and indicate stable, reliable development viders simulate external attacks on IT systems to see if our systems are really secure. I think we can ultimately rest assured; after all, a company such as the EOS Group has a clear advantage over smaller providers in this area given its size and solid structure. Mr Scherer, what areas will the EOS Group be focusing on over the coming year? Mr Scherer: I see three key factors driving our business over the coming years. The EOS Group’s core business is and will continue to be debt collection. Our focus is on unsecured receivables in purchasing debt in the B2C sector. In addition, we are also pushing ahead with business in the B2B sector. Then there is the matter of developing the potential in the business model for loans secured by real estate – namely in Germany and other selected markets in Europe. Finally, we will continue to focus on the business process outsourcing projects that have already been mentioned, namely purchasing entire debt collection departments from larger companies. As Mr Engberding has said, we are concentrating on the areas of business that bring our many years of experience, the financial stability of the Group and our specialist expertise to full bear. That is fully in line with our claim of delivering quality leadership – a claim that we will continue to uphold. NEWS A solid start in Denmark Unlocking potential in the north: Peter Hægerstrand Jensen, Managing Director of EOS in Denmark EOS in Denmark can look back on a successful first year of business. The first Scandinavian company in the EOS Group was established in spring 2014. The team, headed by Managing Director Peter Hægerstrand Jensen, rapidly built up a customer base, which it has continued to expand over the past year. EOS services focus on banks and financial institutions. ‘Our customers appreciate our way of working together with debtors, which revolves around solution-focused communication and working together with customers,’ says Mr Hægerstrand Jensen. In Denmark, where debt collection companies have limited room for manoeuvre due to legal constraints, this approach is very popular. EOS builds on market position in Switzerland On 1 May 2015, the EOS Group became the sole shareholder in debt collection provider Alphapay AG after acquiring the company from Swiss telecommunications operator Swisscom AG. The company currently holds the number two spot among Swiss debt collection companies and specialises in the collection of telecommunications receivables and debt collection for the banking and consumer finance sectors. ‘This business process outsourcing move enables us to improve our market position in Switzerland,’ says Dr Andreas Witzig, Member of the EOS Group’s Board of Directors with responsibility for Western Europe. Swisscom was keen to withdraw from debt collection because it is neither core business nor a strategic growth area for the company. ‘We wanted a partner who would guarantee the greatest possible continuity for our clients and employees. What’s more, EOS has an Eleven times in a row: EOS once again receives outstanding rating Outstanding: EOS receives ‘A’ rating For the eleventh time in a row, EOS Holding GmbH has received an ‘A’ rating from credit rating agency Euler Hermes Rating GmbH. The rating was given in summer 2015. Thus, the agency is attesting to the high level of creditworthiness and sustainability that EOS offers as a company. The stable level of return that EOS has secured over the years, as well as its many years of experience in debt purchase and the international presence it maintains, are all factors highlighted as good by the agency. Movement in Zurich: EOS Schweiz gains market share through acquisition excellent reputation,’ explains Mario Rossi, Chief Financial Officer at Swisscom. The employees of Alphapay will continue to work for the company. ‘For EOS, this acquisition is a pleasing development that strengthens our sector expertise,’ explains Hansruedi Brügger, Managing Director of EOS Schweiz and of Alphapay, with immediate effect. 11 Being Agile business field: ‘Purchasing and processing receivables portfolios enabled us to further build on our market position,’ says Mr Borgartz. EOS DID was one of the first debt collection companies to purchase a portfolio of unsecured receivables. The company has long been a market leader in Germany and is one of the most successful subsidiaries of the EOS Group. However, EOS is never short of challenges. ‘We want to continue working together with our clients to achieve success,’ says Mr Borgartz. The aim is to retain the company’s position in the highly competitive market in Germany. ‘Some 1,300 dedicated employees who are committed to debt collection are working on this goal for EOS Deutschland each and every day.’ Germany First on the start line The EOS Group was born back in 1974 with the founding of Deutscher Inkasso-Dienst (DID), a business known today as EOS DID. Since its inception, the company has developed to become a major international enterprise. Thanks to its experience in the sector and the expertise and flexibility it offers, EOS DID is now a market leader among German debt collection companies. T o see the extent to which the professional debt collection industry has changed over recent years, it is necessary to take a look into the present. Today, debt collection processes at EOS DID are automated wherever possible. The process for sending reminder letters, for example, is controlled directly in the EOS printing centre. Back in 1974, things were very different. The company had formed from the legal department of Otto Versand, taking on the name Deutscher Inkasso-Dienst GmbH & Co. KG. The 45 employees of the new company initially used the existing infrastructure. Dictaphones were used to record information; these recordings were then sent to the typing pool at Otto, where the reminder letters were drafted. However, it is not just the technology that has developed since those days. Even the very topic of receivables management has become increasingly complex. Debt collection companies are subject to an ever-widening range of legal provisions. And the process for commu- 12 nicating with customers has developed too. Today, EOS DID uses a range of different methods to recover debts. These include written reminder letters sent by post, reminder telephone calls, use of digital media and deployment of a debt collection field service active across Germany. Through this set-up, the company sends out over 750,000 reminder letters in the post from the printing centre every month. Growing by looking ahead In debt recovery, establishing telephone contact provides a crucial advantage; so much so that today EOS operates three dedicated call centres for handling reminders over the phone. The professional way in which EOS deals with debtors is something that our clients really value. ‘Our clients appreciate the seamless processes we have in place and know they can rely on us to protect their reputation,’ says Jürgen Borgartz, Managing Director of EOS Deutschland GmbH. In the mail room at the printing centre: Jürgen Borgartz, Managing Director of EOS Deutschland, and Gabriele Duwe, Head of Debt Collection Division, EOS DID 2014 Third call centre for reminder calls is opened Without specialist software, it would be virtually impossible to recover debt effectively. Since 2001, EOS DID has been using its own system, known as Fidibus. The software, developed by the company itself, is used to create automated reminder workflows and control debt collection measures. ‘The things I have learnt in my 29 years at EOS DID could fill a book,’ says Head of Debt Collection Division Gabriele Duwe. Ms Duwe was involved in the work to develop Fidibus and is responsible for the innovation teams that work to constantly develop debt collection measures. ‘It really is great to be continually contributing your ideas and actively shaping the future of EOS DID,’ Ms Duwe notes. Time and time again, it has been forwardthinking decisions that have secured EOS DID’s position on the market. The company set a crucial course for continual growth back in 1977 when it pursued a new path, after initially only having handled debt collection cases for Otto Versand. At a time when it was unusual for a company to outsource its receivables management processes, EOS DID won a bank as its first client beyond its parent company. ‘From the very beginning, we positioned ourselves as a strong, professional external service provider in the field of fiduciary collection,’ Mr Borgartz explains. In doing so, EOS DID focused on selected sectors, 2002 2001 EOS DID: Rapid growth 1974 continually building up its expertise to meet the needs of its clients in the retail markets. In addition to the mail order sector, the company won business from banks, insurance companies, energy providers and telecommunications companies. In 1988, EOS DID tapped into another 1988 1977 2007 Expertise from debt collection companies in Germany – among them EOS DID – is brought together to create EOS Deutschland The EOS brand is introduced. EOS DID bears the new logo as the first company within the Group After eight years of preparation, the Fidibus debt collection software, which was developed by the company itself, is used for the first time DID embarks on its first debt purchase DID wins its first client outside of Otto Versand, taking responsibility for fiduciary collection for a bank Deutscher Inkasso-Dienst GmbH & Co. KG is founded on 14 October 1974 as a spin-off of the legal department of Otto Versand 13 Being agile Half of all companies in Germany have been affected by digital attacks 66 60 60 58 58 Public health 68 Media & culture 80 Finance and insurance Not affected: 21 % In per cent Chemicals & pharma ceuticals Affected: 51 % Most frequently affected industries Automotive Percentage of companies affected by data theft, digital industrial espionage or sabotage in the past two years. 40 0 Probably affected: 28 % Security is their top priority: Dr Roger Nolting (right), Managing Director of EOS IT Services, and IT security expert Gunnar Woitack Security without a cloud in sight Germany Digitalisation in business is progressing at great speed – and bringing with it a host of advantages, such as a faster flow of information both inside companies and to customers. To ensure that sensitive data is protected in the most effective way possible, companies need to adapt their IT solutions. The experts at EOS IT Services continually build on protective measures to counteract potential risks. 14 C loud solutions are on the rise – more and more companies are using storage capacity, software and computing power hosted online. In taking this step into the ‘cloud,’ they aim to reduce the workload of their own staff and cut costs. Currently, around 44 per cent of companies in Germany use this IT solution, according to a survey carried out by auditing firm KPMG in conjunction with industry association Bitkom. Among larger companies (with more than 500 employees), cloud computing usage rises to around 70 per cent – in spite of the fact that many respondents were sceptical about security. Some 60 per cent of those surveyed expressed concern about the risk of attacks on data. And that is precisely why EOS has opted to do things differently: The financial services provider is expanding its own data centre at the company’s headquarters in Hamburg. the highly sensitive data entrusted to us by our clients with the utmost care,’ explains Dr Roger Nolting, Managing Director of EOS IT Services, the IT subsidiary of the EOS Group in Germany. ‘Trustworthiness is our greatest asset – and we must protect it.’ this in mind, it is prudent for businesses to keep a close eye on IT security. Over the past ten years, EOS has been expanding its protective measures, based on standards such as ISO 27001, the international standard for IT processes in companies. One of the key security precautions the company has taken is to store data on its clients and their customers in its own data centre, monitored by experts from EOS IT Services. ‘This approach means that EOS maintains full control over the IT environment where client and company data is stored,’ emphasises Dr Nolting. Complete control Overview of security vulnerabilities For many companies, IT security is growing in importance as a focal element of risk management. In the Risk Barometer 2015 by insurance company Allianz, global companies rank risks arising from the Internet as the fifth most serious business risk – putting it three places higher in the table than the previous year. With As information security has taken on greater importance, EOS has been working to ramp up its capabilities, and in 2011 set up a new unit within EOS IT Services to focus on the topic. The Security Management team, headed by Gunnar Woitack, checks that all computers in the company are up to date with the Trust is our greatest asset ‘As a financial services provider, it is essential to the success of our business that we handle Security guidelines: Sensitive data is stored in the closely monitored data centre in Hamburg, Germany Source: Bitkom, 2015 20 latest security software and monitors reports of new security vulnerabilities, establishing whether these reports are relevant to EOS. These are just some examples of the team’s day-to-day work: ‘We also encrypt data for transactions and on end devices, both in the data centre and on employee devices,’ explains Dr Nolting. ‘Even if someone did get hold of one of our laptops or steal a storage unit from the data centre, they wouldn’t be able to do anything with it.’ Regular security checks The experts at EOS are also tasked with monitoring unusual data activity. ‘Our logging and monitoring system allows us to monitor access to files. We have also programmed fraudulent usage patterns into the system. If certain patterns are observed, the system warns us,’ explains Mr Woitack. The team also performs regular security checks to identify weak points across all IT systems in the EOS Group: ‘With the help of service providers, we simulate external attacks to check whether our systems are secure,’ says Dr Nolting. The specialist providers attempt to find weak points in the systems via the Internet. The Security Management does not rely just on the competence of one provider alone, but works with multiple companies. ‘This means that we benefit from seeing the different approaches that the various service providers take, as they all approach our systems from a different angle,’ explains Mr Woitack. This in-depth security concept and the work done every day by Dr Nolting, Mr Woitack and their team mean that EOS clients can confidently place their trust in the company. 15 Being agile Belgium The client comes first In 2011, the Belgian banking and insurance group Belfius implemented a fundamental cultural change. The financial services provider attaches great importance to social responsibility. EOS Aremas also fulfils this requirement in receivables management. T he year 2011 marked a turning point for the European banking sector: For the first time since the start of the financial crisis in 2008, a major continental bank was passed into state hands. The Franco-Belgian Dexia Group fell into financial difficulties due in part to its exposure to Greek public bonds and had to be stabilised with help from the state. The government in Brussels took over the Belgian part of the bank. In 2012, the institute was renamed Belfius Bank and Insurance. ‘With this new name we turn a page,’ said Chairman of the Management Board, Jos Clijsters. After starting afresh, the country’s largest integrated banking and insurance services Overdue loans on the increase In Belgium, the number of borrowers with an overdue agreement has risen within a year, as has the total number of credit agreements with arrears. Total amount of overdue loans (in thousand EUR) Borrowers with at least one overdue agreement 04/2014 16 04/2015 2 bn. 1 bn. 3,025,918 100,000 346,439 200,000 +4.1 % 3 bn. 3,150,506 +2.4 % 300,000 provider committed itself, as a regionally based company, to doing business for the benefit of society. Belfius is steadily working at this goal and has made great progress. In 2014, its consolidated profit increased for the third year in a row, reaching 462 million euros. In the last year alone, the financial services provider invested 16.2 billion euros in the Belgian econo my. Through efficient risk management and retained earnings, the company increased its financial strength and cash flow, and passed the stress test carried out by the European Central Bank (ECB). ‘In 2014, we have shown that the strength and solidity of Belfius are longlasting,’ says Mr Clijsters by way of summary. A long-lasting relationship 4 bn. 354,616 Source: National Bank of Belgium, 2015 400,000 Great progress: Patrik Wirix (left) and Peter Bernaerts of Belfius are optimising the debt collection process Optimising debt collection is one part of the bank’s prudent risk management strategy. ‘For consumer loans and loans for small businesses, Belfius works closely with external partners,’ explains Patrik Wirix, Director Credit Management & Support. The bank has relied on the support of EOS Aremas in Belgium since 2012, when Belfius offered a debt portfolio for purchase. ‘Our partners are selected on the basis of quantitative and quali tative criteria. The latter are just as important because Belfius Bank has a strong social responsibility. We assess the buyer on their financial strength and ability to avoid damage to reputation, as well as the price. We were won over by EOS Aremas.’ In 2013, Belfius handed over a second portfolio to EOS. ‘We have established a lasting relationship with EOS Aremas. Every month, we sell written-off loans to our service provider on a continuous basis,’ explains Peter Bernaerts, Head of the Debt Collection Department. ‘The number of non-performing loans has increased in recent years as more and more private households take out loans,’ explains Roel Dumont, Managing Director of EOS Aremas in Belgium. ‘Currently, around 350,000 of the eleven million or so Belgians are not able to service their bank loan’ (see graph). EOS Aremas has specialised in debt collection for banks for 25 years. ‘98 per cent of our clients come from this sector. EOS Aremas is partnered with four of the five largest financial institutions in the country,’ says Mr Dumont. This expertise is rooted in the history of the company. It was created in 2000 as a spin-off from the receivables department of AlphaCredit, a subsidiary of BNP Paribas Fortis bank. In 2008, the EOS Group entered into a joint venture with BNP Paribas. ‘EOS Aremas has now become the biggest service provider and purchaser of receivables portfolios for the Belgian banking sector. Since 2013, we have also offered B2B debt collection in addition to B2C.’ Strengthening cash flow Today, the company generates 50 per cent of its sales from debt purchases. ‘Due to the increasing regulation of the sector, such as from Basel III, more and more banks are looking for ways to clean up their balance sheets and outsource areas that are not part of their core business, such as debt collection. Debt sales are a great way to strengthen cash flow,’ explains Mr Dumont. Mr Wirix confirms the benefits of outsourcing: ‘We optimise the debt collection process by calling in specialists with the highest level of expertise at every stage. EOS helps us to monitor outstanding debts, increase our cash flow and use internal resources more efficiently.’ EOS Aremas has impressed the bank in another aspect: Following its restart in 2011, Belfius implemented a fundamental cultural change. It aims to be the most client-orientated banking and insurance company in the country. For this reason, the bank places equally high demands on its debt collection service provider when it comes to dialogue with clients. ‘The Code of Conduct of our parent companies, EOS and BNP Paribas, determines our actions. That way, our client’s reputation is protected,’ says Mr Dumont. As one example, EOS Aremas attaches great importance to respectful and fair communication with customers. ‘That’s why our call centre agents receive continuous, in-depth training. This ensures our services remain at a consistently high level of quality,’ says Mr Dumont. He adds that EOS Aremas is always searching for mutually acceptable solutions in dialogue with customers. The clients confirm this: ‘The importance that EOS Aremas attaches to the human aspect of debt collection is very much appreciated,’ says Mr Bernaerts. And Mr Wirix adds: ‘We are very satisfied with this partnership.’ 17 Being Agile Positive mood right from the start: Sales Reporting Analyst Anna Schlutter appreciates the open approach at EOS Proud of the values of the EOS Group: Natalija Zupan, Managing Director EOS KSI in Slovenia Interview ‘Morals encourage success’ Prof. Dr. Josef Wieland has been researching business ethics and values management in companies for a long time. In this interview, he explains why global companies need a Code of Conduct and how values can be instilled into a company. How do morals and the tough competition that exists between companies go together? Moral value orientation is an element of economic success. Integrity and compliance management, corporate social responsibility, sustainability, human rights and social standards in the global value chain – today, these characteristics form the basis of a sustainable and innovation-oriented competitive strategy. Work performed by management to help strengthen the reputation of a company can help to gain a competitive advantage. Show your face for EOS What does a Code of Conduct achieve? It is part of the company calling card. It defines ethical values, principles and a legal framework that aim to shape the actions of the company, its management and all of its employees. In the reissued Code of Conduct, the EOS Group defines the ethical-moral principles that underpins its actions. Employees who implement this set of values every day show that the Code of Conduct is much more than just a statement of intent. I noticed the positive mood at EOS even during my job interview,’ recalls Anna Schlutter. She has worked as a Sales Reporting Analyst at EOS Deutschland, B2C business unit since 2013. Her first impression has been confirmed: ‘For me, the open and friendly approach towards one another is the special thing about working at EOS,’ she says. Ms Schlutter expresses how connected she feels to her employer in the company’s Code of Conduct. The Code of Conduct, re-launched in autumn 2014, shows her face together with other EOS employees. With statements like: ‘For me, a handshake means something’ or ‘I treat others as I like to be treated myself’ they explain how they breathe life into the basic values of the EOS Group every day. The Code of Conduct defines the basic ethical rules that apply within the EOS Group and in contact with clients and consumers. Thus, the Code creates binding specifications 18 for the actions of the employees of the EOS subsidiaries in 26 countries on four continents. This includes always taking into account all applicable laws, paying attention to and respecting different cultures, religions ‘At EOS, people are the most important asset.’ Hans-Werner Scherer, Chairman of the EOS Group’s Board of Directors and traditions. ‘We see it as our duty to consistently embody our well-founded ethical and moral principles at all locations where we are active as an economic organisation,’ says Hans-Werner Scherer, Chairman of the EOS Group’s Board of Directors. For many companies today, a set of core values is part of their success strategy. ‘If you want to create sustainable value you must commit to moral principles and beliefs and follow them in your day-to-day business,’ says Professor Josef Wieland, Director of the Leadership Excellence Institute Zeppelin (see interview). Along with moral principles, a Code of Conduct also determines real behaviour patterns. Realistic promises, fair objectives What does this mean for the sensitive debt collection sector? The EOS Group makes an important contribution to a functioning econo my. After all, professional receivables management directs cash flow back into the economic cycle. It protects its clients from financial losses and therefore supports their ability to invest. In order to establish trusting and lasting business relationships with clients, EOS sets guidelines for the quality of work. This includes only making realistic offers and promises as well as realistic and fair payment deadlines with customers. In addition, all data and information is treated as strictly confidential. ‘Ultimately, the reputation of our clients, their customers and the reputation of EOS itself is our most important asset,’ says Mr Scherer. The Code also contains a set of values for interactions within the Group: ‘Respect shapes our approach across all management levels,’ says Mr Scherer. Natalija Zupan confirms that these principles are more than just a statement of intent. The Managing Director of EOS KSI in Slovenia is one of the faces shown in the Code of Conduct. She explains: ‘I am proud to work for an employer like EOS. The appreciation and support that I experience every day while working for EOS is a big part of this feeling.’ What significance does the Code of Conduct have in an increasingly globalised world? The Code of Conduct has become more important. The globalisation of markets and the organisation of global value chains by global companies has once again given rise to many morally sensitive questions. Particularly challenging issues are the effectiveness of social standards and compliance with human rights. How do companies ensure that a code is more than just a few well-intentioned clichés? The real worth of a set of fundamental values and behavioural standards is shown in whether they are put into action and in what way this is done. What is decisive is the executive level of a company, often referred to as the ‘tone at the top’. The leading role taken by senior management shapes the Prof. Dr. Wieland: Director of the Leadership Excellence Institute Zeppelin (LEIZ) and Chairman of the German Network for Business Ethics corporate and management culture. Without these individuals acting as a driving force, a Code of Conduct is little more than a piece of paper. What aspects should the Code of Conduct regulate? This depends on the specific risks and the company sector. In general, compliance with laws and adherence to company-internal rules are codified within the Code of Conduct. Are there sectors or companies for which a Code of Conduct is particularly important? The more sensitive a sector is to compliance risks, the more it is governed by laws and therefore, the more important a Code of Conduct is. For companies active in markets and countries with high risks of corruption, the Code of Conduct is a condition for access to the market because it defines the risks and the resulting due diligence obligations. 19 Being agile EOS research: Revealing economic trends How reliable are Europeans at paying their bills and how much time are they given to pay them? For what purposes do Americans, Germans and Russians take on debt? And what is the receivables management industry like in Bulgaria? To answer these and other questions, EOS has commissioned a series of studies with renowned market research institutes. Germany, Russia, USA: Consumers in these countries are the most likely to take on debt to purchase properties and cars Europe: In 2015, companies are making significant cuts to payment deadlines allowed What payment deadline does your company typically allow (B2B)? Specify in days Western Europe 2014 42 40 42 Total 38 To buy a house or apartment 60 To buy a car or motorcycle To modernise/renovate a house or apartment 48 For medical bills (prevention or cure) 46 To pay for own education/ studies 42 45 To pay for education/studies of my children/grandchildren 39 To buy household appliances, e.g. washing machine, dishwasher Own further education To buy furnishings and furniture Germany USA 38 34 34 57 48 54 54 64 75 74 74 69 64 55 50 60 47 50 55 39 44 Russia 42 Bulgaria: Professional B2B debt collection increases recovery success Share of outstanding receivables by creditor industry in 2014 Figures in per cent Throughout Europe, the payment deadlines permitted for business customers are getting shorter. Spanish companies in particular saw payment deadlines granted in the B2B sector being cut significantly from an average of 64 days in the previous year to just 45 days today. This is generous, though, compared to Western Europe’s 35-day average, down from 42 days in the year before. In Eastern Europe, the payment deadline given to business cus20 tomers was cut from 42 days in the previous year to 40 days on average. These are the findings of the EOS Survey 2015 ‘European Payment Practices’, for which market research institute TNS Infratest interviewed decisionmakers from 13 different countries. While these developments have been taking place, the payment behaviour of Europeans has also improved: 22 per cent of bills are now paid late or not at all – that is three per cent less than in the previous year. According to the results of the EOS Survey, this upward trend is evident especially in the business customer segment. In Western Europe, only every fifth bill is paid late or is completely unrecoverable. In 2014, this figure was almost every fourth bill. Eastern European companies saw delayed payments and unrecoverable debt in B2B transactions drop from 29 to 26 per cent. Source: the Bulgarian Association of Debt Collection Companies (ACABG), 2015 Source: EOS Survey 2015: ‘European Payment Practices’, n = 2,495 2015 35 Eastern Europe For what reason would you take out a loan? Figures in per cent Source: EOS Debt Survey, 2015, n = 1,014/1,003/1,006 (D/USA/RUS) A house in the country, a new washing machine or plastic surgery – for what purposes do Germans, Americans and Russians take out loans? Do consumers in these countries differ in terms of what they want? In spring 2015, research company Icon Added Value looked into these and other questions as part of the first EOS Debt Survey. It emerged that the real value and long-term nature of purchases in all three countries play a major role when it comes to debt. For example, Americans, Russians and Germans are the most likely candidates to take out a loan to purchase property or a car. However, Americans and Russians are much more likely than Germans to take out loans for financial investments, holidays and everyday items. The respondents also told us what they believe society accepts least as a reason to borrow money. In Germany and the USA, respondents believe that society disapproves of loans for beauty treatments, whereas Russians show more tolerance for this kind of spending. There was widespread disapproval among all participating countries of applying for loans for clothing, jewellery, cash and money for leisure activities. Other 15.2 Non-bank finance industry 13.7 Banks 21.3 Insurance companies 1.5 Leasing companies 1.8 Utilities 14.1 Telecommunications firms 32.6 In Bulgaria, creditors from the telecommunications and banking sectors were responsible for the highest volumes of outstanding receivables assigned to professional debt collectors in 2014. However, their share of the contracted volume compared to the previous year fell from 40 to 33 per cent and from 38 to 21 per cent respectively. These are the findings of a survey by EOS Matrix and the 14 other member companies of the Bulgarian Association of Debt Collection Companies (ACABG; 75 per cent of the local market). ‘One reason for the lower share of outsourced claims is decreasing lending,’ explains Rayna Mitkova-Todorova, President of ACABG and Managing Director of EOS Matrix in Bulgaria. At the same time, the volume of providers’ outsourced receivables grew, as the industry is increasingly relying on external service providers. ‘The market is developing for professional debt collection services in Bulgaria. We expect a further growth in demand in 2015,’ says Ms MitkovaTodorova. 21 agile Staying Staying agile sumers to get in touch with us,’ explains Jana Soukupová, Marketing Manager at EOS KSI in the Czech Republic. On ‘My Debt,’ defaulting consumers can access a password-protected area to view their outstanding debt and find out about repayment options. The portal also provides a range of communication channels, including email, Skype and a call-back service, allowing consumers to easily talk to, email or chat with EOS KSI staff. Transparency strengthens trust Safe service: Paying debts at any time through the EOS USA consumer portal New dimensions for debt collection The new consumer portal in the USA has been online since March 2015. ‘Our clients’ customers visit the portal for three reasons: they want to make a payment, they want to contact us or they are looking for resources online,’ says Director of Marketing Ashleigh Slyker. The online payment option makes it easier for consumers to make debt repayments. ‘We encourage consumers to pay their debts online, but we do also offer them other payment methods,’ says Ms Slyker. The portal was designed with user-friendliness in mind. IT Manager Mark Zamaitis, who is responsible for the technical implementation of the portal at EOS USA, explains: ‘We focused on creating a portal that would be easyto-use, even for consumers who are less confident online.’ Ms Slyker adds: ‘Users can find what they are looking for on our site with just a few clicks.’ EOS KSI in Slovakia went live with its online consumer portal in June 2013. Now, consumers can get in touch with EOS via a range of chan- Czech Republic Slovakia USA I n the digital age, a growing number of consumers are keen to manage their debt online: they want to use the Internet to check how much they owe, obtain information about repayment options and get in touch with EOS at their convenience. Consumers are increasingly taking their finances online – in the European Union, 44 per cent of the population now uses the Internet for banking transactions. In 2007, this figure was just 25 per cent. In 24 the USA, 51 per cent of the population accesses banking services via the Internet. The more online banking becomes routine for consumers, the more likely they will to be to expect to manage their debt online too. EOS companies in the Czech Republic, Slovakia and the USA, for example, are meeting the evolving needs of consumers by developing their own Internet portals. The latest additions to online services for consumers in- clude the ‘My Debt’ platform developed by EOS KSI in the Czech Republic and the consumer portal created by EOS USA. These platforms are designed to offer a wide range of online services. In some cases, they are allowing consumers to settle their debts online. Furthermore they are providing information about EOS as well as answering questions about debt collection. ‘By introducing the portal, we want to make it as easy as possible for con- nels, check their outstanding debt and make payments. The service has generated a great deal of interest. ‘Each month, around 600 new users access our portal,’ says Marketing Consultant Mária Schmitzerová (see graphic). In the Czech Republic too, EOS KSI is pleased with the performance of its online service: ‘Feedback from consumers using the portal has been positive,’ Ms Soukupová notes. Online portals also help to make debt collection more transparent for consumers. ‘Transparency fosters trust. In turn, that trust encourages clients and consumers to work with us,’ explains Ms Soukupová. Slovakia: Online service is a hit with consumers Source: EOS KSI in Slovakia, reporting period: June 2013 to March 2015 Online financial transactions are part of global day-to-day business. Should debt collection follow this lead? EOS USA and EOS KSI in the Czech Republic and Slovakia show how the web can be used to engage with consumers. Understanding consumer requirements: Mark Zamaitis and Ashleigh Slyker from EOS USA Alongside its Facebook page and a Skype contact facility, EOS KSI in Slovakia has also been running a consumer portal on the Internet for the past two years. The company continually expands the portal, and the monthly stats below show just how successful the online platform for consumers has been. Monthly average 600 10,000 3,000 160 New visitors FAQ views Logins Payments Interested parties, clients or consumers accessing the EOS portal for the first time. The list of frequently asked questions is of interest to all visitors. Registered users can view and manage their debts. Payments can be made from within the portal in an entirely paperless process. Servicing debt faster As with online banking, data protection is an essential requirement for consumers using online portals. ‘We are continually developing our IT security systems, because protecting our clients’ data and their customers’ data is a top priority for us,’ emphasises Ms Soukupová. ‘It is through this ongoing work that we do justice to the confidence that our clients and their customers place in us.’ Not all debt collection processes can be managed online. ‘Some documents, such as reminders, must be sent to consumers in hard copy for legal reasons,’ explains Ms Schmitzerová. All EOS online portals satisfy the statutory and regulatory requirements for debt collection in that region. The range of online services is set to be expanded further in the future. ‘We are planning to roll out online live chat and text features,’ explains Ms Slyker. All of the teams are also keeping a close eye on the trend for smartphone web use. ‘The functionality of the portal on smartphones is one of the main areas we will be focusing on,’ Ms Schmitzerová says. Online debt collection could soon be as commonplace as online banking. And that benefits all parties: Defaulting customers are able to pay off their debts sooner and more easily as a result of the better service they receive. EOS can streamline its debt collection processes, while EOS clients benefit from more efficient receivables management and faster receipt of payment. 25 Staying Agile Skilfully crossing borders Aiming high: EOS simplifies international debt collection for its clients Growth in global exports The volume of global goods exports is growing steadily. For 2015 the World Trade Organisation (WTO) expects an increase of 3.3 per cent. 15 Global exports are on the rise. And workers are also increasingly moving between countries and continents. EOS is responding to these challenges and expanding its international debt collection. 14.1 12 9 5.5 6 3 0 A t first glance it appeared to be a good deal for both parties: a Polish airline leased a plane from an Italian competitor to cover a shortage in its fleet. However, once the plane was safely back with its owner, it became evident that the transaction had a catch: unlike as agreed in the contract, the Italians did not pay the deposit of 200,000 euros back. After ten months of negotiations to no avail, the Polish airline reached its limits and commissioned EOS KSI in Poland to recover the sum. ‘International debt collection is becoming increasingly important for companies,’ explains Romina Rosiello, Product & Cooperation Manager at the EOS Cross-border Cen ter. This central competence centre coordinates the processing of all cross-bor- Romina Rosiello: EOS is now providing clients with even more local contacts 26 Poland 10 11 2.4 2.5 2.8 12 13 14 3.3 4.0 15 16 Forecast lection on the continent. ‘However, they are not implemented in the same way everywhere. In Italy, for instance, many courts still have to get used to instruments such as the European payment order,’ says Ms Rosiello. ‘A foreign debt collection specialist would not be able to handle the communication with the judiciary on site on their own.’ Italy der debt collection cases from EOS Group clients. ‘In 2014 alone, EOS recorded an increase of 215 per cent in international debt collection compared with the previous year,’ reports Ms Rosiello. Settlement out of court Preferred partnerships Around 3,000 clients are already relying on the international expertise of the EOS Group. Many of them have large national debt portfolios and at the same time are looking for a service provider for their international cases. In the B2B sector, demand is increasing as a result of the growth of global goods exports (see chart). In B2C debt collection, it is becoming more and more frequent that companies have outstanding receivables from customers who have relocated within the European Union (EU). In order to offer an even better service to companies for cross-border debt collection, EOS has now created the alliance of ‘Preferred Partner of EOS’. ‘With these selected partners, EOS provides its clients with a local contact Source: World Trade Organisation (WTO), 2014, 2015 Annual growth rate in per cent in even more countries,’ says Ms Rosiello. This is of particular benefit to clients with subsidiaries in countries in which the EOS Group is not represented itself. ‘With a “Preferred Partner” these branches receive a service provider that supports them in their respective country to our high quality standards resulting in the EOS Group and its clients feeling closely connected. That is what our new approval mark guarantees,’ says Ms Rosiello. The ‘Preferred Partners’ have already been proving themselves for years within the network of carefully selected partners of the EOS Group. Using this network, the Group, which has its own companies in 26 countries, offers receivables management in over 150 countries. Up to now, the external partners only took on debt collection processing. The companies designated as ‘Preferred Partners’ are now also visibly operating under the EOS brand. Therefore EOS cooperates with them particularly closely. ‘Representatives of the “Preferred Partners” take part in our sales meetings, for example. Ultimately, they are equal partners within the EOS Group,’ explains the expert in international debt collection. Regions with high demand The ‘Preferred Partners’ go through a special audit. ‘EOS makes sure that these partners are amongst the top companies in the sector in their region. Generally, they offer a wide portfolio of products that is similar in scope to that of EOS subsidiaries,’ explains Ms Rosiello. Therefore the partners are experts in B2C and B2B fiduciary collection and, depending on local availability, also offer debt purchase, field service and skip tracing, which involves tracing debtors who have moved without providing notification. The first members of the new alliance cover countries in which EOS clients request services particularly frequently. Initially this includes Italy, Portugal and Turkey and will later incorporate regions in Asia. The partners support EOS with their regional expertise, for example with legal issues. This means they play to their strengths in contact with the local judiciary or in applying new legal procedures. An example of this is European default actions: these should facilitate and speed up cross-border debt col- The case of the Polish airline shows how the cooperation between EOS and its partners increases the chances of success in receiv ables management. Indeed, the debtor initially ignored the written and telephone requests for payment from the Italian partner Omniatel. Yet, when the debt collection specialist initiated a judicial procedure in coordination with EOS KSI in Poland, the opposing lawyer relented. His proposal: an out-of-court settlement. Lengthy negotiations followed, over the course of which Omniatel and EOS KSI were in continuous discussion. Thanks to their shared commitment, the two companies finally achieved a great result for their clients: ‘The parties agreed on eight monthly instalments. Since then, the debtor has paid on time,’ says Ms Rosiello with satisfaction. This example shows that even seemingly unsolvable cases can be brought to a successful conclusion with the right partners. 27 Staying agile T Correctly estimating assigned receivables: Reports that deliver an accurate evaluation o produce a high-quality beer, brewers need the best raw ingredients. But long before they can make money from their product, their barley and hops suppliers need to be paid. It is therefore customary for small and medium-sized breweries to cover the cost of their ingredients with a short-term loan. In return, the bank expects its customers to pledge securities. Often in such cases, small and medium-sized companies offer the assignment of receivables, i.e. outstanding customer payments, as collateral. It is a standard commercial practice but one that does carry a risk for banks. ‘Until now, it was difficult to assess these outstanding items. We didn’t know if the assumed value was actually the realisable value,’ explains Thomas Jakob, CEO of the Kreissparkasse Biberach in Germany. With more than 800 employees, the bank is one of Germany’s 40 largest savings banks. It serves small and medium-sized local companies in addition to private customers. In 2014, its customer lending volume amounted to 2.14 billion euros. Mr Jakob goes on, ‘The fact that it was difficult to assess receivables was not only disadvantageous to us but also to our customers, as we had to occasionally offer less favourable credit conditions.’ Integrating individual approaches Germany Uncover the real values EOS Deutschland, B2B business unit helps financial institutions to realistically evaluate assigned receivables. This service provides more security for loans. Those benefiting from this solution include the Baden-Wurttemberg Kreissparkasse Biberach in Germany and its customers, small and medium-sized local companies. 28 The solution: the Kreissparkasse Biberach now uses valuation reports for assigned receivables. ‘If customers offer banks or savings banks outstanding receivables as collateral, these reports provide us with an in-depth assessment of these items. As a result, the bank can apply a realistic value. This ensures greater lending security,’ says Stephan Spieckermann, Managing Director of EOS Deutschland, B2B business unit (see box). The Kreissparkasse Biberach and EOS both have a holding in Lux Kapitalmarkt Management AG, which performs capital market factoring for savings banks and produces valua tion reports for assigned receivables. The process is as follows: potential borrowers send successive outstanding items and information on defaulting payers electronically to the Sparkasse Biberach. The credit institution then commissions Lux to analyse the customer’s debts on the basis of these documents. Lux checks and structures the receivables with the support of EOS Deutschland, B2B business unit, considering a number of factors, such as: Which customers have the highest proportion of receiv ables? What kind of payment behaviour has this customer shown in the past? What is their credit rating? The answers to these questions help to gradually build a profile on individual customers, the overall receivables portfolio and the banking customer’s accounting system. The bank is left with a definite value in euros which it can then apply in its value calculations. The outstanding items are reassessed every quarter, as some debts will have been settled and others added. ‘Thanks to the ongoing re-evaluation of the portfolio, we can adapt the loan we offer to the company’s cashflow requirements,’ explains Mr Spieckermann. The banks also benefit: ‘The improved method for valuation of the receivables relieves the equity capital for the lenders. This is a decisive criterion by which they can meet the high security requirements of Basel III, for example.’ Export-focused companies benefit For Mr Jakob, there is another advantage: ‘The report gives us a good insight into the organi sational structure of our business customers. We have a sound basis for discussion and can point out problems and offer solutions. Our customers appreciate that.’ Handling assigned receivables with more flexibility Every loan has its associated risks for banks. To reduce these risks, the institutions request collateral from their customers as security. In the commercial sector, the pledging of receivables or the assignment of outstanding receivables is commonplace. If borrowers fail to meet their payment obligations, the bank can recover the assigned receivables. The catch is that it is difficult for banks to put a realistic value on outstanding items. This is where EOS Deutschland, B2B business unit, and Lux Kapitalmarkt Management AG can help, providing valuation reports that enable banks to accurately assess outstanding receivables and plan accordingly. Offering new solutions for businesses: Thomas Jakob, CEO of the Kreissparkasse Biberach Because an increasing number of small and medium-sized companies are also building relationships with companies abroad, country-specific knowledge is becoming a more and more important element of the process of assessing receivables. This is a major advantage of EOS Deutschland, B2B business unit, which belongs to the global EOS Group. ‘SMEs in Baden-Wurttemberg are exportfocussed. About 70 per cent of their receiv ables are linked to companies based overseas. In EOS Deutschland we have found a partner with in-depth knowledge of the international debt collection system,’ says Mr Jakob. Unique combination It is not only the professional evaluation of assigned receivables that sets this solution apart. For Mr Spieckermann, it is the interplay between two factors that makes a difference: ‘In addition to our evaluation services, we also offer recovery solutions. In other words, we are also in a position to collect the outstanding receivables if the client requires us to do so. We are currently the only provider in the entire market able to offer this kind of sophisticated, combined solution to our clients.’ 29 Staying agile Getting new services rolling Austria Stephan Steinmetz has been the sole Managing Director of EOS ÖID in Austria since the start of 2015. In this interview, he discusses new offers for clients, the challenges presented by planned changes to legislation and the future of the debt collection market in Austria. Now that your fellow Managing Director Herbert Biedermann has retired, the future of EOS ÖID rests in your hands alone. What key areas will you now be focusing on? As the sole Managing Director of EOS ÖID, I want to take the company into the future. The trust that EOS puts in me spurs me on to continually develop and supplement our range of products and services. Recently, for example, on behalf of our clients, we have been monitoring agreements with customers arising from court settlements. This work has largely been handled by law firms in the past. But we can add real value: If a customer fails to meet an agreed instalment, we can take immediate action as a debt collection specialist. We find a solution together with the defaulting customer, to ensure that the debt can be settled. Our ability to offer this is generating huge interest. We are also continuing to expand our online client portal, guaranteeing an even faster and more convenient flow of information. This level of transparency on payment processes and case management is valued by our clients. What key features define the debt collection market in Austria? The law surrounding the purchase of debt and recovery of receivables in Austria, as well as the legislation surrounding consumer and data protection, is very restrictive. For example, the law does not allow us to purchase receivables. Ongoing discussions with legislative bodies do not suggest any let-up in these strict conditions. Quite the opposite, in fact: currently under consideration is the lowering of debt collection charges and further regulation of the debt collection industry. 30 A mountain of files: Jochen Prinz (in the lorry) and his team unloading documents relating to the credit portfolio Lifting a mega project EOS Immobilienworkout in Germany specialises in assessing and processing property loans. After purchasing its largest portfolio to date, the company has successfully put its versatility to the test. Managing Director Stephan Steinmetz: Quicker flow of information What would be the consequences of further regulation? When engaging in political discussions, we always refer to the significance debt collection companies hold from an economic perspective. Without debt collection, prices would increase in all segments, as companies would have to factor in potential payment defaults to an even greater extent when pricing their products — regardless of whether that product is a bank account or an item of clothing. Additionally, the debt collection industry relieves some of the strain on the justice system in Austria. After all, every debt that is settled is one less case to appear in front of a court. How do you tackle the tough market conditions? EOS ÖID is respected for the high level of quality it delivers with its services and the marked success it achieves with debt collection. Using IT solutions developed specifically for us in areas like bookkeeping, we can respond to customer requirements in the shortest possible time. These requirements include modified invoicing processes or requests to provide assessments as to the chances of success. What’s more, the fact that we are part of the international EOS Group allows us to offer services across country borders. T o most people, large numbers are nothing more than abstract concepts. But the enormous proportions that a credit portfolio in excess of half a billion euros can take on is something that employees of EOS Immobilienworkout know all too well – since 18 December 2014, at least. This was the day when two double articulated lorries pulled up in front of the company headquarters in Duisburg, Germany. 45 Euro pallets holding a total of 1,500 boxes were unloaded. The contents of thousands of folders represents the most extensive portfolio EOS has ever acquired. ‘For the EOS Group, it is by far the largest transaction in this segment,’ says Jochen Prinz, Managing Director of EOS Immobilienworkout. But it is not only the sheer size of this transaction that has helped the company to break new ground with this portfolio. ‘We have demonstrated that we hold a strong position in two fields beyond our core business: in the purchase and sale of property and in the management of existing loans,’ says Mr Prinz. Signal to the market The company’s primary focus is still the purchase and fiduciary processing of non-performing loans secured against property. However, EOS is now also taking responsibility for managing and processing performing loans – in other words, loans that are being repaid correctly – through its subsidiary P+L Services and is acting as the owner of the debts. For the borrower, i.e. the owner of the property, nothing ultimately changes. They continue to be bound to the contract, but can also refinance or convert the loan should they wish to do so. In addition to receivables, property assets also form part of the portfolio. These assets can also be upgraded and sold on as required. Germany This is another secondary business for EOS Immobilienworkout, albeit one that is important. After all, it is EOS’ ability to offer this level of flexibility and provide all three services from a single source, that proved decisive for the party selling the portfolio. ‘By offering this trio of services, we are sending a clear and important signal to the market that we can resolve all of our clients’ problems,’ says Mr Prinz. Faced with this task, Jochen Prinz put together a team of 75 employees. ‘We brought together the various areas of expertise within the EOS Group and the parent company, the Otto Group.’ Without additional manpower, the 20 employees of EOS Immobilienworkout would not have been able to handle the huge project. ‘For us, it was never a question of whether we could achieve it, but how. I was thrilled by this team mentality,’ Mr Prinz says in summary. 31 Staying agile Poland Headquarters of BZ WBK in Warsaw: The credit institution transferred its receivables management operations to EOS KSI in Poland Switching sides A market undergoing change always opens doors. In Poland, Bank Zachodni WBK and EOS KSI have been working together to develop a unique outsourcing solution that benefits both parties. F Banking landscape in flux In a market undergoing rapid change, creative solutions such as these secure key advantages over competitors. This is particularly true of the dynamic economy in Poland. Through consistent reforms, the former Eastern bloc state has progressed to become a powerful member of the European Union. The fiscal and monetary policy measures introduced by the government, such as the actions to promote entrepreneurship, eliminate bureaucracy and modernise infrastructure, have all pursued one key goal: to increase competitiveness. And it’s not just politics that is changing. A number of companies and sectors are currently being restructured. The banking landscape in Poland serves as a good example in this regard. By embarking on mergers and acquisitions, expanding the range of services offered to cli32 Successful cooperation: Robert Pikuła from BZ WBK and Anna Paczuska from EOS KSI in Poland have been closely involved in the BPO ents and optimising costs, credit institutions are seeking to build up their shares of the market. ‘The economy in Poland is undergoing constant change. This level of dynamism requires us to think ahead and continually scrutinise our own processes so that we can quickly adapt to changing conditions,’ notes Robert Pikuła, Head of Recovery at BZ WBK. The credit institution took the merger it embarked on with a competitor at the beginning of 2013 as an opportunity to reassess its processes in the field of receivables management. ‘When taking over Kredyt Bank, we stepped back and considered the best action to take with the debt portfolio we had acquired – either handle it ourselves, sell it or task a service provider with the recovery work,’ says Mr Pikuła, describing the initial scenario. In order to find a solution to this problem, BZ WBK put its trust in a tried-and-tested method of management. ‘As a bank, benchmarking is part of our day-to-day work. The first step in securing continuous improvement is to measure yourself against the competition,’ Mr Pikuła explains. With this in mind, BZ WBK analysed the effectiveness of its own internal debt collection and recovery processes against that of outsourcing or selling the debts. ‘The results were in favour of outsourcing,’ Mr Pikuła notes. It was against this backdrop that EOS KSI in Poland attracted attention. ‘Following the takeover, we initially continued our involvement with the Kredyt Bank portfolio as part of the reorganisation. The debts were largely back payments from consumer loans, credit card transactions and account overdrafts in the private client sector,’ Ms Paczuska explains. Outstanding receivables at Polish credit institutions When markets are dynamic, the risk of defaults on bank loans increases. In Poland, the majority of overdue debts and bank loans belonging to customers outside the financial sector are overdue by more than 180 days. As such, the services offered by debt collection specialists are in great demand. Overdue receivables and loans Quarter 1 2014 Quarter 2 2014 Quarter 3 2014 Quarter 4 2014 Total volume in billion EUR 25,663 26,164 25,936 24,258 Up to 30 days 9,226 9,730 9,285 8,097 31 to 90 days 2,870 2,460 2,379 2,322 91 to 180 days 1,409 1,459 1,330 1,283 Over 180 days 12,158 12,512 12,935 12,550 For computational reasons, differences may arise in the rounding of figures. Source: Polish Financial Supervision Authority, 2/2015. Exchange rate between Pln/Euro: as at 13.04.2015 rom a brainwave to a solid solution: EOS KSI in Poland is now working together with one of the country’s largest banking groups. In December 2013 the debt collection specialist took over an entire department of Bank Zachodni WBK (BZ WBK), which belongs to the Santander Group, as part of a business process outsourcing (BPO) arrangement. There, the staff are responsible for the entire receivables management chain of their former employer, forming their very own unit. ‘Working together is enabling us to build up our presence in the banking sector, secure exclusive access to receivables portfolios and boost our skills and expertise in bank-specific receivables management, as our new colleagues possess vast experience in this area,’ says Anna Paczuska, Managing Director of EOS KSI in Poland. No standard solution However, it soon became apparent that the partnership had to be expanded to include the debt portfolio from the two banks, including the B2B sector of small and medium-sized businesses. ‘During the optimisation process, it became clear that we did not want to adopt a standard solution for outsourcing, given the sheer size of the portfolio. In fact, outsourcing the debt collection department as a whole offered the greatest benefit,’ Mr Pikuła says. When seeking a partner for this BPO arrangement, EOS KSI was an obvious candidate. ‘As an international player in this sector, EOS can draw on its many years of global experience and is established as a purchaser of debt on the debt collection market in Poland. As a result of the way it is structured, EOS is both professional and extremely effective in how it goes about its work, delivering the optimum results in this non-standard situation.’ For Mr Pikuła, this ensures higher revenues where debt is concerned and makes it possible for the company to concentrate on its core business and put its own resources to more efficient use. Complex transfer The fact that the two companies already knew each other well as a result of the trusting relationship they already shared made the transfer much easier, as well as the work to plan the process in detail. ‘The incorporation was a complex task that we ultimately performed in stages,’ Ms Paczuska notes. In month one, the new staff got to grips with the formalities and processes in place at EOS KSI in Poland, as well as the values of the EOS Group as a whole, through a series of workshops. From a technical perspective, the integration process was approached with a certain degree of caution. ‘As ensuring the security of client data is our top priority, we decided to migrate the data on a gradual basis. Our colleagues therefore operated the bank’s systems from their old workstations for the first few weeks,’ Ms Paczuska says. Since then, all data has been successfully and securely transferred to the IT infrastructure in operation at EOS KSI in Poland. By embarking on the BPO project, EOS KSI in Poland has laid the foundation for further transactions of this type. ‘There are a number of new takeovers on the horizon in the banking sector in Poland. BPO arrangements could offer real opportunities in this area,’ Ms Paczuska says. 33 Staying Agile ‘The largest individual company within the Otto Group in the non-retail sector’ Figures, data, facts Petra Scharner-Wolff was appointed the new Otto Group Executive Board Member for Finance on 1 June 2015. Ms Scharner-Wolff joined the Advisory Board of the EOS Group in December, replacing long-standing member Jürgen Schulte-Laggenbeck. Here she discusses her new role, the challenges it presents and her vision for the company. Otto Group must now push ahead into a digital future if it wants to retain its position in the markets in which it operates. The speed of this development is remarkable. That is a major challenge, but also an exciting one. Petra Scharner-Wolff: Understands how EOS can capitalise on the digital transformation Ms Scharner-Wolff, the focus of this year’s edition of our annual report ‘Insights’ is on ‘agility’: Do you consider yourself to be agile? Absolutely, particularly when it comes to agility of the mind. I think that shows in my CV: I have taken on a number of different roles within the Otto Group over recent years, most recently working as Member of the OTTO Management Board for HR, Controlling and IT, but also as Director of Group Controlling Affiliates and as a Member of the Executive Management Board of the Schwab Group in previous roles. 34 In all of these roles, I have been faced with new subject areas, conditions and people. I have switched from taking a Group-wide view to taking responsibility for operational affairs, and also moved to different geographic locations. I am extremely grateful for all of these opportunities, after all, change ultimately means development. Change is good for an individual – and part and parcel of life at the Otto Group. In what way? As is the case for all successful companies, the You have been a Member of the Advisory Board of the EOS Group since 1 December 2014. Has that also been a challenge for you? Yes and no. Ultimately, it is a role that I relish. As my expertise is in financial matters, I have been able to get to grips with life at EOS very quickly. The Group is in an excellent position: when it comes to analysing and assessing debts and delivering process quality on an international level, EOS is among the top players in the industry worldwide, and its IT infrastructure reflects this. Alongside this, the management team is focusing on leading the Group into the future. The key term here is business intelligence; in other words, analysing data in a logical and systematic manner. We need to draw out the benefits that come with knowledge of particular markets, and the business strategies derived from this, more clearly for our clients. I can provide support from the parent company in this regard; after all, this is something that all of the companies within the Otto Group are working towards. Let’s look ahead to the year 2020: How significant is EOS for the Otto Group? My vision is for EOS to become the largest individual company within the Otto Group in the non-retail sector. 2014/15 36 Development The results of EOS Consolidated over the reporting period are slightly above the planned figures. The company was also able to maintain and meet its ambitious target for sales and earnings before tax. 40 Figures In the 2014/15 financial year, EOS generated sales of 566.9 million euros. 35 Development Solid business development EOS Consolidated was able to maintain healthy results in the 2014/15 financial year, generating sales of 566.9 million euros. Earnings before tax (EBT) were slightly above the planned figure at 125.8 million euros. E Sales development by region EOS Consolidated maintained a high level of sales in the 2014/15 financial year, delivering on its ambitious target. 2013/14 2014/15 32,770 23,862 84,240 83,063 97,868 96,579 102,583 99,810 292,608 260,852 In thousand EUR Germany Western Europe 36 Eastern North Europe America Asia/ Brazil OS Consolidated once again demonstrated considerable stability in the 2014/15 financial year, with business developing favourably overall. Results viewed over a five-year period show a clear increase in sales and earnings before tax. Despite growing competition and increasing price pressure, EOS has continued to achieve international success in its core segment of receivables management. Over the reporting year, EOS Consolidated achieved earnings before interest, taxes, depreciation and amortisation (EBITDA) of 157.1 million euros. Earnings before tax (EBT) remained at a healthy level, slightly exceeding the planned figure. At 125.8 million euros, this was the third year in a row that this figure exceeded the 100-million-euros mark. The decline of 14.2 per cent compared with 2013/14 was expected, as that year saw the company post an extraordinary record result. EOS Consolidated was also able to maintain a healthy level of sales, delivering on its ambitious target by posting a figure of 566.9 million euros. The company secured a slight increase in sales compared with the previous year in the region of Western Europe. Investment in debt purchases remains at a pleasingly high level, but below the extremely high figure achieved in the previous year, as expected. Germany: Increased investment After an initial period of stagnation, business performance in Germany picked up in 2014 in the second half of the year, delivering a pleasing result. According to statistics from the Kiel Institute for the World Economy (IfW), gross domestic product (GDP) rose at a considerably stronger rate than in the two preceding years, increasing by 1.6 per cent. Boasting a share of sales of 46 per cent, Germany remains the most important market for EOS Consolidated. As expected, in the 2014/15 financial year, sales were slightly below the extraordinary figure achieved in the previous year, sitting at 260.9 million euros. EBT dropped less sharply than expected in Germany compared with the previous year. The decrease was largely due to work to integrate EOS SAF Forderungsmanagement GmbH, a company acquired in the previous year. EOS Consolidated also profited from its many years of experience and solid reputation in the year under report. In particular as a result of acquiring an extensive portfolio secured against property, the company was once again able to increase investment in debt purchases in the key market of Germany. However, due to aggressive pricing on the part of the competition, the increase was ultimately more moderate than planned. A pleasing result: EBT and sales from EOS Consolidated are in line with planned figures In the area of receivables management, earnings before tax were in line with planned figures. As expected, the decrease compared with the previous year is attributed to the work carried out over the course of the 2014/15 financial year to migrate the debt purchases of EOS SAF Forderungsmanagement GmbH to EOS’ own debt collection systems and processes. ‘EOS is looking back on another successful year – that is an impressive team achievement.’ Hans-Werner Scherer, Chairman of the EOS Group’s Board of Directors Western Europe: Expectations exceeded The economy in the eurozone weakened over the past year. According to figures from the IfW, the GDP in the eurozone grew only slightly, by 0.9 per cent. The sales and results achieved by EOS Consolidated in Western Europe were consider- ably healthier than expected. Business in France and Belgium in particular remained stable, with sales staying at a high level overall. EOS has positioned itself as a leading debt purchase provider in these countries. Sales from EOS Consolidated in Western Europe totalled 102.6 million euros over the past year, exceeding the figure achieved in the previous year by 2.8 per cent. Results were also above the figure from the previous reporting year, which is a pleasing development. EOS Consolidated commenced business operations on the Scandinavian market on 1 March 2014 with the founding of EOS Danmark. The company achieved instant success in terms of debt purchases upon entry into the market, securing a considerable sum. What’s more, the company also succeeded in acquiring its first fiduciary clients. In the year under report, the company posted moderate starting losses. The volume of debt purchases in Western Europe fell slightly compared with the 2013/14 financial year. Eastern Europe: Knock-on effects of the Ukraine crisis In the region of Eastern Europe, the business situation is more dependent on the rapidly changing economic factors and level of political stability than ever before. Poland and EOS Consolidated sales by region Boasting a 46.0 per cent share of overall sales for the company, Germany remains the most important regional market. North America 14.7 % Asia/Brazil 4.2 % Germany 46.0 % Western Europe 18.1 % Eastern Europe 17.0 % 37 Development A real boost: The region of Western Europe secured an unexpectedly high increase in sales ‘We are continuing to develop with reliability and stability. That is something our clients value about us.’ Justus Hecking-Veltman, Member of the EOS Group’s Board of Directors and Chief Financial Officer 38 EOS Consolidated will continue to pursue its goal of retaining or achieving a top 3 position in all established markets with the exception of the USA over the coming years. After the closing date for the 2014/15 financial year, EOS Consolidated took over Swisscom subsidiary Alphapay AG, which is based in Zurich, Switzerland, on 30 April 2015, entering into a long-term service contract with Swisscom. The company offers receivables management for various client groups, focusing in particular on telecommunications receivables. Reporting period: 01.03.2014 to 28.02.2015 2,844 2013/14 2014/15 Nominal amounts in million EUR 2,526 EOS Consolidated is ramping up its purchase of receivables portfolios in Germany and in the region of North America. 294 Top 3 position in all established markets Debt purchase volumes by region 1,802 The market environment in China continues to present challenges. The debt collection market in China is characterised by excessively long payment deadlines, a lack of efficiency with regard to regulating late payments and a need for transparency from the courts. EOS CreditCN Credit Management, which was founded at the start of 2011 in collaboration with CreditCN Business Consulting Ltd., is set to be liquidated in 2015. Sales from EOS Consolidated in the region of Asia were below expectations, with a significant drop of 18.4 per cent. Restructuring costs also had a negative impact on the results for the past financial year. The level of growth seen in Brazil, a region that was previously booming, has tailed off considerably since 2012. In 2014, the level of growth was virtually non-existent. One key focus will continue to be debt purchase. Over the 2015/16 financial year, EOS Consolidated plans to make significant investments above the level achieved in the year under report. In addition, the company aims to further establish itself as a competent partner in the field of business process outsourcing (BPO), in other words the purchase of entire debt collection departments from larger companies. BPO activities, as seen in Spain, for example, with SAF Forderungsmanagement GmbH, or the acquisition in Switzerland, are also set to contribute to the success of EOS going forward. By offering high-quality services in the field of receivables management, for example in the cross-border processing of debt collection cases for major international clients, EOS Consolidated is striving to continue building on its leading position on the market over the next few years and beyond. 0 After a cautious year in 2013, the economy in the USA witnessed an upturn in 2014. According to figures from the IfW, the country’s GDP rose by 2.4 per cent, and unemployment fell. At 83.1 million euros, sales for EOS Consolidated in North America almost matched the healthy level achieved in the previous year over the year under report. The results achieved by the subsidiaries in the USA were also in line with the excellent performance of the previous year. Asia/Brazil: Reduced business volumes and restructuring costs EOS Consolidated was unable to live up to expectations for the past financial year in the region of Brazil. Sales fell below the level achieved in the previous year for the second time in a row, and were down by 8.7 million euros. The key reason for this decline is the considerable losses seen in business volumes from existing clients. Even new business was not able to boost sales figures to the extent anticipated. 1,073 North America: Up on planned figures In Canada, EOS Consolidated saw a moder ate increase in sales over the 2014/15 financial year. 308 285 euros to 96.6 million euros. The level of investment in debt purchases in the region also fell. The level of investment in Russia fell more sharply than originally planned as a result of the political and economic conditions arising from the crisis in Ukraine. Business results from the subsidiary in Slovakia were more positive. In Romania, sales and overall results increased considerably as a result of the solid performance achieved by the subsidiary. 734 875 Slovakia continued to benefit from their close ties with Germany, achieving positive rates of growth. In Ukraine, the conflict that began in Eastern Ukraine in 2013 has had a negative impact on economic development and the level of unemployment in the country. According to figures from the IfW, Russia’s GDP grew slightly in 2014, despite the sanctions imposed by the European Union, the drop in oil prices, the decline in the value of the rouble and the increased inflation that came as a result. However, at the end of the year, the economic situation in the country deteriorated considerably. Greece saw its first signs of an upward trend in 2014 after many years of recession; however, these positive signs ebbed away again at the end of the year. Over the 2014/15 financial year, EOS Consolidated was not able to build on the extremely positive business results achieved in the region of Eastern Europe in the previous year as planned. As a result of drops in sales and worsened results in Russia, EBT was well below the level achieved in the 2013/14 reporting year. Sales dropped by 1.3 million Germany Western Eastern Europe Europe* North America EOS Consolidated *In Eastern Europe, mix of principle debts and secondary debts where necessary 39 Figures Results in figures Sales by region Overall, sales for EOS Consolidated dropped slightly more than expected over the 2014/15 financial year, falling by 40.4 million euros. The ambitious sales target was achieved, as was the target for earnings before tax. In the region of Western Europe, EOS Consolidated was able to secure a slight increase in sales compared with the previous year. Sales in Germany and in Asia/Brazil fell considerably. Stability confirmed: EOS Consolidated was able to maintain a high level of sales in the 2014/15 financial year, generating 566.9 million euros. In the 2014/15 financial year, EOS Consolidated posted sales of 566.9 million euros, achieving its ambitious target for both sales and earnings before tax (EBT). Proven agility: The results achieved are in line with the ambitious targets set 2014/15 Comparison with previous year in % EUR (000) 2013/14 % in sales EUR (000) % in sales Germany –10.9 260,852 46.0 292,608 48.2 Western Europe +2.8 102,583 18.1 99,810 16.4 Eastern Europe –1.3 96,579 17.0 97,868 16.1 North America –1.4 83,063 14.7 84,240 13.9 Asia/Brazil –27.2 23,862 4.2 32,770 5.4 EOS Consolidated – 6.6 566,939 100.0 607,295 100.0 Profit and loss account (summary) EOS Consolidated volume of debt purchases Employee development in terms of headcount In the 2014/15 financial year EOS Consolidated once again acquired a high total volume of receivables portfolios. EOS Consolidated saw a slight decrease in the number of employees, with a headcount of 8,817 worldwide (as at: 28.02.2015). Nominal amounts in million EUR 3,773 9,185 2,844 9,585 9,173 40 2012/13 2013/14 2,526 2014/15 2011/12 2012/13 2013/14 2014/15 EUR (000) 2013/14 EUR (000) Sales 566,939 607,295 Total operating income 580,427 621,086 Earnings before interest, taxes, depreciation and amortisation (EBITDA) 157,146 176,791 Earnings before tax (EBT) 125,830 146,663 Profit for the year 107,077 137,753 8,817 1,717 2011/12 EOS Consolidated secured a profit of 107.1 million euros in 2014/15. The drop in operating income of 40.7 million euros is only partially compensated for by a reduction in other operating expenses. The figure for these expenses has dropped by 21.3 million euros. Personnel costs are approximately on a par with the previous year, having reduced by 0.2 million euros. The scheduled depreciation of intangible and fixed assets dropped by one million euros, while unscheduled depreciation increased by 0.5 million euros. The financial results are characterised by a worsening of other financial results, which are only compensated for in part by the reduction in interest paid and increased interest income. The other financial results relate primarily to the depreciation of shares in associated companies and joint ventures, as well as exchange rate losses. 2014/15 41 Publication details Figures Published by EOS Holding GmbH Corporate Communications Steindamm 71, 20099 Hamburg, Germany Phone: +49 40 2850-1222 Fax: +49 40 2850-1551 www.eos-solutions.com Assets position Total assets for EOS Consolidated remained virtually unchanged in the 2014/15 financial year, at 1.1 billion euros. 28.02.2015 28.02.2014 EUR (000) % EUR (000) % Fixed assets 160,619 14.8 161,092 14.8 Other assets tied up in the long term 510,905 47.3 536,613 49.3 7,764 0.7 7,583 0.7 401,915 37.2 382,372 35.2 1,081,203 100.0 1,087,659 100.0 Deferred taxes Assets tied up in the short term Total assets Contact EOS Holding GmbH Lara Flemming (Overall responsibility) Head of Corporate Communications & Marketing Email: [email protected] Laya Moghaddam (Project management) Senior Public Relations Consultant Email: [email protected] Editorial content Berit Ewald, Lara Flemming, Laya Moghaddam JDB MEDIA GmbH, Schanzenstraße 70, 20357 Hamburg, www.jdb.de Kathy Günther (Project management), Mira Chopra, Björn Dethlefs, Ulrike Feldhusen, Martin Hintze, Ulrike Maris, Anne Renzenbrink, Charlotte Reuscher Design JDB MEDIA GmbH Claudia Schiersch (Creative director) Steffi Georgi (Project management), Sandra Haberlandt Proofreading and translation SDL Multilingual Services GmbH & Co. KG, www.sdl.com PAEN Language Services, www.paen.net Wieners+Wieners, www.wienersundwieners.de/en Equity and financing The EOS Consolidated equity ratio increased over the 2014/15 financial year to 32.3 per cent. This con tinues to be a very high value for a financial services provider. Development on the financial side is characterised by the shift in short-term liabilities towards credit institutions as well as the planned amortisation of these liabilities. These factors are partially offset by reverse developments in financial liabilities towards people and companies with close links to the business. In addition, the level of generated equity increased due to the good results in the financial year. 28.02.2015 EUR (000) natureOffice.com | DE-607-382324 print production 28.02.2014 % EUR (000) % Equity 348,793 32.3 334,002 30.7 Long-term borrowed capital 209,792 19.4 248,588 22.9 3,727 0.3 7,499 0.7 518,890 48.0 497,570 45.7 Deferred taxes carbon neutral The wood used for this paper comes from responsibly managed forests, certified compliant with the guidelines of the Forest Stewardship Council® (FSC®). Creation JDB MEDIA GmbH, Andreas Bahnsen Image credits Photographer: Sebastian Vollmert Images: Adrian Weinbrecht/Cultura/Getty Images (p. 28), Dariusz Iwanski (p. 32), EOS (p. 20), Hybrid Images/Cultura/Corbis (p. 37), Ingo Boelter (p. 26), Mariusz Forecki (p. 32), Pablo Castagnola (p. 19), PR (p. 29, 33, 34), Paul300/iStock.com (p. 27), Robert Daly/OJO Images/Getty Images (p. 38), Sandro Bisaro/Moment Open/Getty Images (p. 11), Sebastian Vollmert (title, p. 02, 03, 04, 05, 06, 07, 08, 09, 10, 11, 12, 13, 14, 15, 17, 18, 22, 24, 25, 30, 31, 40), wildpixel/iStock.com (p. 11) Graphic editing: JDB MEDIA GmbH Date of publication: 17 August 2015 Short-term borrowed capital Total financing 1,081,203 For computational reasons, differences may arise in the rounding of figures in tables and text. 42 100.0 1,087,659 100.0 Disclaimer of warranty This report contains statements relating to the future which are based on assumptions and estimates by the company management. Although the management assumes that these anticipatory statements are realistic, it cannot guarantee that the expectations will turn out to be correct. The assumptions can involve risks and uncertainties which might result in the actual results deviating significantly from the anticipatory statements. If the report contains editorial mistakes or is incomplete in some respects, EOS Holding GmbH shall assume no liability or guarantee for this. EOS Holding GmbH has made no plans for any update of the anticipatory statements or any correction of, or addition to, the annual report and shall accept no obligation to do so. EOS Holding GmbH nevertheless reserves the right to update the report at any time without making any specific announcement. In the event of contradictions between the German and English versions of the annual report, the German version shall take precedence. Person responsible according to German Press Law, § 55 para. 2 Interstate Broadcasting Agreement (RStV): Lara Flemming, EOS Holding GmbH, Steindamm 71, 20099 Hamburg, Germany EOS worldwide Austria Belgium Bosnia and Herzegovina Brazil Bulgaria Canada China Croatia Czech Republic Denmark France Germany Greece Hungary FYR Macedonia Netherlands Poland Romania Russia Serbia Slovakia Slovenia Spain Switzerland United Kingdom USA EOS IN AMERICA EOS Canada Inc. (EOS NCN) (Canada) EOS CCA (USA) EOS Healthcare (USA) EOS HOEPERS (Brazil) EOS USA (USA) EOS IN WESTERN EUROPE Alphapay AG (since 1 May 2015) EOS Aremas Belgium SA/NV (Belgium) EOS Credirec S.A.S. (France) EOS Danmark A/S (Denmark) EOS Nederland B.V. (Netherlands) EOS ÖID Inkasso-Dienst Ges.m.b.H. (Austria) EOS Schweiz AG (Switzerland) EOS Solutions UK Plc (United Kingdom) EOS Spain, S.L. (Spain) Zahnärztekasse AG (Switzerland) EOS IN GERMANY Bürgel Wirtschaftsinformationen GmbH & Co. KG EOS Deutscher Inkasso-Dienst GmbH EOS Deutschland GmbH EOS Field Services GmbH EOS Health Honorarmanagement AG EOS Immobilienworkout GmbH EOS Investment GmbH EOS IT Services GmbH EOS KSI Inkasso Deutschland GmbH EOS SAF Forderungsmanagement GmbH EOS Serviceline GmbH EOS SID Süddeutscher Inkasso-Dienst GmbH P + L Services GmbH Schober Direct Media GmbH + Co. KG WCF Finetrading GmbH EOS IN EASTERN EUROPE EOS 1 Fundusz Inwestycyjny Zamknięty Niestandaryzowany Fundusz Sekurytyzacyjny (Poland) EOS & M. Witoń Kancelaria Prawna spółka komandytowa (Poland) EOS Faktor Magyarország Zrt. (Hungary) EOS Finance IFN S.A. (Romania) EOS Investment CEE GmbH (Russia) EOS Investment Ceská republica s.r.o. (Czech Republic) EOS Investment Poland GmbH (Poland) EOS Investment RO GmbH (Romania) EOS KSI Česká republika s.r.o. (Czech Republic) EOS KSI Magyarország Inkasszó Kft. (Hungary) EOS KSI Polska Spółka z o.o. (Poland) EOS KSI România S.R.L. (Romania) EOS KSI Slovensko, s.r.o. (Slovakia) EOS KSI Upravljanje terjatev d.o.o. (Slovenia) EOS Matrix d.o.o. (Bosnia and Herzegovina) EOS Matrix d.o.o. (Croatia) EOS Matrix d.o.o. (FYR Macedonia) EOS Matrix d.o.o. (Serbia) EOS Matrix OOD (Bulgaria) EOS Matrix S.A. (Greece) EOS SERVICES LTD (Bulgaria) EOS Slovensko Investment LC, s.r.o. (Slovakia) LLC EOS (Russia) VPF I Fundusz Inwestycyjny Zamknięty Niestandaryzowany Fundusz Sekurytyzacyjny (Poland) EOS IN ASIA EOS Hong Kong Ltd. (China) As of: August 2015 EOS Holding GmbH Steindamm 71 | 20099 Hamburg | Germany Phone:+49 40 2532-8657 Fax: +49 40 2532-8658 www.eos-solutions.com