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: l.flemming@eos-solutions.com
Laya Moghaddam (Project management)
Senior Public Relations Consultant
Email: l.moghaddam@eos-solutions.com
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