Annual and Sustainability Report 2022/23

The EOS Group is a leading investor in receivables and real estate portfolios and an expert in processing open receivables. Our more than 6,000 employees in 24 countries practice data-driven receivables management and provide intelligent services for the benefit of our customers, partners and consumers. For more than 45 years, we have secured the cash flow of companies so they can focus on their core business. GRI 2-6

The 2022/23 fiscal year was marked by uncertainty as war, inflation and the energy crisis dominated economic and social life. When the fiscal year began, it was not expected that the EOS Group would generate such extraordinary earnings, according to Marwin Ramcke, Chairman of the Board of Directors: “Our employees’ many years of expertise and their commitment made this development possible. We are more than 6,000 individuals with our own experience, abilities and cultural backgrounds. As a team, we can achieve a great deal.” Success is attributed to our focus on the purchase of receivables portfolios and the continuous development of digital tools that have improved our operational performance and promoted synergies between the EOS companies.

Extraordinary growth reported. Compared with the previous fiscal year, EOS Consolidated greatly increased its earnings (EBITDA) and revenue in 2022/23.

New and familiar partners, newly established business locations and a clear increase in NPL purchases. Some particularly impressive developments in the past fiscal year:

Day by day, we work to change things for the better. We are successful in business because we embrace change and take responsibility for all we do. We change things for the better for our clients and employees, but also for consumers, our industry, and society.

Sustainability is an integral part of our corporate responsibility (CR). I am especially proud that we have turned our CR strategy into action and have expanded our reporting since the launch in 2020. We took another step in 2022 when we identified key CR topics by conducting a first materiality analysis. This year for the first time, this section of our combined Annual Report and Sustainability Report is based on the standards of the Global Reporting Initiative (GRI) and the United Nations Sustainable Development Goals (SDGs). Reporting our activities in the context of these standards and goals makes our contributions even more transparent.

As a financial services provider, we consider sustainability as more than just environmental protection. Our special concerns are divided into four fields of action within our CR strategy. In this section, we explain how we meet the standards in the fields of "Responsible Collection", "Joint Progress", "Environmental Protection" and "Financial Sustainability". These four fields of action also structure this section.

I thank all colleagues who contribute daily to making EOS an economically successful business with a firm commitment to sustainability. Always intent on becoming a little bit better.

Marwin Ramcke, Chairman of the Board of Directors

GRI 2-22

Our responsibility extends to many different areas. As an international financial services provider, we focus on social responsibility and corporate governance. We want to change things for the better. In working toward our goal, we have defined four fields of action in our corporate responsibility strategy:

In collaboration with internal and external experts, EOS further developed its CR strategy and created a materiality matrix in 2022. The matrix below shows the material topics from the EOS corporate perspective (x-axis) and from the viewpoint of our external stakeholders (y-axis). It constitutes the foundation for the future direction of the EOS sustainability strategy.

EOS stands for fair debt relief for consumers. In keeping with our claim, “Changing finances for the better”, we support defaulting payers become debt-free. We develop fair payment plans that are economically feasible for everyone involved and also find solutions for consumers whose personal circumstances present special challenges. 

Respectful communication is key to our approach. This summer we will roll out an international, Group-wide policy that standardizes our respectful and ethical treatment of defaulting consumers. The policy obliges us to use easy-to-understand language, to speak tactfully and to assume responsibility for our words and actions. 

With technological innovations, we simplify the payment process for consumers. We provide service portals and chatbots that let consumers manage their payments independently, without having to contact us directly. However, consumers who prefer personal contact can turn to our qualified staff members for suitable debt relief options. To further improve the user experience, we offer consumers their personally preferred payment methods suggested by our data analysis. We continuously improve our services on the basis of feedback, which is collected through surveys, for example.  

Technological progress, an important driver for EOS, prepares us for the future. We use data analyses and artificial intelligence to change the finances of clients and of defaulting consumers for the better. Personalized payment plans and intelligent chatbots help in this process. Our goal is to offer clients and consumers Group-wide a fully digital process tailored to their needs.

In 2022 the Data & Analytics Hub (DAH) reorganized. It bundles the national and international analytics competence of EOS. “In the Data & Analytics Hub, our colleagues link data and AI support to make recommendations or decisions,” says DAH Director Jakob Spitzer. Defaulting consumers benefit, for instance, by being approached in the way best suited to them personally. So that analyses can be made on an even larger scale in the Cloud, the data pipelines that join the Kollecto+ debt collection software to the Hub are being expanded. Learn more about Kollecto+ here.

It is our goal to strengthen financial literacy in society as a way to counteract excessive private debt.

The study “Europeans in Financial Trouble?” EOS Consumer Study 2023 clearly shows that young people between the ages of 18 and 34 would like to receive more financial education and instruction on how to deal with money properly. Nearly one in 10 in this age group is convinced that lack of financial knowledge is one reason people take on new debt.

As a way to teach future generations about finances, the finlit foundation was launched by staff members of the EOS Group in 2019. The non-profit organization shows children and adolescents how to handle money properly and thus helps them to avoid excessive personal debt. ManoMoneta, finlit’s first education initiative, targets children aged 9 to 13, is active now in schools in several European countries. “OhMoney”, a second initiative started recently in Germany is aimed at adolescents between 13 and 17 years of age. The idea is to provide students and their teachers with creative, engaging content on financial topics relevant to their everyday lives and to guide the students on their way to financial independence.

At the same time, e.g. EOS in Romania, Slovenia and Croatia became actively involved in other initiatives for adolescents and adults that include course offerings in schools, teaching videos and participation in the Winter Finance School for teenagers. GRI 413-1

As an international group, EOS promotes diversity in its ranks. We are pleased, therefore, when employees establish and become actively involved in communities. In the Diversity & Inclusion Board, we have a structural framework for coordinating initiatives and providing strategic direction for diversity.

We think it is important to convey knowledge about diversity and inclusion. In April 2023 we launched “Breaking Down Barriers & Unconscious Biases: A learning path on Diversity & Inclusion” for the EOS Group on the Masterplan online platform. It contains videos to teach employees the significance of diversity and inclusion in the workplace and to help them develop strategies for an integrative, welcoming and successful work environment. The course is open to all employees and is compulsory for managers and HR staff. Workshops will be added to the online offering shortly.

The community Queer@EOS has published a Transidentity Guide in collaboration with Otto’s queer network MORE*. It offers support to employees during and after their transition. For example, trans colleagues can change their name within the EOS group with little effort. The guide serves as a source of information for colleagues and managers looking for answers to trans gender-related questions.

We want to position ourselves as an attractive employer, retain committed employees for the long term and offer them growth opportunities. To that end, the EOS Group launched numerous offerings and initiatives. One example is the international NXT talent management program in which 92 talented employees from 17 countries participate, receive targeted support and network within the group.

EOS is particularly interested in empowering employees and creating a positive and collaborative work environment for them. The Group-wide Masterplan learning platform gives employees access to a large selection of training material that they can put together according to their personal needs. Colleagues have convenient access to all offerings from home offices and can learn independently anywhere. GRI 404-2

Data usage is fundamental for the business of the EOS Group. We handle data responsibly and continuously improve our processes and systems in order to protect it. Some 90 employees Group-wide work in data protection and information security.

Monitoring tools allow us to detect attacks early and stop them. Right now, an even more extensive international protection system is being set up as part of the new Iron EOS program in which experts and tools ensure the safety of all national subsidiaries. “Iron EOS will put us in a position to react quickly throughout the Group,” says Gunnar Woitack, Chief Information Security Officer.

The EOS Group advocates strong, binding industry standards and responsible guidelines for the debt collection industry. To help define these standards, we are actively involved in several European debt collection associations and in numerous initiatives. GRI 2-28

To emphasize that we take our corporate responsibility seriously, we joined the United Nations Global Compact, which encourages companies worldwide to pursue and support sustainable and responsible business practices. As a member, we support the 10 UN principles concerning human rights, labor, anti-corruption and the environment. GRI 2-23

To counteract violations or undesirable developments, the EOS Group operates a platform that offers whistleblowers a protected space and is integrated in the mechanism of the Otto Group. Here, employees, as well as suppliers, service providers or clients can report compliance violations at EOS and the Otto Group. The platform helps us make improvements and eliminate grievances. GRI 2-25, 2-26

The business with non-performing loans requires a large measure of responsibility. Therefore, EOS applies strict, defined criteria when making decisions about taking on partners and clients.

One example is our cooperation with the Worldbank subsidiary International Finance Corporation (IFC), the largest global development bank. Within three years in conjunction with the bank, EOS will invest more than EUR 100 million in non-performing loans and real estate in Eastern Europe in compliance with ESG (Environmental, Social and Governance) standards.

Additionally, we make sure our pricing is sustainable and satisfies the business concerns and ethical standards of all parties. As part of a family business, the Otto Group, we focus on the long term and carefully assess all risks.

We choose our business partners according to defined criteria too and use our industry blacklist for that purpose.

As standard practice, we check how our partners and companies deal with human rights and issues such as money laundering, corruption and other criminal acts. We also make sure they comply with all sanction lists. Moreover, we do not work with companies engaged in pornography or prostitution, online gambling, subscription scams or untrustworthy microlending.

To ensure fair dealings with and by suppliers, EOS is currently working on a Code of Conduct for Service Providers that contains SDGs and regulations from the Supply Chain Due Diligence Act. GRI 2-23

We are guided by high standards in our own actions and expect our partners in the cross-border business to uphold them as well. To this end we offer training right at the beginning of our collaboration and visit our partners on site during the onboarding process to get a clear picture of their operations.

Together with the Otto Group, EOS is working on reducing emissions to net zero in the long run. The Otto Group is currently developing a science-based climate goal (based on the Science Based Targets Initiative, SBTi). The joint climate protection strategy is to fully comply with the 1.5-degree Celsius goal of the Paris Agreement. Our original goal of climate neutrality in our own core processes by 2030 is being considered in the development of the strategy and will be part of the future SBT. 

As of July 2023 
Reporting period: March 1, 2022 to February 28, 2023 

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