Warm welcome to Intrum's Capital Markets Day 2020. My name is Anna Fall. I am the Chief Brand and Communications Officer at Intrum, and I'll be your guide this afternoon. Some housekeeping before we kick off. We aim to end the program at the latest 4:00 P.M., Central European Time. We'll offer you a short break about halfway through, around 2:30 P.M. I will take a Q&A session at the end of the whole program. You're more than welcome to already now start submitting any questions you might have, and you can do so throughout the program, and you'll find the email button on the page. Intrum is an international company. We have presence in 24 European countries. This afternoon on the program reflects that as we are fully digital and the four speakers are located in four different countries.
Of course, this also reflects the ongoing pandemic that we are experiencing. We have our President and CEO, Anders Engdahl in Spain. We have Michael Ladurner, our Acting CFO here with me in the studio in Stockholm. We have Harry Vranjes, who's our Chief Operating Officer in Switzerland. Finally, Anette Willumsen, Managing Director for Sales and Service Development in Norway. By that, I'm very pleased to hand over to you, Anders.
Thank you, Anna, and good afternoon, everyone, and welcome to our Capital Markets Day 2020. My name is Anders Engdahl, and I'm the CEO of Intrum. If we turn to page four in the presentation. As you would have seen this morning in our press release, the Board of Directors of Intrum has today approved a new set of financial targets for the company. The new targets reflect our view that metrics that capture the true underlying cash generation of the business most accurately reflect the value creation that the company generates. The targets are divided into four areas: return on capital, growth, leverage, and shareholder remuneration. Starting with the first, our new return target is to reach at least 10% cash return on invested capital over the medium-term. Second, the target for growth is to reach at least 10% growth in recurring Cash EPS on average per year.
Our leverage target remains, which is to achieve the same target range as before, 2.5-3.5 x net debt to Cash EBITDA, latest by the year-end 2022. Last but not least, our new shareholder remuneration target is to continue to deliver an annual absolute increase in our dividend per share. Throughout today's presentation, our ambition is to demonstrate to you how we intend to achieve these targets and how the transformation program supports that ambition. Turning to page five. In today's presentation, we intend to give you good understanding of where Intrum stands today, where we're going with the transformation program and what it is that we intend to do, and thirdly, what this means to our stakeholders. When you leave today, we want to leave you with the following key messages.
Intrum has a resilient, sustainable, and proven business model focused on client and customer service. The megatrends and macro drivers that we're currently emerging strengthens our business case. The ONE Intrum transformation will create this simple, digital, and scalable operating model, ONE Intrum will attract more clients and enhance client, customer, and employee satisfaction. In total, a growing Intrum will create significant value for our investors. Turning to page six. Intrum has been around for a long time. Our roots date back more than 100 years, which means that our business model has been proven through both the ups and the downs of the economic cycle over a long period of time. Over the last 100 years, we have indeed seen periods of different difficult times where the company has managed through depression, through war, through several financial crises, and most recently through the COVID-19 pandemic.
Intrum also for many years have had sustainability at the heart of our business and with our vision to lead the way to sound economy. Going into page seven. At its core, Intrum has a very simple business model, that is we support our clients by caring for their customers. We'll come back to this more during today's presentation. Our model is centered around our clients and our clients' customers. Our clients extend credit to their customers. For some reason, sometimes the customer is unable to repay. It can be due to life events, to unemployment, to illness, or otherwise bad fortune. We offer our services to our clients. We work with our clients' customers to help them find solutions where they can repay and get back on their feet financially.
When we offer our services, we can offer to act either as agent or as principal. When we act as agent on the left-hand side of the page, we collect on claims from customers on behalf of our clients. When customers pay us, we remit those collections to our clients, and the client pays us a commission. For that, we incur costs and the net of the commissions and the costs is our profit margin, which currently stands at approximately 25%. This service line is inherently capital light in its nature. It is also important to understand that the majority of what we do in servicing is working with relatively early stage arrears. We can also act as principal, which we laid out on the right-hand side of the page.
Usually, when clients have tried to collect on a portfolio of claims for some time, they may choose to sell the remaining claims. We can then offer to purchase those claims and collect on our own behalf. We incur an initial capital outlay, and then we collect on the claims from our customers and keep those collections to ourselves. We incur costs, and then the net profit, which we measure then against the initial capital outlay. On average, over a 15-year portfolio life that we measure, we collect approximately two times of what we pay initially for those claims. If we turn to page eight. Non-payment of loans and receivables can pose a major drag on economic growth in the economy and prosperity in society as a whole.
It was particularly evident post the Great Financial Crisis over a bit of a decade ago, when many financial institutions became overloaded with non-performing loans and constrained by high NPL ratios and weak capital ratios, preventing them from supporting the economic recovery, limiting extension of new credit. Companies like Intrum play an important role in the financial ecosystem, helping our clients resolving their NPL challenges. We work along the entire credit value chain, supporting our clients with credit origination by providing credit information and credit scoring services. We work with receivables management like invoicing and pre-collection services, and we work with debt collection when the receivables become overdue, including offering to acquire the claims later in life. For our clients, we offer a one-stop shop solution along the value chain, and we also offer the highest quality standards of products and services, and we offer cost-effective solutions.
For our customers, we offer fair treatment and ethical collections. We offer value-added customer experience, a variety of channels, including mobile and online channels, and we strive for finding financially sustainable solutions. All this is reflected in the core values of Intrum: ethics, empathy, dedication, and solutions. We move to page nine. Following the merger between Intrum Justitia and Lindorff in 2017, Intrum was established as a clear European market leader. Since then, we have expanded our footprint and established leading positions in large and important NPL markets such as Italy and Greece, as well as strengthened our market position in Spain. Today, we have leading positions in the majority of the markets where we operate, and we effectively cover 98% of the NPL market in Europe. If we go to page 10.
In addition to completing our geographic footprint, we've also expanded our servicing and investing competencies in a broader set of asset classes. As you can see from the charts, we have increased the proportion of secured servicing revenue since 2017. Today in our strategic markets, being Italy, Spain, and Greece, it represents 2/3 of what we do. Why is this important? If you look at our clients, especially our bank clients, they have NPEs or non-performing exposures across all categories of loans on the balance sheet. By having built a full-scale product offering from very early to the late arrears, as well as real estate and across all asset classes, including secured and unsecured, as well as being able to work with both household and corporate claims, we can be an effective one-stop shop for our clients.
This broad service offering helps make us a strategic service partner for our clients. We go to page 11. Today, Intrum is the partner of choice for leading financial institutions and our scale, our size, our diversification, and full value chain offering gives a unique competitive advantage in our industry. This is further demonstrated by the significantly lower cost of funding that we can attract from the credit markets. If we turn to page 12, we're very proud of our large and growing and loyal client base. We service more than 80,000 clients across Europe, including some of the largest financial institutions like Intesa Sanpaolo in Italy, DNB in Norway, Piraeus Bank in Greece, Banco Santander, which we meet across 12 markets or more across Europe. We also service many large corporates, for example, EDF, UPC, Telenor, and Baloise.
In addition, we service thousands and thousands of small and medium-sized enterprises across a wide variety of industries and sectors. This means that we have a very well-diversified client base with limited single client dependency. We turn to page 13. To us, operating at the highest ethical and regulatory standards is key. It is key to us, it's essential for our clients. Our industry is evolving, and we continue to see varying situations across jurisdictions where we operate. Nonetheless, we aspire to maintain the same high regulatory standards across all our jurisdictions. We believe in the benefits of regulation as we see that we, as the largest player in our industry, can help develop the standards for the industry and create a healthy market environment with fair and ethical customer treatment.
As the market leader, we have a constant dialogue with the regulators, both locally as well as at the EU level, to help develop a suitable and sustainable framework. Internally, we foster and strive for high regulatory awareness among our staff, and we also advise our clients with respect to how to adapt to the evolving requirements. Turning to page 14. Sustainability is core to everything that we do and has always been. Based on input from our stakeholders, we have developed a full sustainability framework which goes across a number of dimensions. We've laid out three of them on this page, which is, the first is enabling sustainable payments. This includes ethical collections by treating customers fairly. This I've mentioned already several times and has been a core element of our sustainability strategy for many years.
It also includes responsible client and portfolio selection, which means that we only do business with clients and buy portfolios that fit our sustainability criteria. We also want to increase financial knowledge in society. We, for example, invest in education in schools around personal economy awareness and financial literacy. For example, we have a program to educate high school students in Sweden called Spendido. The second area that we laid in the middle of the page we call being trusted and respected. This covers areas such as data security and privacy, anti-corruption oversight, and mitigating environmental impact. Thirdly, growing by making a difference. This area covers us as an employer, where we strive to attract and retain the best talent, invest in and foster employee wellbeing, as well as diversity and inclusion, where we have a clear set of metrics and targets.
Overall, we believe it's extremely important for us, for our success as a company, to take the lead in our industry when it comes to sustainability. Moving to page 15. To clarify our sustainability agenda, we've formulated a set of clear and defined sustainability targets. The five targets are laid out on the page. The first one is in the area of ethical collection and treating customers fairly, where we aim to maintain the high level of value index that we currently see above 80 by 2023. The second area is labeled sound economy for our clients, where our target is to increase our average client satisfaction score across the group to above 75 by 2023. The third is to reduce our environmental impact by achieving climate neutrality by 2030 and reduce our total emissions by at least 20% compared to 2019.
The fourth is to attract and retain the best talent, including wellbeing for our employees, where the target is to increase the engagement index to above 80 by 2023. Fifth and final target is around diversity inclusion, where the target is to reach a balanced gender representation in all leadership positions and among all employees. Moving to page 16. Intrum's financial performance since the merger has shown strong growth across all metrics. Cash EBIT is up 40% since 2018, corresponding to an annual growth rate of 22%. Cash EPS is up 50% since 2018, corresponding to an annual increase or annual growth rate of 26%. Moreover, our financial performance during 2020, during the pandemic, has demonstrated the significant resilience of the business as we've continued to drive Cash EBITDA growth whilst navigating extremely challenging operating conditions.
This has allowed us to continue the long-standing track record of Intrum in progressively increasing the dividend per share, where the compound annual growth rate is 12% over 15 years. Moving to page 17. As I stated in the beginning of the presentation, Intrum has been around for a long time, having developed over the last 100 years, both during periods of economic expansion as well as during periods of significant challenges. Some periods over the last 100 years have been even worse than what we see today. What's noteworthy is the stability of the business that it displays through the business cycle with a steady and stable performance both during the peaks and the troughs, meaning the business performance shows limited correlation with the macro development and the macro environment. Most recent performance during 2020 is a further proof point of that. Moving to page 18.
This stability is underpinned by the very strong cash flow profile with stable servicing cash flows, combined with a high degree of automated and online payments and payment plans that we have in our portfolio collections. The portfolio has continued to show resilience this year, and the collection performance this year to date is 99% collection performance compared to pre-COVID forecast as of Q3 2020. This gives us a solid cash flow, and looking at the 12 months, the cash flow net to equity holders is 13% cash flow yield to equity. There are SEK 16 billion of available liquidity that we currently have, and having addressed our maturity profile on the balance sheet, it gives us significant financial and strategic flexibility. Moving to page 19. This is the position that we have. Intrum is the market leader in our industry in Europe.
Intrum is the largest, most diversified CMS company. We have a proven, resilient, and sustainable business model working across both servicing and portfolio investment. We have a full service offering to our client base, and Intrum is the partner of choice to financial institutions. This, we believe, is a very strong starting point to embark on an industry-defining transformation program. A journey which we believe will redefine our industry. As we in the management team for the last number of months have been exploring how to take Intrum to the next level, it has become clear that we have some challenges in the way we operate today. Today, we still operate as a multi-local CMS company, which creates some limitations to our ability to drive further traditional efficiency improvements.
Whilst our multi-local approach to date has made it able for us to tailor our services to our clients' needs locally, it means we have a fragmented operational footprint where many functions and processes are duplicated across many countries. This fragmented setup makes the implementation of, for example, new technology very expensive and slow to roll out as it requires multiple implementations, integrations, and adaptions to a large number of collection systems. We now enter the transformation program, which is aimed at fundamentally changing our operational setup. We think that this will unlock significant efficiency potential, enhance our client and customer value proposition, enhance our competitiveness, our agility, our speed, and at a lower cost for us and for our clients.
Our vision of Intrum tomorrow is based on the one global operational platform, which is simple, scalable, digital, and which makes us relevant to our clients. To put it simply, the transformation program lays the foundation for long-term, profitable organic growth for Intrum for the years to come. Moving to page 20. The ONE Intrum transformation program is aimed at supporting Intrum reaching its new financial targets in the medium-term. We start with a good starting point, but we have some way to go to achieve these targets on all metrics. Michael will come back later in the presentation to give you some color on how we see the path to achieving these targets. Looking at where we stand as of the Q3 2020 on the different metrics.
In terms of returns, in the last 12 months, our Cash ROIC was 7.5%, and where we aim to achieve at least 10% in the medium-term. In terms of growth, we aim to maintain at least 10% recurring Cash EPS growth on average per year. The average since the merger is 14%. In terms of leverage, our target is to reach the target range of 2.5-3.5x net debt to Cash EBITDA by the end of 2022 at the latest. We currently stand at 4.2x, and we see a clear path to reaching this target. In terms of dividends, we see that we will continue to deliver dividend growth per share in line with our Cash EPS growth over time, leading to an absolute annual increase in our dividends each year.
Taken together, our financial targets highlight our focus on sustainably growing free cash flow and shareholder remuneration over time. Move to page 21. Given our starting point today with a fragmented multi-local model where we see substantial potential to drive return on capital through the transformation program. We also see that we're ideally positioned to take advantage of the strong market backdrop emerging post the COVID-19 pandemic, and with a transformed and Intrum common platform, be in a position to drive both organic growth and return on capital sustainably for the years to come, delivering significant value to our investors and other stakeholders. Let's turn to the megatrends and macro drivers that we see strengthening our business case for the coming years. We turn to page 23.
Looking at the CMS industry, we see a number of important megatrends and macro drivers supporting the industry for the coming years. Some of these have been driving the industry for the past decade, and some have been further accentuated by the COVID-19 pandemic and its economic impact. We've laid this out on this page as a pyramid, and we start at the bottom of the pyramid. At the bottom, there is a normal continuous NPL generation in the economy amongst banks and non-financial companies providing a base flow. In addition, there's a second wave of NPL formation expected to form post-pandemic to levels similar to what we saw post the Great Financial Crisis. Regulation, which accelerated the post-financial crisis, continues to drive NPL sales and externalization of servicing.
We see companies that are now, in light of the economic development, increasingly compelled to shore up their liquidity and ensure business continuity. In the fifth step, second to the top, we see that customer behavior is changing, and the accelerated development in retailing towards e-commerce stimulates growth in consumer credit. Finally, financial investors are set to become, once again, a large and meaningful opportunity as the post-COVID NPL volumes are being addressed. Turning to page 24. As I started with on the previous page, at the bottom of the pyramid, we have an underlying base flow of NPLs being generated in the economy. On an ongoing basis, European banks generate ordinarily approximately EUR 100 billion worth of NPLs each year. That's based on a normal level of expected losses of approximately 50 basis points applied onto a stock of loans of approximately EUR 20 trillion.
In recent years, that loan stock has grown by approximately 3% per year, which has also then been driving demand for services from our industry by approximately the same amount. Turning to page 25. On top of that, we now see a substantial build-up of NPLs expected to come through over the coming years as a consequence of the pandemic and its adverse impact on the economies across Europe. Estimates vary a bit, but conservatively, the NPL stock is set to at least double. This means that the NPL stock post-pandemic will rise to levels similar to what we saw post the financial crisis a decade ago. A decade ago, that build-up fueled the CMS industry for many years afterwards as portfolios were outsourced for servicing and portfolios were sold into the market.
The content and composition of the NPL stock this time looks a bit different. It looks to be less real estate developer driven, as we saw across many markets a decade ago, but instead this time, more SME and household loans driven. That fits our capability set very well. Turning to page 26. Regulation has been a big driver of volumes being sold and externalized for servicing by banks over the last 10 years. We expect this trend to continue. While we see at the moment a temporary relief introduced by the various moratoria across many countries, we see that regulators continue to focus on banks addressing their NPL ratios, leading to further NPL sales and more outsourcing in the coming years.
The cost of keeping NPLs on the balance sheet has gradually increased as new capital adequacy regulations have been introduced, and with Basel IV, we see that trend continuing. The industrialization of our industry, combined with a focus on digitizing the entire customer journey, means that it's becoming increasingly expensive for banks to invest in their own in-house collection units. Combining that with the increased focus on operational efficiency by lowering cost-income ratio and increasing profitability that banks themselves have had to focus on in order to improve the return on equity, this continues to encourage outsourcing. Turning to page 27. In our European payment report earlier this year, we observed a clear shift in our respondents saying that late payments create a liquidity squeeze and even a threat to survival. Which is encouraging them to seek help to ensure that they get paid for their invoices.
This has been significantly exacerbated by the COVID-19 pandemic and its economic challenges. Turning to page 28. Perhaps the most forceful mega trend amongst both financial and non-financial companies is the shift in consumer behavior trends in terms of digitization. E-commerce has accelerated further during the pandemic, and we see that behavior increasingly coupled with the extension and utilization of consumer credit. One group of companies in this category is the Buy Now, Pay Later companies such as Klarna and Afterpay and a few others named on the page, which display explosive growth. These companies offer payment solutions with built-in consumer credit extension, which in part become overdue. Many of these companies started with in-house collection departments, but are now increasingly outsourcing.
Hence, having a strong global one-stop shop offering is very powerful, allowing the Buy Now, Pay Later companies and other e-commerce companies for that matter, to access collection services in an easy, cost-effective, and consistent way across the markets where they operate. The e-commerce trend also drives demand for credit cards and other consumer loans among the financial institutions, which has seen rapid growth in a number of markets over recent years. Turning to page 29. Finally, we see the financial investors once again becoming part of the solution for the emerging NPL stock post-pandemic. For us, financial investors present opportunities both in terms of servicing, as most of them don't have their own servicing capacity, as well as an opportunity in terms of co-investment. We have had for the last number of years an active co-investment strategy, and we expect to continue to do so.
Turning to page 30. Looking at the emerging picture for portfolio investments post-pandemic, we see an overall favorable outlook. Volumes are expected to rise meaningfully over the coming years. Our balance sheet strength facilitates the investment growth of favorable returns. Investment returns are expected to improve compared to the pre-COVID scenario. This year in Q2 and Q3, returns increased meaningfully to significantly higher levels. We don't see these levels to be sustainable. That said, we also don't expect returns to return or revert to the pre-COVID levels anytime soon. Our funding costs have stabilized at attractive levels, which gives us an expanding spread between the funding costs and the return on investment. To summarize, market dynamics driven by macro and megatrends appear favorable for the coming years, and we believe that Intrum is ideally positioned to capture these market opportunities.
The transformation program further enhances our focus on efficiency, competitiveness, and acts as an enabler for organic growth in servicing and supports our competitiveness in portfolio investments, allowing us to grow profitably across all our segments. Now I will leave it over to Harry to take you through some of the details of the program and what we in practice are about to do. Harry, over to you.
Thank you very much, Anders. Let me start by introducing myself. I'm Harry Vranjes, and I'm the Chief Operating Officer at Intrum. I'm here today to take you through the ONE Intrum transformation program. This program will fundamentally transform our operating model, digitalize our client and customer journeys, lower costs, and scale our platform in order to be able to serve our clients more effectively and more efficiently. Moving to the next slide. As Anders mentioned in the megatrends section, the world is changing. Digitalization is changing customer behavior. Our clients need to adapt to this behavior, and we in turn need to adapt to them to stay relevant in the future. This goes for the small enterprise as well as the large corporates and banks. For the small enterprise, we need to be able to deliver simple, effective digital solutions.
To the large corporates, we need to be able to offer custom solutions that fit their needs. As a leading player in our industry, we need to be on the forefront of collection effectiveness and efficiency in order to be able to offer competitive pricing at attractive margins. Building on our existing scale, we are now fundamentally changing our operating model to ensure a more efficient organization that allows us to capture incremental growth at attractive marginal cost. Moving to slide 34. The industry as a whole, as the legacy, has grown through M&A or through country-based greenfield startups and is therefore typically multi-local. This means that we have difficulties benefiting from scale in general and from cross-border scale, specifically. This multi-local setup, as Anders also mentioned, makes it difficult to roll out technology in a concerted way.
Even though the industry as a whole are investing significant amounts in IT, we are still under-invested. This gives us a fragmented view of our collections. We typically only see after-the-fact data from our global centers or from the top. Now, in the ONE Intrum model, we will be operating in a truly global model. Utilizing a single platform built on modern technology, making it easier and faster to access the vast data set that we have. We have the critical mass to absorb the investment to get there. Next slide, please. The ONE Intrum operating model will build on simplified, standardized digital processes across every market and function in the company. Now, coupled with significant investment in analytics and a reduction of complexity in our IT environments, we will be able to reallocate resources in a more effective and efficient way across the company.
To efficiently operate in a standardized process model and in a simplified global operating model, we need to address our technology stack. We are building new client and customer portals, increasing digital channels to communicate with clients, customers, but also partners and authorities who are also digitalizing at the moment. We're rolling out a single core system across the group, linked to a standard set of supporting systems. The standardized processes and the simplified technology landscape will then enable us to dramatically increase our use of analytics across the markets. We will be running in one data model and having the data on one enterprise data hub. This in turn will then allow us to leverage advanced analytic models and machine learning across all stages of the collection process, making data-driven decisions based on more data and faster. Moving to slide 36.
Going back to Intrum now. As Anders explained, we are a multi-local setup. We have 41 operating units that are more or less self-sufficient. They have their own IT, their own operation, analytics, et cetera. We run on 55 collection systems, and of course, they are all linked to surrounding systems, and we have about 1,500 of those. This drives significant complexity and cost. Because of this fragmented setup, servicing multinational clients is difficult, and of course, the rollout of analytical solutions and digital solutions is slow due to the diversity in the data models. In addition, this model makes it difficult to become a learning organization. Great ideas typically stay in their silos or in markets and don't travel well over borders, cross-border.
In the ONE Intrum operating model, we're implementing one process framework where we digitize and standardize processes, which we then run on a common IT platform. Again, this gives us then the ability to use analytics, which in turn allows for the reallocation of resources. We do this leveraging our strengths, skilled collectors in the local markets, and flexible staff that we are building up in the centers. We will then have truly global operations and truly global support function, which makes us as local as needed and as global as possible. Moving to slide 37. We are relying on a set of core capabilities to deliver this transformation. Most of the capabilities we already have in place today. This process framework and the global/local execution model is being built as we speak. Starting with scale.
We have a vast data pool already today. We have global reach. We have our own operations in 25 countries, and 160 more are accessible through our partner network. We have the financial resources. When it comes to the global model that we're now building, it's still based on a strong local commercial ownership, which we have already in place today. Then we're complementing this with the ONE process framework and the global and local execution framework. None of this will be possible to deliver without our people and our strong culture. Our collectors, we have collectors out in the markets with deep subject matter expertise, able to handle anything that comes across their desk or their screen. We have highly skilled process and data analysts.
We are now building up a flexible workforce to be able to rapidly adapt to change in volume in these centers that we are setting up. Now, we build this on the foundation of a strong value-based culture that we have developed over many years. Moving to slide 38. How are we going to do this? Well, first of all, the client journey is at the center of the ONE operating model. We started the program with an in-depth analysis of our current processes from a client and a customer perspective. Based on that, we have now defined new standardized processes that can be executed in the same way regardless of market. For one example, we have 40+ ways of booking payments today. This is a core process for us.
We are setting up one process based on advanced analytics to recognize and allocate these payments to the correct claim. The investment into this payment hub is quite significant, and it would be too much for an individual market. As ONE Intrum, we can handle that, and we will benefit from it. In this way, we go through process by process, redefining, standardizing, digitizing, leveraging analytics. Leveraging the defined standard processes, we then build global operation centers and customer service centers. These units will mainly execute these standardized processes, and we also build the IT systems, the interfaces, the portals, the analytical models to enable the efficient execution of those processes. With the processes, the organization, the systems, and the analytics in place, we then need to move the actual case management to get the benefits.
We need to get the volume over to the new volume. We will do this market by market, segment by segment across the coming three years. To slide number 39. We see this as a three-year transformation journey. We start with defining the processes, and we will have the unsecured customer processes defined by the end of this year. Client processes in Q3 2021. For secured collections, we are building a brand new model to be ready mid next year. This transformation also, as mentioned, affects every part of the company. All support functions will also go through their simplifications and adapt their way of working to the new model. We start from the support functions. We start with the design of finance, data management processes, and we will have those in place by the end of 2021.
In terms of global capabilities, we are growing our existing operation center in Vilnius to critical mass during 2020. That means we're going to have some 180 people there to be able to support the new model already from start. We are setting up three customer service centers by Q1. First out is Athens, where we plan to be live actually by the end of 2020. We follow with Malaga and Bucharest by the end of Q1 next year. We're also rolling out the new collection systems to all countries by the end of 2020. Currently, 18 countries have a base version of this platform. Another six countries are currently in testing as we speak, so that we will have all 24 implemented by the end of this year, and then grow from there.
The benefits, as mentioned, will come once we are able to operate our PI and servicing volumes in the new model. In terms of transferring case management, we will start in Q1 2021 and focusing on the PI segment. By the end of next year, we then expect to have some 40% of our PI cases operated in this new model. For the external servicing clients, we will start in 2022. This stream requires close cooperation between Intrum and the client themselves to move forward. Throughout the journey, we will also be decommissioning systems that are no longer needed, with the majority being decommissioned at the end of the journey in 2023. We've shown the plan. Moving now to slide 40, I should say.
We've showed you the plan, now we also want to talk a little bit about successes or achievements this far. We have made a landmark migration onto the new platform in Greece. It's a unsecured portfolio which we signed in Q4 2019, consisting of some 220,000 cases and EUR 2.4 billion in outstanding claims. This was migrated onto the new platform in May 2020 and is now serviced according to the new model, with backend processes executed in Vilnius and collections handled by a mix of local in-house teams and local partners. The results out of this is, so far, we are collecting at over 100% of the original forecast, and we have reduced the variable cost significantly due to this delivery model. In terms of lessons learned here, as a sizable migration, this first step shows us that, yes, this model works.
It also showed us that we've had excellent cooperation between the global functions and the local, which in turn gives us great confidence for the other upcoming migrations during 2021 and 2022. Next slide please, 41. Now turning from the large Greek bank with huge volumes, we now go to our smaller enterprises. Currently, we are operating some 40 small enterprises in this model across 12 countries. Now, for the SME client, they typically have a very low number of claims, but the claims are of crucial importance to them. An unpaid claim can mean bankruptcy. We are now serving them from this global platform with core backend processes executed from our operation center in Vilnius and verbal client and customer contact through the local country.
The main communication, though, goes through the new client and customer portals that we are setting up, which have been simplified to communicate better with both clients and customer. In terms of results, we are seeing high client satisfaction among these clients, and especially international collections already from low volumes is a popular feature that we expect to grow as more and more SMEs do business cross-border. We are also at the same time benefiting from training our internal teams on the internal processes and the model for who does what, et cetera. In terms of lessons learned, well, we see that the SMEs have very similar requirements across Europe. They want a simple service, a reliable service, predictable pricing, and basic items as understandable invoices, and so on, is at the top of their wish list.
As these requirements are so similar, we are expecting that we will be able to scale these services in a very efficient way. Moving to slide 42. For the large corporate. In Switzerland at the moment, we are implementing a client in the media industry, which has volumes of around 2,000 cases per month. They have just concluded their digital journey. They have replaced the ERP systems and processes on their side, and now they need a partner who can maximize the benefit of their transformation. We are implementing at the moment. We are opening the new cases via the API. Those tests have been successful, and we aim to be live in February 2021.
Of course, now with the new models, these APIs that we have invested time and money in, will now, because of the ONE system, be reusable for other clients using the same ERP across Europe. This will give us speed and shorten time to revenue for the next implementation. I think the lessons learned out of this is that all large corporates are working on a digitalization journey or a transformation of some sort. The only difference is which stage they are in at the moment. We, as an integrated partner, must be able to live up to these demands on speed and on simplicity. The players who can't do that, who can't keep up, they will be sidelined. Moving to slide number 43.
Obviously, this ONE Intrum transformation is a large undertaking, and we will need to keep track of it and follow it up in a very detailed way throughout the journey. Here we will show you sort of the high-level core KPIs that we are tracking on a monthly basis to be able to ensure both progress of the program itself, but then also the realization of the benefits. By simple KPIs or clear KPIs, the volumes transfer KPI will show how the execution of the transformation is progressing. We start with 250,000 cases through this great migration that we did earlier this year. During 2021, we will transfer an additional 12 million PI claims and then finalize the PI segment in 2022. For the servicing claims, we will start in 2022 and run through to 2023.
This means that at current volumes, we will be ending up at 38 million open cases by the end of 2023. Just to put that number in context, that corresponds to 7% of the population of our footprint in Europe. To track the efficiency benefits generated through the transformation program, we are using a core KPI, which we call FTE cost to collect ratio. This is not specifically to track FTE cost, but this reflects the reduction in effort generated from the model and from the program. The reduction of FTE effort per case will come through standardization of processes, digitalization of manual actions, reallocation of resources, improving collection performance, and avoiding ineffective actions through the use of analytics, as described earlier. Moving then to my final slide, number 44.
The ONE Intrum transformation is expected to generate savings of SEK 1 billion annually from 2023 onwards. To get there, we will be investing SEK 1 billion over a three-year period. Starting with the investment side, roughly 50% of the investment will go into technology and data management, which as discussed earlier, needs an overhaul. The other 50% are costs associated with building the global operation centers, building the global capability for unsecured, secured finance, and customer services. In terms of the savings, we are expecting annual savings of SEK 1 billion from 2023 onwards. Again, the drivers here are standardization of the processes to reduce the overlap, digitizing the processes, reallocating of resources, improved collection performance through analytics. In addition, we will then be optimizing our IT spend as a group as we decomplexify our environment.
These are the key items driving the savings and building the rationale for the program. With that, I will hand over to Anna.
Thank you, Harry, for that walkthrough of the ONE Intrum operating model. Now we'll put the spotlight a bit more on our clients and their customers. I'll soon hand over to Anette Willumsen in Oslo. Before doing that, let's watch a short film.
When we talk about the future of Intrum, it's a lot about performance, processes, plans. The most important factor for continued success will always be People, our clients, and especially their customers. Intrum knows I need good relationship with my customers. We do what we do best. Intrum does what they do best. Actually, collection is not only about collecting of the money, but also supporting the customer. Here, Intrum is doing a great job. Supporting our clients' customers in an efficient and ethical way is key for us at Intrum. Thanks to our core values, empathy, ethics, dedication, and solutions, this comes natural to us. There's always a history behind the no payment, and I'm sure that Intrum respects the situation and will find the best solution for the client, for us, and for Intrum as well.
At Intrum, we have around 250,000 conversations with our clients' customers every single day. We help them in understanding their situation, getting back in control, making their payments, and moving on. For many years ago, I have a company that's bankrupt. I have a bad relation to other companies doing the same thing like Intrum. There, you only are a number, and they don't listen to you. After I made contact with Intrum, I have a perfect economic situation now. I can pay all my bills, and I have a life, and I wake up every morning with a smile. Our brand promise, Leading the Way, means setting the standards for our clients, their customers, our employees, and for the industry as a whole.
With that, I'm pleased to hand over to Oslo and Anette Willumsen.
Thank you so much, Anna. My name is Anette Willumsen. I'm Managing Director for CMS Sales and Service Development and Markets. In the film we just saw, we just heard some of our clients and the customers' view on Intrum. What will the transformation to ONE Intrum, presented both by Anders and Harry recently, imply for our clients, our customers, and our employees? Let's start with our clients, but also look at how ONE Intrum will support Intrum's future organic growth. Going back to Anders, I'm proud because in Intrum we have a strong and loyal client base across multiple industries, all the way from banks, financial institutions, via telcos, utilities, to e-commerce and SMEs.
Through dialogue with both our existing and potential clients, it is clear that the most important criteria when they are selecting a servicing partner, that is the experience and the expertise within their specific industry. We recognize the client's need for a differentiated approach, and we are developing our offerings and our commercial model accordingly. Our future commercial model, it will be centered around our clients' needs, both from a solution offering perspective, but also, as Harry said, from a delivery perspective. With a unified portfolio of offerings, which is tailored to each industry-specific, it makes Intrum well-positioned to help our clients manage their debt along the full life cycle. All the way from the early stages as pre-collection, reminder services, to, at the other end, being a trusted partner where there is macroeconomic economy or regulatory drivers to optimize the balance sheet.
The transformation at ONE Intrum, it will enable us to be more relevant to our clients and to deliver on their expectations. All our clients will receive best-in-class collection performance through our new global platform. Our strategic Pan-European clients, they will continue to receive fully customized services as they do today. We have clients across traditional verticals like insurance, like telco, utilities, B2B, where we will deliver industry modularized solution that are relevant today and in the future for their industry, but also saving them time and money through faster onboarding and integrations. We have clients that require the more unified and scalable approach across multiple geographies, like for instance, e-commerce, or for those, like Harry also mentioned, that's looking for a simple end-to-end digital service like the SME, we will offer a global platform-based solution.
I will now, in the two next slides, visualize a bit how we see future client journeys, both for the e-commerce and for the SME. Turning to page 48. Anders, in his presentation, he showed that the e-commerce segment, it has shown solid growth and an increasing demand for credit management services during the past years. We've had multiple dialogues with global e-commerce clients to understand their needs. Through that, and based on that, we have designed a global and simple future journey, which is aligned to how they are centralized and standardized in their operating model, but is also scalable to support their growth, which often happens by expanding into a new, attractive market.
Intrum is clearly a natural partner for global e-commerce players with our footprint across 25 markets in Europe, which is also ensuring them a unified and compliant customer journey across all these markets. To simplify the commercial dialogue, we mirror the client setup with one point of contact, one framework agreement, a team of industry experts with strong knowledge about key drivers within the e-commerce business. The onboarding is allowing a plug-and-play to add and grow into new countries, both with a single point of contact, standardized processes supported by standard formats and APIs. The delivery model is digital and simple, based on one system platform in all countries, and it also supported by technologically advanced portals towards the client. There is also a potential to Intrum to leverage the vast amount of data that we have in Intrum today.
Most importantly, also stressed by the e-commerce business, it ensures a unified, compliant, end customer journey in all markets through our ethical collection practice. The servicing will be from a global operation center with one hub across all markets, single point of contact for invoices, reporting, et cetera. All in all, a global and simple journey supported by the transformation recently presented by Harry. We turn to the next page. Intrum has today a strong position within the SME segment in multiple of our markets. SME is also a quickly growing segment with increasing needs for credit management services, also at the back of COVID-19 and the macroeconomic development. We see significant growth potential and opportunities in this market segment.
The transformation and ONE Intrum, it enables us to unlock the full potential of the SME market, not only in some markets, but across all our geography through a standardized, simple digital offering and operating model. The client journey for an SME will very often start by us partnering with relevant players upstream in the value chain to create awareness and accelerate our footprint across the markets in this segment, and also be there with a smooth integration for the SME clients. It will be a very intuitive shopping cart experience where you have modular offering and pricing in the sort of small, medium, large, as an example. Fully digital self-onboarding and uploading of cases, and standardized and automated reporting, up-to-date data to follow up their cases. As Harry mentioned, one case could be the difference of going bankrupt.
Doing that in the portals, and we will also supplement the digital interface with an SME team. E-commerce and SME are clearly two segments with a solid growth and where ONE Intrum will increase our potential to further tap into these growth areas. Let's look into how ONE Intrum also can enable us and support a stronger servicing growth in a broader spectrum of industries, but also some selected markets. Turning to page 15. Taking an industry vertical perspective of the market, we see several organic growth areas for Intrum going forward. ONE Intrum and the transformation will make us able to capture this growth. On the one hand, referring back to the two client journeys, we see highest growth coming from segments like B2B, SME, and e-commerce.
With tailored value proposition for these segments, ONE Intrum make us much better equipped to tap into these less-explored pools. On the other hand, as you can see in the lower corner of the chart, ONE Intrum also makes us more competitive in servicing our current clients and attracting new ones in mature and stable verticals such as utilities, telcos, and insurance. Through an optimized cost position and a unified servicing model, Intrum will be better prepared to face the regulatory-driven downward price pressure that we see in some markets while we preserve our margins. Nevertheless, banking and financial services will remain at our core. This segment is already by far the largest, and it accounts for 70% of the growth. Going forward, it is expected to outpace the non-banking verticals in terms of growth.
This is driven clearly, as Anders mentioned earlier as well, by the COVID impact on NPL formation and regulatory pressure for the banks to actively manage their NPLs. With ONE Intrum, combined with our extensive expertise in both unsecured and secured claims across all our markets, we are well positioned to help our clients in their efforts of managing their NPLs, and by that capturing the external servicing potential. We see revenue opportunities both from an increasing outsourcing share, but also expanding our early services propositions like pre-collection, white labeling, and value-added service offerings. Turning to page 51. If we stay a bit in the banks and financial services, it is clear that they present attractive growth opportunities in all our core markets, and we have looked in some of the major ones. Starting with our strategic markets.
They will remain strong due to the NPL ratios which are higher than the European average and a much higher pressure also to manage them. The large banks, both in Italy and Greece, they have already formed partnerships like the one we have with Intesa Sanpaolo and Piraeus Bank, we still see multiple growth opportunities in all these three markets. Starting with Italy, we clearly see opportunities to service UTPs, unlikely to pay, with the large banks, but also bad loans and UTPs for the mid-tier banks. Referring back to Anders again, to take a servicing partner role on the back of the banks offloading their NPLs off their balance sheet. If we move to Greece, given the very high level of NPL ratios and the pressure to reduce these, we see the similar opportunities on servicing of both sold and securitized portfolios.
If we then move to Spain, they currently have the lowest NPL ratio of these three markets, but here we clearly see growth opportunities in the continued growth in consumer unsecured, the SMEs, specifically at the back of COVID, but also in business loans. If we then move to our home markets in the Nordics, they are expected to be quite stable, but with a growth driven by the increase in the NPL volumes. We don't expect any structural changes in the terms of penetration of servicing, but however, we clearly see a potential in servicing of secured assets for the banks. If we look into a couple of large mature markets like the U.K. and Germany, ONE Intrum clearly gives us an opportunity to improve our footprint in that market and also share of wallet by expanding into the early stage services for our clients.
In the U.K. we will see that primarily the growth is driven and will be driven by earlier outsourcing of the unsecured, but we also see signs of services opening in the business loans and potentially within the secured debt. Moving to Germany, growth is clearly being driven by the increase in NPL volumes in Germany. We don't expect any large structural changes of the penetration of servicing, but we expect the same movement into early stage servicing for our clients. Last but not least, we see a huge potential in France. The NPL volumes in France, they are large, but the penetration of existing servicing is very low. With ONE Intrum, with a broad portfolio of solutions such as business process outsourcing and white labeling, we are well positioned to drive and capture the market opening potential in France. Turning to the next page.
I've spoken a lot about our clients. Now it's time to talk about their customers. With ONE Intrum, we will continue our ethical approach to help individuals and businesses in their financial recovery. In the film we saw earlier, we heard Kenneth. He's representing one of our 250,000 customers that we speak to on a daily basis. It is our employees talking with all these customers every day, every year, and they are led by our values, ethics, empathy, dedication, and solutions. Our employees, they do a fantastic job in helping people understanding their financial situation and to get back in control.
That could vary from a guy that's just forgot a couple of telco bills to another one that's in severe financial challenges where we need to make a payment plan which is aligned with the payment ability so they can make their payments and move on. To quote Kenneth, "To sleep well at night." With our position as market leading, it is important for us in Intrum to lead by example, supporting customers in a respectful and ethical way, and act as a role model within our industry. Through the extensive data that Harry also mentioned that we have now combined with new technology, we'll be able to offer our customers modern solution adapted to their needs. Turning to the next page.
As I mentioned, it is our employees, they are key to serve both all our clients, but also their customers across all our 25 markets. When we now get one global platform combined with the local skills and expertise that we have in all these markets and one operating model facilitating a clear processes, clear targets and clear accountability, we will have a joint platform that will facilitate much tighter communication, better sharing of expertise and best practices. I think it's fun to say, and I'm proud to see currently in the first stages of the transformation that we've already started, like Harry said, that our employees, they're raising their hands.
In Belgium, in Spain, in the U.K., in Poland, really saying that, "I would like to try to work broader with my local skills and expertise than I do today and contribute into this." This is really our aim, to fully unlock the potential of our employees in this ONE Intrum. To work for Intrum, it will mean and means that you're working for a modern technology, advanced market leader, and it gives you the opportunity to grow, whether you grow in the country or grow and develop globally. With this, I believe I have addressed the questions of what does ONE Intrum imply for our clients, for our customers, and for our employees, and how it enables Intrum to unlock the organic growth opportunities across both industry verticals and markets. With that, Anna, I will give the word back to you.
Thank you, Anette. With that, we'll actually walk into a short break. You can get a leg stretch and a fresh cup of coffee. We will kick off again with Michael Ladurner looking at the financial targets at 2:30 P.M. Central European Time. See you soon.
Good afternoon, everyone, and welcome back. My name is Michael Ladurner, and I'm the Acting CFO of Intrum. I'm now looking at slide 55. We have heard about Intrum's resilient and sustainable business model, the support of megatrends and macro developments, ONE Intrum, our transformation program, as well as how we plan to deepen as well as widen our client pool and drive organic growth. Before I walk you through how we see these elements playing out in terms of our financial trajectory and targets over the medium-term, I would like to spend some time on the targets themselves. Our new medium-term targets represent an evolution insofar as they focus on cash rather than accounting metrics.
We believe that the focus on cash, which we have already started to reflect into our quarterly disclosure earlier this year, is more reflective of the fundamental drivers, developments, and strengths of our business. First of all, our returns target. A Cash ROIC in excess of 10% medium-term. We have defined this metric as the overall pre-tax recurring cash return on the average capital invested in our business. That is the sum of total shareholders' equity and net debt. Pre-tax cash return is defined as Cash EBIT. Cash EBITDA adjusted for replenishment CapEx. That is the CapEx required to replace the collection of a given quarter based on in-quarter collections and the last 12-month money multiple, as well as other CapEx.
Going forward, Cash ROIC will be a key metric for Intrum in assessing business opportunities, business performance, as well as driving underlying profitability well in excess of our cost of capital. Turning to our growth target. Recurring consolidated Cash EPS growth in excess of 10% per annum on average medium-term. This target builds on our firm conviction that we will be able to not only increase our profitability, as highlighted by our returns target, but also to continue on our growth trajectory for the foreseeable future. As previously explained by Anders and Anette, this conviction is not only based on supportive megatrends and macro developments, but also on the ability to accretively deepen as well as widen our client volumes supported by the transformation program, ultimately driving profitable organic growth. The calculation of recurring cash earnings per share builds on cash EBIT.
The metric underpinning Cash ROIC, less cash net financial items and cash tax, divided by the number of shares outstanding. In terms of leverage, we reiterate our target of a leverage ratio in the range of 2.5-3.5x by the end of 2022. The calculation of the leverage ratio remains unchanged. When it comes to shareholder remuneration, we have aligned our target with the track record we have built over the last 15 years. Absolute annual increases in the dividend per share paid to our investors. As we believe that recurring cash earnings represent a more accurate picture of the fundamental development of our business, we will align the growth in dividends per share with the cash earnings development going forward, with the target of having increases in absolute terms each year.
For your convenience, we have also included the historical trajectory of the financial target metrics, as well as the detailed definitions in the appendix of this presentation. Over the coming quarters, we will further develop and adapt our disclosure to reflect these new target metrics and their key constituting elements to facilitate the review for all our stakeholders. Now turning to slide 56. Moving on from the new financial targets themselves, I would now like to focus on what we see as key drivers of our financial trajectory in the medium-term and how these support increases in profitability, as well as our organic growth ambitions. On our journey, we're supported by a number of building blocks or steps that build on each other, normalization, transformation, and business growth. I would like to take these building blocks in turn and focus first on normalization.
2020, which is the starting point for our performance going forward, has been impacted by a pandemic. Despite our proven resilience through the first wave and encouraging signs as the second wave is now upon us, COVID-19 has left its mark on the current year. Therefore, the first building block in our journey has to be the recovery and return to like-for-like pre-pandemic performance levels throughout our business. I will walk you through later in the presentation what this means for our financial trajectory in the context of the new financial targets. Turning to the next building block, transformation. You've heard from Harry about ONE Intrum, our transformation program, and how we will reduce the like-for-like FTE cost to collect by 20% by 2023. Other things equal, this will positively impact our margins and is therefore an important factor in driving up our ROIC.
I cannot emphasize enough that this is only one aspect of the financial benefits of the transformation program. This becomes abundantly clear when we look at the third building block, business growth. ONE Intrum makes our business truly scalable and enables us to add volumes at very low marginal cost, enabling us to share some transformation program benefits with our clients to drive organic growth. This, in turn, also makes organic volume growth highly accretive to not only our growth, but also our returns target. ONE Intrum also enables us, as shown by Anette, to profitably expand our addressable client base and increase our servicing market share. Through being more efficient in servicing and further improving the quantity, quality, and accessibility of our data, we also enable the portfolio investment segment to continue to grow with improved profitability as well as less risk in our forecasts.
Medium-term business growth is also supported by the megatrends showcased by Anders, as well as the expected significant buildup of COVID-19 related NPL volumes. These will further drive growth in our CMS strategic markets and portfolio investment segments. ONE Intrum will in fact enable us to not only take better advantage of this significant opportunity set, but to also do so with less risk and increased profitability. Now turning to slide 57. I would now like to turn to looking at how we see these building blocks I have just described impacting the development of the Cash ROIC. We expect normalization to add 50- 100 basis points to the current 2020 Q3 last 12-month Cash ROIC of 7.5%. We see transformation adding another 100- 150 basis points on a like-for-like basis over the three-year horizon of the program, as earlier introduced by Harry.
We envisage business growth to add in excess of 50 basis points on top of normalization and transformation-induced improvements, allowing us to achieve our target of a Cash ROIC above 10% medium-term. Looking at business growth specifically, it is worth noting again that the transformation program makes growth highly accretive at the margin due to the highly scalable operating model with low marginal costs, with this benefit being applicable across all of our segments. Turning to the segments, CMS, strategic markets, and portfolio investments. The building blocks I've just discussed have an impact on all three segments, but they impact all three segments in different ways. We can therefore also look at how each business segment contributes to the development of the Cash ROIC medium-term, as we have illustrated on the slide.
We expect improvements to be relatively evenly spread, with each segment to add more than 85 basis points. Another way of looking at this is that we see our servicing activities, the CMS and strategic market segments together contributing approximately 2/3 of the improvements, while the portfolio investment segment contributes the remaining third. When we focus on the segments one by one, starting with CMS, we see some benefits from normalization. However, given the more limited impact of COVID-19 on this segment specifically, we see a more significant impact from ONE Intrum and good organic growth also supported by the transformation. We expect the CMS segment to disproportionately benefit from ONE Intrum given its current multi-local setup as well as granular client base and set of business opportunities.
Turning to the strategic market segment, we expect a more significant impact from normalization due to the deeper effect COVID-19 has had on these jurisdictions. Strict lockdowns with the legal systems also being affected during the first wave in spring, a pattern that is now starting to repeat itself as we go through the second wave. Transformation, while also relevant to the strategic markets, has less of a broad-based impact, as a significant part of the business in Italy, Spain, and Greece is built on bespoke partnerships with leading financial institutions, which by the nature of the underlying contracts benefits less from the global operating model we are now building.
While we expect business growth in these jurisdictions to be significant in the medium-term, supported by significant NPL stocks pre-COVID and even more so post-COVID, total growth has to be analyzed against the backdrop of likely volume changes as our bank partnerships mature. In any case, we expect business growth to be a positive contributor also in strategic markets. When it comes to portfolio investments, we see a more even spread of the benefits from all three building blocks. Normalization driving improving returns, particularly in Southern Europe. Transformation will improve our competitiveness and lower risk through more efficient internal servicing and incrementally better data, supporting profitable growth. Business growth is based on the factors I just mentioned, as well as supportive megatrends and macro developments increasing the available opportunity set.
Solid back book performance and continued capital deployment at attractive returns will enable us to grow Cash EBIT from the portfolio investment segment well ahead of the associated growth in invested capital. I just mentioned attractive returns, and this is probably a good point to share in some more detail how we think about portfolio prices going forward. While we have had high returns on new investments due to COVID-19 over the last months, as mentioned by Anders earlier, this has been on relatively limited volumes. As the situation normalizes, we also expect returns to go down. However, we do not expect them to fall all the way to pre-crisis levels for the foreseeable future, likely enabling us to take advantage of the substantial post-COVID opportunity landscape at attractive returns.
Also looking at the ROIC trajectory through the segmental lens, we see a clear path towards meeting our target of a Cash ROIC above 10% medium-term. Looking at slide 58. As we have now covered our expected returns trajectory, I would like to apply the same approach to growth. Our target of a recurring Cash EPS growth of 10% per annum on average medium-term. Starting from the building blocks outlined earlier, we expect both normalization and transformation to add to the growth trajectory of Cash EPS. Normalization through returning to pre-COVID levels where relevant, and transformation improving margins like for like, primarily through lowering the FTE cost to collect. We have again here looked at the time period that is roughly aligned with the transformation program.
We, however, also expect a significant further boost to recurring Cash EPS from business growth based on the benefits of ONE Intrum, as well as other tailwinds as outlined earlier. When we then turn to the segments, we see a contribution from servicing the CMS and strategic market segments of approximately 60%, versus portfolio investments of approximately 40%. The contribution of portfolio investments is driven by two factors, the significant opportunity set we expect post-pandemic, as well as the benefits of ONE Intrum in terms of enabling profitable growth, developing and accelerating over the life of the program. This point applies also excluding the impact of the Italian JV portfolio previously discussed. As for our returns target, again, all segments contribute towards achieving our target growth of 10% per annum on average medium-term. Now looking at slide 59.
This slide brings together and very clearly highlights the expected developments I have just walked through. CMS benefits from margin expansion and profitable growth, very much supported and driven by ONE Intrum. Strategic markets is helped in its development by post-COVID-19 normalization, as well as significant post-pandemic NPL volumes with some transformation benefits. Portfolio investments exhibits profitable growth supported by all three building blocks, normalization, transformation, and business growth, as just explained. Looking at the group total and adding the trajectories of the three individual segments together, we have a further factor to take into consideration, common costs. There again, supported by ONE Intrum, we also expect benefits over time in terms of reducing the incidence of the overhead on our business. Overall, the ROIC expands from the current level of 7.5% to above 10% medium-term, supported by profitable growth across all business segments. Turning to slide 60.
Now we turn to leverage and look in particular at how we expect to fund the developments I've just outlined. Here we have, for illustrative purposes, chosen a time period up to the end of 2023. Over this time period, we expect net debt to remain broadly unchanged, with some room for increases or decreases, a development with a CAGR of ±3%, depending on business environments and opportunities available at any given point in time. This overall development should also not be interpreted as a flat development for any given period over the next three years, as there will be fluctuations up and down on a quarter-by-quarter basis, driven by the developments in the business. When we look at how we expect to achieve this development, we need to consider the following elements.
The cash generated by our business over the period in question, the cash spend associated with the transformation, replenishment and growth CapEx, as well as shareholder remuneration. We are convinced that we can self-fund the transformation, business growth, as well as shareholder remuneration over the next three years due to the highly resilient and growing cash flows generated by our business, as evidenced on this slide. Looking at slide 61. In terms of leverage specifically, we see a clear path to getting to our target range by year-end 2022. We don't expect this trajectory to be linear. There will be movements up and down on a quarterly basis. Notwithstanding this, we see the year-end 2021 significantly down from our current ratio of 4.2x in the area of 3.8x .
In terms of Cash EBITDA, we see a good expansion over the next two years, driven by the factors previously outlined. As for net debt, we have looked at a more conservative trajectory with a limited increase that will nevertheless allow us to achieve our target by year-end 2022, thus adding to our conviction. Turning to slide 62. As for shareholder remuneration, as stated earlier, we have built a track record of absolute annual increases in the dividend per share paid to our investors over the last 15 years. We have simply aligned our target with this historical fact and will align the growth of our dividend per share with the growth of our recurring cash earnings going forward. The continued growth trajectory of the dividend per share is again supported by all the building blocks driving our growing cash earnings generations, as just discussed.
Now turning to slide 63. Here I would like to outline how all the medium-term targets hang together and form a coherent picture. In terms of returns, we expect to expand our Cash ROIC from currently 7.5% to above 10% medium-term. We see this ambition supported by a Cash EBIT growth trajectory with a CAGR of 10%-15% over the coming years. As shown earlier, we expect this growth trajectory to be self-funded and supported by our building blocks, normalization, transformation, and business growth. From a leverage perspective, we see Cash EBITDA grow with a similar trajectory, again, a CAGR of 10%-15% over the coming years. As for net debt, we have indicated a CAGR of ±3%.
Overall, this results in a leverage ratio inside our target range of 2.5-3.5x by the end of 2022. This in turn translates into recurring Cash EPS growing with at least 10% per annum on average, assuming net financial develop in line with net debt and funding costs, as well as the current tax rate and share count. This trajectory underpins our ability to grow dividends and deliver an absolute annual increase in dividend per share to our investors. In summary, we believe that our targets are ambitious, that we have laid out a clear path of how we will achieve these targets medium-term, and that achieving our targets will create lasting value for our investors. With this, I would like to hand back to Anders for some closing remarks.
Thank you, Michael. We can turn to page 64. As before I summarize this, I just wanted to give a couple of comments on the current quarter on Q4. As we commented upon during our Q3 presentation a few weeks ago. We remain cautious on the outlook for Q4 in light of the second wave of the pandemic and the associated increase in restrictions introduced in many countries where we operate. It's too early to have a firm view of the quantum of any impact on the different parts of the business, and we don't expect any impact to the extent that we saw during the spring. It can still put a damper on the normal seasonality pattern that we usually see when Q4 is normally the strongest quarter in the year.
Once we have a clearer picture on the outlook, if we see a meaningful deterioration, we'll obviously come back to you and update the market at such time. That could also potentially have an impact on the year-end revaluations for the year, including the Italian portfolio. Again, we don't expect any impacts to the extent what we saw in Q1. To come back to the presentation of today. To summarize the presentation today we hope that we've given you a good overview of how Intrum will transform its operating model over the coming years, and how the transformation will support the achievement of our financial targets. The transformation program will fundamentally change our operating model from a multi-local model to a truly global scalable model that is simple, scalable, and digital.
It will also help making sure that we continue to provide the relevant value proposition to our clients, our customers, and that we, as an employer, can continue to provide value towards our employees. Furthermore, the transformation program provides significant financial benefits that both increases the value of our existing client franchise, as well as providing the foundation for organic growth going forward. Taken all together, we see that a growing Intrum will create significant value for our investors. With that, I will hand it over to you, Viktor, for the Q&A.
Super. Thanks for that, Anders. That, I think, concludes the formal part of today's presentation. My name is Viktor Lindeberg. I am heading up the Investor Relations department here at Intrum, and my function today is basically to be the middleman from taking the questions from the webcast into the forum we have with the four presenters today. Acting as this middleman, I am just asking the team and Anders to be mindful of the concept of don't shoot the messenger. It can be some difficult questions maybe, but I am quite sure that the competence and experience, not the least of 41 years combined in the company for these four speakers, should cover a fruitful Q&A today. By that, I think we should kick off with one of the first questions coming in today, and that is on financial targets.
Could you indicate what medium-term actually means? How should we think about that?
It's a good question. Normally, one can have a view on medium-term. I think what we've tried to do here is we've laid out the timeframe of the transformation program itself, which goes out to 2023 with obviously lasting benefits there and beyond. We should see it in this three to four-year period going out in time. We haven't set the specific timeframe for the targets per se. We also want to make sure that this is lasting benefits that we see to be medium-term and beyond. We would want to sustainably enhance the cash flow generation of the company and grow the company cash flows for the long-term.
Okay. Thanks for that. One of the previous targets for 2020 was to accomplish a specific EPS level. Now you have introduced medium-term targets on a going concern basis instead. Why did you choose to go for this approach instead of having a fixed target set in time?
I think that we introduced that back in the 2017 target setting for the 2020 targets. Clearly things can happen along the way. We feel that what is more important is to demonstrate how we build that franchise value of Intrum for the long-term, and that we can, as I said before, sustainably build a platform that can grow cash flows over a long period of time. That we believe is more aligned with the medium-term target setting.
Yes. Looking at growth, how should we think about CapEx in terms of total CapEx to be able to drive this 10%+ EPS growth? You have portfolio CapEx, obviously, but also other CapEx. What is required to drive sustainably 10%+ growth?
I think in terms of portfolio CapEx, if we break it down into a few components, we have portfolio CapEx for the portfolio investment business. We have transformation specific CapEx now for the transformation program. We have other CapEx, as you mentioned. I think what is important here. I made this comment in the Q3 report context, for instance, that we've been at a more replacement level for 2020. We see that coming out of the COVID pandemic into next year and beyond, that we can normalize our investment level for the coming years whilst staying on the deleveraging path that we have today laid out.
In terms of the transformation CapEx, it's clearly laid out in the presentation how much we expect to spend, and there's an appendix that you can all refer to see which timeframes we see that playing out. As for the other CapEx, we will clearly reallocate spend also towards the transformation program. We should see over time the other CapEx elements to reduce as we now build the global platform for Intrum. I don't know, Michael, if you want to elaborate further on that.
No, Anders, absolutely, I agree with what you've just laid out. It's principally the element of portfolio replenishment CapEx, where we've in the past and today very clearly laid out how we think about this year and the coming years. Then in terms of the specific CapEx associated with the transformation program, again, I would encourage everybody to look at the appendix where we've shown a very detailed phasing up to 2024 in terms of how OpEx, CapEx benefits and other elements play out. I think in terms of other CapEx, obviously, as you very rightly point out, Anders, as we see the transformation CapEx come in, we will also see some of the other CapEx that we see today phase out over time.
All right. Continuing on the Q&A. Another question on Cash EPS growth. You say that 10% underlying EPS growth is the target. How should we think about this hump coming from the JV in Italy? Should we look at 10% CAGR also beyond the hump in this context? How should we think about the SPV?
We have constructed a set of targets that can drive value for the company over the long-term, and these are medium-term targets that do not include a specific portfolio in mind. Michael, do you want to further elaborate on that?
No, absolutely. I mentioned something to this effect during my presentation as well. At the end of the day, what we're setting out here is really a vision of a sustainable trajectory that we're very confident we can achieve. That is not dependent on, in this case, the Italian JV portfolio. It is indeed a case of looking through that specific hump and looking at the sustainable trajectory that is unlocked by our focus both on ROIC as well as the benefits from the transformation program that will sustain us into the medium-term and beyond.
Which if you look at the portfolio in Italy, for instance, could mean that if we have a specific amount of cash flow coming from that portfolio, that would obviously be sort of on top of for that particular year. You should read this as an underlying driver for the whole company, not specific to that portfolio.
Clear. We have a question that is directed for Anette. How important is PI as a value proposition towards your clients in the servicing segment?
In that segment or to answer that, it's clearly as we noted on the slide presenting the different verticals, the banks and financial institution is by far the largest. Of course, in that market to have the full value chain of services all the way from the early stage services to the other hand, to be a trusted partner that the banks can use when there are, as I said, either macroeconomic or regulatory driven drivers or drivers where they need to offload their balance sheet. I would say it's a very important part of our integrated service offering to our clients and specifically within the banks and financial institutions, but also in some of the other areas like e-commerce, et cetera.
Okay. Thanks for that, Anette. Moving on in the list. There's a question on secured claims and also if we have seen any challenges in this business now in light of the second wave of COVID.
As I tried to comment upon a little bit, clearly the second wave is just upon us. It's a bit early to have a full view of what the consequences will be. Clear if courts are working more from home, particularly courts which are more paper-based and secure claims tend to be more legal action driven. If you also have suspension of collateral auctions, for instance, that you have in some places, that clearly would slow down again. It's not to the extent that we saw in the spring, we don't think. It will slow down compared to the Q3 speed that we started to pick up in some of those markets. It's fair to assume that we would have again, an impact, but it's hard to really put a number on it at this moment.
Understood. Looking at the transformation program and ONE Platform, are there any regulatory hurdles on a country level that will not allow us to fully harmonize and utilize the ONE Platform? how sensitive is this harmonization from a regulatory perspective?
Harry, do you want to go ahead with that one?
Absolutely. Well, we will be siloing the data. There will be a common application layer, a common functionality. Every country will for compliance reasons and GDPR reasons maintain an isolated tube of data.
Understood. Thank you. Moving on competition. We have a question on servicing and can you put the competition level today in context, looking at where we have been, where we are today, and where we expect to be going forward?
Anette, do you want to try?
Yeah, I can try and take a go on that. I believe that we have a very strong position in multiple markets across Europe. We have obviously a very strong footprint within the banks and financial institution, which we clearly believe that we will continue to develop with ONE Intrum. We have other markets where we are strong in some areas and less strong in others. I believe that both e-commerce, SME, as mentioned, we don't have the opportunity to serve across all markets currently in the harmonized way we serve, and we do it, but we have a huge potential there to grow.
Equally, I believe we also in the SME and in other markets, we will through ONE Intrum be clearly able to take the growth potential like I showed in the different verticals and by that closing the gap that we might have to some competitors that are niche focusing on some areas.
Thanks for that, Anette. Moving on. On this new ONE Platform, are you more dependent on partners in the new model? How much of the IT investments, for instance, are proprietary, and how much will you depend on third parties in this new model?
Harry, do you want to have a go at that?
Yeah. Out of the SEK 500 we're spending on technology and data management, I would say about SEK 250, SEK 300 is towards external partners, and the rest is internal.
Okay. Looking at the biggest hurdle to implement this new model, can you elaborate on these hurdles how they pan out, both from an internal perspective as well as an external perspective?
Well [crosstalk]
Continue on that?
Yeah, I'll continue on that. I think in terms of hurdles, obviously anything that is multi-local needs to be transformed. We need to go through the data. We need to replace the processes. This will take time. I think that is the biggest challenge. Once we have created the platform and we have the volumes on top there, then I think we're in a much more solid position. There was a second part of that question?
It was internal and external hurdles of implementing the new model.
Yes. There we come to the split that we have set out in the transfer of case management as presented in the program. We will start by moving the volumes of our own PI book making sure that we are a good servicer to ourselves before we start moving any major volumes of our servicing clients. That's built into the time plan so that we build up this experience before we work with our external clients.
Clear. Thank you, Harry. Moving on. Financially oriented question now. One way of improving the ROIC would be to use the fund model. One of your peers is closing its large first fund now. Any thoughts about this setup and your potential strategy around this?
Perhaps I can start on that. We have obviously observed with interest the development in this area by certainly one specific competitor who's been very vocal about it. We've looked at it, but it's not something that we are currently contemplated for ourselves. We have instead been developing a quite active co-investment agenda and building good relationships with a number of financial investors as we have been continuing to co-invest along and do continue also in this year to co-invest together with. As I covered in my presentation, we do see that with the buildup of NPLs coming post-COVID, that the financial investor community will be an important part of resolving the post-pandemic NPL formation. As such, we will certainly continue to look to partner with some of those financial investors to both attract servicing as well as for co-investment.
From our perspective, that's more the model that we've been pursuing and we have as part of our plans to continue to do.
Clear. Looking at the mix between servicing and purchasing, can you comment anything about how you view this mix going forward relative to where we are today?
I think what we have seen over the recent past has been a somewhat increasing portion of servicing as we have been building out our footprint across Europe for the last few years. I think for the going forward, and it's part of what also Michael described, we do see a balanced growth across the service segments or the service lines and the business segments. Therefore, we do not see a meaningful shift in the business mix between the three segments per se. Obviously from a quarter to another or from a year to another, there may be some variation, but nothing major or drastic from our perspective.
Okay. Looking at the past couple of years, Intrum has gone through transformational M&As including the Lindorff merger, but also partnership additions such as Piraeus and also Intesa. Looking forward, how should we think about M&As? It seems, judging by today's session, that it's less of a priority. Is that correctly understood?
What we've tried to demonstrate today is that we've been going through a journey of significant expansion for the last three, four years since the merger and subsequent build-out of our full client platform across all the major markets in Europe. Now we're launching the transformation program with the aim to really leverage that platform and create a global operating model that can be scalable, digital, and relevant for our clients, meaning that we can really extract the value of the platform that we have built. From our perspective, the main priority for the next few years would be to deliver on the transformation program. We don't exclude, per se, to do M&A, but it would be not the first priority, as I said, because the transformation program is the number one priority.
Number two, it will always be considered in the lens of our financial targets, including our leverage ratio. I think that from that perspective, the main priority for us going forward is the transformation program and delivering on the transformation in terms of increasing our return on capital and driving growth in cash flow and Cash EPS.
Okay. Moving on, coming back to transformation again. Are there any impairments that we should expect and should be included in the implementation costs here? Sounds like IT systems are to be changed to a large extent, and that could obviously lead to excess values on the balance sheet.
Michael, do you want to cover that one?
Thank you, Anders. No, we don't expect any specific impairments. We have looked through our balance sheet in the context of this transformation program and have aligned the useful life of any assets with what we see as their use relative to the transformation program phasing in. While you may see a slightly higher depreciation, there should not be any expectation of an impairment in conjunction with the transformation program.
Thanks, Michael. Moving on. Looking at Intrum from the client perspective, how does Intrum stand relative to peers on client satisfaction? What is value index on for instance, ethical collections?
Anette, do you want to cover the point on client satisfaction?
Yeah, I can do that. We measure client satisfaction on a regular basis, as Anders mentioned also as part of our sustainability goals. We have a quite high average client satisfaction. It's difficult to say because there's a bit different questions when each vendor measures that. According to our partner in this area, we are at a high level of client satisfaction, but we are still aiming at increasing that during the period ahead of us, also driven by the transformation. I'll give it back to you, Anders, on the next one.
Yeah. Thank you. In terms of the value index, clearly it is important for us to reach our sustainability goals, and we have set out this metric to make sure that we can measure that in a measurable way. I think that for us, living up to this goal is extremely important to make sure that we can deliver on that value to our customers. I think that's the goal of the value index.
Looking at related question to maybe client and also sustainability and ethical. What does responsible portfolio selection mean? It was something you touched upon in your early remarks today. Can we get concrete examples of what the thresholds are, for instance?
One example is we will never buy a portfolio, for instance, where it's been originated in a non-sustainable fashion. We would look at the origination criteria of a portfolio as part of the evaluation as an example. If it's sold by a counterparty which does not live up to our sustainability criteria. It can be either the portfolio itself and its composition, we'll analyze that, and we'll deselect ones that don't fit, or it can be the vendor itself.
Clear. There was a comment on flexible workforce today. What does this mean? Is it that you will introduce different employment contracts, or how should we think about this?
Harry, do you want to comment on that?
Yep. I think when we talk about flexible, we mean able to pool resources really, so that we can use our scale across multiple jurisdictions rather than every jurisdiction building up their own, let's say, fixed cost base. That's how we should think about flexible workforce.
Clear. Moving on. Related question also to transformation and ONE Intrum coming now on how much effort is there from clients to go over to the ONE Intrum platform? You mentioned on servicing it will require some effort. On SME sounds like it's self-onboarding. Can you elaborate, please?
Harry, do you want to try that one as well?
Yeah. We have a number of large contracts where we are deeply integrated with the clients. Obviously, our goal is to make sure that there is limited work for the client side as we change our backend. We will work on that internally, but obviously we need to cooperate with the client, making sure to test these changes that we are doing on our side. We should also remember that during this phase, our clients are also changing. Many of the clients will contact us and say, "Hey, we are anyway digitalizing, changing ERPs, changing finance systems, et cetera. Could we set up a project here and collaborate going forward?"
Understood. Moving on. Should we see an elevated risk now for increased cost for customer client support in the shorter term when clients get used to the new systems?
Harry, do you want to try that as well?
I can try that. I would guess that the clients typically use our portals today, and those are already being updated and simplified. Where there is significant change to the functionality, we have online videos for training our clients. If there would be a specific, almost like a BPO type relationship where we have tighter relationships than that, then we will have to set up a joint sessions to make sure that all parties understand the new processes.
Okay. Moving on to servicing and UTPs. Can you elaborate on your capabilities to that, and if you are looking to add to these capabilities, especially in the strategic markets?
Perhaps I can start with that. Maybe Anette, if you want to comment as well. In terms of the UTPs, it's clearly a big area and it's been a big focus for the strategic markets. We should also remember that early arrears is something we work with across our entire footprint. As I tried to say in my beginnings introduction, our servicing business across the CMS segment is largely early arrears. The vast majority of the volume is early arrears, which in the sort of UTP concept came very much out of Italy, but it's really early arrears that we're working with there. In terms of the strategic markets, we have now a built-out capability on UTPs in Italy.
A significant portion of what we work with in Greece is what could be labeled UTPs because it spans the entire spectrum of arrears that we're servicing for various banks. In Spain, we have so far a more limited capability, but we look at what the next wave here will entail and see if we should continue to invest also in the Spanish business for the earlier arrears. We have some capability, and we do some early arrears on the consumer unsecured side, but not so much on the secured side in Spain.
I think by that, Anders, you have really answered that question, but just to underline what you say, and as I also said, going through the respective markets, we see that area growing, but mainly within the consumer unsecured, driven by also COVID-19, and the banks need to focus on their core processes.
Thanks, Anette. Thanks, Anders. Moving on. There was a slide on financial investors in your section, Anders, mentioning co-investments and servicing. Can you comment if you do anything on this today? Are you seen as a dependent competitor in this context?
We have for the last number of years been developing our co-investment strategy. We have a set of financial investors that we have been working with on a more regular basis. One of the more public ones is the portfolio in Italy that we did together with a co-investor, but we've done several others, and we continue to do each year a number of co-investments with financial investors. From our perspective, having these relationships is important both because it's a big pool of potential servicing revenue that we would like to attract to our platform for servicing. From our perspective, we have the financial capacity to co-invest with those financial investors to ensure that we have alignment of interest, where we can take a smaller portion, and we have alignment on interest to make sure that we maximize the value of the portfolio for the investor and for ourselves.
From our perspective, we don't see that as a conflict.
Clear. Thank you. Moving on to the portfolio investment side, and looking at where Intrum is coming from and where we stand today, given the outlook, can you comment on the mix of asset classes going forward? Where do you expect to grow? Do you see secure growing? Do we see unsecured? Is it SME? What is in your crystal ball, and what does history tell us?
I think if you look at one of the slides in my section, you can see that when we look at the expansion of the NPLs now for the post-pandemic NPL formation, we can see that both the household segment, which is obviously consumer and retail mortgages, as well as small business loans, expand very rapidly for the coming years. From our perspective, that's where we see where the supply is coming from. In terms of what we have invested in the past and what our book looks like, as I'm sure most of you have seen as it's been in our quarterly reports, we have approximately 80% of our invested book in consumer unsecured. We have about 20% of our book in secured claims and a little bit of real estate. We don't expect those proportions to dramatically change.
I think that we will continue to support our clients and to ensure that we can help them along the whole value chain. We do expect them, partly given our footprint and partly because of the more elevated business opportunity we now see, that will continue to be approximately the proportion that we see also going forward. Also, I think one of the other trends that we have seen over the last few years is more mixed portfolios where clients sell both consumer unsecured and business loans together in the same transaction, and obviously that is something that we'll continue to support them with.
Yep. Looking at another topic discussed today is regulatory landscape. Is there anything that we should be mindful of in terms of regulatory changes in any of the countries where you operate today, as of today or as of tomorrow?
I think what you have seen for the last number of years is a gradual sort of development in regulation across the countries where we operate. Most of that regulation has been national or local for each jurisdiction. For instance, this year there's a new debt collection law in Norway, for instance, that has been just introduced. Anette can comment a bit more on that. We're also seeing the introduction of changes to the regime a little bit in Finland. What I think most importantly is we've seen this for many years across all our countries. Every time it happens, we adjust. I think over time what we have seen is that the larger you are, the more able you are to absorb those changes. Ultimately it makes it more difficult if you're a small player to actually adapt to the new regulation.
Therefore, it's been on the margin positive for us over time with the regulatory changes. I think if you take a step back on a more overarching level, as I also tried to say in my presentation, we see regulation as a positive for us because as a market leader, we want our market is developed and we have a well-functioning market, which also includes the fair and ethical treatment for customers. For that, for us, this is very important. We work also at the EU level to work with the regulatory authorities also from a European-wide level to try to influence them in this direction. I think from our perspective, we see this as a positive development overall for us and for our customers and clients. Anette, did you want to comment a little bit on that?
I think it's known for some, it was a change in the fee regime in Norway, which was applied by 1st of October or November, somewhere around there. The new collection law is being finalized to be implemented a bit later. As Anders said, that's also something we see happening across our markets. We also see it as an opportunity now with the transformation and the scale we have in such a market as Norway, how that can also represent an opportunity for us to take a larger position and grow our business, not only reduce a bit, which it will, and we will work also with efficiency gains to mitigate that as is part of our daily life, of course.
Thanks, Anette, and thanks, Anders. We're moving on to a couple of questions on Italy and some related to the Intesa partnership. Intesa is said to potentially sell quite a high volume of NPLs, which potentially then would leave the servicing perimeter of the partnership. If that happens, how and if will it impact Intrum in Italy?
I think what we have seen with many of our clients for a long period of time is that we are in a long-term relationship with them and for periods of time they have the desire to obviously address their NPL ratios. I think from our perspective, we obviously want to be there to support our clients in their ambitions to realize those plans. From our perspective, it's clearly also we want to make sure that we can capture those volumes coming out in the market. I think from our perspective, we see that as a normal part of the development, particularly in an environment like the one we're seeing now with increasing pressures on NPLs. We're also seeing that flows are increasing in these markets and Italy in particular.
I think that over time, I think this is a positive business opportunity for us, and as we've seen particularly in Italy specifically, what we see a lot is many portfolios are being transformed into GACS securitizations, and clearly from our perspective, we want to grow our GACS capability as well in Italy.
Moving on the Intesa partnership platform, how has the success been for you to add third-party volumes on top of the existing servicing partnership that you have?
Clearly, the existing servicing partnership is very large in terms of total assets being managed. It's between EUR 35 billion and EUR 40 billion that we manage on the platform. That is in itself very large. We have during this year and also during last year started to add external third party volumes to the platform, both in terms of NPL as well as some UTP real estate volumes. We are starting that up. It took a little bit of time to get started in terms of building that organic capability. Now with the aftermath, if you will, of COVID and the significant buildup of volumes that we're seeing, we're seeing that clearly the inflows are expected to increase over time.
Thanks for that, Anders. We have a few more questions and then I think we will conclude for today. One of these questions relates to the dividend and looking at your ambition now to have an absolute annual increase in the dividend in line with recurring cash earnings growth over time. What happens if earnings decline for one reason or another in the next coming years? How should we view the dividend in light of that?
It's very clear the way that the dividend policy is now expressed, which is to have an absolute annual increase, which means that even if we have some short-term fluctuations in the Cash EPS development, we still will strive for a continued annual increase of the dividend, which creates a long-term stable shareholder remuneration for our investors. We have seen it in the recent past when we previously worked with an EPS target that we've had some fluctuations from year to year, but we continue to remain focused on trying to have a stable path for the dividend development over the previous years, and we'll continue to work with that over the coming years. It's a very clear annual increase of the dividend.
Understood. On portfolio investments, could you help us crystallize a bit further and maybe set the scene on how we should think about the current trends in the NPL market with volumes as well as prices and how we should think about on the backdrop of the pandemic and looking forward? If you could elaborate a bit more on that.
Broad question. I think what we're trying to say, both me and Michael have been sort of talking about that during the session today, is that we're clearly seeing a very rapid buildup of NPLs across Europe. That we do expect, as it did after the financial crisis a decade ago, to be addressed by the banks under the regulatory pressures on the banks will lead them to have to start addressing them. This time, we believe it's going to be sooner than it was 10 years ago. We expect that to translate into more portfolios for servicing and more portfolios being sold in the market. In terms of the exact volumes for each quarter or year, it's very hard to predict.
In terms of how COVID now plays out in terms of the market opportunity, we're clearly seeing now that we have a bit more sort of limited Q4 season than normally because there is a COVID effect in terms of the volumes in the market in Q4. It's not as active. Normally, a Q4 is a very active quarter. There's a bit of damper on that in terms of the total volumes. Depending on how the second wave now plays out it's very hard to predict clearly. If we have a return to what we saw in our late Q2 and the Q3 coming into 2021, it will probably normalize faster. If we have a more extended second wave it will probably take until mid-year 2021 before we see normalization. That also comes from the volume being sold by the banks.
Second half of next year and into 2022, we are very optimistic that volumes would grow meaningfully and we're clearly seeing the improved pricing picture supporting the return on investment on the portfolio business.
Okay. Thank you, Anders. Thank you, Michael. Thank you, Anette, and thank you, Harry. I think by that we should conclude. No guns have been fired. I'm still alive. I think by that we should conclude the Q&A for today and thereby I also think we should conclude for the entire presentation. Thank you, everyone.
Thank you [crosstalk]