BOND INVESTORS PRESENTATION APRIL 18 TH , 2017
D ISCLAIMER The discussion of business objectives set forth in this presentation are by their nature forward- looking statements. Such objectives are based on management’s current beliefs, expectations, assumptions and business plan and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from the objectives described. No assurance can be given that the objectives described in this presentation will be achieved. Forward- looking statements involve assessments about matters that are inherently uncertain and actual results may differ for a variety of reasons. You are reminded that all forward-looking statements in this presentation are made as of the date hereof and for the avoidance of doubt, Promontoria MCS does not undertake to update any such statement made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. For the avoidance of doubt, Promontoria MCS does not accept any liability in respect of any such forward-looking statements and investors should not place undue reliance on any such forward-looking statements. This presentation and any related oral presentation should not form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. This presentation does not constitute a recommendation regarding the securities of Promontoria MCS. 2
P RESENTERS Jérémie Dyen Marcelo Amram Chief Executive Officer Group Chief Financial Officer • Joined MCS in 2009 • Joined MCS in 2016 • 11 years’ experience in private equity in • Previously CFO of Microcred, Deputy London and Paris Group CFO of Newedge and held various (3i, Chequers, Bridgepoint) positions at Société Générale 3
K EY M ESSAGES 1 2016 was a Pivotal Year for the MCS Group 2 Record-Breaking Performance in Debt Purchasing Business Landmark Debt Servicing Contracts Won, Confirming the 3 Accelerated Diversification of the MCS Group Revenues 4 Strong Balance Sheet with Conservative Leverage 5 Favourable Outlook for 2017 4
S TRATEGIC U PDATE 2016 WAS A PIVOTAL YEAR FOR MCS • The performance of MCS over the last twelve months has been noticeably robust Debt Purchasing business enjoyed strong collections as well as a record volume of acquisitions Debt Servicing benefited from the growth of volumes in existing contracts Attributable Cash EBITDA and EBITDA enjoyed record growth • We continued to transform our business to reinforce its leading position as a trusted partner to banks in France MCS successfully carried out its first issue in the bond market in September 2016, providing financial resources commensurate with the potential of the business We maintained significant investment efforts in the structure of our Group (staff, Executive Committee, IT) MCS won landmark servicing contracts with banks in order to service both their performing and non- performing debt portfolios, auguring an increased diversification of our activities in the future • Whilst we remain faithful to the model that we have been pursuing for over 30 years, recent developments confirm the acceleration of our growth and validate the pertinence of our strategy 5
K EY F INANCIAL H IGHLIGHTS Total Cash Revenues (1) Attributable 120m ERC ( € M) ( € M) Growth: 10% 33 49 357 92.0 327 83.6 8.5 8.0 83.5 75.6 2015 2016 2015 2016 Gross Collections Servicing Attributable 120 months ERC Portfolio Acquisitions Attributable EBITDA and Attributable Cash EBITDA Margins (1) Reported Net Result ( € M) ( € M) Growth: 89% 62% 44% 61% 49% 52.3 12.4 46.8 33.4 6.6 23.4 2015 2016 2015 2016 Attrib. Cash EBITDA Attrib. EBITDA Corresponding Margins (Gross) (1) In order to give a more comprehensive view of servicing revenues and provide better comparability with peers, some servicing revenues which were previously encapsulated within our “Income from loans" have been reallocated to Servicing revenues 6
R ECORD A CQUISITION ACTIVITY Highlights Debt Purchasing Volumes ( € M) • With € 49M in purchases made during the year, 2016 sets a new record for MCS in terms of portfolio acquisitions, after ten years of continuous growth 49 • More than 40% of our acquisitions this year were done with banks which were first-time clients for MCS 38 This positive business dynamic confirms the 33 trend we have seen from French banks, increasingly open to debt sales transactions 27 On this client segment, based on the operations we are aware of, we believe that we have reinforced our position as leader with a greater than 40% market share in 2016, both in price paid and in number of transactions • We have seen again in 2016 a robust fourth quarter in terms of acquisitions, as it is traditionally the case in our business, to a lesser extent though Avg. 2007 -2009 Avg. 2010 -2012 Avg. 2013 -2015 2016 than in 2015 7
MCS M AINTAINS S UPERIOR I NVESTMENT R ETURNS Highlights Gross Money Multiples • Our expected returns continue to be consistent: Our Gross money multiples on 120 2.3x 2.3x 2.3x 2.3x months (based on a combination of 2.2x 2.1x actuals and forecasts) are still around 2x 0.5x 0.1x • 2016 acquisitions show to date, on average, a 0.7x 1.7x 1.0x 1.2x lower money multiple than before. 1.8x Our blended IRRs at underwriting have not changed vs. 2015 but our acquisition mix for 2016 included some investments 1.5x 1.1x 2.0x 1.9x presenting a shorter duration. 1.5x 1.3x Our money multiples forecasts at 0.5x underwriting have been historically 0.2x conservative Pre 2011 2011 2012 2013 2014 2015 2016 Gross Collections to Date Remaining 120m ERC 8
ERC G ROWTH F UELLED BY R OBUST A CQUISITIONS Highlights ERC Evolution 120M Attributable ERC ( € M) • Overall, we have experienced a 9% yoy increase of our 120-month Attributable ERC in 2016 to € 357M 84.8 11.7 • This increase has been mainly fuelled by our 357.2 13.5 327.3 robust acquisition campaign that has more (80.2) than offset strong collections on our backbook across the year Dec-15 Acquisitions Collections Rolling Effect Revaluations Dec-16 • It was also supplemented by two other recurring factors: ERC 2016 Split Per Year ( € M) A rolling effect for € 13.5M or 3.8% of ERC - our collection curves usually exceeding 120 months given the nature of our claims A revaluation effect for € 11.7M or 3.3% of ERC - due to the overperformance of our collections vs. an historically conservative forecast modelling 0-12 13-24 25-36 37-48 49-60 61-72 73-84 85-96 97-108 109-120 Months Months Months Months Months Months Months Months Months Months Gross Attributable 9
S TRONG M OMENTUM FOR P ERFORMING LOANS S ERVICING A CTIVITIES Servicing Revenues Highlights ( € M) • Servicing revenues grew by 6% in 2016 at € 8.5M • In particular, our performing loans servicing business has seen strong organic growth in 2016 (+28%), on the basis of two significant contracts won in 2014 and 2015 where we enjoy a sustained development of our Assets 8.5 under Management 8.0 7.6 • This growth is poised to accelerate in 2017, based on the above as well as on the landmark contract that we signed with Crédit Immobilier de France (CIF) in 2016 2014 2015 2016 and which we started to execute on April 1 st , 2017 : We entered into a long-term servicing agreement • In order to give a more comprehensive view of our with CIF which will lead to a gradual transfer of CIF servicing revenues and provide better comparability servicing activities to MCS. As part of the with our peers, we have included some servicing agreement, we have taken over the CIF servicing revenues which were previously encapsulated platforms located in Toulouse and Poitiers (c. 55 within our “Income from loans” into our Servicing € 3Bn staff) and onboarded over worth of and other revenues mortgages • With this revised presentation, Loan Servicing This contract represents a unique opportunity for MCS to become the undisputed leader in revenues now represent 12% of our total net residential real estate loan management on behalf revenues. We expect it to represent in excess of of third parties in France and further diversify our 20% of our total revenues in 2017, and confirm our sources of revenues goal of raising this percentage to over 25% in the medium term 10
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