BOND INVESTORS PRESENTATION APRIL 30 TH , 2018 C ONFIDENTIAL AND P ROPRIETARY 1
D ISCLAIMER This presentation contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and the securities laws of other jurisdictions. In some cases, these forward-looking statements can be identified by the use of forward-looking terminology, including the words "believes", "estimates", "aims", "targets", "anticipates", "expects", "intends", "plans", "continues", "ongoing", "potential", "product", "projects", "guidance", "seeks", "may", "will", "could", "would", "should" or, in each case, their negative, or other variations or comparable terminology or by discussions of strategies, plans, objectives, targets, goals, future events or intentions. These forward-looking statements include matters that are not historical facts. They appear in a number of places throughout this presentation and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, competition in areas of our business, outlook and growth prospects, strategies and the industry in which we operate. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity and the development of the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in this presentation. In addition, even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate are consistent with the forward-looking statements contained in this presentation, those results or developments may not be indicative of results or developments in subsequent periods. For a description of important factors that could cause those material differences, we direct you to the section of our Annual Report entitled "Risk Factors". Any forward-looking statements in this presentation are based on plans, estimates and projections as they are currently available to our management. We undertake no obligation, and do not expect, to publicly update or publicly revise any forward-looking statement, whether as a result of new information, future events or otherwise. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the cautionary statements referred to above and contained elsewhere in this presentation and in our Annual Report. C ONFIDENTIAL AND P ROPRIETARY 2
K EY HIGHLIGHTS FOR 2017 • Solid operational and financial delivery 1 Strong organic adjusted EBITDA growth Robust backbook and servicing performance supporting cash generation 2 • Successful purchasing year in a transitioning market Disciplined underwriting to protect returns in a growing yet competitive market € 45m invested in high quality portfolios 3 • Increased diversification with fast growing servicing revenues Successful implementation of landmark CIF contract Early achievement of loan servicing revenues contribution target 4 • Significant improvement in capital structure and cost of funding New financing structure leading to a reduced cost of funding with extended debt maturity Rapid deleveraging and significant progress in available liquidity • Change of ownership with meaningful equity investment from BC Partners 5 Support from a leading European financial services investor Management retains significant economic ownership C ONFIDENTIAL AND P ROPRIETARY 3
P ROFITABLE ORGANIC GROWTH LEADING TO STRONG DELEVERAGING Total Cash Revenues EBITDA and Cash EBITDA Margins ( € m) 12% 25% ( € m) 61% 49% 62% 41% +21% 68.8 111.5 56.3 91.9 18.3 8.5 34.0 29.3 93.2 83.4 2016 2017 2016 2017 Gross Collections Servicing Cash EBITDA EBITDA Servicing % in Net Revenues Corresponding Margins Net Debt on Cash EBITDA (LTM) Portfolio Acquisitions and 120m Gross ERC ( € m) 377 368 (1.1)x 49 45 4.3x 4.0x 3.2x 2016 2017 Q2 2017 Q3 2017 Q4 2017 Portfolio Acquisitions 120m Gross ERC C ONFIDENTIAL AND P ROPRIETARY 4
M AINTAINED DISCIPLINED PRICING POLICY IN A GROWING BUT COMPETITIVE F RENCH MARKET The French debt purchasing market • Estimated Market Size (1) ( € m) Healthy Purchasing Volumes in 2017 ( € m) has overall doubled in terms of purchase price since last year 51 deals 44 deals 49 • Fr ench banks increasingly open to debt 45 sales transactions, partly incentivised by ~200 38 Increasing regulatory pressure on NPL 33 Higher average price paid by portfolio ~100 In that context, we maintained our • purchasing discipline and favoured our returns over market share – as we consistently did throughout our history 2016 2017 Avg. Avg. 2016 2017 2010-2012 2013-2015 Historical Track Record of Purchasing Discipline Over € 700M Invested since 1997 Ability to ramp-up Sale of certain Unattractive Cumulative investment in portfolios ( € m) portfolio acquisitions portfolios in risk / reward 100 when returns are 700 ’06 - ’07 profile deemed more appealing pre-crisis 80 560 60 420 40 280 20 140 0 – 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 Yearly Investments Cumulative Investments 1) Based on management estimate. C ONFIDENTIAL AND P ROPRIETARY 5
A BILITY TO PURCHASE SELECTIVELY AND FOCUS ON HIGHER QUALITY ASSETS Selective Bidding Approach Strong Focus on Asset Quality and Risk Adjusted Returns • We used the opportunity of a growing market to bid Win Ratio Win Ratio selectively, focusing on: # Deals By # Deals By Price Deals and assets that we know and like, leveraging our Won 22 56% 61% Lost 17 44% 39% data sets and models 2016 Total 39 100% 100% High quality portfolios offering attractive risk-adjusted Bid Ratio (1) 76% returns over market share Won 14 50% 44% In doing so, we maintained investments volumes at levels • Lost 14 50% 56% 2017 close to those of last year, whilst protecting our returns Total 28 100% 100% Bid Ratio (1) 64% Case Study 1: Acquisition of a Large Mortgage Portfolio Case Study 2: Acquisition of a Large Paying Portfolio • Acquisition of a large non-performing portfolio from a • Acquisition of a large portfolio of paying, unsecured prominent French mortgage lender consumer loans from a specialist credit institution € 14m of equity invested representing 30% of the annual • € 10m of equity invested representing 23% of the annual • investments investments • Strong overcollateralization with mortgage collateral • 7,300 regularly paying accounts accounting for 83% of representing 184% of the total purchase price estimated ERC 1) Calculated as total number of deals we bid for divided by total number of transactions seen in the market (51 and 44 respectively in 2016 and 2017). C ONFIDENTIAL AND P ROPRIETARY 6
C ONTINUED STRONG INVESTMENT RETURNS AND OUTPERFORMANCE OVER TIME P ROVEN DISCIPLINE AND CONSERVATISM AT DUE DILIGENCE • Our blended IRRs at underwriting are in line with 2016 levels despite increased share of high-quality assets (paying, secured, collateralised) offering attractive risk-adjusted returns • Our gross money multiples have been consistently outperforming due diligence forecasts, due to our conservative approach at underwriting and our strong collection performance • Across all portfolio vintages, our gross money multiples on 120 months remain strong and stable – still around 2x based on combination of actuals and forecasts • We have not experienced a loss on any portfolio purchase ever to date Evolution of Gross Money Multiples (1) Gross Money Multiples by Vintage (1) (x) 1.5x 1.3x 1.6x 1.8x 1.7x 1.8x 1.9x 1.8x 1.7x 1.7x 1.6x 3.0x 3.0x 2.5x 2.4x 2.3x 2.8x 2.2x 2.2x 2.1x 2.6x 2.0x 2.0x 1.7x 1.6x 2.1x 1.7x 1.5x 1.3x 0.8x 0.6x 0.2x Pre 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2007 MoM at Due Diligence Collections to date Total MoM 1) Based on actual and forecasted collections for spot portfolios as at December 31, 2017. C ONFIDENTIAL AND P ROPRIETARY 7
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