CABOT CREDIT MANAGEMENT Financial Results For the six months ended 30 June 2019 8 August 2019 Proprietary and Confidential
DISCLAIMER This presentation has been prepared by Cabot Credit Management (“the Company”) solely for informational purposes. For the purposes of this disclaimer, the presentation that follows shall mean and include the slides that follow, the oral presentation of the slides by the Company or any person on their behalf, any question-and-answer session that follows the oral presentation, hard copies of this document and any materials distributed in connection with the presentation. By attending the meeting at which the presentation is made, dialling into the teleconference during which the presentation is made or reading the presentation, you will be deemed to have agreed to all of the restrictions that apply with regard to the presentation and acknowledged that you understand the legal and regulatory sanctions attached to the misuse, disclosure or improper circulation of the presentation. The Company has included non-IFRS financial measures in this presentation. 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We have not verified the accuracy of such information, data or predictions contained in this report that were taken or derived from industry publications, public documents of our competitors or other external sources. Further, our competitors may define our and their markets differently than we do. In addition, past performance of the Company is not indicative of future performance. The future performance of the Company will depend on numerous factors which are subject to uncertainty. Certain statements contained in this document that are not statements of historical fact, including, without limitation, any statements preceded by, followed by or including the words “targets,” “believes,” “expects,” “aims,” “intends,” “may,” “anticipates,” “would,” “could” or simi lar expressions or the negative thereof, constitute forward-looking statements, notwithstanding that such statements are not specifically identified. 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TODAY’S PRESENTERS Ken Stannard Craig Buick Chief Executive Officer Chief Financial Officer ➢ Joined Cabot Group in April 2012 ➢ Joined Cabot Group in January 2016 ➢ 20+ years ’ experience in Financial Services ➢ 20+ year s’ Finance experience ➢ Previous roles: ➢ Previous roles: Managing Director – Credit Cards Managing Director – Audit, Europe and Asia Managing Director – UK and S.Africa CFO – Italy Controller – UK Bank Head of European Operations PricewaterhouseCoopers 2 Proprietary and Confidential
AGENDA • Key highlights • Financial review • Outlook • Q & A 3 Proprietary and Confidential
KEY HIGHLIGHTS Proprietary and Confidential
SUCCESSFULLY DELIVERING ON OUR CORE STRATEGY ➢ Continued execution of key initiatives ✓ Strengthening front book returns (IRR ~200bps higher vs H1 ’ 18) ✓ Improved LTM Adjusted EBITDA margin to 66%, up from 63% at Q2 ’ 18 ✓ Integration of Spanish businesses on track ➢ Reduced leverage from 4.1x at December 2018 to 3.8x at June 2019 ✓ Net debt flat whilst deploying £117m of capital in H1 ’ 19 ✓ LTM Adjusted EBITDA up 18% and 120 month ERC up £64m compared to December 2018 ➢ Successfully issued new € 400m Floating Rate Note in June 2019 ✓ Redeemed all existing 2021 maturities ✓ No bond maturities within the next four years 5 Proprietary and Confidential
CONTINUED STRONG FINANCIAL PERFORMANCE IN H1’19 DP Collections Servicing revenues Portfolio acquisitions (YTD Jun ‘18 : £220.1m) (YTD Jun ‘18 : £41.1m) (YTD Jun ‘18 : £160.0m) -27% +7% +9% £236.5m £44.9m £116.8m Adjusted EBITDA 120-Month ERC Leverage (YTD Jun ‘18 : £163.4m) (June 2018: £2.5bn) (June 2018: 4.2x ) -0.4x +15% +9% £187.1m £2.7bn 3.8x 6 Proprietary and Confidential
FINANCIAL REVIEW Proprietary and Confidential
CONTROLLED GROWTH IN REVENUE AND PROFITABILITY 17% year over year increase in LTM revenue (£’m) 450 40% 415 405 393 373 400 35% 353 350 30% 86 84 82 79 67 300 25% 250 20% 21% 21% 21% 21% 200 15% 19% 150 10% 100 5% 50 0% 281 288 299 308 314 - -5% LTM Q218 LTM Q318 LTM Q418 LTM Q119 LTM Q219 DP Revenue Servicing Revenue Other Revenue Servicing % of Total 18% year over year increase in LTM Adjusted EBITDA (£’m) 377 400,000 80.0% 363 353 331 350,000 75.0% 320 300,000 70.0% 250,000 65.0% 66% 65% 64% 200,000 60.0% 63% 63% 150,000 55.0% 100,000 50.0% 45.0% 50,000 40.0% - LTM Q218 LTM Q318 LTM Q418 LTM Q119 LTM Q219 Adjusted EBITDA Adj EBITDA Margin 8 Proprietary and Confidential
FOCUSED CAPITAL DEPLOYMENTS TO DELIVER DELEVERAGING AND ENHANCED RETURNS Capital deployed – LTM £290m 120 month ERC growth (£’m) (£’m) +9% 110 18 87 86 65 28 52 2,744 2,680 58 79 2,519 24 2,370 58 32 39 25 13 13 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 2017 2018 Q2 18 Q2 19 Paying Non-Paying Secured Capital deployed by geography 120m ERC by region YTD Q2'18 - £160m YTD Q2'19 £117m Europe %, 21% 18% 49% 51% 82% UK %, 79% UK % Europe % UK % Europe % 9 Proprietary and Confidential
CONSISTENT, RELIABLE CASH FLOW GENERATION IN EXCESS OF ERC REPLENISHMENT NEEDS Distribution of 180m Gross ERC by period as of 30-Jun-2019 £2.7bn £3.1bn 120 month ERC (£’m) 180 month ERC 495 436 361 309 269 233 200 171 148 122 106 90 80 71 64 Yr1 Yr2 Yr3 Yr4 Yr5 Yr6 Yr7 Yr8 Yr9 Yr10 Yr11 Yr12 Yr13 Yr14 Yr15 Excess cash generation at 23% of LTM Adj EBITDA 21 85 377 186 271 85 LTM Adj. EBITDA Capex & cash taxes Cash interest Free Cash Flow ERC replenishment rate Excess cash generation 10 Proprietary and Confidential
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