MCS Groupe Bond Investors presentation November 29, 2018 - PowerPoint PPT Presentation

MCS Groupe Bond Investors presentation November 29, 2018 28/11/2018 1

Disclaimer 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. 28/11/2018 Confidential & Proprietary 2

Key Highlights for 2018 – in Sept-18 YTD 1  Solid operational and financial performance  Robust operating performance underpinned by balanced contribution from both debt purchasing and servicing activities.  Strong organic Cash EBITDA growth to €48m in Sept-18 YTD (up 10% YoY). 2  Continued diversification with increasing servicing revenues contribution  €15m of servicing revenues end of September 2018 (+28% from Sept-17 YTD), driven by contributions from both performing and NPL servicing activities.  Servicing revenues represented 27% of Group net revenues for Sept-18 YTD (Dec-17 YTD, 25%). 3  Sustained improvement in capital structure and liquidity  Continued deleveraging with Net Debt to LTM Cash EBITDA declining to 2.7x, as of September 2018 (pro-forma DSO acquisition reaching 3.2x).  Significant dry powder, with €67m of cash (pro-forma DSO acquisition: €81m) and €50m of undrawn RCF, readily available to seize attractive investment opportunities. 4  Integration of DSOgroup on track to create the French one-stop shop in CMS  On October 5, 2018, MCS & DSO Group announced the completion of their tie-up following approval by the anti-trust regulatory authorities and agreement by staff representative bodies.  In connection with the closing of the acquisition, the company successfully issued €120 million in principal amount of senior secured floating rate notes due 2024. In addition, the RCF was up-sized from €40m to €50m.  The funds advised by BC Partners, Montefiore Investment and the management of MCS & DSO collectively injected €72m of additional equity as part of the transaction.  The Group’s new governance has been defined and all teams have already initiated most of the integration workstreams. 28/11/2018 Confidential & Proprietary 3

Solid growth leading to strong deleveraging – MCS Group Total Cash Revenues Cash EBITDA and Cash EBITDA Margins (€m) (€m) 12% 25% 27% 61% 62% 62% 118.6 111.5 73.3 68.8 91.9 21.7 18.3 56.3 8.5 96.8 93.2 83.4 2016 2017 LTM Sept-18 2016 2017 LTM Sept-18 Gross Collections Servicing Servicing as % of net revenue Cash EBITDA (1) Cash EBITDA margin Portfolio Acquisitions and 120m Gross ERC Net Debt / Cash EBITDA (LTM) (€m) 370 342 325 Continued strict investment 3.2x 31 2.9x discipline 2.7x 21 14 2016 - 9M 2017 - 9M 2018 - 9M Q3 2017 Q4 2017 Q3 2018 Portfolio Acquisitions 120m Gross ERC 1) Cash EBITDA margin calculated as Cash EBITDA as a percentage of Total Cash Revenues. 28/11/2018 Confidential & Proprietary 4

Strong and resilient combined financial profile: pro-forma MCS&DSO Total Cash Revenues Cash EBITDA and Cash EBITDA Margins (€m) (€m) 46% 47% 51% 54% 201.9 95.2 100 165.5 76.3 80.7 63.4 50 121.2 102.1 0 LTM Sept-17 LTM Sept-18 LTM Sept-17 LTM Sept-18 Gross Collections Servicing Servicing as % of net revenue Cash EBITDA (1) Cash EBITDA margin Portfolio Acquisitions and 120m Gross ERC Net Debt / Cash EBITDA (LTM) (€m) 416 431 3.2x 37 3.0x 35 2017 - 9M 2018 - 9M Q2 2018 Q3 2018 Portfolio Acquisitions 120m Gross ERC 1) Cash EBITDA margin calculated as Cash EBITDA as a percentage of Total Cash Revenues. 28/11/2018 Confidential & Proprietary 5

Conservative leverage profile vs. Peers & significant Servicing Contribution Net Debt / Cash EBITDA (LTM) (1) Servicing revenue contribution (as % of net revenues) () 54% 9% 54% 3% (4) 20% (4) 23% (4) 26% (7) 5.4x 4.2x 4.2x 4.2x 4.0x 3.8x 3.2x (3) (5) (3) (6) Q3 2018 B2Holding Intrum Hoist Cabot Arrow Lowell Pro-forma MCS&DSO  Prudent target leverage ratio of 2.5x – 3.5x Source: Latest company filings (Q3 2018 pro-forma MCS&DSO investor reports and presentations). 5) Excluding NRI. 1) Net debt / Cash EBITDA as of LTM Sept-18, unless otherwise stated. 6) Adjusted EBITDA Q3 2018 excluding Pro-Forma costs adjustments. 2) Servicing revenue contribution as of LTM Mar-18, unless otherwise stated. 7) Servicing revenue contribution as of LTM Dec-17. 3) Net debt / Cash EBITDA as of LTM Jun-18. 4) Servicing revenue contribution as of LTM Mar-18. 28/11/2018 Confidential & Proprietary 6

MCS Group consolidated cash flows – in Sept-18 YTD 9 months €48.3m €m sept-17 sept-18 Variation (%) Net cash flows from operating activities Net cash flows from operating activities 39.9 48.3 21% Sept-18 YTD Net cash flows for investment activities (33.2) (15.1) -54% Net cash from financing activities (31.5) (17.9) -43% €67.3m Net change in cash and cash equivalents (24.8) 15.2 -161% Closing cash Opening cash and cash equivalents 62.2 52.0 -16% Sept-18 YTD Closing cash and cash equivalents 37.4 67.3 80%  Net cash flows from operating activities increased in line with the growth of our business and our Cash EBITDA Figures  Net cash flows from investment activities improved mainly due to the lower level of portfolio acquisition in 2018  Net cash flows from financing activities evolution between 9 months – sept., 2017 & 9 months – sept., 2018 is attributable to:  Full reimbursement, which happened in March 2018, of the vendor loan inherited from our previous capital structure for €5.7m  the changes in the Group Capital structure & related financing costs a distribution made to our previous shareholders in the first half of 2017, as previously disclosed, of €20 million in the form of a partial repayment of the  convertible bonds, a share buyback and a cash dividend. 28/11/2018 Confidential & Proprietary 7

Pro-forma MCS & DSO ERC as of September 30, 2018 MCS & DSO combined 84M Gross ERC MCS & DSO combined 120M Gross ERC Evolution of MCS & DSO combined ERC In € 431 416 361 416 91 81 60.8 91.1 369.8 325.0 280 325 Sept. 2017 Sept. 2018 MCS DSO MCS DSO MCS DSO  On MCS Group side, 120-Month ERC decreased from €370 million at September 30, 2017 to €325 million at September 30, 2018, down 12% or €45 million, which is explained by the strict investment discipline observed over the last twelve months, our robust performance in terms of collections during the first months of 2018 and deliberate conservatism on portfolio revaluation. 28/11/2018 Confidential & Proprietary 8

Appendix 28/11/2018 Confidential & Proprietary 9