Q2 2018 presentation Oslo, 31 August 2018 Highlights Q2 2018 - PowerPoint PPT Presentation

Q2 2018 presentation Oslo, 31 August 2018

Highlights Q2 2018 Overview All-time high gross cash collection of NOK 1,032m up 71% (NOK 604m in Q2 2017) Cash EBITDA increased by 81% to NOK 759m (NOK 420m in Q2 2017) Operating profit increased by 64% to NOK 356m (NOK 217m in Q2 2017) after record strong operations Financial developments High portfolio acquisition volume of NOK 2.27bn, 103% increase from Q2 2017 (NOK 1.12bn) Increased RCF with EUR 150m and successfully placed EUR 200m bond in Q2 Solid investment capacity of NOK 2.1bn plus monthly cash flow Corporate rating obtained: Moody’s assigned a “Ba 3 ”, and S&P assigned a “BB - ” Operational- Finance company license obtained in Norway and IFN license obtained in Romania - both in Q3 2018 and organisational New Regional Director for Southeast Europe, George Christoforou from 1 September developments NACC (France) included in P&L numbers | 2

Record quarter with strong financial performance Total ERC and portfolio acquisitions Total revenues NOKm NOKm 761 1,120 702 1,951 1,485 2,273 14% 646 622 1% 16% 14% 519 1% 482 3% 12% 11% 4% 3% 20,119 84% 18,116 82% 82% 15,264 85% 12,191 85% 11,881 Q2’17 Q3’17 Q4’17 Q1’18 Q2’18 Q2’17 Q3’17 Q4’17 Q1’18 Q2’18 Purchased loan portfolios Profit from JV Other Total ERC Portfolio acquisitions Cash EBITDA EBITDA NOKm NOKm | 3

A solid pan-European platform Poland Northern Europe Sweden 17 % Poland 25 % Denmark Central Europe Norway Latvia 28 % Croatia Lithuania NE Slovenia Finland Serbia Estonia P Czech Rep. Latvia B&H WE CE Estonia SEE Montenegro Lithuania Hungary 10 % Western Europe Tahiti 20 % France Southeastern Europe 1 Tahiti 23 20 Romania Italy Greece Platforms Countries with portfolios Spain Cyprus 20.1bn 2,235 Portugal Romania Total ERC (NOK) 1 Employees (FTEs) Bulgaria 1) Split and total ERC includes ERC attributable to JV with EOS in Romania | 4

Increased diversification Quarterly Gross cash collection (NOKm) & relative regional distribution 60% 1 200 50% 1 000 1 032 40% 800 775 723 30% 600 650 604 575 556 20% 400 474 427 413 10% 200 0% - Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Total Northern Europe Poland Central Europe Western Europe Southeastern Europe Total ERC (NOKm) & relative regional distribution 50% 20 000 20 119 40% 18 116 15 000 30% 15 264 12 191 10 000 11 881 20% 9 852 9 489 8 186 8 014 5 000 6 822 10% 0% - Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Total Northern Europe Poland Central Europe Western Europe Southeastern Europe | 5

Financial performance | 6

Strong second quarter Financial summary Comments % Q2’18 Q2’17 Record high operating profit of NOKm change NOK 356m in Q2 2018, a 64 % Total operating revenues 1) 761 482 58 % increase compared to Q2 2017 EBITDA 370 226 63 % Operating profit (EBIT) 356 217 64 % Record high quarterly portfolio Profit margin 47 % 45 % acquisitions Cash Revenue 1,151 676 70 % Portfolio amortization Cash EBITDA 759 420 81 % percentage increased to 38% - expected further increase in next Profit for the period after tax 182 107 69 % quarters Earnings per share (EPS) 0.45 0.29 55 % Cash flow from operating activities Profit margin remains high in Q2 616 247 149 % at 47 % Operating cash flow per share 1.51 0.67 126 % Portfolio acquisitions 2,273 1,120 Another record quarter in terms 103 % Cash collection from portfolios of cash collection, EBITDA, cash 1,032 604 71 % ERC (at end of month) 2) EBITDA and EBIT 20,119 11,881 69 % NAAC included in P&L from Q2 1) Figures and alternative performance measures (APMs) have been restated due to change in classification of “Profit from shares and participation in associated companies and joint ventures”, | 7 see note 1 in the financial report for further information. 2) Including the Group’s share of portfolio acquired and held in joint venture

Record-high EBITDA, cash EBITDA and EBIT Income statement Comments 2018 2017 2018 2017 2017 NOKm Gross cash collection above Q2 Q2 6 months 6 months audited curves on a Group level. 755 Interest income from purchased loan portfolios 639 394 1,181 1,680 Revaluation of curves in CE due Net credit gain/loss purchased loan portfolios 3 17 -7 52 77 to timing - ERC expected Profit from shares, associated companies and JVs 11 16 20 29 70 105 unchanged Other operating revenues 108 55 213 256 941 Total operating revenues 761 482 1,407 2,083 Cost to collect reduced to 24% in -152 External costs of services provided -101 -67 -175 -286 Q2 2018 (29% in Q2 2017). -213 Personnel costs -172 -119 -325 -490 Volume effect materialising in Other operating expenses -118 -69 -199 -129 -287 SEE and WE. Some quarterly Depreciation and amortisation -13 -9 -26 -17 -36 variations expected 430 Operating profit (EBIT) 356 217 682 984 Financial income 1 1 3 1 3 Higher interest costs due to -160 Financial expenses -137 -86 -263 -358 higher drawn amount Net exchange gain (loss) 22 11 23 10 18 Net financial items -114 -74 -237 -149 -337 281 Profit before tax 242 143 445 648 Income tax expense -61 -35 -111 -70 -166 211 Net profit 182 107 334 481 Cash revenue 1,151 676 2,040 1,313 2,878 Cash EBITDA 759 420 1,341 819 1,815 370 226 708 447 1,020 EBITDA | 8

New platforms and increased activity in existing operations – cost to collect trending down Operational costs split Total operational costs NOKm NOKm Personnel costs Personnel 172 392 155 153 costs higher mainly 123 119 due to inclusion of NACC and higher operational activities in Greece 311 308 Q2’17 Q3’17 Q4’17 Q1’18 Q2’18 258 256 External costs Higher legal costs 101 due to high secured 74 67 69 65 collection in CE, inclusion of NACC and high legal activities in Finland Q2’17 Q3’17 Q4’17 Q1’18 Q2’18 and WE Other operating costs Include admin costs 118 87 related to rating, 81 69 70 financial activity, legal restructuring and other project related costs Q2’17 Q3’17 Q4’17 Q1’18 Q2’18 Q2’17 Q3’17 Q4’17 Q1’18 Q2’18 | 9

Financial highlights: Balance sheet Balance sheet Comments 2018 2017 2017 NOKm Increase in purchased loan Q2 Q2 audited 215 201 portfolios of 93% LTM Tangible and intangible assets 97 713 522 Goodwill 431 12,077 8,732 Purchased loan portfolios 6,242 500 618 Other long-term financial assets 552 58 66 Deferred tax asset 72 Equity ratio 26.4%, high cash 13,563 10,139 Total non-current assets 7,394 position 300 207 Other short-term assets 213 614 452 Cash & short-term deposits 351 914 659 Total current assets 564 Investment capacity NOK 2.1bn 14,477 10,797 Total assets 7,958 plus monthly cash flow 3,827 3,148 Total equity 2,782 8,390 5,739 Long-term interest-bearing loans and borrowings 4,430 Net interest-bearing debt 180 96 Deferred tax liabilities 45 NOK 7.8bn 99 70 Other long-term liabilities 64 8,668 5,905 Total non-current liabilities 4,538 989 Short-term interest-bearing loans and borrowings 1,603 267 Accounts and other payables 281 32 57 Income tax payable 54 347 432 Other current liabilities (incl. bank overdraft) 303 1,982 1,744 Total current liabilities 638 14,477 10,797 Total equity and liabilities 7,958 | 10

Mature funding structure with prudent leverage Strategy Successful issuance of four bonds Equity, bond and bank debt is used to get access to capital for when EUR millions larger portfolios or platform acquisition opportunities arise E+7.50% E+7.00% E+4.25% E+4.75% - Total equity raised since 2011: EUR 307m (EUR 79m in 2018) 200 200 175 - Total outstanding bonds: EUR 725m 150 Adequate liquidity including increasing RCF capacity and cash reserves is maintained to facilitate future growth - Total RCF: EUR 510m (EUR 40m carved out in an overdraft) - Solid banks: DNB, Nordea and Swedbank 2015/2020 2016/2021 2017/2022 2018/2023 Public rating EUR 222m 1 liquidity reserves supporting future growth - S&P: BB- (stable outlook) - Moody’s: Ba3 (stable outlook) Interest coverage Leverage Loan to value 5.6x 5.5x 5.3x 5.1x 75% 70% 64% 60% 60% 4.0x 4.0x 3.5x 3.4x 3.3x 2.9x Covenant Q3’17 Q4’17 Q1’18 Q2’18 Covenant Q3’17 Q4’17 Q1’18 Q2’18 Covenant Q3’17 Q4’17 Q1’18 Q2’18 Source: Company reports, company information as of Q2 2018 | 11 1) As of 30 June 2018. Calculated as EUR 333m undrawn existing RCF plus EUR 65m cash on balance sheet less NOK 200m (c.EUR 20m) in cash reserves and adjusted for EUR 154m in deferred payment on portfolios

Record-high quarterly purchase volume: NOK 2.27bn in Q2 Portfolio purchase volumes Comments NOKm Record strong volume for a single quarter 2014 2015 2016 2017 2018 - 103% increase compared to Q2 2017 Portfolios acquired in all major markets 2 273 - Large secured portfolio acquired in Croatia 1 951 1 485 Key details portfolio purchase volume 1 120 1 054 Geography distribution Distribution by type 827 SEE 702 672 NE 12% 18% 448 Unsecured WE 15% 38% 340 318 304 253 259 255 NOK NOK 15% Poland 2,273m 2,273m 98 64 39 62% Secured Q1 Q2 Q3 Q4 41% CE | 12