Q3 2018 presentation Oslo, 28 November 2018 Highlights Q3 2018 - PowerPoint PPT Presentation

Q3 2018 presentation Oslo, 28 November 2018

Highlights Q3 2018 Overview High gross cash collection of NOK 1,022m up 57% (NOK 650m in Q3 2017) Cash EBITDA increased by 65% to NOK 778m (NOK 472m in Q3 2017) Financial Operating profit increased by 46% to NOK 370m (NOK 253m in Q3 2017) after record strong operations developments Portfolio acquisition volume of NOK 988m, 41% increase from Q3 2017 (NOK 702m) Solid investment capacity of NOK 1.7bn plus monthly cash flow Finance company license obtained in Norway and IFN license obtained in Romania Operational- New Regional Director for Western Europe, Maria Haddad from 25 October and organisational New co-investment structure with Waterfall Asset Management on NPL portfolio in Greece (October 2018) developments Extended the RCF of EUR 510 million with new maturity in May 2022 | 2

Strong financial performance Total ERC and portfolio acquisitions Total revenues NOKm NOKm 761 746 702 1,951 1,485 2,273 988 14% 646 15% 622 1% 1% 16% 14% 519 1% 3% 12% 4% 20,608 20,119 84% 84% 18,116 82% 82% 15,264 85% 12,191 Q3’17 Q4’17 Q1’18 Q2’18 Q3’18 Q3’17 Q4’17 Q1’18 Q2’18 Q3’18 Purchased loan portfolios Profit from JV Other Total ERC Portfolio acquisitions Cash EBITDA EBITDA NOKm NOKm 51% 68% 49% 66% 65% 65% 63% 52% 50% 50% 382 370 778 759 338 311 581 262 524 472 Q3’17 Q4’17 Q1’18 Q2’18 Q3’18 Q3’17 Q4’17 Q1’18 Q2’18 Q3’18 Cash EBITDA Cash EBITDA margin EBITDA EBITDA margin | 3

A solid pan-European platform Poland Northern Europe 17% Sweden Latvia Poland Denmark Lithuania 26% Central Europe Norway Estonia Finland Croatia B&H 28% NE Slovenia Montenegro Serbia Hungary P Czech Rep. WE CE SEE 11% Western Europe Tahiti France Spain South East Europe 1 19% Portugal Italy 23 21 Romania Cyprus Greece Bulgaria Platforms Countries with portfolios 20.6bn 2,284 Total ERC (NOK) 1 Employees (FTEs) 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 1 100 60% 1 032 50% 1 022 900 40% 700 775 723 650 500 30% 604 575 556 474 427 20% 300 413 10% 100 - 100 0% Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Total Northern Europe Poland Central Europe Western Europe Southeastern Europe Total ERC & relative distribution 50% 20 000 20 608 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 Q3 18 Total Northern Europe Poland Central Europe Western Europe Southeastern Europe | 5

Financial performance | 6

Strong third quarter Financial summary Comments % Q3’18 Q3’17 Record high operating profit of NOKm change NOK 370m in Q3 2018, a 46% Total operating revenues 1) 746 519 44 % increase compared to Q3 2017 EBITDA 382 262 46 % Operating profit (EBIT) 370 253 46 % Portfolio amortisation Profit margin 50 % 49% percentage increased to 39% - expected further increase in next Cash Revenue 1) 1,141 730 56 % quarters Cash EBITDA 778 472 65 % Profit margin remains high in Q3 Profit for the period after tax 159 113 40 % at 50% Earnings per share (EPS) 0.39 0.31 25 % Cash flow from operating activities 686 315 118 % Operating cash flow per share 1.68 0.85 97 % Portfolio acquisitions 988 702 41 % Cash collection from portfolios 1,022 650 57 % ERC (at end of month) 2) 20,608 12,191 69 % 1) Figures and alternative performance measures (APMs) have been restated due to 2) Including the Group’s share of portfolio acquired and held in joint venture change in classification of “Profit from shares and participation in associated companies | 7 and joint ventures”.

Record strong EBITDA, cash EBITDA and EBIT Income statement Comments 2018 2017 2018 2017 2017 NOKm Collection of unsecured somewhat Q3 Q3 9 months 9 months audited below curves in most regions with Interest income from purchased loan portfolios 680 437 1,861 1,192 1,680 total NOK 24m. Seen as a Net credit gain/loss purchased loan portfolios -53 2 -60 55 77 temporary deviation 48 Profit from shares, associated companies and JVs 4 20 24 70 Other operating revenues 115 60 328 166 256 Collection of secured combined with revaluation was NOK -34m Total operating revenues 746 519 2,153 1,461 2,083 mainly due to timing effect. Collection on some claims are -217 External costs of services provided -91 -65 -266 -286 moved out in time, but the amount Personnel costs -173 -123 -498 -336 -490 actually is estimated to be higher. Other operating expenses -100 -70 -299 -199 -287 -25 Depreciation and amortisation -13 -9 -38 -36 Cost to collect was 25% in Q3 2018 683 (28% in Q3 2017). Volume effect Operating profit (EBIT) 370 253 1,052 984 materialising in SEE and WE. Financial income 2 1 4 2 3 Some quarterly variations expected -251 Financial expenses -166 -91 -429 -358 Increased interest costs due to Net exchange gain (loss) -19 -12 4 -2 18 higher debt Net financial items -183 -102 -421 -251 -337 Unrealized currency effect of NOK - 19m due to change in HRK / EUR 433 Profit before tax 186 151 631 648 exchange rate Income tax expense -28 -38 -139 -108 -166 Lower taxes starting materializing as a result of previously announced 324 Net profit 159 113 492 481 restructuring Cash revenue 1,141 730 3,181 2,043 2,878 472 2,118 1,291 1,815 Cash EBITDA 778 382 262 1,090 709 1,020 EBITDA | 8

Continued focus on cost and economies of scale – cost to collect trending down Operational costs split Total operational costs NOKm NOKm Personnel costs 172 173 392 155 153 123 Personnel costs at 364 same level as second quarter 2018. 311 308 Q3’17 Q4’17 Q1’18 Q2’18 Q3’18 258 External costs 101 91 Lower secured 74 69 65 collection in CE, and less legal collection activity in Finland and Poland. Q3’17 Q4’17 Q1’18 Q2’18 Q3’18 Other operating costs 118 100 87 81 70 Lower project related cost in third quarter. Q3’17 Q4’17 Q1’18 Q2’18 Q3’18 Q3’17 Q4’17 Q1’18 Q2’18 Q3’18 | 9

Financial highlights: Balance sheet Balance sheet Comments 2018 2017 2017 NOKm Increase in purchased loan Q3 Q3 audited 241 201 portfolios of 92% LTM Tangible and intangible assets 92 716 522 Goodwill 419 12,642 8,732 Purchased loan portfolios 6,577 Equity ratio 26.5%, high cash 506 618 Other long-term financial assets 558 position 59 66 Deferred tax asset 70 14,163 10,139 Total non-current assets 7,716 Investment capacity NOK 1.7bn* plus monthly cash flow 276 207 Other short-term assets 243 673 452 Cash & short-term deposits 333 Net interest-bearing debt 950 659 Total current assets 576 NOK 9.2bn 15,113 10,797 Total assets 8,292 4,011 3,148 Total equity 2,819 9,665 5,739 Long-term interest-bearing loans and borrowings 4,876 174 96 Deferred tax liabilities 48 101 70 Other long-term liabilities 70 9,940 5,905 Total non-current liabilities 4,994 989 Short-term interest-bearing loans and borrowings 528 267 Accounts and other payables 91 38 57 Income tax payable 64 596 432 Other current liabilities (incl. bank overdraft) 323 1,161 1,744 Total current liabilities 479 15,113 10,797 Total equity and liabilities 8,292 *adjusted for deferred payment for portfolio purchase of NOK 396m | 10

Quarterly purchase volume: NOK 988m in Q3 Portfolio purchase volumes Comments NOKm Strong volume for a third quarter 2014 2015 2016 2017 2018 - 41% increase compared to Q3 2017 Portfolios acquired in Northern Europe and Western Europe, 2 273 represents 63% of portfolio purchases in the quarter 1 951 Well diversified between asset classes YTD with 63% unsecured and 37% secured 1 485 Key details portfolio purchase volume 1 120 1 054 988 Geography distribution Distribution by type 827 SEE 702 672 7% Secured 448 31% WE 37% 340 26% 318 304 253 259 255 NOK NOK NE 988m 988m 98 64 39 69% Unsecured Q1 Q2 Q3 Q4 8% 22% Poland CE | 11