APRIL 18 TH , 2017 D ISCLAIMER The discussion of business objectives - - PowerPoint PPT Presentation

BOND INVESTORS PRESENTATION APRIL 18TH, 2017

DISCLAIMER

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The discussion of business objectives set forth in this presentation are by their nature forward- looking statements. Such objectives are based on management’s current beliefs, expectations, assumptions and business plan and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from the objectives described. No assurance can be given that the objectives described in this presentation will be achieved. Forward- looking statements involve assessments about matters that are inherently uncertain and actual results may differ for a variety of reasons. You are reminded that all forward-looking statements in this presentation are made as of the date hereof and for the avoidance of doubt, Promontoria MCS does not undertake to update any such statement made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. For the avoidance of doubt, Promontoria MCS does not accept any liability in respect of any such forward-looking statements and investors should not place undue reliance on any such forward-looking statements. This presentation and any related oral presentation should not form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. This presentation does not constitute a recommendation regarding the securities of Promontoria MCS.

PRESENTERS

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• Joined MCS in 2009
• 11 years’ experience in private equity in

London and Paris (3i, Chequers, Bridgepoint) Jérémie Dyen Chief Executive Officer

• Joined MCS in 2016
• Previously CFO of Microcred, Deputy

Group CFO of Newedge and held various positions at Société Générale Marcelo Amram Group Chief Financial Officer

Record-Breaking Performance in Debt Purchasing Business Favourable Outlook for 2017 Strong Balance Sheet with Conservative Leverage 2016 was a Pivotal Year for the MCS Group Landmark Debt Servicing Contracts Won, Confirming the Accelerated Diversification of the MCS Group Revenues

KEY MESSAGES

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2 5 4 3 1

STRATEGIC UPDATE 2016 WAS A PIVOTAL YEAR FOR MCS

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• The performance of MCS over the last twelve months has been noticeably robust
• Debt Purchasing business enjoyed strong collections as well as a record volume of acquisitions
• Debt Servicing benefited from the growth of volumes in existing contracts
• Attributable Cash EBITDA and EBITDA enjoyed record growth
• We continued to transform our business to reinforce its leading position as a trusted partner to banks in France
• MCS successfully carried out its first issue in the bond market in September 2016, providing financial

resources commensurate with the potential of the business

• We maintained significant investment efforts in the structure of our Group (staff, Executive Committee, IT)
• MCS won landmark servicing contracts with banks in order to service both their performing and non-

performing debt portfolios, auguring an increased diversification of our activities in the future

• Whilst we remain faithful to the model that we have been pursuing for over 30 years, recent developments

confirm the acceleration of our growth and validate the pertinence of our strategy

KEY FINANCIAL HIGHLIGHTS

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Reported Net Result Attributable EBITDA and Attributable Cash EBITDA Margins(1)

(€M)

6.6 12.4

2015 2016

46.8 52.3 23.4 33.4

2015 2016

• Attrib. Cash EBITDA
• Attrib. EBITDA

62% 44% 61% 49%

Corresponding Margins (Gross)

Attributable 120m ERC

327 357

2015 2016 33 49

(€M) Attributable 120 months ERC Portfolio Acquisitions (€M)

Growth: 89%

(1) In order to give a more comprehensive view of servicing revenues and provide better comparability with peers, some servicing revenues which were previously encapsulated within our “Income from loans" have been reallocated to Servicing revenues

Total Cash Revenues(1)

(€M) 75.6 83.5 8.0 8.5

83.6 92.0

2015 2016 Gross Collections Servicing

Growth: 10%

RECORD ACQUISITION ACTIVITY

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• With €49M in purchases made during the year,

2016 sets a new record for MCS in terms of portfolio acquisitions, after ten years of continuous growth

• More than 40% of our acquisitions this year were

done with banks which were first-time clients for MCS

• This positive business dynamic confirms the

trend we have seen from French banks, increasingly open to debt sales transactions

• On this client segment, based on the
• perations we are aware of, we believe that we

have reinforced our position as leader with a greater than 40% market share in 2016, both in price paid and in number of transactions

• We have seen again in 2016 a robust fourth

quarter in terms of acquisitions, as it is traditionally the case in our business, to a lesser extent though than in 2015 Highlights Debt Purchasing Volumes

(€M) 27 33 38 49

• Avg. 2007 -2009
• Avg. 2010 -2012
• Avg. 2013 -2015

2016

2.0x 1.9x 1.5x 1.3x 1.1x 0.5x 0.2x 0.1x 0.5x 0.7x 1.0x 1.2x 1.8x 1.5x 2.1x 2.3x 2.2x 2.3x 2.3x 2.3x 1.7x Pre 2011 2011 2012 2013 2014 2015 2016

Gross Collections to Date Remaining 120m ERC

MCS MAINTAINS SUPERIOR INVESTMENT RETURNS

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• Our expected returns continue to be

consistent:

• Our Gross money multiples on 120

months (based on a combination of actuals and forecasts) are still around 2x

• 2016 acquisitions show to date, on average, a

lower money multiple than before.

• Our blended IRRs at underwriting have

not changed vs. 2015 but our acquisition mix for 2016 included some investments presenting a shorter duration.

• Our money multiples forecasts at

underwriting have been historically conservative Highlights Gross Money Multiples

ERC GROWTH FUELLED BY ROBUST ACQUISITIONS

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• Overall, we have experienced a 9% yoy

increase of our 120-month Attributable ERC in 2016 to €357M

• This increase has been mainly fuelled by our

robust acquisition campaign that has more than offset strong collections on our backbook across the year

• It was also supplemented by two other

recurring factors:

• A rolling effect for €13.5M or 3.8% of ERC
• our collection curves usually exceeding

120 months given the nature of our claims

• A revaluation effect for €11.7M or 3.3% of

ERC - due to the overperformance of our collections vs. an historically conservative forecast modelling Highlights ERC Evolution ERC 2016 Split Per Year

327.3 84.8 (80.2) 13.5 11.7 357.2 Dec-15 Acquisitions Collections Rolling Effect Revaluations Dec-16

120M Attributable ERC (€M) (€M)

0-12 Months 13-24 Months 25-36 Months 37-48 Months 49-60 Months 61-72 Months 73-84 Months 85-96 Months 97-108 Months 109-120 Months Gross Attributable

STRONG MOMENTUM FOR PERFORMING LOANS SERVICING ACTIVITIES

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• In order to give a more comprehensive view of our

servicing revenues and provide better comparability with our peers, we have included some servicing revenues which were previously encapsulated within our “Income from loans” into our Servicing and other revenues

• With this revised presentation, Loan Servicing

revenues now represent 12% of our total net

• revenues. We expect it to represent in excess of

20% of our total revenues in 2017, and confirm our goal of raising this percentage to over 25% in the medium term

7.6 8.0 8.5 2014 2015 2016

Servicing Revenues

(€M)

• Servicing revenues grew by 6% in 2016 at €8.5M
• In particular, our performing loans servicing business

has seen strong organic growth in 2016 (+28%), on the basis of two significant contracts won in 2014 and 2015 where we enjoy a sustained development of our Assets under Management

• This growth is poised to accelerate in 2017, based on

the above as well as on the landmark contract that we signed with Crédit Immobilier de France (CIF) in 2016 and which we started to execute on April 1st, 2017 :

• We entered into a long-term servicing agreement

with CIF which will lead to a gradual transfer of CIF servicing activities to MCS. As part of the agreement, we have taken over the CIF servicing platforms located in Toulouse and Poitiers (c. 55 staff) and onboarded over €3Bn worth of mortgages

• This contract represents a unique opportunity for

MCS to become the undisputed leader in residential real estate loan management on behalf

• f third parties in France and further diversify our

sources of revenues Highlights

STRONG FINANCIAL PERFORMANCE

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• Gross collections in 2016 stand at €83.5M, up 10% vs

2015

• Servicing revenues (€8.5M) have increased 6% vs

2015 with roll-out of new third-party contracts

• Legal costs have increased at a slower pace while

increase in payroll expenses reflects our continued effort in hiring

• Overheads are in line with reforecast, with an increase

mainly due to relocation to new headquarters, allowing for additional investments, especially in IT

• Attributable Cash EBITDA of €52M increased 12% yoy,

with sustained margins

• Cash EBITDA margin maintained at 61% despite

substantial investments

• Portfolio amortisation for the year includes positive

impact from Revaluations which reflects improved collection forecasts

• In line with our conservative approach to ERC and

recurring ability to over-perform initial forecasts

• Net financial result in 2016 derives from past financial

structure for the first nine months

Highlights Management Accounts(1)

(1) In order to give a more comprehensive view of servicing revenues and provide better comparability with peers, some servicing revenues which were previously encapsulated within our “Income from loans" have been reallocated to Servicing revenues

€ M 2015 2016 € % Gross Collections 75.6 83.5 7.9 10% Attributable Gross collection 69.7 78.4 8.7 13% Non Attributable Gross Collection 5.9 5.1 (0.9)

• 15%

Servicing Revenues 8.0 8.5 0.5 6% Total Cash Revenues 83.6 92.0 8.4 10% Portfolio Amortisation & Revaluations (26.2) (22.3) 3.9

• 15%

Total Net Revenues 57.4 69.7 12.3 21% Legal Costs and Other (8.9) (9.1) (0.2) 2% Payroll Expenses (14.1) (16.4) (2.3) 16% Overheads (9.0) (10.1) (1.2) 13% Total costs (32.0) (35.7) (3.7) 11% EBITDA 25.4 34.1 8.6 34% Non attributable distribution (4.9) (4.0) 0.8

• 17%

Portfolio Co-Invest Amort. & Reval. 2.8 3.4 0.6 23% Attributable EBITDA 23.4 33.4 10.1 43% Depreciation (1.3) (1.7) (0.4) 30% EBIT 22.1 31.8 9.7 44% Net Financing Result (11.7) (16.3) (4.6) 39% Non-Recurring Items (0.1) 1.6 1.7

• 2127%

Pre-Tax Result 10.2 17.1 6.9 67% Tax (3.7) (4.7) (1.0) 28% Net Result 6.6 12.4 5.8 89% Cash EBITDA 51.6 56.3 4.7 9% Attributable Cash EBITDA 46.8 52.3 5.5 12% Variation

FY 2016 CASH FLOW STATEMENT AND LEVERAGE RATIOS

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• Cash flow from operations in 2016 reached

€55M

• Within investments (€46.1M), the bulk consists
• f

debt purchasing (€49.4M), capex investments for (€2.2M) and of the positive effect from real estate disposals

• Following our €200M bond issuance in

September 2016, the reimbursement of the previous debts to Bawag and distribution to shareholders, ending cash position as of December was €62M, of-which €60M available to MCS

• MCS well within the limits of our bond

covenants

Highlights Cash Flow Statements and Ending Balances Leverage

Recreate table same format as p11

€M 31/12/2015 31/12/2016 Cash Flow From Operations 43.8 55.0 Cash Flow From Investments (38.0) (46.1) Cash Flow From Financing (2.2) 39.7 Cash Flow 3.6 48.7 Opening Cash 10.0 13.6 Ending Cash 13.6 62.2 Cash Flow 3.6 48.7

€M 31/12/2016 201 60 140 2.7x 305 46% 120m Attributable ERC 357 39% Leverage on 84m ERC Leverage on 120m ERC Gross Debt (IFRS) Attributable Cash Net Debt (IFRS) Leverage on Attr Cash EBITDA 84m Attributable ERC

DISTRIBUTION TO SHAREHOLDERS

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• The Board of MCS Group has agreed to

distribute €20M to its shareholders. This distribution will inter alia allow interest payment and partial redemption of our convertible bonds for €11M and lighten our financial expenses going forward

• MCS 2016 pro forma leverage ratio restated

from this distribution would reach 3.1x on our 2017 Attributable Cash EBITDA and 53% on 84m Attributable ERC

• Still well within the limits of covenants of
• ur bond covenants and in line with our

long term guidance Highlights Pro-forma Leverage Pro-forma 31/12/2016 €20m dist. Gross Debt (IFRS) 201 201 Attributable Cash 60 40 Net Debt (IFRS) 140 160 Leverage on Attr Cash EBITDA 2.7x 3.1x 84m Attributable ERC 305 305 Leverage on 84m ERC 46% 53% 120m Attributable ERC 357 357 Leverage on 120m ERC 39% 45%

STRATEGIC OUTLOOK

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• The positive developments of 2016 allow us to start the year 2017 with confidence as the signs of

acceleration of the opening of our domestic market are growing

• In the debt purchasing business, we expect even stronger growth in collections than in 2016, buoyed by
• ur purchases over the last twelve months
• 2017 is expected to set a new record for debt acquisitions
• The steady development of debt servicing activity should give us increased visibility, while at the same

time allowing us to intensify the diversification of our revenues towards a recurring line of services that does not consume large amounts of capital

• Debt servicing is expected to represent over 20% of total revenues from 2017 onwards
• After a solid 2016 vintage, we therefore expect 2017 to be a promising year where we will, once again,

continue to invest in the quality of our franchise and strive to strengthen our leadership position in France as a trusted partner to banks

APPENDIX

IFRS CONSOLIDATED INCOME STATEMENT

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Consolidated Income Statement

€M 2016 (12 Months) 2015 (12 Months) Revenue Income from Loans 63.0 51.9 Other Income 6.6 5.4 Total Revenue 69.5 57.3 Professional Fees and Services (9.1) (8.9) Personnel Costs (16.4) (14.1) General and Administrative expenses (10.1) (9.0) Operating Margin 33.9 25.3 Other Income and Expenses, Net 0.1 (1.2) Operating Income 34.0 24.1 Financial Income 0.5 1.2 Financial Expenses (17.3) (15.0) Net Financial Expense (16.9) (13.8) Share in Income (loss) of Equity-Accounted Companies (0.0) 0.0 Income Before Tax 17.1 10.2 Income Tax (4.7) (3.7) Net Income for the Year 12.4 6.6

€M 31-Dec-16 31-Dec-15 Goodwill 63.8 62.8 Other Intangible Assets 2.9 1.8 Property, Plant and Equipment 2.6 11.9 Purchased Joan Portfolio 102.6 87.4 Investments in Equity-Accounted Companies 0.0 1.6 Other non-Current Assets 2.0 2.1 Deferred Tax Assets 0.0 0.0 Total non-Current Assets 173.9 167.6 Purchased Joan Portfolio 65.4 53.4 Other Receivables 6.4 5.5 Cash and Cash Equivalents 62.2 13.6 Total Current Assets 134.1 72.5 Total Assets 308.0 240.0

FY 2016 IFRS CONSOLIDATED BALANCE SHEET

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Assets Equity and Liabilities

€M 31-Dec-16 31-Dec-15 Goodwill 63.8 62.8 Other Intangible Assets 2.9 1.8 Property, Plant and Equipment 2.6 11.9 Purchased Joan Portfolio 102.6 87.4 Investments in Equity-Accounted Companies 0.0 1.6 Other non-Current Assets 2.0 2.1 Deferred Tax Assets 0.0 0.0 Total non-Current Assets 173.9 167.6 Purchased Joan Portfolio 65.4 53.4 Other Receivables 6.4 5.5 Cash and Cash Equivalents 62.2 13.6 Total Current Assets 134.1 72.5 Total Assets 308.0 240.0

€M 31-Dec-16 31-Dec-15 Equity Capital and Reserves Attributable to Owners of the Parent Share Capital 0.3 0.3 Issue Premiums 13.3 29.2 Consolidated reserves 4.3

• 2.3

Net Income for the Year 12.4 6.6 Total Equity Attributable to Owners of the Parent 30.3 33.8 Non-Controlling interests 0.0 Total Equity 30.3 33.8 Non-Current Liabilities Provisions for other Liabilities 0.9 0.8 Convertible Bonds 37.6 54.2 Long-Term Borrowings and Debt 195.5 95.3 Co-Investor Liabilities (Long-Term Portion) 2.2 7.1 Deffered Tax Liabilities 20.4 16.3 Other non-Current Liabilities 6.9 18.5 Total non-Current Liabilities 263.5 192.3 Current Liabilities Co-Investor Liabilities (Short-Term Portion) 5.9 4.3 Trade and Other Accounts Payable 1.4 2.6 Other Current Liabilities 6.9 7.0 Total Current Liabilities 14.2 13.9 Total Equity and Liabilities 308.0 240.0