BOND INVESTORS PRESENTATION APRIL 30 TH , 2018 C ONFIDENTIAL AND P - - PowerPoint PPT Presentation

CONFIDENTIAL AND PROPRIETARY

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BOND INVESTORS PRESENTATION APRIL 30TH, 2018

CONFIDENTIAL AND PROPRIETARY

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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

• ur 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.

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KEY HIGHLIGHTS FOR 2017

• Solid operational and financial delivery
• Strong organic adjusted EBITDA growth
• Robust backbook and servicing performance supporting cash generation
• Successful purchasing year in a transitioning market
• Disciplined underwriting to protect returns in a growing yet competitive market
• €45m invested in high quality portfolios
• Increased diversification with fast growing servicing revenues
• Successful implementation of landmark CIF contract
• Early achievement of loan servicing revenues contribution target
• Significant improvement in capital structure and cost of funding
• New financing structure leading to a reduced cost of funding with extended debt maturity
• Rapid deleveraging and significant progress in available liquidity
• Change of ownership with meaningful equity investment from BC Partners
• Support from a leading European financial services investor
• Management retains significant economic ownership

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CONFIDENTIAL AND PROPRIETARY

4 56.3 68.8 34.0 29.3 2016 2017 Cash EBITDA EBITDA

PROFITABLE ORGANIC GROWTH LEADING TO STRONG DELEVERAGING

Total Cash Revenues EBITDA and Cash EBITDA Margins Portfolio Acquisitions and 120m Gross ERC Net Debt on Cash EBITDA (LTM)

83.4 93.2 8.5 18.3 91.9 111.5 2016 2017 Gross Collections Servicing +21% 49 45 2016 2017 Portfolio Acquisitions 4.3x 4.0x 3.2x Q2 2017 Q3 2017 Q4 2017 (1.1)x (€m) 61% (€m) 49% 62% 41% (€m) 12% 25% Servicing % in Net Revenues Corresponding Margins 377 368 120m Gross ERC

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MAINTAINED DISCIPLINED PRICING POLICY IN A GROWING BUT COMPETITIVE FRENCH MARKET

1) Based on management estimate.

Estimated Market Size(1) (€m)

Historical Track Record of Purchasing Discipline

• The French debt purchasing market

has overall doubled in terms of purchase price since last year

• French banks increasingly open to debt

sales transactions, partly incentivised by

• Increasing regulatory pressure on NPL
• Higher average price paid by portfolio
• In that context, we maintained our

purchasing discipline and favoured

• ur returns over market share – as we

consistently did throughout

• ur

history

~100 ~200 2016 2017 51 deals 44 deals – 140 280 420 560 700 20 40 60 80 100 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 Yearly Investments Cumulative Investments Over €700M Invested since 1997 Cumulative investment in portfolios (€m) Unattractive risk / reward profile pre-crisis Sale of certain portfolios in ’06-’07 Ability to ramp-up portfolio acquisitions when returns are deemed more appealing 33 38 49 45 Avg. 2010-2012 Avg. 2013-2015 2016 2017

Healthy Purchasing Volumes in 2017 (€m)

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ABILITY TO PURCHASE SELECTIVELY AND FOCUS ON HIGHER QUALITY ASSETS

1) Calculated as total number of deals we bid for divided by total number of transactions seen in the market (51 and 44 respectively in 2016 and 2017).

Case Study 1: Acquisition of a Large Mortgage Portfolio Selective Bidding Approach Case Study 2: Acquisition of a Large Paying Portfolio

# Deals Win Ratio By # Deals Win Ratio By Price 2016 Won 22 56% 61% Lost 17 44% 39% Total 39 100% 100% Bid Ratio(1) 76% 2017 Won 14 50% 44% Lost 14 50% 56% Total 28 100% 100% Bid Ratio(1) 64%

• Acquisition of a large non-performing portfolio from a

prominent French mortgage lender

• €14m of equity invested representing 30% of the annual

investments

• Strong
• vercollateralization

with mortgage collateral representing 184% of the total purchase price

• Acquisition of a large portfolio of paying, unsecured

consumer loans from a specialist credit institution

• €10m of equity invested representing 23% of the annual

investments

• 7,300 regularly paying accounts accounting for 83% of

estimated ERC Strong Focus on Asset Quality and Risk Adjusted Returns

• We used the opportunity of a growing market to bid

selectively, focusing on:

• Deals and assets that we know and like, leveraging our

data sets and models

• High quality portfolios offering attractive risk-adjusted

returns over market share

• In doing so, we maintained investments volumes at levels

close to those of last year, whilst protecting our returns

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CONTINUED STRONG INVESTMENT RETURNS AND OUTPERFORMANCE OVER TIME PROVEN DISCIPLINE AND CONSERVATISM AT DUE DILIGENCE

• Our blended IRRs at underwriting are in line with 2016 levels despite increased share of high-quality assets (paying, secured, collateralised)
• ffering attractive risk-adjusted returns
• Our gross money multiples have been consistently outperforming due diligence forecasts, due to our conservative approach at underwriting and
• ur strong collection performance
• Across all portfolio vintages, our gross money multiples on 120 months remain strong and stable – still around 2x based on combination of

actuals and forecasts

• We have not experienced a loss on any portfolio purchase ever to date

2.8x 2.6x 2.1x 1.7x 1.5x 1.3x 0.8x 0.6x 0.2x 2.0x 2.1x 2.4x 3.0x 3.0x 2.5x 2.2x 2.3x 2.2x 2.0x 1.7x 1.6x Pre 2007 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Collections to date Total MoM MoM at Due Diligence Gross Money Multiples by Vintage(1)

(x)

Evolution of Gross Money Multiples(1)

1) Based on actual and forecasted collections for spot portfolios as at December 31, 2017.

1.5x 1.3x 1.6x 1.8x 1.7x 1.8x 1.9x 1.8x 1.7x 1.7x 1.6x

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CONTINUED CASH FLOW CREATION AT STABLE ERC

Cumulative 120m Gross ERC Per Year as at Dec-2017 Cash Flow Creation (€m)(1)

1) For each period: Actual collections in the year and ERC as at year-end vs. respective forecasts as of previous year-end.

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 120m Gross ERC 22 28 2016 2017 (€m)

• Overall, 120-month Gross ERC was broadly flat at €368M vs €377M

in 2016

• Reduction of the ERC mainly due to robust collections in 2017

which more than offset acquisitions made broadly in line with replacement rate

• ERC curve highlighting the strengths of our backbook characterised

by strong cash flow visibility over the coming 10 years and significant value “in the tail”

• Predictability of cash flows further increased due to the high

portion of paying / secured portfolios

• Strong cash flow creation in 2017 (€28m) improving our liquidity

position and ability to capture future market opportunities

Gross 120m ERC

377 368 2016 2017 120 months Gross ERC 49 45 Portfolio Acquisitions (€m)

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DIFFERENTIATED POSITIONING AS INDEPENDENT SERVICER TO PROVIDE COMPETITIVE

ADVANTAGE IN PORTFOLIO PURCHASING AND DRIVE FURTHER REVENUE GROWTH

Key Benefits of the CIF Contract AUM (€bn) and Number of Accounts (k) Growing Contribution to Group Revenues

• Unique offering in France covering a wide spectrum of recovery services for both

before and after debt or receivables become overdue

• The only French non-banking institution rated as a primary and special loan

portfolio servicer

• Long-term, landmark servicing agreement with Crédit Immobilier de France (CIF)

started in 2017, making MCS the clear market leader in the servicing of performing loans in France

• Early achievement of our target of 25% of debt servicing contribution to group

revenues, re-aligning revenue mix with large-scale European players

• We expect more opportunities to come to acquire servicing platforms in France

Servicing Revenues (€m) 8.5 18.3 2016 2017

12% 25%

Loan Servicing Revenue as % of Total Net Revenue

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Landmark transaction in the French market that serves as a major credential and operational foundation for future opportunities

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Key 17-year contract providing a quantum leap in performing loan servicing revenue and diversification

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Significant value creation with limited up-front investment c.€1m per month in servicing revenue since contract went into effect on April 1, 2017

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0.5 4.2 2016 2017

12% 62 7

Number of Accounts

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ONGOING INVESTMENT IN OUR PEOPLE, DIVERSITY AND EXCELLENCE

• Investment in people to drive operational and financial

performance and protects our reputation as a highly compliant partner for financial institution

• Continued focus on our capacity to attract, retain,

develop and engage the best talents

• General and targeted training available to employees
• New hires to head key functions and drive innovation:
• Anne Denuelle, Head of HR
• Sylvain Bourdette, Head of IT
• Gregoire Andre, Head of Strategic Development
• Vincent Wechtler, Head of BPO and Transformation

35% Increase in staff between 2016 and 2017 75% Of employees with a master degree or above 60% Of female employees 36 Average age

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AN ADDITIONAL YEAR OF PROFITABLE GROWTH

Highlights

• 21% organic growth in cash revenues, up to €112m

between 2016 and 2017

• Strong backbook collections
• Servicing revenues more than doubled due to the

start of the CIF contract and the ramp-up of other existing contracts

• Net revenues increased by €2m to €72m in 2017
• Revaluations back to normalised levels
• Amortisation reflecting collection performance
• Professional fees and services were stable in 2017 and

decreased as a percentage of revenues by 1.2 pp to 10%

• General and administrative expenses showed an

increase of €2m in line with our business growth

• As a result, Cash EBITDA reached €69m (+22% yoy)
• Cash EBITDA margin at 62%

Key Financials

Variation €m 2016 2017 € % Gross Collections 83.4 93.2 9.8 11.7 % Attributable Gross collection 78.4 89.5 11.1 14.2 % Non Attributable Gross Collection 5.0 3.7 (1.3) (26.6)% Servicing Revenues 8.5 18.3 9.8 115.3 % Total Cash Revenues 91.9 111.5 19.6 21.3 % Portfolio Amortisation & Revaluations (22.3) (39.5) (17.3) 78% Total Net Revenues 69.6 72.0 2.3 3.4 % Professional fees and services (9.1) (9.1) 0.0 (0.5)% Personnel costs (16.4) (21.1) (4.7) 28.6 % General and administrative expenses (10.1) (12.5) (2.4) 23.5 % Total costs (35.7) (42.7) (7.0) 19.7 % EBITDA 34.0 29.3 (4.7) (13.8)% Non attributable distribution (4.0) (1.4) 2.7 (65.9)% Portfolio Co-Invest Amort. & Reval. 3.4 0.5 (2.9) (85.3)% Attributable EBITDA 33.4 28.4 (4.9) (14.8)% Cash EBITDA 56.3 68.8 12.6 22.3 % Attributable Cash EBITDA 52.2 67.4 15.2 29.2 %

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Highlights

• Since the acquisition of MCS Groupe by BC Partners in October

2017, our financing structure has improved materially:

• Longer maturity profile (7 vs. 5 years)
• Lower cost of funding (from E+575bps to 425bps fixed)
• Pro-forma leverage ratio which peaked at 4.3x as at June 2017 was

rapidly brought back down to 3.2x at year end on the back of:

• A solid increase in LTM cash EBITDA driven by growing servicing

revenues and collection outperformance on debt purchase

• A lower net debt position thanks to our strong cash generation

despite healthy purchasing levels at replacement rate

• Improved liquidity position with cash on balance sheet increased

to €52m from €37m, providing firepower and flexibility for future purchases

• The majority of our remaining co-investors in the Hugo 2 SPV was

bought back during the last quarter of 2017, increasing our interests in this SPV from 67% to 93%

• Our goal is to continue to monitor closely and prudently our ratios,

and we intend to maintain a leverage in the 2.5x to 3.5x range

Strong Deleveraging

€m 30-06-2017 31-12-2017 Gross Debt 270 270 LTM Cash EBITDA 54 69 Net Debt (IFRS) 230 218 Leverage on LTM Cash EBITDA 4.3 3.2 84m Gross ERC 309 311 Leverage on 84m ERC (LTV) 74% 70%

More Attractive Capital Structure

€m Before Oct-17 Since Oct-17 Maturity profile 5 years 7 years Maturity year 2021 2024 Cost E+5.75% 4.25% Size of RCF €25m €40m Cost of RCF E+3.25-3.50% E+3.00-3.25%

IMPROVED AND MORE ATTRACTIVE CAPITAL STRUCTURE

STRONG CASH FLOW GENERATION ENABLING QUICK DELEVERAGING

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KEY MESSAGES AND OUTLOOK

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Confirmed leadership in a growing French market

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Robust financial performance and optimised capital structure improving financial flexibility

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Disciplined approach to portfolio acquisitions driving attractive risk-adjusted returns

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Solid and increasingly secured backbook providing highly predictable cash flows

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Investment in servicing already bringing outstanding outcomes – New medium target set at 30% of loan servicing revenue contribution

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Q&A