Investors presentation H1 2019 Results August 29, 2019 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. Unless otherwise indicated, the financial information presented herein as of and for the half ended June 30, 2019 includes the impact of the DSO and the Serfin acquisitions and excludes the impact of the Sistemia acquisition. For periods prior to January 1, 2019, figures are presented on a pro forma combined basis for MCS, DSO and Serfin. Prior to their respective acquisitions, the consolidated financial statements of DSO and Serfin were prepared in accordance with French GAAP and Italian GAAP, respectively. 2
Key Highlights of H1 2019 results Positive quarterly growth on Cash Revenues (+2%) and Cash EBITDA (+7%) in Q2 2019 (vs Q1 2019) We ended H1 2019 with a strong performance on a per portfolio basis with over performance of our due-diligence expectations • Stable Gross collections (only -1% decrease in Q2 vs Q1 2019) as the logical consequence of low investments in 2018 (-5% / -€5.8m LTM) being offset by our strong investment level in H1 2019 Strong momentum in Servicing (+5% / +€1.1m increase in Q2 vs Q1 2019) • The group’s revenues profile remains well balanced, with 56% of the group’s revenues stemming from recurring, capital light servicing activities • LTM Cash EBITDA slightly below 2018 levels, as expected post lower portfolio acquisitions in 2018 The resulting LTM Cash EBITDA stands at €94 million, 5% below LTM June 2018 and growth momemtum is expected to be driven by: Stronger debt purchasing volumes since the beginning of 2019 (€25 million during H1 2019 only; +€9 million versus H1 2018) with new transactions • already signed early in Q3 2019 85% of our synergies plan have been secured in H1 2019, of which €0.4 million of gain have flowed in our P&L to date • As a reference, it is worth noting that the LTM H1 2019 Cash EBITDA margin remains stable at 45% (vs. 46% H1 2018) Our commercial dynamics are gathering pace in France and Italy In France, new servicing mandates and debt purchasing transactions were signed, proving a robust French market. Our pipeline at its highest ever • In Italy, completion of our acquisition of Sistemia S.p.A. on July 10, 2019, a debt servicer with strong real-estate expertise, generating €26 million in • revenue and €8.6 million in EBITDA in 2018 The combination of Serfin and Sistemia allows us to cover a full spectrum of debt collection services in Italy for the benefit of a wide range of • customers We continue to operate with moderate leverage levels and significant liquidity Leverage ratio at 3.1x (1) within previous guidance of 2.5 – 3.5x • Significant liquidity, with €86m of cash and €50m of undrawn RCF, readily available to seize attractive investment opportunities • (1) Net debt / Cash EBITDA ratio for MCS&DSO including Serfin combination and synergies realization and excluding the recent Sistemia acquisition 3
Positive quarterly growth on Cash Revenues and Cash EBITDA MCS&DSO P&L including Serfin Total costs Total Cash revenues (€m) (€m) 52.2 51.3 -2% 22.6 23.7 30.1 29.6 28.7 28.5 Q1 2019 Q2 2019 Q1 2019 Q2 2019 Gross collections Servicing revenues Cash EBITDA & Cash EBITDA Margin KEY HIGHLIGHTS (€m) 41% 43% Compared to Q1, Collections stability (only -1% decrease) results mainly from the impact of our • limited 2018 acquisition volumes on our backbook collections being partly compensated by +7% vintage 2019 collections. Performance on a per portfolio basis remains strong with over performance of our due-diligence expectations 22.6 21.2 In parallel, solid performance on Servicing for Q2 2019 (+5%) resulting from increased business • with both existing and new clients where we have won competitive tenders The group’s revenues profile remains well balanced, with 56% of the group’s revenues • stemming from recurring, capital light activities (vs. 52% in Q1 2019) Q1 2019 Q2 2019 We believe this Cash EBITDA growth will prove to be consistent thanks to both our synergies • Cash EBITDA Cash EBITDA margin plan and our stronger debt purchasing (already in H1 along with new transactions signed early in Q3 2019). 4
H1 is slightly below 2018 levels but with growth momentum MCS&DSO P&L including Serfin Total costs Total Cash revenues (€m) (€m) 103.5 104.9 +1% 45.8 46.3 59.0 59.6 59.1 57.2 H1 2018 H1 2019 H1 2018 H1 2019 Gross collections Servicing revenues Cash EBITDA & Cash EBITDA Margin KEY HIGHLIGHTS (€m) 44% 42% Compared to H1 2018, H1 2019 Collections decrease by 3% mainly impacted by our limited • 2018 acquisition volumes on backbook collections -5% Growth momentum is expected to be driven by both our dynamic investment strategy and our • synergies plan as presented on the three next slides 45.9 43.8 In parallel, slighlty increasing performance on Servicing for H1 2019 (+1%) resulting from • increased business with both existing and new clients where we have won competitive tenders H1 2018 H1 2019 Cash EBITDA Cash EBITDA margin 5
Strong momentum in Servicing CAGR LTM Jun. 19 vs Dec.17 Servicing revenues per quarter 1 7% 24.9 +58% 23.7 23.4 22.9 22.7 22.6 22.4 3.2 21.2 21.1 2.7 3.5 2.6 2.9 2.6 2.8 18.7 2.7 2.6 5.4 5.1 4.4 2.7 4.8 4.4 6.2 5.6 4.9 5.1 2% 5% 2.1 16.3 15.8 15.5 15.3 15.1 14.1 14.2 14.0 13.6 13.5 5% Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 DSO MCS Serfin Total 1 Before Q1 19, all the figures are consolidated on a pro-forma view KEY HIGHLIGHTS We face a servicing growth momentum mainly driven by: • In France, solid performance of our existing clients contracts and competitive tenders generated additional business of €1.5m over the semester. This offsets the declining contribution of CIF contract • In Italy, we are gaining new mandates thanks to joint commercial efforts between our Italian and French teams 6
Dynamic portfolio acquisitions in H1 2019 Portfolio acquisitions 84M & 120M Gross ERC 84M Gross ERC +58% (€m) -3% 354 345 25 16 H1 2018 H1 2019 12/31/2018 06/30/2019 Portfolio acquisitions 120M Gross ERC -5% 403 383 KEY HIGHLIGHTS Our commercial dynamics are gathering pace in France and Italy (next slide) • Robust level of portfolio acquisitions in H1 2019 with continued strict investment discipline • N ew transactions already signed early in Q3 2019 12/31/2018 06/30/2019 • 120M Gross ERC decreasing as our collections level remains higher on H1 (€57 million) than new portfolio integration ERCs (€39 million) 7
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