Q4 and Full Year 2018 Conference Call Presentation 1 Statements - - PowerPoint PPT Presentation

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q4 and full year 2018 conference call presentation
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Q4 and Full Year 2018 Conference Call Presentation 1 Statements - - PowerPoint PPT Presentation

Apr 12, 2023 291 likes •452 views

Q4 and Full Year 2018 Conference Call Presentation 1 Statements herein, other than statements of historical fact, are forward-looking statements, which are based on our current beliefs, projections, assumptions and expectations concerning future

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Q4 and Full Year 2018 Conference Call Presentation

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Statements herein, other than statements of historical fact, are forward-looking statements, which are based on our current beliefs, projections, assumptions and expectations concerning future

  • perations and financial performance. Such statements involve uncertainties and risks, some of

which are not currently known to us, and may be superseded by future events that could cause actual results to differ materially from those expressed or implied herein. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of today, and are qualified in their entirety by these cautionary statements. Information regarding risk factors and other information that could change our projections or impact our actual results can be found in our most recent Annual Report on Form 10-K and in subsequent public filings, and should be considered in evaluating the forward looking statements herein. Except as required by law, we assume no

  • bligation to update or revise these statements to reflect changes in events, conditions or

circumstances on which any such forward-looking statements are based, in whole or in part.

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FULL YEAR 2018 HIG IGHLIGHTS – RECENT IN INVESTMENTS DELIVERED RECORD CA CASH SH COLLECT CTIONS OF $1.63 BIL BILLION

Record portfolio investment in Americas Core of $657.1 million Portfolio investment and new call centers drove record cash collection in U.S. call centers Digital cash collections have doubled since 2017 Legal cash collections increased 24% in Q4 2018 compared to Q4 2017 Operational improvements in Europe

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PAST IN INVESTMENTS CONTINUE DELIVERING VALUE

NCM purchase in 2012 perpetuated expansion into new asset class in 2017 and 2018 Purchase of Aktiv Kapital provided pan-European footprint and diversification

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OTH THER EVENTS

Net cash proceeds of $38 million on sale of majority stake in the RCB servicing platform

  • Approximately $27 million pretax gain
  • Well positioned in Latin America’s largest economy

Outsized noncash charge related to portfolios outperforming underwritten expectations

  • Noncash charge of approximately $21 million
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Q4 HIG IGHLIGHTS

Record quarterly portfolio investment of $490.9 million driven by Americas Core and Europe Core Record Estimated Remaining Collections (ERC) of $6.14 billion

Europe Core, $231.8 Americas Core, $172.5 Americas Insolvency, $52.9 Europe Insolvency, $33.7

Fourth Quarter 2018 Portfolio Investment

($ in millions)

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TH THE AMERICAS

Collector Tenure

United States, $3,484 Other Americas, $199

Americas ERC Breakdown

$ in millions, as of December 31, 2018

Areas of Focus

Legal Channel Government Relations Digital Engagement

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EUROPE

Cash collections in 2018 were a record Focused on specific deliverables in local markets Invested over 26% more in Europe Core portfolios during full year 2018 than in full year 2017 Environment is still competitive Expand market share in the countries we already operate in

UK, $1,217 Central Europe, $589 Northern Europe, $468 Southern Europe, $187

Europe ERC Breakdown

$ in millions, as of December 31, 2018

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FIN INANCIAL RESULTS - GAAP

Q4 2018 Full Year 2018

Cash Collections $402.7 $1,625.2 Total Revenues $236.7 $908.3 Net Income Attributable to PRA Group, Inc. $14.9 $65.6 Operating Expenses $183.1 $689.6 Diluted EPS $0.33 $1.44

($ in millions, except per share results)

Net Allowance Charges $21.4 $33.4

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Americas Core, $233.9 Europe Core, $113.2 Global Insolvency, $55.6

CA CASH SH COLLECT CTIONS

($ in millions) Americas Core, $945.2 Europe Core, $443.4 Global Insolvency, $236.6

Fourth Quarter Full Year 2018

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ADDITIONAL REVENUE AND ALL LLOWANCE CH CHARGES

Additional Revenue

  • Revisited interpretation of rules governing revenue recognition on portfolios that do not qualify

for sale accounting

  • Resulted in an additional $5 million of revenue from 2016 – 2018

Allowance Charges

  • Net Allowance charges of $21 million, primarily related to 2013 – 2015 U.S vintages
  • $195 million in upward revisions to estimated remaining collections in 2018
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OPERATING EXPENSES AND CA CASH SH EFFIC ICIENCY RATI TIO

($ in millions)

  • $183.1 million
  • Primarily driven by increases in

legal collection expenses and compensation and employee services

  • Cash efficiency ratio of 58% for

the full year

* Cash efficiency ratio = (cash receipts – operating expenses)/cash receipts

298 383 433 592 762 971 1,214 1,444 1,604 1,569 1,538 1,640 0% 10% 20% 30% 40% 50% 60% 70% 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Cash Receipts Cash Efficiency Ratio Insolvency as a % of Cash Collections

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ESTIMATED REMAINING COLL LLECT CTIONS AND AVAILABLE CA CAPITAL

Estimated Remaining Collections $826 Million Available for Portfolio Purchases

($ in millions)

United States - $3,483.8 United Kingdom - $1,216.5 Central Europe - $589.0 Southern Europe - $187.0 Northern Europe - $468.3 Other Americas - $198.7

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Q1 1 20 2019 19 RE REVENUE MODEL - $ $ IN IN THOUSANDS

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Q&A