Dovalue

Investor Presentation • Aug 2, 2019

Financial Results to June 30th, 2019

August 2nd, 2019

1H19 Key Messages

1 Continued Revenues and EBITDA expansion	 Completed on-boarding of €2.3bn new mandates (Iccrea and Carige)
	Stable collections as expected: collection rate up at 2.5% despite lower GBV, FY19  collections in Italy expected at approximately €2.1 billion
	 +7% Revenue growth: higher performance fees, indemnities and ancillary revenues
	+11% EBITDA ex NRI1 growth, with EBITDA margin +2 p.p. to 35% 
	+27% Net Income ex NRI1 to €27m (ca. €23m NRI impact on Net Income) 
	Net Debt at €320m despite acquisition closing, leverage at 1.8x Net Debt/EBITDA 
2
	 Italy: +€1.5bn new mandates (ICCREA Banking Group and a new investor client)
Contract wins in core markets	Greece: +€0.1bn new servicing mandate from an investor. On-boarding in 3Q19 
	 Iberia: +€2bn NPL/REO portfolios awarded in 1H19 from several clients
	Cyprus: preferred bidder for a >€4bn portfolio, confirming doValue leadership. Closing  expected in 3Q19
3 New Organization complete – Business Plan Update in November	 doBank becomes doValue: Group re-organization, banking license withdrawal and name change completed. Streamlined organization aligned to business focus
	Closing of Altamira Acquisition: doValue the #1 independent servicer in Southern Europe  with unmatched product, client and market diversification. Banco Santander to remain a holder of a 15% minority stake in Altamira Asset Management
	From accounting perspective, AAM consolidated in P&L as of July 1st  while in the B/S as of June 30, 2019
	Medium-term Business Plan update on November 8th, 2019 (with 3Q19 results) 
Notes: 1. Excluding	Non Recurring Items (costs linked to Group reorganization process and the acquisition of Altamira Asset Management).

1

Transformational corporate structure re-organization completed

• Banking structure not aligned to core business (Servicing 92% of revenues)
• Capital requirements limiting M&A growth

Complex regulatory process successfully completed in June 2019

• Servicing Group status aligned with core business and main peers
• Ability to deploy balance sheet strength for accretive M&A
• Streamlined corporate costs
• Regulatory and internal controls remain at highest standards

Focus on Altamira metrics: a positive start to 2019

N° of clients served	25
% NPL on total AuM	64%
% REO on total AuM	36%
% Corporate (Spain)	85%
Average ticket size (Spain)	€52k
% loans >€500k (Spain)	68%
N° of RE assets online (Spain)	44k

Complete services proposition along the NPL and REO value chain

Client's asset	Service offered	Value proposition	Revenue Model
	Credit management	 Integrated loan management servicing process, restructuring (UTP) and liquidation (NPL) Combination of workout and legal strategies 	Base/flat fee Collection fee: tied to yearly collections
NPL and UTP Loans	Due diligence	 Support in acquisition / disposal processes of loan portfolios and dialogue with rating agencies	Fee-for-service
	Master servicing & Securitization	 doValue as Master Servicer for securitizations  Structuring, including SPV incorporation, loan transfer, technical characteristics, rating process and securities distribution	Base/flat fee & fee-for-service
Real Estate Assets	REO commercialisation	 Sale of RE assets through internal specialists and a broker network State-of-the-art and innovative digital platform 	Fee-for-sale
	RE development	 Real estate development with capabilities to perform feasibility analysis Value creation versus assets liquidation 	Fee-for-sale
	Property management	Property management of real estate assets  Multi-client portfolio management capabilities 	Fee-for-service
Loans and Real Estate Assets	Data Management	 NPL business info  Data quality management	Fee-for-service
	Legal Services	 Monitoring judicial activity  Support legal services	Fee-for-service

Significant growth potential in Southern European markets

Market potential1	doValue AUM	Market Position	2019 Servicing Pipeline	Market update
€bn
226	81	#1	32	 Active primary market with signs of pick up in secondary market and UTP
285	45	#1	5	 Several secondary market opportunities, more expected by YE
21	7	#1	7	Altamira/doValue preferred bidder for a  >€4bn portfolio
107	2	Top 5	14	 Active pipeline of servicing opportunities and more extraordinary transactions expected in the market
45	2	Top 5	2	 Several mid-sized servicing opportunities

doValue leads in the most attractive NPL and REO markets

1. NPL/REO assets.

Source: Oliver Wyman (NPA in Spain), PWC (The Italian NPL Market), doValue analysis on press reports. Spain servicing pipeline refers to opportunities up to 3Q19 only.

Key financial highlights

			1H181	1H19	∆ (%)
e s u r n e e	Largest servicing portfolio in the Italian market	Italy GBV EoP	€86.8bn	€80.6bn	(7.2%)	 €2.3bn new servicing mandates on boarded in the period  €0.7bn inflows from existing clients
v v ri e d R	Best-in-class collections	Gross collections	€882m	€886m	+0.4%	 Trend in line with expected seasonality, consistent with growth in FY19 Collection rate improving at 2.5% 
L & e r P u e ct pl u r m st Si	Visible revenue base	Gross revenues	€105.3m	€112.2m	+6.5%	 Growth in performance fees, indemnity fees and ancillary revenues
	Operating leverage	Operating costs ex NRIs2	€59.1m	€63.5m	+7.4%	 HR cost growth to support start-up activities €10.2m NRI2 recorded in the period 
	Proven profitability	EBITDA ex NRI2	€35.2m	€39.1m	+10.8%	 Continued expansion of profitability on the back a positive top-line trend  Improved EBITDA margin by 2 p.p. at
		EBITDA ex NRI2 margin	33.5%	34.8%	+1.3 p.p.	35%  Reported EBITDA at €28.9m
		Net income ex NRI2	€20.9m	€26.6m	+27.4%	Tax charges include a DTA  reassessment cost (one off-non cash) of €10.8m (triggered de-banking process)
n o h ti a s r a e C n e g	Conservative financial profile	Net Financial Position3	(€29.7m)	€319.7m	n.m.	 Limited leverage despite closing of Altamira Acquisition (1.8x Net Debt/EBITDA)
	Benefits from tax assets	Tax Assets	€81.4m	€76.3m	(6.3%)	 Significant tax assets fully off-settable against direct and indirect taxes

Notes: 1: Restated for comparability with 1H19 results following the application of IFRS 16; 2: Excluding Non Recurring Items (costs linked to Group reorganization and the acquisition of Altamira A.M.).

Evolution of gross book value under management

• On-boarding of Italian mandates awarded in late 2018 (ICCREA and Carige)
• New agreements reached in 2019 (€1.5bn in Italy and €0.1bn in Greece) not included
• Positive inflows from existing clients, following the trend of decline in 2017 and 2018
• Write offs at 2.3x of collections, in line with normalized trend of 2.0-2.5x
• Positive collection/restructuring trend in the Greek portfolio

Portfolio composition Italy: large, diversified, secured, corporate

9

Seasonality of collections across quarters

1. Italfondiario collections for 2016 are accounted for as net cash flow consistent with their historical reporting.

2. Stock GBV excludes new servicing mandates not yet fully reflected in collections of the period.

Ancillary and other revenues

• 12% yoy growth in Ancillary revenues, outpacing total revenue growth as expected:
  • Master servicing activities growing in line with revenue mix shifting towards securitized investor portfolios, confirming dovalue #1 market position in Italy
  • Data remediation trend benefits from activity on new GACS
  • Positive growth in Judicial Management services
• Other revenues include Greek branch for €2.8m, which is structured as cost cover model with clients

From gross to net revenues

• Collection fee growth on the back of better collection rates
• Lower GBV trend drives a reduction in base fees offset by growing indemnity fees
• Lower outsourcing fees due to limited reliance on external collections services, focused on smaller ticket loans
• Resilient fee structure supported by doValue's selective commercial policies

Focus on operating expenses

• Operating expenses ex NRI at €63.5m
• Total Operating Expenses include €10.2m Non Recurring Items, related to the completion of the Group Reorganization and the closing of the acquisition of Altamira Asset Management (part of SG&A)
• Slight growth in other SG&A due to the ramp up of Greek operations
• Personnel cost growth in line with expectations, to support the start-up of the Greek and UTP servicing business:
  • 13% of total HR costs are variable
• HR efficiency plan progress: reached 85% of total Business Plan 2018- 2020 targeted staff reduction, mostly via early retirement incentives
  • Lower than expected cost of efficiency plan. Savings and costs to be fully realized in P&L by end of 2019
  • Tangible cost benefits already in 2019
• Slightly higher IT spend due to software/system development

Notes: 1. Excluding Non Recurring Items (costs linked to Group reorganization process and the acquisition of Altamira Asset Management).

Balance Sheet staying asset-light with no debt purchase

NWC and net financial position

15

1H19 Cash flow trend

• €21m free cash flow in 1H19, with an acceleration expected in H2, in line with timing of Italian courts concentrating settlements around year-end
• Low capex needs and limited no cash taxes for a Free Cash Flow generation
• Short-term financial NPL investment of opportunistic nature executed in 1Q19 and closing of Altamira Acquisition in 2Q

Condensed consolidated income statement 1H19

(€/000)

Condensed consolidated income statement	Firs Half		Firs Half		Change
	2019		2018 RESTATED ⁽¹⁾		Amount	%
Servicing revenues		98,149		94,641	3,508	4%
Co-investment revenues		327		475	(148)	(31)%
Ancillary and other revenues		13,679		10,158	3,521	35%
Gross Revenues		112,155		105,274	6,881	7%
NPL Outsourcing fees		(9,564)		(10,879)	1,315	(12)%
Net revenues		102,591		94,395	8,196	9%
⁽³⁾ Staff expenses		(48,727)		(45,070)	(3,657)	8%
Administrative expenses		(25,013)		(14,103)	(10,910)	77%
Operating expenses		(73,740)		(59,173)	(14,567)	25%
EBITDA		28,851		35,222	(6,371)	(18)%
EBITDA Margin		26%		33%	(8%)	(23)%
Non-recurring items (NRI) included in EBITDA ⁽²⁾	(10,208)		-		(10,208)	n.s.
EBITDA excluding non-recurring items (NRI)	39,059		35,222		3,837	11%
EBITDA Margin excluding non-recurring items (NRI) Impairment/Write-backs on property, plant, equipment and intangible	35%		33%		1%	4%
assets		(3,331)		(2,430)	(901)	37%
Net Provisions for risks and charges		(3,002)		(81)	(2,921)	n.s.
Net Write-downs of loans		405		388	17	4%
Net income (losses) from investments		-		340	(340)	(100)%
EBIT		22,923		33,439	(10,516)	(31)%
Net income (loss) on financial assets and liabilities measured at fair value		669		630	39	6%
Net financial interest and commissions		(1,311)		(193)	(1,118)	n.s.
EBT		22,281		33,876	(11,634)	(34)%
Non-recurring items included in EBT ⁽³⁾	(12,640)		-
EBT excluding non-recurring items	34,921		33,876
Income tax for the period		(18,254)		(12,987)	(5,267)	41%
Profit (loss) from group of assets sold and held for sale net of tax Net Profit (Loss) attributable to the Group		- 4,027		- 20,889	- (16,901)	n.s. (81)%
NRI included in Net Profit (Loss) attributable to the Group	(22,584)		-		(22,584)	n.s.
Net Profit (Loss) attributable to the Group excluding NRI	26,611		20,889		5,722	27%
Earnings per share (Euro)		0.05		0.27	(0.22)	(81)%
Earnings per share excluding non-recurring items (Euro)	0.34		0.27		0.07	26%

Notes: 1: In order to enhance the comparability of the figures for 2019 with the figures in the income statement, the effects of the application of the new IFRS 16 Leases as from January 1, 2019 have been included. 2: Non-recurring items in Operating expenses include the costs connected with the acquisition of Altamira Asset Management S.A.. And those incurred for the Group reorganisation project; 3: Non-recurring items included in net provisions regard termination incentive plans that have therefore been reclassified here from personnel expenses; 4: Non-recurring items included in income taxes mainly regard the cancellation of deferred tax assets following the change in the rate as part of the debanking process

Condensed consolidated income statement 1H18 – IFRS 16 impact

(€/000)
	Firs Half		Firs Half
Condensed consolidated income statement	2018	IFRS 16 impact	2018 RESTATED
Servicing revenues	94,641	-	94,641
o/w Banks	61,767	-	61,767
o/w Investors	32,874	-	32,874
Co-investment revenues	475	-	475
Ancillary and other revenues	10,158	-	10,158
Gross Revenues	105,274	-	105,274
Outsourcing fees NPL	(10,879)	-	(10,879)
Net revenues	94,395	-	94,395
Staff expenses	(45,070)	-	(45,070)
Administrative expenses	(15,192)	1,089	(14,103)
o/w IT	(6,324)	-	(6,324)
o/w Real Estate	(4,157)	1,043	(3,114)
o/w SG&A	(4,711)	46	(4,665)
Operating expenses	(60,262)	1,089	(59,173)
EBITDA	34,133	1,089	35,222
EBITDA Margin	32%	0%	33%
Impairment/Write-backs on property, plant, equipment and intangible assets	(1,188)	(1,242)	(2,430)
Net Provisions for risks and charges	(80)	(1)	(81)
Net Write-downs of loans	388	-	388
Net income (losses) from investments	340	-	340
EBIT	33,593	(154)	33,439
Net income (loss) on financial assets and liabilities measured at fair value	630	-	630
Net financial interest and commissions	(94)	(99)	(193)
EBT	34,129	(253)	33,876
Income tax for the year	(13,084)	97	(12,987)
Profit (loss) from group of assets sold and held for sale net of tax	-	-	-
Net Profit (Loss) attributable to the Group	21,045	(156)	20,889

Condensed consolidated balance sheet 1H19

Condensed balance sheet	6/30/2019	12/31/2018	Change
			Amount	%
Cash and liquid securities	86,067	74,443	11,624	16%
Financial assets	48,715	36,312	12,403	34%
Tangible assets	21,571	4,290	17,281	n.s.
Intangible assets	409,508	6,847	402,661	n.s.
Tax assets	79,943	87,355	(7,412)	(8)%
Trade receivables	199,650	99,224	100,426	101%
Assets on disposal	10	710	(700)	(99)%
Other assets	11,926	7,855	4,071	52%
Total assets	857,390	317,036	540,354	n.s.
Financial liabilities: due to banks	405,809	-	405,809	n.s.
Other financial liabilities	91,154	294	90,860	n.s.
Trade payables	41,138	21,848	19,290	88%
Tax Liabilities	70,804	11,090	59,714	n.s.
Employee Termination Benefits	9,949	9,577	372	4%
Provision for risks and charges	17,690	20,754	(3,064)	(15)%
Liabilities on disposal	-	6,532	(6,532)	(100)%
Other liabilities	25,814	14,152	11,662	82%
Total Liabilities	662,358	84,247	578,111	n.s.
Share capital	41,280	41,280	-	n.s.
Reserves	149,909	140,915	8,994	6%
Treasury shares	(184)	(246)	62	(25)%
Result for the period	4,027	50,840	(46,813)	(92)%
Total shareholders' equity	195,032	232,789	(37,757)	(16)%
Minorities	-	-	-	n.s.
Total liabilities and shareholders' equity	857,390	317,036	540,354	n.s.

Consolidated cash flow 1H19

(€/000)
Cash Flow	6/30/2019	6/30/2018
EBITDA	28,851	34,133
Capex	(1,271)	(1,638)
EBITDA-Capex	27,580	32,495
as % of EBITDA	96%	95%
for Adjustment accrual on share-based incentive system payments	2,440	2,763
Changes in NWC	(2,696)	1,704
Changes in other assets/liabilities	(6,475)	(2,995)
Operating Cash Flow	20,849	33,967
Tax paid (IRES/IRAP)	-	-
Free Cash Flow	20,849	33,967
(Investments)/divestments in financial assets	(11,240)	(11,966)
Equity (investments)/divestments	(360,998)	-
Dividend paid	(36,263)	(30,908)
Net Cash Flow of the period	(387,652)	(8,907)
Net financial position - Beginning of period	67,911	38,605
Net financial position - End of period	(319,742)	29,698
Change in Net Financial Position	(387,653)	(8,907)

Key Performance Indicators 1H19

(€/000)
Key performance indicators	6/30/2019	12/31/2018	6/30/2018 RESTATED ⁽¹⁾
Gross Book Value Italy (Eop) - in millions of Euro -	80,622	82,179	86,819
Gross Book Value Greece (Eop) - in millions of Euro -	1,549	-	-
Collections for the period Italy - in millions of Euro -	886	1,961	882
Collections for the Last Twelve Months (LTM) Italy - in millions of Euro -	1,963	1,961	1,830
LTM Collections/GBV - Italy (EoP)	2.4%	2.4%	2.1%
LTM Collections Stock/GBV Stock - Italy (EoP)	2.5%	2.5%	2.4%
Staff FTE/Total FTE	36%	37%	37%
LTM Collections/Servicing FTE	2,659	2,668	2,479
Cost/Income ratio	72%	61%	63%
EBITDA	28,851	81,293	35,222
Non-recurring items in EBITDA	(10,208)	(2,712)	-
EBITDA excluding non-recurring items	39,059	84,005	35,222
EBT	22,281	80,202	33,876
Non-recurring items in EBT	(12,640)	-	-
EBT excluding non-recurring items	34,921	80,202	33,876
EBITDA Margin	26%	35%	33%
EBITDA Margin excluding non-recurring items	35%	36%	33%
EBT Margin	20%	34%	32%
Earning per share (Euro)	0.05	0.65	27%
Earning per share excluding non-recurring items (Euro)	0.34	0.67	27%
EBITDA – Capex	27,580	75,885	34,783
Net Working Capital	158,512	77,376	76,561
Net Financial Position of cash/(debt)	(319,742)	67,911	29,698

⁽¹⁾ In order to enhance the comparability of the figures for 2019 with the figures in the income statement, the effects of the application of the new IFRS 16 Leases as from January 1, 2019 have been included. See also the separate reconciliation table.

Tax assets

Disclaimer

This presentation and any materials distributed in connection herewith (together, the "Presentation") do not constitute or form a part of, and should not be construed as, an offer for sale or subscription of or solicitation of any offer to purchase or subscribe for any securities, and neither this Presentation nor anything contained herein shall form the basis of, or be relied upon in connection with, or act as an inducement to enter into, any contract or commitment whatsoever. The information contained in this Presentation has not been independently verified and no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness, reasonableness or correctness of the information or opinions contained herein. None of doValue S.p.A., its subsidiaries or any of their respective employees, advisers, representatives or affiliates shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this Presentation. The information contained in this Presentation is provided as at the date of this Presentation and is subject to change without notice.

Statements made in this Presentation may include forward-looking statements. These statements may be identified by the fact that they use words such as "anticipate", "estimate", "should", "expect", "guidance", "project", "intend", "plan", "believe", and/or other words and terms of similar meaning in connection with, among other things, any discussion of results of operations, financial condition, liquidity, prospects, growth, strategies or developments in the industry in which we operate. Such statements are based on management's current intentions, expectations or beliefs and involve inherent risks, assumptions and uncertainties, including factors that could delay, divert or change any of them. Forward-looking statements contained in this Presentation regarding trends or current activities should not be taken as a representation that such trends or activities will continue in the future. Actual outcomes, results and other future events may differ materially from those expressed or implied by the statements contained herein. Such differences may adversely affect the outcome and financial effects of the plans and events described herein and may result from, among other things, changes in economic, business, competitive, technological, strategic or regulatory factors and other factors affecting the business and operations of the company. Neither doValue S.p.A. nor any of its affiliates is under any obligation, and each such entity expressly disclaims any such obligation, to update, revise or amend any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on any such forward-looking statements, which speak only as of the date of this Presentation. It should be noted that past performance is not a guide to future performance. Please also note that interim results are not necessarily indicative of full-year results.

Certification of the financial reporting officer

Elena Gottardo, in her capacity as the officer responsible for preparing corporate accounting documents, certifies – pursuant to Article 154-bis, paragraph 2, of Legislative Decree 58/1998 (the Consolidated Financial Intermediation Act) – that the accounting information in this presentation is consistent with the data in the accounting documentation, books and other accounting records.

Investor relation contacts: Investor relations contacts

Fabio Ruffini Investor Relations

Tel.: +39 06 4797 9154 Mail: investorrelations@dovalue.it