Axactor SE

Investor Presentation • Oct 27, 2022

Q3 2022

27 October 2022

Q3 highlights

Financial update

Outlook

Q&A

Financial highlights for the quarter

• Continued EBITDA margin expansion reaching 51% for the quarter

• EBITDA of EUR 30m, up from EUR 13m last year

• Cash EBITDA growth of 22% y-o-y

• Cash EBITDA of EUR 54m, up from EUR 44m last year

• Profit after tax of EUR 10m, up from EUR -2m last year

• Stable annualized return on equity of 10%

• NPL investments of EUR 69m for the quarter

• Already secured investments of more than 2x replacement capex in 2022
• Investing at an attractive Gross IRR of 20% YTD compared to 16% on the backbook¹

Axactor is pursuing a strategy based on three strategic levers

Blending the book	• Solve old claims with low gross IRR and replace them with new higher gross IRR claims • Accelerate blending and secure growth through
	investing significantly above replacement capex
Cost leadership	• Axactor was incepted to disrupt the industry on cost-to-collect
	• Currently investing extensively in data-driven valuation and -operation to excel further
Best at what we do	Targeted focus to become best at what we do1 • Industry: Bank & finance • Debt type: B2C, unsecured
	• Markets: Organic growth

Third quarter is a continuation of the growth seen throughout 2022

NPL ERC and company acquisitions (EUR billion)

NPL gross IRR on the total book is steadily increasing

- Current market prices significantly more favorable compared to the total book

1) End of period 2) Committed NPL investments 3) Everything else equal

6

NPL investment estimate of EUR 250 - 300m for the year reiterated – securing material growth on NPL

NPL investments (EUR million)

NPL investment estimate of EUR 250 - 300m for the year

• Invested EUR 69m during the quarter
• Need to close additional NPL investments of EUR 18 - 68m to reach the full year estimate

Already secured investments of more than 2x replacement capex in 2022

Axactor with record low NPL cost-to-collect YTD 2022

- Materializing in an EBITDA percentage among the best in the industry

1) Cost is calculated as segment OPEX + allocation of unallocated OPEX and Depreciation & Amortization (excluding amortization of NPL portfolios). Segment OPEX is used as allocation key. Income is calculated as Total income adjusted for revaluations to show income excluding one-time effects based on changes in

future expectations. Additional adjustments made on two peers to make numbers comparable, e.g. due to reporting numbers as a bank. 2) Peer numbers for 2021, Axactor YTD 2022

3) Peers: FactSet as of 7 Oct, 2022; Broker estimates. Axactor = YTD 2022 continuing operations

8

Financial results in perspective

- Positive development on all key financial metrics YTD

Q3 highlights

Financial update

Outlook

Q&A

Group: Continued growth on gross revenue y-o-y

Gross revenue (EUR million)

• Gross revenue is up 17% y-o-y from a weak quarter last year
• NPL gross revenue growth of 17% y-o-y
• 3PC gross revenue growth of 20% y-o-y
• Gross revenue is down from last quarter as Q3 is seasonally weaker than Q2

NPL segment: Total income growth of 63% with stable margins

NPL Total income and CM% (EUR million, and %)

Total income growth drivers

• Gross revenue growth of 17%
• Collection performance of 99%
• Reduced amortization rate following the revaluation in Q4 2021 and higher gross revenue for the quarter

3PC segment: Total income growth of 20% compared to last year

3PC Total income and CM% (EUR million and %)

• Total income growth of 20% y-o-y driven by the acquisition of C.R. Service
• Marginal organic growth on 3PC driven by Spain and Italy
• Underlying margin is slightly better in Q3-22 compared to last year, when adjusting for onetime effects

Group: Continued EBITDA margin expansion and Cash EBITDA growth of 22% compared to last year

Cash EBITDA (EUR million)

Rising interest rates is expected to increase interest expense on borrowings with EUR 2.1m in Q4

Quarterly interest expense on borrowings (EUR million)

Annualized ROE for the quarter in line with YTD results underpinning the stable financial results in 2022

Return on equity to shareholders

Axactor has a robust balance sheet positioned for growth

Equity	• Satisfying equity ratio of 29%
Liquidity	• Available cash of EUR ~20m • Unused funding line of EUR ~100m on the revolving credit facility
Covenant headroom	• Satisfying headroom to bond covenants • Loan to value of 72% vs. the covenant of 75%
Funding lines	• No maturities until the end of 2023
Investment capacity	• Estimated investment capacity of EUR ~320m in 2022, well above replacement capex of EUR 108m

Q3 highlights

Financial update

Outlook

Q&A

Outlook

19

Increased cost of funding¹

• Expect interest expense on borrowings to increase by EUR 2.1m from third to fourth quarter
• 1pp further increase in interest rates is estimated to increase quarterly interest expense on borrowings by EUR 1.8m

Mixed outlook on backbook collections

• Rising inflation and interest rates might put pressure on debtors' ability to repay and postpone collections
• Low unemployment rates, increasing salaries and government aid packages expected to partly offset challenges

Growth and margin expansion on NPL

• Expect to deploy EUR 250 300m in NPL portfolios in 2022
• Expect margin expansion driven by attractive gross IRR levels and improved economies of scale over time

Financial targets

Axactor is pleased to announce that financial targets will be published on 11 January 2023

The targets will be presented in a global investor webcast at 10:00 CET

Furthermore, the company invites all debt and equity analysts to a physical lunch meeting at 12:00 CET

Q3 highlights

Financial update

Outlook

Q&A

Supporting information

NPL investment commitments of EUR 113m next 12 months

Quarterly NPL investments (EUR million)

ERC increasing by 11% y-o-y driven by increased NPL investments in 2022

ERC development (EUR million)

Forward ERC profile by year (EUR million)

3PC volumes by geographic region

3PC Total income split by geographic region

• Spain accounting for 46% of total income on 3PC
• Italy share of Total income increased to 17% following the acquisition of C.R. Service

Discontinued operations

- REO book value reduced to EUR 13m ultimo Q3

REO Total income and net profit¹ (EUR million and %)

REO book value (EUR million)

REO number of units

Bond covenants (1/2)

- Secured LTV is increasing as bond repurchase is funded by drawing on the secured RCF

Loan-to-value¹- Covenant ≤75%

(Total portfolio book value divided by net interest-bearing debt)

Secured Loan-to-value¹ - Covenant ≤65% (Total portfolio book value divided by secured net interest-bearing debt)

Bond covenants (2/2)

- Leverage ratio increasing due to 1) investment ramp-up and 2) discontinued operations

Leverage ratio¹- Covenant ≤4.0x (Net interest-bearing debt divided by LTM Pro-forma adjusted cash EBITDA

Interest coverage ratio¹ - Covenant ≥4.0x (Pro-forma adjusted cash EBITDA divided by net interest expenses)

Terms and abbreviations

Abbreviations

SPV Special purpose vehicle VIU Value in use

WACC Weighted average cost of capital

VPS Verdipapirsentralen/Norwegian central securities depository

3PC Third-party collection
AGM Annual general meeting
APM Alternative performance measures
ARM Accounts receivable management
B2B Business to business
B2C Business to consumer
BoD Board of Directors
Terms BS Consolidated statement of financial position (balance sheet)
CF Consolidated statement of cash flows
Active forecast Forecast of estimated remaining collection on NPL portfolios CGU Cash generating unit
Board Board of directors CM Contribution margin Cash EBITDA margin Cash EBITDA as a percentage of gross revenue
D&A Depreciation and amortization
Chair Chair of the board of directors Dopex Direct operating expenses
Contribution margin (%) Total operating expenses (excluding SG&A, IT and corporate cost) as a percentage of total EBIT Operating profit/Earnings before interest and tax income
EBITDA Earnings before interest, tax, depreciation and amortization Collection performance Gross collection on NPL portfolios in relation to active forecast, including sale of
ECL Expected credit loss repossessed assets in relation to book value
EGM Extraordinary general meeting Equity ratio Total equity as a percentage of total equity and liabilities
EPS Earnings per share Forward flow agreement Agreement for future acquisitions of NPLs at agreed prices and delivery
ERC Estimated remaining collection Gross IRR The credit adjusted interest rate that makes the net present value of ERC equal to NPL book
ESG Environmental, social and governance value, calculated using monthly cash flows over a 180-months period
ESOP Employee stock ownership plan Group Axactor ASA and all its subsidiaries
FSA The financial supervisory authority NPL amortization rate NPL amortization divided by collection on own NPL portfolios
FTE Full time equivalent
One off portfolio acquisition Acquisition of a single portfolio of NPLs GHG Greenhouse gas emissions
Opex Total operating expenses IFRS International financial reporting standards
Recovery rate Portion of the original debt repaid LTV Loan to value
Replacement capex Acquisitions of new NPLs to keep the same book value of NPLs from last period NCI Non-controlling interests
Repossession Taking possession of property due to default on payment of loans secured by property NPL Non-performing loan
Repossessed assets Property repossessed from secured non-performing loans OB Outstanding balance, the total amount Axactor can collect on claims under management,
SG&A, IT and corporate cost Total operating expenses for overhead functions, such as HR, finance and legal etc including outstanding principal, interest and fees
Solution rate OCI Consolidated statement of other comprehensive income Accumulated paid principal amount for the period divided by accumulated collectable principal
P&L Consolidated statement of profit or loss amount for the period. Usually expressed on a monthly basis
PCI Purchased credit impaired Active forecast Forecast of estimated remaining collection on NPL portfolios
PPA Purchase price allocations
REO Real estate owned
ROE Return on equity
SDG Sustainable development goal
SG&A Selling, general & administrative