Axactor SE

Earnings Release • Feb 28, 2017

February 28, 2017

4 th Quarter 2016 – Axactor AB

Key highlights Q4

• Large portfolio purchased in Spain; estimated gross collection first year EUR 7 million
• Forward flow deal Norway signed; start-up Apr-17; SEK 5 million in fresh claims monthly
• New collection system implemented in Spain

Growth through acquisitions – balanced revenue mix

• Axactor represented in 3 of the largest NPL markets in Europe (GER, ITA and SPA)

• Norway shows good potential for further 3PC growth and NPL acquisitions
• Well balanced revenue mix geographically

SPA NOR ITA GER

Growth through acquisitions – balanced revenue mix

• Year end 2016 with a healthy balance between NPL and 3PC revenue
• Continue to focus on 3PC growth to drive cash flow
• Q4 without full effect of 2016 NPL portfolio
• acquisitions Important to keep a balanced revenue mix going forward

	Axactor Strategy & Action plan
	 Step 1	Step 2		Step 3	
Strategy	• Establish debt collection service platform in Spain	• Top 3 market share in debt collection in Spain • Collection of debt on acquired Non-Performing loan portfolios	 	• Enter new growth markets with platform and portfolio acquisitions in Germany and Italy	
Action	• Acquisition of a Spanish debt collection platform with the ALD Abogados transaction	• Debt portfolio purchase from Financial Institutions Expand the 3rd • party collection business and increase work force	 	• Acquire attractive platforms in Germany and Italy • Cost optimisation and synergies with integration of all platforms in one debt collecting group	 
Economics	• Acquisition of ALD Abogados at attractive multiples	• Collect debt 2.0x – 3.0x purchase price		• Acquisitions of platforms at attractive multiples	
Timeline	December 2015	2016		2016 - 2018

Axactor Strategy & Action plan

Axactor Management Plan one year ago (Q4/´15 presentation).....

…. and what did we deliver - Axactor 2016 Main Milestones

⁷ Notes: FV = face value

1H 2017 Main Focus Areas NPL portfolio acquisitions – Primary Sales from Financial Institutions

Leveraging existing products in new markets

Nordic expansion - acquisition of Profact in Sweden

Operational improvements & system implementation to increase efficiency

Establish the Co-invest structure to increase CAPEX capacity

The Profact deal - access to the attractive Swedish NPL market

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					Status Operational Improvements & Systems Implementation
Behind plan Amber – Plan initiated On Track	System/ Standard	Overall status	Planned completion	Planned completion	Planned completion	Planned completion
COLLECTION SYSTEM	Country specific			May-17		
DIALER	Axactor Standard		April-17	Sept-17	April-17	Q3-17
IT INFRASTRUCTURE	Axactor Standard		Phase I – done Phase II – Q3-17		March-17	Q4-17
ERP SYSTEM/ INC. HR	Axactor Standard		Q1-17 (I) Q3-17 (II)	Q1-17	Phase I - April Q3-17 (II)	Phase I - Q3-17
DEBTOR PORTAL	Axactor Standard		H2-17	H2-17	H2-17	
BUSINESS INTELLIGENCE/ DATA WAREHOUSE	Axactor Standard		Q2-17	H2-17	Q2-17	Q3-17

Status Operational Improvements & Systems Implementation

Co-Invest Structure – EUR 200m Investment Capacity (illustrative)

• SPV to acquire 3-7 portfolios in the "Axactor countries"

• Axactor gets servicing agreement for entire set of portfolios with associated solid EBITDA • Increases Axactor's CAPEX capacity and reducing the risk 20%

• Adding significant collection volumes to Axactor collection centers

• Enables Axactor to bid for significantly larger portfolios

CO-INVESTOR 80%	AXACTOR 20%
EUR 80m	EUR 20m
BANK(S) 50% gearing EUR 100m

Key financials Q4-16

Income statement		Key comments
			• Altor included in Q4 P&L
			• Interest cost for the quarter is SEK 10.3 million
			• Unrealized FX effect is SEK -23.2 million
			amounts to SEK -62.5 million.
			• Cash EBITDA positive for the last two quarters
			be EUR
			• Q1 2017 report will introduce a more relevant and more
			detailed segment analysis

• Altor included in Q4 P&L
• Interest cost for the quarter is SEK 10.3 million
• Unrealized FX effect is SEK -23.2 million
• Amortization of NPLs and depreciation of (mainly) goodwill amounts to SEK -62.5 million.
• Cash EBITDA positive for the last two quarters
• As of Q1 2017 Report the reporting currency for Axactor will be EUR
• Q1 2017 report will introduce a more relevant and more detailed segment analysis

2016 EBITDA adjusted for "non-recurring" items

• Significant cost related to transaction support and DD related to 4 acquisitions
• Restructuring in Spain
• Corporate team sized for a "fully fledged" organization

Growth through acquisitions – balanced revenue mix

2017 as we ramp up NPL portfolio acquisitions

• NPL relative size is expected to increase through
• Large carve-out agreements would bolster the in winning this type of deals
• 61% • We are actively introducing existing products in to new markets within the Axactor group

3PC relative size to the extent we are successful

Q4 Balance Sheet

	31.12.2016		30.09.2016		31.12.2015
			613 244 473 244		298 307
					2 510 970 1 884 121 1 468 788
			le r -1 395 224 -1 346 421		$-1$ 290 103
		20 999	26 336			$-96$
	1749989		1 037 280		476 992
		240 601	732768
						5 0 0 0
		57 0 21	68 780			11 357
			32 388 37 977			500
	330 010			839 525		16857
			63 614 67 845			12420
rov			467 362 81 932
		3705		6 3 9 1		9963
		93 431	106 900		88 573
		628 113		263 068	110 956
	2 708 112		2 139 874		604 805

Assets	Equity and liabilities

Portfolio Statistics

450

• 7 portfolios acquired in Spain in 2016
• 2 new portfolios in Italy since the acquisition of CS Union end of Q2
• No portfolios added in Germany since acquisition of Altor in Q3/Q4 All countries with 15 years collection curves

Historical Development ERC

Portfolio Statistics

Capex

Book value Portfolios

Debt and Leverage

DNB/Nordea RCF

• Currently max leverage on portfolio is 35%
• Leverage ratio to increase to 50% when;
• months
• Leverage ratio to increase to 65% when;

• 7 approved loan portfolios with acquisition price of >1m EUR have a performance of a minimum 95% last 6

• 14 approved loan portfolios with acquisition price of >1m EUR have a performance of a minimum 95% last 6 months • Book value of a Approved Loan Portfolios exceeds EUR

50,000,000 • We expect to meet 50% leverage criteria's before of end of Q1 and 65% leverage criteria's before end of Q3

Italy (Outside DNB/Nordea ring fence)

• 100% gearing on portfolios @ 3m EURIBOR + 2%, • Total NPL facilities 41m EUR (27m utilized) and 12m in overdraft facilities (5m Utilized). Working to increase to NPL

• facility during 2017.

DNB/Nordea Revolving Credit Facility

Investment restrictions

• Max Portfolio size (15m EUR)
• Max average claim size (30k EUR)
• Min IRR (10%) on investment
• Max share of Telco/retail claims (15% of aggregate)
• Country/Region restrictions
• Forward flow contracts a maximum duration of 12 months or a termination clause with the same effect

Financial Covenants

• Group NIBD to Cash EBITDA < 3x (tested every quarter from Q4 2016)
• Axactor Platform AB consolidated NIBD to EBITDA < 2,5x (tested every quarter from Q4 2016)
• Waiver in place for the Platform NIBD to EBITDA covenant for the Q4 2016 reporting

Summary

• EUR 100-150m as 2017 NPL Portfolio CAPEX Plan (without co-investor)
• Ambition to increase gearing to 50% in 1H2017
• Co invest a game changer increases investment capacity significantly • Nordic expansion – Acquisition of Profact in Sweden • Bank Carve-outs – we see several financial institutions preparing
• Bolt-on acquisitions to get access to special competencies in our existing markets
• Strong 1H NPL portfolio pipeline
• New Board elected on January 20th
• New EVP Sales joined in January

Investor Relations in Axactor

Investor Relations Contact: Geir Johansen CFO Email: Geir.johansen@axactor.com Mobil +47 477 10 451

Next event: First quarter results May 31, 2017 For more information see:

www.axactor.com/investor-relations

Bjørn Erik Næss Chairman

Board of Directors Kværner ASA, as well as similar positions at Orkla and Carlsberg

• CFO of DNB ASA since 2008
• Previous experience includes CFO of Aker
• MSc in Economics from the Norwegian School of Economics & Business Administration

Beate Skjerven Nygårdshaug Board Member

• Holds several board positions
• Former experience includes head of legal at Kistefos, and legal counsel at TDC Song • Chairman of Racom AS, and Board member of Triton, Herkules and Morgan Stanley
• Master of Law from the University of Oslo, MBA from IMD, Switzerland

Brita Eilertsen Board Member

Merete Haugli Board Member

• Experience as board member of several companies, including Comrod Communication ASA, Reach Subsea ASA, RC Platou ASA, Norwegian Property ASA, et.al.

• Degree in Finance from BI Norwegian Business School and BI Banking Academy

• Chairman of the Board of NEXT Biometrics, as well as board member at NRC Group ASA, Pareto Bank, Carnegie Kapitalforvaltning, et. al.

• MSc in Economics from the Norwegian School of Economics, in addition to being a Certified Financial Analyst (AFA) Terje Mjøs

Dag W. R. Strømme

Interim Chairman (until 1 March 2017)

• Fortuna Fix Ltd.
• Experience includes various senior positions at
• Bachelor of Science in Business Administration from University of California, Berkeley

Board Member

• Chairman of the Board of Solid Media Group,
• Experience includes being CEO of EVRY ASA
• Cand. Scient. in Computer Science from the University of Oslo, as well as an MBA from BI Norwegian Business School

Michael Hylander Deputy Board Member

• Chairman of the Board of MAQS
• and senior advisor to Apax Partners • 20 years of law experience, mostly within corporate law
• Master of Law from Uppsala University (LL.M.), School of International Relations

as well as a Master's degree from Amsterdam