Axactor SE — Investor Presentation 2016

Feb 16, 2016

Investor presentation February, 2016

• Introduction
• Market overview
• Axactor strategy
• Financials & Structure
• Q415 & YTD16 Highlights
• Appendix (financial information)

Investment summary

Attractive fundamentals within NPL purchase market	• Large European NPL stock in the banks' balance sheets • Double digit growth in the Non-Performing Loans (NPL) debt sales market in several European countries • Regulatory changes (Basel III, etc.) driving debt divestments in the FI segment
Experienced management team with proven track record	• Unparalleled industry track record, in particular within the target geographical regions • Long lasting relationship with Financial Institutions across Europe • Unique debt portfolio pricing and collection competencies
Immediate presence in Spain through acquisition of high-quality platform	• High quality Spanish debt collection company acquired at attractive valuation • Large and attractive customer base, and unique competence within legal collection • Presence through external network in all judicial districts driving efficient collections • Access to large amount of collection data a clear advantage when pricing portfolios
Solid and flexible financing structure	• Loan agreement for debt financing, EUR 25m with additional EUR 75m accordion with favourable terms Will gradually go from 35% gearing up to target 75%1 • as the company diversifies • Listed on Oslo Stock Exchange with large shareholder base

1: Loan agreement gives a maximum gearing of 65%; Long term target 75% supported by industry standard and banks' intention

3

• Introduction
• Market overview
• Axactor strategy
• Financials & Structure
• Q415 & YTD16 Highlights
• Appendix (financial information)

€ 1trillion Non-Performing Loan (NPL) FI¹ market in Europe

Key trends in the debt purchase/debt collection industry

Portfolio sales – strong growth

• Regulatory changes driving debt sales
• Strengthened FI balance sheets enable portfolio sales
• Asking price approaching street price

Outsourcing trend (carve-outs of collection units)

• Several major carve-outs from European banks
• FI regards debt collection as non-core operations
• Debt collection agencies achieve higher solution rates

Unsecured B2C NPL transactions (EURbn Face Value)

Industry consolidation

• Market maturity and professionalization
• Technology enables increased scale advantages
• Capital constraints – access to capital key success criteria
• Influx of Private Equity players / IPO activity

16.02.2016

1

2

3

European NPL market overview

• The NPL market has counter-cyclical qualities:
• When the economy grows, outstanding loans increase
• When the economy shrinks, the NPL ratio increases
• The banks' NPL balance has been stable around EUR 0.8-1.0 trillion since 2012
• Not including secondary market

Other Ireland UK Italy Germany Spain Estimated In progress

• The market for portfolio transactions has grown considerably in recent years, with the trend continuing strong in 2015
• United Kingdom, Ireland, Spain, Germany and Italy make up most of the volume

Spanish NPL market overview

• NPL ratio trending down from 2013 peak
• Demonstrates strong environment for collecting on NPLs
• The Spanish credit market is returning to growth
• The banks' NPL balances have been stable around EUR 180-200bn since 2012

• Not including loans sold to third parties

• The Spanish debt portfolio transaction market is large and growing

• Major commercial banks leading the trend – smaller commercial banks and savings banks (cajas) now following
• Lower competition for the small-medium portfolios

• Unsecured B2C making up 40-60% of the transaction volume (Axactor primary focus)

• Introduction

• Market overview
• Axactor strategy
• Financials & Structure
• Q415 & YTD16 Highlights
• Appendix (financial information)

Axactor will cover all major parts of the value chain

Axactor to focus on established markets with strong growth

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 through platform and portfolio acquisitions in Germany and Italy
Action	• Acquisition of Spanish debt collection platform completed (ALD Abogados)	• Debt portfolio purchases from Financial Institutions Expand the 3rd • party collection business and increase work force	• Acquire attractive platforms in Germany and Italy • Cost optimisation and synergies through integrating all platforms in one debt collecting group
Economics	• ALD Abogados acquired at attractive valuation	• Collect 2.0x – 3.0x purchase price on purchased debt portfolios	• Seek accretive platforms investments
Timeline	December 2015	2016	2016 - 2018

Creating a high growth debt collection/debt purchase company

Acquisition of a leading legal collection platform in Spain

Description

• Leading Spanish legal debt collection agency established in 2010
• 100 FTEs and 675 external lawyers and solicitors (Dec 2015)
• Management with long industry experience
• Strong customer base
• Compliance and authorizations in place
• Technology and IT platform

• Access to collection data for deal sourcing and pricing

• Introduction

• Market overview
• Axactor strategy
• Financials & Structure
• Q415 & YTD16 Highlights
• Appendix (financial information)

Capacity to acquire significant portfolios

• Introduction
• Market overview
• Axactor strategy
• Financials & Structure
• Q415 & YTD16 Highlights
• Appendix (financial information)

Q415 & YTD16 Highlights

• Discontinued the mining business (NMG)
• Renamed the company to Axactor (AXA)
• Raised NOK 460 million in equity
• Established a financing commitment from DNB at highly competitive terms
• Acquired a leading Legal Collection Platform in Spain (ALD Abogados)
• Recruited experienced Group/Spanish Management Teams with solid track record and strong industry relationships
• Build-up of scalable Amicable Call Center in Valladolid 70 FTEs as starting point
• Several new Third Party Collection (3PC) deals in Spain, including announced strategic contract with Santander Consumer Finance in Spain
• Closing of first substantial Non-Performing Loan portfolio in Spain with Face Value EUR 500 million (acquired for approximately 3% of the outstanding balance)

• Strong portfolio pipeline in Spain, Germany and Italy

• Introduction

• Market overview
• Axactor strategy
• Financials & Structure
• Q415 & YTD16 Highlights
• Appendix (financial information)

Key figures Axactor AB (group)

For remaining operation after sale of the mining activities

SEK thousand	Q4 2015	12 months 2015	Q4 2014	12 months 2014
Sales	4 437	4 437	-	-
Other income	-	-	-	75
Total revenues	4 437	4 437	-	75
EBITDA1	-26 713	-30 592	-2 792	-9 665
Impairment losses and depreciation1	-837	-837	-	-
Net result attributable to shareholders of parent company	-76 670	-166 606	-34 215	-45 986
Investments in period (MSEK)	188.4	188.4	0.9	5.9
Cash at end of period	372 375	372 375	61 502	61 502
Interest-bearing long term debt at end of period	5 500	5 500	9 000	9 000
1 Relates only to remaining operations

Income Statement

Income statement
	Oct - Dec	Oct - Dec	Jan - Dec	Jan - Dec
SEK thousand Continued operations	2015	2014	2015	2014
Net income	4 437	-	4 437	-
Other operating income	-	-	-	75
Total operating income	4 437	0	4 437	75
Other external expenses	-26 061	-3 090	-29 940	-9 927
Personnel expenses	-5 089	298	-5 089	187
Results from equity accounted participations	-	-	-	-
Operating result before depreciation and impairment losses	-26 713	-2 792	-30 592	-9 665
Depreciation/amortization and impairment loss on tangible, intangible and financial fixed assets	-837	-	-837	-
Operating result after impairment losses	-27 550	-2 792	-31 429	-9 665
Financial revenue	249	1 102	329	3 105
Financial expenses	-27 013	-2 287	-30 218	-3 111
Total financial items	-26 764	-1 185	-29 889	-6
Result before tax	-54 314	-3 977	-61 318	-9 671
Income tax	-	-	-	-
Result for the period from remaining operations	-54 314	-3 977	-61 318	-9 671
Loss from discontinued operations	-22 356	-30 239	-105 288	-36 336
Result for the period	-76 670	-34 216	-166 606	-46 007
Result for the period attributable to:
Equity holders of the Parent Company	-76 670	-34 215	-166 606	-45 986
Non-controlling interest	-	-1	-	-21
Result for the period	-76 670	-34 216	-166 606	-46 007

Balance Sheet

	Assets		Equity and liabilities
SEK thousand	31.12.2015	31.12.2014		31.12.2015	31.12.2014
ASSETS			EQUITY
Fixed Assets			Equity attributable to equity holders of the parent company
Intangible fixed assets			Share capital	298 307	45 405
Mineral interests	-	111 676	Other paid-in capital	1 468 788	1 256 648
Customer relationships	37 125	-	Reserves	-96	-
Database	7 530	-	Retained earnings and profit for the period	-1 290 007	-1 141 416
Other intangible assets	448	-	Non-controlling interest	-	157
Goodwill	124 467	-	Total equity	476 992	160 794
Tangible fixed assets
Plant and machinery	549	551	Long-term liabilities
Long-term financial fixed assets			Convertible loan	5 000	5 000
Other long-term investments	267	359	Deferred tax liabilities	11 357	-
Long-term receivables	-	31	Other long-term liabilities	500	4 000
Total fixed assets	170 386	112 617	Total long-term liabilities	16 857	9 000
Current Assets			Current liabilities
Other receivables	61 257	696	Accounts payable	12 420	1 560
Prepaid expenses	787	161	Short-term loans and borrowings	5 542	1 146
Cash and cash equivalents	372 375	61 502	Accrued expenses and prepaid income	92 994	2 475
Total current assets	434 419	62 359	Total current liabilities	110 956	5 181
TOTAL ASSETS	604 805	174 976	TOTAL EQUITY AND LIABILITIES	604 805	174 976
			Pledged assets	4 000	31
			Contingent liabilities	-	-