Dovalue — Earnings Release 2018

Aug 8, 2018

Financial Results to 30 June 2018

August 8, 2018

Summary

Financial results 1H18 vs 1H17	 Gross Collections: €882m vs €888m in 1H17 (-1%): 2018 GBV wins still in ramp-up phase  Gross Revenues: €105m, stable vs €105m in 1H17, growing average performance and base fees  Net Revenues: €94m, stable vs €94m in 1H17  EBITDA: €34m vs €30m in 1H17 (+13%), EBITDA margin up from 29% to 32%  Net Income: €21m vs €20m in 1H17 (+7%)  Net Cash Position: €30m post dividend payment and second tranche of Italian Recovery Fund investment (€13m); improving NWC and Cash conversion (EBITDA-Capex) at 94.5%
Main events YTD	On-boarding of €12.1bn new mandates in Special Servicing: set-up completed, portfolios  currently in ramp-up phase, full impact of collections not yet reflected in P&L  2018-2020 Business Plan envisaging material changes to Group structure to be completed by beginning 2019, unlocking full M&A potential and laying out a mid-term path of significant revenue growth and margin expansion  Landmark €1.8bn GBV servicing mandate signed with four Greek systemic banks  Progress in the BancoBPM process with access to binding offer phase  Dividend payment of €30.9m on 23 May (€0.394/per share) with industry-leading yield
What's next	 Market outlook: active short-term pipeline, material progress on €3bn GBV NPL mandates out of €3-5 bn 2018 pipeline in Italy. doBank UTP offering gaining traction among major Italian banks Focus on Business Plan execution: development of UTP and Greek servicing businesses, IT  investments to deliver significant increase in operational efficiency Continued focus on cost control and operating leverage while actively exploring M&A  opportunities counting on available leverage up to approximately 3x Net Debt/EBITDA from 2019

Berenice REV and MPS

Currently in early rampup phase

2018-2020 Business Plan

Transformational new Group structure

doBank in 2020 a larger, more diversified and more profitable company

First Greek Servicing Mandate

Most important servicing mandate signed in Greece to date

Competitive award process confirming capabilities of doBank vis-à-vis Italian and International peers

UTP project

In set-up phase, advanced contacts with potential clients

Execution on core business and meaningful progress towards Business Plan targets

Landmark portfolio win from 4 Greek systemic banks for €1.8bn

• Alpha Bank, National Bank of Greece, Eurobank and Piraeus Bank selected doBank, among >30 international servicers, to manage a portfolio of common NPEs, marking a pioneering systemic collaboration
• First international servicing mandate for the Group, local branch operational since April with >25 staff
• Relevance beyond current GBV size due to systemic nature of agreement and complexity of loan management
• On-boarding operations to start in August with business planning phase completed in autumn
• doBank to create the most complete database on the portfolio in the market due to information from 4 banks
• Current fee model structured as a cost coverage mechanism during set-up phase, limiting potential downside risk

Key features of agreement			Implications for doBank
Portfolio Size	 	€1.8bn Gross Book Value >300 debtors, €6m avg. size	 	Current GBV only a fraction of total common exposures Low number of debtors and high ticket size to shorten startup timing and simplify business planning
Debtor type and security	  	100% corporate SME Highly secured Mix of UTP and NPL	 	Debtor type and portfolio security in line with doBank's current focus, limiting execution risk Individual business planning to maximize recovery rates drawing on doBank local team's extensive experience
Uniqueness of Common exposures	 	Debtors exposed to at least two of four banks Key servicer role to reduce collateral asymmetry and servicing cost		High value-added role of servicer, significant delegation levels to coordinate negotiations and legal actions

Unparalleled opportunity for a low-risk and high potential market entry

Promising short-term pipeline across markets and asset classes

		Market potential	Recent updates
s s e n si u b e r o C	Bad loans servicing Italy	 Servicing market at ca.240bn in M/T  Regulatory framework still supportive, lots of work to do for banks: Total new inflows (including portfolio sales):  €84bn in 2018E, €20bn in 2019E, and €13bn in 2020E  Growing outsourcing levels  Following jumbo deals, market focused on mid-sized GACS transactions and platform sales with long-term flow agreements	Material progress on €3bn NPL mandates, reinforcing conviction on 2018 GBV target of up to €5bn (in addition to the new mandates already secured in YTD 2018)
s u s	UTP servicing Italy	 UTP exposures expected to become the next area of focus for banks' asset quality  Servicing market at €18bn in 2018E, expected at >€25bn in M/T	 Strengthening of UTP team capabilities doBank UTP offering gaining  traction among major Italian banks
o s e u n g si ti n u o b C	UTP and bad loans servicing Greece	 Early stage market with significant growth potential and no incumbent  €40bn NPL reduction by 2019 target by BoG/SSN out of more than €90bn total NPL	 First contract with 4 systemic banks signed  Active business development with banks and investors

Confirmed focus on core Italian Bad Loans market while adding new sources of growth by products and countries

Key strategic pillars of doBank business plan

2. Financial Review

Key financial highlights

			H1 2017	H1 2018	∆ (%)
e s u r n e e	Largest servicing portfolio in the Italian market	GBV EoP	€79.5bn	€86.8bn	+9.2%	 ~€12.1bn new servicing mandates on boarded progressively in the semester  €0.7bn inflows from existing clients
v v ri e d R	Best-in-class collections	Gross collections	€0.89bn	€0.88bn	-0.7%	Collections in line with different bonus  timing in 2018 vs 2017  New mandates not yet fully reflected
	Visible revenue base	Gross revenues	€105.1m	€105.3m	+0.2%	Growth in base fees, ancillary and other  revenues, lower indemnity fees  Improving average performance fee
L & e r P u e ct pl u r m	Operating leverage	Operating costs	€64.2m	€60.3m	-6.2%	Lower costs driven by IT and SG&A  efficiencies  Fixed HR costs at 85% of total HR costs
		EBITDA	€30.3m	€34.1m	+12.6%	Operating leverage driving a 2-digit 
st Si	Proven profitability	EBITDA margin	28.8%	32.4%	+3 p.p.	growth in EBITDA
		Net income	€19.7m	€21.0m	+7%	 Net Income growth dented by higher non-cash tax provisions (DTA fees not present in 2017)
n o h ti a s	Limited capex	Cash conversion1	€28.1m	€32.5m +15.3%		95% cash conversion rate1  Most of IT and other investments  expensed at income statement
r a e C n e g	Benefits from tax assets	Tax Assets2	€94.2m	€87.5m	(7%)	 Tax assets fully off-settable against direct and indirect taxes

1. EBITDA – Capex

Evolution of gross book value under management

• Significant growth in GBV to €86.8bn driven by new servicing mandates
• REV, Berenice and MPS portfolios progressively on-boarded during the period, plus additional minor portfolios
• €0.7bn inflows from existing clients, in line with expectations. Lower portfolio sales (€1.9bn in H1 2017)

Portfolio diversification

guarantees & other

Seasonality of collections across quarters

1. Collections for 2015 based on Italfondiario only. Italfondiario collections for 2015-16 are accounted for as net cash flow consistent with their historical reporting 3. 2017 and 2018collections are accounted for as gross collections

2. Stock GBV excludes new servicing mandates on-boarded progressively in H1 2018, not yet fully reflected in collections of the period

Ancillary and other revenues

• Ancillary and other revenues above 10% of Group total which was IPO target for 2019YE
• Contract with FINO started with full effect on IBIS, doReal Estate and Judicial Management
• Contract with UCI on legal services now fully operational
• New contracts related to new on-boarded clients (eg. REV, MPS, etc.)
• 2 data remediation contracts agreed on non-captive portfolios recently closed
• Ongoing due diligence activity on new GACS

From gross to net revenues

Q2 2017

% of Gross revenues

Fees

Revenues

Other

Ancillary & Other Servicing

revenues

12

Focus on operating expenses

NWC and net financial position

Condensed consolidated income statement H1 2018

Condensed consolidated income statement		First Semester	Change
	2018	2017	Amount	%
Serv icing rev enues	94,641	95,816	(1,175)	(1)%
o/w Banks	61,767	89,242	(27,475)	(31)%
o/w Investors	32,874	6,574	26,300	n.s.
Co-inv estment rev enues	475	159	316	n.s.
Ancillary and other rev enues	10,158	9,134	1,024	11%
Gross Revenues	105,274	105,109	165	0%
Outsourcing fees	(10,879)	(10,563)	(316)	3%
Net revenues	94,395	94,546	(151)	(0)%
Staff expenses	(45,070)	(40,543)	(4,527)	11%
Administrativ e expenses	(15,192)	(23,683)	8,491	(36)%
o/w IT	(6,324)	(12,419)	6,095	(49)%
o/w Real Estate	(4,157)	(4,047)	(110)	3%
o/w SG&A	(4,711)	(7,217)	2,506	(35)%
Operating expenses	(60,262)	(64,226)	3,964	(6)%
EBITDA	34,133	30,320	3,813	13%
EBITDA Margin	32%	29%	4%	12%
Impairment/Write-backs on property, plant, equipment and intangible assets	(1,188)	(837)	(351)	42%
Net Prov isions for risks and charges	(80)	(1,179)	1,099	(93)%
Net Write-downs of loans	388	221	167	76%
Net income (losses) from inv estments	340	1,494	(1,154)	(77)%
EBIT	33,593	30,019	3,574	12%
Net financial interest and commissions	536	(68)	604	n.s.
EBT	34,129	29,951	4,178	14%
Income tax for the year	(13,084)	(9,903)	(3,181)	32%
Profit (loss) from group of assets sold and held for sale net of tax	-	(390)	390	(100)%
Net Profit (Loss) for the period	21,045	19,658	1,387	7%
Minorities	-	-	-	n.s.
Net Profit (Loss) attributable to the Group before PPA	21,045	19,658	1,387	7%
Economic effects of "Purchase Price Allocation"	-	-	-	n.s.
Goodwill impairment	-	-	-	n.s.
Net Profit (Loss) attributable to the Group	21,045	19,658	1,387	7%
Earnings per share	0.27	0.25	0.02	7%

Consolidated balance sheet H1 2018

Main consolidated balance sheet items	30/06/2018	31/12/2017	Change
			€	%
Financial assets	80,855	76,303	4,552	6%
at fair v alue through profit or loss	36,586	22,998	13,588	59%
at fair v alue through comprehensiv e income	1,000	1,003	(3)	(0)%
at amortised cost - loans and receiv ables with banks	40,744	49,449	(8,705)	(18)%
at amortised cost - loans and receiv ables with customers	2,525	2,853	(328)	(11)%
Tax assets	87,504	94,187	(6,683)	(7)%
Other assets	121,120	127,010	(5,890)	(5)%
Total assets	289,479	297,500	(8,021)	(3)%
Financial liabilities	12,226	12,106	120	1%
at amortised cost - due to banks	-	-	-	n.s.
at amortised cost - due to customers	12,226	12,106	120	1%
Employee Termination Benefits and Prov ision for risks and charges	30,803	36,939	(6,136)	(17)%
Other liabilities	46,734	41,758	4,976	12%
Shareholders' equity	199,716	206,697	(6,981)	(3)%
Total liabilities and shareholders' equity	289,479	297,500	(8,021)	(3)%

Consolidated cash flow H1 2018

Cash Flow	6/30/2018	3/31/2017
EBITDA	34,133	30,320
Capex	(1,638)	(2,146)
EBITDA-Capex	32,495	28,174
as % of EBITDA	95%	93%
Adjustment for accrual on share-based incentiv e system payments	2,763	-
Changes in NWC	1,704	(27,716)
Changes in other assets/liabilities	(2,995)	12,877
Operating Cash Flow	33,967	13,335
Tax paid (IRES/IRAP)	-	(475)
Free Cash Flow	33,967	12,860
(Inv estments)/div estments in financial assets	(11,966)	1,903
Div idend paid	(30,908)	(52,330)
Net Cash Flow of the period	(8,907)	(37,567)
	-	-
Net financial Position - Beginning of period	38,605	29,459
Net financial Position - End of period	29,698	(8,108)
Change in Net Financial Position	(8,907)	(37,567)

Key Performance Indicators H1 2018

Key performance indicators	6/30/2018	6/30/2017	12/31/2017
Gross Book Value (Eop) - in millions of Euro -	86,819	79,522	76,703
Collections for the period - in millions of Euro -	882	888	1,836
Collections for the Last Twelv e Months (LTM) - in millions of Euro -	1,830	1,978	1,836
LTM Collections/GBV (EoP)	2.1%	2.5%	2.4%
LTM Collections Stock/GBV Stock (EoP)	2.4%	2.5%	2.4%
Staff FTE/Total FTE	37%	33%	37%
Collections/Serv icing LTM FTE	2,479	2,542	2,509
Cost/Income ratio	64%	68%	64%
EBITDA	34,133	30,320	70,102
EBT	34,129	29,951	68,134
Margin EBITDA	32%	29%	33%
Margin EBT	32%	28%	32%
EBITDA – Capex	32,495	28,174	63,545
Net Working Capital	76,561	107,036	78,265
Net Financial Position of cash/(debt)	29,698	(8,108)	38,605

Regulatory capital

Excess capital to support business growth through M&A and investments as well as to remunerate investors

Tax assets

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 doBank 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.

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Certification of the financial reporting officer

Mauro Goatin, in his 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 press release is consistent with the data in the accounting documentation, books and other accounting records.