Dovalue — Earnings Release 2020

Aug 5, 2020

Financial Results to June 30th 2020

August 5th, 2020

1H 2020 key messages

1 Resiliency in earnings and cash position, collections pace picking through July

• ✓ 2Q20 EBITDA about in-line with previous quarter despite being fully impacted by lockdown
• ✓ Collections trend highlights sequential improvement in June and July
• ✓ Growing cash position into June at €193m, with €80m undrawn committed facilities available
• ✓ PF leverage at 2.0x post FPS acquisition; covenant levels (including amendment) provide ample headroom into end of 2021 to face any possible worst case negative COVID-related scenarios

2 GBV growth momentum: €5bn mandates won + €3bn from forward flows

• ✓ GBV growth to €166bn, confirming doValue leadership in loan and real estate servicing
• ✓ +€5bn GBV from 3 new servicing mandates won in Greece, Italy and Spain
• ✓ +€2.8bn GBV from forward flow agreements, above FY20 €2.0bn guidance despite banking moratoria
• ✓ Current macro scenario expected to lead to new NPE generation, providing opportunities

3 Closing of FPS acquisition and issuance of 5Y bond to pre-pay bridge financing

• ✓ Closing of FPS acquisition: +4 years of forward flows (14 year total) and better servicing terms
• ✓ Debut 5Y bond issuance: increased funding diversification and access to debt capital markets
• ✓ doValue rated BB stable outlook by S&P and Fitch, top ratings in the sector

Collections update: 2Q20 confirms base case of COVID-19 impact

• Court activity in Southern Europe still not at full capacity
  • Social distancing and progressive rescheduling of new hearings/auction dates
  • Reopening since mid-May supporting extra judicial activity in Servicing
• Confirmed expectations of return to normal levels of activity towards year-end
• doValue business model equipped to manage current scenario
  • Base fees help cover fixed costs, while variable costs being compressed
  • Forward flow agreements growing above FY20 targets despite banking moratoria
  • High level of security in GBV protects collections, which are postponed, not lost

Recent trends and near-term outlook

New GBV wins: dynamic market YTD, with more to come by year-end

	Achievements YTD		Near-term outlook
GBV €bn
	▪ GACS servicing mandate with ICCREA Banca	+1.6	▪ Several servicing opportunities in pipeline, across asset classes, with tax incentives supporting closing by year-end
	Investor portfolio in Spain ▪ ▪ REO portfolio in Portugal	+0.8	▪ Investor interest confirmed, with deal activity now picking up post pause during lockdown
	▪ ICON mandate in Greece	+2.6	Very active pipeline with progress being made towards ▪ additional wins by year-end ▪ YTD new wins already above FY20 expectations of ca. €1-2bn new mandates
Forward Flows	Ahead of expectations, ▪ especially in Spain and Cyprus	+2.8	Despite impact of banking moratoria, YTD flows already ▪ above FY20 expectations of ca. €2bn Portfolio of forward flow agreements showing its ability to ▪ react to negative macro outlook
Total	▪ Yearly business plan target: ▪ €7-9bn from new clients ▪ €2bn from forward flows	+7.9	▪ 80% of yearly target already achieved, expecting more opportunities to materialize by year-end

YTD trend above expectations despite lockdown slowing down transaction flow

Deteriorating macroeconomic scenario offering source of growth

doValue is best positioned to take advantage of next NPE wave thanks to its unique footprint

^1. IMF elaboration

1. JPMorgan Greek banks, 11 June 2020

^2. PwC: The Italian NPL market. Ready to face the crisis, June 2020

New organizational structure to accelerate integration and synergy realization

• New organization already in place to fully take advantage of increased geographical footprint
• Centralization of business development to create synergies among global NPE/Real Estate investors
• Group-level coordination of operations, corporate functions and transformational projects
• Empowerment of regional leadership to continue driveing results, building on excellent track record

Summary financial highlights

		1H19	1H20	∆ (%)
e s u er n e v v ri e d R	GBV EoP	€80.6bn	€161.8	+100%	GBV more than doubling over the past year as ▪ doValue consolidates #1 position in South Europe
	Gross collections	€886m	€1,690m	+91%	GBV at €166bn including recently awarded Icon ▪ portfolio and Iccrea Banca securitization June and July collections ahead of expectations ▪
	Gross revenues	€112.2m	€164.8m	+47%	Base fees at 39% of revenues, adding to resiliency ▪ Initial benefits from FPS acquisition ▪
L & e r P u e ct pl u str m Si	Operating costs ex NRIs1	€63.5m	€107.5m	+69%	▪ Earnings growth due to international expansion more than offsetting COVID-19 impact
	EBITDA ex NRI1	€39.1m	€35.1m	-10%	▪ Significant actions on variable and fixed costs already in place, focused on HR, outsourcing fees and SG&A ▪ Reported 1H20 EBITDA at €27m
	EBITDA ex NRI1 margin	35%	21%	- 14 p.p.	▪ EBITDA ex NRI up 23% year-on-year if one-off indemnities are excluded from 1H20 and 1H19
	Net income ex NRI	€26.6m	(€6.1m)	n.m.	▪ Net Income impacted by non-cash D&A charges, in line with expectations
n o h ati s er a C n e g	Net Financial Position (cash)	€319.7m	€396.7m	+24%	PF leverage at 2.0x discounting the acquisition of ▪ FPS (now doValue Greece). Covenant amendment process completed providing significant headroom
	Net Debt/ PF2 EBITDA	1.8x	2.0x	+0.2x	Cash position growing to more than €190 million, in ▪ addition to €80 million untapped credit lines

Notes: 1: Non-recurring items include costs connected with the acquisition of Altamira Asset Management S.A., of doValue Greece (formerly Eurobank FPS), those incurred for the Group reorganisation project and costs referred to Covid-19

2: LTM Pro Forma EBITDA including the acquisition of Altamira Asset Management and doValue Greece (formerly Eurobank FPS)

Evolution of gross book value (GBV) under management

• Material growth in GBV driven by organic business development and international expansion via M&A
• Inflows from existing clients (forward flow agreements with Unicredit, Santander, Alpha Bank and Eurobank) already above FY20 expectations, despite banking moratoria in place. Key feature of our business model playing out in line with our expectations
• Recent investor portfolio win in Greece and GACS securitization awarded in Italy would bring total GBV to €166bn
• Collections affected by lockdown of court system since March, improving materially from June into July

GBV details: one of the most diversified portfolios in the industry

Revenue composition: resiliency in base fees and ancillary revenues

▪ Base fees increasing as a proportion of total revenues at 39%, providing a hedge to current scenario

• Higher exposure to Spain, Greece and Cyprus with base fees between ca. 10bps and 15bps (ca. 5bps in Italy)
• Variable fees discount the temporary reduction due to COVID-19 (postponement of collections)
• Outsourcing fees higher in absolute terms due to consolidation of Altamira Asset Management and linked to REO services, but lower as a proportion of pro-forma revenues from 10% to 9%

Focus on operating expenses

11

Financial highlights by geography

• Collections trend improving sequentially from June onwards, as lockdown measures were lifted
• Current trends support base case of progressive return to normalized collections level in Q420
• Italy EBITDA compares with 1H19 EBITDA which included €10m one-off indemnity fees
• Spain and Portugal tracking slightly ahead of expectations, with no significant drop in real estate activity
• Greece and Cyprus region materially accretive to Group margin, due to strong margins embedded in servicing contracts

NWC and net financial position

Notes: 1: LTM Pro Forma EBITDA including the acquisition of Altamira Asset Management.

Net debt trend

• Confirmed highly cash generative nature of business, with positive NWC trend, and limited capex, cash taxes
• Growth in Net Debt due to acquisition of doValue Greece, closed on June 5th 2020 but reduction of AAM bank facility due to amortization repayments
• Free cash flow generation at €65m in 1H20, supported by positive trend in Net Working Capital
• PF financial leverage measured in terms of Net Debt/EBITDA from 1.3x to 2.0x during 1H20

Condensed consolidated income statement

	06/30/2020	06/30/2019	Change €	Change %
Servicing Revenues:	147,102	98,149	48,953	50%
o/w: NPL revenues	119,918	98,149	21,769	22%
o/w: REO revenues	27,184	-	27,184	n.s.
Co-investment revenues	263	327	(64)	(20)%
Ancillary and other revenues	17,411	13,679	3,732	27%
Gross revenues	164,776	112,155	52,621	47%
NPL Outsourcing fees	(9,705)	(7,091)	(2,614)	37%
REO Outsourcing fees	(6,565)	-	(6,565)	n.s.
Ancillary Outsourcing fees	(5,895)	(2,473)	(3,422)	138%
Net revenues	142,611	102,591	40,020	39%
Staff expenses	(78,225)	(48,727)	(29,498)	61%
Administrative expenses	(37,473)	(25,013)	(12,460)	50%
Total "o.w. IT"	(11,461)	(6,597)	(4,864)	74%
Total "o.w. Real Estate"	(2,397)	(2,341)	(56)	2 %
Total "o.w. SG&A"	(23,615)	(16,075)	(7,540)	47%
Operating expenses	(115,698)	(73,740)	(41,958)	57%
EBITDA	26,913	28,851	(1,938)	(7)%
EBITDA margin	16%	26%	(9)%	(37)%
Non-recurring items included in EBITDA⁽¹⁾	(8,200)	(10,208)	2,008	(20)%
EBITDA excluding non-recurring items	35,113	39,059	(3,946)	(10)%
EBITDA margin excluding non-recurring items	21%	35%	(14)%	(39)%
Net write-downs on property, plant, equipment and intangibles	(32,210)	(3,331)	(28,879)	n.s.
Net provisions for risks and charges	(3,929)	(3,002)	(927)	31%
Net write-downs of loans	5 3	405	(352)	(87)%
EBIT	(9,173)	22,923	(32,096)	(140)%
Net income (loss) on financial assets and liabilities measured at fair value	(418)	669	(1,087)	n.s.
Financial interest and commissions	(6,591)	(1,311)	(5,280)	n.s.
EBT	(16,182)	22,281	(38,463)	n.s.
Non-recurring items included in EBT⁽²⁾
EBT excluding non-recurring items	(12,365)	(12,640)	275	(2)%
Income tax for the period	(3,817) (2,622)	34,921 (18,254)	(38,738) 15,632	(111)% (86)%
PROFIT (LOSS) FOR THE PERIOD	(18,804)	4,027	(22,831)	n.s.
Profit (loss) for the period attributable to Non-controlling interests	2,395	-	2,395	n.s.
PROFIT (LOSS) FOR THE PERIOD ATTRIBUTABLE TO THE
SHAREHOLDERS OF THE PARENT COMPANY	(16,409)	4,027	(20,436)	n.s.
Non-recurring items included in Profit (loss) for the period	(10,600)	(22,584)	11,984	(53)%
Profit (loss) for the period attributable to the Shareholders of the Parent
Company excluding non-recurring items	(6,096)	26,611	(32,707)	(123)%
Profit (loss) for the period attributable to Non-controlling interests excluding
non-recurring items	(2,108)	-	(2,108)	n.s.
Earnings per share (in Euro)	(0.21)	0.05	(0.3)	n.s.
Earnings per share excluding non-recurring items (Euro)	(0.08)	0.33	(0.41)	(123)%

Notes:

1: Non-recurring items in Operating expenses include the costs connected with the acquisition of Altamira Asset Management S.A., of doValue Greece (ex Eurobank Financial Planning Services), those incurred for the Group reorganisation project and costs referred to Covid-19

2: Non-recurring items included below EBITDA refer to (i) termination incentive plans that have therefore been reclassified from personnel expenses, (ii) income taxes and (iii) fair value delta of the Put-Option and Earn-out

Condensed consolidated balance sheet

€/'000

	0 6 /3 0 /2 0 2 0	12 /3 1/2 0 19 RESTATED	Cha nge Amount	Cha nge
Cash and liquid securities	193,027	128,162	64,865
(€/1000) Financial assets	56,211	48,609	7,602
Property, plant and equipment	32,340	23,904	8,436
Intangible assets	267,907	289,585	(21,678)
Tax assets	111,834	98,554	13,280
Trade receivables	150,423	176,991	(26,568)
Assets held for sale	1,597	10	1,587
Consolidation differences to be allocated	225,774	-	225,774
Other assets	22,639	14,378	8,261
TOTAL ASSETS	1,0 6 1,7 5 2	7 8 0 ,19 3	2 8 1,5 5 9
Financial liabilities: due to banks	589,710	364,627	225,083
Other financial liabilities	87,757	69,642	18,115
Trade payables	48,274	46,969	1,305
Tax Liabilities	41,816	32,806	9,010
Employee Termination Benefits	10,651	8,544	2,107
Provision for risks and charges	18,504	25,669	(7,165)
Liabilities held for sale	1,463	-	1,463
Other liabilities	68,789	25,196	43,593
TOTAL LIABILITIES	8 6 6 ,9 6 4	5 7 3 ,4 5 3	2 9 3 ,5 11
Share capital	41,280	41,280	-
Reserves	168,656	127,041	41,615
Treasury shares Profit (loss) for the period attributable to the Shareholders of	(146)	(184)	3 8
the Parent Company	(16,409)	38,603	(55,012)	(143)%
NET EQUITY ATTRIBUTABLE TO THE
SHAREHOLDERS OF THE PARENT COMPANY	19 3 ,3 8 1	2 0 6 ,7 4 0	(13 ,3 5 9 )
TOTAL LIABILITIES AND NET EQUITY ATTRIBUTABLE TO THE SHAREHOLDERS OF THE
PARENT COMPANY	1,0 6 0 ,3 4 5	7 8 0 ,19 3	2 8 0 ,15 2
NET EQUITY ATTRIBUTABLE TO NON- CONTROLLING
INTERESTS	1,407	-	1,407
TOTAL LIABILITIES AND NET EQUITY	1,0 6 1,7 5 2	7 8 0 ,19 3	2 8 1,5 5 9

Consolidated cash flow

(€/1000)

	06/30/2020	06/30/2019
EBITDA	26,913	28,851
Capex	(9,340)	(1,271)
EBITDA-Capex	17,573	27,580
as % of EBITDA	65%	96%
Adjustment for accrual on share-based incentive system payments	982	2,440
Changes in NWC (Net Working Capital)	36,629	(2,696)
Changes in other assets/liabilities	14,770	(6,475)
Operating Cash Flow	69,954	20,849
Tax paid (IRES/IRAP)	(5,120)	-
Free Cash Flow	64,834	20,849
(Investments)/divestments in financial assets	(16,320)	(11,240)
Equity (investments)/divestments	(206,857)	(360,998)
Dividend paid	(1,875)	(36,263)
Net Cash Flow of the period	(160,218)	(387,652)
Net financial Position - Beginning of period	(236,465)	67,911
Net financial Position - End of period	(396,683)	(319,742)
Change in Net Financial Position	(160,218)	(387,653)

Key Performance Indicators

KIPs

	(€/1000)
	KPIs	06/30/2020	06/30/2019	12/31/2019 RESTATED
	[1] Gross Book Value (EoP) - Group (1)	161,814,647	161,188,436	157,600,134
	[2] Gross Book Value (EoP) - Italy	77,511,909	80,621,821	78,796,103
	[4] Collections of the period - Italy	613,754	885,608	1,893,198
	[6] LTM Collections - Italy	1,623,313	1,963,013	1,893,198
	[7] LTM Collections - Italy - Stock	1,593,407	1,922,753	1,794,339
	[8] LTM Collections / GBV EoP - Italy - Overall	2.1%	2.4%	2.4%
	[9] LTM Collections / GBV EoP - Italy - Stock	2.1%	2.5%	2.5%
	[10] Staff FTE / Totale FTE Group	38%	36%	38%
	[12] LTM Collections / Servicing FTE - Italy	2.3	2.7	2.6
	[13] EBITDA	26,913	28,851	127,766
	[14] Non-recurring items (NRIs) included in EBITDA	(8,200)	(10,208)	(12,676)
	[15] EBITDA excluding non-recurring items	35,113	39,059	140,442
	[16] EBITDA Margin	16%	26%	35%
	[17] EBITDA Margin excluding non-recurring items	21%	35%	39%
[18]	Profit (loss) for the period attributable to the shareholders of the parent company	(16,409)	4,027	38,318
[19]	Non-recurring items included in Profit (loss) for the period attributable to the Shareholders of the Parent Company	(10,313)	(22,584)	(31,135)
[20]	Profit (loss) for the period attributable to the Shareholders of the Parent Company excluding non-recurring items	(6,096)	26,611	69,062
	[21] Earnings per share (Euro)	(0.21)	0.05	0.48
	[22] Earnings per share excluding non-recurring items (Euro)	(0.08)	0.33	0.86
	[23] Capex	9,340	1,271	8,086
	[24] EBITDA - Capex	17,573	27,580	119,680
	[25] Net Working Capital	102,149	158,512	130,022
	[26] Net Financial Position	(396,683)	(319,742)	(236,465)
	[27] Leverage (Net Debt / EBITDA LTM PF)	2.0x	1,8x	1.3x

(1) In order to enhance the comparability of Gross Book Value (GBV) as of:

• 06/30/2019 the values for Altamira Asset Management and doValue Greece have been included at the reference date

• 12/31/2019 the values for doValue Greece have been included at the reference date

Tax assets

20

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