Dovalue — Earnings Release 2019

Feb 14, 2020

Preliminary Financial Results

Full Year 2019

February 14, 2019

2019 Key Messages

2019 targets achieved - cash generation better than expected

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	AuM		from €82bn to €136bn: doValue						clear #1 in Southern European markets
---	-----	--	-------------------------------	--	--	--	--	--	---------------------------------------	--

• €5.6bn collections with Group collection rate at 4.2%
• +56% Revenue growth and +62% EBITDA growth, sustained by the integration of Altamira Asset management (consolidated as of 3Q19)
• Positive "Constant Perimeter" growth with EBITDA at €140m despite timing of new AuM in NPL and UTP Italy, sustained by positive trends in "Spain & Portugal" and "Greece & Cyprus"
• +32% Net Income ex NRI¹to €69m, DPS proposal confirmed at €0.62/share (72% payout)
• Net Debt at €237m, leverage at 1.3x Net Debt/EBITDA vs guidance at ca. 1.5x

Significant GBV wins in all markets – leadership confirmed 2

>€13bn new mandates, including a €4.3bn stock and flow agreement in Cyprus

• 3 new clients in Italy and 4 portfolios from leading global investors in Spain & Portugal, confirmed as a strong secondary/REO market
• Positive start to 2020: Santander €1.7bn real estate development project in Spain, Master Servicing with new investor client in Italy, significant Due Diligence mandate (NPL portfolio of a troubled Italian banking group), signing €0.5bn UTP mandate in Italy by 1Q20

M&A integration progressing well focus on execution/delivery

• 2019 a landmark year for doValue, transforming its business profile (withdrawal of banking license, international M&A) with long-term benefits to all stakeholders
• Integration of Altamira progressing well, with positive financial results, no attrition in key management and an improvement in employee satisfaction
• Closing of FPS acquisition confirmed by May 2020, anti-trust filing submitted

N otes: 1. Excluding NonRecurring I tems (costs linked to G roup reorganization processand the acquisition of Altamira Asset Management).

doValue transformed profile – larger and more diversified 1

• Significant expansion in all financials and much higher diversification achieved in 3 years
• Growth delivered while expanding profitability (EBITDA margin from 31% to 38%) and improving shareholder returns (DPS from €0.39 in 2017 to €0.62 in 2019) with leverage at 2x (YE2019 PF for the acquisition of FPS)

Rich short-term servicing pipeline in reference markets, in line with business plan expectations 2

€1.7bn Real Estate Project with Santander in Spain

Jan. 2020 new achievements

• €1bn leasing master servicing agreement with new investor client in Italy
• >€9bn GBV due diligence project with new banking client in Italy
• €1bn Special servicing agreement in Greece

Selected s ervicingopportunity in current, s hort-term only pipeline. Source: press/industry reports and doValue analysis.

Altamira integration activities progressing as planned, business performing in-line or above expectations

Area of Integration	Integration Initiatives	Applicable countries	Priority	Execution
	RE asset strategy 			On track, website to be launched
Real Estate	 Auction animation			in 2Q20 with start of auction facilitation and active REOCO
	RE active servicer 			management
	Data services 			Data Factory setup ongoing to facilitate Group analytics
NPE Management	Loan marketplace 			Signed agreement with leading EU marketplace
	 Securitizations			Cairo: 1st GACS in Greece to be closed in 1Q20
	 IT governance	ALL
	Information security 	ALL		Common working teams, analysis finalized in Q410, execution ongoing
IT/Ops	 General procurement
	 IT infrastructure			2-years horizon to execute, working with IBM
	 RPA technologies
HR	New Organizational model 	ALL		Launched in Feb. 2020

Employee satisfaction survey at Altamira show progress in all key indicators in 2019 vs 2018¹post acquisition

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Notes: 1: Altamira employee satisfaction survey findings, 2019 score vs 2018: +14% in "Job Satisfaction", +9% in "Career and Development", +10% in "Management team", +4% in "Brand awareness", +10% in "Diversity and inclusion".

1

Execution of organic Business Plan, focusing on integrating Altamira and exploiting the REO synergy opportunity in Italy and Greece; positive start of the year in terms of business development

2 Continue driving costs lower, with actions involving every key cost item, targeting an EBITDA margin >40% by 2022

3 Monitoring of M&A market with focus on consolidating current footprint

Financial Review

2019 summary financial highlights

		FY181	FY19	∆ (%)
e s u r n e e	GBV EoP	€82.2bn	€131.5bn	+60%	 GBV under management at €136bn including the Alpha Bank contract in C yprus, to be on-boarded by 1Q20 (€139bn in YE 2018 "at constant perimeter"2)
v v ri e d R	Gross collections	€2.0bn	€5.6bn	+185%	 Structurally higher collection rates in markets ex Italy, due to shorter collection timing
	Gross revenues	€233.1m	€363.8m	+56%	 Resilient fees and selective approach to market Increased proportion of base fees 
L e &	Operating costs ex NRIs3	€123.1m	€183.2m	+49%	 Accretive profitability in "Spain and Portugal" and "Greece and C yprus", both above 40% margin
r P u e ct pl u str m	EBITDA ex NRI3	€86.5m	€140.4m	+62%	€12.7m NRI3 recorded in the period, mostly  related to transaction costs for the acquisition of Altamira Asset Management and some of FPS
Si	EBITDA ex NRI3 margin	37%	39%	+2 p.p.	Reported 2019 EBITDA at €128m 
	Net income ex NRI3	€52.3m	€69.1m	+32%	DTA reassessment cost (one off-non cash) of  €10.8m (triggered by de-banking process) HR efficiency NRI for ca. €7m 
n o h ti a s r	Net Financial (€67.9m) €236.5m Position			n.m.	 Significant decrease in leverage over 2019, from 2x to 1.3x Net Debt/EBITDA, supportive of the
a e C n e g	Net Debt/ EBITDA	n.m.	1.3x	n.m.	expected trend of quick deleveraging profile

N otes: 1: Restatedfollowing the application of I FRS 16;

2: T o improve c omparability with2019 results at c onstant perimeter, 2 018 results were combined with Altamira A.M. H2 2018results; 3: E xcluding N on Recurring I tems (costs linked to G roup reorganization and the acquisition of A ltamira A.M.).

Evolution of gross book value (GBV) under management

• Inflows from existing clients mainly referred to Santander, with extraordinary positive result, and Unicredit
• Alpha Bank agreement (€4.3bn stock plus flow agreement), signed in October 2019, to be on-boarded in 1Q20
• New clients GBV includes ICCREA, Carige and UBI in Italy and 4 investors portfolios in Spain
• Sales by clients limited to banks aiming at accelerating asset quality plans (Intesa, Unicredit and Santander)

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

Fee structure highlights a growing share of base fees

• Weight of base fees growing from 17% to 22%, improving revenue resiliency and continue to grow as Altamira contribution is 100% (targeting 25% in 2020)
  • Positive impact of markets ex-Italy, albeit contributing only for H2 results
  • Italy base fees stable at ca. 5 bps on GBV
  • Spain base fees at ca. 13 bps on GBV, due to contract structure
  • Greece and Cyprus base fees at ca. 15 bps on GBV due to early-stage phase of markets
• Lower NPL outsourcing fees, REO outsourcing fees growing in line with development of business

UTP servicing fee structure and profitability

• Higher complexity of cases to be analysed
• Higher upfront/structuring fees
• Lower workload for each asset manager
• Higher cost per asset manager given more skilled/qualified people

	NPL	UTP
Setup-fee/ on-boarding fee	€300-500k	0.2% of purchase price
Management fee	5bps of GBV	1.10% of
Collection fee	8% of collections	purchase price
Success fee	~15% of investor extra return vs original BP	10-20% of recovery beyond initial price over defined triggers
	Average Italian portfolio	Recently negotiated transaction

Key differences vs NPL Illustrative UTP example

GBV	1,000
NBV	50%
Setup fee	1.0
Mgmt fee yr 1	3.2
Mgmt fee yr 2	5.3
Avg. FTE	Lower # of case files/FTE vs NPL
Cost per FTE	Slightly above that of NPL
Total cost	Slightly above that of NPL
EBITDA margin	>40%

Focus on operating expenses

N otes: 1 . E xcluding NonRecurring I tems (costs linked to G roup reorganizationprocess and the acquisition of AltamiraAsset Management).

2019 by market – benefits of diversification already visible

• Exposure to different macro and product cycles yields top-line benefits, with early-stage market supporting Group profitability. Differentiation to be fully visible in 2020 with 12-month impact of Altamira in P&L
• Italy results reflect timing/volume of new portfolios on-boarded in 2019, with selective approach to business development
• Collection rates structurally higher in markets ex-Italy due to lower court timings, irrespective of total recoverable amount. Group collection rate at 4.2%, improving yoy
• Cost efficiency measures enacted in all markets, supporting growth in EBITDA margin

N otes: 1: inc ludes REO sales 2: GBV net of write-offs 13

NWC and net financial position

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2019 cash flow trend

• Very strong free cash flow generation at €100m in FY19, supported by strong earnings and a neutral NWC move
• Financial leverage measured in terms of Net Debt/EBITDA down from 1.8x to 1.3x during H219
• Structurally low capex needs and limited cash taxes
• Closing of Altamira acquisition in 2Q19 with related cash out and dividend payment in May 2019

Condensed consolidated income statement FY19

	FY19	FY18	Cha nge	Cha nge %
Servicing Revenues	325,889	205,538	120,351	59%
of which NPL revenues	268,034	205,538	62,496	30%
of which REO revenues	57,830	-	57,830	n.s.
Co- investment revenues	564	911	(347)	- 38%
Ancillary and other revenues	37,385	26,694	10,691	40%
Gross re ve nue s	3 6 3 ,8 3 8	2 3 3 ,14 3	13 0 ,6 9 5	56%
NPL Outsourcing fees	(19,855)	(18,586)	(1,269)	7 %
REO Outsourcing fees	(12,675)	-	(12,675)	n.s.
Ancillary Outsourcing fees	(7,628)	(4,970)	(2,658)	53%
Ne t re ve nue s	3 2 3 ,6 8 0	2 0 9 ,5 8 7	114 ,0 9 3	54%
Staff expenses	(133,658)	(94,054)	(39,604)	42%
Administrative expenses	(62,256)	(31,764)	(30,492)	96%
Ope ra ting e xpe nse s	(19 5 ,9 14 )	(12 5 ,8 18 )	(7 0 ,0 9 6 )	56%
EBITDA	12 7 ,7 6 6	8 3 ,7 6 9	4 3 ,9 9 7	53%
EBITDA ma rgin	35%	36%	- 1%	- 2 %
Non- recurring items included in EBITDA	(12,676)	(2,712)	(9,964)	n.s.
EBITDA e xc luding non- re c urring ite ms	14 0 ,4 4 2	8 6 ,4 8 1	5 3 ,9 6 1	62%
EBITDA Ma rgin e xc luding non- re c urring ite ms	39%	37%	2 %	4 %
Impairment/Write- backs on property, plant, equipment and intangible assets	(40,388)	(5,536)	(34,852)	n.s.
Net Provisions for risks and charges	(10,335)	(317)	(10,018)	n.s.
Net Write- downs of loans	815	861	(46)	- 5%
Net income (losses) from investments	-	919	(919)	- 100%
EBIT	7 7 ,8 5 8	7 9 ,6 9 6	(1,8 3 8 )	- 2 %
Net income (loss) on financial assets and liabilities measured at fair value	806	418	388	93%
Net financial interest and commissions	(7,459)	(432)	(7,027)	n.s.
EBT	7 1,2 0 5	7 9 ,6 8 2	(8 ,4 7 7 )	- 11%
Income tax for the period	(29,826)	(29,184)	(642)	2 %
Profit (Loss) for the pe riod	4 1,3 7 9	5 0 ,4 9 8	(9 ,119 )	- 18 %
Profit (Loss) attributable to non- controlling interests Ne t Profit (Loss) for the pe riod a ttributa ble to the sha re holde rs	(3,061)	-	(3,061)	n.s.
of the Pa re nt Compa ny	3 8 ,3 18	5 0 ,4 9 8	(12 ,18 0 )	- 2 4 %
Non- recurring items included in Profit (Loss) of the period	(31,135)	(1,784)	(29,351)	n.s.
Non- recurring items included in Net Profit (Loss) attributable to Minorities	(391)		(391)	n.s.
Ne t Profit (Loss) for the pe riod a ttributa ble to the sha re holde rs		-
of the Pa re nt Compa ny e xc luding non- re c urring ite ms	6 9 ,0 6 2	5 2 ,2 8 2	16 ,7 8 0	32%
Net Profit(Loss) attributable to non- controlling interests excluding non
recurring items	3,452	-	3,452	n.s.
Ea rnings pe r sha re (in Euro)	0 .4 8	0 .6 3	(0 .2 )	- 2 4 %
Earnings per share excluding non- recurring items (Euro)	0.86	0.65	0.21	32%

Condensed consolidated balance sheet FY19

(€/'000)

	YE2019	YE2018	Change	Change %
Cash and liquid securities	128,162	74,630	53,532	(26)%
Financial assets	48,609	36,139	12,470	35%
Equity investments	-	-	-	n.m.
Property, plant and equipment	23,904	4,290	19,614	n.m.
Intangible assets	340,879	6,846	334,033	n.m.
Tax assets	98,554	87,355	11,199	13%
Trade receivables	176,991	99,223	77,768	78%
Assets on disposal	10	710	(700)	(99)%
Other assets	13,581	7,839	5,742	73%
TOTAL ASSETS	830,690	317,032	513,658	n.m.
Financial liabilities: due banks to	364,627	-	364,627	n.m.
Other financial liabilities	92,036	294	91,742	n.m.
Trade payables	46,969	21,847	25,122	115%
Liabilities Tax	42,347	11,090	31,257	n.m.
Employee Benefits Termination	8,544	9,577	(1,033)	(11)%
for risks and charges Provision	25,669	20,755	4,914	24%
Liabilities on disposal	-	6,532	(6,532)	(100)%
Other liabilities	25,193	14,152	11,041	78%
TOTAL LIABILITIES	605,385	84,247	521,138	n.m.
Share capital	41,280	41,280	-	n.m.
Reserves	145,885	140,913	4,972	4%
Treasury shares	(184)	(246)	62	(25)%
Result for the period	38,320	50,840	(12,520)	(25)%
SHAREHOLDERS' TOTAL EQUITY	225,301	232,787	(7,486)	(3)%
	830,686	317,034	513,652	n.m.

Consolidated cash flow FY19

	FY19	FY18
EBITDA	127,766	81,293
Capex	(12,787)	(5,408)
EBITDA- Ca pe x	114 ,9 7 9	7 5 ,8 8 5
% di EBITDA	90%	93%
Adjustment for accrual on share- based incentive system payments	5,926	5,814
Changes in Net Working Capital	22,397	889
Changes in other assets/liabilities	(29,190)	(6,454)
Ope ra ting Ca sh Flow	114 ,112	7 6 ,13 4
Taxes paid	(14,539)	(10,480)
Fre e Ca sh Flow	9 9 ,5 7 3	6 5 ,6 5 4
(Investments)/divestments in financial assets	(10,807)	(8,051)
Equity (investments)/divestments	(356,878)	2,610
Dividend paid	(36,264)	(30,907)
Ne t Ca sh Flow of the pe riod	(3 0 4 ,3 7 6 )	2 9 ,3 0 6
Net financial position - Beginning of period	67,911	38,605
Net financial position - End of period	(236,465)	67,911
Cha nge in Ne t Fina nc ia l Position	(3 0 4 ,3 7 6 )	2 9 ,3 0 6

Key Performance Indicators FY19

(€/000) VARIANCE

KPIs	2019	2018
Gross Book Value (EoP) - Group Book Value (EoP) - Italy Gross	131,527,995 78,796,103	138,578,013 82,179,013
Collections - Italy Collections - Italy - Stock	1,893,198 1,794,339	1,961,177 1,768,762
Collections / - Italy - Overall LTM GBV EoP LTM Collections / GBV EoP - Italy - Stock	2.4% 2.5%	2.4% 2.5%
Staff / Total FTE FTE LTM Collections / Servicing FTE - Italy	38% 2.7	37% 2.7
Reported EBITDA Non-recurring items (NRIs) included in EBITDA Ordinary EBITDA	127,766 (12,676) 140,442	83,769 (2,712) 86,481
Reported EBITDA Margin EBITDA Margin wo/NRIs	35.1% 38.6%	35.9% 37.1%
Profit (Loss) attributable the Reported Net to Group Non-recurring items (NRIs) included in Net Income Profit (Loss) attributable the Group Ordinary Net to	38,318 (30,744) 69,062	50,498 (1,784) 52,282
per share (Euro) Earning Earning per share wo/NRIs (Euro)	0.48 0.86	0.63 0.65
Capex EBITDA - Capex	8,086 119,680	5,408 78,361
Working Capital Net Net Financial Position (Net Debt / PF) Leverage EBITDA LTM	130,028 (236,465) 1.3x	77,387 67,911 n.a.

Tax assets

Disclaimer

This presentation and any materials distributed in connection herewith (toge ther, the "Presentation") do not constitute or form a part o f, and should not be construed as, an offer for sale or subscription o f or solicitation o f 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 conne ction with, or act as an inducement to enter into , any contract or commitment whatsoever. The informa tion 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, comple teness, reasonableness or correctness o f 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 o f this document or its contents or otherwise arising in connection with this Presentation. The information contained in this Presentation is provided as a t the date o f 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", "pro ject", "intend", "plan", "believe", and/or other words and terms of similar meaning in connection with, among other things, any discussion o f results o f 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, expe cta tions or belie fs and involve inherent risks, assumptions and uncertainties, including factors that could delay, divert or change any o f 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 o f the plans and events described herein and may result from, among other things, changes in economic, business, compe titive , technological, strategic or regula tory factors and other factors a ffecting the business and operations of the company. Neither doValue S.p.A. nor any of its a ffiliates is under any obligation, and each such entity expressly disclaims any such obliga tion, to update, revise or amend any forward-looking statements, whe ther as a result o f new information, future events or otherwise. You should not place undue reliance on any such forward-looking statements, which speak only as o f the date o f 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 o f full-year results.

Certification of the financial reporting o fficer

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) – tha t the accounting information in this presenta tion 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