Dovalue — Interim / Quarterly Report 2020

May 13, 2020

Financial Results to March 31st 2020 May 13th, 2020

1Q 2020 key messages

1 Solid quarter: new mandates, organic performance, cost containment

• ✓ GBV growth to €136bn, new investor portfolio win in Spain for €0.7bn additional GBV
• ✓ Forward flow agreements at 3x year-on-year to €1.3bn
• ✓ +55% Revenue growth and +21% EBITDA ex NRI¹ growth
• ✓ Organic² EBITDA growth in Italy at +26%; Spain NPL stable yoy despite COVID impact

2 COVID response: full operational readiness, growing cash position

• ✓ doValue staff fully operational with remote working seamlessly activated from Day 1
• ✓ Lockdown impacting legal activities, quarterly collections supported by backbook
• ✓ Net Debt at €233m, stable vs YE19, with leverage at 1.4x
• ✓ Growing cash position into April at ca. €170m, with €75m undrawn committed facilities available

3 What's next: FPS closing, finalization of REO project in Italy and Greece, capitalize on the growing servicing opportunity in Southern Europe

• ✓ Acquisition of FPS to close within the May deadline, as expected
• ✓ Servicing pipeline confirmed, doValue pursuing several opportunities to close in Q3/Q4

Notes: 1. Excluding Non Recurring Items (costs linked to Group reorganization process and the acquisition of Altamira Asset Management); 2. Italy 1Q19 EBITDA excluding the ca. €8m one-off indemnity fee related to part of the IntesaSanPaolo portfolio no longer under management

Health and safety of all stakeholders ensured since Day 1

• Crisis committee in place to quickly deploy safety measures
• Currently managing "phase 2", with progressive re-opening of offices when needed and enforcing social distancing

Operational effectiveness ensured, despite lockdown in all markets

• Limited impact on 1Q20 collections despite legal courts, public notaries and land registry closed since March
• doValue working from remote, adjusting credit management strategies

2Q20 to be most impacted, still limited post-lockdown visibility

• Lockdown easing in all markets, public services to resume only progressively
• Key scenario variables: potential new lockdown measures, timing of re-opening of public services and impact of governmental support measures on economy

Market pipeline confirmed, execution to resume in second half of 2020

expiry as market reopens

Macro scenario expected to create opportunities for Credit Servicers

• Recession caused by COVID likely to be more severe and sudden than the Great Financial Crisis of 2008, with unprecedented double-digit GDP contractions in 2Q20
• Italy: based on historic default rate trend, >€60bn of NPEs could be generated
• Spain: analyst estimates at ca. 30% NPE growth, for an additional flow of €60-70bn NPEs
• Greece: double-digit growth of NPEs from current high stock, additional €10-15bn NPE

doValue footprint and low-risk business model position it ideally to take advantage of next NPE wave

Notes: 1: NPL flows of a sample of top Italian banks, sourced from company data and sector reports; 2020E and 2021E illustrative scenario based on trend seen in 2008 financial crisis.

Solid and growing cash position to navigate current environment

• No signs of stress in the working capital cycle, cash-generative nature of doValue business model confirmed
• Liquidity update: positive interaction with lenders leading to increase and extension of Group credit facilities

No liquidity stress even under the most conservative scenarios

1Q20 summary financial highlights

		1Q19	1Q20	∆ (%)
e s u er n e v v ri e d R	GBV EoP	€83.2bn	€134.8	+62%	▪ GBV under management at €136bn including the recently awarded portfolio in Spain
					Positive trend in forward flows, no portfolio sales by ▪
	Gross collections	€403m	€892m	+121%	clients Higher collection rates in markets ex-Italy, due to ▪ shorter collection timing
					▪ Base fees at 37% of revenues
L & e r P u e ct pl u m	Gross revenues	€54.4m	€84.3m	+55%	Benefits of Altamira integration more than offset ▪ the disruption caused by lockdown
	Operating costs ex NRIs1	€35.0m	€54.8m	+57%	▪ Resilient earnings, with +21% EBITDA ex NRI growth despite challenging comparison base (€8m one-off indemnity fees in 1Q19)
	EBITDA ex NRI1	€16.1m	€19.5m	+21%	▪ Significant actions on variable and fixed costs already in place, focused on HR, outsourcing fees and SG&A
str Si					▪ Reported 2020 EBITDA at €18m
	EBITDA ex NRI1 margin	30%	23%	- 7 p.p.	▪ EBITDA margin +6 p.p. if one-off is excluded from 1Q19 (17% vs 23%)
	Net income ex NRI1	€8.3m	€0.1	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)	(€62.1m)	€233.0m	n.m.	▪ About stable trend in leverage over the quarter, from 1.3x to 1.4x Net Debt/EBITDA
	Net Debt/ PF2 EBITDA	n.m.	1.4x	n.m.	▪ Growing liquidity position into April, providing further comfort to the Group's solid balance sheet

Notes: 1: Excluding Non Recurring Items (costs linked to Group reorganization and the acquisition of Altamira Asset Management; 2: LTM Pro Forma EBITDA including the acquisition of Altamira Asset Management.

7

Evolution of gross book value (GBV) under management

• Expansion of GBV driven by on-boarding of Alpha Bank portfolio in Cyprus
• Three-fold growth in inflows from existing clients, linked to forward flow agreements with Santander and Unicredit, a key feature of our business model, increasing our resiliency in the current environment
• New portfolio win in Spain, investor portfolio worth €1.1bn (o/w €0.4bn already managed), to be onboarded in 3Q20
• Collections discount the negative impact of COVID lockdown measures since March (mainly legal courts closures)

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

Fee structure highlights a growing share of base fees

▪ Base fees increasing as a proportion of total revenues at 37%, providing a hedge to current scenario

• Higher exposure to markets ex Italy, with above average base fees, supportive of trend
• Ancillary revenues add to overall revenue resiliency, as Master Servicing and Due Diligence activities not disrupted
• 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 14% to 13%

Focus on operating expenses

1Q20 by geographical market

• Limited impact of COVID on collections, despite lockdown measures impacting all markets
• Seasonally low activity in 1Q, typically accounting for ca. 20% of yearly collections
• Italy EBITDA up strongly in organic terms, compared with 1Q19 EBITDA excluding one-off indemnities at ca. €8m (margin 1Q19 to 17%)
• Resilient NPL trend in Spain with COVID disruption focused on REO sales
• Extraordinary Cost efficiency measures enacted in all markets, supporting resiliency in EBITDA

NWC and net financial position

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

1Q20 net debt trend

• Overall organic reduction in Net Debt despite 1Q being a seasonally slow quarter and initial impact of Coronavirus
• Free cash flow generation at €6m in 1Q20, supported by positive in Net Working Capital
• Financial leverage measured in terms of Net Debt/EBITDA from 1.3x to 1.4x during 1Q20
• Structurally low capex needs and no cash taxes paid

Condensed consolidated income statement 1Q20

(€/1000)	31/03/2020	31/03/2019	Change €	Change %
Servicing Revenues:	75,377	48,457	26,920	56%
o/w: NPL revenues	60,486	48,457	12,029	25%
o/w: REO revenues	14,891	-	14,891	n.s.
Co-investment revenues	141	167	(26)	(16)%
Ancillary and other revenues	8,745	5,731	3,014	53%
Gross revenues	84,263	54,355	29,908	55%
NPL Outsourcing fees	(4,869)	(3,183)	(1,686)	53%
REO Outsourcing fees	(4,152)	-	(4,152)	n.s.
Ancillary Outsourcing fees	(2,197)	(1,012)	(1,185)	117%
Net revenues	73,045	50,160	22,885	46%
Staff expenses	(38,386)	(25,898)	(12,488)	48%
Administrative expenses	(16,444)	(9,089)	(7,355)	81%
Total "o.w. IT"	(5,463)	(3,349)	(2,114)	63%
Total "o.w. Real Estate"	(1,199)	(1,416)	217	(15)%
Total "o.w. SG&A"	(9,782)	(4,324)	(5,458)	126%
Operating expenses	(54,830)	(34,987)	(19,843)	57%
EBITDA	18,215	15,173	3,042	20%
EBITDA margin	22%	28%	(6)%	(23)%
Non-recurring items included in EBITDA⁽¹⁾	(1,283)	(931)	(352)	38%
EBITDA excluding non-recurring items	19,504	16,104	3,400	21%
EBITDA margin excluding non-recurring items	23%	30%	(6)%	(22)%
Net write-downs on property, plant, equipment and
intangibles	(14,994)	(1,646)	(13,348)	n.s.
Net provisions for risks and charges	(1,856)	(266)	(1,590)	n.s.
Net write-downs of loans	50	84	(34)	(40)%
EBIT	1,415	13,345	(11,930)	(89)%
Net income (loss) on financial assets and liabilities
measured at fair value Financial interest and commissions	(385) (2,865)	- (115)	(385) (2,750)	n.s. n.s.
EBT	(1,835)	13,230	(15,065)	(114)%
Income tax for the period	(2,467)	(5,518)	3,051	(55)%
PROFIT (LOSS) FOR THE PERIOD	(4,302)	7,712	(12,014)	n.s.
Profit (loss) for the period attributable to Non
controlling interests	1,327	-	1,327	n.s.
ATTRIBUTABLE PROFIT (LOSS) FOR THE PERIOD	(2,975)	7,712	(10,687)	(139)%
NRIs included in attributable Profit (loss)	(3,260)	(574)	(2,686)	n.s.
Attributable profit (loss) for the period ex NRIs	121	8,286	(8,165)	(99)%
Earnings per share (in Euro)	(0.04)	0.10	(0.1)	(138)%
Earnings per share NRIs(Euro)	0.00	0.11	(0.10)	(99)%

Notes: 1: Non-recurring items in Operating expenses include the costs connected with the acquisition of Altamira Asset Management S.A. and those incurred for the Group reorganisation project

Condensed consolidated balance sheet 1Q20

(€/1000)	03/31/2020	12/31/2019	Change Amount	Change %
Cash and liquid securities	134,279	128,162	6,117	5%
Financial assets	45,889	48,609	(2,720)	(6)%
Property, plant and equipment	25,698	23,904	1,794	8%
Intangible assets	330,718	340,879	(10,161)	(3)%
Tax assets	100,255	98,554	1,701	2%
Trade receivables	161,523	176,991	(15,468)	(9)%
Assets held for sale	10	10	-	n.s.
Other assets	15,729	13,578	2,151	16%
TOTAL ASSETS	814,101	830,687	(16,586)	(2)%
Financial liabilities: due to banks	367,304	364,627	2,677	1%
Other financial liabilities	88,056	92,036	(3,980)	(4)%
Trade payables	39,252	46,969	(7,717)	(16)%
Tax Liabilities	39,888	42,347	(2,459)	(6)%
Employee Termination Benefits	8,122	8,544	(422)	(5)%
Provision for risks and charges	23,349	25,669	(2,320)	(9)%
Other liabilities	23,146	25,196	(2,050)	(8)%
TOTAL LIABILITIES	589,117	605,388	(16,271)	(3)%
Share capital	41,280	41,280	-	n.s.
Reserves	186,863	145,885	40,978	28%
Treasury shares	(184)	(184)	-	n.s.
Profit (loss) for the period attributable to the
Shareholders of the Parent Company	(2,975)	38,318	(41,293)	(108)%
NET EQUITY ATTRIBUTABLE TO THE
SHAREHOLDERS OF THE PARENT COMPANY	224,984	225,299	(315)	(0)%
TOTAL LIABILITIES AND NET EQUITY ATTRIBUTABLE TO THE SHAREHOLDERS OF THE
PARENT COMPANY	814,101	830,687	(16,586)	(2)%

Consolidated cash flow 1Q20

(€/1000)

Key Performance Indicators 1Q20

	(€/1000) KPIs	03/31/2020	03/31/2019
[1]	Gross Book Value (EoP) - Group	134,816,908	137,175,592
[2]	Gross Book Value (EoP) - Italy	77,808,637	81,403,804
[3]	Collections of the period - Italy	329,785	403,045
[4]	LTM Collections - Italy	1,821,907	1,989,776
[5]	LTM Collections - Italy - Stock	1,809,140	1,973,616
[6]	LTM Collections / GBV EoP - Italy - Overall	2.3%	2.4%
[7]	LTM Collections / GBV EoP - Italy - Stock	2.4%	2.5%
[8]	Staff FTE / Totale FTE	35%	38%
[9]	LTM Collections / Servicing FTE - Italy	2.62	2.77
[10]	EBITDA	18,215	15,173
[11]	Non-recurring items (NRIs) included in EBITDA	(1,283)	(931)
[12]	EBITDA excluding non-recurring items	19,498	16,104
[13]	EBITDA Margin	22%	28%
[14]	EBITDA Margin excluding non-recurring items Profit (loss) for the period attributable to the	23%	30%
[15]	shareholders of the parent company Non-recurring items included in Profit (loss) for	(2,975)	7,712
[16]	the period attributable to the Shareholders of the Profit (loss) for the period attributable to the	(3,091)	(574)
[17]	Shareholders of the Parent Company excluding	121	8,286
[18]	Earnings per share (Euro) Earnings per share excluding non-recurring items	(0.04)	0.10
[19]	(Euro)	0.00	0.11
[20]	Capex	6,647	805
[21]	EBITDA - Capex	11,568	14,368
[22]	Net Working Capital	122,274	83,682
[23]	Net Financial Position	(233,025)	62,125
[24]	Leverage (Net Debt / EBITDA LTM PF)	1.4x	n.a.

1) With regard to the indicator [1], in order to enhance the comparability of the figures for 2020, the effects deriving from the acquisition of Altamira were included in the 2019 data as if this had occurred from 1 January 2019

Tax assets

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.

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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