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Investor Presentation • Nov 9, 2018

Informazione Regolamentata n. 1967-42-2018		Data/Ora Ricezione 09 Novembre 2018 14:25:39	MTA
Societa'	:	doBank SpA
Identificativo Informazione Regolamentata	:	110481
Nome utilizzatore	:	DOBANKN02 - Fabio Ruffini
Tipologia	:	REGEM
Data/Ora Ricezione	:	09 Novembre 2018 14:25:39
Data/Ora Inizio Diffusione presunta	:	09 Novembre 2018 14:25:40
Oggetto	:	Financial Results as at September 30, 2018 - presentation
Testo del comunicato

Vedi allegato.

Financial Results to 30 September 2018

November 9, 2018

Summary

	 Gross Collections: €1.33bn vs €1.23bn in 9M17 (+8%), with significant acceleration in Q3
	Gross Revenues: €162m, +11% vs €146m in 9M17, higher fees and ancillary revenues 
Financial	 Net Revenues: €146m, +10% vs €132m in 9M17, stable NPL outsourcing fees as % of revenues
results	 EBITDA: €54m vs €42m in 9M17 (+30%), EBITDA margin up from 29% to 34%
9M18 vs 9M17	Net Income: €35m vs €27m in 9M17 (+29%), including €0.9m (pre-tax) gain from BCC GeCre  45% stake sale to Iccrea
	 Net Cash Position: €38m post dividend payment and second tranche of Italian Recovery Fund investment (€13m); improving NWC and Cash conversion (EBITDA-Capex) at 94%
	Large portfolio wins in a growing Italian NPL servicing market: +€15bn GBV 
	 On-boarding of €12.1bn new mandates: impact of collections fully visible in Q3
	€2.8bn recent awards (BAPR and Iccrea), size and terms in line with expectations 
Main events	 2018-2020 Business Plan providing a mid-term path to revenue growth and margin expansion
YTD	 Re-organization of operating companies approved by Regulator to be completed by YE
	Greek market entry, landmark €1.8bn GBV servicing mandate with four systemic banks 
	 Actively looking at M&A opportunities with focus on Southern Europe and the participation in the Banco BPM process (binging offer phase in November)
	Market outlook: doBank currently taking part in several processes within an active short-term  pipeline, both in Italy NPL, Italy UTP and Greece
	Confirmed 2018 guidance for new portfolio wins in NPL Italy (on top of the €12.1bn  already on-boarded), lower end of guidance already achieved
What's next	 Business Plan execution: development of UTP and Greek servicing businesses, IT investments to deliver significant increase in operational efficiency
	 Focus on cost control and operating leverage while actively exploring M&A opportunities, counting on available leverage up to approx. 3x Net Debt/EBITDA from 2019

1

Active short-term pipeline in Italy in excess of €30bn GBV

• ECB NPL guidelines and Calendar Provisioning combined with IFRS9 introduction and GACS scheme have provided an incentive for banks to continue improving their asset quality
• Future secondary market opportunity following the ~€70bn and >€60bn transactions in 2017 and 2018

SELLER	GBV (€bn)	Details
	Up to 8.0	NPL secured and unsecured
	1.5-2.0	UTP real estate
	2.6	NPL unsecured, project "Merlino"
	1.7	NPL and UTP leasing, project "Morgana"
	1.0	NPL secured, project "Milano"
	1.0	NPL unsecured, project "Torino"
	1.0	NPL securitization (GACS), project "Riviera"
Multi originator	1.0	UTP shipping portfolio
	0.7	NPL leasing portfolio
	0.5	UTP, Project "Isabella"
	0.4	NPL Secured, project "Alpha 2"
Others	1.4	4 portfolios, NPL and UTP, secured and unsecured, €0.5bn single names

Primary transaction pipeline

Secondary transaction pipeline

SELLER	GBV (€bn)	Details
	5.4	NPL secured and unsecured, project "Poppy"
CRC & Bayview	2.0	Mixed NPL, project "Beyond the Clouds"
Others	2.4	5 transactions, secured and unsecured

No signs of slowdown in transaction pipeline, strong investor interest confirmed

Servicing market to offer significant growth potential

		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	€2.8bn new NPL mandates already achieved, 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 continues Ongoing discussion with major  Italian banks on UTP servicing mandates  Currently doing Due Diligence with investors in UTP sales processes
s o 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	 €1.8bn mandate with 4 systemic banks proceeding well, currently in business planning phase, collections to begin in January 2019 Currently doing Due Diligence with  investors in NPE sales processes

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

Resiliency to macro cycles: a long-dated track record

• No indication of possible regulatory changes in Italy affecting our business model
• Track record of meeting KPIs during the previous cycles, managing the effect of macro cycles on collections

Key strategic pillars of doBank business plan

2. Financial Review

Key financial highlights

			9M 2017	9M 2018	∆ (%)
e s u r n e e v	Largest servicing portfolio in the Italian market	GBV EoP	€78.9bn	€83.5bn	+5.9%	 ~€12.1bn new servicing mandates on boarded progressively in 2018 YTD €0.9bn inflows from existing clients 
v ri e d R	Best-in-class collections	Gross collections	€1.23bn	€1.33bn	+8.1%	Strong pick up in Q3 also due to  seasonality of collections, as expected
	Visible revenue base	Gross revenues	€145.7m	€161.9m	+11.1%	 Growth in performance and base fees, in line with collections and higher GBV  Ancillary revenues at >10% of total
L & e	Operating leverage	Operating costs	€90.7m	€91.5m	+0.9%	 Lower costs driven by IT and SG&A efficiencies  Fixed HR costs at 87% of total HR costs
r P u e ct pl u r m st		EBITDA	€41.7m	€54.4m	+30.4%	 Tangible evidence of operating leverage with a 30% expansion of EBITDA and EBITDA margin at 34%
Si	Proven profitability	EBITDA margin	28.6%	33.6%	+5.0 p.p.	EBITDA includes €0.8m start-up costs  (Greece, UTP and Banking)
		Net income	€26.9m	€34.8m	+29.2%	Including €0.9m (pre-tax) gain from  BCC GeCre 45% stake sale to Iccrea
n o h ti a s r	Limited capex	Cash conversion1	€37.9m	€51.1m	+35.0%	 94% cash conversion rate1 Most of IT and other investments  expensed at income statement
a e C n e g	Benefits from tax assets	Tax Assets	€94.0m	€84.3m	(10%)	 Tax assets fully off-settable against direct and indirect taxes

1. EBITDA – Capex

Evolution of gross book value under management

• Strong growth in GBV to €85.3bn driven by new servicing mandates, confirming #1 position in Italian market
• REV, Berenice, MPS and other minor portfolios on-boarded during the period, plus Greek mandate with systemic banks
• €0.9bn inflows from existing clients, in line with expectations; €2.8bn portfolio sales (doBank compensated with indemnity fees)

Portfolio composition: large, diversified, secured, corporate

GBV Composition

Intesa SP 8% 34% REV FINO Other 4% Banks Fortress 3% 20% Other Investors 2% UniCredit 18% Italian Recovery Fund 11%

9M 2018

	Portfolio Profile 9M 2018
19% Unsecured 47% Soft Secured	34% Secured covered by collateral or guarantees

Personal guarantees, real guarantees & other

	Loan Profile 1H 2018
			4Q18
	# of Claims	655k	 Portfolio skewed towards highly
	Loan Size	€127k
~80% collateral	% "Large" Loans (> €500k GBV)	54%	loans, in line with market
or	% Corporate	71%
	% Northern/Central Italy	68%

• Higher client diversification vs IPO time:
• Banks at 29% of GBV (60% at IPO)
• Investors at 71% of GBV (40% at IPO)
• All new GBV from IPO provided by new clients, reinforcing doBank's role as independent servicer
• Intrum/Intesa transaction is expected to impact only a portion of the Intesa portfolio managed. Partial impact in 4Q18
• Portfolio skewed towards highly secured, corporate, mid to large size

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 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
• New contracts related to new on-boarded clients (eg. REV, MPS, etc.)
• Data remediation contracts agreed on non-captive portfolios are already yielding revenue
• Several due diligence ongoing and in the pipeline for 4Q18 (e.g. BAMI process and others)
• Others include Greek branch revenues for €1.5m, which represents cost reimbursement by the local banks

From gross to net revenues

Focus on operating expenses

NWC and net financial position

Condensed consolidated income statement 9M 2018

(€/000)

Condensed consolidated income statement First nine		months	Change
	2018	2017	Amount	%
Serv icing rev enues	144,172	132,112	12,060	9%
o/w Banks	93,007	114,866	(21,859)	(19)%
o/w Investors	51,165	17,246	33,919	n.s.
Co-inv estment rev enues	714	418	296	71%
Ancillary and other rev enues	17,037	13,151	3,886	30%
Gross Revenues	161,923	145,681	16,242	11%
Outsourcing fees	(16,008)	(13,300)	(2,708)	20%
Net revenues	145,915	132,381	13,534	10%
Staff expenses	(68,092)	(58,808)	(9,284)	16%
Administrativ e expenses	(23,430)	(31,871)	8,441	(26)%
o/w IT	(9,323)	(14,047)	4,724	(34)%
o/w Real Estate	(6,169)	(5,836)	(333)	6%
o/w SG&A	(7,938)	(11,988)	4,050	(34)%
Operating expenses	(91,522)	(90,679)	(843)	1%
EBITDA	54,393	41,702	12,691	30%
EBITDA Margin	34%	29%	5%	17%
Impairment/Write-backs plant, equipment and intangible on property, assets	(1,797)	(1,619)	(178)	11%
Net Prov isions for risks and charges	148	(1,189)	1,337	(112)%
Net Write-downs of loans	450	210	240	114%
income (losses) from inv Net estments	917	1,901	(984)	(52)%
EBIT	54,111	41,005	13,106	32%
Net financial interest and commissions	487	(145)	632	n.s.
EBT	54,598	40,860	13,738	34%
for Income tax the year	(19,834)	(13,556)	(6,278)	46%
Profit (loss) from group of assets sold and held for sale net of tax	-	(390)	390	(100)%
Net Profit (Loss) for the period	34,764	26,914	7,850	29%
Earnings per share	0.44	0.34	0.10	29%

Condensed consolidated balance sheet 9M 2018

(€/000)

			Change
Condensed balance sheet	9/30/2018	12/31/2017	€	%
Cash and liquid securities	49,483	50,364	(881)	(2)%
Financial assets	39,245	25,960	13,285	51%
Equity inv estments	-	2,879	(2,879)	(100)%
Tangible assets	2,927	2,772	155	6%
Intangible assets	7,064	6,041	1,023	17%
assets Tax	93,595	103,941	(10,346)	(10)%
Trade receiv ables	98,551	99,337	(786)	(1)%
Assets on disposal	10	10	-	n.s.
Other assets	9,983	6,196	3,787	61%
Total assets	300,858	297,500	3,358	1%
Financial liabilities: due to customers	11,982	11,759	223	2%
Trade payables	15,865	21,072	(5,207)	(25)%
Tax Liabilities	11,523	6,105	5,418	89%
Employee Termination Benefits	10,029	10,360	(331)	(3)%
ision for risks Prov and charges	18,838	26,579	(7,741)	(29)%
Other liabilities	18,089	14,928	3,161	21%
Total Liabilities	86,326	90,803	(4,477)	(5)%
Share capital	41,280	41,280	-	n.s.
Reserv es	138,734	120,700	18,034	15%
Treasury shares	(246)	(277)	31	(11)%
Result for the period	34,764	44,994	(10,230)	(23)%
Total shareholders' equity	214,532	206,697	7,835	4%
liabilities equity Total and shareholders'	300,858	297,500	3,358	1%

Consolidated cash flow 9M 2018

(€/000)
Cash Flow	9/30/2018	9/30/2017
EBITDA	54,393	41,702
Capex	(3,250)	(3,812)
EBITDA-Capex	51,143	37,890
as % of EBITDA	94%	91%
Adjustment for accrual on share-based incentiv e system payments	3,835	1,001
Changes in NWC	(4,421)	(4,302)
Changes in other assets/liabilities	(6,464)	11,770
Operating Cash Flow	44,093	46,359
Tax paid (IRES/IRAP)	(5,582)	(475)
Cash Flow Free	38,511	45,884
(Inv estments)/div estments in financial assets	(11,318)	739
Equity (inv estments)/div estments	2,610	1,694
Div idend paid	(30,907)	(52,330)
Net Cash Flow of the period	(1,104)	(4,013)
Net financial Position - Beginning of period	38,605	29,459
Net financial Position - End of period	37,501	25,446
in Financial Position Change Net	(1,104)	(4,013)

Key Performance Indicators 9M 2018

(€/000)

performance indicators Key	9/30/2018	9/30/2017	12/31/2017
(Eop) - in millions of Gross Book Value Euro -	83,549	78,863	76,703
Collections for the period - in millions of Euro -	1,334	1,234	1,836
Collections for the Last Twelv e Months (LTM) - in millions of Euro -	1,936	1,913	1,836
LTM Collections/GBV (EoP)	2 3%	2 4%	2 4%
Collections (EoP) LTM Stock/GBV Stock	.5% 2	.5% 2	4% 2
Staff FTE/Total FTE	36%	34%	37%
Collections/Serv icing LTM FTE	2,600	2,485	2,510
ratio Cost/Income	63%	68%	64%
EBITDA	54,393	41,702	70,102
EBT	54,598	40,860	68,134
Margin EBITDA	34%	29%	33%
Margin EBT	34%	28%	32%
EBITDA – Capex	51,143	37,890	63,545
Net Working Capital	82,686	83,622	78,265
Net Financial Position of cash/(debt)	37,501	25,446	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.