Dovalue — Investor Presentation 2020

Mar 31, 2021

Full year 2020 Financial Results

March 31st, 2021

Full year 2020 key messages

1 €13bn new AuM, exceeding pre-Covid targets with a positive FY20 momentum

• ✓ +€8.6n GBV from new servicing mandates on the high end of the €7-9bn target in addition to €3.2GBV to be onboarded
• ✓ + €4.4bn GBV from forward flow agreements, above €2.0bn guidance despite moratoria
• ✓ EBITDA ex NRI at €125.3m with continued sequential growth from €41m in 3Q to €49m in 4Q
• ✓ Higher base fees (36% vs. 22% of total revenues) have provided a cushion for temporary volatility of collections
• ✓ Re-opening of economies and new GBV added in 2020 will sustain collections and EBITDA growth in 2021

2

Strong cash flow generation and return to dividend distribution in 2021

• ✓ Operating cash flow generation at €120m with >100% cash conversion rate on reported EBITDA
• ✓ Net financial debt at €389m as of February 2021 and 2.7x PF leverage at the end of 2020
• ✓ Further deleverage in 2021 and EBITDA growth will provide headroom for both dividend distribution and M&A
• ✓ The BoD will propose a dividend payout of 100% of Net Income ex NRI (well above minimum dividend policy)
• ✓ M&A focus on in-market consolidation and business diversification across fintech, big data and proptech sectors

3 Integration of acquisitions and operational efficienties projects on track

• ✓ Fully integrated Altamira and on-track for integration of doValue Greece
• ✓ Completed deployment of RE platform in Greece and Italy
• ✓ Continuous cost reduction initiatives and unification of in-countries IT platforms

Operating Cash flow: €120m

GBV:

€161bn

Cost savings: €20m (2020)

New servicing mandates: better than pre-COVID target

▪ Better than expected trend in Spain and Cyprus, chiefly due to flows from Santander

Forward Flows

• Slower trend in Italy, where bank moratoria have been more stringent
• Cautious expectations in 1H21, due to moratoria extension until June in most countries, with pick-up foreseen more in 2H21

New Servicing mandates

• Very strong performance of Italy, with repeat business from ICCREA and Unicredit, testifying our track record and significant innovation capabilities with a Leasing GACS and a multi-bank corporate UTP portfolio
• Hellenic Region also better than expected due to synergetic relationship with Bain Capital Credit yielding results

Strong FY2020 financial results despite Covid

• Base fees at 36% of revenues, underpinning the defensive features of doValue's business model
• Benefits of Altamira and doValue Greece integration more than offset the disruption caused by lockdown

• Impact on profitability limited by quick reduction in variable costs
• Significant actions on all fixed cost items, focused on HR, IT, SG&A

▪ Reduction of Net Income ex NRI impacted mainly by non-cash D&A component and financial charges related to acquisitions

Resilient business model providing strong financial results with limited and temporary impact from COVID-19

Notes: (1) Assumes doValue Greece consolidated from June 2020 (2) Assumes doValue Greece consolidated for 12 months of 2020

Strong cash flow supporting dividend and M&A

• Strong cash position of +130m increased to €157m as of Feb 21
• Undrawn RCF for up to €80m
• Access to debt capital market with a NC2 2025 bond issued in 2020
• Leverage ratio expected to increase slightly in 1Q21 mainly due to LTM EBITDA and trending down afterwards

• €394m of operating cash flow generated over the last 4 years with €127m¹ of capital returned to shareholder mainly by dividend distributions
• Current dividend policy allows for minimum 65% payout out of Net Income ex NRI however decision not to pay dividends of c.€50m in 2020 (on 2019 earnings) to preserve a strong financial profile and liquidity
• doValue continues monitoring the market environment for potential opportunities both in existing markets and via diversification in higher growth potential contiguous sectors such as fintech, big data and proptech
• Commitment to keep leverage target within 3.0x Net Debt /EBITDA

BoD will propose a dividend distribution of €20.8m or 100% payout out of Net Income ex NRI to be paid in August 2021

Notes: 1: including €1.9m of dividend distributed during 2020 to Banco Santander, as minority shareholder of Altamira Spain and not including a dividend of €21 million which will be proposed to the next shareholders' meeting

Integration and operational efficiencies

2020-2022 Business plan operating objectives

• 1. Centralized purchasing where achievable within the Group
• 1. Continue local footprint rationalization
• 1. Work from home to be extended to larger portion of employees
• 1. Complete migration of servicing platforms in Italy
• 1. Exploit outsourcing opportunities (especially IT)
• 1. Rationalize IT infrastructure
• 1. Increase HR efficiency in the Group
• 1. Project completed. New Group-wide procedure in place
• 1. Progresses in line with plan (locations Italy from 20 in 2018 to 7 in 2021)
• 1. Project completed reaching higher proportion than initially planned (acceleration as response to COVID)
• 1. Project completed, 1 single platform for Italy
• 1. Project completed (IBM partnership)
• 1. Italian rationalization to be finished in 1H21. Across-country IT efficiencies project set-up complete, execution in 2021-2022
• 1. Progress in line with plan, HR efficiency programs continue across the Group with early retirement incentives

Focus on real estate costs

Status update ▪ Number of office locations is reduced and lease re-negotiation has taken place (in Italy from 20 in 2018 to 7 in 2021)

Saving* up to €1 million

Focus on IT

• Integrate the IT and potentially back office functions of the Group
• Establish a Corporate framework of cooperation
• Reduce the level of complexity at Group level

Plan defined. Execution in 2021-2022

Focus on HR

• Strong reduction of variable compensation (7% of total HR cost in 2020)
• Positive fixed cost impact from IBM partnership (transfer of back-office personnel and reduction of IT opex)

Commitment to continue optimizing every cost line to grow EBITDA margin

Our Response to COVID-19

Overall COVID-19 has caused a delay in collections of 2020 (i.e no loss of revenues) and a potential increase in GBV

FY20 summary financial highlights

		FY19A	FY20A	∆ (%)
e s u er n e v v ri e d R	GBV EoP	€131.5bn	€157.7bn	+20%	▪ Growth in GBV underpinned by strong intake of new mandates and limited portfolio sales by clients
	Gross Collections/Sales	€3.9bn	€4.3bn	+10%	▪ Positive trend in forward flows despite moratoria Lower than expected negative impact of COVID on ▪ collections due to Greece and Real Estate
L & e r P u e ct pl u str m Si	Gross revenues	€363.8m	€418.2m	+15%	▪ Base fees at 36% of revenues, underpinning the defensive features of doValue's business model
	Net Revenues	€323.7m	€368.1m	+14%	▪ Benefits of Altamira integration more than offset the disruption caused by lockdown
	EBITDA ex NRI1	€140.4m	€125.3m	-11%	▪ Pricing trends confirm overall resilience EBITDA ex NRI PF 2020 of €153m ▪
	EBITDA ex NRI1 margin	39%	30%	- 9 p.p.	▪ Limited impact on profitability, with 30% EBITDA margin supported by quick reduction in variable costs
	EBITDA Reported	€127.8m	€114.3m	-11%	▪ Significant actions on all cost items, focused on HR, IT, SG&A and outsourcing fees
	Net income ex NRI1	€51.9m	€20.8m	-60%	▪ Net Income impacted by non-cash D&A charges, in line with expectations
	Net income Reported	€21.4m	- €21.9m	n.m.	▪ Net Income reported impacted by €29.2m provisions for a tax claim in Spain (see appendix for more details)
n o h ati s er a C n e g	Net Financial Position (cash)	€236.5m	€410.6m	+74%	▪ Growth in Net Financial Position due to closing of doValue Greece acquisition (ca. €235m); significant positive FCF in the period
	Net Debt/ PF2 EBITDA	1.3x	2.7x	+1.4x	Moderate increase in leverage, at most conservative ▪ levels in industry and within financial policy targets

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

Evolution of GBV under management

• Assets under management continue to diversify (more asset classes and markets) and grow organically and via M&A
• Inflows from existing clients (forward flow agreements with Unicredit, Santander, Alpha Bank) +50% above FY20 expectations, despite banking moratoria in place
• Inflows from new clients on the high-end of the guidance and led by new products (e.g. UTP and leasing)
• Icon portfolio award in Greece and Marina portfolio award in Cyprus to be onboarded in 2021 bring total GBV to €161bn PF at FY20

One of the most diversified portfolios in the industry

1. "Other Investors" includes Fortress at 23% of total GBV (together with FINO 2 portfolio).

Revenue composition: resiliency in base fees

▪ Base fees significantly increased as a proportion of revenues at 36%, providing a hedge to current scenario

• Structural higher exposure to Spain and Greece & Cyprus (base fees ca. 10 and >15bps respectively vs Italy at ca. 5bps)
• 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
• Excluding M&A, NPL outsourcing fees continue trending down year-on-year

Focus on operating expenses

Notes: 1. Non Recurring Items related to the acquisitions of Altamira Asset Management and Eurobank FPS (now doValue Greece)

Financial highlights by geography

• Structurally higher collection rates in markets ex-Italy, due to shorter timing of legal procedures
• Collections and REO sales trending towards normalization, still affected by legal courts operating below capacity and enforcing Governmental measures in place to limit the spread of COVID-19
• Spain and Portugal in line with expectations, supported by REO sales and real estate market holding up
• Strong results in Greece and Cyprus, with accretive profitability and downside protection in the form of higher than average base fees. doValue Greece (formerly FPS) ahead of pre-Covid budget

Notes: 1: Including REO sales and excluding doValue Greece (given the mix of restructuring and liquidation activities, not captured by collections).

NWC and Net financial position

• Confirming improvement of NWC vs YE19 on the back of both lower receivables and higher payables
• Client shift towards investors (paying quicker vs banks) and doValue Greece contracts are key structural NWC positives

• No sign of stress in payments by customers due to Covid-19

• As expected, leverage at 2.7x. Covenants provide significant headroom even in case of unforeseen external shocks

• Leverage at end of Feb 21 further reduced by sale of a co-investment held on balance sheet at YE20
• Liquidity further strengthened by undrawn revolving credit facilities of ca. €80m
• No refinancing needs until 2025

Cash flow dynamics

• Confirmed highly cash generative nature of business, with positive NWC trend, limited capex and cash taxes
• Growth in Net Debt only due to acquisition of doValue Greece, closed on June 5th 2020
• Free cash flow generation at €87m YE20, supported by EBITDA and positive trend in Net Working Capital

Condensed consolidated income statement FY20

	12/31/2020	12/31/2019 RESTATED	Change €	Change %
Servicing Revenues:	383.790	325.890	57.900	18%
o/w: NPE revenues	316.150	268.059	48.091	18%
o/w: REO revenues	67.640	57.831	9.809	17%
Co-investment revenues	429	564	(135)	(24)%
Ancillary and other revenues	34.024	37.385	(3.361)	(9)%
Gross revenues	418.243	363.839	54.404	15%
NPEOutsourcing fees	(22.147)	(19.854)	(2.293)	12%
REO Outsourcing fees Ancillary Outsourcing fees	(17.407) (10.608)	(12.675) (7.628)	(4.732) (2.980)	37% 39%
Net revenues	368.081	323.682	44.399	14%
Staff expenses	(172.921)	(133.658)	(39.263)	29%
Administrative expenses	(80.813)	(62.258)	(18.555)	30%
Total "o.w. IT"	(26.440)	(20.297)	(6.143)	30%
Total "o.w. Real Estate"	(5.484)	(5.193)	(291)	6%
Total "o.w. SG&A"	(48.889)	(36.768)	(12.121)	33%
Operating expenses	(253.734)	(195.916)	(57.818)	30%
EBITDA EBITDA margin	114.347 27%	127.766 35%	(13.419) (8)%	(11)% (22)%
Non-recurring items included in EBITDA¹⁾	(10.928)	(12.676)	1.748	(14)%
EBITDA excluding non-recurring items	125.275	140.442	(15.167)	(11)%
EBITDA margin excluding non-recurring items	30%	39%	(9)%	(22)%
Net write-downs on property, plant, equipment and intangibles	(62.638)	(63.008)	370	(1)%
Net provisions for risks and charges	(11.272)	(10.732)	(540)	5%
Net write-downs of loans	162	815	(653)	(80)%
Profit (loss) from equity investments	(2)	-	(2)	n.s.
EBIT	40.597	54.841	(14.244)	(26)%
Net income (loss) on financial assets and liabilities measured at fair value	(3.729)	1.091	(4.820)	n.s.
Financial interest and commissions	(23.416)	(7.459)	(15.957)	n.s.
EBT	13.452	48.473	(35.021)	(72)%
Non-recurring items included in EBT²⁾	(25.461)	(23.664)	(1.797)	8%
EBT excluding non-recurring items	38.913	72.138	(33.225)	(46)%
Income tax for the period	(36.596)	(23.987)	(12.609)	53%
PROFIT (LOSS) FOR THE PERIOD	(23.144)	24.486	(47.630)	n.s.
Profit (loss) for the period attributable to Non-controlling interests	1.201	(3.061)	4.262	(139)%
PROFIT (LOSS) FOR THE PERIOD ATTRIBUTABLE TO THE SHAREHOLDERS OF THE PARENT COMPANY	(21.943)	21.425	(43.368)	n.s.
Non-recurring items included in Profit (loss) for the period	(47.872)	(30.850)	(17.022)	55%
O.w. Non-recurring items included in Profit (loss) for the period attributable to Non-controlling interest	(5.122)	(391)	(4.731)	n.s.
Profit (loss) for the period attributable to the Shareholders of the Parent Company excluding non recurring items	20.807	51.884	(31.077)	(60)%
Profit (loss) for the period attributable to Non-controlling interests excluding non-recurring items
	3.921	-	3.921	n.s.
Earnings per share (in Euro)	(0,28)	0,27	(0,5)	n.s.
Earnings per share excluding non-recurring items (Euro)	0,26	0,66	(0,40)	(60)%

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 mainly 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 as of 31/12/20

	12/31/2020	12/31/2019 RESTATED	Change €	Change %
Cash and liquid securities	132.486	128.162	4.324	3%
Financial assets	70.859	48.609	22.250	46%
Property, plant and equipment	36.176	23.904	12.272	51%
Intangible assets	577.460	289.585	287.875	99%
Tax assets	117.909	98.554	19.355	20%
Trade receivables	175.155	176.991	(1.836)	(1)%
Assets held for sale	30	10	20	n.s.
Consolidation differences to be allocated	-	-	-	n.s.
Other assets	16.485	14.378	2.107	15%
TOTAL ASSETS	1.126.560	780.193	346.367	44%
Financial liabilities: due to banks	543.042	364.627	178.415	49%
Other financial liabilities	83.162	69.642	13.520	19%
Trade payables	51.824	46.969	4.855	10%
Tax Liabilities	105.549	28.170	77.379	n.s.
Employee Termination Benefits	16.341	8.544	7.797	91%
Provision for risks and charges	55.110	30.305	24.805	82%
Liabilities held for sale	-	-	-	n.s.
Other liabilities	65.872	25.196	40.676	n.s.
TOTAL LIABILITIES	920.900	573.453	347.447	61%
Share capital	41.280	41.280	-	n.s.
Reserves	145.162	144.219	943	1%
Treasury shares	(103)	(184)	81	(44)%
Profit (loss) for the period attributable to the Shareholders of the Parent
Company	(21.943)	21.425	(43.368)	n.s.
NET EQUITY ATTRIBUTABLE TO THE SHAREHOLDERS OF THE
PARENT COMPANY	164.396	206.740	(42.344)	(20)%
TOTAL LIABILITIES AND NET EQUITY ATTRIBUTABLE TO THE SHAREHOLDERS OF THE PARENT COMPANY	1.085.296	780.193	305.103	39%
NET EQUITY ATTRIBUTABLE TO NON-CONTROLLING INTERESTS	41.264	-	41.264	n.s.
TOTAL LIABILITIES AND NET EQUITY	1.126.560	780.193	346.367	44%

Consolidated cash flow FY20

E-MARKET SDIR
CERTIFIED

	12/31/2020	12/31/2019 RESTATED
EBITDA	114.347	127.766
Capex	-19.735	-8.352
EBITDA-Capex	94.612	119.414
as % of EBITDA	83%	93%
Adjustment for accrual on share-based incentive system payments	3.098	5.926
Changes in NWC (Net Working Capital)	15.645	22.397
Changes in other assets/liabilities	6.555	-23.031
Operating Cash Flow	119.910	124.706
Tax paid (IRES/IRAP)	-15.324	-12.370
Financial charges	-17.807	-6.950
Free Cash Flow	86.779	105.386
(Investments)/divestments in financial assets	-24.938	-10.807
Equity (investments)/divestments	-234.057	-356.878
Dividend paid	-1.875	-42.264
Net Cash Flow of the period	-174.091	-304.563
Net financial Position - Beginning of period	-236.465	68.098
Net financial Position - End of period	-410.556	-236.465
Change in Net Financial Position	-174.091	-304.563

Key performance indicators FY20

KPIs	12/31/2020	12/31/2019 RESTATED	CHANGE
			€	%
Gross Book Value (EoP) - Group¹⁾	157.686.703	157.600.134	86.569	0%
Gross Book Value (EoP) - Italy	78.435.631	78.796.103	(360.472)	(0%)
Collections of the period - Italy	1.386.817	1.893.198	(506.381)	(27%)
LTM Collections - Italy	1.386.817	1.893.198	(506.381)	(27%)
LTM Collections - Italy - Stock	1.349.089	1.794.339	(445.250)	(25%)
LTM Collections / GBV EoP - Italy - Overall	1,8%	2,4%	(0,6%)	(26%)
LTM Collections / GBV EoP - Italy - Stock	1,9%	2,5%	(0,6%)	(25%)
Staff FTE / Totale FTE Group	43%	38%	4,9%	13%
LTM Collections / Servicing FTE - Italy	2,0	2,6	(54,6%)	(21%)
EBITDA	114.347	127.766	(13.419)	(11%)
Non-recurring items (NRIs) included in EBITDA	(10.928)	(12.676)	1.748	(14%)
EBITDA excluding non-recurring items	125.275	140.442	(15.167)	(11%)
EBITDA Margin	27%	35%	(7,8%)	(22%)
EBITDA Margin excluding non-recurring items	30%	39%	(8,6%)	(22%)
Profit (loss) for the period attributable to the shareholders of the parent
company	(21.943)	21.425	(43.368)	n.s.
Non-recurring items included in Profit (loss) for the period attributable to the
Shareholders of the Parent Company	(42.750)	(30.459)	(12.291)	40%
Profit (loss) for the period attributable to the Shareholders of the Parent Company excluding non-recurring items	20.807	51.884	(31.077)	(60%)
Earnings per share (Euro)	(0,28)	0,27	(55,0%)	n.s.
Earnings per share excluding non-recurring items (Euro)	0,26	0,66	(39,6%)	(60%)
Capex	19.735	8.086	11.649	144%
EBITDA - Capex	94.612	119.680	(25.068)	(21%)
Net Working Capital	123.331	130.022	(6.691)	(5%)
Net Financial Position	(410.556)	(236.465)	(174.091)	74%
Leverage (Net Debt / EBITDA LTM PF)	2,7x	1,3x	n.a.	n.a.

¹⁾ In order to enhance the comparability of Gross Book Value (GBV) as of 12/31/2019 the values for doValue Greece have been included at the reference date

Spanish Tax Claim

Simple debt structure

• Historically a net-cash business, doValue took advantage of the debt market in 2019 and 2020 to support its international M&A strategy, within its stated max 3x leverage (Net Debt/EBITDA) policy
• Access to bond market provides for greater diversification and flexibility of funding base
• Structurally high cash generation covers the yearly debt schedule, limited to the amortization of bank debt
• Liquidity at FY20 was more than €200m with no refinancing needs before 2025 (bond maturity)

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.

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 relations contacts

Tel.: +39 06 4797 9154 Mail: investorrelations@dovalue.it