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Investor Presentation May 13, 2022

4145_ip_2022-05-13_db399fe1-6044-48bd-907c-c2c6c9308a25.pdf

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Q1 2022 results

May 13th, 2022

Business Highlights Andrea Mangoni, CEO

A positive start of the year

1 Strong intake
of new GBV and steady
Collection Rate

Approx. €4.9bn of new mandates already secured in 2022 YTD (€1.2bn in Italy and €3.7bn in the Hellenic Region)
Forward flows in Q1 2022 totalling €0.8bn (roughly equally split between Spain, Greece and Italy)


With a total of €5.6bn of new GBV secured in 2022 YTD, already achieved c. 42% of 2022 target (€13-14bn)

Overall pipeline today of €24bn of potential mandates to be assigned in the market in 2022

GBV increasing to €153bn (+2.1% from Dec-21), pro-forma for mandates secured but not yet onboarded GBV is €158bn

Collections of €1.3bn in line with Q1 2021 (+0.1% YoY)
Collection Rate of 4.2% as of Mar-22 (broadly in line with FY 2021 level)
2 Strong financial
performance
in Q1 2022
Gross Revenues of €131m (+3.6% Year-on-Year)


EBITDA ex NRI of €39m (+1.6% Year-on-Year)

EBITDA ex NRI margin of 30.0%
Net Income ex NRI of €10m (+34.5% Year-on-Year)


Stable Net Debt / EBITDA at 2.0x (vs 2.0x as of Dec-21)
3 Sareb does not affect
2024 targets for Iberia
Sareb decision not to reappoint current servicers (including doValue) communicated on February 24th, 2022


Full D&A impact already accounted on FY 2021 results (€4.6m impact post-tax and post-minorities)
No material impact in terms of D&A expected for 2022


Extraordinary reorganisation cost (NRIs) estimated at max €15m to impact P&L in H2 2022
EBITDA ex NRIs target for 2024 for Iberia (€35-40m) remains intact


Impact on 2022-2023 in line with previous guidance
4 Macro backdrop will
support doValue
pipeline

Full normalisation of auction and collection activity already in 2021
Moratoria and restrictions on foreclosures lifted in 2021


Macro slowdown triggered by conflict in Ukraine will exacerbate formation of NPEs

doValue collection performance remains resilient

Strong intake of new GBV

Inflows overview 2017-2022 YTD (€bn) Key mandates secured in the last 6 months

Forward Flows New Mandates

A growing and attractive pipeline for 2022

  • Very active market in Italy and Hellenic Region
  • Pipeline consists of both outright portfolios and servicing platforms up for sale
  • Few transaction are relatively large (€5bn+)
  • doValue evaluating all pipeline projects
  • Pipeline expected to intensify in H2 2022

Macro outlook will create further pipeline

Real GDP growth (2022) Sovereign Yields (10-years)

Considerations

  • Rising inflation and higher interest rates exacerbating distressed situations
  • Macro slowdown expected in Europe (but not a recession)
  • Conflict in Ukraine and sanctions against Russia create additional pressure on the economic system
  • Macro backdrop will exacerbate formation of NPEs
  • No relevant impact on doValue collection activity for the time being

Sources: EBA, Bloomberg, IMF

Strong financial results in Q1 2022

Key Metrics (€m) Comments
+3.6%
+7.0%1
+1.6%
+13.3%1
+34.5%
Comparable consolidation perimeter in Q1 2022 vs Q1 2021
Typically Q1 is a seasonally weak quarter compared to rest of the year


Q1 2021 was positively affected by €4bn capital gain on Relais
notes resale
131
127
30.6%
30.0%
EBITDA
EBITDA
margin2
margin

Q1 2022 does not feature material exceptional items
Positive performance of Italy and very strong performance in Hellenic Region


EBITDA margin of 30% despite expected relative lower performance of Iberia
39
39
10
8
Gross Revenues EBITDA
ex NRIs
Q1 2021
Q1 2022
Attributable Net Income
ex NRIs

Notes:

1) Excluding from Q1 2021 the €4m capital gain realised from the sale of Relais notes

2) EBITDA ex NRIs margin for Q1 2021 and excluding €4m capital gain realised from the sale of Relais notes stands at 28.3%

7 Q1 2022 results

Sareb will accelerate transformation in Iberia

  • Sareb decided not to reappoint doValue
  • Decision made on February 24th, 2022
  • All current four servicers (including doValue) not reappointed
  • Two "new" servicers appointed (primarily based on fees)
  • Offboarding NPL portfolio in Jun-22, as Ibero contract expires
  • Current REO portfolio management will be extended to Sep-22
  • Currently Sareb GBV stands at €22bn
  • Full D&A impact already accounted on FY 2021 results
  • €4.6m impact post-tax and post-minorities
  • No material impact in terms of D&A expected for 2022
  • Reorganisation cost estimated at max €15m to impact P&L in H2 2022 - Below EBITDA (Provisions for Risks and Charges) and treated as NRIs
  • doValue remains # 3 servicer in Spain with 10-15% market share
  • EBITDA ex NRIs target for 2024 for Iberia (€35-40m) remains intact
  • Impact on 2022-2023 in line with previous guidance

doTransformation program well underway

Financial Results Manuela Franchi, General Manager and CFO

Financial highlights

Item Q1 2021 Q1 2022 Delta Comments
GBV €161bn €153bn broadly
stable

Approx. €5.5bn already won but yet to be onboarded will bring
to €158bn pro-forma GBV
Collections €1.3bn €1.3bn +0.1% GBV dynamic driven by acceleration of collections post COVID

and by one-off disposals by banks clients, partially offset by
inflows
Collection Rate 3.3% 4.2% +0.9 p.p. Increase in Collection Rate driven by post COVID normalisation

and early signs of productivity gains (doTransformation)
Gross Revenues €126.6m €131.3m +3.6% Strong increase in Gross Revenues and Net Revenues mainly

driven by more favourable GBV mix and higher revenues from
Net Revenues €111.6m €116.1m +4.0% ancillary activities
Excluding €4m Relais
capital gain in Q1 2021, Gross Revenues

increase is +7.0% and EBITDA ex NRIs increase is +13.3%
EBITDA ex NRIs €38.7m €39.3m +1.6%
Strong growth in EBITDA driven by increase in Net Revenues
EBITDA ex NRIs margin 30.6% 30.0% -0.6 p.p. partially offset by increased operating costs

Limited NRIs at c. €0.4m at EBITDA level

Growth in Net Income ex NRIs driven by increase in EBITDA,
Attributable Net Income ex NRIs €7.7m €10.4m +34.5% lower D&A and net positive revaluation of financial assets
Net Debt €376.5m €400.9m +6.5% Increase in Net Debt in LTM driven by several one off items

such as BidX1 acquisition (€10m), share buy-back (€5m), Tax
Financial Leverage 2.3x 2.0x -0.3x Claim payment (€33m)
Stable leverage in Q1 2022 (vs Dec-21)

Gross Book Value

Inflows from existing clients: €0.8bn (roughly equally split between Spain, Greece and Italy)

  • New mandates (onboarded in Q1 2022): €5.7bn (Project Frontier in Greece)
  • Collections / Sales: €1.3bn with Collection Rate of 4.2% (broadly in line with FY 2021 Collection Rate but above Q1 2021)
  • Net write-offs: €0.8bn (split 60% collection / 40% write-off)
  • Disposals: €1.3bn (mainly related to Italian business)
  • Mandates secured and not yet onboarded as of Mar-22: €5.5bn
  • €1.2bn Italian GACS won in 2022 YTD
  • €650m Marina in Cyprus, c. €1.5bn of portfolios in Greece, €2.2bn portfolio in Cyprus

Gross Book Value and Gross Revenues (1 of 2)

13 Q1 2022 results

Gross Book Value and Gross Revenues (2 of 2)

14 Q1 2022 results

Gross Revenues

Operating Expenses

Operating Expenses ex NRIs (€m) Comments

% of Gross
Revenues
73 % of tot % of tot 77 % of Gross
Revenues
9%
1%
6%
11
2
7
16%
2%
10%
17%
2%
11%
13
2
9
10%
1%
7%
42% 53 72% 70% 53 41%
Q1 2021 Q1 2022
HR
IT
RE
SG&A
  • Broadly stable OpEx as a % of Gross Revenues at 59% (from 58%) - Broadly stable EBITDA margin at 30.0% (from 30.6%)
  • Growth in OpEx in absolute terms by +5%
  • Mainly driven by increase in IT and SG&A costs due to doTransformation
  • Lower HR costs as a % of Gross Revenues (from 42% to 41%) - Strong effort in containing HR costs despite post-COVID normalisation
  • Higher IT and SG&A costs as % of Gross Revenues (from 15% to 17%) - Mainly related to the transformation project in Iberia (ahead of Sareb exit)
  • Stable Real Estate costs as % of Gross Revenues (at 1%)

Notes:

1) Excluding from Q1 2021 the €4m capital gain realised from the sale of Relais notes, the ratio of Operating Expenses ex NRIs to Gross Revenues stands at 59%

EBITDA

EBITDA ex NRIs growth at +1.6%

  • Excluding €4m Relais capital gain in Q1 2021 growth of +13.3%

More favourable mix vs Q1 2021 (contribution of Hellenic Region)

  • EBITDA ex NRIs margin in Hellenic Region at 53%, in Italy at 24% and in Iberia at 4%

Italy EBITDA ex NRIs growth at +24%

  • Excluding €4m Relais capital gain in Q1 2021 growth of +1.4x
  • Reduction in OpEx and Outsourcing costs

Hellenic Region EBITDA ex NRIs growth at +19%

  • Gross Revenues growth partially offset by increase in OpEx

Iberia EBITDA ex NRIs decline at -80%

  • Reduction in Gross Revenues of -9% compounded by increase in OpEx
  • Increased in OpEx mainly related to doTransformation project

Regional Performance (Q1 2022)

doValue
Group
Italy Hellenic
Region
Iberia
Collections €1.3bn €0.4bn
(30% of tot)
€0.4bn
(28% of tot)
€0.5bn
(42% of tot)
Collection Rate 4.2% 2.4% 5.4% 6.6%
Gross Revenues €131m €43m
(33% of tot)
€53m
(40% of tot)
€36m
(27% of tot)
EBITDA ex NRIs €39m €10m
(26% of tot)
€28m
(70% of tot)
€1m
(4% of tot)
EBITDA margin
ex NRIs
30% 24% 53% 4%

Notes:

1) Collections exclude curing

2) Collection Rate calculated on the basis of GBV in stock for the LTM Mar-22

18 Q1 2022 results

Net Income

  • Net Income growth of +63% (or +35% ex NRIs)
  • Higher EBITDA (delta €0.7m)
  • Lower D&A (delta €2.7m)
  • Higher fair value change on financial assets (delta €1.8m)
  • Partially offset by higher taxes (delta €1.6m)

Approx. €1.5m of NRIs (net of taxes and minorities)

  • Approx. €0.4m above EBITDA, mainly related to consultancy costs
  • Approx. €2.0m (gross of taxes and minorities) below EBITDA, mainly related to ongoing redundancy plans

Cash Flow

Operating Free Cash Flow of €10m (26% conversion from EBITDA)

  • Increase in Capex (vs Q1 2021) related to doTransformation plan
  • Marginal increase in NWC of €9m vs Dec-21 (ratio NWC / Gross Revenues stable at c. 25% vs 23% as of Dec-21)
  • Delta other asset & liabilities driven by (i) portion of Eurobank 2022 fees already paid in 2021 and (ii) redundancy cash outs (already accounted as provisions in 2021)

Financial Structure

Net Debt (€m) Comments
2.0x
Net Debt /
EBITDA
402
300
261
8
(167)
2.0x
Net Debt /
EBITDA
401
297
258
7
(162)
Significant liquidity position with no maturities before 2025

-
Approx. €162m cash position as of Mar-22

All bond debt structure achieved in Q3 2021
-
€265m issued in Aug-20 (5.0% coupon, 2025 maturity)
-
€300m bond issued in Jul-21 (3.375% coupon, 2026 maturity)
-
Full reimbursement of bank debt in Jul-21
-
Previously bank debt had an amortising repayment profile
-
Improved liquidity profile (bullet) and longer maturity
-
Fitch and Standard & Poor's BB rating confirmed at Stable Outlook and
achieved targets for rating category
Financial Leverage at 2.0x as of Mar-22 (vs 2.0x as of Dec-21)

-
Achieved lower end of leverage target range of 2.0-3.0x

Dividend of €40m paid in May-22
Dec-21
Cash
Bank Debt
Mar-22
Bond 2025
Bond 2026

Approx. €120m of total gross credit lines
-
Pool of Italian, Spanish and Greek banks

Appendix

Management income statement

Data related to Q1 2021 have been restated following the completion of the Purchase Price Allocation of doValue Greece

23 Q1 2022 results

Management balance sheet

Condensed Balance Sheet 3/31/2022 12/31/2021 Change € Change %
Cash and liquid securities 161,693 166,668 (4,975) (3)%
Financial assets 62,336 61,961 375 1%
Property, plant and equipment 31,138 34,204 (3,066) (9)%
Intangible assets 543,949 545,225 (1,276) (0)%
Tax assets 153,748 152,996 752 0%
Trade receivables 204,946 206,326 (1,380) (1)%
Assets held for sale 10 30 (20) (67)%
Other assets 15,272 17,226 (1,954) (11)%
Total Assets 1,173,092 1,184,636 (11,544) (1)%
Financial liabilities: due to banks/bondholders 562,586 568,459 (5,873) (1)%
Other financial liabilities 74,245 76,017 (1,772) (2)%
Trade payables 63,083 73,710 (10,627) (14)%
Tax liabilities 113,035 113,060 (25) (0)%
Employee termination benefits 9,663 10,264 (601) (6)%
Provisions for risks and charges 38,668 44,235 (5,567) (13)%
Other liabilities 106,032 104,888 1,144 1%
Total Liabilities 967,312 990,633 (23,321) (2)%
Share capital 41,280 41,280 - n.s.
Reserves 121,521 96,299 25,222 26%
Treasury shares (4,678) (4,678) - n.s.
Profit (loss) for the period attributable to the Shareholders of the Parent
Company 8,869 23,744 (14,875) (63)%
Net Equity attributable to the Shareholders of the Parent Company 166,992 156,645 10,347 7%
Total Liabilities and Net Equity attributable to the Shareholders of the
Parent Company 1,134,304 1,147,278 (12,974) (1)%
Net Equity attributable to Non-Controlling Interests 38,788 37,358 1,430 4%
Total Liabilities and Net Equity 1,173,092 1,184,636 (11,544) (1)%

Data related to Q1 2021 have been restated following the completion of the Purchase Price Allocation of doValue Greece

Management cash flow

Condensed Cash flow 3/31/2022 3/31/2021 RESTATED
EBITDA 38,919 38,247
Capex (5,064) (2,748)
EBITDA-Capex 33,855 35,499
as % of EBITDA 87% 93%
Adjustment for accrual on share-based incentive system payments 1,056 974
Changes in NWC (Net Working Capital) (9,247) (4,231)
Changes in other assets/liabilities (15,384) (13,455)
Operating Cash Flow 10,280 18,787
Tax paid (IRES/IRAP) (3,809) -
Financial charges (6,636) (6,439)
Free Cash Flow (165) 12,348
(Investments)/divestments in financial assets 1,063 21,745
Net Cash Flow of the period 898 34,093
Net financial Position -
Beginning of period
(401,791) (410,556)
Net financial Position -
End of period
(400,893) (376,463)
Change in Net Financial Position 898 34,093

Data related to Q1 2021 have been restated following the completion of the Purchase Price Allocation of doValue Greece

Glossary

BPO Business Process Outsourcing, i.e. the outsourcing of non-strategic support activities by banks
Early Arrears Loans that are up to 90 days past due
Forward Flows Agreement with commercial bank related to the management of all future NPL generation by the bank for number of years, customary
feature of credit servicing
platforms spun off by commercial banks
FTE Full Time Equivalent, i.e. a unit that indicates the workload of an employed person in a way that makes workloads comparable across various contexts
GACS Garanzia Cartolarizzazione Sofferenze, i.e. the State Guarantee scheme put together by the Italian Government in 2016 which favoured the creation of a more liquid
NPL market in Italy and allowed banks to more easily deconsolidate NPL portfolios through securitisations
GBV Gross Book Value, i.e. nominal value of assets under management by doValue, represents the maximum / nominal claim by banks /
investors to borrowers on their
portfolios
HAPS Hercules Asset Protection Scheme, i.e. the State Guarantee scheme put together by the Greek Government in 2019 with the aim of favouring the creation of a more
liquid NPL market in Greece and to allow banks to more easily deconsolidate NPL portfolios through securitisations
NPE Non-Performing Exposure, i.e. the aggregate od NPL, UTP and Early Arrears
NPL Non-Performing Loan, i.e. loans which are more than 180 days past due and have been denounced
NRI Non-Recurring Items, i.e. costs or revenues which are non-recurring by nature (typically encountered in M&A or refinancing transactions)
Performing
Loans
Loans which do not present problematic features in terms of principal / interest repayment by borrowers
REO Real Estate Owned, i.e. real estate assets owned by a bank / investor as part of a repossession act
UTP Unlikely to Pay, i.e. loans that are between 90-180 days past due and denounced or more than 180 past due and not denounced

Disclaimer

This disclaimer applies to all documents and information provided herein and to any verbal or written comments of person presenting them.

This presentation and any materials distributed in connection herewith, taken together with any such verbal or written comments, including the contents thereof (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 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. Any such offer would only be made by means of formal offering documents, the terms of which shall govern in all respects.

You are cautioned against using this information as the basis for making a decision to purchase any security or to otherwise engage in an investment advisory relationship with doValue S.p.A. and its affiliates ("doValue"). The distribution of this Presentation in other jurisdictions may be restricted by law and persons into whose possession this document comes should inform themselves about, and observe, any such restriction. Any failure to comply with these restrictions may constitute a violation of the laws of any such other jurisdiction.

This Presentation has been prepared based on the information currently available to us and is based on certain key underlying assumptions. 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 its subsidiaries or any of their respective employees, advisers, representatives or affiliates shall have any liability whatsoever (in negligence or otherwise) for any loss however 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, including specifically any guidance or projection, 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 and, in particular, in any relevant guidance, 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 and guidance 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. Estimated and assumptions are inherently uncertain and are subject to risks that are outside of the company's control. Any guidance and statement refers to events and depend upon circumstances that may or may not verify in the future and refer only as of the date hereof. 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 and or guidance, which speak only as of the date of this Presentation. The inclusion of the projections herein should not be regarded as an indication that the doValue considers the latter to be a reliable prediction of future events and the projections should not be relied upon as such. Use of different methods for preparing, calculating or presenting information may lead to different results and such differences may be material. 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.

By reviewing the Presentation, you acknowledge that you are knowledgeable and experienced with respect to its financial and business aspects and that you will conduct your own independent investigations with respect to the accuracy, completeness and suitability of the matters referred to in the Presentation should you choose to use or rely on it, at your own risk, for any purpose.

Certification pursuant article 154 BIS, paragraph 2 of Italian Legislative Decree no. 58 of 24 February 1998 (the Consolidated Financial Law)

Pursuant to Article 154 bis, paragraph 2, of the "Consolidated Law on Finance", Mr Davide Soffietti, in his capacity as the Financial Reporting Officer with preparing the financial reports of doValue S.p.A, certifies that the accounting information contained in this document, is consistent with the data in the supporting documents and the Group's books of accounts and other accounting records.

Investor Relations Contacts

Name: Alberto Goretti (Head of Investor Relations) Tel: +39 02 83460127 E-mail: [email protected]

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