Slide 1: PRA Group Q2 2024 Conference Call Presentation
PRA Group Q2 2024 Conference Call Presentation Nasdaq: PRAA
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements in this presentation, other than statements of historical fact, are forward-looking statements, which are based on our current beliefs, projections, assumptions and expectations concerning future operations and financial performance. Such statements involve unce
Slide 3: Successful Turnaround in U.S. Business Is Clearly Visible
Successful Turnaround in U.S. Business Is Clearly Visible 2025 Grow the Business 2024 Drive the Turnaround 2023 Stabilize Performance 2 Nasdaq: PRAA
Slide 4: PRA Europe: A Growing, Profitable and Differentiated Business
PRA Europe A Growing, Profitable and Differentiated Business PRA Europe ERC1 and Headcount2 $5.0 150% ✓ Experienced and stable management team +132% $4.0 ✓ Diversified presence across 13 countries $3.4 $3.5 $3.2 $3.1 100% $3.0 $2.9 $3.0 ✓ Disciplined investments with deep seller relationships & limi
Slide 5: Roadmap to Enhanced Profitability
Roadmap to Enhanced Profitability Value Creation from Higher Cash Collections While Reducing Marginal Costs Q2 2024 Update Optimizing Investments • Strong investments and expanded seller Increase ERC and portfolio returns relationships Enhanced Profitability • Simplified collector workflows Operatio
Slide 6: U.S. Portfolio Supply Driven By Charge-Off Rates and Credit Card Balances
U.S. Portfolio Supply Driven By Charge-Off Rates and Credit Card Balances $ in millions U.S. Credit Card Balances1 and Charge-Off Rates2 $1,200 10% $1,058 $1,000 8% $800 6% $600 4% $400 2% $200 $0 0% 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Q1 24 Q2 24 U.S. Credit Card Balances U.S. Credit Card
Slide 7: Capitalizing on Strong U.S. Supply & Attractive Pricing Globally
Capitalizing on Strong U.S. Supply & Attractive Pricing Globally $ in millions $250 $250 $220 $207 $200 $172 $187 $200 $146 $161 $154 $150 $141 $144 $150 $125 $123 $111 $109 $106 Avg: $91 $96 $97 $98 $100 $79 $78 $65 $88 $100 $90 $73 $79 $109 $61 $48 $49 $50 $50 $0 $0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q
Slide 8: Portfolio Investments of $379 Million
Portfolio Investments of $379 Million Up 16% Year-over-Year $ in millions Portfolio Purchases $450 +16% $400 $392 $379 $350 $328 $311 $300 $288 $285 $154 $220 $79 $144 $246 $250 $231 $230 $220 $202 $123 $49 $200 $161 $183 $159 $98 $106 $147 $125 $150 $90 $73 $61 $48 $232 $225 $100 $184 $197 $172 $16
Slide 9: The Two Components of Portfolio Revenue
The Two Components of Portfolio Revenue $ in millions Portfolio Income Changes in Expected Recoveries Portfolio Income Continues to Grow Changes in Expected Recoveries Positive Over Time $300 $80 $73 $64 $250 $60 $57 $232 $50 $52 $219 $213 $212 $48 $44 $208 $195 $202 $209 $40 Avg: $200 $194 $40 $37
Slide 10: Investing More in Legal Costs to Generate Proportionately Higher Legal Collections
Investing More in Legal Costs to Generate Proportionately Higher Legal Collections $ in millions Collections Begin ~3-6 Months Following Investment U.S. Legal Collections U.S. Legal Costs $202 $196 $193 $120 $200 $182 $180 $173 $155 $100 $152 $152 $145 $150 $138 $132 $131 Upfront Investment $80 $59
Slide 11: Q2 2024 Financial Results
Q2 2024 Financial Results $ in millions, except per share amounts Q2 2023 vs Q2 2024 Total Revenues Portfolio Income Operating Expenses +36% +14% +19% Total Revenues: • Increase driven by higher changes in expected $284 $209 $195 $184 $164 recoveries and portfolio income $209 Portfolio Income: • Inc
Slide 12: Cash Collections Increased 13% Year-Over-Year
Cash Collections Increased 13% Year-Over-Year $ in millions Cash Collections $600 -13% -18% -16% -17% -14% -6% +2% +5% +9% +13% Americas and $556 $544 +13% Australia: $500 $488 $474 $481 $474 • 18% increase $444 $450 driven primarily $412 $411 $419 $420 $410 by higher cash $400 $392 collections in $
Slide 13: ERC Increased 15% Year-over-Year to $6.8 Billion
ERC Increased 15% Year-over-Year to $6.8 Billion Up $304 Million Sequentially $ in billions ERC $8.0 +15% $7.0 $6.8 $6.4 $6.5 $6.1 $6.1 $0.5 $6.1 $6.0 $5.9 $6.0 $0.5 $6.0 $0.3 $0.4 $5.7 $5.7 $5.7 $0.6 $0.3 $0.4 $5.6 $0.4 $5.3 $0.6 $0.6 $0.4 $0.5 $0.5 $5.0 $0.5 $2.9 $2.8 $2.5 $2.4 $2.6 $2.7 $2.5 $2.1
Slide 14: Modest Leverage Despite Higher Portfolio Purchases
Modest Leverage Despite Higher Portfolio Purchases $ in billions Total Borrowings and Debt to Adjusted EBITDA* $3.5 4.5x $3.1 $2.9 $2.9 $3.0 $3.0 $2.7 $2.8 4.0x $2.5 $2.5 $2.6 $2.5 $2.5 $2.4 $2.5 $2.4 $2.5 3.5x $2.0 2.89x 2.84x 2.89x 2.83x 2.92x 3.0x 2.76x $1.5 2.25x 2.5x $1.0 1.94x 2.03x 2.04x 1.81
Slide 15: Strong Capital Structure
Strong Capital Structure Well-Positioned to Continue Capitalizing on Increasing Portfolio Supply $ in millions Debt Maturity Profile • $1.4 billion availability under our credit (Amount Outstanding) facilities • $742 million available based on current ERC $1,150 • $707 million additional availabilit
Slide 16: 2024 Outlook
2024 Outlook On Track to Meaningful Profitability and Substantially Improved Results 6-8% Double-digit Strong ~60% cash return on growth in Modest portfolio efficiency average cash expense investment ratio1 in tangible collections growth levels 2024 equity2 in in 2024 2024 • Largely due to increase
Slide 17: Q&A
Q&A 16 Nasdaq: PRAA
Slide 18: Reconciliation of Non-GAAP Financial Measures to GAAP
Reconciliation of Non-GAAP Financial Measures to GAAP $ in millions Use of Non-GAAP Financial Measures The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management uses certain non-GAAP financial measures, including Adjusted E
Slide 19: Reconciliation of Non-GAAP Financial Measures to GAAP (Cont.)
Reconciliation of Non-GAAP Financial Measures to GAAP (Cont.) Use of Non-GAAP Financial Measures (Cont.) In addition, the Company uses return on average tangible equity (ROATE), which is a supplemental measure of performance that is not required by, or presented in accordance with, GAAP, to monitor
Slide 20: Najim Mostamand, CFA, VP, Investor Relations
Najim Mostamand, CFA VP, Investor Relations (757) 431-7913 IR@pragroup.com IR.PRAGROUP.COM