Pra Group, Inc. · NASDAQ:PRAA
Pra — Investor Presentation (September 2015)
19 slides from Pra's investor presentation, Sep 10, 2015
Slide 1: Investor Presentation September 2015
Investor Presentation September 2015
Slide 2: About Forward-Looking Statements
Statements herein, 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 uncertainties and risks, some of which are no
Slide 3: Company Overview
Company Overview What We Do Purchase defaulted receivables and manage collection efforts Purchase insolvent consumer accounts, both secured and unsecured Provide fee-based services 1 2 3 What Sets Us Apart Analytical and operational excellence: deep data set, advanced analytics and scoring Track rec
Slide 4: Today's PRA Group – A Global Debt Buyer
Today’s PRA Group – A Global Debt Buyer Own portfolios in 17 countries 3,800 employees worldwide Invested $1.47 billion in 2014 including the Aktiv Kapital acquisition $1.4 billion in cash collections in 2014 4
Slide 5: Successfully Managed Through Multiple Economic Cycles
Successfully Managed Through Multiple Economic Cycles $17 $31 $53 $81 $120 $161 $205 $261 $298 $383 $433 $592 $762 $971 $1,214 $1,444 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Cash Receipts ($ in millions) U.S. Recession U.S. Recession 5
Slide 6: Second Quarter 2015 Results
Second Quarter 2015 Results Q2 2015 Q2 2014(a) Cash Collections $390 million $319 million 22% % change Revenues $237 million $197 million 20% Net Income $51.4 million $43.8 million 17% Diluted EPS $1.06 $0.87 22% Investment $208 million $109 million 91% Income from Operations $88.9 million $76.5 mil
Slide 7: Allowance Charges are Normal Course of Business
Allowance Charges are Normal Course of Business 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% $0 $2 $4 $6 $8 $10 $12 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014
Slide 8: Focus is on Net IRR, Not Gross Cash Multiple
Goal is to generate more income for each $1 of cash collected Utilize analytics and activity costing to produce ROI driven strategies Larger gross cash multiple does not necessarily equate to increased profitability Focus is on Net IRR, Not Gross Cash Multiple
Slide 9: Initial Vintage Purchase Price Multiples Are Relatively Consistent
Initial Vintage Purchase Price Multiples Are Relatively Consistent 9 221% 225% 227% 220% 252% 247% 245% 226% 211% 204% 207% 31% 31% 31% 26% 22% 25% 25% 24% 26% 25% 23% 10% 20% 30% 40% 50% 60% 0% 50% 100% 150% 200% 250% 300% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 YTD 2015 Initial Vintage P
Slide 10: Purchase Price Multiples Have Tended to Expand Over Time
Purchase Price Multiples Have Tended to Expand Over Time 10 Americas Core Portfolio Purchase Price Multiples 256% 219% 248% 225% 361% 354% 340% 279% 255% 218% 207% 0% 50% 100% 150% 200% 250% 300% 350% 400% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 YTD 2015 Initial Vintage Purchase Price Mult
Slide 11: Purchase Price Multiples Have Tended to Expand Over Time
175% 225% 275% 325% 375% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Purchase Price Multiples Have Tended to Expand Over Time 11 Vintages Purchase Price Multiple by Year Americas Core Portfolio Purchase Price Multiples
Slide 12: Investment Has Grown Consistently
Investment Has Grown Consistently $62 $61 $150 $112 $264 $280 $289 $367 $408 $542 $657 $1,468 ~$621 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Q2 2015 (a) Includes finance receivables associated with the Mackenzie Hall acquisition (b) Includes finance receivables associated with the
Slide 13: Estimated Remaining Collections Have Grown Consistently
Estimated Remaining Collections Have Grown Consistently $0 $1,000 $2,000 $3,000 $4,000 $5,000 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Q2 2015 $557M Insolvency $4,191M Core(a) ($ in millions) (a) Includes the estimated remaining collections associated with investment in the securi
Slide 14: ERC is Diversified
United States $2,846.1 British Isles $530.6 Central Europe $553.5 Southern Europe $370.0 Northern Europe $379.0 Other Americas $68.4 ERC is Diversified ($ in millions) (a) (a) Includes the estimated remaining collections associated with investment in the securitized fund in Poland 14
Slide 15: Balance Sheet Provides Flexibility for Capital Needs
Balance Sheet Provides Flexibility for Capital Needs 1.70 2.24 2.40 3.71 4.74 6.76 1.72 6.17 2.15 4.52 3.07 7.56 PRA Company A Company B Company C Company D Company E Debt to Shareholders' Equity - Adjusted Debt to TTM EBITDA - Adjusted (a) (a) A reconciliation of these non-GAAP number to GAAP can b
Slide 16: Opportunities for Growth
Opportunities for Growth As U.S. consumer lending thaws and sellers return to the market - well positioned to capture our market share of receivable sales Industry adapting to OCC guidelines on receivable sales creating barriers to entry in U.S. Increase market share in select countries where
Slide 17: ciate Ri ah
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Slide 18: GAAP to non-GAAP Reconciliation
GAAP to non-GAAP Reconciliation Use of Non-GAAP Financial Measures Management believes that the presentation of certain financial information in this presentation excluding the costs associated with the Aktiv Kapital acquisition and foreign exchange losses that were recorded during the three months
Slide 19: GAAP to non-GAAP Reconciliation
GAAP to non-GAAP Reconciliation Use of Non-GAAP Financial Measures Management believes that the presentation of certain non-GAAP financial information in this presentation is useful to investors because it better reflects our balance sheet, performance and comparability of the Company’s ongoing oper