Altisource Portfolio Solutions S.a. · NASDAQ:ASPS
Altisource Portfolio Solutions — Investor Presentation (September 2013)
33 slides from Altisource Portfolio Solutions's investor presentation, Sep 23, 2013
Slide 1: Investor Presentation September / October 2013
Investor Presentation September / October 2013 Altisource Altisource, the Altisource logo, the “REAL” family of trademarks and service marks, and certain other marks identified herein are trademarks or service marks if Altisource Solutions S.a r.l. or its subsiduaries. These marks may be registered
Slide 2: Forward-looking Statements
This presentation contains forward-looking statements. These statements may be identified by words such as “anticipate,” “intend,” “expect,” “may,” “could,” “should,” “would,” “plan,” “estimate,” “seek,” “believe” and similar expressions. We caution that forward-looking statements are qualified to c
Slide 3: Table of Contents
Company Overview 4 Equator Acquisition 14 Financial Performance 18 Growth Initiatives 21 Understanding Altisource’s Service Revenue 25 Share Repurchase Program 32 Table of Contents Altisource Thinking Ahead. Delivering Today.
Slide 4: Company Overview
Altisource’ Company Overview Thinking Ahead. Delivering Today:
Slide 5: Altisource Separated from Ocwen in August 2009
Altisource Separated from Ocwen in August 2009 Created and separated two public companies, Altisource Residential Corporation (RESI) and Altisource Asset Management Corporation (AAMC), in December 2012 Capital light business model with strong free cash flow Strong growth prospects in very large mark
Slide 6: Altisource Vision, Mission and Value Proposition
Altisource Vision Value Proposition Home buyers/Borrowers: easy, efficient and transparent marketplace to a) identify, select, buy and rent a home, b) obtain a mortgage and c) order related services Home sellers/Lenders/Vendors: easy, efficient and transparent marketplace, with high return on invest
Slide 7: Putting the Pieces of the Puzzle Together to Serve Marketplaces
Putting the Pieces of the Puzzle Together to Serve Marketplaces Large vendor network Technology to order, deliver and pay for services Affinity relationships SaaS solutions and people
Slide 8: Marketplaces
Marketplaces Home Sales Home Rentals Home Maintenance Mortgage Originations Mortgage Servicing Real Estate Marketplace Mortgage Marketplace
Slide 9: Real Estate Marketplace
Real Estate Marketplace Home Sales Home Rentals Home Maintenance Home buyers (and their agents) Home sellers (and their agents) Homeowners (and their agents) Renters (and their agents) Connecting With Homeowners (and their agents) Renters (and their agents) Service Providers Service Providers Servic
Slide 10: Mortgage Marketplace
Mortgage Marketplace Mortgage Origination Mortgage Servicing Mortgage Originators Service Providers Mortgage Servicers Service Providers Investors Title and escrow, valuation, quality control, verification of employment and income, flood certifications, etc. Servicing technology and dialogue engines
Slide 11: Distribution and Transaction Solutions Enabling the Marketplaces
Distribution and Transaction Solutions Enabling the Marketplaces Vendor selection Price discovery Order processing Fulfillment acceptance Quality control Compliance validation Vendor scoring Invoicing and payment Customer care Collections Advanced analytics Document management Rules engines and proc
Slide 12: Marketplace Example
Marketplace Example Buyers and their agents use Hubzu to bid on homes Sellers and buyers order services from service providers Transactions are conducted leveraging Sellers and their agents use Hubzu to sell homes SaaS solutions and people
Slide 13: Market Sizes
Market Sizes Real Estate Marketplace Home Sales1 5.4 million homes sold in the U.S. in the 12 months ended July 2013 for an aggregate sales price of $1.3 trillion Home Rentals2 21.3 million single family rental homes3 in the United States Home Maintenance2 76.1 million owner-occupied homes in the Un
Slide 14: Equator Acquisition
Altisource’ Equator Acquisition Thinking Ahead. Delivering Today:
Slide 15: Equator Overview
Equator Overview An industry leading marketplace and transaction solutions provider for the mortgage and real estate industries; established in 2003 Executive Team Christopher L. Saitta, co-Founder and Chief Executive Officer with 20 years experience including: eBay and Equator John A. Vella, Chief
Slide 16: Transaction Rationale
Proven core business Strong revenue growth Established marquee client base Proven technology platform Experienced management team Diversifies Altisource’s customer base Altisource’s complimentary technology solutions integrated with Equator’s EQ Workstation Altisource’s mortgage services offered thr
Slide 17: 2014 Projected Performance
2014 Projected Performance Accretive acquisition for Altisource Estimated 2014 accretion per share of $0.43 - $0.46 Earn out consideration fully tied to Adjusted EBITA growth 2014 Projected Performance excludes the benefit from diversifying Altisource’s customer base and accelerating Altisource’s re
Slide 18: Financial Performance
Altisource’ Financial Performance Thinking Ahead. Delivering Today:
Slide 19: Historical Performance
Altisource’ Historical Performance ‘Service Revenue ($ millions) ‘Operating cash flow ($ millions) ‘Operating Margin % == ‘%of Service Revenue 33% 25K 25% 2%, rroopstr? UIMaun roe rio Fru pre Maw Thinking Ahead. Delivering Toda:
Slide 20: Historical Performance
Altisource’ Historical Performance as "Netincome Attributable to Altisource ($ millions) Gilt hE Ld) % of ServiceRevenue - yoo prov fr. urna pres eS ral Proc —_ Thinking Ahead. Delivering Today®
Slide 21: Growth Initiatives
Altisource’ Growth Initiatives Thinking Ahead. Delivering Today:
Slide 22: Growth Initiatives
Growth Initiatives Expanding Hubzu to other institutions and the non-distressed home sale market Providing asset management services to the single family rental market Supporting Ocwen’s growth Marketplace: Real Estate Growing our origination related services through our access to over 11% of the U.
Slide 23: Service Revenue Scenarios: Assumptions
Service Revenue Scenarios: Assumptions Portfolio acquisition assumptions Scenario 1 Scenario 2 Annual non-GSE portfolio acquisitions by Ocwen in 2014, 2015 and 2016 (no non-GSE portfolio acquisitions in 2017) None $100 billion This presentation was first provided in Q1’13. It reflects all servicing
Slide 24: Service Revenue Scenarios
Service Revenue Scenarios Creating a stable, long-term revenue stream for Altisource as delinquency rates decline. The scenarios are for illustrative purposes only and do not represent a forecast Note: The above scenarios do not assume any reinvestment of the cash generated from the businesses Milli
Slide 25: Service Revenue for the 2nd Quarter of 2013
Service Revenue for the 2nd Quarter of 2013 285k delinquent loans x $371 service revenue per delinquent loan per quarter (see Slide 27) 12k delinquent loans x $240 service revenue per delinquent loan per quarter (see Slide 27) See slide 28, Note 4 See slides 27 and 29 $18.9 1,042k loans x $13 / loan
Slide 26: Operating Metrics
Operating Metrics * - not previously provided Default Related Services: Default related Service revenue per Non-GSE delinquent loan per quarter Average number of delinquent Non-GSE loans serviced by Ocwen on REALServicing (in thousands) Average number of Non-GSE loans serviced by Ocwen on REALServic
Slide 27: Operating Metrics Notes
Operating Metrics 1. Notes: Default related Service revenue: 1. Service revenue per loan is measured for the quarter 2. Average loans serviced for Q2’13 is provisional and subject to change 3. Service revenue generated from certain services are not recorded seperately for non-GSE and GSE loans. For
Slide 28: Originations Related Service Revenue
Mortgage Services and Technology Services – Originations Related Service Revenue Total $2.8bn Estimated U.S. loan originations – 2Q 2013 $ 494 billion Lenders One and Ocwen share of U.S. loan origination market – 2Q 2013 11.4% Estimated loans originated by $ 56 billion Lenders One and Ocwen – 2Q 201
Slide 29: Source of Future Service Revenue - Loans Remaining to be Boarded
Source of Future Service Revenue - Loans Remaining to be Boarded on REALServicing Technology Notes: 1 Includes loans subserviced by Ocwen, some of which may be service-transferred to other servicers 2. An estimated 25% – 30% of the private label securities are 2nd lien loans of which 2% - 7% are del
Slide 30: Growth Initiative Metrics
Growth Initiative Metrics Originations Related Services: Service revenue (in millions) Customers with a signed service agreement Lenders One Membership Estimated U.S. origination market share for Lenders One members Hubzu: Service revenue (in millions) Number of REO sold Residential Asset Business:
Slide 31: Share Repurchase Program
Altisource’ Share Repurchase Program Thinking Ahead. Delivering Today:
Slide 32: Stock Repurchase Program
Stock Repurchase Program Company Held Stock Stock Options As of December 31, 2012 3,496,998 1,985,985 3,058,309 Stock repurchased (579,191) 579,191 Stock options granted, net of forfeitures (57,875) Stock options exercised (142,977) (142,977) Restricted stock vested (3,856) As of June 30, 2013 2,917
Slide 33: About Altisource
About Altisource We are a premier marketplace and transaction solutions provider for the real estate, mortgage and consumer debt industries offering both distribution and content. We leverage proprietary business process, vendor and electronic payment management software and behavioral science based
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