Dovalue S.p.a. · MIL:DOV
Dovalue — H1 2024 Earnings Presentation
29 slides from Dovalue's earnings presentation, Aug 8, 2024
Slide 1: H1 2024 Financial Results
H1 2024 Financial Results AUGUST 8TH, 2024
Slide 2: Disclaimer
DISCLAIMER IMPORTANT: You must read the following before continuing. The following applies to this document, the oral presentation of the information in this document by doValue S.p.A., its subsidiaries and affiliates (the “Company”) or any person on behalf of the Company, and any question-and-answe
Slide 3: Business Highlights
Business Highlights Titolo breaker slide Manuela Franchi Group CEO
Slide 4: H1 Business Highlights
H1 Business Highlights • EBITDA for H1 at €67m above expectations EBITDA ex NRIs €67m • Strong new business with target of annual €8bn likely to be reached leading to GBV increase New Business1 €7.5bn • Positive quarterly cash flow dynamic thanks to working capital actions Net Cash Flow Q2 • Stable
Slide 5: European NPL stock rising – 1/2
European NPL stock rising – 1/2 EU/EEA NPL stock evolution from Q4 2022 to Q1 2024 by classes (€bn) Comments • Early signs of worsening asset quality for banks began to appear in +2.6% 2023 and continuing in H1 2024: weak economic growth, rising living 350 2.9% 2.9% costs and higher rates limiting b
Slide 6: European NPL stock rising – 2/2
European NPL stock rising – 2/2 NPL stock evolution from Q4 2022 to Q1 2024 by country (€bn) Comments Banks’ total assets 2,554 Δ-4.3% • Inversion of NPL trend with a +1.5% (+€0.6bn) in Q1 2024 +1.5% • NPL secondary market EU directive under implementation: expected 45.9 46.0 43.4 increase in liquid
Slide 7: GBV intake
GBV intake GBV onboarded as of June 30th, 2024 (€m) Potential pipeline (€bn) Contribution Vs announced Targets o/w €2.7bn secondary €6.0bn €2.0bn €8.0bn mandates in Greece 37 56% 33% 12% ~50% ~77% ~57% Forward • All potential deals ongoing as portfolio 4 flows sales 3,027 0.5 • Almost all potential
Slide 8: Beyond Non-performing
Beyond Non-performing REVENUES AND MARGIN ENGINE 2 OF GROWTH NEW LINES OF BUSINESS BY BUSINESS LINE (€m, %) GRANULAR EARLY UTP PERFORMING NON BANKS Mortgage ARREARS UNSECURED brokering 33% STAGE 2 Non-NPL revenues • Company set up in Greece €8bn €300m (finThesis) NPL GBV under €700m First stage 2 €2
Slide 9: Acquisition process status
Acquisition process status August September October November COMMENTS 2 3 4 6 ▪ EGM called for the 11 Company RESERVED September, 2024 steps REVERSE EGM CAPITAL RIGHTS STOCK INCRESE FOR ISSUE SPLIT ▪ Timing of rights issue POC dependant on M&A closing and regulatory approvals 1 5 ▪ Regulatory filing
Slide 10: Financial Results
Financial Results Titolo breaker slide Davide Soffietti Group CFO
Slide 11: Financials at a glance
Financials at a glance ITEMS (*) Q2 Q2 Δ% H1 H1 Δ% COMMENTS (€m) 2024 2023 YoY 2024 2023 YoY • Reduction in gross revenues due to lower REO revenues in Spain and postponement of Gross ongoing disposal to 2H in Greece Revenues €117m €126m -7.5% €214m €226m -5.7% • Trend partly offset by in ancillary
Slide 12: GBV dynamics
GBV dynamics GBV evolution COMMENTS Positive GBV dynamic with commercial efforts yielding results and robust NPE generation from forward flow contracts +1.4% • Inflows from new clients amounting to €3.0bn: €1.7bn from Greece, €0.3bn from Italy (Luzzatti) and €1bn from Spain (primarily from Sabadell,
Slide 13: Gross Revenues
Gross Revenues Gross Revenues (€m) COMMENTS • Group • Gross revenues slightly decreasing YoY driven by lower disposals, partially offset by -5.7% higher ancillaries in Italy and Greece 226 214 • Hellenic Region 15% 33 • Overall drop in revenues by -2.7% YoY, due lo lower disposals in Greece partly 1
Slide 14: Operating Expenses
Operating Expenses Operating Expenses ex NRIs (€m) COMMENTS % of Gross Revenues • Total Operating expenses 51% 54% 55% 58% • Operating costs broadly stable in H1 2024 despite in 2023 it was positively impacted by one-off events • Overall cost discipline across the group with continuing effort in Spa
Slide 15: EBITDA ex NRIs
EBITDA ex NRIs EBITDA ex NRIs (€m) COMMENTS • Group • Results above expectations • EBITDA at €67.4m in H1 2024 (-17.5% YoY) -17.5% • Decline mainly driven by corresponding lower direct revenues and comparison and one-off positive effect from release of previous CEO’s variable compensation 82 • NRI c
Slide 16: From EBITDA to Attributable Net Income
From EBITDA to Attributable Net Income EBITDA to Net Income bridge (€m) Ex 67.4 37.1 22.5 6.9 NRI Ex NRI 31.5% 17.4% 10.5% 3.2% Margin % EBITDA Net write- Net provisions Net write-down EBIT Net financial Net result of EBT Income tax for Minorities Attributable downs on for risks & of loans & interes
Slide 17: Cash Flow
Cash Flow Q2 Q2 H1 H1 COMMENTS €m 2023 2024 2023 2024 EBITDA 49.7 40.1 79.8 65.0 • Cash flow from operations, equal to €19.6m, in H1, -€3.8m lower than LY (€23.4m) counterbalanced by -€14.8m lower EBITDA, resulting in an improved cash conversion (30.2%) mainly due to: Capex (4.0) (4.8) (5.4) (6.6) •
Slide 18: Financial Structure
Financial Structure Net Debt (€m) COMMENTS Leverage • Significant increase in cash position in Q2 (+€44m QoQ) 2.7x 3.0x 2.9x • Net leverage under control and stable at 2.9x despite lower LTM EBITDA • Significant cash-in in April related to Arbitration with Altamira Asset Management Holding (€22.7m)
Slide 19: Regional Performance
Regional Performance H1 2024 Hellenic Group Region Italy Spain GBV €118bn €38bn €68bn €12bn Collections €2.1bn €0.8bn €0.8bn €0.5bn TMR 4.2% 6.1% 2.4% 8.8% Gross Revenues (1) €214m €108m €80m €25m €(0.7)m EBITDA ex NRIs (1) €67m €53m €21m (2) n.m. EBITDA ex NRIs 31.5% 49.3% 26.8% (2) n.m. margin (1)
Slide 20: Guidance update
Guidance update Titolo breaker slide Davide Soffietti Group CFO
Slide 21: Guidance for 2024 and impact of Gardant transaction
Guidance for 2024 and impact of Gardant of transaction 2024 2024 UPDATED COMMENTS GARDANT GUIDANCE1 Gross revenues €460-480m €135m • Revenues adjusted for potential shift in closing of secondary sales and soft collection environment • GBV exceeding expectations for H1 and leading to confirmation of
Slide 22: Targets post Gardant
Targets post Gardant 2026 2026 CMD POST GARDANT Comments • EBITDA including actual synergies estimates for 2026 EBITDA ex NRIs €185-195 €240-255 • Guardant business contributing to improved EBITDA cash conversion thanks to low capex requirements (also considering economy of scale with doValue group)
Slide 23: Appendix
Appendix Titolo breaker slide
Slide 24: Condensed Income Statement
Condensed Income Statement (€/000) 6/30/2024 6/30/2023 Change € Change % Servicing Revenues: 184,328 202,961 (18,633) (9.2)% o/w: NPE revenues 160,525 175,294 (14,769) (8.4)% o/w: REO revenues 23,803 27,667 (3,864) (14.0)% Co-investment revenues 775 748 27 3.6% Ancillary and other revenues 31,448 25
Slide 25: Condensed Balance Sheet
Condensed Balance Sheet (€/000) 6/30/2024 12/31/2023 Change € Change % Cash and liquid securities 110,397 112,376 (1,979) (1.8)% Financial assets 43,599 46,167 (2,568) (5.6)% Property, plant and equipment 45,094 48,678 (3,584) (7.4)% Intangible assets 459,584 473,784 (14,200) (3.0)% Tax assets 86,96
Slide 26: Condensed Cash Flow
Condensed Cash Flow (€/000) 6/30/2024 6/30/2023 12/31/2023 EBITDA 65,043 79,834 175,345 Capex (6,647) (5,444) (21,361) EBITDA-Capex 58,396 74,390 153,984 as % of EBITDA 90% 93% 88% Adjustment for accrual on share-based incentive (518) (5,267) (5,853) system payments Changes in Net Working Capital (N
Slide 27: Glossary
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 Agreement with commercial bank related to the management of all future NPL generation by the bank for number of years, customary feature of
Slide 28: Disclaimer
Disclaimer This disclaimer applies to all documents and information provided herein and to any verbal or written comments of person presenting them by doValue S.pA. and its affiliates (collectively, the “Company”) or any person on behalf of the Company, and any question and answer session that follo
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