Slide 1: Q2 2022 Conference Call Presentation
Q2 2022 CONFERENCE CALL PRESENTATION 1
Slide 2: 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 uncertainties and risks, some o
Slide 3: Q2 2022 Highlights
Q2 2022 HIGHLIGHTS Global cash collections of $444 million Net income attributable to PRA Group of $36 million Portfolio purchases of $231 million Repurchased $35 million of common stock 3
Slide 4: Global Operations Show Strong Productivity
GLOBAL OPERATIONS SHOW STRONG PRODUCTIVITY Since Q2 2019, our cash efficiency ratio has improved 90 basis points Significant growth in digital Continue to leverage data and analytics Improved cash collected per hour paid in the U.S. by more than 60% versus Q2 2019 Portfolio investments helped drive
Slide 5: Committed to Continue Growing in Australia
COMMITTED TO CONTINUE GROWING IN AUSTRALIA Large number of sellers Operation fully running & ready to scale Long term focus with a disciplined investment approach 5
Slide 6: Portfolio Investments
PORTFOLIO INVESTMENTS Q2 2022 total portfolio purchases of $231 million Invested $106 million in the Americas, with similar supply constraints as last two years Invested $125 million in Europe, with a large deal in Northern Europe 6
Slide 7: U.S. Card Balances Continue to Build, Loss Rates Inching Up
U.S. CARD BALANCES CONTINUE TO BUILD, LOSS RATES INCHING UP LATEST COMMENTARY SUPPORTS NORMALIZATION OF SUPPLY 7
Slide 8: U.S. Savings Rate Continues to Decline
U.S. SAVINGS RATE CONTINUES TO DECLINE 5.1% AS OF JUNE 2022 REPRESENTS LOWEST LEVEL SINCE MID-2009 8
Slide 9: U.S. Delinquency Rates on Credit Cards Increasing
U.S. DELINQUENCY RATES ON CREDIT CARDS INCREASING MORE PREVALENT IN CARD ISSUERS WITH A LARGER PERCENTAGE OF SUBPRIME ACCOUNTS 9
Slide 10: Economic Data Suggest More Supply Is on the Way
ECONOMIC DATA SUGGEST MORE SUPPLY IS ON THE WAY Higher Higher Higher Higher Higher Lower More Supply Consumer Credit Card Delinquency Charge-off Inflation Savings for PRA Spending Balances Rates Rates • Inflation in U.S. is at a • Q2 2022 personal • U.S. savings rate as a • Q2 2022 credit card • Del
Slide 11: Financial Results
FINANCIAL RESULTS ($ in millions, except per share results) Q2 2021 vs Q2 2022 Total Revenues Operating Expenses -10% -4% $286 $258 $181 $175 Q2 2021 Q2 2022 Q2 2021 Q2 2022 Net Income Attributable Diluted Earnings to PRA Group Per Share -35% -25% $56 $1.22 $36 $0.91 Q2 2021 Q2 2022 Q2 2021 Q2 2022
Slide 12: Cash Collections
CASH COLLECTIONS ($ in millions) Second Quarter 2021 Second Quarter 2022 Europe Europe Insolvency, Insolvency, $23.6 $22.9 Europe Core, $157.6 Europe Core, $142.5 Americas & Americas & Australia Core, Australia Core, $244.4 $324.8 Americas Insolvency, $37.8 Americas Insolvency, $34.3 12
Slide 13: Cash Efficiency Ratio Remains High
CASH EFFICIENCY RATIO REMAINS HIGH DESPITE LOWER CASH COLLECTIONS (Cash efficiency ratio = (cash receipts – operating expenses)/cash receipts) Cash Efficiency Ratio 65.3% 64.5% 61.3% 59.9% 58.0% 2018 2019 2020 2021 Q2 2022 13
Slide 14: ERC Is Diversified With 52% in Europe and 41% in U.S.
ERC IS DIVERSIFIED WITH 52% IN EUROPE AND 41% IN U.S. ~$300 MILLION FX IMPACT COMPARED TO Q1 2022 ($ in millions) as of June 30, 2021 as of June 30, 2022 Southern Southern Other Europe, $159 Other Europe, $134 Americas and Americas and Australia, $294 Australia, $436 Northern Europe, $604 Northern E
Slide 15: Strong and Conservative Capital Structure
STRONG AND CONSERVATIVE CAPITAL STRUCTURE ($ in millions) Total Borrowings Debt to Adjusted EBITDA * $2,700 2.9 $2,609 $2,600 2.7 $2,500 $2,482 2.5 $2,400 2.3 $2,300 2.03x 2.1 $2,200 1.89x 1.9 $2,100 1.7 $2,000 1.5 December 31, 2021 June 30, 2022 $1.6 billion available capacity under credit faciliti
Slide 16: Share Repurchase Program
SHARE REPURCHASE PROGRAM Repurchased $35 million, or 808 thousand shares of our common stock Repurchased 14% of outstanding common shares since we began buying back shares in 2021 $93 million remains in our share repurchase authorization 16
Slide 17: Key Takeaways
KEY TAKEAWAYS Delivered another quarter of solid results Economic signs pointing to more supply in coming months We are ready with an efficient operation & access to capital 17
Slide 18: Q&A
Q&A 18
Slide 19: Reconciliation of Non-GAAP Financial Measure to GAAP
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP Use of Non-GAAP Financial Measures PRA Group, Inc. reports financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management uses certain non-GAAP financial measures, including Adjusted EBITDA, internal