Pra Group, Inc. · NASDAQ:PRAA
Pra — Sidoti Virtual Small-Cap Conference December 2024
20 slides from Pra's conference presentation, December 2024
Slide 1: Sidoti Virtual Small-Cap Conference
December 2024 Sidoti Virtual Small-Cap Conference A Global Leader in Acquiring and Collecting Nonperforming Loans (NPLs)
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: Seasoned Management Team
Seasoned Management Team Today’s Presenters PRA Management Team ✓ Vik appointed CEO in March 2023 (Board 40+ 25+ member since 2015) ✓ Revamped senior leadership team (80% is new to role or PRA) ✓ Seasoned financial services leaders with deep experience ✓ Operational and strategic thought leadership
Slide 4: PRA at a Glance
PRA at a Glance One of the Largest NPL Players with a 25+ Year Track Record & Global Presence We Return Capital to Creditors, Serving as a Core Part of the Key Statistics Consumer Financial Ecosystem Asset Types: ▪ Credit Cards Creditor extends 18 Consumers become 25+ ▪ Personal Loans credit to cons
Slide 5: Business Overview
Business Overview Purchase Portfolios at Attractive Returns & Collect as Efficiently As Possible The Collections Journey Q3 YTD 2024 Core Cash Collections by Channel and Geography1 Underwrite Assess Collect & Purchase (ongoing) • Leverage deep • Determine • Execute on seller ability to pay collectio
Slide 6: Strong Track Record of Profitability
Strong Track Record of Profitability Rebounding This Year from a Challenging 2023 and Targeting Growth in 2025 $ in millions Net Income/(Loss) Attributable to PRA Group, Inc. Global Financial Crisis1 COVID-192 • 2023 profitability impacted by: Low portfolio supply resulting from COVID-19 pandemic
Slide 7: PRA Investment Thesis
PRA Investment Thesis External and Internal Dynamics Support Growth in Shareholder Value Favorable Differentiated U.S. Improving Industry European Transformation Financial Dynamics Business Well Underway Profile 7 Nasdaq: PRAA
Slide 8: Favorable Industry Dynamics
Favorable Industry Dynamics $ in billions U.S. Credit Card Balances and Charge-Off Rates • Strong U.S. portfolio supply • Growing credit card balances $1,200 +30% 10% • Elevated charge-off rates $1,069 $1,000 8% • Steady European portfolio supply $825 $800 • Favorable competitive dynamics 6% $600 4.
Slide 9: PRA Europe
PRA Europe A Growing and Differentiated Business with Consistent Growth PRA Europe ERC1 $5.0 CAGR: +9% ✓ Experienced and stable management $4.0 $3.4 $3.6 $2.9 $3.2 $3.1 $3.0 $3.0 $2.4 $2.5 $2.0 $2.1 $2.0 $1.5 ✓ Diversified presence across 13 countries $1.0 $0.0 2014 2015 2016 2017 2018 2019 2020 202
Slide 10: Transformation in U.S. Business Is Well Underway, Supported by Three Pillars
Transformation in U.S. Business Is Well Underway, Supported by Three Pillars 1 Optimizing Investments Increase ERC and portfolio returns Enhanced Profitability Operational Execution ✓ Higher cash collections 2 Maximize cash collected per dollar invested ✓ Lower marginal costs ✓ Higher returns on new
Slide 11: Optimizing Investments
1 Optimizing Investments Capitalizing on Strong U.S. Supply & Attractive Pricing Globally $ in millions Quarterly Investments Year-to-Date Investments2 $975 Americas and Australia Core PPM1 increased from 1.75x as of $887 3/31/23 to 2.10x as of 9/30/24 $869 $771 $379 $350 $328 $615 $311 $562 $288 $2
Slide 12: Operational Execution
Operational Execution 2 Enhancing Legal Channel Processes to Drive Higher Cash Collections $ in millions Stages of the U.S. Legal Collections Process U.S. Legal Cash Collections 1 2 5 Account Pre-litigation selection for and attorney Post-judgment +51% legal eligibility placement enforcement $96 $98
Slide 13: Managing Expenses
3 Managing Expenses Reducing Marginal Costs Through Offshoring and Call Center Right-Sizing 6 U.S. Call Centers → 3 by Mid-2025 Third-Party Offshore Collectors as % of Total Collectors Supporting U.S. Collections Onshore Collectors – ~900 (75%) 50% 25% 3 hybrid call centers (in-office + work-from-ho
Slide 14: Strong Capital Structure
Strong Capital Structure Well-Positioned to Continue Capitalizing on Strong Portfolio Supply $ in millions Pro Forma Debt Maturity Profile1 • Funded through a combination of bank debt and bonds • Significant access to capital as of $1,820 September 30, 2024 • $3.1 billion of committed bank capital •
Slide 15: Improving Financial Profile
Improving Financial Profile Returning to Growth and Consistent Profitability $ in millions, unless stated otherwise Portfolio Purchases ERC1 +22% +12% $7.3 $379 $350 $6.4 $6.5 $6.8 $5.7 $5.7 $5.9 $6.0 $328 $311 $5.3 $288 $285 $230 $246 $183 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 9/30 12/31 3/31 6/30 9/30 12/31
Slide 16: Financial Outlook
Financial Outlook On Track to Deliver 2024 Targets and Accelerating Progress in 2025 2024 TARGETS 2025 TARGETS Portfolio • Strong portfolio investments • $1 billion+ Purchases • ~$1.4 billion Cash Collections • Double digit growth • 8%-10% growth Cash • Modest expense growth • 60%+ Efficiency Ratio1
Slide 17: Well-Positioned for the Future
Well-Positioned for the Future Global Strong Capital 3 Pillar Plan Favorable Diversification Structure & for Optimizing Industry with Strong Liquidity with U.S. Dynamics European Improving Profitability Franchise Financials Established Platform with Clear Opportunities for Growth 17 Nasdaq: PRAA
Slide 18: Appendix
Appendix 18 Nasdaq: PRAA
Slide 19: Reconciliation of Non-GAAP Financial Measures to GAAP
Reconciliation of Non-GAAP Financial Measures to GAAP Use of Non-GAAP Financial Measures PRA Group, Inc. reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management uses certain non-GAAP financial measures, including return on average ta
Slide 20: Najim Mostamand, CFA
Najim Mostamand, CFA VP, Investor Relations (757) 431-7913 IR@pragroup.com PRAGROUP.COM
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