Pra Group, Inc. · NASDAQ:PRAA
Pra — Investor Presentation (November 2015)
22 slides from Pra's investor presentation, Nov 16, 2015
Slide 1: Investor Presentation November 2015
Investor Presentation November 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 nonperforming loans 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 recor
Slide 4: Today's PRA Group – A Global Debt Buyer
Today’s PRA Group – A Global Debt Buyer Own portfolios in 17 countries 3,700 employees worldwide Invested $1.47 billion in 2014 including the Aktiv Kapital acquisition $1.4 billion in cash collections in 2014 4 Estimated remaining collections of $4.9 billion at Sept. 30, 2015
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 $1,170 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 YTD Q3 2015 Cash Receipts ($ in millions) U.S. Recession U.S. Recession 5
Slide 6: Third Quarter 2015 Results
Third Quarter 2015 Results(a) Q3 2015 Q3 2014(b) Cash Collections $392 million $373 million 5% % change Revenues $235 million $239 million (2%) Net Income $48.0 million $56.1 million (14%) Diluted EPS $0.99 $1.11 (11%) Investment $345 million $891 million (61%) Income from Operations $87.0 million $
Slide 7: Allowance Charges are Normal Course of Business
Allowance Charges are Normal Course of Business Remain in‐line with historical average as a % of Net Finance Receivables 7 Excludes allowance reversals 0.6% 0.8% 0.7% 1.7% 1.1% 0.7% 1.3% 1.4% 0.9% 0.8% 0.9% 0.7% 0.6% 0.3% 0.2% 0.5% 0.3% 0.3% 0.3% 0.4%0.4% 0.0% 0.1% 0.2% 0.1%0.1% 0.2% 0.1%0.1% 0.2% 0
Slide 8: Actual Results Have Expanded Multiples Over Time – Americas Core
Actual Results Have Expanded Multiples Over Time 8 Americas Core Portfolio Purchase Price Multiples 256% 219% 248% 227% 361% 353% 340% 279% 269% 218% 203% 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 Multiple Curr
Slide 9: Actual Results Have Expanded Multiples Over Time – Americas Insolvency
Actual Results Have Expanded Multiples Over Time 9 Americas Insolvency Portfolio Purchase Price Multiples 150% 183% 136% 156% 305% 266% 196% 145% 143% 129% 127% 0% 50% 100% 150% 200% 250% 300% 350% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 YTD 2015 Initial Vintage Purchase Price Multiple Cur
Slide 10: Recent Performance of Americas Core Portfolio
Recent Performance of Americas Core Portfolio $‐ $50 $100 $150 $200 $250 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 20014 Q1 2015 Q2 2015 Q3 2015 Original Underwritten Projected Cash Actual Cash 10 ($ in millions)
Slide 11: Recent Performance of Americas Insolvency Portfolio
Recent Performance of Americas Insolvency Portfolio $‐ $20 $40 $60 $80 $100 $120 $140 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Orginial Underwritten Projected Cash Actual Cash 11 ($ in millions)
Slide 12: Recent Performance of Europe Portfolio
Recent Performance of Europe Portfolio 12 ($ in millions) $0 $20 $40 $60 $80 $100 $120 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 Original Underwritten Projected Cash Actual Cash Actual Cash ‐ Constant Currency
Slide 13: Investment Has Grown Consistently
Investment Has Grown Consistently $62 $61 $150 $112 $264 $280 $289 $367 $408 $542 $657 $1,468 $766 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Q3 2015 (a) Includes finance receivables associated with the Mackenzie Hall acquisition (b) Includes finance receivables associated with the
Slide 14: Estimated Remaining Collections Have Grown Robustly
Estimated Remaining Collections Have Grown Robustly $0 $1,000 $2,000 $3,000 $4,000 $5,000 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Q3 2015 $504M Insolvency $4,441M Core(a) ($ in millions) (a) Includes the estimated remaining collections associated with investment in the securitize
Slide 15: ERC is Diversified – $2.1B Internationally
United States $2,827.2 British Isles $807.4 Central Europe $549.4 Southern Europe $347.7 Nothern Europe $345.5 Other Americas $68.4 ERC is Diversified ‐ $2.1B Internationally ($ in millions) (a) (a) Includes the estimated remaining collections associated with investment in the securitized fund in Po
Slide 16: Balance Sheet Provides Flexibility for Capital Needs
Balance Sheet Provides Flexibility for Capital Needs 1.85 2.07 2.44 3.71 4.76 6.62 1.90 1.94 6.42 4.52 3.24 6.78 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 17: Valuation Versus European Debt Buyers
Valuation Versus European Debt Buyers 0.67 0.65 0.64 0.59 Cash EBITDA/Cash Collections PRA Group Company A Company B Company C 3.6 7.7 6.9 8.6 Enterprise Value/Cash EBITDA PRA Group Company A Company B Company C (a) Cash EBITDA is defined as EBITDA plus portfolio amortization 9 17.3 21.9 12.5 Price/
Slide 18: Opportunities for Growth
Opportunities for Growth Regulation has created barriers to entry in U.S. Normalized supply in the U.S. Increase market share with an international focus Identify acquisition and organic growth opportunities in both new geographies and products 18
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Slide 20: GAAP to non-GAAP Reconciliation
GAAP to non‐GAAP Reconciliation Use of Non‐GAAP Financial Measures PRA Group, Inc. reports financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, the Company believes certain non‐GAAP performance measures and ratios used in managing the business may provi
Slide 21: GAAP to non-GAAP Reconciliation
GAAP to non‐GAAP Reconciliation Use of Non‐GAAP Financial Measures PRA Group, Inc. reports financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, the Company believes certain non‐GAAP performance measures and ratios used in managing the business may provi
Slide 22: GAAP to non-GAAP Reconciliation
GAAP to non‐GAAP Reconciliation 22 Use of Non‐GAAP Financial Measures PRA Group, Inc. reports financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, the Company believes certain non‐GAAP performance measures and ratios used in managing the business may pr