Slide 1: PRA Group Q4 and FY 2023 Conference Call Presentation
PRA Group Q4 and FY 2023 Conference Call Presentation Nasdaq: PRAA
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: Our Imperatives
Our Imperatives Rebuild Profitability and Shareholder Value Stabilize Drive the Performance Turnaround Executing with urgency 2 Nasdaq: PRAA
Slide 4: Portfolio Investments Stable For Q4 and Up 36% for 2023
Portfolio Investments Stable For Q4 and Up 36% for 2023 Q4 U.S. Portfolio Investments Up 61% Year-over-Year, Driven by Improving Supply $ in millions Portfolio Purchases $450 +36% $400 $392 $1,154 $350 $850 $328 $311 $300 $288 $285 $220 $79 $250 $231 $144 $230 $220 $202 $123 $200 $161 $183 $159 $98
Slide 5: The Two Components of Portfolio Revenue
The Two Components of Portfolio Revenue $ in millions Portfolio Income Changes in Expected Recoveries $300 Portfolio Income Growing YoY Last Two Quarters Changes in Expected Recoveries Skew Positive Over Time $80 $262 $64 $60 $57 $248 $50 $48 $250 $240 $233 $232 $44 +5% $40 $40 $37 $219 $34 +2% $30
Slide 6: Q4 and Full Year 2023 Financial Results
Q4 and Full Year 2023 Financial Results $ in millions, except per share amounts Q4 2022 vs Q4 2023 2022 vs 2023 Total Revenues Portfolio Income Operating Expenses Total Revenues Portfolio Income Operating Expenses -1% +5% +8% -2% +3% -17% $223 $221 $185 $195 $164 $176 $967 $772 $757 $681 $702 $803 Q
Slide 7: Cash Collections Increased 5% Year-Over-Year
Cash Collections Increased 5% Year-Over-Year $ in millions Cash Collections $600 -17% $556 -13% -18% -16% -14% -6% +2% +5% $544 $500 $488 $474 $481 $444 $412 $411 $419 $420 $410 $400 $392 $383 $363 Americas and Australia: $314 $295 $305 $300 $279 • 5% increase driven primarily $258 $254 $247 $252 $2
Slide 8: ERC Increased 12% Year-over-Year
ERC Increased 12% Year-over-Year ERC increased $423 million compared to prior quarter, with U.S. ERC up $147 million $ in billions ERC $8.0 +12% $7.0 $6.4 $6.1 $6.1 $6.1 $6.0 $6.0 $6.0 $0.3 $5.7 $5.9 $0.6 $0.3 $0.4 $0.4 $5.6 $5.7 $5.7 $0.4 $5.3 $0.6 $0.6 $0.4 $0.5 $0.5 $5.0 $0.5 $2.8 $2.7 $2.5 $2.4
Slide 9: Strong Capital Structure With Longstanding Bank Relationships
Strong Capital Structure With Longstanding Bank Relationships $ in millions Total Borrowings and Debt to Adjusted EBITDA1 Debt Maturity Profile $2,914 4.5 (Amount Outstanding) $3,000 $2,495 4 $2,500 3.5 $2,000 $1,342 2.89x 3 North $1,500 American RCF $1,000 2.25x 2.5 $500 2 UK RCF $539 $398 $350 $0
Slide 10: Our Imperatives
Our Imperatives Rebuild Profitability and Shareholder Value Stabilize Drive the Performance Turnaround Executing with urgency 9 Nasdaq: PRAA
Slide 11: Roadmap to Enhanced Profitability
Roadmap to Enhanced Profitability Value Creation from Higher Cash Collections While Reducing Marginal Costs Operational Expense Enhanced ERC & Pricing + Effectiveness + Management = Profitability Grow the portfolio with Maximize cash collected Optimize cost structure discipline per dollar invested
Slide 12: Capitalizing on Strong U.S. Supply and Improving Prices Globally
Capitalizing on Strong U.S. Supply and Improving Prices Globally $ in millions ERC and Pricing $250 4% $250 $220 $200 $172 3% $200 $161 $146 $141 $144 $150 $150 $125 $123 $111 $109 2% $106 $98 Avg: $91 $96 $97 $88 $90 $100 $79 $78 $100 $73 $79 $111 $65 $61 1% $48 $50 $50 $0 0% $0 Q1 Q2 Q3 Q4 Q1 Q2 Q
Slide 13: Optimizing Operational Effectiveness
Optimizing Operational Effectiveness Enhancements Driving Improved Cash Generation Operational Effectiveness Post-Judgment Legal Call Center Initiatives Optimization Addressed gaps in inventory Enhanced multiple internal management processes Optimized dialer strategies Established new third-
Slide 14: Driving Efficiencies and Cost Savings
Driving Efficiencies and Cost Savings Expenses Expected to Grow Slower Than Cash Collections, Driving Cash Efficiency in the Low 60% Range Expense Management Restructure & Eliminate Rebalance Resources to Reexamine & Simplify Non-Essential Leverage Lower-Cost Processes Processes/Costs Locations U.
Slide 15: 2024 Outlook
2024 Outlook Return to Meaningful Profitability and Substantially Improved Results 6-8% Double-digit Strong 60%+ cash return on growth in Modest portfolio efficiency average cash expense investment ratio1 in tangible collections growth levels 2024 equity2 in in 2024 2024 • Largely due to increase in
Slide 16: Q&A
Q&A 15 Nasdaq: PRAA
Slide 17: 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 Adjusted EBITDA, int
Slide 18: Najim Mostamand, CFA, VP, Investor Relations
Najim Mostamand, CFA VP, Investor Relations (757) 431-7913 IR@pragroup.com IR.PRAGROUP.COM