Pra Group, Inc. · NASDAQ:PRAA
Pra — Investor Presentation (May 2025)
39 slides from Pra's investor presentation, May 2025
Slide 1: May 2025 Investor Presentation
May 2025 Investor Presentation A Global Leader in Acquiring and Collecting Nonperforming Loans
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: Agenda
Agenda Company Overview Market Opportunity Growth Strategy Financial Performance Appendix 2 Nasdaq: PRAA
Slide 4: Who We Are
Who We Are A Global Leader in Acquiring and Collecting Nonperforming Loans 25+ $1.5B Europe ERC of $3.9B Years in Business LTM Portfolio Americas & Australia ERC Purchases of $3.9B ~3,000 $1.9B Employees LTM Cash Worldwide Collections 18 $7.8B Headquartered in Countries Estimated Remaining Norfolk,
Slide 5: Our Mission & Core Values
Our Mission & Core Values OUR MISSION To deliver nonperforming loan solutions that drive success through a long-term focus and customer care to always doing for our actions in our in every because we our best work interactions situation work together with each other as a team 4 Nasdaq: PRAA
Slide 6: Business Overview
Business Overview Working with Consumers to Collect on Nonperforming Loans Purchased at a Discount Assets We Purchase: Creditor1 extends credit Steps 2-3: • Credit Cards to consumers • Creditor’s lending Consumers become delinquent • Auto Loans behavior is affected • Personal Loans • Consumer’s cred
Slide 7: Business Overview (Cont.)
Business Overview (Cont.) Purchase Portfolios at Attractive Returns & Collect Efficiently The Collections Journey Q1 2025 Core Cash Collections by Channel and Geography1 Underwrite Assess Collect & Purchase (ongoing) • Leverage deep • Determine • Execute on seller consumer collections activity relat
Slide 8: One of the Largest and Most Established Debt Buyers
One of the Largest and Most Established Debt Buyers Disciplined Organic and Inorganic Growth Through Multiple Credit Cycles 2004 2008 2023 2025 1996 Diversified U.S. Navigated Vik Atal Martin Sjolund Founded by portfolio into Global Financial 2014 2018 appointed CEO, appointed CEO, Steve acquisition
Slide 9: Strong Track Record Through Credit & Economic Cycles
Strong Track Record Through Credit & Economic Cycles Higher Portfolio Supply, Improved Pricing, and Resilient Collections $ in millions Global Financial Crisis1 COVID-192 $1,408 $1,454 $1,241 $1,154 $1,109 $1,118 $964 $905 $905 $972 $850 $657 $705 $367 $408 $470 Portfolio $264 $280 $289 $112 Purchas
Slide 10: A Resilient Business Model
A Resilient Business Model Leveraging Our Geographic Diversification, Dynamic Strategies and Long-Term View 48% 22% 30% of Total of Total of Total Collections Collections from Collections from Outside U.S. U.S. Legal U.S. Call Center & Channel Other Channels ✓ One of the most geographically ✓ Provid
Slide 11: PRA Europe
PRA Europe A Growing and Differentiated Business with Consistent ERC & Collections Growth PRA Europe ERC1 $5.0 $4.0 CAGR: +7% $3.6 $3.9 ✓ Experienced and tenured management $3.2 $3.1 $3.4 $2.9 $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
Slide 12: Seasoned Management Team
Seasoned Management Team Leveraging Deep Expertise and Industry Experience to Drive Next Stage of Profitable Growth 25+ 25+ 25+ 30+ Martin Sjolund Rakesh Sehgal LaTisha Tarrant Owen James President & Chief Financial Officer General Counsel and President, Chief Executive Officer Chief Human PRA Group
Slide 13: Agenda
Agenda Company Overview Market Opportunity Growth Strategy Financial Performance Appendix 12 Nasdaq: PRAA
Slide 14: Favorable Industry and Market Tailwinds for PRA
Favorable Industry and Market Tailwinds for PRA Current Environment Near-Term Outlook PRA’s Positioning • Improved supply and pricing • Supply anticipated to remain • Key buyer in the world’s largest NPL dynamics in recent years after elevated market declines in 2020-2022 • Portfolio pricing continu
Slide 15: Expecting Continued Elevated U.S. Portfolio Supply in 2025
Expecting Continued Elevated U.S. Portfolio Supply in 2025, Driven by High Credit Card Balances & Charge-Off Rates $ in billions U.S. Credit Card Balances1 and Charge-Off Rates2 $1,200 10% 9% $1,000 8% 7% $800 6% $600 5% 4% $400 3% 2% $200 1% $0 0% 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Q1
Slide 16: Agenda
Agenda Company Overview Market Opportunity Growth Strategy Financial Performance Appendix 15 Nasdaq: PRAA
Slide 17: Three Strategic Pillars to Enhanced Profitability
Three Strategic Pillars to Enhanced Profitability 1 Optimizing Investments Increase ERC and portfolio returns Enhanced Profitability Operational Execution ✓ Higher portfolio returns 2 Maximize cash collected per dollar invested ✓ Higher cash collections ✓ Lower marginal costs 3 Managing Expenses Opt
Slide 18: Optimizing Investments
1 Optimizing Investments Global Investment Framework Focused on Attractive Returns & Opportunities Quarterly Portfolio Purchases1 ERC2 +20% +19% $7.8 $433 $7.3 $7.5 $6.8 $379 $6.4 $6.5 $350 $5.9 $6.0 $328 $5.7 $311 $285 $292 $230 $246 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 3/31 6/30 9/30 12/31 3/31 6/30 9/30 12
Slide 19: Operational Execution
Operational Execution 2 Strong Portfolio Purchases & Execution of Strategic Initiatives Contributed to Double-Digit Cash Collections Growth $ in millions Quarterly Total Cash Collections Quarterly U.S. Legal Cash Collections +11% +33% $497 $111 $474 $477 $468 $450 $98 $98 $419 $420 $96 $411 $410 $84
Slide 20: Managing Expenses
3 Managing Expenses Site Consolidation Now Complete with Offshoring Growing at a More Measured Pace Transitioned from 6 to 3 U.S. Call Centers ✓ Successfully implemented work-from-home protocols for eligible U.S. collectors ✓ Lower-than-expected attrition in U.S. collector base ✓ Plans to grow offsh
Slide 21: Agenda
Agenda Company Overview Market Opportunity Growth Strategy Financial Performance Appendix 20 Nasdaq: PRAA
Slide 22: Q1 2025 Highlights
Q1 2025 Highlights Started 2025 with Momentum and Delivered Strong Results Metric Q1 2025 Q1 2024 Change • Strong purchasing led to record ERC ($ in M, except per share amounts) Portfolio Purchases $292 $246 +19% ERC1 $7,805 $6,498 +20% • Double-digit cash collections growth for fourth quarter in a
Slide 23: The Two Components of Portfolio Revenue
The Two Components of Portfolio Revenue Both Represent an Important Part of Revenue & Profitability $ in millions Portfolio Income Changes in Expected Recoveries +19% $73 $61 $241 $55 $230 $52 $209 $216 Avg: $195 $202 $188 $184 $190 $33 $28 $21 $22 $23 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 ($37) Q1 Q2 Q3 Q4 Q1
Slide 24: Q1 2025 Financial Results
Q1 2025 Financial Results Revenue Growth and Disciplined Cost Management Drive Profitability $ in millions +5% $284 $281 $293 $270 $221 $256 $209 $216 $155 Revenues +3% $189 $189 $195 $191 $199 $195 $164 $173 $176 Operating Expenses +5% 40 $27 1.0 $22 $18 20 $3 $4 0.8 0 0.6 ($4) Net Income-20 ($12)
Slide 25: Strong Cash Collections Drive Adjusted EBITDA Growth
Strong Cash Collections Drive Adjusted EBITDA Growth Leverage Remains Stable and Within 2-3x Target Range $ in millions +13% +3% $1,184 $1,100 $1,138 $1,044 $1,065 $1,015 $993 $998 $1,007 2.92x 3.00x 2.92x 2.93x 2.89x 2.76x 2.84x 2.89x 2.83x 3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31 3/31 2023 2024 2
Slide 26: Strong Capital Structure
Strong Capital Structure Well-Positioned to Continue Capitalizing on Elevated Portfolio Supply $ in millions Debt Maturity Profile • $919 million available under our credit facilities as of March 31, 2025 $1,913 • $538 million available based on current ERC • $381 million of additional availability
Slide 27: Well-Positioned for the Future
Well-Positioned for the Future Strong and Established Platform Positioned to Drive Profitable Growth Global Strong Capital Continued Favorable Diversification Structure & Transformation Industry with Strong Liquidity with of the U.S. Dynamics European Improving Business Franchise Financials 26 Nasda
Slide 28: Agenda
Agenda Company Overview Market Opportunity Financial Performance Growth Strategy Appendix 27 Nasdaq: PRAA
Slide 29: Strong Vintage Performance Vs Original Purchase Price Multiple
Strong Vintage Performance Vs Original Purchase Price Multiple (PPM)1 Americas and Australia Core 250% Underperform 2025 2020 2019 2018 2024 Global Vintage Performance Original PPM 2021 200% 2023 250% 2015 2017 2016 Underperform 2022 150% 2020 2025 200% 2015 Original PPM 2024 Outperform Current 100%
Slide 30: Growth in Adjusted EBITDA Over Time
Growth in Adjusted EBITDA Over Time $ in millions, except per share amounts1 Adjusted EBITDA* $1,600 $35 $1,400 Global Financial Crisis 2 COVID-193 $30 $1,200 $25 $1,000 $20 $800 $15 $600 $10 $400 $200 $5 $0 $0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Slide 31: Components of Portfolio Revenue
Components of Portfolio Revenue Total Portfolio Revenue has two components: Total Portfolio Revenue • Portfolio Income is the yield component • Changes in Expected Recoveries is current period over/underperformance + NPV of ERC changes Portfolio Income Changes in Expected Recoveries Effective intere
Slide 32: The Basis of Portfolio Income
The Basis of Portfolio Income If Cash is Collected as Expected in Original Underwriting 1. Purchase of Portfolio • Purchase Price of $1,000 with Total Estimated Collections of $2,200 = Purchase Price Multiple of 2.20x • Effective Interest Rate (EIR) = 28.8% (Gross IRR of purchase price and projected
Slide 33: What Happens When Cash IS NOT Collected As Expected
What Happens When Cash IS NOT Collected As Expected There is Always Some Level of Changes in Expected Recoveries Collecting More Cash Than Expected Collecting Less Cash Than Expected (Overperformance) (Underperformance) • Cash in excess of expectations is recognized as an increase • Cash lower than
Slide 34: How Cash Overperformance Can Lead to Same Lifetime Collections
How Cash Overperformance Can Lead to Same Lifetime Collections as Portfolio With No Overperformance Total Cash Collected Over the Entire Collections Curve Per $1,000 Invested $2,400 $2,400 $0 $400 Original Final Original Final PPM PPM $2,400 PPM PPM 2.4x 2.4x $2,000 2.0x 2.4x No Overperformance 20%
Slide 35: Reconciliation of Non-GAAP Financial Measures to GAAP
Reconciliation of Non-GAAP Financial Measures to GAAP $ in millions 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 Adjust
Slide 36: Reconciliation of Non-GAAP Financial Measures to GAAP (Cont.)
Reconciliation of Non-GAAP Financial Measures to GAAP (Cont.) $ in millions Use of Non-GAAP Financial Measures (Cont.) The Company also evaluates its business using certain ratios that use Adjusted EBITDA. Debt to Adjusted EBITDA is calculated by dividing borrowings by Adjusted EBITDA. The following
Slide 37: Reconciliation of Non-GAAP Financial Measures to GAAP (Cont.)
Reconciliation of Non-GAAP Financial Measures to GAAP (Cont.) Use of Non-GAAP Financial Measures (Cont.) In addition, the Company uses return on average tangible equity (ROATE), which is a supplemental measure of performance that is not required by, or presented in accordance with, GAAP, to monitor
Slide 38: U.S. Portfolio Acquisitions by Major Asset Type & Delinquency Category
U.S. Portfolio Acquisitions by Major Asset Type & Delinquency Category $ in thousands 2025 2024 Major Asset Type Q1 Q4 Q3 Q2 Q1 Major Credit Cards 73,486 $ 87,477 128,420 67,505 59,058 Private Label Credit Cards 79,366 77,255 96,733 117,612 109,887 Consumer Finance 6,917 4,688 4,903 4,292 6,247 Auto
Slide 39: Najim Mostamand, CFA
Najim Mostamand, CFA VP, Investor Relations (757) 431-7913 [email protected] IR.PRAGROUP.COM