Dovalue Spa

Good morning, this is the Coral School Conference Operator. Welcome and thank you for joining the Do-Value first half 2026 financial results presentation. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Daniele Della Seta, Head of Investor Relations of DoValue. Please go ahead, sir.

Good morning, everyone. I'm Daniele Della Seta, Head of Investor Relations at DoValue. I'm joined by Manuela Franchi, our Group CEO, and Davide Soffietti, our Group CFO, as we present DoValue's Q2 2026 financial results. It is the first quarter to fully reflect the consolidation of COEO. This transformative transaction is already contributing to a stronger growth profile for the group. Manuela will begin with an overview of our performance and the key market dynamics. Davide will then provide a detailed review of the second quarter financial results, cash generation, and financial structure. We will conclude as usual with a Q&A session. Thank you for joining us today. I will now hand over to Manuela.

Good morning, everyone. The first half of 2026 marks an important step in the evolution of the value. The group is now more diversified than gross geographies, clients, and credit segments. Digital receivables have become a material part of our revenue and earning base, while our traditional servicing platform continues to provide scale, visible cash flows, and AI-insulated servicing capabilities. The ASEER delivered on the priorities we set out for this phase. Growth in digital receivables, profitability, a stronger capital structure, and an established servicing platform. Let me highlight four key developments from the first half. First, digital receivables, the business of Coel, continued to deliver strong growth. Revenue increased by 25% year-on-year, supported by 5 million new files onboarded during the period. Coeo Prime Base continue to diversify beyond its historical anchor relationship, and growth remains ahead of the assumption in our original acquisition case. Second, pro forma group BDA, excluding non-retiring items, reached 121 million. In the second quarter alone, EBITDA grew 21% year on year. Profitability benefits from Coeo in growth on AI automation. while the do-value business continue to implement disciplined cost actions. Third, we further strengthened our capital structure. The recent refinancing extended our best maturities and is expected to generate approximately 4 million of annual interest savings while reinforcing liquidity and financial flexibility. The picture of the first alpha is a group with a faster growing engine, a more efficient cost base a longer and cheaper debt structure and a servicing platform that keeps replenishing itself. That is the base from which we run the second half. Let's now turn to page four and look more closely at digital receivables. This is the engine of the group next stage of growth and is the first half it's accelerated. Revenue was up 25% year on year and EBITDA reached 46 million. The quality of that growth matters as much as the rate. Germany, which is by far our largest market for digital receivables, grew 21% year on year. This is scale compounding on an already large base, not a small base effect. And it comes with efficiency, not with ad count. Indeed, new files entered per full-time employee were up 21% year-on-year, as automation absorbed the additional volume. Second, diversification is accelerating. Collection revenue from clients other than Coeo Anchor customers was up 50% year-on-year. Behind that number, there is a complete commercial pipeline. We signed 11 new contracts this year worth more than 10 million of incremental annualized revenue and around 350,000 new files per year across six different sectors, telcos, utilities, insurance, mobility, commerce, and financial services. This is the practical answer to the question of whether the platform can extend beyond its anchor relationship and beyond buy now pay later. It already is. Third, a word on the own portfolio. which is the part of this business that is least familiar to our investors. We hold the receivable portfolio with an expected market value of 120, 140 million with an estimated remaining collection value of 170 million. Let me clear on where this is going. The disposal process on this portfolio is progressing and we expect to complete it by end of this year. At that point, the group will be fully asset-line. a pure service in a receivable management platform with no balance sheet exposure to the receivable we manage. Two points are worth making while that process is completed. First, this portfolio is limited in size, relative to our balance sheet, and it turns into cash very quickly. 61 million of collection in six months against 120, 140 million of market value speaks for itself. To give you a measure of how quickly this portfolio converts into cash, receivables purchased in the second Q have already returned 20% of the amount invested during the same quarter. Second, for as long as we hold it, the group retains that cash generation. So the time to completion is not a cost to us. It adds cash flow in the meanwhile. We will complete the sale on the right terms, and we still expect that to be within this year. Let's now turn to page five, which shows how that growth is actually produced, deepening automation in our core market and scale in the newer one. Let's start with automation. Total automation in Germany reached 77% at the end of June, up from 69% in December, eight percentage points in six months. In practice, CHI, our proprietary AI platform, handled around 1.3 million interactions on a fully automated basis in the half, 400,000 more than in the second half of the year, and more than 1.5 million were closed with no human involvement at all, up 23% from 854,000 a year ago. The reason we spend time on these numbers is that they translate directly into unit economics. human-assisted contacts per file were down 24% versus the second half of 25. The same file now requires materially less human efforts, which is what lowers our cost to collect. The automation is moving up the complexity curve, not just handling simple cases. By June, 62% of CAI-related emails were processed straight through, against 41 in January. and 75% of documents against 49. This is deployed technology with measurable outputs in production environments, not a pilot. Now the second half of the page. Scale outside Germany. Revenue in the markets outside our core grew 28% to 50.6 million and the newest platform are the fastest growing. In the Nordics, revenue reached 15.6 million Up 83% with Sweden at 11.6 million. Norway went from 0.1 million to 1.9 million and turned profitable in the second part of the year of operation. In that outside Germany, revenue was 12 million. Up 52% with Austria at 7.6 million and Switzerland at 3 million. Delivering its first profitable half year. Finland has launched and is generating its first revenue, and Denmark is next, which will bring the group to 14 countries. The partner year is what matters more than any single country. The Greenfield Playbook is repeatable. It requires very limited capital, and it reaches profitability quickly. Finally, the box at the bottom of the page, which is the part I would draw your attention to. because it's new. So selling between Duvalier and Coeo has moved from intentions to signed contracts in both directions. Duvalier signed and is already operational on two mandates with German banks, relevant because banks carry around 50 billion of non-performing loans, a stock up 67% since 2020, in a servicing market with no scaled incumbents. In the other direction, co-authored contracts with payment and e-commerce operators in Spain and Italy, where our body operation is now active, and Greece follows in September, also with the first deployment of the CAI voice agency in a do-value market. Let's now turn to new business on page six, where I want to start with the single most important fact on this page. We have already delivered the new business target of our business plan. Since the start of the plan, we have won 27 billion of new business against a 24-26 target of 24 billion. The target is achieved six months before the end of the plan, and in the first half alone, we added 3.1 billion of GDP, made up of 1.5 billion of new mandates and 1.6 billion of forward flows. On top of that, secondary sales amounted to an overall 0.5 billion, of which 0.2 being the first ever sale of re-performing loans in Greece occurring in the first quarter. By region, the picture is uneven. Spain has a strong gulf, adding around 450 million of new business from two banking institutions. One a new relationship, the other is the shifted contract perimeter with Santander. Italy signed around 200 million of new mandates. with forward flows from Banco BPM and BIPER growing 46%, mostly driven by the contribution of Banca Popolare di Sondrio within the BIPER perimeter. In the Hellenes region, activity was visibly softer in the second quarter as market participants adopted a wait-and-see approach while the Cazzelli framework evolves. Now, a word on the quality of this new business. because volume alone would be a misleading way to read this page. The market is more complex, particularly in Italy, where collections have been softer and the flow of new businesses across the market has slowed in 2026. Looking at the second half, we expect several portfolios to come to market from secondary transactions in the coming months. For Duvalio, though, with a lower collection rate, this is genuine new business. New Mandates, New Investor Relationships, and Incremental GBV Under Management. Before turning to guidance, let's look at the market backdrop on page 7. The European MPE market has evolved into new equilibrium, underpinning more than 2 billion of addressable servicing revenue across our core footprint over 26-29 periods. This is not the same market we had 10 years ago. when banks were dealing with very large legacy stocks at the peak of the NPL cycle. The market is smaller than the peak NPL market of the past, but more disciplined, more recurring, and more sustainable. And this is where the role of the servicer becomes systemic. The second message is equally important. The opportunity is no longer limited to banking MPs. Technology and AI are making it economically viable to serve others and other classes that were historically less profitable under a traditional human-heavy servicing market. This is exactly where the combination with Coeo becomes strategically powerful. DoValue brings scale, licenses, institutional relationships, and deep servicing expertise. Coeo brings a highly automated AI-enabled platform for small ticket, high volume receivables. Together we can address both sides of the market, the new equilibrium in banking MPE and the emerging opportunities in the adjacent credit and receivable segments. On the basis of this strategic backdrop, let me turn to what this means for our full year 2026 outlook. Across our markets, performance remain differentiated. Italy continues to face low primary MPE volume, has built a full ratio remain near historical low. The aging stock of existing portfolios is lower than expected expansion of value-added services are adding to the challenge. Grease is performing well, although regular development may delay some secondary market transactions. While its pay continues to progress, but as yet not on optimal scale. Most importantly, Coeo continues to deliver double-digit growth. Ahead of Expectation and Structurally Less Exposed to the MPE Cycle. Taking these three elements together, we believe our full year 2026 pro forma bid-dad guidance of approximately 300 million remains within reach. Assuming that COEAO continues to perform broadly in line with the first half and the group is able to adapt its cost base to the new market reality, both areas where management is strongly focused on and has delivered. On leverage, delivery remains dependent on two key drivers. Completion of the COEO receivable portfolio sale and the expected normalization of NPL working capital with encouraging trends already visible in the second quarter. At the same time, the strategic direction of the group is clear. We are building a broader, more diversified, and more technology-enabled platform with digital receivables providing an additional engine of growth and the service in franchise continue to generate scale and cash flow. This give us confidence in the group ability to navigate the current market environment and deliver shareholder value beyond 2026. You will hear more on this on the next 18th of October in our Capital Markets Day. Now, I will hand over to Davide for a detailed financial overview of the quarter.

Thank you, Manuela. and good morning everyone. Let us start page nine with the second quarter financial highlights. The second quarter results provide the first full report review of the larger group, including Coelho. Gross revenue increases by 30% year-on-year to 181 million, primarily affecting the first-time contribution from Coelho. Net revenue increases by 70% to 148 million, The difference between gross and net revenue growth reflects the different operating model of Coeo, where a large proportion of cost is recorded through outsourcing fees. Outsourcing fees therefore represented 18% of gross revenue in the quarter. ABTDA, excluding non-recurring items, increased by 21% to $58 million. supported by Coeo's contribution and resident profitability in the Atlantic region. The BTDA margin remained broadly stable at 32% compared with 34% in the second quarter of last year. This reflects the contribution from Coeo, resident of stability and operating flexibility in the Atlantic region, partly offset by the weaker performance in Italy. Below EBITDA net income excluding or regarding items was 3 million, broadly flat year-on-year. Higher EBITDA more than upset the effects from the negative items arising from the consolidation of COEL, including PTA amortization and the interest expense associated with the bond issued to finance the acquisition. For completeness, on test out-performer basis, assuming COEL had been consolidated from the beginning of the year, ABTDA excluding non-recurring items would have reached 121 million. While group net income excluding non-recurring items would have remained positive at 16 million. Both these figures are relevant because they are coherent with guidance figures. Finally, Coel's own portfolio generated 31 million of cash collection in the quarter and 61 million the first six months. These collections relate to principle and are therefore outside the BTDA, while the related collection fees are recognized in the gross revenue. We do not think cash BTDA is the most appropriate method to assess the various operating performance, as our model remains fundamentally service-in-lid. However, while the portfolio is still on balance sheet, if we want to look at the BTDA on a more comparable basis with debt purchasers, The information provided on portfolio cash collection, portfolio investment, and related accounting features gives you the elements to do so. Overall, the second quarter showed a stronger scale and broader earnings based on the enlarged group. It also shows that this diversification in the growing market provides a meaningful buffer, although not yet entirely affecting the softer dynamics affecting parts of the traditional services business. Let us now move to page 10, where we show how significantly the group's revenue mix has evolved over the past 12 months. Digital collections already represent 31% of group revenue, compared with 43% from NPL services. One year ago, NPL services accounted for 64% of group revenue, and value-added services for 17%. Today, the enlarged group has significantly more balanced mix, 43% in MPL servicing, 31% digital collection, 12% non-MPL servicing, and 14% value-added services. This is more than a perimeter effect. It represents a structural change in the composition of the group. Digital collections provide a group with meaningful exposure to structurally growing markets. supported by the continued expansion of consumer credit, digital commerce, and recurring outsourced receivables management across financial and non-financial clients. They also significantly expand our presence in Central and Northern Europe. At the same time, specialist servicing remains a sizable and highly relevant franchise. NPI Servicing is still the largest component of Group Revenue. and it continues to provide scale, long-standing client relationships, special estate management capabilities and cash generation across Adam Europe. The strategic value in the larger group comes from combining these two platforms. We retain our leadership and expertise in complex state services while adding a digital collection business with a broad exposure across geographies, clients and sectors. The more balanced revenue mix reduces the group's exposure to individual NPL market dynamics, while retaining a sizable and resilient sales franchise. This is particularly important in the current market environment, where traditional sales trends remain different across countries. Such firms do not remove the near-term impact of the softer dynamics currently affecting Italy. However, the contribution from digital collection is already mitigating part of that pressure and over time should make the group structurally less dependent on any single geography or phase cycle. Overall, the slide shows a group that is materially more diversified than 12 months ago, still anchored in specialist servicing, but now complemented by digital collection platform that already represents almost one-third of revenue. and provide an additional engine for future growth and earnings resilience. Moving to page 11, we can see how the broader revenue space translated in ABTDA. ABTDA excluding non-recurring items increased by 21% year-on-year from 48 million to 58 million, primarily affecting the first-time contribution from COIO and the resilience profitability of the Atlantic region. The ABTDA margin remained broadly stable at 32% compared to 34% in the second quarter of last year. This demonstrates the resilience of the larger group, despite the pressure affecting past resolution of 17 business. On a first-half pro forma basis, assuming that FOIA had been consolidated from the beginning of the year, ABTDA, including non-regarding items, reached 121 million. up 23% compared to the first up 2025 with the margin of 33%. The first margin is therefore scaled. The larger group is now operating from a materially broader earnings base. Q2 ABTDA increases to $58 million and first up from ABTDA to $120 million. The second message is margin resilience. ABTDA margin was 32% in Q2 and 33% on Q3. Thank you very much. Proactive cost mitigation measures are already underway to align the cost base with the current volume trends. Spain and the Atlantic region continue to provide important support to the group's profitability. In particular, the Atlantic region remains a resident despite software market activity, while Spain continues to benefit from cost discipline as the business progresses towards optimal scale. Moving on, page 12. I would like to spend a moment on Quero's own portfolio, which is an important component of both the cash generation profile of the business and our transition towards an asset-like model. The first point is that this is a fast-turning and cash-generative portfolio. At the end of June, the portfolio had an estimated market value of approximately $120 to $140 million, and estimated the remaining collection of approximately 170 million over 120 months. These figures refer to expected principal collection and therefore exclude the collection fees generated by the platform. The portfolio comprises approximately 8 million files and generated 60 million of principal cash collection in the first half of 2026. These collections were recorded for the benefit of Duvelli's balance sheet and demonstrate the speed at which the portfolio converts into cash. The rapid conversion is also visible in the most recent investments. Of the 48 million reinvested in portfolio purchases during the second quarter, 20% had already been collected by the end of June. This is the funny feature of Coel's portfolio model. Capital is deployed into granular receivables that start converting to cash very quickly. The second point is strategic. Our objective is not to maintain a permanently capital-intensive portfolio business. As announced at the time of the acquisition, our strategy is to divest the full investment portfolio and maintain a group as an asset life, servicing lead platforms. We continue to target completion of the disposal within 2026, preserving oil, services, and technology capabilities while removing the balance sheet intensity associated with the portfolio ownership. Until the disposal is completed, the portfolio remains a temporary but meaningful source of cash generation. The final point is how investors should think about the portfolio while it remains on our balance sheet. From an operating perspective, this is not a strategic departure from the value-servicing-led model. It is a portfolio that comes with Coeo. It generates significant cash while we own it, and it is expected to be sold as part of our transition to the full asset-light structure. At the same time, as we discussed earlier, the related cash collection and investment are important for understanding cash generation and comparability with debt purchasers. We do not intend to manage the group around the purchasing metric, but we are providing information needed to bridge that view if analysts chose to do so. The key message is therefore straightforward. The portfolio is fast-harvesting, cash-generative, and on track for disposal, while the strategic destination of the group remains an asset-light segment and receivable management platform. Let us now move to page 13. where I will take you through the main items between ABTDA and group net income. ABTDA, including non-recurring items, was $57.6 million in the second quarter, compared to $47.7 million in prior years. Non-recurring items within ABTDA amounted to $7.4 million, mainly linked to the acquisition of Coelho. After these items, the total ABTDA was $50 million, up to 5.5 million year-on-year. Below EBITDA, depreciation, amortization, net breakdowns, provision and adjustments amounted to 32.6 million, an increase of 7.1 million year-on-year. We mainly reflect the consideration of OEO and the related preliminary purchase price allocation. As a result, EBIT was 17.5 million, compared with 26.1 million in Q2 2025. Net financial expenses and net gain and losses on financial assets amounted to 16 million, increasing by 2.6 million year-on-year. This reflects the cost of the bond and SCF used to finance temporary holding of Coeo residual portfolio. This results in an FTC of 1.5 million. Income taxes amounted to 9.3 million, slightly higher than the period reflecting the contribution from profitable entities across the country, including Coeo. Minority interest amounted to 3.7 million, increasing by approximately 1.1 million euro a year, and related to the group's partnership with BIPER and Banco BPM and the Eurobank. Group net income, excluding regarding items, was positive at 3.3 million, compared with 2.8 million due to 2025. On a first-half pro forma basis, assuming where it's been consolidated from the beginning of the year, ABTDA's pluralism items would have been $120 million, while ordinary income would have been $16 million. The main takeaway, net income, excluding non-recurring, is growing just after the first quarter of full consolidation of OEO, providing the EPS a creative nature for the transaction.

Moving to page 14.

The key message is the significant improvement in cash generation during the second quarter and, importantly, the full reversal of the working capital absorption recorded in Q1. Starting from the reported EBITDA, the quarter also includes a $2.4 million non-cash ISRS 9 item related to the portfolio and $31.4 million of principal cash collection from careers on the portfolio recorded for the benefits of the value balance sheet. Networking capital contributed $38.9 million in the second quarter, fully recovering the absorption recorded in Q1, in line with our expectations. This compares with the positive working capital contribution of $3.4 million for the first half, confirming that the first quarter absorption was temporary and fully reversed in Q2, and that the Q1 absorption was driven by timing rather than a structural duration in the group's cash conversion. Other asset liabilities absorbed 39.3 million. This includes recurring cash items such as ASRS-XP payments and redundancy costs, as well as specific temporary and non-recurring effects. In particular, the quarter includes an approximately 8 million delayed cash impact related to the VAT dispute in Greece with the Greek tax authorities.

following the positive ruling, we expect this amount to be fully recovered, making it only a shift in timing.

The line also includes 12 million cash mismatch, the 100% payment over the 2025 management incentive plan versus the six months accrual for 2026. After these movements and 7 million of capital, cash flow from operation reached 76 million. Thank you very much. This demonstrates the strong cash generation capacity of the larger group, once temporary and transactional rate items are separated from the underlying performance. The reported free cash flow was $54.1 million, compared with $19 million in Q2 2025. Below free cash flow, the reported cash flow before debt repayment was significantly affected by two clearly identifiable items. The first was the $368.5 million net cash impact from the Quail acquisition. The second was $48.2 million investment in Quail's customer receivables, affecting strong file intake and supporting future collection revenues. As discussed in the previous page, this portfolio investment had a rapid cash conversion profile. Near 20% of the amount invested during the quarter had already been collected by the end of June. The reported cash flow before debt repayment was therefore negative by 370.8 million, but this figure is not representative of the group's underlying cash generation. as it includes the acquisition consideration portfolio and the portfolio investment. The key takeaway from this page is that the recurring cash generation remains strong, while the working capital concern visible at the end of Q1 was fully reversed during the second quarter. This cash generation capacity, together with the planned portfolio disposal, remains an important support for the group's delivery trajectory. Let us now move to page 15 and look at the group financial structure at the leveraging trajectory. The key message on this page is that the reported leverage at the end of June reflects the completion of the pre-acquisition, the related financing, and dividend payments made during the first half. The reported net debt was $855 million as of June 2026, corresponding to reported net leverage of 3.1 times. This includes the acquisition debt, the cash impact of the transaction, and the dividend payments, which were not included in the leverage guidance. The slide also shows a pro forma view, excluding the COEO receivable back book. On that basis, net debt would have been approximately $722 million, and the leverage approximately 2.6 times, comparable to the 2.2 times guidance paid dividends or 2.3 times post-25 dividends paid in May 2026. The credit remained solid. The group had approximately 168 million cash on balance sheet at June 2026 after the effect of the financial action completed after quarter and further strengthened the maturity profile and financial flexibility. Our outstanding bonds are currently trading at around 5% yield to maturity, among the lowest levels in the sector, while the average cost of debt is now approximately 5.9% following the recent refinancing. Importantly, both Stitch and Standard & Booth have confirmed the group's BB rating with stable outlook. reflecting the stronger business profile and the expectation that the leverage remains a clear management priority. The path to the leverage is supported by three elements, recurring cash generation, the planned sale of the portfolio receivables, and the lower financial costs following the refinancing. We have also completed important actions on the RBC side with the balance sheet. As you can see on page 16, in July, we put in place $330 million of new bank facilities comprising of $250 million term loans and $80 million revolving credit facilities, replacing the previous facilities. The refinancing followed the $61 million tap of our 2031 senior security notes. The proceeds were primarily used to prepay $50 million of existing term loans. The new financing package delivers three clear benefits. First, it reduces our financial financing costs. The new blended cost of debt is approximately 5.9%, broadly in line with the trading level of our 1,031 senior security nodes. We expect the financing to generate approximately 4 million of annual interest savings, providing direct support to cash generation. Second, it materially improves our maturity profile. The maturity of the term loan has been extended from October 2029 to July 2031, while the revolving creative facility has been extended from October 27 to July 2031. The term loan will bring amortizing from the second year, with approximately 40% remaining as a book balance at the final maturity. The group, therefore, has no material refinancing wall before 2030. Third, the new facilities provide greater governance flexibility and additional financial headroom while maintaining a diversified funding structure across bank financing and capital market instruments. Following this transaction, our funding structure comprises 330 million bank facilities, 410 million of senior security notes due in 2021 and 300 million of notes due in 2013. These actions do not change our focus on the leveraging. They make the path more efficient by reducing interest costs, expanding maturities, and strengthening financial flexibility. The group therefore enters the second half with a broader earning base, a stronger funding structure, and clear financial priorities. Delivery, recurring cash generation, complete the portfolio disposal and continue the leveraging. This concludes our presentation. Thank you for your attention. We will now be happy to take your questions.

Thank you. This is the Chorus Call Conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question is from Tommaso Agniettu, Kepler Chouvreux.

Hello, and thank you a lot for taking my questions. I have two. The first one is on Italy's region. Can you unpack the drivers behind Italy and Evita Decline in more detail. How much is slower collection activity, market conditions versus phasing or one-off items? And also, what gives you confidence these results in H2 rather than representing a new run rate? The second question is on guidance. Given that H1 results were We're quite soft on the standalone business. So can you walk us through the reach to the 300 million euro full year EBITDA guidance and how much of the required H2 step up is Italy normalization versus continued COELs outperformance versus... Elenic and Spain region. Also, on your guidance, now there is a new exclusion, which is the impact of the portfolio sales. So can you quantify of what magnitude are we talking about? Thank you.

Thank you, Tommaso. Now, on Italy, the EBITDA of the first half of last year had around 10, 11 million of... Thank you very much. Stabilize the EBITDA to levels which are net of the 10-11 million of extraordinary of the first half of 2025 to the new level for the EBITDA of this year versus last year numbers. So stabilization taking out these effects. Regarding the other businesses, as you have seen, the Greek business is improving in terms of collection and this is driving the upward trend on the NPA revenues. On the other side, clearly in the first half of last year we had some sales that did not happen in this part and this is due to the regulatory environment which has stopped investors from taking decisions before the court came out on the Cazzelli law and it was clear now what they could recover or not so that they can put a plan in place for the second part which they did for the secondary sales. Regarding the other two markets the dynamic is positive although they are minor in size and the over-structuring of the Spanish business is bringing now the company which is growing EBITDA but also below EBITDA has no losses and will produce cash and will be a positive contributor to cash flow of the group. Clearly, on the Coelho side, we are only assuming a trend which is similar to the first alpha, not additional upsides. although you have seen that the business has been benefiting from not only the underlying market trends which are positive for e-commerce and by now, but later, but also from the higher penetration into new clients which is driving down the contribution of the main client, Klarna, from 50% to 40% of files intake which is a very important step taking into account that Klamna itself continues to grow by more than 20% year on year. The other positive aspects that you will see in the dynamic of the EBITDA is the contribution of the other countries because obviously the revenue growth trajectory which stable cost base because of the dynamics on the automation of the processes there will have a full effect on EBITDA beyond for the diversification that the business is doing to the other do-value countries. The contribution of COER to the do-value countries obviously is netted off in their company, so you see it. on the Duvalio side. You will not see it on the Coeo side, but Coeo is contributing to the growth also of the other countries, and this will be evident in the second part of the year. On the overall guidance, obviously, we are very keen not only on revenue and EBITDA, but also on the leverage. and there I think the two drivers are very clear, no? Is the disposal of the portfolio where the timing we are taking is to optimize the price, not because it's a question of selling. And the more we hold on into it, the more cash we have from the portfolio. It's a very profitable one, as you have seen from the statistics that Davide has provided. We are not including cash metrics as debt purchasers do because our business will be soon asset light but gives you a metric that explains also the eye turning of the purchase price of the portfolio into real cash. Now, on the Bridge of Guidance, Davide will provide more details.

Davide Soffietti, Manuela Franchi, Daniele Della Seta Davide Soffietti, Manuela Franchi, Daniele Della Seta So these lower cash conversions may be because the cash will include the portfolio. So what we are saying is that our target is coherent with the target we will give to the market when we acquire the company. So we will have a target, we will continue to have this roughly 45% cash conversion that will include the effect of the portfolio.

Maybe another data point we should highlight on the guidance of the ERNs. Last year we had 99 million of EBITDA out of a full year result of 217 million. Today we have 121 million of EBITDA pro forma versus a guidance of approximately 300 million. So you can do the proportion there. Obviously we are having a business which has not the seasonality of the traditional business and that's why we are assuming a stable contribution despite the dynamics that we have explained about the new business intake at Coel.

Sorry, just a follow-up. So about these secondary sales that didn't materialize in H1, should we expect them to materialize in H2 or you don't have any kind of visibility on that?

Yeah, we have a pipeline of secondary safes for the second queue. In our guidance, we are more conservative on the full year on that. So if all were to materialize, obviously it would be better. But the safes are in the pipeline for the second queue. Second half, sorry.

Okay, yes. Perfect. Thank you.

The next question is from Antonio Gianfrancesco, Intermonte.

Yes, good morning, and thank you for taking my question. I have two questions. The first one is on Coeo, because you reported 56 million revenues and 80 million EBDA in the second quarter, this implying a margin of around 31%. But if I look at what you reported in the first quarter, Coeo was indicated at Daniele Della Seta The second question is on new business because the new business intake reached 3.1 billion in the first half and the GBV remained broadly stable, let's say, but traditional service revenues continue to decline. So I want to understand if the new mandates are entering at comparable fees and margin levels. and if, or let's say, how quickly this commercial intake should translate into revenue and EBITDA contribution. Thank you.

I will take your first question, Cui. You know, we expect that the average margin is between the two, between 35 and 37. The first half is 37, making the average with 35, because as we have already discussed during the first quarter call, Coelho has a seasonality that is stronger than the first quarter than the last one, or the second one. So the first quarter is always a stronger quarter. So we have also the benefit to have higher margins. But on average, if we look fully here, we expect a 35% margin. So also where we have, again, that quarter is a little bit lower, and then the first quarter will be a little bit higher. So on average, we expect 35%.

On the new business intake, as you have seen from Greece last year, the 7 billion are now producing the collection of tick, and we expect a similar lagging period for this business. The positive part of this contribution of the 3.1 billion is that half of it comes from forward flow. from Fresh Vintages, especially on the Greek and the Beaver contracts, which are the UDP component embedded. To this business, we are adding separately other opportunities, which are related to the digital collection business, to the NFC business, which are not valued on a GBV basis only. That's why we added new metrics which are related to file intake and the likes, which are more similar to the small ticket business of Coel to give you an order of magnitude of how that trajectory is moving up. Obviously, the last component is on the VAS side. To give you an order of magnitude on Italy, last year the VAS plus non-NPL revenue was 41%. in the first half this year are 51%. So more we grow this component, lower will be the contribution of the MPL, and every type of cost initiative we make will allow to exploit the maximum cash contribution from the traditional MPL while benefiting from the growth of the second part. and this is what our new business plan is primarily about. This shift organic into the new revenue dynamic and extracting as much cash from an EBITDA margin perspective and from a cash flow perspective from the traditional MTR business.

Very clear, thank you.

The next question is from Simonetta Chiriotti, Mediobanca.

Hello, good morning. Thank you for taking my questions. I have a few. The first is on Italy. and specifically on the trend in collections that were down 21% in the second quarter, 16% in the first half. So could you help us to understand what is happening on that side and in particular what changed with respect to your original expectations when you acquired gardens? and also actually vast revenues declined year on year in the first half. So if it's possible to explain also this trend. And on the cost side, cost remained flat. So how is the cost structure? Is it completely fixed? So no correlation with the revenue trend. On a different issue, could you give us a quick update on the tax receivable project in Italy? and another couple of questions if possible. You gave the ERC of COEO over 120 months. It looks a very long period. Is the collection profile so long for COIO? And finally, if you could provide the details of the 40 million other assets liability cash absorption in the first half.

Thank you.

Yeah, on your first question, Simonetta, thanks for the question. On your first question in Italy, yes, the collections were down. Basically, we experienced a lower new business intake from newer vintages, and as the amount of GDP of older vintages was weighting more, the collection rate decreased, and hence the overall collection from the business were down. So, answering to your question of what's changed, the original expectation of Garland, I would say that it also comes to market condition in Italy. We have lower volumes from primary deals, and hence lower prices. from Freshers Vintages. On the other hand, this trend was partially compensated from higher volumes, from forward flow, from existing partners of Gartan. But of course, this wasn't enough to compensate the shortfall on the primary transaction in the market.

On the cost side, we have run the last efficiency analysis measures in the first half. So the exits are happening between June and July, and therefore you will see the impact on the cost in the second half. But this is a recurring project, so it will continue over the next few years. The more as we introduce technology, we make efficient the cost base, higher the reduction of the cost. So the composition of the cost in Italy is quite evident that 70% is personnel and the remaining is 15%, 15, 18% IT cost and the rest is general cost. On the tax receivable projects you have seen three days ago, there was the final decree which defined the perimeter into which ANCO will play. and also the condition under which ANCO will have to be given by the local authorities the file to manage. So they are obliged to move to ANCO if the recoveries are not at a certain level. So it's quite actual effect. So there will be a continuous flow to ANCO and the redistribution to the other services. So now AMCO is set to run with a public tender in the end of the year. I think they are already set for that. And we will participate to that tender.

Yeah, and the question about the other asset LRBs, I will give you the breakdown. Roughly 10 million ISRS 16, so to pay and the rent in the office where we operate. Then we have roughly 8 million of redundancy costs as part of our plan. We have also the MBO impact discovery before. It is roughly 13 million, 12.3 million that is expected to be paid fully Daniele Della Seta Daniele Della Seta As we were saying before, it's a very fast-growing portfolio. On average, the recovery of the price paid is in 18 months. Then we show the recovery curve of 120 months because most of the collection comes in the first three years, but then we have the tail that we continue to generate cash.

Yeah, and this reflects the very important data, which is the 20% that we already recovered as principal on the portfolio investment made in the second queue. So you see the very fast turnover nature of this portfolio, only looking at this data.

Thank you.

The next question is from Davide Rimini in Tiso San Paolo.

Good morning and thank you for taking my question. I have also a few. The first is on guidance and is on free cash flow guidance, whether you might confirm the 90 million free cash flow before dividend and debt repayment for this year and whether sort of these include, I do notice that in the slide there is the reference on some one-off and you put sort of a reference on recurring cash flows or whether sort of These include or not those items. And still related to that, I do understand that you signaled how cash flow generative is the core EU portfolio and at the same time you highlight the commitment to exit before the year end. I just wonder whether within the guidance you might clarify what's the contribution of Coreo Portfolio and partly related to that whether sort of initially what has been sort of the reasoning behind in keeping in a way longer rather than initially signal to the market. The second question is instead sort of on the outlook On slide 7, you provided us with an outlook which suggested a challenging NTL market backdrop and linked the guidance to an execution in terms of cost efficiency measures. I was just wondering whether, out of the outlook that you provided in Italy and Greece, that there is anything that we should be aware of in terms of additional post-cutting measures. I noticed that you put the reference that this is recurring activity. I just wonder whether there is anything more out of the synergies out of gardens in Italy, for example, that you might share today. Thank you.

Yeah, on the cash generation, we confirmed the guidance for the 19 million free cash flow for the two value perimeter. Then we have the cash flow coming from Coio, which was 13 million minus the financial charge on the bond, which was 19 million. So we completely confirmed the free cash flow generation and the the impact of the portfolio sales that will last. In terms of the portfolio, we highlighted that the value today is including the range between 120 and 140. We are working to try to extrapolate the maximum value of the portfolio sale. This is why we have included now in our simulation on the portfolio sales the value in the middle is 130 million dollars. The fact that we continue to own the portfolio is helping only the cash production. As soon as we continue to hold on the balance, we collect the cash flow. So this helps in some way the leverage, but it's not impacting our results in terms of EBITDA because the component of the portfolio is impacting our results, the things we get from those portfolios.

So maybe to go back to your specific question, The keeping or not, it's a question of maximizing value versus the income we get from holding on it. It's not blurring the free cash flow, believing free cash flow generation, which remains separate from the portfolio contribution, still the one which we have portrayed before. Now, in terms of the... Indication that we gave here, we are obviously waiting in our guidance the weaker points about the markets as well as the other initiatives we are doing, so there are pluses and minuses, but still guiding to our final results. We wanted to make it very obvious of what is the market backdrop, but it's our job as managers to obviously to get to the final targets which we have announced. In terms of the cost measures, they are not going to change the fligish flow generation that we have indicated. So it's still consistent with the numbers. Any other measure we are planning to execute.

Thank you. If I may, just a sort of a follow-up, since I know it's the $14 million one-off in the cash flow sort of picture on slide 14, and what are sort of these, since you introduced this concept of recurring, I just wonder whether sort of out of the $9.0 million guidance is included or not this $1.4 million?

This is all just, it's a one-off of the modest temporality. from the cash flow notes. We will say that the VAT has been delayed, so we would assume to collect this VAT now in the first half because of the dispute with the tax authority that went well. We need to wait a few months more to get this cash, but on an ongoing basis, we can recoup it. So it's a one-off only for this period, not on a recurring basis. We need to include this cash in... The same happens for the temporary cash out, but it will be completely absorbed by the end of the year. So the one-offs are mainly related to our transaction costs that have been paid, and the redundancy costs that we have in the plan will be 2x, but the following year will be lower than the one we have expected. have this year.

At least on the VAT, shall I expect it to be reversed in the second half?

Yeah, we will collect it during the year to help us to respect our guidance. So this has been only a timing effort, it's not a structural change.

Thank you.

The next question is from Davide Giuliano, Equita.

Hi, good morning and thank you for taking my question. I have three. The first one is on revenue evolution. What dynamics do you expect in second half on the ex-COEO perimeter and so the value stand alone? Is there anything impacting the comparison base which we should take into account for instance in terms of secondary sales fee last year? The second one on Coeo, we saw gross revenues growth of plus 26% year-on-year in Q1 and plus 25% year-on-year in first half 2026. So the growth rate was essentially confirmed in Q2 as well. Just one clarification, does the growth rate refer only to the servicing business and exclude the, let's say, NPL investing business? also in Q2. You previously said that Klarna is down from 50% to around 40% of processed files. If I'm not mistaken, can you also provide an indication of Klarna's contribution to revenues in First half and the very last one on Coeo BackBook. Can you give us an indication of how discussions are progressing regarding the structuring of the disposal of the BackBook and the related forward flow agreement? And looking at Q2 it seems to me that keeping the BackBook generates a cash absorption on a run rate basis given that you invest $48 million and collected $31 million. Am I missing something or this is something we should also expect in the coming quarters? Thank you.

On the portfolio for the growth, the growth is only considering the revenue and not the portfolio. On the transaction, we have the transaction we have and three investors that gave us the funding offer. We are negotiating to improve the price. We are actually also the vehicle that will securitize the portfolio and the fund, the Luxembourg fund that will buy the notes and then we will send those notes to the investor we have identified. In terms of cash absorption, you are right. Coeo is growing, so the volumes are growing, so the clients are transferred to Coeo on more receivables. This means that after the four months, I have the option to buy higher volumes. So as you've seen in this quarter, we bought 48 million, we collect 31. This is why also with the selling the portfolio, we'll draft the funding of those growths to the third-party investors that will benefit from this everything fees. So if the portfolio remain on our balance sheet, it will be a structure Thank you. Thank you. Thank you.

to around 9%. I think we have addressed the other question, Davide.

Yes, maybe I missed the one on the comparison based on second half 2025 if we should take into account some secondary sales fee when making our estimates for second half 2026. I don't know, probably I missed it before.

No, no, we, as always, we confirm that what we have experienced last year in the first quarter, most of the higher volumes will come in the last part of the year. This means in Greece we expect the secondary phase that will grow mostly in the last part of the year, also because of the Castelli law. In Italy, we also expect... We said that in the first half of last year Italy had around 11, 10-11 million of secondary sales. This is because the banks had some back book that wanted to dismiss. Now these amounts have reduced so they will still do in the second part but

Thank you.

Gentlemen, there are no more questions registered at this time. I turn the conference back to you for any closing remarks.

That will be all for today. Thank you all for joining.