Axactor : Investor presentation associated with potential bond issue (pdf)

Investor presentation

25 August 2021	Helping people and companies
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Important information and disclaimer

THIS DOCUMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES OF AMERICA, ITS TERRITORIES OR POSSESSIONS, AUSTRALIA, CANADA, JAPAN, HONG KONG OR SOUTH AFRICA OR TO ANY RESIDENT THEREOF, OR ANY JURISDICTION WHERE SUCH DISTRIBUTION IS UNLAWFUL. THIS DOCUMENT IS NOT AN OFFER OR AN INVITATION TO BUY OR SELL SECURITIES.

ABOUT THIS PRESENTATION

This presentation (the "Presentation") has been produced by Axactor SE ("Axactor", the "Company" or the "Issuer") in consultation with Arctic Securities AS, DNB Markets, a part of DNB Bank ASA, and Nordea Bank Abp, filial i Norge (the "Managers") solely for use in connection with a potential issue of senior unsecured bonds (the "Bond Issue") as described herein, is strictly confidential and may not be reproduced or redistributed in whole or in part to any other person than the intended recipient. This Presentation is for information purposes only and does not in itself constitute an offer to sell or a solicitation of an offer to buy any financial instruments. By attending a meeting where this Presentation is presented, or by reading this Presentation, you (the "Recipient") agree to be bound by the following terms, conditions and limitations.

Neither the delivery of this Presentation nor any further discussions of the Company or the Managers with the Recipient or any other person shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since such date. None of the Company or the Managers undertake any obligation to review or confirm, or to release publicly or otherwise to investors or any other person, any revisions to the information contained in this Presentation to reflect events that occur or circumstances that arise after the date of this Presentation. The Issuer does not intend to update the information after its distribution, even in the event the information becomes materially inaccurate. The Presentation must be read in conjunction with other offering material, including the Term Sheet and Application Form. An investment in the Company is suitable only for investors who understand the risk factors associated with this type of investment and who can afford a loss of all or part of the investment. Please also note that the Company may subsequently publish a prospectus that will include additional information which is not included in this Presentation.

THIS PRESENTATION IS NOT A KEY INFORMATION DOCUMENT ("KID") UNDER THE REGULATION 20167653/EU (THE "PRIIPS REGULATION") OR A PROSPECTUS UNDER THE REGULATION 2017/29/EU (THE "PROSPECTUS REGULATION"). THIS PRESENTATION IS BEING SUPPLIED TO PROFESSIONAL CLIENTS ONLY AND MAY NOT BE REPRODUCED, REDISTRIBUTED TO NON-PROFESSIONAL CLIENTS OR TO ANY PERSON TO WHICH DISTRIBUTION IS PROHIBITED BY LAW. PERSONS INTO WHOSE POSESSIONS THIS DOCUMENT COMES SHOULD INFROM THEMSELVES ABOUT AND OBSERVE ANY SUCH RESTRICTIONS. BY RECEIVING THIS DOCUMENT POTENTIAL INVESTORS AGREE TO BE BOUND BY THE FOREGOING INSTRUCTIONS. EACH PERSON RECEVING THIS PRESENTATION SHOULD CONSULT HIS/HER PROFESSIONAL ADVISERS TO ASCERTAIN THE SUITABILITY OF AN INVESTMENT. NONE OF THE ISSUER OR THE MANAGERS (AS DEFINED HEREIN) MAKES ANY REPRESENTATION AS TO (I) THE SUITABILITY OF INVESTING IN THE COMPANY FOR ANY PARTICULAR INVESTOR (II) THE APPROPRIATE ACCOUNTING TREAMTENT AND POTENTIAL TAX CONSEQUENES OF INVESTING IN THE COMPANY OR (III)THE FUTURE PERFORMANCE OF THE COMPANY; EITHER IN ABSOLUTE TERMS OR RELATIVE TO COMPETING INVESTMENTS.

NO REPRESENTATION OR WARRANTY

The information contained in this Presentation is furnished by the Company and has not been independently verified. No representation or warranty (express or implied) is made as to the accuracy or completeness of any information contained herein. None of the Company or the Managers or any of their respective parent or subsidiary undertakings or any such person's directors, officers, employees, advisors or representatives (collectively the "Representatives") shall have any liability whatsoever arising directly or indirectly from the use of this Presentation or otherwise arising in connection with the Bond Issue, including but not limited to any liability for errors, inaccuracies, omissions or misleading statements in this Presentation. The Recipient acknowledges that it will be solely responsible for its own assessment of the Bond Issue and the market, the market position and credit worthiness of the Company. The Recipient will be required to conduct its own analysis and accepts that it will be solely responsible for forming its own view of the potential future performance of the Company. The content of this Presentation is not to be construed as legal, credit, business, investment or tax advice. The Recipient should consult with its own legal, credit, business, investment and tax advisers as to legal, credit, business, investment and tax advice.

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Summary of risk factors (I/II)

SUMMARY OF KEY RISK FACTORS

Investing in the Company involves inherent risks and is suitable only for investors who can afford a loss of all or part of the investment. The below summary of certain risks and uncertainties are not the only ones facing the Company. Please also see pages 45-50 for a more detailed description of risk factors. Any references to the Group below shall include the Company and its subsidiaries as applicable. this type of investment and who can afford a loss of all or part of the investment. Please also note that the Company may subsequently publish a prospectus that will include additional information which is not included in this Presentation.

Risk factors related to the industry and business of the group

• The Group faces strong competition, including from pan-European competitors and competitors that are active in the local markets
• Reputation is critical to the Group's business and there is a risk that any event that could harm the Group's reputation will adversely affect its business
• The availability of debt collection contracts, and debt portfolios and Collection Platforms for purchase depends on several factors which are outside of the Group's control
• There is a risk that the Group will make acquisitions that prove unsuccessful and that it will not be able to manage growth effectively
• The Group is subject to risks relating to the acquisitions made by the Group
• The Group is subject to applicable regulations in the jurisdictions in which it operates from time to time
• The Group is subject to risks relating to implementation of its strategic plans
• The Group's success depends on its ability to employ and retain skilled personnel
• The Group relies on third-party service providers
• The manner in which the Group, or third-party service providers on the Group's behalf, undertake collection processes could negatively affect the Group's business and reputation
• The Group is subject to risks associated with its contracts for debt collection
• Purchases of debt portfolios are based on a number of assumptions which may prove to be inaccurate
• The future value of the Group's REO investments is subject to risks related to the development of the real estate markets and general economic and market conditions
• If the statistical models and analytical tools used by the Group are inaccurate the Group may not be able to achieve forecasted recoveries
• There is a risk that the Group will not be able to successfully maintain and develop its IT platform or anticipate, manage or adopt technological advances within its industry

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Summary of risk factors (II/II)

Risks related to the industry and business of the Group (continued)

• A failure to protect customer data could negatively affect the Group's business
• The Group is exposed to local risks in the different European markets in which it operates from time to time
• The Group will from time to time be involved in legal claims and disputes
• The Group is subject to risks related to changes in tax laws and other regulations
• A pandemic situation as experienced with the Covid-19 may affect the operational efficiency and the Group's results

Financial risks

• A failure to procure sufficient funding at favourable terms may have a material adverse effect on the growth plans of the Group
• The Group is subject to restrictive debt covenants which may limit the ability to finance future operations and capital needs and pursue business opportunities
• Servicing the Group's future indebtedness limits funds available for other purposes
• The Group is highly leveraged and may be unable to repay or refinance its debt at maturity
• The Group is exposed to the risk of currency fluctuations
• The Group is subject to risks relating to its historical use of tax-deductible losses
• The Group is subject to credit risk

Risks related to the Company's Bonds

• The Issuer will have substantial indebtedness which could have negative consequences for the bondholders
• Any assets remaining after repayment of the Group's secured debt may not be sufficient to repay all amounts owed to unsecured creditors in the Issuer, including the Bondholders
• The Bond Agreement will allow for certain predefined majorities to pass resolutions which are binding for all Bondholders

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T R A N S A C T I O N OV E R V I E W

C O M P A N Y O V E R V I E W

B U S I N E S S S E G M E N T S

M A R K E T O V E R V I E W

K E Y F I N A N C I A L S

R I S K F A C T O R S

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