doValue S.p.A. (DOV) Earnings Call Transcript

Good morning to everyone, and thanks for joining us. I'm Manuela Franchi, CEO of doValue. The last time we stood in front of you was 2.5 years ago, March 2024. And since then, the company and the world around us have changed a lot. We moved in this period in a way that probably was different from what was originally planned. But we think we have achieved most of our commitment in a different shape. We have completed the 2 transformational transactions. We have changed our platform. We enlarged our position in the market we created a scalable operating model, which is now ready for the new market conditions. Looking at the market ahead of us, is clearly changing the way we work, the way our clients work. And we are going to use AI to transform our business model for the MP business while continue the trajectory that our colleagues in have already exploited in the last 4 years in terms of evolution of the model vis-a-vis new type of clients and new type of loans. These are the conditions we are working in to be able to help us to succeed in the new era. Now let's focus on these 3 words we see in front of us and why we choose them. First, if you're a runner, you have -- you know the first 2 ready, set and then you run. Now ready, we have created in these 3 years, 4 years, the platform that allow us to prepare for the next phase. SET is about what we have today, the platform, the balance sheet and the operating model. Now we are able to scale up from here what we have built. By the end of the morning, you will see what is the market in front of us, how we want to grow in this market and also the financial conditions underpinning the plan. Let's look to the 3 pillars of our story. We want to do a recap of what doValue today the shape and the positioning is completely different from what it was 3 years ago. And we want to come back to that plan and see what we have delivered and what we have not delivered. The next phase is phase of value creation, scaling up from the current platform. And here, we have 3 engine of growth. The traditional NP business which is stabilizing, the digital collection business, which is growing, and the value-added services business, which is mildly growing. Last, the financial targets, which are underpinning the growth trajectory, but moreover, the sustainable remuneration for our shareholders. Let's first start to introduce the team around me, which work with me every day. This team have changed because also of our acquisition, but there are key pillars for the last few years. First, Theodore Kalantonis, who is the Head of the NPE business and the real estate business across older Europe. Second, Elias Retteir with the CEO of coeo, in the room, we have also the other console I met Elias 4 years ago, 2020 to '23, and we just do forces last year. Francesco Binintende, our Group Chief Strategy Officer; and David Soffietti. And then you know, Daniele, is our investor relator and M&A, which will lead the Q&A session. Let's look now what is the value today. It's a good reminder of where we start from. First, we have 2 business models and the asset-light structure. The business on the left is the one you most -- we managed EUR 132 billion of gross book value of loans, mostly generated by banks, which are, in the end, either investors or securitization [indiscernible] these are mostly secured loans, complex loans with an average size of EUR 60,000. We have contracts underpinning this business of 5 to 10 years or under runoff and the way we are remunerated is simple, a base fee on the gross book value of the assets we manage and the variable fee on the collected amount. Right-hand side, digital collection business. This is the new business, the one we introduced with coeo. coeo works with around 60 blue chip international clients if they give business in one country and if we work well with them, they want to work with us in other countries. They manage very small tickets, usually unsecured with an average size of EUR 120, very automated processes. Their clients are mostly corporates, but also some banks. The way we now project the business is about volumes. Today, they manage 10 million of tickets, and this number is growing over time. They are paid only variable fee on the collected amount, and this fee is largely regulated. Why we want to stress these points? If we look to the word surrounding us, most players are debt purchasers. So they buy portfolio, they collect their success is based on the on how much they're able to collect vis-a-vis the underwriting plan. So they are more balance sheet heavy. On the right-hand side, our revenues are based on collection. So how much we collect for our clients, no balance sheet risk on portfolios. We want to make a specification of a piece of the coeo business, which obviously impacts our financial profile. The digital collection companies usually buy after a certain period of months usually 4 months, the receivables from their clients, and they absorb them and they collect them very quickly, usually around 12 to 18 months. So it's more a working capital and little cash absorption in a little period of time. Anyhow, we are keeping our business asset light. So we have a strategy for this type of -- for this part of the business. The limited size and shorter in period means this feature does not change the asset-light model. Let's look now to the size of our business. So EUR 132 billion of assets under management, 10 million of files today managed. We gave you just actual figures. We are in 14 countries where we were not 2, 3 years ago. We added Northern Europe, Continental Europe. We have #1 position in the NPE business in Italy, Greece and Cyprus and in the digital collection business in the DACH region. We have recorded EUR 769 million LTM revenues as of June '26 and EUR 277 million EBITDA with EUR 65 million cash flow and a stable rating since inception from 2000. How do we look today in terms of diversification? The NPE business, and we put here together NPL and UTP before we used to focus on NPL only is half of the business today. 29% is about digital collection and 18% value-added services. We are present for 29% of our revenues in Continental and Northern Europe where we were not present until 1 year ago. Let's now focus on the original plan and what we have delivered against it. The original plan of March '24 was adding EUR 480 million, EUR 490 million revenue. We delivered EUR 769 million plus 59%. The EBITDA we were indicating was EUR 185 million to EUR 190 million. We closed at EUR 277 million plus 47% and did we do it in the same way we had indicated? No, in a different way. We try to be proactive vis-a-vis the market condition we saw every time and anticipating the market trends. We had planned to achieve a leverage of around 2.3x. LTM, we were at 3.1x, 0.5x is just attached to the sale of the portfolio that we committed to sell by year-end. So it's a technical point that decreased leverage by 0.5. But what is the main addition we gave through the acquisition. First, the non-NPL revenue were targeted to be 30%, 35% of revenue. We are today at 53%, a jump at almost doubled. Business [indiscernible] , EUR 27 billion until June 2026. We had planned EUR 24 billion until the end of '26. So we will be better by the time of the EUR 27 billion. That number, EUR 24 billion was predicated upon stable market share in a low deteriorating, low default ratio scenario for banks. The market has been at low default ratios, more fragmented than we expected with more seller, but very small transaction where some clients which were not present in the market before came in, in terms of purchases, but a lot of players came out of the market. Now it's important to look to the balance sheet as well. When we came to market 2 years ago, we had a very -- a much more complex capital structure. We had 2 maturities in front of us, 2025, 2026. So an average maturity of only 1.5 years. We are now the first maturity in 2030 and the second one 2031. So more than 4 years in front of us. This is the result not only of one exercise. The team and the banks who have supported us have been able to refinance in different tranches. Our debt with now a very stable long-term capital structure at market conditions, which are remunerating as more than peers. Let's look to the chart on the right. At that point in time, our spreads were around 492 basis points. Today, we are at June at 231, much below our peers. This is a signal also of the much more stable and long-term capital structure we have been able to put in place. In terms of net leverage, we were at 2x or so below our targets at the end of '25. Clearly, this was after an acquisition, but also after a EUR 150 million rights issue. So this didn't come at a damage for shareholders in terms of remuneration. We had promised EUR 12 million of dividends for 2025. at a leverage below 2.8x. We paid EUR 17.5 million, so above because the leverage was much lower. Let's look now to the guidance for this year. Obviously, some of the 2024 assumption remain under pressure. And we wanted to be clear at the outset of this plan on how we see this year completing. We said in August that we were seeing in front of us a strong growth of the digital collection business, and we were assuming a recovery of the collection, especially on the Italian front. What has changed since? The DTR collection business is still growing very strongly. And the main client that has commented on the German market for their own plan this summer has not impacted our growth. Because it's providing us still a very sustainable growth with a very high cash generation. So nothing less than we expected even better on the coeo front. The Italian recovery assumption are less positive in the second half. So we wanted to build the final guidance for the year based on only the contract we see today only on the collection we see today and the upper end of the guidance on a possible uplift on the collection on the Italian front. As a consequence, the target leverage is between 2.4x and 2.6x, including dividends. Let's now move to show you what we intend to build from it. We have 5 conviction, which we built over the course of the last plan. First, diversification was the right choice. We are now a different platform, which allow us to exploit growth in certain segments while stabilizing others. The M&A has accelerated such growth, bringing diversification and strengthening our financial profile. We overdelivered on the cost control. And so this is a buffer we need to take into account for the buildup of the next phase. We are ready to capture the AI opportunities, which is a fact already in our sector. It's part of the operating model of coeo since 2022. We have already done a lot in [indiscernible] , and we will continue in the next 18 months. And last, the value is positioned for ongoing structural shift in the servicing industry. Our assets under management have majority beyond 2029. [indiscernible] of our revenues are underpinned by current contracts and many contracts of our competitors are coming to market in the next 2 years. Let's see the starting point of the platform. These 3 changes support the same strategy. Scale from EUR 481 million revenues to EUR 769 million, from EUR 179 million EBITDA to EUR 277 million. Revenue mix. We were 25% value-added services, 75% NPE business. Today, 53% NPE digital collection [ 25% ] value-added services 29 from 4 countries to 14 countries. In terms of the levels of these products, let's move to the next page. We have done it again through the acquisition, 2 major ones, and we still stand behind them with the force. They have added a lot of value to our proposition. Gardant was mostly about consolidation of our market leadership in Italy, adding 2 major contracts with banks and a new partner, [indiscernible] . The valuation was sound at EUR 250 million with 4.3x EBITDA. We have announced EUR 150 million synergies, and we have already achieved them. we have completed the integration, nothing to do next. We have increased our market share in Italy substantially from 16% to 24%. And of the EUR 250 million of cash is already returned to us from this acquisition in the last one, almost 2 years. coeo is about diversification. Extending in the digital collection business in 9 new countries into a new segment of small ticket unsecured in a market with new clients, multinational blue-chip corporates, an AI-driven business model. We could have not built this business by ourselves in such a short time as we did with this acquisition. Price, EUR 350 million, plus EUR 40 million earn-out to be payable in 2 years, 5.1x multiple with a very strong growth. They are still growing above 20%, but yes, we'll explain that better. So the growth in the diversification has been a quantum leap from 26% to 47%. We did not announce synergies for coeo but we are already realizing synergies for coeo. coeo exported their clients to our markets already since June. So we work with coeo clients in Spain in June and in Italy since the last 2 weeks and in Greece in the next 2 months. So the synergies have realized, although not announced. Now over delivering on the cost side, we never communicate cost targets, but they are inherent in our revenue and EBITDA objective. Let's now call it to 1 year, for example. We gave a guidance of EUR 600 million to EUR 615 million revenue and the target of EBITDA of EUR 210 million to EUR 220 million. So an implied cost base of EUR 390 million to EUR 395 million. we can short on the revenue at 580. That difference was all absorbed in cost. In fact, we were able to close the end of the year with EUR 217 million EBITDA. So very well within guidance but acting on cost. The productivity, the revenue per has increased substantially. So the cost is a reflection of lower operating leverage, and we will continue to act upon it in the next phase. We also sold businesses which were not profitable like real estate development in Spain and the Portuguese business. Today, we don't have businesses which are not profitable. They are all in the positive trajectory. One final point. These savings are structural. We combine duplicated function, we share platform across countries. We redesigned the processes for the entire group and very little of the potential high benefit is reflected in the numbers of today. We are now ready to capture the unprecedented opportunity of AI. Let's follow so on 3 facts then Francesco will depend on what we want to do in a very structured plan. First, 40% of productivity upside in the most promising use cases. In a business where cost to collect determines what you can bid for in the new contracts this is a shift of paradigm in the industry. Second, the speed. The new technology allow us to implement the new use cases in a very fast manner. The solution can be deployed in less than 6 months because they are modular and they go across different processes across the platform, we deployed in the different countries. We already have agents in production, specialty skills are replacing some activities and defined road map to scale up these activities across the group. At the same time, human expertise remains essential. Roughly 1/3 of our activities still require human judgment, particularly for the larger exposures where complexity and compliance are critical. We want to support these activities with automation in the back. We see that as a moat. Technology replaces repetitive work while specialty judgment remains on where in creates the most value. And then coeo -- with coeo, we are buying a platform, [indiscernible] which is an AI digital platform for digital collection. But we are using already some of their tools to exploit in the MP business. This is not an abstract road map. We just wanted to bring you 5 use cases, which are today in production, which we are using, which have a very strong effect. Germany. Around 80% of tasks are automated. Cost to collect on a fund contracts was down 25% from June '25 to June '26. 5.1 million cases are rendered with no human touch of the EUR 10 million we mentioned before. In Greece, around 35% saving on the total cost of outbound coal wrap-up. And more than 75% of legal invoices are automatically managed by machine and process with no human intervention. This system are already news, and we use them every day. This is how doValue stands today. Let's now look to the new trajectory. Obviously, we give you an idea of the way we see the market going forward. Digital collection offers significant untapped growth opportunities. We have 2 markets with 2 different shapes. On the left-hand side, the NPE business. Balance sheet of banks are drinking and primary transactions are limited. This is a fact, but there are 3 factors supporting the business. First, the growth in nontraditional segment. Unsecured loans and UTP is continuing, and the markets such as Germany offer a shrinking balance sheet for banks, but growing NPE. Just a fact the level of NPE German banks have doubled since 2022. Secondary sales are expected to remain very active. We see approximately EUR 60 billion between '27 and '29 , although transactions remained very fragmented. The last point is very critical, and Theodore will explain it better. new assignment offset the decline in NPE stock because they generate higher collection than the managed legacy book. On the right-hand side, digital collection only in the country where we are present, this is a EUR 4 billion per annum opportunity until 2029 across diverse industry and segments, including bytopulator, e-commerce utilities, insurance, corporates. Obviously, our -- one of our major clients and clients are in the [indiscernible] business, a 7% to 12% CAGR market, supported by expanding e-commerce and increased adoption. We want to exploit the fragmentation of certain markets in Southern Europe. To give you an order of multitude, the market for corporate small tickets in Italy per annum with a EUR 500 million market with low digitalization. And we want to bring and we have already brought coeo offer in this market. We are not included in the base plan untapped opportunity. One is an Italian one, which you know very well, [indiscernible] collection, not because we don't want to pursue it just because we can predict the timing and the volume with the sufficient confidence. So we didn't put it in the base case. The argument, we run -- we are most on the NPE side is the gross book value is falling for years, therefore, the business is run off. We want to demonstrate with a couple of statistics why this is not the case. We want to be also very clear on how we see the trajectory of the asset under management in the market. Today, between what is on the bank's balance sheet and what is outside. We see Southern Europe a market of around EUR 380 billion, EUR 400 billion of AUM with an outflow in the next 3 years of around 90 to 120 and an inflow for the reason we said production of banks of 50 to 70, so much less. So the decline of 10% to 20%, but we expect revenue to fall much less in this market, 5% to 10%, while the new generation comes with more revenues, more collection attached to portfolios. We will give you specific examples later. One thing to stress, these numbers do not assume a deterioration in the credit cycle. No recession, no rate shock, no material increase in corporate defaults beyond the current trends. Obviously, this is going to happen we will have more volumes to manage. And if we have built a very profitable and efficient platform, we will get benefit from it. But this is not in our base case. New markets, starting with Germany. NPE stock Avention is 50% up compared with a 17% decline in our core Southern European markets. The cycle that has largely run its course in South is only beginning here. But the chart on the right is more important. What we experienced in the market where we are present is a substantial outsourcing by banks. Today, banks are outsourcing 70% to 80% of the NPE business. This is not the case in other Continental European countries. Germany, for example, only 70% outsourced. They didn't have a [indiscernible] They didn't have a need to outsource because they didn't have a balance sheet problem. Today, this problem is growing and we wanted to be there, but we are already there. We moved at the end of 2025 with a new platform. We have the license, we have the platform. We have the technology. We have already the team. So we are already managing NPE since then, and we want to take the opportunity of the new wave. Another important point of our sector. This is also not in our base case. This page is about contract risk, but for us, it's mainly an opportunity. Because most of our assets under management at maturity beyond 2029, protecting more than 80% of NPE revenue in the plan. At the same time, EUR 20 billion to EUR 30 billion of gross book value of contract will be retendered in the next 2 years. We mentioned some of them here. These are existing servicing volume coming into play. We are not assuming the award of any of them, but we will fight for them. We will try to get a piece of it. Clearly, pricing matters. Performance is the main selection criteria. We are moving in a new market for contracts. This is not anymore the markets where you buy a contract. You spend upfront with above-market average fees. The market will be of shorter-term contract, not paid for with better economics. So the operating leverage is critical. And that's why we are focusing on that. Cost to collect and execution will matter more. We bring scale across 5 jurisdiction, a lower cost base and the commercial capability to win volumes on merit. We have demonstrated it with EUR 27 billion out of a target of EUR 24 billion. Let's now focus on the attractive digital collection business. We said a 4 billion Southern European market in terms of revenue pool. How much we can realistically address? On the left, these are coeo existing markets, the DACH, U.K., Nordics and Benelux. Together, they represent EUR 3 billion of servicing revenues, growing at 4% to 7% per year, with coeo established in all of them. Italy Spain, Greece, our own markets, where we are starting now. We have already clients of coeo that we can service in this market. We are able to grow our market share and we are able to take advantage of the growth of this market. Obviously, starting from low penetration of buy now, pay later and e-commerce, this has a faster growth trajectory. And then we mentioned in other couple of markets. France and United States. The United States alone is a roughly EUR 600 billion servicing pool per annum, growing at 15%, the fastest rate on this page. Both are on coeo radar and they are not in our base case. Moving now to the next page. Buy now, pay later opportunity. Buy now, pay later is growing at 7% to 12% a year across all these countries, head of e-commerce. Penetration in DACH is 21%, while in the other countries, we are present is 5% to 3%. Do we think we get to the same level of DACH region? No. It will get to lower level, but still the opportunity to grow is quite substantial. The markets where we have the deepest client relationship are those where buy now pay later opportunity remains relatively low, and therefore, the growth potential is the greatest. Now we will depend on how we intend to grow in this market. But our assumption is that we are focusing on the current clients and higher penetration and taking tailwinds from current trends. But the reality is that coeo is doing clients every month. All in the first half of the year, they added 11 new clients. Now let's see how we want to move to take this opportunity. We have lived across 3 phases. The first one is about -- was about integration. We started the first acquisition. We had to create the group. We established a scalable operating model develop share technology and infrastructure across the group and strengthen governance. This was the 2022, 2024 era. We use the cash flow from the business to invest in the current markets and grow our market position. 2024, 2026 was mostly about diversification. Strengthening the market leadership where we were present in Italy by expanding our business beyond to digital collection. Scale from here. This is about compounding growth, cash flow and returns on an AI first operating model. And more importantly, the platform is built. There are 2 flagship acquisitions, which are behind us. So the backbone, the acquisition, the technology is built, and we is already reflected in our cost base, but we can do better than that. So 3 different markets, 3 different jobs. Digital collection. This is where we plan to expand. This is the growth engine and a profitable one, where also the EBITDA performance will pick up. We see NPE business stabilizing, strengthen the long-term resilience through the high first operating model. We want to adapt to the new wave contracts will be assigned. Last, value of the services. These are a stable contributor with additional upside, but we are assuming a very mild growth trajectory. They don't share the same underlying trends. Now at the bottom, there are important catalysts and important drivers. The gross book value of our assets under management no longer describe burning profile of our business. In 2024, most of our revenues were GBV linked. In particular, you see on this slide, non-AUM base was 27%. Today, it's 45%. Revenue per employee will grow significantly. This is because we will enable this platform with AI generative to become more efficient. Human experts focus on value-added decisions oversight and exception handling and the rest managed automatically. This is what coeo has already done. We did in some processes, we are going to do in many more processes. Now digital collection, which is the growth engine. But I leave Elias to explain the market growth better, coeo competitive position and where the next phase will come from.

Thank you, Manuela. Good morning. My name is Elias Reitter. I'm heading together with Sebastian Ludwig, the coeo Group, the new digital collections arm of doValue. We are the youngest kid in the family of doValue. We were acquired last year, but closing -- thank you, closing just happened in April this year, so just 6 months. Now what is coeo. We are the growth platform as defined by Manuela. If you look into the revenue development, we were growing in the last couple of years with an annual rate of 15%, and we plan to do so for the upcoming years as well. Now there are a couple of trends that give us a good tailwind. The first one is e-commerce is growing faster than physical retail, number one. The second 1 for me is the most important one, which I would like to stress a little bit. There is this buzzword called FinTech. What is fintech? Fintech for me is the fragmentation of credits, very often being referred to as spinal plate. But if you see this more in a broader sense of consumer finance, in the past, people were taking a credit of EUR 20,000. And now they are perhaps taking 200 credits with EUR 100 -- why is this important? Because our mechanic, our revenue generation is per unit per receivable. It's not a commission as a percentage of the collected money. So this really makes a difference. I hope this is something that is clear. Number three, we are working for large multinationals, and they are increasingly procuring centrally from one headquarter for many, many countries. So these are the 3 tailwinds that support our growth. Now the profitability, you see the EBITDA margin. Now it's always been in the DNA of coeo to be highly automated. But since last year, we see really a very, very big impact from the AI pieces from the AI tools that we deployed. And I can happily announce that our U.K. team brought me an e-mail last night. They are so proud that they are now with OpenAI GPT Life gone live, which is the most modern tool you can have in EI voice agents. So we are really at the forefront of this AI adoption and debt collection. And as you see here on the lower right side, we are bringing this increasingly to the traditional doValue Southern European countries. So in a nutshell, we are the growth platform, both top line and bottom line. Drilling this down into further growth opportunities. We have defined 4 markets, the first one, buy now pay later, consumer finance and e-commerce. This is very natural because the origination from the consumer perspective was a digital 1 already. So it's quite natural to be in debt collection, digital as well. And this is where we are the strongest. Now the largest market is on the right side, the #2 utilities, parking, insurance and telecommunication. And we have scored some very good major client wins in the last couple of months. Now tax. Tax receivables outside the U.K. in Europe, there are hardly any governmental authorities who are outsourcing receivables management. But we are trying to change this. There are 2 interesting projects in Greece and in Italy. Number four, B2B. We are targeting large tech companies as their invoicing is digital as well. Now next slide, please. So here, I would like to start with a story about ourselves. For us, collection is a services business. Services business is a people business. So it's about the people that we employ. It's about the management as well. Now when I started at coeo 6 years ago on my first day, I didn't get any flowers. I got a big contract immediately. And we were sitting in the full day together with a team of 7 people from all functions to go through the contract and we did it. We won this major client. And why I'm telling the story because these people are still around. And to stress one important element, the management of coeo, we are shareholders of coeo, which might tell you something about our motivation to make this -- to make a continued success in the upcoming years. Now clients, we hardly see any churn. So we have a very, very stable client panel. The revenues that we have is mostly recurring. So one-off businesses do hardly happen, they happen. And then we are sometimes deciding for an opportunistic deal. But normally, this is really winning a client, putting it on rails. And our IT system, 24/7, we are receiving cases every day and working on them every day. So it's not a one-off business that might go away from one day to the other. Yes, perhaps we can go to the next slide. So here, One important element is that our clients really hate churn. They want to keep their consumer relationships. So we have defined debt collection just as an extension of a customer journey, which should be a good one from the very, very start. So we are deploying a lot of marketing thinking in debt collection. Now this is leading. If you see it to the right side, too, for a debt collection company, a quite surprising high level of customer reviews, 4.6 out of 5 and this was a quite sizable number of reviews, which tells you the story of how we are treating customers. Now the interesting element is here that in the data that we see on our side, if we get new cases every second debtor will know already. So it is almost like a circular model of customers paying in debt collection being unblocked by the originators again, and then using the services again and then one day potentially coming into that collection again and again. So an interesting mechanic of our business model. Now more to the AI part. Today, we roughly have 2/3 of our inbound communication automated via AI. And this is not just brand new since a couple of weeks. We have started already 4 years ago. How do you start an AI element in the services business? Again, it's about people. So we were finding a great guy, and we defined a position called Chief AI Officer. This was the starting point. In AI, it's very much important to get the best engineers because it's not like in the old IT times when you had like hundreds of people who were coding. You need really the best people. Now having this Chief AI Officer, he was the right type of person to recruit the very best AI engineers, and we have almost no attrition. So they are all still with us. Almost 30 AI engineers that we employ in 2 hubs, 1 in Berlin and 1 in Northern England. Now efficiency is one element. Second element is what you see on the lower right side, the monitored calls. This was especially coming from the U.K., where from our client side to compliance element, was more important than the efficiency element. And we developed a tool that is scorecarding 100% of all customer communications. While traditionally, you would always take a randomly picked choice of, let's say, 30 calls or something and listening into them. So -- on AI, it's not only efficiency. But today, I would say this is the most important value lever we have to increase our efficiency, and you might recall from the very first start of my slide deck here that we are targeting to increase our EBITDA margin. But there is more to AI. It's about decision-making as well. We call it the next best action. So we're in the workflow of a debt collection case, you are actually deciding to invest money into the next step, for example, to go into a legal action or not. Now I would say we are quite far developed in the AI space and will bring this into the traditional value markets in the next -- well, we have started already in Greece with one bigger project and there will be more. My last slide. So we have defined on the -- well, first, on the left side, 2026, we have a very, very good year, '26. Our order entry year-to-date by August is plus 20% and our revenue is plus 25%. So more than the initially communicated 15%, a very good year '26. Now looking into the next couple of years, we have structured this by 3 growth regions and the new markets. Now in the DACH and Nordics, we are in a very, very strong position in Germany and in Austria. And we have a quite sizable business already in Sweden, 4 years after we have started there. And we have a couple of startup countries where as Manuela mentioned, we were invited by our multinational clients, which is namely Switzerland, which is Belgium, which is Norway, which is Finland, and we're going to start in Denmark in winter. Now as Manuela mentioned, we did not promise too many synergies between the traditional doValue business and coeo business, but we are working on some. And one, for example, is we have founded in Germany, NPE serving banks unit in the city of Essex and we are already live there since a couple of months with the management team and first large client and running fully operational. Now Western Europe, we did some acquisitions there. So we bought a company in the Netherlands. We bought the company in the U.K. And we put our multinational existing clients on top of those acquired units. So very, very nice sales synergies that we achieved there. Now in the Netherlands, we see some headwind from regulatory elements. But nevertheless, we have one very nice clients and are have established a partner intermediary business there as well. On the Southern Europe piece here, we have brought into Italy and Spain already our existing clients, and this is just the starting point. Now all markets are different. But we see good potential here to further grow the digital collection business. New markets not decided yet. We are, as we speak, looking into the United States, United States is not the right country with a greenfield approach. It can only be M&A. And M&A can hardly be planned and forced. So let's see, stay tuned. And France is something we are evaluating as well. Now as a summary, the takeaway of digital collections, coeo being the starting point of digital collections, we are the growth platform, and we do both its top line and bottom line growth. Before I hand over to Theodore for the NPE business. You will meet digitally my co-CEO, Sebastian, in the upcoming video now. [Presentation]

Debt collection is fundamentally about 3 things: communication decisions and timing with Cai, we optimize all of the individual precisely and in real time, right? Isn't the software we bought our ecosystem developed from scratch by our own AI company Cai technology. Based on Berlin, with its own team and its own leadership. Take communication. Our virtual system handles voice and text as an experience, understanding, explaining, resolving any time of day. Voice is becoming the primary channel. E-mail is trading more and more. This Kind of technology has the potential to change how the world communicates and Cai, who is right at the forefront. Behind every conversation lies a decision. Our decision navigator connects every data point of the case behavior context history and find not just the faster path of the right one. We ground this improving behavioral science. So every decision reflects how people actually respond. What does this mean for coeo and for doValue is not just about cutting costs. It's a different operating model. It has the decisions, higher quality, better customer experience and business escape. Anyone who sees only AI as a savings program. It's using a fraction of what it can do. And here's the real impact within coeo, Cai is already our center of excellence for artificial intelligence and efficiency framework of coeo and also for the way the future of receivables management is tight. In AI native platform that analyzes and orchestrate communication decisions and processes real-time 24/7, combining artificial intelligence with human excellence for a competitive advantage. That's how we redesign the way deblt collection [indiscernible].

Thank you, Elias. First of all, Sebastian, you were very convincing in this video. Good morning. My name is Theodore Kalantonis, and I'm the Head of the NPE and real estate business across the group. Elias, I think, was very, very explicit and in his presentation. The digital collections is the new growth engine of the group. But on the other hand, we have the NPE business. On the NPE business, the story, the objective for the next 3 years is different. It's about stabilization first and second about cash generation. And you will agree with me that growth must come together with cash generation especially in a business plan, which has to fund deleveraging, investments and dividends, we have to pay to our shareholders. The NPE business, as Manuela said earlier, is about long-term contracts and collection curves that we can forecast with a real precision in the value jurisdictions we operate. Collection [indiscernible] are very important because they help us, and they are very good on that. We have a lot of historical calls around the countries we're in. And they are very good because they are the basis for offering a very say, high-level, high-quality underwriting service to our clients, existing and new ones. In other words, it's a tool of attracting and gaining new clients. The NPE stock is still sizable, but declining. What I would ask you to look at instead though is to see the 3 areas, which are moving to the different direction. First, it's about the UTP and Stage 2. These are new segments which are growing. Second, we see new segments and new countries becoming more material compared with the past. And third, the secondary sales market is stabilizing, and this is very important because it keeps a portfolio rotation and servicing mandates in place. So I will repeat. The key word here is about stabilization, and I want to be very precise about what that means. So look at the slide on the left, you will see that the so-called inertial path is down. This is the second gray bar from the left. What closes most of the gap is the third bar and this is the one we can control. In fact, there are 2 levers, which we control to a different degree. The first is commercial and here, to be honest, there are limits. We can manage the pipeline better. We can compete harder for new volumes coming to market which to an extent our NPE business to other countries, first of all, the core countries, but we do not control at the end of the day, how much volume the market provides. The second lever, though, is the one we fully controlled, and it is the larger of the two. Costs, as you can see on the bottom left of around EUR 250 million. Today, they are moving down to roughly EUR 210 million over the time -- over the time frame of this plan. And this, despite the wage inflation. Part of the cost savings, as Manuela said, will be driven by agentic AI, which let us do something that in this industry that nobody has achieved before. It will make the cost to collect call variable. As you know, in the past, when volumes fell short. Costs remained largely fixed. Increasingly, this is changing. Last but not least, in this -- if a [indiscernible] action is acquired, for example, if volumes coming below what we estimate, we know what to do. This management team has successfully restructured operations before in markets where this was difficult to do. We did it in Spain 2 years ago. We did it in Italy through the Gardant acquisition and integration. We will do it again, if necessary. But how are we going to get there? In fact, as you can see in this slide, we have 3 levers to pull. The first lever is about strengthening our new business capture and one of our main focus in this new 3-year period is to extend our coverage to the midsized institutions. Second lever, I said already, is to expand in the UTP and early arrears. And the third lever is the structural one, an AI first operating model. But I will let Francesco to go through that later. Let's now have -- next slide, please. Let's now have a quick look in the countries in the so-called doValue countries. In total -- in all countries, talking always about the NPE business, the NPE business generates around EUR 435 million of revenue. And this, as you can see on the top left, it is declining modestly from now to '29. But at the least that headline, the 4 markets are quite different. Italy, on the top right, generates around EUR 220 million of revenue. Following the acquisition of Gardant now we have 24%, 1/4 of the market and the plan assumes that we'll hold our position despite the decline of the overall revenue pool. So the decline is about the primary supply and not so about losing share to our competitors. The Hellenic region generates around EUR 180 million. And here, we have the same logic but a stronger position. In Greece, we have 34% market share and in Cyprus, close to 50%. These markets, as you know, went through a very, very tough period 10 years ago. But today, they are, let's say, in a normalizing phase. Again, there, the objective is to hold our share as a market slightly contract. Spain, on the other hand, bottom left, is a different case. First of all, in Spain, we are not #1. We used to be. We are #6, #5, #6. We generate around EUR 35 million of revenue, and we have a 7% market share. So we have a low position in a market where we already have a license, a very strong team and the platform in place. So here we are not defending. Our objective here is clearly to grow. There is room to take share, and this is what we assume in this new business plan. Germany, on the other hand, it's the really new opportunity. We have just entered the market, as Elias said earlier, so our share is not yet meaningful. The plan assumes EUR 15 million of revenue, a low number deliberately. But Germany is the one core market in Europe where the LPs are rising, where the outsourcing has barely started. And coeo gives us a very strong base operational base and client relationships to build upon it. Two final points before I move to the next slide. First, on those numbers, there is no cycle. Every bar assumes that the NPE formation stays at the current levels, through -- from now to 2029. So practically, this is effectively our worst-case scenario. And second, this page shows on the core NPE servicing revenue and not revenue coming from businesses which are built around it, the so-called value-added services. Manuela will cover that later, including data and other, let's say, services or the nonfinancial receivables that we will reach through our new digital platform. So let me now come to another very important topic. Manuela touched upon it, but I think we need to explain it better. Over the plan, the gross book value declines our own gross book. [indiscernible] base is forecasted to decline by around 5% a year. On the other hand, we forecast that the NPE revenue will decline by only 2% a year. So how this gap can be explained? The answer is here on this slide. Look at the collection rates. Our older legacy portfolio collects 1% of the gross book value in a year. These are cases which are worked for over a decade, the straightforward recoveries happened long ago and what remains is complex and residual cases. The new NPL flows collect 13%. Early in the recovery cycle, simpler cases, far better data behind them. And coming to the new UTP flows, they collect around 20%. Borrowers are still operating, still contactable with a business to preserve. So let's now do the math together. First, take EUR 1 billion of legacy book. At 1%, it produces EUR 10 million of collections in a year. Now take EUR 1 billion of new NPL flows at 13%, it produces EUR 130 million, same gross book value but 13x more collections. Turn that around, and you get a number that really matters to replace the collections generated by EUR 1 of legacy book. We do not need to onboard a new EUR 1 billion loans. We need to onboard only EUR 77 million of new loans. So when you see our gross book value falling do not multiply that with the same percentage to see the effect on the revenue. The euros living the book are the 71%, while the euros arriving the [indiscernible] earning 13% or 20%. Conclusion, the NPE book can shrink considerably, but the earnings, it produces, move slightly. And this is what is behind the minus 5% and the minus 2%, I told you earlier. Now, 2 more slides and I am done. I have just shown you why a new euro of new flow outperforms a Euro of legacy book. So the obvious next question is, how reliable is at new flow? I believe it is. And there are 3 structural reasons for that. First, as you know, the NPE formation is already at the floor. In Southern Europe, in particular, NPE ratios have been down from 12%. We may have 2% new NPE flows -- sorry, NPE ratio but there is a new formation produced every year. And even in the calmest credit environment we operate, and we've seen now for more than, let's say, many, many years. And this is not an assumption. This is something which is happening today. Second, we strongly believe that outsourcing is structural. Once banks this model the in-house collection teams, systems, and legal networks, they do not rebuild them. We saw that happening in Southern Europe during the last [indiscernible] and there is still room for more outsourcing in other countries. We mentioned earlier, in Germany, currently, banks outsource around 30%. So we believe that this can only go up. Last slide, Sorry, one more point. Sorry, go back is one more point. There is another factor. The addressable market is getting [indiscernible] -- for over a decade, when we're talking about the servicing, where we just had in mind just one segment, secure NPLs, but this is changing. Servicing is increasingly extending to cover the unsecured exposures and began that to utilities and taxes. Each new wave is not replacing the previous one. It is coming on top of it. And meanwhile, the unit fees are stable. Practically, the pricing pressure coming from the banks, and it's coming, is offset by the market consolidation that we see in all markets. So formation, in conclusion, formation sits at a cyclical floor. Outsourcing penetration and breadth are rising and the [indiscernible] halt. None of these drivers is moving against us. Last slide. And the last question, I would say is whether we can continue to win that new flow. I believe yes. And this chart explains why. Look at the 2 bars in its market. The light bar shows our share of the existing stock, while the dark bar shows our share of the new business that came to market during '24 and '25. So you can see here that in Italy, we have 24 market share, but we want 25% of the new business coming in the market. In the Hellenic region, we have 34% and we gained 60% of the new business coming to the market. And in Spain, we gained double the share we have there. So the pattern is the same in all countries. Our share of new business is higher than the share of our existing stock. In other words, we are capturing more than our current market position suggests . Having said that, thank you very much and Francesco.

Thank you, Theodore, and good morning, everyone. I am Francesco Benintende and oversees strategy and operational efficiency for the group. My goal today is to pass you 2 messages. I want you to go home reminding the magnitude and the robustness of what we call operating model identification. This is our program aimed to deliver the efficiencies, which are needed to support our trajectory to stabilization in the NPE business. For this, let me start with the magnitude. Please work with me for the chart that you see, start left to right. This chart repeats the cost base of the NPE business and how we foresee its evolution along the next 3 years. We start with the 2025 cost base, which is between EUR 240 million and EUR 250 million. And then we have 3 effects. Inflation and other increases. This includes also contractual wages increases. Here, let me stress one point. This factor will happen irrespective of the economic condition. It is just a constraint that we need to manage. Second, close to sustained growth. in our trajectory, we will need some specialized capabilities and tooling to expand into new segments, like UTP or new asset classes. This is what this cost is meant to cover. And then you have the largest block the operating model identification. Here, you see that there are estimated savings in the tune of EUR 65 million to EUR 70 million which will come from the deployment of a new operating model, primarily AI-based. Now this is a very challenging target. And this should be among the most ambitious you can find in the industry in terms of scope and in terms of magnitude. But for us, it's not just an ambition. This is our commitment. You will see that in the next couple of slides, we have a clear agenda of things to do to make this number happen. But before I turn to that, I want you to focus on 3 additional elements of flexibility which are beyond this representation. Point #1, the cost to sustain growth. I want you to note that these amounts will occur as growth will occur. So they are not fixed, not upfront. Second element of flexibility. 2029 baseline embeds a portion of performance-linked cost. This means cost that will be paid only if results justify them. Third, as you can appreciate from the graphics, the share of non-HR cost in 2029 will be higher. Part of this non-HR cost relate to technology and AI capability consumption, thus variable cost. This will give us the flexibility to adjust the cost base. Upward if we will experience a positive tailwind, but also downward in case of need. So in summary, should revenue not develop the way we are expecting in this presentation, we have additional actions to take on our side on top of the figures you see here to adjust part of the cost base. This was about the magnitude. Now let me try to give you a sense of the robustness. So let's move to Slide #40 and #41, where I want to show you 2 things. The what we would like to transform, which is a bit solutions we want -- and the solutions we want to deploy. So let's start with Page #40. This is our NPE platform of the future. This is a vision of how we expect the model to change if we deploy what we have in mind. And this is depicted of course, in a simplified manner with the perspective of the asset managers, which are the largest portion of our colleagues. We aim for a target state where asset managers and AI agents cooperate. And please bear with me on the magnitude of this change. We are talking about a model where all tasks are handled with a hybrid approach, which means VI operation between asset managers and AI agents. Now the implication of it is that all the standardized, low value-added task will be handled by agents. For your benefit, we have depicted here a condensed, this vision across 5 major category of activities. You can see from building the case up to monitoring and control. You can appreciate, for example, agent handling calls or managing information flows up to building reports leaving our colleagues the possibility to focus on the high value-added more sensitive task: Negotiation, restructuring, relationship management. Now I want you -- I hope that this gives you a sense of what we mean by AI platform -- by NPE platform of the future. And of course, you may ask, okay, but what does it mean in numbers? Now with this model, we expect productivity gains starting at 30% picking up to 70% or 80% depending on the specific task and on the level of standardization of the single activities. Now let me stress one very important point. This does not mean that it's covering everything. Sensitive tasks and accountability stay human. This is where our colleagues make the difference and improve collections, and we are not here to remove that rather to actually reinforce it. We do not want to remove judgment from this business. So in a nutshell, I hope you can see that AI for us is not just an investment theme. It is an implementation program. As a matter of fact, we have already studied our processes and the possibilities of where to deploy AI solutions. And we are continuously looking at the market because this program needs to dynamically adjust every time a new solution comes in. I want now to show you on top of this is what we want to transform. Now I want to show you how we want to transform and what are the solutions we have in mind. On Page #14, you see the AI capabilities we want to deploy 41, sorry. And please, you can see that following the overall credit collection life cycle from step #1, the case in taken onboarding to step #7, document in compliance, in every single step, you have some AI capability. Then you have a cross-functional layer. I will talk about it in a second, which is underneated. Now 4 highlights here. First, I hope you can appreciate that our implementation program is also a very concrete road map behind it. We did our own work, we did our analysis. The number you saw on Page 39 is ground based on this. It's not just a top-down assumption. Second highlight, we have very clear -- we have very clear what are the critical points of this program. Please allow me to focus one second on the cross-functional support module, bottom left. This is the unglamorous part. This is orchestrators workflow automation interfaces with core system. Yet despite being an grams, this is the part that decides whether all the other work well and how well they work. We can have a very powerful and well configured agents. If they are not interfaced properly with the ecosystem, the benefits will be limited. And I want you to remember that we have it very clear. Our program is designed to ensure this integration is maximized. To overcome the, let's say, most typical hurdles and issues that similar program face. This is the single part where majority of the program fails to be honest. Highlight number three, discipline. We have already enhanced EUR 20 million of investment secured for this program. We are very strict in adopting focus. This means we prefer to have fewer use cases rather than an undiscriminated deployment of AI capabilities across the organization. Number three, we are monitoring very, very tightly the cost consumption. As you know, agents have a variable cost component, which may silently expand if it is not probably monitored. And fourth highlight risk. Given the magnitude and importance of this program, we have been very careful in setting all the necessary risk guard rails and operational measures that such a program requires. Now after all this discussion, one might still say, yes, but look, the NPE in reality is the analog part of your company. And as the analog part, it is not so credible to transform and identify to such an extent. Well, let me say we don't believe that. I mean we don't believe it based on the analysis we have done it. We don't believe it based on the experience of our team. Beyond very complex and highly structured cases, there are a set of activities, which are repeatable, which are standardizable, of course, they are not the entire set but they are. And these activities are very similar to the one that our friends in Germany have already successfully digitized. So we are very confident that we can do the same for our NPE business. Now to conclude, the message I would like you to retain is the following: we commit to deliver a transformation program, AI based, which is among the most ambitious in the industry for magnitude and for robustness. The magnitude is the 40% improvement in the capacity or if you want, the EUR 65 million to EUR 70 million I showed you before. The robustness come from the fact that AI is not just a title. It is a tangible road map, and it is already underway. Let me now pass the microphone to our group CEO, to conclude on this second session and transition you to the third one with our financial results. Thank you very much.

Thank you, all. Let me close the NPE section to move to something quite different. Everything I've described so far is about servicing but 10 years of doing that work has produced additional business. Those business can be sold separately. We call them value-added services, how much they keep today. There are EUR 140 million VAS revenues in 2025, representing 19% of group revenue. We put them across the line from low to high, what is low I -- it's how much they are linked to the captive business to the servicing business and how much they are not. The role on the left side shows business that are stand-alone. Alternative asset management over EUR 1 billion of assets under management on a dedicated platform run for third-party investors. Stage 2 products are sold to banks on their performing book to identify borrowers likely to default before they do. We are not managing these books. We are just doing a diagnosis for the banks. Mortgage broking on new lending. We started this business in '25. We already have 2,000 applications per year in Greece in '26. Advisory and portfolio transaction for clients and third-party third parties. We are doing that for the portfolios we sell every year, but also for banks who require that work. On the right, businesses, which are closer to our core business. They produce high quality revenue. Repeatable, asset-light sold to clients, we already have using capability we have already developed and paid for. And they go across real estate services, legal services and master services. What drives those is not the size of the book. It's the number of positions which are underlying the book. And now many services, we sell against each position. So we sell per ticket, we sell per position. Moreover, a growing share of this revenue is outside our own servicing portfolio to non-captive clients, especially data advisory and real estate services. So we have 4 business -- 8 businesses. The temptation is to grow all of them, but we want. We are focusing on 4. Chosen on 3 simple test: scale, strategic fit and the ability to compound. The rest we run an old study because they are profitable. What are these 4 businesses? Growth on asset management. We will go AUM with new products, including a dedicated NPE fund, which we have incorporated in Luxembourg in last summer and build an infrastructure we already own. Our platform, our origination and coeo relationship. It scales without boosting cost. We already nearly doubled the size of the asset management business since we acquired Gardant. It was EUR 700 million assets under management. We are now at EUR 1.3 billion. Second, accelerate data services, our clear asset with untapped revenue potential -- well decades of proprietary data. and the collateral across 5 jurisdictions in a growing market. New products for our own portfolio and the part declines will change that. Legal Services. The legal recovery business is large and fragmented in Spain, especially and in a fragmented market, a consolidator are real premium. So we will build scale, integration and leverage including through careful JVs with third-party customers and platforms. And fourth is master servicing, limited penetration grew but very high penetration in this market because in Italy, for the scale of the securitization market, this has grown at a significant pace in the last years. We put it on the right of the previous graph. But the reality is that already today, we are managing 30% of securitization non-captive for third-party clients. And there is a proposition to grow it in the countries where we are present with the NPE business. So the targets are deliberately prudent entering new markets and client platform takes time, and we have assumed a measured pace, but we are already doing this business with a sizable dimension. Now this slide is about how we intend to run the company rather than what we intend to deliver. And here, we have 3 pillars. Obviously, people new role bringing in skills, we don't have today, re-skilling of people and a culture of what doValue and coeo bring together. The combination of the doValue and coeo, it's bringing 2 different cultures together and accelerate our transitioning culture. The operating model we described it's where our people will spend time on. That requires investment in team and not just in technology. It's a change management investment. Technology. We are building our AI capabilities, and that's where we spent time in 2026. We developed a system that coordinate in [indiscernible] wants and share them across the group. We simplify all their system alongside the eye program, and we also develop a way to earn revenues from the data group strategy. Also the layer of data strategy to collect data in all the countries, as already said. The porject was launched last year and will be completed in 2 months. We managed the AI program of the group with dedicated resources, each initiative as an accountable leader. We focus on [indiscernible] priorities with large impact, and we monitor them and the operating metrics they bring in. That last point is the commitment I would hold us to. We are not waiting to deliver to you in 2029. There will be milestone along the way. And we will report to you along this milestone. So you will be able to assess our progress against them. Three things we are actually doing. So we are bringing capability in-house. We show it on the next page. AI engineers are already on our payroll to see orchestration and integration and external development up has been created and will increase over time. A new sourcing model has been established and will be developed in Italy. Second is about simplification. We are separating business process from all their IT system improve infrastructure and automation services. The aim is to reduce the running cost of technology. Third is foundation connected system, a group data strategy and AI governance that complies with the it. This allows us to expand the program successfully. Now on the last session, which is probably the one where investors and analysts are most focused on. So we have now seen the old machine, the growth engine, the cash engine, the services around them, what we are doing on the cost base. What remains is the financials. And now we will go in details. But I wanted to give you the key figures and targets for 2029. EBITDA excluding nonrecurring items of EUR 33350 million, representing mid-single-digit growth. from 2025 pro forma baseline and implying a margin of up to 40%. Normalized free cash flow of EUR 100 million to EUR 120 million, a sustainable annual run rate once the investment and one-off costs required to deliver the transformation are substantially behind us. Along these targets, we have established a clear financial framework, 2x to 2.5x net leverage is, we think, an adequate level, which allows us for shareholder distribution and capital deployment. Over the plan, we expect to originate EUR 150 million of cumulative cash available for shareholder distribution and bolt-on M&A. After funding the investment required to achieve the 2026 earnings and cash generation profile. These figures are built bottom up and they are built upon the 3 businesses, which will have this trajectory. Digital collection growth is based primarily on clients we already serve and markets we already operate in. [indiscernible] assumption incorporates the current trend in the legacy book and not a recovery in the credit cycle. The efficiency program will underpin the cost trajectory and the operating leverage with a new operating model. So the base plan is cloud opportunity with timing or contribution cannot yet be assessed but could -- with the sufficient confidence but could deliver upsides. We mentioned tax collection, but also the long-term agreements, which will come in the market from competitors in the next few months. Now Davide will take you through the financial bridge and the assumptions behind it.

Hello. Good morning, everyone. Thank you, Manuela. I'm Davide Soffietti, Group CFO of the group. I'll try to transform what we have here in the last 90 minutes in numbers, P&L, cash flow and shareholder returns. Let's focus on this page for us key. Let's see how we move from the 2025 EBITDA pro forma EUR 272 million, up to EUR 330 million, EUR 350 million that Manuela just mentioned our target for 2029. So you can see the first bar on the left. The largest contributor is digital collection growth. Here, you can see this is how we build this growth. One part is already secured. We already delivered in 2026. The last -- the visible part is based on clients you already work with. Contract already signed expansion with clients. We really work and in the region, we already operate. So this is key. We are not basing this growth on new potential clients new regional is what we already manage. Let's move on the second bar. This is the negative decline of NPE, but please -- this is only how our legacy contracted portfolio will decline over the time period. This is as a strong example that is not the reality that we are not onboarding any new business. This is realistic. But just show you how the legacy portfolio will decline. And then we have also the cost part, Francesco already mentioned, Unfortunately, the cost will increase naturally because of 2 elements that are not our under control. Inflation on non-HR cost, IT spend, and increase on HR costs because of collective agreement. So what we need to work is we need to reduce our cost base, but also compensate this increase effect. This is why the efficiency part is key. Francesco already explained how we are going to act to reduce this cost. But it's a huge amount, EUR 75 million to EUR 80 million. Also here, we have a part that has already delivered in 2026. The rest is based on a real plan already faced through the plan, that Francesco mentioned, we have a lot of details we need to deliver on this. So how we tackle this decline, we are showing the second -- the third bar also with new business. So the NPE trajectory is not only the declining of legacy portfolio we will win new business. Also here, we have EUR 15 million to EUR 20 million EBITDA that has already been secured in 2026. The rest is based on a very conservative assumption of new business intake, around EUR 4 billion per year. So EUR 12 billion of new business coming from the market per year. This is, again, we are repeating the same principal, but it's key. It's based on the fact that the macroeconomic will not change. We will continue to have a very low level of new volumes from the market, and we will keep our market share. So now because the digital collection is the most important part, as you can see on the next slide how the product will contribute to our diversification profile. Now 2025, you can see that revenue side, the NPE is the most important contributor, even more on EBITDA level. Look in 2029, we are moving -- increasing the contribution of digital collection. If you compare revenues, we are growing, but you see the EBITDA contribution of the digital collection is much higher. Why? Because the volumes and the revenue growth significantly, but the base cost grows with a lower level because we have an operative leverage scale and the cost base is moving very low. So we can have increase on our EBITDA margin from low 30% up to 46% in the digital collection. And there you can see also the contribution of the value-added services that remain stable. As Manuela mentioned before, it is important to have a line that is growing and other line at that is reducing, but will continue to contribute with the action on the cost side, and we have value other service that is stable over the time. If you look at the same diversification by or region side, you can see that today, 2025 numbers, Greece has been the main contributor to our revenues, mainly EBITDA. Most 45%, you can see on top right of the slide. With the growing digital collection, we are also growing in the region where coeo is present. So you see by the end of 2029, central and northern Europe, the region coeo operate is going to 47%. This is changing our diversification profile. We are not anymore depending on a single region Greek Alain region is very important. Now we are more balanced, and we are more exposed to a business that is growing. Now the other important strategic initiative is the efficiency in the NPE and how we finance also the growing digital collection. So we have here on the left side, how we deliver our efficiency program. As you can see here, we need to offset, again, the natural increase of the cost. We need to reduce our cost base. So you see we have [indiscernible] between EUR 25 million and EUR 29 million of reduction in costs. But in the reality, the action we are taking double. You can see EUR 65 million, EUR 70 million because we need also to protect against the inflation and the pressure on the salaries. Again, I don't want to repeat Francesco explain how we are planning to reduce this base costs. On the right side, you see the investment we need to have to sustain the growth in digital collection. It's roughly same amount plus EUR 25 million. And this is how we need to finance the growth in digital collection. But again, here, the cost will increase, but the revenues and the volumes faster and it would be higher growth versus the cost base because only a meaningful portion of the cost base is linked to the volumes. Thanks to automation, operating leverage, a machine, we can grow, increasing our EBITDA margin. So on digital, we will go to 30% to 47%. And overall, these 2 elements, efficiency on NPE, growing on digital collection will bring us to have a 40% EBITDA margin at the end of 2029. Now before moving to our cash flow production I want to try to explain better coeo's future model that so far some time has been misunderstood. coeo services receivables for its client for the first 4 months. These are the real pure servicing model. After 4 months, the claims that remain unpaid are purchased by coeo at agreed pricing mechanism with the same clients. This is why we call hybrid model. It's not a pure asset-light model as the value used to operate but is fundamentally different from the purchaser model we know on the market. Why? First, coeo is not participating on any auction to buy this portfolio. It's part of the contract designed with the clients. coeo doesn't need to have access to debt to finance this acquisition, but it's financing directly with the fee they collect in the first period. So the fees we get to speed give us the funding to buy this portfolio. In this case, we secure the future fees because when we buy then we can continue to manage that book and gain fees and recover the principal we invested. And the most important here that is that coeo already managed portfolio before buying. In this case, we are completely reducing to low level the risk of the underwriting. What is the main risk of debt purchase? They need to buy a portfolio, they don't know. The portfolio comes from an external vendor and a need to assess the value. coeo can do this in the first 4 months of the management. They know exactly the loans are they're performing. They know all the data, the information of the borrowers. So they have a past mechanism that takes into account exactly the performance this is per month. So at the end, the price we paid is related on the quality of the portfolio. So this is it different from the classical debt purchaser. And then let me stress, the claims coeo are very small claims, repeatable with high rapid collection profile. This means that in few months, we recovered fully the price we have paid. This means if coeo grows means that all this purchasing or portfolio will grow consequently. If you see the slide, on the top right, today, coeo has a back book portfolio repurchased that has EUR 165 million of expected recovery collections. As you know, we already announced that we want to sell this portfolio to third-party investors, mainly because we want to accelerate our delivering path. But if we move the sale of the portfolio, the beginning '27, we just have the same [indiscernible] impact at the beginning of '27. But in the meantime, we will continue to collect cash from these portfolios, even more cash than the one we will get if we sell today. On a scenario, we'll keep this portfolio on our balance sheet until the portfolio maturity will collect a much higher cash, probably EUR 165 million, but in a more longer period and we need to keep our capital committed to that portfolio. This is why we want to sell and accelerate the deleverage impact. And on the bottom part of the slide, you can see minus EUR 140 million. This is another important metrics. In our plan, we have a cash out of EUR 140 million cumulative in the 3 years plan. This is -- we need this to have coeo to trust, those prefer investor. We after to the investor, we need to recognize the investor IRR. With this transfer, we secure the funding for the future acquisition for the future portfolio that will help us to grow. And in this way, we can grant, we can target our growth in fees and revenues. The most important, we continue to deleverage, and we keep our future to be an asset-light company. So hopefully, this is clear. Let's now move to next slide where starting for 2029 target, I tried to guide you how a EUR 330 million, EUR 350 million EBITDA transforming the EUR 100 million, EUR 120 million of free cash flow. CapEx ordinary is about EUR 30 million. Working capital will be neutral. We have minus EUR 10 million of other asset liability absorption. Here, you have again the EUR 50 million cash out because of the portfolio transfer to the investor of coeo. Again, this is -- we need this to sustain our growth and to continue to fund new acquisition in coeo. Then you have the IFRS 16 are leasing. So the what we pay in the office we operate, the infrastructure, this is roughly EUR 20 million. And then taxes around EUR 50 million. Financial charge in 2019 would be around EUR 55 million. And there we are minorities when we pay dividends is up to EUR 20 million. This is how we go to EUR 120 million of free cash flow. And this is for us our annual rate we expect to generate on a running basis once all the investments on the one-off costs required to file the transformation and our growth will be behind us. So let's see on the right side of the slide, the cumulative cash flow production of the 3 area plan. You can see the first bar is EUR 290 million, EUR 210 million of ordinary free cash flow. So we are able to generate this huge amount of cash. But during the plan, we need to invest EUR 140 million to build the earnings and cash generation profile we're targeting for 2029. What we have in this EUR 140 million, EUR 75 million are restructuring costs, mainly in 2028. Then we have additional CapEx, EUR 50 million that we invest to reach our target of growth and the reduction of the cost. And then we have the deferral payments to our -- the seller the company we bought [indiscernible] component. It's mostly EUR 40 million on coeo that will be paid in '28 because coeo is performing high of our expectation and also of the seller expectation. And then it's not to Greece. After the plan, we just have the last installments to be paid in Greece, that is million that will be paid in 2030. After this, we don't have any more. Any earnout deferral consideration to be paid in the future. So after funding this investment, the federal payments, we have EUR 150 million to EUR 170 million of free cash flow available to remunerate shareholders to further -- to reduce the gross debt, and to have bolt-on M&A or a combination of these 3. So this cash, if you can see the next slide, will help us to deleverage. Again, [indiscernible] our guidance for '26 is to close in a range between 2.4x, 2.6x leverage. Thanks to the increase of EBITDA and the cash generation, we will go down to 1.6x before any dividend remuneration, buy back or dividends. [indiscernible] say that our sustainable range of leverage is between 2x to 2 5x. This means that the difference between the EUR 1.6 billion and the higher end of the range, 2.5 create and capacity we can allocate. So between 150, if we should stop 2x to 2.5x [indiscernible] if you go to 2.5x So we have the capacity we can allocate to the investor debt and M&A. But in the meantime, you can see in the left down part of the slide, we are going to repay back the term loan with a bank of EUR 90 million, EUR 30 million per year. So in the meantime, we are able to deleverage up to 1.6%. We are reducing the gross debt and the financial charge. And we are ready also to have a very strong cash position up to EUR 320 million before any dividend payment or buyback. So this means that we are also ready to finance our next debt maturity that will be only in 2030. So this is the difference between a leverage target range. So the [indiscernible] will give us this capacity how you want to allocate this capacity? Again, our shareholder distribution. The dividend policy will be to pay to our shareholders through dividends or share buy back up to 80% of our net ordinary income. Then we can use the cash for bolt-on M&A. These are important for us. How we want to develop this bolt-on M&A? Mainly of 4 type of M&A. First is client-led geographical expansion, specifically to support our digital growth. Second, acquiring license, team's capability to reinforce our core system and accelerate the entry new markets. Third is technology, to enhance platform and finally selected opportunities in adjacent market of credit business management. So on M&A, our approach is simple. An acquisition must accelerate the strategy that is already in place. We don't want to have M&A in new business, in new regions where we are not present. We don't have a clear strategy to grow. And any transaction, any M&A transaction must meet 3 conditions, limited execution and integration risk. Disciplined valuation with accretive return and funding within our sustainable leverage range between 2x and 2.5x. The plan representing assumes only a limited contribution of bolt-on M&A. Transformation acquisitions are not included in this plan and are not required to deliver our targets. If a large opportunity arises, we'll assess it separately on its strategic and financial merit. So with that, I hand over to Manuela to conclude the presentation. Thank you.

Yes. We have 3 earning engines. Support different financial outcomes. The digital collection provide profitable growth. We indicated the EUR 155 million to EUR 165 million EBITDA by 2029, with revenue increasing at 15% and operating leverage supporting the margin expansion. The NPE servicing business, supported by an operating model transformation and cost discipline to protect earnings despite the decline in the legacy stock. And the value-added services contributing for EUR 50 million to EUR 60 million with stable and recurring up mid-single-digit profitability. This will end up in EBITDA of EUR 330 million, EUR 350 million of recurring EBITDA with expansion of margin up to 40%, supported by the cost efficiency program we have highlighted. The cash conversion is EUR 120 million, well under the normalized free cash flow, a sustainable annual rate after CapEx, working capital, taxes and cash interest within a leverage target of times, we can deliver up to 80% distribution, including dividends and share buyback. So this is how the platform we have built translate into earnings. Our earnings translate into cash flows and now cash translate into value for shareholders. We are ready, we are set, and we are now the scale to grow further. Before we open the floor, one final announcement. We believe in this plan, and we are betting it with capital. A EUR 10 million share buyback problem, we start has just been approved and will start in the coming days. Why we did that for 3 reasons. One, the valuation gap. We think the stock is undervalued. Second is the cash flow that presented today, which are not reflected in the current share price. The other point is conviction around the plan. All this level buying back shares is the best use of our incremental cash. And last is accelerated return to shareholders. The buyback forward is part of the distribution we plan to make over the plan and is fully consistent with our financial discipline. It's all an impact of 0.1x over leverage within our targets of 2x to 2.5x with covenant headroom and liquidity managed at holding level within -- with the room available. So our distribution policy is unchanged up to the 80%. The buyback does not preempt further dividend in 2027. That further distribution will be calibrated based on leverage and liquidity following the disposal of the portfolio. Now we are ready for your questions. I will hand over to Daniele to manage all questions that are not coming from the room.

Thank you for -- to all of the speakers. That has been a very detailed presentation. And I think we have a lot to digest and a lot of figures to put in your spreadsheet. So we are ready to take your questions. Of course, Investor Relations is available offline, but I encourage you to interact directly with the key people responsible for the execution of this plan. People connecting from the webcast are very welcome to submit the questions through the platform.

Tommaso Nieddu from Kepler Cheuvreux. The first one is on the phasing, how should we think about the phasing of the EBITDA growth over 2027, 2029, also because you are targeting an increase in coeo EBITDA margin from 28% to 47% in 2020 which is a very significant improvement, very ambitious. But just I'm trying to understand how should we track it. The second question is a clarification on the growth of coeo. Digital collection, EBITDA CAGR. But from what I understood, you assume this growth to come mostly from existing clients and geographies while there are very conservative assumptions from new client wins and expansion into other regions. So just trying to clarify that. And then -- so you have presented the business model of coeo. It's very clear. However, if I'm not mistaken, I think the first presentation of coeo at the time of the acquisition, we talked about the revenue structure in Southern Europe as it should be different as the collection fee should be borne by the client and not by the debt. So just trying to understand also if you address that and if there is any evolution on that side. And then the very last one is more curiosity since in one of your slides, you show France as one of the countries where we should expect NPEs to go up, but you are not operating there.

Because of the action we are going to take on the NPE business from now to the end of we expect a decline on the NPE rebalance by growth of coeo. coeo today is delivering a growth which is above our target -- original targets. So we had mentioned EUR 60 million for this year. You will see already the 9 months will be above that number and the likes. So we see a stable 2027 versus '26 for these reasons and then a steady growth from there up to the target of 2029. Now on coeo contribution, on the business side and now coeo growth will come from Elias will answer. But going back to your point around the other countries, we are assuming to penetrate and was part of the original plan, the NFC, the nonfinancial claim business in Southern Europe. And this is part of the trajectory we envision for the digital collection. There, we are already present with active clients through the TEAM 4 platforms in Spain before coeo. We are managing now coeo clients in Spain, and that will go up. We have less of that in Italy where we started the coeo clients, but we have only few utilities. So we need to penetrate that market through their technology and [indiscernible] will be the same. We are already doing pilots for certain clients, and we will add coeoclients. So on the -- we have clients we're already working in these markets. The other point was around the revenue model and Elias can explain it better. But we have already a different revenue model in the U.K., which is not regulated. What they are paying us today in Spain and in Italy, is paid by the client. It's not paid by the customer, and it's a percentage of the collected amount. The main difference is in a much we collect. We collect already as small tickets in Spain, as I said. But usually, you can let between 5% and 10%. What we are collecting today on -- by now operator in Spain is 60% to 70%. And the fees are the same as the others. So you can see that the amount you get in is much higher. The last point is on France. France is a natural trajectory for the coeo business, where they have done a start-up approach as they've done in the Nordic countries. So they can manage it out of the Belgian and Dutch business. Clearly, if we wanted them to go with an NPE business, we would have to go with a platform there. But the expansion we are focusing here is more on the digital side. Maybe Elias, you can support me on the business side of coeo.

A lot of questions. So first, with which clients will we grow and in which regions, apart from the potential diversification into France, we have in Europe, most countries already entered where we want to be. So naturally, if you are in a start-up position like, for example, in the Nordics, growth rates, which are very, very high, easier to achieve than when you are already in a market-leading position. Now on the client side, we are doing both. We are growing with existing clients, and we are growing with new clients. So it's rather leveled out. And on the revenue model in Spain, the 70% collection rate is a little bit ambitious, Manuela, let's say, in the area of 30% to 40% is still...

Because we noticed in last to are here, but yes.

Okay. So and yes, the business model or the revenue model is just, as Manuela described, it's not fee-based, born by the debtor it's by the creditor commission fee. Now on the EBITDA margin, I was just looking up one figure, coeo Group has 24% more revenue per operating FTE year-to-date August. So this tells you something about the EBITDA margin increase that is coming from automation. I was trying to bring through that we were always rather automated compared to peers. But with the AI, this is really, really a game changer. And this is something we see now. I mean, the start we did -- at first, you need to recruit people. And an AI engineer is typically costing more than an operational collector. But now we are in a good position that this kind of fixed block for the AI engineers and for the PDUs, you have to rent at the cloud services. This is rather stable. And now we see even more EBITDA margin increase there.

Mentor from Banco. So I wanted to ask, we are going to see in the future clearly positive impact of AI on the cost basis and on the EBITDA side. but don't you think that in the long term, this could be counterbalanced on the top line side because the servicing becomes more commodity. So in the long term, servicing pricing goes down?

Yes. This is what we are assuming the plan when we speak about the new model for servicing. The new model will be a lower base fee and similar collection fee. So that's what we are already assuming for the new contracts. The fact is that in our plan horizon, we don't have a decade of the current contracts. But the one we assume new will come with this new model. We have already experienced it because we have repriced, for example, the Santander contract. The point is knowing breakeven point and lowering the operating leverage that allows you to protect the margin. But that revenue trajectory, it's the one we have already assumed.

Just for clarification, so you are sure that in the long term, this won't be -- have a negative net impact on the very long term.

I think we are assuming here a decline already of the NPE profitability to around EUR 120 million. from the current level. So in the very long term, clearly, the investment we are doing upfront to lower that cost protects your buffer. If we were keeping the same operating model that would have a higher effect, but we are not. We are acting upon it. That's why we are investing upfront to lower that cost base in a significant way.

Davide Giuliano from Equita. The first one on cash generation. You indicated 150 million, EUR 170 million cash generation during the plan and recurring free cash flow of about EUR 100 million, EUR 120 million in 2029. It seems that free cash flow generation after restructuring costs may be a little bit back-end loaded. So could you please detail better the split of free cash flow among the different years and the impact in each of these years coming from restructuring costs and additional CapEx? The second one on M&A. It seems to me that you stressed quite a bit the available fair power of at least EUR 150 million. Apart from bolt-on acquisition, could you give us more details on the possible transformational targets you may look, I mean companies to improve the scale in Spain, companies to a larger geographical footprint and/or further consolidation in Italy? And the last one on cumulative net inflows during the plan. So you targeted EUR 12 billion during 2027, 2029, so an average of around EUR 4 billion per year. If we look at the full year '25 forward flow contracts, we see that already forward flow contracts exceed the average target. Can you elaborate on the composition of net inflows that you expect going forward?

Davide will take the first one on the cash generation. Davide?

'29 is really not a run rate because we don't have any more extra CapEx to finance debt formation have any more restructuring costs you don't have to pay any earnout. '28 will be the year where we have more cash out because we have a concentration of the EUR 75 million restructuring costs will be mostly concentrated in '28. In '28, we had to pay EUR 40 million over and out. So you cannot just make them then EBITDA, [indiscernible] will grow from 2 to line progressed in '28. And '27 started with a say, EBITDA in line with the expectation of '26. So we will have the main part will be the higher CapEx roughly versus the EUR 30 million. So this is more close to EUR 40 million CapEx. And we have a piece of the restructuring costs out to 75 million, EUR 50 million will be spent [indiscernible] is a mean axillary component. Just a comment on the GBP. The EUR 4 billion we highlighted is only new mandates on the market. It's not included flows that is always roughly EUR 2 billion higher -- it be higher of EUR 2 billion.

So on the M&A front, the -- with the transformation -- the bolt-on is linked to the leader transaction of consolidation we might consider. For us, transformative or transaction of the size we have done in the last 2 years, and that's not -- we were assuming here. We are tackling tactical transaction in markets to sustain certain businesses. To give you the example, U.S., if we have to find the right opportunity there, it needs to be through acquisition, as Elias explained. But the companies have not large size. So nothing comparable to the EBITDA of coeo this year or of Gardant when we acquired it. The -- as I said, they are to support either the digital collection strategy expansion to certain countries where we go organic or the buildup of the value-added services proposition in the current existing markets.

Thank you for the presentation. Antonio Gianfrancesco from Intermonte. I have several questions. The first one is on the NPE business. because I want to ask you if you can give us a bit more color on Italy specifically? Because I was wondering how much of the EUR 65 million, EUR 70 million efficiency program is expected to come from Italy. And where do you think Italian EBITDA of that business can structurally stay after this cost reset? The second one is still on NPE and still on Italy, sorry, for that because I understood that the market is ringing this is clear. And in this context, you want to maintain, you want to preserve your market share. So my point is, how should we think about the fee margin of new mandates versus the legacy book? I'm not referring to collection fee but to management fees. And I want to understand if you are assuming some pricing pressure in defending market share? Or what is your strategy to protect this? The third one is a follow-up on the digital collections because you are targeting a very strong growth and a significant margin expansion. So in a market that you described as large and quite fragmented, I want to understand what type of competitive pressure do you expect in the coming years? And what the dynamic relation of pricing?

Now, I'll take the first 2, and Elias will let me with the last one. The -- of the EUR 65 million to EUR 70 million is mostly focused on countries which is Greece, Italy and Cyprus because the restructuring has already happened in Spain. And the North will be Italy, size-wise than Greece and then Cyprus. The -- we have done a lot in the last 2 years in terms of reorganization and cost efficiencies. But there is more to come. And we have probably of that amount, 40% is on the Italian front. And the level of EBITDA on the Italian market will stabilize on the NPE side between 55% with the additional business growing, bringing it to the later part to around 70%. Now in terms of market share, we were consistent with our market share growth this year. So after the acquisition, we went to 2025, and you have seen the slides where in terms of winning new mandates, we kept that amount. And this didn't come to the expenses of margin. Italy is already the market with the lowest base fee across all the others. It's around 4 to 5 basis points. So we are not expecting that devaluation. But it will be more flexible contract structure shorter. So you need -- because you have these shorter maturities, you need to have a much more flexible cost in guess things change or you need to change client and the likes. So that flexibility is quite critical. Now on the digital collection, Elias, if you can explain how our growth and margin are developing.

So thank you for the question. On the top line growth, it is the clients that we have today and all the new wins we got already and this is really a bottom-up calculation country-by-country, order entry and then coming to revenue. What was not stressed so far is a quite substantial back book that we have today already and if you're growing like we did all the time, you are focusing really on the front-end book very much. So we have a quite nice substantial potential year cash out what we have already on our machine. Now on the competitive pressure in pricing, so in the amicable part before purchase in most geographies, prices are set by law, more or less. But yes, I see what you mean with price pressure when we purchase, as Davide mentioned, after depending on the client, depending on the structure after a couple of months, yes, there is a competitive pressure, definitely. So this is in I would say, any kind of servicing business that you are working in a competitive landscape. What is very typical for us is that our clients run a -- they call it benchmark panel. So we are -- sometimes we are the sole service provider. This happens as well. But the rule is, I would say, that minimum per country, per product, we have one or more competitors. So this is nothing new coming up. This was always there. Now strategically, what can you do? You can always try to be the cost leader. And I hope I brought this through that we were always very technology focused and being a front runner on the AI piece. And this is not easy to copy. Believe me, this is not easy at all. There are a lot of mistakes you can make and it's a lot of money, you need to invest in the beginning, and this is what we have done already. So we see a couple of very, very good competitors out there, but typically not the well-known incumbent names of the larger players. So we are not very afraid to compete against those.

And if I can, just a very brief follow-up on that because I want to understand when you have projected 47% margin on digital collections, you assume a broadly unchanged fee scheme, fee framework in terms of regulatory risk because as you said, in some geographies, the -- this is set by local regulatory. So it's right.

So regulation is not very often our friend, sometimes it is. So for example, in Germany, there is a big act about the remuneration in fees that lawyers can take and debt collection companies are taking this as a reference. And whenever you have periods of inflation, those kind of prices are increased. So we have seen this in Germany. We have seen this in Austria, and this is quite natural. I mean if you are selling prices from the government and you have an inflation, it's normal and quite fair to increase prices. So sometimes it's actually even the friend. But in other instances, for example, in the Netherlands under the new CCD 2 regulation, we see some headwind on the regulation. So -- can I now foresee what regulation will be in 2028 and '29? More or less, there might be surprises. But what we can see now, we have embedded in our planning.