PRA Group (PRAA) The Sidoti Small-Cap Virtual Investor Conference summary

Business transformation and leadership

• Senior leadership team revamped, with 80% new or in new roles, bringing deep financial services experience.

• Operational urgency and value creation are key focuses post-2023 loss and management change.

• Diversified operations across 18 countries, with a 25-year track record.

• Transformation plan includes optimizing investments, operational execution, and cost structure.

• Early results show strong rebound and ongoing improvements in U.S. and European businesses.

Financial and operational performance

• $1.3B in portfolio purchases in the last 12 months, up 9%; $1.8B collected, up 10% YoY.

• Estimated remaining collections at $7.3B, up 22% YoY; return on average tangible equity at 9.4%.

• Legal and call center channels each contribute over 40% of global collections.

• U.S. legal cash collections in Q3 2024 rose over 50% YoY due to process improvements.

• 25% of U.S. collectors now offshore, expected to reach 50% in H2 2025, driving cost efficiencies.

Industry dynamics and market outlook

• Strong U.S. portfolio supply driven by rising credit card balances and charge-off rates.

• Attractive pricing environment due to high supply and limited buyers; purchase price multiples rose from 1.75 to 2.1 since early 2023.

• Regulatory and consumer environments are stable; interest rates absorbed.

• European business remains robust and cost-efficient, with 40-50% of business outside the U.S.

• No single geography is more profitable; global investment framework ensures balanced returns.