DDM Holding AG: Year end report, January–December 2015

Profit of EUR 1.8M for the year

Highlights fourth quarter 2015 
- Net collections increased by 151 percent to EUR 15.9M (Q4 2014: EUR 6.3M) 
- Cash EBITDA increased 198% and amounted to EUR 14.2M (Q4 2014: EUR 4.8M) 
- Profit for the period of EUR 4.8M (Q4 2014: loss of EUR 4.2M) 
- Gross ERC as at the end of December 2015 is EUR 72.2M (Q4 2014: EUR 60.4M) 
- Granted new bank loan of SEK 12.5M at significantly lower annual interest rate than current bond financing 
- Pipeline of future transactions remains strong

Highlights 2015 
- Net collections increased by 87 percent to EUR 27.5M (2014: EUR 14.7M) 
- Cash EBITDA increased 119% and amounted to EUR 21.7M (2014: EUR 9.9M) 
- Profit for the period of EUR 1.8M (2014: loss of EUR 6.4M)

Comment by the CEO
The last quarter of 2015 was marked by the signing of the largest transaction in DDM’s history and the return to profitability, in line with our commentary in previous quarterly reports.   We have continued to deliver on our opportunistic investment strategy in CEE with this, our second Hungarian transaction in 2015. This is also the second transaction during the year that we do together with a well-reputed international capital partner, allowing us to capitalize on previous experiences and adding to DDM’s already strong reputation in the region. The investment is funded largely from existing funds.   Our focus is now turned towards the implementation of this transaction and raising additional funding for further investments and growth.

Gross ERC (Estimated Remaining Collections) increased by 20% during the fourth quarter 2015 as compared to the same period in 2014. Compared to the third quarter of 2015 this has increased by 26%.

Net collections in the fourth quarter of 2015 amounted to EUR 15.9M, an increase of 151% compared to fourth quarter 2014. For the full year 2015, net collections increased by 87% compared to the full year 2014.

Cash EBITDA (net collections less operating expenses) during the fourth quarter amounted to EUR 14.2M, an increase of 198% compared to the same period in 2014 while for the full year 2015 it increased by 119% compared to the full year 2014. Cash flow from operating activities before working capital changes for the full year 2015 was negative EUR 2.5M, compared to positive EUR 3.8M for the full year 2014. On the back of the recent acquisition in Hungary, we expect significantly stronger operational cash flows in 2016.

We continued to manage our portfolios during the quarter and as a result at the end of the quarter we divested a portfolio in Poland that was not meeting our investment return requirements.  This allows us to reinvest the funds in a portfolio that better mirrors the opportunities we see in the market and provides higher returns.

We remain positive on the outlook for the Company on the back of our strong full year results and improved financial metrics. We anticipate the strong pipeline of portfolios for sale across our region to continue and outpace industry growth in Europe as a whole. DDM is well placed to continue its rapid expansion in its investment activities.

Funding is key to continue to grow our investments and operations, and is a major focus. We aim to raise additional funding, both equity and debt, targeting a long-term and sustainable capital structure and cost. With the improved financial position on the back of the fourth quarter results we feel confident that we will be able to continue deliver according to our strategy.

For more information, please visit DDM’s website at www.ddm-group.ch or contact:

Anders Antonsson, Investor Relations
Mail: investor@ddm-group.ch | Tel: 46 8 4080 9030

DDM Holding AG (Nasdaq First North Stockholm: DDM) is a key acquirer and manager of distressed assets. Since 2007, the DDM Group has built a successful platform in Eastern Europe, currently managing 2.3 million receivables with a nominal value of over EUR 2 billion. DDM Treasury Sweden AB (publ) (NGM: DDM1) is a subsidiary wholly owned by DDM Holding AG. Pareto Securities is DDM Holding AG’s Certified Adviser.

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