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

Good morning. This is the Chorus Call conference operator. Welcome, and thank you for joining the doValue First Half 2026 Financial Results Presentation. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Daniele Della Seta, Head of Investor Relations of doValue. Please go ahead, sir.

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

Good morning, everyone. The first half of 2026 marks an important step in the evolution of doValue. The group is now more diversified across geographies, clients, and credit segments. Digital receivables have become a material part of our revenue and earnings base, while our traditional servicing platform continues to provide scale, visible cash flows, and AI-insulated servicing capabilities. The half year delivered on the priorities we set out for this phase: growth in digital receivables, profitability, a stronger capital structure, and an established servicing platform. Let me highlight 4 key developments from the first half. First, digital receivables. The business of coeo continued to deliver strong growth. Revenue increased by 25% year-on-year, supported by 5 million new files onboarded during the period. coeo client base continued to diversify beyond its historical anchor relationship and growth remains ahead of the assumption in our original acquisition case. Second, pro forma group EBITDA, excluding nonrecurring items, reached EUR 121 million. In the second quarter alone, EBITDA grew 21% year-on-year. Profitability benefits from coeo inputs on AI automation, while the doValue business continued to implement disciplined cost actions. Third, we further strengthened our capital structure. The recent refinancing extended our debt maturities and is expected to generate approximately EUR 4 million of annual interest savings while enforcing liquidity and financial flexibility. The picture of the first half is a group with a faster-growing engine, a more efficient cost base, a longer and cheaper debt structure, and a servicing platform that keeps replenishing itself. That is the base from which we run the second half. Let's now turn to Page 4, and look more closely at digital receivables. This is the engine of the group next phase of growth and in the first half, it accelerated. Revenue was up 25% year-on-year and EBITDA reached EUR 46 million. The quality of that growth matters as much as the rate. Germany, which is by far our largest market for digital receivables, grew 21% year-on-year. This is scale compounding on an already large base, not a small base effect. And it comes with efficiency, not with headcount. Indeed, new files under the full-time employee were up 21% year-on-year as automation absorbed the additional volume. Second, diversification is accelerating. Collection revenue from clients other than coeo anchor customers was up 50% year-on-year. Behind that number, there is a complete commercial pipeline. We signed 11 new contracts this year, worth more than EUR 10 million of incremental annualized revenue and around 350,000 new files per year across 6 different sectors: telcos, utilities, insurance, mobility, commerce, and financial services. This is the practical answer to the question of whether the platform can extend beyond this anchor relationship and beyond buy now, pay later. It already is. Third, a word on the own portfolio, which is the part of this business that is least familiar to our investors. We hold the receivable portfolio with an expected market value of EUR 120 million, EUR 140 million, with an estimated remaining collection value of EUR 170 million. Let me clear on where this is going. The disposal process on this portfolio is progressing, and we expect to complete it by end of this year. At that point, the group will be fully asset-light, a pure servicing and receivable management platform with no balance sheet exposure to the receivable we've managed. Two points are worth making while that process is completed. First, this portfolio is limited in size relative to our balance sheet, and it turns into cash very quickly. EUR 61 million of collection in 6 months against EUR 120 million, EUR 140 million of market value speaks for itself. To give you a measure of how quickly this portfolio converts into cash, receivables purchased in the second Q have already returned 20% of the amount invested during the same quarter. Second, for as long as we own it, the group retains that cash generation. So the time to completion is not a cost to us. It has cash flow in the meanwhile. We will complete the sale on the right terms, and we still expect that to be within this year. Let's now turn to Page 5, which shows how that growth is actually produced, deepening automation in our core markets and scale in the newer ones. Let's start with automation. Total automation in Germany reached 77% at the end of June, up from 69% in December, 8 percentage points in 6 months. In practice, cAI, our proprietary AI platform handled around 1.3 million interactions on a fully automated basis in the half, 400,000 more than in the second half of the year and more than 1 million files were closed with no human involvement at all, up 23% from 854,000 a year ago. The reason we spend time on the numbers is that they translate directly into unit economics. Human-assisted contacts per file were down 24% versus the second half of '25. The same file now requires materially less human effort, which is what lowers our cost to collect. The automation is moving up the complexity curve, not just handling simple cases. By June, 62% of cAI-related e-mails were processed straight through against 41% in January and 75% of documents against 49%. This is deployed technology with measurable outputs in production environment, not a pilot. Now the second half of the page, scale outside Germany. Revenue in the markets outside our core grew 28% to EUR 50.6 million, and the newest platform are the fastest growing. In the Nordics, revenue reached EUR 15.6 million, up 83%, with Sweden at EUR 11.6 million. Norway went from EUR 0.1 million to EUR 1.9 million and turned profitable in the second part of the year of operation. In DACH, outside Germany, revenue was EUR 12 million, up 52%, with Austria at EUR 7.6 million, and Switzerland at EUR 3 million, delivering its first profitable half year. Finland has launched and is generating its first revenue, and Denmark is next, which will bring the group to 14 countries. The pattern here is what matters more than any single country. The greenfield playbook is repeatable. It requires very limited capital and it reaches profitability quickly. Finally, the box at the bottom of the page, which is the part I would draw your attention to because it's new. Cross-selling between doValue and coeo has moved from intentions to signed contracts in both directions. doValue signed and is already operational on a new mandate with German banks. Relevant because banks carry around EUR 50 billion of nonperforming loans, a stock up 67% since 2020 in a servicing market with no skilled incumbent. In the other direction, coeo signed contracts with payment and e-commerce operator in Spain and Italy, where our operation is now active, and Greece follows in September, also with the first deployment of the cAI voice agent in a doValue market. Let's now turn to new business on Page 6, where I want to start with the single most important fact on this page. We have already delivered the new business target of our business plan. Since the start of the plan, we have won EUR 27 billion of new business against the '24-'26 target of EUR 24 billion. The target is achieved 6 months before the end of the plan. And in the first half alone, we added EUR 3.1 billion of GBV made up of EUR 1.5 billion of new mandates and EUR 1.6 billion of forward flows. On top of that, secondary sales amounted to an overall EUR 0.5 billion, of which EUR 0.2 billion being the first-ever sale of reperforming loans in Greece occurring in the first quarter. By region, the picture is uneven. Spain had a strong half, adding around EUR 450 million of new business from 2 banking institutions. One in new relationship, the other is the shifted contract perimeter with Santander. Italy signed around EUR 200 million of new mandates with forward flows from Banco BPM, and BPER growing 46%, mostly driven by the contribution of Banca Popolare di Sondrio within the BPER perimeter. In the Hellenic region, activity was visibly softer in the second quarter as market participants adopted a wait-and-see approach while the Katseli framework evolves. Now a word on the quality of this new business because volume alone would be a misleading way to read this page. The market is more complex, particularly in Italy, where collection has been softer and the flow of new business across the market has slowed in 2026. Looking at the second half, we expect several portfolios to come to market from secondary transactions in the coming months. For doValue, although with a lower collection rate, this is generally new business, new mandates, new investor relationship, and incremental GBV under management. Before turning to guidance, let's look at the market backdrop on Page 7. The European NPE market has evolved into a new equilibrium, underpinning more than EUR 2 billion of addressable servicing revenue across our core footprint over '26, '29 period. This is not the same market we had 10 years ago when banks were dealing with very large legacy stocks at the peak of the NPL cycle. The market is smaller than the peak NPL market of the past, but more disciplined, more returning, and more sustainable. And this is where the role of the servicer becomes systemic. The second message is equally important. The opportunity is no longer limited to banking NPEs. Technology and AI are making it economically viable to serve adjacent asset classes that were historically less profitable under a traditional human servicing market. This is exactly where the combination with coeo becomes strategically powerful. doValue brings scale, licenses, institutional relationships, and deep servicing expertise. coeo brings a highly automated AI-enabled platform for small ticket, high-volume receivables. Together, we can address both sides of the market, the new equilibrium in banking NPE, and emerging opportunities in the other credit and receivables segments. On the basis of this strategic backdrop, let me turn to what this means for our full year 2026 outlook. Across our markets, performance remained differentiated. Italy continues to face low primary NPE volumes as bank default ratio remain near historical lows. The aging stock of existing portfolio and the slower-than-expected expansion of value-added services are adding to the challenge. Greece is performing well, although regular development may delay some secondary market transactions, while Spain continues to progress, but as yet not on optimal scale. Most importantly, coeo continues to deliver double-digit growth, ahead of expectation and structurally less exposed to the NPE cycle. Taking these 3 elements together, we believe our full year 2026 pro forma EBITDA guidance of approximately EUR 300 million remains within reach, assuming that coeo continues to perform broadly in line with the first half and the group is able to adapt its cost base to the new market reality, both areas where management is strongly focused on and has delivered. On leverage, delivery remains dependent on 2 key drivers: completion of the coeo receivable portfolio sale, and the expected normalization of NPL working capital, with encouraging trends already visible in the second quarter. At the same time, the strategic direction of the group is clear. We are building a broader, more diversified and more technology-enabled platform, with digital receivables providing an additional engine of growth, and the servicing franchise continue to generate scale and cash flow. This give us confidence in the group ability to navigate the current market environment and deliver shareholder value beyond 2026. You will hear more on this on the next -- 18th of October in our Capital Markets Day. Now I will hand over to Davide, for a detailed financial overview of the quarter.

Thank you, Manuela, and good morning, everyone. Let's start on Page 9, with the second quarter financial highlights. The second quarter results provide the first full quarter view of the larger group, including coeo. Gross revenue increased by 3% year-on-year to EUR 181 million, primarily reflecting the first time contribution from coeo. Net revenue increased by 17% to EUR 148 million. The difference between gross and net revenue growth reflects the different operating model of coeo, where a large proportion of cost is recorded through outsourcing fees. Outsourcing fees, therefore, represented 18% of gross revenue in the quarter. EBITDA, excluding nonrecurring items, increased by 21% to EUR 58 million, supported by contribution and resilient profitability in the Hellenic region. The EBITDA margin remained broadly stable at 32% compared with 34% in the second quarter of last year. This reflects the contribution from coeo, resilient stability and operating flexibility in the Hellenic region, partly offset by the weaker performance in Italy. Below EBITDA, net income, excluding nonrecurring items, was EUR 3 million, broadly flat year-on-year. Higher EBITDA more than offset the effect from the negative items arising from the consolidation of coeo, including PPA amortization and the interest expense associated with the bond issued to finance the acquisition. On completeness, on first half pro forma basis, assuming coeo has been consolidated from the beginning of the year, EBITDA, excluding nonrecurring items would have reached EUR 121 million, while group net income, excluding nonrecurring items, would have remained positive at EUR 16 million. Both these figures are relevant because they are coherent with guidance figures. Finally, coeo's own portfolio generated EUR 31 million of cash collection in the quarter and EUR 61 million in the first 6 months. These collections relate to principal and that fall outside EBITDA, while the related collection fees are recognized in the gross revenue. We do not think cash EBITDA is the most appropriate metric to assess the operating performance as our model remains fundamentally servicing. However, while the portfolio is still on balance sheet, if you want to look at EBITDA on a more comparable basis with debt purchases, the information provided on portfolio cash collection for investments and related accounting treatment gives you the elements to do so. Overall, the second quarter showed a stronger scale and broader earnings base of the enlarged group. It also shows that this diversification into a growing market provides a meaningful buffer, although not yet entirely offsetting the softer dynamics affecting part of the traditional servicing business. Let us now move to Page 10, where we show how significantly the group's revenue mix has evolved over the past 12 months. Digital collection already represent 31% of group revenue compared with 43% from NPL servicing. One year ago, NPL servicing accounted for 64% of group revenue and value-added services was 17%. Today, the enlarged group has significantly more balanced mix, 43% in NPL servicing, 31% digital collection, 12% non-NPL servicing and 14% value-added services. This is more than a perimeter effect. It represents a structural change in the composition of the group. Digital collections provide the group with a meaningful exposure to structurally growing markets, supported by the continued expansion of consumer credit, digital commerce, and recurring outsourced receivables management across financial and nonfinancial clients. They also significantly expand our presence in Central and Northern Europe. At the same time, specialist servicing remains a sizable and highly relevant franchise. NPL servicing is still the largest component of group revenues, and it continues to provide scale, long-standing client relationship, specialist state management capabilities, and cash generation across Southern Europe. The strategic value in the larger group comes from combining these 2 platforms. We retain our leadership expertise in complex servicing while adding a digital collection business with a broader exposure across geographies, clients, and sectors. The more balanced revenue mix reduces the group's exposure to individual NPL market dynamics while retaining a sizable and resilient credit franchise. This is particularly important in the current market environment where traditional servicing trends remain different across countries. Such trends do not remove the near-term impact of the softer dynamics currently affecting Italy. However, the contribution from digital collection is already mitigating part of that pressure and, over time, should make the group structurally less dependent on any single geography or sales cycle. Overall, the slide shows a group that is materially more diversified than 12 months ago, still anchored in specialist servicing, but now complemented by digital collection platform that already represents almost 1/3 of revenues and provides an additional engine for future growth and earnings resilience. Moving to Page 11, we can see how the broader revenue base translated in EBITDA. EBITDA, excluding nonrecurring items, increased by 21% year-on-year from EUR 48 million to EUR 58 million, primarily reflecting the first-time contribution from coeo and the resilient profitability of the Atlantic region. The EBITDA margin remained broadly stable at 32% compared with 34% in the second quarter of last year. This demonstrates the resilience of the group despite the pressure affecting business. On a first half pro forma basis, assuming that coeo has been consolidated from the beginning of the year, EBITDA excluding nonrecurring items reached EUR 121 million, up 25% compared to the first half 2025, with margin of 33%. The first message is scale. The larger group is now operating from a materially broader mix base. Q2 EBITDA increased to EUR 68 million and first half pro forma EBITDA to EUR 120 million. The second message is margin resilience. EBITDA margin was 32% in Q2, and 33% on a first half pro forma basis. This reflects the contribution from coeo growing as increasingly automated platform together with the operating flexibility of servicing business. At the same time, we are not ignoring the trend impact of the traditional servicing business. Italy remains affected by softer collection, lower primary NP volumes, and a lower contribution from value-added services. Proactive cost mitigation measures are already underway to align the cost base to the current volume trends. Spain and the Hellenic region continues providing support to the group's profitability. In particular, the Hellenic region remained resilient despite softer market activity while Spain continued to benefit from cost discipline as the business progresses towards optimal scale. Moving on to Page 12. I would like to spend a moment on coeo's own portfolio, which is an important component of both the cash generation profile of the business and our transition towards an asset-light model. The first point is that this is a fast turning and cash-generative portfolio. At the end of June, the portfolio had an estimated market value of approximately EUR 120 million to EUR 140 million and estimated remaining collection of approximately EUR 170 million over 120 months. These figures refer to expected principal collection and therefore, exclude the collection fees generated by the platform. The portfolio comprises approximately 8 million files and generated EUR 60 million of principal cash collection in the first half of 2026. This collection were recorded for the benefit of doValue balance sheet and demonstrate the speed at which the portfolio converts into cash. The rapid conversion is also visible in the most recent investment. Of the EUR 48 million reinvested in portfolio purchases during the second quarter, 20% had already been collected by the end of June. This is the defining feature of coeo's portfolio model. Capital is deployed into granular receivables that start converting to cash very quickly. The second point is strategic. Our objective is not to maintain a permanently capital-intensive portfolio business. As announced at the time of the acquisition, our strategy is to divest the full investment portfolio and maintain the group as an asset-light servicing platform. We continue to target completion of the disposal within 2026, preserving coeo servicing and technology capabilities while removing the balance sheet intensity associated with the portfolio ownership. Until the disposal is completed, the portfolio remains a temporary but meaningful source of cash generation. The final point is how investors should think about the portfolio while it remains on our balance sheet. From an operating perspective, this is not strategic departure from doValue servicing-led model. It is a portfolio that come with coeo. It generates significant cash while we own it and it is expected to be sold as part of our transition to the full asset-light structure. At the same time, as we discussed earlier, the related cash collection and investments are important for understanding cash generation and comparability with debt purchaser. We do not intend to manage the group around debt purchasing metric, but we are providing the information needed to bridge that view if analysts choose to do so. The key message is therefore straightforward. The portfolio is fast-growing, cash generative and on track for disposal, while the strategic destination of the group remain an asset-light servicing and receivable management platform. Let's now move to Page 13, where I will take you through the main items between EBITDA and group net income. EBITDA excluding nonrecurring items was EUR 57.6 million in the second quarter compared to EUR 47 million in prior year. Nonrecurring items within EBITDA amounted to EUR 7.4 million, mainly linked to the acquisition of coeo. After these items, reported EBITDA was EUR 50 million, up EUR 5.5 million year-on-year. Below EBITDA, depreciation, amortization, net write-downs provision and adjustments amounted to EUR 32.6 million, an increase of EUR 7.1 million year-on-year that mainly reflects the consolidation of coeo and the related preliminary purchase price allocation. As a result, EBIT was EUR 17.5 million compared with EUR 20.1 million in Q2 2025. Net financial expenses and net gain and losses on financial assets amounted to EUR 16 million, increasing by EUR 2.6 million year-on-year. This reflects the cost of the bond and RCF used to finance temporary holding of coeo receivable portfolio. This results in EBT of EUR 1.5 million. Income taxes amounted to EUR 9.3 million, slightly higher than the previous period, reflecting the contribution from profitable entities across the group, including coeo. Minority interest amounted to EUR 3.7 million, increasing by approximately EUR 1.1 million year-on-year and relates to the group's partnership with BPER, Banco BPM, and Eurobank. Group net income, excluding nonrecurring items was positive at EUR 3.3 million compared with EUR 2.8 million of Q2 2025. On a first half pro forma basis, assuming coeo has been consolidated from the beginning of the year, EBITDA excluding items would have been EUR 120 million, while ordinary net income would have been EUR 16 million. The main takeaway, net income, excluding nonrecurring, is growing just after the first quarter of full consolidation of coeo, proving the EPS-accretive nature of the transaction. Moving to Page 14. The key message is the significant improvement in cash generation during the second quarter and importantly, the full reversal of the working capital absorption recorded in Q1. Starting from the reported EBITDA, the quarter also includes a EUR 2.4 million noncash IFRS line item related to the coeo receivable portfolio and EUR 31.4 million cash collection from coeo on the portfolio, recorded for the balance sheet. Net working capital contributed EUR 38.9 million in the second quarter, fully recovering the absorption recorded in Q1, in line with our expectations. This compares with a positive working capital contribution of EUR 3.4 million for the first half, confirm the first quarter absorption was temporary and fully reversed in Q2, and that the Q1 absorption was driven by timing rather than a structural deterioration in the group's cash conversion. Other assets and liabilities absorbed EUR 39 million. This includes recurring cash items such as IFRS 16 payments and redundancy costs, as well as specific temporary and nonrecurring effects. In particular, the quarter includes an approximately EUR 8 million delayed cash impact related to the VAT dispute in Greece with the Greek Tax Authority. Following the ruling, we expect this amount to be fully recovered, making it only a shift in timing. The line also includes EUR 12 million cash mismatch, the 100% payment of the 2025 management incentive plan versus the 6-month accrual for 2026. After this movement and EUR 7 million of CapEx, cash flow from operations reached EUR 76 million compared with EUR 33 million in the second quarter of the last year. Adjusting for transaction costs and temporary VAT effect in Greece, recurring operating cash flow was EUR 90 million. After taxes and financial charge of EUR 20.9 million, recurring free cash flow amounted to EUR 68 million in the quarter. This demonstrates the strong cash generation capacity of the larger group once temporary and transaction items are separated from the underlying performance. Reported free cash flow was EUR 64.1 million compared with EUR 19 million in Q2 '25. Below free cash flow, the reported cash flow before debt repayment was significantly affected by 2 clearly identifiable items. The first was the EUR 38.5 million net cash impact from the acquisition. The second was EUR 48.2 million investment in customer receivables, reflecting strong file intake supporting future collection revenue. As discussed in the previous page, this portfolio investment has rapid cash conversion profile. Near 20% of the amount invested during the quarter has already been collected by the end of June. The reported cash flow before debt repayment was therefore negative by EUR 370.8 million, but this figure is not representative of the group's underlying cash generation as it includes the acquisition consideration from coeo and the portfolio investment. The key takeaway from this page that recurring cash generation remained strong, while the working capital absorption recorded at the end of Q1 was fully reversed during the second quarter. This cash generation capacity together with the planned portfolio disposal remains an important support for the group's deleveraging trajectory. Let us now move to Page 16, and look at the group financial structure and deleveraging trajectory. The key message on this page is that the reported leverage at the end of June reflects the completion of the acquisition, the related financing and dividend payments made during the first half. Reported net debt was EUR 855 million at June 2026, corresponding to reported net leverage of 3.1x. This includes the acquisition debt, the cash impact of the transaction, and the dividend payments, which were not included within the leverage guidance. The slide also shows a pro forma view excluding the coeo receivable back book. On that basis, net debt would have been approximately EUR 722 million and leverage approximately 2.6x, comparable to the 2.2x guidance dividend or 2.3x post-'25 dividend paid in May 2026. Liquidity remains solid. The group had approximately EUR 168 million of cash on balance sheet at June 2026, after the effect of the financing action completed after quarter, and further strengthened the maturity profile and financial flexibility. Our outstanding bonds are currently trading at around 5% yield to maturity, among the lowest levels in the sector, while the average cost of debt is now approximately 5.9%, following the recent refinancing. Importantly, both Fitch and Standard & Poor's have confirmed the group's BB rating with a stable outlook, reflecting the stronger business profile and expectation that deleverage remains a clear management priority. The path to the leverage is supported by 3 elements: recurring cash generation, the planned sale of the receivables, and the lower financial cost following the refinancing. We have also completed important action on the liability side of the balance sheet. As you can see on Page 16, in July, we put in place EUR 330 million of new bank facility comprising of EUR 150 million term loan and [ EUR 80 ] million revolving credit facility, replacing the previous facilities. The refinancing followed the EUR 61 million of our 2031 senior secured notes. The proceeds were primarily used to prepay EUR 50 million of existing term loan. The new financing package delivers 3 clear benefits. First, it reduces our financial financing costs. The new blended cost of debt is approximately 5.9%, broadly in line with the trading level of our 2031 senior secured notes. We expect the refinancing to generate approximately EUR 4 million of annual interest savings, providing direct support to cash generation. Second, it materially improves our maturity profile. The maturity of the term loan has been extended from October 2029 to July 2031, while the revolving credit facility has been extended from October 2027 to July 2031. The term loan will begin amortizing from the second year with approximately 40% remaining value at the final maturity. The group, therefore, has no material refinancing wall before 2030. Third, the new facilities provide greater covenant flexibility and additional financial headroom while maintaining a diversified funding structure across bank financing and capital market instruments. Following this transaction, our funding structure comprises EUR 330 million of bank facilities, EUR 410 million of senior secured notes due in 2031, and EUR 300 million of notes due in 2030. These actions do not change our focus on deleveraging. They make the path more efficient by reducing interest costs, extending maturities, and strengthening financial flexibility. The group, therefore, enters the second half with a broader earnings base, a stronger funding structure, and clear financial priorities, delivering recurring cash generation, complete portfolio disposal, and continued deleveraging. This concludes our presentation. Thank you for your attention. We will now be happy to take your questions.

[Operator Instructions] The first question is from Tommaso Nieddu, Kepler Cheuvreux.

I have 2. The first one is on Italy's region. So can you unpack the drivers behind the Italy EBITDA decline in more detail? How much is lower collection activity, market conditions versus phasing or one-off items? And also, what gives you confidence this reverse in H2 rather than representing a new run rate? The second question is on guidance. Given that the H1 results were quite soft on the stand-alone business, so can you walk us through the bridge to the EUR 300 million full year EBITDA guidance? And how much of the required H2 step-up is Italy normalization versus continued outperformance versus Hellenic and Spain region? Also on your guidance, now there is a new exclusion, which is the impact of the portfolio sales. So can you quantify what magnitude are we talking about?

Thank you, Tommaso. Now on Italy, the EBITDA of the first half of last year had around EUR 10 million, EUR 11 million of sales disposals which were related to portfolio of our clients, which were sold, which didn't happen in this part of the year. So basically, taking out that element, the remaining difference is mostly driven by the collection trend in this part of the year that will be picking up in the second part, together with the cost action should stabilize the EBITDA to levels which are net of the EUR 10 million, EUR 11 million of extraordinary of the first half of 2025 to the new level for the EBITDA of this year versus last year numbers. So stabilization is taking out these effects. Regarding the other businesses, as you have seen, the Greek business is improving in terms of collection, and this is driving the upward trend on the NPE revenues. On the other side, clearly in the first half of last year, we had some sales that did not happen in this part. And this is due to the regulatory environment, which has stopped investors from taking decision before the court came out on the Katseli law, and it was clear now what they could recover or not so that they can put a plan in place for the second part, which they did for the secondary sales. Regarding the other 2 markets, the dynamic is positive, although they are minor in size. And the restructuring of the Spanish business is bringing now the company which is growing EBITDA, but also below EBITDA has no losses and will produce cash, and will be a positive contributor to cash flow of the group. Clearly, on the coeo side, we are only assuming a trend which is similar to the first half, not additional upside, although you have seen that the business has been benefiting from not only the underlying market trends, which are positive for e-commerce and buy now, pay later, but also from the higher penetration into new clients, which is driving down the contribution of the main client, Klarna, from 50% to 40% of file intake, which is a very important step taking into account that Klarna itself continues to grow by more than 20% year-on-year. The other positive aspect that you will see in the dynamic of the EBITDA of the contribution of the other countries because obviously, the revenue growth trajectory, with stable cost base because of the dynamics on the automation of the processes there will have a full effect on EBITDA beyond also the diversification that the business is doing to the other doValue countries. The contribution of coeo to doValue countries obviously is netted off in the company. So you see it on the doValue side. You will not see it on the coeo side, but coeo is contributing that to the growth also of the other countries, and this will be evident in the second part of the year. On the overall guidance, obviously, we are very keen not only on revenue and EBITDA, but also on the leverage. And there, I think the 2 drivers are very clear. It's the disposal of the portfolio where the timing we are taking is to optimize the price, not because it's a question of selling. And the more we hold on into it, more cash we have from the portfolio. It's a very profitable one, as you have seen from the statistics that Davide has provided. We are not including cash metrics as the debt purchaser do because our business will be soon asset-light, but gives you a metric that explains also the high turning of the purchase price of the portfolios into real cash. Now on the bridge of guidance, Davide will provide more details.

Yes, mainly on coeo, your question was about coeo. We always communicated to the market a clear target of coeo. Start with EUR 60 million when we acquired, clarifying that those EUR 60 million would have roughly 45%, 50% of cash conversion. So this lower cash conversion mainly because the cash include the aspect of the portfolio. So what we are saying that our target is coherent with the target we achieve to the market when we acquired the company. So we will have EBITDA target. We continue to have this roughly 45%, 50% cash conversion that will include net effect for the portfolio.

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

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

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

The next question is from Antonio Gianfrancesco, Intermonte.

Two questions. The first one is on coeo because you reported EUR 56 million revenues and EUR 18 million EBITDA in the second quarter. This is implying a margin of around 31%. But if I look at what you reported in the first quarter, coeo was indicated at EUR 64 million revenue and EUR 26 million EBITDA, so something like 41% EBITDA margin. Maybe I misunderstood something, but I wanted to better understand why revenues and EBITDA are down quarter-on-quarter and what you consider the clean underlying margin of the business, which integration onboarding on commercial cost we should expect in the second half? And what revenue and EBITDA contribution is now embedded in your full year guidance for coeo? The second question is on new business because the new business intake reached EUR 3.1 billion in the first half and the GBV remained broadly stable, let's say. But traditional service revenues continue to decline. So I want to understand if the new mandates are entering at comparable fees and margin levels. And if -- or let's say, how quickly this commercial intake should translate into revenue and EBITDA contribution?

I will take your first question, coeo. We expect that the average margin in between -- as Daniele said, between 35%, 37%. First half is 37%, making the average -- we expect 35% because as we have already discussed during the first quarter call, coeo seasonality is strong in this quarter than the last one -- on the second one. So first quarter is always stronger quarter, so we are going to benefit to have higher margin. But on average, if we look full year, we expect a 35% margin. So also where we have again, third quarter a little bit lower than the first quarter. It will be a little bit higher. So on average, we expect 35%.

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

The next question is from Simonetta Chiriotti, Mediobanca.

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

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

On the cost side, we have run the efficiency measures in the first half. So the exits are happening between June and July, and therefore, you will see the impact on the cost in the second half. But this is regarding projects. So it will not -- it will continue over the next few years as more as we introduce technology, we make efficient the cost base, higher the reduction of the cost. So the composition of the cost in Italy is quite evident that 70% is personnel and the remaining is 18% IT cost and the rest is general cost. On the tax receivable project, you have seen 3 days ago, there was the final decree, which defined the perimeter into which AMCO will play and also the condition under which AMCO will have to be given by the local authorities to manage. So they are obliged to move to AMCO if the recoveries are not at a certain level. So it's quite actual effect. So there will be a continuous flow to AMCO and the distribution to the other servicers. So now AMCO is expected to run with public tender between -- in the end of the year. I think we are already set for that. And we will participate to that tender.

Yes. On the question about the other asset liabilities, we'll give you the breakdown. Roughly EUR 10 million IFRS 16. So to pay the rent in the office we operate, including coeo. Then we have roughly EUR 8 million of redundancy costs as part of our plan. We have also the MBO impact, as described before. It is roughly EUR 13 million -- [ EUR 23 million ] -- as decided, we have paid fully. The MBO for '25, we didn't recover fully, the MBO. So this will be unformidable during the year. It happened also last year. Then we have the delay in the recovery on the VAT in Greece is approximately EUR 8.5 million. And we have also paid the transaction cost with the multi net working capital of roughly EUR 7 million. This is how we get to the total change. About the collection in coeo. As we said before, it's very fast earning portfolio. On average, the recovery of the price paid is in 18 months. Then we show the recovery of 120 months because most of the collection come in in the first 3 year, because then we have the tail that we continue to generate cash.