Encore Capital Group (ECPG) Raymond James & Associates’ 46th Annual Institutional Investors Conference 2025 summary

Company Overview and Business Model

• Operates in debt purchasing, focusing on charged-off consumer receivables in the U.S. and Europe, with main brands Midland Credit Management (U.S.) and Cabot Credit Management (U.K./Europe).

• Largest player in the U.S. and significant presence in the U.K. and Europe, with over 7,000 employees in eight countries.

• Deployed $1.35 billion in capital and collected $2.2 billion last year, with three-quarters of activity in the U.S.

• Mission-driven, consumer-centric approach emphasizes recovery, empathy, trust, and tailored solutions.

• Balance sheet strength enables flexible capital allocation and funding for growth opportunities.

Data, Analytics, and Technology

• Extensive use of proprietary and external data for portfolio valuation and operational decision-making.

• Heavy investment in digital and omnichannel collections, with over a third of new customer payments via digital channels.

• AI and automation are being deployed to improve decisioning, channel selection, and back-office efficiency.

• U.S. collections rose 20% last year with flat headcount, reflecting technology-driven efficiency.

• Competitive edge built on technology innovation, data analytics, omni-channel capabilities, and regulatory compliance.

Financial Performance and Recent Adjustments

• Achieved record portfolio purchases in 2024, up 26% to $1.35B, with 74% allocated to the U.S. market.

• Collections increased 16% to $2.16B, and cash generation rose 20%, driven by strong U.S. performance.

• Q4 charges and actions focused on European business, including restructuring, rebasing ERC, and market exits, with $262M in non-cash charges.

• Leverage ratio declined to 2.6x, within target range, with no significant debt maturities until 2028.

• 2025 guidance projects portfolio purchases to exceed $1.35B, collections to reach $2.4B, and resumption of share repurchases.