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INVESTOR PRESENTATION Capital Service S.A. owner of brands: AUGUST 2019

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Page 1: Capital ServiceS.A. owner ofbrandscapitalservice.pl/wp-content/uploads/2019/09/Investor_Presentation... · Disclaimer > This document (the“Presentation’’)has been prepared for

INVESTOR PRESENTATIONCapital Service S.A.

owner of brands:

AUGUST 2019

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Table of contents

Disclaimer....................................................................................................................3

Who we are?...............................................................................................................4

Our business story....................................................................................................5

Our customers............................................................................................................6

Market (non-bank lending).......................................................................................7

Our products...................................................................................................................8

Management...............................................................................................................9

Sales channels: branch network...........................................................................10

Sales channels: branch appearance.....................................................................11

Sales channels: call centre......................................................................................12

Sales channels: agents and brokers.....................................................................13

Innovative technology............................................................................................14

Financial highlights....................................................................................................15

Current financing structure and amounts........................................................16

Contact.......................................................................................................................17

Appendix: Independent auditor’s report of annual financial statements

for accounting period from 01.01.2017 to 31.12.2017.........................................18

Appendix: Independent auditor’s report of annualconsolidated

fiancial statements for accounting period from 01.01.2017 to 31.12.2017........20

Appendix Auditor’s report on selected loansportfolio

and internal control system.....................................................................................22

2

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Disclaimer

> This document (the “Presentation’’) has been prepared for the sole purpose of use with prospective investors and business partners, and other stakeholders. Capital Service S.A.,together with its related entities, is further referred to herein as the “Company”, or “Loan Originator”.

> This Presentation is of a selective nature and is made to provide an introduction and overview of the Company’s business. This Presentation does not purport to contain all theinformation that a prospective investor or business partners or other stakeholder may require in evaluating the Loan Originator. The potential stakeholder should read publicly available information regarding the Loan Originator and the full Financial Statements of the Company, as well as the sample loan agreement that the Loan Originator uses in its relations with borrowers, or get information directly from the Company.

> This Presentation contains forward-looking information that may involve risks and uncertainties concerning the Company’s growth and profitability in the future. No relianceshould be placed on any statements, estimates and projections regarding future performance or developments, including, without limitation, in relation to expected market developments, estimated financial figures of the Company, or any other forward-looking statements. Actual events or results may materially differ from those described in this Presentation. No one should therefore unduly rely on these forward-looking statements as they reflect only the judgment of the Company’s management at the date of thisPresentation and are not intended to give any assurances or comfort as to future results. The facts and information contained in the Presentation might be subject to revisionin the future. Neither the delivery of this Presentation nor any further discussions of the Company with any of the recipients shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since that date.

> Neither the Company nor any of its parents or subsidiaries, or any of their directors, officers, employees and advisors, nor any other person (I) accepts any obligation to update anyinformation contained herein or to adjust it to future events or developments; (ii) makes any representation or warranty, express or implied, as to the accuracy or completeness of the information contained in this Presentation; (iii) shall have any liability whatsoever, in negligence or otherwise, for any loss howsoever arising, directly or indirectly, from the use of this Presentation.

> This Presentation does not constitute any kind of offer or an invitation for the transfer of receivables resulting from the loan agreement in any jurisdiction, and neither thisdocument, nor anything contained herein, shall form the basis of, or be relied upon in connection with any contract or commitment whatsoever.

> All data are presented in millions of Euro, unless otherwise stated. Data for the years 2014-2018 were audited.

3

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Who we are?

all data below for the 31.12.2018:

all data below for the year 2018:

11%

Loans granted from January to

December 2018

UR 47,7 m

89%

2%

Activeportfolio

of loans as at

31.12.2018

EUR18,5 m

98%

payday loans installment loans

62K+active clients

104,538number of loansissued

EUR 627averageamountof installment loan

400+experiencedemployees

EUR 23,1mrevenue

22 monthsaverage period ofinstallment loan

133branches

EUR 139averageamountof payday loan

EUR 3,2mequity

originally established in 1999

one of theleading non-bank financial institutions

in Poland

4

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0

5

10

15

20

25

30

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Rev

enu

eP

ort

folio

; EU

Rm

2019

Our business story

Beginning Cooperation withbrokers

Introduction of external bank and insuranceproducts

Creation ofa closed-end investment fund and acquaring investment certificates with a total value ofPLN

Joiningthe MINTOSplatform

First “brick” branchopened

Launch of pay dayloans

Launched online lending

Transformationintoa joint-stock company

Introducing a complete

online application

Establishing callcenter

The introduction of installment loans

Launched

callcenterlending (voiceloans)

Bond issue (> EUR10M)

Expansion ofthe network to 110 branches

5

Franchisenetwork

development

BeginningCooperationwith Monetia

sp. z o.o.

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Our customers

6

63%

37%

female

male2% 7%

21%

19%17%

34% 31-40

26-30

41-5051-60

66+

18-25

Age

13%

46%

31%

10%

secondary educationvocational

education

highereduaction

primaryeducation

Education44%

39%

3%

14%

contract of employment

retirement/ pension

business

other

Source of income

31%

13%

11%9%

18%

4%

4%3%

7%retirement/pension

architecture

transport

other

Types ofemployment

trade

industry

administration/education

banking

agriculture

Gender

Customer profile

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Market (non-bank lending)

Source:*Conference of Financial Companies in Poland – Association of Employers, 2018

> Loan institutions participating in the survey in 2018 gran-ted PLN 2,12 billion in loans for consumer purposes, PLN198,8 million and in relative terms by 10,3% more than in 2017.

> Despite the consistent increase in subsequent annual periods, the dynamics of changes in the value of granted loans slows down from year to year.

> The value of the loan portfolio granted by the participants surveyed at the end of 2018 amounted to PLN 2,27 billion.

> Comparing to the end of 2017, this is a 22,2% change.

7

131,2 181,8268,1

445,5

761,6

1 334,7

1 726,0

1 924,9

2123,7

0,0

500,0

1 000,0

1 500,0

2 000,0

2 500,0

2010 2011 2012 2013 2014 2015 2016 2017 2018

PLN

b

Loans granted, PLN b

88 122206 350

586

942

1 564

1 864

2278

0

500

1 000

1 500

2 000

2 500

2010 2011 2012 2013 2014 2015 2016 2017 2018

PLN

b

Portfolio PLN b

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Our products

paydayloans

up to 250EUR up to 4 K EUR

for 30 days for 48 months

installment

loans

Transfer from paydayloans into installment loans (expectedstabilization of the loan portfolio structure in subsequent years)

8

17,3621,25

28,73

16.1612,13

5,23

156

182

229

141

92

37

2010 2011 2012 2013 2014 2015

0

50

100

150

200

250

0,00

5,00

10,00

15,00

20,00

25,00

30,00

35,00

2013 2014 2015 2016 2017 2018

00

0'

EUR

m

Payday loans

Loans issued, EURm Number of loans issued

3.87

20.51

33.61

42.54

12

54 60

67

2012,5 2013 2013,5 2014 2014,5 2015 2015,5 2016 2016,5

0

10

20

30

40

50

60

70

80

0,00

5,00

10,00

15,00

20,00

25,00

30,00

35,00

40,00

45,00

2015 2016 2017 2018

00

0'

EUR

m

Installment loans

Loans issued, EURm Number of loans issued

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Management

Management team

AdamKuszyk

Graduate of the University of Lodz, Management and Marketing, postgraduate studies at Warsaw School of Economics, Certified Internal Auditor (CIA), chartered accountant. From 2011 to mid 2014 Chief Financial Officer and Vice President of joint stock company SMT: IT and e-marketing holding (currently i.a.: iAlbatros, Intive). Previously, among others: CFO Rolmex SA (main shareholder of Indykpol SA - one of the biggest meat producers in Poland), Manager of Agora SA (one of the biggest media holding in Poland), Deloitte and BDO. CEO and President of the Management Board, in the Company since mid-2014.

Kazimierz Dziełak

Experienced and creative manager. He studied management at the Leon Kozminski University in Warsaw. In the years 1999-2015 and since June 2018 he was andis still successfully managing the CAPITAL SERVICE S.A. He has 6 years of experience in running a bank branch (managing partner of a bank branch) and many years of experience on the financialmarket.

Dariusz Łachowski

Graduate of post-graduate studies at the Warsaw School of Economics. Certified coach of the International Coaching Community. Manager with 18 years of banking experience (Cetelem Bank, BNP Paribas Group: 2001 – 2008, Alior Bank: 2008 – 2014, Plus Bank: 2014 – 2018). He gained experience by building and running telephone debt collection teams, sales teams in call centers, retail financial intermediation teams. He also managed networks of bank branches. He was responsible for the successful implementation and launching strategic projects in previous work places. He succeeded in promoting dozens of managers who continue their careers in the financial industry. In Capital Service S.A. he is responsible for the sale, opening and running own and franchise branches.

9

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Sales channels: branchnetwork

> Over 100 branches in Poland

> Located in cities with more than 30,000 residents

> Operation within 30-40 kilometers of branches

> 50 m2 average branch space

> 2-3 advisors team

10

16.9520.40

28.2224.63 32,26

30,70

152

175

208

136

113

72

2013 2014 2015 2016 2017 2018

0

50

100

150

200

250

0,00

5,00

10,00

15,00

20,00

25,00

30,00

35,00

2013 2014 2015 2016 2017 2018

00

0'

EUR

m

Loans issued, EURm Number of loans issued

30

60 60 60

105 110 112133

0

20

40

60

80

100

120

140

2011 2012 2013 2014 2015 2016 2017 2018

Number of branches KredytOK

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Sales channels: branchappearance

High-quality locations

> Located in places with high customer flow intensity

> Easily visible all based on the ground floor with direct entrance

Appealing interior

> Uniform branch layout

> Pleasant and attractive interior, ensuring customer-friendly environment

11

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Sales channels: callcentre

>more than 40 advisors

> leads validation

> evaluation of loan applications

> direct selling

> after-sales service

12

0.33 0.721.22

3.86

2,23

4,24

3

5

8

16

89

0

2

4

6

8

10

12

14

16

18

0,00

0,50

1,00

1,50

2,00

2,50

3,00

3,50

4,00

4,50

2013 2014 2015 2016 2017 2018

00

0'

EUR

m

Loans issued, EURm Number of loans issued

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Sales channels: agents andbrokers

In 2015 there was a dynamic growth of cooperation with agents. In 2016 we started API Agent + so that agents have the ability to fully support the proposal and sale of KredytOK.

Sales through agents and brokers is becoming increasingly important in the structure of sales of the Company.

The main advantages of Agent API+:

> easy intuitive, modern design platform,

> credit lending decision in 15 seconds after sending the application,

> simple conditions of the offer.

The possibilities available to agents in Agent API+:

> completing loan applications

> real time credit decision

> document generation process

> on-site sale completion

13

0.08 0.13

2.93

6.394,75 5,10

1 1

24

34

9

6

0

5

10

15

20

25

30

35

40

0,00

1,00

2,00

3,00

4,00

5,00

6,00

7,00

2013 2014 2015 2016 2017 2018

00

0'

EUR

m

Loans issued, EURm Number of loans issued

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Innovative technology

APIs

marketing automation

application processing

usability and great UX

sale process world class BI

technology

integrated communication technology

contact centre support

real timebanksintegration

debt collection

credit risk assessment

online documents management

Security, authentication

marketing, leads

debt collection

applications

cloud computingtechnology

powerful servers

redundancyprocessing

capabilities

storageand

reliability

14

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Financial highlights

Source:* Basedonconsalidatedfinancialstatement

FINANCIAL RATIOS

15

0,000

0,500

1,000

1,500

2,000

2,500

3,000

0,00

5,00

10,00

15,00

20,00

25,00

30,00

2014A 2015A 2016A 2017A 2018

EUR

m

EUR

m

Revenue Profit before taxation

0.76

2.65

3.433.80

3,43

0.61

1.562.07

3,20 3,37

0,00

1,00

2,00

3,00

4,00

5,00

6,00

7,00

2014A 2015A 2016A 2017A 2018

Net Debt/EBITDA Net DEBT/ Equity

KEY FINANCIALS, EUR m 2014A 2015A 2016A 2017A 2018

Revenue 7.3 11.6 19.2 26.3 23,4

EBITDA 1.5 2.3 4.0 3.2 0,5

Profit before taxation 0.7 1.1 1.8 0.0 3,2

Net profit 0.5 2.0 1.2 -1.4 -0,5

Equity 1.8 3.8 4.9 3.8 3,2

Net Debt 1.1 6.0 10.2 12.3 10,8

Receivables from customers (net) 2.5 5.4 10.4 14.9 19,5

Total assets 3.8 13.5 17.4 20.9 24,8

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Current financing structure and amounts

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

Liabilities Equity

credits and loans; EUR 0.49mleases; EUR 0.45m

secured bonds; EUR 4.12m

2014A 2015A 2018

all data below for the year 2018

16

2016A 2017A

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23

Contact

ul. Korczaka 7307-409 Ostrołęka Poland

www.capitalservice.pl www.kredytok.pl

[email protected]

+48 29 694 4820

+48 29 764 5988