Encore Capital Group Inc (ECPG) 2024 Q2 法說會逐字稿

Good afternoon, everyone, and thank you for standing by. Welcome to the Encore Capital Group's second quarter 2024 earnings call. (Operator Instructions) Please be advised that today's conference is being recorded.

大家下午好，謝謝大家的支持。歡迎參加 Encore Capital Group 2024 年第二季財報電話會議。（操作員指示）請注意，今天的會議正在錄製中。

I would now like to hand the conference over to your first speaker today, Bruce Thomas, VP of Global Industrial Relations for Encore. Bruce, please go ahead.

現在我想將會議交給今天的第一位發言者，Encore 全球勞資關係副總裁 Bruce Thomas。布魯斯，請繼續。

Thank you, operator. Good afternoon, and welcome to Encore Capital Group's second quarter 2024 earnings call. Joining me on the call today are Ashish Masih, our President and Chief Executive Officer; Jonathan Clark, Executive Vice President; and Chief Financial Officer, and Ryan Bell, President of Midland Credit Management. Ashish and John will make prepared remarks today and then we will be happy to take your questions.

謝謝你，接線生。下午好，歡迎參加安可資本集團 2024 年第二季財報電話會議。今天和我一起參加電話會議的是我們的總裁兼執行長 Ashish Masih；喬納森·克拉克，執行副總裁；兼財務長和米德蘭信貸管理公司總裁 Ryan Bell。阿什和約翰今天將發表事先準備好的發言，然後我們將很樂意回答您的問題。

Unless otherwise noted, comparisons on this conference call will be made between the second quarter of 2024 and the second quarter of 2023. In addition, today's discussion will include forward-looking statements that are based on current expectations and assumptions and are subject to risks and uncertainties. Actual results could differ materially from our expectations. Please refer to our SEC filings for a detailed discussion of potential risks and uncertainties. We undertake no obligation to update any forward-looking statements.

除非另有說明，本次電話會議將對 2024 年第二季和 2023 年第二季進行比較。此外，今天的討論將包括基於當前預期和假設並受到風險和不確定性影響的前瞻性陳述。實際結果可能與我們的預期有重大差異。請參閱我們向 SEC 提交的文件，以了解潛在風險和不確定性的詳細討論。我們不承擔更新任何前瞻性陳述的義務。

During this call, we will use rounding and abbreviations for the sake of brevity. We will also be discussing non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are included in our investor presentation, which is available on the Investors section of our website.

在本次通話中，為了簡潔起見，我們將使用舍入和縮寫。我們也將討論非公認會計準則財務指標。我們的投資者介紹中包含了與最直接可比較的 GAAP 財務指標的對賬，您可以在我們網站的投資者部分找到該介紹。

As a reminder following the conclusion of this call, a replay of this conference call, along with our prepared remarks, will also be available on the Investors section of our website.

作為本次電話會議結束後的提醒，本次電話會議的重播以及我們準備好的評論也將在我們網站的投資者部分提供。

With that let me turn the call over to Ashish Masih, our President and Chief Executive Officer.

接下來，讓我將電話轉給我們的總裁兼執行長 Ashish Masih。

Thanks, Bruce, and good afternoon, everyone. Thank you for joining us. Before I begin today's quarterly remarks, I'd like to spend a moment addressing the news of Jonathan's retirement next year, which you've likely seen in the separate press release we issued today alongside our Q2 earnings release.

謝謝布魯斯，大家下午好。感謝您加入我們。在開始今天的季度講話之前，我想花點時間談談喬納森明年退休的消息，您可能在我們今天與第二季度收益發布一起發布的單獨新聞稿中看到了這一消息。

This is something we've been carefully planning for. And although it's too early to start the good-byes, I want to acknowledge John's invaluable contribution to Encore and our leadership team and extend my gratitude for his dedication to Encore for more than a decade. So much of what makes Encore a respected industry leader today has been directly influenced by John's vision and guidance.

這是我們一直精心策劃的事情。儘管現在開始告別還為時過早，但我要感謝約翰對 Encore 和我們的領導團隊做出的寶貴貢獻，並對他十多年來對 Encore 的奉獻表示感謝。Encore 之所以能成為當今受人尊敬的行業領導者，很大程度上直接受到 John 的願景和指導的影響。

John has made sure will continue to be in good hands after his departure with Tomas Hernanz transitioning into the Encore CFO role in April 2025. Many of you have met and even gotten to know Thomas over the years since he joined us back in 2016.

John 確保在他離職後繼續得到良好的照顧，而 Tomas Hernanz 將於 2025 年 4 月接任 Encore 財務長。自從 Thomas 於 2016 年加入我們以來，你們中的許多人多年來都認識甚至認識了他。

With his proven track record in substantial industry and company knowledge, I'm confident Thomas will smoothly transition into the Encore CFO role and continue to be an important driver of our disciplined strategy and financial excellence. And I look forward to working with Tomas closely in his new role.

憑藉他在豐富的行業和公司知識方面的良好記錄，我相信託馬斯將順利過渡到 Encore 財務長的角色，並繼續成為我們嚴格的策略和卓越財務的重要推動者。我期待在托馬斯的新職位上與他密切合作。

I'll now begin with key highlights from the second quarter. Encore's second quarter results are a continuation of a strong performance trajectory. This performance was driven by sustained strong portfolio purchasing in the US and double digit global collections growth.

現在我將首先介紹第二季的主要亮點。Encore 第二季業績延續了強勁的業績軌跡。這項業績是由美國持續強勁的投資組合購買和全球兩位數的收藏成長所推動的。

In the US, the market for charged-off receivable portfolios continues to grow to record levels, driven by simultaneous growth in both credit card lending and the charge-off rate. As a result, we continue to see very attractive pricing and returns in the US. Accordingly, we are currently allocating the vast majority of our capital to our MCM business in the US, which set another deployment record in the second quarter.

在美國，在信用卡貸款和核銷率同時成長的推動下，核銷應收帳款投資組合市場持續成長至創紀錄水準。因此，我們繼續在美國看到非常有吸引力的定價和回報。因此，我們目前將絕大多數資金分配給我們在美國的 MCM 業務，這在第二季創下了另一個部署記錄。

In Europe, the portfolio purchasing market is continuing to show signs of improvement but remains competitive. Although we see examples of improved pricing, we believe European portfolio pricing still does not consistently reflect the higher cost of capital caused by higher interest rates.

在歐洲，組合採購市場繼續顯示出改善的跡象，但仍具有競爭力。儘管我們看到了定價改進的例子，但我們認為歐洲投資組合定價仍然未能一致地反映利率上升導致的資本成本上升。

We are maintaining our discipline and continue to be selective, which has led to reduced Cabot portfolio purchases. Overall, our year-to-date growth in portfolio purchasing, collections, and cash generation reinforces a belief that 2024 will be a turning point in Encore's operational and financial results.

我們維持紀律並繼續精挑細選，這導致卡博特投資組合的採購減少。總體而言，我們今年迄今在投資組合購買、收款和現金產生方面的成長增強了我們的信念，即 2024 年將成為 Encore 營運和財務表現的轉捩點。

I believe it's helpful to remind investors of the critical role we play in the consumer credit ecosystem by assisting in the resolution of unpaid debts. These unpaid debts are an expected and necessary outcome of the lending business model, although the levels may vary depending on the stage of the macroeconomic cycle.

我認為，透過協助解決未償債務，提醒投資者我們在消費信貸生態系統中發揮的關鍵作用是有幫助的。這些未償債務是貸款業務模式的預期和必然結果，儘管其水準可能因宏觀經濟週期的階段而異。

Regardless of where we are in the cycle, our mission is to create pathways to economic freedom for the consumers we serve by helping them resolve their past-due debts. We achieve this by engaging consumers in honest, empathetic, and respectful conversations.

無論我們處於週期的哪個階段，我們的使命都是透過幫助我們服務的消費者解決逾期債務，為他們創造經濟自由的途徑。我們透過與消費者進行誠實、同理心和尊重的對話來實現這一目標。

Our business is to purchase portfolios of non-performing loans at attractive returns while minimizing funding costs. For each portfolio that we own, we strive to exceed our collection expectations, while maintaining an efficient cost structure as well as ensuring the highest level of compliance and consumer focus.

我們的業務是以有吸引力的回報購買不良貸款組合，同時最大限度地降低融資成本。對於我們擁有的每個產品組合，我們努力超越我們的收藏期望，同時保持高效的成本結構，並確保最高水準的合規性和消費者關注。

We achieve these objectives through our three-pillar strategy. This strategy enables us to deliver strong financial performance while positioning us well to capitalize on portfolio purchasing opportunities. We believe this is instrumental for building long-term shareholder value. The first pillar of our strategy, market focus, concentrates our efforts on the markets where we can achieve the highest risk-adjusted returns.

我們透過三大支柱策略實現這些目標。這項策略使我們能夠實現強勁的財務業績，同時使我們能夠善用投資組合購買機會。我們相信這對於建立長期股東價值至關重要。我們策略的第一個支柱是市場聚焦，將我們的努力集中在能夠實現最高風險調整回報的市場。

Let's now take a look at our two largest markets, beginning with the US. US revolving credit has been steadily rising since early 2021. Each month, for the last three years, the US Federal Reserve has reported a new record level of outstandings and it continues to grow. At the same time, since bottoming out in late 2021, the credit card charge off rate in the US has also been steadily rising and is now at its highest level in more than 10 years.

現在讓我們來看看我們的兩個最大的市場，首先是美國。自2021年初以來，美國循環信貸一直在穩定成長。過去三年來，聯準會每個月都會報告未償還債務水準創下新紀錄，並且還在繼續增長。同時，自2021年底觸底以來，美國信用卡沖銷率也穩定上升，目前已達到10多年來的最高水準。

Similarly, US consumer credit card delinquencies, which are a leading indicator of future charge offs, also continue to rise. With both lending and the charge off rate growing simultaneously, purchasing conditions in the US market remain highly favorable. We are observing not only continued strong growth in US market supply, but attractive pricing as well.

同樣，作為未來沖銷領先指標的美國消費者信用卡拖欠率也持續上升。由於貸款和沖銷率同時成長，美國市場的購買條件仍然非常有利。我們不僅觀察到美國市場供應持續強勁成長，而且價格也具有吸引力。

The most recent quarterly delinquency data reflects a typical seasonal pattern, but at meaningfully higher levels than a year ago. This data supports our expectation that 2024 will be another year of record portfolio sales by US banks and credit card issuers.

最近的季度拖欠數據反映了典型的季節性模式，但其水平明顯高於一年前。這項數據支持了我們的預期，即 2024 年美國銀行和信用卡發行機構的投資組合銷售將再次創下紀錄。

With this highly favorable purchasing environment as a backdrop, Q2 was another strong quarter of portfolio purchasing for our MCM business. We deployed a record $237 million in the US at strong returns. MCM collections in the second quarter were $397 million, up 18% compared to the second quarter of 2023. Consumer payment behavior remained stable throughout the quarter.

在這種非常有利的採購環境的背景下，第二季是我們 MCM 業務組合採購的另一個強勁季度。我們在美國部署了創紀錄的 2.37 億美元，並獲得了豐厚的回報。MCM 在第二季的營收為 3.97 億美元，比 2023 年第二季成長 18%。整個季度消費者支付行為保持穩定。

We are now purchasing significantly more volume than we ever have in the US. Given current and expected market conditions, as well as our forward flow commitments already in hand, we anticipate 2024 to be another record year of portfolio purchasing for our MCM business in the US.

我們現在的採購量比美國以往任何時候都要多。鑑於當前和預期的市場狀況，以及我們已經做出的遠期流量承諾，我們預計 2024 年將是我們美國 MCM 業務組合採購的另一個創紀錄的一年。

In contrast to the US, supply in the UK has been growing much more slowly. Credit card outstandings just recently returned to pre-pandemic levels as banks in the UK, unlike those in the US, have not been meaningfully increasing consumer lending. In addition, UK charge offs remain at low levels.

與美國相比，英國的供應增長緩慢得多。信用卡未償餘額最近剛恢復到疫情前的水平，因為與美國銀行不同，英國銀行並未大幅增加消費貸款。此外，英國的沖銷仍處於較低水準。

Cabot's collections in Q2 were $149 million, up 7% compared to the second quarter a year ago. We believe ongoing weakness in consumer confidence is marginally impacting one-time settlements while existing payment plan performance remains stable. We continue to be selective with Cabot's portfolio purchases, which were $42 million in the second quarter.

卡博特第二季的收款額為 1.49 億美元，比去年第二季成長 7%。我們認為，消費者信心持續疲軟將對一次性結算產生輕微影響，而現有付款計畫表現仍保持穩定。我們繼續對卡博特的投資組合進行選擇性購買，第二季的購買金額為 4,200 萬美元。

Although portfolio pricing continues to improve, we believe it still does not yet consistently reflect higher funding costs. Accordingly, we expect to continue to deploy at modest levels until returns in Cabot's markets become more attractive.

儘管投資組合定價持續改善，但我們認為它仍未一致反映更高的融資成本。因此，我們預計將繼續以適度的水平進行部署，直到卡博特市場的回報變得更具吸引力。

We are currently choosing to allocate significantly more capital to the US market, which has higher returns, consistent with our well-established strategic focus. We also continue to prudently manage the Cabot cost structure given the reduced level of portfolio purchases in recent quarters.

我們目前選擇將更多資本配置到回報率更高的美國市場，這與我們既定的策略重點一致。鑑於最近幾季投資組合採購水準下降，我們也將繼續謹慎管理卡博特成本結構。

I would now like to highlight Encore's second quarter performance in terms of two key metrics, starting with portfolio purchasing. Encore's global portfolio purchases increased 2% in Q2 to $279 million, with the record US deployments in our largest business, MCM. This increased level of portfolio purchasing will help drive Encore's collections growth over the next few years.

我現在想從兩個關鍵指標重點介紹 Encore 第二季的業績，首先是投資組合購買。第二季度，Encore 的全球投資組合採購成長了 2%，達到 2.79 億美元，其中我們最大的業務 MCM 在美國的部署創紀錄。組合購買水準的提高將有助於推動 Encore 在未來幾年的產品系列成長。

The fact that the vast majority of our global deployment in the second quarter was in the US is a reminder of the flexibility that our global funding structure provides to us. This structure enables us to allocate capital to opportunities in the markets with the highest returns.

我們第二季的絕大多數全球部署都在美國，這一事實提醒我們，我們的全球融資結構為我們提供了靈活性。這種結構使我們能夠將資本分配給回報率最高的市場機會。

Global collections in the second quarter were $547 million and were up 15% compared to Q2 a year ago. The past several quarters of higher portfolio purchases, particularly in the US, has led to meaningful growth in collections, a trend we expect to continue.

第二季全球收藏額為 5.47 億美元，比去年第二季成長 15%。過去幾個季度，投資組合購買量的增加（尤其是在美國）導致藏品大幅增長，我們預計這一趨勢將持續下去。

I'd now like to hand the call over to John for a more detailed look at our financial results.

我現在想將電話轉交給約翰，以便更詳細地了解我們的財務表現。

Thank you, Ashish. The second quarter was another period of strong purchasing for our US business at attractive returns, while collections grew in each of our key markets. Collections were higher than our forecast for the quarter and we made small adjustments to our ERC forecast, which together resulted in a positive impact to earnings.

謝謝你，阿什什。第二季是我們美國業務強勁採購的另一個時期，回報頗具吸引力，同時我們每個主要市場的產品系列都有所成長。本季收款金額高於我們的預測，我們對 ERC 預測進行了小幅調整，這共同對收益產生了積極影響。

I'd like to highlight a few items and provide more detail. Q2 collections of $547 million was up 15% compared to the second quarter last year. ERC at the end of the quarter was $8.4 billion, up 5% compared to a year ago. Operating expenses remain well-controlled and were up 8% compared to Q2 last year as we continued to realize operating leverage and the scale benefits of collections growth in our business.

我想強調一些項目並提供更多細節。第二季收款金額為 5.47 億美元，比去年第二季成長 15%。本季末的 ERC 為 84 億美元，比去年同期成長 5%。由於我們繼續實現營運槓桿和業務收款成長的規模效益，營運費用仍然得到良好控制，與去年第二季相比成長了 8%。

GAAP net income of $32 million and GAAP EPS of $1.34 in the second quarter were up 22% and 24%, respectively, compared to the second quarter of 2023. We believe that our ability to generate significant cash provides us with an important competitive advantage, which is also a key component of our three pillar strategy.

與 2023 年第二季相比，第二季 GAAP 淨利為 3,200 萬美元，GAAP 每股收益為 1.34 美元，分別成長 22% 和 24%。我們相信，我們產生大量現金的能力為我們提供了重要的競爭優勢，這也是我們三大支柱策略的關鍵組成部分。

Similar to the dynamic Ashish mentioned earlier, higher portfolio purchases at strong returns over the past several quarters have also led to meaningful growth in cash generation, a trend we expect to continue. Our cash generation in the second quarter was up 19% compared to Q2 of 2023.

與前面提到的阿什什動態類似，過去幾季更高的投資組合購買帶來的強勁回報也導致了現金產生的顯著增長，我們預計這一趨勢將持續下去。與 2023 年第二季相比，我們第二季的現金產生量成長了 19%。

The third pillar of our strategy ensures that the strength of our balance sheet is a constant priority. Our unified global funding structure provides us with financial flexibility, diversified sources of financing, and extended maturities. It also underpins one of the best balance sheets in our industry with comparatively attractive leverage.

我們策略的第三個支柱確保我們的資產負債表實力始終是首要任務。我們統一的全球融資結構為我們提供了財務靈活性、多元化的融資來源和更長的期限。它還以相對有吸引力的槓桿率支撐著我們行業中最好的資產負債表之一。

Importantly, even with two consecutive quarters of record portfolio purchases in the US, our leverage declined again during the second quarter given our strong cash generation just as we expected it would. This cash generation is driven by our increased volume of purchases over the last several quarters, the higher returns associated with those purchases, and continued strong collections. Our leverage ratio of 2.7 times at the end of the second quarter remains well within our target range and is down from 2.9 times at the end of 2023.

重要的是，即使美國連續兩季創紀錄的投資組合購買，鑑於我們的現金產生能力正如我們預期的那樣強勁，我們的槓桿率在第二季再次下降。過去幾季我們的購買量增加、與這些購買相關的更高回報以及持續強勁的收藏推動了這種現金產生。我們第二季末的槓桿率為 2.7 倍，仍在我們的目標範圍內，低於 2023 年底的 2.9 倍。

We believe our balance sheet provides us very competitive funding costs when compared to our peers. Our funding structure also provides us financial flexibility and diversified funding sources to compete effectively in this growing supply environment.

我們相信，與同業相比，我們的資產負債表為我們提供了極具競爭力的融資成本。我們的融資結構也為我們提供了財務靈活性和多元化的融資來源，以便在不斷增長的供應環境中有效競爭。

In the second quarter, we again made good use of our diversified funding structure to proactively manage our debt maturities. We issued $500 million of 2030 senior secured notes in Q2 in a transaction similar to our first quarter offering. These two bonds expanded our options for future financing, establishing our access to the broad and deep US high-yield bond market.

第二季度，我們再次充分利用多元化的融資結構，主動管理債務期限。我們在第二季發行了 5 億美元的 2030 年優先擔保票據，交易類似於我們第一季的發行。這兩隻債券擴大了我們未來融資的選擇，為我們進入廣泛而深入的美國高收益債券市場奠定了基礎。

While we initially used the proceeds from these bonds to pay down our revolver, we plan to eventually use the proceeds to redeem our 2025 euro notes and 2026 sterling notes at par in October 2024 and November 2024, respectively. As a result, we now effectively have no material maturities until 2027.

雖然我們最初使用這些債券的收益來償還我們的左輪手槍，但我們計劃最終使用收益分別於 2024 年 10 月和 2024 年 11 月按面值贖回 2025 年歐元票據和 2026 年英鎊票據。因此，我們現在實際上在 2027 年之前沒有任何實質的到期日。

We estimate that after incorporating the impacts of these actions, interest expense for the full year 2024 will be approximately $250 million. Importantly, we've been incorporating higher rates into our bidding strategy since interest rates started to rise two years ago. This is precisely why we have been emphasizing that pricing in the UK and Europe has not consistently adjusted to the currently higher cost of funding. In the US, however, market pricing has indeed adjusted to this higher cost of funding.

我們估計，考慮到這些行動的影響後，2024 年全年的利息支出將約為 2.5 億美元。重要的是，自從兩年前利率開始上升以來，我們一直在將更高的利率納入我們的出價策略中。這正是我們一直強調英國和歐洲的定價並未持續調整以適應當前較高的融資成本的原因。然而，在美國，市場定價確實已經適應了較高的融資成本。

With that, I'd like to turn it back over to Ashish.

有了這個，我想把它轉回給 Ashish。

Thanks, John. Before I close, I'd like to remind everyone of our commitment to a consistent set of financial priorities that we established long ago. The importance of a strong, diversified balance sheet in our industry cannot be overstated, especially in the midst of the ongoing growth in US market supply. We will continue to be good stewards of your capital by always taking the long view and prioritizing portfolio purchases at attractive returns in order to build long- term shareholder value.

謝謝，約翰。在結束之前，我想提醒大家，我們對很久以前製定的一套一致的財務優先事項的承諾。強大、多元化的資產負債表對我們產業的重要性怎麼強調都不為過，尤其是在美國市場供應持續成長的情況下。我們將繼續做好您資本的管家，始終著眼長遠，優先考慮以有吸引力的回報進行投資組合購買，以建立長期股東價值。

I would now like to highlight how we are differentiated from others in our industry, especially during a time when a number of our competitors are dealing with their own challenges. First, we are the largest player in the attractive US debt purchasing market. Second, we believe our ability to collect on the portfolios we buy and a corresponding purchase price multiples lead to collecting more over a vintage's lifetime, which in turn generates more cash, more earnings, and ultimately higher returns.

我現在想強調我們與業內其他公司的區別，特別是在我們的許多競爭對手都在應對自己的挑戰的時候。首先，我們是有吸引力的美國債務購買市場的最大參與者。其次，我們相信，我們對所購買的投資組合進行收藏的能力以及相應的購買價格倍數會導致在年份的整個生命週期內收集更多的資金，從而產生更多的現金、更多的收入，並最終帶來更高的回報。

And third, our well diversified global balance sheet allows us to allocate capital to opportunities with the highest returns. This flexibility is vital, as demonstrated by our current allocation of the vast majority of our capital to our MCM business in the US in order to maximize overall returns. Our balance sheet also provides us the flexibility to fund our business in a myriad of ways. This provides a significant advantage in times when traditional markets become less certain and more expensive.

第三，我們多元化的全球資產負債表使我們能夠將資本分配給回報率最高的機會。這種靈活性至關重要，我們目前將絕大多數資本分配給美國的 MCM 業務，以實現整體回報最大化，證明了這一點。我們的資產負債表也使我們能夠靈活地以多種方式為我們的業務提供資金。當傳統市場變得不太確定且成本更高時，這提供了顯著的優勢。

In closing, I'd like to quickly summarize our second quarter performance. Portfolio supply in the US market continues to grow to record levels, which is where we are currently focusing the majority of our capital deployment. Against this highly favorable backdrop, we deployed a record $237 million in the US in Q2 at strong returns.

最後，我想快速總結一下我們第二季的業績。美國市場的投資組合供應持續成長至創紀錄的水平，這是我們目前大部分資本配置的重點。在這種非常有利的背景下，我們第二季在美國部署了創紀錄的 2.37 億美元，並獲得了強勁的回報。

In the UK and Europe we are maintaining our discipline and continue to be very selective in our purchases until returns become more attractive. Our overall performance through Q2 is ahead of our expectations, driven by strong portfolio purchasing and collections.

在英國和歐洲，我們將保持紀律，並繼續嚴格挑選採購，直到回報變得更具吸引力。在強勁的投資組合購買和收藏的推動下，我們第二季的整體業績超出了我們的預期。

Due to the strength of our position in the favorable US market for portfolio purchasing and the continued execution of our strategy, we are raising our 2024 guidance provided in February. We now anticipate our global portfolio purchasing this year to exceed $1.15 billion, an increase of $75 million when compared to 2023. In addition, we expect our year-over-year collections growth to be approximately 11% to over $2.075 billion, an increase of over $200 million when compared to 2023.

由於我們在有利的美國投資組合購買市場中的強勢地位以及我們策略的持續執行，我們上調了 2 月提供的 2024 年指引。我們現在預計今年的全球投資組合採購將超過 11.5 億美元，比 2023 年增加 7,500 萬美元。此外，我們預計館藏收入將年增約 11%，達到 20.75 億美元以上，與 2023 年相比增加超過 2 億美元。

Now, we would be happy to answer any questions that you may have. Operator, please open up the lines for questions.

現在，我們很樂意回答您的任何問題。接線員，請開通提問線。

(Operator Instructions)

（操作員說明）

Mark Hughes, Truist Securities.

馬克休斯，Truist 證券公司。

Thank you. Jonathan, did you give the collections versus expectations for UK and for the US.?

謝謝。喬納森，你是否給出了英國和美國的收藏與預期的對比？

Hi, Mark, this is Ashish. I'll jump in. I have it in front of you. So in terms of against the expectations of December 31, 2023, which I believe you're asking, so globally, we performed 101%, US was 104%, and Europe 97%. Now in constant currency, those numbers become globally 102%. US, of course, it stays at 104% and Europe is 99% against expectations.

嗨，馬克，我是阿什什。我會跳進去。我把它放在你面前。因此，就 2023 年 12 月 31 日的預期而言，我相信您會問，全球範圍內，我們的表現為 101%，美國為 104%，歐洲為 97%。現在以固定匯率計算，這些數字在全球範圍內達到 102%。當然，美國維持在 104%，歐洲則為 99%，超出預期。

And is that six months or is that 2Q?

那是六個月還是第二季？

It's six months year to date, yes.

是的，今年迄今已經六個月了。

Okay. And then what is your collections multiple now on the 2024 paper in the US and UK. I'm sorry the I didn't see if the [queue] was out, so I apologize, but since I have.

好的。那麼您現在在美國和英國 2024 年報紙上的收藏倍數是多少？很抱歉，我沒有看到[隊列]是否已出，所以我很抱歉，但既然我已經出隊了。

That's okay. Yes. So the year to date multiple on US vintage is 2.3 times and for Europe, it is 2.1, for 2024 vintages year to date.

沒關係。是的。因此，對於美國年份至今的 2024 年份迄今的年份倍數為 2.3 倍，而對於歐洲年份，該倍數為 2.1 倍。

So the 2.3 times is that -- am I right in thinking that's down a little bit from the 2.4 at the first quarter? And if so, what driving that?

所以 2.3 倍是——我的想法比第一季的 2.4 下降了一點，對嗎？如果是這樣，是什麼推動了這一點？

Yeah, you are right, Mark. So cumulative number, is that slightly down from 2.4. I would say there is just -- overall, the multiples are still strong. And for like for like portfolios, we have not seen any degradation in return. So there's often product differences, types of portfolios you buy, high balance, large balance, or low balance, for example.

是的，你是對的，馬克。累計數字比 2.4 略有下降。我想說的是——總體而言，市盈率仍然很高。對於類似的投資組合，我們沒有看到回報有任何下降。因此，通常會存在產品差異、您購買的投資組合類型、高餘額、大餘額或低餘額等差異。

And I would say on a like-for-like basis, returns are absolutely very strong and no degradation. Multiples may move around a little bit here and there, but there is still very strong multiples. And on Europe the multiple has been increasing. I know you asked just for US, but that's the other thing I would highlight.

我想說，在同類基礎上，回報絕對非常強勁，而且沒有下降。倍數可能會有所波動，但倍數仍然非常強勁。在歐洲，這一倍一直在增加。我知道您只要求美國，但這是我要強調的另一件事。

Yeah. How about the availability under the credit facility?

是的。信貸安排下的可用性如何？

Well, right now with what we've done the bond deals, it's the full commitment. So it's $1.2 billion.

嗯，現在我們已經完成了債券交易，這是全面的承諾。所以是 12 億美元。

And then Jonathan, how is the interest expense going to play out next year? I hear your guidance for this year sort of implies something, what? In the [mid-60s] for the second half. Once you pay off those obligations, is that going to continue next year in the [mid-60s] or is that going to dip down? All depending on interest rates, obviously but --

那麼喬納森，明年的利息支出將如何發揮？我聽說你今年的指導有點暗示什麼，什麼？在[60年代中期]的下半場。一旦你還清了這些義務，這種情況會在明年[60年代中期]繼續下去還是會下降？顯然，一切都取決於利率，但是--

Yes, I'll tell you to quantify much into in 2025 at this point, I think I'll beg off on that. Just in general, we do expect the general trends to continue that we've seen this year and into next year. And that's probably to be a true statement for what you're seeing in the back half of the year for interest rates, as you point out as long as interest rate environment remains stable.

是的，我會告訴你在這一點上對 2025 年進行大量量化，我想我會迴避這一點。總的來說，我們確實預計今年和明年的整體趨勢將持續下去。正如您所指出的，只要利率環境保持穩定，這可能是您在今年下半年看到的利率狀況的真實陳述。

Yeah. Okay. All right. Thank you very much.

是的。好的。好的。非常感謝。

Zach Oster, Citizens JMP.

扎克·奧斯特，公民 JMP。

Hi, thank you for taking the question. This is Zach on for David. So we wanted to just quickly check in on two things. So first of all, just on the macro front, you kind of mentioned the stable payment rates, we want to see if there is any consumers that are opting for any longer payment rates or longer payment plans and if there's any other kind of general signs of a more stressed consumer.

您好，感謝您提出問題。這是大衛的紮克。所以我們想快速檢查兩件事。首先，在宏觀方面，您提到了穩定的付款率，我們想看看是否有消費者選擇更長的付款率或更長的付款計劃，以及是否有任何其他一般跡象壓力更大的消費者。

And then on the funding side, just wanted to see if we can get a reminder on if the global credit facility has any limits to how much of it can be deployed in the US, as you kind of talk about that flexible deployment. Thank you.

然後在資金方面，只是想看看我們是否能得到提醒，了解全球信貸安排是否對在美國部署的信貸額度有任何限制，正如您所說的靈活部署一樣。謝謝。

Okay, Zach. This is Ashish. Let me take the first one and I'll let John take the funding one. In terms of the consumer, I think, you're alluding to the US consumer. It's been very stable and consistent from what we have seen last time, several months quarters. No real - no deterioration in any way of payment rates or people's ability to stay on the payment plans.

好吧，扎克。這是阿希什。讓我拿第一個，然後讓約翰拿資金。就消費者而言，我認為你指的是美國消費者。與我們上次看到的幾個季度的情況相比，它非常穩定和一致。沒有真實的——付款率或人們繼續付款計劃的能力沒有任何惡化。

So it's very much a normalized environment when you compare it to 2019 pre-pandemic. And it's continuing - we are continuing to see that as well. And that's showing up in a very strong collections driven by stable consumer behavior combined with higher purchasing, that's driving increased collections.

因此，與 2019 年大流行前相比，這在很大程度上是一個正常化的環境。而且這種情況仍在繼續——我們也將繼續看到這一點。這體現在穩定的消費者行為和更高的購買量推動的非常強勁的系列中，這推動了系列的增加。

John, on the funding?

約翰，資金方面？

Yeah, in terms of funding, yeah, there is no restriction. We will deploy dollars where we see the best returns, and that could continue to mean a heavy skew to the US for a period of time, that's fine.

是的，在資金方面，是的，沒有限制。我們將把美元部署在回報最好的地方，這可能會在一段時間內繼續嚴重偏向美國，這很好。

Got it. Thank you.

知道了。謝謝。

(Operator Instructions)

（操作員說明）

Robert Dodd, Raymond James.

羅伯特·多德，雷蒙德·詹姆斯。

Hi, guys. Congratulations on the quarter and on Jonathan, on your eventual retirement. The changes in curves, recoveries, et cetera, in the quarter, it's the first time it's been positive in a while, so congrats on that. Pretty small number. Looks to me like it was maybe a $1 million negative on cash collections versus expectations, and then plus [6.5] on changes in curves. So is that right? And if it is, I realize there's a really small numbers.

嗨，大家好。恭喜本季和喬納森最終退休。本季曲線、復甦等方面的變化，這是一段時間以來第一次出現正面的變化，所以恭喜你。數量相當少。在我看來，現金收款與預期相比可能會出現 100 萬美元的負值，然後再加上曲線變化的 [6.5]。那麼這樣說對嗎？如果是的話，我意識到這個數字非常小。

Can you give us any color like if there were vintages or geographic concentrations in the area, I would guess maybe a little weakness in Europe. But where the curve changes are occurring, is there any particular concentration in any vintages there?

你能給我們任何顏色嗎，例如該地區是否有年份或地理集中度，我猜歐洲可能有點弱點。但在曲線改變的地方，那裡的任何年份是否有特定的集中度？

Hi Robert. This is Ashish. So, the numbers are actually slightly different. So, the performance above forecast was about $27 million. And the impact of NPV on curve changes was about $21.7 million. So, net is [5.7] positive in terms of total CECL impact for the quarter for the company.

嗨羅伯特。這是阿希什。所以，數字實際上略有不同。因此，高於預測的業績約為 2700 萬美元。NPV 對曲線變化的影響約為 2,170 萬美元。因此，就 CECL 對公司本季的整體影響而言，淨值 [5.7] 為正。

Now, in terms of your question on region. So overall, I would say the numbers are very small and really noise against how we adapt and forecast and refine it quarter-over-quarter. But in our queue, you will find that the other way to look at the [5.7] is, it's positive, about $9 million for MCM in US. And for Cabot, it's about negative $4 million or so. Again, those numbers combine actual versus forecast performance and the change in forecast. So just be mindful of kind of how that's calculated. That's how it divides up.

現在，就你關於地區的問題而言。因此，總的來說，我想說，這些數字非常小，而且與我們逐季調整、預測和改進的方式相比，確實存在噪音。但在我們的隊列中，您會發現從另一個角度來看[5.7]，它是積極的，MCM 在美國的銷售額約為 900 萬美元。對卡博特來說，大約是負 400 萬美元左右。同樣，這些數字結合了實際與預測的表現以及預測的變化。因此，請注意其計算方式。就是這樣劃分的。

Okay. And any vintage differences, I mean, obviously, like the 2001s were a problem, but I think have stabilized. Anything that's particular to 20 year in there or is it just spread out?

好的。我的意思是，任何年份的差異顯然都是一個問題，例如 2001 年，但我認為已經穩定下來。裡面有什麼 20 年特有的東西還是只是分散的？

I would say, overall any changes in vintage you might see. Again, those are change impact of two things. First, performance against forecast, and second is change in forecast. So overall, I would say these are just minor, very minor impacts and noise. I would not draw any conclusions from vintage level data that you will see in our queue.

我想說的是，總體而言，您可能會看到年份的任何變化。同樣，這些是兩件事的變化影響。首先是業績與預測的對比，其次是預測的變化。總的來說，我想說這些只是很小的、非常小的影響和噪音。我不會從您將在我們的隊列中看到的復古級別數據得出任何結論。

The overall number is a sum of all those vintages across geographies, across product types, and there is no real differences across vintages or anything. Our overall collections, as I said, we had a very good quarter in terms of collections. And the CECL impacts are small and they are more about forecasting refinements and impacts on those than anything around major vintage performance or consumer behavior or anything like that.

總數是跨地區、跨產品類型的所有年份的總和，各個年份或任何其他年份之間沒有真正的差異。正如我所說，我們的整體收藏品在收藏品方面表現出色。CECL 的影響很小，更多的是預測改進和對這些因素的影響，而不是圍繞主要年份表現或消費者行為或類似的事情。

Got it. Thank you. And then just one more, if I can. On legal collections, in total, it broke over $60 million for the first time in a while. So, is that - are we now starting to hit a period of ramp in legal, given you have been buying a lot for some period of time, there's always a lag before legal goes up following purchases, because it's not your first choice to pursue the legal avenue.

知道了。謝謝。如果可以的話，然後再來一張。合法收藏品的總價值近來首次突破 6,000 萬美元。那麼，我們現在是否開始進入合法的上升期，考慮到您在一段時間內已經購買了很多東西，在購買後合法的上升之前總是有一個滯後，因為這不是您追求的第一選擇合法途徑。

But is this the beginning of a rising trend only in legal, or was there anything just unusual in Q2 about timing of items?

但這只是法律領域上升趨勢的開始，還是第二季度在專案時間安排上有什麼不尋常的地方？

So, Robert, I want to make sure I understood, you meant the legal collections expense, correct? Is that your question?

那麼，羅伯特，我想確保我明白，您的意思是合法收款費用，對嗎？這是你的問題嗎？

Yes. Correct.

是的。正確的。

Yeah. All of that is coming from our US business as we are growing purchasing and just there's a natural (technical difficulty). Now that said, the overall legal collections as a percent of total for MCM was in the 35%, 36% range kind of on the lower side, similar to Q1. So, we continue to get very good success in our call center and digital channel. Any rise in legal expense is just part of increased purchasing, and it's all coming from the US side from the MCM business.

是的。所有這些都來自我們的美國業務，因為我們正在增加採購，而且這是一個自然的過程（技術難度）。話雖如此，MCM 的整體合法收款額佔總收款額的百分比處於 35% 至 36% 的範圍內，處於較低水平，與第一季類似。因此，我們的呼叫中心和數位管道繼續取得非常好的成功。任何法律費用的增加都只是採購增加的一部分，而這一切都來自美國方面的 MCM 業務。

Got it. Thank you.

知道了。謝謝。

I'm seeing no further questions at this time, so I would like to hand the call back to Ashish Mesih for his closing statements.

目前我沒有看到更多問題，因此我想將電話轉回給阿什什·梅西赫 (Ashish Mesih)，讓他作結案陳詞。

As we close the call, I'd like to reiterate a few important points. We believe Encore is truly differentiated in our sector with a solid track record of operating results and superior capabilities, guided by a consistent strategy and clear financial priorities.

在我們結束通話時，我想重申一些重要的觀點。我們相信，在一致的策略和明確的財務優先事項的指導下，Encore 在我們的行業中真正脫穎而出，擁有良好的經營業績記錄和卓越的能力。

As the (technical difficulty) continues to turn, the US market for portfolio supply is growing to record levels. We continue to apply our disciplined portfolio purchasing approach by allocating record amounts of capital to the US market, which has the highest returns. When combined with our effective collections operation, we believe this approach is enabling 2024 to be a turning point in our operational and financial results.

隨著（技術難度）持續轉向，美國投資組合供應市場正成長至創紀錄水準。我們繼續採用嚴格的投資組合購買方法，將創紀錄的資金配置到回報率最高的美國市場。當與我們有效的收款業務相結合時，我們相信這種方法將使 2024 年成為我們營運和財務表現的轉捩點。

Thanks for taking the time to join us, and we look forward to providing our third quarter results in November.

感謝您抽出時間加入我們，我們期待在 11 月提供第三季業績。

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

感謝您參加今天的會議。這確實結束了該程式。您現在可以斷開連線。