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2016-11-18

DDM Holding AG: Cision Promoted: "Slovenia pulled DDM Holding forward in q3"

The extensive growth for DDM Holding in the third quarter was pulled
forward by the group's largest transaction to date - €17 million, in
Slovenia.

"Following the investment in Slovenia, DDM has had a significant
increase in collected funds resulting in a strengthen cash flow.",
says CEO Gustav Hultgren.

(Article from Cision Promoted 2016-11-18:
http://news.cision.com/se/cision-promoted/r/slovenia-pulled-ddm-holding-...
)

DDM Holding, listed at stock exchange First North in Stockholm, is a
specialized investor in and manager of consumer debt receivables. A,
somewhat simplified, description of DDM Holdings sector and business
is to invest in debt, also called distressed assets. DDM focuses on
consumer receivables issued by banks and other credit institutions in
so-called non-performing loans, where the debtor has stopped
amortize. But unlike most other companies in the industry, DDM
outsources the operating part of the collection to local partners.

"This is central to our business model. By outsourcing debt collection
activities, we have no expensive set-up costs as we enter a new
market. This means we do not need to linger in a particular country
to support a local debt collection. It gives us great freedom to look
at investment options across Eastern Europe and select portfolios
with the best return.", says CEO of DDM Holding, Gustav Hultgren.

DDM Holding, based in Switzerland, was founded in 2007 by the Group's
present Chairman of the Board, Kent Hansson. With great experience
from the credit and debt collection industry, Kent Hansson saw a
potential market for investment in Eastern Europe, where his employer
at the time did not operate. The first portfolio investment for DDM
was carried out in Russia in 2008 and became, together with Romania,
the first geographic market for DDM. The challenges for the Russian
economy, however, has resulted in reduced investments in the Russian
market. Focus for DDM Holding today is instead on other Eastern
European markets such as Slovenia, Hungary, Romania and the Czech
Republic. Today, the group has 2.3 million consumer debt receivables
with a face value exceeding EUR 2 000 million.

"The key to success"
To reduce risk is, first and foremost, to calculate the repayment
options of the debtor combined with the expenses of the portfolio. To
answer the question of who is able to pay back on their debt, and
how, is according to the CEO the key to success. The Group manages
this risk with carefully designed strategies based on thorough
analysis of the portfolio before investing.

"We go through historical data and analyze the conditions for
repayment. Factors in need of clarifications is, for example, if the
repayment is expected to be made in one single payment or in monthly
installments, whether the case could go to court and so on. Revenue
profile of the portfolio forms the basis for pricing and the decision
to acquire the portfolio, or not. "

And to price a portfolio correctly is, according to the CEO, one of
the Group's greatest strengths.

"To find and assess a portfolio is DDM's core competencies. After the
acquisition, the portfolio is taken care of by our staff, many of
whom have backgrounds in the collection industry. They govern the
implementation of the strategy designed for our local partner. While
the strategy is carried out, we are actively following up, adjusting
if necessary, to maximize the development of the process - something
we usually do better than our competitors."

DDM has gone from acquiring portfolios in the price range of €1-5
million to a current level of €15-25 million. There is less
competition in this segment, because fewer companies have access to
that amount of capital, explains the CEO. Also, lingering on the
Eastern European markets are prejudices about lack of regulations and
unethical actors, something that is simply not true, according to
Gustav Hultgren.

"The Eastern European markets are currently being developed at a
faster rate than the Western dittos. Many countries have or are close
to catch up with Western Europe. The regulations continuously
strengthens, mainly by consumer protection organizations, largely
driven by EU regulations."

"Consistent progress of improvement"
In addition to the operation in Slovenia during the third quarter, the
Group has also paid off loans of approximately €8 million as a result
of the stronger cash flow; an important step in the right direction
to strengthen the balance sheet, previously burdened by great capital
expenses.

"To continue our growth and reduce our capital expenses is our number
one priority today. A quick look at our finances and it's clear that
the high capital expenses weighed down on our result. We are
consistently working to improve this, but it is a lengthy process in
which we must demonstrate we're delivering on our strategy. Recent
quarters confirms that we are doing so."

DDM's portfolio has grown by 57 percent over the past twelve months
after the major acquisitions in Slovenia and Hungary. The financial
targets for 2016 as well as the full year of 2017, requires
additional capital, says the CEO. The full year target for 2016 was
set at €30 million in investments, but the Group has already reached
an investment level of €34 million. For next year, the target is to
invest €50 million.

"We have previously announced our intention to, within the near
future, approach the capital market to finance a solution for our
continued journey of strong growth." says Gustav Hultgren.

DDM Holding AB is listed on Nasdaq First North in Stockholm since
August 2014. On Wednesday morning, DDM Holding traded for
approximately SEK 38 per share.

/Emelie Lundgren
emelie.lundgren@cisionpromoted.se
Key posts in third quarter, EUR (Y/Y)
Net collections: 10,4 mn (2,4 mn)
Cash EBITDA: 9,3 mn (1,1 mn)
Profit: 3,9 mn (-1,6 mn)
Gross ERC (cash flow forecast of portfolio): 89,6 mn (57,2 mn)

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

Hans Uhrus, Investor Relations Manager
Mail: investor@ddm-group.ch | Tel: +46 7689 50101

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

-----------------------------------------------------------
http://news.cision.com/ddm-holding-ag/r/cision-promoted---slovenia-pulle...
http://mb.cision.com/Main/10229/2126114/592092.pdf

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