Codere S A : 20/05/2021 Presentación de Resultados 1T 2021

1Q 2021 Earnings Results

May 20, 2021

Disclaimer

• This presentation (the "Presentation") has been prepared and is issued by, and is the sole responsibility of Codere, S.A. ("Codere" or "the Company"). For the purposes hereof, the Presentation shall mean and include the slides that follow, any prospective oral presentations of such slides by the Company, as well as any question-and-answer session that may follow that oral presentation and any materials distributed at, or in connection with, any of the above.
• The information contained in the Presentation has not been independently verified and some of the information is in summary form. No representation or warranty, express or implied, is made by Codere or any of its affiliates (together, "Codere Group"), nor by their directors, officers, employees, representatives or agents as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions expressed herein. None of Codere nor any of its affiliates, nor their respective directors, officers, employees, representatives or agents shall have any liability whatsoever (in negligence or otherwise) for any direct or consequential loss, damages, costs or prejudices whatsoever arising from the use of the Presentation or its contents or otherwise arising in connection with the Presentation, save with respect to any liability for fraud, and expressly disclaim any and all liability whether direct or indirect, express or implied, contractual, tortious, statutory or otherwise, in connection with the accuracy or completeness of the information or for any of the opinions contained herein or for any errors, omissions or misstatements contained in the Presentation.
• Codere cautions that this Presentation may contain forward looking statements with respect to the business, financial condition, results of operations, strategy, plans and objectives of the Codere Group. While these forward looking statements represent our judgment and future expectations concerning the development of our business, a certain number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to, (1) general market, macroeconomic, governmental, political and regulatory trends; (2) movements in local and international securities markets, currency exchange rate and interest rates; (3) competitive pressures; (4) technical developments; (5) changes in the financial position or credit worthiness of our customers, obligors and counterparts. These and other risk factors published in our past and future filings and reports, including those with the Spanish Securities and Exchange Commission ("CNMV") and available to the public both in Codere's website (www.codere.com) and in the CNMV's website (www.cnmv.es), as well as other risk factors currently unknown or not foreseeable, which may be beyond Codere's control, could adversely affect our business and financial performance and cause actual results to differ materially from those implied in the forward-looking statements.
• The information contained in the Presentation, including but not limited to forward-looking statements, is provided as of the date hereof and is not intended to give any assurances as to future results. No person is under any obligation to update, complete, revise or keep current the information contained in the Presentation, whether as a result of new information, future events or results or otherwise. The information contained in the Presentation may be subject to change without notice and must not be relied upon for any purpose.
• This Presentation contains financial information derived from Codere's unaudited financial statements for the quarter and, if applicable, year to date period. None of this financial information has been audited by our auditors. Financial information by business areas is presented according to GAAP as well as internal Codere Group's criteria including a restatement of historical figures to reflect, among other things, an exclusion of non-recurring items and impact of effective exchange rates, in each case as per management estimates. These criteria do not follow any particular regulation and can include historical figures, forecasts and subjective valuations which could represent substantial differences should a different methodology be applied.
• Market and competitive position data in the Presentation has generally been obtained from industry publications and surveys or studies conducted by third-party sources. Peer firm information presented herein has been taken from peer firm public reports. There are limitations with respect to the availability, accuracy, completeness and comparability of such data. Codere has not independently verified such data and can provide no assurance of its accuracy or completeness. Certain statements in the Presentation regarding the market and competitive position data are based on the internal analyses of Codere, which involve certain assumptions and estimates. These internal analyses have not been verified by any independent source and there can be no assurance that the assumptions or estimates are accurate. Accordingly, undue reliance should not be placed on any of the industry, market or Codere's competitive position data contained in the Presentation.
• Alternative Performance Measures: This report includes certain Alternative Performance Measures ("APMs") in accordance with the European Securities and Markets Authority (ESMA) Directive 2015/1415. These measures, which are not defined under IFRS standards, are intended to provide more accurate, comparable and reliable information in order to improve the understanding of the Company's financial performance and its reported information. For definitions, usage rationales and reconciliation of these metrics with IFRS, please visit the Presentations section within the Shareholders and Investors site of www.codere.com.
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Table of Contents

• 1. Trading Update
• 2. Operational Results
• 3. Liquidity and Credit Overview
• 4. Appendix

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01. Trading Update

• Our business continues to show its resilience and strength in a difficult first quarter of the year in which the pandemic has impacted severely many of the markets where we operate. Authorities in most of our markets have implemented additional operational restrictions. Italy remains closed as of today, while Uruguay and Argentina suspended operations in March and April respectively. We expect to return to a fully operational portfolio between June and July.
• Performance in markets with softer restrictions continues to be strong, particularly in Spain retail or in Argentina and Uruguay (while halls were in operation). In the meantime, Mexico continues to progressively recover revenue levels, as most of our halls are today in operation, despite being affected by material operational restrictions, and Panama has had a strong recovery since Panama City casinos were reopened early in March.
• Our online business continued its strong performance in Q1, despite the market wide decline in margin in March.
• On April 22, the company entered into a Lock Up Agreement for the terms of a Restructuring Transaction (described in detail in the following pages) with an Ad Hoc Committee of the largest holders of its Super Senior and Senior Secured Notes.
• The Lock Up Agreement was ratified by the Company's Shareholder's Assembly held on May 11, 2021.
• Furthermore, on May 18, as the early bird window expired, the 75% minimum threshold of accessions to the Lock-Up Agreement was surpassed on both its Super Senior Secured Notes and its Senior Secured Notes, paving the way for a successful transaction implementation - with over 90% of the Super Senior Notes, and approximately 89% of the EUR denominated and 94% of the USD denominated Senior Notes. We expect to complete the process by the end of September.
• Codere S.A. will own 5% of the New TopCo. We expect that upon completion of the full financial restructuring, the Shareholder's Assembly of Codere S.A. will initiate its liquidation process, which will trigger the delisting of the company from the Spanish Stock Exchange.
• This transaction provides a solid foundation to ensure the recovery of the business in all of its markets. The management team expects, with the work and commitment of all of the employees of the company and the stakeholders that are supporting us and have recapitalized our balance sheet, to return to pre-pandemic profitability levels and be in a position to take advantage of the growth and consolidation opportunities that will come in the next quarters and years.

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01. Trading Update - Key Restructuring terms

	● One single class of ordinary shares
		● Shares to New SSNs: 95% stapled to the HoldCo PIK Notes
Equity / Shareholders		● Equity terms for current Shareholders of Codere SA as follows
		● 5% straight equity
		● 15% of 10 year warrants struck at an equity value of €220m. Warrants to kick-in upon an exit event
	● Amount: €100m in the form of New Super Senior Secured Notes ("New SSSNs")(1)
	●	Interest: 10.75% cash
	● Fees: 3% OID fee capitalized to principal amount. 3% exit fee payable in cash at restructuring completion and 2% Backstop Fee payable in cash with second tranche of
		Bridge Financing
	● Available in two tranches:
Bridge Financing ("Bridge")		● First tranche: €30m(1) available at signature of the LUA
	● Second tranche: €70m(1) available once the majorities have been achieved
	●	Maturity: September 2023
	● Ranking: Super Senior and pari passu with existing New SSSNs(2)
	● Investors: The first tranche is funded by the AHC and the second tranche is offered to the Senior Secured Notes ("SSN") holders and backstopped by the AHC; the AHC
		pro-rata portion across the two tranches will be based on their pro-rata holdings
	● Other: At transaction close, terms to be amended to reflect New Money Tranche ("NMT") terms
	● Amount: €125m in the form of New SSSNs
	●	Interest:
		● Year 1.5: 8.0% cash + 3.0% PIK; or if Available Liquidity is less than €100m, 6.0% cash + 5.50% PIK
New Money Tranche		● Thereafter: 8.0% cash + 3.0% PIK
("NMT")	●	Fees: 3% OID fee capitalized to principal amount. 2% Backstop Fee payable in cash at restructuring completion
	●	Maturity: September 2026
	● Ranking: Super Senior and pari passu with New SSSNs(2)
	● Investors: Backstopped by AHC, offered to all SSNs holders, pro rata to their holdings

1. Cash funded amount (excluding original issue discount)

(2) Security perimeter to be further discussed

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