24 Nov

Harmoney Investor Day

HARMONEY © 2021 Investor Day 24 November 2021 Investor Day Wednesday 24 November 2021 1 HARMONEY © 2021 Investor Day 24 November 2021 Agenda 1. Introduction 2. Trading update 3. Business recap 4. Why 100% consumer-direct wins 5. Growth opportunities of consumer-direct 6. Q&A 7. Appendices 2 All amounts in this presentation are denominated in $NZD unless otherwise stated HARMONEY © 2021 Investor Day 24 November 2021 Trading update 3 HARMONEY © 2021 Investor Day 24 November 2021 Trading update ? New customer loan origination momentum continues in Australia and New Zealand despite some suppression in NZ due to a continuing lockdown in Auckland. ? Group pro-forma receivables grew to $524m at 31 October 21. ? This momentum has further accelerated with November 21 expected to set a new record month for group loan originations. ? All other key business metrics are inline with full year guidance. 4 HARMONEY © 2021 Investor Day 24 November 2021 5 FY21A FY22F Change Group loan book $501M >$600M >20% Group revenue $79M >$92M >16% Net lending margin 6.8% >7% >0.2% Opex* to revenue 22% <20% >-2% FY22 Market guidance Harmoney forecasts its transition to warehouse funding to be ~90% complete by 30 June 2022. FY21 and FY22 based on pro forma ?nancials. FY22 forecasts assumes COVID-19 lockdown restrictions currently in place in Australia and New Zealand do not have a material impact on originations or repayments and are based on an assumed FY22 average 1.06 AUD/NZD exchange rate. *Excludes direct borrower acquisition costs. HARMONEY © 2021 Investor Day 24 November 2021 Business recap 6 HARMONEY © 2021 Investor Day 24 November 2021 Executive summary Harmoney is the largest 100% online consumer-direct lender across Australia & New Zealand Compelling Fundamentals Attractive revenue pro?le, loan book, track record of origination growth, and high margins Strong Market Position Established presence in New Zealand and in high growth phase in Australia Credit Product Innovation Opportunities to expand product o?erings by leveraging deep consumer data in our Libra platform Warehousing & Securitisation Major bank warehouses with two Big 4 Banks plus ABS program in place Experienced Team Highly experienced management team with a proven track record of success in consumer ?nance Technology Empowered Proprietary technology, Stellare ® enables automation, machine learning, data utilisation and direct marketing Strong Customer Retention High customer satisfaction and personalised product o?ering drives strong growth in repeat loans from existing customers (3R’s) Operating Leverage Stellare ® enhances customer lifetime value and minimises origination costs, facilitating scale and e?ciency 1 2 3 4 5 8 7 6 7 Investor Day 24 November 2021 HARMONEY © 2021 Investor Day 24 November 2021 $54m highest ever originations month. 2014 2015 2016 2017 2018 2019 2021 Start-up Expand Accelerate Harmoney’s growth evolution JUL 2014 First P2P licence in NZ granted by the FMA to Harmoney. SEP 2014 Harmoney launched. Secured $100m in wholesale funding. Heartland Bank acquires a 10% shareholding and ?rst P2P loan funded. $100m AUG 2015 Loaned in under 12 months. FEB 2017 Australia Brisbane pilot launched. DEC 2015 Awarded 5-star CanStar rating for personal loans. Harmoney wins Deloitte Fast 50 One to Watch. 2020 $500m SEP 2017 Loaned to date. $1.0b NOV 2018 Loaned to date. DEC 2018 Big-4 bank NZ warehouse facility. SEP 2017 Implemented machine learning scorecard 1.5. $1.5b SEP 2019 Loaned to date. OCT 2019 $25m Series C capital raise. JAN 2020 Big-4 bank AU warehouse facility. NOV 2020 IPO on the ASX & NZX raising AU$70m. IPO FEB 2021 Launched new generation Libra 1.7 scorecard. $2.0b MAR 2021 Loaned to date. FY21 achieves pro-forma break even Cash NPAT. JUL 2021 2022 OCT 2021 1st ABS transaction of $105m. Awarded AFR Most innovative Companies. JUN 2021 8 Investor Day 24 November 2021 HARMONEY © 2021 Investor Day 24 November 2021 Largest 100% online consumer-direct personal lender across Australia & New Zealand Customer Team Key metrics 9 83 Net promoter score 4.8/5 Average rating 4.7/5 Average rating >50% Home owners in loan book Awards COMPANY OF THE YEAR 2015 • 2016 • 2017 • 2018 • 2019 New Zealand 75 FTEs (Auckland & Sydney) >50% FTEs are engineers, product managers and data scientists >$92m FY22 revenue guidance $2.4b Total loan originations $524m Loan book at 31 Oct 21 Break Even FY21 pro-forma Cash NPAT 10.6% FY21 net interest margin 6.8% FY21 net lending margin 0.47% 90+ day loan book arrears Australia 2017 • 2018 2021 HARMONEY © 2021 Investor Day 24 November 2021 Rapid growth across all key business metrics Powerful consumer-direct acquisition engine. Over 724k customer accounts have been added to our Stellare ® platform. 1. Account acquisition High growth of new customer originations in Australia powered by Stellare’s Libra. 2. New loan originations 3. Superior net margins 10 Superior net interest margin and net lending margin demonstrate portfolio quality, bene?t of 100% consumer direct, and 3Rs (Return, Repeat, Renew). 260% NEW CUSTOMER ORIGINATIONS IN AU 51% CAGR HARMONEY © 2021 Investor Day 24 November 2021 Current personal loan product • Personalised ?xed rates based on customer credit characteristics from 5.35% - 19.99% p.a. • Loans up to $70k in Australia and New Zealand with loan terms of three, ?ve (and seven years from December 21) • Highly automated simple and streamlined process • Customers receive funds within 24 hours of acceptance by the customer • Loans are compliant with applicable laws in Australia and New Zealand • No fees ever other than one upfront loan establishment fee Fast, 100% online Use of funds 11 Unsecured personal loans Fast funding Interest rates from 5.35% to 19.99% Fully CCCFA / NCCPA compliant Risk-based pricing Automated application process Car Loans Debt Consolidation Travel Loans Education Loans Business Loans Medical Loans Renovation Loans Wedding Loans HARMONEY © 2021 Investor Day 24 November 2021 Investor Day 24 November 2021 Proprietary technology 12 A seamless consumer experience powered by data and technology Machine learning ? Algorithms to support continuous improvements in the credit underwriting process ? Continuous learning direct marketing model driving down CAC Data-driven ? Utilise data analytics to produce impartial, data-driven credit assessment and pricing ? Over $7.4bn in lending assessed, 450k+ completed applications Automation ? High degree of automation and straight-through processing driving operational scale and e?ciency ? 68% of applications require no human interaction Consumer-direct channel ? Manage the consumer experience, build long-term direct relationships and customer lifetime value (CLV) ? ~$0 CAC after ?rst loan originated (3R’s) ? Over + 20k ????? customer reviews >50% of employees Proprietary I.P. are engineers, product managers and data scientists Developed and re?ned over 7 years, Stellare ® combines data analytics, machine learning, and in-house knowledge to create a truly digital lending platform. HARMONEY © 2021 INVESTOR DAY 24 NOVEMBER 2021 Our 100% online consumer direct brand 13 HARMONEY © 2021 Investor Day 24 November 2021 Harmoney re-brand We are rolling out a new consumer-direct mobile-?rst online brand identity. Humanising money 14 HARMONEY © 2021 INVESTOR DAY 24 NOVEMBER 2021 ‘Introducing Harmoney’ video 15 HARMONEY © 2021 INVESTOR DAY 24 NOVEMBER 2021 Why 100% consumer direct wins 16 HARMONEY © 2021 INVESTOR DAY 24 NOVEMBER 2021 Largest 100% online consumer-direct personal lender across Australia & New Zealand Our unique strategy is to create direct relationships with consumers 100% online, at scale, then nurture them to create high value now and into the future. To do this Harmoney combines data, technology and digital marketing like no other. The long term value of consumer-direct $2.4 Billion Cumulative originations as at 31 October 2021 Harmoney growth ?ywheel Market leading consumer-direct loan originations 17 HARMONEY © 2021 INVESTOR DAY 24 NOVEMBER 2021 Why 100% consumer-direct wins Deep Consumer Data + Automation Lower Losses Lower CAC High Shareholder Returns Fixed Opex Lower Funding Costs = = Growth opportunities of consumer-direct model Consumer-direct market tailwinds Home loans Other ?nancial products Current personal loan 18 HARMONEY © 2021 INVESTOR DAY 24 NOVEMBER 2021 Consumer direct market tailwinds 19 HARMONEY © 2021 Investor Day 24 November 2021 20 The big banks were already retreating... then the pandemic hit and accelerated the trend Aussies and Kiwis migrate online. Ecommerce soars. Just as the consumer - direct future is disintermediating categories like travel and retail, lending is being disrupted by nimble Fintechs o?ering people what they need. Harmoney is taking full advantage of this. UN Conference on Trade and Development (UNCTAD) based on national statistics office. Australian Financial Review, July 11 2021. HARMONEY © 2021 INVESTOR DAY 24 NOVEMBER 2021 ? More Aussies signed up for their personal loan via online than via phone, branch, broker combined Google, Kantar Shopping Pulse, May 2021. 21 HARMONEY © 2021 Investor Day 24 November 2021 Harmoney & listed peers <2% Australian personal lending market ? The Australian personal lending market represents an enormous growth opportunity as consumers move online. ? The vast majority of personal lending is still provided by banks and traditional lenders. ? Consumers are gravitating to purchasing and conducting ?nancial services online. ? Personal lending is for many purposes, e.g. home, car, life events, small business and consolidation of these. ? Harmoney’s deep data focuses its marketing and funding on the most attractive opportunities. Huge market opportunity 22 Harmoney and listed peers Australian market share as at 30 Sept 21 A$137B Australian personal lending (Sep 2021) 1. A$137Bn at September 2021 source RBA, ‘D2 Lending And Credit Aggregates - Credit; Other personal’, which covers all personal credit (non-business, non-housing/mortgage), incl. e.g. personal loans, car loans and credit cards. 2. Listed personal lending peers comprise Wisr, MoneyMe & Plenti with receivables balances sourced from September 21 market trading updates. HARMONEY © 2021 INVESTOR DAY 24 NOVEMBER 2021 Deep consumer data + automation Deep Consumer Data + Automation Lower Losses Lower CAC High Shareholder Returns Fixed Opex Lower Funding Costs = = 23 HARMONEY © 2021 INVESTOR DAY 24 NOVEMBER 2021 Consumer-direct means deep consumer data Broker/intermediary models o?er limited consumers and data to build smart credit and marketing platforms. Broker: Limited data H ar money has much deeper consumer data. 7 years of consumer data from over 45 0,000+ loan applications totalling over $7.4 billion in loan applications. Direct: Deep data Consumer data plus machine learning in the Stellare ® platform builds smarter credit decisions and smarter digital advertising, which e?ciently grows Harmoney’s loan originations. Deep data + A.I. 10010110000100111001101111001 00001011100111111111100010110 10010110000100111001101111001 00001011100111111111100010110 00000000110101011110111100001 01010101101011011000011110001 00110110111010110101010111100 11001011011110101010101011110 00111101010111101100111101010 24 HARMONEY © 2021 INVESTOR DAY 24 NOVEMBER 2021 How deep data improves our marketing e?ciency Harmoney embraces deep data in three core areas. Data is obtained from di?erent sources and utilised by Stellare ® for real-time performance. Consumer behavioural data Financial performance data • Conversion rates are improved, reducing costs, through analysis of operational data. • Analysis of this data leads to improved design, messaging, on page support and page load performance. Operational data • Data-driven targeting and insights from customers’ digital behaviour and attitudes - gathered from analytics, repayment behaviour, social media and A/B testing. • Mining the advertising cost data + dynamic rate-for-risk pricing and its relationship with conversion helps Harmoney maximise value. 25 HARMONEY © 2021 Investor Day 24 November 2021 Stellare’s automated loan application process facilitates rapid scalability 26 Straight-through-processing (STP) measures the ratio of loans that complete a fully automated loan application process (no human intervention). Our STP settings can be temporarily adjusted to apply conservative settings as needed, such as when releasing a new scorecard, or where the macro conditions warrant a conservative approach. Fully automated loan applications are 68% 68% 6 month average Jan - Jun 21 Fully automated loan applications HARMONEY © 2021 INVESTOR DAY 24 NOVEMBER 2021 Reducing customer acquisition cost (CAC) Marketing Platform Deep Consumer Data + Automation Lower Losses Lower CAC High Shareholder Returns Fixed Opex Lower Funding Costs = = 27 HARMONEY © 2021 INVESTOR DAY 24 NOVEMBER 2021 28 HARMONEY © 2021 INVESTOR DAY 24 NOVEMBER 2021 Google: paid search auction & organic results Organic search results Paid search auction $43.00 $42.99 $40.50 $0.00 29 HARMONEY © 2021 INVESTOR DAY 24 NOVEMBER 2021 The ‘banks’ Google Ads strategy Competitors: ? Spend millions of advertising dollars buying clicks on Google using keywords such as ‘borrow money’ or ‘personal loans’. ? Use intuition to ?nd their customers. ? Large marketing teams (high opex). Ine?cient and costly 30 HARMONEY © 2021 INVESTOR DAY 24 NOVEMBER 2021 Consumer-direct: the challenge for Fintechs ? The "personal loans" search auction on Google is competitive and expensive (~$40+ per click) ? Harmoney has a prime credit criteria threshold which applicants must meet in order to receive a loan o?er. ? Without data and machine learning, credit eligibility and purchasing intent has required guesswork. Are unwanted consumers clicking my advertising? Without deep historical data and expertise, many ?ntech’s ?nd consumer-direct expensive and fall back on traditional broker channels. 31 HARMONEY © 2021 INVESTOR DAY 24 NOVEMBER 2021 How can we attract high intent and eligible applicants at scale? 32 32 HARMONEY © 2021 INVESTOR DAY 24 NOVEMBER 2021 Anil Sabharwal, Vice President at Google video 33 HARMONEY © 2021 INVESTOR DAY 24 NOVEMBER 2021 Stellare ® + Google: integrated machine learning ? Rather than outspending the competition, can we attract our target customers, and exclude users unlikely to meet our credit assessment? ? By analysing $7.4b of loan applications and data from 450,000+ Aussies and Kiwis, Harmoney’s Data Science team used Stellare ® to calculate the Customer Lifetime Value (CLV) of every lead Google provides. ? Harmoney uses this to bid more for higher value leads, incentivising Google to ?nd and serve Harmoney advertising to our target consumers. 34 We leave the competition to their expensive shotgun strategy whilst we are laser focused on our prime consumers. HARMONEY © 2021 INVESTOR DAY 24 NOVEMBER 2021 How does Google’s integration with Stellare ® work? 35 Application *CLV = Customer Lifetime Value Stellare ® calculates the likelihood of the consumer to take the loan and their resulting customer lifetime value. CLV Value $ HARMONEY © 2021 INVESTOR DAY 24 NOVEMBER 2021 36 *CLV = Customer Lifetime Value Time of day Device Location +250 more data points Browsing & Search history Demographic data Website browsing data Google’s smart bidding algorithm Anticipates next auction & bid price for prime consumers Harmoney’s advertising is seen by targeted high value consumers leaving the competition to their expensive shotgun strategy. How does Stellare’s integration with Google work? CLV Value $ HARMONEY © 2021 INVESTOR DAY 24 NOVEMBER 2021 E?cient, accurate and optimised customer acquisition 37 HARMONEY © 2021 INVESTOR DAY 24 NOVEMBER 2021 Stellare ® / Google integration video 38 HARMONEY © 2021 INVESTOR DAY 24 NOVEMBER 2021 ? Harmoney has supercharged it’s advertising with Google for exponential growth, creating a marketing strategy that connects with more high value consumers. As the application count grows, our Stellare ® algorithms blend with Google’s vast product network to become even more accurate. 39 HARMONEY © 2021 INVESTOR DAY 24 NOVEMBER 2021 Recognised globally as thought leaders by Google 40 “Harmoney has one of the most advanced digital marketing models in Australia and New Zealand, if not the world.” Nick Love, Head of performance at Google in Australia & New Zealand, Oct. 2020 Australian Financial Review, October 19, 2020. HARMONEY © 2021 Investor Day 24 November 2021 The consumer-direct multiplier e?ect ? With a consumer-direct relationship, Stellare ® targets customers for retention and re-marketing campaigns; o?ering the right solution for the customer’s next big ?nancial decision at the right time. ? The multiplier e?ect in action: 32.5K accounts from 2015 originally created $118m in year one loan originations. Six years later, these same accounts contributed a 5x combined loan origination value of $594m. Meeting customers evolving needs $594m ~$0 Additional Mktg Cost Originations to Nov 2021 Originations in ?rst year $118m 32.5K Origination Growth In 6 Years 5x Accounts Created CY2015 41 HARMONEY © 2021 INVESTOR DAY 24 NOVEMBER 2021 Customer acquisition proven in NZ - now driving Australian growth ? The Stellare ® marketing model outbids competitors for target consumers, real-time feedback refines targeting, driving down CAC. ? The consumer-direct relationship then drives CAC lower as existing customers return for future needs, at ~$0 CAC i.e. ~$0 CAC to originate 2nd, 3rd, 4th… loan. ? Proven in New Zealand and now starting to replicate in Australia, as Stellare ® learns the multiplier effect takes hold. CAC reducing over time 42 Proven acquisition model <3% Annualised Acquisition Cost to average loan book in New Zealand Q4 FY20 Covid-19 lockdown Model efficiencies begin in AU... Post IPO ramp HARMONEY © 2021 INVESTOR DAY 24 NOVEMBER 2021 Lower losses 43 Deep Consumer Data + Automation Lower Losses Lower CAC High Shareholder Returns Fixed Opex Lower Funding Costs = = Libra platform HARMONEY © 2021 INVESTOR DAY 24 NOVEMBER 2021 Deep data re?nes Libra scorecards 7 yrs Rich customer application history 724k People have joined Harmoney $7.4b Personal lending enquiry Billions $2.4b Funded loans 44 Of data points Extensive rich data fuels our proprietary technology 0.47% 30 Sep 21 90+ days arrears HARMONEY © 2021 Investor Day 24 November 2021 Libra: Harmoney’s behavioural data powered credit decisioning engine 45 Stellare ® Libra 1.7: ~25% better credit performance Early analysis of arrears for loans scored under Libra 1.7 (released February 2021) shows improved performance when compared to prior scorecards at the same point in time. We expect further performance improvements in future Libra releases as our innovative behavioural scorecard matures. Bureau credit scores are too generic to be solely relied on for sophisticated pricing and personalised rates. Particularly for signi?cant customer segments – like Millennials – who can have very thin credit ?les. Most importantly, our data tells us there are much better predictors of creditworthiness. Libra’s behaviour-based scorecard learns from data acquired through Harmoney’s 450,000+ completed loan applications. For version 1.7/1.8, Libra incorporates 100+ pD (probability of default) predictor data points identi?ed through behavioural analysis. Libra 1.8 went live in NZ in mid-June 2021. Early results show similar trend to Libra 1.7 in Australia. Stellare ® Libra 1.7/1.8: better-than-ever conversion HARMONEY © 2021 Investor Day 24 November 2021 Continual Libra improvements lead to the best performance ever Group arrears and losses continue to perform ahead of expectation and are at historical lows. Implemented Libra 1.7 in Australia in Feb 2021 and Libra 1.8 in New Zealand in June 2021, showing improved credit performance, through improvements in arrears and early defaults. Group arrears & losses performance New Zealand Arrears 61+ Days 3.9% As % of principal Arrears in Australia & New Zealand FY21 Group Loss Rate 46 Australia Arrears 61+ Days 0.47% Group 90+ Days Arrears As at 30 Sep 21 HARMONEY © 2021 INVESTOR DAY 24 NOVEMBER 2021 Lower funding costs 47 Deep Consumer Data + Automation Lower Losses Lower CAC High Shareholder Returns Fixed Opex Lower Funding Costs = = HARMONEY © 2021 INVESTOR DAY 24 NOVEMBER 2021 Libra’s accuracy rewarded with funding diversity, lower cost of funds and increased return on equity ? Consistent loss rates have attracted top tier funding, with Harmoney funders including two of the ‘Big 4’ banks. ? A$105m securitisation completed in Oct, day 1 weighted average interest rate of 1.45% + hedged base rate. ? Transition to warehouse funding continues to lower funding costs, group loan book now 75% warehouse funded. ? $220m warehouse capacity to support loan book growth. Successful inaugural securitisation 48 Average funding rate Q1-FY21 Inaugural ABS 6% 4% 2% 0% 8% Q2-FY21 Q3-FY21 Q4-FY21 Q1-FY22 1.45% + hedged base rate ABS cost of funds Signi?cant cost of funds reduction HARMONEY © 2021 INVESTOR DAY 24 NOVEMBER 2021 Scalability from ?xed opex 49 Deep Consumer Data + Automation Lower Losses Lower CAC High Shareholder Returns Fixed Opex Lower Funding Costs = = HARMONEY © 2021 INVESTOR DAY 24 NOVEMBER 2021 Scalability powered by automation ? Automation powers operating cost efficiencies. ? 100% online application ? 68% of applications completed without human intervention… and climbing. ? Credit Officers static at 6 while annual originations have grown 4X. ? Fixed opex to income expected to fall below 20% in FY22. 50 FY21 FY22 $100m $80m $50m $60m $70m $90m 25% 15% 0% 5% 10% 20% Revenue Fixed opex to revenue 68% Of loan applications Fully automated <20% FY22 indirect opex to revenue guidance Cost to income Revenue grows materially faster than opex HARMONEY © 2021 INVESTOR DAY 24 NOVEMBER 2021 High shareholder returns 51 Deep Consumer Data + Automation Lower Losses Lower CAC High Shareholder Returns Fixed Opex Lower Funding Costs = = HARMONEY © 2021 INVESTOR DAY 24 NOVEMBER 2021 $1billion average book is expected to generate ~$45m Cash EBITDA Indicative model 52 FY21 At $1b Average Book $m ~$m ~% Avg Book Revenue 79 160 16% Net lending margin 33 100 10% Marketing opex 16 30 3% Fixed opex 21 25 2.5% Normalisation (4) - - Cash EBITDA 0 45 4.5% FY21 $481m Avg Book $1Bn Avg Book $60m $40m $20m 0 $45m Break Even Cash EBITDA FY21 proforma results Net lending margin = revenue less interest expense and actual losses incurred Disclaimer: This is an indicative model of Harmoney's business with an average loan book of $1b, it is not a forecast but instead represents an illustrative model extrapolated to an average loan book of $1b and may vary due to changes in a range of underlying assumptions or economic factors. 45x HARMONEY © 2021 INVESTOR DAY 24 NOVEMBER 2021 Growth opportunities of consumer-direct 53 HARMONEY © 2021 Investor Day 24 November 2021 9x NZ Harmoney’s growth engine - three areas of focus ? Major functionality releases in FY22 improving conversion. ? Vertical focus - targeting our core verticals (motor, home improvement and debt consolidation). ? Brand awareness launch. 2. AU/NZ conversion gains ? Australian ‘personal loan’ Google search market is 9x New Zealand. ? Australian conversion to replicate New Zealand. ? Expanding consumer direct marketing channels. 1. Australian expansion ? Enhancing our existing product with the ‘Ultimate Personal Loan’ ? Deliver value beyond the personal loan into new products and segments ‘Product for Everyone’ ? Optimise product opportunities by using deep data, speed to market which is enabled by the Stellare ® platform. 3. Enhanced & new products 54 Libra 1.7 / 1.8 7 year term New products AU co-borrower Enhanced loan offers Dynamic limits New initiatives Improving conversion rate HARMONEY © 2021 Investor Day 24 November 2021 1. Australia is on track to achieve NZ conversion as products align Parity in conversion opens $1b p.a. opportunity in Australia $1b originations per annum in Australia becomes achievable as conversion metrics reach parity with NZ 55 $1b p.a. Parity with NZ in new conversion Parity with NZ in retention AU origination target HARMONEY © 2021 Investor Day 24 November 2021 56 2. Conversion improvements alone can rapidly grow our loan book Our journey to o?ering lending to more customers. With our current strong rate of account creation, continual improvements in our conversion rate through ongoing Libra scorecard development and new features to improve a?ordability and ?exibility, we are in a position to accelerate origination growth. Improving conversion rate New initiatives Quality of accounts attracted to Harmoney represents untapped potential to convert credit worthy customers through initiatives focused on engagement and nurturing (~54,000 alone in H2 FY21). New accounts H2 FY21: 67K Funded loans Untapped potential: ~47,000 credit worthy accounts in H2 FY21 Of 67,000 new accounts created H2 FY21, 70% (~47,000 accounts) could be targeted with initiatives to increase conversion. ~30,000 of untapped potential have had bank data analysed A signi?cant portion of the untapped potential have shared their bank transaction data with us – these are customers with intent. Unsuitable for a Harmoney product HARMONEY © 2021 Investor Day 24 November 2021 3. Our data superiority drives new products: beyond personal loans to personal lending 57 Strategy • Redesign the personal loan to ?t the customer’s objectives – move beyond personal loan to personal lending. • Increased ?exibility: e.g. multi-drawdown, line of credit, goal–setting tranches. • Money in minutes. Outcome • Moving from one product to more enduring “ always-on ” limit product, increasing retention and customer lifetime value. • Flexibility increases market share beyond the traditional personal loan market. The ultimate personal loan We will use our data advantage to identify opportunities and build product experiences that ?t customer goals and lifestyles. Data advantage Strategy • Delivering value beyond the personal loan into new segments (auto, SME), products, or ?nancial tools. • Targeting new consumers and the untapped potential of existing accounts Outcome • Increase conversion & CLV through enhanced customer ?t lowering CAC • Higher retention as the customer relationship moves beyond the personal loan. A product for everyone HARMONEY © 2021 INVESTOR DAY 24 NOVEMBER 2021 Q & A 58 HARMONEY © 2021 INVESTOR DAY 24 NOVEMBER 2021 Appendices 59 HARMONEY © 2021 Investor Day 24 November 2021 Listed peer analysis ? Highest FY21 pro forma revenue. ? Second largest pro forma loan book. ? Revenue to market capitalisation 32% of peer average. ? EV to Revenue 28% of peer average. Key metric comparison 60 (A$) Harmoney Peer Avg. Listed Peer #1 Listed Peer #2 Listed Peer #3 FY21 Pro forma Revenue 74m 46m 27m 58m 53m Loan Book (Sep 2021) 496m 613m 471m 452m 915m FY21 Revenue Multiple 2.4 7.4 12.0 5.9 4.4 EV² / FY21 Revenue 1.8 6.5 9.8 5.7 3.8 Market Cap.¹ 178m 299m 325m 339m 233m ¹ Market capitalisation as at 19 November 2021 ² Economic value calculated by deducting net cash disclosed in FY21 accounts from market capitalisation as at 19 November 2021. Harmoney FY21 pro forma revenue converted to A$ at 30 June 2021 1.075 AUD/NZD exchange rate and Harmoney 30 September 2021 loan book converted to A$ at 30 September 2021 1.044 AUD/NZD exchange rate. HARMONEY © 2021 Investor Day 24 November 2021 Further reading: case studies 61 Publisher Title Google How Harmoney found a smarter way to surface lifetime value with machine learning How Smart Bidding helped Australasia’s Harmoney ?nd and convert its best customers Marketo Harmoney continually raises the level of customer engagement with Marketo Microsoft Learn how Harmoney used LinkedIn to increase loan originations SalesForce How Harmoney Is Innovating In The FinTech Space With The Help Of Salesforce Snow?ake Removing friction from the customer banking experience Data driven ?nancial decisions Spotify Spotify Ad Studio expands into new global markets, moves out of beta HARMONEY © 2021 Investor Day 24 November 2021 Important notice and disclaimer Th e material in this presentation is provided for general information purposes only and is current as at the date of this presentation. It is not a prospectus or product disclosure statement, ?nancial product or investment advice or a recommendation or o?er to acquire Harmoney shares or other securities. It is not intended to be relied upon as advice to investors and does not take into account the investment objectives, ?nancial situation or needs of any particular investor. Investors should assess their own ?nancial circumstances and seek professional legal, tax, business and/or ?nancial advice before making any investment decision. The information in this presentation does not purport to be complete. It should be read in conjunction with Harmoney’s other periodic and continuous disclosure announcements lodged with the Australian Securities Exchange and New Zealand’s Exchange, which are available at www.asx.com.au and www.nzx.com respectively. This presentation may contain forward looking statements including statements regarding our intent, belief or current expectations with respect to Harmoney Group’s business and operations, market conditions, results of operations and ?nancial condition, speci?c provisions and risk management practices. Such forward looking statements involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are beyond the control of Harmoney Group and which may cause actual results, performance or achievements to di?er materially from those expressed or implied by such statements. Readers are cautioned not to place undue reliance on these forward looking statements, which speak only as of the date thereof. Past performance is not indicative of future performance. No representation or warranty, express or implied, is made as to the fairness, completeness, accuracy, adequacy or reliability of information, opinions or conclusions in this presentation, including the ?nancial information. To the maximum extent permitted by law, none of Harmoney or its related bodies corporate or their respective, its directors, o?cers, employees or contractors or agents do not accept liability or responsibility for any loss or damage resulting from the use or reliance on this presentation or its contents or otherwise arising in connection with it by any person, including, without limitation, any liability from fault or negligence. The ?nancial information in this presentation has not been audited in accordance with Australian Auditing Standards. This presentation contains certain non-IFRS measures that Harmoney believes are relevant and appropriate to understanding its business. Investors should refer to the Full Year Results FY21 for further details. All values are expressed in New Zealand currency unless otherwise stated. All intellectual property rights in this presentation are owned by Harmoney.

More from Harmoney Corp Limited


Join Listcorp to create a personalised news feed, follow your favourite companies, save useful news, and more.

By joining Listcorp you agree to our Terms & Conditions and Privacy Policy

Information on this Website is provided for general information purposes only and is not a substitute for professional advice. ASX Information (including company announcements and prices) is delayed by at least 20 minutes. JSE Information (including company announcements and prices) is delayed by at least 15 minutes. Reliance on the information you access on or from this Website is solely at your own risk. We make no representation or warranty in relation to the future performance of the companies that appear on this Website. Investment in securities involves risk and you should obtain independent professional legal, financial, investment or company advice before acting on any of the information you access on this Website. Using, browsing or otherwise accessing this Website is subject to our Terms and Conditions and our Privacy Policy.

© 2021 Listcorp. ABN 60 166 140 307

Never miss news from Harmoney Corp Limited (ASX:HMY) when you join Listcorp.