24 Nov

PGL AGM Presentation

2021 Annual General Meeting Wednesday 24 November 2021, 11am AEDT Prospa Group Limited 1 Board of Directors 2 Beau Bertoli Chief Revenue Officer & Executive Director Gail Pemberton AO Chairman Fiona Trafford - Walker Non - Executive Director Greg Ruddock Non - Executive Director Greg Moshal CEO & Executive Director Avi Eyal Non - Executive Director Mary Ploughman Independent Non - Executive Director 3 Chairman’s Address Gail Pemberton AO 4 1. All references to Revenue in this document represent Total Revenue before transactions costs. 2. All references to EBITDA in this document represent Earnings Before Corporate Interest, Tax, Depreciation and Amortisation, Share - Based Payments and Fair Value movements. 3. All references to Gross Profit in this document is calculated as Total Revenue less Funding Costs less Transaction Costs. Refer page 14 for more detail. 4. All references to Realised portfolio yield in this document represents the interest (excluding transaction costs) and fee inc ome earned during the period on the average portfolio balance during the respective period, annualised . FY21 Highlights Originations Revenue 1 Operating cash flow Prospa recorded its highest ever quarterly originations of $183m in Q4 FY21 Strong quarterly momentum in revenue growth through FY21 despite COVID - 19 $39.8m of unrestricted cash available to support long - term growth FY20: $448m +8% FY20: $142m (17%) FY20: $34m +3% $484m $118m $35m Closing gross loans EBITDA 2 Realised portfolio yield 4 Within 10% o f the all - time high achieved prior to COVID - 19 Significant EBITDA growth over FY20 with resilient GP margin 3 of 80 % Portfolio yield maintained in conjunction with increased originations FY20: $374m +14% FY20: ($15.8m) +$16.2m FY20: 32.8% $427m $375k 32.7% 5 Launch of Prospa Plus Small Business Loans Investment in sales and marketing to capitalise on recovering economy On track to deliver Prospa Business Account next year Smarter, faster credit decision engine that incorporates learnings Enhanced capabilities to deliver on our strategic growth ABS of $200 million Great Place to Work Experienced management team Technology and funding Investing for growth People Strengthening the business and investing for the future 6 Chief Executive Presentation Greg Moshal ANZ’s leading online lender to small business 1 1. In the Non - bank Financial Services category, Prospa is the #1 ranked online small business lender in Australia and New Zealand on independent review site TrustPilot with a TrustScore of 4.9 and over 6,200 reviews in Australia and a TrustScore of 4.9 and over 800 reviews in New Zealand as at 30 June 2021. 2. All references to Originations in this document are from all sources, including Small Business Loan, Line of Credit (including undrawn amounts), Back to Business Loan, Back to Business Line (including undrawn amounts) and ProspaPay in Australia and New Zealand, unless otherwise indicated. Small retrospective changes in origination figures may occur as result of back dated cancellations or modifications to support customer outcomes. 3. As at 30 June 2021 7 7 10,000 distribution partners 3 34k+ customers since inception 3 80+ NPS Score 3 $2.1b+ loans originated since inception 2 230+ employees 3 7 Strong financial performance underpinned by enhanced funding platform 1. Small retrospective changes in origination figures may occur due to backdated cancellations or modifications to support custo mer outcomes. 2. Available third - party facilities at end of corresponding period. New Zealand trust facility converted to AUD at end of correspon ding period. 8 Drawn and undrawn third - party facilities ($m) 2 Quarterly revenue ($m) and portfolio yield (%) Quarterly closing gross loans ($m) Quarterly originations ($m) 1 387 582 194 Available third party facilities Drawn Undrawn Strong originations of $128.5 million, up a significant 61.9% on 1Q21 Closing Gross Loans of $442m within 7% of Prospa’s all - time high Strong balance sheet with no corporate debt and a solid funding platform 79 101 121 183 128 4Q21 3Q21 1Q21 2Q21 1Q22 28 28 29 33 38 31.6% 33.0% 32.7% 34.1% 34.3% 0 10 20 30 40 0 10 20 30 40 50 60 1Q22 2Q21 1Q21 3Q21 4Q21 Active management of portfolio yield relative to credit quality 338 342 368 427 442 2Q21 4Q21 1Q21 3Q21 1Q22 Well diversified portfolio to successfully mitigate risk 1. As per Financial Statements, note 21. 2. Based on the weighted average principal receivables balance as at 30/06/2021. 3. Refers to delinquency data across Prospa’s Australian Small Business Loans ( i.e. excludes Line of Credit) and references point - in - time information at 6 - month intervals. 4. Static loss rate net of recoveries as at 30 June 2021 for the Australian small business loan product. Banded columns reflect cohorts which are still seasoning. FY20 a nd FY21 cohorts too early to demonstrate material loss data including taking into account the impact of COVID - 19 deferrals. 9 Portfolio by industry 1 Portfolio by geography 1 Number of years trading 2 22% 18% 17% 15% 7% 6% 15% Building and Trade Retail Professional Services Hospitality Wholesaling Manufacturing Other 31% 30% 13% 12% 8% 6% 0 - 3 4 - 7 8 - 10 11 -15 16 - 20 21+ 29% 20% 19% 15% 8% 6% 1% NSW VIC QLD NZ WA SA ACT TAS NT Stable static loss rate 4 Board mandated risk appetite: 4 - 6% 4.8% 5.4% 5.9% 4.2% 4.9% 3.5% 3.2% 2.2% 1.3% 0.1% 1HFY20 1HFY17 2HFY18 2HFY17 1HFY18 2HFY19 2HFY20 1HFY19 1HFY21 2HFY21 1% 1% Addressing the needs of an evolving market to capture opportunities for growth RFi Consulting – Understanding the Addressable Market – Australia, June 2021 RFi Consulting – Understanding the Addressable Market – New Zealand, June 2021 10 Current market Increased digitisation of financial solutions expected by customers Opportunities within the evolving financial market Demand for funding expected with SME bounce back Opportunities for Prospa Value of additional credit required by SMEs in last 12 months 1 $28bn Potential Market Expansion • Payments • Financial software Scaling our funding solutions to solve the ongoing need for capital Loans Small Business Loans Prospa Plus Small Business Loans ANZ Line of Credit Australia New Zealand NEW NEW 11 Credit Insights Enable customers to pay for goods and services Manage daily expenses, bills and accounts payable Fund growth opportunities Re - stock, re - hire, upgrade equipment Improve cash flow management Manage shortfalls and surplus Understand cash position and projections Identify challenges and opportunities Smarter, dat a - driven decisions Future state A cohesive platform that makes Prospa digitally indispensable to SMEs – helping them grow, run and pay Payment Cash flow 12 Illustrative only 13 Products to deliver growth and expansion within the SME market Transaction account Visa business card Credit products Invoicing Bill pay Expense Management Prospa’s All - in - One Business Account Illustrative only 14 Growth delivered through integrated suite of solutions 15 Expand through new solutions Reach new markets Scale existing products Strengthen Prospa’s funding products by increasing the capabilities of our technology to further automation New innovative product solutions to e nhance customer engagement, cross - sell solutions and extend active customer lifetime to lower cost to serve New products and solutions to meet the needs of more SMEs and expand our market Conclusion 7 Resolutions 17 A. Consideration of Financial statements and reports “To receive and to consider the Annual Financial Report of the Company for the financial year ended 30 June 2021 together with the declaration of the Directors, the Directors’ Report, the Remuneration Report and the Auditor’s Report for that financial year.” Note: This item of ordinary business is for discussion only and is not a resolution. 18 “ B. Items for approval “That, for the purpose of Section 250R(2) of the Corporations Act and for all other purposes, approval is given for the adoption of the Remuneration Report as contained in the Company’s Annual Financial Report for the financial year ended 30 June 2 021 .” “ Note: The vote on this Resolution is advisory only and does not bind the Directors or the Company. To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution: Resolution 1 Adoption of Remuneration Report 19 Votes Holders Percentage For 63,644,672 26 81.32% Open 9,710,384 8 12.41% Against 4,906,520 14 6.27% Total Available Votes 78,261,576 20 Resolution 1 Adoption of Remuneration Report That Mary Ploughman , a Director appointed as an additional Director and holding office until the next General Meeting of the Company after her appointment in accordance with the Company’s Constitution and ASX Listing Rule 14.4, be elected as a Director of the Company, effective immediately. “ To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution: Resolution 2 E lection of Mary Ploughman as Director 21 Votes Holders Percentage For 78,160,224 38 99.87% Open 91,288 8 .12% Against 12,454 2 .02% Total Available Votes 78,263,966 22 Vote results Resolution 2 E lection of Mary Ploughman as Director That, for the purposes of ASX Listing Rule 7.1A and for all other purposes, the Shareholders approve the issue of equity securities up to 10% of the issued capital of the Company (at the time of issue) calculated in accordance with the formula prescribed in ASX Listing Rule 7.1A.2 and otherwise on the terms and conditions set out in the Explanatory Statement which accompanies and forms part of this Notice of Meeting .” “ To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution: Resolution 3 ASX Listing Rule 7.1A approval of Future I ssue of Securities 23 Votes Holders Percentage For 78,174,928 32 99.9% Open 10,144 8 .01% Against 70,444 8 .09% Total Available Votes 78,255,516 24 Vote results Resolution 3 ASX Listing Rule 7.1A approval of Future I ssue of Securities That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, the Shareholders ratify the allotment and prior issue of 1,500 ,000 Fully Paid Ordinary Shares issues on 1 March 2021 and 33,069 Full Paid Ordinary Shares issues on 26 August 2021 and otherwise on the terms and conditions set out in the Explanatory Statement which accompanies and forms part of this Notice of Meeting. “ To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution: 25 Resolution 4 Ratification of prior issue of Share into Trust for Employee Incentive Plan Votes Holders Percentage For 78,149,256 30 99.85% Open 9,144 7 .01% Against 108,343 13 .14% Total Available Votes 78,266,743 26 Vote results Resolution 4 Ratification of prior issue of Share into Trust for Employee Incentive Plan “ That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, the Shareholders ratify the allotment and prior issue of 168,669 Performance Rights issues on 15 March 2021 and 120,060 Performance Rights issues on 7 September 2021 and otherwise on the terms and conditions set out in the Explanatory Statement which accompanies and forms part of this Notice of Meeting .” “ To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution: 27 Resolution 5 Ratification of prior issue Performance Rights for Employee Incentive Plan Votes Holders Percentage For 78,145,256 29 99.85% Open 9,144 7 .01% Against 108,343 13 .14% Total Available Votes 78,262,743 28 Vote results Resolution 5 Ratification of prior issue Performance Rights for Employee Incentive Plan “ That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, the Shareholders ratify the allotment and prior issue of 500,000 Options issued on 30 March 2021 and 252,320 Options issued on 7 September 2021 and otherwise on the terms and conditions set out in the Explanatory Statement which accompanies and forms part of this Notice of Meeting .” “ To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution: Resolution 6 Ratification of prior issue of options 29 Votes Holders Percentage For 78,151,743 29 99.86% Open 9,144 7 .01% Against 100,629 12 .13% Total Available Votes 78,261,516 30 Vote results Resolution 6 Ratification of prior issue of options That, for the purpose of section 208 of the Corporations Act, ASX Listing Rule 10.14 . and for all other purposes, the Shareholders of the Company approve the issue and allotment of 1,029,487 Unlisted Options under the Equity Incentive Plan to Greg Moshal, Chief Executive Officer and Executive Director of the Company, and otherwise on the terms and conditions set out in the Explanatory Statement which accompanies and forms part of this Notice of Meeting ” “ To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution: Resolution 7 Approval of Issue of Incentive Securities to Greg Moshal Chief Executive Officer and Executive Director of the Company 31 Votes Holders Percentage For 68,380,420 20 87.42% Open 9,710,384 8 12.41% Against 131,139 21 .17% Total Available Votes 78,221,943 32 Vote results Resolution 7 Approval of Issue of Incentive Securities to Greg Moshal Chief Executive Officer and Executive Director of the Company That, for the purpose of section 208 of the Corporations Act, ASX Listing Rule 10.14 . and for all other purposes, the Shareholders of the Company approve the issue and allotment of 1,029,487 Unlisted Options under the Equity Incentive Plan to Beau Bertoli, Chief Revenue Officer and Executive Director of the Company, and otherwise on the terms and conditions set out in the Explanatory Statement which accompanies and forms part of this Notice of Meeting” “ To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution: Resolution 8 Approval of Issue of Incentive Securities to Beau Bertoli Chief Revenue Officer and Executive Director of the Company 33 Votes Holders Percentage For 68,330,420 19 87.35% Open 9,710,384 8 12.41% Against 181,139 22 .23% Total Available Votes 78,221,943 34 Vote results Resolution 8 Approval of Issue of Incentive Securities to Beau Bertoli Chief Revenue Officer and Executive Director of the Company Any other business? 35 Thank you ASX.PGL 36

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