HARMONEY CORP LIMITED — Interim / Quarterly Report 2021

Feb 23, 2021

1H21 RESULTS

1H21 RESULTS 24 FEBRUARY 2021

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IMPORTANT NOTICE AND DISCLAIMER

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The 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, financial product or investment advice or a recommendation or offer 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, financial situation or needs of any particular investor. Investors should assess their own financial circumstances and seek professional legal, tax, business and/or financial 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 www.asx.com.au and www.nzx.com New Zealand’s Exchange, which are available at 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 financial condition, specific 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 differ 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 financial information. To the maximum extent permitted by law, none of Harmoney or its related bodies corporate or their respective, its directors, officers, 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 financial 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 HalfYear Results for 1H21 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.

1H21 RESULTS 24 FEBRUARY 2021

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CONTENTS

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1. 1H21 RESULTS HIGHLIGHTS 2. HARMONEY BUSINESS RECAP 3. 1H21 BUSINESS UPDATE 4. 1H21 FINANCIALS 5. STRATEGY & OUTLOOK 6. APPENDICES

1H21 RESULTS 24 FEBRUARY 2021

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• 1H21 RESULTS HIGHLIGHTS

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STRONG MOMENTUM POST IPO

DEC ‘20 SECURED UP TO $200M IN FUNDING FROM M&G INVESTMENTS

FEB ‘21 RELEASED LIBRA™ 1.7 INTO AU

19 NOV ‘20 IPO NET PROCEEDS OF ~$57M RECEIVED

JAN ‘21 EXCEEDED PROSPECTUS ORIGINATION FORECASTS

FEB ‘21 PAUL LAHIFF APPOINTED INDEPENDENT DIRECTOR (AU BASED)

1H21 RESULTS 24 FEBRUARY 2021

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RESULTS HIGHLIGHTS

$1.9B

TOTAL PERSONAL LOAN ORIGINATIONS

Harmoney has now originated over $1.9 billion in personal loans across AU and NZ making it the largest 100% direct personal lender in AU and NZ.

™ LIBRA 1.7

SIGNIFICANTLY IMPROVED LENDING MODEL RELEASED IN AU

™ ™ - Stellare ’s lending model - Libra launched in Australia on 10 Feb 21, resulting in a ~ 100% increase in conversion of accounts to funded loans.

47%

STRONG QUARTER ON QUARTER ORIGINATION GROWTH

Originations accelerated through 1H21, with 47% growth in 2Q21 approaching pre-COVID levels.

0.60%

90+ DAY ARREARS AT HISTORIC LOWS

Credit quality focus with portfolio benefiting from high levels of home ownership and full-time income. No deterioration in credit quality resulting from COVID during 1H21.

$42M

PRO FORMA REVENUE

Pro forma revenue has performed despite impacts of COVID. This is due to a highquality risk-based priced portfolio and significant customer lifetime value generated through our 3R’s program.

$468M

HIGH YIELDING PERSONAL LOANS

High yielding personal loans receivables balance reflecting Harmoney’s position as direct personal loan market leader across Australia and New Zealand.

$290M+

INCREASED WAREHOUSE LENDING CAPACITY

Harmoney has over $290m in undrawn warehouse funding lines to support loan book growth and the transition of the balance sheet to 100% warehouses.

11%

NET INTEREST MARGIN

Market leading NIM of 11% remaining stable during turbulence in last 12 months and as originations accelerate post-COVID.

1H21 RESULTS 24 FEBRUARY 2021

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• LIBRA™ 1.7: EARLY RESULTS SHOW A ~100% IMPROVEMENT IN CONVERSION LEADS TO THE DOUBLING OF AU NEW BUSINESS ORIGINATIONS

• ™

• • Libra 1.7 initial roll-out on 10 February.

• Built specifically for the Australian market.

• ™

• • Libra 1.7 is an enabler of the Millennial products.

• ~100% uplift in conversion of accounts to funded loans in 13 days since launch, driven by no additional marketing spend.

~100% INCREASE IN DAILY NEW LENDING

• We expect this to stabilise to an 80% uplift in originations from Libra ™ 1.7 for the similar marketing spend.

• As a result, Group receivables have grown to $481m as at 23 February 2021.

Libra™1.7 is Harmoney’s new generation, real-time behavioural credit decisioning and pricing engine (CDP), built into Stellare™. This new release significantly enhances our lending model in Australia without impacting credit quality and was developed with the help of machine learning to analyse data from 53,000 Australian customer applications, identifying 100+ behavioural characteristics relevant to predicting credit risk.

1H21 RESULTS 24 FEBRUARY 2021

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HARMONEY BUSINESS RECAP

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STRONG ORIGINATION GROWTH

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$1.9+ BILLION OF LOAN ORIGINATIONS

• Harmoney has originated over

• $1.9 billion in personal loans across AU and NZ since 2014, making it the largest 100% direct lender in AU / NZ.

• • Loan origination CAGR growth of 79% over this period.

CAGR 79%

• This being achieved whilst maintaining a net interest margin of ~11%.

1H21 RESULTS 24 FEBRUARY 2021

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• STELLARE[™][–] INVESTMENT IN AUTOMATION DELIVERS SCALABILITY

Track record of operating leverage:

• Strong growth in both New Zealand and Australian markets (1H21 impacted by COVID underwriting prudence).

• ™

• • Leveraging our highly scalable Stellare platform.

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CAGR
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20%

• 3Rs business model driven growth from account base.

• Integrated machine learning marketing algorithms with our key partners.

• Highly automated loan approval system.

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CASH OPEX
CASH OPEX
~24%
~19%
OF PRO
OF PRO
FORMA
FORMA
REVENUE
REVENUE
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• 100% direct channel provides operating flexibility, including through COVID.

• ™

• • Libra 1.7 further enhances operating leverage.

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TM
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1 CASH OPEX INCLUDES PERSONNEL (EXCLUDING SBP), TECHNOLOGY AND ADMINISTRATION EXPENSES.

1H21 RESULTS 24 FEBRUARY 2021

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TECHNOLOGY AND DATA DRIVEN BUSINESS

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Harmoney utilises its technology and data analytic capabilities to differentiate and deliver its customers a seamless customer experience.

Software engineers, data scientists and product managers support the continuous advancement of Stellare[TM]

AUTOMATION

DATA-DRIVEN

• ●

• High degree of automation and Utilise data analytics to produce straight-through processing unbiased, data-driven credit driving operational scale and assessment and pricing ●

• efficiency $7.4bn in lending assessed, over

• $7.4bn in lending assessed, over 1 million credit files, 426k applications

• Currently 62% of applications require no human interaction

MACHINE LEARNING

DIRECT CHANNEL

PROPRIETARY I.P.

Developed and refined over six years, Stellare™ combines data analytics, machine learning, and in-house knowledge to create a truly digital lending platform.

• Algorithms to support continuous improvements in the credit underwriting process

• Smart automation constantly learning and improving

• Control the customer experience, build long-term brand equity, and customer lifetime value

• Received +23,000 five star customer reviews from real Harmoney customers

1H21 RESULTS 24 FEBRUARY 2021

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100% DIRECT PERSONAL LENDER POWER OF THE 3Rs

NEW AND EXISTING DEAL FLOW

POWER OF THE PROVEN BUSINESS MODEL

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NEW CUSTOMERS

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Harmoney originates customers of new loan traffic via low/no-cost online channels, comparison sites NEW CUSTOMERS and also using Google Smart Bidding. EXISTING CUSTOMERS (3Rs) REPEAT: Additional loan limit for active loan in good standing and EXISTING CUSTOMERS service capacity. RETURN: Paid-off customer returning for a new loan. RENEW: Retention play for existing customer with an active loan in good standing.

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VOL TO 31 JAN 2021
$565m
Accounts created in CY2015
Losses on repeat
borrowed $118m in CY2015. By 31
loans engaged
Jan 21 this same cohort of accounts
under the 3Rs are
borrowed $565m, as more became
~40% lower than
borrowers and many returned for
first time loans.
subsequent loans.
VOL YR 1
$118m
32.5K 32.5K
INCREASING
ACCOUNTS ACCOUNTS
VOL VIA 3Rs AT
CREATED CREATED
$0 marketing
CY2015 CY2015
cost
YR 1 CONVERSIONS CONVERSIONS to 31
Jan 2021
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1H21 RESULTS 24 FEBRUARY 2021

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1H21 BUSINESS UPDATE

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• AUSTRALIAN GROWTH 69% QTR ON QTR AS HMY STARTS TO MARKET IN AUSTRALIA

• Origination accelerated through 1H21, with

  • 2Q21 approaching pre-COVID levels.

• 2Q21 Group originations $115m, 47% growth on 1Q21.

• 1H21 Group originations of $194m.

AUSTRALIA (2Q ON 1Q)

• Total originations grow by 69%.

• New customer originations grow by 207% with resumption of marketing expenditure following proceeds from Nov 2020 IPO.

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NZ AU
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1H21 RESULTS 24 FEBRUARY 2021

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POWER OF THE PROVEN BUSINESS MODEL

• Harmoney leveraged the 3Rs in 1Q21 to originate from quality existing accounts.

• In 2Q21, Harmoney resumed a marketing program and saw new customer originations grow by 127%.

• ● Lag effect between marketing activity and origination in 2Q21 with normal marketing resuming very late in the quarter.

• With IPO proceeds received late Nov 20 expect increased marketing spend in 2H21 to further grow originations.

Our collaboration with Google continues to grow in 2021 as we accelerate growth in Australia using the unique strengths of our Stellare ™ platform and Google’s unparalleled audience reach.

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NEW – OTHER ONLINE NEW – LOW/NO COST ONLINE NEW – GOOGLE SMART BIDDING

3Rs MARKETING SPEND

1H21 RESULTS 24 FEBRUARY 2021

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• HIGH QUALITY RISK-BASED PRICED PORTFOLIO

• Harmoney originates high-quality, investment grade receivables, with 92% having a risk grade of A-D, which typically have high levels of home ownership and full-time income.

• Harmoney has an enviable yield as can be seen from the interest rate, compared to loss rate by credit grade.

• The transition to 100% warehouse funding from peerto-peer funding further expands the margin earned by Harmoney.

• Group receivables as at 23 February 2021 have grown to $481m.

92% GRADES A-D

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1H21 RESULTS 24 FEBRUARY 2021

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• HISTORICAL LOWS IN GROUP ARREARS & LOSSES

AUSTRALIA

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• Arrears at historical lows in both AU and NZ.

• Upgraded proprietary scorecards and conservative risk settings through 2020 driving improved performance.

• Group losses at historical lows and continue to track to forecast.

NEW ZEALAND

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• Portfolio showing resilience through COVID with ~1% of customers currently on a payment holiday.

• High-quality loan book performance enables greater funding diversification.

• Due to our high-quality loan book, Harmoney's funding structures do not utilise or require any Government support in AU or NZ.

1H21 RESULTS 24 FEBRUARY 2021

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• DIVERSIFIED FUNDING: $290M+ UNDRAWN

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NEW ZEALAND
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$168m UNDRAWN

AUSTRALIA A$113m UNDRAWN

WAREHOUSE VS PEER-TO-PEER

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WAREHOUSE PEER-TO-PEER

• M&G warehouse committed facility to January 2024, up to a $200m limit.

• BNZ/NAB warehouse committed facility recently extended to December 2022, up to $153m limit.

• In addition to the above, non-binding Heads of Agreement executed with Heartland Bank for new warehouse facility (and transfer of existing P2P loans into warehouse) for $130m.

• AU warehouse facility - In Feb 2021 committed facility extended to Jan 2023 and limit increased to $177m

• (previously $115m) – approved by Big 4 Bank.

• A$113m of undrawn funding in the warehouse facility.

• In addition to the above, non-binding Heads of Agreement executed with Heartland Bank for new warehouse facility (and transfer of existing P2P loans into warehouse) for A$70m.

The transition to 100% warehouses is well underway and will be largely completed over the next 12 months.

1H21 RESULTS 24 FEBRUARY 2021

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1H21 FINANCIALS

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KEY OPERATING AND	KEY OPERATING AND	PRO FORMA	PRO FORMA	FINANCIAL METRICS	FINANCIAL METRICS
	6 months ended 31 December 2020	6 months ended 31 December 2019		●	Originations lower in 1H21 due to more conservative
					credit underwriting, particularly in 1Q21.
LOAN BOOK VALUE AND GROWTH	$000	$000	Change %	●	Average loan book down 2% on lower originations.
Originations ($'000)	193,675	270,421	(28%)	●	Net lending margin increased to 7.2% from 5.4%, drive
Loan book (average) ($'000)	477,042	486,557	(2%)		by lower average funding rate on continuing transition
Loan book (period end)	468,186	499,348*	(6%)		to warehouse funding and on lower impairment
					expenses.
Average interest rate (%) Average funding rate (%) Net interest margin	17.4% 6.7% 10.9%	16.9% 7.3% 9.5%	3% (9%) 15%	●	Expected credit loss provision rate increased to 5.7% from 4.4% on higher COVID economic overlay.
Net lending margin	7.2%	5.4%	33%	●	Marketing expenses to total income reduced to 14%
LOAN BOOK QUALITY Impairment expense ($'000) Provision rate (%)	8,710 5.7%	9,959 4.4%	(13%) 31%		from 17% with more emphasis on 3Rs originations during 1H21. Marketing to increase with IPO proceeds received in Nov 20.
Impairment expense to average gross loans (%)	3.7%	4.1%	(11%)	●	Administration expenses to total income reduced on
PRODUCTIVITY METRICS Marketing to total income	14%	17%	(18%)		cost rationalisation measures. (Metric excludes one-off IPO expenses).
Verification & servicing to total income	4%	4%	(0%)
Personnel (excl. share-based payments) to total income	10%	9%	11.0%
Technology to total income	3%	4%	(25%)
Administration to total income	6%	9%	(33%)

• Net lending margin increased to 7.2% from 5.4%, driven by lower average funding rate on continuing transition to warehouse funding and on lower impairment expenses.

• Marketing expenses to total income reduced to 14% from 17% with more emphasis on 3Rs originations during 1H21. Marketing to increase with IPO proceeds received in Nov 20.

• Administration expenses to total income reduced on cost rationalisation measures. (Metric excludes one-off IPO expenses).

1 COMPARATIVE PERIOD BALANCE AS AT 30 JUNE 2020.

1H21 RESULTS 24 FEBRUARY 2021

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PROFIT & LOSS (PRO FORMA)

	6 months ended 31 December 2020 $000 6 months ended 31 December 2019 $000
Interest income Other income Total income Interest expense Impairment expense Movement in expected credit loss provision Marketing expenses Verification and servicing expenses Personnel expenses (excl. share-based payments) Share based payments expenses Technology expenses Administration expenses Depreciation and amortisation expenses Loss before income tax Income tax benefit Loss after income tax Non-Cash Expenses Movement in expected credit loss provision Share based payments expenses Depreciation and amortisation expenses Income tax impact of non-cash adjustments Other Normalisation Adjustments IPO Expenses Cash net profit/(loss) after income tax	41,535 41,055 19 498
	41,554 41,553
	15,644 17,841 8,710 9,959 (1,828) 2,430 5,686 7,068 1,926 1,734 4,177 3,606 3,916 98 1,429 1,603 5,419 3,531 410 766
	(3,935) (7,083)
	1,101 1,984
	(2,834) (5,099)
	(1,828) 2,430 3,916 98 410 766 (1,585) (922) 3,163 -
	1,242 (2,727)

• Cash NPAT $1.2m, up $4.0m.

• Total income steady despite 1H21 being COVID impacted.

• Interest expense down $2.2m (12%), driven by continuing transition to warehouse funding which has significantly lower cost of funds than peer to peer funding, which increased from 27% to 45% during 1H21.

• Impairment expense down $1.2m (13%) in line with improved arrears performance.

• Marketing expenses down $1.4m (20%) with emphasis on 3Rs originations prior to IPO.

• Other operating expenses (excluding non-cash & IPO) down $0.7m (7%) on cost control measures, partially offset by higher personnel expenses.

1H21 RESULTS 24 FEBRUARY 2021

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CASHFLOW (STATUTORY)

	6 months ended 31 December 2020 $000 6 months ended 31 December 2019 $000
CASH FLOWS FROM OPERATING ACTIVITIES Interest received Interest paid Other income Payments to suppliers and employees Net cash (used in)/generated by operating activities CASH FLOWS FROM INVESTING ACTIVITIES Advances to customers Payments for intangibles and equipment Net cash (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Net proceeds from finance receivables borrowings Net repayment of debt financing Net proceeds from share issue Principal element of lease payments Net cash generated by financing activities Cash and cash equivalents at the beginning of the period Net increase / (decrease) in cash and cash equivalents Gain/(loss) on foreign currency bank accounts Cash and cash equivalents at the end of the period	14,751 7,196 (4,136) (1,551) 4,044 15,649 (16,063) (16,966)
	(1,404) 4,328
	(77,291) (45,011) (2,130) (14)
	(79,421) (45,025)
	67,082 41,669 (10,693) - 67,550 23,423 (478) 34
	123,461 65,126
	34,779 8,739 42,636 24,429 429 (23)
	77,844 33,145

• Net increase in cash of $42.6m, including net IPO proceeds of ~$57m (being $67.6m, less $10.7m corporate debt repayment).

• Expansion of warehouse funding used $10.2m cash in 1H21, up from $3.3m in 1H20.

• Operating income generated $18.8m 1H21, down from $22.8m 1H20 on transition to warehouse funding where interest income is received over time, contrasting with peer-to-peer fee income which is largely received on origination.

• Interest paid $4.1m 1H21, up from $1.5m 1H20 on expansion of warehouse funding.

• Other payments $16.1m 1H21 (including $2.9m IPO expenses), down from $16.2m 1H20, on lower marketing expenses and cost control measures.

1H21 RESULTS 24 FEBRUARY 2021

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BALANCE SHEET (STATUTORY)

	31 December 2020 $'000 30 June 2020 $'000
ASSETS Cash and cash equivalents Trade and other assets Finance receivables Property and equipment Intangible assets Deferred tax assets Total assets LIABILITIES Payables and accruals Borrowings Provisions Lease liability Derivative financial instruments Total liabilities NET ASSETS Share Capital Foreign currency translation reserve Share based payment reserve Cash flow hedge reserve Accumulated losses Equity	77,844 34,779 5,676 5,223 199,704 129,222 1,037 1,448 2,130 - 11,873 9,548
	298,264 180,220
	9,810 6,263 188,953 132,630 6,652 9,832 1,207 1,684 572 926
	207,194 151,335
	91,070 28,885 131,398 56,686 98 (334) - 2,825 (572) (926) (39,854) (29,366)
	91,070 28,885

• Net assets $91m, up $62m during 1H21, driven by proceeds from IPO.

• Cash $78m, up from $35m at June 2020.

• Finance receivables $200m, up $70m during 1H21 on continuing transition to warehouse funding.

• Intangible assets up $2m due to the commencement of capitalisation of the Stellare platform from 1 July 20.

• Provisions down $3.2m due to peer-to-peer funding run off.

• Note: Peer-to-peer funded loans of $257m are not recognised on statutory balance sheet, however are adjusted for Pro Forma.

1H21 RESULTS 24 FEBRUARY 2021

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• P&L RECONCILIATION – PRO FORMA TO STATUTORY

KEY ADJUSTMENTS

	6 months ended 31 December 2020	6 months ended 31 December 2019
$'000	NPAT	NPAT
Pro-forma profit/(loss) after income tax	(2,834)	(5,099)
Recognition of P2P trusts Repayment of corporate debt	(8,694) (623)	(8,426) (1,366)
Capitalisation of Stellare platform	-	(774)
COVID subsidy and salary reductions	70	-
Public company costs	-	401
Tax adjustment	1,593	2,196
Statutory profit/(loss) after income tax	(10,488)	(13,067)

• Pro forma recognises income from peer-topeer funded loans as interest income and expenses over the life of the underlying loans.

• Pro forma excludes establishment and interest expenses related to corporate debt facility repaid prior to IPO.

• Pro forma capitalises 1H20 Stellare platform expenditure consistently with 1H21 approach to aid comparability between periods.

• Pro forma excludes the impact of COVID subsidies and salary reductions in 1H21.

• Pro forma estimates 1H20 public company costs to aid comparability between periods.

• Pro forma tax adjustment reflects the cumulative tax expense on the pro forma adjustments.

1H21 RESULTS 24 FEBRUARY 2021

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STRATEGY AND OUTLOOK

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• HARMONEY CUSTOMER ENQUIRY $7.4B ($3B IN AU)

~A$150B AU PERSONAL LENDING MARKET

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SOURCE: RBA, ‘D2 – LENDING AND CREDIT AGGREGATES’; ABS, ‘5671.0 – LENDING
FINANCE, AUSTRALIA (NOVEMBER 2018) – TABLE 52’.
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BORROWERS MOVE TO ONLINE PURCHASE

Online research (consideration) strong at ~83%. Online purchase increasing 113% since 2015.

SOURCES: KANTAR SHOPPER PULSE OCTOBER 2020. GOOGLE CONSUMER BAROMETER RESEARCH 2015.

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~$15B
NZ PERSONAL
LENDING MARKET
SOURCE: RBNZ, ‘C5 – SECTOR LENDING (REGISTERED BANKS AND NON-BANK
LENDING INSTITUTIONS)’. NOTE: PERSONAL LOANS ARE DEFINED AS PERSONAL OR
CONSUMER LOANS WHICH ARE NOT FULLY SECURED ON RESIDENTIAL PROPERTY
INCLUDING OVERDRAFTS, CREDIT CARDS, AND TERM LOANS.
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MAJOR BANK MARKET SHARE IN DECLINE 2015: ~90% → 2018: ~50%

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BRANCH /
STORE
PURCHASE
DOWN 70%
ONLINE
PURCHASE
UP 113%
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HARMONEY TOTAL ENQUIRY SURPASSES $7.4B* $3B IN AUSTRALIA * FROM AUG 2014-FEB 2021

1H21 RESULTS 24 FEBRUARY 2021

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• $1B P.A. AUSTRALIAN ORIGINATION TARGET By matching NZ performance to our AU business today = $1B per annum opportunity

PARITY IN NEW CONVERSION

PARITY IN 3R HARMONEY AU PERFORMANCE ORIGINATION TARGET

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GAP TO
NZ PARITY
AU ~25%
OF NZ
=
+
AU CONVERSION NZ CONVERSION
(Prior to Libra 1.7)
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P.A. $1B Applying Harmoney NZ funnel metrics to Harmoney AU

1H21 RESULTS 24 FEBRUARY 2021

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ROADMAP TO $1B P.A. AUSTRALIAN ORIGINATION TARGET

CUSTOMERS DEMAND FRICTIONLESS FINANCE

MONEY IN MOMENTS 113% BROAD LENDING LIMITS GROWTH IN ANY DEVICE / INTERFACE = + ONLINE TRUSTED BRAND PURCHASE DELIVERABLE DUE EARLY RESULTS MILLENNIAL RELEASE 1 LIBRA™ 1.7 FEB 21 ~100% LIFT IN CONVERSION MILLENNIAL RELEASE 2 LIBRA™ 1.8 JUN Quarter 21 TBC RELEASES 3-5 TBC TBC TBC

Harmoney is meeting customer demand for a simple and seamless experience and identifying opportunities for product initiatives. For example, an opportunity to create a BNPL-like experience for higher value purchases.

FRICTIONLESS FINANCE

1H21 RESULTS 24 FEBRUARY 2021

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WHY IS HARMONEY’S MODEL SUCCESSFUL?

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Attractive revenue profile, loan book, $1.9Bn+ in originations at market leading NIM of ~11%.

COMPELLING FUNDAMENTALS

Significant presence in NZ and release of Libra 1.7 into Australia in Feb 21 resulting in doubling of conversion into new loans.

STRONG MARKET POSITION

CREDIT PRODUCT Opportunities to expand product INNOVATION into complementary segments and verticals by leveraging customer data.

WAREHOUSE Diversified warehouse funding FUNDING programs in place across SECURED Australia and New Zealand with $290m+ undrawn.

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TECHNOLOGY EMPOWERED

OPERATING LEVERAGE

STRONG CUSTOMER RETENTION

EXPERIENCED TEAM

Proprietary technology, Stellare™ enables automation, machine learning, data utilization and direct marketing.

Stellare™ enhances customer lifetime value and minimises distribution costs, facilitating scale and efficiency, leading to Cash opex being 19% of pro forma revenue.

High customer satisfaction and personalized relationship direct with customer through 3Rs program.

Highly experienced management team with a demonstrable track record of success in consumer finance in AU/NZ.

1H21 RESULTS 24 FEBRUARY 2021

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APPENDICES

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• LARGEST DIRECT PERSONAL LENDER ACROSS AU AND NZ ORIGINATIONS OF $1.9+ BILLION

CUSTOMERS NET PROMOTER SCORE 83 GOOGLE REVIEWS 4.7/ 5 SHOPPER APPROVED 4.7/ 5 NZ HOMEOWNERS 49% (% OF CUSTOMERS) AU HOMEOWNERS 63% (% OF CUSTOMERS)

NEW ZEALAND AWARDS

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COMPANY OF THE YEAR

TEAM FTEs (NZ + AU) 69 FTE ENGINEERS, PRODUCT MANAGERS, DATA SCIENCE[51%]

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2015 • 2016 • 2017 • 2018 • 2019
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KEY METRICS 1H21 PRO FORMA REVENUE $42m TOTAL ORIGINATIONS $1.9b REVENUE (PRO FORMA) 20% CAGR (1H17-1H21) CUSTOMER RECEIVABLES $481m AVERAGE INTEREST RATE 17% NET INTEREST MARGIN 11% AUSTRALIAN AWARDS 2017 • 2018

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AUSTRALIAN AWARDS
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CUSTOMER LOAN PRODUCT

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Unsecured
Risk-based
personal
pricing
loans
Automated
application
Fast funding
process
Fully
CCCFA
Transparent
/ NCCPA
fee structure
compliant
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PERSONAL LOANS

• Personalised fixed rates based on customer credit characteristics.

• Loans up to $70k with terms of three or five years.

• Automated simple and streamlined process.

• • Customers receive funds within 24 hours of acceptance by the customer.

• Loans are compliant with applicable regulations in Australia and New Zealand.

• Transparent rates. Only 1 fee ever - an upfront establishment fee.

USE OF FUNDS

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DEBT HOME
CONSOLIDATION RENOVATIONS
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AUTO HOLIDAY & TRAVEL
EDUCATION BUSINESS
EXPENSES CASHFLOW
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$362M NEW ZEALAND PORTFOLIO

(as at 31 Dec 2020)

LOAN PURPOSE

REGION

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AGE OF BORROWERS

EMPLOYMENT STATUS

PROPERTY OWNERSHIP

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73% of customers are
office, professional,
trade
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~49% own
property
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$106M AUSTRALIA PORTFOLIO

(as at 31 Dec 2020)

LOAN PURPOSE

REGION

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AGE OF BORROWERS

EMPLOYMENT STATUS

PROPERTY OWNERSHIP

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79% of customers are
office, professional,
trade
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~63% own
property
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HARMONEY BOARD OF DIRECTORS

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DAVID FLACKS
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INDEPENDENT CHAIRMAN

David was a senior corporate partner of Bell Gully for many years and was General Counsel and Company Secretary of Carter Holt Harvey for 4 years during the 1990’s. Since retiring from Bell Gully, David has had a number of governance and regulatory roles. He is currently chair of dual NZX and ASX listed AFT Pharmaceuticals and is chair of the Suncorp New Zealand group of companies, and a director of Todd Corporation. He has been chair of both NZX Markets Disciplinary Tribunal and NZX Regulatory Governance Committee, and a member of the New Zealand Takeovers Panel.

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PAUL LAHIFF

INDEPENDENT DIRECTOR

Paul was previously Managing Director of Mortgage Choice Limited (20032009) and prior to that Managing Director of Permanent Trustee and

Heritage Bank. Paul sits on the Boards of Sezzle Ltd, 86400 Ltd, Austbrokers Ltd, and NESS Super. He is also the Chair of the ISO 20022 Migration Steering Committee and holds a Bachelor of Agricultural Economics from Sydney University. He is based in Sydney, Australia.

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TRACEY JONES INDEPENDENT DIRECTOR

Tracey is a professional director and family office adviser. She currently has a portfolio of governance roles in the commercial, not for profit and charitable sectors. She has significant investment, commercial, and governance experience having previously held executive roles in one of New Zealand’s largest family offices. She is a chartered accountant, a member of the Chartered Accountants of Australia & New Zealand, and a member of the New Zealand Institute of Directors.

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NEIL ROBERTS

DIRECTOR AND FOUNDER

Neil founded Harmoney, led the business as CEO over 6 years driving the capital path, building culture systems and processes that are intrinsic to Harmoney’s success. Prior to that Neil was Head of Sales and Business Development at FlexiGroup (a leading Australian consumer and SME lender), leading a team of 80 with sales of $200m driving a $30m profit. Neil founded the Direct Division of a listed New Zealand retail company, PRG Group, that sold personal loans to consumers and raised retail debentures to fund loans. Launched in 2001 PRF Direct, achieved $3.2b in personal loan applications and $1.2b in written personal loans over five years.

Ultimately heading the business, Neil was responsible for over 400 staff and a balance sheet of $750m in assets with forecasted PBT of $50m six years later and prior to being sold to GE Money in 2006.

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DAVID STEVENS

CHIEF EXECUTIVE OFFICER AND MANAGING DIRECTOR

David is a highly experienced CEO specialising in the non-bank consumer and commercial finance sectors within Australia and New Zealand. David most recently led a start-up company providing medical payment options, ultimately securing a major equity stake in the business by the Bank of Queensland in 2018. Prior to this, David served as CEO and CFO of Humm (formerly “FlexiGroup”) (ASX: “FXL” now “HUM”), a diversified financial services company focusing on commercial and consumer finance in Australia and New Zealand. In David’s near-decade with FlexiGroup, he led large teams in the strategic growth of the business, through both organic growth and M&A of what was a small company to an ASX200-listed business. Whilst CEO of FlexiGroup, David led the $300m+ acquisition of Fisher & Paykel Finance and spent considerable time in New Zealand in the course of his work in the local side of the business.

1H21 RESULTS 24 FEBRUARY 2021

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