HUMM GROUP LIMITED — Investor Presentation 2014

May 14, 2014

Flexi Future: FlexiGroup strategy day

Financially Connecting Businesses and Consumers

15 May 2014

Welcome to the FlexiGroup investor strategy day

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Objectives for the day

• Provide an update to the market about the business health and recent acquisitions

• Reaffirm market guidance for FY14 of $84-86M Cash NPAT

• Walk through our growth strategy covering the next few years

• Demonstrate some of the enabling technology we are releasing to deliver on the strategy

3

Flexi Future day agenda and timing:

TOPIC PRESENTERS

MIN SESSION 1 SESSION 2

TOPIC	PRESENTERS	MIN	SESSION 1	SESSION 2
Welcome, introduction to the Executive team and setting the scene	Tarek Robbiati	10	09:00-09:10	13:30-13:40
Our mission, vision and strategy overview	Tarek Robbiati	15	09:10-09:25	13:40-13:55
Business unit strategies	David Stevens	10	09:25-09:35	13:55-14:05
Consumer anddemo	Nicholle Lindner	15	09:35-09:50	14:05-14:20
Certegy	Rob May	10	09:50-10:00	14:20-14:30
Interest free cards	Nicholle Lindner	10	10:00-10:10	14:30-14:40
SME	Nicholle Lindner	5	10:10-10:15	14:40-14:45
BREAK		10
Enterprise anddemo	Anthony Roberts, Brett Beaumont	15	10:30-10:45	15:00-15:15
New Zealand	Tarek Robbiati	5	10:45-10:50	15:15-15:20
Paymate anddemo	Tarek Robbiati, Dom Agostino	15	10:50-11:05	15:20-15:35
Capabilities investment	Peter Lirantzis	5	11:05-11:10	15:35-15:40
Funding and M&A	David Stevens	10	11:10-11:15	15:40-15:45
Medium term ROE and growth	David Stevens	5	11:15-11:20	15:45-15:50
Strategy on a page and wrap up	Tarek Robbiati	10	11:20-11:30	15:50-16:00
Q&A	Tarek Robbiati, David Stevens	30	11:30-12:00	16:00-16:30
		180

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Historically our game plan has been about diversification for growth and our business has significantly changed since its IPO

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Acquired
In FY07 Flexirent RentSmart, Now, in FY14
Equico and ToT
and Flexiway FlexiGroup is a
were sold diversified non-
Acquired Lombard
through Harvey bank Financial
Norman and Services provider
Acquired Once
independent Outsourced contact with:
retailers. We had: • ~200K customers Launched centre to Manila •• ~750K customers 11 lines of
Blink
• 1 line of business Acquired business
• 1 major channel Paymate • ~40 major channel
partner partners
• ~250 staff across Opened Irish Launched • ~840 staff across
Australia and New office Australia, New
Commercial
Zealand Zealand, Manila
vendor
and Ireland
finance
Acquired
Listed on ASX Certegy
FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14
Launched ‘too Awarded Australia’s Awarded Australia’s Passed $1B market Awarded best
$29M easy’ and the bee best contact centre best employer (EOC) capitalisation managed company $84-86M
Cash NPAT Cash NPAT
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Where to from here?

• This year we remain on track to deliver $84-86M Cash NPAT , another year of doubledigit Cash NPAT and Cash EPS growth

• We have also heard your growth concerns , namely:

• How steep is the decline in consumer leasing , can FlexiGroup stem this decline?

• Have solar installations peaked?

• How will we grow the cards businesses?

• Why did we acquire Think Office Technology ?

• How will we manage competitor threats ?

• What are our plans for Paymate ?

Is double-digit Cash EPS growth sustainable over a much greater profit base ?

6

We have been busy strengthening our core and setting the platform to support growth

1H14 ACHIEVEMENTS

2H14 ACHIEVEMENTS

Australia Consumer and SME Leasing

• Signed agreements with Optus (MVNO – Mobile Virtual Network Operator) and agreement Brightstar

• • Mobile and tablets pilot – Nov. 13 • Acquired RentSmart AU/NZ – Dec. 13

• • •

•

Completed RentSmart acquisition – Jan. 14; on track to realise $4-5M of pretax synergies as of FY15 Commercial launch of mobile phones and tablets

Developed new leasing propositions in newly acquired channels (e.g. JB Hi-Fi, DSE) and launched Smartway in JB Hi-Fi Repositioned FlexiCommercial brand for SME

Interest Free Cards

• Delivered Phase 1 of Lombard-Once integration; on track to exceed $3.5M annualised post-tax opex synergies • Restructured related financing facilities

•

On track to deliver Phase 2 of Lombard-Once integration plan, a single IT platform to support multiple card brands Revamped card offerings for Lombard and Once

Certegy

• Delivered $99M in solar volumes in spite of 75% reduction in solar panel subsidies since Dec.12 • Continued to develop VIP Program • Significant enhancements of Certegy call & click platform to drive volumes

• • • •

Signed long-term partnerships with Michael Hill Jewellers Entered new category of Rental Bonds through a long-term partnership with rent.com

Continue to see sustainable solar volumes of $15M p/m Entered New Zealand market with unique product offering

Enterprise

• Delivered 23% volume growth • Launched new product offers including Purchase power Agreements, Managed IT services and Managed Print Services

• • •

Launched FlexiEnterprise brand Acquired Think Office Technology Rolled-out state-of-the-art strategic vendor and broker platform

New Zealand Leasing

• Delivered strong volume and cash NPAT contribution in 1H14*

Acquired Equico, a well established provider of leasing to businesses and government agencies for a non-material consideration

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The future of FlexiGroup starts and ends with its customers; our opportunity is to deliver a consistent experience across our brands

CUSTOMERS ARE VOICING THEIR OPINIONS ONLINE

NET PROMOTER SCORE HAS HIGHLIGHTED MIXED CUSTOMER SENTIMENT FOR OUR PRODUCTS

IMPROVING OUR CUSTOMER ENGAGEMENT IS THE START OF OUR GROWTH STRATEGY

• Our customer base is growing, becoming more savvy and increasingly want more value for money

• Customers now have a

• voice on social media forums

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NPS by segment
NPS
Product
Brands score
group
(1H 14)
Consumer
-6
leasing
New
Zealand 23
leasing New Zealand
Cards -9
Certegy 48
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• To become a customer-centric company, our strategy starts by listening to our customers

• We are embedding processes which identify the root cause of each customer pain point and proposes how to improve the customer experience

• We are already seeing an improvement in customer engagement and see that our promoters drive over 50% of our repeat business

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VIDEO
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Our mission and vision focuses on our customers and how we enable them to acquire things they need and things they dream of

OUR MISSION

We find new and ever-better ways to financially connect businesses v and consumers to the things they need and the things they dream of

OUR VISION

To have “Flexi” become the v empowering verb that people use when talking about acquiring a significant item

WHY? BECAUSE OUR CUSTOMERS’ WORLD IS CHANGING They are more digital, more savvy, more social, more technology, more mobile, more

choice, more complexity, more noise, more clutter, more pressure to keep up

SO FLEXIGROUP MUST ALSO CHANGE We don’t have the scale of a big brand or the balance sheet of a bank

We have to do things differently and embrace the trends of the digital age

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We will drive growth by becoming an integrated full-service provider of finance solutions

From Product-centric Call-Centre Based Finance Provider to…

… Integrated Full-Service Provider of Finance Solutions with multiple originating and servicing options

Call Centre

(Origination and servicing during store opening hours)

Inputs

Certegy

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Leasing (Consumer, SME, Enterprise)
Cards
Available
Credit
External ID
Operator Assisted Check
Approvals
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OmniChannel Retail, Enterprise Vendor Partner / Broker Platform
Direct-to-Consumer Call&Click
(24 x 7 Origination)
Inputs
VRU Call Centre
Available
Credit
Leasing
Cards
Mobiles
External ID
No Interest
Operator Assisted Trade-ups Check
Approvals
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Back-office efficiencies from offshoring

Back-office efficiencies from offshoring combined with improved productivity and customer reach in Australia

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Three pillars will underpin our business growth in the future

TODAY FUTURE FLEXI

• Consumer and SME point-of-sale

• Consumer financing options including leasing, no

• and SME interest ever, interest free cards

• Finance

• Omnichannel experience through bricks and mortar, online and click & call

• Online self service functionality, repeat customer programs and pre-approval functionality

• Bundling of services (e.g. telco) and leases

• Enterprise equipment financing primarily

• Business offering solutions for office equipment

• Finance and technology

• Expanded underlying asset financing solutions, service verticals and operating lease with residual value

• Advanced origination platform to secure selected broker channel

• New Zealand commercial leasing through

• International[1 ] Noel Leeming, Harvey Norman and independent partners

• Expand international business via acquisitions or joint-venture in areas of core domestic capabilities

• Initial expansion in New Zealand business through core business lines

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We will deliver sustained growth across all business units

	FY11-14 historic volume CAGR	FY11-14 Historic NPAT/ANR margin	FY14-17 forecast organic volume CAGR	Growth drivers and comments
Consumer Leasing	(11%)-(10%)1 decline	~10%	0-5% growth	• Changing mix from computers to tablets, and from personal-use to business-use • Growth throughnew channelsfollowing RentSmart acquisitionand new categories • New product offeringbundling services (e.g. telco) with phones and/or tablets • Paymate to deliver apositive NPAT by FY16
No interest ever	11-13%	~7%	5-10%	• Continued growth through solar, jewellery and other categories
Interest free cards	N/A	~5%2	10-15%	• Continued growth throughOnce and Lombard brands • Organic growth andgrowth through acquisitions
SME Leasing	20-26%	n/a	15-20%	• Maintainmarket leadershipandefficient application to settlementprocess
Enterprise Leasing	34-40%	~5%	15-20%	• Expansion of ouroperating lease and asset management capabilities, newproduct offerings andservice verticals • Organic growth andgrowth through acquisitions
New Zealand	10-14%	n/a	15-20%	• International business of New Zealand will be separated out in our segment reporting for the first time at FY14-end • Organic growth andgrowth through acquisitions

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Consumer: Currently we are experiencing a shift from computers to tablets and from personal-use to business-use

COMPUTER AND TABLET SALES HAVE BEEN SHIFTING…

…THE USE OF IT PRODUCTS HAS ALSO SHIFTED FROM PERSONAL-USE TO BUSINESS-USE

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Mix of sales through major retail partners and market
Mix of financing purpose
data (units)
100% 100%
FY11-14
75% +60% 75%
CAGR
Business
Tablets
use
50% 50%
Personal
Computers
use
FY11-14
25% 25%
-12%
CAGR
0% 0%
FY11 FY12 FY13 FY14F FY11 FY12 FY13 FY14F
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We are responding to these changes by (i) creating an omnichannel customer experience, (ii) bundling of services with phablets and (iii) acquiring new channels by consolidating the market

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Consumer: We are designing responsive websites for PC, mac, tablet and phone to support omnichannel experience

FLEXI AVAILABLE ON ALL DEVICES

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RETAILERS PAGE

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APPLY NOW PAGE
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HELP PAGE
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Ca l and Click available C l ick & call available
on each page
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DEMO

Consumer: Our telco offering has now launched in Major Retail Partners offering 12 or 24 month phone or tablet plans

CUSTOMER VALUE PROPOSITION

• Lease and telco product available for tablets and mobile phones

• Fast, convenient application, < 5 minutes from application

• to activation

• Optus 4G network coverage

• Swap option available for a new phone every 12 months plus “loaner and protect”

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Consumer: The integration of RentSmart is on track to deliver the anticipated synergies

FINANCIAL PERFORMANCE

BRANDS, PRODUCTS AND CHANNELS

SYSTEMS AND PROCESSES

• On track to deliver $4-5m pretax opex synergies as originally forecast from FY15 onwards

• Downsized the team in Perth, and rebalanced resources with Manila, as well as renegotiated operational contracts to reduce opex

• There has been no disruption in volumes during the acquisition and integration; FY14 volumes in line with expectation

• Restructuring the RentSmart funding facility is on track to deliver $8-10m reduction in cash support levels

• R efreshed our product offering • Migration of all RentSmart within JB Hi-Fi , using our new customer contracts onto the SmartWay brand, early results show FlexiGroup system is on track promising uplift in volumes

• All originations are now using the

• • Launched end-of-financial-year FlexiGroup phone-based leasing promotion in Dick Smith originations platform and process Electronics using the FlexiW • Working on leveraging the

• brand. DSE is now the largest call&click-enabled RentSmart

• account of FlexiGroup where we online originations platform to

• provide whole-of-business customer develop the same end-to-end

• financing solutions

• Working on leveraging the call&click-enabled RentSmart online originations platform to develop the same end-to-end online originations functionality across all FlexiGroup brands

• The FIDO brand and product is being retired with existing retail partners moving to Certegy

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No interest ever: Selective growth through solar, jewellery and other categories

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Volume ($M)
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11-13% CAGR 5-10% CAGR
FY11-14 FY14-17
Repeat / VIP
Solar
Retail/Homeowner
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• Historically Certegy has grown through financing of solar panels and jewellery

• We have continued to grow our solar business selectively to a stable volume of $15m per month despite the 75% reduction in government rebates in FY11-14 through increased sector penetration and increasing average deal size

• In the future we forecast continued strong solar volumes through traditional panels and new technology of solar batteries

• Additionally we will grow Certegy through 5 key pillars :

• expansion of the VIP repeat program

• entry into New Zealand

• direct to consumer marketing

• increase penetration in 100 industries we service

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FY11 FY12 FY13 FY14f FY17f
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• new product categories (e.g. rental bonds where we have signed a long term agreement with rent.com)

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No interest ever: Upside exists in both existing and new target categories, Certegy continues to be selective

CERTEGY CATEGORY PENETRATION AND FORECAST GROWTH

PLANNED METHODS FOR GROWING FASTER THAN THE CATEGORY

• Grow VIP program of repeat purchases from existing customers

• Focus on high quality merchants within each industry (e.g. selected solar merchants)

• Increase number of new customers through direct marketing to consumers

• Higher penetration rate at current and existing merchants. Examples are:

Solar: FY11 $94m FY13 $166m (+33%pa) Jewellery: FY11 $77m FY13 $107m (+18%pa) Vacuums: FY11 $6m FY13 $22m (+91%pa)

• Increase the average value of purchases for high value existing merchants

• Find new growth anchor categories and subsequently cross-sell, e.g.

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FY11-13 growth p.a.
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Category +2% +5%	-4% +2%	n/m n/m
Certegy +91% -29%	+33% +18%	n/m n/m

- Rental Bonds

• Health (Aged Care products)

• Education (Course costs)

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Interest free cards: We are at the beginning of a 5-year+ journey during which several levers will drive and accelerate growth

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BECOME LARGE SCALE
ISSUER OF DEBIT
AND CREDIT CARDS
Anticipated reform of
SCCI regime
DRIVE STRATEGIC MARKETING AND OFFERS TO
TARGET NEW CUSTOMERS AND STIMULATE REPEAT
SPEND AND EVERYDAY USAGE
Upgrade and consolidate
back-end systems EXTEND PORTFOLIO MANAGEMENT AND MARKETING
Accelerate Joint-Marketing programmes with channel
REVAMP CARDS VALUE
partners
PROPOSITION
Restructure
funding
BUILD NEW PARTNER RELATIONSHIPS
M&A Entry into Interest Realise opex
Free Cards category synergies TODAY
FY13 FY14 FY15+
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Interest free cards: We see significant growth in cards over the next 3 years

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Volume ($M)
10-15% CAGR
FY14-17
Integration of
systems and
processes
Acquisition
of Lombard [1 ]
Acquisition
of Once [2]
FY11 FY12 FY13 FY14f FY17f
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• After acquisition of Lombard in June 2012 and Once in May 2013, we are now finishing the integration and consolidation of systems and processes

• We are now turning our attention to our existing partner relationships and potential expansion into other categories and partners

• Further growth through portfolio optimisation such as greater share of wallet from existing card customers and improved customer retention

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SME: Growth through new merchants and new industries

Selected new industries

We are leveraging the strong solar position of Certegy by providing solar leasing to smaller commercial installations such Commercial solar as day care centres, petrol stations and other owner occupied buildings

With the integration of RentSmart a new distribution channel has Retail commercial opened up of a retail-based commercial offer through Dick Smith, Officeworks, JB Hi-Fi & Leading Edge

Existing and new merchants in current categories

Fitness, catering Continued growth through our existing partners and new and office relationships equipment

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SME: Our dedicated SME team under the Flexi Commercial brand is the market leader in finance solutions for sole traders and SME

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Volume ($M)
20-26% CAGR
15-20% CAGR
FY11-14
FY14-17
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• The SME model continues to leverage our POS call-centre based capability with a dedicated team

• Our product has a strong customer value proposition with a competitive rate and realtime application decision to settlement

• We have a strong base of existing partners as well as growth in new industries and partners in existing verticals

• Our broad industry view and strong partner relationships protect us from cyclical volume fluctuations

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FY11 FY12 FY13 FY14f FY17f
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Enterprise: We are launching a new online originations platform for brokers and vendors, supported by our Enterprise team

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Product Selection

Individualised Branded Dashboard

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FlexiGroup Broker Dashboard

Full view and mgmt of application queue

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• We are shifting from manual originations processes to digital originations and self-service

• Brokers and Vendors will be able to transact anytime, anywhere and on any device

• We will be able to track and support the progress of deals from the central dashboard

• The platform will drive increased originations for lower opex, faster approval speed, and stronger partner relationships

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DEMO
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Enterprise: Continued strong growth through existing products and by providing solutions

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Volume ($M)
34-40% CAGR
15-20% CAGR
FY11-14
FY14-17
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• We have continued to grow the Enterprise business at >30% CAGR

• Future growth will come from our existing industries and products as well as the introduction of new products such as an operating lease with a residual value and extending our asset management capabilities

• We expect margins to come down as we grow and compete more often with the higher end of the market

• To combat this compression we will continue to differentiate into services to provide solutions as we did through the acquisition of Think Office Technology

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FY11 FY12 FY13 FY14f FY17f
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Enterprise: The acquisition of Think Office Technology (ToT) accelerates entry into service verticals and diversifies our revenues

COMPANY BACKGROUND ACQUISITION RATIONALE

• Specialist in Office Print and Managed IT/Managed Print Services (MPS) with significant market share

One bundled • solution benefiting Nine offices in regional customers and Queensland OEMs • Ongoing Mix of revenue from service ToT lease, finance lease and service ToT/ FXL Sale / FXL Sector growth rates[1 ] Finance 10OEMs Partnering 12% with OEMs 4% Unit Sales MPS

• Mix of revenue from operating lease, finance lease and service

• Diversification of revenue and protection against margin compression - Pricing flexibility through bundling

• Accelerated entry into service vertical for print and IT

• Opportunity to leverage service vertical expertise for other segments such as New Zealand and SME

• Scalable business model requiring minimal capital for growth

• Expansion of FlexiGroup geographical reach with regional focus and offices

• Key partner relationships with significant growth opportunities

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New Zealand: Growth through existing business and acquisitions

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Volume Mix
100%
Volume ($M) 80%
60%
10-14% CAGR 15-20% CAGR
FY11-14 FY14-17 40%
20%
0%
2006 2007 2008 2009 2010 2011 2012 2013 2014f
Business Use - Computers Business Use - Other Personal Use
• New Zealand demonstrates the benefit of shifting focus
of computer leasing for personal use to business use
• Core business-use product forecast to maintain strong
and relevant position in the New Zealand market
• Broker volumes to grow with new relationships and growth
in existing partners, focussing on SME
FY11 FY12 FY13 FY14f FY17f • Equico acquisition to strengthen our market position and
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• Equico acquisition to strengthen our market position and provide access to new channels

• We may acquire smaller players with strong management teams and broker and vendor relationships

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Paymate operates in the card payment processing industry and provides synergistic value to our financing businesses (e.g. Cards)

Merchant acquirer/processors Payee/ Merchant merchant Processing acquisition

Network Issuer/processor association/ Payor/ Issuer Issuer Card consumer processing bank scheme

• Selling goods • Sign up & provide and services swipe terminal offline/ online

  • Capture & • Maintains central • Authorize • Issues the card • Buying route database of all transactions and assumes goods and transaction cards on network • Processes credit risk of services data • Routes transaction card holder offline/onli ne

• Settles funds with the

• • Billing/ merchant Invoicing

• Settles funds with the • Processes merchant data • Routes transaction card holder

• • Collects merchant service • Passes (interchanges) data • Settles funds authorisation transactions to

• charges (MSC) with customer back to the issuing bank

• • Accountable to merchant merchant • Manages for processor terminal or consumer credit website

   - Manages consumer credit
  

Value of card payments Card fees Expected 2015 card fees	Value of card payments Card fees Expected 2015 card fees
	Value of card payments	~$430B $430B
	Card fees	31 bps 10 bps 40 bps 81bps
	Expected 2015 card fees	~20-25 bps 10 bps ~35-40 bps ~65-75bps

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Paymate: Today we are releasing the new OnTheGo product with mobile chip and pin processing, one of the first in Australia

Accepts EFTPOS[®] , credit and debit cards, compatible with Android and iOS smartphones and tablets

• This year we have invested in upgrading the back-end supporting platforms to EMV and PCI requirements

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Secure transactions through a card reader, no card numbers need to be provided

• We have also upgraded the payment device for chip and pin mobile payment processing , before the mandatory change in August

• Now we are ready to take this product to the market more aggressively, pursing strategic partnerships with small to medium enterprise

DEMO

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Paymate: We have signed a long-term agreement with a major Australian bank to provide unique merchant services

	Sales Origination Fulfilment Document Assess- ment Risk Decision Credit Decision Account creation Terminal installation Product selection and pricing Application capture Document collection Needs Assess- ment Opportunity Generation
Customer Contact

PAIN-POINTS OF ON-BOARDING PROCESS WITH BANKS

PAYMATE UNIQUE VALUE-ADD

• Merchant services are a relatively complex sale for bank staff (disincentive to sell)

• Branch staff inadequately trained and/or require hand-off to specialist sales force

• Multiple systems used for application capture (depending on segment and origination channel)

• Relatively high incidence of errors in application (eg. wrong or insufficient data)

• Long on-boarding times (often >14 days)

• Multiple hand-offs and large number of manual processes

• Risk assessment not performed until all documents are received

• Terminal not sent to customer until the end of the process

• No visibility of workflow status at frontline

• Tightly managed process with dedicated team managing applications end-to-end

• Streamlined easy to use paperless online application

• Application assessment completed next business day

• Short approval cycle , within 2 days online and 4 days PTG (Pay-on-The-Go)

• PTG device delivery within 4 days of approval

Leakage 1: Leakage 2: Sales lead to application Application to fulfilment

Conversion rate from lead to fulfilment as low as 25-50%

Leveraging FlexiGroup’s core strengths of speed-to-market and convenience to deliver High customer satisfaction and reduced leakage

29

Corporate Centre: Delivering on our strategy requires further investment in our fundamental capabilities to scale up our business

EARLY INVESTMENT IN OUR CAPABILITIES IS THE FOUNDATION OF OUR GROWTH AMBITION

FORECAST IT INVESTMENT WILL ENSURE WE CAN DELIVER GROWTH AND REDUCE FUTURE SPEND

IT spend as % of income (%)

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12%
Cost to income ratio would
increase exponentially
without adequate investment
10%
in Functional capabilities as
more people will be needed
to manage the business
8% Gartner benchmark High
Low
Actual spend
6%
Early investment in
Functional capabilities
4% will ensure we can
maintain/reduce our
IT spend to income
ratio
2%
0%
FY11 FY12 FY13 FY14 FY15 FY16 FY17
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IT: We must invest in both front-of-house applications as well as back-office support applications to deliver on our strategy

Click Available Online Anytime, Anywhere on any Device

Call Standardise and consolidated process across multiple brands

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Mobile Phones
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Enterprise Originations
Platform
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SmartCheck/ FlexiRent
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Open 24X7 Pre Approval Online Store Available Online In store In Store

Online Card Originations (multi-brand integrated front end)

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Management and Support for Online activity
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Support provided to online channels to manage customer experience

Back-end

Upgrade of existing capability to provide improved operating efficiencies

Back-end supporting applications

31

Funding : Committed support from banks and institutions, diverse funding sources

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Funding at Dec-13
$1,506 $1,064
Undrawn $442
Securitisation
38%
2% Corporate
Present Value
21%
Drawn $1,064
39% Rated facilities
Funding facilities Source of funding
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• FXL has sufficient unused bank warehouse facilities to fund growth in the foreseeable future without any securitisation of receivables

• Despite unused bank warehouse facilities, FXL intends to continue to securitise ~2 issues per annum

• Diversified funding structure continues to generate benefits through competitive funding costs

• Undrawn headroom will be maintained to provide buffer against unforeseen market events

32

We will maintain discipline in M&A. Acquisitions pursued in line with our strategy, focussing on strengthening the core first to accelerate our growth

CORE PLATFORMS

Reinforce the core Expand the core (scale acquisitions) (scope acquisitions)

Step-out growth (scope acquisitions)

Consumer	•	Extendexisting product offering to	• Expand into anew asset class,service	• Extend our existing business lines into
		a broader customer	vertical, channel or	significantly
		basesuch as cards,	product suite	different products
		SME or enterprise		or into new
Business				geographies

• New Zealand acquisitions to reinforce or expand our core • No other market entry is likely until domestic capabilities have reached the International desired competitive advantage and development of robust offshore management model

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We expect our return on equity (ROE) to continue at high levels of ~20% in the medium-term

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FlexiGroup ROE (%)
30%
24% 24% 24%
~20%
20%
10%
0%
FY11 FY12 FY13 Medium term
Historical Forecast
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• Confirming FY14 guidance of $8486M Cash NPAT

• Strategic and financial investments in our capabilities will underpin double-digit Cash NPAT growth over the medium term subject to and after FlexiGroup’s investment program has been delivered

• Further guidance will be provided for FY15 at full-year results in August 2014 per the normal cycle

• Current dividend policy (50-60% payout) remains appropriate in the context of the forecast growth and investment

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Our strategy on a page

Our Mission – this is our reason for being (our purpose): We find new and ever-better ways to financially connect businesses and consumers to the things they need and the things they dream of

• Our Vision – this is where we want to go: To have “Flexi” become the empowering verb that people use when talking about acquiring a significant item Our Ambition - how we’ll measure success:

ROE ~20% From ASX200 to ASX100 company

Highest ranking NPS in Aust. FS industry Employer of choice Partner of choice

Consumer Finance

• We offer a range of financing solutions for consumer and SMEs at point-of-sale instore and online

• We offer services that complement our consumer products, such as mobile broadband with tablets plans with leases

Business Finance

• We provide standardised and bespoke financing solutions for a range of assets, offering finance and operating leases (including residual value options) and service solutions

• Our partners can use our digital platform for originations and self-service

International

• We may acquire or joint-venture businesses overseas where we can win in our core

• We will first look to buy assets overseas where there is a similar regulatory environment, rule of law and credit bureau

• Our development of NZ is through our core business lines such as Enterprise and Certegy and where appropriate through acquisition

Reinforce core Next generation, expand and grow Funding Talent IT Legal & Digital Credit Risk Mgmt M&A • Maintain • Install talent • Upgrade core Regulatory • Develop • Maintain industry • Access new or conservative management systems to drive • Regulatory omnichannel leading credit adjacent funding approach processes further compliance experience across assessment customers efficiencies and • Commercial all products process through support growth acquisition structuring

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Strategy summary

• Our strategy is customer-centric and is about financially connecting Businesses and Consumers

• Our strategy leverages our strengths in (i) credit scoring, (ii) sales distribution and channel marketing, (iii) fast, easy and convenient finance products and solutions, (iv) coupled with strategic innovation and a unique culture

• It will be delivered one step at a time, business segment by business segment so that FlexiGroup becomes a connected, integrated provider of financial solutions

• Our strategy protects the value of our mature business, and accelerates the growth of our new segment areas

• It will require up-front investment with a relatively short-term payback period

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Q&A

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