HUMM GROUP LIMITED — Investor Presentation 2017

Jun 21, 2017

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Australian Commercial Leasing

MARKET UPDATE

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INTRODUCTION

Summary

Detailed review of Commercial business identified inherent weaknesses

Strategies implemented to reset the business Stage two enhancements commence July 17

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INTRODUCTION

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Identified on Enterprise exit

Enterprise Seller & buyer Internal skill set transactions where experience clunky - weak large single asset exposures

Faced increased Internal systems, competition too consumer business focused

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INTRODUCTION

The Australian Equipment Finance Market has shown consistent year on year growth in receivables, positioning FlexiCommercial for growth The commercial equipment finance market is over $36b per annum or $90b in receivables and growing year on year

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AUSTRALIA LEASING

The market continues to move away from dealing directly with their incumbent bank

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Micro SME
Bank
15%
Opportunity for FlexiCommercial
Broker Bank
to increase market share in SME
55% 45%
and Micro
Broker
85%
Corporate Institutional
Broker
17%
Broker
33%
Bank Bank
67% 83%
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INTRODUCTION

Net Receivables by Product ($bn)

2014/2015 2015/2016 $70.00 $60.00 $50.00 $40.00 $30.00 $20.00 $10.00 $0
	Finance Lease Operating Lease $12.30 $6.20 $14.10 $6.60	CHP Chattel/Loans $8.40 $57.90 $6.70 $59.80

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FLEXICOMMERCIAL

Commercial book by industry type

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Technology 32%
Broker 16%
Telco 15%
Catering 7%
Fitness 6%
Energy & Solar 6%
Outdoor Power
5%
Equipment
Printing 4%
Building Construction 3%
or Shop Fitting
Furniture or
1%
Office Fixtures
Coffee 1%
Beauty 1%
All Other 4%
0% 10% 20% 30% 40%
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Volume

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FLEXICOMMERCIAL

Existing business strengths

• Known brand

• Funding lines

  • Back book

• Existing relationships • Core collection • Core / Market presence systems products

• Existing relationships

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FLEXICOMMERCIAL

Key areas of focus

Asset and credit quality rather than volume

Investing into our people, processes and systems Building scalable systems and operations that ensure process integrity and reduce Opex

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FLEXICOMMERCIAL

The business is positioned for sustained growth with strong fundamentals through five key pillars

Industry leading leadership team

Rebuilt and Rebuilt National streamlined Broker Channel internal processes Offering

Strong leadership at the core of our strategy execution

Internal operating National Broker processes have Channel offering been streamlined for distribution has to allow for greater been rebuilt business efficacy

Expert leadership to allow for greater team composed business efficacy of industry experts across key Internal operating disciplines model has been re-engineered and rebuilt to support effective pipeline flow

Dedicated internal Broker support team has been established to support new volume

Year on year growth expected to accelerate through aggregator relationships

IT systems strategy developed for the Commercial business and expected to drive deal flow efficiency

Developed and operationalised asset management function

Asset management function has been developed and operationalised

Focus on actively managing asset risk and residual value positioning

Refocus and a proactive end of term engagement

Managed Services Offering and key contracts

Managed Services Offering is operationalised

Pipeline now pricing Tier 1 programs

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FLEXICOMMERCIAL

FlexiCommercial has four key segments

The SME Direct business The broker business Branded/White label business The managed services business

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FLEXICOMMERCIAL

The SME Direct business

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Our SME Direct business is a dedicated function specialising in providing our sellers with financial solutions for their business requirements

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Our staff work closely with the seller to ensure that they are provided with the right solution for their requirement

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Over the last year we have focused on replacing largely manual legacy processes with the introduction of greater process standardisation and automation

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Operationally we have reduced our processing costs, increased processing efficiency and delivered initiatives aimed at improving the customer experience

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From a Sales perspective, we have worked to tightly focus our efforts on yield and credit quality rather than volume, deepening our connections with our Sellers and Buyers

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FLEXICOMMERCIAL

The broker business

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With Buyers increasingly using brokers, we have developed dedicated and specialised Broker team and are rebuilding our proposition.

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We have bolstered the leadership of the team with leading industry experts, allowing us to leverage their skills, capabilities and deep-rooted business networks

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Strategically our Broker Business is also focused on book quality and yield rather than seeking to compete on price for volume

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Our distribution footprint strategy has focused on creating deep strategic relationships with brokers across the country to provide specialised commercial solutions leveraging our competitive advantage

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Overall we are working closely with broker groups that collective write in excess of $5b per year and we see our contestable share of this market to be in excess of $200m per year

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FLEXICOMMERCIAL

Branded/White label business

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One of our key differentiators in the market has been our successful program of branded / white labelled commercial finance solutions

We work with key Sellers to create and manage a white label finance solution for their Buyers, allowing them to increase their sales performance by leveraging our core skills and capabilities in commercial finance

Strategically we have refocused our strategy towards selecting strategic partners for these program to ensure and uphold book quality with greater yield and sustainability rather than volume

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We have improved our asset and operating risk frameworks and resourcing

From a Trans-Tasman perspective, we have been working closely with our NZ Commercial Business and assisted them in the development of this strategic offering for their local market

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FLEXICOMMERCIAL

The managed services business

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Our managed services product is experiencing substantial interest due to its unique features and we have signed a relationship agreement with a global IT manufacturer and have strong interest from a large global reseller

Equipment is bundled with services on a consumption basis and can range from IT equipment to larger asset classes

The solution is acknowledged in the industry to be superior to other market offerings due to quantity flexibility, no imbedded lease and IFRS 16 off balance sheet

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Increasing focus on XaaS-“Everything as a Service”, mirroring developments in the US, our managed services offering strategically positions us to capitalise as first movers in the market

Our strategic partners are a seeing extensive interest from Tier 1 Australian and Global corporates

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INTRODUCTION

Summary

Our Goal is to double receivables book over the next 18-24 months

Improve the book performance and yield by focusing on quality

Roll out Managed Services product Introduce program level agreements and Managed Services to FlexiCommercial NZ

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