31 January 2023

ASX Announcement

2Q23 TRADING UPDATE

MONEYME delivers record revenue and statutory profit

MONEYME Limited (“MONEYME” or “Group”) is pleased to announce its second quarter results for

the period ending 31 December 2022.

2Q23 Trading Highlights

Strong returns

• Statutory Net Profit After Tax (NPAT) of >$8m for 1H23, up on pcp ($19m loss, 1H22;

$34m loss, 2H22)

• Record gross revenue of >$117m for 1H23, up >143% on pcp ($48m, 1H22; $95m, 2H22)

• Record gross revenue of >$60m for 2Q23, up >140% on pcp ($25m, 2Q22; $57m, 1Q23)

• Core operating expenses to the loan book2 <3% for 2Q23, down on pcp (11%, 2Q22;

5%,1Q23)

Continuing transition to lower credit risk assets

• Closing average Equifax score increased to 714 for 2Q23 (672, 2Q22; 711, 1Q23)

• Secured assets increased to 41% of loan book for 2Q23 (26%, 2Q22; 40%,1Q23)

• Net losses of 6.0% for 1H23 (5%, 2H22) in line with the expected lag effect related to the

historical composition of the loan book. The increased credit quality of the book and

operational measures undertaken are expected to reduce loss rates in the coming months.

The above considerations are reflected in the Group’s credit loss provision and customer

pricing as appropriate

Business positioning and outlook

Management expects:

• Positive statutory NPAT for FY23; Gross revenue >$220m

• Credit losses expected to reduce in line with changes to the asset credit risk profile

• Sustainable growth of the loan book

Clayton Howes, MONEYME’s Managing Director and CEO said:

“We are pleased to announce statutory profits and record revenue in the first half, beating analyst

expectations. Building from strong results in the first quarter, the momentum continued into the

second quarter and has seen us upgrading our outlook on revenue and profit for the full year.

Our return to statutory profitability after a prolonged period of high growth is not only a result of a

shift in near-term business strategy in response to the macro environment, it is also a continuation

of our commitment to drive profitable growth and a testament to the quality and proficiency of our

team.

We are proud of the agility and adaptability that MONEYME has demonstrated in navigating rising

interest rates and we are ready to take advantage of the market opportunity in car financing and

the potential tailwinds from changing BNPL regulation. With SocietyOne successfully integrated

into the business, we are looking forward to solidifying our position as a leading non-bank

challenger.

It is also pleasing to note the business is progressing this agenda alongside the delivery of strong

ESG outcomes that I expect to be reflected in B-Corp certification in due course.”

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A statutory profit surprised the market positively (expected in this kind of market and credit environment), though it has obviously come at the cost of winding back the growth in the loan book. Credit quality seems to be improving overall - atleast the business has demonstrated the ability to be profitable.

Whatever brownie points management scored with investors (myself included) in scaling up the business and communicating well with shareholders has been more than undone by their terrible recent decisions, chiefly the ill-designed, highly dilutive capital raising conducted at 50c with the market price languishing well beneath immediately after the announcement. The slide has continued unabated since.

It's going to be a hard slog to win back the market's trust now, in a macro environment that seems to be turning hostile to sub-scale lenders like this.

MONEYME TO ACQUIRE SOCIETYONE

Highlights:

• MoneyMe to acquire SocietyOne to boost revenue, customer and profit growth

• 72% increase in MoneyMe’s pro forma1 loan book size to $934m (30 November-2021)

• 86% increase in MoneyMe FY21 combined, pro forma1 revenue

• $146m in annualised2 revenue (a 63% increase for MoneyMe) based on combined

1Q FY22 unaudited results (combined, pro forma1)

• $17m per annum in pre-tax cost synergies3

• Greater than $15m per annum in pre-tax revenue synergies3

• Material uplift in cash profitability of the group in future years following the

combination and synergies

• Revenue per share accretive in FY234

• Average Equifax score increasing from 656 to 685 (pro forma1)

• Significant operating leverage through consolidation onto MoneyMe’s Horizon

platform

• Large incremental revenue opportunity through marketing of MoneyMe products to

SocietyOne’s high quality, differentiated customer base, improved SocietyOne

customer experience and unlocking new distribution strategies

• Power of $2bn+ of combined of customer origination data for credit underwriting,

marketing and customer behaviour analysis

• Funding benefits including diversity and securitsation program acceleration

• Implied acquisition price of SocietyOne of $132m based on MoneyMe 16 December

2021 closing share price and assuming consideration is 100% MoneyMe shares5

Clayton Howes, MoneyMe’s Managing Director and CEO said:

“The SocietyOne acquisition combines two of the most widely recognised consumer credit

disruptors to deliver immediate scale advantages and incremental revenue opportunities.

The strategic value is immense for both businesses, and we are incredibly excited. The

opportunity to accelerate growth and cost efficiencies are quickly realised by combining the

strengths of both brands and migrating SocietyOne operations onto MoneyMe’s high-tech

Horizon Technology Platform. The SocietyOne brand will continue to thrive and will benefit

from access to MoneyMe’s diversified product set and ability to deliver leading customer

experiences.

There are many new innovations we will expand on, including the SocietyOne credit score

product which will be brought to the MoneyMe customer base and the Banking-as-a-Service

partnership with Westpac that we will continue to explore.

We are excited to be leading industry consolidation and fast tracking our journey to become

the number one non-bank credit provider in Australia.”

I'm not sure what to make of this acquisition yet - on one hand, it adds scale to a sub-scale player in lending, but on the other, the consideration put up is expensive and the company has no track record of acquiring and integrating a business of this size. So overall, lukewarm on it, with an accompanying increase in the risk level associated with this investment.

I view it as a crude local proxy for UPST in the US (which I have benefited enormously from).

Torrid growth + well incentivised and aligned management + benign lending environment = room to run.

Generally not a fan of investing in 2nd/3rd tier lenders though, and my track record in this area of the market is poor.