Equals : Interim Results for the six months ended 30 June 2021

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED IN ARTICLE 7 OF THE MARKET

ABUSE REGULATION NO. 596/2014 ("MAR")

14 September 2021

Equals Group plc

('Equals' or the 'Group')

Interim Results

Strong B2B growth underpins strategic move from both retail and travel FX.

Adjusted EBITDA significantly ahead of expectations and operationally cash generative.

Equals (AIM: EQLS), the fintech payments group focused on the SME marketplace, announces its interim results for the six months ended 30 June 2021 (the 'period' or 'H1-2021').

H1-2021 Financial Highlights
£millions	H1-2021	H1-2020	H2-2020
Underlying transaction values	2,308	1,560	1,933
- B2B	1,996	1,209	1,633
- B2C	312	351	299
Revenue	16.9	13.8	15.2
- B2B	11.6	9.2	11.0
- B2C	5.3	4.6	4.2
Gross profit	10.2	8.7	9.6
Adjusted EBITDA*	1.6	0.7	0.5
Operational cash in/(out) flows	0.8	(2.8)	0.4
Cash at bank	10.1	7.9	10.0

Totals may not sum due to rounding. Percentages are calculated on underlying figures before rounding. Where costs cannot be accurately attributed to each segment, they have been allocated on the basis of revenue.

• Group revenue increased by 23% to £16.9 million (H1-2020: £13.8 million)
• B2B revenue increased YoY by 25% to £11.6 million as the Group continued its focus on SMEs
• B2B in Q3-2021 represents over 80% of total revenue up from 67% in H1-2020
• Gross profit increased by 17% to 10.2 million, broadly reflecting the YoY increase in revenue
• Contribution increased by 24% to £9.8 million (H1-2020: £7.9 million), and contribution margin consistent at 58%
• Gross operating expenditure lower by 14% on H2-2020 through strategic tight control of costs
• Adjusted EBITDA* increased by 128% to £1.6 million (H1-2020: £0.7 million)
• Non-AdjustedEBITDA of £0.8 million with £0.6 million of exceptional costs (H1-2020: £0.5 million loss with £1.0 million of exceptional costs).

Post period-end trading update ('Q3-2021' 1 July 2021 to 10 September 2021)

• Revenues of £9.2 million up 58% from £5.8 million on same period last year
• Q3-2021- already a record quarter with 14 business days remaining
• B2B revenues continue to drive growth - now greater than 80% of overall book
• Equals Solutions, the new multicurrency product aimed at larger businesses, contributed £1.2 million of revenue, or 13% of total, in Q3-2021 to date
• £12.3 million of Cash at bank and in hand with net liquidity of £10.2 million as at 10 September 2021.

Commenting on the Interim Results, Ian Strafford-Taylor, CEO of Equals Group plc, said: "The planned pivoting away from retail and travel towards B2B has paid-offspectacularly in H1-2021.This trading performance and momentum has sustained since the period end and is being supported by fast growing revenues amounting to £9.2 million in the period from 1 July to 10 September, making this a record quarter with 14 business days left to run, with numerous new first-ratecustomers, and strong take-upof our enlarged product suite. Whilst, like other businesses we have seen market-forcesled cost pressures, particularly in staff and IT, we have contained these robustly, sought further efficiencies and have grown revenue at a much faster pace.

"Equals finds itself with a unique position in the FinTech sector as, not only are we generating operational cash, but we remain very well-funded for both re-investment in product and marketing to drive further profitable revenue growth."

Analyst meeting

A conference call for analysts hosted by Ian Strafford-Taylor (CEO) and Richard Cooper (CFO) will be held today at 0930am. A copy of the Interim Results presentation is available at the Group's website:http://www.equalsplc.com.

For retail investors, an audio webcast of the conference call with analysts will be available after 12pm today: https://webcasting.buchanan.uk.com/broadcast/6114eb77c97de6636c2d8e9d

Notes

• Adjusted EBITDA is defined as operating profit before: depreciation, amortisation, impairment charges and share option charges and items of an exceptional nature. EBITDA is defined as operating profit before depreciation and amortisation.
• • Ends -

For more information, please contact:
Equals Group plc
Ian Strafford-Taylor, CEO	Tel: [phone]
Richard Cooper, CFO	www.equalsplc.com
Canaccord Genuity (Broker)
Bobbie Hilliam	Tel: [phone]
Alex Aylen (Sales)
Buchanan (Financial Communications)
Henry Harrison-Topham / Steph Whitmore / Toto Berger	Tel: [phone]
[e-mail]	www.buchanan.uk.com

Chief Executive Officer's Report

The results for H1-2021 clearly demonstrate the success of the pivot of the Group from a B2C travel money business to a B2B focused operation. Recent years have seen significant investments into both the technology platforms and direct connectivity to payments networks. These initiatives form the essential building-blocks to move the Group from being product-led towards being more platform-led, with aim of providing simple-to-use solutions to the corporate sector. As evidenced by this set of results, the pay- back from these investments is now coming through and, encouragingly, is even more visible in the post period trading.

The investments made have allowed the Group to develop the capability for all customers to have a multi- currency account in their name defined by a unique IBAN; this being an internationally recognised standard to define an account. This capability underpins the Equals Money proposition for a range of products on one platform with simplicity of movement of money between products, targeted at the SME sector. In addition, the same infrastructure drives the Equals Solutions product which is aimed at larger corporates with significant international flows and high transaction volumes. Equals Solutions comprises a multi-currency account for collections and payments connected to SWIFT, International Payments platforms and UK domestic networks providing FX and payment capabilities combined with multiple levels approval protocols, all via one platform and login. Equals Solutions came on stream in June 2021 and is now contributing strongly in the third quarter, as can be seen in the post period end figures.

The 'own-name'multi-currency IBAN capability will drive sustainable and recurring platform-related revenues and growth through both Equals Money and Equals Solutions and thereby provide further growth to the individual product lines of International Payments, Cards and Banking services. The revenues from these platforms are both transactional and fee-based, thereby improving the earnings mix. Continual improvements to the functionality of the overall payment platform and direct connectivity to additional payments networks furthers the capabilities of the platform. Concurrently, more straight- through-processing ('STP') capabilities are being added which increases efficiency and processing capacity. The Group will also be enhancing the alignment of its service levels to its pricing and revenue generation and moving more transactions towards customer 'self-serve' where appropriate, further enhancing capacity and thereby operational gearing.

Operational improvements made by the Group in H1-2021 include:

• Significantly enhanced International Payments platform for self-serve customers 'Pay Platform'
• New internal dealing platform for International Payments - 'Exchange Platform'
• Continued roll-out of HubSpot CRM system aided by 'Sales Enablement' team
• New Equals Money website to better convert inbound B2B traffic
• STP for onboarding for both B2B and B2C customers via TruNarrative platform
• Joining the 'Confirmation of Payee' scheme for UK Payments
• Launch of 'Linked Cards' for FairFX B2C cards platform
• Implementation of automated reconciliations utilising Kani-payments platform, resulting in operational efficiencies and reducing credit risk
• Further upgrades to our compliance capabilities and personnel, enabling faster onboarding of new customers

Financial Overview for H1-2021

A summary of the Group's underlying transaction values is shown below:

Underlying transaction values
£millions	International	Corporate	Cash & retail	Banking	Total
	Payments	Expenses	cards	Services
B2B
H1-2021	1,355	149	2	490	1,996
H1-2020	818	93	12	286	1,209
% Change on year	66%	60%	(83)%	71%	65%
B2C
H1-2021	228	-	4	80	312
H1-2020	237	-	36	78	351
% change on year	(4)%	-	(89)%	3%	(11)%
TOTALS
H1-2021	1,583	149	6	570	2,308
H1-2020	1,055	93	48	364	1,560
% change on year	50%	60%	(88)%	57%	48%

Overall transaction values were up 48% on H1-2020, driven by a 65% increase in the B2B sector as more customers were on boarded and more products were offered. Unsurprisingly, B2C volumes remained subdued due to travel impediments caused by the Covid-19 pandemic.

Revenues
£000s	International	Corporate	Cash &	Banking	Rebates		Total
	Payments	Expenses	retail	Services	and other
			cards		income
H1-2021
B2B	7,849	2,132	33	1,493	72	11,579
B2C	2,275	-	1,409	1,366	276		5,326
H1-2021	10,124	2,132	1,442	2,859	348		16,905
B2B mix	78%	100%	2%	52%	21%	*68%
H1-2020
B2B	6,242	1,310	230	1,282	177	9,241
B2C	1,991	-	1,229	1,222	89		4,531
H1-2020	8,233	1,310	1,459	2,504	266		13,772
B2B mix	76%	100%	16%	51%	67%	67%
% change on year
B2B	26%	63%	(86)%	16%	(59)%	25%
B2C	14%	-	15%	12%	210%		18%
Aggregate	23%	63%	(1)%	14%	31%		23%

*Excluding fee sweeps in retail cards, underlying B2B:B2C revenue mix was 72%:28%

H1-2021 showed strong B2B growth in transaction volumes and revenues across all product lines of International Payments, the Corporate Spend platform and Banking Services. This growth has accelerated in July, August and September 2021 as the benefits of the own-name IBAN capabilities are feeding through

to Equals Solutions. In contrast, whilst B2C volumes and revenues contracted somewhat, this was against the background of lockdown conditions where Q1-2020 was not affected in the same way.

For H1-2021 in more detail:

Group turnover - representing the quantum of underlying transactions through its platforms, grew by 48% overall and by 65% in the B2B segment.

Group revenues - £16.9 million up 23% (H1-2020: £13.8 million) and within that, the B2B segment grew by 25%. As Covid-19 travel impediments begin to ease, there remains considerable upside, for example in H1-2019, over £6.8 million revenue was earned at an aggregate margin of just over 50%.

When expressed as revenue over turnover, the Group's margin averaged 73 basis points ('bps') against 88 bps in H1-2020. The Board is comfortable with this change, as it had already anticipated the product shift would increase turnover but at a lower margin. This was more evidenced in Banking Services where the aggregate return reduced to 50 bps from 69 bps in H1-2020.

The Equals Spend B2B expense platform, whose customers are corporates, continues to recover strongly from the impact of the pandemic with revenues 63% higher than H1-2020 and 21% higher than H2-2020.

Gross profit - at £10.2 million was up 17% (H1-2020: £8.7 million).

Contribution - (gross profits less marketing expenditure) rose by 24% to £9.8 million (H1-2020: £7.9 million).

Operating expenditure above adjusted EBITDA was £8.2 million, 5% lower than H2-2020(H2-2020: £8.7 million) reflecting the continued cost reduction programme, but 13% higher than the 'furlough- subsidised' H1-2020(H1-2020: £7.3 million).

Current Developments

The trading period post H1-2021to-date has shown further acceleration in revenues with B2B again the driving force and all product lines moving forward strongly. Equals Solutions, which produced £0.3 million of revenues in H1-2021 has contributed £1.2 million in the post H1-2021 period and is primed to grow further as the Group has a strong customer pipeline.

H2-2021 is anticipated to continue in the same strategic direction as the first half with continued investments, (albeit at much lower levels than the peak in 2019), in the technology platform and connectivity to payments networks focussed on the B2B customer. This will be augmented by increased resources applied to sales and marketing to drive new customers on to the platform and products.

Key functionality and platform enhancements are planned for both Equals Money and Equals Solutions as well as the underlying products of Payments, Cards and Banking Services. Operational improvements towards full STP will also be delivered, increasing efficiency, and creating more capacity.

Future plans and opportunities

The strategic direction of the Group remains clearly focussed on the B2B customer segment with Equals Money being targeted at the SME base and Equals Solutions at the larger corporate opportunities. The growth potential, now that we have assembled the core capabilities of own-name IBAN and bank-grade connectivity and clearance, is extremely strong due to the complexity and time required to replicate our capabilities.