Harmoney Corp Limited. Annual meeting of onlyshareholders.

useChairman's introduction (Paul Lahiff)

Good morning and thank you for joining Harmoney's Annual Meeting of Shareholders, our first as a listed company, following our IPO on the ASX and NZX in November 2020. My name is Paul Lahiff and I am the recently appointed Chair of Harmoney.

Firstly, I would like to take this opportunity to acknowledge the contribution of David Flacks as personalChairman over the last five years. He was instrumental in guiding the board and management through

the IPO process and has provided wise counsel to the management team and his fellow board members. I am particularly grateful for David's support as I have moved into the Chair role. Thank you, David.

I would also like to take this time to introduce the other board members and management team of Harmoney. With us this morning we have Tracey Jones, Independent Director; Neil Roberts, Director and Founder and David Stevens, Managing Director and Chief Executive Officer. We also have present with us this morning Simon Ward our Chief Financial Officer and our General Counsel, Mike Travis.

This has been a transformational year for Harmoney and the board and management have navigated this transition with skill, confidence and determination. In the last year, Harmoney has made significant progress, with the IPO providing the necessary funds for our growth and expansion of our 100% consumer-direct platform into Australia alongside continuing investment in New Zealand.

We are the only 100% consumer-direct personal lender operating across both Australia and New ForZealand. Our key point of difference is that we provide customers with unsecured personal loans that

are fast, easy, competitively priced (using risk-adjusted interest rates) and accessed 100% online. By not using intermediary brokers, we achieve higher margins and can generate repeat business at minimal additional cost.

For Financial Year 2021, Harmoney delivered solid results, in what was a challenging operating environment, with a pro forma Cash net loss after tax of $0.4 million versus the prior year of $2.8 million profit. This decrease was largely driven by the strategic investment in our marketing initiatives and overheads associated with our rapid expansion in the Australian market as flagged at the IPO. The management team have been focused on propelling the business forward, leveraging the IPO funds to invest appropriately in increased personnel, mainly in developers for our proprietary Stellare® platform, and on brand awareness within Australia. These funds have also been used to transition

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Harmoney's funding from expensive peer-to-peer funding to our own less expensive warehouse funding.

The strategic decision to invest now for future growth has positioned Harmoney well as we progress through this financial year with a strong loan portfolio, decreasing cost of capital through our warehouse financing, and consistently strong volumes of new loans. We have a very positive growth trajectory and while the shockwaves of the pandemic have created massive challenges for both the domestic and global economies, it has also rapidly accelerated consumers' online adoption across all categories. This bodes well for Harmoney as we continue to see a consumer trend of abandonment of traditional banks for fast, simple, online personal lending. As we further expand Harmoney's presence and brand awareness in Australia from 2022 onwards, we see significant opportunities to benefit from this trend and our presence in Australia.

An important element to our approach to growing Harmoney has been the development of robust governance frameworks. This is critical as we grow in scale and geographical reach without hindering innovation, speed and agility.

I am proud of the way the company has executed its plan and strategy since listing. We are excited about the growth potential ahead of us and we will continue our focus on balanced business fundamentals to support long-term growth.

Once again, thank you to my fellow board members, our CEO David Stevens and all of our employees at Harmoney for their contribution to our success in a transformational year for the business. I would also like to thank our shareholders and broader stakeholders for their ongoing support of Harmoney. We look forward to continuing to deliver against our strategy and demonstrating the advantages of our 100% consumer-direct lending structure.

CEO's address (David Stevens)

Thanks Paul, and thank you to everyone for attending our 2021 Annual Meeting of Shareholders. I would like to start by acknowledging the entire Harmoney team for the enormous effort and commitment they showed in achieving the IPO and delivering strong results despite a challenging operating environment.

This past financial year has been a pivotal year for the company as Paul outlined in his speech. The transition from private ownership to a public listing is a huge moment for any company. Harmoney's dual listing on the ASX and NZX last November was the next step in our continuing expansion, all the more significant because it occurred against the backdrop of an ongoing global pandemic.

Our focus post-IPO has been expanding our Australian business, accelerating our transition to our warehouse funding, and building up our engineering and data science teams to further improve our conversion rates of accounts to new loan customers using Harmoney's unique 100% direct-to- consumer model.

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Slide 2

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Firstly, let me reiterate Harmoney's key differentiators and advantages, strengthened by our 100% online consumer-direct model.

  • We have a solid revenue base and loan book providing a strong platform for future growth. Additionally, we have a track record of delivering growth in originations and all of this at high margins.
  • We are in a high growth phase in Australia as we establish our presence, and we continue to leverage our market leading position in New Zealand.
  • We are focused on product innovation enhanced by leveraging our big data acquired through our Libra™ platform.
  • We have a strong funding base, with funding from two of the Big 4 banks. We also recently put in place an ABS program in Australia which is having a positive impact on our cost of funds and has halved the capital required in our structures. We are well-placed to continue to benefit from this and are also exploring a NZ securitisation for the New Year.
  • Our Stellare® platform empowers our business and is at the cornerstone of our success. Stellare® leverages artificial intelligence and machine learning to automate the loan process and improve the outcomes for Harmoney and our customers.
  • Stellare® allows us to keep our fixed costs flat and grow our loan book at minimal additional costs.
  • Customer retention is critical to our success with on average every customer taking 2 loans with us at no additional acquisition cost to Harmoney.
  • And finally, we have a highly experienced team across all facets of the business. With deep experience across consumer and commercial finance, our team have been a driving force for our success over this past year and prior to listing as well.

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Slide 3

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Harmoney has evolved over the years, starting as a peer-to-peer lender, and has responded to the changing needs of our consumers whilst providing strong returns for our shareholders. Since IPO you can see that we have accelerated our growth by having access to increased capital in the business. Within the last 12 months we have grown to $2.4bn in lending, delivered our highest month ever in originations in July, launched our Libra™ scorecard and significantly increased our engineering team to drive further growth and product innovation.

Slide 4

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As previously highlighted, our three key metrics for our business our outlined on this slide. These three metrics are the key drivers to rapid growth in our business:

  • First, account acquisition shows our ability to attract customers to Harmoney;

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  • Next, originations show our ability to write new loans to those customers; and
  • Finally, our margins represent our underlying profitability.

Stepping through these in little more detail, Harmoney is an account acquisition machine, and the first graph shows this. It demonstrates our ability to convert leads into engaged potential customers and do that at scale. It plays a critical role in powering the Harmoney growth flywheel.

I am pleased to report strong customer account growth with an average of 10,000 new accounts for each month in calendar 2021. We already have over 700,000 accounts and have enjoyed a 51% compound annual growth rate since launching in August 2014. Where accounts mark the start of a customer's relationship with Harmoney, originations demonstrate a unique ability to help people find the loan that's right for them.

We have driven Australian growth of 260% in new customer originations in the last half. Our ground- breaking behavioural score card, Libra™ has also doubled our conversion rate, delivering higher returns on each dollar spent on marketing.

The last of these metrics are our net interest margin and net lending margin, which reflect the quality of our portfolio and the strength of our 3R's retention program. 3R's supports customers that are returning for a new loan or repeating or renewing an existing loan. Taken together, these key metrics clearly show Harmoney experiencing rapid growth.

Slide 5

Looking back on our results for FY21, this year was a tale of two halves. During the first half, in response to the uncertainty of early COVID-19, tightened credit criteria and marketing expenditure

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Harmoney Corporation Ltd. published this content on 29 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 November 2021 00:59:08 UTC.