Laybuy : Q4 FY22 Quarterly Activities Update and Appendix 4C

ASX ANNOUNCEMENT (ASX: LBY)

28 April 2022

Q4 FY22 Activities Update and Appendix 4C

Laybuy Group Holdings Limited (ASX:LBY) ("Laybuy", the "Company") is pleased to provide its quarterly business activities update and Appendix 4C for the quarter ended 31 March 2022 ("Q4 FY22").

All numbers are stated in New Zealand dollars ("NZ$") and comparisons relate to the quarter ended 31

December 2021 ("Q3 FY22" or quarter on quarter, "QoQ") or the quarter ended 31 March 2021 ("Q4 FY21" or prior comparative period, "PcP"), unless otherwise stated.

Q4 Results Highlights

• ● Quarterly Gross Merchandise Value (GMV) of $203 million, up 26% on PcP, contributing to a full year GMV of $868 million, up 47% on FY21.

• ● United Kingdom (UK) GMV of $124 million in Q4, up 39% on PcP.

• ● Revenue of $12.1 million for Q4, up 23% on PcP, with full year revenue of $47.1 million recorded, up 45% on FY21.

• ● Net Transaction Margin (NTM) improved materially in the month of March, to 1.2% for the Group and 0.2% for the UK.

• ● Positive operating cash flow of $6.3m achieved in Q4 FY22.

• ● Active Customers1 reached 931,000, up 23% on PcP (UK up 32% on PcP).

• ● Active Merchants2 reached 13,700, up 50% on PcP (UK up 112% on PcP).

• ● Over 1,200 merchants added in Q4 including:

  • o Avon Cosmetics, Bershka, Debenhams, Dermalogica, Scotch & Soda, Virgin Atlantic, Optimum Nutrition, Kickers and Urban Outfitters via App Exclusives in the UK

  • o BargainMax, Public Desire, The Fragrance World, Carpet Warehouse, Just Tyres and Terraces Menswear as integrated merchants in the UK

  • o Bridgestone, Tony's Tyre Service, Ticketek (Super Rugby) and Pet.co.nz in Australia and New Zealand (ANZ)

• ● Appointed our Chief Risk Officer, responsible for leading Laybuy's fraud prevention programme and implementing continuous improvement to further advance platform security.

• 1 An 'Active Customer' is a customer who has made a purchase through the Laybuy platform within the 12 months prior to the relevant period.

• 2 An 'Active Merchant' is a merchant who has received payment for a purchase through the Laybuy platform within the 12 months prior to the relevant period.

Laybuy Group Holdings Limited | ARBN 642 138 476 74 Taharoto Road, Takapuna

Managing Director Gary Rohloff commented: "Laybuy continues to deliver solid GMV growth, with quarterly GMV up 26% on the same quarter last year. Our Q4 performance was in line with our expectations, with GMV numbers returning to daily norms after a very strong Q3, which was boosted by the Christmas retail peak period.

The positive operating cash flow of $6.3m for the quarter reflects the seasonality of Laybuy's loan book.

This positive operating cash flow, which was similar to that experienced last year, has allowed Laybuy to take maximum advantage of its debt facilities by enabling the repayment of debt and the minimisation of interest costs.

"The past twelve months has been one of continued steady growth. We have added nearly 5,000 active merchants and over 175,000 new active customers across ANZ and the UK. As a result, Laybuy's GMV in FY22 reached $868 million, an increase of 47% on the prior year, while our revenue has increased 45% to reach $47.1 million. As part of our path to profitability, we have made the conscious decision to refocus our efforts on sustainable, responsible growth, improving our NTM and further reducing our credit risk exposure during this calendar year. These initiatives, coupled with increased caution around our cost base, will ensure we are delivering ongoing value.

"Pleasingly, our strategic focus on the UK market is continuing to deliver, with UK GMV up 39% this quarter to reach $124 million. This is being driven by ongoing strong growth in UK merchant numbers, which were up 112% year-on-year, while UK customer numbers were up nearly a third during the same period.

"The UK market continues to present strong opportunities for growth. Its retail market is more than twice the size of the Australasian market and, while BNPL is growing rapidly, it is still in its infancy relative to the more mature Australasian market. As an early mover into the UK, we have successfully captured market share and are well positioned to take advantage of future growth opportunities, particularly as some late-entry BNPL operators exit this market.

"While our NTM has been impacted by higher than anticipated fraud levels in the second half of the financial year, action taken by management to better manage fraud has already resulted in an improvement. We have acted swiftly and rolled out a number of initiatives, which has seen NTM return to 1.2% in March following negative NTM being recorded in the first two months of the quarter.

"To further reduce fraud, we have appointed an experienced Chief Risk Officer, who will be responsible for implementing Laybuy's fraud prevention strategy and introducing further fraud prevention and credit

risk management initiatives. We are confident that with ongoing prudent management and a well resourced team focused on the fraud and credit risk issue, NTM will continue to improve over the coming months.

"In the year ahead, our strategy will be ensuring sustainable growth and revenue from quality customers as part of our drive towards profitability. This means taking a more considered approach to growth and ensuring activities are focussed on improving revenue and lifting NTM."

Key Operating and Financial Metrics

The table below presents the Laybuy Group's (the "Group's") key operational metrics for Q4 FY22 as compared to Q3 FY22 (QoQ) and Q4 FY21 (PcP), which have been prepared based on unaudited results.

Group (NZ$'m)3

Q4 FY22

Q3 FY22

Q4 FY21

% increase

QoQ

% increase

PcP

GMV

$203m

$275m

$161m

(26%)

Annualised GMV4 Active Customers Active Merchants Income

$811m

$1,100m

$645m

(26%)

931,000

930,000

756,000

-

13,700

12,900

9,126

6%

50%

Net Transaction Margin (NTM) as % of GMV

$13.5m

(11%)

0.0%

(50bps)

Gross Losses as % of GMV UK (NZ$'m)

(4.9%)

(4.0%)

(2.1%)

(90bps)

(280bps)

GMV Annualised GMV Active Customers Active Merchants ANZ (NZ$'m)

$124m $496m 609,500 3,800

$170m $678m 606,000 3,400

$89m $358m 463,000 1,785

(27%) (27%) 1% 12%

39% 39% 32% 112%

GMV Annualised GMV Active Customers Active Merchants

$79m $315m 322,000 9,900

$105m $421m 324,000 9,500

$72m $287m 293,000 7,300

(25%) (25%) (1%) 4%

9% 9% 12% 35%

• 3 FX rates used to calculate UK/AU results to NZD equivalent: converted NZD/GBP at 0.51 and NZD/AUD at 0.93 for Q4 FY22

• 4 Annualised GMV equals the quarter GMV multiplied by four.

Auckland, New Zealand Laybuy.com

Gross Merchandise Value (GMV)

Annualised quarterly GMV (NZ$m)
26 30 36 34 43 49	103 121 146 135 174 194
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4	Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
FY19 FY19 FY19 FY19 FY20FY20 FY20 FY20 FY21 FY21 FY21 FY21 FY22 FY22 FY22 FY22	FY19 FY19 FY19 FY19 FY20FY20 FY20 FY20 FY21 FY21 FY21 FY21 FY22 FY22 FY22 FY22
Key Highlights:

Quarterly GMV by region (NZ$m)

• ● Steady growth continued in Q4 FY22, with Laybuy reporting $203 million of GMV, up 26% on the same period last year. The UK GMV was up 39% on PcP.

• ● This follows an exceptionally strong GMV in Q3 which was boosted by seasonal trading over the holiday period, with Q4 GMV being similar to that recorded for the prior quarter.

• ● Full year GMV reached $868 million, up 47% on FY21.

Active Customers and Merchants

Active Customers by region ('000) UKNZ & AU 889 930 931 829 756 687 568 473 405 316 253 118 147 171 196 224 Q1 FY19Q3 FY19Q1 FY20Q3 FY20Q1 FY21Q3 FY21Q1 FY22Q3 FY22

Active Merchants by region ('000) UKNZ & AU 12.913.7 11.7 10.4 9.1 8.0 5.7 6.3 3.7 4.3 4.9 5.2 1.5 2.0 2.6 3.2 Q1 FY19Q3 FY19Q1 FY20Q3 FY20Q1 FY21Q3 FY21Q1 FY22Q3 FY22

Key highlights:

• ● Active customers increased to 931,000 at the end of March, reflecting management's efforts in tightening credit and fraud risk management threshold.

• ● Over 1,200 new merchants have gone live in Q4.

• ● Active merchants increased significantly in the UK, up 112% on the prior year with more than 400 merchants now active via App Exclusives.

Regional performance Laybuy UK

UK GMV (£m)

UK Active Customers ('000)

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY20 FY20 FY20 FY20 FY21 FY21 FY21 FY21 FY22 FY22 FY22 FY22

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY20 FY20 FY20 FY20 FY21 FY21 FY21 FY21 FY22 FY22 FY22 FY22

UK Active Merchants

3,800

3,400

2,900

2,314

1,785

1,264

442 676

90

149 240 335

Q1

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

FY20 FY20 FY20 FY20 FY21 FY21 FY21 FY21 FY22 FY22 FY22 FY22

Key highlights:

• ● Strong growth in the UK was supported by an increase of 112% in active merchants and 32% in active customers compared to Q4 FY21.

• ● Over 600 new merchants added in the UK during Q4 including Avon Cosmetics, Bershka, Debenhams, Dermalogica, Scotch & Soda, Virgin Atlantic, Optimum Nutrition, Kickers and Urban Outfitters via App Exclusives as well as direct integrated merchants BargainMax, Public Desire, The Fragrance World, Carpet Warehouse, Just Tyres and Terraces Menswear.

• ● Laybuy's "card technology" continues to power UK growth, with Q4 GMV achieved through Tap to Pay remaining as strong as the traditional peak December quarter. Laybuy's virtual card also continued to show strong growth, with more than 1,000,000 orders through Laybuy App Exclusives since its launch in late August 2021.

• ● UK active customers saw more limited growth as the Group focuses attention on retaining quality customers.

Laybuy Group Holdings Limited | ARBN 642 138 476 74 Taharoto Road, Takapuna