SelfWealth : Quarterly Activities Report and Appendix 4C

Q4 4C Report

July 2022

For personal use only

ACN 154 324 428

Selfwealth Ltd

130ACN Lonsdale154 324 428 Street, Melbourne VIC 3000

130 Lonsdale Street, Melbourne VIC 3000

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For personal use only

Quarterly Activities Report

Strong quarterly revenue growth underpinned by diversified revenue streams. Selfwealth demonstrates robust business model and continues its transformation to become the leading retail wealth management platform.

Key Highlights

• Near record quarterly revenue: Operating revenue increased 7% quarter-on-quarter to $5.7m, building on the 6% quarter-on-quarter revenue growth in Q3 FY22.
• Positive customer growth: Net new Active Traders1 up 2% quarter-on-quarter to 125,944.
• Cash balances remain high: Cash balances on the platform maintained peak levels at $736m.
• Diversified revenue streams: In Q4, a higher net interest margin, subscription revenue and new asset classes, underpinned sustainable revenue growth and will accelerate the pathway back to profitability.
• Brand refresh: Reinforce positioning as an innovative wealth creation platform, distinct from competitors.
• Fully funded to execute on organic growth strategy: A laser focus on innovation to deliver the greatest return on investment.
• Crypto built and tested on platform, regulatory approvals in place: Remaining on track to be the first Australian retail broker to offer crypto and shares on the one platform, Client launch is imminent.

Market conditions

• Cash levels high, trading volumes down: The significant move to cash from equities in Q3, contributed to a significant spike in cash on the Selfwealth platform. Selfwealth clients continued to have high cash balances during Q4 in a sign of continued caution around the short- term investment outlook. Retail investor confidence is low and market sentiment remains weak, this contributed to lower trading volumes on the Selfwealth platform in Q4 vs Q3.
• Net interest margin rebounds: The acceleration of interest rate rises by the RBA has led to an increase in Selfwealth's net interest margin on cash. Selfwealth anticipates benefiting from annualised revenue uplift associated with recent interest rate rises. The net interest margin is returning to normal levels seen before the monetary policy easing cycle experienced prior to and throughout the Covid pandemic.
• Robust business model through the cycle: We have now experienced six months of subdued trading activity in line with the overall retail trading market. Most equity markets globally have entered a bear market cycle however Selfwealth continued to increase active trader numbers in Q4 and grew top line revenue to near record levels, demonstrating the sustainability of
  Selfwealth's business model throughout various economic cycles.

1. Active Traders are portfolios that are ready to trade, with cash and/or equities in their portfolio
   Selfwealth Ltd ACN 154 324 428

1. Lonsdale Street, Melbourne VIC 3000

2

For personal use only

Melbourne, Australia - 12th July 2022: Selfwealth Ltd (ASX:SWF) ("Selfwealth" or "the Company") has released its Q4 FY22 Quarterly Cash Flow and Activities Report.

Selfwealth Managing Director and CEO Cath Whitaker comments, "I am very pleased with the performance of the business over the past year, particularly delivering solid revenue growth over the past six months in difficult market conditions, as we transition from a 'cheap' ASX trading platform to a leading retail wealth management platform. The strong underlying revenue performance, despite falling retail trade volumes, validates the strength of our business model and our strategy to continue diversifying revenue streams through the cycle.

We have now passed the halfway mark of our transformation program with a long list of achievements including our brand refresh, the focus on independent thought leadership, the launch of minor accounts, launch of Hong Kong trading, facilitating instant deposits, providing ESG data, as well as the imminent launch of crypto. We continue to have a laser focus on the ROI on our investment to ensure that we continue to progress on the pathway back to profitability."

Key Financial Metrics

	Q4 FY21	Q3 FY22	Q4 FY22	YOY Change
Operating Revenue (m)	$5.10	$5.37	$5.74	13%
Active Traders	95,189	123,523	125,944	32%
Client Cash (m)	$523	$744	$736	41%
Securities Held on HIN (bn)	$5.86	$8.18	$7.17	22%
Operating Revenue by Quarter ('000)	Active Trader Growth by Quarter

In Q4 FY22, operating revenue increased by 7% quarter-on-quarter to $5.7m, and Active Traders increased by 2% to 125,944. This was a strong result, given the subdued trading activity across the retail investor market and a slowdown in numbers of people actively searching for online trading accounts during this significant downturn in equity markets.

Selfwealth Ltd

ACN 154 324 428

130 Lonsdale Street, Melbourne VIC 3000

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Total Securities Held on HIN ($B)

Total Client Cash AUD Holdings2 ($m)

For personal use only

The value of assets held on HIN, declined by 12% in Q4 to $7.2 billion, in line with the weakness in the Australian equities market. The total funds under management (FUM) on the platform, including cash and International holdings, decreased by 12% to $8.2 billion, again in line with the weakness in the equities markets.

Cash balances on the platform remained high at $736m, which indicates ongoing caution and weak retail sentiment. High cash balances and an average portfolio value of $65k ensures that the Selfwealth customer base has future capacity for further investment in equities and other asset classes as they become available on the platform.

Brand Refresh

In May 2022, Selfwealth launched its first ever brand refresh, repositioning the Company as a wealth creation platform, transitioning from a "cheap" ASX transactional platform.

The brand is reflective of Selfwealth's deep insights of our existing client community and our aspirational client acquisition plans. The brand refresh establishes a new visual identity and logo beyond the company name to increase awareness among an increasingly diverse set of modern investors.

Ongoing Product Innovation

Selfwealth continues to be Australia's leading innovator in retail wealth management, with deployment of new asset classes, increasing subscription revenue, and higher net interest margin validating its sustainable business model.

Cryptocurrency capabilities are built, with both testing and regulatory approvals finalised for imminent launch; HKEX trading launched in Q4 and consistent growth in adoption rates indicates many customers are ready to take advantage of China's post-lockdown economy; and a refreshed subscription model allowing customers to benefit from real-time price fluctuations drove strong revenue growth.

After an aggressive initial phase of transformation, accomplishments allow for sharper, customer- first product focus. Selfwealth is now catering even more to customer requests and is increasing and

2 AUD Holdings include cash held in Australian denomination bank accounts

Selfwealth Ltd

ACN 154 324 428

130 Lonsdale Street, Melbourne VIC 3000

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For personal use only

specialising education and content offerings around HKEX and crypto following customer survey results.

Focus now turns to improving mobile app functionality and experience plus adding additional asset types.

Balance Sheet & Cashflow

The quarterly cash outflow from operating activities was $1.8m for the June quarter. This reflected some one-off corporate costs including the EGM in May 2022 as well as the brand launch. The company is optimistic that its diversified revenue streams and ongoing new product launches will contribute to further improvement in cashflow in the coming quarters.

In Q4, salaries were $2.8m, up from $2.7m in Q3. Over the past year, we have invested in three key areas: product, IT and marketing. This investment in internal capability has enabled us to deliver new asset classes and continued growth in Active Traders. We now have sufficient internal capacity to deliver on our transformation program with staff numbers to remain approximately at current levels for the foreseeable future.

Cash and cash equivalents at the end of the quarter were $11.5m and the Company is fully funded to execute on its organic growth strategy. Selfwealth continues to have no outstanding debt.

In accordance with listing rule 4.7C, payments made to related parties and their associates, including in items 6.1 of Appendix 4C incorporate the Director's fees, remuneration and superannuation at commercial rates.

The Board of Selfwealth Ltd has authorised the release of this announcement to the market.

Shareholder or Investor Enquiries

Cath Whitaker, CEO & Managing Director [e-mail]

Marketing or Media Enquiries Rob Marfell, Head of [e-mail]

Selfwealth Ltd

ACN 154 324 428

130 Lonsdale Street, Melbourne VIC 3000

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