Harmoney Corp Ltd · ASX:HMY
Harmoney — Shareholder Meeting (November 2021)
20 slides from Harmoney's shareholder meeting presentation, Nov 29, 2021
Slide 1: Harmoney Corp Limited Annual Meeting of Shareholders
Harmoney Corp Limited. Annual meeting of shareholders. Chairman’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 rec
Slide 2: CEO's address
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 ware
Slide 3: Key differentiators and advantages
Slide 2 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 origination
Slide 4: Harmoney's evolution and growth
Slide 3 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 busine
Slide 5: Our three key metrics
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; • Next, originations show our ability to write new l
Slide 6: FY21 originations and results
slowed originations. Even so, our execution prior to that led to first half FY21 originations of $194 million, which was a 29% increase on the prior half. As economic conditions improved and marketing returned to normal levels our second half FY21 originations reached $250 million, a further 29% inc
Slide 7: Funding capacity and cost of funds
Slide 7 We have significant capacity to fund expansion, and as at 31 October 21 we had $220 million in undrawn capacity provided by 2 of the Big 4 Banks. In October we announced our inaugural $105 million ABS transaction and prior to this in January 2021, a UK-based global insurer provided our secon
Slide 8: FY22 guidance
Slide 8 Our guidance for FY22 remains unchanged with group loan book surpassing $600million, an increase of at least 20%. Group pro forma revenue surpassing 92 million, an increase of at least 16%. Net lending margin, exceeding 7% and affects the pro forma revenue ratio below 20%. We're also forecas
Slide 9: Indicative $1bn loan book model
This indicative model shows you what our business looks like at an average $1bn loan book. With the scalability of our business model and low customer acquisition costs, we can see the value of this model, delivering significant returns for the business and ultimately for our shareholders. With our
Slide 10: Annual Meeting of Shareholders
Annual Meeting of Shareholders Monday 29 November 2021 HARMONEY © 2021 Annual Meeting of Shareholders 2021 29 November 2021 1
Slide 11: Executive summary
Executive summary Harmoney is the largest 100% online consumer-direct lender across Australia & New Zealand 1 2 3 4 Compelling Fundamentals Strong Market Position Credit Product Innovation Warehousing & Securitisation Attractive revenue profile, loan book, Established presence in New Zealand Opportun
Slide 12: Harmoney's growth evolution
NOV 2020 Harmoney’s growth evolution IPO IPO on the ASX & NZX raising AU$70m. JUL 2014 AUG 2015 FEB 2017 NOV 2018 SEP 2019 MAR 2021 First P2P licence in NZ granted by the FMA to $100m Loaned in under 12 months. Australia $1.0b $1.5b $2.0b Harmoney. Loaned to date. Loaned to date. Brisbane pilot laun
Slide 13: Rapid growth across all key business metrics
Rapid growth across all key business metrics 1. Account acquisition 2. New loan originations 3. Superior net margins 260% 51% NEW CUSTOMER ORIGINATIONS IN AU CAGR Powerful consumer-direct acquisition engine. Over 724k High growth of new customer originations in Australia Superior net interest margin
Slide 14: Largest 100% online consumer-direct personal lender across Australia & New Zealand
Largest 100% online consumer-direct personal lender across Australia & New Zealand Customer Team FY21 key metrics 83 Net promoter score 75 FTEs (Auckland & Sydney) $79m FY21 pro-forma revenue 4.8/5 Average rating >50% FTEs are engineers, product $501m Loan book at 30 June 21 managers and data scient
Slide 15: Why 100% consumer-direct wins
Why 100% consumer-direct wins Consumer-direct market tailwinds Deep Consumer High Lower Data Lower Lower Fixed = Funding = Shareholder + CAC Losses Opex Automation Costs Returns Growth opportunities of consumer-direct model Current personal loan Other financial products Home loans HARMONEY © 2021 Ann
Slide 16: Libra's accuracy rewarded with funding diversity, lower cost of funds
Libra’s accuracy rewarded with funding diversity, lower cost of funds and increased return on equity Successful inaugural securitisation Significant cost of funds reduction ● Consistent loss rates have attracted top tier funding, with 8% Harmoney funders including two of the ‘Big 4’ banks. ● A$105m s
Slide 17: FY22 Market guidance
FY22 Market guidance FY21A FY22F Change Group loan book $501M >$600M >20% Group revenue $79M >$92M >16% Net lending margin 6.8% >7% >0.2% Opex* to revenue 22% <20% >-2% Harmoney forecasts its transition to warehouse funding to be ~90% complete by 30 June 2022. FY21 and FY22 based on pro forma financi
Slide 18: $1billion average book expected to generate ~$45m Cash EBITDA
$1billion average book is expected to generate ~$45m Cash EBITDA Indicative model Cash EBITDA $60m FY21 At $1b Average Book ~% Avg $m ~$m Book Revenue 79 160 16% $45m $40m Net lending margin 33 100 10% Marketing opex 16 30 3% Fixed opex 21 25 2.5% 45x Normalisation (4) - - $20m Cash EBITDA 0 45 4.5%
Slide 19: Harmoney's growth engine - three areas of focus
Harmoney’s growth engine - three areas of focus 1. Australian expansion 2. AU/NZ conversion gains 3. Enhanced & new products New New initiatives products Dynamic limits Enhanced 9x NZ Libra 1.7 7 year term AU co-borrower loan offers / 1.8 Improving conversion rate ● Australian ‘personal loan’ ● Majo
Slide 20: Important notice and disclaimer
Important notice and disclaimer The material in this presentation is provided for general information purposes No representation or warranty, express or implied, is made as to the fairness, only and is current as at the date of this presentation. It is not a prospectus or completeness, accuracy, ade