Moneyme Ltd. · ASX:MME
Moneyme — H1 2023 Earnings Presentation
46 slides from Moneyme's earnings presentation, Feb 28, 2023
Slide 1: Investor Presentation: 1H23 Results | Strategy & Outlook
Investor Presentation 1H23 Results | Strategy & Outlook 28 February 2023 moneyme.com.au Copyright 2023 | MONEYME Limited | ACN 636 747 414 | Australian Credit Licence Number 442218
Slide 2: To be the #1 challenger to the banks
OUR MISSION To be the #1 challenger to the banks MONEYME is a founder-led1 digital non-bank lender. We don’t do paperwork, ATMs or brick and mortar stores. We know today’s digitally savvy consumers don’t have time for outdated processes, so we create innovative, app-first financial products that mee
Slide 3: MONEYME Board of Directors
MONEYME Board of Directors The Board of Directors includes two founders and leaders with significant experience across the technology and finance sectors, and expertise in innovation, customer experience and brand management. Peter Coad Clayton Howes Independent Non-Executive Chair Managing Director
Slide 4: 1H23 highlights
03 1H23 highlights 05 Operational highlights 13 Financial highlights 24 30 Strategy & outlook Appendix 1H23 highlights Page 3 | MONEYME
Slide 5: 1H23 highlights
$9m $1m 46% $0m 38% 40% 35% ($8m) Accelerated 23% $9m NPAT operating leverage1 ($50m) FY19 FY20 FY21 FY22 1H23 FY19 FY20 FY21 FY22 1H23 Interactive Autopay feature, allowing consumers to: 714 704 • Self-start their Autopay loan Further improved 1H23 highlights credit quality2 of loan book 620 635 65
Slide 6: Operational highlights
03 1H23 highlights 05 Operational highlights 13 Financial highlights 24 30 Strategy & outlook Appendix Operational highlights Page 5 | MONEYME
Slide 7: Operational highlights
Operational highlights MONEYME quickly responded to macroeconomic headwinds while continuing to progress ESG and innovation Responded to adverse market B Corp application & Continued product operating conditions ESG achievements innovation • Stepping up operating leverage for cash optimisation • Imp
Slide 8: Actively managing interest rate movements
Responded to adverse market operating conditions Actively managing Interest rate calibration timeline interest rate RBA rate changes Change: +0.25% Change: +0.50% Change: +0.50% Change: +0.50% Change: +0.50% Change: +0.25% Change: +0.25% Change: +0.25% movements May Jun Jul Aug Sep Oct Nov Dec 2022
Slide 9: Increased credit quality of portfolio
Responded to adverse market operating conditions Increased credit Average Equifax score vs. Equifax cohort % for each half-year period: quality of portfolio Total portfolio Front book1 only Average Equifax score Average Equifax score 800 200% 800 200% 800 and above 800 and above 779 700 to 799 700 t
Slide 10: Lower risk from portfolio diversification
Responded to adverse market operating conditions Lower risk from Geographical spread broadly aligned with Australian population1 Median customer age of 35 portfolio Other 18 to 25 10% diversification NSW 30% 12% WA 51+ 10% 55% • Strong customer base diversification across all geographic, demographic
Slide 11: High customer engagement
Responded to adverse market operating conditions 0 High customer 85% -100 59 NPS +100 Net Promoter Score (NPS)2 Rating3 engagement Calls answered within 10 seconds +59 MONEYME MONEYME continues its strong customer satisfaction and engagement levels despite the rising interest rates 39% 4.7/5 MONEYME
Slide 12: Sustainability update
Sustainability update We applied for B Corp Certification in 1H23 and our self-assessed B Impact Assessment (BIA) score is 93.2 as of 31 December 2022 Governance Total self-assessed BIA score 20.0 Governance ↑117% 1H22 to 1H23 9.2 12.0 • Amended our Constitution for the sake of society and the envir
Slide 13: Ongoing product innovations and optimisations
Ongoing product innovations and optimisations Autoscan innovation piloted App-based free credit score service Another industry-disrupting innovation, giving launched consumers more control and autonomy of their auto • Enables customers to gain a better financing needs by allowing them to: understand
Slide 14: Financial highlights
03 1H23 highlights 05 Operational highlights 13 Financial highlights 24 30 Strategy & outlook Appendix Financial highlights Page 13 | MONEYME
Slide 15: Return to statutory profit accelerated
Return to statutory profit accelerated Already achieved $9m profit in first half of FY23 Statutory NPAT ($m) Gross revenue ($m) Average cost of funds (%) 121 95 147% 152% 22% 1H22 to 1H23 1H22 to 1H23 1H22 to 1H23 6.5% 9 48 5.3% 5.5% 0 1 (8) 1H22 2H22 1H23 1H22 2H22 1H23 (19) Impairment expenses ($m
Slide 16: Significant revenue growth
Significant revenue growth Driven by loan book growth, risk-adjusted customer pricing, and increased returns from secured assets Gross revenue vs. contracted revenue1 ($m) Revenue yield (%) – unsecured vs. secured • Significant increase in gross revenue reflects strong organic and acquired growth, a
Slide 17: Market-driven funding cost increases
Market-driven funding cost increases The Group’s average cost of funds increased from 5.3% in 1H22 to 6.5% in 1H23 Average cost of funds (%) Base rate vs. marginal cost of funds (%) • MONEYME’s cost of funds increased from an average of 5.3% in 1H22 to 6.5% in 1H23, driven by RBA cash rate increases
Slide 18: Materially lower impairment expense
Materially lower impairment expense Driven by the transition to a higher credit quality loan book and lower upfront provision needs Impairment expense ($m) Average Equifax profile The lower impairment expense in 1H23 as compared to 2H22 is driven by: Weighted average 750 • A significant improvement
Slide 19: Significant operating leverage
Significant operating leverage Driven by economies of scale, SocietyOne cost synergies, and cost optimisation Net revenue1 vs. total operating expenses Office operating costs2 to revenue ($m) • Synergy benefits through the acquisition of SocietyOne delivered greater than $20m of annualised operating
Slide 20: Increasing net assets
Increasing net assets Total cash position vs. unrestricted Average customer receivables (%) Net assets ($m) cash ($m) 1,291 81 79 68 968 122 17% 180% 4x 1H22 to 1H23 1H22 to 1H23 1H22 to 1H23 (Total cash) 461 Unrestricted cash 91 23 16 portion of total cash 14 1H22 2H22 1H23 1H22 2H22 1H23 Borrowing
Slide 21: Cash at bank remains flat
Cash at bank remains flat Cash from operating activities increased to $73m in 1H23 from $32m in 1H22 Cash position ($m) – unrestricted vs. restricted Cash from operating activities ($m) • Consolidated cash was stable at $79m in 1H23 • Unrestricted cash was stable at $16m in 17% 126% 1H23 1H22 to 1H2
Slide 22: 1.8x growth in average book balance
1.8x growth in average book balance The average book balance growth to $1.3b in 1H23 reflects the record originations in 2H22 and the acquisition of SocietyOne in 2H22. 1H23 originations reflect the business decision to moderate growth. Average gross customer receivables ($m) Closing gross customer
Slide 23: Provision maintained at 6.1% for 1H23
Provision maintained at 6.1% for 1H23 Loan book provision reflects improving credit quality receivables offset by adverse macroeconomic environment Provision as % of loan book Provisioning – Front book vs. back book split % • Maintained provisioning at 6.1% in 1H23 • The provisioning rate reflects a
Slide 24: Strong funding program maintained
Strong funding program maintained Debt capital drawn ($m) Number of funding structures • Total borrowings reduced in 1H23 compared to 2H22 driven by the reduction in customer receivables Corporate debt facility 1,344 8 8 Term structures 75 XX% 2x • Undrawn securitisation facility funding was Warehou
Slide 25: Strategy & outlook
03 1H23 highlights 05 Operational highlights 13 Financial highlights 24 30 Strategy & outlook Appendix Strategy & outlook Page 24 | MONEYME
Slide 26: Products targeting significant market opportunities
Products targeting significant market opportunities Market size Where the opportunity is? Why the market opportunity exists? Personal loans Traditional providers often Major banks have some or many of the $31b 1-2% limitations below (balance outstanding)1 MME segment share • Incumbents core focus on
Slide 27: Our key areas of focus
Our key areas of focus Strategic capital initiative Revenue and profit Progress implementation of the strategic capital Strengthen our balance sheet through a initiative to unlock significant market growth continued statutory profit focus. FY23 gross opportunities and restore SFA to original $50m re
Slide 28: We're on our way…
We’re on our way… To be the #1 challenger to the banks Leading with innovation, speed, and digital experiences Page 27 | MONEYME
Slide 29: Questions & Answers
MONEYME Questions & Answers
Slide 30: Thank you
Thank you On behalf of all at MONEYME
Slide 31: Appendix
03 1H23 highlights 05 Operational highlights 13 Financial highlights 24 Strategy & outlook 30 Appendix Appendix Page 30 | MONEYME
Slide 32: Key operating measures
Key operating measures FY20 FY21 FY22 Definition1 1H22 2H22 1H23 Returns 48 58 143 Gross revenue ($m) 48 95 121 49% 21% 148% Gross revenue growth (%) 43% 98% 27% 29 98 398 Future contracted cash interest ($m) 1 178 398 395 1 (8) (50) Statutory NPAT ($m) (19) (32) 9 10 12 20 Cash NPAT ($m) 2 10 10 11
Slide 33: Measure definitions
Measure definitions Note Measure Definition The sum of the total amount of interest payable by each customer receivable over the remaining life of the customer receivabl e contract (i.e. from 1 July onwards to its maturity) 1 Future contracted cash interest ($m) based on simple interest on principal
Slide 34: Income statement
Income statement FY20 FY21 FY22 $ million 1H22 2H22 1H23 43 53 128 Interest income 45 83 119 5 5 15 Other income 3 12 2 48 58 143 Gross revenue 48 95 121 - (0) (2) Commission expense (0) (2) (2) 48 58 141 Net revenue 48 93 119 (13) (11) (38) Interest expense (12) (27) (42) (5) (10) (22) Sales & mark
Slide 35: Statutory NPAT to Cash NPAT reconciliation
Statutory NPAT to Cash NPAT reconciliation FY20 FY21 FY22 $ million 1H22 2H22 1H23 1 (8) (50) Statutory net profit/(loss) after tax (19) (32) 9 16 29 103 AASB 9 impairment expense adjustment 37 65 46 (9) (11) (45) Gross losses adjustment (15) (30) (48) Non-recurring adjustments - - 14 SocietyOne acq
Slide 36: Balance sheet
Balance sheet FY20 FY21 FY22 $ million 1H22 2H22 1H23 35 26 81 Cash and cash equivalents 68 81 79 121 306 1,264 Net customer receivables 546 1,264 1,161 - 0 0 Current tax asset 0 0 - 4 6 3 Deferred tax asset 6 3 3 - - 10 Derivative financial instruments - 10 10 2 3 36 Intangible assets 4 36 35 2 1 3
Slide 37: Cash flow statement
Cash flow statement FY20 FY21 FY22 $ million 1H22 2H22 1H23 47 66 116 Income from customers 43 73 101 (16) (24) (51) Payments to suppliers and employees (16) (35) (39) - - 14 Income from delinquent asset sales and recoveries 5 9 11 (0) (2) - Income tax refund received - - 0 31 40 79 Net cash inflows
Slide 38: MONEYME's products
MONEYME’s products1 CURRENT PRODUCTS LATEST PRODUCTS PRODUCTS NOT IN FOCUS Personal Loan Personal Loan Spend and Save Freestyle ListReady Autopay Credit Score MoneyMe+ RentReady (Variable Rate) (Fixed Rate) accounts Offer range $5,000 - $50,000 $5,000 - $70,000 Credit limit up to Service amount up t
Slide 39: Personal Loans
Personal Loans (Variable Rate) Customer receivables Total originations Average loan value at 31 Dec 2022 in 1H23 in 1H23 $219m $47m $13,404 Down 1% from 1H22 Down 63% from 1H22 Up from $10,695 in 1H22 Personal Loans (SocietyOne Fixed Rate) Customer receivables Total originations Average loan value a
Slide 40: Freestyle Virtual Card
Freestyle Virtual Card Customer receivables Freestyle credit usage Average use of at 31 Dec 2022 in 1H23 credit limit in 1H23 $210m $90m 77% Up 14% from 1H22 Down 40% from 1H22 Was 71% in 1H22 Average card Median Freestyle transaction in 1H23 customer age $57 31 Was $65 in 1H22 Was 30 in 1H22 Page 3
Slide 41: ListReady
ListReady Customer receivables Total originations Real estate agents at 31 Dec 2022 in 1H23 signed up to-date $7m $10m 3,500+ Down 11% from 1H22 Down 17% from 1H22 Distribution partners Page 40 | MONEYME
Slide 42: Autopay
Autopay Customer receivables Average car financed Average Autopay at 31 Dec 2022 in 1H23 customer Equifax score $443m $35,313 767 Up 186% from 1H22 Up 11% from 1H22 Up from 747 in 1H22 Distribution partners Page 41 | MONEYME
Slide 43: MONEYME Credit Score and SocietyOne Credit Score
MONEYME Credit Score Free credit score App-based >37,000 check, score history, personalised insights Product officially Customers during and tips to improve launched Jan 2023 1H23 beta phase directly on your phone SocietyOne Credit Score Free credit score Web-based ~200,000 check on website with Lau
Slide 44: First-mover advantages through Westpac Banking as a Service partnership
MONEYME is leveraging first-mover advantages through Westpac Banking as a Service- partnership SocietyOne Spend & Save Accounts Transaction and Debit Card and savings bank Free sign up Digital Wallet accounts $0 account fees Round ups Instant save $0 ATM fees (at (on payments) (on deposits) major AT
Slide 45: Important notices & disclaimers
Important notices & disclaimers The information contained in this presentation has been prepared by MONEYME Limited (MONEYME or Company) in connection with retention of customers, reliance on key personnel, maintenance of key business partner relationships, reliance on new products, MONEYME’s 1H23 f
Slide 46: moneyme.com.au
moneyme.com.au Copyright 2023 | MONEYME Limited | ACN 636 747 414 | Australian Credit Licence Number 442218