Pepper Money : CY2021 Full Year Results Investor Presentation

ersonal use only

Pepper Money

Investor Presentation

CY2021 Results

24 February 2022

Copyright 2022 Pepper Money Limited. Confidential.

P E P P E R M O N E Y

Today's Presenters

only	Rehayem
	Mario
	C E O
use	• Joined Pepper Money in 2011.
Appointed CEO of Pepper
	Money in 2017
ersonal	• Over 20 years experience
across banking and finance
• Previously held senior positions
in APRA regulated entities and
the non bank sector, including
as State Manager, Mortgage
Broker Distribution at Westpac

Copyright 2022 Pepper Money Limited. Confidential.

Therese

McGrath

C F O

• Joined Pepper Money in 2018 as CFO
• 25+ years of international experience in finance, strategic development and operations
• Previously held senior positions in finance, operations and strategy at Australia and New Zealand Banking Group, Thomson Reuters, Diageo, SAP and Microsoft

2

C Y 2 0 2 1 H I G H L I G H T S

Profitability

C U S T O M E R G R O W T H

Originations $8.5bn

New customers to Pepper Money

only

Up 84% on PCP

Up 48% on PCP

P R O - F O R M A N P A T

$141.9m

S H A R E O F M A R K E T

34%

Mortgages AUM $12.3bn

Asset Finance AUM $3.5bn

Exceeded the IPO forecast of $120.7m

Lending AUM $15.8bn

Up 15% on PCP

Up 33% on PCP

Up 19%

2.3x systems 1H CY2021

4.3x systems 1H CY2021

2.6x systems 2H CY2021

8.2x systems 2H CY2021

S T A T U T O R Y N P A T

use$130.7m

N E T I N T E R E S T M A R G I N

Mortgages 2.33%

Asset Finance 3.41%

Total NIM: 2.56%

ersonal

31%

down 10bps on PCP

down 20bps on PCP

up 17bps on PCP

IPO forecast 2.51%

IPO forecast 2.30%

IPO forecast 3.32%

F U L L Y F R A N K E D D I V I D E N D

S C A L E D G R O W T H

9cents per share

Cost to Income³

Asset Quality

Productivity

Core productivity² up 70%

43.3%

Loan Losses % AUM: 0.23%

Annualised yield 5.5%¹

Originations / Core FTEs

1.3% improvement on PCP

2bps improvement on PCP

Underlying - excludes

Management Overlays

Note: 1. Dividend yield based on average share price from time of IPO to year end (25 May - 31 December 2021). 2. Core productivity defined as Originations divided by FTEs (excluding FTEs for Broker Servicing, Risk, Treasury, Finance, Legal and Human

3

Copyright 2022 Pepper Money Limited. Confidential.

Resources). 3. Cost-to-income ratio defined as: Total operating expenses (including depreciation, amortisation and corporate interest) divided by total operating income before loan losses.

A B O U T P E P P E R M O N E Y

only	Pepper's
mission is to
help people
use	succeed
ersonal	C O R E C O M P E T E N C I E S

Copyright 2022 Pepper Money Limited. Confidential.

Can Do

Balanced

Real

Data Driven	Distribution	Funding	Credit
Digitally Enabled	Capabilities	Expertise

4

Pepper Money grew share in Asset Finance and maintained share in a rapidly expanding Mortgage market

Markets grew over CY2021

B U S I N E S S U P D A T E

Large addressable market

only•

•

use

December 2021M O R T G A G E SA S S E T F I N A N C E

Total Addressable	$2,322bn		$185bn
Market (AUM)		¹
	88% Conforming		Consumer: $59bn⁴
	12%2 Non-Conforming		Commercial: $126bn⁵
Pepper Money's	~0.5%³		~1.9%⁶
Market Share
(closing AUM)			Consumer: ~3.2%
			Commercial: ~1.3%

ersonal

Targeted Customer Segments

• First home buyers
• SME/self employed
  (e.g. including casual and gig economy)
• Minor adverse credit event in history (e.g. late utilities bill)
• Credit history impacted by "life event" (e.g. divorce)

• Used cars
• Caravans
• Commercial vehicles
• Novated lease
• Small to medium business equipment

Copyright 2022 Pepper Money Limited. Confidential.

Notes: 1. Combination of Australia and New Zealand mortgage markets as at December 2021 (Total housing credit, RBA D2 Lending and credit aggregates (including owner-occupier housing credit and investor housing credit)); Housing, RBNZ C5 Sector
lending (registered banks and non-bank lending institutions), December 2021, converted at an assumed exchange rate of NZD:AUD = 0.9331). 2. Independent research conducted by Fifth Dimension Research and Consulting in March 2021. 3. Represents
Pepper Money's Mortgages AUM as at 31 December 2021 (closing) as a proportion of Total housing credit. 4. New household loan commitments for purchase of road vehicles, other transport vehicles and equipment, New household loan commitments, ABS
5601.0 Lending Indicators Table 27, January 2021 - December 2021 (published February 2022). Assumes market size is approximately 4x lending commitments for last 12 months. 5. New business loan commitments, finance lease and fixed term, purchase	5
of vehicles, plant and equipment, ABS 5601.0 Table 29, 31 and 33, January 2021 - December 2021 (published February 2022). Assumes market size is approximately 4x lending commitments for last 12 months. 6. Represents Pepper Money's Asset
Finance AUM as at 31 December 2021 (closing) as a proportion of total consumer and commercial motor and equipment financing.