Ann: Quarterly Update and Appendix 4C, page-9

Dialled into the conference call . My notes below . The presenter were speaking quickly so I might have got some names mixed up or missed as I typed things up.

First 10 minutes, management went through the 4C result highlights with nothing additional added besides that growth of active plans is higher than active accounts showing repeat business and increased customer engagement.

Merchant growth

• 200 merchants onboarded
• Automotive- 40% contribution. Niche market with 1-2 bnpl players. Major growth in Sydney and other metro cities. Big growth driver – lot of appetite in these merchants.
• Health sector – 20% of overall increase with big brands like Vision Australia. Also, penetration in gyms and dental practises etc.
• Retail – 20% increase. Aquila, salt pepper and few others onboarded.
• Plan is to Drive competitive position in automotive, health, home improvements .
• Lots of news flow coming across all three verticals during this quarter.

UK growth

• Key client – partnered with JD sports – UK listed retailer with 2.1 Bil revenue in UK. https://en.wikipedia.org/wiki/JD_Sports . Implementation is on track and should be complete before end of March. 28% of their revenue in the UK comes from online channels. Plan is to take opposite approach to Australia, where company plans to establish e-commerce channels first before expanding into physical stores. lot of merchants in the pipeline.

• added few online merchants such as Watchshop.com and health/wellness product retailers. In UK, full team set up to service the market. Ready to onboard incoming merchants.

• Partnered with retail week – UK-based news magazine, website and data service covering the retail industry. Already opened opportunity with large retailers – household brands. Also opened opportunity with small mid sized enterprise market. Plan is to sign up with a big well known brand to create awareness then penetrate the small to mid size market. RFP for large, multi-brand retailers already submitted.

• Growth plans beyond UK – on the cards but focus is in the UK.

Financials

• When 4D is issued next month then they will issue more details on key metrics . Growth in receivables book. Primary driver of outflow is timing difference betnwee payments recived and paid.
• UK and b2b capabilities expansion hence the increase in staff costs.
• Next quarter costs will be normalised. Expected outflow for next quarter as projected in 4c is in anticipation of growth in the UK markets with $75 mil of the outflows representing payments to merchants. This does not take into account cash inflows such as receipts from customers, which are expected to be around $61.1 million in the quarter ending 31 March.

Thoughts on competitors entering the market like Klarna in Australia ?

Early days – how differentiation is only 4 payment option and lower value.OPY more niche, specialised verticals , higher value. Klarna focus on fastmoving, low cost retail products. From UK, klarna demographics is younger, whileOpenpay is older.

Lets see how they fare in this quarter.