Dear Shareholders Alongside financial results for 1HFY23, the...

Dear Shareholders

Alongside financial results for 1HFY23, the Company today announces capital management initiatives.

On 17 March 2023 the Board determined to pay a $0.10 per share dividend to eligible shareholders as at record date of 17 March 2023. This dividend will be paid during the week of 27 March 2023. This dividend will be franked, although no franking percentage has been determined at this time.

On 21 March 2023, the Company entered into a Credit Agreement for US$150 million of finance, for the purpose of partially financing a debt-funded equal-access buy-back of ordinary shares in VGW.

Subject to receiving ASIC relief, VGW plans to offer shareholders an equal-access buy-back. The Company plans to offer shareholders the opportunity to participate in an off-market share buy-back of up to c.7% of VGW shares, with a maximum cost to VGW of approximately A$251 million.

1HFY23 financial results

Financial results for the half year ended 31 December 2022 were approved on 16 March 2023:

• Revenue of $2,211 million (pcp: $1,544 million), up 43%
• Profit before tax of $249 million (pcp: $308 million), down 19%
• PBT margin of 11% (pcp: 20%)
• Marketing spend was up materially at $174 million (pcp: $84 million) driven by a significant investment in user acquisition at attractive metrics
• Total comprehensive income was $178 million (pcp: $266 million), down 33%
• The Group generated a net operating cash inflow of $277 million, a net investing outflow of c.$1 million, and a net financing cash outflow of $252 million (representing the payment of franked dividends during the year)

VGW remains committed to delivering long-term growth in earnings, cash flows, and returns to shareholders - along with continuing to invest in its people, customers and products.

The Consolidated Interim Financial Report can be downloaded by clicking here.

Announcement of dividend

On 17 March 2023 the Board determined to pay a $0.10 per share dividend to eligible shareholders as at record date of 17 March 2023. This dividend will be paid during the week of 27 March 2023.

This dividend will be franked, although no franking percentage has been determined at this time. In due course (within a few months after the end of the relevant financial year) shareholders will be formally notified (via the issue of distribution statements) of franking credits to be distributed with this and any other potential future dividends paid during this financial year, to maximise this credit for all shareholders. This dividend will not be declared to be from conduit foreign income. Where applicable, any non-resident withholding tax will be withheld.

Progression of debt financing for a potential share buyback

VGW has reached agreement to enter into a US$150 million facility:

• For the purpose of partially funding a debt-funded equal-access buy-back of ordinary shares in VGW
• Sourced from US based funds, a c.30 month debt facility has been entered into
• Adding a small amount of debt to VGW’s capital structure starts a new chapter of balance sheet flexibility for the Company
• VGW expects to be able to close this facility in or around April 2023, to facilitate an equal access share buy-back

Equal access buyback

Subject to receiving ASIC relief, VGW plans to offer shareholders an equal-access buy-back:

• Subject to receipt of customary ASIC relief1, the Company plans to offer shareholders the opportunity to participate in an off-market share buy-back of up to c.7% of VGW shares, with a maximum cost to VGW of approximately A$251 million.
• VGW will fund the buy-back primarily from a debt facility specifically arranged for the purposes of the buy-back.
• As an unlisted public company, VGW considers that a buy-back may give shareholders an opportunity to dispose of some or all of their shareholding without brokerage or other charges, providing a liquidity event to holders, and accretion to holders who do not wish to participate.
• The buy-back price is expected to be $5.50 per share. This price would comprise a capital component of 1.1%. The remaining 98.9% of the proposed buy-back price would be treated, for tax purposes, as a dividend2.
• At the date of this announcement, Mr Laurence Escalante intends to partially participate in the buy-back3.
• Participation in any buy-back is entirely voluntary, and would be offered to eligible shareholders from Australia and New Zealand registered on the VGW register on the relevant record date on an equal and pro-rata basis.
• Further detail will be made available to all holders via a buy-back booklet, or further update, in the coming weeks.

New shareholder registry

As has been communicated to shareholders, with effect from Monday, 5 December 2022, the Company transferred its share registry services from Advanced Share Registry to Automic Pty Ltd (Automic).

Your investor portal at Automic can be accessed here: https://investor.automic.com.au.

If you have any queries in relation to your shareholding or accessing your investor portal, please contact Automic at [email protected] or on 1300 288 664 (within Australia) or +61 2 9698 5414 (outside Australia).

It is important that shareholders keep their email address, bank account details and all relevant tax and residency information with Automic Group up-to-date.

Company presentation

The most recent version of our Company presentation remains available for shareholders at: https://www.vgw.co/shareholder/.

Thank you again for your continued support of our business.

Regards

Laurence Escalante

Chief Executive Officer
VGW Holdings Limited