Announcement PDF ANNUAL REPORT 2023 WISR LIMITED • ANNUAL ANNUAL REPORT REPORT2023 2023 Wisr (ASX: WZR) is purpose-built to improve the financial wellness of all Australians by helping them make smarter decisions with their finances. WISR IS FOR YOUR SMART PART 1 WISR LIMITED • ANNUAL ANNUAL REPORT REPORT2023 2023 2 CONTENTS Chair & CEO’s review 4 Delivering on FY23 objectives 8 • Profitability delivered alongside moderated growth 9 • Key results 11 • Positive operating cash flow delivered 12 • Wisr YOY revenue growth 12 • Wisr YOY lending platform growth 13 • Wisr YOY loan book balance 13 • Strong funding platform 14 • Capital position 15 Financial wellness is a smart strategy 16 • Financial Wellness Platform profiles 17 • Smart decisions at any stage of a customer’s life, anytime, in their pocket 18 • Wisr’s FWP improves loan customers’ financial health 20 Award-winning momentum 21 Executive Leadership Team 22 Board of Directors 24 Financial report 26 • Directors’ report 27 • Auditor’s independence declaration 49 • Consolidated statement of profit or loss and other comprehensive income 50 • Consolidated statement of financial position 51 • Consolidated statement of changes in equity 52 • Consolidated statement of cash flows 53 • Notes to the financial statements 54 Directors’ declaration 87 Independent auditor’s report 88 ASX additional information 91 Corporate directory 94 3 WISR LIMITED • ANNUAL ANNUAL REPORT REPORT2023 2023 CHAIR & CEO’S REVIEW Dear Shareholders, Matthew Brown Interim Chair Andrew Goodwin Chief Executive Officer FY23 has been a challenging year for many of us. In response to macroeconomic conditions, including ongoing RBA Cash Rate increases, inflation, tightening of funding markets, and broader economic uncertainty, we implemented a capital management strategy that prioritised profitability on a run-rate basis1 (within 12 months) over accelerating loan growth. We’re extremely pleased that despite the economic uncertainty, Wisr has delivered all of the Company objectives set at the end of FY22. We made prudent and proactive adjustments to the Company’s strategy and cost base to successfully deliver profitability on a run-rate basis (with two positive EBTDA quarters in FY23) while maintaining a robust balance sheet. In Q1FY23, we delivered our 25th consecutive quarter of loan growth before a series of cost reductions were enacted throughout the quarter. At the beginning of Q4FY23, we made the prudent decision to reduce operating costs further while continuing to focus on profitability. This included the deliberate moderation of loan origination volume and additional headcount reductions. Despite the moderation in volume, we’ve delivered positive operating cash flow of $7.4M2 and a 78% improvement in EBTDA2 for FY23, which included two positive quarters (Q2 & Q4). This was driven by operational leverage expansion with operating revenue growth of 55% to $91.9M and a 20% reduction in operating expenses to $32.8M3. We also 4 1 Profitability is on a run-rate EBTDA basis 2 Operating cash flow is audited and on a cash basis per the 4E versus EBTDA (audited) which is a profit and loss statement metric. Both operating cash flow and EBTDA exclude $1.1M one-off restructuring costs. Source: FY23 (Appendix and Financials) 3 Excludes $1.1M restructuring costs grew our prime loan book by 19% and priced our inaugural secured vehicle loan and third asset-backed securitisation (ABS), Wisr Independence Trust 2023-1. These temporary settings are considered appropriate to maintain a strong balance sheet, and the business has continued to focus on NIM expansion through lifting front book yield in response to the higher cash rate. We’re incredibly proud of the results we have achieved. It’s a strong validation of our purpose-built business model, prime customer profile, quality loan book, prudent treasury and capital management, underwriting process and the capability of the widely recognised Wisr team. FY23 PERFORMANCE HIGHLIGHTS Loan book: • Loan book growth of 19% to $931M (FY22: $780M) • Total new loan originations down 19% to $495M (FY22: $611M) following deliberate moderation of loan origination volume to maintain a strong balance sheet and prioritise profitability • 78% EBTDA improvement (FY23: $(1.6)M2 vs FY22: $(7.2)M) • Continued NIM expansion, with the Company now delivering a NIM run rate (June 2023) of c. 5% on new business written Balance sheet and funding: • Cash balance (excluding restricted cash) $23.1M as at 30 June 2023, consisting of $21.7M unrestricted cash and $1.4M loans available for sale • Equity note investments within Wisr Warehouses of $48.3M • Sale of Freedom 2021 G1 notes (settled June 2023), releasing additional capital of $3.6M into the business • Strengthened the balance sheet by securing a new $25M head company debt facility (Q2FY23). The facility has a tenor to July 2025 • Rolled-forward Wisr Warehouses (WH1 & WH2) for another 12 months (Q2FY23) • Received credit approval from another Big Four bank for a third warehouse facility • Total loan originations $1.6B4 as at 30 June 2023 Wisr Independence Trust 2023-1 securitisation: • 90+ Day arrears of 1.25% (FY22: 0.98%) and 781 average credit score on the total book (FY22: 780) • Third ABS transaction and the first secured vehicle loan ABS transaction for the Company, the $200M Wisr Independence Trust 2023-1 Financial performance: • Operating revenue growth of 55% to $91.9M5 (FY22: $59.4M) • Received a AAA Moody’s rating for the top two tranches and a weighted average margin of 2.58% over one-month BBSW 4 Loan originations audited 5 Revenue audited and percentage increase is on previous corresponding period (PCP) 5 WISR LIMITED • ANNUAL ANNUAL REPORT REPORT2023 2023 • Freed up $200M capacity in $250M WH2 • National Australia Bank (“NAB”) acted as the Arranger, Dealer and Joint Lead Manager, while Westpac Banking Corporation was the Dealer and Joint Lead Manager • $675M in total ABS transactions raised by Wisr to date Financial Wellness Platform: • Proprietary channel passed 758,000 customer profiles at 30 June 2023 with 17% growth on pcp (FY22: 647,000). FY24 OUTLOOK As we enter FY24, we’re well-capitalised and building sustainable revenue. Given the current macroeconomic environment, we will continue our broadly conservative stance until market conditions stabilise with a continued focus on NIM expansion and maintaining a strong balance sheet to deliver a profitable company. When the conditions are deemed appropriate, the business has measures to pivot quickly and recommence scaling. Our competitive advantage, a purpose-led business model that improves financial health and goes far beyond the traditional lending experience, has never been more relevant as rising interest rates and other cost-of-living pressures create a financial strain for more Australians. We want to support customers to reduce debt faster and improve their financial position. As consumers demand fairer financial products, services and tools, Wisr is well-placed and well-resourced to meet the demand. To our shareholders, on behalf of the Wisr Board and Wisr’s Executive Management, we sincerely thank you for your ongoing support. Lastly, we would like to thank the Board, Executive Management and all of Wisr’s staff for their continued support, vision, expertise and resilience in rapidly changing conditions. We have the resources and capability to safeguard the business through the economic cycle and be a profitable, wellcapitalised company of a significant scale that continues to execute our purpose-led strategy and positively impact how Australians experience credit. Matthew Brown Interim Chair Andrew Goodwin Chief Executive Officer 6 7 WISR LIMITED • ANNUAL ANNUAL REPORT REPORT2023 2023 KEEPING PROMISES DELIVERING ON FY23 OBJECTIVES 8 Profitability delivered alongside moderated growth 1 Wisr began FY23 with the goal of achieving profitability1 within 12 months. Our prudent and proactive adjustment of strategy and cost base, in response to macroeconomic conditions, successfully delivered profitability1 on a run-rate basis in FY23 and positioned Wisr for long-term sustainable growth. Objectives set for FY23 Focus on near-term profitability ✓ Significant reduction Growth moderated and profitability1 delivered ✓ Uplift of front book yield ✓ Switching from high June 2023 run-rate new loan origination yield (c. 13%) and Net Interest Margin (NIM) (c. 5%) in short-term growth aspirations in lending to moderate growth to positively impact EBTDA Cost management Outcomes ✓ Material reduction in employee expenses and headcount ✓ Material reduction in external spend Strategic adjustments ✓ Pausing all new credit product expansion and/or go-to-market expenditure ✓ Exited support for Arbor (EU Operating cash flow of $7.4M2 and 78% EBTDA2 improvement (FY23 vs FY22), including two positive quarters (Q2FY23 and Q4FY23) market) and any short-term geographical expansion ✓ Reduced investment in the Wisr Financial Wellness Platform 1 Profitability is on a run-rate EBTDA basis 2 Operating cash flow is audited and on a cash basis per the 4E versus EBTDA (audited) which is a profit and loss statement metric. Both operating cash flow and EBTDA exclude $1.1M one-off restructuring costs. Source: FY23 (Appendix and Financials) 9 WISR LIMITED • ANNUAL ANNUAL REPORT REPORT2023 2023 Wisr has a unique and differentiated strategy Digital Lending Platform Wisr’s unique competitive advantage Financial Wellness Platform 10 Key results Moderated lending growth $495M1 in new loan originations 19% on pcp (FY22 $611M) $1.6B1 $931M Total loan originations Wisr loan book 781 average credit score of total book as at 30 June 2023 (FY22 780) 19% on pcp (FY22 $780M) Focused on profitability $91.9M2 $(1.6)M3 55% on pcp 78% improvement on pcp in operating revenue (FY22 $59.4M) 1.25% EBTDA On-balance sheet 90+ day arrears as at 30 June 2023 (FY22 $(7.2)M) (0.98% as at 30 June 2022) Strong balance sheet $200M ABS transaction, Wisr Independence Trust 2023-1, 2.58% over one-month BBSW Wisr well capitalised with cash balance of $23.1M Includes $21.7M unrestricted cash and $1.4M loans for sale. Refer to pg 15 for full detail Proprietary Financial Wellness Platform 758K+ Wisr Financial Wellness Platform profiles 17% on pcp (647K as at 30 June 2022) $6.3M in round ups paid off customer debt as at 30 June 2023 1 Loan originations audited 2 Revenue audited and percentage increase is on previous corresponding period (PCP) 3 Excludes $1.1M restructuring costs 11 WISR LIMITED • ANNUAL REPORT 2023 Positive operating cash flow delivered1 $8M $6M $4M $2M $0M FY21 -$2M FY222 FY23 -$4M -$6M -$8M -$10M We responded to changing macroeconomic conditions in FY23 with a series of material operating expense reductions, implemented in Q1FY23 and Q4FY23, while also growing revenue. This has had a materially positive impact, delivering $7.4M of operating cash flow (excluding $1.1M one-off restructuring costs), a 386% improvement on FY22 ($(2.6M)). Wisr YOY revenue growth3 $91.9M $59.4M $27.2M FY21 FY22 FY23 1 Operating cash flow is audited and on a cash basis per the 4E versus EBTDA (audited) which is a profit and loss statement metric. Source: FY23 (Appendix and Financials) 2 Includes one-off Olympics & Brand campaign spend 3 Revenue audited 12 Wisr YOY lending platform growth4 Total loan originations (cumulative, to scale) $1.6B Yearly loan originations (number) $495M $1.2B $611M $611M $367M $245M $21.5M $39M $3.6M $18M FY17 FY18 $109M $137M $70M FY19 FY20 FY21 Wisr YOY loan book balance5 FY22 FY23 $931M $780M $384M $90M FY20 FY21 FY22 FY23 4 As previously advised in Q2FY23, Wisr has deliberately moderated loan origination growth to maintain balance sheet strength and prioritise profitability 5 Loan book includes all loans in WH1, WH2, Freedom Trust 2021-1, Freedom Trust 2022-1, Independence 2023-1, and balance sheet, excludes off-balance sheet of $8.8M as at 30 June 2023 13 WISR LIMITED • ANNUAL REPORT 2023 Strong funding platform • WH1 has $450M of committed funding and an undrawn capacity of $75M, while WH2 has committed funding of $250M and an undrawn capacity of $75M (total $150M available) • Wisr has now delivered three ABS transactions – Freedom 2021, Freedom 2022 and Independence 2023 • In June 2023, Wisr released term deal capital with the sale of the $3.6M Freedom 2021 G1 notes • A debt facility (Head Company) is in place which is fully drawn to $25M. The facility is due to mature in July 2025 • Work is continuing on a third warehouse with a new senior funder and ability to fund both PL and SVL (senior funder credit approval received) • Credit approval was received for an intraday overdraft facility for working capital requirements and is currently going through implementation Funding as at 30 June 2023 $1.2B $150M $1.0B $1.1B $25M $148M $955M $68M $800M $165M $600M $250M $400M $450M $200M Drawn WH1 14 WH2 Independence 2023 Available Freedom 2021 Total facility Freedom 2022 Head Co Capital position CAPITAL ASSETS DESCRIPTION Restricted cash $31.9M Cash held in the Wisr Warehouses consists of customer loan repayments (principal and interest) and unutilised funds from note subscriptions (predominantly third-party debt). Use of these funds is restricted to the purposes of funding loans and operating the Wisr Warehouses e.g. Trustee fees. Unrestricted cash $21.7M Cash on hand available to be used for any purpose of the business. Loans available for sale $1.4M Loans held on the balance sheet as at the reporting date are available to sell to the Wisr Warehouses, thereby effectively being a cash equivalent. Wisr equity holding in Wisr Warehouses $48.3M Wisr’s equity investment in the Wisr Warehouses: Cash per balance sheet $53.6M 1 • Freedom 2021 ($3.6M, call date1 March 2024) • WH1 ($19.6M) • Freedom 2022 ($11.3M, call date1 September 2025) • Independence 2023 ($8.4M, call date1 December 2026) Cash and cash equivalents $23.1M • WH2 ($5.4M) Wisr equity holding in Wisr Warehouses $48.3M Call dates are forecasted based on expected prepayment rates and actual dates may vary 15 WISR LIMITED • ANNUAL ANNUAL REPORT REPORT2023 2023 FINANCIAL WELLNESS PLATFORM (FWP) FINANCIAL WELLNESS IS A SMART STRATEGY 16 Wisr’s Financial Wellness Platform (FWP) helps customers better understand and engage with their financial life. It promotes better financial decision-making for everyone – no matter their level of understanding or financial position. It’s Wisr’s competitive advantage; we’re the only consumer finance provider in Australia with this offering, making us more than just a lender. The FWP offers proven benefits for our customers who engage with it. It allows users to: ✓ Get a personalised experience based on their next major money moment ✓ See their liabilities and balances ✓ Check and monitor their credit scores ✓ Fine-tune their financial knowledge ✓ Move from subprime to prime credit scores ✓ Round up their money to pay down debt or save ✓ Receive personalised product offers and pricing ✓ Access smarter personal and secured car loans ✓ Apply, manage and pay down their Wisr loan ✓ Learn the psychology of why they spend and change habits Financial Wellness Platform profiles (Cumulative, to scale) 758K 647K 451K 251K 73K FY19 FY20 FY21 FY22 FY23 17 WISR LIMITED • ANNUAL REPORT 2023 WISR’S FINANCIAL WELLNESS PLATFORM (FWP) Smart decisions at any stage of a customer’s life, anytime, in their pocket With Wisr App, customers can access a wide range of tools to help them make smarter decisions, throughout their financial journey CREDIT SCORES • Free access to Equifax and Experian credit scores Where do I stand financially? • Overview of credit insights and liabilities, indicates eligibility for a Wisr loan • Alerts when scores change SMART MOVES • Surfaces the next best financial action based on the customer’s circumstances • Personalised interactive lessons to help improve money habits 18 What’s my next smart decision? LOAN OFFER By accompanying customers through significant money moments, we have a data-rich picture of a customer’s financial situation, behaviour and interests. When a customer’s financial situation or behaviour changes, we can propose relevant next steps at the right time, including personalised loan offers. CREDIT SCORES Wisr knows when customers’ credit scores improve enough to make them eligible for a loan offer ROUND UPS Transaction data from round ups helps indicate spending patterns and potential serviceability Can I access credit? ROUND UPS How do I reach my money goals? • Send digital spare change from daily purchases, towards a debt or other money goal LOAN MANAGEMENT How do I manage my loan? • Monitor repayment progress • Pay loans back faster using round ups • Self-service functionality used frequently by early arrears customers, including extra repayments, changing repayment frequency and direct debit account 19 WISR LIMITED • ANNUAL REPORT 2023 FINANCIAL WELLNESS PLATFORM (FWP) Wisr’s FWP improves loan customers’ financial health Wisr loan customers who engaged with the FWP during FY23 were on average 41%1 further ahead on their loan repayment balance compared to loan customers who didn’t engage with the FWP. The FWP can help loan customers save on interest. For example, if a customer on a $30K loan pays an extra $50 per month through round ups, the loan will be paid off 5 months2 ahead of schedule. 1 Based on average comparison of engaged and not engaged loan customers that are current and not in arrears between 01 July 2022 – 30 June 2023 2 Calculation is based on average loan size of $30k and a baseline interest rate of 8.79% 20 Award-winning momentum 21 WISR LIMITED • ANNUAL REPORT 2023 Executive Leadership Team Andrew Goodwin CHIEF EXECUTIVE OFFICER & CHIEF FINANCIAL OFFICER Joanne Edwards CHIEF OPERATING OFFICER Ben Berger Andrew has over 20 years of experience in Financial Services across consumer finance, investment banking, private equity and assurance and has been with Wisr since 2017. Prior to Wisr, Andrew worked at Macquarie Capital, in both domestic and offshore markets, as well as KPMG. Andrew is focused on continuing to scale Wisr, providing exceptional products to customers that are underpinned by a clear capital and risk management strategy. Andrew holds a Bachelor of Business and is a Chartered Accountant. Joanne is a respected leader of multiple disciplines in Banking, with over 18 years of experience ranging from credit risk, product management, pricing, analytics and strategic project delivery. Joanne is passionate about using data and analytics to solve business problems, drive profitable growth, streamline processes and improve customer experience. Before Wisr, Joanne was General Manager of Unsecured Risk at the Commonwealth Bank, where she led the integration project for the bank’s Comprehensive Credit Reporting compliance. Ben has worked in and led product and technology teams across three continents for over 20 years across B2B and B2C, from startups with successful exits through to IBM. He has spanned all product life cycle stages, from building creative new products to nurturing mature cash cows. Before joining Wisr three years ago, Ben led the product team at THE ICONIC. At Wisr, he leads the product and technology functions. CHIEF PRODUCT OFFICER James Goodwin CHIEF CUSTOMER & MARKETING OFFICER 22 James has over 15 years of experience building brands, delivering growth, and leading high-performing teams. He is passionate about solving customer problems through combining purpose, technology, and people. Since joining Wisr in 2018 James has been responsible for building Wisr’s purpose-led brand, communications, and customer experience. He has worked with a number of established financial services and challenger brands, including Virgin Mobile, Bankwest, AMEX and ING. Peter Beaumont Peter joined Wisr in 2015 and has led the growth of Wisr’s broker channel. He is a senior business executive with over 30 years of global banking, finance and project delivery experience with leading international investment banks Citibank, UBS AG, Bank of America Merrill Lynch and ABN AMRO. Peter brings to Wisr a broad set of customer acquisition and sales leadership skills with deep experience operating high-volume, online financial product businesses. CHIEF COMMERCIAL OFFICER David King GENERAL COUNSEL Kate Renner David is a commercial lawyer with over 15 years of experience working in law firms and as an in-house lawyer in Australia and internationally. Before joining Wisr, David advised on legal and business affairs across Asia-Pacific as Senior Legal Counsel (APAC) at IMG/Endeavor (NYSE: EDR). David was previously an Associate at global law firm Taylor Wessing LLP in London, UK. David holds a Bachelor of Laws (LLB) and Bachelor of Commerce (BComm – Finance) from the University of Melbourne. Kate has over 14 years of experience building people and recruitment programs in the People and Culture space. Formerly in Silicon Valley, Kate worked on building a global recruitment program at Salesforce and developed a rich end-to-end employee experience at tech start-up Inkling. Kate moved to Sydney in 2016 and has built the Wisr Employee Experience, HR and Recruitment functions from the ground up. HEAD OF EMPLOYEE EXPERIENCE 23 WISR LIMITED • ANNUAL REPORT 2023 Board of Directors Mr Brown is a highly experienced senior executive, board member, adviser and investor with over 20 years of experience across investment banking and technology in Australia and the United States. He is the Founder and Managing Director of independent investment and corporate advisory firm Alluvion Capital. Matthew Brown INTERIM CHAIR & NONEXECUTIVE DIRECTOR BCom; LLB John Nantes NON-EXECUTIVE CHAIR LLB; BCom; B.A., DFP Cathryn Lyall NON-EXECUTIVE DIRECTOR B.A.; M.A 24 Prior to Alluvion Capital, Mr Brown was Chief Financial Officer and Executive Director of a high-growth, global enterprise SaaS business. Prior to that, Mr Brown was a Managing Director at Macquarie Capital, where he spent 12 years in Sydney and New York with a focus on M&A, capital markets and principal investing. Mr Brown is also a non-executive director of EncompaaS Software Limited, Thinxtra Limited, Learning Vault Pty Limited and Upwire Pty Limited and an active investor in early-stage, high-growth technology businesses. Mr Nantes has over 25 years of experience in Financial Services, Private Equity, Tax and Accounting, Corporate Finance, Capital Markets, and M&A. He is also the Executive Chairman of Income Asset Management (ASX: IAM), a leading financial services company in Australia with over $3B in AUA, as well as a nonexecutive director of 1st Group (ASX:1ST), a newly merged leading Healthtech company in Australia, and a non-executive director of Thinxtra, a public non-listed IOT technology company. Mr Nantes has a strong reputation for building profitable and fast-growing businesses, especially those reliant on technology, product innovation, and market disruption with strict compliance/ governance requirements, having previously also held roles such as Group Head of WHK/Crowe Horwath Wealth Management, CEO Prescott Securities, and Executive roles at St George Bank/ Bank SA and financial advisory roles at Colonial State Bank. Ms Lyall is a highly experienced senior executive, board member and strategic adviser with over 35 years of experience across finance, banking, government and fintech in Australia and the United Kingdom. She is a Partner at Seed Space Venture Capital, the Co-Founder of not-for-profit Seed Money Australia, nonexecutive director of several unlisted fintech companies, and is a NED on the board of the peak industry body Fintech Australia. Ms Lyall’s extensive experience in the Australian and British Financial Services sectors includes roles at the Chicago Mercantile Exchange, Nasdaq and the London Stock Exchange. Most notably, Non-Executive Director Deutsche Bank UK Bank, sitting on the Bank’s Board Risk Committee (BRC), the Listed Derivatives Risk and Compliance Committee (LDRCC), and the Nomination Committee as Chair. Craig Swanger NON-EXECUTIVE DIRECTOR BCom (Hons); SIA GD Kate Whitney NON-EXECUTIVE DIRECTOR B.A. Mr Swanger has extensive board experience, including Macquarie Bank’s major funds management entity, Macquarie Investment Management Limited and a total of 15 internal and external boards since 2003. Since Macquarie, Mr Swanger has invested in and advised a large portfolio of technology companies across finance, social impact, and health. More specifically, in areas related to Wisr, Mr Swanger was Chairman of 5 of the largest debt-listed investment companies in Australia and New Zealand issued over the past decade and more recently worked with Australia’s largest corporate bond and securitisation distribution specialists and is on the Investment Committee of a large SME direct lending fund. Ms Whitney is a highly experienced senior executive with over 25 years of experience in Australian Consumer Law, accelerating growth, product expansion and driving customer acquisition through data and analytics across marketing, advertising, subscription television, FMCG, financial services, telecommunication, luxury and retail. From 2020-2022, she held the position of Chief Marketing and Growth Officer for the innovative foodservice business Marley Spoon Australia (ASX: MMM), and in early 2023 was appointed as Chief Digital and Technology Officer for Treasury Wine Estates (ASX: TWE). In her current role, Ms Whitney has oversight of all the company’s technology, cyber-security and information systems globally, as well as the data, insights and analytics division and capability. Prior to her current role, Ms Whitney spent six years as the Director of Digital at Pernod Ricard, both in the Australian and USA businesses and between 2011 and 2014, she was the General Manager of Marketing at David Jones, which included oversight of the credit card portfolio. Her key achievements include driving $250M in revenue growth for David Jones via the Amex Storecard deal, and during her tenure at Marley Spoon, Ms Whitney saw the company’s revenue more than double. 25 WISR LIMITED • ANNUAL ANNUAL REPORT REPORT2023 2023 WISR LIMITED • ABN 80 004 661 205 FINANCIAL REPORT for the year ended 30 June 2023 26 WISR LIMITED • ANNUAL REPORT 2023 DIRECTORS’ REPORT For the year ended 30 June 2023 The directors present their report, together with the financial statements, on the consolidated entity (also referred to hereafter as the Group) consisting of Wisr Limited (referred to hereafter as the Company or Parent Entity) and the entities it controlled at the end of, or during, the year ended 30 June 2023. DIRECTORS The following persons were directors of the Company during the whole of the financial year and up to the date of this report, unless otherwise stated: Name Position John Nantes Non-Executive Chair Craig Swanger Non-Executive Director Matthew Brown1 Non-Executive Director Cathryn Lyall Non-Executive Director Kate Whitney Non-Executive Director 1 Particulars of each director’s experience and qualifications are set out later in this report. PRINCIPAL ACTIVITIES During the financial year, the Group’s primary activity was writing personal loans and secured vehicle loans for 3, 5 and 7-year maturities to Australian consumers. REVIEW OF OPERATIONS Key Group highlights include: Financial performance Operating revenue up 55% to $91.9M (FY22: $59.4M) 78% EBTDA improvement (FY23: $(1.6)M2 vs FY22: $(7.2)M) Continued NIM expansion, now delivering a NIM run rate (June 2023) of c. 5% on new business written 1 Mr M Brown was appointed Interim Chair from 21 August 2023 as per ASX release on 21 August 2023. 2 Excludes $1.1M restructuring costs. 27 WISR LIMITED • ANNUAL REPORT 2023 DIRECTORS’ REPORT For the year ended 30 June 2023 Review of operations (cont.) Loan book Loan book growth of 19% to $931M (FY22: $780M) 90+ Day arrears of 1.25% (FY22: 0.98%) and 781 average credit score of total book (FY22: 780) Total new loan originations down 19% to $495M (FY22: $611M) following deliberate moderation of loan origination volume to maintain a strong balance sheet and prioritise profitability Total loan originations $1.6B as at 30 June 2023 Balance sheet and funding Cash balance (excluding restricted cash) $23.1M as at 30 June 2023, consisting of $21.7M unrestricted cash and $1.4M loans available for sale Equity note investments within Wisr Warehouses of $48.3M Sale of Freedom 2021 G1 notes (settled June 2023), releasing additional capital of $3.6M into the business The Company's third ABS transaction and inaugural asset-backed securities deal for the secured vehicle loan product, the $200M Wisr Independence Trust 2023-1 (Independence23) Strengthened the balance sheet by securing a new $25M3 head company debt facility (Q2FY23) Rolled-forward Wisr Warehouse’s (WH1 & WH2) for another 12 months (Q2FY23) Received credit approval from another Big Four bank for a third warehouse facility Financial Wellness Platform 17% increase in the Wisr Financial Wellness Platform (FWP), with over 758,000 customer profiles (FY22: 647,000) at 30 June 2023 Launch of the Company’s new technology product, Wisr Today, in Q2FY23 with over 28K downloads FOCUS ON PROFITABILITY OVER HIGH-GROWTH Wisr began FY23 with the objective of achieving profitability4 within 12 months. In response to macroeconomic conditions, through prudent and proactive adjustment of the Company’s strategy and cost base, Wisr has successfully delivered profitability on a r