Openpay : OPY H1 FY22 Report and Appendix 4D

orF nalosrep esu lyno

Condensed Consolidated

InterimFinancialReport.

2021 December 31 ended year-half the For

Contents.

Directors' Report

1

nlyo	Auditor's Independence Declaration	8
	Interim Financial Report
	CondensedConsolidated Statementof
	Profitor Loss andOther Comprehensive Income	9
	CondensedConsolidated Balance Sheet	10
esu	Condensed Consolidated Statement
	of Changes in Equity	11
	Condensed Consolidated Statement of Cash Flows	12
	Notes to the Condensed
		Consolidated Financial Statements	13
		Directors' Declaration	27
	Independent Auditor's Review Report to the Members	28
	Corporate Information	31
personal24 February 2022.

This interimfinancial report does not includeall the notesof the

type normally included in an annual financial report. Accordingly,

this report shouldbe read in conjunction withthe annual report of

Openpay GroupLtd for the year ended 30 June 2021and anypublic

announcements made by OpenpayGroup Ltdduring the interim

reportingperiod in accordance withthe continuousdisclosure requirementsof the CorporationsAct 2001.

OpenpayGroup Ltd is a companylimited by shares, incorporated

and domiciled in Australia. Its registered officeand principal placeof

businessis atLevel 9, 469 La Trobe Street, Melbourne VIC 3000.Its sharesare listed on the AustralianSecurities Exchange.

The financial statements were authorisedfor issue by the directors on For

ii Openpay Group Ltd Contents

Directors' Report.

31 December 2021

only	The Directors present their report, together with the condensed
financial statements, on the consolidated entity consisting of
Openpay Group Ltd ('Openpay', or 'the Company') and the
	entities it controlled ('the Consolidated Entity'; 'the Group') at
	the end of, or during, the half-year ended 31 December 2021.
	DIRECTORS AND COMPANY SECRETARY
	The following people were directors of Openpay Group Ltd
	during the period:
use	Patrick Tuttle	Independent Chairman
Michael Eidel	Managing Director and CEO
	(Resigned 18 January 2022)
Sibylle Krieger	Independent Non-Executive Director
Yaniv Meydan	Non-Executive Director
Kelly Bayer Rosmarin	Independent Non-Executive Director
personal		(Resigned 15 January 2022)
Openpay has fine-tuned its innovative products for both
	David Phillips	Independent Non-Executive Director
	Ed Bunting	Company Secretary
	PRINCIPAL ACTIVITIES
	Openpay Group Ltd (ASX: OPY) is a leading payments fintech,
	delivering smart and friendly solutions to pay and get paid.
	Openpay delivers an omnichannel financing solution that
	extends beyond traditional Buy Now, Pay Later in the form of
	their next-generation "BNPL 2.0" product. BNPL 2.0 provides the
	gateway to complete transactions, up to $20,000 with payback
	terms of up to 24-months, across underserved BNPL verticals,
	including Automotive, Healthcare, Home Improvement,
	Memberships, Education, and Retail.
	consumers and merchants, providing transparent terms with
	quick credit decisions and customisable payment plans for
	consumers, along with a B2B payment offering that facilitates
	end-to-end trade account management. Openpay operates in
	Australia and the United States (operating as Opy) and serves
	New Zealand and the United Kingdom.
ForREVIEW OF OPERATIONS

Openpay Group - growth across key metrics and strategic pivot

Across all the key metrics of Active Merchants, Active Customers, and Active Plans, Openpay Group experienced strong growth in the half-year to 31 December 2021.

Active Merchants

�	ANZ	+60%
�	Rest of the World	4.4k

			3.8k	0.2
			0.1
		2.8k
1.9k	2.2k	0.1
0.0			4.2
0.0		3.7
	2.1	2.7
1.9
H1-20	H2-20	H1-21	H2-21	H1-22

Overall, the Group's number of Active Merchants grew 60% versus pcp (prior corresponding period - H1 FY21), with strong growth across all target verticals.

A key focus of Openpay's merchant acquisition strategy is to win aggregators and large merchants through strategic integration partnerships that can drive growth at scale. In ANZ, a sample of some wins included Nissan, AutoGuru, Kumho Tyres, Nexus Hospitals, Resound Audiology, and Sanity Music. In addition, Anaconda, Spotlight, and JD Sports all switched on with Openpay online to complement their existing instore offer. Major aggregator deals also went live with Apparel 21, Quest, Till Payments, and Accent Software's Insyte CRM. In the US, key half-year wins included PatientNow, Everyware, and American Express to add to previously announced global partnerships with ezyVet and WorldPay from FIS. In addition, Opy has also secured a confidential pilot with a large US healthcare insurance provider (with access to over 50 million customers) that has the potential to rapidly drive scale and value to the Opy business through the responsible funding of payment plans for patient healthcare procedures.

Active Customers

� ANZ

+33%

• Rest of the World

				614k
			541k
		461k		313
	319k	216	276
206k	109
34			265	301
	210	244
173
H1-20	H2-20	H1-21	H2-21	H1-22

The Group's number of Active Customers increased 33% versus pcp to 614k with growth across most key verticals. Strong customer engagement and awareness led to 86% of the Group's plans being held by repeat customers, while 56% of the Group's Active Customers had multiple concurrent plans.

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Directors' Report.

31 December 2021

Active Plans

Total Transaction Value (TTV) ($m)

only	�	ANZ			+71%
� Rest of the World
					2.5m
				2.0m	1.0
			1.4m	0.8
		0.8m	0.5
	0.5m			1.5
	0.2		1.2
	0.0		0.9
	0.6
		0.4

�	ANZ			+34%
� Rest of the World			221
			165	174	61
			54	55
		108
	83
	27
	9			160
			119
			112
		82
	75

H1-20	H2-20	H1-21	H2-21	H1-22	H1-20	H2-20	H1-21	H2-21	H1-22
The Group's number of Active Plans reached 2.5m in the	The robust growth across key indicators delivered record TTV
half-year, an increase of 71% versus pcp, driven by strong	for the Group of $221 million in the half-year, an increase of 34%
versus pcp.
contribution across key consumer segments, in particular Retail
and the emerging new market in Education.
useOpenpay ANZ - Record TTV and strong growth across key metrics

Throughout the half-year, Openpay ANZ honed its focus on executing its highly targeted local strategy, with a key objective of personalachieving profitability within 12 to 18 months. Key pillars of the strategy include: improved customer experience in the omnichannel

environment, enhancing merchant and customer growth, driving utilisation, and generating higher revenues with improved margins.

During the half-year, many major merchants and partners offered Openpay as a payment option to their customers, including but not limited to:

ForOpenpay ANZ's number of Active Merchants grew 57% versus pcp to over 4,200 as at end H1 FY22, with strong growth across all target verticals helped by the successful launch of Openpay's automated self-service platform which significantly shortens and simplifies merchant signings and onboarding, while maintaining leading risk management capabilities.

2 Openpay Group Ltd | Directors' Report

For personal use only

Across the Company's target verticals, Openpay experienced strong progress with the Retail vertical continuing to deliver robust growth during peak trade through a focus on larger ticket transactions. In Healthcare, Openpay is a first-mover into hospitals and remains focused on solidifying its commanding position in dental, veterinary, audiology, and optometry.

The Company continues to grow its distribution as the leading provider in Automotive; car servicing, tyres, and aftermarket while increasing its commitment to new markets. The Education vertical started to gain significant momentum, with Active Plans for this vertical growing over 150% versus pcp.

Openpay ANZ continues to drive customer growth through improved customer experience, including initiatives such as introducing standard customer pricing across merchants to provide transparency and consistency to where fees apply. During the half-year, the number of Active Customers grew 23% versus pcp to over 301,000 as at the end of H1 FY22.

The Company's customers are mature, finance-savvy, and responsible purchasers that use Openpay as a budgeting tool for a broad range of lifestyle-related needs. The average age of our customers is over 40 years.

Customers by Age

		21%
	19%		18%
				15%
					10%	9%
7%
18-24	25-31	32-38	39-45	46-52	53-59	60+

Customer loyalty also continues to improve, with 62% of ANZ customers running multiple concurrent plans, and 90% of Active Plans being held by repeat customers. This is evidence that Openpay has a unique offering that customers access and use repeatedly.

Customer loyalty

• Active Plans Held by Repeat Customers
• Active Customers with Multiple Concurrent Plans

		86%	87%	90%
	80%
71%
			62%
		54%	57%
	49%
41%
H1-20	H2-20	H1-21	H2-21	H1-22

The number of Openpay ANZ Active Plans also grew strongly during the half-year to reach over 1.5 million plans, an increase of 61% versus pcp. The growth was driven across all verticals, with strong Retail performance during the Christmas season and end-of-lockdowns across capital cities delivering improved performance in Automotive and Healthcare.

The Company's plan mix continues to be strongly skewed towards longer-terms (beyond pay-in-4) and higher-value plans, with 83% of TTV coming from plans of three months or longer. Openpay continues to gain traction across specialised verticals, with Automotive having an average plan length of 4.6 months, Healthcare 4.7 months, Home Improvement 14.7 months, Education 5.9 months, Memberships 3.1 months and Retail 3.1 months.

ANZ Active Plan Growth by Vertical -
H1 FY22 versus H1 FY21	%
Automotive	20%
Healthcare	35%
Home Improvement	(12%)
Education	155%
Retail	64%
Memberships	1057%

These initiatives, delivering strong growth across key indicators, led to a record breaking TTV of $160m in the half-year, an increase of 44% versus pcp. Pleasingly, this increased volume in the half-year delivered market-leading margins, demonstrating the value of Openpay's differentiated strategy and offering to merchants and customers.

A number of initiatives implemented in the half-year are expected to deliver results in the second half of the year, including increased NTM, Revenue Yield, TTV, and other key indicators. Openpay's ANZ strategy is targeting profitability within the next 12 to 18 months through its diversified range of verticals, merchant partners, quality customer base, product optimisation and improved margins.

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