Announcement PDF 22 May 2024 ASX RELEASE Plenti Annual Report 2024 Plenti Group Limited (ASX:PLT) provides the attached Annual Report 2024. Authorised for release by the Board of Plenti Group Limited. For more information please contact: Daniel Foggo Chief Executive Officer shareholders@plenti.com.au Miles Drury Chief Financial Officer About Plenti Plenti is a fintech lender. We provide faster, fairer loans by leveraging our smart technology. We offer award-winning automotive, renewable energy and personal loans, delivered by our proprietary technology, to help creditworthy borrowers bring their big ideas to life. Since our establishment in 2014, our loan originations have grown consistently, supported by diversified loan products, distribution channels and funding, and underpinned by our exceptional credit performance and continual innovation. For more information visit plenti.com.au/shareholders. Plenti Group Limited ABN 11 643 435 492 Building Australia’s best lender Annual Report 2024 Annual Report FY24 Plenti uses smart technology to provide faster, fairer loans so our customers can bring their big ideas to life. Our ambition is to build Australia’s best lender. About Plenti Loan portfolio ($m) We offer award-winning automotive, renewable energy and personal loans, delivered by our proprietary technology. Since our establishment in 2014, our loan originations have grown strongly, driven by our leading technology and the innovation we continually bring to market. Our growth has been supported by our diversified loan offerings, broad customer reach, diversified funding, and the strength of our credit performance. Our purpose 2,138 1,766 1,300 To bring our customers’ big ideas to life Our vision Faster, fairer loans through smart technology 615 Our mission FY21 FY22 FY23 FY24 To build Australia’s best lender 1 Contents 2 FY24 highlights 6 Chairman’s message 7 CEO’s message 8 Our strategy 9 Operational overview 14 Environment, social and governance 18 Board & management 20 Directors’ report 47 Financial statements 94 Shareholder information About this report This FY24 Annual Report for Plenti Group Limited (ACN 643 435 492) is issued on 22 May 2024. Shareholders can request a printed copy of the Annual Report, free of charge, by emailing or writing to: Plenti 14 Martin Place SYDNEY NSW 2000 shareholders@plenti.com.au 2 Annual Report FY24 FY24 highlights Operational highlights Renewable energy Automotive Personal Continued optimisation of loan volumes, versus lending net interest margins and credit appetite, whilst laying strong foundations for growth via the launch of the ‘NAB powered by Plenti’ car loan. Strong lending growth reflecting the winning of new referral partners and the successful launch of Plenti’s innovative GreenConnect platform to help package solar, battery and energy plan solutions for customers. Enhanced end user experience through increased automation rates and improved processes, whilst helping to increase operational efficiency. Loan portfolio Loan portfolio Loan portfolio 1,223m $ 23% on pcp 273m $ 36% on pcp 643m $ 13% on pcp Financial highlights Strong P&L performance Strong portfolio growth Differentiated credit performance Revenue Loan portfolio 90 day arrears $ $ 211m 47% 2.14bn 21% Cash NPAT Loan originations $ $ 6.1m 36% 1.2bn 6% 58bp 16bp Annualised credit losses 106bp 38bp 3 Our growth highlights Loan portfolio ($m) Strong loan portfolio growth achieved, whilst optimising across lending volumes and net interest margins. $ 21% on pcp 1,766 1,300 615 381 254 148 72 FY17 1. FY18 Prior corresponding period. FY19 FY20 FY21 FY22 2,138 FY23 FY24 1 4 Annual Report FY24 Our journey so far Since launching in 2014 with an ambition to deliver marketing-leading customer experiences, Plenti has grown consistently to become Australia’s largest fintech consumer lender Automotive Personal 2022 Partnership with AGL established to accelerate home solar‑battery uptake POST‑IPO Borrowers/Investors Renewable energy Achievements 2020 Renewable energy and personal loan ABS transaction completed $280m PRE‑IPO Warehouse funding facility established for renewable and personal loans Cash NPAT profitability achieved Supported customers through COVID period Launched first automotive manufacturer integration 2014 – Launched as Australia’s first licensed peer‑to‑peer lender – Introduced granular risk‑adjusted pricing to Australian personal loan market – Introduced innovative digital end‑to‑end borrower experience with unique ‘RateEstimate’ rate quote technology 2015 $1.0bn cumulative loans funded 2021 – Carsales invests $10m 2017 – Renewable energy lending launched – supported by $20m in CEFC funding 2023 Automotive loan for commercial customers launched with market‑leading digital experience – Secured automotive lending launched – supported by funding from several banks 2018 – Adelaide office established – Appointed exclusive administrator for Home Battery Scheme in South Australia – $100m of funding secured from CEFC to support renewable energy lending in South Australia Inaugural asset‑backed securities transaction completed $306m Electric vehicle loan offering and integration with Tesla launched to help Australia transition to EV ownership 2019 – Direct‑to‑consumer secured automotive loan launched – First bank warehouse funding facility established for secured automotive loans Second automotive warehouse established with dedicated EV‑specific tranche $0.5bn cumulative loans funded Loan portfolio reached $1bn 2020 – Appointed exclusive administrator of Empowering Homes Program pilot by NSW Government – Rebranded as Plenti from RateSetter – Listed on the ASX in a $280m IPO Launched Notes Market in the Plenti Lending Platform $2.5bn cumulative loans funded >100,000 borrowers Launched GreenConnect, an industry-first platform that brings together equipment, installation, VPP and finance offerings to make household renewable energy more affordable Signed strategic partnership agreement with NAB, initially to focus on the launch of a ‘NAB powered by Plenti’ car and EV loan, and then offering renewable energy finance solutions to NAB customers 2024 Renewable energy and personal loan ABS transaction completed bringing total ABS issuance to over $2.1bn Pilot OEM dealership partnership launched 5 Technology‑led lending Using technology to build Australia’s best lender Superior customer experiences Rich partner integrations We’ve built a market‑leading technology platform Advanced credit analytics Fast Fast approvals Scalable Extensible Efficient Our platform by numbers ~ > Engineers, product managers and designers 99.5% ~ 56 Uptime over the past 12 months Deployments of new products and features per day 103 ~ 2.4m ~ Web and API requests from customers and partners per day Up to Credit algorithms and rules evaluated per credit decision 5 5,630 Payments processed per day 6 Annual Report FY24 Chairman’s message Plenti has grown and matured significantly since I was appointed Chairman in July 2020. At that time Plenti was managing a loan portfolio of less than $400 million, and whilst the Company was achieving exciting growth and driving substantial innovation, we knew we would need to deepen its foundations across capabilities such as people and culture, corporate governance, risk management, and cyber security to ensure a smooth transition into a larger business, with a multi-billion dollar loan portfolio. Today, Plenti has a loan portfolio of over $2.1 billion, and in my view has the people, infrastructure and practices not just to manage its current scale but to achieve the much larger scale we plan for Plenti to reach over the medium term. Reflecting on the last year I am immensely proud of how effectively Plenti has solidified foundations to help ensure the business can achieve its potential whilst maintaining its entrepreneurial culture and growth mindset. Plenti’s performance in the last year has been especially strong in the context of the broader market. Over a period when many lending businesses have seen their loan portfolios stagnate and their profitability decline, Plenti has continued to grow its loan portfolio at a responsible rate, whilst delivering strong growth in Cash NPAT. This performance is testament to the resilience and adaptability of our business model, the pricing advantages our simple customer experiences afford us, the benefits of our diversification across numerous lending channels, our diverse funding, and sound capital management. Despite the challenges posed by increases in funding costs, higher market credit losses, and intensified competition in some quarters, we have remained steadfast in our commitment to delivering sustainable, long-term profitability and value for our shareholders. Advancing our funding program remains a significant priority. In the past year, we have executed two ABS transactions, bringing our total ABS issuance to over $2.1 billion, while further increasing the breadth of domestic and international investors supporting our capital markets program. One of the key attractions of Plenti’s business model is that it competes in prime credit segments of lending. This not only provides the business with a large growth runway, but helps it to deliver strong and predictable credit outcomes, as we again witnessed in the last year. A highlight of the year was signing a strategic partnership agreement (including an equity investment agreement) with NAB. This strategic partnership represents a significant milestone for Plenti, as it not only validates the strength of our business capabilities but also opens doors to exciting new opportunities for growth and innovation. The initial focus of this partnership is delivery of a ‘NAB powered by Plenti’ car loan, which we believe has the potential to be disruptive to the large automotive financing landscape. We see strong potential to continue collaborating closely with NAB – combining NAB’s trusted brand and deep customer relationships with Plenti’s award-winning consumer finance experiences, efficiency and technology – to introduce new products and services beyond our initial automotive and renewable energy finance offerings. I would like to thank my fellow Directors for all that they have contributed during the year. I also wish to recognise the exceptional work of the entire Plenti team for delivering the strong results set out in this annual report. Finally, on behalf of the Board, I would like to thank you for your ongoing support as shareholders of Plenti. Yours faithfully, Mary Ploughman Chairman 7 CEO’s message When we first embarked on building Plenti in 2012 we were confident we could build an enduring business that set new standards in customer experience, whilst also contributing positively to the Australian financial system. A lot has changed since then, both in Australia’s lending markets and within Plenti. However, our commitment to leveraging our technology to set new standards in speed, simplicity and service, and our desire to shift finance from being a friction to being an enabler of our economy, remain firm. We have now set our sights further, as we make strong progress towards achieving our more recently defined mission, which is to build Australia’s best lender. We have helped over 180,000 Australians bring their dreams to life, whether that has been financing the purchase of a car to get to work, or financing the installation of a solar battery system to help reduce their energy bills and carbon footprint. We have done this whilst achieving outstanding customer feedback, with more 5/5 star ratings (across major review websites) than any other lender in Australia, whilst also achieving an NPS of over 70, showing we really are ‘raising the bar’. Over the past year, we have driven strong loan portfolio growth and increased our profitability. This can be attributed to our focus throughout the year on: ■ Optimising our loan origination volumes whilst preserving net interest margins and borrower credit quality, in recognition that short-term growth is only part of the equation when building profitability over the longer term ■ Further streamlining and simplifying our processes to help drive efficiencies as we scale, as evidenced by the decline in our cost-to-income ratio to below 27%. Notably, at the end of 2023, we completed the wind-down of all support services that were previously provided out of Manila, Philippines, mostly by increasing levels of automation in our day-to-day activities ■ Ensuring we manage credit risks prudently, which resulted in the tightening of our credit appetite during the year, especially in personal loan channels, in recognition of current pressures on household budgets ■ Making daily enhancements to our technology platform, to improve everything from customer experience to resilience against cyber threats. These enhancements ensure that we remain at the forefront of technological innovation and are equipped to meet the evolving needs of our customers The most exciting development of the year was the execution of our strategic partnership with NAB, as announced in November 2023. This followed an extensive period of engaging with NAB to determine how we can best combine our strengths to achieve our respective goals and ambitions. Our team has since been working very closely with NAB and executing preparations for the launch of our first joint product, a ‘NAB powered by Plenti’ car loan, which is expected to launch to initial target customer segments in the first quarter of the new financial year. More generally, we see our strategic partnership with NAB as providing an important new pillar to our business, supporting our ambitions for Plenti’s scale, diversity, and profitability, and which will support our aspirations across technology leadership, product differentiation, brand recognition, and impact. Looking ahead, we see exciting opportunities to continue to innovate and drive our growth across each of our key verticals – car lending, renewable energy finance and personal lending. To this end, our focus areas for FY25 will include: ■ Growing our core lending activities by expanding our product offerings and reaching new customer segments ■ Delivering on opportunities presented through our strategic partnership with NAB ■ Investing in our technology and data capabilities to drive further differentiation and underpin future growth and profitability I thank each Director for the valuable advice and support they provide across many facets of our activities. We continue to benefit from a highly engaged and motivated Board, who continues to support Plenti in delivering differentiated results for our shareholders. Finally, I thank our team of now over 200 Plentineers, the team who ‘make it happen’. I am grateful for each Plentineer’s ongoing commitment to supporting our ambitions. The capabilities of our team give me great confidence that we will continue to outperform and deliver value for our shareholders. Yours truly, Daniel Foggo CEO 8 Annual Report FY24 Our strategy Our ambition is to further develop Plenti into a large, highly diversified and highly profitable business. Our strategy for achieving our ambitions centres around differentiating Plenti’s capabilities across its technology, product and distribution diversification, credit capabilities and team engagement. Technology leadership Diversification Team engagement Plenti has a strong track record for setting new standards across customer and partner experience, speed of activities, cadence of innovation and improvement, depth of partner integrations, and levels of operational efficiency. The setting of new standards in these areas is commonly facilitated by Plenti’s ownership of its own technology platform, which is operated and constantly enhanced by its in-house engineering team. Since its inception, Plenti has consistently added to the diversity of its loan offerings, its distribution channels, and its funding sources, with the ambition of building strength and resilience through its diversity. An example of this diversification includes the expansion of its focus from personal loans to renewable energy finance, and then to automotive finance; and in relation to the latter, the expansion from consumer to commercial customers. This continual diversification has helped underpin Plenti’s growth, whilst also making it a more resilient business which is better able to withstand disruption to any particular market or activity. Plenti is a founder-led business, with a strong track record for attracting and retaining exceptional talent across its business functions. Typically talent will be recruited not because of their years of experience at a traditional lender, but because of their creative thinking abilities and dedication to tackling problems, including finding new ways to more effectively achieve real-world outcomes. Plenti continually invests in its technology platform to drive further innovation and product improvements. In the past year, key technology improvements have focused on loan application speed and efficiency, the development of APIs to facilitate rich integrations with referral partners, and enhancements to the technology underpinning Plenti’s credit decisioning and pricing activities. Strategic priorities Technology leadership Diversification Credit excellence Team engagement Plenti’s strategy is to further leverage its technology capabilities to broaden its activities efficiently and effectively, most notably by entering into adjacent lending markets and by working with new, large referral partners. Credit excellence Plenti has an outstanding track record for delivering predictable (and relatively consistent) credit outcomes, underpinned by a relentless focus on attracting and funding creditworthy borrowers. Plenti also has a strong track record for bringing new levels of sophistication to the loan application and approval processes, as well as to pricing loans according to the risk represented by the underlying borrower. Plenti’s risk-adjusted pricing differentiation dates back to the launch of its personal loan offering in 2014, when it introduced granular risk-adjusted pricing, leveraging more data than just an applicant’s credit score, as was common at that time. Plenti’s strategy is to continue to attract and retain talented credit executives, to continue to invest in its credit decisioning technology, and further enhance its use of data to refine its credit models and enhance the sophistication and accuracy of its loan pricing. Plenti has developed a strong and identifiable culture, as characterised by its four cultural values. ■ Be the best – We give it 100% – We embrace big, innovative ideas and tackle hard things – We raise the bar ■ Make it happen – We are empowered – We work as a team – We go above and beyond and get the job done ■ Think like a customer – We see it from our customer’s perspective – We make it simple – We love feedback ■ Do what’s right – We respect each other – We exceed regulatory expectations – We help shape our industry for the better Over the year ahead, in addition to building on the above competitive strengths, Plenti will apply particular focus to ensuring the effective delivery of new products via its strategic partnership with NAB, and to further enhancing its use of data across all business activities. Plenti’s strategy will continue to be refined as it leans into its commitment to building a sustainable and profitable business which delivers strong returns for its investors. 9 Operational overview Automotive lending Plenti has established a meaningful presence in the ~$35 billion secured automotive loan market since launching its secured automotive offering in 2017. Secured automotive lending remained the largest volume vertical during the year, with loan originations of $624 million, up 9% on the prior year, and automotive loan portfolio growth of 23%. More moderate loan origination growth compared to prior years reflected a continued focus on margins and offsetting funding cost increases experienced during the year, as well as adjustment of credit risk settings to ensure stability in credit outcomes. Plenti’s proprietary technology platform continued to provide a significant advantage relative to traditional lenders encumbered with legacy technology, facilitating the delivery of market-leading customer approval, settlement and funding experiences across a broad range of distribution channels. Plenti maintained its focus on further enhancing its market‑leading automotive loan application experiences, extending its distribution capabilities through digital and broker referral partners, developing a highly effective sales team, enhancing its fast and efficient loan processing capabilities, and advancing its automotive funding program. $ 1,223m Loan book 23% on pcp 1. Management estimate. Loan originations ($m) 639 Additionally, Plenti’s presence was expanded into the automotive dealership channel, with pilot programs commencing in the final quarter of the year with both large dealership groups and manufacturer partners. Several product and technology enhancements were delivered over the year, including enhancing our proprietary credit underwriting engine to increase the portion of both consumer and commercial loans that were decisioned on an automated basis, extending eligible commercial finance assets to include trucks and light commercial vehicles (up to 12 tonnes), and improving the customer application process for automotive loans acquired via the direct-to-consumer channel. In addition to improving the cost-of-acquisition for automotive loans acquired via the direct channel, these application improvements will support the launch of the ‘NAB powered by Plenti’ car and EV loans. Plenti’s ongoing automotive lending activities were supported by the completion of a $406 million secured automotive loan ABS transaction, bringing total secured automotive ABS issuance to over $1.1 billion. 9% on pcp 231 FY21 FY20 FY22 FY23 FY21 FY24 FY22 Closing loan book ($m) 1,223 998 23% on pcp 745 264 FY21 FY20 45% 624 572 FY22 35bn+ > $ New car loan funding Annual lending 1 ~3% estimated Plenti market penetration FY23 FY21 FY24 FY22 10 Annual Report FY24 Operational overview Renewable energy lending Plenti is committed to helping Australian households transition to a clean energy future through financing the installation of solar panels and home batteries. Renewable energy loan originations further accelerated year-on-year, increasing by 31% to $160 million, against a 6% increase in overall growth in the installation of household solar systems across Australia, which reached 339,498 in 2023, up from 315,449 in 2022. The market continued to benefit from favourable trends, including: ■ Continued significant increases in household energy costs (up 4–25% in 20232), making the economics of solar and solar battery systems more appealing ■ Increase in proportion of systems installed with batteries, now 16% of total installations, up from 7% in 2022, driving demand for finance given the higher cost of these systems ■ Government programs continuing to promote/subsidise the installation of household renewable energy systems and electrification technologies such as solar and heat-pump hot water Plenti increased market share by continuing to expand its accredited referral partner network, supported by its diverse product offering which allows referral partners to offer both interest-free finance and simple interest-bearing green loan solutions at Loan originations ($m) 160 the point-of-sale. Additionally, the range of equipment eligible to be financed was expanded to include a range of electrification technologies including solar and heat-pump hot water, energy efficient air-conditioning and EV charging systems. Lending growth was supported by the development of Plenti’s GreenConnect offering, an innovative point-of-sale platform that brings together product manufacturers, energy retailers, installers, and Plenti’s cost-effective finance to provide households with access to a broad selection of more affordable home solar-battery systems. Through this platform both installers and customers can access a range of incentives for connecting a battery storage system to a virtual powerplant (VPP), including equipment discounts, upfront cash incentives and energy bill credits. With these incentives, battery system costs can be reduced by up to 25%, helping drive customer demand for both systems and related finance. 57 FY21 FY22 FY20 700 Partner network of renewable energy equipment vendors 273m 26% Loan book 36% on pcp 1. Clean Energy Council Australia – Clean Energy Report 2024. 2. Treasury estimates. Funding with batteries FY21 FY24 FY22 273 201 36% on pcp 142 86 FY22 FY20 $ FY23 Closing loan book ($m) FY21 > on pcp 98 In 2023, GreenConnect facilitated over 12MWh of VPP connected storage, and is now the largest VPP and orchestration aggregator in Australia. Since inception, Plenti’s renewable energy lending has facilitated the installation of over 35,516 solar and solar-battery systems, helping deliver significant carbon savings estimated to equal 72,936 tonnes of CO2 per year. 31% 122 FY23 FY21 FY24 340k FY22 ~ Households installing solar annually 1 ~10% estimated finance market penetration 11 Personal lending Loan originations ($m) 437 Personal loan originations were $418 million, down 5% on the prior year but driving loan book growth of 13% given the strong loan origination growth achieved in the prior years. Moderation in loan originations across both direct-to-consumer and broker introduced loans reflected a broadly flat overall personal loan market as well as a more conservative approach to pricing, focused on maintaining net interest margins and some tightening of credit appetite through the year to support the future delivery of stable credit outcomes. Growth in originations via the direct-to-consumer channel continued, growing 17%, due to continued investments in direct origination marketing, technology and capabilities. This enabled Plenti to improve the customer experience for new and repeat customers, reduce application processing and decisioning times, and further optimise customer acquisition costs. In particular, further investments in enhancing Plenti’s automated credit decisioning engine, and new marketing automation and customer nurture tools, delivered improvements in funnel conversion rates. The improved use of data assisted in leveraging the over 950,000 profiles in Plenti’s ecosystem1 to drive additional originations from repeat and cross-sell borrower customers. Loan originations were also supported by sustained selection of Plenti’s loan offering by leading mortgage and asset finance brokers, who continued to find Plenti’s speed, ease of application and funding experience to set the standard amongst personal loan providers. 418 365 5% on pcp 183 FY21 FY20 FY22 FY23 FY21 FY24 FY22 Closing loan book ($m) Plenti’s ongoing personal loan activities were supported by the completion of a $375 million personal loan and renewable energy receivables ABS transaction. 643 568 13% on pcp 413 264 FY21 FY20 9,000 643m 950k FY22 FY23 FY21 12bn > $ > $ Network of accredited broker partners 17 loan aggregator partners Loan book Customers in ecosystem Annual lending opportunity2 3% estimated market share 13% on pcp 1. Profiles in ecosystem represents current and past borrowers and investors, and loan applicants. 2. ABS 5601.0 Table 27 LTM to Jun‑20. FY24 FY22 12 Annual Report FY24 Operational overview Credit performance Plenti is focused on lending to creditworthy borrowers and has, since its launch to customers in 2014, delivered predictable credit outcomes. Credit outcomes and lending profitability have been supported by Plenti’s ongoing investment in its people, credit analytics and credit decisioning and pricing technology. As Plenti has scaled, to have now funded over $4.5 billion in loans to over 180,000 borrowers, it has been able to leverage an increasingly rich pool of historical data to enhance its credit decisioning and loan portfolio management. Specifically throughout FY24, Plenti focused on using its historical credit performance data to perform advanced analytics, enabling it to increase its credit decisioning automation levels. These improvements helped to deliver enhanced customer experiences, with faster, more consistent decisions as the year progressed, whilst maintaining Plenti’s track record for achieving a strong, predictable credit performance. FY24 was characterised by credit losses across lending markets returning toward pre-COVID levels, following a period of exceptionally low delinquency and losses. Plenti’s net loss rate was 1.06% of its average loan portfolio, versus 0.68% in the prior year, which overall was a pleasing performance and consistent with Plenti’s expectations. The average credit strength of Plenti’s loan borrowers (at time of application) continued to improve during the year, following credit appetite refinements made at the start of the financial year, as indicated by the weighted average Equifax CCR score of underlying borrowers increasing to 835, from 831 in the prior period. During the past year Plenti’s credit risk, credit analytics and data teams pursued three important priorities, being: ■ To increase access and use of company, applicant and external data to improve insights and learnings, to better inform the design of pricing and operational processes ■ To increase automation rates across credit decisioning and loan settlement processes, to provide faster a