ASX Announcement
12th August 2021

Openpay Q4 Results

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Openpay delivers continued strong growth in core business whilst setting the strategic foundations for step-change growth in the US and UK

Q4 FY21 Key highlights:

  • Strong growth delivered across the following leading indicators in Q4 FY21:
    • Active Plans hit 2.0m, up 141%, vs pcp (prior comparable period: June 20)
    • Active Customers of 541k up 69% relative to pcp with 51% of Active Customers from UK, even before anticipated customer injection from Payment Assist acquisition
    • Highest-ever 84% of new plans from Repeat Customers, 53% of Active Customers with multiple plans
    • Active Merchants of 3.8k up 77% relative to pcp – the highest increase of new Active Merchants number on record
    • Maintained strong volume growth dynamic, with an increase in TTV, up 46% vs pcp to $92m, even before adding significant Payment Assist transaction volumes
  • Opy USA going live in the world’s largest developed BNPL market in early October 2021, anchored by integration with large wholesale merchant aggregators and key strategic partnerships in our preferred core verticals of Healthcare, Automotive and Home Improvement
  • Payment Assist acquisition will further accelerate UK growth and entrench Openpay’s position as a global leader in the BNPL Automotive vertical
  • Significant platform partnerships signed with global and local ecommerce providers, including Adobe, Quest Payment Systems, One Step Checkout, Shopwired, Aero Commerce and Apparel 21 to drive future growth at scale across all key verticals
  • Significant funding package approved by shareholders, raising $37.5m equity via an oversubscribed institutional placement, $25m debt facility, and an $8.7m share purchase plan, providing a strong cash position into FY22
  • Key C-Suite promotions in Australia coupled with further recruitment of highly experienced US executive team members in readiness for US launch
  • Online investor briefing webinar be held today at 2:30pm AEST.

MELBOURNE Australia, 28 July 2021: ‘Buy now. Pay smarter.’ company, Openpay Group Ltd (ASX: OPY) (Openpay or the Company) is pleased to release its quarterly business update for the period ended 30 June 2021 (Q4 FY21).


Openpay CEO, Michael Eidel commented: “The June quarter was perhaps the most pivotal for Openpay since we announced our US launch in December. Headlining the quarter was our acquisition of leading UK BNPL Auto provider, Payment Assist. The combination of their strong, profitable franchise in Auto with our organic launch in Healthcare in June creates a formidable player in the UK BNPL market with significant growth synergies.


We are putting the finishing touches on our launch into the US market, targeting go-live in our key Healthcare vertical in early October 2021. This will present another major step forward for Openpay and the first of many very significant commercial opportunities for Opy USA. These landmark organic and inorganic achievements provide the market with even more clarity into Openpay’s strategic focus on specialised verticals and highlight our strong global growth and path to profitability.”

Steady growth across all leading indicators, UK Active Customers overtake Australia

Active Plans increased 141% vs pcp and 16% QoQ – reaching 2.0m, driven by the continued recovery of bricks and mortar growth rates in Openpay’s specialised verticals (particularly Healthcare and Automotive). Openpay’s plan mix is comparatively longer-term and higher value with 90% of TTV from plans three months or longer during Q4 FY21.

An Active Customer growth rate of 69% vs pcp was achieved at an aggregate level across all merchant verticals, and Openpay finished the quarter with 541k Active Customers. 51% of Active Customers were from the UK. Strong customer engagement and awareness led to the highest-ever percentage of plans being held by repeat customers at 84%, with more than every second customer holding multiple concurrent plans.

Overall, Active Merchants grew by 77% vs pcp to 3.8k as at Q4 FY21 and by 11% QoQ, helped by Openpay’s automated Merchant onboarding system. New integrations with eCommerce platforms and point of sale provider partnerships also contributed to the strongest y-o-y growth in number of Active Merchants on record.

Crystalising our global strategy: ‘Think global. Act local.’

With the strong progress in the UK and USA, Openpay’s first two overseas markets, the Company is consolidating in its strategy to truly focus on verticals where its longer, larger and customised plans make a true difference and provide a significantly differentiated offering from most providers who predominantly focus on ‘pay-in-4’.

Team changes to drive strategy on global and local levels

A catalyst for success is having the organisational structure in place to deliver with strong local teams on Openpay’s global strategy. Several team moves have been put in place to support Openpay’s strong continued business growth and advance its global mission of ‘changing the way people pay, for the better’.


Michael Eidel remains the company’s Group CEO, leading on global strategic execution as the Company continues to expand in Australia/New Zealand and push into UK and US.

Dion Appel has been appointed CEO ANZ, stepping up from Chief Commercial Officer to assume the responsibility for the Australia and New Zealand business, driving growth, innovation and partnerships within the region.

Ed Bunting has been appointed new Group Chief Operating Officer (and will also continue as General Counsel and Company Secretary), and Theresa Abela has been appointed Chief Risk & Compliance Officer.

Strong customer engagement and awareness led to continued repeat usage of Openpay plans. Whilst the share of repeat customers remained stable at a high 77% due to the significant increase of new customers in Q2, close to every second customer had multiple concurrent plans with Openpay at the end of the quarter. 32% of Active Customers finished the quarter with an Active Plan at more than one Merchant, up 88% on the pcp level, while there was a total of 3.1 Active Plans per Active Customer, up 94% on pcp.

Global partnership with Adobe Exchange enables merchant acquisition at scale

Openpay has been accredited as a global Accelerate partner in the Adobe Exchange Partner Program. As an Accelerate partner, Openpay’s offering will be marketed directly to Adobe Commerce and Magento Open-Source customers around the world. These platforms are currently servicing thousands of merchants in Openpay’s key markets.

Adobe Exchange is a robust eCommerce platform that blends digital commerce, order management, and predictive intelligence to enable online shopping across a wide array of industries and business models (B2C, B2B and hybrid). Adobe offers an enterprise-level, cloud-hosted application, Adobe Commerce, and a free ecommerce solution, Magento Open Source, that services the needs of companies of all sizes with flexible, digital commerce solutions to successfully enable transactions across channels.

Openpay’s instalment payment platform is available now in Australia, UK and US for merchants to register for the new digital payment capabilities.

Openpay AU: Achieving scale through platform partnerships across all verticals

Going live with Quest Payment Systems and Apparel 21 through Payment terminals and POS

Through the quarter, Openpay continued to sign and integrate with major platform and aggregator partners to enable merchants to simply “switch on” Openpay as a payment type. This strategy is designed to deliver transaction volume and merchant growth at scale (rather than signing up merchants one-by-one).

An Australian partnership was signed with Quest Payment Systems, enabling Openpay to become a tender type (alternative payment option) on the payment terminals throughout Quest’s merchant base which is aligned to Retail, Healthcare and Home Improvement verticals.

Openpay will partner with Apparel 21, the leading POS vendor in Australia and New Zealand in retail and fashion. Apparel 21 provides payment solutions to over 120 brands, representing more than AUD $6b in annual turnover. Under the agreement, Openpay will be made available as an opt-in payment solution to Apparel 21 merchant customers.

Openpay further strengthens its leadership position in the Australian Automotive vertical

The exclusive integration of Openpay’s product offering into Pentana Solutions’ leading Car Dealer Management System, eraPower has been completed for car servicing at dealerships. This now provides unparalleled access to the more than 2,600 car dealerships for car repairs, services and accessories many of which operate on the eraPower platform (representing approximately 60% of the total Australian dealership market.) This rollout delivers mutual benefits to Openpay and the dealership market. In Q4, Openpay’s average plan size in the dealerships segment of Automotive was $859, a 91% uplift compared with other (non BNPL) payment options, enabling safer cars to be back on the road sooner.

More significant partnerships in other verticals

Healthcare

Our Healthcare vertical remains a core strategic focus. During the quarter this was further strengthened as follows:

• Following the recent announcement of Openpay’s entry into the hospital segment with St John of God Healthcare, Openpay has been gaining strong momentum in the hospital sector, having recently signed an agreement with Self Pay Surgery who are backed by one of the largest healthcare providers in Australia, Healthe Care. Strong engagement continues with several other key hospital groups.
• Openpay has been selected to become VetPartners’ preferred BNPL provider and will be rolling out to their network of over 240 practices in FY22.
• Openpay signed an agreement with Optical Growth Partners to be utilised by their expanding network; the buying group and managed services offering for all independent optometry practices in Australia.
• A partnership was signed with Australian Medical Association (WA) to support Openpay’s growth in hospitals and with medical specialists.

Retail

Openpay continues to increase its growth in Retail with significant retail vertical merchant partnership signings through the June quarter including major retailers, Samsung, Mountain Designs, Harris Scarfe, City Beach and Associated Retailer Limited (ARL), which owns Toyworld and Sportspower; as well as Nourished Life, Oz Hair and Beauty and AMR Beauty.

Memberships

In Memberships, Openpay continued its growth, particularly in sports, through additional signed merchants including AFL clubs, Richmond, St Kilda, Fremantle Dockers and Brisbane Lions.

Education

In the Education vertical, Connect Skills (Real Estate training), Inspirited Solutions (Wellbeing Education), and Maintraining (Course Creation Specialists) all signed on in the June quarter. In addition to the cash flow benefits, education providers find Openpay’s BNPL services help convert sales and deliver a large reduction in payment collections administration.

OpyPro B2B SaaS platform update

OpyPro, Openpay’s differentiated B2B SaaS platform continued to deliver strong growth with Woolworths Group. Transactions have grown substantially month on month whilst we continue to onboard their trade business customers to the platform which is now functioning instore and online.

In partnership with Lumi, Openpay is now also able to offer a funded B2B solution, OpyPro + Credit. This partnership enables the platform to deliver end-to-end payment experiences, including funding for the merchant’s B2B customer should they want to include this in the offering beyond Openpay’s core B2B SaaS solution.

The OpyPro pipeline of new partnerships is maturing with new B2B partnerships expected to be announced early in Q1 FY22.

Openpay UK outstrips AU in total Active Customers

During Q4 FY21, Active Plans increased 21% QoQ to 0.8m and 329% vs pcp. UK Active Plans represented 40% of all Active Plans for the quarter.
Active Customers were up 10% to 276k QoQ, making up 51% of overall global Active Customers for the quarter.

New UK partnerships place Openpay in front of thousands of new merchants

The UK strengthened its Retail offering during the June quarter, going live with well-known brands including Monsoon and Accessorize, Maplin, Dartington Crystal, The Hut and Glossybox as well as bigger ticket retail brands including Snug sofas and Decorating Centre Online where our longer length, higher value plans provide UK consumers with a budgeting tool to manage their cashflow for home improvement. Sport continues to be a winning formula for the UK, with team additions including Oldham Athletic, Charlton Athletic FC, Northampton Town FC, Coventry City FC and RedBull E-sports.

The UK’s move into Healthcare, through its integration with ezyVet veterinary software platform, continues strong momentum with its ‘Buy now. Pay smarter.’ payment plans being made available in store to consumers from early FY22 through a recent signing with Pennard Vets veterinary group.

Openpay UK has also signed key partnerships and integrations with a number of ecommerce platform providers:
One Step Checkout, the leading Magento extension that simplifies checkout to reduce cart abandonment and improve checkout conversion and works with over 20,000 global Magento 1&2 Merchants, facilitating more than $8b in annual transaction volume. Openpay AU and UK are now fully integrated as part of the One Step Checkout system.

Openpay has signed an integration partnership with Shopwired, one of the UK’s fastest growing and best-rated ecommerce platforms. Shopwired provides ecommerce services to over 8,500 UK SME merchants. Under the agreement, Openpay will be the exclusive recommended BNPL partner. Integration is due to complete in early August, with potential to expand to other markets in future.

Openpay is also now fully integrated with Aero Commerce, a fast-growing open-code ecommerce platform. Via this channel, Openpay is being offered to the multiple merchants using the Aero ecommerce platform.
These partnerships add to Openpay’s strong and growing list of agreements with ecommerce platforms and payment processors. Integration has either been deployed or is expected to be completed across all agreements during the current quarter, Q1 FY22.

For a full strategic update, please view Openpay’s updated investor presentation provided to the ASX in conjunction with this announcement.

View our ASX announcements here.

For further information, please contact:

Investors
Ed Bunting
Company Secretary
Mobile: +61 401 555 333
Email: investors@openpay.com.au

Media
Jane Lowe
IR Department
Mobile: +61 411 117 774
Email: jane.lowe@irdepartment.com.au

About Openpay

Openpay Group Ltd (ASX: OPY) is a fast-growing and highly differentiated player in the global ‘Buy now pay later’ (BNPL) payment solutions market. The Company’s strong platform enables it to deliver the most flexible plans in the market with durations of 2–24 months and values of up to $20,000.

Openpay focuses on industries where it can make a true difference: Automotive, Healthcare, Home Improvement, Memberships and Education; and its target customers are finance-savvy and of an older demographic who use Openpay plans as a cashflow management tool.

Openpay also has a unique B2B offering, OpyPro (formerly Openpay for Business), a SaaS-based platform that allows companies to manage trade accounts end-to-end, including applications, credit checks, approvals and account management in the one system.

Openpay provides services to Customers and Merchants in Australia, New Zealand, the UK and entered the US market, under the brand name Opy, in December 2020.

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