H1 FY17 RESULTS PRESENTATION

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This presentation has been prepared by Afterpay Holdings Limited (ACN 606 589 520) (Afterpay or the Company). The information contained in this presentation is current at the date of this presentation. The information is a summary overview of the current activities of the Company and does not purport to be all inclusive or to contain all the information that a prospective investor may require in evaluating a possible investment. It is to be read in conjunction with the Company’s disclosures lodged with the Australian Securities Exchange, including the Company’s half year results lodged with the Australian Securities Exchange on 17 January 2017. The material contained in this presentation is not, and should not be considered as, financial product or investment advice. This presentation is not (and nothing in it should be construed as) an offer, invitation, solicitation or recommendation with respect to the subscription for, purchase or sale of any security in any jurisdiction. This presentation is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor which need to be considered, with or without professional advice, when deciding whether or not an investment is appropriate. This presentation contains information as to past performance of the Company for illustrative purposes only, and is not – and should not be relied upon as – an indication of future performance of the Company.

To the maximum extent permitted by law, Afterpay makes no representation or warranty (express or implied) as to the accuracy, reliability or completeness of any information contained in this document. To the maximum extent permitted by law, Afterpay will have no liability (including liability to any person by reason of negligence or negligent misrepresentation) for any statements, opinions or information (express or implied), arising out of, contained in or derived from, or for any omissions from this document.

Forward looking statements

This document contains certain “forward-looking statements”. The words “anticipate”, “believe”, “expect”, “project”, “forecast”, “estimate”, “outlook”, “upside”, “likely”, “intend”, “should”, “could”, “may”, “target”, “plan” and other similar expressions are intended to identify forward-looking statements. Indications of, and guidance on, future earnings and financial position and performance, including Afterpay’s FY17 outlook, are also forward- looking statements, as are statements regarding Afterpay’s plans and strategies and the development of the market. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of Afterpay, which may cause actual results to differ materially from those expressed or implied in such statements. Afterpay cannot give any assurance or guarantee that the assumptions upon which management based its forward looking statements will prove to be correct or exhaustive, or that Afterpay’s business and operations will not be affected by other factors not currently foreseeable by management or beyond its control. Such forward-looking statements only speak as at the date of this document and Afterpay assumes no obligation to update such information.

Non-IFRS information

This presentation includes certain financial measures that are not recognised under Australian Accounting Standards (AAS) or International Financial Reporting Standards (IFRS). Such non-IFRS financial measures do not have a standardised meaning prescribed by AAS or IFRS and may not be comparable to similarly titled measures presented by other entities, and should not be construed as an alternative to other financial measures determined in accordance with AAS or IFRS. Recipients are cautioned not to place undue reliance on any non-IFRS financial measures included in this presentation. The non-IFRS information has not been subject to audit or review by Afterpay’s external auditor.

All references to dollars are to Australian currency unless otherwise stated.

The release, publication or distribution of this presentation in jurisdictions outside Australia may be restricted by law. Any failure to comply with such restrictions may constitute a violation of applicable securities laws.

Disclaimer

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INTRODUCTION AND BUSINESS UPDATENICK MOLNAR – MANAGING DIRECTORANTHONY EISEN – EXECUTIVE CHAIRMAN

H1 FY17 FINANCIAL INFORMATIONMATTHEW WALTON – CFO

STRATEGY AND OUTLOOKNICK MOLNAR – MANAGING DIRECTOR

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NICK MOLNAR MANAGING DIRECTOR

ANTHONY EISEN EXECUTIVE CHAIRMAN

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Our customers may not always remember when they purchased but they will remember how we make them feel.

Afterpay makes you feel amazing

THE CUSTOMER THRILL

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Empower people to make shopping feel great for the benefit of all.

OUR MISSION IS CLEAR

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HOW WE DELIVER VALUE

MERCHANTS OFFER THEIR PRODUCTS TO CUSTOMERS WITH A BUY NOW, PAY LATER OFFER

CUSTOMERS RECEIVE THEIR

PRODUCTS IMMEDIATELY

CUSTOMER PURCHASES

PRODUCT4 FORTNIGHTLY PAYMENTS

NO INTEREST, ESTABLISHMENT

OR MONTHLY FEES PAID TO

AFTERPAY

NO ADDITIONAL INFORMATION REQUIRED AT

CHECKOUT

AFTERPAY SETTLES WITH MERCHANTS

UPFRONT (LESS AFTERPAY FEE)

AFTERPAY RETRIEVES FUNDS FROM CUSTOMERS

THROUGH AN AUTOMATED END-TO-END PROCESS

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AFTERPAY INTEGRATES DIRECTLY INTO MERCHANT WEB SITES AND RETAIL ENVIRONMENTS

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OUR APPROACH IS FUNDAMENTALLY DIFFERENT

FOCUS ON RETAIL INNOVATION, NOT FINANCE

PROMOTE RESPONSIBLE CUSTOMER PURCHASING BEHAVIOUR

UNASHAMEDLY CUSTOMER CENTRIC

AFTERPAY IS NOT A DISRUPTOR

TECHNOLOGY AND DATA DRIVEN COMPETITIVE ADVANTAGE

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AFTERPAY IS RESONATING

MERCHANTS

DELIVERING VALUE STRONG ADOPTION

CUSTOMERS

2,600 450,000UP 556 UP 93,234

31 DEC 16 31 DEC 16

DEC 16

2,044 356,766

TODAY TODAY

2,600 450,000

AVERAGE ORDER VALUE

CONVERSION RATE

TOTAL ONLINE SALES

+25% +22% +19%

+20% +28% +17%

+18% +22% +21%

+20% NOT DISCLOSED

+24% +19% +31%

50%

75%

ILLUSTRATIVE RESULTS

JUL 15

RETURNING CUSTOMERS1

1. PERCENT OF PURCHASES IN A MONTH FROM CUSTOMERS THAT HAVE MADE A PRIOR PURCHASE

C. C.

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INITIAL FOOTPRINT ESTABLISHED WITH AUSTRALIA’S BEST RETAIL BRANDS

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MERCHANTS’ PROMOTION OF AFTERPAY DRIVES CUSTOMER ACQUISITION

MERCHANT’S WEBSITE

PROMOTE AT POINT OF PURCHASE

HOME PAGE PROMOTION

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OMNI-CHANNEL ADVANTAGE

CUE ONLINE CUE IN-STORE

Increased shoppers

Higher average order values

Eliminate in-store “lay-by”

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CUSTOMERS LOVE AFTERPAY

LARGEST DEMOGRAPHIC, AND CENTRAL TO RETAIL EVOLUTION

MOBILE FIRST AND TECH SAVVY

CUSTOMER EXPERIENCE MUST BE SIMPLE AND INTUITIVE

SOCIAL IS EVERYTHING

WANT TO USE THEIR OWN MONEY IN SMARTER WAYS

MILLENNIAL TRENDS NOW PERMEATING ACROSS ALL DEMOGRAPHICS

AUSTRALIA AFTERPAY GEN Z

GEN X

BABY BOOMER

MILLENNIALS

MILLENNIALS

OTHER

21%22%

22%

9%

28%19%

6%

73%

MILLENNIALS DEFINED AS BORN 1980-1999; GEN X 1966-1979; BABY BOOMERS 1946-1965SOURCE: ABS; AFTERPAY INTERNAL DATA

WE GET MILLENNIALS

Does anyone remember life before afterpay ?? :P

Kymberlee

Yesterday at 9:37 am • Like • 21 • Reply

> We♥ Afterpay Australia!

I have been using afterpay since the website was miniscule and you only advertised as being partnered with 4 retailers and Afterpay has legitimately changed my life! Things that I would never be able to have now I feel comfortable buying.I feel Afterpay has helped me maintain responsible retail spending in my week to week habits. Afterpay has made Christmas and birthdays easier and just buying things in general. The more retailers the better! I hope one day afterpay becomes offered in every store!

Molly

You and 3.3k others

You guys r awesome… for me shopping day has always been on payday and if I were lucky enough to have anything left over after bills and grocery’s then I could go into the shops and maybe pick a new piece of clothing for one of my children once in a blue moon which makes u feel depressed and crappy as a mother but now I can be content in knowing that if I need to or want to I can jump online and order all three of my kids a full outfit each makes a big difference to OUR lives so thank u from the bottom of my heart for helping me make my kids happy xxxxx

Lindy

1 Hour ago • Like • 4 • Reply

CUSTOMER NAMES CHANGED 13

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THE POWER OF AFTERPAY’S NETWORK

CUSTOMERS COME TO AFTERPAY TO

DECIDE WHERE THEY WANT TO SHOP

REFERRALS AND NEW CUSTOMER ACQUISTION FOR

MERCHANT

CUSTOMERS CONTACTING MERCHANT

ABOUT AFTERPAY

CUSTOMERS DRIVING WORD OF

MOUTH

SOCIAL MEDIA

SOCIAL MEDIA

MERCHANT

AFTERPAY DIRECTORY

NEW MERCHANT ACQUISITION FOR

AFTERPAY

PROMOTES AFTERPAY TO THEIR

NETWORK

VISITS FAVOURITE

BRANDS ONLINE

MERCHANT PROMOTES USE

OF AFTERPAY WITH EMAIL AND

BANNERS

AFTERPAY CUSTOMER

KATIEUNI STUDENT

PART-TIME BARISTA

EARLY TECH ADOPTER

DEBIT CARD HOLDER

MIMCO neeeeeds afterpay!!

Katie

Tuesday at 11:32 am

> Mimco

I don’t know what I’d do without Afterpay

Katie

October 10

EXAMPLES AGGREGATED FROM DIFFERENT CUSTOMERS; CUSTOMER NAMES CHANGED

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GROWTH IS ACCELERATING

MERCHANTS CUSTOMERSUNDERLYING SALES1

2,600 450,000 480$m

ANNUALISED

1. ANNUALISED UNDERLYING SALES BASED ON RECENT MONTHLY SALES PERFORMANCE

FEB 16 FEB 16 FEB 16JAN 17 JAN 17 JAN 17JUL 16 JUL 16 JUL 16

TODAY

PROSPECTUS100

PROSPECTUS38,000

PROSPECTUS35

AGM1,500

AGM250,000

AGM300

Q2FY172,044

Q2FY17356,766

Q2FY17444

TODAY2,600

TODAY450,000

TODAY480

C. C.

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SIGNIFICANT MARKET OPPORTUNITY. WE ARE JUST AT THE BEGINNING…

SOURCE: AFTERPAY ESTIMATES BASED ON NAB ONLINE RETAIL SALES INDEX SEP-16, ABS DATA, INTERNAL AFTERPAY DATA AND ESTIMATES.NOTE: TOTAL AUSTRALIAN RETAIL AND AUSTRALIAN SERVICES AND TRAVEL INCLUDES ONLINE AND OFFLINE

AUSTRALIAN ONLINE

FASHION RETAIL

AUSTRALIAN ONLINE RETAIL

TOTAL AUSTRALIAN

RETAILAUSTRALIAN

SERVICES AND TRAVEL

INTERNATIONAL

AFTERPAY SHARE

$22b $303b $441b ?10% 2.1% 0.2% 0%

0%

SIGNIFICANT AND RAPID CAPTURE OF AUSTRALIAN

ONLINE FASHION RETAIL

BROADENING INTO NEW

RETAIL PRODUCT

VERTICALS

SUCCESSFULLY PARTNERING WITH MAJOR RETAILERS

FOR IN-STORE SALES

FUTURE EXPANSION

OPPORTUNITIES

$3.5b

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EXPANDING ONLINE RETAIL MARKET REACH

3.5b FASHION

PARTNERSHIPS TO DRIVE SMB GROWTH

1.9b PERSONAL AND RECREATION

TOTAL AUSTRALIAN ONLINE RETAIL

1.9b DEPARTMENT STORES

4.2b HOMEWARES AND APPLIANCES

0.8b TOYS

3.7b MEDIA

5.6b OTHER

22b$

SIGNIFICANT RECENT RETAIL PARTNERSHIP ADDITIONS WILL DRIVE GROWTH

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PIPELINE REMAINS STRONGSMB DISTRIBUTION PARTNERSHIPS WILL DRIVE GROWTH AND SUPPORT MARGIN

TOTAL AUSTRALIAN

ONLINE RETAIL

CORPORATE

HIGHER VOLUME, LOWER MARGIN

HIGHER MARGIN, LOWER VOLUME

ASSOCIATION WITH TOP TIER MERCHANTS DRIVES BROADER AFTERPAY AWARENESS AND ADOPTION

NEW PARTNERSHIP WILL ACCELERATE GROWTH AND BROADEN RETAIL CATEGORIES

SMALL TO MEDIUM BUSINESS22b

64% 36%

TOTAL ONLINE MERCHANTS

50,000

$

SOURCE: IBISWORLD; NAB ONLINE RETAIL SALES INDEX DEC-16; AUSTRALIAN RETAIL INDUSTRY PRODUCTIVITY COMMISSION INQUIRY REPORT; COMPANY ANNOUNCEMENTS FROM NETO AND TYRO; AFTERPAY COMPANY ESTIMATES

TYRO 17,000

TOTAL MERCHANTS

140,000

NETO 2,000

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TRANSACTION DATA AND INTEGRITY CAPABILITIES ARE A COMPETITIVE ADVANTAGE

CONTINUOUS DATA ANALYTICS

MORE MERCHANTS

>1.6M TRANSACTIONS>450,000 CUSTOMERS

RETAIL AND CUSTOMER BEHAVIOUR INSIGHTS

TRANSACTION INTEGRITY

REPAYMENT CAPABILITY ANALYTICS

RETAIL, PRODUCT, CATEGORY AND MERCHANT PERFORMANCE

DATA IP TO UNDERPIN FUTURE OPPORTUNITIES

AFTERPAY IS A DATA DRIVEN COMPANY GENERATING LARGE VOLUMES OF HIGHLY RELEVANT DATA AND INSIGHTS

MORE TRANSACTIONS

MORE CUSTOMERS

NET TRANSACTION MARGINH1 FY17 2.7%H2 FY16 2.4%

NET TRANSACTION LOSSH1 FY17 0.7% H2 FY16 0.8%

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UNIQUE BUSINESS MODEL PROVIDES CAPITAL AND RISK BENEFITS

Short tenor drives:

Capital efficiency – >12x capital cycles p.a.

Low funding cost per transaction

Rapid view of bad debts / ability to adjust system rules

No longer term repayment risk / tail risk

SHORT TENOR OF

RECEIVABLES

HIGH TRANSACTION

VOLUME

HIGHLY DIVERSIFIED RECEIVABLES

PORTFOLIO

< 30 DAYS > 12x CAPITAL CYCLES

P.A.

LOW AVERAGE ORDER VALUE

(C. $150)

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…AND HIGH RETURNS ON CAPITAL EMPLOYED

MERCHANT FEE NET TRANSACTION MARGIN

MULTIPLE ANNUAL CAPITAL CYCLES

IMPLIED NET ROCE (ANNUALISED, PRE-OVERHEADS)

INCREASING AS MERCHANT ‘MIX’ DEVELOPS

‘FAVOURED-NATION‘ PRICING FROM TOUCHCORP >12×

RECEIVABLES FACILITY ESTABLISHED WITH NAB >30%

IMPROVING WITH TRANSACTION HISTORY AND INCREASING RETURNING CUSTOMER MIX

>2.5% IN H1 FY17

>2.5% IN H1 FY17

TRANSACTION PROCESSING COSTS

TRANSACTION FUNDING FINANCE COSTS

NET TRANSACTION LOSSES

NET TRANSACTION MARGIN

POSITIVE NET TRANSACTION MARGINS, MULTIPLE ANNUAL CAPITAL CYCLES

TRANSACTION ECONOMICS (PER TRANSACTION, PRE-OVERHEADS)

RETURN ON CAPITAL EMPLOYED (ROCE)

ROE SIGNIFICANTLY

HIGHER AS DEBT FUNDING

INCREASES

(REFLECTS NO MATERIAL FINANCE

COSTS)

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H1 FY17 FINANCIAL INFORMATION

MATTHEW WALTONCFO

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CUSTOMERS356,766 UNIQUE CUSTOMERS (AT 31 DEC 16)

STRONG GROWTH IMPROVING THROUGH THE HALF

HIGH RETURNING CUSTOMER RATE OF 75% PER MONTH, UP FROM 66% PER MONTH IN JUNE 2016

MERCHANTS2,044 RETAIL MERCHANT CLIENTS (AT 31 DEC 16)

DEVELOPED A MATERIAL PRESENCE IN BROADER RETAIL CATEGORIES

IN-STORE INTEGRATION WITH SEVERAL KEY RETAILERS, WITH A FULL PIPELINE

UNDERLYING SALES$145M FOR H1 FY17

$103M FOR Q2 FY17

CHRISTMAS SEASONALITY UPLIFT IN DECEMBER

NET TRANSACTION LOSS (“NTL”)NTL PERFORMANCE IMPROVED IN H1 FY17, DESPITE HIGHER VOLUMES OF TRANSACTIONS, NEW RETAIL CATEGORIES AND INCREASING OVERALL TRANSACTION ACCEPTANCE RATES

MERCHANT FEES$6.0M FOR H1 FY17

$4.3M FOR Q2 FY17

MERCHANT FEE GROWTH HAS ACCELERATED AT A FASTER RATE THAN CUSTOMER GROWTH

NET TRANSACTION MARGINNET TRANSACTION MARGIN OF 2.7%

H1 FY17 BUSINESS UPDATE OVERVIEW

CAPITAL AND FUNDING$36M EQUITY CAPITAL RAISED IN OCTOBER 2016

INITIAL $20M DEBT FACILITY FROM NAB OPERATIONAL SINCE DECEMBER, WITH $8M UTILISED

%

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SUMMARY FINANCIALS

H1 FY17 H2 FY16 % CHANGE H1 FY16 % CHANGE

REVENUE 6.0 1.2 417% 0.2 2629%

COST OF SALES -1.2 -0.2 417% -0.0 3770%

GROSS PROFIT 4.8 0.9 417% 0.2 2446%

OTHER INCOME 1.2 0.2 393% 0.0 2488%

BAD AND DOUBTFUL DEBTS -1.9 -0.4 404% -0.2 905%

EMPLOYEE BENEFITS EXPENSE -1.9 -1.0 89% -0.2 714%

OTHER OPERATING EXPENSES -1.8 -0.8 139% -0.3 601%

OPERATING EBITDA 0.4 -1.0 -142% -0.4 -190%

ONE OFF COSTS -0.6 -0.1 359% - N/A

SHARE BASED EXPENSE -0.5 -0.2 243% - N/A

EBITDA -0.7 -1.2 -45% -0.4 53%

INTEREST 0.2 0.1 62% 0.1 214%

EBTDA -0.5 -1.1 -55% -0.4 29%

DEPRECIATION & AMORTISATION -1.4 -1.3 5% -0.9 57%

TAX BENEFIT 0.5 0.1 247% - N/A

NET PROFIT AFTER TAX -1.4 -2.3 -39% -1.3 10%

CASH 31.0 19.7 57% 2.2 1288%

TRADE RECEIVABLES 38.8 7.2 437% 2.0 1880%

DEBT FACILITY 8.1 - N/A - N/A

NET ASSETS 72.1 38.1 89% 16.6 335%

Comments

Revenue growth driven by growth in underlying merchant sales

Bad and Doubtful Debt expense of $1.9m is proportionate to receivables balance and reconciled to NTL on page 37

EmployeeBenefitsExpensegrowthdrivenbyinvestmentinstafffootprint

Oneoffcostsprincipallyrelateto the establishment of the NAB Receivables Funding Facility

Share based expense is amortised long term employee compensation (non-cash)

Depreciation and amortization expense relates to the amortisation of the Afterpay System

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KEY FINANCIAL METRICS

H1 FY17 H2 FY16 % CHANGE H1 FY16 % CHANGE

UNDERLYING MERCHANT SALES 144.8 30.8 370% 6.5 2117%

AFTERPAY MERCHANT REVENUE 6.0 1.2 417% 0.2 2629%

% OF UNDERLYING MERCHANT SALES 4.2% 3.8% 10% 3.4% 23%

NET TRANSACTION LOSS -0.9 -0.2 398% -0.2 522%

% OF UNDERLYING MERCHANT SALES -0.7% -0.8% -16% -1.3% -47%

OTHER VARIABLE TRANSACTION COSTS -1.2 -0.2 443% 0.0 3300%

% OF UNDERLYING MERCHANT SALES -0.8% -0.7% 15% -0.5% 53%

NET TRANSACTION MARGIN 3.9 0.8 414% 0.0 11173%

% OF UNDERLYING MERCHANT SALES 2.7% 2.4% 9% 0.5% 409%

OTHER REVENUE 0.2 0.1 89% 0.1 267%

OPERATING EXPENSES -3.5 -1.7 102% -0.5 621%

OPERATING EBTDA 0.6 -0.9 -171% -0.4 -255%

ONE-OFF EXPENSES -0.6 -0.1 359% 0.0 N/A

SHARE BASED EXPENSES -0.5 -0.2 243% 0.0 N/A

EBTDA -0.5 -1.1 -55% -0.4 29%

Comments

Operating EBTDA positive

Growth in Merchant Revenue as a

percentage of Underlying Merchants Sales

is attributable to the increased mix of SMB

to Enterprise merchants

Net Transaction Loss as percentage of

Underlying Merchant Sales has reduced

through improved data analytics

Other Variable Transaction Costs as a

percentage of Underlying Merchant Sales

have increased due to additional merchant

acquisition costs

Other Variable Transaction Costs are likely

to increase in the future as an increasing

proportion of external debt is utilised

NOTE: EBTDA REFERES TO EARNINGS BEFORE TAX, DEPRECIATION AND AMORTISATION (BUT AFTER INTEREST REVENUE AND EXPENSE);UNDERLYING MERCHANT SALES USED AS A PROXY FOR PAYMENTS DUE AND NOT YET DUE

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UNDERLYING SALES AND REVENUE GROWTH

UNDERLYING SALES, MERCHANT MARGIN AND MERCHANT REVENUE GREW STRONGLY THROUGHOUT H1 FY17

Q2 POSITIVELY IMPACTED BY CHRISTMAS SEASONALITY

AVERAGE MERCHANT FEES INCREASED MARGINALLY AS THE MERCHANT PORTFOLIO ‘MIX’ CONTINUES TO DIVERSIFYUNDERLYING

SALES MERCHANT

FEE REVENUE

144.8 6.0H1 FY17

H1 4.2H1 144.8 H1 6.0

H1 FY17

$$m m

Q1 FY16

Q1 FY16

Q1 FY16

Q2 FY16

Q2 FY16

Q2 FY16

Q3 FY16

Q3 FY16

Q3 FY16

Q4 FY16

Q4 FY16

Q4 FY16

Q1 FY17

Q1 FY17

Q1 FY17

Q2 FY17

Q2 FY17

Q2 FY17

3.2 3.43.6

3.84.1 4.2

1.5 5.09.3

21.5

41.9

102.9

0.0 0.2 0.30.8

1.7

4.3

AFTERPAY MERCHANT MARGIN (%)

AFTERPAY QUARTERLY SALES ($m)

AFTERPAY QUARTERLY REVENUE ($m)

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IMPROVING TRANSACTION INTEGRITY CAPABILITY AND PERFORMANCE

H1 FY16

H2 FY16

H1 FY17

1.3

0.8

0.7

NET TRANSACTION LOSS (%)

Net transaction loss results continue to be positively influencedby:

Richer transaction and customer data

Increased proportion of returning

customers

NET TRANSACTION LOSS OF 0.7% VERSUS 0.8% IN H2 FY16

Pleasing result given:

Higher volumes of transactions

New retail categories

Increasing overall transaction

acceptance rates

NET TRANSACTION

LOSS (%)

PAYMENT RECOVERY

COSTS

UNDERLYING SALES 1

NON-RECOUPABLE INSTALMENT PAYMENTS

RECOUPABLE LATE FEES

1. UNDERLYING SALES USED A PROXY FOR PAYMENTS DUE AND NOT YET DUE 27

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OPERATING EXPENSES (FIXED OVERHEADS) EVOLUTION OF THE BUSINESS

H2 FY16

H1 FY17

1.7

1.2

3.5

6.0MERCHANT REVENUE AND COST GROWTH ($M)

Managed expansion of the cost base

Ongoing Operating Cost growth well below revenue growth – positive jaws

Continuing to invest in the business with:

Expansion in the staff footprint – 30 at Dec 2016, up from 20 at Jun 2016

Marketing investment to support the acquisition and integration of new merchants

MERCHANT REVENUE

+417%

ONGOING OPERATING EXPENDITURE1

+102%

1. ONGOING OPERATING EXPENDITURE EXCLUDES ONE-OFFS AND SHARE BASED PAYMENTS 28

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ROBUST CAPITAL BASE

Majority of capital raised to date preserved for growing receivables

Capital primarily utilised for underlying sales growth, as opposed to sunk cost

Low cost, flexible debt structure with NAB – scales up and down with needs

Debt is the focus for funding future receivables growth

Intention for low gearing levels at present to be scaled up in-line with underlying sales growthH1 FY17

$M

RECEIVABLES 38.8 RECEIVABLES 38.8

UNDRAWN DEBT 11.9

UNDRAWN DEBT 11.9

CASH 31.0

CASH 31.0

EQUITY 30.7

DEBT 8.1

DEBT 8.1

SALES GROWTH CAPACITY

CAPITAL EMPLOYED

CAPITAL EMPLOYABLE

LOW GEARING

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TECHNOLOGY INVESTMENT

c. $2m capital commitment

c. $1.25m recognised on balance sheet in H1 FY17

Amortised over 5 years in line with current practice

Software development being performed by Touchcorp; no change to existing Software, Development and Licence Agreement between the parties

CUSTOMER IN-STORE FUNCTIONALITY AND

INTERFACE

DATA ANALYTICS AND RULES

APPLICATION

INVESTMENT IN TECHNOLOGY DEVELOPMENT OUTSIDE OF THE CORE AFTERPAY SYSTEM DEVELOPED AND MANAGED BY TOUCHCORP

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STRATEGY AND OUTLOOK

NICK MOLNAR MANAGING DIRECTOR

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2017 PRIORITIES CLEARLY SUPPORT GROWTH OBJECTIVES

ONLINE GROWTH AND NEW VERTICALS

IN-STORE ROLLOUT AND EXPERIENCE

INTERNATIONAL EXPANSION

CONTINUED PRODUCT

INNOVATION

New product verticals

Broadening demographic appeal

Continue roll-out to Afterpay’s online retail base into their physical store networks

Optimise product experience

Continue to assess international opportunities, with initial focus on NZ

Launch of Afterpay app

Enhancement of Afterpay Shop Directory functionality

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APPENDIX

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DIVERSE TEAM WITH BROAD EXPERIENCE

MIKE

YVONNE

BILLY

EXPERIENCE

CULTURE

Working in the Afterpay team is fast-paced, challenging and real. The popular uptake of the service naturally creates a high intensity workplace with opportunities to succeed, and there is the constant demand on employees to contribute to improving our business and the positive impact that it can have on so many every day Australians.

All hands on deck! I love the attitude around the office – high energy and full of curious, smart people from all over the world. We have specific roles and individual goals we are working towards, but everyone is in this together. We all want to help build something great and be a part of something special. I’m fortunate to find myself in this position and look forward to conquering the endless challenges ahead.

I love telling people I work for Afterpay because we really are making lives easier for many Australian families, we are helping them to have the things they want now by allowing them to pay later. Some of the feedback about how we have made it the best family Christmas ever brings tears to your eyes. So proud of what we do.

GENDER

70% 30%

AGE

45+ <25

25-3535-45

FINTECH INNOVATOR IN PAYMENTS

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BALANCE SHEET SUMMARY$M H1 FY17 H2 FY16 % CHANGE

ASSETS

CASH AND CASH EQUIVALENTS 27.7 19.7 41%

OTHER FINANCIAL ASSETS 3.3 - N/A

TRADE RECEIVABLES 38.8 7.2 437%

PREPAYMENTS AND OTHER RECEIVABLES 2.5 0.6 343%

TOTAL CURRENT ASSETS 72.3 27.5 163%

PROPERTY, PLANT AND EQUIPMENT 0.1 0.0 153%

INTANGIBLE ASSETS 10.9 10.8 1%

DEFERRED TAX ASSET 1.6 0.6 155%

TOTAL NON-CURRENT ASSETS 12.6 11.5 10%

TOTAL ASSETS 84.9 39.0 118%

LIABILITIES

TRADE AND OTHER PAYABLES 4.5 0.9 422%

EMPLOYEE LEAVE PROVISIONS 0.1 0.1 101%

INTEREST-BEARING BORROWINGS 8.1 - N/A

TOTAL CURRENT LIABILITIES 12.8 0.9 1274%

LONG SERVICE LEAVE PROVISION 0.0 0.0 272%

TOTAL NON-CURRENT LIABILITIES 0.0 0.0 272%

TOTAL LIABILITIES 12.8 0.9 1271%

EQUITY

ISSUED CAPITAL 76.5 41.5 84%

ACCUMULATED LOSSES (5.0) (3.6) 39%

RESERVES 0.6 0.2 278%

TOTAL EQUITY 72.1 38.1 89%

Comments

Other Financial Assets is the warehouse trust cash balance

Interest-Bearing Borrowings is the drawn amount of the NAB Receivables Funding Facility

Trade and Other Payables primarily represents accrued merchant settlement balances

$1.25m increase in intangible assets for technology development capitalised investment in the period, with a corresponding increase in Trade and Other Payables

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CASHFLOWS STATEMENT

$M H1 FY17 H1 FY16

CASH FLOWS FROM OPERATING ACTIVITIES

RECEIPTS FROM CUSTOMERS (INCLUSIVE OF GST) 102.2 4.1

PAYMENTS TO EMPLOYEES -1.5 -0.2

PAYMENTS TO MERCHANTS AND SUPPLIERS (INCLUSIVE OF GST) -132.0 -6.6

NET CASH FLOWS USED IN OPERATING ACTIVITIES -31.4 -2.7

CASH FLOWS FROM INVESTING ACTIVITIES

INTEREST RECEIVED 0.3 0.1

PURCHASE OF INTANGIBLES -0.2 -3.0

PURCHASE OF PLANT AND EQUIPMENT -0.1 -0.0

INCREASE IN OTHER FINANCIAL ASSETS -3.3 -

NET CASH FLOWS (USED IN)/FROM INVESTING ACTIVITIES -3.2 -3.0

CASH FLOWS FROM FINANCING ACTIVITIES

INTEREST-BEARING BORROWINGS 8.1 -

PROCEEDS FROM ISSUE OF SHARES 36.0 8.0

CAPITAL RAISING EXPENSES -1.6 -0.1

NET CASH FLOWS FROM FINANCING ACTIVITIES 42.5 7.9

NET INCREASE IN CASH AND CASH EQUIVALENTS 8.0 2.2

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD 19.7 0.0

CASH AND CASH EQUIVALENTS AT END OF THE PERIOD 27.7 2.2

Comments

OperatingActivityNetCashOutflowof$31.4mreflectsstrongunderlyingsales growth

19.7

36.0 (1.6)

(31.6)8.1

0.2

0.3

31.0

(0.2)

CA

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H2

FY

16

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HF

LOW

CASH FLOWS($M)

27.7 CASH & CASH EQUIVALENTS

3.3 OTHER FINANCIAL ASSETS

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NET TRANSACTION LOSS ANALYSIS

Comments

H1 FY17 Net Transaction Loss of $0.9m or 0.7% of Underlying Sales

Latefeescollectedarereflectedin“otherincome”intheprofitandloss statement

Payment recovery expenses are reflectedin“otherexpenses”intheprofitandlossstatement

Bad and Doubtful Debts expense for H1 FY17 of $1.9m

$0.7mwaswrittenoffinH1FY17

0.3

1.2 1.5

BDD PROVISION 30-JUN-16

INCREASE IN BDD

PROVISION

BDDPROVISION 31-DEC-16

1.9

BDD EXPENSE H1

FY17

0.8

WRITE- OFFS

(0.1)

WRITE- BACKS

1.2

INCREASE IN BDD

PROVISION

(1.0)

LATE FEES NET OF

PAYMENT RECOVERY

COSTS

0.9

NTL

BALANCE SHEET PROFIT & LOSSH1 FY17$M

H1 FY17$M

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CONTACT DETAILS

INVESTORS

NICK MOLNAR MANAGING DIRECTORNICK@AFTERPAY.COM.AU

COMPANY

SOPHIE KARZIS COMPANY SECRETARY SK@CCOUNSEL.COM.AU 03 9286 7501

MEDIA

FLEUR BROWN DIRECTORFLEUR@LAUNCHGROUP.COM.AU 0419 270 863F

or p

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QUESTIONS

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THANK YOU

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