99 Loyalty : 2021 Results Presentation

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Full Year Results Presentation

28 February 2022

Important Notice

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This presentation (Presentation) has been prepared by 99 Loyalty Limited (ASX : 99L) (99 Loyalty or the Company) and is a summary overview only of the current activities of the Company. This Presentation does not purport to be complete or provide all information which is necessary in order to assess whether to acquire CHESS Depositary Interest (CDI's) in 99 Loyalty. This Presentation does not constitute an opinion or recommendation with respect to 99 Loyalty and whether a recipient of this Presentation (Recipient) should invest or recommend an investment in 99 Loyalty.

This Presentation includes certain financial measures that are not recognised under International Financial Reporting Standards (IFRS). Such non-IFRS financial measures do not have a standardised meaning prescribed by IFRS and may not be comparable to similarly titled measures prescribed by other entities, and should not be construed as an alternative to other financial measures determined in accordance with IFRS. The non-IFRS financial measures in this Presentation are presented to assist the Recipient make appropriate comparisons with prior periods and to assess the operating performance of the business of the Company. 99 Loyalty uses these measures to assess the performance of the Company's business and believes that information is useful to Recipients. Gross Transaction Value (GTV), EBITDA and EBIT have not been reviewed or audited. Recipients are cautioned not to place undue reliance on any non-IFRS financial measures included in this Presentation.

This Presentation should be read in conjunction with the Company's disclosures lodged with the Australian Securities Exchange.

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The Presentation does not constitute an offer for or an invitation to the public to subscribe for CDI's in 99 Loyalty. If an offer is made for subscription for CDI's in 99 Loyalty, such offer will only be made to and capable of acceptance by persons to whom the offer is made and only where the offer has been made in compliance with the laws of the relevant governing jurisdiction in which the offer is received.

An investment in 99 Loyalty is subject to investment and other known and unknown risks.

The Presentation does not constitute investment, legal, accounting, regulatory, taxation or other advice and has been prepared without taking into account the objectives, financial situation or needs of individuals. A Recipient must not use the information contained in this Presentation as a basis for investing in the Company or recommending an investment in 99 Loyalty. Prior to making an investment decision, prospective investors should undertake their own independent review, investigations and analysis of the Company, consider the appropriateness of the information in this Presentation having regard to their own objectives, financial situation and needs, seek further information if required and seek such advice as the Recipient considers appropriate including legal and taxation advice appropriate to their jurisdiction.

The Company and its directors, officers, associates and employees and associated companies and businesses (collectively 'the Providers') make no representations or warranties, express or implied, or provide any guarantees regarding the likely investment returns, the performance of CDI's in 99 Loyalty, the suitability of CDI's for any investor, any particular tax treatment or the accuracy, completeness or adequacy of information contained herein or any accompanying management presentation. Except insofar as liability under any law cannot be excluded, the Providers have no liability to the Recipient or any other person arising in respect of the information contained in this Presentation or in any way for errors and omissions (including responsibility to any person by reason of negligence). To the maximum extent permitted by law, the Company excludes all liability for any loss (including consequential loss or damage), suffered or incurred by the Recipient or any other person, however caused (including negligence) as a result of the use of, or reliance on, this Presentation. 99 Loyalty is under no obligation to correct, update or revise this Presentation or anything referred to in this Presentation which comes to its attention after the date of publication, whether as a result of new circumstances affecting 99 Loyalty or otherwise.

Any opinions expressed in this Presentation are statements of 99 Loyalty as of the date of publication and are subject to change without notice.

This Presentation may contain forward looking statements. These forward looking statements are provided as a general guide and should not be relied upon as an indication or guarantee of future performance. They are by their nature, only predictions and are subject to inherent risks and uncertainty. The Providers do not give any assurance as to their accuracy. These statements are based on current expectations, estimates and projections about 99 Loyalty's business, the industry in which it operates and management's beliefs and assumptions. Such matters require subjective judgment and analysis and may be based on assumptions which are incorrect. A Recipient should undertake their own independent review to determine the accuracy and robustness of the forward looking statements.

for the period 1 January 2021 to 31 December 2021.

Result Highlights

The Company is pleased to provide the FY2021 financial results:

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Increase/Decrease
		RMB: mm			AUD: mm
Revenue	‐10%	208.13	42.95
Gross Profit	‐10%	207.05	42.72
useEBITDA	‐165%	‐48.17			‐9.94
Net Profit	‐335%	‐74.23			‐15.32
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Note: RMB translated into AUD using the average rate of AUD/RMB 4.8464

The financial results for FY2021 is in the process of being audited

FY2020

RMB: mm

AUD: mm

231.7347.82

231.0547.67

73.9515.26

31.566.51

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Financial Overview

•	Revenue (RMB: mm)
only	180.00	231.73
	240.00
	220.00		208.13
	200.00
use	160.00
140.00
	120.00
	100.00	FY2020	FY2021
•	Commentary

• Gross Profit (RMB: mm)

240.00	231.05
220.00		207.05
200.00
180.00
160.00
140.00
120.00
100.00	FY2020	FY2021

Strong insurance related revenue growth due to the low insurance penetration rate in China and the increased consumer awareness of the need for risk protection and insurance products.

However, the Company's Revenue and Gross Profit decreased by 10%. This was primarily driven by:

personalr	• The lockdown responses to Covid‐19 and its variants have impacted different cities in China, resulting in a low consumer demand. Many enterprises suffered a heavy loss,
	among which the Company is relatively less affected.
	• The growth rate of China's GDP was dropping down to 4% in Q4, from 4.9% in Q3, 7.9% in Q2, and 18.3% in Q1.
	• China's industry restructuring impacted China's macro‐economy and financial risk control measures led the Company's enterprise clients to being cautious in loyalty and
	marketing activities. This lowered the Company revenues.

An accounting treatment to record a provision of an impairment loss of RMB 36.38 million on trade receivables due to the restructuring of payment terms, and an accounting treatment to record a provision of an impairment loss of RMB 16.23 million on intangible assets and goodwill due to the reductions in the Company's revenues and the fluctuation of China's economy.

The Company extended and diversified enterprise clients and expanded its sales channels for the rapidly growing insurance brokerage services, resulting in a significant increase in sales and distribution expenses.

The Company's business was negatively affected by poor market conditions and national regulatory control over enterprise clients ‐ financial institutions. This affected the Company's business and reduced revenues.

Financial Overview

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EBITDA (RMB: mm)

100.00

80.00		73.95
60.00
40.00
20.00			FY2021
0.00
	FY2020
‐20.00

• Net Profit (RMB: mm)

100.00

80.00

60.00

40.0031.56

20.00

FY2021

0.00

‐20.00FY2020

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‐40.00
‐60.00	‐48.17
‐80.00

‐100.00

Commentary

‐40.00

‐60.00

‐80.00

‐100.00

‐74.23

personalEBITDA decreased by RMB 122.12 million , resulting in a net loss of RMB 74.23 million, which is primarily driven by:

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