Moonpig Group Plc · LSE:MOON
Moonpig — H1 FY24 Earnings Presentation
35 slides from Moonpig's earnings presentation, Dec 5, 2023
Slide 1: Half Year Results Presentation
Half Year Results Presentation Six months ended 31 October 2023 5 December 2023 Strictly Private and Confidential
Slide 2: Disclaimer
Disclaimer This presentation and the discussion which follows it may include certain forward-looking statements with respect to the business, strategy and plans of the Company (together with its subsidiaries, the “Group”) and its current goals and expectations relating to its future financial condit
Slide 3: Agenda
Agenda 1 Overview – Nickyl Raithatha 2 Financial performance – Andy MacKinnon 3 Strategic update – Nickyl Raithatha 3
Slide 4: Technology-driven return to growth
Technology-driven return to growth ● Delivery of year-on-year revenue and profit growth in H1 FY24 ● We have driven this through technology innovation: ○ New technology such as Moonpig Plus subscriptions and card creativity features to drive order frequency ○ Leveraging AI to improve our personalisa
Slide 5: Financial performance
5 Financial performance Andy MacKinnon Chief Financial Officer
Slide 6: Delivery of year-on-year growth in revenue and profit
Financial performance Delivery of year-on-year growth in revenue and profit Year-on-year Gross margin Adjusted EBITDA Significant revenue growth rate improvement growth liquidity headroom £152.1m 58.5% £41.4m 1.83x 1 Revenue Gross margin rate Adjusted EBITDA Net leverage1,2 +6.5% +4.4%pts 27.2% £166
Slide 7: Revenue growth underpinned by the Moonpig brand
Financial performance Revenue growth underpinned by the Moonpig brand Group Revenue £m Reported Pro forma Group growth 6.5% 2.1% • Moonpig grew by +4.9% YoY during H1 FY24: Moonpig growth 4.9% 4.9% • Driven by technology innovation Greetz growth -9.8% -9.8% • Consistent mid single digit percentage g
Slide 8: Growth in revenue from our existing customer cohorts
Financial performance Growth in revenue from our existing customer cohorts Moonpig and Greetz Moonpig and Greetz Revenue from Existing Customers1 Revenue from New Customers • Revenue from existing Existing customers £m New customers £m customers grew at +2.1% • Continued strategic focus on % total %
Slide 9: Revenue underpinned by growth in Average Order Value
Financial performance Revenue underpinned by growth in Average Order Value Moonpig and Greetz Moonpig and Greetz Average Order Value Total Orders £ / order • AOV grew by +7.1% year-on-year: Millions of orders • Prior year price changes for greeting cards and gift shipment YoY +7.1% YoY -5.1% • Pass-
Slide 10: We delivered +5.7% growth in revenue from greeting cards
Financial performance We delivered +5.7% growth in revenue from greeting cards Cards Revenue Gifting Revenue Moonpig and Greetz - Cards revenue Group - Gifting revenue £m £m • Growth in cards revenue YoY -3.6%by card and postage driven price increases 74 73 • Gifting revenue proved resilient in a ch
Slide 11: The Group's gross margin rate strengthened to 58.5%
Financial performance The Group’s gross margin rate strengthened to 58.5% Moonpig Group Gross Profit £m, % of total revenue • Gross margin rate increased by +3.2%pts Group gross margin 54.1% 58.5% across Moonpig and Greetz: Moonpig gross margin 51.9% 55.5% • Benefit from opening new operational faci
Slide 12: Group Adjusted EBITDA margin rate increased to 27.2%
Financial performance Group Adjusted EBITDA margin rate increased to 27.2% Moonpig Group Adjusted EBITDA £m, % of total revenue Group margin rate 24.2% 27.2% • Adjusted EBITDA margin rate3 increased at both Moonpig and Greetz: Moonpig margin rate 25.3% 30.3% • Pass-through of higher gross margin Gre
Slide 13: Growth in Adjusted PBT at +9.7% year-on-year to £20.8m
Financial performance Growth in Adjusted PBT at +9.7% year-on-year to £20.8m Adjusted EBITDA to Adjusted PBT • Higher amortisation of acquired intangibles (which is not treated as an Adjusting Item) reflects a full year charge £m H1 FY24 H1 FY23 YoY relating to the acquisition of Experiences Adjuste
Slide 14: Operating cash conversion in line with our expectations
Financial performance Operating cash conversion in line with our expectations Adjusted EBITDA to Operating Cash Conversion £m H1 FY24 H1 FY23 H2 FY23 1 Adjusted EBITDA 41.4 34.6 49.6 • The Group is highly cash generative on an annual basis Intangible capital expenditure (7.0) (6.7) (6.2) • The seaso
Slide 15: Significant liquidity headroom and continued focus on deleveraging
Financial performance Significant liquidity headroom and continued focus on deleveraging Net Leverage £m Oct 2023 April 2023 Oct 2022 • Our short-term capital allocation priority remains deleveraging Bank borrowings1 (171.4) (170.5) (229.9) • We expect to reduce net leverage by Gross cash 22.4 22.4
Slide 16: Guidance remains unchanged
Financial performance Guidance remains unchanged • Current trading remains in line with our overall expectations. Consolidated revenue growth in recent weeks has continued the positive trends seen in the first half, underpinned by growth at the Moonpig brand. Current trading • Whilst the external en
Slide 17: Strategic Update: Moonpig and Greetz
17 Strategic Update Moonpig and Greetz
Slide 18: Our business model leverages data to increase customer loyalty and drive gift upsell
Moonpig and Greetz segments At Moonpig and Greetz, our business model leverages data to increase customer loyalty and drive gift upsell Card-first Gift attach Profitable customer acquisition The most relevant gifting platform with high loyalty with minimal acquisition cost ✔ 541 million card buyers
Slide 19: Moonpig and Greetz have three compounding growth drivers
Moonpig and Greetz segments Moonpig and Greetz have three compounding growth drivers 72% of occasions Monetising the base where a gift is purchased alongside a card1 × Gift attach 23 total cards per year2 × shift to online Driving the Share of wallet 53.8m total card customers in our markets3 Custom
Slide 20: Creativity features to differentiate our cards and drive purchase frequency
Moonpig and Greetz segments Creativity features to differentiate our cards and drive purchase frequency Audio and video AI-driven Smart Text Stickers, emojis and Stickers on the front of messages message suggestions flexible photos collage photo cards 20
Slide 21: Successful launch of Moonpig Plus to drive customer purchase frequency
Moonpig and Greetz segments Successful launch of Moonpig Plus to drive customer purchase frequency • Moonpig Plus launched on 31 May 2023 • Pleased by subscriber base growth • Consistent and sustained uplift in purchase frequency for subscribers • Marketed primarily during the online card purchase j
Slide 22: Collaborative features intended to introduce non-customers to our brands
Moonpig and Greetz segments Collaborative features intended to introduce non-customers to our brands Group Cards provide us with opportunities to convert We are testing Moonpig at Work, our new proposition for message contributors into future new customers SME corporate gifting to employees, ahead o
Slide 23: Customer behavioural data incorporated into our AI recommendations
Moonpig and Greetz segments Customer behavioural data incorporated into our AI recommendations AI powered recommendations leverage data on gifting Our latest algorithm upgrades are also taking into intent captured during the card-first customer journey account user-level behavioural data Special tre
Slide 24: We have made it easier to add a gift experience to a Moonpig card
Moonpig and Greetz segments We have made it easier to add a gift experience to a Moonpig card Significantly improved product Instant gifting unlocked Expanded range Gift embedded inside the card information pages through ecards 24
Slide 25: Strategic Update: Experiences
25 Strategic Update Experiences
Slide 26: The Experiences strategy creates a growth flywheel
Experiences segment The Experiences strategy creates a growth flywheel by focusing on the conversion of recipients into new customers Customers Recipients Quality and breadth of range underpinned by Simple redemption journey, flexibility and convenient shopping experience broad choice enhances recip
Slide 27: Refreshed brand identities with investment in online brand marketing
Experiences segment Refreshed brand identities with investment in online brand marketing Buyagift brand identity refreshed with Red Letter Days brand identity Additional above-the-line marketing a focus on value, playfulness and a refreshed with a focus on curated in online video and social media to
Slide 28: Compelling range extension and additional online booking capability
Experiences segment Compelling range extension and additional online booking capability Roadmap of booking integration so Continuing to expand New partnerships with popular that more categories can be our premium offering brands around the UK redeemed directly on our websites Hotels Days Out Theatre
Slide 29: Technology replatforming on schedule and new features being deployed
Experiences segment Technology replatforming on schedule and new features being deployed Migration to a new faster Upgrades to online payment options Upsell recommendations technology platform on schedule to drive conversion rate to drive average order value 29
Slide 30: Technology-driven return to growth
30 Technology-driven return to growth 1 Year-on-year growth in revenue and profit 2 Strong operating cash flow and continued deleveraging 3 Accelerating pace of technology innovation 4 Expectations for FY24 revenue and Adjusted EBITDA unchanged
Slide 31: Moonpig Group plc
MOONHIG group ple
Slide 32: Appendix
moonpig group ple Bestselling Mother’s Day Bundles to our card and gift combos. Wibee | Shopping for Mum just got easier thanks Custom card + The Pink Bouquet £19.99 Appendix 32
Slide 33: Technical guidance (1/2)
Technical guidance (1/2) • We anticipate that Adjusting Items will include a charge of approximately £4m in FY24 relating to the pre-IPO Award. There will be no charge in future years as the final tranche of the award vests on 30 April 2024, subject to continued employment. Adjusting items • The pre
Slide 34: Technical guidance (2/2)
Technical guidance (2/2) • We expect net finance costs in FY24 to be in the region of £15m. Net finance costs • This includes approximately £2m relating to the amortisation of fees and £1m of interest on lease liabilities. • We have assumed no monetary gain or loss on Euro-denominated intercompany l
Slide 35: Alternative Performance Measures
Alternative Performance Measures Reconciliation of Alternative Performance Measures to IFRS Measures H1 FY24 H1 FY24 H1 FY24 H1 FY23 H1 FY23 H1 FY23 Adjusted Adjusting IFRS Adjusted Adjusting IFRS £m Measures Items Measures Measures Items Measures Pre-IPO share based payment charges - (0.6) - - (3.5