Moonpig Group Plc · LSE:MOON
Moonpig — H1 FY2025 Earnings Presentation
41 slides from Moonpig's earnings presentation, Dec 10, 2024
Slide 1: Half year results presentation
Half year results presentation Six months ended 31 October 2024 10 December 2024 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 growth, underpinned by the Moonpig brand
Technology driven growth, underpinned by the Moonpig brand Strong financials Ongoing strategic delivery Confidence in outlook • Moonpig revenue increased by 10.0%, • Leveraging data and technology to • Moonpig Group current trading remains underpinned by growth in orders. drive revenue growth: in li
Slide 5: Financial performance
5 Financial performance Andy MacKinnon Chief Financial Officer
Slide 6: Revenue growth, high profit margins and growth in Adjusted PBT
Financial performance Revenue growth, high profit margins and growth in Adjusted PBT Continued Strong Adjusted Growth in Controlled revenue growth EBITDA margin Adjusted PBT net leverage £158.0m £41.8m £27.3m 1.25x 2 2 Revenue Adjusted EBITDA Adjusted PBT Net leverage 2,3 3.8% 26.5% 17.3% £119.5m Re
Slide 7: Revenue growth underpinned by +4.7% increase in orders
Financial performance Revenue growth underpinned by +4.7% increase in orders Strong order growth delivered through Our active customer base Growth in frequency, notwithstanding customer base and frequency is now in consistent growth the increase in new customer mix Moonpig and Greetz orders Moonpig
Slide 8: Average order value increased by +2.5% year-on-year
Financial performance Average order value increased by +2.5% year-on-year Moonpig and Greetz average order value £ / order • Continued average order value growth: YoY +2.5% • Moderate increase in gift attachment rate 2 • Pass-through of UK first class postage price increases, most recently in Octobe
Slide 9: Cards and attached gifting revenue both growing year-on-year
Financial performance Cards and attached gifting revenue both growing year-on-year Moonpig and Greetz Moonpig and Greetz cards revenue attached gifting revenue Moonpig and Greetz - Cards revenue Moonpig and Greetz - Attached gifting revenue £m £m YoY -3.6% YoY +9.2% YoY +5.8% • Strong cards revenue
Slide 10: Double digit revenue growth at Moonpig
Financial performance Double digit revenue growth at Moonpig Moonpig segment revenue Greetz segment revenue £m £m • Moonpig revenue growth at +10.0% driven by growth in both orders and average order value YoY +10.0% YoY -4.0% • Greetz revenue decline abated further to -4.0% from -5.3% in H2 FY24 • C
Slide 11: Executing our plan for Experiences in a challenging market
Financial performance Executing our plan for Experiences in a challenging market Experiences revenue £m • Continued execution against our plan to transform the Experiences business: YoY -20.8% • Platform rebuilt with focus now on technology feature development to drive growth • Enhancing the custome
Slide 12: Gross margin increased to 59.2%
Financial performance Gross margin increased to 59.2% Gross profit £m, % of total revenue • Increased Moonpig gross margin rate: Group gross margin 58.5% 59.2% • Operational efficiency projects such as Moonpig gross margin 55.5% 57.5% insourced balloon fulfilment Greetz gross margin • Leveraging AI
Slide 13: Adjusted EBITDA margin rate of 26.5%
Financial performance Adjusted EBITDA margin rate of 26.5% Adjusted EBITDA £m, % of total revenue Group margin rate 27.2% 26.5% • Moonpig Adjusted EBITDA margin increased by Moonpig margin rate 30.3% 31.1% 0.8 percentage points to 31.1%: Greetz margin rate 16.8% 11.9% • Increase in gross margin rate
Slide 14: Adjusted PBT increased by +9.0% year-on-year
Financial performance Adjusted PBT increased by +9.0% year-on-year Adjusted EBITDA to Adjusted PBT Depreciation and amortisation • Growth reflects technology investment in recent years £m H1 FY25 H1 FY24 YoY • We expect the full year FY25 charge to be between £19m and £21m2, reflecting the timing of
Slide 15: Consistently strong operating cash flow
Financial performance Consistently strong operating cash flow Adjusted EBITDA to Operating Cash Conversion • The Group is highly cash generative on an annual £m H1 FY25 H1 FY24 H2 FY24 basis, with cash inflows strongly weighted into H2 as a Adjusted EBITDA1 41.8 41.4 54.1 result of seasonality in tr
Slide 16: Rapid deleveraging and a disciplined approach to capital allocation
Financial performance Rapid deleveraging and a disciplined approach to capital allocation Rapid deleveraging profile Capital allocation framework Net leverage 1 1 £m, ratio of net debt to Adjusted EBITDA 1 • To maintain an efficient capital structure, our target Organic is to operate with net levera
Slide 17: Inaugural interim dividend of 1.0p per share
Financial performance Inaugural interim dividend of 1.0p per share • In October, we announced a dividend policy that commits to maintaining robust dividend cover of 3x Progressive to 4x in the medium term dividend • We intend to pay a total FY25 dividend of £10m, growing thereafter in line with Adju
Slide 18: Current trading in line, medium-term Adjusted EBITDA margin target raised
Financial performance Current trading in line, medium-term Adjusted EBITDA margin target raised • Moonpig Group current trading remains in line with our expectations • Growth has been underpinned by consistent strong sales and orders at Moonpig and is supported Current by steady progression at Greet
Slide 19: Strategic Update
moonpig group ple y My Reminders Set a reminder t email ahead of the ion. Create Reminder I] Coming Up +g + Monday 14th October Charlie’s Birthday See more > Strategic Update
Slide 20: At Moonpig and Greetz, we leverage data to drive loyalty and gift upsell
Strategic update At Moonpig and Greetz, we leverage data to drive loyalty and gift upsell Card-first Gift attach Profitable customer acquisition The most relevant gifting platform with high loyalty with minimal acquisition cost ✔ 51 million card buyers in UK & NL 1 ✔ >63% cards given with a gift 1,2
Slide 21: Resilient, sticky cohorts that have been uplifted post Covid
Strategic update Resilient, sticky cohorts that have been uplifted post Covid Very consistent cohort behaviour These same cohorts are now Across all cohorts, customers are pre-Covid performing stronger than pre-Covid returning 20% more often vs. pre-Covid Moonpig annual cohorts acquired to FY18 1 Mo
Slide 22: Increased retention for cohorts acquired during and since Covid
Strategic update Increased retention for cohorts acquired during and since Covid Retention for new customer cohorts This step-change is consistent across post-Covid is stronger than before new customer cohorts for all recent years Cohort acquired in FY16 and FY22 - revenue 1 Moonpig FY+1 cohort reve
Slide 23: Three compounding revenue growth levers and a long runway of growth
Strategic update 1 Active customers 2 Frequency 3 Average order value Three compounding revenue growth levers and a long runway of growth Moonpig and Greetz FY19 - FY24 growth Average 3 order value 17.3% 3.6x 63% occasions where a FY24 attach rate 4 gift is purchased +25% × Average order value along
Slide 24: Accelerating active customer growth
Strategic update 1 Active customers 2 Frequency 3 Average order value Accelerating active customer growth Social sign-on driving conversion rate and “Magic link” from reminder emails Leveraging brand partnerships to accelerate hence new customer acquisition to tailored landing page new customer acqu
Slide 25: Plus: our flagship programme for driving frequency
Strategic update 1 Active customers 2 Frequency 3 Average order value Plus: our flagship programme for driving frequency Plus subscriptions surpassed expectations Card creativity features have now been used AI handwriting launched on our apps in with 750k members over 17 million times December 2024
Slide 26: Delivering growth in gift attachment and average order value
Strategic update 1 Active customers 2 Frequency 3 Average order value Delivering growth in gift attachment and average order value Leveraging AI to make increasingly Strategic category partnerships Powerful brands that customers love relevant recommendations 26
Slide 27: Executing against our Experiences transformation plan
Strategic update Executing against our Experiences transformation plan At the time of acquisition, we established three pillars for our Experiences transformation plan Operational transformation Technology led growth Enhancing the proposition Delivered In progress In progress Appointed new leadershi
Slide 28: Focus on enhancing the proposition at Experiences
Strategic update Focus on enhancing the proposition at Experiences Expanding our range of Building out our range of Emphasis on casual dining Social experiences and trusted brands subscription gifts at attractive price points immersive experiences 28
Slide 29: Four key revenue drivers at Experiences
Strategic update Four key revenue drivers at Experiences + + + Orders on the Average Third party Recipient customer websites order value channels upsell ● Technology ● AI-driven personalised ● Curating the proposition ● Expanding experiences improvements to upsell recommendations for Moonpig, which
Slide 30: Experimenting to find product-market fit in international markets
Strategic update Experimenting to find product-market fit in international markets Ireland Australia US • Revenue growth at 43% in Ireland, Australia and the US • Key operating principles ensure disciplined investment decisions: • Lean, autonomous, fast paced teams • Short term milestones and focus
Slide 31: Technology driven growth, underpinned by the Moonpig brand
Technology driven growth, underpinned by the Moonpig brand 1 Continued growth, underpinned by double digit growth at Moonpig 2 Leveraging data and technology to drive compounding revenue growth 3 Expectations for full year revenue remain unchanged Medium term target for Adjusted EBITDA margin increa
Slide 32: Moonpig Group plc
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Slide 33: Appendix
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Slide 34: Medium-term targets
Medium-term targets Medium-term operating targets Revenue growth rate Adjusted EBITDA margin rate 1 Adjusted EPS 1 growth rate Double digit percentage 25% to 27% Mid teens percentage Strong operating cash flow and capital efficiency Inventories Capex Operating cash conversion 1 Single digit millions
Slide 35: Technical guidance (1 of 3)
Technical guidance (1 of 3) • Our medium-term target is for recurring tangible and intangible capital expenditure to equate to between 4% and 5% of revenue, therefore growing over time in line with the top line. Within this, we expect that tangible capital expenditure will be in the region of £2m pe
Slide 36: Technical guidance (2 of 3)
Technical guidance (2 of 3) • We expect net finance costs in FY25 to be approximately £11m. This is below our previous expectation 1 and includes the H1 monetary gain on Euro-denominated intercompany loan balances. It includes expected interest payments on the new RCF of approximately £7m (based on
Slide 37: Technical guidance (3 of 3)
Technical guidance (3 of 3) • The Group’s committed debt facilities comprise a four-year, multi-currency revolving credit facility ("RCF") of £180m, which is provided by a syndicate of banks. It has an initial maturity date of 29 February 2028 with an option to extend by one year, subject to lender
Slide 38: Alternative Performance Measures
Alternative Performance Measures Reconciliation of Alternative Performance Measures to IFRS Measures Six months ended 31 October 2024 Six months ended 31 October 2023 £m Adjusted Adjusting IFRS Adjusted Adjusting IFRS Measures Items Measures Measures Items Measures EBITDA (£m) 41.8 (56.7) (14.9) 41.
Slide 39: Acquisition amortisation is now classified as an Adjusting Item
Acquisition amortisation is now classified as an Adjusting Item Adjusting Items Six months ended Six months ended Year-on-year £m 31 October 2024 31 October 2023 movement Pre-IPO share-based payment charges - (0.6) 0.6 Pre-IPO bonus awards - (1.2) 1.2 Acquisition amortisation (3.9) (4.3) 0.4 Impairm
Slide 40: Impact of classifying acquisition amortisation as an Adjusting Item (1 of 2)
Impact of classifying acquisition amortisation as an Adjusting Item (1 of 2) Impact of revising the definition of Adjusting Items to include acquisition amortisation Revised definition Previous definition Year-on- Year-on- £m H1 FY25 H1 FY24 H1 FY25 H1 FY24 year % year % Revenue 158.0 152.1 3.8% 158
Slide 41: Impact of classifying acquisition amortisation as an Adjusting Item (2 of 2)
Impact of classifying acquisition amortisation as an Adjusting Item (2 of 2) Historical P&Ls with revised definition of acquisition amortisation as an Adjusting Item £m H1 FY201 H1 FY21 H1 FY22 H1 FY23 H1 FY24 H1 FY25 Revenue 66.3 155.9 142.6 142.8 152.1 158.0 Adjusted EBITDA 15.0 41.2 35.0 34.6 41.