Mony Group Plc · LSE:MONY
Mony — Moneysupermarket Group — FY2018 Earnings Presentation
29 slides from Mony's earnings presentation, Feb 14, 2019
Slide 1: Preliminary Results
Preliminary Results 14 February 2019
Slide 2: Mark Lewis, Chief Executive Officer
Mark Lewis Chief Executive Officer
Slide 3: Successful first year of growth strategy delivery
Successful first year of growth strategy delivery First year strategic milestones met • Core growth accelerated following investment in customer experience • Decision Tech integrated to add new revenue streams • Number of new market growth initiatives launched Continued performance through year of t
Slide 4: Scilla Grimble, Chief Financial Officer
Scilla Grimble Chief Financial Officer
Slide 5: Full year financial themes
Full year financial themes Diversified business delivering to plan • £2.1bn of savings for customers • Invested £5m and completed the build out of our product engineering hub in Manchester • Successful acquisition and integration of Decision Tech • Group revenue +8% and EBITDA +2% in line with expec
Slide 6: Financial highlights
Financial highlights Help households save £2.1bn Revenue +8% Adjusted EBITDA +2% Reported EPS +13% £356m £129m 16.2p Reinvestment rate -1% Operating cash flow Dividend per share +6% 11% £107m 11.05p 6
Slide 7: Income statement
Income statement £Millions 2018 2017 Growth Revenue 355.6 329.7 8% Gross margin 71% 74% Adjusted EBITDA * 129.4 127.2 2% EBITDA margin 36% 39% Depreciation & software amortisation (13.2) (13.3) Adjusting items ** (8.2) (19.1) Operating profit 108.0 94.9 14% Net finance costs (0.9) (0.8) Share of pro
Slide 8: Segmental performance
Segmental performance £Millions 2018 2017 Growth Insurance 183.0 176.5 4% Money 88.1 85.4 3% Home Services 49.2 43.0 15% 320.4 304.9 5% Other Revenue* 35.2 24.8 42% Total Group 355.6 329.7 8% * Includes £10.7m revenue net of intercompany related to Decision Tech 8
Slide 9: Disciplined approach to marketing
Disciplined approach to marketing Marketing spend Revenue by source £356m £Millions 2018 2017 YoY £330m TV & radio 25.5 25.1 0.4 23% 24% Online spend 86.8 74.7 12.1 Other* 20.2 14.7 5.5 Total Group 132.5 114.5 18.0 76% 77% Marketing margin 63% 65% (2%) * Includes revenue share of partners on B2B act
Slide 10: Operating costs account for majority of our technology investment
Operating costs account for majority of our technology investment Total Tech Investment Reinvestment Rate £39m £37m +12% +11% 2017 2018 £23m £24m £16m £13m • Operating costs are mainly staff costs and licences 2017 2018 Technology capital investment Technology operating costs excluding amortisation
Slide 11: Strong levels of cash generation
Strong levels of cash generation £129.4m £1.0m (£26.5m) (£56.8m) (£33.8m) (£18.7m) £15.0m £44.8m £35.1m £29.8m Cash at Adj. EBITDA Working Capital items Dividends DT acquisition Tax Net Cash at Borrowings Cash at 1 Jan 2018 capital and strategy net of cash 31 Dec 2018 31 Dec 2018 investment acquired
Slide 12: Mark Lewis, Chief Executive Officer
Mark Lewis Chief Executive Officer
Slide 13: Business fundamentals strengthened through strategy execution
Business fundamentals strengthened through strategy execution • Added new growth in Home Communications, mobile and B2B Growing • First moves made to drive digitisation of the mortgage market Markets • Further diversified our revenue streams in growing markets • Active users stable at 13m Engaged •
Slide 14: Reinvent growth strategy set to scale in the second year of delivery
Reinvent growth strategy set to scale in the second year of delivery Help households save money Reaccelerate Core Growth New Market Growth Leading Trusted Brands 1 2 3 Customer Leading Take Price Mortgage Experience Personalised Provider Comparison Price Optimisation MSM Offer to the user Comparison
Slide 15: Customer experience optimisation underpinning revenue growth
Customer experience optimisation underpinning revenue growth Reaccelerate Core Growth Manchester product engineering base established Leading • Scaled to 150 headcount, permanent office move in 2019 Trusted Brands • Squads operating across Insurance, Money and Home Services • Operating across both M
Slide 16: Reinvent growth strategy set to scale in the second year of delivery
Reinvent growth strategy set to scale in the second year of delivery Help households save money Reaccelerate Core Growth New Market Growth Leading Trusted Brands 1 2 3 Customer Leading Take Price Mortgage Experience Personalised Provider Comparison Price Optimisation MSM Offer to the user Comparison
Slide 17: Personalising the MoneySuperMarket experience
Personalising the MoneySuperMarket experience Proactive policy monitoring Credit Score & recommendations MSM brand relaunch 17
Slide 18: Decision Tech now integrated and selling B2B comparison services
Decision Tech now integrated and selling B2B comparison services Decision Tech now integrated into the Group • Adding growth to Home Communications and Mobile • B2C and B2B models B2B offer extended to add Energy comparison • Leveraging Group Platform Investments • API and White Label solutions Enco
Slide 19: Our digitisation of Mortgages has now begun
Our digitisation of Mortgages has now begun Remortgage market our first target for digitisation • Remortgages and product transfer account for ~60% of market • Addressable market of ~£500m of procurement fees • Third of mortgage customers miss out on a better deal First mobile-friendly journey live
Slide 20: 2019 Outlook
2019 Outlook To help households save more money than ever • Proud to be there for our customers in times of stretched household budgets Reinvent strategy operating at scale • Customer experience optimisation underpinning revenue growth • Increased innovation and new market growth Return to profit gr
Slide 21: Appendix
Moneysupermarket roup Appendix
Slide 22: Disclosure update
Disclosure update • Number of shares in issue 31 December 2018 – 536,319,819 • The impact from the transition to IFRS 16 on 2019 is estimated at : – Income statement: £3.0m reduction in rental costs , £2.6m increase to depreciation costs and £1.0m increase in finance costs – Balance sheet: Assets +
Slide 23: Dividends, EPS and dividend cover
Dividends, EPS and dividend cover Dividend (pence) 2018 2017 Interim 3.0 2.8 Final 8.1 7.6 Total ordinary dividend declared 11.1 10.4 Ratios 2018 2017 Earnings per share (Adjusted basic) 17.4 16.9 Dividend cover 1.6 x 1.6 x 23
Slide 24: Adjusted EBITDA
Adjusted EBITDA £Millions 2018 2017 Variance Variance Revenue 355.6 329.7 25.9 8% Gross profit 253.3 244.5 8.8 4% Gross margin 71% 74% Administrative costs (115.1) (111.0) (4.1) 4% Distribution costs (30.2) (29.3) (0.9) 3% Impairment of intangibles - (9.3) 9.3 Operating profit 108.0 94.9 13.1 14% Am
Slide 25: Adjusted cost base
Adjusted cost base £Millions 2018 2017 Growth Staff costs 56.6 54.1 5% Depreciation 1.4 1.2 17% Amortisation of technology 11.8 12.2 -3% Irrecoverable VAT 12.1 12.2 -1% Other administrative costs 25.0 21.7 15% Total Adjusted Administrative Costs 106.9 101.4 5% TV & Radio 25.5 25.1 2% Online spend 86
Slide 26: Tax and Earnings Per Share Calculations
Tax and Earnings Per Share Calculations £Millions 2018 2017 Profit before tax 106.9 96.1 Standard rate of tax 19.00% (2017: 19.25%) 20.3 18.5 Effects of: Expenses not deductible for tax purposes 0.2 0.2 Impact of changes in tax rates (1.4) 0.0 Adjustment in relation to prior periods 1.2 (0.7) Tax ex
Slide 27: Balance sheet
Balance sheet £Millions 2018 2017 Property, plant and equipment 13.8 9.4 Intangible assets – technology 35.2 32.1 Intangible assets - acquisition related 148.5 112.5 Investments 1.7 0.4 Trade and other receivables 49.6 42.9 Cash and cash equivalents 44.8 35.1 Total Assets 293.6 232.4 Trade and other
Slide 28: Our markets are worth £1.9bn and are growing
Our markets are worth £1.9bn and are growing ONLINE SWITCHING MARKET £1.9bn £1.2bn Insurance £500m Money £200m Home Services Forecast price comparison markets annual switching growth +4-5% Estimates based on our core markets and scaled for each vertical; using internal data and external sources. 28
Slide 29: Strategic KPIs
Strategic KPIs Help households save money £2.1bn 74 63% Savings made by customers Net promoter score Marketing margin 13m £15.90 Active users Revenue per active user Definitions: Estimated Savings made by customers in 2018 Net Promotor Score: Twelve monthly rolling average (1 January 2018- 31 Decemb
Moneysupermarket Group — FY2018 Earnings Presentation on 6ix