Selectquote, Inc. · NYSE:SLQT
Selectquote — Investor Presentation (October 2020)
26 slides from Selectquote's investor presentation, Oct 5, 2020
Slide 1: SelectQuote Investor Presentation October 2020
Exhibit 99.1 SelectQuote Investor Presentation October 2020
Slide 2: Disclaimer: Forward-Looking Statements
Disclaimer Forward-Looking Statements This presentation contains forward-looking statements. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use o
Slide 3: SelectQuote at a Glance
SelectQuote at a Glance 30+ 100% Years in Internal Operation Agents WHO WE ARE We are a leading technology-enabled, direct-to- 2MM+ 1 Billion+ consumer (“DTC”) distribution platform Policyholders Data points collected Served ~1,000 $180Bn+ Licensed Total Addressable WHAT WE DO Agents(1) Market FY 20
Slide 4: Key Investment Highlights
Key Investment Highlights Large and Growing End Markets Shifting to Meet Evolving Consumer Preferences Purpose-Built Technology Empowering Our Highly Skilled Internal Agent Network Self-Reinforcing Feedback Loop from Strong Carrier Relationships and Favorable Consumer Outcomes Simple and Attractive
Slide 5: Demographics: Accelerating Growth of Senior Population
Demographics High Degree of Visibility to Accelerating Growth of Senior Population MA / MS Enrollment and Penetration Are Growing ($MM) 76.7 68.4 23.3 59.9 23.7 52.5 24.2 70% 45.5 26.4 65% 25.5 60% 44% 50% 53.4 44.7 35.7 20.0 26.1 2008A 2013A 2018A 2023E 2028E MA / MS Other Medicare MA / MS Enrollme
Slide 6: Market Demands Have Evolved Dramatically
Market Demands Have Evolved Dramatically Consumers Desire Expertise, Simplicity, Specialized Service for Complex Purchasing Decisions Industry Norm What the Market Wants Face-to-face and time-intensive Over the phone, convenient and efficient Limited coverage options and agent expertise Knowledgeabl
Slide 7: Our Differentiated Approach
Our Differentiated Approach Our Foundational Pillars Our Technology Our Agents Technology optimizes our lead acquisition, intelligently matches leads Agents enhance lead conversion to agents and maximizes our return on and maximize revenue opportunity marketing spend Proprietary, data-driven Highly
Slide 8: Our Approach is Rooted in Sophisticated Technology
Our Approach is Rooted in Sophisticated Technology Scalable, Proprietary Technology Solutions from End-to-End Proprietary, purpose-built technology platform SelectCare Core proprietary CRM and parent system, with sales enablement / workflow optimization tools, including lead scoring, lead distributi
Slide 9: We Engage in Omni-Channel Lead Acquisition
We Engage in Omni-Channel Lead Acquisition 9
Slide 10: Agents Flex from One Segment to Another in a Seasonal Business
Submitted Policies Illustrative SeniorMonthlyProduction Agents AreAbletoFlexfromOneSegmentAnotherinaHighlySeasonal Business Our ProductDiversificationandFlexModelImpact Retention Jul AEP/OEP creates seasonal upswing in business volumes with Aug ~70% of MA and MS policies written in this window Sep M
Slide 11: SelectQuote Senior – Overview
SelectQuote Senior – Overview Provides the 65+ Senior market with leading online comparison shopping and expert advice SelectQuote Business Mix by Approved Policies Skilled agents guide seniors through complex sales and Other Prescription Drug 1% enrollment process (primarily MA and MS) Plan 4% Repr
Slide 12: SelectQuote Life – Overview
SelectQuote Life – Overview • Leading distributor of term life insurance founded in 1985 • SelectQuote was the first term life insurance exchange platform in the U.S. Places policies on behalf of 15 leading, nationally recognized SelectQuote Life Premium Mix insurance carrier partners (primarily Ter
Slide 13: SelectQuote Life – Final Expense Product
SelectQuote Life – Overview – Final Expense Product Basic death benefit to cover funeral expenses via simplified or even no medical underwriting SelectQuote Life Ancillary Premium FY Growth ($MM) Fast, straightforward sales process with simplified or even no medical underwriting leads to high agent
Slide 14: SelectQuote Auto & Home – Overview
SelectQuote Auto & Home – Overview Licensed agents providing expert advice to 35,000+ customers annually(1) Total Premium ($MM) Provides unbiased online comparison shopping platform for auto, home and specialty insurance lines 18% FY 2018 - FY 2020 CAGR: 70 Frequently bundle products to deliver cust
Slide 15: Strategic Focus and Competitive Differentiators
Strategic Focus and Competitive Differentiators • Our strategy is to maximize absolute profitability at attractive returns on invested capital divisions • Our choice model paired with highly trained, in- house agents and dedicated customer care teams was purpose-built to ensure customers buy the rig
Slide 16: What Is Policyholder Lifetime Value?
What Is Policyholder Lifetime Value? Under ASC 606, SelectQuote Recognizes the Upfront Commission and the Estimated Value of Renewal Commissions as Revenue in the Period in Which the Policy Is Approved Policyholder Lifetime Value from a MA / MS Policy Persistency Rates Upfront Commission Components
Slide 17: How We Maximize Policyholder Lifetime Value
How We Maximize Policyholder Lifetime Value SelectQuote Seeks to Optimize all Components of Policyholder Lifetime Value Acquisition Costs Lead Close Rates Commissions Customer Retention Favorable Dedicated Multi-channel Agent leveling commission “Customer Care” lead scoring system structures team Op
Slide 18: Industry Leading Unit Economics
Industry Leading Unit Economics FY June 30, 2020 $1,485 Total Revenue / SLQT Peer A Peer B Total Cost (6) 1.7x 1.7x 1.4x $887 $598 Revenue per approved MA/MS policy(1) Cost per approved MA/MS policy(2) Adj. EBITDA per approved MA/MS policy(3)(7) (4) (5) SelectQuote Peer A Peer B Notes: Source: Analy
Slide 19: We Have a High-Growth, Scalable Business Model
We Have a High-Growth, Scalable Business Model(1) Revenue(2) Adj. EBITDA(2)(3) ($MM) ($MM) Adj. EBITDA 21% 31% 29% Margin(3) 51% 532 CAGR: 41 154 9 130 28 76% 337 CAGR: 105 35 8 26 234 110 33 50 362 146 9 98 23 90 192 102 37 (19) (19) FY 2018 FY 2019 FY 2020 (28) Senior Life Auto & Home Corp FY 2018
Slide 20: Predictable Cash Flow & Attractive Returns
Predictable Cash Flow & Attractive Returns Annual Customer Cohorts Added as Recently as 2018 Are Already Cash Flow Positive • All costs incurred in year 1 of customer life • Per ASC 606, anticipated lifetime revenue recognized in year 1 • On a cash basis, cohorts typically breakeven in year 2-3 • Si
Slide 21: Our Attractive and Scalable Platform Is Growing
Our Attractive and Scalable Platform Is Growing… Our Platform Provides Ample Support for Future Years of Growth with Minimal Ongoing Working Capital Requirements Our Drivers of Continued Growth Introduce new products Deepen consumer penetration and drive cross-sell opportunities Maximize policyholde
Slide 22: Cross-Sell Example - Growing Final Expense Business
Cross-Sell Example - Growing Final Expense Business SelectQuote Currently Offers Over 20 Products and Continuously Evaluates New Opportunities Features of the SelectQuote Platform: Scalable model with nimble approach Senior Auto & Life Health Home Est. 1985 Est. 2010 Est. 2011 Growing Final Expense
Slide 23: Supplemental information
Supplemental information 23
Slide 24: FY 2020 Adjusted EBITDA to Net Income Reconciliation
FY 2020 Adjusted EBITDA to Net Income Reconciliation FY 2020 (in thousands) Senior Life Auto & Home Corp & Elims Consolidated Revenue $ 361,673 $ 129,967 $ 41,189 $ (1,314) $ 531,515 Operating expenses (215,935) (102,155) (32,490) (26,881) (377,461) Other expenses, net — — — (30) (30) Adjusted EBITD
Slide 25: FY 2019 Adjusted EBITDA to Net Income Reconciliation
FY 2019 Adjusted EBITDA to Net Income Reconciliation FY 2019 (in thousands) Senior Life Auto & Home Corp & Elims Consolidated Revenue $ 192,257 $ 110,493 $ 35,054 $ (335) $ 337,469 Operating expenses (102,083) (84,672) (27,237) (18,184) (232,176) Other expenses, net — — — (15) (15) Adjusted EBITDA 9
Slide 26: FY 2018 Adjusted EBITDA to Net Income Reconciliation
FY 2018 Adjusted EBITDA to Net Income Reconciliation FY 2018 (in thousands) Senior Life Auto & Home Corp & Elims Consolidated Revenue $ 102,408 $ 98,218 $ 33,348 $ (286) $ 233,688 Operating expenses (65,720) (75,249) (24,127) (18,657) (183,753) Other expenses, net — — — (9) (9) Adjusted EBITDA 36,68