Mony Group Plc · LSE:MONY
Mony — Moneysupermarket.com Group — FY2016 Earnings Presentation
44 slides from Mony's earnings presentation, Feb 28, 2017
Slide 1: Preliminary Results
Preliminary Results 28 February 2017
Slide 2: Bruce Carnegie-Brown, Chairman
Bruce Carnegie-Brown Chairman
Slide 3: Chairman's statement on returns and growth
‘‘Our goal is generating returns for our customers and shareholders in the present and building growth in the future. ‘’We are announcing a return of capital of £40 million to enhance shareholder value today, and introducing our new CEO, Mark Lewis, who will shape and deliver our growth for tomorrow
Slide 4: Mark Lewis
Moneysupermarket [ Group Mark Lewis
Slide 5: Matthew Price, Chief Financial Officer
Matthew Price Chief Financial Officer
Slide 6: Full year themes
Full year themes Diversified business operating in attractive growth markets • 12% revenue growth, and exiting the year strongly, led by Insurance • Increased diversity with great market positions in Insurance, Money and Home Services • Core markets worth c£1.6bn and growing at 11% Continued investm
Slide 7: We continue to grow our diversified business
We continue to grow our diversified business 7
Slide 8: Revenue growth converted to profit
Revenue growth converted to profit £Millions FY 2016 FY 2015 Growth Revenue 316.4 281.7 +12% Gross Margin 75% 80% Adjusted EBITDA 120.8 110.1 +10% EBITDA margin % 38% 39% Depreciation & Software Amortisation (13.0) (10.0) Adjusted Operating Profit * 107.8 100.1 +8% Adjusted Operating Profit margin %
Slide 9: Progress on KPI performance
Progress on KPI performance Best Site Earn Customer Loyalty Preferred partner £279m £279m £279m 23m (-1%) 22m (+19%) 980 (+12%) Unique monthly People choosing Number of visitors to share data providers 43% (-5%*) £23m (+£3m) Net Promoter 64% (-4%) Investment in Score Marketing Technology margin £1.8
Slide 10: Delivering strong growth
Delivering strong growth Revenues £Millions FY 2016 FY 2015 FY Growth (%) Insurance 155.2 140.2 +11% Money 78.9 72.4 +9% Home Services 51.0 37.5 +36% MoneySuperMarket.com 285.1 250.1 +14% MoneySavingExpert.com 36.8 30.7 +20% TravelSupermarket.com 22.3 24.5 -9% Intra-group eliminations and (27.8) (23
Slide 11: Our core markets are worth c.£1.6bn, growing at 11%
Our core markets are worth c.£1.6bn, growing at 11% Online Switching Market Today Insurance £1000m +11% Money £450m GROWTH 2016 Home Services £150m Source: Based on internal data and external sources 11 Note: £ relates to PCW revenue
Slide 12: Insurance: Growing robustly by 11% in 2016
Insurance: Growing robustly by 11% in 2016 Home, Motor and Travel Insurance CAGR 2012 – 2016 72 +7% MSM sales new / switching Volume of products / millions 26 23 +4% Online sales new / switching Online Competition Online includes three other material aggregators (Confused.com, CompareTheMarket.com a
Slide 13: Money: Removing barriers for consumers
Money: Removing barriers for consumers Cards & Loans CAGR 2012 – 2016 44 +16% MSM sales new / switching Volume of products / millions +15% Online sales new / switching 6 22 M 3 Online Competition Apart from Moneysupermarket, the online market is predominantly direct sales on bank, credit card 1.4 an
Slide 14: Energy: Significant market opportunity
Energy: Significant market opportunity Energy CAGR 2014 – 2016 50 +52% MSM sales new / switching Volume of products / millions +24% Online sales new / switching 4 3 Online Competition 1.5 Apart from Moneysupermarket, the online market 0.6 is a mix of other aggregators and direct sales by providers 2
Slide 15: Profitable growth from up-weighting online marketing
Profitable growth from up-weighting online marketing Marketing Spend Revenue by source FY FY FY £316m £Millions £282m 1% 2016 2015 (%) £300 1% Offline spend 28.7 25.8 +11% 22% £250 15% Online spend 62.8 45.5 +38% £200 millions Other 5.6 8.4 -33% £150 77% 84% Total Group 97.1 79.7 22% £100 Marketing
Slide 16: Creating options for future differentiation
Creating options for future differentiation Total Tech Investment Reinvestment rate (%) 50 £46m 45 £43m 40 15% 15% FY2015 FY2016 35 £23m £20m 30 25 20 • Operating costs are mainly staff costs and licenses 15 • Operating costs will increase £2-3M as we complete the transition from capitalised build p
Slide 17: From search to serve model with data and personalisation
From search to serve model with data and personalisation 2009 2016 Technology enabler • Single view of the customer • Agile Content Management system • Service for customers to search • Results that go beyond price • Static best buy table • Increasingly we will deliver customers recommendations base
Slide 18: Strong cash position after distributing £52M to shareholders
Strong cash position after distributing £52M to shareholders Note: Other smaller items include £1.9M Share option charges, £0.8M Disposal of an associate £(0.5)M Interest and facility costs, and (£3.9)M Share purchases from EBT 18
Slide 19: Priorities growth & delivering £94M to shareholders
Priorities growth & delivering £94M to shareholders £ Organic Growth Ordinary dividends Acquisitions Special distribution • Group will borrow to fund growth investments, not to finance distributions to shareholders • Return a further £40M through share buy back 19
Slide 20: The best place for people to switch & save
The best place for people to switch & save • Strong and diversified positons in markets worth £1.6bn and growing • Great opportunities for further growth as consumers continue to shift online to save money on their household bills and financial products • Technology investment aims to accelerate our
Slide 21: Peter Plumb, Chief Executive Officer
Peter Plumb Chief Executive Officer
Slide 22: 2016: Good year building momentum to strong Q4 trading
2016: Good year building momentum to strong Q4 trading We saved 7M families £1.8bn on their household bills Business Summary • Group Brands were used by an estimated 39M unique users (85% of UK online adults) • MoneySuperMarket.com: +14% - credit products strong, insurance strong H2 • MoneySavingExp
Slide 23: Helping every household make the most of their money
Helping every household make the most of their money Our simple strategy continues to focus the Group on our customers and users 2010 2016 23
Slide 24: MoneySuperMarket: Insurance re-engineered for growth
MoneySuperMarket: Insurance re-engineered for growth Motor Insurance is all about delivering our ‘Best Price’ and ‘Best Shop’ ambition Price: Product: ’Best Price’ delivered Policy details through data transparent at the level analytics the customer wants Ease: ’Best Site’ powered by new Fusion plat
Slide 25: MoneySavingExpert.com: growth engine for Energy
MoneySavingExpert.com: growth engine for Energy Cheap Energy Club has 2.6M members and switched 0.6M users in 2016 Ease: Energy Club’s 2.6M Price: members get an Collective Switch email when they tariffs can save Incentives: Cash back deals from MSE *Customer consideration factor What customers want
Slide 26: MoneySavingExpert: Trusted service driving Money growth
MoneySavingExpert: Trusted service driving Money growth Credit Club offers personalised product search and trusted expert content 2016 ‘Soft Launch’ 2017 ‘Hard Launch’ Price: Ease: Best personal Access to your rate for the Product: personal credit amount Expert guides file I need to and product borr
Slide 27: The Group has driven growth through continued innovation
The Group has driven growth through continued innovation Saving more customers more money every year 2016: OnTrees: MyProfile integration Credit Club Engineered (Acquired 2014) 2015 2014: Energy Club Launched: Fusion re-platform 2013 commenced Market IQ launched: 2012: Rev MSE Acquired 2011 £316M Mo
Slide 28: Group has unique building blocks for continued innovation
Group has unique building blocks for continued innovation Apps are now the preferred way to manage bank accounts in UK Group Platform Engineering new services ‘OnTrees’ ‘GO’ ‘APIs’ Account Aggregation Easy Switching and Money Management Conversation Commerce EDW 38M Content 20,000,000 pages 547 Prov
Slide 29: Current trading: 2017
Current trading: 2017 Insurance in strong growth, energy phasing likely to be different to 2016 Market • Insurance: Prices continue to rise • Energy: Prices rises coming through from some of the Big 6, although small players dominate low tariffs • Money: Cheap lending continues • Travel: Package hol
Slide 30: Q&A
Q&A Peter Plumb & Matthew Price
Slide 31: Preliminary Results
Preliminary Results 28 February 2017
Slide 32: Appendix
32 Appendix Moneysupermarket a Group
Slide 33: Unique monthly users
Unique monthly users Monthly Unique Users 18,000,000 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 Source: Google Analytics 33
Slide 34: Cash and capital update
Cash and capital update • We incurred software amortisation costs of £11 million this year. We expect technology amortisation to be in the region of £17 million for 2017 • We expect to make capital investment of up to £17 million in 2017 • Amortisation of the intangible assets related to the pre IPO
Slide 35: We continue our progressive dividend policy
We continue our progressive dividend policy Dividend (pence) 2016 2015 Interim 2.75 2.55 Final 7.10 6.60 Total Ordinary Dividend Declared 9.85 +8% 9.15 Adjusted Earnings Per Share 15.7 14.5 Dividend Cover 1.6 x 1.6 x • Returning a further £40M through share buy back Dates for Final dividend – 6th Ap
Slide 36: Adjusted operating profit
Adjusted operating profit Revenues £ Millions FY 2016 FY 2015 Variance Variance % Revenue 316.4 281.7 34.7 +12% Gross Profit 236.8 225.4 11.4 +5% Gross Margin 75% 80% Administrative Costs (109.2) (110.8) (1.6) -1% Distribution Costs (34.3) (34.2) (0.1) 0% Impairment of intangible assets (2.2) - (2.2
Slide 37: Adjusted cost base
Adjusted cost base £Millions FY 2016 FY 2015 Variance Variance % Staff Costs 50.6 51.1 (0.5) -1% Depreciation 1.9 2.6 (0.7) -27% Amortisation of technology 11.1 7.4 3.7 +50% Irrecoverable VAT 9.8 7.4 2.4 +32% Other admin 21.5 22.6 (1.1) -5% Total Adjusted Admin 94.9 91.1 3.8 +4% Advertising 28.7 25.
Slide 38: Gross margin impacted by higher online marketing
Gross margin impacted by higher online marketing FY H2 H1 FY H2 H1 £Millions 2016 2016 2016 2015 2015 2015 Revenue 316.4 158.8 157.6 281.7 137.8 143.9 Cost of sales (79.6) (42.4) (37.2) (56.3) (27.3) (29.0) Gross profit 236.8 116.4 120.4 225.4 110.5 114.9 GP % 74.8% 73.3% 76.4% 80.0% 80.2% 79.8% 38
Slide 39: Tax and Earnings per share calculation
Tax and Earnings per share calculation £Millions FY 2016 FY 2015 Profit before tax 91.3 79.8 Standard rate of tax 20.00% (2015: 20.25%) 18.3 16.2 Effects of: Expenses not deductible for tax purposes 0.1 0.3 Movement related to share based payments 0.1 - Impact of changes in tax rate - (0.1) Adjustme
Slide 40: Statutory balance sheet
Statutory balance sheet £Millions 31-Dec-16 31-Dec-15 Property, Plant And Equipment 7.5 8.7 Intangible Assets - Technology 37.8 28.1 Intangible Assets - Acquisition related 119.8 135.8 Investments 0.5 - Trade and Other Receivables 39.3 32.4 Cash and Cash Equivalents 44.6 16.7 Total Assets 249.5 221.
Slide 41: Cash flow seasonality
Cash flow seasonality £Millions H1 2016 H2 2016 FY 2016 Adjusted Operating Profit 53.8 54.0 107.8 Depreciation 1.1 0.8 1.9 Amortisation of technology related intangible assets 4.8 6.3 11.1 Dividends (36.5) (15.1) (51.6) Tax (7.6) (8.3) (15.9) Purchase of shares by employee trust (2.3) (1.6) (3.9) Di
Slide 42: 2016 Quarterly performance
2016 Quarterly performance £Millions Q1 16 Q2 16 Q3 16 Q4 16 FY 2016 MoneySuperMarket.com 76.0 66.2 76.0 66.9 285.1 MoneySavingExpert.com 11.2 8.1 9.2 8.3 36.8 TravelSupermarket.com 5.3 5.8 6.9 4.4 22.3 Intragroup / Other (8.9) (6.1) (7.1) (5.7) (27.8) Group Revenues 83.7 73.9 84.9 73.9 316.4 Growth
Slide 43: Perceptions and realities
Perceptions and realities Perceptions: Insurance is a mature market The barriers to entry are low The core competitor group is unchanged Insurance delivered 11% YOY revenue growth 2016 Deep relationships with providers needed to deliver personalised results rather than Insurance includes fou
Slide 44: Customers keep saving year after year
Customers keep saving year after year Fuelling continued structural growth opportunity across the Group Jan 2015 Jan 2013 Jan 2016 Jan Jan 2017 2013 Product Product Average Average Product Average Product Average Average Average Policy Policy MSM MSM Saving Saving Average Policy MSM Saving Average P
Moneysupermarket.com Group — FY2016 Earnings Presentation on 6ix