Slide 1: Preliminary Results for the year ended 31 January 2024
PRELIMINARY RESULTS for the year ended 31 January 2024 17 APRIL 2024
Slide 2: Speakers and Agenda
SPEAKERS AGENDA Mike Hazell Overview Mike Group CEO Financial performance Mark Insurance update Steve Mark Watkins Strategic progress Mike Group CFO Conclusion Mike Q&A Steve Kingshott Insurance CEO
Slide 3: Overview
OVERVIEW Mike Hazell Group CEO
Slide 4: Underlying profit more than doubled, alongside significant debt reduction
UNDERLYING PROFIT MORE THAN DOUBLED, ALONGSIDE SIGNIFICANT DEBT REDUCTION Underlying Revenue growth of 13% and Underlying Profit Before Tax more than double that of the prior year Strong cash flow generation supported further Net Debt reduction, closing the year at £637.2m, £74.5m lower than the pri
Slide 5: Performance across our core businesses
PERFORMANCE ACROSS OUR CORE BUSINESSES Database of 9.6m customers driving performance across each of our core businesses Cruise 88% Ocean Cruise 1.6m load factor Policy sales (2022/23 – 75%) (2022/23– 1.7m) £331 Ocean Cruise Current year per diem COR Cruise (2022/23– £318) Insurance 117.1% £43.8m Ri
Slide 6: Financial Performance
FINANCIAL PERFORMANCE Mark Watkins Group CFO
Slide 7: Profitability more than doubled, supporting strong cash generation
PROFITABILITY MORE THAN DOUBLED, SUPPORTING STRONG CASH GENERATION £m 2023/24 2022/23 Change Significant revenue increase (restated) driven by Cruise and Travel Underlying Revenue 732.7 648.9 13% Same trend drove 26% growth in Trading EBITDA Revenue 741.1 663.7 12% Underlying Profit Before Tax more
Slide 8: Cruise and Travel boost earnings despite Insurance pressure
CRUISE AND TRAVEL BOOST EARNINGS DESPITE INSURANCE PRESSURE £m 2023/24 2022/23 Change Strong customer demand saw (restated) Cruise and Travel return to profit Cruise and Travel 40.0 (9.9) >500% Insurance Broking continues to be dampened by challenging Insurance Broking (earned) 39.8 71.5 (44%) condi
Slide 9: Ocean Cruise exceeded our target
OCEAN CRUISE EXCEEDED OUR TARGET £m 2023/24 2022/23 Change Return to underlying profit, compared with small loss in Underlying Revenue 215.9 168.3 28% 2022/23 Gross profit 81.1 40.2 102% Underlying Revenue growth of Marketing expenses (12.3) (11.0) (12%) 28%, reflecting increased load factor of 88%
Slide 10: River Cruise returned to profit, with strong forward bookings
RIVER CRUISE RETURNED TO PROFIT, WITH STRONG FORWARD BOOKINGS £m 2023/24 2022/23 Change Revenue growth of 52%, supported by strong load factor Revenue 43.8 28.8 52% and per diems Gross profit 11.3 1.5 >500% Forward bookings for 2024/25 Marketing expenses (4.4) (3.2) (38%) significantly ahead of the
Slide 11: Travel returned to profit after three years of losses
TRAVEL RETURNED TO PROFIT AFTER THREE YEARS OF LOSSES £m 2023/24 2022/23 Change Revenue growth of 44%, driven by a 22% increase in passenger Revenue 156.3 108.4 44% numbers Gross profit 30.0 20.9 44% Return to underlying profit Marketing expenses (9.6) (10.2) 6% following three years of pandemic-dri
Slide 12: Managing the impact from challenging motor broking conditions
MANAGING THE IMPACT FROM CHALLENGING MOTOR BROKING CONDITIONS Year-on-year movement in written Insurance Broking Underlying Profit Before Tax (£m) 3.6 1.6 66.5 (31.0) (1.6) (0.6) (1.3) (2.8) 34.4 1 2 3 4 5 2022/23 Motor new Motor renewals Home PMI Travel CHMC and Underlying 2023/24 business contribu
Slide 13: Underwriting: price increases start to offset claims inflation
UNDERWRITING PRICE INCREASES START TO OFFSET CLAIMS INFLATION 2022/23 2023/24 2023/24 combined operating ratio (1.4%) 158.5 169.8 118.5% 117.1% 2022/23 10.7 2023/24 (1.4) Gross Reinsurance Net Insurance Underlying Revenue Underlying Profit/(Loss) Before Tax (before reinsurance arrangements) (after r
Slide 14: Actions taken to reduce our cost base
ACTIONS TAKEN TO REDUCE OUR COST BASE Underlying marketing costs (£m)* Reduction of £4.2m in core marketing 1.9 2.7 costs: (3.8) (1.4) (0.9) Pause in some specific Insurance activity given market conditions 41.0 Core reduction of 4.2 39.5 Reduction in Money, reflecting impact of inflation on equity
Slide 15: Net debt continues to reduce
NET DEBT CONTINUES TO REDUCE Movement in Net Debt (£m) 21.6 1.2 28.8 (35.0) (14.0) (9.4) (14.9) 39.3 (92.1) Available Operating Cash Flow before cash repayment from Cruise and Travel of 36.8 711.7 637.2 Available Operating Cash Flow of 143.8 1 Feb 2023 Unrestricted Dividend Working Capital River Cru
Slide 16: Updated net debt outlook
UPDATED NET DEBT OUTLOOK Debt reduction remains a key priority Deleverage profile Net Debt, at 31 January 2024, was £637.2m Group Net Debt £74.5m lower than the year before, including £711.7m Spirit of Adventure Available Cash of £169.8m Spirit of Discovery £637.2m This reflects the recovery in Ocea
Slide 17: Outlook 2024/25
2024/25 OUTLOOK Ocean Cruise – continued growth in load factor and per diems, driving increased EBITDA (Excluding Overheads) River Cruise and Travel – continued growth in revenue and passenger numbers, driving significant UPBT growth Insurance Broking – some margin erosion expected as we begin to st
Slide 18: Insurance Update
INSURANCE UPDATE Steve Kingshott Insurance CEO
Slide 19: Insurance is a profitable and differentiated business
INSURANCE IS A PROFITABLE AND DIFFERENTIATED BUSINESS Brand Differentiated Strong brand, with Distribution products awareness of 88% network Customer Insight into older people Loyal customer base, 1.9m insurance Underwriting database with motor and home quotes generated capability Travel and PMI res
Slide 20: Insurance broking challenged by regulatory change and inflation
INSURANCE BROKING CHALLENGED BY REGULATORY CHANGE AND INFLATION Policy decline in recent years… Total policies in force 1.7m In January 2022, the FCA’s GIPP review prompted market pricing adjustment and impacted our 1.5m competitiveness From mid-2022, unprecedented levels of motor 2020/21 2021/22 20
Slide 21: Motor three-year fixed-price drag on profit, impact unwinds from 2025
MOTOR THREE-YEAR FIXED-PRICE HAD A DRAG EFFECT ON PROFIT BUT Product unique to Saga, providing customers THE IMPACT UNWINDS FROM 2025 with reassurance and, Financial Year more recently, 2023/24 2024/25 2025/26 protection amidst the Business written rising cost of living 2021/22 in early 2021 was ade
Slide 22: Taking action to address the challenges
TAKING ACTION TO ADDRESS THE CHALLENGES Short-term measures to stabilise the business Exploring partnerships to drive long-term growth Investment in pricing competitiveness to reverse volume decline Focused on scaling the business while exploring partnership Investment in cost-efficient marketing to
Slide 23: Positioning Insurance for success
POSITIONING INSURANCE FOR SUCCESS We understand the issues and our actions are specifically designed to address them Easing pressure on three-year fixed-price policies provides the headroom to make the necessary changes We are heading into a transitional period as these actions take time to flow thr
Slide 24: Strategic Progress
STRATEGIC PROGRESS Mike Hazell Group CEO
Slide 25: Our vision delivered through our growth plan
DELIVERED THROUGH OUR GROWTH PLAN… OUR VISION IS TO BE THE 1 2 3 LARGEST AND Maximising our core Reducing debt through Growing our customer MOST- businesses capital-light growth base and deepening our TRUSTED customer relationships BRAND FOR Driving our Cruise, Travel, Delivering capital-light growt
Slide 26: Continued progress towards maximising our core businesses
CONTINUED PROGRESS TOWARDS MAXIMISING OUR CORE BUSINESSES Progress in 2023/24 2024/25 priorities tNPS of 74, up from 58 last year, driven by an Explore Ocean Cruise almost four-fold increase in River Cruise partnership opportunities to Our third purpose-built river ship, Spirit of the support our st
Slide 27: Driving growth, reducing debt and delivering strategic partnerships
DRIVING GROWTH, REDUCING DEBT AND DELIVERING STRATEGIC PARTNERSHIPS Our ambition is to fuel growth through the move towards a capital-light model Partnerships could be a key driver of strategic growth and debt reduction Strong Ocean Cruise demand means the business is nearing optimum capacity with t
Slide 28: Deepening our connections to best serve customers' needs
DEEPENING OUR CONNECTIONS, ENABLING US TO BEST SERVE OUR CUSTOMERS’ NEEDS Leveraging the Maximising the Broadening our Deepening customer Saga brand potential of our data customer reach engagement 88% prompted brand 26.2m UK people over 50, Over 15.0m website visitors Brand new Saga Magazine site aw
Slide 29: The leading voice for people over 50
THE LEADING VOICE FOR PEOPLE OVER 50
Slide 30: Conclusion
CONCLUSION Mike Hazell Group CEO
Slide 31: A pathway to growth
A PATHWAY TO GROWTH Considerable progress in 2023/24 Strong financial result with doubling of underlying profit, driven by growth in Cruise and Travel, alongside significant debt reduction Building the foundations for growth Further growth potential in Cruise and Travel, supported by strong forward
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Slide 33: Dates for the diary
2024 DATES FOR 18 April – Private investor presentation THE DIARY 25 June – Annual General Meeting 2 October – Interim results for the six months ending 31 July 2024
Slide 34: Appendix
APPENDIX
Slide 35: Saga plc consolidated income statement
SAGA PLC CONSOLIDATED INCOME STATEMENT 2023/24 Change 2022/23 £m (restated) Underlying Revenue 732.7 13% 648.9 Underlying Profit Before Tax Cruise and Travel 40.0 >500% (9.9) Insurance Broking (earned) 39.8 (44%) 71.5 Insurance Underwriting (1.4) (113%) 10.7 Total Insurance 38.4 (53%) 82.2 Other Bus
Slide 36: Consolidated income statement (under previous IFRS)
SAGA PLC CONSOLIDATED INCOME STATEMENT (UNDER PREVIOUS IFRS) £m 2023/24 Change 2022/23 Underlying Revenue 666.3 15% 581.1 Underlying Profit Before Tax Cruise and Travel 40.0 >500% (9.9) Insurance Broking (earned) 38.8 (44%) 69.1 Insurance Underwriting 6.7 (65%) 19.1 Total Insurance 45.5 (48%) 88.2 O
Slide 37: Underlying to statutory marketing and administration costs
UNDERLYING TO STATUTORY MARKETING AND ADMINISTRATION COSTS £m 2023/24 2022/23 (restated) Underlying marketing costs (page 14) 39.5 41.0 Underlying administration costs (page 14) 137.3 135.7 Total underlying marketing and administration costs 176.8 176.7 Restructuring costs 40.3 3.7 Insurance Underwr
Slide 38: Cruise and Travel income statement
CRUISE AND TRAVEL INCOME STATEMENT 2023/24 Change 2022/23 £m Ocean River Travel Cruise Ocean River Travel Cruise Cruise Cruise and Cruise Cruise and Travel Travel Underlying Revenue 215.9 43.8 156.3 416.0 36% 168.3 28.8 108.4 305.5 Gross profit 81.1 11.3 30.0 122.4 96% 40.2 1.5 20.9 62.6 Marketing e
Slide 39: Insurance Broking income statement
INSURANCE BROKING INCOME STATEMENT Motor Home Other Total Change Total £m Broking Broking Broking 2023/24 2022/23 (restated) Broked 114.1 162.4 131.0 407.5 8% 379.0 Underwritten 195.5 - 3.0 198.5 8% 184.1 Gross Written Premiums 309.6 162.4 134.0 606.0 8% 563.1 Broker revenue 4.5 25.4 45.1 75.0 (28%)
Slide 40: Insurance Underwriting income statement
INSURANCE UNDERWRITING INCOME STATEMENT 2023/24 Change 2022/23 Gross Re- Net Gross £m insurance (restated) Insurance Underlying Revenue A 169.8 (17.0) 152.8 7% 158.5 Incurred claims (current year claims) B (170.9) 22.3 (148.6) 3% (176.1) Claims handling costs in relation to incurred claims C (15.6)
Slide 41: Other Businesses and Central Costs income statement
OTHER BUSINESSES AND CENTRAL COSTS INCOME STATEMENT 2023/24 2022/23 (restated) £m Other Central Total Change Other Central Total Businesses Costs Businesses Costs Underlying Revenue: Money 6.4 - 6.4 (19%) 7.9 - 7.9 Media and CustomerKNECT 12.3 - 12.3 19% 10.3 - 10.3 Insight - - - (100%) 0.6 - 0.6 Ot
Slide 42: Cash flow and liquidity
CASH FLOW AND LIQUIDITY 2023/24 Change 2022/23 £m (restated) Insurance Broking Trading EBITDA 47.2 (40%) 78.2 Other Businesses and Central Costs Trading EBITDA (12.2) 59% (29.5) Trading EBITDA from unrestricted businesses 35.0 (28%) 48.7 Dividends paid by Insurance Underwriting business 14.0 (44%) 2
Slide 43: Cruise and Travel cash flows
CRUISE AND TRAVEL CASH FLOWS Ocean Cruise Available Operating Cash Flow of 92.1 Positive net advance customer receipts, reflecting strong forward bookings 82.2 Net trading income represents cash (3.8) (1.0) received on departed cruises, partially (15.2) offset by running costs associated with those