Mony Group Plc · LSE:MONY
Mony — Moneysupermarket Group — FY2020 Earnings Presentation
36 slides from Mony's earnings presentation, Feb 18, 2021
Slide 1: Preliminary results
Preliminary results 18 February 2021
Slide 2: Peter Duffy, Chief Executive Officer
Peter Duffy Chief Executive Officer IMAGE TO FOLLOW
Slide 3: Scilla Grimble, Chief Financial Officer
Scilla Grimble Chief Financial Officer
Slide 4: Financial highlights
Financial highlights Helping households save money -11% -24% -27% Revenue Adjusted EBITDA Reported EPS £345m £108m 12.9p +1ppt -26% flat Reinvestment rate Operating cashflow Dividend per share 10% £84m 11.71p 4
Slide 5: Topline performance varied by vertical…
Topline performance varied by vertical… • Group revenue down 11%; down 4% excluding Revenue travel channels £388m • Insurance broadly flat yoy ex travel insurance – £45m strong market growth in car offsetting weaker £345m home and life £69m £40m • Home Services flat on exceptional 2019; grew share £
Slide 6: … and by quarter, with COVID-19 impact lessening after first lockdown
… and by quarter, with COVID-19 impact lessening after first lockdown Insurance YoY revenue growth Money YoY revenue growth 8 -8 -3 -26 -11 -44 -40 -22 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 • Strong Q1 performance from COVID-19 linked travel and life tailwind • Providers tightened lending criteria from March; imp
Slide 7: Lower Money conversion main drag on gross margin
Lower Money conversion main drag on gross margin Gross margin 2019: 68.6% Gross margin 2020: 66.5% Money • Lower conversion in cards and • Ongoing shift to mobile Device mix conversion loans due to tightened lending • Offset by significant decline in criteria neutral impact tablet which mixed into d
Slide 8: Costs controlled; continued to invest for future growth
Costs controlled; continued to invest for future growth Revenue cost base Adjusted • Costs down 4% in the year, mainly due to staff costs £266m • Staff costs lower principally due to lower incentive £256m £19m costs £18m £36m £35m • Marketing spend broadly flat – change in mix of spend £59m • Expect
Slide 9: Changing mix in marketing spend
Changing mix in marketing spend Marketing spend and marketing margin • PPC bidding adapted for lower conversion in several channels 61% 57% • Increase in TV and radio in line with flagged £5m investment £152m £150m £30m £36m • Other spend up 19% driven by growth of Decision Tech and associated affil
Slide 10: Cash generation remains robust
Cash generation remains robust Operating cash flow £83.9m Includes £7.1m of investments (0.0) (24.6) 0.7 (17.6) 107.8 (4.1) 62.2 (62.8) (0.6) Adjusted Working Tax Non-cash Capex and Financing Cash flow before Dividends Cash flow after EBITDA capital items investments costs returns to returns to shar
Slide 11: Capital allocation framework remains unchanged
Capital allocation framework remains unchanged Organic Ordinary Enhanced growth Dividends Acquisitions Distributions 11
Slide 12: Outlook
Outlook Current COVID-19 impact; pace of lockdown measures easing will determine 2021 performance • Recovery dependent on length and severity of lockdowns which impact our end markets • Performance YTD significantly COVID-19 impacted (and good Q1 2020 comparable) Broad consensus range reflects curre
Slide 13: Peter Duffy, Chief Executive Officer
IMAGE TO FOLLOW Peter Duffy Chief Executive Officer
Slide 14: Helping households save money
Helping households save money Efficient Retain Expanding acquisition and grow our offer • Best-in-class digital efficiency • Engaged relationships - helpful • Further channels • Effective marketing prompts and reminders • Wider audiences • Seamless, shorter journeys • Targeted, relevant cross-sell •
Slide 15: Increasing efficiency in all acquisition routes
Increasing efficiency in all acquisition routes Efficient acquisition More sophisticated PPC bidding Sharpening MSM brand proposition Migrating platform this half – enhanced Live campaigns reinforcing targeting, real-time decision-making breadth of MSM offer Transitioned to Data Science teams New ma
Slide 16: Retention, cross-sell and engagement will be centre stage
Retention, cross-sell and engagement will be centre stage Retain and grow Stronger CRM – prompts Retention and reminders Higher repeat rates 'Productised' renewal – preferences and details stored Cross-sell Greater share of wallet "They know me and my preferences" Engagement Regular, relevant MSM en
Slide 17: Retention, cross-sell and engagement will be centre stage
Retention, cross-sell and engagement will be centre stage Retain and grow Next best actions fed by Retention recommendation engine Higher repeat rates Consistent messaging on dashboard, app & CRM Prepopulated data in other Cross-sell channels Greater share of wallet "They help me make more savings"
Slide 18: Retention, cross-sell and engagement will be centre stage
Retention, cross-sell and engagement will be centre stage Retain and grow Regular engagement – Year 1 value per Retention customer (£) monitors and reminders Higher repeat rates c.60% Credit Monitor at c.1m users – more enquiries in more channels, with more direct traffic Cross-sell Greater share of
Slide 19: Evolving to a leading data platform
Evolving to a leading data platform Enabling our business Outdated data infrastructure hindered progress • Fragmented, incomplete datasets • Internal inefficiencies diverting resource • Sub-optimal marketing to consumers Data transformation underway • Transitioning to modern GCP-based data architect
Slide 20: MSE energy propositions working well for consumers and providers
MSE energy propositions working well for consumers and providers Retain and grow Three services addressing all consumer needs • DIY: regular switching service • Pick Me A Tariff (PMAT): preference-based selection • Autoswitch: PMAT + approved switch at anniversary PMAT popular with consumers and pro
Slide 21: Helping households save money
Helping households save money Efficient Retain Expanding acquisition and grow our offer • Best-in-class digital efficiency • Engaged relationships - helpful • Further channels • Effective marketing prompts and reminders • Wider audiences • Seamless, shorter journeys • Targeted, relevant cross-sell •
Slide 22: Decision Tech continues to perform well
Decision Tech continues to perform well Expanding our offer Successful DT acquisition and B2B expansion • Opportunity to target further consumers on other sites Selected energy B2B partners • Leverages existing infrastructure and commercial relationships • However, structurally lower margins than B2
Slide 23: Rolling out mortgage solutions
Rolling out mortgage solutions Expanding our offer Consumer use-case Digitising a large, attractive market • Large intermediary market; commission c.£500 per sale1 First-time Home Re- • Slow and highly clerical process buyer mover mortgage Buy to let • High MSMG share of traffic (25-30%) Cover all u
Slide 24: FCA General Insurance changes present both risk and opportunity
FCA General Insurance changes present both risk and opportunity Many triggers for switching FCA initial proposals (example for car insurance) • Equalise car and home pricing for same customers in same distribution channel, whether new or existing Price changes – Insurer Price changes – customer risk
Slide 25: Changes to org to drive accountability and execution
Changes to org to drive accountability and execution Enabling our business General Managers in Acquired insurance Home Services under Senior Data roles each vertical partner CYTI common leadership onto Exec 25
Slide 26: Helping households save money
Helping households save money Efficient Retain Expanding acquisition and grow our offer • Best-in-class digital efficiency • Engaged relationships - helpful • Further channels • Effective marketing prompts and reminders • Wider audiences • Seamless, shorter journeys • Targeted, relevant cross-sell •
Slide 27: Appendix
Appendix
Slide 28: Strategic KPIs
Strategic KPIs Helping households save money £2.0bn 72 57% (2019: £2.0bn) (2019: 74) (2019: 61%) Savings made by customer Net promoter score Marketing margin 11.5m £16.19 (2019: 13.1m) (2019: £16.40) Active users Revenue per active user Definitions: Estimated Savings made by customers in 2020 Net Pr
Slide 29: Fulfilling our purpose and ESG responsibilities
Fulfilling our purpose and ESG responsibilities Purpose • Purpose to help households save money even more relevant in uncertain times • £2bn household savings delivered in 2020 Helping households save money • 11.5m active users in 2020 MoneySavingExpert • Consumer finance champion, successfully camp
Slide 30: Income Statement
Income Statement £million 2020 2019 Growth Revenue 344.9 388.4 -11% Gross margin 67% 69% Adjusted EBITDA * 107.8 141.5 -24% EBITDA margin 31% 36% Depreciation & software amortisation (18.4) (18.5) Adjusting items ** (2.4) (4.7) Operating profit 87.0 118.3 -26% Change in fair value of financial instr
Slide 31: Income Statement
Income Statement £million 2020 2019 Growth Operating profit 87.0 118.3 -26% Strategy related costs - 2.3 Amortisation of acquired intangible assets 2.4 2.4 Amortisation of technology related intangible assets 13.9 14.0 Depreciation 4.5 4.5 Adjusted EBITDA 107.8 141.5 -24% 31
Slide 32: Segmental measure of adjusted EBITDA contribution: notes
Segmental measure of adjusted EBITDA contribution: notes • FY20 results include a measure of segmental profit by vertical in line with IFRS 8 • Adjusted EBITDA contribution = Revenue – directly attributable cost of sales – directly attributable operating expenses. Excludes adjusting items. Directly
Slide 33: Segmental measure of adjusted EBITDA contribution
Segmental measure of adjusted EBITDA contribution £million 2020 2019 Home Shared Home Shared Segment Insurance Money Services Other costs Total Insurance Money Services Other costs Total Revenue 172.9 62.8 68.8 40.4 - 344.9 188.4 86.0 68.6 45.4 - 388.4 Directly attributable expenses (74.6) (26.0) (2
Slide 34: Technology investment stable year-on-year
Technology investment stable year-on-year Total tech investment Reinvestment rate £34m £34m +9% +10% £23m £25m 2019 2020 • Continued shift to opex given nature of investment £11m £9m • £1.3m of property capex relating to refurbishment of Ewloe office 2019 2020 • Expect tech capex of around £10m in 2
Slide 35: Our customer channels and revenue by source
Our customer channels and revenue by source Search engine marketing for paid terms £388m £345m Paid Our B2B search Direct email 22% 20% revenues communications e.g. instants or renewal emails B2B CRM Free search Customers coming 78% 80% rankings directly to us, for listed Natural example via the Sea
Slide 36: Moneysupermarket Group
Moneysupermarket Group
Moneysupermarket Group — FY2020 Earnings Presentation on 6ix