Mony Group Plc · LSE:MONY
Mony — Moneysupermarket.com Group — FY2017 Earnings Presentation
35 slides from Mony's earnings presentation, Feb 22, 2018
Slide 1: Preliminary Results
Preliminary Results 22nd February 2018
Slide 2: Mark Lewis, Chief Executive Officer
Mark Lewis Chief Executive Officer
Slide 3: Matthew Price, Chief Financial Officer
Matthew Price Chief Financial Officer
Slide 4: Full year themes
Full year themes Diversified business delivering stable returns • Doing a great job for our customers – saving £2bn for customers, up 10% • Mixed 2017 trading performance – weak Energy and strong growth in Insurance • Full year Adjusted Operating Profit £114m Completed Replatforming • A modern and s
Slide 5: We continue to grow
We continue to grow Revenue +4% AOP +6% EPS (Adjusted Basic) +8% £316m £330m £108m £114m 15.7p 16.9p 2016 2017 2016 2017 2016 2017 Technology Investment Total Dividend +6% Operating Cashflow £23m £106m £106m £16m 9.85p 10.44p 2016 2017 2016 2017 2016 2017 5
Slide 6: Income statement
Income statement £Millions 2017 2016 Growth Revenue 329.7 316.4 4% Gross Margin 74% 75% Adjusted EBITDA 127.2 120.8 5% EBITDA margin % 39% 38% Depreciation & Software Amortisation (13.4) (13.0) Adjusted Operating Profit * 113.9 107.8 6% Adjusted Operating Profit margin % 35% 34% Adjusting items * (1
Slide 7: Our diversified performance
Our diversified performance Revenue 2017 (£M) 2016 (£M) Growth (%) Insurance 173.6 155.2 12% Money 81.2 78.9 3% Home Services 39.6 51.0 -22% MoneySuperMarket.com 294.5 285.1 3% MoneySavingExpert.com 41.5 36.8 13% TravelSuperMarket.com 23.3 22.3 4% Intra-Group eliminations and other income (29.6) (27
Slide 8: 2017 Online switching market growth
2017 Online switching market growth Insurance 8% Money 7% +9% GROWTH Home Services 24% Source: Based on internal data and external sources 8
Slide 9: Good progress against the strategic KPIs
Good progress against the strategic KPIs Best Site Earn Customer Loyalty Preferred Partner 24M (+3%) 25M (+12%) 989 (+1%) Unique monthly People choosing Number of visitors to share data providers £16m (-£7M) 47% (+4%) 65% (+1%) Investment in Net Promoter Marketing Technology Score margin £2.0B (+10%
Slide 10: Disciplined approach to marketing
Disciplined approach to marketing Marketing spend Revenue by source £Millions 2017 2016 YoY £316m £330m TV & Radio 25.1 28.7 (3.6) 22% 24% Online spend 74.7 63.0 11.7 78% 76% Cashback 10.5 16.6 (6.1) £246m £250m Other 4.2 5.7 (1.5) Total Group 114.5 114.0 0.5 Marketing margin 65% 64% 1% 2016 2017 Se
Slide 11: Our Replatforming is now complete
Our Replatforming is now complete Total Tech Investment Reinvestment Rate (%) £46m £39m +15% +12% £23m FY2016 FY2017 £23m £23m £16m • Operating costs are mainly staff costs and licenses • Write-off £9M relating to product trials not rolled-out (£3m) 2016 2017 and early code base subsequently re-work
Slide 12: Strong levels of cash generation
Strong levels of cash generation £13.4m (£2.6m) (£20.9m) £113.9m (£18.9m) (£40.0m) (£54.4m) £44.6m £35.1m Net cash at Adj. OP Depreciation Working Cash paid for Tax Shares bought Dividends Net cash at 1 Jan 2017 & capital/other capital items 31 December amortisation 2017 12
Slide 13: Outlook
Outlook 2018 - Expect Adjusted EBITDA to be broadly flat • Forecast market growth around 6-7% • Expect slower revenue growth for 2018, accelerating afterwards • Investing in product engineering teams for our new strategy + £5M opex • Reducing total capex by £5M • Non-underlying costs in adjusting it
Slide 14: Strong cash generation throughout
Strong cash generation throughout Organic Ordinary Acquisitions Special Growth Dividends Distribution 14
Slide 15: Mark Lewis, Chief Executive Officer
Mark Lewis Chief Executive Officer
Slide 16: Reinvent Growth Strategy: Reaccelerate Core and New Market Growth
Reinvent Growth Strategy: Reaccelerate Core and New Market Growth 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 Help households save money 16
Slide 17: Strong, differentiated core business model
Strong, differentiated core business model • 6-7% Core switching annual growth forecast 2018-20 Growing • Diversified with >£5m revenue in 14 categories Markets • Opportunity to unlock further market growth • Market leading 69 NPS vs comparison average 64. MSM 67, MSE 89 Engaged • 13.2m Active users
Slide 18: Replatforming has delivered critical assets, but restricted customer experience innovation
Replatforming has delivered critical assets, but restricted customer experience innovation 2014 2015 2016 2017 2018 2019 REPLATFORMING FOCUS CUSTOMER EXPERIENCE FOCUS Customer Experience Optimisation New Proposition Development Adobe Content Management System Bespoke Aggregation engine API Service l
Slide 19: Customer Experience Optimisation will reaccelerate core growth
Customer Experience Optimisation will reaccelerate core growth Reaccelerate Core Growth Rapid innovation of the mobile customer journey Leading • Easier, faster, simpler experience Trusted • Conversion gains and marketing efficiency Brands Will scale across core categories through 2018 • H2 2017 tri
Slide 20: Reinvent strategy can unlock new market growth
Reinvent strategy can unlock new market growth We will make price comparison New Market Growth Personalised, Proactive and Painless 1 2 3 Take Price Mortgage Three initial areas of focus Personalised MSM Comparison Price to the user Comparison 20
Slide 21: 1. Personalised MoneySuperMarket
1. Personalised MoneySuperMarket What How Why us A hassle free service Automatically populate Single view of 13m for users to save on users’ policies in MSM active users across key bills in one place mobile app multiple categories • Key policies stored and • Add policy monitoring and • Enabled by En
Slide 22: 2. Take Price Comparison to the user
2. Take Price Comparison to the user What How Why us Make it easier to save Seek B2B Leverages core by taking personalised Partnerships with strengths, enabled deals to users new platforms by new platform • Present personalised • New B2B sales channel • Trusted Brands, leading offers in the apps the
Slide 23: 3. Mortgage Price Comparison
3. Mortgage Price Comparison What How Why us Add mortgage Help users select and Currently market switching to price apply for mortgages leader in Mortgages comparison online search traffic • Help users find the right • New user experience to • 16m visitors across deal for them online find most appro
Slide 24: Reinvent Growth Strategy: Reaccelerate Core and New Market Growth
Reinvent Growth Strategy: Reaccelerate Core and New Market Growth 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 2018 Scale Customer Experienc
Slide 25: Appendix
Moneysupermarket roup Appendix
Slide 26: Cash and capital update
Cash and capital update • Software amortisation costs were £12.2 million in 2017 and we expect the full-year amortisation charge to be in the region of c.£14 million for 2018 • We expect technology capital investment of c.£12 million in 2018 • Intangible assets related to the pre-IPO reorganisation
Slide 27: Dividends, EPS and dividend cover
Dividends, EPS and dividend cover Dividend (pence) 2017 2016 Interim 2.84 2.75 Final 7.60 7.10 Total Ordinary Dividend Declared +10.44 +6% 9.85 +8% Dividend (pence) 2017 2016 Earnings per share (Adjusted basic) 16.9 15.7 Dividend Cover 1.6 x 1.6 x Dates for final dividend – 5 April 2018 - ex-div dat
Slide 28: Adjusted operating profit
Adjusted operating profit £Millions 2017 2016 Variance Variance (%) Revenue 329.7 316.4 13.3 +4% Gross Profit 244.5 236.8 7.7 +3% Gross Margin 74% 75% Administrative Costs (111.0) (109.2) (1.8) +2% Distribution Costs (29.3) (34.3) 5.0 -15% Impairment of intangible assets (9.3) (2.2) (7.1) Operating
Slide 29: Adjusted cost base
Adjusted cost base £Millions 2017 2016 Growth Staff costs 54.1 50.6 3.5 Depreciation 1.2 1.9 (0.7) Amortisation of technology 12.2 11.1 1.1 Irrecoverable VAT 12.2 9.8 2.4 Other administrative costs 21.7 21.5 0.2 Total Adjusted Administrative Costs 101.3 94.9 6.4 Advertising 25.1 28.7 (3.6) Other mar
Slide 30: Tax and Earnings Per Share Calculations
Tax and Earnings Per Share Calculations £Millions 2017 2016 Profit before tax 96.1 91.3 Standard rate of tax 19.25% (2016: 20%) 18.5 18.3 Effects of: Expenses not deductible for tax purposes 0.2 0.1 Movement related to share based payments - 0.1 Adjustment in relation to prior periods (0.7) (0.7) Ta
Slide 31: Statutory balance sheet
Statutory balance sheet £Millions 31 Dec 2017 31 Dec 2016 Property, Plant And Equipment 9.4 7.5 Intangible Assets – Technology 32.1 37.8 Intangible Assets - Acquisition Related 112.5 119.8 Investments 0.4 0.5 Trade and Other Receivables 42.9 39.3 Cash and Cash Equivalents 35.1 44.6 Total Assets 232.
Slide 32: Revised revenue disclosure and profit measure
Revised revenue disclosure and profit measure Revenues 2017 (£M) 2016 (£M) Growth (£M) Insurance 176.5 157.8 12% Money 85.4 81.0 5% Home Services 43.0 53.8 (20%) Core Group revenue 304.9 292.6 4% Other revenue 24.8 23.8 4% Total Group 329.7 316.4 4% £Millions 2017 2016 Variance Adjusted Operating Pr
Slide 33: Trading priorities
Trading priorities • Refocusing on core energy trading: – Grown our core MSM energy business in the second half • Maintaining growth in Insurance: – Delivered 12% YOY growth • Trading the Money category within the low interest rate environment: – Q4 growth driven by promotional product • Continuatio
Slide 34: 2017 Revised strategic KPIs
2017 Revised strategic KPIs Help households save money £2.0B 69% 65% Savings made by customers Net promoter score Marketing margin 13.2M £14.81 Active users Revenue per active user Definitions: Net Promotor Score: Twelve monthly rolling average (1 Jan 2017- 31 Dec 2017 inclusive) measured by YouGov
Slide 35: Unique monthly users
35 3,000,000 9,000,000 6,000,000 0 12,000,000 15,000,000 18,000,000 Jan-15 21,000,000 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Unique monthly users Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 MSM Jun-16 Jul-16 MSE Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr
Moneysupermarket.com Group — FY2017 Earnings Presentation on 6ix