Slide 1: FY24 Preliminary Results
FY24 Preliminary Results June 2024 1
Slide 2: FY24 Preliminary Results
FY24 Preliminary Results ● Part one: FY24 highlights Stuart Burnett - CEO ● Part two: financial performance Nick Schoenfeld - CFO ● Part three: outlook & future growth Stuart Burnett - CEO ● Q&A 2
Slide 3: Three key takeaways
FY24 Preliminary Results Three key takeaways Double-digit % growth in Medium term target of 2 million 12-14% customer growth and customers and profits customers £124-128m Adj PBT in FY25 Driven by unique multiservice 10-15% annual net customer growth Recent customer growth run rate proposition, stru
Slide 4: FY24 Performance Highlights
FY24 Performance Highlights Stuart Burnett, CEO 4
Slide 5: FY24 highlights: A record year on all fronts
FY24 highlights A record year on all fronts Customers Mar 24 1,011,489 Strong double-digit organic customer growth, +14% with service numbers increasing by 12% Mar 23 886,579 Gross Profit FY 24 £355m Where the P&L effectively begins (given impact of +16% high energy prices on revenues) FY 23 £306m A
Slide 6: FY24 - 14% growth in a competitive market with falling energy prices
FY24 - 14% growth in a competitive market with falling energy prices Delivering double-digit growth in all market conditions Rational competition from energy suppliers FY24 Customer Growth ○ All major suppliers seeking to acquire new customers again ○ Rational pricing strategies reflect low regulator
Slide 7: Our Unique Business Model
Our Unique Business Model Supported by award winning customer service which leads to high-value loyal customers Unique Unique multiservice 2 structural 1 We help bundle people stop cost advantage wasting time and money Which helps customers Which we reinvest to unlock navigate signing up for the ult
Slide 8: Our Unique Business Model
Our Unique Business Model Supported by award winning customer service which leads to high-value loyal customers Unique Unique multiservice 2 structural 1 We help bundle people stop cost advantage wasting time and money Which helps customers Which we reinvest to unlock navigate signing up for the ult
Slide 9: The UK's only multiservice provider
The UK’s only multiservice provider Energy Broadband Insurance Mobile 9
Slide 10: Our Unique Business Model
Our Unique Business Model Supported by award winning customer service which leads to high-value loyal customers Unique Unique multiservice 2 structural 1 We help bundle people stop cost advantage wasting time and money Which helps customers Which we reinvest to unlock navigate signing up for the ult
Slide 11: Generating an enduring structural cost advantage
Generating an enduring structural cost advantage Long term growth trajectory underpinned by multiservice cost advantage Single service competitors 4 sets of 1 set of overheads overheads vs 4 separate 4 combined revenue streams revenue streams 1 customer 1 customer 11
Slide 12: Our Unique Business Model
Our Unique Business Model Supported by award winning customer service which leads to high-value loyal customers Unique Unique multiservice 2 structural 1 We help bundle people stop cost advantage wasting time and money Which helps customers Which we reinvest to unlock navigate signing up for the ult
Slide 13: Team Purple - our unique route to market
Team Purple - our unique route to market 68,000+ multi-income earners in communities throughout the UK What they do: Refer UW to potential customers they know or meet ● Guide prospects to the UW sign up journey ● Overcome the inherent inertia in switching multiple services simultaneously ● Unlock ou
Slide 14: Our Unique Business Model
Our Unique Business Model Supported by award winning customer service which leads to high-value loyal customers Unique Unique multiservice 2 structural 1 We help bundle people stop cost advantage wasting time and money Which helps customers Which we reinvest to unlock navigate signing up for the ult
Slide 15: Investing for further significant growth
Investing for further significant growth Managing the growth Investing in our Core operation now scaled teams Award-winning CX and Leadership and systems for growth digital service investment to manage growth Across all areas External endorsements: Key hires in past 2 years including Significant incr
Slide 16: Investing for further significant growth
Investing for further significant growth Maximising the Growth Investing in our Enhancing the UW multiservice teams Leveraging our unique Capitalising on heightened proposition UW Cashback card demand for the Partner model Across all areas £100 energy discount for 4 service £500m spent by UW custome
Slide 17: Team Purple - only just getting started
Team Purple - only just getting started Structural ongoing tailwinds to this unique model High interest rates & rising cost of living Team Purple key stats ● Cost of living continues to create challenges for consumers ● 20k mortgage holders coming off fixed rate offers every week Medium -> UW immedia
Slide 18: Financial Performance
Financial Performance Nick Schoenfeld, CFO 18
Slide 19: Profit & loss (£m)
Profit & loss (£m) FY24 FY23 Variance Ongoing strong customer acquisition driving double-digit growth in sustainable profits Revenue 2,039 2,475 (18%) Gross profit 355 306 ● Increases in services supplied, with industry-wide 16% non-energy price increases offsetting energy Gross margin 17.4% 12.4% pri
Slide 20: Balance sheet (£m)
Balance sheet (£m) 31 Mar 24 31 Mar 23 YoY Variance See notes on the cash flow slide Fixed assets 35 34 1 Non-current assets 195 194 1 Net current assets 125 20 105 ● £175m RCF facilities refinanced for (Net debt) (123) (17) (105) 4 years plus 7-year £75m private placement ● Net debt: £123m (0.9x EBIT
Slide 21: Cashflow (£m)
Cashflow (£m) Cash impacted by one-off timing differences FY24 FY23 unwinding during FY24 EBITDA 133 110 ● One-off working capital unwind following high energy prices last year and delayed installation of Working capital movement (119) 25 prepayment meters during temporary moratorium (now resumed) ●
Slide 22: Steady increase in dividend
Steady increase in dividend Reflecting the ongoing cash generative nature of the business £10m Buyback in FY24 22 Stated intention, in the absence of unforeseen circumstances, to pay a dividend in FY24 of no less than 83p
Slide 23: Outlook
Outlook Stuart Burnett, CEO 23
Slide 24: Medium term goal - Scaling from 1m to 2m customers
Medium term goal - Scaling from 1m to 2m customers 97 out of every 100 UK households is with another supplier… 7th largest residential supplier of electricity in the UK 24 UK energy market supplier share by residential electricity supply points (Source: Cornwall Insights, as at 30 April 2024)
Slide 25: Looking ahead - customer growth
Looking ahead - customer growth Proven record of delivering double-digit growth in all market conditions 12-14% growth Number of Customers Double digit growth in a normalised market A normalised with 20+ suppliers energy market Modest growth during price-war period 2015-2021 with irrational competit
Slide 26: Looking ahead - profit outlook
Looking ahead - profit outlook Double-digit customer growth converting into profit growth Medium-term EBITDA / customer evolution EBITDA / customer ● Historically ~£100 ● FY24 £132 - including impact of high energy prices in Q1 ● FY25mid-high £120s, in line with FY23 and FY24 = Adj PBT to grow broadl
Slide 27: Looking ahead - capital allocation
Looking ahead - capital allocation Double-digit profit growth converting into growing distributable cash Dividend track record Capital light business model ● Limited working capital consumption as we grow £10m ● Capital expenditure largely restricted to ongoing technology investment Buyback in FY24 ○
Slide 28: Outlook - A hugely exciting time for the business
Outlook - A hugely exciting time for the business What we expect… FY25 Medium term Long term Strong organic customer growth New opportunities delivering Building market share across core ● Growth rate continuing incremental customer growth from services: at 2m customers our energy ● 12-14% growth FY
Slide 29: Supporting materials
Supporting materials Ye ls Utility Warehouse | TelecomPlus
Slide 30: All your home services in one
All your home services in one >1,000,000 households taking 3.1m services Energy Broadband Mobile Insurance 30
Slide 31: TP investment case - significant cash generative growth ahead
TP investment case - significant cash generative growth ahead As at year end 31/3/2024 Growth FY24 financial highlights ● 14% customer growth in FY24 ● Revenue £2,039m ● ~12% growth in service numbers in FY24 ● EBITDA £133m ● Looming pensions crisis is a long term stimulus for growth ● Adj PBT £117m
Slide 32: The UK's only multiservice provider
The UK’s only multiservice provider Energy Broadband Insurance Mobile 32
Slide 33: Vast organic growth opportunity
Vast organic growth opportunity 3% market share of energy ~1% of broadband and mobile Energy Broadband Market size Market size 29.3m 28.5m households premises Market size Market size 88.7m 8m subscribers homes Mobile Boiler / Home Assistance Cover 33 Souce: Cornwall Analysis (Energy), Enders Analysi
Slide 34: Why customers choose us
Why customers choose us Ye ls Utili yen NES TelecomPlus 34
Slide 35: We make your essential home services simpler, easier and better value
We make your essential home services simpler, easier and better value Savings Simplicity Service The more services you take, Keep track of your household spend Award winning UK-based the more you save with one monthly bill customer service 35
Slide 36: Savings: Long-term, fair pricing
Savings Long-term, fair pricing Annual discount to £1,690 Price Cap Monthly fixed cost for 40MB Broadband 36 Pricing as at 24.05.24. Energy: dual fuel supply at the Ofgem standard domestic consumption profile. Source: Cornwall Insights. Broadband fixed monthly cost of our 40/10 Fibre against comparable
Slide 37: Simplicity: One supplier. One bill.
Simplicity One supplier. One bill. 37
Slide 38: Service: Award-winning customer support
Service Award-winning customer support Low levels of customer complaints Consistent third party endorsements Our Wi-Fi hub has been awarded Which? Best Buy and it comes free with all our broadband packages 38 Complaints received by supplier per each 100k customer accounts Q4 2023. Source: Ofgem.
Slide 39: Unique route to market
Unique route to market Ye ls Utility Warehouse | TelecomPlus 39
Slide 40: Word of mouth referrals
Word of mouth referrals Trusted, personal recommendations of our business Our community of 68,000+ Partners ● Self-employed, part-time brand advocates ● Role is simply to refer UW to potential customers ● Provides informal access to less-engaged consumers ● Grows the network by recruiting other Part
Slide 41: Our word of mouth route to market
Our word of mouth route to market… ...is the key to maximising customer lifetime value High multi-service penetration increases customer lifetime Higher-end customer demographic reduces bad debt exposure UW customer churn - single digit % per annum UW customer demographic above UK average 10% 0% -10
Slide 42: Our fundamental cost advantage
Our fundamental cost advantage 42
Slide 43: Our fundamental cost advantage
Our fundamental cost advantage One set of overheads, multiple revenue streams Single service competitors 4 sets of 1 set of overheads overheads vs 4 separate 4 combined revenue streams revenue streams 1 customer 1 customer 43
Slide 44: Key competitive advantages
Key competitive advantages The UK’s only genuine multi-utility provider Multiservice Word of mouth Long term customer proposition route to market supply agreements Technology enabled, fully integrated Our Partners: low cost, high quality, Sustainable relationships multiservice proposition targeted c
Slide 45: Supply agreements
Supply agreements Complementary route to market attractive to suppliers Benefits to our suppliers ● Our incremental revenues maximise their infrastructure ROI Energy ● No marketing or customer service costs ● Access to a ‘disengaged’ segment that they can’t reach ● Leveraging our lower operating cost
Slide 46: Sustained long-term organic growth
Sustained long-term organic growth Customers Services 46 Figures in thousands, excluding TML.
Slide 47: Investment case
Investment case Ye OF & Utili yen NES TelecomPlus 47
Slide 48: Our core investment case
Our core investment case High-quality earnings, rapid organic growth and progressive shareholder returns UK’s only multiservice supplier Huge growth opportunity ● Unique customer proposition ● Sustainable double-digit customer growth rate ○ Energy, Broadband, Mobile, Insurance ● 3% share of energy m
Slide 49: Benefits of a multiservice proposition
Benefits of a multiservice proposition Multiservice customers on our lowest energy tariffs are most valuable Single service 2 services 3 services 4 services Energy Energy Energy Energy Broadband Broadband Broadband Mobile Mobile Insurance Increasing customer lifetimes and financial contribution 49 Ty
Slide 50: Get in touch
Get in touch Utility Warehouse 508 Edgware Road London, NW9 5AB Telecomplus.co.uk 50
Slide 51: Disclaimer
Disclaimer The information contained in this presentation in respect of Telecom Plus PLC (the “Company”) and communicated during any delivery of the presentation, including the talks given by the presenters, any question and answer session and any document or material distributed at or in connection