Mony Group Plc · LSE:MONY
Mony — Moneysupermarket Group — FY2021 Earnings Presentation
38 slides from Mony's earnings presentation, Feb 17, 2022
Slide 1: Preliminary results
Preliminary results 17 February 2022
Slide 2: Peter Duffy, Chief Executive Officer
Peter Duffy Chief Executive Officer IMAGE TO FOLLOW
Slide 3: Good strategic progress amid challenging markets
Good strategic progress amid challenging markets Strong margin improvement despite market headwinds • Revenue £317m (-8%) with adjusted EBITDA £101m (-7%) • Travel and energy markets suppressed • Gross margin up c.4%pts Executing well against our strategy • Data environment nearing maturity; strong
Slide 4: Scilla Grimble, Chief Financial Officer
Scilla Grimble Chief Financial Officer
Slide 5: Financial summary
Financial summary Helping households save money £317m £101m 9.8p Revenue Adjusted EBITDA Reported EPS -8% -7% -24% 14% £66m 11.71p Reinvestment rate Operating cashflow Dividend per share +2pt -22% unchanged 5
Slide 6: Insurance: Car and home premiums in growth; travel in recovery
Insurance: Car and home premiums in growth; travel in recovery Premium declines in 2021, now reversing Car insurance searches back in growth Car and home insurance premiums (MSM) - YoY% change (1) Car search traffic (market) - YoY% change 20.0% 20% Car Home 10.0% 10% 0.0% 0% -10.0% -10% -20.0% -20%
Slide 7: Energy: lower wholesale price needed for product availability
Energy: lower wholesale price needed for product availability Energy performance weakened to zero in Q4 Cheapest fix still above new record price cap (2) Revenue (£m) £2,600 Cheapest fix (switchable tariff) 13.8 9.3 Cheapest fix (not available on PCWs) £2,100 4.8 Price Cap 0 £1,600 Q1 Q2 Q3 Q4 £1,10
Slide 8: Money: consumer and provider behaviour normalising
Money: consumer and provider behaviour normalising Borrowing conversion recovered well in 2021(1) Borrowing returning after pandemic lows Avg. monthly change in consumer net credit (£bn) (2) 1.6 1.3 1.1 0.2 0.9 -1.4 FY19 FY20 FY21 H2 FY21 2017 2018 2019 2020 2021 Q4-2021 2021 performance Recent trad
Slide 9: Revenue down 8% driven by Home Services
Revenue down 8% driven by Home Services Revenue • Group revenue down 8%; down 11% excluding Quidco £345m £6m £317m • Insurance driven by lower market volumes, £11m competitive dynamics and customer acquisition £4m changes £103m £68m • Strong conversion in Money driving growth £63m £75m • Home Servic
Slide 10: Strong gross margin improvement
Strong gross margin improvement Gross margin 2020: 66.5% Gross margin 2021: 70.4% • Optimisation of PPC bidding strategies • Benefit from H2 loss of low Efficient Channel mix margin B2B contract and • Removal of life insurance weakness in energy acquisition incentive positive for 2021 c.150 bps most
Slide 11: Good organisational savings within expanded cost base
Good organisational savings within expanded cost base Operating Revenue cost base • Distribution costs down – planned decrease in above-the-line marketing £150m £143m £8m • Admin costs up 6% (+2% excluding acquisitions) £2m – Consolidation of CYTI, Icelolly and Quidco £34m £30m – Higher incentive co
Slide 12: Operating cashflow strong
Operating cashflow strong Operating cash flow £65.7m Net debt £59.6m at 31 December 2021 (£22.8m net cash at 31 December 2020) 17 Includes £14.6m deferred consideration on Quidco acquisition (£0.8m at 31 December 2020 for DT acquisition) 15.6 100.5 c.£5m relating to Quidco acquisition 2.2 c.£8m of V
Slide 13: Capital allocation framework remains unchanged
Capital allocation framework remains unchanged Organic Ordinary Enhanced growth dividends Acquisitions distributions 13
Slide 14: Outlook and recent trading
Outlook and recent trading Energy suppressed; normalised trading within Insurance and Money • Energy wholesale prices too high for attractive switching tariffs to return – assume no 2022 Energy revenue • Early read on FCA impact suggests some price inflation; travel insurance (and travel) recovering
Slide 15: Peter Duffy, Chief Executive Officer
IMAGE TO FOLLOW Peter Duffy Chief Executive Officer
Slide 16: 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 17: Helping households save money
Helping households save money Efficient Retain Expanding acquisition and grow our offer ✓ Transition to industry-leading ✓ CRM transition to Braze ✓ CYTI – life, travel & pet PPC platform ✓ MSM energy Super-switch – ✓ Icelolly – travel expansion ✓ Improved SEO positions simplified journey ✓ Quidco t
Slide 18: Data transformation nearing completion
Data transformation nearing completion Advanced data capabilities Outdated data infrastructure hindered progress • Fragmented, incomplete datasets • Workarounds and low-value manual activity Consolidating data in leading Google Cloud Platform • Receiving 5 million user events per day, in real time •
Slide 19: Transition to a tech-led savings platform
Transition to a tech-led savings platform r ~50 B2B Compelling, partners differentiated brands Home Services comparison services Insurance comparison services Money comparison services Brand-agnostic Data infrastructure & analytics MSMG platform Digital marketing – SEM, SEO, CRM Tenancy, advertising
Slide 20: Cross-sell remains a large commercial opportunity
Cross-sell remains a large commercial opportunity 2021 MSM active users by number of channels enquired in Significant cross-sell headroom on MSM 81% • 19% of active users enquiring in two or more channels • Down from pre-pandemic high of 23% MSM product innovation to come • Consolidated question set
Slide 21: Cross-sell remains a large commercial opportunity
Cross-sell remains a large commercial opportunity Significant cross-sell headroom on MSM • 19% of active users enquiring in two or more channels • Down from pre-pandemic high of 23% MSM product innovation to come • Consolidated question sets • Gamification / promotion of next enquiry • Radically sho
Slide 22: [CLASSIFICATION: PUBLIC/PERSONAL]
22 [CLASSIFICATION: PUBLIC/PERSONAL]
Slide 23: MoneySuperSeven delivering well
MoneySuperSeven delivering well Clear and flexible creative platform Strong initial performance • Memorable cast of characters to develop • Key campaign messages landing well • Articulates our purpose • Growth in branded search and 'consideration' • Communicates breadth – perfect for cross-sell • Go
Slide 24: MoneySavingExpert insurance opportunity
MoneySavingExpert insurance opportunity MSE revenue by vertical (2021 H1, %) Outstanding service, helping millions each week Insurance • Most recommended UK brand (YouGov) Highly successful Money and Home Services offer • … accounting for c.90% of MSE revenue Home • Guide-based Insurance proposition
Slide 25: Expanding with purpose
Expanding with purpose UK #2 cashback site • £59m revenue including user cashback; £7.9m Scale entry to adjacent, attractive area 1 EBITDA (year to end July 2021) within customer savings Attractive marketplace model • User savings with over 4,500 merchants 2 Group benefits to Quidco: tech, data, • M
Slide 26: Evolving our organisation
Evolving our organisation Deep Simplified Change expertise structures culture Specialist Exec Delayering & Clearer responsibility, leadership re-design faster pace 26
Slide 27: Summary
Summary Attractive business in attractive markets – valued service for users and providers 1 Strong gross margin progression – based in part on better data and more efficient acquisition 2 Data transformation nearing completion – greater insight, easier cross-sell, lower-cost organisation 3 Platform
Slide 28: Moneysupermarket Group
Moneysupermarket Group
Slide 29: Appendix
Appendix
Slide 30: Strategic KPIs
Strategic KPIs Helping households save money £1.6bn 72 61% (2020: £2.0bn) (2020: 72) (2020: 57%) Savings made by customers Net promoter score Marketing margin 10.0m £16.90 (2020: 11.5m) (2020: £16.19) Active users Revenue per active user Definitions: Estimated Savings made by customers in 2021, incl
Slide 31: Fulfilling our purpose and ESG responsibilities
Fulfilling our purpose and ESG responsibilities Purpose • Purpose to help households save money even more relevant in difficult economic times Helping households save money • £1.6bn household savings delivered in 2021 • 10m active users in 2021 MoneySavingExpert • Consumer finance champion, successf
Slide 32: Adjusted cost base and marketing spend
Adjusted cost base and marketing spend Adjusted cost base Marketing spend and marketing margin £256m 57% 61% £18m £235m £35m £19m £150m £33m £36m £53m £123m £7m £60m £31m £21m £150m £26m £123m £83m £70m D&A 4% Cashback n.m VAT & other admin -4% Other -43% Staff costs 13% TV and radio -15
Slide 33: Product engineering investment
Product engineering investment Total product engineering investment Reinvestment rate £44m £41m £32m £35m +12% +14% £9m £9m FY 2020 FY 2021 FY 2020 FY 2021 Product engineering capital investment Product engineering operating costs Note: We have refreshed this KPI given the strategic improvements we
Slide 34: Income Statement
Income Statement £million 2021 2020 Growth Revenue 316.7 344.9 -8% Gross margin 70.4% 66.5% Adjusted EBITDA * 100.5 107.8 -7% EBITDA margin 32% 31% Depreciation & software amortisation (19.1) (18.4) Adjusting items ** (8.0) (2.4) Operating profit 73.4 87.0 -16% Change in fair value of financial inst
Slide 35: Income Statement
Income Statement £million 2021 2020 Growth Operating profit 73.4 87.0 -16% Deal fees and associated costs 3.6 - Amortisation of acquisition related intangible assets 4.4 2.4 Amortisation of technology related intangible assets 14.6 13.9 Depreciation 4.5 4.5 Adjusted EBITDA 100.5 107.8 -7% 35
Slide 36: Segmental measure of adjusted EBITDA contribution: notes
Segmental measure of adjusted EBITDA contribution: notes • 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 attri
Slide 37: Segmental measure of adjusted EBITDA contribution
Segmental measure of adjusted EBITDA contribution £million FY 2021 FY 2020 Home Shared Home Shared Segment Insurance Money Services Travel Cashback costs Total Insurance Money Services Travel costs Total Revenue 158.7 75.2 68.1 4.1 10.6 - 316.7 172.9 62.8 103.2 6.0 - 344.9 Directly attributable expe
Slide 38: Moneysupermarket Group
Moneysupermarket Group
Moneysupermarket Group — FY2021 Earnings Presentation on 6ix