Mony Group Plc · LSE:MONY
Mony — Moneysupermarket Group — H1 2020 Earnings Presentation
28 slides from Mony's earnings presentation, Jul 28, 2020
Slide 1: Interim Results
Moneysupermarket roup Interim Results 28 July 2020
Slide 2: Mark Lewis, Chief Executive Officer
Mark Lewis Chief Executive Officer
Slide 3: Business model proving resilient through significant market disruption
Business model proving resilient through significant market disruption Brands and Purpose more relevant than ever • Helped households save £1.1bn • MSE brand relevance has increased through the lockdown Significant revenue impact despite growth in other areas • Customer and Provider dynamics drove r
Slide 4: COVID-19 has affected both sides of our marketplace
COVID-19 has affected both sides of our marketplace Pre lockdown Lockdown period Lockdown easing Customer • Overall strong demand • Shift to news and information • Car and housing markets resuming Impact • Travel and life insurance • Deferred car purchases • Borrowing demand returning spikes • Housi
Slide 5: Rapid response has allowed households to save £1.1bn so far this year
Rapid response has allowed households to save £1.1bn so far this year Lockdown period: Lockdown easing: rapid pivot to actionable information new propositions introduced Teams moved to remote working in advance of lockdown Workforce fully deployed, have not applied for government support Maintained
Slide 6: Scilla Grimble, Chief Financial Officer
Scilla Grimble Chief Financial Officer
Slide 7: Financial highlights
Financial highlights Helped households save £1.1bn Revenue -8% Adjusted EBITDA -14% Reported EPS -19% £183m £63m 7.6p Reinvestment rate - flat Operating cashflow -19% Dividend per share - flat 9% £42m 3.1p 7
Slide 8: Revenue down 8% driven by exceptional market conditions
Revenue down 8% driven by exceptional market conditions £199m £183m - 8% £23m • H1 revenue down 8% but Q2 revenue down 20% £19m - 14% £34m • Insurance, Money and TravelSupermarket heavily £38m impacted by market factors during lockdown + 11% • Strong growth in Home Services and Decision £47m Tech £3
Slide 9: Insurance trends improving
Insurance trends improving YoY revenue growth (%) Q1 • Return to premium inflation in motor insurance 8 Q2: -22% • COVID-19 driving strong performance in life and travel Lockdown • Initial consumer distraction • Travel cancellations and bans -10 • Car dealerships closed • Home moves discouraged -25
Slide 10: Conditions in Money remain challenging
Conditions in Money remain challenging YoY revenue growth (%) Q1 Q2: -44% • Turnaround from Q4 decline to January & February growth • Weaker trading in March as product availability fell -3 Lockdown • Credit: – Tighter lending criteria – Dip in consumer demand – Loan and mortgage repayment holidays
Slide 11: Home Services growing well
Home Services growing well YoY revenue growth (%) Q1 • Revenue flat yoy, but on exceptional prior year growth • Large customer savings available in energy 27 Lockdown • Initially some provider processing challenges • Continued large customer savings, supported by lower wholesale energy prices • Broa
Slide 12: Income statement
Income statement £million HY 2020 HY 2019 Growth Revenue 183.2 199.4 -8% Gross margin 67% 70% Adjusted EBITDA * 62.8 72.9 -14% EBITDA margin 34% 37% Depreciation & software amortisation (8.9) (9.8) Adjusting items ** (1.2) (1.7) Operating profit 52.7 61.4 -14% Net finance costs (1.0) (0.9) Share of
Slide 13: Overall reduction in costs
Overall reduction in costs Adjusted cost base Marketing spend & margin £136m £129m - 5% £10m 61% 58% £9m - 9% £18m £77m £78m 0% £18m -1% £31m £15m £18m + 20% £25m - 20% £15m £15m + 2% £77m £78m 0% £48m £45m - 6% HY 2019 HY 2020 HY 2019 HY 2020 Marketing costs Staff costs VAT & other admin D&A Online
Slide 14: Continued investment into technology, supporting future growth
Continued investment into technology, supporting future growth Total tech investment Reinvestment rate £18m £17m +9% +9% £11m HY 2020 HY 2019 £12m £7m Continued shift to opex given nature of investment £5m • • 2020 technology capex is expected to be c. £10m • £1.3m of property capex relating to refu
Slide 15: Cash conversion remains robust
Cash conversion remains robust Operating cash flow £41.7m (4.0) 0.4 (17.5) 62.8 (10.3) (1.9) 29.5 (46.2) (16.7) Adjusted Working Tax Non-cash Capex and Financing Cash flow Dividends Cash flow after EBITDA capital items investments costs before returns to returns to shareholders shareholders Net cash
Slide 16: Capital allocation framework
Capital allocation framework Organic Ordinary Enhanced Acquisitions Growth Dividends Distribution 16
Slide 17: Recap
Recap Rate of recovery remains hard to predict, given ongoing macro uncertainties • Further recovery dependent on consumer demand and the return of attractive product supply Performance differs markedly by vertical • Insurance recovering, particularly motor and home; life slower to return, and no si
Slide 18: Mark Lewis, Chief Executive Officer
Mark Lewis Chief Executive Officer
Slide 19: Sustained commitment to strategic delivery
Sustained commitment to strategic delivery Helping households save money Reaccelerate Core Growth New Market Growth Leading Trusted Brands 1 2 3 Customer Leading Take Price Mortgage Experience Provider Personalised Comparison Price Optimisation Offer MSM to the user Comparison 19
Slide 20: MSE Energy Autoswitch is live
MSE Energy Autoswitch is live Unique market proposition: • User choice and preference based • Sustainable provider economics and full provider panel and value • Launched to existing MSE Cheap Energy Club user base 20
Slide 21: Continued support for MSM brand and Personalisation agenda
Continued support for MSM brand and Personalisation agenda • Maintaining upweighted media spend with £5m • Added Car Monitor to web proposition increase in 2020 • Customers with monitored bills now over one million • Money Calm Bull launched as lockdown eased • Credit Monitor continuing to drive goo
Slide 22: Accelerating growth in B2B partnerships
Accelerating growth in B2B partnerships • Consistent double-digit growth since acquisition Strong growth • Home communications trading well in H1 • Strong provider appetite and conversion • From market entry to market-leading B2B proposition Addition of • Panel strength combined with rapid product i
Slide 23: Business model proving resilient through significant market disruption
Business model proving resilient through significant market disruption Brands and Purpose more relevant than ever • Helped households save £1.1bn • MSE brand relevance has increased through the lockdown Significant revenue impact despite growth in other areas • Customer and Provider dynamics drove r
Slide 24: Appendix
Moneysupermarket roup Appendix
Slide 25: Bridge from reported operating profit to adjusted EBITDA
Bridge from reported operating profit to adjusted EBITDA £millions HY 2020 HY 2019 Growth Operating profit 52.7 61.4 -14% Amortisation of acquired intangible assets 1.2 1.2 Strategy related costs: Strategy review and associated reorganisation costs - 0.5 Depreciation 2.2 2.2 Amortisation of technolo
Slide 26: Adjusted cost base
Adjusted cost base £Millions HY 2020 HY 2019 Growth Staff costs 25.1 31.3 -20% Depreciation 2.2 2.2 0% Amortisation of technology 6.7 7.6 -12% Irrecoverable VAT 7.1 6.3 12% Other administrative costs 10.7 11.6 -8% Total Adjusted Administrative Costs 51.8 59.0 -12% TV & Radio 15.0 14.7 2% Online spen
Slide 27: Sources of revenue
Sources of revenue Search engine marketing for paid terms £199m £183m Paid Direct email Our B2B revenues search communications 22% 20% e.g. instants or renewal emails B2B CRM Free search Customers coming 78% 80% rankings listed directly to us, for below paid Natural example via the search results Di
Slide 28: Strategic KPIs
Strategic KPIs Helping households save money £1.1bn 74 58% Savings made by customers Net promoter score Marketing margin 12.4m £16.29 Active users Revenue per active user Definitions: Estimated Savings made by customers in H1 2020 Net Promoter Score: Twelve monthly rolling average (1 July 2019 - 30
Moneysupermarket Group — H1 2020 Earnings Presentation on 6ix