Slide 1: FY23 Preliminary Results
FY23 Preliminary Results June 2023 1
Slide 2: FY23 Preliminary Results agenda
FY23 Preliminary Results ● Part one: KPIs & record growth drivers Stuart Burnett - Co-CEO ● Part two: financial performance Nick Schoenfeld - CFO ● Part three: outlook & future growth Andrew Lindsay - Co-CEO ● Q&A 2
Slide 3: Three key takeaways
FY23 Preliminary Results Three key takeaways Proven structural multiservice Double-digit % customer growth Capital light business model cost advantage with commensurate PBT increase remains highly cash generative Underpins our ability to On track to achieve our medium Updated capital allocation profi
Slide 4: KPIs & Growth Highlights
KPIs & Growth Highlights Stuart Burnett, Co-CEO 4
Slide 5: FY23 highlights
FY23 highlights A record year on all fronts Customers Mar 23 886,579 Strong double-digit organic customer growth, with +22% service numbers increasing by 24% Mar 22 728,680 Gross Profit FY 23 £306m Where the P&L effectively begins given +63% impact of high energy prices on revenues FY 22 £188m Adj P
Slide 6: FY23 - a favourable environment for growth
FY23 - a favourable environment for growth Some temporary dynamics at play Exceptionally high retail energy prices FY23 Customer Growth ○ Relentless media coverage of energy crisis ○ Heightened demand for saving and earning ○ Facilitated Partner conversations & direct interest ○ Increased contributi
Slide 7: FY23 - a launchpad for further double-digit growth
FY23 - a launchpad for further double-digit growth Medium term growth trajectory underpinned by sustainable reset of energy market ● Ofgem has taken regulatory action to ensure long term market stability ○ Financial resilience / stress tests ○ Quarterly Price Cap ○ Market Stabilisation Charge (MSC)
Slide 8: Long term growth underpinned by multiservice cost advantage
FY23 - a launchpad for further double-digit growth 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 8
Slide 9: Market-leading savings across all services
Cashback Card £8m of savings on Market-leading savings across all services household shopping Structural cost advantage enabling UW to for UK households share efficiencies with customers Energy Broadband Mobile Insurance Lowest prices Best value Cheapest Market-leading in the market - for 3 service
Slide 10: Investing for further significant growth: managing the growth
Investing for further significant growth Managing the growth Investing in our teams Significant CS adviser CS Centres of Excellence Investment in building a Systems development & recruitment & hub strategy high quality team innovation Across all areas of the business, but with focus Two UK hubs open
Slide 11: Investing for further significant growth: maximising the growth
Investing for further significant growth Maximising the growth Investing in our Scaling Insurance as teams Leveraging unique Enhancing the UW Building referral capability 4th core service Cashback card proposition to extend reach >100,000 policies, an Across all areas £0.5bn of spend & £8m CityFibre
Slide 12: Financial Performance
Financial Performance Nick Schoenfeld, CFO 12
Slide 13: Profit & loss (£m)
Profit & loss (£m) FY23 FY22 Variance Revenue 2,475 967 156% Gross Profit 306 188 63% Gross margin 12.4% 19.5% Distribution expenses (50) (30) 67% % of revenue 2.0% 3.1% Administrative expenses (129) (84) 53% % of revenue 5.2% 8.7% Bad Debt (29) (12) 148% % of revenue 1.2% 1.2% Net interest & other i
Slide 14: Balance sheet (£m)
Balance sheet (£m) 31 Mar 23 31 Mar 22 YoY Variance Fixed Assets 34.1 34.5 (0.5) Non-current assets 193.8 189.0 4.8 Net current assets 20.2 52.4 (32.2) (Net debt) (17.4) (70.3) 53.0 Total 230.7 205.6 25.1 Share capital 4.0 4.0 - Share premium 150.7 147.1 3.5 Other reserves (6.5) (7.5) 0.9 Retained e
Slide 15: Cashflow (£m)
Cashflow (£m) FY23 FY22 EBITDA 110.1 73.7 Working capital movement 25.4 (10.4) Taxation (20.6) (11.5) Capex (11.0) (9.9) Interest & fees (4.1) (3.3) Dividends (50.6) (44.8) Other1) 3.8 7.3 (Increase) / decrease in net debt 53.0 1.1 1) Includes in FY22 the removal of the lease liabilities for the van
Slide 16: Significant increase in dividend
Significant increase in dividend Reflecting the ongoing cash generative nature of the business 16 Stated intention, in the absence of unforeseen circumstances, to pay a dividend in FY23 of no less than 65p
Slide 17: Outlook
Outlook Andrew Lindsay, Co-CEO 17
Slide 18: Our organic growth opportunity has barely been tapped
Our organic growth opportunity has barely been tapped… 97 out of every 100 UK households is with another supplier UK energy retail market supplier share 18 UK energy market supplier share by residential electricity supply points (Source: Cornwall Insights, as at 31 April 2023)
Slide 19: We've been growing our market share for 25+ years
We’ve been growing our market share for 25+ years 18 months into the next phase of double-digit organic customer acquisition Annual customer growth 19 UW customer numbers as at year end (31 March). Purple bars actual, pink bars showing consistent double digit annual growth since 30 energy suppliers
Slide 20: Looking ahead - customer outlook
Looking ahead - customer outlook Ongoing double-digit % customer growth Medium term target ● Evolving external dynamics + ongoing inflation / rising cost of living Short - + continued high demand for savings + rising demand for additional income as a UW Partner medium term - lower switching as energy
Slide 21: Looking ahead - profit outlook
Looking ahead - profit outlook Double-digit customer growth converting into profit growth Longer term EBITDA / customer evolution EBITDA / customer ● Historically <£100 ● FY23 £124 ● FY24 mid - high £120s = Adj PBT to grow broadly in line with customer growth ● Longer term ○ Potential to further incr
Slide 22: 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 ● Capital expenditure largely restricted to ongoing technology investment ○ High levels of cash
Slide 23: A hugely exciting time for the business
A hugely exciting time for the business Three key takeaways Proven structural multiservice Double-digit % customer growth Capital light business model cost advantage with commensurate PBT increase remains highly cash generative Underpins our ability to On track to achieve our medium Updated capital
Slide 24: Supporting materials
Supporting materials Ye ls Utility Warehouse | TelecomPlus
Slide 25: All your home services in one
All your home services in one >900,000 households taking 2.8m services Energy Broadband Mobile Insurance 25
Slide 26: UW at a glance - significant cash generative growth ahead
UW at a glance - significant cash generative growth ahead As at year end 31/3/2023 Growth FY23 financial highlights ● 22% customer growth in FY23 ● Revenue £2,475m ● 24% growth in service numbers in FY23 ● EBITDA £110m ● Rising cost of living is a near term stimulus for growth ● Adj PBT £96m ● Divide
Slide 27: The UK's only multi-service provider
The UK’s only multi-service provider Energy Telecoms Insurance 27
Slide 28: Vast organic growth opportunity
Vast organic growth opportunity 3% market share Energy Broadband Market size Market size 29m 26.4m households premises Market size Market size 84.2m 8m subscribers homes Mobile Boiler / Home Assistance Cover 28 Souce: Cornwall Analysis (Energy), Enders Analysis (Broadband) (V is Vodafone), Enders An
Slide 29: Why customers choose us
Why customers choose us Ye ls Utili yen NES TelecomPlus 29
Slide 30: Savings, Simplicity, Service
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 30
Slide 31: Savings
Savings Long-term, fair pricing Annual discount to £2,500 Price Cap Monthly fixed cost for 40MB Broadband £0 £0 £0 £0 £0 £0 £0 31 Pricing as at w/c 19.06.23. Energy: dual fuel supply at the Ofgem standard domestic consumption profile. Source: Cornwall Insights. Broadband fixed monthly cost of our 40/10
Slide 32: Simplicity
Simplicity One supplier. One bill. 32
Slide 33: Service: award-winning customer support
Service Award-winning customer support Low referrals to Energy Ombudsman Consistent third party endorsements Uswitch Best Customer Service, Most Likely to Recommend and Best Rewards 33 Energy Services Average Ombudsman referrals (per 100k supply points) by supplier for the first two quarters of 2022.
Slide 34: Unique route to market
Unique route to market Ye ls Utility Warehouse | TelecomPlus 34
Slide 35: Word of mouth referrals
Word of mouth referrals Trusted, personal recommendations of our business Our community of 60,000+ Partners ● Self-employed, part-time brand advocates ● Role is simply to refer UW to potential customers ● Provides informal access to less-engaged consumers Targeted acquisition of most desirable custo
Slide 36: 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 UW custome
Slide 37: Our fundamental cost advantage
Our fundamental cost advantage 37
Slide 38: One set of overheads, multiple revenue streams
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 38
Slide 39: 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 40: 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 41: Sustained long-term organic growth
Sustained long-term organic growth Customers Services 41 Figures in thousands, excluding TML.
Slide 42: Investment case
Investment case Ye OF & Utili yen NES TelecomPlus 42
Slide 43: Our core investment case
Our core investment case High-quality earnings, rapid organic growth and increasing dividends UK’s only multi-service supplier Huge growth opportunity ● Unique customer proposition ● Sustainable double-digit customer growth rate ○ Energy, Broadband, Mobile, Insurance ● 3% share of 4 significant marke
Slide 44: Benefits of a multi-service proposition
Benefits of a multi-service proposition Multi-service 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 44
Slide 45: Get in touch
Get in touch Utility Warehouse 508 Edgware Road London, NW9 5AB Telecomplus.co.uk 45
Slide 46: 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