Selectquote, Inc. · NYSE:SLQT
Selectquote — Investor Presentation (February 2021)
26 slides from Selectquote's investor presentation, Feb 23, 2021
Slide 1: SelectQuote Investor Presentation February 2021
SelectQuote Investor Presentation February 2021 Exhibit 99.1
Slide 2: Disclaimer: Forward-Looking Statements
2 Disclaimer Forward-Looking Statements This presentation contains forward-looking statements. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use
Slide 3: SelectQuote at a Glance
3 Notes: 1. LTM represents Last Twelve Months financial results.as of 12/31/2020 2. Represents year-over-year increase in policy sales per agent for 2QFY21 vs. 2QFY20. 3. Adjusted EBITDA and Adjusted EBITDA Margin are Non-GAAP financial measures used to measure operating performance. We define Adjus
Slide 4: Key Investment Highlights
4 Key Investment Highlights Large and Growing End Markets Shifting to Meet Evolving Consumer Preferences Purpose-Built Technology Empowering Our Highly Skilled Internal Agent Network Unique Company Culture Developed by Experienced Management Team Simple and Attractive Business Model Driving Profitab
Slide 5: High Degree of Visibility to Accelerating Growth of Senior Population
High Degree of Visibility to Accelerating Growth of Senior Population MA / MS Enrollment Other Medicare Enrollment MA / MS Enrollment as % of Total Medicare Enrollment Demographics MA / MS Enrollment and Penetration Are Growing ($MM) 45.5 52.5 59.9 68.4 76.7 20.0 26.1 35.7 44.7 53.4 25.5 26.4 24.2 2
Slide 6: Market Demands Have Evolved Dramatically
Market Demands Have Evolved Dramatically Consumers Desire Expertise, Simplicity, Specialized Service for Complex Purchasing Decisions Industry Norm What the Market Wants Face-to-face and time-intensive Limited coverage options and agent expertise Limited transparency Few alternatives “One size fits
Slide 7: Agents enhance lead conversion and maximize revenue opportunity
Agents enhance lead conversion and maximize revenue opportunity Highly trained, 100% internal agents Our Agents Technology optimizes our lead acquisition, intelligently matches leads to agents and maximizes our return on marketing spend Post-sale client engagement Our Technology Our Purpose-Built Te
Slide 8: Differentiated Agent Model
Differentiated Agent Model Retention of Talent • Six figure top level agent comp • 90%+ level 1 retention rate • Tenured agents 50% more productive Financial Results • Agent productivity improvements • Industry leading LTV’s • Rapid growth at attractive margins 8
Slide 9: Our Approach is Rooted in Sophisticated Technology
9 Our Approach is Rooted in Sophisticated Technology Robust, fully-integrated technology platform drives customer lifetime value / ROI Lead Acquisition Lead Management & Routing Sales Customer Engagement & Lifecycle Management SelectCare Core proprietary CRM and parent system, with sales enablement
Slide 10: Purpose-Built Technology Powers Our Wide Funnel Marketing
10 Purpose-Built Technology Powers Our Wide Funnel Marketing
Slide 11: SelectQuote Senior – Overview
11 149 224 497 83 155 368 26 39 82 MA MS DVH PDP Other LTM 2Q FY19 LTM 2Q FY20 LTM 2Q FY21 Medicare Advantage 74% Medicare Supplement 5% Dental, Vision and Hearing 17% Prescription Drug Plan 2% Other 2% SelectQuote Senior – Overview Provides the 65+ Senior market with leading online comparison shopp
Slide 12: SelectQuote Life – Overview
12 Total Life Premium ($MM) Core Premiums 55% Ancillary Premiums 2% Final Expense Premiums 43% SelectQuote Life – Overview • Leading distributor of term life insurance founded in 1985 • SelectQuote was the first term life insurance exchange platform in the U.S. Over 1.75MM plans sold nationwide sinc
Slide 13: SelectQuote Life – Final Expense Product
13 Life Health Advisors (LHAs) sell Medicare plans during AEP and OEP and then flex over to sell Final Expense the rest of the year SelectQuote Final Expense Premium FY Growth ($MM) SelectQuote Life – Overview – Final Expense Product Basic death benefit to cover funeral expenses via simplified or ev
Slide 14: SelectQuote Auto & Home – Overview
14 52 63 68 LTM 2Q FY19 LTM 2Q FY20 LTM 2Q FY21 SelectQuote Auto & Home – Overview Licensed agents providing expert advice to 35,000+ customers annually(2) Provides unbiased online comparison shopping platform for auto, home and specialty insurance lines “Must have” nature of personal lines P&C crea
Slide 15: Strategic Focus and Competitive Differentiators
Strategic Focus and Competitive Differentiators • Our strategy is to maximize absolute profitability at attractive returns on invested capital • Predictable cash flows are driven by high quality of policies written • Our choice model paired with highly trained, in- house agents and dedicated custome
Slide 16: We Have a High-Growth, Scalable Business Model
291 403 772 153 252 584 105 114 153 32 38 39 Senior Life Auto & Home Corp LTM 2Q FY19 LTM 2Q FY20 LTM 2Q FY21 Adj. EBITDA(1)(2)(3) ($MM) 81 121 226 65 109 223 27 25 33 9 9 10 (18) (22) (40) Senior Life Auto & Home Corporate LTM 2Q FY19 LTM 2Q FY20 LTM 2Q FY21 We Have a High-Growth, Scalable Business
Slide 17: What Is Policyholder Lifetime Value?
17 What Is Policyholder Lifetime Value? Under ASC 606, SelectQuote Recognizes the Upfront Commission and the Estimated Value of Renewal Commissions as Revenue in the Period in Which the Policy Is Approved Policyholder Lifetime Value from a MA / MS Policy Components of Policyholder Lifetime Revenue I
Slide 18: How We Maximize Policyholder Lifetime Value
How We Maximize Policyholder Lifetime Value SelectQuote Seeks to Optimize all Components of Policyholder Lifetime Value Acquisition Costs Lead Close Rates Commissions Customer Retention Economies of scale Optimized marketing spend Multi-channel lead scoring Agent leveling system Higher quality leads
Slide 19: Industry Leading Unit Economics
$1,502 $924 $577 SelectQuote Peer A Peer B Revenue per approved MA/MS policy(1) Cost per approved MA/MS policy(2) Adj. EBITDA per approved MA/MS policy(3)(7) Industry Leading Unit Economics Notes: Source: Analysis based on publicly filed documents, Financials based on Medicare / Senior Operating Seg
Slide 20: Predictable Cash Flow & Attractive Returns
Upfront Cost First Year Cash Received Renewal Cash Received to Date Cash to be received from polices that have already renewed Future Expected Cash from Renewals 2015 Cost 2015 Revenue 2016 Cost 2016 Revenue 2017 Cost 2017 Revenue 2018 Cost 2018 Revenue 2019 Cost 2019 Revenue 2020 Cost 2020 Revenue
Slide 21: Growing Faster While Using Less Cash
Growing Faster While Using Less Cash *See reconciliations from non-GAAP measure, Adjusted EBITDA, to net income on slides 23-26. ◦ IPO provided growth capital for the next several years ◦ Post IPO results have exceeded forecasts for revenue and EBITDA ◦ Accelerated growth would typically drive great
Slide 22: Our Attractive and Scalable Platform Is Growing
22 Our Attractive and Scalable Platform Is Growing… Our Platform Provides Ample Support for Future Years of Growth with Minimal Ongoing Working Capital Requirements Maximize policyholder lifetime value Increase size and enhance productivity of agent force Deepen consumer penetration and drive cross-
Slide 23: Supplemental information
Supplemental information 23
Slide 24: LTM 2Q FY21 Adjusted EBITDA to Net Income Reconciliation
24 LTM 2Q FY21 Adjusted EBITDA to Net Income Reconciliation LTM 2Q FY 2021 (in thousands) Senior Life Auto & Home Corp & Elims Consolidated Revenue $ 583,925 $ 152,577 $ 39,348 $ (3,356) $ 772,494 Operating expenses (360,899) (119,934) (28,891) (36,957) (546,681) Other expenses, net — — — (56) (56)
Slide 25: LTM 2Q FY20 Adjusted EBITDA to Net Income Reconciliation
25 LTM 2Q FY20 Adjusted EBITDA to Net Income Reconciliation LTM 2Q FY 2020 (in thousands) Senior Life Auto & Home Corp & Elims Consolidated Revenue $ 251,602 $ 113,840 $ 38,010 $ (378) $ 403,074 Operating expenses (142,351) (88,765) (29,366) (21,518) (282,000) Other expenses, net — — — (23) (23) Adj
Slide 26: LTM 2Q FY19 Adjusted EBITDA to Net Income Reconciliation
26 LTM 2Q FY19 Adjusted EBITDA to Net Income Reconciliation LTM 2Q FY 2019 (in thousands) Senior Life Auto & Home Corp & Elims Consolidated Revenue $ 153,435 $ 105,203 $ 32,307 $ (281) $ 290,664 Operating expenses (88,880) (78,694) (23,753) (17,869) (209,196) Other expenses, net — — — (9) (9) Adjust