Mony Group Plc · LSE:MONY
Mony — Moneysupermarket.com Group — FY2019 Earnings Presentation
33 slides from Mony's earnings presentation, Feb 20, 2020
Slide 1: Preliminary Results
Preliminary Results 20 February 2020
Slide 2: Mark Lewis, Chief Executive Officer
Mark Lewis Chief Executive Officer
Slide 3: Reinvent delivery continues
Reinvent delivery continues Return to profit growth delivered • £2bn household savings • 7% EBITDA growth • £100m cash distribution Optimisation gains combatting margin pressures • Conversion gains and disciplined marketing approach • Pressures from mobile mix and SEO volatility Personalisation incr
Slide 4: Scilla Grimble, Chief Financial Officer
Scilla Grimble Chief Financial Officer
Slide 5: Financial highlights
Financial highlights Helped households save £2bn Revenue +9% Adjusted EBITDA +7% Reported EPS +11% £388m £142m 17.7p Reinvestment rate -2ppt Operating cash flow +7% DPS +6% 9% £114m 11.71p Note: Comparatives for these purposes have been restated for IFRS 16 5
Slide 6: Insurance
Insurance Car, home and travel policies 68 m Market • Sizeable, growing market • Car insurance - largest channel but < 50% revenue • ‘Must have’ category; annual call to action Growth drivers • Increasing switching frequency 36% • Penetration beyond car • Breadth of panel 27% Our approach • Personal
Slide 7: Money
Money Credit cards and unsecured loans 44 m Market • >75% revenue from credit products • More promotional market; no “call to action” • PCW penetration relatively low - consumers take products offered by their existing bank Growth drivers • Providing certainty to the user 24% • Promotional products
Slide 8: Home Services
Home Services Number of energy accounts 52 m Market • Energy is over 75% of Home Services revenue • Low engagement channel • Price cap helped create a call to action Growth drivers • Tackling customer inertia • Overcoming switching concerns 21% • Penetration of other Home Services channels Our appro
Slide 9: Strong revenue growth
Strong revenue growth £388m + 9% £356m £45m + 29% • Excluding Decision Tech, revenue grew 5% £35m • Solid performance within car and home insurance £69m + 39% £49m despite headwinds from natural search • Money performance was weak due to the £88m £86m (2%) availability of attractive products in the
Slide 10: Income statement
Income statement 2019 2018 Growth £million (Restated for IFRS16) Revenue 388.4 355.6 +9% Gross margin 69% 71% Adjusted EBITDA * 141.5 131.8 +7% EBITDA margin 36% 37% Depreciation & software amortisation (18.5) (15.5) Adjusting items ** (4.7) (8.2) Operating profit 118.3 108.1 +9% Net finance costs (
Slide 11: Disciplined approach to costs
Disciplined approach to costs Adjusted cost base Marketing spend & margin + 11% 61% £266m £239m £19m + 20% 63% £152m + 15% £15m £36m + 3% £132m £30m + 50% £35m £59m + 5% £20m £57m £26m + 3% £26m £152m + 15% £95m + 10% £132m £87m 2018 2019 2018 2019 Restated for IFRS16 Marketing costs Staff costs VAT
Slide 12: Disciplined approach to costs
Disciplined approach to costs Total tech investment Reinvestment rate £37m £34m +11% +9% 2018 2019 £24m £23m • Other capex of £2m, for the new tech hub in £13m Manchester; expect other capex of c.£1.5m in 2020 £11m • 2020 technology capex is expected to be c. £10m 2018 2019 Technology capital invest
Slide 13: Strong shareholder returns
Strong shareholder returns Operating cash flow £113.7m £141.5m (£5.0m) (£22.1m) (£0.7m) £94.4m (£17.5m) (£1.8m) Special Ordinary (£100m) (£5.6m) Adjusted Working Tax Strategy costs Capital items Other financing Cash flow Dividends Net cash flow EBITDA capital and non-cash costs before returns post r
Slide 14: Capital allocation framework
Capital allocation framework Organic Ordinary Enhanced Acquisitions Growth Dividends Distribution 14
Slide 15: Outlook
Outlook Confident of meeting full year market expectations • YTD trading dynamics have improved versus Q419 • Healthier market conditions within Insurance • Money is expected to return to growth during 2020 • Additional £5m spend on brand marketing • Performance will be second half weighted • Additi
Slide 16: Mark Lewis, Chief Executive Officer
Mark Lewis Chief Executive Officer
Slide 17: Helping households save money
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 17
Slide 18: Reaccelerate Core Growth
Leading Reaccelerate Core Growth Trusted Brands Customer Leading Experience Provider Optimisation Offer Leading Successful Brand relaunch Record year for traffic and tip sign ups Trusted Brands Strong platform for personalised services Editorial authority eg: PPI, Brexit, Thomas Cook Leading Strong
Slide 19: Conversion optimisation gains combatting margin pressures
Conversion optimisation gains combatting margin pressures Desktop conversion Combined conversion Conversion % Conversion % 2017 2018 2019 Mobile conversion 2017 2018 2019 Conversion % Margin headwinds Shift to mobile accelerated in 2019 Increasing paid search following H2 SEO volatility 2017 2018 20
Slide 20: New Market Growth: B2B and Mortgages
New Market Growth: B2B and Mortgages B2B growth adding to overall group New Market Growth • Double digit growth in Decision Tech Home Communications business • 6 energy partnerships launched to date, including Yolt, 1 2 3 Totally Money, Emma, Love Energy Savings and Snoop Take Price Mortgage Persona
Slide 21: New Market Growth: Personalised MoneySuperMarket
New Market Growth: Personalised MoneySuperMarket >600k MSM Customers’ bills now “monitored” Dashboard Homepage Credit Monitor Energy Monitor Car Monitor Automatic score updates Automatic tariff checks Automatic requotes Alerts and recommendations Next best deal alerts MOT and Tax alerts 21
Slide 22: Regular personalised contacts drive frequency and retention
Regular personalised contacts drive frequency and retention Enabled by: Single customer view and data warehouse, multiple category proprietary tech stack 22
Slide 23: Monitor customers return more, save more and have higher value
Monitor customers return more, save more and have higher value Higher frequency Enhanced economics Increased customer value Enquiries per year Paid traffic mix % Total value over 12 months £ Control Credit Monitor Control Credit Monitor Average enquiry per user Servings fees £ Control Credit Monitor
Slide 24: MoneySavingExpert to launch personalised energy autoswitching
MoneySavingExpert to launch personalised energy autoswitching MSE Cheap Energy Club • Full Market comparison, £350-£370 annual saving • 130 tariffs under the price cap Market moving scale in Energy • Secures leading exclusive and collective tariffs • Launched in 2013, over 4 million users already su
Slide 25: Autoswitch is inherently compelling but challenges need overcoming
Autoswitch is inherently compelling . . . . . . but significant challenges need to be overcome User Challenges Provider Challenges Users choose on price and service, No ability to differentiate beyond price brand, green…. Short duration tariffs risk being loss making Users fear losing control withou
Slide 26: MSE Autoswitch launching H1 2020
MSE Autoswitch launching H1 2020 26
Slide 27: MSE Autoswitch developed from deep user and provider insight
MSE Autoswitch developed from deep user and provider insight User choice Sustainable Provider Leveraging value and convenience economics Group Capabilities Preference based autoswitch – Price, Service, Green etc Ability to differentiate – Price, Service, Green etc Existing platform technical
Slide 28: Reinvent delivery continues
Reinvent delivery continues Return to profit growth delivered • £2bn household savings • 7% EBITDA growth • £100m cash distribution Optimisation gains combatting margin pressures • Conversion gains and disciplined marketing approach • Pressures from mobile mix and SEO volatility Personalisation incr
Slide 29: Appendix
Moneysupermarket roup Appendix
Slide 30: Bridge from reported operating profit to adjusted EBITDA
Bridge from reported operating profit to adjusted EBITDA 2019 2018 Growth £million (Restated IFRS16) Operating profit 118.3 108.1 +9% Amortisation of acquired intangible assets 2.4 1.5 Strategy related costs: Strategy review and associated reorganisation costs 2.3 4.2 Deal fees - 1.7 Depreciation 4.
Slide 31: IFRS 16 Income statement reconciliation
IFRS 16 Income statement reconciliation FY 2019 IFRS 16 FY 2019 £million (Pre IFRS 16) adjustment (Post IFRS 16) Adjusted EBITDA 138.8 2.7 141.5 Depreciation & software amortisation (16.0) (2.5) (18.5) Adjusting items (4.7) - (4.7) Operating profit 118.0 0.2 118.3 Net finance costs (0.8) (1.2) (2.0)
Slide 32: Our customer channels and revenue by source
Our customer channels and revenue by source Search engine marketing for paid terms £356m £388m Paid Direct email Our B2B revenues search communications 24% 22% e.g. instants or renewal emails B2B CRM Free search rankings listed Customers coming directly to us, for 76% 78% below paid Natural example
Slide 33: Strategic KPIs
Strategic KPIs Helping households save money £2.0bn 74 61% Savings made by customers Net promoter score Marketing margin 13.1m £16.40 Active users Revenue per active user Definitions: Estimated Savings made by customers in 2019 Net Promoter Score: twelve month rolling average (1 January 2019 - 31 De
Moneysupermarket.com Group — FY2019 Earnings Presentation on 6ix