PensionBee Group plc

Hello, I'm Romy Savova, the CEO of PensionBee. Welcome to our first half 2023 results presentation. For those of you who are new to the PensionBee story, we are a leading online pension provider in the UK. We exist to make pension simple so that everyone can look forward to a happy retirement. We enable our customers to combine their pensions into one new online plan. We enable them to make contributions, to invest in line with their objectives, with money managed by the world's largest asset managers, and ultimately to make withdrawals and enjoy their retirements. Our aspiration is to build a lifetime relationship with our customers, generating predictable and scalable revenue for our company and for our investors. PensionBee operates in the vast £700 billion market of transferable defined contribution pensions, and over the first half of the year, we continued to grow our market share. We added approximately 30,000 new invested customers in the first half, taking the overall invested customer base to 211,000 invested customers. With 33% year-on-year growth in invested customers and a 97% retention rate, we grew our AUA by close to 40% year-on-year, reaching 3.7 billion pounds in assets under administration. Our revenue grew by 32% year-on-year, with 11 million pounds generated in the first half, 20 million pounds in the last 12 months, and an annualized run rate of over 23 million pounds. And over the first half of the year, we have advanced our strategic goals. We have spent approximately £7 million on marketing initiatives, maintaining our household brand name status and recognition, and supporting new customer growth. we expect to continue investing in our brand awareness through the renewal of our partnership with brentford fc becoming the left sleeve sponsor of the men's first team kit in addition to becoming front of shirt sponsors for the b team academy and women's team kit At the same time, our cost per invested customer has continued to decline as we utilize our data-led multi-channel approach to reach customers and explore new channels, including TikTok. We expect to continue reducing our cost per invested customer as we benefit from a decade-long investment in generating the capabilities to acquire customers efficiently. Over the first half of the year, we also continue to develop our product offering for our customers. We are incrementally rolling out new features that encourage our customers to engage with PensionBee. Our data shows that engaged customers are more likely to grow their pensions with us and are therefore more likely to enjoy the type of retirement they deserve. Customers can now read our content in the app and will soon be served personalized content features based on our predictions of their interests. Serving tailored content will help our customers make more of their money, including by educating them on helpful complements to their pension, such as life insurance. On that note, we are pleased that our partnership with LifeSearch has launched and we look forward to helping our customers obtain the appropriate insurance to enable them to save for a happy retirement, even if the worst happens. We have also invested in the scalability of our technology through a focus on internal automation, efficiency, security and pension transfer improvements to support productivity, as demonstrated by a 12% improvement in productivity. We continue to explore and adopt artificial intelligence tooling within our departments, using it for initial content generation, project research and coding problem resolution. We are increasingly integrating our data platform within our daily product management operations, linking core KPIs to projects to ensure our multidisciplinary development teams remain productive and impactful. Finally, we continue to implement cybersecurity tools and best practices to keep our customers' data safe. While automation and efficiency are a core aspect of our value proposition, we are proud to deliver industry-leading customer support, as demonstrated by live chat and phone waiting times of 16 and 22 seconds respectively. Consequently, we continue to enjoy high ratings from our customers, including almost 10,000 Trustpilot reviews supporting our excellent rating. Our customers' positive feedback gives our team great purpose and inspiration. Finally, we continue to remain focused on our investment range, learning about new developments in the area and ensuring we deliver value for money. I would now like to hand over to our CFO, Christoph Martin, who will take you through the financial update for the first half.

Thank you very much, Romy. Hello and a warm welcome to everyone. I'm pleased to cover the financial section of the first half trading update. We had a strong start to the year as we balanced our growth ambition with our firm profitability target. I would like to start by covering our growth performance on the first few pages, then elaborating on the path to our year-end profitability target. The first six months of 2023 started strongly and demonstrated our continued ability to grow as we reached close to 3.7 billion pounds of EOE at the end of June, having added close to 700 million pounds of area in the first six months of 2023. I would now like to highlight the asset growth drivers in more detail. First of all, we have driven growth through new customer acquisition adding approximately 30,000 new invested customers with net flows from new customers representing the majority of asset growth at around £365 million. Second, we have driven asset growth through existing customers who have continued to accumulate pension savings with PensionBee. Growth from existing customers over the period represented £104 million of AOA. Net flows from existing and new customers contributed £469 million of asset growth over the period. Third, as it is customary in the markets, pension assets are invested in capital markets and we benefited from market appreciation in the first half. To summarize, both cost-disciplined new customer acquisition and healthy net flows by existing customers retained on the technology platform have driven strong asset growth in the first six months. We continue to deliver consistently strong growth from new and existing customers. I would like to cover those growth drivers in a bit more detail by first focusing on growth from new customers on this page before covering growth from existing customers on the next. Thanks to our household brand name and ever-improving data-led new customer acquisition capabilities, we were able to deliver an increase in gross inflows compared to last year, while almost halving our marketing spending over the first six months. Over the first six months of the year, we spent circa 7 million pounds in marketing to acquire approximately 30,000 new invested customers at a reduced CPIC year-on-year. We acquired slightly older customers with an average incoming pot size that was higher than the same period last year, which allowed us to deliver 6% higher gross inflows year-on-year. We continue to deliver consistent and robust growth from existing customers through our high retention rates, recurring and compounding asset growth, which subsequently translates into strong revenue growth thanks to our resilient revenue margin. We are pleased to report continuous high customer and AOA retention rates of circa 97% of existing customers who are continuously consolidating further POTS and contributing into their home pension POTS at PensionBee. Similar to previous periods, the data showed all customer cohorts delivered positive net inflows this year, even the early cohorts acquired in 2016 to 2018. This serves as a good reminder of the long-duration compounding nature of our AOA base. With an average age of around 40, our customers demonstrate a long-term commitment to saving with PensionBee, growing their assets with us every single year. Next, we converted the compounding asset growth into recurring revenue thanks to our resilient realized revenue margin, which slightly improved to 65 basis points compared to 63 basis points in the same period last year. As a result, we converted the year-on-year asset growth of 38% into revenue growth of circa 30%. In summary, we continue to deliver consistent recurring revenue growth thanks to the compounding nature of our AOA, high retention rates, continuous net flows, generation across cohorts and stable revenue margin. In addition to driving strong growth, we look forward to reaching our profitability targets in the second half of the year. On this page, we shed more lights on the two building blocks that we expect will allow us to achieve our profitability objective. The first building block is to continue driving recurring revenue thanks to the compounding nature of our AOA and resilient realized revenue margin, which we covered on the previous two pages. The second building block is the operating leverage in our cost base, which can be broadly categorized into three buckets. First of all, the effectiveness of discretionary marketing budget deployment. As already highlighted earlier, we were able to achieve more with less this year by spending almost half the marketing budget while achieving stronger growth inflows in the first half of the year. Second, the scalability of our technology platform. Our technology platform cost is a key contributor to driving operating leverage and achieving year-end profitability. The scalability of the technology platform is underscored by the fact that technology platform expenditures only grew circa 10% while revenue grew by more than 30% year on year. Third, money manager costs which are variable in nature and currently at circa 15% of revenue at the lower end of our expected 15 to 20% range, an outcome which we expect will continue for the rest of the year. Our scalable cost base, therefore, places us in a strong position to achieve our profitability objective while pursuing our growth opportunity in the vast markets of defined contribution pensions. A word on our balance sheets. We have a strong cash position as of June as we recorded 14 million pounds in cash with marginal cash utilization expected for H2 as we very close to achieve our profitability milestone by the end of 2023. I will now hand back to Romy to conclude on our trading update with our guidance, investment highlights and further updates.

Thank you very much, Christoph. We are pleased to reiterate our guidance, confirming that we aim to deliver sustained high revenue growth. While we have demonstrated significant growth to date, we remain of the view that our focus on the mass market of pension savers will enable us to deliver substantial further growth as we pursue a market share of 2% of the £700 billion transferable pensions market. We are preparing to onboard approximately 1 million invested customers with 20,000 to 25,000 pounds in their pensions, creating a revenue opportunity of about 150 million pounds in the long term. At the same time, having invested in our brand and technology over many years, and with our expectation to achieve ongoing adjusted EBITDA profitability in the second half of this year, we are poised to continue delivering increasingly profitable growth over the medium to long term. Thank you for your time today.