PensionBee Group plc

Hello, I'm Romy Savova, the CEO of PensionBee. Welcome to our Q3 2023 results presentation covering trading for the nine months to 30 September 2023. 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 pensions 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 course of this year, we continued to grow our market share. We added approximately 40,000 new invested customers in the first nine months of the year, taking the overall invested customer base to 223,000 invested customers. With 28% year-on-year growth in invested customers and a 95% retention rate, we grew our AUA by approximately 40% year-on-year, reaching £3.9 billion in assets under administration. We generated £22 million of revenue in the last 12 months, representing annual growth of 32%. Over the past quarter, we have advanced our strategic goals. We have spent approximately £9 million on marketing initiatives to maintain our brand awareness and drive new customer growth over the course of the year. We focused on reaching millions of customers through cost-effective brand channels, such as YouTube and TikTok. We are also proud to see our podcast nominated for two Lovie Awards. We have continued to use insights from our data platform to optimize our performance marketing channels. As a result of our endeavors, the cost per invested customer continues to demonstrate a downward trajectory in line with our expectations. Over the last quarter, we also continued 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 enjoy more content in our app, including our award-nominated podcast. They can also use our updated free tools and calculators to increase their confidence in their retirement plans. We further enhanced our online withdrawal journey for customers, enabling them to pay themselves a salary in retirement. Finally, we are pleased to see our partnership with LifeSearch enabling our customers to obtain the life insurance they need to plan for a happy retirement. 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 an 11% improvement in productivity. we continue to prioritize our customers' cyber safety, having recently rolled out mandatory two-factor authentication for accounts. 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 23 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 quarter.

Thank you very much, Romy. Hello and a warm welcome to everyone. I am pleased to cover the financial section of the Q3 trading update. We have made strong progress this year as we balanced our growth ambition with our firm profitability targets. I would like to start by covering our growth performance on the next page, then elaborate on our expected year and profitability target after. The first nine months of the year have demonstrated our continued ability to grow as we reached over 3.9 billion pounds of EOE at the end of September, having added close to 900 million pounds of EOE in the first nine 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 40,000 new invested customers with net flows from new customers representing the majority of asset growth at around 575 million pounds. 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 £118 million of AOA. Net flows from existing and new customers contributed £692 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. To summarize, cost, discipline, new customer acquisition and healthy net flows by existing customers retained on the technology platform have driven strong asset growth in the last nine months. We continue to deliver consistent and robust growth from existing customers through our high retention rates and 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 area retention rates of over 95% of existing customers who are continuing to consolidate further pots and contributing into their home pension pot at PensionBee. Similarly to previous periods, the data showed all customer cohorts delivered positive net inflows over the previous nine months. This serves as a good reminder of our long-duration compounding nature of the AOA base. With an average age of around 40, our customers demonstrate a long-term commitment to saving with PensionBee, growing the assets with us every single year. Next, we converted the compounding asset growth into recurring revenue growth thanks to our realized revenue margin, which increased to 65 basis points compared to 64 basis points in the same period last year. As a result, we converted the year-on-year asset growth of 40% into revenue growth of 32%. 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 target by the end of the year. On this page, we shed more light 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 realized revenue margin, which we covered on the previous 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 our discretionary marketing budget. We were able to achieve more with less this year by spending almost half the marketing budget while achieving stronger gross inflows in the first nine months of the year. Second, the scalability of our technology platform and other operating expenses. 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 6% while revenue grew by 33% year-on-year. Third, money manager costs, which are variable in nature, growing only 11% year-on-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 market of defined contribution pensions. A word on our balance sheet. We have a strong cash position recording £12.5 million in cash as at the end of September. 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 over the next 5 to 10 years. we are preparing to onboard approximately 1 million invested customers with 20 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 this coming quarter, we are poised to continue delivering increasingly profitable growth over the medium to long term. As you can see, PensionBee is a leading online pension provider, solving genuine problems for its customers as they prepare for retirement. We operate in the vast £700bn transferable pension market, serving a broad consumer opportunity. Our household brand name status, the result of years of investment, is enabling us to grow while reducing our cost per invested customer. Our scalable technology platform leaves us well positioned to deliver on our financial ambitions. Our simple long-term business model demonstrates growth and increasing operating leverage as we move into adjusted EBITDA profitability this year. Our committed leadership team is here to serve our customers and our investors.