PensionBee Group plc

Good afternoon, ladies and gentlemen. Welcome to the PensionBee Group PLC Q2 24 results investor presentation. Throughout this recorded presentation, investors will be in listen early mode. Questions are encouraged. They can be submitted at any time using the Q&A tab just situated on the right hand corner of your screen. Please simply type in your questions at any time and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today, and we'll publish those responses where it's appropriate to do so. Before we begin, we'd like to submit the following poll, and if you give that your kind attention, I'm sure the company would be most grateful. And I'd now like to hand over to the management team. Romy, Christophe, good afternoon.

Good afternoon and welcome to PensionBee's Q2 2024 results presentation covering trading for the period ending 30 June 2024. I'm Romy Sobova, the CEO of PensionBee Group. And for those of you who are new to the PensionBee story, we are creating a global leader in the consumer retirement market. We exist to help our customers prepare for and enjoy a happy retirement. We enable our customers to combine their old retirement accounts into a 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 withdraw and spend their retirement savings. Our aspiration is to build a lifetime relationship with our customers, generating predictable and scalable revenue for our company and for our investors. Over the second quarter of 2024, we continued to record strong growth in assets under administration, revenue, and invested customers. We also announced the launch of our U.S. business in partnership with State Street, a longstanding asset management partner of ours in the United Kingdom. As a result of our revenue growth, effective cost control, and increasing productivity, we achieved positive adjusted EBITDA for PensionBee Group, in Q2 2024 and reaffirm our expectation of achieving adjusted EBITDA profitability in the UK for the full year of 2024. Turning to the United Kingdom, we were pleased to deliver significant growth with assets under administration of £5.2 billion and representing 40% year on year growth, annual run rate revenue of 32 million pounds, representing 39% year on year growth, and 252,000 invested customers, representing 19% year on year growth. To continue capturing the market opportunity, we believe it is important to own our customer relationships so that we can fully understand the evolving needs of the consumer base and ultimately serve them more effectively. To that end, we have invested £61 million in the PensionBee brand cumulatively, and our prompted brand awareness now stands at 55%. Our data-led advertising approach combined with our household brand name has continued to deliver marketing efficiency. And for each pound of marketing expenditure, we generated 82 pounds of net flows in the first half of 2024, an increase of 20% year on year. At the same time, we continue to reduce our cost per invested customer, to 242 pounds. Throughout the quarter, we were proud to serve our customers, particularly during the busy tax year end, supporting them rapidly and effectively on the phone, over email, and over live chat. This quarter, we were also excited to release our fund performance tracker, providing our customers with more investment transparency. And of course, we continued to invest in our productivity through automations and process simplifications, resulting in a 23% increase in invested customers per FTE over the past year. And so in sum, our UK business continues to deliver on our strategic objectives at pace. Turning now to our U.S. business, we were delighted to announce our strategic agreement with our partners at State Street. As part of the strategic agreement, PensionBee will deploy its award-winning online retirement proposition and technology, enabling U.S. consumers to easily consolidate and roll over their 401k plans and individual retirement accounts into one new PensionBee individual retirement account. PensionBee Inc. is registered with the SEC as an investment advisor, enabling the company to operate federally and statewide without additional registrations. PensionBee Inc. offers a range of investment portfolio options with underlying State Street model portfolios. Each investment portfolio is constructed exclusively with exchange-traded funds managed by State Street. The PensionBee IRA will be offered under an all-inclusive WRAP fee program, including the PensionBee Advisory Service, asset allocation, and management fees and custody fees. The overall cost will be 0.85% of assets under management, of which PensionBee will retain approximately 0.55% after asset allocation, investment product, and custody costs. And the average account balance is expected to be approximately $50,000. State Street will provide meaningful marketing support to PensionBee, while PensionBee uses its data-led multi-channel customer acquisition approach to acquire new customers. Under the terms of the agreement with State Street, the annual amount of the marketing support is variable based on the achievement of certain net new asset thresholds. For example, marketing support is anticipated to be $2 million in 2024, and in 2025, the support will be at least $4 million. Marketing support is expected to continue for five to seven years. We expect the US cost per invested customer to be of similar proportions to our UK business over time. As previously stated, PensionBee Group will capitalize PensionBee Inc. with an injection from the existing resources of the group balance sheet, and that will be approximately $4 million over 36 months. As we said before about the USDC market, it represents approximately 80% of the global total and $22.5 trillion in assets. As a result, we expect our US business to grow rapidly, aiming to manage $20 to $25 billion in USDC assets over the next decade. And over time, we expect the US business to become of equal importance to our growing UK business. PensionBee Inc. is targeting profitability in the medium term. And I would now like to hand over to Christoph Martin, PensionBee Group's Chief Financial Officer, who will cover the financial update.

Thank you very much, Romy. Hello and a warm welcome to everyone. I'm pleased to cover the financial section of the Q2 trading update. We continue to grow strongly as we have reached an asset base of approximately 5.2 billion pounds at the end of June, having added over 0.8 billion pounds of AOA in the first half of the year. 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 more than 22,000 new invested customers, representing 355 million pounds of asset growth for the period. The average age of customers joining our platform was approximately 40 and the average account size of each new invested customer was approximately 16,000 pounds, representing an increase of more than 20% compared to H1 2023. The average pension pot size at PensionBee now stands at 21,000 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 first half represented 127 million pounds of AOE, an increase of around 22% over the same period last year. Net flows from existing and new customers contributed 482 million pounds 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 over H1, which represented 364 million pounds of asset growth. In summary, we have grown our asset base efficiently with strong net flows, leaving us well-placed to deliver on our objective of profitable growth this year. We are pleased to report continuous high customer and area retention rates of 96% with positive underlying growth across all cohorts in H1 2024. This serves as a good reminder of our long duration compounding nature of the asset base. Next, we converted the compounding growth of our asset base into predictable annual run rate revenue of 32 million pounds, representing a year-on-year growth rate of 39%. In summary, We continue to deliver consistent, predictable revenue growth thanks to the compounding nature of our AOA base, high retention rate, continuous net flow generation across cohorts, and stable revenue margin. Zooming in on the second quarter, we delivered revenue growth of 40% in Q2 compared to last year. The cost pace for Q2 was reduced overall by 8% compared to the same time period last year. This was achieved with the combination of stable money manager and technology platform costs declining at 8% year-on-year, as well as a more efficient deployment of marketing costs for Q2, reducing by 6%. At the same time, we continued to increase our net flow in absolute terms compared to 2023. The combination of strong predictable revenue growth combined with strict cost discipline allowed us to grow strongly and achieve a profitable quarter for the group. We are pleased to reiterate our guidance for the UK, 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 around 2% of the £1.2 trillion transferable pension markets over the next 5 to 10 years. We are preparing to onboard approximately 1 million invested customers with 20 to 25 thousand 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, we are poised to continue delivering increasingly profitable growth over the medium to long term. Our primary financial goal for 2024 is to deliver full year financial profitability, being also clear, as stated in the previous quarters, that we will consider this goal on a full year basis rather than on a quarterly basis. As we look forward to the next few years after 2024, we expect to grow our marketing investment and invest in our growth, always maintaining our focus on profitability as an underpin. I will now hand back to Romy to cover further updates.