PensionBee Group plc

Good afternoon, ladies and gentlemen, and good morning to those joining from the US and welcome to the PensionBee Q3 results update. Throughout this recorded update, investors will be in listen-only mode. Questions are encouraged. They can be submitted at any time just using the Q&A tab. It's situated on the right-hand corner of your screen. Just simply type in your questions at any time and press send. The company may not be in a position to answer every question received in 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 I'm sure the company would be most grateful for your participation. I'd now like to hand over to CEO Romi Sivora. Good afternoon.

Good afternoon, and welcome to PensionBee's Q3 2024 results announcement. covering trading for the period ending 30 September, 2024. I'm Romy Savova, the CEO of PensionBee Group. 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 third quarter of 2024, we continued to record strong growth in assets under administration, revenue, and invested customers. As a result of our revenue growth, effective cost control, and increasing productivity, we achieved positive adjusted EBITDA for PensionBee Group in Q3 2024, the second consecutive quarter of adjusted EBITDA profitability reaffirming our expectation of achieving group breakeven on the same basis for the full year 2024. In the United Kingdom, we were pleased to deliver significant growth with assets under administration of 5.5 billion pounds representing 41% year-on-year growth, annual run rate revenue of 34 million pounds representing 41% year-on-year growth and 260,000 invested customers representing 16% 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 63 million pounds in the PensionBee brand cumulatively, and our prompted brand awareness now stands at an all-time high of 58%. Our data-led advertising approach, combined with our household brand name, has continued to deliver marketing efficiency. Each pound of marketing expenditure generated 85 pounds over the first nine months of 2024, an increase of 10% year on year in net inflow AUA generated per pound of marketing spend. At the same time, we continue to maintain a stable cost per invested customer of £244. Over the third quarter, we entered the US market, the world's largest defined contribution pension market, with $24 trillion in assets in partnership with State Street Global Advisors, a longstanding asset management partner of ours in the United Kingdom. State Street will provide meaningful marketing support over the next five to seven years, enabling PensionBee to deploy its diversified multi-channel marketing approach while reducing risk. Our U.S. expansion will enable PensionBee to become a global leader in the consumer retirement market. We are currently in the initial period of live testing, and over this quarter, we were pleased to see a positive consumer response to our marketing approach and to have developed local features to facilitate easier rollovers. I would now like to hand over to Christoph Martin, PensionBee Group's CFO, 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 Q3 trading update. PensionBee has performed strongly in the last quarter, owing to our two powerful value drivers of first, predictable and recurring revenue, and second, business scalability. The first weather driver is PensionBee's predictable and recurring revenue, which is generated from a durable base of assets under administration and is derived from the assets of existing and new customers. In Q3, we have seen a 41% year-on-year AOA growth to circa 5.5 billion pounds. The vast majority of our AOA base is derived from existing customers. So customers who remain with PensionBee for a long period of time and continue to build up their pension savings with us, resulting in value generation for decades to come. This is because our average customer is around 40 and they build up their pension savings with PensionBee, which means that cohorts on an underlying value basis are growing over time. In fact, PensionBee is a net retention business, meaning that our net retention is greater than 100%, which means that looking at the underlying cash movements of any particular cohorts, taking into account consolidation, contribution, withdrawals and attrition, but excluding any positive impact from market growth, that number is positive. Net retention of greater than 100% demonstrates the inherent growth on a cash basis that we see in cohorts acquired in previous years, year after year after year. That means cohorts for which we spend marketing budget acquiring customers in the past keep on delivering revenue year after year. As a result, on a year-to-date basis, we have seen positive growth of all our existing customer cohorts, even the ones acquired very early on in our corporate journey, a trend we consistently observe across cohorts and time. Next, AOA is also derived from new customers acquired through our proven acquisition approach. Strong brand assets and acquisition capabilities allow for new cohorts to come onto the technology platform with increasingly attractive economics. As a result, the compounding AOA base is subsequently converted into our revenue base owing to our resilient revenue margin. In Q3 2024, we have seen a revenue margin of 64 basis points, which enables us to convert the 41% of year-on-year asset growth into ARR growth of 41% and last 12 months, revenue growth of 40%. In conclusion, owing to our compounding AOA-based and resilient revenue margin, we have driven highly predictable and recurring revenue. The second value driver is PensionBee's business scalability owing to the controllability of our core space, which is thereby declining as a proportion of revenue. that consistent margin improvement is generated across all cost categories. As a result, we derive margin improvements over time, achieving our second consecutive quarter of profitability in Q3. With respect to our 2025 guidance framework for PensionBee as a group, outlining our short, medium and long-term targets. In 2024, we expect the group to generate revenue of above 30 million pounds. We further target the group to be at a given profitability point. In the short to medium term, spending around three to five years, we targets the group to generate revenue of above a hundred million pounds and group adjusted EBITDA margin of circa 20% by the year five, whereby the UK is considerably contributing to group profitability. In the long term, spanning five to 10 years, we expect the group to generate above a quarter of a billion pounds in revenue and target group adjusted EBITDA margin of circa 50%. I would now like to hand back to Romy for concluding remarks.