PensionBee Group plc

Good afternoon, ladies and gentlemen, and welcome to the PensionBee Group Q1 results presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged and they can be submitted at any time using the Q&A tab situated on the right-hand corner of your screen. Simply type in your question at any time and press send. Alternatively, type a question mark in the Q&A tab and we'll open up your microphones for you to ask your questions to management. Throughout today's presentation, you will be, as I say, in listening only mode. And before we begin, we'd like to submit the following poll. I'm sure the company would be most grateful for your participation. I'd now like to hand over to CEO Romy Savella. Good afternoon.

Good afternoon and welcome to PensionBee's Q1 2025 results announcement covering trading for the period ending 31 March 2025. 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 first quarter of 2025, we continued to record strong year-on-year growth in assets under administration, revenue, and invested customers as we executed on our long-term strategy. Turning now to our individual country segments. In the UK, we closed the quarter with assets under administration of 5.8 billion pounds, representing 20% year-on-year growth. annual run rate revenue of £36 million, representing 17% year-on-year growth, and 275,000 invested customers, representing 14% year-on-year growth. This growth was achieved despite the well-publicized global economic turbulence, and even while global markets have fallen 5% to 10% over the past few months. Over the first quarter, we onboarded approximately 10,000 new invested customers through effective data-led advertising. Our When Your Pension Is In A Good Place, You're In A Good Place brand campaign premiered across television and radio while we continued to optimize our core online channels. Heading into the second quarter, we continue to execute on our strategy to reach 1 million invested customers in the UK. To that end, we have begun accelerating marketing spend and intend to continue doing so as appetite for our offering remains strong. We will of course keep a watchful eye on economic volatility. We continue to invest in productivity, introducing new automations across our technology platform. We generated a productivity improvement of 16% year on year, with each staff member supporting close to 1400 invested customers. We also made strides with our AI initiatives, further refining our internal bot Beatrix, who is currently supporting our operations team with the view to enabling Beatrix to eventually serve customers. Turning to the U.S., over the first quarter of 2025, we have been broadening and deepening the foundations for long-term growth. We continue to build brand awareness with a particular focus on channels that facilitate national consumer reach, including social media, public relations, and search. Fueled by our engaging content, we grew our social media followership to reach 17,000 across YouTube, Meta, TikTok, and LinkedIn. We have also advanced our Safe Harbor IRA, our employer to consumer offering, launching through several large record keepers. We are currently actively promoting our Safe Harbor IRA to consultants and a number of large and medium-sized employers with a strong reception to our consumer-friendly approach. Throughout the quarter, PensionBee launched several notable functionality enhancements for customers, including a Roth IRA, the ability to make seamless new contributions, and certain transfer automations. With our rapid pace of local innovation expected to continue through the second quarter, we remain on track to increase our marketing expenditure in the second half of 2025. 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 am pleased to cover the financial section of our quarterly trading update. In the first quarter of 2025, PensionBee had a strong financial performance despite the macroeconomic environment with the resilience of our business model, enabling us to achieve 20% year-on-year growth in our AOA. plus 34% year-on-year growth in our last 12 months to March group revenue and coupled with continuous cost discipline leading to improvements in our adjusted EBITDA margin with the group achieving break-even at circa 1% margin on an last 12 months to March 2025 basis. Those continuous achievements are further testament of our consistent and reliable execution against our public market guidance and is ultimately derived from the business core value drivers, which are first, predictable and recurring revenue, and second, business scalability. The first value driver is PensionBee's predictable and recurring revenue, which is generated from a durable base of assets and administration and is derived from the assets of existing and new customers. In the first quarter, we have seen a 20% year-on-year AOA growth to £5.8 billion. The vast majority of our AOA base is derived from existing customers. Those are 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 41 and they build up their pension savings with PensionBee. which means that cohorts on an underlying value basis, i.e. before any impact of capital markets, are growing over time. Next, AOA is also derived from new customer acquisition through our proven approach to cost-discipline new customer acquisition approach. Over the first quarter of 2025, we added circa 10,000 new invested customers onto our technology platform. Joining customers were approximately the same age as our 2024 cohort as our Q1 2025 cohort reflects marketing expenditure made in 2024. As a result, the quarter new invested customer were approximately 40 and they had a similar account size to the same period last year. For the remainder of the year, we expect the total number of invested customers to continue growing strongly and with a slightly younger age profile, which is in line with our marketing strategy for 2025. And as it is customary in the industry, pension assets are invested in capital markets, which have experienced movements year-to-date owing to global trade negotiations impacting PensionsBee's portfolio. Similar to what we have observed in past periods of heightened volatility, we observed strong underlying KPIs on retention rates and net flows, underscoring PensionsBee's strengths and resilience. As a result, the compounding AOA base is subsequently converted into our revenue base owing to our resilient gross revenue margin. In Q1 2025, we have seen a revenue margin of 64 basis points, This is unchanged year-on-year, which enabled us to convert the 20% of year-on-year asset growth into annual run rate revenue growth of around 17% and last 12 months group revenue growth of about 34%. In conclusion, owing to our compounding EOA-based resilient revenue margin, we are driving predictable and recurring revenue. The second value driver is PatreonBee's business scalability owing to the controllability of the cost base, which is thereby continuing to decline as a proportion of revenue. Those scalability dynamics of predictable and recurring top line growth coupled with cost discipline led to improvements in adjusted EBITDA margin to 1% on an LTM to March 2025 basis compared to minus 20% for the comparable metric in the comparable period in 2024. With respect to our 2025 guidance framework for PensionBee as a group, outlining our short, medium, and long-term targets, short to medium term, in the short to medium term, spanning around three to five years, we target the group to generate revenue of above 100 million pounds and a group adjusted EBITDA margin of circa 20% by 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 a group adjusted EBITDA margin of circa 50%. Our roughly £34 million in cash balance puts PensionBee into a strong position to further scale the UK business as well as invest in the tremendous US market opportunity to continue executing on our long-term strategy and delivering on our public market guidance. I would now like to hand back to Romy for concluding remarks.