Ten Lifestyle Group Plc

Welcome to this presentation from TEN Lifestyle Group that reports our results to the end of February 2020 and provides insight into the outlook for the business. You'll see throughout this deck images of various creatures from the Galapagos Islands, all suitably and perfectly adapted to succeed in their different environments. As we continue through the current challenging coronavirus crisis, we aim to successfully adapt ourselves so that we continue to thrive as a service, a business and as an investment. So let's recap. Our mission at TEN remains to become the world's most trusted service. And we have the hallmarks of a great investment. We serve the mass affluent and wealthy. That's a huge market opportunity globally. We're now an established global market leader with an unparalleled success in winning and then retaining high value long term corporate contracts with blue chip clients. Those corporates pay us to deliver trusted and valued service on programs that have a positive return on investment for the brands that we support. We've got market leading technology that is used by both our members on a digital platform and by our lifestyle managers to make the service that they deliver both higher quality and more efficient. Now in terms of the results at the end of February 2020, net revenues are up 11%. After our post-IPO investment phase, we're now profitable on an EBITDA basis. We've improved our cash flows and we have no debt. We've won some important new contracts and we continue to invest into technology, becoming more efficient, which is demonstrated by much reduced cash outflows in H1 2020 compared with the previous year. The next few slides go into more detail on the finances which are also detailed in the results announcement published on our website on the 14th of May and also on the London Stock Exchange site. You may want to pause on some of those slides to read the numbers in more detail because I'm going to rattle through for the viewer who's got more limited time. As a reminder, we make most of our money from the corporates who pay us to serve their highly valuable customers. That's especially helpful right now during the coronavirus pandemic because our secondary revenue stream of supplier commission is much reduced. So it's helpful to bear in mind that commissions were only 12% of our net revenues last year. 88% of our net revenues were for the provision of services and typically paid for by blue chip corporates. A good proportion of that net revenue is contractually guaranteed and our contracts are typically for three or five year periods. We're pleased to be back into EBITDA profitability in H1 2020 and to be showing the efficiencies that have resulted from more mature operations around the world, well supported by improving technology. This meant our operating loss before interest and tax improved by £2.6 million compared to last year. And net revenues grew because of both growth from existing clients and also from new contract wins. Europe had an especially strong six months. The Americas grew too, even though the largest contract we launched in H1 only launched at the very end of the reported period, and that was in the Americas. This meant that we had the setup costs in the period, but very little of the revenue benefit. We continued to invest into technology. We're profitable on an EBITDA basis either with or without the impact of a new accounting rule known as IFRS 16. Here is a breakdown by region. We take our cash flow progress very seriously indeed and we're pleased that we've improved operating cash flow by £7 million year on year. This left us with a cash position at the end of the first half which was ahead of expectations. Operationally, we had a good period and we also believe that we've responded to the impact of coronavirus very well so far. We sustained high member satisfaction, we grew our capability and we improved efficiency. We're also continuing to improve our technology. For example, our technology now allows members to locate offers and services near them by using geolocation. We hugely improved the content on our platform, including video and superb editorial. We introduced machine translation to help our content scale globally. We've designed more personalization into the digital experience. And we launched live chat, which many members love and which we will continue to develop. Let's turn to our experiences since the coronavirus hit and our outlook. we have needed to react to a changed environment. We're helped too by the fact that our corporate clients need us now more than ever. We believe that the next 12 to 14 months will see more risk and opportunity open up for banks and wealth managers to win or to lose valuable clients, and that many of their traditional tools for influencing acquisition and retention, like physical events, sponsorship, and face-to-face contact and meetings, are less suitable today. In contrast, at TEND, we've adapted our services to meet the change needs of our members. In May, we recommended more grocery specialists and fine dining restaurants. We're now helping plan staycations instead of long-haul holidays. We're managing outreach programs for our banks to support people who might be self-isolating. We've run campaigns to help our members host virtual dinner parties or virtual pub quizzes and to organize gifts to key workers or loved ones. We run webinars and virtual events and produce useful and relevant content for members. And because most of our corporate contracts are with banks, wealth managers or card issuers, we've seen continued high levels of service use which generates the majority of our revenues. So some of our corporate contracts have grown in the revenues they produce for us since the coronavirus hit, and we're developing a pipeline of interested new corporates who are impressed with the impact and flexibility of our servicing model during a time of change and at a time of heightened customer risk and opportunity. Overall, some new launches have been delayed due to the pandemic, but current client activity is at healthy levels, supporting our dominant revenue stream. Our secondary revenue stream of commissions from suppliers will be lower for a long time, but we've countered this by making significant cost savings, albeit we've chosen to continue to invest into our technology platform. We're now starting to design ways to bring together our members who are high spending customers with our suppliers in ways that are a win for both sides of that marketplace and a win for us and for our corporate partners too. Our plans for the rest of 2020 and into 2021 are led by some foundational principles. We want to maintain a healthy cash position. We want to maintain our EBITDA profitability. Beyond that, we want to continue to derive the benefits of investing into technology and our current servicing capability for the future success, security and value of our business. We know that adaptability combined with decent cash levels will help us take advantage of new opportunities and also manage the as yet unknown risks that will undoubtedly come up. The coming months are not at all easy to forecast, so the responsiveness of our model and of our management will be key. And we will develop the services we offer, proving the value of those services to our corporates and to our members. And that will mean that we'll take further steps towards creating a highly valuable business. Thank you for your interest and for our existing and long-term shareholders for your continued commitment and support. Thank you.