Ten Lifestyle Group Plc

Welcome to this investor presentation from Ten Lifestyle Group that reports our full year results to the end of August and provides insight into the outlook for the business. Our ambition remains to become the world's most trusted service and we have the hallmarks of a great investment. We serve the wealthy, the mass affluent and their loved ones. And that's a huge market opportunity across travel, retail, dining, entertainment. And we're now an established global market leader with an unparalleled success in winning and retaining high value corporate contracts. And those corporates pay us to deliver highly valued service on programmes that then have a positive ROI, return on investments, for the brands that we support. We've got market leading technology that is used by both our members on a digital platform and also by our lifestyle managers. And that technology makes the service that lifestyle managers deliver both higher quality and more efficient. I strongly encourage you to watch a five minute video that gives an explanation of the growth engine that is driving our success and is the beating heart of TEN's model and vision. And this video can be found on our website. So what about our results in the year to end August 2020? We achieved well in a tough environment. Despite the pandemic, net revenues only declined by 3.5%. Revenue from our corporate partners was actually marginally up in the year. After our post-IPO investment phase, we've now reached profitability on an EBITDA basis. We've improved our cash flows, Actually, we've become cash flow positive in the second half of the year. And we achieved all of this as we continued high levels of investment into our technology and content, which enable us to continue the digital transformation of our business that makes us a better service, a more efficient business, and all around a more investable business. We achieved record member satisfaction, and we've won and renewed important corporate contracts and we've continued to build the contract pipeline for our future success.

The next few slides go into more financial detail. The details are on our results announcement published on our website. or you may want to pause on some of these slides. I'm going to top line detail only here for the viewer with more limited time. As a reminder, we make most of our money from the corporates who pay us to serve the customers. This is especially helpful right now because our much smaller 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 in 2019 and reduced to 7% in this reported year. A good proportion of this net revenue is contractually guaranteed and our contracts are typically for three to five year periods. Within our revenue numbers, EMEA did especially well. We were pleased to be in EBITDA profitability across the full year and with an improving cash flow position, building cash in the second half. We reduced our costs, helped by the operational efficiencies produced by our growth engine. We had an increase in share-based payments. This is because the company chose to save cash during the pandemic by offering staff share options in return for reducing their salaries. Many of the 10 team took this opportunity to back the business. Other details on this slide are fully explained in our accounts on our website. The pandemic meant that revenue from suppliers was significantly reduced, which meant that overall net revenues were down 3.5%, despite revenues from corporates actually being slightly increased in the year. Our largest region, EMEA, did relatively well, despite the impact of COVID-19. The Americas won new business that grew an existing contract into an extra large, but this is not enough to offset the decline due to the pandemic. And APAC also declined. We continued to choose to invest into technology which sits at the heart of our growth engine. We are profitable on an EBITDA basis, either with or without the impact of a new accounting standard rule known as IFRS 16. Here is a breakdown by region. We track our cash flow progress very seriously. We are pleased that we end the year with £11 million in cash, with positive net cash flow in the second half and with an improved operating cash flow of just under £7 million year on year.

Operationally, we successfully adapted to the coronavirus crisis and we improved both our proposition and operational efficiencies. In line with the growth engine in our model, we provided record member satisfaction, We grew our capability and we improved efficiency, all whilst winning and expanding contracts and improving our technology and improving our broader platform. The ever better proposition helped us to deliver to both our members and meet the commercial objectives of our corporate clients. and with a return on investment for those corporate clients that we can prove with their own data. During COVID lockdowns, we adapted to provide relevant at-home services. We adapted to help plan staycations, virtual events and gourmet deliveries, rather than plan long-haul holidays and city centre nights out. There's a lot more about how we adapted successfully in our first half results video on the TEN Group site and even more on our company LinkedIn pages. I'd encourage you to have a look there. And during the year, we continued to deepen and broaden the claims that we can make about our service to attract new members and inspire existing ones. This video is designed for research purposes, but it nicely summarizes aspects of our latest proposition.

Being with 10 open stores, it gives you access exclusive and instant access to the best hotels.

I'd like to warmly welcome you to the hotel. restaurants. As a treasured member of the concierge, we're looking forward to welcoming you to marry. Shows and events around the world.

And because we use the buying power from our 250,000 active members, we negotiate better rates for you. And as we get our income from membership fees, not commissions, we pass the lower price on to you. So next time you want to have an amazing night out eating at Amazonico, Sushi Samba, Chilton Firehouse, Rue at the Lando, Use 10 to get in, then follow up with your favorite event, whether it's front row seats to the ballet, VIP box to see Ed Sheeran, or being at the heart of the crowd while watching your favorite match. Use 10 to get you priority access, even when the tickets are sold out. Next time you go on holiday, discover how a 10 membership can get you room upgrades, complimentary breakfasts, complimentary spa, and early check-ins and late check-outs. Take advantage of our discounts on many other travel services too. At 650,000 hotels worldwide, we have exclusive prices that are on average 15% lower than you can find online. And it's not just money you save, it's time. Call our expert lifestyle managers and they'll organize anything you need, no matter how urgent. And while you're enjoying all the lifestyle benefits, take advantage of the exclusive offers on Well Love Brands. Use our members-only platform to browse the latest and hottest offers, as well as use all our services at any time of the day that suits you. Live a better life with Ted by your side.

For the readers amongst you, you may also like to read a five minute fictional story written with the writer and performer Ben Moore. That's also on our 10 group website. And this short story illustrates our vision for how members can use our service and actually how many members do use our service today. The investment into our proposition helps us provide a better service and our corporate clients, encouraged by our proven positive effect on their customer metrics, stayed loyal in the year and overall spent more with us despite COVID-19. Now, certainly the pandemic has slowed new contract wins and has slowed large-scale rollouts, but we lost no material clients to competitors and we have developed a strong pipeline of contracts for the post-pandemic era. Our digital transformation continues with a four-fold increase in fully automated requests. We improved both the member-facing platform and the tools used by our lifestyle managers. The huge advances in our content teams increased service levels and member engagement very significantly. which underpinned a lot of our successful response to COVID-19. It kept us talking with our members, helping them being proactive. To experience our digital platform for yourself, please do take a look at our private membership site and sign up for a trial month so you can experience our tech and our service for yourselves. New verticals will benefit as the health crisis passes. We're preparing our private membership for a test and learn period as the pandemic eases. We had expected to grow our major TMT telecoms contract in 2020, but that's been delayed until after the pandemic passes. But we would hope and expect to launch that in 2021. All these initiatives and more use the platform that we've built and are constantly improving in market today. In terms of outlook, we expect to grow revenues as the pandemic eases with new and existing corporate partners. And there are many, many opportunities to work better than ever with those corporates. We have proved our value as other tools, other things that they invest in have failed them. Suppliers need us too. In travel, retail and hospitality, they need our high-spending members more than ever. And we believe our competitive position is stronger than ever, both relative to our direct and indirect competitors. However, to manage expectations, we do not expect our business to return to high levels of growth until after the pandemic's effects have passed. We do expect the extra efficiencies in our model to help us retain positive EBITDA and healthy cash levels, and our growth engine will keep turning as our platform matures. Thank you, and please do find out more on our website or by getting in touch.