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.