REG - PensionBee Group plc - 4Q 2022 Results Announcement

PensionbeeAnnouncement

19/01/2023 07:00

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RNS Number : 1904N  PensionBee Group plc  19 January 2023

 

 PensionBee Group plc
 Incorporated in England and Wales
 Registration Number: 13172844
 LEI: 2138008663P5FHPGZV74
 ISIN: GB00BNDRLN84

 

 

 19 January 2023

 PensionBee Group plc
 Trading Update for the year ending 31 December 2022

 Assets under Administration exceed £3bn
 On track to achieve ongoing Profitability in 2023

 PensionBee Group plc ('PensionBee' or the 'Company'), a leading online pension
 provider, today announces a trading update for the year ending 31 December
 2022.

 Highlights

 

 ●            Invested Customers increased 56% to 183,000 (2021: 117,000) with a Registered
              Customer base of 986,000 (December 2021: 658,000).
 ●            Assets under Administration ('AUA') increased by 17% year on year to over
              £3.0bn (2021: £2.6bn) driven by strong inflows from new and existing
              customers.
 ●            Customer Retention Rate remained high at 97% (2021: 97%).
 ●            Revenue increased by 38% to £18m (2021: £13m), with Annual Run Rate Revenue
              having increased to £20m.
 ●            On track to achieve the primary objective of ongoing Adjusted EBITDA
              profitability by the end of 2023, having achieved Adjusted EBITDAM
              profitability for the last quarter of 2022.

 

 The Company has achieved strong growth in Assets under Administration,
 reaching in excess of £3bn, together with Revenue growth of c.38% year on
 year, driven by strong inflows from both new and existing customers and a
 sustained Customer Retention Rate of 97%.

 Excellent momentum in the growth of the customer base has continued, with the
 addition of 66,000 new Invested Customers across the year as the strength of
 PensionBee's proposition has continued to resonate strongly with customers.
 New product innovations have enabled customers to make easy additional pension
 contributions and to better self-serve, complementing the Company's excellent
 customer service capabilities.

 PensionBee has become a household name, having achieved prompted brand
 awareness of more than 50%.(1) Its proprietary data platform has continued to
 provide valuable insights into consumer behaviour, supporting decision-making
 to optimise marketing and return on investment.

 The Company has continued to develop its scalable, secure technology platform,
 with increased automation having driven gains in operational efficiency and
 margin improvement.

 Overall, the Company has executed on its strategy, achieving its key
 profitability milestones of Adjusted EBITDAM profitability for the fourth
 quarter of 2022 and monthly Adjusted EBITDA profitability in November.

 Outlook

 With PensionBee having delivered against its primary growth objectives and
 financial guidance, initially set out at the time of its IPO in April 2021,
 the Board is now pleased to provide an updated framework for guidance,
 confirming its short-term goals and setting out its expectations for the
 longer-term.

 With respect to the longer-term, set against a backdrop of the substantial
 target market opportunity in UK Defined Contribution pensions of approximately
 £700bn in assets, the Company is pursuing a market share of approximately 2%
 over the next 5-10 years (equivalent to about 1m Invested Customers, assuming
 an average pension pot size of £20,000-£25,000). With an expectation of
 maintaining relative revenue margin stability, this translates into a long
 term annual Revenue opportunity of approximately £150m. The Company expects
 to achieve long-term EBITDA margins of more than 50%, leveraging the
 scalability of the technology platform

 In the short to medium term, the Company remains on track to achieve monthly
 Adjusted EBITDA profitability by the end of 2023 and to be profitable for the
 full year 2024, by reducing the Cost per Invested Customer and delivering
 further automation through its scalable technology platform.

 Having become a household brand name, the Company will continue to extend its
 presence, appealing to the mass market and competing to acquire more new
 customers with its excellent product offering and personalised customer
 service. The Company will also focus on enabling its customers to grow their
 pension balances.

 Underscoring the strength of its strategy and its execution capability,
 PensionBee aims to deliver superior and sustained annual Revenue growth as
 compared to other UK financial services companies.

 Romi Savova, CEO of PensionBee, commented:

 "2022 was a landmark year for PensionBee, having exceeded the £3 billion
 Assets under Administration milestone while delivering pre-marketing
 profitability in line with our objectives. We're proud to have continued
 growing our brand into a household name, making PensionBee synonymous with
 easy and effective pension management for consumers.

 As we look forward to 2023, our focus remains on helping our ever increasing
 customer base manage their pensions through our industry-leading pension
 offering and personalised customer service."

 Analyst and Investor Presentation

 There will be a presentation for analysts and investors this morning at 8:30am
 via webcast. Please contact pensionbee@tulchangroup.com if you would like to
 attend.

 Financial Summary*

                                                       As at Period End
                                                       Dec-2020      Dec-2021      Dec-2022      YoY

                                                                                                  change

 AUA (£m)(2)                                           1,358         2,587         3,025         17%
 AUA Retention Rate (% of AUA)(3)                      96%           96%           97%           stable
 Registered Customers (thousands)(4)                   403           658           986           50%
 Active Customers (thousands)(5)                       119           172           273           59%
 Invested Customers (thousands)(6)                     69            117           183           56%
 Customer Retention Rate (% of IC)(7)                  97%           97%           97%           stable
 Cost per Invested Customer (£)(8)                     232           246           248           as guided
 Same Year RC:IC Conversion (% of RC)(9)               17%           18%           19%           1 ppt
 Contractual Revenue Margin (% of AUA)(10)             0.69%         0.69%         0.69%         stable

                                                       For the Period Ending
                                                       Dec-2020      Dec-2021      Dec-                 YoY

                                                                                   2022                 change

 Revenue (£m)(11)                                      6             13            18                   38%
 Annual Run Rate (ARR) Revenue(12)                     9             16            20                   20%
 Adjusted EBITDA (£m)(13)                              (10)          (16)          (19)                 -19%
 Adjusted EBITDA Margin (% of Revenue)(14)             (166)%        (129)%        (110)%               19 ppt

                                For the Period Ending
                                Dec-2020                      Dec-2021      Dec-2022      YoY

                                                                                          change

 Opening AUA (£m)(2)            745                           1,358         2,587         91%
 Gross Inflows (£m)             593                           1,099         1,060         -4%
 Gross Outflows (£m)            (70)                          (145)         (197)         36%
 Net Inflows (£m)               523                           955           863           -10%
 Market Growth and Other (£m)   90                            275           (424)         n/m
 Closing AUA (£m)(2)            1,358                         2,587         3,025         17%

 

Notes:

 

* Financial results for FY2022 are unaudited.

 1   Source: PensionBee brand tracker, January 2023. Prompted brand awareness
     measured through a consumer survey asking 'Which of the following have you
     heard of?' with respect to UK financial services brands: Aviva 83%, Scottish
     Widows 77%, Standard Life 66%, Royal London 55%, PensionBee 52%, Hargreaves
     Lansdown 36%, Vanguard 32%, Fidelity 30%, Nutmeg 30%, AJ Bell 21%, Interactive
     Investor 9%.
 2   Assets under Administration ("AUA") is the total invested value of pension
     assets within PensionBee Invested Customers' pensions. It measures the new
     inflows less the outflows and records a change in the market value of the
     assets. AUA is a measurement of the growth of the business and is the primary
     driver of Revenue.
 3   AUA Retention measures the percentage of retained PensionBee AUA from Transfer
     Outs over the average of the trailing twelve months. High AUA retention
     provides more certainty of future Revenue. This measure can also be used to
     monitor customer satisfaction.
 4   Registered Customers ("RC") measures customers who have started the sign-up
     process and have submitted at least a name and an email address and includes
     those customers who are classified as Active Customers. Note: This metric will
     be retired from the Company's ongoing regular reporting framework for the
     FY2023 onwards, with a continued focus on the Invested Customer metric.
 5   Active Customers ("AC") means all customers who have requested to become an
     Invested Customer by accepting PensionBee's terms of business but for whom the
     transfer or contribution process is not yet completed and all customers who
     are classified as Invested Customers. Note: This metric will be retired from
     the Company's ongoing regular reporting framework for the FY2023 onwards, with
     a continued focus on the Invested Customer metric.
 6   Invested Customers ("IC") means those customers who have transferred pension
     assets or made contributions into one of PensionBee's investment plans.
 7   Customer Retention Rate measures the percentage of retained PensionBee
     Invested Customers over the average of the trailing twelve months. High
     customer retention provides more certainty of future Revenue. This measure can
     also be used to monitor customer satisfaction.
 8   Cost per Invested Customer ("CPIC") means the cumulative advertising and
     marketing costs incurred since PensionBee commenced trading up until the
     relevant point in time divided by the cumulative number of Invested Customers
     at that point in time. This measure monitors cost discipline of customer
     acquisition. PensionBee's desired CPIC threshold is £200-£250.
 9   Same Year RC:IC Conversion percentage is calculated by dividing the number of
     Invested Customers as at the end of the period by the number of Registered
     Customers at the end of the period. This measure monitors PensionBee's ability
     to convert customers through the acquisition funnel. Note: This metric will be
     retired from the Company's ongoing regular reporting framework for the FY2023
     onwards.
 10  Contractual Revenue Margin means the weighted average contractual fee rate
     across PensionBee's investment plans (before applying any size discount)
     calculated by reference to the amount of AUA held in each plan across the
     period.
 11  Revenue means the income generated from the asset base of PensionBee's
     customers, essentially annual management fees charged on the AUA, together
     with a minor revenue contribution from other services.
 12  Annual Run Rate ("ARR") Revenue is calculated using the Recurring Revenue for
     the relevant month, multiplied by 12. Note: This metric will be retired from
     the Company's ongoing regular reporting framework for the FY2023 onwards.
 13  Adjusted EBITDA is the profit or loss for the period before taxation, finance
     costs, depreciation, share based compensation and transaction costs.
 14  Adjusted EBITDA Margin means Adjusted EBITDA as a percentage of Revenue for
     the relevant period.

 

 Contacts
 Tulchan Communications  pensionbee@tulchangroup.com

 James Macey White       +44 (0)20 7353 4200

 Laura Marshall
 PensionBee              press@pensionbee.com

 Rachael Oku

 Laura Dunn-Sims

 About PensionBee

 PensionBee is a leading online pension provider, making pension management
 easy for its customers while they save for a happy retirement.

 PensionBee helps its customers combine their old pension pots, make flexible
 contributions, invest in line with their goals and values and make withdrawals
 from the age of 55 (increasing to 57 in 2028). PensionBee offers a range of
 investment plans, including fossil fuel free options, from some of the world's
 largest asset managers.

 Operating in the £1 trillion market of Defined Contribution pension assets,
 PensionBee has grown rapidly through its direct-to-consumer marketing
 activities, creating a household brand name for the mass market.

 The Company has over £3.0bn in Assets Under Administration and 183,000
 Invested Customers as at 31 December 2022. PensionBee has consistently
 maintained a Customer Retention Rate in excess of 95% and an Excellent
 Trustpilot rating, reflecting its commitment to outstanding customer service.

 

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