REG - PensionBee Group plc - 4Q 2023 Results Announcement

PensionbeeAnnouncement

24/01/2024 16:30

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RNS Number : 8147A  PensionBee Group plc  24 January 2024

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

 Wednesday 24 January 2024

 PensionBee Group plc
 Trading Update for the twelve months ended 31 December 2023

 Successful strategy drives strong performance for 2023
 Adjusted EBITDA Profitability achieved for Q4 2023

 PensionBee Group plc ('PensionBee' or the 'Company'), a leading online pension
 provider, today announces a trading update (unaudited) for the twelve months
 ended 31 December 2023.

 Highlights

 ●     Strong continued customer growth, with Invested Customers having
 increased by 25% year on year to 229,000 (December 2022: 183,000).
 ●     Assets under Administration increased by 44% year on year to
 £4.4bn (December 2022: £3.0bn), underpinned by strong Net Inflows from new
 and existing customers.
 ●     Customer Retention Rate remained >95%, driven by customer
 satisfaction and continuous product innovation.
 ●     Revenue increased by 35% to £24m (2022: £18m), with Annual Run
 Rate Revenue having increased by 44% to £28m (2022: £20m).
 ●     Adjusted EBITDA of £(8)m (2022: £(20)m) improved by 57% year on
 year, driven by strong Revenue growth and cost efficiencies across the
 business.
 ●     Adjusted EBITDA profitability achieved in Q4 2023, with positive
 Adjusted EBITDA Margin of 8% as compared to (98)%, (50)% and (17)% in Q1, Q2
 and Q3 respectively.

 PensionBee delivered strong growth across all of its key performance
 indicators, with Assets under Administration ('AUA') increasing by 44% to
 £4.4bn. The Company has seen excellent momentum in the growth of its customer
 base, adding approximately 46,000 new Invested Customers across the year,
 taking the overall Invested Customer base to 229,000. This demonstrates the
 continued success of its data-led, multi-channel customer acquisition approach
 and highlights the clear demand for its customer-focused proposition.

 Revenue grew by 35% year on year to £24m as a result of strong Net Inflows
 from new and existing customers, with the Annual Run Rate Revenue increasing
 by 44% to £28m(1). The Company's sustained high Customer Retention Rate and
 AUA Retention Rate, both >95%, have continued to drive recurring Revenue.

 Continued Advancement of Strategic Goals

 The Company's £9.7m marketing investment across the year, bringing the
 cumulative marketing investment since inception to £55m, has driven sustained
 brand awareness and customer acquisition. PensionBee's brand awareness
 activities for the year have been centred on cost-effective channels such as
 radio, television and sports sponsorship. This approach has been accompanied
 by continued investment in performance channels such as search and social
 media, with data-led insights driving decision-making. Cost per Invested
 Customer ('CPIC') has continued to demonstrate a downward trajectory with the
 achievement of an In-Period CPIC for 2023 of £212(2), highlighting the
 Company's marketing capability and efficiency of spend.

 PensionBee has continued to innovate, to meet the needs of its customers and
 support their engagement. It has continued to provide customers with helpful
 tools they need to plan for their retirement, such as its tax relief, state
 pension and inflation calculators, and the introduction of in-app withdrawals
 has enabled customers at retirement age to pay themselves a salary through
 retirement. The award-winning Pension Confident Podcast was also made
 available within the app, making it easy for customers to directly access
 valuable content on the go.

 The importance that the Company places on delivering outstanding customer
 service has been evidenced through the achievement of a 4.6★ Excellent
 Trustpilot rating from approximately 10,000 Trustpilot reviews, and
 consistently rapid response times on phones and live chat.

 PensionBee has continued to invest in the scalability of its technology
 platform through internal automation, efficiency, security and pension
 transfer improvements to support productivity, as demonstrated by a 15%
 improvement in productivity.(3) The Company continued to prioritise security
 and its customers' cyber safety, through its successful ISO27001
 re-certification, the onboarding of a new 24/7 security operations centre and
 the implementation of mandatory two-factor authentication for all customers.

 Outlook

 The Board remains confident in PensionBee's potential for continued growth and
 profitability, due to a combination of the strength and stability of its
 existing customer base, together with its ability to attract new customers
 that generate growth in recurring Revenue through its scalable technology
 platform.

 The Company is pleased to reiterate the guidance previously provided, with an
 ambition to pursue a c.2% market share target of the substantial £700bn UK
 transferable pensions market over the next 5-10 years, translating to a
 Revenue ambition of approximately £150m.

 The Company remains on track to further reduce Cost per Invested Customer,
 expecting to achieve Adjusted EBITDA profitability for the full financial year
 of 2024, having successfully achieved Adjusted EBITDA profitability for the
 fourth quarter of 2023. PensionBee expects to achieve long-term EBITDA Margins
 in excess of 50%, leveraging the scalability of its technology platform and
 maintaining its high quality service. This is supported by the Company's
 continued positive momentum in its trading performance and growth in key
 indicators, such as Invested Customers and AUA.

 Romi Savova, CEO of PensionBee, commented:

 "We are pleased to have substantially grown our customer base throughout the
 year to approximately 230,000 with £4.4bn of Assets under Administration,
 helping these customers prioritise and engage with their retirements.

 As we approach 10 years since inception, we have reached a pivotal point in
 our corporate journey - the achievement of Adjusted EBITDA profitability
 across the fourth quarter of 2023.

 Looking forward, we are confident in the continued growth of the business and
 the delivery of profitability for the full year 2024, as we continue to help
 more and more consumers become Pension Confident."

 Analyst, Investor and Press Presentation

 There will be a webcast presentation for analysts, investors and press on
 Wednesday 24 January at 5:00pm UK (GMT) / 12:00pm US (EST). Please contact
 press@pensionbee.com if you would like to attend.

 Alternatively you can register and access the webcast with the following
 links:
 Webcast Link: Webcast for video presentation
 (https://pensionbee-dot-yamm-track.appspot.com/2HbhZqzzoie39uaGL8SBHrIOYUSTMvYLmEAw9w3n8MDZlTsAhjQGE4uIyKMdFq1GaAfS46uTAN2_wlU8w0C50CXiX1RJaunmBB2kMNpzixdHkM1vRcRs5xXVu45w9caBVECcPimpcceR0Le-lowcMi3K-Z1lRas_gcanWpuBgExwEl6Gg7TLIYscqBBuIuZzKNRsdtb9EXP0gt1vInlUjZ97bPcnhP45tqN3mav3hD8vMq8U2lPxagG6wAC40BcY1tnA5SbaQFnKOKS7RhFU-886Q9RjRYbbXtApkoZJRxbyOg3HtQ8r_qjNWYiVdIZFEytTwXFkbm17HQxJVBkRIvqRDvMTWmJg8Tq3i32jPhu--1WhD9t099v2ffwQzE2-0ATt7F8ssJLJz
 -et4k1P6XbLUgbaV_Y56ZRlD4AcOC_s5aH9k6eMfADy0IwCjJ7nQr_YC0kr5UKcki_YUv6021g_kT_LMj2qGhsTs7STl_U_osexnxv-tsB2YJJsKz-oiIMBEpEgt6VVkqeHZlD7HES5hlblJ-39TBs7JaQWF)
 Conference Call Link: Conference call for Q&A
 (https://pensionbee-dot-yamm-track.appspot.com/2Q-AxzKK0QpRXg1dusK9r6Ek1xpHtLbx00yMxzKJuZnJpTsAhjQEuVPgFVW8ndBK8K-9H_V6Zx780sOUnTLUgEPY3ZpKoipy6A7ZH-Zu-DWUaxPV4duk7si4Yvfoi-E64wejlgdD2BAY2JvH28csdbAAlPq-cwY8pT9qdeGju63N-HY2-muYwE3h_JkyDDmViHD28W_qYZxgMZLNZCyzevk1hkZodyJPtZwbfLvc2kSrReoRInA-LD9Cd-C2vFHJ7vV53xQfKQxw9HkqJ9OlHgmP44z2_UELMlRD-3pVdiuJ5Zaeh2F6Zu5dw2gSxcXvOkhFRHJRCNR5gSG3bMqGsGMXo1_OlXXtFBXLUjSiTaXZ6XSQUPKXRjJAixAS1SxZXUTMnLNmkiKDRt0rTWBKngGWlx18RSB82wOoLOMrtdHTrit-qkBdT4wsHBEVEg6QBDzg-NfdZ
 -Ddcy4XN6JkG)

 Financial Summary

 

                                        As at Period End
                                        Dec      Dec      Dec      YoY change

                                        2021     2022     2023
 AUA (£m)(4)                            2,587    3,025    4,350    44%
 AUA Retention Rate (% of AUA)(5)       >95%     >95%     >95%     Stable
 Invested Customers (thousands)(6)      117      183      229      25%
 Customer Retention Rate (% of IC)(7)   >95%     >95%     >95%     Stable
 Cost per Invested Customer (£)(8)      246      248      241      (3)%
 Realised Revenue Margin (% of AUA)(9)  0.64%    0.63%    0.64%    +1bp

 

                                            Over the 12-month Period Ending
                                            Dec       Dec       Dec       YoY change

                                            2021      2022      2023
 Revenue (£m)(10)                           13        18        24        35%
 Cost Base (£m)                             (29)      (37)      (32)      (13)%
 Adjusted EBITDA (£m)(11)                   (16)      (20)      (8)       57%
 Adjusted EBITDA Margin (% of Revenue)(12)  (129)%    (110)%    (35)%     75ppt

 

                                     Over the 12-month Period Ending
                                     Dec       Dec       Dec       YoY change

                                     2021      2022      2023
 Opening AUA (£m)(4)                 1,358     2,587     3,025     17%
    Gross Inflows (£m)               1,099     1,060     1,174     11%
    Gross Outflows (£m)              (145)     (197)     (318)     61%
 Net Inflows (£m)                    955       863       857       (1)%
    Market Growth and Other (£m)     275       (424)     464       n/m
 Closing AUA (£m)(4)                 2,587     3,025     4,350     44%

 

                                            Over the 3-month Period Ending
                                            Q4        Q4        Q4        YoY change

                                            2021      2022      2023
 Revenue (£m)(10)                           4         5         7         39%
 Adjusted EBITDA (£m)(11)                   (5)       (1)       1         n/m
 Adjusted EBITDA Margin (% of Revenue)(12)  (118)%    (25)%     8%        33ppt

 

 Notes
 *   ppt is the absolute change in percentage.
 1 Annual Run Rate ("ARR") Revenue is calculated using the Recurring Revenue for
   the relevant month multiplied by 12.
 2 In-Period CPIC is defined as the marketing costs for the relevant period
   divided by the number of Invested Customers for that same period.
 3 Invested Customers per Staff Member calculated using LTM average for total
   workforce. Management information as at 30 December 2023.
 4 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.
 5 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.
 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 Realised Revenue Margin is calculated by using the last twelve months of
   Recurring Revenue over the average quarterly AUA held in PensionBee's
   investment plans over the period.
 10  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.
 11  Adjusted EBITDA is the profit or loss for the period before taxation, finance
   costs, depreciation, share based compensation and transaction costs.
 12  Adjusted EBITDA Margin means Adjusted EBITDA as a percentage of Revenue for
   the relevant period.

 

 Contacts
 PensionBee        press@pensionbee.com

 Becky O'Connor

 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 and impact investing 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 c.£4.4bn in Assets Under Administration and 229,000 Invested
 Customers as at 31 December 2023. PensionBee has consistently maintained a
 Customer Retention Rate in excess of 95% and an Excellent Trustpilot rating
 from more than 10,000 customers, reflecting its commitment to outstanding
 customer service.

 PensionBee is admitted to trading on the Premium Segment of the London Stock
 Exchange's Main Market (LON:PBEE).

 

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