REG - PensionBee Group plc - Q2 2024 Results
24/07/2024 16:30
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RNS Number : 7077X PensionBee Group plc 24 July 2024
PensionBee Group plc
Incorporated in England and Wales
Registration Number: 13172844
LEI: 2138008663P5FHPGZV74
ISIN: GB00BNDRLN84
24 July 2024
PensionBee Group plc
Q2 2024 Results
Successful Strategy drives Strong Performance
Positive Adjusted EBITDA achieved in Q2
PensionBee Group plc ('PensionBee' and together with its subsidiary companies
the 'Group'), a leading online pension provider, today announces a trading
update (unaudited) for the quarter ended 30 June 2024.
Group Financial Highlights
● Assets under Administration increased by 40% year on year to £5.2bn (June
2023: £3.7bn), underpinned by strong Net Flows from new and existing
customers and supportive markets.
● Revenue for the quarter increased by 40% to £8m (Q2 2023: £6m), with Annual
Run Rate Revenue having increased by 39% to £32m (June 2023: £23m).(1)
● Invested Customers increased by 19% year on year to 252,000 (June 2023:
211,000), demonstrating strong continued growth. Customer Retention Rate was
96%, driven by continued strong customer satisfaction (4.7★ Trustpilot
score) and ongoing product innovation.
● Positive Adjusted EBITDA achieved for the Group for the quarter (Q2 2024:
£0.1m vs. Q2 2023: £(2.9)m), with the UK business remaining on track to
achieve Adjusted EBITDA profitability for FY 2024.
● Strong cash balance of c.£10.9m as of June 2024.
United Kingdom
Continued Advancement of Strategic Goals
● Efficient Investment in Customer Acquisition and Growing Brand Awareness:
PensionBee's UK business continued to grow its brand and acquire customers
efficiently, investing £2.3m in diversified marketing activities across the
quarter, bringing the cumulative marketing investment since inception to
£61m. Each £1 of marketing expenditure generated £82 of Net Flows in H1
2024 an increase of 20% year on year (H1 2023: £69), demonstrating the
effectiveness of marketing expenditure deployed.(2) Cost per Invested Customer
continued to demonstrate a downward trajectory (Q2 2024: £242 vs. Q2 2023:
£247), highlighting the strength of the Company's marketing capability, the
efficiency of spend, and the importance of household brand awareness in
driving customer acquisition.(3)
● Leadership in Product Innovation: PensionBee has continued to innovate to meet
the needs of its UK customers. PensionBee has released helpful, engaging
tools, such as new investment-related features providing increased
transparency and educational content.
● Focus on Excellent Customer Service: The delivery of excellent customer
service has continued to be prioritised, as evidenced through the achievement
of a 4.7★ Excellent Trustpilot rating from approximately 10,900 Trustpilot
reviews and the maintenance of rapid customer response times through tax year
end.
● Investment in and Development of Leading Technology Platform: PensionBee has
continued with its ongoing investment in the scalability of its technology
platform, which continues to underpin its competitive advantage. Efficiency
improvements through internal automation, security and pension transfer
improvements, have delivered a 23% productivity improvement year on year (Q2
2024: 1,264 Invested Customers / FTE vs. Q2 2023: 1,026 Invested Customers /
FTE).(4)
UK Guidance and Outlook
PensionBee is pleased to reiterate the guidance previously provided.
UK Revenue Objectives:
● Aim to deliver sustained and high Revenue growth by continuing appealing to
the mass market, acquiring more new customers and growing customers' pension
balances.
● Pursue a c.2% market share of the £1.2tr UK transferable pensions market over
the next 5-10 years, equivalent to c.1m Invested Customers (assuming an
average pension pot size of £20,000-25,000).(5)
● Expect to maintain relative Revenue margin stability, translating into a
long-term Revenue ambition of c.£150m in the UK.
UK Profitability Objectives:
● Given historical investment in brand and technology over many years, and the
achievement of ongoing Adjusted EBITDA profitability in the final quarter of
2023 and again in this quarter, the UK business is on track to deliver
Adjusted EBITDA profitability for the full year 2024.
● Ambition to achieve long-term EBITDA Margins of over 50%, leveraging the
scalability of the technology platform, through further automation while
maintaining the high quality of service, and by steadily continuing to reduce
the Cost per Invested Customer.
United States
Update on PensionBee Launch
● On 18 July 2024, PensionBee announced the launch of its US business,
confirming that its subsidiary PensionBee Inc. had entered into a strategic
partnership with its long-standing asset management provider, State Street
Global Advisors ('State Street'). The United States is the world's largest
Defined Contribution pension market, representing approximately 80% of the
global total and $22.5tr in assets.(6)
● PensionBee will deploy its award-winning online retirement proposition and
proprietary technology, enabling US consumers to easily consolidate and roll
over their 401(k) plans and Individual Retirement Accounts ('IRAs') into one
new PensionBee IRA. PensionBee Inc. is registered with the Securities and
Exchange Commission ('SEC') as an investment adviser, enabling the company to
operate federally and statewide without additional registrations.
● PensionBee Inc. offers a range of investment portfolio options, with
underlying State Street model portfolios. Each investment portfolio is
constructed exclusively with Exchange Traded Funds ('ETFs') managed by State
Street.
● The PensionBee IRA will be offered under a wrap fee program, including the
PensionBee advisory service, asset allocation and management fees and custody
fees. The overall cost will be 0.85% of assets under management, of which
PensionBee will retain approximately 0.55% after asset allocation, investment
product and custody costs. The average account balance is expected to be
approximately $50,000.
● State Street will provide meaningful marketing support to PensionBee as it
uses its data-led, multi-channel customer acquisition approach to attract new
customers. Under the terms of the agreement with State Street, the annual
amount of the marketing support is variable based on the achievement of
certain net new asset thresholds. For example, marketing support is
anticipated to be $2m in 2024 and in 2025 the support will be at least $4m.
Marketing support is expected to continue for 5-7 years. PensionBee expects a
US Cost per Invested Customer of similar proportions to its UK business over
time.
● PensionBee Inc. is a wholly owned subsidiary of PensionBee. PensionBee Inc. is
financially managed separately to PensionBee Group's UK business. PensionBee
Inc. is separately regulated by the SEC.
US Objectives
● PensionBee expects its US business to grow rapidly, aiming to manage $20-25bn
in US Defined Contribution assets over the next decade, such that it becomes
of equal importance to its growing UK business.
● PensionBee Group will capitalise PensionBee Inc. with an injection from the
existing resources of its Group balance sheet (approximately $4m over 36
months).
● PensionBee Inc. is targeting profitability in the medium-term.
Romi Savova, CEO of PensionBee, commented:
"Our substantial growth has continued over the second quarter, with Assets
under Administration reaching £5.2 billion and 252,000 Invested Customers in
the UK. As we continue to consistently execute on all elements of our
strategy, having achieved positive Group Adjusted EBITDA for the second
quarter, we remain confident in the delivery of profitability across the UK
business for the full year 2024.
We are delighted to expand the reach of our award-winning customer
proposition, innovative technology platform and unique marketing approach into
the US market, the world's largest Defined Contribution pension market. This
marks a significant step towards the achievement of our vision: a world where
everyone can enjoy a happy retirement."
Analyst, Investor and Press Presentation
A copy of this Q2 2024 Results Announcement and the accompanying Q2 2024
Results Presentation will be made available post-market close on 24 July 2024
for download at:
pensionbee.com/investor-relations/results-and-reports. A recording of the
presentation will follow.
There will be a live webcast presentation of the Q2 2024 Results via Investor
Meet Company hosted by Romi Savova (CEO) and Christoph J. Martin (CFO) on
Wednesday 24 July 2024 at 5:00pm UK (BST) / 12:00pm US (EST). The presentation
is open to analysts, existing and potential investors and press.
Attendees can sign up to the Investor Meet Company platform for free and add
to meet PensionBee via:
investormeetcompany.com/pensionbee-group-plc/register-investor
Group Financial Summary
As at Period End
Jun-2023 Jun-2024 YoY change
AUA (£m)(7) 3,704 5,196 40%
AUA Retention Rate (% of AUA)(8) >95% >95% Stable
Invested Customers (thousands)(9) 211 252 19%
Customer Retention Rate (% of IC)(10) >95% >95% Stable
Cost per Invested Customer (£)(11) 247 242 (2)%
Revenue Margin (% of AUA)(12) 0.65% 0.64% Stable
Annual Run Rate Revenue(1) 23 32 39%
LTM Revenue(13) 20 28 40%
Over the 6-month Period Ending
Jun-2023 Jun-2024 YoY change
Opening AUA (£m)(7) 3,025 4,350 44%
Gross Inflows (£m) 612 695 14%
Gross Outflows (£m) (143) (214) 49%
Net Flows (£m)(14) 469 482 3%
Market Growth and Other (£m) 210 364 74%
Closing AUA (£m)(7) 3,704 5,196 40%
Over the 3-month Period Ending
Jun-2023 Jun-2024 YoY change
Revenue (£m)(15) 6 8 40%
Cost Base (£m) (9) (8) (8)%
Adjusted EBITDA (£m)(16) (3) 0.1 n/m
Adjusted EBITDA Margin (% of Revenue)(17) (50)% 1% 52ppt*
Over the 6-month Period Ending
Jun-2023 Jun-2024 YoY change
Revenue (£m)(15) 11 15 41%
Cost Base (£m) (19) (17) (8)%
Adjusted EBITDA (£m)(16) (8) (2) 75%
Adjusted EBITDA Margin (% of Revenue)(17) (73)% (13)% 60ppt*
Notes
* A ppt is a percentage point. A percentage point is the unit for the arithmetic
difference of two percentages.
1 Annual Run Rate ('ARR') Revenue is calculated using the recurring Revenue for
the relevant month multiplied by 12.
2 Cumulative Net Flows over the relevant period divided by Cumulative Marketing
spend over the relevant period.
3 PensionBee prompted brand awareness tracker, April 2024. 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 82%,
Scottish Widows 74%, Standard Life 68%, PensionBee 55%, Hargreaves Lansdown
40%, Nutmeg 37%, AJ Bell 33%, Interactive Investor 11%
4 Productivity, measured using Invested Customers per Staff Member metric, is
calculated using an LTM average for the total workforce. Management
information as at 30 June 2024.
5 £1.2tr UK transferable pensions market is as of 2023 while the £722bn
reference previously used was as of 2019; as such the increase is driven due
to growth over that time period (c.10% CAGR consistent with c.12.5% CAGR in
the period before that).
6 Investment Company Institute, 'Release: Quarterly Retirement Market Data' as
at 13 December 2023. Includes the sum of DC Plans and IRAs.
7 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.
8 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.
9 Invested Customers ('IC') means those customers who have transferred pension
assets or made contributions into one of PensionBee's investment plans.
10 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.
11 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.
12 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.
13 LTM 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 over the last twelve
months.
14 Net Flows measures the cumulative inflow of PensionBee AUA from consolidation
and contribution ('Gross Inflows'), less the outflows from withdrawals and
transfers out ('Gross Outflows') over the relevant period.
15 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.
16 Adjusted EBITDA is the profit or loss for the period before taxation, finance
costs, depreciation, share based compensation and transaction costs.
17 Adjusted EBITDA Margin means Adjusted EBITDA as a percentage of Revenue for
the relevant period.
Enquiries
PensionBee
Press
Becky O'Connor
Laura Dunn-Sims
Steven Kennedy
press@pensionbee.com
+44 20 3557 8444
Analysys and Investors
investor@pensionbee.com
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. 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 vast 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. PensionBee
has £5.2bn of Assets Under Administration and 252,000 Invested Customers as
at 30 June 2024. It has consistently maintained a Customer Retention Rate in
excess of 95% and an Excellent Trustpilot rating from more than 10,900
customers, reflecting its commitment to outstanding customer service.
PensionBee is listed on the London Stock Exchange (LON:PBEE).
Forward Looking Statements
Statements that are not historical facts, including statements about
PensionBee's or management's beliefs and expectations, are forward-looking
statements. The results contain forward-looking statements, which by their
nature involve substantial risks and uncertainties as they relate to events
and depend on circumstances which will occur in the future and actual results
and developments may differ materially from those expressly stated or
otherwise implied by these statements.
These forward-looking statements are statements regarding PensionBee's
intentions, beliefs or current expectations concerning, among other things,
its results of operations, financial condition, prospects, growth, strategies
and the industry and markets within which it operates.
These forward-looking statements relate to the date of these results and
PensionBee does not undertake any obligation to publicly release any revisions
to these forward-looking statements to reflect events or circumstances after
the date of the results.
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