STRICTLY PRIVATE & CONFIDENTIAL
2020 INTERIM RESULTS
15 September 2020
INTERIM RESULTS H1 2020
N E I L S T E V E N S J o i n t C E O
H1 Highlights
M A T T T I M M I N S
J o i n t C E O
A G E N D A
AcceleratingFinancial
DigitalPerformance
Strategy
G A R E T H H A G U E G r o u p F D
Clear
Strategic
Focus
RESI LIENT PERFORMANCE - DI GITAL ACCELERATION
2 | H1 2020 | INTERIM RESULTS
RESILIENT PERFORMANCE - DIGITAL ACCELERATION
H1 2020 - FINANCIAL HIGHLIGHTS
£ 2 8 . 9 m | £ 7 . 4 m | 2 5 . 5 % |
Revenue | Adjusted1 EBITDA | Adjusted1 EBITDA Margin |
(1)% H1 2019 | (8)% H1 2019 | 27.5% H1 2019 |
£ 5 . 3 m | 4 . 2 2 p | 6 5 % |
Adjusted1 PBT | Adjusted1 EPS | Free cash flow conversion |
(14)% H1 2019 | (24)% H1 2019 | Net debt of £25.8m |
FULL YEAR EPS NO LESSTHAN 11.0p
As at 30 June 2020
3 | H1 2020 | INTERIM RESULTS
RESILIENT PERFORMANCE - DIGITAL ACCELERATION
H1 2020 - OPERATIONAL HIGHLIGHTS
Scale strong, | Defaqto strong | Digital strategy |
delivery | moved all services to | |
Subscriptions growing | platform | |
All intermediary | Customer engagement | Award Winning |
& satisfaction increased | ||
services delivered to | Service | |
schedule |
Effectively responded to COVID-19 disruptions
4 | H1 2020 | INTERIM RESULTS
SIMPLYBIZ
Fintech & Services to | Distribution Services to | |
5,600 retail intermediaries | 400 financial institutions | |
Enabling better outcomes
5 | H1 2020 | INTERIM RESULTS
A Quality Business in a Quality Market
Market | Unrivalled | Quality | Strong | Accelerating |
digital | ||||
leading scale | breadth | revenues | margins | |
strategy | ||||
£2.6 trillion retail market
6 | H1 2020 | INTERIM RESULTS
FINANCIAL PERFORMANCE
H1 2020 Financial Performance
£m | 2020 | 2019 | Change |
Revenues | 28.9 | 29.1 | (1%) |
EBITDA1 | 7.4 | 8.0 | (8%) |
EBITDA Margin1 | 25.5% | 27.5% | (7%) |
Profit before tax1 | 5.3 | 6.2 | (14%) |
EPS2 | 4.2p | 5.6p | (24%) |
Free cash flow conversion3 | 65% | 43% | |
1 - Adjusted EBITDA is earnings before interest, tax, depreciation, amortisation, share option charges and operating exceptional costs. Adjusted profit before tax excludes operating exceptional costs and amortisation of intangible assets arising on acquisition.
2 - Adjusted Earnings Per Share is calculated as adjusted profit after tax, which excludes operating exceptional costs and amortisation of intangible assets arising on acquisition, divided by the average number of ordinary shares in issue for the period.
3 - Free cash flow conversion is calculated as adjusted EBITDA, less working capital movements, lease payments, CAPEX, development expenditure, corporation tax paid and interest, as a percentage of Adjusted EBITDA.
8 | H1 2020 | INTERIM RESULTS
RESILIENT PERFORMANCE
H1 2020 - REVENUE
REVENUE £M
£4.1m of revenue impacted by Covid-19 lockdown
9 | H1 2020 | INTERIM RESULTS
RESILIENT PERFORMANCE
H1 2020 - Adjusted EBITDA
EBITDA £M
£1.7m of EBITDA directly impacted by Covid-19 lockdown
10 | H1 2020 | INTERIM RESULTS
H1 2020 - FREE CASH FLOW
£'000 | Jun 20 | Jun 19 |
Adjusted EBITDA1 | 7.4 | 8.0 |
Working Capital | 1.8 | (2.4) |
Tax paid | (1.4) | (0.4) |
CAPEX | (1.0) | (0.0) |
Development spend | (1.4) | (0.9) |
Interest | (0.3) | (0.4) |
Lease Payments | (0.5) | (0.4) |
Free cash flow | 4.7 | 3.4 |
Conversion (%) 2 | 65% | 43% |
1 - Adjusted EBITDA is earnings before interest, tax, depreciation, amortisation, share option charges and operating exceptional costs.
2 - Free cash flow conversion is calculated as adjusted EBITDA, less working capital movements, lease payments, CAPEX, development expenditure, corporation tax paid and interest, as a percentage of Adjusted EBITDA.
11 | H1 2020 | INTERIM RESULTS
GROWING QUALITY EARNINGS
H1 2020 Revenue £m
Fintech &
Research
£7.4m
25% | H1 2019 | |
£4.2m | Intermediary | |
14% | ||
Services | ||
H1 2019 | ||
£12.3m | ||
£11.6m | ||
43% | ||
40% |
H1 2019 £13.3m 46%
Distribution
Channels
£9.2m
32%
H1 2020 EBITDA £m
Fintech & | H1 2019 | Intermediary | |
H1 2019 | Services | ||
Research | |||
£2.0m | |||
£2.9m | 25% | £2.3m | £2.4m |
29% | 33% | ||
39% | |||
H1 2019
£3.7m
46%
Distribution
Channels
£2.1m
28%
12 | H1 2020 | INTERIM RESULTS
STRATEGIC PRIORITIES
STRATEGIC PRIORITIES
Accelerating Digital delivery | ✓ |
Growth in value per customer | ✓ |
Growth in higher value customers | ✓ |
Effective cost control | ✓ |
Capital & Cash efficiency | ✓ |
14 | H1 2020 | INTERIM RESULTS
DIGITAL ACCELERATION
Regulatory | Qualifications | Adviser & | Financial | Product and fund | Suitability and | |||||
Services | and training | company data | Planning | research and | client reporting | |||||
ratings | ||||||||||
Fintech & services platform
Enhanced services
Increased products per customer
Improved margin
15 | H1 2020 | INTERIM RESULTS
RESILIENTDIGITAL
PERFORMANCEACCELERATION
Resilient trading | Digital delivery to all customers |
Preserved scale and quality earnings | Improved customer journey |
Strong margin | Digital platform for growth |
FULL YEAR EPS NO LESSTHAN 11.0p
16 | H1 2020 | INTERIM RESULTS
APPENDICES
Business overview (18-22) Market drivers (23-25) Revenue model (26-30) Product mix (31-33)
PROVEN MANAGEMENT TEAM
M A T T T I M M I N S | N E I L S T E V E N S | G A R E T H H A G U E |
Joint CEO | Joint CEO | Group Finance Director |
Joined the Group as Marketing Director at inception in 2002
Appointed Joint Managing Director in May 2010
Joined the Group in 2003 | Joined the Group in 2016 as |
Appointed Joint Managing | Group Financial Controller |
Director in May 2010 | Appointed Group Finance |
Director in April 2018 |
NON-EXECUTIVE DIRECTORS
K E N D A V Y | T I M C L A R K E | G A R Y H U G H E S |
Non-Executive Chairman | Non-Executive Director | Non-Executive Director |
18 | H1 2020 | INTERIM RESULTS
UK FINANCIAL SERVICES - AN INTERMEDIATED MARKETPLACE
A HIGHLY FRAGMENTED MARKET WITH REGULATORY AND DISTRIBUTION CHALLENGES
Manufacturer /
Product
Provider
Communicate
performance track
record
Due | Technology | |
Diligence / | ||
buy lists | Grant | integration |
agencies | ||
Consumer | ||
insights | Face to Face | |
personal selling |
Educate and train
intermediaries Research the intermediated client
market
Communicate
brand messagesProduct appropriateness
Communicate product / fund information
Financial
Intermediaries
Meet regulators
requirements
Investment | GDPR | Taxation | ||
compliance | and trusts | |||
research | knowledge | |||
Access | Marketing | |||
to PII | ||||
Gather and process | Access to | Consumers | ||
customer and | competitive | |||
product data | products |
Competency Product
testingResearch
Fintech platform
Open agencies with
manufacturers
Est. 80% of UK Retail Asset Management sales are intermediated £197bn in 2018*
Est. 70%+ of UK Mortgages sales are intermediated est. £187bn in 2018**
19 | H1 2020 | INTERIM RESULTS
*Source: The Investment Association, 2019 **Source: UK Finance
MARKET ENABLER
PROVIDING ESSENTIAL SERVICES TO THE SUPPLY-SIDE AND DEMAND-SIDE OF RETAIL FINANCIAL SERVICES
Regulatory | |||||||
expertise | |||||||
Consumer & | Product features | Product | Website | ||||
Market insight | & pricing data | marketing | |||||
Mappings | Fund | ||||||
platform | |||||||
Provide a panel | Investment | Reviews | |||||
Regulatory | |||||||
for Protection | product | Taxation | |||||
Compliance | |||||||
and GI products | integration | and trusts | |||||
Services | Centralised | ||||||
Specialists | |||||||
Provide a panel | Provide | Investment | |||||
Products | |||||||
Manufacturer / | for mortgage | home valuation | Process | PII broking | |||
with | |||||||
products | services | Financial | Consumers | ||||
Product | enhanced | ||||||
Intermediaries | Product | Provider | |||||
Provider | Distribute | terms | |||||
Deliver seminars | technical | agencies | |||||
marketing and | |||||||
and Events | Product and | information | umbrella | ||||
communications | |||||||
fund Research | |||||||
Fund | Software | Provide a panel | |||||
Data Information | Fintech | for investment | |||||
Reviews | Services | Back office | products | ||||
platform | |||||||
software | |||||||
20 | H1 2020 | INTERIM RESULTS
OUR LOCATIONS AND TEAMS
- 560 staff at 30/06/20
- Track record for recruiting and retaining talent across all business areas
- High level of staff retention, average tenure of 5 years
- Staff skill set and experience supports continued operational leverage
21 | H1 2020 | INTERIM RESULTS
DEFENSIVE GROWTH - BENEFICIARY OF CHANGING REGULATION
NEW SERVICE DEVELOPMENT TO RESPOND TO MARKET TRENDS, REGULATORY INTERVENTION AND MEETING ADVISER NEEDS…
22 | H1 2020 | INTERIM RESULTS
MARKET DRIVERS: INVESTMENT INTERMEDIARIES
HIGH QUALITY CUSTOMERS WITH STRONG GROWTH DRIVERS
- Strong customer growth
- Rapid digital adoption.
- Regulatory drivers increase demand
£6,000
£5,000
£4,000
£3,000
£2,000
£1,000
£-
G R O W I N G V A L U E O F H I G H Q U A L I T Y
I N T E R M E D I A R Y F I R M S
4725 | 4864 | 4970 | 5048 | 5131 |
2014 | 2015 | 2016 | 2017 | 2018 | ||||||
Commission £m | Fees / charges £m | |||||||||
Other revenue £m | Number of firms | |||||||||
Source: FCA Sector views 2020
23 | H1 2020 | INTERIM RESULTS
MARKET DRIVERS: PRODUCT PROVIDERS
HIGH QUALITY CUSTOMERS WITH STRONG GROWTH DRIVERS
- Intermediary Market is no.1 channel
- Data on and engagement with intermediaries are essential
£1,200Bn on
£420Bn non-
intermediary
workplace pensions
platforms
£116Bn pension | Intermediaries are | 13.4m mortgage |
the leading channel | ||
income drawdown | customers | |
to customers | ||
- Regulatory drivers increase demand
1.2m new
£1,414Bn
mortgages in 2019
outstanding
mortgage loans
Source: FCA Sector views 2020
24 | H1 2020 | INTERIM RESULTS
MARKET DRIVERS: REGULATORY CHANGE
REGULATORY DRIVERS ARE STRONG IN 2020/21
FROM DEAR CEO AND FROM FCA SECTOR VIEWS
Regulatory Drivers - | Regulatory Drivers - |
Intermediaries | Product Providers |
Advice Suitability | MiFID II |
Fees | Costs and Charges |
Defined Benefit Pensions | Investment Risk |
Senior Manager's Regime | Product Design |
25 | H1 2020 | INTERIM RESULTS
STRATEGIC PRIORITIES - GROWTH IN VALUE PER CUSTOMER
QUALITY CUSTOMER BASE WITH LATENT VALUE
- New customer wins focus on value per customer
26 | H1 2020 | INTERIM RESULTS
- Digitisation will increase services and fee income
Fee Income quartiles vs Services taken
7
6
5
4
3
2
1
0
CCC | Quartile 1 | Quartile 2 | Quartile 3 | Quartile 4 | |
Avg Annual Fees (£k) | Avg No of services | ||||
4
3.5
3
2.5
2
1.5
1
0.5
0
STRONG MARGIN WITH QUALITY EARNINGS
RESILIENT PERFORMANCE WITH ACCELERATED DIGITAL DELIVERY
- High-qualityrevenues delivered by a resilient business
- 58% Saas and recurring revenues
- Accelerated digital delivery is expected to increase SaaS and recurring revenues
REVENUE QUALI TY H1 2020
£8.0m | |||
27% | |||
£11.7m | £0.3m | ||
1% | |||
41% | |||
£8.9m
31%
Saas Recurring Repeat Other
27 | H1 2020 | INTERIM RESULTS
DIVISIONAL PERFORMANCE
INTERMEDIARY SERVICES
H1 2020 | H1 2019 | Growth | |
Revenue £m | 12.3 | 11.6 | 5.9% |
% Group | 43% | 40% | |
EBITDA £m | 2.4 | 2.3 | 3% |
% Group | 33% | 29% | |
Margin % | 19.6% | 20.2% |
All services in the division are provided to and paid for by financial intermediaries and employee benefit providers
Employee
Benefits
£1.7
14%
Software £2.7 22%
Additional
Services
£2.6
21%
Membership £5.3 43%
H1 2020 | % Division | Growth | Quality | Margin | ||
Membership | Intermediary member fees for support services | £5.3 | 43% | 4.4% | Recurring | High |
Additional Services | Additional compliance and business support | £2.6 | 21% | 9.0% | Recurring | Medium |
Software | Reseller and proprietary Fintech | £2.7 | 22% | 10.1% | SaaS | Medium |
Employee Benefits | Zest Fintech for EBCs, Providers and Employers | £1.7 | 14% | 1.0% | SaaS | Low |
£ figures in £m
28 | H1 2020 | INTERIM RESULTS
DIVISIONAL PERFORMANCE
DISTRIBUTION CHANNELS
H1 2020 | H1 2019 | Growth | |
Revenue £m | 9.2 | 13.3 | -30.8% |
% Group | 32% | 46% | |
EBITDA £m | 2.1 | 3.7 | -44% |
% Group | 28% | 46% | |
Margin % | 22.4% | 27.7% |
All services in the division are provided to and paid for by product providers and employee benefit providers
Marketing Services | Seminars and marketing content to advisers |
Mortgage Services | Mortgage club transaction fees on products |
Valuation Services | Property valuations for mortgage transactions |
Own Funds | Investment solutions |
Insurance Services | Commission income on product sales |
Insurance | ||
Services | ||
£1.0 | Marketing | |
Own | 11% | Services |
Funds | £2.6 | |
£1.2 | 28% | |
13% |
Valuation
Services
£2.1 | Mortgage | |||||
Services | ||||||
23% | ||||||
£2.3 | ||||||
25% | ||||||
H1 2020 | % Division | Growth | Quality | Margin | ||
£2.6 | 29% | -25.9% | Repeat | High | ||
£2.3 | 24% | -28.2% | Repeat | High | ||
£2.1 | 23% | -52.0% | Repeat | Low | ||
£1.2 | 13% | 1.6% | Repeat | High | ||
£1.0 | 11% | -3.1% | AUM | High |
£ figures in £m
29 | H1 2020 | INTERIM RESULTS
DIVISIONAL PERFORMANCE
FINTECH & RESEARCH -
EARNINGS ENHANCING RESULTS IN H1 2020
H1 2020 | H1 2019 | Growth | Other | |||
Revenue £m | 7.4 | 4.2 | 77.1% | |||
Services | ||||||
% Group | 25% | 14% | ||||
£0.3 | ||||||
EBITDA £m | 2.9 | 2.0 | 46% | 4% | ||
% Group | 39% | 25% | ||||
Margin % | 39.2% | 47.5% | ||||
Product | ||||||
Ratings | ||||||
All services in the division are provided by | Software | £3.5 | ||||
£3.6 | 48% | |||||
Defaqto | ||||||
48% | ||||||
H1 2020 | % Division | Growth | Quality | Margin | ||
Product Ratings | Research and ratings for financial products | £3.5 | 48% | 97% | Repeat | High |
Software | Fintech and data services | £3.6 | 48% | 86% | Saas | High |
Other Services | Bespoke project and consultancy | £0.3 | 4% | -41% | Medium |
£ figures in £m
30 | H1 2020 | INTERIM RESULTS
DELIVERING BETTER OUTCOMES FOR RETAIL FINANCIAL SERVICES
Membership | Marketing Services |
Additional services | Mortgage & Valuation Services |
Software | Insurance Panel |
Employee Benefits | Own products |
Market and product insights |
31 | H1 2020 | INTERIM RESULTS
DELIVERING BETTER OUTCOMES FOR RETAIL FINANCIAL SERVICES
INTERMEDIARY SERVICESDISTRIBUTON CHANNELS
Fintech | Ratings |
(Engage + CENTRA) | |
Fund Reviews | |
Research and Panels | |
Mappings | |
Data Services | |
Market Insights |
FINTECH & RESEARCH THAT INFORMS CONSUMERS, ADVISERS AND PRODUCT PROVIDERS
32 | H1 2020 | INTERIM RESULTS
POWERFUL ANALYTICS DATA
Firm data / | CPD / | Back Office / | Financial | Product and fund | Suitability | |||||
Regulatory | qualifications | CRM | Planning | comparison / | ||||||
return | and learning needs | journey | selection | |||||||
Detailed Intermediary and aggregated Consumer Insights
Asset Managers | Life & Pension Companies | Investment Platforms |
Product | Product | Sales & | Product | |||
Compliance | Optimisation | Marketing | Design | |||
Appropriateness | Competitor Analysis | Distribution Analysis | Needs Analysis | |||
THESE ARE EXAMPLES OF SERVICES AND TARGET CUSTOMERS WE CAN PURSUE
33 | H1 2020 | INTERIM RESULTS
DISCLAIMER
This presentation has been prepared by The SimplyBiz Group plc ("SimplyBiz" or the "Company") and the information contained herein is restricted and is not intended for distribution to, or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. In particular, the information contained herein is not for release, publication or distribution, directly or indirectly, in or into the United States, Australia, Canada, Japan, the Republic of South Africa or any other jurisdiction in which such release, publication or distribution would be unlawful.
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34 | H1 2020 | INTERIM RESULTS
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Simplybiz Group plc published this content on 15 September 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 September 2020 07:39:04 UTC