Saga Plc · LSE:SAGA
Saga — Investor Day (January 2015)
96 slides from Saga's investor day presentation, Jan 15, 2015
Slide 1: Capital Markets Day
Capital Markets Day 15 January 2015
Slide 2: Strategy
Strategy Lance Batchelor Chief Executive Officer
Slide 3: Today’s Agenda
Today’s Agenda 09.00 – 10.00 Lance Batchelor Introduction and Strategy CEO 10.00 – 10.45 Stuart Howard Financials, disclosure, Chief Financial Officer motor underwriting 10.45 – 11.15 BREAK 11.15 – 11.45 Roger Ramsden Insurance broking CEO Saga Insurance 11.45 – 12.15 Andrew Strong Travel CEO Saga T
Slide 4: What I have found
What I have found 1 A strong business model 2 Consistent financial delivery and cash generation 3 A growth demographic, unique database and a great brand 4 An excellent insurance business 5 A travel business at the heart of the brand 6 Scope for growth in personal finance 7 A strong team 4
Slide 5: What Saga does
Strong Business Model: 1 What Saga does Third party Suppliers Product Customers Insights Design In-house - Motor u/w - Shipping 5
Slide 6: Group Structure
Strong Business Model: 1 Group Structure Saga Insurance Saga Travel Personal Finance Saga Healthcare Saga Saga Saga Saga Credit Patricia Allied Savings Broking Underwriting Holidays Cruises Cards White’s Healthcare Equity Share Country Private Titan Destinology Release Trading Cousins Pay 6
Slide 7: Where our earnings come from
Strong Business Model: 1 Where our earnings come from Source of EBITDA* in 6m to 31 Jul 2014 Broked & Other Manufactured 26% 74% *Manufactured represents AICL Underwriting + Cruising Broked and Other represents Saga Services + Personal Finance + ClaimFast + DC + Saga Holidays + Titan + Healthcare +
Slide 8: Where the model works best
Strong Business Model: 1 Where the model works best Where a trusted brand is important Where we can differentiate our offer Where service levels play a key role Where our superior customer knowledge gives us a competitive edge Where cross-selling opportunities can flow from the initial relationship
Slide 9: Strong cash conversion from growing profits
Consistent financial delivery and cash generation: 2 Strong cash conversion from growing profits £250m 120% £200m 100% 80% £150m 60% £100m 40% £50m 20% £0m 0% 12m to 12m to 12m to 6m to 6m to Jan 2012 Jan 2013 Jan 2014 Jul 2013 Jul 2014 Trading EBITDA Available operating cash flow Available operatin
Slide 10: Saga’s unique database
Growth demographic, unique database & great brand: 3 Saga’s unique database Contactable Database 96% 11,000 Brand recognition 10,000 9,000 Million 10.6m 8,000 7,000 Contactable names 6,000 A powerful and efficient marketing machine 5,000 Jan 2004 Jul 2004 Jan 2005 Jul 2005 Jan 2006 Jul 2006 Jan 2007
Slide 11: An attractive place to operate
Growth demographic, unique database & great brand: 3 An attractive place to operate More than 22m people over 50 in the UK. Expected to grow a further 30% by 2033 35% of the population 40% of the population 75% 1993 2003 2013 2023 2033 2013-2033 Growth Homeowners crease c.7m in 29.1m 26.7m 18.1m 20.
Slide 12: Brand
Growth demographic, unique database & great brand: 3 Brand 12
Slide 13: An excellent insurance business
4 An excellent insurance business Strong broking Trading EBITDA Split For the 6 months to 31st July 2014 franchise (Total £114.5m) – Clear delivery in all Motor Motor Core UW areas Ancillaries £50.3m | 43.9% £11.9m | 10.4% – Home, PMI, Travel Other Market leading Broked motor underwriting £17.4m | 1
Slide 14: Travel at the heart of the Saga brand
5 Travel at the heart of the Saga brand Vital to the brand and to the customer experience Holidays Cruises 14
Slide 15: Solid base in personal finance
6 Solid base in personal finance Broad range of People over 50 hold: mainly broked 100% products and 90% services, including: 80% – Equity Release 77% 70% – Credit Cards 60% 66% 68% – Savings - £5bn 50% 44 of deposits 40% – Share trading 30% 20% An opportunity given 10% the demographics share of UK
Slide 16: Team
7 Team Lance Batchelor Stuart Howard Andrew Strong Roger Ramsden Tim Pethick David Slater Chief Executive Group Finance CEO, Travel and CEO, Insurance Chief Marketing Group Chief Officer Director Personal Finance Officer Actuary 16
Slide 17: However…
However…
Slide 18: More to be done
More to be done 1. Growth in the core business 2. Greater use of the database 3. Improved disclosure 4. Capitalise on our position in motor insurance 5. Growth in travel 6. Drive progress in personal finance 18
Slide 19: Saga Insurance, Saga Travel, Personal Finance, Saga Healthcare
Saga Insurance Saga Travel Personal Finance Saga Healthcare Saga Saga Saga Saga Credit Patricia Allied Savings Broking Underwriting Holidays Cruises Cards White’s Healthcare Equity Share Country Private Titan Destinology Release Trading Cousins Pay 19
Slide 20: Allied Healthcare
Allied Healthcare A quality business with solid financial performance Decision made to divest: – A B2B business, Saga is a B2C business – Very little overlap of customer base – No opportunity to differentiate Saga’s offer and deliver a premium service – Investment in technology and systems needed to
Slide 21: What we are going to do
What we are going to do
Slide 22: The Saga Strategy
The Saga Strategy Operate where our model works best Make more of our database Expand our footprint in Insurance Grow our travel business Expand our personal finance offering Continue to drive innovation ple 92
Slide 23: Simple business model
Operate where our Model works best: 1 Simple business model Third party Suppliers Product Customers Insights Design In-house - Motor u/w - Shipping 23
Slide 24: Not one homogenous group
Make more of the database: 2 Not one homogenous group Understanding Segmentation Our target market Targeting Digital Marketing Resources effectively Adjacencies Meeting Cross Sell Customer needs 24
Slide 25: Motor Panel
Expanding our footprint in Insurance: 3 Motor Panel Historic underwriting focus – a great operation with a Motor 8.5% relatively narrow focus Market share Missing out on addressable (Of the over 50s ) * GfK NOP at 31 August 2014 ‘Saga customers’ 2.5m Motor policies sold* Broaden conversion opportuni
Slide 26: Making Progress
Grow our Travel Business: 4 Making Progress Tasked Andrew and his team to double EBITDA in five years from FY14 Refresh the existing business and understand what we can sell to whom: – New channels – New products – New brands Margin improvement Good progress already made 26
Slide 27: Personal Finance Opportunity
Expand our Personal Finance Offering: 5 Opportunity 68% UK household wealth Saga Trusted & credible 27
Slide 28: Wealth Management
Expand our Personal Finance Offering: 5 Wealth Management Launch of Saga Investment Services, in partnership with Tilney Bestinvest: – Harnesses complementary skills: Saga brand, database, customer understanding TBI systems, investment expertise, research, advisors, regulatory liability Inclusive pr
Slide 29: Examples
Continue to Drive Innovation: 6 Examples 29
Slide 30: Legal Services
Continue to Drive Innovation: 6 Legal Services Significant, but fragmented, market for legal services Successful launch phase completed, delivered through the broker model: – Saga designed products – Saga marketing to source customers 30,000 8,000 Quotes Instructions 30
Slide 31: Summary
Summary
Slide 32: Strategy
Strategy Strategy Balance Sheet Strategy Financial Outcome 1. Operate where our 1. Capital light 1. Profitable growth model works best 2. Cash generative • EBITDA 2. Make more of our database 3. Balanced and • Operating EPS sustainable growth 3. Expand our footprint 2. Progressive in Insurance divid
Slide 33: Financials
Financials Stuart Howard Chief Financial Officer
Slide 34: Key topics
Key topics 1 Increased disclosure for Insurance and Financial Services 2 Impact of expanding into Motor Insurance broking 3 Impact of Allied decision 4 More on our Motor Insurance underwriting capability 5 Summary of strategic impacts on cash flow/balance sheet 6 Trading update 34
Slide 35: Saga Plc consolidated P&L
Saga Plc consolidated P&L £m 6m to 6m to % 12m to 31 Jul 2014 31 Jul 2013 Growth 31 Jan 2014 Revenue: Motor Insurance 160.0 182.2 (12.2%) 355.2 Home Insurance 43.7 44.3 (1.4%) 90.5 Other Financial Services 49.0 48.2 1.7% 96.9 Total Financial Services 252.7 274.7 (8.0%) 542.6 Travel 176.5 161.7 9.2%
Slide 36: Increased disclosure for Insurance and Financial Services
Increased disclosure for Insurance and Financial Services 1 Financial Services overview Predominantly broking FS Trading EBITDA Split - £114.5m total and ancillary revenue For the 6 months to 31 July 2014 – 44% of EBITDA from Motor motor underwriting Ancillaries Motor core UW EBITDA from £11.9m | 10
Slide 37: New Motor Insurance disclosure
Increased disclosure for Insurance and Financial Services 1 New Motor Insurance disclosure 6m to 31 July 2014 6m to 31 July 2013 £m Core Ancillary Broking / Total Core Ancillary Broking / Total UW Other Motor UW Other Motor Revenue 123.7 17.8 18.5 160.0 142.9 20.9 18.5 182.2 Gross profit 62.8 15.7 6
Slide 38: Core Motor Insurance deep dive
Increased disclosure for Insurance and Financial Services 1 Core Motor Insurance deep dive £m 6m to 6m to 31 Jul 2014 31 Jul 2013 Expense Ratio Net earned premium 119.7 138.0 A 6m to 31 Jul 2014 Instalment income 1.8 2.6 Marketing costs (incl. aggregators) £4.1m Other operating 2.1 2.3 Document fulf
Slide 39: New Home Insurance disclosure
Increased disclosure for Insurance and Financial Services 1 New Home Insurance disclosure 6m to 31 July 2014 6m to 31 July 2013 £m Ancillary Broking / Total Ancillary Broking / Total UW Coinsured Home UW Coinsured Home Revenue 8.0 35.7 43.7 8.0 36.2 44.3 Gross profit 5.5 35.4 40.9 6.1 36.1 42.2 Oper
Slide 40: New Other Financial Services disclosure
Increased disclosure for Insurance and Financial Services 1 New Other Financial Services disclosure 6m to 31 July 2014 6m to 31 July 2013 £m Core Broking / Total Core Broking / Total UW Other Other FS UW Other Other FS Revenue 20.4 28.5 49.0 21.9 26.3 48.2 Gross profit 1.8 28.5 30.4 1.8 26.3 28.1 Op
Slide 41: Summary of Financial Services
Increased disclosure for Insurance and Financial Services 1 Summary of Financial Services 6m to 31 July 2014 6m to 31 July 2013 £m Core Ancillary Broking Total Core Ancillary Broking Total UW UW / Other FS UW UW / Other FS Gross revenue 144.1 26.1 163.4 333.7 164.8 29.2 148.0 341.9 Revenue 144.1 25.
Slide 42: Impact of expanding into Motor Insurance broking
Impact of expanding into Motor Insurance broking 2 Impact of expanding into Motor Insurance broking 6m to 31 July 2014 £m Core Ancillary Broking / Total UW Other Motor Revenue 123.7 17.8 18.5 160.1 Gross profit 62.8 15.7 6.8 85.4 Operating expenses (20.3) (3.8) (2.6) (26.7) Investment return 6.0 0.0
Slide 43: Impact of Allied decision
Impact of Allied decision 3 Impact on financials Going forward, Allied will: – No longer be treated as part of the continuing business – Be held for sale In the 2014/15 preliminary results, there will be a significant, one-off write-down of historic goodwill and potentially other related balance she
Slide 44: Impact of Allied decision: Restated interim results
Impact of Allied decision 3 Restated interim results Continuing Operations As Reported £m 6m to 6m to 12m to 6m to 6m to 12m to Jul 2014 Jul 2013 Jan 2014 Jul 2014 Jul 2013 Jan 2014 Revenue 440.1 447.7 895.5 583.5 607.1 1,209.3 Trading EBITDA 129.6 118.7 214.8 130.4 118.9 222.4 Operating profit 116.
Slide 45: Impact of Allied decision: Healthcare
Impact of Allied decision 3 Healthcare Continuing Operations As Reported £m 6m to 6m to 12m to 6m to 6m to 12m to Jul 2014 Jul 2013 Jan 2014 Jul 2014 Jul 2013 Jan 2014 Revenue 2.1 2.5 4.8 145.5 161.9 318.6 Gross profit 2.0 2.4 4.6 43.9 47.4 94.1 - Gross profit % 95.4% 96.3% 96.1% 30.2% 29.3% 29.5% T
Slide 46: Delivery of quality underwriting
More on our Motor Insurance underwriting capability 4 Delivery of quality underwriting Track record Data quality Effective pricing Efficient claims handling Focus on over 50s: – The Saga Underwriting Business commenced writing business on 1 January 2004 – Separate from Saga Broking; management focus
Slide 47: Consistency of delivery
More on our Motor Insurance underwriting capability 4 Consistency of delivery Achieved profit every year Reported Profit as a % Target margin achieved even of Net Earned Premiums in 2009 and 2010: 16% – Identified personal injury issue 14% well ahead of many insurers 12% – Proactively addressed thro
Slide 48: Reported Combined Operating Ratio
More on our Motor Insurance underwriting capability 4 Track record Reported Combined Operating Ratio* 120% 105.9% 104.3% 99.8% 98.0% 98.4% 97.7% 92.2% 91.7% 89.3% 100% 20.4% 17.0% 88.4% 22.5% 18.8% 15.4% 16.6% 77.6% 16.1% 17.2% 80% 17.3% 21.0% 67.8% 21.0% 60% 21.4% 85.5% 87.3% 40% 77.3% 79.3% 82.2%
Slide 49: Data quality
More on our Motor Insurance underwriting capability 4 Data quality High quality data: – Fast, accurate and granular, for example Every item of data captured from each policy transaction (e.g. new business, adjustments etc.) is downloaded to the actuarial database overnight The actuarial claims datab
Slide 50: Focused pricing
More on our Motor Insurance underwriting capability 4 Focused pricing Rating analysis based on Saga Saga Motor customer experience – Aggregators perform similarly – Allows targeted pricing for this to other business: part of the market 6m to 31 Jul Loss Ratio Retention e.g. no upper age limit for 20
Slide 51: Excellence in risk pricing
More on our Motor Insurance underwriting capability 4 Excellence in risk pricing AA Motor Panel: – Met our target return every financial year – One of largest insurers on panel – Lowest loss ratio on the panel in 2012 and 2013 Saga Home: – Largest insurer on Saga Home panel1 – Loss ratio (to net pre
Slide 52: Conservative approach to reserving
More on our Motor Insurance underwriting capability 4 Conservative approach to reserving We do not want to suffer a significant loss on underwriting – We reserve on the available claims data together with known changes to legislation Consistent stream of reserve releases totalling £207m over 10 year
Slide 53: Analysis of current year claims costs
More on our Motor Insurance underwriting capability 4 Analysis of current year claims costs Saga Underwriting Reported Claim Cost 6 months to July 2014 Windscreen 1% Accidental Damage 19% Theft 1% Large Personal Injury 24% Third Party Damage 24% Small Personal Injury 31% 53
Slide 54: Best-in-class claims management
More on our Motor Insurance underwriting capability 4 Best-in-class claims management Attention to detail drives effective claims handling Claims handling costs ratio for private Very strong process at Own network garage motor (3-year average) first notification of loss Penetration of 95%+ Over £50
Slide 55: Personal injury claims management
More on our Motor Insurance underwriting capability 4 Personal injury claims management Used an external firm to benchmark our claims performance – Peer group which includes most of the key players in the UK motor market – Personal injury claims represent around 55% of claims costs – For 2013, Saga
Slide 56: Regulation and capital
More on our Motor Insurance underwriting capability 4 Regulation and capital Well capitalised insurer As at As at As at £m Jul 2014 Jul 2013 Jan 2014 Solo statutory solvency capital Total invested equity 156.7 164.6 161.2 Regulatory adjustments (17.0) (18.7) (17.4) Total regulatory capital resource
Slide 57: Investment portfolio
More on our Motor Insurance underwriting capability 4 Investment – low risk, stable return portfolio Stable returns in Investment portfolio as at 30 November 2014 recent years Portfolio just below Hedge funds Senior secured loans £700 million 2% 3% Property Infrastructure Average duration of 7% 1% i
Slide 58: Underwriting summary
More on our Motor Insurance underwriting capability 4 Underwriting summary We are a high quality and conservative underwriter Met target return every year Delivering high quality pricing and effective and efficient claims handling We do not expect Solvency II to result in additional capital being pu
Slide 59: Balance sheet strategy
Summary of strategic impacts on cash flow/balance sheet 5 Balance sheet strategy Strategy is focused on developing broking / capital light model Deleveraged rapidly from 3.1x EBITDA at IPO to 2.5x as at 31 July 2014 Dividend for 2014/15 expected to be at top end of 40-50% of the Group’s net income,
Slide 60: Trading update
6 Trading update Overall trading in line with market expectations • Strong underwriting performance, reserve releases similar to last year • Revenues slightly lower than H1, as lower premiums earn through Motor • Seasonality – claims costs higher in second half of year • Expect good earnings growth
Slide 61: Saga Insurance
Saga Insurance Roger Ramsden Chief Executive Officer
Slide 62: Saga Insurance, Saga Travel, Personal Finance, Saga Healthcare
Saga Insurance Saga Travel Personal Finance Saga Healthcare Saga Saga Saga Saga Credit Patricia Allied Savings Broking Underwriting Holidays Cruises Cards White’s Healthcare Equity Share Country Private Titan Destinology Release Trading Cousins Pay 62
Slide 63: The Broker Model
The Broker Model Third Party Underwriters Product Customers Insights Design Insurance Broking In-house Underwriting Saga customer service standards 63
Slide 64: The Broker Model
The Broker Model My focus as the broker is the customer and efficient customer delivery Saga Broker Underwriter Best priced product Revenue Customer to our specification Insight In-house Panel Product design Risk price Market price Costs Channel: Underwriting Contact centre / Online Claims Policy ad
Slide 65: Saga Insurance – financials
Saga Insurance – financials FS Trading EBITDA Split - £114.5m total* For the 6 months to 31 July 2014 Motor Ancillaries Motor core UW £11.9m | 10% £35.7m | 31% Other FS Other Core UW broked £1.5m | 1% £17.4m | 15% Home broked Home UW Co-insured Ancillaries £23.7m | 21% £5.3m | 5% Motor Motor Core UW
Slide 66: Saga Insurance – contribution
Saga Insurance – contribution Financial Services new names by product Market shares (12m to 31 January 2014 – total c.420k) 200 6.8% 180 Home1 160 140 120 8.5% 100 Motor1 80 60 7.8% 40 PMI2 20 0 Motor Home Other 4 5.5% Travel3 Notes 1. GfK NOP at 31 August 2014 3. TGI and company data at 30 2. TGI,
Slide 67: Fresh look at the Saga Broker business
Fresh look at the Saga Broker business Strengths Opportunities 1 Highly profitable / strong margins Expand customer base through 1 Motor panel 2 Customer insight 2 Continued growth in Travel 3 Product design Insurance and PMI 4 Efficient 3 Expand the product offer 5 Flexible sourcing options 4 Maxim
Slide 68: Customer insight drives product and service
2/3 Customer insight drives product and service Product differentiation Service differentiation Motor Emergency ‘any driver’ cover Bereavement service – 50k+ calls p.a. Home Extended unoccupancy cover Claims intervention – 24k customers in 2014 Travel No upper age limit UK only call centres PMI Rang
Slide 69: Maximum marketing efficiency
4 Maximum marketing efficiency Database helps drive Saga’s best in class acquisition costs Motor Insurance: Commission and Acquisition Expenses Ratios1 £m (2013A)2 13 12 34 126 49 50 122 27 89 152 225 121 21.8% Ratio (3-yr average)3 16.3% 17.6% 13.6% 15.2% Average 9.9% 11.1% 12.3% 6.0% 13.0% 7.2% 8.
Slide 70: Home broking – current position
6 Home broking – current position Cumulative membership of Home Panel The competitive dynamics of the 14 15 16 panel have been driven by: 11 12 13 10 9 – Quality and attractiveness of Saga’s book, with 1.2m policies – Introduction of new underwriting Launch (July Dec-10 Oct-11 Feb-12 Dec-12 Nov-13 A
Slide 71: Opportunities
Opportunities 1 Expand customer base through Motor panel 2 Continued growth in Travel Insurance and PMI 3 Expand the product offer 4 Maximise the digital channel 5 Further efficiencies 71
Slide 72: Expand Customer base through Motor Panel
1 Expand Customer base through Motor Panel Proportion of quotes and sales according to propensity of In-house risk to be 'best price' on an aggregator underwriter is 70% very effective but has a relatively 60% Saga narrow risk Underwriting Strength appetite: 50% Proportion of Sales Likes low 40% mil
Slide 73: Expand Customer base through Motor Panel
1 Expand Customer base through Motor Panel 1. Experience through open market panel – Saga Select growth 2. Strength of the Saga brand – over AICL share of Home in force policies 60% of aggregator sales are 30th Nov 2014 achieved when Saga is not the 25% cheapest price 3. Saga is low cost distributio
Slide 74: Continued growth in Travel Insurance and Private Medical Insurance
Continued growth in Travel Insurance and 2 Private Medical Insurance Travel total sales volumes by year Travel Insurance 300,000 250,000 Tailored product to meet the needs of the over 50s 200,000 traveller: 150,000 100,000 50,000 – No upper age limit 0 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13
Slide 75: Expand the product offer
3 Expand the product offer Recent examples: Saga branded Motorcycle Motorbike Insurance sales volumes 12000 Landlord insurance 10000 Opportunity identified through customer interaction 8000 6000 and database analysis. 4000 2000 Bespoke Landlord product developed: 0 12/13 13/14 14/15 – Multiple polic
Slide 76: Maximise the digital channel
4 Maximise the digital channel We have a growing online presence Opportunity driving efficiency: Upsell of add-ons Saga Motor channel mix Saga Home channel mix 100% 100% Cross sell 90% 80% 90% 80% insurance 70% 70% 60% 60% 50% 40% 50% Group cross sell 40% 30% 30% 20% 10% 20% 10% Contact centre 0% 0%
Slide 77: Drive efficiency
5 Drive efficiency Excellent record of improving broker Operational excellence delivery by year* efficiency ‘m Price optimisation 18.0 Contact centre productivity 16.0 Marketing efficiency 14.0 Product development 12.0 Supply chain management 10.0 8.0 Case study: Application of speech analytics 6.0
Slide 78: Summary
Summary 1 Expand customer base through Motor panel 2 Continued growth in travel insurance and PMI 3 Expand the product offer 4 Maximise the digital channel 5 Further efficiencies
Slide 79: The broking business can grow
The broking business can grow Today Broking Motor Home New Operational Broking Launch of Digital EBITDA market (-) panel products excellence EBITDA panel 79
Slide 80: Travel & Personal Finance
Travel & Personal Finance Andrew Strong Chief Executive Officer
Slide 81: Saga Insurance, Saga Travel, Personal Finance, Saga Healthcare
Saga Insurance Saga Travel Personal Finance Saga Healthcare Saga Saga Saga Saga Credit Patricia Allied Savings Broking Underwriting Holidays Cruises Cards White’s Healthcare Equity Share Country Private Titan Destinology Release Trading Cousins Pay 81
Slide 82: Four key business areas
Four key business areas Holidays Cruises Founded 1951 First voyage 1997 – Saga Rose Package holidays around the World Niche operator with 2 owned ships Average passenger age: 73 Small ships 119k Passengers Personal service £168M Revenue Average passenger age: 76 23k Passengers/315k Passenger Days £7
Slide 83: What works well in Travel
What works well in Travel Attractive proposition to a key market segment Tour operating business model – no commitment, flexible, resilient Service excellence 83
Slide 84: Our businesses are voted number one by customers & suppliers
Our businesses are voted number one by customers & suppliers Travel Trade Gazette Which ? Travel Trade Gazette Best Escorted Tour Recommended Cruise Luxury Travel Agency Operator 2014 Company 2014 of the Year 2014 Travel Network Group Cruise International Best Touring Operator Best Value for Money o
Slide 85: Most awarded at the British Travel Awards
Most awarded at the British Travel Awards 85
Slide 86: What works well in Travel
What works well in Travel Attractive proposition to a key market segment Tour operating business model – no commitment, flexible, resilient Service excellence High levels of customer satisfaction and repeat business A passionate team dedicated to both Saga and its customers 86
Slide 87: Improvements
Improvements 1 A drive and appetite for growth 2 Realising the potential of the Saga Group Database 87
Slide 88: Evolving the customer proposition
Evolving the customer proposition Attitude to Life Worriers Planners Connectors Experiencers Maximisers Buying Motivations Low prices Flexibility Reputation Personal care Expert service 88
Slide 89: Improvements
Improvements 1 A drive and appetite for growth 2 Realising the potential of the Saga Group Database 3 Digital presence 4 Net margin improvement 5 Next generation of cruise proposition & profitability 89
Slide 90: Progress to date
Progress to date 6m to Growth 6m to 12m to Jul 2014 Jul 2013 Jan 2014 Revenue: Holidays £133.2m 7.8% £123.6m £256.8m Cruising £43.3m 13.6% £38.1m £74.2m £176.5m 9.2% £161.7m £331.0m Gross Profit: Holidays £29.1m 7.0% £27.2m £56.1m Cruising £8.6m 91.6% £4.5m £6.1m £37.7m 19.0% £31.7m £62.2m Gross Pro
Slide 91: Future key initiatives
Future key initiatives Cruises Holidays Increased capacity Build trade sales volume Grow Third Party Cruise Launch third party ‘Holiday World’ Continued optimisation of revenue New product innovation management Optimisation of digital platform Optimisation of digital platform Building brand consider
Slide 92: Future key initiatives
Future key initiatives Building brand awareness New product launches New website launch Exploiting the database Exploiting the database Increased marketing efficiency Pilot ‘Net Margin’ initiative & focus New product launches Launch ‘Lite’ product 92
Slide 93: Future growth: Doubling EBITDA within five years
Future growth: Doubling EBITDA within five years Existing Underlying Third Trade Potential New Acquisitions FY2014 Growth Party Sales FY19 Cruise Cruises Capacity 93
Slide 94: Conclusions
Conclusions Lance Batchelor Chief Executive Officer
Slide 95: Conclusions
Conclusions 1 Clarity on the business model 2 Scope for growth in the core business 3 Commitment to innovation 4 Consistent profit growth driving cash generation
Slide 96: Q&A
Q&A