Personal Group Holdings Plc · LSE:PGH
Personal — H1 2019 Earnings Presentation
33 slides from Personal's earnings presentation, September 2019
Slide 1: Interim Results
PERSONAL GROUP INTERIM RESULTS For the six months ended 30 June 2019 September 2019 DEBORAH FROST| CHIEF EXECUTIVE MIKE DUGDALE| CHIEF FINANCIAL OFFICER
Slide 2: Financial Highlights
FINANCIAL HIGHLIGHTS Group revenue of £30.0m (2018: £21.1m) h 42% o Includes £7.4m transactional spend and commission on Hapi (2018: £1.1m) EBITDA of £4.5m (2018 : £4.8m) i 5% Profit before tax of £4.1m (2018 : £3.9m) h 6% Basic EPS of 11.4p (2018 : 10.5p) h 9% Balance sheet remains strong with cash
Slide 3: Our Strategic Direction
PERSONAL GROUP OUR STRATEGIC DIRECTION DEBORAH FROST| CHIEF EXECUTIVE
Slide 4: Long-Term Growth Potential
LONG-TERM GROWTH POTENTIAL “Insurance is the beating heart of our business. We intend to keep it that way” Clear opportunity to disrupt core market with ‘low/no-cost’ Hapi employee benefits, and linking insurance proposition to social purpose and employee need. Market is significant but acquisition
Slide 5: Personal Group – How We Make Money
PERSONAL GROUP – HOW WE MAKE MONEY SaaS Insurance business - softening from peak policyholder population in 2015 SaaS – growing through new client Insurance acquisition for Hapi, Innecto consultancy and Sage channel into SME market launched Let’s Connect – significant future Let’s growth potential C
Slide 6: Personal Group – Key Agenda
PERSONAL GROUP – KEY AGENDA 1. Grow the insurance business by widening our accessible market to include ‘gig’ economy for current and new clients, improving attractiveness of offer to employers and policyholders and retaining more policyholders for longer 2. Use ‘low/no-cost’ Hapi as a disrupter to
Slide 7: Personal Group – Markets
PERSONAL GROUP – MARKETS HEARTLAND PUBLIC SECTOR Large industrial employer. High High employer-paid risk cost sensitivity benefits. Low employer budgets SOLUTION: LOW/NO-COST LARGE SOLUTION: LOW/NO-COST HAPI WITH FACE TO FACE PUBLIC HAPI WITH LET’S CONNECT INDUSTRIAL INSURANCE SALES MARKET SECTOR SA
Slide 8: Personal Group – Execution
PERSONAL GROUP – EXECUTION SEGMENT INSURANCE LET’S CONNECT SAAS Develop new insurance Clear market proposition SIMPLY HAPI: new product which engages and excellent web-based opportunities with employers. Distribute service delivery model – talent-driven, less price- products through new can scale wi
Slide 9: Be Famous, Be Irresistible, Be Dependable
OUR EXECUTION CHARACTERISTICS BE FAMOUS – “what’s our dent in the universe?” – Steve Jobs BE IRRESISTIBLE – drawing clients and customers towards us through better meeting BE BE their needs and adapting to changing environment FAMOUS IRRESISTIBLE BE DEPENDABLE – keeping our promises and getting it r
Slide 10: Long-Term Growth Potential
LONG-TERM GROWTH POTENTIAL “Insurance is the beating heart of our business. We intend to keep it that way” Clear opportunity to disrupt core market with ‘low/no-cost’ Hapi employee benefits, and linking insurance proposition to social purpose and employee need. Market is significant but acquisition
Slide 11: Financial Performance
PERSONAL GROUP FINANCIAL PERFORMANCE Six months ended 30 June 2019 MIKE DUGDALE| CHIEF FINANCIAL OFFICER
Slide 12: Group Results
GROUP RESULTS Jun-19 Jun-18 Growth £000 £000 % Revenue * 30,030 21,089 42.4 EBITDA** 4,516 4,755 (5.0) Operating profit 3,611 3,954 (8.7) Profit before tax 4,092 3,874 5.6 Tax 547 646 (15.3) Profit for the period 3,545 3,228 9.8 * Includes £7.4m transactional spend and commission on Hapi (2018: £1.1
Slide 13: Segmental Analysis
SEGMENTAL ANALYSIS Jun-19 Jun-18 Growth £000 £000 % Total Revenue Insurance 15,152 15,605 (2.9) Let's Connect 5,830 3,264 78.6 SaaS 8,839 2,008 340.2 Other 209 212 (1.4) Total 30,030 21,089 42.4 EBITDA Insurance 3,859 4,623 (16.5) Let's Connect 252 (256) N/A SaaS 295 336 (12.2) Other 110 52 111.5 To
Slide 14: Insurance
INSURANCE Earned premium of £15.2m marginally down on prior year (2018: £15.6m) New insurance sales of £4.6m (2018: £5.6m) lower than expected due to the slowing down of new business wins over last 12 months. This will impact earned premium in latter part of 2019 and into 2020; however potential new
Slide 15: SaaS
SaaS Strong revenue growth of 341% to £8.8m (2018: £2.0m) driven by £7.4m transactional spend and commission on Hapi (2018: £1.1m) EBITDA flat at £295k (2018: £336k) caused by delays in the launch of Sage to early September 2019 Hapi Bringing the supply chain in house has proven successful, improvin
Slide 16: SaaS cont'd
SaaS cont’d/ Innecto Successful acquisition completed 28 February 2019 Total purchase consideration £3.2m, goodwill £2.0m, identifiable assets on acquisition £1.2m New business wins since acquisition in excess of £0.6m (comparable period in 2018: £0.4m) £1.2m pipeline at 30 June (30 June 2018: £0.8m
Slide 17: Let's Connect
LET’S CONNECT Revenue up 79% to £5.8m (2018: £3.3m) EBITDA of £0.25m (2018: loss of £0.25m) Strong start to the year, particularly from Royal Mail and 9 new wins over the period (2018: 4) Pipeline for the second half looks strong Increased ability to cross-sell following Innecto acquisition Explorin
Slide 18: Significant Shareholders
SIGNIFICANT SHAREHOLDERS % Christopher Johnston 37.4 Miton Asset Management Limited 13.1 Investec Wealth & Investment Limited 6.3 Royal London Asset Management Ltd 5.6 Chelverton Asset Management Ltd 5.0 Other directors, staff and SIP Trust 1.2 Source: NASDAQ (as at 30 June 2019) 18
Slide 19: Summary
SUMMARY Solid start to the year, with trading in line with management’s expectations at the half year Successful acquisition of Innecto in Q1 already producing benefits from a more integrated offering and stronger sales and marketing capability Looking ahead as a UK-centric business we believe that
Slide 20: Appendices
PERSONAL GROUP APPENDICES
Slide 21: Summary Income Statement
SUMMARY INCOME STATEMENT Better / Jun-19 Jun-18 (worse) £’000 £’000 £’000 Net premiums earned 15,156 15,611 (455) Less: claims incurred (3,397) (3,730) 333 Insurance underwriting profit 11,759 11,881 (122) Other income 151 178 (27) Salary Sacrifice profit 193 (306) 499 SAAS profit 287 402 (115) Othe
Slide 22: Earned Premium
EARNED PREMIUM 35.0 30.0 25.0 20.0 H2 H1 15.0 10.0 5.0 0.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 22
Slide 23: New Business Insurance Sales Ratios
NEW BUSINESS INSURANCE SALES RATIOS 2019 2018 2017 2016 2015 Enrolled to presented % 52% 52% 52% 51% 54% Acquisition cost of £100 API* 85 76 69 72 72 Av API* per employee enrolled 265 256 237 232 210 Group account exec average daily API* 1,167 1,169 1,207 1,145 1,100 * Annualised Premium Income 23
Slide 24: Earned Premium and Claims
EARNED PREMIUM AND CLAIMS Jun-19 Jun-18 PHP DB Other Total PHP DB Other Total £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 Earned premium 11,823 3,249 84 15,156 12,253 3,254 104 15,611 Claims (2,549) (471) (377) (3,397) (2,815) (599) (316) (3,730) 9,274 2,778 (293) 11,759 9,438 2,655 (212) 11,881
Slide 25: EBITDA Reconciliation
EBITDA RECONCILIATION Jun-19 Jun-18 £000 £000 Profit before tax 4,092 3,874 Interest costs 68 72 Let's Connect - amortisation 53 165 Share-based payments 9 76 Depreciation 460 396 Amortisation (other) 199 172 Corporate acquisition costs 177 - Let's Connect - release of tax provision (542) - EBITDA 4
Slide 26: Summary Balance Sheet
SUMMARY BALANCE SHEET Increase / Jun-19 Dec-18 (Reduction) £’000 £’000 £’000 Tangible fixed assets (buildings, cars,computer, FF&F) 6,190 6,040 150 Intangible fixed assets (computer software) 1,233 500 733 Investment properties 130 130 - Equity - accounted investee 58 50 8 Financial assets 2,792 2,5
Slide 27: Dividend Record 2008 – 2019
DIVIDEND RECORD 2008 – 2019 Continuation of progressive dividend * Third quarterly dividend of 5.825p will be paid on 20 September 2019 27
Slide 28: Personal Group – Wellbeing at Work
PERSONAL GROUP – WELLBEING AT WORK At a glance Our heartland is working with large industrial clients employing individuals who don’t drive a desk We offer insurance products to protect individual employees – often for companies who don’t provide death in service or sick pay We protect the unprotect
Slide 29: Personal Group – You Can Lean on Us
PERSONAL GROUP – “YOU CAN LEAN ON US” At a glance Our values are based on a 35 year history of working with policyholders to provide income protection to help with the unexpected. If they go into hospital, or the worst happens, Over we pay out. 130,000 Our insurance products are simple, fixed policy
Slide 30: SMT Bio
SMT BIO Deborah Frost * Mike Dugdale * Andy Lothian * Group Chief Executive Chief Financial Officer Managing Director PGB Sales Appointed Date Appointed Date Appointed Date September 2015 (Appointed CEO 28 January 2013 July 2017 (employee since 1998) February 2019) Experience Experience Experience P
Slide 31: SMT Bio
SMT BIO Sarah Mace * Ashley Doody Rebekah Tapping Dr Lee Williams Group Financial Controller and Chief Information Officer Group HR Director Chief Commercial Officer Company Secretary Appointed Date Appointed Date Appointed Date Appointed Date May 2013 January 2015 May 2019 April 2014 Experience Exp
Slide 32: Board Bio
BOARD BIO Mark Winlow Ken Rooney Bob Head Maria Darby-Walker Non Executive Chairman Non Executive Director and Deputy Non Executive Director Non Executive Director Chairman Appointed Date Appointed Date Appointed Date May 2016 (Non Executive October Appointed Date November 2016 June 2019 2013) July
Slide 33: Our History
OUR HISTORY wospiraL 6 PLAN LAUNCHED Personal Group ~ Holding’s Ple DEATH BENET 9 EMPLOVEE AN LAUNERED NEFITS Ds ne T au ached i PN ae 1980's 2 1990 > © CONVALESCENCE aM LAW LAUNCHED: eee a 30 YEARS ' * ee sorte na let'sconnect es ee + (noo: : fs = >> <> > rile The Future
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