Moonpig Group Plc · LSE:MOON
Moonpig — H1 FY2022 Earnings Presentation
34 slides from Moonpig's earnings presentation, Dec 9, 2021
Slide 1: Half Year Results Presentation
Half Year Results Presentation Six months ending 31 October 2021 9 December 2021 Strictly Private and Confidential
Slide 2: Disclaimer
Disclaimer This presentation and the discussion which follows it may include certain forward-looking statements with respect to the business, strategy and plans of the Company (together with its subsidiaries, the “Group”) and its current goals and expectations relating to its future financial condit
Slide 3: Agenda
Agenda 1 Overview – Nickyl Raithatha 2 Financial performance – Andy MacKinnon 3 Strategic progress – Nickyl Raithatha 3
Slide 4: Strong results and continued growth in gifting share of revenue
Strong results and continued growth in gifting share of revenue 1 Revenue and Adjusted EBITDA more than doubled across two years, confirming that we have delivered a transformation in scale Continued growth in gifting share of revenue to 48%, reflecting ongoing 2 progress in our strategy to become t
Slide 5: Becoming the Ultimate Gifting Companion
Becoming the Ultimate Gifting Companion Ensuring the perfect range of cards and gifts for every occasion Creating better, more personal, Building our brands so connections receiving our product between people always means more that care about each other Leveraging data and technology to make the gif
Slide 6: A compelling growth runway with three compounding drivers
A compelling growth runway with three compounding drivers Value drivers 72% of occasions where a gift is purchased alongside a card1 × Gift Attach 23 total cards per year2 Volume drivers × Share of Wallet 53.8m total card customers in our markets3 Customer Acquisition 1 UK Singles Card Purchases in
Slide 7: Financial performance
Financial performance Andy MacKinnon 7
Slide 8: Strong H1 financial results and a step-change in scale
Strong H1 financial results and a step-change in scale Strong H1 revenue H1 Adjusted EBITDA Further growth in performance margin rate maintained gifting revenue mix £142.6m 24.5% 47.5% Revenue Adjusted margin2 Gifting revenue mix +115% £35.0m +3.3%pts Two year growth1 Adjusted EBITDA2 Year on year g
Slide 9: Orders have more than doubled across two years
Orders have more than doubled across two years Total Orders Average Order Value m £ / order +104% +6% • 19.5m orders, which includes the impact of elevated frequency as customer behaviour normalises following the end of lockdown restrictions • AOV growth at 3% YoY driven by attached gifting, offset
Slide 10: We have driven revenue from existing customers to 89% of total
We have driven revenue from existing customers to 89% of total Revenue from New and Existing Customers £m Existing customers 83% 84% 79% 89% % total revenue • Repeat behaviour of customers acquired during lockdowns is consistent with historical cohorts • Underpinned by management action to drive app
Slide 11: We are driving an increasing proportion of revenue from gifting
We are driving an increasing proportion of revenue from gifting Gifting Revenue Mix % of total revenue • Further growth in gifting revenue mix driven by: • Broadening merchandise offering • Optimising digital user experience • Better leveraging data to produce more personalised gifting recommendatio
Slide 12: H1 revenue includes £16m in respect of elevated frequency
H1 revenue includes £16m in respect of elevated frequency Moonpig Group Revenue £m • Recent data points gives us confidence that we will exit FY22 with a frequency uplift of c. 15% in the UK compared to pre-lockdown, ahead of our previous expectations. This is driven by initiatives such as app migra
Slide 13: Two year revenue growth of 130% at Moonpig and 78% at Greetz
Two year revenue growth of 130% at Moonpig and 78% at Greetz Moonpig and Greetz Revenue H1 FY22 H1 FY22 £m 2 Year % YoY % Group growth 115% -8% Greetz growth 78% -3% • Group revenue growth at +115% across Moonpig growth 130% -10% two years • Successful application of the Moonpig strategy and operati
Slide 14: Significant step up in gross profit over two years
Significant step up in gross profit over two years Gross Profit £m, % of total revenue Group gross margin 53% 52% 49% • The trend in gross margin rate at Moonpig reflects: • Growth in attached gifting mix at lower than average gross margin rate. Higher gifting sales drive absolute gross profit • Pro
Slide 15: Adjusted EBITDA margin rate maintained following lockdown
Adjusted EBITDA margin rate maintained following lockdown Adjusted EBITDA £m, % of total revenue Group margin rate 22.7% 26.4% 24.5% • Adjusted EBITDA margin rate held at 24.5% Greetz margin rate 2.4% 14.5% 21.0% • The year-on-year reduction in Moonpig’s Moonpig margin rate 31.0% 29.9% 25.6% Adjuste
Slide 16: Operating cash conversion reflects the unwind of high April trade payables
Operating cash conversion1 reflects the unwind of high April trade payables Adjusted EBITDA to Cash Conversion • Operating cash conversion at 38% reflects 6 months 6 months 6 months seasonality in working capital and the unwind of £m to Oct to Apr to Oct high trade payables at 30 April 2021 related
Slide 17: Net debt of £113m as at October 2021, with net leverage of 1.3x
Net debt of £113m as at October 2021, with net leverage of 1.3x Net increase in cash £m • Closing net debt of £113m as at October 2021 (April 2021: £115m) • Net debt to LTM Adjusted EBITDA of 1.3x • Comfortably below the 2.0x net leverage commitment made at IPO 1 1 Adjusting items relate to pre-IPO
Slide 18: Capital allocation priorities remain unchanged
Capital allocation priorities remain unchanged Organic investment 1 M&A 2 Shareholder returns 3 to drive growth Marketing • Relevant, value-accretive M&A • Do not intend to pay a dividend as • Customer acquisition opportunities we continue to invest in growth • Promotional activity for app • Will co
Slide 19: Current trading, outlook and guidance
Current trading, outlook and guidance • Group annual revenue for FY22 is now expected to be at the upper end of the previous guidance range of between approximately £270 million and £285 million. This includes approximately £20 million that is non-recurring as it relates to elevation in frequency ab
Slide 20: Strategic progress
Strategic progress Nickyl Raithatha 20
Slide 21: Our three compounding growth drivers
Our three compounding growth drivers × × Customer Share of Gift Acquisition Wallet Attach 21
Slide 22: Market-leading online brand awareness, which continues to rise
CUSTOMER ACQUISITION Market-leading online brand awareness, which continues to rise Brand awareness remains at Vast majority of traffic comes A customer base an all time high from brand that loves our brands Group Traffic by Channel - H1 FY22 +7% 4.8 4.3 2 Moonpig prompted 2 brand awareness (Sep 21
Slide 23: Focussed campaigns driving customers into new moments
CUSTOMER ACQUISITION Focussed campaigns driving customers into new moments Diwali Thank You • Global Design Platform now has 33,000 card designs • We have the perfect card for a wide range of customer moments • Campaigns focused around lower-volume missions drive range awareness and encourage habit
Slide 24: Further progress on Moonpig's journey to become app-first
SHARE OF WALLET Further progress on Moonpig’s journey to become app-first Rapidly growing UK eCommerce awards New personalised App penetration ‘App of the Year’ promotions engine launched App orders as % of total orders(3) 2.5m downloads in H1 FY22 (1) with 31m lifetime orders(2) 1 Year ended 30 Apr
Slide 25: Continued focus on reminder collection and conversion rates
SHARE OF WALLET Continued focus on reminder collection and conversion rates We have broadly doubled our database of reminders Personalised reminder landing pages collected in the last 18 months and one-click reminder creation Reminders set at each period end +90% 25
Slide 26: New feature launches to support better conversion and upsell
SHARE OF WALLET New feature launches to support better conversion and upsell New editor on web Search and favourites Card upsell • The new editor has made it easier • Our improved search service helps • Our new upsell page helps and quicker for customers to consumers navigate our constantly customer
Slide 27: Integration of Greetz into the Global Design Platform
SHARE OF WALLET Integration of Greetz into the Global Design Platform 3,000 Global Design Platform Our card range now contains More exclusive partnerships designs extended to Greetz 33,000 designs, up +50% YoY +50% 27
Slide 28: New gift category partners in wine and fine fragrances
DRIVING GIFT ATTACHMENT New gift category partners in wine and fine fragrances New partnership >30 new with Virgin Wines wines >40 new Partnership fragrances New premium with specialist fragrance range fine fragrance >20 new wholesaler gift sets Further improving our +350% +200% larger revenue uniqu
Slide 29: Upgraded algorithms drive relevance and cross-sell
DRIVING GIFT ATTACHMENT Upgraded algorithms drive relevance and cross-sell Our new “Mission Dynamic” cross-sell algorithm has New cross-sell touchpoints on further improved the relevance of gifting recommendations web and app within basket Card-first strategy enables us Algorithmic cross-sell to cap
Slide 30: New packaging to elevate the recipient experience
DRIVING GIFT ATTACHMENT New packaging to elevate the recipient experience New layer-on-layer Delivery seven 24/7 chatbot packaging for improved recipient experience days a week launched 30
Slide 31: Ongoing execution against our ESG goals
Ongoing execution against our ESG goals Full FSC certification, and on course Ongoing actions to reduce Partnering with organisations for 100% sustainable card, paper and direct GHG emissions. Net zero that work to improve technology packaging by 2022 by 2030 goal approved by SBTi sector diversity L
Slide 32: Our business model positions us to drive sustained growth
Our business model positions us to drive sustained growth More Smarter 01 Algorithms Data Card-first customer acquisition Capture of highly relevant 01 predictive data around Profitable with high loyalty gifting intent Virtuous Personalised experience cycle 02 driving Data-driven and contextual reco
Slide 33: Strong results and continued growth in gifting share of revenue
Strong results and continued growth in gifting share of revenue 1 Revenue and Adjusted EBITDA more than doubled in two years 2 Continued growth in gifting share of total revenue to 48% 3 Continued delivery against our key growth levers Our expectations for FY22 are at the upper end of the existing 4
Slide 34: MOONHIG group ple
MOONHIG group ple