Moonpig Group Plc · LSE:MOON
Moonpig — FY2021 Earnings Presentation
38 slides from Moonpig's earnings presentation, Jul 27, 2021
Slide 1: Full Year Results Presentation
Full Year Results Presentation Year ended 30 April 2021 27 July 2021 Strictly Private and Confidential
Slide 2: Disclaimer
2 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 cond
Slide 3: Agenda
3 Agenda 1 Overview – Nickyl Raithatha 2 Financial performance – Andy MacKinnon 3 Strategic progress – Nickyl Raithatha
Slide 4: Becoming the Ultimate Gifting Companion
4 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 always between people that means more care about each other Leveraging data and technology to make
Slide 5: A year of record performance and execution against strategy
5 A year of record performance and execution against strategy Strong set of results in a year which has delivered an enduring transformation 1 and a step change in scale of the business 2 Revenue and Adjusted EBITDA both more than doubled Delivering against the growth levers set out at IPO • Complet
Slide 6: FY21 Financial and Operational Highlights
6 FY21 Financial and Operational Highlights Technology and data platform Further enhancing our leading Strong set of financial results driving our growth flywheel customer proposition Revenue Completion of three-year Card range expansion £368.2m, +113% YoY technology re-platforming 27,000 total desi
Slide 7: Financial performance
7 Financial performance Andy MacKinnon
Slide 8: Powerful financial model and transformational acceleration
8 Powerful financial model and transformational acceleration • Triple digit revenue growth to £368.2 million1 Strong Top Line Growth • Accelerating revenue growth amplified by the extended UK and NL lockdown • 75% of revenue from existing customers in FY21 High Customer Retention • A data-driven
Slide 9: Strong orders growth and re-investment of AOV growth
9 Strong orders growth and re-investment of AOV growth Total orders Total Orders AOV AOV m £/order 7.2 51 7.1 • Orders increased by 109%, driven by uplift in new customer acquisition and elevated purchase frequency during 6.9 lockdown • Re-investment of the AOV growth that was driven through increas
Slide 10: Exceptional growth in revenue from new customers
10 Exceptional growth in revenue from new customers Revenue from new customers £m Annual Half Year 92 Management Action • Significant uplift in new Drives Uplift in Revenue from New Customers customer acquisition during during Lockdown lockdown, from mid-March 41 2020 onwards (impacting 37 33 FY20 a
Slide 11: Elevated frequency driving growth in revenue from existing customers
Elevated frequency driving growth in revenue from existing 11 customers Revenue from existing customers £m 276 • Existing customer revenue increased due to unusually elevated frequency • Underpinned by increased app 136 penetration, contextual recommendations, reminder setting and targeted marketing
Slide 12: Delivering against the opportunity in gifting
12 Delivering against the opportunity in gifting Gifting revenue mix % of total revenue 46.1% 40.8% 41.7% 5.9% 6.4% • Attached gifting boosted by temporary increase in 7.5% proportion of orders sent direct to recipient in lockdown • Underlying increase in attached gifting revenue, reflecting managem
Slide 13: Exceptional revenue growth across both segments
13 Exceptional revenue growth across both segments Moonpig and Greetz revenue £m Moonpig growth 31% 123% Greetz growth 98% 86% 368 • Group revenue increased by 113% year on year 86 • Successful application of the Moonpig strategy and operational playbook to Greetz delivered strong growth across both
Slide 14: Continued double-digit underlying revenue growth
14 Continued double-digit underlying revenue growth Moonpig group revenue Drivers of Covid Boost £m Annual Half Year Significant Uplift in New Customer Growth 44% 113% 135% 99% Acquisition Underlying growth 24% 22% 26% Significant Uplift in Existing Frequency 368 Covid boost1 Anticipated Lasting Imp
Slide 15: Gross profit margin reflective of investment and category mix
15 Gross profit margin reflective of investment and category mix Gross margin % of total revenue Annual Half Year Moonpig 55% 56% 52% 54% 50% • Group gross profit increased by 103% Greetz 42% 44% 46% 45% 47% to £186m 53% 53% 52% • Group gross margin rate decreased to 51% 50% 51%, driven by: • Growth
Slide 16: Adjusted EBITDA more than doubled year-on-year
16 Adjusted EBITDA more than doubled year-on-year Adjusted EBITDA £m Annual Half Year Group 19% 26% 25% 26% 24% Moonpig 23% 32% 28% 30% 26% • Adjusted EBITDA +107% driven by Greetz 2% 10% 16% 14% 17% revenue growth and benefits from scale and historical investments to build operating 92 leverage 14
Slide 17: Strong operating cash flow and cash conversion
17 Strong operating cash flow and cash conversion £m 2021 2020 Adjusted EBITDA 92.1 44.4 Less: Capital expenditure (10.8) (7.7) • Operating cash conversion remains strong at +106% • Total capex £10.8m: Add back: (Increase) in inventories (12.0) (0.2) • Ongoing development of our proprietary technolo
Slide 18: Capital allocation priorities focus on investment in growth
18 Capital allocation priorities focus on investment in growth 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 f
Slide 19: Current trading, outlook and guidance
19 Current trading, outlook and guidance • The new financial year has started moderately ahead of expectations, consistent with the slower lifting of lockdown restrictions in the UK and the Netherlands • As restrictions have eased, we have seen customer purchase frequency start to normalise from ele
Slide 20: Strategic progress
20 Strategic progress Nickyl Raithatha
Slide 21: The clear online market leader in a market shifting rapidly online
21 The clear online market leader in a market shifting rapidly online Rest of world 2% Netherlands United Kingdom 23% 75% Market position in Market position in #1 the Netherlands Cards Gifting #1 the United Kingdom 54% 46% 65% 60% Market share 1 Market share 2 Note: 1 OC&C estimates in 2019 - Greetz
Slide 22: Card-first strategy provides a disruptive gifting platform
Our Card-first Strategy Provides a Disruptive Gifting 22 Platform with Clear Competitive Advantages… Card-first Gift Attach Profitable customer acquisition The most relevant gifting platform with high loyalty with minimal acquisition cost 54(1) million card buyers in UK & NL >70%(2) cards gi
Slide 23: A data-driven growth flywheel
23 A data-driven growth flywheel … More Smarter Data 01 Algorithms Card-first customer acquisition Capture of highly relevant 01 predictive data around Profitable with high loyalty gifting intent Virtuous Cycle Personalised experience 02 and contextual driving strong 04 Customer 02 recommendations c
Slide 24: With distinct competitive advantages
24 … with distinct competitive advantages 1 2 3 4 Brand power Scale Rich data pools World class Clear market leader, Proprietary algorithms platform with two category defining 73m cards and gifts optimised across: Proprietary technology brands and 89%1 prompted Up to 450k orders per day >50m reminde
Slide 25: We are delivering against our core growth levers
25 We are delivering against our core growth levers × Gift Attach × Share of Wallet Customer Acquisition
Slide 26: Investing in marketing to strengthen our market-leading brands
CUSTOMER ACQUISITION We have invested in marketing to further strengthen our 26 market-leading brands Launched new New Greetz brand creative platform campaign focused on at Moonpig with +7pp emotional connection Moonpig spontaneous brand our new awareness of sharing a card Moonpiglets (Mar 21 - May
Slide 27: New products, features and service offerings extending market reach
CUSTOMER ACQUISITION New products, features and service offerings are extending 27 our market reach Group cards Digital handwriting Service offering Cut-off times for next day delivery extended to 10pm in NL and 9pm in UK Introduced enhanced order-tracking features across entire gifting range Sunday
Slide 28: Continued innovation improving user experience and customer lifetime value
SHARE OF WALLET Continued innovation is improving user experience and 28 driving customer lifetime value 27,000 • Total card design range Expansion of • YoY growth in card +59% design range card range Gaming themed cards • Added April 2021 2 3 We introduced a number of optimisations to: 1 Customers
Slide 29: Progress on journey to becoming an app-first company
SHARE OF WALLET We have made significant progress on our journey to 29 becoming an app-first company New differentiated app The market leading gifting app … … rapidly growing in share features launched in FY21 iOS: All Apps(1) Android: Free Apps(2) App orders as % of total orders(5) Digital handwrit
Slide 30: Expanded gifting proposition underpinning attached gifting revenue
DRIVING GIFT ATTACHMENT We have materially expanded our gifting proposition, 30 underpinning growth in attached gifting revenue Commercial proposition FY 21 achievement Gift brand >70 partnerships new brand partnerships New gift 1,400 SKU +40% categories total gifting range YoY growth in gifting ran
Slide 31: Upgraded algorithms and user experience drive more relevance
DRIVING GIFT ATTACHMENT Upgraded algorithms and user experience complement the 31 expanding gift range to drive more relevance for the customer Constantly improving algorithms Significant increase in conversion Evolution of recommendation to collect and leverage data to rate and the proportion of al
Slide 32: Our new ESG strategy commits us to eight long-term goals
32 Our new ESG strategy commits us to eight long-term goals Environment People Communities Increase the combined Invest £1.0m between 2020- Net zero carbon emissions leadership representation of 2025 leveraging the Moonpig 1 (Scope 1 and Scope 2) by 4 women and ethnic 6 Group Foundation to causes 20
Slide 33: Strong results and an enduring business transformation
33 Strong results and an enduring business transformation Strong set of results in a year which has delivered an enduring 1 transformation and a step change in scale of the business 2 Revenue and Adjusted EBITDA both more than doubled 3 We are delivering against strategy set out at IPO Strategy deli
Slide 34: Q&A
34 Q&A
Slide 35: Appendix
moonpig group ple Appendix 35
Slide 36: Net debt
36 Net debt Net debt £m April 2021 April 2020 Borrowings (169) (27) Lease liabilities (12) (14) Cash and cash equivalents 66 12 Net debt (115) (28) Ratio of net debt to Adjusted EBITDA £m April 2021 April 2020 Net debt 115 28 Adjusted EBITDA 92 44 Net debt to Adjusted EBITDA 1.25x 0.64x • In connect
Slide 37: Full P&L
37 Full P&L £m April 2021 April 2020 April 2019 Revenue 368 173 120 Cost of sales (182) (81) (57) Gross profit 186 92 63 Selling and administrative expenses (149) (59) (49) Other income 2 - - Operating profit 39 33 14 Finance income 1 1 1 Finance costs (6) (2) (1) Profit before taxation 33 32 14 Tax
Slide 38: Adjusted EBITDA reconciliation
38 Adjusted EBITDA reconciliation £m April 2021 April 2020 April 2019 Operating profit 39 33 14 Depreciation and amortisation 12 10 6 Adjusting items 42 1 3 IPO Admission related transaction costs 11 - - IPO Admission related bonuses 4 - - Recognition and remeasurement of pension indemnity 2 (2) - P