PensionBee Group plc
Incorporated in England and
Wales
Registration Number:
13172844
LEI: 2138008663P5FHPGZV74
ISIN: GB00BNDRLN84
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23
October 2024
PensionBee Group
plc
Q3 2024 Results
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Successful Strategy drives
Strong Financial Performance
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PensionBee Group plc ('PensionBee'
or the 'Company', together with its subsidiaries the 'Group'), a
leading online pension provider, today announces a trading update
(unaudited) for the quarter ended 30 September 2024.
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Summary
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● Assets under
Administration increased by 41% year on year to £5.5bn (September
2023: £3.9bn), underpinned by strong Net Flows from new customers
(YTD £538m) and existing customers (YTD £153m) and supportive
markets.
● Group Revenue
for the quarter increased by 37% year on year to £9m (Q3 2023:
£6m). Annual Run Rate Revenue increased by 41% to £34m (September
2023: £24m).1
● Group Adjusted
EBITDA was positive for the quarter (Q3 2024: £1m vs. Q3 2023:
£(1)m), with PensionBee expecting to achieve Group Adjusted EBITDA
breakeven for FY 2024.
● Invested
Customers increased by 16% year on year to 260,000 (September 2023:
223,000), demonstrating strong continued growth driven by
PensionBee's data-led, efficient customer acquisition approach and
the strength of PensionBee's household brand, with PensionBee's
prompted brand awareness reaching an all time high of
58%.2 Net Flows per £1 of Marketing Spend3
increased by 10% year on year to £85 (YTD Sep-23: £77).
● Net Retention
Rate4 which captures all underlying cash inflows and
outflows was >100%, supported by continued strong customer
satisfaction (4.7★ Excellent Trustpilot score5) and
ongoing product innovation.
● Cash balance of
£14.6m as of September 2024.
● Following its
SEC registration in July, PensionBee commenced live consumer
testing in the US market, the world's largest Defined Contribution
pension market, in partnership with State Street Global Advisors,
one of its long-standing asset management providers and one of the
world's largest money managers.
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Romi Savova, CEO of PensionBee, commented:
"Our substantial growth has continued over the third quarter,
with Assets under Administration reaching £5.5 billion and 260,000
Invested Customers. As we continue to consistently execute on all
elements of our strategy, having achieved two consecutive quarters
of positive Group Adjusted EBITDA this year, we expect to deliver
Group breakeven on the same basis for the full year
2024.
We
are delighted to be expanding the reach of our award-winning
customer proposition, innovative technology platform and unique
marketing approach, having entered the US market, the world's
largest Defined Contribution pension market, in partnership with
State Street Global Advisors. We are pleased to see a positive
consumer response to our marketing approach and to have developed
local features to facilitate easier rollovers. The opportunity we
have ahead of us, to help millions of Americans enjoy a happy
retirement, is transformational for the next decade of PensionBee's
growth."
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United Kingdom Operational Highlights
In the UK, PensionBee has further
advanced its strategic goals, continuing to grow its customer base
and Assets under Administration, leveraging its established
position as a household brand.
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Efficient Investment in
Customer Acquisition and Growing Brand Awareness:
PensionBee's UK business continued
to grow its brand and acquire customers efficiently, investing £2m
in diversified marketing activities across the quarter (£8m across
2024), bringing the cumulative marketing investment since inception
to £63m. Across the year, there has been a focus on reaching
customers with higher account sizes, resulting in growth of 21% in
the average account value to c.£21,000 (Q3 2023: c.£17,000). Cost
per Invested Customer continued to be stable (Q3 2024: £244 vs. Q3
2023: £244), highlighting the strength of the Company's marketing
capability, the efficiency of spend, and the importance of
household brand awareness in driving customer acquisition. Prompted
Brand Awareness reached an all time high of 58%2 over Q3
2024 (Q3 2023: 51%), demonstrating that PensionBee continues to be
embedded in consumers' minds as a trusted household name in the
UK.
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Leadership in Product
Innovation
PensionBee has continued to innovate
to meet the needs of its UK customers by releasing helpful and
engaging tools, designed to enhance the customer experience, such
as new performance analytics. Over the third quarter of 2024 the
Company has continued to make further improvements to the pension
transfer journey, introducing further system efficiencies to
automated processes. Streamlining the process has enhanced the
processing speed and accuracy by reducing manual data
entry.
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Focus on Excellent Customer
Service:
Across the quarter, the delivery of
excellent customer service has continued to be prioritised, as
evidenced through the achievement of a 4.7★ Excellent Trustpilot
rating from approximately 11,300 Trustpilot reviews5 and
the maintenance of rapid customer response
times.6
Ensuring excellent levels of
customer satisfaction is central to PensionBee's ambition of
retaining and serving its customers throughout their lifetimes. As
such, PensionBee maintained a Net Retention Rate >100% across
the year to date (Q3 2023: >100%).3
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Investment in and Development
of Leading Technology Platform:
PensionBee has continued with its
ongoing investment in the scalability of its technology platform,
which continues to underpin its competitive advantage. Efficiency
improvements through internal automation, security and pension
transfer improvements, have delivered a 22% productivity
improvement year on year (Q3 2024:1,305 Invested Customers / Staff
Member vs. Q3 2023: 1,072 Invested Customers / Staff
Member).7
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United States Operational Highlights
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PensionBee entered the US market,
the world's largest Defined Contribution pension market, in
partnership with State Street Global Advisors, one of its
long-standing asset management providers and one of the world's
largest money managers. PensionBee will pursue a substantial growth
opportunity to reach millions of underserved Americans across the
US, capitalising on its existing strengths to harness substantial
consumer appetite for an easy retirement solution.
PensionBee Inc. has had its SEC
registration granted, enabling federal operation. Its US technology
platform has been built and is operational, having been fully
tested with the completion of retirement account
transfers.
Initial US marketing has begun, with
new channels having been established (including organic and paid
search, organic and paid social, PR and brand advertising) and the
calibration of these channels is underway. Channels are
demonstrating a positive early consumer response. New search
functionality for 401(k) accounts has been developed and initial
provider-specific journeys for rollovers have been validated and
prepared for customer usage.
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Financial Update
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PensionBee has continued to deliver
consistent and predictable Revenue growth, driven by the
compounding nature of its Assets under Administration ('AUA'),
positive Net Retention, ongoing Net Flow generation across cohorts
and a stable Revenue Margin over Q3 2024. Its Net Retention Rate
>100% across the year to date (Q3 2023: >100%)3,
highlighting the long-term compounding nature of the asset base.
Compounding growth has translated into predictable Revenue, with
Revenue for the year to date of £24m (YTD Sep-23: £17m) and Annual
Run Rate Revenue growth of 41% year on year to £34m (Q3 2023:
£24m).
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Predictable and Recurring Revenue Base
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Note on Charts: Represents Cohort
AUA from bottom to top, Cohort 2016-2019, Cohort 2020, Cohorts
2021, Cohort 2022, Cohort 2023, Cohort 2024 and Market Impact
(darkest orange).
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PensionBee's scalable business has
continued to drive operating leverage and profitability. The Cost
Base8 for Q3 2024 has remained stable at £8m (Q3 2023:
£7m), achieved with a combination of relatively stable money
manager and technology platform costs, increasing at 9.5% year on
year relative to Annual Run Rate Revenue growth of 41%, together
with more efficient deployment of marketing costs for the
quarter.
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Business Scalability to Drive Margin
Improvements
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The combination of strong
predictable revenue growth combined with business scalability and
strict cost discipline has continued to drive high growth and to
generate a second consecutive quarter of positive Group Adjusted
EBITDA at £1m for Q3 2024 (Q3 2023: £(1)m).
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Note on Chart: Marketing Expenses
are offset by £200k from the marketing reimbursement
as provided by State Street.
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Business Scalability Translates into Improvement in
Profitability
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Group Financial Guidance Framework
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The Company is pleased to reiterate
the guidance framework as previously presented at its recent
Capital Markets Day:
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Revenue
Objectives:
● PensionBee
expects Group Revenue to exceed £30m for the full year 2024.
● It has an
ambition to reach >£100m of Group Revenue in the short to medium
term (by year 5), with a longer term (5 to 10 years) ambition to
exceed £250m.
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Profitability
Objectives:
● PensionBee
expects to reach Group Adjusted EBITDA breakeven for the full year
2024.
● It has an
ambition to reach an Adjusted Group EBITDA Margin of approximately
20% in the short to medium term (by year 5), with a longer term (5
to 10 years) ambition to reach c.50%.
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Group Financial Summary
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As at
Period End
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Sep-2023
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Sep-2024
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YoY change
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AUA
(£m)9
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3,902
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5,484
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41%
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AUA Retention Rate (% of
AUA)10
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96%
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96%
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Stable
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Invested Customers
(thousands)11
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223
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260
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16%
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Customer Retention Rate (% of
IC)12
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97%
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96%
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Stable
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Cost per Invested Customer
(£)13
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244
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244
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Stable
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Revenue Margin (% of
AUA)14
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0.65%
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0.64%
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Stable
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Annual Run Rate
Revenue1
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24
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34
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41%
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LTM Revenue15
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22
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31
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40%
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Over the
9-month Period Ending
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Sep-2023
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Sep-2024
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YoY change
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Opening AUA (£m)9
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3,025
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4,350
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44%
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Gross Inflows
(£m)
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923
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1,020
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10%
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Gross Outflows
(£m)
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(231)
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(328)
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42%
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Net
Flows (£m)16
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692
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692
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0%
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Market Growth and Other
(£m)
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185
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442
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n/m
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Closing AUA (£m)9
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3,902
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5,484
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41%
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Over the
3-month Period Ending
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Sep-2023
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Sep-2024
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YoY change
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Revenue (£m)17
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6
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9
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37%
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Cost Base
(£m)8
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(7)
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(8)
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6%
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Adjusted EBITDA
(£m)18
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(1)
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1
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n/m
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Adjusted EBITDA Margin (% of
Revenue)19
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(17)%
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9%
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26ppt*
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Over the
9-month Period Ending
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Sep-2023
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Sep-2024
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YoY change
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Revenue (£m)17
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17
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24
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40%
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Cost Base
(£m)8
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(26)
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(25)
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(4)%
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Adjusted EBITDA
(£m)18
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(9)
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(1)
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87%
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Adjusted EBITDA Margin (% of
Revenue)19
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(52)%
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(5)%
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47ppt*
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