REG - PensionBee Group plc - Q4 2024 Results

PensionbeeAnnouncement

22/01/2025 16:30

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RNS Number : 3413U  PensionBee Group plc  22 January 2025

 

 PensionBee Group plc

 Incorporated in England and Wales

 Registration Number: 13172844

 LEI: 2138008663P5FHPGZV74

 ISIN: GB00BNDRLN84
 22 January 2025

 PensionBee Group plc

 Q4 2024 Results
 Group achieves Adjusted EBITDA breakeven, supported by UK profitability

 and continued execution of successful strategy
 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 31 December 2024.
 Summary
 ●    Assets under Administration increased by 34% year on year to £5.8bn
 (December 2023: £4.4bn), underpinned by strong Net Flows from new and
 existing customers, and supportive markets.

 ●    Revenue for the quarter increased by 38% year on year to £9m (Q4
 2023: £7m). Annual Run Rate Revenue increased by 36% to £38m (December 2023:
 £28m).(1)

 ●    Adjusted EBITDA(2) breakeven for the Group was achieved for the full
 year of 2024 (FY 2024: £0m), with an Adjusted EBITDA Margin of 1%. UK
 Adjusted EBITDA(3) was positive for the full year of 2024, recording an
 Adjusted EBITDA Margin of 7%, and marking a significant milestone.

 ●    Enhanced marketing efficiency, driven by our data-led strategy,
 resulted in a 9% increase in Net Flows per £1 of Marketing Spend. Every £1
 of marketing spend generated £96 of net inflows in 2024 (2023: £88).(4)

 ●    Customer Retention Rate(5) and AUA Retention Rate(6) were both
 >95%, supported by continued strong customer satisfaction (4.7★ Excellent
 Trustpilot score(7)) and ongoing product innovation.
 Romi Savova, CEO of PensionBee, commented:
 "At the end of 2024, PensionBee celebrated ten years since inception and the
 launch of our US business, an important step in creating a global leader in
 the consumer retirement market. We continued to execute on our growth
 strategy, reaching £5.8 billion in Assets under Administration on behalf of
 265,000 Invested Customers. We also delivered on our long-standing ambition of
 achieving Adjusted EBITDA profitability in the UK and delivered Adjusted
 EBITDA breakeven for the Group as well as making a significant investment in
 our US business.

 In the UK, we optimised our marketing expenditure while growing our brand
 awareness, introduced our new sustainable investing option, the Climate Plan,
 and maintained an efficient operational approach to exceptional customer
 service. We continued to prioritise automation as the foundation for efficient
 customer and asset growth.

 In the US, we established our diversified multi-medium marketing strategy,
 activating key channels such as search, social media, mobile app campaigns,
 email nurturing and public relations. We launched our native mobile app in
 December, enabling customers to access PensionBee through both app stores. Our
 £20 million capital raise in October 2024 will enable us to accelerate the
 growth of our US business in the coming years."
 United Kingdom Operational Highlights
 Over the past quarter PensionBee has continued to advance its strategic goals,
 growing its customer base and Assets under Administration through efficient
 customer acquisition and its decade long investment in brand awareness.
 Efficient Investment in Customer Acquisition and Growing Brand Awareness:

 PensionBee's UK business has continued to grow and invest in its brand and
 acquire customers efficiently. We invested £1m in diversified marketing
 activities across the quarter, optimising between channels to maximise our
 return on investment. We invested £9m in UK marketing across 2024, bringing
 the cumulative UK marketing investment since inception to £64m. Over 2024,
 our acquisition strategy has been concentrated on reaching customers with
 larger account balances, resulting in growth of 16% in the average UK account
 balance to c.£22,000 (Q4 2023: c.£19,000). This strategy has also resulted
 in an increase in Net flows per £ of Marketing Spend to £96 (FY 2023: £88).
 Cost per Invested Customer was stable (Q4 2024: £242 vs. Q4 2023: £241),
 highlighting the strength of the Company's marketing capability and efficiency
 of spend. Prompted Brand Awareness ended the quarter at 57%, whilst Unprompted
 Brand Awareness, reported now for the first time, was 15% demonstrating that
 PensionBee continues to solidify its presence in the UK as a trusted household
 name.(8)

 Leadership in Product Innovation:

 Throughout the year and the fourth quarter of 2024, PensionBee has remained
 committed to innovation, continuing to release and invest in valuable and
 engaging tools to meet the evolving needs of its UK customers. These tools
 have included performance analytics and retirement planning tools, designed to
 empower customers to make more informed decisions and plan more effectively
 for their future.

 In the fourth quarter of 2024 the Company continued to listen closely to its
 customers, offering retirement solutions tailored to their needs. In December
 2024, PensionBee introduced a new sustainable investing option, the Climate
 Plan, to existing customers. The Climate Plan was launched to new customers in
 January 2025. The Climate Plan excludes fossil fuel producers and also aims
 for total carbon emissions produced by investee companies to be reduced by at
 least 10% each year.
 Focus on Excellent Customer Service:

 Across the quarter, PensionBee has continued to deliver its industry leading
 customer service, as evidenced through the achievement of a 4.7★ Excellent
 Trustpilot rating from approximately 11,500 Trustpilot reviews (December 2023:
 4.6★) and the maintenance of rapid customer response times.(9)

 Delivering exceptional levels of customer satisfaction is central to
 PensionBee's ambition of retaining and serving its customers throughout their
 lifetimes, seeing them through retirement. As such, PensionBee maintained a
 Customer Retention Rate >95% across 2024 (Q4 2023: >95%).(5)
 Investment in and Development of Leading Technology Platform:

 During 2024, PensionBee continued to strengthen and invest in the scalability
 of its technology platform, which continues to be a driving force for
 PensionBee's competitive advantage. Ongoing investment in internal automation
 has resulted in further efficiency gains, reflected in a 20% productivity
 improvement year on year (Q4 2024: 1,333 Invested Customers / Staff Member vs.
 Q4 2023: 1,112 Invested Customers / Staff Member).(10)

 United States Operational Highlights
 In 2024, PensionBee entered the US market, the world's largest Defined
 Contribution pension market, in collaboration with our longstanding partner
 and one of the world's largest money managers, State Street, who will provide
 meaningful marketing support to PensionBee. PensionBee will pursue this
 substantial growth opportunity to reach millions of underserved Americans
 across the US, capitalising on its decade long investment in its scalable
 technology platform, leadership in product innovation and industry leading
 focus on excellent customer service to respond to the strong consumer demand
 for a simple and effective retirement solution.
 Major Milestones Achieved in the US
 In 2024, PensionBee US successfully finalised its commercial agreement with
 State Street, registered as an investment adviser with the Securities and
 Exchange Commission, and launched a fully operational platform.
 Since its SEC registration  in July 2024, PensionBee US has been advancing at
 a rapid pace, leveraging its scalable technology platform. This robust
 technological foundation has enabled PensionBee US to hit key milestones and
 progress at a faster rate than initially achieved in the UK, generating
 Revenue by December 2024.
 Over Q4 PensionBee continued to build the foundations of its US business,
 rolling out further components of its multichannel, diversified marketing
 strategy and onboarding its first customers through early testing. The year
 concluded with the launch of the native mobile app on both the Google Play and
 Apple App Stores in December.
 Over the coming weeks and months, PensionBee intends to launch its ROTH IRA
 and to continue building custom rollover journeys for the largest providers.
 PensionBee will also continue to build out its Safe Harbor IRA proposition,
 working with its partners at State Street, relevant third parties and
 potential clients.
 PensionBee US is Progressing Rapidly(11)

 Group Financial Update
 PensionBee has continued to deliver consistent and predictable Revenue growth,
 driven by the compounding nature of its Assets under Administration ('AUA'),
 ongoing Net Flow generation across cohorts and a stable Revenue Margin over Q4
 2024 supported by >95% Customer and AUA Retention Rates reflecting the
 compounding nature of the asset base. Compounding growth has translated into
 predictable Revenue, with Revenue for the Group in 2024 of £33m (December
 2023: £24m) and Annual Run Rate Revenue growth of 36% year on year to £38m
 (Q4 2023: £28m). PensionBee ended 2024 with a strong cash balance of £35m.
 Predictable and Recurring Revenue Base

 Note on Charts: Shaded bars on charts represent AUA. From bottom to top:
 Cohort 2016-2019 AUA, Cohort 2020, Cohort 2021 AUA, Cohort 2022 AUA, Cohort
 2023 AUA, Cohort 2024 AUA, and Market Growth and Other AUA (darkest orange).
 PensionBee's scalable business has continued to drive operating leverage and
 profitability. The UK Cost Base(12) for FY 2024 has remained stable at £(32)m
 (FY 2023: £(32)m), achieved through a combination of flat Money Manager Costs
 relative to Revenue, stable Technology Platform Costs and efficient marketing
 spend.
 Business Scalability to Drive Margin Improvements
 A combination of strong predictable Revenue growth, business scalability and
 strict cost discipline has continued to drive high growth and to generate a
 third consecutive quarter of positive Adjusted EBITDA for the Group at £2m
 for Q4 2024 (Q4 2023: £1m) as well as Adjusted EBITDA Breakeven for the Group
 of £0.4m for FY 2024. These significant Group milestones have been supported
 by the achievement of UK Adjusted EBITDA profitability for FY 2024 of £2m (FY
 2023: £(8)m), in line with guidance.
 PensionBee UK Scalability and Profitability

 Note on Charts: Charts relate to PensionBee UK only.
 The Cost Base(13) for FY 2024 for the Group amounted to £(33)m, an increase
 of 2% (FY 2023: £(32)m). US marketing expenses of £1m have been fully
 reimbursed by State Street.
 Group Financial Guidance Framework
 The Company is pleased to confirm that the guidance relating to 2024 has been
 achieved within the guidance framework previously presented at its recent
 Capital Markets Day:
 Revenue Objectives:
 ●    PensionBee expects Revenue for the Group to exceed £30m for the
 full year 2024.

 ○    Delivered: PensionBee achieved Revenue of £33m for the Group.

 ●    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.
 Profitability Objectives:
 ●    PensionBee expects to reach Group Adjusted EBITDA breakeven for the
 full year 2024.

 ○    Delivered: PensionBee achieved Adjusted EBITDA breakeven for the
 Group of £0m.

 ●    Ambition to reach Adjusted EBITDA Margin for the Group 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%.
 Group Financial Summary

                     As at Period End
 Group Metrics (unless otherwise stated)  Dec-2023  Dec-2024  YoY change
 AUA (£m)(14)                             4,350     5,841     34%
 AUA Retention Rate (% of AUA)(6)         >95%      >95%      Stable
 Invested Customers (thousands)(15)       229       265       16%
 Customer Retention Rate (% of IC)(5)     >95%      >95%      Stable
 UK Cost per Invested Customer (£)(16)    241       242       Stable
 Revenue Margin (% of AUA)(17)            0.64%     0.64%     Stable
 Annual Run Rate Revenue (£m)(1)          28        38        36%

 

                     Over the 12-month Period Ending
 Group Metrics (unless otherwise stated)  Dec-2023     Dec-2024     YoY change
 Opening AUA (£m)(14)                     3,025        4,350        44%
    Gross Inflows (£m)                    1,174        1,334        14%
    Gross Outflows (£m)                   (318)        (459)        45%
 Net Flows (£m)(18)                       857          876          2%
    Market Growth and Other (£m)          468          615          N/M
 Closing AUA (£m)(14)                     4,350        5,841        34%

 

                      Over the 3-month Period Ending
 Group Metrics (unless otherwise stated)    Dec-2023     Dec-2024     YoY change
 Revenue (£m)(19)                           7            9            38%
 Adjusted EBITDA (£m)(2)                    1            2            N/M
 Adjusted EBITDA Margin (% of Revenue)(20)  11%          18%          6ppt

 

                       Over the 12-month Period Ending
 Group Metrics (unless otherwise stated)       Dec-2023     Dec-2024     YoY change
 Revenue (£m)(19)                              24           33           39%
 Cost Base (£m)(13)                            (32)         (33)         2%
 Adjusted EBITDA (£m)(2)                       (8)          0            N/M
 Adjusted EBITDA Margin (% of Revenue)(20)     (35)%        1%           36ppt*

                        Over the 12-month Period Ending
 Group Metrics (unless otherwise stated)       Dec-2023     Dec-2024     YoY change
 UK Adjusted EBITDA (£m)(3)                    (8)          2            N/M
 UK Adjusted EBITDA Margin (% of Revenue)(21)  (35)%        7%           41ppt*

 

 

                                          Over the 12-month Period Ending
 Group Metrics (unless otherwise stated)  Dec-2023     Dec-2024     YoY change
 Opening AUA (£m)(14)                     3,025        4,350        44%
    Gross Inflows (£m)                    1,174        1,334        14%
    Gross Outflows (£m)                   (318)        (459)        45%
 Net Flows (£m)(18)                       857          876          2%
    Market Growth and Other (£m)          468          615          N/M
 Closing AUA (£m)(14)                     4,350        5,841        34%

 

 

                                            Over the 3-month Period Ending
 Group Metrics (unless otherwise stated)    Dec-2023     Dec-2024     YoY change
 Revenue (£m)(19)                           7            9            38%
 Adjusted EBITDA (£m)(2)                    1            2            N/M
 Adjusted EBITDA Margin (% of Revenue)(20)  11%          18%          6ppt

 

 

                                               Over the 12-month Period Ending
 Group Metrics (unless otherwise stated)       Dec-2023     Dec-2024     YoY change
 Revenue (£m)(19)                              24           33           39%
 Cost Base (£m)(13)                            (32)         (33)         2%
 Adjusted EBITDA (£m)(2)                       (8)          0            N/M
 Adjusted EBITDA Margin (% of Revenue)(20)     (35)%        1%           36ppt*

                                               Over the 12-month Period Ending
 Group Metrics (unless otherwise stated)       Dec-2023     Dec-2024     YoY change
 UK Adjusted EBITDA (£m)(3)                    (8)          2            N/M
 UK Adjusted EBITDA Margin (% of Revenue)(21)  (35)%        7%           41ppt*

Notes

 *   A ppt is a percentage point. A percentage point is the unit for the arithmetic
     difference of two percentages.
 1   Annual Run Rate ('ARR') Revenue is calculated using the recurring Revenue for
     the relevant month multiplied by 12.
 2   Adjusted EBITDA is the profit or loss for the period before taxation, finance
     costs, depreciation, share based compensation and transaction costs.
 3   UK Adjusted EBITDA includes Other Income of £1.2m arising from inter-company
     transactions with PensionBee US. All inter-company transactions are calculated
     on an arm's length basis.
 4   Cumulative Net Flows over the relevant period divided by Cumulative Marketing
     spend over the relevant period.
 5   Customer Retention Rate measures the percentage of retained PensionBee
     Invested Customers over the average of the trailing twelve months. High
     customer retention provides more certainty of future Revenue. This measure can
     also be used to monitor customer satisfaction. As of Q4 2024 Invested Customer
     Retention is at >95%.
 6   AUA Retention Rate measures the percentage of retained PensionBee AUA from
     transfers out over the average of the trailing twelve months. High AUA
     Retention provides more certainty of future Revenue. This measure can also be
     used to monitor customer satisfaction. As of Q4 2024 AUA Retention is at
     >95%.
 7   Trustpilot score of 4.7★ out of 5 (based on 11,486 reviews) recorded as at 7
     January 2025.
 8   PensionBee prompted brand awareness tracker, January 2024. Prompted brand
     awareness measured through a consumer survey asking 'Which of the following
     have you heard of?' with respect to UK financial services brands: Aviva 85%,
     Scottish Widows 75% Standard Life 68%, PensionBee 57%, Hargreaves Lansdown
     50%, Vanguard 44%, AJ Bell 43%, Nutmeg 40%,  Interactive Investor 18%.
     PensionBee unprompted brand awareness tracker, January 2024 measured through a
     consumer survey asking 'Thinking about pensions what brands come to mind?':
     Scottish Widows 22%, PensionBee 15%, Legal and General 13%, Aviva 12%,
     Standard Life 8%, Hargreaves Lansdown 4%, AJ Bell 3%, Vanguard 1%, Nutmeg 1%.
 9   Customer response times of 13 seconds average live chat waiting time (of 3,394
     live chats over Q4 2024), 57 seconds average phone waiting time (of 10,059
     phone calls over Q4 2024) and 85% of email cases closed within <72 hours
     (of 41,167 emails over Q4 2024).
 10  Productivity, measured using Invested Customers per Staff Member metric, is
     calculated using an LTM average for the total workforce, including US and UK
     workforce. Management information as at 31 December 2024.
 11  Month 0 is legal entity incorporation.
 12  Cost Base is the total operating costs, including Money Manager Costs,
     Advertising and Marketing Expenses and Technology Platform Costs & Other
     Operating Expenses, for the relevant period.
 13  Group Cost Base is the total Group operating costs, including Money Manager
     Costs, Advertising and Marketing Expenses and Technology Platform Costs &
     Other Operating Expenses, for the relevant period. US Marketing Expenses of
     £1m have been fully reimbursed by State Street, therefore have not been
     included in the Group Cost Base.
 14  Assets under Administration ('AUA') is the total invested value of pension
     assets within PensionBee Invested Customers' pensions. It measures the new
     inflows less the outflows and records a change in the market value of the
     assets. AUA is a measurement of the growth of the business and is the primary
     driver of Revenue.
 15  Invested Customers ('IC') means those customers who have transferred pension
     assets or made contributions into one of PensionBee's investment plans.
 16  UK Cost per Invested Customer ('CPIC') means the cumulative UK advertising and
     marketing costs incurred since PensionBee commenced trading up until the
     relevant point in time divided by the cumulative number of UK Invested
     Customers at that point in time. This measure monitors cost discipline of
     customer acquisition. PensionBee's desired UK CPIC threshold is £200-£250.
 17  Revenue Margin is calculated by using the last twelve months of Recurring
     Revenue over the average quarterly AUA held in PensionBee's investment plans
     over the period.
 18  Net Flows measures the cumulative inflow of PensionBee AUA from consolidation
     and contribution ('Gross Inflows'), less the outflows from withdrawals and
     transfers out ('Gross Outflows') over the relevant period.
 19  Revenue means the income generated from the asset base of PensionBee's
     customers, essentially annual management fees charged on the AUA, together
     with a minor revenue contribution from other services.
 20  Adjusted EBITDA Margin means Adjusted EBITDA as a percentage of Revenue for
     the relevant period.
 21  UK Adjusted EBITDA Margin means UK Adjusted EBITDA as a percentage of UK
     Revenue for the relevant period.

 

 A copy of this Q4 2024 Results Announcement will be made available post-market
 close on 22 January for download at:
 pensionbee.com/uk/investor-relations/results-and-reports.

 Enquiries
 Press

 Laura Dunn-Sims

 Steven Kennedy

 press@pensionbee.com

 +44 20 3557 8444

 Analysts and Investors

 investor@pensionbee.com

About PensionBee

 

 PensionBee is creating a global leader in the consumer retirement market with
 £5.8 billion in assets on behalf of 265,000 customers.

 Founded in 2014, we aspire to make as many people as possible pension
 confident so that everyone can enjoy a happy retirement.

 We help our customers to combine their retirement savings into a new online
 account, which they can manage from the palm of their hand.

 PensionBee accounts are invested by the world's largest investment managers,
 collectively looking after more than $10 trillion in savings between them.
 Each PensionBee customer has a personal account manager ("BeeKeeper") to guide
 them through their savings and retirement journey. PensionBee has an
 "Excellent" Trustpilot rating based on 11,500 reviews.

 As a public company, we aspire to the highest standards in everything we do
 because our customers deserve peace of mind. Our team of approximately 204
 professionals, based in London and New York, has one focus: you, our customer.

 PensionBee is listed on the London Stock Exchange (LON:PBEE).

 

Forward Looking Statements

 

 Statements that are not historical facts, including statements about
 PensionBee's or management's beliefs and expectations, are forward-looking
 statements. The results contain forward-looking statements, which by their
 nature involve substantial risks and uncertainties as they relate to events
 and depend on circumstances which will occur in the future and actual results
 and developments may differ materially from those expressly stated or
 otherwise implied by these statements.

 These forward-looking statements are statements regarding PensionBee's
 intentions, beliefs or current expectations concerning, among other things,
 its results of operations, financial condition, prospects, growth, strategies
 and the industry and markets within which it operates.

 These forward-looking statements relate to the date of these results and
 PensionBee does not undertake any obligation to publicly release any revisions
 to these forward-looking statements to reflect events or circumstances after
 the date of the results.

 

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