PBEE Pensionbee Group Plc

Assets under Administration increased by 40% year on year to £5.2bn (June 2023: £3.7bn), underpinned by strong Net Flows from new and existing customers and supportive markets.

Revenue for the quarter increased by 40% to £8m (Q2 2023: £6m), with Annual Run Rate Revenue having increased by 39% to £32m (June 2023: £23m).¹

Invested Customers increased by 19% year on year to 252,000 (June 2023: 211,000), demonstrating strong continued growth. Customer Retention Rate was 96%, driven by continued strong customer satisfaction (4.7★ Trustpilot score) and ongoing product innovation.

Positive Adjusted EBITDA achieved for the Group for the quarter (Q2 2024: £0.1m vs. Q2 2023: £(2.9)m), with the UK business remaining on track to achieve Adjusted EBITDA profitability for FY 2024.

Strong cash balance of c.£10.9m as of June 2024.

Efficient Investment in Customer Acquisition and Growing Brand Awareness: PensionBee's UK business continued to grow its brand and acquire customers efficiently, investing £2.3m in diversified marketing activities across the quarter, bringing the cumulative marketing investment since inception to £61m. Each £1 of marketing expenditure generated £82 of Net Flows in H1 2024 an increase of 20% year on year (H1 2023: £69), demonstrating the effectiveness of marketing expenditure deployed.² Cost per Invested Customer continued to demonstrate a downward trajectory (Q2 2024: £242 vs. Q2 2023: £247), highlighting the strength of the Company's marketing capability, the efficiency of spend, and the importance of household brand awareness in driving customer acquisition.³

Leadership in Product Innovation: PensionBee has continued to innovate to meet the needs of its UK customers. PensionBee has released helpful, engaging tools, such as new investment-related features providing increased transparency and educational content.

Focus on Excellent Customer Service: 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 10,900 Trustpilot reviews and the maintenance of rapid customer response times through tax year end.

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 23% productivity improvement year on year (Q2 2024: 1,264 Invested Customers / FTE vs. Q2 2023: 1,026 Invested Customers / FTE).⁴

Aim to deliver sustained and high Revenue growth by continuing appealing to the mass market, acquiring more new customers and growing customers' pension balances.

Pursue a c.2% market share of the £1.2tr UK transferable pensions market over the next 5-10 years, equivalent to c.1m Invested Customers (assuming an average pension pot size of £20,000-25,000).⁵

Expect to maintain relative Revenue margin stability, translating into a long-term Revenue ambition of c.£150m in the UK.

Given historical investment in brand and technology over many years, and the achievement of ongoing Adjusted EBITDA profitability in the final quarter of 2023 and again in this quarter, the UK business is on track to deliver Adjusted EBITDA profitability for the full year 2024.

Ambition to achieve long-term EBITDA Margins of over 50%, leveraging the scalability of the technology platform, through further automation while maintaining the high quality of service, and by steadily continuing to reduce the Cost per Invested Customer.

On 18 July 2024, PensionBee announced the launch of its US business, confirming that its subsidiary PensionBee Inc. had entered into a strategic partnership with its long-standing asset management provider, State Street Global Advisors ('State Street'). The United States is the world's largest Defined Contribution pension market, representing approximately 80% of the global total and $22.5tr in assets.⁶

PensionBee will deploy its award-winning online retirement proposition and proprietary technology, enabling US consumers to easily consolidate and roll over their 401(k) plans and Individual Retirement Accounts ('IRAs') into one new PensionBee IRA. PensionBee Inc. is registered with the Securities and Exchange Commission ('SEC') as an investment adviser, enabling the company to operate federally and statewide without additional registrations.

PensionBee Inc. offers a range of investment portfolio options, with underlying State Street model portfolios. Each investment portfolio is constructed exclusively with Exchange Traded Funds ('ETFs') managed by State Street.

The PensionBee IRA will be offered under a wrap fee program, including the PensionBee advisory service, asset allocation and management fees and custody fees. The overall cost will be 0.85% of assets under management, of which PensionBee will retain approximately 0.55% after asset allocation, investment product and custody costs. The average account balance is expected to be approximately $50,000.

State Street will provide meaningful marketing support to PensionBee as it uses its data-led, multi-channel customer acquisition approach to attract new customers. Under the terms of the agreement with State Street, the annual amount of the marketing support is variable based on the achievement of certain net new asset thresholds. For example, marketing support is anticipated to be $2m in 2024 and in 2025 the support will be at least $4m. Marketing support is expected to continue for 5-7 years. PensionBee expects a US Cost per Invested Customer of similar proportions to its UK business over time.

PensionBee Inc. is a wholly owned subsidiary of PensionBee. PensionBee Inc. is financially managed separately to PensionBee Group's UK business. PensionBee Inc. is separately regulated by the SEC.

PensionBee expects its US business to grow rapidly, aiming to manage $20-25bn in US Defined Contribution assets over the next decade, such that it becomes of equal importance to its growing UK business.

PensionBee Group will capitalise PensionBee Inc. with an injection from the existing resources of its Group balance sheet (approximately $4m over 36 months).

PensionBee Inc. is targeting profitability in the medium-term.