Strong start to the year with record partner signings in the USA Good customer growth up 14% to 7.5m Group profit up 9% to 28.7m Group retention at 82% Adjusted profit before tax 1 ( m) 26.0 26.2 8.4 9.4 28.7 11.6 Step change in the USA with 49m partner households Customer numbers up 2% in the UK Good growth in France and Spain Positive discussions in New Markets 21.1 20.7 21.2 HY15 HY16 HY17 UK Established International New Markets Net Interest Interim dividend per share up 8% to 4.1p Customer numbers (m) 5.9 6.6 3.8 4.5 7.5 5.3 2.1 2.1 2.2 1. All references to adjusted EBITDA, adjusted operating profit or loss, adjusted profit before tax and adjusted earnings per share throughout the presentation exclude the amortisation of acquisition intangibles. HY15 HY16 HY17 UK Customers International Customers 2
Group financial summary million HY17 HY16 Δ% Revenue 314.3 262.3 +20% Adjusted EBITDA 47.9 39.5 +21% Adjusted profit before tax 28.7 26.2 +9% Net debt 252.9 202.2 +25% Debt: Adjusted LTM EBITDA 1.9x 1.8x Adjusted earnings per share 6.8p 6.0p +13% Dividend per share 4.1p 3.8p +8% Good revenue progression, principally in the USA and Spain EBITDA of 47.9m up 21% on the prior period Adjusted profit before tax up 9% to 28.7m 3
Foreign exchange Effect on ( m) Average exchange rate Revenue Adj. operating profit HY17 HY16 Δ% HY17 HY17 USA $ 1.37 1.54 (11%) 10.0 0.3 France 1.22 1.39 (12%) 3.8 0.9 Spain 1.22 1.39 (12%) 6.9 0.8 New Markets 1.22 1.39 (12%) 0.7 0.2 21.4 2.2 Strong underlying performance benefited from FX tailwinds Full year translation benefit up to 9m on adjusted operating profit 1 +/- 10 US cent movement in /US$ would have a 2.0m impact on full year adjusted operating profit +/- 10 Euro cent movement in / would have a 2.5m impact on full year adjusted operating profit 1. Current currency 1.17/$1.25. 4
Divisional financial performance Revenue Adjusted operating profit/(loss) million HY17 HY16 Δ% Δ%CC 1 HY17 HY16 Δ% Δ%CC 1 UK 134.8 123.6 9% 9% 21.2 20.7 2% 2% USA 86.0 59.2 45% 29% (1.1) (1.4) (21%) (27%) France 31.4 27.5 14% 1% 8.0 7.1 13% Spain 57.8 44.4 30% 15% 4.7 3.7 27% 12% Established International 175.2 131.1 34% 18% 11.6 9.4 23% 2% New Markets 6.7 9.9 (32%) (39%) (1.7) (2.3) (26%) (17%) Inter-segment (2.4) (2.3) 4% 4% Group 314.3 262.3 20% 12% 31.1 27.8 12% 4% UK profits up 2% to 21.2m reflecting higher customer numbers Strong revenue progression in the USA, with continued investment for customer growth Continued good performance in France and Spain Investment in New Markets expected to be 6m in FY17 1. CC: Constant currency ( 1:39; $1.54: 1) 5
Cash flow performance - strong cash generation 54.0 252.9 169.5 47.9 21.5 27.5 8.3 4.8 2.9 0.1 198.9 3.2 15.6 Net Debt 31 March 2016 Adjusted EBITDA Non Cash Items Working Capital Capex Ordinary Dividend Tax Foreign Exchange Net Interest Other Underlying Net Debt Acquisitions Net Debt 30 Sept 2016 Strong cash conversion 1 at 114% of adjusted operating profit Investment in working capital of 15.6m in line with prior year Acquisition of Utility Service Partners Inc. completed in July 2016 Debt: Adjusted LTM EBITDA at 1.9x Committed funding facilities of 400m 1. Cash conversion is calculated as cash generated by operations divided by adjusted operating profit. 6
Capital investment - driving efficiency HY17 capital expenditure - Technology investment > Core customer system > Claims system > Other technology - Partner payments > Endesa in Spain > LDE in France Capital Investment ( m) 64m 65m 20 20 21m 44 4 45 17 FY16 HY17 FY17 est. FY17 full year capex of 65m Underlying/Technology Partner payments 7
France - good momentum with our partners! Customer numbers up 6% to over 1m! Continued high retention rate at 89%! Operating profit of 9.7m Total customers (m) Operating profit (!m) 0.9 0.9 1.0 1.0 9.3 9.3 9.7 9.7 HY14 HY15 HY16 HY17 HY14 HY15 HY16 HY17 8
Spain - continued good growth Customer numbers up 10% to 1.2m Continued strong partnership with Endesa Operating profit of 5.9m Total customers (m) 0.6 1.0 1.1 1.2 Operating profit ( m) 3.8 4.8 5.3 5.9 HY14 HY15 HY16 HY17 HY14 HY15 HY16 HY17 9
UK - customer numbers up 2% to 2.2m! Solid customer acquisition added 0.1m gross new customers! Retention remained strong at 80%! New partnership with Dee Valley Water! Testing LeakBot with home insurers Gross new customers (000) 110 131 132 80 HY14 HY15 HY16 HY17 10
UK - developing a heating installation business Developing a full heating repair, service and installation business - Integration of HESL complete - Agreement to acquire npower s home assistance contracts Boiler installation through franchised network - 18 established franchisees - Integrating smart thermostat with boiler installations 11
USA - record partner signings in the USA! Customer numbers up 32% to 2.8m!!! 49m affinity partner households A record 60 new partners signed adding 6.8m households USP integration on track Total customers (m) 1.4 1.7 2.1 2.8 Affinity partner households (m) 22 28 31 49 HY14 HY15 HY16 HY17 HY14 HY15 HY16 HY17 12
USA - signed 60 new partners adding 6.8m households FY13 FY14 FY15 FY16 USP HY17 +0.8m households 22m +4.4m households 26m +2.5m households 29m +2.8m households 32m +9.4m households 42m +6.8m households 49m!!! Business development investment realising benefits Record number of new partners Excellent new partner pipeline Deerfield Beach Florida 13
USA - significant progress toward long-term targets HY16 Capital Markets Day HY17 Future Households 31m 43m 49m 80m Customers 2.1 2.7m 2.8m 8.0m Penetration 7% 6% 6% 10% Income per customer $92 $96 $100 14
New Markets - international plans are well progressed Encouraging joint venture discussions in Italy Utility joint venture preferred new country opening model Joint commitment Shared cost Replicate success of our UK and French joint ventures Good prospects pipeline Prospecting in 15 countries 1 Positive discussions with utilities Current business Prospecting 1. Australia, Brazil, Chile, China, Czech Republic, India, Finland, Japan, Mexico, Netherlands, Poland, Sweden, South Korea, Taiwan and Turkey. 15
Investment in digital and innovation! Global Digital Technology Group driving efficiencies -! Digitising our current business -! Compatible systems across businesses -! Re-launch of our US and French websites!!! Developing our online home repair and improvement offer -! Enhancing Trace software platform -! Appeal to younger homeowners -! Testing in France and Spain 16
Summary - confident of good growth for the full year Established businesses performing as planned Business development delivered great results with strong pipeline Another step change in the USA, on track for 80m households target Remain confident of achieving good growth in 2017 17
Appendices Divisional KPIs Divisional results local currency Divisional results sterling Group balance sheet Group cash flow Our financial business model 18
Divisional KPIs UK HY17 HY16 Change Affinity partner households m 24 24 +1% Customers m 2.2 2.1 +2% Income per customer 97 93 +5% Policies m 5.4 5.3 +2% Policies per customer 2.5 2.5 Retention rate % 80 83-3ppts France HY17 HY16 Change Affinity partner households m 15 15 Customers m 1.0 1.0 +6% Income per customer 101 101 Policies m 2.3 2.3 +2% Policies per customer 2.3 2.3 Retention rate % 89 89 USA HY17 HY16 Change Affinity partner households m 49 31 +55% Customers m 2.8 2.1 +32% Income per customer $ 96 92 +4% Policies m 4.3 3.2 +32% Policies per customer 1.5 1.5 Retention rate % 81 82-1ppts Spain HY17 HY16 Change Affinity partner households m 12 15-20% Customers m 1.2 1.1 +10% Income per customer 41 39 +5% Policies m 1.4 1.3 +7% Policies per customer 1.2 1.2 Retention rate % 77 78-1ppts 19
Divisional results - local currency UK P&L HY17 HY16 Change Total revenue m 134.8 123.6 9% Operating costs m (113.6) (102.9) 10% Adjusted operating profit m 21.2 20.7 2% Adjusted operating profit margin % % 16% 17% -1ppts USA P&L HY17 HY16 Change Total revenue $m 117.2 91.1 29% Operating costs $m (118.8) (93.3) 28% Adjusted operating profit $m (1.6) (2.2) -27% France P&L HY17 HY16 Change Total revenue m 38.4 38.1 1% Operating costs m (28.7) (28.4) 1% Adjusted operating profit m 9.7 9.7 - Adjusted operating profit margin % % 25% 26% -1ppts Spain P&L HY17 HY16 Change Total revenue m 70.6 61.6 15% Operating costs m (64.7) (56.3) 15% Adjusted operating profit m 5.9 5.3 12% Adjusted operating profit margin % % 8% 9% -1ppts 20
Divisional results - sterling UK P&L HY17 HY16 Change Total revenue m 134.8 123.6 9% Operating costs m (113.6) (102.9) 10% Adjusted operating profit m 21.2 20.7 2% Adjusted operating profit margin % % 16% 17% -1ppts USA P&L HY17 HY16 Change Total revenue m 86.0 59.2 45% Operating costs m (87.1) (60.6) 44% Adjusted operating profit m (1.1) (1.4) -21% France P&L HY17 HY16 Change Total revenue m 31.4 27.5 14% Operating costs m (23.4) (20.4) 15% Adjusted operating profit m 8.0 7.1 13% Adjusted operating profit margin % % 25% 26% -1ppts Spain P&L HY17 HY16 Change Total revenue m 57.8 44.4 30% Operating costs m (53.1) (40.7) 31% Adjusted operating profit m 4.7 3.7 27% Adjusted operating profit margin % % 8% 9% -1ppts 21
Group balance sheet million 30 Sept 2016 30 Sept 2015 Non-current assets Goodwill 290.8 237.0 Other intangible assets 264.5 180.5 Property, plant and equipment 36.2 30.5 Investments 8.6 4.9 Deferred tax assets 5.5 5.6 Retirement benefit asset 1.5 605.6 460.0 Current assets Inventories 3.0 1.0 Trade and other receivables 378.3 292.2 Cash and cash equivalents 76.2 48.4 457.5 341.6 Total assets 1,063.1 801.6 Current liabilities Trade and other payables (376.4) (267.7) Current tax liabilities (3.2) (0.8) Obligations under finance leases (0.8) (0.6) Bank and other loans (25.0) (405.4) (269.1) Net current assets 52.1 72.5 Non-current liabilities Bank and other loans (302.1) (249.6) Other financial liabilities (4.2) (2.0) Retirement benefit obligation (1.6) Deferred tax liabilities (22.1) (17.3) Obligations under finance leases (1.2) (0.4) (331.2) (269.3) Total liabilities (736.6) (538.4) Net assets 326.5 263.2 22
Group cash flow Six months ended Six months ended million 30 Sept 2016 30 Sept 2015 Adjusted operating profit 31.1 27.8 Amortisation of acquisition intangibles (6.5) (4.9) Operating profit 24.6 22.9 Depreciation and amortisation 23.3 16.6 Non cash items 3.2 2.4 Increase in working capital (15.6) (16.7) Cash generated by operations 35.5 25.2 Net interest (2.9) (1.4) Taxation (8.3) (8.1) Capital expenditure (21.5) (29.2) Repayment of finance leases (0.4) (0.2) Free cash flow 2.4 (13.7) Purchase of investments (0.5) Acquisitions (54.0) (0.1) Equity dividends paid (27.5) (125.3) Issue of shares 0.1 1.4 Net movement in cash and bank borrowings (79.0) (138.2) Impact of foreign exchange (4.8) (0.1) Finance leases 0.4 0.2 Opening net debt (169.5) (64.1) Closing net debt (252.9) (202.2) 23
Our financial business model UK FY16 82m 10m 292m 200m 58m Gross Revenue IPT Underwriting Net Revenue 3rd party claims handling and other income Repair network revenue Reported revenue Repair AP network costs commissions Marketing costs Call Centres Overheads Adjusted Operating Profit 24
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