MONY Group plc (MONY) Earnings Call Transcript

Good. Well, I think everyone is here, so let's get going. Welcome to the 2019 Preliminary Results for Moneysupermarket Group. I am Mark Lewis, the CEO. And we're going to follow the usual running order this morning. So in a minute, Scilla will take over, run you through the financial delivery for the year and our update on our market, and then I will come back and talk about progress on our strategic delivery. After that, we'll take some Q&A. Cutting to the chase, it has been a year of delivery for the Reinvent strategy. For our customers, once again, we have helped households save over GBP 2 billion. For investors, we delivered the planned return to profit growth, with revenue up 9% and EBITDA up 7%, while also redistributing GBP 100 million in cash throughout the year. We delivered this despite the headwinds in the market for price comparison. The headwind that comes in the shift to mobile continued in 2019 and, if anything, grew a little stronger in the year. Our successful work to increase conversion rates and optimize the customer experience, combined with our disciplined approach to marketing, is combating these trends and underpinning the return to profit growth. With regard to new market growth, we are pleased with the work to drive increased retention through delivering a more proactive and personalized Moneysupermarket experience. We now have over 600,000 customers on Moneysupermarket, having their bills proactively monitored. These customers visit us more frequently, search for more products, save more money and are worth more for the business. This gives us confidence to keep pushing with this work, and we will support the brand with increased commitment in 2020. Similarly, we think that we can bring a personalized and automated service to MoneySavingExpert users. This will start in Energy, where we will update the MoneySavingExpert Cheap Energy Club to add what we believe will be the U.K.'s most trusted autoswitching service in the first half of 2020. So over to Scilla for a summary of the financial results.

So thanks, Mark, and good morning, everyone. Before I start, just a reminder that in these numbers, we've adjusted the 2018 comparative for IFRS 16, so you can get a good like-for-like sense of performance. So looking at the financial highlights, and as Mark said, we had a good year. Top line growth of 9% or 5% if we exclude Decision Tech. EBITDA grew slightly behind revenue, which reflected gross margin pressures, offset with some good cost control. Our reported EPS grew 11%, so ahead of that EBITDA growth, which reflected both lower adjusting items and a lower effective tax rate. We continued to leverage our technology platform, and our reinvestment rate fell 2 percentage points to 9%. Cash flow was very strong again, over GBP 110 million, reflecting the dynamics of our marketplace model. And we are pleased to have announced an increase in our full year dividend of 6%, reflecting our progressive dividends policy. As you would have seen from the statement this morning, our users remain engaged. We continue to have a strong group NPS of 74. Our active users grew slightly to 13.1 million, and we're proud to have helped household save GBP 2 billion. But before I go into more detail on our performance, I just wanted to take a step back and remind ourselves of the markets in which we operate, which we still expect to grow 4% to 5% over the coming years. So let's take a look at Insurance first, which, as you know, is the largest of our markets. It's still a growing market, albeit at high rates in channels other than car. And just a reminder that car for us is less than 50% of our insurance revenue. Car itself is also still in growth. It is the most highly penetrated from a switching perspective, but total policies are still growing. And that's due to both an increase in the car park and people continuing to drive later in their lives. There is still potential in car to grow switching through increasing -- sorry, reducing the frequency between switching. But if you look at the slide, and here, I'll focus on the 3 largest channels in insurance, so that's car, home and travel. There are 68 million policies that are written a year in those channels. Clearly, as you know, it's a market where the end product is time-limited, where you get an annual renewal notice, where we and our competitors have invested for a number of years in marketing and where a consumer is often required to hold the product. So it's maybe no surprise then that of the 68 million policies, just over 1/3 are already switched and many, 27%, are switched using a price comparison website. So let's just look at what the drivers are for growth. And these will vary a little by type of insurance, but I'd highlight 3 main things: firstly, increasing switching frequency, particularly in car; secondly, driving penetration within other channels; and finally, making sure that you deliver a good breadth of panel so that you can fulfill different consumers' needs and making sure you do so at a good price point. So an example here might be making sure that your panel can cover preexisting medical conditions in travel insurance. So what have we done? And what are we doing? Well, our approach to insurance is to make sure that we've got effective personalized switching prompts when policies are coming up for renewal. We've also looked at prompts that are going to help make our brands more front of mind and allow us to retain customers. And what you've seen here is our first step that are our MAT and car tax reminders. And we have and continue to develop broad panels of providers. And as you would have seen from our website, we're particularly focused on the price-competitiveness within car. So if you look at Money, and Money splits into 2 broad categories, banking and borrowing. Over 75% of our revenue comes from that borrowing side. So think credit products, think cards and loans. In general, and I'm talking at a market level, Money is a more promotional market. Rates at a macro level will drive, whether banking or borrowing is in the ascendancy. And at a customer level, promotions also act as a trigger into a switch. So rates and deals will drive search volumes. So it's no regular quarter action in that vertical, as you know. You kind of don't get that sticker shock that you might get when you open your annual insurance renewal. And confidence is also a key element of the decision-making process. And so consumers often still take the product from their own high street bank. And you see a lot of that reflected in the statistics in the slides. So here, we're looking at credit cards and loans, and there are 44 million in existence. Only about 25% of the market is switched and only 7% are switched by a price comparison website. So there's lots of room to drive penetration here. So again, let's have a look at those kind of drivers of growth. But again, I'm going to call out 3 things. There's a rule of 3. You'll see the theme here. And so firstly, building certainty for customers that what they see is what they get. Secondly, making sure that you've got the promotional products that you need in order to capture the customer attention in the first place. And finally, making sure that you're creating engagement trigger points. So again, looking at what we're doing to address those 3 things. Well, our eligibility tools do give consumers the confidence to search, knowing that their credit score isn't going to be impacted but importantly, that they're going to be presented with products and rates that they, as an individual, are likely to get. Second, we also are very lucky to have the power of MoneySavingExpert within the group. And as you know, it's a very, very highly trusted brand and one that can drive engagement through editorial recommendation. And finally, we've looked to create prompts that can become engagement levers. So you've seen the launch of Credit Monitor as the first step here towards driving more frequent interaction, using those changes in the credit score to drive engagement. And we've recently added a [ fourth ] to the function here, too. So let's look finally at Home Services. And these are nicely growing markets, both in Energy and Home Communication, and there's significant headroom to drive higher switching penetration in channels such as broadband. But today, I'm going to focus on energy, which, for us, is over 75% of revenue in that vertical. It is the largest market. So we are calling out 52 million energy accounts. And here, just remember that gas and electricity, at the same account, would count as 2 accounts in those numbers. About 20% of accounts are switched in the year, and that's online and off-line, but is only including provider switches. Of those, about half are switched by our price comparison website. So again, the opportunity is still to increase switching penetration. As you know, though, this has traditionally been a very low engagement category and lacked the call to action to drive that sort of switching consideration. So growing here is -- it's really a twofold challenge. It's firstly about engaging customers in the first place, overcoming that consumer inertia. And then it's also making sure that once the customer is at the top of the funnel, you make sure that they progress through that funnel. So that's often about actually helping them understand that it's easier to take that switch than they may believe. Through 2019, we've seen the price cap in the media reporting of it, acting as a call for action in Energy. And MoneySavingExpert's editorial power has helped in engaging their users. We've also, as you know and as we've shared before, we've had some really good wins in the last couple of years in improving the conversion of our customers as they go through the journeys. But moving forward, and Mark is going to come on to talk to you about this in more detail, our new monitoring and autoswitch proposition is going to help us grow further within the vertical. So that's the market. Let's kind of go back to our performance. And as I've already said, a good year of growth, with revenue growing 9% at the headline level or 5% if we exclude Decision Tech. We have solid performance in Insurance. And both in car and home, we had good growth in the first half. But those headwinds from natural search in the second half did act to temper full year growth. Money performance was disappointing at negative 2%, and the lack of promotional product that we discussed at the interims continued into the second half. We also saw a slowdown in the growth of searches for credit products towards the end of the year. We have strong energy switching throughout the year. And as you know, there were a number of reasons for that. We flagged before that our commercial teams did a fantastic job securing great deals through the year. The press coverage of the price cut did help it to generate engagement, and the power of our brands and the journey improvements that we've made enabled us to capitalize on those opportunities. So we finished the year with really good growth of 39% for Home Services. Decision Tech has also proved a good acquisition and delivered pleasing growth for us throughout the year. So moving on now to the income statement and looking at the shape of the P&L. As we've seen, adjusted EBITDA grew 7% on the year, so lower than that top line growth, which was really reflecting a reduction in the gross margin rate. We delivered a gross margin of 69%. That was over 2 percentage points lower than in 2018, and that reduction was driven by 3 kind of broad main things. So firstly, the consolidation of Decision Tech, where, as you know, their B2B margins are lower than the B2B margins of the rest of the group. The trend for customers to transition to mobile continue to put pressure on margin and that continued to cost us in the region of 100 basis points in 2019. And finally, as we touched on with our Q3 trading statement, we did experience some volatility in our natural search rankings during the second half, and that meant that we missed of higher-margin traffic sources. Those natural search changes impacted us particularly in Insurance, where price, [ this summer ] -- we'd always enjoy consistently high positions on the search page. Organic search has been a really key and core strength of our team over recent years, and we still remain very confident in our skills and capabilities here. And whilst I can't tell you that we're now back to those consistently higher positions that we previously enjoyed, we have seen some improvement in 2020. Then continuing down through the P&L, and depreciation and amortization was in line with plans and the year-on-year increase reflects some large technology assets that went live late in 2018. We had GBP 5 million of adjusting items in the year, GBP 2 million relating to the amortization of acquisition intangibles and the balance relating to strategy and reorganization costs. As we move into 2020, I expect that line will only include the ongoing amortization of acquisition intangibles. The reduction year-on-year, though, in adjusting items and a lower effective tax rate drove an increase in net profit ahead of EBITDA growth of plus 11%. Looking at costs, and these grew 11% or again 5% if we exclude Decision Tech. That increase was driven by 2 key -- main things: marketing, as you can see; and depreciation and amortization, which I've already explained. So let's take a look at those marketing costs, which grew 15% on the year. In online spend, our approach to digital marketing has remained unchanged. So that, as you know, is that we'll build up to breakeven on our first transaction. TV and radio remained broadly flat year-on-year despite the relaunch of the brand. And as we discussed with the interim, that increase in the other category here is driven by 2 things: the inclusion of the full year of DT costs and the strong energy performance, which drove an associated increase in cash-back costs to customers who switched using Cheap Energy Club. The marketing margin, therefore, reflects the gross margin trend that I've already discussed, falling to 61% from 63% in 2018. From a tech perspective, our cost reduced year-on-year both in absolute terms and as a percentage of revenue as we continue to leverage our group platform. That total tech spend also benefited from our teams now being in-sourced rather than us having to pay an outsourced margin. In other CapEx, we spent GBP 2 million on our new tech hub in Manchester, and we expect to spend slightly less than this in 2020 on the refurbishment of our Ewloe office. And that's in addition to the tech CapEx of 2020 of about GBP 10 million. As we've seen, our cash flow generation remained strong during the year, and we delivered GBP 140 million of operating cash. We did have a working capital outflow this year of GBP 5 million, and that was driven mainly by an increase in receivables. That, in turn, reflected a mix into channels and provide us with longer working capital cycles. Our strong cash flow continued, though, to enable us to return significant funds to shareholders, and that was GBP 100 million in the year, and we finished the year with net cash of GBP 24 million. Looking now at our capital allocation framework. And as you know, we continue to enjoy strong cash generation, and we expect that to continue into 2020 and beyond. Our framework of how we deploy that cash remains unchanged. So as you know, funding organic growth remains our top priority. Then comes our commitment to a progressive ordinary dividends growing alongside earnings. After that, we'll look to M&A to support and accelerate our strategy. And finally, as ever, we don't need to retain large cash balances, and so we remain committed to returning excess cash to shareholders. And finally, I just wanted to give you a bit more color on guidance for the year ahead. As we've seen, we remain confident in meeting full year market expectations for the year. You would have seen in the statement that we flagged that year-to-date. So in the first 6 weeks trading dynamics have improved compared with the exit rate of 2019. As we've also flagged before, we expect the car insurance market to return to premium inflation this year, and we expect that Money will return to growth during 2020. Mark will come on to this, but the initial experience of our monitor customers is looking positive. And so we've chosen to spend a further GBP 5 million in 2020 on brand in order to support that initiative. I do expect performance to be second-half-weighted, which reflects broader market dynamics, prior year comparatives and the timing of some initiatives. And finally, just to watch out and a reminder, this is the year that the HMRC payment calendar changes, so we'll be making 6 installments of corporation tax in the year rather than 4, normally. So do remember to model that cash outflow into your model. Thank you very much. And I'll hand you back to Mark.

Brilliant. Thank you, Scilla. Great. All right. Well, look, as Scilla has clearly laid out, this is a business with very strong fundamentals, whether that's our scale, whether it's our brand position in markets with structural growth, whether that's our highly efficient marketplace model or the strong cash generation. Let me now take a few minutes to walk us through the delivery against our strategic goals. Recap that -- in our Reinvent strategy, we have 2 sides. On the left, reaccelerate core growth, our work enhancing the existing comparison model with a real focus on customer experience optimization. On the right, new market growth, areas where we are positioning the group to outperform the market through changes in the proposition and extending the range of services we offer. Looking first at the left-hand side, reaccelerating core growth. It has been a strong year for both our major consumer brands. As you know, we rebranded Moneysupermarket around this time last year with positive results. Look out for new TV advertising to come soon. The brand's Net Promoter Score has moved forward in the year. On the provider side, I'm pleased with the strength of the panel, which we believe is the best in the business across multiple categories. MoneySavingExpert had a standout year for its users with record numbers of visitors and tip sign-ups. Once again, the strength of this truly consumer championing, editorial content underlined MoneySavingExpert as the go-to place for the U.K. public to understand the things that impact their finances. Record traffic around the PPI claim deadline and, of course, a fantastic job of helping millions of users navigate the introduction of price caps in energy. But as you know, at the bottom there, over the last couple of years, we have added a new capability: customer experience optimization. It is now business as usual, and it is working across the brands and continues to work for us. As you know, we guard our actual conversion rates as commercially sensitive. I do want to make sure you all understand the dynamics of how critical this work is to combat the headwinds in the market. Since we've started this work, we have increased conversion rates. The chart here actually shows conversion rates in the major insurance categories. And as you can see, the conversion rates have increased on desktop. More importantly, bottom left, they have also increased on mobile. This is really good work. The headwind comes from the fact that the conversion rates on mobile are lower than those on desktop. And as you know, this is true in just about all markets, be that retail travel or indeed, comparison. So as we see the mix shift towards mobile, the net effect is a suppression of the gains we're delivering, compounded by an increased prominence of paid search over search engine optimization on mobile. Of course, if we hadn't built this capability, the impact on the business would be more challenging. Mobile migration continues. And in 2019, it actually accelerated a little. We have previously discussed about a 1 percentage point margin headwind from this, and I suspect that continues into 2020. Now let's have a look at new market growth. In a minute, I'm going to spend a little bit of time talking about our work on personalization but first, let me just give some quick updates on our progress in B2B and in mortgages. It's been an encouraging first full year for our B2B decision -- business, Decision Tech. They have posted double-digit growth, showing strength in their historical core of home communications. In 2019, we added energy switching to the Decision Tech commercial offering using our group technology stack. This has resulted in a rapid market entry with what we believe to be a leading offer. Our Decision Tech has now secured 6 commercial partnerships in energy. On mortgages, we continue our work to digitize the mortgage market. We've added eligibility factors to the Podium platform, resulting in higher converting leads for our broker partners. We have direct integrations live with 4 of the market's leading lenders, offering product transfer rates for existing mortgage customers. And we'll continue to deepen these direct integrations through 2020. Earlier this month, we expanded our integration with Nationwide to offer customers an instant online decision in principle on their mortgage without leaving the Moneysupermarket site, a first for any U.K. comparison site. Right. Let's talk about personalization. This is one of the key initiatives for the group. Why? Because it speaks to the core comparison proposition, has the potential to fundamentally enhance the economics of the business. We all know what a positive economic model we've built with price comparison, that it provides real value for the user, that it matches risk profiles to the providers and that it generates sufficient returns for the business. But let's face it, we all know that it also has an Achilles' heel, that the customer experience doesn't naturally prompt people to repeat with a frequency. And as such, we choose to invest significantly in customer acquisition costs. But there's another way. Once you have sorted out your car insurance, you actively don't want to think about it for another year. And so we have to spend money to remind and prompt you to come back to us when you do. Now we do this well, but we think we can do it better. So what have we been doing? And how is it going? Well, look, following the brand relaunch of Moneysupermarket, we have now moved over 600,000 customers to monitored services. What does it mean? It means that we are being proactive on their behalf. They can now have a personalized home page that summarizes the status of their main bills and credit score all in one place. It means they have their credit score for free in their Moneysupermarket accounts, and we will alert them with updates and recommendations. It means we will monitor their energy tariff, check it each month and alert them to the next best deal when we find it. And it means we will automatically requote their car insurance and let them know when their tax and MAT are due. I'm going to be really clear. We do this because they are very helpful services for the customer, but explicitly, so that we give them a reason to visit more frequently than they would otherwise would. What does this look like for the customer? Well, it changes their relationship with Moneysupermarket, moving from being the place, which they turn to if they get an insurance renewal that they don't like, to being a trusted brand that is being personalized and proactive on their behalf, helping them to stay on top of their bills across multiple categories, allowing them to get money come. Remember, we can do this because of our unique position as a diversified comparison business, running multiple categories of our own proprietary technology stack and with a single view of the customer. The shift has the potential to enhance the underlying economics of price comparison. So let's have a look at what we are finding. We've been scaling our monitored services through 2019, and the impact on customer value is significant. In short, customers with monitored services return more, save more money on their bills and have higher value to the business. What's on the chart? Well, the chart shows directionally accurate. But you won't be surprised to hear commercially sanitized data for Credit Monitor customers compared to a statistically representative sample cohort of customers. First thing to note on the left is that monitor customers visit more and run more inquiries for products. This is obviously a good thing. Significantly, though, bottom left, they visit more across the range of categories we offer with increased cross-sell. The economics of monitor customers are also different. When they visit us, they tend to come through paid search less than similar customers, which is obviously favorable. In return, we spend a little more in the cost of servicing their inquiries, for example, running the soft credit searches or providing the credit score. But when you add all this up, the increased number of visits and cross-sell wins out, and these customers are already demonstrating higher value to the group. So our plans in 2020 are clear, seeking to increase the number of customers using our monitored services and to support the Moneysupermarket brand with increased marketing activity. So that covers Moneysupermarket. And I want to spend a couple of minutes talking about MoneySavingExpert. Remember this brand is a true consumer champion, with independent editorial content helping users navigate their finances. I mentioned earlier that 2019 was a record year for MoneySavingExpert. And indeed, just last week, you might have noticed it was voted the U.K.'s Most Recommended Brand in the independent YouGov survey that tracks the Net Promoter Score of all U.K. brands. MoneySavingExpert is a big player in energy switching, offering significant savings for users. It offers a full market comparison, which means it tries to show the savings available from all 60 or so of the providers in the market. The breadth of panel results leads to market-leading savings. There are currently about 130 tariffs on MoneySavingExpert cheaper than the Ofgem price cap, with savings running at around GBP 350 to GBP 370 for a typical user. So when it comes to working out how best to approach an autoswitching service worthy of the MoneySavingExpert brand, we knew we had to build something that delivers real value for users and match the savings that they could achieve if they wanted to do it themselves. And this is what has driven us to actually set out what I would call the first wave of autoswitching services, until we could be confident that we could be build one that was worthy of the MoneySavingExpert brand. The reality is that autoswitch is inherently compelling for users, but it is not straightforward. In order to make it work as a marketplace, there are a number of challenges that need to be overcome. We understand these because we have years of user insight, years of behavioral data and long-standing relationships with the energy providers. We think it's important that users get the best price tariff for them. The myth is that people just want the cheapest, but the reality is most users don't actually choose the lowest-price tariff. They choose the cheapest tariff that meets their personal preferences for factors such as service, brand reputation, green energy and so on. Users like the idea of convenience, but they don't want to lose control of not knowing who their energy is with, of being switched too frequently or being hit by surprise direct debits. For the providers, it is even more stock. Done badly, autoswitching can remove the ability for providers to differentiate on anything but price. Too bad, you might say. But the reality is the combination of short-duration tariffs with limited ability to differentiate is fundamentally challenging to provider economics. And if you don't have the right providers on your panel, then you can't offer the right value to the user. And this is why we have not been excited or felt able to endorse early autoswitching services. But we think we have found a way to deliver autoswitching that can be trusted by users and work for providers alike. It will launch in the first half. It is under wraps until then. But I've asked Martin Lewis, the founder of MoneySavingExpert, to talk you through the proposition and our views on the market. You can play the video. [Presentation]

When I'm on my TV road shows and I'm talking about energy, people tell me they're scared to do a comparison. So I bring them over to the computer. I say, I'll help you do it. And I'm there. And I ask them to fill in their details. No problem. That bit's easy. That's not what they mean by scared to do a comparison. The bit that really panics them is when they get the results and there's a long list of providers that they've never heard of, some with no customer service rating, some with limited customer service rating, and they're made to make a choice, and a choice that they don't really understand. And at that point, they often look at me and go, "Can't you just do it for me?" So of course, the premise of autoswitching is one that's very attractive to people. But it's also one that, so far, I've not been willing to put my name or MoneySavingExpert's name to because I don't believe the service lives up to what people really want. There are 2 main problems with the offerings out there. So first of all, well, there aren't enough providers. So you're not going to get a really good tariff. We need most of the market to be engaged and allowing autoswitch to happen. And second, there's no choice. People don't want homogenous sets. When I'm talking to them about energy, some really care about service. Some care about whether it's green. Some care about whether it's service or green, some want a fix, some want a name that they've heard of. And of course, all care about price. So actually, different people will choose different providers from the same choice. So when I was thinking about what MoneySavingExpert's autoswitch should be, for me, it wasn't simply just porting people to a new cheap provider each time because that takes the choice away from them. It had to involve a comparison. Now the service is autoswitch, but the underlying tech is auto compare and switch. We will, first of all, find out from people what they want, what are your preferences, what matters to you, how much is price, green, fix, name you know, service, how much do all of those matter to you? And then once we know, instead of giving you a huge choice that you then have to go through, we're going to say, "Based on what you've told us, that is your best tariff." Then you can choose to switch to it. And because we now understand what it is the individual wants, then each year, we can continue to switch them to their best tariff, not some idealized tariff but a personalized choice as if they had done the comparison themselves. Some people might still like to compare every month if they choose to do it. They can keep doing that. But those who just want an easy life but their exact choice, will be able to use MSE's new autoswitch service. And there isn't anything else like it on the market. We've been developing this for a long time. I'm really excited about it. I've been all over the team on it, and it's going to be fantastic.

Very good. All right. Let me try and summarize the key elements of our autoswitch proposition. For the user, it will offer tariffs from the existing provider panel, the same deals as if you did it yourself. For the provider, they will have the ability to differentiate on multiple factors to provide sustainable economics. Of course, we are able to leverage our group capabilities in our move into autoswitching. Our existing technology, the existing commercial relationships and, most importantly, with MoneySavingExpert, we have the trust and existing communication channels to launch the proposition. So let me wrap up. We are pleased with delivery in 2019. We've delivered the planned return to profit growth, and we are making exciting progress on our strategic delivery. We're operating in growing markets, but there are also headwinds in the economics of core comparison, driven by the role of paid search and the shift to mobile. Our optimization gains are combating these headwinds. We think we are well placed to move the price comparison experience and economics forward with our personalization agenda. Our work to date on Moneysupermarket has shown that we can increase customer retention. And we are excited to increase the number of customers using our monitored services in 2020. Having deliberately sat out the first round of experimentation, we're about to bring autoswitching to MoneySavingExpert in a way that meets users' needs and provide sustainable economics for our providers. It's going to be an exciting year. Trading is off to a good start. And I'm happy to confirm the Board's confidence in meeting our full year expectations. Finally, before we open up for Q&A, I wanted to make a couple of comments about my indication to Robin of my wish to discuss CEO transition. I think Moneysupermarket Group is a fantastic business. As we've shown today, it is delivering on its strategy. It's my absolute honor to lead a group with such a compelling mix of strong purpose and strong business model. As we progress through the third year of the Reinvent strategy, I found it the right time to consider my position. The group is in great shape. I'm very proud of the team we have built, what we have delivered over the last few years. Having reset the business at the start of 2018, we have worked hard to transform the group, having built new capabilities and adding new revenue streams. The plans for 2020 are set. The team is well placed to deliver them, and we have confidence in our growth expectations. I will work with Robin and the Board to ensure that process is managed in an orderly fashion. But for now, it is very much business as usual. As for my next steps, well, there are a range of things I want to achieve in my career but today is about this business. So I will politely defer that conversation to a later date. And with that, let me open up the floor for questions. Thank you very much.

Joe Barnet-Lamb from Crédit Suisse. Three for me to start with, please. Firstly, with regard to Home Services, looking at Q1 '18 (sic) [ Q1 '19 ], I think a lot of the strengths in Home Services came from the back end of the quarter. Given the comment that you've made about it being flat year-to-date, could you help us understand the shape of that quarter? Secondly, with regards the transition to mobile and the impact that's having on gross margin, can you help us understand how far through that transition we are and how much longer you think it will go on for? Mark obviously touched on it continuing into 2020. And then thirdly, can you quantify the SEO headwinds and how long you expect that to continue?

Of course, Joe, I'd like to remind you, you said you didn't have any questions before we sat down. But Scilla, why don't you do the first one? And I'll do the second, and then maybe you go back and do the...

Sure. So just for the transcript, you referred to Q1 '18, I think Q1 '19 for Home Services. Yes, 2020. Keeps me up all the time, Joe, just slides by. And I'm not going to give you a 6-week forecast. But just to remind everybody of what we saw in the first quarter last year. So we saw really setting a stellar growth in terms of the numbers that we printed. A reminder of the shape of that, though. So clearly, we had the announcement of the first change in the price cap for midway through that quarter. And that and the sort of press surrounding that, combined with some good tariffs and some exclusives that we had does mean -- did mean that the performance in that quarter was sort of second-half-weighted. We said within the outlook that we've, so far, year-to-date, performed flat on the prior year. We're comfortable with our growth expectations across the year. But I'm not going to give you a 6-week preview for the second half of Q1, Joe.

Thank you very much. Transition to mobile. So I think we've previously said that we felt as though we were over halfway through on this. And it is true that the majority of our visits to the site now happen on mobile devices. Remember, mobile is growing. Tablets is now relatively small in the mix, and mobile is where the growth is. But that movement did continue in 2019. And so as I said in the summary, it didn't slow down in 2019. And actually, the pace with which the migration is happening stepped up a little bit in 2019. We don't know if it will continue at that level or step up further in 2020. We're guiding that we think that's about a 1 percentage point headwind that comes from it this year.

Then looking at SEO for last year, so as you know, most of that impacted us within the insurance vertical. So that's what we're talking about. I'm not going to precisely quantify it, but I'd point you towards 2 things in terms of what we've said. So when I was talking about the sort of shape of the gross margin change year-on-year, I sort of said 1 percentage point DT, 1 percentage point shift to mobile and the largest element of the balance was the transition in terms of traffic mix away from SEO. And if you go back and look at what we said in Q2 last year, so we just printed plus 4 from an insurance vertical. And we talked about good momentum. So I think you can infer from that what we were hoping we might be delivering in Q3 and then we reported actually plus 3 for the quarter. So I think both of those things are sort of relevant touch points for you.

Andrew?

It's Andrew from Barclays. I've got 3 as well. First one on these -- the monitored services, the 600,000 number, can you give us a sense of that plateauing or accelerating? I'm just trying to understand, it's about kind of early adopters who really care about switching? Or is this now becoming mass market and you think that can become a really big number? Second question back to the autoswitching, anything you can share a bit more about the economics from a provider perspective in terms of how you're thinking about it? I guess [ there are already ] talks about a CPA-type model, is that kind of comparable to a normal switch? And I guess it's going to increase churn. So how are providers thinking about that? And then third one, so maybe one for Robin, just on the search. Anything else you can share in terms of kind of time line, internal, external? Any other color you could share would be great.

Okay. I'm going to actually tackle the third one. We have nothing more to share today on that, on time line. I know Robin will be around after the session, but there's nothing more we have to say on that today. And remember, as I've tried to address, I am here, no date is set, and it is business as usual. On -- if it was okay, I'll take the monitoring and the autoswitch question. So on monitoring, we've announced over 600,000 customers. We're pleased with that scaling number in 2019. Obviously, we want it to be a bigger number, and we are confident in our ability to grow the number of monitored customers. Your question is are they early adopters and so on? We have tried to be as statistically robust as we can be in our analysis. So when -- risk of going down a statistical rabbit hole, which I know you will love, but the cohort -- so which [ you'll laugh ] right? But the cohort that we have shown in the presentation is deliberately determined to strip out such factors as you might be alluding to. So exciting times. And remember, it's not just Credit Monitor. We also have Energy Monitor and Car Monitor in the mix as well. As for autoswitching, the economics for the provider is one of the key elements here. Let's not forget the user side of this is very critical as well in that people want the right tariff for them depending on their preferences. And actually, they need the switches to be managed very, very smoothly so they don't get surprised by direct debits, which come out of nowhere. But the provider side is where the economics is really interesting and where we have worked very closely with the providers in order to build a service that meets both the needs of both sides of the marketplace. I think as we've said under the slide, we are doing this under the existing commercial model that we have with providers. And the really critical piece in there is actually allowing the marketplace to work in a way that meets both sides by creating a service which allows the providers to differentiate on the things, which they think that they are best at, which is actually also what the users want as well. So as Martin alluded to in the video, understanding the preferences of users around things like green energy or service and allowing the providers to differentiate. And that's what underpins the sustainability of the economics. Any questions? I think we'll go here, and then we'll go right.

It's Natasha Brilliant from Citi. Three questions as well, please. Firstly, just on the Insurance, just coming back to the algorithms. Scilla said, I think, you're almost back to your previous sort of levels in terms of the search rankings. Are you confident you can get back to those levels and how long it will take? And then what's the risk around further algorithm changes and this having a sort of ongoing impact as we go forward? Secondly, just on the FCA review on Insurance, keen to get your thoughts on how you think that might drive both searches and also conversions? Have you got any thoughts around that? And then finally, just on Money. Just to be clear, when you talk about growth in 2020, is that on an aggregate basis for the full year? Or is that returning to a positive rate by the end of the year?

Do you want to start on FCA? Then I might just build on it.

I will start. I didn't quite say what you've repeated back to me. And as you said, I hope I didn't. What I said is we haven't returned to the kind of consistently high position that we enjoyed in 2018, in the first half of 2019. But we have seen some improvement as we go into 2020. And that's an important difference to land. Do you want to talk about further algorithm changes?

Yes. Why don't I talk about that? Algorithm changes on search engines are a part of life in this industry and any online industry. The key question, I think, in the business is do you have the skills and the capability to identify them and adapt and so on? I think we have a very good record in that regard. That said, without doubt, and there's plenty of commentary on this across multiple industries, the algorithm changes that we saw in the -- around Q3 last year, looked a little bit different from ones that we've previously seen in that they didn't settle as quickly. In fact, they've created a little bit more volatility than we had seen in previous algorithms. And I think there's a very consistent commentary around that across the industry now. So our position is exactly as Scilla described. And we're good at this stuff, so. Should I do FCA, you do mind? Yes. FCA, so we are waiting on the -- final report is due in Q1. I haven't seen if it's come out this morning, but I assume it hasn't. Our engagement on it so far has been very positive. And remember, the regulators have declared very strong positions that comparison is a force for good and does help users deliver value. We're anticipating that any supply side remedies will fall on protecting the very vulnerable, and that's obviously a good thing. But really, all the movements that we continue to hear is encouraging signs around demand side remedies, making it easier to switch, easier to port accounts over from one provider to another. And that does seems to be a pretty consistent trend now from the regulator. So that's our understanding of what will come.

I think the one, though, that I'd add on that is, and it's often forgotten when we're talking about it is remember, within insurance, in particular, what consequently drive the switch is when you had a risk changing event. And clearly, the market study has [ been putting it ] out there. Just in terms of Money, the guidance that we've given is that we will return to growth during 2020. So I'm not going to add anything else on that. And as we've sort of said, in the first 6 weeks, we have seen some improvements on performance. So take that as we know we've had some improvements versus where we actually [ marketed ].

Thank you. Are there any other questions?

Bridie from Stifel. Just coming back to the partnerships, these 6 partnerships that you have announced in energy with Yolt and several others. Are they actually generating any leads? And the -- or is it sort of just on the marketing stage at the moment?