Good day, and thank you for standing by. Welcome to the MoneySuperMarket Group Interim Results Q&A Conference Call. At this time, all participants are in a listen-only mode. We will be going directly into a question and answer session in just a minute. Please be advised that today's conference is being recorded. To ask a question during the session, you will need to press star one on your telephone. Please go ahead and do this now. If you require any further assistance, please press star 0. We will start in just a minute. Thank you, everyone. I will now hand over to CEO, Peter Duffy, to start the meeting. Thanks, Nicole, and good morning, everyone, and thanks very much for joining us. I'm Peter Duffy, CEO of MoneySuperMarket. Also on the call with me this morning, and in the room with me this morning is Scilla Grimble, our CFO. We're both very much looking forward to taking your questions. I hope you had the opportunity to have a look at the presentation online, and I'd just like to summarize the main messages which we are communicating this morning. Number one, we've made good strategic progress against the strategy we shared back in February, particularly in terms of acquisition efficiency and our data infrastructure. We've made major upgrades to our digital marketing, and we're well on the way to having a leading data and analytics platform, and I'm pleased with the progress we've achieved so far. In terms of trading, the story is more mixed, with revenue for the second half down 11% as we lapped a largely pre-COVID quarter one last year, but also met some challenging market conditions, especially in energy. EBITDA fell 18%, but with a strong gross margin performance, up 3% to 70%, with most of that improvement as a direct result of actions we have taken. We've maintained the interim dividend at GBP 0.031 per share, reflecting our continued strong cash generation, and we're confident of meeting full-year profit expectations. With that, Nicole, can I ask you to open the virtual floor to questions, please? Thank you. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. The first question comes from the line of Joe Barnet-Lamb at Credit Suisse. Please go ahead. Excellent. Thank you, Peter. Thank you, Scilla, for taking my questions this morning. You gave some useful color, both on the presentation and in the release, around the strategic progress made on customer acquisition and related gross margin benefits. I have two related questions to that. Firstly, insurance revenues were somewhat weaker in Q2 than I anticipated. Was that solely driven by market weakness, i.e. the premiums, as discussed in Scilla's presentation, or were you perhaps pushing on customer acquisition less hard, which in turn aided margin? Secondly, these gross margin benefits have come through remarkably quickly. Peter, you spoke about believing there is much more to be seen from data and more efficient bidding. Can you confirm, therefore, you expect further margin expansion in 2H and FY 2022 versus 1H 2021 levels, or will there be a trade-off with growth? Then my final question is around vouchers within car insurance, and specifically the GBP 150 redeemed through the year. Can you talk a bit about how that GBP 150 is funded and what your economics would be on a product like that? Thank you. Yeah. Thanks very much, Joe. I think you were first last time around as well. Three really good questions. Look, I'll split this with Scilla. On insurance revenues, pretty much it's a bit of an obvious thing to start with, but it's the sum of four parts, car, home, life, and travel. I'll get Scilla to give an overview of each of those markets, and I'll come back on the second part of the question, really about PPC and margin. Scilla, do you want to just kick off with. Sure The main story? Let's look at Q2 in particular, Joe, which is I think is where the heart of where your question's going. 5% up in that quarter. What we've reminded everybody of is travel insurance basically still remains negligible, really, in terms of revenue in that quarter, as it has, frankly, since last year. Home insurance has really, I think, a mature market. We are seeing lower premiums, sort of as described in the RNS and within my presentation this morning. That's sort of reflecting there in terms of what's happening on trade, where we are still lower year-on-year in Q2. Life is the area where I think it's the fair point in relation to customer acquisition versus top line. Many of you will know that we've had a cashback incentive which has run for quite a long time in life insurance. We've tested in the past the quantum of that cashback. What we tested within the first half, and particularly towards the sort of second quarter in the half, was turning that off and pulsing it rather than it being an always-on incentive. I'm confident that that has put us in at least as good, if not better place in terms of pound notes gross margin. Car, we were up in Q2. A reminder in terms of the shape of that in the prior year when June onwards was when we got the sort of really strong demand last year as a result of the release of pent-up demand following the lockdown. That's probably what I would say in terms of the shape, and I'll maybe hand you over to Peter to add a bit more color as to go forward. Yeah. If I just pick up the second half of the first question, then move that into the second question, Joe. A big part of this, obviously, is PPC. What I can say to you is, whilst we've always had the strategy of bidding up to break even, we're now implementing that with rigor. The reality of those strategies in practice is that when you have an envelope like that, you sort of A/B test around it. You want to make sure that you're not cutting off your nose to spite your face. You're constantly running trials to begin to understand if that is the right cutoff. That is happening with rigor as well. The outcome of that is that I can pretty confidently tell you that it is a more efficient outcome rather than a reduced outcome that we're getting to. I think it's a very logical question to say, are you essentially just doing less at a higher margin? I think the answer to that is no, that isn't what is happening at the moment, bar what Scilla have to say on life. In terms of opportunity going forward, I think the reason we're optimistic is we haven't really turned the smarts on from SA360 yet. The platform went in towards the middle part to the end of quarter two. As we begin to use it in anger, as described in the presentation this morning, we can begin to use our first party data more, but also increasingly, we get sort of more real time data feeds. We get more automated approaches. What that means in practice is that we bid in more granular ways on much smaller subsets of customers, potentially down to one customer as an individual strategy in terms of what we do. We're just not there yet in terms of that being switched on. That is coming literally on a week by week basis in terms of the functionality rolling out. I'm confident that there is more to come. Inevitably, there is a trade-off then between that increased margin versus volume. These markets have different levels of heat and competitive intensity at different points in time. The outcomes can vary, but there is certainly more opportunity to come. In terms of vouchers, Scilla do you want to just pick up on the economics of that? Sure. As we've alluded to, the car incentive is a trial at this stage, and so we were very keen to make sure that we could manage and understand our costs going in, and focus very much on what that did in terms of driving conversion and hopefully engagement through the year. Follow up on that if you want to ask more. In terms of what that therefore means, the current contract is effectively a fixed price per insurance policy that's taken out, so we know exactly what that is. We haven't given you any guidance on that, so you can take it that it's not material at all in terms of our numbers. Just one very small add on top of that is, and it kind of links into your last question, Joe. We have what I hope is going to be much more compelling advertising coming from September onwards. Of course, car will feature very strongly as part of that with the consumer. I'm hoping that the combination of new advertising, the car incentive, will have an amplification effect going forward. Tremendous. Thank you very much for the detailed answers. I am tremendously excited about the relaunch of the brand. Hope you like it. Thank you. Your next question comes from the line of Adam Berlin at UBS. Please go ahead. Your line is open. Hi. Good morning, everyone. Thanks for taking the questions. I've got two on the gross margin issue again. I noticed when you were explaining in the presentation on page 10, the drivers of the gross margin improvement, you didn't say anything about auto switching as a driver of gross margin. Can you explain why, despite the increasing number of kind of auto switching customers you've got, that's not creating a benefit to gross margin at the moment? Is that something that can help drive a step up in the gross margins more medium term? Just trying to understand that a little bit better. The second question is, can you give us some guidance on where you think gross margins can get to? Can they get back to historical peaks? Is there some structural reasons why they'll never quite get back to where they used to be in the past? Okay. Thanks very much, Adam. I'm going to throw both of these over to Scilla actually, but just one point on auto switching is, whilst it was sort of launched in September last year, the repeat switching hasn't really happened yet. Again, that sort of opportunity is one kind of going forward. Scilla, do you want to pick up on that? Sure. Remember, Adam, that auto switching happened on MoneySavingExpert. Editorial proposition, and therefore we don't pay to acquire those customers. There aren't the same gross margin dynamics in terms of PPC. In terms of what does impact the margin there is cashback, and cashback is still prevalent. Adam, you do get cashback on your second switch, so I wouldn't expect any of that to impact the margin of that channel. As we've guided, Cheap Energy Club by itself is a lower margin than some of the rest of the group. As we mix in and out, that does change the total shape of group gross margin. It is good conversion. We're pleased with the numbers that we've got in terms of picking a tariff every year. We are seeing that people who are in that journey are converting better than those in the DIY. That is a positive. As I said, we don't pay to acquire those customers in the first place. Gross margin. I'm sure we're going to get lots of different questions of aiming at this in different shapes and forms, and it won't surprise you probably, Adam, to say I'm not going to give you any guidance in terms of beyond this year. I think you've heard us say that we're growing in our confidence in terms of what data enables for us in terms of effective customer acquisition. We've given you some of the building blocks as to what's happened within margin this half. This continues to be a competitive market across a number of different channels, and therefore, as Peter referred to in his answer to Joe, it will be a question of choice at different points in time, and depending on how hot the various options are as to how much of the new opportunities that we identify, we reinvest back into market growth versus flow through to the bottom line. Bear in mind as well, that was sort of first pillar of the strategy. The other piece which we continue to hope will bear fruit as we move forward, is the cross-sell and retention piece. I'm sure we'll look forward to describing that in more detail as we move forward. Thanks very much. Can I just ask one more question on energy? Just given the disappointing Q2 number, do you think the introduction of the price cap is going to be a kind of permanent effect on your ability to go back to historic revenue? I know you benefited quite well from it in the first half of 2019, but since that, it seems to have been a slight problem. Is that just the way the wholesale prices and price cap have moved in the recent times, and can that improve, or is that going to be a problem going forward? I don't think I'd describe it as a problem. Certainly what we've seen since the price cap was implemented in early 2019, is that typically in normal wholesale market conditions, it's often set to the level which does still facilitate switching. It protects those vulnerable customers, but there are often savings levels which are attractive and still facilitate switching. There's nothing in the regulation change by itself, which means that the switching market shouldn't remain robust. I think what we will see a bit is a little bit more variability quarter on quarter, depending on what's happening. We've described before, because of the way that the price cap works, that it's sort of a retrospective look back versus a kind of real-time spot check, if you like, of wholesale prices. That does result in savings moving around quarter-on-quarter in a way it maybe wouldn't without the price cap. Does that answer the question? Thanks very much. Yeah, no, it's very helpful. Thank you. Thank you. Your next question comes from the line of Bridie Barrett at Stifel. Please go ahead. Your line is now open. Hi. Morning, everyone. A few questions, if that's okay. To start, in light of the FCA review, obviously it won't impact officially until next year, but are you already starting to feel the changes of pricing and marketing strategy from your product providers? That's the first question. My second question relates to the mortgage product. You're indicating again some additional integration. Can you talk a little bit about the demand side, though? Whether there's any evidence that anyone's using them or sort of timeframe on potentially revenue building out in that segment? My final question just relates to the phasing out of third-party cookies. I know Google has given the industry a little bit of a reprieve in kicking that to 2023, can you just maybe remind us about how reliant the group is on that data for targeting? Thank you. Thanks, Bridie. On the FCA review, I think really what was finally published was broadly in line with what was anticipated with what the market was expecting. On balance, we see it to be net positive. Sort of two observations around that, really. Firstly, we'll see providers starting to adapt their pricing strategies, and that should create some volatility, which in turn will, I think, create opportunity for us because consumers are relatively well-versed in the annual checking on a price comparison website of whether they're getting value or not. Certainly we see that to be a positive. I think perhaps less well commented on, but perhaps maybe more so in the last few weeks, is the regulation changes around auto switching, which is the provider essentially being able to flip the customer onto a new policy very simply, at the end of their existing policy. The rules which are changing around that, I think really add to a price comparison website's opportunity. It should really aid conversion because essentially it should take friction out of a journey of a customer switching and, in turn, make it easier for them to go to a new provider. We see that as a positive. I think the balance is net positive. I think your question was are we starting to begin to feel those changes? I think it's very hard to say that. We anticipate there are a number of providers, they certainly tell us they are adapting their pricing strategies in advance of what is happening. How far through that cycle they are would be very hard for us to comment. I'll throw that over to Scilla in terms of any other observations. Number two, on mortgages, yeah. We've added NatWest, so that's on top of Santander and Nationwide. You remember that we're focusing at the moment on the remortgage side of the market. That probably hasn't been the bit of the market that's been on fire post pandemic. That's been all about house moving. That hasn't been the part of the market that we are in. What's great is that we are proving out the ability to deep link into a provider's application process. Yeah, I think I said sort of in February, this is a very attractive opportunity. It's just a question of time, the time being where do we feature in the prioritization of a provider versus all the other good stuff that they're potentially doing. Scilla, can I kick over to you? Yeah. On FCA? FCA, yeah. On yeah. Yeah. In terms of what we're seeing from providers, as Peter's exactly saying, Bridie, we're not seeing that much at the moment. I think where we will see potentially is car actually in advance of home, just given where they make their money, really. We'll continue to see how that plays out during the second half. Clearly, the regulations were only finalized in May, so there's some time still to play through in terms of their acquisition strategy. Sure. I missed that on cookies. Sorry, do you want to do that or do you want me to? Just on cookies, really where it would impact us anywhere is just in re-recognizing people who haven't signed in. We're doing quite a lot of work at the moment in terms of focusing on getting more customers to sign in to the site, and therefore making us less reliant on cookies going forward. There's nothing in and itself of that I would be concerned about in terms of the numbers. Yeah, it's a journey to make us less dependable. Thank you. Thank you. As a further reminder, if you would like to ask a question, please press star one on your telephone keypad to ask your question. Your next question comes from the line of Giles Thorne at Jefferies. Please go ahead. Your line is open. Thank you. It was just the one question. Again, on the broad competitive landscape and how that's going to evolve over the next couple of years. What's prompted the question is obviously, the Uswitch confused or Uswitch or RVU Penguin Portals, however you want to look at it. That transaction's now completed. They followed it up very quickly with the acquisition of Mojo, which to my eyes is a pretty substantive statement of intent and a pretty substantive change in who owns what and who's offering what. Clearly, there's no sign of any integration of all these brands into a single platform in the same way that MoneySuperMarket is a broad platform. Nonetheless, substantive changes. Peter, I'd just be interested to see how you see things evolving over the next couple of years. If there is going to be a much more like-for-like type competitor, where do you see that competition manifesting itself? Yeah. Thanks, Giles. I think that's a really interesting question because what you have seen is, as you're pointing out, a number of customer propositions coming under the one stable. What you haven't yet seen is that being brought together in one brand with then the ability to sort of cross-sell in a more seamless way. Not to say that that can't happen, but that hasn't begun to happen yet. One would guess that the reason for doing this is to make that happen, and we would expect to see the emergence of a new competitor. Certainly, I think in some of the PPC bidding auctions, we're starting to feel the weight of some of these ownership changes. You just see sort of different levels of funding essentially coming in. As a consequence, different pricing coming through in terms of that. We should fully expect to get a competitor on the horizon at some point in time that is trying to begin to cross-sell into their customer base in the way that we're doing. It's a very logical thing to do. I think where we have great advantage, however, is that we have that single brand proposition at the moment. We have that breadth at the moment. We are well advanced on the technology stack to begin to make that happen. In addition, we know with MSE, we have a brand which is our own publishing brand, which has a very engaged customer audience who are signed up for the purposes of kind of financial services. I expect you'll see changes in the market in the way that you're describing. I think we're really well positioned to begin to handle that as and when that happens. Peter, as you're seeing these things unfold, are you increasing the sense of urgency within the business? Is it changing your sensibilities or your sense of urgency? Well, I hope, Giles, you're feeling the sense of urgency in the business at the moment. I think the rate of delivery in the first half is really pleasing. I think the progress we've made, particularly in terms of understanding our customers. When I say that, I sort of mean the progress we've made in terms of data, understanding the single customer view, making that available to all parts of the business, and in turn to the product proposition so the customer can then begin to realize it. Absolutely. It is all about that pace and making sure that we stay ahead of competitor propositions. I hope you're seeing evidence of that. Thank you very much. Thank you. There are no further questions at this time. Okay. If there are no further questions, can I just thank everybody for their time this morning. Really appreciate you taking that time out. Of course, if we can help, please reach out, and we will answer anything further on a one-on-one basis. Thanks very much. Thank you. That does conclude the conference for today. Thank you for participating. You may all disconnect.