Moonpig Group PLC (MOON.L) Earnings Call Transcript & Summary

Good afternoon, everyone, and thank you for coming, and welcome to the first Moonpig Group Capital Markets event. I'm Nickyl Raithatha, Chief Executive, and I'm excited today to share an update on all aspects of Moonpig Group, highlighting how we have built a platform designed to deliver sustainable compound growth for the long term. First, I just want to draw your attention to the disclaimer. If you can take some time to read it in your in time. In terms of the agenda, we have a packed agenda ahead of us today. First, I'm going to be walking through an update on our overall strategy and highlighting some of the most exciting initiatives that we're working on. Next, our CMO, Kristof, will dive into the markets, the customer demographics and how our online marketing strategy is driving the shift online. David, our U.K. General Manager, will then showcase how our platform enables us to offer the best card and gifting ranges in the world. After the break, Georgie, our Chief Product and Technology Officer, will explain how our use of technology and data is fueling our growth now and into the future. And finally, Andy will present the financials, demonstrating how we've achieved a unique combination of growth, profitability and cash generation. Before we start, I just want to give an overview of the team. The core leadership team has been together at Moonpig Group now for 5 years with the notable additions of Alex, who joined to lead our international markets, including Greetz, and Georgie, who joined just as we shifted our technology focus away from platforming and towards growth. You have 5 of us presenting today, but the whole team is here in the audience in the front row. And so please do take the time to speak to any of the leadership team in the break or at the end of the session. Today, we're going to cover a lot of ground, and I want to begin by highlighting the key messages that underscore the opportunities ahead of us. We have built a platform to deliver sustainable, compounding double-digit growth. It's underpinned by our extraordinary cohorts, which are now even more impressive than before and power our growth and profitability. We continue to extend our distant market leadership in a market that is rapidly transitioning online with a huge runway ahead of us. And our investments in technology and AI are now directly powering that growth. Our business has structurally high profitability and cash generation, which combined with market leadership and our cohorts give us all the characteristics of a true platform business. The net result is that we are generating excess cash, and today, we're announcing a new dividend policy and our fair share buyback program of up to GBP 25 million. Moving now to the presentation. Moonpig Group today is the leading online platform for cards and gifts. We have 12 million customers across our 4 brands and together, sold almost 50 million cards and gifts last year. Moonpig represents over 70% of the business with Greetz in the Netherlands and our experienced brands in the U.K. making up the rest with around 15% each. Our vision is to become the ultimate gifting companion. We want to make it as easy as possible for our customers to be as thoughtful as possible on all of the occasions that matter to them. And we do that by investing in technology, investing in our brands and investing in our product range, so customers can always find the perfect card and gift every time. We're confident that if we deliver on these pillars, then we will capture the huge growth opportunity in front of us. The group is now approaching 25 years old, but it's the last 5 years that have been absolutely transformational. During this time, we've not only expanded by adding Greetz, Buyagift and Red Letter Days to the group, but we've also seen a significant step change in our scale. We've built new technology, operational and supplier platforms that have unlocked a wave of innovation and expansion that are driving our growth today and positioning us for an exciting future. I'll now walk through the strategy and growth opportunity for our card brands, Moonpig and Greetz. We operate on a card-first gift attach model. The strength of our brands and our market leadership have consistently allowed us to acquire card customers profitably, and cards are the key to generating incredibly rich customer data, which we then leverage to build loyalty to increase purchase frequency and then to cross-sell gifts effectively. Over 60% of all cards are given with a gift, and our strategy allows us to capture this gifting opportunity without the need for additional marketing costs. As we use the data to recommend highly relevant gifts based on customer preferences through our cross-sell page. And in fact, we have designed our entire business model and technology ecosystem around this highly valuable and proprietary data set. It is a growth flywheel that strengthens with every interaction. Each card purchase gives us deep insights into the unique relationships and occasions being celebrated and it feeds directly into our data science models to deliver highly relevant and personalized recommendations. 90% of all card giving occasions repeat on the same day every year, and that allows us to exponentially enhance personalization over time. And this is a really critical differentiator for our business unlike any other online shopping vertical. We have precise insight into future customer intent year after year. With every customer interaction, we improved the experience and that drives higher loyalty, higher purchase frequency, more gift attachments and viral acquisition. And the flywheel continues to gain momentum as we accelerate the capture and use of data and as we implement new AI technologies, we collect more reminders, we drive more customers to our apps and more customers onto our subscription scheme, all of this driving increased customer lifetime value. And the best way to see this flywheel in action is by looking at the remarkable strength of our customer cohorts. What we have seen in the last few years is that our have become universally and unequivocally more loyal than before. If you look at the chart on the left-hand side, you can see that prior to the pandemic, all of our customer cohorts displayed astonishing resilience. Essentially, every group of customers became an annuity from year 2 onwards with 100% revenue retention. And whilst the pandemic clearly disrupted that pattern, it only served to improve it. And what we've seen is that all of those cohorts have now settled at a new baseline, 20% higher than previous levels. What's even better is that it's not just the older cohorts that have improved. What you can see on this slide is that all of the new customers that we acquired during and since the pandemic have shown higher revenue retention than customers did before COVID. This is the result of all of our strategic investments paying off, driving higher customer lifetime values across the board. I'll turn now to the card market. We are the clear online leader in a large, growing and underpenetrated market that is rapidly transitioning online. We estimate that the market today is only 15% online in the U.K. and 20% in the Netherlands in value terms, and it's significantly lower in volume terms. Going forward, we expect a structural trend of the market moving online at 1 to 2 percentage points a year to resume. And indeed, as Kristof will show later, we see an enormous runway of growth ahead of us. Why will the market continue to move online? Well, put simply, it's because we have a vastly superior proposition in the offline market. We have all of the advantages of standard e-commerce including convenience and selection. But we also have a wealth of personalization options, which make our product more meaningful to our customers and their loved ones. And as we continue to enhance our proposition with new ranges and new technologies. This gap compared to the off-line market will continue to widen, and that will accelerate the move to online. Looking within the online segment itself, we have distant market leadership. We're almost 6x larger than our nearest competitor in the U.K. And not only that, but our market share has continued to grow in the U.K. over the last few years. As our investments in brand, range and technology continue to power that flywheel that I outlined earlier, this is the clearest demonstration we can give of our strategy working. So why does our market share continue to grow. It's because of the deep and ever-expanding competitive advantages that we've built. Our most enduring advantage is the strength of our brands and the scale we've achieved relative to our competitors. Being significantly larger than the next player in our markets gives us unmatched marketing power and viral growth potential. And the scale also drives highly attractive unit economics with lower customer acquisition and operational costs. However, today, our most valuable moat is data. We have more data on gifting than anyone else, and we capture more new data points each day than the entire rest of market combined. Our 90 million reminders are a core part of this moat, driving nearly 40% of our business now. The more data we collect, the more personalized and relevant we can make the customer experience and our proprietary technology platform is designed to fully leverage this data, making our model incredibly difficult to replicate. Let's now shift to growth and how we will deliver it. There is still a long runway of growth ahead of us. And the best way to demonstrate it is to break down the opportunity into 3 compounding levers. We are still very early in our journey of capturing all card buyers in our markets of capturing a significant share of their wallet and of getting them to add more to their basket. There is no reason why we shouldn't aim to double each of these metrics here, given the opportunity you can see on the slide. In fact, if you look at the right-hand side of the page, you can see that each of these levers has contributed significantly to our growth over the last 5 years. We've seen a 60% growth in our customer base, a 20% growth in their frequency and a 25% growth in average order value. And it's exactly these 3 growth levers, which build to give us confidence in achieving double-digit growth for Moonpig and Greetz going forward. We expect our customer base to grow by 2 to 3 percentage points a year with each customer purchasing 3% to 4% more often and spending 3% to 5% more on each transaction. We'll now take a closer look at each of these levers one by one. The first lever is growing our customer base. The number of active customers that we have is the net result of how many new customers we acquire and how effectively we retain our existing customers. We acquire new customers by optimizing our current marketing channels, launching new ones, in particular, on social media by forming new partnerships and by enhancing the on-boarding experience for first-time customers. It's been great to see all of these efforts coming together this year as our new customers have returned to really healthy growth. We already have fantastic retention from our customers, evidenced by the cohort patterns I shared earlier, and the fact that 90% of our business is coming from repeat customers. Part of this is driven by our relentless focus on making sure the customer has a great end-to-end experience, which we measure through NPS. But the key way to drive retention is to leverage the fact that the majority of customer purchases repeat on the same day every year. And our hero tool for that is reminders. I'll deep dive into that now. We've made significant efforts over the last years to collect more reminders from our customers, and we now have over 90 million across the group. This is a crucial asset that really is quite unique to the gifting vertical, given that most e-commerce purchases are not linked to a calendar event. And over the last couple of years, we've started to focus more on how we use these reminders by personalizing them to drive conversion, and it's starting to make a real difference. We now see that almost 40% of all orders are made when a customer already has a reminder set with us. I'll turn now to the second lever, frequency. Getting customers to make more purchases each year, it's a combination of getting them to our sites more often and then improving the conversion rate when they do. On top of a regular marketing drumbeat, we have also made significant strides in moving our customers onto our apps, where we know they buy 15% more often. And we've launched numerous creative features inside our cards, which are starting to show a positive impact on frequency for customers that engage with them. Our technology road map is heavily focused on driving conversion rates by removing friction throughout the journey and by using data science to personalize every part of that journey. And Georgie is going to talk a lot more about that later. But the one initiative that is really making a difference this year is our new subscription scheme plus, which I'll focus on now. We launched Plus in June last year, and we have been overwhelmed by the results. Not only has the customer uptake been higher than we expected, but also the impact on customer behavior and the renewal rates into year 2. As a reminder, this is our membership scheme where customers pay GBP 10 a year to get a 30% discount on all cards and various other benefits. We now have over 700,000 subscribers across Moonpig and Greetz Plus. With that growth continuing even after we started to annualize the first renewal dates. Customers signing up to Plus have a significantly higher base frequency than our average customer and yet we are still seeing this frequency jump by over 20% after they join. The scheme is not only profitable for us, but customers are also receiving great value with the average customer saving over GBP 15 a year, which is critical in driving the high renewal rates that we have seen over the last few months. Plus today is driving just short of 20% of our entire business and this will continue to grow over the next 12 months as we scale, supporting the long-term growth and frequency across the business. I'll now turn to our third growth lever, average order value. The primary driver in the long term of average order value is our gift attach rates, getting customers to add a gift to each card purchase. But there are also 2 other important factors that underpin our 3% to 5% annual growth target. Price, which comes from a combination of direct increases in card or postage pricing and a gradual shift in the price mix of our gifting range and upsell where an increasing number of customers are choosing to upgrade to a larger card, attract delivery service or to add an extra gift to their main gift. But the main driver is gift attach, and I'll focus on that now. Gift attach powered by our cross-sell page is driven by the range of gifts that we offer and most importantly, the specific gifts that we choose to recommend to each customer. You'll hear more about these key drivers later with each having a clear road map for significant enhancements in the coming years. Our Gift recommendation engine is becoming increasingly sophisticated as we leverage advanced AI technologies to better understand our customers' intentions. And we've built new fulfillment centers and stock management systems that enable us to collaborate with partners like the entertainer, significantly expanding our gift range. And the introduction of digital gifting, a gift in a card opens up an entirely new and limitless way for customers to send exciting products. And so while gift attached growth has been slower in recent years due to our focus on card volumes amid a challenging external environment, we are confident that moving forward, gift attach will regain momentum and become the primary driver for AOV growth. So bringing together our overall strategy for Moonpig and Greetz. We have built a platform where a powerful data flywheel gives us extraordinary customer loyalty and unlocks a clear path to delivering consistent double-digit growth. I'll now turn to our experienced brands, Buyagift and Red Letter Days. As you know, we acquired these brands in 2022 with a clear strategic vision. To enter the structurally attractive experiential gifting market and to unlock transformative opportunities for Moonpig's gift offering. Despite the challenging trading conditions over the past 2 years, driven by significant macroeconomic headwinds. We have consistently executed our strategy with focus and speed. And we remain as confident as ever in the long-term strategic value that these brands will deliver to the group. Our strategic execution rests on 2 key pillars. First, we've completely transformed the experienced brands, including their operations, marketing, technology and commercial platforms. We've made significant progress here, and I'll walk you through that shortly. And second, we've integrated these brands with Moonpig successfully launching and scaling digital gifts on our platform. Since the launch 18 months ago, we've seen strong traction of this, and we anticipate substantial growth in this area over the coming years. The gift experience market has consistently outpaced the broader gifting market, and we expect this growth trend to resume once cyclical headwinds subside. In the U.K., the gift experience market is valued at over GBP 6 billion. And yet gifting aggregators, where we are the clear market leader, account for just 5% of this market. As we advance our transformation, we're confident in capturing a larger share of this segment, something we're already achieving this year given our outperformance compared to the wider gifting market. As I mentioned, we are in the later stages of a major transformation of our experienced brands across 3 areas. First, we've completed an operational transformation by relocating head office, outsourcing noncore functions and building a new leadership team. This has resulted in greater efficiency and over GBP 1 million in direct cost synergies. Second, we've rebuilt the technology platform. Replacing 2 decades of legacy systems with a modern AI-powered stack. This has already generated GBP 20 million in gross sales growth. And with the replatforming now complete, we are turning our focus fully towards leveraging this platform and accelerating growth. Third, we are enhancing the customer proposition. Our new platform provides greater flexibility for us now to expand our range to introduce new brands and to develop new and innovative ways for customers to discover and book experiences. This work is still underway, but we are confident this is going to allow us to better respond to shifting customer preferences. And as such, it's going to be a major focus for us, a major focus area for us going forward. So where does this transformation take us? Well, in the medium term, we anticipate double-digit growth for our experience brands, driven by the ongoing transformation plan and the structural shift towards more experiential gifting. Four key drivers underpin our growth expectations. First, increasing the number of orders through range expansion, enhanced marketing efforts and a stronger focus on technology; second, steady growth in average order value fueled by price optimizations and smarter upselling strategies. Third, growth through third-party sales, not only via Moonpig but also through partnerships with major online platforms like Amazon and Argos and exclusive retail agreements with partners such as WH Smith and John Lewis. And fourth, we have a unique opportunity to boost the total value of each order by engaging gift recipients directly, offering multiple upsell and cross-sell opportunities. And this focus has already started to deliver results with over 1,000 experiences now available for booking and upgrading through our platform. So despite a challenging trading environment, our strategic transformation is well underway, and we are making significant progress in unlocking the full potential of our experience brands. The second strategic pillar behind the acquisition was integrating experienced products directly into Moonpig cards, creating not only a powerful distribution channel for the experienced brands, but also introducing a new exciting way of gifting for Moonpig customers. We launched the first ever gift in a card on Moonpig 18 months ago. And as we've expanded the product range and increased awareness, we grew gift experience gross sales on Moonpig to GBP 2.3 million last year. We expect this to double both this year and again next year. While there's still work to be done, refining which products and price points resonate best with customers and optimizing our data science algorithms to better understand the new category, the strategic rationale for the acquisition remains as compelling as ever. Let me take you now through our new markets business, where we're making significant progress on 2 exciting expansion initiatives, each with the potential to unlock substantial medium-term growth opportunities for the group. The first initiative is expanding our card business into new markets including Ireland, Australia and the U.S., all of which have now successfully launched. The second is entering the corporate market with a new product, Moonpig for work, which enables companies to easily send personalized Moonpig cards and gifts at scale to their employees and clients. We'll go through each of these in turn, but first, it's important to highlight our operating principles and our expansion model. Corporate innovation is challenging. And so we have structured our expansion teams to remain as entrepreneurial as possible. Small agile teams that operate separately from the core business and report directly to me. They are given clear short-term milestones, allowing us to test and learn quickly while continuously evaluating whether the path forward is viable. Our expansion strategy is straightforward and focused. We aim to bootstrap our way to product market fit, which is the point where we can acquire customers profitably. And this approach applies to all of our new markets, allowing us to limit investments to maintain a rigorous testing process and to only scale once we identify a clear path to profitability and the potential for significant returns. Let me walk you through this approach on our international markets, where we've launched in 3 countries over the last 2 years. Each of these 3 markets has a strong culture of greeting cards and none has a direct Moonpig competitor, giving us a valuable first-mover advantage. All new markets start in the discovery phase and over time, if successful, move into the product market fit stage and then the profitable growth phase. Ireland was our first market and is now firmly in the third phase. Two years ago, our small team quickly identified a target demographic, secured a local production partner, launched a small gifting range and tested a variety of marketing channels and partnerships. And through a combination of low-cost operations and rapid iteration, we successfully found a way to acquire customers profitably, well below their lifetime value. As a result, Ireland has become a profitable market today. While it's still small, it continues to grow steadily and offers a strong validation for our expansion strategy. In Australia, which we launched just over a year ago, we started with very low brand awareness in a market of a similar size to the Netherlands. And so whilst building brand recognition has taken time, we can see it steadily growing. And as a result, we're seeing consistent improvements in customer acquisition costs as our marketing efforts gain traction and lifetime value is rising every month. So as a result, we can see a path to profitable unit economics in Australia, though we are not there yet. And finally, we launched in the U.S. around 6 months ago. We are still incredibly early in exploring this market, but we have had some early exciting wins, including some viral TikTok videos at Father's Day in June, which led to more new customers in 1 month than we got in the entire previous year. To highlight the disciplined investment approach that we take, these markets are self-funding in aggregate with the profits from Ireland offsetting the investments in the other 2 markets. And the only reason that is possible is because we have designed our expansion to leverage a huge amount of our central capabilities. This international strategy is designed to use group capabilities and assets wherever possible, only localizing were essential. And this allows us to maximize on our existing strengths such as targeting Bricks living in Melbourne or Americans in the U.K. and using our group creative assets. We also leverage our tech platform to deliver world-class apps, reminders and APIs off the shelf. and, of course, can offer our full suite of 40,000 card designs in instantly. And this just leaves our international team to focus on the final 10%, tweaking comms to resonate with a local audience adding a tailored card range and finding local gift partners. A great example of this strategy in action is our approach to the U.S. market. Rather than dealing with the complexities of physical gift sourcing and fulfillment we deployed the digital gifting capabilities that we developed for experiences in the U.K., and we used it to launch gift vouchers in the U.S. So in summary, our international expansion leverages core group strengths with a self-funding model. We have profitability in Ireland, strong momentum in Australia and promising early results in the U.S., which position us for continued growth in the future. Next, I'm excited to introduce you to our latest product, Moonpig for work. I thought the best way was through a short video introducing the product. So here we go. [Presentation]

So I think this is an incredible product and it has the potential to unlock a substantial new market for us. One of its key advantages is the ability to attract large corporate clients who could spend 100x more than a typical customer. The product is inherently sticky. Once customers start sending cars to employees, it's difficult to stop. And Plus, it offers strong operating leverage. It requires no additional investment in our existing facilities. We are though still in the very early stages of the product. We currently have 5 customers in a private trial and we've been refining the product based on their feedback. Over the coming months, we'll carefully expand the platform to more customers with a focus on continuous improvement before a full market launch. Next year, our focus will mainly be on testing different customer acquisition strategies, whilst further enhancing the product, adding more automation, adding gift options and adding more occasions. Beyond that, there are many opportunities to scale. But for now, our only priority is to achieve product market fit within the core offering. And that brings us to the end of the first section. Moonpig Group demonstrates all the hallmarks of a platform with market leadership, strong customer retention and high profitability. Our incredible customer cohorts at Moonpig and Greetz have grown even stronger over the last 5 years. We expect Moonpig and Greetz to achieve consistent and sustainable double-digit revenue growth, driven by increases in active customers purchase frequency and average order value. Our experiences business is executing well against its transformation plan and the long-term strategic opportunity remains as compelling as ever. And although still in the early stages, or new markets offer significant potential for long-term growth. So with that, I will move to a short Q&A session just with myself to answer your questions. And yes, and then we'll continue with the rest of the presentation. So we'll probably take 10, 15 minutes of questions now.

John Stevenson, Peel Hunt -- sorry, I'll try in English. A couple to get us going. First question, you've done a lot of heavy lifting, obviously, in terms of the systems behind this in getting particularly gifting into the card business. What are the biggest blocks now for attach and how are you sort of trying to solve these and the second question, just on Plus. I mean clearly, your best customers have gone in there, and you've got great results. To what extent have you got experience of bringing in newer and lower level spending customers? And are they showing the same sort of trajectory?

Yes. Great questions. So I think on attach, you're going to hear a lot more about that later. I think actually you'll see David will walk us through exactly what we're doing with the gifting range and Georgie is going to talk a lot about how the algorithm is getting smarter. Those are the 2 drivers of attach. It's really -- it's all about how can you make sure you have the best gifts and then you show the right gift to the right person, given we have limited real estate. And we've got a long runway there. I think the -- the key is that we've just -- we've built capabilities that allow us to now really execute. So within the range, we've built a consignment capability, which means we can work with new partners in much more interesting ways than before. And we've built digital gifting, which kind of is an unlimited variation of where that can take us. So that's really exciting. And I think the way that we are using AI to leverage that data to understand exactly what your intent is to understand the message inside the card is making our algorithm smarter every day. And so -- but we'll cover that a lot more in the next couple of hours. I think on Moonpig Plus, we've seen, as you would expect, our best customers were the first to sign up. And so I think it was quite an interesting moment for us when we started to annualize in June, because not only do you kind of see, well, what are the renewal rates going to be of existing certain members, but you start to see -- do you start to sort of lower the sign-ups. What we've seen is that the sign-up rates so that essentially, we measure the percentage of customers that are signing up every day or percent of orders signing up hasn't changed as we started to annualize. So even customers that are coming back in the second year, we're still seeing really good sign-up rates. All of the sign-up is organic. We haven't spent $0.01 acquiring any members. So this is just basically customers as they're going through their journey being tempted and of course, you optimize that flow. The last point, I think, to your question was as customers have kind of, I guess, less frequent, I would say lower quality, less frequent customers have kind of joined. What we've seen is the frequency uplift has been consistent. And so actually, we see that more than 20% frequency uplift regardless if a customer was buying 15 cars before or 5 cards before, and that's been very, very consistent across the base, and that's really encouraging for us.

Andy Wade from Jefferies. A couple for me. The first one, I suppose, on gift attach. We've got the sort of the 17.3% in terms of that gift attach rate now. Obviously, just sort of reflecting back on that, it's about the same level we were at the IPO in FY '19. But there's been a huge amount that's been done in that time, you give ranges extended, you've added more categories, you've got brands and there you didn't have. And the algorithms have gotten smarter over that time as well. So I appreciate that we've sort of seen a bit of a cyclical headwind from, I think it was September, October 22, that sort of time when you first noted it. But I guess the question is, I'm coming into lander. Is the quantum of what you've got to change is going to be significant enough to drive the uplift given what we've already seen in the last years hasn't done that.

Yes, absolutely. I think we kind of -- we probably look at kind of the trajectory before the pandemic was essentially, we were adding between 1 and 2 points a year to attach. So that trajectory was pretty consistent if you look kind of 2018, 2019, 2020. It hasn't moved that much since 2021. So since the peak of the pandemic. And I think we have seen pretty significant headwinds on gifting, and we see that across the group. The way that we think about it and the way that we know that actually, what we're doing is adding real value is, we measure the uplift. And so every time we deploy a new algorithm or a new upgrade to our recommendation engine, we kind of -- we A/B test that. So we show it to 2 different groups of customers, and we can measure the difference. And so we know that actually we've driven the attach rate significantly through what we've done. We do similar things when we launched a new brand. So we saw the attach rate lift on the kids range when we launched The Entertainer. We saw a lift on food and drink when we launched Hotel Chocolat. So we're able to measure the impact we're making, which tells us that if we weren't doing this, the attach rate probably would have been going backwards. So I think really, the macro headwinds have been pretty real. We're starting to see those stabilize at the sort of the gift prices that we offer. So the GBP 15 to GBP 20 kind of average gift price on Moonpig. And actually, I think that gives us a lot of confidence that now we'll really start to see that attach rate momentum pick up. And so I think the other thing to remember is we're selling whatever is 2x or 3x the amount of cards that we were prior to the pandemic. We've got 60% more customers. So the fact that we kind of maintain the attach rate, even as we've kind of really grown the customer base also is something that is quite exciting to see.

And just following on from that, just from what you said though, is clearly inferring the propensity to attach from your customers over that period has gone down. You said that it would have fallen. Presumably, you're confident that, that is a cyclical factor rather than a competitive factor. And what makes you confident in that is the first part of the follow-up. And the second part is, if it is a cyclical rather than competitive factor. I don't want to talk about competitive factors, it could be that more people are just using Amazon Prime than they were as an example, 3 or 4 years ago. But what makes you comfortable it's a cyclical rather than competitive factor. And secondly, if you do believe it's a cyclical factor, could we see quite a big reversal if as and when? As in a positive...

So we absolutely believe it is a cyclical factor. I think all of the research, and we'll run through some of the research tells us that customers are still getting gifts with cards. And that's something that is a huge market. We offer the most convenient solution, obviously, to attach to it with Moonpig compared to buying it elsewhere, it's harder to combine those cards. And so from my perspective, I think the research tells us that customers are still willing to do it. I think all of the evidence we've shown in terms of how actually when we put the right product in front of the customer, they do buy it, when you put the right brand in front of the customer, they do buy it tells us it's there. But we have data on gifting. The gifting market we track pretty closely. You can see this year, it's down 15% year-on-year. Last year, it was down, I think, even slightly more, the U.K. gifting market. And so I think we're very confident there's no there's absolutely no structural trend away from gifting. I think this is just actually getting people to -- if you think about the nature of our business, they come to buy a GBP 4 card, getting them to upsell to a GBP 15, GBP 20, GBP 25 gift it's harder when there's a cost of living crisis going on. And actually, I think the important thing now is our attach rate is in growth. And so as we -- if we think about a flat baseline, then actually, we're pretty confident that the sort of what we're doing in terms of self-help is actually going to really drive that momentum of attach going forward.

Beatrice Allen from UBS. Just a really quick follow-on from that one, just kind of sort side. The kind of convenience factor of that gift attached for you guys is obviously even more compelling if the card is being sent directly to the recipient rather than going via the buyer as it were because it's all sent in one convenient package, right? What percentage of the cards bought do you now go to a different person than the buyer, go directly to the recipient as ever?

So it's around 60% in the U.K. It's 95% in the Netherlands. Any other questions? We've got one in the back.

David Hughes at Shore Cap. Previously, you've talked about international expansion in the U.S. and Australia having challenges to do with the reliability of next-day delivery through the postal services there. Is there anything you're doing in terms of your proposition or the way you're targeting that or your way you're planning on to deliver to try and overcome that?

Yes. I mean, look, it's a fundamental difference with at least how the postal services used to operate in Europe, which was a reliable next-day service for a very affordable price. I think the way we're approaching it is too forward. I think one is to make sure we give the customer options. So I think even in the U.S., there's an option for a FedEx option, it's pretty expensive, but actually, a large amount of customers are taking that premium option, if they want it the next day. But the major focus for us is really on telling customers, they do need to order things in advance. And I think actually, there are lots of categories and products where customers are accustomed to buying and weight even knowing you need to wait 3 days or 5 days or something to arrive. And so for us, the way we can do that really grows over time when we build that reminders space. And so a lot of our education in these markets is we're not entering a market selling convenience. We're entering a market selling a product that you cannot get elsewhere because the concept of a personalized card Australia or a printed personal card in Australia or the U.S. is completely new. It doesn't exist. And so actually, we're selling that novelty factor, which is why we're bringing customers to us. As they come to us, as we get their reminders data, I think that's when the flywheel really starts to work and you can kind of offset it. And it mirrors to some extent, what we're doing in Europe, which is trying to pull our customer orders forward so they get better at planning because we know that actually the days of 100% reliable next-day delivery, I'm not here anymore.

And just one more, if I may. In terms of the overall car market, you've talked historically that that's very consistent around 2 cards per person per year, but the online penetration you expect to grow. Is that still the case? Are you still seeing that kind of stability in the overall market, do you think?

Yes. So actually, the -- actually, Kristof, in the next section is going to run through the updated market data. So we've got kind of refresh data there. But the overall cars market in the U.K. and the Netherlands is growing in terms of value, still very healthy in terms of capital. We talked about frequency being a big driver for us. We have a huge amount of share of wallet to go for. Our average customer is buying 3 -- just over 3 times a year with us, and we know that they're buying kind of close to 20 cars in total. So there's still a huge opportunity for us. Georgi.

It's Georgina Johanan from JPMorgan. Just a really quick one, please. Just at the beginning of the slides, you talked about how that 2016 cohort had actually landed higher in terms of spend than the previous kind of annuity. How much of that step-up is actually volume, be it frequency or incremental gift attach from that cohort? And how much is perhaps just inflation in car prices and so on, please?

That's just order frequency. So that's -- is that right? Sorry, is it revenue? I think it's -- yes, so the jump in frequency is a 20% growth in order frequency from all customers.

Maybe I misunderstood it. I think on the slide, it's showing a sort of annual revenue percentage versus first year revenue going from 51% to 63%. That's all coming from the order frequency.

No, sorry. So the slide I think there's a chart on the right, which shows the sort of the average uplift in frequency. So 20% of that growth in all cohorts is frequency and the rest would be through average order value.

Ross Broadfoot from RBC. So 51 million card buyers in the U.K. and Netherlands and currently at around GBP 4 card. So that's really the gateway by lowering that gateway in terms of that price? Or what do you think that could do for the business? Is that something you considered?

So it's actually -- something we've considered, but it's not something we see as an obstacle to growing in any way. So One thing about greeting cards is they are incredibly price inelastic. And so we've done a lot of testing over the years, increasing prices, decreasing prices, testing at different prices, and we see 0 impact on conversion in either direction. And so actually, that's something that is a really interesting component. There are other players out there that offer similar-ish products for us, at least on the surface for [ GBP 1.99 ] and they've been unable to get traction. So -- and then probably the third thing, as Kristof showed shortly, is when you survey customers, when you ask them the reasons for buying online, there are reasons not for buying more online, price just sits right at the bottom of that list. And so for us actually to grow the business, it's really about just having exciting, compelling product that brings people on board, marketing in the right way and then using that data to really just get that flywheel working and get them to buy more cards more often, for us, it's about having a better product, a more convenient product and a better design, not price. Would take one more question, and then I'll turn it over to Kris, if there is one. All right. Thank you. Thanks very much. So yes, next up will be our Chief Marketing Officer, Kristof Fahy. He's going to be talking about the customer and the market.

Great. Thank you, Nickyl. Good afternoon, everyone. I'm Kristof Fahy. I'm the Chief Marketing Officer, and it's great to be speaking with you today. So I joined Moonpig leadership team 5 years ago after 2 decades of leading marketing and organizations across a range of industries and sectors, working for companies such as William Hill, Yahoo!, Checkatrade and Ladbrokes Coral. And here are some of the things that have stood out in my time at Moonpig so far. One, the power of our brands, from people singing the jingle to me when I tell them my work at Moonpig to the fact that nearly 90% of our traffic comes directly to us, is a number I haven't seen in any other online business. Secondly, the strength of our installed base with nearly 90% of our revenue coming from existing customers. And thirdly, there is so much market to go at. We believe there's a 5x opportunity to grow card volumes and as the market leader, it's ours for the taking. So this afternoon, I'm going to be taking you through that opportunity and how today Moonpig Group operates in a large underpenetrated market that's moving online. And it's a market where we hold a clear leadership position and are well prepared to take full advantage of the consumer shift towards digital channels. The market we operate in is significant, underpenetrated and moving online at pace. The gifting market across the U.K., Netherlands and Republic of Ireland is worth GBP 58 billion with GBP 2 billion in cards alone, GBP 24 billion in card attached gifting and GBP 6.5 billion in experiences. And there are 2 key points here, which I want to bring your attention to. Firstly, while we've seen a shift online with a 50% increase in both volume and value penetration between 2019 and 2023, and only 6% of single greeting cards are currently purchased online. Secondly, whilst the volume penetration of this larger market is still low, the customer penetration is much higher, but around 40% of people in the U.K. already in the habit of buying cards online. That means that a large part of the growth opportunity will come from getting existing online buyers to buy more of their cards online. And we are clearly in a position of strength with our large existing customer base and established market-leading brands. The singles card market itself is large and growing, value at GBP 1.4 billion in 2023 in the U.K. and GBP 309 million in the Netherlands with both markets in year-on-year growth. But most importantly, the cards market is characterized by predictable recurring purchases with 88% of our current sales mix coming from recurring calendar occasions such as birthdays, anniversaries as well as major occasions like Mother's Day Father's Day, Valentine's Day and, of course, Christmas. And this is where the magic of Moonpig reminders really matters. It means we can talk to customers at a point of purchase intent because for nearly all of those repeat occasions, we know when that's about to happen and nobody else in the market does. And this is core to why we have such strong retention in our customer base. Our 90 million reminders are driving almost 40% of orders and it's something that no other online shopping vertical has and that we can take full advantage of. What's more, the Greatest card market is incredibly resilient. Research shows that cards are among the consumer categories most resistant to economic downturns. And this was evident from our research during the time of our IPO, and it still holds true today. So even when customers consider cutting back in other areas such as travel or groceries, card purchases remain our priority. Additionally, all age groups continue to buy cards with cards per capita at an average of 19 and all consumer groups expect to buy more cards online in the future with the 18 to 34 age group showing the largest projected increase in online penetration at 12 percentage points over the next 3 years. And this means that the pool of our potential buyers will continue to increase, ensuring that this market is going to continue to grow. So what's going to drive the shift online? Well, as you can see on this chart at the top of the page are the reasons why customers buy cards online, and they're very clear, it's personalization, choice and convenience. And as you've heard from Nickyl already, those are our core existing strategic pillars and central to what we've been focusing on as a business already. What's interesting is we often hear the question, where the price is a barrier to buy more cars online. But consistently research on our price elasticity test to show this is not the case. And again, this latest piece of research backs us up as you can see towards the bottom of the chart. So far, I've outlined the clear potential in the cards market and the fact that customers across all age groups expect to continue to move online, and that our core strategic pillars align with the core drivers of that migration. Now I'd like to talk to you about how we believe we are ready to take advantage of this. Moonpig and Greetz have established clear brand leadership in the online card market. As you can see on the left-hand side, the market has consistently moved online, and we expect that to continue. We anticipate online penetration to increase by 5 percentage points in the U.K. and 3 percentage points in the Netherlands by 2027. Then on the right-hand side, we have clear market leadership, and that leadership has extended significantly over the last 5 years. In the U.K., Moonpig outperformed its nearest competitor by nearly 6 and in the Netherlands, Greetz leads by almost 3. And this shows the flywheel of our business working as the market moves online, our leadership will only strengthen. And we are proudly for everyone. Our existing customer base is broad with wide representation across all demographics, age, gender, region and income. And during a period when our active customer base has risen from GBP 7 million in 2019 to over GBP 11.5 million in April 2024, this customer profile has remained consistent. This broad customer mix provides a stable foundation for growth because we already know that our current proposition has mass appeal and relevance and as the market continues to shift online, we are not reliant on any single group or income segment. According to OCC, after analyzing market data and considering the current online proposition and the barriers preventing people from buying online, they estimate there's an almost fivefold increase in volume that could be achieved. And what's really interesting here is that it comes from 2 distinct levers, both of which are in our control. Firstly, there is an opportunity to increase the number of online customers by 60%. Secondly, there's an opportunity to triple the frequency of online purchases from customers. Combined these 2 levers together, that more customers buying more cards there's a potential fivefold increase in the current online market volume without us changing our current proposition. And there is potential for this to grow as we further evolve our product offering in the next few years. Now we have designed our entire marketing strategy on two pillars designed to unlock those 2 growth levers. The first pillar is focused on growing our customer base to capture that 50% market growth opportunity through new customer acquisition and retention. And we do this with strong leading brands, combined with data-led performance marketing, enable us to acquire customers efficiently and effectively. And we build retention through our indispensable reminder service combined with personalized CRM to deliver the right message at the right time, resulting in remarkable customer stickiness, all of which we believe puts us in a strong position to take advantage of the opportunity we see in increasing online buyer penetration. Now while a large part of our increasing frequency is driven by our technology and data science, marketing also plays an important role. So our second marketing pillar focuses on increasing frequency for existing customers. With our Plus subscription, we already have over 700,000 subscribers with a higher frequency than a standard customer. We know app drives frequency and lifetime value and is core to all our marketing activities. Combine these with our AI-driven next best action programs, which expose customers to even more of our offer, we believe we're in a great position to take advantage of the opportunity to increase frequency. So let's go into our acquisition strategy in a little more detail. Our acquisition activity uses broad reach brand campaigns and a targeted AI-led multichannel approach with a broadly 50-50 budget split between awareness and conversion activity. We have the strongest brands in the market both at over 90% brand awareness and to continue to build and maintain those brands, we use mass reach channels such as TV, YouTube, video-on-demand and digital radio. For conversion, we use Google, social platforms like TikTok and Instagram and the app stores to harvest and convert intent. So wherever and whenever customers are looking for our brands or for a particular occasion, we are there. And this combination of driving awareness and diverting intent is how we acquire roughly a couple of million customers per year who pay back within 12 months. So what's the end result of this marketing strategy? Well, it's a business that has extraordinary customer characteristics because our brand awareness and position in the market ensures that nearly 90% of our traffic come to us through brand search or direct. Now I've worked across many different industries and haven't come across an online business that has this level of direct traffic. It is both unique and compelling. And over the last years, we have complemented this through a broad social media presence as those platforms have grown significantly. As just one example, in the past year alone, we have doubled our direct traffic from TikTok. All of this sets us apart from other businesses who are largely dependent on paying Google and meter to drive traffic for them. While our brands built and nurtured over the last 20 years due to heavy lifting for us. The other key element in growing our customer base is keeping as many of the customers we have as possible. Let's turn now to how we do that. We create personalized welcome journeys for new customers as we know the importance of early engagement in developing that Moonpig and Greetz habit. In the last year alone, those journeys have driven a 10% improvement in the 60-day repurchase rate. And as Nickyl highlighted earlier, our 19 million reminders are key to building loyal customer relationships with 39% of orders placed within 7 days of a reminder. And we know our customers love our legendary reminder service, when I tell people I work at Moonpig yes, they sing the jingle to me, but everyone has a story to tell about how our reminders have saved them from getting many important occasions. And when a customer hasn't set a reminder, we use our data to create intelligent personal reminders, recognizing past behaviors to encourage customers to purchase again. Data is also key to reactivating an active customers through personalized win-back campaigns. All of this activity is core to driving retention, ensuring we build a strong customer base, creating more opportunities to drive usage, which continues to compound over time. Now I'll focus on the second pillar of our marketing strategy and the second element of the market opportunity, growing customer order frequency. Firstly, in order to engage with customers, we need the opted into marketing and working with our colleagues in product and tech across the customer journey, we've achieved a 60% year-on-year improvement in opt-in rates, enabling us to engage more effectively with customers through all our CRM activities. Our subscription product Plus drives both frequency and retention with over 700,000 active subscribers already Moonpig Plus takes our best customers and grows their frequency by 20% compared to a standard one. Promoting Plus as a service is a core activity alongside the app, where we also see an increased order frequency from customers. In addition, our next best action activity utilizes a combination of AI and real-time data to create hyper relevant customer e-mails to drive frequency. So as an example, if a customer has bought a new baby card and doesn't attach, they would get an e-mail highlighting our brilliant baby gift range. All of this activity combined is designed to ensure our customers return to us for more and more occasions so that Moonpig becomes the first place they start for any gifting or card occasion. So to conclude, Moonpig and Greetz are the clear online leaders in a single cars market that is large and moving online. There's opportunity to grow online marketing volumes fivefold. And our marketing platform grows active customers by driving acquisition and retention. Our technology initiatives give us multiple levers to continue to drive customer frequency. So thank you for listening. I'm going to hand over to David now to take you through the customer proposition.

Thank you, Kristof. Good afternoon, everyone. I'm David, the General Manager for Moonpig and I'm really excited to be here to explain how the platform we have built enables us to source, create and personalize the perfect card and gift for every customer and occasion. Now I've been with Moonpig Group for 6 years, having spent time in retail with the likes of Sainsbury's and WHSmith and the majority of my career in online, including pay.com and Rakuten. Now our product range is a huge competitive advantage for us and the platform we have built ensures we can always have the perfect card, which is critical in unlocking customer frequency alongside, of course, continually evolving an amazing gifting range, which is part of our long-term strategy to grow gift attach. Now let me explain how we've achieved this. We've created a platform that delivers the ideal card on gift combination for every occasion. What does this mean? Well, for our customers, it means they can easily find a card that reflects their relationship with the recipient. Personalize it meaningfully and pair it with a recommended gift for a complete gifting solution. For our business, it means we have a world-class range that gets customers buying more cards and adding more gifts every time they engage with us. The platform strength is built on 2 key components: one, a design platform that offers a carefully curated personalizable selection of cards for every occasion. Powered by technology that lets customers create truly one-of-a-kind designs. And two, a flexible gifting platform designed to deliver curated gifts through diverse sourcing channels, which perfectly align with our card designs. Let's explore each of these in turn. Our global design platform is the engine behind our cards, a marketplace that lets us source cards instantly from designers globally. The platform allows us to launch trending designs rapidly, adapting them to local markets to ensure every customer has relevant options. Our technology then gives customers tools to personalize. Edit templates and add features to both the front and inside of the cards delivering that unique card. And with over 13,000 customizable designs on the front of cards and 10 million creative features used, we really do make card creation effortless. Now let me show you how our platform enables the creation of an unrivaled range of cards. Ensuring we have the perfect cards for every occasion is key to capturing all of our customers' card purchases and unlocking frequency. To do this, our card teams collaborate with a diverse network of creators worldwide to guarantee that we always have the designs our customers want and right when they need them. This could mean our in-house design team delivering seasonal ranges or partnerships with independent artists, capturing moments like the buzz of a Taylor Swift or indeed strategic alliances with major brands such as Disney to secure exclusive collections. Our marketplace model enables collaborations with a wide variety of content creators including leading card retailers, and we're thrilled to announce a new partnership with Scribbler, bringing their popular human cards to our platform very soon. Scribblers enthusiasm to join us highlights the value of our marketplace as a powerful distribution channel and confirms that major brands see us as the go-to platform for cards. But it is by blending our extensive card range with tech-driven personalization features that we are able to truly differentiate our offer from the off-line channel. Our tech-powered platform allows customers to personalize cards in a way that truly sets them apart from the offline market. In recent years, we've significantly enhanced these features, adding custom stickers, video messages and flexible photo templates, creating even more options to help customers create cards that no one else can do. Customers also love them using these features on over 10 million cards now, with our acquisition of Buyagift, we've taken the gift within a card concept to a whole new level, which I'll update you on later. Our creative features don't stop there. We have an exciting road map of new innovative features driven by emerging AI technologies. Our future AI features will set us apart from both the online and off-line competitors, attracting new customers and giving all customers reasons to buy more cards through this. How we achieved this? Well, we are just -- we're just beginning to explore AI card creativity. But in the last year, we launched Smart Text, a GPT powered -- Chat GPT power tool that assists customers in crafting meaningful messages, a feature which has now been used in over 600,000 cards. By removing barriers to this -- to online card purchases, this feature encourages repeat visits, offering a valuable solution when customers struggle to find the right words. And we're only getting started with more AI-driven feature innovations launching soon. In the next few months, we will launch AI stickers where a few simple prompts enables customers to create custom stickers tailored to their cards. Imagine wanting to create a unicorn themed card, which features a cake with exactly 17 candles on for your niece's 7th birthday. Well soon, our new AI feature will bring this to life in seconds, adding a truly personal touch to any card. Alongside this, our AI team is actively exploring new ideas that can completely reinvent the card creation process. AI-generated cards or features such as Facebook could all be possible in the future. But it is our upcoming AI handwriting feature that I believe is a true game changer for new customer growth. Soon, customers will be able to upload their own handwriting to the platform, which addresses a major barrier to online card purchases as for many, the personal touch of a hand message is essential. So let me show you how we'll be bringing this feature to life. [Presentation]

I have to say, I absolutely love that feature and so excited about it coming this Christmas. I'll definitely improve my handwriting. Now let's turn to our gifting platform. Our gifting platform is transforming our business into a dynamic gifting marketplace, designed so that we can curate our range to drive long-term growth in attach rate. Unlike traditional retail ranges, our mission-based sourcing approach is tailored so that we can recommend specific gifts for occasion, delivering a low inventory, high-margin model. Our platform leverages a variety of supply routes, including wholesale, drop ship, consignment and digital delivery to keep our gift offering flexible, relevant and scalable. So let me explain the approach for each of these supply options. To drive attach rate, we must continue expanding our gift range to offer the perfect gift for every occasion. To achieve this, we've developed direct sourcing partnerships with leading brands, giving us access to fast-moving gifts with proven sales records, ensuring we not only boost attach rates, but also maximize margins. We collaborate with trusted brands to offer a wide range of gifts across categories. In chocolate, for example, we cover every occasion from everyday indulgences with Cadbury to premium milestone birthday occasions with Hotel Chocolat, with partners often collaborating with us to create exclusive products seasonal items and joint marketing initiatives. Whilst this has previously formed the vast majority of our gifting range, that's now changing with the new capabilities we've built. Two years ago, we made the strategic move to bring gifting fulfillment in-house within our Tamworth facility. This decision has transformed our flexibility in product range and inventory management. Upgrades to our stock management system mean that as of last month, we are now able to work with partners on a consignment basis which really is a game changer for us. It means we can find world-class partners to manage entire categories, getting access to leading brands and their complete product ranges, all with no inventory risk. Our first partner launched with this model is the Toy Giant, the Entertainer. The early results are encouraging, and we've already seen strong growth in the attach rate for Baby and Kids Cards in the very short time since we launched. Combined with our flower business, consignment now makes up over 20% of our gifting range and we have an ambition to double this in the coming years as we look to find new category partners in verticals like health and beauty, homeware and books. So we have built the capability to create a physical gifting range that perfectly complement every card design. And with our acquisition of But a Gift, we also now got the capability to expand into digital gifting options as well. Digital gifting is a key strategic pillar of our business providing customers with a new way to gift and enabling us to source an experience for every recipient and every occasion. In under 2 years, we have delivered a GBP 2 million business that is on a trajectory to reach GBP 5 million this year, and we see growth potential in this category rising to GBP 10 million over the next 18 months. Alongside strong growth in digital experience sales on Moonpig we've expanded our gift in a card concept beyond the experiences sector. Our first step is launching digital gift cards in the U.S. with plans to bring them to the U.K. very soon. And by introducing same-day gifting through e-cards, we've extended our peak sales period established ourselves as the go-to destination for last minute gets. So in summary, the last couple of years have given us transformable new capabilities to grow and enhance our gifting range with the addition of consignment capabilities and digital gifting, as we continue to add more brands new category partners and expand our digital range, we are confident that this will drive our gift attach rate higher in the long term. Now let me show you how bringing all of this together create something truly unique, an experience that simply can't be matched by anyone else. So for the ultimate gifters amongst you, here's what can be created when we combine all our unique features and extras into one unforgettable gift solution. Now while customers don't have to be this creative and many may choose not to be, those who want to unleash their creativity will find that only Moonpig has the tools to make it happen. This Disney card showcases full personalization, custom stickers, a video message, photo upload and even someone's handwritten note paired with an afternoon tea experience and a Disney theme bouquet recommended by our engine. This card is a one-of-a-kind memorable gift only available with us. So in summary, our platform enables Moonpig and Greetz to source the best card designs and gifting brands from a broad range of partners. Our technology is enabling a rapidly increasing number of our customers to personalize their cards in innovative ways. We now have a full consignment availability capability, enabling us to work with partners to manage entire categories all inventory free. And digital gifting sales are doubling year-on-year. Thank you for your time. I'm excited about the road ahead and the incredible potential our platform holds for the future. Now it's time for a break. There are tea and coffee outside, and we'll see you back here at 03:40. Thank you very much. [Break]

All right, everyone. I think hopefully, everyone is in and seated. So we'll kick off with the second half of the event. First, Georgie is going to talk us -- talk through technology and how we're using data everywhere in the business to really enhance the growth, then Andy is going to take you through the much awaited financial section, which will kind of remind you of the quality of our model and of course, talk about cash returns. And then we'll have the whole team up here to have a kind of extended Q&A session after that. So yes, over to you, Georgie.

Thank you, Nickyl. Welcome back from the break. I'm Georgie Smallwood, Chief Product and Technology Officer at Moonpig Group here. I joined last year after almost 2 years in tech, the last few years in Berlin, where I led tech teams at some of Europe's fastest-growing consumer technology companies, including N26 and Tier Mobility. I was drawn to Maine because it's a brand with a clear purpose, a huge market reach and opportunity and, more importantly, a commitment and a talent for tech-driven growth. When I joined, Moonpig's technology team was wrapping up a major replatforming effort, and it was the perfect time to jump in as we pivoted from transformation to growth. Today, I'm thrilled to show you how our rich data insights and tech capabilities position us at a powerful intersection of innovation and growth that redefines customer experiences and expands our impact at the group level. Before 2022, Moonpig embarked on a multiyear replatforming journey, since then, it's taken us less than 12 months to get our organization running at true growth levels of impact and delivery. We introduced a strong focus on experimentation and this data-driven approach has enabled us to move rapidly into growth phase and a period where you really start to see the return on investment shine. Since the last financial year, we've been accelerating that growth. With 162 experiments, we are delivering more personalized experience and faster product iterations every day. The step-up in experimentation and its corresponding impact is key to our payback model, where every single investment we make and every product we build pays back within 2 years. What's been really fantastic is that the way that we designed our platforms perfectly set us up to take advantage of all the emerging technologies we are seeing now. A direct result of this is that technology is driving the revenue growth of Moonpig Group and we do this through 2 principal ways. Those 2 ways are through continuous compound improvements to our user experience; and secondly, leveraging AI over our unique customer data. The good news is that both of them are flywheels that continue to get smarter every day. Starting with the first. We are running large numbers of experiments and every time we roll it out, we get better at learning and get better at predicting the right experiment to run next. Each of these experiments is a directly controlled test where we show different versions of a feature to different customer groups and then we measure the difference. With each test, we are then able to directly see the impact that the changes had on a particular KPI, such as conversion rate or order value. The second way that we drive revenue growth through technology is by leveraging AI over our unique customer data. And this is where the magic of Moonpig really shines. Online greeting cards provide rich multidimensional data sets, revealing demographic details, emotional context, relationships and customer intent that other verticals just don't provide even having worked previously in a digital bank, I am astounded at the information that we have here at Moonpig. Many companies know what their customer is doing. But Moon Peak's magic is that we know why they are doing it. and we can leverage that to drive each KPI. Now I want to share some examples of the types of experiments that we are doing and those that make a huge difference to customers every day. The first bucket is about removing friction and improving the conversion rate for customers. We did over 70 experiments in this space in the last year alone, each one designed to create a more seamless journey for our customers. Many of you who might use the product have noticed this continuous stream of improvements over the last year. Just one example is our introduction of social sign-on with Apple and Google. It's one of the many changes that streamline the user journey. Previously, customers had to manually enter their e-mail and password. But after implementing this feature, we saw an additional 2.5% of customers move on to the next step in the journey. Another example is the functionality to save your card drafts before customers could lose their progress if they left the page. But by allowing them to save their drafts, we've seen an additional 1% of customers complete their order with us. So we can really see that small changes to the customer experience can have a huge impact on performance. And we've also done loads of tests that have driven up our average order value. One example here is the introduction of new ways to showcase add-on gifting products. Previously, these product details were shown in a singular way. But after redesigning the experience to make it more engaging, and give the customer more choice. We saw a 54% growth in adding a second gift to an order. It's important to note though that not all of our experiments are technically complex. Some are as simple as testing different copy changes, like here, where we introduce a motive language to encourage upsell behavior when selecting card sizes. Through this small adjustment from the actual card size to a more emotional copy, we saw an extraordinary change in the customers' behavior. And only when you have a culture of experimentation like we do, can you test for things like this as they wouldn't show up as a statistical opportunity in performance reporting. And another area that we are obsessed with experimenting on is customer satisfaction making the user experience more intuitive is crucial when focused on building a loyal customer base. One improvement is in address suggestions. Previously, if an address was invalid, customers were required to correct it manually, but now we offer smart suggestions to auto correct the address, resulting in an incremental 75% of incorrect addresses being fixed. This reduces friction and ensure smoother ordering processes, but also more successful deliveries for our customers. And now the upgrade was the date first checkout flow which now allows customers to select their delivery date very easily with the experience prompting them to recognize that they can order in advance. This enhancement has led to 6.7 percentage point increase in forward ordering, that's a tongue twister. As customers can more easily plan their deliveries and take advantage of more economical postage pricing. These examples are just a glimpse of the many adjustments that we've made and each experiment contributes to a smoother and more efficient user experience. It's these continuous iterative approaches to testing and refining that drives the compound growth in our key metrics. So we've looked at how experimentation is driving significant improvements to the experience. But now let's have a closer look at our data intelligence layer, how we leverage our unique data sets with AI technologies to enhance our algorithms and ensure we connect customers with the perfect card and gift every time. And like I said earlier, this is really where the magic that is Moonpig comes to life. So let me show you how we do it. First, our strategy begins with understanding who you're buying for, why, what and the style that you prefer. We even understand how much effort you're willing to put into personalizing the card. This level of customer understanding is vastly superior to other online commerce verticals where they only know what you're buying and not much else. This deep level of customer insight allows us a unique position to capture intent accurately and on an individual level. And then our proprietary algorithms process all of this collected data and provide recommendations at key moments in the customer journey. Our algorithm also knows where gift purchase intent is the highest and AI will step in to make data-driven improvements in gift ranges, making sure that your experience is perfect. With over 40 million cards sold, this AI-driven approach enables us to provide an unmatched personalized experience, which ultimately drives a stronger conversion. So when thinking about that customer journey, we ensure that at every touch point, the online experience is highly targeted, thanks to this unique and extensive data set that only we have. We have tens of millions of visits to our home page every year. And because of that, our ability to personalize our content across sites and apps is incredibly important. For example, the homepage banner can be tailored specifically for you, whether you're a target customer for our Plus membership or you need to understand the creative feature that you haven't used before. The homepage will ensure that you start your journey on the right foot. And reminders, they are the most incredible asset that we have. For each of the 90 million of them that our customers have set, we actively suggest products tailored to previous purchases and what we believe will suit that occasion and your recipient the best. This drives the impact of reminders to nearly 40% of all orders performance you won't find anywhere else. Targeted promotions are something that we've really focused on in the last 12 months. We know that offering personalized promotions at the point where a customer is most open to convert makes them so much more impactful. We also know that not everyone needs the same level of discount and margin awareness was key when running the experiments in this area. The most important thing though about our algorithms is that they power these experience -- sorry, the most important thing about our algorithms is that they power these experience is that they're self-learning. So every single page a customer visit, every card they click on, every reminder they set, all contributes to a more personalized and more optimized customer experience and thus more revenues. But it's not just our existing data powering the customers personalized experience. At Moonpig Group, we've just we're going -- we create new insights and they're helping us to better understand our customers' intent and ensure we match them with the perfect card. So let me show you the transformation from manual processes to AI-enhanced methods that we've just begun to explore. Before AI in the past, employees manually tagged each card with simple keywords like anniversary or bubbles in this case. When a customer search for these terms, the system could only provide them an exact match based on those tags. For instance, if a customer searched for bubbles, it would return only the one card in our range of over 35,000. With AI, the process has become far more sophisticated and we've begun to generate consistent and systemic detailed descriptions for every card using large language models, making it easier to find relevant matches to a search query. Our AI now not only provides exact matches for those search terms but also delivers similar matches to the search that the customer entered -- by analyzing the meaning and context behind each word, the system services cards that align more closely with what the customer is looking for. A great example is that bubbles now returns Champagne, but also a picture of a bubble bath. And the reason this is so impactful is in the last 6 months is beginning to build our semantic search. We've processed over 1 million completely unique search terms entered by customers. Manual exact matching isn't possible on this level. Hence, why only one card returned to the search of bubbles. But with AI, we can now return 440 relevant cards for the same search term. One of the metrics which we track while experimenting in this space is how quickly the customer finds the card that they want. And we've seen this time reduced as we brought these enhancements to market, and we expect this to continue making it faster than ever to find exactly what you're looking for, which we know drives conversion. The best part of this is that we have built our search architecture to directly integrate with OpenAI. So every enhancement that comes to market, for example, GPT 5 will additionally and immediately improve our capabilities. Our algorithms are the invisible driver within all of our performance metrics. None more important than gift attach. Attach rate is an absolutely critical part of the future growth of our company. And the way we use our data to power our gift recommendations is the primary driver of that. Over the past 4 or 5 years, we've nearly doubled our attach rate from around 9% to over 17%, marking an incredible journey of growth that is not nearly done. Each new data set that we integrate lifts our algorithms performance, making our recommendations more precise and more impactful. Initially, our cross-sell algorithms focused only on customer browsing behavior. If a customer browse romantic gifts for instance, we made a manual chosen suggestion like a heart-shaped chocolate box that match that theme. Next, we laid in card design data. If someone selected this bundle of Joy card for a new baby, our algorithm started to intelligently recommend complementary gifts like a plush toy. These suggestions were reflective of the purchasing trends of customers who made similar choices, helping us to pinpoint the most popular gift pairings. Then we've incorporated individual customer behavior. For instance, if a customer like Emma here, tends to buy higher-priced items, then we tailor our recommendations to suggest premium gifts like a bottle of Moet. This approach ensures recommendations match each customer's spending profile, optimizing every interaction at a single customer level. But our journey hasn't stopped there. With the advent of AI, things are getting really, really exciting. And now we use AI to analyze the sentiment behind the messages customers right, even inside the card incorporating that real-time insight directly into our gifting algorithms. We call this live inference and it enables us to make recommendations even more meaningful. And let me show you this in a little bit more detail because it's actually really cool. We've just started using live inference to interpret sentiment and context within a customer's message as they are writing it, allowing us to continue the enhancement of gift suggestions that drives a stronger attach rate and increases average order value. So imagine a customer is sending a birthday card to their mom. The message might include personal details like what birthday it is that they love bags and that it's sent from her daughter and her grandchildren, along with the heartfelt mention of a celebration of her new role as a grandmother. Our AI system analyzes these nuances in real time. Informing the cross-sell algorithm of these insights about the recipients interests, family relationships and emotional tone. With this understanding, we can immediately recommend a truly thoughtful gifts like personalized mug, celebrating her as a grandmother or a lovely bath gift set. By capturing the finer points in each message, our AI delivers gift suggestions that resonate deeply and align with the customers' intent. Ultimately enhancing the likelihood of them attaching a gift. And by combining these advanced AI capabilities with our unique data sets, card design, behavioral insights and real-time sentiment analysis within messages as well as our rich customer profile data on reminders, addresses and relationship types. We're delivering the most targeted gift recommendations in the world. And this is only the beginning of our plans to optimize our unique data set. We've got years of enhancements planned to ensure that any journey with us is tailored just for you. So to wrap up, here are the key takeaways from today's presentation. Technology is driving the revenue growth of Moonpig Group. Rapid experimentation is delivering consistent upgrades to the customer experience and driving our key performance metrics pairing our customer data with intelligent capabilities delivers an unmatched personalized experience. And AI unlocks significant improvements to our recommendations which we expect to drive growth in conversion and gift attach rates. Thank you for listening. And I'll now pass you to Andy to take you through the financials.

Thanks, Georgie, and good afternoon, everyone. For those of you who don't know me, I'm Andy MacKinnon, the CFO of Moonpig Group. Now today, you've heard from Kristof on how our marketing strategy positions us to grow the online card market fivefold. David has explained how our platform is designed to ensure we have the perfect carbon gift for every customer on every occasion and Georgie has explained how we use technology and data to drive revenue growth. I'd now like to bring all of this together and explain how it provides us with a platform for delivering sustained, compounding double-digit revenue growth high profitability and robust cash generation. We've built a platform with outstanding financial characteristics. Our revenue base consists of loyal customer cohorts, which continue to strengthen and our revenue growth is underpinned by clear drivers. We have structurally high profit margins, low CapEx, which is managed within a clear ROI framework and negative working capital with low inventory. Together, these result in high, consistent and growing operating cash flow. These attributes are reflected in our medium-term targets, which are for double-digit percentage annual revenue growth and adjusted EBITDA margin rate of 25% to 26% and adjusted EPS growth at a mid-teens percentage rate and net leverage of approximately 1x. Our financial model is built on the foundation of loyal customer cohorts of both Moonpig and Greetz existing customers now account for 9% of total revenue. This means that we've built -- we have a high-quality, resilient and predictable revenue base. In addition, we've strengthened these cohorts consistently across all customer groups over the past 5 years, reinforcing the revenue growth potential of our business. Our cohorts demonstrate exceptional loyalty, and we further strengthened them through significant increases in both retention and frequency. At the time of the IPO, we highlighted how our cohorts exhibit remarkable predictability and consistency. And you can see this on the chart on the left, which relates to the years before COVID. It shows year one retention at around 50%, followed by an annuity-like retention pattern in subsequent years. Since then, we have step-changed our cohorts. The second year retention rate has risen to 58% and we've increased order frequency by 20% over the last 5 years. As a result, we've significantly increased customer lifetime value. And importantly, these gains are not specific to particular cohorts because we've seen improvement across the entire customer base. Indeed, we strengthened every single annual customer cohort. The cohorts of customers that engage with Moonpig during the lockdown period have seen the most notable uplift however, it's particularly encouraging that more recent cohorts are also outperforming those from equivalent to pre-COVID periods. Let's look at the charts again. The chart on the left shows revenue retention from the cohort acquired in FY '18, which has risen from 52% in the year following acquisition to 72% last year. The middle chart shows the cohort acquired in FY '20, for which revenue retention reached 73% last year. This is materially higher than the retention rate for pre-COVID cohorts at the same 5-year mark. And finally, the chart on the right shows the FY '22 cohort with a retention rate of 56% last year. This compares favorably to the pre-COVID cohorts, which had a retention rate of around 50% of the equivalent 3-year point. This consistent upward trend across all cohorts gives us confidence that the improvements in cohort behavior are not just temporary and should continue to be sustained over time. Looking ahead, our goal is to create smiling cohort curves, where revenue consistently improves over time, driving an upward trend on the right-hand side of each chart. Moonpig and Greetz have a clear path to double-digit revenue growth with 3 powerful revenue growth drivers. We aim for 2% to 3% of our growth to be delivered by expanding our active customer base 3% to 4% by increasing frequency and 3% to 5% by growing average order value, which includes raising gift attach rate, pricing and upsell. Our goal is to drive revenue growth equally through both orders and average order value, which we demonstrated in our second half results for FY '24. These growth drivers reinforce our confidence in the group's medium-term target to deliver double-digit revenue growth. Looking ahead, we will align our disclosure with these 3 drivers and routinely report on active customers or distractive customer and average order value. We will explore these metrics on the following slides in each case, looking at the position before COVID in FY '19 during COVID in FY '21 and most recently in FY '24. Our active customer base is back in growth Moonpig and Greetz grew their customer base in the second half of last year, reaching 11.5 million active customers at the end of April 2024, and this upward trend has continued in the current financial year. Looking ahead, each new cohort of customers should reliably drive first few percentage points of our annual revenue growth. Now let's look at how we're driving growth through increased order frequency. We've uplifted frequency by 1/5 across the last 5 years. All this practice customers have grown at a compound annual rate of 4% powered by levers that include our reminders, active Plus subscriptions. This is important because frequency represents a long-term growth opportunity. Whilst online bio penetration of the cards market stands at 39%, customers are still buying most of their 19 cards per year from off-line. Now let's move on to the final of the 3 growth drivers, which is average order value. We've driven a 25% increase in average order value across the last 5 years through growing the gift attach rate adjusting pricing and upselling. We've built a strong track record of growing gift attach rate, increasing it from 14.3% in FY '19 to 17.3% in FY '24. Despite facing strong market headwinds for discretionary gifting, we've successfully maintained this rate above 17% during the downturn. Our card for strategy ensures that even where attach rate remains steady, we can still grow attached gifting revenue by increasing card orders as we demonstrated in the second half of last year. Through A/B testing, we've confirmed that we've positively impacted our attach rate through improving our recommendation algorithms, enhancing the user experience and strengthening our gifting product range. When the external environment becomes more favorable, we expect these initiatives to contribute more visibly to headline attach rate growth. Recent gifting market headwinds have also impacted our Experiences division. We expect experiences to deliver double-digit growth in the medium term, driven by 4 key levers. As Nickyl set out earlier, these 4 levers are increasing orders through the Buyagift and Red Letter Days websites, growing average order value, including the impact of price inflation, expanding sales through third-party partners with Moonpig now the largest of those and leveraging our redemption website to drive upsell revenue from gift recipients. We're executing strongly against our transformation plan for experiences with technology improvements contributing a cumulative GBP 20 million of incremental gross sales. However, given the division's price points and focus on discretionary gifting, experiences is facing a challenging market environment, and this is reflected in our growth time line expectations. Our platform delivers structurally high profit margins and high operating leverage. All our revenue growth levers are margin accretive. This includes gift attach rate as the gross margin rate on gifting is higher than our target adjusted EBITDA margin rate of 25% to 26%. As our business grows, this operating leverage could either boost profit margins or as we've chosen, enable us to reinvest any surplus above our target range to underpin and potentially strengthen revenue growth. This positions us to maintain profitability whilst fueling future growth. Our high profit margins are sustainable, thanks to the unique strength of the Moonpig Group's business model. Our card first strategy means that we can acquire customers on less than 12 months payback. 90 of our revenue comes from loyal customer cohorts, and we're able to cross-sell gifts to customers at 0 incremental marketing cost. Together, these attributes give us direct control over most of our revenue base, shielding us from external risks such as competitive bidding for pay traffic acquisition. Moreover, our scalable technology platform enables us to invest in new technology features that drive revenue growth. We've established a clear internal framework to monitor ROI. Georgie talked earlier about how we -- and our technology organization is now focused on delivering growth. and we're determined to ensure that we optimize the return on our technology investment. Each technology team operates with quantitative targets that align with either revenue growth or profitability improvement. We measure the impact of new features through A/B testing, which allows us to track the monthly financial contribution of each team. We work within an approximate 2-year payback period, which translates to around a 20% pretax IRR over a 3-year useful life and that actual performance is tracking in line with these expectations. This gives us confidence that our technology investments are appropriately scaled and enables us to prioritize investments into the specific technology teams that are delivering the highest returns. We have a highly efficient working capital structure with very low levels of inventory and negative net working capital. You heard earlier from David about how our gifting platform allows us to operate with very low inventory. Since the operational facilities that we opened in FY '23 reach maturity, we've consistently kept net inventory in the single-digit millions, meaning that we have low exposure to inventory sell-through risk. The balance sheet at April 2024, which represents a typical year-end working capital position, reflected negative net working capital equivalent to 25% of revenue. And this means as our business grows, will drive cash inflows from working capital, which feeds directly into our strong operating cash conversion rates. Our business delivers consistently high levels of operating cash flow. Operating cash conversion has been around 80% in recent years, with FY '23 and outlier due to investment in operational facilities in the U.K. and the Netherlands on 10-year leases. This operating cash flow has allowed us to rapidly deleverage if we were to continue letting that cash flow feed through to lower net debt, our current trajectory would take net leverage clearly below our 1x target during the second half of this financial year. We follow a disciplined approach to capital allocation. Our target is to maintain net leverage at approximately 1x over the medium term. We continue to prioritize organic investments to drive growth in particular, in areas like technology and marketing. Whilst we will always prioritize investment for growth, our strong cash generation provides us with the financial flexibility to return excess capital to shareholders, and this is reflected in our new dividend and share buyback policies. Today, we're introducing a progressive dividend policy and launching our first share buyback program. Our new dividend policy commits to maintaining dividend cover of 3 to 4x in the medium term. For FY '25, we intend to pay a total dividend of GBP 10 million, which we expect to grow that thereafter in line with adjusted EPS. The first interim dividend will be declared when we announce our half year results in December 2024. Alongside this, we've today announced our first share buyback program retaining up to GBP 25 million starting in November 2024. Our policy is that we will only conduct buybacks when they use excess capital and their earnings enhancing. Let's now recap on the medium-term financial targets that align to our focus on compounding revenue growth, profitability and cash generation. Our operational targets remain unchanged. We're targeting double-digit revenue growth, adjusted EBITDA margin of approximately 25% to 26% and adjusted EPS growth at a mid-teens percentage rate. The operating cash flow, we aim to maintain inventory in the single-digit millions. We expect to hold capital expenditure between 4% to 5% of revenue, and we aim for operating cash conversion of between 70% and 100% of adjusted EBITDA. And finally, as I've just outlined, our approach to capital allocation is to target net leverage of approximately 1x, dividend cover of 3x to 4x, a dividend which grows in line with adjusted EPS and share buybacks, where there is excess capital and it enhances earnings. So in summary, Moonpig Group has a financial model which featured a standout combination of revenue growth, profitability and cash generation. We have clear drivers of revenue growth at each of our divisions. Revenue at Moonpig and Greetz is underpinned by resilient cohorts that we have strengthened. We have structurally high profit margins and robust cash generation, and we have today announced a new dividend policy and our first share buyback program of up to GBP 25 million. Thank you, everyone. And now I'll hand over to Nickyl to summarize the key messages from today's event.

Thanks, Andy. So I hope today's presentation has shown you how the competitive advantages that we have built position Moonpig Group as a true platform business with market leadership, exceptional customer retention and strong profitability. This all sets us up for a sustained double-digit growth trajectory. Our incredible customer cohorts at Moonpig and Greetz have grown even stronger over the last 5 years. We continue to extend our distant market leadership in a market that is rapidly transitioning online with a huge runway ahead of us. Our investments in technology and AI are now directly powering that growth. And this all leads to high profitability and cash generation, which is why today we are announcing our new dividend policy and our first buyback program. So we'll now move to Q&A. If you just bear with us, we need a minute or so just to get the chairs on the stage, you can chat among yourselves. And then we'll have to take the first question in a minute or so.

All right. Well, you have the whole team here. Here is our first question.

Alison Lygo from Deutsche Numis. I'll kick up with 2, if that's okay. So one just on experiences. You talked about the kind of customer survey data you've got in terms of what holds customers back from maybe buying a card online. Do you have any kind of similar insight in terms of what maybe holds them back from purchasing a gift online or attaching a gift? And then wondering if you could talk a bit about how you're looking at evolving the offer for the consumer in the kind of experiences businesses or anything that you're looking to do in terms of evolving the proposition for a new consumer? And then the second one would just be on M&A. So clearly, you've said disciplined in your approach to that, but just wondering what would be high on your wish list in terms of acquisition if it was to come up? Is that a new capability, a market, anything like that?

Sure. I'll take the first, and Andy can pick up the second. And I think just for your information, Ronan, who runs our experience business is here, so maybe grabbing afterwards, if you want any detail that I don't share. I think that -- so the data we do have on the U.K. is obviously the market is in decline, right? I think we get that data pretty consistently. And I think it's just really a kind of a result of discretionary gifting at a pretty high price point is kind of naturally going to come under pressure when the customer -- when the consumer isn't in a strong position. I think that said, there are pockets of demand. When cold plays in town, no one minds spending GBP 200 on a ticket, right, [ 100, ] 1000 times. So it's like -- I think there are areas of demand. So really for us, what we're looking at now is we've built a platform that gives us flexibility to do a lot more with the range. And so there's a lot of work now on, well, what do we do with that? And so one pillar is trusted brands. So actually, can we follow the U.K. model and really bringing on more brands. And so we're starting to see that. So we've got some great brands. We've got Merlin theme parks. We've got Harvey Nick, Harrods on board. One of the big launches actually in the last couple of months was getting the Stonegate Group. So Slug and Lettuce, pubs [indiscernible] onboard. And actually, you see instantly, they get traction with customers when you just have these brands that just feel like people feel more comfortable gifting than may be an unknown provider of flying lesson. So I think pillar 1 is trusted brands. I think the second thing is looking at kind of more immersive experiences. So that might be -- if you think about the balloon museum that popped up or there are kind of [ Experis ] exhibitions going on or things that kind of happen, including live events. And I think just can we tap into that in some way? I think that's something we're looking at and maybe even offer a sort of live booking service rather than giving it kind of without receipt -- without a date booked. And then the third area is subscriptions. So actually, we sell -- we offer a HelloFresh box on the platform. And it's been one of the best-selling products not only on the Experiences [ business] side, but actually on the Moonpig platform as well that amazingly, a lot of people want to give their mom or dad HelloFresh boxes on Mother's Day or Father's Day, who knew. But actually, I think there's something really there with subscriptions that actually could you take that to flower subscriptions, Netflix subscriptions, chocolates subscriptions, cookery course, lessons. I think there's like a lot we can do, and that's something we haven't really tapped. So I think for us now, the work is about we've now got the capabilities to expand a lot more -- a lot more than we were able to before. And so it's really saying where are those pockets of where our customer is still spending and still gifting and actually just going there. So I think the next year, we'll see a pretty strong evolution of the product, and we think that will -- chasing the demand is kind of obviously the right -- a better strategy than waiting for it to come to us.

On the second point, there's nothing on the horizon in terms of M&A. I think a couple of points there. I mean, firstly, I think we're very conscious of the need to deliver on what we see as the potential of the Experiences business before we look at other assets. I think also there isn't a huge universe of assets that meet what would be our criteria. So I talked in the presentation about the fact that we'd need to have both a high strategic and financial bars. It's something -- it has to make sense in terms of being able to sell that product and cross-sell across to Moonpig customers. But also, you've got a stand-alone business that you acquire. So it has to have a really attractive P&L structure in and of itself. And so I think we'd be very selective. We do look at things in the markets as they come up. There obviously isn't a universe of assets to acquire in terms of moving into new markets because nobody outside of Moonpig and Greetz in the U.K. and the Netherlands has created this concept of the online purchase of a physical card. So the route to market there is organic because it's us doing the work that we've done in the U.K. and the Netherlands again in other territories. But we continue to look at the market, but as I say, with a very high bar.

Sorry, John, you were ahead of me there, but I'm taking the mic. Hopefully, I don't ask your question. You -- I'm interested in your payback on your CapEx. You sort of talk about a less -- approximately 2-year pretax cash payback -- so on sort of 5% of revenue. So if we think about that, you're doing GBP 350 million of revenue, 5% is what GBP 17.5 million, 2-year payback, that's GBP 8.5 million a year of benefit from ROI on projects that you're investing in broadly. And that compares to PBT of GBP 60 million. So if you get an GBP 8.5 million of benefit from payback on projects, plus the market is moving in your favor, perhaps some cyclical tailwind at some point. Is there a potential that we just massively overshoot 10% growth?

I think that's definitely one for you, Andy.

Yes. I mean look, we are -- when we talked about those paybacks, we're talking about the payback on the CapEx that we invest into the technology team. Clearly, we've talked about our revenue growth drivers. And I think the important point is that delivery on tech investment is not on top of the delivery of each of those 3 drivers. It's actually how we deliver the improvement in AOV frequency and to extent actually customer acquisition. I think we're at the -- as Georgie said, we're effectively at sort of that pivot point of moving into technology-driven growth. I think we're comfortable with where we sit with our revenue guidance at the moment. And I wouldn't want to call out any acceleration beyond that.

John Stevenson from Peel Hunt. Two questions on the different, which is good. Can you talk about the level of churn you see in the active customer base? I guess you get the year 1 drop off and then people are inherently sticky. And second question, just wondering about sort of gift abundance. So for customers that are -- look interested in attaching by the card, but actually don't attach. And I guess you're not going to give me a number, but how is that improving over time? How are you getting better at stopping those gift abandon?

Yes. So maybe, Kristof, if you can talk to kind of what we're doing on retention and kind of about sort of some of the initiatives there. Yes. And sorry, can you remind me the second question? I didn't get really there.

Yes, I don't think I put in a brilliant terminology. But I mean I guess, customers that are abandon a potential gift purchase, I guess. So you buy a card, you are interested there clearly browsing gifts, but they actually don't attach. What's your abandon rate? And I'm assuming you're not going to tell what it is, but how is that number improving? And how are you improving that number?

Yes. And I think actually, Georgie can talk to that. So a lot of the work we've done on personalized promotions is actually really helping on that front. That's probably the main initiative there. So do you want to start with...

Yes. I mean my job is to keep the customers we pay to get and we do that in a variety of ways, right? So obviously, we have -- we talked about it earlier. We have clear welcome journeys, which are becoming more and more personalized with the help of Georgie's team in terms of if you've come in through one channel, we might get you onto the app, we might put a free card in, might put a free gift. So that those personalized welcome journeys are increasingly more important to us to kind of get you locked into the Moonpig or Greetz habit. So that's kind of the first thing we do. We obviously have a huge amount of reminder. We talked about GBP 90 million working across Georgie's team as well in terms of putting that through the customer flow because that's another great reason to get you locked in. We also want to get you on the app because we see better retention and better lifetime value on the app as well. So those are kind of like 3 of the key sort of tools we put in place to your first customer journey to get you kind of locked into the Moonpig or Greetz ecosystem. So that's really what we do to try and get you back and get you back quickly and get you into that Moonpig habit.

Is there a number on churn we can talk to?

So I mean the churn after year 2 is essentially 0. And I think you can see that in the cohorts. And so essentially, the question is just how many customers don't come only by once and never come back. And I think that's actually where we don't share the number. It's kind of -- it's probably slightly less than half. That's probably the ballpark there. But really for us, it's like if you can grow that number, it's great because we kind of know if we do get them, we basically got them forever. Georgie?

Yes, I can add a little bit. So our personalized promos work is looking at exactly that. So exactly where at the point in the journey is best to put that promotion to make sure that we convert that customer into an order. And then also all the way down to the basket. So for instance, if you go through the funnel and you only have a card in, then we can add a promo for a gift to increase that average order value and making sure that all those personalization algorithms are giving you exactly what you didn't really know that you needed, maybe all the way through that journey. So the likelihood that your brand in the basket is actually quite low.

I think the other example I would just give on that is we obviously have a huge amount of data, both from search terms and what people are clicking on. So we can see in real time how people are shopping and what they're converting. The one example I would just say is in the baby category and the toys category, which was absolutely driven from the fact we could see an abandonment rate. We didn't have the right complementary cards in kids brands or in baby products, and that was the area which is why when we talk about trusted brands, they are targeted trusted brands to complement that data. And that's exactly the reason that we ended up with a fantastic relationship with [indiscernible].

I think just that there is another point actually that one of the other strategies we've looked at is actually if a customer isn't attaching, we give them a promo they're still not attaching. Is there a chance to get them to attach something. And so actually, we tried at the checkout having sort of a second mini cross-sell where you show much lower-priced items. And that's actually where we're going to be experimenting with gift cards when we bring them to the U.K. that actually maybe that's an opportunity just to put a GBP 10 voucher for another brand in there, which is a low margin, but at least it's getting you to do something. So we're trying to be creative about where, when and how we show different gifts and promotions.

Charlie from HSBC. Could you please comment on the disparities between yourselves and where your cards are sold versus the off-line market? For example, my mother would probably send one card to me, but would buy 40 Christmas cards. I'm just wondering whether disparity is for you versus, say, the off-line market?

David, do you want to talk to that? I guess it's a difference in probably category mix and pricing.

Yes. I mean I think the difference really is when we're looking at the style of cards. So our big focus is on personalized cards and driving that. So we look at the occasion and recipient combination, which we refer to as mission as the real focus of how we really drive cards. And I think there's an element of -- Nickyl mentioned it earlier, there are other places where you can get a cheaper card, but that's not really what we're driving because they don't have the benefits within that. I think your point to Christmas is, again, a different proposition where you're buying an often bulk to send multiple cards. What we're doing is really trying to focus on the personalization, the upsell and the features to offset that in other markets. So I think the whole point of the change from the online to off-line is around what we're doing from the -- making the features so much better to drive that point, which is why maybe you said you mom buys one versus the other one -- the further ones in Christmas. I think the only other thing I would say is when we talk about frequency, we also talk about how many times we are trying to get cards. So we're doing a lot of work in terms of be it the promotions that we said through the journey to try and encourage you to buy more. There is a level of activity that we do with Plus, et cetera. So whilst we know that customers come for specific emissions, we're doing a huge amount in some of the small emissions. And Grand Parents Day is a fantastic example where we've really embraced those sorts of things to try and get people to come and shop a wider range of cards with us. And certainly, that is our focus to make sure that we're communicating with that for every occasion and not just a big birthday or whatever it might be.

Yes. I think just for clarity, all of the market data that Kristof shared in terms of the card market, the growth that excludes what we call box sets. So that's where you buy 10 or 20 or 30 cards in a box, that doesn't include it. So all the data we look at is all about single send cards. And so I think there is a question of can we really tap into that Christmas market and -- you probably saw some of the capabilities in Moonpig for work could probably very naturally apply to that, but that will be a focus in the future.

I think we're also trying to build the Moonpig brand to being a better card, right? So actually, for kind of send and recipient, it means more. And I think that's part of the move as well that we're trying to push.

It's Anubhav Malhotra from Panmure Liberum. I just had a couple of questions. First one on -- in the slide pack, you did say 37% of customers do buy online, but only 6% of the cards are sold online, individual cards. So is there still a case that personalized cards are seen as something that is for a special occasion? And then is there a case for you to differentiate between -- on pricing between personalized cards and nonpersonalized cards on your website? That's the first one. And second one is on attachment rate. Clearly, that's a focus of the group to drive attachment rates. Is that a metric that you would be disclosing now onwards in your financial report consistently? And then just the last one, which is more a personal question. Can you get your tech to please tell the people buying cards that they're buying the same card that they bought last year because my wife gave me a lot of pain for that?

On that last question, our previous CTO had exactly the same issue. And so remind us now do you remind you of which card you bought the previous year. Yes, it's not a common area, but it's more than [indiscernible]. Yes. So I think maybe, Kristof, do you want to talk to the sort of the customer trend and kind of the, I guess, how we can capture more wallet share from those 37% people buying online? And then Andy, you can remind on the disclosures there.

Yes. I mean I think that's our opportunity, right? So we've got 6%, but people are in the habit. And I think the whole point of what we've talked about today, better proposition, better products, Moonpig is a better card as well as we've got reminders and all these other services about driving that habit and getting people to come back to us more. So I think all of those tools are in place. And obviously, through -- we have a huge amount of direct traffic as well, but obviously through our paid traffic, we are pushing that message out as well. So that's how I would talk about that.

Yes. And in terms of metrics, I mean, obviously, during today, what we set out is what we see as being the 3 key drivers of revenue growth from Moonpig and Greetz. We've said that we will -- we'll dispose against each of those. So we are expanding our disclosure set to give active customers orders per active customer and alongside that average order value. I think attach rate is one, but not the only driver of average order value. We're not planning to routinely report on attach rate. But I think as we have done in the past, it's something that will -- we'll periodically update the market on the points that we think is appropriate.

It's Georgina from JPMorgan. Just 3 quick ones, please. The first one, just around the double-digit revenue growth guidance for midterm. Should we be thinking about you reaching that next year? Or is it more like a midterm target that you'd expect to build to. And second one, just in terms of marketing, I know that you don't sort of share that as a consistent metric. But just given that we're sort of here today, is there anything that you can share in terms of maybe how that's grown as a proportion of sales or anything over the period versus pre-pandemic? And then finally, just all of the initiatives that you've talked about, about supporting growth. I thank you, it's all been sort of super clear, but just to understand, like we can see that now starting, I think, to come through in the Moonpig brand, but it seems like Greetz has struggled a bit more to kind of benefit from those initiatives. And it would just be good to understand a bit why Greetz is sort of struggling a bit, I suppose.

Sure. So Andy, do you want to take the first? Kristof, you can take the [indiscernible] last.

Yes, sure. I mean, the double-digit growth is a medium-term target rather than something that we're saying that we will deliver on this year or next year. I mean, clearly, you can see in the trajectory of the businesses and the updates on current performance that we've provided our most recent set of results that each of our businesses are in different stages. I think the Moonpig brand is clearly at that level and is effectively your sort of proof of concept that this is a business model that is capable of delivering double-digit growth. Greetz is perhaps 18 months behind. Nickyl I think, is going to talk a little bit more about that in a second. But clearly, there's an improving trajectory in terms of the group's business and moving in the right direction. And then obviously, at experiences, given, as we've talked about the fact that the gifting market is going backwards by 14%, whilst we're outperforming that, it's a tough headwind and it's in a slightly different place.

Yes. I mean we operate with a kind of 12-month payback in terms of kind of marketing budgets. So when I have my yearly sessions with Nickyl about how much budget I can spend, he asked me how much I could do to give them a 12-month payback, and that's basically where we settle. So obviously, it's the better I do my job and the better I get customers back, potentially, the more I can spend.

Yes, exactly. And I mean just historically, that marketing spend hasn't been wildly different. We -- when it was easier to get customers during COVID, we did spend more. But I think on average, I think we worked about payback model, and I think we don't see huge volatility going forward. I think on Greetz, the real story in Greetz is it's not that it's kind of -- it's worse, we think of it as behind. And so actually, the real power of the platform meant that, firstly, we had the platform at Moonpig during the pandemic, which is why actually Moonpig was able to hold on to so much of the uplift we saw during the extraordinary period, whereas Greetz didn't. The platform came about 18 months later on Greetz, and it takes time really to work. And I think a huge part of the growth that we see is not just the features you see in experiments, but it's actually the data starting to kick in the collection of those reminders, the personalization. And actually, all of those -- all of the algorithms basically are seeded with fresh data kind of when you replatform and Greetz being smaller, it has much less data each day. So it just takes longer to ramp up. And so we've seen that trajectory improve. We've seen it go from sort of minus 20% headwind to sort of pretty much flat now. And so actually, I think we're hoping that actually in the not-too-distant future, you'll really start to see Greetz mimic Moonpig. The economy, the consumer in the Netherlands, from all we can understand is in a slightly worse position than the U.K., so that's not helping. But really, the story here is just one of timing. And actually, we'd expect to see that follow through. Any more questions?

So first and actually just kind of following on from Georgina's question, so clear in terms of the pillars to getting towards that double-digit growth and not expecting to give different guidance for different businesses. But I just wonder, U.K. versus Netherlands is one of those buckets more of a kind of focus in each, like should we think about U.K. being more of a customer and groups being more of a frequency or something like that. And then yes, sorry, I forgot my second one. So go with that first, and come back to me.

Yes. I think the answer is no. I think we kind of see both -- they're very similar markets, similar customers and we've got almost close to identical platform just at different stages. And so we'd actually expect the mechanics and the sort of the structural growth that we deliver through the platform to follow a similar combination.

Great. And the other one was on those kind of that 2%, 3% active customer growth. Just wondering if there's anything you can share in terms of sort of where you're looking at? Is there a demographic or kind of type of customer or channel you're reaching for like where you're looking to kind of acquire those customers?

Do you want to talk about our acquisition strategy?

I mean, as you've seen from the data we shared today we have a really broad base of customers. We're proudly for everyone. So there isn't like one demographic -- we're not relying on one demographic nor is there one that we're targeting. So I think it's a general behavior we're moving across multiple demographics. And again, you can see from the data we're seeing potential growth in every single one of those age groups. So I think it's about moving that -- taking those barriers down, moving people online and increasing their frequency as well as new customer acquisition.

So we're always trying new channels, and I think that's something that's really important. But I think what sort of new is we're also trying new messages now. And so previously, we were always repeating the same message. We're convenient or we're personal, download the app. And I think now you're starting to see innovation come through. It gives us an opportunity to talk to different customers in different ways. So there is an audience out there that may really be interested in our handwriting feature. There is an audience out there that may really be interested in our stickers feature or our photo feature. And I think that's where we're starting to be able to cut through to different audiences, but it's all through the sort of the marketing machine that Kristof runs.

But I think also we can -- back to Nickyl's point, we can use -- there's many more channels we have in play now. So we can use those channels to best effect. So if we need to talk about handwriting, we may want to demonstrate that on YouTube, for example, versus mass reach like TV, where we just mentioned it. So we use those channels to the best effect.

Any other questions in the room?

Just on Moonpig at work, which was quite exciting what you talked about there. Have you done any work on scoping out the scale of the opportunity there?

I mean, we've got some high-level numbers. I think as you look at it in multiple different ways. You can look at just how many small medium businesses are there are sort of the [ 50 to 1,000 ] employees, and there a couple of million in the U.K., they are a much bigger number globally. Again, this is unlike sort of birthday cards, if you're kind of looking at client appreciation and employee appreciation, that's a global market. So I think the size of the market is absolutely enormous in a corporate gifting, probably within your own companies is a big market on its own. So I think the -- we know the market is -- I think the specific numbers are kind of not something we spend a huge amount of time because we know it's big. But for us, really, it's about can we improve that product market fit. Can we show that actually we can get. We can find a customer profitably, and we know there are a lot of customers out there if we can make that happen. Andy's got on one more -- I think we've got a few -- if you got any from me -- the online audience.

Okay. So a question from Will Tamworth from Artemis. With regards to gifting, to what extent are there operational challenges? So for example, a gift deriving separately to the card or a gift arriving after the target date?

Yes. Thanks, Will. David, do you want to talk to that kind of how we're looking to manage those operational challenges?

Yes. I mean the point around cards arriving at different times to gifts, we have a pretty simple principle, which is the card is always delivered with the gift. So when you attach, we always make sure that the 2 go in the same box. So there are those sort of different operational channels of customers expecting a card at any one point when they attach a gift. And we continue to sort of evolve our packaging and our recipient experience to get around that. So when I -- when we take flowers, for example, we are evolving even the packaging that goes in delivery so we can make sure that when Georgie talked about add-ons, when we add of [ VARs ] or whatever it may be, we're also making sure that it all goes in one delivery. So everything we do is about focusing to make sure that the customer gets the card and gift together as a fantastic present when they receive it.

Yes. I think there is one exception, which is when you put 2 gifts in a -- when you order 2 gifts, but such a tiny fraction of our customers actually do that unless it's through bundling or add-ons that we haven't kind of put the resource on to solve that. And I think the other question was on how we manage delivery, I think that's really about better communication with the customer. So we're constantly trying to make sure we're helping the customer understand when it will arrive. And we're no longer -- we're not in a world where we are promising that a first-class stamp will guarantee delivery tomorrow because it doesn't anymore. I don't -- we kind of don't see that changing anytime soon. So I think really, it's about encouraging customers to order earlier, being really clear on what different postal options will give you. And I think something that is really interesting is actually we're looking at can we offer a sort of a Moonpig track service that actually allows you to send a card next day guaranteed. And that's something we're exploring with Royal Mail, but something that will be potentially exclusive to us, but could be a really interesting option for a premium, but something that can give the customer the clarity they want.

Okay. Next question from Benji Dawes from Premier Miton. How do you think about pricing in the long term, principally for cards, but also for the key gifting channels? And how might your approach be adapted if a credible competitor was able to offer similarly efficient online experience at a material discount?

Yes. So I'll let David take the pricing question. And yes, and then maybe, Georgie can take the second question because, really, I think the price is not the competitive factor here, it's data. And so I'll let Georgie kind of touch on that.

Yes, sure. I mean when we think about pricing primarily in cards, I think Nickyl mentioned it earlier, we have done an enormous amount of price testing over a sustained period now. And what we see every time is that it has no material -- literally 0 effect on any conversion rate that we see in customers, both up and down. So -- and we've -- that's after numerous amounts of A/B testing on different standard card pricing. What we do look on pricing is promotional activity. And the way in which we use that is very much around the data which Georgie will talk to, but making sure we use price to drive long-term good behaviors. Whether that is via the app, whether that is through use of reminders, et cetera. So we combat any -- we look at pricing not from a standard flat price on retail, but more about how we can encourage people to do long-term behaviors that are good. And we use promotions tactically in that way. And of course, algorithms are a big part of how we use that and understand customers as well.

Yes. So I mean, look, we have hundreds of millions of data points a year that we collect. And unlike a lot of online verticals, we're not only taking data points that are demographics or what you're buying, but we're also having the reminders, we know who you're buying for, we know why you're buying for them. We know where they live. We know what you bought them last year. And all of that information is feeding into our algorithms on a daily basis. So they keep getting better and better. And as the market leader, we have so many more data points than anyone else. It just continually contributes to our competitive advantage. So it would be very, very difficult for a competitor just to lower the price and compete with us because we just have so much more data than anyone else in the market, and we just know our customers so much better, that the offer that we can give and the personalized experience is just at completely different level.

Yes. And I think there's a few proof points here. I think one is that the largest card brand called card business in -- offline business in the U.K. has an online offering that is a disruptive pricing compared to ours and isn't able to get traction. And I think that's a proof point that really it's the data moat that we've created, which is driving it. And then I think to answer the pricing question probably directly, like if you think about the guidance we have double-digit growth and the AOV within that, that does not rely on card price increases. That's -- I think that's something that is one of many factors that some of this happens. We know postage prices can change, delivery prices can change. But we don't kind of -- we don't have a reliance on higher card prices to hit that double-digit growth.

There's a question here from Neil Shah from the London Stock Exchange Group. So what's the environmental footprint of a printed card in comparison to an electronic card? And do you see electronic cards making a comeback?

I never knew they were a thing. So no, we don't, as the answer on any cards. I think we see no evidence whatsoever that certainly in the U.K. and the Netherlands, there is demand or appeal for electronic cards. If it's created, it will be us creating it because we're able to make the card so special and put the gift inside the card. And actually, we know that in the U.S., that does have more traction. But we haven't seen any real evidence of that. In terms of the environmental footprint, and Andy, you want to talk on that?

I mean, obviously, to the extent that a physical card is being delivered, then there is a greater carbon footprint within -- and that's Scope 3 within the value chain as opposed within our organization. What I would say is that in common with most listed businesses, we've got very clear net 0 commitments and a strong operational focus on making sure that we engage with our suppliers to reduce not just our internal carbon footprint, but also our Scope 3 emissions over time.

Are there any more questions in the room? Otherwise, we will wrap up. Amazing. Well, thank you, everyone. Thank you, everyone, for coming and for staying with us for the last 3 hours. Hopefully, you've heard just how excited we are about the future of Moonpig and we're proud of what we built, and we're excited for what the group can deliver in the future. As many of you as possible, if you'd like to join us, and we're heading downstairs the happen stance for some informal drinks. So it'd be great to see you there. Thanks very much.