GoCo Group plc Annual Report & Accounts 2019 We’re on a mission Annual Report & Accounts 2019 Significant growth opportunity £2bnoverspend every year on household bills and insurance in the UK households only occasionally 3 in 5 switch 15mhouseholds are still on default tariffs and likely overpaying for energy 72% likely to sign up to an auto-switching proposition 23mhouseholds didn’t switch energy supplier in the last 12 months: our incremental growth opportunity We are building momentum as we transform the Group £250value of the free car insurance excess cover with GoCompare underlying GoCompare car insurance +4% growth in Q4 £7.0mof AutoSave revenue in 2019 300,000 live AutoSave customers x4year on year increase in number of tech releases 2019: A year of transformation for GoCo Group. We are on a mission to help people everywhere find more of the right products, saving them more time and more money. This year we transformed into a multi-brand Group operating Price Comparison, AutoSave and Rewards businesses. We are investing in our people and are committed to creating a sustainable culture that fosters creativity and innovation. Overview Strategic Report Corporate Governance Financial Statements 2019 Highlights Investing for sustainable growth Revenue AutoSave live customers £152.4m 300,000 2019 £152.4m 2019 300,000 2018 £152.6m 2018 <1,000 APM APM Operating profit Adjusted operating profit • Disciplined financial performance £20.3m £26.5m across the Group • 300,000 live AutoSave customers 2019 £20.3m 2019 £26.5m by 31 December 2019 2018 £37.5m 2018 £44.0m • Acquisition of Look After My Bills in APM Denotes Alternative Performance Measure Use of alternative performance measures is detailed on page 13. July, helped drive customer growth • £7.0m full year AutoSave revenue and breakeven trading profit in H2 • Launch of GoCompare’s £250 excess proposition driving underlying car insurance revenue growth +4% in Q4 • GoCompare continued to improve marketing margin +0.6ppt • Group adjusted operating profit of £26.5m reflecting self-funded investment into AutoSave Contents Overview Corporate Governance Financial Statements 1 2019 Highlights 52 Chairman’s Corporate 94 Independent Auditor’s Report 3 At a Glance Governance Statement 98 Consolidated Statement 54 The Board of Comprehensive Income Strategic Report 57 Executive Team 99 Consolidated Statement 4 Chairman’s Statement 2019 58 Board Leadership and of Financial Position 6 Market Review Company Purpose 100 Consolidated Statement 10 Business Model 59 Division of Responsibilities of Changes in Equity 12 Strategy and 63 2019 Board Activities 101 Consolidated Statement of Cash Flows Key Performance Indicators 64 Nomination Committee Report 102 Notes to the Financial Statements 14 CEO’s Statement 2019 66 Audit and Risk Committee Report 129 Company Statement 16 Financial Review 70 Directors’ Remuneration Report of Financial Position 21 Operational Review 90 Directors’ Report 130 Company Statement 30 Opportunities, Risks and Uncertainties 93 Statement of Directors’ Responsibilities of Changes in Equity 32 Principal Risks and Uncertainties 131 Notes to the Company 36 Corporate Social Responsibility Financial Statements 40 Investing in Our People 135 Shareholder Information 48 Our Stakeholders 51 Non-Financial Information Statement 1 GoCo Group plc Annual Report & Accounts 2019 Our mission GoCo Group is on a mission to help MORE people find MORE of the right products, saving them MORE time and MORE money. AutoSave Price Comparison Rewards SaveStack™ Our flexible proprietary tech platform enables us to innovate at speed and reach customers, wherever they are. 2 Overview Strategic Report Corporate Governance Financial Statements At a Glance Addressing inertia Our vision To find new ways to free Britain from the boredom of sorting household bills, providing Savings as a Service, via our proprietary technology platform, SaveStack™. GoCo Group is a tech- People Platform Product led business operating multiple leading brands focused on innovation and disruption with the common mission to help consumers save time and money, sustainably. What we do — Here at GoCo, our staff are at — Through the development of — GoCompare, a leading UK — We use our leading brands to the heart of our business and SaveStack™, our proprietary financial services, utilities attract millions of consumers that’s why we make sure they technology platform, we have and home services to our propositions, we then are at the top of their game transformed into a data and comparison website inform and enable them to — The GoFurther Academy is tech-led business — weflip and Look After My save money, from household an initiative that will enable — This enables us to innovate at Bills, innovative switching essentials to retail and leisure the existing workforce and speed and reach consumers services using technology to — We support our partners prospective students to wherever they are, however automatically switch people by providing engaged, develop and progress in and whenever they want, onto better energy tariffs pre-qualified customers and their careers including through brands — MyVoucherCodes, connecting highly effective acquisitions outside of the Group consumers with money-saving — All of this is powered by offers from the world’s our proprietary flexible leading brands technology platform, SaveStack™, with data at its heart Why invest in GoCo Group — Our use of data supports both consumers, to make their Our aim is to transform the Group into a higher and more sustainable experience straightforward, and our partners with the margin business, achieved through: additional customer insight we can provide GoCompare growth Positive insurance Significant growth driven by extension market dynamics with potential for our 1 of £250 excess 2 growth of core car 3 AutoSave business by proposition to improve switching volume expanding the size of consumer preference the switching market AutoSave diversifies Deliver value through Adopting responsible Group revenue the development of our business practices 4 with an attractive 5 proprietary technology 6 and delivering business model platform SaveStack™ sustainable choices 3 GoCo Group plc Annual Report & Accounts 2019 Chairman’s Statement 2019 An evolving business, positioning for growth Dear Shareholders, GoCo Group has sought to innovate and drive ahead a new generation of services I’m pleased to present GoCo Group plc’s that help consumers make informed The Group’s transformational financial results for 2019, another important purchases in a world full of more choice. journey has gathered significant year in our transformative journey as we While the internet has made choices more momentum. 2019 represented a became GoCo Group, a name change transparent to consumers, to an extent it has that reflects the evolving structure of the also made making decisions more difficult year of disciplined performance business. Matthew and the leadership team by providing too much choice and data. in the core business, efficient have continued to progress and deliver the GoCo Group is focused on helping to marketing and continuing Group’s strategy, with the Group positioned address this complexity. This year we have well for growth, exiting 2019 having built innovated our core GoCompare business, improvements to conversion, significant momentum to take into 2020. developed our new internal brand weflip alongside the strategic and integrated Look After My Bills following Consumer demands and needs are changing its acquisition in July 2019. deployment of capital to grow fast against financial services and household our AutoSave segment. The expenditure categories; we need to both As we have expanded the Group, we management team is delivering respond to and anticipate these changes. have introduced ideas that go against We are conscious that our businesses have a industry norms because they aim to solve against an exciting strategy that responsibility to ensure the products and greater societal challenges. For instance, provides meaningful long-term services they provide are in their customers’ we have learnt from the success of Look benefits to customers, partners, best interests and we recognise that we have After My Bills how social media can be an a duty to adapt ourselves to an environment effective way to reach new consumers. This employees and shareholders. which has greater oversight and scrutiny has helped us target the remaining 15m from Government and regulators. households paying a Standard Variable Sir Peter Wood CBE Tariff on their energy bills, increasing Chairman Earlier this year the Executive Director of the efficiency of our communication Strategy and Competition at the FCA, with UK households and optimising delivered a compelling speech entitled customer experience across AutoSave. ‘Regulation in a changing world’, which commented on the move from an era of Taking a disruptive approach to the industry digitisation with services moving online, has required a careful balance of investment to a truly digital industry – one drawing between both the new and existing on artificial intelligence (AI) and machine businesses, which Matthew and the learning. This reflects the development of our leadership team have navigated with care. businesses and the way we are bringing new Notably, we have focused our 2019 capital products to consumers, both of which will allocation on investment in the core enable us to drive more value from our business, GoCompare, and in the AutoSave customer base.