Transforming Saga – Experience is Everything

In 2021 Saga will celebrate its 70th anniversary. The strategic turnaround plan outlined by the new management team in September 2020, will build on Saga's heritage while responding fully to the challenges faced by the business today.

At our core, we will remain the same - a unique British business focused on providing exceptional, differentiated products and services to our distinct customer group. At the same time, we will refresh our brand, invest in data and digital to improve the customer experience, optimise the Insurance business, build greater capability and resilience in the Cruise business and reset our Tours offer.

Our new strategy will focus on the following five pillars.

1. People and culture reset

The transformation required in people, leadership and culture will underpin the success of the strategic reset, so this is our first priority. The new management team have already acted decisively, resizing and reshaping the business in 2020, and created a culture of accountability by reducing management layers from 17 to 5.

We have launched a new purpose, values and engagement programme, as we connect the customer brand revitalisation with the colleague brand to secure a strong foundation for growth in revenue and profit across the business.

2. Data, digital and brand transformation

The management team are implementing a single group-wide customer digital data platform. This builds on and optimises the investments made in the last five years and will give us a single view of the customer across our businesses. We are efficiently repurposing existing technology and developing big data solutions over the next two years. From this, we are creating an automated personalisation model that provides prompts to make the best offer to each customer at every opportunity, allowing real-time customer interaction and synchronisation across channels and businesses to drive customer multi-product holdings, loyalty and value.

3. Optimising our businesses

The management team are focused on making the core Saga businesses the best they can be for customers and colleagues. We are clearly focused on this core and will not create distraction by investing in other businesses until we have delivered real improvements. This discipline will be important to drive maximum value creation and efficiency across the Group in the interests of shareholders.

4. Driving simplicity and efficiency

During 2020 and before COVID-19, the management team was focused on delivering the optimum cost base for Saga. Having inherited a high cost, complex business, we have worked hard to reduce cost and complexity and have focused Saga to great effect already. This focus on cost efficiency will remain a central element for the business in the years ahead.

5. Reducing our debt

The new management team acted quickly with decisive measures to strengthen the balance sheet and reduce debt. Focused in particular on the covenanted short-term debt, we generated £150m through the capital raise, reduced operating costs, disposed of non-core assets and suspended the dividend. These measures will significantly strengthen the Saga balance sheet and provide a strong foundation for future success and growth.

A key financial objective for the Group is to reduce total debt leverage to under 3.5x EBITDA. While the pace of recovery from COVID-19 will significantly influence the speed of debt reduction, the Group’s modelling suggests that this should be achieved by the end of 2023 even in stress test scenarios. Given this priority the Group is not expecting to pay dividends in the next few years, but the Board will reassess its dividend policy once the leverage goal has been achieved.