S4 Capital plc

So good morning, everybody. I'm in Madrid, where it's spread all to the four winds. Radhika is in London, and Scott, I think, is in Singapore. So welcome to our Q1 update. Radhika is going to take us through the training update, and then Scott's going to take us through a brief client analysis, and then I'll come back just to do a brief summary and outlook, and then we'll take questions. So Radhika, over to you.

Thank you, Martin. Good morning. I will start with the financial headlines for the first quarter of 2026. Performance in the period has been impacted by the volatile global macroeconomic conditions and ongoing client caution. Despite these pressures, the annualised impact of the 2025 cost-out actions and the continued strong focus on working capital management has resulted in the Q1 operational EBITDA meeting expectations. Revenue was £164.8 million, down 7.5% reported, and 3.7% like-for-like. Net revenue was £149.2 million, down 8.9% reported and 5% like-for-like. Quarter end net debt was £111.8 million, reduced €33 million from €144.8 million at 31st March 2025 and €45.6 million like for like. Leverage has improved to 1.4 times pro forma 12-month operational EBITDA compared to this time last year at 1.7 times. The company repurchased its term loan B at a discount with a total of €85.2 million repurchased to date. The outstanding loan now stands at €289.9 million, with a target reduction to €250 million. Our full-year guidance is reiterated. We expect like-for-like net revenue to be in line with current analyst consensus, slightly below 2025. We target full-year operational EBITDA to increase by at least 100 basis points. We target year-end net debt to be in the range of 60 to 90 million. The Board will approve an interim dividend of 1.1p and recommend a final dividend of 1.1p, subject to share owner approval if performance and liquidity targets are met. Moving on to net revenue by practice and geography, where all my comments are on a like-for-like basis. Both our practices have been impacted by the ongoing client caution due to the Middle East conflict and lower activity from some of our larger technology clients. Marketing services, our largest practice, delivered net revenue for the quarter of £136.2 million, down 4.5%. Technology services generated 13 million, down 10.3%. From a regional perspective, the Americas were above first quarter expectations, representing circa 80% of net revenue, down 0.5%. EMEA declined 27.8%, predominantly due to scope reductions on BMW and the Middle East conflict. Asia-Pacific declined 4.5%. Our capital allocation priorities are maintained from the year end. We have established clear capital allocation priorities focused on delivering shareholder value through dividends. Dividends first, targeted debt repurchase second, and share buybacks third. The board will implement a 50% dividend payout policy out of adjusted basic earnings per share over the medium term, subject to financial targets being met. With that, I will hand over to Scott for the client update.

Thank you, Radhika. And good morning, everyone. Thanks for joining the call this morning. We continue to have a very compelling client list with some of the world's leading and most innovative companies. Eight of them are what we call whoppers. That's clients that delivered revenues of 20 million plus last year. And that's a differentiator for a company of our scale. Most of our direct competitors have a much more fragmented client list with smaller relationships. As you can see, we continue to be skewed towards the tech industry. And despite the ever-increasing amounts they're committing to capex spending and AI spending, we are starting to see budgets stabilize in this sector. We continue to see significant opportunities for new business, particularly driven by our own AI tools and capacity. This is particularly so in the automotive sector, where we've recently won assignments from major manufacturers in Japan, South Korea, China and India. And as the category establishes itself as an early adopter of AI at scale in reaction to the existential pressure from Chinese EVs and AVs. We see similar opportunities in financial services, where we've seen an uptick in pipeline and wins as financial institutions move beyond pilots and concerns around AI governance to full-scale adoption, again reflecting an existential threat, this time from new fintech platforms. In FMCG, we continue to build on the traction of winning real-time brand and orchestration partner engagements with two leading US-based global clients at the end of 2025. One of these client relationships has since expanded internationally, and we're engaged in several scaled pitches in this category at the moment. These are strong relationships that help us attract and retain talent to work on them. Declining spends overall have had a negative effect on the average revenue size of our top 10, 20 and 50 clients. But this is primarily driven by reductions in spend and scope rather than lost business. And again, it is starting to stabilize. And with that, I'll hand you over to Martin for the summary.