YouGov plc

Good morning, this is YouGov bringing you our half year results for the 2023 year and my name is Stefan Shakespeare, I'm the CEO and I would like to say this is the last time that I will be bringing you results as CEO and I'm very happy to say they are results that make me proud. our revenue for the half year is 131.4 million that is 30% up from the same last year the adjusted profit is 22.1 million that is 58% up on an underlying basis and the margin is up to 16.8% with adjusted EPS 19.2 81% up so these are terrific numbers to to report to you this morning. We have shown really top line growth of very strong proportions. This, I think, is very good evidence of the strength of our products and services and indeed our strategy, very in line with my trends and it's, I think, Worth saying that no matter what is thrown at us, whether it's COVID or uncertain markets, all sorts of concerns about all sorts of things happening in the world, the YouGov data streams are exactly what people want and it's very fit for market. So we are seeing good growth. Our sales pipeline is healthy. We haven't seen any material changes in the first half year from our clients in market conditions, although we have to say, of course, that some changes in Silicon Valley, which you'll all be aware of, may lead to some change. We can't predict that one way or the other at the moment. We haven't seen enough. We've had significant margin expansion. This is because of the operational leverage that's coming through. Over the years, we've invested significantly in panel, in analytics, in dashboards. We've templated a lot of solutions, which means customer search, big customer search is becoming more and more profitable. The margins are up and it is a bigger part of our business. And so all of these things are coming through from the investments that we've made. And there's a lot more to come on that. As you know, soon we'll be having a capital markets day and we'll say a lot more about that. We're keeping this presentation fairly simple so we're not going to say much more about what's coming from our investments but we have been investing throughout this period robust balance sheet and strong cash position maintained throughout and we are continuing to invest as I say in survey systems in panel build out to more regions and in further migration to Cenex you'll hear more about that from the CLO in a bit the board succession plan is going forward on time we have a good process and everything is set to deliver as expected and we have two new non-executive directors appointed who came to the last board meeting for the first time and it's a really strong strong board so just one more slide to look at before I hand over this is really a lovely slide this is where we started when we first started having five-year plans and four-year plans back in 2014 we had five percent margin we're up to 16 percent margin now we were 67 million in revenue and we're heading towards well 260 I guess is the is what you've been guiding to really very strong performance and it just keeps going and we expect it to keep going so it's a with great pride I show you that slide and now I hand over for more detail to the CFO Alex McIntosh thank you

I just want to expand first on on the revenue and seven pointed out a very strong performance in the year. we're going from 101.2 million in half 122 into 131.4 million in this this half of our financial year on a reported basis that 30% that we have had some effects. tailwinds contributing 11% of the revenue, 6% of revenue is coming from acquisitions, and then the rest is obviously coming from organic operations. I particularly want to point out the UK and the US continue to be strong drivers of revenue growth. When you get to operating profit, you'll see the same from that perspective. I just want to make a point. These are fantastic numbers in the context of the macro environment we happen to find ourselves in. Lots of questions come on how resilient we are to economic recessionary fears, particularly in the UK. And I think, as you can see here, we're more than resilient. We show that we can grow no matter what trading environment we find ourselves in. We've had a little bit of a slowdown in mainland Europe, partially due to lower data services revenue in that geography, and you'll see that when we get to the segmental note. As we go into the second half, really good visibility on the second half in terms of our sales momentum. That's by design. You've heard us talk about data products and custom trackers as a The economics of those offers give us high levels of visibility because clients are committed on long-term contracts. That's giving us a good base going into the second half to continue our growth trajectory. We continue to be well diversified across a number of sectors. We've seen growth in the half in our technology offer. Our West Coast Silicon Valley clients have continued to maintain spend or in some clients have expanded. I think it would be prudent to just put a cautionary word just to say, we're watching how this pans out over the second half. We have a high level of confidence. We will continue supporting those clients. but we still, last week Facebook announced cuts. We have a watch and brief on that. So I just want to make that point as some of you may have expected in the half that to drop. We maintain our agency revenue broadly in line with prior year. Another area where some of you may have thought we may be at risk with ad spend and ad budgets being cut. I just want to make the point within agencies, quite a lot of our revenue comes from subscription products. Those subscriptions are well embedded into daily workflow on the agency side. And what we've seen as we've gone through our renewal season is clients who have subscribed to data products have continued to use and continue to renew at very high levels. Great success in sports, esports and gaming. We have a product fit that suits that market and that sector very well. It's a very pleased to see continued expansion now becoming an increasingly significant contributor to the group performance. We've had a slight decline in banking in the FMG sector, in part that's clients slowing down decision-making a little bit. We're still seeing opportunities, but we're seeing them holding rather than growing at the same pace as the other sectors. And just a small point, we have a bit more contribution coming from the government sector due to our acquisition of Link last year, where they do quite a number of projects for various Swiss government departments. I just want to make a reference to the bars at the top right. You'll see the US and the UK are by far the biggest contributors to profit in the group. We continue to have a heavy focus on the US as the biggest market that we operate in. So we're extremely pleased to be delivering good growth plus good profitability within the region. We've seen an expansion of our operating margin from 14% to 17%. What that translates to is the group operating profit going from 14 to 22.1 in the half. I just want to make a small point to the segmental note. You'll see data products increasing and central costs increasing. As we are shifting towards more of a platform business, we're beginning to take resources that purely were dedicated to data products. They're now supporting the wider group as we prepare for our new segmental analysis, new segmental presentation, which we'll come up with in the second half. You'll hear much more about that at the capital markets table. We'll be talking about what the group looks like moving forward after this financial year. uh data products um despite some movement of costs we have seen increase in margins due to the operational leverage um data plus uh um automation that means we can capture a lot of drop through and profits when we do sell data products you'll also see an improvement in margin in custom and that really speaks to focusing on repeatable work the tracking work that we talk about allows us to capture a lot of efficiencies because we're using a lot of sample and we're using our technology either through automating the survey process or on the analytics side we're taking a lot of the heavy lifting that we used to have to do at our analytics platform crunch now allows us to do things much more efficiently Just a small point on cash. We have no exposure to Silicon Valley Bank or small regional banks. We are very conservative when it comes to cash deposits. In the year, we've had a slight decline in our cash generation percentage. In part, that's because in the half last year, we were about to do the link acquisition, and so we were aggressively pooling cash to reduce how much we would need to borrow in order to do that. I just want to make the point, we did have an RCF last year, which we have paid down since then, which is a good testament to the model. Our economic model produces good cash generation. We continue to invest. You'll see that we have spent £4.8 million on the panel that supports our existing operations. We've also spent 4.4 million on technology, in part continuing on what we were working on, but also as we move into a platform proposition, we're starting to put in place the pieces already. very similar to our last five-year plan, we started investing for the next plan whilst we were still in the current plan. Just a small point on financing cash flows, we spent £7.7 million on the dividend in the period, and we also spent £5.6 million on Treasury shares. We are anticipating Well, we are pooling shares to satisfy any LTIP payouts that we will make in the later half of this year. And the reason why we're doing that is to reduce the impact of dilution by having treasury shares to satisfy any option exercises that staff make. And with that, I will hand over to Salim Shahan.

Thank you, Alex. So I am the CEO and I'll take you through the operational updates across our three main divisions. So starting with data products. So those of you that followed us for a while will understand that this division houses our syndicated products, particularly brand index and of course profiles. very pleased to report it was a strong period and we saw underlying growth in the period of nine percent uh which was uh 20 as a headline figure uh just to uh reassure you this is also coming off a very strong hy 22 where we saw in the comparable period a growth of 32 percent We and the teams were driven very hard to maintain those high renewal rates, particularly coming through our peak renewal season. And we were very pleased with the results that we saw. We saw double digit growth across all the geographies, with the exception of mainland Europe. And the US remains our largest market and grew by 10 percent in the period. we have seen that the strength of our custom connected offer has meant that sometimes the subscription is in fact parked in favour of the connected solutions, which have really resonated with our clients in this macro environment. We saw a limited contribution from price increases in the period, which is obviously due to some of the tighter trading environments that we find ourselves in. We did see a significant improvement in the margin to 42%, and this is through a drop-through from higher incremental sales and a lower central cost allocation due to that lower growth. On to data services, we did see that growth in the period was actually down. We saw a decline of 9%. Excuse me, Alex, can I just... This was particularly due to declines that we saw in mainland Europe, and this was of course due to the political instability that we saw in Europe. Sorry, I have a slight cough. We also saw reclassification of some of that custom work. And as you know, that custom and data services are very closely linked. And we saw reclassification of some of that work into the Custom Research Division. We saw flat performance in the US and single digit growth in the UK and APAC. Now we saw a decline in the divisional margin as the inability to absorb that decline in revenues was was due to our investment in the overall business. In custom research, we saw the demand for our custom research due to the increased global coverage continue to really drive our performance. Excuse me, I have a bit of a cough here. Give me a proper cough. Excuse me, excuse me. Demand for that was driven by increased global coverage and the need for high quality data. Underlying growth in the period was up by 28 percent. And it's very pleasing to see overall revenues were hitting 65 million, which is comparable to what we saw in FY21. And the growth in our custom research offer has really been driven by the growth in the US, particularly from the tech and the gaming sector. And we have seen our differentiated offer, particularly using analytical tools, continue to really drive momentum in that market. We saw some great wins in the UK and mainland Europe, and we also saw some great wins coming off the back of our US election work. Very pleasing, we saw our divisional margin increase to 22%. This was off the back of the migration of our work to the Cenex and a greater focus on pricing. Those of you that are followers, you'll know that we've tried very hard not to leave, to take projects that are very high margin and to price them accordingly. And you can see the improvements in the margin as a result of that.