YouGov plc

Good morning, everybody, and thank you for being here joining us today on a day that we announced the biggest revenue number for the half year that we've ever announced and the biggest adjusted profit number of 30 million that we've ever had at the half year. Of course, we've been disappointed at the flat growth over the years, but our ambition is totally undimmed. We've got everything in place to get back to historical levels and I'm excited to be here to do that. We've had a resilient performance across the divisions as we've implemented a difficult cost optimization plan. The CPS performance has been in line with expectations growing and we are investing further in initiatives that we'll describe in a moment. We're achieving a 20 million savings plan with 70% of it realized in this year. We've, of course, changed CEOs. I've been appointed on an interim basis to bring the company back to its strategy, a full focus on the SP3 vision that we laid out at CMD in 2023, which perhaps we drifted away from a bit. And we're going to get back on that with full ambition, as I say, to be a platform company and to resume growth at historical levels. The key highlights, those are the key highlights. The revenue remains stable and margin profile is recovering. So, you know, we were at higher levels once upon a time at 21%. We went as low as 11% in the second half of last year. And I'm pleased that right now we're at 16%. And as I say, continuing our growth, I hope, to higher and historical levels of margin. On the operational side, it's all about data products, research, and CPS. Those are the three areas for us. We have, of course, been improving our data products over the last few months, especially with UX, UI, and improvements there rolling out, also including some AI enhancements with the ability now from YAML and other bits of AI that we're bringing in to really add new levels of of insight and new levels of data to our products. On the research side, we've had good momentum in UK custom trackers, especially with good new clients and growth in that area. And I just want to highlight, we continue our record of very high accuracy, probably doing more elections with higher accuracy than anybody ever. It really has been a very, very good performance. In 2025 German elections, we were well ahead of the pack, getting it pretty much spot on. And that's because of the methodology that underlies everything that we do. And then on CPS, that has been an area that we are looking for expanding the company, of course, with behavioral data. We've expanded panels in the Nordics, and we are working and investing in new types of data, new types of data collection with passive data and so forth. And that is something we're expanding across Europe and, of course, hoping to take much further than that in the future. On the current trading and outlook, we are meeting market expectations. We are, of course, maintaining capital allocation discipline. We are investing in technology and panel as before because we are a highly cash generative business. The key thing is the ambition is back to go back to historical levels of growth. That is what we're all about now. Let's have a look at the finance numbers, the detail from Alex.

Thank you, Stephen. Just going into a bit of detail on the numbers. Stable performance amidst organizational changes. I think it's also worth pointing out the macro conditions we are in the countries we're in. Fairly uncertain, but we continue to perform well in most of the markets. A key focus for the half has been on data products, getting our renewal rates back up to historic levels, really focusing on new sales. And so we've seen a change in an inflection point in the growth rate where we were declining in half two last year. We've got moderate growth this year of 1%. 2% growth in our research business, mostly driven by technology and the academic sector, particularly the US election. But we continue to see some headwinds in certain sectors, particularly government in the UK and esports and gaming. CPS performing well on an underlying basis, like-for-like basis. It's grown 5% for the year, for the half, sorry, and continues to grow. trade in line with expectations. You'll see we've had some margin compression. Most of that is driven by we are capitalizing less in this half than the prior year. But we also have, because of the cost reduction program, we did have higher staff costs coming into the half, which obviously, well, I'll pick up in a second. But also we're seeing a continuation of purchasing data through third-party panels, which is impacting our gross margin. America continues to be our focus. Europe now is our largest segment after the CPS acquisition, but we continue to see good growth in the US and expansion in particularly the, I've already pointed out, the technology and academic clients. Our EMEA segment As we pointed out at the full year, some difficult and challenging trading in Switzerland and the Nordics, which is dragging our growth and hope to see that normalize in the second half. The UK has been relatively flat for the most part, driven by the cost optimization program that we put in place at the beginning of the year. The half, we're pleased to see we're beginning to build momentum coming out of Q2, particularly with some new client wins from the team. AsiaPAC coming off a smaller base, but good growth, 7% for the half, new client wins and focusing on tracking studies helping us with that growth rate. These charts are, this is a breakdown of our sectors. This excludes CPS because they're so dominant within FMCG and retail. For the most part, we're seeing growth in sectors where we have seen historically good growth technology banking, and particularly the academic sectors. And I just want to repeat again, we have seen some structural challenges with the esports and gaming, which historically have been big sectors for us, dragging back some of our overall growth. In August 2024, we announced a cost optimization plan that was covering right-sizing teams, focusing on panel spend, reducing our third-party suppliers and costs, and scaling back on products and real estate. The cost optimization plan has gone to plan. We will be realizing 70% of the stated 20% goal, sorry, 20 million goal in FY25 and continue to control costs as we go into the second half of this year. That said, we continue to focus on investing in the group, particularly in areas of technology and panel. As Stefan pointed out, we've got some new areas in AI and machine learning that we're Rolling out in the second half. And another key thing that we're also focusing on is expanding the CPS panels. We've expanded into Scandinavian companies and Switzerland in the period, but also looking to expand the CPS data collection. Are we strong cash generated from operating operations? You'll see our cash conversion ratio has come down. That's completely driven by CPS, which has a fairly lumpy cash profile. I just want to make the point, we're still operating under transfer service agreements with GFK, the parent company. Once we have full control of the support functions, we hope to see that normalize. The cash conversion in CPS does normalize at the end of our Q3. And so we expect to see that number at the full year looking more like historical levels. I want to make this point again. We spent, in terms of where we have spent money on capital expenditure, we have invested in panels and particularly in the European and American markets. But I do want to make that point again. We've got significantly less capitalization of our technology development spend in this half. That's internally generated. So that's essentially spend that has gone from the balance sheet to the income statement. And just to note on the debt, as part of the CPS acquisition, we took 240 million euro loan. We made the first principal payment of 36 million in the period and continue to be comfortable with our covenants with a leverage ratio of two times and an interest cover ratio of 5.6 times.

Thank you very much. This next slide, you probably won't remember, but it was the key slide from Capital Markets Day in 2023, and it's where we set out what is the engine of our connected data strategy and our platform strategy, I can say too, where Everything is a virtuous circle. We have a strong public brand that allows us to get a great panel, which stays with us over a long period of time and builds up layers and layers of data that creates a platform of connected data, which new clients can use in all sorts of It produces fantastic connected data products, and it also is the basis for add-on research by custom teams and adding richness to what other people can't do, what we do there and what we offer there. And that is the platform and the driver of a high growth company. And that is something that we did kind of move away from in the last year or two, where we really lost the focus of driving the platform. And everything is about getting back to that historic growth pattern based on this engine and doing that with absolute clarity. You will have seen this other slide back in the day. That is the platform architecture. It really is an engine on the left-hand side, the panel, the cube, which is the connected data lake, and then Crunch. and other analytics coming along to enhance that. And that is the engine of the system. Then you have the interfaces and technical systems which allow for the utilization of that engine. And that is, of course, includes our centers of excellence, which is our efficient, data processing and then analytics centers in various parts of the world and then our expert research teams that get the most value out of all of this data this is an architecture this is a system that can be used should be used for all research by all people interested in high quality marketing data and that is the world we live in now that is the world of ai where ai is is not going to replace panels. Some people once thought some magic will happen. You don't need human beings anymore. You absolutely have to have human beings as the basis for everything. And this is the best way to get that value suitable and right with AI. So that systematic platform research puts us in a great position to establish YouGov as the universal platform for trusted data sharing. YouGov is where people can come and not only answer surveys, but share their data, their passive data, if you like, whether that's shopping data or banking data or viewing data. This is the platform for it. It's highly efficient. It's trusted by the public because they see the data, they see it being used in the world. And these highly engaged panels are fantastically efficient at generating high quality data. That thing that they demonstrate, that they generate, are our cube products. So brand index and profiles, and of course, everything that you build on top of that. Brand index and profiles are automated delivery systems, very efficient, and as I say, ideally suited for supporting AI solutions in the revolution that we're involved in at the moment. Also, the third area, advanced client services. It helps customers as much as it helps products because the UI and UX enhancements will allow people to use that data to build other kinds of research, other kinds of projects on top of that. And of course, all of it backed by operational excellence. We have to be efficient. We have to have workflows that support client workflows effectively. And that increased efficiency is something that we are going to be continuing to improve by bringing AI into those systems, into bringing automation along to the whole thing as much as possible, a tech-driven platform. which means that the near-term priorities are, as you would expect, you've heard this so many times from me, public data and panel are the absolute key. That is the engine. That's our unique position in the market. We're the only consumer-facing market research company, and that changes the way we do things and the power we have. to innovate. It allows us to create cube-powered products that nobody else can do. The technology infrastructure is very much there for the use of AI as well with uh apis um that give you correct uh correct connection to that data lake um with exploring um not only the traditional sort of survey research stuff but also the passive behavior so the passive behavioral data that we're adding along The third area, advanced client services, all of this leveraging AI to create not only these products, but also terrific trackers and other forms of customer search for our big global clients, and all of that enabled by the operational excellence of Cenex. To summarize, we've had a resilient performance in difficult times and we're seeing some good progress now with improving our products with UX and UI and artificial intelligence and machine learning coming in to make that more sophisticated. We are on track to achieve cost savings of 20 million, of which the majority, 70%, will be realized in FY 2024. And the strategic priorities are to accelerate the execution of the SP3 vision. If there is any... added value that we've had from the difficulties that we've faced because we are going back to our strategy that we presented in SP3 in Capital Markets 23. We come at it now having lost a year or so perhaps in some of our development, but with a better understanding of how we do this properly and how we utilize AI to bring the full strength and the full advantages of the system we've built. So we are very ambitious, exactly as we were before. Questions? Hannah, you have some questions for us.