YouGov plc

Good to see you. This is my second time of having a last presentation. I think this really will be the last one. So it has been a good year. We've strengthened pretty much on all fronts. We've got a 2% increase in our... Data products, which a while back people were thinking, well, that's all going to be taken over by AI. That'll be a theme for me today to say, actually, AI is a big benefit to us and a big opportunity. It isn't something that's been holding us back. And you can see that in a very difficult market. and it's difficult because apart from all the other anxieties there are particular anxieties around our industry because of AI and will we all be replaced. In that market we're growing and we're growing where we most want to be growing. We've been strong on controlling costs. You'll hear a lot more about the VDP from James, and there are some other interesting things that he will talk about. I will just focus. On my role, which has been, when I came in two years ago, or one and a half years ago, I said I was going to do three things in that interim period that I had specific objectives. One is to stabilize the business. I think you can see our numbers have done that, and I'll give you some more details about that in a moment. The second is to return to innovation, and the third, of course, is to prepare and deliver the leadership transition. And on the first of those, we've seen accelerating growth in our key areas with 3% up versus last year. In data products as well, we've done particularly well. We've got that cost discipline that I I referred to, and also we have made that switch back to focusing on data products from custom. It's not that custom isn't important. Custom has also become very much more a data product than it used to be. It's less about the customization and more about the richness and fullness of the data. So even our custom trackers are really very similar to data products. and we've had a unit that focuses on developing that data set as something that can be partnered with and a bit more about that later as well. Innovation, we have accelerated. We've enhanced the product. There is now an AI agent that can tell you about what's in the data and help you find more and that will be growing. I mean, everybody has that. Thank you very much. Those are our AI-powered solutions and the platform we've long talked about. Now it is becoming really a full-on data platform. Again, I'll show you later on at the end. and so on, where that's going. And the third priority was that leadership transition. And I said that we wouldn't make the same errors twice, that we were looking for somebody who has proven leadership in an adjacent area where we can see what they've delivered. In Wayne Leving's we found that, somebody who has led teams, grown P&Ls knows the industry inside out and also understands the challenges of AI. We have somebody that we know is going to do this job well. I also said that instead of just handing over, simply we would have a proper transition period in which The new person learns the ropes a bit and is not just expected to immediately fit right in because there's a lot. We're a complicated company. We're different to all other companies in our industry and it does need a proper transition. So I'm looking forward to that period. I have a very strong relationship with Wayne and I'm very confident that we're going to be Working well together, especially since I have a new role in the Post-January period, when I go back to being a non-executive director, but overseeing, running, chairing the Innovations Committee, which will be very active in helping to direct and guide the things happening that the executives are doing with the system. So handing over for the financial review to James.

Hello everyone and thank you Stephan. This is now my second results presentation since I've been at YouGov. You may recall my first one was at the half years after just five weeks of joining. And the last six months have definitely been fulfilling. We've made deep progress on the planning and execution of the value delivery plan. We've invested in areas that matter. We are growing up now, yet we are keeping the entrepreneurial discipline alongside all of the decisions we make. And alongside all of that as well, we are keeping innovative ideas flowing. And they're not just flowing, they're flowing and they're converting as well. And Stephan will talk about that in more detail later. So before we get into numbers, I wanted to highlight the key priorities of H2 from my perspective and the wider board's perspective as well. Priority, and there's seven of these priorities. Priority one, from a market and investor relations perspective, we want to do what we say we're going to do. I've been in the public markets for a long time, and I know how important that is for employees, for external analysts and investors. So we commit that that is what we're going to do. And this obviously included being within the guidance range that we announced in March, plus delivery on various other areas as well. Priority two, rebuild trust and improve transparency and clarity where possible. Throughout this presentation, I will refer to things that we committed to with the HRN results and either confirm the action is completed or update on how we're getting on in solving that problem. and going forward, there may be times where we decide an adjustment to previously communicated commitments is required. It's important that our trajectory may change and it's important that we're agile in a changing environment. If our direction does change, we commit to explain clearly what that change is and why that change has happened. Today, there are no such changes to commitments to disclose. We are bang on track for everything that we are committed to in recent times. Priority three, balance sheet stability. In March, we had a fast approaching maturity date for the debt facility. An extension was therefore critical. This has happened. Priority four, obtain approval for a share buyback programme and start the programme. I'm delighted to confirm that the buyback starts today. I believe it actually already has started. And over the next 12 months, up to a total amount of £15 million will be returned via this route. Priority five, evidence continued solid execution of the value delivery plan. Wave one was executed at pace before the H1 results. wave two and three are well underway planning is advanced and execution is happening priority six initiate the wide-ranging strategic review of our shopper division again that that is ongoing and priority seven provide clear guidance going forward no vagueness or confusion and in the release you'll see very clear guidance in pounds millions numbers with no no confusion vagueness or clandestine approach to what we think will happen And I'd like to feel that our results presentation released a few hours ago and our presentation we're giving today provides high conviction that we have achieved seven tier one priorities. And please do challenge me or Stephan either today or later if you feel we've not achieved those objectives. And I've circled four of these points, one, two, five, and seven. These priorities aren't just the last six months. These priorities will last indefinitely. that's understandable we're a youngish tech focused listed business so we don't have an option and we make sure that we will embrace that in a very growing up and clear way before I move on to the segmental operational results and with priorities one and two in mind i.e. do what we say we do and then transparency and clarity I wanted to cover off how we reconcile between adjusted and statutory group numbers We have rightly been criticised for lack of clarity in this area before, and I committed in the H1 results in March that the thresholds for items to be classified as separately identified will be higher, and also we'll be much more transparent on the make-up too. I feel that understanding the make-up of the separately identifiable items is as important as the total quantum itself. Hence our commitment to priority too, in particular around transparency and clarity. Due to our history of M&A and restructuring initiatives, we have required the use of separately identifiable items. So how have these reported items been built up in FY26? I split them into three buckets. Bucket one, I want to ensure that our balance sheet holding values for assets was thoroughly reviewed as part of my first year end at YouGov. A large chunk of this impairment balance is the write down in the balance sheet value of our DAC business. As a reminder, DAC includes our non-shopper German business, but it also includes the Swiss business including CATI Research. This is a business that runs our computer-assisted telephone interviews. The balance sheet valuation needed to be adjusted downwards, which we did through the numbers at the year end. The remainder of this category includes lease impairments, as we assess the simplicity and efficiency of our global office footprint as part of our value delivery plan. along with some impairment of our software assets which have been capitalised in recent years. Going forward, a continual firm view will always be applied on balance sheet holding values as our business evolves. Bucket two, amortisation. An accounting rules-led amount which is following on from our shopper acquisition. This relates to two items, order backlog and customer list. The order backlog was fully amortised prior to the start of this financial year, and the amount of 5 million from the prior year will not continue. That leaves 10 million this year, which covers the customer list amortisations. In FY27, we expect this aspect to continue with another 10 million amount for further amortisation of the customer lists. This customer list amortization is expected to continue for the foreseeable future at broadly the same amount of this year. However, the order backlog will not come back. So circa 10 million pounds is going to be the number that fills bucket two going forward in this category. Moving on to bucket three, this is the only cash item within this grouping and arguably the more relevant line item when it comes to assessing underlying value. Buckets one and two are non-cash. In high level terms, bucket three covers restructuring costs. These fell from $13 million last year to $5 million this year, as the threshold for inclusion increased and the vast majority of transitional services agreements for the shopper acquisition have now been completed. Therefore, the cash amount of SRIs is more than halved year on year, with a reduction of $7.7 million. Going forward in FY27 and beyond, bucket 3 will continue to be material as we deliver the value delivery plan. Bucket 2 will be £10 million as I discussed, and bucket 1 will be assessed throughout the year to ensure all balance sheet values are appropriate. The £33.1 million total explains the difference between adjusted and statutory measures on the face of the results announcement. The adjusted EPS at 30 pence is down 11%, which is broadly aligned with the reduction in adjusted operating profit. As a reminder, though, as you'll have seen from the numbers, H2 adjusted operating profit was marginally up year on year. So this EPS downfall related purely to performance in H1. Now, moving on to the segmental operational results. As Stephan alluded to, each of our three divisions delivered headline revenue growth. Yes, growth levels were low single-digit percentages. Although compared to the majority of our peer group, actual year-on-year growth in itself positions us towards the top of the pack. On an underlying basis, data products and research grew 3% and there was marginal shrinkage in shopper. FY26 is our 16th unbroken run of group revenue growth, an achievement that our teams around the world should be very proud of. We expect FY2027 to be our 17th year of unbroken revenue growth. We're particularly pleased with the margin uplift in data products, where operating leverage continues to kick in. I mentioned in H1 results that our data products margin needs to improve. Everything I was seeing in my first few weeks suggested this margin should and can be higher. And this is a great step towards achieving the margin this syndicator subscription-based product fully deserves. The margin in research was slightly down. This will improve and go back to last year's level and beyond as the value delivery plan delivers. Shopper's margin is materially, I don't know whether to use the word different or lower, either way it's lower relative to last year. And this is exclusively to do with the game change investment program we discussed at the H1 results. If you were to add back this specific investment and targeted investment, the margin would be flat year on year. Moving on to our geographic performance, very strong performance in Americas. Ray and his team in the US had a very encouraging H2. All other regions have shown solid resilience in what we all know is a tough market environment. The vertical sectors in which we have been growing in the last six to 12 months is particularly pleasing. There have, however, been some tough sectors, as we have discussed before, agencies being one, and they are weaker and they have declined year on year. So is sports. Our sports branding remains very strong. However, there have been some operational challenges and personnel changes which have led to a drop off. We see no reason why this can't continue to grow in the future. The academic vertical is also down year on year. Although this is not a light for light decrease since FY25 included the uptick due to the November 24 US election work. And we're confident this trend will continue in the future. However, as touched on by Stephan already and I'm sure he'll talk about it in a lot more detail later. We are all particularly pleased with the notable new client wins from the hottest, most advanced tech businesses who come to us because they want the best data points and they appreciate and understand the benefits the best data and insights give you. Revenue from the AI labs themselves have shown a nice growth year on year. The other vertical which is gaining deep traction is financial services. We're up nearly 20% year on year in this vertical. And we've got some great new blue chip global financial services clients with a very high and deep tech focus coming to us in the last six or so months. As our H1 results, in March I said that we needed to improve our cash conversion. and I'm delighted to say that we've increased this to 76% compared to 71% in our prior year and a mid 60% output outcome at a half. I'm not yet comfortable giving a forward-looking target externally, but I'll give you a commitment that this will continue to be a key area of focus in FY27 and beyond. And CapEx has increased year on year for two main reasons. or three main reasons I guess. Panel investment as part of shopper investment program. A big chunk of their investment is in modernizing and improving the depth and strength of their panels. And we have been increasing investment in technology to enable the next steps in automation and product capabilities. The value delivery plan is not just about efficiencies and savings, it's about investment in the right areas too. We have a strong balance sheet. Are we well capitalised with ample liquidity? The answer is a clear yes. As at the end of September, cash was £48 million and we had £8 million of undrawn RCF. At the end of June, these numbers were £42 and £6 million respectively. We are generating cash and continue to generate cash. Hence our confidence of launching the share buyback programme today. During the year, we successfully extended the debt facilities during H2. There is no additional funding, no increase in borrower or guarantor obligations, no change to pricing, covenants or security. Total commitments remain at €224 million, comprising €184 million of term and €40 million of RCF. The one change we did get through with the banking group was to allow us to do a share buyback programme. You may recall that the half year we couldn't do one because we needed to seek formal approval. As Stephan has already mentioned, as I say, the buyback has started today and will be up to £50 million as already disclosed over the next 12 months. As guys at the half year, net debt to EBITDA reduced back to 1.7x with interest cover over six times. And these covenants will be improving over the following reporting periods. Value delivery plan. We launched this in March and momentum is building nicely. The transformation plan comprises three waves. The waves combine automation of key processes, efficiency improvements, simplification, enhanced ways of working, along with significant transformation enabled by AI. Plus, wave three also includes significant new revenue streams as well. As you will recall, wave one completed in March 26th. We delivered an annualised 2.5 million reduction in our cost base, which targeted predominantly headcounts and other cost reductions in non-revenue generating areas. Page 226 includes some benefit from this action already. FY27 will benefit from the full year impact. Wave 2 is deep in the detailed planning and implementation phase. It includes a broad range of initiatives. Automation and simplicity are two key themes as already disclosed. The combined impact of the first two ways is expected to deliver an annualized adjusted operating profit margin uplift of 350 bits over the margin achieved in H1 FY26, which was 12.3%. We have high levels of conviction this target will be achieved prior to the end of FY27. Another example of delivering what we said we'd deliver a few months ago. Wave 3 will focus on opening up new revenue streams through development of AI-powered products and our data as a product capabilities. Our product development, data science and technology teams continue to make strides in these initiatives, including introducing imputation of our data set and developing newer products such as YouGov Parallax. I know Stephan will enjoy talking about it and adding more detail on these shortly. Wave 2 and 3 comprise 12 individual work streams, each with an executive owner to optimize the speed and certainty of delivery. I was going to name the 12 names, but there are 12 and it will take some time, but everyone's doing a great job. And I personally, I know the board is very grateful for the efforts the team are doing to really push on with this big transformation initiative. So final slide for me. Coming back to the priorities I mentioned initially, I want to give more clarity and granularity on trading and outlook. We've had an encouraging start to the year, bang in line with our expectations and our budgeted numbers. Currently, 49% of FY27 revenue expectations are contractually secured. That's not a weak pipeline, that is contractually secured. That is marginally up on the same period last year. Hence the confidence earlier about FY27 being our 17th year of revenue growth despite the market conditions. We're making a loan repayment this month. The last day of October, we'll pay back 20 million euros of the loan. We've disclosed our share buyback already. Investment in Shopper will continue in FY27 at broadly the same levels as FY26, although the benefits of the investment programme are expected to start flowing through from a revenue perspective towards the end of FY27. Based on the significant progress achieved in planning and executing the value delivery plan over the last few months, along with continued investment in Shopper, The group expects to deliver adjusted operating profit of between 58 million and 61 million for FY27. This is in line with current market expectations. And this represents a year-in-year growth of around double-digit percentage points. I'll stop there and pass back to Stephan, who can talk about the exciting stuff now.

Thanks. Thanks, James. And it's called Strategy Update, which sounds like it's a sort of distant prospect. Everything I've ever had in the Strategy Update becomes reality very quickly. It's actually a roadmap of what we're doing. It's not some vague thing of this is what we hope to be doing. This is what we're doing. Thank you very much. This whole thing is a new vertical essentially for us, AI, in terms of companies. Obviously two new companies, Anthropic and OpenAI are the two main ones. They've become big clients of ours. And just very narrowly, We've done four million just in traditional reputational work that they use to communicate, to understand audiences, but also to communicate. Anthropic has made a big deal out of very large surveys that we've done for them, which connect them to their users and to the public in general. Thank you very much. Our consequence of news items and so on, and I'm not talking specifically those two, I'm talking about the whole sector, that comes to about 11 million now in sales over the last 12 months. So that is really a big deal for us. They turn to us. They don't do it themselves. Of course they need an outside agency. They need to talk to humans. They do that mainly through us and other companies as well. But the idea that human research is replaceable by machines is simply wrong. The machines really need the humans to supply that data. So that's the first bit. The second bit is internal efficiency. Obviously we're using AI to make our systems more efficient. I've got a slide on that in a second. And the third area, the most important, is the AI enabled products. Really it's a transformation in products and in how we deploy data. so that second box automating research at scale we are looking to make an end-to-end automated research flow that doesn't mean by the way that the humans disappear I actually don't think they will Thank you very much. I think we'll see growth getting scale out of our systems, being the way that we most benefit from the advantages. The advantages are also higher quality in some respect in terms of speed, consistency, accuracy, all of those things, because humans make mistakes. The more of that process that we can automate, the more of it we can streamline before it even gets into the system, because at the moment it's typical that people come with their projects and they design them in any way that they want and then we make that happen and it's highly customized but the advantages to them as well as to our own efficiency is to streamline how they think about the work and how that works its way through the system and how that helps to reduce error so the whole process is one that benefits all sides Parallax, our new invention. This time last year, I talked about Voices. Voices has become a successful part of our offer. We now have just launched Parallax, which has also had its first six-figure client confirmed. Parallax uses synthetic data, is synthetic data, Thank you very much. of the world. One is a narrow one, if I can put it that way, narrow but accurate and deep, which is the human view. We talk to 1,000, 2,000, 10,000 people that we know well and that we have lots of data for, and the data that comes out of that is the most reliable human survey data in the world. And that is the foundation That can yield and that can create twins, synthetic twins. We have a partner, Original Voices, that helps us with that, that is experienced in that and has operationalized that in various ways to help get the maximum value out of that data. and that can be whether it's our data, brand index, the cube, all of that to make the most detailed digital twins you can imagine or whether it is somebody comes along, does a survey with us and then we turn the participants of that survey into digital twins that can answer lots and lots more questions in the future. But just having those two things separate isn't what makes the real 3D view. It isn't just having either or combining the human view and the synthetic view. It is combining them through verification and validation. So at the same time as you generate questions, answers from the synthetic twins, parallax... Thank you very much. You take two or three of those questions and run them against the human version of those same twins at the same time. You can then use that to calibrate all of the other questions. So it's not only two different data sets. It is the first data set that you generated through synthesis that is calibrated by the human data that comes after. I don't think anybody else offers this or can offer this the way that we can. Thank you very much. How good is synthetic? Do we have to throw it away and just have human data? No, you can actually get the benefit of both in a way that strengthens both. So that is a fundamental change to an operating system. That is a fundamental offer that we make to the industry, which I don't believe anybody else can make. and that will be something that goes through you know somebody previously asked us how much you expect to make from this next year it's very hard I'm not going to give an answer to that question as you already know but I would say in this case precisely because it affects everything else we sell every single client can have twins of the work that we're doing for them in custom or in the syndicated part so that is a big deal for us that transforms the whole offering and just to remind you of our ecosystem it uses all the assets that we already have I mean Thank you very much. You can verify, validate, synthesize everything. So that's the basic offer. You've seen this before. The red stuff is what we've had. The two new parts there are voices and parallax. They are all different entries into our world of data. You can go from one to the other. You can add them together. It is a connected system. And that leads to... That connected system leads to a seamless client journey throughout the whole world of data. This system is already, you're able to query it using agents. We have MCPs, we have on our site, you're able to ask questions of the data. That is at an early stage. I will not say to you that this is I do say in development. You can right now as a client go on crunch, ask questions of the cube and see what there is. But that's almost table stakes. I said before everybody else is doing that as well. The difference with us is the sheer quantity of data. But where it becomes exciting is that the agent can not only say, here's what the data says, but do you need some other data? We can get it for you within 30 minutes. And you can write your own questions or you can have your own LLM or ours or whatever we use in that place. to write the surveys for you from all the knowledge that we have to answer your questions. Then we can use synthetic and parallax at the same time. In other words, the agents can arrange the entire journey to give you the most full, the most connected and the most verifiable data that there is in the industry. that is our system and what you see there all of that exists except for the green circle the green circle is obviously an advanced AI system we are not advanced creators of AIs and we will be looking we have in mind someone like Thomson Reuters who's made steps in this direction creating their own domain specific foundation model that's the area that we're Very realistically looking at, very specific, we're not saying we're going to be a gigantic AI company, that's not at all what we're saying. We're talking about in our industry, focused on how clients of market research use data in their businesses. That's our expertise, that's where we're focused on, and that's where we want to create the most advanced agentic model that there is, which we can because of all the things that we already have developed. I do repeat this model of being able to look at the data we have and instantly verify and add to it from the same people is, I think, unique in the industry, certainly at the scale that we can do that. And we do have partners in this. I know some people have said, some of our very good investors who communicate with us and say, are you doing the Reddit thing? Are you selling lots of, are you selling your data? That is a very dangerous thing for companies like us to do. If you have vast amounts of unstructured, if I may call it dirty data like Reddit, then the AIs make value out of that by taking all of it. We can't possibly give all our data to somebody else to turn into something that people can buy through them. It's our data, and we have to jealously guard it. Of course we can share it through the systems like MCPs that can be controlled, through agents that can be channeled in the right way to use that data, and that is what we're doing. But we are looking at partnerships here. I mean, we already have, it's known to you, a very strong relationship with Deloitte. Deloitte have upped their level of partnership with us significantly and for their trust model, this is not a new thing, I think it's out there somewhere, but that's as an important and developing relationship, and we have other relationships that we're developing in order to get the value out of that and maybe actually some give and take in there as well that we can gain from their expertise. So this is the way forward. This is a client journey that I think nobody else can mimic exactly, and most of that already exists. So I end by saying we've got a framework for the next phase of YouGov's transformation. First, the new generation panel ecosystem. I haven't said anything about that. That's actually my big final task in the next three months to make a bunch of changes that we have been making. We have some new methodologies for panel and I'll tie that up and that'll be for somebody else to present subsequently. But how we recruit and maintain panel is fundamental obviously to everything you've seen here. I think we're the best at it but we need to be better because people are changing. Young people are engaging less. We all know that. It's getting harder to engage people into a continuous relationship and we're doing new things in that area. The second AI-powered platform transformation, I've just shown you that in some detail. The third part I've alluded to before, but it is saying this is a platform company, this is looking for a certain kind of work, and we have a unit that... is focused on those partnerships that has had its first successes. And this goes to all parts of the business. This isn't data versus custom. The difference between custom data, custom projects, and data products isn't the same anymore. They merge together. And I'm thinking of one product. Thank you very much. big name company in the world now has a one and a half million dollar subscription to brand index so far from being becoming irrelevant it's actually you know that data is becoming more valuable not less valuable and then finally the operational efficiency and simplification we've talked about, making all of this as automated as possible so that our experts can also give the best possible advice and service because different customers need different levels of service. That is what it's all about. The end of that bit. We are now going into the Q&A. There is a microphone coming around, and I'll take that from the seat.