S4 Capital Plc · LSE:SFOR
S4 Capital — H1 2020 Earnings Presentation
45 slides from S4 Capital's earnings presentation, September 2020
Slide 1: 2020 H1 Trading Update
2020 H1 Trading Update September 2020
Slide 2: Contents
Contents 01 Results 02 Content Practice 03 Data & Digital Media Practice 04 Clients 05 Mergers 06 Sustainability 07 Talent, Diversity & Inclusion 08 Summary and outlook 09 Q&A 2
Slide 3: Trading Update
Trading Update Trading Update 01 3
Slide 4: Financial performance
1. Results / Billings* £260.4million and pro-forma** billings £264.9 million Financial / Revenue £141.3 million up 61% from £88.0 million, like-for-like*** revenue up 7%, pro-forma up 8% / Gross profit £124.0 million up 77% from £70.2 million, like-for-like up 12%, pro-forma up 13% performance / Oper
Slide 5: Gross Profit performance like-for-like
1. Results Gross Profit performance like-for-like 5
Slide 6: Unaudited condensed consolidated income statement
1. Results Unaudited condensed consolidated income statement 6
Slide 7: Unaudited condensed consolidated income statement
1. Results Unaudited condensed consolidated income statement 7
Slide 8: Unaudited condensed consolidated income statement
1. Results Unaudited condensed consolidated income statement 8
Slide 9: Unaudited consolidated balance sheet
1. Results Unaudited consolidated balance sheet / Increase in intangibles driven by combination with Circus and exchange rate differences / Receivables decreased as a result of strong focus / Net cash position of £7.2 million, including the £45.8 million term loan drawn and drawdown revolving facilit
Slide 10: Unaudited consolidated statement of cash flows
1. Results Unaudited consolidated statement of cash flows / Strong cash flow: £37.6 million cash flow from operations with £18 million EBITDA in HY1 / Cash flow from investing activities mainly relate to the combination of Circus and settlement of 2019 combinations / Cash flow from financing activities ma
Slide 11: Pro Forma gross profit, operational EBITDA and EBITDA by practice
1. Results / Content practice gross profit 77% of total against 75% in 2019 Pro Forma gross / Data & digital media practice gross profit 23% of total against 25% in 2019 profit, operational / Content practice Operational EBITDA before central costs GBP 16.0 million EBITDA and / Content practice Operati
Slide 12: Pro Forma Gross profit by Geography
1. Results / Americas (72% of total) GBP 91.7 million (+14%) Pro Forma / EMEA (19% of total) GBP 24.2 million (+7%) Gross profit by / Asia Pacific (9% of total) GBP 11.2 million (+18%) Geography 12
Slide 13: Content Practice
Content Practice Content Practice 02 13
Slide 14: Intro
Content Practice Intro The pandemic has significantly challenged brands’ ability to produce the content they need to connect with consumers. It has also disrupted product delivery and availability, shifting priorities and accelerating the need to transform. COVID Recap Our New Solutions What’s next O
Slide 15: Big ideas delivered "more of the same"
Content Practice Big ideas delivered “more of the same” While clients keep paying big for Big Ideas, the cultural impact and consumer change promised by traditional networks seem less and less prevalent. While traditional brands and agencies continued to focus on storytelling through one-hit wonder
Slide 16: We stepped up to the Virtual Stage
Content Practice We stepped up to the Virtual Stage Powering Events with LiveXP Take Live Events to the Next Level, Online or Off Having a video conferencing platform isn’t a livestream strategy. Brands can go much further in giving audiences and performers alike a sense of presence and agency by dri
Slide 17: 17
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Slide 18: Helped Broadcast for a Digital Age
Content Practice Helped Broadcast for a Digital Age nk! a Mo That’s NBA VR Live Broadcasts Keeping NBA’s Head in the Game What's the difference between WorkFH and WatchFH? Not much, based on a lot of live shows these days. We upped our broadcasting game by partnering with Yahoo Sports, the National B
Slide 19: Doubled down on Original Content
Content Practice Doubled down on Original Content with Solving NASA’s Toughest Challenges An Out-of-This-World Perspective Original content enables brands to shape culture and engage with consumers authentically. Partnering with Google Cloud, we produced a four-part series of films that demystify tec
Slide 20: With Commerce everywhere in the full CDJ
Content Practice With Commerce everywhere in the full CDJ Dole Sunshine A Customer-Obsessed Platform Ripe for Picking We're entering an age of Everywhere Commerce, in which consumers no longer need to enter a store or visit a digital marketplace to make a purchase; instead, it's just a tap or swipe
Slide 21: What's next?
Content Practice What’s next? “Transformation has not moved the needle. Companies have been transforming digitally for the past decade, but to what end?” “Digital transformation was never optional. But most firms treated it that way, applying digital technology in dribs and drabs — until COVID-19 sh
Slide 22: 2020 Transformed Transformation
Content Practice 2020 Transformed Transformation The past decade has been defined by perpetual digital transformation: brands put it in the "important but not urgent" category, consultancies made money on consulting rather than creating, and brands focused on laying technology pipes over enhancing th
Slide 23: The Next Frontier for Digital Transformation
Content Practice The Next Frontier for Digital Transformation Forrester Consulting writes: “The next frontier for digital transformation is brand virtualization – meeting customers where they are with differentiated, digital environments...” Brand virtualization is not simply translating an experienc
Slide 24: Refreshing an Icon for the long term
Content Practice Refreshing an Icon for the long term LA28.com Connecting the World’s Biggest Celebration of Unity For LA28, the Olympics seek to foster a deeper relationship with Millennials and Gen Z: “How do we keep something fresh and allow us to stay connected to people as we look to the horizo
Slide 25: Data & Digital Media Practice
Data & Programmatic Practice 03 Data & Digital Media Practice 25
Slide 26: Thought Leadership for Changing Times
Data & Programmatic Practice Thought Leadership for Live with MightyHive / Con Vivo en MightyHive Changing Times Live webinars for global audiences with MightyHive experts on data and digital media topics to keep marketers abreast of the latest developments in supply chain transparency, understandin
Slide 27: Bolstering a Best-in-Class Data Practice
Data & Programmatic Practice People Bolstering a Sayf Sharif Joins MightyHive as Senior Director of Data, North America Best-in-Class A digital analytics veteran with 20 years of experience and previous positions leading analytics practices at LunaMetrics and Seer Data Practice Interactive. Toby McA
Slide 28: Expanding Our Global Data Footprint
Data & Programmatic Practice Expanding Our Global Data Footprint Officially Launching the MightyHive Data Practice Creating a scaled, global capability for marketers in need of a Data Agency of Record to help them harness first-party data and understand privacy. Expanding Analytics Capability in Latin
Slide 29: Interest in Media In-Housing Remains High
Data & Programmatic Practice Interest in Media In-Housing Remains High Demand for in-housing services is robust, with COVID-related economic stresses accelerating digital transformations. MightyHive added several large-scale in-housing initiatives and expanded the relationship with leading in-housin
Slide 30: Riding the eCommerce Wave
Data & Programmatic Practice Riding the eCommerce Wave MightyHive merged with Orca Pacific, the leading the leading full-service Amazon agency and consultancy. This adds differentiated ecommerce expertise to MightyHive’s advisory, media, and data capabilities during a time when COVID trends have pulle
Slide 31: Clients
Clients Clients 04 31
Slide 32: Q1 - A strong quarter for new business
Clients Q1 - A strong quarter for new business Land & Expand 32
Slide 33: Client portfolio
Clients Client portfolio 33 Based on 100% of S4 Capital Q1 2020 like-for-like Revenue
Slide 34: Mergers
Mergers Mergers 05 34
Slide 35: Mergers
Mergers Mergers JAN 2020 MAY 2020 JUNE 2020 JULY & AUGUST 2020 Data & Analytics Geography eCommerce Digital Transformation 35
Slide 36: Sustainability
Sustainability Sustainability 06 36
Slide 37: Sustainability
Sustainability Sustainability “Sustainability is built into our business model. If we are focused on the long term, there is no conflict between profitability and the interests of all stakeholders. If you are focused on the short term, there is. It’s that simple!” Sir Martin Sorrell Executive Chairman
Slide 38: Sustainability Strategy: Three pillars
Sustainability 1. Sustainable Production: taking care of our work and clients. Sustainability We leverage our expertise to innovate with creativity and technology for good Strategy: 2. Zero-Impact Workspaces: taking care of our house and household. Three pillars We are working towards a climate neut
Slide 39: Sustainability Strategy: On the ground
Sustainability / Local and regional Employee Resource Groups created to deliver strategy Sustainability / KPIs set for each of our three pillars, including to achieve zero greenhouse Strategy: gas emissions by 2024 On the ground / Short-term (2020 - 2021), mid-term (2025) and long-term (2030) target
Slide 40: Talent & Diversity
Talent & Diversity Talent & Diversity 07 40
Slide 41: Talent & Diversity
Talent & Diversity / Commitment to diversity - published figures (US /UK) on S4’s site Talent & / Accountability - ongoing tracking; surveying; assessment and research Diversity / Public forum participation - 600 and Raising, 3% conference, Adcolor, One School / Hiring - re-shaping the process to att
Slide 42: Talent & Diversity
Talent & Diversity / Education - Allyship / anti-racist training; ongoing training for all; looking at specific Talent & training for managers Diversity / Business practices and products - clients expect diverse teams; our teams producing style-guides for a more inclusive client product / ERGs - Blac
Slide 43: Summary
Summary Summary 08 43
Slide 44: Summary & Outlook
Summary & Outlook / People are safe and mostly working from home Summary & / S4 continues to lead the industry in growth and margin Outlook / Strong balance sheet and liquidity, stress-tested / Early cost action taken and we retain flexibility / Favourable client portfolio for growth (54% Technology)
Slide 45: Q&A
Q&A Q&A 45