Yougov Plc · LSE:YOU
Yougov — FY2007/08 Earnings Presentation
27 slides from Yougov's earnings presentation, Oct 8, 2008
Slide 1: YouGov Plc: Full Year Announcement 2007/08
YOUGOV PLC Strong revenue performance - investing to support growth Full Year Announcement 2007/08 October 2008
Slide 2: Operational overview
Operational overview • Organic revenue growth 38% in UK and Middle Eastern businesses. Proforma organic growth of acquired businesses 28% • Three acquisitions completed in Germany, Scandinavia and USA - have enlarged our global reach allowing us to deliver EMEA and North American research to global
Slide 3: We are now a global player…
We are now a global player… 2006/07 Revenue £14.3m Middle East £6.4m UK £7.9m 2007/08 Revenue £40.4m USA £2.3m Scandinavia UK £6.5m £12.0m Germany £12.0m Middle East £7.7m …. with improved geographical balance and better opportunities for YouGov products 3
Slide 4: Panels in over 30 countries revealing what the world thinks
Panels in over 30 countries revealing “what the world thinks” 2006/07 Panel Size 2007/08 Panel Size UK 230k Middle East Middle East (18 countries) 71k 140k Germany and Austria 40k Scandinavia (6 countries) 140k UK USA 189k 1,200k 2006/07 Total: 260k 2007/08 Total: 1,750k New panels in development in
Slide 5: A number of challenges dealt with…
A number of challenges dealt with… • Companies reached revenue targets but the complexity of managing our cost base increased • Insufficient robust financial management processes to enable us to monitor the overall impact on profitability of these investments at local level • Management team strengt
Slide 6: Highlights of revenue growth
Highlights of revenue growth • Revenue has increased due to acquisitions and organic growth • UK: New sector teams, higher volumes in Data Services • Middle East: Growth in qualitative offering and development of regional quantitative offering, geographic expansion into Saudi Arabia • Germany: Build
Slide 7: Segmental analysis
Segmental analysis Revenue Revenue Operating Operating £m growth % profit £m margin UK 12.6 52% 3.9 32% Middle East 7.7 18% 3.8 49% Scandinavia 6.5 44%* 1.0 15% Germany 12.0 13%* 0.7 6% USA 2.8 89%* -0.1 -4% Group 40.4 183% 8.7** 22% *Proforma revenue growth **Normalised operating profit 7
Slide 8: Financial overview
Financial overview Turnover £'000 Operating profit £'000 40000 8000 30000 6000 20000 4000 10000 2000 0 0 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 Revenue per head £'000 Normalised earnings per share p 160 8.0 120 6.0 80 4.0 40 2.0 0 0.0 2004* 2005* 2006* 2007* 2008* 2004* 2005* 2006* 2007 2
Slide 9: Group P&L
Group P&L 2007/08 2006/07 • Turnover up 183% to £40.4m (£14.3m 2007) £’m £’m • 38% of revenue growth is organic • Gross margin increased from 81.8% to 82.7% Group revenue 40.4 14.3 • Group operating margin of 20% (2007: 39%) Cost of sales (7.0) (2.6) reflects margin in acquired businesses and contin
Slide 10: Investment to support and drive further growth
Investment to support and drive further growth • A number of investments were made in the year totalling £2m • Sector specialist teams in UK and USA • Expansion in to Eastern Europe and Berlin • Geographical expansion in Scandinavia • Global IT development team and data centres • Establishing Saudi
Slide 11: Balance sheet
Balance sheet 31-Jul-08 31-Jul-07 £’m £’m Assets Non current assets Goodwill 33.5 1.1 Intangible assets 17.1 0.3 • Reflects acquisitions Other non current assets 4.0 5.1 Total non current assets 54.6 6.5 • Strong financial position Current Assets Trade & other receivables 17.2 5.7 • Cash balances ar
Slide 12: Cash flow
Cash flow 31-Jul 31-Jul 2008 2007 £’m £’m Cash flows from operating activities • Cash flow from operating activities £3.1m Profit after taxation 5.3 5.0 Adjustments for: Non cash movements 2.3 0.5 • Debtor days at 31 July 2008 were 88 Net working capital movement (4.4) (0.7) days (2007: 104), signif
Slide 13: UK - operational review
UK - operational review 2006/07 £m 2007/08 £m Growth Revenue 8.3 12.6 52% Operating profit 3.5 3.9 11% • Introduced sector specialist teams (“YouGov Consulting”) to support clients’ strategic market research needs - helping to build our recurring income stream • Winning large projects with blue chip
Slide 14: Middle East – operational review
Middle East – operational review 2006/07 £m 2007/08 £m Growth Revenue 6.5 7.7 18% Operating profit 3.6 3.8 6% • Continued to grow its qualitative research and developed its quantitative capabilities • Expanded its research capabilities across the region, including establishing a new office in Saudi
Slide 15: Scandinavia – operational review
Scandinavia – operational review 2007/08 £m Revenue 6.5 Operating profit 1.0 • Scandinavia is a natural market for YouGov, with among the highest levels of broadband internet penetration in the world • Infrastructure in place through which to roll out YouGov’s products regionally • Online panels acr
Slide 16: Germany – operational review
2007/08 Germany – operational review £m Revenue 12.0 Operating profit 0.7 • Substantial base of blue chip client relationships with expertise in sectors such as financial services, insurance and healthcare • Growing online offering with online panels in Germany and Austria (40,000 panelists) • Profi
Slide 17: USA – operational review
2007/08 USA – operational review £m Revenue 2.8 Operating profit (0.1) • Polimetrix is at an early stage of commercial development • Brings leading edge survey technology which is rolling out across the Group as well as the asset of a large US online panel • Strength in political polling provides a
Slide 18: New ventures were established
New ventures were established • YouGovAlpha launched - market research agency with services tailored to the specific needs of fund managers and investment professionals • YouGovAlpha Fund: joint venture with Numis and Four Capital Partners to form a hedge fund to exploit investment opportunities ide
Slide 19: Innovation is core to our business
Innovation is core to our business • Technologists in USA and UK • BrandIndex enhancing and Omnibus products and rolled out survey platforms • New Great Innovation products Products developed with sector specialists Geographical • Increased footprint Hubs • International research offering for client
Slide 20: Product roll out at July 2007
Product roll out at 31 July 2007 Pre Acquisition – YouGov Additional scale provided by acquisitions UK Middle East Germany Scandinavia USA BrandIndex 3 (3) (3) Omnibus 3 3 (3) Quantitative 3 3 3 3 3 Qualitative (3) 3 3 3 3 Sector Specialisms (3) 3 Operational Development phase Planning phase 20
Slide 21: Products – good progress in rolling out existing products
Products – good progress in rolling out existing products UK Middle East Germany Scandinavia USA BrandIndex 3 (3) 3 3 3 Omnibus 3 3 3 (3) 3 Quantitative 3 3 3 3 3 Qualitative 3 3 3 3 3 Sector Specialisms 3 (3) 3 (3) Operational Development phase Planning phase 21
Slide 22: Market dynamics
Market dynamics 30 25% 25 20% 20 15% £ billion 15 10% 10 5% 5 0 0% 2003 2004 2005 2006 2007 Global Market Research Spend Online as a Percentage of Total Market Source: Esomar • General market trends remain favourable • The online market research market is expected to grow by 21% in 2008 to $4.3bn (S
Slide 23: Group fundamentals remain the same
Group fundamentals remain the same • Online is a growth area • YouGov remains unique • Brand and reputation higher than ever • Opportunity to be the global brand for what people think • Higher margin business than most online or offline competition • Innovation - next step, the YouGov screen 23
Slide 24: Group strategy
Group strategy • The Group’s strategy in 2008/9 continues to be to grow revenue, invest in the business and increase market share • Sector specialist teams developing new higher margin data products and services • Network of hubs supported by a global technology platform • Delivering global products
Slide 25: Current trading and Group outlook
Current trading and Group outlook • Momentum continues and Board expects to deliver good organic revenue growth • Ongoing investment to support future growth and benefit from market opportunities • Steps already taken to ensure better management and financial controls across the Group • Leverage sca
Slide 26: Appendix
Appendix YouGov plc, 50 Featherstone Street, London, EC1Y 8RT, United Kingdom i Confidential - not for reproduction and must not be passed onto third parties 26 Y ouGov
Slide 27: YouGov's margins compare well with traditional full service agencies and online sample providers
YouGov’s margins compare well with traditional full service agencies and online sample providers Operating Full service agencies Margin Gfk 13.7% Ipsos 9.8% TNS 10.0% Brainjuicer 12.5% Harris Interactive 1.75% Online panel providers Toluna 24.3% Greenfield online 14.1% Research Now 9.5% Web measurem