22 March 2022

YouGov plc

("YouGov" or the "Group")

Results for the six months to 31 January 2022

- Strong performance ahead of expectations as the business benefits from sustained momentum

- Outlook for H2 remains positive on the back of a strong sales pipeline and better execution from a transformed sales structure

- Ongoing investment in all business areas to support continued growth

YouGov, the international research and data analytics group, announces its results for the six months ended 31 January 2022.

1 Defined as growth in business excluding impact of current and prior period acquisitions and business closures, and movement in exchange rates.

2 Defined in the explanation of non-IFRS measures below.

Financial highlights

Stephan Shakespeare, Chief Executive, said:

"YouGov delivered a record performance in the first half of the current financial year. In addition to accelerated and broad-based growth, we achieved sustained profitability and strong cash generation as we continued to focus on driving long-term shareholder value in line with our strategy.

"Demand for YouGov's products and services remains strong and we continue to win new clients while expanding relations with existing ones. This gives us good momentum going into the second half of the year and we are confident we will end the year slightly ahead of the Board's expectations.

We continue to invest in our business to ensure we are able to harness the power of our technology and take advantage of the significant global opportunities so we can realise the long-term potential of our business."

Analyst presentation

A copy of the presentation will be available online at https://corporate.yougov.com/investors/presentations/ shortly after the half-year results announcement is live on the Regulatory News Service (RNS).

Forward looking statements

Certain statements in this interim report are forward looking. Although the Group believes that the expectations reflected in these forward-looking statements are reasonable, we can give no assurance that these expectations will prove to have been correct. As these statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements.

We undertake no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.

Enquiries:

About YouGov

YouGov is an international online research data and analytics technology group. 

Our mission is to offer unparalleled insight into what the world thinks. 

Our innovative solutions help the world's most recognised brands, media owners and agencies to plan, activate and track their marketing activities better.

With operations in the UK, the Americas, Europe, the Middle East, India and Asia Pacific, we have one of the world's largest research networks.

At the core of our platform is an ever-growing source of consumer data that has been amassed over our twenty years of operation. We call it Living Data. All of our products and services draw upon this detailed understanding of our 20 million registered panel members to deliver accurate, actionable consumer insights. 

As innovators and pioneers of online market research, we have a strong reputation as a trusted source of accurate data and insights. Testament to this, YouGov data is regularly referenced by the global press, and we are the second most quoted market research source in the world. 

YouGov. Living Consumer Intelligence.

For further information, visit business.yougov.com 

Chief Executive Officer's Review

YouGov has delivered another record performance in the first half of the current financial year as we continued to drive our sales engine and execute on our strategy to create a universal market research and activation platform. While the market research industry recovered from the pandemic on the back of favourable market conditions in the period, the Group has gone from strength to strength and continued to accelerate its top-line growth. Solid performance was seen across all geographies and divisions and the rise in multi-year deals is providing good visibility as we approach the final year of our current long-term growth plan to 31 July 2023 (FYP2).

·    Factors contributing to this accelerated performance include:

Strategic Direction - second long-term strategic growth plan ("FYP2")

We are in the final stage of our current long-term strategic growth plan and continue to make progress in its execution. As previously announced, the targets to monitor achievement of our FYP2 are:

1 Defined in the explanation of non-IFRS measures below

We had previously designated the first half of the long-term growth plan as the investment phase where we invested heavily in our panels, technologies, platforms, support functions and markets. In order to make the most of the sustained growth opportunities we see in our markets, we have continued this investment into the current financial year.

The focus for the final phase of the plan remains to continue driving top-line growth, with a greater focus on expanding our profitability margin. Through greater standardisation of the offer and delivery, we believe we can continue our evolution into a platform company and achieve increased profitability. The long-term growth potential for the business remains unchanged with the YouGov Platform, increased self-service capabilities and higher penetration of syndicated data products to drive the next phase of growth.

Strong execution against our three strategic pillars

Our three strategic pillars, Data Integration, Public Data and Ethical Activation, remain unchanged.

Data Integration

Strategic focus: Fully integrating custom research and client service with our data products and tools to create new value from existing data and open up new revenue streams through customisation

·    Progress made against this pillar during the year:

Public Data

Strategic focus: Expanding YouGov Public Data as a public service, for brand reputation, panel engagement and showcasing our data

·      Progress made against this pillar during the year:

Ethical Activation

Strategic focus: Enabling marketing activation on our platform with a focus on personal data protection and self-service research

·     Progress made against this pillar during the year:

Focus on operations

As the Group continues to scale and evolve into a true platform, we identified the need to reshape our sales organisation to ensure we have the right structure in place to achieve our long-term ambitions. With the reorganisation of our sales structure now complete, we launched our first ever learning management programme (YouGov Academy). The goal of this programme is to efficiently train our salesforce and researchers on YouGov products and provide exposure to real client experiences, enabling them to serve clients more effectively.

As our sales pipeline continues to grow, our focus has shifted onto expanding the role of our shared service centres (called Centres of Excellence or CenX) to ensure we are able to deliver on our research commitments in a timely and cost-efficient manner. Overall staffing levels of CenX have seen a strong rise with an emphasis on resources dedicated to directly supporting our global research functions in their day-to-day work. Additionally, we continue to see an uptick in the number of departments shifting headcount to the CenX to take advantage of operational efficiencies.

Board Composition and Succession Planning

As previously disclosed, Roger Parry will be standing down from the role of Non-Executive Chair during the coming year. The Board is continuing to work with the executive search firm, Egon Zehnder, as part of its succession planning. 

We have taken also this opportunity to undertake a thorough external review of our Board in terms of process, composition and effectiveness and have concluded that an additional independent director role could be beneficial. The recruitment process for this position has now commenced, and we hope to have the newly appointed director confirmed ahead of our next financial results in October 2022. YouGov has scaled very rapidly over the recent years and our goal remains to ensure we have the best talent in the right positions for the next phase of our continued growth.

Current trading and outlook

Stephan Shakespeare

Chief Executive Officer

22 March 2022

Chief Financial Officer's Review

The Group has delivered a stellar performance in the six months to 31 January 2022 as we continue to deliver sustainable, profitable growth.

Total Group revenue rose 28% to £101.2m in the period, compared to £79.0m in the six months to 31 January 2021. Double-digit growth was recorded in all our geographic regions.

Underlying revenue growth was 25% over the prior year period (28% in reported terms reflecting foreign exchange movements and contribution from acquisitions). Underlying operating profit increased by 36% when excluding the impact of acquisitions, one-off items and FX.

Our strategy of growing our share of the client's wallet has started to deliver initial positive results, giving us further confidence as we continue to invest for future growth.

Adjusted operating margins and organic growth

Gross margins increased by 140 basis points (bps) to 84.5% as a higher proportion of sales was derived from the high margin Data Products division in the period.

Group operating costs (excluding separately reported items) of £71.5m (HY21: £55.1m) increased by 30% in reported terms, and 32% in constant currency terms. Group adjusted operating profit (excluding separately reported items) increased to £14.0m (a 33% increase over £10.5 in HY21) on the back of higher gross margins which were partially offset by increased amortisation of intangibles and higher staff and central costs. Adjusted operating margins increased from 13.3% to 13.8%. 

The statutory operating profit (which is after charging other separately reported items of £3.6m) increased by 45% to £10.8m (HY21: £7.4m).

Performance by Division

Data Products

Our syndicated data products suite includes YouGov BrandIndex and YouGov Profiles as well as newer sector specific offerings and our latest cross-device tracker, YouGov Safe.

Our Data Products division saw a resurgence in growth on the back of strong sales of our subscription products and healthy renewal rates. Revenue from Data Products increased by 31% in reported terms (32% growth in underlying terms) in the period. The adjusted operating profit from Data Products increased by 26% to £11.1m and the operating margin declined by 130 bps to 32%. The slight decline in margins can be attributed to recent investment in the division to enhance the design and improve the user experience for our flagship products.

Geographically, the US remains the largest Data Products market and grew by 36% in the period on an underlying basis. Mainland Europe has also seen strong growth in our syndicated products, recording 44% growth, on the back of large, multi-country project wins, while the UK delivered 14% growth for the period.

Data Services

Our Data Services division consists of our fast-turnaround research services, including our market-leading YouGov Omnibus.

In the period, revenue from Data Services increased by 9% in reported terms and by 9% in underlying terms to £23.7m. The division saw a slight decline in the period in the UK as the government and non-profit sector adjusted spending in the post-pandemic world. Additionally, the US saw flat performance while strong double-digit growth was seen across all the other regions, on the back of continued momentum in the agencies and financial services sectors.

This division's profitability recorded a 17% increase to £4.3m (HY21: £3.7m) and the operating margin improved from 17% to 18%.

Custom Research

Our Custom Research division includes tailored research projects and tracking studies.

During the period, the division's revenue increased by 39% in reported terms, including contribution from the LINK acquisition, while growth in underlying terms was 28% to £42.0m. This significant acceleration in the division was driven by the phasing of large, custom projects for our technology clients in the first half. The higher contribution from the technology sector, which typically delivers robust margins, has resulted in the division's adjusted operating profit increasing to £8.0m (HY21: £4.7m) representing an operating margin of 19% (HY21: 16%).

Performance by Geography

1 Defined as growth in business excluding impact of current and prior period acquisitions and Kurdistan business closure, and movement in exchange rates.

2 Defined in the explanation of non-IFRS measures below.

Panel Development

We continue to invest in our online panel to increase our research capabilities, both in our newer geographies and specialist panels. At 31 January 2022, the total number of registered panellists had increased by 26% to nearly 20 million, compared to 15.8 million at 31 January 2021, as set out in the table below.

Group financial performance

Amortisation of intangible assets and central costs

Amortisation charges for intangible assets totalled £9.4m in the period (HY21: £6.8m) of which £5.1m (HY21: £3.1m) relates to separately acquired assets and £3.9m (HY21: £3.9m) to internally generated assets.

Central costs include support functions and contribution from incubator projects. Central costs have increased to £9.4m (HY21: £6.7m) driven by the increase in headcount and higher one-off professional and marketing costs.

Separately reported items

Acquisition related costs in the period comprise of £2.4m of contingent consideration treated as staff costs in respect of the acquisitions of Charlton Insights Inc, Faster Horses Pty Limited and YouGov Finance Limited (renamed from Lean App Limited) and £0.8m of transaction costs in respect of the acquisitions of LINK Marketing Services AG and Rezonence Limited.

Profit before tax and earnings per share

Adjusted profit before tax was £15.4m, increasing by 12% compared to £13.6m in HY21, including £1.4m of unrealised foreign exchange losses. The adjusted tax rate increased slightly from 23% in HY21 to 24%. Statutory profit before tax increased by 18% to £9.2m compared to £7.8m in the six months ended 31 January 2021.

During the period adjusted earnings per share grew by 10% from 9.7p to 10.6p and statutory earnings per share increased by 20% from 4.8p to 5.7p.

Technology investment and global expansion

The Group invested £3.7m (HY21: £5.2m) in the continuing advancement of our technology platform whilst investment in panel recruitment was lower than the prior year at £4.4m (HY21: £6.1m) as spend in HY 2021 included the expansion into 15 new markets. £0.6m (HY21: £0.6m) was spent on the purchase of property, plant and equipment. Other cash outflows included £25.0m spent on the acquisition of LINK and Rezonence, taxation payments of £2.8m (HY21: £4.1m) and the annual shareholder dividend payment of £6.7m (HY21: £5.5m) in December 2021. Additionally, £20.0m was raised through a new revolving credit facility signed in December 2021.

The Group is expecting £5.5m of deferred consideration payable in respect of future earn-outs related to acquisitions, of which £2.4m is expected to be paid in the next twelve months.

There was a net cash inflow of £6.0m in the period, compared to an outflow of £7.3m in the six months to 31 January 2021. Net cash balance of £20.1m was lower than at 31 January 2021 (£27.5m) due to the acquisition of LINK.

Currency

The Group's results were affected by the net appreciation of £ Sterling as its average exchange rate was 3% higher against the USD in this period than in the six months to 31 January 2021. Also, the £ Sterling was 6% higher against the EUR in this period than in the six months to 31 January 2021. The net impact of foreign exchange on the Group's adjusted operating profit² was a decrease of £0.4m compared to calculation in constant currency terms.

Alex McIntosh

Chief Financial Officer

22 March 2022

1 Defined as growth in business excluding impact of current and prior period acquisitions and Kurdistan business closure, and movement in exchange rates.

2 Defined in the explanation of non-IFRS measures below.

Explanation of Non-IFRS measures

Reconciliation of Non-IFRS measures

1 Defined in the explanation of non-IFRS measures above.

YOUGOV PLC

STATEMENT OF DIRECTORS' RESPONSIBILITIES

For the six months ended 31 January 2022

The Directors confirm that these condensed interim financial statements have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and that the interim management report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:

·    an indication of important events that have occurred during the first six months and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

·    material related-party transactions in the first six months and any material changes in the related-party transactions described in the last annual report.

The Board of Directors of YouGov plc are:

·      Roger Parry - Non-Executive Chair

·      Rosemary Leith - Non-Executive Director and Senior Independent Director

·      Andrea Newman - Non-Executive Director

·      Ashley Martin - Non-Executive Director

·      Stephan Shakespeare - Chief Executive Officer

·      Alex McIntosh - Chief Financial Officer

·      Sundip Chahal - Chief Operating Officer

By order of the Board:

Alex McIntosh

Chief Financial Officer

22 March 2022

YOUGOV PLC

CONSOLIDATED INCOME STATEMENT

For the six months ended 31 January 2022

1 Defined in the explanation of non-IFRS measures.

All operations are continuing.

YOUGOV PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 31 January 2022

Items in the statement above are disclosed net of tax.

YOUGOV PLC 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

For the six months ended 31 January 2022

YOUGOV PLC 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)

For the six months ended 31 January 2022

The accompanying accounting policies and notes form an integral part of this financial information.

Alex McIntosh

Chief Financial Officer
22 March 2022

YOUGOV PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the six months ended 31 January 2022