TIDMYOU
RNS Number : 7798O
YouGov PLC
12 October 2021
12 October 2021
YouGov plc
("YouGov" or the "Group")
Trading update for the year ended 31 July 2021 and update on
timing of FY21 results
- Strong performance across all divisions and geographies driven
by continuous client demand
- Ongoing investment in all business areas to support strategic
growth
- Sales pipeline remains encouraging, giving YouGov confidence
in its FY22 growth prospects
Update on timing on FY results
Due to unforeseen circumstances arising late in the audit
process, the Group requires additional time to finalise its
full-year preliminary results. These numbers are not expected to
change from those presented below and the finalisation of the audit
may result in a reduction of the anticipated Group tax charge.
YouGov will now announce its preliminary results for the year ended
31 July 2021 on 19 October 2021. As the audit is at an advanced
stage, the Group is today providing a detailed full-year trading
update.
Trading update
Summary of Unaudited Results
Year to Year to Change % Underlying(1)
31 July 31 July Change %
2021 2020
GBPm GBPm
--------- --------- --------- ----------------
Revenue 169.0 152.4 11% 18%
--------- --------- --------- ----------------
Adjusted Operating Profit(2) 25.5 21.8 17% 32%
--------- --------- --------- ----------------
Adjusted Operating Profit
Margin(2) (%) 15.1% 14.3% 80bps 13%
--------- --------- --------- ----------------
Statutory Operating Profit 19.0 15.2 25 % -
--------- --------- --------- ----------------
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
-- Revenue growth of 11% (FY20: 12%) with underlying(1) growth
of 18% on the back of strong delivery in the second half of the
financial year
-- Underlying(1) operating profit (excluding impact of planned
Kurdistan closure and foreign exchange movements) was up by 32%,
representing an underlying(1) operating profit margin of 16% (FY20:
14%)
o This growth was driven by all three divisions and despite
absorption of an increased non-cash share-based payment charge of
5.1m (FY20: GBP2.8m)
-- Statutory operating profit up 25% to GBP19.0m (FY20:
GBP15.2m) including separately reported items charge of GBP6.5m in
respect of completed acquisitions
Operational Highlights
-- Strong momentum continues in Data Products and Custom
Research, with bundling of sales between these two divisions,
resulting in larger and more strategic long-term deals signed
during the period, while Data Services saw excellent growth
o Data Products revenue increased by 13% (18% from underlying(1)
business) to GBP58.0m following a good recovery in the second half
of the year and strong contribution from Mainland Europe
o Data Services revenue increased by 20% (22% from underlying(1)
business) to GBP45.5m, following continued strong client demand for
more tactical, fast turnaround projects across all geographies
o Custom Research revenue increased by 2% (12% from
underlying(1) business) to GBP65.6m, as the planned closure of the
Kurdistan operations was offset by stellar performance in the
US
-- Broad-based growth across all geographies, with the US and
Mainland Europe continuing to perform exceptionally well on the
back of large contract wins
-- Number of investments made during the year to drive growth:
o I ncreased investment of GBP9.4m (FY20: GBP8.6m) towards the
development of our technology and tools that will drive future
growth
o Launched several new products throughout the year including
YouGov Safe, our fully opt-in, GDPR & CCPA(3) compliant data
marketplace
o Significant investment of GBP11.7m (FY20: GBP8.9m) in the
expansion of our panel into 15 new markets resulting in the number
of registered members growing 53% to 17.5m
o Continued to invest prudently in new geographies to expand our
regional capabilities and better serve global clients by
establishing our presence in Latin America via commencement of
operations in Brazil
o Completed several bolt-on acquisitions such as Open Banking
start-up Lean App and research and data insights companies in
Turkey, Australia and Canada
Post-period highlights
-- Acquisition of the UK-based ad tech company, Rezonence, as we
continue to enhance our ethical activation capabilities and expand
our potential reach
-- Successful completion of the first phase of the development
of the YouGov Platform, including the unification of our Direct
member base with the traditional YouGov panel and rollout of our
new member app
Outlook
-- Encouraging start to the new financial year, with a healthy
sales pipeline and continued strong momentum
-- Investment in our panel, technology and platforms to continue, albeit in line with FY21
-- Trading in the current year has started in line with the Board's expectations
Stephan Shakespeare, Chief Executive, said:
"We are pleased to end this financial year in line with our
expectations, demonstrating sustained growth despite the continuing
disruption caused by the pandemic. This is testament to the
resilience of our business model, the hard work of our people and
heightened demand for YouGov's tailored solutions, providing
valuable opinions and consumer insights to help our clients make
informed decisions.
"YouGov also continues to demonstrate momentum on the stated
strategy as we enter the third year of our second long-term
strategic growth plan. We believe that the investments we made in
the first half of our plan have placed us in a strong position for
the final two years.
"We have started off the new financial year well. We expect
current positive trends to continue in the coming months which
gives us confidence for the future."
Enquiries:
YouGov plc
Stephan Shakespeare / Alex McIntosh / Hannah 020 7012
Jethwani 6000
FTI Consulting 020 3727
Charles Palmer / Elena Kalinskaya 1000
Numis Securities Limited (NOMAD and Joint
broker) 020 7260
Nick Westlake / Hugo Rubinstein / Matt Lewis 1000
Berenberg (Joint Broker) 020 3207
Mark Whitmore / Marie Moy / Alix Mecklenburg-Solodkoff 7800
Operational Review
We are proud to deliver another year of strong growth for
YouGov. Despite the ongoing pandemic throughout the year, we were
able to continue to achieve underlying(1) growth in line with
pre-pandemic levels. YouGov reported revenue of GBP169. 0m, up 11%
and adjusted operating profit(2) of GBP25.5m, up 17%. Our strong
performance was driven by ongoing demand for our syndicated data
products, solid uptake of our fast-turnaround survey services, and
large client wins utilising our connected data research
solutions.
We continue to see strong renewal rates for our subscription
products and have successfully reorganised our sales structure to
ensure we are able to capitalise on the cross-sell opportunities
that will support our long-term growth.
The key drivers of our robust performance include:
-- Our resilient business model: Our ability to meet clients'
research needs despite the uncertainties caused by the pandemic has
helped strengthen our existing client relationships and expand our
client base.
-- Our global expansion: Expanding our reach into 15 new markets
has given us the required scale to target long-term, strategic
projects with large, multi-national accounts.
-- Our sector expertise: The recruitment of several new sector
heads with deep knowledge of their respective industries has
allowed us to enhance the YouGov Cube with sector-specific data and
win new clients.
-- Our global infrastructure : Furthering the use of our Centres
of Excellence has enabled us to realise operational efficiencies
and manage our cost base more effectively.
As the data analytics and market research industry continues its
shift towards the increased use of technology, we are advancing our
technological capabilities to ensure we remain ahead of the market.
As part of this, we continued the evolution of our product suite by
bringing all our products and services under the umbrella of a
unified YouGov Platform. Once fully rolled out, this will allow
clients to seamlessly move between our data products, run research
surveys, analyse the findings, view custom trackers and conduct
marketing activation, all within a single sign-on platform.
Current trading and outlook
Strong trading momentum has continued across all our divisions
in the new financial year, giving us confidence in our strategy.
This momentum is supported by positive market trends and a healthy
sales pipeline.
We believe the investments we have made this financial year have
put us in a strong position and we are now focussed on monetising
those investments. Given the strength of our business model, strong
cash balances and no debt, we will continue to invest prudently
where necessary but expect capital expenditures to stabilise going
forward.
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 Review
Total Group revenue in the period rose to GBP169.0m, compared to
GBP152.4m in the 12 months to 31 July 2020, driven by all three
reporting divisions and all geographies on an underlying(1) basis.
Growth was 18% on an underlying(1) basis compared to the prior
period (but 11% in reported terms due to the planned closure of the
Kurdistan business and the appreciation of the UK Sterling against
the US Dollar).
Performance by division
YouGov's lines of business fall into three divisions: Data
Products, Data Services and Custom Research.
Data Products
Our syndicated data products suite includes YouGov BrandIndex
and YouGov Profiles as well as newer sector-specific modules.
While the performance of our Data Products division was off to a
slower start at the beginning of the year due to a shift in the
sales structure, it has recovered well in the second half of the
year. Revenue from Data Products increased by 13% (18% growth in
underlying (1) terms) in the period. The adjusted operating profit
(2) from Data Products increased by 8% to GBP19.4m and the adjusted
operating margin declined slightly to 33%.
Geographically, the US remains the largest Data Products market
and grew by 10% in the period (18% from the underlying (1)
business). Mainland Europe saw considerable revenue growth of 30%
on the back of recent client wins, while the UK was more subdued at
9% growth.
Data Services
Our Data Services division consists of our fast-turnaround
research services, including our market-leading YouGov Omnibus
(known as YouGov RealTime in the UK and US).
Revenue from Data Services increased by 20% (22% in
underlying(1) terms) to GBP45.5m, as the division has capitalised
on strong client demand for tactical PR work throughout the year.
This revenue growth was broad-based across all geographies,
including a 25% increase in reported revenue in the US (35%
increase in underlying(1) terms), and a 18% increase in the UK,
where YouGov RealTime is the market leader. Mainland Europe, the
largest market for the division, also saw strong performance with
22% reported growth for the period.
The division's robust performance led to a 26% growth in
adjusted operating profit and the operating margin increased from
18% to 19%, benefitting from operating leverage.
Custom Research
Our Custom Research division includes tailored research projects
and tracking studies.
During the period, the division's revenue grew by 2% in reported
terms and by 12% in underlying(1) terms to GBP65.6m. The adjusted
operating profit(2) increased by 9% to GBP13.6m and the operating
margin expanded to 21%, despite the closure of the Kurdistan
business.
The reported performance of the Custom Research division was
impacted by the expected closure of operations in Kurdistan
resulting in a GBP4.3m reduction in revenue in the Middle East. In
the UK, revenue increased by 8% to GBP23.9m, while the US saw solid
performance, helped in part by the US election, recording 17%
growth (24% increase in underlying(1) terms) to GBP38.6m.
Revenue Year to Year to Revenue Underlying
(unaudited) 31 July 31 July growth (1) revenue
2021 2020 % change
GBPm GBPm %
---------------------- --------- --------- -------- -------------
Data Products 58.0 51.3 13% 18%
--------- --------- -------- -------------
Data Services 45.5 37.8 20% 22%
--------- --------- -------- -------------
Custom Research 65. 6 64.6 2% 12%
--------- --------- -------- -------------
Intra-Group revenues (0.1) (1.3) - -
--------- --------- -------- -------------
Group 169.0 152.4 11% 18%
--------- --------- -------- -------------
Adjusted Operating Year to Year to Operating Operating Margin
Profit (2) %
(unaudited) 31 July 31 July Profit
2021 2020 growth
GBPm GBPm %
Year to Year to
31 July 31 July
2021 2020
--------- ---------
Data Products 19.4 18.0 8% 33% 35%
--------- --------- ---------- --------- ---------
Data Services 8.8 7.0 26% 19% 18%
--------- --------- ---------- --------- ---------
Custom Research 13.6 12.5 9% 21% 20%
--------- --------- ---------- --------- ---------
Central costs (16.3) (15.7) 4% - -
--------- --------- ---------- --------- ---------
Group 25.5 21.8 17% 15% 14%
--------- --------- ---------- --------- ---------
Performance by geography
YouGov's geographic footprint spans the UK, Mainland Europe, the
Americas, Asia Pacific and the Middle East.
Revenue Year to Year to Revenue Underlying
(unaudited) 31 July 31 July growth (1)
2021 2020 % revenue
GBPm GBPm change %
UK 52.1 47.2 10% 10%
--------- --------- -------- -----------
Americas 74.8 64.8 15% 23%
--------- --------- -------- -----------
Mainland Europe 30. 6 24.3 26% 25%
--------- --------- -------- -----------
Middle East 4. 9 8.8 (44%) 11%
--------- --------- -------- -----------
Asia Pacific 14.0 12.5 12% 15%
--------- --------- -------- -----------
Intra-Group revenues (7.4) (5.2) - -
--------- --------- -------- -----------
Group 169.0 152.4 11% 18%
--------- --------- -------- -----------
Adjusted Operating Year to Year to Operating Operating Margin
Profit (2) %
(unaudited) 31 July 31 Jul Profit
2021 growth
GBPm 2020 %
GBPm
--------------------
Year to Year to
31 July 31 July
2021 2020
--------- ---------
UK 16. 6 15.4 8% 32% 33%
--------- -------- ---------- --------- ---------
Americas 23. 0 19.0 21% 31% 29%
--------- -------- ---------- --------- ---------
Mainland Europe 3.2 2.2 45% 10% 9%
--------- -------- ---------- --------- ---------
Middle East 0. 4 1.9 ( 79%) 8% 22%
--------- -------- ---------- --------- ---------
Asia Pacific (0.1) 0.3 - (1%) 2%
--------- -------- ---------- --------- ---------
Central costs (17. 6) (17.0) 4% - -
--------- -------- ---------- --------- ---------
Group 25.5 21.8 17% 15% 14%
--------- -------- ---------- --------- ---------
Panel development by geography
We continued to invest in our consumer panel, undertaking the
largest simultaneous expansion of the panel into 15 new markets
across Europe, South America, the Middle East and North Africa
during the year. This was largely on the back of client demand and
provides the Group with the global reach required to win large,
multi-national accounts. As at 31 July 2021, the total number of
registered panellists had increased to 17.5 million, compared to
11.5 million at 31 July 2020, as set out in the table below.
Region Panel size Panel size Change
at at %
31 July 2021 31 July 2020
millions millions
UK 2.50 1.83 37%
-------------- -------------- -------
Americas 6.35 4.21 51%
-------------- -------------- -------
Mainland Europe 3.64 1.92 90%
-------------- -------------- -------
MENA 2.18 1.58 38%
-------------- -------------- -------
Asia Pacific 2.81 1.92 46%
-------------- -------------- -------
Total 17.48 11.46 53%
-------------- -------------- -------
Adjusted operating margins and organic growth
Gross margins remained stable at 84%, as higher operational
leverage from the Data Products division was offset by higher
contribution from our lower-margin Data Services business.
Group operating costs (excluding separately reported items) of
GBP117.3m (FY20: GBP107.2m) increased by 9% in reported terms.
Adjusted operating profit(2) increased by 17% to GBP25.5m,
representing an improvement in the adjusted operating margin to
15.1% (FY20: 14.3%), despite the impact of the Kurdistan business
closure.
Underlying (1) operating profit (excluding FX, acquisitions and
Kurdistan impacts) increased to GBP27.1m, representing growth of
32% over the prior year period. Underlying (1) operating profit
margin has increased from 14% in FY20 to 16% in FY21. The statutory
operating profit increased to GBP19.0m (FY20: GBP15.2m), after
charging other separately reported items of GBP6.5m (FY20:
GBP6.6m).
Reconciliation of non-IFRS Year to Year to
Measures 31 July 2021 31 July 2020
(unaudited) GBPm GBPm
Underlying(1) operating
profit 27.1 20.5
---------------------- ---------------------------
FX impact (1.1) -
---------------------- ---------------------------
Acquisitions 0.1 -
---------------------- ---------------------------
Kurdistan closure (0.6) 1.3
---------------------- ---------------------------
Adjusted operating profit(2) 25.5 21.8
---------------------- ---------------------------
Separately reported items (6.5) (6.6)
---------------------- ---------------------------
Statutory operating profit 19.0 15.2
---------------------- ---------------------------
1 Defined as growth in business excluding impact of current and
prior period acquisitions, Kurdistan business closure, and movement
in exchange rates.
2 Defined in the explanation of non-IFRS measures below.
Amortisation of intangible assets
In the 12 months to 31 July 2021, amortisation charges for
intangible assets of GBP15.3m were GBP4.6m higher than the previous
year. Amortisation of the consumer panel increased by GBP2.9m to
GBP7.1m, reflecting the increased investment made in the year to
expand the geographic reach of our panel. Amortisation of software
increased by GBP1.9m to GBP7.9m. GBP4.9m (FY20: GBP4.9m) of the
total software development charge related to assets created through
the Group's own internal development activities, GBP0.6m (FY20:
GBP0.3m) related to separately acquired assets and GBP2.4m (FY20:
GBP0.8m) was for amortisation on assets acquired through business
combinations.
Separately reported items
Separately reported Year to Year to
items 31 July 31 July
(unaudited) 2021 GBPm 2020 GBPm
Goodwill impairment - 2.1
----------- -----------
Acquisition-related costs 6.5 4.5
----------- -----------
Total separately reported
items 6.5 6.6
----------- -----------
Acquisition-related costs in the period comprise GBP6.5m of
contingent consideration treated as staff costs in respect of the
acquisitions of SMG Insight Limited, InConversation Media Limited,
Portent.io Limited, Charlton Insights Inc., Lean App Limited and
Faster Horses Pty Limited, and GBP0.3m of transactions costs in
respect of the newly acquired entities, offset by GBP0.3m income
from insurance rebate for SMG
Insight Limited litigation costs.
Impairment of goodwill in the prior year is in respect of the
Nordic business.
Acquisition-related costs in the prior year comprise GBP3.7m of
contingent consideration treated as staff costs in respect of the
acquisitions of Galaxy Research Pty Limited, SMG Insight Limited,
InConversation Media Limited and Portent.io Limited, a decrease of
GBP0.1m in contingent transaction costs in respect of Portent.io
Limited, a GBP0.2m increase in SMG consideration and a GBP0.7m
reduction in the fair value of the acquired SMG Insight Limited net
assets.
Capital expenditure and technology investment
The Group invested GBP7.8m (FY20: GBP7.9m) in the continuing
development of our technology platform and increased the investment
in panel recruitment to GBP11.7m (FY20: GBP8.9m) for the year to
support continued global expansion. The geographic footprint of our
panel was broadened as new panels were established in 15 new
markets, mainly in Europe and Latin America, to meet the research
needs of our multi-national clients. Our investment in technology
continued across three main areas: websites and mobile applications
GBP1.1m, survey systems GBP1.9m, and GBP2.9m on our Crunch data
analytics tool. GBP1.6m (FY20: GBP0.7m) was also invested on
separately-acquired software tools. In addition GBP1.2m (FY20:
GBP1.1m) was spent on the purchase of property, plant and
equipment, resulting in a total investment in fixed assets of
GBP23.8m (FY20: GBP18.6m).
Total expenditure on intangible assets and property, plant and
equipment is shown below:
Capital expenditure 31 July 31 July
(unaudited) 2021 2020
GBPm GBPm
Software development 9.4 8. 6
-------- --------
Panel recruitment 11.7 8.9
-------- --------
Other intangible assets 1.5 -
-------- --------
Total expenditure on intangible assets 22.6 17.5
-------- --------
Purchase of property, plant and equipment 1.2 1.1
-------- --------
Total capital expenditure 23.8 18.6
-------- --------
Currency
The Group's results were affected by the net appreciation of the
UK Sterling, as its average exchange rate was 8% higher against the
US Dollar in this period than in the 12 months to 31 July 2020.
Movement against the Euro was effectively flat for the period. The
net impact of foreign exchange on the Group's adjusted operating
profit(2) was a decrease of GBP1.1m compared to calculation in
constant currency terms.
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.
Explanation of non-IFRS measures
Financial measure How we define it Why we use it
Separately reported Items that in the Directors' Provides a more comparable
items judgement are one-off or basis to assess the
need to be disclosed separately year-to-year operational
by virtue of their size business performance
or incidence
--------------------------------- ---------------------------
Adjusted operating Operating profit excluding
profit separately reported items
--------------------------------- ---------------------------
Adjusted operating Adjusted operating profit
profit margin expressed as a percentage
of revenue
---------------------------------
Underlying growth Growth in business excluding
impact of current and prior
period acquisitions and
business closures, and
movement in exchange rates.
--------------------------------- ---------------------------
Forward looking statements
Certain statements in this financial 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.
About YouGov
YouGov is an international research and data analytics
group.
Our mission is to supply a continuous stream of accurate data
into what the world thinks, so that organisations can better serve
the communities that sustain them.
Our over 17 million registered members provide us with a highly
engaged proprietary panel that delivers thousands of data points on
consumer opinions, attitudes and behaviour on a daily basis. We
combine this continuous stream of data with our research expertise
to provide insights that enable intelligent decision-making and
informed conversations.
YouGov's integrated suite of products, services and tools
operates as a systematic platform serving YouGov data and
intelligence for all stages of the marketing workflow. Our
ground-breaking syndicated Data Products include the daily brand
perception tracker, YouGov BrandIndex, and the media planning and
segmentation tool, YouGov Profiles. Data Services comprises our
market-leading YouGov RealTime service which provides a fast and
cost-effective solution for reaching nationally representative and
specialist samples. YouGov's Custom Research division offers a wide
range of quantitative and qualitative research, tailored by sector
specialist teams to meet clients' specific requirements.
With operations in the UK, the Americas, Europe, the Middle
East, India and Asia Pacific, YouGov has one of the world's largest
research networks.
YouGov
Best panel
Best data
Best tools
For further information visit yougov.com.
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