S4 Capital : Annual Report and Accounts

S4Capital plc

Annual Report and Accounts 2022

Our mission

By winning

we can win the decade

…through building a unified, purely digital advertising and marketing services business, which disrupts analogue models by embracing content, data&digital media and technology services in an always-on24-7 environment, for global, multinational, regional and local clients and for millennial-driven influencer brands.

www.s4capital.com/annualreport22

In this report

Our business

0	02	Financial highlights
04	Business model
06	What's happening, NOW
1	Strategic Report
11	Letter to shareowners
14	Progress against our strategy
16	Measuring success: Key Performance Indicators
17	Financial review
		24	Principal risks and uncertainties
		Pages 65-70 also form part of the Strategic Report
2	Industry outlook and ESG reports
30	Our world now
	By Sir Martin Sorrell
37	ESG: Our sustainability commitments
40	TCFD Report
		48	Material impact and our stakeholders
		50	Zero Impact Workspaces
		55	Sustainable Work
		57	Diversity, Equity and Inclusion
		62	ESG stories
		65	Non-financial information statement
		66	Section 172 statement
3	Governance Report
72	Corporate governance statement of compliance
74	Leadership: Board of Directors
78	Executive Chairman's statement
80	The role of the Board
		89	Audit and Risk Committee Report
		94	Nomination and Remuneration Committee Report
		99	Remuneration Report
		117	Directors' Report
4	Financial statements
122	Independent Auditors' Report
134	Consolidated statement of profit or loss
135	Consolidated statement of comprehensive income
136	Consolidated balance sheet
		137	Consolidated statement of changes in equity
		138	Consolidated statement of cash flows
		139	Notes to the consolidated financial statements
		194	Company financial statements
		201	Appendix: Alternative Performance Measures
		206	Shareowner information
			S4Capital plc Annual Report and Accounts 2022	1

Our business

Financial highlights

Billings1

£1.9bn

+45.8%

Like-for-like2 +23.5%

Revenue

£1,069.5m

+55.8%

Like-for-like +24.3%

Net revenue

£891.7m

+59.1%

Like-for-like +25.9%

Operational EBITDA4

£124.2m

+23.0%

Like-for-like-16.4%

Operational EBITDA margin5

13.9%

-410bps

Like-for-like-710bps

Operating loss

-£135.3m

2021 -£42.1m

Pro-forma3 billings

£1.9bn

+24.3%

Pro-forma revenue

£1,108.7m

+25.8%

Pro-forma net revenue

£924.1m

+27.1%

Pro-forma operational EBITDA

£136.3m

-11.8%

Pro-forma operational EBITDA margin

14.7%

-650bps

Adjusted operating profit6

£114.1m

+20.4%

Like-for-like-19.5%

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Loss before income tax

-£159.7m

2021 -£55.7m

Basic loss per share

-27.0p

2021 -10.3p

Market capitalisation at 12 April 2023

£911m

Adjusted result before income tax7

£89.7m

+10.5%

Adjusted basic earnings per share

11.8p

2021 13.0p

Share price at 12 April 2023

158.6p

For full reconciliation from statutory to non-GAAP measures, please refer to the Alternative Performance Measures Appendix on page 201.

Notes:

1. Billings is gross billings to clients including pass-through costs.
2. Like-for-likerelates to 2021 being restated to show the unaudited numbers for the previous year of the existing and acquired businesses consolidated for the same months as in 2022 applying currency rates as used in 2022.
3. Pro-formanumbers relate to unaudited full-yearnon-statutory and non-GAAP consolidated results in constant currency as if the S4Capital plc Group (the Group) had existed in full for the year and have been prepared under comparable GAAP with no consolidation eliminations in the pre-acquisition period.
4. Operational EBITDA is EBITDA adjusted for acquisition related expenses, non-recurring items (primarily acquisition payments tied to continued employment, restructuring costs and amortisation of business combination intangible assets) and recurring share-based payments, and includes right-of-use assets depreciation. It is a non-GAAP measure management uses to assess the underlying business performance.
5. Operational EBITDA margin is operational EBITDA as a percentage of net revenue.
6. Adjusted operating profit is operating profit/loss adjusted for non-recurring items (as defined above) and recurring share-based payments.
7. Adjusted result before income tax is profit/loss before income tax adjusted for non-recurring items (as defined above) and recurring share-based payment.

S4Capital plc Annual Report and Accounts 2022

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