FY19 Half Year Results 2 April 2019 Published: Apr 2, 2019

2 April 2019

YouGov plc

Half Year results for the six months to 31 January 2019

Strong earnings growth in line with current five-year plan

Summary of Results

	Unaudited	Unaudited	Change	Audited
	six months	six months	%	full year
	to	to		to
	31 January	31 January		31 July
	2019	2018		2018
	£m	£m		£m
Revenue	66.5	56.3	18%	116.6
Statutory EBITDA	13.2	8.5	55%	20.0
Adjusted Operating Profit1	12.5	8.8	41%	19.7
Adjusted Operating Profit Margin (%)1	19%	16%	3%	17%
Adjusted Profit before Tax1	13.7	10.7	28%	23.3
Adjusted Earnings per Share1	9.6p	7.3p	33%	16.6p
Statutory Operating Profit	8.4	4.4	92%	11.8
Statutory Profit before Tax	8.3	4.5	85%	11.8
Statutory Earnings per Share	5.4p	2.2p	142%	7.7p

Financial highlights

∙Revenue growth of 18% (2018: 10%) - Underlying business2 growth of 10%

∙Adjusted operating profit1 up by 41% to £12.5m - 35% underlying business2 growth

∙Adjusted profit before tax1 up by 28% to £13.7m

∙Adjusted earnings per share1 up by 33% to 9.6p (2018: 7.3p)

∙Adjusted operating profit margin1 up 3 percentage points to 19%

∙Statutory operating profit up 92% to £8.4m

∙Net cash balances of £25.0m (31 January 2018: £21.3m)

Operational highlights

∙Data Products & Services revenue up by 34% to £37.2m (17% from underlying business2); now representing 54% of total (2018: 49%)

o Data Products revenue increased by 35% (26% from underlying business2) to £19.4m o Data Services revenue increased by 33% (9% from underlying business2) to £17.8m

∙Custom Research revenue increased by 4% to £30.4m; continued strategic focus on higher margin work resulting in a 15% increase in operating profit to £7.9m

∙US remains the largest driver with adjusted operating profit1 increasing by 15% to £9.1m

Long-term targets

Setting out ambitious prospective LTIP targets to incentivise senior management through to 2023:

∙Double group revenue

∙Double group adjusted operating profit margin3

∙Achieve an adjusted earnings per share3 compound annual growth rate in excess of 30%

1 Defined in the explanation of non-IFRS measures on page 13.

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

3 In future we intend to amend our definition of adjusted operating profit to include amortisation of intangible assets charged to operating expenses, as explained on page 8.

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Commenting on the results, Stephan Shakespeare, Chief Executive, said:

"In the final year of our current five-year growth plan we are continuing to deliver revenue and earnings growth ahead of the market. Our syndicated data model has broken new ground in the industry, and as we announce targets for our next five-year plan, we are no less ambitious. Our aim is to deliver the best tools and the best data for our clients. Our new plan focuses on three strategic pillars to deliver on that goal: activating our data to create targetable audiences, investing in technology to ensure our data is integrated and customisable, and opening up some of our data as a public resource. We believe this will help create a universal data platform for our clients, as we look to fulfil our ambition of becoming the world's leading supplier of proprietary panel data."

Enquiries:
YouGov plc
Stephan Shakespeare / Alex McIntosh	020 7012 6000
FTI Consulting
Charles Palmer / Harry Staight	020 3727 1000
Numis Securities Limited (NOMAD and broker)
Nick Westlake / Matt Lewis	020 7260 1000

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Chief Executive Officer's Review

We are pleased to report that in the six months to 31 January 2019, YouGov has continued to achieve strong organic revenue growth, combined with further notable improvements in profit margins, and therefore growth in profitability well ahead of the market1.

This continued strong performance is the result of three key factors: we have a scalable syndicated data model at the leading edge of change; the acquisitions we made last financial year that expanded our geographic reach and industry expertise, in Australia and the sports sector respectively, are having a positive impact; and we continue to grow our position in key strategic markets, becoming more visible in the US and increasing the number and scale of our clients.

The market in which we operate is undergoing significant developments, and there are a number of key dynamics which simultaneously present challenges and opportunity, including:

∙Data privacy and security - the scope for creating huge value from personal data requires new levels of trust between companies and data subjects;

∙Automation - technology is the biggest driver of innovation and efficiency but there is great competition for talent in this area; and

∙The globalisation of marketing - geographies such as Asia Pacific and Latin America present

new opportunity but can be tricky to navigate.

YouGov is focused more than ever on innovation and in three areas in particular: trust around sharing data; self-service and automation; and adapting our data products for various markets. We remain focused on capitalising on all three drivers as we execute our next five-year growth plan.

New growth plan

In 2014 we unveiled our first five-year growth plan for improving profitability. The five-year target forced us to make hard decisions about strategy and structure and drove us to innovate boldly. The plan focused on growing our Data Products and Services which have operational leverage. Our investment in technology and products during the last five years has created a platform for scalable profit generation and has enabled our business to consistently deliver results ahead of the market. It is from this position of strength that we will begin to execute our new growth strategy.

We now have a diverse customer base within three main groups - media owners, agencies and brands

-and our biggest customers are some of the most advanced practitioners in data science. There remains a significant market to target: global spend in market research was $46b in 20172 and we are still only a small speck in that universe.

Our first five-year plan created a reinvigorated sense of discipline and focus and, as we recently shared at our Capital Markets Day in February 2019 (see the presentation on our website at yougov.co.uk/about/investors/presentations), we have already started on a new five-year plan. This financial year is an 'overlap' year, designed to avoid a cliff-edge of motivation and investment, and the plan reaches completion in 2023. The underlying strategy that drives our new growth plan is defined by the mantra: "the best data, the best tools".

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Our new growth plan builds on the market leading position we have built through our highly engaged proprietary panel; the richness, relevance and connectedness of the data in the YouGov Cube; the power of our analytics platform, Crunch; and the accuracy of our ground-breaking methodologies. Taking YouGov to the next stage of its development and growth, the plan focuses on three strategic pillars: Integration, Activation and Public Data.

Three strategic pillars

Integration

Our first five-year plan saw us significantly driving up margins in our Custom Research division by focusing on the more profitable areas of custom research and aligning it with our syndicated data solutions and technology. Leveraging the existing data we hold in the YouGov Cube has allowed us to minimise the proactive data collection required for each new custom project, while at the same time provide our clients with more connected and tailored data than ever before. We now deliver all custom research projects through Crunch, hugely reducing the manual labour involved in preparing custom reporting for clients while, at the same time, providing our clients with the benefit of greater control over their data analysis.

This engineered approach has transformed our research services. The next stage of this transformation is integration and adaptation to custom needs. By allowing our model to be adapted to the specific needs of individual organisations, we create new connected data propositions that not only provide new revenue opportunities, but also further extend the utility of YouGov data subscriptions particularly for clients whose precise needs are not met through more traditional syndicated data sets.

Our connected data infrastructure allows us to deliver customisation for clients. For example, our services now include custom trackers layered on syndicated data; integrated analysis of Cube data with client data using the Crunch platform; the fielding of bespoke client questions in syndicated data collection followed by re-contact surveys; and our new collaboration tool, Collaborate, which gives clients hands-on involvement in survey design.

Our connected data propositions also include audience verification and campaign effectiveness solutions. These are enabled by tagging digital campaigns and collecting 'ad exposure data' from which we can then use our syndicated data to confirm to advertisers which audiences their campaigns reached and by using custom surveys to reveal what impact they had. Added to this, our Audience Data solution provides the final piece in the marketing workflow. Brands and agencies have long used our syndicated data to allow them to plan and track campaigns. YouGov Audience Data takes this to the next level and permits them to find, target and activate their audiences through digital advertising channels.

We see the opportunity for generating additional value being boosted by further investment in our technology. By continuing to develop such integrated products and tools, we are creating a single platform that will bring together syndicated data, customised syndicated data analysis, custom research projects, self-servicere-contact studies, targeting and activation, and more.

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Activation

Conventionally, research is used to understand markets and plan campaigns, while activation - using data to create targetable audiences for advertisers - is viewed as a separate process. Over the last year we developed the YouGov Audience Data solution, which allows advertisers to buy scaled 'look- a-like' audiences based on the characteristics of YouGov panellists. This marked the initial step in bringing together research and activation.

We are now further breaking down the barrier between the two with YouGov Direct. With this new platform, YouGov panellists make their opinion data available for in-depth, targeted research, which can be done outside of a pure research context and within a marketing and sales context. The data can be used in this way because panellists have permissioned each specific use with the security of accountability enabled through the YouGov blockchain encryption process. This means, with YouGov Direct, researchers and marketers have the unique opportunity to:

∙Reach precise target audiences using the most accurate and up-to-date data;

∙Significantly upgrade their existing research-based advertising tests with a business outcome orientated solution; and

∙Create a seamless single audience view, from planning through to campaign execution and measurement.

YouGov Direct has undergone successful pilots with encouraging feedback and outputs in the first half, and we expect it to be launched by the end of the current financial year.

Public Data

We create more data specifically for public value than any other research company. This will be enhanced in two ways: first, we are adding more trackers and daily polling, not only in politics but across a broad range of social and cultural trends; second, we are creating better tools for the public to access and explore that data. We believe this generates important social value, in turn further increasing public and panel engagement in our work; and very importantly, this showcases much of our commercial data at a top-line level, acting as an entry point for digital sales of our commercial offer.

Our first significant initiative in this area is YouGov Ratings, launched on our UK website in November 2018. Ratings is our new popularity and awareness metric for thousands of entities - including celebrities, politicians, sports teams, music acts and brands - available for free on our website. Ratings forms part of our Public Data strategy to build a destination site (a 'Wikipedia of Opinion'). This site will help to increase our presence across the web, put YouGov at the heart of everyday conversations and drive panel engagement.

Centres for excellence - a new model for scale

We are continuing to enhance our scalability by investing in Centres of Excellence that will deliver operations and client services across the globe, 24/7. We have successfully leveraged the Centres of Excellence model to reduce our absolute spend on Data Operations over the last five years, while at the same time more than halving our spend in this area as a percentage of group revenue. Areas we

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