Ebiquity plc (EBQ) Earnings Call Transcript & Summary

Good morning, and welcome to the Ebiquity plc Investor presentation. [Operator Instructions] The company may not be in a position to answer every question received in the meeting itself. However, the company will review all questions today and publish responses when it's appropriate to do so. Before we begin, I'd like to set the following. And I'd now like to hand over to Nick Waters, CEO. Good morning to you.

Great. Thank you, and good morning to everybody. I'm very pleased to introduce the half year results for Ebiquity until 30th of June this year. Perhaps I will start by introducing myself and my co-speaker Alan. For those of you who don't know me, I've been with Ebiquity for 2 years, now just over 2 years. Prior to that, I spent my career with agencies. I spent 18 years at [ WPP ], and then 10 years with Aegis, which became Dentsu Aegis Group. Alan is very capable of introducing himself.

Thanks, Nick. I'm Alan Newman, and I am being the Chief Financial Operating Officer with Ebiquity since January 2019. So just over 3 years. And before that, I was the CFO of YouGov. So I've spent kind of in my career working as -- on the board and running media-related companies. I'm also, was prior to that, in -- probably worked as a consultant working in the media industry at Partner KPMG. So kind of have experienced what it's like to actually go and sell to clients.

Thank you, Alan. So we've had a broad-based positive performance in the first half of the year, both around the world and by segment of our business. It's been driven largely by the media performance service line, which includes the newly acquired companies. We made 3 acquisitions in the first half of the year. We'll talk a little bit more about those later in the presentation. We've also seen continued high revenue growth from our digital video solutions. A various number of factors have contributed to a significant improvement in our operating margin. We'll talk about those a little bit later during the presentation as well, and we expect our full year results to be in line with market expectations. So I'll pass to Alan now to talk through the numbers before I come back.

Thank you, Nick. So overall, our revenue in the first half of this year was GBP 37 million, which was a total growth of 16%. Within that, we have the benefit of the acquisitions. We made 3 acquisitions in the year, 2 large ones completed in April. And without -- excluding those, we achieved organic growth of 7% from our existing business in the period. We managed to reduce maintaining the operating expense growth well below revenue growth. And we see, in overall terms, 8% growth in our operating expenses. And, again, referring to the existing business, its expenses grew by 4%. So just really in line with inflation, supporting a much higher revenue growth. And that gearing effect of like and being able to manage our costs and grow revenue faster than cost is really what's contributed to an underlying operating profit increase of 117%, so doubling of our underlying operating profit in the period compared to the same period last year. And we've said very clearly, our aim has been to improve operating margins over the medium term. And these results really show a really good step along the road seeing our operating margin growing from 7%, nearly doubling to 13% in the period. With relatively stable finance costs in the first half, this spread through to underlying profit before tax and to earnings per share, which doubled in the period compared to last year. We put on this slide just to remind you the highlighted items partly because we have an acquisition, which will be paying contingency direction on next year digital decisions. And we're having to account for that cost and the contingent consideration as a P&L item because the vendors have to stay in business until it's paid. And we had some acquisition costs. We've also announced that we're reviewing our Russian operation in the -- given the fact of the Ukraine invasion, and on the fact that sanctions will be imposed on some Russian institutes. So our operation Russia is self-contained. It just only serves Russia, but we are reviewing it and aiming to divest it in the interim period whilst assisting to get that done, we have impaired the assets sort of the charge impairment for that Russian business. Looking at our balance sheet, quite a lot going on the balance sheet. Firstly, because of the growth in the business due to the acquisitions, our net assets increased, nearly doubled from GBP 23 million to GBP 42 million. Within that, our goodwill in the balance sheet increased, again, directly reflecting the acquisitions. We also had an increase in working capital in the period through a combination of factors. So the working capital grew from GBP 4 million to GBP 12 million, so effectively an out flow. That was partly because of phasing -- of existing business projects, was later in the period than compared to previous year. So we're accruing the income for those before we can actually build that revenue. And we also had an increase in debt as we're in the process of moving our clients within our American business that we acquired MMI onto Ebiquity terms and contracts that took some time with clients taking time to process the paperwork as it work for that. So debtor days increased to 81 days compared to 60, but we expect that to be coming down quite fast in the second half of the year and returning back to normal and that towards by the year-end. Another aspect in the balance sheet is at first generation. I've just referenced digital decisions. At the moment, we're expecting the payout for that to be about GBP 14 million in May -- April, May 2023, once our '22 accounts are approved, and we're accruing that through the period of the post the acquisition until the end of this year. So we've include 5, 6 of that, which makes GBP 11.4 million. We've also have, for the first time, started to recognize the fact we have strategic consideration for MMI. But as I said, we bought in April. There is an earn-out due for the vendor based on the 1x the EBIT, that is the underlying operating profit for 2024 of our entire American business. So they incentivized to help us improve profitability of our existing business as well as the MMI segment. And the 2 businesses, as I've already said, being have already been merged and will be operating as a single entity. And we've estimated that payment to be GBP 2 million, which is due in 2025. Our net debt has increased in part because of the acquisitions and in part because of the working capital as I've already mentioned. And that's still up from GBP 4.8 million, GBP [ 12.9 ] million at the half year. Now it's normal that our half year cash is lower than our year-end cash and where debt goes up. And as you can see in the next slide of cash flow, at the bottom of that, our cash balance of GBP 9.3 million, actually eventually turns out to be exactly the same as it was in June 2021. Those are few moving parts as how we got there. Firstly we had cash generated from operations, an outflow of GBP 3.4 million, of which GBP 1.6 million is our operating business and the other is due to the highlighted items. And then we've also had significant investing activities, as I've mentioned, acquisition. So we spent GBP 16.5 million on the -- for the acquisitions of Forde and Semple, MMI and Media Path. Just breaking that down a little bit MMI, it's about GBP 8 million in Media Path. In total Media Path 50, but some of that was funded through issue of shares to the vendors, for example, very small acquisition, only GBP 1 million. The financing on the other hand, we received a net GBP 14.4 million proceeds from the equity issue that we undertook in May, replacing to fund the acquisitions, and we also increased our bank borrowings by GBP 4.5 million in part to fund the acquisitions. And we've also had lease IFRS 16, in the lease payments that come and go out. Looking then our debts, really explain here the progression of our net debt and our cash balances so that people understand, as I mentioned, the movement. So we tend to go up a little bit in the midyear and then come back down the full year. So you can see that our net bank debt was GBP 9.6 million in June '21, went down GBP 4.8 million in December, has come back up again in June and is already by the end of August coming down as we collect the -- from the invoices we've issued just before the period end. So we've already touched GBP 2.4 million in the 2 months to the end of August, that will bring us net debt down and towards the level we expect it to be by the year-end to, as I already said, be lower than at the end of June. So I hope that -- sorry, and then looking at our business, we, the moment, published a segmental analysis, which distinguishes in our media business, which is now by far the largest and which acquisitions all fall into that category, and therefore, media revenue is up 21% in total, including the acquisitions. And this operating profit increased by 45%, really flowing through from the revenue. But also reflecting a higher margin, and that is a combination of factors. One is that we have -- our digital media solutions are growing well, and they are inherently higher margin than our lot of business. And we also -- the acquisitions themselves both had higher margins, underlying margins in the business -- in our existing business, and they've already begun to contribute to our margins. On the analytics and tech business, which is a lot smaller part of our business, its revenues actually fell by 10%. But as you can see, operating profit increased by 25%, reflecting really a higher-margin project mix, which in itself resulted from active management of our client accounts to make sure that we were beginning to focus on -- focusing much more on projects which make a better margin and actually being more robust in our pricing of projects. And in some cases, we actually turned down work or can't refuse to pay more, and we actually ended up with a higher margin results, the better quality business all around. So I hope that explains a component of financial performance in the period, and hand back to Nick to talk more about our strategy and what's driving our business.

Great. Thank you very much, Alan. I'll give you a progress update. But just to start with a reminder of who we are, we're in business to do. So we exist to help brand owners increase their returns from the media investments, and therefore, improve their business performance. We have 4 elements to the strategy to help achieve those goals in the business. The first is to increase revenue from digital services by developing a range of productized data solutions. The second is to build on our very strong customer base and to build high-value strategic relationships. The third is to improve our operational efficiency, which, as you have seen from the numbers that we shared, we're making good progress against. And the fourth is to strengthen the business in the very important geographic regions of North America and Asia Pacific. And before I get into that, just a brief overview of the market that we operate in. The first half of the year was buoyant to the advertising markets globally. But since then, we've seen some mixed signals emerging, and there's a few data points behind that. In the United States, the month of July saw a 12% drop in advertising expenditure, which is the biggest monthly drop since the pandemic started. But at the same time, there were some positive results reported. So Disney reported a record upfront advertising sales of $9 billion. NBCU also reported strong upfront sales of $7 billion. Here in the U.K., the IPA Bellwether's report for Q2, again, there were mixed signals. The majority of advertisers survey respondents were pessimistic about the near-term future for the companies they work for. But at the same time, the majority of marketers were planning to increase marketing budgets rather than decrease them. You also, I'm sure, be aware of fairly disappointing results from the major tech platforms at the half year mark compared to quite encouraging results from major agency holding companies. So a range of mixed signals. Clearly, there are significant storm clouds on the horizon, both in the wider economy, and therefore, potentially in the advertising market, but I would say they've yet to hit. And certainly, I would think Q4 is largely baked in now. We have seen some reduced agency selection activity this year. That's really because 2021 was an unusually high year, full of pent-up demand from 2020 when advertisers didn't put the business on the pitches. They had other things to worry about during the pandemic. So we're probably back to more normalized levels of agency selection activity. I referenced the disappointing half year results from major tech platforms. I think for the first time, we've seen the duopoly coming under pressure. After that, I think, it's in a stronger position than Meta. The search business remains extremely important, strong, resilient and dominant. YouTube remains a good proposition, whereas Meta, I think we are really starting to see the impact of Apple's introduction of the app tracking transparency solution. I think Zuckerberg said that will impact Meta's advertising revenue by about $10 billion, but we're also seeing weakness in Snap and Twitter and some of the minor players. Great strength from Tiktok starting to eat into the revenues there. We're also seeing a very, very strong flow of advertising dollars in the U.S. into both connected television and commerce media. Commerce media, obviously, everybody is very familiar with Amazon, but other retailers are now starting to aggressively monetize their real estate -- their online real estate. Although that activity is most pronounced in the United States, we will start to see it flow towards this and other markets. Here in the U.K., ITV will launch ITVX in the fourth corner really being the first main street offering for advertising in the connected TV market. We see a risk of the challenges that have played -- open web programmatic market, we see a risk of those flowing into the advanced television market as well. Indeed, we see some of that activity in 1 or 2 countries already. And the final dynamic that is of note is the subscription-funded streaming services now launching ad-funded models quite how that impacts. The market is clearly still to be seen, but we see clearly a lot of complexity in the market, which is challenging for brand owners to navigate, and therefore, supportive for the Ebiquity business. At the end of 2020, we introduced a range of operating metrics by which we would navigate the business, we published progress against them at the end of '21, and you can see those increased numbers there in the middle column. Here at the half year mark, 2022, we went publish the actual numbers, but we will refer to the fact that we're on plan or ahead of plan against each of the metrics, except for that final 1 percentage of revenue derived from the digital media services, we will see a dilution of that owing to the acquisitions we brought in whose businesses were both skewed to the broadcast sector. But we'll come back with the full year '22 results and provide an update on the actual figures. The Digital Media Solutions portfolio remains focus of our product strategy at the moment. We now have 7 productized data-led solutions in market and revenue continues to grow strongly from them. Through 2021, revenue from this business stream grew by 260%, but there was a lower small numbers played that, more robust revenue scale. We're continuing to grow that aggressively with 90%, and importantly, at a strong operating margin over 50%. One of the products we've introduced is the responsible media investment product, which we piloted in the U.S. and the U.K. last year, and that provided sufficient interest to advertisers. We've now rolled that out to further 9 markets. We are working on solutions for the advanced television and commerce media markets, and we aim to bring the first one regarding advanced television to pilot in the U.S. in the fourth quarter of this year. An update on the acquisitions. We made 3 acquisitions in the first half of this year. We described 2 of them that are strategic acquisitions and the third is tactical. Just to recap, Media Management, Inc. was acquired in the United States and the primary strategic rationale for that was simply to acquire scale in the U.S. Compared to the opportunity in the market, we thought we were somewhat underweight. So the acquisition of MMI doubles the size of our business in the U.S., giving us a much greater presence and credibility in that critical advertising market. Media Path Network was also acquired in late April, and the primary strategic rationale for that was the technology platform that it brought to us, a platform called GMP365, which would enable us to run more of our business in a time-efficient manner, reducing human intervention and replacing that with a very strong technology. And third acquisition is small tactical one in Canada to add a little bit more scale to the North American business. Those acquisitions have contributed almost GBP 2 million to underlying operating profit. In the U.S., we've brought those 2 companies together, Ebiquity U.S. and MMI. They're now operating as one merged business. We've captured all the cost synergies we intended to or we aim to in 2022 and we see opportunities to realize more in 2023. The integration of Media Path takes a different form and that was a globally distributed business operating off the technology platform. So our task there is to start transitioning our business and our clients on to the technology platform. And that will take us a number of years. We see a 3-year program really to transition the majority of our business on to platform. But we've already started doing so, and we've won our first new client mandates with the GMP365 platform as part of our service proposition. We've seen some of our existing clients renew, and we are starting to achieve early cost synergies there. We have an exceptionally strong client base. We work with 28 out of the world's top 30 advertisers and more than 70 world's top hundreds. So the challenge or the task there is to increase the value of those client relationships. So we've segmented them into current high-value clients, clients where we see high growth potential and new economy businesses and are adopting key account management strategy based on those segments. We have achieved a number of positive wins in the first half of the year, and I call out a few of them there. Brown and Forman in the U.S. is a brand-new logo, [indiscernible]. And that's pleasing as it shows the improving competitive nature of our U.S. business. Pepsico India, I'm particularly pleased with that we launched our business into India organically in Q3 of last year. India has a really vibrant advertising market, very complex for brand owners to navigate. So we felt that it would be very supportive for our service proposition. And to being appointed by Pepsico, 1 of India's top 10 advertisers and quite possibly a top 5 advertiser I think, is testament to the credibility of our service offering in that market already. Virgin Media-O2 here in the U.K., a very large merger, 2 big businesses, a very competitive tender that we won out in. So very encouraging to see the competitive nature of our business here in the U.K. to secure large client assignments. I called out 2 global agency selection mandates from Jaguar Land Rover and BMW, demonstrating our continued strength and competitiveness in that segment. So our client development strategy continues to progress well. We've referenced the importance of improving our operating margin coming off single digits last year, almost doubling it to 13% this year. There's a number of drivers of that. We have reduced the production costs required to provide our service quite materially. That's a combination of reducing reliance on third-party outsourced providers and also the synergies we've captured primarily in the United States in reducing acquisition costs of third-party data. Essentially both MMI and ourselves were acquiring data from suppliers such as Nielsen. We've been able to merge those contracts and eliminate quite a bit of cost there. That's been coupled with good, strong cost containment on our existing or core equity business, if you like, managing that to just 4% growth in the half year. We've also shifted the mix of our revenue towards higher-margin solutions. I've referenced the digital product solutions. They are growing strongly with a 50%-plus margin. And it was also referenced and improved profitability in our analytics business. If you like being more discerning about revenue and servicing less nonprofitable or low profit revenue, so we've deliberately accepted revenue going backwards in return for a much higher profit contribution. It's also worth noting that both MMI and Media Path were higher-margin businesses than Ebiquity in the first place. So they are both margin accretive and the additional scale brought in has enabled us to leverage our -- of our existing overhead spend. We have -- prior to the acquisitions of MMI and Media Path, we had a media operations center, effectively acting as a scale of delivery center. We've continued to utilize that in more instances, taking work away from higher cost centers and improving our efficiencies and economies of scale there, and we've delivered 37% increase in productive hours served by the operations center. So a range of drivers of the improved margin performance, and we see the opportunity to continue pulling those levers. We've referenced our ambition to scale in strategically important markets. The world's largest advertising market in the United States. The second largest is China. So we have placed a degree of emphasis on increasing the scale of our business in both the U.S. and Asia Pacific. We've referenced already the acquisition of MMI and Ford & Semple, both contributing significantly to the revenue growth in North America, up 90% in the first half of the year, helping us achieve and deliver greater economies of scale for profitable growth in North America. Particularly pleasing though is the rate of organic growth in Asia Pacific. That's our fastest-growing region organically at 38% revenue growth with a strong contribution from China. We've also seen a strong performance in Continental Europe, where organic revenue has grown by 13%. Strong drivers from France, Italy and Spain, and perhaps market where we wouldn't necessarily have expected, double-digit organic growth being a mature market, a highly competitive market and a relatively lower growth market. So that's very encouraging in Continental Europe. So to summarize, the outlook is positive. We expect to see our full year '22 results in line with market expectations. And as the storm clouds on the horizon gather, there is the resilience builds into our business in terms of the service provision. In difficult times, advertisers would be expected to put even more scrutiny on their media investments to understand the efficiency with which they're buying and the effectiveness of the channels that they are buying. Now clearly, there is risk that we are not immune to budget cuts as other line items will be, but there is resilience built into our product and service offering. We must obviously note a degree of caution around inflationary pressures. We won't be immune from them. I think cost of living challenges, particularly for some of our more junior members of staff or lower income members of staff, we will seek to alleviate with some relief payments there. But we do see the opportunity to balance those inflationary cost pressures with some of the operating efficiencies we've already described, and we'll continue to focus on as we go forward. So we do see continued opportunity for both revenue growth and margin enhancement. And we see our business as being well placed for long-term sustained growth. And that concludes the slides, and we are, of course, very happy to take any questions you may have.

Nick, Alan, thank you very much for presentation. [Operator Instructions] As you can see, we received a number of questions throughout today's presentation. If I could just ask you to read out those questions and give responses where it's appropriate to do so. I'll pick up from you at the end.

Certainly, first question from Mark A. Are the acquisitions of Media Management and Media Path are now fully integrated? And what steps did you take to lock in the key personnel? So I think MMI is at a more advanced stage of integration. We have brought the teams together. We have merged the management team, so members of the MMI team have now taken senior positions in the combined management structure. Clients have been novated over on to Ebiquity Inc. contracts. We have, I mentioned earlier, effectively eliminated one of the Nielsen or data supplier contracts. We've now merged those into one contract. We are going to market as a single proposition and seeking to cross-sell both MMI services into Ebiquity clients and vice versa. So I think the integration of that business is very well advanced. The integration of the Media Path business, I mentioned earlier, is different. It will take longer simply because their business model is so different from ours. Effectively a globally distributed business operating off a uniform technology platform, fairly geographically agnostic, whereas Ebiquity is aligned by geography. So the integration process there will take a little bit longer. And some members of that Media Path team have joined senior positions within Ebiquity. And we have embarked on the process of training up Ebiquity members of staff on to the technology platform, the GMP365 platform, creating a joint go-to-market and starting to transition plans on to that. But that is a slower and a slightly more complex process. That's not a surprise. That's exactly as expected, and we continue to work on that from now on certainly through the remainder of next year as well. Another question from Mark A. Where do you see management focus geographically? Will it be the U.S. given the addressable market? And if so, how you look to increase your footprint organically-M&A? Yes, the U.S. remains a major focus for us. As does a specific, I think, realistically, Asia Pacific will be more of an organic story than an acquisition story. As much as I would like to find opportunities to acquire in Asia Pacific, I think companies that would be relevant -- strategically relevant for us to acquire are less obvious in that market. We do believe there will be opportunities to acquire in the United States. Now might not be the best time to do it for a couple of reasons. Firstly, we need to focus on integrating the business we've acquired and making those a success. And secondly, the wider macro environment is a little bit more challenging, a bit more uncertainty. And of course, now we have to consider the very significant spread that's been achieved in the dollar sterling exchange rate. So whilst M&A will remain on the agenda, I think our focus in the near term probably needs to be more organic. A question here from Steve K. Will you look to exit your Russian operations by the end of the year? Yes, in theory, and we were well advanced in progressing the divestment of our shares in that Russian business to our local Managing Director who is a minority shareholder of the business. That was all agreed and ready to transact. And then a new decree came out of the Kremlin, fairly recently just in the last 3, 4 weeks, which does make it harder for that transaction to go ahead. There is apparently now some approval process to go through. We're not familiar with the details of that yet. And I think a lot of the details as to be emerged. So theoretically, we would seek to exit those operations in practices, difficult to know how feasible that will be by the end of the year. Question from Neil B. Could you talk about staff retention and hiring? What management gaps do you still have to fill and scale of salary inflation you are experiencing? I think staff retention is probably around about, no we've not seen any particular spike in retention challenges this year. We did have a bit of a challenge last year in a specific segment. Our marketing effectiveness team came under pressure for, data scientists in particular and those with advanced analytics skills. That pressure seems to have dissipated a bit this year. In our core media services business, I think there's not, at this stage, an unusual challenge on retention. Hiring, I think, remains, again, standard, albeit within some segments there are different challenges. We see some upward inflation in certain skill sets, which certainly adds a little bit of upward pressure on salaries there. Management gaps, I don't believe we have any specific management gaps. Clearly, there's always opportunity to strengthen in some areas. But I don't see any specific gaps in the management team. The scale of salary inflation we're experiencing, as we have one main salary review window in the year, which is in April. We take -- still can have another review, a minor window, should we say, in October, which we're just having a look at now. For our April round, we budgeted around [ 4% to 5%, ] which seemed satisfactory, but clearly inflation has got a lot stronger since then. I think we will selectively reward people a little bit more than that in October, but it is only the market window and we'll have to plan effectively for next April, and it's too early for us to do that yet. We have an approach budget season. Another question from Neil B. Whilst ad tech down 20% in the first half, was it a continuation of the cessation of a large one-off project in the second half of 21? Well, our marketing effectiveness and analytics business, we bracket together in revenue terms. And as Alan discussed during the presentation of the numbers, we did have several relationships or projects in 2021 that were not profitable. So in retendering them or aiming to renegotiate the price to make them profitable for us, if the client wasn't willing to take that price increase or if there was a tender or retender. And we priced ourselves more expensively and didn't win that business, and we've effectively improved the quality of the revenue. So we've taken a more discerning approach, I think, you could say to the revenue secured in that business line. So we're not concerned about the revenue going back because it's actually delivered and contributed actually high amount of operating profit to the business.

If I could just jump in, Nick. I think the question is referring to the comment in the RNS, where you specifically talked about ad tech. I mean, obviously, you've just said is absolutely right. But I think that is particularly was a small relatively low revenue service that we've actually merged into our media service now. So we're not really -- it was really advising people on how to make the best use of programmatic advertising and how to manage their partners. And so that's the real reason -- the main reason is that because we're really scaling it down now and merging and integration with our media services.

Thanks, Alan. I'm...

This is very specific. It was about GBP 1 million...

Yes. Thanks. Slightly misunderstood that question. Thanks. I think, Alan, while you're talking, you should answer the next one from Deon...

Sure. Yes. So obviously, our market expectations in the way that the market works are based around or obviously were communicated by analysts, or are their expectations or the consensus that comes to the market. Broader terms, the EBIT line, the underlying operating profit, I think the market is now expecting to be around GBP 9 million for the full year. So we're saying that we are well in line to achieve that. The second question was, what are the current thoughts as to returning to paying a dividend? Thoughts, at the moment, are probably not in the short term. There's no -- not been a lot of pressure from shareholders and given that debt given that we, I think, we can make best use of our cash by investing in the business and continuing to improve its performance and delivering value to shareholders that way. I think for the next year or 2, that's probably where we'll be. Of course, it's not my decision, it's the board. So and they -- we obviously keep that under review every year, but that would be my current view. The next question I got also, answer roughly what proportion of the GBP 14 million deferred payment on digital decisions do we expect to fulfill new shares? This is just to explain. It's pretty much our option. There is a de minimis that the vendor can ask us to pay, which is less than half. I think the working assumption again in the sort of analysts view that the guidance of the market is that it will be probably 50% -- equity 50% shares, it may be slightly higher than that in terms of equity, but it's that kind of region is what we're expecting at the moment. And I'll also answer the next one from Vishal, please can you discuss the tailwinds from FX on your top line and margins over the medium term should sterling continue to hover at these historic lows? In broad terms, the U.K. sort of invoiced business as it were, even though that's not all in sterling, is about also U.K. local business is about 20%, and our international unit is also U.K.-based is about another 20% of our turnover. So a different way around, more than half of our turnover is actually outside the U.K. and predominantly in dollar-related currencies or in euro. So in broad terms, you'd expect the fall in the pound would improve, give us some upside, but it's fairly well balanced because our costs are also going up at the same time. And America has potentially not had that high -- a bigger profit contribution that it was loss making last year. Now that we've got MMI and now we're improving it. We expect to see some profit benefit from the America. So very broad terms, I would say that the FX, fall in the sterling is beneficial, but it's fairly marginal in our business because it sort of balances all over the place. And sorry, I won't quite about FX, is the relationship in the pound -- dollar and euro affect things as well because euro against the pound hasn't actually been shifting very much. It's been a -- pound -- the dollar is very strong. The tax charge in H1 seemed high. I'm not sure what you're referring to high. It has actually come down since last year. I think -- what are the challenges in if someone's comparing our tax charge with the analyst view, as the analyst have tended to put in what I call a pro forma, which is tended to be underestimating our tax charge. So I'm expecting the rate for the full year to be pretty similar to what we get in H1. In fact, that's actually how we calculate it in the accounts, it's based on the forecast of the full year. Nick, I put it back to you on the next question.

Sure. Question from Vishal, please could you also discuss the ability of the new enlarged business to retain and attract new talent? I think we've seen an interesting dynamic in that people from both MMI and Media Path have expressed some degree of positivity, if you like, in that -- now they're part of a larger organization. There is greater potential for career development and career path. So I think that has certainly helped retain people from those companies. I think there is a positive dynamic about having made the acquisitions, which encourage people at Ebiquity to see the positive benefits of the newly enlarged company. So I think retention, at the moment, is fine, perhaps enhanced. That's not to say there will be -- there would be some people who decide that they don't want to be part of the new journey of the newly acquired equity, but we haven't yet seen that happen. Simply with the traction of new talent, a larger organization, we have a wider range of roles to offer people, positive momentum in the company. So hopefully, we appear an attractive proposition versus other players in the market. And, at the moment, we're seeing our ability to attract talent as been quite positive. Another question from Vishal. Finally, please, could you also discuss any observable trends in your tender pipeline, size of deals, win rates, contract decision cycles, et cetera? That's a good question, Vishal. I don't think the size of deals particularly have changed. We are, obviously, seeking to move them up. But I would say that's fairly stable at the moment, albeit we are moving the number of clients we have, and this comes back to the strategy of developing higher-value strategic relationships. We are moving clients up our total value relationship, if you like, but that's really more about selling more products and services to them rather than the individual project size or size of deal. Win rates, I think, remain stable. They're positive. We have a high proportion of successful tenders. The contract decision cycles, I think, also remain fairly stable. So I wouldn't say there's any great different dynamic in the pipeline or decision cycles. Neil B., do you have any new product introductions planned? Are you looking for further infill acquisitions? And if so, where? Yes, we are working on 2 strategic product solutions, one, to address the connected TV or vast television market, which we aim to pilot in the U.S. in the fourth quarter of this year. We're still working on a solution for the commerce media market. We won't pilot anything in the fourth quarter of this year, but we're actively working on it, and we have some other solutions under development, which we'll aim to bring to market in Q1 or Q2 next year. So there are still more product solutions to come to market. Are you looking for further infill acquisitions? At the moment, I think because of the market conditions that I described earlier, it's not at the top of our priority list, but we do continue to keep a view on the market. We continue to review the market. We continue to maintain or seek to maintain positive relationships with, you know, the principles should we say a potential acquisition targets. So there is a time, there will be a time, hopefully when we can be active again. And where, come back to the geographic strategy, North America, Asia Pacific remain high priorities, and we can find acquisition targets there, they would be priorities, but we would also be open to discussions with companies that have data -- relevant data they can bring into the organization. So it's primarily geographically and data-oriented. That's, I think, all the questions in the box that have come up now.

Yes, I think it is -- and I think you've actually managed to address all the questions from investors. And of course, the company will review all questions submitted today and will publish those responses on the investors in the company platform. But just before redirect to investors to provide you their feedback, which I know is particularly important to you both. Nick, I just ask you for a few closing comments.

Yes. As I said in the presentation, the outlook is that we will achieve the full year results in line with market expectations. There are obviously clouds in the horizon. At the moment, we see our business as being relatively resilient to that. Not to say we will be immune to the challenges, but we do see resilience built into our service offering. As we move into next year, the focus continues to be on successfully integrating the acquisitions and with a particular priority on transitioning our business over time of the GMP365 platform that Media Path acquisition brought with us. So I think the strategy remains the same. Products, clients, operating efficiency and geographic rebalancing, and that's probably the summary for that.

Nick, Alan, thanks once again for [indiscernible]. Could I please ask investors not to close the session as you now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete, but I'm sure it will be greatly valued by the company. On behalf of the management team of Ebiquity plc, we'd like to thank you for attending today's presentation, and good morning to you all.