Ebiquity plc (EBQ) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen, and welcome to the Ebiquity plc Half Year Results Investor Presentation. [Operator Instructions] Before we begin, we would like to submit the following poll. And if you could give that your kind attention, I'm sure the company would be most grateful. And I would now like to hand you over to the executive management team from Ebiquity plc. Nick, good afternoon, sir.

Great. Thank you very much, Jake, and thank you for joining us this afternoon for the call to present the half year results for Ebiquity for the year ended -- half year ended 30th of June. I'm Nick Waters, the Chief Executive. I'm joined on this call by Brian Porritt, who's our Interim CFO. I will start with a very brief summary before handing the slides to Brian to go through the financial data before returning. So it's been a disappointing first half of the year, there's no getting away from that. Some of that is down to external market circumstances and some of it of our own making, and I'll come and talk about that in a little bit more detail as we go through the presentation. Conditions were most challenging in Continental Europe. And although that was offset to a degree by growth in our Digital Media Solutions, the overall result has been a shortfall in revenue, which has impacted the bottom line and compressed margins. However, we have had a lot of new business activity from the second quarter onwards and continuing into Q3 all around the world and pleasingly with a very high degree of success. So that's giving a strong tailwind and a much more improved trajectory for the second half of the year. The pipeline remains very full, which will give us a good start into 2025 as well. And despite the uphill revenue challenges, we have remained diligent, executing our transformation strategy, rolling out the GMP365 data management platform on which to deliver services of 3 core services. We've increased our resources in sales and marketing, and we've made a very significant change to the operating model to make the company much more scalable to capture the global market opportunity, and we'll come to the details of that as we go through the presentation. But for now, I'll pass to Brian.

Yes. Thanks, Nick. So the first slide here is obviously the summary indicators that you will have seen in the RNS. And I just wanted to draw attention to a few things on here. Firstly, the revenue, as you can see on the top row over to the right, it was a decline in the half year over to the half -- first half of last year of 7% or GBP 2.8 million. And as you can see, just below the GBP 2.8 million, really all of that dropped through to profit. And in addition, there were some increased operating expenses. And one factor that has driven that and that we've identified in the RNS is the fact that we have effectively been [ dual ] running the old staff-intensive model and the new tech-enabled model in those 3 service lines that are moving to tech-enabled. So we're in a period of transition, where we're still effectively carrying the cost of the old model while beginning to incur the licensing costs associated with the new one. And that's why you see the operating expenses move up slightly in the half year. The next thing I want to draw attention to on here down towards the bottom, the highlighted items for this 6-month period were GBP 2.5 million, down from GBP 3.4 million in the equivalent period a year ago. And the main difference there was that there were a couple of credits in this period. One was that we wrote down the accrual for the MMi deferred consideration that's payable in July next year. It's variable based on performance. And based on the first half-year performance, we reduced the accrual, and that was about GBP 600,000. And then we had a write-back of the dilapidations accrual. We consolidated the London office from 3 floors to 1 and incurred some dilapidations, but the accrual was more than we needed. So that's the reason that the highlighted items trended down in this period. But what's also happening within highlighted items is that the transformation costs that we've been incurring over the last 12 months or so are coming to an end. And in the second half year, we don't expect to see those same kind of transformation costs. There will be some severance costs as the transformation activities are actioned, but what there won't be is further temporary labor associated with the transformation work itself. If I move to the next slide, this is just a look at the regional revenue. And there's a little note at the top there, and there's a more detailed note in the RNS that explains why it's kind of difficult to look at year-on-year by region in this period because the group has changed the way that it recognizes revenue by region. And so the only metric where we have '24 and '23 on a like-for-like basis is what we call external revenue, and that's basically revenue invoiced or accrued in that region. So these are good comparatives, but a lot of the other segmental comparatives have been somewhat distorted by this change of basis at the beginning of the year. And so what we see there is obviously U.K. and Ireland and Continental Europe, both going backwards in this period. And one of the big drivers of that is that there was no recurrence in this period of the very high levels of Agency Selection revenue that we saw in the first half of 2023. The group knew that was coming, and that's what we see there. But there was a particular bulge in ASM revenue in H1 of 2023 that did not repeat. And that's what really lies behind the U.K. and Continental Europe variances there. North America, obviously, the big growth opportunity, didn't deliver growth in the half. Nick will talk to that in a moment, but there were some client-specific reasons behind that. And Asia Pacific growing slowly, low single digit. But both North America and Asia Pacific go into the second half year with a much stronger pipeline, as Nick alluded to. And I think we begin to see the growth potential of both those regions starting in H2. But in H1, it wasn't apparent. Looking at the balance sheet summary here, I mean the main area of interest through all of our calls, obviously, has been the net debt. That was at GBP 15.3 million at 30th of June, which is almost the same as it was a year ago. It was GBP 15 million at June 2023, GBP 12 million last year-end. And I think the reason the GBP 15 million has got quite a lot of attention is that, that was not what people were expecting. I think the expectations from last year-end were that net debt would reduce during this year, and it hasn't done. And there are two main reasons for that to the half. One is obviously the lower trading performance, the lower revenue and therefore, the cash collections associated with that. And the other one is that there have been some exceptional cash outflows in the first half year that we do not expect to recur. So there have been some legal and professional fees associated with an aborted transaction. There have been the cash costs of the dilapidations in the London office, a cash cost associated with moving to a new payroll provider and having to provide a deposit and those kind of one-off expenditures during H1 that are not in H2. The only unusual expenditure in H2 is the severance costs that I alluded to, and those have already been incurred now. And they are basically the execution of that transformation plan or the cost-out element of it. So we feel that going forward, we're looking at normal trading cash flows. And the expectation would be that the net debt, while it goes up seasonally a bit in the third quarter, comes down again by year-end to about this level. And then into next year, it will drop much more sharply as we collect the fourth quarter receivables during Q1. So leverage at the midpoint this year was just under 1.6, and we're expecting that to come down to about 1.2 by year-end and then lower still during the early part of next year. As I mentioned earlier, we have that deferred consideration payment that you see there towards the bottom of the '24 column, GBP 3.4 million. That is payable in July of next year. And so that will obviously slow down the reduction in net debt for a bit during the middle part of the year, but we still expect the net debt to start trending down for 2025. And so if I look at the cash flows for the first half year, there, I mean, it's just the operating cash flows dropping through, nothing unusual below those. The one item to call out there, if you look at the highlighted items line under the June '23 column, the GBP 7.5 million there, most of that is the final deferred consideration payment on the Digital Decisions acquisition that was made in the first half of last year. So that final payment in that period, I think, was about [ GBP 6.5 million ] of that number. But everything else is really fairly routine as we go down. And then the net debt, as I've mentioned, just summarizing that there, as you can see, GBP 15.3 million compared with GBP 15 million a year ago and stabilizing during H2, trending down in 2025. And we have done the projections of liquidity and covenants and so on and have good headroom at all the projected periods. We've just been through the H1 audit review with Deloitte, and they reviewed all of our sensitivity testing around that and were satisfied. So that's the net debt summary at H1. And with that, I'll hand back to Nick, and obviously, we'll come back for questions later.

Thank you Brian. Let me just get my slide deck back. Thanks very much, Brian. So we entered Q1 knowing that there were going to couple of headwinds Brian mentioned that we had a strong amount of Agency Selection management work in the first half of 2023, and we knew that wasn't going to recur. We also knew from Q4 of last year that several of our large clients in Continental Europe had to cut budgets and cut fees, and there was no expectation that they would bounce back. So we knew that there was a couple of areas of headwinds that we had to battle against. But we entered Q1 with a good pipeline of new business opportunities, primarily in North America, which gave us confidence that we would continue to move forward in Q1. Unfortunately, we failed to convert those opportunities, and we lost a couple of clients as well at the same time in North America. I think there are a few different factors at play there. I think it could be -- the accusation could be leveled that we were a little bit complacent. We came off the back of a very strong 2023 with 33% organic growth in the United States. And I think there's a possibility that we felt the proposition was a winning proposition, and we can just go to market with it. But clearly, our competition had changed their tactics or their approach, and we got outplayed a little bit in the first quarter. So that was a very unpleasant wake-up call, which served us into a very energized outbound prospecting and new business strategy in Q2, which I'm very pleased to report has started to pay real dividends. These logos here are all either new business won or relationships extended from Q2 onwards. And I'll just call out some of the highlights here. In that top left corner, the new logos won globally, Airbnb and UBS are new to our niche, not just to Ebiquity, but new to our niche and further to the right, so Ineos in Europe. So it was very encouraging that we were able to persuade those brands to come to us rather than a competitor. Haleon, I'm also pleased about we had a long-standing relationship with GSK and then they spun their Consumer Products division out and rebranded it Haleon, at which point we lost that business, and that was 2 to 3 years ago. We've now brought that back. So that's very encouraging as well. And if we look to the top right box of that chart, it's been important that we convert domestic Asian brands. A lot of our business in Asia Pacific is the Asia Pacific divisions of Western multinational companies. So important to penetrate large Asian corporates. So winning assignments from UNIQLO, Shiseido, Huawei and Suntory is important to the growth of that region. There's also a couple of other positives that I want to call out there. If we look in the bottom-left corner, Disney, we had a long-standing relationship with Disney in Europe, but have never worked for them in America before in their home market. So we participated in a competitive bid [ to takes all shoot out ] to take their global work. We were able to dislodge the incumbent in a long time in their American business and win that in their home market. So that gives me a great deal of encouragement that the stumble, if you like, we faced in Q1 of this year, we've addressed our challenges there and recalibrated the offering. I'm also pleased we look to Europe, the growth of relationships with major brands like BMW, Beiersdorf and Henkel, as you know, an important part of the strategy is cross-selling and upselling to our existing blue-chip client base and being able to sell more services or extend those relationships into more geographies is really important. Now we've continued to execute the growth strategy. And there's a lot of positive momentum, an incredible amount of activity going on out there. We have a very full pipeline, as I mentioned earlier, we're working on 11 live multinational RFPs right now, of which we're only incumbent on 2. So there's a lot of upside potential there. We expect a further 3 to land imminently. Now, it might be that we're unable to capture a lot of revenue from that in Q4, but a successful pitch season, if you like, will really help give a fast start to 2025. Our Asia Pacific management team is reporting unprecedented levels of activity, a huge amount of work going on there. There is definitely some money coming into the market to buy our services. I think we've done a good job stimulating demand, but I think there's also a natural demand in the market. I think this is probably too early to be a result of the stimulus activity in China. I think we were seeing [ some ] unprecedented levels prior to the Chinese government unleashing more stimulus. So I think that's just a really encouraging sign that the market in Asia for our services is buoyant. I'm also very encouraged by the Middle East. We've really never sourced much business from the Middle East before with very minimal presence there, just serving primarily international clients that want some of our services in the Middle East. But we saw it as an opportunity to tap into Middle East markets or other Middle East brands that are going global or are already global. And that effort is already bearing fruit. We've won our first client out of Abu Dhabi. We have 5 live global RFPs coming out of Qatar, Dubai and Saudi Arabia, primarily in the tourism and travel sector. So that's exciting. We want to convert them, but it could be an exciting new source of revenue growth. We've continued to diligently sell our Digital Media Solutions. And by the end of this year, I think we'll have over 100 clients buying from that portfolio of solutions. Our Marketing Effectiveness team is reporting very high levels of demand. And I actually think there's a little bit of a risk that we won't be able to deliver or manage all that business this year. But it's encouraging that those services are so demanded and successful. We brought a new streaming TV product to market. You might remember from previous calls, we've been testing and piloting an advanced television product, where we've recalibrated that to -- rebranded as streaming TV. We've now brought that to market, and it's throwing up really interesting value proposition for our clients there. We've already analyzed over $500 million worth of streaming TV investment data. So I think we've got a real opportunity for a new product there that is showing its worth. We have a new retail media product now in market live with its first clients. We don't have output from that yet. So we are hopeful it will also demonstrate a clear value proposition, but we don't know that for a fact yet. We've reorganized our sales and marketing function to enable us to get more on the front foot, more aggressive with our outbound prospecting, marketing. We've also, despite the revenue challenge, taking the opportunity to invest a little bit more in new product development and in some software engineers for improving machine learning and artificial intelligence. So there's been a lot of positive activity, a lot of forward momentum, which is giving us a much stronger second half of the year. And as we sit here now, we have secured over 88% of our full-year expected revenue, which is pretty well on par with previous years. But in last year, our Q4 fell away. It softened a bit, with 1 or 2 or 3 clients cutting budgets. Whereas this year, we see an upward trajectory in Q4. So our second half revenue is expected to grow year-on-year in mid-single digits versus the same period in '23, and adjusted operating profit will reach double-digit growth versus the same period in '23. Cash inflows will improve. Brian touched on that already with the seasonal receivables, and there's no material nontrading cash outflows expected. We, as you know, have 4 main parts to the strategy. We've talked a little bit about geography, product and clients over the previous slide. So I want to focus this section on the fourth one, of operating efficiencies. I think it's fair to say that's been a major focus or consumer of management time over the previous 9-plus months. We've been through an enormous amount of change. And our trajectory, our journey is to become much more technology enabled to improve business efficiencies for ourselves, but also client experience as we move 3 core services of Agency Selection management, ValueTrack, Benchmarking onto the GMP365 data management platform as well as continuing to sell our Digital Media Solutions on the Media Data Vault. Not only will this improve efficiency for ourselves, but it will create global consistency of all our products and services, which our major multinational clients have been asking for. And with the data on the platform, it will create much greater speed to insights for the clients. Instead of having to wait for us to manually analyze data and come back with a report once the data is on the platform, and the information and the insights can be generated automatically. So much greater speed to insight for the client and always on visibility as well. So once the data is on the platform, they can see it at any given time, and that helps with forward planning. So it's an improved client experience and improved client product as well as creating efficiencies for ourselves. Now part of this migration is to move the delivery elements of the work, which are geographically agnostic, move them into globally mutualized delivery teams, all under one point of management. And that has largely, almost completely taken place now. And that leaves the in-market teams free to focus on growing, maintaining, developing client relationships and winning new business. So it's been a very, very significant shift of the operating model. We've effectively broken the old operating model, which was a series, we were a federation of small national businesses, handcrafting end-to-end solutions, customizing each solution for clients every time, which is a nonscalable model. So we've broken that model and we put together one that is a scalable model. So we now have 4 teams that are focused on clients, say, maintaining, developing growing client relationships; 3 regions, Americas, Europe, including the U.K., Asia Pacific; and a team focused on managing a universe of global clients. Now they are supported by the globally mutualized, as I said, delivery team, supporting all the technology-enabled services that we now provide. And they in turn are supported by a global solutions team that's effectively a new product development team and a team that iterate on our existing products to create that global consistency. And they work hand in glove with the production team of essentially the software engineers to make sure that the solutions they come up with can actually run on appropriate technology and efficiently. So this is now a scalable model really for the first time in Ebiquity's history and gives us the opportunity to capture the growth opportunity much more effectively. Central to it is rolling out the GMP365 data management platform. And as I've said, the ambition or the strategic intent is to deliver 3 of our core services on the platform, ValueTrack, Agency Selection and Benchmarking. Progress is good on ValueTrack at the half-year mark. We had 50 clients active, covering an aggregate of 473 national implementations. Now as we sit here right now, that is up to 61 clients active ValueTrack and then aggregate that being clients times markets of over 660. So really scaling up quite nicely and generating or -- we've been able to identify a very significant reduction in delivery hours. And Agency Selection, I also feel we've made good progress on at the half year mark. We've run 35 processes. As we sit here right now, that's up to 45 processes covering over 140 client times country assignments, again, significantly up on prior year and with identified delivery hours savings being quite significant. Now the area where we have made less progress, and we've run into some obstacles is transitioning Benchmarking over -- onto the platform. So we've only managed to transition 10 clients at the moment, covering 25 markets. And there's a lot of opportunity ahead of us if we can overcome some obstacles. Now, those obstacles are readily overcome, we can readily overcome them. It's essentially a matter of needing to modify the platform a little bit to cater for more granular local market nuances. The platform does a very good job for individuals that might be sitting in an international management role, a global media director, for example, now. It covers all their needs. But when you get down into the national marketplace, there's a degree of granularity that those national clients want to see that the platform doesn't quite cater for yet. So there's some modifications required. Now the good news is -- [ two ] good news. One is we've identified what those modifications are. And two is it's not a significant IT development work, there's no coding required. It is literally modifying the platform. So that's in process. The first releases to the U.S. market are out now, enabling us to bring the improved solutions market in the U.S. now, and we've got a similar process underway for the other markets around the world. So what we always envisioned as a 2-year rollout program for '24 and '25 really is now going to be 2 years, '25 and '26. And when we get to a critical mass, the tipping point of the amount of work transitioned on to the platform versus legacy processes will be when we can taper down the [ dual ] running that Brian referred to already and start to gain those headcount efficiency savings. We've also made a number of other changes as we've broken, as I said, the end-to-end in-market operating model to a globalized delivery system. We've naturally changed the workflow processes. And at the start of the call, I referenced some of the H1 challenges of our own making. This is a center of it, really. When we broke the workflow processes, there were some areas where they fell down, and we've had to take actions to adjust them and to improve them. Those actions have been taken now to smooth out those bumps in the road, including rolling out Asana as a global software management tool and appointing operations directors in each of the regions, not new hires, but repurposing or redirecting people already in the business. We've also started to rebalance the profile of our teams in market, the people that are tasked with growing -- maintaining, growing client relationships and seeking new business. And I deliberately used the word rebalanced rather than restructure. It's not been as aggressive as a restructuring. It's been adding more hunter-type profiles to the workforce. I think we've had a long tradition and track record of good client relationship management. We're now adding more outbound sales capability into the teams in combination with testing some different sales incentive models with these hunter-oriented types. And the ambition is to create a full package of sales incentives as we move into 2025. So a lot of other activity has been going on to make us a more -- not just scalable but more aggressive and outbound prospecting business. So it might sound somewhat old to say this on the back of a disappointing first half, but the company has actually never been better set up for success. We have an upgraded product and service set. We have innovation for today and tomorrow's market. We have high-quality technology in place and a new operating model for scalability. We've added [indiscernible] skill sets. We have a number of unique competitive advantages, including the scale of our data sets, global reach and a fabulous client roster. I think now, with the momentum gained in the second half of the year and going into 2025, we're starting to hit our stride again. This is a huge global market, with an excess demand for our services such as ours. And we think we're now poised to fully capitalize on that opportunity. So that is the end of the presentation of the slides, and we'll be very happy to take any questions you might have now.

Perfect. Nick, Brian, if I may just jump back in there. Thank you very much indeed for your presentation this afternoon. [Operator Instructions] I'd just like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A can all be accessed via your Investor dashboard. Nick, Brian, we did receive a number of presubmitted questions ahead of today's event. And as you can see there in the Q&A tab, we have also received a number of questions throughout your presentation this afternoon as well. So firstly, thank you to all of those on the call for taking the time to submit their questions. And Brian, Nick, at this point, if I may just hand back to you just to read out those questions and give your responses where it's appropriate to do so, and if I pick up from you at the end, that would be great.

Certainly. Thank you, and thank you very much for the questions that have been submitted. So the first one is, what new valuable services for clients are being developed from the data [ lakes ]? A very good question. And I think it's quite early stage, work in progress at the moment. But we have these extraordinary data lakes that -- there's no comparison in the industry from an independent perspective. And the way we're looking at it at the moment is to see if we can train large language models on that data to create a new value proposition for clients. So there are -- the example I'd like to use is if you're an advertiser and perhaps you've got a $100 million budget to trade with Meta, for example, [ the asymmetry ] of information, and Meta will go into that negotiation knowing a lot more than you do. Well, if you have the ability to interrogate our database and to gain some insights that might be beneficial and advantageous to you in terms of Meta delivery by country, by season, whatever it might be by audience; then that could equip you in a much better place to have that discussion with Meta as an example. So this is how we are thinking about it. But I have to say it's still very early days. And we are somewhat constrained by the amount of investment we can put into engineers and capabilities with that knowledge and understanding. But that's kind of the way we're looking at things at the moment. What does the evolution of Digital Media Solutions to digital governance actually mean other than a name change? Yes, that's a good point and a good question. Essentially, as we were building our Digital Media Solutions, you might remember over the years, we had a cadence of bringing new solutions to market over perhaps [ probably ] 6 months -- or 4 to 6 months. And our teams are going out and selling those as individual solutions. What we've learned actually is that, that became quite complicated to sell as we brought more to market and we have more in the portfolio, it became a little more complicated to sell. And what we learned was actually if we package all the solutions up into one governance program that in a modular basis, so a client can go, "Well, these 5 are actually what I'm interested, I don't need those 2," then that's much easier selling it as one governance program than 7 individual modules. So that is really as simple as that, is we've learned how to better sell the solutions, the portfolio solutions. Next question, what is the growth driver in Asia Pacific leading to unprecedented increase in potential business? And is that largely China driven? No, I wouldn't say it is largely China driven at this stage. China, as you're very well aware, the economy has been sticky. We have been growing in China, but we've been grinding out growth. It's not been easy. It's not been falling off a lot. We've had to really go out and sell hard. We've got an excellent Managing Director in China, who really works hard at selling. So we have been grinding out growth there. The inbound traffic, if you like, has been much more to our team in Singapore. So we have a team in Singapore that is able to cover the markets across Southeast Asia and actually increasingly into North Asia as well. So we've started to do work in Japan and Korea from the team based in Singapore. So I think the team has now gained a reputation of being able to cover more markets. I'd like to think the Ebiquity brand is good and has a very good reputation. If clients are interested in the kind of services we have to offer, they come to us. And I think we've also been better at our outbound marketing as well. So I think there's a combination of factors. I think there's the old cliche, isn't there, that when China sneezes, the rest of Asia catches a cold. Now the stimulus program is going into China. What will that mean? I'm sure it will be good news for many companies in China, many businesses. Will that stimulate increased demand for us? I don't know. It's a bit too early to say. Our proposition, as you know, is that in times of difficulty, there's an argument that our services are more valuable. So if your marketing media budgets are under pressure, come to us, continue to pay our fees because we can help you maximize the efficiency and effectiveness of your budgets. But of course, when clients have more money to spare, there's the opportunity for them to buy more services from us. So as we sit here right now, Asia is buoyant, a lot of inbound traffic, probably better external or outbound marketing from ourselves. But I think there's a good momentum, not just from Q4 but into '25 as well. Post rationalization and transformation with increased ability to scale, what is envisaged as the approximately stable headcount versus today? That's a good question. It's quite difficult to answer. I mean the strategic intention is to increase the amount of revenue we can serve via the same or less headcount. Our agenda is focused on improving the operating margin. We have, as you know, been moving that forward quite nicely from 7.5% in '21 to 12%, I think it was in '22, to 15% last year. And this year, we have been hoping to get 16%, 17%. We've obviously stumbled, and we won't get that. But the trajectory, the path is to get to that 20% operating margin. And it's not so much based on a number of heads that we can take out, although that clearly is part of it, can we run the business with less people? But it's about can we deliver the services more efficiently so the same number of people can handle more business. And of course, if we have -- we've divided the work now. So we don't have people doing end-to-end services meeting the client, understanding the brief, sourcing the data, organizing the data, reporting back. We've got people who focus, are dedicated on clients, client management relationships and people dedicated on sorting out the data. And we believe that will increase the client base and people's ability to generate more revenue. And because the data management side of things will be increasingly technology-enabled, speed to response and enabling quicker throughput, so the ambition, strategic intent is to grow revenue off a cost base that doesn't grow commensurately. Outside of lack of confidence in the business, is there any other reason for a very poor showing of Board members on the share register and the lack of market alignment with the [ back ] of shareholders? Well, clearly, I can't speak for the other Board Directors. I can only speak for myself. I have more than 1 million vested but unexercised shares. So I am vested in the long-term success, short-, medium- and long-term success; of the company. I clearly don't want to talk too much about my own personal circumstances, but there's a limit to the capital that I have available, but I feel those 1 million shares give me sufficient motivation or give me good motivation. And as I said, I can't talk for the other members of the Board. Questions in the past about AI have been fended off. I wouldn't necessarily say that. How do we presently apply AI to support clients is -- so I'm struggling to read this, is a mystery to me as is also how we will do so in the future. Yes, at the moment, we're not making any claims that we are supporting clients by AI at the moment. We are improving our machine learning capabilities behind the scenes. That's to improve efficiencies in processing of data and matching of data. So where a client's data taxonomy is not good, we need to improve the machine learning so that the systems understand when two different data sets are labeled differently, but they might actually be for the same activity. So that's been the focus of machine learning attention for the last -- well, for the course of this year, really, and we're seeing some releases now already being tested actually on particular client deliverables through the month of September. Now when it comes to AI, as I mentioned before, we have a view on how we might be able to bring AI to bear to create interesting and valuable products to clients. We don't have a huge bandwidth to suddenly invest in a lot of AI specialists and software engineers, but that is the focus. Once we feel we've made sufficient progress or have a good momentum on that internal machine learning element, I think we'll be able to turn more of our attention to innovating products and solutions for the clients when it comes to AI. But I think to say I've fended off questions about that in the past is simply inaccurate. And I've never made any claims that we support clients with AI now. So hopefully, that clears that up. How do we actually support influencers? Yes, that's also a good question. That's very much an area I would like us to get to when it comes to more a globally distributable product. So where we currently stand with influencers is some national market innovation, which actually started in China on the back of one of our global clients, their headquarters here in the U.K., saying our Chinese colleagues are spending tens of millions on buying influencers in China. What are they doing? Are they doing it well? What are they getting for it? Et cetera. At that point in time, we couldn't answer the question, but we thought we need to be able to try and help our clients. And that's a very big segment, really, of the market that flies under the radar, has very little governance or empirical data attached to it. So our Chinese team actually innovated there and really have a fantastic amount of data now relating to influencers in China, which is providing really, really robust service to clients there. On the back of that, our team in Singapore has also developed an influence product. What I would like to do -- as I said, we've got a relatively small new business -- sorry, new product development team. That's that global solutions team. There's 8 or 9 people in that. What I'd like them to do is now start to see if we can take that national market innovation and create some globally scalable product. I think that's the next [ cab ] off the rank as we've been focused on getting a value proposition for streaming TV and now on retail media. We've also been -- put some effort into better automating our paid search function. But I think influencer marketing, I would like to be the next [ cab ] off the rank, but it's too early to talk about that in any detail at this stage. What is it we actually do for clients in marketing effectiveness? And how are the results quantified and improving the ROI? Yes, we've got a really high-class marketing effectiveness team. I've worked in -- you might know my history, I've worked with major holding companies, marketing services, holding companies groups in my career prior to this, and they all have marketing effectiveness units. But the Ebiquity one is by far and away the highest quality that I've come across. What do they do? They use advanced analytics, statistical techniques, regression models to really pull apart the actual leaders of either brand metric movements, consideration awareness, consideration purchase and et cetera, whatever metrics you want and to sales. So there's a huge amount of input, of which significant input is media and marketing investment, but also creative saliency, residual brand awareness, distribution, pricing, seasonality, et cetera, et cetera. The Marketing Effectiveness team takes -- essentially takes as many data points as are available and builds models through regression analysis to advise clients how to optimize their expenditure under any different given circumstances. It's very high class, very high quality. In fact, the Managing Director, [ Dominique Pete ], is here in the U.K., stands in front of the franchisees once every quarter, I think it is and has explicitly stated if we put it in our credentials, that she doesn't approve any planned marketing or media activity until it's been through Ebiquity's Marketing Effectiveness unit. So it's very well [ regarded ] and really, really has clear demonstrable impact on return on investment. Next question is, is our Agency Selection -- in our Agency Selection work, how do we do -- sorry, I've got to reread this. In our Agency Selection work, how do we do so? Is it just a question of helping them determine what proposition to accept from third parties? Or do we put forward ideas as to whom they should be including in the selection process and why? Yes. Clearly, it varies client by client and what the objectives of those clients are. Some advertisers in the market will have a roster of preferred agencies, and they just put the business out to tender for those and they don't need help selecting which agencies. Other advertisers will say, "Well, we've had this roster of agencies, do we need to refresh it? What other ones are out there that we should have a look at?" We provide them that help based on what they're trying to achieve and then [ breed ] from what we know about the agencies. So it's quite a broad service proposition really that can go from just helping them run a process where they already know what we want to achieve all the way to helping them set out their own objectives and how they want to achieve them. So it can be very, very large in scope or can be much narrower in scope. What exactly does benchmarking involve? What is measured against what? Yes, good question. It is -- so a relatively simple proposition, in that the media markets are competitive, brand owners spending large sums of money buying media time or space to advertise their message to distribute their messages. Huge amounts of money gets spent and spent by agencies negotiating deals with the media owners. The advertiser wants to know whether that their money is being spent competitively. So where does their media price and quality point sit in the market versus the market? So to create that benchmark, you need to work with lots of advertisers, who allow them to [ pool ] their data. So here in the U.K., we have over 100 [ advertisers ], which represent 70-plus percent of the [ major ] expenditure in the measured media expenditure in the U.K. market. So only one of those advertisers, in return for providing us with their media expenditure data, we can tell them where they sit versus the pool. So we provide them with a benchmark of their media price and quality in the market. And if they're buying inefficiently, should we say, or uncompetitively, we can show them where we think improvements can be made and efficiencies can be gained. We'll do that in collaboration with the agencies. The agencies might well have a point of view saying, "Well, I can't do that," unless for something else, giving you earlier approvals, whatever it might be. So there are many levers which can be pulled to improve an advertiser's price -- media price and quality position in the market, and we help them identify those levers and identify where they could be sitting in the market. Interested to see the growth from the GCC region, yes. What is your assessment of the competitive landscape in that region? And what further progress might be possible? Yes, it is interesting. I mean I took this point -- I visit the Middle East just once a year. As I said, we've had a very small presence there, which is really to receive inbound work from multinational base, whether it's the U.K., Europe, U.S., wanting some work done in the Middle East. We've had a very small presence there to do that. So I visit the Middle East once a year. And over the last sort of 12-plus months, maybe up to 24 months, I've been thinking, well, there isn't a competitive presence there. And some of these brands are now big global brands. And perhaps we should be seeking to take them out of the Middle East, take -- support them outside the Middle East. And so we've been doing a bit of work to raise awareness of our services and see if we can generate some business. And it's actually gone really well. Major Middle Eastern-headquartered organizations, as I said, from Dubai, Qatar, Saudi, even Abu Dhabi, we've generated business for us. So I think the universe of those brands is relatively small at the moment. but they're quite major marketers. I mean I don't have to tell you that there's an enormous amount of money coming out of Saudi Arabia to buy visibility presence, influence, whether it's sports, washing, whatever you might want to call it. But there's a heck of a lot of outbound marketing investment coming from the Middle East, and we do see an opportunity to capture some benefit from there. And I think that's the last question.

Nick, absolutely. If I may just jump back in there. Thank you very much indeed for being so generous of your time there and addressing all of those questions that came in from investors this afternoon. And of course, if there are any further questions that do come through, we'll make these available to you immediately after the presentation has ended just for you to review to then add any additional responses, of course, where it's appropriate to do so. And we'll publish all those responses out on the platform. But Nick, perhaps before really just looking to redirect those on the call to provide you with their feedback, which I know is particularly important to yourself and the company, if I could please just ask you for a few closing comments just to wrap up with, that would be great.

Yes. I think the key message is that 15-plus months ago, we took the decision to embark on quite a significant transformation program. If you go back through the last few years, we made a strategic acquisition called MediaPath, which had an exclusive license to a data management platform. We did that because we took the view that running handcrafting solutions, mass customizing for every client in market was very inefficient and meant there was no opportunity for scalability. So we've brought in that data management platform and have made, I think, good progress transitioning some of the core services onto it, albeit with a lot more progress made. But to really create scalability, we decided we needed to break that federation of small national businesses, break that model and create a globally scalable model. We've done that now. It was an ambitious program. I had clearly hoped and wanted that we'll be able to continue growing revenue while we did it. I think it's fair to say, as I said right at the top of the call, there were some external market factors that we knew were going to be a little bit difficult in the first half of this year. But we created some challenges for ourselves, and a lot of that was related to this huge effort we put into changing the operating model. All that lift and shift has been done -- with all the disruption that causes, you change someone's role from doing an end-to-end job to say, "Well, you're going to do this and you're going to do that." Some people quite necessarily say, "Well, I quite liked what I was doing." And some people say, "Well, I don't agree with that." So there's been a lot of hard work contributed by a lot of senior managers in this team to get through that phase, a lot of turbulence in the organization. That turbulence now is largely in the rearview mirror, Brian referenced in his statement, as we changed the operating model, we identified a number of roles that could be eliminated. We've done those. There's some notice periods being served. That will be obviously the last bit of turbulence, I think. We get the processes running smoothly. As I said, there's been some -- a little bit of a breakdown in processes we hand over between the client-facing teams and the delivery teams. We smoothed that process out. We've now put the Asana software project management tool. We put in operations directors into each region and not external hires, [ I already said ] that, people already in the business. So we've now got an upgraded product and service set, globally consistent, improved product for clients, improved efficiencies for ourselves, people focus now on clients and only having to worry about clients and not worry about delivery. People who focused on delivery, only worry about that, not having to worry about clients. We split that. We've got the technology platform in place. We've got globally consistent products and solutions. We're now, finally, have the ability to scale the business. So instead of every time we win business having to add more headcount, we can win business and maintain a stable cost base or hopefully even reduce that cost base. So I think the closing slide in the presentation, I said the company has never been better set up for success. And it might seem odd saying that on the back of [indiscernible] is absolutely the case. We operate in a market with excess [ for a ] hugely complicated market, media market with excess demand for services of a company like ourselves. We weren't able to capture that opportunity as a federation of small businesses, small local markets, mass customization for -- customizing solutions to clients all the time. We've now set ourselves up, and we've broken that model, we've been through the hard work, and we're in a really good place for scalable growth now. So that's the message to leave you with. Thank you for your time.

That's great. Nick, Brian, thank you once again for updating investors this afternoon. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order that the management team can really better understand your views and expectations. This will only take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of Ebiquity plc, we would like to thank you for attending today's presentation. That now concludes today's session. So good afternoon to you all.