Ebiquity plc (EBQ) Earnings Call Transcript & Summary

Good morning, everyone. Thank you for joining. I will put on the presentation. There we are. Good morning. Thank you for joining our Full Year '24 Results and Outlook Presentation this morning. I will be joined today by Kayte Herrity, who will introduce herself in a bit. But first, I wanted to just recap my tenure and role with the company. I was appointed as Group Chief Executive Officer 5 months ago in November '24, and I joined Ebiquity in 2020 following the acquisition of my business, Digital Decisions, where I was the founder. My previous roles at Ebiquity included Chief Strategy Officer and Chief Product Officer, and I hold around 7% of Ebiquity's issued share capital personally and represent another 6% in voting rights. As said, I'm joined today by Kayte Herrity, who will introduce herself. She has been with me and with the leadership team now for a month or so. It's been going really well, and we're fortunate that our previous interim CFO, Brian Porritt, has stayed with the business to help us wrap up the annual results and onboard Kayte, and it's going really well. So I'm excited to co-host this presentation with her today. I want to stress that we have a very, very much renewed and reinvigorated executive leadership team. Highlighted on this page, you see the big changes made to the ELT, obviously, myself, new in role. I have appointed Mark Gay, a long-standing superb employee of Ebiquity to be our Group Chief Operating Officer, a new role for Ebiquity. As I said before, Kayte joined us as our permanent CFO a month ago. We appointed from internally: Peter Hanford into the role of Chief Revenue Officer; Candice Grant into the role of Executive Operations Head; and Michelle Morgado joined the executive leadership team, she is our Managing Director of U.K. and Ireland. Today, we will take you through the 2024 result headlines and then through an update on what Ebiquity is, what it does and why we believe it makes for a very strong investment case and an exciting business. Without further ado, I will hand over to Kayte to introduce the slides on the financials, and I just have to screen.

Hello, everyone, and thank you very much for joining us today. My name is Kayte Herrity, and I joined Ebiquity as CFO very recently, as Ruben said, only last month, having previously held senior finance and transformation roles in media and information businesses across both PLCs and private equity and most likely in TalkTalk, Kantar and Informa. I'm very excited to be part of Ebiquity, a company that embodies the principles of effective and responsible advertising whilst driving innovation and delivering measurable value to our clients globally. A good question for me to answer right now might be why did I join Ebiquity? So I joined because I could see that it had a unique position as a world leader in media investment analysis, combined with exciting opportunities for growth and innovation. Ebiquity is at a pivotal point of this journey, and I believe I can help add value during this key phase. So firstly, I can see that Ebiquity has very strong business fundamentals. We are the world leader in what we do with unparalleled access to data and insights. We have great, sticky long-term relationships with over 75 of the top 100 advertisers in the world, supported by low customer churn. Our experienced teams offer a deep expertise and exceptional broad coverage, enabling us to provide our customers with a truly global service. And Ruben will elaborate on this later, but our proprietary data and advanced analytics tools, including AI-driven solutions set us apart in the industry. And financially, we have strongly recurring revenues with good forward visibility, and we have an increasingly tech-enabled model, which allows the business to scale efficiently. We have low capital intensity, coupled with good cash flow conversion, and we have committed bank facilities in place. Most excitingly, under Ruben's leadership, Ebiquity is undergoing a cultural and operational reinvigoration. Our AI center of excellence is driving both in-house efficiencies and innovative solutions for our clients, creating significant opportunities to focus on profitability, not just through topline growth, but also through improving operating efficiencies to enhance margins. So in summary, this is a very exciting time for me to be joining Ebiquity. It's a fast-paced environment full of ideas, opportunities and with a strong sense of purpose. I'm very pleased to be able to take you through the results from last year, which demonstrate both challenges and areas of resilience. Revenues of GBP 76.8 million were GBP 3.4 million or 4.3% lower than in 2023, driven by reductions in Media Performance and Media Management service lines, which saw declines of GBP 2.8 million and GBP 2 million, respectively. However, these were partially offset by growth in Marketing Effectiveness of GBP 1.2 million and more modest growth in Contract Compliance of GBP 0.1 million. Despite the revenue shortfall, we managed our costs effectively. Staff costs increased by only just over 1% despite inflationary pressures and other operating expenses also rose by just over 1%, demonstrating tight cost control. This took adjusted operating profit to GBP 7.9 million, down from GBP 12 million in 2024 (sic) [ 2023 ] and resulting in an adjusted profit margin of 10.3%, a decline from 15% last year. Net finance costs were down GBP 0.9 million at GBP 1.4 million with lower average borrowings and favorable FX offsetting higher interest rates. Reduced profits also brought our adjusted tax charge of GBP 2.1 million in GBP 0.5 million lower than last year. Highlighted items charges of GBP 8.1 million, of which just over GBP 7 million was driven by goodwill impairment and amortization were GBP 3.3 million lower than last year, and the statutory loss amounted to GBP 3.6 million, GBP 0.6 million better than in 2023. So if you could move to the next slide, Ruben, we'll now look at breaking down revenue by geography. So U.K. and Ireland remain consistent with revenue broadly flat at GBP 32.2 million. Growth in Marketing Effectiveness and Contract Compliance offset a decline in Media Management services here. Continental Europe revenues saw a 4.4% decrease to GBP 21.7 million, driven by reduced Agency Selection and Management business. This was partially offset by Marketing Effectiveness growth, notably in France. North America experienced a 7.8% decline to GBP 16.1 million, mainly due to reduced Media Performance scope in the technology and retail sectors, the Media Management and Marketing Effectiveness saw some upsides. APAC saw the steepest drop with revenue down 13.2% to GBP 6.7 million, impacted by competitive pressures in Australia and economic challenges in China. If we can move to the next slide, we'll look at revenue through the lens of our different service lines. So you'll see that Media Performance and Media Management declined overall by 5.2% and 20.1%, respectively. So Media Performance, our largest service line, this decline reflected lower renewals and reduced scope, particularly in APAC and North America. And the decline in Media Management was driven by shortfalls in Agency Selection and Management projects, mainly in U.K. and Ireland and Continental Europe. However, as I said earlier, Contract Compliance and Marketing Effectiveness both grew year-on-year. Contract Compliance grew modestly with upsides in U.K. and Ireland and APAC offsetting slight reductions in North America and Europe. And Marketing Effectiveness grew significantly, delivering 13.4% growth to GBP 10.3 million, driven by new client wins as well as scope increases with existing clients. Notably, new client wins in France contributed nearly half of this growth. So you can see where we faced challenges, but also demonstrated growth in both Marketing Effectiveness and Contract Compliance. So if we can move to the next slide, that demonstrates that 2024 was very much a year of 2 halves. So in H2, we achieved higher revenue growth and implemented strict cost controls, leading to adjusted operating profit more than doubling from GBP 2.3 million in H1 to GBP 5.6 million in H2. And we saw an adjusted operating margin recovery with the margin increasing from 6.2% in H1 to 14.3% in H2, which brought margins closer to 2023 levels. So these improvements reflect effective cost management through tactical cost savings, which were achieved without jeopardizing service quality or talent retention. This discipline has set us up for improved momentum heading into 2025. So turning to the balance sheet on the next slide. Our net assets reduced by GBP 6 million from GBP 42 million to GBP 36 million during the year, with the most significant movement being a GBP 4 million impairment of historical goodwill balances. We also saw a decline of nearly GBP 1 million in lease liabilities, resulting from the reduction of the term of our German office lease. Working capital increased slightly due to GBP 2 million lower trade payables resulting from the focus on cost control in H2 that I mentioned earlier. And contingent consideration liabilities also reduced from GBP 4 million to GBP 2.7 million following an updated assessment of the provisions. So moving to net debt on the next slide. So this slide provides a comparison of the year-end position with the position at the end of H1 2024. So you can see that net debt of GBP 14.8 million was GBP 0.5 million lower than at the end of H1, driven by a strong focus on billing, cash collections and cost control. This GBP 14.8 million excludes -- sorry, excluding restricted cash within our Russian entity, net debt was at GBP 16.1 million. And in 2025, we have a good level of committed financing in place with a newly increased revolving credit facility, an amendment having been made in March 2025, increasing the available financing of GBP 5 million to GBP 35 million. We believe that this provides us with more than adequate liquidity and headroom until we need to refinance the facility in April 2027. And the next slide shows cash from operating activities in 2024 of GBP 5.5 million. This is down on last year, impacted by lower operating profit and a GBP 2 million reduction in net working capital. After adjusting for highlighted items, our adjusted cash flow conversion metric is at 108%. And looking ahead, we expect to have a continued focus on cash management to support operational efficiency. So in closing, while 2024 presented challenges, both the momentum achieved in H2 and our strategic focus position Ebiquity for sustainable growth in 2025 and beyond. So I look forward to working with Ruben, the leadership team and all of our very talented colleagues to realize the company's full potential.

Thank you very much, Kayte, and I will take over again. to talk through why our clients partner with us. The market we operate in and the market that, in many ways, we help improve in 2025 surpassed the $1 trillion mark in annual global ad spend, making this a market that requires becoming mature and efficient. Digital media within this is increasingly prevalent. In 2025, it accounts for 75% of all global ad spend, and this portion or this part of the total expenditures is growing. Digital has overtaken linear media and provides or delivers a higher relative complexity and an opportunity to improve the effectiveness, especially within fast emerging channels such as connected TV and retail media. The priority for clients is to establish efficient and effective digital media investment processes globally. We estimate at Ebiquity that at least 42% of the $1 trillion-plus investment annually is not as effective as it should or could be. That is roughly the economic size of the entire GDP of Vietnam or 14x the global recorded music industry or 1.6x the entire global offline media spend. When done right, advertising is a powerful growth driver. It is an investment, not a cost. For every pound, dollar or euro invested, advertising returns 1.87x the investment in short-term profit payback. The total term profit payback is 4.11x. That includes longer-term brand value and customer loyalty building. The reason why we know this is that Ebiquity executes the largest, most authoritative studies on the effectiveness of advertising. The numbers on this slide are pulled from a study that we did together with Thinkbox and several GroupM agencies in 2024, really uncovering the business case for advertising. An example of one of our most skilled and long-term clients is Jaguar Land Rover. Over the time of the relationship, we have delivered over GBP 300 million of incremental value by transforming their media operations, governing their investments in media and growing the incremental profit by modeling where profits could be maximized and helping the client execute their investment decisions accordingly. We help brands deliver effective and responsible advertising, ERA. Those 2 things go hand-in-hand. We make sure that every dollar invested delivers the maximum incremental business growth for the clients we work with. We make sure that it solidifies their brand health and that it delivers the maximum short- and long-term impact. We help account for that as well as a trusted independent authority. Responsible goes hand-in-hand with effective. It is critical that these 2 both apply to the investments made in advertising. When we talk about responsibility, we talk about compliance, both with regulatory frameworks and contractual agreements with, for example, media agencies and technology partners. But also the investments have to be in line with company policies. And the brands we work for want to make sure that their investments in advertising have as little waste -- excessive wastage as possible and negative impact on society. This includes, for example, for many of our clients, avoiding delivering advertising and therefore, investing in or providing economic empowerment to harmful disinformation platforms. Ebiquity provides advice you can trust and results you can measure. The average client improvement in ROI of clients working with Ebiquity is 15% year-on-year. Just last year, we found a total value improvement across digital governance programs of more than $1 billion, which means we identified over $1 billion that could either be reallocated into effective channels or saved altogether. And in the last 5 years through our Contract Compliance division, Firm Decisions, we have delivered over $900 million in hard cash returns for our clients as a result of noncompliance with the contracts they entered with their agency partners. This is real value returned to the business in order to help our clients maximize their effective incremental business growth. What we do to achieve this is we are an impartial partner. We only work for brand advertisers, and we work with them through every stage of the advertising life cycle. We help our clients transform, govern and grow. Our Transform division really is our advisory and consultancy practice, strategic consultancy to make sure all parts of the media and advertising operating model are purpose-built around the strategy and objectives of our clients. We help design operating models. We help select agencies and other partners through our guided partner selection management processes, and we help design and deploy the technology infrastructure required to succeed in a changing advertising landscape. To give you an example, for a large automotive client, we help them design an operating model that was fit for purpose today, but ready for 2030, more than 5 years away when we delivered the work by designing a model that is modular and agile and can be updated along the way to be in line with contemporary best practices. We have an extensive partnership road map together built on a shared vision. We really integrate and embed ourselves in the organization of our partners, of our clients. And we delivered a 20% cost efficiency improvement versus the baseline from when we started the work. Governance, proactive media governance unlocks undiscovered value by identifying wastage or nonoptimal, suboptimal investments in advertising. We create transparency, help implement best practice and foster long-term trust. We do this by working with our clients structurally on an ongoing basis, help them create proper oversight and control over all their investments in media, both offline and online and apply to those investment data that we gather the best practices, rules, guardrails, taxonomies, naming conventions that our brands want to adhere to or want their partners to adhere to in order to deliver value. An example on the right, a case study of Perfetti Van Melle shows our governance program with them that was really focused around maximizing the impact of their investments, 85% of their investments are now effective and 15% of their investments are still up for maximization for improvement. In year 1, we identified up to 53% of value opportunity. More than half of their investments could be invested better, delivering more incremental business growth than it was currently doing. Our Contract Compliance work, which also falls within governance operated under our Firm Decisions. An example for an FMCG client on the right is where we delivered over 127 financial compliance audits in 48 markets over 5 years. Across these 127 audits, we found EUR 106 million in returns and findings for the client. That relates to an average ROI of more than 53x the fee paid to our Firm Decisions practice, which makes this a high-value, very positive return investment for our clients. And then we help clients, we help our partners grow, grow their business, grow their brands. We do this through our advanced analytics or Marketing Effectiveness that drives both immediate profit and long-term brand health. Our econometricians help clients through media mix modeling, brand equity, price promotions, geo testing, and we do this for some of the largest companies in the world. Virgin Media O2 is a long-standing Marketing Effectiveness client of Ebiquity, where we uncovered the factors driving effectiveness and efficiency through the studies we run, we ran and continue to run. We delivered 21% increase in brand effectiveness and 26% improvement in media ROI. Again, this shows you how specific and how deeply tangible the results are that we deliver in partnership with our clients. Ebiquity is the global authority in our field. We work for over 75 of the top 100 global brand advertisers. We do work for a total of more than 500 brands across the world where we operate. We do this across 123 countries. And every year, we analyze over $100 billion in media investment, which is more than 10% of the entire market. We're the market leader, and we have unprecedented and unparalleled access to data, best practice and benchmarks in this industry. We refer to our operating model as most global, most local. We have a global network capability that brings local intelligence into a globally consistent scope, which is why I believe we work for more than 75 of the top 100 global brand advertisers based on their global ad spend. We're able to work with their central leadership teams, and we partner as well with their local leadership and operational teams, no matter how fragmented or decentralized their operating models are, Ebiquity makes sure that we embed ourselves around their structure to deliver value, the maximum value for each of our clients. We provide global consistency as one global Ebiquity with experts on the ground, making advice relevant and applying local nuances. We have 18 offices worldwide covering all major advertising markets. This is really unique in our industry, and we believe the value of that local expertise combined with the global power of One Ebiquity really sets us apart in the market. We have technology that helps us deliver our work, not just more efficiently, but also unlocks a lot more value than could be derived when doing the work we do in the old ways. A huge part of our current infrastructure comes from the acquisition of Digital Decisions, my company, which was bought back in 2020 and has been complemented with other acquisitions and internally built proprietary infrastructure. We also use technologies through partnership licenses such as GMP365, which helps us deliver specific work within our global scope of services in a more efficient manner, driving more and better value for our clients. In our proprietary platform, we have $73 billion of ad spend down to a very granular level, most of which is pulled directly from all the relevant platforms used for trading and tracking digital media investments. This amounts to trillions of digital impressions annually across 123 countries. The depth and the breadth of our data is unique, and I believe this creates a very strong position for us as we enter an age in which AI becomes increasingly prevalent. The real differentiator, the competitive moat is in the proprietary or private data that we have structural access to as data custodians as managers of the data flowing through the industry. There is still a big opportunity for us in terms of geographic expansion. We have a significant footprint in U.K. and Ireland. In this market, global ad spend amounts to 5%, or ad spend amounts to 5% of the global ad spend. However, 42% of Ebiquity's revenue come from this region. We're pushing hard to expand geographically, especially in priority markets, such as the Americas, where global ad spend is 48%, but Ebiquity's extraction rate or share of our global revenues is 21% and Asia Pacific, where our revenue is 9% of our global revenue, but there is a 29% footprint of global ad spend. Europe and U.K. and Ireland are more mature, and we continue to see great opportunities for growth there. But I wanted to highlight this geographic opportunity, which is part of the reason for my global CEO approach where I'm in the markets and especially in our priority growth markets structurally. We are innovating for the future. We've made acquisitions in the last 5 years that enabled our ability to accelerate the strategy. It helped us scale in specific geographies. It helped develop and enhance our digital capabilities, and it helped us get access to technology for operating efficiency. In 2020, Ebiquity acquired Digital Decisions, which allowed Ebiquity to deliver productized digital solutions at much higher margins for more clients across the portfolio. In 2022, we expanded into Canada through acquiring Forde and Semple, which was a tactical acquisition. And before we bought the company, it was a partner firm of Ebiquity. Then also in 2022, in the second quarter, we purchased MMI and MediaPath. MMI gave us scale in the largest ad market, the U.S.A., and a very valuable high-value purpose-built technology called Circle Audit, which allowed us to audit media in the U.S. much more efficiently and drive much more value for clients. And we purchased MediaPath, which was previously a competitor of Ebiquity based in the Nordics, which also gave us access to new clients and exciting technology through an existing exclusive license with GMP365, helping us deliver operating efficiency on reviewing activity, especially across linear channels and help us run the media selection processes or agency selection processes more efficiently, delivering more value for clients and better workflows for their partners. We, within our market are leading when it comes to developing AI solutions and adoption internally, both through our establishing of the AI Center of Excellence, a committed investment of up to GBP 750,000 in 2025, depending on our cash provisions and headroom. And we have launched several solutions so far that are delivering exciting value, both for us, all staff within Ebiquity globally and for our clients. For any company, any knowledge company that handles sensitive proprietary data like Ebiquity does, we believe at Ebiquity, it is absolutely not an option to use third-party licensed chat interfaces or large language models to engage for making workflows more efficient and driving more value from a research process. This is why we have developed and launched ERAbot. This is a globally accessible to all 600 staff of Ebiquity worldwide environment behind our single sign-on and fully compliant in which any projects, any sensitive data can be handled by our employees and they can interact with cutting-edge large language models in order to get more work done or get more value out of the work they're doing for clients by having a custom purpose-built assistant, if you will, to help them deliver their work. As AI solutions are becoming more agentic in nature, which means they are undertaking more complex multistep processes on behalf of their operators autonomously, we identify a serious risk with regards to unexpected behavior and noncompliance as a result. All of our clients are currently both internally within their own organizations and externally with their partners such as agencies and technology platforms, experimenting with and deploying AI solutions to streamline workflows and to get more and better work done with less. Agentic AI or AI that is more complicated where less human oversight is available needs clear guardrails and instructions in order to deliver the results that the client wants to deliver and to mitigate risks. We at Ebiquity have released the ERA Curriculum solution. The ERA Curriculum stands for effective and responsible advertising, and it is essentially an AI-optimized guideline for any activity ranging from media planning to campaign setup to campaign optimization and reporting. What we do is together with the client, we make sure that all of the required rules, restrictions, guardrails, but also regulatory mandates, taxonomies and naming conventions are captured in an environment, essentially a training manual, which is codified so that it can be read and digested by AI applications, whether they are large language models or agentic AI models that are executing more complex tasks. What this allows us to do or to ensure together with our clients is that any such AI application, and this is compatible with all of the AI applications in the market, will be able to adhere to the guardrails that we set out together with the clients. They are tailored to clients, and we have universal rules. For example, for finance clients in the U.S., we build in the fair credit regulations, which, for example, prevent finance sector advertisers targeting or segmenting customers and potential customers based on ethnicity, age or gender. And we have universal principles such as privacy regulations that apply to all companies regardless of their sector. And as I said before, we complement that through a quite intense consulting with the actual client best practices, playbooks, taxonomies and naming conventions. We then codify this in our proprietary AIRF format. It is a file format similar to a PDF or an Excel, which we have optimized for use by AI. It is fully deduplicated and compressed so that the accuracy of learning and adhering to the rules is maximized, but the compute power required to actually digest the Era Curriculum is minimized. And as a result, that means less cost and importantly, for many of our clients, less carbon emissions because most AI applications are highly carbon intensive, and this helps minimize the carbon footprint of any such application. This is live today. We're working with our clients to deploy this, and we are planning to release our own agentic AI pre-flight check solution in the second half of 2025. What this will allow us to do is move Ebiquity's service model upstream as well as where we operate now. So in a complementary nature, we'll be able to do prechecks before campaigns actually go live to help our clients ensure compliance with their preferences and their key compliance guardrails before the campaigns actually run, which is a very exciting opportunity for Ebiquity and for our clients. Our growth strategy is created out of a combination of existing strategic priorities that the company has been working on for a while as well as new growth strategies or priorities that I will highlight on this slide. Our priority regions for accelerated growth continue to be the Americas and Asia Pacific. We continue to be focused on operational efficiency. We leverage our extensive client base through very focused client management and cross and upsell opportunities across the solutions we have to offer across transform, govern and grow. And we focus on increasing the revenue of digital solutions. On top of that, we are ensuring that Ebiquity is an AI leader, both enabling our staff worldwide to work better, more efficiently, derive more value from the data and access that we have and to provide client solutions that previously without AI support infrastructure were not commercially feasible, but now are. We have shifted our group focus from revenue to operating profit. All of our incentives, targets, objectives, budgets are now centrally based on operating profit. That is new for the company. Previously, it was largely based on revenue, which we believe is not the right way to run Ebiquity as we seek to become a more healthy, more profitable, more scalable business. We are integrating Marketing Effectiveness and Media Performance. This was operated more in silo in the past, and we've made the first steps to bring the 2 together. Both of these groups of services really come down to the same thing, maximizing incremental business growth for our clients. And this is one of the assets that is unique to Ebiquity. There is no competitor that has the combination of the media performance capabilities and the marketing effectiveness capabilities that Ebiquity has. And we believe this is where the industry is moving under our direction. We are focused on One Ebiquity, removing resistance or friction internally and making sure that everyone has -- is enabled to bring to market the best that Ebiquity has to offer. This involves remodeling and restructuring some of our internal financial reporting and our incentives, as mentioned before. But also, it requires a cultural shift. We are all part of One Ebiquity. We have built or the company has come to be what it is today through a largely acquisition-based federalized approach, and we have made huge improvements already in bringing the company together, integrating it and making the experience for our clients more seamless and much more valuable. We have refreshed the Ebiquity narrative and positioning, including a new website and new collateral, again, making it easier to buy from us, making it easier to partner with Ebiquity and get the most value possible. We're rallying behind ERA, effective and responsible advertising. And we're very focused on emerging channels. Right now, that means streaming TV or CTV and retail media, the fastest-growing channels in the industry where clients need trusted support and they need to help -- they need help with identifying the opportunities to improve how they activate these channels and how they maximize the returns for their business as a result of these investments. What is interesting in the current landscape where most large analysts seem to be in agreement that it is likely that we are heading into some kind of recession, the scale of which is TBD is that Ebiquity is a proven partner for brands navigating challenging economic cycles, whether the pandemic like COVID, the Russian invasion of Ukraine or the specific to automotive chip shortage crisis. Our clients, our partners rely on Ebiquity to help them navigate these macroeconomic external conditions and make the best possible decisions under the new mandate set by their leadership. What we see now, for example, is that more and more clients are preparing for a potential recession by making cuts to their marketing investments. Ebiquity helps them cut the right things in order to preserve as much value as possible to come out of the recessionary conditions set up as best as they can in the new competitive landscape. We are soon releasing a report in the coming weeks, the ROI of resilience or a guideline on how to advertise through economic uncertainty, updated specifically for the tariff-induced economic conditions that the world is facing. Now to close, I wanted to just highlight why I think it is a great time to join me as an Ebiquity shareholder. As said before, I am the largest individual shareholder of the company. I'm also the Group Chief Executive. I'm fully committed to Ebiquity's opportunity and Ebiquity's near, mid- and long-term future. We have gone through a significant transformation from 2022 to 2024, and we're out of that. We're ready to capitalize on the new structure and to accelerate our growth and our momentum from here. We have new leadership in place set up to deliver profitable growth and innovation. There is strong momentum behind our positioning around effective and responsible advertising. This is, again, unique to Ebiquity. We're dedicated to ERA as are our clients, is what we believe. We have a significant lead in AI, both in terms of our internal compliant and secure capabilities and the solutions we're able to deliver for clients. These are actual value-delivering solutions, not just buzzwords included in the presentation. We're delivering against this, and we're making capital commitments to be able to deliver moving forward. And I believe, as to most of the analysts, we have a materially undervalued share price. We look forward to working with a group of shareholders that are committed to this opportunity, and we'll see this through together with us. I will stop sharing and see if there are any questions in the Q&A as we have 15 minutes to answer any questions you may have. And I'll ask Kayte to come back on the screen. I'll preface this by saying Kayte has been in the role for a month, and it's been going really incredibly well. There could be some cases or some metrics that are not top of mind in which case, we will follow up with you afterwards. But I believe most, if not everything, we'll be able to cover live. Of course, if there are any questions, please submit them to the Q&A function. And if there are no questions in a minute or so, we will dial off.

Okay. A question around ERA Curriculum. How are you pricing the ERA Curriculum? Is it priced into the existing structure? Great question. The ERA Curriculum is priced or the commercial model is structured in 2 ways. There is a design and implementation phase, which is a consulting project ranging from 2 to 6 months in total execution, a high-value consultancy exercise delivered in its entirety within that time frame, within the scope. Then we have a maintenance and hosting subscription, which basically allows our clients structurally to have live access, secure access with any of their internal or external applications, AI applications to the curriculum. And we continuously update, for example, the regulations that are applied in the ERA Curriculum and any evolving best practices throughout the year. That will be based on a fixed price subscription essentially to the maintenance and hosting of the ERA Curriculum. And then another question on AI, is GBP 750,000 enough to be spending on AI in the current year? I want to make sure that I highlight that it is GBP 750,000 CapEx incremental to the ongoing investments already made through our own internal production environment and the infrastructure that we license and build. And it is a huge improvement on what we already have and allows us to accelerate some of the initiatives. We believe that it is a very strong provision for the team to accelerate. Is it enough? Perhaps in an other climate, we would be able to allocate more. However, we continue to be very, very focused and dedicated on bringing our net debt down through organic growth and cash conversion. And we don't want to move too fast on our CapEx commitments before we manage to get into a more delevered position. Then there is a question, what sort of percentage increase in media budget pie are you now able to go after by moving upstream with your upcoming AI agentic tool? And are there any particular markets or regions that are most keen to start using it? It's difficult to make anything more than a crystal ball prediction at this stage. We are yet to even enter market validation and full commercial deployment, but we believe it is going to be a very strong asset for us with clients that have historically seen Ebiquity's model of reviewing investments after they have been made as being too downstream for their preferences. So we believe there is a whole new segment of clients and opportunities that we'll be able to tap into on top of being able to expand the scope with existing clients where we do most of our downstream work today. With regards to particular markets or regions that are most keen to start using it, it is too early to say anything of substance there. And then there's a question, what do you think operating margins could get to given the mix effect shifts? Kayte, do you have an opinion on this or a position or do you want me to cover?

No. I mean it's obviously something that we're going to be focusing on quite strongly. There's a big opportunity for us to really drive that topline growth, which we would see as improving our margins and also the efficiencies around cost and tech-enabled growth are also going to be key. Difficult to say at this stage or to put a number on it, but it is something we're obviously really focused on making it better and better incrementally year-on-year. I don't know if there's anything you'd add, Ruben?

Yes. As I've said in the initial roadshow with investors, I think we can very comfortably aim on the midterm to a solid margin profile of 20% to 25% for the business. How soon we get there is TBD. But as I said during this presentation and as highlighted by Kayte, our focus has fully shifted to operating profit, which is new for the company that was primarily focused on revenue historically. And we believe that will have a major impact on the margin profile of the business. Then there is a question. The report mentions lower renewals and reduced scope in North America in Media Performance. Do you ascribe this to the market? Or is there something more specific going on beyond the tech and retail piece? So North America was a challenge for us last year. North America went through several years of huge growth. And I think we had a slight correction a year where we weren't able to continue that growth and had to make some restructures in order to enable a continued growth trajectory for the business, delivering sustainably and making sure that we could recognize the revenue we closed on time. Also, there were some newer entrants in the space where we have faced some pricing pressures, which we believe have been largely addressed as we are continuing to focus on the outsized value we can deliver for clients compared to our peers. We -- yes, I think that hopefully answers the question. It continues to be a priority market with a huge opportunity, especially when you look at the extraction rate for the market versus our current revenue split by region, as highlighted in the presentation. Good. I think there are no further questions at this stage. I would like to thank everyone very much for dialing in this morning. I hope you know that you can find and approach us if there's any follow-up questions. I want to thank Kayte for joining me only a month in on this presentation. It's great to be working together and represent the company in this way. And I wish everyone a fantastic week ahead. Thank you very much.