Ebiquity plc ($EBQ)

Fantastic, good morning, everyone, and thank you for joining Ebiquity's Full Year 2025 Results Presentation. My name is Ruben Schreurs, Group Chief Executive Officer; and I'm joined today by Kate Herrity, our Chief Financial Officer. [Operator Instructions]. A brief word on us. I was appointed CEO in November 2024, having joined Ebiquity in 2020, following the acquisition of Digital Decisions, a company that I founded. Before assuming the CEO role, I served as Chief Strategy Officer and Chief Product Officer. I hold approximately 7% of Ebiquity's issued share capital, making me the company's largest private shareholder. I say that not as a biographical detail, but as a statement of alignment. My financial interests and yours are entirely aligned. Kate joined us as CFO in March 2025, bringing deep financial leadership experience from senior roles at TalkTalk, Kantar, Informa, Liberty Global and Sky. She has been instrumental in building the financial and operational discipline that underpins the actions that we will describe today. We have structured the agenda into four parts. I will begin with an honest assessment of 2025 and our market positioning. Kate will then take you through the financial results in detail. I will return to cover what differentiates us in the market, the progress we have made across the business and our priorities for 2026. We will then open for questions. Let me begin with 2025. The headline is straightforward. Our financial performance was disappointing. Revenue of GBP 73.4 million, adjusted operating profit of GBP 4.6 million, and adjusted operating margin of 6.3% and a statutory operating loss of GBP 8.6 million. These are not the numbers we set out to deliver, and our share price has reflected this. As the company's largest private shareholder, I feel the weight of that directly. What drove the shortfall? Three things. First, North America. Tariff uncertainty, client budget retrenchment, extended decision cycles and project deferrals combined to produce a significantly more challenging environment than we anticipated. Our exposure to that market at 7% of group revenue meant the impact has been material. Second, we entered the year carrying a cost base that was too large for the revenues that we were generating. And third, we lack the right leadership in parts of the business and did not have sufficient discipline around sustained profitability. We have acted decisively. We restructured the cost base, removing 38 roles. We appointed new leadership in North America and across several critical functions. We introduced rigorous cost and cash controls, and we continue to invest in our effectiveness and media performance capabilities. Because the long-term competitive position of this business depends on that. Kate will walk you through how these actions flow through to the financial statements. What I want to emphasize here is that every one of these changes is now embedded and operational. Before handing to Kate, let me reframe or let me frame the broader context. Ebiquity is the independent authority in marketing effectiveness. Marketing measurement and optimization is what we do day in, day out for more than 75 of the world's top 100 brand advertisers based on their global ad spend and over 500 skilled regional and local brands across 122 countries. We hold over USD 91 billion of transacted granular media data in our media data fault, a proprietary asset built over decades that will be exceptionally difficult to replicate. We have embedded proprietary AI capability into our operating model and our integrated transform, Govern, Grow framework addresses the full advertising life cycle, enabling us to operate as one Ebiquity. We enter 2026 with a remodeled cost base, strengthened leadership, proprietary technology that is deployed and delivering results and a healthy pipeline. Kate will now take you through the numbers.

Thanks, Ruben, and good morning, everyone. So I'm going to take you through our full year 2025 results, which are in line with what we disclosed in our January trading statement. I want to be clear about both what drove the results and what we've done in response. So starting with the key highlights. Revenue of GBP 73.4 million was down 4% on the prior year, and adjusted operating profit came in at GBP 4.6 million, down GBP 3.3 million compared to the prior year, with operating profit margins at 6.3% versus 10.3% last year. These are numbers that fell short of where we wanted to be, and I will come to what drove them. What is encouraging to see is the discipline we applied to costs with project-related costs reduced by 10% to GBP 6.6 million. And perhaps most positively, our disciplined focus on cash management has delivered real results. Adjusted cash from operations increased to GBP 12.8 million from GBP 9.6 million last year. We returned to positive free cash flow of GBP 3.1 million compared to an outflow of GBP 2.6 million in 2024, and we reduced net debt by GBP 2.5 million to GBP 13.1 million. I will come back to each of these in more detail shortly. So on the next slide, this slide shows the income statement with revenue of GBP 73.4 million against GBP 76.8 million last year. The project-related costs came down by GBP 0.7 million, which reflected in renegotiated supplier terms on the reduction from lower revenues. On staff costs, these were broadly flat at GBP 49.3 million. In 2025, we ran a global restructuring program, which resulted in 38 roles leaving the business, but was also focused on reshaping the organization and rehiring into the capabilities and roles that will drive the business forward. Our approach to staff costs in 2026 will remain disciplined, ensuring that our cost base is structured to support the direction in which Ebiquity is looking to grow. Operating expenses increased slightly to GBP 12.9 million, reflecting higher investment in travel to support client relationships and investment in marketing to strengthen our market presence and investments in technology to build our capabilities for the future. Finance costs increased to GBP 3.5 million compared to GBP 1.4 million last year. The primary driver of this increase was a GBP 1.4 million noncash foreign exchange loss on intercompany loans, mainly driven by the impact of the stronger euro and the weaker dollar against the pound. Underlying interest costs were actually lower year-on-year, reflecting the benefit of lower average borrowings and lower interest rates on our facility. The statutory loss after tax of GBP 14 million was driven by the GBP 10 million goodwill impairment in North America, which I'll come to shortly. The adjusted loss after tax of GBP 1.9 million compares to a profit of GBP 4.4 million last year, reflecting the operating profit decline and a higher noncash intercompany FX costs. So before we move on to the regional and service line detail, it's worth looking at our revenue base is structured. So on the right-hand side of this slide is our geographic split. The U.K. and Ireland is our largest market at 45% of revenue, Continental Europe at 28%. And then we have North America at 17% and APAC at 10%. North America, as you will see in the numbers, is where the pressure came from in 2025. You can see that we serve global advertisers across all major regions, doing so through our own teams and where appropriate through local partner networks. On the left is the segmentation of our service mix and transform, govern, grow is the way that we now look at the product offerings that we bring to our clients. So to give you a translation back to how we've talked about these things before, transform maps to our media management service line, where we work with clients to help them select appoint and manage their agency relationships and internal operating models. Govern maps to media performance and contract compliance and gives clients control and visibility over their advertising investments by benchmarking, tracking and auditing, checking that their money is working hard and they're getting value for what they've invested. And Grow maps to our marketing effectiveness service line. It helps our clients to understand whether their marketing is driving business growth, which channels and campaigns are working and which are not and how to allocate their budgets to maximize return. So these charts illustrate that we've got genuine global reach, combined with deep and broad local expertise, and they set the context for the numbers which follow. Looking at the regional performance, U.K. and Ireland delivered 5% growth to GBP 33 million, driven by transform revenues, which were up 71% year-on-year. As our largest market, it's good to see that the business is performing very well here. Continental Europe revenue was down 6% at GBP 19.8 million, driven by a combination of factors. Italy grew 35% under new management and Portugal also grew well, but there was softness in France and Germany offsetting those gains. APAC was flat at GBP 7.7 million, with strong growth in transform revenues offset by lower government revenues in China. North America was down 23% to GBP 12.8 million. Client losses, project deferrals and extended decision cycles all contributed with the context of a macro environment, which has been persistently more challenging than we anticipated. Excluding North America, the rest of the group saw a slight growth year-on-year. The performance shortfall is largely a North American story, which has given us a clear focus for where the recovery needs to come from, and we've already begun to take those steps with restructuring and leadership changes already implemented. So turning to the analysis of our service lines. Govern, which is 75% of our revenue, declined by 7% to GBP 54.8 million. Within Govern, Media Performance fell 9% to GBP 46.5 million, with GBP 3.5 million of that downside in North America across benchmarking, value track and audit. Outside of North America, Media Performance held up reasonably well. Also within Government, Contract Compliance was a strong performer, up 7% globally with particularly good growth in U.K. and Ireland, Germany, India and Australia. Transform grew 6% to GBP 8.4 million with strong momentum in U.K. and Ireland, Australia and Singapore. Transform is an area of real strategic opportunity for us given the significant changes unfolding in the agency landscape and the trajectory is encouraging. Our grow offering was flat at GBP 10.2 million, impacted by specific 2024 client loss. Significant new wins in U.K. and Ireland and North America towards the end of 2025 are indicative of good momentum into 2026. On the balance sheet, net assets decreased by GBP 11.8 million to GBP 24 million. The primary driver is the noncash required accounting adjustment impairing North American goodwill by GBP 10 million following the underperformance in that market and other noncurrent assets reduced by GBP 1.7 million, driven by the GBP 1.2 million derecognition of the North American deferred tax asset, which is consistent with the impairment in the goodwill. Net working capital reduced from GBP 10.6 million to GBP 6.1 million, a GBP 4.5 million improvement, which reflects the billing and collection discipline, I mentioned earlier and which feeds directly into our positive cash position. Contingent consideration is now 0. The July 2025 settlement MMI settlement of $875,000 in cash and $218,000 in shares closed out all historical and acquisition earn-out obligations. With the last of those liabilities behind us, we can focus our attention on the reduction of our net debt with our cash flow. So turning to cash flow. This is probably the slide I'm most pleased about. Adjusted cash from operations of GBP 12.8 million compares to GBP 9.6 million last year, a 279% conversion ratio against 122% in '24. That improvement came almost entirely from working capital, where we moved from a GBP 2.2 million outflow to a GBP 4.7 million inflow. Highlighted cash items of GBP 2.5 million were lower than the GBP 4.1 million last year, comprising severance and reorganization costs and fees related to the March 2025 refinancing. Positive free cash flow of GBP 3.1 million compares to an outflow of GBP 2.6 million in 2024 with a GBP 5.7 million improvement being a result of the cash focus we applied across the whole business, including dialing up the discipline across billing terms, payment terms and cash collections across the group. And finally, on to net debt. Again, a good news slide. We ended the year at GBP 13.1 million net debt, down from GBP 15.6 million, a GBP 2.5 million reduction. And in April 26, we refinanced our revolving credit facility, reducing it to GBP 28 million and extending it until October 2027, and we remain compliant with our covenants. So to close, 2025 was not an easy year, and the numbers reflect that. But we've taken the right actions on costs, on leadership, working capital and the balance sheet, which means that we've gone into 2026 with a more focused business with the right structure and capabilities in place to grow. North America represents a significant opportunity for us on market recovery. The momentum in Transform, new client wins in Grow at the end of last year and our improved cash discipline all give us a solid base to build from. We look forward to sharing more details at our upcoming Capital Markets Day. Thank you, and back over to Ruben.

Thank you very much, Kate. Let me now turn to why we are confident in what lies ahead, starting with the market in which we operate. Marketing is a material expenditure for brand organizations with an average of 7.7% of total corporate revenues invested in it according to the most recent Gartner CMO Spend Survey. It is also the most important driver of revenue and growth for brands, our clients. That combination, scale of investment and criticality to commercial outcomes makes marketing central to the strategy of most of the companies we work with. Within marketing, paid media accounts for over 30% of total investments, making it the largest single spend category, ahead of marketing technology, labor and agencies. Growth continues to be strong with double-digit increase expected for 2026 and global media ad spend estimated to exceed USD 1.15 trillion. Ebiquity is the de facto expert and authority in paid media. That position solidifies our highly differentiated role within the marketing effectiveness ecosystem. Research we produced and published in partnership with ThinkBox, Game Theory and the WPP media agencies in profitability too demonstrates the economic power of well-optimized advertising. For every pound, euro or dollar invested, the short-term incremental profit return is 1.87 and the total term incremental profit return is 4.11. Those are compelling economics. Very few organizations, however, are able to reliably measure and optimize this at scale, but Ebiquity is one of them. Let me put the value of what we do into perspective. We regularly identify substantial areas of wastage or ineffective spend for our clients. Take a single large advertiser where we identify $100 million of wasted or misallocated spend. When we help them redirect that investment to highly effective channels and strategies, taking a prudent view, let us say that this then drives the average incremental profit of $411 million, as I showed on the last slide. At an EV/EBITDA multiple of 13x, that translates to more than $5 billion of annualized equity value for the company. That makes the business case for partnership with Ebiquity a straightforward one. And that multiple isn't grabbed out of thin air. Just to highlight a few of our clients, we took 13x, which is the current trading multiple of Unilever. But when you look at L'Oreal, for example, that's currently at 19x. So there is a material opportunity working with Ebiquity for brands. So let me be specific about what differentiates us. We analyze more than USD 100 billion in media investments annually. We serve more than 75 of the top 100 global advertisers and more than 500 scaled regional and local brands across 122 countries. Our media data vault built over decades of ingesting granular transacted media data gives us an analytical depth that no competitor can match at scale. Management consultancies don't have our data. Agency networks face inherent conflicts of interest, marking their own homework. And point solution technology vendors lack our breadth. We combine scale, independence, proprietary data and deep expertise in a way that is genuinely differentiated. That combination creates a compounding advantage as we analyze more spend, our data grows richer, which delivers greater value to our clients and drives them to expand their engagement with us. The economics of our model improve with scale. Our skill and authority are fundamental to our position as exclusive strategic partner for effectiveness of the World Federation of Advertisers, the largest and most influential global advertising trade body. And I'm dialing in today from Stockholm, where we are a lead partner on the WFAs Global Market Week, which is the marquee or landmark event for CMOs, global heads of media and other senior leadership professionals from brand organizations. Our three service lines, Transform, Govern and Grow, address distinct stages of the advertising life cycle and are designed to work together. Clients who engage with us for one service frequently expand into others. And the cross-sell dynamic within this framework is meaningful as we prioritize long-term strategic client relationships. In 2025, 19% of our revenue was delivered for clients that buy services across all three service lines, underwriting the strategic and deeply embedded relationship that we've built. Cross and up-selling and strategic account management is a strategic priority for us. Transform is our marketing transformation as an agency selection process practice. In 2025, we delivered 159 agency selection engagements globally. In January 2026, we have appointed David Muldoon, who was formerly at MediaLink and Walgreens Boots Alliance as Global Managing Director of Marketing Transformation to scale this offering. The context here is important. The agency landscape is undergoing structural change. Holding company consolidation, the rise of in-housing media spend and the integration of AI into media planning and buying are creating fundamental questions for advertisers about their operating models and their agency partnerships. We are the independent adviser they turn to when those decisions need to be made. In 2026, our priority is to convert this into larger multi-market transformation engagements. The demand pipeline has grown significantly, and David's appointment is designed to accelerate conversion. Govern is our largest service line and the backbone of Ebiquity. Through our data management platform, we analyze over $100 billion in advertising investments across 122 countries every year. In 2025, 112 clients adopted our digital media suite of services. Over 80 advertisers work with Firm Decisions, our contract compliance and agency governance business, and we expanded that offering into creative and influencer auditing. We launched the ERA curriculum, a structured framework for media buying guidelines that supports both human decision-makers and the emerging generation of AI-based media buying agents. We became a founding member of SCP, the open standard for Agentic advertising, and we delivered our first total TV solution. Addressing the convergence of linear TV and streaming television. In 2026, our priorities are to roll out the ERA curriculum across skilled advertisers, expand our total TV solution in more markets and grow adoption of governance solutions across enterprise clients. Each of these initiatives sits where the industry is heading and where we have a clear right to win. Grow is our marketing effectiveness practice and represents our most significant growth opportunity. In 2025, we deployed a new technology platform to improve partnership effectiveness and operations. In December alone, we secured marketing effectiveness engagements with an aggregate contract value exceeding GBP 10 million over their 3-year terms. We strengthened the leadership with the appointment of Nick Pugh, who has over 20 years of marketing effectiveness experience as our Group Chief Marketing Effectiveness Officer; and Stephen Tobias as Marketing Effectiveness Director for the Americas. In 2026, we will build on that momentum to accelerate commercial growth across priority markets and expand client adoption of our integrated metrics that matter offering. The demand for independent marketing effectiveness expertise is increasing as advertisers face intensifying pressure to demonstrate return on investment. Let me now turn to the broader progress we have made across the company. We have organized our progress around five pillars. First, we unified the entire business around our core position as the independent authority in marketing effectiveness. That clarity of purpose has sharpened our go-to-market approach and strengthened how we communicate value to clients and prospects. Second, our SPC, our own staff cost to profit conversion metric. We have deployed this globally in mid-2025 as the primary measure of operating performance. It gives every regional, local and client leader a clear lens on whether their engagements generate sufficient margin to support continued investment. It has changed commercial behavior in scoping, pricing, utilization and service mix, and it shaped our entire 2026 budgeting process. Third, our proprietary AI infrastructure. Over 90% of our workforce is now using our own proprietary AI tools daily, delivering measurable productivity gains and improving analytical quality. Fourth, leadership. We have significantly strengthened our leadership team and united our global organization around our most local, most global philosophy and our ERA mission, which stands for effective and responsible advertising. Fifth, our Transform, Govern, Grow framework. This integrated approach strengthens our position as a trusted adviser to the world's top advertisers and creates the cross-sell dynamic that drives revenue growth and profit growth per client. I want to zoom in on the third point, as we are delivering outstanding results with our focus on proprietary technology development with highly effective and lean deployment based on our limited CapEx. In 2025, we deployed ERAbot, our proprietary Agentic AI infrastructure across the entire organization worldwide. ERAbot accesses our methodologies, our knowledge base and our media data hold to surface insights faster and at greater depth. The result is that our staff can deliver better analysis, faster delivery and more consistent quality for our clients. Beyond internal productivity, we have launched direct client integrations and introduced client-facing AI solutions in the second half of 2025. Our infrastructure enables direct integrations with the AI systems our clients use, which positions us for the next generation of consulting, where insight delivery is Agentic and continuous rather than episodic. We are building owned governed infrastructure that makes our experts more productive and our client solutions more scalable without compromising the independence, security or analytical rigor that our clients depend on. Our market presence strengthened materially in 2025. Inbound leads grew 111% year-on-year from a base that was already meaningful. Our Net Promoter Score increased by 41%. PR features, Ebiquity in the press grew by 57%. And we maintain strong industry partnerships and regularly release major research, most recently in partnership with TikTok. In October 2025, we hosted ERA26, our inaugural annual event, bringing together more than 200 senior marketing leaders to explore how advertisers can build more effective, trusted and sustainable marketing investment strategies. We also established the Ebiquity Advisory Board, comprising distinguished industry experts who extend our reach and credibility in the market. So what does 2026 look like? We are focused on 4 priorities: First, accelerating growth through leadership in integrated effectiveness. The market is moving towards holistic solutions that connect strategy, governance and performance. Our transform Govern growth framework positions us to capture that demand. Second, building on the commercial foundation we have established in North America. The macro environment remains uncertain, and we are clear-eyed about that. What has changed is the quality of leadership on the ground, a rightsized cost base and the sales momentum that built through Q4 2025, and we have appointed a high-caliber Head of Growth for the Americas to continue driving that trajectory. Third, using SPC as our primary metric for operating excellence. Every business unit is now managed against this metric. It drives the commercial discipline required to build sustainable profitability. And fourth, Kate and I and the wider business as a result of that are maintaining our focus on cash collections and working capital management that was such a key part of delivering strong results in 2025 in this area. We will share more detail on our strategic direction at our Capital Markets Day on June 29, which will be an opportunity to present our strategy and introduce our leadership team to current and prospective investors. To close, 2025 was a year of difficult but necessary change. The financial results fell short of what we set out to deliver. We have been transparent about the causes and direct about the actions that we have taken. The leadership team is in place, aligned and focused on sustainable, profitable growth. We have applied rigorous cost and cash management. Our cost base has been restructured. AI and proprietary technology are embedded in both our operations and our client offerings. Macroeconomic and geopolitical headwinds persist, and we are also realistic about that. But Ebiquity occupies a differentiated position in a large and a growing market. The structural dynamics of the advertising industry, rising spend, increasing complexity, growing demand for accountability play directly to our strengths. As the company's largest private shareholder, I remain personally committed to translating that position into shareholder value. I want to thank our clients for their continued trust, our global team for their commitment through a demanding year and all of our shareholders for their patience and ongoing support. Please join us at our Capital Markets Day on June 29. Thank you. We will now take questions. We now invite Andy Renton on stage.

Obviously, well done on getting the business in the shape that it is in today. Just a couple of areas I thought it would be useful for you to expand on. One was the Total TV offering and just what you have needed to do and have done to get that where it needed to be, partnerships signed and a little bit more detail around that. And then also the metrics that matter offering and what that means.

Sure. Thank you very much, Andy. Starting with the Total TV offering. Really, this was a strategic decision that we made internally. We went to market with dedicated streaming and connected TV capabilities several years ago, but we approached the management of those solutions in an isolated manner. So we would zoom in on the quality, the cost effectiveness, the outcomes delivered by strictly and only connected TV investments. What we have done now is we've created a total TV solution, comprising of our best-in-class linear TV capabilities and benchmarks, our best-in-class CTV and connected TV and streaming TV capabilities, and we have brought them together into one solution, which is connected to our marketing effectiveness benchmarks. So we are now able to inform our clients holistically across the entire expenditure or investment into television as a medium regardless of the distribution platform. which is differentiated and very meaningful. And we are one of the first companies in the space that is removing that delineation between streaming TV and linear TV. Our position on this is that in the next 3 years or so, all delivery, even of live TV, which is often conflated with linear TV, will take place through streaming platforms or Internet connection TV setup boxes. So that is on the first point. The second point, metrics that matter. This is a key initiative, a key solution that has allowed us to integrate our marketing effectiveness capabilities. So for everyone on the call, the primary service we provide with about 80 people, many of whom are trained econometricians is marketing mix modeling, which means we use data that includes their sales and profit data and, of course, their investment data into marketing to model using our own platform and algorithms to model what the incremental returns are on their business, whether it's on sales, market share or profit as a result of their investments in the different marketing channels, and we're a specialist in media. Now we're bringing high-level benchmarks and insights from our marketing effectiveness capabilities into the work that we do primarily within Govern. So where we provide ongoing paid media measurement capabilities, we now help clients design what we refer to as a metrics that matter framework, which are operational, tactical and strategic proxy metrics that we can prove drive incremental sales and profit growth for their organization, which gives them a framework by which they can optimize daily, weekly, monthly, quarterly and annually. You're making decisions that are informed by real scientifically proven data points. And that's our metrics that matter solution. This is a key part of the agenda for Dr. Nick Pugh, who is now our Chief Marketing Effectiveness Officer and is driving that integration. I hope that answers your question. If anyone has a question, please feel free to raise your hand and you will be given control of the mic. And if not, of course, if everything was incredibly clear, then fantastic. I'll give it a minute or so to see if any other questions come in. And otherwise, I think we will close this session unless Kate, do you have anything to add?

No, that's great. Thanks...

Great. So while we wait for a few more seconds, let me thank everyone for joining today's call. As I said, we appreciate your ongoing support and your patience. We feel confident about where we are today and are very happy to be on this journey together with you as we turn this company around and return back to profitable growth. I think we will close. There are no further questions. So again, thank you for joining this morning. Have a lovely rest of your week, and I'm sure we will talk again soon. We hope to see all of you at our Capital Markets Day on June 29 at our offices in London. More information will follow.