S4 Capital plc (SFOR) Earnings Call Transcript & Summary

Okay. So it's 2 minutes past the appointed hour. Welcome, everybody. Good afternoon. Welcome to this Annual General Meeting of your company. We have a quorum, and I have great pleasure in declaring the meeting open. As you're aware, this is a hybrid meeting which enables our shareowners to participate either in person or virtually. And I'm pleased to welcome those of you joining us in person today, and I continue to value the participation by those of you who are joining us remotely. Before providing an update on the business and current developments, we've got -- I should warn you, we have a lengthy presentation. I would like to take this opportunity to explain how the formal business of the meeting will proceed and how you will be able to vote on the resolutions proposed in the notice that you have of the Annual General Meeting. That notice was sent to all shareowners on the 13th of April, and at the same time was made available on our website. I would, therefore, ask your permission to take the notice of the meeting as read. Okay. Thank you. We should be taking a poll on each resolution, and I now propose formally that each of the resolutions that are set out in the notice of the Annual General Meeting is put to the vote of the meeting. Resolution 1 to 21, are proposed as ordinary resolutions and require a simple majority of the votes to be cast in favor. Resolutions 21 to 25 are proposed as special resolutions and require at least 75% of the votes to be cast in favor to be passed. Now the voting. All resolutions at our shareowners' meetings are decided by polls and our Registrar, share registrars, is present at the pole scrutineer to count the votes at the end of the meeting. The directors are all unanimously in favor of each resolution and recommend that you vote in favor. On a poll, each member present in person, by corporate representative or by proxy is entitled to one vote for every share held by them or the shareowner whom they represent as the case may be. A person entitled to more than one vote need not use all his votes and will cast all votes he uses in the same way. All shareowners, proxies and corporate representatives here today should have been provided with a poll card on arrival. If you don't have either of these, please raise your hand now and a steward will assist you. All got your poll cards. Okay. Please fill in the full name and address of the shareowner in Block capitals. If you are a third-party proxy or corporate representative, please write your full name in the space provided. In addition to that, on the person of the company you've been appointed to represent. If there are 2 or more persons present representing a joint holding, the person whose name appears first on the register members should complete and sign the poll card. Their votes will be accepted to the exclusion of the other joint holders. Please indicate your vote for each resolution by putting across in either the for or against or vote withheld box. Please note that a vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or against the resolution. Please ensure that you sign your poll card and hand it to a steward as you leave the room. For those shareholders joining us virtually via the online platform, the list of resolutions should have appeared on your screen automatically. Although depending on your device, you may need to select the voting icon from within the navigation bar to see the resolutions. You should also see for or against them vote withheld voting options. To register your votes, please select one of those options. If you change your mind, you just need to select another option. You can change your mind as many times as you wish up until the close of the poll. There is no submit button. When you click on your preferred voting option, the icon will change color to indicate that your vote has been submitted. We will close the voting once we have concluded the Q&A section, and I will give you a clear prompt later in the meeting to warn of the close in voting. The poll is now open. We will also take the opportunity for general business questions and discussion from the floor and online. Online voters can start submitting questions now using the online meeting platform, which we will address later in the proceedings. [Operator Instructions] Now I'd like to bring our shareowners up to date on current developments. This is a statement we issued as an RNS earlier this morning at 7 a.m. 2022 was a very strong fifth growth year for S4 Capital, posting like-for-like net revenue growth of 26% and together with the completion of combinations with XX Artists in the content practice and TheoremOne in Technology Services. Although like-for-like operational earnings before interest, depreciation and amortization, otherwise known as EBITDA growth and operational EBITDA margins were not where we targeted or where we wanted them to be. The pace of like-for-like net revenue growth in the first 4 months of 2023 has been more modest, reflecting the slowdown in growth. The growth rates of our 2 main addressable markets with technology platforms around 6% and Technology Services to 7% to 10%. We maintain our like-for-like 2023 net revenue growth guidance of 8% to 12% and excluding the impact of one whopper reduction and 6% to 10%, including it, combined with a targeted steady improvement in operational EBITDA margins to 15% to 16% and with operational EBITDA significantly skewed to the second half of the year as is usual. We want to take this opportunity to remind everyone of our company's definitive and differentiated strategy based on 4 core principles. We say our company as it is both your company as our shareowners and our company as your management team. We are still tightly aligned with you, with over 40% of our shareowners connected to our monks as we call them, or our directors. But back to those 4 core principles. We are purely digital because that's where the growth is even more so in a post-COVID-19 24/7 always on digital world. Our business model is to focus on first-party data, which in turn, fuels the creation, the production and distribution of digital advertising and marketing creative content through our Data&Digital Media, planning and buying and programmatic and performance executions. And we continue to expand our capabilities in Technology Services to fully provide digital marketing transformation services for our clients. The unique transformational shift to artificial intelligence known as AI and artificial generative intelligence known as AGI will only accelerate the pace of digital change and our mantra or strap line has now been modified to faster, better, cheaper and more to reflect our enhanced ability to accelerate copywriting and visualization to automate media planning and buying to use AI or AGI as a super tool in our operations to provide hyper personalization at greater scale and provide data to all our almost 9,000 monks in 57 offices in 32 countries. We have also initiated a new go-to-market positioning around now of which you will hear more shortly. Finally, our organizational structure is unitary with a single P&L as clients want the best people working on their business, not caring where they come from. Having built out our content practice over the last 5 years around Media.Monks and our Data&Digital Media practice around MightyHive over the same period. We added 8 companies in the last 7 months of 2021 and the first 5 months of 2022 before the last AGM and one in the last 7 months of 2022 before this one. The pace of merger activity has lessened recently as we focus on deeper integration of the mergers that have been completed from the earliest point possible and extracting synergies, particularly revenue synergies to underline the importance of our unitary structure. Since our last AGM in June of 2022, our company has maintained its number of monks at under 9,000 despite significant net revenue like-for-like growth in 32 countries having withdrawn from Russia. At the same time, we continue to strengthen our financial control, our treasury, compliance, risk and governance and internal audit resources and hone our pricing and estimating functions. Forecast for 2023 and 2024 global GDP growth have been continuously reduced to approximately 2% to 2.5% and reflecting central banks raising interest rates sharply but perhaps too [ tardily ] and government-driven fiscal tightening. The impact of these financial policies has been deepened by 3 geopolitical forces. The deterioration in U.S.-China relations, particularly over the future of Taiwan, the war in Ukraine and Russia's territorial ambitions and the potential nuclear capability we run. For the foreseeable future, the world is going to be a very different place to the previous 50-or-so years of globalization. Growth will be lower and inflation and interest rates higher than previously. As a result, geographical growth would be more difficult to find and also fragmented with a focus on the higher-growth Americas, that's Northern South America, the Middle East and Asia Pacific. And in that lower overall growth world, the pace of digital transformation will intensify, facilitated by AI and AGI as clients seek to reduce costs and maintain margins. Our 2 major addressable markets, digital advertising driven by the technology platforms and digital transformation looks set to grow this year by 7% to 10%. According to analysts, it will then reaccelerate in 2024 and 2025 to 10% to 15% in the key U.S. Media market as digital advertising reaches 75% of client budgets by 2025. This tends to favor digitally focused businesses like our own, which focus on the so-called lower funnel work or performance and activation work and which is understandably performance and results orientated. As in previous years, the company continues to invest in talent or human capital in order to attract, to develop and to grow the human fabric of the company which is essential to achieving high organic growth rates. The S4 Fellowship Program aimed at recruiting interns from historically black universities and the S4 Women Leadership Program with University College Berkeley are both developing their third programs, representing good examples of our diversity, our equity and our inclusion initiatives. In addition, the S4 Scholars Program, aims specifically at recruiting high school students will be implemented. We always knew that our people being digital natives, would adapt effortlessly and productively to working from home, and as a result, we are further developing a hybrid office model, which accommodates those of our people who want to work more from home and those who want to commute more flexibly and provide space for working interactive with colleagues and interacting with clients. We have terminated a number of our office leases, which have enabled us to integrate our operations even faster than we originally thought in the cities in which we operate. The company's cash flow remains strong, and our company will continue to examine strategic combinations, but only issuing equity at share price levels prevailing in early 2022. As indicated in our Q1 results, we will shortly start to buy back the underlying shares and stock options issued each year to management, which amounts to approximately 1% of the issued share capital or approximately 6 million shares to counter dilution. Having achieved brand awareness and brand trial over our first 5 years, our focus remains on broadening and deepening existing client relationships and conversion at scale. Our 10 biggest clients achieved what we call whopper status in 2022. A whopper is defined is over GBP 20 million of revenues each year compared with 6 this time last year. But we still search for bigger and deeper relationships and a further 14 clients have been identified as having whopper potential over the 3-year plan period 2023 to 2025. Our overall objective remains 20 in total. Since our last AGM, we have seen the expansion of our major client relationships with additional assignments and geographies. We also saw significant new business with engagements from new clients, including Philips, Diageo, PepsiCo, Booking.com, Tim Hortons, Pernod Ricard, TikTok, Bridgestone, Riot Games, M1, Walmart and Microsoft. Geographically, we remain present in 32 countries, and we do not believe that we will have to add more than 4 or 5 markets to our existing country tally. We continue to examine our needs for deeper strategic insight and adding further technology services, along with the increased focus on the importance of first-party data and the walled gardens following the death of the cookie and the change in IDFA rules, which we are already well positioned for. So before we go into Q&A from you, our senior leaders will give presentations on our trading update. And the presentation will be led by Mary as our CFO, Mary Basterfield, on strategy by our Chief Growth Officer, Scott Spirit, on our new positioning, which I mentioned before, around now by our Chief Creative Officer, [ Yuk Vermans ], a review of our content practice by our co-content practice leader, Bruno Lambertini, a review of our Data&Digital Media practice by our Chief Operating Officer, Chris Martin, a review of our Technology Services practice by its leader, Brady Brim-DeForest. And finally, Regina Romeijn our Global Head of ESG, will provide an update on our ESG activity. As the implications of the recent developments in AI and AGI are so significant, we are planning a separate presentation on these subjects to investors and stakeholders on the 28th of June and further details will be provided. So with that, as a starter, I'll hand over to Mary now for the trading update.

Thank you, Martin. Good afternoon, and thank you for joining us today. I'm going to take you through our financial performance for 2022 and trading update for the first quarter. But first, I'd like to start with an update on the work we have been doing to build out the finance team, processes and controls. Over the past 18 months, we've made several senior hires across finance and compliance. Including a group financial controller, a financial planning and analysis and financial transformation lead, a Group Treasurer and General Counsel. Their teams have now been built out and recruitment is largely complete. So our group finance team is well established appropriate for the size and growth ambitions of the company and is operating well. Our content finance team has stabilized under the leadership of a new CFO, who joined in the first quarter of 2022. It now has the necessary expertise and experience to support the practice and its revenue recognition. Our outsourced internal audit function has been working well, and we are now in the process of hiring a head of internal audit as planned. Whilst we have made significant improvements and the audit process for 2022 has been much smoother with results delivered in a timely manner, our work will continue during 2023. Moving to our financial highlights for 2022. Strong top line momentum continued during the year, and we delivered net revenue of GBP 892 million up 26% on a like-for-like basis. This was ahead of our 25% target and well ahead of underlying market growth. Operational EBITDA was GBP 124 million, slightly ahead of guidance. We significantly improved EBITDA in the second half and delivered GBP 94 million compared to GBP 30 million in the first half when personnel costs ran ahead of net revenue growth. This improvement was the result of continued top line growth, supported by tight controls on investment in people. Operational EBITDA margin for the year was 14%. This includes a significant improvement in the second half to 18%. Adjusted profit before tax was GBP 90 million, and adjusted earnings per share were 11.8p. We finished the year with net debt of GBP 110 million, below the guided range due to continued improvement of working capital management. Leverage was 0.8x. Moving into 2023. Our first quarter performance was in line with our expectations, with revenue of GBP 262 million, up 27% on a reported basis and 6% like-for-like. Net revenue of GBP 219 million was up 28% reported or 7% like-for-like. We maintain our full year guidance of 8% to 12% net revenue growth on a like-for-like basis after adjusting for the reduction in scope of one whopper account. On this basis, net revenue growth for Q1 was 8%. Given current economic uncertainty, we continue to manage our cost base tightly and to take selective cost actions with a focus on operational efficiency. We also maintain our full year operational EBITDA margin target of 15% to 16%. As usual, operational EBITDA will be significantly weighted to the second half. Net debt at the end of March was GBP 136 million, or 1x operational EBITDA. Our full year net debt guidance of GBP 180 million to GBP 220 million is unchanged as we have yet to make the final payments related to prior year combinations. With merger payments fully met in 2023, we expect net debt to decrease in 2024, given our current capital allocation strategy. In summary, the Board expects further progress for the full year as we continue to grow revenue and maintain tight control on costs. Thank you very much. With that, I will hand over to Scott.

Thank you very much, Mary. Good afternoon, everybody. I'm going to run through a few slides here, which outline our strategy at S4 Capital, and that's built on 4 founding principles. The first of those is our focus on digital. Our goal at S4 is to focus on addressable markets, which are growing and to outgrow those markets. As Martin said before, there are 2 core addressable markets, digital media spend and digital transformation spend. Digital media spend here on this slide is forecast from MoffettNathanson, which is a U.S.-based analyst. And another way to think of this is the advertising revenue from platforms such as Google, Facebook, Amazon, TikTok, Snap, Apple, et cetera. Total media spend grows at around 5% annually, and this is made up of much stronger growth in digital, which now represents around 60% of total low higher in the U.S. and stagnation and decline in traditional media such as TV and press. The second addressable market is digital transformation. This is the budget that enterprises spend to leverage technology and fundamentally change and improve business operations, customer experiences and organizational strategies. From a market share perspective, Ad Age puts us currently at 1% of the top 25 agencies and consultancies in our industry. Our goal is to increase the share and leverage our exclusive exposure to these markets, setting a foundation for growth and outperformance. Our second principle is our service offering across fee practices. Contemporary offering in high-demand areas. Content is creating innovative brand experiences for our clients at every stage of the customer experience. Data&Digital Media uses data to leverage insights and intelligence to inform every step of the customer journey and uses transparency and effectiveness as we plan and execute the Media buy. Technology Services designs and builds the technology architecture that underpins our clients' strategy and their operations. These services tap into budgets across the enterprise and we interact and partner with client marketers and technologists as they work to transform and grow their companies. Our third principle is how we go to market, our mantra of faster, better, cheaper and more. Faster is around our ability to respond quickly and work in an agile manner with our clients, to address their business and marketing opportunities with speed. Better is our ambition to be the best possible partner to the world's leading technology companies and platforms and provide services around their product portfolios. It is, of course, helpful that all of these tech companies are also major clients of S4. Cheaper is our commitment to help clients achieve and exceed their financial goals, creating the best possible return on their budgets and building investment cases for marketing and technology spend. More specifically addresses the advances we're seeing in technology, especially artificial intelligence. Capitalizing on new technology and innovation to help them achieve more. As Martin mentioned, we'll have a separate virtual session for investors on this hosted by Wes on June 28. And we'll send out and post details on how to join that soon. All of these speak to our commitment to help clients now and more of which you'll hear later from [ Yuka ]. Our fourth and final principle is that we do this with a unitary structure, a single brand and P&L, avoiding the disjointed and siloed approaches typical in our industry. This means we provide truly integrated solutions for our clients, broader career experiences for our people and a more profitable model for our shareholders. And we believe these 4 principles position us very well for growth. They're underpinned by our client relationships, which are a key driver of our growth and success. And as you know, around half of our revenue comes from technology clients, which -- and we believe this is a resilient sector which will continue to provide strong long-term growth opportunities for us. But the reality is all our clients are, in a sense, technology clients. The work we do for them is usually around digital transformation and whatever their category, clients are embracing technology for their sales, marketing and operational needs. For many of our larger tech clients such as Alphabet, Meta, Salesforce and Adobe, we not only partner with them on innovation and products, we provide services around their products to our broader client base. We have a clear strategy to build scaled relationships across our enterprise client base, something which differentiates us significantly from other digital focused competitors. The table on the left illustrates the success we've seen with our scaled client relationships and our whopper strategy, 50% growth in the number of clients in the 2 largest segments and an impressive expansion of the pipeline and potential future clients too. In 2022, average reported revenue for our top 10 clients was up almost 70% to over GBP 47 million. We saw similar growth at our top 20 and top 50 client segments. I think you're all familiar with our 20-squared client strategy, this is to achieve 20 scaled clients, we with $20 million or more of revenue. It continues to evolve, and we ended 2022 with 10 of these whopper clients across 5 categories. One of those clients will not be a whopper this year, but we have identified 14 additional high-growth client opportunities across 7 categories, which we believe are on track to potentially become scaled clients over time, and we continue to feed this pipeline. Finally, and most importantly, we can't do any of this without our people. In a Friday feedback shout out to our Chief People Officer, James, who over the past year, has unified and integrated our people experience across the whole of. We have almost 9,000 incredibly talented colleagues working on some of the most exciting assignments for some of the world's leading brands and the fact that we were recently awarded a position in Newsweek's top 100 places to work, is a testament to the continued efforts of James and his team. And with that, I'll pass you over to [ Yuka ], our Creative Director, and he's going to take you through our North Star.

Thank you, Scott. Hello, everybody. Like Scott said, we have a unitary structure and we sell up in a unified way. Our North Star is here, and we've made our North star to help us clearly define who we are, what we do and how we do it. So hereby, I would like you to meet the monks. We are bringing a lot of different talent together; Scott mentioned it already. But we all are one brand. We are one P&L, and we have zero ego and specifically, the zero ego is a key part of our being because we bring digital native talent together, but a lot of different perspectives and different skill sets. And all these skill sets together, they create culture, build technology and unlock growth for our clients around the world. So collaboration is key. And we have heard and talked a lot about ourselves in the last couple of years. Our clients talk about us and we talk about the change that we bring to the work, how we do the work and the reinvention in the model, our forward motion disruption, big on innovation, clearly or specifically where they are nowadays and we build a model of the future and work that drives the future. But there's something interesting. We're not the only ones that actually speak to this. With us, the entire industry talks about the future. And rightfully so, I think everybody needs the future to be happening fast, but we believe something else because we believe that this future could be too late. If you look at our clients, if you look at the work we're doing and a lot of the feedback we hear, clients don't need a multiyear plan. They need solutions now. They need to be relevant now and they need the results now. Basically, they can't wait for the future to happen. We also, from the start of our being created a model that was focused on delivering now faster solutions, better relevance, cheaper results or getting to cheaper results and specifically deliver more, all the things that Scott already mentioned before. But there's one big component that we feel and truly believe in because what happens now is more than ever of relevant. We are currently in a time which we called the next transformation of digital. Digital basically took over where our world is virtualized, like we say, and basically, our infrastructure is around us is really relying on digital. Business models are built on it and human interaction is enabled by it. It's unthinkable nowadays, and it's posing a lot of opportunities. But another thing is that it's happening in an increasingly speed. The cycles of innovation and transformation happens really fast. If you look over the last couple of years, we cannot really predict what was happening. And I think now it's really clear that AI brings us that same speed, if you think about the cycle of disruption that brings to our industry. So this obviously comes with a lot of reality, a new reality, but also with a lot of new opportunities. And that's where we're really focused on as a company because we see amazing new paths to grow. The new user behaviors, the emerging technology, the new channels and a lot of the data insights, they create a lot of opportunity to grow our clients more and the business for our clients. There are lots of new methods to surface. If you think about the technology and the tooling that we have to or dispose nowadays. That helps us a lot with the speed to market of a lot of the services we create. The performance increase efficiency, access to talent, a new reality also if it comes to metrics of successes. What does value mean? Relevance, attribution, accountability, all keywords that are currently crucial in building great brands and good businesses. Basically, if you look around us, the world is happening right now. Culture is happening now. All key things that have meet us to be relevant for today's reality. So while everybody else is talking about the future, we need to make the future happen now. And this is a key metric, and this is why we call ourselves. We are now. This is Media.Monks, and we are now. [Presentation]

So this video is made by the now because it's made by AI fully generated through technology because that's how currently the now works if it come to Content production, so a nice call out. And I think this is the important one if we move into the next section, because does the now means for us, if we move forward. Key first part is, obviously, our people experience. It defines who we are. And it helps us to show up unified. So there's a lot of focus on internal culture at now, to shout out to James there. He is building that culture around the now as our vision as our common goal. There's also a lot of focus on our point of view on our attitude, basically, how we would like to show up to our clients and how we also show up to each other to ensure that all we do and everything we do is collaborated towards the same goal. The second part of it is about our go-to-market. It basically informs and defines who we are. We see it a lot now if you think about the communication we start to do, all of the communication and work towards our clients it's all around and the now in our point of view there. It also informs the methods of how we go to market because as I mentioned, that's increasingly cycles and speed of how things are evolving. So we have to constantly be relevant. So our go-to-market is fully enabled to make sure we can show up every month with a new relevant proposition depending on the clients' needs. It's also part of the now to have that mindset. Thirdly, a really important one is how we can ensure value for our clients. Now make sure that we constantly look at what's relevant for our clients, for their business, for their consumers, the audience that they target. The way we show up to our clients is constantly showing them and informing them of what's happening in the world around them and how we can enable that and leverage it. There's a big part, which is about the pitch and the evolution of our client services that we can bring to them, to enable and make sure that there's always value on the table. Last but not least, differentiation. It creates a different profile and a different positioning for us in the market. We're using it in the way we work, making sure that the work we deliver is quality driven, is relevant for the current market and the current audience needs. AI is a big part of that currently. If you think about how we deliver the work, I mentioned already with the video you just saw, everything now has been driven by AI, and it's inevitable that the future will be even more driven by it. So it's part of how we do the work and how we measure quality. You see it also back in the work we do, making sure that it's in the relevant channels and that it's also different using the all the latest technologies that's up to our disposal right now. And it's making sure that our capabilities and practices stay relevant for the now. On the next slide, we move into the practices. A really big part of it is are our practices, and you will be hearing more about this after me. The now ensures that we have the most modern set of practices in the market. Content is creating the now, making sure that our content and experiences we create for the brands are basically existing in every moment of the customer experience. Data and Media, they're making sure that we know what's happening in the now, and we reach the now. All the insights and intelligence gathered by them and inform every stage and every step of the customer journey. And last but not least, the Tech.Monks. They're building them now. The tech [ architect ] are basically underpins every moment in the customer experience. This technology cannot be out of our day to day now anymore. Last but not the least, before I hand over to Bruno, our main mission, how we bring them out together because with all of our best practices, we basically shift industries forward. We innovate, we flex, and we reinvent how businesses interact with the world now. Bruno, all yours, to talk about the content practice.

[Foreign Language] And I will talk about the Content practice, and I will give you a snapshot of everything that we are doing. Our ability to listen to digital signals and trends anticipate change and implement possible futures with a deferred front and leading the industry in multiple ways. [ Yuka ] took us through the North Star, which is a leading system in which the go-to-market built on the foundations of our operational system, really finds the work, who does the work and the impact of the work. But at the same time, we defined the relationship with our clients, streamline our decision-making process and defines the priority of our plan. In 2021, we launched and tested our API model supported on our vision. In 2022, our streamline operations show we were on the right path. In 2023, we keep gaining momentum. Our business model and value proposition resonates among CMOs that are dealing with a few very important elements. An ever-changing digital and social landscape with 5 billion connected users, a hyper-fragmented audience context where audiences are moving from interest driven to value-driven models. And finally, a market in which the customer journeys are being fueled by AI. Now I will share a few charts on how we did in 2022. 2022 in nutshell, is a year of improved integrated offerings and match creativity. Our clients work, positioning and people are our proof points. When it comes to our clients, Sir Martin and Scott shared with you, we consolidated our roster of whopper clients with some of the most innovative brands on one hand and the leading brands in the Media landscape on the other. Our client portfolio grew and now we are servicing plus 300 brands globally. According to BCG, 24 of them are among the 50 most innovative companies in the world. And finally, industry reports say that 15 out of our 20 top clients belong to industries leading that spend growth rates. And I'm talking about tech, retail, beauty and personal care, media entertainment, finance and automotive. Either built 4 industry leaders or disruptors, the following cases demonstrates our expertise in delivering, high-end craft and tech solutions with a keen understanding of the business. We have Riot Games with the VALORANT new episode, take gaming audiences out of the digital space to create awareness in traditional media. To connect Adidas Original with [indiscernible], [indiscernible] developed a platform on the occasion of the launch of the Ozworld collection. The first personality-based Avatar AI generator allowed users to create a unique digital version of themselves. BMW needed to build its social footprint across Europe and the budgetary and operational efficiencies, while making sure brand consistency. In response, we activated a social transformation model that leads the entire operation while having local teams to fully invested in clients of deflection and community activation. And finally, we also helped Google Play to level up cashless shoppers into gaming apps -- fans -- by [indiscernible] the Google Store as an exciting entertainment experience -- with the real person innovative content. Last year, to our ability to adapt innovate and excel in us, one after the -- we respond marketing [indiscernible] -- company. We were named social media fastest growing agency. We were part of the name of the action -- company of the year. This is award -- [indiscernible] as best plays to work [indiscernible]. [Technical Difficulty]

Apologies for that. To Chris, please.

Happy to kick off. If we can't get Bruno back soon enough. Is that what we're looking to do.

Yes. Go ahead, Chris.

All right. So...

I'm back. Can you hear me, Chris?

I can. I was about to cover for you, but it looks like we fixed the technical issue.

Yes. Thank you. So I was talking about our best place to work by experts such as Denver Business Journal, comparable and scoping. But what about our people? We talked about previously about the importance of our people and experienced journey. So our people's journey was created based on the feedback from all monks across the board and sets the agenda and priorities for the people's team and aims to keep Media.Monks of the most aspirational places to work. Last year, we launched Global... [Technical Difficulty]

I would move on...

To celebrate who we are, as individuals, our senior management retention program.

Go ahead, Bruno. Go ahead.

If you want to go to the last chart. Thank you. You have seen the shift in industry forward is our mission but excellence and long satisfaction is our passion. And this passion play us a few days ago in the top 30 Newsweek most, 100 most loved places to work. We are creating the now with a sense of purpose and determination and a decisive approach to AGI and AI. I will now hand over to Chris for an update on our DDM practice. Thanks, Chris.

No, thank you, Bruno. While we had all assumed that consumer behavior would begin to settle into a new normal post pandemic it's clear that there will be no slowing of change as opportunities open by artificial intelligence in the form of new consumer experiences, business models, product lines, they're all unlocked in a very disruptive way now and this is going to impact our current and our expanding client portfolio. And much like all of Media.Monks, our Data&Digital Media, commerce and CRM practices are well positioned to be ahead of these digital trends and capture growth from the inevitable coming disruption. Our Media practice continues to evolve in winning new era agency of record assignments across the spectrum of fully managed marketing services, transformational consulting assignments and in-housing. And this year, we added AoRs for Estee Lauder, North America, Forever 21, a fast-fashion performance-focused clients and Unity Technologies, which is a notable global AoR relationship for us because we leveraged our expertise beyond just Media with our capabilities across VR, Web3 and metaverse in our Content practices to bring these latest technologies and trends in new ways about thinking in the form of Media strategy, planning, buying and measurement as a comprehensive offering. Ensure taking many, many different channels and technologies and rethinking the way that we apply them to our Media marketing offering in a very differentiated way. And most recently, and we are very excited to share with you that we have won the Netflix Brazil AoR. It represents a significant expansion of our footprint within Netflix's business, and we now service Netflix across creative, Media, data and technology with our ambition set to extend our scope with them internationally, inclusive of expansion into the U.S. market. Our data consulting and analytics practice added many new clients with 2 notables, including a large NDA global device manufacturer and nationwide insurance this year. And our commerce monks have expanded their service offering to include new e-commerce platforms, helping our whopper clients navigate Walmart.com, Instacart and target.com in addition to our robust enterprise-focused Amazon offering. This e-commerce platform expansion is leading us to win new work in the consumer product space, including whitener, fellows and acne, as well as winning 2 major consumer electronics firms, also NDA, I apologize, Reebok and Philips Consumer Products, where our work on Philips won us an Amazon Performance Growth Award last year. And our CRM practice is winning new large-scale engagements, including PepsiCo's CRM agency of record for all of North America as well as the Diageo North America assignment from last year is now expanding into the rest of the globe. Where our recent expansion into EMEA has doubled the size of that relationship with Diageo. On the integration front, in Q1 of 2023, our DDM mergers completed all of our planned go-to-market integrations with the unification of Raccoon monks in Brazil and our CRM practices built on MightyHive, Destined and Maverick are now all known as the C360.Monks and are preparing us to the Summit level partner status at Salesforce for which we only share that status with a few large global systems integrators. With these integration investments behind us, we can now focus on taking these offerings to scaled client relationships and build on our existing trusted foundations with these clients. And given current economic uncertainties, many large brands are looking to consolidate and simplify and find efficiency in the number of partners that they work with. And we want to take advantage of that trend with comprehensive solutions that are accretive to our current creative and Content services relationships with them. We have only just scratched the surface on our scaled client portfolio with respect to DDM and injecting our comprehensive capability set into our current scaled client portfolio is now where we're turning all of our focus and investment. On the partner front, while many in the industry struggle to define what rapid AI and automation means for their businesses, Media.Monks is already delivering and accelerating and doing it now. Our largest technology platform clients and partners, Google, Amazon, Meta, Microsoft all have differentiated data and infrastructure that are perfectly positioned to deploy AI technologies in that they can directly connect to their clients' data and deliver personalized consumer experiences across both the business and the consumer journey touch points, something that has been very difficult to do over the last 30 years of the Internet. And you may now have seen our increasing velocity of joint press releases with Salesforce and that Media.Monks has been named a preferred consulting partner supporting C-suite technology and transformation decision-making for sales force implementations, a coveted position that would normally only be found in an Accenture-like offering. As well, Salesforce is named Media.Monks, the strategic launch partner for their Web3 consumer loyalty platform, and now most recently and the new news we are excited to share that Media.Monks is working with Salesforce on building a generative AI ecosystem with new accelerators, large language and data models and integrations to help businesses implement Salesforce's Marketing GPT and Commerce GPT offerings. Think about this as ChatGPT for the internal enterprise for which Salesforce has incredibly deep relationships with their clients to extract that data and make it meaningful and activatable across their enterprise. Now of course, we already have a long history in deploying Google's efforts in the AI and automation space with their PMax media buying platform and machine learning platforms. But we look forward to assisting with the rollouts of their new Vertex AI and Duet AI platforms into our scaled client portfolio. And of course, watching closely as we help clients navigate the new marketing paradigm where Bard and other curated search assistance will change the way that consumers view their Google search results. It will no longer be about keywords and unstructured results. It will be about tailored curated results, disrupting the search industry itself. And that is a massive opportunity for Media.Monks and our data and media businesses. The changes that are coming are many, and our biggest tech partners offerings can be deployed by Media.Monks to improve our clients' customer experience, customer service and predictive and forecasting capabilities. And now we can add and generate new content in ways that we never thought possible, and we are excited to further our investments and relationships with these large technology companies. And on the capability front, our increase in R&D over the last couple of years has delivered with a few successful client wins. Measure.Monks, our proprietary measurement infrastructure offering is rolling out to clients globally this year and is offerable to any of our scaled clients. Our cloud-based data and analytics products now deployed directly into client environments, reducing our overall cycle time for delivery and cost of deployment. Our media OS is getting a bottoms-up redesign, focused on end-to-end automation and workflow inclusive of allowing client first-party and third-party data integrations, a limiting factor in our pitch win ratio on large global AOR offerings It's difficult to compete when we don't have the infrastructure, and now we do. And our Latin America hubs in Argentina and Brazil are now fully built out and are expanding their capacity in automation adoption, giving us flexibility in our forward-looking cost base and efficiency to deliver on our data and media practices. Furthering our automation discussion, we've brought together our automation and AI consulting efforts into a unified and comprehensive offering, helping pave the way for our clients to adopt new disruptive technologies and help transform their business processes, including expanding our relationship with Workato, an automation software platform, not only to fully deploy it within Media.Monks to automate our own processes and internal workflows, but we've now built a practice that we sell to our clients to help them increase their efficiencies and modernize their workflow on this platform. And specifically on the AI front, we are now fully embracing efficiencies that can be gained in enabling our workforce to automate their own roles and functions. Incrementally, through our automation initiative launched back in 2020, we've just deployed an internal MonkGPT that is safe for all employees to access and leverage for Media.Monks-centric applications. As well, we've deployed AI ambassadors to business units and organized client hackathons and paid workshops to help accelerate the adoption of these tools into everyday parts of our clients and owned and operated core businesses. And these efforts are directly translating into new initiatives and unlocking new AI development budgets despite a generally cautious environment with respect to new investments in the broader ecosystem. That's our update for our data and digital media, and now I'm going to hand over to Brady for an update on our tech services practice. Thank you.

Thanks, Chris. Really appreciate it. I noticed that I'm the only one with a tie on, which makes me clearly the tech guy. Excited to share with you some highlights from where the Technology Services practice has gone in 2022 as well as a sneak peak of where we're going in '23. Last year, we were focused on scaling our strategic growth pipeline and partnerships, adding critical human capital and integrating our operations and offerings across our merged technology services brands. Four new strategic partnerships, including with Google Cloud, AWS, Dapper and Blues Wireless, are creating the underpinnings that will enable us to help clients accelerate on their cloud migration strategies, IoT transitions and core enterprise transformation road maps. We kept client satisfaction at record high levels in 2022, signing over 130 new engagements and adding 19 net new logos to our portfolio, including highlights like Delta Dental, Bridgestone, PayPal, BCG and Philips. Integrating Zemoga and TheoremOne improved our merged brands into a single operational platform was mission-critical in '22. And I'm excited to share with you that, that transition is complete. We're now operating as a single integrated practice. And coming into Q1 of this year, we unveiled our new go-to-market brand expression for the pillar as four of them amongst, which will help us to sell directly into the offices of the CTO, CIO and CEO. Of course, we're also focused on adding amazing new talent to our ecosystem to support growth, including key leadership hires in 2022, like William Kelley, our pillar CGO. Moving on to '23. I want to give you a quick view into what we are planning this year. We have 3 key areas of investment and expansion: our capabilities; our people; and our partners. Our capabilities are expanding both horizontally and vertically. The consulting practice, born within the technology services ecosystem, is now expanding across our other 2 pillars, serving a key role in our land-and-expand strategy at a global level. These business consulting services put us in direct competition with the major consulting firms like McKinsey, Deloitte and Accenture, but our unique combination of creative and technology DNA across Media.Monks differentiate us as hands-on builders and makers focused on outcomes, not just insights. We're providing strategy-first services designed to sell directly into the C-suite, enabling us to build robust long-term opportunity pipelines for the delivery capabilities within Content, DDM and technology services. Our new accessibility capabilities are designed to help our clients ensure not just compliance with accessibility regulations around the world, but also build digital products and experiences that are fundamentally inclusive. Finally, our new AI and machine learning capabilities within the pillar are seeing a tremendous amount of emergent demand. They're designed to help our clients navigate the waves of disruption that are gathering on the horizon. Our new AI innovation studios service helps clients inject AI capability into their core innovation pipeline, while our AI readiness assessments help them to prepare their data spine infrastructure in ways of working for the integration of AI into all facets of the business from the inside out. We're also launching stand-alone AI services and products which serve to create clear demonstrations, thought leadership, a thought robot, but also serve to enhance and augment our internal capabilities, like Refactoring Bot, GPT, Gladiator and our new personal generator, all of which are helping to augment and make our teams more efficient at delivering core services to our client base. As we've continued to expand our capabilities and sustain long-term growth, we're also investing in new demand generation capabilities, including a new internal demand generation function led by [ Ben Lee ], our new pillar, CMO, as well as new leaders for emerging service lines, like Joe Devon, who is heading up accessibility. Finally, we're scaling our stable of managing partners, the team responsible for scaling strategic client relationships and growing net new offers. Finally, we're investing in new channel partnerships that will help us expand our footprint inside of key enterprise technology ecosystems. And I'm excited to share that we've inked agreements with both Oracle and NVIDIA within the last 30 days. That's all for Technology Services. I'll hand it over to Regina for an update on our ESG activity.

Thank you, Brady. I would love to share a few of the highlights with you on our ESG accomplishments because this year, we registered our full organization in EcoVadis, complying with their nonfinancial reporting, and EcoVadis is especially focused on sustainable procurement. Last year, we already submitted our data to CDP as we will do again this year. And we see also a continuous interest in ESG-related best practices in our industry. So to better our industry in which we happily love to participate. And one of the projects we did with AWS also got awarded with a sustainability prize because of reduced emissions during the production of an AWS live stream that they are now promoting heavily. So we're proud to have received that award. And finally, we have released our ESG report. You can find it on our ESG website, which is www.media.monks.com/esg as well as in an executive summary in the annual S4 reports. To show you a few of the highlights in this report, a few numbers. We see an increase of 77% in the number of total for good projects, which is great. Now they are representing GBP 43 million of Great British pounds, and this increased by GBP 20 million compared to the year before. We now partner with what we call -- what we call purpose-driven clients, and we now have 75 purpose-driven clients, whom we are also evenly proud of as our nonpurpose-clients, and we hope to control -- to grow this number. Our DEI performance shows progress, too, since we grew our population by 5% and. And we also could show a more balanced gender ratio, now having 48% female, 49% male and 3% undeclared. And also because the data was valid this year a bit more accurate because of more people reporting on their gender voluntarily. We now also report 3.7 tonnes of CO2 emissions per full-time employee. If you noticed that our emissions of last year, you might see that this has increased significantly. And this is due to a changed methodology of measurement because we are now compliant with a science-based target setting since we signed a letter of commitment to set our science-based targets in the near future. And then finally, if we look at ESG in the coming year, we will continue the maturity of our data gathering and accuracy throughout the world. We are working towards bettering our integrated strategy of the now, including ESG matters and see that reflected in both our people, our culture and finally, our daily operations. And we will also continue to partake in a nonfinancial reporting. Next deadlines coming up being CDP, S&P, MSCI, and we're working towards our SBTI transition plan, as it's called, to achieve our target of net zero by 2040. And finally, to conclude this great presentation, as Sir Martin already said, we have a lengthy presentation, but thank you for staying with us. We will continue to fulfill our assessment and build out our role within the industry to deliver ethical and responsible marketing. Thank you.

And a big thank you to Mary, to Scott, to Yuka, to Bruno despite the technical difficulty, to Chris, to Brady and last, but not least, Regina. So a big thank you for that. Today's AGM is an opportunity for shareowners to express their views and to ask questions of the Board. We have Colin and Rupert here with us, and then our other directors are joining virtually. And we, as your Board, are committed to an open dialogue with our shareowners, and are pleased to have the opportunity during the meeting to engage with you directly. We ask that your questions relate solely to the items of business before the meeting. If you do have a question, we have a microphone available for your use if needed. And it would be helpful if you could state your name and indicate if you are a shareowner or if you are representing a shareowner. And if so, you could indicate the name of that shareowner before you ask that question. [Operator Instructions] Are there any questions?

Yes. Over here, please.

Thank you. Tyler, private shareowner. Thank you for the presentations. Lengthy but very interesting. I had a lot to take in so I'll have to mull over it. I have a couple of questions, if I may. The first one, when I picked up the annual report, I was thinking geopolitics was a big issue. Then I started reading your section on Now! and particularly with China. Certainly, companies that I attend meetings with have a lot of constructive engagement with the Chinese in a work-related way. Politically, things are getting very difficult, and you emphasized that, I think, with your comments with the Republicans you can reduce the infective against the Chinese. So we seem to be moving into very troubled waters with a very large super power whose AI is probably going to be on par with, if you call the West. So how do you see this sort of developing? And what steps can coverage a lot of this sort of take to sort of reduce the infective?

Sure. We'll come to any other question, let's try and answer that first. So I think it is a very difficult situation. Personally, I think it will be quite difficult to build constructive relationships, which I personally regret. Having said that, from a purely practical point of view, as we said in the annual report, because of the fragmentation we're seeing, not just because of China, because of Russia and the war in the Ukraine and Iran's nuclear capability, it means that -- what does it mean for us and for you as shareowners? It means that we have to be much more focused geographically. So what leaps out -- we are 65%, 70% Americas focused. That part of the world, North and South America, become increasingly important. So that's one thing. In the Middle East, although smaller in GDP terms, because of high energy prices and consistent high energy prices, the Middle East will grow in power. I mean, maybe a slightly bizarre example. I don't think it is bizarre, it's cultural, the LIV-PGA example just recently or what you see happening in F1 and soccer and everything, just shows you what is happening in the Middle East. And then finally, Asia Pacific. And broadly, from a client point of view, there are 2 things that we see. We're clients with big positions in China are probably pulling back or not investing or reinvesting. I mean, Sequoia this week, one of the big private equity funds, broke into 3 parts. It broke into a sort of western part, an Indian part and a Chinese part. So what you're seeing is fragmentation in operations. So clients who have big positions probably are cautious. Clients with smaller positions and by small, I mean, weighted to China. So China is about 18 trillion out of 100 trillion. The world is about 100 trillion of GDP, and about 18 trillion of that is China, about 28 trillion, I think, is America. So between the 2, you're sort of 40% plus or 40% -- about 40%, 45%. And China, so you're weighting should be in China. So you take us as an example, our weighting in China is nowhere near 20%. So we would like to build our operations. So we would be like our clients who are underrepresented in China. So the net result, the answer to your question is, those with big positions are going to be worried about what's going to happen over Taiwan and probably will either stay where they are or pull back. Those with smaller positions, I think, one major package this company, which has 7% of its revenues in China, and we'll continue to build because its competitors have bigger positions. So I think you're going to get that bifurcation. But the net-net result of this is we have to be much more focused. Prospects of Europe, I think, are not as strong as the other 3 regions I mentioned. Africa, probably the volatility in Africa probably discourages a number of our clients from further investment. Some of them, however, believe there are opportunities in places like Nigeria, Ethiopia or South Africa and Kenya. So I think that's broadly the position. Okay. What's the other question?

Okay. Second question relates to talent. I think I seem to remember last year, we were talking about retaining talent. The cutbacks in, should we say the competitors, make that easier. A lot of your work is online and so forth. How do you sort of arrange the physical meetings which seem to me to be an important part of people's lifestyle to actually meet at least occasionally physically? How do you actually manage that?

Maybe Bruno, can we connect with Bruno? Are we -- are we good? Yes? Bruno, do you want to talk a little bit about work from home, work from anywhere and those phenomena just from your point of view? I mean you heard the question. The question was how do we in an always-on world and a virtual world, how do we bring people together? You're talking about the culture of Blue. Yes.

And I think that -- I was talking before about everything that we are doing from a people's perspective. So from a culture perspective, culture is clearly the connection between the people that we can -- the people that we have in our teams. When it comes to if we are going back to the office or if we are doing a completely hybrid model, we are going on the hybrid model. We have, as Sir Martin said before, plus 50 offices, and each one of the offices has a different role. According to the roles of the office and according to the goals that we have with that office in that market is the way we will proceed. In a few markets, we are going all in. We want to have these mandatory 3 days. In other markets, we are doing just optional going back to the office, but we are making sure that we are listening to the Monks. But at the same time, we are focusing on our productivity. If we want to be the best agency out there, if we want to keep growing as we have been doing in the last few years, we need to find the right balance between the hybrid model and what our clients are needing.

Okay. Chris, anything you want to add from your perspective, and then Brady?

On the matter of work from anywhere, nimbleness and flexibility and the changing landscape of commercial real estate and its use within the modern services industry. It is a difficult thing to navigate and it's fragmented across the world, and there's different cultures and different working styles, and really, we need to follow clients in many cases, which are also taking very different approaches. I think we've done a good job of balancing the needs and slowly changing the way that our cultural interoperability as to how to work from home, work remote and the policies that governance have been rolled out. So in general, I would actually say that we're doing a pretty decent job of managing that process and being relatively flexible, but I don't have anything more to add on top of what Bruno just walked us through.

Brady?

So thanks, Sir Martin. I think I would go as far as to say we are really industry leaders in work from anywhere. It's an incredible advantage in terms of competing in the talent ecosystem. There are great engineers, product managers, designers all around the world. And those that are outside of major metros tend to have less optionality. And so we can really tap into those ecosystems which gives us the ability to scale our talent base in ways that those organizations that do require a strict work-from-home policy can't -- or pardon me, work-from-the-office policy can't. I think beyond that, as well, from a technology services perspective, so much of the work that is done by our team members is what I would call momentum-based work where the in-office experience is highly disruptive and interruptive to the efficiencies of those teams. Remote collaboration tends to drive much higher efficiencies and better velocity and outcomes for our clients, many of which are really operating in completely federated remote-distributed environments already, especially when it comes to large-scale enterprise infrastructure, where you have truly global teams collaborating on solutions across 10 timezones and 30-plus countries. So I think we're very well positioned. My personal opinion is that work from anywhere is the future, and it's not going anywhere. And I think being able to operate efficiently in that kind of ecosystem is going to be a long-term competitive differentiator for us as an organization.

The only thing I would add to that, I think the sort of the horse is out of the barn, if you -- I think those that want to go back to sort of 5-day working week, that's, I think, largely gone. And basically, when you sort of talk to our people, they -- as you what you heard, from those 3 views, they appreciate the flexibility. So that might be something that those of us who are older, I think it is a management issue, but it may be a generational problem as well. Those who are older might be uncomfortable with that, but it is, I think, the way of the world has been accelerated by COVID. It was happening before COVID, and it's just been accelerated by that. And AI and AGI is probably going to drive it even further.

Can I just come back on that? The message I'm getting is that online working is more constructive than possibly sort of working from an office and so forth. It does suggest to me that there ought to be the facility to arrange. I won't call them conferences, but meetings where -- informally and perhaps...

It's a very good point. I mean I've heard, it was only a week ago, exactly that point by somebody who's done a lot of research in the area and believe that a distributed model, not just work from home, but work from anywhere, which means distributed. So we put a map on the United States where people now are working as to where they were working sort of 5 years ago. And the point that was made is in that particular phase in his research, weekly, monthly, quarterly social gatherings, interestingly, not necessarily around business, social gatherings are the way that you maintain the glue. But the argument that you don't maintain the glue if people are in the office is an argument, I think, that is slowly being -- maybe not so slowly -- undermined. Okay. All right. Thank you. Yes.

My name is Liam Voykin. I'm with Kenway Global Management. We're shareholders of S4 Capital. I have a few questions. The first one is on organic growth. So historically, the company has been able to grow at 20-plus percent annually. I understand right now with the macro environment, that's going to be subdued for this year and potentially next year. But is there any reason why the business cannot return to 20% plus organic growth?

Well, it's driven by two -- we've highlighted in the statement, not just for the first 4 months, but for the quarter, too, driven by two major addressable markets. There are two others, but two major ones. So it's the media market and the technology services market. And in '23, that looks, as we said in our statement, that growth in those 2 addressable markets, having been double digit, in some cases, high double digit, I mean, in the teens, the growth rates have come down. I mean GDP has come down and the growth of the platforms in the first quarter unweighted. If you take the 3 Western platform, for example, Google or Alphabet, Meta and Amazon. And Amazon was the one -- the first 2 grew by 3% in Q1. And the third grew by, I think it was 20%. So it took the weighted -- the unweighted average up to about 6.4% or 7%, about 7%. We think that will be probably maintained for the rest of the year. On Technology Services, it started the year probably mid-teens, maybe a little bit less, and that's now degraded down to a range of 7% to 10%, or even that, within data this week, came down. So that -- it would be high single digits, let's say, for this year. Next year, you said the same for next year, not necessarily so. I mean I don't think it will be -- I don't think GDP growth will -- globally will be much affected until we go through the American presidential election, which is November of '24. So towards the back end of '24, you might see -- depending obviously on the result, you might see some change as a result. But the growth rate should improve for the platforms as a whole in the Tech Services. As we indicated in the statement, when you look at analysts' forecast, should include probably into the 10-plus area. We expect to grow faster than that growth rate. But the answer to your question is it's unlikely to be as high as it was because the underlying economies are not growing as fast. And the underlying segments in which we operate in those economies are not growing as fast. You see some further reacceleration into '25 may be different. In our industry, to be focused purely on digital is extremely well positioned for two reasons -- a couple of reasons. Firstly, because we do depend on the growth of the platforms. Secondly, we do depend on the growth of technological services or digital disruption and transformation. And those markets basically are growing faster than the general economy and where we expect to grow faster than them. But the answer to your question is it's not like it was, let's say, in '22 or '21 or even in '20 when we saw COVID, we did what was 20% like-for-like in '20 in a COVID year when everybody else was sort of falling over. So I think we still see a strong growth. The answer to your question is still see a strong growth, but not as rapidly as it was before.

Okay. My second question is on capital allocation. This year, obviously, the majority, I think the earn-outs are going to finish, but this business is highly cash generative. Obviously, the valuation of S4 Capital is very low. So how would you prioritize the use of that cash starting in 2024?

So I think it's a good question. And there is a signal in the statement, and there is a signal in the first quarter statement of a shift. Okay. So what we've said, and if you say the 3 sources, the 3 uses of capital would be around M&A, merger, what we call mergers or combinations; would be about around dividends; and around share buybacks. If we say that's the -- in turn, you're right. I mean the capital allocation is, in our case, is really important because the cash flow inside of the business is strong. And in fact, under Mary's guidance and Christopher, our new treasurer, has grown stronger and has strengthened recently quite significantly. So the range of improvement in -- or the improvement in cash flow has been strong because of what's happened to market valuations and our own valuation, I think we've really sort of shifted our focus. And the guide in that in the statement was the indication that we buy back stock to avoid dilution because of the share option program. So in that case, it's about 1% a year that's allocated in share options, either mill price options or market price options. And the focus now will be on non-mergers of combinations, but making integrating what we have. Making sure to come back to your first question, that net revenue growth is as strong as possible and the margins are strong as possible, and we get back to where we were, which was 20%, 21% after central costs. So that was the sort of first operating priority. That should generate significant cash flows. The payments, continued payments for our merger combinations finished this year. So next year is pretty much 0. So it enables us to deploy the cash flow much more heavily. So in terms of capital allocation, M&A slips back to -- from first to third. Buybacks of capital are more efficient than dividends, right? So I would say the answer to your question is priority will be buybacks. Second priority would be dividends. And I think that's important in terms of returns. So instead of shares being seen as dead money, if you like, it would give both the management owners, which is 40% of the company, plus outside shareholders, I can describe that a return. But I would see that was secondary to buyback. And third will be M&A. I mean M&A is not off the table. We will do stuff. When you think about our objectives, there are 2 areas where we really should focus on geographically will be Asia Pacific going back to the previous question. And then secondly, technology services. That's where I think emphasis because where we want to weight, upweight the business from a geographical point of view, Asia Pacific is 10% of our business at the moment, should be higher. And technology services is about 10%, should be higher. So that's where I think the -- but the answer is buybacks, one; dividends, two; M&A, third.

Great. And then last question for me, just kind of a general question. Obviously, the share price is very low. And so is there anything else that you can do to try and one way increase the share price?

Well, look, look, a good business will always win through. If it's a good business, the results will reflect that. And that's -- it comes back to what I just said and ask you a second question. It's pretty much the same question really. The first priority has to be to get what we have right. Not so much from a net revenue point of view, but from a margin point of view. The margins last year were up 14%, right? So we have to get the margin improvement to where we think it should be. That's job one, right? Then everything else flows from that. Cash flows on that. If we think that our stock is the best investment that we can make, buybacks obviously moves up to priority 1. So I think your second and third question are the same thing really. So that's what I think we'll do. Operational performance is going to be the critical issue for us.

Sorry, maybe just one final quick question. What do you think the market is missing about your stock? Because right now, S4 Capital is trading cheaper than...

Yes, we can get inefficiencies in the market, right? The answer is if the market is missing something, it will come out in the wash. And the water will be improved performance. If it was good -- if it was good as we think we are, and I think we are, clients will recognize that, it will be reflected in growth and top line. And people will be attracted to the business and will improve our margins. But I think the priority has to be operational performance.

Actually, I primarily invest -- my name is [ Roger Major ], I'm a private shareholder, and -- well, I hold among the MightyHive platform. I primarily invested in this company, and it's a large shareholding for me because of the nature of the business and because of your long-term track record, that was key to me investing. Yes. I've worked in investment banking all my life. But your business is a client-led relationship business. And basically, I believe that your address book was very valuable to this business and will be in the future. So -- and I actually agree with what -- I don't think Rome is built in a day. Good businesses take time to build, and they have their ups and downs, and I'm a long-term investor. So that's the first thing I'd like to say. But I've got 2 questions which are important. Actually, I was saddened to hear that you have had some health issues this year. And from a personal point of view, it's very important that you prioritize your health. And I think everyone would believe that, that's adamantly very important.

What's the question?

Okay. Okay. There are 2 questions.

That was sympathy. What's the question?

Okay. There are 2 questions. I think it's very important for the rating of the company medium term, that with time, there's a clear succession plan. Not that -- I think you could be an effective Chairman, but I think it's very important to lay out to the market and the analyst community what that plan is. That's the first thing. The second thing is, obviously, margins are important in getting them back higher. With the -- in this type of business where you've allocated options and shares, actually, the share price is a key driver of the business for many of the people who work in it. And so what I'm interested to know with the depressed level of the share price, how -- what does that mean for your paid strategy because it's a people's business? And how will that affect if you have -- if the share price isn't performing and you're actually having to pay to keep good people, what impact could that have on getting margins to where you want them to be? So those are the 2 questions.

Yes. On the succession, maybe I can turn to Colin. I'm actually putting you on the spot, Colin, and getting you to do some work today. You can respond on the succession. But before Colin just responds to that, coming back to the -- the people -- 40% of the company is owned by, let's call them insiders, right? That would be key principles, many of whom you've heard presentations from directors, et cetera. So the answer to the question is a little bit two edged. I mean in the sense that everybody has a very significant amount of their wealth tied up in the company and the success of the company. So the motivation, going back to your question, is significant in terms of value creation, okay? So you can't -- you can't pretend, if the share price was at a higher level and the fact that it's now at a lower level, you can't pretend that that's good news. You can say it's either neutral or negative, okay? And it does make life a little bit more difficult. But I think from the point of view of those people who had significant commitments, it makes them probably more determined to try and build the value. So I don't -- and I don't -- and you could argue the other way, going back to the previous question, that if the business is as good as we think it is, okay, and the various value there, there's more value there as a result of being at a lower price. So with that -- I don't think it's been a limit to what we can do or had significant impact. I mean, the labor market is not as tight today as -- we were talking to another Martin who runs the London office this morning. And the labor market in the U.K. is very different today to the last year when we met. It's much less tight. We've seen technology companies reduce their headcounts quite significantly, and that's loosened the market and given us more opportunity.

[indiscernible] on the remuneration thing and the incentive, I mean, obviously, people have personal reasons to sell shares. But the market was probably a bit surprised that your COO decided to let go over 1/3 of his shares recently at such a [indiscernible] price for personal reasons.

No, I don't think it was 1/3 actually, it was less than that. But Chris is on the line. He can talk for himself on that. But as you said or was said recently, it was for personal financial reasons. I mean, do you want to say anything about that, Chris?

I would because it's interesting for me to see the speculation around it. I personally have not sold a single share. However, trust and estates across family relations are highly concentrated in S4 Capital. And the deal for MightyHive was done 5 years ago. I actually do not have direct control of those trusts. So they are all in different situations. And so the decision was made some time ago to diversify after 5 years. And that is part of the explanation. So I think that's confusing when it looks -- when the release gets sent out, all that complexity is obfuscated into a single number, but it is very much unrelated to my personal holdings, it's related to the trust and the estates that I'm no longer in control of.

Okay. Before I ask Colin to comment on the -- we would rather have Paul Roy, but Paul Roy is connected, I think, but it's better to get Colin to respond here. Just say that one of the reasons, obviously, for the presentation this morning is to show you the talent that we have inside the business. So the answer to your question is there's a very significant and strong bench of talent inside the business. Some of whom you've seen, there are others you haven't seen on this presentation as well. But Paul, do you want to comment to the work?

Yes. Thanks. Is this on? Can you hear me?

Yes.

Yes. Look, I think we all understand that Sir Martin's role in this organization is pretty paramount. And the Board, both the executives on the Board and the nonexecutives, including myself, Rupert and the others you've seen, I think we have a good mix of skills and concepts here and understanding of what this business is. And the roles for Martin and the other executives, Mary included, for example, and Scott play in it. And clearly, we understand our responsibilities as I bought to the shareholders, the wider shareholder community. And as was said in Martin's opening speech, a large percentage of the organization is also shareholders. So we have a clear understanding. And we review the plans and options and what the fallback situation would be in the event of either a short-term need for example, when Sir Martin had his -- raised his medical situation, we discussed it, but we felt there was no need because it wasn't -- there wasn't a need. But we had a plan. We continue to develop a plan, which obviously, we consider regularly as a Board [indiscernible] in our private sessions. And Rupert is here as the [indiscernible]. He can add anything to that if he so wishes, but I think that's pretty much.

[indiscernible].

Yes. So -- and we're in regular dialogue with Sir Martin on that subject, and we have plans that we continue to build out and develop. So I'd like to reassure the shareholder community that we take that long-term succession very seriously. And we are mindful of the direction of travel that we would have to undertake at Sir Martin's well or as and when he might decide that he wants to split the roles or do something else or sort of launch himself into the long-term sunset, which I, having known Sir Martin for quite a while, I think it would be very difficult for him to do. But you never know, I could be proved wrong, yes?

I'll come back to the previous question as well. I mean the focus on the operational effectiveness. You have Bruno and -- where he's running the Content practice, which is about 60% of the business. You have Chris and them with 3 direct reports running the Data and Analytics and Digital Media business, which is about 30% of the business. And then Brady, running the Tech Services business. So I mean, the key challenge for us, the key opportunity is to get the operating efficiency of that. Somebody asked me in the preamble when we were having lunch before we came in, could we improve sort of revenue per head with our current workforce. I think it's the gentleman sitting next to you. And we have about 8,700 people in the company. This time last year, it was roughly the same number, a bit higher, it's about 9,000, so slightly down. Net revenue last year was up by 26%, and that continued into Q3 and Q4 at that rate. I think it was, what, 20 and 28 or whatever it was in Q3 and 4. Now it's -- the top line growth has softened, but it's still 6%, 7%. And we've managed to do that with the same number of people. And the issue for us is, do we have duplication? Can we realign our resources in a better way such that we're using more efficiently? Are there pockets of duplication that we can deal with? So that's where I think we have to focus on, that structure that I mentioned with those 3 practices. And then we have geographic heads as well and client heads. So there are the 3 parts of the matrix. It's around practice capabilities. It's around clients, and it's around geography. If we get that right and get our margins back to where they should be and get the cash flow, and then we can talk about the capital allocation in a different way. Sorry, go ahead.

I think it's quite important we understand that Martin has set the business up in a way -- Sir Martin has set the business up in a way that the 3 practices can run their businesses. And so in a way, we're not dependent -- I mean, of course, we're dependent on the company needs. Sir Martin, there's no doubt. But we are running in a way that the 3 practices are able to go out there, generate the business, run their businesses. We have full P&L. We have full financials. I mean it's not one person who's, on a Monday talking to a client, booking the client on Tuesday, raising the invoice on Wednesday and collecting the cash on a Thursday, is it? I mean, there's 9,000 people near in this business. And I think you've heard today from the practices and the people you've seen today that we are running those businesses, and it is all about operational margin management. And Sir Martin provides that leadership and focal point for that to happen and the direction, the impetus, the energy, the drive.

I actually think you're doing the right things. And firstly, when I look at the last 5 years, actually, what's been achieved, given all the problems globally is immense. So actually, I intend to remain a shareholder.

Good. Thank you for that. Thank you. Okay. Anybody else? Okay. Anything online? Caroline, anything online? No? Okay. So we've covered the Q&A. Thank you for the response. For those of you voting online, I'd like to remind you to cast your vote in accordance with the instructions given at the start of the Annual General Meeting if you've not already done so. The meeting will be concluding shortly. For those of you voting in person, our registrars should now have collected your poll cards. If they have not done so, please raise your hand now. Collected? Okay. I now propose the resolutions as set out in the notice of the meeting and on the screen now with the proxy votes received prior to the meeting. So we've got resolutions 1 to 25 appearing on the screen. You've said -- you had from 7 to 12, you now got from 13 to 19. So you can see the votes and then 20 to 25. Okay. Ladies and gentlemen, poll is now closed. I have to pause for a few seconds. Okay. Closed? All done? Yes. Thank you very much. Ladies and gentlemen, the poll is now closed, and the provisional results are that all resolutions are carried. The results will be available on our website shortly and announced the London Stock Exchange in due course. That concludes the meeting. Thank you for attending today's meeting, and thank you all for coming, and we all wish you a very safe journey home. Thank you very much. Thank you.