Full Year Results for the year ended 31 July 2024

6 November 2024

YouGov plc

("YouGov" or "the Group" or "the Company")

Full Year Results for the year ended 31 July 2024

- Revenue and operating profit slightly ahead of revised guidance

- Execution of cost optimisation plan is on track

- Maintaining FY25 guidance and mid-term ambitions

YouGov, the international research and data analytics group, is today publishing its audited results for the year ended 31 July 2024.

1. Defined in the explanation of non-IFRS measures below.

2. Figures have been restated to remove customer list amortisation which is now classified as a Separately Reported Item.

Financial highlights

Operational highlights

Cost optimisation plan

Product innovation and investment focus

Current trading and outlook

Steve Hatch, Chief Executive Officer, said:

"FY24 has been a year of transition, challenge and change. We have made significant strategic progress in the financial year. We completed the acquisitions of CPS and KnowledgeHound which strengthen our product offer and technology as well as increasing our addressable market. Consistent with this, post-period end we acquired Yabble, which will transform our Data Products segment using generative AI.

The macroeconomic environment remained challenging across the wider market research industry and for YouGov, while internal execution also contributed to the challenges we faced. We acted quickly over the summer and I am confident that we have put the right initiatives in place as we focus on the execution of our long-term strategic plan. 

Our clients continue to value the quality of our products and services, this is reflected by our high renewal rates and strong customer relationships. As we enter FY25, we anticipate that momentum will build throughout the year, weighted towards the second half, as the benefits of our cost optimisation plan and new commercial leadership are realised. We consequently expect YouGov to achieve growth for FY25 in line with current market expectations, and remain confident in the Group's ability to deliver on its long-term ambitions."

Analyst presentation

A copy of the presentation and the recording is available online at: https://corporate.yougov.com/investors/presentations/.

Forward looking statements

Certain statements in this full year report are forward looking. Although the Group believes that the expectations reflected in these forward-looking statements are reasonable, we can give no assurance that these expectations will prove to have been correct. As these statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements.

We undertake no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.

Enquiries:

About YouGov

YouGov is an international online research data and analytics technology group.

Our mission is to offer unparalleled insight into what the world thinks.

Our innovative solutions help the world's most recognised brands, media owners and agencies to plan, activate and track their marketing activities better.

With operations in the UK, the Americas, Europe, the Middle East, India and Asia Pacific, we have one of the world's largest research networks.

At the core of our platform is an ever-growing source of consumer data that has been amassed over our twenty years of operation. We call it Living Data. All of our products and services draw upon this detailed understanding of our 29 million registered panel members to deliver accurate, actionable consumer insights.

As innovators and pioneers of online market research, we have a strong reputation as a trusted source of accurate data and insights. Testament to this, YouGov data is regularly referenced by the global press, and we are the most quoted market research source in the world.

YouGov. Living Consumer Intelligence.

For further information, visit business.yougov.com

Chair's Statement

My first full year as Chair of the YouGov plc Board of Directors has been one of change for YouGov, as we moved into our third long-term strategic growth plan (SP3), led by our new CEO, Steve Hatch. 

During the year, we completed our transformative acquisition of GfK's Consumer Panel Services business ("CPS"), an established leader in household purchase data in Europe serving FMCG clients, welcoming 1,000+ new employees to the YouGov Group and increasing our workforce size by 50%. We also acquired KnowledgeHound, a US based survey data management solution, to aid the extension of our YouGov Crunch survey analytics platform to handle the needs of large brands. More recently, following the end of the reporting year, we acquired Yabble, the New Zealand based company that has pioneered the use of generative AI to deliver audience insights.

Last year, I noted the ongoing challenges and macro uncertainty in our industry, which have persisted into FY24. Client budgets have increasingly come under pressure and the prevalence of fraudulent data has led to greater scrutiny on panel quality across the industry. YouGov invested in further improvements to our systems and we continue to be seen throughout the industry as the gold standard for high-quality data. However, in the period of uncertainty, clients appear to have eased off from new commitments. We believe that in the new world of AI-powered research, high quality connected and structured data will become increasingly important and we are again seeing increased demand from our most data-savvy clients.

Financial results and dividend

In FY24, while we grew revenue compared to the prior year, growth in the US and UK region was in part offset by slight contractions in the EMEA and APAC markets. Against this slowdown, the Board acted quickly to support management to take significant cost action towards the end of the financial year, which is expected to generate annualised cost savings of £20 million. The guiding principle was to right-size our organisation and ensure we are resourced in more strategically focussed areas to maximise our capacity and efficiency. While these decisions are never easy, the cost optimisation initiatives were determined with a view to sustaining profitability levels and ensuring delivery of our long-term strategic growth plan, SP3, which is set out in further detail in the CEO's Report.

YouGov continues to maintain a progressive dividend policy and, in line with this, the Board is pleased to recommend a dividend of 9.0p per share payable on 9 December 2024 to shareholders on the register as at 29 November 2024. This will be tabled for shareholder approval at our Annual General Meeting ("AGM") on 5 December 2024.

SP3 - Commencing the third strategic growth plan (SP3) 

Our vision is for YouGov to be the world's leading provider of marketing and opinion data. To support our realisation of this vision, we choose to operate using the tool of medium-to-long term strategic growth plans to enable us to allocate resources, make investment decisions and to create a close link between corporate performance and executive remuneration. In FY23, the Board approved the strategic direction for our third long-term strategic plan, SP3, to commence from FY24. In this first year of the plan, the Board was delighted to welcome new members of senior management, product owners, and clients, to join our annual strategic offsite in May 2024 where we considered "SP3 in the age of AI". It is clear to us that there is huge potential in AI technology not only to create more efficiencies within our workflows but also to access new layers of value from our unique connected dataset.

Governance and Board composition

During FY24, the YouGov plc Board also saw some changes. In February 2024, Sundip Chahal stepped down as an Executive Director and Chief Business Officer (CBO). Sundip contributed significantly to the Company's first two long-term financial plans during his tenure as CBO and formerly as Chief Operating Officer. In April 2024, in line with our previously disclosed succession plan, Rosemary Leith stepped down from the Board of Directors after nine years. We are grateful to have had Rosemary's outstanding contribution to our Board as Chair of the Remuneration Committee and formerly Senior Independent Director during her tenure. In June 2024, we welcomed Deborah Davis to the Board and as Chair of the Remuneration Committee. Deborah has extensive global experience in platform business models, software, fintech, telecoms and e-commerce businesses, and her appointment further strengthens our governance capabilities. I am confident that we have a strong and balanced Board of Directors to support our growth and strategic ambitions. 

In addition, Steve has strengthened the senior management team through the year, in both functional and regional leadership, as detailed in his CEO's Report, putting the Company in an advantaged position to realise our ambitions.

Environmental, social and governance ('ESG') 

Building on a foundation of ethical, sustainable, and responsible business practices, our commitment to ESG is a natural continuation of who we are as a company, and I am pleased to report on a number of ESG highlights in the year.

Our CEO delivered on his ESG objective to formalise and champion YouGov's policy on neutrality. The principle of neutrality is essential to YouGov's mission to give a voice to what the world thinks. While it has always been a core principle within the market research industry, the introduction of this formal policy ensures that we share a clear understanding of what neutrality means to YouGov and how we apply it to our research and editorial output. Additionally, our new Employee Value Proposition ("EVP") was launched, laying the foundations for a combined, enriching culture as our teams at YouGov and CPS come together to form one, unified business. 

In May 2024, we published our inaugural stand-alone ESG Report (available on our corporate website at: corporate.yougov.com/esg). Introducing our net zero targets and our social mission framework, this report reflects our continued commitment to transparency and accountability in our ESG approach. YouGov's social mission framework incorporates our commitments to support and engage our panel members, clients, employees, and the wider community. From providing unparalleled access to free public data, to maintaining a representative and accessible panel, we are driven by a desire to make a positive social impact. We are also in a unique position to support our clients with their own ESG agendas, and the case studies in our ESG Report illustrate how our trusted insights inform a range of ESG approaches.

Looking ahead and conclusion

On behalf of the Board, I want to reiterate our appreciation of the resilience of all our employees and their dedication to the YouGov values - be fast, be fearless, get it right, trust and respect each other. I wish to commend Steve on his ability to adapt swiftly to the difficult changing conditions we have seen this year and his commitment to a positive, inclusive culture. As we welcome our new colleagues from Knowledgehound, CPS and Yabble and work through the integration plan for our enlarged business, we are committed to maintaining the strongest aspects of culture and learning from our new colleagues to make YouGov a place people can continue to thrive. While the next year will not be without its challenges as we implement our cost actions, I believe our chosen business model and strategy, including our unique and valuable panel asset, is what enables us to continue to deliver long-term value to our stakeholders, and will make YouGov the world's number one market research company.

Stephan Shakespeare 

Chair

5 November 2024

Chief Executive Officer's Statement

FY 2024 was a year of transition for the industry and at YouGov. Having concluded my first year at the company, I am fully convinced that the strength of our data, brand and people remains unrivalled.

Over the past year the business has seen a number of successes and challenges, from the completion of the transformational CPS acquisition and a successful UK General Election cycle to our disappointing trading update in June 2024 and the subsequent announcement of our cost optimisation and restructuring plan. While several factors, both internal and external, have contributed to the challenges we have faced, I am confident the actions we have taken will set the business up for sustained success in the future. I would like to thank all the employees at YouGov and our new colleagues at CPS for their hard work and commitment.

The market research industry has had to adapt to several market forces over the year from the rise of AI-based insights to addressing panel quality issues and the continued high interest rate environment leading to a cautious spending profile from clients. Consequently, the global Market Research sector recorded growth of 5% in 2023¹, in line with inflation and growth rates seen in the prior year, with some of the largest players in our industry recording year-on-year declines. Against this backdrop, YouGov reported 3% underlying² growth in FY24 and 30% reported growth reflecting the CPS acquisition.

FY24 Priorities

We have made considerable progress over the past year in our areas of priority for FY24 and this will set us up for growth in the medium term. These priority areas are:

Cost optimisation plan

Following the lower than expected growth achieved in FY24, we accelerated our internal operational and strategic review of the YouGov business and subsequently commenced a cost optimisation plan. The strategic review included an assessment of our entire product portfolio, reviewing the size and profitability of some of our local operations and evaluating our support function needs for the next 12-18 months.

The Company identified several areas where we could reduce our cost base and reallocate resources to be a more focussed and efficient business. We expect these streamlining measures to lead to annualised cost savings of £20 million, through a reduction in support functions, discontinuing under-performing products, scaling back in certain non-core regions and curtailing third-party supplier costs. It is anticipated that about 70% of the annualised cost savings will be realised in FY25, weighted towards the second half of the year. 

Third strategic growth plan ("SP3")

YouGov's current strategic growth plan aims to deepen YouGov's strategy and complete the final stage of positioning ourselves as a platform business with a dual go-to-market strategy targeting enterprise sales and a digital path to purchase. This strategic growth plan is underpinned by three key growth areas:

Following the announcement of our cost optimisation plan in August 2024, we will be prioritising our investments in areas where we see the greatest potential for return to ensure we remain on track to delivering on SP3. Some of the identified areas of initial investment include:

Following the completion of the CPS transaction, the Group revised its medium-term guidance to include the contribution from CPS, and our ambitions remain unchanged:

The Board is confident that our identified investment priorities and cost optimisation measures will allow the Group to focus on its long-term strategic plan and deliver on the ambitious financial targets over time.

Current trading and outlook

Leadership team

In my first year at YouGov, I have been thoroughly impressed, not only by the calibre of the staff and their dedication to the company, but also their enthusiasm and entrepreneurial spirit. As we evolve into a market leader in our field, it is vital that we become a more globally connected organisation with a clearer corporate structure, which in turn will lead to better accountability and performance.

Beginning with the aforementioned appointment of a new Chief Commercial Officer (CCO), we have reorganised our sales and regional teams to enable greater collaboration, clear roles and responsibilities and alignment of goals. Under the new structure, regional heads have full responsibility of the commercial and delivery teams and report into the CCO. This will enable us to better serve our large multi-national clients using a more global approach to our key client relationships.

Furthermore, we have strengthened our senior leadership team with the appointment of Marc Ryan as Chief Product Officer (CPO) in September 2024. Marc's initial focus will be on YouGov's Data Products, and he joins YouGov to oversee our product strategy with a focus on customer-centric innovation. As CPO, Marc will set our long-term product vision across the entire product ecosystem, including cross-product convergence. With over 30 years of experience in the market research industry, Marc has an exceptional track record as a transformational leader specialising in data, product, and scaling growth across dynamic B2C and B2B environments. Marc joins us at an exciting time for the industry as advances in zero party data and AI see clients demanding more from their research. Combining Marc's expertise with YouGov's renowned data products and our unrivalled proprietary data set, we will continue to be the innovation leader in our industry.

Over the past year, I have witnessed firsthand how YouGov's talented team have worked tirelessly to deliver on the Company's clear purpose and mission. While the year has been one of the most challenging in YouGov's history, I remain excited about our future knowing that we have the right products, people and strategy in place.

Steve Hatch

Chief Executive Officer

5 November 2024

1 According to the ESOMAR Global Market Research Report published in September 2024.
2 Defined in the explanation of non-IFRS measures below.

Chief Finance Officer's Review

While the Group delivered lower than expected growth in the 12 months to 31 July 2024, the first year of its third strategic growth plan, it continued to show positive organic growth rates.  The business has undergone a period of transition and change over the past year which in part has led to a near-term slowdown in its growth trajectory. However, we expect that the remedial actions taken towards the end of the financial year will put us back on track to delivering strong growth over the medium term and beyond.

Group revenue was up 30% in reported terms to £335.3m during the period, largely due to the contribution from the acquired CPS business. On an underlying¹ basis (excluding foreign exchange movements and contribution from acquisitions) revenue was up 3% (FY23: 9%). Performance across the regions was varied as weakness in EMEA (excluding CPS) due to internal leadership challenges was offset by strong performance in the US, which recorded growth of 8% on an underlying¹ basis.

Gross margin increased slightly to 81% (FY23: 80%), as higher spend on external panel for niche audiences was offset by the inclusion of the CPS business.

Group operating costs (excluding separately reported items) of £221.5m (FY23: £158.2m) increased by 40% in reported terms. Adjusted operating profit¹ was slightly ahead of the prior financial year at £49.6m (FY23: £49.1m), including the contribution from the CPS acquisition, representing an adjusted operating margin of 15% (FY23: 19.0%). Underlying¹ operating profit decreased by 37% due to slower than expected revenue growth and increased investments in staff costs at the start of the financial year.

Additionally, the Group's results were impacted by the net appreciation of UK Sterling, as its average exchange rate was 4% higher against the US Dollar in this period against the prior period. Movement against the Euro was 1% higher compared to 31 July 2023. The net impact of foreign exchange on the Group's adjusted operating profit¹ was a decrease of £2.6m compared to calculation in constant currency terms. 

The Group's statutory operating profit decreased to £10.9m (FY23: £44.4m), after charging separately reported items of £38.7m (FY23: £4.7m).

FY24 presentational changes and FY23 restatements

During the reporting period, the company identified errors in the previously reported FY23 financial statements. These errors have been corrected in accordance with IAS 8, which requires retrospective restatement. The errors related to capitalised software development and panel incentive provisions, as noted below. There is immaterial income statement impact in 2023.

The Group has reviewed and adjusted certain presentational items, triggered by the transformational acquisition of CPS during the year. The adjustments have been made to provide uniformity of accounting policies and processes and also improve the comparability of performance. 2023 comparatives have been updated to reflect these presentational changes. Key changes made include:

Performance by division

Following the acquisition of CPS, the segmental breakdown has been updated in FY24 to include CPS as a separate division and to combine Custom Research and Data Services, previously shown as separate divisions, into a single division called "Research".

Data Products

Our subscription-based data products suite includes YouGov BrandIndex and YouGov Profiles as well as newer behavioural products, such as YouGov Safe.

Revenue from Data Products decreased by 2% in the period and was largely flat on an underlying¹ basis. The division saw underlying¹ growth across all regions, except for low single-digit decline in the Americas, where new subscription sales were lower owing to pressure on client budgets. Renewal rates for our subscription products have remained in line with the prior year as existing clients continue to maintain spend. The division saw strong growth from its largest industry vertical, agencies, and the travel sector, while there was weakness in the gaming and media owners segment.

As a result of the division's lower revenue performance, the adjusted operating profit¹ from Data Products decreased by 26% to £27.4m. Additionally, higher investments in Data Products as we look to improve the user interface and build new products and features, resulted in a contraction in the adjusted operating margin¹ to 33% (FY23: 43%).

CPS

Our CPS division provides household purchase data across 18 European countries.

CPS contributed £74.2m of revenue and £19.7m in adjusted operating profit following the completion of the acquisition on 9 January 2024. CPS's revenue recognition policies have been harmonised with YouGov's and, as a result, most of the revenue is now being recognised at a point in time as per the IFRS 15 definition. The division delivered a higher level of reports in July than anticipated at the time of the trading update on 6 August 2024, leading to higher revenue being recognised in FY24. This has also led to a high level of profit contribution to Group results during the period and is expected to normalise over a twelve-month period.

Research

Our Research division combines our legacy Data Services and Custom Research divisions into a single reporting unit. It comprises our fast turnaround research services, such as YouGov RealTime Omnibus, as well as customised research projects and multi-year tracking studies.

Revenue in the Research division increased by 3% in reported and 5% in underlying¹ terms to £177.7m, as the continued weakness in fast-turnaround Data Services projects was more than offset by strong growth in ad-hoc and multi-year Custom Research work. In particular, the Americas saw mid-teens underlying¹ growth, largely driven by the technology sector. Good performance was recorded in the UK, despite a slowdown in the media sector, driven by new wins with retail clients and growth in the academic sector. EMEA recorded a low single-digit increase on an underlying basis¹ primarily due to weakness in the Swiss business.

The adjusted operating profit¹ decreased 22% over the prior year to £19.8m and the margin contracted from 15% to 11%, due to higher staff costs and investments in support functions.

Performance by geography

YouGov's geographic footprint spans the UK, Europe, the Americas, Asia Pacific and the Middle East.

Panel development by geography

We continued to invest in our panel to ensure we are able to meet our clients' research needs and to deliver nationally representative samples in our newer markets. As at 31 July 2023, the total number of registered panellists had increased by 13% to 29 million, compared to 26 million as at 31 July 2023, as set out in the table below.

Group financial performance

Amortisation of intangible assets

In the 12 months to 31 July 2024, amortisation charges for intangible assets of £31.0m were £10.0m higher than the previous year, largely due to amortisation of acquired customer relationship assets and order backlog linked to the CPS acquisition. Amortisation of our panel assets increased by £1.6m to £12.1m and amortisation of software decreased by £0.7m to £8.6m. £6.7m (FY23: £7.9m) of the total software development charge related to assets created through the Group's own internal development activities, £1.4m (FY23: £1.2m) related to separately acquired assets and £0.5m (FY23: £0.2m) was for amortisation on assets acquired through business combinations.

Separately reported items

Acquisition-related costs in the year of £17.3m comprise professional service costs from banks, lawyers and accountants in respect of the acquisition of CPS and KnowledgeHound and £0.7m of contingent consideration treated as staff costs in respect of the acquisitions of Charlton Insights Inc., YouGov Finance Limited (formerly Lean App Limited) and Faster Horses Pty Limited.

Re-organisation and integration costs of £9.1m were incurred in relation to integration of acquired businesses into the Group and the provision made for the planned restructuring as part of implementing the cost optimisation plan.

Amortisation of acquired customer relationship assets and order backlog, in relation to the acquisition of CPS and LINK Marketing Services AG, amounted to £9.9m for the period ended 31 July 2024 (FY23: £0.8m).

Impairment charge of £2.4m booked relating to goodwill and intangible assets for MENA following annual goodwill impairment review. 

Finance Costs

Group net finance costs increased to £6.9m (FY23: income of £0.2m). Interest payable on our debt facilities amounted to £8.7m for the twelve months ended 31 July 2024. Finance income during the same period was £1.8m, largely due to interest received on bank deposits.

Profit before tax and earnings per share

Adjusted profit before tax¹ of £45.0m was a decrease of 21% versus the prior year, below the adjusted operating profit growth, largely due to interest expense in relation to the new debt facility entered into during this financial year and a lower share-based payment charge. The adjusted tax rate¹ increased from 21% in FY23 to 24% in the period. Statutory profit before tax of £4.0m was reported compared to £44.7m in the year ended 31 July 2023, a decrease of 91%, after accounting for separately reported costs of £38.7m.

Profit before tax includes a £1.8m loss resulting from of a social engineering event in H2 2024. In this event, impersonation technology was leveraged to successfully instruct the authorisation of a fraudulent payment. There was no breach of YouGov systems, and no client, supplier, employee or panel data was compromised. We believe we have taken the necessary actions, and sufficiently increased control measures and employee awareness, to prevent future incidents of this nature.

During the period adjusted basic earnings per share¹ declined by 29% from 41.1p to 29.4p, and statutory basic earnings per share decreased from 31.5p to (2.0p).

Cash flow and capital expenditure

The Group generated £53.9m (FY23: £69.0m) in cash from operations (before paying interest and tax) including a £9.4m inflow (FY23: £4.2m outflow) from net working capital and £4.7m payment for deferred consideration; the cash conversion rate (percentage of adjusted EBITDA¹ converted to cash) decreased from 94% to 71% of adjusted EBITDA¹. Taxation payments for the year totalled £9.6m (FY23: £9.3m).

The Group invested £4.2m (FY23: £7.8m) in the continuing development of our technology platform internally and £1.9m (FY23: £1.2m) was invested on separately acquired software tools. Investment in panel recruitment increased compared to the prior year at £11.2m (FY23: £7.3m), of which £1.9m was in relation to the inclusion of CPS. In addition, £2.0m (FY23: £1.1m) was spent on the purchase of property, plant and equipment, resulting in a total investment in fixed assets of £19.3m (FY23: £17.4m).

Total expenditure on intangible assets and property, plant and equipment is shown below:

In January 2024, the Group completed two acquisitions for a total consideration of £268.8m (net of cash acquired). The consideration was funded through a net drawdown of £224.2m in bank loans and existing cash on the balance sheet, primarily generated from the £49.8m equity placing completed in July 2023 in relation to the acquisition of CPS.

Net inflow from financing activities is after deducting the dividend payment of £10.1m (FY23: £7.7m) and the purchase of treasury shares for £1.9m to satisfy future employee share option exercises (FY23: £9.8m). As a result, net cash balances at the year-end decreased by £32.9m to £73.6m.

Balance sheet

As at 31 July 2024, total shareholders' funds decreased from £199.1m to £183.1m. Net assets decreased from £198.9m to £183.2m, with a minority interest of £0.1m accounting for the difference.

During the period, the Group entered into a €280m debt facility to fund the acquisition of CPS. This facility comprised a €40m Revolving Credit Facility ("RCF") and a €240m amortising term loan with a tenor of four years ("Term loan"). As of 31 July 2024, the full-term loan was drawn and €24m was drawn on the RCF. Non-current liabilities increased from £17.0m to £231.8m.

Net current assets decreased from £72.5m to a net current liability position of £45.7m. Current assets decreased from £165.4m to £149.0m, mainly due to the lower cash balance following the payment for the acquisition of CPS. Current liabilities increased from £92.9m to £194.7m, mainly due to the addition of CPS and the first scheduled payment on the debt facility due in October 2024.

The Group's liquidity position remains strong with £73.6m in cash on the balance sheet and €16m of the RCF available for drawdown. The Group's net debt as at 31 July 2024 was £148.2m and, excluding the impact of IFRS 16, the Group's leverage ratio¹ as of 31 July 2024 was 1.7x. 

Proposed dividend

The Board is recommending the payment of a final dividend of 9.0p per share for the year ended 31 July 2024. If shareholders approve the dividend at the AGM (scheduled for 5 December 2024), it will be paid on Monday 9 December 2024 to all shareholders who were on the Register of Members at close of business on Friday 29 November 2024.

Alex McIntosh

Chief Finance Officer

5 November 2024

1 Defined in the explanation of non-IFRS measures below.

Explanation of non-IFRS measures

Reconciliation of non-IFRS measures

Publication of Non-Statutory Accounts

The audited financial information relating to the year ended 31 July 2024 set out below does not constitute the Group's statutory accounts for that year but has been extracted from the statutory accounts, which have not yet been filed with the Registrar.

Consolidated Income Statement
for the year ended 31 July 2024

Consolidated Statement of Comprehensive Income
for the year ended 31 July 2024

Consolidated Statement of Financial Position
as at 31 July 2024

Consolidated Statement of Changes in Equity
for the year ended 31 July 2024

Consolidated Statement of Cash Flows
for the year ended 31 July 2024

Notes to the Consolidated Financial Statements
for the year ended 31 July 2024

Nature of operations

YouGov plc and subsidiaries' (the "Group") principal activity is the provision of digital market research.

YouGov plc (the "Company") is the Group's ultimate Parent Company. It is a public limited company incorporated and domiciled in United Kingdom. The address of YouGov plc's registered office is 50 Featherstone Street, London EC1Y 8RT, United Kingdom. YouGov plc's shares are listed on the

Alternative Investment Market of the London Stock Exchange.

YouGov plc's annual consolidated financial statements are presented in UK Sterling, which is also the functional currency of the Parent Company. Figures are rounded to the nearest million, unless otherwise indicated.

Basis of preparation

The consolidated financial statements of YouGov plc are for the year ended 31 July 2024. They have been prepared under the historical cost convention modified for fair values under International Financial Reporting Standards ("IFRS"). Financial assets, such as defined benefit plan assets, and financial liabilities, such as contingent consideration, are measured at fair value.

These consolidated financial statements have been prepared in accordance with UK-adopted international accounting standards in conformity with the requirements of the Companies Act 2006 applicable to companies reporting under IFRS.

The separate financial statements of the Company are presented as required by the Companies Act 2006.

Restated Balance Sheet Due to Prior Period Errors (IAS 8)

During the preparation of the FY24 financial statements, the company identified errors in the previously reported FY23 financial statements. These errors have been corrected in accordance with IAS 8, which requires retrospective restatement.

The errors related to capitalised software development and panel incentive provisions. The adjustments have been applied retrospectively with the comparative figures for the year ended 31 July 2023 restated accordingly. The table below summarises the adjustments made. There is immaterial income statement impact in 2023:

No retained earnings for the year ended 31 July 2023 with carry-over impact of £2.7m from 1 August 2022 restated financials.

Capitalised software development

During the current year audit, it was identified that there was an error in relation to the misapplication of IAS 38 accounting policy against software additions. Previously the additions were being amortized in the month the cost was incurred rather than when the asset was available for use. The software development asset was understated by £4.4m (see note 10).

Panel Incentive provision

The group historically accounted for panel incentive provision under IAS 37, however in FY24 it was challenged whether the arrangement with our panellists met the criteria of a financial liability per IFRS 9/IAS 32 since the panellists hold a contractual right to receive cash on reaching the specified redemption levels. Therefore, the panel incentive points have been classified into following categories:

The net impact has been to recognise to recognise a financial liability of £3.3m and derecognise panel provision of £1.6m on the prior year opening balance sheet. The difference has been recognised as an adjustment to retained earnings

FY24 presentational changes and FY23 restatements

During the reporting period, the Group has reviewed and adjusted certain presentational items, triggered by the transformational acquisition of CPS during the year. The adjustments have been made to provide uniformity of accounting policies and processes and also improve the comparability of performance. 2023 comparatives have been updated to reflect these presentational changes. None of these adjustments impact net assets, reported statutory profit or the tax charge for the year. Key changes made include:

None of the above adjustments have an impact on net assets, reported statutory profit for the year or tax charge.

Going concern

The Group meets its day-to-day working capital requirements through its cash reserves and has access to a €40m Revolving Credit Facility ("RCF"). At 31 July 2024, the Group had a healthy liquidity position with £73.6m of cash and cash equivalents. £20.0m of the RCF was drawn as at 31 July 2024. The Group has net current liabilities of £45.7m and net assets of £183.2m as at 31 July 2024.

While FY24 saw a decline in profitability leading to the trading update in June 2024, the Group achieved a 15% adjusted operating profit margin and underlying revenue continued to increase year on year. Building on that, £20m of cost actions have been built into the budget for FY25.

Having performed a going concern analysis covering the period out to January 2026, management consider it is appropriate to continue to adopt the going concern basis in preparing the Consolidated and Company financial statements. In doing so, management has considered:

The Group's financing arrangement require covenants to be met. The covenants are Adjusted Leverage ratio (broadly, the ratio of Net Debt to Adjusted EBITDA) and Interest Cover (broadly, the ratio of net finance charge to Adjusted EBITDA). The facility covenants are tested semi-annually and include

(i) a maximum Adjusted Leverage of 3.0x and, (ii) a minimum Interest Cover of 4.0x. The first covenant testing period was 31st January 2024.

A severe but plausible scenario has been modelled whereby revenue does not grow at all year on year, which is considered appropriate as it reflects not achieving the expected growth built into the FY25 Budget across the now diversified group including CPS. The severe but plausible scenario is not a forecast of the Group and is designed to stress test liquidity and covenant compliance.

In their review of the severe but plausible scenario, the Directors have also considered several mitigations that would help maintain headroom on the Group's covenants, and are at their discretion, including but not limited to:

A reverse stress test was also performed using the severe but plausible scenario and mitigations, it then took a further 9% reduction in revenue over the going concern period to cause a breach in covenants. It was deemed this was an implausible scenario, however if this scenario were to occur there are further mitigations that could be applied.

The Directors have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due for a period of at least 12 months from the date of approval of these financial statements. Accordingly, the Directors continue to adopt the going concern basis for the preparation of the financial statements.

1 Segmental analysis

Supplementary analysis by geography

Revenue and adjusted operating profit by geography based on the origin of the sale:

1 Americas refers to the US, Canada and Latin America.

2  EMEA includes Mainland Europe, Middle East, India and CPS