Best panel
Best data
Best tools
Annual Report and Accounts 2019
Welcome to the YouGov plc
Annual Report for the year
ended 31 July 2019.
Summary of financial results
Financial and operational highlights
Revenue per head £m
• Revenue growth of 17% (2018: 9%) – underlying
+17% £0.1
2018: £0.1
Revenue £m
£136.5
2018: £116.6
£28.6
2018: £20.9
Adjusted EBITDA 1 £m
Staff costs as a % of revenue
+37% 48%
-1% pts
2018: 49%
(2018: 11.5p)
business3 growth of 10%
• Adjusted operating profit2 up by 45% to £18.3m –
45% underlying business3 growth
• Statutory operating profit up 69% to £19.8m
• Adjusted profit before tax2 up by 26% to £20.5m
• Adjusted basic earnings per share2 up by 30% to 14.9p
Adjusted operating profit2 £m
Statutory operating profit £m
£18.3
2018: £12.7
+45% £19.8
+69%
2018: £11.8
Adjusted operating profit
margin2 %
Operating cash generation £m
13%
2018: 11%
+2% pts £35.3
+52%
2018: £23.6
Adjusted profit before tax2 £m Statutory profit before tax £m
£20.5
2018: £16.3
+26% £19.5
+65%
2018: £11.8
Adjusted basic earnings per
share1 pence
Statutory basic earnings per
share pence
14.9p
2018: 11.5p
+30% 14.2p
+84%
2018: 7.7p
1. Defined in the explanation of Non-IFRS measures on page 38.
2. Defined in the explanation of Non-IFRS measures on page 38. In these Full-Year results
and in future, we are using a revised definition of adjusted operating profit that includes
amortisation of intangible assets charged to operating expenses; comparative figures
have been restated accordingly.
3. Defined as growth in business excluding impact of current and prior period acquisitions
£9.1m, the reduction in revenue as a result of the rationalisation of the Custom Research
business (£2.7m) and movement in exchange rates £2.4m.
• Adjusted operating profit margin2 up 2 percentage
points to 13%
• Net cash balances of £37.9m (31 July 2018: £30.6m)
• Recommended dividend increase of 33% to
4.0p per share, payable in December 2019
(2018: 3.0p per share)
• Data Products & Services revenue up by 32%
to £78.7m (18% from underlying business3);
now representing 56% of total (2018: 50%)
- Data Products revenue increased by 36%
(25% from underlying business3) to £41.5m.
Adjusted operating profit2 up by 50% to £14.1m
- Data Services revenue increased by 28%
(11% from underlying business3) to £37.2m.
Adjusted operating profit2 up by 21% to £7.4m
• Custom Research revenue increased by
2% to £60.0m; continued strategic focus on higher
margin work resulting in a 10% increase in adjusted
operating profit2 to £12.9m
• Strong performance from the UK and US: UK revenue
grew by 31% (18% underlying business3) and US
revenue grew by 17% (5% underlying business3)
• First five-year plan complete – stretching
targets exceeded
For more information visit:
corporate.yougov.com
Contents
Strategic report
Financial statements
About YouGov
4
Our reach
5
Chair’s statement
6
Our stakeholders and our values
8
Our strategy
9
12
Our business model
14 Our media presence
16 Our products and services
32 Chief Executive Officer’s review
34 Chief Financial Officer’s report
39 Principal risks and uncertainties
78
79
80
81
82
83
94
122
125
126
Consolidated Income Statement
Consolidated Statement of
Comprehensive Income
Consolidated Statement of
Financial Position
Consolidated Statement of Changes
in Equity
Consolidated Statement of Cash Flows
Principal Accounting Policies of the
Consolidated financial statements
Notes to the Consolidated
financial statements
Independent auditors’ report to
the members of YouGov plc on the
Parent Company financial statements
Parent Company Statement of
Financial Position
Parent Company Statement of Changes
in Equity
127 Parent Company Statement of Cash Flows
128
Notes to the Parent Company
financial statements
Governance report
44
46
48
Chair’s Introduction and Corporate
Governance Statement
Board of Directors
Corporate Governance Report
52 Nomination Committee Report
Audit & Risk Committee Report
53
Remuneration Committee Report
56
Directors’ Remuneration Policy
57
Annual Report on Remuneration
62
Environmental, Social &
65
Governance Report
68 Directors’ Report
71
72
Directors’ Responsibilities Statement
Independent auditors’ report to the
members of YouGov plc on the Group
financial statements
Additional information
144 Notice of Annual General Meeting
146
Notes to the Notice of Annual
General Meeting
1
In this section
Chair’s statement
4 About YouGov
5 Our reach
6
8 Our stakeholders and our values
9 Our strategy
12 Our business model
14 Our media presence
16 Our products and services
32 Chief Executive Officer’s review
34 Chief Financial Officer’s report
39 Principal risks and uncertainties
Strategic
report
2 YouGov Annual Report and Accounts 2019
Collecting
YouGov collects opinion data
from its proprietary global
panel of 8 million individuals
and stores it all in the
YouGov Cube.
3
Strategic report Our ground-breaking syndicated data products include the daily
brand perception tracker, YouGov BrandIndex, and the media
planning and segmentation tool, YouGov Profiles. Our market-
leading YouGov Omnibus service provides a fast and cost-
effective solution for reaching nationally representative and
specialist samples. YouGov’s Custom Research division offers
a wide range of quantitative and qualitative research, tailored
by sector specialist teams to meet clients’ specific requirements.
With operations in the UK, North America, Mainland Europe,
the Nordics, the Middle East and Asia Pacific, YouGov has one
of the world’s largest research networks.
YouGov
Best panel
Best data
Best tools
For information on our products and services,
see yougov.com.
For corporate and investor relations information,
see corporate.yougov.com.
36
offices
About YouGov
YouGov is an international research
and data analytics group.
Our mission, vision and values
Our mission is to supply a continuous stream of accurate data
and insight into what the world thinks, so that companies,
governments and institutions can better serve the people
and communities that sustain them.
Our vision is for YouGov to be the world’s leading provider of
marketing and opinion data. We want YouGov data to be a
valued public resource used by hundreds of millions of people
on a daily basis, enabling intelligent decision-making and
informed conversations.
We are driven by a set of shared values. We are fast, fearless
and innovative. We work diligently to get it right. We are guided
by accuracy, ethics and proven methodologies. We trust each
other and bring these values into everything that we do.
Best panel
Our core offering of opinion data is derived from our highly
engaged proprietary global panel. Each day, the YouGov Global
Panel in more than 40 markets provides us with thousands of
data points on consumer attitudes, opinions and behaviour.
We capture these streams of data in the YouGov Cube, our
unique connected-data library that holds over ten years of
historic single-source data.
Best data
As the pioneer of online market research, we have a strong
record for data accuracy and innovation. A study by the
Pew Research Center concluded that YouGov “consistently
outperforms competitors on accuracy” as a vendor of choice.
We are the market research pioneer of Multilevel Regression
and Post-stratification (“MRP”) for accurate predictions at a
granular level.
Best tools
We maximise the value of our connected data through the
application of leading-edge analytics technology and strong
research expertise. Our integrated suite of products, services
and tools operate as a systematic platform serving YouGov data
and intelligence for all stages of the marketing workflow.
YouGov data is delivered through YouGov Crunch, the most
advanced analytics tool for research data, combining super-fast
processing with drag-and-drop simplicity.
8.4m
panellists
4 YouGov Annual Report and Accounts 2019
Strategic report Our reach
YouGov has one of the world’s
largest research networks.
Cities in which we have offices
1.
London
2. Manchester
3. Guildford
4. Cologne
5. Berlin
6. Frankfurt
7. Barcelona
8. Madrid
9. Milan
10. Helsinki
11. Copenhagen
12. Oslo
13. Stockholm
14. Paris
15. Warsaw
16. Bucharest
17. Redwood City, CA.
18. San Francisco, CA.
19. Portland, OR.
20. Cheshire, CT.
21. New York, N.Y.
22. Herndon, VA.
23. Washington D.C.
24. Chicago, IL.
25. Boston, MA.
26. Toronto
27. Thane
28. Mumbai
29. Hong Kong
30. Shanghai
31. Singapore
32. Jakarta
33. Bangkok
34. Kuala Lumpur
35. Sydney
36. Dubai
YouGov Global Partnerships Programme
The YouGov Global Partnerships Programme offers affiliate
partner research agencies access to YouGov’s platforms,
expertise and (where required) panel, while establishing
the YouGov brand and data products in the local market.
YouGov has partnerships in place with agencies in Egypt,
Japan, Pakistan, Poland and Russia.
19
18 17
26
24
22
20
23
25
21
12
4
9
11
5
6
2
3 1
14
8
7
13
10
15
16
over
over
1,000
employees
4,000
clients
36
27
28
30
29
33
34
31
32
Key
YouGov proprietary panel
Partner panel
YouGov Data Operations
Shared Service Centres
YouGov Technology
Development Hub
35
5
Strategic report Chair’s statement
YouGov is an international data and
analytics group. We provide our clients
with the data and insights to help them
plan, develop and evaluate the impact
of their marketing and communication
activities. We now operate from 36
offices in 22 countries. This enables
us to serve clients in more than 40
national markets. We operate a global
panel of over 8 million panellists
who share their data with us in ways
that are fully compliant with data
protection, privacy and security laws.
We have achieved another year of strong organic revenue
growth, well ahead of the market1. This growth has led to a further
increase in profitability, as we continue to focus on improving the
business’ margins.
Results and dividend
Group revenues were up 17% in reported terms to £136.5m
(10% up on underlying business2) while adjusted operating
profit3 increased by 45% on the prior financial year to £18.3m.
Improving margins has been a key component of YouGov’s
2014-19 five-year plan for the business, and a significant driver of
increased adjusted operating profit. This is in part a result of the
business’ strategy to focus on subscription data products.
These results reflect the Group successfully exceeding its five-
year targets, as well as an encouraging start to the next phase
of YouGov’s growth. The Board remains confident in YouGov’s
potential, and is therefore pleased to recommend a dividend
increase of 33% to 4.0p per share, payable on 16 December 2019.
Strategic direction
This year was the final year of our first five-year plan (“FYP1”).
Over the course of FYP1, we have taken a series of actions
consistent with our stated plan of moving away from traditional,
project-based, market research to a subscription-based
syndicated data model with supplementary data analysis
services. We have chosen this strategic direction based on
the changing needs of our clients and the availability of new
technologies. It informs our decisions on recruitment, training,
technology and geographic expansion.
Our aspirational goal is to be recognised as the world’s leading
provider of high-quality market and opinion data and insights.
Our cultivation of the world’s largest and most engaged
consumer panel will be a key enabler of this goal.
Long-term growth plans and LTIP targets
We choose to operate using the tool of five-year strategic growth
plans to enable us to allocate resources, make investment
decisions and to create a close link between corporate
performance and executive remuneration. At the same time,
as YouGov is growing fast in a dynamic and rapidly changing
market, we place a high emphasis on remaining agile and nimble.
6 YouGov Annual Report and Accounts 2019
Revenue £m
£136.5m
+17%
67.4
76.1
88.2
107.0
116.6
2014
2015
2016
2017
2018
2019
Adjusted operating profit1 £m
£18.3m
+45%
3.4
3.9
5.4
8.0
12.7
2014
2015
2016
2017
2018
2019
Operating cash generation £m
£35.3m
+52%
9.0
10.4
14.1
18.9
23.6
2014
2015
2016
2017
2018
2019
Adjusted basic earnings per share1 pence
14.9p
+30%
3.0
3.5
4.8
6.2
11.5
2014
2015
2016
2017
2018
2019
Adjusted profit before tax1 £m
£20.5m
+26%
3.7
4.5
7.8
9.9
16.3
2014
2015
2016
2017
2018
2019
Statutory operating profit £m
£19.8m
+69%
1.0
2.9
4.3
7.6
11.8
2014
2015
2016
2017
2018
2019
1 Defined in the explanation of Non-IFRS measures on page 38.
Strategic report Having a five-year plan does not mean we feel we can
confidently predict exactly how our market and our business
will evolve over time, but it does set fixed and challenging
financial performance targets which will create significant
shareholder value.
down in September 2019 after nine years’ service and Nick Jones
will be stepping down in December 2019 after ten years’ service.
Both Ben and Nick made significant contributions to YouGov over
the years and, on behalf of shareholders, the Board offers them
our sincere thanks.
The key targets for FYP1 were to grow adjusted earnings per
share at a compound annual rate of more than 25% and for the
average adjusted operating margin to be at least 12% (under the
previous ‘adjusted’ definitions) over the five years to 31 July 2019.
As this year’s results show, both of those stretching targets were
exceeded and therefore the long-term incentive plan aligned
with FYP1, the LTIP 2014, is due to vest in full in November 2019.
The Company’s next long-term growth plan (“FYP2”) has been
approved by the Board and focuses on the achievement of our
aspirational goals and targets. The key targets for the four years
to 31 July 2023 which define FYP2 are:
• Double Group revenue
• Double Group adjusted operating profit margin3
• Achieve an adjusted earnings per share3 compound annual
growth rate in excess of 30%
Ashley Martin, who joined the Board during the year, has
taken over from Nick as Chair of our Audit & Risk Committee.
Rosemary Leith, who chairs our Remuneration Committee, will
be taking on Nick’s role as Senior Independent Director. For more
information on the composition of our Board, see page 48.
Following Nick’s departure, our Board will consist of four
independent Non-Executive Directors and three Executive
Directors. We have in place a comprehensive succession plan
for all Board members to ensure we continue to have the right
balance of skills and independent oversight.
Stakeholders
YouGov now employs more than 1,000 staff across four
continents. On behalf of the Board and shareholders, I would like
to thank all our employees, as well as our panellists, partners and
clients, for their contribution to YouGov’s ongoing success.
Following consultation with the Company’s major shareholders,
the Board has approved a new long-term incentive plan aligned
with FYP2, with full vesting to be determined by growth in
adjusted earnings per share3 at a compound annual rate of
more than 35%. The LTIP 2019 forms part of the 2019 Directors’
Remuneration Report (on pages 57 to 64) which shareholders will
be invited to approve at the upcoming Annual General Meeting.
Employee Benefit Trust
During the year, we established a new Employee Benefit Trust
and approved a Share Purchase Programme of up to 1,000,000
YouGov plc shares by the end of October 2019. As at 31 July
2019, the Trust held 755,000 Ordinary Shares. These shares
will ultimately be used by the Trust for the settlement of awards
granted under the Company’s employee share plans. At the time
of writing, a continuation of the Share Purchase Programme for
a further 12 months to October 2020 is under consideration by
the Board.
Board composition
Following the year-end, we announced the retirement of two
Non-Executive Directors from the Board. Ben Elliot stepped
Current trading
Trading in the current financial year is in line with the
Board’s expectations.
Roger Parry
Chair
8 October 2019
1. According to the ESOMAR Global Market Research Report published in September 2019,
global research market turnover grew by 2.1% in 2018 (or by -0.3% after inflationary effects
are factored in).
2. Defined as growth in business excluding impact of current and prior period acquisitions
£9.1m, the reduction in revenue as a result of the rationalisation of the Custom Research
business (£2.7m) and movement in exchange rates £2.4m.
3. Defined in the explanation of Non-IFRS measures on page 38. In these Full-Year results
and in future, we are using a revised definition of adjusted operating profit that includes
amortisation of intangible assets charged to operating expenses; comparative figures
have been restated accordingly.
These results reflect the
Group successfully
exceeding its five-year
targets, as well as an
encouraging start to the next
phase of YouGov’s growth.”
7
Strategic report Our stakeholders and our values
Our Company Values:
As a reflection of our growing business, during the year we
launched new Company Values. Our approach and success
are underpinned by these values:
Be Fast
Things are constantly changing and as a company we know
we are in constant competition. We must always be fast to
adapt, and fast to deliver.
Be Fearless
Be brave and believe we can do anything. We’ve proven
we can. So innovate, take savvy risks, don’t follow the crowd.
Be yourself.
Get It Right
We are judged on our ethics, our methodology, and
our accuracy – we will do the right thing as scientists,
as technologists, and as citizens.
Trust Each Other
We have a mission, a strategy, and a plan for implementation.
Let’s all work together in trust – challenging, pushing,
improving each other to fulfil our ambition.
As a business focussed on what the
world thinks, our stakeholders are vital
to our ongoing success. Throughout
this report you will find examples of
how our stakeholders influence and
contribute to our business and how
we provide value to them in return.
Our stakeholder groups are:
Panellists
Keeping our panellists engaged is key to ensuring high-quality
up-to-date data and we work to continually improve the
panellist experience.
Employees
To keep innovating and developing at the rate necessary to attain
our objectives, we hire high-achieving, talented employees and,
in return, they rely on us to provide good employer value.
Clients
Our clients rely on our timely supply of the high-quality,
accurate data they need.
Community
We supply select data to the public free of charge as a public
service, through our Public Data offering.
Suppliers and Partners
We aim to work with organisations that match our values
and share our ethical approach to business.
Media
Our research is a trusted resource regularly referenced by
media outlets worldwide.
Shareholders
Our management engage with shareholders regularly
throughout the year to ensure they are appraised of,
and on board with, our strategic growth plans.
8 YouGov Annual Report and Accounts 2019
Strategic report Our strategy
In the early 2000s, then a fledgling
UK-based market research firm,
YouGov pioneered the use of the
internet to undertake surveys and
collect the results.
The YouGov model was founded on our belief that, done
properly, internet-based research is more accurate than
traditional market research methods, while also being faster,
more flexible and richer in data. Our traditional competitors
have, mostly, recognised this and also moved to internet-
based research.
Since that start, our business model has evolved in keeping
with the growth of internet usage, the advancement of big
data analytics, and the changing needs of our clients. We are
successfully implementing our clearly defined strategy of
developing smarter alternatives to traditional market research -
based on connected data, new analytical tools and innovative
applications - and we have laid the ground work for bringing
it all together into a single system for applied research.
In 2014, we adopted an ambitious five-year growth plan (“FYP1”)
for transitioning YouGov from a market research business to a
research data and analytics business. Two key objectives and
achievements of the plan were to increase the proportion of
revenue from our Data Products and Services divisions, and to
see significant growth in adjusted earnings per share. In order to
achieve these objectives we have invested in developing not only
our suite of products and services, but also the technology and
data which underpins our commercial offer (see pages 16 to 31).
Our next five-year growth plan (“FYP2”), which runs to 2023,
reflects our ambition to create a universal platform for the ethical
and safe sharing of opinions and personal data. The underlying
strategy that drives the plan is defined by the mantra: “YouGov.
Best panel - Best data - Best tools”. Underpinning our strategy
are three strategic pillars: Data Integration, Ethical Activation, and
Public Value (see pages 10 and 11).
Five-year strategic growth plans
To counteract any short-termist behaviour and avoid a cliff-edge
of incentives, this reporting year was an overlap year between
the two plans, and this year’s results form the baseline for the
ambitious targets that define FYP2. The targets for the four-year
period to 2023 are:
• Double Group revenue
• Double Group adjusted operating profit margin1
• Achieve an adjusted earnings per share1 compound annual
growth rate in excess of 30%
Our ambition is to have the world’s largest and most engaged
research panel and be the leading supplier of proprietary panel
data, used by every public-facing organisation and by hundreds
of millions of people as a public daily resource. We want YouGov
to be the world’s leading provider of high-quality market and
opinion data and insights.
The YouGov model is more
than a poll. It’s a hybrid
of a traditional opinion
survey and an exercise
in big data analysis.”
Bloomberg
FY to
31 July
2015
FY to
31 July
2016
FY to
31 July
2017
FY to
31 July
2018
FY to
31 July
2019
FY to
31 July
2020
FY to
31 July
2021
FY to
31 July
2022
FY to
31 July
2023
Pence
Adjusted basic earnings per share1
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0
Current five-year growth plan (“FYP2”)
First five-year growth plan (“FYP1”)
Five-year adjusted basic earnings per share1 compound growth rate 38%
1 Defined in the explanation of Non-IFRS Measures on page 38.
9
Strategic report Our strategy continued
Three Strategic Pillars
1
Data Integration
2
Ethical Activation
Strategic focus
Conventionally, research is used to understand markets
and plan campaigns, while activation – using data to create
targetable audiences for advertisers and actually deliver
marketing to them – is viewed as a separate process.
We are now breaking down the barrier between the two
with YouGov Direct.
With this new platform, YouGov Direct members can make
their opinion and behavioural data available for in-depth,
targeted research, which can be done outside of a pure
research context and within a marketing and sales context.
The data can be used in this way because members
have permissioned each specific use with the security
of accountability enabled through the YouGov Direct
blockchain-encryption process.
The system is not only GDPR-compliant but GDPR-
embracing – that is, it enables ethical use of data to create
more control and value for members and clients alike.
This means, with YouGov Direct, researchers and marketers
have the unique opportunity to reach precise target
audiences, upgrade their existing research-based advertising
tests (understanding business outcomes rather than claimed
intention), and create a seamless single audience view, from
planning through to campaign execution and measurement.
It addresses the single most important challenge to the
marketing industry, namely the increasingly intense pressure
on using personal data for advertisement targeting.
Progress so far
The first pilot of YouGov Direct in early-2019 proved highly
successful as a positive experience for members, and as a
demonstration to potential clients of added power for both
research and marketing.
A commercial version of the app has since been developed
which includes a collaborative dashboard for clients, the
start of a self-service facility. June 2019 saw the alpha version
launch of the app in the UK, with an upgraded version due
to be launched in the US this month. The third geography
is planned to be in India, early in 2020.
A commercial head of the product, who previously headed
our Data Products division, is in place, based in New York.
The YouGov Direct team now consists of nine, across the UK
and US, and we expect to grow this team significantly in the
coming year.
Strategic focus
Only a panel in which millions of individuals are engaged
over a long period of time can produce genuinely
connected, high-value, structured data.
FYP1 saw us significantly driving up margins in our Custom
Research division by focussing on the more profitable areas
of custom research and aligning it with our syndicated
data solutions and technology. This engineered approach
has transformed our research services. The next stage of
this transformation is integration and adaptation to custom
needs. By allowing our model to be adapted to the specific
needs of individual organisations, we create new connected
data propositions that not only provide new revenue
opportunities, but also further extend the utility of YouGov
data subscriptions particularly for clients whose precise
needs are not met through more traditional syndicated
data sets.
Integration also means connecting the uses of our data,
allowing custom research to be engineered on a framework
of our syndicated data, gaining value from it in ways that
cannot be matched by traditional tracking designs. In the
past few years we have seen strong growth in our custom
tracking offer, both in revenue and margin, and we intend
to bring our syndicated data and custom offerings into ever
closer alignment.
Progress so far
Further investment in technology is creating additional value:
We are investing in our websites, mobile apps, interfaces
and dashboards to make it easier for clients and the public
to interact with and deploy our data, with a first version of the
“YouGov Screen” platform on track to be released by the end
of the calendar year.
We continue with the development of Crunch, our
proprietary data storage and analytics system, which allows
clients to explore data with point-and-click ease and in the
future will allow us to bring different kinds of data together to
be analysed in 3D (i.e. as time series).
One important addition to the types of data we can connect
is tracking data from social media-listening, led by our
acquisition of Portent.io (now YouGov Signal).
New ways of reaching the public include our acquisition of
Inconvo, the chat-bot system that engages audiences and
creates data in message channels.
YouGov Collaborate, our “aided self-service” tool for the
creation of research projects, is now being used by clients in
the US, UK, Germany, Spain and Italy. Further development
of this tool (including integration with YouGov Direct) will
expand the range of options for clients, and indeed the
range of clients that can access our data and tools.
10 YouGov Annual Report and Accounts 2019
Strategic report Our new popularity
and awareness
metric
YouGov Ratings, launched just under a year
ago, is our popularity and awareness metric
for thousands of topics including celebrities,
politicians, sports teams, music acts and brands.
YouGov Ratings measures the popularity
and fame of anything and everything, based
on millions of responses from nationally
representative samples of the British and
US public.
Ratings is robust, searchable, and publicly
accessible data. It is available for free on the
YouGov website and it has been designed
as a showcase for the quality and breadth
of our data, to put YouGov at the heart of
everyday conversations.
%
3
Public Value
Strategic focus
YouGov creates more data specifically for public value than
any other research company. We plan to further enhance our
public offering in two ways: first, we are adding more trackers
and daily polling, not only in politics but across a broad
range of social and cultural trends; second, we are creating
better tools for the public to be able to access and explore
that data.
Our first significant initiative in this area is YouGov Ratings,
launched on our US and UK websites in 2018. Ratings is
our new popularity and awareness metric for thousands
of entities – including celebrities, politicians, sports teams,
music acts and brands – available for free on our website.
Ratings forms part of our Public Value strategy to build a
destination site that offers a wide and deep body of data
that people can interact with (i.e. add data, as well as explore
and use data) and gives the public the ability to help shape
the agenda.
We believe this approach generates important social value,
and serves to further increase public engagement in our
work. This approach also helps to recruit and maintain
panellists, as it creates additional channels and modes for
being a panellist, which is critical as we continue to expand
the size, complexity and reach of our data sets. Finally, and
very importantly, this approach also showcases much of our
commercial data to customers at a top-line level, driving
traffic to our website and acting as an entry point for digital
sales of our commercial offer.
Progress so far
The interactive YouGov Ratings site has increased visibility
for YouGov data. Curated Ratings data in Google Search
has driven many more site visits. For example, in the US,
the launch of Ratings increased the volume of organic
search visitors from Google to YouGov tenfold in the space
of six months. This is largely due to our publication of
search-engine friendly data, which has led to YouGov data
increasingly appearing as snippets within Google Search
results, in areas as diverse as luxury brands, the popularity
of celebrities and political topics.
We have been working on creating a new, more accessible
and interactive data archive which will be launched in the
new calendar year.
A new daily “open survey” on our YouGov Daily mobile app
and website facilitates quick-response polls, which have
started to have a positive impact on our media presence in
the UK. This will be expanded to our other key markets over
the next year.
11
Strategic report Our business model
YouGov offers a systematic approach
to research and marketing.
Our value chain is a virtuous circle
consisting of a highly engaged online
panel, innovative data collection
methods, powerful analytics
technologies, sophisticated research
methodologies, delivery of high-
margin syndicated data products
and services, expert insights and
an authoritative media presence.
Our core offering of opinion data is derived from our highly
participative panel who provide us with live, continuous streams
of data. We capture these streams of data via our variety of data
collection platforms and collect them together in the YouGov
Cube, our unique connected data library.
We maximise the value of all this connected data through
the application of leading-edge analytics and research
methodologies, delivering to our clients the data and insights to
enable intelligent decision-making and informed conversations.
Supporting the YouGov system is our strategy, which is defined
by the mantra:
“YouGov. Best panel – Best data – Best tools.”
Investment We invest in six key areas which together form
a virtuous circle of value creation:
• Panel recruitment and engagement
• Client and partner relationships
• Technology
• Talent
• Data innovations and governance
• Brand reputation
Value
created
Our business model provides value to our
wide stakeholder base:
• Clients: Research and data that fulfils
• Community: Data as a
business needs
public resource
• Shareholders: Track record of share
• Suppliers and Partners: Ties to our
price growth
strong reputation
• Panellists: Rewards for participation
• Media: Topical data and research
• Employees: Attractive employer
value proposition
Value creation is supported by our Value Drivers (above)
and Company Values (page 8).
12 YouGov Annual Report and Accounts 2019
Strategic report Our value drivers
Strategy
Reputation
• Robust panellist acquisition and retention strategy
• Recognised as a credible brand attracting customers,
• Commercial proposition focussed on syndicated data,
partners and panellists
data analytics and subscriptions
• Credibility driving media engagement, which in turn
Panel
• Proprietary global panel of over 8 million members
• Long-term panellist engagement providing highly
boosts reputation
Culture
• Founder-led business retaining a culture of innovation
permissioned longitudinal data
• Culture of accuracy, transparency and an ethical approach
Data
Reach
• Proprietary panel providing high-quality single-source data
• Focus on organic geographic growth and integrative
• Unique data infrastructure providing vast connected
bolt-on acquisitions
longitudinal data
Tools
• Leading-edge tools for analysis and delivery
• Strategy of targeted investments in technology
• Capabilities across over 40 national markets
st panel
e
B
Highly
engaged
panel
Respected
media
presence
Innovative
data
collection
B
e
s
t
d
a
t
a
Expert
research
workforce
Integrated
data products
and research
services
Partnerships
with clients
Best to o l s
13
Strategic report
Our media presence
YouGov data is regularly referenced by the world’s press.
BBC
Metro UK
The Star Malaysia
Is it the end of the
9 to 5 working day?
Traditional workplace hours of 9am
to 5pm are now only the norm for
a minority of workers, research
suggests. Just 6% of people in the
UK now work such hours, a YouGov
survey found. Almost half of people
worked flexibly with arrangements
such as job sharing or compressed
hours, allowing them to juggle
other commitments, it found.
Polling firm YouGov surveyed over
4,000 adults for the survey, which
was commissioned by fast-food
chain McDonald’s.
New laws soon
to better protect
tenants, landlords
In a recent exclusive, The Star
reported that in a survey of
one in five Malaysians or 21% of
1,204 Malaysians, aged 18 and
above, respondents had claimed
to have experienced discrimination
based on their ethnicity when
seeking a place to rent. The findings
were based on a survey carried out
by YouGov Omnibus.
We can’t get through
a meal without
checking our phones,
study reveals
The majority of Britons seemingly
can’t not make it through dinner at
home without checking their phone,
new research from YouGov claims.
According to the report, 55% of
those surveyed said they checked
their phone during dinner, while
53% said they look at their phone
even when dining out with friends
or family. More than half (54%) said
they could not go more than two
days without their device before
it bothered them.
Aug
21
2018
Oct
4
Oct
18
Jan
11
Jan
29
2019
Mar
12
Dagens Mesia
BBC
The Independent
Netflix nu mer
populärt än SVT Play
bland barnfamiljer
Nyligen visade en undersökning
från Yougov att Netflix är det
populäraste varumärket bland unga
i åldrarna 18-34 år.
YouGov survey:
British sarcasm
‘lost on Americans’
According to one of the UK’s most
respected polling companies,
there’s one chasm the English
language can’t always bridge – the
British love of passive-aggressive
statements. YouGov based its
survey on a popular meme of
British phrases and their subtext.
The starkest difference was in the
phrase “with the greatest respect”
– which most Britons took to mean
“I think you are an idiot”, but nearly
half of Americans interpreted as
“I am listening to you”.
Italian food is the
most popular cuisine
in the world
An international YouGov study
asked more than 25,000 people
across 24 countries which of 34
national cuisines they had tried
and whether they liked or disliked
them. The figures revealed that
pizza and pasta were among
some of the most popular dishes
in the world, with Italian cuisine
receiving an average popularity
score of 84 per cent across all the
countries surveyed.
14 YouGov Annual Report and Accounts 2019
Strategic report Khaleej Times
The Guardian
Livemint
78% people in UAE
willing to help after
Good Samaritan Law
is introduced
A YouGov survey – done earlier in
March among 1,011 respondents
in the UAE – showed that more
than three quarters (78 per cent)
of people are willing to help people
caught in medical emergencies
once the Good Samaritan Law is
enforced in the country.
There is no mass
public revolt against
globalisation
The YouGov-Cambridge Globalism
Project – the largest survey of its
kind on populism and the public
state of globalisation – portrays a
broadly moderate critique of the
liberal international consensus,
rather than mass public revolt
against it. Attitudes to immigration
are a case in point. The issue is
clearly one of prominent concern
in many countries, with substantial
numbers saying the costs outweigh
the benefits for their country,
ranging from 31% in the US to 37%
in the UK, 40% in Germany and 50%
in Italy.
Indians would
rather watch content
with subtitles than
dubbed versions
YouGov India looked at viewers
consuming content in foreign and
regional languages and concluded
that 72% watching such content
prefer subtitles while 24% prefer
it dubbed. Viewers in South India
(82%) are big consumers of subtitled
content among all the regions while
those in North and East India are
twice more likely than the South
to prefer dubbed versions.
YouGov is the most
quoted market
research source
in the UK
YouGov is the 2nd
most quoted market
research source
in Italy
YouGov is the 3rd
most quoted market
research source in
Singapore
Apr
1
Apr
18
May
2
Jun
9
Jul
5
Jul
19
Le HuffPost
The Telegraph
Evening Standard
Rares sont les
Français à fêter
Pâques le lundi
Les Français qui célèbrent
Pâques semblent plutôt attachés
à la tradition et partent à la
chasse aux œufs le dimanche
plutôt que le lundi. Selon un
sondage réalisé par l’institut
YouGov pour Le HuffPost, 54%
des Français fêtent Pâques ce
dimanche 21 avril.
Cocaine use should
disqualify you from
becoming an MP,
majority of the
public believe
The YouGov poll of 1,677
people shows 56 per cent of
the population believe it is not
acceptable for someone who
has ever taken cocaine to be a
Member of Parliament. The poll
shows two-thirds of Conservative
voters (67 per cent) believe it is
unacceptable for someone who
has taken cocaine to be an MP,
compared with 48 per cent of
Labour voters and 53 per cent
of LibDems.
Michelle Obama and
Bill Gates top YouGov
list of most admired
people in the world
The YouGov poll, which interviewed
upwards of 42,000 in 41 different
countries, released a worldwide
ranking which comprises
politicians including the Obamas
and the Trumps, entertainers,
sports professionals and royalty.
Although Angelina Jolie may have
topped the list of most admired
previously, former First Lady Michelle
Obama took the top spot. The list
of most admired men resembled
previous years, with Microsoft founder
Bill Gates retaining his place at the top
of the list.
15
Strategic report Our products and services
We are working towards integrating
the entire YouGov offer into a single
system, accessible on one universal
platform.
Through the continued development of innovative data solutions,
and expansion of our technology infrastructure, we are improving
the interoperability and connectedness of all of our products and
services. We are working to simplify YouGov, even as we enrich
both the data and the tools.
Together, our proprietary decision-making product tools, services
and resources provide a system that supports key players in the
advertising and marketing eco-system – including brand owners,
media agencies, advertising agencies, public relations firms and
media owners – to manage their entire marketing workflow.
YouGov’s commercialised products and services fall into three
divisions, as set out in the following pages:
Data Products – see pages 18 to 23
Data Services – see pages 24 and 25
Custom Research – see pages 26 and 27
All of our products and services are underpinned by our unique
data and technology infrastructure, as set out on pages 28 to 31.
In keeping with YouGov’s strategy and culture, we are always
innovating with new data solutions. This year we:
• Began trials of our ground-breaking blockchain platform,
YouGov Direct (see page 31)
• Launched YouGov Ratings, designed to boost YouGov’s online
presence (see page 11)
• Acquired Inconvo, the chat-bot engagement tool for engaging
hard-to-reach audiences (see page 29)
Evaluate
Evaluate why
consumers are
responding as
they are and apply
campaign learnings
to future tactical
marketing decisions
Measure
Measure the impact
of a campaign and
understand how it
resonates with the
target audience
Identify
Identify consumer segments
that represent opportunities
for growth
The YouGov
system
Profile
Profile those
segments to help
create content and
messaging that
will resonate
Target
Target those
segments and
reach them
using our digital
advertising
partnerships
for activation
Track
Track the performance of
a campaign once it has
launched and see its impact
on key brand metrics
16 YouGov Annual Report and Accounts 2019
Strategic report CASE STUDY
Leveraging YouGov BrandIndex
and YouGov Signal to identify
campaign successes
i
S
t
r
a
t
e
g
c
r
e
p
o
r
t
The challenge
Remaining relevant with consumer audiences is a challenge for
brands in the retail banking landscape. Bank of America has been
a long-standing subscriber of YouGov BrandIndex (described
on page 21), taking advantage of the longitudinal brand health
tracking the tool provides. YouGov wanted to demonstrate to
Bank of America how our new YouGov Signal data product
(described on page 23) can expand upon YouGov BrandIndex
by diving into a brand’s social media sentiment.
Our approach
YouGov BrandIndex measures 1,750 brands in the US across
16 metrics including Brand Awareness, Advertising Awareness,
Word of Mouth Exposure, Attention, Purchase Consideration,
Purchase Intent, Value, Customer Satisfaction, Corporate
Reputation, General Impression, Recommendation, Customer
Status, Quality, Buzz and Index.
YouGov Signal complements BrandIndex by aggregating the full
range of digital and social data across all social media, search
and news platforms monitoring 40+ metrics. When there is a
“spike” in social media sentiment, YouGov Signal is able to identify
the “why?”.
In order to gauge campaign effectiveness for Bank of America,
we looked at BrandIndex Buzz and Index scores over the
12 month period to February 2019. Buzz is calculated by
subtracting the percent who heard something negative about a
brand from the percent who heard something positive.
Index is the average of Impression, Quality, Value,
Recommend, Reputation and Satisfaction.
While YouGov BrandIndex identifies key moments in time,
YouGov Signal identifies the conversation being had during
that time. Through YouGov Signal’s sentiment and conversation
analysis, we are able to capture real-time emotional responses.
The outcome
We found that there was a peak in Buzz for Bank of America
in mid-February 2019, accompanying a year-to-date high in
Index level.
YouGov Signal validated the Index peak seen in BrandIndex,
showing comparative social peaks relevant to Black History
Month. Increased positive online chatter for Bank of America
around race could be attributed to Bank of America’s online
social media posts related to Black History Month.
As a result, Bank of America saw sustained positive sentiment
and widened its lead over competitors, Wells Fargo and Capital
One, as demonstrated by YouGov BrandIndex.
By delving into the data delivered by YouGov BrandIndex and
YouGov Signal, we were able to successfully demonstrate for
Bank of America how they could effectively measure social
campaigns and capture real time responses from audiences.
Bank of America Social Peaks
YouGov BrandIndex Buzz Score
Bank of America: Buzz/Index Score
Buzz
Index
7
6
5
4
3
2
1
0
-1
-2
-3
Instagram Likes
1.6k
1.4k
1.2k
1.0k
800
600
400
200
0
Facebook Video Comments
900
800
700
600
500
400
300
200
100
0
"We’re proud to
support our
partners at the
National Museum
of African American
History and
Culture,
@NMAAHC, who
have the #PowerTo
inspire the next
generation of
history makers
during #BlackHis-
toryMonth."
Positive sentiment 54%
Neutral sentiment 46%
Negative sentiment 0%
7
5
3
1
-1
-3
Year-to-date highs
01/02/2018
01/05/2018
01/08/2018
01/11/2018
01/02/2019
Buzz = Sum of % heard something positive minus % heard something negative
Index = Average of Impression, Quality, Value, Recommend, Reputation and Satisfaction
Competitors: Positive Sentiment Score
Bank of America
Wells Fargo
Capital One
100%
80%
60%
40%
20%
0%
01/02/2018
01/05/2018
01/08/2018
01/11/2018
01/02/2019
01/02/2019
01/04/2019
01/03/2019
17
Our products and services continued
Data Products
YouGov’s Data Products division is comprised
of our syndicated data products, which are
available to clients on a subscription basis.
18 YouGov Annual Report and Accounts 2019
Strategic report Our solution to help
marketers plan
and execute their
campaign strategy
and track its success
Available in
40
markets
Interoperability between YouGov BrandIndex and YouGov Profiles
allowed us to develop the YouGov Plan & Track solution, which
combines the benefits of both products. Plan & Track offers
audience identification and analysis, media targeting, campaign
effectiveness and brand health monitoring, all under the
one proposition.
Using Plan & Track, our clients can understand and target key
consumer segments, create content that will resonate with that
audience, effectively target that audience in the media, track
the effectiveness of advertising, marketing and public relations
strategies and campaigns, and measure how advertising and
marketing investments are impacting consumer perception of
their brand. The breath of the solution facilitates collaboration
among brands, media owners and agencies to help bring
transparency and clarity to what can be a challenging marketing
and media landscape.
With YouGov Profiles, Plan & Track taps into the YouGov Cube –
our data vault of over 300,000 variables on consumers including
brand usage and perception, interests, media consumption
and social media activity – to provide a detailed portrait of
consumer segments.
With YouGov BrandIndex, Plan & Track subscribers get access
to continuous monitoring of brand fundamentals including
brand awareness, advertising awareness, word of mouth, brand
health, consideration, purchase intent, and customer satisfaction.
Whether planning a campaign, mitigating an issue, or developing
new products, the data available through under Plan & Track
provides a leading edge.
Plan
Track
Our ground breaking connected data set for audience profiling and
segmentation, YouGov Profiles, enables clients to identify and analyse
their target audiences across multi-channel data sets from a single source.
Our flagship brand intelligence service,
YouGov BrandIndex, informs clients what the
world thinks of their brands and competitors
at any given moment.
Identify
Describe
Target
Identify who
the right
audience is
Describe
them with
depth and
breadth
Understand
when and
where to
meet them
Measure
Track key
measures
over time
Evaluate
Evaluate
campaign
success
With YouGov’s connected data set, a single audience view can be used throughout the marketing workflow
Single Audience View
19
Strategic report Our products and services continued
Our media planning
and audience
segmentation tool
We chose to work with YouGov
as they were able to provide both
quality and quantity when it came to
a high-net-worth sample. The added
bonus of being able to access our
sample via YouGov Profiles was really
useful for expanding on the minutiae
of audience behaviour to deliver
deeper insights.”
Ubiquitous
YouGov Profiles is our ground breaking tool for audience profiling,
segmentation and media planning. The product allows users
to profile their target audience across multi-channel datasets
from a single source, with greater granularity and accuracy than
ever before.
Profiles offers the largest, most detailed and real-time consumer
database updated weekly. Leveraging the YouGov Cube, Profiles
connects data on demographics and lifestyle, brand, sector, and
media, digital and social data all in one place, combining that with
attitudes, interests, views and likes. The tool holds over 300,000
separate data variables collected from YouGov panellists in a
given country.
Profiles improves the ability of marketers to understand the
people and audiences that matter to them, while enabling
media owners to identify potential advertisers and make more
informed content and scheduling decisions so as to deliver the
target audience that advertisers require. Additionally, Profiles
can support programmatic advertising processes and this use
is proving increasingly popular with digital media agency clients.
Profiles is offered to the market as a subscription service with
clients accessing the data through a dedicated online portal.
The Profiles portal, hosted on Crunch, gives users access to
a wide range of detailed and connected data and provides
methods with which to interrogate and interpret the data.
We will soon be introducing YouGov Global Variables to provide
subscribers with some of the most popular variables, collected
from a distinct subset of panellists, packaged in a globally
consistent format. With Global Variables, clients will have access
to global samples of popular variables and be able to run analysis
such as segmentations with global coverage.
Identify
Describe
Target
Identify who
the right
audience is
Describe
them with
depth and
breadth
Understand
when and
where to
meet them
Over
300,000
separate data
variables
Available in
19
markets
Our add-on solutions for data products subscribers
The linkage of BrandIndex and Profiles has enabled us to offer
clients new ways to get more value out of their data product
subscriptions. We have packaged a number of the use cases
that go “beyond the login” of our data products to create the
YouGov Data Applications series. Some Data Applications are
available as self-serve modules that can be accessed inclusive
of the subscription price, while others are sold in addition to
subscriptions. With YouGov Data Applications, we are showcasing
the strategic application of our syndicated data products and
connected data solutions for solving our clients’ most important
business challenges. Our current Data Applications:
20 YouGov Annual Report and Accounts 2019
• YouGov Audience Data Reach target audience by creating
seed audiences from which to activate the programmatic buy
with industry Data Management Platforms and Data Houses.
• YouGov Dynamic Segmentation Segment audiences and
plan campaigns effectively with a constantly refreshed portrait
of target demographics.
• YouGov Re-Contact Self-service deep dives for data product
subscribers (described on page 25).
Strategic report Our daily brand
perception tracker
YouGov’s flagship brand intelligence service, YouGov BrandIndex,
continuously measures public perception of thousands of
brands across dozens of sectors. It enables users to track the
fundamentals of a brand’s health every single day; rapidly check
campaign effectiveness; and react quickly to brand events or
crises. Tracking brands for over a decade, it gives users both a
historical and instant view of a brand and campaign performance
against competitors.
BrandIndex data is updated daily (or bi-weekly or weekly in some
developing markets) and includes up to 12 years of historical data
which is all available 24/7 to our clients through our user-friendly
BrandIndex portal. YouGov’s BrandIndex serves major accounts
among both advertising and media planning agencies on the one
hand, and brand owners and advertisers on the other. It is offered
to the market as a subscription service with clients accessing the
data through a dedicated online portal.
YouGov BrandIndex allows users to continuously monitor
campaign performance across 16 different brand health, media,
and purchase funnel metrics, in single or multiple markets,
simultaneously. It is available in 40 markets and every day
we survey over 20,000 consumers, conducting more than
7 million BrandIndex interviews every year against YouGov’s
proprietary panel.
Measure
Track key
measures
over time
Evaluate
Evaluate
campaign
success
YouGov BrandIndex BestBrand
YouGov releases six BrandIndex BestBrand Rankings
each year. As well as the two flagship rankings –
Brand Buzz Rankings (in January) and Brand Health
Rankings (in August) – throughout the rest of the year
we also issue rankings covering brand advocacy
and best employers as well as the preferred brands
among women and Gen Z. For every set of rankings,
the top 10 overall brands receive a personalised
notification and BestBrand badge to use in
their advertising.
YouGov’s Plan & Track solution is the
first subscription that our Consumer
& Market Insights team renewed
last year. We use the data every day
across our business to make key
decisions and stay one step ahead of
the competition.”
T-Mobile USA
Over
15,500
brands
indexed
Available
across
40
markets
Over
20,000
consumers
surveyed
daily
Our new data product for the sports sector
In the prior reporting year, we expanded our Sports sector
expertise with the acquisition of SMG Insight, the global sports
research agency. The acquisition has provided YouGov with
the opportunity to extend our syndicated data products for the
sports industry by applying sector expertise to YouGov’s existing
data products infrastructure. Now re-branded as YouGov Sport,
the offering includes sports-sector custom research, as well
as YouGov SportsIndex, is the ultimate “always on” measure of
quality, performance and market potential for the most relevant
sports leagues and events around the world.
• 16 BrandIndex-style metrics to track public perception
• Over 200 sports leagues and events tracked
• Fan profiling for more than 2,000 teams across 30 sports
• Available in 38 markets
21
Strategic report Our products and services continued
CASE STUDY
Using YouGov Plan & Track
to evaluate Peloton’s challenger
brand success
The challenge
The at-home studio cycling industry is now a multi-billion
dollar industry, with a handful of brands leading the sector.
One of those brands is Peloton, which offers an indoor
stationary bicycle that brings a studio cycling experience
into the user’s home. The user can choose a class out of
hundreds of options including class type, musical genre,
length and instructor.
In 2019, Peloton approached YouGov to help evaluate
the effectiveness of their “His & Her”’ 2018 US holiday
advertising campaign.
Our approach
By utilising our YouGov Plan & Track proposition, Peloton was
able to evaluate ad awareness, brand buzz and purchase
consideration in comparison to its key competitors, SoulCycle
and Flywheel.
By looking at three variables in particular – demographics,
tendency towards owning a gym membership, and statements
that consumers agree with in regards to health and wellbeing
– YouGov Plan & Track identified and profiled the consumers
who were considering a purchase of Peloton, SoulCycle
or Flywheel.
A target audience for Peloton was built from the demographic
of consumers who were considering a purchase of, or
subscription to, Peloton or the two competitors. This was
determined by evaluating which television networks were
watched by the consumer, the apps being used by the
consumer and the statements that the consumers agreed
with. The statements that were agreed with had the requirement
of including both: “Advertising helps me choose what I buy”
and “While watching TV, I search the internet for products
I see advertised.”
The Peleton target audience was then tracked and scored
over the campaign and post-campaign periods to to evaluate
key campaign objectives, including ad awareness, brand buzz
and purchase consideration for each of the three brands.
The outcome
The YouGov Plan & Track evaluation was able to highlight to
Peloton the effectiveness of their campaign by illustrating the
key metrics in comparison to their competitors.
The data showed that Peloton’s “His & Her” campaign scored
higher than competitor campaigns and drove positive brand
perception throughout the holiday purchasing season, engaging
consumers during a peak competitive marketing period.
By evaluating sentiments and “agree with” statements of the
target audience, Peloton was able to understand what types
of advertising features and sentiments may score highly with
their target audience, giving them an edge for future campaign
planning and tracking.
Competitors: Ad Awareness Score
Peloton
SoulCycle
Flywheel
"His & Hers"
holiday ad
released
22
18
14
10
2
-2
1/10/2018
6/11/2018
31/1/2019
“Considering Peloton” consumer profile
Demographics
Age
45-54
Race
White
Political view
Democrat
Family income
$150,000–$199,999
Gym membership
I want to get more toned
I have access to machines/amenities
I don’t at home
I want to stay/get healthy
22 YouGov Annual Report and Accounts 2019
Agree with
I excercise at least once a week
Working out to stay fit is important to me
It is important for me to be physically
active in my spare time
I am willing to pay more for luxury brands
I tend to choose premium products
or services
Strategic report Our analytics tool for
digital and social insights
Example YouGov Signal data:
Sentiment
Negative
Neutral
Positive
17%
36%
47%
Emotion
Joy
Anger/Disgust
Anticipation
Sadness
Surprise
0.9%
3.1%
18%
12%
36%
66%
40+
digital and social
data feeds
Dynamic metrics applied
across Facebook, Twitter,
Instagram, YouTube, RED, IMDB,
Product Reviews, Search, News
and many more
39
countries
We collect data across
39 different geographies
6,500+
tracked entities
Brands, products, people,
TV shows, movies, topics –
and adding more every day
at no additional cost
During the year, YouGov fully acquired the entertainment industry
analytics company Portent.io, which has developed technology
for linking survey data with digital touchpoints to provide a fully
rounded view of what consumers think about films and television
programmes. Now re-branded as YouGov Signal, its technology
has been extended beyond entertainment to further sectors.
YouGov Signal is an analytics tool for tracking the digital
expression of opinions. The tool’s breadth spans a variety of
sectors, providing online data on thousands of brands, products,
sports teams, games, actors, films, television shows and more.
Simply tracking digital and social data sources is not enough
to discover meaningful insights into the opinions expressed
by people online. YouGov Signal aggregates digital and social
data, applying complex machine learning, text analysis, and
competitive benchmarking, to make sense of and contextualise
online sentiment and conversation, providing clients with
quantitative metrics.
YouGov Signal is able to identify the key emotions, drivers and
responses used for a brand, sector or custom group of entities.
Using custom topic analysis and keyword Natural Language
Processing (“NLP”), topics and conversational sentiment are
extracted from each online post, comment, retweet, news post
or mention. Our supervised NLP is trained using labelled data by
real people and a minimum of 5,000 manual tags are made per
adjective, emotion or keyword.
YouGov Signal clients are able to deep dive into a particular topic
or category to see related conversations and posts. The tool also
allows users to compare sentiment and topics used throughout
an entire sector, making benchmarking easy. Data can be tracked
and sorted by business category, keywords, or sector, compared
across pre-populated sector lists and sub-categories, and
tracked by key marketing beats.
Unlike other social intelligence tools, YouGov Signal is able to
leverage YouGov’s full data products infrastructure data to enrich
insights – an example being the Bank of America case study on
page 17.
YouGov Signal is one of the most
useful tools to understand and portray
the performance of TV programs
pre and post airing throughout key
territories. The platform helps me
on a daily basis, and it is an immense
pleasure to work with a very attentive,
responsive and transparent team.”
CBS Studios International
23
Strategic report Our products and services continued
Data Services
YouGov’s Data Services division provides
clients with fast-turnaround services.
24 YouGov Annual Report and Accounts 2019
Strategic report Our fast-turnaround
service delivering
next-day answers
The YouGov Omnibus survey really
helped us to understand and quantify
how effective our campaign was.
To get a live read on how our target
audience was reacting and being
able to measure how their perceptions
of the brand were changing as a
result was not only very satisfying
but was also crucial for case studies
and paper writing.”
mcgarrybowen
YouGov’s very first service, YouGov Omnibus, is the market-
leading online omnibus service in the UK and a high performer
in our other territories.
YouGov Omnibus is the perfect vehicle to find out people’s
opinions, attitudes and behaviours – quickly and cost-effectively.
Our Omnibus surveys are run daily in most territories, providing
nationally representative responses to clients within a short
timeframe (most countries utilise a 48-hour turnaround, with
24-hour turnaround available in the UK and US). The service
can provide clients with data from over 50 countries and
client demand for multi-country Omnibus surveys continues
to increase. In the last year, we expanded YouGov Omnibus
into Canada.
The size and diversity of the YouGov panel has also enabled
us to extend our Omnibus services to include a number of
selected target samples. Omnibus segmental services include
International, Children and Parents, B2B, Independent Financial
Advisors, Cities and LGBT. We also run regular Omnibus surveys
covering influential audiences in the UK, including C-Suite
Executive Directors and Members of Parliament. Additionally, we
have an Omnibus service that can reach 200 key opinion formers
working in and around the EU institutions through our Brussels
EU Elite Omnibus.
In 2019, we rebranded YouGov Omnibus to YouGov RealTime in
the UK and US.
Servicing
40
markets
Over
5 million
Omnibus surveys
every year
Our deep dive service for
data product subscribers
Our YouGov Re-Contact service works in conjunction with our
subscription data products. The service provides subscribers
with the opportunity undertake one or multiple fast-turnaround
Omnibus surveys to augment their syndicated data. Through
Re-Contact surveys, clients can obtain additional data tailored
to their needs from segments of the panel with specific profile
characteristics, selected using Profiles. Now, through Collaborate,
our self-service tool for survey design, syndicated data product
subscribers are able to self-service Re-Contact studies.
Additionally, the Re-Contact surveys designed in Collaborate
are sent to the Omnibus team for pre-launch quality control and
approval to field, in order to ensure submissions are line with
research good practice. A linkage to the Cube ensures that the
questions prepared through Collaborate tie back to our data
library and users benefit from the complete YouGov system.
25
Strategic report Our products and services continued
Custom Research
YouGov’s Custom Research division offers
quantitative and qualitative research
services delivered by sector specialists.
26 YouGov Annual Report and Accounts 2019
Strategic report Our quantitative and
qualitative custom
research service
YouGov’s Custom Research business conducts a wide range
of research, tailored by our specialist teams to meet each client’s
specific requirements.
The offer includes reputation studies, syndicated studies
covering sector or product trends, and a full research
programme providing a range of research, often on annual
contracts, including tracking studies, qualitative research and
customer profiling.
Using their in-depth sector knowledge, our custom research
specialists employ both quantitative and qualitative methods to
identify and analyse markets, clarify opportunities and challenges
and generate data that provides clients with actionable
information. Our specialists have vast experience in the key
areas of market research including UX, audience understanding,
testing concepts, platforms, eco-systems, new product design,
paid for environments, effectiveness of communications, and
brand partnerships.
Custom Research projects vary significantly in scope, scale
and complexity and can range from large-scale national and
multinational tracking studies to one-off surveys designed to
address and explore specific commercial, social or political
issues for the client.
Over the last few years, our Custom Research services have
been strategically re-positioned to better align with our
syndicated data products and services, with a greater focus
on multi-year contracts and the delivery of projects through
our data analytics tool, Crunch. The YouGov model allows us
to minimise the proactive data collection required for each new
custom project while at the same time provide our clients with
more connected and tailored data than ever before. With every
research project we undertake drawing on – as well as building
on – the data that we hold in our data library, the Cube, we are
redefining the very nature of custom research.
Our sector specialisms include:
• Consumer
• Corporate Reputation & Business
• Financial Services
• Digital Media & Technology
• Financial Services
• Sports
• Political & Public Sector
YouGov’s custom
research trackers offer
dynamic and integrated
performance monitoring
Whether a client is looking to track their brand perception,
campaign effectiveness or customer satisfaction vs competitors,
our custom research experts can design a comprehensive
tracking study that will deliver the data they need to stay one
step ahead.
Campaign Effectiveness Tracking
Brand Health and Reputation Tracking
Customer Satisfaction Tracking
27
Strategic report Our products and services continued
Our data
As the pioneer of online market research,
innovation is core to YouGov’s culture and we
are constantly looking for ways to improve our
data collection and analysis capabilities.
28 YouGov Annual Report and Accounts 2019
Strategic report Our connected
data library
Our vast, continuous, single-source data collection, derived from
the YouGov panel of over 8 million people worldwide is stored in
the YouGov Cube. We developed the Cube, our structured and
codified multi-dimensional data library, in order to store, connect
and easily access these hugely rich datasets. Our proprietary
panel provides us with live streams of data 24/7 from a variety of
data collection platforms and devices. The Cube encompasses
over a decade of data and holds over 300,000 variables on
consumers – including demographics and lifestyle, brand, sector,
and media, digital and social data – which are constantly being
updated. The Cube’s unique structure allows us to undertake fast,
large-scale analysis of that data.
Bursting with conversation During the year, YouGov acquired InConversation Media that
has developed the online engagement platform, Inconvo.
Combining chatbot technology with editorial flare, Inconvo’s
platform engages users to share their views about the things
they are most passionate about – from sport and music, to
television and film. Running on Facebook Messenger – and soon
its own proprietary platform – Inconvo’s pioneering approach to
content creation and audience engagement is growing YouGov’s
globally engaged audiences. During the last 12 months, more
than 2 million people have interacted with Inconvo and 80% of
those were under 35 years old – a demographic group typically
regarded as difficult to reach by the research industry.
Our pioneering application
of advanced statistical
methodology to market
research
MRP (Multilevel Regression and Post-stratification) is a statistical
method for combining survey and census data. Traditional survey
methodologies provide a snapshot of national opinion, while
MRP can provide detailed subnational estimates of rapidly
changing attitudes. YouGov demonstrated to great success the
value of MRP methods in recent national elections. For example,
in the 2017 UK General Election our MRP model predicted a
hung parliament when nearly everyone else – campaigners,
commentators, markets, bookies, academics and other pollsters
– were confident of an overwhelming Conservative victory. In the
2018 US midterm elections, our MRP model average district-level
error for 435 Congressional races was only four percent, which
was substantially better than the average error for individual polls
with much larger sample sizes.
MRP is ideally suited for YouGov’s large-scale, panel-based
research. We collect detailed information about the attitudes and
behaviour of our panellists over time. MRP is based on the idea
that usually similar individuals in different places and times will
have similar attitudes and behaviour. The method uses modern
machine learning techniques to fit complex models that can
detect local differences and trends in attitude and behaviour.
It does not assume that attitudes are constant, but adapts
appropriately to the volume of data that are available.
YouGov has pioneered the application and extension of MRP
methods around the world. We have collaborated with academic
researchers and supported the development of the open source
Stan software used for computation of MRP models. We are
pursuing novel applications in market research to replace
traditional tracking and segmentation methods. Just as we can
use MRP to estimate how a constituency or congressional district
will vote, we can predict how “microsegments” will respond to
advertising campaigns.
29
Strategic report Our products and services continued
Our tools
All of YouGov’s products and services are
underpinned by our unique research design
and delivery tools, the principal elements
of which are YouGov Crunch, YouGov
Collaborate and our newest innovation,
YouGov Direct.
30 YouGov Annual Report and Accounts 2019
Strategic report Our new self-service tool
for survey design
Our data analytics
and visualisation tool
Our blockchain-based
platform for panellist
permissioning and
effective ad targeting
YouGov Direct is a full-opted in, transparent and fraud-free
audience platform. With granular and accurate profiling data,
YouGov Direct enables precise consumer targeting and turns
advertising into a two-way dialogue. The platform is designed for
three distinct audiences: consumers, advertisers and publishers.
Typically, consumers have little control or visibility as to how
their online data is used by the advertising sector. Additionally,
ineffective targeting of digital advertisements frustrates
consumers and has a negative impact on brands and publishers.
With YouGov Direct, consumers opt-in to the platform, provide
their data, and provide their consent for that data to be used for
ad targeting. In return, consumers receive relevant messages
from advertisers and are rewarded each time their data is used.
The system is transparent, with all consumer interactions logged
using blockchain technology. The system is underpinned by
blockchain to ensure an audit trail of verifiable transactions
between the consumers and advertisers. This transparent and
verifiable record of transactions supports compliance with data
protection legislation, including the EU GDPR.
With Collaborate, we have automated the process of survey
design, making the turnaround from the client’s initial request
to the delivery of results even faster and more user-friendly.
Collaborate users can design their own surveys without any
assistance, or get support at any point in the process from
our researchers using the “collaboration” feature. Our expert
researchers provide support directly through the tool, including
a pre-launch review and approval process to ensure users obtain
the most accurate and actionable results. Linkage to the Cube
ensures that the questions prepared through Collaborate tie
back to our data library and users benefit from the complete
YouGov system. Subscribers to our syndicated data products
can now utilise a self-service feature for Re-Contact studies via
the Collaborate tool.
Crunch is our unique and user-friendly data delivery and analytics
platform. The intuitive tool provides users with a quick and easy
way to prepare, analyse and deliver data. With the highly visual
interface, users can quickly view top-line results, or dig deeper
using drag-and-drop functionality to create tables, charts,
filters and dashboards. Crunch enables users to explore and
interact with their survey results in real-time as it is collected,
allowing them to start piecing the story together or collating
insights straight away. Crunch can also act as a library for user’s
data which can be easily shared across their organisation.
Crunch makes data processing faster, more accurate and gives
users control over data analysis.
While we build scale in the user base, the platform is already
being used by advertisers to make use of:
• Ad Testing: allowing brands to target their audience, gain
insight and drive traffic to a desired digital property – unlike
other ad tests, the results are actual business outcomes;
• CRM Enrichment: consumers are empowered to sell their data
directly to brands, allowing brands to import data into their
CRM systems to better serve their customers; and
• YouGov Now: an exceptionally quick turnaround tool that
delivers key data back to clients within the hour.
Once at scale, YouGov Direct will deliver new types of data
into the advertising ecosystem. It will provide an ethical and
transparent solution from consent to ad delivery that empowers
publishers, media owners, right holders, brands and consumers.
Case Study: YouGov Direct Ad Test
A major entertainment client used the platform to reach an
audience of 6,000 parents with children under 16, on 27 February
2019. YouGov Direct delivered creative video to the audience,
to test the ad and drive business outcomes. The results were:
• 99% Engagement rate – of those who were served the ad,
almost all watched it
• 19% CTR (Click Though Rate) – one in five of those who were
served the ad, clicked on a link to find out more
• 6% Sales conversion rate – of those who clicked through to find
out more, 6% of consumers went on to make a purchase
• Insight Delivered – The above measures allowed us to
understand how effective the ad was and the impact it had.
Additionally, the platform facilitated tailored questions to the
audience to understand their attitudes, opinions and behaviour.
31
Strategic report Chief Executive Officer’s review
for the year ended 31 July 2019
Achievement of five-year plan targets
In 2014, we unveiled our first five-year growth plan (“FYP1”) for
improving profitability. The five-year target (essentially, trebling
profit) forced us to make hard decisions about organisational
strategy and structure and drove us to innovate boldly.
The strategy was to focus on growing our Data Products and
Data Services divisions, which have operational leverage, even
though it meant withdrawing from custom research projects
that, while profitable, did not benefit from the strengths of our
unique connected-data system. Our investment in technology
and products during the last five years has created a platform
for scalable profit generation and has enabled our business to
consistently deliver results ahead of the market2. It is from this
position of strength that we have begun to execute our new
growth strategy.
When we laid out our FYP1 targets, they were considered
stretching and ambitious. Today, we are pleased to announce
that we have exceeded those targets.
We remain no less ambitious in our aspirations for the future.
In the Half-Year Announcement (April 2019) we set out a new
growth plan with even more stretching goals to ensure we
continue at pace to build on the strong business we have worked
hard to create.
We have had another strong year,
growing our revenue by 17%, our
adjusted operating profit1 by 45%,
our adjusted operating margin1 by
2 percentage points, and exceeding our
ambitious five-year targets. Statutory
operating profit increased by 69%.
There were three main drivers to this strong performance:
continued emphasis on scalable data products and services;
alignment of custom research with our key advantages of
panel, methodology and technology; and the success of
our acquisitions.
Our Data Products and Data Services divisions have continued
to grow in number of clients, size of contracts and geographic
spread; our Custom Research division has also grown significantly
with greater emphasis on scalable work such as multi-wave
global trackers. The two acquisitions we made in the prior year
(the Australian research agency, Galaxy Research, and the sports
marketing research agency, SMG Insights, now YouGov Sports)
have integrated well and added many new clients.
The YouGov offer, based on the YouGov Cube (our connected
data library) and Crunch (our data analytics and visualisation
tool), is well aligned with trends in the market towards more
sophisticated data and tools. Further, the increasing emphasis
not only on the quality of connected data but also on the ethics
of personal data has benefitted the YouGov model of a large,
permissioned panel, with relationships based on accountability,
and a transparent, efficient infrastructure.
Five years ago we set
ourselves ambitious
growth targets which
reflected our belief in
the business’ ability to
expand its international
reach, develop best-
in-class products and
dynamically respond
to changing client
needs. I am delighted
that together we have
exceeded those targets.”
32 YouGov Annual Report and Accounts 2019
Strategic report New growth plan and long-term targets
Our new growth plan (“FYP2”), to be delivered within the next four
years to 2023, deploys the same idea that very difficult targets
force us to focus boldly, and to invest in innovation.
Revenue £m
£136.5m
5-Year CAGR 15%
67.4
76.1
88.2
107.0
116.6
The underlying strategy that drives our FYP2 plan is defined
by the mantra: “YouGov. Best panel – Best data – Best tools”.
Our plan builds on the market-leading position we have built
through our GDPR3-compliant proprietary panel; the richness,
relevance and connectedness of the data in the YouGov
Cube; the power of our analytics platform, YouGov Crunch; the
accuracy of our ground breaking methodologies; and the ethical
relationship we have with our panellists, who trust us with deep
and extensive data about them because of our transparency and
our commitment to mutual benefit.
Our ambition is to create a universal platform for the ethical and
safe sharing of opinions and personal data, unleashing its power
for the benefit of both panellists and clients. This ambition is
supported by the three strategic pillars of FYP2: Data Integration,
Ethical Activation, and Public Value (described on pages 10 to 11).
Current trading and outlook
Our pipeline of sales opportunities for our syndicated data
products is strong and we continue to see opportunities for
growth within those forms of custom research that are aligned
with our core connected-data offering. We will keep investing in
our technology platforms to support growth and expansion in line
with our strategic objectives.
Trading since the year-end has continued positively. While Brexit
continues to create uncertainty in the economic and political
environment, especially for UK and European businesses, the
international spread of our revenues, with a significant and
growing US weighting, cushions us from volatility. In the context
of both the macro-environment and our own plans to accelerate
our investment in technology and geographic expansion,
we remain confident in our growth prospects for the year
and beyond.
Stephan Shakespeare
Chief Executive Officer
8 October 2019
2014
2015
2016
2017
2018
2019
Adjusted operating profit1 £m
£18.3m
5-Year CAGR 40%
3.4
3.9
5.4
8.0
12.7
2014
2015
2016
2017
2018
2019
Statutory operating profit £m
£19.8m
5-Year CAGR 82%
1.0 2.9
4.3
7.6
11.8
2014
2015
2016
2017
2018
2019
Adjusted operating profit1 margin %
13%
5-Year CAGR 21%
5
5
6
8
11
2014
2015
2016
2017
2018
2019
Adjusted basic earnings per share1 pence
14.9p
5-Year CAGR 38%
3.0
3.5
4.8
6.2
11.5
2014
2015
2016
2017
2018
2019
Statutory basic earnings per share £m
£14.2m
5-Year CAGR 104%
0.4
3.2
3.3
4.4
7.7
1. Defined in the explanation of Non-IFRS measures on page 38.
2. According to the ESOMAR Global Market Research Report published in September
2019, global research market turnover grew by 2.1% in 2018 (or by -0.3% after
inflationary effects are factored in).
3. The European Union General Data Protection Regulation 2016/679 (“GDPR”).
2014
2015
2016
2017
2018
2019
33
Strategic report Chief Financial Officer’s report
for the year ended 31 July 2019
The Group achieved continued
growth in the 12 months to 31 July
2019 which marks the end of the
first five-year growth plan which
commenced in 2014.
Total Group revenue in the period rose to £136.5m, compared
to £116.6m in the 12 months to 31 July 2018. Growth was 10% on
an underlying1 basis since the prior period (but 17% in reported
terms due to the depreciation of £ Sterling against US Dollar
and additional revenue generated by acquisitions in the period
and prior period).
Included in the performance for the 12 months to 31 July 2019
are the consolidated results of the recent acquisitions:
• Galaxy Research (December 2017)
• SMG Insight (May 2018)
• InConversation Media (August 2018)
• Crunch.io (September 2018)
• Portent.io (November 2018)
The acquisitions support the strategic aims of access to
new technologies, geographic expansion and new panels.
The acquisitions added £9.1m of revenue and reduced operating
profit by £0.3m in the year to 31 July 2019.
Key performance indicators
The Board monitors business performance via six financial key
performance indicators – revenue, adjusted operating profit,
adjusted operating profit margin, adjusted earnings per share,
revenue per head and staff costs as a percentage of revenue –
the results of which are shown on the inside cover.
Adjusted measures
Until now, our presentation of adjusted measures has excluded
amortisation of intangible assets charged to operating expenses
and separately reported items (see page 38 for the full definitions
we currently use). As announced at the Half-Year, in these Full-
Year results and in the future, we are using a revised definition
of adjusted measures that includes amortisation of intangible
assets charged to operating expenses. Our reported adjusted
EBITDA is unaffected by this presentational change to the
adjusted measures.
Adjusted operating margins and
organic growth
In line with our stated strategy, a higher proportion of sales
coming from higher margin products and services increased
gross margins by 1% point. Adjusted operating margins2
increased from 11% to 13%.
Group operating costs (excluding separately reported items)
of £94.0m (2018: £82.4m) increased by 14% in reported terms,
and 12% in constant currency terms. Group adjusted operating
profit2 (before separately reported items) increased to £18.3m
(45% growth in the period) with strong continued growth in Data
Products, coupled with margin improvement in the Custom
Research division. The statutory operating profit (which is after
crediting other separately reported items amounting to £1.5m)
increased to £19.8m (2018: £11.8m).
In this first year of our
next five-year plan
we have made a great
start, delivering strong
growth in earnings.”
Alex McIntosh
Chief Financial Officer
34 YouGov Annual Report and Accounts 2019
Strategic report Overall Data Services revenue growth included a 43% increase
in reported revenue in the US (34% increase in underlying terms1),
and a 27% increase in Asia Pacific due to the Galaxy Research
acquisition (4% decrease in underlying terms1). France and
Germany also grew strongly, by 16% and 24% respectively.
In the UK, where YouGov Omnibus is the market leader,
revenue grew by 14%.
Custom Research
Our Custom Research division includes tailored research projects
and tracking studies.
The performance of the Custom Research service continued
to be impacted by restructuring activities undertaken in the
current and previous financial year. The largest reductions in
revenue were Nordics (100% decline, due to the transfer of the
business to the Data Services division) and the Middle East (23%
decline). In the UK, revenue increased by 13% to £15.2m. The US
was favourably impacted by foreign exchange gains, increasing
revenue by 3% on a reported basis, however revenue declined by
4% on an underlying basis due to a reduction in client spend.
During the period, the business revenue grew by 2% in reported
terms and by 1% in underlying1 terms to £60.0m. However,
the adjusted operating profit2 increased by 10% to £12.9m and
the operating margin improved by two percentage points to
22%. This was largely due to operating costs as a percentage
of sales reducing by 1% as a result of the restructuring of
underperforming areas.
Performance by division
YouGov’s lines of business fall into three divisions: Data Products,
Data Services and Custom Research.
Data Products
Our syndicated data products include YouGov BrandIndex,
YouGov Profiles and YouGov SportsIndex. YouGov Plan & Track
(the combined BrandIndex and Profiles proposition) is available
in 21 countries (2018: 14). BrandIndex alone is available in 40
countries, while SportsIndex is available in 38 countries.
The performance of our Data Products division has contributed
significantly to our Group revenue and adjusted operating profit2.
Revenue from Data Products increased by 36% (25% growth
in underlying business1) in the period. The adjusted operating
profit2 from Data Products increased by 50% to £14.1m and the
operating margin increased by 3% to 34%. The improving margin
partly reflects the growing contribution from Profiles as well as a
reduction in the use of third party data collection.
Geographically, the US remains the largest Data Products market
and grew by 35% in in the period, (20% from the underlying
business1). The UK, France and Asia Pacific also contributed
strong revenue growth of 35%, 30% and 31% respectively.
Data Services
Our Data Services division consists of our fast-turnaround
research services, including our market-leading
YouGov Omnibus.
In the year, revenue from Data Services increased by 28%
(11% in underlying terms after adjusting for acquisitions, foreign
exchange and reallocated revenue from the Custom Research
division) to £37.2m. The focus on the US market and further
territorial expansion has helped the division expand the revenue
base beyond the core UK market. This growth contributed to
an increase of 21% in the Data Services operating profit to £7.4m
and the operating margin declined from 21% to 20% reflecting
lower margin Omnibus business that we transferred from Custom
Research in the Nordics.
Revenue
Data Products
Data Services
Total Data Products & Services
Custom Research
Intra-Group Revenues
Group
Adjusted Operating Profit2
Data Products
Data Services
Total Data Products & Services
Custom Research
Central Costs
Group
Year to
31 July 2019
£m
Year to
31 July 2018
£m
Revenue
growth
%
Underlying
business1
revenue change
%
41.5
37.2
78.7
60.0
(2.2)
136.5
30.4
29.0
59.4
58.7
(1.5)
116.6
36%
28%
32%
2%
44%
17%
25%
11%
18%
1%
–
10%
Year to
31 July 2019
£m
Year to
31 July 2018
£m
Operating
Profit growth
%
Operating margin %
Year to
31 July 2019
Year to
31 July 2018
14.1
7.4
21.5
12.9
(16.1)
18.3
9.4
6.0
15.5
11.7
(14.6)
12.7
50%
21%
39%
10%
11%
45%
34%
20%
27%
22%
–
13%
31%
21%
26%
20%
–
11%
35
Strategic report Chief Financial Officer’s report
for the year ended 31 July 2019 continued
Performance by geography
YouGov’s geographic footprint spans the UK, Americas, Europe, Middle East and Asia Pacific.
Revenue
UK
Americas
Mainland Europe
Middle East
Asia Pacific
Intra-Group Revenues
Group
Adjusted Operating Profit2
UK
Americas
Mainland Europe
Middle East
Asia Pacific
Central Costs
Group
Year to
31 July 2019
£m
Year to
31 July 2018
£m
Revenue
growth
%
Underlying
business1
revenue change
%
41.2
56.4
23.9
10.5
11.3
(6.8)
136.5
31.3
48.2
21.6
12.1
8.7
(5.3)
116.6
32%
17%
11%
(13%)
29%
–
17%
18%
5%
16%
(2%)
8%
–
10%
Year to
31 July 2019
£m
Year to
31 July 2018
£m
Operating
profit growth
%
Operating margin %
Year to
31 July 2019
Year to
31 July 2018
11.8
13.2
2.9
3.3
0.2
(13.1)
18.3
10.2
13.8
1.1
3.0
0.2
(15.6)
12.7
16%
(4%)
164%
8%
2%
(16%)
45%
29%
23%
12%
31%
1%
–
13%
32%
29%
5%
25%
2%
–
11%
During the year ended 31 July 2019, an increased proportion of the central costs were reallocated to the geographic hubs, leading to a
reduction in the reported adjusted operating margins2 compared to the year ended 31 July 2018.
Panel development by geography
We continue to invest in our consumer panel to increase our research capabilities, both in new geographies and specialist panels.
At 31 July 2019, the total number of registered panellists had increased to 8.4 million, compared to 6.6 million at 31 July 2018, as set
out in the table below. During the year, the Group invested in expanding our geographic capability to Poland and Canada.
Region
UK
Americas
Mainland Europe
Middle East
Asia Pacific
Total
Panel size
at 31 July 2019
Panel size
at 31 July 2018
%
Change
1,630,985
3,169,415
1,209,209
1,064,205
1,301,053
8,374,867
1,355,751
2,414,995
952,039
934,696
946,233
6,603,714
20%
31%
27%
14%
37%
27%
Group financial performance
Amortisation of Intangible Assets
In the 12 months to 31 July 2019, amortisation charges for
intangible assets of £8.8m were £1.8m higher than the previous
year. Amortisation of the consumer panel increased by £0.7m
to £3.2m reflecting the additional investment made to grow
the panel in the past three years. Amortisation of software
increased by £1.0m to £5.0m. £4.6m (2018: £3.5m) of the total
software development charge related to assets created
through the Group’s own internal development activities, £0.3m
(2018: £0.3m) related to separately acquired assets and £0.1m
(2018: £0.2m) was for amortisation on assets acquired through
business combinations.
Separately reported items
Restructuring costs
Acquisition-related costs
Fair-value movements
Total separately reported Items
Year to
31 July 2019
£m
Year to
31 July 2018
£m
0.2
0.4
(2.1)
(1.5)
1.4
1.2
(1.7)
0.9
Restructuring costs in the year are residual cost incurred in
respect of the restructuring of the Custom Research business
in Mainland Europe and the Middle East and the closure of the
Reports business.
Acquisition related costs in the year comprise: £2.8m of
contingent consideration treated as staff costs in respect of the
acquisitions of Galaxy Research Pty Ltd, InConversation Media
36 YouGov Annual Report and Accounts 2019
Strategic report Limited and Portent.io Limited and £0.8m of transaction costs
in respect of the acquisitions made in the year, £0.2m of which
is contingent less a reduction in expected SMG contingent
consideration of £3.2m.
Fair value gains in the year comprise: a £1.9m increase in the
fair value assessment of the Group’s 20% shareholding in SMG
Insight Limited prior to acquisition and a bargain purchase gain,
net of a fair value loss, in respect of the acquisition of Portent.io
Limited of £0.2m.
Analysis of operating profit and earnings per share
Adjusted profit before tax2 of £20.5m was an increase of £4.2m
(26%) on the comparable result of £16.3m for the 12 months
to 31 July 2018. The adjusted tax rate remained at 26%.
Statutory profit before tax of £19.5m was reported compared to
£11.8m in the year ended 31 Jul 2018, an increase of 65%.
During the period adjusted earnings per share2 grew by 30% from
11.5p to 14.9p and statutory earnings per share grew by 84% from
7.7p to 14.2p.
Adjusted operating profit2
Share-based payments
Imputed interest
Net finance expense
Share of post-tax profit in associates
Adjusted profit before tax2
Adjusted taxation2
Adjusted profit after tax2
Adjusted earnings per share (pence)2
31 July
2019
£’000
18.3
2.4
0.2
(0.3)
(0.1)
20.5
(5.4)
15.1
14.9p
31 July
2018
£’000
12.6
3.6
0.1
(0.1)
0.1
16.3
(4.2)
12.1
11.5p
Cash flow, capital expenditure and technology
investment
The Group generated £35.3m (2018: £23.6m) in cash from
operations (before paying interest and tax) including a £6.0m
(2018: £0.6m) net working capital inflow; as a result the cash
conversion rate (percentage of adjusted EBITDA converted
to cash) increased from 113% to 124% of adjusted EBITDA.
The Group invested £4.8m (2018: £3.9m) in the continuing
development of our technology platform and increased the
investment in panel recruitment to £4.0m (2018: £2.8m) for the
year to support continued global expansion. Our investment in
technology continued across three main areas: websites and
mobile applications, survey systems, and our data analytics
tool, Crunch. £2.7m (2018: £1.0m) was spent on the purchase
of property, plant and equipment, resulting in a total investment
in fixed assets of £12.2m (2018: £8.2m).
31 July 2019
£m
31 July 2018
£m
Internally generated software
Panel recruitment
Other intangible assets
Total expenditure on intangible assets
Purchase of property, plant and
equipment
Total capital expenditure
4.8
4.0
0.7
9.5
2.7
12.2
3.9
2.8
0.5
7.2
1.0
8.2
Other cash outflows included £2.3m for the purchase of
InConversation Media Limited, Portent.io Limited and the
business of Crunch.io Inc, £4.5m in settlement of deferred
consideration amounts due and taxation payments of £4.5m
(2018: £5.5m).
Net expenditure on financing activities increased by £4.8m to
£6.8m, including the dividend payment of £3.2m (2018: £2.1m)
and the purchase of treasury shares for £4.0m (2018: £nil).
Net cash balances at the year-end increased by £7.3m to £37.9m.
Net cash inflow in the year was £5.2m (2018: £7.2m) and currency
fluctuations in the year resulted in an exchange gain of £2.1m
(2018: £0.2m).
Currency
The Group’s results were affected by the net depreciation of
£ Sterling as its average exchange rate was 4% lower against
the USD in this period than in the 12 months to 31 July 2018.
Movement against the Euro was effectively flat for the period.
The net impact of foreign exchange on the Group’s adjusted
operating profit2 was an increase of £0.6m compared to
calculation in constant currency terms.
Balance sheet
As at 31 July 2019, total shareholder’s funds increased from
£92.1 to £108.6m. Net assets increased from £92.1m to
£108.0m, with a minority interest of £0.6m accounting for the
difference. Net current assets decreased from £25.3m to £24.1m.
Current assets increased by £5.9m to £72.6m with debtor days
decreasing from 56 to 47. Current liabilities increased by £7.3m
to £48.7m with creditor days increasing to 24 days from 21 days
at 31 July 2018. Non-current liabilities increased by £2.9m to
£14.1m partly due to £2.2m of contingent consideration payable
in respect of acquisitions.
Proposed dividend
The Board is recommending the payment of a final dividend
of 4.0 pence per share for the year ended 31 July 2019.
If shareholders approve this dividend at the Annual General
Meeting (scheduled for 11 December 2019), it will be paid on
16 December 2019 to all shareholders who were on the Register
of Members at close of business on 6 December 2019.
Alex McIntosh
Chief Financial Officer
8 October 2019
1. Defined as growth in business excluding impact of current and prior period acquisitions
£9.1m, the reduction in revenue as a result of the rationalisation of the Custom Research
business (£2.7m) and movement in exchange rates £2.4m.
2 Defined in the explanation of Non-IFRS measures on page 38.
37
Strategic report Chief Financial Officer’s report
for the year ended 31 July 2019 continued
Explanation of Non-IFRS measures
Financial Measure
How we define it
Why we use it
Separately reported items
Items that in the Directors’ judgement are
one-off or need to be disclosed separately by
virtue of their size or incidence
Provides a more comparable basis to
assess the year-to-year operational
business performance
Adjusted operating profit
Operating profit excluding separately
reported items
Adjusted operating profit
margin
Adjusted operating profit expressed as a
percentage of revenue
EBITDA
Operating profit before charging depreciation
and amortisation
Adjusted EBITDA
EBITDA excluding separately reported items
Adjusted profit before tax
Adjusted taxation
Adjusted tax rate
Profit before tax before share-based payment
charges, imputed interest and separately
reported items
Taxation due on the adjusted profit before tax,
excluding the tax effect of separately reported
items and share based payment charges
Adjusted taxation expressed as a percentage
of adjusted profit before tax
Provides a more comparable basis to assess
the underlying tax rate
Adjusted profit after tax
Adjusted profit before tax less
adjusted taxation
Facilitates performance evaluation, individually
and relative to other companies
Adjusted profit after tax
attributable to owners of
the parent
Adjusted basic earnings
per share
Adjusted profit after tax less profit attributable
to non-controlling interests
Adjusted profit after tax attributable to owners
of the parent divided by the weighted average
number of shares. Adjusted diluted earnings
per share includes the impact of share options
Constant currency
revenue change
Cash conversion
Current year revenue change compared to
prior year revenue in local currency translated
at the current year average exchange rates
Shows the underlying revenue change by
eliminating the impact of foreign exchange
rate movements
The ratio of cash generated from operations
to adjusted EBITDA
Indicates the extent to which the business
generates cash from commercial activities
Reconciliation of Non-IFRS measures
Adjusted Operating Profit Reconciliation
Statutory operating profit
Separately reported items
Adjusted operating profit
Adjusted EBITDA Reconciliation
Adjusted operating profit
Depreciation
Amortisation
Adjusted EBITDA
38 YouGov Annual Report and Accounts 2019
Year to
31 July 2019
£m
Year to
31 July 2018
£m
19.8
(1.5)
18.3
11.8
0.9
12.7
Year to
31 July 2019
£m
Year to
31 July 2018
£m
18.3
1.5
8.8
28.6
12.7
1.2
7.0
20.9
%
Change
69%
–
45%
%
Change
45%
20%
25%
37%
Strategic report Principal risks and uncertainties
Our approach to risk management
As reported last year, the Audit & Risk Committee led a
comprehensive review of the Group Risk Management Policy
and Procedure (the “Risk Procedure”) during 2017/18. As a result,
this reporting year was the first full year of operation for the Risk
Procedure. Primary responsibility for oversight and scrutiny
of risk management has been delegated to the Audit & Risk
Committee, who report to the Board on a regular basis. The Audit
& Risk Committee’s Terms of Reference reflect their focus on risk.
For information on the activities of the Audit & Risk Committee
during the year, see pages 53 to 55. The outputs from the Risk
Procedure 2018/19 have fed into the Board’s identification of
the principal risks and uncertainties facing the Company at
31 July 2019.
Our approach to identifying the principal risks
The principal risks and uncertainties identified in this report are
those categories of risk which are considered by the Board to
be material to the development, performance, position and/or
future prospects of the Company.
While the risk categories have not materially changed since the
last Annual Report, the risk factors may have evolved and the
categorisation may have changed.
In determining the principal risks, the Audit & Risk Committee
assess the top net risks once existing controls are taken into
consideration. The top net risks are consolidated into the principal
risks which are reported below. While the principal risks have
been categorised for the purpose of this report, some risk
elements may appear in more than one risk, and some controls
may apply across multiple risks. When viewing the principal
risks in this report, it should be noted that they are presented
alphabetically by category, not by risk score.
These are not the only risks facing the business, but are those
which are considered to have a material impact on the business,
and therefore are the focus of discussion at the highest levels of
the Group.
Risk & status
Description
Mitigation
Competition
Increasing competition from “copycat”
products could attract clients away
from YouGov.
• Differentiation from our competitors: the size of our panel
and the wealth of data in our proprietary data library are key
assets which are difficult for competitors to replicate.
Cyber
In our fast-paced industry, YouGov’s offering
could become outdated and thereby not able
to retain clients.
Panel members could choose to move
away from YouGov and offer their opinions
to competitors.
Risks from cyber incidents are broad, but the
key risks relevant to YouGov have been
identified as:
(i) Inadequacy of IT infrastructure to support
the business. For example, an inability to
restore business promptly after an outage.
(ii) Serious IT failure impacting on business
operations such as from deliberate
intrusion (i.e. hacking, social engineering or
virus), accidental outage due to user error,
employee malfeasance or failure of physical
IT assets (i.e. data centres and/or hardware).
• YouGov is continually innovating to keep our products
relevant and
at the cutting edge of our industry.
• Dedicated Panel team manages the needs of our panellists
globally. We continuously innovate to improve the
panellist experience.
• YouGov has business continuity and disaster recovery plans
in place, which are regularly reviewed.
• Robust budget planning in place for IT resource
requirements, involving key stakeholders from across
the business.
• Breach Response Policy and dedicated team (including
Group Head of Infrastructure & System Operations, Group
Head of Panel, Group Head of Governance, Group Data
Protection Officer and Group Information Security Manager)
in place to respond to any breaches.
• Information Security Committee meet regularly to manage
projects and actions arising around the business, with
participation from the COO, Senior Management and
Governance teams.
• Intrusion detection systems in place, which are
regularly tested.
• IT security practices are externally validated. In 2018/19, ISO
27001 certification was achieved in respect of our information
management system for client confidential information.
39
Strategic report Principal risks and uncertainties continued
Risk & status
Description
Mitigation
Data
protection
The occurrence of a data breach incident
(i.e. exposure of panellist/client personal
information) due to deliberate intrusion
(e.g. unauthorised access, hacking, social
engineering or virus), accidental data leak,
or deliberate de-anonymisation (client takes
YouGov data and combines it with their own
data to create data from which individuals can
be identified).
Non-compliance under the EU GDPR or other
data protection or privacy legislation leading to
significant penalties or reputation damage.
• Group Data Protection Officer and Group Information Security
Manager work closely to manage these risks with their teams.
• Management focus on compliance across the Group’s
data handling activities. The Board receive reports at each
meeting. The Data Protection & Security Committee and
Information Security Committee meet regularly throughout
the year, with participation from the Chief Operating Officer
and Senior Management stakeholders.
• Compulsory training on IT Security and Data Protection for all
employees across the Group, with refresher training program
in place.
• Data Protection Policies and related documentation are
reviewed and updated regularly.
• Breach Response Policy and dedicated team in place to
respond to any breaches.
Geopolitical
Consequences of the United Kingdom’s exit
from the European Union (“Brexit”) cause
uncertainty for the economic outlook for
businesses operating in the UK.
• While specific mitigation is not possible prior to the terms of
an exit from the EU being agreed, the Board and Governance
team monitor the political, industry and regulatory changes
across the Group in relation to Brexit.
• While Brexit continues to create uncertainty in the economic
and political environment, especially for UK and European
businesses, the international spread of our revenues,
with a significant and growing US weighting, cushions us
from volatility.
Internal
controls
Unauthorised access to or use of our systems
and/or IT infrastructure by ex-employees/
contractors and/or unknown third parties.
• HR and IT teams work together to manage access to our
systems by known third parties such as contractors and
ex-employees.
• The Audit & Risk Committee is appraised of activities to
review and improve internal controls in their meetings.
• Prevention of access by unknown third parties is the
responsibility of the IT Security team. We use security
systems which are externally validated and work to
continually improve as risks evolve. We hold ISO 270001
certification for our information security management
(see page 54), a globally recognised standard.
• Group Head of Panel leads a team dedicated to maintaining
the YouGov Global Panel. The Board receive reports on the
panel at each Board Meeting, including panel capability,
acquisition and overall health.
• Data Innovation Unit and Panel team work to improve the
panellist experience and to monitor panellist fraud attempts.
• Group activities are subject to scrutiny by the Board,
Board Committees and external auditors.
• Management is supported by a team of qualified
professionals, external advisors and in-house legal team.
Panel1
Failure to maintain quality engaged panellists
in order to meet business need.
Regulatory
Failure to comply with legal and regulatory
requirements for a listed company with
overseas subsidiaries for reasons such as:
• lack of knowledge or adequate advice;
• lack of understanding of relevant legislation
or regulations; or
• inability to follow company policy.
1 New entry
40 YouGov Annual Report and Accounts 2019
Strategic report Risk
Description
Mitigation
Reputation
Failure to protect the Group’s reputation could
lead to a loss of confidence and decline in our
customer base; affect our ability to recruit and
retain employees and panellists.
Damage to our reputation could arise from
a range of events, for example from our
services being of poor quality or the leak of
confidential data. Given the general mistrust of
market research and data analytics industry,
reputational damage could be difficult to
recover from.
• PR advisors retained who actively monitor the
corporate press.
• Executive Management receive media training.
• Nominated staff manage corporate social media relations.
• Nominated spokespersons are in place for media interaction.
Additional resource to internal and external communications
added during the year.
• Panel team actively monitors panellist feedback by email and
surveys; Marketing team actively monitors social media feeds
and manages complaints.
Strategy
Key risks related to Strategy include:
Failure to achieve projected growth in line
with our annual budget and/or do not
meet the strategy objectives in line with
market expectations.
Failure to identify or execute a successful
strategy for the business leading to loss
of client base, inadequate resources to
provide new products and/or services, and/
or changes in technology result in YouGov’s
offering becoming outdated.
• During 2018/19 in the lead up to the conclusion of FYP1, the
Board adopted FYP2. The Board assesses progress against
five-year plans regularly.
• Executive LTIP links Senior Management remuneration to
profit growth (see the Annual Report on Remuneration on
page 62).
• Senior Management focus on developing and implementing
new strategies, methodologies, technologies, products
and services.
• Robust planning process in place involving key stakeholders
across the business.
• Regular review of Company performance against market
expectations by the Board.
• Management meet regularly with the Company’s broker to
review market expectations and messaging.
• Our resource applied to determining our strategy, and the
detailed planning in place, has enabled us to score this risk
as decreased year-on-year.
Key
No change
Increased risk
Decreased risk
The Strategic Report is approved by the Board and signed on
its behalf by:
Stephan Shakespeare
Chief Executive Officer
8 October 2019
41
Strategic report In this section
44 Chair’s Introduction and Corporate Governance Statement
46 Board of Directors
48 Corporate Governance Report
52 Nomination Committee Report
53 Audit & Risk Committee Report
56 Remuneration Committee Report
57 Directors’ Remuneration Policy
62 Annual Report on Remuneration
65 Environmental, Social & Governance Report
68 Directors’ Report
71 Directors’ Responsibilities Statement
72
Independent auditors’ report to the members of YouGov plc
on the Group financial statements
Governance
report
42 YouGov Annual Report and Accounts 2019
Governance
report
Capturing
At the heart of our company
is a global online community,
where millions of people and
thousands of political, cultural
and commercial organisations
engage in a continuous
conversation about their beliefs,
behaviours and brands.
43
Governance report Chair’s Introduction and Corporate Governance Statement
On behalf of the Board of Directors of YouGov plc (the “Board”), I am pleased to present the YouGov plc Corporate Governance Report
for the year ended 31 July 2019.
The Board is committed to delivering high standards of corporate governance – commensurate with the size, stage of growth and
nature of the Group’s activities – to its shareholders and other stakeholders including employees, panellists, customers, suppliers
and the wider community.
Evolving corporate governance at YouGov
Since 2014, the Company has followed the QCA Corporate Governance Code as its benchmark for good corporate governance
practice. As reported last year, the Board has formally adopted April 2018 edition of the QCA Code (the “QCA Code 2018”). As Chair,
I have oversight of how our corporate governance processes and procedures meet the requirements of the QCA Code 2018.
While we have chosen not to follow the UK Financial Reporting Council (“FRC”) Corporate Governance Code (the “FRC Code”) –
as we have determined that the QCA Code 2018 is better suited to the size and type of our business – we take into account the
principles of the FRC Code.
We continually improve our corporate governance practices with a view to achieving best practice standards befitting to our position
as one of the largest AIM-listed companies. During the year, corporate governance activities have included:
• Achieving ISO 27001 certification for information security of client confidential data (see page 54);
• Completing the first board effectiveness evaluation under the revised process (see page 49);
• Reviewing and making changes to our committee membership (see page 52); and
• Developing a new long-term incentive plan, the LTIP 2019 (see page 56).
Our growing Governance team at YouGov assists the Board to ensure high standards are maintained.
Board composition
After the year-end, Ben Elliot retired as Non-Executive Director on 13 September 2019 and we announced that Nick Jones will retire at
the Annual General Meeting (“AGM”) to be held on 11 December 2019. Both Nick and Ben have made a significant contribution during
their time with YouGov. On behalf of our stakeholders and the Board, I would like to offer them our sincere thanks.
As Nick Jones approached ten years’ tenure on the Board, we began transitioning to new Committee membership in anticipation of
the time when he might retire. Ashley Martin, who joined the Board as a Non-Executive Director during the year, became Chair of the
Audit & Risk Committee in November 2018. Rosemary Leith, a Non-Executive Director and Chair of our Remuneration Committee, will
take over Nick’s role as Senior Independent Director when he departs in December 2019. I offer thanks to Nick for remaining with the
Committees during this transition period to ensure a smooth handover.
The Board is committed to
delivering high standards
of corporate governance
– commensurate with the
size, stage of growth and
the nature of the Group’s
activities.”
44 YouGov Annual Report and Accounts 2019
Governance report Following Nick Jones’ expected retirement on 11 December 2019, our Board will consist of four independent Non-Executive Directors
and three Executive Directors. The Nomination Committee has in place a comprehensive succession plan for all Board roles to ensure
we continue to have the right balance of skills and independent oversight. For more information on the activities of the Nomination
Committee, see page 52.
Corporate culture
When YouGov was established in 2000, we were the pioneer in the field of online market research. As we move towards our 20th
Anniversary in 2020, our corporate culture retains the progressive and entrepreneurial spirit which was formed in those early days.
This is reflected in our Company Values which were re-launched during the year. The values - be fast, be fearless, get it right and trust
each other – are described on page 8. These values are core to our culture as we continue to grow globally. As befitting a company in
our area of business and our industry, opinions are valued and innovation is openly encouraged.
The Board monitors corporate culture through regular interaction with senior management and, for the Executive Directors in
particular, day-to-day contact with colleagues at all levels throughout the business. Corporate culture has continued to be an area of
focus for the Board in 2018/19, with investments made to improve both panel and employee experiences. In a year when we acquired
new assets, we continue to aim for acquired companies to be integrated into YouGov as swiftly as possible, from both an operational
and cultural perspective.
Stakeholder engagement
During 2018/19, we have engaged with stakeholders in a number of ways, including:
• Conducting an all-employee engagement survey, enabling all employees globally to provide confidential feedback on their
experiences (see page 67);
• Holding our first “Minding the Gap” event, an open forum for employees to help construct our gender pay gap action plan (see page 66);
• Appointing employee champions to participate in decisions regarding the refurbishment of our London office; and
• Launching a new corporate website, providing a dedicated repository of information for our shareholders, clients and
other stakeholders.
For information on our employee engagement see page 67, and how we interact with our stakeholders see pages 8 and 65 to 67.
YouGov now employs more than 1,000 staff across four continents. On behalf of the Board, and shareholders, I would like to thank all
our employees for their contribution to YouGov’s ongoing success.
This Corporate Governance Report sets out our approach to governance, provides further information on the operation of the Board
and its Committees, and explains how the Group complies with the QCA Code 2018.
Roger Parry
Chair
8 October 2019
45
Governance report
Board of Directors
Roger Parry CBE N
Stephan Shakespeare N
Non-Executive Chair
Chief Executive Officer
Appointed Non-Executive Chair in
January 2007
Roger is Chair of Oxford Metrics and a Non-
Executive Director of Uber UK. Roger was
previously Chair of Future Publishing, Johnston
Press and Shakespeare’s Globe Trust; a
consultant with McKinsey & Co; CEO of More
Group, and CEO of Clear Channel International.
Roger was educated at the universities of Oxford
and Bristol. He is a Visiting Fellow of Oxford
University. He was awarded the CBE in 2014.
He is the author of five books including The
Ascent of Media.
Founded YouGov plc in March 2000
One of the pioneers of internet research, Stephan
has been the driving force behind YouGov’s
innovation-led strategy. He was chair of the
Data Strategy Board for the Department for
Business, Innovation and Skills 2012–2013 and
led the Shakespeare Review of Public Sector
Information. He is a commissioner for the Social
Metrics Commission, an independent charity
dedicated to helping UK policy makers and
the public understand and take action to tackle
poverty. Stephan has an MA in English Language
and Literature from Oxford University.
Alex McIntosh N
Chief Financial Officer
Appointed Executive Director
in December 2017
Sundip Chahal N
Chief Operating Officer
Appointed Executive Director
in December 2017
Alex has been with YouGov since 2007. He initially
joined YouGov as Corporate Finance Manager
focussing on planning, budgeting and corporate
development. He became Chief Strategy
Officer in 2011 and played a leading role in the
development of YouGov’s strategic plans and data
product developments. Alex also held the role of
Chief Executive Officer of the UK business from
2015 to 2016. He previously worked in corporate
finance advising a wide range of companies on
their growth plans and first worked with YouGov
in 2005 while at Grant Thornton when he assisted
with the Group’s initial public offering on AIM.
Alex holds a BSc (Hons) in Applied Accounting,
an MSc in Finance, and is a Fellow of the
Association of Chartered Certified Accountants.
Sundip has been with YouGov since 2005 and
has been the Group’s Chief Operating Officer
since 2014. He initially joined the UK business as
BrandIndex Sales Director, becoming Managing
Director of Data Products in 2008. In 2009,
he was appointed as Chief Operating Officer
of YouGov’s MENA business and relocated to
Dubai to oversee the expansion of YouGov’s core
online services across the Middle East, North
Africa and Asia. In 2010, he was promoted to
Chief Executive Officer of YouGov MENA. Prior to
joining YouGov, Sundip gained experience of the
market research industry with Ipsos Mori and
Research International.
46 YouGov Annual Report and Accounts 2019
Governance report Nick Jones N S
Ashley Martin A* R N
Rosemary Leith
R*
A
N
Non-Executive Director
and Senior Independent Director
Appointed Non-Executive Director in June
2009 and Senior Independent Director in
May 2015
Nick is Chief Financial Officer of Broadstone,
the provider of employee benefits, actuarial
and investment services advice to small and
medium-sized businesses. Prior to this, he was
CFO of Attenda, CFO of Achilles Group, and
Global Head of Finance for Reuters plc, where he
also led the integration of Thomson and Reuters.
Nick has held senior financial roles in technology
and media businesses in the UK, US and Europe
including Virgin Media, Phillips Electronics and
RR Donnelley. Nick is a Fellow of the Chartered
Institute of Management Accountants and holds
a BA (Hons) in Accounting and Finance.
Nick is expected to retire from the Board at the
AGM to be held on 11 December 2019.
Non-Executive Director
Non-Executive Director
Appointed Non-Executive Director
in September 2018
Appointed Non-Executive Director
in February 2015
In addition to his Non-Executive role with
YouGov, Ashley is also Non-Executive Director
and Chair of the Audit & Risk Committee at
Zegona Communications plc. Until 2018, he
served for nine years as Non-Executive Director
and Chair of the Audit Committee at Rightmove
plc. Ashley has held main board executive
roles at a number high growth entrepreneurial
businesses mainly in the technology, media
and communications sector including Tempus
Group plc, Rok plc and The Engine Group. He is a
Fellow of the Institute of Chartered Accountants.
Rosemary is Non-Executive Director of HSBC
UK Bank plc and member of the Bank’s Risk
Committee. She is co-founding Director of the
World Wide Web Foundation and Trustee of the
National Gallery (London), where she is Chair
of the Digital Advisory Board and member of
the Remuneration Committee. She is a Fellow
at Harvard’s Berkman Klein Center for Internet
and Society. Rosemary works as an advisor and
investor in a number of technology businesses
and academic institutions in Europe and North
America including Motive Partners (a Fintech
fund based in New York), Glasswing Ventures
(Boston) and Queen’s University School of
Business (Canada). She has been the Chair of the
World Economic Forum Global Agenda Council
on Future of Internet Security. Rosemary holds
a Bachelor of Commerce (Hons) in Finance and
Accounting from Queen’s University, Canada.
Rosemary is expected to be appointed as Senior
Independent Director following the AGM to be
held on 11 December 2019.
Andrea Newman R N
Ben Elliot A N
Non-Executive Director
Non-Executive Director
Appointed Non-Executive Director
in December 2017
Appointed Non-Executive Director from
August 2010 to September 2019
Andrea is the Head of Global Brand at HSBC
Holdings plc. In this role, Andrea is responsible
for the management of the HSBC brand globally,
as well as all marketing. She has been at HSBC
for 20 years and during that time has lived and
worked in the US and Asia Pacific in addition to
the UK. During her tenure with HSBC she has
overseen the development of the company’s
brand from a federation of over 50 brands to
one unified brand, elevating HSBC’s place as
one of the most globally recognised financial
services brands.
Ben Elliot is the co-founder of Quintessentially,
the global luxury lifestyle company founded
in December 2000. He is also the Chair of the
Quintessentially Foundation, which has raised
over £11m for charity since 2008, and a Partner
in Hawthorn Advisors, a successful corporate
communications business. He is a Trustee for
the V&A Museum and Chair of the Philanthropy
Board for the Royal Albert Hall, as well as being
a Trustee of the Eranda Rothschild Foundation
and the Honorary Treasurer for The Centre for
Policy Studies.
Key
*
S
A
R
N
Chair of Committee
Senior Independent Director
Audit & Risk Committee member
Remuneration Committee member
Nomination Committee member
47
Governance report Corporate Governance Report
for the year ended 31 July 2019
Statement of Compliance
YouGov plc has adopted the QCA Code 2018. We are compliant with the principles of the Code. Disclosures required by the QCA
Code 2018 have been made both in this Annual Report and on our website (corporate.yougov.com).
The Board
Composition
At 31 July 2019, the Board consisted of three Executive Directors and six Non-Executive Directors, including a Non-Executive Chair.
Board tenure*
Board composition*
Board gender diversity*
0 – 3 years
3 – 6 years
6+ years
Executive
Non-Executive
22%
Male
Female
44%
45%
11%
33%
67%
78%
*As at 31 July 2019
*As at 31 July 2019
*As at 31 July 2019
There were a number of changes to the composition of the Board during the year and following year-end.
During the year, on 1 September 2018, Ashley Martin joined the Board as Non-Executive Director and subsequently became Chair of
the Audit & Risk Committee on 1 November 2018.
After the year-end, we announced that Ben Elliot would retire from the Board on 13 September 2019 following nine years’ tenure as
a Non-Executive Director and that Nick Jones was expected to step down as Senior Independent Director at the AGM to be held on
11 December 2019. Nick Jones exceeded nine years’ tenure in 2018 and has stayed on the Board to enable a smooth transition of his
roles as Senior Independent Director and Chair of the Audit & Risk Committee.
There have been no changes to the Executive Directors during the reporting year.
The names of the Directors during the year, their biographies and their respective responsibilities are shown on pages 46 and 47.
Independence
The Board periodically reviews its composition and succession planning framework to ensure that Board appointments create
an appropriate mix of skills and experience, and a level of diversity and independence that supports the Group’s objectives for
business growth.
The key factors considered by the Board when determining a Director’s independence are:
(i) their other commitments;
(ii) their tenure; and
(iii) the personal qualities they demonstrate in the boardroom.
Particular weight is given to how they exercise their judgement, and to the level of engagement and challenge that they provide in
Board and Committee discussions. Each of the Non-Executive Directors, including the Non-Executive Chair, are considered by the
Board to be independent. This is reviewed annually by the Board. Principle 5 of the QCA Code 2018 advises that independence is a
Board judgement.
Roger Parry reached 12 years tenure on the Board in 2019. After evaluation, the Board has determined that Roger remains
independent in character and judgement in his role as Non-Executive Director and as Chair of the Board.
Nick Jones reached ten years tenure on the Board in 2019. After evaluation, the Board determined that Nick remains independent in
character and judgement in his roles. As announced after the end of the reporting year, Nick Jones is expected to retire from the Board
at the AGM on 11 December 2019.
For more information on succession planning, see the report of the Nomination Committee on page 52.
48 YouGov Annual Report and Accounts 2019
Governance report Operation
The Board operates both formally, through Board and Committee meetings, and informally, through regular contact among Directors.
High-level decisions on matters such as strategy, financial performance and reporting, dividends, risk management, major capital
expenditure, acquisitions and disposals are reserved for the Board or Board Committees. The Board receives regular information
from management on the Group’s performance and appropriate information relating to the agenda for formal Board and Committee
meetings are provided in advance of those meetings. During the year, the Board moved to an online portal for distribution of Board
papers to increase efficiency and security.
All Directors are expected to commit sufficient time to their roles as required. As a minimum, Non-Executive Directors commit one day
per month. The Chairs of the Board and its Committees commit further time as required to fulfil their roles.
All Directors are required to submit themselves for re-election at the AGM following their appointment and subsequently on a
rotational basis, which ensures that each Director is submitted for re-election approximately every three years. In line with best
practice, the Board has decided that from the 2019 AGM onwards all Directors will be subject to re-election by the shareholders at
each AGM. The Company’s Articles of Association, which were adopted in 2008, have been reviewed during the year. To reflect the
new policy on annual re-election and additional best practice updates, a new set of Articles of Association will be tabled at the 2019
AGM for Shareholder approval.
All Directors bring their experience to the Board. Directors are encouraged to keep their skillset up to date and the Company provides
support in this regard where needed. For example, the Company provides access to external advisors or externally facilitated courses
where appropriate. In 2018/19 this included global entity training for the Executive Directors by KPMG Global Entity Management.
Evaluation
Each year, the Board commissions an evaluation of its own effectiveness and considers whether that evaluation should be internally or
externally facilitated. This year, it was determined that an in-house effectiveness evaluation would be sufficient.
The in-house evaluation was conducted by the Corporate Secretariat in compliance with the Board Effectiveness Evaluation Process
approved by the Board in 2018. The evaluation consisted of:
• Questionnaires on effectiveness of the Board as a whole;
• Individual peer-to-peer questionnaires; and
• One-on-one discussions with the Company Secretary.
Anonymised results from Board effectiveness questionnaires were presented to the full Board. No areas of material concern were
identified and it was confirmed that the Board was operating effectively. With a view to continually improving the Board’s effectiveness,
recommendations were presented to the Board for actions to be undertaken during the next twelve months, including the following
actions that were completed by the end of the reporting year.
Area
Recommendation
Actions taken in 2018/19
Ongoing Development
Consider opportunities for development
when they occur for both Executive and
Non-Executive Directors.
KPMG’s Global Entity Management team
provided a tailored global entity training session
for new Executive Directors.
Succession Planning
Board Information
Ensure formal recruitment, appointment and
induction processes for new appointees.
Nomination Committee met to consider
succession for key Board roles.
Revise Board paper templates to ensure a
consistent approach to the presentation of
information to the Board.
New portal for online distribution of papers to
the Board implemented.
49
Governance report Corporate Governance Report
for the year ended 31 July 2019 continued
Shareholder communications
The Executive Directors meet regularly with institutional shareholders to discuss the Group’s performance and future prospects.
At these meetings, the views of institutional shareholders are canvassed and subsequently reported back to the Board. The AGM is
available as a forum for communication with private shareholders. Chairs of each Committee attend the AGM to address any queries
about their Committee’s performance during the year.
Shortly after the year-end, we launched a new corporate website to facilitate improved engagement with our stakeholders, including
our shareholders. The website can be found at corporate.yougov.com.
Our primary point of contact for investor relations is the Company Secretary. The dedicated email address for any investor queries is:
investor.relations@yougov.com
Advisors
All Directors have access to the Group’s selected advisors and can obtain independent professional advice at the Group’s own
expense in performance of their duties as Directors. Board Committees are authorised to obtain, at the Group’s expense, professional
advice on any matter within their Terms of Reference. The Audit & Risk Committee works with the Group’s external auditors,
PricewaterhouseCoopers (“PwC”). The Company Secretary is supported on company secretarial matters by KPMG (global entity
management), Numis (NOMAD) and Neville Registrars (Registrar). During the year, the Remuneration Committee was supported by
Aon (remuneration consultants).
Auditor independence
The Audit & Risk Committee undertakes a formal assessment of the auditors’ independence each year, which includes:
• confirmation of the auditors’ objectivity and independence in the provision of non-audit services to the Group by the use of separate
teams to provide such services where appropriate;
• discussion with the auditors of a written report detailing relationships with the Group and any other matters that could affect
independence or the perception of independence;
• a review of the auditors’ own procedures for ensuring independence of the audit firm and partners and staff involved in the audit,
including the regular rotation of the audit partner; and
• obtaining written confirmation from the auditors that, in their professional judgement, they are independent.
An analysis of the fees payable to the external audit firm in respect of both audit and non-audit services during the year is set out
in Note 2 to the Financial Statements. For more information on the Audit & Risk Committee’s evaluation of the external auditors,
see page 54.
Directors’ conflicts of interest
The Company has procedures in place to monitor and manage Directors’ conflicts of interest. The Directors are required to declare
their interests and connected persons on an annual basis (and additionally when there is change) and the Company Secretary
maintains a register of said interests. The Company’s current and proposed Articles of Association permit the Board to authorise
declared conflicts of interest; and Directors may excuse themselves from decisions when they are concerned about a conflict or
potential conflict.
Save as disclosed, no Director has or has had any interest in any transaction which is or was unusual in its nature or conditions or
which is or was significant in relation to the business of the Company and which was effected by the Company either: (i) during the
current or immediately preceding financial year; or (ii) during any earlier financial year and which remains in any aspect outstanding
or unperformed.
50 YouGov Annual Report and Accounts 2019
Governance report Controls and Procedures
Key controls and procedures
The Board maintains full control and direction over appropriate strategic, financial, organisational and compliance issues and has put in
place an organisational structure with defined lines of responsibility and delegation of authority.
The Board, prior to approval being given, reviews the annual budget and forecasts. This includes the identification and assessment of
the business risks inherent in the Group as well as in the data analytics and media sectors, along with associated financial risks.
The system of internal controls is designed to manage, rather than eliminate, the risk of failure to achieve business objectives, in
addition to providing reasonable but not absolute assurance against material misstatement or loss. These include controls in relation
to the financial reporting process and the preparation of consolidated accounts. These procedures have been in place during the
financial year up to the date of approval of the Annual Report. This process is regularly reviewed by the Board and is in accordance
with FRC guidance. The Audit & Risk Committee receive a report from management on the effectiveness of internal controls each year.
For more information on the Committee’s activities with regard to internal controls, see page 54.
The key procedures include:
• detailed budgeting programme with an annual budget approved by the Board;
• regular review by the Board of actual results compared with budget and forecasts;
• regular reviews by the Board of year-end forecasts;
• establishment of procedures for acquisitions, capital expenditure and expenditure incurred in the ordinary course of business;
• detailed budgeting and monitoring of costs incurred on the development of new products;
• reporting to, and review by, the Board of changes in legislation and practices within the sector and accounting and legal
developments pertinent to the Group;
• appointing experienced and suitably qualified staff to take responsibility for key business functions to ensure maintenance of high
standards of performance; and
• appraisal and approval of proposed acquisitions by the Board.
Board Committees
The Board have delegated powers to Committees who operate under Terms of Reference approved by the Board annually. Each
Committee has a Non-Executive Chair who provides reports to the full Board in their meetings.
The structure of our Committees is:
Board of Directors
Nomination
Committee
Audit & Risk
Committee
Remuneration
Committee
See page 52
See page 53
See page 56
51
Governance report Nomination Committee Report
I am pleased to present to you the report of the Nomination Committee for the
year ended 31 July 2019.
Committee Membership
The whole Board acts as the Committee when the need arises. I chair the
Committee, except when the Committee is dealing with the matter of
succession to the Chair. On these occasions, the Senior Independent Director
fulfils the role of Committee Chair.
Areas of responsibility
The Committee is responsible for:
• identifying the skills and experience required for the next stage in the
Group’s development;
• keeping close watch on succession planning and possible internal
candidates for future Board roles; and
• providing assistance to the Chair of the Board (or, where appropriate,
the Senior Independent Director), in taking steps to remove any
underperforming Director.
In fulfilling its role, the Committee takes into account the outcome of any
Board effectiveness evaluations.
Terms of Reference
The Committee operates under Terms of Reference agreed by the Board,
which were reviewed in October 2018.
Activities in 2018/19
Activities during the year focussed on succession planning and changes to the
Board and Committee composition:
• Succession planning: Following the major changes to the Board composition in
2017/18, the Board established sub-committees to focus on succession plans for
the Chair and CEO roles. These sub-committees meet once annually, including
in June 2019. Succession plans for all Board roles take into consideration the
outcome of the annual board effectiveness evaluation process.
• Board Composition: As reported elsewhere in this Governance Report, Nick
Jones and Ben Elliot both reached nine years’ tenure during the reporting
year. Following evaluation, the Committee established that they both
remained independent in thought and judgement.
• Committee Composition: The Committee considered appropriate successors
to the roles of Chair of the Audit & Risk Committee and Senior Independent
Director, to succeed Nick Jones. For the role of Chair of Audit & Risk Committee,
Ashley Martin was determined to hold the most relevant experience having
previously chaired audit committees; he assumed the role in November 2019.
For the role of Senior Independent Director, the Committee considered the
length of service of each remaining Non-Executive Director. Rosemary Leith,
being a highly experienced Director, was confirmed to be the appropriate
successor and is expected to assume the role following the 2019 AGM.
I will be present at the AGM on 11 December 2019 should you have any
questions about the activities of the Committee.
A well balanced Board is
key to good governance
and the Committee ensures
that the requisite balance
of skills, experience
and backgrounds are
represented.”
Roger Parry
Nomination Committee Chair
Main areas of responsibility
• Succession planning for Board and
Committee roles
• Composition of Board Committees
• Effectiveness of Directors
Members
Our Nomination Committee comprises the full Board:
Committee members
Role
Meetings
Roger Parry1
Rosemary Leith
Ashley Martin
Andrea Newman
Nick Jones
Ben Elliot2
Chair
Member
Member
Member
Member
Member
Stephan Shakespeare
Member
Alex McIntosh
Sundip Chahal
Member
Member
1 of 1
1 of 1
1 of 1
1 of 1
1 of 1
0 of 1
1 of 1
1 of 1
1 of 1
1 Roger Parry chairs the Committee unless the matter at
hand is the succession to the Chair, in which case the Senior
Independent Director chairs the meeting.
2 Ben Elliot was a member of the Committee until he retired from
the Board on 13 September 2019.
52 YouGov Annual Report and Accounts 2019
Roger Parry
Chair
Nomination Committee
8 October 2019
Governance report
Audit & Risk Committee Report
I am pleased to present to you the report of the Audit & Risk Committee for the
year ended 31 July 2019. This report provides an overview of the Committee’s
activities during the year. The reporting year has been my first year as Chair,
following Nick Jones’ retirement from the role. I would like to take the
opportunity to thank Nick for his great contribution to the Committee over the
past decade, and for continuing to support its activities during 2018/19.
Areas of responsibility
The Audit & Risk Committee reports to the Board on any matters in respect
of which it considers that action or improvement is needed, and makes
recommendations as to the steps to be taken.
In particular, the Committee is responsible for:
• ensuring that the financial performance of the Group is properly monitored
and reported;
• reviewing formal announcements relating to financial performance;
• the relationship with external auditors, reviewing their independence,
agreeing audit strategy and assessing the effectiveness of the external
audit process;
• reviewing reports from the external auditors and management relating to
the financial statements and internal control systems; and
• making recommendations to the Board in respect of the external auditors’
appointment and remuneration.
Terms of Reference
The Committee operates under Terms of Reference agreed by the Board,
which were reviewed in October 2018. The Terms of Reference reflect the
Committee’s additional responsibilities regarding risk. For more information
on the risk review activities undertaken by the Committee during 2018/19,
see pages 39 to 41.
Committee membership
Nick Jones retired from the role of Chair upon reaching ten years’ tenure in
November 2018. During the year, we welcomed Ben Elliot as an additional
member. Nick remained as a member until 31 December 2018, ensuring
continuity of historical company knowledge on the Committee, after which he
attended meetings as a guest at invitation of the Chair. For information about
the Chair’s relevant experience, see the biography on page 47. The Board is
satisfied that both Nick Jones and Ashley Martin, who have each served as
Chair during the year, have recent and relevant financial experience.
Executive members of the Board attend meetings at the invitation of the
Chair only.
The Chief Financial Officer, the Group Finance Director and the Group Head of
Finance regularly attend meetings at the invitation of the Chair, together with
other subject matter experts.
The Chair regularly meets with the external auditor and separately with
the Chief Financial Officer and the Company Secretary. The Committee
schedules time to receive the views of the external auditor without executive
management being present.
53
We were delighted
to achieve ISO 27001
accreditation for our IT
systems and processes.”
Ashley Martin
Audit & Risk Committee Chair
Main areas of responsibility
• Group financial reporting
•
Independence of the external auditors
• Effectiveness of external audit process
• Systems of internal controls and risk management
• Appointment of external auditors for shareholders
Members
Our Audit & Risk Committee comprises entirely
Non-Executive Directors:
Committee members
Role
Meetings
Ashley Martin
Rosemary Leith
Ben Elliot1
Nick Jones2
Chair
Member
Member
Former Chair,
Former Member
3 of 3
3 of 3
1 of 2
3 of 3
1 Ben Elliot was appointed to the Committee during the year on
1 January 2019. He remained a member until his retirement
from the Board after the end of the reporting year on
13 September 2019.
2 Nick Jones was Chair of the Committee until 1 November 2018
when he was succeeded by Ashley Martin. Nick remained a
Member of the Committee until 31 December 2018.
Governance report Audit & Risk Committee Report continued
Financial reporting
In reviewing the Annual Report and Accounts, the Committee gives consideration to significant issues including Group materiality,
whether the report gives a fair, balanced and understandable view of the Group’s affairs for the year in question and whether the
business remains a going concern. The Committee receives reports from management on these matters and senior managers,
including the Chief Financial Officer, attend Committee meetings to be available to answer queries from members.
The key judgemental areas considered by the Committee in respect of the 2018/19 reporting were:
• Impairment of goodwill and intangible assets; and
• Capitalisation of internally generated intangible assets.
You can read more about how the external auditors view these matters in their report on pages 72 to 75.
Internal audit and controls assurance
Along with the Committee’s oversight of the annual risk review process, the Committee has assessed the effectiveness of internal
controls operating during the year and monitors implementation measures to improve the control environment.
The Committee were pleased to oversee the IT Security team’s work to achieve ISO 27001, an international standard for information
security management systems. During 2018/19, YouGov established an internal audit team specifically for ISO 27001. Our ISO
27001 internal auditors are not permitted to audit their own functions and the team is overseen by the Group Information Security
Manager who tracks actions arising from the audits and works with the business to ensure they are completed. All internal auditors
have received ISO 27001 Internal Auditor training by BSI Group, the Company’s external auditors for IS0 27001. During the year,
BSI Group verified that the internal audit team for ISO 27001 was adequately qualified and that the 2018/19 audits were effective.
Our achievement of this globally recognised standard for information security reinforces our Company’s commitment to the security
of our client’s data.
There was no further formal internal audit work undertaken during the year, although the accounting functions were subject to periodic
internal review by Senior Management. As the Group continues to grow, the Committee will keep under review the need for a more
formal assurance function. In order to assess the benefits that such a function might bring, the Committee has appointed KPMG to
undertake an assurance review project on Cyber Security. I expect to report further on this area of assurance in next year’s report.
Independence of external auditors
The Committee is responsible for agreeing the terms of engagement with the Company’s external auditors PwC, including fees
and scope.
The Committee also undertakes a formal assessment of the auditors’ independence each year, which includes:
• confirmation of the auditor’s objectivity and independence in the provision of non-audit services to the Group by the use of separate
teams to provide such services where appropriate;
• discussion with the auditor’s of a written report detailing their relationships with the Group and any other parties that could affect the
independence or the perception of independence;
• a review of the auditor’s own procedures for ensuring independence of the audit firm and partners and staff involved in the audit,
including the regular rotation of the audit partner; and
• obtaining written confirmation from the auditors that, in their professional judgement, they are independent.
The Company engages PwC to provide non-audit services where appropriate (see page 96), but to do so requires the approval of
the Committee and the Audit Partner. PwC is only engaged for non-audit services where their expertise about the business is integral
to the project. There is a clear delineation between PwC’s audit teams and advisors on non-audit services, ensuring that the external
auditors retain their independence.
54 YouGov Annual Report and Accounts 2019
Governance report Effectiveness of external auditor
During the year in which we saw a change in lead Audit Partner, the Committee Chair has been instrumental in the appointment of an
appropriate partner with relevant industry experience. As this took place around the time of the change in Chair of the Committee, both
Chairs took time to meet with the new partner separately.
After conclusion of the prior year (2017/18) full-year audit, the Committee conducted an in-house review of the effectiveness of the
external audit process. This review took into account the views of all parties working with the external auditors including the wider
finance team and the corporate secretariat. After review, it was concluded that the external auditors remain independent, objective,
challenging and effective in their audit.
Policy on external auditor rotation
As an AIM-listed company, YouGov is not obliged to comply with the auditor rotation requirements for companies as set out in the
Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019. PwC have been the Company’s external
auditor for 11 years and the Committee continues to be satisfied and has no immediate plans to re-tender. In keeping with best
practice, it is Committee policy for the Audit Partner to be rotated every five years and this was undertaken during the reporting year.
There are no contractual restrictions on our choice of external auditor.
Improvements to compliance policies
The Audit & Risk Committee is keen to ensure that the business provides a confidential forum in which it is possible for employees
(or other interested parties) to raise concerns about impropriety or non-compliance. I am therefore pleased to report that this year we
have overseen the implementation of a new Group Whistleblowing Policy for the Company. As Chair of the Audit & Risk Committee,
I am available to any individual who should wish to discuss a concern. Along with the updated Group Anti-Bribery Policy and Group
Treasury Policy, this policy has strengthened our compliance regime during the year.
Annual report and accounts
I will be available at the 2019 AGM to answer any questions that shareholders may have about the work of the Committee.
Ashley Martin
Chair
Audit & Risk Committee
8 October 2019
55
Governance report Governance report
Remuneration Committee Report
I am pleased to present to you the Remuneration Committee Report for the
year ended 31 July 2019.
Areas of responsibility
The Remuneration Committee sets the strategy, structure and levels of
remuneration for the Executive Directors and reviews the remuneration of
senior management. The Committee does so in the context of aligning the
financial interests of the Executive Directors, management and employees
with the achievement of the Group’s stated strategic objectives.
Committee membership
During the year, Andrea Newman and Ashley Martin became members of
the Committee, further expanding the areas of expertise of our members.
Nick Jones stepped down from the Committee on 31 December 2018.
Remuneration Policy
The Remuneration Policy at YouGov is designed to reward employees within
a structure that reflects both Company and personal performance. It is policy
to set base salaries at normal market levels (or lower market levels for the
Executive Directors) and to offer in addition an annual cash bonus opportunity
linked to pre-determined objectives (or a commission plan for some roles).
Share awards are offered to selected employees under long-term incentive
plans that are designed to support the Company’s strategic goals and reward
the individual’s contribution to value creation. In developing the new YouGov
Long-Term Incentive Plan 2019 (“LTIP 2019”), the Remuneration Committee
consulted with its major shareholders, all of which confirmed they were
supportive of the plan.
Gender Pay Gap
During the reporting year, the Committee has worked closely with
management to progress the work to reduce the gender pay gap at YouGov.
I was pleased to support the Company’s first “Minding the Gap” event in
April 2019, a forum for employees to participate in the development of the
Company’s gender pay gap action plan. In the coming year, the Committee
will continue to be responsible for oversight of the action plan and will support
related initiatives. For more information on our work to reduce the gender pay
gap, see page 66.
We have developed our
new LTIP 2019 to continue
to align the financial
interests of management
with the Group’s strategic
objectives.”
Rosemary Leith
Remuneration Committee Chair
Main areas of responsibility
• Set the remuneration policy for Executive Directors
• Monitor, and make recommendations on,
remuneration for senior management
• Oversee remuneration-related company policies
LTIP 2014 & LTIP 2019
Members
Our Remuneration Committee comprises entirely of
Non-Executive Directors:
Committee members
Role
Meetings
Rosemary Leith
Ashley Martin
Andrea Newman1
Chair
Member
Member
Nick Jones²
Former Member
8 of 8
8 of 8
5 of 8
7 of 8
1 Andrea Newman and Ashley Martin were appointed Members
of the Committee from 1 January 2019.
² Nick Jones was a Member of the Committee until 31 December
2018, after this date he has attended meetings at the invitation
of the Chair.
Awards granted under the YouGov Long-Term Incentive Plan 2014 (“LTIP
2014”), aligned to the five-year strategic growth plan for 2014–19 (“FYP1”),
are due to vest in November 2019, to the extent the stretching performance
targets have been achieved. YouGov has delivered exceptional performance
over the FYP1 performance period (from 1 August 2014 to 31 July 2019), with
compound annual growth in adjusted basic earnings per share1 of 29%, and
compound annual growth in share price of 38% compared to 4% in the FTSE
AIM All Share Index over the same period. For more information on this plan,
see page 60.
During the year, a new long-term incentive plan linked to the new strategic
growth plan to 2023 (“FYP2”) was approved by the Board. The YouGov
Long-Term Incentive Plan 2019 (“LTIP 2019”) has been designed to incentivise
the achievement of stretching long-term targets that define FYP2. The Board
believes the new strategic growth plan can deliver significant value for our
shareholders. For more information on this new plan, see pages 58 and 59.
1 As defined at the start of the FYP1 performance period: excluding the impact of amortisation, share based
payment charges, imputed interest and separately reported items.
56 YouGov Annual Report and Accounts 2019
Annual report on remuneration
As an AIM-listed company, YouGov is not obliged to comply with the remuneration reporting requirements for companies as set
out in the Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013. However, the
Remuneration Committee has taken note of those elements of the Regulations which it considers are appropriate to the Company and
certain disclosures in this section reflect the requirements of the regulations.
I will be available at the 2019 AGM to answer any questions that you may have about the work of the Committee.
Rosemary Leith
Chair
Remuneration Committee
8 October 2019
Directors’ Remuneration Policy
The following section of this report describes our remuneration policy for YouGov’s Executive and Non-Executive Directors.
Executive Directors
The Remuneration Committee reviews the performance of Executive Directors and sets the scale and structure of their remuneration
and the basis of their service agreements with due regard to the interests of shareholders. In determining that remuneration, the
Remuneration Committee seeks to offer a competitive remuneration structure to maintain the high calibre of its Executive Directors.
The Committee believes that maintaining the Group’s business growth and profit record requires an overall compensation policy with
a strong performance-related element.
Base salary
Purpose and link to strategy
Provides a core level of reward for the completion of Executive Directors’ duties. Set at
a level that allows us to attract and retain employees of a sufficient calibre to drive the
Company’s success.
Maximum opportunity
There is no maximum salary limit. When considering salary levels, the Committee will consider
the specific nature and responsibilities of the role at YouGov, the capabilities and experience of
the individual, as well as pay levels in relevant talent markets.
Operation
The Committee’s policy is to review salaries annually. Basic salary for each Director is determined
by the Remuneration Committee taking into account the performance of the individual and
external market data.
Salary increases will be in line with increases awarded to other employees in the Group.
However, the Remuneration Committee may exercise discretion to take into account individual
circumstances or market data.
Performance framework
Not applicable.
Pension
Purpose and link to strategy
Provides Executive Directors’ with long-term savings for their future.
Maximum opportunity
Executive Directors are eligible for the standard company pension contributions (or equivalent
cash payments in lieu) of up to 5% of base salary.
Operation
Where applicable, payments are made directly to a nominated pension scheme or, if payments
are made in cash, they are delivered monthly through payroll.
Performance framework
Not applicable.
57
Governance report Directors Remuneration Policy continued
Other benefits
Purpose and link to strategy
Provision of benefits in line with the Executive Directors’ local market and those offered to the
wider workforce in that market.
Maximum opportunity
There is no defined maximum value for benefits, but the Committee will consider the aggregate
value of any such benefits when determining what should be offered.
Operation
Executive Directors are eligible to a range of benefits, including private healthcare and any other
benefit deemed appropriate by the Committee. Any reasonable business-related expenses may
be reimbursed, including any taxes payable thereon if determined to be a taxable benefit.
Performance framework
Not applicable.
Annual bonus plan
Purpose and link to strategy
The annual bonus plan is focussed on the achievement of the Group’s short-term objectives,
in complement to the LTIP which is focussed on the achievement of the Group’s long-term
objectives. The bonus plan for the reporting year was linked specifically to Group adjusted
operating profit performance, one of the Group’s Key Performance Indicators.
Maximum opportunity
Executive Directors are eligible for a maximum annual bonus of 150% of base salary per annum.
The Committee will determine an appropriate award size each year within this parameter.
Operation
Bonuses are paid in cash each year after the publication of the audited financial statements.
Performance framework
The Remuneration Committee sets annual bonus targets for the Executive Directors linked to
the annual budgeted Group adjusted operating profit; this is complemented by an LTIP which is
designed to incentivise management for the achievement of long-term earnings growth.
Long-term share incentive plans
YouGov Long-Term Incentive Plan 2019 (“LTIP 2019”)
Purpose and link to strategy
The Board believes that share ownership by the Executive Directors’ strengthens the link
between their personal interests and those of the shareholders in respect of shareholder value.
It therefore established long-term incentive plans designed to reflect an individual employee’s
contribution to long-term value creation.
From 2020 onwards, awards will be granted under the LTIP 2019. This plan is intended to
incentivise and reward for the achievement of the long-term targets that define the Company’s
strategic growth plan, FYP2.
Maximum opportunity
The maximum total number of shares which may ordinarily be granted to a participant over the
life of the plan will be determined by reference to their salary and the share price at the start of
the plan; the award level opportunities vary by participant.
The Executive Director award level opportunities are as follows:
Role
Chief Executive Officer
Other Executive Directors
Award Level Opportunity
(Maximum Total Cumulative Award Value
as a % of Base Salary in 2019)
1200%
600%
In addition to the Executive Directors, a selected number of employees from across the Group
will also participate in the LTIP 2019, at lower award level opportunities.
58 YouGov Annual Report and Accounts 2019
Governance report
YouGov Long-Term Incentive Plan 2019 (“LTIP 2019”) continued
Operation
Awards will be granted in three equal tranches: Award I, Award II and Award III in October 2020,
2021 and 2022 respectively (together the “LTIP 2019 Awards”).
Awards will normally be in the form of nil-cost options.
The grant of an award in each of these years will be conditional upon the achievement of specific
and demanding personal performance objectives to be satisfied in the financial year preceding
the grant of awards. The personal performance objectives for the Executive Directors granted
awards will be disclosed in the Annual Report and Accounts of the relevant reporting year.
The normal vesting date for all LTIP 2019 Awards will be the date of the public announcement
of YouGov’s annual results for the financial year ended 31 July 2023, expected to be in
October 2023.
The Executive Directors will be required to retain any vested shares acquired under the LTIP
2019 (either on an unexercised or net of tax basis) until at least the first anniversary of the vesting
of the awards.
Awards under the plan will be subject to malus in circumstances where there has been a
material misstatement, a material failure of risk management or serious reputational damage to
the Company.
Awards held by good leavers (death, ill-health, injury, redundancy, retirement with the consent of
the Remuneration Committee, transfer of employing business or as otherwise determined by the
Committee) will normally vest on the normal vesting date and be pro-rated for time.
Awards held by other leavers will lapse on termination of employment.
In the event of a change of control, awards will vest based on performance achieved to that date
and normally be pro-rated for time.
Performance framework
The key performance metric for the awards will be compound annual growth in adjusted basic
earnings per share1 (“EPS”).
Compound annual growth in EPS will be defined in accordance with the Company’s reported
accounting policies, and will exclude exceptional and non-recurring items.
Performance will be measured over four years using the financial year ended 31 July 2019 as a
base year.
The vesting of awards will dependent on YouGov’s EPS growth as follows:
4 Year Adjusted Basic EPS CAGR1
% of award vesting
Below 10%
Between 10% and 15%
Between 15% and 35%
35% or above
Nil
Pro-rata between 10% and 25%
Pro-rata between 25% and 100%
100%
For performance between threshold, target and stretch levels, vesting will occur on the basis of
a sliding scale.
In addition, a discretionary underpin will be applied based on the quality of the underlying
financial performance of the Company from 2019–23. This shall include, but not be limited
to, the average of the adjusted operating profit margin1 being at least 15% over the period.
The application of the underpin by the Committee may reduce the vesting level of the LTIP 2019
awards, potentially to nil.
1 As defined in explanation of Non-IFRS measures on page 38.
59
Governance report Directors Remuneration Policy continued
YouGov Long-Term Incentive Plan 2014 (“LTIP 2014”)
The LTIP 2014 was established to incentivise senior leadership for the achievement of the
Company’s five-year plan for 2014-19.
The participants are the Executive Directors and a small group of senior managers whom the
Board considers have a key role to play in the delivery of YouGov’s strategic plans. LTIP 2014 is
designed to reward the participants for the achievement of highly demanding EPS growth targets
over the five-year period ending 31 July 2019.
Under the rules of this plan, participants are conditionally awarded nil cost options to acquire
shares (or conditional stock awards, if US residents). The awards are granted in three equal
tranches over 2015/16 to 2017/18. Receipt of an award in each of these years is dependent upon
the achievement of specific and demanding personal performance objectives for the previous
financial year.
The award vesting conditions (detailed below) include EPS targets and an operating profit
margin target and the Remuneration Committee’s assessment of the Group’s underlying financial
performance over the plan period.
Vesting of awards is dependent on the Group achieving the targets for compound EPS growth in
the plan period as set out in the table below:
5 Year Adjusted Basic EPS CAGR1
% of Award vesting
Below 10%
10%
15%
25%
Nil
15%
30%
100%
1 As defined at the start of the FYP1 performance period: excluding the impact of amortisation, share based payment charges, imputed
interest and separately reported items.
Vesting of awards is also dependent on the Group’s average operating margin being at least 12%
over the five-year period. If this underpin condition is not achieved, the shares awarded will not
vest. If it is met, then the five-year EPS growth performance will be assessed against the targets
set out in the table above.
The maximum total number of shares to be awarded to each participant over the five years of
the plan is determined by reference to their salary and the share price at the start of the plan; the
award level opportunities vary by participant. The Executive Director award level opportunities are
as follows:
Role
Chief Executive Officer
Other Executive Directors
Award Level Opportunity
(Maximum Total Cumulative Award Value
as % of Base Salary in 2015)
850%
500%
In addition, the Chief Executive Officer is entitled to an enhanced award if the Company’s share
price grows by more than 200% over the five-year period and if the other vesting conditions are
also met in full. This additional award equates to 255% of his annual salary in the year ended 31 July
2015. The combined maximum potential award for the Chief Executive Officer is thus 1,105% of his
annual salary.
No share options were granted under the LTIP 2014 in the year ended 31 July 2019.
60 YouGov Annual Report and Accounts 2019
Governance report
YouGov Long-Term Incentive Plan 2009 (“LTIP 2009”)
From 2009-14, the Executive Directors and senior managers of the Company and its subsidiaries
were eligible to participate in the LTIP 2009.
Under the rules of this plan, participants are conditionally awarded nil cost options to acquire
shares (or conditional stock awards, if US residents). The number of such shares awarded is
normally calculated by reference to a percentage of the participant’s salary and the Company’s
closing share price for an appropriate reference period. The shares subject to the awards are to
be released to the recipients at the end of a holding period, normally three years, subject to their
continued employment. The performance criteria attached to these awards relate to EPS growth
and Total Shareholder Return (“TSR”) versus companies in the AIM Media Index.
The final round of awards granted under the LTIP 2009 vested in 2016. No share options were
granted under the LTIP 2009 in the year ended 31 July 2019.
YouGov Deferred Share Bonus Plan 2014 (“DSBP 2014”)
A Deferred Share Bonus Plan was established in 2014, for senior managers in the Group who did
not participate in the LTIP 2014.
This plan entitles participants to an award of shares which must be retained for a period of two
years and whose vesting is subject to their continued employment during that time. The value
of the award will be linked to the assessment of performance made in determining their annual
bonus or their achievement of specific personal performance objectives for the prior financial
year. The maximum award level will normally be 10% of basic salary, awarded annually.
The final round of awards under DSBP 2014 is due to be granted in November 2019, in respect
of the participants’ personal performance in the financial year to 31 July 2019. The LTIP 2014 and
DSBP 2014 will be succeeded by the LTIP 2019.
99,632 share options were granted under the DSBP 2014 in the year ended 31 July 2019, none of
which were granted to Executive Directors of the Company.
Non-Executive Directors
The remuneration of the Non-Executive Directors is set by the Board as a whole. The Board believes that ownership of the Company’s
shares by the Non-Executive Directors helps to align their interests with those of the Company’s shareholders. Accordingly,
the Company’s policy is that a proportion of each Non-Executive’s fee will be paid in the form of Ordinary Shares in lieu of cash,
save if the Non-Executive Director has an existing substantial shareholding.
During the reporting year, £20,000 of the Chair’s fee and £5,000 of the Non-Executive Directors’ fee were paid in shares;
this amounted to 10,115 shares in total (2018: 10,191 shares) as detailed in the Directors’ remuneration table overleaf:
Fees
Purpose and link to strategy
Supports recruitment and retention of Non-Executive Directors with the required skills
and experience.
Maximum opportunity
Aggregate fees are subject to the limit set out in the Articles of Association.
Performance framework
Not applicable.
61
Governance report Annual Report on Remuneration
A resolution will be put to the shareholders at the AGM to be held on 11 December 2019, inviting them to consider and approve this
report. The remuneration report is unaudited, except where stated. This is not a remuneration report as defined by Company Law.
Directors’ remuneration (audited)
Directors’ remuneration in aggregate for the year ended 31 July 2019 was as follows:
Name
Executive Directors*
Stephan Shakespeare
Alex McIntosh1
Sundip Chahal2
Non-Executive Directors**
Roger Parry
Nick Jones3
Ben Elliot4
Rosemary Leith
Andrea Newman5
Ashley Martin6
Totals
Notes
Salary/Fee
£
263,979
190,242
230,103
100,000
39,958
37,917
44,917
37,917
40,667
Annual
Bonus
£
Pension
Contribution
£
291,961
210,407
254,493
25,253
–
17,824
Benefits-
in-kind
£
41,785i
1,185ii
49,605iii
Total
31 July
2019
£
622,978
401,834
552,025
Total
31 July
2018
£
566,334
244,870
322,297
100,000
100,000
39,958
37,917
44,917
37,917
40,667
42,000
35,000
42,000
19,577
–
1,878,213
1,372,078
* The CEO is paid 15% GBP: 85% AED. The CFO is paid 100% GBP. The COO is paid 100% AED. For the purpose of this report, remuneration paid in AED has been translated into GBP at a rate
of 1 GBP: AED 4.7306, being the average exchange rate during the reporting period. Executive Directors’ received a salary increase of 3.4% with effect from 1 October 2018, approved by
the Remuneration Committee.
** All NEDs are paid 100% GBP. During the year, the NED fees were increased with effect from 1 January 2019, a SID fee was introduced from 1 July 2019, and all NEDs received part of their
fee in shares as outlined overleaf.
1 Alex McIntosh was appointed to the Board on 6 December 2017 and therefore his remuneration disclosure for 2017/18 was pro-rated.
2 Sundip Chahal was appointed to the Board on 6 December 2017 and therefore his remuneration disclosure for 2017/18 was pro-rated.
3 Nick Jones ceased to be Chair of the Audit & Risk Committee on 31 October 2018. Fee for SID role applied from 1 July 2019.
4 Ben Elliot retired from the Board after the end of the reporting year, on 13 September 2019.
5 Andrea Newman was appointed to the Board on 6 December 2017 and therefore her remuneration disclosure for 2017/18 was pro-rated.
6 Ashley Martin was appointed to the Board on 1 September 2018 and appointed as Chair of the Audit & Risk Committee on 1 November 2018.
i The benefit-in-kind received consists of private health care, family travel allowance and living accommodation allowance.
ii The benefit-in-kind received consists of private health care.
iii The benefit-in-kind received relate to expatriate benefits, including family visas, private health care, family travel allowance and dependants’ school fees.
No payments were made to any past Directors and no payments for loss of office were made.
No Executive Director received any remuneration in the year in respect of external non-executive appointments.
62 YouGov Annual Report and Accounts 2019
Governance report It is Company policy is that part of the Non-Executive Directors’ fee are paid in the form of Ordinary Shares in lieu of cash. During the
year, the Non-Executive Directors were paid in shares as detailed below:
Name
Roger Parry
Nick Jones
Ben Elliot
Rosemary Leith
Andrea Newman
Ashley Martin
Title
Non-Executive Chair
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Shares issued
4,495
1,124
1,124
1,124
1,124
1,124
Executive Directors’ share options (audited)
The following unexercised nil cost options over shares were held by Directors:
Plan
Date of grant
Stephan Shakespeare
Earliest
exercise date
Expiry
date
Number
at 31 July 2018
Awarded
in year
Exercised
in year
Number at
31 July 2019
LTIP 2009
7 April 2014
17 October 2016
6 April 2024
LTIP 2014
9 December 2015*
14 October 2019
8 December 2025
LTIP 2014
9 December 2015
14 October 2019
8 December 2025
LTIP 2014
17 November 2016 14 October 2019
16 November 2026
LTIP 2014
12 December 2017 14 October 2019
11 December 2027
Alex McIntosh
LTIP 2009
29 July 2010
15 October 2012
28 July 2020
LTIP 2009
21 July 2011
14 October 2013
20 July 2021
LTIP 2009
30 July 2012
13 October 2014
29 July 2022
LTIP 2009
7 April 2014
17 October 2016
6 April 2024
LTIP 2014
9 December 2015
14 October 2019
8 December 2025
LTIP 2014
17 November 2016 14 October 2019
16 November 2026
LTIP 2014
12 December 2017 14 October 2019
11 December 2027
LTIP 2014
3 April 2018
14 October 2019
11 December 2027
Sundip Chahal
LTIP 2014
9 December 2015
14 October 2019
8 December 2025
LTIP 2014
17 November 2016 14 October 2019
16 November 2026
LTIP 2014
12 December 2017 14 October 2019
11 December 2027
LTIP 2014
3 April 2018
14 October 2019
11 December 2027
* LTIP 2014 CEO’s enhanced award, as described on page 60.
262,185
544,976
575,253
605,529
605,530
2,593,473
14,527
17,500
15,326
11,517
86,486
86,486
86,487
191,291
509,620
120,412
120,412
120,411
204,748
565,983
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
262,185
544,976
575,253
605,529
605,530
2,593,473
14,527
17,500
15,326
11,517
86,486
86,486
86,487
191,291
509,620
120,412
120,412
120,411
204,748
565,983
63
Governance report Annual Report on Remuneration Report continued
Statement of directors’ shareholding and share interests
Executive Directors
Stephan Shakespeare
Alex McIntosh
Sundip Chahal
Non-Executive Directors
Roger Parry
Nick Jones
Ben Elliot
Rosemary Leith
Andrea Newman
Ashley Martin
Unvested share
options¹
Vested but
unexercised share
options¹
Total interest
in share
options¹
Ordinary Shares
beneficially
owned
Total Interest
in Shares
2,331,288
450,750
565,983
–
–
–
–
–
–
262,185
58,870
–
–
–
–
–
–
–
2,593,473
7,417,556
10,011,029
509,620
565,983
–
–
–
–
–
–
8,978
311,008
106,956
22,968
22,968
11,819
2,398
6,741
518,598
876,991
106,956
22,968
22,968
11,819
2,398
6,741
¹ All share options subject to vesting performance conditions.
Total Shareholder Return
The chart below compares the value of £100 invested in YouGov plc shares (including reinvested dividends) on 1 August 2014,
Total shareholder return
compared to the equivalent investment in the FTSE AIM All Share Index, over the last five financial years.
600
500
400
300
200
100
0
August
2014
August
2015
August
2016
August
2017
August
2018
July
2019
YouGov TSR FTSE AIM All Share TSR
Source: Numis Securities
Directors’ service contracts
The table below summarises key details in respect of each Director’s service contract.
Executive Directors
Stephan Shakespeare
Alex McIntosh
Sundip Chahal
Title
Chief Executive Officer
Chief Financial Officer
Chief Operating Officer
Contract date
18 April 2005
21 March 2018
21 March 2018
Notice period
12 months
6 months
6 months
Non-Executive Directors
Title
Date of initial appointment
Notice period
Roger Parry
Nick Jones
Ben Elliot2
Rosemary Leith
Andrea Newman
Ashley Martin
Non-Executive Chair
6 February 20071
Non-Executive Director
2 June 2009
Non-Executive Director
2 August 2010
Non-Executive Director
1 February 2015
Non-Executive Director
6 December 2017
Non-Executive Director
1 September 2018
30 days
30 days
30 days
30 days
30 days
30 days
¹ Roger Parry’s appointment was effective from 15 January 2007 as confirmed in the letter of appointment dated 6 February 2007.
² Ben Elliot retired as Director on 13 September 2019.
64 YouGov Annual Report and Accounts 2019
Governance report Environmental, Social & Governance Report
The Board recognises the importance of environmental, social and governance factors when measuring the sustainability and ethical
impact of the Company. We want YouGov to be recognised as an organisation that is transparent and ethical in all our dealings, as well
as making a positive contribution to the environment and communities in which we operate. We are mindful of the Group’s impact
on all our stakeholders including employees, panellists, clients, suppliers, shareholders, local communities, wider society and the
environment. For more information on our stakeholders, see page 8.
Community
YouGov recognises the importance of respecting and supporting the communities in which it operates, and of making a positive
contribution to society through its work. A key part of our new five-year plan is the dissemination of public data. It is an ambition for
YouGov data to be used by millions of people as a daily public resource. This is demonstrated by our new YouGov Ratings tool which
is available on our consumer website at yougov.co.uk/ratings.
In line with our commitment to diversity and inclusion, YouGov is delighted to be the principal sponsor of the Market Research
Society (“MRS”) Pride 2020. Building a relationship of trust and respect with people is core to our daily work of representing the entire
population, and it is fundamental to our relationships within the professional community as colleagues. For more information on our
involvement in MRS Pride to date, see overleaf.
We appreciate the important of contributing both our time and money to charities and it is our intention to formalise this process in
the coming year. Our employees globally have supported a number of charities and community initiatives during the year.
Suppliers
YouGov aims to pay all its suppliers within a reasonable period of their invoices being received and approved, provided that the
supplier has performed in accordance with the relevant terms and conditions. Work has taken place during 2018/19 to assess our
supplier on boarding process. We are working to formalise this process using technology and additional resource on the Governance
team. We expect to be able to report in more detail in our 2019/20 report. For the financial year ended 31 July 2019, the Company
is not required to report on payment practices, policies and performance under Section 3 of Small Business, Enterprise and
Employment Act 2015.
Privacy and Security
YouGov is in the business of online research and data analytics. The security and privacy of our data is paramount to our business.
YouGov expects employees, and those who we work with, to exercise high rigour when it comes to safeguarding the data of all
stakeholders, including personal and client confidential data.
To reinforce our commitment to the privacy and security of data and information, our Governance team includes a Group Data
Protection Officer and Group Information Security Manager. These roles work alongside Group Head of Governance, Group Head
of IT, the Legal team and the Corporate Secretariat to ensure that that the Group’s policies and procedures on privacy and security
are to a high standard. The role of the Group Information Security Manager is split between the Governance and IT teams to ensure
close collaboration between the two business functions. We have implemented compulsory data protection and cyber security
e-learning programs for all employees in the Group. We monitor the results and completion rates of this training. During 2018/19,
we implemented a training policy which ensures that disciplinary action can be taken if an employee fails to complete their required
training, supported by our HR team and the Chief Operating Officer.
To prepare for the EU General Data Protection Regulation (“GDPR”) which came into force in May 2018, YouGov established a cross-
functional GDPR Compliance team which led an internal compliance programme endorsed by the Board. As part of this programme,
the Group’s Data Protection and IT Security policies were refreshed, in compliance with GDPR as well as other relevant legislation.
Our privacy and security teams continue to keep our policies under review, to ensure compliance with new legislation.
There have been seven meetings of the Data Protection & Security Committee and 11 meetings of the Information Security
Committee during the year. These committees consist of members from senior management, including the Chief Operating Officer.
Both committees include representatives from around the business such as IT, Governance, Legal and Panel. These committees meet
on a regular basis throughout the year and are formally minuted.
We continue to refresh training, policies and procedures regularly, to keep ahead of the evolving global data protection and security
landscape. You can see more information about approach to Privacy and Security on our new corporate website, at corporate.yougov.
com/compliance/privacy-security.
65
Governance report Environmental, Social & Governance Report continued
Diversity in the workplace
YouGov is committed to providing a working environment in which its employees are able to realise their potential and to contribute to
business success irrespective of gender, marital status, ethnic origin, nationality, religion, disability, sexual orientation or age. YouGov UK
are pleased to be a Diversity Champion with Stonewall and committed to the Disability Confident employment scheme.
BeYou at YouGov
YouGov’s internal diversity network, BeYou, was founded in 2018 and aims to encourage all people at work to be
themselves. BeYou is an intersectional collective space for all under-represented groups to connect and support
one another.
BeYou
A number of BeYou’s UK-based members are on the MRS Pride steering committee. MRS Pride is a network
uniting LGBTQ+ talent across the UK market research sector, and is at the forefront of establishing best practice guides for conducting
inclusive research. Such guides, as well as contributions from BeYou network members, help to inform YouGov’s approach to
surveying minority groups and to ensure the inclusivity of our research. YouGov is proud to be a principal sponsor of MRS Pride 2020.
In the reporting year, the BeYou network has:
• Arranged a panel event to celebrate International Women’s Day, featuring senior female employees in the Company who spoke
about their experiences of being a woman in research;
• Published a monthly newsletter featuring industry news, best practice advice on inclusive research, local events, and links to media
on diversity research;
• Attended the launch event for MRS Pride and maintained an ongoing steering influence with the industry network; and
• Raised money for “The Outside Project”, a charity for homeless LGBTQ+ youth which is based locally to YouGov’s London office.
One of BeYou’s aims for the coming year is to maintain the Company’s relationship with charities and arrange for representatives to
speak to YouGov staff on a range of issues.
Gender Pay Gap Reporting
YouGov published its first UK gender pay gap report in 2018 on a voluntary basis. We were pleased to publish our
second report in 2019, which we feel reflects a more evolved approach to tackling the gender pay gap in
our business.
Prior to publication of our UK gender pay gap report in 2019, we held a “Minding the Gap” event at our London office. This half-day
event was led by a cross-functional team from HR and Governance, and consisted of workshops and presentations from senior
women in the Company (including Rosemary Leith, Chair of the Remuneration Committee) about the experience of being a woman
in YouGov. Participation in “Minding the Gap” was open to any interested UK-based employees, regardless of gender identity.
The purpose of the event was to engage with employees and understand their views on on the pay gap and their thoughts on why it
exists at YouGov.
From this event, we have developed an action plan which the business is now working to implement. While it is recognised that
the gender pay gap is not one that can easily be reduced, all actions are expected to improve the experience of women in YouGov
globally and also to encourage broader diversity in the Group.
The Board’s Remuneration Committee oversees the assessment and reporting of the Company’s gender pay gap information and
reviews progress against the action plan.
To view our UK Gender Pay Gap Information Reports, visit: corporate.yougov.com/governance/esg
Engagement with panellists
The YouGov Global Panel is our largest stakeholder group, at over 8 million individuals globally, and is essential to our success.
For information on how our stakeholders fit into our business model, see pages 12 and 13. Engaged, diverse and opinionated panellists
are key to our business. Keeping panellists engaged is central to what we do, and we have a global Panel team dedicated to doing
just that.
We work to continually improve the panellist experience, developing new technology and support, the panellist experience, such as:
• Investing in new technology to ensure that when a panellist cashes in the points earned for sharing their opinion, they receive their
reward within hours; and
• Developing a highly effective system of alerting panellists when their opinion “becomes the news”. We are fortunate that our
research is widely covered in international media, which allows us to tell panellists that they are contributing to the global debate on
issues of importance.
66 YouGov Annual Report and Accounts 2019
Governance report
Employee involvement
Our employees are an integral part of our business. We recognise the benefits of keeping employees informed on matters which
affect them and the wider business, such as financial factors impacting the performance of the Company and developments in the
industry. Engaged and informed employees are productive employees.
We have in place global and regional policies which outline our expectations for employee behaviour, and what our employees can
expect to receive from us as their employer.
During 2018/19, we ran a global all-employee engagement survey and were delighted to achieve a response rate of 86%. Using the
survey results, we created an action plan to improve the employee experience at YouGov. The action plan includes both short-term
and long-term plans including:
Area
Short-Term Plans
Long-Term Plan
Reward & Recognition
Hold focus groups to deep dive into employee
views on the Group’s reward and benefit structure.
Make improvements in organisational design and
Learning & Development offerings to improve and
support career path planning.
Learning & Development Roll-out of the UK’s YOUniversity program globally. Explore a global mentoring program.
Internal Communications Run regular global Town Halls with the
Launch a global virtual learning platform.
Senior Leaders.
Details of how employees are kept engaged in the financial and economic factors of the business are outlined in the Directors’ Report
on page 68.
Employee wellbeing
YouGov is committed to ensuring that our employees have a strong sense of support and wellbeing at work. It is our mission to
achieve a valued and productive workforce by implementing a culture of care, increasing employees’ skills and building the outlook
required to deal with the pressures of the modern workplace. As we recognise that many individuals have various responsibilities at
home, or complicated commutes, we offer remote working as standard in many roles, as long as it does not affect business needs.
This often enables employees to achieve a better work/life balance than the traditional 9-to-5 office hours, which in turn increases
productivity. In London, our newly re-fitted office space has been designed to encourage less traditional ways of working.
Health and safety
YouGov takes all reasonable and practicable steps to safeguard the health, safety and welfare of its employees. We recognise
our responsibility for the health and safety of those who may be affected by our activities, and take care to operate in a safe and
secure manner.
Ethical behaviour
YouGov expects its employees to exercise high professional, ethical and moral standards at all times while representing the Group.
The Group maintains an awareness of human rights issues and observance of pertinent law and we reflect this in our suite of policies
which includes our Group Whistleblowing Policy and Group Anti-Bribery Policy.
Our statement on Modern Slavery in our supply chain is available at: corporate.yougov.com/modernslavery.
Environment
YouGov recognises that the prudent use of resources delivers both environmental and financial benefits. We aim to promote the
maintenance of a healthy environment through responsible and sustainable consumption. Our operations are predominantly office-
based and here we try to minimise our impacts where practicable.
In the UK, where our head office is located, we are pleased to have participated in Environment Savings Opportunities Scheme
(“ESOS”) scheme this year. Our report is expected to be published by December 2019 and we plan to report on any opportunities for
improvement identified by the ESOS report in our 2019/20 Annual Report and Accounts.
As a business, we undertake to:
• store and dispose of waste responsibly, and recycle where possible;
• use paper that originates from reputable managed forests;
• comply with the relevant packaging and waste regulations; and
• minimise air travel by utilising conference and video calling technology.
67
Governance report Directors’ Report
for the year ended 31 July 2019
The Directors present their report and the audited consolidated financial statements for the year ended 31 July 2019.
Operating results
The financial and operational performance of the Group is discussed on the inside front cover.
Financial summary
The financial summary is discussed on pages 34 to 38 of the Chief Financial Officer’s report.
Key performance indicators
Performance measured against key performance indicators is discussed on page 34.
Principal risks and uncertainties
The principal risks and uncertainties are discussed on pages 39 to 41.
Financial risks
The financial risks facing the Group are discussed in more detail in Note 20 on pages 115 to 117.
Dividends
A final dividend of 3.0p per share in respect of the year ended 31 July 2018 was paid on 17 December 2018, amounting to a total
payment of £3,167,481. A dividend of 4.0p per share in respect of the year ended 31 July 2019, amounting to a total payment of
£4,229,240 will be proposed at the Annual General Meeting on 11 December 2019.
Prospects
The Board’s assessment of the Company’s position and prospects are set out in the Chair’s statement on pages 6 and 7, the Chief
Executive Officer’s review on pages 32 and 33 and the Chief Financial Officer’s report on pages 34 to 38.
Future developments
Future developments are discussed in more detail in the Chief Executive Officer’s review on pages 32 and 33.
Events after the reporting date
On 30 August 2019, we announced that Ben Elliot had notified the Company of his retirement from the Board with effect from
13 September 2019.
On 27 September 2019, we announced that Nick Jones would not submit himself for re-election at the 2019 AGM and would therefore
retire from the Board on 11 December 2019, and that Rosemary Leith would succeed him as Senior Independent Director upon
his retirement.
Directors
The Directors of YouGov plc who were in office during the year and at any point up to the date of signing this report were:
Name
Title
Stephan Shakespeare
Chief Executive Officer
Chief Financial Officer
Chief Operating Officer
Non-Executive Chair
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Role
Executive
Executive
Executive
Non-Executive
Non-Executive
Non-Executive
Non-Executive
Non-Executive
Appointed 6 December 2017
Appointed 6 December 2017
Retired 13 September 2019
Appointed 6 December 2017
Non-Executive Director
Non-Executive
Appointed 1 September 2018
Alex McIntosh
Sundip Chahal
Roger Parry
Nick Jones
Ben Elliot
Rosemary Leith
Andrea Newman
Ashley Martin
Treasury shares
The total number of shares held in treasury at 31 July 2019 was nil (2018: nil). The YouGov Employee Benefit Trust holds shares to
facilitate the settlement of awards under employee share schemes. These are not considered Treasury Shares under company law.
68 YouGov Annual Report and Accounts 2019
Governance report Authority to purchase the Company’s shares
At the AGM on 12 December 2018, shareholders authorised the Company to make one or more market purchases of up to 10,549,181
of the Company’s Ordinary Shares to be held in treasury at a price between 2.0p (exclusive of expenses) and 105% of the average
closing middle market price of a share for the five business days immediately preceding the date on which the share is purchased.
No purchases were made during the year with the exception of purchases made by the Employee Benefit Trust described below.
The Directors propose to renew this authority at the 2019 AGM.
Employee Benefit Trust
In February 2019, we announced that we had appointed Sanne Fiduciary Services Limited (“Sanne”) as Trustee of the YouGov
Employee Benefit Trust (the “Trust”) to commence a programme of share purchases. The purpose of these purchases is to facilitate
the settlement of awards under the Company’s current employee share schemes, namely the Long-Term Incentive Plan 2014 and the
Deferred Share Bonus Plan 2014. At 31 July 2019, the YouGov Employee Benefit Trust held 755,000 YouGov plc Ordinary Shares.
Directors’ interests in shares
The interests of the Directors in the shares of the Company as at 31 July 2019 and 31 July 2018 were as follows:
As at 31 July 2019
Number of Shares
As at 31 July 2018
Number of Shares
Stephan Shakespeare 1
Alex McIntosh
Sundip Chahal
Roger Parry
Nick Jones
Ben Elliot2
Rosemary Leith
Andrea Newman
Ashley Martin3
7,417,556
8,978
311,008
106,956
22,968
22,968
11,819
2,398
6,741
7,417,556
8,918
293,164
94,961
21,844
21,844
10,695
1,274
–
1 Includes 559,404 Ordinary Shares held by Stephan Shakespeare’s wife, Rosamund Shakespeare.
2 Retired from the Board on 13 September 2019, after the reporting year ended.
3 Appointed to the Board on 1 September 2018.
There have been no changes to Directors’ interests in shares since the financial year-end. The Directors’ interests in share options are
detailed in the Annual Report on Remuneration on pages 63 and 64.
Major Shareholders
At 31 July 2019, the Company was aware of the following interests in 3% or more of the nominal value of the Company’s shares:
Shareholder
Liontrust Asset Management
BlackRock
Octopus Investments
Aberdeen Standard Investments
T Rowe Price Global Investments
Stephan & Rosamund Shakespeare1
Investec Wealth & Investment
Kabouter Management
Charles Stanley
Bailie Gifford
Total
Shares
17,324,925
12,192,247
9,932,979
9,144,971
7,675,123
7,417,556
6,318,017
5,531,090
4,693,751
3,973,957
84,204,616
% Issued
Share Capital
16.39%
11.53%
9.40%
8.65%
7.26%
7.02%
5.98%
5.23%
4.44%
3.76%
79.66%
1 Includes 559,404 Ordinary Shares held by Stephan Shakespeare’s wife, Rosamund Shakespeare.
When calculating their percentage holdings in the Company, shareholders should use the issued share capital figure minus any
shares held by the YouGov Employee Benefit Trust as the denominator for the calculations by which they will determine if they are
required to notify their interest in, or a change to their interest in, the Group under the Financial Conduct Authority’s Disclosure and
Transparency Rules. Shareholders are advised to refer to the Company’s latest “Total Voting Rights” announcement which is available
on the Regulatory News Service.
69
Governance report Directors’ Report
for the year ended 31 July 2019 continued
Research and development
The Group’s research and development activities centre on the development of bespoke software solutions to support and advance
our online capabilities. No research and development costs were charged to the Consolidated Income Statement in 2019 or 2018.
In 2019, £4.8m (2018: £3.9m) was capitalised and included within intangible fixed assets. Capitalised development is amortised
to the income statement over a period of three years. The amortisation charge in respect of capitalised development was £4.6m
(2018: £3.5m).
Charitable and political contributions
Donations to charitable organisations amounted to £95,000 (2018: £97,000). This included an annual subscription of £93,000
(2018: £78,000) in respect of the YouGov-Cambridge Programme, an academic partnership established with Cambridge University’s
Department of Politics and International Studies. The Company does not make political donations.
Employee involvement and communication
The Board firmly believes in the importance of keeping employees informed and engaged in the financial and economic factors
affecting the Group’s performance. Information about the Group’s performance against our five-year plan is shared with employees
through regular management global town halls, all-employee emails and our intranet. Employees are encouraged to own shares
in the Company, and many employees are shareholders and/or hold options under the Group’s share option schemes as part of their
compensation packages. For more information about how we involve, engage and communicate with employees, see pages 66
and 67.
Insurance
During the financial year, the Group has maintained Directors’ and Officers’ liability insurance. In accordance with Section 234 of the
Companies Act 2006, qualifying third-party indemnity provisions are in place for the Directors and Company Secretary in respect of
liabilities incurred because of their office, to the extent permitted by law. This insurance was in force at the date of signing of the annual
report and financial statements.
Going concern
The Group meets its day-to-day working capital requirements through its own cash resources. The nature of the Group’s business
means that there is some uncertainty as to the future level of demand for the Group’s products. However, the Group’s forecasts and
projections, taking account of reasonably possible changes in trading performance, show that the Group should be able to continue
operating without bank finance. After making enquiries, the Directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the near future including the 12 months from the date of this report. The Group
therefore continues to adopt the going concern basis in preparing its consolidated financial statements.
Fair, balanced and understandable statement
Each of the Directors considers that the Annual Report and Accounts taken as a whole is fair, balanced and understandable and
provides the information necessary for shareholders to assess the Company’s performance, business model and strategy.
Independent auditors
In accordance with Section 418(2) of the Companies Act 2006, each of the Company’s Directors in office as at the date of this report
confirms that:
• So far as the Directors are aware, there is no relevant audit information of which the Company’s auditors are unaware; and
• All steps that ought to have been taken as a Director in order to make himself aware of any relevant audit information and to
establish that the Company’s auditors are aware of that information.
The Group external auditors are PricewaterhouseCoopers LLP. A resolution to reappoint PricewaterhouseCoopers LLP as auditors to
the Company will be proposed at the forthcoming Annual General Meeting.
Annual General Meeting
The Annual General Meeting of the Company will be held on 11 December 2019 at our offices at 50 Featherstone Street, London EC1Y 8RT.
Tilly Heald
Company Secretary
On behalf of the Board
8 October 2019
70 YouGov Annual Report and Accounts 2019
Governance report Directors’ Responsibilities Statement
Statement of Directors’ responsibilities in respect of the financial statements
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law
and regulation.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared
the Group financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European
Union and parent company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted
by the European Union. Under company law the Directors must not approve the financial statements unless they are satisfied that
they give a true and fair view of the state of affairs of the Group and parent company and of the profit or loss of the Group and parent
company for that period. In preparing the financial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• state whether applicable IFRSs as adopted by the European Union have been followed for the Group financial statements and IFRSs
as adopted by the European Union have been followed for the Company financial statements, subject to any material departures
disclosed and explained in the financial statements;
• make judgements and accounting estimates that are reasonable and prudent; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and parent
company will continue in business.
The Directors are also responsible for safeguarding the assets of the Group and parent company and hence for taking reasonable
steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group and parent
company transactions and disclose with reasonable accuracy at any time the financial position of the Group and parent company and
enable them to ensure that the financial statements comply with the Companies Act 2006.
The Directors are responsible for the maintenance and integrity of the parent company’s website. Legislation in the United Kingdom
governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Director’s confirmations
The Directors consider that the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides
the information necessary for shareholders to assess the Group and parent company’s position and performance, business model
and strategy.
Alex McIntosh
Chief Financial Officer
On behalf of the Board
8 October 2019
71
Governance report Independent auditors’ report to the members of YouGov plc
Report on the audit of the Group financial statements
Opinion
In our opinion, YouGov plc’s Group financial statements (the “financial statements”):
• give a true and fair view of the state of the Group’s affairs as at 31 July 2019 and of its profit and cash flows for the year then ended;
• have been properly prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European
Union; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report and Accounts 2019 (the “Annual Report”), which
comprise: the Consolidated Statement of Financial Position as at 31 July 2019; the Consolidated Income Statement and Consolidated
Statement of Comprehensive Income, the Consolidated Statement of Changes in Equity and the Consolidated Statement of Cash
Flows for the year then ended; the Principal Accounting Policies; and the notes to the financial statements.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Our responsibilities under ISAs (UK) are further described in the auditors’ responsibilities for the audit of the financial statements section
of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
Our audit approach
Overview
Materiality
• Overall Group materiality: £950,000, based on 5% of profit before tax. This is a change from our 2018 audit
where our materiality (£690,000) was based on 3.5% of adjusted operating profit (as presented on the face
of the income statement). We now consider profit before tax to be the most appropriate benchmark used
in assessing the performance of the Group.
Audit scope
• The focus of the Group team’s work was on the UK and US operations. The Middle East operation was also
in full scope and we received reporting on the complete financial information from our Middle East team.
In addition, specified audit procedures were performed by the Group team on the German, Nordic and
Asia Pacific operations.
Key audit
matters
• Our testing accounted for 95% of profit before tax.
• Capitalisation of internally generated intangible assets.
• Carrying value of goodwill and intangible assets.
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.
In particular, we looked at where the Directors made subjective judgements, for example in respect of significant accounting estimates
that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits we also addressed
the risk of management override of internal controls, including evaluating whether there was evidence of bias by the Directors that
represented a risk of material misstatement due to fraud.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud)
identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the
audit; and directing the efforts of the engagement team. These matters, and any comments we make on the results of our procedures
thereon, were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters. This is not a complete list of all risks identified by our audit.
72 YouGov Annual Report and Accounts 2019
Governance report Key audit matter
How our audit addressed the key audit matter
Capitalisation of internally generated
intangible assets
We have gained an understanding of the controls and review process over the
capitalisation of intangibles.
Refer to Principal accounting policies of the
consolidated financial statements and Note 11.
We focussed on this area because of the significant
level of judgement by the Directors involved in
determining whether internal time and external
costs incurred in respect of internally generated
intangible assets satisfy the requirements of
the financial reporting framework (International
Accounting Standard 38 Intangible assets, “IAS 38”)
to be capitalised. In particular we have focussed on
whether they are separable from the other assets
of the business and will provide future economic
benefits for the Group.
Impairment of goodwill and indefinite life
intangible assets
As stated in Note 10 to the consolidated financial
statements, management has estimated the
recoverable amount for each Cash-Generating Unit
(“CGU”) using a value-in-use model by projecting
cash flows for the next five years together with a
terminal value using a perpetuity growth rate.
The total amount of goodwill and indefinite life
intangible assets on the Group balance sheet as
at 31 July 2019 is £65.6m.
The Directors’ annual impairment assessment
took into consideration their budget and five year
plan and a level of sensitivity analysis, concluding
that there was headroom over the carrying value.
The key assumptions in this assessment included
forecast future revenue growth, the discount rate,
the perpetuity growth rate, cost growth and cash
conversion rates.
Given the estimation inherent in the use of forecasts,
there is a risk that the goodwill and indefinite life
intangible assets balance is not supported by the
future cash flows of the relevant CGUs.
We considered the technical feasibility and revenue generation of each
project with relevant personnel and obtained satisfactory explanations for
the assumptions made. In order to test the future economic benefits of these
products, we have tested the reasonableness of management’s revenue and
cash flow forecasts.
We also tested a sample of internal costs to timesheets and supporting payroll
records and verified the allocation of employee costs to the correct projects and
external costs to invoices.
We tested that for a sample of projects costs capitalised they satisfied the
recognition criteria in IAS 38. We have assessed whether any existing assets are
impaired as a result of new development in the year.
Based on the audit procedures performed, we are satisfied that amounts
capitalised appropriately reflect the requirements of IAS 38.
Our audit procedures comprised the following:
• Tested that the methodology built into the model produced by management
to assess impairment addressed the requirements of the financial reporting
framework, and re-performed the calculations;
• Evaluated the accuracy of prior years’ forecasts in light of past performance
and actual results achieved to assess the quality and reliability of
management’s forecasts for each CGU;
• Challenged management over the reasonableness of the key assumptions
inherent in the model;
• Agreed information, in particular forecast financial information, to budgets and
forecasts approved by senior management; and
• Used a valuations expert to assess the appropriateness of the discount
rate assumption.
We also performed sensitivity analysis around the key drivers of the cash flow
forecasts, being:
• the revenue growth rate for the first five years;
• perpetuity growth rate;
• the cost growth rate for the first five years; and
• the discount rate.
Having ascertained the extent of change in those assumptions that either
individually or collectively would be required for the goodwill to be impaired
for the CGU, we considered the likelihood of such a movement in those key
assumptions arising.
We did not identify any issues with management’s key assumptions based on
our evaluation of supporting evidence, together with management’s and our
own sensitivity analysis performed.
We also considered the appropriateness of the related disclosures in Note 10 to
the financial statements. We found that the disclosures appropriately describe
the key judgements and sensitivities in the Directors’ assessment.
73
Governance report Independent auditors’ report to the members of YouGov plc
Report on the audit of the Group financial statements continued
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements
as a whole, taking into account the structure of the Group, the accounting processes and controls, and the industry in which
it operates.
The Group reports its operating results and financial position in eight territories: the UK, USA, Germany, Nordics, Middle East, Asia
Pacific, France and Mainland Europe. The Group financial statements are a consolidation of the Group’s operating businesses and
central functions. The Group’s operating reporting units vary significantly in size, the most significant being the UK, US and the Middle
East. The Group team performed the audits of the UK, USA and the consolidation. We also issued instructions to our Middle East team,
which included guidance on the areas of focus for the audit. Our Middle East team performed their respective audit, in accordance
with our instructions, over the complete financial information of the Middle East and we had regular communication with them.
We then received reporting on the results of their work. In addition, specified audit procedures were performed by the Group team for
the German, Nordic and Asia Pacific operations. The components where we performed an audit of their complete financial information
accounted for 95% of the Group’s profit before tax.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These,
together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our
audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both
individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall Group materiality
£950,000 (2018: £690,000).
How we determined it
5% of consolidated profit before tax (as presented on the face of the Consolidated Income
Statement) and rounded to the nearest £50,000.
Rationale for benchmark applied We believe that profit before tax is the primary measure by which shareholders assess the
performance of the Group, and is a generally accepted auditing benchmark.
In the prior period, adjusted operating profit was used as the benchmark for assessing
materiality. In the current year financial statements management has changed how this metric
is calculated and we now believe that profit before tax provides a more appropriate measure
for assessing the performance of the Group.
For each component in the scope of our Group audit, we allocated a materiality that is less than our overall Group materiality.
The range of materiality allocated across components was between £224,000 and £855,000. Certain components were audited
to a local statutory audit materiality that was also less than our overall Group materiality.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above £48,000
(2018: £34,500) as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
ISAs (UK) require us to report to you when:
• the Directors’ use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
• the Directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt
about the Group’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from
the date when the financial statements are authorised for issue.
We have nothing to report in respect of the above matters.
However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Group’s ability to
continue as a going concern. For example, the terms on which the United Kingdom may withdraw from the European Union are not
clear, and it is difficult to evaluate all of the potential implications on the Group’s trade, customers, suppliers and the wider economy.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report
thereon. The Directors are responsible for the other information. Our opinion on the financial statements does not cover the other
information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report,
any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit,
or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we
are required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material
74 YouGov Annual Report and Accounts 2019
Governance report misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact. We have nothing to report based on these responsibilities.
With respect to the Strategic Report and Directors’ Report, we also considered whether the disclosures required by the UK Companies
Act 2006 have been included.
Based on the responsibilities described above and our work undertaken in the course of the audit, ISAs (UK) require us also to report
certain opinions and matters as described below.
Strategic Report and Directors’ Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic Report and Directors’
Report for the year ended 31 July 2019 is consistent with the financial statements and has been prepared in accordance with
applicable legal requirements.
In light of the knowledge and understanding of the Group and its environment obtained in the course of the audit, we did not identify
any material misstatements in the Strategic Report and Directors’ Report.
Responsibilities for the financial statements and the audit
Responsibilities of the Directors for the financial statements
As explained more fully in the Directors’ Responsibilities Statement set out on page 71, the Directors are responsible for the preparation
of the financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view.
The Directors are also responsible for such internal control as they determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s ability to continue as a going concern,
disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either
intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a
high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: frc.org.uk/
auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the parent company’s members as a body in accordance with
Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume
responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not received all the information and explanations we require for our audit; or
• certain disclosures of Directors’ remuneration specified by law are not made.
We have no exceptions to report arising from this responsibility.
Other matter
We have reported separately on the parent company financial statements of YouGov plc for the year ended 31 July 2019.
Brian Henderson (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
8 October 2019
75
Governance report In this section
78 Consolidated Income Statement
Consolidated Statement of
79
Com prehensive Income
80 Consolidated Statement of Financial Position
81 Consolidated Statement of Changes in Equity
82 Consolidated Statement of Cash Flows
83
Principal Accounting Policies of the Consolidated
financial statements
94 Notes to the Consolidated financial statements
122 Independent auditors’ report to the members of
YouGov plc on the audit of the Parent Company
financial statements
125 Parent Company Statement of Financial Position
126 Parent Company Statement of Changes in Equity
127 Parent Company Statement of Cash Flows
128 Notes to the Parent Company
financial statements
Financial
statements
76 YouGov Annual Report and Accounts 2019
Delivering
Every day YouGov is delivering
data and insights – be it to
commercial clients, or to the
general public as part of our
Public Data strategy.
Financial
statements
77
Financial statements Consolidated Income Statement
for the year ended 31 July 2019
Revenue
Cost of sales
Gross profit
Operating expenses
Operating profit
Separately reported items
Adjusted operating profit*
Finance income
Finance costs
Share of post-tax (loss)/profit of associates
Profit before taxation
Taxation
Profit after taxation
Attributable to:
– Owners of the parent
– Non-controlling interests
Earnings per share
Basic earnings per share attributable to owners of the parent
Diluted earnings per share attributable to owners of the parent
Note
1
1
4
1
5
5
13
1
6
1
8
8
2019
£’000
136,487
(24,206)
112,281
(92,464)
19,817
(1,529)
18,288
255
(564)
(52)
19,456
(5,085)
14,371
14,970
(599)
14,371
14.2p
13.2p
2018
£’000
116,559
(21,495)
95,064
(83,306)
11,758
892
12,650
151
(202)
66
11,773
(3,615)
8,158
8,158
–
8,158
7.7p
7.3p
* In the prior year financial statements adjusted operating profit was before both amortisation and separately reported items, in the current year this has been amended to exclude
only separately reported items and the prior year comparative has been restated.
All operations are continuing.
The notes and accounting policies on pages 83 to 121 form an integral part of these consolidated financial statements.
78 YouGov Annual Report and Accounts 2019
Financial statements Consolidated Statement of Comprehensive Income
for the year ended 31 July 2019
Profit for the year
Other comprehensive income
Items that may be subsequently reclassified to profit or loss
Currency translation differences
Other comprehensive income for the year
Total comprehensive income for the year
Attributable to:
– Owners of the parent
– Non-controlling interests
Total comprehensive income for the year
2019
£’000
14,371
4,987
4,987
19,358
19,957
(599)
19,358
2018
£’000
8,158
142
142
8,300
8,300
–
8,300
Items in the statement above are disclosed net of tax. The tax relating to each component of other comprehensive income is
disclosed in Note 19.
The notes and accounting policies on pages 83 to 121 form an integral part of these consolidated financial statements.
79
Financial statements Consolidated Statement of Financial Position
as at 31 July 2019
Assets
Non-current assets
Goodwill
Other intangible assets
Property, plant and equipment
Investments in associates
Deferred tax assets
Total non-current assets
Current assets
Trade and other receivables
Current tax assets
Cash and cash equivalents (excluding bank overdrafts)
Total current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Current tax liabilities
Contingent consideration
Provisions
Total current liabilities
Net current assets
Non-current liabilities
Contingent consideration
Provisions
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued share capital
Share premium
Treasury reserve
Merger reserve
Foreign exchange reserve
Retained earnings
Total equity attributable to owners of the parent
Non-controlling interests in equity
Total equity
Note
2019
£’000
2018
£’000
10
11
12
13
19
14
15
16
15
17
18
17
18
19
21
21
65,637
16,737
4,424
–
11,208
98,006
33,726
930
37,925
72,581
170,587
52,060
13,297
3,037
191
9,434
78,019
34,672
1,442
30,621
66,735
144,754
40,041
34,998
740
2,791
4,931
48,503
24,078
7,279
4,623
2,158
14,060
62,563
108,024
211
31,345
(3,738)
9,239
20,018
51,507
108,582
(558)
108,024
1,247
1,409
3,791
41,445
25,290
5,110
4,000
2,128
11,238
52,683
92,071
211
31,300
–
9,239
15,031
36,290
92,071
–
92,071
The notes and accounting policies on pages 83 to 121 form an integral part of these consolidated financial statements. The financial
statements on pages 78 to 128 were authorised for issue by the Board of Directors on 8 October 2019 and signed on its behalf by:
Alex McIntosh
Chief Financial Officer
YouGov plc
Registered No. 03607311
80 YouGov Annual Report and Accounts 2019
Financial statements Consolidated Statement of Changes in Equity
for the year ended 31 July 2019
Attributable to equity holders of the Company
Issued
share
capital
£’000
Note
Share
premium
£’000
Treasury
reserve
£’000
Merger
reserve
£’000
Foreign
exchange
reserve
£’000
Retained
earnings
£’000
Equity
attributable
to owners of
the parent
£’000
Non-
controlling
interest in
equity
£’000
Balance at 1 August 2017
211
31,261
Exchange differences
on translation
Net gain recognised directly
in equity
Profit for the year
Total comprehensive
income for the year
Issue of shares
Dividends paid
Share-based payments
Tax in relation to share-
based payments
Total transactions with
owners recognised directly
in equity
Balance at 31 July 2018 as
originally presented
Change in accounting policy
(Note 27)
Restated total equity at
1 August 2018
Exchange differences on
translation
Net gain recognised directly
in equity
Profit/(Loss) for the year
Total comprehensive
income/(expense) for
the year
Issue of shares
Acquisition of treasury shares
Dividends paid
Share-based payments
Tax in relation to share-
based payments
Total transactions with
owners recognised directly
in equity
21
7
22
19
21
21
7
22
19
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(3,738)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
39
–
–
–
39
211
31,300
–
–
211
31,300
–
–
–
–
45
–
–
–
–
–
–
–
–
–
–
–
–
–
–
9,239
14,889
24,873
80,473
–
–
–
–
–
–
–
–
–
142
142
–
–
–
8,158
142
142
8,158
142
8,158
8,300
–
–
–
–
–
39
(2,106)
(2,106)
3,571
3,571
1,794
1,794
–
3,259
3,298
9,239
15,031
36,290
92,071
–
–
(741)
(741)
9,239
15,031
35,549
91,330
4,987
4,987
–
–
4,987
4,987
Total
equity
£’000
80,473
142
142
8,158
8,300
39
(2,106)
3,571
1,794
3,298
92,071
(741)
91,330
4,987
4,987
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
14,970
14,970
(599)
14,371
4,987
14,970
19,957
(599)
19,358
45
41
86
–
–
(3,167)
2,401
(3,738)
(3,167)
2,401
1,754
1,754
–
–
–
–
(3,738)
(3,167)
2,401
1,754
–
–
–
–
–
–
45
(3,738)
988
(2,705)
41
(2,664)
Balance at 31 July 2019
211
31,345
(3,738)
9,239
20,018
51,507
108,582
(558) 108,024
The notes and accounting policies on pages 83 to 121 form an integral part of these consolidated financial statements.
81
Financial statements Consolidated Statement of Cash Flows
for the year ended 31 July 2019
Cash flows from operating activities
Profit before taxation
Adjustments for:
Finance income
Finance costs
Share of post-tax (loss)/profit of associates
Amortisation of intangibles
Depreciation
Loss on disposal of property, plant and equipment and other intangible assets
Share-based payments
Other non-cash items*
Decrease/(Increase) in trade and other receivables
Increase in trade and other payables
Increase in provisions
Cash generated from operations
Interest paid
Income taxes paid
Net cash generated from operating activities
Cash flow from investing activities
Acquisition of subsidiaries (net of cash acquired)
Settlement of deferred consideration
Purchase of business
Purchase of property, plant and equipment
Purchase of intangible assets
Proceeds from sale of plant, property and equipment
Dividends received from associates
Interest received
Net cash used in investing activities
Cash flows from financing activities
Proceeds from the issue of share capital
Dividends paid to shareholders
Purchase of treasury shares
Net cash used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Exchange gain on cash and cash equivalents
Cash and cash equivalents at end of year
Note
2019
£’000
2018
£’000
19,456
11,773
(255)
564
52
8,809
1,481
6
2,401
(3,245)
714
3,969
1,348
35,300
(28)
(4,521)
30,751
(228)
(4,520)
(2,063)
(2,713)
(9,453)
–
–
211
(151)
202
(66)
7,026
1,231
7
3,571
(566)
(2,278)
2,097
771
23,617
(6)
(5,501)
18,110
(695)
(190)
–
(969)
(7,217)
5
220
28
(18,766)
(8,818)
86
(3,167)
(3,738)
(6,819)
5,166
30,621
2,138
37,925
39
(2,106)
–
(2,067)
7,225
23,219
177
30,621
2
2
12
11
15
* Includes (£2,057,000) of fair value gains in respect of the SMG & Portent acquisitions and a reduction of (£3,192,000) in the SMG contingent consideration offset by £3,063,000 of
contingent consideration in respect of acquisitions treated as staff costs.
The notes and accounting policies on pages 83 to 121 form an integral part of these consolidated financial statements.
82 YouGov Annual Report and Accounts 2019
Financial statements Principal Accounting Policies of the Consolidated
financial statements for the year ended 31 July 2019
Nature of operations
YouGov plc and subsidiaries’ (“the Group”) principal activity is the provision of market research.
YouGov plc is the Group’s ultimate parent company. It is incorporated and domiciled in Great Britain. 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.
Basis of preparation
The consolidated financial statements of YouGov plc are for the year ended 31 July 2019. They have been prepared under the
historical cost convention modified for fair values under IFRS. These consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards as adopted by the European Union (IFRSs as adopted by the EU), IFRS
Interpretations Committee (IFRS IC) Interpretations (as adopted by the EU) and the Companies Act 2006 applicable to companies
reporting under IFRS.
The policies set out below have been consistently applied to all years presented except where new accounting standards allow for
a cumulative opening adjustment. Note 27 provides a summary of the opening adjustments made.
Going concern
The Group meets its day-to-day working capital requirements through its available cash resources. The Group’s forecasts and
projections, taking account of reasonable possible changes in trading performance, show that the Group should be able to operate
without bank finance. After making enquiries, the Directors have a reasonable expectation that the Group has adequate resources
to continue in operational existence for the foreseeable future. The Group therefore continues to adopt the going concern basis in
preparing its consolidated financial statements.
New standards, amendments and interpretations of existing standards adopted by the Group
The following standards, interpretations and amendments are mandatory for the first time for the financial year beginning 1 August
2018 and are relevant to the preparation of the Group’s financial statements:
• IFRS 15 Revenue from Contracts with Customers; and
• IFRS 9 Financial Instruments.
IFRS 15 introduced a five-step approach to revenue recognition. The Group’s accounting policies for its revenue streams are
disclosed in detail on pages 85 and 86. Apart from providing more extensive disclosures for the Group’s revenue transactions, the
application of IFRS 15 has not had a significant impact on the financial position and/or financial performance of the Group, and no
prior period results require restatement.
The primary impact of IFRS 9 on the Group is the introduction of an expected credit loss model as opposed to an incurred credit
loss model under IAS 39. The expected credit loss model requires the Group to account for the lifetime expected credit losses
on both trade receivables and accrued income. The Group’s approach to calculating the lifetime expected credit loss is detailed
on page 90. In accordance with the transitional provisions in IFRS 9, comparative figures have not been restated for IFRS 9.
The reclassifications and the adjustments arising from the new impairment rules are therefore recognised in the opening balance
sheet on 1 August 2018. For more information about the impact of adoption see Note 27.
Under IAS 39 trade and other receivables and cash and cash equivalents were measured as “loans and receivables”. Under IFRS
9 these are now categorised as “amortised cost”. The categorisation of all financial liabilities recognised on the balance sheet has
remained the same between IAS 39 and IFRS 9.
New standards and interpretations not applied
The following amendments to standards and interpretations are mandatory for the first time for the financial years beginning
on or after 1 August 2019 and will be relevant to the preparation of the Company’s financial statements.
Long-term Interests in Associates and Joint Ventures – Amendments to IAS 28: The amendments clarify the accounting for
long-term interests in an associate or joint venture, which in substance form part of the net investment in the associate or joint
venture, but to which equity accounting is not applied. Entities must account for such interests under IFRS 9 Financial Instruments
before applying the loss allocation and impairment requirements in IAS 28 Investments in Associates and Joint Ventures.
Interpretation 23 Uncertainty over Income Tax Treatments: The interpretation explains how to recognise and measure deferred
and current income tax assets and liabilities where there is uncertainty over a tax treatment.
83
Financial statements Principal Accounting Policies of the Consolidated
financial statements for the year ended 31 July 2019 continued
Prepayment Features with Negative Compensation – Amendments to IFRS 9: The narrow-scope amendments made to IFRS 9
Financial Instruments in October 2017 enable entities to measure certain prepayable financial assets with negative compensation
at amortised cost. These assets, which include some loan and debt securities, would otherwise have to be measured at fair value
through profit or loss.
IFRS 16, “Leases”: This standard replaces the current guidance in IAS 17 and is a far-reaching change in accounting by lessees in
particular. Under IAS 17, lessees were required to make a distinction between a finance lease (on balance sheet) and an operating
lease (off-balance sheet). IFRS 16 now requires lessees to recognise a lease liability reflecting future lease payments and a “right-
of-use asset” for virtually all lease contracts. The IASB has included an optional exemption for certain short-term leases and leases
of low-value assets; however, this exemption can only be applied by lessees. For lessors, the accounting stays almost the same.
However, as the IASB has updated the guidance on the definition of a lease (as well as the guidance on the combination and
separation of contracts), lessors will also be affected by the new standard. At the very least, the new accounting model for lessees
is expected to impact negotiations between lessors and lessees. Under IFRS 16, a contract is, or contains, a lease if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration. This is effective for
accounting periods beginning after 1 January 2019.
Annual improvements 2015–2017: These amendments impact four standards:
• IFRS 3 Business Combinations – clarified that obtaining control of a business that is a joint operation is a business combination
achieved in stages.
• IFRS 11 Joint Arrangements – clarified that the party obtaining joint control of a business that is a joint operation should not
remeasure its previously held interest in the joint operation.
• IAS 12 Disclosure of Interests in Other Entities – clarified that the income tax consequences of dividends on financial instruments
classified as equity should be recognised according to where the past transactions or events that generated distributable profits
were recognised.
• IAS 23 Borrowing Costs – clarified that, if a specific borrowing remains outstanding after the related qualifying asset is ready for
its intended use or sale, it becomes part of general borrowings.
These amendments are not yet endorsed by the EU.
IFRIC 22, “Foreign currency transactions and advance consideration”: This IFRIC addresses foreign currency transactions or parts
of transactions where there is consideration that is denominated or priced in a foreign currency. The interpretation provides
guidance for when a single payment/receipt is made as well as for situations where multiple payments/receipts are made.
The guidance aims to reduce diversity in practice. This is effective for accounting periods beginning after 1 January 2018 although
has not yet been endorsed by the EU.
Management will assess the impact on the Group of these standards prior to the effective date of implementation. For IFRS
16 management has assessed the value of all leases for which the Group is liable for as at 1 August 2019 and determined that a
total lease liability of £10,926,000 will need to be recognised at the adoption date. The corresponding right of use asset is valued
at £10,539,000. The depreciation expense for the year ending 31 July 2020 is estimated to be £2,683,000, with interest costs of
£266,000. The standard will be adopted using full retrospective application, with restated comparative results provided.
There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on
the Group for the financial year beginning 1 August 2019. Management will assess the impact on the Group of these standards prior
to the effective date of implementation.
Basis of consolidation
The Group financial statements consolidate the Company and all of its subsidiary undertakings (see Note 12) drawn up to 31 July
2019. Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to,
or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power
to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group.
They are deconsolidated from the date that control ceases.
All intra-Group transactions, balances, income and expenses are eliminated in full on consolidation. Amounts reported in the
financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies
adopted by the Group.
Acquisitions of subsidiaries are dealt with by the acquisition method. The acquisition method involves the recognition at fair value
of all identifiable assets and liabilities, including contingent liabilities of the subsidiary, at the acquisition date, regardless of whether
or not they were recorded in the financial statements of the subsidiary prior to acquisition. On initial recognition, the assets and
liabilities of the subsidiary are included in the consolidated statement of financial position at their fair values, which are also used
as the basis for subsequent measurement in accordance with the Group accounting policies. Goodwill is stated after separating
out identifiable intangible assets. Goodwill represents the excess of acquisition cost over the fair value of the Group’s share of the
84 YouGov Annual Report and Accounts 2019
Financial statements identifiable net assets of the acquired subsidiary at the date of acquisition. Acquisition-related costs are charged to the income
statement in the period in which they are incurred.
The Group treats transactions with non-controlling interests as transactions with parties external to the Group. Disposals to non-
controlling interests result in gains and losses for the Group that are recorded in the Statement of Changes in Equity. Purchases of
non-controlling interests are recognised directly in reserves, being the difference between any consideration paid and the relevant
share acquired of the carrying value of net assets of the subsidiary.
Associates and joint ventures
Entities whose economic activities are controlled jointly by the Group and by other venturers independent of the Group are
accounted for using the equity method. Associates are those entities over which the Group has significant influence (defined
as the power to participate in the financial and operating decisions of the investee but not control or joint control over those
policies) but which are neither subsidiaries nor interests in joint ventures. The results and assets and liabilities of associates and
joint ventures are incorporated in these consolidated financial statements using the equity method of accounting, under which
investments in associates and investments in joint ventures are carried in the Consolidated Statement of Financial Position at cost
as adjusted for post-acquisition changes in the Group’s share of net assets of the associate or joint venture less any impairment
in the value of individual investments. The Group’s share of its associates’ post-acquisition profits or losses is recognised in the
Consolidated Income Statement, and its share of post-acquisition movements in other comprehensive income is recognised in
other comprehensive income.
However, when the Group’s share of losses in an associate or joint venture equals or exceeds its interest in the associate or joint
venture, including any unsecured receivables, the Group does not recognise further losses, unless it has incurred obligations or
made payments on behalf of the associate or joint venture. If the associate or joint venture subsequently reports profits, the Group
resumes recognising its share of those profits only after its share of the profits equals the share of losses not recognised.
Unrealised gains on transactions between the Group and its associates or joint ventures are eliminated to the extent of the Group’s
interests in the associates or joint ventures. Unrealised losses are also eliminated unless the transaction provides evidence of an
impairment of the asset transferred. Amounts reported in the financial statements of associates and joint ventures have been
adjusted where necessary to ensure consistency with the accounting policies adopted by the Group.
Segmental analysis
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating
segments, has been identified as the Board of Directors.
The Board of Directors (which is the “chief operating decision-maker”) primarily reviews information based on product lines, Custom
Research, Data Products and Data Services, with supplemental geographical information. As a result, product lines form the basis
for the segmental reporting with supplemental geographical information also provided.
Revenue
Revenue is recognised in accordance with IFRS 15, “Revenue from contracts with customers”. Revenue is measured by reference
to the fair value of consideration received or receivable by the Group for services provided, excluding Value Added Tax and trade
discounts. Under IFRS 15 an entity should recognise revenue to depict the transfer of promised goods or services to customers
in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
This principle is represented in a five-step model:
1. Identify the contract(s) with a customer.
2. Identify the performance obligation(s) in the contract.
3. Determine the transaction price.
4. Allocate the transaction price to the performance obligations in the contract.
5. Recognise revenue when (or as) the entity satisfies a performance obligation.
Accrued income is the difference between the revenue recognised and the amounts actually invoiced to customers.
Where invoicing exceeds the amount of revenue recognised, these amounts are included in deferred income.
Market research
Revenue arises from the provision of market research services. Within this revenue stream are syndicated and non-syndicated
services. Data Products revenue streams are mainly syndicated services whilst Omnibus and Custom Research revenue streams
are mainly non-syndicated services.
85
Financial statements Principal Accounting Policies of the Consolidated
financial statements for the year ended 31 July 2019 continued
Syndicated services
Syndicated services are the consistent provision of data over a specified period of time. The price agreed with the customer is
apportioned between the products according to their relative standalone values. Revenue is recognised from the point in time
at which access passwords have been made available to the customer. Access to each service is considered to be a single
performance obligation and revenue is recognised in equal monthly instalments over the life of the contract.
Non-syndicated services
Non-syndicated services vary in size and complexity. For long-term contracts, if the outcome can be assessed with reasonable
certainty, revenue is recognised by including in the income statement revenue and related costs as contract activity progresses
based on the stage of completion. Revenue is recognised on each contract in proportion to the level of services performed by
reference to the project manager’s estimates and time records against budgeted and assigned resource.
As these project stages are not sufficiently separable, would not be available to purchase individually and the Group has a right
to demand payment for performance completed should the customer cancel the project before delivery, management considers
them to represent a single performance obligation and so the use of the percentage complete method is considered appropriate.
Media buying
Where the Group acts as an agent, assisting clients with marketing campaigns, the revenue recorded is the net amount retained
when the fee or commission is earned. Each campaign that the Group works on is considered to be a separate performance
obligation to which the associated commission is assigned. This commission is recognised upon delivery of the agreed resources.
Although the Group may bear credit risk in respect of these activities, the arrangements with clients are such that the Group
considers that it is acting as an agent. In such cases, costs incurred with external suppliers (such as media suppliers) which are
passed on to customers are excluded from the Group’s revenue.
Non-cash transactions
The Group enters into contracts for the provision of market research services in exchange for advertising rather than for cash or
other consideration. When barter transactions are agreed, the value of the work provided to the counterparty is equal in value
to that which would be provided in an ordinary cash transaction. As required by IFRS 15 the value of advertising receivable in all
significant barter transactions is measured at the fair value of the services provided.
Provisions
Provisions are recognised in the Consolidated Statement of Financial Position when a Group company has a present obligation
(legal or constructive) as a result of a past event; it is probable that an outflow of resources embodying economic benefits will
be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The amount recognised
as a provision is the best estimate of the expenditure required to settle the present obligation at the reporting date.
If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects
current market assessments of the time value of money and, where appropriate, the risks specific to the liability.
Staff gratuity costs
The staff gratuity provision is a statutory obligation under UAE labour law, whereby each employee on termination of their contract
is due a payment dependent upon their number of years of service and nature of the termination. The liability is based on the
estimated cash outflow based on historical experience of rates of resignation and redundancy.
Panel incentive costs
The Group invites consumer panel members to fill out surveys in return for a cash or points-based incentive. Although these
amounts are not paid until a predetermined target value has accrued on a panellist’s account, an assessment of incentives likely
to be paid (present obligation) is made taking into account past panellist behaviour and is recognised as a cost of sale in the
period in which the service is provided. This assessment takes into account the expected savings from the prize draw offered in
various territories.
Finance income/costs
The Group receives finance income for cash funds that are held on short-term instant access deposit. Where interest receipts
are received after the balance sheet date, the interest due is accrued for the requisite period at the prevailing rate on the deposit.
Finance cost is recognised using the effective interest method, which calculates the amortised cost of a financial liability and
allocates the interest over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset to the net carrying amount of the financial asset.
86 YouGov Annual Report and Accounts 2019
Financial statements Separately reported items
The Group’s Income Statement separately identifies items that are in the Directors’ judgement are one-off in nature or need to
be disclosed separately by virtue of their size and incidence. In determining whether an item or transaction should be separately
identified, the Directors consider quantitative as well as qualitative factors such as the frequency, predictability of occurrence and
significance. This is consistent with the way that financial performance is measured by management and reported to the Board.
Separately reported items may not be comparable to similarly titled measures used by other companies. Disclosing certain
items separately provides additional understanding of the performance of the Group. Examples include acquisition costs and
restructuring costs.
Taxation
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date
in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates
positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes
provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income taxes are calculated using the liability method on temporary differences. Deferred tax is generally provided on
the difference between the carrying amounts of assets and liabilities and their tax bases. However, deferred tax is not provided
on the initial recognition of goodwill, nor on the initial recognition of an asset or liability unless the related transaction is a business
combination or affects tax or accounting profit. Deferred tax on temporary differences associated with shares in subsidiaries and
joint ventures is not provided if reversal of these temporary differences can be controlled by the Group and it is probable that
reversal will not occur in the foreseeable future. In addition, tax losses available to be carried forward as well as other income tax
credits to the Group are assessed for recognition as deferred tax assets.
Deferred tax assets are recognised to the extent that it is probable that the underlying deductible temporary differences will be able
to be offset against future taxable income. Deferred tax assets and liabilities are calculated at tax rates that are expected to apply
to their respective period of realisation, provided they are enacted or substantively enacted at the reporting date. The deferred tax
provision is held at its current value and not discounted.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax
assets and liabilities on a net basis.
Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the consolidated income statement,
except where they relate to items that are charged or credited directly to equity or other comprehensive income, in which case the
related deferred tax is also charged or credited directly to equity or other comprehensive income.
Dividends
Dividends are recognised when the shareholders’ right to receive payment is established.
Goodwill
Goodwill representing the excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets
acquired is capitalised and reviewed annually, or if indications of impairment exist, for impairment. Goodwill is carried at cost less
accumulated impairment losses. If the Group’s interest in the net fair value of the identifiable assets, liabilities, contingent liabilities
of the acquired entity exceeds the cost of the business combination the excess is recognised immediately in the Consolidated
Income Statement.
On disposal of a business, goodwill is allocated based on calculated fair value of assets disposed and included in the calculation
of the profit or loss on disposal.
Intangible assets
Intangible assets represent identifiable non-monetary assets without physical substance. Intangible assets are valued at either their
directly attributable costs or using valuation methods such as discounted cash flows and replacement cost in the case of acquired
intangible assets. The Directors estimate the useful economic life of each asset and use these estimates in applying amortisation
rates. The Directors periodically review useful economic life estimates. Intangible assets are stated at cost net of amortisation
and any provision for impairment. The Directors conduct an impairment review of intangible assets for assets with an indefinite
life annually, or if indications of impairment exist. Where impairment arises, losses are recognised in the Consolidated Income
Statement. Amortisation of intangible assets is shown on the face of the consolidated income statement, except for the amortisation
of panel incentive costs incurred in product development, which is recognised in cost of sales.
87
Financial statements Principal Accounting Policies of the Consolidated
financial statements for the year ended 31 July 2019 continued
Intangible assets acquired as part of a business combination
In accordance with IFRS 3 “Business Combinations”, an intangible asset acquired in a business combination is deemed to have
a cost to the Group of its fair value at the acquisition date. The fair value of the intangible asset reflects market expectations
about the probability that the future economic benefits embodied in the asset will flow to the Group. Where an intangible asset
might be separable, but only together with a related tangible or intangible asset, the Group of assets is recognised as a single
asset separately from goodwill where the individual fair values of the assets in the Group are not reliably measurable. Where the
individual fair value of the complementary assets is reliably measurable, the Group recognises them as a single asset provided the
individual assets have similar useful lives. Intangible assets acquired as part of a business combination are typically amortised using
the straight-line method over the following periods:
Intangible asset
Software and software development
Customer contracts and lists
Patents and trademarks
Intangible assets generated internally
Amortisation period
3 – 5 years
10 – 11 years
5 – 15 years
Internally generated intangible assets are only capitalised where they meet all of the following criteria stipulated by IAS 38:
• completion of the intangible asset is technically feasible so that it will be available for use or sale;
• the Group intends to complete the intangible asset and use or sell it;
• the Group has the ability to use or sell the intangible asset;
• the intangible asset will generate probable future economic benefits. Among other things, this requires that there is a market
for the output from the intangible asset or for the intangible asset itself, or, if it is to be used internally, the asset will be used in
generating such benefits;
• there are adequate technical, financial and other resources to complete the development and to use or sell the intangible asset;
and
• the expenditure attributable to the intangible asset during its development can be measured reliably.
Internally generated intangible assets are staff costs that are capitalised at their directly attributable cost. Development costs not
meeting the criteria for capitalisation are expensed as incurred. Development costs previously recognised as an expense are not
recognised as an asset in subsequent periods.
Internally generated intangible assets are amortised from the moment at which they become available for use. Amortisation rates
applicable to internally generated intangible assets are typically:
Intangible asset
Software and software development
Patents and trademarks
Product development
Consumer panel
Amortisation period
3 years
not amortised
3 years
The consumer panel is the core asset from which the Group’s online revenues are generated.
Where a consumer panel or list is acquired as part of a business combination the cost of the asset is recognised at its fair value to
the Group at the date of acquisition. The fair value is calculated by management using a discounted cash flow model.
Consumer panel costs reflect the direct cost of recruiting new panel members. Consumer panel costs are split between
enhancement and maintenance of the asset. Enhancement costs are capitalised whilst maintenance costs are expensed.
Amortisation is charged to write off the panel acquisition costs over a three-year period, this being the Directors’ estimate of the
average active life of a panellist.
Software and software development
Capitalised software includes our survey and panel management software and other items including the YouGov BrandIndex
platform, which are key tools of the Group’s business. Software and software development also include purchased off-the-
shelf software.
Where software is acquired as part of a business combination, the cost of the asset is recognised at its fair value to the Group at the
date of acquisition. The fair value is calculated by management using a replacement cost model. Amortisation is charged to write
off the software over a three-to-five-year period, this being the Directors’ estimate of the useful life of the software.
88 YouGov Annual Report and Accounts 2019
Financial statements Where software is developed internally, directly attributable costs including employee costs are capitalised as software
development. Amortisation commences upon completion of the asset. Amortisation is charged to write off the software over a
three-year period, this being the Directors’ estimate of the useful life of software.
Customer contract and lists
Where a customer contract or list is acquired as part of a business combination, the cost of the asset is recognised at its fair
value to the Group at the date of acquisition. The fair value is calculated by management using a discounted cash flow model.
Customer contracts and lists are amortised over a useful economic life based on Directors’ estimates.
Patents and trademarks
Where a patent or trademark is acquired as part of a business combination the cost of the asset is recognised at its fair value to the
Group at the date of acquisition. The fair value is calculated by management using a discounted cash flow model.
Patents acquired as part of a business combination are amortised over a useful economic life based on Directors’ estimates.
Patents and trademarks acquired on an ongoing basis to protect the YouGov brand and its products are included at cost and are
not amortised, as the trademarks are indefinite in their longevity through legal rights.
Product Development costs
Expenditure on research (or the research phase of an internal project) is recognised as an expense in the period in which it
is incurred.
The cost of an internally generated intangible asset comprises all directly attributable costs necessary to create, produce,
and prepare the asset to be capable of operating in the manner intended by management.
Impairment testing of goodwill, other intangible assets and property, plant and equipment
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash
flows (cash-generating units). Goodwill is allocated to those cash-generating units that are expected to benefit from synergies
of the related business combination and represent the lowest level within the Group at which management monitors the related
cash flows.
Goodwill, other individual assets or cash-generating units that include goodwill, other intangible assets with an indefinite useful life,
and those intangible assets not yet available for use are tested for impairment at least annually. All other individual assets or cash-
generating units are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may
not be recoverable.
An impairment loss is recognised for the amount by which the asset’s or cash-generating unit’s carrying amount exceeds its
recoverable amount. The recoverable amount is calculated as value in use based on an internal discounted cash flow evaluation.
Impairment losses recognised for cash-generating units, to which goodwill has been allocated, are credited initially to the carrying
amount of goodwill. Any remaining impairment loss is charged pro rata to the other assets in the cash-generating unit. With the
exception of goodwill, all assets are subsequently reassessed for indications that an impairment loss previously recognised may
no longer exist.
Property, plant and equipment and depreciation
Property, plant and equipment is carried at cost net of depreciation and any provision for impairment. Cost includes the original
purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended use.
No depreciation is charged during the period of construction. Leasehold property is included in property, plant and equipment only
where it is held under a finance lease. Depreciation is calculated to write-down the cost less estimated residual value of all property,
plant and equipment over their estimated useful economic lives.
Asset
Freehold property
Leasehold property improvements
Fixtures and fittings
Computer equipment
Motor vehicles
Depreciation rate
Straight-line over 25 years
Straight-line over the life of the lease
25% on a reducing balance
33% per annum straight-line
25% or the life of the lease
The residual values and useful lives of all assets are reviewed at least at the end of each reporting period.
89
Financial statements Principal Accounting Policies of the Consolidated
financial statements for the year ended 31 July 2019 continued
Leased assets and operating leases
In accordance with IAS 17, the economic ownership of a leased asset is transferred to the lessee if the lessee bears substantially all
the risks and rewards related to the ownership of the leased asset. The related asset is recognised at the time of inception of the
lease at the fair value of the leased asset or, if lower, the present value of the minimum lease payments plus incidental payments,
if any, to be borne by the lessee. A corresponding amount is recognised as a finance leasing liability.
The interest element of leasing payments represents a constant proportion of the capital balance outstanding and is charged to the
income statement over the period of the lease.
All other leases are regarded as operating leases and the payments made under them are charged to the income statement on a
straight-line basis over the lease term. Lease incentives are spread over the term of the lease.
Financial assets
Financial assets are divided into the following categories: Trade receivables, loans and financial assets.
Financial assets are assigned to the different categories by management on initial recognition, depending on the purpose for which
they were acquired.
All financial assets are recognised when the Group becomes a party to the contractual provisions of the instrument.
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest
method, less provision for impairment. Following the adoption of IFRS 9 from 1 August 2018 the Group’s trade receivables and
accrued income from sales of products are subject to the new expected credit loss model. The group applies the IFRS 9 simplified
approach to measuring expected credit losses, which uses a lifetime expected loss allowance for all trade receivables and
accrued income.
Trade debtor balances where there is a clear indication of impairment are provided for specifically. A provision for impairment
of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due
according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will
enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 30 days overdue) are considered
indicators that the trade receivable is impaired.
The expected credit loss is the difference between the carrying amount of the trade receivables balance at the measurement
date, less any amounts with specific provisions, and the total amount expected to be recovered. The expected loss allowance is
calculated on a regional basis using the historic default rates in each geography, adjusted for other considerations such as local
economic conditions and anticipated future events.
The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in
the Consolidated Income Statement within operating expenses. When a trade receivable is uncollectable, it is written off against the
allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against operating
expenses in the Consolidated Income Statement.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active
market. Loans and receivables are measured subsequent to initial recognition at amortised cost using the effective interest
method, less provision for impairment. Any change in their value through impairment or reversal of impairment is recognised in the
consolidated income statement.
An assessment for impairment is undertaken at least at each reporting date.
A financial asset is derecognised only where the contractual rights to the cash flows from the asset expire or the financial asset
is transferred and that transfer qualifies for derecognition. A financial asset is transferred if the contractual rights to receive the
cash flows of the asset have been transferred or the Group retains the contractual rights to receive the cash flows of the asset but
assumes a contractual obligation to pay the cash flows to one or more recipients. A financial asset that is transferred qualifies for
derecognition if the Group transfers substantially all the risks and rewards of ownership of the asset, or if the Group neither retains
nor transfers substantially all the risks and rewards of ownership but does transfer control of that asset.
Financial liabilities
Financial liabilities are measured at amortised cost using the effective interest method. Financial liabilities are assigned to the
different categories by management on initial recognition, depending on the purpose for which they were acquired.
Financial liabilities are obligations to pay cash or other financial assets and are recognised when the Group becomes a party to the
contractual provisions of the instrument.
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest
method. They are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-
current liabilities.
90 YouGov Annual Report and Accounts 2019
Financial statements Borrowings and lease liabilities are initially recorded at the fair value which is typically the proceeds received, net of any issue costs
and subsequently carried at amortised cost. Finance charges are accounted for on an effective interest method and are added to
the carrying value of the instrument to the extent that they are not settled in the period in which they arise.
A financial liability is derecognised only when the obligation is extinguished, that is, when the obligation is discharged or cancelled
or expires.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments
that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value, with
maturities no longer than three months. In addition, bank overdrafts which are repayable on demand are included for the purposes
of the Consolidated Statement of Cash Flows.
Equity
Equity comprises the following:
• share capital represents the nominal value of equity shares;
• share premium represents the excess over nominal value of the fair value of consideration received for equity shares, net of
incremental and directly attributable expenses of the share issue;
• foreign exchange reserve represents the differences arising from translation of investments in overseas subsidiaries;
• retained earnings represent retained profits; and
• merger reserve represents the excess over nominal value of the fair value of consideration received for equity shares issued/
allotted directly to acquire another entity meeting the specific requirements of Section 612 of the Companies Act 2006.
The conditions of the relief include:
• securing at least 90% of the nominal value of equity of another company; and
• the arrangement provides for allotment of equity shares in the issuing company.
Foreign currencies
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary
economic environment in which the entity operates (“the functional currency”). The consolidated financial statements are
presented in Sterling, which is the Company’s functional and presentation currency.
Transactions in foreign currencies are translated at the exchange rate ruling at the date of the transaction.
Monetary assets and liabilities in foreign currencies are translated at the rates of exchange ruling at the reporting date.
Non-monetary items that are measured at historical cost in a foreign currency are translated at the exchange rate at the date
of the transaction.
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when
the fair value was determined.
Any exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those
at which they were initially recorded are recognised in the consolidated income statement in the period in which they arise.
The assets and liabilities in the financial statements of foreign subsidiaries and associates and related goodwill are translated at
the rate of exchange ruling at the reporting date. Income and expenses are translated at average rate unless average rate is not a
good approximation of the rate ruling on the date of the transaction. The exchange differences arising from the retranslation of the
opening net investment in subsidiaries and joint ventures are taken directly to the “Foreign exchange reserve” in equity.
Employee benefits
Equity-settled share-based payments
The Group operates a number of equity-settled share-based payment compensation plans under which the entity receives
services from employees as consideration for equity instruments (options) of the Group. All equity-settled share-based payments
are ultimately recognised as an expense in the consolidated income statement with a corresponding credit to retained earnings.
This fair value is appraised at the grant date and excludes the impact of non-market vesting conditions.
If vesting periods or other non-market vesting conditions apply, the expense is allocated over the vesting period, based on the best
available estimate of the number of share options expected to vest. Estimates are subsequently revised if there is any indication that
the number of share options expected to vest differs from previous estimates. No adjustment is made to any expense recognised in
prior periods if share options ultimately exercised are different to that estimated on vesting.
91
Financial statements Principal Accounting Policies of the Consolidated
financial statements for the year ended 31 July 2019 continued
Upon exercise of share options the proceeds received net of attributable transaction costs are credited to share capital, and where
appropriate, share premium.
Termination benefits
Termination benefits are payable when employment is terminated by the Group before the normal retirement date, or whenever
an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits when it
has a constructive obligation to pay them as a result of the announcement of a detailed formal plan to terminate the employment
of current employees. Benefits falling due more than 12 months after the end of the reporting period are discounted to their
present value.
Sales Commissions
Sales commissions paid are accounted for as staff costs within operating expenses as they are considered to be part of
total remuneration.
Contingent consideration
Future anticipated payments to vendors in respect of earn outs are based on the Directors’ best estimates of future obligations,
which are dependent on the future performance of the interests acquired and assume the operating companies improve profits
in line with Directors’ estimates. When consideration payable is deferred, the fair value of the consideration is obtained by
discounting to present value the amounts expected to be payable in the future at a rate equivalent to a UK 10 year treasury gilt (or
foreign equivalent), this being, in the Directors’ opinion the most appropriate barometer for a risk-free rate. Subsequent changes
in the amount of contingent consideration recognised are recorded as other separately reported items in the Consolidated
Income Statement.
Imputed interest
When the outflow of cash or cash equivalents is deferred, and the arrangement constitutes a financing transaction, the fair value
of the consideration is the present value of all future payments determined using an imputed rate of interest. The imputed rate of
interest used is the risk-free rate, this being, in the Directors’ opinion the most appropriate rate. The difference between the present
value of all future payments and the nominal amount of the consideration is recognised as an interest charge. Imputed interest is
shown within finance costs in the Consolidated Income Statement.
Accounting estimates and judgements
In the process of applying the Group’s accounting policies the Directors are required to make estimates and judgements that
may affect the financial statements. The Directors believe that the estimates and judgements applied in the financial statements
are reasonable.
Estimates and judgements are evaluated on a regular basis and are based on historical experience (where applicable) and other
factors, such as expectations of future events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. These estimates, by definition, will rarely equal the related
actual results. The estimates and judgements that have a significant risk of causing a material adjustment to the carrying amounts
of assets and liabilities within the next financial year are discussed below. Where estimates and judgements have been made,
the key factors taken into consideration are disclosed in the appropriate Note in these consolidated financial statements.
Estimates have been made in respect of the following:
Revenue recognition
The Group is required to make an estimate of project completion levels on long-term contracts for revenue recognition purposes.
This is based upon the project manager’s estimates and available time records against budgeted and assigned resource for the
initial project scope. This involves an element of estimation, and therefore differences may arise between the actual and estimated
result. Where differences arise, they are recognised in the Consolidated Income Statement for the following reporting period.
Share-based payments
The Group is required to make estimates regarding the assumptions that are used to calculate the income statement charge for
share-based payments. The value of share options is measured using either the Black Scholes option pricing model or the Monte
Carlo Simulation. This is dependent on the conditions attached to each of the issued options. Where conditions are non-market
based the Black Scholes option pricing model is used. Where market based conditions are attached to options, the fair value is
determined using the Monte Carlo Simulation. Inputs to the calculations include (but are not limited to) expected volatility, expected
life, risk-free rate, expected dividend yield and redemption rates, the inputs used are disclosed in Note 22. Variances in any of the
inputs could lead to the charge being higher or lower than appropriate.
92 YouGov Annual Report and Accounts 2019
Financial statements Income taxes
The Group is subject to income taxes in various jurisdictions. Judgement is required in determining the worldwide provision for
income taxes. There are many transactions/calculations for which the ultimate tax determination is uncertain during the ordinary
course of business. Where the final tax outcome is different to what is initially recorded, such differences will impact the income tax
and deferred tax provisions. Income taxes are disclosed fully in Note 6.
Deferred taxation
Estimation is required by management in determining whether the Group should recognise a deferred tax asset.
Management considers whether there is sufficient certainty that its tax losses available to carry forward will ultimately be offset
against future probable profits before taxation. This estimate impacts on the degree to which deferred tax assets are recognised.
Deferred taxation is disclosed fully in Note 19.
Goodwill
The Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy.
The recoverable amount is based on the higher of value in use calculations and the fair value less cost to dispose. The use of this
method requires the estimation of future cash flows and the choice of a suitable discount rate in order to calculate the present
values of these cash flows. The estimates used in the impairment review are fully disclosed in Note 10.
Contingent consideration
As part of the acquisitions, contingent consideration is payable to selling shareholders based on the future performance of the
businesses. Estimates are required in assessing the magnitude of contingent consideration and the likelihood of payment.
Contingent consideration is disclosed fully in Note 17.
Other intangible assets
The Group tests at each reporting date whether intangible assets have suffered any impairment, in accordance with the
accounting policy. The recoverable amount of cash-generating units has been determined based on discounted future cash flows.
These calculations require estimates to be made. Where there is no method of valuation for an intangible asset, management will
make use of a valuation technique to determine the value of an intangible if there is no evidence of a market value. In doing so
certain assumptions and estimates will be made. Intangible assets are fully disclosed in Note 11.
Judgement is also required in the determination of the costs that satisfy the IAS 38 criteria for capitalisation as intangible assets.
Panel incentive provision
The Group is required to assess the likelihood that panel incentives earned by consumer panel members will be redeemed and
maintain a provision to cover this potential liability. Factors taken into consideration include the absolute liability, redemption rates
and panel activity rates. Whilst historical data can indicate trends and behaviours, it is not a definite indicator of the future. In arriving
at the carrying value of the provision, certain assumptions and estimates have to be made. The estimates used in calculating the
panel incentive provision are fully disclosed in Note 18.
Judgements have been made in respect of the following:
Goodwill
All payments to purchase a business are recorded at fair value at the acquisition date, with contingent payments classified as debt
subsequently re-measured through the consolidated income statement. There is a choice on an acquisition-by-acquisition basis to
measure the non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the
acquiree’s net assets.
Other intangible assets
The Group is required to identify and assess the useful life of intangible assets and determine if there is a finite or indefinite life.
Judgement is required in determining if an intangible asset has a finite life and the extent of this finite life in order to calculate the
amortisation charge on the asset Judgement is also required in the determination of the costs that satisfy the IAS 38 criteria for
capitalisation as intangible assets.
93
Financial statements Notes to the Consolidated financial statements
for the year ended 31 July 2019
1 Segmental analysis
The Board of Directors (which is the “chief operating decision-maker”) primarily reviews information based on product lines: Custom
Research, Data Products and Data Services; with supplemental geographical information.
Custom
Research
£’000
60,000
(13,569)
46,431
(33,526)
12,905
Data
Products
£’000
41,463
(4,170)
37,293
(23,170)
14,123
Data
Services
£’000
37,156
(6,789)
30,367
(22,999)
7,368
Eliminations &
Unallocated
Costs
£’000
(2,132)
322
(1,810)
(14,298)
(16,108)
233
3,127
24
2,960
Custom
Research
£’000
58,657
(14,205)
44,452
(32,739)
11,713
Data
Products
£’000
30,445
(3,700)
26,745
(17,309)
9,436
48
2,097
Data
Services
£’000
28,956
(5,089)
23,867
(17,792)
6,075
1,176
625
Eliminations &
Unallocated
Costs
£’000
(1,499)
1,499
–
(14,574)
(14,574)
596
2,408
214
2,223
192
1,927
229
466
Group
£’000
136,487
(24,206)
112,281
(93,993)
18,288
1,529
19,817
255
(564)
(52)
19,456
(5,085)
14,371
1,481
8,809
Group
£’000
116,559
(21,495)
95,064
(82,414)
12,650
(892)
11,758
151
(202)
66
11,773
(3,615)
8,158
1,231
7,024
2019
Revenue
Cost of sales
Gross profit
Operating expenses
Adjusted operating profit
Other separately reported items
Operating profit
Finance income
Finance costs
Share of post-tax loss in joint ventures
and associates
Profit before taxation
Taxation
Profit after taxation
Other segment information
Depreciation
Amortisation
2018
Revenue
Cost of sales
Gross profit
Operating expenses
Adjusted operating profit
Other separately reported items
Operating profit
Finance income
Finance costs
Share of post-tax profit in joint
ventures and associates
Profit before taxation
Taxation
Profit after taxation
Other segment information
Depreciation
Amortisation
94 YouGov Annual Report and Accounts 2019
Financial statements 1 Segmental analysis continued
Supplementary analysis by geography
Revenue and adjusted operating profit by geography based on the origin of the sale.
UK
USA
Mainland Europe
Middle East
Asia Pacific
Intra-Group revenues/unallocated costs
Group
Revenue by geography based on the destination of the customer.
2019
2018
Adjusted
operating
profit/
(loss)
£’000
Revenue
£’000
Adjusted
operating
profit/
(loss)
£’000
Revenue
£’000
41,151
11,764
31,332
10,169
56,410
13,208
48,159
13,786
23,855
10,548
11,325
2,933
3,256
21,571
1,113
12,057
3,004
164
8,748
162
(6,802)
(13,037)
(5,308)
(15,584)
136,487
18,288
116,559
12,650
2019
External sales
Inter-segment sales
Total revenue
2018
External sales
Inter-segment sales
Total revenue
UK
£’000
USA
£’000
Mainland
Europe
£’000
Middle
East
£’000
Asia
Pacific
£’000
Intra-
Group
revenues
£’000
Group
£’000
34,363
57,775
23,715
10,112
10,522
– 136,487
2,050
2,967
2,420
445
1,966
(9,848)
–
36,413
60,742
26,135
10,557
12,488
(9,848) 136,487
30,926
48,422
21,435
9,318
6,458
–
116,559
2,363
3,388
1,879
391
619
(8,640)
–
33,289
51,810
23,314
9,709
7,077
(8,640)
116,559
Inter-segment sales are priced on an arm’s-length basis that would be available to unrelated third parties.
95
Financial statements Notes to the Consolidated financial statements
for the year ended 31 July 2019 continued
2 Operating expenses
The profit before taxation is stated after charging:
Auditors’ remuneration:
Fees payable for the audit of the parent company and the consolidated financial statements
Audit of subsidiaries
Audit related assurance services
Tax compliance services
Tax advisory services
Total auditors’ remuneration
Disposals, depreciation and amortisation:
Amortisation of intangible assets recognised in operating expenses
Amortisation of intangible assets recognised in cost of sales
Total amortisation of intangible assets
Loss on disposal of intangible assets and property, plant and equipment
Depreciation of property, plant and equipment (Note 12)
Operating lease rentals:
Plant and machinery
Land and buildings
Other (income)/expenses:
Exchange (gains)/losses
Decrease in bad debt provision
Share-based payment expenses (Note 22)
Charitable donations
3 Staff costs and numbers
Wages and salaries
Social security costs
Share-based payments (Note 22)
Other pension costs
Acquisition costs treated as staff compensation
Other benefits
2019
£’000
2018
£’000
303
112
–
18
164
597
8,809
–
8,809
6
1,481
30
3,108
276
(182)
2,401
94
2019
£’000
48,769
6,156
2,401
1,339
2,834
10,743
72,242
243
121
19
69
118
570
7,024
2
7,026
6
1,231
14
2,193
(2)
–
3,571
97
2018
£’000
41,123
5,630
3,571
1,054
785
9,625
61,788
Included in the above amount are staff costs totalling £4,806,000 (2018: £3,940,000) that were capitalised in relation to internally
developed intangible assets. Further details are provided in Note 11. Pension costs are contributions made on behalf of employees
to defined contribution pension schemes. Other benefits include staff bonuses paid in cash and private healthcare insurance.
96 YouGov Annual Report and Accounts 2019
Financial statements 3 Staff costs and numbers continued
The monthly average number of employees including Director’s of the Group during the year was as follows:
Key management personnel
Administration and operations
2019
Number
2018
Number
32
927
959
28
788
816
Specific disclosures in relation to compensation for key management personnel (defined as Board and Divisional, Product and
Function Heads) who held office during the year was as follows:
Short-term employee benefits
Post-employment benefits
Share-based payments
2019
£’000
5,854
105
2,097
8,056
2018
£’000
5,019
109
3,300
8,428
Disclosure of Directors’ remuneration including share options are included in the Remuneration Report on pages 56 to 64, which
form part of the financial statements
4 Other separately reported items
Restructuring costs
Acquisition-related costs
Fair value gains
2019
£’000
146
382
(2,057)
(1,529)
2018
£’000
1,381
1,193
(1,682)
892
Restructuring cost in the year are residual cost incurred in respect of the restructuring of the Custom business in Mainland Europe
and the Middle East and the closure of the Reports business. Restructuring costs in the prior year included £1,036,000 in relation
to the reduction of non-core custom operations in Mainland Europe and the Middle East and £181,000 in relation to the Reports
product line being discontinued. £164,000 of costs also arose from the establishment of centralised global operations and finance
support functions.
Acquisition related costs in the year comprise £2,834,000 of contingent consideration treated as staff costs in respect of the
acquisitions of Galaxy Research Pty Ltd, InConversation Media Limited and Portent.io Limited and £739,000 of transaction costs
in respect of the acquisitions made in the year, £201,000 of which is contingent, less a reduction in expected SMG contingent
consideration of £3,192,000. Acquisition-related costs in the prior year comprise £864,000 in respect of the acquisition of Galaxy
DP Pty Limited including £785,000 of contingent consideration treated as staff costs, £228,000 for the acquisition of SMG Insight
Limited and £101,000 of preliminary work towards acquisitions completed after the reporting date. Further detail on the above
acquisitions is provided in Note 9.
Fair value gains in the year comprise, £1,878,000 increase in the fair value assessment of the Group’s 20% shareholding in SMG
Insight Limited prior to acquisition and a bargain purchase gain of £232,000 less a fair value loss of £53,000 in respect of the
acquisition of Portent.io Limited. Fair vale gains in the prior year are in respect of the acquisition of SMG Insights Limited.
97
Financial statements
Notes to the Consolidated financial statements
for the year ended 31 July 2019 continued
5 Finance income and costs
Interest receivable from bank deposits
Foreign exchange gains on cash and intra-Group loans
Total finance income
Interest payable on bank loans and overdrafts
Other interest payable
Foreign exchange losses on cash and intra-Group loans
Imputed interest on contingent consideration and provisions
Total finance costs
6 Taxation
The taxation charge represents:
Current tax on profits for the year
Adjustments in respect of prior years
Total current tax charge
Deferred tax:
Origination and reversal of temporary differences
Adjustments in respect of prior years
Impact of changes in tax rates
Total deferred tax charge/(credit)
Total income statement tax charge
The tax assessed for the year is higher (2018: higher) than the standard rate of corporation tax in the UK.
The differences are explained below:
Profit before taxation
Tax charge calculated at Group’s standard rate of 19% (2018: 19%)
Variance in overseas tax rates
Impact of changes in tax rates
Gains not subject to tax
Expenses not deductible for tax purposes
Tax losses for which no deferred income tax asset was recognised
Adjustments in respect of prior years
Associates results reported net of tax
2019
£’000
2018
£’000
211
44
255
3
24
320
347
217
564
2019
£’000
4,965
(337)
4,628
16
265
176
457
5,085
2019
£’000
19,456
3,697
1,439
176
(1,007)
743
99
(72)
10
28
123
151
2
4
121
127
75
202
2018
£’000
5,042
69
5,111
(1,746)
(189)
439
(1,496)
3,615
2018
£’000
11,773
2,237
943
439
(347)
182
294
(120)
(13)
Total income statement tax charge for the year
5,085
3,615
98 YouGov Annual Report and Accounts 2019
Financial statements 6 Taxation continued
On 8 July 2015, the UK corporation tax rate was reduced from 20% to 19% from 1 April 2017 and to 18% from 1 April 2020.
On 15 September 2016, further changes to the UK corporation tax rates were made reducing the main rate to 17% from 1 April 2020.
On 22 December 2017, the US federal corporate income tax rate reduced from 35% to 21%. These changes have been substantively
enacted at the balance sheet date and, therefore, are included in these financial statements. Deferred taxes at the balance sheet
date have been measured using the enacted tax rates reflected in these financial statements.
7 Dividend
On 17 December 2018, a final dividend in respect of the year ended 31 July 2018 of £3,167,000 (3.0p per share) (2017: £2,106,000
(2.0p per share)) was paid to shareholders. A dividend in respect of the year ended 31 July 2019 of 4.0p per share, amounting to a
total dividend of £4,228,000 is to be proposed at the Annual General Meeting on 11 December 2019. These financial statements do
not reflect this proposed dividend payable.
8 Earnings per share
The calculation of the basic earnings per share is based on the earnings attributable to Ordinary Shareholders divided by the
weighted average number of shares in issue during the year. Shares held in employee share trusts are treated as cancelled for the
purposes of this calculation.
The calculation of diluted earnings per share is based on the basic earnings per share, adjusted to allow for the issue of shares
and the post–tax effect of dividends and/or interest, on the assumed conversion of all dilutive options and other dilutive potential
Ordinary Shares.
The adjusted earnings per share has been calculated to reflect the underlying profitability of the business by excluding share-
based payments, imputed interest, impairment charges, other separately reported items and any related tax effects as well as the
derecognition of tax losses.
Profit after taxation attributable to equity holders of the parent company
Add: share-based payments
Add: imputed interest (Note 5)
Add: other separately reported items
Tax effect of the above adjustments and adjusting tax items*
Adjusted profit after taxation attributable to equity holders of the parent company
* Adjusting tax items in the prior year included a one off charge of £374,000 as a result of the reduction in US Federal Tax rates.
2019
£’000
14,970
2,401
217
(1,529)
(321)
15,738
2018
£’000
8,158
3,571
75
892
(556)
12,140
99
Financial statements Notes to the Consolidated financial statements
for the year ended 31 July 2019 continued
8 Earnings per share continued
Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below.
Number of shares
Weighted average number of shares during the year: (’000 shares)
– Basic
– Dilutive effect of share options
– Diluted
The adjustments have the following effect:
Basic earnings per share
Share-based payments
Imputed interest
Other separately reported items
Tax effect of the above adjustments and adjusting tax items
Adjusted earnings per share
Diluted earnings per share
Share-based payments
Imputed interest
Other separately reported items
Tax effect of the above adjustments and adjusting tax items
Adjusted diluted earnings per share
9 Business combinations and disposals
Acquisition of Galaxy DP Pty Limited
2019
2018
105,400
7,865
113,265
105,410
7,084
112,494
14.2p
2.3p
0.2p
(1.5p)
(0.3p)
14.9p
13.2p
2.1p
0.2p
(1.3p)
(0.3p)
13.9p
7.7p
3.4p
0.1p
0.8p
(0.5p)
11.5p
7.3p
3.1p
0.1p
0.8p
(0.5p)
10.8p
On 11 December 2017, to strengthen its position in the Australian market, YouGov purchased a 100% shareholding in Galaxy DP
Pty Limited (“Galaxy”), an Australian-based research company. An initial payment of AU$1,250,000 (£700,000) was paid upon
completion, with a further AU$332,000 (£190,000) paid in April 2018. The balance of the consideration is payable, contingent upon
performance, in two instalments, AU$1,378,000 being paid in in February 2019 and a further payment forecast to be AU$1.7m is due
in February 2020.
The contingent consideration is estimated to total AU$3.1m (£1.7m) this part of the consideration is contingent upon continuing
employment and therefore has been treated as staff compensation under IFRS. The charge in the year in respect of this was
£729,000 (2018: £785,000) which has been recognised in the income statement as a separately reported item.
In addition transaction and integration costs of £79,000 were incurred in the prior year as a result of the acquisition, these have also
been treated as excluded items and recognised in the income statement as separately reported items.
100 YouGov Annual Report and Accounts 2019
Financial statements 9 Business combinations and disposals continued
The amount recognised for each class of assets and liabilities acquired is as follow:
Intangible assets
Property, plant and equipment
Cash
Current assets
Current liabilities
Tax payable
Dividend payable
Deferred tax
Net assets acquired
Goodwill on acquisition
Total consideration for acquisition
Consideration contingent on continued employment
Total consideration and related employee benefits
Acquiree’s
carrying
amount
before
combination
£’000
Fair value
adjustments
£’000
Fair value
acquired
£’000
–
28
873
807
(979)
(21)
(604)
3
107
424
–
–
–
–
–
–
(116)
308
424
28
873
807
(979)
(21)
(604)
(113)
415
469
884
1,710
2,594
Fair value adjustments included the recognition of the fair value of customer relationships and a related deferred tax liability.
The goodwill is attributable to the workforce and the profitability of the acquired business. It will not be deductible for tax purposes.
Ownership and control passed to YouGov on 11 December 2017 and Galaxy has been consolidated within the Group financial
statements from that date. During the year Galaxy has contributed £3,356,000 (2018: £1,501,000) to Group revenue and £414,000
(2018: £376,000) to Group adjusted operating profit.
Acquisition of SMG Insight Limited
On 22 May 2018, to provide YouGov with the opportunity to develop new syndicated data products for the sports industry,
YouGov purchased the remaining 80% shareholding in SMG insight Limited (“SMG”), a UK-based research company in which it
had previously held a 20% stake. Under the terms of the acquisition agreement an initial payment of £1m was paid upon completion
with a further payment contingent upon the collection of trade receivables of up to £1m payable after the first year. The balance
of the consideration is payable, contingent on EBITDA performance, in three annual instalments, with total consideration being
capped at £21m.
At 31 July 2018 the total contingent consideration payable was estimated to be £5.7m. as a result of better forecast information,
this was increased to £13.2m at 31 January 2019 with the increase of £7.5m being recognised in goodwill. At 31 July 2019 the
total contingent consideration payable is forecast to be £10.0m and the reduction of £3.2m has been recognised in the income
statement as a separately reported item.
In May 2019 a payment of £946,000 was made in respect of the consideration contingent on the collection of trade receivables
with a further payment of £2,829,000 being made in June 2019 in respect of the first year of the consideration contingent upon
EBITDA performance.
In addition transaction and integration costs of £228,000 were incurred in the prior year as a result of the acquisition, these have also
been treated as excluded items and recognised in the income statement as separately reported items.
Fair value adjustments have been made to align SMG’s accounting policies with those of YouGov and to account for the fair value
of customer relationships and attributable deferred taxation of the business which are recognised upon acquisition.
101
Financial statements Notes to the Consolidated financial statements
for the year ended 31 July 2019 continued
9 Business combinations and disposals continued
The amount recognised for each class of assets and liabilities acquired is as follow:
Intangible assets
Property, plant and equipment
Cash
Current assets
Current liabilities
Tax payable
Dividend payable
Deferred tax
Net assets acquired
Goodwill on acquisition
Total consideration for acquisition
Total consideration analysed as:
Carrying value of investment
Re-measurement of investment to fair value
Initial cash payment
Consideration contingent on collection of trade receivables
Consideration contingent on EBITDA performance
Total consideration
Acquiree’s
carrying
amount
before
combination
£’000
–
18
121
1,578
(1,673)
(42)
(1,101)
36
(1,063)
Fair value
adjustments
£’000
Fair value
acquired
£’000
1,483
1,483
3
–
(33)
(184)
–
–
(264)
1,005
21
121
1,545
(1,857)
(42)
(1,101)
(228)
(58)
17,857
17,799
–
3,560
1,000
790
12,449
17,799
The goodwill is attributable to the workforce and the profitability of the acquired business. It will not be deductible for tax purposes.
Ownership and control passed to YouGov on 22 May 2018 and SMG has been consolidated within the Group financial statements
from that date. Since 1 August 2018 the acquisition SMG has contributed £7,712,000 (2018: £789,000) to Group revenue and
£923,000 to Group adjusted operating profit (2018: £6,000 reduction).
Acquisition of InConversation Media Limited
On 21 August 2018, to provide YouGov with technology to engage with new and difficult to reach audiences, YouGov purchased a
100% shareholding in InConversation Media Limited (“Inconvo”), a UK-based start-up company. An initial payment of £100 was paid
upon completion with a further payment of up to £4,000,000 payable in September 2021 contingent on revenue achieved in the
period to 31 July 2021 and the number of active panellists at that date.
The total contingent consideration is forecast to be £2,003,000. £1,383,000 of this amount, £1,366,000 at present value, is
contingent upon continuing employment and therefore will be treated as staff compensation under IFRS, the remaining £620,000
is not contingent upon future employment and the present value of £605,000 is treated as consideration for acquisition.
In addition transaction costs of £93,000 were incurred as a result of the acquisition. These have also been recognised in the income
statement as separately reported items.
Fair value adjustments have been made to account for the fair value of the panel and attributable deferred taxation recognised
upon acquisition.
.
102 YouGov Annual Report and Accounts 2019
Financial statements 9 Business combinations and disposals continued
The amount recognised for each class of assets and liabilities acquired is as follow:
Intangible assets
Property, plant and equipment
Cash
Current assets
Current liabilities
Loan payable
Deferred tax
Net assets acquired
Goodwill on acquisition
Total consideration for acquisition
Total consideration analysed as:
Contingent consideration
Total consideration
Acquiree’s
carrying
amount
before
combination
£’000
Fair value
adjustments
£’000
Fair value
acquired
£’000
10
4
11
17
(28)
(125)
20
(91)
10
–
–
–
–
–
(2)
8
20
4
11
17
(28)
(125)
18
(83)
688
605
605
605
The goodwill is attributable to the future benefit to YouGov of being able to engage with new and difficult to reach audiences. It will
not be deductible for tax purposes.
Ownership and control passed to YouGov on 21 August 2018 and Inconvo has been consolidated within the Group financial
statements from that date. In the period Inconvo has contributed £25,000 to Group revenue and reduced Group adjusted operating
profit by £417,000. If the acquisition had occurred on 1 August 2018 Inconvo would have contributed £27,000 to Group revenue and
would have reduced Group adjusted operating profit by £442,000.
Crunch.io Inc. asset and business purchase
On 6 September 2018, YouGov acquired the assets and business of Crunch.io Inc. (“Crunch”), including Crunch.io Inc.’s share of the
jointly developed Crunch analytic software. This purchase has been treated as a business combination. The amount payable was
$2,670,000 (£2,063,000) which was paid upon completion.
Transaction costs of £239,000 were incurred in respect of this purchase and these have been recognised in the income statement
as separately reported items.
The amount recognised for each class of assets and liabilities acquired is as follow:
Intangible assets
Current assets
Loan payable
Net assets acquired
Goodwill on acquisition
Total consideration for acquisition paid in cash
Fair value adjustments have been made to recognise the fair value of the Crunch asset.
Acquiree’s
carrying
amount
before
combination
£’000
–
29
(77)
(48)
Fair value
adjustments
£’000
Fair value
acquired
£’000
1,442
1,442
–
–
1,442
29
(77)
1,394
669
2,063
The goodwill is attributable to the future benefit of having full control over the Crunch Analytic Software. It will not be deductible for
tax purposes.
103
Financial statements Notes to the Consolidated financial statements
for the year ended 31 July 2019 continued
9 Business combinations and disposals continued
Ownership and control of Crunch passed to YouGov on 6 September 2018 and the business has been included within the Group
financial statements from that date. In the period Crunch has contributed £113,000 to Group revenue and reduced Group adjusted
operating profit by £1,658,000. If the business purchase had occurred on 1 August 2018 Crunch would have contributed £125,000 to
Group revenue and would have reduced Group adjusted operating profit by £1,839,000.
Acquisition of Portent.io Limited
On 30 November 2018, in order to provide YouGov with access to the entertainment sector, YouGov purchased the remaining
65% shareholding in Portent.io Limited (“Portent”) a UK-based social analytics company in which it had previously held a 35%
shareholding. An initial payment of £227,000 was paid upon completion with an additional payment, payable in three annual
instalments in December 2019 to 2021, contingent on EBITDA in the period from completion to 31 October 2021. The total
consideration, including the payment already made, is capped at £20,000,000.
The total additional payment is forecast to be £5,860,000 equivalent to £5,800,000 at present value, and is contingent upon
continuing employment and therefore will be treated as staff compensation under IFRS and recognised over the earn-out period
ending on 31 October 2021.
In addition transaction costs of £408,000, including £205,000 which is contingent on EBITDA and payable in December 2021,
were incurred as a result of the acquisition. These have also been recognised in the income statement in the period as separately
reported items.
The amount recognised for each class of assets and liabilities acquired is as follow:
Intangible assets
Property, plant and equipment
Cash
Current assets
Current liabilities
Tax payable
Loans payable
Deferred tax
Net assets acquired
Bargain purchase on acquisition
Total consideration for acquisition
Total consideration analysed as:
Carrying value of investment
Re-measurement of investment to fair value
Initial cash payment
Total consideration
Acquiree’s
carrying
amount
before
combination
£’000
–
1
–
161
(333)
(2)
(274)
151
(296)
Fair value
adjustments
£’000
Fair value
acquired
£’000
1,035
1,035
–
–
–
–
–
–
(194)
841
1
–
161
(333)
(2)
(274)
(43)
545
(232)
313
139
(53)
227
313
Fair value adjustments have been made to align to account for the fair value of internally developed software and attributable
deferred taxation recognised upon acquisition.
The bargain purchase amount has arisen because the contingent consideration is being accounted for as staff compensation.
This amount has been recognised as a separately reported item in the period.
Ownership and control passed to YouGov on 30 November 2018 and Portent has been consolidated within the Group financial
statements from that date. In the period Portent has contributed £138,000 to Group revenue and reduced Group adjusted operating
profit by £180,000. If the acquisition had occurred on 1 August 2018. Portent would have contributed £207,000 to Group revenue
and reduced Group adjusted operating profit by £270,000.
104 YouGov Annual Report and Accounts 2019
Financial statements 10 Goodwill
Carrying amount
at 1 August 2017
Additions through
business combinations
Exchange differences
Carrying amount
at 31 July 2018
Additions through
business combinations
Carrying amount
at 31 July 2019
At 31 July 2019
Cost
Accumulated
impairment
Middle
East
£’000
USA
£’000
Nordic
£’000
Germany
£’000
CoEditor
£’000
Asia
Pacific
£’000
Galaxy
£’000
SMG
£’000
Crunch
£’000
Inconvo
£’000
Total
£’000
1,682
20,127
8,931
11,620
569
817
–
–
–
(7)
–
(71)
–
(52)
–
(49)
–
–
–
(7)
469
8,026
5
–
1,675 20,056
8,879
11,571
569
810
474
8,026
–
–
–
–
–
–
–
43,746
8,495
(181)
– 52,060
Exchange differences
136
1,634
–
–
–
225
–
324
–
–
–
68
–
2
9,831
–
669
–
688
11,188
–
2,389
1,811 21,690
9,104
11,895
569
878
476
17,857
669
688
65,637
1,811 21,690
9,104
14,386
569
878
476
17,857
669
688
68,128
Net book amount
1,811 21,690
9,104
11,895
–
–
–
(2,491)
–
569
–
878
–
–
476
17,857
–
669
–
(2,491)
688
65,637
In accordance with the Group’s accounting policy, the carrying values of goodwill and other intangible assets are reviewed annually
for impairment. The cash-generating units (“CGUs”) are consistent with those segments shown in Note 1. The 2019 impairment
review was undertaken as at 31 July 2019. The recoverable amounts of all CGUs have been determined based on value in use
calculations. This review assessed whether the carrying value of goodwill was supported by the net present value of future cash
flows derived from assets using a projection period of five years for each CGU based on approved budget numbers.
The sources of the assumptions used in making the assessment are as follows:
• growth rates are internal forecasts based on both internal and external market information;
• margins reflect past experience, adjusted for expected changes;
• terminal growth rates based on management’s estimate of future long-term average growth rates; and
• discount rates based on Group WACC, adjusted where appropriate.
Annual EBITDA growth rates of 2.25% have been assumed in perpetuity beyond year five. The pre-tax weighted average costs of
capital used to discount the future cash flows to their present values are Middle East 10% (2018: 10%), USA 14% (2018: 17%), Nordic
13% (2018: 13%), Germany 15% (2018: 15%) and Asia Pacific 12% (2018: 12%).
Management has considered reasonable possible changes in the above key assumptions and performed sensitivity analyses under
these scenarios. This analysis shows that sufficient headroom exists and would not give rise to any further impairment.
105
Financial statements Notes to the Consolidated financial statements
for the year ended 31 July 2019 continued
Consumer
panel
£’000
Software and
software
development
£’000
Customer
contracts
and lists
£’000
Patents and
trademarks
£’000
Product
development
costs
£’000
19,768
(15,568)
4,200
23,374
(17,774)
5,600
5,548
(4,412)
1,136
3,581
(3,341)
240
900
(862)
38
Total
£’000
53,171
(41,957)
11,214
4,200
5,600
1,136
240
38
11,214
2,834
–
–
(2,555)
–
–
(5)
404
3,928
97
(257)
(3,519)
(220)
(1)
4,474
6,032
–
–
1,810
–
–
(466)
(9)
2,471
39
–
–
(7)
–
–
–
–
12
–
(2)
–
–
–
3,277
3,940
1,907
(2,821)
(3,519)
(686)
(15)
272
48
13,297
22,566
27,355
(18,092)
(21,323)
4,474
6,032
7,339
(4,868)
2,471
3,603
(3,331)
272
911
61,774
(863)
(48,477)
48
13,297
4,474
6,032
2,471
272
48
13,297
3,952
–
10
(3,226)
–
(3)
–
245
5,452
667
4,806
2,487
(310)
(4,589)
(87)
48
13
–
–
–
–
–
(583)
–
37
28
–
–
(11)
–
–
–
4
9,067
1,925
293
–
–
–
–
–
–
(48)
–
–
4,647
4,806
2,497
(3,547)
(4,589)
(673)
–
299
16,737
17,184
32,872
5,232
1,389
873
57,550
(11,732)
(23,805)
(3,307)
(1,096)
(873)
(40,813)
5,452
9,067
1,925
293
–
16,737
11 Other intangible assets
At 1 August 2017
Cost
Accumulated amortisation
Net book amount
Year ended 31 July 2018
Opening net book amount
Additions:
Separately acquired
Internally developed
Through business combinations
Amortisation charge:
Separately acquired
Internally developed
Business combinations
Exchange differences
Closing net book amount
At 31 July 2018
Cost
Accumulated amortisation
Net book amount
Year ended 31 July 2018
Opening net book amount
Additions:
Separately acquired
Internally developed
Through business combinations
Amortisation charge:
Separately acquired
Internally developed
Business combinations
Reclassifications
Exchange differences
Closing net book amount
At 31 July 2019
Cost
Accumulated amortisation
Net book amount
106 YouGov Annual Report and Accounts 2019
Financial statements 12 Property, plant and equipment
At 1 August 2017
Cost
Accumulated depreciation
Net book amount
Year ended 31 July 2018
Opening net book amount
Additions:
Separately acquired
Business combinations
Disposals
Depreciation
Exchange differences
Closing net book amount
At 31 July 2018
Cost
Accumulated depreciation
Net book amount
Year ended 31 July 2019
Opening net book amount
Additions:
Separately acquired
Business combinations
Disposals
Depreciation
Exchange differences
Closing net book amount
At 31 July 2019
Cost
Accumulated depreciation
Net book amount
Freehold
property
£’000
Leasehold
property
improvements
£’000
Computer
equipment
£’000
Fixtures and
fittings
£’000
Motor
vehicles
£’000
1,682
(559)
1,123
1,312
(703)
609
3,787
(2,791)
996
1,788
(1,288)
500
158
(108)
50
Total
£’000
8,727
(5,449)
3,278
1,123
609
996
500
50
3,278
–
–
–
(82)
(6)
1,035
1,675
(640)
1,035
16
4
(2)
(231)
(4)
392
1,336
(944)
392
791
1
(6)
(679)
(2)
1,101
4,322
(3,221)
1,101
144
44
(4)
(216)
(4)
464
1,909
(1,445)
464
18
–
–
(23)
–
45
167
(122)
45
969
49
(12)
(1,231)
(16)
3,037
9,409
(6,372)
3,037
1,035
392
1,101
464
45
3,037
–
–
–
(86)
79
1,028
1,811
(783)
1,028
1,201
880
632
–
(3)
(343)
21
1,268
2,545
(1,277)
1,268
5
–
(750)
42
1,278
5,195
(3,917)
1,278
–
(3)
(284)
11
820
2,421
(1,601)
820
–
–
–
(18)
3
30
181
(151)
30
2,713
5
(6)
(1,481)
156
4,424
12,153
(7,729)
4,424
All property, plant and equipment disclosed above in both the year ended 31 July 2019 and 31 July 2018, with the exception of those
items held under lease purchase agreements, are free from restrictions on title.
107
Financial statements Notes to the Consolidated financial statements
for the year ended 31 July 2019 continued
12 Property, plant and equipment continued
The net book value of assets held under finance leases is as follows:
At 31 July 2018
Cost
Accumulated depreciation
Net book amount
At 31 July 2019
Cost
Accumulated depreciation
Net book amount
Computer
equipment
£’000
Fixtures and
fittings
£’000
Total
£’000
61
(61)
–
62
(62)
–
36
(36)
–
37
(37)
–
97
(97)
–
99
(99)
–
108 YouGov Annual Report and Accounts 2019
Financial statements 13 Investments
(a) Interests in subsidiaries
The table below gives details of the Group’s subsidiaries at 31 July 2019. Registered addresses for all subsidiaries can be found in
Note 24 to the Parent Company Financial Statements. All subsidiaries have coterminous year ends, except where indicated below,
and are included in the consolidated financial statements.
Proportion held
Country of
incorporation
Class of
share capital
held
By parent
company
By the
Group
Nature of the
business
YouGov Services Limited
YouGov Stone Limited
CoEditor LTD
SMG Insight Limited
Margaux Matrix Limited
MMH 2014 Ltd
Crunch Cloud Analytics Limited
Inconversation Media Limited
Portent.io Limited
YouGov America Inc
YouGov America Holdings LLC *
Crunch Cloud Analytics, LLC
Portent Technologies Inc
YouGov Research Canada Limited
YouGov Deutschland GmbH
YouGov Data & Analytics GmbH
YouGov Nordic and Baltic A/S
YouGov Sweden AB
YouGov Norway AS
YouGov Finland OY
YouGov M.E. FZ LLC
YouGov M.E. Egypt LLC
Iridescent Productions Company Limited
YouGov France SASU
YouGov Spain S.L.U
YouGov Italia Srl
Consilium Limited
Consilium Asia Limited
YouGov URC (Shanghai) Market Research Co., Ltd.
YouGov Singapore Pte Limited
PT YouGov Consulting Indonesia
YouGov Malaysia SDN BHD
YouGov (Thailand) CO. LTD
YouGov Research Pty Ltd.
YouGov Galaxy Pty Limited
YG Research India Private Limited
YouGov Poland Sp. z o.o.*
YouGov s.r.l.*
UK
UK
UK
UK
UK
UK
UK
UK
UK
USA
USA
USA
USA
Canada
Germany
Germany
Denmark
Sweden
Norway
Finland
U.A.E.
Egypt
Iraq
France
Spain
Italy
Hong Kong
China
China
Singapore
Indonesia
Malaysia
Thailand
Australia
Australia
India
Poland
Romania
* Year end is 31 December.
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
100%
100%
100%
100%
0%
0%
79.7%
100%
100%
0%
100%
0%
0%
100%
100%
100%
100%
0%
0%
0%
100%
5%
0%
100%
100%
100%
100%
0%
0%
0%
5%
0%
0%
100%
0%
100%
0%
100%
100%
100%
100%
100%
100%
100%
79.7%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
90%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Software development
Dormant
Dormant
Market research
Market research
Holding Company
Software development
Market research
Market research
Market research
Holding company
Market research
Market research
Market research
Market research
Market research
Market research
Market research
Market research
Market research
Market research
Dormant
Media production
Market research
Market research
Market research
Market research
Dormant
Market research
Market research
Market research
Market research
Market research
Market research
Market research
Market research
Software development
Operations services
109
Financial statements Notes to the Consolidated financial statements
for the year ended 31 July 2019 continued
13 Investments continued
(b) Interest in associates
Investments in associates comprise:
Carrying amount at 1 August
Share of net (loss)/profit of associates
Dividends received from associates
Consideration for business combination
Interest in associates at 31 July
The Group’s share of the revenue and profit/(loss) after tax and assets and liabilities of associates is:
2019
£’000
191
(52)
–
(139)
–
2018
£’000
345
66
(220)
–
191
Revenue
(Loss)/Profit after tax
Non-current assets
Current assets
Current liabilities
Non–current liabilities
Net liabilities
14 Trade and other receivables
Trade receivables
Provision for trade receivables
Net trade receivables
Other receivables
Prepayments
Accrued income
SMG Insight Limited
Portent.io Limited
31 July
2019
£’000
–
–
–
–
–
–
–
31 July
2018
£’000
1,256
44
–
–
–
–
–
31 July
2019
£’000
24
(52)
–
–
–
–
–
31 July
2018
£’000
129
22
–
24
(34)
(19)
(29)
31 July 2019
£’000
31 July 2018
£’000
19,235
(2,071)
17,164
4,357
3,482
8,723
33,726
21,099
(1,226)
19,873
3,775
2,448
8,576
34,672
The Directors consider that the carrying amount of trade and other receivables approximate to their fair value.
As at 31 July 2019, trade receivables of £10,129,000 (2018: £11,229,000) were overdue but not impaired. These relate to a number
of customers for which there is no recent history of default or any other indication that the receivable should not be fully collectable.
The ageing analysis of past due trade receivables which are not impaired is as follows:
Up to three months overdue
Three to six months overdue
Six months to one year overdue
More than one year overdue
110 YouGov Annual Report and Accounts 2019
31 July 2019
£’000
31 July 2018
£’000
6,893
2,018
772
446
10,129
5,833
3,833
823
740
11,229
Financial statements
14 Trade and other receivables continued
Movement on the Group provision for impairment of trade receivables is as follows:
Provision for receivables impairment at 1 August as previously reported
Restatement on adoption of IFRS 9
Provision for receivables impairment at 1 August restated
Movement in the year (credited)/charged to the income statement
Exchange differences
Provision for receivables impairment at 31 July
2019
£’000
1,226
950
2,176
(182)
77
2,071
2018
£’000
544
–
544
671
11
1,226
The creation and release of the provision for impaired receivables has been included in the Consolidated Income Statement.
The other classes within trade and other receivables do not contain impaired assets. The maximum exposure to credit risk
at the reporting date is the carrying value of each class of receivable mentioned above.
The average length of time taken by customers to settle receivables is 46 days (2018: 56 days). Concentrations of credit risk do exist
with certain clients with which we have trading relationships but none has a history of default and all command a certain stature
within the marketplace, which minimises any potential risk of default. Material balances (defined as greater than £250,000
(2018: greater than £250,000)) represent 21% of trade receivables (2018: 40%).
15 Cash and cash equivalents
Cash at bank and in hand
Cash and cash equivalents
31 July 2019
£’000
31 July 2018
£’000
37,925
37,925
30,621
30,621
Cash and cash equivalents are held at either variable rates or at rates fixed for periods of no longer than three months.
Cash and cash equivalents include the following for the purposes of the cash flows:
Cash and cash equivalents
Cash and cash equivalents
16 Trade and other payables
Trade payables
Accruals
Deferred income
Other payables
31 July 2019
£’000
31 July 2018
£’000
37,925
37,925
30,621
30,621
31 July 2019
£’000
31 July 2018
£’000
2,355
17,050
14,469
6,167
40,041
2,787
13,808
12,521
5,882
34,998
Included within other payables are £263,000 (2018: £80,000) of contributions due in respect of defined contribution
pension schemes.
111
Financial statements Notes to the Consolidated financial statements
for the year ended 31 July 2019 continued
17 Contingent consideration
At 1 August 2017
Acquisition consideration provided during
the year
Contingent staff cost provided during the year
Settled during the year
Discount unwinding
Foreign exchange differences
Balance at 31 July 2018
Included within current liabilities
Included within non-current liabilities
Acquisition consideration provided during
the year
Decrease recognised in income statement
in the year
Contingent staff cost provided during the year
Contingent transaction costs
Settled during the year
Discount unwinding
Foreign exchange differences
Balance at 31 July 2019
Included within current liabilities
Included within non-current liabilities
Galaxy DP
Pty Ltd
£’000
SMG
Insight Ltd
£’000
Inconversation
Media Ltd
£’000
Portent.io Ltd
£’000
–
184
785
(190)
5
(1)
783
510
273
–
–
729
–
(745)
8
3
778
778
–
–
5,727
–
–
9
–
5,736
899
4,837
7,513
(3,192)
–
–
(3,775)
88
–
6,370
2,013
4,357
–
–
–
–
–
–
–
–
–
605
–
433
–
–
6
–
1,044
–
1,044
–
–
–
–
–
–
–
–
–
–
–
1,672
201
–
5
–
1,878
–
1,878
The minimum and maximum amounts payable are as follows
Minimum amount payable
Maximum amount payable
Galaxy DP
Pty Ltd
£’000
–
1,179
SMG
Insight Ltd
£’000
Inconversation
Media Ltd
£’000
Portent.io Ltd
£’000
–
16,225
3
4,000
–
19,773
Total
£’000
–
5,911
785
(190)
14
(1)
6,519
1,409
5,110
8,118
(3,192)
2,834
201
(4,520)
107
3
10,070
2,791
7,279
Total
£’000
3
41,177
The value of contingent consideration payable is estimated by applying earn-out multiples as defined in purchase agreements
to management forecast and discounting the resulting amount payable to present value.
112 YouGov Annual Report and Accounts 2019
Financial statements 18 Provisions
At 1 August 2017
Provided during the year
Utilised during the year
Discount unwinding
Foreign exchange differences
Balance at 31 July 2018
Included within current liabilities
Included within non-current liabilities
Provided during the year
Utilised during the year
Discount unwinding
Foreign exchange differences
Balance at 31 July 2019
Included within current liabilities
Included within non-current liabilities
Panel
incentives
£’000
Staff
gratuity
£’000
6,655
8,306
(7,655)
61
(14)
7,353
3,689
3,664
10,550
(9,248)
110
273
9,038
4,931
4,107
316
282
(162)
–
2
438
102
336
296
(169)
–
(49)
516
–
516
Total
£’000
6,971
8,588
(7,817)
61
(12)
7,791
3,791
4,000
10,846
(9,417)
110
224
9,554
4,931
4,623
The panel incentive provision represents the Directors’ best estimate of the future liability in relation to the value of panel incentives
that have accrued in the panellists’ virtual accounts up to 31 July 2019. The provision of £9.0m represents 46% of the maximum
potential liability of £19.8m (2018: £7.4m representing 45% of the maximum potential liability of £16.4m). The factors considered in
estimating the appropriate percentage of the total potential liability to be provided against at each reporting date include: panel
churn rates, panel activity rates, current redemption patterns and the time value of money.
The staff gratuity provision is a statutory obligation under UAE labour law, whereby each employee on termination of their contract
is due a payment dependent upon their number of years’ service and nature of the termination. The liability of £0.5m at 31 July 2019
(2018: £0.4m) represents the liability that the Group is obliged to pay as at the reporting date weighted against historical rates of
resignation and redundancy.
19 Deferred tax assets and liabilities
Deferred tax asset
Balance at 1 August 2017
Acquired on business combination
Recognised in the income
statement
Recognised in equity
Foreign exchange differences
Balance at 31 July 2018
as originally presented
Change in accounting policy
(Note 27)
Restated balance at 1 August 2018
Acquired on business combination
Recognised in the income
statement
Recognised in equity
Foreign exchange differences
Balance at 31 July 2019
Intangible
assets
£’000
210
–
217
–
6
433
–
433
–
(175)
–
7
265
Property,
plant and
equipment
£’000
135
–
3
–
–
138
–
138
–
328
–
23
489
Tax
losses
£’000
2,945
–
606
–
65
3,616
–
3,616
156
(501)
–
136
3,407
Share based
payments
£’000
Other
timing
differences
£’000
1,492
–
513
1,794
–
3,799
–
3,799
–
145
1,754
–
5,698
1,272
16
226
–
(66)
1,448
186
1,634
–
(401)
–
116
1,349
£7,459,000 (2018: £946,000) of the above deferred tax assets are expected to be recovered within one year.
Total
£’000
6,054
16
1,565
1,794
5
9,434
186
9,620
156
(604)
1,754
282
11,208
113
Financial statements Notes to the Consolidated financial statements
for the year ended 31 July 2019 continued
19 Deferred tax assets and liabilities continued
The deferred taxation asset in respect of income tax losses are broken down by jurisdiction as follows:
UK
Nordic
Germany
Other
31 July 2019
£’000
31 July 2018
£’000
3,965
1,079
1,788
144
3,407
484
891
2,121
120
3,616
Utilisation of tax losses is dependent upon future profits being generated and deferred tax assets have been recognised only to the
extent where management budgets and forecasts show sufficient profits being generated to discharge these. Losses were incurred
in the year in Asia Pacific and there is significant uncertainty around the recoverability of the deferred tax assets in this jurisdiction,
therefore tax losses in this region of £928,000 (2018: £829,000) have not been recognised. Based on management forecasts and
after carrying out sensitivity analysis, the deferred tax assets in Germany and the Nordics are considered recoverable.
Intangible
assets
£’000
Property, plant
and equipment
£’000
Other
timing
differences
£’000
1,280
383
113
(3)
1,773
148
(80)
18
1,859
–
–
–
–
–
–
33
1
34
403
–
(44)
(4)
355
–
(100)
10
265
2019
£’000
7,306
186
7,492
8
(457)
1,754
253
9,050
Total
£’000
1,683
383
69
(7)
2,128
148
(147)
29
2,158
2018
£’000
4,371
–
4,371
(367)
1,496
1,794
12
7,306
Deferred tax liabilities
Balance at 1 August 2017
Acquired on business combination
Recognised in the income statement
Foreign exchange differences
Balance at 31 July 2018
Acquired on business combination
Recognised in the income statement
Foreign exchange differences
Balance at 31 July 2019
£840,000 (2018: £190,000) of the above deferred tax liabilities are expected to be paid within one year.
The net movement on the deferred income tax account is as follows:
Balance at 1 August as originally presented
Change in accounting policy (Note 27)
Restated balance at 1 August
Acquired on business combination
Recognised in the income statement
Recognised in equity
Foreign exchange differences recognised in other comprehensive income
Balance at 31 July
114 YouGov Annual Report and Accounts 2019
Financial statements 20 Risk management objectives and policies
The Group is exposed to foreign currency, capital, liquidity and interest rate risk, which result from both its operating and investing
activities. The Group’s risk management is coordinated in close cooperation with the Board of Directors, and focuses on actively
securing the Group’s short-to-medium-term cash flows by minimising the exposure to financial markets. The most significant
financial risks to which the Group is exposed are described below. Also refer to the accounting policies.
Foreign currency risk
The Group is exposed to translation and transaction foreign exchange risk. The currencies where the Group is most exposed
to volatility are US Dollars, Euro and UAE Dirham. Currently, the Group aims to align assets and liabilities in a particular market.
The Group will continue to review its currency risk position as the overall business profile changes.
The presentational and transactional currency of the Group is considered to be UK Sterling.
Foreign currency denominated financial assets and liabilities, translated into UK Sterling at the closing rate are as follows:
Financial assets
Financial liabilities
Short-term exposure
Financial assets
Financial liabilities
Long-term exposure
2019
£’000
2018
£’000
US
Dollar
35,709
Euro
7,710
UAE
Dirham
Other
currencies
US
Dollar
Euro
UAE
Dirham
Other
currencies
1,738
9,466
24,844
6,430
2,274
8,338
(7,673)
(2,322)
(1,056)
(4,612)
(7,237)
(1,840)
(844)
(3,999)
28,036
5,388
682
4,854
17,607
4,590
1,430
4,339
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(273)
(273)
The effect of UK Sterling strengthening by 1% against our subsidiaries’ functional currencies (US Dollar, Euro, UAE Dirham and other
currencies) would have had the following impact upon translation:
Net result for the year
Equity
2019
£’000
Euro
(10)
(142)
US
Dollar
(104)
(459)
UAE
Dirham
Other
currencies
(9)
(116)
13
(3)
US
Dollar
(54)
(269)
2018
£’000
Euro
5
(53)
UAE
Dirham
Other
currencies
(8)
(123)
29
56
If the UK Sterling had weakened by 1% against the US Dollar, Euro, UAE Dirham and other currencies the inverse of the impact
above would apply.
Liquidity risk
The Group seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash
assets safely and profitably.
The Group currently has no general borrowing arrangement in place (although specific fixed value borrowings are held within the
Group) and prepares cash flow forecasts which are reviewed at Board meetings to ensure liquidity.
115
Financial statements Notes to the Consolidated financial statements
for the year ended 31 July 2019 continued
20 Risk management objectives and policies continued
As at 31 July 2019, the Group’s liabilities have undiscounted contractual maturities, which are summarised below:
At 31 July 2019
Contingent consideration
Trade and other payables
Current
Non-current
Within
6 months
£’000
778
8,018
6 to 12
months
£’000
2,013
504
1 to 5 years
£’000
7,279
–
Later than
5 years
£’000
–
–
This compares to the maturity of the Group’s financial liabilities in the previous reporting period as follows:
At 31 July 2018
Contingent consideration
Trade and other payables
Current
Non-current
Within
6 months
£’000
510
8,536
6 to 12
months
£’000
899
130
1 to 5 years
£’000
5,110
–
Later than
5 years
£’000
–
–
The Group has sufficient financial risk management policies in place to ensure that all trade payables are settled within the
respective credit period.
Capital risk management
The Group manages its capital to ensure that all entities within the Group are able to continue as a going concern. The Board
has taken the decision at this stage to minimise external debt, whilst trying to maximise earnings from the cash currently held.
Capital consists of the following items:
Cash and cash equivalents
Equity attributable to shareholders of the parent company
The Group has no externally imposed capital requirements.
Interest rate risk
31 July 2019
£’000
31 July 2018
£’000
37,925
(108,582)
(70,657)
30,621
(92,071)
(61,450)
The Group manages its interest rate risk by negotiating fixed interest rates on deposits for periods of up to three months.
The average cash and cash equivalents balance, net of bank overdrafts, over the course of the year was £33.5m (2018: £26.7m).
Management does not believe that the Group is subject to material interest rate risk.
Fair values of financial assets and financial liabilities
Where market values are not available, fair values of financial assets and financial liabilities have been calculated by discounting
expected future cash flows at prevailing interest rates and by applying year-end foreign exchange rates.
Primary financial instruments held or issued to finance the Group’s operations:
31 July 2019
31 July 2018
Book value
£’000
30,244
37,925
(25,571)
(10,070)
–
Fair value
£’000
30,244
37,925
(25,571)
(10,070)
–
Book value
£’000
Fair value
£’000
32,224
30,621
(22,474)
(6,519)
–
32,224
30,621
(22,474)
(6,519)
–
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Contingent consideration
Bank overdrafts
116 YouGov Annual Report and Accounts 2019
Financial statements 20 Risk management objectives and policies continued
Fair value estimation
The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined
as follows:
• Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).
• Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices)
or indirectly (that is, derived from prices) (Level 2).
• Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3).
Liabilities
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Contingent consideration
–
–
10,070
10,070
Level 1
£’000
–
Level 2
£’000
–
Level 3
£’000
6,519
Total
£’000
6,519
31 July 2019
£’000
31 July 2018
£’000
The following table presents the changes in Level 3 instruments.
Contingent consideration
Balance at 1 August
Provided consideration on business combination
Recognised in the income statement
Settled
Foreign exchange differences
Balance at 31 July
2019
£’000
6,519
8,118
(50)
(4,520)
3
10,070
2018
£’000
–
5,911
799
(190)
(1)
6,519
21 Share capital and share premium
The Company only has one class of share. Par value of each Ordinary Share is 0.2p (2018: 0.2p). All issued shares are fully paid.
At 1 August 2017
Issue of shares
At 31 July 2018 and 1 August 2018
Issue of shares
At 31 July 2019
Number of
shares
105,298,709
193,101
105,491,810
218,193
105,710,003
Share
capital
£’000
211
–
211
–
211
Share
premium
£’000
31,261
39
31,300
45
31,345
Total
£’000
31,472
39
31,511
45
31,556
During the year, 208,078 shares were issued on the exercise of share options and 10,115 in payment of Non-Executive Directors’
fees. A total of 755,000 shares were repurchased for the purposes of settling share option schemes as they vest.
117
Financial statements Notes to the Consolidated financial statements
for the year ended 31 July 2019 continued
22 Share-based payments
The charge in relation to the share-based payments in the year ended 31 July 2019 was £2,401,000 (2018: £3,571,000). Details of
the number of share options and the weighted average exercise price (WAEP) outstanding during the year are as follows:
Long Term Incentive Plan 2009
During the year ended 31 July 2019, the Long Term Incentive Plan 2009 (“LTIP 2009”) for Executive Directors, Senior Executives and
Senior Managers continued to operate but no new awards were made under the LTIP 2009 as it has been replaced by two new
incentive plans summarised below. The rules governing the LTIP 2009 are summarised in the Directors’ report on remuneration on
pages 58 to 59. The charge in relation to the LTIP 2009 in the year ended 31 July 2019 was £Nil (2018: £Nil).
Outstanding at the beginning of the year
Exercised during the year
Outstanding at the end of the year
Exercisable at the end of the year
2019
Number
814,128
(92,183)
721,945
721,945
2018
Number
865,522
(51,394)
814,128
814,128
The weighted average share price at the date LTIP 2009 options were exercised was £4.65. All of the above are nil cost options.
Long Term Incentive Plan 2014
Awards under the Long Term Incentive Plan 2014 (“LTIP 2014”) were made in the form of nil-cost options as with the LTIP 2009.
The maximum total number of shares awarded to each participant set based on their salary in the year ended 31 July 2015 and
the share price at the start of the plan. These awards were granted in three equal tranches in October 2015, 2016 and 2017 with an
additional award of 396,039 options in April 2018. Receipt of an award in each of those years was dependent upon the achievement
of specific and demanding personal targets set for that individual in the previous financial year. Vesting of awards will depend on
the Company achieving stretching targets relating to compound growth in adjusted earnings per share (“EPS”) over the five years
ending 31 July 2019 and on improvement in its operating margins. Part of the Chief Executive Officer’s award is also subject to a
Total Shareholder Return (“TSR”) condition, this part of the award will only vest if the EPS performance condition is met in full and the
Company’s TSR has grown by 200%.
The maximum number of options that can be granted under this scheme is 6,924,000 and the charge in relation to the LTIP 2014
in the year ended 31 July 2019 was £2,002,000 (2018: £3,222,000).
Outstanding at the beginning of the year
Granted during the year
Exercised during the year
Forfeited during the year
Outstanding at the end of the year
Exercisable at the end of the year
All of the above are nil cost options.
2019
Number
6,725,406
–
–
–
2018
Number
4,394,432
2,330,974
–
–
6,725,406
6,725,406
–
–
The fair value of the options granted in the year was determined using the Black Scholes model. The following assumptions were
used in both the Black Scholes model, in calculating the fair values of the options granted during the year.
Share price
Exercise price
Expected volatility
Expected life
Dividend yield
Risk-free interest rate
118 YouGov Annual Report and Accounts 2019
2019
Awards
–
–
–
–
–
–
2018
Awards
3.61
£0.00
27%
1.5 Years
0.8%
0.45%
Financial statements 22 Share-based payments continued
Deferred Share Bonus Plan 2014
The Deferred Share Bonus Plan 2014 (“DSBP 2014”) delivers a portion of managers’ (enhanced) annual bonus in shares which must
be retained for a period of two years and are subject to continued employment. The charge in relation to the DSBP 2014 in the year
ended 31 July 2019 was £398,000 (2018: £349,000).
Outstanding at the beginning of the year
Granted during the year
Vested during the year
Forfeited during the year
Outstanding at the end of the year
Exercisable at the end of the year
2019
Number
370,722
99,632
(115,895)
(21,377)
333,082
112,180
2018
Number
375,508
152,012
(131,516)
(25,282)
370,722
75,575
The weighted average share price at the date DSBP options were exercised was £4.40. All of the above are nil cost options.
The fair value of the options granted in the year was determined using the Black Scholes model. The following assumptions were
used in the Black Scholes model in calculating the fair value of the options granted during the year:
Share price
Exercise price
Expected volatility
Expected life
Dividend yield
Risk-free interest rate
2019
£’000
£4.325
£0.00
29.5%
2 Years
0.60%
0.70%
The fair value of options granted during the year determined using the Black Scholes model was £4.27 per option.
The aggregate profit and loss charge for share-based payments is disclosed in Note 2.
23 Leasing commitments
The future aggregate minimum lease rentals to be paid under non-cancellable operating leases at 31 July 2019 are as follows:
In one year or less
Between one and five years
In five years or more
31 July 2019
31 July 2018
Land and
buildings
£’000
2,855
6,344
2,491
11,690
Other
£’000
199
134
–
333
Land and
buildings
£’000
2,437
4,395
12
6,844
Other
£’000
175
226
–
401
The lease rental costs charged to the income statement for the year ended 31 July 2019 amounted to £3,139,000
(2018: £2,207,000).
119
Financial statements Notes to the Consolidated financial statements
for the year ended 31 July 2019 continued
24 Capital commitments
At 31 July 2019, the Group had capital commitments of £Nil (2018: £50,000).
25 Major non-cash transactions
During the year, the Group entered into barter transactions with parties in the Middle East and Germany with a total value
of £652,000 (2018: £606,000) to exchange the provision of market research for advertising on television, on websites and
in magazines.
26 Transactions with Directors and other related parties
Other than emoluments and the transactions set out below, there have been no transactions with Directors during the year.
As at 31 July 2019, Rosamund Shakespeare, the wife of Stephan Shakespeare, held 559,404 Ordinary Shares in the Company.
On 10 December 2013, YouGov plc entered into a joint development agreement with Crunch.io Inc, a US company in which
Doug Rivers, a senior manager of YouGov plc, had an equity interest of 40%. YouGov and Crunch.io Inc agreed jointly to fund the
development of a cloud-based data analytics software application in which both parties have usage rights. On 6 September 2018
the joint development agreement was terminated and YouGov purchased the business of Crunch.io Inc including the Crunch
software asset for $2,670,000 (£2,063,000).
Trading between YouGov plc and Group companies is excluded from the related party Note as this has been eliminated
on consolidation.
27 Impact of new accounting standards
This note explains the impact of the adoption of IFRS 9 and IFRS 15 on the Group’s financial statements.
IFRS 9
IFRS 9 replaces the provisions of IAS 39 that relate to the recognition, classification and measurement of financial assets
and financial liabilities and the impairment of financial assets.
The adoption of IFRS 9 from 1 August 2018 resulted in changes in accounting policies and adjustments to the amounts recognised
in the financial statements. The Group’s trade receivables and accrued income from sales of products are subject to the new
expected credit loss model. In accordance with the transitional provisions in paragraphs 7.2.15 and 7.2.26 of IFRS 9, comparative
figures have not been restated. The reclassifications and the adjustments arising from the new impairment rules are therefore
recognised in the opening balance sheet on 1 August 2018.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses, which uses a lifetime expected loss
allowance for all trade receivables and contract assets. This resulted in an increase of the loss allowance on 1 August 2018 of
£950,000 for trade receivables and £136,000 for accrued income with a reduction in VAT payable of £159,000 and the recognition
of an associated deferred tax asset of £186,000. The interest impact of IFRS 9 was immaterial. While cash and cash equivalents are
also subject to the impairment requirements of IFRS 9, the identified impairment loss was also immaterial.
IFRS 15
The adoption of IFRS 15 from 1 August 2018 resulted in changes in accounting policies relating to revenue recognition. The new
accounting policies have not materially altered the revenue recognised by the Group in prior financial years and so restatement
of prior year comparatives is not necessary.
120 YouGov Annual Report and Accounts 2019
Financial statements 27 Impact of new accounting standards continued
Impact on the financial statements
The impact of the change in impairment methodology on the Group’s retained earnings and equity is disclosed in the table below.
Line items that were not affected by the changes have not been included.
Deferred tax asset
Total non-current assets
Bad debt provision
Accrued income
Trade and other receivables
Total current assets
Total assets
Other payables
Total current liabilities
Total liabilities
Net assets
Retained earnings
Total equity
The adoption of IFRS 15 has not impacted the financial statements in the period.
28 Events after the reporting year
There have been no events after the end of the reporting year.
Balance sheet as
at 31 July 2018
£’000
Restatement for
IFRS 9
£’000
Balance sheet as
at 1 August 2018
£’000
9,434
78,019
(1,226)
8,576
34,672
66,735
144,754
5,882
41,445
52,683
92,071
36,290
92,071
186
186
(950)
(136)
(1,086)
(1,086)
(900)
(159)
(159)
(159)
(741)
(741)
(741)
9,620
78,205
(2,176)
8,440
33,586
65,649
143,854
5,723
41,286
52,524
91,330
35,549
91,330
121
Financial statements Independent auditors’ report to the members of YouGov plc
Report on the audit of the Parent Company financial statements
Opinion
In our opinion, YouGov plc’s Parent Company financial statements (the “financial statements”):
• give a true and fair view of the state of the Parent Company’s affairs as at 31 July 2019 and of its cash flows for the year
then ended;
• have been properly prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European
Union and as applied in accordance with the provisions of the Companies Act 2006; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report and Accounts 2019 (the “Annual Report”), which
comprise: the Parent Company Statement of Financial Position as at 31 July 2019; the Parent Company Statement of Cash Flows;
the Parent Company Statement of Changes in Equity for the year then ended; the accounting policies; and the notes to the
financial statements.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements
section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
We remained independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed entities, and we have fulfilled our other
ethical responsibilities in accordance with these requirements.
Our audit approach
Overview
• Overall materiality: £422,000, based on 5% of profit before tax. This is a change from our 2018 audit
where our materiality (£305,000) was based on 1% of revenues. We now consider profit before tax to
be the most appropriate benchmark used in assessing the performance of the Parent Company.
• The Parent Company was audited by the Group audit team based in London.
• We have no key audit matters to report.
Materiality
Audit scope
Key audit
matters
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial
statements. In particular, we looked at where the Directors made subjective judgements, for example in respect of significant
accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our
audits we also addressed the risk of management override of internal controls, including evaluating whether there was evidence of
bias by the Directors that represented a risk of material misstatement due to fraud.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not
due to fraud) identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation
of resources in the audit; and directing the efforts of the engagement team. We determined that there were no key audit matters
applicable to the Parent Company to communicate in our report.
122 YouGov Annual Report and Accounts 2019
Financial statements
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of the Parent Company, the accounting processes and controls, and the
industry in which it operates.
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial
statements. In particular, we looked at where the Directors made subjective judgements, for example in respect of significant
accounting estimates that involved making assumptions and considering future events that are inherently uncertain.
As in all of our audits we also addressed the risk of management override of internal controls, including evaluating whether there
was evidence of bias by the directors that represented a risk of material misstatement due to fraud.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These,
together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our
audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both
individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall materiality
£422,000 (2018: £305,000).
How we determined it
5% of profit before tax.
Rationale for benchmark applied This year we have used profit before tax as we have adjudged this to be a key metric by
which shareholders measure performance. This is a change from our 2018 audit where our
materiality was based on 1% of revenues. We now consider profit before tax to be the most
appropriate benchmark used in assessing the performance of the Parent Company.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above £21,000
(2018: £13,500) as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
ISAs (UK) require us to report to you when:
• the Directors’ use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
• the Directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt
about the Parent Company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve
months from the date when the financial statements are authorised for issue.
We have nothing to report in respect of the above matters.
However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Parent Company’s
ability to continue as a going concern. For example, the terms on which the United Kingdom may withdraw from the European
Union are not clear, and it is difficult to evaluate all of the potential implications on the Parent Company’s trade, customers, suppliers
and the wider economy.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’
report thereon. The Directors are responsible for the other information. Our opinion on the financial statements does not cover the
other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this
report, any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are
required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material
misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact. We have nothing to report based on these responsibilities.
With respect to the Strategic Report and Directors’ Report, we also considered whether the disclosures required by the UK
Companies Act 2006 have been included.
Based on the responsibilities described above and our work undertaken in the course of the audit, ISAs (UK) require us also to
report certain opinions and matters as described below.
123
Financial statements Independent auditors’ report to the members of YouGov plc
Report on the audit of the Parent Company financial statements continued
Strategic Report and Directors’ Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic Report and Directors’
Report for the year ended 31 July 2019 is consistent with the financial statements and has been prepared in accordance with
applicable legal requirements.
In light of the knowledge and understanding of the Parent Company and its environment obtained in the course of the audit,
we did not identify any material misstatements in the Strategic Report and Directors’ Report.
Responsibilities for the financial statements and the audit
Responsibilities of the Directors for the financial statements
As explained more fully in the Directors’ Responsibilities Statement set out on page 71, the Directors are responsible for the
preparation of the financial statements in accordance with the applicable framework and for being satisfied that they give a true
and fair view. The Directors are also responsible for such internal control as they determine is necessary to enable the preparation
of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Parent Company’s ability to continue as a going
concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Parent Company or to cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the Parent Company’s members as a body in accordance
with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or
assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come
save where expressly agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not received all the information and explanations we require for our audit; or
• adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been
received from branches not visited by us; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• the financial statements are not in agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Other matter
We have reported separately on the Group financial statements of YouGov plc for the year ended 31 July 2019.
Brian Henderson (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
8 October 2019
124 YouGov Annual Report and Accounts 2019
Financial statements Parent Company Statement of Financial Position
as at 31 July 2019
Assets
Non-current assets
Intangible assets
Property, plant and equipment
Investment in subsidiaries
Investments in associates
Deferred tax assets
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Current tax liabilities
Contingent consideration
Provisions
Total current liabilities
Net current assets
Non-current liabilities
Provisions
Contingent consideration
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued share capital
Share premium
Merger reserve
Retained earnings:
As at 1 August
Profit for the year
Other changes in retained earnings
Retained earnings as at 31 July
Total equity
Note
31 July 2019
£’000
31 July 2018
£’000
33
34
35
36
42
37
38
39
40
41
41
40
42
44
44
2,065
1,869
61,743
–
3,405
69,082
48,397
3,928
52,325
1,859
410
49,893
280
2,607
55,049
36,359
12,136
48,495
121,407
103,544
30,035
1,123
2,013
2,302
35,473
16,852
1,684
7,279
32
8,995
44,468
76,939
211
31,345
9,239
32,779
7,620
(4,255)
36,144
76,939
21,152
494
899
1,628
24,173
24,322
1,005
4,837
–
5,842
30,015
73,529
211
31,300
9,239
25,566
5,022
2,191
32,779
73,529
The notes and accounting policies on pages 128 to 142 form an integral part of these financial statements. The financial statements
on pages 126 to 142 were authorised for issue by the Board of Directors on 8 October 2019 and signed on its behalf by:
Alex McIntosh,
Chief Financial Officer
YouGov plc
Registered No. 03607311
125
Financial statements
Parent Company Statement of Changes in Equity
for the year ended 31 July 2019
Balance at 31 August 2017
Profit for the year
Total comprehensive income for the year
Dividends paid
Share-based payments
Tax in relation to share-based payments
Total transactions with owners recognised
directly in equity
Balance at 31 July 2018 as originally presented
Change in accounting policy
Restated total equity at 1 August 2018
Profit for the year
Total comprehensive income for the year
Issue of shares
Acquisition of treasury shares
Dividends paid
Share-based payments
Tax in relation to share-based payments
Total transactions with owners recognised
directly in equity
Balance at 31 July 2019
Note
Share
capital
£’000
211
Share
premium
£’000
31,261
Merger
reserve
£’000
9,239
32
45
42
50
44
44
32
45
42
–
–
–
–
–
–
211
–
211
–
–
–
–
–
–
–
–
211
–
–
–
39
–
39
–
–
–
–
–
–
31,300
–
31,300
9,239
–
9,239
–
–
45
–
–
–
–
45
31,345
–
–
–
–
–
–
–
–
9,239
Retained
earnings
£’000
25,566
5,022
5,022
(2,106)
3,571
726
2,191
32,779
(578)
32,201
7,620
7,620
–
(3,738)
(3,167)
2,401
827
(3,677)
36,144
Total
equity
£’000
66,277
5,022
5,022
(2,106)
3,610
726
2,230
73,529
(578)
72,951
7,620
7,620
45
(3,738)
(3,167)
2,401
827
(3,632)
76,939
The notes and accounting policies on pages 128 to 142 form an integral part of these financial statements.
126 YouGov Annual Report and Accounts 2019
Financial statements Note
2019
£’000
2018
£’000
8,445
5,694
(2,550)
(1,170)
Parent Company Statement of Cash Flows
for the year ended 31 July 2019
Cash flows from operating activities
Profit before taxation
Adjustments for:
Finance income
Finance costs
Amortisation of intangibles
Depreciation
Share-based payments
Other non-cash profit items
Increase in trade and other receivables
Increase in trade and other payables
Increase in provisions
Cash generated from operations
Interest paid
Income taxes paid
Net cash generated from operating activities
Cash flow from investing activities
Acquisition of subsidiaries
Settlement of contingent consideration
Purchase of property, plant and equipment
Purchase of intangible assets
Proceeds from the sale of intangible assets
Interest received
Dividends received from subsidiaries
Net cash used in investing activities
Cash flows from financing activities
Intercompany loans provided
Proceeds from the issue of share capital
Purchase of treasury shares
Dividends paid to shareholders
Net cash used in financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Exchange gain on cash and cash equivalents
Cash and cash equivalents at end of year
33
34
31,45
40
34
33
33
44
32
38
452
1,106
527
708
(2,651)
(6,094)
5,965
1,337
7,245
(278)
–
6,967
(228)
(3,775)
(1,986)
(6,182)
4,870
350
2,200
(4,751)
(3,701)
45
(3,738)
(3,167)
(10,562)
(8,345)
12,136
137
3,928
The notes and accounting policies on pages 128 to 142 form an integral part of these financial statements..
391
964
262
1,317
(1,519)
(623)
1,357
295
6,968
–
(796)
6,172
(1,104)
–
(142)
(930)
–
21
–
(2,155)
(1,084)
–
–
(2,106)
(3,190)
827
11,184
125
12,136
127
Financial statements
Notes to the Parent Company financial statements
for the year ended 31 July 2019
29 Significant accounting policies
The separate financial statements of the Company are presented as required by the Companies Act 2006. As permitted by that Act,
the separate financial statements have been prepared in accordance with International Financial Reporting Standards as adopted
by the European Union (IFRSs as adopted by the EU), IFRS Interpretations Committee (IFRS IC) Interpretations (as adopted by the
EU) and the Companies Act 2006 applicable to companies reporting under IFRS.
The financial statements have been prepared on the historical cost basis. The principal accounting policies adopted are the same as
those set out in the consolidated financial statements with the addition of the policies noted below.
Investments in subsidiary undertakings and investments in associates are stated at cost less provisions for impairment.
Investments are reviewed for impairment if there are indicators that the carrying value may not be recoverable.
The grant by the Company of options over its equity instruments to the employees of subsidiary undertakings in the Group is
treated as a capital contribution. The fair value of employee services received, measured by reference to the grant date fair value, is
recognised over the vesting period as an increase to investment in subsidiary undertakings, with a corresponding credit to equity.
In the process of applying the Company’s accounting policies the Directors are required to make estimates and judgements
that may affect the financial statements. These estimates and judgements are the same as those applied for the Group
financial statements.
From 1 August 2019 the Company will be required to adopt IFRS 16, “Leases”: This standard replaces the current guidance in IAS
17 and is a far-reaching change in accounting by lessees in particular. Management has assessed the value of all leases for which
the Group is liable for as at 1 August 2019 and determined that a total lease liability of £6,749,000 will need to be recognised at the
adoption date. The corresponding right of use asset is valued at £6,685,000. The depreciation expense for the year ending 31 July
2020 is estimated to be £828,000, with interest costs of £158,000. The standard will be adopted using full retrospective application,
with restated comparative results provided.
30 Profit of the parent company
The parent company has taken advantage of Section 408 of the Companies Act 2006 and has not included its own profit and loss
account in these financial statements. The parent company’s profit for the year was £7,620,000 (2018: £5,022,000).
31 Staff costs and numbers
Staff costs (including Directors) charged to operating expenses during the year were as follows:
Wages and salaries
Social security costs
Share-based payments (Note 45)
Other pension costs
Other benefits
Acquisition consideration
2019
£’000
11,429
1,806
708
482
2,715
2,105
19,245
2018
£’000
10,298
1,580
1,317
396
2,520
–
16,111
Pension costs are contributions made on behalf of employees to defined contribution pension schemes. Other benefits include
staff bonuses paid in cash and private healthcare insurance.
128 YouGov Annual Report and Accounts 2019
Financial statements
31 Staff costs and numbers continued
The monthly average number of employees including Directors of the Company during the year was as follows:
2019
Number
2018
Number
Key management personnel
Administration and operations
19
216
235
Specific disclosures in relation to compensation for key management personnel (defined as Board and Divisional, Product
and Function Heads) who held office during the year was as follows:
Short-term employee benefits
Post-employment benefits
Share-based payments
2019
£’000
2,889
54
637
3,580
Disclosure of Directors’ remuneration, including share options, are included in the Remuneration Report on pages 62 to 64.
32 Dividend
See Note 7 in the Group financial statements.
33 Intangible assets
At 1 August 2017
Cost
Accumulated amortisation
Net book amount
Year ended 31 July 2018
Opening net book amount
Additions
Amortisation charge
Closing net book amount
At 31 July 2018 and 1 August 2018
Cost
Accumulated amortisation
Net book amount
Year ended 31 July 2019
Opening net book amount
Additions
Disposals
Amortisation charge
Closing net book amount
At 31 July 2019
Cost
Accumulated amortisation
Net book amount
Consumer
panel
£’000
Software and
software
development
£’000
Patents and
trademarks
£’000
Product
development
costs
£’000
3,450
(1,992)
1,458
1,458
589
(744)
1,303
4,039
(2,736)
1,303
1,303
1,029
–
(913)
1,419
5,068
(3,649)
1,419
2,758
(2,549)
209
209
291
(218)
282
3,049
(2,767)
282
282
5,124
(4,822)
(193)
391
3,350
(2,959)
391
188
–
188
188
38
–
226
226
–
226
226
29
–
–
255
255
–
255
518
(480)
38
38
12
(2)
48
530
(482)
48
48
–
(48)
–
–
482
(482)
–
16
203
219
2018
£’000
2,030
26
1,271
3,327
Total
£’000
6,914
(5,021)
1,893
1,893
930
(964)
1,859
7,844
(5,985)
1,859
1,859
6,182
(4,870)
(1,106)
2,065
9,155
(7,090)
2,065
129
Financial statements
Notes to the Parent Company financial statements
for the year ended 31 July 2019 continued
34 Property, plant and equipment
Leasehold
property
improvements
£’000
Computer
equipment
£’000
Fixtures and
fittings
£’000
At 1 August 2017
Cost
Accumulated depreciation
Net book amount
Year ended 31 July 2018
Opening net book amount
Additions
Depreciation
Closing net book amount
At 31 July 2018 and 1 August 2018
Cost
Accumulated depreciation
Net book amount
Year ended 31 July 2019
Opening net book amount
Additions
Depreciation
Closing net book amount
At 31 July 2019
Cost
Accumulated depreciation
Net book amount
633
(442)
191
191
–
(92)
99
633
(534)
99
99
1,137
(245)
991
1,770
(779)
991
672
(456)
216
216
109
(131)
194
781
(587)
194
194
248
(157)
285
529
(406)
123
123
33
(39)
117
562
(445)
117
117
601
(125)
593
Total
£’000
1,834
(1,304)
530
530
142
(262)
410
1,976
(1,566)
410
410
1,986
(527)
1,869
1,029
(744)
285
1,163
(570)
593
3,962
(2,093)
1,869
All property, plant and equipment disclosed above are free from restrictions on title. No property, plant and equipment either
in 2019 or 2018 has been pledged as security against the liabilities of the Company.
130 YouGov Annual Report and Accounts 2019
Financial statements
35 Investments in subsidiaries
Balance at 1 August
Acquired through business combinations
Additional investment in existing subsidiaries
Investment in new subsidiaries
Distributions on closure of subsidiaries
Share-based payments charge
Settlement of fully vested share options
Balance at 31 July
2019
£’000
49,893
10,309
–
–
82
1,693
(235)
61,743
2018
£’000
46,497
8,409
10
63
(7,110)
2,254
(230)
49,893
The value of investments is determined on the basis of the cost to the Company. The Directors believe that the carrying value
of the investments is supported by their underlying net assets.
The details of the parent company’s subsidiaries are shown in Note 13 of the consolidated financial statements.
36 Investment in associates
Balance at 1 August
Acquisition of associate
Balance at 31 July
37 Trade and other receivables
Trade receivables
Provision for trade receivables
Net trade receivables
Amounts owed by Group undertakings
Amounts owed by associates
Other receivables
Prepayments
Accrued income
2019
£’000
280
(280)
–
31 July
2019
£’000
6,605
(855)
5,750
39,363
–
514
650
2,120
48,397
2018
£’000
280
–
280
31 July
2018
£’000
6,370
(176)
6,194
24,865
270
169
549
4,312
36,359
The Directors consider that the carrying amount of trade and other receivables approximate to their fair value. The amounts due
from Group undertakings are repayable on demand and are non-interest bearing.
131
Financial statements
Notes to the Parent Company financial statements
for the year ended 31 July 2019 continued
37 Trade and other receivables continued
As at 31 July 2019, trade receivables of £1,840,000 (2018: £2,814,000) were overdue but not impaired. These relate to a number of
customers for which there is no recent history of default or any other indication that the receivable should not be fully collectable.
The ageing analysis of past due trade receivables which are not impaired is as follows:
Up to three months overdue
Three to six months overdue
Six months to one year overdue
More than one year overdue
Movement on the Company provision for impairment of trade receivables is as follows:
Provision for receivables impairment at 1 August as previously reported
Revision on adoption of IFRS 9
Provision for receivables impairment at 1 August restated
Movement in the year (credited)/charged to the income statement
Provision for receivables impairment at 31 July
31 July 2019
£’000
31 July 2018
£’000
1,535
130
90
85
1,840
2019
£’000
176
777
953
(98)
855
1,447
1,064
253
50
2,814
2018
£’000
144
–
144
32
176
The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above.
The Company does not hold any collateral as security.
The average length of time taken by customers to settle receivables is 59 days (2018: 59 days). Concentrations of credit risk do exist
with certain clients with which we have trading relationships but none has a history of default and all command a certain stature
within the marketplace, which minimises any potential risk of default. Material balances (defined as greater than £250,000
(2018: greater than £250,000)) represent 9% of trade receivables (2018: 0%).
38 Cash and cash equivalents
Cash at bank and in hand
Cash and cash equivalents
31 July 2019
£’000
31 July 2018
£’000
3,928
3,928
12,136
12,136
Cash and cash equivalents are held at either variable rates or at rates fixed for periods of no longer than three months.
39 Trade and other payables
Trade payables
Amounts owed to Group undertakings
Accruals
Deferred income
Other payables
31 July 2019
£’000
31 July 2018
£’000
487
16,392
4,835
4,797
3,524
30,035
968
8,877
4,656
4,016
2,635
21,152
Amounts payable to Group undertakings are repayable on demand and non-interest bearing.
Included within other payables are £122,000 (2018: £80,000) of contributions due in respect of defined contribution
pension schemes.
132 YouGov Annual Report and Accounts 2019
Financial statements
40 Contingent consideration
At 1 August 2017
Provided in the year
Discount unwinding
Balance at 31 July 2018 and 1 August 2018
Included within current liabilities
Included within non-current liabilities
Acquisition consideration provided during the year
Decrease recognised in income statement in the year
Contingent staff cost provided during the year
Settled during the year
Discount unwinding
Balance at 31 July 2019
Included within current liabilities
Included within non-current liabilities
41 Provisions for other liabilities and charges
SMG Insight Ltd
£’000
InConversation
Media Ltd
£’000
Portent.io Ltd
£’000
–
5,727
9
5,736
899
4,837
7,513
(3,192)
–
(3,775)
88
6,370
2,013
4,357
–
–
–
–
–
–
605
–
433
–
6
1,044
–
1,044
–
–
–
–
–
–
–
–
1,873
–
5
1,878
–
1,878
At 1 August 2017
Provided during the year
Utilised during the year
Balance at 31 July 2018 and 1 August 2018
Included within current liabilities
Included within non-current liabilities
Provided during the year
Utilised during the year
Balance at 31 July 2019
Included within current liabilities
Included within non-current liabilities
Panel incentives
£’000
2,338
3,126
(2,831)
2,633
1,628
1,005
5,140
(3,787)
3,986
2,302
1,684
Total
£’000
–
5,727
9
5,736
899
4,837
8,118
(3,192)
2,306
(3,775)
99
9,292
2,013
7,279
Total
£’000
2,338
3,126
(2,831)
2,633
1,628
1,005
5,140
(3,787)
3,986
2,302
1,684
The panel incentive provision represents the Directors’ best estimate of the future liability in relation to the value of panel incentives
that have accrued in the panellists’ virtual accounts up to 31 July 2019. The provision of £4.0m represents 62% of the maximum
potential liability of £6.5m (2018: £2.6m representing 46% of the maximum potential liability of £5.8m). The factors considered in
estimating the appropriate percentage of the total potential liability to be provided against at each reporting date include: panel
churn rates, panel activity rates and current redemption patterns.
133
Financial statements Notes to the Parent Company financial statements
for the year ended 31 July 2019 continued
42 Deferred tax assets and liabilities
Deferred tax asset
Balance at 1 August 2017
Recognised in the income statement
Recognised in equity
Balance at 31 July 2018 as previously reported
Restatement on adoption of IFRS 9
Balance at 1 August 2018 restated
Recognised in the income statement
Recognised in equity
Balance at 31 July 2019
Property,
plant and
equipment
£’000
Tax
losses
£’000
Other
timing
differences
£’000
54
(4)
–
50
–
50
(50)
–
–
97
19
–
116
–
116
–
–
116
1,482
233
726
2,441
136
2,305
(116)
828
3,289
Total
£’000
1,633
248
726
2,607
136
2,743
(166)
828
3,405
£2,610,000 (2018: £392,000) of the above deferred tax assets are expected to be recovered within one year.
Deferred tax assets have been recognised only to the extent where management budgets and forecasts show sufficient profits
being generated to discharge these in the short term. Utilisation of tax losses is dependent upon future profits being generated.
Intangible
assets
£’000
Intangible
assets
£’000
30
(30)
–
–
–
–
–
–
32
32
2019
£’000
2,607
136
2,743
(198)
828
3,373
Total
£’000
30
(30)
–
32
32
2018
£’000
1,603
–
1,603
278
726
2,607
Deferred tax liabilities
Balance at 1 August 2017
Recognised in the income statement
Balance at 31 July 2018 and 1 August 2018
Recognised in the income statement
Balance at 31 July 2019
£Nil (2018: £Nil) of the above deferred tax liabilities are expected to be recovered within one year.
The net movement on the deferred income tax account is as follows:
Balance at 1 August as previously reported
Restatement on adoption of IFRS 9
Balance at 1 August restated
Recognised in the income statement
Recognised in equity
Balance at 31 July
134 YouGov Annual Report and Accounts 2019
Financial statements 43 Risk management objectives and policies
The Company is exposed to foreign currency, capital, liquidity and interest rate risk, which result from both its operating and
investing activities. The Group’s risk management is coordinated in close cooperation with the Board of Directors, and focuses
on actively securing the Company’s short-to-medium-term cash flows by minimising the exposure to financial markets. The most
significant financial risks to which the Company is exposed are described below. Also refer to the accounting policies.
Foreign currency risk
The Company is exposed to translation and transaction foreign exchange risk. The currencies where the Company is most exposed
to volatility are the US Dollars and Euro. Currently, the Company aims to align assets and liabilities. The Company will continue to
review its currency risk position as the overall business profile changes.
The presentational and transactional currency of the Company is considered to be UK Sterling.
Foreign currency denominated financial assets and liabilities, translated into UK Sterling at the closing rate are as follows:
2019
£’000
Euro
3,997
(1,659)
2,338
–
–
–
US
Dollar
5,318
(4,866)
452
–
–
–
Other
Currencies
6,788
(2,740)
4,048
–
–
–
2018
£’000
Euro
861
(117)
744
–
–
–
Other
Currencies
2
(3)
(1)
–
–
–
US
Dollar
4,241
(54)
4,187
–
–
–
Financial assets
Financial liabilities
Short-term exposure
Financial assets
Financial liabilities
Long-term exposure
Liquidity risk
The Company seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest
cash assets safely and profitably.
The Company currently has no general borrowing arrangement in place and prepares cash flow forecasts which are reviewed
at Board meetings to ensure liquidity.
As at 31 July 2019, the Group’s liabilities have undiscounted contractual maturities, which are summarised below:
2019
2018
Current
Non-current
Current
Non-current
At 31 July
Trade and other payables
Contingent consideration
Within
6 months
£’000
4,011
6 to 12
months
£’000
1 to 5
years
£’000
Later than
5 years
£’000
Within
6 months
£’000
6 to 12
months
£’000
1 to 5
years
£’000
Later than
5 years
£’000
–
–
–
2,013
7,279
–
–
3,603
–
–
898
–
4,837
–
–
The Company has sufficient financial risk management policies in place to ensure that all trade payables are settled within
the respective credit period.
Capital risk management
The Company manages its capital to ensure that it is able to continue as a going concern. The Board has taken the decision
at this stage to minimise external debt, whilst trying to maximise earnings from the cash currently held. Capital consists
of the following items:
Cash and cash equivalents
Equity attributable to shareholders of the parent company
The Company has no externally imposed capital requirements.
31 July 2019
£’000
31 July 2018
£’000
3,928
(76,939)
(73,011)
12,136
(73,529)
(61,393)
135
Financial statements
Notes to the Parent Company financial statements
for the year ended 31 July 2019 continued
43 Risk management objectives and policies continued
Interest rate risk
The Group manages its interest rate risk by negotiating fixed interest rates on deposits for periods of up to three months.
The average cash and cash equivalents balance, net of bank overdrafts, over the course of the year was £7.9m (2018: £11.7m).
Management does not believe that the Group is subject to interest rate risk.
Fair values of financial assets and financial liabilities
Where market values are not available, fair values of financial assets and financial liabilities have been calculated by discounting
expected future cash flows at prevailing interest rates and by applying year-end foreign exchange rates.
Primary financial instruments held or issued to finance the Company’s operations:
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Contingent consideration
Fair value estimation
31 July 2019
31 July 2018
Book value
£’000
Fair value
£’000
Book value
£’000
47,748
3,928
(25,153)
(9,292)
47,748
3,928
(25,153)
(9,292)
30,055
12,136
(13,692)
(5,736)
Fair value
£’000
30,055
12,136
(13,692)
(5,736)
The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined
as follows: Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1); inputs other than quoted prices
included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from
prices) (Level 2); Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3).
31 July 2019
£’000
31 July 2018
£’000
Current
Non-current
Current
Non-current
Liabilities
Level 1
£’000
Level 2
£’000
Level 3
£’000
Contingent consideration
–
–
9,292
Total
£’000
9,292
Level 1
£’000
Level 2
£’000
Level 3
£’000
–
–
5,736
The following table presents the changes in Level 3 instruments.
Contingent consideration
Balance at 1 August
Provided consideration on business combination
Recognised in the income statement
Settled
Balance at 31 July
2019
£’000
5,736
8,117
(786)
(3,775)
9,292
44 Share capital and share premium
The Company only has one class of share. Par value of each Ordinary Share is 0.2p. All issued shares are fully paid.
At 1 August 2017
Issue of shares
At 31 July 2018 and 1 August 2018
Issue of shares
At 31 July 2019
Number of
shares
105,298,709
193,101
105,491,810
218,193
105,710,003
Share
capital
£’000
211
–
211
–
211
Share
premium
£’000
31,261
39
31,300
45
31,345
Total
£’000
5,736
2018
£’000
–
5,727
9
–
5,736
Total
£’000
31,472
39
31,511
45
31,556
During the year, 208,078 shares were issued on the exercise of share options and 10,115 in payment of Non-Executive Directors’
fees. A total of 755,000 shares were repurchased for the purposes of settling share option schemes as they vest.
136 YouGov Annual Report and Accounts 2019
Financial statements 45 Share-based payments
The charge in relation to the share-based payments in the year ended 31 July 2019 was £708,000 (2018: £1,317,000). Details of the
number of share options and the weighted average exercise price (WAEP) outstanding during the year are as follows:
Long Term Incentive Plan 2009
During the year ended 31 July 2019, the Long Term Incentive Plan 2009 (“LTIP 2009”) for Executive Directors, Senior Executives
and Senior Managers continued to operate but no new awards were made under the LTIP 2009 as it has been replaced by two
new incentive plans summarised below. The rules governing the LTIP 2009 are summarised in the Remuneration Report on pages
58 to 59. The charge in relation to the LTIP 2009 in the year ended 31 July 2019 was £Nil (2018: £Nil).
Outstanding at the beginning of the year
Employee transfers during the year
Granted during the year
Exercised during the year
Forfeited during the year
Outstanding at the end of the year
Exercisable at the end of the year
2019
Number
456,067
–
–
2018
Number
497,421
–
–
(81,396)
(41,354)
–
374,671
374,671
–
456,067
456,067
The weighted average share price at the date LTIP 2009 options were exercised was £4.76. All of the above are nil cost options.
During the year ended 31 July 2015, two new incentive plans were introduced: a new Long Term Incentive Plan (“LTIP 2014”) for the
Group’s Directors and senior managers and a new Deferred Share Bonus Plan (“DSBP 2014”) for those managers not participating
in the new LTIP.
Long Term Incentive Plan 2014
Awards under the Long Term Incentive Plan 2014 (“LTIP 2014”) were made in the form of nil-cost options as with the LTIP 2009.
The maximum total number of shares awarded to each participant was set based on their salary in the year ended 31 July 2015 and
the share price at the start of the plan. These awards were granted in three equal tranches in October 2015, 2016 and 2017 with an
additional award of 384,993 options in April 2018. Receipt of an award in each of those years was dependent upon the achievement
of specific and demanding personal targets set for that individual in the previous financial year. Vesting of awards will depend on
the Company achieving stretching targets relating to compound growth in adjusted earnings per share (“EPS”) over the five years
ending 31 July 2019 and on improvement in its operating margins. Part of the Chief Executive Officer’s award is also subject to a
Total Shareholder Return (“TSR”) condition, this part of the award will only vest if the EPS performance condition is met in full and the
Company’s TSR has grown by 200%.
The maximum number of options that can be granted under this scheme is 4,271,000 and the charge in relation to the LTIP 2014 in
the year ended 31 July 2019 was £562,000 (2018: £1,212,000).
Outstanding at the beginning of the year
Employee transfers during the year
Granted during the year
Exercised during the year
Forfeited during the year
Outstanding at the end of the year
Exercisable at the end of the year
All of the above are nil cost options.
2019
Number
2018
Number
1,928,875
2,891,842
–
–
–
–
(1,707,719)
744,752
–
–
1,928,875
1,928,875
–
–
137
Financial statements Notes to the Parent Company financial statements
for the year ended 31 July 2019 continued
45 Share-based payments continued
Deferred Share Bonus Plan 2014
The Deferred Share Bonus Plan 2014 (“DSBP 2014”) delivers a portion of managers’ (enhanced) annual bonus in shares, which must
be retained for a period of two years and are subject to continued employment. The charge in relation to the DSBP 2014 in the year
ended 31 July 2019 was £146,000 (2018: £105,000).
Outstanding at the beginning of the year
Employee transfers during the year
Granted during the year
Exercised during the year
Forfeited during the year
Outstanding at the end of the year
Exercisable at the end of the year
2019
Number
89,559
54,715
36,268
(15,234)
(3,793)
160,423
82,770
2018
Number
92,764
–
35,977
(26,896)
(12,286)
89,559
28,414
The weighted average share price at the date DSBP 2014 options were exercised was £4.67. All of the above are nil cost
options. The fair value of options granted during the year, determined using the Black Scholes model, was £4.27 per option.
The assumptions used in the Black Scholes model in calculating the fair values of the options granted during the year are disclosed
in Note 22 to the consolidated financial statements.
46 Leasing commitments
The future aggregate minimum lease rentals to be paid under non-cancellable operating leases at 31 July 2019 are as follows:
In one year or less
Between one and five years
In five years or more
31 July 2019
31 July 2018
Land and
buildings
£’000
838
4,118
2,491
7,447
Other
£’000
92
30
–
122
Land and
buildings
£’000
194
131
2
327
Other
£’000
116
115
–
231
The lease rental costs charged to the income statement for the year ended 31 July 2019 amounted to £935,000 (2018: £521,000).
47 Capital commitments
At 31 July 2019, the Company had capital commitments of £Nil (2018: £Nil).
48 Major non-cash transactions
There were no major non-cash transactions in the year or the prior year.
49 Transactions with Directors and other related parties
See Note 26 in the Group financial statements.
138 YouGov Annual Report and Accounts 2019
Financial statements 50 Impact of new accounting standards
This Note explains the impact of the adoption of IFRS 9 and IFRS 15 on the Company’s financial statements.
IFRS 9
IFRS 9 replaces the provisions of IAS 39 that relate to the recognition, classification and measurement of financial assets and
financial liabilities and the impairment of financial assets.
The adoption of IFRS 9 from 1 August 2018 resulted in changes in accounting policies and adjustments to the amounts recognised
in the financial statements. The Company’s trade receivables and accrued income from sales of products are subject to the new
expected credit loss model. In accordance with the transitional provisions in paragraphs 7.2.15 and 7.2.26 of IFRS 9, comparative
figures have not been restated. The reclassifications and the adjustments arising from the new impairment rules are therefore
recognised in the opening balance sheet on 1 August 2018.
The Company applies the IFRS 9 simplified approach to measuring expected credit losses, which uses a lifetime expected loss
allowance for all trade receivables and contract assets. This resulted in an increase of the loss allowance on 1 August 2018 of
£618,000 for trade receivables and £96,000 for accrued income. The interest impact of IFRS 9 was immaterial. While cash and cash
equivalents are also subject to the impairment requirements of IFRS 9, the identified impairment loss was also immaterial.
IFRS 15
The adoption of IFRS 15 from 1 August 2018 resulted in changes in accounting policies relating to revenue recognition. The new
accounting policies have not materially altered the revenue recognised by the Company in prior financial years and so restatement
of prior year comparatives is not necessary.
Impact on the parent company financial statements
The impact of the change in impairment methodology on the Company’s retained earnings and equity is disclosed in the table
below. Line items that were not affected by the changes have not been included.
Deferred tax asset
Total non-current assets
Bad debt provision
Accrued income
Trade and other receivables
Total current assets
Total assets
Other payables
Trade and other payables
Total current liabilities
Total liabilities
Net assets
Retained earnings
Total equity
Balance sheet as
at 31 July 2018
£’000
Restatement for
IFRS 9
£’000
Balance sheet as
at 1 August 2019
£’000
2,607
55,049
(176)
4,312
36,359
48,496
103,545
2,635
21,152
24,173
30,015
73,529
32,779
73,529
136
136
(777)
(96)
(873)
(873)
(737)
(159)
(159)
(159)
(159)
(578)
(578)
(578)
2,743
55,185
(953)
4,216
35,645
47,782
102,967
2,476
20,993
24,014
29,856
72,951
32,201
72,951
The adoption of IFRS 15 has not impacted the parent company financial statements in the period.
51 Events after the reporting year
There have been no events after the end of the reporting year.
139
Financial statements Notes to the Parent Company financial statements
for the year ended 31 July 2019 continued
52 Registered addresses
Subsidiary Company
Registered Addresses
YouGov plc
CoEditor Ltd
Crunch Cloud Analytics Limited
Doughty Media 2 Limited*
InConversation Media Limited
Margaux Matrix Limited
Portent.io Limited
SMG Insight Limited
YGV Finance Limited**
YouGov Crunch Limited***
YouGov Services Limited
YouGovStone Limited****
Consilium Asia Limited
Consilium Limited
50 Featherstone Street, London, EC1Y 8RT, United Kingdom
Room 22D, Shuguang Building, No. 189 Puan Road, Shanghai, 200021, China
9/F, Skyway Centre, 23 Queen’s Road West, Sheung Wan, Hong Kong
Crunch Cloud Analytics LLC
805 Veterans Blvd, Suite 202, Redwood City, CA, 94063, USA
Portent Technologies Inc
YouGov America Inc
YouGov America Holdings LLC
Iridescent Productions Company Limited
240/2/580 Ashtar Compound, Ankawa, Erbil, Kurdistan Region, Iraq
MMH 2014 Limited
115, George’s Street, 4th Floor, Edinburgh, EH2 4JN, Scotland
PT YouGov Consulting Indonesia
62, Setiabudi One 2 Building, 6th Floor Suite 605C, JI HR Rasuna Said Kav 62,12920,
Jakarta, Indonesia
YG Research India Private Limited
Kaledonia 1st Floor, Sahar Road, Andheri East, Mumbai, 400069, India
YouGov Data & Analytics GmbH
41, Sebastian-Kneipp-Straße, Frankfurt am Main, 60439, Germany
YouGov Deutschland GmbH
Gustav-Heinemann-Ufer 72, 50968, Cologne, Germany
YouGov Finland OY
YouGov France SASU
YouGov Galaxy Research Pty Limited
YouGov Research Pty Ltd
YouGov Italia S.R.L.
c/o KPMG Oy Ab, Toolonlahdenkatu 3 A, Helsinki, 00100, Finland
29 Rue du Louvre, 75002, Paris, France
Level 38, Tower 3, International Towers Sydney, 300 Barangaroo Avenue, Sydney,
NSW, 2000 Australia
Via Leone XII, N. 14, Milan, Italy
YouGov M.E. Egypt LLC*****
115 Althawra St., Heliopolis, Cairo, Egypt
YouGov M.E. FZ LLC
Suites 302 and 303, Cayan Business Center, Barsha Heights, Dubai, UAE
YouGov Malaysia Sdn. Bhd.
33-1, Level 1, Jalan 4/93, Taman Miharja Cheras, Kuala Lumpur, 55200, Malaysia
YouGov Nordic and Baltic A/S
Bryggervangen 55, 1.th, DK-2100, Copenhagen, Denmark
YouGov Norway AS
YouGov Poland Sp. z o.o.
Møllergata 8, 0179, Oslo, Norway
17/9, Ul. Wiejska, Warsaw, 00-480, Poland
YouGov Research Canada Limited
400-725. Granville Street, P.O Box 10325, Vancouver, BC V7Y 1G5, Canada
YouGov Singapore Pte Ltd
67, Tanjong Pagar Road, #02-01, Singapore, 088488, Singapore
YouGov Spain S.L.U.
YouGov SRL
YouGov Sweden AB
YouGov (Thailand) CO. LTD
YouGov URC (Shanghai) Market Research
Co. Ltd.
19, Calle de Prim, Madrid, 28004, Spain
85, str. Buzesti, sector 1, Bucharest, Romania
Holländargatan 17 B, 111 60, Stockholm Sweden
152, Chartered Square Building, 12Ath Floor, Unit 12A-01, North Sathorn Road, Silom,
Bangrak, Bangkok, 10500, Thailand
25F, The Headquarters, No.168 Xizang Middle Road, Shanghai 200001, China
* Dissolved 30 July 2019, ** Dissolved 2 July 2019, *** Dissolved 23 October 2018, **** Dissolved 17 September 2019, ***** In Liquidation
140 YouGov Annual Report and Accounts 2019
Financial statements 53 Audit Exemption under Section 479A of the Companies Act 2006
The Directors consider that subsidiaries of the Group are entitled to exemption from the requirement to have an audit under the
provision of section 479A of the Companies Act 2006 (“the Act”) and the members have not required the company to obtain an
audit for the period in question in accordance with section 476 of the Act.
YouGov plc has guaranteed the liabilities of the following subsidiaries in order that they qualify for the exemption from audit under
section 479A of the Companies Act 2006 in respect of the year ended 31 July 2019:
• Crunch Cloud Analytics Limited
• InConversation Media Limited
• Margaux Matrix Limited
• Portent.io Limited
• SMG Insight Limited
• YouGov Services Limited
The Directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to
accounting records and the preparation of financial statements.
141
Financial statements In this section
144 Notice of Annual General Meeting
146 Notes to the Notice of Annual General Meeting
Additional
information
142 YouGov Annual Report and Accounts 2019
Revealing
YouGov Ratings measures
the popularity and fame of
anything and everything,
based on millions of responses
from the YouGov panel.
143
Additional information Notice of Annual General Meeting
Notice is hereby given that the Annual General Meeting of YouGov plc will be held at 50 Featherstone Street, London EC1Y 8RT
on Wednesday 11 December 2019 at 8.30am to consider and, if thought fit, pass the resolutions below.
Resolutions 14 to 16 will be proposed as Special Resolutions. All other Resolutions will be proposed as Ordinary Resolutions.
Ordinary Resolutions
Resolution 1 – Report and accounts
To receive the Company’s annual accounts for the financial year ended 31 July 2019, together with the Directors’ Report and the
auditors’ report on those accounts.
Resolution 2 – Annual Report on Remuneration
To approve the Annual Report on Remuneration set out in the Annual Report and Accounts for the financial year ended 31 July 2019.
Resolution 3 – Appointment of auditors
To reappoint PricewaterhouseCoopers LLP as auditors to hold office from the conclusion of this meeting until the conclusion of the
next general meeting of the Company at which accounts are laid.
Resolution 4 – Remuneration of auditors
To authorise the Directors to fix the remuneration of the auditors.
Resolution 5 – Re-Election of Roger Parry as Director
To re-elect Roger Parry as a Director.
Resolution 6 – Re-Election of Stephan Shakespeare as Director
To re-elect Stephan Shakespeare as a Director.
Resolution 7 – Re-Election of Alexander McIntosh as Director
To re-elect Alexander McIntosh as a Director.
Resolution 8 – Re-Election of Sundip Chahal as Director
To re-elect Sundip Chahal as a Director.
Resolution 9 – Re-Election of Rosemary Leith as Director
To re-elect Rosemary Leith as a Director.
Resolution 10 – Re-Election of Andrea Newman as Director
To re-elect Andrea Newman as a Director.
Resolution 11 – Re-Election of Ashley Martin as Director
To re-elect Ashley Martin as a Director.
Resolution 12 – Dividend
To declare a final dividend of 4.0p per ordinary share to be paid on Monday 16 December 2019 to those shareholders on the register
of members as at Friday 6 December 2019.
Resolution 13 – Directors’ authority to allot shares
To generally and unconditionally authorise the Directors (in substitution for all subsisting authorities to the extent unused, other than
in respect of any allotments made pursuant to offers or agreements made prior to the passing of this resolution) for the purposes
of Section 551 of the Companies Act 2006 to exercise all the powers of the Company to allot shares in the Company (“Shares”) and
grant rights to subscribe for, or to convert any security into, Shares (“Subscription or Conversion Rights”) up to an aggregate nominal
amount of £10,573 provided that this authority shall expire at the conclusion of the next Annual General Meeting of the Company after
the passing of this resolution or on 31 December 2020, whichever is the earlier, save that the Company may, before such expiry, make
an offer or agreement which would or might require Shares to be allotted or Subscription or Conversion Rights to be granted after such
expiry and the Directors may allot Shares and grant Subscription or Conversion Rights in pursuance of any such offer or agreement
as if this authority had not so expired.
144 YouGov Annual Report and Accounts 2019
Additional information Special Resolutions
Resolution 14 – Authority for disapplication of pre-emption rights
That conditional on the passing of Resolution 13 above, that the Directors be and are hereby empowered in accordance with Section
570 and Section 573 of the Companies Act 2006 to allot equity securities (within the meaning of Section 560 of that Act) for cash,
either pursuant to the authority conferred by Resolution 13 or by way of a sale of treasury shares, as if section 561(1) of that Act did not
apply to any such allotment, provided that this power shall be limited to:
(a) the allotment of equity securities in connection with an offer of such securities:
(i) to holders of Ordinary Shares in proportion (as nearly as may be practicable) to their respective holdings of such shares; and
(ii) to holders of other securities as required by the rights of those securities or as the Directors otherwise consider necessary, but
subject to such exclusions or other arrangements as the Directors may deem necessary or expedient in relation to treasury
shares, fractional entitlements, record dates, legal, regulatory or practical problems in or under the laws of any territory or the
requirements of any regulatory body or any stock exchange; and
(b
the allotment (otherwise than pursuant to paragraph (a) above) of equity securities up to an aggregate nominal amount of £10,573
and shall expire at the conclusion of the next Annual General Meeting of the Company after the passing of this resolution or on
31 December 2020, whichever is the earlier, save that the Company may before such expiry make offers or agreements which
would or might require equity securities to be allotted after such expiry and the Directors may allot equity securities in pursuance
of any such offers or agreements as if the power conferred hereby had not expired.
Resolution 15 – Purchase of own shares for market value
That the Company be and is hereby generally and unconditionally authorised for the purposes of Section 701 of the 2006 Act to make
one or more market purchases (as defined in Section 693(4) of the 2006 Act) on the London Stock Exchange of Ordinary Shares of
0.2p each of the Company provided that:
(a) the maximum aggregate number of Ordinary Shares hereby authorised to be purchased is 10,573,100 (representing 10% of the
Company’s issued ordinary share capital at the date of this notice); and
(b) the minimum price (exclusive of expenses) which may be paid for each ordinary share is 0.2p; and
(c) the maximum price (exclusive of expenses) which may be paid for each ordinary share will not be more than the price permitted
by the Listing Rules of the UK Listing Authority at the time of purchase (which is currently the higher of an amount equal to 105%
of the average of the middle market quotations of an ordinary share of the Company, as derived from the Daily Official List of
the London Stock Exchange for the five business days immediately preceding the day on which such share is contracted to be
purchased and an amount equal to the higher of:
(i) the price of the last independent trade of an ordinary share; and
(ii) the highest current independent bid for an ordinary share as derived from the London Stock Exchange Trading System.
(d) unless previously renewed, revoked or varied, this authority shall continue for the period ending on the date of the Annual General
Meeting in 2020 or 31 December 2020, whichever is the earlier, provided that, if the company has agreed before this date to
purchase Ordinary Shares where these purchases will or may be executed after the authority terminates (either wholly or in part),
the Company may complete such purchases.
Resolution 16 – Adoption of new Articles of Association
That the Articles of Association produced to the meeting and initialled by the Chair of the meeting (for the purpose of identification)
be adopted as the Articles of Association of the Company in substitution for, and to the exclusion of, the existing Articles of Association.
By order of the Board
Tilly Heald
Company Secretary
8 October 2019
Registered Office:
50 Featherstone Street,
London EC1Y 8RT
Registered in England and Wales No. 3607311
145
Additional information
Notes to the Notice of Annual General Meeting
Explanatory Notes to the Notice of Annual General Meeting
Resolutions 1 to 13 are proposed as Ordinary Resolutions. This means that for each of those Resolutions to be passed, more than
half of the votes cast must be in favour of the resolution.
Resolutions 14 to 16 are proposed as Special Resolutions. This means that for each Resolution to be passed, at least three-quarters
of the votes cast must be in favour of the Resolution.
Resolution 5 to 11 Explanatory Notes
Each Director is proposed for election by the shareholders in general meeting. For more information about the Directors’ background
and experience, see pages 46 and 47 of this Annual Report. Having reached ten years’ tenure on the Board, Nick Jones does not offer
himself for re-election. Nick Jones’ appointment as Director shall cease at the end of the meeting. For information regarding how the
Board has considered the independence of the Directors, see page 48 of this Annual Report.
Resolution 14 Explanatory Notes
Under Section 561 of the Companies Act 2006, when new shares are allotted, they must first be offered to existing shareholders
pro-rata to their holdings. This Special Resolution renews the authorities previously granted to the Directors to: (a) allot shares of the
Company in connection with a rights issue or other pre-emptive offer; and (b) otherwise allot shares of the Company, or sell treasury
shares for cash, up to an aggregate nominal value of £10,573 (representing in accordance with institutional investor guidelines,
approximately 5% of the share capital in issue as at 4 October 2019 (being the last practicable date prior to the publication of this
notice)) as if the pre-emption rights of Section 561 did not apply. The authority granted by this resolution shall expire at the conclusion
of the next Annual General Meeting of the Company after the passing of this resolution or on 31 December 2020, whichever is
the earlier.
Resolution 15 Explanatory Notes
The Directors consider that it would be appropriate and that it would promote the success of the Company, for the benefit of its
members as a whole, to seek authority to make market purchases of its Ordinary Shares on the London Stock Exchange, up to a
limit of 10% of its issued ordinary share capital. The maximum and minimum prices are stated in Resolution 14. Any Ordinary Shares
purchased under this authority may either be cancelled or held as treasury shares. Treasury shares may subsequently be cancelled,
sold for cash or used to satisfy options issued to employees pursuant to an employee share plan.
The authority to purchase own shares will be exercised only if the Directors believe that in doing so it is likely to promote the success
of the Company for the benefit of its members as a whole.
As at 4 October 2019, being the last practicable date prior to the publication of this notice, there were employee share plan options
over 7,786,926 Ordinary Shares in the capital of the Company which represent 7% of the Company’s issued ordinary share capital at
that date. This figure of Ordinary Shares includes both vested and unvested employee share options. If all share options were to vest
in full, and authority under this resolution to purchase the Company’s Ordinary Shares was exercised in full, the proportion of Ordinary
Shares subject to such options would represent 7% of the Company’s issued ordinary share capital as at 4 October 2019, being the
latest practicable date before publication of this notice.
Resolution 16 Explanatory Notes
Resolution 16 proposes that the Company amends its constitution by adopting revised Articles of Association. It is proposed to
adopt new Articles of Association (the “New Articles”) principally to reflect developments in practice, and to provide clarification
and additional flexibility.
Due to the extent of the changes, the Company is proposing the adoption of the New Articles rather than making amendments to the
current Articles of Association adopted in 2008 (the “Current Articles”). The principal changes being proposed in the New Articles are
summarised below. Other changes, which are of minor, technical or clarifying nature, have not been noted.
A copy of the New Articles are available for inspection online at corporate.yougov.com/governance/corporate-documents and
will also be available at the meeting. A copy of the New Articles will be available for inspection by shareholders at the Company’s
registered office at 50 Featherstone Street, London, EC1Y 8RT during normal business hours until the close of the Annual General
Meeting. If you wish to make an appointment to view the New Articles, please contact company.secretary@yougov.com.
146 YouGov Annual Report and Accounts 2019
Additional information Summary of the New Articles
The substantive changes being proposed in the New Articles are intended to reflect developments in market practice, and to provide
clarification and additional flexibility where necessary or appropriate. The Current Articles were adopted over ten years ago, therefore
it is necessary to make a number of technical amendments to modernise language, provide clarity and ensure that the Articles are in
line with the provisions of the Companies Act 2006 (as amended), and the Company’s practice.
Summary of some key changes are as follows:
Retirement of Directors
In line with best practice, the New Articles provide for the automatic retirement of all the Directors at each Annual General Meeting,
replacing the previous provision that required reappointment on rotation. The New Articles also include the necessary related changes
to ensure that the Company can continue to operate, and comply with its legal obligations, in the event that not enough Directors are
able to act following an Annual General Meeting. Retiring Directors powers are limited to: (i) filling vacancies, (ii) convening general
meetings and (iii) performing duties which are essential to maintain the Company as a going concern.
Untraced shareholders
The New Articles amend the provisions in the Current Articles relating to untraced shareholders. These new provisions give the
Company more flexibility when trying to trace shareholders by removing the requirement to place notices in newspapers, and
replacing it with a requirement to take reasonable steps to trace the shareholder. The New Articles also contain provisions relating
to unclaimed dividends or other money payable on untraced shareholders which are sold.
Appointment of corporate representatives
In line with market practice, our New Articles include specific provisions to enable corporate shareholders to appoint a Corporate
Representative to act on their behalf at general meetings of the Company. The New Articles clarify the process of appointing and
evidencing a corporate representative and the powers which they can exercise.
Method of payment of dividends
The New Articles include provision to clarify that a dividend may be paid, subject to a shareholder’s agreement, by electronic or other
means. This provision is in line with market practice and gives the Company flexibility to pay dividends to shareholders in the manner
which is most convenient for the shareholder.
Directors’ fees
The Current Articles include provision for an aggregate limit on fees paid to Non-Executive Directors, but does not specify a monetary
limit. In line with best practice, the New Articles specify a monetary limit (£500,000).
147
Additional information Notes to the Notice of Annual General Meeting continued
Note on voting procedures
1.
Shareholders are entitled to appoint a proxy to exercise all or any of their rights to attend and to speak and vote on their behalf at
the meeting. A shareholder may appoint more than one proxy in relation to the Annual General Meeting provided that each proxy is
appointed to exercise the rights attached to a different share or shares held by that shareholder. A proxy need not be a shareholder
of the Company. A proxy form which may be used to make such appointment and give proxy instructions accompanies this notice.
If you do not have a proxy form and believe that you should have one, or if you require additional forms, please contact Neville
Registrars Limited at Neville House Steelpark Road, Halesowen, B62 8HD.
2. To be valid any proxy form or other instrument appointing a proxy must be received by post or (during normal business hours
only) by hand at Neville Registrars Limited, Neville House, Steelpark Road, Halesowen, B62 8HD no later than 8.30am on Monday
9 December 2019.
3. Forms of Proxy may alternatively be submitted electronically by logging on to www.sharegateway.co.uk and using the personal
proxy registration code which is printed on the proxy form. For an electronic proxy appointment to be valid, the appointment must
be received by Neville Registrars Limited no later than 8.30am on Monday 9 December 2019.
4. The return of a completed proxy form, other such instrument or any CREST Proxy Instruction (as described in paragraph 6 below)
will not prevent a shareholder attending the Annual General Meeting and voting in person if he/she wishes to do so.
5. In accordance with Regulation 41 of the Uncertificated Securities Regulations 2001, to be entitled to attend and vote at the
Annual General Meeting (and for the purpose of the determination by the Company of the votes they may cast), shareholders
must be registered in the Register of Members of the Company at 6.00pm on Monday 9 December 2019 (or, in the event of
any adjournment, 6.00pm on the date which is two days before the time of the adjourned meeting). Changes to the Register
of Members after the relevant deadline shall be disregarded in determining the rights of any person to attend and vote at
the meeting.
6. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so by
using the procedures described in the CREST Manual. CREST personal members or other CREST sponsored members, and those
CREST members who have appointed a service provider(s), should refer to their CREST sponsor or voting service provider(s), who
will be able to take the appropriate action on their behalf.
7.
8.
In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a
“CREST Proxy Instruction”) must be properly authenticated in accordance with the specifications of Euroclear UK & Ireland Limited
(the operator of the CREST system), and must contain the information required for such instruction, as described in the CREST
Manual. The message, regardless of whether it constitutes the appointment of a proxy or is an amendment to the instruction given
to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by the issuer’s agent (ID 7RA11) by
8.30am on Monday 9 December 2019. For this purpose, the time of receipt will be taken to be the time (as determined by the
timestamp applied to the message by the CREST Application Host) from which the issuer’s agent is able to retrieve the message
by enquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to proxies appointed through
CREST should be communicated to the appointee through other means.
CREST members and, where applicable, their CREST sponsors, or voting service providers should note that Euroclear UK & Ireland
Limited does not make available special procedures in CREST for any particular message. Normal system timings and limitations
will, therefore, apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned
to take (or, if the CREST member is a CREST personal member, or sponsored member, or has appointed a voting service provider,
to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message
is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable,
their CREST sponsors or voting system service providers are referred, in particular, to those sections of the CREST Manual
concerning practical limitations of the CREST system and timings.
9.
The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the
Uncertificated Securities Regulations 2001.
10. In order to facilitate voting by corporate representatives at the meeting, arrangements will be put in place at the meeting so that:
(i) if a corporate shareholder has appointed the chair of the meeting as its corporate representative with instructions to vote on a
poll in accordance with the directions of all of the other corporate representatives for that shareholder at the meeting, then on a
poll those corporate representatives will give voting directions to the chair and the chair will vote (or withhold a vote) as corporate
representative in accordance with those directions; and (ii) if more than one corporate representative for the same corporate
shareholder attends the meeting but the corporate shareholder has not appointed the chair of the meeting as its corporate
representative, a designated corporate representative will be nominated, from those corporate representatives who attend, who
will vote on a poll and the other corporate representatives will give voting directions to that designated corporate representative.
Corporate shareholders are referred to the guidance issued by the Institute of Chartered Secretaries and Administrators on
proxies and corporate representatives (icsa.org.uk) for further details of this procedure. The guidance includes a sample form of
representation letter if the chair is being appointed as described in (i) above.
148 YouGov Annual Report and Accounts 2019
Additional information Designed and produced by Radley Yeldar www.ry.com
This material used in the publication of this document is carbon balanced.
Printed on FSC certified paper.
This document is printed on material manufactured at a mill which is ISO14001 accredited.
YouGov plc
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