Clear Secure Annual Report 2020

Plain-text annual report

Y o u G o v A n n u a l R e p o r t & A c c o u n t s 2 0 2 0 A platform for growth YouGov Annual Report & Accounts 2020 About YouGov YouGov is an international research data and analytics group. Our data-led offering supports and improves a wide spectrum of marketing activities of a customer- base including media owners, brands and media agencies. We work with some of the world’s most recognised brands. Our ground-breaking syndicated data solutions include the daily brand perception tracker, YouGov BrandIndex, and the media planning and segmentation tool, YouGov Profiles. Our market-leading YouGov Realtime 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. 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 Multi-level Regression with Post-stratification (“MRP”) for accurate predictions at a granular level. YouGov data is regularly referenced by the press worldwide and we are the most quoted market research source in the UK. With a proprietary panel of over 11 million registered members globally and operations in the UK, Americas, Mainland Europe, Middle East, India and Asia Pacific, YouGov has one of the world’s largest research networks. For information on our products and services, see yougov.com For corporate and investor relations information, see corporate.yougov.com Strategic report About YouGov Summary of Financial Results At a Glance Understanding the YouGov Platform Our Client Value Proposition Chair’s Statement Chief Executive Officer’s Review Markets Our Strategic Pillars Strategy in Action Our Strategic Priorities Key Performance Indicators Business Model Operational Review Section 172 Statement Our Stakeholders 0 1 2 4 6 8 10 14 16 18 24 26 28 30 38 40 Environmental, Social and Governance 44 Chief Financial Officer’s Review Principal Risks and Uncertainties Governance report Chair’s Introduction and Corporate Governance Statement Board of Directors Corporate Governance Report Nomination Committee Report Audit & Risk Committee Report Directors’ Remuneration Report Directors’ Report Directors’ Responsibilities Statement Financial statements Independent Auditors’ Report to the Members of YouGov plc Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Changes in Equity 54 60 64 66 68 73 74 77 92 95 96 102 103 104 105 Consolidated Statement of Cash Flows 106 Principal Accounting Policies of the Consolidated Financial Statements Notes to the Consolidated Financial Statements Group Five-Year Financial Summary Parent Company Statement of Financial Position Parent Company Statement of Changes in Equity Parent Company Statement of Cash Flows Notes to the Parent Company Financial Statements Additional information Notice of Annual General Meeting Other Information 107 121 146 147 148 149 150 166 172 Summary of Financial Results Revenue £m Adjusted operating profit margin1 % £152.4 +12% 2019: £136.53 14.3% +80bps 2019: £13.5%3 Adjusted profit before tax1 £m Adjusted operating profit1 £m £25.7 +25% 2019: £20.63 £21.8 +18% 2019: £18.53 Statutory profit before tax £m Statutory operating profit £m £15.2 -22% 2019: £19.43 £15.2 -24% 2019: £20.03 Adjusted earnings per share1 pence Statutory basic earnings per share pence 18.1p +21% 2019: 15.0p3 9.0p -36% pts 2019: 14.1p3 Revenue per head £142k 2019: £142k3 Staff costs as a % of revenue 50% +2% pts 2019: 48%3 Operating cash generation £m £38.7 +1% pt 2019: £38.43 1 Defined in the explanation of non-IFRS measures on page 59. 2 Defined as growth in business excluding impact of current and prior period acquisitions and business closures, and movement in exchange rates. 3 Prior year comparatives have been restated on the adoption of IFRS 16. Financial and operational highlights ― Revenue growth of 12% (2019: 17%). Underlying business2 growth of 13% ― Adjusted operating profit1 up by 18% to £21.8m (2019: £18.5m). Underlying business2 growth of 14% ― Adjusted profit before tax1 up by 25% to £25.7m (2019: £20.6m) ― Adjusted earnings per share1 up by 21% to 18.1p (2019: 15.0p) ― Adjusted operating profit margin1 rises to 14.3% (2019: 13.5%) ― Statutory operating profit down 24% to £15.2m (2019: £20.0m) due to separately reported items charge of £6.6m ― Strong operating cash generation of £38.7m enabling us to continue investing in the business ― Net cash balances of £35.3m (31 July 2019: £37.9m) ― Proposed dividend increase of 25% to 5p per share (2019: 4p) ― Strong performance in the key markets of the UK and US ― Significant and increased investment of £7.9m (2019: £4.8m) in building the technology platform for future growth ― Number of registered panellists up 37% to over 11 million through broadening geographic footprint ― No employees have been furloughed during the pandemic with no other Government support needed ― The Group’s strategic and financial position remains strong and resilient and has not seen a material impact of COVID-19 on its financial performance to date ― Continued progress in the development and roll-out of YouGov Direct, a blockchain- based audience insights platform, with positive initial feedback from clients 1 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020At a Glance YouGov is an international research and data analytics group Our mission 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 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. Our values 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. Be fast Be fearless Get it right Trust each other 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. We are brave and believe we can do anything. We’ve proven we can. We innovate, take savvy risks, don’t follow the crowd. Be yourself. We are judged on our ethics, our methodology, and our accuracy – we will do the right thing as scientists, as technologists, and as citizens. We have a mission, a strategy, and a plan for implementation. We work together in trust – challenging, pushing, improving each other to fulfil our ambition. Underpinned by our commitment to ESG Public data See page 46 People and culture See page 49 Governance framework See page 51 Risk management See page 60 Environment See page 53 2 YouGov Annual Report & Accounts 2020Our reach YouGov has one of the world’s largest research networks Key YouGov proprietary panel YouGov Partnerships Programme panels Employees worldwide +1,100 Offices worldwide 37 Clients worldwide +3,300 Asia Pacific 9% employees 8 offices Mainland Europe 23% employees 12 offices Panellists worldwide +11m Americas 21% employees 8 offices UK 33% employees 3 offices MENA & India 14% employees 6 offices 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, Greece, Japan, Pakistan, Philippines, Poland, Russia, South Africa, UAE and Vietnam. 3 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020 Understanding the YouGov Platform Why clients buy from us What clients buy from us How we grow our business 4 Our client value proposition Best panel Our proprietary global panel of over 11 million registered members across more than 40 markets provide us with thousands of data points on consumer attitudes, opinions and behaviour on a daily basis. Our divisions Data Products This division comprises our syndicated data products, which are available to clients on a subscription basis. It includes our YouGov Plan & Track solution to help marketers plan and execute their campaign strategy and track its success. Our strategic pillars Data Integration Read case study see page 18 Our strategic priorities Product development and technology Panel YouGov Annual Report & Accounts 2020Best data The YouGov Cube is a unique single-source connected-data library that holds over ten years of longitudinal data. We leverage this data using our research expertise, including our application of Multilevel Regression with Post-stratification (“MRP”) methodology, to make 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. YouGov Crunch is the most advanced analytics tool for research data, combining super-fast processing with drag-and-drop simplicity. Client value proposition see page 6 Data Services This division comprises our YouGov RealTime (YouGov Omnibus outside the UK and US) service which provides clients a fast-turnaround and cost-effective solution for reaching nationally representative and specialist samples. Custom Research This division offers a wide range of quantitative and qualitative research, including substantial global trackers, that is tailored by sector specialist teams to meet clients’ specific requirements. Operational review see page 30 Public Data Read case study see page 20 Ethical Activation Read case study see page 22 Global infrastructure Global accounts Acquisitions Our strategic pillars see page 16 5 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Our Client Value Proposition Why clients buy from us Our 11 million registered panellists form the foundation of our business and ensuring they have a rewarding panel experience is the key to our success. They supply us with a continuous stream of attitudinal, opinion and behavioural data via various platforms, which we connect using our powerful analytics technology and sophisticated research methodologies to deliver a best-in- class dataset to our clients. This ensures that our clients receive accurate and actionable data and insights that can be used across the marketing workflow, from planning to developing and evaluating their marketing and communication activities. The quality of our data means we are seen as a trusted resource and regularly referenced by media outlets worldwide. Our panellists We aim to build and retain panels that are nationally representative to ensure the accuracy of our data. We acquire panellists in many different ways including via social media ads, via stories in the press and through a panellist referral scheme. Panellists get paid for time spent completing surveys using YouGov points, which can be redeemed for cash once they reach a predetermined level. Since we are highly quoted in mainstream media, our panellists enjoy a sense that their opinions are valued, that they are shaping agendas and part of the public debate. Our client value proposition Continual investment in our business and high visibility in mainstream media Best Panel Best Data Best Tools Creating One Platform augmented by new product additions Combined with YouGov Chat, YouGov Direct and YouGov Signal, we become a universal platform that activates both YouGov and client data Our clients Our clients are key players in the advertising and marketing ecosystem – including brand owners, media and advertising agencies, public relations firms and media owners. They use our data products, tools and research services to manage their entire marketing workflow, from strategy and planning, brand tracking and media planning to campaign effectiveness and audience profiling. The interoperability and connectedness of our products and services serves as a strong differentiator and we continue to work towards bringing the entire YouGov offering onto a universal platform, while enriching its capability and increasing the use cases of our offerings. 6 YouGov Annual Report & Accounts 2020Our investment case 1 2 3 4 5 6 7 8 9 Successful track record of scaling the business and delivering profitable growth Unparalleled depth and breadth of connected data increasingly being valued by clients Resilient, largely digital, business model resulting in significant operating leverage Culture of innovation ensures our offering is constantly evolving to meet client needs Increasing focus on account management and global expansion to drive next phase of growth Growing syndicated data products business providing strong margin expansion potential Developing from a supplier of data products and services into a true platform that includes activation Strong financial performance and solid balance sheet provides platform to deliver on growth ambitions Highly motivated leadership team with a clear goal of enhancing shareholder value 7 Survey responses are captured in our unique connected- data library and analysed using best-in-class analytics tools Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Chair’s Statement An encouraging start to the next phase of YouGov’s growth Roger Parry CBE Chair 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 employ over 1,100 people worldwide, operating from 37 offices across 24 countries and serving clients in more than 40 national markets. We operate a proprietary, high quality global panel of over 11 million registered members who share their data with us in ways that are fully compliant with data protection, privacy and security laws. The scale and duration of the COVID-19 pandemic is presenting a huge social and economic challenge. Against this backdrop in the second half of our financial year, I am pleased to report to shareholders that YouGov was able to meet the Board’s expectations and deliver strong financial performance in the year to 31 July 2020. We took rapid and agile action to ensure the safety and wellbeing of our employees. We have done extensive research on behalf of governments to understand people’s reaction to COVID-19 and we have made much of this information available free of charge as a public service. Results and dividend Group revenues were up 12% in reported terms to £152.4m (13% up on underlying1 business) while adjusted operating profit2 increased by 18% on the prior financial year to £21.8m. These results reflect an encouraging start to the next phase of YouGov’s growth. YouGov has a progressive dividend policy and in line with this the Board is pleased to recommend a dividend increase of 25% to 5.0p a share payable on 14 December 2020 to shareholders on the register as at 4 December 2020. Outlook The social and economic problems caused by the pandemic are far from over but, in terms of our financial performance, YouGov has started the new financial year well and trading is in line with the Board’s expectations. With a very strong balance sheet and evidence of growing demand for our products, we remain confident of meeting our long-term targets. Strategic direction The YouGov client base now spans a wide range of commercial and governmental clients in most of the world’s major markets. We provide our clients with insights to enable them to carry out their work more effectively. We do this by delivering research and proprietary software tools which interpret and display the data gathered from our proprietary global panel of over 11 million registered members. Increasingly, our clients engage with us on a subscription basis which allows them to enjoy a highly flexible and tailored real-time service. 8 Annual dividend per share 1.4p 2.0p 3.0p 4.0p 5.0p 6 1 / 5 1 0 2 7 1 / 6 1 0 2 8 1 / 7 1 0 2 9 1 / 8 1 0 2 0 2 / 9 1 0 2 YouGov Annual Report & Accounts 2020 Our strategy is to seek long-term contractual relationships and to become a crucial part of our clients’ business processes to enable them to plan their use of resources and to monitor the results of their activity. Long-term growth plans and incentives The financial year to 31 July 2020 was the first full year of our current long- term strategic growth plan (“FYP2”). The financial results for the year to 31 July 2019 set the base line for the Board approved targets for the FYP2 period (which runs from 1 August 2019 to 31 July 2023) to double Group revenue, double adjusted operating profit margin2, and achieve compound annual adjusted earnings per share2 (“EPS”) growth in excess of 30%. These stretching FYP2 targets underpin the current long-term incentive plan (“LTIP 2019”), which was approved by the Board in 2019 following a thorough design process supported by remuneration experts at Aon and in consultation with the Company’s major shareholders. The Board believes the LTIP 2019 design produces close alignment between shareholder and management interests, with full vesting of the LTIP 2019 requiring compound annual adjusted EPS2 growth of 35% by 2023. The Company’s previous long-term growth plan, FYP1, delivered compound annual adjusted EPS2 growth in excess of 25% over 2014-19, resulting in the full pay-out of the LTIP 2014 awards in November 2019. Clearly the COVID-19 crisis creates considerable uncertainty but based on the experience of trading in the second half of the last financial year (1 February to 31 July 2020) the Board believes the YouGov business model is well placed to provide value to our clients and therefore that the targets of FYP2 remain reasonable and achievable. Board composition The Board consists of three Executive Directors and four Independent Non- Executives. All appointments have been made following external advice. The Directors have a wide range of commercial expertise, and we believe the Board has the right balance of skills and experience to provide robust oversight and develop a well-informed strategy. While there are no immediate plans to make changes to the Board composition, we have a detailed succession planning process in place. 20 years of growth YouGov celebrates its 20th anniversary in 2020. It is two decades since Stephan Shakespeare and Nadhim Zahawi founded the Company as a pioneer of the then ground-breaking use of the internet to do market research. Since that time, many other players have come to use the internet for data collection, but we believe we have maintained our pioneering lead in terms of data analytics methodology and technology, and the duration of a proprietary global panel which is fully compliant with data privacy and security legislation. YouGov has thrived by having the right products and through constant innovation. But the strategy only works because it is executed well by YouGov’s management and wider workforce. This past year has been immensely challenging for our employees and on behalf of the Board I would like to thank the YouGov team for their flexibility, commitment and hard work. Roger Parry CBE Chair 15 October 2020 1 Defined as growth in business excluding impact of current and prior period acquisitions and business closures, and movement in exchange rates. 2 Defined in the explanation of non-IFRS measures on page 59. 9 YouGov Annual Report & Accounts 2020Chief Executive Officer’s Review Strong growth in line with our strategic growth plan Stephan Shakespeare Chief Executive Officer 10 YouGov Annual Report & Accounts 2020We continue to grow strongly with 12% revenue growth and 18% increase in adjusted operating profit1. This has been achieved despite undergoing an operational shift to a new client management model, as anticipated in our strategic plan, and the expected closing of our Kurdistan operations, as well as headwinds from the COVID-19 pandemic in the second half of our financial year. We were able to mitigate some of the early impacts of the pandemic by rapidly developing and delivering the global YouGov COVID-19 Tracker that engaged existing and new clients. The ability of our business model, to drive innovations quickly in response to market changes, gives us confidence that we will continue to outperform our competitors as demonstrated by our above market growth in 2019 (ESOMAR estimates that the market research industry grew 3.9% in 20192). Based on our performance, our confidence in the outlook for the business and our ability to fund growth without the need for government COVID-19 support funding, we are comfortable with continuing our progressive annual dividend policy and recommending a dividend of 5.0 pence per share for the year ended 31 July 2020. The key factors driving our continued strong growth are: ― robust performance of our two main geographies, the US and the UK, where we continue to focus our efforts and investments; ― full integration of YouGov Sport, which is expanding our client coverage beyond traditional sports products and contributing to sales performance; and ― panel growth in line with client demand as global Cube-aligned trackers become an increasingly important part of our offering. We are beginning to appeal to a wider market as innovations in technology, such as YouGov Chat, self-service and ethical activation through YouGov Direct, broaden our offering to an activation platform with capabilities beyond market research. The dynamics within the data analytics and market research industry are constantly evolving as increasing digitalisation, the use of artificial intelligence to gather data and scrutiny on privacy and transparency are opening up opportunities beyond traditional use cases. Furthermore, the COVID-19 pandemic presented a unique challenge for traditional research players, hampering their ability to conduct day-to-day operations and deliver on client projects. The qualities of YouGov’s digital business model came to the fore during this crisis as we were able to quickly adapt and remain relevant to our clients with our suite of COVID-19 products. Execution against our strategy to drive future growth Data Integration Strategic focus: Fully integrating custom research and client service with our data products and tools to create new value from existing data and open up new revenue streams through customisation Progress made against this pillar during the year: ― productised YouGov Cube- aligned custom trackers (e.g. customer satisfaction, Net Promoter Score® (“NPS®”) diagnostics, reputation, product usage and attitude) through collaboration between the Custom Research and Data Products divisions; ― added new sector-specific data to the YouGov Cube to enable efficient connected-data custom trackers; ― commenced restructuring of the client support function from separate teams for each division to a single client service flow; ― further developed the YouGov Crunch dashboard tools to include added functionality; ― launched self-service functions within YouGov Direct with a view to combining it with the YouGov Collaborate dashboard; and ― continued investment in integration of websites, apps, interfaces and dashboards. Read more on page 18 Strategic direction Current long-term strategic growth plan 2019-23 (FYP2) Our ambition is to be seen as the world’s leading provider and innovator in data-led marketing and research. The cornerstone of this ambition is having the world’s largest and most engaged panel, allowing us to be the leading supplier of proprietary panel data, used by every public- facing organisation and by hundreds of millions of people as a public information resource. Over time, we would like to extend our offer to an end-to-end platform that goes beyond supplying research data and analytics, all the way through to ethical large-scale activation using that data. The year to 31 July 2020 was the first year in our current long-term growth plan and execution has been in line with our expectations set out in the plan. As previously announced, the ambitious long- term incentive plan (“LTIP”) performance targets to incentivise Senior Management through to 2023 are: ― double Group revenue; ― double Group adjusted operating profit margin1; and ― achieve an adjusted earnings per share1 compound annual growth rate in excess of 30%. As previously disclosed, we have designated the first half of the long- term growth plan as the investment phase. In this phase we are continuing to invest in our panels, technologies, platforms, support functions and markets to enable us to scale further and make the most of the opportunities we see in our markets. To take this performance to the next level, we are continuing to focus on three strategic pillars: Data Integration, Ethical Activation and Public Data. 11 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Chief Executive Officer’s Review continued Ethical Activation Strategic focus: Enabling marketing activation on our platform with a focus on personal data protection and self- service research Progress made against this pillar during the year: ― launched an early release version of YouGov Direct to a small number of clients, including blue- chip companies; ― developed a fully functioning end- to-end self-service platform with dual capabilities, research and an advertising network; ― launched the platform in the US, UK and Canada, with further planned launches in Singapore and Australia before the end of the year; and ― established a rapidly growing, engaged member base allowing clients to receive same-day survey results. Read more on page 22 Public Data Strategic focus: Expanding YouGov Public Data as a public service, for brand reputation, panel engagement and showcasing our data Progress made against this pillar during the year: ― expanded YouGov Ratings into new categories, such as Influencers and Movies, and developed new categories of data, such as political and social topics, primarily intended for public value; ― launched YouGov America, a website focussed on the US Presidential Election and a hub for polls being run in conjunction with major US media outlets; ― developed and launched the YouGov COVID-19 Behaviour Tracker developed in partnership with Imperial College London to benefit public health and academic institutions globally; and ― released a beta version of the YouGov Screen publicly to allow visitors to view snippets of our data. Read more on page 20 12 18% Adjusted operating profit1 growth 12% Revenue growth Focus on operations As a platform, both in the technological sense and the business-model sense, we aim to be more efficient, smarter, faster, and 24/7. During the year, we expanded the geographic coverage of our shared service centres (called Centres of Excellence or CenX) and transformed their role from traditional client support to an always-on help desk for our syndicated products and self-service platform, with the ability to launch custom surveys at any time. In addition to this we have kicked off our new global key account management programme in the US and UK to become more client-centric and expand our role in their marketing efforts. We have continued to expand the geographic range of panels to Austria, Brazil, Switzerland and Turkey and to further develop our panels in other geographies in the year, driven in part by client demand. Read more on page 30 COVID-19 response The COVID-19 pandemic has caused severe disruption globally and impacted all our stakeholder groups to varying degrees. We took widespread measures to support these stakeholders while minimising the impact on our business. We evaluated payment delay and cancellation requests from clients on a case-by-case basis and supported them where possible. We moved our entire global workforce to working remotely at the start of the global lockdown in March 2020 and did not furlough any employees. As offices have reopened in some cities, we have taken extensive measures to ensure the safety of our employees and phased our return-to-office plans to ensure a smooth and safe transition. The majority of our staff continue to operate seamlessly from home and we are continuing to support individual circumstances as the situation evolves in our various markets. The YouGov management team would like to thank all our employees for supporting our clients and the business through these uncertain times and we look forward to celebrating our 20th anniversary with everyone in the coming year. Read more on page 50 YouGov Annual Report & Accounts 2020Environmental, social and governance Our commitment to ESG is core to what we do. We operate lawfully and ethically in all areas of ESG relevant to our business, from how we collect data from panellists, and how we engage and develop our workforce, to the design of our research and how we service our clients. Our environmental footprint is minimal given our digital business model, and we generally have limited business travel. However, we are keen on conducting accurate reporting and finding ways to reduce our environmental impact where we can. We are also committed to having a positive impact on society, by keeping our employees engaged and giving them opportunities to grow with the business. An example of this has been supporting our employees with the setting up of an internal Diversity & Inclusion Task Force, as a way to give a voice to our workforce around how to make YouGov more diverse and inclusive, across everything that we do. This Task Force has conducted a Company-wide survey and run a set of focus groups with employees to canvas the opinions of our staff in order to identify a set of actions that will help us make YouGov even more diverse and inclusive for all our stakeholders. Despite economic uncertainty over the past six months, performance across the Group continues to be resilient, delivering growth in both revenue and profit for the full year. Governance also has a key role in our strategic plan. It allows us to safeguard all the valuable data that we collect from panellists daily, through the governance frameworks that we have in place. We take our position as custodian of our panellists’ data very seriously. We believe YouGov Direct is an example of good governance in the field of ethical activation, fully in line with the EU General Data Protection Regulation (“GDPR”) and other data privacy and national security laws. We are fully dedicated to adopting appropriate social ethics and the way to achieve that is to ensure governance frameworks and processes are in place and are regularly reviewed and updated to remain relevant. Read more on page 44 Current trading and outlook Trading continues to be in line with the Board’s expectations for the current financial year. Despite economic uncertainty over the past six months, performance across the Group continues to be resilient, delivering growth in both revenue and profit for the full year. While we have not seen any material impact from the COVID-19 pandemic thus far, we recognise that marketing budgets may come under pressure if the current situation prolongs. As such, we are closely monitoring the situation and ensuring that we remain relevant to our clients through our advanced data, analytics and technological capabilities. We have maintained our strong balance sheet position which will allow us to continue to fund our FYP2 strategic growth plan through sufficient cash reserves. We thank all our panellists, partners and clients, and employees, for their ongoing contribution and commitment to YouGov’s ongoing success in these challenging times. Stephan Shakespeare Chief Executive Officer 15 October 2020 £152.4m 2019/20 revenue Data Products Data Services Custom Research 33% 25% 42% 15% 5-year revenue CAGR UK Americas Mainland Europe Middle East Asia Paciﬁc 30% 41% 15% 6% 8% 1 Defined in the explanation of non-IFRS measures on page 59. 2 According to the ESOMAR Global Market Research Report published in September 2020, global research market turnover grew by 3.9% in 2019 (adjusted for inflation). 13 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020 Structural trend Markets YouGov operates in the Global Market Research industry which includes the data, research, tech-enabled insights and data analytics sub-sectors. The industry was valued at $90bn1 by ESOMAR in 2019, with the US and Europe accounting for nearly 80% of the overall value. The growth of the industry has been moderate over the last couple of years due to political and economic uncertainty and as larger, more traditional players slowly adapt to ongoing technological changes. YouGov, an online research pioneer, is differentiated from other companies due to its focus on a high-quality online panel, advanced analytic systems, and integrated research products that reflect the changing needs of the market. The ability of our business model – to drive innovations quickly in response to market changes – gives us confidence that we will continue to outperform our competitors as demonstrated by our above market growth in the reporting year. Stephan Shakespeare Chief Executive Officer 14 Artificial intelligence COVID-19 disruption Privacy and transparency Technology and digitalisation YouGov Annual Report & Accounts 2020How it is impacting the market How YouGov is responding Artificial intelligence is playing an increasing role in data analytics and market research and its use cases are likely to evolve as time goes on. Industry players are under growing pressure to rapidly generate valuable insights from complex datasets. Additionally, companies are finding innovative ways to automate the process of survey and questionnaire design and data collection, through chatbots, surveybots and complex machine learning. As an online business, YouGov is in a unique position to adapt to technological advances in market research. Our acquisition of InConversation Media (“InConvo”), which combines chatbot technology with editorial flair, is one such example. We have integrated YouGov Chat (based on InConvo’s technology) into some of our products, such as YouGov Direct, as well as into Public Data initiatives, such as our US Presidential Election website, to drive interaction with the public. Additionally, our social media-listening tool, YouGov Signal, aggregates digital and social data in an automated way to identify the key emotions, drivers and responses used for a brand, sector or custom group of entities. The COVID-19 pandemic has had a profound impact on the industry as marketing budgets have shrunk and the ability to conduct more traditional forms of research, such as face-to-face interviews, has been significantly hampered. Consumers of market research are scrutinising their budgets to identify costs that deliver the highest ROI and are embracing digital solutions. The qualities of YouGov’s digital business model came to the fore during this crisis as we were able to quickly adapt to working from home and continued to roll out new products and capture market sentiment digitally during this uncertain time. Our clients’ need for data did not diminish during this period and we increased our relevance through our COVID-19 product suite, opening up new revenue streams. Data protection practices and ethics have been under focus in market research from a compliance and regulatory perspective. Individuals are increasingly wary of sharing personal data with businesses and are demanding greater transparency and more granular control over how their data is being used by organisations. YouGov has a direct relationship with its panellists, who choose which opportunities they want to participate in, so they have control over the data YouGov collects on them. Increases in privacy controls from global tech organisations such as Apple and Google, and greater regulation (e.g. GDPR and CCPA2), present an opportunity for YouGov Direct. YouGov Direct provides a direct route to market for advertisers to contact consumers using precise targeting data that has been granularly permissioned and those consumers are rewarded for use of their data. Technology and digitalisation Technological innovation and tools have been disrupting the data analytics and market research industries and enabling expansion into new disciplines. Adoption varies by country as some embrace change while others continue to rely on traditional research methods. Markets that are open to technological advances have seen a rise in consolidation as a way of accelerating automation in data collection and analytics. YouGov completed its plan to move away from traditional, project-based, market research to a subscription-based syndicated data model with supplementary data analysis services as part of its first five-year plan (“FYP1”). We have continued to invest in technology to expand our self-service offering to clients, while working towards integrating the entire YouGov product suite onto a universal platform. 1 According to the ESOMAR Global Market Research Report published in September 2020. The industry definition reflected in the report includes both the legacy traditional sector and the newer tech-enabled sector. 2 The EU General Data Protection Regulation (“GDPR”) and the California Consumer Privacy Act (“CCPA”). 15 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Our Strategic Pillars The success of our vision is underpinned by our three strategic pillars. Our ambition is to create a universal platform for the ethical and safe sharing of opinions and personal data so that we can offer our clients connected data, new analytical tools and innovative applications including activation (use of data in designing, targeting, delivering and monitoring success in large-scale marketing campaigns). The success of this vision is underpinned by three strategic pillars, which guide our initiatives and business decisions. 16 Strategic pillar What it means ― Connecting datasets in our vast data library to increase ways in which our data can be used ― Customisation for clients to make our data offerings more relevant to them ― Generates additional ― Continued investment in integration of our value from existing data ― Opens up new revenue streams for tools, interfaces and dashboards Custom Research ― Further development of using syndicated data YouGov Crunch websites, apps, products, Strategy in action products launched Using YouGov Recommend+ organically See page 18 Multiple new connected data ― Making the data we collect from the public available to the public in meaningful ways ― Launch of brand and NPS® trackers, such as YouGov Recommend+, using connected research data systems ― Increases brand ― Launch of YouGov Screen reputation and awareness ― Drives panel and client engagement ― Showcases the of our data ― Launch of the YouGov America website, including broad coverage of the upcoming US Presidential Election Strategy in action Using YouGov COVID-19 Tracker See page 20 breadth and accuracy ― Rapid development and launch of the YouGov COVID-19 Public Tracker ― Strategic partnership with Imperial College London in developing the YouGov COVID-19 Behaviour Tracker ― Enabling online advertisers ― Gives citizens control ― Launch of an early to use our data and platform to create large-scale targetable audiences and deliver marketing to them in a highly permissioned, GDPR- compliant manner of their data ― Results in greater ROI for marketers as demonstrated by increased click-through rate and conversions release version of YouGov Direct in the US, UK and Canada Strategy in action Using YouGov Direct ― Established a rapidly See page 22 growing, engaged member base 17% YOY growth in media mentions globally 800,000+ YouGov America site visits since June 2020 launch 300+ YouGov COVID-19 Monitor clients 50+ clients trialling the YouGov Direct platform 40k+ YouGov Direct member base Data Integration Public Data Ethical Activation YouGov Annual Report & Accounts 2020 How it adds value 2019/20 progress Strategy in action Measure of success Strategy in action Using YouGov Recommend+ See page 18 Multiple new connected data products launched organically ― Connecting datasets in our vast data library to increase ways in which our data can be used ― Customisation for clients to make our data offerings more relevant to them ― Generates additional value from existing data ― Opens up new revenue streams for Custom Research using syndicated data ― Making the data we collect from the public available to the public in meaningful ways ― Increases brand reputation and awareness ― Drives panel and client engagement ― Showcases the breadth and accuracy of our data ― Continued investment in integration of our websites, apps, products, tools, interfaces and dashboards ― Further development of YouGov Crunch ― Launch of brand and NPS® trackers, such as YouGov Recommend+, using connected research data systems ― Launch of YouGov Screen ― Launch of the YouGov America website, including broad coverage of the upcoming US Presidential Election ― Rapid development and launch of the YouGov COVID-19 Public Tracker ― Strategic partnership with Imperial College London in developing the YouGov COVID-19 Behaviour Tracker Strategy in action Using YouGov COVID-19 Tracker See page 20 ― Enabling online advertisers to use our data and platform to create large-scale targetable audiences and deliver marketing to them in a highly permissioned, GDPR- compliant manner ― Gives citizens control ― Launch of an early of their data ― Results in greater ROI for marketers as demonstrated by increased click-through rate and conversions release version of YouGov Direct in the US, UK and Canada ― Established a rapidly growing, engaged member base Strategy in action Using YouGov Direct See page 22 17% YOY growth in media mentions globally 800,000+ YouGov America site visits since June 2020 launch 300+ YouGov COVID-19 Monitor clients 50+ clients trialling the YouGov Direct platform 40k+ YouGov Direct member base 17 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020 Strategy in Action Data Integration Gauging brand loyalty and harnessing valuable insights into drivers of consumer advocacy The challenge Net Promoter Score®1 is a well-known methodology designed to gauge a customer’s loyalty towards a brand or company. It has been widely adopted by companies worldwide to determine the strength of their relationship with their clients. While NPS® is popular among corporate management teams, it is limited in its ability to predict future customer loyalty and how companies can drive NPS® higher. A YouGov client wanted to track NPS® in a standardised way across several regions in which it operates and to understand what drives and influences NPS®, using custom sampling and questions. Our approach Our Custom Research team worked closely with the client to understand their needs and determine the best way to approach their requirements, while providing highly valuable insights into customer behaviour. We quickly recognised that while custom sampling and surveys were necessary to deliver the project successfully, the bespoke data could be analysed in a more meaningful way if it could be connected back to the data-rich YouGov Cube. Since we run YouGov BrandIndex surveys daily in most markets, we have a good insight into a brand’s current customer base. We developed a brand- specific, templated survey that we can put to the client’s customer base, using our YouGov Re-Contact service, to capture NPS® as well as emotional and conviction-based drivers that influence NPS®. This combined the benefits of a syndicated tracker with bespoke NPS® research requirements. The study illustrated here was conducted by YouGov to understand the key drivers of NPS® for two competing supermarket chains with different market positionings. The results show that while both brands are well loved by current customers, the NPS® for the premium supermarket chain is driven by a customer’s affection towards the brand, whereas the value supermarket chain is less reliant on that affection to gain promoters. On the other hand, while both brands are trusted by consumers to a similar degree, the value chain needs to have a greater focus on maintaining that trust to drive NPS® further. The study was conducted in October 2019 with a sample size of 630 respondents in the UK. The outcome YouGov developed a new product, YouGov Recommend+, that links responses from commissioned NPS® brand health studies to the rich pre-existing information about more rational drivers behind brand relationships on BrandIndex. The result is a highly cost-effective NPS® diagnostics approach to give marketers the full picture on what drives consumer advocacy. Marketing professionals can evaluate the importance of factors such as brand image, brand values, emotion and consumer personality in determining whether someone is likely to recommend a brand or not. Additionally, given the linkage to the Cube, clients can choose to further enhance their understanding of their customer base using our Profiles product offering. Recommend+ 0 2 0 2 s t n u o c c A & t r o p e R l a u n n A v o G u o Y 18 Strategic report Governance report Financial statements Additional information “It’s a brand I love” Performance Score (Scale 1 – 5) “It’s a brand I love” Importance in driving NPS® (Scale 0 – 1) Premium Supermarket Brand #1 Value Supermarket Brand #1 “I believe what this brand tells me” Performance Score (Scale 1 – 5) “I believe what this brand tells me” Importance in driving NPS® (Scale 0 – 1) Premium Supermarket Brand #1 Value Supermarket Brand #1 1 The NPS® was developed by Fred Reichheld and is a registered trademark of Bain & Company and Satmetrix. Y o u G o v A n n u a l R e p o r t & A c c o u n t s 2 0 2 0 19 Strategy in Action Public Data Providing data for public value to help assess the impact of COVID-19 % of people who say they are “very worried” or “fairly worried” that their children’s education will suffer as a result of the COVID-19 outbreak The challenge As the COVID-19 pandemic emerged and economies started to go into lockdown, there was a significant shift in consumer behaviour, opinions on Government performance and impact on livelihood. It became increasingly difficult to understand consumer sentiment and historical data was no longer reliable as the severity of the situation had unprecedented and wide- ranging consequences on daily lives. Organisations needed real-time data to manage their operations and responses in a rapidly changing environment. Our approach As a global public opinion organisation, YouGov is privileged to have so many people around the world share their views and behaviours with us every day. As soon as COVID-19 emerged in the Asia Pacific region, our local teams started asking panellists to share their experiences about the situation. This allowed us to quickly replicate the research approach around the world as the virus spread globally. When the crisis was officially declared a global pandemic, our teams used the wealth of information that had already been gathered to turn these opinions into powerful datasets that could be used by governments, public health organisations, media agencies and brands to help them best navigate the pandemic and the evolving consequences of it. The outcome YouGov developed three COVID-19 data products: 1. YouGov COVID-19 Public Tracker Covering 27 countries and including responses from over 400,000 surveys. The tracker, available publicly on our website, looks at the impact of COVID-19 on a broad range of topics such as fear, behaviours, support for and compliance with Government measures, impact on personal finances and job security. 2. YouGov COVID-19 Economic Recovery and Consumer Monitor Covering three key countries with a consistent approach to allow for internal comparison and benchmarking. It is a paid- for product that goes beyond our public data, offering greater depth around three key areas: governmental approval, employment and changing habits. 3. YouGov COVID-19 Behaviour Tracker Covering 29 countries with more than 20,000 people interviewed each week. It was designed in partnership with Imperial College London to gather global insights on people’s behaviours in response to COVID-19. Anonymised respondent level datasets were made readily available for download on GitHub™. to benefit public health and academic institutions globally. 20 USUKSwedenMexicoSingaporeIndia28%19%15%51%32%53%YouGov Annual Report & Accounts 2020% of people who say their household’s financial situation has “worsened” compared to one month ago % of people who think their country’s Government is handling the issue of COVID-19 “very well” or “fairly well” This survey was conducted between 1 – 9 June 2020 with a sample size of 1,000 – 2,000 people in the above-mentioned countries. 21 USUKSwedenMexicoSingaporeIndia23%21%17%61%39%46%USUKSwedenMexicoSingaporeIndia41%39%51%36%81%73%Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Strategy in Action Ethical Activation Targeted activation and empowering members’ control over their data The challenge The EU General Data Protection Regulation (“GDPR”), which came into effect in May 2018, is designed to give people in the EU more control over their personal data. The GDPR requires organisations handling personal data to be transparent about their collection and use of data, protect it from misuse and exploitation, and give people control over how their data is used. It also puts the onus on organisations to protect the privacy of their customers and employees by building privacy safeguards into products and services. The GDPR is the most comprehensive privacy regulation the world has ever seen, and required organisations to make, in some cases, considerable adaptions in order to comply; this was particularly true for the market research, media and technology industries which rely heavily on the handling of personal data as part of their business models. Since the implementation of GDPR, a number of countries have followed suit with the implementation of new or upgraded privacy legislation, for example the California Consumer Privacy Act (“CCPA”). The CCPA was signed into effect in January 2020 to enhance privacy rights and consumer protection for residents of California, US. Our approach Rather than view GDPR as a compliance burden, YouGov saw increased privacy regulation as an opportunity to create a new type of data marketplace that: ― improves understanding of audiences and ad targeting for brands and media agencies and turns advertising into a two- way conversation; ― empowers members with greater control of their data and creates the opportunity for them to obtain fair value from its use; and ― enables transformation of the digital marketing world by tackling some of the key challenges within the existing ecosystem – fraud and transparency. The outcome YouGov Direct is a fully opted- in and completely transparent audience insights platform supported by precise profiling data. It is a blockchain-based platform and advertising network that empowers members to choose which attributes they make available to marketers and advertisers, while earning rewards, and allows advertisers to pinpoint the audience they need. Through YouGov Direct, organisations are able to get the results they need in minutes, from testing creatives to evaluating campaign performance. Blockchain technology allowed us to create an audit trail of verifiable transactions between advertiser and member. It breaks the traditional boundaries between research and marketing as advertisements can now be linked to actual business outcomes. It also allows members to sell their data to our clients so that companies can better serve and communicate with them. Direct 22 2,000 responses in 9 minutes Insight informed decision-making YouGov Annual Report & Accounts 2020A major UK automotive manufacturer has baked ad testing into its marketing workflow by using YouGov Direct to test television ads prior to launch. Between June 2019 and March 2020, the client ran ad tests on YouGov Direct ahead of three major campaigns, providing them with fast-turnaround insights within hours on effectiveness, key message take-out and creative direction. Ads were targeted to YouGov Direct users based on the current customer segments and likely future prospects. One such ad test yielded the following results. 2,000 responses in 9 minutes Insight informed decision-making 23 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Our Strategic Priorities Based on our three strategic pillars (Data Integration, Public Data and Ethical Activation), we have identified five key priorities that will be a focus in the near term. Our ability to successfully execute on these priorities will ultimately determine delivery of management targets set out in our current growth plan (FYP2). Our strategic priorities 2019/20 progress Acquisitions Global accounts ― YouGov Sport (previously SMG Insight) delivered strong performance despite COVID-19 impact on sports sector ― Integrated Inconvo’s chatbot technology into YouGov Direct ― Integrated YouGov Signal’s social and digital sentiment analysis tool with the YouGov Cube ― SMG Insight earn-out ― Continue to identify bolt-on acquisition targets ended ahead of schedule that increase sector coverage, expand access as the business exceeded to panel and advance technological capabilities its targets ― Average response rate of 30% per YouGov Chat ― Kicked off global key account management programme in the US and UK to focus on cultivating our most significant client accounts for cross-selling and up-selling opportunities ― 25 key client accounts ― Identify largest, multi-national clients in EU identified in the US and and Asia Pacific and extend key account 40 in the UK management programme to those regions Global infrastructure ― Established Centres of Excellence (“CenX”) to streamline operational activities ― Set up of new data processing hub in Bangalore and technology development hub in Toronto ― Data operations overheads as a percentage of global revenue down from 4% in 2014/15 to 2% in 2019/20 ― Build a global presence providing 24/7 client support to increase appeal of our self- service offering and to support syndicated data customers Panel ― Further invested in building and developing our existing panels in Australia, Canada, India, Italy, Mexico, Poland, Spain and Taiwan ― Continuously monitored make-up and diversity of panel to ensure it is nationally representative ― Number of panellists up ― Panel expansion underway to include Austria, 37% year-on-year globally Brazil, Switzerland and Turkey in response to ― Established panel in four client demand new countries during ― Increase panellists in under-represented the year fragments of the population ― 20% year-on-year growth ― Closely monitor and drive down cost per acquisition in well-established markets in on-panel survey completes in 2019/20 Product development and technology ― Further developed our proprietary technology, including our analytics software YouGov Crunch ― Launched new products, such as YouGov Recommend+ and YouGov DestinationIndex ― Launch of YouGov Screen, our free YouGov Audience Explorer tool that helps build a deck- ready portrait of audiences ― Number of YouGov ― Develop the YouGov Screen into a Crunch users up 64% unique marketing platform year-on-year ― Streamline our websites, apps and dashboards ― Starting to see uptake of to make it easier for our clients and the public to YouGov DestinationIndex interact with our data with a healthy sales pipeline ― Continue developing and launching new products while increasing availability of existing products, such as YouGov Direct, globally 24 YouGov Annual Report & Accounts 2020Measure of success 2020/21 objectives Our long-term targets (2019-23)1 ― YouGov Sport (previously SMG Insight) delivered strong performance despite COVID-19 impact on sports sector ― Integrated Inconvo’s chatbot technology into YouGov Direct ― Integrated YouGov Signal’s social and digital sentiment analysis tool with the YouGov Cube ― SMG Insight earn-out ended ahead of schedule as the business exceeded its targets ― Average response rate of 30% per YouGov Chat ― Continue to identify bolt-on acquisition targets that increase sector coverage, expand access to panel and advance technological capabilities ― Kicked off global key account management programme in the US and UK to focus on cultivating our most significant client accounts for cross-selling and up-selling opportunities ― 25 key client accounts identified in the US and 40 in the UK ― Identify largest, multi-national clients in EU and Asia Pacific and extend key account management programme to those regions ― Established Centres of Excellence (“CenX”) to streamline operational activities ― Set up of new data processing hub in Bangalore and technology development hub in Toronto ― Data operations overheads as a percentage of global revenue down from 4% in 2014/15 to 2% in 2019/20 ― Build a global presence providing 24/7 client support to increase appeal of our self- service offering and to support syndicated data customers ― Further invested in building and developing our existing panels in Australia, Canada, India, Italy, Mexico, Poland, Spain and Taiwan ― Continuously monitored make-up and diversity of panel to ensure it is nationally representative ― Number of panellists up 37% year-on-year globally ― Established panel in four new countries during the year ― 20% year-on-year growth in on-panel survey completes in 2019/20 ― Panel expansion underway to include Austria, Brazil, Switzerland and Turkey in response to client demand ― Increase panellists in under-represented fragments of the population ― Closely monitor and drive down cost per acquisition in well-established markets ― Further developed our proprietary technology, including our analytics software YouGov Crunch ― Launched new products, such as YouGov Recommend+ and YouGov DestinationIndex ― Launch of YouGov Screen, our free YouGov Audience Explorer tool that helps build a deck- ready portrait of audiences ― Number of YouGov ― Develop the YouGov Screen into a Crunch users up 64% year-on-year ― Starting to see uptake of YouGov DestinationIndex with a healthy sales pipeline unique marketing platform ― Streamline our websites, apps and dashboards to make it easier for our clients and the public to interact with our data ― Continue developing and launching new products while increasing availability of existing products, such as YouGov Direct, globally Double Revenue Double Margin EPS CAGR > 30% 1 For more details on the FYP2 financial targets see page 11. 25 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Key Performance Indicators Financial KPIs1 Revenue Adjusted operating profit2 and margin Adjusted earnings per share2 £152.4m 2019: £136.5m £21.8m 2019: £18.5m 18.1p 2019: 15.0p Definition Definition Definition Revenue is recognised in accordance with IFRS 15, 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 Operating profit including amortisation of intangible assets charged to operating expenses and excluding separately reported items. Adjusted operating profit margin2 is expressed as a percentage of revenue Adjusted profit after tax attributable to owners of the parent2 divided by the weighted average number of shares Purpose Purpose Purpose Quantifies revenue generated from our operations to ensure we are growing our business Monitors our operating cost levels to ensure we are benefitting from operational leverage as our business grows Measures our ability to generate shareholder returns from our operations Objective Objective Objective Double Group revenue between 2019 and 2023 Double Group adjusted operating margin2 between 2019 and 2023 Achieve an adjusted EPS2 CAGR in excess of 30% for the period 2019-23 Revenue (£m) . 5 6 3 1 . 6 6 1 1 152.4 Adjusted operating proﬁt2 (£m) . 5 8 1 21.8 14.3 13.5 . 7 2 1 10.9 Adjusted earnings per share2 (pence) . 0 5 1 18.1 . 5 1 1 8 1 / 7 1 0 2 9 1 / 8 1 0 2 0 2 / 9 1 0 2 8 1 / 7 1 0 2 9 1 / 8 1 0 2 0 2 / 9 1 0 2 Adjusted operating proﬁt2 margin % 8 1 / 7 1 0 2 9 1 / 8 1 0 2 0 2 / 9 1 0 2 1 For a five-year summary of financial KPIs refer to page 146 of the Financial Statements. 2 Defined in the explanation of non-IFRS measures on page 59. 26 YouGov Annual Report & Accounts 2020 Operating cash generation £38.7m 2019: £38.4m Operational KPIs 12-month panel retention 69% 2019: 67% Number of clients and avg. revenue per client 3,344clients 2019: 3,075 clients Definition Definition Definition Profit before tax adjusted for finance income/costs, non- cash items and change in working capital Proportion of panellists who were active 12 months prior to the month cited who are still active in the month cited Number of clients that provided revenue. Average revenue per client is revenue for the period divided by the number of clients Purpose Purpose Purpose Indicates the level of cash generated from the ongoing commercial activities of the business Measures the health of the panel by quantifying how well we are retaining engaged users Monitors ability of our sales team to bring in new clients while continuing to up-sell and cross-sell to existing clients Objective Objective Objective Generate sufficient cash from operations to continue to fund our organic growth plans Operating cash generation (£m) . 4 8 3 38.7 . 6 3 2 Maintain high panel retention to allow us to re-contact panellists and augment our connected dataset over a long period of time 12-month panel retention (%) 7 4 6 6 69 8 1 / 7 1 0 2 9 1 / 8 1 0 2 0 2 / 9 1 0 2 8 1 0 2 y l u J 9 1 0 2 y l u J 0 2 0 2 y l u J Ensure we are growing our client base and increasing revenue generated per client Number of clients 5 7 0 3 , 2 7 8 2 , 3,344 46 44 41 8 1 / 7 1 0 2 9 1 / 8 1 0 2 0 2 / 9 1 0 2 Average revenue per client (£’000s) 27 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020 Business Model Our mission and vision Our business model Our mission 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 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. Key strengths and inputs ― Pioneer of online market research ― Large proprietary panel with strong panellist relationships ― Unparalleled depth and breadth of connected data ― Innovative market- leading technology ― Internet-based approach enabling rapid delivery and resilience ― Global reach supported by CenX model ― Continuous reinvestment into business ― Ethical approach, embracing GDPR ― Respected brand name What we do We collect and analyse opinion and behavioural data from our proprietary global panel of 11 million registered members to provide our clients with data and insights to help them plan, develop and evaluate the impact of their marketing and communication activities. What makes us different Our internet-based approach is a key differentiator as it allows us to keep panellists engaged for longer, connect longitudinal data in a high- value, structured manner and analyse it faster and more accurately. Best Panel YouGov has one of the world’s largest research networks with a proprietary panel spanning over 40 markets worldwide, providing us with thousands of data points on consumer attitudes, opinions and behaviour on a daily basis. Best Data Panel data is captured in the YouGov Cube, our unique connected-data library encompassing hundreds of thousands of variables and over a decade of data on our panel members. As the pioneer of online market research, we have a strong track record for data accuracy and innovation. Best Tools The value of our connected data is maximised through the application of leading-edge analytics technology and strong research expertise. Our integrated suite of products, services and tools operates as a systematic platform serving YouGov data and intelligence for all stages of the marketing workflow, including ethical activation. and strong media presence Underpinned by our Company Values ― Talented, driven professionals ― Strong culture and reputed management team ― Robust financial position As we entered our current phase of growth in 2019, we launched our new Company Values. Our teams are encouraged to demonstrate these values in their day-to-day work. 28 YouGov Annual Report & Accounts 2020Strategic priorities Value we create for our stakeholders ― Continue investment in product development and technology to ensure we remain ahead of the market by becoming the new platform for brands to conduct large-scale engagement and ethical activation ― Further expansion of our proprietary online panel into new geographies to increase multi-national research capabilities ― Increase efficiency through our CenX model to provide a superior client experience ― Target key client accounts for cross-sell and up-sell opportunities, initially focusing on large multi- nationals, to integrate our data and tools across their entire marketing workflow ― Identify and evaluate acquisition opportunities to help build scale and fill technological gaps as necessary Read more see page 24 Panellists Rewards for participation in surveys, and having their opinions shape agendas Employees Competitive remuneration, attractive culture and personal development opportunities Community Public data as a resource for organisations to understand public opinion Clients Research data and insights that fulfils their business needs Suppliers and partners Mutually beneficial relationships built on shared values Shareholders Return on investment through share price growth and dividends Media Topical data and research to support editorial teams Read more see page 40 Be fast Be fearless Get it right Trust each other 29 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020 Operational Review Commentary from Sundip Chahal, Chief Operating Officer YouGov has continued to expand its footprint, not only in established markets, but also across new greenfield start-ups which have seen encouraging progress ahead of initial expectations. This success has been underpinned by our CenX approach and philosophy – consistent, repeatable, cost- effective – enabling us to drive growth. We are continuing to see efficiency gains across the core business stemming from increased capability and experience in our CenX worldwide. Our new site in Bangalore is also enabling greater opportunity in technology development. The dispersed, always- on nature of our business meant that we were able to move quickly to fully working remotely, even in the more difficult locations such as India, and absorbed any short-term loss of productivity as we adapted. Our sales teams are undergoing a transformation to be more integrated across the business, and we believe there is still ample headroom, especially in the US. We continue to see opportunity for greater cross-selling and are confident that the new global key account management function can really help drive stickiness with large, multi-national clients. We also continue to benefit from synergies from our acquisition of the SMG Insight business (re- branded as YouGov Sport), through the expansion of capabilities and awareness in aligned sectors, using a similar blueprint. 0 2 0 2 s t n u o c c A & t r o p e R l a u n n A v o G u o Y 30 Data Products Description YouGov’s Data Products division comprises our syndicated data products, which are available to clients on a subscription basis. YouGov is continuously capturing live streams of data from its proprietary panel in the YouGov Cube, our unique connected data library. Data Products tap into the Cube, which includes over ten years of historic single-source data, to provide continuous monitoring of brand fundamentals and a detailed portrait of consumer segments. We provide training to clients when onboarding them to ensure they can extract the highest value from the platform and provide customer support through our global client service teams. Contracts are typically negotiated on an annual basis and clients can adjust the number of users and geographies to suit their marketing needs. Data Products subscribers can also access additional datasets via subscription bolt-ons for specialised needs. Products Data Products mainly consists of our YouGov BrandIndex and YouGov Profiles products, which have been combined into our YouGov Plan & Track solution. BrandIndex allows users to continuously monitor brand fundamentals including brand awareness, advertising awareness, word of mouth, brand health, consideration, purchase intent, and customer satisfaction. BrandIndex data is updated daily (or bi-weekly or weekly in some developing markets) and includes up to 12 years of historical data. Profiles offers the largest, most detailed and real-time consumer database updated weekly. It connects cross-sectional data from panellists on demographics and lifestyle, brand, sector, and media, digital and social data all in one place, combining that with attitudes, interests, views and likes. Data Products also includes several other products such as YouGov SportsIndex, measuring quality, performance and market potential for the most relevant sports leagues and events globally, and YouGov Signal, which tracks the digital expression of opinions on social media platforms and applies complex machine learning to contextualise online sentiment and conversation. YouGov DestinationIndex is a new tool tracking public opinion of 120 destinations across 25 key markets daily to provide marketers with insights into the public’s perceptions of their destination, as well as their competitors. How clients use it ― Audience identification and analysis ― Media targeting ― Campaign effectiveness ― Brand health monitoring ― Social media listening and analytics Data Services Custom Research Description YouGov’s Data Services division provides clients with fast-turnaround survey services, charged on a rate-card basis. 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). Our targeted services use the same fast-turnaround tools to reach bespoke samples where clients need responses from a more targeted audience. Description YouGov’s Custom Research division offers bespoke quantitative and qualitative research services delivered by sector specialists to meet a client’s specific requirements. Our sector specialisms include consumer, corporate reputation and B2B, financial services, media and technology, sports and political and public sector. Our researchers work in conjunction with our clients to tailor research projects, from custom samples to questionnaires, and then deliver the results in line with the client’s precise needs. Our highly trained researchers support clients in designing survey questions in line with best practice, using our user-friendly, interactive questionnaire scripting tool, YouGov Collaborate. It significantly enhances the speed of survey building and ensures users obtain the most accurate and actionable responses. Our research teams also extract connected data on survey respondents, housed within the data-rich YouGov Cube, to allow clients to analyse findings with unrivalled granularity. The results of the surveys and the connected data are reported in YouGov Crunch, our online data visualisation tool, which helps clients interpret and present compelling data to key stakeholders. Products YouGov RealTime (known as YouGov Omnibus in the UK and US), is the market-leading online omnibus survey service in the UK and available in 40 markets globally. RealTime is underpinned by YouGov’s purpose-built technology and our highly engaged online panel, ensuring you can build surveys, watch live results and interpret robust, reliable data with ease. The size and diversity of the YouGov panel has also enabled us to extend our omnibus services to highly niche groups, for example B2B, C-Suite Directors and Members of UK Parliament. This allows clients with specialised research needs to run targeted surveys in a quick, cost-efficient manner. YouGov Re-Contact works in conjunction with our subscription data products. Data Products subscribers can use it to undertake one or multiple fast-turnaround Omnibus surveys to augment the syndicated data they receive through YouGov BrandIndex and YouGov Profiles. As part of our Data Integration pillar, Custom Research services have been strategically re-positioned to better align with our syndicated data products and services. Our research projects draw upon and build on data we hold in our data library, the Cube, and projects are delivered through our data analytics tool, Crunch. Based on this, we have developed commoditised research products that can be customised to meet specific client needs. Products Custom Research projects vary significantly in scope, scale and complexity and can range from large-scale national and multi- national tracking studies to one-off surveys designed to address and explore specific commercial, social or political issues for the client. YouGov Recommend+ is a brand-specific NPS® diagnostics approach to give marketers the full picture on what drives consumer advocacy. Marketing professionals can evaluate the importance of factors such as brand image, brand values, emotion and consumer personality in determining whether someone is likely to recommend a brand. How clients use it ― Marketing and customer insight ― Generate media PR and coverage ― Win pitches ― Campaign planning and evaluation ― Ad tracking and concept testing ― New product development How clients use it ― Tracking studies such as campaign effectiveness and customer satisfaction ― Brand health and reputation studies ― Syndicated studies covering sector or product trends ― Qualitative research ― Customer profiling 31 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Data Products YouGov’s Data Products division comprises our syndicated data products, which are available to clients on a subscription basis. 32 YouGov Annual Report & Accounts 2020Our data products have continuously evolved over the past year to track more brands, sectors and variables on consumers, which has helped us grow our client base and allowed clients to plan and execute more effective campaign strategies and track their success. We have also developed advanced modules of our publicly available YouGov COVID-19 Monitor on a paid-for basis to help clients navigate these challenging times. Strategic focus ― Continue to widen brand and sector coverage to help expand client base ― Transition basic client support responsibilities to our CenX to ensure 24/7 availability ― Increase understanding of client businesses and challenges internally to enable our teams to address them using integrated YouGov capabilities ― Enhance local expertise to provide more effective solutions ― Raise level of client service to maintain strong renewal rates Data Products 16.6 24.1 30.4 41.5 51.3 Financial performance Revenue from Data Products increased by 24% (21% growth in underlying terms) in the 12 months to 31 July 2020. Strong performance was seen across all geographies, against a difficult trading environment for some clients. Our business model of collecting and delivering data digitally ensured our clients were able to continuously monitor brand fundamentals and plan effective media campaigns despite the ongoing turbulence caused by the COVID-19 pandemic. Rapidly changing consumer behaviour and sentiment increased the importance of receiving up-to-date data and we were able to capitalise on that client need as demonstrated by our performance. Adjusted operating profit1 from Data Products increased by 26% to £18.0m and the operating margin increased by 1% to 35% reflecting the operational leverage of the division which benefits from a high level of automation for data collection and product delivery as well as our proprietary data. 2019/20 operational highlights We expanded the geographic reach of our syndicated data products suite during the year through our panel expansion. YouGov BrandIndex is now available in 42 countries (2019: 40) and YouGov Plan & Track (the combined BrandIndex and Profiles proposition) is available in 24 countries (2019: 21). Through our acquisition of SMG Insight (now YouGov Sport), our YouGov SportsIndex data product is available in 38 countries (2019: 38). Case study Since YouGov DestinationIndex was developed in 2019, a US-based airline carrier has been leveraging the tool not just to measure and track interest in key destinations, but to identify potential customers and new opportunities through the use of custom audience filters. The client can now measure its brand health by travellers to destinations it services and others around the globe, while filtering its own brand metrics through the most relevant audience segments. In addition, the airline carrier also utilises the data to help determine routes based on interest in travelling to and from specific destinations. This success led to a global launch of the product in July 2020. 34 35 31 29 27 6 1 / 5 1 0 2 7 1 / 6 1 0 2 8 1 / 7 1 0 2 9 1 / 8 1 0 2 0 2 / 9 1 0 2 Revenue £m 1 Defined in the explanation of non-IFRS measures on page 59. Adjusted operating proﬁt margin1 % 33 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020 Data Services YouGov’s Data Services division provides clients with fast-turnaround survey services, charged on a rate-card basis. 34 YouGov Annual Report & Accounts 2020Financial performance Revenue from Data Services increased by 2% (4% growth in underlying terms) in the 12 months to 31 July 2020. The focus on the US market and further territorial expansion has helped the division expand the revenue base beyond the core UK market. However, growth was moderated in the year due to several factors including a reorganisation in the Nordics, non-recurring election work in Asia Pacific in the prior year, subdued performance in Germany and temporary disruption from an internal sales restructure in the US. Adjusted operating profit1 from Data Services decreased by 6% to £7.0m and the operating margin declined by 2% to 18%. The margin decline was largely driven by an increase in allocation of central costs and the full-year impact of transferring lower margin project work from the Custom Research division in the Nordics in the prior year. The division has also seen lower underlying growth in recent years which has lowered its ability to absorb rising investment costs. 2019/20 operational highlights As part of the new five-year strategic plan, the Data Services division has been focusing on an operational integration with the Custom Research division in an effort to streamline the research process and deliver higher-quality output and service to our clients. This reorganisation has resulted in some temporary disruption while we better align our teams and provide them with the right tools to deliver growth in the future. We have also started to build out teams at our CenX that will be able to assist our research teams globally and have already started to see positive results of this transition in the form of greater collaboration between all three divisions on delivering valuable insights to clients. On the technological front, we have continued to invest in enhancing the capabilities of our YouGov RealTime service, introducing the availability of live reporting of survey results as well as data delivery though our leading-edge Crunch analytics platform. The Data Services team has furthered the development of YouGov Collaborate, our aided self-service tool for the creation of research projects, and it has been implemented across all our internal markets and is being used by a number of clients. Strategic focus ― Drive efficiencies across the business through automation, offshoring and combining resources with the Custom Research team ― Increase client engagement and satisfaction with a goal of driving greater loyalty ― Marketing the entire YouGov product suite as one combined offering through focus on Cube-aligned research work ― Complete the ongoing reorganisation of the teams with an aim to integrate Europe and Asia by the end of the next financial year Data Services 17.9 23.3 29.0 37.2 37.8 29 24 21 20 18 6 1 / 5 1 0 2 7 1 / 6 1 0 2 8 1 / 7 1 0 2 9 1 / 8 1 0 2 0 2 / 9 1 0 2 Revenue £m Case study With backing from supporters such as Google, Ofcom and BBC News, the Reuters Institute for the Study of Journalism’s Digital News Report is a worldwide study based on YouGov data. Using YouGov RealTime survey tools and Custom Research expertise, the 2020 study is based on data from 80,000 online news consumers in 40 markets – including Kenya and the Philippines for the first time. The 2020 report looks at the impact of the COVID-19 pandemic on news consumption and on the economic prospects for publishers. It also looks at progress on new paid online business models, trust and misinformation, partisanship and populism, and the popularity of curated editorial products such as podcasts and email newsletters. 1 Defined in the explanation of non-IFRS measures on page 59. Adjusted operating proﬁt margin1 % 35 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020 Custom Research YouGov’s Custom Research division offers bespoke quantitative and qualitative research services delivered by sector specialists to meet a client’s specific requirements. 36 YouGov Annual Report & Accounts 2020Financial performance Revenue from Custom Research grew by 8% (12% growth in underlying terms) in the 12 months to 31 July 2020, compared to modest growth of 2% in the prior year. The improved performance of the division has largely been driven by the US and UK, as the realignment of the business with our connected data offering began to show positive results. While the division saw some weakness in typical project work, it was offset by COVID-19-related work and continued growth from technology clients. Performance in Mainland Europe was impacted by an ongoing restructuring in the first half of the year, as part of which certain segments were transferred to the Data Services division and recovered in the second half following large contract wins. The Middle East business was impacted by the winding down of the Kurdistan business as part our shift in focus to research projects and tracking studies that draw upon and build on our vast data library. Adjusted operating profit1 declined by 4% in the year, representing an adjusted operating profit margin of 20% (2019: 22%). This decline was largely due to the closure of the Kurdistan business and an increase in central cost allocations. 2019/20 operational highlights The Custom Research division underwent a business transformation during our first five-year plan (“FYP1”) which concluded on 31 July 2019. As part of this transformation, we moved away from labour-intensive research projects and focused on higher-margin contracts that use the power of our connected dataset. During 2019/20, we completed the final step in that process by exiting our Kurdistan business. During the year, as part our Data Integration pillar, our Custom Research division has developed tracking studies using the YouGov Cube that provide a customised, scalable way of delivering research data and valuable insights to clients. These trackers minimise the need for proactive data collection required for each new Custom Research project while providing more connected and tailored data. This has resulted in the launch of several new products such as our NPS® tracking product, YouGov Recommend+, and our COVID-19 suite of products. Strategic focus ― Growing focus on delivering tailored research projects and brand trackers that utilise the data-rich YouGov Cube to provide valuable insights to our clients ― Greater collaboration to deliver projects that combine YouGov RealTime, Custom Research and YouGov Cube elements to produce customised deliverables, delivered using the Crunch platform, using leading-edge analytics and research methodologies ― Utilise our CenX to complement the local custom research teams, allowing the divisions to be more operationally efficient, delivering greater synergies, and produce a higher-quality output for our clients ― Increase exposure of Custom Research among our largest clients and build greater awareness around our research capabilities using our new global key account management structure Custom Research 54.3 60.2 58.7 60.0 64.6 22 20 20 15 13 6 1 / 5 1 0 2 7 1 / 6 1 0 2 8 1 / 7 1 0 2 9 1 / 8 1 0 2 0 2 / 9 1 0 2 Revenue £m Case study The Custom Research division plays a key role in YouGov’s work with a leader in the plant-based meat sector, providing sector and analytical expertise to inform research approaches, advanced questionnaire design, and results analyses. The Custom Research team acts as key experts in client discussions, leads new initiatives, and produces reporting based on YouGov RealTime and YouGov Profiles datasets. The relationship continues to grow, having recently led to a YouGov Profiles subscription in addition to their full scope of ongoing work. 1 Defined in the explanation of non-IFRS measures on page 59. Adjusted operating proﬁt margin1 % 37 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020 Section 172 Statement Our approach Under S172(1) of the Companies Act 2006 (“S172”), the Directors of YouGov plc (the “Company”) are obligated to act in the way they consider would be most likely to promote the success of the Company for the benefit of its shareholders as a whole. In doing so, the Directors must have regard (among other matters) to: a. the likely consequences of any decision in the long term; b. the interests of the Company’s employees; c. the need to foster the Company’s business relationships with suppliers, customers and others; d. the impact of the Company’s operations on the community and the environment; e. the desirability of the Company maintaining a reputation for high standards of business conduct; and f. the need to act fairly as between shareholders of the Company. YouGov’s governance framework is conducive to Board-level decisions being made with stakeholder interests, and the longer-term impact, in mind. On the following page are some examples of how the Board of Directors considered matters and reached decisions, demonstrating how they have had regard for S172 when discharging their duties this year. For more information on the groups we have identified as the Company’s key stakeholders and how we engage with them, see pages 40 to 43. Directors receive training on their duties to ensure their awareness of their responsibilities. Information is provided in Board papers which take into consideration the views of stakeholders (e.g. major investor input on reporting). Templated Board papers nudge the writers to consider stakeholder interests. 1. Board information Presentations to the Board by both internal and external subject matter experts, and external advisors. The Board is satisfied that information provided is of sufficient quality to aid their decision-making; seeking assurance if required. 2. Board strategic discussion The Board takes into consideration S172 factors in its strategic discussions, such as the long-term implication of decisions on the business and the impact on stakeholders. The Board’s decisions are communicated to wider stakeholders. 3. Board decision Actions are taken to implement the Board’s decisions. 38 YouGov Annual Report & Accounts 2020Design and implementation of new long-term incentive plan External assurance of internal controls Implementation of new client services structure Operational response to the COVID-19 pandemic Stakeholders Stakeholders Stakeholders Stakeholders Section 172 considerations Section 172 considerations Section 172 considerations Section 172 considerations Matter for discussion Matter for discussion Matter for discussion Matter for discussion The Board sought a suitable replacement long-term incentive plan for Executive Directors and key management, in advance of the expiry of the LTIP 2014. The Board identified a need for an external assurance review of key internal control areas by subject matter experts – in addition to the routine annual external audits. During the reporting year, the Board oversaw a restructure of the UK and US client-facing teams into three layers to improve the client onboarding and service experience. The COVID-19 pandemic posed unprecedented disruption to our business during the year – from closure of offices to tightened marketing budgets. How the Board considered S172 How the Board considered S172 How the Board considered S172 How the Board considered S172 LTIP 2019 was designed to promote long-term thinking by participants and achievement of long-term business targets. In designing the rules, the Board: ― engaged external remuneration The Board sought insight from stakeholders in the business to consider their views on the value of an assurance programme, areas to be targeted for review and, once underway, their views on the output of the assurance reports. consultants to advise on the appropriate structure of a plan consistent with the Company’s objectives and employee interests; ― consulted our major shareholders to ensure that their expectations were met by the new plan; ― considered the shareholder dilution impact; and ― considered and approved documentation to support the plan delivery including an operational guide for the Remuneration Committee and a guide for participants. The Board tasked management to create roadmaps to tackle the recommendations from the assurance reports. In scrutinising the roadmaps, the Audit and Risk Committee considered the long- term consequences of decisions made (e.g. investment in resources and technological solutions) and the strategic approach to the actions. The Audit & Risk Committee sought advice from subject matter experts on the proposed improvements, keeping in mind the desire to maintain a reputation for high standards of business conduct. The CEO undertook client satisfaction interviews with major clients during financial years 2018/19 and 2019/20. The output of these interviews was shared with and discussed by the whole Board. Led by the COO, Executive Management designed the Strategic Sales Plan which was approved by the full Board. In developing the new structure, and prior to communication with the wider workforce, Executive Management: ― engaged with senior and middle managers about the proposed changes; ― reported on the planned changes to the Board; and ― sought the Board’s insight into the plans during development. The Board considered the long- term impact of the decision for the business; short-term disruption outweighed by long-term benefits. The Board was key to determining the approach we took to our COVID-19 response, validating the work and recommendations of the YouGov COVID-19 Response Team (“CRT”) and enabling us to maintain high levels of business continuity. In assessing the information and recommendations provided by the CRT, the Board took into account the impact of the operational response on multiple stakeholder groups – employees, clients, suppliers and shareholders in particular. With the Company’s interim results announcement falling due at the time of the FRC’s moratorium on corporate reporting – applied due to pandemic-related market uncertainty – the Board took into consideration the regulator’s recommendation and shareholder interests in taking the decision to postpone the results by one week. Outcomes and actions Outcomes and actions Outcomes and actions Outcomes and actions ― Plan launched in November 2019, with participants scheduled to receive their first awards in October 2020, subject to satisfactory achievement of their personal performance objectives and approval by the Remuneration Committee. ― Prior to the grant of awards under the LTIP 2019, the latest shareholder dilution position will be considered by the Remuneration Committee. Key Panellists Employees Community Clients ― Board commitment to an ― Phased restructure ― Our business remained ongoing assurance programme of key control areas, by external assurance specialists. ― For more on our external assurance programme, see page 74. commenced during 2019/20 in UK and US. operational throughout global lockdowns; no staff furloughed. ― The CEO and COO continue to provide regular updates to the Board on progress. ― Board activities continued virtually throughout the lockdown period, utilising online solutions for Board papers and meetings to ensure a seamless transition. ― Return to Office Working Group established to manage the complex office reopening plans globally. the likely consequences of any decision in the long term the interests of the Company’s employees the impact of the Company’s operations on the community and the environment the desirability of the Company maintaining a reputation for high standards of business conduct Suppliers and partners the need to foster the Company’s business relationships with suppliers, customers and others Shareholders Media the need to act fairly between shareholders of the Company 39 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020 Our Stakeholders YouGov is committed to driving long-term sustainable performance for the benefit of our stakeholders. In this section, we present the groups we have identified as our key stakeholders, summarise what matters to them, and outline how we engage with them both at Board level and more widely. 0 2 0 2 s t n u o c c A & t r o p e R l a u n n A v o G u o Y 40 Panellists At over 11 million registered members, our proprietary global panel is our largest stakeholder group and is essential to our success. Engaged, diverse and opinionated panellists are key to our business. Ensuring effective engagement with our panel is central to what we do. What matters to them Security of their information We work hard to ensure that we provide clear and accessible information to panellists about how we use their personal data. Rewarding user experience We aim to provide a rewarding and compelling user experience for panellists, constantly seeking to optimise the benefit they receive for the effort they put in. How we use the information they share with us YouGov is committed to the ethical use of personal data, and we endeavour to provide clear and comprehensive information for panellists about what data we collect from them, and how we use it. How we engage at Board level At each meeting the Board receives a panel report on the health and representativeness of our panel. During the year, the Board received a presentation by the Global Panel Director on panel innovations. How we engage across YouGov Keeping employees informed It is important all staff understand the fundamentals of our panel. To increase engagement around the business, we share key panel statistics and have a dedicated section on Youniverse (our intranet). Employees as panellists We encourage our employees to become panellists so that they can fully appreciate the panellist experience. Ensuring a representative panel It is imperative that our global panel is representative of the markets we are operating in. We invest in technology to reach panellists who may not be open to a traditional approach. For more on our panellists, see page 46. Employees To keep innovating and developing at the rate necessary to attain our strategic objectives, we hire high-achieving, talented employees and in return they rely on us to provide good employer value. What matters to them Employer value The benefits which employees receive in return for the skills and experience which they bring to the business. Work environment Employees want to be safe, comfortable and secure in their workspace. How we engage at Board level Employee engagement reports and updates on relevant projects are presented to the Board. The Board travels away from our UK headquarters twice annually to meet employees in other offices. This year, our November meetings took place at our Copenhagen office. How we engage across YouGov Internal communications We leverage various platforms for internal communications, including Global Town Halls and our intranet, Youniverse. To enable virtual collaboration between colleagues, we provide tools such as Zoom and Office 365. Diversity & Inclusion Task Force The employee-led task force aims to identify a set of actions to make YouGov a more diverse and inclusive place to work. Read more on page 47. Pulse surveys In our monthly Pulse surveys we check in with employees on their wellbeing and mental health. Engagement Champions Our network of Engagement Champions are responsible for engaging their teams in Pulse surveys and working to improve employee engagement. Community We supply select data to the public free of charge as a public service, through our Public Data initiative, and we support industry initiatives which benefit the research community. What matters to them Free public data Providing free access to high-quality public data gives researchers access to a store of opinion research that would otherwise only be accessible to those who could afford it. Supporting industry initiatives As a key employer in the research and data analytics industry, our public support of initiatives to benefit those working in our industry is important. How we engage at Board level The Board developed the current strategy and determined that key strategic pillars of FYP2 would be a focus on public data and the ethical collection and use of data (for more on our strategic pillars, see page 16). How we engage across YouGov Public Data initiatives Through our Public Data initiatives, we make a wide range of information available for free to the public. This free data is delivered via our website and directly to certain organisations. See page 20 for more detail, including our in-depth YouGov COVID-19 Behaviour Tracker and YouGov COVID-19 Public Tracker. Sponsoring MRS Pride We have been delighted to once again sponsor the UK Market Research Society’s “MRS Pride” initiative in 2020. MRS Pride is designed to provide a platform for LGBTQ+ consumer insight and methodology best practice. Our sponsorship has supported events which aim to create a new space and community for LGBTQ+ research, insight and analytics professionals as well as educate allies. For more on our employees, see page 49. For more on our community engagement, see page 46. 41 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Our stakeholders continued Clients Our client base is predominantly focussed on marketing activities and includes some of the world’s most recognisable brands. Clients rely on our supply of high-quality, accurate data to enable intelligent decision- making and informed conversations. What matters to them Understanding their needs and meeting them It is important that we engage with clients to understand their needs. This enables us to target our innovations into areas of demand and remain competitive. Veracity and legality of the data we provide Our clients rely upon our data for decision-making and it is therefore imperative that we conduct our research diligently, ensuring an accurate product which has been obtained in an ethical way. How we engage at Board level Alongside regular client updates from Executive Management, the Board receives client presentations at the annual Board strategy meeting each year. Feedback from clients is on the agenda at each Board meeting, as part of the CEO’s report. The CEO regularly conducts interviews with major clients and reports learnings back to the Board. How we engage across YouGov Key account management We are educating the business about our client- centric approach so that we are all engaging with our clients in an improved and consistent manner. Product education We hold webinars for staff to learn about new products and how to pitch them to clients. For our clients, we offer webinars on how to get the most out of our tools, led by subject matter experts. Sharing commercial updates A regular feature of our Global Town Hall meetings is an update on client wins and projects, encouraging employees from all departments to understand the key clients for our business and how we are supporting them. Suppliers and partners We aim to work with organisations that match our values and share our ethical approach to business. Our supply chain plays a vital role in supporting our growth and enabling us to meet the needs of our clients and other stakeholders. What matters to them Clarity of terms We use formal contracts (including master services agreements) with suppliers that are appropriate for the type of service provided. Payment in a timely manner Prompt payment is always important, but particularly so during the challenging economic climate this year. Mutually beneficial relationships It is important for our suppliers to benefit from our relationship with them, as we will from them. We are delighted to have key partner relationships in some areas of the business, for example our YouGov Global Partnerships Programme partners (helping us to promote YouGov products and services in regions where we do not have our own presence) and our Panel Acquisition partners (working to grow our panel in targeted areas). How we engage at Board level The Board receives updates on supplier and partner relationships from the COO at each meeting. How we engage across YouGov Supplier Assessment Process This year we launched a Supplier Assessment Process, to improve due diligence checks and to provide a more efficient onboarding process for the suppliers themselves. For more information on our client offering, see page 52. For more information on our suppliers and partners, see page 47. 42 YouGov Annual Report & Accounts 2020Shareholders Our Executive Management engages with shareholders regularly throughout the year to ensure they are apprised of our strategic growth plans and financial results. Institutions make up the majority of YouGov’s shareholder base, accounting for around 60% of the shareholding at year-end. What matters to them Return on their investment and a business operating in a way that is consistent with their expectations. How we engage at Board level Our Board regularly engages with investors on matters such as financial performance and strategy. We hold investor roadshows in the UK and US each year (these have been held virtually in 2020). Our Annual General Meeting is an opportunity for shareholders to meet the Board to discuss the Annual Report & Accounts and other matters. During the year, meetings take place between investors and both the Non-Executive and Executive Directors on an ad hoc basis. How we engage across YouGov Investment in our investors During the year we invested in additional resource dedicated to investor relations, creating a new Investor Relations Manager role. Corporate website In 2019, we launched a new corporate website to provide streamlined access to all our published corporate data and additional resources for investors. Annual Report & Accounts Our Annual Report & Accounts is prepared each year to provide details to our shareholders on the performance of the business and operation of the Board and is a key document for investor engagement. Media Our research is a trusted resource regularly referenced by media outlets worldwide. During the year to 31 July 2020, among our global market research competitors, YouGov ranked first when it came to the volume of media mentions. In respect of individual countries, YouGov ranked first in the UK and Germany, and second in the US. What matters to them Access to accurate data Journalists regard YouGov as a trusted source of accurate data, enabling them to quote our research with confidence. Topical research Access to our large proprietary panel enables us to provide quick turnaround on topical research. How we engage at Board level The CEO provides updates to the Board meetings on media mentions and engagement. How we engage across YouGov Content Marketing team We have a Content Marketing team dedicated to creating and distributing quality insights based on YouGov data. We are known for our independent editorial stance. Key media partners The flagship programme of US television network Comedy Central, The Daily Show with Trevor Noah, has partnered with YouGov for the 2020 US Presidential Election to measure public attitudes with a hint of comedy. The collaboration provides in-depth research about attitudes among US voters and offers an accessible entry point for the US public to read important opinion data around the election. Keeping panellists informed Where a panellist participates in a survey which results in media coverage, where possible we will inform them so that they can see how their response contributed to a news article, for example. For more information on engagement with For more information on our media mentions shareholders, see page 70. this year, see pages 16 and 17. 43 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Environmental, Social and Governance Highlights ― YouGov’s core mission is to give people a voice. ― We are proactively keeping our ESG practices relevant and fit for purpose. in our strategic plan. Q&A Stephan Shakespeare, Chief ― Governance has a key role Executive Officer, talks to us about YouGov’s approach to environmental, governance and social factors (“ESG”) Q: What does good ESG practice look like at YouGov? A: Our commitment to ESG is core to what we do. We operate lawfully and ethically in all areas relevant to our business, including how we collect data from panellists, how we service our clients, and how we handle our employee data internally. We have a responsibility to protect the privacy of all our stakeholders, and to “get it right” – one of our Company Values – for them. We are proactively keeping our ESG practices relevant and fit for purpose, and we have a solid governance framework to support that. We also have anti-bribery and corruption policies in place, as well as a whistleblowing policy, in order to avoid breaches of the rules. Our environmental footprint is minimal because we’re working fully online, and we have minimal business travel. However we are keen on conducting accurate reporting and finding ways to reduce our environmental impact where we can. We are also committed to having a positive impact on society, by keeping our employees engaged and giving them opportunities to grow with the Company. 44 YouGov Annual Report & Accounts 2020 Q&A None of the above can be done without having a truly diverse workforce, in an inclusive workplace. We are very keen on attracting and retaining the best talent. And best talent also means a diverse pool of talent, with various backgrounds and perspectives to avoid all possible biases, which is key to what we do. We’re also keen to improve gender diversity and we’ve been reporting on our UK gender pay gap for three years. Our Diversity & Inclusion Task Force has also conducted a survey and a set of focus groups to canvas the opinions of our employees in order to identify a set of actions that will help us make YouGov more diverse and inclusive. Q: What role does governance play in YouGov’s strategic plan? A: Governance has a key role in our strategic plan. It allows us to safeguard all the valuable data that we get from panellists daily, through the governance frameworks that we have in place to protect it. We take our position as custodian of our panellists’ data very seriously. The importance of good governance underpins our reputation as a trusted player, and it is central to our business model. The trust of our panellists and clients is an asset that we need to protect and look after. YouGov Direct is a good example of good governance around ethical activation, in line with GDPR. We are fully dedicated to adopting good social ethics and the way to achieve that is to ensure governance frameworks and processes are in place and are regularly reviewed and updated to remain relevant and pertinent. An example of this has been supporting our employees with the setting up of an internal Diversity & Inclusion Task Force, as a way to give a voice to our workforce around how to make YouGov more diverse and inclusive, across everything that we do. This all said, the most effective approach to ESG is to focus on what you’re best at. We coincidentally launched our new intranet (Youniverse) while all our offices were closed due to lockdowns, offering a new avenue for engagement for our employees globally. The launch of the intranet was part of an increased effort to invest in internal communications, which also involved hiring a dedicated team to support leadership comms and internal comms overall. Q: What are YouGov’s ESG strengths? A: YouGov’s core mission is to give people a voice. One of the things that makes us unique as YouGov is that we invest hugely in public data. What it means is that we have websites (such as yougov.co.uk/topics) dedicated to making a huge amount of our data free – thousands of interviews per day are dedicated to this, to make sure everyone’s voice is heard and everyone has access to the best and most complete store of opinion research. Further, we give a lot of free polling to academia as well as some charities. We believe this is the best use of our resources for ESG. The YouGov COVID-19 Tracker that we launched in partnership with Imperial College London is a good example of projects where we supported academia and health organisations with what we do best, our research. We have very good examples of cases where our data has triggered positive changes in societies. A good example, which came from our team in Asia Pacific, is a survey we ran about rent discrimination, which resulted in a ministerial decision to issue an anti- discrimination law. This is exactly the type of work we can do for society, because it’s what we’re uniquely positioned to do, and what we’re best at. And we’ll continue investing in public data to strengthen our ESG impact. Q: How do you ensure that employee engagement is effective? A: This question is particularly pertinent in the full remote working environment that we’ve had to adopt since the COVID-19 pandemic. We have also been organising regular global virtual Town Halls, during which the executive team give updates to all employees and take questions during interactive Q&A sessions. We ran four consecutive monthly “Pulse” surveys with all employees during the pandemic to gauge their wellbeing and mental health, as well as the level of satisfaction with communications from the leadership and management. The survey results led to setting up a network of “Engagement Champions” from across the business, working closely with HR to ensure that there’s a two-way communication between employees on the one hand and HR and senior leaders on the other. We are scheduled to run a larger and more comprehensive annual engagement survey later in this calendar year, which should allow us to see if there has been progress in levels of engagement across the Company and across teams. Q: What is YouGov’s approach to diversity and inclusion? A: Our approach to diversity and inclusion is that it should be part of everything that we do. For panellists, we’re developing new ways to reach out to groups that are often under-represented in research, through the newly launched YouGov Chat feature, for example. We are also making sure that we’re representing ethnic minorities, to accurately reflect all communities within the panel. We’re making our language in research more inclusive, and our product and technology teams are looking into inclusive design to enable users with specific needs to access our panel and services. They are also taking action to ban using discriminatory language in technology. Y o u G o v A n n u a l R e p o r t & A c c o u n t s 2 0 2 0 45 Strategic report Governance report Financial statements Additional information Environmental, Social and Governance continued YouGov recognises the importance of ESG factors when measuring the sustainability and ethical impact of the Group. The Board sees ESG as key to a successful strategy for the business and the new positioning of our ESG report in the Strategic Report better reflects the importance of ESG to YouGov. In this report we explain how ESG factors run through the core of what we do, discussing each area in turn. Our community Enabling public discourse One of our key strategic pillars for FYP2 is the provision of accurate public data and we make a wide range of information available for free via our website (see page 16 for more detail on our strategic pillars). In addition, we provide certain polling services to academic institutions for free to support their work – utilising the same research methodology and expertise that we use for our paying clients. Sharing knowledge and insights To support the healthcare research community and public health bodies across the world, we have partnered with Imperial College London to gather global insights on people’s behaviours and opinions in response to COVID-19, with the data being freely available for public health researchers in the form of our in-depth YouGov COVID-19 Behaviour Tracker (coviddatahub.com). For more information on this initiative, see the case study on page 20. To provide aid directly to the World Health Organisation (“WHO”) pandemic response, YouGov partnered with Imperial College London, Oxford University, and the UN Sustainable Development Solutions Network to deliver free data, surveys and research reports to the WHO on a weekly basis on topics such as public health, compliance and health policy response in over 20 countries. Transparency We operate in an industry where data protection and the ethical treatment of data is of paramount importance. We are clear that we are an ethical handler of the data with which we are entrusted. We provide information on our approach to data privacy and security on our corporate website (corporate.yougov. com/compliance), explaining how we keep information safe. Social It is YouGov’s mission to make people’s opinions heard for the benefit of the wider community. We provide insights into what the world thinks. Our panel Protecting our panellists’ data Central to our business model is our proprietary global panel of over 11 million registered members, and the opinion data they entrust us with. Our Data Protection and Information Security teams work closely with a dedicated Panel team to ensure the safety of our panellist’s data. We pride ourselves on consent rates in excess of 90% for the collection and use of the “special categories” of data outlined in the EU General Data Protection Regulations, and work hard to ensure that we provide clear and accessible information to panellists about how we use their personal data. Quick and convenient reward Our industry-leading re-contact rates are testament to the strength of our proposition to panellists. Our Panel team works closely with our technology and data teams to design new features to enhance the panellist experience, using panellist feedback systematically to understand where the user experience can be improved. A focus this year has been on diversifying the reward options available to panellists and speeding up fulfilment through integrations with global partners. Ensuring a representative panel It is imperative that our global panel is representative of the markets in which we operate. We communicate with panellists in many languages. An area of focus for us is ensuring the diversity of panellists, including adapting our methods of panel engagement to reach new or previously under-represented groups. During the year we have invested in developing new technology, such as YouGov Chat (yougov.chat), to reach panellists who may not be open to the more traditional online survey approach. 46 YouGov Annual Report & Accounts 2020Our suppliers and our partners Our supply chain is vital to supporting our growth and enabling us to meet the needs of our business. When choosing suppliers, we work to ensure that they align with our values and share our approach to ethical business. Choosing our suppliers and partners During the year we undertook a major review of how we assess and onboard suppliers. As a result, we were pleased to launch our new Supplier Approval Process, which includes an assessment of suitability, a due diligence assessment, a legal review of the contract and financial onboarding. The due diligence assessment enables us to understand the supplier’s approach to compliance and governance – from privacy and data security to their approach to environmental management and sanctions compliance. Robust legal documentation Our Legal team reviews all key supplier contracts, ensuring a consistent approach with fair and reasonable terms for both parties. Timely payments During the year we reviewed our payment processes and made improvements. For example, our updated Purchase Order process ensures that costs are approved prior to submission of invoice so that any queries can be dealt with upfront. Human rights in our supply chain We have adopted a Modern Slavery Act Statement since 2018, which is published annually on our Corporate website (corporate.yougov.com/ modernslavery). Our suppliers are asked to confirm their approach to eliminating modern slavery in their supply chain as part of our Supplier Approval Process. We operate in a relatively low-risk industry from this perspective but we acknowledge that no industry is entirely without risk. Our culture and values We expect our staff to exercise high professional, ethical and moral standards – and we foster the culture to enable them to do so. Ours is a culture where operating quickly, efficiently and innovatively is valued, but cutting corners to achieve that is not. We take privacy and data security very seriously, and believe that everyone’s personal data should be handled responsibly regardless of where an individual resides. Diversity and inclusion Respect for diversity and inclusion is at the heart of all we do. In response to the Black Lives Matter social movement, employees at YouGov set up an internal Diversity & Inclusion (“D&I”) Task Force, consisting of members from across all regions and functions, including research, development, data science and corporate services. This initiative was highly welcomed by the workforce and Executive Management engages with it enthusiastically. The D&I Task Force is looking into ways of removing barriers to diversity not only within the workplace, but also within our panel, product and research methodologies. In the UK, we are pleased to be a Stonewall Diversity Champion and are committed to the Disability Confident scheme. We work to ensure that opportunities for training, career development and promotion are equal for all. Our values adopted in 2019 – be fast, be fearless, get it right, trust each other – reflect our culture. We work to be ahead of our competitors and be innovative but backed by the requirement to always get it right; to not sacrifice accuracy and ethics to achieve growth. Our governance framework provides employees with the support to raise concerns where they identify unethical behaviour. For more information on our governance framework see page 51. During the year, our corporate culture has been tested with staff away from our office spaces and working remotely for long periods of time. We look at how we approached some of those challenges in “Our people” overleaf. Our workforce’s ability to respond to the challenges posed by the pandemic, their resilience in the face of potential disruption, is testament to them and to our culture. As YouGov has adopted the QCA Corporate Governance Code, the Board is not required to formally consider the requirements of the FRC’s Corporate Governance Code on the assessment and monitoring of culture. However, we do take the following into consideration when assessing corporate culture: ― Employee engagement responses (see page 49) ― Whistleblowing notifications (see page 72) ― Health and safety performance (see page 49) ― Progress on diversity and inclusion (see below) ― Progress on reducing the gender pay gap (see page 49) ― Investment in learning and development (see page 49) ― Findings from audits (see page 51) 47 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Environmental, Social and Governance continued Workforce diversity1 Gender Senior leadership (Executive Management and their direct reports) Reports to senior leadership All employees Female Male 31% 69% Female Male Not speciﬁed 45% 54% 1% Female Male Not speciﬁed 43% 52% 5% Region Location diversity Age All employees United Kingdom Europe Americas MENA & India Asia Paciﬁc 33% 23% 21% 14% 9% 19 and under 20 – 29 30 – 39 40 – 49 50 – 59 60+ 1% 39% 38% 16% 5% 2% 1 Percentages based on a total of 1,146 employees as at 31 July 2020. 48 YouGov Annual Report & Accounts 2020 Our people YouGov is committed to providing an inclusive working environment, in which our employees can realise their potential free from discrimination or harassment. We endeavour to foster a diverse workforce, representative of the regions in which we operate. Listening and engaging In prior years’ employee engagement surveys, communication from management was identified as an area which needed improvement. We have invested in improvements, leading to: Global Town Halls Hosted by Executive Management and supported by guest presenters, Town Halls are all-staff meetings hosted from different global locations and streamed live. During the pandemic, these have continued virtually. Each Town Hall includes a section in which employees who have demonstrated our core values that month are amplified. Youniverse, our intranet During the year we launched a new global intranet, Youniverse. At time of writing we have over 1,100 users globally, representing 100% of our workforce. Articles are published daily to support Company initiatives (such as cyber security awareness) and to increase understanding of different teams and business areas (a regular “Team Spotlight” series). Pulse surveys We run an annual employee engagement survey, but during the year we have also launched monthly “Pulse surveys”. In each survey, we check in with our workforce on their wellbeing and mental health – which is particularly important when we are working remotely. The Pulse surveys also provide opportunity to ask employees their views on topical issues, which has included diversity and inclusion. Championing employee engagement Our network of Engagement Champions has been established by the Talent Development team. These employees, representative of all areas in the business, are responsible for engaging their teams in Pulse surveys, analysing the results of these surveys and working with their teams to improve the employee experience. See more about our employee engagement and our Board’s active engagement with employees on pages 41 and 93. Additionally, benefits such as flexible working opportunities, and long-term share incentive plans for key employees, help us to attract and retain talent. Health, safety and wellbeing 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. Activities this year included: ― establishing a Global Facilities function with oversight of health and safety management globally; ― collating our health and safety guidance on Youniverse to increase accessibility for our staff; ― in the UK, training a group of Mental Health First Aiders to support colleagues through mental health crises at work; and ― engaging an external Occupational Health resource to assist our employees with medical or other issues which impact their ability to work. This has been a year which has challenged our health and safety practices in unprecedented ways; you can read more about how we responded to the COVID-19 pandemic overleaf. Representation matters We support the rights of our employees to join trade unions and workers’ councils. Where workers’ bodies exist, we ensure that our processes involve them in any decision-making as appropriate. Reporting This year was the third year of our gender pay gap reporting in the UK. You can view the full report on our website (corporate.yougov.com/ genderpaygap). Our focus remains on closing the gender pay gap where it exists, not just in the UK but across the Group. Measures taken this year regarding improving the quality of our HR data to make informed decisions, launching our new D&I Task Force and reviewing our policies to ensure they are employee-friendly all contribute towards this objective. These measures also move us forward towards a point where we may be able to readily identify and report on other pay gap areas in the future. Investing in HR Our HR function has undergone reorganisation and investment during 2019/20 in order to meet the demands of the business and our intensive growth plans. Attracting, retaining and developing talent Our commitment to attracting, retaining and developing talent is reflected in the investment we have made in this area and the measures we have in place to ensure YouGov is an industry-leading, attractive and rewarding place to work. During the year, these measures led by our HR team have included: Measure Work undertaken Employer value proposition (“EVP”) Recruitment from within Graduate programme Learning and development framework Learning and development resources Reward function Defining our EVP so that we can communicate it to our people and prospective new joiners. Improving our Performance Management process in preparation for launching our new Talent Management framework. 70% of the graduates who completed the programme this year have taken permanent roles at YouGov. Held focus groups to identify good management skills and behaviours, and began work to refresh the framework. LinkedIn Learning launched during the year, enabling staff to complete self-directed e-learning. Since launch in April 2020, there have been 676 active users with over 1,365 training hours completed. A new Head of Reward role was created to manage reward activity and help shape the reward strategy. 49 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Environmental, Social and Governance continued Environmental, Social and Governance continued Our governance in action during the COVID-19 pandemic In early March 2020, the Group Head of Governance convened the first meeting of the YouGov COVID-19 Response Team (“CRT”), a group set up to monitor the changing environment and make executive decisions regarding continuity of business operations and staff safety. The CRT consists of the Executive Management plus senior leaders from Governance, HR, IT, Operations and Facilities. Initially meeting weekly, this group has: ― developed the business response to the pandemic and documented decisions taken; ― managed pandemic-related risks while offices remained open – implementing processes to self- declare illness or exposure to COVID-19 to enable track and trace within offices; ― communicating a business travel ban; ― implemented new staff absence recording specific to COVID-19 – related illness or caring responsibilities, to enable the business to identify areas where teams may be under-resourced due to absence; ― empowered local management to make office closure decisions in line with Government guidance; ― approved the Group Emergency Remote Working and COVID-19 policies to provide a new governance framework for handling office closures, remote working, returning to office and wellbeing; ― communicated with the business to keep staff informed; and ― established the Return to Office Working Group (“RTOWG”) to work through the detail of office reopening plans. Back to the office As a business we are fortunate that we had an established culture of remote and flexible working, which enabled us to switch seamlessly to remote working with the exception of some minor disruption to our CenX operations based in India and Romania. However, the prospect of reopening offices was far more complex given the new, and changing, regulations on social distancing and hygiene which differ across countries. The RTOWG consists of management from HR, Governance, Operations, IT, Facilities and Data Protection. Meeting regularly since August, this group created a set of guidelines and resources to help offices reopen to staff in a safe and secure way. Utilising the expertise from the different specialists in the group, it: ― created an Employee Return to Office Risk Assessment which has been rolled out globally; ― created a phased approach to office reopening taking into consideration social distancing measures; and ― worked with local management to prepare plans in compliance with the guidelines which were then presented to Executive Management for approval.. What happens next We continue to monitor developments, seeking to reopen our offices where appropriate while supporting staff who are working remotely. We are engaging closely with our workforce and adapting, as required, to their concerns alongside the latest Government guidance. 0 2 0 2 s t n u o c c A & t r o p e R l a u n n A v o G u o Y 50 50 Dedicated resource Executive Management is the decision- making body in respect of data privacy and security at YouGov. Our Group Data Protection Officer and Group Information Security Manager work within the Governance team to develop policy and training, advise the business on data security and privacy issues and raise awareness within the staff. External audit Our information security management system is subject to external audit annually by the British Standards Institute (“BSI”) as part of our ISO 27001 certification. In addition, our external auditors conduct an audit of IT controls. Actions raised from audits are tracked to completion and reportable to the Audit & Risk Committee. ISO 27001 YouGov has established, implemented and continues to maintain an information security management system that is certified to ISO 27001:2013 for client confidential information. The system defines our policies and processes for securing the information we hold and process. We continuously assess risk and improve the security of our systems and processes in order to maintain the confidentiality, integrity and availability of information. Our security processes include the provision of regular security training to all employees, reviews of security policies and security testing on our systems including penetration testing and external/third- party assessments. Robust risk management and internal controls The Board’s Audit & Risk Committee has oversight of risk management and internal controls at YouGov, including the implementation of the Group Risk Management Policy and Procedure. As part of our work to continuously improve our internal controls as the business grows, the Audit & Risk Committee oversaw an external assurance programme in 2020. You can read more about our risk management programme on page 60 and internal controls on page 62. Our data security and privacy framework The global data security and privacy landscape has changed considerably in recent years and continues to do so. GDPR is now the world’s most comprehensive data protection regulation, the CCPA has reignited the discussion around privacy rights in the US, and many other countries are creating or updating their legal frameworks to strengthen the rights that people have over their data. As a global data company and provider of research insights in more than 40 markets, we take privacy and data security very seriously, and believe that everyone’s personal data should be handled responsibly regardless of where an individual resides. We have therefore decided to incorporate the GDPR’s principles and framework as much as possible into our global operations, while complying with all other applicable privacy and security obligations in the markets in which we operate. While our responsibilities may originate from many laws, regulations and guidelines that apply to us, we believe that complying is more than a box-ticking exercise; it is an opportunity to create and reinforce trusted relationships with anyone who provides us with their personal data – from those who participate in our surveys, to our clients and to our employees. It is also an opportunity to enhance our reputation for accuracy and transparency. Governance Our governance framework The governance framework at YouGov is supported by our Governance team. You can read more about its activities in the Corporate Governance Report on pages 68 to 72. Leadership Executive Management is supported by a global leadership team of 25 who meet remotely on a regular basis. In January 2020, the whole team met in person in Dubai for a three-day conference sharing FYP2 departmental operational plans. New senior leadership roles were created this year to support the growing business in its drive to meet its targets, including: General Counsel (heading up our in-house Legal function); Deputy CFO (providing support to the CFO in his leadership of the Finance function); and Group HR Director (overseeing the Human Resources function). In addition to the Board Committees we have a number of governance and leadership committees, including the Information Security Committee and the Data Privacy Committee outlined overleaf. Measured policies We have a suite of policies and procedures that provide guidance on the standards to which we operate, implementing our governance framework. All policies, including those on data security and privacy, are subject to review on an annual basis, including formal Board approval for key compliance policies (for information see page 72. These reviews ensure that the policies remain fit for purpose and help to identify where changes need to be made to accommodate the growing business. We are a business with a strong entrepreneurial spirit, fast moving and innovative. It is therefore important that our governance policies complement the business and enable it to achieve its goals. 51 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Survey questions: Our surveys are designed to be highly accessible, and our product and technology teams consider ways in which we can make our surveys more accessible to people with specific needs (such as those with a visual impairment). Our researchers work with subject experts to improve our survey language to ensure it is inclusive, for example agreeing market-leading gender inclusive language. Data analysis and reporting: With most reporting, our data is carefully weighted to account for full population representation and to iron out any biases that may be present in the sampling. Panel recruitment, followed by sampling and weighting, are all vital to avoiding biases and to representing the market as accurately as possible. Ethical and legal data handling Our innovation into fully consented collection and use of data led to the development of YouGov Direct. Read more about this product on page 22. Industry body compliance We voluntarily comply with the codes of practice and standards of several market research industry bodies worldwide, including ESOMAR, Insights Association and the British Polling Council. Ethical customers It is Company policy not to work with customers who are not aligned with our ethical approach to business and our values. This includes, but is not limited to, businesses involved in the manufacture or trade of arms or operating in sanctioned countries. Environmental, Social and Governance continued Subject access requests Many privacy laws around the world give individuals rights in relation to the personal data held by organisations like YouGov. As a company that has such a close relationship with the individuals whose data we collect, such as panellists and our employees, we know that helping people to easily exercise their rights is an important way to enhance transparency and build trust, so we have clear processes for responding to such requests. The majority of requests received are from panellists and are handled by the Panel team who are able to respond well within the required timeframe thanks to bespoke technical solutions. Our client offer Core to our business is responsible innovation – incorporating privacy by design and mitigating algorithmic bias. YouGov is in the process of developing a framework for responsible innovation, led by the D&I Task Force. This includes, but is not limited to, identifying opportunities to mitigate biases in data collection processes. We have guidelines in place to ensure that our survey questions adhere to local laws and are culturally appropriate. We keep abreast of changes in the law and culture norms and our expert researchers support our clients with the design of regionally appropriate research. We aim to maintain independence in our research practices and only decline client work for legal or ethical reasons. Eliminating bias in data collection Steps which we take to eliminate bias in our product include: Panel/sample recruitment: We assess the composition of our panel against publicly available reference data and where we identify shortfalls or gaps, we devise marketing aimed specifically to attract under-represented groups. These measures are a daily process as we seek to both grow and improve the representative nature of the panel. Committees There are two committees with specific responsibility to consider and manage data security and privacy, with overlapping membership: ― Data Privacy Committee: Led by the Group Data Protection Officer, the committee consists of representatives from the Governance, Legal, IT Infrastructure, IT Security and Panel teams. In 2019/20, the Committee met ten times. ― Information Security Committee: Led by the Group Information Security Manager, the committee consists of the COO and representatives from the Governance, Data Protection IT Infrastructure and IT Security teams. In 2019/20, the Committee met 11 times. Raising awareness We hold a Data Protection & Security Awareness Month on the anniversary of the GDPR coming into force each May. This year we utilised email communications and Youniverse to raise awareness of important topics for our workforce including how to identify phishing attempts. Compulsory training We have a suite of compulsory data protection and security e-learning training. We have moved our e-learning modules to a new platform this year, which enables us to better track the completion by all staff (employees and contractors). In the year, 99% of staff required to do compulsory training have completed it. Identifying and responding to breaches YouGov has a Personal Data Breach Policy setting out the procedures for identifying and responding to personal data breaches. Identifying a potential personal data breach is the responsibility of all YouGov staff, who are given guidelines and regular training to ensure this topic is always front-of-mind. The YouGov Breach Response Team (“BRT”) is responsible for determining the nature of reported incidents and deciding the response. The BRT is a cross-functional group that assesses the risk any of incident, ensures YouGov complies with any notification obligations, investigates the root cause and recommends any mitigations or process improvements to reduce the risk of a repeat or similar incident. 52 YouGov Annual Report & Accounts 2020Energy and carbon action We are mindful of the environmental impact that our buildings and vehicle use have on the environment. As such, over the course of the last year, we have taken steps to meet our environmental responsibilities through: ― carrying out energy audits to comply with the requirements of the Energy Savings Opportunities Scheme (ESOS), through which we have identified several energy efficiency measures that are under review and will be implemented as practicable; ― improving our data collection processes in order to respond to the increasing regulatory requirements around our environmental performance; and ― choosing renewable energy: YouGov’s UK headquarters in London is now powered by 100% renewable electricity. 2019/20 results The methodology used to calculate Greenhouse Gas (“GHG”) emissions is in accordance with the requirements of the following standards: ― World Resources Institute (“WRI”) GHG Protocol (revised version); ― Defra’s Environmental Reporting Guidelines: Including Streamlined Energy and Carbon Reporting requirements (March 2019); and ― UK office emissions have been calculated using the Defra 2019 issue of the conversion factor repository. Following an operational control approach to defining our organisational boundary, our calculated GHG emissions from business activities fall within the reporting period of August 2019 to July 2020.1 Emissions and energy use Table 1: Energy and carbon disclosures for reporting year Scope 1 Scope 2 Scope 2 Scope 3 Emissions source Natural gas Electricity (location based) Electricity (market based)2 Electricity transmission and distribution Employee cars Rail Business flights Total (location based) Total (market based) Total energy usage (kWh)3 Normaliser tCO2e per FTE4 2019/20 tCO2e 1 87 26 7 5 1 70 170 110 362,854 0.53 1 Due to availability of data from 2019, Q4 data was used as a proxy for 2020 Q4. 2 Our scope 2 emissions calculated using location-based emissions factors is 87 tCO2e. In line with WRI best practice, our scope 2 market-based emissions for 2019/20 are 26 tCO2e, calculated using supplier specific emission factors. 3 Energy reporting includes kWh from scope 1, scope 2 and scope 3 employee cars only (as required by the SECR regulation). 4 Full time equivalent. Environmental Carbon footprint YouGov recognises that our global operations have an environmental impact and we are committed to monitoring and reducing our emissions year-on-year. We are also aware of our reporting obligations under The Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018. As such, this year we have upgraded our energy and carbon reporting to meet these new requirements and increase the transparency with which we communicate about our environmental impact to our stakeholders. 2019/20 environmental impact Carbon output 170 tCO2e Energy Travel 56% 44% This year we have calculated our environmental impact across scope 1, 2 and 3 (selected categories) emissions sources for the UK only. Our emissions on a location basis (using the UK grid emissions intensity) are 170 tCO2e. With 56% (95 tCO2e) of total emissions from energy and 44% (75 tCO2e) as a result of business travel. This equates to an emissions intensity of 0.5 tCO2e per employee, which we will monitor to track performance in our subsequent environmental disclosures. 53 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020 Chief Financial Officer’s Review Alex McIntosh Chief Financial Officer The Group achieved continued growth in the 12 months to 31 July 2020 whilst executing towards its current long-term strategic growth plan which ends 31 July 2023. The financial year continued to be a year of investment in key areas to support longer term growth. Total Group revenue in the period rose to £152.4m, compared to £136.5m in the 12 months to 31 July 2020. Growth was 13% on an underlying1 basis since the prior period (but 12% in reported terms due to the planned closure of a large project in the Middle East offset by the depreciation of UK Sterling against the US Dollar and additional revenue generated by acquisitions in the period and prior period). Adjusted operating margins and organic growth In line with our stated strategy of a higher proportion of sales coming from higher margin products and services, gross margins increased by 3% points. Adjusted operating margins2 increased to 14.3% despite increased investment in staff costs and increased amortisation from technology and panel investments. Group operating costs (excluding separately reported items) of £107.2m (2019: £93.8m) increased by 14% in reported terms, and 14% in constant currency terms. Group adjusted operating profit2 (before separately reported items) increased to £21.8m (18% growth in the period) with strong continued growth in Data Products. The statutory operating profit, after charging other separately reported items amounting to £6.6m (2019: £1.5m credit) relating to acquisition costs £4.5m and an impairment charge relating to our Nordic business of £2.1m, decreased to £15.2m (2019: £20.0m). 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 Our syndicated data products include YouGov BrandIndex, YouGov Profiles and YouGov SportsIndex. YouGov Plan & Track (the combined BrandIndex and Profiles proposition) is available in 24 countries (2019: 21). BrandIndex alone 54 is available in 42 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 24% (21% growth in underlying business1) in the period. The adjusted operating profit2 from Data Products increased by 26% to £18.0m and the operating margin increased by 70 basis points to 35.0%. The improving margin reflects the operational leverage of Data Products which benefit from technology for data collection and product delivery as well as our proprietary data. Geographically, the US remains the largest Data Products market and grew by 26% in the period (23% from the underlying business1). The UK, Mainland Europe and Asia Pacific also contributed strong revenue growth of 21%, 16% and 22% respectively. Data Services Our Data Services division consists of our fast-turnaround research services, including our market-leading YouGov Omnibus (now known as YouGov RealTime in the UK and US). In the year, revenue from Data Services increased by 2% (4% in underlying terms1 after adjusting for acquisitions, foreign exchange and reallocated revenue from the Custom Research division) to £37.8m. The focus on the US market and further territorial expansion has helped the division expand the revenue base beyond the core UK market. This revenue growth was offset by an increase in allocations of central costs which contributed to a decrease of 6% in the Data Services operating profit to £7.0m and the operating margin declined from 20.0% to 18.4%. The division’s operating margin was also impacted by the full-year effect of the planned transferring of lower margin project work from the Custom Research division in the Nordics in FY19. Overall Data Services revenue growth included an 8% increase in reported revenue in the US (5% increase in underlying terms1), and a 9% decrease in Asia Pacific due to non-recurring election work (4% decrease in underlying terms1). Mainland Europe also grew by 3%. In the UK, where YouGov Omnibus is the market leader, revenue grew by 7%. YouGov Annual Report & Accounts 2020 Custom Research Our Custom Research division includes tailored research projects and tracking studies. The performance of Custom Research was impacted by the expected closure of operations in Kurdistan resulting in a £2.1m (30%) reduction in revenue in the Middle East. In the UK, revenue increased by 15% to £22.2m and revenue in the US also increased by 11% (9% increase in underlying terms1) to £33.0m. During the period, the business revenue grew by 8% in reported terms and by 12% in underlying1 terms to £64.6m. However, the adjusted operating profit2 decreased by 4% to £12.6m and the operating margin declined by 240 basis points to 19.5%. This was largely due to the closure of the Kurdistan business and the increase in central cost allocations. 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 2020 £m Year to 31 July 2019 £m Revenue growth % 51.3 37.8 89.1 64.6 (1.3) 152.4 41.5 37.2 78.7 60.0 (2.2) 136.5 24% 2% 13% 8% – 12% Underlying business1 revenue change % 21% 4% 13% 12% – 13% Year to 31 July 2020 £m Year to 31 July 2019 (restated)3 £m Operating profit growth % Year to 31 July 2020 Year to 31 July 2019 Operating margin % 18.0 7.0 25.0 12.6 (15.8) 21.8 14.2 7.5 21.7 13.1 (16.3) 18.5 26% (6%) 15% (4%) (3%) 18% 35.0% 18.4% 28.0% 19.5% – 14.3% Performance by geography YouGov’s geographic footprint spans the UK, Mainland Europe, the Americas, Asia Pacific and the Middle East. Revenue UK Americas Mainland Europe Middle East Asia Pacific Intra-Group revenues Group Adjusted operating profit1 UK Americas Mainland Europe Middle East Asia Pacific Central costs Group Year to 31 July 2020 £m Year to 31 July 2019 £m Revenue growth % 47.2 64.8 24.3 8.8 12.5 (5.2) 152.4 41.2 56.4 23.9 10.5 11.3 (6.8) 136.5 15% 17% 2% (17%) 10% – 12% Operating margin % Year to 31 July 2020 £m Year to 31 July 2019 (restated)3 £m Operating profit growth % Year to 31 July 2020 Year to 31 July 2019 15.4 19.0 2.2 1.9 0.3 (17.0) 21.8 11.7 16.8 2.9 3.3 0.2 (16.4) 18.5 32% 13% (24%) (42%) 50% 4% 18% 32.6% 29.3% 9.1% 21.9% 2.2% – 14.3% 28.5% 29.8% 12.3% 30.9% 1.6% – 13.5% 55 34.3% 20.0% 27.6% 21.9% – 13.5% Underlying business1 revenue change % 15% 13% 3% 20% 11% – 13% Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Chief Financial Officer’s Review continued 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 2020, the total number of registered panellists had increased to 11.5 million, compared to 8.4 million at 31 July 2019, as set out in the table below. During the year, the Group invested in expanding our geographic capability to Austria, Brazil, Switzerland and Turkey. Region UK Americas Mainland Europe Middle East Asia Pacific Total Panel size at 31 July 2020 millions Panel size at 31 July 2019 millions 1.83 4.21 1.92 1.58 1.92 11.46 1.63 3.17 1.21 1.06 1.30 8.37 Change % 12% 33% 59% 48% 48% 37% Group financial performance Amortisation of intangible assets In the 12 months to 31 July 2020 amortisation charges for intangible assets of £10.8m were £2.0m higher than the previous year. Amortisation of the consumer panel increased by £1.0m to £4.2m reflecting the additional investment made to grow the panel in the past three years. Amortisation of software increased by £1.0m to £6.0m. £4.9m (2019: £4.6m) of the total software development charge related to assets created through the Group’s own internal development activities, £0.3m (2019: £0.3m) related to separately acquired assets and £0.9m (2019: £0.1m) was for amortisation on assets acquired through business combinations. Separately reported items Goodwill impairment Restructuring costs Acquisition-related costs Fair-value movements Total separately reported items Year to 31 July 2020 £m Year to 31 July 2019 £m 2.1 – 4.5 – 6.6 – 0.2 0.4 (2.1) (1.5) Goodwill impairment in the year is in respect of the Nordic business. Acquisition-related costs in the year comprise: £3.6m of contingent consideration treated as staff costs in respect of the acquisitions of Galaxy Research Pty Ltd, SMG Insights Limited, InConversation Media Limited and Portent.io Limited, a £0.2m increase in contingent consideration payable in respect of the acquisitions of SMG Insight Limited and Portent.io Limited and a £0.7m reduction in the fair value of the acquired SMG Insight Limited net assets. Restructuring costs in the prior 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 prior year comprise: £2.8m 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 £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 prior 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. 56 YouGov Annual Report & Accounts 2020Analysis of operating profit and earnings per share Adjusted profit before tax2 of £25.7m was an increase of £5.1m (25%) on the comparable result of £20.6m for the 12 months to 31 July 2019. The adjusted tax rate2 reduced to 24% from 26% in the prior year. Statutory profit before tax of £15.2m was reported compared to £19.4m in the year ended 31 July 2019, a decrease of 22%. During the period adjusted earnings per share2 grew by 21% from 15.0p to 18.1p and statutory earnings per share decreased by 36% from 14.1p to 9.0p. Adjusted operating profit2 Share-based payments Social taxes payable on 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 2020 £m 31 July 2019 (restated)3 £m 21.8 2.8 0.9 0.1 – – 25.7 (6.5) 19.1 18.1p 18.5 2.4 0.2 0.2 (0.6) (0.1) 20.6 (5.4) 15.2 15.0p Cash flow, capital expenditure and technology investment The Group generated £38.7m (2019: £38.4m) in cash from operations (before paying interest and tax) including a £0.2m (2019: £6.0m) net working capital inflow; the cash conversion rate (percentage of adjusted EBITDA2 converted to cash) decreased from 121% to 104% of adjusted EBITDA2. The Group invested £8.0m (2019: £4.8m) in the continuing development of our technology platform and increased the investment in panel recruitment to £8.9m (2019: £4.0m) for the year to support continued global expansion. The geographic footprint of our panel was broadened as new panels were established in Austria, Brazil, Switzerland and Turkey and investments were made to further strengthen our panels in Australia, Canada, India, Italy, Mexico, Poland, Spain and Taiwan. Our investment in technology continued across three main areas: websites and mobile applications £1.1m, survey systems £3.8m, and £3.1m on our Crunch data analytics tool. £0.7m (2019: £0.7m) was also invested on separately-acquired software tools. In addition £1.1m (2019: £2.7m) was spent on the purchase of property, plant and equipment, resulting in a total investment in fixed assets of £18.7m (2019: £12.2m). Total expenditure on intangible assets and property, plant and equipment is shown below: Internally generated software Panel recruitment Other intangible assets Total expenditure on intangible assets Purchase of property, plant and equipment Total capital expenditure 31 July 2020 £m 31 July 2019 £m 8.0 8.9 0.7 17.6 1.1 18.7 4.8 4.0 0.7 9.5 2.7 12.2 Other cash outflows included £7.5m (2019: £4.5m) in settlement of deferred consideration amounts due in respect of the acquisitions of SMG Insight and Galaxy Research and taxation payments of £3.1m (2019: £4.5m). Net expenditure on financing activities of £9.7m (2019: 9.7m) included the dividend payment of £4.3m (2019: £3.2m), the purchase of treasury shares for £2.4m (2019: £3.7m) and lease payments of £3.1m (2019: £2.8m). Net cash balances at the year-end decreased by £2.6m to £35.3m. Net cash outflow in the year was £0.3m (2019: £5.2m inflow) and currency fluctuations in the year resulted in an exchange loss of £2.4m (2019: £2.1m gain). 57 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Chief Financial Officer’s Review continued Currency The Group’s results were affected by the net depreciation of UK Sterling as its average exchange rate was 2% lower against the US Dollar in this period than in the 12 months to 31 July 2019. Movement against the Euro was effectively flat for the period. The net impact of foreign exchange on the Group’s adjusted operating profit growth2 was an increase of £0.3m compared to calculation in constant currency terms. Balance sheet As at 31 July 2020, total shareholder’s funds increased from £108.0m to £110.0m. Net assets increased from £107.4m to £109.3m, with a minority interest of £0.7m accounting for the difference. Net current assets decreased from £21.2m to £17.4m. Current assets decreased by £2.3m to £70.3m, mainly due to a £2.6m reduction in cash balances, with debtor days increasing from 47 to 48. Current liabilities increased by £1.4m to £52.8m, mainly due to an increase in provisions by £1.8m and tax liabilities by £0.9m offset by a £1.6m reduction in trade and other payables, with creditor days decreasing from 24 days to 19 days at 31 July 2020. Non-current liabilities decreased by £6.1m to £16.2m with a reduction of £4.3m of contingent consideration payable in respect of acquisitions. Proposed dividend The Board is recommending the payment of a final dividend of 5.0 pence per share for the year ended 31 July 2020. If shareholders approve this dividend at the AGM (scheduled for 10 December 2020), it will be paid on Monday 14 December 2020 to all shareholders who were on the Register of Members at close of business on Friday 4 December 2020. Alex McIntosh Chief Financial Officer 15 October 2020 1 Defined as growth in business excluding impact of current and prior period acquisitions and business closures, and movement in exchange rates. 2 Defined in the explanation of non-IFRS measures on the facing page. 3 Prior year comparatives have been restated on the adoption of IFRS 16. 58 YouGov Annual Report & Accounts 2020Explanation of non-IFRS measures Financial measure How we define 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 Adjusted operating profit Operating profit excluding separately reported items Adjusted operating profit margin Adjusted operating profit expressed as a percentage of revenue Adjusted EBITDA Adjusted operating profit before depreciation and amortisation Adjusted profit before tax Adjusted taxation Adjusted tax rate Profit before tax before share-based payment charges, social taxes on share based payments, imputed interest and separately reported items Taxation due on the adjusted profit before tax, thus excluding the tax effect of amortisation and exceptional items Adjusted taxation expressed as a percentage of adjusted profit before tax Adjusted profit after tax Adjusted profit before tax less adjusted taxation Adjusted profit after tax attributable to owners of the parent Adjusted profit after tax less profit attributable to non-controlling interests Adjusted earnings per share 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 Current year revenue change compared to prior year revenue in local currency translated at the current year average exchange rates Cash conversion The ratio of cash generated from operations to adjusted operating profit Why we use it Provides a more comparable basis to assess the year-to- year operational business performance Provides a more comparable basis to assess the underlying tax rate Facilitates performance evaluation, individually and relative to other companies Shows the underlying revenue change by eliminating the impact of foreign exchange rate movements Indicates the extent to which the business generates cash from adjusted operating profits Reconciliation of non-IFRS measures Adjusted operating profit1 reconciliation Statutory operating profit Separately reported items Adjusted operating profit Adjusted EBITDA1 reconciliation Adjusted operating profit Depreciation Amortisation Adjusted EBITDA 1 Defined in the explanation of non-IFRS measures above. Year to 31 July 2020 £m Year to 31 July 2019 £m 15.2 6.6 21.8 20.0 (1.5) 18.5 Year to 31 July 2020 £m Year to 31 July 2019 £m 21.8 4.5 10.8 37.1 18.5 4.4 8.8 31.7 Change % (24%) N/A 18% Change % 18% 2% 22% 17% 59 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Principal Risks and Uncertainties Principal risks Our approach to risk management We believe that the understanding and effective management of risk are key to the long-term success of the Company. Over the past three years our risk management system has matured, developing over time to better serve the needs of a fast-growing business. Our Group Risk Management Policy and Procedure (the “Risk Policy”) was reviewed during the year. The Risk Policy enables us to: ― foster a high standard of accountability at all levels of the business; ― enable effective decision-making through understanding of risk exposures; and ― safeguard our assets. We acknowledge that management of risks is rarely static – building a management system that remains appropriate and embedding risk management awareness across all business operations is an ongoing process. We expect we will continually work to improve our processes in coming years. Oversight The Audit & Risk Committee (the “Committee”), led by its Chair, has primary responsibility for oversight and scrutiny of risk management and reports to the Board on a regular basis. The Committee’s Terms of Reference reflect the focus on risk management. The output from the Group Risk Management Policy and Procedure in 2019/20 has fed into the Board’s identification of the principal risks and uncertainties facing the Company at 31 July 2020. The Committee monitors the mitigating actions and controls put in place by risk owners (the relevant senior leader). For more information on the work on the Committee, see page 74. 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 prospects of the Company. While the risk categories have not materially changed since last reported, the risk factors may have evolved, and the categorisation may have changed. In determining the principal risks, the Committee assesses 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. When viewing the principal risks, note: ― while the risks have been categorised, some controls may cross categories; ― some elements of risks may appear in more than one category; and ― principal risks are presented in alphabetical order by category, not by risk score. The Committee has determined that this is the most appropriate presentation of the principal risks. 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 Company. COVID-19 and the principal risks Throughout the risk review, we have taken the impact of COVID-19 into consideration. We acknowledge that COVID-19 and the resulting lockdowns globally have created opportunity (e.g. the COVID-19 products) as well as disruption (e.g. managing business response and office closures). In assessing the principal risks, we have taken into consideration the Financial Reporting Council Lab’s report on going concern and risk reporting considering uncertainty created by COVID-19. We have determined that the principal risk posed by COVID-19 was interruption to business as usual. The business has demonstrated its resilience and ability to continue to operate effectively, despite closure of all our offices. We have continued to operate efficiently throughout lockdowns and have had adequate resource to manage safe office reopening. For more information on our response to COVID-19, see pages 39 and 50. Risks posed by the COVID-19 pandemic and resulting lockdowns are new risk factors within the principal risks, and we have highlighted where these have been identified. We do not believe that the risks posed by the pandemic to our business equate a principal risk of their own. Management and the Audit & Risk Committee will keep the risks posed by COVID-19 under review. 60 YouGov Annual Report & Accounts 2020Our summary of the principal risks and uncertainties facing the business at 31 July 2020 Risk & status Description Mitigation Competition Cyber Failure to compete with our competitors affects our ability to meet our strategy due to: ― loss of business to competitors (e.g. copycat products, inadequate marketing, inadequate key account management); ― becoming outdated (e.g. failure to keep up with developments in technology such as blockchain and artificial intelligence or an inability to move agilely to meet client demands); and/or ― penalties for anti-competitive practices. Risks faced from cyber threats are broad and, in many cases, not exclusively targeted at YouGov. For the purpose of the principal risks, the key risk areas relevant to the Company have been identified as: ― inadequacy of IT infrastructure to support the business, including an inability to restore business promptly after an outage; ― misuse of our information systems; and ― IT systems failure impacts upon business operations. We differentiate ourselves from our competitors: the size of our panel and the wealth of historic data are key assets which are difficult for competitors to replicate. We are focused on innovation, to keep our products relevant and at the cutting edge of our industry and technology. Our Executive Management monitors market trends, new product developments and services. Advice on competition law provided by General Counsel or external legal advisors where required. Company has Business Continuity and Disaster Recovery plans in place. There is robust budget planning in place for IT resources, involving key stakeholders from across the business. Breach Response Policy and dedicated team (including Global Head of IT, Global Panel Director, Group Head of Governance, Group Data Protection Officer and Group Information Security Manager) respond to any breaches. Information Security Committee meets regularly to oversee projects and actions arising around the business, with participation from the COO, Senior Management and Governance team. Intrusion detection systems in place and regular penetration testing. IT security practices are externally validated and since 2018/19 we have held ISO 27001 certification in respect of our information management system for client confidential information. No change Increased risk Decreased risk 61 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Our summary of the principal risks and uncertainties facing the business at 31 July 2020 continued Risk & status Description Mitigation Data Protection Occurrence of a data breach incident due to deliberate intrusion, accidental data leak, or deliberate de-anonymisation of data. Investment in technology and resource to manage these risks, led by the Group Data Protection Officer and Group Information Security Manager. Non-compliance with data protection or privacy legislation, such as EU GDPR, leading to significant penalties and/or reputation damage. Geopolitical Largest geopolitical risk facing the business now is the consequence of the UK leaving the European Union (“Brexit”) causing uncertainty for the economic outlook for businesses operating in the UK. Internal controls Failure of our internal controls to: ― prevent unauthorised access to our systems and/or infrastructure (e.g. by ex-employees, ex- contractors); ― prevent unauthorised use of assets (such as intellectual property); and ― integrate newly acquired companies into YouGov systems and infrastructure. Panel Failure to maintain a quality, engaged panel which is diverse and representative. 62 Management focus on compliance across the Group’s data handling activities. The Board receives updates at each meeting. Data Privacy Committee and Information Security Committee meet regularly throughout the year, with participation from the COO and senior leadership stakeholders. Privacy and security training are compulsory for all employees across the Group, and completion is monitored. Policies on privacy and security are reviewed and updated regularly. Dedicated breach response team in place to respond to any breaches. 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. Intercompany data sharing agreement in place for permitting the sharing of data across borders within the YouGov group of companies. The US remains Group’s largest region in terms of revenue and profit. Therefore, the Group expects to be largely unaffected by Brexit. The Audit & Risk Committee is apprised of activities to review and improve internal controls in its meetings. Cross-functional teams work together to manage systems access in the case of employees and contractors. IT security team is responsible for prevention of access by unknown or unauthorised third parties. Our security systems are externally validated, and we work to continually improve systems as risks evolve. We hold ISO 27001 certification for our information security management system (see pages 51 and 76), a globally recognised standard. Our internal controls are subject to external assurance review. Global Panel Director leads a team dedicated to maintaining the YouGov Global Panel. The Board receives 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. YouGov Annual Report & Accounts 2020 Risk & status Description Mitigation Regulatory Reputation Strategy 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. Group activities are subject to scrutiny by the Board, Committees and external auditors. Management is supported by a team of qualified professionals, external advisors and in-house legal team. Executive Directors have received bespoke training on their responsibilities as directors of overseas subsidiaries. In-house legal function led by General Counsel. Failure to protect the Group’s reputation leading to a loss of confidence by our customer base; affects 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 the market research and data analytics industry, reputational damage could be difficult to recover from. The key risks related to strategy are: Failure to achieve projected growth in line with our annual budget and/or not meeting 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 resulting in YouGov’s offering becoming outdated. PR advisors actively monitor the corporate press. Executive Management receives media training. Nominated staff to manage corporate social media relations and nominated spokespersons for media interaction. Investment in both internal and external communications professionals in- house during the year. Panel team actively monitors panellist feedback by email and surveys. Marketing actively monitors social media feeds and manages complaints. The Board regularly assesses progress against the current long-term strategic plan. Long-term incentive plans link Senior Management remuneration to profit growth (see Remuneration Report on page 77). 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 (see Our Stakeholders on page 40). Regular review of Company performance against market expectations by the Board. Management meets regularly with the Company’s broker to review market expectations and messaging. IR Manager in post during FY20 to handle engagement with investors. Business has responded robustly to COVID-19 and is reporting no material impact at 31 July 2020. For detailed discussion on the financial risks facing the Group, see Note 21 on page 139. The Strategic Report is approved by the Board and signed on its behalf by: Stephan Shakespeare Chief Executive Officer 15 October 2020 No change Increased risk Decreased risk 63 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Chair’s Introduction and Corporate Governance Statement Roger Parry CBE Chair In a year that has presented unforeseen challenges from the COVID-19 pandemic, our governance framework has responded robustly and with agility. 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 2020. The Board is committed to delivering high standards of corporate governance – commensurate with the size, stage of growth and nature of the YouGov Group’s (the “Group”) activities – to its shareholders and other stakeholders including employees, panellists, customers, suppliers and the wider community. Corporate governance at YouGov YouGov plc (the “Company”) has adopted the QCA Corporate Governance Code as its benchmark for good corporate governance practice since 2014. The Board has formally adopted the most recent edition of the 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 (the “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. In addition to its economic impact, the COVID-19 pandemic has presented unique governance challenges. In early 2020, we decided to close all offices and to work remotely. By the end of the reporting period, 12 offices had reopened at least partially and we are working towards reopening the remaining offices as and when it is safe to do so. From March 2020 until the end of the reporting year, all Board and Committee meetings were conducted fully virtually. We value the importance of informal conversations, so we have taken steps to ensure that informal conversations still occurred. 64 YouGov Annual Report & Accounts 2020 Notice of AGM ― Our 2020 Annual General Meeting (“AGM”) will be held on 10 December 2020. ― Due to continued social distancing restrictions, our AGM will be closed this year. ― You can learn more in our Notice of AGM on page 166. Corporate governance highlights from the year include the following: ― Building and launching a new onboarding process for suppliers, including enhanced due diligence checks (see page 47). ― Responding to the COVID-19 pandemic, ensuring continuity of our governance framework throughout lockdowns (see pages 39 and 50). ― External assurance reviews of key processes (see page 71). Our dedicated Governance team, led by the Company Secretary, supports the Board of Directors to ensure that high standards of corporate governance are maintained. Board composition As reported last year, Ben Elliot and Nick Jones retired from the Board on 13 September 2019 and 11 December 2019 respectively. Following Nick’s retirement, Rosemary Leith became Senior Independent Director. The Board consists of three Executive Directors and four Non-Executive Directors. The Non-Executive Directors have a wide range of commercial and academic experience. I believe the performance of the business over recent years is evidence that the Board is well balanced and effective. There are no immediate plans to make changes to the Board composition. In 2020, the Company completed its first 20 years of corporate life. In line with our ambitious current five-year plan to 2023, we expect to grow substantially and become even more international. To prepare for this, we will be engaging external consultants to build on our existing human resources plans to ensure we have a robust process in place to proactively manage succession and skill development at Board and Senior Management levels. For more information on the Nomination Committee, see page 73. Corporate culture When YouGov was established 20 years ago, it was a pioneer in online market research. A key facet of our corporate culture is that we retain the entrepreneurial spirit which was formed in those early days, but now with the corporate structure appropriate to a company of our size and ambition. Our values – be fast, be fearless, get it right and trust each other – permeate throughout our activities. Our employees represent these values. As befitting a business in our industry, all 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 continues to be an area of focus for the Board. This year we have made significant investment in the employee experience – taking time to listen to our employees and understand how we can improve. You can read more about how we engaged with employees during the year on page 41. Stakeholder engagement In this year’s Annual Report we are pleased to have a dedicated section on stakeholder engagement on pages 40 to 43. YouGov now employs over 1,100 employees globally. On behalf of the Board, and shareholders, I would like to thank all our employees for their dedication to YouGov and their contribution to our 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 15 October 2020 65 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Board of Directors Roger Parry CBE N Non-Executive Chair 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. Stephan Shakespeare Chief Executive Officer FoundedYouGovinMarch2000 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 to 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 Chief Financial Officer Appointed Executive Director in December 2017 Alex has been with YouGov since 2007. He initially joined YouGov as Corporate Finance Manager focusing 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. 66 Sundip Chahal Chief Operating Officer Appointed Executive Director in December 2017 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. YouGov Annual Report & Accounts 2020 Ashley Martin A R N Non-Executive Director Appointed Non-Executive Director in September2018 Ashley is 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. Andrea Newman R N Non-Executive Director Appointed Non-Executive Director in December2017 Andrea is the Global Head of Brand at HSBC Holdings plc. In this role, Andrea is responsible for all marketing, including the management and marketing of the HSBC brand globally. She has been at HSBC for 22 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. Rosemary Leith R A N Non-Executive Director and Senior Independent Director Appointed Non-Executive Director in February2015 Rosemary is Non-Executive Director of HSBC UK Bank plc and a 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. Directors who retired during the year Ben Elliot Non-Executive Director (August 2010 to September 2019) Audit & Risk Committee member (January 2019 to September 2019) Nomination Committee member (August 2010 to September 2019) Nick Jones Non-Executive Director (June 2009 to December 2019) Senior Independent Director (May 2015 to December 2019) Nomination Committee member (June 2009 to December 2019) Key Chair of Committee A Audit & Risk Committee member R N Remuneration Committee member Nomination Committee member 67 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020 Corporate Governance Report Boardcompositionmatrix(asat31July2020)1 Board composition 43% 57% Executive Independent Non-Executive Directors Board tenure 0 – 2 years 3 – 5 years 3 – 5 years 42% 29% 29% Board gender diversity Female Male 29% 71% Board ethnicity diversity 86% White English/ Welsh/Scottish/ Northern Irish/ British Indian 14% 1 Percentages based on a Board comprising seven Directors. 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 Board composition At 31 July 2020, the Board consisted of three Executive Directors and four Non-Executive Directors, including a Non-Executive Chair. There were changes to the composition of the Board during the year. Ben Elliot retired from the Board on 13 September 2019 following nine years’ tenure as a Non-Executive Director and Nick Jones retired as Senior Independent Director on 11 December 2019. Nick Jones exceeded nine years’ tenure in 2018 and stayed on the Board to enable a smooth transition of his roles as Senior Independent Director and Chair of the Audit & Risk Committee. Rosemary Leith was appointed as Senior Independent Director on 11 December 2019. 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 66 and 67. 68 Directors’ independence The Board periodically reviews its composition and succession planning framework to ensure that 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: ― their other commitments; ― their tenure; and ― the personal qualities they demonstrate in the boardroom. 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, is considered by the Board to be independent. This is reviewed annually by the Board. Principle 5 of the QCA Code 2018 confirms that independence is a Board judgement. Roger Parry reached 13 years’ tenure on the Board in 2020. He was deemed to be independent upon appointment. 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 remained independent in character and judgement in his roles prior to his retirement on 11 December 2019. For more information on succession planning, see the report of the Nomination Committee on page 73. Directors’conflictsofinterest 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. YouGov Annual Report & Accounts 2020 The Company’s 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. All Directors are required to submit themselves for re-election at each AGM. This is a requirement of the Articles of Association adopted on 11 December 2019. The in-house effectiveness evaluation was facilitated by the Corporate Secretariat in compliance with the Board effectiveness evaluation process approved by the Board in 2018, which is illustrated below. Board Effectiveness Evaluation Each year, the Board commissions an evaluation of its effectiveness and considers whether that evaluation should be internally or externally facilitated. In 2019/20, it was determined that an in-house effectiveness evaluation was appropriate. Anonymised results from the evaluation were presented to the full Board and an action plan determined. No areas of material concern were identified and it was confirmed that the Board was operating effectively. Board effectiveness evaluation process Questionnaires A comprehensive questionnaire set are issued to all Board members for completion One-on-one discussions A one-to-one discussion with facilitator covering the questionnaire answers and any additional commentary Evaluation Results are collated and analysed by the facilitator Action plan Anonymised results are presented to the full Board and an action plan for the year ahead is agreed 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. The following actions were completed by the end of the reporting year: Area Recommendation Consider ongoing education for Non-Executive Directors Bespoke Remuneration Committee training provided by Aon and shared with whole Committee. Global entity governance training for subsidiary directors when appointed in new jurisdictions Process developed to provide country specific guidance to directors upon appointment in new jurisdictions. 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. Related parties The process outlined above in relation to conflicts of interests, together with the commissioning of regular share register analysis, enables the Board to monitor the Group’s related parties so that any related party transactions may be quickly identified and the subsequent compliance obligations ensured. Board operation The Board operates both formally, through Board and Committee meetings, and informally, through regular contact among Directors. The Board receives regular information from management on the Group’s performance. Appropriate information relating to the agenda for formal Board and Committee meetings is provided in advance of those meetings. For an overview of the Board Committees and their remits see page 72 and for information on the work of the Committees during the year see pages 73 to 78. All Directors are expected to commit sufficient time to their roles as required. As a minimum, Non-Executive Directors commit one day per month and the Chair of the Board commits further time as required to appropriately fulfil his role. 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 2020, this included Remuneration Committee training facilitated by Aon. For an overview of the skills held by the Board members, see page 70. 69 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Corporate Governance Report continued Communicating with shareholders The Executive Directors meet regularly with institutional shareholders to discuss the Group’s performance and future prospects, as do the Non-Executive Directors from time to time. At these meetings, the views of institutional shareholders are canvassed and subsequently reported back to the full 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. Due to the ongoing social distancing requirements caused by the COVID-19 pandemic, this year’s AGM will be a closed meeting. Shareholders will be offered the opportunity to pose questions to the Board ahead of the meeting. In October 2019, we launched a new corporate website to facilitate improved engagement with our stakeholders, including our shareholders. It was subsequently nominated by the IR Magazine Awards Europe 2020 in the “Best Investor Relations Website – Small Cap” category. The website can be found at corporate.yougov.com. During the year we invested in establishing a dedicated investor relations function. Our Investor Relations Manager is the primary point of contact for shareholders and can be reached at investor.relations@yougov.com. For details on the Company’s approach to shareholder engagement, see the stakeholder engagement section on pages 40 to 43 and ESG report on pages 44 to 53. Self-declared Board skills matrix (asat31July2020) Area International business C-Suite level experience Strategy development High-growth business PLC expertise Mergers & acquisitions Accounting/finance Change management Corporate governance Marketing Media Data analytics Operations Public relations Research Risk management Technology Key Non-Executive Directors Executive Directors Total 7/7 6/7 6/7 5/7 5/7 4/7 4/7 3/7 3/7 3/7 3/7 2/7 2/7 2/7 2/7 2/7 2/7 Investor relations activities during the year October Full-year results and analyst briefing December Annual General Meeting March Half-year results and analyst briefing July Trading update October Post-results roadshow for major shareholders January Trading update March Post-results roadshow for major shareholders 70 YouGov Annual Report & Accounts 2020 Board meeting attendance There were eight Board meetings held during the year (seven planned and one at short notice) at which attendance was as follows: Director Stephan Shakespeare Alex McIntosh Sundip Chahal Roger Parry Andrea Newman Rosemary Leith Ashley Martin Ben Elliot¹ Nick Jones² Capacity No. meetings attended Executive Director Executive Director Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director 8/8 8/8 7/8 8/8 7/8 7/8 7/8 0/0 3/3 1 There were no Board meetings held during the reporting period prior to Ben Elliot’s retirement in September 2019. 2 Nick Jones attended three of a possible three Board meetings prior to his retirement in December 2019. 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 PwC (the Company’s external auditors) and KPMG (assurance consultants). The Company Secretary is supported on company secretarial matters by KPMG (global entity management), Avieco (environmental reporting consultants), Numis (NOMAD) and Neville Registrars (registrar). During the year, the Remuneration Committee was supported by Aon (remuneration consultants). Matters reserved for the Board High-level decisions on matters such as Group strategy, financial performance and reporting, dividends, risk management, major capital expenditure, acquisitions and disposals are reserved for the Board or Board Committees. For information on the areas of responsibility of the Committees, see pages 72 to 76. Review of 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, market research 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 receives 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, including the external assurance work undertaken during the year, see pages 74 to 76. The key procedures include: ― a 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; ― appraisal and approval of proposed acquisitions by the Board; and ― external assurance reviews of key risk areas. 71 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020 Corporate Governance Report continued Review of key Company policies YouGov is committed to conducting our business with honesty and integrity. We expect all staff to maintain high standards. Our governance framework is underpinned by several key Company policies. These policies are applicable globally, reviewed annually and submitted for Board approval at least once each year. In each case, failure to comply with a Company policy may be subject to disciplinary action. The key Company policies are: Group Anti-Bribery Policy Compliant with the UK Bribery Act 2020, this policy sets out the measures in place to eliminate bribery and/or corrupt activities from our companies. The policy includes a procedure for notifying gifts and hospitality along with guidance for staff on what constitutes inappropriate gifting/hospitality. Group Anti-Facilitation of Tax Evasion Policy Compliant with the UK Criminal Finances Act 2017, the policy sets out the Company’s zero tolerance approach to tax evasion and details how staff members are expected to act to ensure no tax evasion takes place. The policy also contains guidance on how to recognise tax evasion and how to approach tackling it. Group Securities Dealing Policy and Group Restricted Persons’ Dealing Code Our dealing policies outline how we expect staff to transact in the dealing of YouGov securities in order to ensure that they do not misuse, or put themselves at risk of suspicion of misusing, information about the Company that is not public. Our Group Restricted Persons’ Dealing Code applies to Directors, persons discharging management responsibilities (“PDMRs”) and those staff members who regularly have access to insider information. Group Risk Management Policy and Procedure In order to ensure an effective review of corporate risks, the Group Risk Management Policy and Procedure outlines the process to be followed each year in order to create an accurate register of the risks facing the business. This policy also outlines the approach to be taken when creating the principal risks for disclosure in the Annual Report (see page 60). Group Whistleblowing Policy Taking into account the Whistleblowing Arrangements Code of Practice issued by the British Standards Institute and Protect (the whistleblowing charity), the policy enables staff, and those who we work with, to raise concerns about illegal or unethical conduct in the business. Measures are outlined which ensure that confidentiality will be respected, provide guidance on how staff can raise a concern and provide reassurance that concerns can be raised without fear of reprisal. Board Committees The Board has delegated powers to Board Committees who operate under Terms of Reference reviewed and approved by the Board on an annual basis. In addition to the Board Committees, there are management-level committees for specific subject areas – such as Data Privacy and Information Security – on which the Executive Directors sit. Board of Directors Non-Executive Directors Executive Directors Executive Committees Remuneration Committee Audit & Risk Committee Nomination Committee Board Committee comprises three Board Committee comprises two Board Committee comprises all Independent Non-Executive Directors Independent Non-Executive Directors Independent Non-Executive Directors — Responsible for overseeing the — Responsible for overseeing financial — Recommends changes to the Board remuneration of Executive Management, reporting, risk management and internal composition, oversees succession Senior Management and Group-wide control framework, compliance, and planning for the Board and Senior remuneration policies external and internal audit Management, and related talent policies. Read more see page 77 Read more see page 74 Read more see page 73 72 YouGov Annual Report & Accounts 2020Nomination Committee Report Roger Parry CBE Chair, Nomination Committee Main areas of responsibility: ― Succession planning for Board and Committee roles ― Composition of Board and Board Committees ― Effectiveness of Directors Members Our Nomination Committee comprises entirely Non-Executive Directors: Committee members Role Meetings attended Roger Parry1 Rosemary Leith Member Chair Ashley Martin Member Andrea Newman Member Ben Elliot2 Nick Jones3 Member Member 1/1 1/1 1/1 1/1 0/0 0/0 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. 3 Nick Jones was a member of the Committee until he retired from the Board on 11 December 2019. At the invitation of the Chair, the following Executive Directors attended meetings during the year as guests: Stephan Shakespeare Alex McIntosh Sundip Chahal 1/1 1/1 1/1 Dear shareholder I am pleased to present to you the report of the Nomination Committee (the “Committee”) for the year ended 31 July 2020. Areas of responsibility The Committee is responsible for: ― identifying the talent, 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 ― assisting the Board Chair (or, where appropriate, the Senior Independent Director), in taking steps to remove any underperforming Director. In fulfilling its role, the Committee considers the outcome of any board effectiveness evaluations. Membership and attendance at meetings The Nomination Committee now comprises the Board’s Non-Executive Directors. I am Chair of the Committee, except when the Committee is dealing with the matter of succession to the Board Chair; on these occasions, the Senior Independent Director fulfils the role of Committee Chair. Executive members of the Board may attend meetings at the invitation of the Committee Chair. The Company Secretary acts as Secretary to the Committee. Terms of Reference The Committee operates under Terms of Reference agreed by the Board, which were reviewed in December 2019, a copy of which can be found on our corporate website (corporate.yougov. com/governance). Activities during the year Activities during the year included: ― Succession planning: During the year, the Committee met to consider succession plans for the Board, the Chair and CEO roles in particular. Succession plans for all Board roles take into consideration the outcome of the annual Board Effectiveness Evaluation Process. A well balanced Board is key to good governance and the Committee ensures that the requisite balance of skills, experience and backgrounds are represented. ― Board Effectiveness Evaluation: This year’s board effectiveness evaluation was supported by an online portal, providing additional security and enhanced reporting capabilities. In addition to the main evaluation, the Directors were asked to self-assess their expertise for the creation of a skills matrix for the Board shown on page 70. You can read more about the effectiveness evaluation process on page 69. ― Senior Independent Director: Nick Jones retired as Senior Independent Director on 11 December 2019. In considering an appropriate successor, the Committee considered the length of service of each of the Non- Executive Directors as well as their experience outside of the Company. Rosemary Leith, being a highly experienced Director, was confirmed to be the appropriate successor and assumed the role on 11 December 2019. There will be an opportunity for you to ask me questions about the work of the Committee as part of our 2020 AGM procedure. Roger Parry CBE Chair Nomination Committee 15 October 2020 73 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Audit & Risk Committee Report Dear shareholder I am pleased to present to you the report of the Audit & Risk Committee (the “Committee”) for the year ended 31 July 2020. Areas of responsibility The Committee is a key part of the governance framework to which the Board has delegated oversight of the following matters: Accountingandfinancialreporting ― ensuring the financial performance of the Group is properly monitored and reported; and ― reviewing formal announcements relating to financial performance. 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. Systems of internal control and risk management ― reviewing effectiveness of YouGov’s internal control processes; ― reviewing the output from the bi- annual risk management process and ensuring mitigating actions are implemented; and ― overseeing the relationship with the outsourced provider of assurance services. The 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. After each meeting the Chair reports to the Board on the matters discussed at the meeting. We have formalised appointment of an external assurance provider following a successful programme of assurance projects. Membership and attendance at meetings Ben Elliot retired from the Committee on 13 September 2019. Ashley Martin was Chair of the Committee for the full year. The Board is satisfied that I, Ashley Martin, who served as Chair during the year, has recent and relevant financial experience. For information about the Chair’s relevant experience, please see the biography on page 67. Executive members of the Board may attend meetings at the invitation of the Chair. The Deputy Company Secretary attends meetings as Secretary to the Committee. The Chief Financial Officer, Group Finance Director and Company Secretary may also attend meetings at the invitation of the Chair, together with other subject matter experts. The Chair meets regularly with the external auditor and separately with the Chief Financial Officer and members of the wider finance team. The Committee schedules time to receive the views of the external auditor without Executive Management being present. Terms of Reference The Committee operates under Terms of Reference agreed by the Board, which were last reviewed in December 2019, a copy of which can be found on our corporate website (corporate.yougov. com/governance). Ashley Martin Chair, Audit & Risk Committee Main areas of responsibility: ― Accounting and Group financial reporting ― Relationship with the external auditors ― Systems of internal control and risk management Members Our Audit & Risk Committee comprises entirely Non- Executive Directors: Committee members Role Meetings attended Ashley Martin Chair Rosemary Leith Member Ben Elliot1 Member 4/4 4/4 0/0 1 There were no Committee meetings held during the reporting period prior to Ben Elliot’s retirement on 13 September 2019. At the invitation of the Chair, the following Executive Directors attended meetings during the year as guests: Alex McIntosh Sundip Chahal 4/4 2/2 74 YouGov Annual Report & Accounts 2020Activities during the year During the year, as a Committee we considered the following matters: Financial reporting We reviewed the content of the half-year results announcement and the Annual Report & Accounts. The Committee does this by considering, among other things, the accounting policies and practices adopted by the Group; the application of applicable reporting standards and compliance with broader governance requirements; papers detailing the approach taken by management to the key judgemental areas of reporting and the comments of the external auditor on management’s chosen approach. The Committee also considers significant issues including Group materiality, whether the business remains a going concern and whether the Annual Report & Accounts gives a fair, balanced and understandable view of the Group’s affairs for the year in question. The key judgemental areas considered by the Committee in respect of the financial year ended 31 July 2020 were: Judgemental items Committee review Impairment of goodwill There is significant judgement and estimation in determining whether Goodwill is impaired under IAS 36. This includes the components feeding into the value-in-use calculations including forecast results, discount rate, growth rates and allocation of assets to cash-generating units (“CGUs”). The Committee reviewed the reasonableness of the forecasts used. We paid particular attention to the terminal growth rate, historic growth rates achieved and a COVID-19 impacted economy. We also considered the allocation of assets and liabilities to geographic CGUs including classification of non-geographic CGUs. We considered the impact of sensitivities to the assumptions and whether there were any further impairment risks. The Committee discussed with the Company’s external auditors, PwC, the assumptions used which included advice from their valuation experts to consider the cost of capital used and the long-term growth rate applied. Capitalisation of internally generated and separately acquired intangible assets The Company has a team of 40 developers creating software products. There is considerable judgement in determining whether the costs incurred meet the criteria required for capitalisation under IAS 38. The Company capitalises the costs incurred of enhancing the Company’s proprietary global panel (the “Panel”) whether into new geographies, demographics or target panellists. There is significant judgement incurred in ensuring that the costs of panel recruitment meet the criteria required for capitalisation as a separately acquired asset under IAS 38. The Committee reviewed the process for distinguishing expenditure between enhancement and maintenance. We examined the different products created to ensure each met the criteria set out in IAS 38. The Committee also considered whether previously capitalised software assets were still creating value for the Group and a three-year amortisation was still reasonable. The Committee considered that the Panel is separately identifiable, under the control of YouGov and delivers future economic benefits as required by IAS 38. We reviewed how the asset had been enhanced (territories and demographics) to satisfy ourselves that the costs incurred were not advertising but specifically acquisition costs of new panellists. We noted YouGov is in line with the practice adopted in this area by several global competitors. We considered the attrition rate of panellists to ensure our amortisation policy was appropriate to reflect the useful life of the asset. We have also considered in detail the potential impact of the COVID-19 pandemic on our operations, the impact for our key clients and suppliers and reviewed its potential impact on the measurement of our assets and liabilities. You can read more about how the external auditors view these matters in their report on page 96. 75 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Audit & Risk Committee Report continued Risk review The Board has delegated primary responsibility for oversight and scrutiny of the Group’s risk management processes to the Committee. At each meeting during the year we receive updates from the business on the progress of the risk management evaluation and mitigating actions, culminating in our review of the updated Group Risk Register at our June meeting. For information on the risk review activities during the year, see pages 60 to 63. 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. During the year, we were pleased to oversee the implementation of an external assurance programme with KPMG. Assurance projects were completed on Cyber Security, IT Disaster Recovery and Revenue Recognition in compliance with IFRS 15. Progress against actions and recommendations from each of these, and other control reviews, are presented to the Committee in order to oversee completion. Following the success these projects, we have now formally appointed KPMG as an assurance provider for the next two years to undertake a programme of control reviews targeting areas highlighted as higher risk in the bi-annual risk review. As reported last year, our information security management systems are certified to ISO 27001, an international standard. We were pleased to maintain this globally recognised standard as it reinforces our commitment to the security of our clients’ data. Aside from internal audits for ISO 27001 compliance and the assurance projects, 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. External audit The Committee is primarily responsible for overseeing the relationship with and the performance of the external auditor, PwC, which is engaged to conduct a statutory audit on the annual financial statements and express an opinion thereon. The Committee reviews the scope of the PwC audit which includes the review and testing of controls over data which is used to produce the information contained in the financial statements. The Committee approved the external auditor’s terms of engagement and approved audit fees for the year ended 31 July 2020 of £407,000. Auditor independence The Committee also undertakes a formal assessment of the auditor’s independence each year, which includes: ― 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 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 has historically engaged PwC to provide certain non-audit services where appropriate (see page 123), but to do so requires the approval of the Committee and the audit partner. PwC has only been engaged for non-audit services relating to taxation compliance where its expertise about the business has been 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. 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 on page 123. The level of non-audit services has been approved by the Committee. As a result of the revisions to the Ethical Standard for Auditors issued by the Financial Reporting Council in December 2019, YouGov plc as an Other Entity of Public Interest will no longer be able to engage its external auditor PwC for taxation compliance services and is in the process of migrating the service to KPMG. Effectiveness of external auditor After the conclusion of the prior year (ended 31 July 2019) 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 obligated 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 has been the Company’s external auditor for 12 years and the Committee continues to be satisfied. In keeping with best practice, it is Committee policy for the audit partner to be rotated every five years and Brian Henderson, our current audit partner, was appointed from the 2019 audit. There are no contractual restrictions on our choice of external auditor. Compliance policies We have continued to improve our compliance policies, making necessary changes to ensure that they remain fit for purpose. There will be an opportunity for shareholders to ask me questions about the work of the Committee as part of our 2020 AGM procedure. Ashley Martin Chair Audit & Risk Committee 15 October 2020 76 YouGov Annual Report & Accounts 2020Directors’ Remuneration Report Remuneration Committee Report Dear shareholder I am pleased to present to you the Remuneration Committee Report for the year ended 31 July 2020. Areas of responsibility As a Committee we set the strategy, structure and levels of remuneration for the Executive Directors and monitor the remuneration policy for Senior Management. The Committee does so in the context of aligning the financial interests of the Executive Directors and management with the achievement of the Group’s stated strategic objectives. Membership and attendance at meetings This was the first full year of the current Committee membership, with Ashley Martin and Andrea Newman joining during the year to 31 July 2019. There were no changes to the Committee during the reporting year. The Company Secretary attends all the Committee meetings as Secretary to the Committee and, by invitation, they are also attended by the Board Chair, Chief Executive Officer, Chief Financial Officer, Group HR Director and external professional advisors for all or part of any meeting as and when appropriate and necessary. Terms of Reference The Committee operates under Terms of Reference agreed by the Board, which were last reviewed in December 2019. These are available on the Company’s website (corporate.yougov.com/ governance). Activities during the year During the year, as a Committee we have considered the following matters: ― LTIP 2019 design and implementation; ― LTIP 2014 vesting approval; ― Executive Director remuneration levels; and ― UK gender pay gap reporting. Supporting the delivery of FYP2, the Committee has set a remuneration framework that incentivises and drives performance both today and over the long term. Remuneration Policy The Remuneration Policy at YouGov is designed to reward our workforce within a structure that reflects both Company and personal performance. The policy, to which there has been no material change in the reporting year, is to set base salaries for employees at normal market peer-group levels (or lower market peer-group levels for the Executive Directors) and to offer an annual cash bonus opportunity linked to pre-determined targets or objectives (or a commission plan for some roles) in addition. Share awards are offered to the Executive Directors and other key 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. Long-term incentive plans During the year the Committee approved the full vesting of awards granted under the YouGov Long-Term Incentive Plan 2014 (“LTIP 2014”) which was aligned to the Company’s five- year strategic growth plan for 2014-19 (“FYP1”). YouGov 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 (“EPS”) 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). Accordingly, the stretching financial performance targets for the LTIP 2014 were achieved in full. For more information on the LTIP 2014, see page 82. Rosemary Leith Chair, Remuneration Committee Main areas of responsibility: ― Set the Remuneration Policy for Executive Directors ― Monitor, and make recommendations on, remuneration policy for Senior Management ― Oversee remuneration-related Company policies Members Our Remuneration Committee comprises entirely Non- Executive Directors: Committee members Role Rosemary Leith Chair Ashley Martin Member Andrea Newman Member Meetings attended 5/5 5/5 3/5 At the invitation of the Chair, the following Directors attended meetings during the year as guests: Roger Parry Nick Jones1 Stephan Shakespeare Alex McIntosh 2/2 1/3 5/5 5/5 1 Nick Jones retired from the Board on 11 December 2019. 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. 77 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Directors’ Remuneration Report continued Remuneration Committee Report continued During the year we also introduced the new YouGov Long-Term Incentive Plan 2019 (“LTIP 2019”), which is aligned to the Company’s strategic growth plan for 2019-23 (“FYP2”). The LTIP 2019 replaces the LTIP 2014 and the Deferred Share Bonus Plan 2014 (“DSBP 2014”) and consequently includes a larger cohort of participants than the LTIP 2014. As part of determining the plan design, the Committee consulted with major shareholders, all of which confirmed their support for the final design. The Board believes the FYP2 strategic growth plan will deliver significant value for our shareholders and the Committee was pleased to deliver a share plan designed to motivate key employees for its achievement. For more information on the LTIP 2019, see page 80. Directors’ Remuneration Report While there has been no material change to the Directors’ Remuneration Policy during the year, our Annual Report on Remuneration disclosures have been expanded compared to last year. As an AIM-listed company, YouGov is not obligated to comply with the remuneration reporting requirements for companies as set out in the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (and subsequent amendments) and the Companies (Miscellaneous Reporting) Regulations 2018. However, the Committee is committed to making disclosures to the degree appropriate to the size of our business. Accordingly, certain disclosures in this report reflect requirements of the regulations and have been included voluntarily. In addition, while AIM-listed companies are not obligated to seek shareholder approval of their Directors’ Remuneration Report, as practice we present our Annual Report on Remuneration at each AGM in order to provide accountability and transparency over our remuneration practices. At the 2019 AGM, of the votes received on the Annual Report on Remuneration, 99.99% were in favour that it be accepted. Pay gap reporting Ensuring that YouGov is demonstrating its commitment to an inclusive workplace through its remuneration practices is one of the Remuneration Committee’s priorities and monitoring of YouGov’s gender pay gap is an important part of this. The gender pay gap measures the difference in earnings between women and men across all roles; it is not the same as equal pay. there is more to be done. Both the Board and Senior Management are committed to narrowing the gender pay gap at YouGov. Throughout the next financial year I am keen to continue to work with the Board and YouGov’s management team to ensure that YouGov is doing all it can to close its pay gap over a reasonable period. Our latest UK Gender Pay Gap Report was published on 1 May 2020, in accordance with the UK Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 and can be found at corporate.yougov.com/governance/ genderpaygap. Conclusion We welcome feedback from shareholders on our Directors’ Remuneration Report and there will be an opportunity to ask me questions about the work of the Committee as part of our 2020 AGM procedure. As at 5 April 2019, the mean average gender pay gap in our UK business was 23.0%, down from 26.3% in 2018. While I am pleased to see that the mean hourly pay gap has moved in the right direction, Rosemary Leith Chair Remuneration Committee 15 October 2020 AGM voting history Absolute votes on the Annual Report on Remuneration 2019 Total: 61,946,912 For 61,946,210 For 61,946,210 Against 40 Withheld 450 Discretionary 212 Historic votes in favour of the Annual Report on Remuneration 2015-19 2015 2016 2017 2018 2019 78 98.53% 99.90% 100.00% 97.17% 99.99% YouGov Annual Report & Accounts 2020Directors’ Remuneration Policy The following section of this report describes our Remuneration Policy for YouGov’s Executive and Non-Executive Directors. There has been no material change to the Remuneration Policy during the year. Executive Director Remuneration Policy The Remuneration Committee (the “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 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 the 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 considering the performance of the individual as well as external peer-group market data. Salary increases will be generally awarded in line with increases applicable to the wider employee group; however, the Remuneration Committee may exercise discretion to vary the amount awarded based on merit 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. 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. 79 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Directors’ Remuneration Report continued Directors’ Remuneration Policy continued Annual bonus plan Purpose and link to strategy The annual bonus plan is focused on the achievement of the Group’s short-term objectives, in complement to the LTIP which is focused on the achievement of the Group’s long-term objectives. The bonus plan for the reporting year was linked specifically to Group adjusted operating profit1 performance, one of the Group’s key performance indicators (see page 26). 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 profit1; this is complemented by an LTIP which is designed to incentivise management for the achievement of long-term earnings growth. 1 Defined in the explanation of Non-IFRS measures on page 59. Share incentive plans Current share 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 manager’s contribution to long-term value creation. This plan has been designed to incentivise and reward the achievement of the long-term performance objectives that define the Company’s strategic growth plan, FYP2. This plan has replaced the LTIP 2014 and DSBP 2014. 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 base 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 Award level opportunity (maximum total cumulative award value as a % of base salary in 2019) Chief Executive Officer Other Executive Directors 1,200% 600% In addition to the Executive Directors, selected employees from across the Group will also participate in the LTIP 2019, at lower award level opportunities. 80 YouGov Annual Report & Accounts 2020Operation 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 & 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 (those who leave by reason of 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 vest 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 EPS1. Compound annual growth in adjusted basic EPS1 will be defined in accordance with the Company’s reported accounting policies, and will exclude exceptional and non-recurring items, but include acquisitions, to ensure it fairly reflects the performance achieved. Performance will be measured over four years using the financial year ended 31 July 2019 as a base year. The vesting of awards will be dependent on YouGov’s earning per share growth, one of the Group’s key performance indicators, as follows: 4 year adjusted basic EPS1 CAGR Below 10% Between 10% and 15% Between 15% and 35% 35% or above % of award vesting 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 based on a sliding scale. In addition, a discretionary underpin will be applied based on the quality of the underlying financial performance of the Company during 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 Defined in the explanation of Non-IFRS measures on page 59. 81 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Directors’ Remuneration Report continued Directors’ Remuneration Policy continued LTIP 2019 timeline 2019/20 2020/21 2021/22 2022/23 2023/24 Explanation Granting Award I Award II Award III Award grants subject to the achievement of personal performance objectives Vesting Performance period Vesting subject to the achievement of stretching targets aligned with FYP2 LTIP 2019 Awards will be granted following the end of the relevant ﬁnancial year, conditional upon the achievement of speciﬁc and demanding personal performance objectives. For awards made to the Executive Directors, the related personal performance objectives will be disclosed as part of reporting the award grants; for example, Award I is due to be granted in October 2020 and any award outcomes and related personal performance objectives will be reported in the Company's Annual Report & Accounts for the year-ended 31 July 2021. See the LTIP 2019 Operation section above for more detail on award granting. One-year post-vesting holding period for the Executive Director awards LTIP 2019 Awards will be due to vest in 2023 subject to the achievement of the related Company performance metrics for the plan period. The key performance metric for vesting is compound annual growth in adjusted basic earnings per share1. Performance will be measured over four years 2019/20-2022/23 with the year ended 31 July 2019 as a base year. Executive Director awards will be subject to a one-year post-vesting holding period. See the Performance Framework section above for more detail on performance metrics. See pages 11 and 24 to 25 for more information on FYP2, the Company's ﬁve-year plan. e c n a m r o f r e p l a n o s r e P e c n a m r o f r e p y n a p m o C Historic share plans YouGov Long-Term Incentive Plan 2014 (“LTIP 2014”) Summary 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 leaders whom the Board considered had a key role to play in the delivery of YouGov’s strategic plans. LTIP 2014 was designed to reward 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 EPS1 CAGR Below 10% 10% 15% 25% % of award vesting Nil 15% 30% 100% Vesting of awards was dependent on the Group’s average operating margin being at least 12% over the five-year period (average operating margin is the average of the adjusted operating profit, as defined in the accounts, divided by the revenue with each year’s margin percentage being calculated first). If this underpin condition is not achieved, the shares awarded will not vest. If it is met, then the five-year adjusted EPS1 growth performance will be assessed against the targets set out in the table above. 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. 82 YouGov Annual Report & Accounts 2020 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 base 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 Award level opportunity (maximum total cumulative award value as a % of base salary in 2015) Chief Executive Officer Other Executive Directors 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. The awards vested on 25 November 2019. No share options were granted under the LTIP 2014 in the year ended 31 July 2020. YouGov Deferred Share Bonus Plan 2014 (“DSBP 2014”) Summary The 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. The maximum award level is 10% of basic salary, awarded annually. The final round of awards under DSBP 2014 were granted in November 2019. 94,980 share options were granted under the DSBP 2014 in the year ended 31 July 2020, none of which were granted to Executive Directors of the Company. YouGov Long-Term Incentive Plan 2009 (“LTIP 2009”) Summary From 2009 to 2014, the Executive Directors and senior managers in the Group 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 2020. 83 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Directors’ Remuneration Report continued Directors’ Remuneration Policy continued Executive Director Remuneration Policy scenario analysis The charts below illustrate the amounts that each of the Executive Directors would be paid under different annual performance scenarios, based on the Directors’ Remuneration Policy. Stephan Shakespeare Minimum Target Maximum Maximum +50% share price appreciation Alex McIntosh Minimum Target Maximum Maximum +50% share price appreciation Sundip Chahal Minimum Target Maximum Maximum +50% share price appreciation 100% 23% 21% 17% 100% 29% 26% 21% 100% 35% 30% 26% 19% 26% 21% 58% 53% 41% 21% 28% 37% 32% 43% 37% 31% 26% 35% 30% 39% 35% 30% 16% 14% £327,327 £1,415,607 £1,551,642 £1,959,747 £198,699 £688,879 £786,915 £933,969 £321,992 £930,973 £1,052,769 £1,235,463 Fixed remuneration Annual bonus LTIP 2019 Share price growth The underlying assumptions for each of the above performance scenarios are detailed below. Performance scenario Base salary, pension and benefits1 Annual bonus1 Fixed remuneration Variable remuneration Minimum On-target Maximum ― Base salary ― Benefits ― Pension Based on the figures for the year to 31 July 2020 N/A On-target annual bonus (100% of base salary) Maximum annual bonus (150% of base salary) Maximum +50% As maximum LTIP 20192 N/A Full LTIP vesting (100% of maximum) at the share price at the start of the plan Full LTIP vesting (100% of maximum) at the share price at the start of the plan As maximum but with the assumption of share price growth of 50% 1 Stephan Shakespeare is paid 15% GBP: 85% AED. Alex McIntosh is paid 100% GBP. Sundip Chahal is paid 100% AED. For the purpose of this illustration, remuneration paid in AED has been translated into GBP at a rate of 1GBP:4.6345AED, being the average exchange rate during the reporting period. 2 As the Company’s long-term incentive awards are granted in shares and subject to stretching performance targets, the actual value of awards can vary significantly dependent on the extent to which targets are achieved and the movement in share price. The LTIP 2019 covers the performance period 2019-23. The awards are due to be awarded in October 2020, October 2021 and October 2022 and ordinarily vest in October 2023. For the purposes of this illustration, the annual value of the LTIP 2019 Awards has been determined based on the individual’s maximum opportunity for awards over the life of the four-year plan divided by four. No adjustments have been made for the potential payment of dividends. The operation of the LTIP 2019, including the performance targets and potential maximum award sizes, is set out on page 81. 84 YouGov Annual Report & Accounts 2020Non-Executive Director Remuneration Policy 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 Director’s fee will be paid in the form of Ordinary Shares in lieu of cash. Overview Purpose and link to strategy Supports recruitment and retention of Non-Executive Directors with the required skills and experience to lead the Company. Maximum opportunity Aggregate fees are subject to the limit set out in the Articles of Association. Performance framework Not applicable. Directors’ service contracts The table below summarises key details in respect of each Director’s service contract. Executive Directors Title Stephan Shakespeare Alex McIntosh Sundip Chahal 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 Contract date Notice period Roger Parry Rosemary Leith Andrea Newman Ashley Martin Ben Elliot² Nick Jones3 Non-Executive Chair Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director 6 February 2007¹ 1 February 2015 6 December 2017 1 September 2018 2 August 2010 2 June 2009 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. 3 Nick Jones retired as Director on 11 December 2019. 85 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Directors’ Remuneration Report continued Annual Report on Remuneration This report provides details of how the Directors were paid during the financial year to 31 July 2020. A resolution will be put to the shareholders at the Annual General Meeting to be held on 10 December 2020, 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 2020 (with the prior year comparative) was as follows: Name Executive Directors1 Stephan Shakespeare Alex McIntosh Sundip Chahal Non-Executive Directors2 Roger Parry Rosemary Leith3 Ashley Martin Andrea Newman Former Non-Executive Directors Ben Elliot4 Nick Jones5 Year to 31 July Base salary /fees £ Taxable benefits £ Annual bonus £ Pension £ Total £ 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 273,806 263,979 194,175 190,242 245,446 230,103 100,000 100,000 49,297 44,917 47,000 40,667 40,000 37,917 4,263 37,917 14,018 39,958 37,769i 41,785 993ii 1,185 49,241iii 49,605 282,953 291,961 203,915 210,407 253,336 254,493 17,488 25,253 1,634 0 29,159 17,824 – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – 612,016 622,978 400,717 401,834 577,182 552,025 100,000 100,000 49,297 44,917 47,000 40,667 40,000 37,917 4,263 37,917 14,018 39,958 1 Stephan Shakespeare is paid 15% GBP: 85% AED. Alex McIntosh is paid 100% GBP. Sundip Chahal is paid 100% AED. For the purpose of this report, remuneration paid in AED has been translated into GBP at a rate of 1GBP:4.6345AED, being the average exchange rate during the reporting period. The Executive Directors each received a salary increase of 2.5% with effect from 1 October 2019. Alex McIntosh received pension contributions from June 2020 onwards. 2 All Non-Executive Directors are paid 100% GBP and receive a proportion of their annual fee in shares in line with the Directors’ Remuneration Policy. During the reporting year, £20,000 of the Chair’s fee and £5,000 of the other Non-Executive Directors’ fee were paid in shares, as detailed on page 89. 3 Rosemary Leith appointed Senior Independent Director from 11 December 2019. 4 Ben Elliot retired as Non-Executive Director on 13 September 2019. 5 Nick Jones retired as Non-Executive Director and Senior Independent Director on 11 December 2019. The taxable benefits received consist of: i Private healthcare, family travel allowance and living accommodation allowance. ii Private healthcare. iii Expatriate benefits, including family visas, private healthcare, family travel allowance and dependents’ school fees. Additionally during the year the Executive Directors benefited from the vesting of nil cost awards under the LTIP 2014 which covered the five-year performance period from 1 August 2014 to 31 July 2019. Maximum award opportunities were determined based on the market value of £1.11 per share at the start of the plan in 2014. Based on the market value at vesting on 25 November 2019 of £5.70, the value of the LTIP 2019 Awards released to the Executive Directors was: Stephan Shakespeare £13,288,342 (2,331,288 shares); Alex McIntosh £2,569,275 (450,750 shares); and Sundip Chahal £3,226,103 (565,983 shares). For more detail on the awards granted to the Executive Directors over the life of this long-term incentive plan, and the vesting outcome, see the facing page. Payments for external appointments No Executive Director received any remuneration in the year in respect of external non-executive appointments. 86 YouGov Annual Report & Accounts 2020Annual bonus performance outcome The Executive Directors’ annual bonus plan for the 12 months to 31 July 2020 was set in relation to the Group’s annual budgeted adjusted operating profit1 target for the year. As a result of the target operating profit being exceed, the Committee determined that it was fair and reasonable for the annual bonuses to be paid out at the level of 104% of base salary, as shown in the table below. Weighting Threshold Target Maximum (Cap) Actual Performance measure Outturn Adjusted operating profit1 for 2019/20 % of base salary 100% £20.0m £21.0m £31.5m £21.7m n/a 25% 100% 150% 104% Long-Term Incentive Plan performance outcome LTIP 2014 granted awards The share awards granted to the Executive Directors during the life of the LTIP 2014 (2014-19) were as shown in the below table. Plan Date of grant Stephan Shakespeare Alex McIntosh Sundip Chahal Award I 9 December 2015 575,253 86,486 120,412 CEO Enhanced Award1 9 December 2015 544,976 n/a n/a Award II Award III 17 November 2016 605,529 86,486 120,412 12 December 2017 605,530 86,487 120,411 Director Top-Up Awards2 3 April 2018 n/a 191,291 204,748 Total awards 2,331,288 450,750 565,983 1 The CEO Enhanced Award is described on page 83. 2 The Director Top-Up Awards were made following the promotion of Alex McIntosh and Sundip Chahal to Executive Director roles. LTIP 2014 share price appreciation The maximum total number of share awards which could be granted to a participant under the LTIP 2014 was determined by reference to their base salary and the YouGov share price at the start of the plan; appreciation in the share price from the start of the plan to the end of the plan (vesting) is shown in the below table. Market value of awards at start of plan in 20141 £ Market value of awards at plan vesting in 20192 £ Share price appreciation 2014-19 % Share price CAGR 2014-19 % £1.11 £5.70 414% 38% 1 Under the LTIP 2014, the market value at the start of the plan was determined as the average closing price of a share on AIM over the period of three months ending on the third dealing day following the announcement of the Group’s results for the year ended 31 July 2014, being 13 October 2014. 2 The market value upon the plan vesting reflects the closing share price on the last trading day prior to the vesting date of 25 November 2019. LTIP 2014 vesting outcome As a result of strong financial performance during the five-year period 2014-19, the thresholds set by the Board for the purposes of the vesting of awards granted under the LTIP 2014 were exceeded, as presented in the table below. Upon assessment of these outcomes, and of the underlying financial performance of the Company, the Committee determined that it was fair and reasonable for the LTIP 2014 Awards to vest in full and accordingly all awards vested on 25 November 2019. Weighting Threshold Target Maximum Actual 1 Defined in the explanation of Non-IFRS measures on page 59. Performance measures Outturn Adjusted basic EPS1 CAGR 2014-19 Average operating profit margin1 2014-19 % of granted awards vesting 100% 10% 25% 25% 29% (exceeded) Discretionary 12% 12% 12% 15% (exceeded) n/a 15% 100% 100% 100% (full vesting) 87 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Directors’ Remuneration Report continued Annual Report on Remuneration continued CEO remuneration history The table below shows the CEO’s fixed and variable pay, including annual bonus, and LTIP vesting when applicable, over the last five years. Stephan Shakespeare Fixed remuneration1 (£) Annual bonus (£) Annual bonus (% of target)2 Annual bonus (% of maximum)2 LTIP vesting (£)3 LTIP vesting (% of maximum opportunity)4 Year to 31 July 2020 Year to 31 July 2019 Year to 31 July 2018 Year to 31 July 2017 Year to 31 July 2016 329,063 282,953 104.0% 69.3% 13,288,342 100.0% 331,017 291,961 110.6% 73.7% n/a n/a 307,745 258,589 100.7% 67.1% n/a n/a 252,077 252,718 101.4% 96.6% n/a n/a 248,909 241,970 100.0% 95.2% 187,688 100.0% 1 Fixed remuneration includes base salary, benefits and pension. 2 Throughout all five years the on-target annual bonus figure has remained 100% of base salary. In 2016 and 2017, the annual bonus was capped at 105% of base salary, while in 2018, 2019 and 2020, the annual bonus was capped at 150% of base salary. 3 Gains made under the Company’s long-term incentive plans are recognised in the financial year of vesting. The figure received in the year to 31 July 2020 represents the vesting of multiple awards of shares granted over the life of the LTIP 2014 which covered the performance period from 1 August 2014 to 31 July 2019 and which all vested on 25 November 2019; the market value of the awards was £1.11 at the start of the plan in 2014 and £5.70 at vesting in 2019. The 2016 figure represents the release of an award of shares granted under the Company’s historic Deferred Share Plan 2010 on 21 October 2015; the market value of the awards was £0.44 at granting in 2010 and £1.15 at vesting in 2015. 4 LTIP vesting shows the percentage of the eligible awards that vested in that financial year. Total Shareholder Return The chart below compares the value of £100 invested in YouGov plc shares (including reinvested dividends) on 1 August 2015, compared to the equivalent investment in the FTSE AIM All Share Index, over the last five financial years (1 August 2015 to 31 July 2020). August 2015 August 2016 August 2017 August 2018 August 2019 July 2020 YouGov TSR FTSE AIM All Share TSR 800 700 600 500 400 300 200 100 0 88 YouGov Annual Report & Accounts 2020 Non-Executive Directors’ fee rates The Non-Executive Directors’ fee rates were last reviewed in 2018/19 and remained unchanged during the year: Role Non-Executive Chair Non-Executive Director Senior Independent Director Committee Chair Annual fee rate (£) 100,000 40,000 3,500 7,000 Non-Executive Directors’ fee proportion paid in shares In keeping with the Directors’ Remuneration Policy, during the year a proportion of the Non-Executive Directors’ fees were paid in the form of Ordinary Shares, in lieu of cash, as noted in the below table. Name Roger Parry Rosemary Leith Ashley Martin Andrea Newman Role Non-Executive Chair Non-Executive Director Non-Executive Director Non-Executive Director Shares issued Market value (£)1 3,031 758 758 758 20,000 5,000 5,000 5,000 The payments made in shares amounted to 5,305 shares in total (2019: 10,115 shares). 1 The figure presented reflects the closing share price of the last trading day prior to the payment on 24 April 2020 of £6.60. 89 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Directors’ Remuneration Report continued Annual Report on Remuneration continued Executive Directors’ share options (audited) The following unexercised nil cost options over shares were held by Directors as of 31 July 2020: Plan Date of grant Stephan Shakespeare LTIP 2009 7 April 2014 LTIP 2014 LTIP 2014 LTIP 2014 LTIP 2014 9 December 20151 9 December 2015 17 November 2016 12 December 2017 Alex McIntosh LTIP 2009 29 July 2010 LTIP 2009 21 July 2011 LTIP 2009 30 July 2012 LTIP 2009 7 April 2014 LTIP 2014 LTIP 2014 LTIP 2014 LTIP 2014 9 December 2015 17 November 2016 12 December 2017 3 April 2018 Sundip Chahal LTIP 2014 LTIP 2014 LTIP 2014 LTIP 2014 9 December 2015 17 November 2016 12 December 2017 3 April 2018 Earliest exercise date Expiry date Number at 31 July 2019 Awarded in year Exercised in year Number at 31 July 2020 17 October 2016 14 October 2019 14 October 2019 14 October 2019 14 October 2019 6 April 2024 8 December 2025 8 December 2025 16 November 2026 11 December 2027 15 October 2012 14 October 2013 13 October 2014 17 October 2016 14 October 2019 14 October 2019 14 October 2019 14 October 2019 28 July 2020 20 July 2021 29 July 2022 6 April 2024 8 December 2025 16 November 2026 11 December 2027 11 December 2027 14 October 2019 14 October 2019 14 October 2019 14 October 2019 8 December 2025 16 November 2026 11 December 2027 11 December 2027 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 – – – – – – – – 120,412 120,412 120,412 204,748 565,983 – 17,500 15,326 11,517 86,486 86,486 86,486 191,291 495,093 – – – – – 1 LTIP 2014 CEO’s enhanced award, as described on page 83. No share options were awarded in the year. 90 YouGov Annual Report & Accounts 2020Directors’ share interests Executive Directors Stephan Shakespeare Alex McIntosh Sundip Chahal Non-Executive Directors Roger Parry Rosemary Leith Ashley Martin Andrea Newman Share options with performance conditions Share awards without performance conditions Scheme interests in shares Vested but unexercised share options Shares beneficially owned Total interest in shares – – – – – – – – – – – – – – – – – – – – – 2,593,473 495,093 0 7,417,556 5,353 877,073 10,011,029 500,446 877,073 – – – – 109,987 13,027 7,499 3,156 109,987 13,027 7,499 3,156 Following the vesting of the LTIP 2014 in November 2019, the Executive Directors do not currently hold any unvested share options. The first tranche of share awards relating to the Company’s current long-term share incentive plan, the LTIP 2019, are scheduled to be granted in October 2020 subject to Committee approval and subsequently to be reported in next year’s Annual Report & Accounts. For more details about conditions of the LTIP 2019, see pages 80 to 82. Report signed on behalf of the Board: Rosemary Leith Chair Remuneration Committee On behalf of the Board 15 October 2020 91 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Directors’ Report Directors’ Report for the year ended 31 July 2020 The Directors present their report for the year ended 31 July 2020, which has been prepared in accordance with the Companies Act 2006. Other information, which has been included elsewhere within the Annual Report, but which is relevant to this report, is incorporated by reference, per the table below: Disclosure Page Key performance indicators Future developments and prospects Operating results Financial summary Principal risks and uncertainties Financial risks Section 172 statement Corporate governance arrangements and code Directors’ statement of responsibility Interests in subsidiaries Transactions with Directors and other related parties Events after the reporting year 26 25 1 54 60 141 38 64 95 135 146 147 Principal activity YouGov plc and subsidiaries’ (the “Group”) principal activity is the provision of market research. 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 Alex McIntosh Role Executive Executive Sundip Chahal Roger Parry Rosemary Leith Ashley Martin Andrea Newman Chief Operating Officer Non-Executive Chair Non-Executive Director Non-Executive Director Non-Executive Director Ben Elliot Non-Executive Director Nick Jones Non-Executive Director Executive Non-Executive Non-Executive Non-Executive Non-Executive Non-Executive (Retired 13 September 2019) Non-Executive (Retired 11 December 2019) Directors’ 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 & Accounts. Directors’ interests in shares The interests of the current Directors in the shares of the Company as at 31 July 2020 and 31 July 2019 were as below: Stephan Shakespeare 1 Alex McIntosh Sundip Chahal Roger Parry Rosemary Leith Ashley Martin Andrea Newman As at 31 July 2020 Number of shares As at 31 July 2019 Number of Shares 7,417,556 5,353 877,073 109,987 13,027 7,499 3,156 7,417,556 8,978 311,008 106,956 11,819 6,741 2,398 1 Includes 559,404 Ordinary Shares held by Stephan Shakespeare’s wife, Rosamund Shakespeare. 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 Remuneration Report on pages 89 to 91. Section 172(1) Companies Act 2006 The statement in accordance with section 172(1) of the Companies Act 2006 can be found on pages 38 to 39. 92 YouGov Annual Report & Accounts 2020Employment policies and employee involvement A diverse and inclusive workforce is particularly important to YouGov given our mission to provide insight into “what the world thinks”. The Board is committed to pursuing equality and diversity in all its employment activities including recruitment, training, career development and promotion and ensuring there is no bias or discrimination in the treatment of people. Our learning and development and career development resources, opportunities and processes are available for all our employees to access, regardless of their gender, race, age, disability or other protected characteristic. Applications for employment are welcomed from persons with disabilities, and special arrangements and adjustments as necessary are made to ensure that applicants are treated fairly when attending for interview or for pre-employment aptitude tests. Wherever possible the opportunity is taken to make appropriate adjustments for or retrain people who become disabled during their employment in order to maintain their employment within the Group. 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 Global Town Halls, all-staff emails and our global 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. Executive Management hosts regular Global Town Hall meetings with an opportunity for employees to ask questions. For more information about how we involve, engage and communicate with employees, see pages 40 and 49. For more information about how the Board of Directors have had regard to employee interests in respect of principal decisions taken during the year, see pages 38 and 39. Relationships with suppliers, customers and other stakeholders We have identified our key stakeholders and you can read more about how we engage with them on pages 40 to 43 and how the Directors have had regard to the need to foster the Company’s business relationships with stakeholders including on principal decisions taken by the Company during the year on pages 38 and 39. Modern Slavery Act We have in place policies and procedures to assess, monitor and reduce the risk of forced labour and human trafficking occurring in our businesses and supply chains. Assessments of all key suppliers are completed as part of ensuring compliance with the Modern Slavery Act across the YouGov Group. Our statement on Modern Slavery in our supply chain is available at: corporate.yougov.com/ modernslavery. Supplier payment practices It is the policy and practice of the Group to make payments due to suppliers in accordance with agreed terms and conditions, generally 30 days. For the period ended 31 July 2020, the average time taken to pay invoices was 19 days. Dividends A final dividend of 4.0p per share in respect of the year ended 31 July 2019 was paid on 16 December 2019, amounting to a total payment of £4,298,000. A dividend of 5.0p per share in respect of the year ended 31 July 2020, amounting to a total payment of £5,424,000 will be proposed at the Annual General Meeting on 10 December 2020. Treasury shares The total number of shares held in treasury at 31 July 2020 was nil (2019: 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. For information on the Employee Benefit Trust, see below. Authority to purchase the Company’s shares At the AGM on 11 December 2019, shareholders authorised the Company to make one or more market purchases of up to 10,573,100 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 and the Directors propose to renew this authority at the 2020 AGM. Employee Benefit Trust Sanne Fiduciary Services Limited (“Sanne”) is Trustee of the YouGov Employee Benefit Trust (the “Trust”) and tasked with a programme of share purchases. The purpose of these purchases is to facilitate the settlement of awards under the Company’s employee share schemes. At 31 July 2020, the YouGov Employee Benefit Trust held 741,152 Ordinary Shares. Guidance for shareholders for use when calculating their percentage holding in the Company can be found below under “Major shareholders”. Major shareholders At 31 July 2020, 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 Aberdeen Standard Investments Octopus Investments Blackrock Stephan & Rosamund Shakespeare T Rowe Price Global Investments Investec Wealth & Investment Charles Stanley Kabouter Management Total Shares 15,433,087 9,397,691 8,438,391 8,279,437 7,417,5561 7,305,896 5,162,446 4,170,708 3,748,050 69,353,262 Percentage issued share capital 14.23% 8.66% 7.78% 7.63% 6.84% 6.74% 4.76% 3.84% 3.46% 63.94% 1 Includes 559,404 Ordinary Shares held by Stephan Shakespeare’s wife, Rosamund Shakespeare. 93 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Independent 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 have been taken as a Director in order to make himself or herself aware of any relevant audit information and to establish that the Company’s auditors are aware of that information. The Company’s 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 AGM of the Company will be held on 10 December 2020. The Notice of AGM can be found on page 166. Tilly Heald Company Secretary By order of the Board 15 October 2020 Directors’ Report continued 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. For more information on the YouGov Employee Benefit Trust, see the previous page under “Employee Benefit Trust”. 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. In 2020, £7.9m (2019: £4.8m) 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 costs was £4.6m (2019: £4.6m). Charitable and political contributions Donations to charitable organisations amounted to £41,000 (2019: £95,000). This included a portion of an annual subscription of £100,000 (2019: £93,000) 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. Streamlined Energy and Carbon Reporting Regulations (“SECR”) disclosure For the year ended 31 July 2020, YouGov plc met the criteria for reporting under SECR. You can read our SECR disclosure in full on page 53. Going concern The Group meets its day-to-day working capital requirements through its strong cash reserves. At 31 July 2020, the Group had a healthy liquidity position with £35.3m of cash and cash equivalents (see Note 16) and no debt financing commitments. The Group has net current assets of £17.4m and net assets of £109.3 as at 31 July 2020. In assessing going concern, management has considered the effects of the COVID-19 pandemic including the impact on the Group’s operations, budget for the year ended 30 July 2021 and forecast for 2022. The Group has not seen any significant slowdown in sales and has not furloughed any staff or sought extended payment terms for its obligations during the COVID-19 pandemic. The impact on the business is discussed further in the Strategic Report and as part of the consideration of principal risks and uncertainties on page 60. However, given the unprecedented nature of the pandemic, severe downside scenarios have been modelled where revenue targets are missed by up to 30% due to reduced revenue from clients’ delays and a slowdown in securing new business. Even in these scenarios the Group has strong liquidity, no external debt and many mitigating actions that would allow it to meet its financial liabilities as they fall due. These mitigating actions, should they be required, are all within management’s control and could include reducing new recruitment, lowering commission or bonus payments, and reduced capital expenditure. The Directors therefore 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. Fair, balanced and understandable statement The Directors consider that the Annual Report & 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. 94 YouGov Annual Report & Accounts 2020Directors’ Responsibilities Statement 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. Alex McIntosh Chief Financial Officer On behalf of the Board 15 October 2020 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 (“IFRS”) as adopted by the European Union and Parent Company financial statements in accordance with IFRS 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 IFRS as adopted by the European Union have been followed for the Group financial statements and IFRS 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. 95 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Independent Auditors’ Report to the Members of YouGov plc Report on the audit of the financial statements Opinion In our opinion, YouGov plc’s Group financial statements and Parent Company financial statements (the “financial statements”): ― give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 July 2020 and of the Group’s profit and the Group’s and the Parent Company’s 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 regards the Parent Company’s financial statements, 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 2020 (the “Annual Report”), which comprise: the Consolidated and Parent Company Statements of Financial Position as at 31 July 2020; the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated and Parent Company Statements of Cash Flows, and the Consolidated and Parent Company Statements of Changes in Equity for the year then ended; the Principal Accounting Policies of the Consolidated Financial Statements; and the notes to the Consolidated and Parent Company 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 Audit scope Key audit matters 96 ― Overall Group materiality: £878,000 (2019: £950,000), based on 5% of profit before tax, adjusted for the non-recurring goodwill impairment charge. ― Overall Parent Company materiality: £631,000 (2019: £422,000), based on 5% of profit before tax, adjusted for the non-recurring investment impairment charge. ― The focus of the Group team’s work was on the UK and US operations which were included as full scope components. The Middle East operation was also in full scope and we received reporting on the complete financial information of this unit from our Middle East team. In addition, audit procedures were performed by the Group team over specific financial statement line items for the German, Nordics, Crunch, Services and SMG operations. ― Our testing accounted for 92% of profit before tax. ― Capitalisation of development costs ― Capitalisation of panel acquisition costs ― Carrying value of goodwill and investments ― Assessment of risks posed by COVID-19 YouGov Annual Report & Accounts 2020The 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. Key audit matter Capitalisation of development costs Refer to Principal Accounting Policies of the Consolidated financial statements and Note 11. The Group incurs costs in developing survey, panel management and other platforms which are capitalised as intangible assets in the statement of financial position. A total of £7.9m (2019: £4.8m) of internally developed intangible assets have been capitalised in the year. In order to capitalise the costs as intangible assets, each of the criteria under IAS 38 ‘Intangible Assets’ needs to be met. The reliable measurement of expenditure attributable to such development relies on the appropriate recording and accurate measurement of, in particular, time incurred by the Group’s development team. We have focussed on this in our audit as the application of judgement is required in assessing whether the IAS 38 criteria have been met and determining the amounts to be capitalised requires estimation. This matter relates to the Group financial statements. Capitalisation of panel acquisition costs Refer to the Accounting Estimates and Judgements disclosure within the Principal Accounting Policies of the Consolidated Financial Statements and Note 11. We focussed on this area because of the significant level of judgement in determining whether the costs of panel acquisition meet the criteria to be capitalised as a separately acquired intangible asset under IAS 38. £8.9m of panel acquisition costs were capitalised in the Consolidated financial statements in the year (2019: £4.0m) and £1.6m was capitalised in the Parent Company financial statements (2019: £1.0m) It is necessary to demonstrate that the asset is identifiable, under the control of YouGov plc and delivers future economic benefits. We have also focussed on whether the ongoing capitalisation of costs associated with this asset is consistent with IAS 38. This matter relates to the Group and Parent Company financial statements. How our audit addressed the key audit matter In completing our work over the capitalisation of development costs, we performed the following procedures: ― For a sample of projects, we assessed whether each of the capitalisation criteria described in IAS 38 had been met and therefore whether capitalisation was appropriate. In doing so, we made inquiries of the Group’s development team and individual project leads. We obtained corroborating evidence to support the fulfilment of the criteria for each project we tested; ― Assessed the future economic benefits of the software, considering its function within the business and link to the generation of revenues; ― 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; and ― Assessed the appropriateness of the useful economic lives determined by management. Based on the audit procedures performed, we are satisfied that the amounts capitalised appropriately reflect the requirements of IAS 38. In completing our work over the capitalisation of panel acquisition costs we performed the following procedures: ― Challenged management to demonstrate the separability of the asset from the wider YouGov business, show that the costs are directly related to the acquisition of panellists and demonstrate the enhanced economic benefits that are linked to the costs incurred; ― Tested the costs incurred to supporting invoices and tested whether the costs incurred result in the addition of members to the panel. We have also considered the nature of the costs subject to audit testing and whether they are permissible to be capitalised under IAS 38; ― Reviewed management’s plans for the panel and the linkage between the costs incurred and expansion into new sectors and regions or the development of new products; and ― Assessed the appropriateness of the useful economic life determined by management. Based on the audit procedures performed, we are satisfied that the amounts capitalised appropriately reflect the requirements of IAS 38. 97 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Independent Auditors’ Report to the Members of YouGov plc continued Key audit matter How our audit addressed the key audit matter Carrying value of goodwill and investments 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 three years together with a terminal value using a perpetuity growth rate. The total amount of goodwill on the Group statement of financial position as at 31 July 2020 is £61.5m (2019: £65.6m). In the Parent Company statement of financial position investments in subsidiaries are held at a value of £55.1m (2019: £61.7m). The directors performed an impairment assessment of the goodwill at Group level and the investments at a Parent Company level. This assessment was based on a value-in-use model which took into consideration the FY21 budget, which had been updated for COVID-19 considerations, and applied localised growth assumptions to determine FY22 and FY23 forecasts. An impairment charge of £2.1m was recorded in respect of the Nordics CGU goodwill in the Consolidated financial statements. As detailed in Note 36, there is a corresponding impairment in the carrying value of the investment in the Nordics business in the Parent Company financial statements of £4.0m. The key assumptions in this assessment included forecast future revenue growth, discount rate and perpetuity growth rate. This matter relates to the Group financial statements for impairment of goodwill and Parent Company financial statements for impairment of investments. Assessment of risks posed by COVID-19 Refer to the principal risks and uncertainties section of the Strategic Report, and the going concern disclosures in the Principal Accounting Policies of the Consolidated Financial Statements. Management has considered the potential impact of the events that have been caused by the COVID-19 pandemic, on the current and future operations of the Group and Parent Company. The Group and Parent Company have an infrastructure that allows remote working without interruption to operations and the customer base continues to utilise the Group and Parent Company’s services. As at the statement of financial position date the Group has £35.3m of cash reserves (2019: £37.9m) and no debt finance. The Parent Company shows £9.2m of cash and cash equivalents. There has also been growth in revenues between the year ended 31 July 2019 and the year ended 31 July 2020 despite the COVID-19 pandemic. Given the trading performance to date, the operational capability to work remotely and the level of liquidity shown in cash flow forecasts management are confident that the Group and Parent Company will continue in business for the foreseeable future and has adopted the going concern basis in the financial statements. This matter relates to the Group and Parent Company financial statements. In our work over the impairment of goodwill and investments, we have performed the following procedures: ― Tested the mathematical accuracy of the forecasts used for assessing the value of both goodwill and investments; ― Agreed the forecasts used for impairment reviews to the management approved FY21 budget, FY22 and FY23 forecasts as adjusted for COVID-19 impacts; ― Utilised valuation specialists to assess the discount rates and long term growth rates applied to management’s forecasts; ― Tested the allocation of assets and liabilities to cash- generating units (“CGUs”); ― Performed lookback testing by CGU to test historic forecasting accuracy and to verify historic achieved growth rates; ― Used two external references to assess the reasonableness of management’s growth forecast assumptions; ― Reviewed management’s sales pipeline and sales strategy and considered the feasibility of the resulting growth forecast; and ― Reviewed management’s sensitivity analysis to assess whether it was appropriate and performed our own sensitivity test to establish whether there were any further impairment risks. Based on the audit procedures described above we agree with the value of goodwill and investment impairment charges taken for the Nordics CGU by management in the Group and Parent Company financial statements respectively. We did not identify any further impairment charges as a result of the procedures performed. In assessing the directors’ consideration of the potential impact of COVID-19, we performed the following procedures: ― We obtained from management its latest assessments that support the Board’s assessment and conclusions with respect to the going concern statement; ― Performed audit procedures over management’s going concern assessment, including considering the consistency of the forecast and growth rates with impairment models, comparing the forecast to historic performance, validating the underlying cash flow projections for the Group to supporting documents where appropriate and performing sensitivity analysis to assess the impact of a shortfall against revenue forecasts; ― Evaluated the completeness and appropriateness of management’s disclosures in the financial statements related to the impact of the COVID-19 pandemic; and ― Assessed management’s inclusion of the pandemic’s impact in valuation assessments including impairment reviews and provisions against trade receivables. Based on the results of the procedures performed and the information available at the date of the directors’ approval of the financial statements we concur with the directors’ assessment of the Group and Parent Company’s ability to continue as a going concern and that management’s disclosures are adequate. We found that management had considered the impact of COVID-19 in performing impairment reviews and considered the valuation of receivables and had made appropriate disclosures in the financial statements. 98 YouGov Annual Report & Accounts 2020How 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 and the Parent Company, the accounting processes and controls, and the industry in which they operate. The Group reports its operating results and financial position in eight divisions: the UK, USA, Germany, Nordics, Middle East, Asia Pacific, YouGov Sports (“SMG”) and Mainland Europe. These divisions further disaggregate into individual countries for financial reporting. 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 and US. 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, audit procedures were performed by the Group team over specific financial statement line items for the German, Nordics and SMG operating businesses and over the Crunch and Services central functions. Our scope accounted for 92% 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 materiality How we determined it Rationale for benchmark applied Group financial statements Parent Company financial statements £878,000 (2019: £950,000). 5% of profit before tax, adjusted for the non- recurring goodwill impairment charge. Based on the benchmarks used in the Annual Report, we consider that profit before tax is the primary measure used by the shareholders in assessing the performance of the Group, and is a generally accepted auditing benchmark. However the impairment charge is considered to be a non-recurring item which has therefore been added back in our calculation of materiality this year. There was no impairment charge during the previous financial year. £631,000 (2019: £422,000). 5% of profit before tax, adjusted for the non- recurring investment impairment charge. Based on the benchmarks used in the Annual Report, we consider that profit before tax is the primary measure used by the shareholders in assessing the performance of the Group, and is a generally accepted auditing benchmark. However the impairment charge is considered to be a non-recurring item which has therefore been added back in our calculation of materiality this year. There was no impairment charge during the previous financial year. 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 £600,000 and £790,000. 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 £43,000 (Group audit) (2019: £48,000) and £31,000 (Parent Company audit) (2019: £21,000) as well as misstatements below those amounts that, in our view, warranted reporting for qualitative reasons. 99 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Independent Auditors’ Report to the Members of YouGov plc continued Conclusions relating to going concern We have nothing to report in respect of the following matters in relation to which ISAs (UK) require us to report to you where: ― 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 and 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. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Group’s and Parent Company’s ability to continue as a going concern. 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. 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 2020 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 Parent Company and their 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, 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 and 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 Group or the Parent Company or to cease operations, or have no realistic alternative but to do so. 100 YouGov Annual Report & Accounts 2020Auditors’ 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 Parent Company financial statements are not in agreement with the accounting records and returns. We have no exceptions to report arising from this responsibility. Brian Henderson (Senior Statutory Auditor) for and on behalf of PricewaterhouseCoopers LLP Chartered Accountants and Statutory Auditors London 15 October 2020 101 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Consolidated Income Statement for the year ended 31 July 2020 Revenue Cost of sales Gross profit Administrative expenses Operating profit Separately reported items Adjusted operating profit Finance income Finance costs Share of post-tax result/(loss) 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 All operations are continuing. Note 1 1 4 1 5 5 14 1 6 1 8 8 2020 £’000 152,441 (23,374) 129,067 (113,867) 15,200 6,630 21,830 433 (426) – 15,207 (5,812) 9,395 9,558 (163) 9,395 9.0p 8.5p 2019 (restated) £’000 136,487 (24,206) 112,281 (92,260) 20,021 (1,529) 18,492 255 (869) (52) 19,355 (5,085) 14,270 14,869 (599) 14,270 14.1p 13.1p The notes and accounting policies on pages 107 to 145 form an integral part of these consolidated financial statements. 102 YouGov Annual Report & Accounts 2020Consolidated Statement of Comprehensive Income for the year ended 31 July 2020 Profit for the year Other comprehensive (expense)/income: Items that may be subsequently reclassified to profit or loss Currency translation differences Other comprehensive (expense)/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 2020 £’000 9,395 (4,776) (4,776) 4,619 4,780 (161) 4,619 2019 (restated) £’000 14,270 4,892 4,892 19,162 19,761 (599) 19,162 Items in the statement above are disclosed net of tax. The tax relating to each component of other comprehensive income is disclosed in Note 20. The notes and accounting policies on pages 107 to 145 form an integral part of these consolidated financial statements. 103 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Consolidated Statement of Financial Position as at 31 July 2020 Assets Non-current assets Goodwill Other intangible assets Property, plant and equipment Right of use assets Investments in associates Deferred tax assets Total non-current assets Current assets Trade and other receivables Current tax assets Cash and cash equivalents Total current assets Total assets Liabilities Current liabilities Trade and other payables Current tax liabilities Contingent consideration Provisions Lease liabilities Total current liabilities Net current assets Non-current liabilities Contingent consideration Provisions Lease liabilities 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 2020 £’000 2019 (restated) £’000 2018 (restated) £’000 10 11 12 13 14 20 15 16 17 18 19 18 19 20 22 22 61,455 23,156 3,631 8,891 – 10,959 108,092 34,239 707 35,309 70,255 178,347 38,482 1,673 3,428 6,739 2,491 52,813 17,442 3,020 4,606 6,854 1,716 16,196 69,009 109,338 217 31,380 (1,700) 9,239 15,145 55,776 110,057 (719) 109,338 65,637 16,737 4,424 10,529 – 11,208 108,535 33,726 930 37,925 72,581 181,116 40,041 740 2,791 4,931 2,891 51,394 21,187 7,279 4,623 8,217 2,158 22,277 73,671 107,445 211 31,345 (3,738) 9,239 19,923 51,023 108,003 (558) 107,445 52,060 13,297 3,037 5,420 191 9,620 83,625 33,586 1,442 30,621 65,649 149,274 34,839 1,247 1,409 3,791 2,151 43,437 22,212 5,110 4,000 3,652 2,128 14,890 58,327 90,947 211 31,300 – 9,239 15,031 35,166 90,947 – 90,947 The notes and accounting policies on pages 107 to 145 form an integral part of these consolidated financial statements. The financial statements on pages 102 to 145 were authorised for issue by the Board of Directors on 15 October 2020 and signed on its behalf by: Alex McIntosh Chief Financial Officer YouGov plc Registered No. 03607311 104 YouGov Annual Report & Accounts 2020Consolidated Statement of Changes in Equity for the year ended 31 July 2020 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 interests in equity £’000 Balance at 1 August 2018 as reported Change in accounting policy Balance at 1 August 2018 as restated Exchange differences on translation (restated) Net gain recognised directly in equity (restated) Profit for the year (restated) Total comprehensive income for the year (restated) 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 (restated) Exchange differences on translation Net (loss)/gain recognised directly in equity Profit/(Loss) for the year Total comprehensive income/(expense) for the year Issue of shares Acquisition of treasury shares Treasury shares used to settle share option exercises Dividends paid Share-based payments Tax in relation to share- based payments Total transactions with owners recognised directly in equity Balance at 31 July 2020 211 31,300 27 – – 211 31,300 9,239 15,031 35,549 91,330 – – (383) (383) 9,239 15,031 35,166 90,947 – – – – – – – – (3,738) – – – – – – – 45 – – – – – – – – – – – – – – Total £’000 91,330 (383) 90,947 4,892 4,892 – – – – – – – – – – – – – – – 4,892 4,892 – – 4,892 4,892 – 14,869 14,869 (599) 14,270 4,892 – 14,869 – – (3,167) 2,401 19,761 45 (3,738) (3,167) 2,401 1,754 1,754 (599) 41 19,162 86 – – – – (3,738) (3,167) 2,401 1,754 – – – – – 45 (3,738) 988 (2,705) 41 (2,664) 211 31,345 (3,738) 9,239 19,923 51,023 108,003 (558) 107,445 – – – – 6 – – – – – – – – – 35 – – – – (5) – (2,414) – – – – 4,457 – – – – – – – – – – – – – (4,778) – (4,778) 2 (4,776) (4,778) – – 9,558 (4,778) 9,558 2 (163) (4,776) 9,395 (4,778) – 9,558 (1) 4,780 35 (161) – 4,619 35 – – – – – – (2,414) – (2,414) (4,457) (4,298) 2,781 – (4,298) 2,781 1,170 1,170 – – – – – (4,298) 2,781 1,170 6 217 35 31,380 2,038 (1,700) – 9,239 – 15,145 (4,805) 55,776 (2,726) 110,057 – (2,726) (719) 109,338 The notes and accounting policies on pages 107 to 145 form an integral part of these consolidated financial statements. 105 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Consolidated Statement of Cash Flows for the year ended 31 July 2020 Cash flows from operating activities Profit before taxation Adjustments for: Finance income Finance costs Share of post-tax result/loss of associates Amortisation of intangibles Depreciation (Profit)/Loss on disposal of property, plant and equipment and other intangible assets Share-based payments Other non-cash items1 (Increase)/Decrease in trade and other receivables (Decrease)/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 Interest received Net cash used in investing activities Cash flows from financing activities Proceeds from the issue of share capital Principal element of lease payments Dividends paid to shareholders Purchase of treasury shares Net cash used in financing activities Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at beginning of year Exchange (loss)/gain on cash and cash equivalents Cash and cash equivalents at end of year Note 2020 £’000 2019 (restated) £’000 15,207 19,355 (433) 426 – 10,782 4,491 (16) 2,781 5,293 (1,621) (220) 2,015 38,705 (294) (3,184) 35,227 – (7,451) – (1,067) (17,575) 83 175 (25,835) 41 (2,972) (4,298) (2,419) (9,648) (256) 37,925 (2,360) 35,309 (255) 869 52 8,809 4,396 6 2,401 (3,245) 714 3,969 1,348 38,419 (304) (4,521) 33,594 (228) (4,520) (2,063) (2,713) (9,453) – 211 (18,766) 86 (2,843) (3,167) (3,738) (9,662) 5,166 30,621 2,138 37,925 2 2 12 11 16 1 Includes £3,663,000 of contingent consideration in respect of acquisitions treated as staff costs, a £159,000 increase in acquisition consideration recognised in the income statement and a £2,103,000 impairment of goodwill. The notes and accounting policies on pages 107 to 145 form an integral part of these consolidated financial statements. 106 YouGov Annual Report & Accounts 2020Principal Accounting Policies of the Consolidated Financial Statements for the year ended 31 July 2020 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 2020. 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. Note 27 provides a summary of the opening adjustments made. Going concern The Group meets its day-to-day working capital requirements through its strong cash reserves. At 31 July 2020, the Group had a healthy liquidity position with £35.3m of cash and cash equivalents (see Note 16) and no debt financing commitments. The Group has net current assets of £17.4m and net assets of £109.3 as at 31 July 2020. In assessing going concern, management have considered the effects of the Covid-19 pandemic including the impact on the Group’s operations, budget for the year ended 30 July 2021 and forecast for 2022. The Group has not seen any significant slowdown in sales and has not furloughed any staff or sought extended payment terms for its obligations during the COVID-19 pandemic. The impact on the business is discussed further in the strategic report and as part of the consideration of principal risks and uncertainties on page 60. However, given the unprecedented nature of the pandemic, severe downside scenarios have been modelled where revenue targets are missed by up to 30% due to reduced revenue from clients’ delays and a slowdown in securing new business. Even in these scenarios the Group has strong liquidity, no external debt and many mitigating actions that would allow it to meet its financial liabilities as they fall due. These mitigating actions, should they be required, are all within management’s control and could include reducing new recruitment, lowering commission or bonus payments, and reduced capital expenditure. The Directors therefore 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 2019 and are relevant to the preparation of the Group’s financial statements: ― 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 lessees for certain short-term leases and leases of low value assets. 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. 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. For more information about the impact of adoption see Note 27. ― IFRIC 23 Uncertainty over Income Tax Treatments (effective 1 October 2019) The interpretation explains how to recognise and measure deferred and current income tax assets and liabilities where there is uncertainty over a tax treatment. Management have considered the impact of the interpretation on the Group’s tax asset and liabilities and have not identified any material changes to their recognition. 107 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Principal Accounting Policies of the Consolidated Financial Statements for the year ended 31 July 2020 continued New standards and interpretations not applied The following amendments to standards and interpretations are mandatory for the first time for financial years beginning on or after 1 August 2020 and could be relevant to the preparation of the Group’s future financial statements. COVID-19-related Rent Concessions – Amendments to IFRS 16: As a result of the COVID-19 pandemic, rent concessions have been granted to lessees. Such concessions might take a variety of forms, including payment holidays and deferral of lease payments. In May 2020, the IASB made an amendment to IFRS 16 Leases which provides lessees with an option to treat qualifying rent concessions in the same way as they would if they were not lease modifications. In many cases, this will result in accounting for the concessions as variable lease payments in the period in which they are granted. Definition of Material – Amendments to IAS 1 and IAS 8: The IASB has made amendments to IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors which use a consistent definition of materiality throughout International Financial Reporting Standards and the Conceptual Framework for Financial Reporting, clarify when information is material and incorporate some of the guidance in IAS 1 about immaterial information. In particular, the amendments clarify that the reference to obscuring information addresses situations in which the effect is similar to omitting or misstating that information, and that an entity assesses materiality in the context of the financial statements as a whole. The meaning of “primary users of general purpose financial statements” to whom those financial statements are directed has also been updated, by defining them as “existing and potential investors, lenders and other creditors” that must rely on general purpose financial statements for much of the financial information they need. Revised Conceptual Framework for Financial Reporting: The IASB has issued a revised Conceptual Framework. Key changes include: ― increasing the prominence of stewardship in the objective of financial reporting; ― reinstating prudence as a component of neutrality; ― defining a reporting entity, which may be a legal entity, or a portion of an entity; ― revising the definitions of an asset and a liability; ― removing the probability threshold for recognition and adding guidance on derecognition; ― adding guidance on different measurement bases; and ― stating that profit or loss is the primary performance indicator and that, in principle, income and expenses in other comprehensive income should be recycled where this enhances the relevance or faithful representation of the financial statements. No changes will be made to any of the current accounting standards. However, entities that rely on the Framework in determining their accounting policies for transactions, events or conditions that are not otherwise dealt with under the accounting standards will need to apply the revised Framework from 1 January 2020. These entities will need to consider whether their accounting policies are still appropriate under the revised Framework. Annual improvements 2018–20: The following improvements were finalised in May 2020: ― IFRS 9 Financial Instruments – clarifies which fees should be included in the 10% test for derecognition of financial liabilities. ― IFRS 16 Leases – amendment of illustrative example 13 to remove the illustration of payments from the lessor relating to leasehold improvements, to remove any confusion about the treatment of lease incentives. ― IFRS 1 First-time Adoption of International Financial Reporting Standards – allows entities that have measured their assets and liabilities at carrying amounts recorded in their parent’s books to also measure any cumulative translation differences using the amounts reported by the parent. This amendment will also apply to associates and joint ventures that have taken the same IFRS 1 exemption. These amendments are not yet endorsed by the EU. The IFRSs or IFRIC interpretations that are not yet effective are not expected to have a material impact on the Group for the financial year beginning 1 August 2020. Management will assess the impact on the Group of these standards prior to the effective date of implementation. 108 YouGov Annual Report & Accounts 2020Basis of consolidation The Group financial statements consolidate the Company and all of its subsidiary undertakings (see Note 14) drawn up to 31 July 2020. 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 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. 109 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Principal Accounting Policies of the Consolidated Financial Statements for the year ended 31 July 2020 continued 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. 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. Revenue is recognised net of any Value Added Tax or trade discounts. 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 while Omnibus and Custom Research revenue streams are mainly non-syndicated services. 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. 110 YouGov Annual Report & Accounts 2020Non-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. Separately reported items The Group’s Income Statement separately identifies items that 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. Separately reported items for this financial year are discussed in Note 4. 111 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Principal Accounting Policies of the Consolidated Financial Statements for the year ended 31 July 2020 continued 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. Taxation on the value of realised and unrealised gains on the exercise of share options deductible against current income tax in excess of the amount recognised in the income statement are charged directly to equity. Other 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 and 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. 112 YouGov Annual Report & Accounts 2020Intangible assets separately acquired Consumer panel 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 in accordance with IAS 38 whilst maintenance costs are expensed. The Directors are satisfied that capitalisation of enhancement costs is appropriate under IAS 38. The Group has exclusive control over the data the panel generates and the use of this data is fundamental to the Group’s revenue- generating capabilities. 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. Customer contracts 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. Intangible assets generated internally 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 Amortisation period 3 years not amortised 3 years 113 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Principal Accounting Policies of the Consolidated Financial Statements for the year ended 31 July 2020 continued 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. 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. 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. 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 Amortisation period 3 – 5 years 10 – 11 years 5 – 15 years 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. 114 YouGov Annual Report & Accounts 2020Property, 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 Straight line over 5 years Straight line over 3 years Straight line over 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. Leased assets IFRS 16 Leases replaces IAS 17, under which 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. Once a lease is identified the initial value of the liability and right of use asset must be calculated. The lease liability consists of the present value of the lease payments that are not paid at the commencement date. Future lease payments are discounted using the interest rate implicit in the lease or, If that rate cannot be readily determined, the incremental borrowing rate. Variable lease payments that are tied to an external rate, such as the retail price index, are measured using the rate at the commencement date. The right of use asset comprises the lease liability value plus any lease payments made at or before the commencement date, less any lease incentives received. Initial direct costs incurred and any restoration provisions required under the terms of the lease are also included in the asset value calculation. Subsequently the lease liability balance is reduced to reflect any payments made in the period and increased as interest is accrued on the remaining balance. The right of use asset is depreciated in a straight line over the life of the lease agreement. The depreciation element is recognised within administrative expenses while the interest expense is recognised within finance costs. If modifications to the terms of a lease result in a change to the expected future payments the lease liability is re-measured to reflect the discounted value of the revised payments. The change is recognised as an adjustment to the right of use asset. If the carrying amount of the asset is reduced to zero and there is a further reduction in the measurement of the lease liability, any remaining amount of the re-measurement is recognised in the income statement. The following lease types are exempt from the lease model: i) Leases with a duration of 12 months or under ii) Leases for which the underlying asset is of a low value (under £5,000 in cost) Payments relating to leases falling under either of these categories are recognised as an expense on a straight-line basis over the lease term. IFRS 16 has been applied retrospectively to each prior reporting period presented. The impact of the first-time adoption of this new standard has been shown in Note 27. Sub-leases The Group acts as a lessor in certain instances where premises have been sublet to an external third party. In the case of a short-term lease the Group, as a lessee, accounts for the lease as an operating lease. Otherwise, the sublease is classified by reference to the right of use asset arising from the head lease, rather than by reference to the underlying asset. At the commencement date the Group recognises assets held under finance leases in the statement of financial position and presents them as a receivable at an amount equal to the net investment in the lease. Finance income is then recognised over the lease term, based on a pattern reflecting a constant periodic rate of return on net investment in the lease. 115 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Principal Accounting Policies of the Consolidated Financial Statements for the year ended 31 July 2020 continued 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 administrative 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 administrative 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. 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. 116 YouGov Annual Report & Accounts 2020Cash 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. Exchange differences on the translating and settlement of monetary items other than cash and cash equivalents are included within movement in working capital. Exchange differences on cash and cash equivalents included within finance income and expense are included within exchange movements in cash and cash equivalents. The cash flows included in the financial statements of foreign subsidiaries are translated at average exchange rates for the year with any change in the value of cash and cash equivalents of foreign subsidiaries also being included within exchange movements in cash and cash equivalents. Net exchange differences on the translation of items in foreign subsidiary cash flows eliminated on consolidation are included within other non-cash items. 117 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Principal Accounting Policies of the Consolidated Financial Statements for the year ended 31 July 2020 continued 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, being the date when there is a joint understanding of the terms of the scheme and any personal objectives have been agreed. The fair value 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. Estimated social costs payable are accrued for based on the number of shares expected to vest, the share price at the balance sheet date and local rates of employer’s social tax payable, on the balance sheet date on the exercise of share options. 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 administrative 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 the risk-free rate appropriate to the currency and term of the payment, 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 policies specific to the Parent Company 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. 118 YouGov Annual Report & Accounts 2020Accounting estimates and judgements In the process of applying the Group’s accounting policies the Directors are required to make estimates and judgements in the application of accounting standards 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 23. Variances in any of the inputs could lead to the charge being higher or lower than appropriate. Employer’s social taxes payable on unexercised share options are estimated based on the number of options expected to vest and the YouGov share price and local tax rates at the balance sheet date. Variances in any of the inputs could lead to the charge being higher or lower than estimated. Expected credit loss Expected credit loss is estimated based on past credit loss experience after taking into account changes in market conditions. Variances in any of the inputs could lead to the charge being higher or lower than estimated. Income taxes The Group is subject to income taxes in various jurisdictions. Estimates are 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 20. 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. 119 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Principal Accounting Policies of the Consolidated Financial Statements for the year ended 31 July 2020 continued 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 18. 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 19. Incremental borrowing rates The Group is required to determine appropriate incremental borrowing rates to calculate the financing element of leases under IFRS 16. The estimated rates combine the base rates quoted to the Group by its principal banking providers and the LIBOR rates from the relevant geographies at the time of adoption. Judgements have been made in respect of the following: Capitalisation of panel acquisition costs Panel acquisition costs include, panel points for the welcome survey, payments to third parties introducing panellists and payments to internet search companies. Judgement is required in the determination of the costs that satisfy the IAS 38 criteria for capitalisation as intangible assets. Under IAS 38 it is necessary to demonstrate that the asset is identifiable, that it is under the control of the Group and that it generates future economic benefits. The requirements of IAS 38 are met because the Group has exclusive control over the data the panel generates and only group entities are able to access the panel to utilise it. The panel enables YouGov to rapidly collect data from a variety of demographics which underpins the Group’s revenue generating capabilities. The costs of maintaining the panel are expensed as incurred. Each year the Group considers the panels in each of the countries that we operate to assess which demographic needs development in order to meet the needs of our customers and to provide new products. The demographic and geographical makeup of the panel is constantly evolving and therefore the costs of enhancing the panel are capitalised. When the Group acquires new cohorts of panellists to serve new markets this expenditure is also capitalised. The costs incurred to acquire panel members are directly associated with new joiners to the panel and do not include more general expenditure for promoting products or services to potential customers. 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. 120 YouGov Annual Report & Accounts 2020Notes to the Consolidated Financial Statements for the year ended 31 July 2020 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. 2020 Revenue Recognised over time Recognised at a point in time Total revenue Cost of sales Gross profit Administrative expenses Adjusted operating profit Separately reported items Operating profit Finance income Finance costs Profit before taxation Taxation Profit after taxation Other segment information Depreciation Amortisation 2019 (restated) Note 27 Revenue Recognised over time Recognised at a point in time Total revenue Cost of sales Gross profit Administrative expenses Adjusted operating profit 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 Custom Research £’000 25,749 38,897 64,646 (12,953) 51,693 (39,094) 12,599 – 12,599 Data Products £’000 Data Services £’000 50,485 826 51,311 (4,234) 47,077 (29,095) 17,982 – 17,982 1,109 36,710 37,819 (6,143) 31,676 (24,700) 6,976 – 6,976 Eliminations and unallocated costs £’000 1,099 (2,434) (1,335) (44) (1,379) (14,348) (15,727) (6,630) (22,357) Group £’000 78,442 73,999 152,441 (23,374) 129,067 (107,237) 21,830 (6,630) 15,200 433 (426) 15,207 (5,812) 9,395 670 19 1 521 – – 3,820 10,242 4,491 10,782 Custom Research £’000 19,634 40,366 60,000 (13,569) 46,431 (33,315) 13,116 – 13,116 Data Products £’000 Data Services £’000 40,878 585 41,463 (4,170) 37,293 (23,069) 14,224 – 14,224 660 36,496 37,156 (6,789) 30,367 (22,924) 7,443 – 7,443 Eliminations and unallocated costs £’000 (44) (2,088) (2,132) 322 (1,810) (14,481) (16,291) 1,529 (14,762) 1,276 80 378 263 526 – 2,217 8,466 Group £’000 61,128 75,359 136,487 (24,206) 112,281 (93,789) 18,492 1,529 20,021 255 (869) (52) 19,355 (5,085) 14,270 4,396 8,809 121 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Notes to the Consolidated Financial Statements for the year ended 31 July 2020 continued 1 Segmental analysis continued Supplementary analysis by geography Revenue and adjusted operating profit/(loss) by geography based on the origin of the sale UK US Mainland Europe Middle East Asia Pacific Intra-Group revenues/unallocated costs Group Revenue by geography based on the destination of the customer 2020 External sales Inter-segment sales Total revenue 2019 External sales Inter-segment sales Total revenue UK £’000 43,475 6,022 49,497 34,363 2,050 36,413 US £,000 68,100 4,183 72,283 57,775 2,967 60,742 Mainland Europe £’000 23,361 859 24,220 23,715 2,420 26,135 2020 2019 (restated) Revenue £’000 47,233 64,805 24,339 8,787 12,490 (5,213) 152,441 Middle East £’000 7,445 65 7,510 10,112 445 10,557 Adjusted operating profit/(loss) £’000 15,399 19,009 2,225 1,923 279 (17,005) 21,830 Asia Pacific £’000 10,060 1,999 12,059 10,522 1,966 12,488 Revenue £’000 41,151 56,410 23,855 10,548 11,325 (6,802) 136,487 Intra-Group revenues £’000 – (13,128) (13,128) – (9,848) (9,848) Adjusted operating profit/(loss) £’000 11,736 16,805 2,935 3,258 176 (16,418) 18,492 Group £’000 152,441 – 152,441 136,487 – 136,487 Inter-segment sales are priced on an arm’s-length basis that would be available to unrelated third parties. 122 YouGov Annual Report & Accounts 2020 2 Profit before taxation 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 Fees payable for the audit of the prior year consolidated financial statements Audit related assurance services Tax compliance services Tax advisory services Other advisory services Total auditors’ remuneration Disposals, depreciation and amortisation: Total amortisation of intangible assets Depreciation of property, plant and equipment (Note 12) Depreciation of right of use assets (Note 13) (Profit)/Loss on disposal of intangible assets and property, plant and equipment Operating lease rentals: Plant and machinery Land and buildings Other (income)/expenses: Exchange (gains)/losses Increase/(Decrease) in expected credit loss Share-based payment expenses (Note 23) Charitable donations 3 Staff costs and numbers Wages and salaries Social security costs Share-based payments (Note 23) Other pension costs Acquisition costs treated as staff compensation 2020 £’000 2019 (restated) £’000 260 147 65 25 34 151 32 714 10,782 1,633 2,858 (16) 80 597 (258) 1,517 2,781 59 2020 £’000 61,571 7,389 2,781 1,456 3,663 76,860 286 112 – 17 18 164 – 597 8,809 1,481 2,915 6 39 654 276 (182) 2,401 94 2019 £’000 59,512 6,156 2,401 1,339 2,834 72,242 Included in the above amount are staff costs totalling £7,941,000 (2019: £4,806,000) 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. 123 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Notes to the Consolidated Financial Statements for the year ended 31 July 2020 continued 3 Staff costs and numbers continued The monthly average number of employees including Directors of the Group during the year was as follows: Key management personnel Administration and operations 2020 Number 25 1,050 1,075 2019 Number 32 927 959 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 were as follows: Short-term employee benefits Post-employment benefits Share-based payments Acquisition costs treated as staff compensation 2020 £’000 7,236 109 1,838 2,578 11,761 2019 £’000 5,854 105 2,097 – 8,056 Disclosure of Directors’ remuneration, including share options, are included in the Remuneration Report on pages 77 to 91, which forms part of the financial statements. 4 Separately reported items Impairment of goodwill Restructuring costs Acquisition-related costs Fair value gains 2020 £’000 2,103 – 4,527 – 6,630 2019 £’000 – 146 382 (2,057) (1,529) Impairment of goodwill in the year is in respect of the Nordic business, further details are provided in Note 10. Restructuring costs in the prior year are residual costs 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 £3,663,000 of contingent consideration treated as staff costs in respect of the acquisitions of Galaxy Research Pty Limited, SMG Insight Limited, InConversation Media Limited and Portent.io Limited, a decrease of £84,000 in contingent transaction costs in respect of Portent.io Limited, a £243,000 increase in SMG consideration and a £705,000 reduction in the fair value of the acquired SMG Insight Limited net assets. Acquisition-related costs in the prior year comprise £2,834,000 of contingent consideration treated as staff costs in respect of the acquisitions of Galaxy Research Pty Limited, InConversation Media Limited and Portent.io Limited and £740,000 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. Fair value gains in the prior 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. 124 YouGov Annual Report & Accounts 20205 Finance income and costs Interest receivable from bank deposits Interest receivable from leased assets Foreign exchange gains on cash and intra-Group loans Total finance income Interest payable on bank loans and overdrafts Interest payable on finance leases 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 Total income statement tax charge The tax assessed for the year is higher (2019: 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% (2019: 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 Total income statement tax charge for the year 2020 £’000 2019 (restated) £’000 173 2 258 433 3 246 45 – 294 132 426 2020 £’000 3,450 947 4,397 2,053 (240) (398) 1,415 5,812 2020 £’000 15,207 2,889 1,294 (398) (39) 832 527 707 – 5,812 211 – 44 255 3 304 24 319 650 219 869 2019 (restated) £’000 4,965 (337) 4,628 16 265 176 457 5,085 2019 (restated) £’000 19,456 3,697 1,439 176 (1,007) 743 99 (72) 10 5,085 125 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020 Notes to the Consolidated Financial Statements for the year ended 31 July 2020 continued 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 11 March 2020 it was announced that the corporation tax rate would remain at 19% for the years starting on 1 April 2020 and 2021. 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 16 December 2019, a final dividend in respect of the year ended 31 July 2019 of £4,298,000 (4.0p per share) (2019: £3,167,000 (3.0p per share)) was paid to shareholders. A dividend in respect of the year ended 31 July 2020 of 5.0p per share, amounting to a total dividend of £5,424,000 is to be proposed at the Annual General Meeting on 10 December 2020. 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 potentially dilutive Ordinary Shares. The adjusted earnings per share has been calculated to reflect the underlying profitability of the business by excluding share- based payments and related employer’s social costs, 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: social taxes on share-based payments Add: imputed interest (Note 5) Add: separately reported items (Note 4) Tax effect of the above adjustments and adjusting tax items1 Adjusted profit after taxation attributable to equity holders of the Parent Company 2020 £’000 9,558 2,781 926 132 6,630 (725) 19,302 2019 (restated) £’000 14,869 2,401 183 219 (1,529) (357) 15,786 1 Adjusting tax items in the year included a one-off charge of £410,000 as a result of providing against Nordic tax losses. 126 YouGov Annual Report & Accounts 2020 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 Social taxes on share-based payments Imputed interest Separately reported items Tax effect of the above adjustments and adjusting tax items Adjusted earnings per share Diluted earnings per share Share-based payments Social taxes on share-based payments Imputed interest Separately reported items Tax effect of the above adjustments and adjusting tax items Adjusted diluted earnings per share 2020 2019 (restated) 106,687 5,792 112,479 105,400 7,865 113,265 9.0p 2.6p 0.9p 0.1p 6.2p (0.7p) 18.1p 8.5p 2.5p 0.8p 0.1p 5.9p (0.6p) 17.2p 14.1p 2.3p 0.2p 0.2p (1.5p) (0.3p) 15.0p 13.1p 2.1p 0.2p 0.2p (1.4p) (0.3p) 13.9p 9 Business combinations and disposals Acquisition of Galaxy DP Pty Limited On 11 December 2017, 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 performance-based consideration of AU$1,378,000 (£745,000) was paid in February 2019 and AU$1,545,000 (£811,000) paid in January 2020. The contingent consideration is contingent upon continuing employment and therefore has been treated as staff compensation under IFRS 3. In respect of this, the current year charge of £86,000 (2019: £729,000) has been recognised as a separately reported item. Acquisition of SMG Insight Limited On 22 May 2018, 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 was payable, contingent on EBITDA performance, in three annual instalments, with total consideration being capped at £21m. 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 January 2020 it was agreed that the remaining consideration would be fixed at £13.2m contingent upon continuing employment. £6,588,000 of this amount was paid in January 2020 with a further £6,588,000 payable in May 2021. 127 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Notes to the Consolidated Financial Statements for the year ended 31 July 2020 continued 9 Business combinations and disposals continued The contingent consideration is contingent upon continuing employment and therefore has been treated as staff compensation under IFRS 3. The charge in the year in respect of this was £2,578,000 (2019: £nil). The agreed deferred consideration was higher than the amount previously estimated resulting in an additional charge in the year of £243,000 (2019: £3,192,000 credit). These amounts, along with a £705,000 reduction in the fair value of acquired net assets, have been recognised in the income statement as separately reported items. 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 3. The remaining £620,000 is not contingent upon future employment and the present value of £605,000 is treated as consideration for acquisition. A charge of £465,000 (2019: £433,000) has been recognised in the year in respect of the contingent staff costs and transaction costs of £93,000 were incurred in the prior year. These have also been recognised in the prior year income statement as separately reported items. 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 year Inconvo has contributed £4,000 (2019: £25,000) to Group revenue and reduced Group adjusted operating profit by £779,000 (2019: £417,000). 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 the prior year in respect of this purchase and these have been recognised in the income statement as separately reported items. 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 year Crunch has contributed £441,000 (2019: £113,000) to Group revenue and increased Group adjusted operating profit by £195,000 (2019: £1,658,000 reduction). 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. No additional payments have been made as at 31 July 2020. The total additional payment is forecast to be £3,433,000 equivalent to £3,394,000 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. A charge of £534,000 (2019: £1,672,000) has been recognised in the year in respect of these contingent staff costs. Certain transaction costs are also contingent on EBITDA. The amount forecast to be payable in respect of these costs is forecast to be £120,000, a reduction of £84,000 in the year resulting in a transaction cost credit of £84,000 (2019: £408,000 charge). These amounts have also been recognised in the income statement in the year as separately reported items. 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 year Portent has contributed £628,000 (2019: £138,000) to Group revenue and reduced Group adjusted operating profit by £384,000 (2019: £180,000). 128 YouGov Annual Report & Accounts 202010 Goodwill Carrying amount at 1 August 2018 Additions through business combinations Exchange differences Carrying amount at 31 July 2019 Impairment Exchange differences Carrying amount at 31 July 2020 At 31 July 2020 Cost Accumulated impairment Net book amount US £’000 Nordic £,000 Germany £’000 Middle East £’000 Asia Pacific £’000 SMG £’000 UK £’000 Total £’000 20,385 8,879 11,571 1,675 1,284 8,026 240 52,060 387 1,634 22,406 – (1,600) – 225 9,104 (2,103) (101) – 324 11,895 – (173) – 136 1,811 – (132) – 70 1,354 – (73) 9,831 – 17,857 – – 970 – 1,210 – – 11,188 2,389 65,637 (2,103) (2,079) 20,806 6,900 11,722 1,679 1,281 17,857 1,210 61,455 20,806 9,000 14,176 1,679 1,281 17,857 1,210 66,009 – 20,806 (2,100) 6,900 (2,454) 11,722 – 1,679 – 1,281 – 17,857 – 1,210 (4,554) 61,455 In accordance with IAS 36, the carrying values of goodwill and other intangible assets are reviewed annually for impairment. The 2020 impairment review was undertaken as at 31 July 2020. 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 three years for each CGU based on the budget numbers for the year ending 31 July 2021. The sources of the assumptions used in making the assessment are as follows: ― CGU revenue annual growth rates of 4% to 20%. Growth rates are forecasts based on both internal and external market information; ― margins are based upon past performance; ― terminal growth rates based on management’s estimate of future long-term average growth rates (2.25%); and ― post-tax discount rate of 10% is calculated by adding a small premium to the Group WACC to recognise a single CGU will have riskier cash flows than the overall Group. Annual EBITDA growth rates of 2.25% have been assumed in perpetuity beyond year three. The pre-tax weighted average costs of capital used to discount the future cash flows to their present values are Middle East 10% (2019: 10%), US 13% (2019: 14%), Nordic 13% (2019: 13%), Germany 13% (2019: 15%) and Asia Pacific 12% (2019: 12%), SMG 12% (2019: 12%); UK 12% (2019: 12%). Management has considered reasonable possible changes in the above key assumptions and performed sensitivity analyses under these scenarios. As a result of low year-on-year growth, and reduced future expectations in light of the COVID-19 pandemic, it was determined that the existing valuation of the Nordic CGU could no longer be supported. As such an impairment of £2,103,000 has been recognised against goodwill. A corresponding income statement charge has been recognised in administrative expenses and disclosed as a separately reported item. As at 31 July 2020 the recoverable amount of the Nordic CGU was £5,233,000. If the revenue growth assumption used in the value-in-use calculation for the Nordic CGU had been 2 percentage points lower than management estimates at 31 July 2020 (2% growth instead of 4% growth), the Group would have had to recognise an impairment against the carrying value of the Nordic CGU of £2.3m. In the prior year, there were no reasonably possible changes in any of the key assumptions that would have resulted in an impairment in the Nordic CGU. Sufficient headroom exists in the other CGUs to support the valuation of goodwill. 129 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Notes to the Consolidated Financial Statements for the year ended 31 July 2020 continued Consumer panel £’000 Software and software development £’000 Customer contracts and lists £’000 Patents and trademarks £’000 Product development costs £’000 22,566 (18,092) 4,474 27,355 (21,323) 6,032 7,339 (4,868) 2,471 3,603 (3,331) 272 911 (863) 48 Total £’000 61,774 (48,477) 13,297 48 13,297 4,474 6,032 2,471 3,952 – 10 (3,226) – (3) – 245 5,452 17,184 (11,732) 5,452 667 4,806 2,487 (310) (4,589) (87) 48 13 9,067 32,872 (23,805) 9,067 – – – – – (583) – 37 1,925 5,232 (3,307) 1,925 5,452 9,067 1,925 8,914 – (4,233) – – (310) 9,823 24,420 (14,597) 9,823 685 7,941 (275) (4,858) (864) (31) 11,665 41,931 (30,266) 11,665 – – – – (549) (30) 1,346 4,966 (3,620) 1,346 272 28 – – (11) – – – 4 293 1,389 (1,096) 293 293 35 – (3) – – (3) 322 – – – – – – (48) – – 873 (873) – – – – – – – – – 4,647 4,806 2,497 (3,547) (4,589) (673) – 299 16,737 57,550 (40,813) 16,737 16,737 9,634 7,941 (4,511) (4,858) (1,413) (374) 23,156 73,042 (49,886) 23,156 1,340 (1,018) 322 385 (385) – 11 Other intangible assets At 1 August 2018 Cost Accumulated amortisation Net book amount Year ended 31 July 2019 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 Year ended 31 July 2020 Opening net book amount Additions: Separately acquired Internally developed Amortisation charge: Separately acquired Internally developed Business combinations Exchange differences Closing net book amount At 31 July 2020 Cost Accumulated amortisation Net book amount 130 YouGov Annual Report & Accounts 202012 Property, plant and equipment Freehold property £’000 Leasehold property improvements £’000 Computer equipment £’000 Fixtures and fittings £’000 Motor vehicles £’000 At 1 August 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 Year ended 31 July 2020 Opening net book amount Additions: Separately acquired Disposals Depreciation Exchange differences Closing net book amount At 31 July 2020 Cost Accumulated depreciation Net book amount 1,675 (640) 1,035 1,336 (944) 392 4,322 (3,221) 1,101 1,035 392 1,101 – – – (86) 79 1,028 1,811 (783) 1,028 1,201 – (3) (343) 21 1,268 2,545 (1,277) 1,268 880 5 – (750) 42 1,278 5,195 (3,917) 1,278 1,028 1,268 1,278 – – (88) (71) 869 1,679 (810) 869 159 (20) (385) (16) 1,006 2,413 (1,407) 1,006 859 (10) (833) (57) 1,237 5,636 (4,399) 1,237 1,909 (1,445) 464 464 632 – (3) (284) 11 820 2,421 (1,601) 820 820 21 (14) (309) (6) 512 2,128 (1,616) 512 167 (122) 45 45 – – – (18) 3 30 181 (151) 30 30 28 (31) (18) (2) 7 36 (29) 7 Total £’000 9,409 (6,372) 3,037 3,037 2,713 5 (6) (1,481) 156 4,424 12,153 (7,729) 4,424 4,424 1,067 (75) (1,633) (152) 3,631 11,892 (8,261) 3,631 All property, plant and equipment disclosed above in both the year ended 31 July 2020 and 31 July 2019 are free from restrictions on title. 131 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Notes to the Consolidated Financial Statements for the year ended 31 July 2020 continued 13 Right of use assets At 1 August 2018 (restated) Cost Accumulated depreciation Net book amount Year ended 31 July 2019 Opening net book amount Additions Depreciation Exchange differences Closing net book amount At 31 July 2019 Cost Accumulated depreciation Net book amount Year ended 31 July 2020 Opening net book amount Additions Disposals Depreciation Exchange differences Closing net book amount At 31 July 2020 Cost Accumulated depreciation Net book amount Premises £’000 Computer equipment £’000 Office equipment £’000 Motor vehicles £’000 Total £’000 11,144 (6,025) 5,119 5,119 7,589 (2,710) 192 10,190 16,515 (6,325) 10,190 10,190 1,391 (75) (2,630) (371) 8,505 16,181 (7,676) 8,505 851 (592) 259 259 75 (144) 6 196 934 (738) 196 196 253 – (153) (4) 292 1,122 (830) 292 12 (6) 6 6 149 (38) – 117 161 (44) 117 117 – – (52) – 65 161 (96) 65 62 (26) 36 36 13 (23) – 26 77 (51) 26 26 26 – (23) – 29 71 (42) 29 12,069 (6,649) 5,420 5,420 7,826 (2,915) 198 10,529 17,687 (7,158) 10,529 10,529 1,670 (75) (2,858) (375) 8,891 17,535 (8,644) 8,891 The total expense relating to assets leased on a short-term basis was £597,000 (2019: £654,000). The total expense relating to leases of low value assets was £80,000 (2019: £39,000). 132 YouGov Annual Report & Accounts 202014 Investments (a) Interests in subsidiaries The table below gives details of the Group’s subsidiaries at 31 July 2020. Registered addresses for all subsidiaries can be found in Note 51 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 CoEditor Ltd1 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 LLC2 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 Yougov Turkey Veri Ve Analiz Limited Şirketi 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.2 YouGov s.r.l.2 UK UK UK UK UK UK UK UK US US US US Canada Germany Germany Denmark Sweden Norway Finland U.A.E. Egypt Iraq France Spain Italy Turkey Hong Kong China China Singapore Indonesia Malaysia Thailand Australia Australia India Poland Romania 1 Dissolved on 29 September 2020 2 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% 0% 0% 79.7% 100% 100% 0% 100% 0% 0% 100% 100% 100% 100% 0% 0% 0% 100% 5% 0% 100% 100% 100% 100% 100% 0% 0% 0% 5% 0% 0% 100% 0% 100% 0% 100% 100% Software development Dormant 100% Market research 100% Market research 100% 100% Holding company Software development 79.7% Market research 100% Market research 100% Market research 100% Holding company 100% Market research 100% Market research 100% Market research 100% Market research 100% Market research 100% Market research 100% Market research 100% Market research 100% Market research 100% Market research 100% Dormant 100% Media production 100% Market research 100% Market research 100% Market research 100% Market research 100% Market research 100% Dormant 100% Market research 90% Market research 100% Market research 100% Market research 100% Market research 100% Market research 100% Market research 100% 100% Market research 100% Software development Operations services 100% 133 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Notes to the Consolidated Financial Statements for the year ended 31 July 2020 continued 14 Investments continued (b) Interest in associates Investments in associates comprise: Carrying amount at 1 August Share of net result/(loss) of associates Dividends received from associates Consideration for business combination Interest in associates at 31 July The Group’s share of the revenue and result/(loss) after tax and assets and liabilities of associates is: Revenue Result/(Loss) after tax Non-current assets Current assets Current liabilities Non-current liabilities Net liabilities 15 Trade and other receivables Trade receivables Expected credit loss Net trade receivables Other receivables Prepayments Accrued income 2020 £’000 2019 £’000 – – – – – 191 (52) – (139) – Portent.io Limited 31 July 2020 £’000 31 July 2019 £’000 – – – – – – – 31 July 2020 £’000 22,020 (3,493) 18,527 3,023 3,977 8,712 34,239 24 (52) – – – – – 31 July 2019 £’000 19,235 (2,071) 17,164 4,357 3,482 8,723 33,726 The Directors consider that the carrying amount of trade and other receivables approximate to their fair value. 134 YouGov Annual Report & Accounts 2020 15 Trade and other receivables continued As at 31 July 2020, trade receivables of £15,054,000 (2019: £10,129,000) were overdue. 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 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 Group provision for expected credit loss is as follows: Expected credit loss at 1 August Movement in the year charged/(credited) to the income statement Exchange differences Expected credit loss at 31 July 31 July 2020 £’000 10,072 1,281 593 3,108 15,054 2020 £’000 2,071 1,517 (95) 3,493 31 July 2019 £’000 6,893 2,018 772 446 10,129 2019 £’000 2,176 (182) 77 2,071 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 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 average length of time taken by customers to settle receivables is 48 days (2019: 46 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 (2019: greater than £250,000) represent 20% of trade receivables (2019: 21%). 16 Cash and cash equivalents Cash at bank and in hand Cash and cash equivalents 31 July 2020 £’000 35,309 35,309 31 July 2019 £’000 37,925 37,925 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 31 July 2020 £’000 35,309 35,309 31 July 2019 £’000 37,925 37,925 135 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020 Notes to the Consolidated Financial Statements for the year ended 31 July 2020 continued 17 Trade and other payables Trade payables Accruals Deferred income Other payables 31 July 2020 £’000 3,130 16,268 13,179 5,905 38,482 Included within other payables are £272,000 (2019: £263,000) of contributions due in respect of defined contribution pension schemes. 18 Contingent consideration At 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 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 Contingent staff cost provided during the year Contingent transaction costs Settled during the year Discount unwinding Foreign exchange differences Balance at 31 July 2020 Included within current liabilities Included within non-current liabilities Galaxy DP Pty Limited £’000 SMG Insight Limited £’000 InConversation Media Limited £’000 Portent.io Limited £’000 783 510 273 – – 729 – (745) 8 3 778 778 – 86 – (811) 4 (57) – – – 5,736 899 4,837 7,513 (3,192) – – (3,775) 88 – 6,370 2,013 4,357 2,821 – (6,637) 40 – 2,594 2,594 – – – – 605 – 433 – – 6 – 1,044 – 1,044 465 – (3) 10 – 1,516 – 1,516 – – – – – 1,672 201 – 5 – 1,878 – 1,878 534 (84) – 10 – 2,338 834 1,504 31 July 2019 £’000 2,355 17,050 14,469 6,167 40,041 Total £’000 6,519 1,409 5,110 8,118 (3,192) 2,834 201 (4,520) 107 3 10,070 2,791 7,279 3,906 (84) (7,451) 64 (57) 6,448 3,428 3,020 The value of contingent consideration payable is estimated by applying earn-out multiples as defined in purchase agreements to management forecasts and discounting the resulting amount payable to present value. The impact of variances to these forecasts and the minimum and maximum amounts payable are as follows: Galaxy DP Pty Limited £’000 SMG Insight Limited £’000 InConversation Media Limited £’000 Impact of a 10% increase in management forecasts Impact of a 10% reduction in management forecasts Minimum amount payable Maximum amount payable – – – – – – – 6,588 4 (148) 1 4,000 Portent.io Limited £’000 215 (215) – 19,773 Total £’000 219 (363) 1 30,361 136 YouGov Annual Report & Accounts 202019 Provisions At 1 August 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 Provided during the year Utilised during the year Discount unwinding Foreign exchange differences Balance at 31 July 2020 Included within current liabilities Included within non-current liabilities Panel incentives £’000 Staff gratuity £’000 7,353 3,791 3,562 10,550 (9,248) 110 273 9,038 4,931 4,107 12,716 (10,742) 68 (300) 10,780 6,739 4,041 438 – 438 296 (169) – (49) 516 – 516 58 (17) – 8 565 – 565 Total £’000 7,791 3,791 4,000 10,846 (9,417) 110 224 9,554 4,931 4,623 12,774 (10,759) 68 (292) 11,345 6,739 4,606 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 2020. The provision of £10.8m represents 49% of the maximum potential liability of £21.9m (2019: £9.0m representing 45% of the maximum potential liability of £19.8m). 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, 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 the nature of the termination. The liability of £0.6m at 31 July 2020 (2019: £0.5m) represents the liability that the Group is obliged to pay as at the reporting date weighted against historical rates of resignation and redundancy. 20 Deferred tax assets and liabilities Deferred tax assets 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 Recognised in the income statement Recognised in equity Foreign exchange differences Balance at 31 July 2020 Intangible assets £’000 Property, plant and equipment £’000 Tax losses £’000 Share-based payments £’000 Other timing differences £’000 433 – (175) – 7 265 (54) – – 211 138 – 328 – 23 489 228 – (38) 679 3,616 156 (501) – 136 3,407 (122) – (117) 3,168 3,799 – 145 1,754 – 5,698 (3,465) 1,170 (26) 3,377 1,634 – (401) – 116 1,349 1,594 – 581 3,524 Total £’000 9,620 156 (604) 1,754 282 11,208 (1,819) 1,170 400 10,959 137 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Notes to the Consolidated Financial Statements for the year ended 31 July 2020 continued 20 Deferred tax assets and liabilities continued The deferred tax assets in respect of income tax losses are broken down by jurisdiction as follows: UK Nordic Germany Other 31 July 2020 £’000 94 674 1,683 717 3,168 31 July 2019 £’000 396 1,079 1,788 144 3,407 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 Nordic. There is significant uncertainty around the recoverability of the deferred tax assets in these jurisdictions, therefore tax losses in Asia Pacific of £1,042,000 (2019: £928,000) and Nordic of £410,000 (2019: £nil) have not been recognised. Based on management forecasts and after carrying out sensitivity analysis, the remainder of the deferred tax assets are considered recoverable. Intangible assets £’000 Property, plant and equipment £’000 Other timing differences £’000 1,773 148 (80) 18 1,859 (502) (33) 1,324 – – 33 1 34 11 – 45 355 – (100) 10 265 87 (5) 347 2020 £’000 9,050 – (1,415) 1,170 438 9,243 Total £’000 2,128 148 (147) 29 2,158 (404) (38) 1,716 2019 £’000 7,492 8 (457) 1,754 253 9,050 Deferred tax liabilities Balance at 1 August 2018 Acquired on business combination Recognised in the income statement Foreign exchange differences Balance at 31 July 2019 Recognised in the income statement Foreign exchange differences Balance at 31 July 2020 The net movement on the deferred income tax account is as follows: 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 138 YouGov Annual Report & Accounts 202021 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 the US Dollar, 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: 2020 £’000 Euro 9,661 (2,789) 6,872 – (530) (530) US Dollar 26,668 (7,273) 19,395 – (297) (297) 2019 (restated) £’000 UAE Dirham 1,453 (940) 513 – – – Other currencies 9,219 (5,344) 3,875 – (577) (577) US Dollar 35,709 (8,725) 26,984 – (1,035) (1,035) Euro 7,710 (2,783) 4,927 – (1,000) (1,000) UAE Dirham 1,738 (1,056) 682 – – – Other currencies 9,466 (5,090) 4,376 – (185) (185) Financial assets Financial liabilities Short-term exposure Financial assets Financial liabilities Long-term exposure The effect of UK Sterling strengthening by 10% against our subsidiaries’ functional currencies (US Dollar, Euro, UAE Dirham and other currencies) would have had the following impact upon translation: 2020 £’000 Euro (54) (1,473) US Dollar (736) (5,022) Net result for the year Equity 2019 (restated) £’000 UAE Dirham Other currencies (36) (992) 372 434 US Dollar (1,039) (4,485) Euro (104) (1,321) UAE Dirham (90) (1,162) Other currencies 132 (13) If UK Sterling had weakened by 10% 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. 139 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020 Notes to the Consolidated Financial Statements for the year ended 31 July 2020 continued 21 Risk management objectives and policies continued As at 31 July 2020, the Group’s liabilities have undiscounted contractual maturities, which are summarised below: At 31 July 2020 Contingent consideration Lease liabilities Trade and other payables Current Non-current Within 6 months £’000 958 1,714 9,034 6 to 12 months £’000 6,588 1,577 – 1 to 5 years £’000 4,598 5,329 – Later than 5 years £’000 – 2,431 – This compares to the maturity of the Group’s financial liabilities in the previous reporting period as follows: At 31 July 2019 Contingent consideration Lease liabilities Trade and other payables Current Non-current Within 6 months £’000 953 1,573 8,018 6 to 12 months £’000 2,031 1,737 504 1 to 5 years £’000 12,497 5,006 – Later than 5 years £’000 – 4,196 – 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. 31 July 2020 £’000 31 July 2019 (restated) £’000 35,309 (110,057) (74,748) 37,925 (108,003) (70,078) 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 over the course of the year was £36.6m (2019: £33.5m). 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 are as follows: Trade and other receivables Cash and cash equivalents Trade and other payables Lease liabilities Contingent consideration 140 31 July 2020 31 July 2019 (restated) Book value £’000 30,262 35,309 (25,302) (9,345) (6,448) Fair value £’000 30,262 35,309 (25,302) (9,345) (6,448) Book value £’000 30,244 37,925 (25,571) 11,108 (10,070) Fair value £’000 30,244 37,925 (25,571) 11,108 (10,070) YouGov Annual Report & Accounts 202021 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: a. Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1). b. 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). c. Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3). Liabilities Contingent consideration 31 July 2020 £’000 31 July 2019 £’000 Level 1 £’000 Level 2 £’000 Level 3 £’000 Total £’000 Level 1 £’000 Level 2 £’000 Level 3 £’000 Total £’000 – – 6,448 6,448 – – 10,070 10,070 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 2020 £’000 10,070 – 3,886 (7,451) (57) 6,448 2019 £’000 6,519 8,118 (50) (4,520) 3 10,070 22 Share capital and share premium The Company only has one class of share. Par value of each Ordinary Share is 0.2p (2019: 0.2p). All issued shares are fully paid. At 31 July 2018 and 1 August 2018 Issue of shares At 31 July 2019 and 1 August 2019 Issue of shares At 31 July 2020 Number of shares Share capital £’000 Share premium £’000 105,491,810 218,193 105,710,003 2,766,150 108,476,153 211 – 211 6 217 31,300 45 31,345 35 31,380 Total £’000 31,511 45 31,556 41 31,597 During the year, 2,760,845 shares were issued on the exercise of share options and 5,305 in payment of Non-Executive Directors’ fees. A total of 415,000 shares were repurchased for the purposes of settling share option schemes as they vest. 141 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Notes to the Consolidated Financial Statements for the year ended 31 July 2020 continued 23 Share-based payments The charge in relation to the share-based payments in the year ended 31 July 2020 was £2,781,000 (2019: £2,401,000). 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 2020, 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 page 83. The charge in relation to the LTIP 2009 in the year ended 31 July 2020 was £nil (2019: £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 2020 Number 721,945 (170,023) 551,922 551,922 2019 Number 814,128 (92,183) 721,945 721,945 The weighted average share price at the date LTIP 2009 options were exercised was £6.41. All of the above are nil cost options. Long-Term Incentive Plan 2014 Awards under the LTIP 2014 are made in the form of nil cost options. 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 depends on the Company achieving stretching targets relating to compound growth in adjusted earnings per share (“EPS”) over the five years ending 31 July 2020 and on improvement in its operating margins. Part of the Chief Executive Officer’s award was 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%. All of the above performance conditions were achieved and all of the share option awards vested in November 2019. The maximum number of options that can be granted under this scheme was 6,924,000 and the charge in relation to the LTIP 2014 in the year ended 31 July 2020 was £412,000 (2019: £2,003,000). 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 2020 Number 2019 Number 6,725,407 – (2,910,921) – 3,814,486 3,812,486 6,725,407 – – – 6,725,407 – The weighted average share price at the date LTIP 2014 options were exercised was £5.68. All of the above are nil cost options. Deferred Share Bonus Plan 2014 The 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 2020 was £414,000 (2019: £398,000). 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 142 2020 Number 333,082 98,332 (108,749) (2,505) 320,160 131,042 2019 Number 370,722 99,632 (115,895) (21,377) 333,082 112,180 YouGov Annual Report & Accounts 202023 Share-based payments continued Deferred Share Bonus Plan 2014 continued The weighted average share price at the date DSBP 2014 options were exercised was £5.69. 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: Outstanding at the beginning of the year Granted during the year Exercised during the year Exercisable at the end of the year 2020 £5.700 £0.00 2 years 0.5% 2019 £4.325 £0.00 2 years 0.6% The fair value of options granted during the year determined using the Black Scholes model was £5.64 per option. Long-Term Incentive Plan 2019 During the year the Company introduced the Long-Term Incentive Plan 2019 (“LTIP 2019”) replacing both the Long-Term Incentive Plan 2014 and Deferred Share Bonus Plan 2014. Awards under the LTIP 2019 are made in the form of nil cost options. The maximum total number of shares to be awarded to each participant has been set based on their salary in the year ended 31 July 2019 and the share price at the start of the plan. These awards will be received in three equal tranches in October 2020, 2021 and 2022. Receipt of an award in each of those years will be 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 EPS over the five years ending 31 July 2023 and operating margin targets being met. On 21 November 2019 1,129,393 options were granted in respect of Tranche 1, with an additional grant of 108,045 on 31 July 2020. Tranche 2 and Tranche 3 awards have been communicated to participants and will be granted in the years ending 31 July 2021 and 31 July 2022 respectively. The charge in relation to the LTIP 2019 in the year ended 31 July 2020 was £1,956,000 (2019: £nil). 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 2020 Number – 1,237,438 – (39,454) 1,197,984 – 2019 Number – – – – – – The fair value of the options granted in the year was determined using the Black Scholes model. The fair values and the assumptions used in calculating the fair values of the options are as follows: Share price Exercise price Expected life Dividend yield Fair Value The aggregate profit and loss charge for share-based payments is disclosed in Note 2. Tranche 1 £5.69 £0.00 4.0 years 0.625% £5.58 Tranche 1 additional award £8.00 £0.00 3.2 years 0.5% £7.84 143 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Notes to the Consolidated Financial Statements for the year ended 31 July 2020 continued 24 Capital commitments At 31 July 2020, the Group had no capital commitments (2019: £nil). 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 £539,000 (2019: £652,000) 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. India Opzoomer, the daughter of Non-Executive Director Rosemary Leith, is employed in the Group. Staff costs in the year were £10,000 (2019: £nil). As at 31 July 2020, Rosamund Shakespeare, the wife of Stephan Shakespeare, held 559,404 Ordinary Shares in the Company. Trading between YouGov plc and Group companies is excluded from the related party note as this has been eliminated on consolidation. 144 YouGov Annual Report & Accounts 202027 Impact of new accounting standards This note explains the impact of the adoption of IFRS 16 Leases on the Group’s financial statements. IFRS 16 replaces IAS 17 and is applicable to all reporting periods beginning on or after 1 January 2019. The standard provides a single lessee accounting model, requiring lessees to recognise right of use assets and liabilities for all leases, with some exemptions for short-term leases and leases considered low value. IFRS 16 applies only to tangible assets. Impact on the financial statements The adoption of IFRS 16 from 1 August 2019 resulted in changes in accounting policies and adjustments to the amounts recognised in the financial statements. The impact of the change in lease accounting on the Group’s Consolidated Income Statement and Consolidated Statement of Financial Position for the comparative financial year is disclosed in the tables below. Line items that were not affected by the changes have not been included. The impact on deferred taxation has not been calculated as it is not considered material. Operating profit items Depreciation expense Other administrative expenses Total administrative expenses Other income statement items Finance costs Balance sheet items Right of use assets Lease liabilities due within one year Lease liabilities due after one year Foreign exchange reserve Retained earnings Year to 31 July 2019 as reported £’000 Restatement for IFRS 16 £’000 Year to 31 July 2019 restated £’000 Year to 31 July 2020 £’000 1,481 90,983 92,464 2,915 (3,119) (204) 4,396 87,864 92,260 4,491 109,376 113,867 564 305 869 426 Year to 31 July 2019 as reported £’000 Restatement f or IFRS 16 £’000 Year to 31 July 2019 restated £’000 Year to 31 July 2020 £’000 – – – 20,018 51,507 10,529 (2,891) (8,217) (95) (484) 10,529 (2,891) (8,217) 19,923 51,023 8,891 (2,491) (6,854) 15,145 55,776 The impact on the opening Consolidated Statement of Financial Position as of 1 August 2018 is disclosed in the table below. Line items that were not affected by the changes have not been included. Balance sheet items Right of use assets Lease liabilities due within one year Lease liabilities due after one year Retained earnings 28 Events after the reporting year There have been no events after the end of the reporting year. 31 July 2018 as reported £’000 Restatement for IFRS 16 £’000 1 August 2018 restated £’000 – – – 35,549 5,420 (2,151) (3,652) (383) 5,420 (2,151) (3,652) 35,166 145 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Group Five-Year Financial Summary Revenue Operating profit Adjusted operating profit Adjusted operating profit margin (%) Profit before tax Adjusted profit before tax Basic earnings per share (pence) Adjusted basic earnings per share (pence) Operating cash generation Cash and cash equivalents at end of year Dividend per share (pence) 2020 £’000 152,441 15,200 21,830 14% 15,207 25,677 9.0p 18.1p 38,705 35,309 5.0p 2019 (restated)1,2 £’000 136,487 20,021 18,492 14% 19,355 20,628 14.1p 15.0p 38,419 37,925 4.0p 2018 (restated)2 £’000 116,559 11,758 12,650 11% 11,773 16,311 7.7p 11.5p 23,617 30,621 3.0p 2017 (restated)3 £’000 107,048 7,557 8,045 8% 7,914 9,910 4.4p 6.2p 18,914 23,219 2.0p 2016 (restated)3 £’000 88,202 4,331 5,439 6% 5,526 7,772 3.3p 4.8p 14,139 15,553 1.4p 1 Restated for the adoption of IFRS 16 Leases. 2 Restated for the adoption of IFRS 9 and to include amortisation of intangible assets in adjusted operating profit and adjusted profit before tax. 3 Restated to include amortisation of intangible assets in adjusted operating profit and adjusted profit before tax. 146 YouGov Annual Report & Accounts 2020Parent Company Statement of Financial Position as at 31 July 2020 Assets Non-current assets Intangible assets Property, plant and equipment Right of use assets 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 Lease liabilities Total current liabilities Net current assets Non-current liabilities Provisions Contingent consideration Lease liabilities 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 (restated) Profit for the year Other changes in retained earnings Retained earnings as at 31 July Total equity Note 2020 £’000 2019 (restated) £’000 2018 (restated) £’000 33 34 35 36 42 37 38 39 40 41 41 40 42 44 44 2,592 1,499 5,798 55,130 – 4,208 69,227 69,978 9,289 79,267 148,494 48,629 2,477 3,428 2,739 826 58,099 21,168 2,119 3,020 5,243 43 10,425 68,524 79,970 217 31,380 9,239 35,965 6,219 (3,050) 39,134 79,970 2,065 1,869 6,544 61,743 – 3,405 75,626 48,397 3,928 52,325 127,951 30,035 1,123 2,013 2,302 816 36,289 16,036 1,684 7,279 5,907 32 14,902 51,191 76,760 211 31,345 9,239 32,200 7,355 (3,590) 35,965 76,760 1,859 410 95 49,893 280 2,743 55,280 35,486 12,136 47,622 102,902 20,993 494 899 1,628 77 24,091 23,531 1,005 4,837 19 – 5,861 29,952 72,950 211 31,300 9,239 24,989 5,022 1,773 32,200 72,950 The notes and accounting policies on pages 150 to 165 form an integral part of these financial statements. The financial statements on pages 147 to 165 were authorised for issue by the Board of Directors on 15 October 2020 and signed on its behalf by: Alex McIntosh Chief Financial Officer YouGov plc Registered no. 03607311 147 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020 Parent Company Statement of Changes in Equity for the year ended 31 July 2020 Balance at 1 August 2018 as reported Change in accounting policy Restated total equity at 1 August 2018 Profit for the year (restated) Total comprehensive income for the year (restated) 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 (restated) Profit for the year Total comprehensive gain 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 2020 Note 49 44 32 45 42 44 44 32 45 42 Share capital £’000 Share premium £’000 Merger reserve £’000 Retained earnings £’000 211 – 211 – – – – – – – – 211 – – 6 – – – – 31,300 – 31,300 – – 45 – – – – 9,239 – 9,239 – – – – – – – 45 31,345 – – 9,239 – – 35 – – – – – – – – – – Total equity £’000 72,951 (1) 72,950 7,355 7,355 45 (3,738) (3,167) 2,487 32,201 (1) 32,200 7,355 7,355 – (3,738) (3,167) 2,487 828 828 (3,590) 35,965 6,219 6,219 (6) – (4,298) 368 (3,545) 76,760 6,219 6,219 35 – (4,298) 368 887 887 6 217 35 31,380 – 9,239 (3,050) 39,134 (3,009) 79,970 The notes and accounting policies on pages 150 to 165 form an integral part of these financial statements. 148 YouGov Annual Report & Accounts 2020Parent Company Statement of Cash Flows for the year ended 31 July 2020 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 Investment in subsidiaries Settlement of deferred 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 Payment of lease liabilities Proceeds from the issue of share capital Purchase of treasury shares Dividends paid to shareholders Net cash generated from/(used in) financing activities Net increase/(decrease) 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 2020 £’000 2019 (restated) £’000 8,469 8,184 (4,684) 520 1,298 1,422 826 7,820 (17,390) 6,819 846 5,946 (434) (1,034) 4,477 (125) (6,639) (238) (1,825) – 31 4,356 (4,440) 12,777 (722) 41 (2,419) (4,298) 5,379 5,416 3,928 (55) 9,289 (2,550) 617 1,106 1,369 708 (2,651) (6,094) 5,965 1,337 7,991 (443) – 7,548 (228) (3,775) (1,986) (6,182) 4,870 350 2,200 (4,751) (3,701) (581) 45 (3,738) (3,167) (11,142) (8,345) 12,136 137 3,928 38 The notes and accounting policies on pages 150 to 165 form an integral part of these financial statements. 149 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020 Notes to the Parent Company Financial Statements for the year ended 31 July 2020 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 specified on page 119. 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. 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 £6,219,000 (2019 restated: £7,354,000). 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 Acquisition costs treated as staff compensation 2020 £’000 16,312 2,940 826 567 3,576 24,221 2019 £’000 14,144 1,806 708 482 2,105 19,245 Pension costs are contributions made on behalf of employees to defined contribution pension schemes. 150 YouGov Annual Report & Accounts 2020 31 Staff costs and numbers continued The monthly average number of employees including Directors of the Company during the year was as follows: Key management personnel Administration and operations 2020 Number 2019 Number 12 252 264 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 2020 £’000 2,807 49 825 3,681 2019 £’000 2,889 54 637 3,580 Disclosure of Directors’ remuneration, including share options, are included in the Remuneration Report on pages 77 to 91. 32 Dividend See Note 7 in the Group financial statements. 33 Intangible assets At 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 and 1 August 2019 Cost Accumulated amortisation Net book amount Year ended 31 July 2020 Opening net book amount Additions Disposals Amortisation charge Closing net book amount At 31 July 2020 Cost Accumulated amortisation Net book amount Consumer panel £’000 Software and software development £’000 Patents and trademarks £’000 Product development costs £’000 4,039 (2,736) 1,303 1,303 1,029 – (913) 1,419 5,068 (3,649) 1,419 1,419 1,580 – (1,049) 1,950 6,648 (4,698) 1,950 3,049 (2,767) 282 282 5,124 (4,822) (193) 391 3,350 (2,959) 391 391 211 – (249) 353 3,561 (3,208) 353 226 – 226 226 29 – – 255 255 – 255 255 34 – – 289 289 – 289 Total £’000 7,844 (5,985) 1,859 1,859 6,182 (4,870) (1,106) 2,065 9,155 (7,090) 2,065 2,065 1,825 – (1,298) 2,592 530 (482) 48 48 – (48) – – 482 (482) – – – – – – 482 (482) – 10,980 (8,388) 2,592 151 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020 Notes to the Parent Company Financial Statements for the year ended 31 July 2020 continued 34 Property, plant and equipment At 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 and 1 August 2019 Cost Accumulated depreciation Net book amount Year ended 31 July 2020 Opening net book amount Additions Depreciation Closing net book amount At 31 July 2020 Cost Accumulated depreciation Net book amount Leasehold property improvements £’000 Computer equipment £’000 Fixtures and fittings £’000 633 (534) 99 99 1,137 (245) 991 1,770 (779) 991 991 35 (243) 783 1,805 (1,022) 783 781 (587) 194 194 248 (157) 285 1,029 (744) 285 285 203 (181) 307 1,232 (925) 307 562 (445) 117 117 601 (125) 593 1,163 (570) 593 593 – (184) 409 1,163 (754) 409 Total £’000 1,976 (1,566) 410 410 1,986 (527) 1,869 3,962 (2,093) 1,869 1,869 238 (608) 1,499 4,200 (2,701) 1,499 All property, plant and equipment disclosed above are free from restrictions on title. No property, plant and equipment either in 2020 or 2019 has been pledged as security against the liabilities of the Company. 152 YouGov Annual Report & Accounts 2020 35 Right of use assets At 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 Year ended 31 July 2020 Opening net book amount Additions Depreciation Closing net book amount At 31 July 2020 Cost Accumulated depreciation Net book amount Premises £’000 Computer equipment £’000 Office equipment £’000 2,269 (2,181) 88 88 7,075 (783) 6,380 9,344 (2,964) 6,380 6,380 69 (740) 5,709 9,413 (3,704) 5,709 – – – – 68 (21) 47 68 (21) 47 47 – (23) 24 68 (44) 44 12 (5) 7 7 149 (39) 117 161 (44) 117 117 – (52) 65 161 (96) 65 Total £’000 2,281 (2,186) 95 95 7,292 (843) 6,544 9,573 (3,029) 6,544 6,544 69 (815) 5,798 9,642 (3,844) 5,798 The total expense relating to assets leased on a short-term basis was £nil (2019: £nil). The total expense relating to leases of low value assets was £3,000 (2019: £5,000). 153 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Notes to the Parent Company Financial Statements for the year ended 31 July 2020 continued 36 Investments in subsidiaries Balance at 1 August Acquired through business combinations Additional investment Impairment of investment Distributions on closure of subsidiaries Share-based payments charge Settlement of fully vested share options Balance at 31 July 2020 £’000 61,743 – 125 (4,039) – 1,956 (4,655) 55,130 2019 £’000 49,893 10,309 – – 82 1,693 (234) 61,743 The value of investments is determined on the basis of the cost to the Company. In accordance with IAS 36, the carrying values of the Company’s investments are reviewed annually for impairment. As a result of low year-on-year growth, and reduced future expectations in light of the COVID-19 pandemic, it was determined that the existing valuation of the Nordic investment could no longer be supported. As such an impairment of £4,039,000 has been recognised against the investment value. A corresponding income statement charge has been recognised. After applying this impairment the remaining Nordic investment is valued at £5,280,000. The details of the Parent Company’s subsidiaries are shown in Note 14 of the consolidated financial statements. 37 Trade and other receivables Trade receivables Provision for trade receivables Net trade receivables Amounts owed by Group undertakings Other receivables Prepayments Accrued income 2020 £’000 8,198 (617) 7,581 58,531 23 1,407 2,436 69,978 2019 £’000 6,605 (855) 5,750 39,363 514 650 2,120 48,397 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. As at 31 July 2020, trade receivables of £6,859,000 (2019: £1,840,000) were overdue. 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 is as follows: 31 July 2020 £’000 6,256 194 113 296 6,859 31 July 2019 £’000 1,535 130 90 85 1,840 Up to three months overdue Three to six months overdue Six months to one year overdue More than one year overdue 154 YouGov Annual Report & Accounts 2020 37 Trade and other receivables continued Movement on the Company provision for impairment of trade receivables is as follows: Provision for receivables impairment at 1 August Movement in the year charged/(credited) to the income statement Provision for receivables impairment at 31 July 2020 £’000 855 (238) 617 2019 £’000 953 (98) 855 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 56 days (2019: 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 balance, defined as greater than £250,000 (2019: greater than £250,000) represent 10% of trade receivables (2019: 9%). 38 Cash and cash equivalents Cash at bank and in hand Cash and cash equivalents 31 July 2020 £’000 9,289 9,289 31 July 2019 £’000 3,928 3,928 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 2020 £’000 1,265 34,757 5,099 4,701 2,807 48,629 31 July 2019 £’000 487 16,392 4,835 4,797 3,524 30,035 Amounts payable to Group undertakings are repayable on demand and non-interest bearing. Included within other payables are £151,000 (2019: £122,000) of contributions due in respect of defined contribution pension schemes. 155 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020 Notes to the Parent Company Financial Statements for the year ended 31 July 2020 continued 40 Contingent consideration At 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 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 2020 Included within current liabilities Included within non-current liabilities 41 Provisions for other liabilities and charges At 1 August 2018 Included within current liabilities Included within non-current liabilities Provided during the year Released during the year Utilised during the year Discount unwind Balance at 31 July 2019 and 1 August 2019 Included within current liabilities Included within non-current liabilities Provided during the year Released during the year Utilised during the year Discount unwind Balance at 31 July 2020 Included within current liabilities Included within non-current liabilities SMG Insight £’000 InConversation Media £’000 Portent.io £’000 5,736 899 4,837 7,513 (3,192) – (3,775) 88 6,370 2,013 4,357 2,821 – – (6,636) 40 2,595 2,595 – – – – 605 – 433 – 6 1,044 – 1,044 465 – – (3) 10 1,516 – 1,516 – – – – – 1,873 – 5 1,878 – 1,878 449 – – – 10 2,337 833 1,504 Total £’000 5,736 899 4,837 8,118 (3,192) 2,306 (3,775) 99 9,292 2,013 7,279 3,735 – – (6,639) 60 6,448 3,428 3,020 Panel incentives £’000 2,633 1,628 1,005 5,140 – (3,787) – 3,986 2,302 1,684 4,768 (92) (3,831) 27 4,858 2,739 2,119 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 2020. The provision of £4.9m represents 63% of the maximum potential liability of £7.7m (2019: £4.0m representing 62% of the maximum potential liability of £6.5m). 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. 156 YouGov Annual Report & Accounts 202042 Deferred tax assets and liabilities Deferred tax assets Balance at 1 August 2018 Recognised in the income statement Recognised in equity Balance at 31 July 2019 and 1 August 2019 Recognised in the income statement Recognised in equity Balance at 31 July 2020 Property, plant and equipment £’000 Tax losses £’000 Other timing differences £’000 50 (50) – – – – – 116 – – 116 (53) – 63 2,577 (116) 828 3,289 (31) 887 4,145 Total £’000 2,743 (166) 828 3,405 (84) 887 4,208 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. Deferred tax liabilities Balance at 1 August 2018 Recognised in the income statement Balance at 31 July 2019 and 1 August 2019 Recognised in the income statement Balance at 31 July 2020 The net movement on the deferred income tax account is as follows: Balance at 1 August Recognised in the income statement Recognised in equity Balance at 31 July Property, plant and equipment £’000 – 32 32 11 43 2020 £’000 3,373 (95) 887 4,165 Total £’000 – 32 32 11 43 2019 £’000 2,743 (198) 828 3,373 157 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Notes to the Parent Company Financial Statements for the year ended 31 July 2020 continued 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 Dollar 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: Financial assets Financial liabilities Short-term exposure Financial assets Financial liabilities Long-term exposure 2020 £’000 US Dollar 2,681 (16) 2,665 – – – Euro 677 – 677 – – – Other currencies 110 (7) 103 – – – 2019 £’000 Euro 3,997 (1,659) 2,338 – – – US Dollar 5,318 (4,866) 452 – – – Other currencies 6,788 (2,740) 4,048 – – – 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 2020, the Group’s liabilities have undiscounted contractual maturities, which are summarised below: 2020 2019 (restated) Current Non-current Current Non-current Within 6 months £’000 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 4,071 – – – 4,011 – – – 413 834 413 4,026 1,218 408 408 3,623 1,621 2,594 3,020 – – 2,013 7,279 – At 31 July Trade and other payables Finance lease payments Contingent consideration The Company has sufficient financial risk management policies in place to ensure that all trade payables are settled within the respective credit period. 158 YouGov Annual Report & Accounts 202043 Risk management objectives and policies continued 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 2020 £’000 9,289 (79,970) (70,681) 31 July 2019 £’000 (restated) 3,928 (76,760) (72,832) 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 £6.6m (2019: £7.9m). 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 31 July 2020 31 July 2019 Book value £’000 Fair value £’000 Book value £’000 67,571 9,289 43,927 (6,448) 67,571 9,289 43,927 (6,448) 47,748 3,928 (25,153) (9,292) Fair value £’000 47,748 3,928 (25,153) (9,292) 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). 31 July 2020 £’000 31 July 2019 £’000 Current Non-current Current Non-current Level 1 £’000 Level 2 £’000 Level 3 £’000 Total £’000 Level 1 £’000 Level 2 £’000 Level 3 £’000 Total £’000 – – 6,448 6,448 – – 9,292 9,292 Liabilities Contingent consideration 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 2020 £’000 9,292 3,735 60 (6,639) 6,448 2019 £’000 5,736 8,117 (786) (3,775) 9,292 159 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020 Notes to the Parent Company Financial Statements for the year ended 31 July 2020 continued 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 2018 Issue of shares At 31 July 2019 and 1 August 2019 Issue of shares At 31 July 2020 Number of shares 105,491,810 218,193 105,710,003 2,766,150 108,476,153 Share capital £’000 211 – 211 6 217 Share premium £’000 31,300 45 31,345 35 31,380 Total £’000 31,511 45 31,556 41 31,597 During the year, 2,760,845 shares were issued on the exercise of share options and 5,305 in payment of Non-Executive Directors’ fees. A total of 415,000 shares were repurchased for the purposes of settling share option schemes as they vest. 45 Share-based payments The charge in relation to the share-based payments in the year ended 31 July 2020 was £826,000 (2019: £708,000). 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 2020, 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 page 83. The charge in relation to the LTIP 2009 in the year ended 31 July 2020 was £nil (2019: £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 2020 Number 374,671 – – (40,256) – 334,415 334,415 2019 Number 456,067 – – (81,396) – 374,671 374,671 The weighted average share price at the date LTIP 2009 options were exercised was £5.77. 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 LTIP 2014 are made in the form of nil cost options. These awards were granted in three equal tranches in October 2015, 2016 and 2017 with an additional award of 396,039 options in April 2019. 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 depends on the Company achieving stretching targets relating to compound growth in adjusted earnings per share (“EPS”) over the five years ending 31 July 2020 and on improvement in its operating margins. Part of the Chief Executive Officer’s award was 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%. All of the above performance conditions were achieved and all of the share option awards vested in November 2019. 160 YouGov Annual Report & Accounts 202045 Share-based payments continued 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 2020 was £116,000 (2019: £562,000). 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 2020 Number 1,928,875 – – (420,000) – 1,508,875 1,508,875 2019 Number 1,928,875 – – – – 1,928,875 – The weighted average share price at the date LTIP 2014 options were exercised was £5.56. All of the above are nil cost options. Deferred Share Bonus Plan 2014 The 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 2020 was £156,000 (2019: £146,000). 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 2020 Number 160,423 – 37,188 (39,112) (183) 158,316 86,135 2019 Number 89,559 54,715 36,268 (15,234) (4,885) 160,423 82,770 The weighted average share price at the date DSBP 2014 options were exercised was £6.54. All of the above are nil cost options. The fair value of options granted during the year, determined using the Black Scholes model, was £5.64 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 23 to the consolidated financial statements. Long-Term Incentive Plan 2019 During the year the Company introduced the Long-Term Incentive Plan 2019 (“LTIP 2019”) replacing both the Long-Term Incentive Plan 2014 and Deferred Share Bonus Plan 2014. Awards under the LTIP 2019 are made in the form of nil cost options. The maximum total number of shares to be awarded to each participant has been set based on their salary in the year ended 31 July 2019 and the share price at the start of the plan. These awards will be received in three equal tranches in October 2020, 2021 and 2022. Receipt of an award in each of those years will be 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 EPS over the five years ending 31 July 2023 and operating margin targets being met. On 21 November 2019 288,811 options were granted in respect of Tranche 1 with an additional grant of 735 on 31 July 2020. Tranche 2 and Tranche 3 awards have been communicated to participants and will be granted in the years ending 31 July 2021 and 31 July 2022 respectively. The charge in relation to the LTIP 2019 in the year ended 31 July 2020 was £554,000 (2019: £nil). 161 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Notes to the Parent Company Financial Statements for the year ended 31 July 2020 continued 45 Share-based payments continued The fair value of options granted during the year, determined using the Black Scholes model was £5.58 per option for Tranche 1 and £7.84 per option for Tranches 2 and 3. The assumptions used in the Black Scholes model in calculating the fair values of the options granted during the year are disclosed in Note 23 to the consolidated financial statements. 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 46 Capital commitments At 31 July 2020, the Company had capital commitments of £nil (2019: £nil). 47 Major non-cash transactions There were no major non-cash transactions in the year or the prior year. 48 Transactions with Directors and other related parties See Note 26 in the Group financial statements. 2020 Number – 289,546 – (8,634) 280,912 – 2019 Number – – – – – – 49 Impact of new accounting standards This note explains the impact of the adoption of IFRS 16 on the Company’s financial statements. IFRS 16 replaces IAS 17 and is applicable to all reporting periods beginning on or after 1 January 2019. The standard provides a single lessee accounting model, requiring lessees to recognise right of use assets and liabilities for all leases, with some exemptions for short-term leases and leases considered low value. IFRS 16 applies only to tangible assets. Impact on the financial statements The adoption of IFRS 16 from 1 August 2019 resulted in changes in accounting policies and adjustments to the amounts recognised in the financial statements. The impact of the change in lease accounting on the Company’s Income Statement and Statement of Financial Position for the comparative financial year is disclosed in the tables below. Line items that were not affected by the changes have not been included. The impact on deferred taxation has not been calculated as it is not considered material. Operating profit items Depreciation expense Other administrative expenses Total administrative expenses Other income statement items Finance costs Year to 31 July 2019 as reported £’000 Restatement for IFRS 16 £’000 Year to 31 July 2019 restated £’000 Year to 31 July 2020 £’000 527 22,114 22,641 842 (829) (13) 1,369 21,218 22,627 1,422 26,385 27,807 452 165 617 520 162 YouGov Annual Report & Accounts 202049 Impact of new accounting standards continued Balance sheet items Right of use assets Lease liabilities due within one year Lease liabilities due after one year Retained earnings 31 July 2019 as reported £’000 Restatement for IFRS 16 £’000 31 July 2019 restated £’000 31 July 2020 £’000 – – – 36,144 6,544 816 5,907 (179) 6,544 816 5,907 35,965 5,798 826 5,243 39,441 The impact on the opening Statement of Financial Position as of 1 August 2018 is disclosed in the table below. Line items that were not affected by the changes have not been included. Balance sheet items Right of use assets Lease liabilities due within one year Lease liabilities due after one year Retained earnings 50 Events after the reporting year There have been no events after the end of the reporting year. 31 July 2018 as reported £’000 Restatement for IFRS 16 £’000 1 August 2018 restated £’000 – – – 32,201 95 76 18 (1) 95 76 18 32,200 163 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Notes to the Parent Company Financial Statements for the year ended 31 July 2020 continued 51 Registered addresses YouGov plc CoEditor Ltd1 Crunch Cloud Analytics Limited Doughty Media 2 Limited2 InConversation Media Limited Margaux Matrix Limited Portent.io Limited SMG Insight Limited YGV Finance Limited3 YouGov Crunch Limited4 YouGov Services Limited YouGovStone Limited5 Consilium Asia Limited Consilium Limited Crunch Cloud Analytics LLC Portent Technologies Inc YouGov America Inc YouGov America Holdings LLC Iridescent Productions Company Limited MMH 2014 Limited PT YouGov Consulting Indonesia YG Research India Private Limited YouGov Data & Analytics GmbH YouGov Deutschland GmbH YouGov Finland OY YouGov France SASU YouGov Galaxy Research Pty Limited YouGov Research Pty Ltd YouGov Italia S.R.L. YouGov M.E. Egypt LLC6 YouGov M.E. FZ LLC YouGov Malaysia Sdn. Bhd. YouGov Nordic and Baltic A/S YouGov Norway AS YouGov Poland Sp. z o.o. YouGov Research Canada Limited YouGov Singapore Pte Ltd YouGov Spain S.L.U. YouGov SRL YouGov Sweden AB YouGov (Thailand) CO. LTD Yougov Turkey Veri Ve Analiz Limited Şirketi YouGov URC (Shanghai) Market Research Co. Ltd. 1 In voluntary strike-off 2 Dissolved 30 July 2019 3 Dissolved 2 July 2019 4 Dissolved 23 October 2018 5 Dissolved 17 September 2019 6 In liquidation 164 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 Suite 101, 999 Main Street, Redwood City, California, United States 240/2/580 Ashtar Compound, Ankawa, Erbil, Kurdistan Region, Iraq 115, George’s Street, 4th Floor, Edinburgh, EH2 4JN, Scotland 62, Setiabudi One 2 Building, 6th Floor Suite 605C, JI HR Rasuna Said Kav 62,12920, Republic of Indonesia, Jakarta, Indonesia Awfis BKC, 1B-1003, 10th floor, Parinee Crescenzo, G Block BKC, Bandra Kurla Complex, Bandra East, Mumbai, Maharashtra 400051, Mumbai, Maharashtra, 400051, India 41, Sebastian-Kneipp-Straße, Frankfurt am Main, 60439, Germany 72 a, Gustav-Heinemann-Ufer, Köln, 50968, Germany 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 KPMG Fides Servizi di Amministrazione S.p.A., Via Vittor Pisani 27, Milan, 20124, Italy 115 Althawra St., Heliopolis, Cairo, Egypt Suites 302 and 303, Cayan Business Center, Barsha Heights, Dubai, UAE 13.03, 13th Floor, Menara Tan & Tan, 207 Jalan Tun Razak, Kuala Lumpur, 50400, Malaysia Klosterstræde 9, 2., Copenhagen K, 1157, Denmark Møllergata 13, 0179, Oslo, Norway 17/9, Ul. Wiejska, Warsaw, 00-480, Poland 400-725. Granville Street, PO Box 10325, Vancouver, BC V7Y 1G5, Canada 1 Finlayson Green, #15-01, 049246, Singapore c/ Latorre & Asociados Consultoría S.L., Suero de Quiñones, 34-36, 1P., Madrid, 28002, Spain 85, str. Buzesti, sector 1, Bucharest, Romania 8B, Erikbergsgatan, Stockholm, 114 30, Sweden 11/1 AIA Sathorn Tower, 17th Floor Unit 1702, South Sathorn Road, Yannawa, Sathorn, Bangkok, 10120, Thailand Estentepe Mahallesi Buyukdere Cad. Levent 199, Apt. No: 199/6, Sisli, Turkey 25F, The Headquarters, No.168 Xizang Middle Road, Shanghai 200001, China YouGov Annual Report & Accounts 202052 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. 165 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Notice 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 Thursday 10 December 2020 at 8.30am to consider and, if thought fit, pass the resolutions below. Resolutions 14 and 15 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 2020, 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 & Accounts for the financial year ended 31 July 2020. 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 5.0p per Ordinary Share to be paid on Monday 14 December 2020 to those shareholders on the register of members as at Friday 4 December 2020. 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 £10,848 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 2021, 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. 166 YouGov Annual Report & Accounts 2020Special Resolutions Resolution 14 – Authority for disapplication of pre-emption rights That, conditional on the passing of Resolution 13 above, 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 £10,848 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 2021, 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 10,847,775 (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; and (d) unless previously renewed, revoked or varied, this authority shall continue for the period ending on the date of the Annual General Meeting in 2021 or 31 December 2021, 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. By order of the Board Tilly Heald Company Secretary 15 October 2020 Registered Office: 50 Featherstone Street London EC1Y 8RT Registered in England and Wales No. 3607311 167 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020 Notice of Annual General Meeting continued 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 15 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 66 to 67. For information regarding how the Board has considered the independence of the Directors, see page 68. 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 £10,848 (representing in accordance with institutional investor guidelines, approximately 5% of the share capital in issue as at 9 October 2020 (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 2021, whichever is the earlier. The Company confirms that no more than 7.5% of the issued share capital will be issued for cash within any rolling three-year period without prior consultation with shareholders. 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 9 October 2020, being the last practicable date prior to the publication of this notice, there were employee share plan options over 4,984,926 Ordinary Shares in the capital of the Company which represent 5% 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 5% of the Company’s issued Ordinary Share capital as at 9 October 2020, being the latest practicable date before publication of this notice. Additional notes 1. Shareholder attendance Due to the current UK Government measures on COVID-19 and the Company’s obligation to protect the health and safety of our shareholders, Directors and employees, our Annual General Meeting (“AGM”) this year will be run as a closed meeting and shareholders will not be permitted to attend in person. The meeting will be restricted to the formal business of the AGM only. Shareholders should not attempt to attend the AGM in person as they will not be admitted. In lieu of an open AGM, the Company offers the opportunity for shareholders to pose questions to the Board which will be responded to directly and made available on the Company’s website following the AGM. Questions should be submitted to the Company by email to investor.relations@yougov.com by no later than 8.30am GMT on Tuesday 8 December 2020. 2. Proxy voting The Board encourages all shareholders to exercise their vote by appointing the Chair of the meeting as their proxy and providing voting instructions in advance of the AGM. Forms of Proxy may alternatively be submitted electronically by logging on to sharegateway.co.uk and using the personal proxy registration code which is printed on the Form of Proxy. For an electronic proxy appointment to be valid, the appointment must be received by Neville Registrars Limited no later than 8.30am GMT on Tuesday 8 December 2020. 168 YouGov Annual Report & Accounts 2020The return of a completed Form of Proxy, other such instrument or any CREST Proxy Instruction (as described below) will not prevent a shareholder attending the AGM and voting in person if he/she wishes to do so. In accordance with Regulation 41 of the Uncertificated Securities Regulations 2001, to be entitled to attend and vote at the AGM (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 GMT on Tuesday 8 December 2020 (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. 3. Electronic voting 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. 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 GMT on Tuesday 8 December 2020. 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. 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. 4. Corporate representatives Given that it will not be possible to attend the AGM in person, corporate shareholders should consider appointing the Chair of the meeting as a proxy or corporate representative to ensure that their votes can be cast in accordance with their wishes. 169 Strategic report Governance report Financial statements Additional informationYouGov Annual Report & Accounts 2020Notes 170 YouGov Annual Report & Accounts 2020171 YouGov Annual Report & Accounts 2020Other Information Corporate website Our corporate website – which includes information on YouGov’s stated strategy, operations, compliance framework and financial results – is a resource for shareholders to keep up to date with our business. Useful pages corporate.yougov.com corporate.yougov.com/investors corporate.yougov.com/compliance corporate.yougov.com/governance Disclaimer The purpose of this Annual Report & Accounts (“this document”) is to provide information to the shareholders of YouGov plc (the “Company”). This document contains forward looking statements which are made by the Directors and Officers in good faith based on information available to them at the time of approval of this report. In particular, all statements that express forecasts, expectations and projections with respect to future matters, including trends in results of operations, margins, growth rates, overall market trends, the impact of interest or exchange rates, anticipated costs savings and synergies and the execution of the Company’s stated strategy, are forward looking statements. By their nature, these statements involve uncertainty since future events and circumstances can cause results and developments to differ materially from those anticipated. The forward looking statements reflect knowledge and information available at the date of preparation of this document and the Company undertakes no obligation to update these forward looking statements. Nothing in this document should be construed as a profit forecast. 172 YouGov Annual Report & Accounts 2020Annual Report produced using Annual Report produced using Consultancy, design and production www.luminous.co.uk Design and production www.luminous.co.uk Y o u G o v A n n u a l R e p o r t & A c c o u n t s 2 0 2 0 YouGov plc 50 Featherstone Street London EC1Y 8RT E: investor.relations@yougov.com W: corporate.yougov.com

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