Tableau Software Inc
Annual Report 2023

Plain-text annual report

Annual Report & Accounts For the year ended 31 December 2023 Decoding the future 1 2023 Highlights Key performance metrics Revenue +12% Operating profit +32% Operating profit margin +4 pts £273.1m (2022: £243.2m) UNDERLYING GROWTH1: +7% £73.7m (2022: £56.0m) 27% (2022: 23%) Adjusted EBITDA1 +28% Adjusted EBITDA margin1 +5 pts Statutory profit before tax (PBT) +8% £110.8m (2022: £86.4m) 41% (2022: 36%) £41.5m (2022: £38.4m) Earnings per share (EPS) 3.8p (2022: 3.8p2) Adjusted EPS1 6.8p (2022: 6.1p2) +11% Total dividends +28% 4.6p (2022: 3.6p2) Invoiced Forward Revenue1 +1% Net bank debt1 -2% £135.2m (2022: £133.5m) UNDERLYING GROWTH1: +4% £243.9m (2022: £249.6m) Note 1: Defined in the explanation of non-IFRS measures on page 27. Note 2: The prior year comparatives for reported EPS, adjusted EPS and dividends have been restated to reflect the impact of the share-split, which completed on 25 July 2023 (see note 12). 1 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements Contents “2023 was in many respects a transformational year for the Group. After successfully completing our long-term Growth Optimisation Plan, a year earlier than planned, we have now established a new growth plan for the next three years.” – Murray Legg, Chair Reliance on this document Our Business Review on pages 2 to 27 has been prepared in accordance with the Strategic Report requirements of section 414C(2)(a) of the Companies Act 2006. The intention of this document is to provide information to shareholders and is not designed to be relied upon by any other party or for any other purpose. Forward-looking statements This document contains forward-looking statements which are made by the Directors 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, the availability of financing, anticipated costs savings and synergies and the execution of GlobalData Plc’s strategy, are forward-looking statements. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. There are a number of factors which could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements, including a number of factors outside of GlobalData Plc’s control. Any forward-looking statements speak only as of the date they are made, and GlobalData Plc gives no undertaking to update forward-looking statements to reflect any changes in its expectations with regard thereto or any changes to events, conditions or circumstances on which any such statement is based. ANNUAL REPORT AND ACCOUNTS 2023 2023 Highlights Strategic Report Our Business Principal Activity Our Business Model Chair’s Statement Chief Executive’s Report Chief Financial Officer’s Report Principal and Emerging Risks and Uncertainties Directors’ Section 172(1) Statement Non-Financial and Sustainability Information Statement Going Concern and Viability Directors’ Report The Directors Corporate Governance Report Environmental, Social and Governance Audit Committee Report Directors’ Remuneration Report Statement of Directors’ Responsibilities Independent Auditor’s Report Financial Statements Group IFC 2 4 5 8 11 16 28 39 43 48 51 52 54 62 67 72 83 84 97 Consolidated Income Statement 98 Consolidated Statement of Comprehensive Income 99 100 Consolidated Statement of Financial Position 101 Consolidated Statement of Changes in Equity 102 Consolidated Statement of Cash Flows 103 Notes to the Consolidated Financial Statements Company Company Statement of Financial Position Company Statement of Changes in Equity Notes to the Company Financial Statements Advisers www.globaldata.com Company No. 03925319 150 151 152 159 1 Strategic Report Financial Highlights • Strong growth in both revenue and profit • The full year impact of acquisitions augmented underlying revenue progression, to report overall revenue growth of 12%. • Robust underlying revenue growth of 7% (2022: 10%) was underpinned by subscriptions which represented 79% of total revenues (2022: 81%). Significant Adjusted EBITDA margin expansion to 41% (2022: 36%). • • Adjusted EBITDA up 28% to £110.8m (2022: £86.4m). • Statutory PBT grew by £3.1m to £41.5m (2022: £38.4m) an 8% increase on prior year. • Operating cash flow grew by 18% to £101.0m (2022: £85.4m). • Invoiced Forward Revenue grew to £135.2m (underlying growth of 4%) at 31 December 2023 (31 December 2022: £133.5m). • Enter FY24 with c.80% visibility (contracted and renewable revenues) of budgeted revenues. • Total dividends grew by 28% to 4.6p (2022: 3.6p restated1). Operational Highlights • Completed our Growth Optimisation Plan a year earlier than expected via four key pillars: • Customer Obsession, World-Class Product, Sales Excellence and Operational Agility • In December, launched our new Growth Transformation Plan 2024-2026, continuing to use the same four pillar framework • Transformational growth initiatives set GlobalData up for future success: • Three customer focused divisions from FY24: Healthcare, Consumer and Technology. • Accelerate our investment in Artificial Intelligence capability and make Artificial Intelligence central to our strategy and operations. Invest in Sales global headcount. Invest in people, culture and talent. Invest in M&A capability and execution. • • • • Announced a minority investment by Inflexion Private Equity Partners LLP (‘Inflexion’) for a 40% stake in our Healthcare division, with anticipated completion in Q2 2024 • 40% stake for expected net proceeds of £434m, valuing our Healthcare division at £1.115bn. • Healthcare represents ~38% of Group FY23 revenues. • GlobalData retains majority control and will continue to fully consolidate the Healthcare results post completion. Transformational transaction that provides flexibility for value-creating M&A. • 2 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements Current Trading and Outlook • Entering the new financial year from a position of strength in terms of revenue visibility and balance sheet. • Initiatives to deliver accelerated growth – uncertainty driving demand for our ‘gold standard’ data, delivered through our One Platform. • Continued focused approach to cost management and capital discipline, including mitigating the impact of inflation through advancements in technology and efficiency savings, whilst ensuring the business remains appropriately invested for sustainable growth and systematic M&A activity. • Clear financial targets for FY24 and beyond: • Steadily progressing to 45% Adjusted EBITDA margin over the course of the plan period and reinvesting into the Growth Transformation Plan; targeting high single to double-digit organic revenue growth. • Platform in place to accelerate inorganic growth opportunities across our three • customer-focused divisions. Target £500m of revenue by the end of 2026, through a combination of organic growth and M&A. Note 1: The prior year comparatives for reported EPS, adjusted EPS and dividends have been restated to reflect the impact of the share-split, which completed on 25 July 2023 (see note 12). ANNUAL REPORT AND ACCOUNTS 2023 3 Strategic Report / Directors’ Report / Auditor’s Report / Financial StatementsSTRATEGIC REPORT Our Business Principal Activity The principal activity of GlobalData Plc and its subsidiaries (‘the Group’) is to provide business information in the form of high-quality proprietary data, analytics, and insights to clients in multiple sectors. Our Mission To help our clients to decode the future, make better decisions, and reach more customers. Our Vision To be the leading data, analytics, and insights platform for the world’s largest industries. 20 industry sector coverage 4,800+ clients A snapshot of our Group as at 31 December 2023 3,532 employees worldwide 4 Our Business Model The Group provides services across a breadth of industry markets and functions, on a global scale on One Platform. We have a clear philosophy of owning our own data and intellectual property, and seek to be a long-term, strategic partner to our clients, by serving their critical activities with a differentiated, ‘gold standard’ offering. The solutions we provide are centred around highly proprietary data and are embedded into our customers’ workflows, which drives high customer retention. The Group benefits from significant operating leverage due to a ‘build once, sell multiple times’ business model, which drives significant margin expansion. The visible and recurring revenue base creates a resilient business model, with subscriptions making up approximately 80% of revenue. The balance of our revenue is made up of ancillary services such as bespoke consulting, single copy reports and events, all of which harness our core assets. GlobalData’s client base is globally diversified, which reflects our globally relevant data assets and gives the Group significant market opportunity. The Group assesses potential M&A targets and looks for the same business model fundamentals in its targets, which enables greater alignment and integration opportunities. Our clients typically subscribe for 12 months’ access. This approach drives the following business model attributes: Recurring revenue Highly recurring subscription revenue, with high retention and revenue visibility. Scalable and defensible position Large, diversified opportunities with attractive tailwinds, strong competitive moat and an agile, scalable company with One Platform. High incremental margins Significant operating leverage due to “build once, sell multiple times” model, and a largely fixed cost base. Strong cash flow generation Low capital requirements and mostly advance customer payments support high cash flow conversion, working capital benefits and capacity for reinvestment. ANNUAL REPORT AND ACCOUNTS 2023 5 Strategic Report / Directors’ Report / Auditor’s Report / Financial StatementsSTRATEGIC REPORT Our Business (continued) Capital Allocation Our objective is to achieve long-term compounding growth and maximise shareholder returns. The Group looks at resources to deliver growth whilst also maintaining a focus on profitability. GROWING OUR REVENUE – Ambition for +10% annual growth Volume Renewal Value Renewal New Logo M&A INCREASING OUR PROFITABILITY – Maintaining Adj. EBITDA Margin +40% Cost Discipline Scalable Model Technology Investment Process Optimisation REINVEST AND RETURN CAPTIAL Reinvestment Acquisitions Dividends/Share buy-backs INVESTING IN GROWTH CAPITAL RETURN Reinvestment Acquisitions Dividends Share Purchase The cash generative and high margin nature of our business provides good optionality on capital allocation. As a Board, we feel committing to a progressive dividend policy demonstrates good financial discipline and careful stewardship. The Company has a policy to try and limit the dilution of its existing shareholders created via the Group’s Long-Term Incentive Plans. As at 31 December 2023, the Group had 50.6m options in issue and 37.9m shares held in treasury within the Group’s Employee Benefit Trust. The Company may, from time to time, use excess cash (after investment and dividend), to purchase shares into treasury (within the authorised annual limits). The Group benefits from significant operating leverage due to stable fixed costs and a lower variable cost model that generates long-term margin expansion in an accelerating revenue growth environment. We have a dynamic cost base, which is largely people focused, and has continued innovation and investment embedded. This agility allows us to direct our resources to focus on underlying growth. We have a low capital intensity model: capital spend typically represents 1% - 1.5% of revenue (2023: 1.5%, 2022: 1.1%). M&A is a significant growth strategy for our business. Our scalable One Platform infrastructure enables us to efficiently integrate new datasets and content capabilities into our existing vertical offerings or expand our breadth into new vertical markets, enabling the Group to realise synergies and value. Our management team has extensive experience of acquiring and integrating assets and we currently have an active pipeline of businesses that we are assessing and the firepower to execute. We have an ambition of increasing our scale, through M&A, by adding +10% of revenue each year through new acquisitions. The Group uses free-cash flow and debt to fund acquisitions and purchase shares for the Employee Benefit Trust and targets an operating leverage of two to three times net leverage, being the multiple of Adjusted EBITDA (including the pre-acquisition results of recent acquisitions) compared to net bank debt. 6 Our Purpose – Why do we exist? In an increasingly fast-moving, complex and uncertain world, it’s becoming more important for businesses and professionals to: • successfully predict and navigate the future; • make the right business decisions, at the right time; and Customer Obsession • • Develop a trusted, global brand synonymous with delivering exceptional customer value and service; Develop a global community of engaged industry professionals; and • effectively find, win, and retain customers. We want to help our clients to decode the future, make better decisions, and reach more customers. We believe Information and Technology are forces for good. One Platform GlobalData’s One Platform model is the foundation of our strategic advantage and is the result of years of continuous capital investment, targeted acquisitions, and organic development. Our unified model governs everything we do, from how we develop and manage our products to our approach to sales and customer success, as well as supporting business operations. At its core, this approach integrates our entire universe of unique data, expert analysis, and innovative solutions into One Platform, providing easy access to a complete and comparable view of the world’s largest industries. As a result of our unified model, we can respond rapidly to changing customer needs and market opportunities, and continuously manage and develop products quickly, at scale, with minimal capital investment, as well as integrate acquisitions quickly and unlock synergies. Growth Optimisation Plan We launched our Growth Optimisation Plan in 2020, focussing on four key pillars: Customer Obsession, World-Class Product, Sales Excellence and Operational Agility. • Maintain a customer-centric culture that informs our strategy, operating model, and business decisions. World-Class Product • • • Develop an integrated suite of winning propositions with clear competitive differentiation; Provide “must-have” capabilities that are integral to our clients and daily lives of professionals; and Consistently lead the market in commercialising new product development and innovation. Sales Excellence • • • Consistently deliver best-in-class sales productivity through targeted campaigns and tailored sales enablement; Provide new salespeople with the structured on-boarding support required to accelerate “time-to-target”; and Invest in the technology, people, and processes required to deliver exceptional experiences across the customer journey. Operational Agility • • • Use our unified operating model and One Platform to create an integrated portfolio greater than the sum of its parts; Ensure we have the organisational structure, capabilities (e.g. people, process, technology), and high-performance culture to execute; and Provide effective portfolio-wide planning, business insight and performance reporting, and governance. We achieved the objectives of the Growth Optimisation Plan as we exited 2023, and launched our new Growth Transformation Plan on 24 January 2024 which focuses on how we accelerate those key initiatives of the four pillars. 7 ANNUAL REPORT AND ACCOUNTS 2023Strategic Report / Directors’ Report / Auditor’s Report / Financial StatementsSTRATEGIC REPORT Chair’s Statement “At GlobalData, we are focused on our growth being both scalable and sustainable. We believe that there is a significant opportunity in terms of Total Addressable Market (c.£20b) and we have set out the Growth Transformation Plan as a strong framework to guide and measure our progress against that opportunity.” – Murray Legg, Chair 8 8 Murray Legg, Chair 2023 was in many respects a transformational year for the Group. After successfully completing our long-term Growth Optimisation Plan, a year earlier than planned, we have now established a new growth plan for the next three years. We launched the Growth Transformation Plan in January 2024. This is the culmination of our desire to build upon the strong work that we have performed to date and our drive to accelerate implementation of key initiatives such as: getting closer to our clients, putting Artificial Intelligence at the centre of how we operate and investing in accretive M&A. We will be speeding up the way in which we implement growth initiatives to meet our ambitions. I am confident that the Growth Transformation Plan framework and the re-organisation of our business into three customer focused divisions will help drive GlobalData towards its ambition of achieving annual high single to double-digit organic revenue growth. Alongside our FY24 re-organisation into three customer focused divisions, we announced (on 21 December 2023) a minority investment by Inflexion for a 40% stake in our Healthcare division, expected to complete in Q2 2024. Healthcare accounts for approximately 38% of the Group revenue. The deal highlights the significant value in our business model, underpinned by the quality of our mission critical data and the importance our clients place on ‘must-have data’. The transaction, for net proceeds of £434m, valued the Healthcare business at £1.115bn representing an enterprise value/ EBITDA multiple of 22x (12 months to June 2023). Completion of the transaction will transform the Group’s balance sheet by repaying gross debt of £285m (£265m term loan and £20m RCF drawdown in January 2024) and leaving approximately £150m net cash. This will give the Group significant firepower for acquisitions as well as opportunities to buy back shares. We look forward to welcoming Inflexion as investors and to pursuing growth opportunities with them within the Healthcare division. Sustainable Growth At GlobalData, we are focused on our growth being both scalable and sustainable. We believe that there is a significant opportunity in terms of Total Addressable Market (c.£20b) and we have set out the Growth Transformation Plan as a strong framework to guide and measure our progress against that opportunity. As a Board we continue to monitor the KPIs of the business and assess progress. We particularly focus on the volume renewal rates of the business, which we see as a key guide to both our data quality and our customer focus. We are pleased with the progress that we have made over the past four years, but still see a significant opportunity to increase our current rate of 84% (>£20k clients) to our ambition of at least 90%. We continue to improve and evolve our climate-related governance and reporting efforts, which includes disclosure of our Non-Financial and Sustainability Information Statement on page 43. We await the publication of our target from SBTi and have also increased the prominence of climate in our risk and strategy processes. Our climate discussions will continue in 2024, which will encompass the review, monitoring, and discussion of climate-related financial risks and opportunities as well as wider sustainability matters. The Board continues to place utmost importance on the fact that we have the governance and structures in place to fully support the Executive Directors and Senior Leadership Team to succeed and ultimately maximise shareholder return. The Board acted as sound advisors and offered healthy challenge throughout negotiations on the Healthcare deal with Inflexion. During 2024 we will commence the succession planning process to identify the right candidate to take over my position as Chair, as I approach my ninth anniversary on the Board (in Q1 2025). GlobalData has progressed significantly in that period and the focus on the succession planning will be to leave the Board well equipped to continue the progress that we have made and further support the business on its exciting trajectory. Dividend We are pleased to propose a final dividend of 3.2 pence per share (2022 restated: 2.6 pence), to be paid on 26 April 2024 to shareholders on the register at the close of business on 22 March 2024. The ex-dividend date will be on 21 March 2024. The proposed final dividend increases the total dividend for the year to 4.6 pence per share (2022 restated: 3.6 pence), an increase of 28%. With a strong finish to our Growth Optimisation Plan and clear plans to move forward with our next phase via the new Growth Transformation Plan, we enter 2024 in a strong position and are confident about the outlook ahead. Murray Legg Chair 4 March 2024 ANNUAL REPORT AND ACCOUNTS 2023 9 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements“With a continued strong performance throughout the year, GlobalData successfully delivered its near-term financial target of at least 40% Adjusted EBITDA margin.” – Mike Danson, Chief Executive 10 10 STRATEGIC REPORT Chief Executive’s Report Mike Danson, Chief Executive We said 2023 would be a year of ‘leveraging the platform’, where we intended to capitalise on the multiple levers open to us to create growth. I’m pleased to report that we have done just that and more. Uncertainty continues to drive demand for our mission-critical data. Not only have we invested in scaling our One Platform to make it the best it can be, but we also continue to nurture and bring in talent and expertise to bolster our offering. Out of our 320 datasets, 290 are proprietary and unique to us. This valuable proprietary IP which no one else has is what sets us apart and enables our 4,810 clients, many of whom are large, blue chips to make critical and informed decisions in real time. FY23 Performance With a continued strong performance throughout the year, GlobalData successfully delivered its near-term financial target of at least 40% Adjusted EBITDA margin. The margin progression since FY20 is symptomatic of our largely fixed cost base and high operational gearing, as well as structured integration and synergy realisation in our acquisitions. Adjusted EBITDA grew by 28% to £110.8m (2022: £86.4m) and operating profit grew by 32% to £73.7m (2022: £56.0m). Statutory profit before tax grew by 8% to £41.5m (2022: £38.4m), reflecting operating performance and net finance costs of £32.2m (2022: £17.6m). In FY23 revenue was £273.1m (2022: £243.2m), reflecting growth of 12%, which included 7% underlying growth. Whilst the 7% underlying growth was less than our double-digit target, we remain confident in our key growth levers and are investing in our product and sales resources during FY24 and continue our ambition to target high single to double-digit organic revenue growth over the longer term. Subscription revenue, which represents 79% of total revenue (2022: 81%), grew by 9% and 7% on an underlying basis. We continued to see strong renewal rates across our (>£20k) subscription clients, on a volume basis our renewal rates were 84% (2022: 84%). A slight reduction in price increases and upsell growth1 (which also directly impacted revenue growth), as well as the impact of currency in Q4 2023, meant that there was a small reduction in value renewal rates to 94% (2022: 101%). This is on the back of strong pricing growth through 2022. We enter the new financial year with c.80% revenue visibility for FY24. Securing multi-year contracts remains our key focus. 1. Selling more seats and product to existing customers ANNUAL REPORT AND ACCOUNTS 2023 11 Strategic Report / Directors’ Report / Auditor’s Report / Financial StatementsSTRATEGIC REPORT Chief Executive’s Report (continued) Growth Optimisation Plan Over the last four years, our Growth Optimisation Plan moved the business forward in multiple ways. Executing on our four strategic pillars, we have built a world-class, multi-industry platform mission critical data, analytics and insights across 20 industries that is scalable and is ideally positioned to integrate new datasets and content into our existing vertical offering or expand our breadth into new vertical markets. Through our relentless focus on our key growth areas – Customer Obsession, World Class Product, Sales Excellence and Operational Agility – we have scaled GlobalData to deliver £273.1m of revenues in FY23 and in executing the plan, generated significant value for the Group through focused initiatives and delivery against both organic and inorganic objectives. Revenue on an organic basis grew by CAGR 9% FY20-FY23, with additional revenue from M&A (~£40m) delivering an overall revenue CAGR of 15%. 1) Customer Obsession Through our ongoing focus on customers, we have fostered strong relationships which took our total customer number to 4,810, with growth coming from larger clients (>£20k). We have set a target to increase the volume of renewal rates to more than 90% over the medium term, having delivered 84% in FY2023. With Artificial Intelligence advancements helping to drive customer success, our customer engagement intelligence is helping us to target specific recommendations for clients such as flagging relevant content and customising solutions. Initiatives are constantly underway to ensure our people are engaging with customers as much as possible, to understand customer needs in order to pivot towards a more solutions- based approach. The combination of Artificial Intelligence and human expertise sets us apart from peers. 2) World Class Product Our continued investment in Artificial Intelligence has enhanced our customer proposition, and we are excited about the opportunity to improve usability, driving even greater customer engagement in the years ahead. We have a clear Artificial Intelligence roadmap focused on the four areas of usability, automation, new products and internal processes all of which supported our Growth Optimisation Plan. This year significant expansion of Artificial Intelligence coverage has been underway. The team is focused on continuously improving our products with an ‘AI Hub’ launched in Q4, providing natural language Q&A and dataset access. Artificial 12 Intelligence powered prompt cards have been developed to generate reports in real-time for our clients, giving them timely access to solutions to complex requests improving client user experience and satisfaction. 3) Sales Excellence Our sales teams are focused on pulling key levers for growth with an ambitious target to take our volume renewal rate in our larger clients (>£20k) from 84% to over 90%, through increasing client engagement and enhancing client and user experience. During the year, in addition to selling more seats and product to existing customers, we had a net increase in the number of larger clients (>£20k) to 2,703 (2022: 2,632), a year-on-year increase of 3%. Our value renewal rate stood at 94%. Our Invoiced Forward Revenue position and new business pipeline remain healthy, and with investment in new sales roles, we are well placed to drive forward and deliver on sales excellence. We are increasingly using Artificial Intelligence driven tools across a number of areas to retain existing clients and grow our partnerships as well as win new clients. Actively using Artificial Intelligence tools to monitor the health of our client relationships, as well as to help coach our sales teams, to personalise the selling process and to increase co-ordination across our teams, is producing tangible results. In 2023, having launched the ‘Decoded’ GlobalData newsletter we now have over 750,000 newsletter subscribers. As we become ever more embedded into our clients’ business activities, we continue to see a significant opportunity to add greater value to our existing clients, including via sales synergies in acquired businesses. Our addressable market is substantial. We believe there are more than 125,000 client opportunities, compared to our existing 4,810 customers, with significant latent growth potential in the US and professional services markets. 4) Operational Agility We remain focused in our approach to cost management, resource allocation and capital discipline, whilst also ensuring the business remains appropriately invested for sustainable growth, and strategic M&A activity. We are a highly cash generative business, and our business model remains attractive to credit providers due to our ability to deleverage quickly. This gives us access to capital to fund acquisitions to scale our business. Our growth has been maintained by our continued focus on M&A, with eight acquisitions completed during the plan, and 25 since 2015. As well as our commitment to continuous organic investment in our product, the recent acquisitions of Life Sciences, LMC, MBI and TS Lombard have all added high value data and insights to our platform. The launch of new Themes proposition across all Intelligence Centers significantly improved macro themes coverage, provided by TS Lombard. A transformative deal in our Healthcare business On 21 December 2023, Inflexion Private Equity Partners LLP (‘Inflexion’) exchanged on a transaction to acquire a 40% minority shareholding in GlobalData’s Healthcare division and is expected to generate net proceeds at completion of approximately £434m. The investment by Inflexion, a leading investor in the sector, represents a strong endorsement and provides a meaningful partner to accelerate the Healthcare division’s growth. Whilst the deal underscores the value of GlobalData’s assets and an implied value for our Healthcare division of £1,115m, it will also enable us to: • • • • Increase investment in product development and Artificial Intelligence; Strengthen our balance sheet; Provide additional flexibility to accelerate value-creating M&A across the Group; and Continue investing in our talent development and pipeline. The deal is expected to close by the end of Q2 2024, upon fulfilment of the Conditions Precedent set out within the share options agreement. New Growth Transformation Plan – 2024 to 2026 Having completed our Growth Optimisation Plan earlier than expected, we are now focused on our next growth chapter. Following a detailed review of our growth opportunity, we announced our new Growth Transformation Plan alongside our transformative deal in December, which will significantly expand GlobalData’s scale. This is building on the good foundational work done to date and further accelerating implementation. Building on our success to date, demonstrating resilience in a challenging market environment and with multiple levers for growth, we will be focusing on: • • • • Getting even closer to our customers; Targeting a hugely material organic growth opportunity (a total addressable market of c.£20 billion); Adopting transformational Artificial Intelligence; and Investing in transformational M&A. GLOBALDATA (2024+) GLOBALDATA HEALTHCARE GLOBALDATA CONSUMER GLOBALDATA TECHNOLOGY Underpinned by our four key growth pillars: CUSTOMER OBSESSION WORLD CLASS PRODUCTS SALES EXCELLENCE OPERATIONAL AGILITY 1. CUSTOMER DRIVEN RE-ORG 4. 2024 PRODUCT ENHANCEMENTS 6. ORGANIC VALUE CREATION PLAN 7. M&A PLAN 2. CUSTOMER-FOCUSED SOLUTIONS 5. SIGNIFICANT AI INVESTMENTS 3. STRONGER CLIENT ENGAGEMENT C100 PEOPLE & CULTURE TECHNOLOGY & AI Delivering sustainable growth across our three customer-focused divisions REVENUES C. £100M* REVENUES C. £95M* REVENUES C. £80M* 2023: ORGANIC GROWTH HIGH SINGLE DIGIT 2023: ORGANIC GROWTH HIGH SINGLE DIGIT 2023: ORGANIC GROWTH MID SINGLE DIGIT CURRENT MARGIN EXPECTATIONS >50%** CURRENT MARGIN EXPECTATIONS c. 40%** CURRENT MARGIN EXPECTATIONS >30%** * Based upon 2023 Revenue ** Based upon 2024 Adjusted EBITDA margin expectations ANNUAL REPORT AND ACCOUNTS 2023 13 Strategic Report / Directors’ Report / Auditor’s Report / Financial StatementsSTRATEGIC REPORT Chief Executive’s Report (continued) 1) Customer Obsession remains our number one priority We strive to be the ‘go-to’ strategic partner to our end-markets and deliver exceptional value to our customers. As we seek to elevate our customer-focused approach throughout the Group and drive value-enhancing revenue and margin expansion, we reorganised our structure at the beginning of FY24 to create three new customer-focused business divisions: Healthcare, Consumer and Technology Our market-led divisions have dedicated teams with individual management accountable for delivering against our new plan. Our sales and product teams remain focused on targeting specific end-markets, whilst having access to our Group technology and platform capabilities, plus support from our corporate teams. This reorganisation will be underpinned by the move to a solution-based sales model, where the combination of our Artificial Intelligence capability and proprietary data enables us to provide comprehensive intelligence solutions to our customers more quickly and efficiently. Our realignment around customer solutions will bring new workflow tools and new content sets with enhanced integration, providing the ability to improve the overall usability of our products and customer experience. Ultimately, we will focus on delivering significant increase in client engagement across all teams. Whilst expanding our sales force, we are also going to increase analyst engagement, with a view to take our analyst-client interactions to more than 30,000 in 2024 (vs 20,000 in 2023), and consultant-client interactions to more than 20,000 in 2024 (vs 8,000 in 2023). Looking ahead, we remain laser focused on progressing our key different areas of Customer Obsession. 2) Continued focus on investment in product development and Artificial Intelligence capability As part of our renewed focus on growth acceleration, we will continue to create value through product development. As such, our investment will be evenly spread across core product enhancements and Artificial Intelligence capability. First and foremost, every year we will maintain a step change in the product capabilities that we have, by adding extra functions and capabilities to our offering. We will also be focusing on enhancing and expanding our proprietary data offering, and we are already seeing a 27% increase in proprietary data. 14 Our competitive differentiation is a key value driver, and we continuously invest in new data types. Since 2019, we saw a c.40% growth in high-value statistical data assets. Since 2017, our successful track record of investing in Artificial Intelligence to drive usability, automation, new product development and internal process improvement provides a strong foundation to build on. We have a comprehensive Artificial Intelligence strategy and product roadmap to improve productivity and enhance customer experience. Our Artificial Intelligence driven tool ‘AI Hub’ launched in Q4, is providing natural language Q&A and dataset access to our customers, and has received positive feedback. It also has the potential to accelerate sales growth with new accounts. We are also developing Artificial Intelligence powered prompt cards to generate reports in real-time, reducing analyst time and improving client satisfaction. Underpinning all that, we are looking to improve our data science and Artificial Intelligence teams to deliver the next phase of growth. We are upskilling our workforce with Artificial Intelligence training sessions tailored to functional roles and planning to have 300 Artificial Intelligence experts employed by GlobalData by 2025. Currently, we have around 300 software specialists, of which around 50 are focusing on Artificial Intelligence. 3) Maintaining our sales excellence to drive organic growth In addition to product enhancements, our sales teams are also being set up to capture the significant market opportunity through our organic value creation plan. This will be underpinned by our continuous focus on increasing volume renewal rates to our 90% ambition, with a c.10% contribution to year-on-year sales growth. There are multiple levers we can pull. Focusing on price increases and product improvements, selling more seats as part of our licencing model, product upsell and cross-sell opportunities, and increased new logo sales will help drive success here. We expect new logo wins to deliver c.30% contribution to year-on-year sales growth, and we consider there is headroom for growth in all areas; we have identified around 125,000 prospects, whilst currently we have 4,810 customers. This will be supported by a rigorous focus on execution and performance management, supported by significant investment in expanding our front-line sales teams. We are targeting more than 150 additional salespeople during the Growth Transformation Plan to deliver on our promises. Current Trading and Outlook With c.80% revenue visibility and robust profitability, we enter the new financial year from a position of strength. In the new financial year, we aim to steadily progress our Adjusted EBITDA margin whilst investing into the Growth Transformation Plan to target high single to double-digit organic revenue growth. Our annual revenue target by the end of the 3-year Growth Transformation Plan is to surpass £500m. With our business structure re-organised into three customer- focused divisions at the beginning of 2024 – Healthcare, Consumer and Technology – our platform is in a good place to accelerate organic growth opportunities as well as through strategic M&A. Our recent deal with Inflexion underscores the strength and value of our business and will support our ambitions, providing us with the flexibility and additional funds to continue investing in innovating our product and nurturing our people. With an experienced team, we have the capability and, as we continue to expand our business, we now also have the firepower to accelerate our growth over the next three years and scale our platform. Mike Danson Chief Executive 4 March 2024 4) Maintaining our operational agility through strategic M&A We have a strong track record of highly accretive M&A. The planned investment by Inflexion in our Healthcare business will provide us with the ability and firepower to support strategic, value-enhancing acquisitions across the three business divisions. With an ongoing disciplined approach to cost, the transformational Inflexion deal will take the Group from 2.2x Net Leverage to a Net Cash position of c.£184m. Post- completion, the Group will have a strong balance sheet to fund strategic M&A and additional free cash flow to reinvest in the business. As appropriate, it also retains the flexibility to conduct share buy backs. Our Colleagues Our year of ‘leveraging the platform’ has been very successful and that has been driven by the continued focus and dedication of our growing GlobalData team. Together, we have achieved remarkable milestones and surpassed expectations, completing our Growth Optimisation Plan a year early. As we continue to invest in our people’s development, we turn our attention to the next phase of our growth via our new Growth Transformation Plan – where we will accelerate the speed at which we execute – and expect to celebrate further achievements in 2024 and beyond. By nurturing our team’s skills and expertise, particularly around Artificial Intelligence, our colleagues will undoubtedly play a pivotal role in shaping the future of GlobalData. I would like to take the opportunity to welcome our new colleagues and thank all my GlobalData team for their passion and determination to not only stay ahead of the curve but also ensure that our customers receive unparalleled value. We are significantly investing in our talent development initiatives, led by our new Chief People Officer, Katherine Lunn, who will focus on enhancing the employee proposition. She will also lead on the investment in and recruitment of new Sales specialists and AI experts, both of which are a key part of the Growth Transformation Plan. ANNUAL REPORT AND ACCOUNTS 2023 15 Strategic Report / Directors’ Report / Auditor’s Report / Financial StatementsSTRATEGIC REPORT Chief Financial Officer’s Report Graham Lilley, Chief Financial Officer Revenue Growth Bridge (£m) Revenue, Profitability & Margin (£m/ %) 9 273 17 243 4 300 250 200 150 100 50 0 Revenue 2022 Currency Underlying M&A Revenue 2023 2020 2021 2022 2023 Revenue Adj. EBITDA Margin Volume Renewal Rates % Highly Cash Generative (£m) 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 120.0 100.0 80.0 60.0 40.0 20.0 0.0 2020 2021 2022 2023 2021 2022 2023 280 270 260 250 240 230 220 210 0 86% 84% 82% 80% 78% 76% 74% 72% 70% >£20k >£5k Operating Cash flow Free Cash flow Explanatory notes Revenue Growth Bridge: The chart tracks the movement in revenue from 2020 to 2023, categorised into the following areas: • • • Currency gains – the Group benefitted from currency movements of £3.5m in the year, mainly through movements in the USD to GBP conversion. Underlying – defined as growth in business excluding impact of movement in exchange rates and adjusts for the pre-acquisition results of acquired business. M&A – the acquired revenue, according to the previous 12 months prior to acquisition. Revenue, Profitability & Margin: The chart tracks the revenue, Adjusted EBITDA and Adjusted EBITDA margin from 2020-2023. Volume Renewal Rates: Tracks volume renewal rates 2021-2023 calculated by dividing the total volume of subscription sales closed in the year compared with subscription volume available for renewal. Highly Cash Generative: The chart tracks cash generation from 2020-2023 on both a statutory operating cash flow basis and free cash flow basis. Free cash flow is reconciled on page 17. 16 £m Revenue Operating profit Depreciation Amortisation of acquired intangible assets Amortisation of software Share-based payments charge Costs relating to share-based payments scheme Restructuring and refinancing costs Revaluation (gain)/loss on short- and long-term derivatives Unrealised operating foreign exchange (gain)/loss M&A and contingent consideration costs Adjusted EBITDA1 Adjusted EBITDA margin1 Statutory profit before tax Amortisation of acquired intangible assets Share-based payments charge Costs relating to share-based payments scheme Restructuring and refinancing costs Revaluation (gain)/loss on short- and long-term derivatives Unrealised operating foreign exchange (gain)/loss M&A and contingent consideration costs Revaluation of interest rate swap Adjusted profit before tax1 Adjusted income tax expense1 Adjusted profit after tax1 Cash flow generated from operations Interest paid Income taxes paid Contingent consideration paid Principal elements of lease payments Purchase of intangible and tangible assets Free cash flow1 Operating cash flow conversion %1 Free cash flow conversion %1 Earnings attributable to equity holders (restated2) : Basic earnings per share (pence) Diluted earnings per share (pence) Adjusted basic earnings per share (pence) Adjusted diluted earnings per share (pence) 1. Defined in the explanation of non-IFRS measures on page 27. Year ended 31 December 2023 Year ended 31 December 2022 273.1 73.7 6.2 9.0 1.6 19.4 0.2 1.7 (0.8) (1.5) 1.3 110.8 41% 41.5 9.0 19.4 0.2 1.7 (0.8) (1.5) 1.3 2.8 73.6 (18.5) 55.1 101.0 (23.0) (12.0) (0.2) (5.4) (4.2) 56.2 91% 76% 3.8 3.8 6.8 6.7 243.2 56.0 6.4 9.1 1.0 4.1 0.9 2.5 0.6 1.9 3.9 86.4 36% 38.4 9.1 4.1 0.9 2.5 0.6 1.9 3.9 – 61.4 (12.6) 48.8 85.4 (14.0) (9.5) - (5.9) (2.7) 53.3 99% 87% 3.8 3.7 6.1 5.9 2. The prior year comparatives on basic and diluted earnings per share on both a reported and an adjusted basis have been restated to reflect the impact of the share-split, which completed on 25 July 2023 (see note 12). ANNUAL REPORT AND ACCOUNTS 2023 17 Strategic Report / Directors’ Report / Auditor’s Report / Financial StatementsSTRATEGIC REPORT Chief Financial Officer’s Report (continued) Key Performance Indicators: Financial Key Performance Indicators The financial KPIs detailed below are used, in addition to statutory reporting measures, by the Executive Directors to monitor the Group’s performance and progress. 2023 2022 % reported growth % underlying growth Revenue £273.1m £243.2m +12% +7% Invoiced Forward Revenue Adjusted EBITDA Adjusted EBITDA margin £135.2m £133.5m +1% +4% £110.8m £86.4m +28% +23% 41% 36% +5p.p. +6p.p. Net Bank debt £243.9m £249.6m -2% N/a The platform economics of our business model meant that we continued to see a large flow through of incremental revenue to Adjusted EBITDA without material incremental cost of sale. Over the course of the past four years we have seen material margin improvement in the business, and we are now reporting an Adjusted EBITDA margin in excess of 40%, at 41%. We finished the year with good visibility on future revenues, following another strong year of revenue growth. Invoiced Forward Revenue grew to £135.2m (underlying growth of 4%) at 31 December 2023 (31 December 2022: £133.5m), overall visibility (including contracted and renewable revenues) grew on an underlying basis by 6%. The 6% underlying growth on revenue visibility is based upon the underlying growth in Invoiced Forward Revenue (which excludes the impact of currency) of 4%, plus growth in the visibility we have on 2024 contracted revenue that has not yet been invoiced and the revenue expectation from our renewing clients in 2024 (on the assumption of consistent renewal rates). Operational Key Performance Indicators As at 31 December 2023, the total number of clients (>£5,000 spend) grew 2% to 4,810 (2022: 4,735). Clients >£20,000 All Clients (Above £5,000) Value renewal rate Volume renewal rate Average client value Value renewal rate Volume renewal rate Average client value 2023 2022 Movement 94% 101% -7p.p. 84% 84% - £76,157 £75,100 +1% 94% 99% -5p.p. 80% 78% +2p.p. £48,714 £47,900 +2% Our volume renewal rates improved overall year on year, as we continue to progress towards our stated ambition of volume renewal rates of >90%. We continue to focus on our number one strategic priority of customer obsession and have several initiatives in play, which are all looking to strengthen customer relationships and value derived from our product. Adverse currency impact in the fourth quarter of 2023 (‘Q4’) (GBP strengthening versus USD) meant that our value renewal rates were impacted, as well as some softening on price increases achieved in the second half of the year. We increased the net number of clients by 2% to 4,810, as well as overall average client value increasing to £48,714 (2022: £47,900), also adversely impacted by currency movements in Q4. 18 Financial Review Notes The financial position and performance of the business are reflective of the key financial elements of our business model: visible and recurring revenues, high incremental margins, scalable opportunity and strong cash flows. The Directors believe that Adjusted EBITDA, Adjusted EBITDA margin, Adjusted profit before tax, Adjusted profit after tax and Adjusted earnings per share provide additional useful information on the operational performance of the Group to shareholders, and internally we review the results of the Group using these measures. The term ‘adjusted’ is not a defined term under IFRS and may not therefore be comparable with similarly titled profit measures reported by other companies. It is not intended to be a substitute for, or superior to, IFRS measures of profit. The Directors also believe that reviewing revenue growth on an ‘underlying’ basis gives a useful view on the performance of the business. By reviewing growth excluding the impact of currency and the impact of acquisitions, the Directors can review performance on a like-for-like basis. The term ‘underlying’ is not a defined term under IFRS and may not therefore be comparable with similarly titled measures reported by other companies. Financial Key Performance Indicators (‘KPIs’) The financial KPIs on page 18 are used, in addition to statutory reporting measures, by the Executive Directors to monitor the Group’s performance and progress. These key performance indicators are used to measure progress against strategy, the strength of the business and long-term prospects for our stakeholders. Operational Key Performance Indicators The operational key performance indicators below are used by the Directors to monitor the quality of revenue growth and understand underlying performance. Our operational key performance indicators are: Value Renewal Rate – this is calculated in refence to the total spend of existing clients with subscription contracts in the last twelve months, compared to the total spend of those same clients in the twelve months prior to that. Volume Renewal Rate – this is calculated in refence to the number of existing clients with subscription contracts in the last twelve months, compared to the same number of clients in the twelve months prior to that. Average Client Value – this is calculated using the total value of sales across our clients with subscription contracts and dividing by the number of clients with subscription contracts, which shows an average value. Our operational KPIs reference sales orders rather than revenue and therefore impact both revenue recognised in the year as well as Invoiced Forward Revenue. ANNUAL REPORT AND ACCOUNTS 2023 19 Strategic Report / Directors’ Report / Auditor’s Report / Financial StatementsSTRATEGIC REPORT Chief Financial Officer’s Report (continued) The Group’s Performance this year 1. Revenue Revenue grew by 12% to £273.1m (2022: £243.2m). The majority of the increase came from underlying growth of 7%, aided by 4% benefit from acquisitions and 1% currency benefit. On an underlying basis, subscriptions (representing 79% of revenue (2022: 81%)) grew by 7% underpinned by strong renewal rates, and new business wins. The change in subscription revenue mix compared with 2022 was driven by the impact of acquisitions. 2022-23 Revenue Growth Bridge 9 273 17 243 4 280 270 260 250 240 230 220 210 Revenue 2022 Currency Underlying M&A Revenue 2023 2. Profit before tax Profit before tax for the year grew by £3.1m to £41.5m (2022: £38.4m), which represents stronger operating performance at an Adjusted EBITDA level being offset with increases in other operating costs, namely share-based payments (a year on year increase of £15.3m as a result of changes in the schemes target basis in 2022 giving rise to updated fair values of options) and higher finance costs (+£14.6m), reflecting an increase in average drawn debt in 2023 compared with 2022 and higher interest rates. £m Revenue Operating costs Adjusted EBITDA Depreciation Amortisation of acquired intangible assets Amortisation of software Share-based payments charge Costs relating to share-based payment schemes Refinancing costs Restructuring costs Revaluation gain/(loss) on short and long-term derivatives Unrealised operating foreign exchange gains/(losses) M&A costs Contingent consideration Finance costs Profit before tax 20 Year ended 31 December 2023 Year ended 31 December 2022 Change % 273.1 (162.3) 110.8 (6.2) (9.0) (1.6) (19.4) (0.2) - (1.7) 0.8 1.5 (0.4) (0.9) (32.2) 41.5 243.2 (156.8) 86.4 (6.4) (9.1) (1.0) (4.1) (0.9) (1.9) (0.6) (0.6) (1.9) (2.9) (1.0) (17.6) 38.4 +12% +4% +28% -3% -1% +60% +373% -78% -100% +183% -233% -179% -86% -10% +83% +8% Adjusted EBITDA Adjusted EBITDA increased by 28% to £110.8m (2022: £86.4m). The revenue growth of £29.9m (£17.2m of which was underlying growth) was offset with cost increases of £5.5m (largely representing the full year impact of acquisitions which closed mid-way through 2022), meaning that the overall net improvement to Adjusted EBITDA was £24.4m (incremental margin of 82%). The growth in Adjusted EBITDA is reflective of the operational gearing in our business model and our ability to control what is a relatively fixed cost base. Our overall margin increased by 5 percentage points to 41% (2022: 36%). On an underlying basis, Adjusted EBITDA grew by 23% and Adjusted EBITDA margin increased by 6 percentage points, which is reconciled below. £m Revenue as reported Add back currency movements Add back pre-acquisition revenue of M&A Revenue underlying Adjusted EBITDA as reported Add back currency movements Add back pre-acquisition Adjusted EBITDA of M&A Adjusted EBITDA underlying Adjusted EBITDA margin underlying Adjusting items 2023 273.1 (3.5) - 269.6 110.8 (1.4) - 109.4 41% 2022 243.3 - 9.1 252.4 86.4 - 2.3 88.7 35% Growth 7% 23% 6p.p. Adjusting items grew by £6.3m in total, with some significant individual movements of note: • The share-based payment charge has increased from £4.1m to £19.4m, which is mainly driven by the modification to targets made during 2022 giving rise to a higher fair value per option, plus a net increase in the number of options in issue during 2023. The modification was effective from 30 November 2022 and therefore only had an impact of £0.5m increase in charge in the previous year. • M&A costs reduced year on year, from £2.9m to £0.4m, reflective of no M&A during 2023. • Unrealised foreign exchange gains of £2.3m were recognised during the year, in comparison with a total loss in 2022 of £2.5m. Finance costs Finance costs have increased by 83% to £32.2m (2022: £17.6m) which is inclusive of a non-cash interest charge of £5.1m relating to financial liabilities measured at amortised cost (2022: £2.1m), revaluation loss on interest rate swap of £2.8m (2022: £nil) and IFRS16 leases interest of £1.1m (2022: £1.3m). The cash paid in interest in 2023 was £23.0m (2022: £14.0m) reflecting an increase in average drawn debt in 2023 compared with 2022 and higher interest rates. Finance costs are calculated on drawn debt based upon a margin range of 275-375bps, dependent on Group net leverage, plus SONIA (Sterling Overnight Index Average rate). The Group entered into a swap arrangement on SONIA on 21 October 2022 amid the backdrop of rising rates. The arrangement fixed SONIA at 4.9125% over the remaining life of the term loan. Undrawn debt carries interest at one third of the prevailing margin. Leases Within our operating costs, depreciation in relation to right-of-use assets was £5.1m (2022: £4.7m). Our net finance costs include interest of £1.1m in relation to lease liabilities (2022: £1.3m). 21 ANNUAL REPORT AND ACCOUNTS 2023Strategic Report / Directors’ Report / Auditor’s Report / Financial StatementsSTRATEGIC REPORT Chief Financial Officer’s Report (continued) 3. Foreign exchange impact on results The Group derives around 60% of revenues in currencies other than Sterling, compared with around 40% of its cost base. The impact of currency movements in the year increased revenue by £3.5m, which mainly reflected Sterling weakness against US Dollar (average rate: 2023: 1.23, 2022: 1.25), with £3.3m currency headwind also reflected in Invoiced Forward Revenue. Cost inflation as a result of currency movements largely offset the gain in the year and impacted the results by £2.1m. The full impact of currency on Adjusted EBITDA was an increase of £1.4m. £m As reported Add back currency movements US Dollar Euro Other Constant currency 2022 – as reported Constant currency growth 1. Operating costs excluding adjusting items. 4. Taxation Revenue 273.1 (3.5) (0.3) 0.3 269.6 243.2 11% Operating costs1 (162.3) 3.7 0.1 (1.7) (160.2) (156.8) 2% Adjusted EBITDA Adjusted EBITDA margin Invoiced Forward Revenue 110.8 0.2 (0.2) (1.4) 109.4 86.4 27% 41% 135.2 3.3 (0.1) 0.1 138.5 133.5 4% 41% 36% 5.p.p. The Group’s effective income tax rate (ETR) for the reporting period is 25.8% which exceeds the blended statutory UK income tax rate for the period of 23.5%. The major components increasing the ETR are expenses non-deductible for tax purposes and local withholding taxes chargeable on the distribution of profits from overseas subsidiaries. Key factors that may impact the Group’s future tax charge as a percentage of underlying profits are the mix of profits and losses between the jurisdictions in which the Group operates and the corresponding tax rates in those territories, the impact of non- deductible expenditure and non-taxable income and the utilisation (with a corresponding reduction in cash tax payments) of previously unrecognised deferred tax assets. Reconciliation of statutory income tax charge to adjusted income tax charge is presented below: £m Statutory income tax charge Amortisation of acquired intangible assets Share-based payments charge Costs relating to share-based payment schemes Restructuring and refinancing costs Unrealised operating foreign exchange (gain)/loss Revaluation of interest rate swap Corporate tax rate change Movement in unrecognised deferred tax Adjusted income tax charge 22 Year ended 31 December 2023 Year ended 31 December 2022 10.7 1.9 4.8 - 0.3 (0.6) 0.7 0.4 0.3 18.5 7.9 1.8 0.8 0.2 0.4 0.5 - 1.3 (0.3) 12.6 5. Earnings per share Pursuant to a capital reorganisation exercise undertaken on 25 July 2023, the Company issued nine ordinary shares to increase the number of ordinary shares in issue to 118,303,878 (nominal value £0.000714 per share). All existing ordinary shares were then consolidated, based on 1 consolidated share for every 14 existing ordinary shares, and subdivided, based on 100 new ordinary shares for every 1 consolidated share. Post-reorganisation, there were 845,027,700 ordinary shares in issue (nominal value £0.0001 per share) which were admitted to AIM and commenced dealing on 26 July 2023. The prior year comparatives on basic and diluted earnings per share on both a reported and an adjusted basis have been restated to reflect the impact of the share-split as required by IAS 33: Earnings per share. Basic EPS was 3.8 pence per share (2022 restated: 3.8 pence per share). Fully diluted profit per share was 3.8 pence per share (2022 restated: 3.7 pence per share). Adjusted basic earnings per share grew from 6.1 pence per share to 6.8 pence per share, representing 11% growth. Growth in Adjusted earnings per share (+11%) fell behind the growth in Adjusted EBITDA (+28%) mainly as a result of increased finance charges in the year. Cash interest charges increased by £9.0m (+64%) as well as non-cash finance costs increasing by £5.6m compared with 2022. Non-cash finance charges include non-cash interest relating to financial liabilities measured at amortised cost of £5.1m (2022: 2.1m). The increased charge in the year reflects the change in anticipated cash flows on the term loan (full repayment of the loan is expected upon completion of the investment agreement with Inflexion). 6. Dividends We are pleased to propose a final dividend of 3.2 pence per share (2022 restated: 2.6 pence), to be paid on 26 April 2024 to shareholders on the register at the close of business on 22 March 2024. The ex-dividend date will be on 21 March 2024. The proposed final dividend increases the total dividend for the year to 4.6 pence per share (2022 restated: 3.6 pence), an increase of 28%. 7. Cash generation Cash generated from operations grew by 18% to £101.0m (2022: £85.4m), representing 91% of Adjusted EBITDA (2022: 99%). Capital expenditure was £4.2m in 2023 (2022: £2.7m), including £3.2m on software including assets under construction (2022: £1.7m). Capital expenditure represented 1.5% of revenue (2022: 1.1%). Total cash flows from operating activities were £65.8m (growth of £3.9m from 2022), which represented 89% of operating profit (2022: 111%). During the year, the Group paid out £32.2m in dividends (2022: £23.6m). Short- and long-term borrowings decreased by £19.9m to £263.7m as at 31 December 2023 (2022: £283.6m). 8. Net bank debt: Net bank debt decreased to £243.9m as at 31 December 2023 (2022: £249.6m). The Group defines net bank debt as short- and long-term borrowings (note 20) less cash and cash equivalents. The amount excludes items related to leases. £m Short- and long-term borrowings (note 20) Cash Net bank debt 2023 263.7 (19.8) 243.9 2022 283.6 (34.0) 249.6 23 ANNUAL REPORT AND ACCOUNTS 2023Strategic Report / Directors’ Report / Auditor’s Report / Financial StatementsSTRATEGIC REPORT Chief Financial Officer’s Report (continued) A reconciliation of cash generated from operations, free cash flow and opening and closing net bank debt is set out below. £m Cash flow generated from operations Interest paid Income taxes paid Contingent consideration paid Principal elements of lease payments Purchase of intangible and tangible assets Free cash flow Dividends paid Net M&A Acquisition of own shares Cash received from repayment of loans Net cash flow Opening net bank debt Non-cash movement in borrowings Currency translation Closing net bank debt Last 12 months Adjusted EBITDA Net bank debt leverage 9. Invoiced Forward Revenue Year ended 31 December 2023 Year ended 31 December 2022 101.0 (23.0) (12.0) (0.2) (5.4) (4.2) 56.2 (32.2) - (11.9) - 12.1 (249.6) (5.1) (1.3) (243.9) 110.8 2.2x 85.4 (14.0) (9.5) - (5.9) (2.7) 53.3 (23.6) (33.6) (66.6) 0.9 (69.6) (177.6) (2.1) (0.3) (249.6) 86.4 2.9x Growth +18% +64% +26% +100% -8% +56% +5% +36% -100% -82% -100% -117% +41% +143% +333% -2% +28% -0.7x Invoiced Forward Revenue grew to £135.2m (reported growth of 1% and underlying growth of 4% when the impact of currency is excluded as noted in section 3 of this financial review) at 31 December 2023 (2022: £133.5m). £m Deferred revenue Amounts not due/subscription not started at 31 December Invoiced Forward Revenue 10. Intangible assets 2023 104.6 30.6 135.2 2022 104.0 29.5 133.5 Intangible assets (excluding goodwill) have decreased by £7.3m during the year, from £69.0m as at 31 December 2022 to £61.7m as at 31 December 2023. This movement is driven by an amortisation charge for the year of £10.6m (2022: £10.1m) offset by additions of £3.3m (2022: £1.7m). 11. Trade receivables Net trade receivables as at 31 December 2023 were £54.8m, representing 1% growth compared with the 31 December 2022 balance of £54.4m. 24 Prior year restatement Following a routine Financial Reporting Council (“FRC”) review of the consolidated financial statements for the year ended 31 December 2022, the Group engaged with the FRC which resulted in a restatement of the Consolidated Statement of Cash Flows to present the settlement of the previous term loan and Revolving Credit Facilities (“RCF”), the proceeds from the new term loan and the loan fees incurred on the new facility as a net financing cash inflow of £53.5m within proceeds from borrowings. The amounts in respect of this transaction were previously presented gross. Following a reassessment of the specific cash flow arrangements this restatement reflects that the cash inflow actually occurred on a net basis. The restatement involves a reclassification adjustment to three lines within the Cash flows from financing activities section of the Consolidated Statement of Cash Flows with a £nil net impact on the Group’s Cash flows from financing activities and a £nil net impact on the Group’s financial position and performance. We welcomed the FRC’s review and have set out the details of the restatement in the Accounting Policies of the Consolidated Financial Statements on page 112. Minority investment in the Group’s Healthcare business expected to complete in Q2 2024 On 21 December 2023, the Group announced that it had exchanged on a transaction to sell 40% of the Group’s Healthcare business to Inflexion. We have assessed the accounting implications for the Group arising from the transaction in respect of the year ended 31 December 2023. We have taken into consideration the specific details set out in both the Share Option Agreement and Co- Investment Agreement and concluded that following completion of the transaction, GlobalData Plc will continue to have control of the Healthcare business, the results of which will therefore continue to be fully consolidated into the results of the GlobalData Plc Group and the Group will recognise a non-controlling interest within equity in the Group’s Statement of Financial Position. We have concluded that the completion date will be the point at which the put and call options detailed within the Share Option Agreement are exercised and as at 31 December 2023 this has not taken place. Financial Risk Management The Group’s primary objective in managing foreign currency risk is to protect against the risk that the eventual Sterling net cash flows will be affected by changes in foreign currency exchange rates. To do this, the Group enters into foreign exchange contracts that limit the risk from movements in US Dollar and Euro exchange rates with Sterling. Due to the Group’s operations in India, the Group also enters into foreign exchange contracts that limit the risk from movements in US Dollars with the Indian Rupee exchange rate. While commercially and from a cash flow perspective this hedges the Group’s currency exposures, the Group elects not to apply hedge accounting and accordingly any movements in the fair value of the foreign exchange contracts are recognised in the income statement. As a data and analytics company, cross border tariffs have a limited impact on our business. However, the Group continues to observe ongoing OECD initiatives and frameworks with respect to the challenges arising from the taxation of the digital economy. In particular, the introduction of Pillar One (determining where tax should be paid and on what basis) and Pillar Two (the design of a system that ensures multinational enterprises pay a minimum level of tax) is being monitored, however as the application thresholds are aimed at the very largest companies, the rules are unlikely to impact the Group. Interest Rate Risk Interest rate risk is the impact that fluctuations in market interest rates can have on the value of the Group’s interest-bearing assets and liabilities and on the interest charge recognised in the income statement. On 21 October 2022, GlobalData Plc (the parent company) entered into an interest rate swap arrangement to fix the floating element of the interest rate (based upon SONIA) to a fixed rate of 4.9125%. Up to 21 December 2023, the Group applied hedge accounting in accordance with IFRS9 (Financial Instruments); as such any gains or losses on the interest rate swap, to the extent that they are effective, were recognised directly within other comprehensive income of both the Group and the parent company. Since 21 December 2023, upon exchange of the transaction to sell 40% of the Group’s Healthcare business, it is now the Group’s intention to fully repay the loan upon completion of the investment agreement with Inflexion. Given the hedged items (future interest repayments) are no longer probable or expected to occur, hedge accounting has been discontinued, and as such the cumulative balance held in the cash flow hedge reserve was transferred to the income statement. 25 ANNUAL REPORT AND ACCOUNTS 2023Strategic Report / Directors’ Report / Auditor’s Report / Financial StatementsSTRATEGIC REPORT Chief Financial Officer’s Report (continued) Liquidity Risk and Going Concern The Group’s approach to managing liquidity risk is to ensure, as far as possible, that it has sufficient liquidity to meet its liabilities as they fall due, with surplus facilities to cope with any unexpected variances in timing of cash flows. The Group meets its day-to- day working capital requirements through free cash flow, being operations-generated cash (with no external financing required). Although the statement of financial position shows net current liabilities (current assets less current liabilities), included in current liabilities is £104.6m of deferred revenue that represents future income earnings. Excluding deferred revenue, the Group has net current assets of £49.8m (2022: £56.4m). Based on cash flow projections, the Group considers the existing financing facilities to be adequate to meet short-term commitments. The Directors have a reasonable expectation that there are no material uncertainties that cast significant doubt about the Group’s ability to continue in operation and meet its liabilities as they fall due for the foreseeable future, being a period of at least 12 months from the date of approval of the financial statements. Accordingly, the Group has prepared the Annual Report and Accounts on a going concern basis. The Directors have prepared a Going Concern and Long-Term Viability statement on page 48, within the Strategic Report. Graham Lilley Chief Financial Officer 4 March 2024 26 Explanation of non-IFRS Measures Financial measure How we define it Why we use it Provides a useful basis to assess the year on year operational business performance. Adjusted diluted EPS Adjusted EBITDA Last 12 months Adjusted EBITDA Adjusted EBITDA margin Adjusted EPS Adjusted income tax expense Adjusted profit before tax Adjusted profit after tax per diluted share (reconciliation between statutory profit and adjusted profit shown on page 17). Diluted share defined as total of basic weighted average number of shares (net of shares held in treasury reserve) and share options in issue at end of period (reconciliation between basic weighted average number of shares and diluted weighted average number of shares in note 12). Earnings before interest, tax, depreciation and amortisation, adjusted to exclude costs associated with acquisitions, restructuring of the Group, share-based payments, impairment, unrealised operating exchange rate movements and the impact of foreign exchange contracts. This is reconciled to the statutory operating profit on page 17. Earnings before interest, tax, depreciation and amortisation, adjusted to exclude costs associated with acquisitions, restructuring of the Group, share-based payments, impairment, unrealised operating exchange rate movements and the impact of foreign exchange contracts in the 12 months preceding the period end date. Adjusted EBITDA as a percentage of revenue. This is calculated on page 17. Adjusted profit after tax per share (reconciliation between statutory profit and adjusted profit shown on page 17). Represents the statutory income tax expense adjusted for the tax effect on adjusting items. In addition, the adjusted income tax expense includes the effect of any tax rate changes. This is reconciled to the statutory income tax charge on page 22. Statutory profit before tax adjusted to exclude amortisation of acquired intangible assets, costs associated with acquisitions, restructuring of the Group, share-based payments, impairment, unrealised operating exchange rate movements, the impact of foreign exchange contracts and revaluation of the interest rate swap. This is reconciled to the statutory profit before tax on page 17. Adjusted profit after tax The sum of adjusted profit before tax and adjusted income tax expense. This is calculated on page 17. Constant currency growth Underlying growth is calculated by excluding the impact of movement in exchange rates. Constant currency growth is reconciled to reported growth on page 22 for revenue, operating costs, Adjusted EBITDA, Adjusted EBITDA margin and Invoiced forward revenue. To give the reader an idea of the growth of the business without the impact of foreign exchange fluctuations, which may add to the transparency and understanding of the results. Free cash flow Cash flow generated from operations less interest paid, income taxes paid, contingent consideration paid, principal elements of lease payments and purchase of intangible and tangible assets. This is calculated on page 17. Indicates the extent to which the Group generates cash from Adjusted profits. Free cash flow conversion Invoiced Forward Revenue Net bank debt Net bank debt leverage Net cash flow Free cash flow divided by Adjusted profit before tax. This is calculated on page 17. Invoiced Forward Revenue relates to amounts that are invoiced to clients at the statement of financial position date, which relate to future revenue to be recognised. This is reconciled to deferred revenue on page 24. Short and long-term borrowings (excluding lease liabilities) less cash and cash equivalents. This is reconciled on page 23. Net bank debt calculated as a multiple of the last 12 months Adjusted EBITDA. Detailed calculation is provided on page 24. Acts as an indication of revenue visibility for the forthcoming period. Provides an insight into the debt position of the Group, taking into account current cash resources. Free cash flow less dividends paid, net M&A costs, acquisition of own shares and cash received from repayment of loans. This is calculated on page 24. Indicates the extent to which the Group generates cash from Adjusted profits. Operating cash flow conversion Cash flow generated from operations divided by Adjusted EBITDA. This is calculated on page 17. Indicates the extent to which the Group generates cash from Adjusted EBITDA. Organic growth Organic growth is calculated by excluding the results of acquired businesses. Underlying growth Underlying growth is calculated by excluding the impact of movement in exchange rates and the results of acquired businesses. Underlying revenue is reconciled to reported revenue on page 21. Underlying invoiced forward revenue is reconciled to reported invoiced forward revenue on page 24. Underlying Adjusted EBITDA and underlying Adjusted EBITDA margin are reconciled to reported figures on page 21. The reason we use organic and underlying growth as a metric is to give the reader an idea of the growth of the business without the impact of acquisitions and foreign exchange fluctuations, which may add to the transparency and understanding of the results. This also aids the Directors to review performance on a like- for-like basis. 27 ANNUAL REPORT AND ACCOUNTS 2023Strategic Report / Directors’ Report / Auditor’s Report / Financial StatementsSTRATEGIC REPORT Principal and Emerging Risks and Uncertainties GlobalData’s mission is to help our clients decode the future, make better decisions, and reach more customers. The Group provides services across a breadth of industry markets and functions, on a global scale and on One Platform. We have a clear philosophy of owning our own data and intellectual property, and seek to be a long-term, strategic partner to our clients by serving their critical activities with a differentiated, ‘gold standard’ offering. Our Approach to Risk Management The Group recognises that in order to be successful we are required to take some risks. However, those risks need to be taken in a controlled environment. Our approach is one of responsible risk-taking in line with the principles, culture, tolerance and appetite as directed by the Board. Our approach to risk management is always evolving and has matured, developing over time to better serve the needs of a fast-growing business with risk management awareness becoming embedded across all business operations. The Group’s Risk Management has three key components: • • • A Risk Appetite Statement: This provides a high-level indication of the type and amount of risk GlobalData is willing to take, accept or tolerate in order to achieve its strategic goals and objectives. The Board sets the Group’s risk appetite and reviews it at least annually. In doing so, the Board considers our strategic objectives, the Group’s principal risks and uncertainties and assesses against the long-term viability of the Group. A three lines of defence model on internal controls (first line: functions that own and manage risk; second line: functions that oversee and specialise in compliance; third line: independent assurance): The model details the key internal controls, policies and assurance that the Group has in its risk management processes, as well as those accountable and responsible for their operation. Our risk management processes and tools: These include an Annual Risk Assessment, assessment of internal controls and review of the control environment. The Board also considers the views of the Senior Leadership Team and Audit Committee as part of its systematic review of internal controls. Oversight The below chart reflects the roles and responsibilities within our risk management processes. The Board Audit Committee Senior Leadership Team Review and Confirmation The Board’s responsibility is to review and approve the Group’s strategy and objectives. The Board determines the Group’s appetite for risk and evaluates the Group’s risk management processes and internal control. Challenges and Review Risks are reviewed by the Audit Committee alongside internal controls for ongoing adequancy of operating effectiveness. Ongoing Review, Control and Implementation The Senior Leadership Team are responsible for day-to- day ownership of risk management and the design and implementation of internal controls. The Audit Committee has primary responsibility for oversight and scrutiny of risk management, monitoring the adequacy and effectiveness of internal control and risk management systems and ensuring that a robust assessment of the principal risks facing the Group has been undertaken. The Audit Committee reports to the Board on a regular basis. 28 Our Approach to Identifying the Principal Risks Principal risks are identified by conducting regular risk discussions with key stakeholders across the business, including members of the Senior Leadership Team and other risk owners. Risks facing each function within the business are discussed based on the views and experiences of each risk owner, in addition to the internal controls in operation to mitigate the risks. The principal risks and uncertainties are those categories of risk which are considered by the Board to be material to the Group’s strategic development, performance and future prospects, as well as Group operations. In determining the principal risks, the Board considers the net impact of mitigations and controls in place as well as considering the severity of the risk and likelihood of occurrence. While the principal risk categories have not materially changed since our last Annual Report, the risk factors have evolved and we have set out in the report how these have changed in the year. The identified principal risks are not the only risks facing the business but are those considered to have a material impact on the business, and therefore are the focus of discussion at Board and Audit Committee meetings. Annual Risk Assessment At least annually, the Senior Leadership Team review the Group’s principal risks and perform a risk assessment. The assessment considers both the existing principal risks as well as potential emerging risks of the Group. The assessment looks at both the likelihood of a risk event occurring and the impact the event would have on our business, in addition to the controls and mitigations the Group has in place. The assessment as at 31 December 2023 has concluded that there are no new principal risks that have emerged during the year. However, the Board continues to acknowledge the elevated risk around the macro-economic situation and also the increased risk associated with the accelerated progression of Artificial Intelligence, which we are mindful of as well as the significant opportunity it presents the Group. The considerations and actions for both have been documented in the below analysis of principal risks. Climate change remains an emerging risk for the Group and one that the Board continues to monitor closely. However, as a data and analytics company in which our products are created and distributed digitally, our carbon footprint is considerably smaller than those of many other companies of our size. Therefore, we have concluded that climate change (including existing and emerging regulatory requirements related to climate change) does not represent a principal risk to our business. The climate-related financial disclosures on page 43 provide further details on the potential impact of climate change on our business. Principal Risks The principal risks and uncertainties reported are not the only risks facing the business but are those which the Board considers to be material to the Group. The Directors consider that the principal and emerging risks and uncertainties facing the Group are: Gross risk likelihood and impact: d o o h i l e k i L Economic and Political People and Succession Personal Data M&A Competition and clients Financial and Treasury IT and cyber security Product Regulatory and Compliance Impact Key: Link to Growth Transformation Plan (“G.T.P”): 1. Customer Obsession, 2. World-Class Products, 3. Sales Excellence, 4. Operational Agility 29 ANNUAL REPORT AND ACCOUNTS 2023Strategic Report / Directors’ Report / Auditor’s Report / Financial StatementsSTRATEGIC REPORT Principal and Emerging Risks and Uncertainties (continued) Business and Strategic Risks: Risk Description Link to G.T.P. Product 1, 2 Potential Impact Key Mitigations and Controls Assessment The success of the Group is dependent on the quality and relevance of our products. Our vision to be the leading data, analytics and insights platform for the World’s largest industries means that our content must be relevant and of the highest quality to help our clients be successful. A reduction in quality could lead to a loss of customer confidence, reputational damage, loss of revenues from new and renewable business and impede our ability to deliver on our growth strategy. Risk Movement: Stable. There was no material change to this principal risk in 2023. The Group continually looks for innovation to enhance capability and client experience. We have effective quality and process controls in operation and have responded to the risks of the accelerated progression of AI as well as capitalising on the opportunities AI brings. The Group provides high-quality data and analytics services. Our commitment to first-class product quality is embedded in our day-to-day operations. • Regular product and research planning meetings consolidate client feedback, competitive positioning and new product development to ensure relevance and drive innovation. • The Group has significantly expanded its use of Artificial Intelligence (‘AI’) throughout 2023 and we will look to further the use of AI going forward to improve the usability of our product for our customers, enhance our research and analysis capabilities, as well as realising automation opportunities. AI is a material opportunity, but only because of the quality and “proprietary-ness” of our data. We recognise the risk associated with the accelerated progression of AI and have policies in place internally which governs the acceptable use of AI by all employees across the Group. • Standard Process Manuals set out consistent research and publishing procedures, which focus on quality and accuracy and are continually reviewed for best practice. • Internal Quality team independently checks compliance against Standard Process Manuals. • External audit of Standard Process Manual compliance. • Internal production targets are set relating to metrics such as timeliness and monitored against performance metrics. • Review of KPI metrics such as renewal rates and customer numbers giving an indication of customer satisfaction and product quality. 30 Risk Description People and Succession Link to G.T.P. 1,2,3,4 Potential Impact Key Mitigations and Controls Assessment The Group is a people- based business. Failure to attract and retain employees with the appropriate skills and experience could lead to reduced innovation and restrict our ability to achieve future growth targets and the group strategy. Risk Movement: Increased. The risk has increased on the back of the Group having significant headcount investment in the plan for 2024 to underpin the future growth strategy, at a time when the current labour market is highly competitive. The Group actively manages its talent and ensures that there are succession plans for its Board and Senior Leadership Team. • Experienced management team with regular review of succession plans at Board and Senior Leadership Team level. • Good progress was made in 2022 in relation to employee engagement initiatives, specifically the Employee Resource Groups and engagement with employee focused Non-Executive Director. These initiatives have continued throughout 2023, including a Group-wide colleague-engagement survey. • The Group operates a Long-Term Incentive Plan to attract and retain key employees. • Annual appraisal process for all employees which allows the Group to evaluate performance and competence. The process demonstrates to employees that the Group is invested in their growth and development with both positive feedback and well communicated development feedback leading to improved morale, enthusiasm and performance. • Investment has been made in Q1 2024 in the People function, including the appointment of a Chiel People Officer supported by an enhanced team including Talent Acquisition, People Business Partners, Learning and Development and Internal Communication. 31 ANNUAL REPORT AND ACCOUNTS 2023Strategic Report / Directors’ Report / Auditor’s Report / Financial StatementsSTRATEGIC REPORT Principal and Emerging Risks and Uncertainties (continued) Business and Strategic Risks (continued): Risk Description Link to G.T.P. Competition and Clients 1,3 Potential Impact Key Mitigations and Controls Assessment The Group operates in highly competitive yet fragmented markets. Competitive threats could impact our ability to achieve our strategy due to: • Failure to keep up with technology developments • Loss of market share to competitors • Reduced financial performance Risk Movement: Stable. There was no material change to this principal risk in 2023. The first of our Growth Transformation Plan pillars is Customer Obsession and we continue to focus on exceeding our clients’ expectations by delivering world class products and stronger client engagement. The Group operates across a range of industry sectors across the globe. The Group therefore has a broad range of clients and competitors. One of the Group’s unique selling points is not only the breadth of its coverage, but also its depth. Therefore, it has to ensure that the depth of industry content is competitive and comparable to its competition in that sector. • The Group routinely reviews the competitive landscape to identify potential threats and acquisition opportunities. • We are an innovative company with an entrepreneurial culture to develop our product and propositions ahead of our competition. We believe that our adoption of AI is leading the way in our industry and enhancing the usability and experience of our customers. • We monitor our customer usage metrics and actively seek feedback from our clients in order to improve the services and customer experience. • Our datasets and technology platforms are both unique and difficult to replicate. • We aim to embed our products and services in client organisations and workflows, thereby increasing switching costs. • We provide improved and best-in-class client support, thereby improving customer satisfaction and retention. 32 Risk Description Economic and Global Political Changes Link to G.T.P. 1,4 Potential Impact Key Mitigations and Controls Assessment General economic/ political instability, or a downturn in a particular market or sector could change the demand for the Group’s products and/ or restrict the Group’s ability to trade in certain jurisdictions. The Group provides high-quality data and analytics services, which are embedded in the day-to-day operations of our clients hence in times of uncertainty, we aim to provide clarity and insight which drives demand, acting as a natural mitigation to any risk this situation also brings. Risk Movement: Stable. There was no material change to this principal risk in 2023. We continue to acknowledge that the current macro-economic environment presents a high risk situation but have appropriate mitigations in place to limit the risk to financial performance. When the macro-economic environment leads to financial uncertainty, we have the following mitigations: • The Group operates in three key geographic markets, namely Europe, North America and Asia Pacific, this balance provides resilience and helps us manage localised market or country-specific downturns. • In addition, we operate across multiple industry sectors and therefore are not reliant on one industry by having good sector diversity. • Wage inflation is manageable with careful allocation of resources and additional employee benefits (LTIP), in addition to funding through advancements in technology and efficiency savings. • We have mitigated the risk of rising interest rates by entering into an interest rate swap which fixes the floating (SONIA) element of the interest rate on the £290.0m term loan to a fixed rate of 4.9125%. • The Group is not reliant on significant external supply chain with energy costs representing less than 1% of the total cost base and therefore limited exposure to the current energy cost crisis. • Our business model means that there is a significant incremental margin on each sale and therefore this means that we can be competitive on pricing with our clients (who may be facing economic challenges of their own) without significantly impacting our profitability. • Visibility of revenue through invoiced revenue and renewable contracts. 33 ANNUAL REPORT AND ACCOUNTS 2023Strategic Report / Directors’ Report / Auditor’s Report / Financial StatementsSTRATEGIC REPORT Principal and Emerging Risks and Uncertainties (continued) Business and Strategic Risks (continued): Risk Description Acquisition and Integration Risk Link to G.T.P. 1,2,4 Potential Impact Key Mitigations and Controls Assessment Investing in transformational M&A is a key strategic theme of the new transformation plan. Failure to identify M&A opportunities would impact our ability to deliver on this strategy and provide growth through M&A. Successful integration is critical to delivering the full benefits of an acquisition, failure to achieve this could lead to a lower return on investment, inefficient business processes, inconsistent corporate culture and a weakened brand. Risk Movement: Stable. There was no material change to this principal risk in 2023. Although there were no acquisitions made in 2023, M&A is fundamental pillar in the strategy of the Group and the Growth Transformation Plan. M&A enhances and expands GlobalData’s existing platform and is a key contributor to the Group’s compounding growth strategy. In order to ensure the Group identifies suitable targets and mitigates the risk of missing out on key potential assets: • The Group has an internal team dedicated to M&A to research the market, build pipelines and manage multiple relationships across the market. • In addition to the internal resource, external advisers help the Group to identify and engage with strategic targets. During periods of high M&A activity, the execution and integration risk is inherently high. However, there are robust and effective controls and processes in place to mitigate these risks. • All acquisitions are subject to rigorous financial, tax and legal due diligence (both internal and with the aid of external advisers) and operational review. A final business case including a future financial forecast is presented to the main Board as part of the approval process. • For smaller acquisitions, a separate investment committee with delegated responsibility from the Board review the diligence process. • 100-day post-acquisition plan to provide a consistent and robust integration playbook and a dedicated team to plan, execute and integrate acquisitions. As a Board, annual review of the capital allocation strategy is performed to ensure funding is available for M&A. 34 Operational risks: Risk Description Link to G.T.P. Financial 4 Potential Impact Key Mitigations and Controls Assessment Risk Movement: Stable. There was no material change to this principal risk in 2023.Although the on-going macro environment has led to an increased risk through volatility in interest rates, fluctuations in currency exchange rates and rising inflation, the group has in place policies and procedures to actively manage these risks. The Group is impacted by a number of financial risks: The Group’s debt financing is subject to interest rate risk, with the bank’s margin applied to SONIA (Sterling Overnight Index Average rate). Movement in SONIA would cause variability in interest payments. The Group’s reporting currency is Pounds Sterling. Given the Group’s significant international operations, fluctuations in currency exchange rates can affect the Group’s consolidated results. High levels of inflation rates can increase costs across the Group. As a global Group we are subject to many forms of direct and indirect taxation, and because of the many territories we are active within, tax law and compliance is a complex area. The Group actively manages its financial risks: • We have mitigated the risk of rising interest rates by entering into an interest rate swap which fixes the floating (SONIA) element of the interest on the term loan to a fixed rate of 4.9125%. This eliminates the Group’s risk to future fluctuations in interest rates. • A significant mitigation to the risk of currency fluctuations is the natural hedge we have from our global operations. We generate around 60% of revenues from currencies other than Sterling, which is predominantly US Dollar, while around 40% of costs are derived from non-Sterling currencies, which are all primarily linked to movements of US Dollar. • The net cash flow exposure is managed by entering into foreign exchange contracts that limit the risk from movements in US Dollar, Euro and Indian Rupee exchange rates with Sterling. Contracts are entered into in line with our Board-approved treasury policy (the policy is to hedge throughout the year at 20% per quarter for a period of 12 months out, so that in each quarter we enter with 80% of our net cash flow hedged). • The Group operates a focused approach to cost management, including mitigating the impact of inflation. As a Group we have a relatively low percentage of external supplier spend compared to the costs attributable to payroll and related costs and would look to mitigate increases in these through advancements in technology and efficiency savings, hence we do not see any significant risk from this area (also see Economic and Global Political Changes). • We have an internal tax and treasury team with a remit to continually monitor and review tax and treasury matters of the Group. We engage a Big Four firm for tax advice and utilise their global network to both plan our tax exposure and manage compliance across the world. • The Group has a Related Party Committee, a separate subcommittee of the Audit Committee, which monitors the controls in place to identify related party transactions. The Committee also authorises the type and nature of each transaction, ensuring that each transaction is entered into on an arm’s length basis. 35 ANNUAL REPORT AND ACCOUNTS 2023Strategic Report / Directors’ Report / Auditor’s Report / Financial StatementsSTRATEGIC REPORT Principal and Emerging Risks and Uncertainties (continued) Operational risks (continued): Risk Description Link to G.T.P. Personal Data 1,4 Potential Impact Key Mitigations and Controls Assessment Whilst most of the data held by the Group is industry, market, and economic data, the loss/ theft or misuse of personal data of employees, clients and others could cause significant harm to our key stakeholders and could lead to reputational loss, damage to customer relationships, regulatory sanctions and/ or significant fines. Risk Movement: Stable. There was no material change to this principal risk in 2023. Data privacy and information security is critical for our business and we have continued to reinforce this in our culture and behaviours throughout the year. Collecting first-party data plays a crucial role in delivering a better and scalable commercial proposition for the Group and driving the future business proposition. The Group operates robust controls around this. • The Data Privacy steering committee, led by the Chief Financial Officer, provides continuous monitoring of data and privacy developments, adoption of best practice and advice across the Group. This group consists of information security, data protection, commercial, legal and external advisers. • In conjunction with the Data Privacy steering committee the Group’s legal department monitors laws and regulations surrounding the use and management of data. • Regular health checks are performed across all sites to ensure compliance with policies and procedures. • Data Privacy responsibilities, policy and GDPR forms part of the mandatory annual employee training. • IT, Cyber and Systems controls are in operation to prevent unauthorised access. 36 Risk Description IT, Cyber and Systems Failure Link to G.T.P. 1,4 Potential Impact Key Mitigations and Controls Assessment Data is at the core of our business operations. A major IT failure or cyber-attack could lead to significant operational or client disruption resulting in reputational damage, business interruption and a risk of financial loss caused by phishing or whaling attacks or other cyber infiltration. Risk Movement: Stable. There was no material change to this principal risk in 2023. IT and Cyber controls have continued to be enhanced and improved throughout the year; however, we recognise that cyber threats including Distributed Denial- of-Service (DDoS) attacks, malware and hacking are an ever-increasing threat and will continue to be a constant area of focus given the sophistication of attackers. IT, Cyber and Systems failures continue to be a major area of risk for the Group however we continue to ensure that we implement and design best-practice and effective controls to mitigate these risks. • Continuous and proactive monitoring of the cyber-threat landscape, including regular external review of cyber security and website security protocols. • Internal Information Security team supported by external consultancy who are engaged to help with the design and implementation of IT security. • Business continuity plans are in place across the Group, including disaster recovery programmes, and plans to minimise business disruption. • Product and sales infrastructure hosted by external third parties with adequate security protocols. • IT infrastructure is managed by third party providers with 24-hour management and monitoring with back-up and disaster protocols. • Performance of automated vulnerability scans of externally exposed enterprise assets. • Automated backups, including maintenance and protection of back-up and recovery data. • Periodic external penetration tests on Group websites. • Extensive information security policies communicated to all employees as part of the annual mandatory Information Security Awareness training. All policies are also available on the Group intranet site and regularly updated. 37 ANNUAL REPORT AND ACCOUNTS 2023Strategic Report / Directors’ Report / Auditor’s Report / Financial StatementsSTRATEGIC REPORT Principal and Emerging Risks and Uncertainties (continued) Operational risks (continued): Risk Description Regulatory Compliance Link to G.T.P. 4 Potential Impact Key Mitigations and Controls Assessment Failure to comply with all applicable legal and regulatory requirements could result in fines or imprisonment, reputational damage and prevent the Group from being able to trade in some jurisdictions. GlobalData is committed to complying with all laws and regulations that apply to the Group. Risk Movement: Stable. There was no material change to this principal risk in 2023. The Group remains committed to complying with all laws and regulations and controls are in place to mitigate the risk of non- compliance. • The Board receives annual training in respect of their responsibilities as Directors of the Company. • The Board and Senior Leadership Team are supported by external advisors and in-house legal counsel. • The majority of the Group’s operations are based in the UK, US and India. Appropriate advisers are employed in all geographies to ensure that the Group remains compliant with local laws and regulations. • As part of GlobalData’s commitment to following best practices in employee conduct, all employees and contractors are required to confirm their adherence to the Group Code of Conduct and perform annual mandatory compliance training covering other key Group policies including anti-money laundering, anti-bribery policy, data protection and privacy. All global policies are available to all employees on the Group’s intranet site. • The Group operates an anonymous whistleblowing hotline facilitated via an independent company for anyone to raise a concern. 38 STRATEGIC REPORT Directors’ Section 172(1) Statement The Board acknowledges its responsibility under section 172(1) of the Companies Act 2006 and below sets out the key processes and considerations that demonstrate how the Directors promote the success of the Company. The below statement sets out the requirements of the Act, section 172(1), and explains how the Directors discharge their duties. As noted in the Corporate Governance Report (pages 54 to 60), the Board meets monthly with papers circulated in advance to allow the Directors to fully understand the performance and position of the Group, alongside matters arising for decision. Each decision that is made by the Directors is supported by papers, which analyse the possible outcomes, so a decision can be made that best promotes the success of the Company and considers the impact on the wider stakeholder group. The Group has identified its stakeholder group and analysed each stakeholder based upon their level of interest in GlobalData and their level of power/influence on the Group. The Directors review this analysis, monitor the levels of engagement with each stakeholder and build feedback and stakeholder considerations into the governance and decision-making process. Factors (a) to (f) below are all taken into account during the decision-making process. (a) The likely consequences of any decision in the long term Supporting each decision, the Board is given access to management papers that set out impact analysis surrounding decision-making. The papers include diligence on the financial impact via forecasts, as well as non-financial factors and how the decision fits with the strategy of the Group. A primary example of this is the process by which acquisitions are considered by the Board. The Directors, the Senior Leadership Team, including the M&A team prepare a pack of information that considers: commercial diligence and analysis of strategic fit; financial and tax diligence on the target (including review of forecast and projections); and legal and compliance diligence. The team will set out the 100-day plan for integration and discuss risks with the Board. This will be consolidated alongside external advice obtained through the process and will be reviewed to ensure that the long-term impact of the acquisition is positive not only for the Group, but also for our clients (enhancing our capability and offering), our employees and shareholders. In forming a view of whether to approve any M&A, the Board will review this information and consider the views of internal management sponsors (particularly around the commercial rationale, the likelihood of synergies being achieved and the bandwidth to execute), as well as feedback that is received from our bankers, Nominated Adviser and brokers. If there are any challenges identified during this process, the Board will seek management to look at remedies and mitigations to be put in place prior to the transaction completing. The Board will then satisfy itself that the mitigations appropriately address the identified issue and the cost of which are not prohibitive to the deal proceeding. The Group has a 5-year financial plan, supported by the Growth Transformation Plan and has a number of KPIs linked to stakeholders. KPIs such as renewal rates and average client value give us insight into customer satisfaction and pricing power of the product and KPIs such as Invoiced Forward Revenue, revenue and earnings growth are key for our shareholders, banks and our employees. By understanding the drivers behind these KPIs the Board is able to take a view on whether the wider strategy is effective or whether more focus is needed on areas such as product development, pricing or client services. The insight gives the Board a clear view on the growth levers that will determine if the 5-year financial plan is achievable or whether actions need to be taken to achieve it. The plan is reviewed regularly to benchmark our performance. Strategy is discussed at the monthly Board meetings and reviewed in detail each year, at the Board Away Day. This strategic thinking is intrinsic to future decision-making. (b) The interests of the Company’s employees The Directors actively consider the interests of employees in major decisions. Our commitment to our people remains paramount because we recognise that the motivation, creativity and engagement of our people is critical to the Group’s success. We aim to be an employer of choice and one where our people feel respected, rewarded and engaged. Our success and future success depends on GlobalData being able to attract and retain the right talent. The Group holds regular Chief Executive Information Sessions for all colleagues around the globe. The content of these sessions, held by video conference, is aimed at keeping our workforce aligned with our vision, mission and strategy and delivers key strategic updates and initiatives as well as the overall aim to increase the level of employee engagement. The Group operates a series of Employee Resource Groups (“ERGs”) which encourage our people to join forums which discuss a series of topics that help us gain their feedback and help them shape the direction of the company and its values. We have several ERGs: Gender Balance, Race and Ethnicity 39 ANNUAL REPORT AND ACCOUNTS 2023Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements STRATEGIC REPORT Directors’ Section 172(1) Statement (continued) (‘EmbRACE’), LGBTQ+ Allies (‘PRIDE’), which are all focused on our Diversity, Equity and Inclusion, plus Social & Leisure. (c) The need to foster the Company’s business relationships with suppliers, customers and others To ensure that the Board has a communication channel to the ERGs, Annette Barnes attends some of the ERG meetings throughout the year in her capacity as our designated workforce Non-Executive Director. Feedback and themes of the meetings are then fed back into the wider Board, which is invaluable in assessing the culture, talent and leadership of the business. The designated workforce Non-Executive Director role has the aim of forging closer relationships between the Board and the workforce. In addition to involvement in the ERGs, Annette provides independent oversight of the whistleblowing hotline, providing a useful insight into employee matters. Given Annette’s role as Remuneration Chair and her links to employees, the Board does not believe that workforce representation on the Board is required. The Group benefits from the diversity and variety of its workforce and is fully committed to maintaining and encouraging diversity, including the composition of the Board. The Board is currently made up of 6 male and 2 female Directors. The Senior Leadership Team has 14 male employees and 2 female employees and is a truly global committee, which represents the diverse nature of our Group. The Committee is made up of 11 members from the UK, 2 from India, 1 from the US, 1 from Canada and 1 from Australia. At GlobalData we encourage our people to be actively involved in our strategy, product, and ongoing corporate development, which has been enhanced through the Chief Executive Information Sessions during 2023. This has enabled the Group to maintain a level of agility and the ability to plan, design and launch product enhancements in relatively short time frames. By nurturing our team’s skills and expertise, particularly around Artificial Intelligence, our colleagues will undoubtedly play a pivotal role in shaping the future of GlobalData. We are significantly investing in our talent development initiatives, led by our new Chief People Officer, Katherine Lunn, who will focus on enhancing the employee proposition. She will also lead on the investment in and recruitment of new Sales specialists and AI experts, both of which are a key part of the Growth Transformation Plan. The Directors have identified the Group’s key stakeholders and review, at least annually, to ensure there is sufficient communication and engagement. The review of the stakeholder map, which assesses the influence and interests of our stakeholders, is used to guide our decision-making processes. The key initiatives and developments for each stakeholder group during the year are summarised below: Our People • • • • • Continuation of regular Chief Executive Information Sessions to all our global colleagues. Annual individual performance reviews, with opportunity for upward as well as downward feedback and links from personal objectives to Group strategy. Employee Resources Groups which give our people a forum to get involved in shaping the culture and strategy of the business. These Groups are attended by the designated workforce Non-Executive Director, to ensure communication channels to and from the Board are effective. During the year we initiated a Group wide colleague engagement survey as part of our commitment to creating an engaging environment for GlobalData’s colleagues. Group-wide internal intranet, with news, policies and resources. • We are significantly investing in our talent development initiatives, led by our new Chief People Officer, Katherine Lunn, who will focus on enhancing the employee proposition and developing the capabilities of the global workforce. Shareholders and investment community During the past 12 months we have continued our increased activity with the wider investor community. • • Continued a high number one-to-one meetings with our shareholders and investment community, both following our half year and full year results and meetings outside the ‘normal results cycle’. Our interactions with the investor community has now become much more international, with increased number of meetings in the United States of America and mainland Europe. 40 • We held a capital markets day on both 24 January 2023 and 24 January 2024. These forums gave investors the opportunity to review the Group strategy in detail. In particularly the event in 2024 focused on the launch of the Growth Transformation Plan and the recent minority investment in the Healthcare division. • • Attended a number of investor events held by our brokers. The Group has also launched an enhanced Investor Relations website. Clients • • Customer Obsession is the Group’s number one priority in the Growth Transformation Plan. The Group is firmly focused on operating as a customer- centric organisation and this is harboured through quality account management, customer service processes and review of customer feedback and renewal rates. Page 12, within the Chief Executive’s Report, discusses how the Group and its Board address the Customer Obsession priority, and page 32 notes the controls that we have in place to ensure we maintain strong relationships and partnerships with our clients. • We have continued our collaborative initiative with our top tier clients globally, involving relationship managers, sales account managers, customer service, analysts and consultants to embed deeper relationships with our key customers. The initiative has involved more meetings with our clients as well as using technology to understand their needs in greater depth. • • As an information services company, we want to be a catalyst for positive change for the markets and customers we serve. Both within and in front of the paywall, we are providing data-led insight into key areas of ESG. We recognise that ESG is strategically important to all of our clients, and because of the significant amount of data we collect and analyse, we are creating a vast ecosystem of ESG intelligence across our industries. Our standard payment terms are zero days ahead of the contract start and we monitor the average debtor days, which were 58 days in 2023 (2022: 62). • We have a continued focus on product quality, innovation and giving our clients timely insights in an ever-evolving world. Banks • We refinanced our debt during 2022, which involved an enlargement of our bank group. • We maintain a strong relationship with each of our lead banks and we regularly meet with each of the banks to discuss financing strategy. • We present financial information to the wider banking group through quarterly management information packs and one-to-one meetings. • The banks set our financial covenants for the bank debt, which we monitor and forecast against each month to the Board. The covenant test thresholds are taken into account when making any financial decision, to ensure compliance. Auditors • We appointed Deloitte LLP as auditors for 2020 following a decision to rotate audit firms in line with best practice. We went through an extensive first-year audit process to enable Deloitte to fully understand our business, its processes, people and controls and feedback from the recent audits has been fed into the audit approach for 2023 and beyond. • Management and the Chief Financial Officer meet regularly with the audit team throughout the year to discuss company performance, transactions and strategy. The Chair, Audit Committee Chair and Chief Executive also regularly meet with the audit partner and senior team. • Feedback from the audit process, particularly around internal controls is used by the Board to drive action and decide upon priority areas in the annual risk and controls review. Suppliers • While the majority of our cost base is people, we maintain strong working relationships with our suppliers and continually monitor supplier payment days. For key suppliers we perform diligence around their working practices and ethics as well as their financial stability and viability. • For all new suppliers we use an onboarding form, which documents our code of conduct and key policies around data privacy, modern slavery and compliance. 41 ANNUAL REPORT AND ACCOUNTS 2023Strategic Report / Directors’ Report / Auditor’s Report / Financial StatementsSTRATEGIC REPORT Directors’ Section 172(1) Statement (continued) (d) The impact of the Company’s operations on the community and environment The Group takes its responsibility within the community and wider environment seriously and acknowledges that more can be done. Our Environmental, Social and Governance (“ESG”) Report on page 62 sets out the key themes that are considered by the Board. Our strategy is underpinned by ESG factors and ESG is integral to everything that we do. It is the foundation of our company and provides the platform for creating a successful and sustainable company for the long term. As a company, we understand that it is mutually beneficial to consider all our stakeholders (our colleagues, our communities, our customers). We believe that information and technology are both powerful enablers of a successful transition towards a more sustainable society. For the year ended 31 December 2023, we have reported energy intensity metrics for our UK companies on page 64. The Company has a relatively low carbon footprint because of the nature of its operations but acknowledges that improvements can always be made. GlobalData is a global company and has based itself in strategic locations for the long term. Within each community in which we operate, we try to engage with local issues and, in particular, look to make positive contributions to those communities. As a company, we have charity partners across the globe, with a particular focus on charities that help with mental well-being, education and empowering women in education. (e) The desirability of the company maintaining a reputation for high standards of business conduct The Directors and the Company are committed to high standards of business conduct and governance. The Group has fully adopted the UK Corporate Governance Code despite there being options for more reduced codes for companies on AIM. GlobalData has improved its governance arrangements and reporting over the past three years. During the year: • We have a skilled and diverse Board of Directors, which was enhanced in 2021 with the appointments of Catherine Birkett and Julien Decot as well as the appointment of independent Chair Murray Legg. • The Board will be looking at succession planning for Murray Legg during 2024. • We have embedded an enhanced Enterprise Risk Management Framework across the Group, with an emphasis on internal controls around data privacy, data quality, cyber security and our other principal risks. The review of risk, alongside the risk appetite for the Group, guide the Board on where more focus and investment is needed. In particular, the risk appetite statement gives the 42 Board a good framework when looking at any matter for the Company, as it appropriately frames the risk and ensures a proportionate response to it. • Nominated Adviser provides annual training on Directors’ responsibilities, AIM listed rules and MAR (Market Abuse Regulation). • Where there is a need to seek advice on particular issues, the Board will seek advice from its lawyers and Nominated Adviser to ensure the consideration of business conduct and the Company’s reputation is maintained. • As part of GlobalData’s commitment to following best practices in business conduct, all employees and contractors are required to confirm their adherence to the Group Code of Conduct and perform annual mandatory compliance training covering other key Group policies including anti-money laundering, anti-bribery policy, data protection and privacy. All global policies are available to all employees on the Group’s intranet site and provide guardrails for business conduct for the global operations. (f) The need to act fairly between members of the Company The Directors regularly meet with investors and give equal access to all investors and potential investors. Through its advisers, the Directors seek and obtain feedback from meeting with the investors and incorporate feedback into the Group’s decision- making processes. The Related Party Transactions Committee ensures that there are adequate controls in place to provide assurance that any transaction which is or may be a related party transaction in nature is conducted on terms that are at arm’s length and reasonable and aren’t favouring or disadvantaging the company and any of its members. The Related Party Transactions Committee comprises the Chair Murray Legg, Catherine Birkett, Annette Barnes and Andrew Day. The Committee met twice during 2023. The Group’s capital allocation policy is set out on page 6, which sets out the strategy on capital allocation including investment, dividend and share buy-back policies. The Group operates share incentive plans for its employees. The Group uses free cash flow and to buy back shares, via its Employee Benefit Trust, to limit the dilutive effect this has on existing shareholders. Each year the company proposes an ordinary resolution at its AGM to grant it authority to buy back up to 10% of its shareholding, but will make decisions on share buy-back in reference to its cash flow and distributable reserves position. As at 31 December 2023, there were 50.6 million share options outstanding and the Company had 37.9 million shares in treasury against these options. STRATEGIC REPORT Non-Financial and Sustainability Information Statement The UK Government has mandated climate-related financial disclosures under the Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022. These regulations are effective for accounting periods beginning on or after April 6, 2022, and they mandate in-scope companies to report on material climate-related matters and their corresponding impact on business operations. In accordance with these regulations, we present Group’s disclosures describing the governance, risk management, strategy, metrics and targets associated with climate-related financial risks and opportunities impacting our business. 1. Governance The Board has overall responsibility for reviewing and approving the Group’s climate-related financial risk management strategies, sustainability objectives, and decarbonisation initiatives. During the financial year ended 31 December 2023 the Board established the Climate Impact Steering Committee (CISC). The CISC is chaired by the Chief Financial Officer with representation from HR, Facilities, Product (Research and Analysts) and Finance. The CISC meets on a quarterly basis and reports to the Audit Committee. The following table provides an overview of the responsibilities of the Board, the Audit Committee and CISC with respect to the governance of climate-related financial risks: Governance body Responsibilities The Board Audit Committee Climate Impact Steering Committee (CISC) • • • • • • • • Reviews the annual risk assessment and climate-related financial risks and opportunities assessment. In 2023, this review was performed throughout the year given the new climate-related regulations. From 2024, the climate-related financial risks and opportunities assessment performed by the CISC will be integrated into the annual risk assessment. Responsible for reviewing and challenging the Group’s risk management processes. The climate-related financial risks and opportunities assessment is reviewed by the Audit Committee. All members of the Audit Committee are members of the Board. Identifying, assessing and managing climate-related financial risks and opportunities. Developing and monitoring climate metrics and targets for the Group. Executing climate-related strategies and initiatives including the design and implementation of internal controls. Ensuring that the Group has adequate mitigation strategies in place for the climate-related financial risks identified. From 2024, Climate will be formally incorporated as a permanent agenda item during quarterly Audit Committee meetings. This agenda item will encompass the review, monitoring, and discussion of climate-related financial risks and opportunities as well as wider sustainability matters. 43 ANNUAL REPORT AND ACCOUNTS 2023Strategic Report / Directors’ Report / Auditor’s Report / Financial StatementsSTRATEGIC REPORT Non-Financial and Sustainability Information Statement (continued) The Board Review and Confirmation Audit Committee Challenge and Review Climate Impact Steering Committee (CISC) Ongoing Review, Control and Implementation Roles & responsibilities of our risk management processes for climate-related financial risks and opportunities. 2. Risk Management The Group identifies and assesses risks at a group level. In setting out the principal risks, the Board considers the impact of mitigations and controls in place. The Board reviews principal risks and the annual risk assessment. The assessment considers both the existing principal risks and potential emerging risks for the Group. It looks at the likelihood of a risk event, the impact that event would have on the Group and the controls and mitigations that the Group has in place. See pages 28 to 38 for further details on our approach to risk management. Having been established during 2023, the CISC conducted a process whereby potential climate-related financial risks and opportunities were identified and assessed (refer to Table 1 below). These risks were further refined with the assistance of an external consultant. This assessment has been reviewed by the Audit Committee and the Board as a deep dive initial review separate to the annual risk assessment process. The Board reviewed the mitigation measures and controls in place and has delegated management of these risks to the CISC. In 2024, the climate-related financial risks and opportunities assessment will be integrated into our normal annual risk assessment timetable. 3. Strategy The risks and opportunities outlined in Table 1 below have been assessed within the context of the scenario analysis performed by the Group and are aligned to either Scenario A or Scenario B, explained below. For this assessment, we used time horizons consistent with those used for the Group’s Growth Transformation Plan. The following time horizons are applied to all risks and opportunities: Time Short Definition Rationale Present - 1 year These risks are aligned with our annual financial planning cycle and will require immediate mitigations to be put in place. Medium 1 year - 3 years These risks do not require immediate mitigation actions and would encompass a time period spanning the Growth Transformation Plan. Planning considerations for these risks would be undertaken accordingly. Long >3 years These risks and opportunities are related to the physical or transition impacts of climate change and have a longer-term impact on the business. 44 Table 1: Climate-related financial risks and opportunities and business resilience Potential impact Strategic responses and mitigations Category Physical risk Type Acute Risk Disruption to data storage facilities and workforce due to adverse weather events 1 - k s i R Time Horizon Medium term Scenario B: High-carbon economy Data storage facilities in the UK, EU and India could be subject to increased risks of flooding or extreme heatwaves. Exposure to adverse weather events could cause the facilities to be under significant strain due to their cooling requirements. Extreme weather events across our major jurisdictions (EMEA, NOAM, APAC) could disrupt employees’ lives and force workplaces to close. This could impact the Group’s ability to serve its customers thus resulting in revenue loss or reputational damage. We have a diversified data storage strategy to mitigate any potential impacts from adverse weather events, ensuring that data is stored in various locations to reduce dependencies on any one facility. Accompanying this strategy, the Group has developed internal and external Disaster Recovery Plans with service providers to mitigate the impact on our data storage facilities. Our global footprint and diversified business functions provide resilience against adverse weather events. In the event of an impact on our workforce in one geography, we can adapt to mitigate disruptions to the business by transferring key activities to employees in other jurisdictions Category Transition risk Type Policy An increase in the price of GHG emissions could have an impact on energy costs. This has the potential to increase our costs both operationally and in our value chain, for example, data centre costs passed onto us as the consumer. Directly borne energy costs are not a material expense for the Group, representing less than 1% of our total cost base. For this reason, we do not assess this risk to have a material impact on the Group. 2 - k s i R Risk Increased pricing of GHG emissions Time Horizon Long term Scenario A: Low-carbon economy Category Transition risk Type Technology / Market (customer) 3 - k s i R Risk Emerging data storage technologies / Evolving customer markets Time Horizon Long term Scenario A: Low-carbon economy Where the Group has a direct purchasing ability, we have committed to transitioning all energy contracts to 100% renewable energy certified contracts as the contracts expire. In the UK we plan to achieve this by the end of 2024. We plan to finalise our net-zero targets during 2024 to further manage this risk, see Metrics and targets section below. A failure to shift to new low-carbon technologies could result in increased operational costs compared to competitors. We may lose our competitive advantage in the market as our service price may need to increase to offset the increased costs. Most of our content databases are hosted with best-in-class external service providers. We are refining our procurement processes to ensure that suppliers are also acting responsibly and decarbonising their own footprint. Additionally, as more customers are adopting net-zero targets, if we are not meeting these targets, it could have an adverse impact on how we are perceived in the market. Negative market perception could impact our overall revenue generating capabilities as customers may choose competitors who have been pro-active in adopting new technologies. For the on-premises data storage solutions we use, we are striving to reduce the use of non-renewable resources, find cleaner energy sources and manage our facilities with maximum environmental efficiency. 45 ANNUAL REPORT AND ACCOUNTS 2023Strategic Report / Directors’ Report / Auditor’s Report / Financial StatementsSTRATEGIC REPORT Non-Financial and Sustainability Information Statement (continued) Potential impact Strategic responses and mitigations As climate-related data becomes increasingly critical for our client base, there are potential opportunities for the Group to expand our product offerings. Growing ESG reporting requirements and stakeholder demands for ESG data could lead to increased demand for GlobalData’s services. We have identified further ESG related data and insights as a potential growth area going forward. The Group has proactively compiled ESG-related data and established an ESG themed platform within its Thematic Intelligence product. These initiatives strategically position the Group to support our clients in monitoring ESG metrics and understanding the impact of ESG on their business. 1 - y t i n u t r o p p O Category Opportunity Type Market (customer) Opportunity Revenue growth due to climate demand for ESG insights Time Horizon Medium term Scenario A: Low-carbon economy Scenario analysis In FY23 we have assessed the qualitative ramifications of climate change on our operations. We are yet to perform an in-depth quantitative climate scenario analysis. We have identified two contrasting scenarios within which we have completed risk assessments to our business based on the potential outcomes. Considering the existing mitigating actions in place, we believe our business model is resilient to all the climate-related financial risks and opportunities arising under both scenarios. Scenario A: Significant action is taken to ensure global temperatures do not increase by more than 2oC with the aim of establishing a low-carbon economy. In line with the objective of the Paris Climate Agreement, this scenario could see global co-operation to implement new regulations and policies that would enable the transition to a low-carbon economy. In addition, there would be shifts in consumer mindset towards low-carbon alternatives. This scenario would pose increased transition risks and opportunities for our business; however, we anticipate that this scenario will not have a material impact on our operations and business strategy. The transition risks related to increased regulations could see increasing costs in our energy supply chain as well as increased reporting requirements. However, we do not consider these to be a significant risk to the Group. This scenario also presents an opportunity for increased revenue growth by leveraging the data and insights we offer to clients as they navigate the transition risks confronting their organisations. We have initiated development of an ESG offering that supports clients in monitoring ESG metrics and comprehending the impact of ESG on their operations. Scenario B: Limited action is taken, resulting in a rise in global temperatures, potentially beyond 4oC. In this scenario, a business-as-usual approach is taken globally with no concerted effort to regulate and drive policy in the direction of a low carbon economy. The targets set out in the Paris Climate Agreement are not met. The result of this is that global temperatures continue to rise, which increases the likelihood of more frequent adverse weather events and sea-level rise. This scenario demonstrates an increase in physical risks confronting GlobalData, potentially manifesting as increased incidences of extreme weather events such as floods and extreme heatwaves. We have identified material physical risks associated with disruptions to our workforce and data storage facilities. We have also identified increases in operational costs due to sustained changes in weather patterns as a material physical risk, resulting in the need for additional heating and cooling in our offices. The CISC has developed strategic responses to ensure the adequate mitigation of these risks. As we become more experienced in qualitative scenario analysis, we will aim to present further potential scenarios backed by scientific analysis. 46 As a data and analytics company, the inherent nature of the industry in which the Group operates means that the repercussions of climate change on our business and products are relatively low compared with many other sectors and companies of our size. The Group acknowledges that while there are potential risks posed by climate change it also presents an opportunity for us to assist clients in comprehending and managing the impact of climate within their own businesses and markets. The Board has reviewed and approved the assessment of climate-related financial risks and agrees that there is no principal risk to the Group arising from this assessment. The management of climate-related financial risks has been entrusted to the CISC, which reports quarterly to the Audit Committee for continuing review and challenge. 4. Metrics and targets We are committed to establishing a net-zero strategy and accelerate the roadmap of actions that will get us to net-zero. Our first step has been to join the Science Based Targets Initiative (SBTi). Our SBTi targets are being reviewed by the SBTi. Setting and meeting targets will allow us to mitigate the risk of increased operational costs due to increasing price of GHG emissions (Risk-2) as well as striving to reduce the use of non-renewable resources, find cleaner energy sources, and manage our offices with maximum environmental efficiency. We continue to monitor our energy usage and associated greenhouse gas emissions in line with the Streamlined Energy and Carbon Reporting (SECR) requirements (see page 64) and use these metrics to assess our current position and change year on year. During 2023, we engaged an independent consulting firm to undertake a global assessment of our carbon emissions across all GlobalData offices. They have completed this assessment and we are now working towards implementing the actions identified to reduce our carbon footprint. Our ambition is to set near term and 2050 net-zero targets during 2024 and align our reporting against both global sustainability reporting standards (the Global Reporting Initiative or GRI) and Sustainability Accounting Standards Board (SASB) standards. We will then be able to monitor and assess our progress in meeting our targets and use them to manage our climate-related risks and mitigate the carbon footprint of our operations across the world. 47 ANNUAL REPORT AND ACCOUNTS 2023Strategic Report / Directors’ Report / Auditor’s Report / Financial StatementsSTRATEGIC REPORT Going Concern and Viability Going Concern The Group meets its day-to-day working capital requirements through free cash flow. The Group has closing cash of £19.8m as at 31 December 2023 (2022: £34.0m) and net bank debt of £243.9m (2022: net bank debt of £249.6m), being cash and cash equivalents less short- and long-term borrowings, excluding lease liabilities. The Group has an outstanding term loan of £265.0m (2022: £290.0m) which is syndicated with 12 lenders. As at 31 December 2023, the Group had undrawn RCF of £120.0m which is syndicated with 13 lenders. During January 2024, £20.0m of the RCF was drawn down to support a share buy-back. The Group’s banking facilities are in place until August 2025, however the Group intends to fully repay the term loan upon completion of the investment agreement with Inflexion. In the unanticipated event that completion does not occur, the Group will be required to renew or extend its financing arrangements as discussed in the long-term viability section below. The Group has generated £101.0m in cash from operations during 2023 (2022: £85.4m). Although the statement of financial position shows net current liabilities (current assets less current liabilities), included in current liabilities is £104.6m of deferred revenue that represents future income earnings. Excluding deferred revenue, the Group has net current assets of £49.8m (2022: £56.4m). Based on cash flow projections the Group considers the existing financing facilities to be adequate to meet short-term commitments. The finance facilities were issued with debt covenants which are measured on a quarterly basis. There have been no breaches of covenants in the year ended 31 December 2023. Management has reviewed forecast cash flows and there is no indication that there will be any breach in the next 12 months. The Directors have a reasonable expectation that there are no material uncertainties that cast significant doubt about the Group’s ability to continue in operation and meet its liabilities as they fall due for the foreseeable future, being a period of at least 12 months from the date of approval of the financial statements. The Directors have modelled a number of worst-case scenarios to consider their potential impact on the Group’s results, cash flow and loan covenant forecast. Key assumptions built into the scenarios focus on revenue and cost growth. In addition to performing scenario planning, the Directors have also conducted stress testing of the Group’s forecasts and, taking into account reasonable downside sensitivities (acknowledging that such risks and uncertainties exist), the Directors are satisfied that the business is expected to operate within its facilities. The plausible downside scenarios modelled were as follows: (i) subscription sales in 2024 being approximately 10% lower than expectation (ii) cost growth in line with the current UK rate of inflation and (iii) both scenarios combined. There remains headroom on the covenants under each scenario and cash remained in excess of £16.3m in all months. Through our normal business practices, we are in regular communication with our lenders and are satisfied they will be in a position to continue supporting us for the foreseeable future. The Directors therefore consider the strong balance sheet, with good cash reserves and working capital along with financing arrangements, provide ample liquidity. Accordingly, the Directors have prepared the financial statements on a going concern basis. Long-Term Viability The Directors have formally assessed the viability of the Group to December 2028 as part of the 5-year financial plan, taking account of the Group’s current position, its cash flows and the potential impact of the principal risks as outlined on pages 28 to 38 of this Annual Report. The Directors have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment. The Board considers this period as an appropriate review period as it offers a medium-term view and gives actions and strategy sufficient time to review against. The 5-year financial plan has been built on the basis that the Group continues to achieve consistent revenue growth. The 2024 budget is the basis for the plan. Our cost base is relatively fixed and predictable and as such we have assumed modest cost growth. The cash flow assumptions follow our business model of our clients being invoiced in advance of the subscription start date and suppliers and employees are paid within 30 days and at the end of the month respectively. The 5-year financial plan has been subject to stress testing for the scenarios noted within the Going Concern statement above (in which the sensitivities are modelled into subsequent years), the results of which show significant headroom in cash and facility terms. The Group also has strong headroom in relation to the financial covenants in place and no breach is forecast. 48 The Group’s prospects are assessed primarily through the annual budgeting process. Detailed plans are prepared by the Senior Leadership Team and are presented to the Board at the Annual Away Day, which allows a deep dive into various areas of the business and provides the opportunity for input and scrutiny by the Board which ensures alignment with the overall Group strategy. Progress against plan is presented to the Board throughout the year, commenting on performance and any newly identified risks. The individual plans are then consolidated into an overall Group plan. As noted on page 5 of the Annual Report, our business model has strong fundamental attributes, being significant recurring and visible revenue streams, strong incremental margins, robust working capital and operational cash flow and scalable opportunity. The Board feels that the Group’s four strategic priorities give the appropriate focus to protect the business from risks, threats and uncertainties as well as giving the agility to pursue opportunities as they arise and to capitalise on the business model attributes. The focus on being Client Centric, developing World-Class Products, Sales Excellence and Operational Agility are the correct focuses aligned with the Group’s mission and vision. The Board believes internal execution to be the single greatest risk against its 5-year financial plan. The Group recognises the key mitigations to protect the Group from this as set out in its Principal Risks on page 31. As a data and analytics company, the inherent nature of the industry in which the Group operates means that the repercussions of climate change on our business and products are relatively low compared with many other sectors and companies of our size. The Group acknowledges that while there are potential risks posed by climate change it also presents an opportunity for us to assist clients in comprehending and managing the impact of climate within their own businesses and markets. Further disclosure is provided within the Non-Financial and Sustainability Information Statement on pages 43 to 47. As at 31 December 2023, the Group had a fully drawn down term loan of £265.0m and an available undrawn RCF facility of £120.0m with a syndicate of banks. During January 2024, £20.0m of the RCF was drawn down to support a share buy-back. The Group’s banking facilities are in place until August 2025, however the Group intends to fully repay the term loan upon completion of the investment agreement with Inflexion. In the unanticipated event that completion does not occur, the Group will be required to renew or extend its financing arrangements. The Group has to date had a very supportive banking syndicate (as indicated by the successful renegotiation of the finance facilities in August 2022). As such the Directors do not believe there will be any issues in renegotiating the loan facilities in the future when necessary. On the basis that either the term loan is repaid in full, or refinancing is possible on similar terms to the existing facilities, the Board has reviewed forecast cash flows until 2028 which demonstrate the ability to trade with either ample cash resources or headroom on any required facilities. The Board is satisfied that the current financial position of the Group, its significant visibility on revenues and other business model fundamentals provides a stable platform for the Group to pursue its mission and vision. The Board is confident that in pursuing the four stated strategic priorities, this will protect business interests against threats and allow the Group to pursue opportunities that will drive growth. Mike Danson This report was approved by the Board of Directors on 4 March 2024 and signed on its behalf by Mike Danson, Chief Executive. 49 ANNUAL REPORT AND ACCOUNTS 2023Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements The Board recognises that culture is an important aspect of its four strategic priorities which ultimately drives the Group towards its mission. 50 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements Directors’ Report The Directors Corporate Governance Report Environmental, Social and Governance Audit Committee Report Directors’ Remuneration Report Statement of Directors’ Responsibilities 52 54 62 67 72 83 51 Strategic Report / Directors’ Report / Auditor’s Report / Financial StatementsDIRECTORS’ REPORT The Directors The Directors who served the Group during the year and up to the date of signing were: Murray Legg Non-Executive Chair Mike Danson Chief Executive Murray is a Chartered Accountant with over 35 years of audit and advisory experience gained with PricewaterhouseCoopers in the UK, where he held a variety of senior management, governance and client roles across a broad range of industry sectors. Murray joined the Board in February 2016 and became Non-Executive Chair in April 2021. Murray is currently also a Non-Executive Director of Sutton and East Surrey Water Plc. Mike Danson founded Datamonitor Plc, an online information company, in 1990. In 2000, Datamonitor completed its flotation on the London Stock Exchange and was sold to Informa Plc for £502m in 2007. GlobalData acquired the Datamonitor Financial, Datamonitor Consumer, MarketLine and Verdict businesses from Informa Plc in 2015. Graham Lilley Chief Financial Officer Graham joined the Group in 2011 and held senior finance positions before becoming Chief Financial Officer in January 2018. Since joining, the Group has grown significantly in scale and Graham has been involved in a number of corporate transactions, including; M&A, debt raising and corporate re-organisation. Graham started his career at PricewaterhouseCoopers, where he qualified as a Chartered Accountant and subsequently joined Datamonitor when it was part of Informa Plc. Annette Barnes Non-Executive Director (Senior Independent Director, Chair of Remuneration Committee) Annette joined the Board in February 2017. Annette is also a Non-Executive Director of Leeds Building Society and Stratos Markets Ltd, in addition to conducting consulting / advisory work. Prior to moving into a portfolio career, Annette’s most recent Executive role was CEO of Lloyds Bank Private Banking Limited and Managing Director for Wealth & Mass Affluent for Lloyds Banking Group. Prior to that, Annette was Managing Director of Bank of Scotland (Retail). Annette has over 35 years of Financial Services experience, working for Lloyds Banking Group, Bank of America, MBNA Europe Bank Ltd and NWS Bank Ltd. Annette’s prior experience has given her an excellent understanding of Technology, product channels to meet customer needs, Operational Management and Risk. 52 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements Catherine Birkett Non-Executive Director (Chair of the Audit Committee) Peter Harkness Non-Executive Director Catherine Birkett is Chief Financial Officer of GoCardless, a leading global account to account payments business. Joining in 2018 she has overseen a period when revenue has increased five times, lead three funding rounds, the last of which saw Gocardless reach unicorn status. Alongside finance, Catherine also leads legal, regulatory & compliance and business systems. Before joining GoCardless, Catherine was Chief Financial Officer for one of Europe’s fastest-growing telecoms providers, Interoute, where she took the business from $20m to $800m in turnover over 16 years, leading equity and debt raises, including an inaugural high yield debt issue. While there, she also completed 10 acquisitions, including one for a business half the size of Interoute, before overseeing a successful exit of the business in May 2018. Peter Harkness has more than 35 years’ experience as a Director or Chair of several successful businesses, predominantly in the media sector. In addition to leading a number of private equity deals, Peter has also spent more than 20 years as a Non-Executive Director of five quoted companies, including Walker Greenbank Plc and Chrysalis VCT Plc, and has twice been a Plc Chair. Peter was a Non-Executive Director of Datamonitor until its sale to Informa Plc and was Chair of the Butler Group until its sale to Datamonitor. Peter has also undertaken Board roles in the Third Sector. Peter’s experience and understanding of the media and information subscription sector is an excellent asset for the GlobalData Board, particularly how we sell and the selling process. Andrew Day Non-Executive Director Julien Decot Non-Executive Director Alongside his Non-Executive role at GlobalData, Andrew is the Operating CEO for a Sports Technology business, ai.io and holds a number of Non-Executive and advisory roles to a range of technology and data companies including VSN International and Data Leaders. Over the course of his career, Andrew has held a range of executive level roles including Group Chief Data Officer at Pepper Financial Services, Group Chief Data Officer for J Sainsbury Plc, Business Intelligence Director at News UK and General Manager of Business Intelligence at Telefonica. With over 30 years of experience in commercially orientated data and analytics, Andrew has a successful track record for implementing transformational data-driven change across a number of industry sectors. Julien is a veteran technology executive with more than 20 years’ experience in Silicon Valley and Europe across multiple senior roles in major technology companies including Amazon. com, eBay, Skype, Facebook and Intuit. He joined Skype in 2007, where he built the team in charge of Strategy, Business Development and Corporate Development. Prior to joining Facebook, he founded a mobile messaging company called TextMe, which reached 40m users and is now a profitable and successful business. He joined Facebook in 2016 to lead Platform Partnerships for EMEA. Since 2022, he has been leading International Business Development and Strategy for Intuit. Julien holds a BA in Finance from ESCP Europe in Paris, as well as an MBA from UC Berkeley. ANNUAL REPORT AND ACCOUNTS 2023 53 DIRECTORS’ REPORT Corporate Governance Report The Board has set out its responsibility for preparing the Annual Report and Accounts on page 83. The Board considers the Annual Report and the Accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company’s position and performance, business model and strategy. The Board is committed to the highest standards of corporate governance and throughout the year has adopted all requirements of the UK Corporate Governance Code that are applicable to it as a ‘smaller company’ (defined in the UK Corporate Governance Code as being a company below the FTSE 350), with the exception of the provisions listed below. Throughout 2023 there have been two instances of non-compliance with the Code. These are listed below, together with the remedial action taken and position as at 4 March 2024: Non-compliance with the Code Remediation taken In non-compliance with provisions 40 and 41 of the UK Corporate Governance Code, the Remuneration Committee had not engaged with employees and shareholders when setting remuneration. In non-compliance with provision 24 of the UK Corporate Governance Code, the Non- Executive Chair, Murray Legg, was also a member of the Audit Committee during 2023. The remuneration of the Executive Directors has not been set following engagement with shareholders and employees. Our Chief Executive does not receive a salary and therefore the review by our Remuneration Committee only relates to the role of CFO and the Senior Leadership Team. The Committee feels that its review of relevant benchmarks when setting remuneration for the CFO is appropriate. However, should there be any material change to the remuneration arrangements of the Executive Directors it will seek to consult with key institutional shareholders. Murray has worked within the audit and advisory sector for more than 35 years and as such provides a valuable source of financial knowledge and experience to the Audit Committee. Up to April 2021, Murray was the Chair of the Audit Committee, and remained a member of the Committee during 2022 despite stepping down as Chair to provide a period of support to the incumbent Audit Committee Chair, Catherine Birkett. Murray stepped down from the Audit Committee on 21 February 2023. Compliant for the full year ended 31 December 2023 Compliant as at 4 March 2024     The UK Corporate Governance Code is publicly available at: www.frc.org.uk/directors/corporate-governance-and-stewardship/ uk-corporate-governance-code Details of GlobalData’s corporate governance practices are publicly available on its website www.globaldata.com. Responsibility for governance matters lie with the Board, which is accountable to shareholders and wider stakeholders for the activities of the Group. 54 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements Board Leadership and Company Purpose The Group is led by the Board. The Executive Directors meet regularly with investors to discuss the performance and governance of the Group and any feedback is communicated and distributed to the wider Board. The Chairs of the Remuneration and Audit Committees make themselves available to discuss with investors annually at the AGM. The Board assesses the basis on which the Company generates and preserves value over the long term and has prepared a long-term viability statement on pages 48 to 49, which considers the 5-year financial plan. The Board considers the opportunities and threats to the business model and assessment is made on how the Group’s strategy is aligned to addressing the Group’s mission and protecting the sustainability of the business. The regular challenge and governance provided by the Board keeps the Senior Leadership Team and the entire organisation united in achieving the Group goals. The Board recognises that culture is an important aspect of its four strategic priorities which ultimately drives the Group towards its mission. The Group is a diverse, global business but we aim to have a common tone across the organisation. We promote agility, innovation, hard work and ethical behaviours underpinned by our framework of ethical codes. We invest in our employees’ training and development with clear progression and career plans that allow our colleagues to flourish. We deliver consistent training, communication and policy across the Group and within different work groups. We recognise that it is advantageous to promote different cultures within different functions of the organisation which all contribute to the overall culture of the business. For example, in recent years we have implemented a reward structure within our sales teams which is consistent across the globe and is aimed at getting the best out of sales teams, but the reward structures elsewhere in the business differ dependent on performance metrics. The Company has several company-sponsored and employee- driven groups to ensure that employees with shared characteristics, experiences and interests have a platform and relaxed space to voice their opinions, learn about diversity and inclusion challenges, and guide organisational practice and the prioritisation of initiatives. These groups are named Employee Resource Groups (‘ERGs’) and cover: Gender Balance, Race and Ethnicity (‘EmbRACE’), LGBTQ+ Allies (‘PRIDE’), which are all focused on our Diversity, Equity and Inclusion, plus Social & Leisure. We encourage our employees to share their feedback and ideas on the issues that matter to them and their colleagues. The ERGs act as a platform to gather and discuss feedback, suggest ideas for improvement, and help to implement them. Each group is led by passionate advocates with an executive sponsor from our Senior Leadership Team and with some meetings attended by Annette Barnes, our dedicated Non- Executive Director for workforce engagement. Updates from the initiatives led by the individual ERGs are published to colleagues on the internal intranet. The role of designated Non-Executive Director for employees has the aim of forging closer relationships between the Board and the workforce. This role includes being involved with the ERGs and reviewing any feedback from the whistleblowing hotline, providing a useful insight into employee matters. Due to these responsibilities within the role of Remuneration Chair and its links to employees, the Board does not believe that workforce representation on the Board is required. Our colleagues can also raise concerns in confidence and anonymously via our whistleblowing hotline, which is facilitated via an independent company, with any whistleblowing reports notified to our Group HR Director and the Senior Independent Non-Executive Director. The Group operates an intranet, which every employee has access to. The intranet publishes Company policies and procedures, and it is also used to communicate Company events, activities and regular corporate updates from the Chief Executive. The Directors have set out its wider stakeholder analysis in the Directors’ Section 172(1) Statement. The Board views renewal rates (which are published in the Chief Financial Officer’s Report) and payment statistics for a high-level view on the health of client and supplier engagement, but also has deep dives into engagement through discussion with commercial managers. Division of Responsibilities The Board is made up of two Executive Directors and six Non- Executive Directors. The Executive Directors who have served during the year are Mike Danson and Graham Lilley. The Chair is responsible for the running of the Board and, together with the Board members, approving the strategy of the Group. The Chief Executive is responsible for developing the Group’s strategy and operational management of the business. Our Non-Executive team comprises the Chair, Murray Legg; the Senior Independent Director, Annette Barnes; Andrew Day; Catherine Birkett; Julien Decot and Peter Harkness. 55 ANNUAL REPORT AND ACCOUNTS 2023DIRECTORS’ REPORT Corporate Governance Report (continued) All the Non-Executive Directors are considered independent, with the exception of Peter Harkness, who is not considered to be independent under the definition of the Code due to time served as a Director. However, the Board believes Peter is independent of mind and brings valuable experience to the Company. The Non-Executive Directors’ shareholdings are detailed in the Directors’ Interests table on page 60 of the report. The Board has determined that the Non-Executive Directors are independent and that their shareholding in the Company does not affect their independence. In 2023, the Board met 15 times during the year and there is a formal schedule of matters reserved for the consideration of the Board. The Board is responsible to the shareholders for the proper management of the Group. The Board sets and monitors the Group strategy, reviewing trading performance, ensuring adequate funding, examining development possibilities and formulating policy on key issues. The Board is also responsible for monitoring the current and emerging risk and control environment, and has set out its approach to risk on pages 28 to 38. The Board confirms that it has completed a robust assessment of the Group’s principal and emerging risks during the year. The Non-Executive Directors have the opportunity to meet without the Executive Directors in order to discuss the performance of the Board, its committees and individual Directors. All members of the Board have access to the Company Secretary who is responsible for advising the Board on all governance matters. Procedures are in place for the Directors in the furtherance of their duties to take independent professional advice, if necessary, at the Company’s expense. The Company Secretary ensures that the Board and its committees are supplied with papers to enable them to consider matters in good time for meetings and to enable them to discharge their duties. Responsibility for the appointment and removal of the Company Secretary is held by the Board as a whole. The Board has procedures that require Directors to notify the Chair and Company Secretary of all new external interests and any actual or perceived conflicts of interest that may affect their role as a Director of the Company. As part of this process, the Board considers each conflict situation separately according to the particular situation and in conjunction with the Company’s Articles. Composition, Succession and Evaluation The Nominations Committee was established to lead the process for appointments and manage succession plans for its executives. The committee is comprised of one Executive Director and three Non-Executive Directors, including the Chair. The Board is committed to ensuring that the Nominations Committee always consists of a majority of Independent Non-Executive Directors, but where there is an equal number of Independent and Non-Independent members the casting vote is made by the Independent Chair. The casting vote going to Murray Legg, the Non-Executive Chair of the Nominations Committee. Where the Nominations Committee uses an external search agency to appoint a member of the Board, it is disclosed in the Annual Report. When making new appointments the Board takes into consideration other demands on Directors’ time, and external appointments by any members of the Board require prior approval to confirm no conflicts of interest or significant demands on time. The role of the Nominations Committee is to: • • • • • • be responsible for identifying and nominating for the Board’s approval, candidates from a wide range of backgrounds to fill Board vacancies as and when they arise; consider proposals for the reappointment or promotion of Directors and also any proposal for their dismissal, retirement, non-reappointment or any substantial change in their duties or responsibilities or the term of their appointment; before the Board makes any appointment, evaluate the balance of skills, experience, independence, knowledge and diversity on the Board, and, in light of this evaluation, prepare a description of the role and capabilities required for a particular appointment; for the appointment of a Chair, prepare a job specification, including the time commitment expected, and require a proposed chair to disclose other significant commitments to the Board before appointment and disclose any changes to the Chair’s commitments to the Board as they arise; ensure that on appointment to the Board, Non-Executive Directors receive a formal letter of appointment setting out clearly what is expected of them in terms of time commitment, committee service and involvement outside Board meetings and the induction process; and keep under review the number of external directorships held by each Director. 56 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements The Group benefits from the diversity and variety of its workforce and is fully committed to maintaining and encouraging diversity, including the composition of the Board. The Board is currently made up of 6 male Directors and 2 female Directors and the Senior Leadership Team had 14 male employees and 2 female employees serve during the year. Individual Directors are appraised by virtue of their role within the Board, whereby the Chair appraises the Chief Executive and the Non-Executive Directors, the Chief Executive appraises the Chief Financial Officer and the entire Board appraises the Chair which is delivered by the Senior Independent Non-Executive Director. All Directors are required to stand for re-election every year. The terms and conditions of the appointment of the Non-Executive Directors are available for inspection at our registered office. Prior to recommending reappointments at the AGM, the Board considers whether each Non-Executive Director continues to be independent and to appropriately challenge Management, as well as each other, in Board and Committee meetings. Following review, the Board has reaffirmed that each Non-Executive Director is able to offer an external perspective on the business, is able to constructively challenge and scrutinise activities, is independent in character and judgement, and has the required experience necessary to perform their role as an independent Director. The Board conducts an annual evaluation process, which involves the performance appraisal of both the Executive and Non-Executive members of the Board. The review is undertaken by all Directors via an online survey on the overall performance of the Board during the year, which is fed back and debated, and then drives the actions and objectives of the Board. The Nominations Committee periodically reviews succession plans for the Board and Senior Management, with plans prepared on an immediate, medium and long-term basis. As a ‘smaller company’ (defined in the UK Corporate Governance Code as being a company below the FTSE 350) the Board has decided that the internal evaluation of Board performance conducted in the year is sufficient and that external facilitation of the evaluation is not necessary in this financial period. On 21 December 2023 the Nominations Committee met and confirmed all Non-Executive Directors continue to be independent, with the exception of Peter Harkness, who is not considered to be independent under the definition of the Code due to time served as a Director. However, the Committee continues to consider Peter to be independent of mind and noted the valuable experience he brings to the Group. Audit, Risk and Internal Control The Board has established Audit, Nomination, Related Party Transactions and Remuneration Committees with mandates to deal with specific aspects of its business. The table below details the membership and attendance of individual Directors at Board and committee meetings held during the year ended 31 December 2023. Board meetings during the year: Board Audit Committee Remuneration Committee Nominations Committee Related Party Transactions Committee Number of meetings Murray Legg Mike Danson Graham Lilley Annette Barnes Peter Harkness Andrew Day Catherine Birkett Julien Decot 15 15 15 14 15 13 15 15 1 – – 4 – 4 4 4 3 – – 3 – 3 – 3 2 2 – 2 – 2 – – 2 – – 2 – 2 2 – 57 ANNUAL REPORT AND ACCOUNTS 2023 DIRECTORS’ REPORT Corporate Governance Report (continued) Up until 21 February 2023, the Audit Committee comprised of the Chair Catherine Birkett, Murray Legg, Annette Barnes and Andrew Day. On 21 February 2023 Murray Legg stepped down from the Audit Committee and was replaced by Julien Decot. Catherine Birkett is a Chartered Accountant with recent and relevant financial experience. The Audit Committee met four times in the year with the external auditors in attendance. The CEO and CFO attend the meetings by invitation. The Audit Committee is responsible for: • Monitoring the integrity of the financial statements and any formal announcements relating to the Group’s financial performance, and reviewing significant financial reporting judgements contained in them; Providing advice on whether the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable, and provides the information necessary for shareholders to assess the Group’s position and performance, business model and strategy; Reviewing the Group’s internal financial controls and internal control and risk management systems; Considering annually whether there is a need for an internal audit function and reporting its view and findings to the Board; Conducting the tender process and making recommendations to the Board about the appointment, reappointment and removal of the external auditor, and approving the remuneration and terms of engagement of the external auditor; Reviewing and monitoring the external auditor’s independence and objectivity; Reviewing the effectiveness of the external audit process, taking into consideration relevant UK professional and regulatory requirements; and Developing and implementing policy on the engagement of the external auditor to supply non-audit services, ensuring there is prior approval of non-audit services, considering the impact this may have on independence, taking into account the relevant regulations and ethical guidance in this regard, and reporting to the Board on any improvement or action required. • • • • • • • 58 The Audit Committee discharges its responsibilities through receiving reports from Management and advisers, working closely with the auditors, carrying out and reviewing risk assessments and taking counsel where appropriate in areas when required to make a judgement. The Board has overall responsibility for the Group’s system of internal controls and for monitoring its effectiveness. Such a system is designed to manage rather than eliminate risk of failure to achieve business objectives and can only provide reasonable and not absolute assurance against material misstatement or loss. The internal controls are considered within the Principal and Emerging Risks and Uncertainties section of the Strategic Report on pages 28 to 38. The Directors review the effectiveness of the Group’s system of internal controls. This review extends to all controls including financial, operational, compliance and risk management. Formal risk review is a regular Board agenda item. The key controls reviewed by the Board during the year comprise the following: • The preparation of comprehensive annual budgets and business plans integrating both financial and operational performance objectives, with an assessment of the associated business and financial risks. The overall Group budget and business plan is subject to approval by the Board; • Weekly sales reports are produced and reviewed by management; • Monthly management accounts are prepared and reviewed by the Board. This includes reporting against KPIs and exception reporting; • • • An organisational structure with formally defined lines of responsibility. Authorisation limits have been set throughout the Group; The monthly preparation and review of balance sheet control account reconciliations; and Regular review of IT and cyber security controls and enhancements. The Board, in conjunction with the Audit Committee, reviewed the Annual Report and Accounts for the year ended 31 December 2023 to ensure that they provide a fair, balanced and understandable reflection of the Group, its performance, position and future prospects. Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements Remuneration The Remuneration Committee comprises the Chair Annette Barnes, Murray Legg, Andrew Day and Julien Decot. The Remuneration Committee is responsible for determining the service contract terms, remuneration and other benefits of the Executive Directors and reviewing senior team members’ remuneration on an annual basis, details of which are set out in the Directors’ Remuneration Report on pages 72 to 82. The terms of reference of the Remuneration Committee are available for inspection on request. As part of Annette’s role as Remuneration Committee Chair, she has undertaken the role of designated Non-Executive for the workforce. This role involves a close working relationship with the Group HR Director and the ERGs. Engagement with the workforce spans a range of items including culture, remuneration and well-being. The Board see this as an important duty to drive positive actions. To date, in non-compliance with provisions 40 and 41 of the UK Corporate Governance Code, the remuneration of the Executive Directors has not been set following engagement with shareholders and employees. Specific engagement with colleagues relating to executive remuneration has not taken place due to there being no material changes during the period. The remuneration of the Executive Directors has been set as outlined in the Remuneration Policy which addresses the requirements of provision 40 with the exception disclosed above. The Committee feels that its review of relevant benchmarks when setting Executive remuneration is appropriate. The Board did engage with large shareholders when deciding to modify the targets of the Group’s LTIP during 2022. Should there be any material change to the Remuneration arrangements of the Executive Directors in the future the Remuneration Committee will seek to consult with key stakeholders. Related Party Transactions The Related Party Transactions (RPT) Committee comprises the Chair Murray Legg, Catherine Birkett, Annette Barnes and Andrew Day. The Committee met twice during 2023. The Committee ensures that there are adequate controls in place to provide assurance that any transaction which is or may be a related party transaction in nature is conducted on terms that are at arm’s length and reasonable. Going Concern The Group meets its day-to-day working capital requirements through free cash flow. Based on cash flow projections, the Group considers the existing financing facilities to be adequate to meet short-term commitments as discussed in more detail on page 48. The Directors have a reasonable expectation that there are no material uncertainties that cast significant doubt about the Group’s ability to continue in operation and meet its liabilities as they fall due for the foreseeable future, being a period of at least 12 months from the date of approval of the financial statements. Accordingly, the Group has prepared the Annual Report and Accounts on a going concern basis. Long-Term Viability The Directors have set out a long-term viability statement on pages 48 to 49 of the Strategic Report. Shareholder Relationships The Company operates a corporate website at www.globaldata.com where information is available to potential investors and shareholders. The Board uses the AGM to communicate with shareholders and seek their participation, as well as one-to-one results presentations with investors at each full year and interim results announcement. The Group also held a Capital Markets Day for its institutional investors, brokers and research analysts on 24 January 2023 and on 24 January 2024 to give an update on strategy. The Notice of the Annual General Meeting will be circulated more than 21 clear days prior to the meeting. The Directors’ interests are disclosed on page 60, which includes the shareholding of Mike Danson, who owns 488,092,406 shares as at 4 March 2024, representing 57.8% of the total share capital. There are no other individual shareholders owning more than 10% of the company’s issued share capital. There are no specific restrictions on the size of a holding nor on the transfer of shares, which are both governed by the general provisions of the Articles of Association and prevailing legislation. The Directors are not aware of any agreements between holders of the Company’s shares that may result in restrictions on the transfer of securities or on voting rights. No person has any special rights of control over the Company’s share capital and all its issued shares are fully paid. With regard to the appointment and replacement of Directors, the Company is governed by its Articles of Association, the Companies Act and related legislation. The Articles themselves may be amended by special resolution of the shareholders. The powers of Directors are described in the Board Terms of Reference, copies of which are available upon request. The Company has the authority to make market purchases of up to 10% of the Company’s total issued ordinary share capital, either for cancellation or for placing into treasury. The authority is proposed each year as a resolution at the Company’s AGM for shareholders to vote on. 59 ANNUAL REPORT AND ACCOUNTS 2023DIRECTORS’ REPORT Corporate Governance Report (continued) Employee Policies The Group places considerable value on the involvement of its employees and keeps them informed on matters affecting them as employees and on the factors affecting the performance of the Group. This is achieved through formal and informal meetings. As part of Group communications we hold regular Chief Executive Information Sessions, which are video conference meetings attended by all Group employees. These meetings are used as a forum to keep our colleagues up to date with performance, strategy and other corporate communication. Annette Barnes’ role as workforce designated Non-Executive also helps to increase engagement between the Board and the wider workforce. The Group benefits from the diversity and variety of its workforce and is fully committed to maintaining and encouraging diversity. It is the Group’s policy to give full and fair consideration to the employment of disabled persons, the continuing employment of employees becoming disabled, and to the full development of the careers of disabled employees, having regard to their particular abilities. The Group does not discriminate on the grounds of gender, race, disability, sexuality, religion, philosophical belief, political belief, trade union membership or age as guided by the Equality Act 2010. As at 31 December 2023, the Group employed the following number of employees of each gender: Male Female 2023 No. 1,964 1,568 3,532 2022 No. 2,009 1,643 3,652 Health and Safety It is the policy of the Group to conduct all business activities in a responsible manner, free from recognised hazards and to respect the environment, health and safety of our employees, customers, suppliers, partners, neighbours and the community at large. Political Donations The Group has not made any political donations during the current year or prior year. Supplier Payments Policy It is the Group’s policy to abide by the payment terms agreed with suppliers whenever it is satisfied that the supplier has provided the goods and services in accordance with agreed terms and conditions. During 2023, average creditor days were 36 days (2022: 38 days). 60 Subsequent Events As a result of the investment agreement with Inflexion, a number of Healthcare specific subsidiaries have been incorporated since 31 December 2023. Dividends These are disclosed within the Strategic Report on page 9. Financial Instruments Use of financial instruments and exposure to various financial risks has been discussed within the Strategic Report (page 25). Future Developments Future developments have been discussed within the Chief Executive’s Report on page 15. Directors’ Interests Details of the Company’s share capital are set out in note 24 to the financial statements. As at 4 March 2024, Mike Danson had a beneficial interest of 57.8% of the issued ordinary share capital of the Company. No other person has notified any interest in the ordinary shares of the Company, in accordance with AIM Rule 17. The interests of the Directors as at 4 March 2024 in the ordinary shares of the Company were as follows: Mike Danson Peter Harkness Murray Legg Graham Lilley Number of ordinary shares 488,092,406 226,329 164,200 107,100 As at 31 December 2023, Graham Lilley held 2,142,857 1/100 pence share options (2022: 2,678,571) all of which were in Scheme 2. Directors’ Indemnities To the extent permitted by English law and the Articles, the Directors are granted an indemnity from the Group in respect of liability arising from, or in connection with, the execution of their powers, duties and responsibilities as a Director of the Company and any of its subsidiaries. The indemnity would not provide coverage where the Director is proved to have acted fraudulently or dishonestly. The Group purchases and maintains Directors’ and Officers’ insurance cover against certain legal liabilities and the costs of claims in connection with any act or omission by its Directors and Officers in the execution of their duties. Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements Strategic Report / Corporate Governance / Financial Statements We continue to recognise that how we engage with our people, clients, business partners, the wider community and environment is fundamental to the Group’s success. The Group is committed to focusing on creating and maintaining positive long-term relationships with our broad base of stakeholders. 61 61 ANNUAL REPORT AND ACCOUNTS 2023Strategic Report / Directors’ Report / Auditor’s Report / Financial StatementsDIRECTORS’ REPORT Environmental, Social and Governance Environmental, Social and Governance (“ESG”) matters are a key part of our strategy, and the Board is focused on safeguarding long-term viability and sustainable growth for the Group, our people, our clients, our environment and communities as well as our shareholders. We continue to recognise that how we engage with our people, clients, business partners, the wider community and environment is fundamental to the Group’s success. The Group is committed to focusing on creating and maintaining positive long-term relationships with our broad base of stakeholders. Founded on 5 pillars, ESG is at the heart of who we are and what we do: Our Company Our People Our Clients Our Environment Our Communities We strive to establish strong governance which highlights our core values Our colleagues and the inclusive culture they evolve in is key to the success of our organisation The intelligence we provide our clients with to drive growth, positive social and environmental impact through their business Our effort to limit any negative impact on the environment The support we provide to charitable organisations globally Our People The Group benefits from the diversity and variety of its workforce and is fully committed to maintaining and encouraging diversity. It is the Group’s policy to give full and fair consideration to the employment of disabled persons, the continuing employment of employees becoming disabled, and to the full development of the careers of disabled employees, having regard to their particular abilities. The Group does not discriminate on the grounds of gender, race, disability, sexuality, religion, philosophical belief, political belief, trade union membership or age as guided by the Equality Act 2010. % Female Board Senior Leadership Team Group Colleagues As at 31 December 2023 As at 31 December 2022 25% 25% 13% 44% 18% 45% Change – -5 p.p. -1 p.p. Our Company The Board is committed to achieving the highest standards of corporate governance. The Group is working towards full adoption of the UK Corporate Governance Code. Responsibility for governance matters lies with the Board, which is accountable to shareholders and wider stakeholders for the activities of the Group. We are also working towards reporting our ESG activities/performance against GRI standards and SASB. GlobalData has improved its governance arrangements and reporting over the past three years. During the year we have: Reviewed areas in the UK Corporate Governance Code in which we were not compliant. There is a table of actions and outcomes on page 54 to demonstrate this; good progress has been made compared with the previous year; Enhanced our reporting on remuneration matters, as well as continuing to enhance engagement with shareholders; Continued the strong engagement with our people through Employee Resource Groups, with a clear link to the Board and the initiation of a Group-wide colleague engagement survey as part of our commitment to creating an engaging environment for GlobalData’s colleagues; Continued to reduce the amount of related party transactions and set clear targets of reduction in this area, which we have placed enhanced governance procedures over; and Continued to progress towards a more mature control environment and embedded the enhanced Enterprise Risk Management Framework across the Group. • • • • • 62 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements During the year: • We have continued to promote the Group’s values launched in 2022: • • • Courage – We courageously guide our customers and the markets we serve, to a more successful, sustainable future. We are committed, trustworthy, and resilient when making a positive difference. Curiosity – The world is always changing and so are we. We have a curiosity for opportunities to innovate and do things better, with an appetite for experimentation and thinking differently. Collaboration – We work together and combine our powerful resources to provide clarity in a complex world. We believe in the collective power of data, technology, expertise and collaborative relationships to succeed. Continued to engage with the colleague-led Employee Resource Groups (ERGs), with over 180 colleagues as members covering: • • • • Gender Balance Race and Ethnicity (‘EmbRACE’) LGBTQ+ Allies (‘PRIDE’) Social & Leisure Our Graduate and Internship programmes continue to grow and develop and include a greater breadth of job roles in the organisation. • • • Conducted a Group wide colleague engagement survey. Our Clients Customer Obsession is our number one strategic priority and we continue to focus on client needs and on providing unique and innovative solutions. We strive to maintain strong customer relationships and endeavour to build even deeper relationships. We have a number of ongoing initiatives with the aim of increasing engagement with our clients. Our ongoing initiatives are aimed at providing clients with world-class solutions delivered with exceptional levels of service. With AI advancements helping to drive customer success, our customer engagement intelligence is helping us to target specific recommendations for clients such as flagging relevant content and customising solutions. Initiatives are constantly underway to ensure our people are engaging with customers as much as possible, being face-to-face to understand customer needs in order to pivot towards a more solutions-based approach. The net result of our Customer Obsession is a continuation of strong renewal rates, on a volume basis our renewal rates were 84% (2022:84%), as well as greater levels of profitability. Looking ahead, we remain laser focused on improving in the different areas of Customer Obsession. Our Environment As a data and analytics company, our products are created and distributed digitally. This means our carbon footprint is considerably smaller than those of many other companies of our size. However, we are committed to minimising the impact of our operations on the environment. The Group is pleased to report its current UK-based annual energy usage and associated annual greenhouse gas (“GHG”) emissions pursuant to the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 (“the 2018 Regulations”) that came into force 1 April 2019. In accordance with the 2018 Regulations, the energy use and associated GHG emissions are for those assets owned or controlled within the UK only as defined by the operational control boundary. Therefore, energy use and emissions are aligned with financial reporting for the UK subsidiaries and exclude the non-UK based subsidiaries that would not qualify under the 2018 Regulations in their own right. This includes 7 offices, 1 company-owned vehicle and the mandatory inclusion of scope 3 business travel in employee-owned or rental vehicles (grey fleet). The 2019 UK Government Environmental Reporting Guidelines and the GHG Protocol Corporate Accounting and Reporting Standard (revised edition) were followed. The 2023 UK Government GHG Conversion Factors for Company Reporting were used in emission calculations as these relate to the majority of the reporting period. The report has been reviewed independently by Briar (Briar Consulting Engineers Limited). Electricity and gas consumption were based on invoice records, with some pro-rata estimation techniques used to fill minor gaps. One office’s energy consumption has been estimated using the CIBSE TM46 benchmark technique due to lack of data. Mileage expense claims were used to calculate energy and emissions from company owned vehicles and grey fleet. Gross calorific values were used except for mileage energy calculations as per Government GHG Conversion Factors. The emissions are divided into mandatory and voluntary emissions according to the 2018 Regulations, then further divided into the direct combustion of fuels and the operation of facilities (scope 1), indirect emissions from purchased electricity (scope 2) and further indirect emissions that occur as a consequence of company activities but occur from sources not owned or controlled by the organisation (scope 3). 63 ANNUAL REPORT AND ACCOUNTS 2023DIRECTORS’ REPORT Environmental, Social and Governance (continued) Breakdown of Energy Consumption Used to Calculate Emissions (kWh) Mandatory requirements: Purchased electricity Gas Heat Transport fuel Total gross energy consumed (mandatory) Breakdown of Emissions Associated with the Reported Energy Use (tCO₂e) Mandatory requirements: Scope 1 Gas Company-owned vehicles Scope 2 Purchased electricity (location based) Heat Scope 3 Category 6: Business travel (grey fleet) Total gross emissions (mandatory: location based) Voluntary requirements: Scope 2 Purchased electricity (market based) Total gross emissions (mandatory and voluntary: market based) 2023 kWh 2022 kWh 1,136,038 1,126,345 524,694 50,160 19,122 553,111 50,160 15,167 1,730,014 1,744,783 2023 tCO₂e 96.0 0.1 235.2 9.2 4.6 345.1 258.7 368.6 2022 tCO₂e 101.0 0.2 217.8 9.2 3.6 331.8 294.9 408.9 Intensity Ratios Our chosen carbon intensity ratio is gross tonnes of carbon dioxide equivalent emissions per million pounds (£m) of revenue. Tonnes of CO2e per £m of revenue Year ended 31 December 2023 Year ended 31 December 2022 1.85 2.09 Our activities are split between energy used in buildings and for business travel. As a consequence, we have also chosen to report gross tonnes of carbon dioxide equivalent emissions per 1,000 metres squared of office space for emissions related to buildings, and gross tonnes of carbon dioxide equivalent emissions per 1,000 miles travelled for emissions related to business travel. 64 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements Buildings Tonnes of CO2e per 1,000 m2 Gross Internal Area (GIA) Business Travel Tonnes of CO2e per 1,000 miles Year ended 31 December 2023 Year ended 31 December 2022 31.0 44.4 Year ended 31 December 2023 Year ended 31 December 2022 0.268 0.275 Energy Efficiency Action During Current Financial Year The Group continues to review energy efficiency across all locations and has implemented the following energy efficiency actions this year: • • • • • The time clock settings on HVAC systems in the London offices have been reviewed and adjusted to enhance energy optimisation for those systems; In the Manchester office, the old gas-fired heating system has been replaced with electric heating powered by 100% renewable electricity, aiming to decrease carbon emissions; The Group has been progressing towards procuring 100% renewable energy in situations where there is direct control over supply contracts. Carbon-neutral Biogas now supplies all the gas for the London headquarters; The transition to LED lighting in offices is ongoing as older fittings become obsolete and require replacement; and The office in Oxford has been relocated to a smaller footprint, equipped with newer HVAC plant, and LED lighting. The expectation is to demonstrate an overall reduction in energy usage for that facility. It is encouraging to see that some of the actions taken have made a positive impact within energy intensity ratios. It is pleasing to see the intensity per £m revenue decrease but more so the energy per m2 of office space. As is consistent with our operating model of a relatively fixed cost base, we would not expect to have to increase the energy consumption significantly to deliver more revenue and therefore we would always expect to see the ratio against revenue to improve as revenue grows. However, the CO2e per 1,000 m2 ratio does provide a metric of how we are working to make our offices more energy efficient. Whilst overall purchased electricity has increased due to changes in our property footprint throughout the year, CO2e per 1,000 m2 ratio has reduced, which points to the improved energy efficiency measures within the properties we occupy. The Directors believe that environmental risk factors are emerging for the Group but are not a principal risk to the Group. 65 ANNUAL REPORT AND ACCOUNTS 2023DIRECTORS’ REPORT Environmental, Social and Governance (continued) Our Communities As a company, we have charity partners across the globe, with a particular focus on charities that help with mental well-being, education and empowering women in education. During the year we supported the following charities and communities: • Sadhana Society – Established in 1996, the Sadhana Society is dedicated to the welfare of the intellectually challenged based in Hyderabad. The charity operates a day-care and residential centre for children with intellectual disability; • Asha Kuteer – The Asha Kuteer Foundation was established in 2013 with the aim of providing holistic care in education, health, and emotional needs. The foundation has three homes in different parts of Hyderabad that cares for underprivileged, orphaned and visually impaired children; PHIN – A local school and residential facility in Hyderabad for hearing impaired children. PHIN supports around 120 young people; Sai Seva Sangh – Sai Seva Sangh was established in August 1988 to provide education to underprivileged children, free shelter to old age and impoverished women, with a special needs school for differently-abled rural children; and Seva Bharathi – Runs multiple skills development programmes to help underprivileged women and children to become more self-reliant. • • • We will continue to work with our charity partners and offer a volunteer programme to our colleagues to enable them to get more involved directly in our communities as well as our usual fundraising efforts. 66 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements DIRECTORS’ REPORT Audit Committee Report Audit Committee – snapshot Members, attendance and number of meetings: The Committee comprises four independent Non-Executive Directors consisting of myself, Catherine Birkett, as Chair, Annette Barnes, Andrew Day and Julien Decot. Up to 21 February 2023, Murray Legg was also a member of the Committee however this was not in compliance with provision 24 of the UK Corporate Governance Code given Murray’s position as Non-Executive Chair of the Group. Murray worked within the audit and advisory sector for more than 35 years and as such provided a valuable source of financial knowledge and experience to the Audit Committee as well as providing a period of support to myself following my appointment in April 2021. Murray stepped down from the Committee on 21 February 2023 and Julien Decot became a member on the same date. I am satisfied that the Audit Committee has a good balance of experience and expertise and is appropriately independent of the operations of the business. During the year the Audit Committee met on four occasions. I am satisfied that the committee was presented with papers of good quality and in a timely fashion. Name Details No. of meetings attended Catherine Birkett Member since April 2021 (Chair since April 2021) Annette Barnes Member since February 2017 Andrew Day Julien Decot Murray Legg Member since February 2017 Member since February 2023 Member since February 2016 (Stepped down February 2023) 4 4 4 4 1 Terms of Reference The Committee operates within the mandate as agreed by the Board. The Terms of Reference of the Audit Committee are available for inspection upon request. Areas of responsibility The Audit Committee assists the Board in setting governance standards and has specific responsibility over financial controls, financial reporting and audit effectiveness. Specifically, the Audit Committee has the delegated responsibilities for the following: • • • • • To monitor the integrity of the Group’s Financial Reporting; To review and monitor the Group’s internal financial controls and internal control and risk management processes; To make recommendations to the Board on the appointment, reappointment and removal of the Company’s external auditor and approve the remuneration of the external auditor; To review and monitor the external auditor’s independence and objectivity (including processes to review non-audit services) and the effectiveness of the audit process; and To report to the Board on how it discharges its responsibilities. 67 ANNUAL REPORT AND ACCOUNTS 2023DIRECTORS’ REPORT Audit Committee Report (continued) Audit Committe – snapshot (continued) Key actions in 2023 In 2023, the Audit Committee has been focused on: • Monitoring the integrity of the Group’s Annual Report for the year ended 31 December 2022 to ensure it was fair, • • balanced and understandable; Reviewing the financial performance of the Group throughout the year; Assessing the accounting implications for the year ended 31 December 2023 of the investment agreement with Inflexion, expected to complete in Q2 2024, specifically in relation to the assessment of control and completion date, the put and call options, accounting for the transaction fees and the impact on the Group’s debt and hedge accounting; • Monitoring the adequacy and effectiveness of the Group’s internal control and risk management process, ensuring that a robust assessment of the principal risks facing the Group has been undertaken; • • Reviewing the Group’s climate-related financial risks and opportunities assessment; and Assessing the external assurance obtained by the Group and considering the need for further assurance, including internal audit. Key priorities in 2024 Review of the financial performance of the Group; Assess the implications of the three new divisions on the Group’s assessment of operating segments and cash generating units; Assess the accounting implications post completion of the investment agreement with Inflexion for the year ended 31 December 2024; Continue to monitor and challenge the control environment and adequacy and effectiveness of the Group’s internal control and risk management framework; Continue to apply robust scrutiny on M&A opportunities and integration, ensuring new acquisitions are quickly onboarded into our control environment; and Review of overseas operations, particularly any new areas that have been acquired through M&A. • • • • • • 68 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements Dear Shareholders On behalf of the Audit Committee, I am pleased to present the Audit Committee report to you for the financial year ended 31 December 2023. The report will consider four main areas: the integrity of financial reporting, the effectiveness of internal controls and risk management framework, significant financial estimations and judgements, and the external auditor. The Integrity of Financial Reporting We reviewed the integrity of the financial statements and all formal announcements relating to financial performance during 2023. As part of the review, we challenged Management on whether significant areas of judgement and significant risks were adequately evaluated, reported and disclosed. As well as the integrity, we also considered whether the report gives a fair, balanced and understandable reflection of the Group, its performance, position and future prospects. As part of the review, the Committee considered whether: • • • • There are any material or sensitive omissions from the narrative and statements; The narrative is a true and balanced reflection of events and performance in the year; There is consistency throughout the Annual Report and Accounts; and There is a clear explanation of key performance indicators, their link to performance and strategy and equal prominence of statutory performance measures. In the view of the Committee, the Annual Report is fair, balanced and understandable in accordance with the requirements of the UK Corporate Governance Code. The Effectiveness of Internal Controls and Risk Management Framework The Audit Committee monitors the adequacy and effectiveness of internal control and risk management systems and ensures that a robust assessment of the principal risks facing the Group has been undertaken. During the year, the Committee has assessed the documentation and review that has taken place with regard to the Group’s internal controls and risk management procedures, in line with the policies set out in the Group’s Risk Management Framework. The Group’s approach to internal controls is to follow a three lines of defence model and the Committee is satisfied, with the control design as well as the policies and procedures in place. The Committee is satisfied that the review of internal controls and risk assessment were carried out in a robust manner. It was noted in the previous Audit Committee report for the year ended 31 December 2022 that the Committee recognised some further actions were required to improve its systems, processes and controls in respect of the IT control environment and the revenue business process. The Committee is satisfied that Management have formalised and implemented a new review control to address the prior year recommendations in respect of the revenue business process, however the Committee recognises that deficiencies still remain within the IT environment. As such the Group will continue to invest in its systems and enhance its processes to improve the controls in this area throughout 2024. The Audit Committee has considered the need for a separate internal audit function and notes that there are some elements of internal audit that are currently outsourced, including specific agreed-upon controls reviews in our Indian business and independent penetration testing of our websites, but due to the size of the Group and procedures in place to monitor both trading performance and internal controls, it was concluded that an entirely separate internal audit department was not required. The Audit Committee and Board are continually assessing the need for additional assurance procedures within the Group. 69 ANNUAL REPORT AND ACCOUNTS 2023 DIRECTORS’ REPORT Audit Committee Report (continued) Significant Financial Estimations and Judgements Issue Consideration of estimation or judgement Minority investment in the Group’s Healthcare business expected to complete in Q2 2024 On 21 December 2023, the Group announced that it had exchanged on a transaction to sell 40% of the Group’s Healthcare business to Inflexion. Management assessed the accounting implications arising from the transaction for the year ended 31 December 2023, taking into consideration the specific details set out in both the Share Option Agreement and Co-Investment Agreement. The most significant judgements included: • Assessment of Control – Management considered the requirements of the applicable accounting standards, specifically ‘IFRS 10 – Consolidated Financial Statements’ and concluded that GlobalData Plc will have control of the Healthcare business, the results of which will therefore continue to be fully consolidated into the results of the GlobalData Plc Group from the date of completion. As at the same date, the Group will recognise a non-controlling interest within equity in the Group’s Statement of Financial Position. • • • • Put and Call Options – At the point at which all of the Conditions Precedent of the investment agreement with Inflexion have been fulfilled, the Group or Inflexion can exercise an option to sell (put option)/buy (call option) the 40% shareholding in the Group’s Healthcare business, following which the transaction will complete. Management have assessed that the put and call options meet the definition of a derivative as per ‘IFRS 9 – Financial Instruments’, and as such the options are measured at fair value and any movement in fair value will be recognised in the Income Statement. Management have measured the fair value of the options as at 31 December 2023 to be £nil. Completion date – Management considered the Conditions Precedent set out within the Share Option Agreement, noting that the Conditions, some of which are outside of the control of the Group, must be fulfilled before the Put and Call Options can be exercised. As such, Management have concluded that the completion date will be the point at which the Options are exercised and as at 31 December 2023 the definition of a financial asset in accordance with IAS 32 has not been met. The Group does not have a virtually certain right to receive the cash proceeds from Inflexion and hence no receivable has been recognised within the Statement of Financial Position. Transaction Fees – Legal and professional fees incurred in relation to the transaction are recognised as a prepayment on the Group’s Statement of Financial Position as at 31 December 2023, representing incremental costs that are related directly to a probable future equity transaction. The costs will be transferred to equity when the equity transaction is recognised (creation of the non-controlling interest), or in the event that the put and call option is not exercised, the costs will be recognised in the Income Statement at the point that the transaction is no longer expected to complete. Debt and Hedge Accounting – At completion of the transaction, the Group will repay in full the outstanding term loan and RCF from the disposal proceeds in accordance with the mandatory prepayment clause of the Facilities Agreement. In accordance with the requirements of ‘IFRS 9 – Financial Instruments’ Management have updated the expected cash payment profile for the term loan within the recalculation of the carrying amount of the cost of the liability as at 21 December 2023, to reflect full settlement, noting that IFRS 9 specifies estimates of payments. By discounting the payments at the effective interest rate (‘EIR’) of 9.62%, being the EIR at the time of exchange, a cost of £3.4m is included in interest in the income statement. As of 21 December 2023, the hedged item (i.e. the future interest costs on the term loan) are no longer highly probable to occur and hence hedge accounting has been discontinued in accordance with IFRS 9. The Committee has carefully considered Management’s detailed assessment in respect of each of the considerations noted above and agree with the conclusions reached. Share-based payments The Committee reviewed the calculation and assumptions used in calculating the share-based payments charge. The valuation of new awards granted was conducted by an external consultant and the Committee considered this report when concluding that the share-based payments charge contains fair and reasonable assumptions (such as expected employee churn and Black-Scholes assumptions). Carrying value of goodwill and acquired intangible assets The impairment test for the carrying value of goodwill and acquired intangible assets requires forward-looking value-in-use calculations that involve assumptions and judgements by the Management team. The Audit Committee sought to review these calculations and challenge the assumptions contained within, particularly around future revenue growth assumptions and discount rate used. The Committee concluded that the impairment review had been completed in line with the provisions of IAS36 and that Management had used a range of sensitivities to stress test the models used. The Audit Committee was satisfied with the conclusions reached by Management. Allocation of Cash- Generating Units The Committee reviewed Management’s analysis of cash-generating units (“CGUs”) and assessed its conclusion that there were 2 CGUs as at the date of the intangible asset impairment review (30 September), namely: Data, Analytics and Insights and Media Business Insights. The Committee noted that the Group’s strategy is to fully integrate acquisitions into the platform, along with sales teams, product teams and central costs. As a result of this strategy - to create a unique single platform for Data, Analytics, and Insights, it is reasonable to conclude that once an acquisition integration programme has fully completed, the asset and associated cash flows would consolidate into the Data, Analytics and Insights CGU. The Committee therefore agree with Management’s assessment that both LMC and TS Lombard, which were previously classified as two separate CGUs, are now fully integrated into the GlobalData platform and their cash flows are now integrated with the wider CGU and as such are no longer separate CGUs. 70 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements Issue Consideration of estimation or judgement Adjusted performance measures (APMs) The Committee reviewed the Strategic Report and the financial statements contained within the Annual Report and Accounts to ensure that APMs were not given undue prominence over statutory numbers, that adjustments made to get to the APMs were consistent with previous years and that the adjustments gave the reader a clearer understanding of the underlying performance of the business. The Committee is satisfied that the Annual Report and Accounts give a balanced and fair view of performance and APMs are presented in a consistent and clear manner, so that they contribute to the reader’s overall understanding of the accounts and the business performance. Financial Reporting Council review During the year, a letter was received from the Financial Reporting Council (“FRC”) in relation to the Group’s Annual Report and Accounts for the year ended 31 December 2022. The FRC is appointed to periodically review the reports produced by listed companies and the reviews are designed to stimulate improvements in the quality of corporate reporting. The Group’s Audit Committee had oversight of the responses provided by Management to the FRC’s enquiries. Management responded to the FRC, undertaking to restate the Consolidated Statement of Cash Flows for the year ended 31 December 2022 in the Annual Report and Accounts, the details of which are presented in the 2022 restatements section of the Accounting Policies on page 112. The review conducted by the FRC focussed entirely on the Group’s 2022 Annual Report and Accounts and did not provide any assurance that the 2022 Annual Report and Accounts are correct in all material respects; the FRC’s role is not to verify information but rather to consider compliance with reporting requirements, the FRC accepts no liability for reliance on their review by the Company or any third party. The Committee welcomed the comments received by the FRC, has incorporated matters raised into the Annual Report where appropriate and is supportive of the FRC’s goal of increasing transparency in corporate reporting. External Auditor In order to maintain the independence of the external auditors, the Board has determined that non-audit work will not be offered to the external auditors unless there are clear efficiencies and only where such work is permitted under the Financial Reporting Council’s Ethical Standard. The Audit Committee annually reviews the remuneration received by the auditors for audit services and non-audit work. Their audit and non-audit fees are set, monitored and reviewed throughout the year (see note 6 of the financial statements). The Group has adopted the Competition and Markets Authority Order (CMA Order) and will rotate audit firms at least every 20 years and tender at least every 10 years. 2023 was Deloitte LLP’s (Deloitte) fourth year as Group auditor. The Committee has reviewed the effectiveness of the audit and audit team and recommends the reappointment of Deloitte for 2024. We believe that their independence, their objectivity and the effectiveness of the external audit is strong. This is safeguarded through their continuing challenge, their focused reporting and their discussions with both Management and the Audit Committee in planning and concluding their work. The Committee confirms that there are no contractual obligations that restrict the choice of external auditor. Catherine Birkett Chair of the Audit Committee 4 March 20234 71 ANNUAL REPORT AND ACCOUNTS 2023DIRECTORS’ REPORT Directors’ Remuneration Report Unaudited information Remuneration Committee – snapshot Members, attendance and number of meetings: The Committee comprises four independent and Non-Executive Directors and consists of myself, Annette Barnes, as Chair, Andrew Day, Julien Decot and Murray Legg. Committee members do not receive performance related pay and have not been awarded any Long-Term Incentive Plan (LTIP) options. The composition of four independent Non-Executive Directors on the Committee as at 31 December 2023 is compliant with the provisions of the UK Corporate Governance Code and the appointment periods for myself, Andrew Day and Murray Legg were extended during 2023 in line with the Committee’s Terms of Reference. I am satisfied that the Remuneration Committee has a good balance of experience and expertise and is appropriately independent of the operations of the business. During the year the Remuneration Committee met on three occasions. I am satisfied that the Committee was presented with papers of good quality and in a timely fashion. Name Details Annette Barnes Member since February 2017 (Chair since April 2021) Murray Legg Julien Decot Andrew Day Terms of Reference Member since February 2016 Member since April 2021 Member since February 2017 No. of meetings attended 3 3 3 3 The Committee operates within the mandate as agreed by the Board. The Terms of Reference of the Remuneration Committee are publicly available on the Company’s website and were refreshed during the period to ensure the Committee continues to operate at maximum effectiveness. Areas of responsibility The Remuneration Committee has the delegated responsibility for setting remuneration strategy and specific Executive Director remuneration, in addition to overseeing remuneration strategy and culture for the Group. The key activities of the Remuneration Committee are: • Setting remuneration policy for Executive Directors; • Setting remuneration for the Chair and Executive Director(s) and reviewing senior team members’ remuneration on an annual basis; • Approving any awards and vesting events under LTIP schemes; and • Reviewing broader workforce remuneration principles and alignment with culture. Key actions in 2023 During 2023, the Remuneration Committee focused on: • Reviewing existing LTIP schemes, in conjunction with the Company’s share capital reorganisation, to ensure they remained operationally valid and continued to meet their originally stated objectives for all stakeholders; • Engaging with the colleague-led Employee Resource Groups (ERGs); • Maintaining governance and reporting with respect to remuneration themes, including the evaluation of remuneration strategy and alignment with culture as part of a Group wide colleague engagement survey; and • Undertaking appropriate training to keep up to date with latest market trends. 72 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements Priorities for 2024 During 2024, the Remuneration Committee will focus on: • Continuing to enhance links to the wider workforce population, including ongoing discussions with the colleague-led ERGs; • Reviewing industry best practices relating to remuneration, ensuring policies and processes remain appropriate, including an ongoing assessment to determine the suitability of an LTIP scheme for the CEO; • Continuing to ensure equality in the workplace and key factors that can influence the Group’s gender pay gap; • Overseeing a general review of compensation philosophy as part of aligning workforce remuneration with culture, which continues to provide visibility, clarity and transparency to colleagues; and • Reviewing existing LTIP schemes, in conjunction with the investment from Inflexion for a minority shareholding in the Group’s healthcare business (please refer to page 13 where this is discussed further), to ensure they remain appropriate and continue to meet their originally stated objectives for all stakeholders. 73 ANNUAL REPORT AND ACCOUNTS 2023DIRECTORS’ REPORT Directors’ Remuneration Report (continued) Dear Shareholders, On behalf of the Remuneration Committee, I am pleased to present the Remuneration Committee report to you for the financial year ended 31 December 2023. The report contains three main sections: 1) Remuneration Committee update; 2) Remuneration policy report; and 3) Annual remuneration report. REMUNERATION COMMITTEE UPDATE Committee update on LTIPs On 26 July 2023, the Company initiated a capital reorganisation through a consolidation and subdivision of its existing share capital (please refer to note 12 where this is discussed further). The Committee reviewed the proposed restructuring in conjunction with the Group’s existing LTIP arrangements to ensure all scheme structures allowed the reorganisation to take effect and that the schemes remained appropriately aligned to their originally stated objectives. Throughout the review process, the Committee consulted with the Company’s Nominated Adviser and legal advisers to ensure the changes to the capital structure did not impact Scheme participants. Formal confirmation of the restructuring, including the revised number of options held post reorganisation, has been provided to all option holders. As reported previously in my 2022 Directors’ Remuneration Report, LTIP Scheme 1 is now closed and certain participants chose to defer their exercise upon vesting, as allowed under the scheme rules. Several option holders subsequently exercised during 2023 in line with the Committee’s approval that such options can be exercised by participants at any point before 11 August 2033, subject to compliance with the Company’s Share Dealing Code. The Company continues to operate LTIP Schemes 2 and 4 with a view to achieving their originally stated objectives and the table below summarises the relevant performance targets: Scheme 2 (2019) Scheme 4 (2021) Performance target The awards will vest based upon the following proportions if Adjusted EBITDA targets are met, as measured in the year end results for the below years: The awards will vest based upon the following proportions if Adjusted EBITDA targets are met, as measured in the year end results for the below years: – 2023 £100m Adjusted EBITDA (25% Vest) – 2023 – Not Applicable – 2024 £110m Adjusted EBITDA (25% Vest) – 2024 £110m Adjusted EBITDA (10% Vest) – 2025 £125m Adjusted EBITDA (25% Vest) – 2025 £125m Adjusted EBITDA (20% Vest) – 2026 £145m Adjusted EBITDA (25% Vest) – 2026 £145m Adjusted EBITDA (70% Vest) I am pleased to report that the Scheme 2 performance trigger for the period 1 January 2023 to 31 December 2023 has been achieved and the Committee will determine an appropriate vesting date following the publication of this report. During 2023, the Committee continued to evaluate whether and when an appropriate LTIP scheme for the CEO should be introduced, in line with the objectives of retaining key individuals and aligning reward with the underlying performance of the Company. Engagement with the colleague-led Employee Resource Groups (ERGs) During the year, as our Employee Nominated Non-Executive, I have enjoyed spending time with colleagues and listening to their perspectives, especially as they relate to the broader culture of the organisation. The Company introduced several Employee Resource Groups (ERGs) during 2022 and I have had the privilege of meeting with a selection of colleagues from different ERGs during the year, including: Gender Balance Race and Ethnicity (‘EmbRACE’) LGBTQ+ Allies (‘PRIDE’) • • • 74 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements The key themes from each meeting that I attended have been shared with both the Committee and the Board, highlighting the ongoing actions that have been undertaken by the ERGs during the period, including raising awareness of gender balance, maternity and menopause; promoting inclusivity with respect to LGBTQ+ Allies; and organising events to celebrate International Women’s Day and Black History Month. Colleagues from the ERGs have provided positive feedback in terms of the increased engagement from the Company’s senior leadership during the period. The ERG forums remain relatively new and will continue to hone their areas of focus during 2024. Enhancing governance and reporting We have continued to focus on our governance and reporting of remuneration and people policies across the Group. This year we initiated a Group wide colleague engagement survey as part of our commitment to an engaging environment for GlobalData colleagues. This has allowed the Board and senior management to gain a better understanding of engagement drivers within the business and how our values of Courage, Curiosity and Collaboration direct behaviours. The results of this survey have been shared with colleagues as part of the regular CEO communication sessions and the survey feedback received will be factored into our general review of compensation philosophy. I was pleased to announce in my 2022 Directors’ Remuneration Report that a number of targeted pay reviews had been conducted for our lowest paid colleagues in response to the impact of the cost-of-living crisis across the UK. Relevant pay adjustments resulting from this review were processed during 2023 and workforce remuneration continues to be monitored in line with published advice and guidance from both the UK government and the Living Wage Foundation. In recent AGMs we have included an advisory resolution to accept the Directors’ Remuneration Report. This is included to give shareholders a platform through which any concerns or suggestions within the Directors’ Remuneration Report can be registered. The AGM results, in relation to remuneration, have been presented in the Directors’ Remuneration Report as well as commentary addressing any points of feedback. REMUNERATION POLICY REPORT Remuneration Policy – overview Purpose – The Executive Remuneration Policy aims to set out the policies and principles related to the elements of remuneration considered for Executive pay. It also sets out the oversight and guidance the Remuneration Committee gives on aligning Executive, senior management and the broader workforce’s pay to the Company’s performance and strategy. Principles – The policy has been implemented with the following key principles: • • • • • Remuneration policies and practices are designed to support strategy and promote long-term sustainable success. Directors can exercise independent judgement and discretion when authorising remuneration outcomes. The Remuneration Committee has delegated responsibility for setting remuneration strategy for Executive Directors and setting specific remuneration for the Chair and Executive Director(s). It is the intention of the policy to set remuneration which: • • • • • • has clarity and is transparent has a simple structure, without undue complexity does not invite undue risk to the business is predictable in outcome is proportional to the delivery of strategy and long-term performance of the business aligns to the culture of the business and its core values. Similar principles to those applied to Executive Directors are taken into account by the CEO when setting the remuneration and benefits of senior managers (which are reviewed annually by the Committee as part of evaluating total reward) and other colleagues. Responsibilities – The Remuneration Committee is responsible for determining the service contract terms, remuneration and other benefits of the Executive Directors. The Committee is chaired by myself, Annette Barnes (an Independent Non-Executive Director), supported by 3 Non-Executive Directors: Andrew Day, Julien Decot and Murray Legg. 75 ANNUAL REPORT AND ACCOUNTS 2023DIRECTORS’ REPORT Directors’ Remuneration Report (continued) The primary objectives of the Group’s policy on Executive remuneration are that it should be structured so as to attract and retain executives of a high calibre with the skills and experience necessary to develop the Company successfully and, secondly, to reward them in a way which encourages the creation of long-term value for the shareholders. The performance measurement of the Executive Directors and the determination of their annual remuneration package is undertaken by the Remuneration Committee. No Director is involved in setting their own remuneration. The elements of remuneration that could be offered to Executive Directors are defined in the table below. Currently, only our Chief Financial Officer (CFO) receives executive remuneration. Element Base Salary Benefits Purpose and link to strategy Operation Is payable in cash spread over 12 monthly payments. It is set at an appropriate level, based on benchmark data, to attract and retain management of a high calibre with the necessary skills and credentials required to deliver a sustainable business model and drive shareholder returns. Provide Executive Directors with market- competitive benefits consistent with the role. Base salaries are normally reviewed annually but may be reviewed at other times if the Committee considers this appropriate. In determining base salary levels and any salary increase, consideration is given to: • the individual’s experience and the performance of the Group and the individual; • salary levels at other companies of a similar size and complexity; and • the pay levels and increases for other employees in the Group. The Committee’s Policy is to set benefits at an appropriate level, taking into account the market benchmarks and benefits offered to the wider workforce. Executive Directors can currently receive private health insurance and life assurance as standard benefits, which is broadly in line with senior roles within the Senior Leadership Team. Maximum opportunity While there is no maximum salary level, salary increases will generally be awarded to ensure compensation packages remain in line with market trends. The overall level of benefits will depend on the cost of providing individual items and the individual’s circumstances. For any all-employee share plans which may be offered in the future, the maximum participation levels will be the same as any maximum applicable to other employees (and consistent with any relevant tax limits). 76 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements Element Pension Purpose and link to strategy Operation To enable the Company to offer market-competitive remuneration through the provision of additional retirement benefits. Executive Directors are eligible for defined employer contribution funding to the GlobalData Pension Plan, payments into a personal fund and/or a cash allowance in lieu of pension. Pension arrangements are aligned with those offered to senior roles within the Senior Leadership Team. Annual Bonus Plan Rewards Executive Directors for delivery of pre-defined EBITDA Group performance target measures set annually by the Board. Annual bonus is a cash award of up to 20% of base salary focused on specific performance metrics relevant to each year. In certain circumstances the Committee will have the discretion to reduce the size (“malus”) or require the repayment (“clawback”) of the bonus following receipt by the Executive Director. Maximum opportunity In accordance with provision 38 of the Corporate Governance Code, the aggregate value of any annual pension contributions and cash allowance for each of the Executive Directors will be in line with the maximum employer pension contribution available to the majority of the workforce. The minimum annual bonus is 0% of salary, if performance falls below expected standards. The maximum annual bonus opportunity is 20% of salary, payable in cash. Long-Term Incentive Plan (LTIP) Designed to reward delivery of shareholder value in the medium- to-long term, with vesting conditional on the achievement of pre-defined EBITDA performance hurdles. The Remuneration Committee can award share options on any of our active LTIPs. The Committee will take into account market conditions and incentives of the wider workforce, ensuring that UK Corporate Governance Code and Investment Association Principles are considered. No maximum, but the Committee will consider benchmark data and consult with shareholders on material awards. Full details of the share option schemes operated by the Group are set out in note 25. 77 ANNUAL REPORT AND ACCOUNTS 2023DIRECTORS’ REPORT Directors’ Remuneration Report (continued) Shareholding Guidelines In line with provision 36 of the UK Corporate Governance Code and as outlined in last year’s report, the Committee included a policy on Executive Director shareholding requirements both during and post-employment, within the Remuneration policy. The policy states that all Executive Directors should hold 100% of their base salary in shares within five years of appointment and hold 100% of their base salary in shares for one-year post-employment and 50% for two years post-employment. As at 4 March 2024, the CFO held 107,100 shares with approximate value of £214,200, which equates to ~86% of his 2023 salary (2022: ~78%). Given that the policy was implemented during 2022, the Committee is satisfied that he is working towards this criteria. The CEO’s holding was 57.8% as at 4 March 2024. Malus and Clawback Malus and clawback provisions will apply to the Annual Bonus Plan and Long-Term Incentive Plan for a period of at least two years after payment or vesting. Circumstances in which malus and clawback may be applied include a material misstatement of the Company’s financial accounts, fraud or gross misconduct on the part of the award-holder or an error in calculating the award vesting outcome. Participants in the performance-related bonus and LTIP are required to acknowledge their understanding and acceptance of the malus and clawback provisions as a pre-condition to participating in these plans. The Committee is satisfied that the malus and clawback provisions are appropriate and enforceable. Operation of Remuneration policy The Remuneration Policy operated as intended during the year, in terms of both remuneration performance and quantum. The policy has been subject to an annual review, with no changes deemed necessary at this time. The Remuneration Committee has proactively chosen not to apply discretion to any Executive Director Remuneration elements or outcomes during the year. Specifically, the Committee has reviewed the CFO’s eligibility for a bonus award for 2023 based upon financial performance. The minimum target threshold for a bonus payout, which was £120m EBITDA (excluding acquisitions) for 2023, was not achieved. This results in a 0% payout for the CFO under the Corporate Bonus Plan for 2023. No upward discretion on this matter was deemed appropriate by the Committee. ANNUAL REMUNERATION REPORT Executive Directors’ remuneration The Committee continues to monitor remuneration trends within the market relative to similar sized businesses and competitors to ensure it is setting competitive packages. As previously noted, our CFO is the only Executive Director that currently receives executive remuneration. The CFO continues to be instrumental to the success of the Group, with an expanded role and remit following a period of organic and acquisitive growth. In addition, the CFO has taken responsibility for separation delivery with respect to the Group’s minority divestment of its Healthcare business. On that basis, following a thorough benchmarking review and recognising that the CFO’s base pay has not been increased since 2021, it was determined that the CFO’s base salary had fallen below that of other AIM listed businesses of a similar size to the Group. The CFO’s salary will therefore be increased on 1 January 2024 from £250,000 per annum to £300,000 per annum to ensure that it remains aligned with current responsibilities and broader market trends. Pay for Performance Scenarios The charts below provide an illustration of the potential future reward opportunities for the CFO in 2024, and the potential split between the different elements of remuneration under two different performance scenarios: ‘Minimum’ and ‘On-target’. The ‘Minimum’ scenario reflects base salary (i.e. fixed remuneration) which is the only element of the CFO’s remuneration packages not linked to performance. The total ‘Minimum’ scenario is £300,000 following the salary increase referred to above. The ‘On-target’ scenario reflects target thresholds being met to trigger 100% of annual bonus payment as well as the share options due to vest in 2024. Share options are valued at the fair value used to calculate the share-based payments charge for the tranche related to 2024 performance (£1.69). The total On-target scenario is £1,265,357. If the share price were to rise by 50% to £2.54 in the next financial year, the ‘On-target’ scenario would total £1,718,035. • • 78 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements £1,500,000 £1,200,000 £900,000 £600,000 £300,000 £0 905,357 (71%) 60,000 (5%) 300,000 (24%) On Target 300,000 Minimum Salary Performance bonus LTIP Non-Executive Directors’ remuneration All Non-Executive Directors (NED’s) have letters of appointment with the Company. The remuneration of NEDs is determined by the Board, and that of the Chair, determined by the Remuneration Committee. No Director is involved in setting their own remuneration. NED fees were subject to a recent benchmarking review and adjusted accordingly during 2023. No further increases are proposed for 2024. Element Chair and Non-Executive Directors’ Fees Purpose and link to strategy Operation The fees are set to attract and retain high calibre individuals by offering market-competitive fees, considering the time that is required to fulfil the relevant role. Fees are reviewed periodically. The Chair of the Board is paid a consolidated fee to reflect all the duties associated with the position. The Non- Executive Directors receive a base fee reflecting their duties on the Board and memberships of any Committees. The Chairs of Board Committees are eligible for an additional fee, reflecting the additional time and expertise required. The Chair and Non-Executive Directors are covered under the Group accident and travel policy as it relates to work on behalf of the Company. Expenses in line with Company policy will be reimbursed and the Company will pay any tax incurred, as necessary. Maximum opportunity There is no prescribed individual maximum, but the fee levels will reflect prevailing market practice and salary increases across the Group. The maximum annual aggregate fee for all Non-Executive Directors is as set out in the Company’s Articles of Association but may increase or decrease if the Articles of Association are amended to reflect such a change. 79 ANNUAL REPORT AND ACCOUNTS 2023DIRECTORS’ REPORT Directors’ Remuneration Report (continued) AGM result and outcomes The following table shows the non-binding result of the vote to receive and approve the Remuneration Report for the 2022 financial year at the 2023 AGM. In favour Against Votes withheld Total votes * Based on pre-reorganisation shareholdings Remuneration Report votes* % votes 86,314,120 84.59% 14,364,160 14.08% 1,360,000 1.33% 102,038,280 Although the resolution was passed, ~15% of votes were either withheld or against approving the Report. From feedback received around the time of the AGM, it is believed this was mainly due to the revision of performance triggers during 2022 for in-flight incentive awards, being considered a potential retesting of performance. Whilst the rationale for amending the targets for LTIP Schemes 2 and 4 was explained in my prior year Directors’ Remuneration Report, with the Committee determining a new basis for target setting of EBITDA (rather than TSR) would provide a clearer reflection of company performance, simplify the current schemes and allow option holders to better understand and influence the target outcome, the feedback received from shareholders was discussed at length and will be a consideration in the determination of any future proposed LTIP amendments. Long-Term Incentive Plans Total amounts charged to the income statement: Scheme 1 Scheme 2 Scheme 4 Movement of share options held by the CFO in 2023: Number of 1/14p options brought forward Exercised 13 January 2023 Capital restructuring – cancellation of 1/14p options Capital restructuring – issue of replacement 1/100p options Closing number of options Year ended 31 December 2023 £m Year ended 31 December 2022 £m – 13.6 5.8 19.4 – 3.3 0.8 4.1 Scheme 1 No. 75,000 (75,000) – – – Scheme 2 No. 300,000 – (300,000) 2,142,857 Total No. 375,000 (75,000) (300,000) 2,142,857 2,142,857 2,142,857 Existing share options were converted pursuant to the capital reorganisation exercise that took effect on 26 July 2023 with every 14 old options (nominal value: 1/14 pence) held pre-reorganisation being replaced with 100 new options (nominal value: 1/100 pence) post re-organisation. 80 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements During the year the Group’s Employee Benefit Trust purchased an aggregate amount of 7.9m shares (nominal value: 1/100 pence) at a total market value of £11.9m (representing 0.9% of the total share capital). The purchased shares are held in the Trust for the purpose of satisfying the exercise of share options under the Company’s Employee Share Option Plans. The following table assumes vesting occurs in full. Vesting Schedule Scheme 1* Scheme 2 Scheme 4 Total Shares held in trust Maximum net dilution 2024 2025 2,230,806 2,230,805 2026 – 2027 Total – 4,461,611 6,624,997 6,624,997 6,624,997 6,624,997 26,499,988 – 1,964,276 3,928,552 13,749,935 19,642,763 8,855,803 10,820,078 10,553,549 20,374,932 50,604,362 (8,855,803) (10,820,078) (10,553,549) (7,656,129) (37,885,559) – – – 12,718,803 12,718,803 *the remaining share options in Scheme 1 can be exercised anytime until 11 August 2033 and therefore for the purposes of this analysis we have assumed they will be exercised over the next two years. The maximum net dilution of 12,718,803 shares represents 1.5% of issued share capital. During January 2024, the Group’s Employee Benefit Trust purchased an additional 11.6m shares, representing a further 1.4% of issued share capital. The total charge recognised for the schemes during the year ended 31 December 2023 was £19.4m (2022: £4.1m) The £15.3m increase in the year-on-year charge is broadly the result of additional options granted during the period as well as an enhanced charge arising from the performance trigger modifications during 2022. The awards of the scheme are settled with ordinary shares of the Company. Directors’ emoluments Audited information Year ended 31 December 2023 Murray Legg (Chair) Mike Danson Graham Lilley Annette Barnes (SID) Peter Harkness Andrew Day Catherine Birkett Julien Decot Basic salary Committee Chair fees £000s £000s Bonus £000s Share- based payment Other benefits Total Total Fixed Total Variable £000s £000s £000s £000s £000s 113 – 250 53 53 53 53 53 – – – 13 – – 15 – – – – – – – – – – – 982 – – – – – – – 3 9 – 2 2 2 113 – 1,235 75 53 55 70 55 113 – 251 66 53 55 70 55 – – 984 9 – – – – 81 ANNUAL REPORT AND ACCOUNTS 2023DIRECTORS’ REPORT Directors’ Remuneration Report (continued) Year ended 31 December 2022 Murray Legg (Chair) Mike Danson Graham Lilley Annette Barnes (SID) Peter Harkness Andrew Day Catherine Birkett Julien Decot Basic salary Committee Chair fees £000s £000s Bonus £000s Share- based payment Other benefits £000s £000s 100 – 250 50 50 50 50 50 – – – 10 – – 15 – – – 50 – – – – – – – 316 – – – – – – – 3 3 – 2 1 1 Total £000s 100 – 619 63 50 52 66 51 Total Fixed Total Variable £000s £000s 100 – 251 60 50 51 66 51 – – 368 3 – 1 – – As at 31 December 2023, Graham Lilley held 2,142,857 1/100 pence share options (2022: 2,678,571) all of which were in Scheme 2. Further details are given in note 25. No other Executive Directors as at 31 December 2023 had share options. The other benefits include travel expenses to GlobalData offices and any associated tax due on said expenses. Share-based payment represents equity settled income received on the vesting of share options in the year. Directors’ service agreements It is the Group’s policy that Directors should not have service agreements with notice periods capable of exceeding 12 months. The existing service agreements have neither fixed terms nor contractual termination payments but do have fixed notice periods. The details of the service agreements of the Directors as at 4 March 2024 are: Contract date 23 February 2016 5 June 2009 5 April 2021 19 January 2017 12 April 2016 19 January 2017 23 February 2021 13 April 2021 Notice period 3 months 12 months 12 months 3 months 3 months 3 months 3 months 3 months Murray Legg Mike Danson Graham Lilley Annette Barnes Peter Harkness Andrew Day Catherine Birkett Julien Decot By order of the Board By order of the Board Annette Barnes Chair of the Remuneration Committee 4 March 2024 82 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements DIRECTORS’ REPORT Statement of Directors’ responsibilities in respect of the Annual Report and the financial statements The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations. Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors are required to prepare the Group financial statements in accordance with United Kingdom adopted international accounting standards. The financial statements also comply with International Financial Reporting Standards (IFRSs) as issued by the IASB. The Directors have chosen to prepare the parent Company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including FRS 101 “Reduced Disclosure Framework”. 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 and profit or loss of the Company and the Group for that period. In preparing these financial statements, the Directors are required to: • Select suitable accounting policies and then apply them consistently; • Make judgements and accounting estimates that are reasonable and prudent; • • • Present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information; State whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business. The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Auditors A resolution to reappoint Deloitte LLP as auditors to the Company will be proposed at the Annual General Meeting. Disclosure of information to auditors The Directors confirm that: so far as each Director is aware, there is no relevant audit information of which the Group’s auditors are unaware, and the Directors have taken all steps that they ought to have taken in order to make themselves aware of any relevant audit information and establish that the Group’s auditors are aware of that information. This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act 2006. Annual General Meeting The Annual General Meeting will be held on 25 April 2023 at John Carpenter House, John Carpenter Street, London EC4Y 0AN at 10am. Approved by the Board and signed on its behalf by Mike Danson Chief Executive 4 March 2024 83 ANNUAL REPORT AND ACCOUNTS 2023 Independent Auditor’s Report INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF GLOBALDATA PLC Report on the audit of the financial statements 1. Opinion In our opinion: • • • • the financial statements of GlobalData plc (the ‘parent company’) and its subsidiaries (the ‘group’) give a true and fair view of the state of the group’s and of the parent company’s affairs as at 31 December 2023 and of the group’s profit for the year then ended; the group financial statements have been properly prepared in accordance with United Kingdom adopted international accounting standards and International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards Board (IASB); the parent company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice, including Financial Reporting Standard 101 “Reduced Disclosure Framework”; and the financial statements have been prepared in accordance with the requirements of the Companies Act 2006. We have audited the financial statements which comprise: • • • • • • • • the consolidated income statement; the consolidated statement of comprehensive income; the consolidated and parent company statements of financial position; the consolidated and parent company statements of changes in equity; the consolidated statement of cash flows; the material accounting policy information and statement of accounting policies; the related notes 1 to 28 to the consolidated financial statements; and the related notes 1 to 14 to the parent company financial statements. The financial reporting framework that has been applied in the preparation of the group financial statements is applicable with United Kingdom adopted international accounting standards and IFRSs as issued by the IASB. The financial reporting framework that has been applied in the preparation of the parent company financial statements is applicable law and United Kingdom Accounting Standards, including FRS 101 “Reduced Disclosure Framework” (United Kingdom Generally Accepted Accounting Practice). 2. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the group and the parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. 84 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 3. Summary of our audit approach Key audit matters The key audit matters that we identified in the current year were: • • the accuracy of subscription revenue recognition; and the accounting impact of the agreements signed relating to the future sale of a minority interest in the healthcare business. Within this report, key audit matters are identified as follows: Newly identified Similar level of risk Materiality Scoping The materiality that we used for the group financial statements was £3,000,000 (2022: £3,000,000) equating to 5.9% (2022: 6.1%) of profit before tax adjusted to exclude the amortisation of acquired intangibles. We performed full scope audits or audits of specified balances and transactions of the principal entities within the group, comprising the group’s operations within the UK, the USA, India, and the United Arab Emirates. These in-scope locations represent the key trading entities within the group and account for 93% of group revenue, 85% of profit before tax and 98% of group net assets. Significant changes in our approach Given the integration of recent acquisitions, we have removed the key audit matter disclosed in the prior year audit report in relation to the determination of cash generating units (“CGUs”) for the purposes of reviewing goodwill and intangibles for impairment. We have also removed the key audit matter of the valuation of intangible assets acquired in business combinations, as no acquisitions have taken place in 2023. We have identified the accounting impact of the agreements signed relating to the future sale of a minority interest in the healthcare business as a key audit matter in the current year. 4. Conclusions relating to going concern In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors’ assessment of the group’s and parent company’s ability to continue to adopt the going concern basis of accounting included: • • • • consideration of the cash held by the group of £19.8m, net bank debt of £243.9m and further undrawn facilities of £120m, in the context of the operating cash flow needs of the group; consideration of the expiry date of the group’s borrowing facilities, which mature at the end of August 2025, and whether there is any current evidence to indicate that a renewal of those facilities may not occur; assessment and sensitivity of the headroom on the group’s cash flow forecasts including the assumptions within the one-year detailed budget; evaluation of the group’s borrowing covenants and review of the scenarios which could lead to a covenant breach and evaluation of whether any of those scenarios are reasonably possible; 85 ANNUAL REPORT AND ACCOUNTS 2023Independent Auditor’s Report (continued) • • • • • assessment of the suitability of the model used by the group to forecast cash flows, including testing of clerical accuracy of the model; assessment of the historical accuracy of cash flow forecasts; assessment of the intention to fully repay the term loan upon completion of the sale of a minority interest in the healthcare business; assessment of the impact of the intended repayment of the term loan on the cash flow forecasts; and evaluation of the appropriateness of the going concern disclosures included in the financial statements. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group’s and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. In relation to the reporting on how the group has applied the UK Corporate Governance Code, we have nothing material to add or draw attention to in relation to the directors’ statement in the financial statements about whether the directors considered it appropriate to adopt the going concern basis of accounting. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. 5. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our 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) that we identified. These matters included 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 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. 86 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements 5.1 Accuracy of subscription revenue recognition Key audit matter description The specific nature of the risk of material misstatement in revenue recognition varies across the Group’s revenue streams, with total group revenue of £273.1m (2022: £243.2m). The main source of revenue for the group is subscription revenue for Data, Analytics and Insights as set out by management in the Strategic Report and note 5 to the consolidated financial statements. Management’s accounting policy is to recognise subscription revenue evenly over the period of the contractual term as the performance obligations are satisfied evenly over the term of subscription. Revenue recognised over time represents 77% of consolidated revenue. Due to the complexity of the manual calculations and reliance on spreadsheets required in releasing revenue to the consolidated income statement, we identified a significant risk due to fraud or error in relation to the accuracy of revenue arising from such manual adjustments. The Group’s revenue recognition accounting policies are disclosed in note 2 to the consolidated financial statements. How the scope of our audit responded to the key audit matter We obtained an understanding of the Group’s business model and terms set out in customer contracts and the sales process. We obtained an understanding of relevant controls over the sales process from ordering to cash collection, including those related to the releasing of revenue from deferred revenue. The procedures we performed across the entities within our audit scope included the following: • • We obtained an understanding of the relevant controls in relation to revenue recognition relating to the reconciliation of the sales system to the accounting system and review of approved orders not yet invoiced; we used data analytics procedures to recalculate the subscription revenue recognised in the year and the deferred revenue balance recorded at the year end, to identify where actual recorded revenue differed from the recalculated amount to then subjected such amounts to further testing procedures on a sample basis; we obtained evidence to determine whether a sample of variances which were identified through our data analytics were correctly accounted for; this included performing tests of detail to corroborate management’s explanations by reviewing third party documentation; and we performed tests of detail of the accuracy, occurrence and completeness for a sample of revenue transactions, through obtaining and reviewing relevant customer contracts and fulfilment data to assess whether revenue was appropriately recorded. • • Key observations Based on the audit procedures performed we concluded that revenue from subscriptions was not materially misstated. 87 ANNUAL REPORT AND ACCOUNTS 2023Independent Auditor’s Report (continued) 5.2 Accounting impact of the agreements signed relating to the future sale of a minority interest in the healthcare business Key audit matter description As disclosed in the Audit Committee report on page 70, on 21 December 2023, the Group signed agreements relating to the future sale of a minority interest in the healthcare business. The transaction included entering into put and call option arrangements with the option exercisable following the completion of a number of steps some of which are outside control of the Group. The accounting treatment is detailed within the Audit Committee Report on page 70. The directors have exercised judgement in assessing the accounting impact of the agreements signed. This included: • • • • • concluding whether the agreements led to a sale during 2023; the accounting for and valuation of, the put and call options; the accounting impact on the Group’s existing debt and hedging strategy; the assessment of control of the healthcare business following completion; and the treatment of transaction fees incurred in the year ended 31 December 2023. Having considered all of the above, management concluded that: • • the signing of the agreements did not lead to a sale; the put and call options should be accounted for as derivatives with a fair value of £nil at the balance sheet date; the recalculation of the carrying amount of the existing debt discounted at the effective interest rate resulted in a £3.4m charge to the income statement and the discontinuation of hedge accounting; the Group will retain control of the Healthcare business on completion; and the transaction fees incurred will be transferred from prepayments to equity when the sale is finalised. • • • As this is an area which had a significant effect on our overall audit strategy and allocation of resources in planning for, and completion of, our audit work, this was determined to be a key audit matter. How the scope of our audit responded to the key audit matter We obtained an understanding of the terms of the agreements that were signed on 21 December 2023 and assessed the accounting implications arising from the transaction for the year ended 31 December 2023. The procedures we performed included the following: • We reviewed the terms of the agreements signed on 21 December 2023 to assess whether they prescribed that the transaction was complete at that date; • We evaluated the impact on the current debt facilities held by the Group. Including a mandatory repayment clause and its impact on the term loan’s carrying amount as at 31 December 2023, alongside the discontinuation of hedge accounting; • We utilised internal specialists and obtained evidence to evaluate the valuation and recognition of the put and call options as derivatives and assessed its reasonableness in line with IFRS 9 – ‘Financial Instruments’ and the related disclosures in the financial statements as per IFRS 7 ‘Financial Instruments – Disclosures’; • We assessed the determination of control in line with the requirements of IFRS 10 – ‘Consolidated Financial Statements’; • We assessed the appropriateness of accounting for the transaction fees incurred in the year ended 31 December 2023 and performed test of details to obtain evidence to determine their valuation; and • We have assessed the relevant disclosures made in the financial statements. 88 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements Key observations Based on the audit procedures performed we concluded that management had appropriately assessed the accounting impact of the agreements signed in relation to the year ended 31 December 2023. 6. Our application of materiality 6.1 Materiality We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope of our audit work and in evaluating the results of our work. Based on our professional judgement, we determined materiality for the financial statements as a whole as follows: Group financial statements Parent company financial statements Materiality £3,000,000 (2022: £3,000,000) £900,000 (2022: £900,000) Basis for determining materiality Group materiality equates to 5.9% (2022: 6.1%) of profit before tax, adjusted to exclude the amortisation of acquired intangible assets, as our basis for materiality. Parent company materiality equates to 2% (2022: 2%) of net assets, which has been capped at 50% (2021: 50%) of group performance materiality. Rationale for the benchmark applied We considered a range of measures, including revenue, profit before tax, adjusted EBITDA and adjusted profit before tax, adjusted to exclude the amortisation of acquired intangible assets. Net assets are typically considered an appropriate benchmark for materiality as the parent company predominantly holds investments in trading subsidiaries. We used profit before tax adjusted to exclude the amortisation of acquired intangible assets as the amortisation has a significant impact on profit before tax and was subject to specific audit procedures. Its exclusion resulted in a materiality level that was more reflective of the profit generation of the Group before such acquisition- related charges. We used a profit before tax-based measure rather than adjusted EBITDA as the latter is less closely aligned to measures calculated in accordance with generally accepted accounting principles. Materiality represents 1% of revenue, 7% of profit before tax and 3% of adjusted EBITDA. 89 ANNUAL REPORT AND ACCOUNTS 2023Independent Auditor’s Report (continued) Adjusted PBT £50.5m Adjusted PBT Group materiality Group materiality £3m Component materiality range 0.3m to £1m Audit Committee reporting threshold £0.15m 6.2 Performance materiality We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and undetected misstatements exceed the materiality for the financial statements as a whole. Performance materiality Basis and rationale for determining performance materiality Group financial statements Parent company financial statements 60% (2022: 60%) of group materiality 70% (2022: 70%) of parent company materiality In determining performance materiality, we considered our past experience of the group and our risk assessment, including our assessment of the group’s control environment and the value and volume of corrected and uncorrected misstatements identified during the prior year audit, as well as the likelihood of these recurring in the current year. In determining performance materiality, we considered our past experience of the company and our risk assessment, including our assessment of the company’s control environment and the low value and volume of corrected and uncorrected misstatements identified during the prior year audit, as well as the likelihood of these recurring in the current year. 6.3 Error reporting threshold We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of £150,000 (2022: £150,000), as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We also report to the Audit Committee on disclosure matters that we identified when assessing the overall presentation of the financial statements. 7. An overview of the scope of our audit 7.1 Identification and scoping of components Our group audit was scoped by obtaining an understanding of the group and its environment, including group-wide controls and assessing the risks of material misstatement at the group level. Our component selection was based on the selection of material balances and components, with additional consideration of whether, at an aggregated level, we had reduced the risk of material misstatement to an acceptably low level. Based on that assessment we performed full scope or an audit of specified balances and transactions on the principal trading entities within the UK, USA, India and the United Arab Emirates. We have also performed analytical procedures on insignificant entities in the group. The in-scope locations (those at which a full scope audit or an audit of specified balances and transactions was performed as part of a group audit) represent 93% of group revenue, 85% of profit before tax and 98% of group net assets. 90 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements 7% 6% Revenue 87+ 87% 5% 15% A80+ Profit before tax 80% 2% 2% Net assets A96+ 96% Full audit scope Specified audit procedures Review at group level 7.2 Our consideration of the control environment In assessing the control environment of the Group, we identified four relevant IT systems. We have obtained an understanding of the controls in place and tested the general IT controls in relation to two of these: the main accounting system and the sales invoicing system; and we obtained an understanding of the general IT controls in respect of the accounts payable and payroll systems. We also obtained an understanding of the key controls with respect to revenue recognition and key judgements. We did not seek to take reliance on these controls in our testing. As described in the Audit Committee Report on page 69, some of the deficiencies identified in the prior year remained at the year end. Accordingly, consistent with the prior year, and in line with our audit plan, we did not rely on IT controls and extended the scope of our substantive audit procedures in response to the deficiencies identified. 7.3 Our consideration of climate-related risks In planning our audit, we made enquiries of management to understand the extent of the potential impact of climate change risk on the group’s financial statements. We also engaged specialists to assist our assessment of the disclosures and climate impact during our audit process. As disclosed in note 1, management concluded that there was no material impact on the financial statements. Our evaluation of this conclusion included challenging key judgements and estimates in areas where we considered that there was greatest potential for climate change impact. We also considered the consistency of the climate change disclosures included in the Strategic Report on page 43 with the financial statements and our knowledge from our audit. 7.4 Working with other auditors We used one component audit team in India during the audit of the financial statements for the year ended 31 December 2023 (2022: one) and we were in regular contact with them throughout the year. The group team conducted the audit of MEED, a component based in the United Arab Emirates. We held team briefings for the component audit team, to discuss the group risk assessment and audit instructions, to confirm their understanding of the business and to discuss their local risk assessment. Throughout the audit we maintained regular contact in order to direct and supervise their audit approach. We virtually attended their audit close meeting with local management, performed technology-enabled remote reviews of their working papers and reviewed their reporting to us on the findings of their work. 91 ANNUAL REPORT AND ACCOUNTS 20236 + 7 + 5 + 15 + 2 + 2 + A Independent Auditor’s Report (continued) 8. Other information The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. 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 course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. 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 in this regard. 9. Responsibilities of directors As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors 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. 10. Auditor’s 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 auditor’s 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 auditor’s report. 11. Extent to which the audit was considered capable of detecting irregularities, including fraud Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. 11.1 Identifying and assessing potential risks related to irregularities In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following: the nature of the industry and sector, control environment and business performance including the design of the group’s remuneration policies, key drivers for directors’ remuneration, bonus levels and performance targets; the group’s own assessment of the risks that irregularities may occur either as a result of fraud or error, that is continually assessed by the board during every Audit Committee meeting throughout the year; • • 92 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements • • • results of our enquiries of management, the directors and the audit committee about their own identification and assessment of the risks of irregularities, including those that are specific to the group’s sector; any matters we identified having obtained and reviewed the group’s documentation of their policies and procedures relating to: • • • identifying, evaluating, and complying with laws and regulations and whether they were aware of any instances of non- compliance; detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected, or alleged fraud; the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations; and the matters discussed among the audit engagement team including significant component audit teams and relevant internal specialists, including tax, financial instrument, valuations, ESG, IT, and share based payment specialists regarding how and where fraud might occur in the financial statements and any potential indicators of fraud. As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in in the accuracy of subscription revenue recognition. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override. We also obtained an understanding of the legal and regulatory framework that the group operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act and tax legislation in the jurisdictions in which the group operates. In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the group’s ability to operate or to avoid a material penalty. 11.2 Audit response to risks identified As a result of performing the above, we identified accuracy of subscription revenue recognised as a key audit matter related to the potential risk of fraud. The key audit matters section of our report explains the matter in more detail and also describes the specific procedures we performed in response to that key audit matter. In addition to the above, our procedures to respond to risks identified included the following: • • • • • reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements; enquiring of management, the audit committee and in-house and external legal counsel concerning actual and potential litigation and claims; performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; reading minutes of meetings of those charged with governance; and in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business. We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members including internal specialists and significant component audit teams and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. 93 ANNUAL REPORT AND ACCOUNTS 2023Independent Auditor’s Report (continued) Report on other legal and regulatory requirements 12. Opinions on other matters prescribed by the Companies Act 2006 In our opinion, based on the work undertaken in the course of the audit: • • the information given in the strategic report and the directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements. In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified any material misstatements in the strategic report or the directors’ report. 13. Corporate Governance Statement Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is materially consistent with the financial statements and our knowledge obtained during the audit: • • • • • • the directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material uncertainties identified set out on page 48; the directors’ explanation as to its assessment of the group’s prospects, the period this assessment covers and why the period is appropriate set out on page 48; the directors’ statement on fair, balanced and understandable set out on page 54; the board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 29; the section of the annual report that describes the review of effectiveness of risk management and internal control systems set out on page 28; and the section describing the work of the audit committee set out on page 58. 14. Opinion on other matter prescribed by our engagement letter In our opinion the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the provisions of the Companies Act 2006 that would have applied were the company a quoted company. 15. Matters on which we are required to report by exception 15.1. Adequacy of explanations received and accounting records 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 the parent company financial statements are not in agreement with the accounting records and returns. We have nothing to report in respect of these matters. 94 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements 15.2. Directors’ remuneration Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures of directors’ remuneration have not been made. We have nothing to report in respect of this matter. 16. Use of our report This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed. Jon Young FCA (Senior Statutory Auditor) For and on behalf of Deloitte LLP Statutory Auditor London, United Kingdom 4 March 2024 95 ANNUAL REPORT AND ACCOUNTS 2023GlobalData’s One Platform model is the foundation of our strategic advantage and is the result of years of continuous capital investment, targeted acquisitions, and organic development . 96 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements Financial Statements Group Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows Notes to the Consolidated Financial Statements Company Company Statement of Financial Position Company Statement of Changes in Equity Notes to the Company Financial Statements 98 99 100 101 102 103 150 151 152 97 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements FINANCIAL STATEMENTS Consolidated Income Statement Year ended Year ended 31 December 2023 31 December 2022 Notes £m £m Continuing operations Revenue 5 273.1 243.2 Operating expenses 6 (197.7) (186.6) Losses on trade receivables 6 (2.3) (0.7) Other income 0.6 0.1 Operating profit 73.7 56.0 Net finance costs 10 (32.2) (17.6) Profit before tax 41.5 38.4 Income tax expense 11 (10.7) (7.9) Profit for the year 30.8 30.5 Attributable to: Equity holders of the parent 30.8 30.5 Earnings per share attributable to equity holders (restated): Basic earnings per share (pence) 12 3.8 3.8 Diluted earnings per share (pence) 12 3.8 3.7 Reconciliation to Adjusted EBITDA: Operating profit 73.7 56.0 Depreciation 6.2 6.4 Amortisation of software 1.6 1.0 Adjusting items 7 29.3 23.0 Adjusted EBITDA 110.8 86.4 The accompanying notes form an integral part of these financial statements. The earnings per share prior year comparatives have been restated to reflect the impact of the share-split, which completed on 25 July 2023 (see note 12) on basic and diluted earnings per share. 98 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements FINANCIAL STATEMENTS Consolidated Statement of Comprehensive Income Year ended Year ended 31 December 2023 31 December 2022 Notes £m £m Profit for the year 30.8 30.5 Other comprehensive income Items that will be classified subsequently to profit or loss when specific conditions are met: Cash flow hedge – effective portion of changes in fair value 16 0.7 (3.9) Cash flow hedge – reclassification to profit or loss 16 3.2 – Net exchange loss on translation of foreign entities 24 (1.3) (0.4) Other comprehensive income/(loss), net of tax 2.6 (4.3) Total comprehensive income for the year 33.4 26.2 Attributable to: Equity holders of the parent 33.4 26.2 The accompanying notes form an integral part of these financial statements. ANNUAL REPORT AND ACCOUNTS 2023 99 FINANCIAL STATEMENTS Consolidated Statement of Financial Position 31 December 2023 31 December 2022 Notes £m £m Non-current assets Property, plant and equipment 14 26.6 31.0 Goodwill 13 311.1 311.1 Other intangible assets 13 61.7 69.0 Deferred tax assets 18 3.4 2.3 402.8 413.4 Current assets Trade and other receivables 17 69.2 62.7 Current tax receivable – 0.6 Short-term derivative assets 16 0.5 0.9 Cash and cash equivalents 19.8 34.0 89.5 98.2 Total assets 492.3 511.6 Current liabilities Trade and other payables 19 (32.4) (33.3) Deferred revenue 5 (104.6) (104.0) Short-term lease liabilities 15 (4.3) (5.4) Current tax payable (2.8) (1.7) Short-term derivative liabilities 16 (0.1) (1.3) Short-term provisions 23 (0.1) (0.1) (144.3) (145.8) Net current liabilities (54.8) (47.6) Non-current liabilities Long-term provisions 23 (1.4) (1.3) Deferred tax liabilities 18 (0.9) (4.1) Long-term derivative liabilities 16 (2.8) (3.9) Long-term lease liabilities 15 (21.4) (24.6) Long-term borrowings 20 (263.7) (283.6) (290.2) (317.5) Total liabilities (434.5) (463.3) Net assets 57.8 48.3 Equity Share capital 24 0.2 0.2 Treasury reserve 24 (65.4) (70.8) Other reserve 24 (44.3) (44.3) Cash flow hedge reserve 24 – (3.9) Foreign currency translation reserve 24 (2.0) (0.7) Retained profit 169.3 167.8 Equity attributable to equity holders of the parent 57.8 48.3 These financial statements were approved by the Board of Directors on 4 March 2024 and signed on its behalf by: Murray Legg Mike Danson Chair Chief Executive Company Number 03925319. The accompanying notes form an integral part of these financial statements. 100 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements FINANCIAL STATEMENTS Consolidated Statement of Changes in Equity Equity Foreign attributable Cash flow currency to equity Share Treasury Other hedge translation Retained holders of capital reserve reserve reserve reserve profit the parent Notes £m £m £m £m £m £m £m Balance at 1 January 2022 0.2 (66.6) (44.3) – (0.3) 217.3 106.3 Profit for the year – – – – – 30.5 30.5 Other comprehensive income: Cash flow hedge – effective portion of changes in fair value 16 – – – (3.9) – – (3.9) Net exchange loss on translation of foreign entities 24 – – – – (0.4) – (0.4) Total comprehensive income for the year – – – (3.9) (0.4) 30.5 26.2 Transactions with owners: Share buy-back 24 – (66.6) – – – – (66.6) Dividends 24 – – – – – (23.6) (23.6) Vesting of share options 25 – 62.4 – – – (62.4) – Share-based payments charge 25 – – – – – 4.1 4.1 Tax on share-based payments 11 – – – – – 1.9 1.9 Balance at 31 December 2022 0.2 (70.8) (44.3) (3.9) (0.7) 167.8 48.3 Profit for the year – – – – – 30.8 30.8 Other comprehensive income: Cash flow hedge – reclassification to profit or loss upon loan repayment 16 – – – 0.4 – – 0.4 Cash flow hedge – effective portion of changes in fair value 16 – – – 0.7 – – 0.7 Cash flow hedge – reclassification to profit or loss upon discontinuation of hedge accounting 16 – – – 2.8 – – 2.8 Net exchange loss on translation of foreign entities 24 – – – – (1.3) – (1.3) Total comprehensive income for the year – – – 3.9 (1.3) 30.8 33.4 Transactions with owners: Share buy-back 24 – (11.9) – – – – (11.9) Dividends 24 – – – – – (32.2) (32.2) Vesting of share options 25 – 17.3 – – – (17.3) – Share-based payments charge 25 – – – – – 19.4 19.4 Tax on share-based payments 11 – – – – – 0.8 0.8 Balance at 31 December 2023 0.2 (65.4) (44.3) – (2.0) 169.3 57.8 The accompanying notes form an integral part of these financial statements. ANNUAL REPORT AND ACCOUNTS 2023 101 FINANCIAL STATEMENTS Consolidated Statement of Cash Flows Year ended Year ended 31 December 2023 31 December 2022 Restated1 Notes £m £m Cash flows from operating activities Profit for the year 30.8 30.5 Adjustments for: Depreciation 14 6.2 6.4 Amortisation 13 10.6 10.1 Other income (0.6) – Net finance costs 10 32.2 17.6 Taxation recognised in profit or loss 11 10.7 7.9 Share-based payments charge 25 19.4 4.1 Increase in trade and other receivables 22 (6.5) (9.2) (Decrease)/increase in trade and other payables 22 (1.1) 17.2 Revaluation of short- and long-term derivatives 16 (0.8) 0.6 Increase in provisions 23 0.1 0.2 Cash generated from operations 101.0 85.4 Interest paid (23.0) (14.0) Income taxes paid (12.0) (9.5) Contingent consideration paid 27 (0.2) – Total cash flows from operating activities 65.8 61.9 Cash flows from investing activities Acquisitions 27 – (33.6) Cash received from repayment of loans 28 – 0.9 Purchase of property, plant and equipment 14 (0.9) (1.0) Purchase of intangible assets 13 (3.3) (1.7) Total cash flows used in investing activities (4.2) (35.4) Cash flows from financing activities Repayment of borrowings 20 (25.0) (2.5) Proceeds from borrowings 20 – 84.5 Loan refinancing fee 20 – (0.7) Acquisition of own shares 24 (11.9) (66.6) Principal elements of lease payments 20 (5.4) (5.9) Dividends paid 24 (32.2) (23.6) Total cash flows used in financing activities (74.5) (14.8) Net (decrease)/increase in cash and cash equivalents (12.9) 11.7 Cash and cash equivalents at beginning of year 34.0 22.6 Effects of currency translation on cash and cash equivalents (1.3) (0.3) Cash and cash equivalents at end of year 19.8 34.0 1 The comparative year’s cash flows have been restated as explained in the 2022 restatement section of the Accounting Policies on page 112 The accompanying notes form an integral part of these financial statements. 102 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements 1. General information Nature of operations The principal activity of GlobalData Plc and its subsidiaries (together ‘the Group’) is to provide business information in the form of high quality proprietary data, analytics and insights to clients in multiple sectors. GlobalData Plc (‘the Company’) is a company incorporated in the United Kingdom (England & Wales) and listed on the Alternative Investment Market (AIM), therefore is publicly owned and limited by shares. The registered office of the Company is John Carpenter House, John Carpenter Street, London, EC4Y 0AN. The registered number of the Company is 03925319. Basis of preparation These financial statements have been prepared in accordance with United Kingdom adopted international accounting standards and with International Financial Reporting Standards as issued by the IASB. The financial statements have been prepared on the historical cost basis, except for derivative financial instruments, which are measured at fair value. These financial statements have been prepared in accordance with the accounting policies detailed below. The accounting policies have been applied consistently throughout the Group and throughout the year. These financial statements are presented in Pounds Sterling (£), which is also the functional currency of the Company. These financial statements have been approved for issue by the Board of Directors. Consideration of climate change In preparing the financial statements, management have considered the impact of climate change, particularly in the context of the risks identified in the Non-Financial and Sustainability Information Statement on pages 43 to 47. In particular, management considered the impact of climate change in respect of the following areas of accounting judgement or estimate: • • • • • the assessment of goodwill, other intangibles and tangible fixed assets; the assessment of impairment of financial assets; our consideration of going concern and viability; the useful economic lives of assets; and the preparation of budgets and forecasts. As a result of these considerations, no material climate change related impact was identified. Management are however aware of the changing nature of the risks associated with climate change and will regularly reassess these against the judgements and estimates made in preparing the Group’s financial statements. Critical accounting estimates and judgements The Group makes estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may deviate from these estimates and assumptions. The estimates and assumptions 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 in detail below. Climate-related risks did not have a material impact on the financial statements. Key sources of estimation uncertainty Carrying value of goodwill and other intangibles The carrying value of goodwill and other intangibles is assessed annually to ensure that there is no impairment of these assets. Performing this assessment requires management to estimate future cash flows to be generated by the related cash-generating unit (CGU), which entails making judgements including the expected rate of growth of sales, margins expected to be achieved, the level of future capital expenditure required to support these outcomes and the appropriate discount rate to apply when valuing future cash flows. See note 13 for further details on intangibles and goodwill, including quantitative base assumptions information. ANNUAL REPORT AND ACCOUNTS 2023 103 FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements (continued) Management has undertaken sensitivity analysis, taking into consideration the impact of key impairment test assumptions arising from a range of possible future trading and economic scenarios on each CGU. The following individual scenarios would need to occur before impairment is triggered within the Group: Revenue growth Discount rate Cash-generating unit falls by* rises by* Data, Analytics and Insights (17.8%) 32.8% Media Business Insights (“MBI”) (2.3%) 3.9% *percentage points No indication of impairment was noted from Management’s review; there is headroom in each CGU. Management acknowledges the sensitivity of the revenue growth and discount rate assumptions applied to the MBI CGU; however, Management is comfortable with these assumptions and will continue to monitor performance regularly for any indicators of future impairment loss. Management recognises that the 2% cost growth assumption is lower than the current rate of inflation; however, the Group operates a focused approach to cost management, including mitigating the impact of inflation through advancements in technology and efficiency savings and has a strong track record of achieving this. Therefore, Management considers the assumption to be reasonable. Management have modelled a reasonably possible scenario in which revenue growth in each CGU is 3.0% lower than the assumptions used within the impairment review. In this scenario there continues to be no indication of impairment within the Data, Analytics and Insights CGU. Within the MBI CGU, given the assumed revenue growth rate within the impairment review was 3.0%, this results in a 0.0% growth rate within the modelled scenario. In this scenario, an impairment of £3.1m would be recognised. Management recognises that whilst this scenario is plausible, it is highly unlikely. Additionally, in a scenario in which revenue growth is lower than expectation, cost mitigations could be implemented to limit the income statement impact of the revenue decline. Critical accounting judgements Accounting judgements in respect of the Inflexion transaction On 21 December 2023, the Group announced that it had exchanged on a transaction to sell 40% of the Group’s Healthcare business to Inflexion. Management have assessed the accounting implications arising from the transaction for the year ended 31 December 2023, taking into consideration the specific details set out in both the Share Option Agreement and Co-Investment Agreement. The most significant judgements included: • • • • Assessment of Control – Management considered the requirements of the applicable accounting standards, specifically ‘IFRS 10 – Consolidated Financial Statements’ and concluded that GlobalData Plc will have control of the Healthcare business, the results of which will therefore continue to be fully consolidated into the results of the GlobalData Plc Group from the date of completion. As at the same date, the Group will recognise a non-controlling interest within equity in the Group’s Statement of Financial Position. Put and Call Options – At the point at which all of the Conditions Precedent of the investment agreement with Inflexion have been fulfilled, the Group or Inflexion can exercise an option to sell (put option)/buy (call option) the 40% shareholding in the Group’s Healthcare business, following which the transaction will complete. Management have assessed that the put and call options meet the definition of a derivative as per ‘IFRS 9 – Financial Instruments’, and as such the options are measured at fair value and any movement in fair value will be recognised in the Income Statement. Management have measured the fair value of the options as at 31 December 2023 to be £nil. Completion date – Management have considered the Conditions Precedent set out within the Share Option Agreement, noting that the Conditions, some of which are outside of the control of the Group, must be fulfilled before the Put and Call Options can be exercised. As such, Management have concluded that the completion date will be the point at which the Options are exercised and as at 31 December 2023 the definition of a financial asset in accordance with IAS 32 has not been met. The Group does not have a virtually certain right to receive the cash proceeds from Inflexion and hence no receivable has been recognised within the Statement of Financial Position. Transaction Fees – Legal and professional fees incurred in relation to the transaction are recognised as a prepayment on the Group’s Statement of Financial Position as at 31 December 2023, representing incremental costs that are related directly to a probable future equity transaction. The costs will be transferred to equity when the equity transaction is recognised (creation of the non-controlling interest), or in the event that the put and call option is not exercised, the costs will be recognised in the Income Statement at the point that the transaction is no longer expected to complete. 104 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements • Debt and Hedge Accounting – At completion of the transaction, the Group will repay in full the outstanding term loan and RCF from the disposal proceeds in accordance with the mandatory prepayment clause of the Facilities Agreement. In accordance with the requirements of ‘IFRS 9 – Financial Instruments’ Management have updated the expected cash payment profile for the term loan within the recalculation of the carrying amount of the cost of the liability as at 21 December 2023, to reflect full settlement, noting that IFRS 9 specifies estimates of payments. By discounting the payments at the effective interest rate (‘EIR’) of 9.62%, being the EIR at the time of exchange, a cost of £3.4m is included in interest in the income statement. As of 21 December 2023, the hedged item (i.e. the future interest costs on the term loan) are no longer highly probable to occur and hence hedge accounting has been discontinued in accordance with IFRS 9. Identification of Cash-Generating Units IAS36 ‘Impairment of Assets’ requires that assets be carried on the statement of financial position at no more than their recoverable amount. An asset or cash-generating unit (CGU) is the smallest identifiable group of assets that generates cash inflows and is impaired when its carrying amount exceeds its recoverable amount. As at the date of the impairment review (30 September 2023), Management made the judgement that the Group had two CGUs, being Data, Analytics and Insights and MBI. Management is of the opinion that since acquisition and through being integrated and further developed within the Group, the acquired intangible assets of the Group all contribute to generating cash inflows for the wider business, covering all subject matter areas. All subject matters are accessible through the single operating platform (One Platform), and all products include access to a thin layer of information spanning across all markets and subjects. This represents the Group’s main CGU, named ‘Data, Analytics and Insights’. The Group’s recent acquisitions of LMC (2021) and TS Lombard (2022) have been fully integrated into this CGU and therefore formed part of the Data, Analytics and Insights CGU at the time of impairment review (they were identified as individual CGUs in the prior year). In making this judgement Management has determined that the assets acquired as part of the acquisitions of LMC and TS Lombard are no longer generating cash flows that are separately identifiable. Management therefore concluded that the level of consolidation and integration does not make it possible for LMC or TS Lombard to meet the definition of a separately identifiable CGU as required by IAS36. Management have concluded that the recent acquisition of MBI (acquired during 2022) remains a separate CGU as the product is inherently different to the Groups’ main offering, and the brand, strategy and management of the business is separate from the rest of the Group. As a result of these conclusions, as at the date of the impairment review (30 September 2023), the Group had two CGUs. Full disclosure is provided in note 13. Following the Group’s reorganisation at the beginning of FY24 to create three new customer-focused business divisions (being Healthcare, Consumer and Technology), an assessment of the Group’s CGUs will be performed ahead of the annual impairment review (30 September). Going concern The Group meets its day-to-day working capital requirements through free cash flow. The Group has closing cash of £19.8m as at 31 December 2023 (2022: £34.0m) and net bank debt of £243.9m (2022: net bank debt of £249.6m), being cash and cash equivalents less short and long-term borrowings, excluding lease liabilities. The Group has an outstanding term loan of £265.0m (2022: £290.0m) which is syndicated with 12 lenders. As at 31 December 2023, the Group had undrawn RCF of £120.0m which is syndicated with 13 lenders. During January 2024, £20.0m of the RCF was drawn down to support a share buy-back. The Group’s banking facilities are in place until August 2025, however the Group intends to fully repay the term loan upon completion of the investment agreement with Inflexion. In the unanticipated event that completion does not occur, the Group will be required to renew or extend its financing arrangements. The Group has generated £101.0m in cash from operations during 2023 (2022: £85.4m). Although the statement of financial position shows net current liabilities (current assets less current liabilities), included in current liabilities is £104.6m of deferred revenue that represents future income earnings. Excluding deferred revenue, the Group has net current assets of £49.8m (2022: £56.4m). Based on cash flow projections the Group considers the existing financing facilities to be adequate to meet short-term commitments. The finance facilities were issued with debt covenants which are measured on a quarterly basis. There have been no breaches of covenants in the year ended 31 December 2023. Management has reviewed forecast cash flows and there is no indication that there will be any breach in the next 12 months. The Directors have a reasonable expectation that there are no material uncertainties that cast significant doubt about the Group’s ability to continue in operation and meet its liabilities as they fall due for the foreseeable future, being a period of at least 12 months from the date of approval of the financial statements. The Directors have modelled a number of worst-case scenarios to consider their potential impact on the Group’s results, cash flow and loan covenant forecast. Key assumptions built into the scenarios focus ANNUAL REPORT AND ACCOUNTS 2023 105 FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements (continued) on revenue and cost growth. In addition to performing scenario planning, the Directors have also conducted stress testing of the Group’s forecasts and, taking into account reasonable downside sensitivities (acknowledging that such risks and uncertainties exist), the Directors are satisfied that the business is expected to operate within its facilities. The plausible downside scenarios modelled were as follows: (i) subscription sales in 2024 being approximately 10% lower than expectation (ii) cost growth in line with the current UK rate of inflation and (iii) both scenarios combined. There remains headroom on the covenants under each scenario and cash remained in excess of £16.3m in all months. Through our normal business practices, we are in regular communication with our lenders and are satisfied they will be in a position to continue supporting us for the foreseeable future. The Directors therefore consider the strong balance sheet, with good cash reserves and working capital along with financing arrangements, provide ample liquidity. Accordingly, the Directors have prepared the financial statements on a going concern basis. 2. Accounting policies a) Basis of consolidation The consolidated financial statements include the accounts of the Company and all of its subsidiary undertakings. • • • Subsidiaries are those entities controlled by the Group. Control exists when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Intra-group transactions, balances and unrealised gains on transactions between Group companies are eliminated. Where necessary, accounting policies of subsidiaries have been changed to ensure consistency with the Group’s accounting policies. The results and cash flows relating to a business are included in the consolidated income statement and the consolidated statement of cash flows from the date of acquisition or are excluded from the date of disposal as appropriate. b) Business combinations The Group applies the acquisition method in accounting for business combinations. The consideration transferred by the Group to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities incurred and the equity interests issued by the Group, which includes the fair value of any asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred. Assets acquired and liabilities assumed are generally measured at their acquisition-date fair values. Contingent consideration which has been determined to be a remuneration cost is expensed to the income statement, and cash payments are classified within cash flows from operations in the Statement of Cash Flows. c) Revenue recognition Revenue is measured at the fair value of consideration received or receivable and comprises amounts derived from services performed by the Group during the year in the normal course of business net of discounts, VAT and sales taxes, and provisions for cancellations/credit notes. Subscription income for online services, data and analytics is normally invoiced at the beginning of the services and is therefore recognised as a contract liability, “deferred revenue”, in the statement of financial position. Revenue is recognised evenly over the period of the contractual term as the performance obligations are satisfied evenly over the term of subscription. Revenue from single copy reports is recognised upon delivery. The client pays for a single static report and the company meets its contract obligation at the point in time the report is delivered to the client. Revenue from the provision of bespoke research services is recognised once contractual performance obligations have been delivered. Bespoke projects can have a single or series of different deliverables from reports, presentations or delivery of data workbooks. Revenue is recognised as each different contractual obligation within the series is satisfied. Event revenue is recognised when the event is held in line with the contract obligations. Other revenue is recognised in reference to performance obligations as contracted. In instances where the Group enters into transactions involving a range of the Group’s services, for example a subscription and custom research, the total transaction price for a contract is allocated amongst the various performance obligations based on their relative stand-alone selling prices. • • • • • • 106 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements Where amounts have been invoiced in advance of services performed and the amounts are due, this is included within deferred revenue as a contract liability. Similarly, if the Group satisfies a performance obligation before it receives the consideration or is contractually due, the Group recognises a contract asset within accrued income in the statement of financial position. The Group has recognised the incremental costs (for example commission) of obtaining sales contracts as an expense when incurred. d) Property, plant and equipment Property, plant and equipment is stated at historic cost, including any directly attributable costs of bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management, less accumulated depreciation and impairment losses. Depreciation is calculated on a straight-line basis over the estimated useful life of an asset and is applied to the cost less any residual value. The asset classes are depreciated over the following periods: • • • • Right-of-use assets: shorter of lease term and useful life; Freehold buildings: over 50 years; Fixtures, fittings and equipment: over 3 to 5 years; and Leasehold improvements: over 3 to 10 years. The useful life, the residual value and the depreciation method are reassessed at each reporting date. Where there is an indication of impairment, the carrying value of the property, plant and equipment is compared to the higher of value in use and the fair value less costs to sell. If the carrying value exceeds the higher of the value in use and fair value less the costs to sell the asset then the asset is impaired and its value reduced. e) Intangible assets Goodwill Goodwill is recognised to the extent that it arises through a business combination and represents the difference between the consideration transferred and the fair value of net identifiable assets acquired. Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to appropriate cash-generating units (those expected to benefit from the business combination) and is tested annually for impairment. In testing for impairment, the recoverable amount of a CGU based on value-in-use calculations is compared to the carrying value of goodwill. These calculations use post-tax cash flow projections based on five-year financial forecasts; year one being based upon Board approved budgets, with growth assumptions applied for years two to five. Cash flows beyond the five-year period are extrapolated using estimated long-term growth rates. Any impairment losses in respect of goodwill are not reversed. Acquired intangible assets Acquired intangible assets include software, customer relationships, brands and intellectual property (IP) rights and databases. Intangible assets acquired in material business combinations are capitalised at their fair value. The Board has a policy of engaging professional advisers on acquisitions with a purchase price greater than £10m to advise and assist in calculating intangible asset values. The Group consistently applies the following methodologies when determining the fair value at the date of acquisition for each class of identified intangible: • • • Customer relationships: net present value of future cash flows; Intellectual property and databases: cost to recreate the asset; and Brands: royalty relief method. Intangible assets are amortised on a straight-line basis over their estimated useful lives of 3 to 20 years for brands, customer relationships and IP rights. Amortisation and impairment charges are accounted for within the administrative costs category within the income statement. Within note 7, the Group separates out amortisation of acquired intangibles from other group amortisation charges. Computer software and websites Non-integral computer software purchases are capitalised at cost as intangible assets. The Group also capitalises development costs associated with new products in accordance with the development criteria prescribed within IAS38 “Intangible Assets”. These ANNUAL REPORT AND ACCOUNTS 2023 107 FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements (continued) costs are amortised on a straight-line basis over their estimated useful lives of 3 years. Amortisation and impairment charges are accounted for within the administrative costs category within the income statement. Costs associated with implementing or maintaining computer software programs are recognised as an expense. Software as a Service (SaaS) costs, in which the Group only receives the right to access the supplier’s application software in the future is a recognised as a service contract rather than a software lease or intangible asset. As such, these arrangements are expensed to the income statement rather than shown as an intangible asset. Impairment of intangible assets Goodwill is not subject to amortisation but is reviewed for impairment annually or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Intangible assets that are subject to amortisation are reviewed 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 carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). f) Taxation Tax expense recognised in the income statement for the year comprises the sum of current and deferred tax. Current tax is the expected tax payable on the taxable income for the year, using rates substantively enacted at the reporting date, and any adjustments to the tax payable in respect of previous years. Deferred taxation is provided in full on temporary differences between the carrying amount of the assets and liabilities in the financial statements and the tax base. Deferred tax assets are recognised only to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax is determined using the tax rates that have been enacted or substantially enacted by the reporting date and are expected to apply when the deferred tax liability is settled or the deferred tax asset is realised. Deferred tax is provided on temporary differences arising on investments in subsidiaries except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is not provided on temporary differences arising on the initial recognition of goodwill or on assets and liabilities other than in a business combination. Tax is recognised in the income statement, except where it relates to items recognised as other comprehensive income, in which case it is recognised in the statement of other comprehensive income, and tax which related to items recognised in equity is recognised in equity. Specifically, and in line with the application of IAS12 to share-based payments, tax deductions (current or deferred) up to the IFRS2 cumulative remuneration expense are recognised in the income statement as the tax is viewed as linked to the remuneration event. However, tax deductions (current or deferred) in excess of the IFRS2 cumulative remuneration expense are recognised in equity as the tax is viewed as linked to an equity item. g) Foreign currencies The results are presented in Pounds Sterling (£) which is the presentation currency of the Company and Group. Foreign currency transactions are translated into the functional currency of the entity at the rates of exchange ruling at the date of the transaction, and if still in existence at the year end the balance is retranslated at the rates of exchange ruling at the reporting date. Differences arising from changes in exchange rates during the year are taken to the income statement. For the purpose of presenting consolidated financial statements, the assets and liabilities of entities with a functional currency other than Sterling are retranslated to Sterling using exchange rates prevailing on the reporting date. Income and expense items and cash flows are translated at the average exchange rates for the period and exchange differences arising are recognised in other comprehensive income. Such translation differences are recognised in the income statement in the period in which a foreign operation is disposed of. h) Pensions The Group contributes to defined contribution pension schemes. Contributions to these schemes are charged to the income statement as incurred. 108 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements i) Provisions A provision is recognised in the statement of financial position when the Group has a legal obligation or constructive obligation as a result of a past event, it is more likely than not that an outflow of resources will be required to settle that obligation, and a reliable estimate of the amount can be made. Provisions are discounted if the time value of money is material. j) Leases The Group leases offices around the world, plus a small number of motor vehicles. Rental contracts are typically made for fixed periods but may have termination options. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease arrangements do not impose any covenants, but leased assets may not be used as security for borrowing purposes. For any new contracts entered into, the Group considers whether a contract is, or contains a lease. A lease is defined as ‘a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration’. To apply this definition the Group assesses whether the contract meets the following criteria: • • • The contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being identified at the time the asset is made available to the Group; The Group has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use, considering its rights within the defined scope of the contract; and The Group has the right to direct the use of the identified asset throughout the period of use. At the lease commencement date, the Group recognises the lease as a right-of-use asset and a corresponding liability on the statement of financial position. The right-of-use assets have been included in property, plant and equipment. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Group, an estimate of any costs to dismantle and remove the asset at the end of the lease and any lease payments made in advance of the lease commencement date (net of any incentives received). The Group depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Group also assesses the right-of-use asset for impairment when such indicators exist. At the commencement date, the Group measures the lease liability at the present value of the lease payments unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily available, or the lease specific incremental borrowing rate. Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The liability is remeasured to reflect any reassessment or modification, or if there are changes in in-substance fixed payments. When the liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset, or the income statement if the right-of-use asset is already reduced to zero. Termination options are included in a number of property leases across the Group. These options are used to maximise operational flexibility in terms of managing contracts. In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise a termination option. Periods after termination options are only included in the lease term if the termination option is reasonably certain not to be exercised. The Group has elected to account for short-term leases and leases of low-value assets using the practical expedients. Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in the income statement. Short-term leases are leases with a term of 12 months or less. Low-value assets comprise IT and copying equipment with a value of less than £5,000. The Group sub-leases a number of properties in the UK. However, all of the risks and rewards of ownership have not been transferred to the lessee and therefore the Group recognises the head lease asset as a right-of-use asset and recognises the rental income on the sub-lease operating lease contracts as other income. k) Financial instruments The Group has derivative and non-derivative financial instruments which comprise foreign currency contracts, interest rate swaps, put and call options, receivables, cash, loans and borrowings and trade payables. ANNUAL REPORT AND ACCOUNTS 2023 109 FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements (continued) Recognition and derecognition Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial instrument. Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and substantially all the risks and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or expires. Classification and initial measurement of financial assets Except for those trade receivables that do not contain a significant financing component and are measured at the transaction price in accordance with IFRS15, all financial assets are initially measured at fair value adjusted for transaction costs (where applicable). In the periods presented, all of the Group’s non-derivative financial assets are classified as at amortised cost. Financial assets are measured at amortised cost if the assets meet the following conditions: • • they are held within a business model whose objective is to hold the financial assets and collect its contractual cash flows; and the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding. After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial. The Group’s cash and cash equivalents, trade and other receivables fall into this category of financial instruments. Classification and initial measurement of financial liabilities Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs unless the Group designated a financial liability at fair value through profit or loss. Cash Cash comprises cash balances and highly liquid call deposits, together with other short-term highly liquid investments that are readily convertible to known amounts of cash, which are subject to an insignificant risk of changes in value. Bank overdrafts that form an integral part of the Group’s cash management are included as a component of cash for the purpose of the statement of cash flows. Derivative financial instruments The Group uses derivative financial instruments to reduce its exposure to fluctuations in interest rates and foreign currency exchange rates. Interest rate swaps are measured at fair values and any movement in fair value is recognised directly in other comprehensive income, to the extent that they are effective, with the ineffective portion being recognised in the income statement. In order to qualify for hedge accounting, the Group is required to document prospectively the economic relationship between the item being hedged and the hedging instrument. The Group is also required to demonstrate an assessment of the economic relationship between the hedged item and the hedging instrument, which shows that the hedge will be highly effective on an ongoing basis. This effectiveness testing is re-performed periodically to ensure that the hedge has remained, and is expected to remain, highly effective. Hedge accounting is discontinued when a hedging instrument is derecognised (e.g. through expiry or disposal), or no longer qualifies for hedge accounting. Foreign currency forward contract derivatives are measured at fair values and any movement in fair value is recognised in the income statement. Put and call option derivatives are measured at fair values and any movement in fair value is recognised in the income statement. Impairment of trade receivables The Group recognises lifetime expected credit losses (ECL) for trade receivables. The ECLs on these financial assets are estimated using a provision matrix based on the Group’s historical credit loss experience, adjusted for factors that are specific to the receivables, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date. The carrying amount is reduced by the ECL through the use of a provision account. When a trade receivable is considered uncollectable, it is written off against the provision account. Subsequent recoveries of amounts previously written off are credited against the provision account. Changes in the carrying amount of the provision are recognised in the consolidated income statement. 110 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements Trade and other payables Trade and other payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest method. l) Borrowings and borrowing costs Borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months from the reporting date. Borrowing costs, being interest, and other costs incurred in connection with the servicing of borrowings, are recognised as an expense when incurred. m) Share-based payments The Group operates share-based compensation plans under which the entity receives services from employees as consideration for equity instruments (options) of the Group. The fair value of the employee services received in exchange for the grant of the options and awards is recognised as an expense in the income statement. The total amount to be expensed is determined by reference to the fair value of the options granted. For both schemes 2 and 4, the original fair value on grant date is charged to the income statement based upon the Monte-Carlo method. Following modification on 30 November 2022, an additional charge for the beneficial modification was determined by the Black-Scholes method. The fair values calculated exclude the impact of any non- market service and performance vesting conditions (for example, profitability, sales growth targets and remaining an employee of the entity over a specified time period). Non-market vesting conditions are included in assumptions about the number of options and awards that are expected to vest. The total amount expensed is recognised over the vesting period, which is the period over which all of the specified existing conditions are to be satisfied. At each reporting date, the entity revises its estimates of the number of options and awards that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the income statement, with a corresponding adjustment to the share-based payments reserve within equity. n) Dividends Dividends on the Group’s ordinary shares are recognised as a liability in the Group’s financial statements, and as a deduction from equity, in the period in which the dividends are declared. Where such dividends are proposed subject to the approval of the Group’s shareholders, the dividends are only declared once shareholder approval has been obtained. o) Equity Share capital is determined using the nominal value of shares that have been issued. Premiums received on the initial issuing of share capital are credited to share premium account. Any transaction costs associated with the issuing of shares are deducted from share premium, net of any related income tax benefits. Retained earnings includes all current and prior period results as disclosed in the income statement. p) Employee Benefit Trust The assets and liabilities of the Employee Benefit Trust have been included in the Group’s financial statements because the Employee Benefit Trust is controlled by the Group. The cost of purchasing own shares held by the Employee Benefit Trust is shown as a deduction in arriving at total shareholders’ equity. q) Other Income Other income represents rental income on sub-lease property contracts and research & development tax credits. r) Presentation of non-statutory alternative performance measures The Directors believe that Adjusted EBITDA, Adjusted EBITDA margin, Adjusted profit before tax, Adjusted profit after tax and Adjusted earnings per share provide additional useful information on the operational performance of the Group to shareholders, and we review the results of the Group using these measures internally. The term ‘adjusted’ is not a defined term under IFRS and may not therefore be comparable with similarly titled profit measures reported by other companies. It is not intended to be a substitute for, or superior to, IFRS measures of profit. ANNUAL REPORT AND ACCOUNTS 2023 111 FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements (continued) Adjustments are made in respect of: Share-based payments and associated costs Share-based payment expenses are excluded from Adjusted EBITDA as they are a non-cash charge and the awards are equity-settled. Restructuring, M&A (including contingent consideration) and refinancing costs Amortisation and impairment of acquired intangible assets The Group excludes these costs from Adjusted EBITDA where the nature of the item, or its size, is not related to the operational performance of the Group and allows for comparability of underlying results. The amortisation charge for those intangible assets recognised on business combinations is excluded from Adjusted EBITDA since they are non-cash charges arising from historical investment activities. Any impairment charges recognised in relation to these intangible assets are also excluded from Adjusted EBITDA. This is a common adjustment made by acquisitive information service businesses and is therefore consistent with peers. Revenues associated with acquisitions, in the year of acquisition, are excluded from the calculation of underlying revenue. Revaluation of short- and long-term derivatives Unrealised operating foreign exchange gain/loss Gains and losses are recognised within Adjusted EBITDA when they are realised in cash terms and therefore we exclude non-cash movements arising from fluctuations in exchange rates which better aligns Adjusted EBITDA with the cash performance of the business. Revaluation of interest rate swap Gains and losses on the revaluation of the interest rate swap are excluded from Adjusted profit before tax which better aligns with the cash performance of the business. s) 2022 restatement Following a Financial Reporting Council (“FRC”) review of the consolidated financial statements for the year ended 31 December 2022, the Group has restated the Consolidated Statement of Cash Flows to present the settlement of the previous term loan and Revolving Credit Facilities (“RCF”), the proceeds from the new term loan and the loan fees incurred on the new facility as a net financing cash inflow of £53.5m within proceeds from borrowings. The amounts in respect of this transaction were previously presented gross, this restatement reflects that the cash inflow actually occurred on a net basis. The £53.5m comprises the following individual amounts: £m Repayment of the old term loan and RCF (229.2) Loan fees incurred on the new facility (7.3) Drawdown of the new term loan 290.0 Proceeds from borrowings 53.5 The proceeds from borrowings presented in the Consolidated Statement of Cash Flows also includes a balance of £31.0m in respect of drawdowns on the old RCF in the six months to June 2022 hence giving a total balance of £84.5m. The impact of the restatement is set out below: 2022 2022 2022 (reported) (restated) (change) Cash flows from financing activities: £m £m £m Settlement of loan (229.2) – 229.2 Proceeds from borrowings 321.0 84.5 (236.5) Loan refinancing fee (8.0) (0.7) 7.3 83.8 83.8 – The changes have a £nil net impact on the Group’s financial position and performance for the year ended 31 December 2022. 112 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements 3. New or revised standards or interpretations This report has been prepared based on the accounting policies detailed in the Group’s financial statements for the year ended 31 December 2023 and is consistent with the policies applied in the previous year, except for the following new standards which were effective for an accounting period that begins on or after 1 January 2023. The new standards which are effective during the year (and have not had any material impact on the disclosures or on the amounts reported in these financial statements) are: • • • • • IFRS 17: Insurance contracts; Amendments to IAS 1: Presentation of Financial Statements and IFRS Practice Statement 2: Making Materiality Judgements – Disclosure of Accounting Policies; Amendments to IAS 12: Income Taxes – Deferred Tax related to Assets and Liabilities arising from a Single Transaction; Amendments to IAS 12: Income Taxes – International Tax Reform – Pillar Two Model Rules; and Amendments to IAS 8: Accounting Polices, Changes in Accounting Estimates and Errors – Definition of Accounting Estimates. International Financial Reporting Standards (“standards”) in issue but not yet effective The Group has not applied the following new and revised IFRSs that have been issued but are not yet effective: • • • • • Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (no effective date yet); Amendments to IAS 1: Classification of Liabilities as Current or Non-current (effective from 1 January 2024); Amendments to IAS 1: Non-current Liabilities with Covenants (effective from 1 January 2024); Amendments to IAS 7 and IFRS 7: Supplier Finance Arrangements (effective from 1 January 2024); and Amendments to IFRS 16: Lease Liability in a Sale and Leaseback (effective from 1 January 2024). The above standards are not yet effective and therefore have not been applied in the financial statements. The Directors do not expect that the adoption of the Standards listed above will have a material impact on the financial statements of the Group in future periods. 4. Segmental analysis The principal activity of GlobalData Plc and its subsidiaries (together ‘the Group’) is to provide business information in the form of high quality proprietary data, analytics and insights to clients in multiple sectors. IFRS8 “Operating Segments” requires the segment information presented in the financial statements to be that which is used internally by the chief operating decision maker to evaluate the performance of the business and to decide how to allocate resources. The Group has identified the Chief Executive as its chief operating decision maker. The Group maintains a centralised operating model and single product platform (One Platform), which is underpinned by a common taxonomy, shared development resource, and new data science technologies. The fundamental principle of the GlobalData business model is to provide our clients with subscription access to our proprietary data, analytics, and insights platform, with the offering of ancillary services such as consulting, single copy reports and events. The vast majority of data sold by the Group is produced by a central research team which produces data for the Group as a whole. The central research team reports to one central individual, the Managing Director of the India operation, who reports to the Group Chief Executive. ‘Data, Analytics and Insights’ is therefore considered to be the operating segment of the Group. The Group profit or loss is reported to the Chief Executive on a monthly basis and consists of earnings before interest, tax, depreciation, amortisation, central overheads and other adjusting items. The Chief Executive also monitors revenue within the operating segment. The Group considers the use of a single operating segment to be appropriate due to: • • • • The Chief Executive reviewing profit or loss at the Group level; Utilising a centralised operating model; Being an integrated solutions based business, rather than a portfolio business; and The M&A strategy of the Group being to fully integrate within the One Platform. ANNUAL REPORT AND ACCOUNTS 2023 113 FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements (continued) Following the Group’s reorganisation at the beginning of FY24 to create three new customer-focused business divisions (being Healthcare, Consumer and Technology), an assessment of the Group’s reportable segments will be performed during H1 2024. A reconciliation of Adjusted EBITDA to profit before tax from continuing operations is set out below: Year ended Year ended 31 December 2023 31 December 2022 £m £m Adjusted EBITDA 110.8 86.4 Restructuring costs (1.7) (0.6) M&A costs (0.4) (2.9) Contingent consideration (0.9) (1.0) Refinancing costs – (1.9) Share-based payment charge (19.4) (4.1) Costs relating to share-based payment schemes (0.2) (0.9) Revaluation gain/(loss) on short and long-term derivatives 0.8 (0.6) Unrealised operating foreign exchange gains/(losses) 1.5 (1.9) Amortisation of acquired intangibles (9.0) (9.1) Depreciation (6.2) (6.4) Amortisation (excluding amortisation of acquired intangible assets) (1.6) (1.0) Finance costs (32.2) (17.6) Profit before tax 41.5 38.4 Geographical analysis Our primary geographical markets are serviced by our global sales teams which are organised as Europe, US and Asia Pacific by virtue of the team location. The below disaggregated revenue is derived from the geographical location of our customers rather than the team structure the Group is organised by. From continuing operations Year ended 31 December 2023 Asia Rest of UK Europe Americas1 Pacific MENA2 World Total £m £m £m £m £m £m £m Revenue from external customers 43.4 73.9 99.1 27.9 20.4 8.4 273.1 Year ended 31 December 2022 Asia Rest of UK Europe Americas1 Pacific MENA2 World Total £m £m £m £m £m £m £m Revenue from external customers 36.0 64.7 91.4 27.2 16.6 7.3 243.2 1 Americas includes revenue from the United States of America of £95.8m (2022: £86.7m) 2 Middle East & North Africa Intangible assets held in the US and Canada were £35.1m (2022: £35.9m), of which £31.6m related to goodwill (2022: £31.6m). Intangible assets held in the UAE were £12.1m (2022: £12.8m) of which £11.4m related to goodwill (2022: £11.4m). All other non-current assets are held in the UK. The largest customer represented less than 2% of the Group’s consolidated revenue. 114 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements 5. Revenue The Group generates revenue from services provided over a period of time such as recurring subscriptions and other services which are deliverable at a point in time such as reports, events and custom research. Subscription income for online services, data and analytics (typically 12 months) is normally invoiced at the beginning of the services and is therefore recognised as a contract liability, “deferred revenue”, in the statement of financial position. Revenue is recognised evenly over the period of the contractual term as the performance obligations are satisfied evenly over the term of subscription. The revenue on services delivered at a point in time is recognised when our contractual obligation is satisfied, such as delivery of a static report or delivery of an event. The obligation on these types of contracts is a discrete obligation, which once met satisfies the Group performance obligation under the terms of the contract. Any invoiced contracted amounts which are still subject to performance obligations and where the payment has been received or is contractually due are recognised within deferred revenue at the statement of financial position date. Typically, the Group receives settlement of cash at the start of each contract and standard terms are zero days. Similarly, if the Group satisfies a performance obligation before it receives the consideration or is contractually due the Group recognises a contract asset within accrued income in the statement of financial position. Deferred Revenue recognised within Revenue recognised in the the Consolidated Statement of Consolidated Income Statement Financial Position Year ended Year ended As at As at 31 December 2023 31 December 2022 31 December 2023 31 December 2022 £m £m £m £m Services transferred: Over a period of time 215.3 196.5 89.5 91.6 At a point in time 57.8 46.7 15.1 12.4 Total 273.1 243.2 104.6 104.0 As subscriptions are typically for periods of 12 months the majority of deferred revenue held at 31 December will be recognised in the income statement in the following year. As at 31 December 2023, £2.0m (2022: £1.1m) of the deferred revenue balance will be recognised beyond the next 12 months. In the year ended 31 December 2023 the Group recognised revenue of £102.9m (2022: £81.0m) that was included in the deferred revenue balance at the beginning of the period. The opening deferred revenue balance as at 1 January 2022 was £81.4m. As at 31 December 2023, the total non-cancellable obligations within deferred revenue to fulfil revenue amounted to £104.6m (2022: £104.0m). As at the same date, the total non-cancellable obligations within Invoiced Forward Revenue to fulfil revenue amounted to £135.2m (2022: £133.5m). In instances where the Group enters into transactions involving a range of the Group’s services, for example a subscription and custom research, the total transaction price for a contract is allocated amongst the various performance obligations based on their relative stand-alone selling prices. 6. Operating profit Operating profit is stated after the following expenses relating to continuing operations: Year ended Year ended 31 December 2023 31 December 2022 £m £m Cost of sales 132.0 125.7 Administrative costs 65.7 60.9 197.7 186.6 Losses on trade receivables 2.3 0.7 Total operating expenses 200.0 187.3 ANNUAL REPORT AND ACCOUNTS 2023 115 FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements (continued) Cost of sales includes all directly attributable costs of sale including product, consulting and sales costs. Administrative costs includes all other costs of operations. Included within other administrative costs are the following expenses: Year ended Year ended 31 December 2023 31 December 2022 £m £m Depreciation of property, plant and equipment 6.2 6.4 Amortisation of intangible assets 10.6 10.1 (Gain)/loss (including realised and unrealised) on foreign exchange (1.0) 2.7 Auditor’s remuneration 1.3 1.0 Auditor’s remuneration: Year ended Year ended 31 December 2023 31 December 2022 £m £m Audit of the Company’s and the consolidated financial statements 0.6 0.5 Audit of the subsidiary companies’ financial statements 0.6 0.5 All other services (including half year review) 0.1 – Total auditor’s remuneration 1.3 1.0 7. Adjusting items Year ended Year ended 31 December 2023 31 December 2022 £m £m Share-based payment charge 19.4 4.1 Amortisation of acquired intangibles 9.0 9.1 Restructuring costs 1.7 0.6 Contingent consideration 0.9 1.0 M&A costs 0.4 2.9 Costs relating to share-based payments scheme 0.2 0.9 Refinancing costs – 1.9 Revaluation (gain)/loss on short and long-term derivatives (0.8) 0.6 Unrealised operating foreign exchange (gain)/loss (1.5) 1.9 Total adjusting items 29.3 23.0 The adjustments made are as follows: The share-based payments charge is in relation to the share-based compensation plans (detailed in note 25) under which the entity receives services from employees as consideration for equity instruments (options) of the Group. The fair value of the employee services received in exchange for the grant of the options and awards is recognised as an expense in the income statement. The total amount to be expensed is determined by reference to the fair value of the options granted. The original fair value on grant date is charged to the income statement based upon the Monte-Carlo method. Following modification on 30 November 2022, an additional charge for the beneficial modification was determined by the Black-Scholes method. The amortisation charge for those intangible assets recognised on business combinations. Restructuring costs relate to redundancy payments and professional fees incurred in relation to group reorganisation projects. • • • 116 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements • • • • • • The contingent consideration amounts relate to payments due to the previous owners of MBI and TS Lombard between 2023 and 2025. These have been treated as remuneration costs due to their being contingent upon the former owners remaining as employees of the Group at the time of payment. The M&A costs consist of professional fees incurred in performing due diligence relating to potential acquisition targets and redundancy costs in relation to group integration projects. Costs relating to share-based payments scheme consist of employer taxes borne as a result of the vesting of options within the final tranche of Scheme 1 during the year, and professional fees incurred in advice obtained relating to the consolidation and subdivision of share capital. Refinancing costs in the prior year consisted of legal fees incurred in relation to (i) the extension of the previously held term loan and RCF by one year (completed during June 2022) and (ii) the arrangement of the new loan facility which was drawn down upon during August 2022. The revaluation of short and long-term derivatives relates to movement in the fair value of the short and long-term derivatives detailed in note 16. Unrealised operating foreign exchange gains and losses relate to non-cash exchange losses and gains made on operating items. 8. Particulars of employees Employee benefit expense Year ended Year ended 31 December 2023 31 December 2022 £m £m Wages and salaries 116.5 115.4 Social security costs 8.8 8.2 Pension costs 1.8 2.1 Share-based payments charge (note 25) 19.4 4.1 146.5 129.8 Termination costs incurred during the year amounted to £0.2m (2022: £0.2m). Pension costs represents payments made into defined contribution schemes. Number of employees The average monthly number of persons, including Executive Directors, employed by the Group during the year was as follows: Year ended Year ended 31 December 2023 31 December 2022 No. No. Researchers and analysts 2,859 3,004 Sales and admin 701 718 3,560 3,722 There were no persons employed by the Company during the year (2022: nil). ANNUAL REPORT AND ACCOUNTS 2023 117 FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements (continued) 9. Key management compensation Key management is defined as Directors plus all members of the Group’s Senior Management Team. In the year ended 31 December 2023, key management consisted of 25 employees (2022: 24 employees). Year ended Year ended 31 December 2023 31 December 2022 £m £m Short-term employee benefits 5.1 4.9 Post-employment benefits 0.1 0.1 Share-based payments 11.8 2.2 17.0 7.2 Post-employment benefits are comprised of payments made into the employees’ defined contribution pension schemes. Information regarding Directors’ remuneration, share options and bonuses are set out in the Directors’ Remuneration Report on pages 72 to 82. 10. Net finance costs Year ended Year ended 31 December 2023 31 December 2022 £m £m Loan interest cost 28.6 16.4 Lease interest cost 1.1 1.3 Revaluation of interest rate swap 2.8 – Other interest cost 0.1 0.1 Other interest income (0.4) (0.2) 32.2 17.6 Loan interest cost includes non-cash interest relating to financial liabilities measured at amortised cost of £5.1m (2022: 2.1m). The increased charge in the year reflects the change in anticipated cash flows on the term loan. The Group intends to fully repay the loan upon completion of the investment agreement with Inflexion. As a result of the change in anticipated cash flows, the Group recognised a non-cash interest expense of £3.4m in accordance with IFRS 9, which requires that any revisions to the estimate of payments, should be adjusted against the amortised cost of a financial liability by recalculating the present value of the estimated future cash flows, discounted at the financial instrument’s original effective interest rate. The £2.8m charge in respect of the revaluation of the interest rate swap (note 16) reflects that the hedged items (future interest repayments) are no longer probable or expected to occur and as such hedge accounting has been discontinued. The cumulative loss balance held in the cash flow hedge reserve of £2.8m was transferred to the income statement at the end of the year (2022: £3.9m loss recognised through the statement of other comprehensive income). 118 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements 11. Income tax Year ended Year ended 31 December 2023 31 December 2022 £m £m Income statement Current income tax: Current income tax (17.2) (10.6) Adjustments in respect of prior years 1.3 (0.3) (15.9) (10.9) Deferred income tax: Relating to origination and reversal of temporary differences 4.4 0.9 Effect of change in tax rates 0.4 1.3 Adjustments in respect of deferred tax of previous years 0.1 1.1 Movement in unrecognised deferred tax 0.3 (0.3) 5.2 3.0 Total income tax expense in income statement (10.7) (7.9) Year ended Year ended 31 December 2023 31 December 2022 £m £m Recognised in statement of changes in equity Corporation tax income on share options exercised 1.7 4.4 Deferred tax expense on share-based payments (0.9) (2.5) Total tax income recognised directly in equity 0.8 1.9 The investment agreement with Inflexion has no tax impact in the current period as the Group will retain beneficial ownership of the divesting assets until completion and the reorganisation steps required to create the investment perimeter will not be undertaken until 2024. The tax charge is reconciled to the standard corporation tax rate applicable in the UK (which increased from 19% to 25% on 1 April 2023) as follows: Year ended Year ended 31 December 2023 31 December 2022 £m £m Profit before tax 41.5 38.4 Tax at the UK corporation tax rate of 23.5% (2022: 19%) (9.8) (7.3) Effects of: Non-taxable income for tax purposes 0.1 0.2 Non-deductible expenses for tax purposes (1.3) (1.3) Movement in share-based payments (0.1) – Effect of tax rates in overseas jurisdictions 0.2 (1.3) Overseas tax (1.9) – Effect of change in tax rates 0.4 1.3 Adjustments in respect of current income tax of previous years 1.4 0.8 Movement in unrecognised deferred tax 0.3 (0.3) (10.7) (7.9) ANNUAL REPORT AND ACCOUNTS 2023 119 FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements (continued) 12. Earnings per share The calculation of the basic earnings per share is based on the earnings attributable to ordinary shareholders of the parent company divided by the weighted average number of shares in issue during the period. The Group also has a share options scheme in place and therefore the Group has calculated the dilutive effect of these options. Pursuant to a capital reorganisation exercise undertaken on 25 July 2023, the Company’s existing 118,303,869 ordinary shares in issue (nominal value £0.000714 per share) were consolidated, based on 1 consolidated share for every 14 existing ordinary shares, and then subdivided, based on 100 new ordinary shares for every 1 consolidated share. Post-reorganisation, there were 845,027,700 ordinary shares in issue (nominal value £0.0001 per share) which were admitted to AIM and commenced dealing on 26 July 2023. The prior year comparatives have been restated to reflect the impact of the share-split on basic and diluted earnings per share in accordance with IAS 33: Earnings Per Share. The earnings per share presented below is based upon the post-reorganisation share structure: Year ended Year ended 31 December 2023 31 December 2022 Restated Earnings per share attributable to equity holders from continuing operations: Basic Profit for the period attributable to ordinary shareholders of the parent company (£m) 30.8 30.5 Weighted average number of shares (no’ m) 807.1 805.0 Basic earnings per share (pence) 3.8 3.8 Diluted Profit for the period attributable to ordinary shareholders of the parent company (£m) 30.8 30.5 Weighted average number of shares (no’ m) 818.2 819.3 Diluted earnings per share (pence) 3.8 3.7 Reconciliation of basic weighted average number of shares to the diluted weighted average number of shares: Year ended Year ended 31 December 2023 31 December 2022 Restated No’ m No’ m Basic weighted average number of shares, net of shares held in treasury reserve 807.1 805.0 Dilutive share options in issue – scheme 1 4.5 14.3 Dilutive share options in issue – scheme 2 6.6 – Diluted weighted average number of shares 818.2 819.3 120 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements The diluted earnings per share calculation does not include performance-related share options where the performance criteria had not been met in the period, in accordance with IAS 33. The table below shows the number of share options which could become dilutive should future performance criteria be met. It excludes 6,624,997 options which are anticipated to vest in the year ended 31 December 2024 as these are included in the diluted weighted average number of shares calculation above given the performance criteria for these options has been met. Potentially dilutive shares 2024 2025 2026 2027 Total Schedule No. No. No. No. No. Scheme 2 – 6,624,997 6,624,997 6,624,997 19,874,991 Scheme 4 – 1,964,276 3,928,552 13,749,935 19,642,763 Total – 8,589,273 10,553,549 20,374,932 39,517,754 13. Intangible assets IP rights Customer and AUC* Software relationships Brands database Goodwill Total £m £m £m £m £m £m £m Cost As at 1 January 2022 – 12.8 55.8 16.2 75.5 302.7 463.0 Additions: Business combinations – 0.9 9.5 10.0 2.4 19.2 42.0 Additions: Separately acquired – 1.7 – – – – 1.7 Fair value adjustment – – – – – 0.1 0.1 As at 31 December 2022 – 15.4 65.3 26.2 77.9 322.0 506.8 Additions: Separately acquired 0.2 3.0 – 0.1 – – 3.3 As at 31 December 2023 0.2 18.4 65.3 26.3 77.9 322.0 510.1 Amortisation As at 1 January 2022 – (11.0) (32.6) (11.3) (49.5) (10.9) (115.3) Additions: Business combinations – (0.8) – – (0.5) – (1.3) Charge for the year – (1.1) (5.2) (0.9) (2.9) – (10.1) As at 31 December 2022 – (12.9) (37.8) (12.2) (52.9) (10.9) (126.7) Charge for the year – (1.6) (4.7) (1.2) (3.1) – (10.6) As at 31 December 2023 – (14.5) (42.5) (13.4) (56.0) (10.9) (137.3) Net book value As at 31 December 2023 0.2 3.9 22.8 12.9 21.9 311.1 372.8 As at 31 December 2022 – 2.5 27.5 14.0 25.0 311.1 380.1 *AUC: Assets under construction which will be transferred to software post development. The Group has capitalised £2.5m of internally generated intangible assets (2022: £1.5m). As at 31 December 2023, the net book value of internally generated intangible assets is £4.0m (2022: £1.9m). ANNUAL REPORT AND ACCOUNTS 2023 121 FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements (continued) As at 31 December 2023, the carrying value and remaining amortisation period of the significant customer relationships, brands and IP rights and database assets were as follows: Customer relationships Brands IP rights and database Carrying Remaining Carrying Remaining Carrying Remaining value amortisation value amortisation value amortisation £m period £m period £m period Infinata 0.5 2 years – – – – MEED 0.7 1 year – – – – AROQ 0.5 5 years – – – – Research Views 3.6 1-7 years – – – – GlobalData 0.2 1 year 2.7 7 years – – Verdict – – 0.9 4 years – – Progressive Content 0.2 4 years – – 0.3 2 years Life Sciences 3.3 8 years – – 8.1 9 years LMC 5.7 4-10 years – – 12.1 8 years MBI 4.6 4-9 years 8.7 19 years 0.3 4 years TS Lombard 3.5 9-12 years 0.6 19 years 1.1 4 years Total carrying value 22.8 12.9 21.9 Impairment tests for goodwill and intangible assets Goodwill and intangibles are allocated to the cash-generating unit (CGU) that is expected to benefit from the use of the asset. The Group tests goodwill and intangible assets as at 30 September each year for impairment and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The recoverable amount of a CGU is determined based on value in use calculations. These calculations use post-tax cash flow projections based on the next financial year’s budget with growth rates applied to generate a five-year forecast. Cash flows beyond the five-year period are extrapolated using estimated long- term growth rates. The Group operates within a single operating segment, being ‘Data, Analytics and Insights’. However, in accordance with IAS36, Impairment of Assets, the Group has to consider impairment indicators for goodwill and intangible assets on the value of the CGUs. A CGU is defined as the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. Management is of the opinion that since acquisition and through being integrated and further developed within the Group, the acquired intangible assets of the Group all contribute to generating cash inflows for the wider business, covering all subject matter areas. All subject matters are accessible through the single operating platform (One Platform), and all products include access to a thin layer of information spanning across all markets and subjects. This represents the Group’s main CGU, named ‘Data, Analytics and Insights’. The Group’s recent acquisitions of LMC (2021) and TS Lombard (2022) have been fully integrated into this CGU and therefore formed part of the Data, Analytics and Insights CGU at the time of impairment review (they were identified as individual CGUs in the prior year). In making this judgement Management has determined that the assets acquired as part of the acquisitions of LMC and TS Lombard are no longer generating cash flows that are separately identifiable. Management therefore concluded that the level of consolidation and integration does not make it possible for LMC or TS Lombard to meet the definition of a separately identifiable CGU as required by IAS36. Management have concluded that the recent acquisition of Media Business Insights ‘MBI’ (2022) remains a separate CGU as the product is inherently different to the Groups’ main offering, and the brand, strategy and management of the business is separate from the rest of the Group. As a result of these conclusions, as at the date of the impairment review (30 September 2023), the Group had two CGUs. Management recognises that this approach is different to the conclusion reached regarding the segmental reporting rationale of the Group; however, this is appropriate because the IFRS criteria for identifying segments and CGUs differ. Management has considered whether events should be classified as a separate CGU but have concluded that this is a route to market with the same underlying Data, Analytics and Insights product. 122 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements Following the Group’s reorganisation at the beginning of FY24 to create three new customer-focused business divisions (being Healthcare, Consumer and Technology), an assessment of the Group’s CGUs will be performed ahead of the annual impairment review (30 September). Overall, within the impairment review performed as at 30 September 2023, the Group had sufficient headroom on the carrying value of goodwill and intangible assets, with the CGUs having the following headroom: Data, Analytics and Insights: £1,218.4m and MBI: £9.7m. The goodwill allocated to each CGU as at the date of impairment review (30 September 2023) was £301.6m to Data, Analytics and Insights and £9.5m to MBI. Assumptions The recoverable amounts of the CGUs are determined from value in use calculations, which are based on the cash flow projections for each CGU. Value in use projections are based on Board approved revenue and cost budgets for 2024, with revenue and cost increases to cover the period 2025-2028. Revenue growth rates applied from 2025 onwards are based on forecast growth rates which are based upon Management’s expectation of performance over this period. These rates are comparable with or lower than historic growth performance. Cost increases from 2025 onwards are based upon the Bank of England long-term inflation forecast. The value in use calculations use a post-tax discount rate against post-tax cash flows. The post-tax discount rate is derived by calculating weighted average costs of equity and debt. The rate reflects appropriate adjustments relating to market risk and risk factors of each CGU. In order to calculate a pre-tax discount rate, which is disclosed below for each CGU, tax cash flows are removed from the calculations and goalseek methodology is applied to calculate the pre-tax discount rate which results in the same headroom for each CGU as the post-tax calculation. Across both CGUs, a terminal value calculation has been determined post 2028 using a growth rate of 2.0% in accordance with long-term inflation forecasts. The key assumptions are set out below: Increase in revenue Increase in costs Pre-tax Terminal growth (for years 1 to 5) (for years 1 to 5) discount rate rate 2023 2022 2023 2022 2023 2022 2023 2022 Data, Analytics and Insights 7.7% 7.4% 2.0% 2.0% 13.6% 11.9% 2.0% 2.0% MBI 3.0% 5.2% 2.0% 2.0% 13.6% 15.1% 2.0% 2.0% Management has undertaken sensitivity analysis taking into consideration the impact of key impairment test assumptions arising from a range of possible future trading and economic scenarios on each CGU. The following individual scenarios would need to occur before impairment is triggered within the Group: Revenue growth Discount rate Cash-generating unit falls by* rises by* Data, Analytics and Insights (17.8%) 32.8% MBI (2.3%) 3.9% *percentage points No indication of impairment was noted from Management’s review; there is headroom in each CGU. Management acknowledges the sensitivity of the revenue growth and discount rate assumptions applied to the MBI CGU; however, Management is comfortable with these assumptions and will continue to monitor performance regularly for any indicators of future impairment loss. Management recognises that the 2% cost growth assumption is lower than the current rate of inflation; however, the Group operates a focused approach to cost management, including mitigating the impact of inflation through advancements in technology and efficiency savings and has a strong track record of achieving this. Therefore, Management considers the assumption to be reasonable. Management have modelled a reasonably possible scenario in which revenue growth in each CGU is 3.0% lower than the assumptions used within the impairment review. In this scenario there continues to be no indication of impairment within the Data, Analytics and Insights CGU. Within the MBI CGU, given the assumed revenue growth rate within the impairment review was 3.0%, this results in a 0.0% growth rate within the modelled scenario. In this scenario, an impairment of £3.1m would be recognised. ANNUAL REPORT AND ACCOUNTS 2023 123 FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements (continued) Management recognises that whilst this scenario is plausible, it is highly unlikely. Additionally, in a scenario in which revenue growth is lower than expectation, cost mitigations could be implemented to limit the income statement impact of the revenue decline. Amortisation Amortisation and impairment charges are accounted for within the administrative costs category within the income statement. Within note 7, the Group separates out amortisation of acquired intangibles from other group amortisation charges. 14. Property, plant and equipment Fixtures, fittings & Leasehold Buildings equipment improvements Total £m £m £m £m Cost As at 1 January 2022 43.2 7.8 1.8 52.8 Additions: Business combinations – 0.3 – 0.3 Additions: Separately acquired 0.6 0.7 0.3 1.6 Foreign currency retranslation 0.8 0.1 – 0.9 Disposals (0.4) (0.2) – (0.6) As at 31 December 2022 44.2 8.7 2.1 55.0 Additions: Separately acquired 1.5 0.6 0.3 2.4 Foreign currency retranslation (0.7) (0.2) – (0.9) Disposals (1.5) (0.4) – (1.9) As at 31 December 2023 43.5 8.7 2.4 54.6 Depreciation As at 1 January 2022 (11.5) (5.5) (0.5) (17.5) Additions: Business combinations – (0.2) – (0.2) Charge for the year (4.7) (1.5) (0.2) (6.4) Foreign currency retranslation (0.4) (0.1) – (0.5) Disposals 0.4 0.2 – 0.6 As at 31 December 2022 (16.2) (7.1) (0.7) (24.0) Charge for the year (5.1) (0.9) (0.2) (6.2) Foreign currency retranslation 0.5 0.2 – 0.7 Disposals 1.1 0.4 – 1.5 As at 31 December 2023 (19.7) (7.4) (0.9) (28.0) Net book value As at 31 December 2023 23.8 1.3 1.5 26.6 As at 31 December 2022 28.0 1.6 1.4 31.0 124 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements Included in the net carrying amount of property, plant and equipment as at 31 December 2023 are right-of-use assets as follows: Buildings £m Cost As at 1 January 2023 44.2 Additions: Separately acquired 1.5 Foreign currency retranslation (0.7) Disposals (1.5) As at 31 December 2023 43.5 Depreciation As at 1 January 2023 (16.2) Charge for the year (5.1) Foreign currency retranslation 0.5 Disposals 1.1 As at 31 December 2023 (19.7) Net book value As at 31 December 2023 23.8 As at 31 December 2022 28.0 15. Leases The Group has leases for office buildings and motor vehicles. With the exception of short-term leases and leases of low-value underlying assets, each lease is reflected in the statement of financial position as a right-of-use asset and a lease liability. The Group classifies its right-of-use assets in a consistent manner to its property, plant and equipment (see note 14). Lease liabilities are presented in the statement of financial position as follows: 31 December 31 December 2023 2022 £m £m Current lease liabilities 4.3 5.4 Non-current lease liabilities 21.4 24.6 25.7 30.0 The table below describes the nature of the Group’s leasing activities by type of right-of-use asset recognised in the statement of financial position: No. of No. of right-of- Range of Average No. of leases leases with use assets remaining remaining with extension termination leased term lease term options options Office buildings 22 0-10 years 3 years 0 1 ANNUAL REPORT AND ACCOUNTS 2023 125 FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements (continued) The lease liabilities are secured by the related underlying assets. Future minimum lease payments at 31 December 2023 were as follows: Within one One to After year five years five years Total As at 31 December 2023 £m £m £m £m Lease payments 5.2 12.7 12.2 30.1 Finance charges (0.9) (2.4) (1.1) (4.4) Net present values 4.3 10.3 11.1 25.7 Within one One to After year five years five years Total As at 31 December 2022 £m £m £m £m Lease payments 6.0 14.3 15.0 35.3 Finance charges (1.0) (2.7) (1.6) (5.3) Net present values 5.0 11.6 13.4 30.0 Lease payments not recognised as a liability The Group has elected not to recognise a lease liability for short-term leases (leases with an expected term of 12 months or less) or for leases of low-value assets. Payments made under such leases are expensed on a straight-line basis. The expense relating to payments not included in the measurement of the lease liability was £nil (2022: £nil). At 31 December 2023 the Group was committed to short-term leases and the total commitment at that date was £0.1m (2022: £0.1m). At 31 December 2023 the Group had not committed to any leases which had not yet commenced, excluding those recognised as a lease liability. The Group sub-lets certain areas of its property portfolio. As at 31 December 2023, the Group had contracts with sub-tenants for the following future minimum lease rentals: 31 December 2023 31 December 2022 £m £m Office buildings Within one year – 0.1 Within one to two years – 0.1 Within two to three years – 0.1 Within three to four years – 0.1 Within four to five years – 0.1 Over five years – – – 0.5 126 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements 16. Derivative assets and liabilities 31 December 2023 31 December 2022 Assets Liabilities Assets Liabilities £m £m £m £m Cash flow hedges: – Interest rate swaps – – – (3.9) Held-for-trading*: – Interest rate swaps – (2.8) – – – Forward foreign currency contracts 0.5 (0.1) 0.9 (1.3) Total 0.5 (2.9) 0.9 (5.2) Current: 0.5 (0.1) 0.9 (1.3) Non-current: – (2.8) – (3.9) *Derivatives which do not meet the tests for hedge accounting under IFRS9 or which are not designated as hedging instruments are referred to as ‘held-for-trading’. The Group uses derivative financial instruments to reduce its exposure to fluctuations in both interest rates and foreign currency exchange rates. The Group does not use derivatives for speculative purposes. All derivatives are undertaken for risk management purposes. Classification is based on when the derivatives mature. The Group entered into an interest rate swap on 21 October 2022, with an effective date of 30 September 2022 based on a notional amount of £290.0m, which aligned to the initial term loan draw down. On 3 April 2023, the Group voluntarily repaid £25.0m of the term loan (note 20). On the same date, the swap terms were amended to match the remaining notional term loan amount of £265.0m. No other amendments to the terms were made. The agreement is to swap, on a quarterly basis, a floating rate of interest (GBP SONIA) for a fixed rate of 4.9125%. The fixed interest is payable quarterly on the last business day of each of March, June, September and December through to 5 August 2025. Change in fair value of the hedging instrument used as the Financial basis for recognising statement hedge ineffectiveness Nominal amount of Hedging instrument Carrying value line item for the period hedging instrument Interest rate swap £2.8m liability Long-term derivative N/A – hedge £265.0m (2022: £3.9m liability) liabilities 100% effective Given the same interest rate benchmark (GBP SONIA) is used in the hedging instrument (the swap) and the hedged item (the term loan), and the payments are settled at the same date each quarter, there is an effective economic relationship between the hedging instrument and the hedged item. The total £265.0m swap is designated as a hedge of the total £265.0m term loan, therefore, a 1:1 hedge ratio has been established on a current notional basis. The following potential sources of hedge ineffectiveness have been identified: • • Credit risk - A change in the credit risk of the Group or the counterparty to the interest rate swap; and Critical terms - The possibility of changes to the critical terms of the hedged item such that they no longer match those of the hedging instrument. The interest rate swap meets the definition of a derivative in accordance with IFRS9. Changes in fair value of derivative financial instruments that are designated, and effective, cash flow hedges of forecast transactions are recognised in other comprehensive income and accumulated under the heading of cash flow hedge reserve, limited to the cumulative change in fair value of the hedged item from inception of the hedge. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss. The cumulative amount recognised in other comprehensive income and accumulated in equity is reclassified into the consolidated income statement out of other comprehensive income in the same period when the hedged item is recognised in profit or loss. The hedge has remained effective for the full financial year. Since 21 December 2023, upon exchange of the transaction to sell 40% of ANNUAL REPORT AND ACCOUNTS 2023 127 FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements (continued) the Group’s Healthcare business, it is now the Group’s intention to fully repay the loan upon completion of the investment agreement with Inflexion. Given the hedged items (future interest repayments) are no longer probable or expected to occur, hedge accounting has been discontinued. The cumulative loss balance held in the cash flow hedge reserve of £2.8m was transferred to the income statement at the end of the year (2022: £3.9m loss recognised through the statement of other comprehensive income). In accordance with the requirements of IFRS 7, certain additional information about hedge accounting is disaggregated by risk type and hedge designation type in the table below: 31 December 2023 31 December 2022 Cash Flow Hedge Reserve – Interest Rate Risk £m £m Cash Flow Hedge Reserve balance brought forward (3.9) – Change in fair value of hedging instrument upon loan repayment – reclassification from OCI to profit or loss 0.4 – Change in fair value of hedging instrument recognised in OCI 0.7 (3.9) Change in fair value of hedging instrument – reversal of cumulative reserve held in OCI upon discontinuation of hedge accounting 2.8 – Cash Flow Hedge Reserve balance carried forward – (3.9) The maturity dates of the interest rate swap are as follows: Interest Rate Swap £m Within one year (0.6) Between one and two years (2.2) Between two and three years – Between three and four years – Between four and five years – Beyond five years – (2.8) Forward foreign currency contracts are not designated as hedges, therefore changes in fair value are recognised in the income statement. The movement in relation to forward foreign currency contracts in the year was a £0.8m credit to the income statement (2022: debit of £0.6m). Forward foreign currency contracts have been entered into, which has committed the amount of currency below to be paid in exchange for Sterling: Euro US Dollar €m $m Expiring in the year ending: 31 December 2024 7.1 37.7 Forward exchange contracts have been entered into, which has committed the amount of currency below to be paid in exchange for Indian Rupees: US Dollar $m Expiring in the year ending: 31 December 2024 15.3 At the point at which all of the Conditions Precedent of the investment agreement with Inflexion have been fulfilled, the Group or Inflexion can exercise an Option to sell (Put Option)/buy (Call Option) the 40% shareholding in the Group’s Healthcare division, following which the transaction will complete. 128 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements The Put and Call Options meet the definition of a derivative as per ‘IFRS 9 – Financial Instruments’, the Option representing a financial derivative which gives the Group and Inflexion the right to sell/buy the 40% shareholding at a specified price within a certain time period. In accordance with IFRS 9, the Put and Call Option is measured at fair value and any movement in fair value will be recognised in the Income Statement. In determining the fair value, Management have noted that there were only 4 working days after the date the Share Option Agreement was signed on 21 December 2023 and the year end date of 31 December 2023. Management have considered whether in those 4 days there were any indicators in either economic conditions or business performance which would suggest a material movement in the fair value. Management have concluded that there were no changes in either the external economy or internal business performance between 21 December and 31 December 2023 which would indicate that the transaction price does not represent current market price and hence Management have assigned a £nil fair value to the Put and Call Option. 17. Trade and other receivables 31 December 2023 31 December 2022 £m £m Trade receivables 54.8 54.4 Prepayments 11.0 5.3 Other receivables 0.8 1.2 Accrued income 2.6 1.8 69.2 62.7 Included within prepayments are £2.9m of legal and professional fees relating to the investment agreement with Inflexion. The fees represent incremental costs that are related directly to a probable future equity transaction. The costs will be transferred to equity when the equity transaction is recognised (creation of the non-controlling interest in accordance with IFRS 10), or in the event that the transaction is no longer expected to complete, the costs will be recognised in the Income Statement at that point. The contractual value of trade receivables is £59.1m (2022: £57.9m). Their carrying value is assessed to be £54.8m (2022: £54.4m) after assessing recoverability. The contractual value and the carrying value of other receivables are considered to be the same. The opening trade receivables balance as at 1 January 2022 was £42.3m. The ageing analysis of net trade receivables is as follows: 31 December 2023 31 December 2022 £m £m Not overdue 28.6 25.5 Overdue by up to one month 14.3 15.7 More than one month but not more than three months overdue 8.2 9.5 More than three months but not more than one year overdue 3.7 3.7 54.8 54.4 The ageing analysis of trade receivables which have been impaired is as follows: 31 December 2023 31 December 2022 £m £m Not overdue – – Overdue by up to one month – 0.1 More than one month but not more than three months overdue 0.4 0.6 More than three months overdue 3.9 2.8 4.3 3.5 ANNUAL REPORT AND ACCOUNTS 2023 129 FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements (continued) The impaired receivables of £4.3m (2022: £3.5m) comprises an expected credit loss provision of £4.3m (2022: £3.4m) and credit note provision of £nil (2022: £0.1m). The contractual amounts of the Group’s trade receivables are denominated in the following currencies: 31 December 2023 31 December 2022 £m £m Pounds Sterling 21.8 21.5 US Dollar 30.0 30.4 Euro 4.6 4.0 Australian Dollar 0.5 0.3 Other 2.2 1.7 59.1 57.9 Movement on the Group’s loss allowances for trade receivables are as follows: 31 December 2023 31 December 2022 £m £m Opening expected credit loss allowance 3.4 3.7 Increase in loss allowance 2.3 0.7 Expected credit loss allowance acquired in business combinations – 0.2 Receivables written off during the year as uncollectable (1.4) (1.2) Closing expected credit loss allowance 4.3 3.4 31 December 2023 31 December 2022 £m £m Opening credit note provision 0.1 0.8 Increase in credit note provision recognised in revenue – 0.4 Credit notes raised during the year (0.1) (1.1) Closing credit note provision – 0.1 The Group recognises lifetime expected credit losses (within the ECL provision) which are estimated using a provision matrix based on the Group’s historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date. The other classes within trade and other receivables do not contain impaired assets. In calculating the ECL provision, an estimate was made by Management to apply an appropriate uplift to the ECL rate to take into account forecast market conditions. The ECL rate calculated overall was 1.88% (2022: 2.63%). If the ECL rate was increased to 5%, this would have had an impact on the ECL provision of £1.1m (2022: £0.7m). Details of the provision matrix are presented below: 31 December 2023 Days 0-30 31-60 61-90 91-120 121-150 151-365 365+ Total Net exposure (£m) 9.5 2.2 1.4 1.0 1.5 3.3 0.8 19.7 ECL rate 2.5% 3.9% 12.2% 15.4% 36.1% 70.7% 100.0% Provision (£m) 0.2 0.1 0.2 0.2 0.5 2.3 0.8 4.3 130 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements 31 December 2022 Days 0-30 31-60 61-90 91-120 121-150 151-365 365+ Total Net exposure (£m) 8.8 2.9 1.5 1.1 0.9 1.9 0.7 17.8 ECL rate 4.1% 5.2% 9.2% 25.9% 40.5% 67.9% 100.0% Provision (£m) 0.4 0.2 0.1 0.3 0.4 1.3 0.7 3.4 Net exposure presented in the above tables consists of gross debtors, net of unreleased deferred revenue. The maximum exposure to credit risk at 31 December 2023 is the carrying value of each class of receivable mentioned above. The Group does not hold any collateral as security. Before accepting any new customer, the Group uses a credit-scoring system to assess the potential customer’s credit quality. The trade receivables outstanding at year end have acceptable credit scores. The largest customer represented less than 2% of the Group’s consolidated revenue. Further details on credit risk have been disclosed within note 21. 18. Deferred income tax 31 December 2023 31 December 2022 £m £m Balance brought forward (1.8) 2.1 Tax income during the period recognised in profit or loss 5.2 3.0 Tax expense during the period recognised directly in equity (0.9) (2.5) Deferred taxes acquired in business combinations – (4.4) Balance carried forward 2.5 (1.8) The provision for deferred taxation consists of the tax effect of temporary differences in respect of: Accelerated depreciation for tax purposes (1.0) (0.7) Losses available for offsetting against future taxable income 1.6 2.8 Share-based payments 8.2 6.8 Business combinations – revaluations of intangible assets to fair value (11.7) (13.4) Business combinations – revaluations of other assets to fair value – (0.1) Restricted interest carried forward 4.5 1.5 Other temporary differences 0.9 1.3 Balance carried forward 2.5 (1.8) 31 December 2023 31 December 2022 £m £m Deferred tax asset 3.4 2.3 Deferred tax liability (0.9) (4.1) Net position 2.5 (1.8) The Finance Act 2021 increased the UK corporation tax rate from 19% to 25% effective 1 April 2023 for companies with profits in excess of £250,000. The Group’s deferred tax assets and liabilities have therefore been remeasured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled. The effect of this remeasurement during the period has been recognised profit or loss (£0.4m tax income). ANNUAL REPORT AND ACCOUNTS 2023 131 FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements (continued) In considering whether taxable profit will be available in the future as part of the recognition of deferred tax assets, the Group has evaluated the forecast position based upon completion of the investment agreement with Inflexion. Deferred tax assets have not been recognised in respect of £3.5m (2022: £4.6m) of tax losses as they may not be used to offset taxable profits elsewhere in the Group, they have arisen in subsidiaries that have been loss-making for some time, and there are no other tax planning opportunities or other evidence of recoverability in the near future. If the Group were able to recognise all unrecognised deferred tax assets at the UK’s enacted statutory income tax rate of 25%, the profit would increase by £0.9m (2022: £1.1m). The temporary differences associated with investments in the Group’s overseas subsidiaries for which a deferred tax liability has not been recognised in the period presented aggregate to £16.7m (2022: £30.5m). The Group is in a position to control the timing of the reversal of these temporary differences and determined it is probable that they will not reverse in the foreseeable future. There are no income tax consequences attached to the payment of dividends in either 2023 or 2022 by the Group to its shareholders. 19. Trade and other payables 31 December 2023 31 December 2022 £m £m Trade payables 10.8 11.2 Other taxation and social security 2.0 3.1 Accruals 19.6 19.0 32.4 33.3 All amounts are short-term. The carrying values are considered to be a reasonable approximation of fair value. 20. Borrowings 31 December 2023 31 December 2022 £m £m Short-term lease liabilities 4.3 5.4 Current liabilities 4.3 5.4 Long-term lease liabilities 21.4 24.6 Long-term borrowings 263.7 283.6 Non-current liabilities 285.1 308.2 132 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements The changes in the Group’s borrowings can be classified as follows: Short-term Long-term Short-term Long-term lease lease borrowings borrowings liabilities2 liabilities2 Total £m £m £m £m £m As at 1 January 2022 5.0 195.2 4.1 29.3 233.6 Cash flows: – Repayment (2.5) – (5.9) – (8.4) – Proceeds (restated1) – 84.5 – – 84.5 – Loan fees paid (restated1) – (0.7) – – (0.7) Non-cash: – Interest expense – 2.1 – – 2.1 – Lease additions – – 0.6 – 0.6 – Lease liabilities3 – – 1.5 0.4 1.9 – Reclassification (2.5) 2.5 5.1 (5.1) – As at 31 December 2022 – 283.6 5.4 24.6 313.6 Cash flows: – Repayment – (25.0) (5.4) – (30.4) – Proceeds – – – – – – Loan fees paid – – – – – – Settlement of loan – – – – – Non-cash: – Interest expense – 5.1 – – 5.1 – Lease additions – – 1.4 – 1.4 – Lease liabilities3 – – 0.1 (0.4) (0.3) – Reclassification – – 2.8 (2.8) – As at 31 December 2023 – 263.7 4.3 21.4 289.4 1 The comparative year’s cash flows have been restated as explained in the 2022 restatement section of the Accounting Policies on page 112 2 Amounts are net of rental prepayments and accruals 3 Represents lease interest, dilapidations and movement on lease liability accruals and prepayments Term loan and RCF During August 2022, the Group completed a new three-year debt financing facility to give the Group additional funding to support the long-term growth of the business, including M&A. The debt facility comprises a £290.0m term loan and a RCF of £120.0m. The new facilities were arranged to cover a period of three years. There are no fixed periodic capital repayments, with the full balance being due for settlement when the facilities expire in August 2025. The term loan is syndicated between 12 lenders and the RCF is syndicated between 13 lenders. As at 31 December 2022, the Group had fully drawn down the term loan of £290.0m. On 3 April 2023, the Group voluntarily repaid £25.0m of the term loan, resulting in the current term loan drawdown on 31 December 2023 of £265.0m. As at 31 December 2023, the Group was yet to draw down the available RCF facility of £120.0m. During January 2024, £20.0m of the RCF was drawn down to support a share buy-back. In accordance with the provisions of IFRS9 (including offsetting of loan fees paid as part of the refinancing process), the term loan is held on the statement of financial position with a value of £263.7m (31 December 2022: £283.6m). The Group intends to fully repay the loan upon completion of the investment agreement with Inflexion. As a result of the ANNUAL REPORT AND ACCOUNTS 2023 133 FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements (continued) change in anticipated cash flows, the Group recognised a non-cash interest expense of £3.4m in accordance with IFRS 9, which requires that any revisions to the estimate of payments, should be adjusted against the amortised cost of a financial liability by recalculating the present value of the estimated future cash flows, discounted at the financial instrument’s original effective interest rate. Interest is currently charged on the term loan at a rate of 3.0% over the Sterling Overnight Index Average rate (SONIA) and is payable at the end of each calendar quarter. As disclosed within note 16, the Group entered into an interest rate swap during October 2022, with an effective date of 30 September 2022, initially based on a notional amount of £290.0m, which matched against the initial term loan drawdown. The notional amount of the swap was amended to £265.0m on 3 April 2023 (the same date as the voluntary repayment noted above), which aligns to the current term loan draw down. The agreement is to swap, on a calendar quarter basis, SONIA for a fixed rate of 4.9125%. 21. Financial assets and liabilities The Group is exposed to foreign currency, interest rate, liquidity, credit and equity risks. Each of these risks, the associated financial instruments and the management of those risks are detailed below. The Group’s financial instruments are classified under IFRS, at amortised cost, as follows: 31 December 2023 31 December 2022 £m £m Current assets Cash 19.8 34.0 Trade receivables 54.8 54.4 Other receivables 0.8 1.2 Accrued income 2.6 1.8 78.0 91.4 Current liabilities Trade payables (10.8) (11.2) Accruals (19.6) (19.0) (30.4) (30.2) Non-current liabilities Long-term borrowings (263.7) (283.6) (263.7) (283.6) The Group’s financial instruments classified under IFRS, at fair value, are as follows: 31 December 2023 31 December 2022 £m £m Current assets Short-term derivative assets 0.5 0.9 0.5 0.9 Current liabilities Short-term derivative liabilities (0.1) (1.3) (0.1) (1.3) Non-current liabilities Long-term derivative liabilities (2.8) (3.9) (2.8) (3.9) 134 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements Maturity analysis Less than One to Three months One to one month three months to one year five years Total 31 December 2023 £m £m £m £m £m Current assets Cash 19.8 – – – 19.8 Short-term derivative assets – 0.3 0.2 – 0.5 Trade receivables 11.8 27.9 15.1 – 54.8 Other receivables – 0.8 – – 0.8 Accrued income 2.6 – – – 2.6 Current liabilities Short-term derivative liabilities – (0.1) – – (0.1) Trade payables (8.8) (2.0) – – (10.8) Accruals – (19.6) – – (19.6) Non-current liabilities Long-term derivative liabilities – 0.2 (0.8) (2.2) (2.8) Long-term borrowings – – – (294.1) (294.1) 25.4 7.5 14.5 (296.3) (248.9) Less than One to Three months One to one month three months to one year five years Total 31 December 2022 £m £m £m £m £m Current assets Cash 34.0 – – – 34.0 Short-term derivative assets – 0.3 0.6 – 0.9 Trade receivables 25.5 25.2 3.7 – 54.4 Other receivables – 1.2 – – 1.2 Accrued income 1.8 – – – 1.8 Current liabilities Short-term derivative liabilities (0.1) (0.8) (0.4) – (1.3) Trade payables (9.2) (2.0) – – (11.2) Accruals – (19.0) – – (19.0) Non-current liabilities Long-term borrowings – (0.4) (0.4) (3.1) (3.9) Long-term derivative liabilities – (5.5) (17.2) (317.7) (340.4) 52.0 (1.0) (13.7) (320.8) (283.5) The long-term borrowing’s contractual features are detailed in note 20. The debt shown in the table above is inclusive of the projected interest payments in accordance with IFRS7 (interest on short and long-term borrowings of £30.4m (2022: £56.8m)). Reclassifications There have been no reclassifications between financial instrument categories during the years ended 31 December 2023 and 31 December 2022. Fair value of financial instruments Financial instruments are either carried at amortised cost, less any provision for impairment, or fair value. ANNUAL REPORT AND ACCOUNTS 2023 135 FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements (continued) The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique: • • • Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities; Level 2: other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either directly or indirectly; and Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data. As at 31 December 2023, the only financial instruments measured at fair value were derivative financial assets/liabilities (both interest rate swaps and forward foreign currency contracts) and these are classified as Level 2. Type of financial instrument at Level 2 Measurement technique Main assumptions Main inputs used Derivative assets and liabilities Present-value method Determining the present value of financial instruments as the current value of future cash flows, taking into account current market exchange rates and observable forecast GBP SONIA curves Observable market exchange rates and observable forecast GBP SONIA curves There are no amounts of collateral held as security in respect of the derivative financial instruments. Cash, trade receivables, trade accounts payable and borrowings The carrying amounts of cash, trade receivables and trade payables are approximately equivalent to their fair value because of the short term to maturity. In the case of borrowings, the floating rate of interest (SONIA plus margin) allows the carrying value to approximate to fair value. Market risk The Group is exposed to market risk primarily from changes in foreign currency exchange rates and interest rates. Currency risk The Group’s primary objective in managing foreign currency risk is to protect against the risk that the eventual Sterling net cash flows will be adversely affected by changes in foreign currency exchange rates. Due to the Group’s operations in India, the Group has entered into foreign exchange contracts that limit the risk from movements in US Dollars with the Indian Rupee exchange rate. The Group additionally enters into foreign exchange contracts that limit the risk from movements in US Dollars and Euros with Pounds Sterling. The Group’s exposure to foreign currencies arising from financial instruments is: US Dollar Euro Other Total 31 December 2023 £m £m £m £m Exposures Cash 7.2 1.2 6.1 14.5 Short- and long-term derivative assets/(liabilities) 0.4 – – 0.4 Trade receivables 30.0 4.6 2.7 37.3 Trade accounts payable (1.0) – (0.2) (1.2) Net exposure 36.6 5.8 8.6 51.0 136 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements US Dollar Euro Other Total 31 December 2022 £m £m £m £m Exposures Cash 7.8 1.5 6.6 15.9 Short- and long-term derivative assets/(liabilities) (0.2) (0.2) – (0.4) Trade receivables 30.4 4.0 2.0 36.4 Trade accounts payable (1.6) – (0.2) (1.8) Net exposure 36.4 5.3 8.4 50.1 Forecast sales and purchases in foreign currencies have not been included in the table above as they are not financial instruments. As at 31 December, a movement of 10% in Sterling (reflecting a significant but reasonably plausible scenario) would impact the income statement as detailed in the table below: 10% decrease 10% increase 2023 2022 2023 2022 £m £m £m £m Impact on profit before income tax: US Dollar 4.1 4.1 (3.3) (3.3) Euro 0.6 0.6 (0.5) (0.5) 4.7 4.7 (3.8) (3.8) This analysis assumes a movement in Sterling across all currencies and only includes the effect of foreign exchange movements on financial instruments. All other variables remain constant. Interest rate risk The Group is exposed to interest rate risk on its overdraft and the outstanding syndicated loans. The Group manages the risk of increases to the floating element of interest charged on its term loan (SONIA) through use of an interest rate swap. No other liabilities accrue interest. The table below shows how a movement in interest rates of 100 basis points (reflecting a significant but reasonably plausible scenario) would impact the income statement based on the additional interest expense for the year then ended: 100 basis point decrease 100 basis point increase 2023 2022 2023 2022 £m £m £m £m Impact on: Net earnings before income tax – – – – This analysis assumes all other variables remain constant. The balance of £nil in both years reflects that the Group entered into an interest rate swap on 21 October 2022; full disclosure is presented in note 16. If the Group had not entered into the swap and was still exposed to interest rate risk an increase in interest rates of 100 basis points would give rise to an additional interest expense of £2.6m (2022: £2.8m), likewise a reduction in interest rates of 100 basis points would reduce interest expense by £2.6m (2022: £2.8m) for the year ended 31 December 2023. ANNUAL REPORT AND ACCOUNTS 2023 137 FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements (continued) Liquidity risk Liquidity risk represents the Group’s ability to meet its contractual obligations. The Group evaluates its liquidity requirements on an ongoing basis. In general, the Group generates sufficient cash flows from its operating activities to meet its financial liabilities. The Group’s main source of financing for its working capital requirements is free cash flow. The Group’s exposure to liquidity risk arises from trade accounts payable and syndicated loans. All contractual cash flows from trade accounts payable are the same as the carrying value of the liability due to their short-term nature. At 31 December 2023, the Group had a term loan of £265.0m and an available but undrawn RCF of £120.0m. During January 2024, £20.0m of the RCF was drawn down to support a share buy-back. See note 20 for further details. Credit risk In the normal course of its business, the Group is exposed to credit risk from cash and trade and other receivables. Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. Trade receivables consist of a large number of customers, spread across diverse industries and geographic markets, and the Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Group has adopted an approach of assessing factors such as counterparty size, location and payment history as a means of mitigating the risk of financial loss from defaults. The Group defines default as the debt being deemed completely unrecoverable. A total of £78.0m of the Group’s assets are subject to credit risk (31 December 2022: £91.4m). The Group does not hold any collateral over these amounts. See note 17 for further details of the Group’s receivables. The Group recognises lifetime expected credit losses (within the ECL provision) which are estimated using a provision matrix based on the Group’s historical credit loss experience, as shown below, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date. The other classes within trade and other receivables do not contain impaired assets. The write-off history, including 2023, is shown as below: 2023 2022 2021 2020 2019 2018 2017 Revenue (£m) 273.1 243.2 189.3 178.4 178.2 157.6 118.6 Provision added for bad debt (£m) 2.3 1.1 1.4 1.7 2.9 2.4 0.8 % of revenue 0.8% 0.5% 0.7% 1.0% 1.6% 1.5% 0.7% In calculating the ECL provision, an estimate was made by management to apply an appropriate uplift to the ECL rate to take into account forecast market conditions. The Group considers the current level of its allowance for doubtful debts to be adequate to cover expected credit losses on trade receivables. Bad debt expenses are reported in the income statement. Equity risk It is the Group’s policy to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain the development of the business. See note 24 for further details of the Group’s equity. The impact of the sensitivity analysis noted in the various risk categories above would impact the income statement for the year. 138 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements 22. Cash flow from movement in working capital The following table reconciles the movement in statement of financial position balances to the movement presented in the consolidated statement of cash flows for receivables and payables. Trade and other Trade and other payables (note 19), receivables including deferred (note 17) revenue 2023 £m £m At 31 December 2023 69.2 (137.0) At 31 December 2022 62.7 (137.3) Consolidated Statement of Financial Position movement (6.5) (0.3) Contingent consideration paid – 0.2 Lease accounting related adjustments – (0.6) Tax related adjustments – (0.4) Movement as shown in Consolidated Statement of Cash Flows (6.5) (1.1) Trade and other Trade and other payables (note 19), receivables including deferred (note 17) revenue 2022 £m £m At 31 December 2022 62.7 (137.3) At 31 December 2021 51.2 (114.3) Consolidated Statement of Financial Position movement (11.5) 23.0 MBI acquisition 2.7 (3.5) TS Lombard acquisition 0.7 (2.3) Related party loan repayment (note 28) (0.9) – Tax related adjustments (0.2) – Movement as shown in Consolidated Statement of Cash Flows (9.2) 17.2 23. Provisions The movement in the provisions is as follows: Dilapidations Right-of-use Dilapidations assets Other Total £m £m £m At 1 January 2022 0.5 0.3 0.8 Increase in provision 0.1 0.7 0.8 Release of unutilised provision (0.1) (0.1) (0.2) At 31 December 2022 0.5 0.9 1.4 Increase in provision 0.1 – 0.1 At 31 December 2023 0.6 0.9 1.5 Current: 0.1 – 0.1 Non-current: 0.5 0.9 1.4 ANNUAL REPORT AND ACCOUNTS 2023 139 FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements (continued) Dilapidations Provision has been made for the net present value of future dilapidations that are owed due to legal or constructive obligations under the Group’s leases of office premises. The provision is expected to be utilised over the period to the end of each specific lease, over a period of less than one year to 10 years. Due to the nature of the obligations, there is a good degree of certainty over the amount and timing of the expected cash flows. There is no expectation of reimbursement in relation to these obligations. 24. Equity Share capital Authorised, allotted, called up and fully paid: 31 December 2023 31 December 2022 Percentage Percentage of Total of Total No’000s1 Shares £000s No’000s Shares £000s Restated1 Ordinary shares (£0.0001) 845,028 99.99 84 845,028 99.99 84 Deferred shares of £1.00 each 100 0.01 100 100 0.01 100 Total authorised, allotted, called up and fully paid 845,128 100.00 184 845,128 100.00 184 1 Reflects post-reorganisation position as detailed below. Pursuant to a capital reorganisation exercise undertaken on 25 July 2023, the Company issued nine ordinary shares to increase the number of ordinary shares in issue to 118,303,878 (nominal value £0.000714 per share). All existing ordinary shares were then consolidated, based on 1 consolidated share for every 14 existing ordinary shares, and subdivided, based on 100 new ordinary shares for every 1 consolidated share. Post-reorganisation, there were 845,027,700 ordinary shares in issue (nominal value £0.0001 per share) which were admitted to AIM and commenced dealing on 26 July 2023. The prior year comparatives have been restated to reflect the impact of the share-split on basic and diluted earnings per share in accordance with IAS 33: Earnings Per Share. Share Purchases During the year the Group’s Employee Benefit Trust purchased an aggregate amount of 7,862,788 shares (representing 0.9% of the total share capital), each with a nominal value of 1/100th pence, at a total market value of £11.9m. The purchased shares will be held for the purpose of satisfying the exercise of share options under the Company’s Employee Share Option Plan. During the year, a total of 9,784,472 shares (representing 1.2% of the total share capital), each with a nominal value of 1/100th pence, which were held by the Group’s Employee Benefit Trust were utilised as a result of the vesting of the final tranche of Scheme 1 share options (at a total market value of £17.3m), as disclosed in note 25. The maximum number of shares (each with a nominal value of 1/100th pence) held by the Employee Benefit Trust (at any time during the year ended 31 December 2023) was 39,921,579 (representing 4.7% of the total share capital). The purchase of shares by the trust is to limit the eventual dilution to existing shareholders. As at 31 December 2023, no dilution is forecast until 2027. Vesting Schedule 2024 No. 2025 No. 2026 No. 2027 No. Total No. Scheme 1* 2,230,806 2,230,805 – – 4,461,611 Scheme 2 6,624,997 6,624,997 6,624,997 6,624,997 26,499,988 Scheme 4 – 1,964,276 3,928,552 13,749,935 19,642,763 Total 8,855,803 10,820,078 10,553,549 20,374,932 50,604,362 Shares held in trust (8,855,803) (10,820,078) (10,553,549) (7,656,129) (37,885,559) Net dilution – – – 12,718,803 12,718,803 *The remaining share options in Scheme 1 can be exercised anytime until August 2033 and therefore for the purposes of this analysis we have assumed they will be exercised within the next two years. 140 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements Capital management The Group’s capital management objectives are: • • To ensure the Group’s ability to continue as a going concern; and To fund future growth and provide an adequate return to shareholders and, when appropriate, distribute dividends. The capital structure of the Group consists of net bank debt, which includes borrowings (note 20) and cash and cash equivalents, and equity. The Company has two classes of shares. The ordinary shares carry no right to fixed income and each share carries the right to one vote at general meetings of the Company. The deferred shares do not confer upon the holders the right to receive any dividend, distribution or other participation in the profits of the Company. The deferred shares do not entitle the holders to receive notice of or to attend and speak or vote at any general meeting of the Company. On distribution of assets on liquidation or otherwise, the surplus assets of the Company remaining after payments of its liabilities shall be applied first in repaying to holders of the deferred shares the nominal amounts and any premiums paid up or credited as paid up on such shares, and second the balance of such assets shall belong to and be distributed among the holders of the ordinary shares in proportion to the nominal amounts paid up on the ordinary shares held by them respectively. There are no specific restrictions on the size of a holding nor on the transfer of shares, which are both governed by the general provisions of the Articles of Association and prevailing legislation. The Directors are not aware of any agreements between holders of the Company’s shares that may result in restrictions on the transfer of securities or on voting rights. No person has any special rights of control over the Company’s share capital and all its issued shares are fully paid. With regard to the appointment and replacement of Directors, the Company is governed by its Articles of Association, the Companies Act and related legislation. The Articles themselves may be amended by special resolution of the shareholders. The powers of Directors are described in the Board Terms of Reference, copies of which are available on request. Dividends The final dividend for 2022 was 2.6 pence per share (restated) and was paid in April 2023. The total dividend for the current year is 4.6 pence per share, with an interim dividend of 1.4 pence per share paid on 6 October 2023 to shareholders on the register at the close of business on 8 September 2023, and a final dividend of 3.2 pence per share will be paid on 26 April 2024 to shareholders on the register at the close of business on 22 March 2024. The ex-dividend date will be on 21 March 2024. Treasury reserve The treasury reserve represents the cost of shares held in the Group’s Employee Benefit Trust for the purpose of satisfying the exercise of share options under the Company’s Employee Share Option Plan. Cash flow hedge reserve The cash flow hedge reserve contains the fair valuation movements arising from revaluation of interest rate swaps. Changes in fair value of derivative financial instruments that are designated, and effective, cash flow hedges of forecast transactions are recognised in other comprehensive income and accumulated under the heading of cash flow hedge reserve, limited to the cumulative change in fair value of the hedged item from inception of the hedge. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss. The cumulative amount recognised in other comprehensive income and accumulated in equity is reclassified into the consolidated income statement out of other comprehensive income in the same period when the hedged item is recognised in profit or loss. The disclosures above are for both the Group and the Company. Other reserve Other reserve consists of a reserve created upon the reverse acquisition of TMN Group Plc in 2009. Foreign currency translation reserve The foreign currency translation reserve contains the translation differences that arise upon translating the results of subsidiaries with a functional currency other than Sterling. Such exchange differences are recognised in the income statement in the period in which a foreign operation is disposed of. ANNUAL REPORT AND ACCOUNTS 2023 141 FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements (continued) 25. Share-based payments Scheme 1 – fully vested and closed to new participants The Group created a share option scheme during the year ended 31 December 2010 and granted the first options under the scheme on 1 January 2011 to certain senior employees. Each option granted converts to one ordinary share on exercise. A participant may exercise their options subject to employment conditions and Adjusted EBITDA targets being met. For these options to be exercised the Group’s earnings before interest, taxation, depreciation and amortisation, as adjusted by the Remuneration Committee for significant or one-off occurrences, must exceed certain targets. The fair values of options granted were determined using the Black-Scholes model. The inputs used in the model were: • • • • • share price at date of grant; exercise price; time to maturity; annual risk-free interest rate; and annualised volatility. Each of the awards were subject to vesting criteria set by the Remuneration Committee. As disclosed in the 2021 Annual Report and Accounts, the final vesting target of £52m Adjusted EBITDA (excluding the impact of IFRS16) was met in the financial year ending 31 December 2021 and therefore the final tranche of Scheme 1 options vested during 2022. Scheme 1 is now therefore closed. The total charge recognised for the scheme during the 12 months to 31 December 2023 was £nil (2022: £nil). The Remuneration Committee approved the vesting of the final tranche of Scheme 1 on 11 August 2022. The awards of the scheme were settled with ordinary shares of the Company. Whilst the majority of participants chose to exercise their options during the year ended 31 December 2022, holders of the remaining 14.3m options (post share reorganisation) chose to defer their exercise, as allowable under the scheme rules. During the year ended 31 December 2023, 9.8m of these options were exercised, resulting in 4.5m deferred options as at 31 December 2023. As a result of these options vesting during the year, £17.3m was transferred from the Group’s treasury reserve to retained earnings of which £17.3m is distributable. The weighted average price of the exercised options at the date of exercise was £1.77 per share. Reconciliation of movement in the number of options is provided below. No new grants were awarded during 2023. Pre Capital Reorganisation Values Post Capital Reorganisation Values Option Option exercise Remaining exercise Remaining price life Number of price life Number of (pence) (years) options (pence) (years) options 31 December 2022 1/14th 0.0 1,994,453 1/100th 0.0 14,246,083 Exercised 1/14th N/A (1,369,828) 1/100th N/A (9,784,472) 31 December 2023 1/14th 0.0 624,625 1/100th 0.0 4,461,611 The options carried forward as at 31 December 2023 are both outstanding and exercisable. The maximum term of the remaining options outstanding is 10 years, ending in August 2033. 142 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements Scheme 2 – 2019 scheme The following assumptions were used in the valuation: Award tranche Award 1 Award 2 Award 3 Award 5 Award 7 Award 8 Grant date 31/10/19 07/05/20 25/05/20 22/09/20 23/03/21 31/01/23 Expected dividend yield 3.06% 3.06% 3.06% 3.06% 3.06% 3.57% Volatility 26.87% 26.87% 26.87% 26.87% 26.87% 28.62% Initial share price (pre capital reorganisation) £12.25 £12.25 £12.25 £12.25 £12.25 £12.55 Initial share price (post capital reorganisation) £1.72 £1.72 £1.72 £1.72 £1.72 £1.76 Group achieves £100m EBITDA by 1 March 2024 25% vest 25% vest 25% vest 25% vest 25% vest 25% vest Fair value (pre capital reorganisation) £11.79 £11.79 £11.79 £11.79 £11.79 £12.07 Fair value (post capital reorganisation) £1.65 £1.65 £1.65 £1.65 £1.65 £1.69 Risk-free interest rate 3.17% 3.17% 3.17% 3.17% 3.17% 3.24% Estimated forfeiture rate 8% 8% 8% 8% 8% 7% Remaining contractual life 0.17 0.17 0.17 0.17 0.17 0.17 Group achieves £110m EBITDA by 1 March 2025 25% vest 25% vest 25% vest 25% vest 25% vest 25% vest Fair value (pre capital reorganisation) £11.43 £11.43 £11.43 £11.43 £11.43 £11.65 Fair value (post capital reorganisation) £1.60 £1.60 £1.60 £1.60 £1.60 £1.63 Risk-free interest rate 3.24% 3.24% 3.24% 3.24% 3.24% 3.32% Estimated forfeiture rate 13% 13% 13% 13% 13% 12% Remaining contractual life 1.17 1.17 1.17 1.17 1.17 1.17 Group achieves £125m EBITDA by 1 March 2026 25% vest 25% vest 25% vest 25% vest 25% vest 25% vest Fair value (pre capital reorganisation) £11.09 £11.09 £11.09 £11.09 £11.09 £11.24 Fair value (post capital reorganisation) £1.55 £1.55 £1.55 £1.55 £1.55 £1.57 Risk-free interest rate 3.20% 3.20% 3.20% 3.20% 3.20% 3.12% Estimated forfeiture rate 19% 19% 19% 19% 19% 18% Remaining contractual life 2.17 2.17 2.17 2.17 2.17 2.17 Group achieves £145m EBITDA by 1 March 2027 25% vest 25% vest 25% vest 25% vest 25% vest 25% vest Fair value (pre capital reorganisation) £10.76 £10.76 £10.76 £10.76 £10.76 £10.85 Fair value (post capital reorganisation) £1.51 £1.51 £1.51 £1.51 £1.51 £1.52 Risk-free interest rate 3.24% 3.24% 3.24% 3.24% 3.24% 3.21% Estimated forfeiture rate 24% 24% 24% 24% 24% 23% Remaining contractual life 3.17 3.17 3.17 3.17 3.17 3.17 Awards 4 and 6 have been fully forfeited. For all options noted within the table above, the post capital reorganisation exercise price per option is £0.0001 (equivalent to 1/100th pence) and the expected dividend yield has been assumed to be paid throughout the performance period. The volatility used within the calculations was determined by calculating the Group’s observed historical volatility over a period equal to the time until the end of the assumed maturity date. The estimated forfeiture rate assumption is based upon Management’s expectation of the number of options that will lapse over the vesting period and are reviewed annually. Management believes the current assumptions to be reasonable. ANNUAL REPORT AND ACCOUNTS 2023 143 FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements (continued) The total charge recognised for the scheme during the 12 months to 31 December 2023 was £13.6m (2022: £3.3m). The awards of the scheme will be settled with ordinary shares of the Company. Reconciliation of movement in the number of options in Scheme 2 is provided below. Pre Capital Reorganisation Values Post Capital Reorganisation Values Option Option exercise Remaining exercise Remaining price life Number of price life Number of (pence) (years) options (pence) (years) options 31 December 2022 1/14th 2.8 3,360,000 1/100th 2.8 24,000,000 Granted 1/14th N/A 500,000 1/100th N/A 3,571,427 Forfeited 1/14th N/A (150,000) 1/100th N/A (1,071,429) 31 December 2023 1/14th 1.7 3,710,000 1/100th 1.7 26,499,998 The options carried forward as at 31 December 2023 are both outstanding and exercisable. Scheme 4 – 2021 scheme The following assumptions were used in the valuation: Award tranche Award 1 Award 2 Award 3 Grant date 07/03/22 31/01/23 23/05/23 Expected dividend yield 3.06% 3.57% 3.34% Volatility 26.87% 28.62% 29.40% Initial share price (pre capital reorganisation) £12.25 £12.55 £13.10 Initial share price (post capital reorganisation) £1.72 £1.76 £1.83 Group achieves £110m EBITDA by 1 March 2025 10% vest 10% vest 10% vest Fair value (pre capital reorganisation) £11.43 £11.65 £12.35 Fair value (post capital reorganisation) £1.60 £1.63 £1.73 Risk-free interest rate 3.24% 3.32% 4.10% Estimated forfeiture rate 16% 15% 13% Remaining contractual life 1.17 1.17 1.17 Group achieves £125m EBITDA by 1 March 2026 20% vest 20% vest 20% vest Fair value (pre capital reorganisation) £11.09 £11.24 £11.94 Fair value (post capital reorganisation) £1.55 £1.57 £1.67 Risk-free interest rate 3.20% 3.12% 4.02% Estimated forfeiture rate 22% 21% 19% Remaining contractual life 2.17 2.17 2.17 Group achieves £145m EBITDA by 1 March 2027 70% vest 70% vest 70% vest Fair value (pre capital reorganisation) £10.76 £10.85 £11.55 Fair value (post capital reorganisation) £1.51 £1.52 £1.62 Risk-free interest rate 3.24% 3.21% 3.97% Estimated forfeiture rate 28% 27% 25% Remaining contractual life 3.17 3.17 3.17 144 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements For all options noted within the table above, the post capital reorganisation exercise price per option is £0.0001 (equivalent to 1/100th pence) and the expected dividend yield has been assumed to be paid throughout the performance period. The volatility used within the calculations was determined by calculating the Group’s observed historical volatility over a period equal to the time until the end of the assumed maturity date. The estimated forfeiture rate assumption is based upon management’s expectation of the number of options that will lapse over the vesting period and are reviewed annually. Management believes the current assumptions to be reasonable. The total charge recognised for the scheme during the 12 months to 31 December 2023 was £5.8m (2022: £0.8m). The awards of the scheme will be settled with ordinary shares of the Company. Reconciliation of movement in the number of options in Scheme 4 is provided below. Pre Capital Reorganisation Values Post Capital Reorganisation Values Option Option exercise Remaining exercise Remaining price life Number of price life Number of (pence) (years) options (pence) (years) options 31 December 2022 1/14th 3.9 1,716,000 1/100th 3.9 12,257,143 Granted 1/14th N/A 1,446,000 1/100th N/A 10,328,477 Forfeited 1/14th N/A (412,000) 1/100th N/A (2,942,857) 31 December 2023 1/14th 2.8 2,750,000 1/100th 2.8 19,642,763 The options carried forward as at 31 December 2023 are both outstanding and exercisable. 26. Contingent liabilities and capital commitments The Group has a contingent liability in relation to professional fees incurred which become payable upon completion of the investment agreement. The total potential fee payable amounts to £6.6m. In addition, taxation charges are expected to crystallise within the Group as a result of entering into the investment agreement, based on the steps required to re-organise the Healthcare business into its own corporate perimeter. The ultimate cash tax payable will be based on the specific facts and circumstances, including the relevant value of the Healthcare business attributable to the jurisdictions in which it operates and the relevant tax laws and regulations of each territory, however, the current charge is estimated to total £20.7m. There were no contingent liabilities as at 31 December 2022. There were no capital commitments as at 31 December 2023 or 31 December 2022. 27. Acquisitions The Group did not undertake any acquisitions during the year ended 31 December 2023, however a contingent consideration payment of £0.2m in relation to the MBI acquisition (acquired during the year ended 31 December 2022) was made. 28. Related party transactions Mike Danson, GlobalData’s Chief Executive, owned 59.1% of the Company’s ordinary shares as at 31 December 2023 and 57.8% as at 4 March 2024 and is therefore the Company’s ultimate controlling party. Mike Danson owns a number of other businesses, a small number of which interact with GlobalData Plc. The Board has put in place an additional control framework to ensure related party transactions are well controlled and managed. Related party transactions are overseen by a subcommittee of the Board. The Related Party Transactions Committee, consisting of 4 Non-Executive Directors and chaired by Murray Legg meets to: • • • Oversee all related party transactions; Ensure transactions are in the best interests of GlobalData and its wider stakeholders; and Ensure all transactions are recorded and disclosed on an arm’s length basis. ANNUAL REPORT AND ACCOUNTS 2023 145 FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements (continued) As previously noted, it is the intention of the Board and Management to reduce and eventually eliminate related party transactions and wind down the service agreements that are currently in place. During 2023 we have continued the progress made in 2021 and 2022 and now expect to have eliminated all legacy relationships with related parties by 31 December 2024. During the year, the following related party transactions were entered into by the Group: Accommodation GlobalData Plc sub-let office space to other companies owned by Mike Danson, but this materially ceased in 2021 with the exception of one property (the related party tenant exited as at 31 December 2022 and therefore no related party property transactions happened in 2023). The total sub-lease income for the year ended 31 December 2023 was £nil (2022: £0.1m). During the year ended 31 December 2023, the Group utilised a private yacht (owned by Mike Danson) to host a commercial event. The Group paid disbursements for food, drinks and staff wages whilst hosting the event, which amounted to £34,000 (2022: £nil). Corporate support services In 2023 net corporate support charges of £0.1m were charged from NS Media Group Limited (“NSMGL”) and net corporate support charges of £0.1m were charged to Estel Property Investments No.3 Limited, both companies are related parties by virtue of common ownership (2022: £0.6m charge from NSMGL). The corporate support charges in 2023 consist of a share of the India management team cost which have been recharged on a consistent basis to other corporate support charges in previous years and are determined by headcount. Additionally included in the charges are shared software development and recharged salary costs. In 2022 the corporate support charges principally consisted of shared IT support and software development, the contract for which ended during 2022. Loan to Progressive Trade Media Limited The previous outstanding loan was fully repaid on 31 January 2022 and generated interest income in 2023 of £nil (2022: £5,000). Interest was charged throughout the term of the loan at a rate of 2.25% above LIBOR. The loan was specifically entered into in relation to the divestment of non-core print and advertising businesses in 2016 and no further loan relationships are expected. Revenue contract containing IP sharing clause The Group entered into a five-year data services agreement with NSMGL in June 2020. The agreed suite of data services provided to NSMGL was contracted on terms equivalent to those that prevail in arm’s length transactions. The Group mutually agreed with NSMGL to terminate this agreement on 1 July 2022 in order to reduce the amount of related party transactions as well as a different strategic direction in NSMGL. The total revenue generated from this contract during 2023 was £nil (2022: £0.4m) and the net contribution generated was £nil (2022: £0.2m). The cancellation was in accordance with the contracted terms. NSMGL also acted as a sales distributor for some GlobalData products. On these transactions they charged agent fees of £0.2m (2022: £0.2m). Charity donations During the year the Group paid donations of £0.04m (2022: £0.1m) to charities in India which were funded by a related party entity, The Danson Foundation (charity reference 1121928). This was a pass-through transaction, with the Group facilitating payment to charities in India. Balances outstanding As at 31 December 2023, the total balance receivable from NSMGL was £nil. There is no specific credit loss provision in place in relation to this receivable and the total expense recognised during the period in respect of bad or doubtful debts was £nil. The Group has taken advantage of the exemptions contained within IAS24: Related Party Disclosures from the requirement to disclose transactions between Group companies as these have been eliminated on consolidation. The amounts outstanding for other related parties were £nil (2022: £nil). There were no other balances owing to or from related parties. Directors and Key Management Personnel The remuneration of Directors is disclosed within the Directors’ Remuneration Report on pages 81 to 82. 146 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements Subsidiary undertakings The Group has a large number of subsidiaries due to the M&A activities in recent years. The Group is continuing to go through a corporate simplification process to reduce the number of its subsidiaries and focus operations through its main subsidiaries in its main territories. The Group owns 100% of the ordinary shares of all subsidiary undertakings listed below with the exception of LMC Automotive (Thailand) Company Limited, which is 49% owned. This entity is being fully consolidated into the Group on the basis that the Group holds majority voting rights for the entity and has exposure to variable returns, therefore Management has assessed that the Group has control over the entity. The listing below shows the subsidiary undertakings as at 31 December 2023: Subsidiary undertaking Principal activity Country of registration Registered address GlobalData Australia Pty Limited Data and analytics Australia c/o Brown Hamilton Partners, Unit 1, 31-39 Norcal Road, Nunawading, Victoria 3131, Australia GlobalData Brasil, serviços e nformações empresariais Ltda.* Data and analytics Brazil Rua Tuiuti, 436 Conj 31 - Tatuapé, São Paulo - SP, 03081-003, Brazil Adfinitum Networks Inc* Data and analytics Canada GlobalData Canada Inc* Data and analytics Canada 77 King Street West, Suite 400, Toronto, Ontario, M5K 0A1, Canada GlobalData Trading (Shanghai) Co Limited* Data and analytics China Langbo Economic Research and Consulting (Shenzen) Co Ltd* Data and analytics China LMC Automotive Consulting (Shanghai) Co. Ltd* Data and analytics China Lombard Street Research (Asia) Limited* Data and analytics China TS Lombard (Asia) Limited* Non-trading Room 368, Area 302, No.211, North Fute Road, Pilot Free Trade Zone, Shanghai, China Unit 35, 13/f Gem Tower, 1306A, Xizhilang Building, No.2022, Community Center Road, Yuehai St, Nanshan District, Shenzhen, China Suite 1016J, 10th Floor, Building 1, No. 1728-1746 West Nanjing Road, Jing’an District, Shanghai, China Unit 4, 16/F, Bonham Trade Centre, 50 Bonham Strand, Sheung Wan, Hong Kong ANNUAL REPORT AND ACCOUNTS 2023 147 FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements (continued) Country of registration Registered address Subsidiary undertaking ALF Insight Limited* Canadean Limited GD123 Limited GD345 Limited GlobalData Holding Limited Principal activity Data and analytics Data and analytics Data and analytics Holding company Holding company GlobalData Investments Limited* Non-trading GlobalData UK Limited* Data and analytics GlobalData EBT Trustees Limited* Non-trading Internet Business Group Limited LMC Automotive Limited* LMC International Limited* Performance advertising Data and analytics Data and analytics Lombard Street Research Limited* Data and analytics Lombard Street Research Financial Services Limited* Data and analytics England & Wales John Carpenter House, John Carpenter Street, London, EC4Y 0AN, United Kingdom Media Business Insight Limited* Data and analytics Media Business Insight Holdings Limited* Holding company Progressive Content Limited* Data and analytics Progressive Digital Media (Holdings) Limited Holding company Progressive Digital Media Limited Data and analytics Research Views Limited* Holding company Trusted Sources Limited* Non-trading Trusted Sources UK Limited* Data and analytics TSL Research Group Limited* Holding company World Market Intelligence Limited* Data and analytics GlobalData France SAS* Data and analytics France GD Research Centre Private Limited* Data and analytics India GlobalData Japan KK* Data and analytics Japan 148 133 bis Rue de l’Universite, 75007, Paris, France 3rd Floor, Jyothi Pinnacle Building, SY No.11, Kondapur Village, Serilingampally Mandal, Ranga Reddy Dist, Hyderabad, Telangana- 500081, India Tokyo Club Building 11F, 3-2-6 Kasumigaseki, Chiyoda-ku, Tokyo, Japan Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements Subsidiary undertaking Principal activity Country of registration Registered address Canadean Mexico Y Centro America, F. De R.L. De C.V* Data and analytics Mexico GlobalData Poland sp. z o.o* Data and analytics Poland GlobalData Pte Limited* Data and analytics Singapore Progressive Media Korea Limited* Data and analytics South Korea LMC Automotive (Thailand) Company Limited* Data and analytics Thailand MEED Media FZ LLC* Data and analytics United Arab Emirates Global Data Publications, Inc Data and analytics United States of America LMC Automotive US Inc* Data and analytics United States of America Lombard Street Research (US), Inc Data and analytics United States of America Media Business Insight, Inc* Data and analytics United States of America *indirectly held Avenida Ejército Nacional 769 Piso 2. Colonia Granada. Alcaldía Miguel Hidalgo. CP 11520. Ciudad de México. ul. Grzybowska 2/29, 00-131, Warsaw, Poland The Executive Centre Singapore, Capital Square, Level 7 Capital Square, 23 Church Street, Singapore 049481 37th Floor, ASEM Tower, 517 Yeongdong-daero, Gangnam Gu, Seoul, Republic of Korea 06164 66 Q. House Asoke Building, Room no.1106, 11th floor, Sukhumvit 21 Road, Klongtoeynua, Watthana, Bangkok 10110, Thailand GBS Building, 6th Floor, Dubai Media City, Dubai, United Arab Emirates 441 Lexington Avenue, 2nd Floor, New York, NY, 10017, United States of America 2285 South Michigan Road, Eaton Rapids, Michigan 48827, United States of America 15 E. North St. Dover, Delaware 19901, United States of America 6671, Sunset Blvd, Suite 1525, Los Angeles, CA 90028, United States of America ANNUAL REPORT AND ACCOUNTS 2023 149 FINANCIAL STATEMENTS Company Statement of Financial Position 31 December 2023 31 December 2022 Notes £m £m Non-current assets Property, plant and equipment 5 20.6 23.4 Intangible assets 4 3.3 2.0 Investments 7 225.1 205.7 Deferred tax assets 12 4.1 1.5 Trade and other receivables 8 190.2 210.4 443.3 443.0 Current assets Trade and other receivables 8 3.4 33.8 Corporation tax receivable 10.9 9.1 Cash and cash equivalents – 0.3 14.3 43.2 Total assets 457.6 486.2 Current liabilities Trade and other payables 9 (39.1) (38.0) Short-term lease liabilities 6 (2.0) (2.5) (41.1) (40.5) Non-current liabilities Long-term derivative liability 11 (2.8) (3.9) Long-term provisions 10 (1.0) (0.9) Long-term lease liabilities 6 (19.5) (21.2) Long-term borrowings 11 (263.7) (283.6) (287.0) (309.6) Total liabilities (328.1) (350.1) Net assets 129.5 136.1 Equity Share capital 0.2 0.2 Treasury reserve (65.4) (70.8) Cash flow hedge reserve – (3.9) Retained earnings 194.7 210.6 Equity attributable to equity holders 129.5 136.1 These financial statements were approved by the Board of Directors on 4 March 2024 and signed on its behalf by: Murray Legg Mike Danson Chair Chief Executive The accompanying notes form an integral part of these financial statements. Company profit for the year: £14.2m (2022: profit of £51.5m). Company number: 03925319 150 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements FINANCIAL STATEMENTS Company Statement of Changes in Equity Treasury Cash flow Retained Share capital reserve hedge reserve earnings Total equity £m £m £m £m £m Balance at 1 January 2022 0.2 (66.6) – 241.0 174.6 Total comprehensive income – – – 51.5 51.5 Other comprehensive income: Cash flow hedge – effective portion of changes in fair value – – (3.9) – (3.9) Transactions with owners: Dividends – – – (23.6) (23.6) Share buy-back – (66.6) – – (66.6) Vesting of share options – 62.4 – (62.4) – Share-based payments charge – – – 4.1 4.1 Balance at 31 December 2022 0.2 (70.8) (3.9) 210.6 136.1 Total comprehensive income – – – 14.2 14.2 Other comprehensive income: Cash flow hedge – reclassification to profit or loss upon loan repayment – – 0.4 – 0.4 Cash flow hedge – effective portion of changes in fair value – – 0.7 – 0.7 Cash flow hedge – reclassification to profit or loss upon discontinuation of hedge accounting – – 2.8 – 2.8 Transactions with owners: Dividends – – – (32.2) (32.2) Share buy-back – (11.9) – – (11.9) Vesting of share options – 17.3 – (17.3) – Share-based payments charge – – – 19.4 19.4 Balance at 31 December 2023 0.2 (65.4) – 194.7 129.5 The accompanying notes form an integral part of these financial statements. The Company distributable retained earnings as at 31 December 2023 was £52.9m (2022: £82.8m), comprising £194.7m retained earnings and £65.4m treasury reserves which net to £129.3m, of which non-distributable elements are £71.3m share-based payment reserve and £5.1m of non-distributable profits. Note 24 within the Group Accounts provides an explanation of the movements in equity and reserves above for both the Group and the Company. ANNUAL REPORT AND ACCOUNTS 2023 151 FINANCIAL STATEMENTS Notes to the Company Financial Statements 1. General information Nature of operations The principal activity of GlobalData Plc is as a holding company of subsidiary entities which are engaged in providing business information in the form of high-quality proprietary data, analytics, and insights to clients in multiple sectors. GlobalData Plc (‘the Company’) is a company incorporated in the United Kingdom (England & Wales) and listed on the Alternative Investment Market, therefore is publicly owned and limited by shares. The registered office of the Company is John Carpenter House, John Carpenter Street, London, EC4Y 0AN. The registered number of the Company is 03925319. Going concern The Company meets its day-to-day working capital requirements through free cash flow of the Group. Based on cash flow projections the Company considers the existing financing facilities to be adequate to meet short-term commitments. The existing finance facilities were issued with debt covenants, which are measured on a quarterly basis. Management has reviewed forecast cash flows of the Group and there is no indication that there will be any breach in the next 12 months. The Directors have a reasonable expectation that there are no material uncertainties that cast significant doubt about the Company’s ability to continue in operation and meet its liabilities as they fall due for the foreseeable future, being a period of at least 12 months from the date of approval of the financial statements. Accordingly, the Company has prepared the annual report and financial statements on a going concern basis. Critical accounting estimates and judgements The Company makes estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may deviate from these estimates and assumptions. Management has assessed that there are no critical judgements or key estimates in relation to this Company. 2. Accounting policies a) Basis of preparation The parent Company meets the definition of a qualifying entity under FRS 100 ‘Application of Financial Reporting Requirements’ issued by the Financial Reporting Council; accordingly, the Company financial statements have been prepared under FRS 101 ‘Reduced Disclosure Framework’. As permitted by FRS 101, the Company has taken advantage of the disclosure exemptions available under that standard in relation to share-based payment, financial instruments, capital management, presentation of comparative information in respect of certain assets, presentation of a cash flow statement, standards not yet effective, impairment of assets, certain related party transactions, and certain disclosure requirements in respect of leases. As permitted by s408 of the Companies Act 2006, no separate statement of comprehensive income is presented in respect of the parent Company. The profit attributable to the Company is disclosed in the footnote to the Company’s balance sheet. b) Basis of accounting policies This report has been prepared based on the accounting policies detailed in the Group’s financial statements for the year ended 31 December 2023 and the additional policies described below. c) Investments Investments in subsidiaries are stated at cost less any provision for impairment. d) Share-based payments The Company does not directly employ those participating in the share-based payments scheme as they are employed by other Group companies. The issue of share incentives by the Company to employees of its subsidiaries represents additional capital contributions. An addition to the Company’s investment in Group undertakings is reported with a corresponding increase in shareholders’ funds. 152 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements 3. Dividends The final dividend for 2022 was 2.6 pence per share (restated) and was paid in April 2023. The total dividend for the current year is 4.6 pence per share, with an interim dividend of 1.4 pence per share paid on 6 October 2023 to shareholders on the register at the close of business on 8 September 2023, and a final dividend of 3.2 pence per share which will be paid on 26 April 2024 to shareholders on the register at the close of business on 22 March 2024. The ex-dividend date will be 21 March 2024. 4. Intangible assets Assets under Computer construction software Brand Total £m £m £m £m Cost As at 1 January 2023 – 7.6 0.1 7.7 Additions 0.2 2.2 – 2.4 As at 31 December 2023 0.2 9.8 0.1 10.1 Amortisation As at 1 January 2023 – (5.6) (0.1) (5.7) Charge for the year – (1.1) – (1.1) As at 31 December 2023 – (6.7) (0.1) (6.8) Net book value As at 31 December 2023 0.2 3.1 – 3.3 As at 31 December 2022 – 2.0 – 2.0 Assets under construction will be transferred to software post development. 5. Property, plant and equipment Leasehold Computer Buildings improvements equipment Total £m £m £m £m Cost As at 1 January 2023 31.0 1.3 3.2 35.5 Additions – – – – Disposals (0.6) – – (0.6) As at 31 December 2023 30.4 1.3 3.2 34.9 Depreciation As at 1 January 2023 (8.7) (0.5) (2.9) (12.1) Charge for the year (2.2) (0.1) (0.2) (2.5) Disposals 0.3 – – 0.3 As at 31 December 2023 (10.6) (0.6) (3.1) (14.3) Net book value As at 31 December 2023 19.8 0.7 0.1 20.6 As at 31 December 2022 22.3 0.8 0.3 23.4 The buildings category all relates to right-of-use assets. ANNUAL REPORT AND ACCOUNTS 2023 153 FINANCIAL STATEMENTS Notes to the Company Financial Statements (continued) 6. Leases The Company has leases for office buildings and motor vehicles. With the exception of short-term leases and leases of low-value underlying assets, each lease is reflected on the statement of financial position as a right-of-use asset and a lease liability. The Company classifies its right-of-use assets in a consistent manner to its property, plant and equipment (see note 5). Lease liabilities are presented in the statement of financial position as follows: 31 December 2023 31 December 2022 £m £m Current lease liabilities 2.0 2.5 Non-current lease liabilities 19.5 21.2 21.5 23.7 The table below describes the nature of the Company’s leasing activities by type of right-of-use asset recognised on the statement of financial position: Average No. of No. of leases No. of right-of-use Range of remaining leases with with termination assets leased remaining term lease term extension options options Office buildings 6 1-11 years 5 years – 1 The lease liabilities are secured by the related underlying assets. Future minimum lease payments at 31 December 2023 were as follows: As at 31 December 2023 Within one year One to five years After five years Total £m £m £m £m Lease payments 2.8 10.6 12.3 25.7 Finance charges (0.8) (2.3) (1.1) (4.2) Net present values 2.0 8.3 11.2 21.5 As at 31 December 2022 Within one year One to five years After five years Total £m £m £m £m Lease payments 3.2 10.6 14.9 28.7 Finance charges (0.7) (2.7) (1.6) (5.0) Net present values 2.5 7.9 13.3 23.7 At 31 December 2023 the Company had not committed to any leases which had not yet commenced, excluding those recognised as a lease liability. 154 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements The Company sub-lets certain areas of its property portfolio. As at 31 December 2023, the Company had contracts with sub-tenants for the following future minimum lease rentals: 31 December 2023 31 December 2022 £m £m Office buildings Within one year – 0.1 Within one to two years – 0.1 Within two to three years – 0.1 Within three to four years – 0.1 Within four to five years – 0.1 Over five years – – – 0.5 7. Investments Group undertakings £m Cost As at 31 December 2021 214.0 Share-based payments to employees of subsidiaries – Scheme 2 3.3 Share-based payments to employees of subsidiaries – Scheme 4 0.8 As at 31 December 2022 218.1 Share-based payments to employees of subsidiaries – Scheme 2 13.6 Share-based payments to employees of subsidiaries – Scheme 4 5.8 As at 31 December 2023 237.5 Impairment As at 31 December 2022 and 31 December 2023 (12.4) Net book value As at 31 December 2023 225.1 As at 31 December 2022 205.7 Share-based payments to employees of subsidiaries The issue of share incentives by the Company to employees of its subsidiaries represents additional capital contributions. An addition to the Company’s investment in Group undertakings is reported with a corresponding increase in shareholders’ funds. Impairment review Management has performed an impairment review which entails making judgements including the expected rate of growth of sales, margins expected to be achieved and the appropriate discount rate to apply when valuing future cash flows. The cash flow projections for each statutory entity are based on each statutory entity’s 2023 profit before tax, with growth factors applied to cover the period 2024-2028. The discount rate is derived by the cost of equity. The rate reflects appropriate adjustments relating to market risk and risk factors of each entity. A terminal value calculation has been determined post-2028 using a growth rate of 2% in accordance with long-term inflation forecasts. Impairment indicators In addition to the review described above, Management has performed an assessment to identify whether there are any indicators of impairment to the investment balances. As the Company’s net assets exceeded the Group net assets there is an indication of possible impairment; however, sufficient evidence has been obtained to support that there is no impairment as the value in use forecasts have sufficient headroom over the carrying amount of the investments. The assumptions applied within the value in use ANNUAL REPORT AND ACCOUNTS 2023 155 FINANCIAL STATEMENTS Notes to the Company Financial Statements (continued) forecasts (revenue, cost and terminal value growth rates and discount rate) are in line with the assumptions disclosed within the intangible asset impairment review in note 13 of the Group accounts. 8. Trade and other receivables 31 December 2023 31 December 2022 £m £m Non-current Amounts owed by group undertakings 190.2 210.4 190.2 210.4 Current Prepayments 3.1 0.1 Amounts owed by group undertakings – 33.2 Other taxation and social security 0.3 0.5 3.4 33.8 The carrying values are considered to be a reasonable approximation of fair value. The effect of discounting other receivables has been assessed and is deemed to be immaterial to the results. The total ECL provision recognised in relation to these receivables is nil (2022: nil). The Company has reversed impairment provisions totalling £0.8m during the year in relation to balances owed by group undertakings (2022: reversal of impairment provisions of £0.6m). Amounts owed by group undertakings are repayable upon demand and outstanding balances contain transactions including the following: • • • • Loans to group undertakings; Inter-company interest receivable; Recharge of costs; and Cash pooling. None of the transactions with group undertakings incorporate special terms and conditions and no guarantees were given or received. Outstanding balances are usually settled in cash. 9. Trade and other payables 31 December 2023 31 December 2022 £m £m Trade payables 0.3 0.5 Accruals 6.0 3.9 Amounts owed to group undertakings 32.8 33.6 39.1 38.0 The Directors consider that the carrying amount of trade payables approximates to their fair value. The effect of discounting trade and other payables has been assessed and is deemed to be immaterial to the Company’s results. Amounts owed to related parties are repayable on demand and non-interest bearing. 156 Strategic Report / Directors’ Report / Auditor’s Report / Financial Statements 10. Provisions Dilapidations Dilapidations Right-of-use assets Other Total £m £m £m As at 1 January 2023 0.1 0.8 0.9 Increase in provision – 0.1 0.1 As at 31 December 2023 0.1 0.9 1.0 Current: – – – Non-current: 0.1 0.9 1.0 11. Borrowings 31 December 2023 31 December 2022 £m £m Short-term lease liabilities 2.0 2.5 Current liabilities 2.0 2.5 Long-term lease liabilities 19.5 21.2 Long-term borrowings 263.7 283.6 Non-current liabilities 283.2 304.8 Term loan and RCF During August 2022, the Company completed a new three-year debt financing facility to give the Group additional funding to support the long-term growth of the business, including M&A. The debt facility comprises a £290.0m term loan and a RCF of £120.0m. The new facilities were arranged to cover a period of three years. There are no fixed periodic capital repayments, with the full balance being due for settlement when the facilities expire in August 2025. The term loan is syndicated between 12 lenders and the RCF is syndicated between 13 lenders. As at 31 December 2022, the Company had fully drawn down the term loan of £290.0m. On 3 April 2023, the Company voluntarily repaid £25.0m of the term loan, resulting in the current term loan drawdown on 31 December 2023 of £265.0m. As at 31 December 2023, the Company was yet to draw down the available RCF facility of £120.0m. During January 2024, £20.0m of the RCF was drawn down to support a share buy-back. In accordance with the provisions of IFRS9 (including offsetting of loan fees paid as part of the refinancing process), the term loan is held on the statement of financial position with a value of £263.7m (31 December 2022: £283.6m). The Company intends to fully repay the loan upon completion of the investment agreement with Inflexion. As a result of the change in anticipated cash flows, the Company recognised a non-cash interest expense of £3.4m in accordance with IFRS 9, which requires that any revisions to the estimate of payments, should be adjusted against the amortised cost of a financial liability by recalculating the present value of the estimated future cash flows, discounted at the financial instrument’s original effective interest rate. Interest is currently charged on the term loan at a rate of 3.0% over the Sterling Overnight Index Average rate (SONIA) and is payable at the end of each calendar quarter. As disclosed within note 16 to the Group accounts, the Company entered into an interest rate swap during October 2022, with an effective date of 30 September 2022, initially based on a notional amount of £290.0m, which matched against the initial term loan drawdown. The notional amount of the swap was amended to £265.0m on 3 April 2023 (the same date as the voluntary repayment noted above), which aligns to the current term loan draw down. The agreement is to swap, on a calendar quarter basis, SONIA for a fixed rate of 4.9125%. ANNUAL REPORT AND ACCOUNTS 2023 157 FINANCIAL STATEMENTS Notes to the Company Financial Statements (continued) 12. Deferred income tax 31 December 2023 31 December 2022 £m £m Balance brought forward 1.5 – Tax income during the period recognised in profit or loss 2.6 1.5 Balance carried forward 4.1 1.5 The provision for deferred taxation consists of the tax effect of temporary differences in respect of: Accelerated depreciation for tax purposes (0.2) – Restricted interest carried forward 4.5 1.5 Other temporary differences (0.2) – Balance carried forward 4.1 1.5 31 December 2023 31 December 2022 £m £m Deferred tax asset 4.1 1.5 Deferred tax liability – – Net position 4.1 1.5 The Finance Act 2021 increased the UK corporation tax rate from 19% to 25% effective 1 April 2023 for companies with profits in excess of £250,000. The Company’s deferred tax assets and liabilities have therefore been remeasured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled. 13. Related party transactions Directors The remuneration of the Directors of the Group and Company is set out on pages 81 to 82 in the consolidated accounts of the Group within the Directors Remuneration Report. Accommodation GlobalData Plc sub-let office space to other companies owned by Mike Danson, but this materially ceased in 2021 with the exception of one property (the related party tenant exited as at 31 December 2022 and therefore no related party property transactions happened in 2023). The total sub-lease income for the year ended 31 December 2023 was £nil (2022: £0.1m). Corporate support services In 2023 net corporate support charges of £0.01m were charged to Estel Property Investments No.3 Limited, a related party by virtue of common ownership (2022: £0.6m charge from NS Media Group Limited). The corporate support charges in 2023 consist of shared software development and recharged salary costs. In 2022 the corporate support charges principally consisted of shared IT support and software development, the contract for which ended during 2022. 14. Contingent liabilities The Company has a contingent liability in relation to professional fees incurred which become payable upon completion of the investment agreement. The total potential fee payable amounts to £6.6m. There were no contingent liabilities as at 31 December 2022. There were no capital commitments as at 31 December 2023 or 31 December 2022. 158 Bankers NatWest Group 280 Bishopsgate London EC2M 4RB Bankers HSBC UK Bank Plc 1 Centenary Square Birmingham B1 1HQ Registered number Company No. 03925319 Advisers Company Secretary Bob Hooper Head Office and Registered Office John Carpenter House John Carpenter Street London EC4Y 0AN Tel: + 44 (0) 20 7936 6400 Nominated Adviser and Joint Broker J.P. Morgan Cazenove 25 Bank Street Canary Wharf London E14 5JP Joint Broker Panmure Gordon One New Change London EC4M 9AF Joint Broker Numis Securities 45 Gresham Street London EC2V 7BF Financial PR LLP FTI Consulting 200 Aldersgate Aldersgate Street London EC1A 4HD Lawyers Reed Smith 20 Primrose Street London EC2A 2RS Auditor Deloitte LLP 2 New Street Square London EC4A 3BZ Registrars Link Group Central Square 29 Wellington Street Leeds LS1 4DL ANNUAL REPORT AND ACCOUNTS 2023 159 Head Office and Registered Office John Carpenter House John Carpenter Street London EC4Y 0AN Tel: + 44 (0) 20 7936 6400 www.globaldata.com Company No. 03925319 

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