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S4 Capital plc H1 2025 Results H1 2025 Results 15 September 2025
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S4 Capital plc H1 2025 Results 1. Results 2. Market Momentum 3. Client Analysis 4. Artificial Intelligence 5. Summary and Outlook 6. Q&A 7. Appendix Contents S4 Capital plc H1 2025 Results 2
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S4 Capital plc H1 2025 Results 3 Results 1 S4 Capital plc H1 2025 Results
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S4 Capital plc H1 2025 Results 4 Financial headlines S4 Capital plc H1 2025 Results Net revenue1 H1 £328.2m -12.7% reported -10.0% like-for-like2 Operational EBITDA3 H1 £20.8m -30.9% reported -30.4% like-for-like2 Operational EBITDA margin3 6.3% vs. 8.0% prior year reported vs. 8.2% prior year like-for-like2 Adjusted operating profit4 £16.4m vs. £24.8m prior year reported Adjusted EPS4 0.2p vs. 1.2p prior year 1. Net revenue is revenue less direct costs 2. Like-for-like is a non-GAAP measure and relates to 2024 being restated to show the audited numbers for the previous year of the existing and acquired businesses consolidated for the same months as in 2025 applying currency rates as used in 2025 3. Operational EBITDA is operating profit or loss adjusted for acquisition related expenses, non-recurring items (primarily acquisition payments tied to continued employment, amortisation and impairment of business combination intangible assets and restructuring and other one-off expenses) and recurring items (share-based payments) and includes right-of-use assets depreciation. It is a non-GAAP measure management uses to assess the underlying business performance. Operational EBITDA margin is operational EBITDA as a percentage of net revenue 4. Adjusted figures are adjusted for non-recurring and recurring items as defined above 5. Net debt excludes lease liabilities. Net debt leverage is calculated as net debt / pro forma 12 month Operational EBITDA Net debt5 £145.9m at 30th June 2025 2.0x leverage5 vs. £182.9m (2.2x) prior year reported Month-end average net debt H1 2025 £144m (H1 2024: £196m)
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S4 Capital plc H1 2025 Results 5 Profit or loss S4 Capital plc H1 2025 Results ● Net revenue down 10.0% like-for-like and 12.7% reported. This reflects continued caution from clients due to challenging global macroeconomic conditions, tariffs and larger technology clients prioritising investment in AI over marketing expenditure ● Disciplined approach to cost management with personnel and operating costs improvement of 11.2% year on year, insufficient to mitigate the revenue shortfall ● Number of Monks circa 6,900 down 9% on June 2024, 4% on December 2025 ● H2 2025 cost reduction plan being actioned to align personnel costs to revenue ratios of 76% to industry averages of circa 65% ● Operational EBITDA £20.8m, 6.3% margin down 190 bps like-for-like and 170 bps on a reported basis H1 2025 £m H1 2024 £m Change Reported Change Like-for-like Revenue 360.4 422.5 (14.7%) (11.9%) Net revenue 328.2 376.1 (12.7%) (10.0%) Personnel and operating expenses (304.2) (342.7) 11.2% Acquisition, restructuring and other expenses (3.4) (1.7) (100.0%) Depreciation, amortisation and impairment (31.5) (35.5) (11.0%) Share of profit from JV&As - 0.1 (100.0%) Total operating expenses (339.1) (379.8) (10.7%) (7.8%) Operating (loss)/profit (10.9) (3.7) (194.6%) Adjusting items 27.3 28.5 4.2% Adjusted operating profit1 16.4 24.8 (33.9%) (33.6%) Net finance and other costs (14.2) (13.5) (5.2%) Loss before income tax (25.1) (17.2) (45.9%) Income tax credit/(expense) 2.8 3.5 (20.0%) Loss for the period (22.3) (13.7) (62.8%) Adjusted earnings per share (pence) 0.2 1.2 (1.0) Operational EBITDA 20.8 30.1 30.9% (30.4%) Operational EBITDA margin 6.3% 8.0% (170bps) (190bps) Adjusting items H1 20251 £m H1 2024 £m Amortisation and impairment of acquired intangibles 22.8 23.0 Share based payments 2.6 3.8 Acquisition, restructuring and other expenses 1.9 1.7 Total of adjusting items 27.3 28.5
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S4 Capital plc H1 2025 Results 6 Net revenue by practice and geography S4 Capital plc H1 2025 Results ● Marketing Services net revenue down 6.4% like-for like-basis, and 9.4% reported, to £299.0m reflecting the timing of significant new business wins, General Motors, Amazon, T-Mobile and a leading US- based FMCG and ongoing client cautiousness ● Technology Services net revenue down 35.3% like-for-like basis, and 36.7% reported, to £29.2m. This was due to longer sales cycles and expected revenue reduction by a major client, although this will cycle out in the second half of the year Net revenue by geography2 H1 2025 £m H1 2024 £m Change Reported Change Like-for-like Marketing Services1 299.0 330.0 (9.4%) (6.4%) Technology Services 29.2 46.1 (36.7%) (35.3%) Net revenue 328.2 376.1 (12.7%) (10.0%) 1. Comparative information for the prior period has been represented to reflect the Group’s revised segment structure. 2. H1 2024 is on a like-for-like basis.
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S4 Capital plc H1 2025 Results ● Marketing Services’ Operational EBITDA £28.5m, a 9.5% margin down 90 bps like-for-like, despite the significant reduction in the number of Monks and other cost efficiencies ● Technology Services’ Operational EBITDA £2.6m, a 8.9% margin down 460bps like-for-like, due to the loss of one large client the impact of which will cycle out in H2 2025 7 Operational EBITDA by Practice S4 Capital plc H1 2025 Results H1 2025 £m H1 2024 £m Change Reported Change Like-for-like Marketing Services 299.0 330.0 (9.4%) (6.4%) Technology Services 29.2 46.1 (36.7%) (35.3%) Net revenue 328.2 376.1 (12.7%) (10.0%) Marketing Services 28.5 33.9 (15.9%) (14.2%) Technology Services 2.6 5.7 (54.4%) (57.4%) S4 Central (10.3) (9.5) (8.4%) (9.6%) Operational EBITDA 20.8 30.1 (30.9%) (30.4%) Marketing Services 9.5% 10.3% (80bps) (90bps) Technology Services 8.9% 12.4% (350bps) (460bps) Operational EBITDA margin 6.3% 8.0% (170bps) (190bps)
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S4 Capital plc H1 2025 Results 8 Debt and balance sheet S4 Capital plc H1 2025 Results ● H1 2005 closing net debt £145.9m, a £37m improvement from H1 2024 reflecting strong focus on cash management ● Month-end average net debt improved circa 27%, £52m, from £196m to £144m ● Leverage 2.0x, improved from 2.2x at 30 June 2024 ● Cash contingent consideration for prior combinations now materially complete ● Liquid balance sheet with long dated maturities. Term loan termination date August 2028. £100m RCF remains undrawn (maturity August 2026, with facility of £80m extended to February 2028 on the same terms) ● Headroom against key covenant1 1. The facility agreement imposes certain covenants on the Group. S4Capital Group will ensure that the net debt will not exceed 4.5:1 of the pro-forma earnings before interest, tax, depreciation, and amortisation, measured at the end of any relevant period of 12 months ending each semi-annual date in a financial year, as defined in the facility agreement. During the year S4Capital Group complied with the covenants set in the loan agreement. 2. In February 2025, S4Capital’s relationship lenders extended the maturity of the majority of the £100m Revolving Credit Facility by 18 months, from August 2026 to February 2028. Borrowing margins and debt covenants remain unchanged. The facility is now to be bifurcated, with a £100m tranche maturing in August 2026 as before, and £80m maturing in February 2028. Net debt £m Facility Undrawn £m Maturity due date Term loan 321.0 €375.0m 00.0 Aug 2028 RCF2 - £100.0m / £80.0m 100.0 Aug 2026 / Feb 2028 Other loans 0.1 Cash (175.1) Nebt debt 145.9 100.0 Net debt to pro-forma operational EBITDA 2.0x H1 2025 £m Dec 2024 £m Intangible assets 652.1 706.4 Right-of-use assets 30.3 34.7 Property, plant and equipment 13.1 16.4 Others 52.8 59.0 Non-current assets 748.3 816.5 Trade and other receivables 360.7 460.4 Cash and cash equivalents 175.1 168.4 Current assets 535.8 628.8 Total assets 1,284.1 1445.3 Deferred tax liabilities (17.1) (18.6) Loans and borrowings (317.2) (307.2) Others (25.3) (38.0) Non-current liabilities (359.6) (363.8) Trade and other payables (396.8) (482.0) Contingent consideration and holdbacks (8.6) (4.7) Other (17.5) (17.3) Current liabilities (422.9) (504.0) Total liabilities (782.5) (867.8) Net assets 501.6 577.5 Attributable to owners of the Company 501.5 577.4 Non-controlling interests 0.1 0.1 Total equity 501.6 577.5
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S4 Capital plc H1 2025 Results 9 Cash flow S4 Capital plc H1 2025 Results ● Working capital inflow in H1 2025 £19.2m (H1 2024 inflow £4.2m) reflecting improved working capital management ● Capital expenditure of £2.1m related primarily to IT equipment ● Decrease in interest paid reflects lower interest rates on the term loan ● Lower tax paid reflects performance in 2024 ● Restructuring and other one-off expenses includes £6.3m of restructuring payments and £2.6m of transformation costs ● No M&A cash outflows made within H1 2025 ● Other includes foreign exchange movement on the term loan and non-GBP cash balances 1. Includes purchase of intangible assets, property, plant and equipment and security deposits 2. Working capital primarily includes movement on receivables, payables, principal elements of lease payments and depreciation of right-of-use assets 3. Other includes foreign exchange, hyperinflation impacts and share buy-backs H1 2025 £m H1 2024 £m Operational EBITDA 20.8 30.1 Capital expenditure1 (2.1) (4.1) Interest received, interest paid & facility fees (10.9) (14.0) Income tax paid (1.8) (7.5) Restructuring & other one-off expenses paid (9.2) (5.6) Change in working capital2 19.2 4.2 Free cash flow 16.0 3.1 Mergers & Acquisitions – (9.7) Other3 (19.0) 4.5 Movement in net debt (3.0) (2.1) Opening net debt (142.9) (180.8) Net debt (145.9) (182.9) Net debt to proforma operational EBITDA 2.0x 2.2x
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S4 Capital plc H1 2025 Results ● H1 2025 FX on net debt £18.0m, £9.9m on Euro term loan and £8.1m on cash ● Translating opening net debt at closing rate adds £17.5m, taking opening net debt to £160.4m ● Free cash flow of £16.0m in H1 2025 improved closing net debt position to £145.9m 10S4 Capital plc H1 2025 Results Net debt bridge H1 2025 Net debt bridge
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S4 Capital plc H1 2025 Results Net finance expense c.£29m (cash c.£25m) 11 2025 Guidance S4 Capital plc H1 2025 Results Net revenue Full year LFL net revenue expected to be down mid-single digits. Operational LFL EBITDA Targeted to be broadly similar to 20241 Effective tax rate 30–32% expected Net Debt £100–140m expected 1. This is a target, not a profit forecast
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S4 Capital plc H1 2025 Results 12 MarketMomentum 2 S4 Capital plc H1 2025 Results
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S4 Capital plc H1 2025 Results Proprietary & Confidential 13 S4 Our staff cost ratio was almost 80% versus an industry standard of closer to 65%. Challenges with revenue trajectory made it difficult to align costs and revenues. Our M&A model is based on a 50% equity 50% cash deal structure. The depressed share price put M&A activity on hold. After 30+ mergers there was a need to focus on integration. High interest rates and economic uncertainty lead to client caution and longer sales cycles. Less project work, less pitches, less new business opportunities at a local level. In 2025 this caution has persisted with tariffs adding to the uncertainty. Mondelez relationship ended mutually at the end of contract. First American cut work with external partners due to pressure on their business from high interest rates. Significant increases in Capex spend to support AI product development Tech platforms reduced operating expenses leading to cuts in Sales & Marketing. Revenues, margins and share prices all increased. 1 2 3 4 5 Tech Companies prioritise AI Capex “Whopper Clients” under pressure M&A activity paused Macro economic pressure Staff cost ratio Business challenges impacted growth and margins in 2023/4.
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S4 Capital plc H1 2025 Results Proprietary & Confidential 14 S4 Mergers are integrated under the single client-facing brand of Key functions are centralised and tools and software harmonised. Simplified org structure of Marketing and Tech services. Cost action to restore staff cost ratio to industry levels New hires in country/regional management, capabilities and client leadership to drive growth. Operational hires to focus on pricing, billability and utilisation to improve margin. The pipeline is healthy and we have had a better new business track record recently, including becoming the Foundational Agency for GM, which will scale to a top 3 client in 2025. Monks.Flow launched at CES in 2024. Key clients using monks flow, driving new business pipeline and wins. Tech platforms continued to cut sales & marketing spend in 2024 but this is stabilising, particularly at Google, our largest client. Tech giants look to drive ROI from their AI investments. 1 2 3 4 5Tech Company cost cutting - moderating Innovation and investment in AI Talent investmentNew business wins Integration/Cost focus We addressed these challenges to rebuild our foundation for growth
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S4 Capital plc H1 2025 Results 15 Client Analysis 3 S4 Capital plc H1 2025 Results
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S4 Capital plc H1 2025 Results 16 Our client portfolio S4 Capital plc H1 2025 Results H1 2025 Client Categories H1 2024 Client Categories Technology 42% FMCG 9% Financial 6% Auto 12% Retail 6% Media & Ent 4% Fashion & Lux 6% Telco 4% Other 11% Technology 44% FMCG 10% Financial 7% Auto 8% Retail 5% Media & Ent 4% Fashion & Lux 8% Agency 3% Other 11%
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S4 Capital plc H1 2025 Results 17 A compelling portfolio of clients S4 Capital plc H1 2025 Results Client Revenue H1 2025 H1 2024 Number of clients % of Revenue Cumulative % Number of clients % of Revenue Cumulative % > £10m 6 42% 42% 6 39% 39% £5–10m 3 7% 49% 5 10% 49% £1–5m 40 21% 70% 45 23% 72% £0.1–1m 292 23% 93% 321 22% 94% Average revenue per client (£m)
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S4 Capital plc H1 2025 Results 18 4 S4 Capital plc H1 2025 Results Artificial Intelligence
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S4 Capital plc H1 2025 Results MONKSAI UPDATE Monks Proprietary & Confidential
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S4 Capital plc H1 2025 Results 2023 2024 WE CHOOSE GROWTH 2025 2026 US BASED FMCG
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S4 Capital plc H1 2025 Results AI IS EATING THE AGENCY BUSINESS 65% Agency tasks can be done by agents
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S4 Capital plc H1 2025 Results THE BRAVE SLIDE Hybrid AI-First Fully Agentic Pipeline engineering Agents People led production Retained: core teams Consistency Volume Cost per asset
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S4 Capital plc H1 2025 Results WHERE’S THE MONEY GOING? ARR Software Consulting Transformation Systems Integration Tech Partners Outputs Services
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S4 Capital plc H1 2025 Results MONKS IS A CHANGE AGENT
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S4 Capital plc H1 2025 Results
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S4 Capital plc H1 2025 Results OUR AGENTS Monks.Flow accelerates the adoption of AI by marketers
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↪ Monks.Flow The Ecosystem In a Nutshell Monks.Flow transforms marketing by deploying an AI workforce organized across three core Solutions: data-driven Strategy, automated Content, and optimized Media. We deliver these solutions through Flows: end-to-end managed offerings where specialized AI Agents orchestrate a combination of Tools and a unified Data foundation to solve your most critical marketing challenges. Solutions Flows Agents Tools Data
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↪ Flows Flows are comprehensive offerings that transform entire marketing domains through specialized AI Agents that intelligently orchestrate Tools and unified Data. TOOLS DATA+AGENTS + INSIGHTS.FLOW AUDIENCE.FLOW STRATEGY FLOW CREATIVE.FLOW STUDIO.FLOW ADAPTATION.FLOW QA.FLOW MEDIA.FLOW PERFORMANCE.FLOW APPROVAL.FLOW DELIVERY.FLOW ADAPTATION.FLOW
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S4 Capital plc H1 2025 Results OUR EXPERTISE
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S4 Capital plc H1 2025 Results 30 Summary and Outlook 5 S4 Capital plc H1 2025 Results
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S4 Capital plc H1 2025 Results 31 Summary & Outlook S4 Capital plc H1 2025 Results ● H1 2025 net revenue down 12.7% reported and 10.0% like-for-like ● Full year 2025 net revenue expected to decline mid-single digits on a like-for-like basis due to macroeconomic uncertainty and continued client caution ● Operational EBITDA of £20.8m in line with expectations ● We maintain our full year target for EBITDA, which is expected to be broadly similar to 2024 on a like-for-like basis driven by the phasing of new business revenue and further incremental cost reduction actions being taken ● Wins such as General Motors, Amazon, T-Mobile and a leading US-based FMCG are expected to ramp-up in H2 2025, supporting a greater second-half weighting this year ● Free cash flow £16.0m (H1 2024: £3.1m) and we maintain our 2025 target net debt range of £100-140m ● The Company paid a first time final dividend of 1 pence per share on the 10th July, amounting to £6.1m and the Board will consider an enhanced final dividend for 2025, if the second half performance and liquidity targets are delivered ● We are seeing our AI initiatives produce more effective and efficient solutions for our clients, and this capability is driving significant opportunities for new business and broadened relationships with existing clients ● We maintain a disciplined approach to managing our cost base and continue our focus on greater efficiency, utilisation, billability and pricing ● We remain confident in our strategy, business model and talent, which together with scaled client relationships position us well for growth in the longer term
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S4 Capital plc H1 2025 Results 32 Q&A 6 S4 Capital plc H1 2025 Results
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S4 Capital plc H1 2025 Results 33 Appendix 7 S4 Capital plc H1 2025 Results
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S4 Capital plc H1 2025 Results ● XXX 34 Additional information S4 Capital plc H1 2025 Results 1. Estimated weighted average share count excluding any impact due to the incentive shares. Guidance on adjusting items for 2025 Amortisation c.£45-50m Share based payments c.£7-10m Acquisition, restructuring and other expenses c.£25-£30m Total adjusting items expected c.£77- £90m Weighted average share count Expected weighted average share count for 2025 of c.677m1 Expected weighted average share count for 2026 of c.687m1 Shares consideration committed Deferred share issuance of c.57m shares in 2025 Expected contingent consideration shares of c.1m in 2025 Cash contingent consideration Cash contingent consideration payments of c.£1.5m expected in 2025
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S4 Capital plc H1 2025 Results Thank you