Welcome. Thank you very much for coming. Now, I realize you're very much focused on the numbers this morning, but I want to start with this key message. Next one. There we go. I realize, as I say, you'll focus on the numbers, but because I think so many people in the market believe AI is a problem for us, I want to emphasize this. We certainly believe there is great disruption in our industry, but this will favor YouGov, favor us, not harm us, as we are investing in AI, to maximize the opportunity. So it's against that background of expected disruption that we have shown incredible resilience. We've delivered reported revenue up by 2% to GBP 194.8 million, when most companies are flat or down.
We're showing a statutory operating profit up by 14% and statutory profit before tax up by 14% and the revenue and profit up by 4%. Data Products up 2% like for like, that is excluding a discontinued product. Adjusted profit is down for half year to GBP 24 million, reflecting essential investment in Shopper data gathering methods and also investment in AI. Earnings per share is 11.4 pence, and the balance sheet is solid at nearly GBP 33 million positive with a net leverage of 2.1. Profitability, of course, is affected by investment, partly in Shopper to keep it competitive, and partly in AI to transform the company. Given what we consider to be pretty extreme undervaluation of this company, we do intend to have a share buyback after refinancing.
While the macroeconomic environment remains uncertain, clients are continuing to prioritize the high quality human data and strategic research projects that are where YouGov continues to be strongly positioned. This is a quick reminder that we had 15 years of growth, proven by innovation. That is the DNA of this company. As I will show you a little later, AI is driving some amazing innovation at YouGov. We've launched an add-on to BrandIndex. Voices renewals have been steady. In the new year, as in the old year, we have hit record highs for a single subscription, in this case, to a major tech company. In research we've had strong performances, especially in banking and retail, and in all regions, especially in America.
A particular favorite of mine was a major study of perceptions of AI across the U.S. for Anthropic, which they released as a major public report. With Shopper, we've expanded and upgraded our panels, and we've added a new method for data collection, which was essential to be competitive in a changing landscape. Given the severe undervaluation of this company, we are conducting a strategic review of how Shopper best fits. I now hand over to my colleague, our CFO, James Davies, but let me first say what a pleasure it is to be supported in our transformation by such an experienced, talented and determined individual. James.
Thank you, Stephan. Hello, everyone. I've really enjoyed my first month as CFO of YouGov. This is a great business with passionate people around the whole globe. It has an exceptional platform and brand, although we are not optimizing its potential, and there is a lot of work to do. Yet we are not as efficient and streamlined as I would like us to be. Five weeks in and I'm seeing many areas of productivity and efficiency improvements that must be executed. These are all within our gift. We are not yet embracing modern ways of optimizing the value we can drive from our market-leading panel and trusted brand. This doesn't just relate to cost cuts, but also more efficient ways of working, collaborating across teams and countries, and with a much sharper focus on how we actually optimize margin across our diverse product range.
We're in the process of improving the discipline across the business in all of these areas as tools, market dynamics and competition have evolved. My roadmap is filling up nicely, although my main priority is to focus on growth in the right markets, margin enhancements on a group-wide basis, and to bring back agile ways of working. Yes, we are a listed business, although this doesn't mean we can't be slick and entrepreneurial, focusing heavily on maximizing returns on every penny of investment. I don't plan to spend too long looking backwards today. I want us to look forward, and I will be announcing shortly our Value Delivery Plan. The Value Delivery Plan is a full reset plan.
However, I will spend a few minutes going back through the segmental P&L performance, along with some data points around our balance sheet and cash flow before moving on to H2 2026 and beyond. As Stephan alluded to, the market research and agency sector is in a tough patch at the moment, and growth is being compromised for many reasons, including budget constraints. However, our products and reputation means we remain highly relevant and we continue to grow top line by 2% year-over-year. There are not many businesses in our sector or adjacent sectors that can say that. Many are declining in high single digits, let alone growing in single digits. I particularly like the graph Stephan ran through earlier showing 15 years of growth.
That is a very impressive stat for a business of our age in the sector in which we operate. Research has been a star performer with Data Products and Shopper stable from a top-line perspective. Moving on to adjusted operating profit, there are three themes. Firstly, when we compare statutory measures, not adjusted measures, operating profit is up a healthy 14% year-on-year. As a principle, like many of you, I do not like adjusted measures. It can mean a reader can't see the wood for the trees. Although I am reassured that our statutory measures have performed well. Also, separately identified items are much lower this year relative to last year. There will, however, be separately identifiable items as we progress through the Value Delivery Plan, which I will talk through shortly.
However, I commit that the threshold around adjusted measures will be much higher and communication much clearer going forward. Theme two, the Data Products division continues to perform very well with an even higher margin than an already attractive margin of 30% that we achieved last year. In this half, we were at 35%. This is very encouraging. Theme three, material incremental investment in Shopper of over GBP 3 million in H1. This is the main reason for the adjusted operating profit reduction versus last year. This investment does continue into 2027 and 2028. However, we do see revenue benefits hitting us in the 2027 financial year. This investment is substantial, but it is imperative we introduce this now to enable semi-passive and passive data collection, as well as to expand and upgrade panels across Europe.
This investment is intended to support its growth trajectory and competitiveness, and we are already seeing early success in improved client delivery and new opportunities. I'll come back to operating profit in a bit more detail shortly. Moving on to revenue by region. Three of our four regions drove revenue growth. Americas sector focus is proving fruitful, and despite the political calendar going against us this year, 2% growth was still achieved. UK and Asia-Pacific also grew nicely. Mainland Europe, this is our largest revenue contributor, and it was flat year on year. The larger, more strategic European countries performed well, although some of our smaller footprints did decline. For example, in Nordics.
As we go through the Value Delivery Plan later, we'll be focusing on areas that perform well and areas that we need to improve performance on, and some of the smaller European countries most definitely fall into that category. There is a slight timing difference for shopper, although I'm confident that H2 growth will be as good, if not better than expected, for the shopper business, and we will return to year-on-year growth for the European region by the end of the year. Moving on to customer base. Our customer base remains resilient and from a sector perspective, nicely diversified. Technology remains our largest segment and continues to deliver growth. On top of the detail on this page is the FMCG aspect of shopper. This page just shows YouGov core and excludes shopper. So when you add in shopper, this is an even more attractive picture. Cash generation.
Cash from operations is GBP 3 million lower than last year. That is less than the reduction in adjusted operating profit. Cash conversion efficiencies are supporting this cash conversion measure too. However, I've been here four or five weeks. One area I need to focus on more is to improve the cash conversion and focus more heavily on working capital improvements and smoothing as we go through the next few quarters. Our business is very seasonal from a cash flow perspective, as many of you will know. Moving on to the balance sheet. Since H1 2025, we paid down EUR 20 million of our term debt, which occurred in October of last year. The next payment is for the same amount, is due in October of this year.
However, I'm delighted to say that we have already commenced our refinancing exercise for both the term loan and our fully drawn RCF. Our debt ratios, net debt to EBITDA and interest cover, are both well within the terms of the current loan docs. I'm not concerned about liquidity for this business, although I am looking forward to doing a refinancing which will better reflect the structure and needs of the balance sheet as to where we are at the moment. Right, moving back to operating profit. I was keen to do two bridges. The first one is the H1 bridge. This is basically the earning story of H1 this year versus H1 last year. The chart you see shows a GBP 6 million reduction year-on-year. Half of this is due to the additional shopper investment already communicated.
The 3 million represents the incremental level of shopper investment in H1 2026 versus H1 2025. In H2, a further delta is expected to be a gain of circa GBP 3 million-GBP 3.5 million, with further investment in 2027 and 2028. As explained, we do start to see returns coming in in 2027. I could develop a narrative which says that the further year-on-year variance, also of GBP 3 million, is due to a clear and specific investment program in YouGov core, which would deliver very clearly defined returns in eight years. However, I won't do this. I see this earnings variance as being broadly in the normal course of business. Yes, there is investment in our platform and tech footprints, but there is also a GBP 1 million additional cost to the significant progress we've made in the shopper work stream.
However, I class this extra GBP 3 million as ordinary course activities. To conclude on H1, we are GBP 3 million down due to extra costs that have been incurred. Moving on to page 2. I know it's time to look at the future following the explanation of the past. Last year, page 2 was flat with H1. This year, we will see growth in adjusted operating profit in H2. We are guiding to an adjusted operating profit outcome for the full financial year between GBP 52 million and GBP 56 million, which gets us into the bottom end of the consensus range. Let me talk you through the chart below on screen, and I can explain why I've communicated a range. Shopper investments of approximately GBP 3 million-GBP 3.5 million will be incurred in H2. We also have GBP 2.2 million of additional costs in the second half.
This is a consistent theme to H1 in that the year-on-year delta is due to shoppers, TSAs, and platform investment in the core business. Again, not specific enough for me to take out as investment variance. Plus, we have a benefit of no less than GBP 1 million, which I'm calling margin improvement or value creation in H2. What do I mean by this? I mean, as of now, I can identify this uplift relative to last year. I have very high conviction of achieving this number. This number gets us to the bottom end of our range. My work on a more specific year-end outcome outturn is ongoing, and there are initiatives in flight which could mean this value growth margin enhancement could be up to GBP 4 million higher. This will get us to the 56 number.
We will be working hard over the coming months to optimize where we end up. However, I'd like to be very clear that we are not solving for an optimum FY 2026 operating profit. We are solving for a value optimizing 2027 and beyond. It'll be very clear at the year end around how and why we ended up at the final position within this stated range. I also wanted to highlight that by simply taking out the shopper investment, the guidance for the year would be between GBP 58 million and GBP 63 million. I want to reiterate that I could take out 3 million of YouGov core to add to this number, but I won't. This is normal course of business under my definitions. Moving on to the Value Delivery Plan.
We have covered the scope of numbers and the outlook for the financial year, but I want to talk about 2027 beyond, because this is where it gets really interesting. I'd like to front-load some of the detail that Stephan will go through shortly. There are three waves to our Value Delivery Plan. This is a plan that we've kicked off in the last few weeks. Stephan's section below is going to mainly cover wave three and parts of wave two, but let me go through my version of each wave now. Wave 1. As I mentioned, I've been at YouGov now for five weeks, and I was very keen to ensure that we could land some key messages with conviction today. I wanted to be able to provide confidence that we are taking all appropriate actions to optimize value and earnings.
I did not want to sit here today and say, "I was going to do this, I will do that." I wanted to say that I have done something already with the full support of the board. We've already actioned annual run rate margin optimization of GBP 2.5 million, where we have eliminated a chunk of cost and several inefficiencies, predominantly in non-revenue generating areas. This is real, and I'm delighted to say that wave one of the VDP has been completed. We are just starting this new focus of executing at pace, and this will continue. Wave 2. This kicks off next week, which is needed to get the business back to where it needs to be. Gone are the days where the solution to every problem is to increase head count and further inefficiency, and to lack focus on accountability.
This is stopping and will stop in its entirety very soon. I commit to providing an update on wave two at the Capital Markets Day in the summer. It won't be complete by then, although it will be reasonably advanced. The earnings uplift from wave two will be a multiple of the value of the wave one uplift, and a chunk of this benefit will hit the financial year 2027. The combined impact of the first two waves is expected to deliver an annualized adjusted operating profit margin uplift in excess of 350 basis points relative to the margin achieved in H1 2026. This is once it is fully executed. For example, if we manage to fully execute this before the year end, the full benefit of this uplift will happen in FY 2027.
If it doesn't all happen before the end of this financial year, there will be elements of this enhancement within FY 2027. Again, looking forward to giving more updates on this in the Capital Markets Day and at the full-year results presentation in October. In wave two, as you can see from the graph, that's where we start to implement the AI transformation program. Wave one was nothing whatsoever to do with AI, wave two is partly to do with AI, and wave three is fully to do with AI. Moving on to wave three, this really is the exciting piece, and Stephan will go through this in detail shortly. This wave represents a material evolution in how we win, operate, and serve clients. Wave three is expected to deliver a margin profile aligned with an AI-led data business, making a step change from our historical margin structure.
I can't yet quantify the specific financial shape this will result in. However, I'm starting to get an inkling as to what this could look like, and it's very exciting. We will be sharing further detail on this in due course. I'd now like to pass back to Stephan to go through wave three and many other topics in more detail.
Thank you very much, James. Yeah. Look, the AI disruption is not only about big operational savings. The bigger picture is that the age of AI demands exactly the kind of data that YouGov delivers so efficiently. I'd like to remind everybody that it was YouGov that first built an engine for automated research data at scale. By the way, we're still the only ones that do this. Since 2007, for 19 years, BrandIndex has been selecting sample, running daily surveys, processing the resulting data, and delivering it to an analytics platform without any human intervention. It's all automated and has never broken. That data goes into our data lake, which is structured and called the Cube, and it generates a variety of products, including BrandIndex Profiles and Ratings. This single source human data is our moat.
Nobody else has it, and nobody else can do it quickly. That's what I mean when I say that disruption in AI will disadvantage most companies, but it will massively benefit YouGov, because the advantage for us is inherent in our data generation engine. A couple more specifics about that disruption, which to us is very welcome. On the left, individual samples will be commoditized. People say to me sometimes, "Aren't panels just becoming a commodity?" We have to differentiate between supplying mere samples and having an engaged panel. These are different things. An engaged panel that builds a constant stream of connected data is not just like, "Give me some sample." Our panel is a qual-qual and behavioral single-source data system. Then there's the human operations that are required for old style conventional research. With YouGov, this will be 100% end-to-end automated.
We already have the prototype running right now, and LLM has direct access to our system and can create its own machine research without any human intervention on either side. The only human bit is our panelists. Excuse me, it's our panelists talking directly with the bot. There's the consultancy part, which is, of course, a huge part of the market research industry that has always been unscalable, and like most forms of consultancy, it will be directly replaced for the most part by AI. Expertise in using the system, yes. Expertise in deploying the data, yes. But for consultancy as a whole, that's a no. This is a dynamic engine for premium, connected, structured, universal human data. It's a utility for everyone to use. I'll be quick on this slide.
You already saw it six months ago, and it's operationalized now, and it shows tens of thousands of people every day, not only clicking on BrandIndex questions, but then talking about them afterwards and adding the qualitative why data to the quantitative what data. You can get the moving lines and the transcripts of dialogues from the same humans. The first outing for this was YouGov Voices that we launched a few weeks ago, and it has aroused good initial interest, but it's only scratching the surface of what's coming. This is the new operating model for generating the most relevant human data made dynamic by AI. It's a learning loop. The left-hand side of the diagram is the flywheel of the data generation, which has been going for 19 years. A global panel automatically serves surveys. This is number one, the top pillar.
A global panel automatically serves surveys that go into a structured data lake. Number two is the dynamic data collection. Number three is the data lake, the cube, which is structured and contains all of that data in a form that generates trusted data products. That's number four, and that's served up into dashboards and an analytics platform. Now directly to LLMs as well and to AI systems. That bit on the left, the five pillars, is the YouGov system for generating our connected data. Now we add the dynamic part on the right-hand side, a learning loop. On the right-hand side, you've got this data-seek engine, which looks at the data and decides what data is needed, and an AI analysis system that works out what the uncertainties are in the data and what then is needed in order to fulfill that.
That goes back into the flywheel, as it were. It changes the dynamic data collection, and means that we can update the queue. Let's put it this way. Imagine you have an unbroken straight trend line, and then new data starts to look as if it's a movement away from that trend line. That will be detected, and it will mean we would increase data collection to make sure that our imputation model and indeed, the consistency of the trends, is understood, and then corrected or updated, should we say, in the model. That will generate an automatic alert to users, and will be a trigger for new research, no doubt.
This is a new way of seeing research, not as a series of surveys, not as a series of disconnected bits of insight, but as a model of your market that is continuously updated in an intelligent way without you having to do anything, and getting the alerts for what's happening and what's changing. That's the revolution that's coming, and it will be pioneered by YouGov as the internet revolution in research was pioneered by YouGov. This is what excites me and what is coming down the tubes faster than you might expect. It all exists, and we're going to the next stage with it. Finally, I would like to introduce our new chairman, a man with so much experience in our industry that I wanted him to succeed me as CEO when the time comes, but sadly, he turned me down.
Our new Chairman, Ian Griffiths.
Thank you, Stephan, James. That's quite an introduction. Good morning, everyone. I just want to close with a few comments recognizing where the business is today, but also pulling together some of the key themes that we've announced in our RNS this morning. I would just like to say that when I joined the board back in September, I was genuinely excited about the opportunity to be part of the team that gets this business back to delivering sustainable growth. Stephan has created something rather unique at YouGov. It's a panel of depth and breadth driven by data from real people. An asset, as he said, that's almost impossible to replicate, and it's very different to anything else in the industry. Now, I recognize that this business and the shareholders have had a challenging couple of years.
However, I hope you agree, and almost despite today's share price reaction, that what you've heard today does start to set a different tone and sense of direction. Under James, there's increased grip and focus on our financials. We have a new Value Delivery Plan, which we're executing at pace. We're getting much clearer about how the business can be positioned as a leader or using Stefan's phrase, as a pioneer in the age of AI. We've kicked off a strategic review of our shopper business. As a next phase, the board has asked the team to put all of this together into a new business plan that will be reviewed in May, and it will form the basis for a Capital Markets Day later in the year. I believe probably the most important role for this board is how we allocate capital to create value for our shareholders.
It was very clear, even before today, that there's a material disconnect between the underlying value of the business and the share price. As a result, the board has agreed that any returns to shareholders this year will be by way of a share buyback rather than the usual dividend. I also want a board with more of a private equity mindset, one that's really aligned to the team and to shareholders. We've already reduced the number of NEDs down to five, and by the time of our AGM later this year, we'll be down to four, which feels about the right size. Then finally from me, let me deal with the CEO succession, because today we're announcing the start of the process to find a permanent successor to Stephan. That process will take as long as is needed for us to find the right person.
As you've heard today, there is no rush. When Stephan stepped back into the CEO role, he set himself a series of objectives. As you've heard today, we believe there's real progress delivering against them. The pathway to an exciting value-creating future is becoming clearer. There's clearly a lot to do. There's new initiatives underway, a view on the direction that we've set, and I hope you agree, a real positive sense of momentum. Pace is important, but so is executing brilliantly. The board is genuinely excited about what's possible for this business, and we look forward to updating you as our delivery progresses. That's all I wanted to say at this point. I'm now going to hand you back to Stephan and James to lead you through the Q&A. Thank you.
Thanks.
Thank you. We do have quite a few questions coming in. Could I just remind anyone wanting to post a question to please put it in the Q&A? The first question coming up is from Sean Thapar, and we have a few questions from Sean. Thank you very much. The first one is, "You are pursuing investment in FY 2026, but are expecting the Value Delivery Plan to deliver enhancements to profitability in FY 2027. What gives you confidence that this level of investment is sufficient rather than requiring a sustained investment period over multiple years? Related to that, what details can you share that give you confidence that there will be an immediate improvement in profitability from next year?
Should I take the first of those first? First of all, thank you for your question, Sean. Is the investment enough? Despite only being here a month or so, I think the investment in the Shopper business has been structured well. It didn't start in the last few weeks or months, it started last year. It's a very well-structured path. It's gone through the required due diligence and effort from the central. I'm confident that the work, that the investment is done is in the right way. As we explained, that investment is predominantly in Shopper, the separately identifiable pieces. The investment within the rest of business at the moment, I'm keeping that in the traditional operating profit category. That moves nicely onto the second part of your question on margin.
Yeah, I've got high conviction that we will get to that 350 BPS improvement during, not necessarily at the start of, but during FY 2027, and that will be after any further investment we may choose. For example, wave two is not gonna be about pure cost-cutting. There will be some cost cuts, but we'll also be investing in different areas as well. The net benefit will be the 350 increase in operating margin. We'll be thinking about how the business reshapes as we enter wave three.
Thank you very much. We have a few more questions from Sean. On the balance of investment, you have earmarked GBP 6 million for Shopper and GBP 3 million for the YouGov platform. Given how ambitious you are being on the platform side, AI, research, delivery, et cetera, why is the largest proportion of investment going into Shopper now rather than allocating more to the YouGov core?
Well, I think that the investment into the core part is the right amount. Our teams know what they're doing. It's actually very efficient. It generates efficiencies as we move forward on that. I'm not worried about that. I think the investment in shopper is about competing in a new environment, and it does mean some important new pieces are being built. That does feed back into our core data pieces. This is not entirely separate. The new method of methodology for gathering shopping data generates not only purchases in the shopping basket, but in fact, all kinds of spending across a variety of different outlets, everything from gas stations to theater tickets to visits to department stores. It isn't limited to what's happening in supermarkets.
Therefore, it provides a constant stream of verified purchases that can lead to instantaneous re-interviews or interviews with people who've just made those purchases. That can be not simply by quant, but by qual as well, in other words, by conversation. It does actually open up new, closely related products to the main YouGov product. I wouldn't see it as a separate thing altogether. I would say it's part of the total.
Thank you. We have a few more parts to Sean's question. Your strategic review of Shopper seems to suggest two potential outcomes for the business, either disposal or deeper integration. Your current investment appears to be a bet on expanding the business. Can you indicate which outcome you favor for the business, and how the investment you're making today aligns with that?
Well, to be clear, we see Shopper as important to the strategic direction of YouGov in terms of data that generates more and more data generation and more and more data that leads and so forth. It's part of our strategy, but there are ways that we can do that without Shopper if that's necessary. It wouldn't be something we would be doing were we not so undervalued that it's an option that shareholders must want us to consider. Do you want to add something to that?
No, I just really want to reinforce the last point Stephan made that if it wasn't for our share price position, we would not be doing a strategic review of shopper. The rationale when we bought the deal is exactly as strong now as it was then. It would be wrong of us not to assess the potential returns of a sale of shopper could do to the shareholder base. The question that you raised, Sean, was about further integration or sale. That's spot on. We've integrated it to a certain level. We've cleared out pretty much all of the transition services agreements from the previous owner, and it is now in a nice, clean, self-contained space.
We will be making a decision over the coming quarters whether we do go for the big full integration or if all the value creation is better with another owner. I would like to reinforce that, yeah, we're not in active discussions at the moment. This is not gonna happen over the coming weeks or months. It will be a slightly longer burn. The investment we're doing, we've got half of it. It will enhance the sale, should that be the route we go down. If we do keep it will obviously enhance our ownership going forward as well.
Thank you. Final part of Sean's question, could you share what programs are underway to deliver the value creation component of the FY 2026 profitability plan? What drives the variance behind the GBP 1 million-GBP 5 million contribution range?
Very good question. If we were doing this results presentation in two, three months' time, I could probably be much more clear on not having a range. There's quite a few initiatives we have actioned in the previous weeks which will dictate where we end up in that range. As I alluded to, I think this is an important point, and I will, please do hold me to this in the summer and in October. We're not solving for a 2026 number. The waves are very exciting, and we want to make the right decision with investment as well as efficiencies over the coming quarters. There are a few decisions we'll be making as a board going forward. As Ian said, we are going to be thinking more private equity-like and returns-based than maybe we have in the past.
Yeah, looking forward to updating you in more detail over the coming announcements.
Thank you. Now we have a question from Leo Mansour. He has asked, in reference to underperforming products, what are these, and are there other products like that still?
This specifically refers to the residence or firewall piece that we were using for recruitment. We now have a much better way of doing that. We are recruiting. I think I neglected to look at that last slide where I talk about. Apologies for that. I'll just fit in this very important part of it. We are now using AI as well in the recruitment process, and the recruitment process generates data, whether someone joins a panel or not. This is one of the really big advantages of our methodology that I don't know how I missed that. It's alluded to in that last slide. We have something better. We don't need a firewall pass. It was not generating the value that we wanted it to. Things have changed. The way people interact have changed.
We are obviously modernizing our systems with that. That's what happened there. There are a few stray little Data Products that have grown up over the years. They're nothing consequential. Here and there are some things that we discontinued as they come out of contract. They're trivial. It's nothing significant.
One thing I would just add, and I did allude to this in my section, is we are very global. We have 52 offices around the world, and there are some regions that I think we can be more efficient in operating in such regions. I think that's part of the reason for our European performance in H1. I'm very optimistic that growth will be there for Europe as a whole for the year, but we are doing a deep dive into how we operate on a regional basis for accountability and efficiency purposes.
Thank you. Now we have a question from Jessica Pok. Do you have the skills within the business for wave three of the Value Delivery Plan? Can we expect reskilling or replacing of staff?
Well, I definitely think that automating research operations must lead to, I wouldn't say significant, I would say huge efficiencies. I think this is fundamental. When tech companies are talking about this, and they're talking about sometimes 40% reductions in workforce. I'm not going to put that out there, but we are a data generation company. That is the most important thing we do, and that has involved quite a lot of heavy lifting inside those processes, which will be done by AI. We are expecting really significant change in that. Now, obviously, we hope to grow in other aspects of our business, such that it doesn't necessarily mean that all of those people are lost. I do think it will be a skinnier business. I think it has to be. I think that is the effect of AI.
Katie's talked about it, but we must be realistic. We see great efficiencies in this.
Thank you. A second question from Jessica. Can you provide more color on the progress of YouGov Voices and how it has been received by clients? What percentage of your panel is interacting via chat for YouGov Voices?
I'm not gonna give a blow-by-blow account of that a couple of weeks after launch, but it was a very generative launch, lots and lots of conversations and better than that. I'm not going to give that right now. I would say that something like a quarter of our active panelists, let us say, that are actually doing a survey, are going on to do conversations. That is within the countries where we're doing this, which is the U.K. and U.S. I don't know the exact number because it differs from day to day.
Thank you. Now a question from Michael Nidilsky. Michael, apologies if I haven't pronounced your name correctly. Regarding the buyback, consensus is expecting you to generate just under GBP 30 million of free cash flow. Is it reasonable to expect a buyback of this size, or will it just be the equivalent of what the dividend payment was expected to be, i.e., closer to GBP 10 million?
First of all, Michael, that's a good question. The answer is there's an element of flexibility. One thing that I would like to reiterate, though, is we are doing a refinance. We are not going to be doing a refinance to lever up to do a share buyback. But as you correctly pointed out, we do generate free cash flow. So there is an element of flexibility. But I would use as your base case as a starting point, an amount broadly in line with the annual dividend payments. But yeah, I wouldn't say it couldn't be potentially marginally higher should we feel comfortable with cash flow at that point in time. In terms of the analyst modeling, I would assume that this happens in H1 2027 in terms of timing.
Thank you.
Which finances? August onwards?
Yeah. August onwards. Yeah. I'm still getting used to our fiscal year end at the moment. Yeah, August onwards.
Now we have a question from Steve Hatch. It's in relation to the VDP, and the question is, "Why no revenue growth targets?" One related to you specifically, James, "Are reporting/budgeting systems good enough to deliver cost savings?" The final part of this question is related to the AI learning loop. "When is it in place and revenue generating? Is this a product thing or changing all existing operations?
Right. First of all, thanks, Steven, as always, great questions from yourself. First of all, revenue, yeah, I'm deliberately focusing on margin and on disclosure of the plan at this stage. In the summer and in October, we'll talk more about the revenue side because I feel at the moment with the AI piece in wave three, that bit's still getting finalized from our thinking. At the moment we're focusing very confidently on the margin improvements, but the revenue picture will become more clear as we shape out wave three. In terms of your second question about systems, I worked in many companies now and systems were never perfect. The systems at YouGov are not perfect, but do I have enough MI and real time information to enable to deliver these benefits? The answer is most definitely yes.
I don't believe we need to invest heavily in our back office systems yet, but there will be some investments going through in the coming quarters to make sure we do have what we need to go through waves two and three.
Steve, on the third question, a really interesting question, and you've clearly got what's happening there. That divides into two bits. There's the learning loop that the AI, that the LLM can do, and that is now. In other words, if an AI or indeed a researcher looks at the data coming in or their own data that they have and says, "We need more," that system defines what is the data that is to be collected. They generate that through their systems into our system and get that data back. That learning loop exists with the client AI. They can learn in real time, they can update their models in real time using our engine. That is today. I'm not saying I talked about a prototype. It's a working prototype that's functioning. Obviously we're learning from that functioning.
Now, the second part is when do we do it for ourselves? Because you have that LLM bit in the other pillar, the other part of the pillar is when we do it for ourselves. That really goes hand in hand, I think, with our research partners there, our client partners. I can't really say more than that at the moment.
Here we have a question from James. It's in reference to wave 3. The question is, "Wave references a margin profile aligned with an AI-led data business. Can you give us a target range for what that means? Are we talking 20%, 25% or higher?
That's a question I was hoping I wouldn't be asked, if I'm being honest with you, Steve. I don't think I'm ready to give any number there, but it will be more than we're getting at the moment. I know that's not overly helpful, but please do bear with us. As soon as we feel comfortable giving a range in that level, we will do so.
Thank you. A question from William Larwood. "Are you seeing pricing pressure in the market, and if so, which areas are you seeing it?
Let me start off and then Stephan can add his view. I think the one thing which I was pleased at when I first joined was I double-checked what our order book looked like and our pipeline looked like from a client perspective. I was particularly pleased that, and I think we got this in one of the releases, that we are 80% covered for the full year already. When I say covered, I don't mean order book, I don't mean pipeline. I mean contractually covered. That is 100 basis points higher than where we were at this position before. That gives, hopefully, an element of comfort that from a revenue perspective, we're feeling pretty comfortable. We're not being complacent obviously, but we're feeling comfortable and obviously within that number is both price and volume.
I think hopefully that gives you comfort that pricing pressure is not something that's hitting us from all sides at the moment.
Thank you. I'm just going back to a few additional questions from Leo Mansour. We had a question related to Shopper and the investments we made. What are these investments?
Well, these investments are, and Stephan can probably also give it, is basically changing the way that our panelists collect data. Because one thing I've learned in my very limited amount of time in the market research sector is you've got to make it easy and clean for certain cohorts to provide the information you want when you want it. We all know from previous sectors I've worked in, user experience is absolutely critical.
Consumers now compare UX across all sectors, regardless of what that sector may be. Really this is about being able to introduce semi-passive and passive data collection, upgrading panels across Europe, and the investment is to make the panel more effective, more efficient, more timely and deeper. That obviously can create many benefits to the big customers that we have in Shopper.
Yeah, I think we went over the key part of this, which is the methodology for data collection, moving from scanning to receipts and data uploads and downloads. This is a new methodology, new technology that is in the market and that replaces or adds to the other methodologies that we have. That requires not only the tech of that but also the interpretation, the translation, if you like, of the data from something that is incomplete, something that's more complete. I was mentioning, I think at the SKU level stuff, there's an investment there. Of course, a significant part of it is also in the cost of the new dashboards, or I should say, platforms on which the data is delivered.
Thank you. Two more questions from Leo. The first one in relation to our business in Asia-Pacific. The question is, "Can you explain why your business in Asia-Pacific is not profitable, and what is your strategy there? Is it the same offer as in the other geographies?
Well, it's always been a difficult market for us. I can't say anything particularly smart about that. There are parts of it which are, in fact, very profitable and other parts, there are other countries where we haven't done well, and some difficult countries, as you can imagine, some large companies where we are struggling to, not least, so involved. I haven't got anything good to say there other than the strong parts are what we will focus on, and as James has already mentioned, there'll be geographies that we may not want to be in physically anymore.
Thank you. One last question from Leo related to panel development. "What is your strategy there? When will you have enough panelists? Didn't you reach the right size with 34 million panelists?
Well, it becomes a very different calculation when the process of recruitment itself gathers data. This is actually pretty important because a panel must always have fresh minds in there, since quite a lot of what we do has to do with awareness. You can't test people for awareness of things that you've already talked to them about several times. You are constantly refreshing your panels and growing them as you have more for them to do and as we're selling more, of course. The process of the recruitment is now part of the value generation of our data. It can't be viewed in quite the same way. We want to keep having new people involved. We also are changing the experience of being a panelist. It won't all be about paid panelists.
It'll be a lot about unpaid panelists doing it for the experience of being part of a panel, and we found that in some areas that's better, in other areas, paid panelists are necessary. This is actually a core strength of YouGov, and a core challenge all the time is to change with the times. It isn't now exactly as it was five years ago.
Thank you. We have a question from Jonathan Barrett. It's in three parts. The first part, "Can you tell us what price uplift you achieved in Data Products?
Well, we have not been increasing the price of Data Products significantly over the last few years. We feel we need to be doing that, and that's part of James' review. That certainly is an important part of that. The new data that we're adding, however, will of course bring extra revenue to those products as well.
Thank you. Second part of the question, "How many sales of Qual have been made, and what is the pricing?
Well, as I did say, we've just been there for a couple of weeks. We wait for four years for that.
The final part, "When will the end-to-end product be released?" I think you may have touched on that.
The end-to-end, meaning the end-to-end automated risk research?
I'm assuming.
Hmm?
With Qual product.
Yes. That is what I mean. Well, that is developing all the time. I mean, we are running end-to-end Qual on a case-by-case basis, and the engineering will take. It will keep developing. It's an ever-developing product.
Thank you. I think that brings us to the end of our questions for today. Thanks very much. Thank you to everyone who submitted a question.
Thank you very much. Bye, everybody.