Hello, and welcome to the S4 Capital Q1 2020 trading update. I will shortly be handing you over to Sir Martin Sorrell, who will take you through today's presentation. There will be an opportunity for Q&A later in the call. For now, over to Sir Martin.
Thank you very much. Thank you everybody for joining us, and good morning to you, those people in the United States. I think a number of our people will be dialing in as well, so welcome to them, too. Clearly, these have been difficult and unusual times for all our clients and indeed for ourselves. All of us at S4, all 2,500 of us, would like to extend our thanks to all those frontline workers who are putting themselves at risk to ensure our safety and our health. We support them, and in fact, salute them. I also want to commend all our people who worked very hard through extremely difficult times. We've been very fortunate to have very few number of infections and consequences and illnesses from that.
We've had a couple of our people who've lost family members, sadly, and our hearts go out to them. We wish them and their families long life. It seems an awful long time ago that we were discussing our strong and very successful results for 2019. Clearly a lot's changed in a short period of time. While we've managed to continue through the efforts of our people, and the people on this call, to deliver market leading growth in quarter one 2020. Having done that, however, clearly we're not immune to the economic effects of this pandemic. You see what's happened to us in January and February and March. Our growth rates have been very strong, particularly in relation to technology companies and our competition. They have declined from 33% to 21% to 6% in March, although we have seen stabilizations we'll come onto in April.
Most of our offices, all of our people have moved to work from home by early March, ahead of government mandated lockdowns, alongside many of our clients. Given the fact that our people are not digital first, they're digital natives, they come from the platforms, they come from the software companies and the hardware companies. They're not necessarily traditional agency people. They were used to making use of technology and collaboration tools on a daily basis. This has worked, I'm glad to say, seamlessly, but it's not a surprise to us. Some people have expressed surprise about this, the ease with which it's done. It's not a surprise to us because we're used to working 24/7, faster, better, cheaper, that's built into our model. Our management team formed a group early on, and we've had daily calls on our progress, focusing on three key areas.
We've been doing this since early March. Firstly, mostly, people, their safety and security. As I've said, we've had very few cases. Clients. Secondly on clients, how we're continuing to support their efforts. Helping them adjust their spend and focus, adapting our services to their new needs and developing new revenue streams. Finally, finances. We're constantly looking at our financial position, our liquidity, and Peter will go into this later, looking at scenario planning, not just for Q2 or Q3, but beyond that throughout the year, throughout 2020, and into 2021. We're looking carefully at our cash flow and liquidity.
We remain very confident in our healthy balance sheet and the early strong actions that we'll go into on costs, which will not only allow us to navigate this crisis, but will probably also allow us to continue to make the investments we need to make, to emerge even stronger. Scott will be going into that. Turning to the agenda slide, which is slide two. We'll give a trading update. Peter Rademaker, our CFO, will give a trading update. Scott Spirit, our Chief Growth Officer, will then focus on trends. Wesley ter Haar , Victor Knaap's partner at MediaMonks, will talk about our content practice. Pete Kim, Chris Martin's partner at MightyHive, will talk about data and programmatic practice.
Scott will then take back the baton and talk about clients and mergers, and then I'll come back and talk briefly about the summary and outlook, and then we'll give you an opportunity for Q&A. Over to you, Peter.
Thank you, Sir Martin. Good morning, ladies and gentlemen. Going into the financial performance of the trading update as Sir Martin just referred to. What we have seen in the first quarter is basically a continued strong growth despite the early impact of COVID-19. As Sir Martin just indicated, we especially saw it in March, but also slightly in February, since January was up 33%, February 21%, and March 6% up compared to a like-for-like constant currency compared to last year. On the slide, what you see in front of you, I will go through the Q1, so for the full Q1 numbers, which is the reported revenue. That's in comparison to what we reported last year. That's 73% up now being GBP 71 million. Our Q1 reported gross profit was up with 85% to almost GBP 61 million.
On a like-for-like basis, which is more relevant, especially given our activities last year in 2019 on the merger, we thought it would be better to do that on a constant currency and a like-for-like basis. Our revenue was up at 17%. Our most important measure, we express all our percentages as a percentage of gross profit, so gross profit is our most important measure, was up with 19%. On a pro forma basis for the quarter, which means that all mergers that we did last year are included in the full year, although they may have been later in the course of 2019. If you look at a pro forma basis, revenue was up with 19% and our gross profit was up with 22%. All regions contributed significantly in a strong growth.
As Martin just indicated, cash and liquidity is, of course, an important thing for us and an important focus point. Cash flow has remained very strong in the first quarter with average net cash balance of GBP 16 million, which basically consists of a GBP 91 million cash position on our balance sheet. At the same time, a GBP 75 million term debt and revolver, which we carry on our balance sheet. Still low volumes of term loans and revolvers, especially very strong cash position in the first quarter, averaging GBP 16 million. Our expectation for 2020, if you may have seen in our statement, is a sector-leading double-digit growth on a like-for-like revenue and gross profit basis with a reasonably strong EBITDA margin. I'll flip to the next page where we see the revenue gross profit by practice.
I will take you through the various practices, what they performed, and also geographically. Content was up with 89% on a reported basis to GBP 56 million. On a like-for-like basis compared to last year, a 17% up on content in revenues, and on a pro forma basis, 20% up. Programmatic was 32% up in a reported basis, 18% on like-for-like, and 20% on a pro forma basis. Content in the first quarter contributed 80% out of the total, and as a result, programmatic 20%. On gross profit, you will see that content has grown 112% compared to reported last year, 19% like-for-like, and 23% on a pro forma basis. Where programmatic grew with 32% on a reported basis, 17% like-for-like, and 17% also on a pro forma basis.
If you look at the mix in gross profit, content contributed 76% and programmatic 24%. Moving over to the next slide, the gross profit by geography. You see that the Americas are still very strong in our performance. 73% of our gross profit comes from the Americas, 18% from EMEA, and 9% from Asia Pacific. Americas grew with 96% compared to reported numbers last year. On a like-for-like basis, grew 21%, and on a pro forma basis, 24%. EMEA grew 45% compared to reported, 11% compared to like-for-like, and also 11% to pro forma. Asia Pacific finally grew 118% compared to last year reported, 21% on a like-for-like basis, and 23% on a pro forma basis. Moving to the next slide.
Although we have seen very strong growth still, or we consider this very strong growth, although it's limited compared to our last year numbers where we were over 40% growth. We basically took early precautionary actions to mitigate the COVID-19 impact. In, I would say somewhere early March, we already took some of our measures and the measures on cost and in liquidity, which are mentioned here. Some of them were executed in the course of March, some of them in April. At least we were, let's say, early in taking these precautionary measures. If you look at it, we took 50% reduction in compensations for our execs and boards as of April 1st. We are reducing and terminating office leases in a number of cities, which is also accelerating integration.
Where we had the opportunity in the past weeks or even going forward where certain lease contracts are expiring. As a result for our work from home situation, as Martin just explained, we have decided that some of the leases will be terminated because, one, we expect that it will take a couple of months or hopefully a couple of months before we get back to normal. At the same time, we also see in our 2,500 employee or headcount base, the people that we have in the group that there have been already some various options or questions whether or not we could maintain that or partially going forward to work from home.
As a result of that, we're actively evaluating our office portfolio, it's all rental, and take our measures where we can terminate or restructure or combine the various practices in one building in a certain city. Next to that, we have done quite a few OpEx reductions, especially travel, came sort of by itself, but also on entertainment, marketing, and promotions, and anticipated bonuses that we're taking out. Hiring reduction and scaling down on a number of freelancers, as well as adjusting where needed, people to client demand, again, where necessary. With these costs, this is just the highlights of our cost actions or precautionary actions we took. We see already that the impact on 2020 will be around GBP 18 million relative to the budget.
In the budget, we anticipate that the stronger growth and as a result of also a stronger increase or an increase in cost. Just for reference, if you take that GBP 18 million, that's approximately 10% of last year's pro forma personnel and indirect cost base, and we'll further investigate, like I said, especially with office leases and these kind of things, where we can create more savings where possible. On the next page, on liquidity. We have drawn down early March, very early in March already our revolver. There was no need to, but we wanted to safeguard that we have access to cash wherever needed. As I mentioned, this is the GBP 32 million drawdown that's on top of our GBP 42 million term loan that we carry on our balance sheet.
In other words, like I said, we had GBP 91 million of cash and approximately GBP 75 million of debt, which resulted in that average GBP 16 million over the first quarter on a net cash position. As Martin just said, in our daily calls, we're monitoring our cash balances on a daily basis. Already also very early in March, the CFOs of the practices have been instructed to pay extra attention on receivable collections. Our provisions are adequate, and Scott Spirit will elaborate on it later in our client portfolio per sector. We also see still very strong cash inflows, that's what I meant with reference to Scott, 53% of our revenue is derived from the big tech companies, the tech platforms, and they maintain their normal payment behavior, which is the 30 -days, 45 -days.
Also on our other client base, we still see, although there is some delay, but it's very limited, that our cash inflows remain to be very strong. From government subsidies or stimulus, so far, no government loans have been onboarded in our balance sheet. The only thing what we took already in or that has been applied for the past couple of weeks is, in most or in quite a few jurisdictions, there is a possibility to delay your corporate income tax or payroll tax or value-added tax. There we make use of the delays that the government or the tax authorities provide to us. Finally, on liquidity, the executive board has waived their cash bonuses, swapped them into shares on S4 Capital with a two year lockup to further strengthen our cash position and balance sheet. That was my short summary on the trading update.
Over to you, Scott.
Thanks, Peter. Appreciate it. While the impact of COVID-19 has been obviously profoundly negative on people's health and the economy and employment, as countries start to follow China's lead and emerge from these lockdowns, I think it's important for us to consider what that new normal looks like for our consumers, for our clients and businesses, and for our partners. The next few slides are really just some of the trends we see coming out of this. If we could go to slide 10. One of our clients, Satya Nadella of Microsoft, said on their earnings call, "We've seen two years' worth of digital transformation in two months." I think many others have come out with similar statements or even gone further as we're seeing consumers and brands rapidly change their behavior and their consumption patterns.
I can see it myself, my mom's extolling the benefits of Tesco delivery and curbside pickup in the U.K., and my dad's worked out how to call my sister and I at the same time on FaceTime. it's not just our parents. I'm sure all of us on this call can look at our behaviors over the past months and see that there are some highly accelerated trends there. even our kids, for those of you that have them, who already seem to spend their entire waking hours looking at screens, even they're managing to do more online. We can go to the next slide. These are some of the areas we see where consumption and behaviors change dramatically and will continue to have a major impact on how consumers act and how brands act. Our business going forward. the first one is streaming services.
Obviously, with us all stuck at home, that's been a real boon for the streaming entertainment industry. Our client, Netflix, announced they'd added 15.8 million subscribers, which was more than double what they were expecting in Q1, 22% year-over-year growth. Another client of ours, Spotify, gained 6 million paid subscribers and put that down to changing listening habits as a result of coronavirus. Next slide. Obviously, live events have ground to a halt, whether that's sport, music, B2B trade events, not going to be happening in the way that they did happen for the foreseeable future. That doesn't mean they stop. Travis Scott, who did a huge global world tour last year, recently performed a gig in Fortnite, which is a game, an online and mobile game, where 27.7 million unique players participated in that gig.
That was a far larger audience than he could ever achieve on an actual tour. What we're seeing is that while consumer and trade events are canceled for the foreseeable future, they are starting to go virtual, and we're seeing a lot of demand from clients who are looking to us for help on what the implications of this will be for their business. Next slide is around gaming. Gaming and esports were already on the ascendancy, but this was underlined a couple of weeks ago when, in the middle of this pandemic, BMW announced that they were sponsoring five of the world's leading esports teams. A new client of ours, the Twitch division of Amazon, has seen their activity on streaming live gameplay explode during Q1. Next slide is e-commerce.
Our partner and client, Adobe, released a study recently showing that e-grocery sales have more than doubled between March 13th and 15th, compared to March 5th to the 11th, and that was really when the panic started setting in and the lockdown started setting in. If you look at our other client, Amazon, you've seen that they had an incredible quarter, and they hired an amazing 175,000 additional employees to handle the surge in orders that they were seeing. Next slide. This will be very familiar to those of you with kids at home. UNICEF estimating that 1.6 billion young people are currently learning from home with schools and universities shut in most countries. Google announced on their call that 100 million students and educators are using Google Classroom, and that's double the number from the beginning of March. Next slide is around social networking.
We're social distancing at home and virtual relationships are all we can have right now. Our client and partner, Facebook, saw messaging volume increases of more than 50% in voice and video calling, more than doubling across Messenger and WhatsApp in the first quarter. Another client of ours, TikTok, is celebrating being the world's number one most downloaded app in Q1, and now has over 2 billion installs globally. Final slide is around work, which we're all doing now. I don't think I probably need to explain to you how that's changed in the past month or so, but it's transformed quite dramatically. Again, our partner Google, talking about their product Meet, saying that they're adding roughly 3 million new users a day. They've seen a 30-fold increase in usage since January.
I'm sure many of you are also using Zoom, who've seen their numbers increase from 10 million in January to 200 million in March. These are just some of the examples, and there are many others, of how our behaviors have changed. There are clear winners emerging in these categories, and many of them are disruptive tech firms and the big global tech firms like Google, Facebook, Amazon, Netflix, Spotify, et cetera, which is largely our client base. It's also obvious, though, that some of the more so-called traditional brands can and need to also adapt and take advantage of this switch to digital behavior.
Certainly, I think while many of these lockdown-inspired peaks in consumption that we've seen will recede a little as we're allowed to go outside and reengage with the physical world, I think these are giant leaps forward for digital, and they will remain with us. I can't imagine my mom ever going back to Tesco. The conversations we're having with friends are all around how they can accelerate their own digital transformation plans and reach more consumers through digital marketing. They're looking for partners like us to help them get there faster, better, and cheaper. That makes us feel confident that we're very well positioned for the recovery. Next slide, please. That said, obviously, S4's performance, as Peter explained in the earlier part of the presentation, is clearly not immune to the effects of COVID-19.
We've seen significant volatility in the past month. This makes any attempts at guidance very difficult, but we did want to be as transparent as we possibly could and try and give you some impression of what we're seeing in the business, and consequently, how we feel about the next quarter and going forward. This slide illustrates, it's an internal Salesforce report, which is a comparison between 2020 on the top and 2019 on the bottom. For the global media volumes that flow through MightyHive systems on behalf of their clients. It's their spend basically on behalf of clients. Given the shape of their business, it is skewed a bit to the North American market. As you can see, up until mid-March, the shapes are almost identical, albeit with higher volumes in 2020, given MightyHive's strong year-on-year growth.
In mid-March in this year, the spend drops off suddenly. When you look below to 2019, I've circled what is a typical end-of-quarter budget flush where clients spend what they have left in their budget. That simply didn't happen in March this year, because that coincided with the lockdowns and the peak panic situation around COVID-19, particularly in the U.S. On a more positive note, we have seen stabilization since early April, which is the beginning of the new quarter. In line with the commentary from Facebook and some of the other digital media platforms, we are seeing spend levels and patterns hold steady, similar levels to the same period in 2019. Next slide, please.
If we look at this from an S4 perspective, you'll see we had a very strong start to the year in January with 33% like-for-like profit growth, gross profit growth. This began to slow in February as China instigated their strict lockdown, and we heard about the first concerns around COVID as a potential pandemic. As the virus started to spread around the world in late February, and we moved to work from home in early March, in mid-March, many markets instigated lockdowns of their own, causing what we describe internally as a shock to the system for our business, and I think probably for the wider industry too. Many clients stopped spending altogether as they instigated their own business continuity plans.
From mid-March, we moved quickly to help clients adapt and adjust to what was going on, and Wesley and Pete will share a lot more detail on this in a second on how we modified our own service offering, creating new products to help clients transition in this difficult period. In March, we had 6% like-for-like gross profit growth and continued to generate free cash flow. As Peter said, that was a 19% like-for-like growth for the quarter. Given our strategy to be the service partner of choice for the leading platforms, commerce, and marketing technology companies, it's not surprising then that the shape and scale of our growth was similar to the likes of Google, Facebook, Amazon, and Adobe.
We do not have access to our financials for April yet, but anecdotally, just as we see stability in the programmatic media spend at MightyHive, as I illustrated on the previous slide, we also see stability and green shoots of recovery from the March trough in the content and the data and consulting practices too. Assuming the lockdowns continue to ease as we're seeing across Asia and Europe, and to a certain degree in the U.S., I think that gives us more confidence going forward. I'm sure we'll discuss this more in the Q&A, but with that, I'll hand over to Wes on the content side.
Thank you, Scott. Who led the digital transformation of your company? C-level role. To Scott's earlier points, now being impacted heavily by COVID, and that's speeding up the need to transition to digital, to digital experience, to digital content, to digital consumer journey thinking. We have an interesting quote from a client yesterday that I think is reflective of what's happening. His words, "My roadmap until 2024 has been compressed to 2021." Things need to happen now, which means digital transformation to an extent is moving from the important but not urgent category on many roadmaps to the urgent category, which also, I think, lines up well with our proposition to market. It sort of makes urgency the most important thing, which is definitely what we are delivering. If we go to the next slide, doesn't mean we have seen no impact.
To Scott's earlier comment about the short, sharp shock to the system, we saw that in the middle of March. We saw some production budgets mostly move out of the month around film and experiential because that was no longer possible. We saw some very specific types of work delay, mostly around consultancy-related work streams that were happening in offices and those offices got shut down. We had a softer Q1 in APAC, but we are definitely seeing a bounce back there, which is very positive. I think some of our brands were hit harder than others, of course, some of our clients, but we're relatively lightly exposed to travel and retail. The impact, clearly definable and measurable. If we look at our months, and I know we have a few people on the call, so thank you for this.
It's been amazing to see the resilience and resourcefulness of our people around the globe. It was easy for us to move into this digital distributed way of working because we already operate as a single office and single P&L around the globe. That was our bread and butter to an extent. We heard some earlier comments. We suspect that will continue to certain levels and become the new normal in many cases. Lots of focus on our people's mental health. I think we've all been very positively surprised by the huge amount of productivity. Of course, we need to keep in mind that people are probably working more hours now, and we have to make sure this is sustainable. The next step here really is the commercial component.
That pressure on the roadmap of digital transformation, the pressure on digital ecosystems, means there's a lot of money moving into our space. I think if you would have asked us six weeks ago what our pipeline would look like, there was definitely some lack of clarity. Looking at it now, it's extremely strong. I think it's busier than it's been ever, and that's because a lot of money is moving from pretty traditional areas of the industry, like events and trade shows and business to business events, and it's moving into the digital space quickly. We've also been able to help a lot of our clients move even traditional budgets from broadcast to other types of creative execution, just because of the intent offering we have in markets.
We go to the next slide, I think this has been a key part of what we've done, to create that very healthy pipeline. It's been a very proactive commercial response where we connected, I think, about 150 people across the globe to really drive business daily in three areas that we're seeing in market and for our clients. The first bucket is really helping our clients solve the now. This was what initially happened mid-March for most of our clients. This idea that clients wanted to still do things, keep the machine moving. That meant what we call our COVID solutions for production, moving shoots to other countries, doing distributed shoots, helping them move experiential events to digital experience. There are some links here that shows the variety of things we did to solve now. The step after that was really helping our clients say different things.
I think it's almost a move from brand purpose to brand role and responsibility. How did you turn up during this time? Were you helpful? We're helping a lot of our clients be part of that in a really authentic, meaningful way, which is very exciting for our teams, of course. The next step is really the strategic steps, which I think the headspace is there now. I think the first four weeks, everybody was down in the trenches, really getting their heads around what was happening. We're seeing the headspace really spin up to start thinking about what happens next. I think we're ideally positioned to help our clients think about that. We also have a lot of thought leadership already out in the world. We were early there because a lot of our thinking lines up with what's happening today.
Which is really about leaning into digital ecosystem, combining data and content, reacting quicker, and acting quicker in general to consumer behavior. That's also reflected in a lot of the partnerships that we're going to market with the likes of Unreal and others. If we go to the next slide, we'll just call out a few of these things, and we even have a few quick videos to look at. If we look at solving now, I love this Nike example because if you talk about role and responsibility, this is a perfect example of Nike recognizing that, of course, people are stuck at home. That's not great for health and fitness. Within 48 hours, we were able to spin up white glove live streaming services for Kirsty, who's a professional trainer that Nike works with.
We're now streaming her training sessions once a week, every Saturday, with hundreds and thousands of people logging in, following along. That was literally something that was done in two days. It's now an ongoing program. I think we can spin up the video quickly and have a look. This takes about 60 seconds.
Welcome to the Nike YouTube channel. I'm Nike Master Trainer Kirsty Godso, and thank you so much for joining me. You can do it. Here we go. Last one.
That you'll use later for the light.
Right.
Yes, it's the tripod.
Something like this is going to stop you or it's going to cheer you along. You're going to be moving right now.
With that, we're pretty much done with that video. If we go back to the slide, I also want to call out a second video because I think it's not just a really interesting example of solving now. This is our own safe shoot studios. Solving now is very much about this idea that a lot of production was mid-stream and needed to be finished somewhere, or a lot of campaigns were planned and needed to be shot. We were able to support that with first of its kind safe shoot studio in Amsterdam, according to all rules and regulations around safety. This is also really hinting at disruption that the production industry is going through at the moment. A relatively traditional industry is now being disrupted every single day.
We're seeing not just different ways to shoot and produce, but we're also seeing different mindsets when it comes to budgets, travel, et cetera. I think we're ahead of the curve there. If we spin up this video, let's watch about a minute of it and then spin back to the deck. Thank you. Next slide is about saying different things, and again, the role and responsibility that brands and businesses have during this time. I think the Toyota work is a really great example. Our team was connected to the Olympic campaign. Of course, the Olympics have been delayed until 2021, hopefully. I thought this was an amazing example of quickly shifting tone and story into something that was about helpfulness, coming together, hope. That happened before a lot of the now heavily parodied COVID montage campaigns.
We were able to do this really quickly because of the way we are operating, organizing around this client's needs. I think that's a great example of really being ahead of the curve. The second example here is the work we're doing with Facebook Boost. That's a program to help small and medium-sized businesses get more results using the Facebook ecosystem. I think we can all agree that's as important as it has ever been. Those were supposed to be very hyper-local events. We were able to switch that quickly to live stream events, and we're actually using our own prototyped live streaming software. We have a whole suite of software tools that have been built out of years and years of mixing physical experiential with digital experience. Those tools now mean we are ahead of many of our competitors and able to act very quickly to support our clients.
If we go to the next slide, this is where that headspace comes back. We're coining the phrase, "When the masks come off." This idea of we are now seeing countries and communities spin back up, economies spin back up into a new normal. Depending on where you land on the spectrum of this, we're saying there's going to be at least a short to mid-term, but potentially much longer-term user behavior impact, cultural impact. It's important for brands to understand what their role in that new space is. There are new traditions being born right at this moment, I think with completely different uses of digital channels and digital behaviors, and it's really important to understand how we fit in that space. We're supporting that at scale. We're doing very short, actionable workshops that really drive towards this idea of zero to one digital transformation.
Again, I think urgency beats the traditional consultancy model. These changes don't happen in PowerPoint slides. They happen in projects, they happen in process, they happen by the people you put to work. We're seeing that really resonate with our clients across the globe. With that being said, I'm going to hand over to Pete.
Thanks, Wes. Hello, everyone. This is Pete Kim from MightyHive, and I'll be talking about S4's data and programmatic practice today. First and foremost, we're pleased to report that following the early actions that MightyHive and indeed all of S4 took on the health and safety front for our employees, we've had very, very low rates of infection. As of this recording, we are tracking exactly zero confirmed cases worldwide for MightyHive, which is just absolutely fantastic news. On the business front, broadly speaking, I would say that from the media perspective, we've seen mixed results across the various verticals, varying in the ways that most people would expect. The more heavily impacted categories reduced expense in some cases very radically, and in other cases, showing signs of even acceleration.
Although media has been a little bit of a mixed bag on the digital transformation and data fronts, we've seen strong upticks in business. I think that is just a very, very good example that we can report that follows the general theme of the COVID-19 challenges accelerating transformations and trends that were already going to occur. If we move to the next slide, this is just a quick top sheet that introduces our next few slides. This is basically the cover sheet from the client materials that we sent out trying to assist our clients in trying to figure out what to do inside of the COVID-19 crisis, specifically recommending that they take action and build resilience. As you move to the next slide, you'll see that basically, broadly speaking, our short term recommendations are as follows.
We really kind of divide this into two parts, immediate actions and becoming more efficient. for the immediate actions, there's three subcategories that we look at by various verticals that the essentials like the food and healthcare categories, treats and postponables like in-home entertainment and similar services, and then heavily impacted verticals including luxury goods and restricted areas like travel. for those in those various verticals or in those groups, we'll see that the essentials should maintain the course and continue to advertise and attract new customers in this time. For treats and postponables, it's a bit of a middle course, really monitoring the spend and the results from these as quickly as possible and adjusting where necessary. for the luxury and the restricted categories, pausing and assessing their strategies as the new reality starts to take shape.
Regardless of those immediate actions, we do believe that everybody should become more efficient in these challenging times. We have many ideas around saving time and automating manual labor, reducing wasteful overhead, and prioritizing customer insights and loyalty. From there, longer term, the fork that you see in our diagram represents the unknown shape of the economic recovery. We look here between what to do in a rapid recovery or what to do to survive a longer downturn should that happen. We're working hard every single day to make detailed plans with each of our clients based upon these things that are listed here. If we move on to the next slide, you'll see some of just the specifics and just a sample of projects and services that we've created to assist our clients.
Everything from the COVID-19 command center, which really speaks to our clients' needs to get actionable data in a timely manner in order to allocate spend and really measure results quickly. A media platform overlap review, which just hammers on the point of transparency in the technology costs and what's going into working media and things like that. We're pleased to see that yesterday there was a report released by the ISBA, the Incorporated Society of British Advertisers, that talked about a lot of the sort of trends and issues that we seek to assist our clients with every day, including media quality review and others. Cost waterfall analysis, once again, is all about the "ad tech supply chain" and how you can gain transparency and eliminate waste and ad spend.
as we go through some of these brand sentiment analysis, trend risk analysis, all of these things, once again, are just examples of trends that were present previously, but just gaining even more traction now. as we start preparing for growth, we see these three actions down below, which really kind of focuses on first-party data collection and review. Even in the midst of COVID-19, advertisers continue to struggle with other more niche-y kinds of events that happened recently, including the death of the so-called third-party cookie. with that, the third-party data ecosystem remains challenged, and first-party data has become more important than ever. assorted other things like analytics and IP platform reviews and media platforms trading, all very, very important. On the next slide, we can see just something that we're particularly proud of that we just mentioned on our last slide.
We'll take a quick deep dive into one of these offerings, our COVID-19 command center, which demonstrates not only the specifics of one method in which we are helping clients, but also demonstrates the speed and the agility which S4 can bring, which we can use to bring innovative solutions to bear during even the most challenging times. Basically, it's exactly what it sounds like, just a dashboard that helps people to make better decisions during these times. We will go ahead and join data sources from all different types of advertising-related data sources and then bring in multi-touch attribution models that accounts for interaction between these channels and then create the dashboards. If you take a look at how long these things take to acquire and the cost, you'll see that they're very affordable and that we can move very, very quickly.
In four to six weeks, we've gotten these up for a limited cost, and the outcome is really just a situation report that has proved invaluable for the clients that have been assisted by these things. It brings us now to the next slide, where we talk about a case study where our client, Mondelēz, who announced just absolutely stellar quarterly results the other day, and we're very proud of the work that we've done in powering their advanced advertising analytics agenda. Really what they wanted to do is very simple. I think it's been a holy grail for many advertisers over the last few decades, and that is just to understand exactly what is happening and to measure the results of their advertising efforts.
Together with Mondelēz, we put together a plan to generate these new insights and to really move it from the world of PowerPoint, as Wesley would say, and into the world of actual effectiveness and reality. We moved data from silos and combined them and cleaned them, put out new taxonomies, and did all of the maybe not so sexy, but ultimately critical work in order to get this done, and the results speak for themselves. + 20% ROI in their media and their creative, and it was just absolutely fantastic example of how clients can seize the moment and prepare for the future.
Finally, we'd like to announce today that in our efforts to support our clients for digital transformation during COVID-19, we're going to be making one of our internal tools that we have used to great effect over the past few years, called the MightyDesk. We're going to make portions of this available free of charge to our clients. If you are at all familiar with the guts of online advertising, you'll know that ad trafficking or putting the actual creative units into a, what's known as an ad server, is one of the most critical, yet time and labor-intensive aspects in all of digital marketing. We long ago recognized the potential for automating these things. For example, some of our teams have saved 300 hours or more per month using these tools.
we're very pleased to announce that we're going to be making these internal tools available free of charge for the duration of the COVID-19 crisis to our clients. If any of them happens to be listening, we, A, will be reaching out with more information, but you can also just use the link below in order to find out more information on that. With that, I'll turn it back over to Scott. Scott?
Thanks, Pete. If we could go down to slide 34. Despite the challenges of COVID-19, we've continued to see significant new business wins, and that's both from existing clients via our land and expand strategy, which we've talked about before. That's from the likes of Google and Netflix and Facebook, HP, P&G, and Amazon, as well as others. On top of that, we've seen great new wins from new clients, too. We continue to see strong demand for our services around first-party data, as Pete was saying, anything around data strategy, data engineering, cloud service analytics. In Q1 in this area, we won significant assignments from the likes of FWD Insurance, TV Globo, Fuji TV, a European luxury brand, and an Asia-based global automotive brand.
Several of these assignments also included media, and we also won major programmatic in-house projects from a global CPG, a global e-commerce software company, a global automotive company, and a major U.S. hospital group. In-housing, alive and well. In the content practice of our business, we expanded many of our existing relationships and gained particular traction around our embedded and hybrid models with our larger clients. We also won new assignments from a global pharma company, Quibi, PayPal, Twitch, Dole Food, AkzoNobel, and Cemex. Now, when it comes to engaging in pitches, we're pretty selective about participating, given they're often long, drawn-out processes, and they're driven by procurement. We're fortunate enough so far to have had a supply constraint and not a demand constraint on our resources. That said, we do continue to have a very robust new business pipeline.
While we note comments elsewhere in the industry that overall pitch activity has maybe declined, we are busier than ever and involved in some potentially game-changing pitches for us. One for a European automotive company, for two global pharma companies, a global FMCG, and a global electronics company. That's across the full gamut of data, creative content, and programmatic services. Next slide, please. This slide just illustrates the balance of our client portfolio. Just to be clear, this is based on 100% of our Q1 2020 like-to-like revenue base. We discussed this a little at the preliminaries, but we feel with such strong exposure to the tech sector and many of the clients we've mentioned today, this gives us an excellent base for growth and resilience. We have minimal exposure to some of the worst hit sectors, such as auto or travel, or retail, or fashion.
even there, we've seen some strong work from the likes of Nike and Toyota, as Wesley mentioned earlier. Next slide, please. Go down to 37. On the merger front, we were delighted to welcome Bruno and his 300 colleagues at Circus to the S4 MediaMonks family in January. Circus is the leading digital creative agency with offices across Latin America, Los Angeles, and Madrid. They're highly awarded. They've got a fantastic client list, including Google, Netflix, Spotify, Twitter, and Uber. They've already partnered with MediaMonks, Firewood, and other parts of S4 to great success. As Peter mentioned at the top of the presentation, our priority, certainly in the past couple of months, has been protecting our balance sheet and liquidity, and that continues to be the case.
However, we do have a modest pipeline of mergers, in highly strategic areas with a couple of small data and analytics specialists, which is an area we see continued strong client demand, and a creative agency in Germany, which is one of the last remaining geographic gaps in our portfolio, and these are all at various stages. On top of that, we continue to talk to interesting agencies in areas like data and analytics and e-commerce, which are all seeing increased demand as a result of the current crisis. With that, I'll hand it back over to Martin to give you the summary.
Thank you very much, Scott. Thanks, Pete. Thanks, Wes, and thanks, Peter. Just to summarize on the last slide. Our people, thankfully, as Pete and Wes both said, are safe and mostly working from home. Some of our offices in Asia Pacific have reopened, and we're looking forward to the loosening of the mandatory lockdowns in various jurisdictions. Again, we managed the transformation to home, where the office became home, I guess. We managed that well because we have digital native peoples, not even digital first. The second point is we continue to lead the industry in top line growth and EBITDA margin, and we think this will continue to be the case. We have a strong balance sheet, and we stress tested our liquidity and cash flow, not just in Q2 and Q3, but beyond into Q4 and 2021.
We just issued our annual report digitally, and the physical copy will be available shortly for share owners and others. Going through that process, obviously, given COVID-19, we've had to stress test well beyond the current crisis. We took early cost action, as Peter said, early on as a waterfall of moves, starting with non-essential business expenditure, travel, which obviously was much less. Started to look at our office property and freelance consultants. We've retained flexibility. We've been very cautious about changing the people pattern in our business. We think we'll have an opportunity as, for example, the holding companies cut their headcounts by 10%, 15%, maybe even greater percentages. We think that as the lockdowns ease and the economy picks up, there'll be some very interesting opportunities for us to expand our people force, our workforce. We're retaining as much flexibility as possible.
A good example of that is in Australia, where our Adobe specialists could not work on premise with clients. We took the decision to retain them as they are in such short supply and scarce resource for the upturn. We're already starting to see in Australia some more opportunities. I just saw some results from Australia today would indicate the position is better there than we expected. Favorable client, as Scott pointed out, for growth. Half of our client base, and what you saw there was 100% of our revenues, not a snapshot of a portion of it. It's 100% of the revenue base, and over half of that is in tech, where certainly budgets have been more resilient. Even on the CPG side, we have clients in the pharma and retail side. We have clients that continue to expand, usually because of their online capabilities.
Very healthy new business record and pipeline. Our pipeline is running roughly at the same levels as last year. Just so you're clear, we monitor our pipeline very carefully. For example, at MediaMonks, they know precisely what more they have to do to make their budgets or their revised forecasts, and our pipeline is as full this year as it was last year. The trends, as we've said, are towards increased digital transformation. One benefit, if there are any benefits of COVID-19 and the burning platform that it represents, one benefit is that digital transformation will accelerate considerably. In talking to journalists today and the media today, it's quite clear that the media industry is being impacted very heavily by COVID-19, and we're going to see significant digital acceleration, not only there, but at the consumer level as people shop online, educate online, and communicate online.
last but not least, at the enterprise level, where managers, Pete and Wes and I had a call last night with about a dozen CMOs and chief digital officers, and the interesting thing was everybody to a man and woman said senior management now was escalating, as Pete mentioned and Wes mentioned, escalating the time frames for digital transformation. I think we will see major accelerations there. COVID-19 also, the burning platform accelerates adoption of our model, which is a first-party data model, deployed to develop digital advertising content and pump it out programmatically with heavy data and analytics. just to give you an example of that, it is interesting what P&G are doing, or Marc Pritchard is doing at P&G in establishing a data-led model. in a way, he's taking the Netflix model and applying it in the CPG category.
Finally, we're ready for recovery. I think this is a really important point. Whatever the shape, whether it's an L, a U, a V, a W, a reverse, whatever your predilection is, we'll be ready for the recovery, which we think really starts as these lockdowns ease, already easing, as we go through May and into June. We want to be ready to come out of the traps fast, as fast as possible, as the lockdowns come off. Thank you very much for listening. Over to you, operator, for the Q&A. Thank you.
Thank you. If you wish to ask a question, please press star two on your telephone keypad. That is star two on your telephone keypad, and there may be a brief pause while the questions are registered. Okay. The first question is from Michael Levine from Pivotal Research. Your line is now open.
Terrific results, guys. I think the level of detail is extremely helpful. Two questions. One, obviously, you guys have a robust M&A pipeline. I'm wondering as a result of these tragic economic dislocations, are there particular asset classes that you think will be more likely available for sale versus not? I guess the second one is just given how disruptive the change has been, and I know a lot of the S4 value prop is helping migrate some degree of in-housing by companies. Does that get accelerated as a result of the COVID crisis, or are people a little bit less willing to take risk and make big changes in the interim? Thank you so much.
Thanks, Michael. Maybe Scott, you love to talk about in-housing, so why don't you sound off about that, maybe Pete can back you up on it. Go ahead.
Sure. I love nothing more. Thanks, Michael. Appreciate the question. On in-housing. Yeah, absolutely, we continue to see interest in that accelerating. I think one of the wins we had in Q1, which was an in-housing win for MightyHive, was for a large hospital group in the U.S. You can imagine if a large hospital group's focusing on in-housing, there's not really any excuses for anyone else. I think you have to bear in mind that in-housing is not a binary choice, so it's often misreported in the trade press as you have traditional outsource model and then 100% in-house model, and that's not really the way we see it. We see it as a spectrum with different engagement models, particularly the hybrid and embedded model, that Firewood and other parts of our business are very good at in the middle there.
We engage across that full spectrum, and we're certainly seeing lots of demand for that. The reasons for that are really around speed and quality and value, transparency, taking data in-house, and privacy. None of those factors have disappeared. If anything, they've become more important in recent times. I think there's been some commentary from some of the holding companies that they're seeing less of it, but the reality is it's like asking turkeys if they see much demand for Christmas. They're not the ones that deliver the service, and they're not the ones we compete with. We're primarily competing with other specialists and consulting companies when we win this business. Pete's done a great job of, and his colleagues, winning some good assignments this quarter, and I know he's in conversations about several others. I'm sure he can talk more about it. Pete.
Yeah.
Pete.
Yep. Thank you for the question, Michael. I would say that, just to chime in on and in full agreement with all of Scott's comments, we are seeing an uptick in the amount of interest that we're seeing in in-housing. It's for all the reasons that we have been talking about on these calls for the past few quarters, which is the need for speed and agility and the need to both use data and protect data. As business events have accelerated, I think that people, more than ever, and companies more than ever, recognize the need and the value of being agile. They also need to do that in a way that maximizes their own insight and the availability of their own data.
we definitely have seen an uptick for those reasons that have just accelerated the trends that we saw that were in progress anyway, kind of hitting on a specific example of the broader theme of acceleration. We also see that in some places, that while the uptick in interest is there, certain industries are a little bit more challenged financially than others inside of this. I would say that there's lots and lots of interest. We'll see exactly which industries have the financial wherewithal or even just the management attention to bridge that gap. generally speaking, I think it's fair to say that we're seeing more, not less.
Okay. Thanks, Pete. Thanks, Scott. On your M&A question, or just before getting on that, just interesting that Bob Liodice talked about in-housing the speech for the ANA just, I think, last night or yesterday, saying that in-housing was accelerating. I think this is linked to the need for marketers to take back control, particularly post-2016, when the walls in the walled gardens started to grow even larger. The walled gardens started to get more closed. It's been exacerbated by the third-party cookie decision by Google and by Apple. First-party data and that Holy Trinity model and in-housing, I think really become a thing that most CMOs will be experimenting with thinking about and implementing.
On M&A, Scott can maybe expand a little bit on, you've been through what we're looking at, but I would just the fact the credit markets are tougher now and the spreads and the willingness of banks to lend has been curtailed. Except interestingly in China, where the banks really have not extended. There's been no fiscal stimulus or furloughing in China, which I think is sort of interesting, a different way of dealing with it. I don't think given the liquidity of private equity, I was intrigued that Airbnb managed to raise $1 billion. I think Silver Lake were a participant in it. At the same time, Silver Lake said they were going to raise a new fund of $16 billion-$17 billion.
Bain Capital came out with a figure of eight, I think it was GBP 834 billion of dry powder, effectively, the private equity had. That's without any gearing or leverage. My view is that prices probably will not come down significantly because this recession has taken place at warp speed, and we've seen recoveries in the market to say two-thirds of the fall also at warp speed. I just don't get the feeling that there's going to be much respite. Private equity clearly have got some issues to deal with their current portfolios, but I think they will be aggressive buyers. There might be a temporary slip in pricing. We've noticed one or two things like that, not in the smaller category that we're looking at.
I have to emphasize that our approach is not something that will prejudice our balance sheet in any way whatsoever. We're very focused on liquidity and the strength of our balance sheet as we go through these difficult times. I think on M&A, Michael, there are still targets out there. I don't think the pricing is going to vary much. There might be a little bit of a dip, but not significantly in the short to medium term. Next question.
Okay. Our next question is from Becky Lane at Jefferies. Your line is now open.
Becky.
Hi. Two questions from me, if that's okay. The first is, given the pace of change in the backdrop at the moment for clients, are you seeing a shift from long pitch processes to shorter sales cycles based on project? If so, does S4's structure enable it to take advantage of that? The second question I've got, which might be directed at Pete, the incremental interest you're seeing surrounding data strategy, is that mainly from clients who you haven't engaged with on data before, or is that from existing data clients looking to do more? If it's the former, are these mainly new clients to S4 or introductions from other parts of the business?
Okay. Do you want to maybe, Pete, deal with that, and then Wes, you can come back on the long pitch. Are pitches taking longer or shorter? Pete?
Sure. It's both. We're seeing increased interest in data across the board, and so I think that's all driven by a general notion that as things accelerate, if the world of advertising and marketing was a minefield before, then we are now currently sprinting through the minefield, making the value of insight and data even more pronounced than it has been. We're seeing interest and upticks across the board from existing clients, as whether they be at MightyHive or from our colleagues at S4 and MediaMonks, or brand new, net new clients that we're talking to for the first time and coming in. Interestingly, sometimes it's even easier for us to come in through the "data door" than it is through the media door. It's just very gratifying to see that third leg of the Holy Trinity really start to take shape and come to life.
Okay, Wes, do you want to talk about the pace of pitches?
Higher than I've ever seen it. We're honestly seeing a new industry be born, digital as a destination. How do you shortcut the physical experience of retail, events, business to business selling? How does that move to digital channels? For many clients, that's a huge gap in their current ecosystem. The pitching timelines on digital transformation are going down from six months to literally weeks. I have an example of a client I had been talking to for about four to five months on a digital transformation project, and we literally closed it on a call with four slides just to get going. I think they're shortening partly because there's a whole new industry being born right now, and those decisions need to happen quickly because the dates for all these events and physical events are already out there.
the second part is digital transformation, to my earlier point, has gone from important but not urgent to it needs to be done today. shorter and more active pipeline than I've ever seen.
Is that okay, Becky?
That's great. Just to elaborate on the last part, do you think that S4 is ideally positioned in terms of agility to actually be able to deliver on those shorter time frames versus a lot of the peers?
Well, I think that's our modus operandi. I'll talk for S4, I think for both Wes and Pete, I think it's our modus operandi, whether you're talking about faster, better, cheaper, or what Lanya and Juan Zambrano at Firewood would call speed, quality, value. I think that plays to our sweet spot. Wes, do you want to add to that? Pete?
Sure.
Yeah.
I'll go. Go ahead, Wes.
Oh, sorry, Pete. I was just going to say it's literally our proposition to the market. I think what's interesting is I think some of the market is moving there quicker now because everybody gets that traditional consultancy doesn't work if you're looking at 12 to 18 to 42-month projects. The urgency is key. That's our promise to market, and I think clients are moving towards that promise quicker because of this.
just from my perspective, to pile on with a slightly different spin, I would say, yes, we are ideally structured for this, and in many ways it's gratifying to see this because hopefully we're seeing an end to a world that takes year-long RFP processes. I mean, who's got that kind of time? as the pitch cycle has gotten faster and faster and faster, it not only sort of suits our mode of working incredibly well, but it's also a relief because we thought that this is the way it should have been in the first place.
Okay, Becky?
Yeah, that's really clear. Thank you.
Thank you. Operator, any more questions?
No, that's it for the questions today. Thank you.
All right. Okay. Thank you. Thanks, Michael. Thanks, Becky. Thank you, everybody, for joining us, and we look forward to seeing you. I should add that our capital markets day that we postponed because of COVID and the physical distancing restrictions, we postponed that in April, that we're rescheduling that. We'll do it virtually because we think there will be sufficient restrictions that would make it very difficult for us to do it physically. We're planning a date in June, and Scott will be sending out details of that to investors, analysts, and anybody else who's interested for June, and we'll be doing that virtually. Look forward to seeing you then. Until then, everybody stay healthy and safe, and thanks for listening.
This now concludes today's call. Thank you all for joining. You may now disconnect your line.