Hello, and welcome to the S4 Capital Q1 twenty twenty Trading Update. I will shortly be handing you over to Sir Martin Thorold, who will take you through today's presentation. There will be an opportunity for Q and A later in the call. So now over to you, sir Martin.
Thank you very much. Thanks, for the introduction. Welcome, everybody, to our q one trading update for 2020. I'm joined by, Peter Rademacher, our CFO Scott Spirt, our chief growth officer, and we thought it would be a good idea for the people that are involved in in our operations, Victor and Nat and Wesley Tahar from MediaMonks, our content practice, and Pete Kim and Chris Martin from our programmatic and data analytics practice to join us as well to give you a a full idea of what's what's been going on in q one and what we think will go on beyond q one. I I should start by by saying that most importantly, most, if not all, of our 2,500 people, a lot of whom I think are on this call this morning, have have performed extremely well due during this terrible crisis that we've been going through through COVID nineteen.
And I want to thank them all for their efforts. And, thankfully, we we've been actually only marginally affected so far by COVID in terms of COVID nineteen, in terms of infections, and the the implications from those infections and and illnesses. So I want to say first that we're we're very thankful for that, and secondly, to call out the efforts of all the frontline workers, who've made our lives much more healthy and much safer, during this crisis. With that, I just want to make a few outline comments. So we've had a reasonably good first quarter in, obviously, very challenging circumstances for our clients, and our people have responded extremely well, by working from home in extremely effective way.
I have to say that that's not something new to us. It's something that, we've been used to as digital natives, in the industry. This is something we've been used to. So working from home was not really a wrench or a change, but neither was twenty four seven working. So we've adapted very strongly to it.
I will also add that that we're we're probably a little bit more optimistic than most about the pattern, of, of exit from these lockdowns that we've seen mandatory lockdowns that we've seen in most jurisdictions. Obviously, q two is going to be an extremely difficult quarter for our clients, but we expect that q three, we will see, an improvement, a relative improvement, I stress, from q q two and in q four, q three and q four and into 02/2021. So we would tend to be more in the v shaped school than the u shaped or w or l shaped, although there are going to be some sectors as we'll go into, which will suffer more than others and will take longer to adjust. For example, IHG and IAG reporting this morning in the travel and hotel industry, are are probably examples of that. So with that, I'll I'll turn over to Peter who will be dealing with the trading update to Scott who will be dealing with the trends, and Victor will take us through what's been happening with our content practice at MediaMonks.
Pete will take us through Pete Kim will take us through our data and programmatic practice at MightyHive. Scott will then come back to talk about clients and our merger activity, and then I'll come back with the summary and outlook and take you through take the people on the call through Q and A. So firstly, over to you, Peter.
Thank you, Sir Martin. Good morning, ladies and gentlemen. I'll run through the financial performance of the group over the first quarter. And what we have seen in the first quarter is a continued strong growth despite the early impact of COVID-nineteen. And you may have read it in the press release, but what we've seen is growth percentages in January of 33%, February 21% and in March of six percent.
So there you see also the impact of COVID-nineteen on our financial performance. And if I look at Q1 as a whole, the reported revenue was up with 3073% to GBP 71,000,000, and our Q1 reported gross profit was up with 85% to almost GBP 61,000,000. More importantly, given all the mergers we have done and finalized last year, A more relevant comparison, I would say so, is the like for like comparison. And Q1 twenty twenty was up compared to like for like constant currency revenues with 17%. And on a gross profit basis, our most important measure was up with 19.
And then again, like I just said, in relation to the mergers we have done, mainly pro form a on a sort of full basis, including all the acquisitions for the full quarter of 2020, our pro form a revenue was up 19% and our gross profit 22%. And all regions contributed, although we have seen impact, of course, in different stages of the quarter in China, in Europe and in The U. S, but all regions have shown strong growth. And our cash flow, that remains very strong with net cash balances positive on most of the period. And on average, to show you an average of the first quarter, we have operated with a €16,000,000 net cash position consisting of basically €91,000,000 cash on our balance sheet in average of the first quarter and approximately EUR 75,000,000 of term debt and revolver that the company carries.
And maybe most importantly, as Martin just mentioned it already, our 2020 full year, what we are expecting is a sector leading double digit growth on a like for like revenue and gross profit basis with reasonably strong EBITDA margins. Flipping to the next page, you see our practices, our revenue and gross profit by practice, some of the numbers I just addressed in the previous slide. But here you see it also on the practices split out, meaning that content on a reported basis grew with 89 in the first quarter and programmatic with 32%. And that means that also content is even relatively stronger than last year in the performance because it consists of 80% of our total revenue, where programmatic contributed 20%. On a like for like basis, like I just mentioned, the 17%, if you split that out, that's content grew with 17% and programmatic with 18%.
And on a pro form a basis, again, for the full quarter, including all the mergers for the full three months, content grew with 20% and programmatic with 18% and total revenue as a result of with 19%. On a gross profit basis, content grew with 112% on a reported comparison, especially as a result of that most of the five of the acquisitions or mergers were done in the content practice, grew with 112%, where programmatic grew with 32%. On a like for like base basis, content with 19% and programmatic with 17%. And on a pro form a basis, content grew with 23%, where programmatic grew with 17%. And flipping to the next page, you will see our gross profit by geography.
As we've seen also in last year and also in the preliminary results of 2019 presentation, Americas is our most that's North And South America, our biggest regions contributing 73% of the total gross profit, where EMEA contributed 18% and Asia Pacific 9%. And the growth, what I referred to in the first on the first slide, Americas on a reported basis grew with 96%, where EMEA grew with 45%, and Asia Pacific was 118. And again, more relevant in in with all the with all the mergers executed on a like for like basis, Americas grew with 21%, EMEA with 11%, and Asia Pacific with 21%. And finally, on the pro form a basis, Americas grew with 24, where EMEA grew 11% and Asia Pacific was 23%. Going to the next page, a short summary of our precautionary actions taken to mitigate COVID.
What we've done is although our growth is still very strong with approximately 20% growth compared to last year on a like for like basis. We took these precautionary measures because, as you know, from last year, our top line and gross profit lines were up over above 40% and now at the 20% level. And as a result, we immediately took our precautionary measures on cost and on liquidity. On cost side, basically, as a sort of waterfall from the top to the bottom, we took a 50% reduction in the compensation for the executives and the board as of April one of this year. And we have been reducing and terminating office leases in a number of cities, an act that which is also accelerating the integration.
What we have seen also from our people, as Sir Martin referred to it, it was, I would say, almost flawless through working from home methodology in the past quarter, that we have also seen that also going forward that we expect that working from home in the various territories will remain for at least couple of months. And we have also seen that a lot of our employees already indicated that going forward that the mix of working from home and in the office will be different going forward. And as a result, or of where possible, we we immediately took the measures to to reduce office leases because of working from home or using the other offices practices or the companies in the various cities to further integrate the company. On other OpEx reductions, we did, of course, travel, which came sort of naturally, but also on our entertainment, marketing, promotions and bonuses. All these measures were taken by drilling down in these costs and basically setting certain targets and agreeing on cutbacks in costs, again precautionary, because we were still in a good growth position, but basically gearing up or buckling up, as I would say maybe for Q2 and Q3.
And hiring reduction and scaling down on the numbers of freelancers was one of the measures we took, and adjusting people to client demand where necessary. It was very limited, but where could or needed to, we took these measures. And with the current measures on the above, the impact from 2020 will be around 18,000,000 sterling relative to the budget that we have prepared for 2020. Going to the next slide on the precautionary actions. Again, precautionary actions to mitigate the COVID-nineteen impact on liquidity.
We've drawn down our revolver early March in order to not from necessity that we needed the liquidity, but basically to be on the safe side because, as I mentioned in the first slide, in average, we've been operating with EUR 91,000,000 cash on our balance sheet and in total EUR 75,000,000 debt in term loans and revolvers. We're monitoring cash of all entities on a daily basis. We have, of course, intensified everything in relation to cash balances and receivable collections in order to get in as much as possible of our cash flow. And the good thing is, and Scott will touch upon that also later in our client split of per sector, that in the first quarter, approximately 53% of our revenues came with the big tech companies platforms, and they maintain, at least also do the others, but especially you can see from the tech firms, they maintain their payment terms quite strict, so our cash inflow is still very strong. Although we applied for it, no government loans so far.
Basically, what we make use of in the various territories, because every territory has different rules and regulations, but mainly we we took advantage in a way or took the possibility of the delays in tax payments where we where we could. And and finally, one of the things these are the main things main measures we took. We've been waiving our bonuses for the execs and exchange that in shares with a lockup for two years in order to improve or maintain our liquidity position in the company. Scott, I think that was my part. So I would say over to you.
Great. Thank you, Peter. So thank you, everyone, for joining. So whilst the impact of COVID nineteen has obviously been profoundly negative on our health and the economy and employment, as countries start to follow China's lead and and emerge from the lockdowns, I think it's important for us to consider what that new normal looks like for our consumers and for our business and for that of our clients. If you could go to the next slide.
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.
And I think many others have concurred or even done further because we see consumers and brands rapidly changing their behavior and their consumption patterns. I know
in my own family, my mom's now, raving about the benefits of Tesco delivery, and and my dad's worked out how to FaceTime my sister and me at the same time. But it's not just our parents. I'm sure all of us on this call can look at our behaviors over the past month or so, see the same accelerated digital trend. Even those of us with kids who already spent most of their waking hours looking at screens are doing even more online. So I'm gonna run through a few examples, where we're seeing growth opportunities, for our clients and for ourselves, both now and I think in the future.
So the first one, we can go to slide 11, is streaming services. So, obviously, with all of us stuck at home, this has been a real boon for the streaming entertainment, industry. One of our large clients, Netflix, added 15,800,000 subscribers, which was more than double the the expectation and represented growth of more than 22% year on year in the first quarter. And another one of our clients, Spotify, gained 6,000,000 paid subscribers. As they said, listening habits were changing due to coronavirus.
We move to the next slide. Live events have all been canceled. So whether that's sport, music, or b to b trade events, they're no longer happening given social distancing. But that hasn't stopped the industry. So this is an example of Travis Scott, the hip hop star, who performed live in Fortnite, is which a game, mobile online game.
Over 27,700,000 unique players, in game participated in that event, far more than, his entire tour, world tour that happened last year. Consumer and trade events alike are starting to go virtual, at least for the foreseeable future, and we're helping a number of clients work through the implications of this. Next slide is gaming. So gaming and esports were already on the rise, but this was underlined when during the the middle of this pandemic, BMW announced that they'd sponsored five of the world's leading esports teams. Another client of ours, a new client, the Twitch division of Amazon, has seen activity explode during q one.
Next slide is ecommerce. So our client and partner, Adobe, released a study recently that showed, e grocery sales doubled between March compared to the previous eleven days, which is when the lockdowns really started to kick in. And we've also seen from our client, Amazon, they've hired an amazing 175,000 additional employees in q one to handle the surge in orders that they're experiencing. Next slide is learning. So any of those on the call with kids will be familiar with this, but, UNICEF has estimated 1,600,000,000 young people are learning from home, lost schools, universities are are shut down.
Google announced on their results that a 100,000,000 students and educators are now using Google Classroom, which is double the number from the March. Next slide, social networking. So our client and partner, Facebook, saw messaging volumes increase more than 50% and voice and video calling more than double across Messenger and WhatsApp. And another client of ours, TikTok, is celebrating being q one's most downloaded app globally with over 2,000,000,000 in stores now. The final slide in this section, is around work.
So, obviously, we're not having a a live quarterly event in London. We're all joining this by call, and that's probably become very usual for all of us now. Our work's been transformed in the last month. Our largest client and partner, Google, said that Meet, their online comms product, is now adding roughly 3,000,000 users each day, and has seen a 30 fold increase in usage since January. We're all obviously now familiar with Zoom.
We've increased their users from 10,000,000 in January to 200,000,000 in March. So these are just some of the trends that we've seen, in consumer behavior and enterprise behavior, in the past month or two that have really been a giant leap forward for digital transformation. There are clear winners emerging in these categories, and many of them are the disruptive tech firms like Google, Facebook, Amazon, Netflix, Spotify, etcetera of the world. But it's also obvious that many of the so called traditional brands can and need to adapt and take advantage of this switch in digital behavior. So certainly, many of these lockdown inspired peaks in behavior and consumption will probably receive a report if we're allowed to go outside and reengage with the physical world, but these leaps forward will remain with us.
And the conversations we're having with brands and clients are all around how they can accelerate their own digital transformation plan, how they can reach more consumers through digital marketing, and they're looking for partners like us to help them get there faster, better, and cheaper. And that makes us feel confident that we're very well placed for a recovery. Next slide, 18. That said, AirScore's performance is clearly not immune to the effects of COVID-nineteen, and we've seen significant volatility in the past month or so. And this makes any attempts at guidance very difficult, as Peter and Martin have said, but we did want to be as transparent as we possibly could with you and give you some impression of what we're seeing and consequently how we feel about the next quarter.
So this slide illustrates an internal sales force report, which is a comparison between 2020 at the top and 2019 at the bottom for the global media volumes flowing through Mightyhive Systems on behalf of its clients. Now given the scope and shape of their business, it is skewed to the North American market. So as you can see, and it's really about the shape of these graphs that you need to look at, until mid March, the shapes are almost identical, albeit with higher volumes in 2020 given mighty high strong year on year growth. Then in mid March, the spend drops off suddenly. There's a peak.
And in 2019, you can see the typical end of quarter budget flush, which is the circle. This simply didn't happen in March because that coincided with lockdowns and the peak panic around the COVID nineteen pandemic. Now on a more positive note, we have seen stabilization in spend since early April, and this is very much in line with the commentary we heard from Facebook and some of the other digital media platforms in their earnings reports, last week. We're seeing spend levels in Patent Hold steady at similar levels for the same period in 2019. If we go to the next slide, '19, if we look at it from an export perspective, as we as Pete Peter already said, we saw a strong start to the year in January with 33% like for like gross profit growth.
Now this began to slow in February as China instigated a strict lockdown, sending out ripples of concern across Asia and the world. As the virus started to spread around the world in late February, we moved to work from home in early March. And in mid March, many markets instigated lockdowns of their own, causing what we described as a shock to the system for our business and, I think, the wider industry. Many clients simply stopped spending altogether as they instigated their own business continuity plans. In mid March, we moved quickly to help our clients adapt and adjust to what was going on, and Vik and Pete will share more detail in a second on how we modified our own service offering, creating new products and services to help clients with this transition.
In March, we had 6% like for like gross profit growth and continued to generate free cash flow with, as Peter said, 19% like for like gross profit growth for the quarter. Now given our stated strategy to be the service partner of choice for all the leading platform, commerce and marketing technology companies, it's not surprising that the shape and scale of our growth was similar to the likes of Google, Facebook, Amazon and Adobe. We don't have access to our financials for April yet, but anecdotally, just as we see stability in the programmatic media spend at Mighty High, we see stability and green shoots of recovery from the March troughs in the content, the data, and the consulting practice. And assuming the lockdowns continue to ease, as we're seeing across Asia and Europe and to a certain degree in The US, this gives us much more confidence going forward. I'm sure we'll discuss this further in the q and a, but with that, I'll hand over to Vic, and he will cover, how the content practice has been developing.
Hello, everyone. Thanks for your time. Thanks, Scott. It hasn't been an interesting few weeks. Like Microsoft and Google and many other digitally focused companies explained already, these are the weeks that digital transformation accelerates.
We see marketing and IT working together more closely, sales and brands, online and offline coming together. So we could definitely say that COVID speeded up digital transformation at many of the businesses and brands that we work with. Next sheet, please. So we've seen a couple of things happening on the content side. First of all, our offices in APAC, predominantly China and Singapore, had a pretty soft Q1 because of the Chinese New Year followed by the lockdown.
And from the March onwards, same as the trend that Scott just explained, we experienced a bit of a shock to our system by cancellations of work. And especially in the work that's tied to production that involve a lot of people. So in film, in experiential, we saw some influencer projects being canceled. We had some consultants in house at clients, but because of the lockdown, they couldn't enter the buildings. And we had some travel and retail brands that obviously spend less on advertising.
So that was the Q1 and the last two weeks March. On the mean side, we have 2,000 people working globally that we moved to working from home. And as Colt mentioned already, that went rather smooth. Obviously, we have the tooling, the digital mindset and the way of working already to work from home pretty efficiently. And this resulted in a low number of confirmed cases and we're now fully focused on mental health and productivities across the teams across the globe.
And most importantly, we needed to do things differently on the commercial side. So we're now six weeks in. We have a strong pipeline of COVID commercial opportunities. There's a lot of new work for brands coming in or work that was supposed to go to another partner. So we see a shift from live action shoots to more animation, from physical to live streaming events and especially a lot of movement from trade show to other solutions.
Next sheet please. So the commercial side has been extremely important and we've established three major things in order to keep our business healthy. So we've connected a 100 plus people sales team within S4 that get daily briefings and materials to support and they are supported by four pitch teams that can turnaround quick solution
creative.
We sent you the deck with seven different solutions that provided from how do you do production during COVID, how do you do virtual events, how you shoot film during COVID, how do I make my brand commerce in environment in two weeks and so on and so on. That got a lot of traction and we're proud to say that, and we will show that in the next couple of sheets, that we did already resulted in new work for HP, Nike, Toyota, Facebook, ABI to name a few. And lastly, so super important that those brands say something different. It's different time. A lot of people are spending their time at home and brands need to change their tone of voice accordingly.
And lastly, we're helping our clients with the strategic next steps. We're moving into a new reality, 1.5 meter distance society with no big events possible and every single country dealing with that in a different way. So what we're trying to do is connect with our partners like Adobe, Snap, Unreal, Google, YouTube, Forrester at the best possible way to create thought leadership on how that new reality is going to look like and how digital plays a role in that. Next sheet, please. So if we are looking at the solve now, we already done so briefed, fixed and produced multiple solutions for our clients.
One of the great things that we produced is a Nike program, and I want to show you two videos of that. So one is the Nike Edly program where Nike master trainer, Christy Godso, streams workouts every Saturday for an hour. So I urge you all to have a look at that coming Saturday. But now you can see a forty eight second version of it. Can we please play the video?
Welcome to the Nike YouTube channel. I'm Nike Master Trainer, and thank you so much for joining me. You can do it. It. We got a last one.
That you'll use later for the light. That, yes, is the tripod.
Many thanks for watching. Let me move on. So this is a great example on how normally Nike obviously is very active in gyms and works out and how we move it into the new reality by training from the trainer from their own apartment to your own apartment. Secondly, what I would like to show you is the medium owned safe studios. In around a week's time, we managed to to change the way how we work in all our studios worldwide.
So we have studios, equipment, directors, DOPs, everybody on set from a safe distance. We created a video that got a lot of traction, like how can we help brands shoot content during a time of COVID. So I would like to show you the video. It only takes a minute to show you how we organize that.
Okay.
Good. Thank you. Thank you for your attention. So this is what you just see is one of the first in the world's safe, hygienic, fully equipped studios where the client can call in remotely so they can just look at their work from their home. So moving on to the next slide, how do we state things differently?
We were involved in Toyota's Olympic campaign. Obviously, the Olympics are shifted to next year and even maybe further out. So what we've done, and we've seen that a big trend in instead of making a new campaign, how can we repurpose materials that we already made and make them into a new contact. So in this case, it is all about the ad needs that overcome obstacles in order to keep themselves fit and ready when the society opens up. On the other side, I would like to tell you a little bit about our Facebook work where we help train small and medium sized businesses how to boost their business by using Facebook in the best possible way.
It's all produced in Spanish and Portuguese for the coming two months where small and medium businesses obviously suffer a lot from COVID. So solve them now, say things differently. And lastly, my last sheet is how to move into the new reality. So we receive a lot of questions on what's next. How do we we do a few things to help brands dealing with upcoming months or maybe even a year to come, with social listening, expert sessions and we do a lot of virtual workshops with tangible outcomes in tone of voice, in digital platform choices, and and how to deal with the upcoming time and how to adjust your content and brands in order to keep in touch with your customers even when we live in a 1.5 meter society.
That's it from the content side. Please, Pete, go ahead.
Thank you very much, Victor. On slide 26, we begin our discussion of the data and programmatic practice. And broadly speaking, I'm pleased to report that from an employee health and wellness perspective, MightyHive and indeed all of us for has responded responded extremely well, taking the early actions move to work from home, working situations, and, that early action has paid off. And as of, this recording, we are tracking exactly zero confirmed cases for our employees worldwide, which is a belief indeed. From a business perspective, we have seen on the media front mixed impacts across the various verticals and industries that we serve along the lines that you may expect with certain industries that have been more impacted reducing media budgets, while others that have been less impacted degrading less or even increasing in some cases.
We have also seen in our two other lines of business, digital transformations and data, upticks in business as, many, companies and advertisers around the world are looking to use, the respite in media in order to in in recognition of the ongoing acceleration of digital change to accelerate their own efforts in these critical areas. Moving on to the next slide, slide 27, we see the top sheet or cover sheet from some recent client materials that we have been that we've sent out responding to COVID nineteen and encouraging our clients and potential clients to take action and build resilience during these challenging times. Next slide. Specifically, this is an executive summary from that same presentation. And from a client perspective, you can see that Mighty Hub has focused our efforts in assisting clients to navigate these challenges, which remain over the few months and quarters.
Broadly speaking, our short term recommendations are divided into two parts. Immediate actions, which are divided into three different categories, essentials, like food and health care, treatment postponeables, like in home entertainment and similar services, and heavily impacted verticals, including luxury goods and restricted items like travel. And for the essentials group, we are encouraged them to may encouraging them to maintain the course and continue to advertise treats and postponables, adjust and monitor accordingly with luxury and restricted pausing and assessing their their spends in order to really deal with the ongoing challenges. Well, as we move forward, we encourage our clients to use this time to become more efficient, saving time and automating, you know, wasteful manual processes, reducing wasteful overhead, and prioritizing customer insights and loyalty. And across all of these, we once again note that these are acceleration to trends that were already happening.
Longer term, the fork that you see in our diagram represents the unknown shape of the economic economic recovery, which could be either you know, we've here positioned it as the extremes between a rapid recovery and a longer downturn. And we're working hard every day to make detailed plans with our clients based upon the themes themes that are listed here. Moving on to the next slide, we see that on this slide, you'll see a sample of projects and services that we have already created to assist our clients. For example, the COVID nineteen command center, which we'll go into a little bit more in detail in the next slide. You know, it answers just a simple question.
How can I gain an actionable view into media spend and allocation during these challenging times? A media platform overlap review, which is to gain additional transparency into technology cost cutting and into work into working media spend. Media quality reviews, which are geared towards really making sure that the the advertisements are appearing next to content that's most suited for brand objectives. Cost waterfall analyses, which once again take a look at the ongoing issues that have that continue even during COVID nineteen around transparency in the supply chain to understand exactly where spend is going and to understand where the the often confusing ad tech landscape is, you know, could be improved. Brand sentiment analysis and churn risk analysis, I think, are self explanatory and really just, you know, help our clients to respond quickly.
And then the ongoing sort of, projects that you see listed at the bottom, include first party data collection review. Even as COVID nineteen has impacted, we've also been dealing with other challenges inside of the advanced advertising and media world with the ongoing, quote, death of the cookie, really making third party data less important than first party data, which is the biggest chunk remaining, even more important than ever before. And so assisting folks with those types of things and then moving into analytics and IT and media platforms training. On the COVID nineteen, on the next slide, we talk about the COVID nineteen command center. It's just a deeper dive into one of these things that we've been that's been very popular amongst our clients.
And it demonstrates not only the specifics of one method that we're using in order to really help our clients during these challenging times. But, also, I'm really proud of the fact that it shows the speed and agility which MightyHive and all of our compatriot s four can bring in terms of creating innovative solutions during even the most challenging times. And so for this COVID nineteen command center, you can see that we're generating a holistic view of ad spend and performance and joining various different data sources together, building multi touch attribution models that account for interaction between channels, and creating dashboards that accurately quantify this value so that it's usable in a timely fashion. And all of this can be done in four to six weeks at a very modest cost and not only is it valuable during the COVID nineteen crisis, but also lays the groundwork for additional transformation and data work as you move forward. Inside of the next slide, we talk about one of the case studies around a one of our clients who's been using Mighty Hatch services not for media, but for data, and how that has already, proven to be very powerful.
And we see a quote here from John Hopperson, that's, who is the vice president of global media at Mondelez International, saying that in order to do advanced machine learning that the fastest growth companies in the world are using, you need to have a common architecture and a common location for your data. This is precisely the types of work that Mondelez and Mightyhive have proudly achieved together. And, you know, rather, we helped and assisted Mondelez in getting new insights by really taking a look and inventorying the different media and sales data that were trapped in silos and often, you know, needed a little bit of massaging in order to be uniform. And we created a plan to really clean up that data and figure out how to put out new global advertising, taxonomies to make sure that the data that was coming in was clean and accurate. And from there, moved into a world in which we could combine these data sources and ultimately creating a automated cloud based approach that allowed Mondelez to monitor its own performance faster and in more flexible ways than legacy methods have previously been able to do.
And I think the results really speak for themselves. It's often said that you cannot improve what you cannot measure. And by improving the measurement of these, results, Mondelez was really able to increase their ROI by 20% double digit gains, even during challenging times. And so we're very, proud of these results indeed. The final slide that we'll talk about on the next, page really is, something that we're announcing today, which is that in trying to support our clients during, you know, these challenging times of COVID nineteen, MightyHive is going to be making one of our own internal tools, the MightyDesk, free of charge available free of charge to our clients.
And the specific things that we're doing, and it's not sexy, but it's incredibly important. You know, ad tech and advertising online advertising veterans know that ad trafficking into ad service is one of the most critical yet time and late time consuming and labor intensive aspects of digital marketing. And internally at Mighty Hive, we've created a software that cuts huge amounts of time out of this, you know, sort of necessary, but, again, labor intensive task. And, you know, for some in in many cases, this has saved hundreds of hours per month trafficking campaigns within Google campaign managers and other ad services. So we're very proud to announce that we'll be making these internal tools available free of charge to our clients, and we encourage any clients that might be listening, to visit the web page listed here, for additional information.
So with that, I'll turn it back over to Scott, to, take
it from you. Scott? Thanks, Pete. So next slide, please. So I think despite the challenges of COVID-nineteen, and you've seen our responses to that from, from Pete and Vic, we've continued to see significant new business wins during this period, both from existing clients via our land and expand strategy, which we've talked about previously, so the likes of Google, Netflix, HP, Facebook, P and G, Amazon, etcetera, as well as new clients.
We continue to see strong demand for our services, as Pete said, around third party data, on data strategy, data engineering, cloud services, analytics. And in q one in this area, we won significant assignments from the likes of SWD Insurance, TD Global, Fuji TV, and then a European luxury brand and an Asia based global automotive brand. Several of these assignments also include media, and we also won major programmatic in house projects for a global CPG, a global ecommerce software company, a global automotive company, and a major US hospital group. So in house can continue the pace. On the content side of our business, we expanded many of our existing relationships and gained particular traction around our embedded and hybrid model with our larger tech client.
We won new assignments from a global pharma company, from Quiddhi, from PayPal, Twitch, Goldfood, ExxonMobil, and CEMEX. And when it comes to major pictures, we are pretty selective about participating given that they're often long drawn out processes driven by procurement, and we've been fortunate enough to have a supply constraint, not a demand constraint on our resources. That said, we do continue to have a robust new business pipeline. And whilst we note comments elsewhere in the industry that overall pitch activity has declined, we are involved in several potentially game changing pitches for us, for a European automotive company, two global pharma companies, a global FMCG and a global electronics company. And I'm sure Pete and Vik can confirm that they've never been busier on the new business front.
On the next slide, please. This is a slide which illustrates the balance of our client portfolio. So just to be clear, it's based on 100% of our Q1 twenty twenty like for like revenue base. And we discussed this a little at 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 the worst hit sectors such as auto or retail, fashion or travel, But even there, we've seen some strong work from the likes of Nike and Toyota as Victor showed.
And on next slide, moving on to M and A. On the merger front, we were delighted to welcome, Bruno and his colleagues, around 300 of his colleagues at Circus to the Sfour family in January. Circus is a leading digital creative agency with offices across Latin America, LA, and Madrid. They're highly awarded fantastic client lists, including Google, Netflix, Spotify, Twitter, and Uber, and we've already partnered with them across parts of S4 to great success. Our priority, as Peter and Martin have already alluded to, is to protect our balance sheet and our liquidity.
However, we do have a modest pipeline of mergers in highly strategic areas with a couple of small data analytics specialists, an area we see continued strong clients in London, and a creative agency in Germany, which is one of the last remaining geographic debts in our portfolio. These are all our various stages. We continue to talk to agencies in areas like data analytics, ecommerce, which are seeing increased demand as a result of the current crisis. So with that, I'll hand you over to Martin, who's gonna summarize.
So thank you. Thank you, Peter. Thank you, Scott. Thanks, Victor, and thanks, Pete. So I just want to go to the the summary slide, the last slide before we get a a q and a.
Our people, I'm glad to say, are safe, and most of them, if not all of them, a couple of our offices are already up and running, in Asia Pacific. But, there are basically most of them are well and safe. We have had, you know, one or two infections, infections, and one or two, members of families have been affected, seriously. And, our hearts go out to those families, and we wish them long life. Having said that, s four continues to lead the industry as you've seen in double digit top line growth and in margin.
We have a strong balance sheet, as Peter has emphasized, and we've and liquidity. And we've stress tested it not only in the the current quarter, but beyond that in q three and q four, and in fact, into 2021. And our annual report our digital annual report, and our physical annual report, has been issued today, and you can see that, on our website. We've taken early cost action, as Peter said, and we retain significant flexibility in relation to what may or may not happen. We have a very favorable client portfolio, as Scott has emphasized, with 15% plus of our of our portfolio in the tech sector.
And we have a very healthy new business record, and pipeline, and we're involved in a number of very significant pitches. What we see the impact of COVID nineteen as being, and this is not new to you in in terms of a view, is that the all the trends are pointing towards increased digital transformation. There is a controversy between those who think that that the world will, be in recession, and those who think that the action the fiscal action taken by central banks and by governments, is sufficient at least in the short to medium term to buttress what's happened, and provide growth, and continuity. But whatever happens, we we see digital transformation accelerating at the consumer level, at the media level of media, and last but not least, the enterprise level. So COVID nineteen really accelerates the adoption of our holy trinity model and integration.
And last but not least, we are ready, from now because we're seeing lockdowns eased in various various jurisdictions, we're ready for recovery whatever its shape. So with that, can we turn over to q and a, please, operator? Thank you.
Thank you. Okay. So the first question is from Jonathan Barrett from Panmure Gordon. Your line is now open.
Good morning. Good morning. Thank you very much for taking my questions. I really just want to focus on the more difficult segments of clients. So the the the travel, restaurants, live events segment.
And just the nature of the conversations that you're having with clients about how they're starting to try and work out how to come out of this, Are they giving you any hints yet as to how they're going to to manage that? Are you in quite advanced dialogue, or you just simply having to be patient for the moment and wait?
Thanks, Jonathan. I think, basically, they're they're they're all wrestling with the problems. We had a a a call last night, Wesley, Pete, and I with a mixture of CMOs, data officers, about a dozen of them, for about an hour and a half last night. And I think it was quite interesting to see that how they were wrestling with the the issues. Now they came from a various sectors.
There were one or two, I think, related to travel and hospitality, but nobody, I think, front and center in that. I mean, I've listened to Airbnb, and what they're doing. Obviously, they've been heavily affected. You saw the the layoffs they made yesterday, which were very significant. But Brian Chesky talks about adaptations and travel patterns.
So for example, on leisure, less international, more domestic. On business, the nature of business travel will change. It will get less, probably be more domestic than than international, at least in the beginning, and use of technology. So I think people are wrestling. I mean, maybe, Victor, you could you could say a little bit you you're close to travel clients where we've seen cutbacks in spending as you mentioned.
And, Pete, maybe you can add a little bit from your point of view. Victor, any any thoughts on the travel and the hospitality area and what we're seeing? Because we do have clients in that area, although they're a small proportion of our revenues.
Yeah. Thank you. Thank you for that. So when we look at a client base, we we look more like three kinds of clients, like c shaped, like coming up, returning to the market very quickly, u shaped and l shaped. And we try to match the different kinds of clients based on on those patterns in instead of looking just at a at a as a general audit.
And I feel like for the travel industry in particular, it's a little bit too soon to really look at that. So on automotive, for example, we have great dialogues already how to how to get back to it. We see trends into, for example, smaller electric cars that are that are popular. So that that will recover way faster, and so we're already thinking about creative concepting, how to reach the new target audience, what kind of tone of voice. But I feel from a content perspective, the travel industry is a little bit too early to really change the tone of voice in advertising already.
Peace,
anything to add? Yeah.
Yeah. So from our perspective at MightyHive, as we talk to clients inside of the heavily impacted sectors, we see a study in contrast. And the contrast really are between sort of the desire for digital transformation and the ability with which their organizations are able to be agile and to, actually have them occur. And so, I'd say that I've never before seen more desire from all, really, all industries, the mentioned industries, notwithstanding. And the, and so everybody really recognizes opportunity to do these things.
Unfortunately, for some of the more heavily impacted industries, that's offset by just some financial realities, in particular, those that have heavy heavy capital expenditures that they need to take into account in order in order to see if they can afford such changes right now. So, well, broadly speaking, I would agree with Victor's comments that it's a little bit too early to see it, and I would just add those nuances that there's the desire is high, but at the moment, the, the ability may be impacted by financial realities.
I just add one thing to what Victor and Pete said. We we we heard last night. Agility is is often talked about as being the key characteristic that companies need pre COVID, but post COVID or during it even more so. What was clear and apparent last night, and these does not also CMOs and CDOs, was that agility has been ratcheted up inside their organizations. And that third point, when you move from from consumer to media to enterprise, that third point around enterprise, that we think is gonna be a very, very significant change that CEOs, CMOs, CFOs will now start to push.
There is no status quo anymore or that's gone. Q two is a good illustration of that. So change will be very, very violent and significant in terms of transformation and particularly digital transformation.
Thank you for that. I just take you on to, working capital with regards to changes? Do you think we will see a step change in the way that media payments are handled now, because of what's happened, or or or do you think that the market settled on that approach?
I I don't. But, Peter Peter, do you wanna talk about what we see on media payments? We made reference to it in the the RNS statement because we thought it was a a matter that people in the industry had commented on that there had been significant changes. A couple of the holding companies pointed to that. Although when you looked at their working capital flows, it didn't seem that there had been sort of extensive activity of that nature.
But, Peter, do you want to say what you see?
Yeah. So so what we like I mentioned at the start is that we we we are in a very, let's say, good position also with our our client portfolio. So 53% is is technology, and they they remain to pay in these typical technology payment terms, which is somewhere around thirty and forty five days. So our inflows are strong, and it's not, of course, only technology. And maybe on some of the business segments, we see some delay.
So that's true. It's absolutely true. There is some delay. We're increasing slightly in our working capital, but I would say so far, so good. So we don't we are not confronted, at least not yet, although I would expect some in Q2 or maybe even slightly more in Q3, that we will have some more pressure on our working capital because as a result of delayed inflows.
But I would say so far, so good. That's what we have seen till date.
Yeah. Would just add, I mean, it's as Peter was answering the question, I was thinking about this in relation to the ISVAR report that we saw overnight, which we may get further questions on on this call, and I'm sure Pete would like to to respond to that. But I I think we're we're seen as a different category in relation to this issue around working capital and media. Our model is much more well, not much more. It is transparent and much more flexible.
And therefore, I think we're sort of in a different category, maybe to others, in the way that clients view us and what we do. So, the model is, as I say, transparent, and and flexible. So I think that's where we are. So I think we've seen a little bit of pressure, but not to the extent that other people seem to be indicating. Thank you very much.
Okay. Next question.
Okay. So the next question is from Jay Spooner from HSBC. Your line is now open.
Good morning, guys. Could you talk a little bit more about the £18,000,000 of cost savings? I mean, how where was that coming from? Is that a lot of growth plans now going ahead? Or is there quite a lot of focus on the existing cost base within that?
Secondly, can you talk a little bit more about the challenges of winning new business in this environment? Are clients more tempted to stick with existing suppliers, or are there is there a willingness to try the specialists like, like yourself? And I have a follow-up question if, maybe if I wait till the end. Thanks.
Okay. Fine. Okay, Joe. Thank you. Peter, do you wanna deal with the the cost question?
Yes.
Sure, sure. So Joe, coming back to your question, so the €18,000,000 is that relative to the budget. So like I tried to explain, it's a combination of reduction in compensation, offices, OpEx reductions. It's relative to the budget. And if you would look, for example, compared to and of course, this is, again, relative to the budget where we were growing at or expected to grow at high levels.
But if you would compare it to our pro form a numbers last year, let's say, our operating expenses, our personnel and indirect costs, it would represent approximately 10% of that cost base. For 2020 on a budgeted base, it would be slightly lower, of course, because of the expected increase. But basically, it's a waterfall of measures that we have taken precautionary, as I tried to mention or as I mentioned. And then, yeah, the the the categories I already addressed. So so basically, that's what we did, but I'm not sure if that answers your question.
Yeah. Perfect.
Thank you. Okay. On winning business, just before I ask maybe Wes Wes Tejar, Victor's partner, is on the line as well. Maybe maybe he can respond on the new business one. But I just make a comment that I think we tend to do best when when clients have within them change agents, so I put it like that.
So when clients want to change their model, that might be to increase agility, to increase speed speed, accelerate. I think we tend to do better in those circumstances. And as I I said before, we we think the sort of penetration or or extended change change agents is increasing. I mean, COVID nineteen is going to accelerate change, particularly in digital transformation, and therefore, I think the atmosphere or the climate will be favorable to us. Wes, do you want to do you want to try and answer the the question on, you know, how how does winning business, and maybe Pete can come in from a Mighty Hub side.
Yeah. I I have to admit, six weeks ago when the sharp sharp shock to the system happened, I think it would have been overly positive to predict the pipeline we actually currently have. I've seen a huge uptick in new business. We had a really interesting quote from a key client yesterday in, in an all hands meeting. He said our 02/24 road map just got compressed to 02/21.
Everybody has moved digital transformation from the it's important but not urgent category to it's urgent and needs to happen now because COVID is putting immense pressure on everybody's digital ecosystem. So we're seeing sales cycles shorten, people moving quicker. I think we've said many times that digital transformation does not happen in PowerPoint slides. It happens in projects. It happens with implemented process with people.
So I think we are positioning against the sort of traditional slower nature of consultancies with urgency, and that urgency has never been more important. We're also seeing the forming of completely new industries and businesses. If you look at the event industry, which is huge, all of that money is now being reframed and retrofitted into digital native experiences, which is where we are at our strongest. So we're actually seeing some of the the bigger pitches this year are are forming purely because of these new sort of needs, needs being pulled together from both, companies and consumers. So new business is actually very active.
And I have to say, I I said this yesterday in a pitch call, we hate that some of these briefs exist for all of the reasons we are aware of, but it's very exciting to actually talk about these things because it's the reason we started MediaMonks originally, why we all joined s four. So from a new business perspective, very exciting.
Alright. Pete Pete. So and I think we've got Chris Martin on the we've got some Pete is in Arizona. Yeah. Chris is is in Colorado.
God god forsake an hour. But if you're still awake, Pete, Pete, or Chris, go ahead.
Yeah. This is Pete. So I think it's pretty clear to everyone that times of great change require new approaches, and, our clients realize that. And so we have seen, as we mentioned, a strong uptick in interest in our digital transformation and, in particular, our data businesses. And the best clients that are out there just are realizing that the, vast changes that have been pushed forward and pushed to floor by COVID nineteen require new partners and new ways of working and new methods, and all of these things have resulted in an uptick on ours on our side.
So what we're seeing is, yes, a much greater willingness to, reexamine relationships sometimes that have been decades long. But, you know, in the harsh light of reality and what we're all going through now may not may no longer make sense, and therefore, it creates room for new partnerships and new ways of working, all of which are benefiting us more broadly.
Yeah. No. Just add to that, Pete. I mean, do you wanna say anything about what you see on the data and analytics side? Because I think there is and those are budgets which sometimes are not just marketing budgets.
They're IT budgets too. Do you want to say a
little bit about you touched on it. Yeah. Sure.
A little bit more. Yeah.
Yeah. I think that it's pretty clear. And once again, I'll just mention this, you know, some of the discussions that sir Martin West and I had last night. And, you know, one of the emerging themes was definitely agility, but also just this notion that agility must be paired with insight because agility on its own or speed on its own may actually just encourage you to run-in the wrong direction even faster. And so you have to know not only be able to move fast, but also to know where to move, and insight definitely is the, you know, sort of key factor of that.
And, you know, insight comes from data, And it is and I think people know that. And so if things were a minefield before COVID nineteen and people were creeping through it now, they're sprinting through them and insight matters more than ever before, and I think that's obvious. And so what we are seeing is a very, very strong uptick in data programs, really trying to figure out, you know, just a a a very simple, sequence of events, which is you must take a look at all of the different data sources that you have. You must clean them up and standardize them and then combine them, and then you must analyze them and take action. And these data insights, is, you know, can must be pervasive not only into the marketing and the advertising, but into all aspects of customer interaction.
Customers these days do expect seamless interactions whether they be online, offline, in store, on the phone, anywhere. And so data is your memory. Data is the ability to actually, mesh those experiences together. And so we do absolutely see an uptick in that foundational element, and the best marketers in the world are really kinda pushing in this direction, and we're the beneficiaries of that. Saman?
Okay. Joe Joe, you have a follow-up.
Just a a a final quick one. The statement this morning referenced, that you had seen some shift in terms of customer spend from the first half to the second half. I just wondered how, significant that was and if there were any particular trends, within that. Thank you.
Yeah. We were we were talking generally about, you know, the two buckets as we put it, the tech bucket of the CPG, pharma, retail, auto, travel, hospitality buckets. I think on the tech side, we have seen I mean, a a number of tech clients, had plans to invest heavily in Tokyo 2020, which is now not gonna be renamed 2021, but goes to 2021 with a question over whether, you know, they they will be able to deliver an Olympic games in the classic sense given given the phased lockdowns because planning takes a long time. So that's then Euro twenty twenty, also investment investments in baseball and basketball, the Premier League here. So, there was a lot of money freed up by the cancellation or postponement of those events.
And what we saw was money switched to purpose. I know one analyst was on earlier asking what purpose campaigns are, and and, basically, they're around the the the issues that we're facing with COVID nineteen, you know, support for frontline workers of PPE and and health health and safety. We saw money switched in into that. But then, again, then the money being postponed into h two because not all that money could be used that let's call it the live the live sports or and related activity experiential stuff could not be moved into those purpose campaigns. And we saw money being shifted into h two on the understanding and that that that sort of deals were cut, if you like, between the the CMOs and the CFOs, that that money would be spent, but would be spent, in in h two.
So I think there is a a little bit of that. It's not pronounced. There are tech clients that are going the other way, without naming names, but it will be apparent there are a number of tech clients that are investing heavily, either in in equity investments, or in in repositioning their companies because the tech the tech companies have been exposed to a number of issues, the privacy issues, the brand safety issues, interference in election issues, and some of them are seeing this as an opportunity when when they are relatively strong to invest in building their brands in different ways. And I think the tech companies will emerge largely, and I'm referring to hardware, software, and platforms, will emerge from COVID nineteen in a better position in terms of image and reputation because of the sorts of things that they're doing. You know, Amazon hiring, as Scott said, a 175,000 people.
Google and Apple cooperating on apps for tracking and contact tracing. Those sort of sort of efforts, which have been seminal in terms of helping with the health and safety issues around COVID nineteen, I think, will rebound to the the benefit of the of the platform companies, hardware and software companies.
That's great. Thank you very much.
Okay. Alright. Okay. Any other questions, operator?
Okay. So this is the final question now from Matthew Walker, at Credit Suisse. Your line is now open.
Thanks. Good morning, everybody. Hi again, guys. Just a couple of questions. So the first is, what do you think the range of outcomes realistically is?
I mean, you talk about double digit, growth. Does that mean 10? Does that mean 15? Does that mean does that mean 20? And what do you mean by when you talk about your your EBITDA margin?
Can you give a bit of clarity around around around that as well? And then finally, what what's the shape of the core what's the anticipated shape of the quarters? I know it's uncertain, but you presented some data showing stability in the digital media volumes. Does that mean I'm probably barking up the wrong tree, but does that mean we should, like, correct the q two from you, which is broadly flat, and then growth in in q three and q four? What are just interested in your thoughts.
Well, you you you asked
the the diff the really difficult question, Matthew.
I'm so glad that we we got to question three. Let me let me have a go, and then Peter can sort of come in on it. I I I don't want to sort of be drawn or or give definite scenarios because we've we've looked at the down the downside. I mean, we are forced, if that's the right word, as we issue our annual report to talk about liquidity, to talk about the adequacy of, working capital, and bank bank facilities, etcetera. So we go through, let me put it like this, the the the really negative cases.
We you tend when you do these stress tests to look at the downside. I think some of the holding companies have looked at, naught, no growth as being their best case, which would not would not be our best case without naming percentages. I mean, you use the range. But you know you know what we did in q one. You know that we did 19% on top line, in terms of like for like growth in gross profit, which is the which is the key number.
On a pro form a basis, it was, bigger than that, 22% or whatever it was. So so you we wouldn't we wouldn't go as low as zero. On the other hand, when we looked at stress tests, we would go lower than that. On on the question of reasonably strong, what we're indicating is we do see margin pressure, as a result of what we've had to do and what's happened on the top line. Remember that when we budgeted, at the beginning of this year, pre pre pandemic, we're budgeting for 30% growth.
And, you know, if I was if if you push me to the wall, you know, on this call or beyond, I would say on our media side, we were seeing sort of 10 to 15% declines from the budget of 30%. And and remembering that media and data was about 30%, a little bit less, 25% of our business, and content was about 77 70 to 75. On the content side, I would say it was a little bit less. I think you you heard from Victor and Wes that when we got into COVID in mid March, there was a a shock to the system. I think the phrase that Victor used and Wes used.
And but the shock, you know, is ameliorated. And I would say on the content side, it's not 10 to 15. It's probably five to 10. Now you can do the maths on that. That you know, if you ask me, again, pinned against the wall, what what do I think?
That's roughly where I think where we are on the basis of current of current knowledge. Margin will still be strong relative to what you're seeing in the rest of the industry. But I think, you know, we've we've got to expect there will be some softening of the margin, but I think we'll surprise ourselves by the end of the year in in how how well we do on margin. There's a there's also a philosophical question here, Matt Matthew, but we we've if you look at the cost measures we've taken, there's sort of a waterfall of cost measures. We've we've done the easy stuff first.
We've, you know, cut travel. Obviously, travel has gone. Nonessential business, freelance expenses, but without sort of cutting into, our people. And we've really maintained we've altered the pattern, of investment in people to client demand. You know, for example, in Australia, we have sort of considerable resource, around one of our partners, Adobe, which we wanna keep in place even though with physical distancing and the lockdown, contact on client premises is not not possible.
So we've had to decide to keep in place resource, which in current the current climate is under pressure because we think in a very short period of time, that scarce resource, will be available to us again, and I think we're already starting to see some some take up from that. So, I I just finally say that in in a at a time when nobody is willing to give you guidance in you know, look at the number of companies that have just terminated any guidance. We're we're being a little bit braver. And I think the reason we're being braver is that we see we have a little bit more visibility because of the nature of our client base, and probably something to do with the relative sizes of our business. Our business is, to us, is complex and and challenging, but, you know, against what others may have to wrestle with.
We don't have the the albatross of of analog. We're operating in areas where there is more life, and people are looking at the sky rather than looking at their boots. So I I think we can be we can afford to be a little bit more realistic about it, but that's without being highly specific. Now I've said all that, Peter. Is there anything you wanna say in addition?
What should I answer, Markus? No. I didn't. No. I really think I think because otherwise, I'm going to summarize what you said, but I think this is exactly what I would have said if if if I would have answered the question.
So I I don't think there's anything to add for me at this very moment in time.
Is that is that precise enough for you, Matthew? Well, I just wanted to
come back on on on the q two, notwithstanding what you said about the full year.
Yeah. I think I think what we've said is that we see some stabilization in April. I mean, I you know, I remember Facebook, not in their presentation. I think the CFO said that the first twenty one days of April, they've seen, flat. Was that right, Scott?
Was it flat at Facebook?
Yeah. Flat on last year. Yeah.
Yeah. So, you know, we've seen some stabilization. And the slide that Scott showed you, where, you know, you had the the numbers for January, February, March, and it went into April, not with a number, but programmatic was flat, and we were seeing content and data up. And I I think you've got the tone from Victor and Waze and indeed from Pete, that that's pretty much what we're we're seeing. So qualitatively, I would say we're seeing sort of some stabilization.
If you yeah. We meet daily. The coronavirus crisis group, the CCG as we call it, the the the the people on this call plus one or two others meet, daily. And if you look if you were listening into those calls today as opposed to, say, four to six weeks ago when we initiated them, you you put probably the tone is more upbeat. Because as Victor West said, I West said it very well with the the the inbound and indeed out I mean, it's not inbound.
We we we go for it. So it's inbound and outbound new business activities are running at very strong levels. I mean, we're we're we in the release, we said our pipeline was at the same level as last year. And then we just so you understand, we track, for example, on the content side, our pipeline, and we look at the percentages at any point in the year that are committed and contracted work and what we need in order to to make budget or to our revised forecast or whatever it has has to be. So I think the pipelines are pretty strong given what we've seen for the impact of COVID.
So, yeah, I think, the guidance that we're giving, and we continue to give some guidance, we haven't retreated behind the wall of, you know, so difficult and so uncertain that we're not gonna give you any guidance. We're giving you some some, I think, thoughtful guidance and really telling you what we know. As Scott referred to transparency, and pretty much what we've said on this call is what we know.
Okay. Thanks a lot. Thank you.
Thank you. Thank you. Anything else, operator, or are we we done?
Yes. We have one more question that's being registered from Paul Richards at Dalgate. Yeah. Your line is now
Two questions from me. The first is there's been some suggestion from some of the other holding companies that there's been a slowdown in housing. Just be interested in your perspective on that. And second, actually, could you provide a bit of color on, FarWard? Obviously, one of the bigger, mergers, for SVOD.
Can you give us an update on how that is progressing the last couple
Scott. Scott, in housing is your favorite subject, sir. Yeah.
Sure. I'll take that one. So I think thanks for the the question, Paul. I hope you're feeling better. I think on that one, firstly, you have to define it.
Right? So I think a lot of people make mistakes of thinking in housing is a binary concept. So you've got outsourced or a 100% in source, and that's not at all as we see the industry. So we're I think we've explained before that we see it as a spectrum and the different ways that clients engage with agencies, whether that's hybrid or embedded or indeed in house. And, you know, we would counter that to what you were sort of questioning quite strongly, I think.
We've, you know, we've explained that we've won significant new business in this area in q one. We've got significant pictures out there that both on the content and the media side. And all the statistics you see in surveys and in the marketplace to talking about in housing, Visa, the CEO of the Association of National Advertisers did an interview campaign this morning saying that the in house agencies have really come to the forum, shown their strength during this period. So don't agree with that at all. I mean, I'm not surprised that holding companies are saying that.
It's a bit like asking 30 if they've seen much demand for Christmas. It's probably not Perfect. Not gonna have much because we don't you know, we rarely compete against them on housing assignment, usually against other specialists or consulting companies and, so, you know, they might not be seeing it, but we certainly are.
Yeah. I'll just add to Scott's comment that the ANA, Liadici, who heads the ANA, the American Association of National Advertisers, came out strongly, I think it was last night, with a with a presentation or speech around COVID nineteen driving clients or encouraging clients to in house. And and I as Scott said, it's there are varied models here. You mentioned Firewood. We'll come on to that in a second.
Firewood has an embedded model, which is where they embed people from from their agency. Firewood is a part of MediaMarkz, and they embed them from their agency in the client. So you have outsourcing at one end of the spectrum and betting, let's say, in the middle, and then in housing at the other end. So it's it's not, as we say, a binary choice. There are there are shades of it.
But it's interesting that the ANA is saying, and this is our experience, that on that spectrum, we're seeing increased interest, certainly experimentation. And now I think you will see further implementation. I think I'd agree with the ANA that that we're starting to see greater interest in that area, and particularly in two areas, embedded where, you know, it's our people, but they're embedded in the client. They're they're working, and this will obviously, COVID nineteen will impose, restraints and constraints in in that into from a security and safety point of view, but embedded becomes more important, and I think in housing will become a a greater feature. I don't know, Chris, if if you're on the line still, do you wanna say anything about in housing?
Because you you you do a lot in that. Are you still there?
Actually, Chris had to drop off. This is Pete. I can cover that.
Okay. Go ahead, Pete.
And so what I I would agree that we have seen an uptick in the interest around in housing, and that has been caused by the acceleration of trends and also just the ongoing realization of, other factors that we have seen in the past. Notably, speed and agility is always important has always been important. It's even more important today. And just I think it's not hard to claim that embedded or in house teams can move faster, communicate better, and respond more quickly than teams that are, you know, outsourced. And, the other thing that I would say and point to is that the notion that first party data must be both protected as well as used to drive revenues and profits, because that, represents a bit of a conundrum for folks.
And, I think it's very clear that the data must be used, but it must be protected. And the only place that that can happen is in a, much more protected environment like in house. As Scott notes, we do look at these things, as not just a binary solution. They're not in fully in house or fully outsourced. There is a range of options in between.
We do believe that every advertiser in the world is going to have to make some move along that spectrum, and we think that, in keeping with the general notion that, COVID nineteen and recent events have accelerated these shifts, we certainly believe that that's the case here as well.
Okay. And then just turning to the firewood. I mean, I would just say that firewood had a a tremendous first quarter, and that's continued. But but, Wesley Wesley, do you wanna comment on firewood seeing you're you're closest to that?
Yeah. Well, to your point of a very strong q one, I I think their model I agree the embedded sometimes the spectrum isn't that clear to people. I see a lot of clients looking at it as a more efficient model because it is. So we're we're seeing a healthy uptick of of new business opportunities within the firewall pipeline. That sort of point at that being the case and and one or two interesting deals that are very close to being signed.
So we're we're not seeing we're not seeing clients or the market pull back. I I think it's more the definition of I I think you should look at it as an idea of having great people that organize and operate in a flexible way around client needs. Sometimes that is partly in offices, which, of course, at the moment, nobody pretty much has offices. Sometimes it's in in lower cost production heads that we have.
Sometimes it's a mixture. It's more about the agility and the structure to make it work together as a single team instead of the sort of traditional, I would almost say, legacy model briefing handovers and rapid out of the hat creative process. It's it's more about the the way of working than it's this sort of really specific thing about people in offices. But overall, to to Pete's comment, we're we're seeing we're seeing that pipeline super healthy, and I I would expect more clients to move into it. I think there was a report that came out one or two days ago from Gartner, if I'm not mistaken, that shows that agency fees are are probably the first thing being looked at.
You should really look at the model that we're building as we're we're not a a sort of a typical agency fee model. Right? We we see a lot of what's happening in the market as as a positive for our model, to be honest.
Okay. Thank you, Wes. Thanks thanks everybody on our side for the call. Thanks everybody for listening, and we'll we'll try when we we meet, for the half year to put more flesh on the bone for Matthew's question and be more specific. But I think we've given you a lot of specific guidance, certainly more that you're you're getting from others in the industry and beyond.
So thanks for listening, and we'll we'll see you at the end of q two. Thank you.
This now concludes today's call. Thank you all for joining. You may now disconnect your lines.