S4 Capital (SFOR) investor relations material

Executive summary

• Q3 revenue was £191.7 million, down 1% like-for-like and 3.4% reported; net revenue was £167.0 million, down 4.4% like-for-like and 6.9% reported, showing sequential improvement over Q2.

• Year-to-date revenue declined 8.4% like-for-like and 11.1% reported; net revenue down 8.2% like-for-like and 10.8% reported, impacted by FX headwinds and client caution.

• Cost reduction initiatives led to a 5% headcount reduction since June and 13% year-over-year, focusing on non-billable and back-office roles, improving EBITDA margins.

• AI-driven offerings and operational efficiencies are supporting productivity, hyper-personalisation, and margin improvement.

• New business wins and cost actions are expected to drive stronger profitability in H2.

Financial highlights

• Net debt at period end was £151 million, up from £146 million at half-year due to dividend, restructuring, and FX, but down from £180 million last year; average month-end net debt for Q3 was £154 million, down from £184 million last year.

• Leverage improved to 1.8x pro forma 12-month operational EBITDA, from 2.2x last year and 2x at half-year.

• Operational EBITDA for trailing 12 months: £83.4 million.

• Adjusting items guidance: £75–88 million (amortization), £45–50 million (acquisition/restructuring/other), £25–30 million (share-based payments).

• Effective tax rate is 32.5%; depreciation expected to be about $7 million for the year.

Outlook and guidance

• Full-year like-for-like net revenue expected to be down upper single digits; operational EBITDA targeted to be broadly similar to 2024.

• Net debt expected in the range of £100–140 million by year-end.

• Board may consider an enhanced final dividend for 2025 if H2 performance and liquidity targets are met.

• Cautious approach to 2026 guidance due to ongoing macroeconomic volatility.

• Marketing Services to be down mid-single digits, Technology Services to decline more due to longer sales cycles and a major client loss.