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Capital plc
Annual Report and Accounts 2022
By winning
we can win the decade
…through building a unified, purely digital
advertising and marketing services business,
which disrupts analogue models by embracing
content, data&digital media and technology
services in an always-on 24-7 environment, for
global, multinational, regional and local clients
and formillennial-driven influencer brands.
Our mission
www.s4capital.com/annualreport22
In this report
Our business
02 Financial highlights
04 Business model
06 What’s happening, NOW
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Strategic Report
11 Letter to shareowners
14 Progress against our strategy
16 Measuring success: Key Performance Indicators
17 Financial review
24 Principal risks and uncertainties
Pages 65–70 also form part of the Strategic Report
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Governance Report
72 Corporate governance statement of compliance
74 Leadership: Board of Directors
78 Executive Chairman’s statement
80 The role of the Board
89 Audit and Risk Committee Report
94 Nomination and RemunerationCommittee Report
99 Remuneration Report
117 Directors’ Report
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Industry outlook and ESG reports
30 Our world now
By Sir Martin Sorrell
37 ESG: Our sustainability commitments
40 TCFD Report
48 Material impact and our stakeholders
50 Zero Impact Workspaces
55 Sustainable Work
57 Diversity, Equity and Inclusion
62 ESG stories
65 Non-financial information statement
66 Section 172 statement
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Financial statements
122 Independent Auditors’ Report
134 Consolidated statement of profit or loss
135 Consolidated statement of comprehensive income
136 Consolidated balance sheet
137 Consolidated statement of changes in equity
138 Consolidated statement of cash flows
139 Notes to the consolidated financial statements
194 Company financial statements
201 Appendix: Alternative Performance Measures
206 Shareowner information
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Capital plc Annual Report and Accounts 2022 1
Billings
1
Pro-forma
3
billings
£1.9bn £1.9bn
+45.8% +24.3%
Like-for-like
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+23.5%
Revenue Pro-forma revenue
£1,069.5m £1,108.7m
+55.8% +25.8%
Like-for-like +24.3%
Net revenue Pro-forma net revenue
£891.7m £924.1m
+59.1% +27.1%
Like-for-like +25.9%
Operational EBITDA
4
Pro-forma operational EBITDA
£124.2m £136.3m
+23.0% -11.8%
Like-for-like -16.4%
Operational EBITDA margin
5
Pro-forma operational EBITDA margin
13.9% 14.7%
-410bps -650bps
Like-for-like -710bps
Operating loss Adjusted operating profit
6
-£135.3m £114.1m
2021 -£42.1m +20.4%
Like-for-like -19.5%
Financial highlights
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Capital plc Annual Report and Accounts 2022 2
Our business
Loss before income tax Adjusted result before income tax
-£159.7m £89.7m
2021 -£55.7m +10.5%
Basic loss per share Adjusted basic earnings per share
- 2 7. 0 p 11.8p
2021 -10.3p 2021 13.0p
Market capitalisation at 12 April 2023 Share price at 12 April 2023
£911m 158.6p
For full reconciliation from statutory to non-GAAP measures, please refer to the Alternative
Performance Measures Appendix on page 201.
Notes:
1. Billings is gross billings to clients including pass-through costs.
2. Like-for-like relates to 2021 being restated to show the unaudited numbers for the previous year of the existing and acquired
businesses consolidated for the same months as in 2022 applying currency rates as used in 2022.
3. Pro-forma numbers relate to unaudited full-year non-statutory and non-GAAP consolidated results in constant currency as
ifthe S
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Capital plc Group (the Group) had existed in full for the year and have been prepared under comparable GAAP with
no consolidation eliminations in the pre-acquisition period.
4. Operational EBITDA is EBITDA adjusted for acquisition related expenses, non-recurring items (primarily acquisition
payments tied to continued employment, restructuring costs and amortisation of business combination intangible assets)
and recurring share-based payments, and includes right-of-use assets depreciation. It is a non-GAAP measure management
uses to assess the underlying business performance.
5. Operational EBITDA margin is operational EBITDA as a percentage of net revenue.
6. Adjusted operating profit is operating profit/loss adjusted for non-recurring items (as defined above) and recurring
share-based payments.
7. Adjusted result before income tax is profit/loss before income tax adjusted for non-recurring items (as defined above)
and recurring share-based payment.
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Capital plc Annual Report and Accounts 2022 3
Business model
We are NOW.
We shift industries forward by flexing
and reshaping how businesses
interact with people against the
needs of a constantly evolving world.
What we do today, this minute, this
NOW, is what moves us forward; our
cultures, our work, our industries,
our worlds.
While everyone talks about
the future, we make the future
happen NOW.
People
8,900
Countries
32
Unitary structure
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Capital is a
new-age/new-era
digital advertising,
marketing and
technology services
company, operating
in the fastest-
growing segment
of the advertising
and marketing
services market.
We are
purely digital
With a
unitary
structure
Holy Trinity of:
First-party data
Digital content
Digital media
Speed
Quality
Value
More
Our four core principles
We are purely digital
Digital is by far the fastest-growing segment of the advertising and
marketing services market.
Holy Trinity of First-party data, Digital content, Digital media
Personalised content automatically served to consumers based on their
digital activity.
Speed, Quality, Value, More
Or Faster, Better, Cheaper, More. Faster means more agility; Better
means best use of technology such as artificial intelligence (AI) and
virtual reality (VR); Cheaper means more efficient. More means change
driven by AI.
With a unitary structure
Our unitary structure with a single P&L gives our people a sense
ofcommon values, shared goals and collaborative spirit.
Underpinned by:
Our people
Read more on pages 57–61
Financial performance
Read more on pages 17–23
A commitment to ESG
Read more on pages 37–64
Risk management
Read more on pages 24–28
Our business
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Capital plc Annual Report and Accounts 2022 4
Strengths and differentiators
Our people
Our executive management team combines senior
industry expertise with successful entrepreneurs to
create a growth-focused culture among our 8,900
talented professionals.
We celebrate diversity and recognise the
importance of attracting, retaining and developing
the best talent in the market at all levels of
the Company.
Our clients
We work for global, multinational, regional and
local clients. We build scaled relationships with our
clients, becoming partners they rely on for their
marketing, technology and growth needs.
Almost half of our revenue is from clients in the
Technology sector which provide us with exciting
growth and partner opportunities. We have a
stated objective to develop 20 scaled clients of
$20 million or more in revenue (‘whoppers’).
Speed
Agility is at the heart of our offer to clients.
We leverage technology and our unitary approach
to respond to client requirements quickly
and efficiently.
Quality
Our ambition is to be the best quality partner to the
world’s leading technology companies.
With our unique understanding of their products we
can provide services built around their technology.
More
Our purely digital offering means we are swiftly
capitalising on the arrival and benefits of AI.
Our operating model
Value
With our focus on digital marketing and technology,
we provide a strong value proposition to clients
who are looking to get the best possible return on
their investment.
Our data-driven approach coupled with our speed
to market and measurement capabilities mean
clients receive more effective and reliable results.
Geography
Our presence in 32 countries enables us to provide
global coverage and local insight.
Single P&L
Unlike traditional agency holding companies,
wehave a single P&L, aligned around the
Media.Monks brand. This allows us to provide
an integrated service to clients, broader career
paths for our people and a more profitable model
for investors.
Addressable markets
We focus on large high-growth market
opportunities including the digital marketing,
media and transformation markets. These are all
expanding multi-billion dollar markets, which allows
us to focus on growth without the distraction of
providing services in declining traditional markets.
How we do it
People
8,900 talented professionals
Practices
Content, Data&Digital Media, Technology Services
Principles
Speed, Quality, Value, More: in a unitary structure
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