Strategic Report Letter to shareowners continued Seizing the decade Summary and outlook Overall, it is clear that covid-19 has accelerated There is no doubt that covid-19 has had a the adoption of digital transformation and devastating impact on the global economy digital media at three levels: and society over the last two years. • Firstly, at the consumer level, with Our people have been put under immense consumers buying groceries and essentials strain, particularly with the illness and loss of online, educating their kids online, using family members. We applaud their resilience, financial services online and gorging on hard work and success and thank them for online entertainment and gaming. all their efforts. We took the view that we • Secondly, media trends have been would not make significant reductions in the accelerated, with the streamers like Netflix number of people in the company, nor rely in and Disney+ gaining on free to air TV any significant way on government support (despite recent turbulence), traditional or funding. newspapers and magazines under greater Our Content practice, now representing about pressure from digital alternatives and two thirds of our business, pivoted very quickly traditional outdoor being increasingly to robotic production and animation and eclipsed by digital outdoor. from orchestrating live events to virtual ones. • Finally, enterprise adoption of digital We created significant new content revenue transformation has accelerated, as covid-19 streams very quickly, with like-for-like gross disrupted steady state growth and during profit/net revenue growth of 19.4% in 2020 that disruption ‘change agents’ have been and 43.7% in 2021, a two-year simple growth given more oxygen to implement digital stack of 63%, whilst the analogue advertising organisational change. and marketing services industry struggled to It is also clear that the Company’s purely digital find a low single-digit two-year simple stack of model, based on first-party data (reinforced by around 3%. the recent privacy policy decisions by Apple The imperatives for 2022 continue to be: to and Google) fuelling the creation, production achieve greater client conversion at scale and distribution of digital advertising content and our 20² objective as rapidly as possible; and distributed by digital media, is increasingly to integrate our three practices even more resonating with clients. Our tagline ‘faster, effectively; to continue to strengthen our better, cheaper’ or ‘speed, quality, value’ and diversity, equity and inclusion and climate unitary, one P&L structure also appeal strongly. change achievements; to continue to broaden and deepen our service capability through further combinations; and, of course, to try to ensure a delay in our results doesn’t Covid-19 has happen again. We continue to review the recommendations of accelerated the Lord Hill’s Report to the UK’s Chancellor of the Exchequer that provides a possible pathway to a premium UK listing and the possibilities adoption of digital of a US listing, where market valuations for transformation and comparators are higher. digital media 14 S4Capital Annual Report and Accounts 2021