Latest / The Business Case - with Mark Wharrier and Phil Clark / S2 - Episode 9: The Business Case: Interview with Benjamin Faes, CEO of RWS Holdings plc

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S2 - Episode 9: The Business Case: Interview with Benjamin Faes, CEO of RWS Holdings plc · The Business Case - with Mark Wharrier and Phil Clark

• 0:16
  SPEAKER_00: Welcome to the business case in partnership with the leading investor presentation hub Engage Investor.
• 0:23
  SPEAKER_00: This is the podcast where we dive deep into the stories behind the UK's leading companies.
• 0:28
  SPEAKER_00: I'm Mark Warrior.
• 0:30
  SPEAKER_03: And I'm Phil Clark.
• 0:31
  SPEAKER_03: And in each episode, we'll be sitting down with top business leaders to uncover their career journeys, the challenges they faced, and the insights that have shaped their success.
• 0:44
  SPEAKER_00: We have spent our careers analysing and investing in UK companies, meeting managements to understand the business case.
• 0:50
  SPEAKER_00: And now we want to share those insights with you.
• 0:54
  SPEAKER_00: We will hear about the companies our guests lead and how they are positioned for the future.
• 0:59
  SPEAKER_03: But we also want to find out what makes these business leaders tick, the highs and the lows that they have experienced, and the lessons of management that might apply to your life.
• 1:11
  SPEAKER_00: Please remember this podcast is not investment advice and is for informational and educational purposes only.
• 1:18
  SPEAKER_03: Well on today's podcast, we've got Ben Face, the CEO of RWS.
• 1:22
  SPEAKER_03: This is a really interesting conversation and probably captures a lot of businesses that are facing the AI challenge.
• 1:29
  SPEAKER_03: RWS provides translation services, has a really gold standard list of clients that it works for, and through this conversation we really tease out where the AI threat and opportunity is.
• 1:43
  SPEAKER_03: Hope you enjoy the discussion.
• 2:02
  SPEAKER_03: RWS works with many of the world's leading brands, helping them communicate, innovate and grow across international markets.
• 2:10
  SPEAKER_03: The group is listed on AIM here in London and has a market capitalization of around£300 million.
• 2:16
  SPEAKER_03: The company has undergone significant operational and strategic transformation over the last year or so, including a number of acquisitions, including SDL and most recently the Obviously group.
• 2:29
  SPEAKER_03: It's sharpened its strategic focus and perhaps most importantly adapting to one of the most significant technology shifts in decades, generative AI.
• 2:38
  SPEAKER_03: Ben, welcome to the Business Case Podcast.
• 2:40
  SPEAKER_03: Thank you.
• 2:41
  SPEAKER_03: Well, we'd always like to start these conversations with an opening question of for our listeners who are less familiar with the business.
• 2:48
  SPEAKER_03: Can you give us a snapshot of what the business does today and why its services are increasingly important in a global digital economy?
• 2:56
  SPEAKER_01: Of course.
• 2:57
  SPEAKER_01: I guess you know the easiest way to think about RWS is when companies want to operate in different markets, in different languages, they need to make sure that they do so in a compliant manner, in a manner that is compelling for their customers in every market.
• 3:19
  SPEAKER_01: And that's what we provide as a strategic partner.
• 3:23
  SPEAKER_01: We help them operate safely and meaningfully around the world.
• 3:28
  SPEAKER_01: In the past, this meant mostly translating their content.
• 3:33
  SPEAKER_01: Now that content generation becomes almost free and unlimited, the most important element is trusting that your content actually means what you want.
• 3:46
  SPEAKER_01: And for many industries, that trust is the currency that they rely on.
• 3:54
  SPEAKER_01: And so this is really what we do across many different verticals, many different markets.
• 4:00
  SPEAKER_01: We are today the uh leader in helping those companies operate at scale internationally.
• 4:07
  unknown: Great.
• 4:08
  SPEAKER_00: Great.
• 4:08
  SPEAKER_00: Well, um quite a few activities within the group, Ben.
• 4:12
  SPEAKER_00: You've got language services, content solutions, IP services, and technology.
• 4:17
  SPEAKER_00: But I suppose for investors really trying to pinpoint where the value is in the business, um, you know, what what how what would you pinpoint?
• 4:27
  SPEAKER_01: I would say I would look at it at three main things.
• 4:32
  SPEAKER_01: Um the first one is the high-stakes work.
• 4:35
  SPEAKER_01: Uh and if you think of all the regulated industry uh where being wrong is very expensive.
• 4:44
  SPEAKER_01: Uh it's uh a wrong word means a patent is void.
• 4:48
  SPEAKER_01: Uh regulatory filing uh can get you into trouble.
• 4:52
  SPEAKER_01: And on that element, people don't shop on price, they shop on trust.
• 4:58
  SPEAKER_01: The second one is um our technology, our platforms.
• 5:04
  SPEAKER_01: This is really where most of the industry runs on our technology, on Trados and Language River, and that creates a very sticky relationship uh with our client, and it also creates for us a unique anchor into where the industry is going and being an actor into that uh development.
• 5:24
  SPEAKER_01: And the third element is uh data.
• 5:28
  SPEAKER_01: Uh we are producing, creating, curating data for the world of AI.
• 5:36
  SPEAKER_01: Uh, we're working with the biggest LLM uh builders with corporate so that they have the right data to make their own enterprise data feel more humans.
• 5:47
  SPEAKER_01: Those are really the I think the three most valuable assets and quality that RWS is doing.
• 5:52
  SPEAKER_00: It's quite a fragmented market um right across the world, lots of different competitors.
• 5:58
  SPEAKER_00: Um as an outsider, a lot of them seem to be quite similar.
• 6:01
  SPEAKER_00: But what what really differentiates RWS from those other companies?
• 6:07
  SPEAKER_01: I would say really at the high level, it's scale and trust.
• 6:11
  SPEAKER_01: Uh operating in uh I think we are we're we're paying people in 180 different uh countries is really hard.
• 6:20
  SPEAKER_01: It's in itself uh a uh uh a difficult uh setup to have.
• 6:26
  SPEAKER_01: Uh and trust is something that you can't get uh overnight.
• 6:29
  SPEAKER_01: Uh the relationship that we have with our with our biggest clients spans uh decades because we've been organized into that uh trust uh element.
• 6:42
  SPEAKER_01: Uh we know that the work that we do, you know, if a company asks us to translate something in Japanese, uh they won't review it in a way uh when it hits the market, if there's something wrong, uh that's gonna be the problem.
• 6:59
  SPEAKER_01: And so we are we're creating some complex workflow, complex systems to make sure that uh it doesn't get wrong.
• 7:07
  SPEAKER_00: So you've been with the company um over a year now.
• 7:11
  SPEAKER_00: You you must have met lots of customers and had exactly these types of conversations.
• 7:15
  SPEAKER_00: You know, what would you say?
• 7:16
  SPEAKER_00: What are the characteristics that make those customer relations particularly valuable and durable?
• 7:22
  SPEAKER_00: Yeah.
• 7:23
  SPEAKER_01: I think you know, at the heart, we are our our work, our technology, our workflows are deeply wired into our clients.
• 7:33
  SPEAKER_01: Uh we sit into their content pipelines, either through our technology or through direct uh pipes to our services.
• 7:43
  SPEAKER_01: Um we've built for them specific data, we manage their translation memory, their linguistic uh environment over time, and that's the more they've been we've been working with them, the better the quality uh has grown.
• 8:00
  SPEAKER_01: And so, you know, for those customers, change it's not about changing a vendor, it's really taking a risk of uh putting away years of this uh trusting relationship.
• 8:13
  SPEAKER_00: And presumably it's about this very specific domain knowledge and expertise in quite narrow um areas of um of information.
• 8:22
  SPEAKER_01: Yeah, that's true.
• 8:23
  SPEAKER_01: Um I should have mentioned, but you know, translating uh translating in uh German uh is one thing, but translating for mechanical engineers, chemical engineers, uh legal work, that's all very, very specific.
• 8:40
  SPEAKER_01: And you need to understand the context, you need to understand the type of regulation that the customer will be exposed to.
• 8:47
  SPEAKER_01: Uh and this is this granularity at scale that makes us special.
• 8:52
  SPEAKER_01: It's about finding the right expert in German that will be able to understand whether that content is acceptable or not in an engineering environment, for example.
• 9:02
  SPEAKER_00: And you know, maybe AI can get you 99.5%, but it's the the the the remaining half a percent that can really catch you out if you're a business.
• 9:11
  SPEAKER_01: AI, AI, I mean, I'm a big fan.
• 9:14
  SPEAKER_01: Uh let's get this out of the way.
• 9:16
  SPEAKER_01: I love AI, uh I spend my life on it.
• 9:19
  SPEAKER_01: Um and a but AI is m is automating one part of the process, and that's something that's um uh badly understood.
• 9:29
  SPEAKER_01: Uh the if you're a translator, you're not trained to learn by heart two dictionaries.
• 9:37
  SPEAKER_01: Uh you know, it's not about A to B and B2A.
• 9:40
  SPEAKER_01: Uh it's about understanding the context, the culture, it's about understanding the flow, how to make a message resonate.
• 9:47
  SPEAKER_01: Uh and that's true for marketing content, it's true for technical content.
• 9:52
  SPEAKER_01: And so um AI is really enabling us to work faster, uh to automate a whole part of the work, but AI doesn't sign an output.
• 10:04
  SPEAKER_01: Yeah, it doesn't put your name on it.
• 10:07
  SPEAKER_01: And so you have to do this, you have to validate that work, and that's the accountability that we're taking.
• 10:14
  SPEAKER_00: Yeah, so it's almost kind of a certification um stamp that you're you're giving.
• 10:19
  SPEAKER_01: I I I love that you're saying that.
• 10:20
  SPEAKER_01: You know, uh a lot of our industry is uh uh a lot of what we do is very similar to the tick industry, the testing, inspection and certification.
• 10:30
  SPEAKER_01: Uh we're testing the output of LLM, we're regularly inspecting how people are talking about brands around the world, we're certifying some translations so that yeah, it's uh it's safe to be used uh in a specific market.
• 10:45
  SPEAKER_03: I think uh I mean you you're a one of a number of businesses that a lot of investors are sort of debating if you're an AI beneficiary or or a or a sort of it's a negative for your business.
• 10:55
  SPEAKER_03: And I I think some of those components around certification, you know, where you sit within the audit process are probably characteristics that don't come out enough, I think.
• 11:05
  SPEAKER_03: Um for business anyway.
• 11:06
  SPEAKER_01: No, I agree.
• 11:08
  SPEAKER_03: Um well Ben, I'd love us to get into your sort of strategic framework.
• 11:12
  SPEAKER_03: Um back in December 2025, you you relaunched or you presented a new sort of strategic way of thinking for the group, and we would love to sort of run through them one by one.
• 11:22
  SPEAKER_03: And your first strategic priority is what you call go-to-market.
• 11:26
  SPEAKER_03: So, just in practice, what does this mean?
• 11:28
  SPEAKER_03: And then I guess culturally or organizationally, what have you needed to change in order to deliver the go-to-market approach or strategy?
• 11:35
  SPEAKER_01: So, go-to-market is the fancy word that uh enterprise software companies use to describe how they sell their product.
• 11:44
  SPEAKER_01: Uh to who do you sell?
• 11:46
  SPEAKER_01: Uh, how do you position it, how you price it, how you organize your sales team, how you pay your sales team, how you do that.
• 11:53
  SPEAKER_01: Um this is something that I think hasn't been taken uh seriously enough with RWS, and especially not adapted enough post the acquisitions of SDL in particular.
• 12:07
  SPEAKER_01: Uh, you know, a lot of the work I've done when I joined back in January 25 was understanding all of our assets, all of the type of product, all of the type of solutions that we were uh building, uh, who was selling them, where, to what type of company.
• 12:22
  SPEAKER_01: And uh and there hasn't been enough work to structure and help our sales team focus on the right target, on the right solutions.
• 12:32
  SPEAKER_01: And so this is really what we've put in place.
• 12:35
  SPEAKER_01: Reorganizing the group around those three segments, each of them uh speaks to a different type of buyer, uh, unifying all of the sales organization, the bonus structure of the team, um, and have created a central go-to-market team whose role is really to support our sales out there, uh, give them the right selling tools, the right training, the right pricing, uh tracking their activity, guiding them towards the best possible target, feeding them with leads uh with our new lead generation.
• 13:17
  SPEAKER_03: Right.
• 13:17
  SPEAKER_03: And historically you did did some of the pricing decisions sit outside of the center and you've brought it back in, or is it it was it was done with each uh division.
• 13:27
  SPEAKER_01: I have uh we're we we've hired a new pricing uh person.
• 13:32
  SPEAKER_01: Pricing, you know, it can be a formidable tool.
• 13:34
  SPEAKER_01: Uh what's your uh price elasticity?
• 13:37
  SPEAKER_01: Yeah, um how do you reflect uh the long-term of the the initial cost of acquiring a customer, etc.
• 13:44
  SPEAKER_01: I think uh we needed a bit more science around the around this.
• 13:48
  SPEAKER_03: And does sort of the idea of lifetime value does that fit into how you think about pricing?
• 13:53
  SPEAKER_01: I mean it does completely, especially for technology uh customers.
• 13:58
  SPEAKER_01: When uh we launched uh three months ago LanguageWeaver Pro, uh it's it's it's a choice for a customer to move to LanguageWeaver Pro.
• 14:07
  SPEAKER_01: It requires some uh setup, some wiring, and so that might be an initial investment on our side.
• 14:14
  SPEAKER_01: Uh but the long-time value of that customer uh will uh will be beneficial.
• 14:20
  SPEAKER_03: Yeah.
• 14:20
  SPEAKER_03: And and then just thinking about your your customers and your clients, uh how how have they changed how they buy your your services over time?
• 14:29
  SPEAKER_03: And then secondly, are they you know how how how do you think about your clients in terms of sort of looking for integrated solutions?
• 14:35
  SPEAKER_03: Because as you said, you've got you've got a suite of products versus a kind of individual services.
• 14:40
  SPEAKER_01: So I I think that's the that's what the industry is really going through at the moment.
• 14:46
  SPEAKER_01: It's it went from a very transactional type of transaction uh with an industry that's that's one of the things that shocked me when I arrived.
• 14:55
  SPEAKER_01: Uh the whole industry is priced per word.
• 14:58
  SPEAKER_01: So I give you uh a thousand words to translate, it's uh I wish one pound a word, then this is it.
• 15:06
  SPEAKER_01: Um and that's I mean that's that's a terrible way.
• 15:10
  SPEAKER_01: Uh even for uh for customers, imagine if you go to the restaurant uh and you have to uh and they price you per bite.
• 15:18
  SPEAKER_01: It doesn't taste uh as good.
• 15:20
  SPEAKER_01: No.
• 15:21
  SPEAKER_01: And so what customers really want now is a solutions that is faster, uh where they don't have to think so hard on which content is translated in how many languages.
• 15:33
  SPEAKER_01: Uh we are we're they're looking for a partner that is going to enable their content deployment strategy.
• 15:40
  SPEAKER_01: Uh so that's a very different type of relationship.
• 15:43
  SPEAKER_01: So almost a bit more subscription type approach, but yeah, it's a not quite it's a subscription uh and and that I think is a concept that or licensing maybe, I don't know.
• 15:54
  SPEAKER_01: Yeah, but there's a bit of a few things.
• 15:56
  SPEAKER_01: It's a concept that uh the market is definitely struggling with, is uh is a mix of technology and service.
• 16:04
  SPEAKER_01: Uh because you need the human in the group, and I think that's what makes us very special.
• 16:09
  SPEAKER_01: You need somebody that will certify, that will review, that will create, that will bring that expertise that you need.
• 16:15
  SPEAKER_01: Uh in some cases.
• 16:17
  SPEAKER_01: In many cases, you know, if it's uh understanding the FAQ of your of your website in a hundred languages, I think it's good enough.
• 16:25
  SPEAKER_01: Yeah, there's no legal risk.
• 16:27
  SPEAKER_01: But uh for some cases you need both.
• 16:30
  SPEAKER_01: And so you know the solutions are both technology and service, they're harder to price, uh, but that's what's cre makes us quite special, also.
• 16:39
  SPEAKER_03: Just picking up on uh something that Mark asked you a minute ago, we we were talking about sort of where AI is good enough, and you just sort of uh alluded to it there.
• 16:47
  SPEAKER_03: I was talking, I was listening to uh uh another podcast um recently with Benedict Evans, the technologist, and he he was talking about the challenge of AI is that it's uh it's only average and it doesn't have the nuance and subtlety.
• 16:58
  SPEAKER_03: And you you've presented your addressable market metrics, you know, five billion for um 15 billion, two or three billion on on uh protect.
• 17:11
  SPEAKER_03: When you're thinking about addressable market, how how much do you think is at risk from AI being good enough and actually the bit where you're really adding value is around the authentication, the certification, the the technical expertise.
• 17:24
  SPEAKER_03: That that really is a very sort of protected part of your market versus I'm guessing a chunk of the market which could just be eaten away with good enough because it's doesn't have legal ramifications, it doesn't have sort of technical complexities.
• 17:37
  SPEAKER_01: Yeah, it's a tough question because you have to size many different things.
• 17:41
  SPEAKER_01: Yeah, sure.
• 17:41
  SPEAKER_01: Uh just directionally, maybe to help us understand.
• 17:45
  SPEAKER_01: Directionally, what we see currently is that the explosion of content compensates for the uh operational aid critics.
• 17:55
  SPEAKER_01: Uh we've um we've done a survey recently and we found out that 20% of the localization budget by uh I think it's a series of uh hundreds of uh large companies, 20% of their localization budget is wasted on correcting what AI was generating.
• 18:18
  SPEAKER_01: Content, uh uh AI generates enormous amount of content, but there's some mistakes.
• 18:24
  SPEAKER_01: Uh for sure.
• 18:26
  SPEAKER_01: Uh I was uh invited uh on a weekend uh just now, and uh the host sent us uh a program that was written by AI, it's fine.
• 18:35
  SPEAKER_01: But in the middle, uh it says we had to drive southbound, where obviously we had to drive northbound.
• 18:41
  SPEAKER_01: And it's you know it's ridiculous, and it makes, I don't know, it makes this hesitation really bad.
• 18:46
  SPEAKER_01: Uh if it's a human error, people understand if it's a if it's a if it's an AI error, people are uh really don't accept that because nobody can take responsibility of that mistake.
• 18:58
  SPEAKER_00: Well it makes mistakes with such confidence as well.
• 19:02
  SPEAKER_00: When it's a human, there's always a bit of nuance, and you can tell, well, you're not quite sure about that, but AI, it's kind of this is the answer.
• 19:07
  SPEAKER_00: It's the most assertive layer out there.
• 19:11
  SPEAKER_03: I mean, I think this is kind of a cultural question, isn't it?
• 19:13
  SPEAKER_03: More more than anything else, because again, there's i if you look at automated driving, uh completely not your business, but much more safe safety.
• 19:22
  SPEAKER_03: Absolutely.
• 19:23
  SPEAKER_03: The success rates are much, much higher than human driving, but it seems to be an unacceptable risk of one accident is is one too many, whereas in human traffic we don't seem to have that problem.
• 19:33
  SPEAKER_01: It's it's a brilliant uh uh analogy.
• 19:35
  SPEAKER_01: It's that's exactly that.
• 19:37
  SPEAKER_01: And that's what makes uh autonomous driving so hard to to deploy.
• 19:40
  SPEAKER_01: Because at the end, you need to be able to explain, to understand, to uh the us as humans, we're not ready to be governed by AI.
• 19:50
  SPEAKER_01: We're we're going to be in control.
• 19:52
  SPEAKER_01: And so if something goes wrong, we need to know why and how to uh to to to to solution for it in the future.
• 19:58
  SPEAKER_03: I've taken us down a rabbit hole.
• 20:00
  SPEAKER_03: Let's bring us back.
• 20:01
  SPEAKER_03: Um just it just thinking about your sort of cross-selling.
• 20:04
  SPEAKER_03: You you were just talking earlier about your go-to-market and and looking at solutions.
• 20:07
  SPEAKER_03: You you've you've made a number of acquisitions.
• 20:10
  SPEAKER_03: Um SDL obviously.
• 20:14
  SPEAKER_03: How much is this around cross-selling, incremental capability?
• 20:18
  SPEAKER_03: You know, you've got a large installed base, you work with a hundred, you know, large, large brands.
• 20:22
  SPEAKER_03: Uh what's the cross-selling opportunity as you bring some of these acquisitions into the business?
• 20:27
  SPEAKER_01: I mean, they're enormous.
• 20:29
  SPEAKER_01: Um, I think our most prizes is our client list.
• 20:34
  SPEAKER_01: Yeah.
• 20:34
  SPEAKER_01: Uh I've just uh hired uh uh a gentleman that was working with me at Google Cloud.
• 20:42
  SPEAKER_01: Uh and when he joined, he saw the client list.
• 20:44
  SPEAKER_01: He says, This is crazy.
• 20:46
  SPEAKER_01: I I have the best playground I've ever had.
• 20:49
  SPEAKER_01: Nice.
• 20:49
  SPEAKER_01: And so the you know, when you have those clients, you're thinking on how you can uh uh offer them more solutions.
• 20:58
  SPEAKER_01: Uh the acquisitions that we've done, obviously uh there was a very strong cultural uh match because uh even though it's a small and uh young company, they've only been working with large enterprise clients defending their uh treasured assets, their trademark and uh so you know they had customers we didn't have, and vice versa.
• 21:23
  SPEAKER_01: And so generally uh this this cross-selling is important because it also allows us to elevate our pitch to a more C-suite uh in the company.
• 21:33
  SPEAKER_01: Uh it's easier now for us to go to a chief marketing officer and tell them I'm gonna help you deploy your brand safely, uh, your content, I'll monitor your product infringement, etc.
• 21:46
  SPEAKER_01: So you you become more of a strategic partner.
• 21:48
  SPEAKER_03: Aaron Ross Powell And thinking about the success or measuring success of go to market, you know, you talked about um one of your key objectives is being very focused and delivering at pace.
• 21:58
  SPEAKER_03: Is this about Winning new customers, is it increasing share of wallet?
• 22:03
  SPEAKER_03: Is it um you know finding new product initiatives?
• 22:06
  SPEAKER_03: So how how should we how should investors think about go to market as a sort of from a financial perspective?
• 22:12
  SPEAKER_01: I mean we're we're trying to uh to do uh all three.
• 22:16
  SPEAKER_01: Uh new customers are important because they create new cohorts every year that you can build on.
• 22:24
  SPEAKER_01: Uh and they more than compensate for your customers that either get acquired, don't make it, etc.
• 22:32
  SPEAKER_01: So it's important to keep renewing your customer base.
• 22:35
  SPEAKER_01: Um and being able to sell them more is important.
• 22:38
  SPEAKER_01: I think you know that's why, in terms of KPI, on what how do you measure your go-to-market?
• 22:45
  SPEAKER_01: I can bore you with all kinds of financial KPI.
• 22:48
  SPEAKER_01: At the end of the day, what we are looking at is do our big customers spend more or less with us year on year?
• 22:56
  SPEAKER_01: And are they happy with our service?
• 22:58
  SPEAKER_01: Yep.
• 22:59
  SPEAKER_01: Uh and on both elements, uh we posted that they're spending more.
• 23:06
  SPEAKER_01: Uh and the the net promoter score from our customers is uh has never been as high as our most recent uh survey at uh 53.
• 23:16
  SPEAKER_01: And so you know I think we're doing the right thing for them.
• 23:19
  SPEAKER_01: Great.
• 23:20
  SPEAKER_00: Right.
• 23:21
  SPEAKER_00: Well let's let's move to the second strategic priority, which is innovation and AI.
• 23:26
  SPEAKER_00: And I'd be interested in how um the discussion with customers has changed on generative AI over the last couple of years.
• 23:35
  SPEAKER_00: Because I guess you've got several components.
• 23:36
  SPEAKER_00: You've got a cost saving, opportunity, productivity enhancement, or um uh a growth enabler.
• 23:43
  SPEAKER_00: So how has that conversation changed?
• 23:46
  SPEAKER_01: Yeah, uh so we are lucky to talk to uh many, many large enterprise.
• 23:52
  SPEAKER_01: Um what we feel is the conversation started with uh a bit of uh excitement and craze, and you can do so many new things with AI, and let's do uh as many uh proof of concept as possible.
• 24:07
  SPEAKER_01: To okay, let's try to build solutions uh that work in our enterprise environment.
• 24:14
  SPEAKER_01: To uh, this is really hard.
• 24:17
  SPEAKER_01: Uh maybe we should push our partners to do it on our behalf.
• 24:22
  SPEAKER_01: And that's really what we see also in the uh content deployment space that we work in.
• 24:29
  SPEAKER_01: We had many customers trying to build inside their own translation engine, translation tool.
• 24:35
  SPEAKER_01: Um, and they realized that the the whole process workflow verification, validation is actually very costly, very hard to do.
• 24:45
  SPEAKER_01: Uh so do they invest more in the solutions or do they ask us to do this for them?
• 24:51
  SPEAKER_01: And when they see the pace at which we innovate, because we are focused just on this uh element, you know, we're not trying to build another CRM, we're not trying to build another finance uh uh system.
• 25:04
  SPEAKER_01: Um they realize that you know they have better spend their effort of AI deployment on their core business and leave that content deployment to uh to partners like us.
• 25:15
  unknown: Yeah.
• 25:16
  SPEAKER_00: Well, I suppose the the technology is evolving so rapidly, you must have to be very focused on not trying to go down lots of different rabbit holes and being diverted.
• 25:24
  SPEAKER_01: Yeah.
• 25:25
  SPEAKER_01: Uh yeah, that that's probably where I learned a lot on this.
• 25:30
  SPEAKER_01: Uh I I'm I'm new to the language industry.
• 25:32
  SPEAKER_01: Uh uh I I didn't work in the language industry before joining RWS in uh uh last January.
• 25:39
  SPEAKER_01: Um and so I got excited about some innovation, and when you benchmark them with the experts, they explain you why it's not working in an enterprise environment.
• 25:49
  SPEAKER_01: And so I think that's that's also this uh level of uh consulting that we're bringing to our client.
• 25:54
  SPEAKER_00: So given these opportunities, you know, where does RWS really want to focus investment?
• 25:59
  SPEAKER_00: You know, where are you investing most heavily at the moment?
• 26:02
  SPEAKER_00: Take advantage of the opportunities.
• 26:04
  SPEAKER_01: We have really unique skills when it comes to cultural understanding or linguists.
• 26:11
  SPEAKER_01: Again, they're not uh glorified dictionaries, they are deep cultural experts, uh both in terms of culture, local languages as you understand it, but also uh in a specific vertical, you know, uh and uh uh a chemist, a chemist in Finland is a hard resources to find.
• 26:34
  SPEAKER_01: So we have those uh uh assets and we have the the trust of our clients.
• 26:40
  SPEAKER_01: So we want to invest only in things that will help us operate those uh assets at a bigger scale, and that's really AI and data.
• 26:51
  SPEAKER_01: Uh so the innovations that we're doing is about creating products that will allow our experts to do their job faster.
• 27:01
  SPEAKER_01: We don't think that we should build our own LLM.
• 27:05
  SPEAKER_01: This is uh something that's uh just too risky to do, too expensive.
• 27:11
  SPEAKER_01: The partnership we've uh signed with Cohere is, in my opinion, uh the best of both worlds, where we're able to uh rely on their some of the best data scientists in the world uh and partner with them to create a bespoke model for us that's that's taken in our expertise, our training, our data to create a model that is performing better than anything uh in the market today.
• 27:38
  SPEAKER_03: Could you just uh maybe tell our audience what Cohere does?
• 27:42
  SPEAKER_01: Yes, so Cohere is uh think of uh they're a AI company that has been focusing on building uh large language model for for a while.
• 27:54
  SPEAKER_01: Uh they've they're they're a bit less known than uh your OpenAI uh anthropic of the world.
• 28:03
  SPEAKER_01: Yeah.
• 28:04
  SPEAKER_01: But because they've been 100% focused on enterprise AI, enterprise solution.
• 28:10
  SPEAKER_01: And so they're they're creating models that are really meant for enterprise to uh to use.
• 28:18
  SPEAKER_01: And that's that has different constraint uh than a um a consumer AI.
• 28:26
  SPEAKER_01: Um in our case, you know, you don't need all the constraint that you would put in a chatbot so that it doesn't tell uh a human to do something stupid.
• 28:39
  SPEAKER_01: Uh the the model we've built is optimized for localization.
• 28:45
  SPEAKER_01: And so it it's lighter, it's faster, it's more accurate because it's been only uh trained for that.
• 28:53
  SPEAKER_00: But just out of interest, um you know, is it becoming important given um a lot of your clients have quite sensitive information, they want to retain control of the information, that they really want on-premises local solutions?
• 29:07
  SPEAKER_01: That's a great question.
• 29:08
  SPEAKER_01: I think that that question is uh that theme is developing very fast.
• 29:14
  SPEAKER_01: Um a lot of our clients, a lot of people we talk to have been shocked or at least surprised by uh the decision of the US government to block access to uh the latest anthropic model, for example.
• 29:30
  SPEAKER_01: Um it shows that you know it can happen.
• 29:34
  SPEAKER_01: And so how do you manage this?
• 29:36
  SPEAKER_01: How do you if you if you if you're building enterprise product on a model and suddenly somebody can cut the access to it, that's a bit of a problem, strategic problem.
• 29:46
  SPEAKER_01: The partnership we have with Cohere is great uh in that aspect for two reasons.
• 29:52
  SPEAKER_01: One, it's uh it's a non-US model.
• 29:55
  SPEAKER_01: Uh Cohere is a Canadian company.
• 29:58
  SPEAKER_01: Um and we've deployed the model um in European sovereign data center, US, Asia.
• 30:06
  SPEAKER_01: Um and also the model is small enough that it can be deployed on-prem on only two GPUs.
• 30:13
  SPEAKER_01: So very accessible uh type of model.
• 30:16
  SPEAKER_01: But this sovereign question, I think, is is a key one.
• 30:19
  SPEAKER_01: Uh I think that's what they've been talking about at the G7 for a while or so.
• 30:24
  SPEAKER_00: But presumably that means that your role actually becomes a bit more important, or at least there's a um a moat around it, given that this isn't it's not all just gonna go on the cloud to Anthropic or or Google, yeah?
• 30:36
  SPEAKER_01: Yeah.
• 30:36
  SPEAKER_01: Uh it's uh people realize also that you you cannot put all of your content onto Chat GPT and just hope for the best.
• 30:45
  SPEAKER_01: You know, the the that that aspect of uh where is my content going?
• 30:49
  SPEAKER_01: Is it being used for training purposes, etc.?
• 30:52
  SPEAKER_01: Uh you know, as enterprises develop their understanding of what AI is about, they are creating more and more requirements on how it should be used, what data, how for how, etc.
• 31:04
  SPEAKER_01: And that makes our enterprise solution more fit for purpose.
• 31:08
  SPEAKER_03: Just uh building on Mark's point there though.
• 31:10
  SPEAKER_03: So I mean it it from a again, I'm not a technology, so please forgive, this is a simple question.
• 31:14
  SPEAKER_03: But it as as I understood it, I as a client, as an enterprise, I I have a choice of I can I can have your technology sitting in my tech stack, or I can be in the cloud, or I can there's a third option, I can't remember what that was.
• 31:30
  SPEAKER_03: Do if more people are choosing the ward garden approach to from sovereignty perspective, does that change the investment requirements for you as a business or not really, or you just be priced for it accordingly?
• 31:44
  SPEAKER_01: Um not really because uh the the model think of it as the brain, and we can deploy the brain into different environments.
• 31:51
  SPEAKER_01: And so that's uh more and more when we say on-prem, and there's less and less companies who want on-prem, they want it on private cloud.
• 31:58
  SPEAKER_01: So it's uh it's it's a air gap type of cloud that they have access to.
• 32:05
  SPEAKER_01: Um you know it's uh it's like health data.
• 32:10
  SPEAKER_01: Uh you don't want to share it, but if you share it, you get access to better research.
• 32:17
  SPEAKER_01: And so I think we are encouraging also uh in some cases for content that's not private.
• 32:23
  SPEAKER_01: Uh I think there will be a model where customers feel that they they're okay to share not all the data, some type of data, you know, some some adaptation, what it means, so that we can provide them even better model on an ongoing basis.
• 32:39
  SPEAKER_00: We could probably spend the next hour talking about AI because it's just so fascinating and pervasive almost every conversation you you have now.
• 32:46
  SPEAKER_00: But so taking this all together, where do you think the the biggest misconceptions investors have about AI and its impact on RWS?
• 32:57
  SPEAKER_01: Yeah, but very simply, I think most people think of RWS as a translation company.
• 33:02
  SPEAKER_01: Translation is free because of AI.
• 33:04
  SPEAKER_01: Yeah, so there's no reason for RWS to exist.
• 33:07
  SPEAKER_01: Uh that's the biggest misconception.
• 33:10
  SPEAKER_01: Um RWS is the partner that allows companies to use AI for their translation in a trustworthy manner.
• 33:19
  SPEAKER_01: Uh it's the partner that provides you the outcome, the accountability for the outcome.
• 33:25
  SPEAKER_01: Uh, and that's really what matters the most for enterprise today.
• 33:29
  SPEAKER_00: So if we just sort of step away from current trading, current results, you just had a results statement.
• 33:36
  SPEAKER_00: You know, looking three to five years out, you know, how could the the business, you know, how differently could it look as a result of AI and the new services and um you know uh customer products that you could be providing?
• 33:50
  SPEAKER_01: We've tried to um to give uh a vision of uh where we came from, where we're today, and where we're going uh in our end-of-year result.
• 34:01
  SPEAKER_01: Um the the the thing that I think is gonna be most important is you'll see the share of our AI product and services continue to increase.
• 34:11
  SPEAKER_01: It it now accounts for about a third of our revenue.
• 34:14
  SPEAKER_01: And the prediction we've had was it it will be over 50% in the near future.
• 34:20
  SPEAKER_01: So we are we are providing more and more uh AI solutions.
• 34:25
  SPEAKER_01: Uh in comparison, the the share of our traditional localization work is is gently decreasing, uh but will stay probably in the range of 20% because of all of the regulated market, because of the the complex language.
• 34:43
  SPEAKER_01: Uh as companies expand more and more internationally, they go into markets that are badly covered by AI.
• 34:49
  SPEAKER_01: Uh AI doesn't speak very well swayed.
• 34:53
  SPEAKER_01: And so you you need more experts for for this.
• 34:57
  SPEAKER_01: And we have a few customers that just do not want to have uh AI in the loop.
• 35:03
  SPEAKER_01: They want the authentic of human, and so they they they ask us to do this uh work manually.
• 35:09
  SPEAKER_01: But you know, to your question, in five years you'll see more AI revenue uh and more database revenue as well.
• 35:17
  SPEAKER_03: Great.
• 35:17
  SPEAKER_03: Well, let's turn to your third strategic priority, uh efficiency and operational excellence, and we'll we'll probably spend uh only a few minutes on this one.
• 35:26
  SPEAKER_03: In terms of the biggest opportunities to drive efficiency, sort of what are the main areas?
• 35:30
  SPEAKER_03: And I guess a related question, and again this comes back to focus and prioritization, you know, you've been quite busy as a management team sort of integrating some significant deals through the MA um side of things.
• 35:42
  SPEAKER_03: So how how much has that has that hindered you or in your ability to sort of drive operational efficiency?
• 35:51
  SPEAKER_01: Yeah, uh we're we are a company like uh any other.
• 35:55
  SPEAKER_01: Uh we have a lot of uh process internally, uh we have a lot of tools sometimes that are disjointed because of uh past acquisitions.
• 36:04
  SPEAKER_01: That's the reality of uh all enterprise today.
• 36:06
  SPEAKER_01: Uh and so because we are an AI partner to the large corporate, uh we also want to make sure that we apply and we uh say we uh eat our own medicine.
• 36:18
  SPEAKER_01: Uh so we have a very uh ambitious program internally to create uh we call it an AI landing zone, uh, a platform that allows us to deploy tools uh faster internally, automation tool.
• 36:36
  SPEAKER_01: I'll give you an example.
• 36:37
  SPEAKER_01: That that landing zone, think of it, it's it's connecting to all of our systems, which means that if uh the marketing team creates a uh uh a tool for sales team to uh acquire new customers, uh they have the right security, the right logins, uh it's connecting to the right data sets internally, it automatically updates our Salesforce, etc.
• 37:02
  SPEAKER_01: So we have a lot of opportunity to modernize our infrastructure with compared to what happened in the past, very limited cost.
• 37:11
  SPEAKER_01: You know, it's not uh you you mean cost to deliver the transformation?
• 37:15
  SPEAKER_01: Cost to deliver the transformation, exceptional charges.
• 37:18
  SPEAKER_01: Yeah, yeah.
• 37:19
  SPEAKER_01: We see those exceptional charges really uh reducing compared to what was spent in the past, uh, because you can create intelligent layers on top of your historic systems to make them work harder, uh, to pull the right data, to apply the right agentics so that it does the work that's painful uh to do.
• 37:40
  SPEAKER_01: Uh but uh we're modernizing all of that infrastructure in a very sensible way.
• 37:46
  SPEAKER_03: So if I was just going to be looking at your financial statements and your PL, what what are the cost lines that are gonna look fundamentally different through this efficiency and operational excellence program, or is that not the right way to think about it?
• 37:58
  SPEAKER_01: No, it is the right way, but you'll see the benefit uh at three different levels.
• 38:04
  SPEAKER_01: Uh the gross margin, uh, as our as our solutions become more technology enabled, the balance between technology and service uh uh falls more on the technology side, that increases your your gross margin.
• 38:20
  SPEAKER_01: Uh our central function need to be a lot more efficient, and so the overhead cost uh will be uh leaner.
• 38:28
  SPEAKER_01: And uh as we finish our transformation, uh the except the line of exceptional that we have, uh hopefully you should have a zip yet.
• 38:37
  SPEAKER_03: Good good for the cash flow.
• 38:38
  SPEAKER_01: Exactly.
• 38:39
  SPEAKER_03: Um and then just thinking about sort of the margin structure of the business then.
• 38:43
  SPEAKER_03: So you've got your you've got your three different business units, um, generate, transform, and protect, all of which have got quite different operating margins as they sit today.
• 38:52
  SPEAKER_03: Obviously, the mix of your business is going to change over the next three or three years or so.
• 38:57
  SPEAKER_03: How should investors think about that sort of margin profile with with the efficiency layer sort of layered on top of that as you as you sort of go over the coming few years?
• 39:06
  SPEAKER_01: I I acknowledge that this is probably one of the difficult elements when you look at RWS, um because the average cost margin really doesn't tell you the story of the of the company.
• 39:18
  SPEAKER_01: Yeah uh each segment has a different profile, a different revenue model.
• 39:24
  SPEAKER_01: Uh what I would encourage you to do is to look at it as three engines that you know also help each other and compensate each other uh when need be.
• 39:36
  SPEAKER_01: Um last year we had uh very strong performance from uh one segment, uh less from another's.
• 39:43
  SPEAKER_01: And so I'm not trying that we we try to even it out, but uh the um the the power that we we have with those three segments that are more and more complementing themselves is what creates resilience uh for the long term.
• 39:58
  SPEAKER_03: Okay.
• 39:58
  SPEAKER_03: And then the um I think Mark made the comment earlier: you you operate in a pretty fragmented market, growth is clearly in important, and there's an opportunity for you to grow.
• 40:08
  SPEAKER_03: So, how how should how should investors think about the the need to reinvest some of those efficiency gains and savings to drive top line performance?
• 40:18
  SPEAKER_01: Um we work in a very competitive market, um but the um the market, as I said, is less and less transactional and more and more solution-based.
• 40:28
  SPEAKER_01: And as this happens, you need to provide the competitive solutions.
• 40:35
  SPEAKER_01: And so I think we are in a in a stage where innovation is key, where the the clients want to bet on the right horse.
• 40:44
  SPEAKER_01: And so we need to show and continue to to to to deliver those innovations.
• 40:49
  SPEAKER_01: When you look at our RD costs, I think they are extremely reasonable uh given our size.
• 40:55
  SPEAKER_01: Because RD also has become a lot more efficient for us.
• 40:59
  SPEAKER_01: The the fact that we have in-house so many experts, we use them to create the product.
• 41:05
  SPEAKER_01: Uh the the the new platform that we're gonna launch this uh summer, I think has been built by a very tight team.
• 41:13
  SPEAKER_01: They probably haven't written a single line of code themselves.
• 41:17
  SPEAKER_01: Uh they've used all of the latest technology to develop this, uh, but they've created a product that's very unique because it's it's been it's been capturing the essence of the skill set that we have in the company.
• 41:31
  SPEAKER_00: Great.
• 41:32
  SPEAKER_00: Um well most of our guests um have uh managed public companies.
• 41:36
  SPEAKER_00: Um so we thought just a word on that.
• 41:38
  SPEAKER_00: Uh obviously, you've had a very successful career at some enormous technology companies.
• 41:43
  SPEAKER_00: You know, how have you found running um you know a relatively small uh listed company in the UK?
• 41:48
  SPEAKER_00: Like what have been the positives and negatives?
• 41:52
  SPEAKER_01: It's quite an experience.
• 41:54
  SPEAKER_01: It's quite an experience, but uh I must say that I quite enjoy the transparency and the discipline that it uh it forces you to have.
• 42:08
  SPEAKER_01: Even on the an AIM market where the rhythm is only every six months, you know, having this meeting, updating people uh creates a pace and uh and an honesty within the company that's that's incredibly uh valuable.
• 42:25
  SPEAKER_01: Uh yes, you know the share price can be frustrating.
• 42:29
  SPEAKER_01: Uh when you see a swing uh from one day and you haven't said anything, nothing has changed, you're on track, and the swings up or down actually.
• 42:39
  SPEAKER_01: Uh this is a bit frustrating, but uh you know once you you move past that, I think it's a it's a great uh regime to follow.
• 42:50
  SPEAKER_01: Um I think it's it's reassuring also for for our customers.
• 42:56
  SPEAKER_01: Uh we're very transparent and they know that we are a financially very viable partner to bet on.
• 43:03
  SPEAKER_00: Yeah, it gives it credibility, particularly given some of your customers over at the high-end regulatory uh certainly.
• 43:10
  SPEAKER_00: Yeah, yeah.
• 43:11
  SPEAKER_03: Great.
• 43:11
  SPEAKER_03: Well, I'd love to ask a few questions, sort of how you think about capital allocation and how you think about sort of shareholder value creation.
• 43:18
  SPEAKER_03: Um you you've got your sort of three strategic priorities, but I mean ultimately how how are they driving or translating into sustainable shareholder value creation from your perspective, Ben?
• 43:29
  SPEAKER_01: Yeah, so the three priorities, it's a great way to manage the the team in tender to direct them the right direction, but to point them the right direction, sorry.
• 43:39
  SPEAKER_01: Uh for shareholder, it's a very simple translation.
• 43:44
  SPEAKER_01: The go to market grows the top line.
• 43:46
  SPEAKER_01: Yeah.
• 43:46
  SPEAKER_01: Okay, that's what we're focused on.
• 43:48
  SPEAKER_01: We're growing the top line.
• 43:50
  SPEAKER_01: Uh we're improving the mix, we're improving the quality of earnings.
• 43:55
  SPEAKER_01: Um innovation brings that.
• 44:00
  SPEAKER_01: Sorry, innovation brings that quality of a mix because it drives more and more revenue towards technology revenue.
• 44:09
  SPEAKER_01: And efficiency expands the margin, which actually finances the rest.
• 44:16
  SPEAKER_01: So there's a direct correlation between the strategy and how it delivers value for our customers.
• 44:24
  SPEAKER_01: Top line, the moat in the middle, and the financing in the in the efficiency.
• 44:29
  SPEAKER_03: Yep.
• 44:29
  SPEAKER_03: And then I was sort of interested that you reset your dividend policy late last year when in late 25 when you um reset your strategic framework and you move to a progressive dividend.
• 44:40
  SPEAKER_03: Given you've been acquisitive as a business, given you operate in fragmented markets, what is the value of the dividend versus actually going out and acquiring, you know, using cash flow to go and acquire businesses and continue to consolidate the market?
• 44:55
  SPEAKER_01: I think RWS uh had kept a progressive dividend policy for over 20 years up until uh last December.
• 45:03
  SPEAKER_01: We reset it uh because we we needed to reflect the reality uh of the business.
• 45:09
  SPEAKER_01: Uh the the yield had become uh a bit unsustainable.
• 45:12
  SPEAKER_01: Um so we've reset it at a level that seems uh fair for also a long-term shareholder that are following us and for the for whose the dividend is important.
• 45:24
  SPEAKER_01: We are a highly cash-generative company.
• 45:27
  SPEAKER_01: Um and so if we can afford that dividend, I think that's the right thing to do for our shareholders.
• 45:34
  SPEAKER_01: Um we are not leverage either, also, uh less than half a ton of leverage.
• 45:40
  SPEAKER_01: Yep.
• 45:40
  SPEAKER_01: And so I think it's it's the right balance to uh to have a uh a great set of uh shareholders, but also uh enough uh cash to fund our growth.
• 45:53
  SPEAKER_03: And did um did did share buybacks come into the equation for you?
• 45:57
  SPEAKER_03: Because you know, as you said, you're you know somewhat frustrated by your share price, um you know, that there's an argument to be made in terms of allocating capital to to buy back your own shares?
• 46:08
  SPEAKER_01: It's always a uh a tool that's available uh to us.
• 46:12
  SPEAKER_01: Um I think at the moment um I uh we have bigger opportunity to invest in some innovation uh which will deliver uh a better return for shareholders.
• 46:25
  SPEAKER_03: And and as you said, your your cash generative business.
• 46:28
  SPEAKER_03: How should we think about the level of organic investment versus continued further MA opportunities in terms of allocation of that free cash flow generation?
• 46:38
  SPEAKER_01: The the biggest priority is to invest in our own business.
• 46:41
  SPEAKER_01: Organic.
• 46:42
  SPEAKER_01: Um especially now that we have uh an incredible uh management team with a lot more clarity on what we want to build and how to build it.
• 46:50
  SPEAKER_01: Um the the way we build product has become increasingly efficient, also, which uh uh you know pushes to fuel more of the of that development.
• 47:01
  SPEAKER_01: Um there's uh there's uh MA is of course also uh another tool uh that we have access to.
• 47:08
  SPEAKER_01: Uh we've shown in the last 18 months that we are incredibly rigorous in our MA approach.
• 47:14
  SPEAKER_01: Uh we've had uh the obviously acquisition uh was a highly competitive uh process, okay, and we've uh we've won it on uh incredibly good terms.
• 47:25
  SPEAKER_01: And so if if there's some opportunities out there, we'll we'll look for them.
• 47:29
  SPEAKER_01: But uh you know the way you should think about obviously, for example, is it probably accelerated our product roadmap by three years?
• 47:37
  SPEAKER_01: Right.
• 47:37
  SPEAKER_01: Uh and so just in in in terms of investment there, it's it's been uh easy trade-off tool to me.
• 47:44
  SPEAKER_03: The classic buy versus build kind of conversation.
• 47:46
  SPEAKER_03: Uh final question for me is just thinking about kind of what what what are the key, if you were gonna try and sort of pit pitch to the audience here, what are the key metrics that really capture the value that's being generated by uh RWS?
• 48:04
  SPEAKER_01: Um organic growth.
• 48:06
  SPEAKER_01: Uh organic growth is important because it shows that you're more and more uh important.
• 48:10
  SPEAKER_01: It's a it's a it's a hard one at the moment because some uh type of services uh are reducing.
• 48:17
  SPEAKER_01: Yeah.
• 48:18
  SPEAKER_01: And so you need to look at the granular aspect of the organic growth.
• 48:21
  SPEAKER_01: Yeah.
• 48:22
  SPEAKER_01: Margin trajectory is a clear one.
• 48:25
  SPEAKER_01: Um and uh and the the the epitamargin or the EBIT margin is really uh key to show how we are developing more and more efficiently.
• 48:35
  SPEAKER_01: Uh cash conversion, we're not doing that at the expense of uh cash conversion, uh which uh specifically in in this type of environment of unstability, uh uh high interest rate is is incredibly important.
• 48:50
  SPEAKER_01: And the the mixed shift towards technology data and AI.
• 48:54
  SPEAKER_01: Uh so if you look at our mix of revenue, you should look at this and uh great.
• 49:00
  SPEAKER_00: Great Ben.
• 49:00
  SPEAKER_00: Well, we're coming to the end of the podcast and it's been a great discussion.
• 49:04
  SPEAKER_01: But if we sort of um you know bring all of this together, um if we invited you back onto the podcast in three years' time, um, what would you need to have happened in the go to market strategy innovation and efficiency for you to consider the strategy of success on the on the go to market uh I would like to see clients buying more across the whole of RWS uh and so demonstrating that our portfolio of solutions are uh essentials to uh to our incredible set of uh of clients, and so that means delivering more consistent organic growth.
• 49:44
  SPEAKER_01: On innovation, I'd like to see a materially bigger slice of revenue coming from uh AI and data, uh, which will be uh a clear proof that we are trusted layer for enterprise AI.
• 49:56
  SPEAKER_01: And on efficiency, you know, uh I'd like to see uh revenue uh sorry margins uh up uh and an increased revenue per head, which uh which will show that the economics are visibly shifting towards software.
• 50:12
  SPEAKER_01: Uh if that if all those are true, I think uh I'll be a happy guest of yours in three years.
• 50:18
  SPEAKER_00: Well, it's it's good to hear.
• 50:19
  SPEAKER_00: And just finally, um you've had a really interesting career working in in a range of technology companies through periods of you know monumental change.
• 50:28
  SPEAKER_00: You must have had lots of mentors and advice along the way.
• 50:31
  SPEAKER_00: You know, what would you say is the best bit of business advice you've ever received?
• 50:36
  SPEAKER_01: Uh um I think the the motto or the the advice that I have top of mind all the time is uh is the one that I've learned from the leaders at uh Google who said that their job fundamentally was hire the best people, point them in the right direction, and get out of the way.
• 51:02
  SPEAKER_01: Uh and that's really what I've been trying to do also.
• 51:05
  SPEAKER_01: Uh the leaders that have attracted on the executive team are way better than me at what they do.
• 51:12
  SPEAKER_01: Uh we have created a clear direction and vision from the company.
• 51:17
  SPEAKER_01: I'm trying to get out of the way.
• 51:20
  SPEAKER_00: Well, on that note, um, thanks for a great discussion.
• 51:23
  SPEAKER_00: And uh Ben, thanks for being on the business case podcast.
• 51:26
  SPEAKER_01: Thank you very much, both of you.
• 51:27
  SPEAKER_01: Thanks a lot, Ben.
• 51:29
  SPEAKER_00: Well, Phil, um that was a great discussion with with Ben from RWS.
• 51:33
  SPEAKER_00: Um, what were your takes?
• 51:35
  SPEAKER_03: Yeah, look, um coming into this conversation, I was I was being to be honest, I was slightly struggling to understand what the business really does and what the opportunities are.
• 51:44
  SPEAKER_03: Because clearly the market has sort of put it into that AI loser bucket, and there's a there's a lot of companies that are obviously in that that that's that that have got AI kind of uh tail risks or or explicit risks to them.
• 51:59
  SPEAKER_03: I think Ben helped to tease out some of the moats that the business has.
• 52:04
  SPEAKER_03: So the whole kind of piece around compliance.
• 52:07
  SPEAKER_03: I think you know, uh one of his comments was, you know, if you get it wrong in translation, it can be really expensive.
• 52:13
  SPEAKER_03: You know, this is companies that could lose um, you know, their patent, they could make some sort of completely culturally inappropriate um you know literal translation.
• 52:23
  SPEAKER_03: And I think there is an opportunity here for the investment case to be a lot clearer.
• 52:29
  SPEAKER_03: I think that there's clearly a lot going on in this business.
• 52:32
  SPEAKER_03: Um Ben's been in the role for roughly 12 months, he introduced his new um strategic framework six months ago, back in December last 2025.
• 52:43
  SPEAKER_03: So they're they're on a journey, it's a very fragmented market, but I but I think I think there's there's more to be done around the simplification of the message, if I may.
• 52:54
  SPEAKER_00: I I think that's right.
• 52:55
  SPEAKER_00: Uh I mean I look at so many companies at the moment that are in this, um have this dynamic.
• 53:01
  SPEAKER_00: They used to be cash-generative, quite predictable businesses.
• 53:04
  SPEAKER_00: Yeah.
• 53:04
  SPEAKER_00: Now they're going through this uh AI uh transformation.
• 53:08
  SPEAKER_00: And actually there may be a positive um terminal value at at the end of it, but um it's very easy to not believe, and it's very easy to point to the negatives without uh looking at the corresponding positives.
• 53:21
  SPEAKER_00: But I think for this company, um a few things that sort of struck me, you know, this whole issue of certification, they're they're working for you know high-end companies that have got regulatory issues to deal with, legalistic issues to deal with, and actually having the certification of um of RWS is it's mission critical.
• 53:43
  SPEAKER_00: Yeah.
• 53:43
  SPEAKER_00: Um so I think that that that's important.
• 53:45
  SPEAKER_00: And you can see that from the quality of the uh the client list that they have.
• 53:49
  SPEAKER_00: I think the the the other point is this issue of sort of data sovereignty.
• 53:54
  SPEAKER_00: Um, yes, you've got these enormous AI companies in the States, Anthropic, um, Gemini, etc.
• 54:00
  SPEAKER_00: Um, but I think an increasing trend is going to be uh localization and um you know on-site capability rather than just pushing everything into the cloud, into these big uh models.
• 54:13
  SPEAKER_00: And I think for you know, for the companies that this company is um you know, is its its clients are, um, that means its role on a localized basis could actually be enhanced.
• 54:25
  SPEAKER_00: Um, but we won't really know that, you know, for for years rather than months.
• 54:30
  SPEAKER_00: So um you know, there's a good chance the market will still be glass half empty until we get some old data points.
• 54:36
  SPEAKER_03: Well, as you know, I mean disproving a negative is one of the hardest things to do as a public company, and I think that's where invest you you can be right, but you can be wrong for a long time.
• 54:47
  SPEAKER_03: Um, and I think that's probably one of the dynamics that we're that we're dealing with at the moment.
• 54:52
  SPEAKER_03: I mean, when when we were chatting um off off uh offline a few moments ago, I think you you you know you made the reference this could be like Intel inside, you know, it could be LWS inside, where it's kind of a real kind of sign of uh a seal of approval.
• 55:05
  SPEAKER_03: It's you know, they got they've got domain knowledge, they've got you know a lot a hell of a lot of data, they've got a a real blue chip list of clients that they work for.
• 55:14
  SPEAKER_03: And it and a lot of what they do is mission critical for for really large global enterprises, you know, and to give them some credit, you know, this is a still a profitable business, they're still cash generative, you know, they've they've gone out, they've got the balance sheet, they're driving consolidation.
• 55:29
  SPEAKER_03: You know, this obviously um acquisition that they did um earlier in Q1 2026, you know, it's roughly doubled the size of their addressable market within the protect the IP space.
• 55:40
  SPEAKER_03: And I think we probably didn't give that enough airtime that actually the whole IP topic in a in an increasingly digital world feels like that's more important rather than less important.
• 55:50
  SPEAKER_03: So I think there's a lot there's a lot to get your teeth into, but it but it's not an easy easy subject, I think.
• 55:57
  SPEAKER_00: Great.
• 55:57
  SPEAKER_00: Well I hope you enjoyed that discussion.
• 55:58
  SPEAKER_00: Uh lots more interesting guests coming in the next uh few weeks.
• 56:02
  SPEAKER_00: Uh if you will have any guest suggestions or want to leave a review, uh please do so on LinkedIn.
• 56:09
  SPEAKER_00: And until next time.