TIDMINF
RNS Number : 8460G
Informa PLC
09 November 2018
Press release
9 November 2018
Informa PLC
Trading Update
On Track for Full Year Expectations;
Growth Continuation Combined with Accelerated Integration
London: Informa (LSE: INF.L), the international B2B Events,
Information Services and Upper Level Academic Publishing Group,
today released a trading update for the 10-months ending 31 October
2018
Key Highlights
-- Trading in line with expectations and on track for the full year
-- Group underlying revenue growth of +3.9% for the ten months to 31 October 2018
-- Combination phase of Accelerated Integration Plan for UBM completed on schedule
-- 2019 Capital Markets Day confirmed for May 10(th) 2019 in London
Stephen A. Carter, Group Chief Executive, said: "At Informa, we
remain focused on delivering improving growth and returns, whilst
effectively combining UBM into the Informa Group to create brands
and platforms for future growth and scale."
He added: "With more than 60% of our revenue forward booked and
recurring, we have good forward visibility. Similarly, our
increased international breadth, in particular our strong positions
in the US, Asia and the Middle East, leave us well placed to meet
expectations."
He concluded: "As ever, the last two months of the year are
important, particularly in our more retail and transactional
businesses but we remain confident of delivering a further year of
growth in revenue, profit, earnings, dividends and cashflow."
Ten-Month Trading Highlights
We remain focused on delivery, reporting underlying revenue
growth for the standalone Informa Group, pre-combination, of +4.1%
in the ten-month period to the 31 October 2018. Over the same
period, the new combined Informa Group delivered underlying revenue
growth of +3.9%. Reported revenue growth for the 10-month period
was +31.8%.
This performance is in line with expectations, leaving us on
track to meet our ambition for underlying revenue growth of 3.5%+,
even with the continued macro uncertainties from US/China trade
relations, Middle East political tensions and Brexit negotiations,
amongst others. On the latter, the Group's international breadth
and relatively small revenue base in mainland Europe mean related
risks are low but we are still taking necessary precautions and
preparing for any potential knock-on impact in areas such as
employment, treasury and inventory management.
Academic Publishing...scholarly research and specialist
reference-led content
In a market seeing product and service changes, our Academic
Publishing business remains resilient, underpinned by its strong
brands and specialist content. On Journals, our investment in
marketing and technology is delivering consistent subscription
renewals, whilst our investment in Open Access, including last
year's addition of Dove Medical Press, is driving attractive growth
in this area. We are applying Dove's highly effective production
processes across our full OA business, creating a lower cost, more
efficient and scalable OA platform, which also offers a far better
experience to authors.
We also continue to deliver improved performance in our Books
business on the back of our operational effectiveness programme and
against a more stable market backdrop. Our investment in digital
capabilities and more flexible approach to digital product
development is delivering a particularly good performance in
eBooks, with strong growth year-to-date. This has helped us to
maintain the strong overall divisional trading performance
delivered in the first half, with underlying revenue growth in the
10-month period of +3.8%.
The last two months of the year are important, both for
subscription renewals in Journals and for Books. We remain
confident in the business and our brands, and although we face a
tough comparable after a strong performance closing out the year in
2017, we are aiming to meet or exceed last year's underlying
revenue growth for the year of 2%.
Global Exhibitions...international B2B platforms for trade and
commerce
Despite the many activities associated with the combination, we
remain equally focused on delivering our targets within the
historical Informa Exhibitions business, where we continue to trade
well.
Underlying growth in the 10-month period was +6.9%, slightly
lower than the six-month run-rate of +7.3%, reflecting the usual
seasonality of our business, with fewer fast-growing major brands
in the second half of the year. Those major brands that have run
have performed well, with notable recent highlights including in
Agriculture (Farm Progress), Health & Nutrition (SupplySide
West) and International Yachting (Monaco Yacht Show).
This puts us firmly on track to meet our target of between 6%
and 6.5% growth for 2018, and continued strong advanced bookings
into 2019 also give us confidence the existing Global Exhibitions
business can maintain growth levels and margins ahead of the wider
Exhibitions market.
Knowledge & Networking...international B2B communities for
learning and engagement
Our strategy to focus the business around major brands in our
three core end markets of Global Finance, Life Sciences and TMT
continues to deliver a steady improvement in performance, with
underlying revenue growth in the first 10 months of the year of
+1.0%, up from the +0.5% reported in the first half.
Our investment in upgrading technology platforms and
strengthening our digital capabilities is broadening our mix of
revenue in the business and improving customer retention. This has
helped to deliver some particularly strong recent performances in
Global Finance (SuperReturn International, Inside ETFs) and Life
Sciences (Biotech Showcase, TIDES).
The last two months of the year remain important and the
transactional nature of the business means that even with improved
mix and vertical focus, we trade all the way through to year-end.
However, the strength of our brands and improved customer
propositions are delivering strong pacing on delegate numbers and
sponsorship, which gives us confidence we can maintain our current
momentum and deliver underlying growth of 1-2% for the full
year.
Business Intelligence...specialist B2B insight and
intelligence
We continue to build on the foundations laid down by the Growth
Acceleration Plan, which led to a wholesale restructuring of the
business to refocus on customers and their end markets, a refresh
of our talent and capabilities and major investment to strengthen
our core products and platforms.
This has delivered steady improvement in performance, taking a
business that was in consistent revenue decline to one with a
portfolio of strong brands and businesses, all in growth to varying
degrees. This is evident in the 10-month performance, with
underlying revenue growth of +2.4% reflecting consistent
subscription renewals and continued growth across contingent
products and services such as Consulting and Marketing
Services.
With the business performing consistently, it is a natural
moment to start to put more focus on those areas where there is the
greatest opportunity for long-term growth and scale. This is
leading to more proactive portfolio management, and today we are
announcing that exclusive discussions are underway regarding the
sale of our Agribusiness portfolio and IGM, our Credit and FX
markets information business. This will leave us more focused on
attractive end markets such as Pharma, Retail Banking and Maritime
where we have strong brands and market positions.
The existing portfolio of businesses is targeting underlying
revenue growth of between 2.5% and 3.0% for the year, up from 2.2%
in 2017.
UBM Brands and Businesses
Since the summer, we have moved quickly to implement the AIP, in
order to reduce uncertainty and maintain operational momentum in
UBM's brands and businesses. This has been achieved with minimal
revenue leakage, reflected in robust trading, bar ongoing weakness
in the Fashion business. The absence of any performance discount is
testament to the positive and collaborative attitude of UBM
colleagues, the spirit of combination and the exciting potential of
the new emerging business.
In contrast to the old Informa portfolio, the second half of the
year includes a greater proportion of UBM's major brands and so
tends to be seasonally stronger. As we combine teams and finalise
operating structures, we remain focused on the performance of these
key brands and this is leading to a steadily improving growth trend
as the year progresses.
The 10-month pro-forma underlying revenue growth of the UBM
businesses was +2.3%, up from +1.1% reported for the first six
months of the year. Within the Events, business, underlying revenue
growth was +3.4%, reflecting strong performances in Pharma (CPhI
Worldwide), Technology (Black Hat) and Lifestyle & Brands
(Furniture China). Revenue in Other Marketing Services was -5.5%
after 10-months.
We remain equally focused on delivery through the last two
months of the year and with strong forward bookings in verticals
such as Beauty (Cosmoprof Asia), Pharma (CPhI India) and Advanced
Manufacturing (Manufacturing Indonesia), we are confident we can
deliver on 2018 expectations for the UBM business of around 3%
growth overall and c.4% growth in Events.
2018: Combination & Completion
The focus for the Informa Group in 2018 has been to maintain a
positive trading performance and effectively combine UBM into the
Informa Group, enabling us to enter 2019 as a single, scale
international Group, positioned to reap the full benefits of strong
market positions.
Our one-year phased Accelerated Integration Plan ("AIP") is
delivering this, with most parts of the programme due to be
completed this year:
-- AIP Operating Model: The allocation of UBM's businesses and
teams into the Informa operating structure is largely complete. In
Asia, Informa's business has been folded into the existing UBM
operating structure. In EMEA and the Americas (North and South),
UBM's businesses have been combined into Informa's existing
vertical and regional structures.
-- AIP Leadership & Talent: More than 100 Senior Management
appointments have been confirmed for the combined group and wider
team structures and reporting lines are also largely finalised.
This ensures vertical/regional teams will have clear ownership of
2019 targets and objectives.
-- AIP Progressive Portfolio Management: Our programme of
activity to increase the focus on verticals and businesses where we
have strong market positions and greater opportunities for growth
and scale, is underway. We are engaged with prospective buyers for
specific parts of our Information Services business, including our
Agribusiness portfolio and IGM, part of our Finance information
business. More details will be provided either before or within our
full year results but we continue to see up to GBP150m of revenue
(c5% of Group) potentially within scope.
-- AIP Synergies: As team structures and reporting lines have
been confirmed, we are addressing obvious areas of overlap and
duplication, reducing run-rate costs. This puts us on track to meet
our current cost synergy target of at least GBP50m in-year in 2019,
rising to a GBP60m run rate by end 2020 and GBP75m by end 2021
(targets are pre-reinvestment into Fashion Growth Acceleration
Plan).
After cost synergies, come revenue opportunities. Some are more
immediate than others, with cross-marketing initiatives likely to
have a positive impact from 2019. We also see attractive digital
opportunities over time, as we start to use our international scale
to greater effect. To this end, we have appointed and resourced a
dedicated Senior Executive to pursue Digital Services revenue
growth in the Global Exhibitions Division. John Van der Valk, who
was previously Managing Director of the CPhI portfolio within UBM,
will lead this programme globally.
-- AIP Fashion Growth Acceleration Plan: Our restructuring
programme in Fashion is well underway following the appointment of
a new Managing Director of the Fashion Exhibitions business in
September (Mark Temple-Smith, previously Commercial Director for
Informa Exhibitions). He is leading an experienced team with
strength-in-depth and together they have quickly set about
improving key areas including customer relations, pricing, brand
positioning, in-event experience and digital marketing.
2019: Ambition & Creation
Since 2013, the strategy of the Informa Group has been to focus
and organise the business around our customers and end-markets,
whilst investing to build the capabilities and platforms for
long-term sustainable growth and scale.
As part of this, we have been focused on building a scale,
international position in Exhibitions through both strong
underlying growth and targeted expansion, latterly through the
combination with UBM.
As we enter 2019, we will be operating as a single, combined
Group and are targeting further profitable growth, as we start to
reap the benefits of our increased scale and more focused
portfolio.
The future strategy and wider medium-term ambition for the
Combined Group will be the focus of Informa's 2019 Capital Markets
Day, scheduled to take place in London on Friday May 10(th)
2019.
Enquiries
Informa PLC
Stephen A. Carter, Group Chief Executive +44 (0) 20 7017 5771
Gareth Wright, Group Finance Director +44 (0) 20 7017 7096
Richard Menzies-Gow, Director of Investor Relations +44 (0) 20 3377 3445
Teneo Blue Rubicon
Tim Burt / Zoe Watt +44 (0) 20 7420 3141
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Analysts and investors
Gareth Wright, Group Finance Director, and Richard Menzies-Gow,
Director of Investor Relations, will be hosting a conference call
for analysts and investors today to discuss the Trading Update,
commencing at 8.00am UK time. Dial-in details: +44 (0) 330 336 9105
/ Confirmation Code: 7563220.
Notes to editors
About Informa PLC
Informa operates at the heart of the Knowledge and Information
Economy. It is one of the world's leading B2B Events, Information
Services, and Upper Level Academic Publishing businesses.
With more than 11,000 colleagues globally, it has a presence in
all major geographies, including North America, South America,
Asia, Europe, the Middle East and Africa.
Dow Jones Sustainability Index
Informa is a member of the Dow Jones Sustainability Index, the
leading international standard for Sustainability that measures
listed companies against a range of economic, social and
environmental factors. It entered the European and Global Indices
for the first time in 2018, putting it amongst the top 300 most
sustainable companies in the world.
To learn more, please visit www.informa.com
Cautionary Statements
This Trading Update contains forward-looking statements. These
statements are subject to a number of risks and uncertainties and
actual results and events could differ materially from those
currently being anticipated as reflected in such forward-looking
statements. The terms 'expect', 'should be', 'will be' and similar
expressions identify forward-looking statements. Factors which may
cause future outcomes to differ from those foreseen in
forward-looking statements include, but are not limited to: general
economic conditions and business conditions in Informa's markets;
exchange rate fluctuations, customers' acceptance of its products
and services; the actions of competitors; legislative, fiscal and
regulatory developments; changes in law and legal interpretation
affecting Informa's intellectual property rights and internet
communications; and the impact of technological change. These
forward-looking statements speak only as of the date of this
Trading Update. Except as required by any applicable law or
regulation, the Group expressly disclaims any obligation or
undertaking to release publicly any updates or revisions to any
forward-looking statements contained in this document to reflect
any change in the Group's expectations or any change in events,
conditions or circumstances on which any statement is based.
This information is provided by RNS, the news service of the
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of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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