Informa PLC (LON:INF) announced today half year results for six months to 30 June 2018.
KEY FINANCIAL AND OPERATING HIGHLIGHTS1
· Improving Revenue Growth: +4.3% underlying1 (H1 2017: +3.7%) and +4.6% reported
· Increased Adjusted Operating Profit: +1.9% underlying1 and +3.3% reported growth to £294.4m (H1 2017: £284.9m), despite higher depreciation and currency headwinds;
· Higher Adjusted Diluted Earnings per Share: +2.5% to 24.6p (H1 2017: 24.0p)
· Enhanced Dividend: up 6% to 7.05p (H1 2017: 6.65p)
· Strong Free Cash Flow: +4.9% to £119.4m (H1 2017 £113.8m)
· Efficient Balance Sheet: Net debt/EBITDA2 at 3.1x following UBM completion (H1 2017: 2.8x)
· Lower statutory figures largely due to one-off acquisition costs: Statutory Operating Profit £151.6m (H1 2017: £182.0m) and Statutory Diluted EPS 10.4p (H1 2017: 14.1p)
London: Informa (LSE: INF.L), the International Exhibitions, Events, Business Intelligence and Academic Publishing Group, today released its financial results for the six months to 30 June 2018, reporting continued growth alongside progress on the Accelerated Integration Plan for UBM.
Stephen A. Carter, Group Chief Executive, said: “Informa continues to deliver good trading performances, reflecting our combination of international scale, increased depth and breadth in attractive industry verticals and the recent addition of UBM. This puts us firmly on track for another year of growth in revenue, adjusted operating profit, adjusted earnings, cashflow and dividends.”
“Our focus for the second half is clear: to maintain consistent operating performance, as we implement our Accelerated Integration Plan to combine UBM and Informa and create a truly international B2B Information Services Group.”
· Accelerated Integration Plan (“AIP”), a one-year phased programme of activity to combine Informa with UBM:
o The AIP is focused on six core areas:
AIP 1. Operating Model: In EMEA and the Americas, UBM’s brands and businesses will be integrated into Informa’s divisional/vertical operating structures. In Asia, the Group is to adopt UBM’s operating approach, integrating Informa’s regional business into the UBM Asia structure. The Combined Group is increasingly organised and operated around industry verticals, both within the events-led Global Exhibitions, and the information and content-led Business Intelligence and Knowledge & Networking;
AIP 2. Leadership & Talent: Strength in depth within Informa and UBM is allowing us to structure and operate for scale at speed. Today we are confirming an initial series of leadership roles, including the promotion of Patrick Martell to the new position of Chief Operating Officer, responsible for building an efficient, high-performance operating platform. In addition, Eleanor Phillips was confirmed as Group HR Director and Simon Hollins as Chief Information Officer, thereby blending talent from both companies. Depth of talent also allows us to announce a structured succession plan in Asia, whilst in Business Intelligence, the strength of management within our core vertical businesses gives us confidence in the future leadership and development of the Division;
AIP 3. Progressive Portfolio Management: Following our effective strategy to strengthen and return to growth our information and content-led businesses in Business Intelligence and Knowledge & Networking, we are now accelerating the shift towards greater market and vertical orientation in the same way we are in our events-led Global Exhibitions business. As part of this, we are confirming a portfolio management programme to review and/or exit markets which do not offer attractive long-term growth and returns, putting greater focus on markets where we are strong, such as Pharma, Life Sciences and TMT, amongst others;
AIP 4. Increased Synergies: Confident of exceeding original cost synergy target of £60m run-rate by end 2020. The Discovery & Validation phase now gives us confidence that a £75m run-rate by end 2021 is achievable, with the incremental savings used partly to fund reinvestment in Fashion GAP; Discovery & Validation phase also confirms attractive revenue opportunities to pursue through combination;
AIP 5. Fashion GAP: Operational improvement programme launched to address the underperformance in the Fashion portfolio through a Growth Acceleration Plan for Fashion. Combination creates an opportunity to reposition the portfolio, refocus on growing customer segments, and refresh sales and marketing, including targeted investment of ±£10m over three years in core brands and talent, funded through over-delivery of Combination synergies. Target to return Fashion portfolio to growth within three-year period;
AIP 6. Brand Value: Expanded Group to focus on building value in product brands and the Informa corporate brand, thereby leading to retirement of the UBM brand by the end of the AIP in Summer 2019;
· Growth continuation following strong first-half trading:
o Academic Publishing: Consistent strength in Journal subscriptions and improving performance in specialist Books following operational improvement programme, delivering +3.5% underlying revenue growth, including some phasing benefits;
o Global Exhibitions: Market-leading brands and benefits of international scale in attractive markets/verticals contribute to continuing strong performance, with underlying revenue growth of +7.3%;
o Business Intelligence: Further momentum in consulting and specialist marketing solutions, combined with consistent subscription renewals in attractive markets/verticals, deliver continued operating momentum, with underlying revenue growth of +2.4%;
o Knowledge & Networking: Despite the non-renewal of a £3m managed events contract in TMT, increased focus on major Events brands in core growth markets/verticals delivers improving underlying revenue growth of +0.5%;
o UBM Portfolio: Six-month pro forma3 performance of UBM business as expected, with steady year-on-year improvement in underlying revenue growth to +1.1%, including Events growth of +2.5%, ahead of seasonally stronger second half; 15-day contribution into reported Informa first-half results;
o Funding: Long-term attractive financing secured via over-subscribed issue of €650m Euro and £300m Sterling bonds, facilitating full paydown of UBM Acquisition Facility.
o Progressive Dividends: Strong cashflow and confidence in our second half performance leads to 6% increase in the interim dividend to 7.05p.
1Group Underlying Revenue and Profit Growth figures are Informa only but other Half Year financials include 15 days stub period contribution from UBM
2 See Financial Review for details on non-statutory measures
3Pro forma figures for UBM refer to its six-month performance to end June 2018
