-        Revenues up 7.3% to £508.7m – underlying revenue growth of 6.8%

-        Adjusted operating profit up 12.5% to £103.4m

-        Fully diluted adjusted EPS up 13.9% to 28.6p

-        Cash generation from operating activities up to £113.9m (112% conversion)

-        Events operating profit up 29.6% to £74.8m, 66.5% of group total (excluding corporate costs)

-        Forward bookings for top 20 events up 12.7%

-        Emerging Markets revenues up 20.9% to £93.1m, representing 18.3% of total

-        Seven acquisitions completed in H1 for expected consideration of £26.6m

-        Initiated strategic review of Data Services businesses

 

David Levin, UBM’s Chief Executive Officer, commented:

 “We have had a good first half of the year with underlying revenue growth of 6.8% and margins up almost a percentage point to 20.3%.  Our strategy is yielding positive results as we continue to improve the quality of the business.  We have decided to explore strategic options for the Data Services businesses to confirm we are allocating capital appropriately between the growing number of opportunities now available to us.

 Our events portfolio performed very well with good attendee-led technology events in the US, an above-plan performance at Ecobuild in its first edition under UBM ownership, and strong results from our events in Emerging Markets, particularly in China.  PR Newswire generated GDP-plus revenue growth and improved its margins while also launching new products.  Data Services results reflect specific challenges in two verticals but overall the business made good progress.   Marketing Services - Online grew well, led by our community-focused products, while the Print component declined more rapidly than anticipated.

 We remain on track to meet our expectations for the full year.  We now expect improved underlying growth for Events of 12%-14%.  PR Newswire remains on track. We maintain full year guidance for Data Services where we expect an improved performance notably from UBM TechInsights in the second half. However, we now expect Marketing Services - Online and Print to deliver growth of between 0%-2%.  While our business is trending positively, we are retaining our consolidated guidance as we are mindful of the uncertain external environment.”

 

Financial summary	H1 2012        £m	H1 2011     £m	Change %	Change at CC %	Underlying Change %
Revenue	508.7	474.0	7.3	6.5	6.8
Adjusted operating profit	103.4	91.9	12.5	-	-
Adjusted operating profit margin	20.3%	19.4%	0.9%pt	-	-
Adjusted EBITDA	111.4	100.6	10.7	-	-
Adjusted PBT	90.6	79.8	13.5	-	-
Diluted adjusted EPS (pence)	28.6p	25.1p	13.9	-	-
Dividend per share (pence)	6.7p	6.3p	6.3	-	-
Cash generated from operations	113.9	112.4	1.3	-	-

 

IFRS Statutory results	H1 2012            £m	H1 2011            £m	Change %
Revenue	508.7	474.0	7.3
Operating profit	83.8	72.6	15.4
Profit after tax	62.1	55.8	11.3
EPS (pence)	22.7	20.5	10.7
Weighted av. no. of shares (millions)	244.1	243.4	-
Net debt	536.8	482.2	-

 

 

Operational Highlights

 

	H1 2012 (1) £m	H1 2011 £m	Change %	Change at CC %	Underlying Change %
Revenue
Events	233.0	177.1	31.6	29.4	16.7
PR Newswire	100.1	95.2	5.1	3.2	3.9
Data Services	90.0	100.2	-10.2	-9.1	-2.1
Marketing Services – Online	46.2	41.8	10.5	8.5	8.2
Marketing Services – Print	39.4	59.7	-34.0	-33.4	-12.2
Total Revenue	508.7	474.0	7.3	6.5	6.8
Adjusted Operating Profit
Events	74.8	57.7	29.6	26.7
PR Newswire	22.3	20.1	10.9	9.0
Data Services	13.3	17.4	-23.6	-20.0
Marketing Services – Online	(0.1)	0.7	nm	nm
Marketing Services – Print	2.1	3.1	-32.3	-33.5
Net corporate costs	(9.0)	(7.1)	-26.8
Total Adjusted Operating Profit	103.4	91.9	12.5	11.3
Adjusted Operating Profit Margin
Events	32.1%	32.6%	-0.5%pt
PR Newswire	22.3%	21.1%	1.2%pt
Data Services	14.8%	17.4%	-2.6%pt
Marketing Services – Online	-0.2%	1.7%	-1.9%pt
Marketing Services – Print	5.3%	5.2%	0.1%pt
Total Adjusted Operating Profit Margin	20.3%	19.4%	0.9%pt

 

⁽¹⁾ Following the formation earlier this year of our UBM Technology business unit, which we have formed to consolidate our Events and other Marketing Services businesses serving the global technology community, a number of business activities have been reallocated from the Data Services segment to Events and Marketing Services - Online.  The businesses affected include HDI, SharedVue, Demand Generation and Game Vault, now part of UBM Technology; and ICMI, now part of UBM Live.  The impact of this realignment on revenue and EBITA for the six month period ended 30 June 2012 is as set out in the following table:

 

£m	Data Services	Events	Marketing Services - Online
Revenue	(5.4)	3.4	2.0
EBITA	-	(0.1)	0.1

 

As this change is not material from a group perspective, prior year results have not been restated.  This detailed information is provided to facilitate analysis of year on year performance of the affected segments. Underlying growth rates shown for each vertical and segment have been adjusted for this change.

                                                                                                      

 

Events

-        H1 Event revenues were up 31.6% to £233.0m (H1 2011: £177.1m); underlying growth was 16.7%

-        Underlying revenue growth in Emerging Markets was 20.0%

-        Emerging Markets accounted for 30.8% of total event revenue in H1 2012, of which 72.0% was China and 17.1% was South East Asia (2011: 7.2%)

-        H1 2012 biennial event revenues were £14.7m (H1 2011: £9.4m; H2 2011: £26.8m)

-        Forward bookings as at 30 June 2012, for our 2011 top 20 events running in the next 12 months, were up 12.7% (12.9% a year ago)

-        H1 adjusted operating profit was £74.8m (H1 2011: £57.7m) representing an operating margin of 32.1% (H1 2011: 32.6%)

-        The reduction in margin reflects organic growth initiatives. During the period we launched nine geo-adapted events; we have also increased headcount, including some 200 staff in Asia, to support continued growth

-        The 29.6% increase in adjusted operating profit was due partly to the acquisitions of Ecobuild, Malaysia International Furniture Fair and Airport Cities, along with a good performance from existing shows, notably: Game Developers Conference; the June Hong Kong Jewellery & Gem show; CPhI China; and Sign China all of which showed double digit growth

-        Five acquisitions contributed £4.7m to H1 revenues

-        Outlook: we now expect underlying growth for Events for the full year will be in the range of 12% to 14%, with operating profit margin between 31% and 32%

 

 

PR Newswire

-        PR Newswire’s revenues rose 5.1% to £100.1m (H12011: £95.2m); underlying growth was 3.9%

-        US revenue growth reflects resilient US distribution, an increase in text wire average revenue per message and an increase in newer distribution products that extend the core wire offerings, along with increased financial filing and printing revenue

-        European performance was strong (especially in the Nordic region) together with continued good growth in Asia and Latin America

-        Revenues at Canada Newswire remained flat, reflecting growth in distribution offsetting broadcast and webcast production revenue declines

-        H1 adjusted operating profit was £22.3m (H1 2011: £20.1m) representing an operating margin of 22.3% (H1 2011: 21.1%)

-        Improved margin reflects growth in US distribution and international business as well as the benefit of investment and sales force development

-        Agility, the integrated targeting, distribution and monitoring platform was launched in June and has been well received.  Previous product launches, notably iReach, also continue to grow, albeit from a small base

-        Outlook: we continue to expect that underlying growth for PR Newswire for the full year will be in the range of 3% to 5%, with margins stable relative to 2011

 

 

Data Services

-        Reported H1 Data Services revenue fell 10.2% to £90.0m (H1 2011: £100.2m); underlying decline was 2.1%

-        The reduced reported revenue mainly reflects a reclassification of £5.1m of revenue (H1 2011) away from Data Services into other segments following the creation of UBM Technology; the underlying decline reflects negative phasing in the Technology & IP businesses and continued declines in Trade & Transport

-        Healthcare revenues were stable on an underlying basis

-        Technology & IP revenues reflect lower TechInsights revenue relative to the strong first half last year. The revenue decline principally reflects phasing; TechInsights bookings for H2 are strong and the outlook for the remainder of the year is positive

-        Trade & Transport was down due to reduced advertising in print data directories

-        H1 adjusted operating profit of £13.3m (H1 2011: £17.4m) represents an operating margin of 14.8% (H1 2011: 17.4%)

-        The decrease in adjusted operating profit of £4.1m and a 2.6 percentage point reduction in margin when compared to the same period last year was driven primarily by TechInsights phasing

-        Outlook: we continue to expect both stable revenue for Data Services and a margin of 17% for the full year as TechInsights returns to growth with significant margin improvement in the second half

-        We are reviewing strategic options for the Data Services businesses in the context of growing investment opportunities across the group

 

 

Marketing Services - Online & Print

-        H1 Marketing Services - Online & Print combined revenue decreased 15.7% to £85.6m (H1 2011: £101.5m); underlying decline was 1.9%

-        Online accounted for 54.0% of Marketing Services combined, up from 41.2% in H1 2011

-        During H1 2012, print titles with 2011 revenues totalling £15.2m were divested as portfolio rationalisation continues

-        Underlying Online revenue growth of 8.2% to £46.2m (H1 2011: £41.8m) was driven principally by webcasts and other engagement products, together with an increasing number of products now incorporating social media. £2.0m of the reported revenue increase was a result of a reclassification into the Marketing Services - Online segment from Data Services

-        Underlying Print revenue decline of 12.2% to £39.4m (H1 2011: £59.7m) was driven predominantly by reduced advertising and general marketing spend, notably in technology, construction and pharmaceutical communities

-        H1 Marketing Services - Online & Print adjusted operating profit of £2.0m (H1 2011: £3.8m) representing an operating margin of 2.3% (H1 2011: 3.7%)

-        Outlook: reflecting faster than previously anticipated declines in print advertising, we now expect underlying growth for Marketing Services - Online & Print for the full year will be in the range of 0% to 2%, with margin of between 4% and 6%

 

 

Outlook summary

We are mindful of the risks to the wider macroeconomic environment, particularly in Europe. However, we believe UBM is well aligned with the potential for global growth in terms of our geographic footprint, the markets we serve and the products and services we deliver.

 

Given strong performance year to date, we now project: Events underlying full year growth will be in the region of 12% to 14%; on the other hand, Marketing Services underlying growth between 0% and 2%, reflecting declines in print faster than originally anticipated. Our other segments remain on track with our previously articulated expectations as we anticipate improving performance from our Data Services business through the year.

 

While segmental guidance is in the aggregate trending positively, we are retaining our consolidated guidance to reflect the uncertain external environment.

 

Throughout this announcement:

a)   Where quoted, underlying growth rates exclude currency movements, discontinued revenues, proforma revenues from acquisitions and biennial events. The reclassification of certain products from the Data Services segment into the Events segment and Marketing Services – Online segment is excluded from the underlying growth calculations in all cases.

b)   Adjusted operating profit represents operating profit excluding amortisation of intangible assets arising on acquisitions, exceptional items and share of taxation on profit from joint ventures and associates.

c)   Adjusted operating margin relates to our adjusted operating profit.  It is adjusted operating profit expressed as a percentage of revenues.

d)   Adjusted earnings per share is before amortisation of intangible assets arising on acquisitions, certain exceptional items, deferred tax on intangible assets, share of taxation on profit from joint ventures and associates, taxation relating to exceptional items and net financing income/expense – other.

e)   Cash conversion is the ratio of adjusted cash generated from operations to adjusted operating profit.  Adjusted cash generated from operations represents adjusted operating profit, before depreciation and profit from associates and joint ventures, after capital expenditure, movements in working capital, dividends from associates and joint ventures and non cash movements.

f)    UBM’s Emerging Markets comprise the non-G10 countries – most notably: China, Brazil, India, Thailand, Singapore, Indonesia, Malaysia, Philippines, Mexico and UAE.

g)   Forward bookings refer to the top 20 annual events based on revenue achieved during the 12 month period to 31 December 2011.

For the full announcement, please see the pdf file available for download from this page.