2015 HALF YEAR RESULTS PRESENTATION 28 JULY 2015 STEPHEN A. - PowerPoint PPT Presentation

2015 HALF YEAR RESULTS PRESENTATION 28 JULY 2015

STEPHEN A. CARTER Group Chief Executive

Progress with Performance • Solid revenue growth o +8.6% reflecting 2% underlying growth and positive returns from acquisitions • Improved adjusted operating profit o +14.2%, enhanced by first half weighting of US Exhibitions acquisition • Enhanced adjusted EPS o Growth of +8.5% to 21.8p • Strong free cash flow o Up 80% year-on-year • Robust balance sheet o Leverage within target range Dividend Growth of 2.3% - meeting GAP commitment HALF YEAR RESULTS 28 JULY 2015 3

2014-2017 Growth Acceleration Plan “ The goal is simple but demanding: to progressively return every part of our business to growth, and to simultaneously build the capabilities and platforms needed for future scale ” and consistent performance. Stephen A. Carter, Group CEO Growth Acceleration Plan GAP GAP GAP GAP GAP GAP Operating Portfolio Acquisition Management Investment Funding Structure Management Strategy Model HALF YEAR RESULTS 28 JULY 2015 4

Progress with Performance • Operating structure o Increased focus on customers and renewals in Business Intelligence yielding benefits • Investment for growth o £70m-£90m growth programme on track • Active Portfolio Management o Disposal of Consumer information businesses and InsuranceIQ in Business Intelligence o Exploring strategic options for the Continental European Conference Business in Knowledge & Networking • Targeted Acquisition Strategy o Additions in Global Exhibitions and Academic Publishing • Executive Management o Experienced executive to succeed retiring CEO of Global Exhibitions 2014-2017 Growth Acceleration Plan – on schedule and on budget HALF YEAR RESULTS 28 JULY 2015 5

Progress with Performance % Group revenue % Group revenue Global Exhibitions Academic Publishing c.32% c.27% • • Proven management team enhanced by CTO hire Experienced industry Executive hired to succeed CEO • • Medical Journals integration largely complete Pursuing targeted international expansion programme • • Continued targeted expansion of content library Building scale for further expansion and internationalisation • • Increasing investment in product format, pricing Successful integration and strong performance of US models and distribution channel innovation acquisitions • Another year of strong organic growth • Continued growth at or ahead of the market Growth Acceleration Plan • • Senior Management and Vertical leadership Businesses combined into single operating unit • • Good progress improving operational fitness Reorganised around 3 core market-facing verticals • Coherent focus around intelligence products in 5 market- o Minor disruption to Divisional trading facing verticals o Major brands continue to perform well • Greater customer focus steadily improving trend in ACVs, • Continuing to actively manage the portfolio renewal rates and new business pipeline • • GAP investments in product development and delivery Investing in product innovation and customer engagement technology • New strategy to strengthen margin over time and return • 2014 organic decline to at least halve in 2015 business to growth Business Intelligence Knowledge & Networking c.22% c.19% % Group revenue % Group revenue HALF YEAR RESULTS 28 JULY 2015 6

GARETH WRIGHT Group Finance Director

Progress with Performance Operational Performance GAP Discipline Cash Management Funding Flexibility HALF YEAR RESULTS 28 JULY 2015 8

Summary of financials • Organic revenue growth : +0.2% or over 2% adjusted for phasing • Reported revenue growth: +8.6% to £618.8m revenue (H1 2014: £569.6m) • Improved adjusted operating profit : +14.2% to £190.4m (H1 2014: £166.7m) • Enhanced adjusted diluted EPS : +8.5% to 21.8p (H1 2014: 20.1p) • Strong free cash flow: £116.4m (H1 2014: £64.7m) • Robust balance sheet: Net debt/EBITDA 2.4 times (H1 2014: 2.3 times) • Increased interim dividend: up 2.3% to 6.55p (H1 2014: 6.4p) HALF YEAR RESULTS 28 JULY 2015 9

Divisional overview Revenue H1 2015 £m H1 2014 £m Actual % Organic % Academic Publishing 195.0 183.6 6.2% 2.5% Business Intelligence 138.8 139.6 -0.6% -3.5%* Global Exhibitions 168.8 122.3 38.0% 6.4% Knowledge & Networking 116.2 124.1 -6.4% -5.5% Group total 618.8 569.6 8.6% 0.2%** Adjusted Operating Profit H1 2015 £m H1 2014 £m Actual % Organic % Academic Publishing 66.7 63.0 5.9% 2.3% Business Intelligence 28.2 33.6 -16.1% -20.3%* Global Exhibitions 77.8 48.4 60.7% 10.3% Knowledge & Networking 17.7 21.7 -18.4% -19.3% Group total 190.4 166.7 14.2% -2.6% Adjusted Operating Margin % % Academic Publishing 34.2% 34.3% Business Intelligence 20.3% 24.1% Global Exhibitions 46.1% 39.6% Knowledge & Networking 15.2% 17.5% Group total 30.8% 29.3% *excludes Consumer Infomation Business ** Organic growth adjusted for phasing +2% HALF YEAR RESULTS 28 JULY 2015 10

The impact of Exhibition phasing and acquisitions 2014 2015 2016 H1 H2 H1 H2 H1 H2 Movements Apr 14 Sept 15 May 14 Jul15 Non-Annual 2018 Acquisitions HALF YEAR RESULTS 28 JULY 2015 11

Income statement H1 2015 £m H1 2014 £m Revenue 618.8 569.6 190.4 166.7 Adjusted operating profit Adjusted Operating margin 30.8% 29.3% • GAP investment underway Intangible asset amortisation 1 -50.5 -45.8 • Tight management of Other adjusting items -6.4 -8.6 exceptional costs Operating profit 133.5 112.3 • Restructuring costs reflect Net interest -12.1 -11.6 strategic and operational Profit/Loss on disposal 0.6 -0.5 repositioning Share of results of joint ventures -0.1 - Tax -22.1 -20.7 Profit for the period 99.8 79.5 Adjusted EPS (diluted) 21.8 20.1 1 Excludes software amortisation HALF YEAR RESULTS 28 JULY 2015 12

Strong free cash flow £m Increased Adjusted OP + Higher cash conversion + Lower cash tax payments = 116.4 Strong free cash flow 64.7 H1 2014 OP Working Tax Capex Other H1 2015 Capital FCF FCF HALF YEAR RESULTS 28 JULY 2015 13

Net debt movement H1 2015 £m H1 2014 £m Net debt at 1 January -876.2 -782.6 Free cash flow 116.4 64.7 Dividends -84.1 -75.4 Net acquisition spend -71.0 -15.8 Operating cash flow of discontinued operations -0.3 -2.8 Net repurchase of shares -0.3 - Non-cash items -0.6 -0.5 Foreign exchange 4.4 17.6 Net debt at 30 June -911.7 -794.8 Net debt/EBITDA (using average exchange rates) 2.4x 2.3x HALF YEAR RESULTS 28 JULY 2015 14

GAP Investment: Reconfirmed financial profile Projected post-tax return on GAP investment Cash payback % 34.3% ROI: 15-20% ROI: 25-35% • Positive ROI from 16.2% year 3 • Cash payback within four years -3.8% -14.5% 2015 2016 2017 2018 (Year 1) (Year 2) (Year 3) (Year 4) ~70% Investment range (m) £30-40 £30-35 £10-15 Capex HALF YEAR RESULTS 28 JULY 2015 15

GAP Investment: projects launched in the first-half Division Project Example Target Benefits Status Scope • Improved discoverability 2 Projects Academic Consolidation of Delivery • Improved functionality Stage Gate 1 books and journals Publishing platform • Richer user experience Approved delivery platforms upgrade • Increased usage • Increased content coverage 5 Projects New content and Business Product • Deeper Intelligence Stage Gate 1 forecasting tools Intelligence regeneration • Workflow enhancement Approved development • Deeper customer insight Consolidation and Design Customer • Improved campaign management Global upgrade of customer management Authority • Integration with order-to-cash Exhibitions data management end July enhancements process and financial back office system • Rationalisation • Building communities Interactive digital 3 Projects Knowledge & Digital • Ladder of engagement content community Stage Gate 1 marketing Networking • Monetisation of relationships and marketing Approved transformation platform Plus 4 projects within Global Support HALF YEAR RESULTS 28 JULY 2015 16

Progress with Performance Operational Performance GAP Discipline • Positive underlying growth • On budget and on schedule • Focus on returns • Financial profile unchanged Funding Flexibility Cash Management • Improved cash conversion • Net debt / EBITDA within target • Strong free cash flow growth range • Tight management of • Significant head room on exceptional costs facilities HALF YEAR RESULTS 28 JULY 2015 17

STEPHEN A. CARTER Group CEO

The Knowledge & Information Economy 69m people 2.1m 262m US tradeshow attendees The number of LinkedIn Number of students globally in 2013 Community Groups in 2013 will double to 262m by 2025 3ZB 40ZB 2.7bn $4.5bn 2012 2020 2.7bn Internet users Globally, Expenditure by US Association rising to half the world of Research Libraries in 2011- Amount of data worldwide population of 7.4bn by 2017 2012 50% $20 trillion 1,125m By 2020, the BRIC economies The Global Digital Economy English language: 375m will account for nearly 50% of estimated at $20 trillion in native/750m speak as a global GDP 2013 foreign language On average, human knowledge is doubling every 12 months, and soon will double every 12 hours HALF YEAR RESULTS 28 JULY 2015 19