Analyst visit to Vitafoods May 16 th 2013 Peter Rigby Adam Walker Richard Menzies-Gow Chief Executive Finance Director Investor Relations peter.rigby@informa.com adam.walker@informa.com richard.menzies-gow@informa.com 1
Timetable for the visit • 10.30-11.30: Informa Events presentation – Adam Walker • 11.30-12.00: Vitafoods presentation – Peter Hall • 12.00-13.00: Vitafoods tour – Chris Lee • 13.00-14.00: Wrap up and lunch • 14.00: Finish 2
Informa Events Adam Walker Finance Director Informa plc 3
Informa Group financial summary • 2012 FY results • 7.7% EPS growth to 40.7p • 10.1% DPS growth to 18.5p • Net debt / EBITDA 2.1x • 18% of group revenue from EM • Q1 2013 trading as anticipated • Organic decline -3.6% • Flat underlying revenue growth • FY expectations unchanged 4
Informa Events & Training Revenue by product 2012 • 2012 organic decline of 3% • Large events grew high single-digit • Small conference volume reduction • Corporate training weak • 27% of revenue emerging markets • Margin mix • Large events: high 20’s percent • Small conferences: single-digit to high-teens • Corporate training: low double-digit percent 5
Global event market Global exhibition market split by region • Annual global exhibition market (Source: CEIR, AMR) • >30k exhibitions • 2.8m direct exhibiting companies Source: CEIR • 260m visitors Global exhibition organisers market share • Organiser revenue >£26bn Reed GL Events Messe Frankfurt • Highly fragmented organiser market 4% 2% 1% UBM Fiera Milano • Conferences and other events add Messe Dusseldorf Messe Cologne significant further value Messe Hannover 82% Messe Munich DMG Informa Others Source: CEIR 6
Global event market: long-term attractions US B2B marketing spend • Digitisation has impacted frequency 35 30 and quality of customer engagement 25 20 • Value of face-to-face (F2F) 15 10 interaction has risen 5 0 • Marketing investment must now be 2005 2006 2007 2008 2009 2010 2011 2012 2013F 2014F 2015F Events Magazines Online measured & justified…ROI is everything Source: VSS Communications Industry Forecast • Easy to measure exhibition impact • Strong lead generation = high ROI • Barriers to entry are high in exhibitions • Significant emerging market opportunity 7
Global event market: long-term attractions • Expansion of global exhibition space Increase in global exhibition space • Fragmentation = consolidation potential Number Total indoor of venues exhibition space • Economic value-add of events 2011 1197 32.6m SQM Increase since 2006 +57 +3.4m SQM (+12%) • Direct and indirect value Source: UFI • Cities increasingly recognising the Exhibition industry CAGR 2011-2015E impact on local economy 10% • Structural growth in F2F media 8% 9% 8% 6% • 5% industry CAGR to 2015 4% 5% 5% 4% 2% 0% World US Germany China Brazil Source: AMR International 8
Informa Events: evolution of mix Informa total event volume • Origins in small conferences 15000 • Challenge of managing the cycle 10000 • Acquisition of IIR in 2005 added 5000 significant expertise in large events 0 2007 2008 2009 2010 2011 2012 • Downturn accelerated a managed Informa Events revenue by type 2008-12 reduction in volume 100% 5.0 11.8 12.0 80% • Today we run 6,500 events in over 30 7.9 13.2 27.0 60% countries 40% 61.2 54.0 20% • Focus on repeatable events, with 0% 2008 2009 2010 2011 2012 international appeal & growth potential Delegate Exhibition Sponsorship Consulting Advertising Other 9
Dynamics of large events Cumulative cash cycle of an exhibition • Exhibitions are transaction-led 2 nd stage payment & venue payment First stage • Difficult to establish payment £000's Deposits paid • High barriers once established Visitor On-site stand promotion construction • Strong revenue visibility -12 -11 -10 -9 -8 -7 -6 -5 -4 -3 -2 -1 Months to event • High margin potential Source: Bank of America Merrill Lynch • Positive cash flow through the event cycle • High ROI and easy to measure • Venue relationships key • Quality & experience of visitors critical 10
Informa Events: large events • >250 large events in 2012 Top 15 events in 2012 (alphabetical order) • 55 events >£1m revenue in 2012 Event Sector Location ABF Franchising Finance Sao Paulo Africa com TMT Cape Town • 44% E&T revenue from large events Anti-Aging Medicine W. Congress Healthcare Monaco Arab Health Healthcare Dubai • >2/3rds E&T profit from large events Broadband World Forum TMT Amsterdam Cityscape Abu Dhabi Property Abu Dhabi Cityscape Global Property Dubai Fispal Technology Food Sao Paulo Formobile Furniture Sao Paulo Split between large and other event revenue Middle East Electricity Energy Dubai Monaco Yacht Show Leisure Monaco 100% Serigrafia Printing Sao Paulo 80% SuperReturn International Finance Berlin 60% TV Connect TMT London 40% Vitafoods Europe Food Geneva 20% 0% 2007 2008 2009 2010 2011 2012 Large event revenue Other events 11
Dynamics of small conferences • Conferences are content-led • Easy to launch • Lower barriers to entry • Often one-off events • Lower margin potential • Attractive cash dynamics • ROI more difficult to measure • Content focus and quality of speakers is key • Essential for developing the large events of tomorrow 12
Informa Events: geographic evolution Events & Training revenue split 2012 • Global event reach North Emerging America • Emerging markets c27% of E&T markets 25% 27% revenue (FTSE classification) • Emerging markets >33% of events Other Europe 14% UK 26% revenue & >40% of large events 8% Key events business unit locations • Leading positions in UAE, Brazil City Conferences Exhibitions • European conferences becoming P Dusseldorf P P Dubai less relevant P P London P New York P P Singapore P P Sao Paulo P Sydney P Toronto 13
Informa Events: Launches and geo-cloning • Aggressive schedule of new Geography of new launches & geo-clones: 2011/2 ROW UK Other launches & geo-clones each year 6% Europe 8% emerging 8% North markets America 20% • 19 in 2011 and 17 in 2012 6% Latam • Vitafoods South America 6% UAE 20% Asia • Cross Media 26% • SuperInvestor US • Geo-cloning expertise • Demand led • Relatively low risk • Brand enhancing 14
Informa Events: M&A trends • Global exhibition market highly Recent track record of events acquisitions fragmented Number of Average EBITDA 1st year tax deals multiple paid (x) adjusted ROI (%) 2010 9 6.2 12.4 • Competition for assets not as fierce as 2011 6 7.0 10.9 2012 4 6.1 12.6 one might think Total 19 6.6 11.6 • Long-term relationships and vertical expertise are key • Average multiple paid for events assets last 3 years of 6.6x EBITDA • High ROI on event acquisitions 15
Informa Events: Brazil case study • Small conference business since 1990’s • Buy and build strategy on large events • Acquisition of BTS and Ibratexpo in 2011 • Portfolio of leading exhibitions • Food, furniture, franchising, printing etc • Close to £100m investment into the region • Now one of the two big exhibition players • Successful bid for Agrishow in 2013 • Leading market position • Informa’s expertise in the food sector 16
Brazil: Agrishow 2013 • Food sector booming in Brazil • Largest agricultural show in Latam • >400k sqm gross / 240k sqm net • >120,000 visitors from 67 countries • BRL 3bn of credit letters issued pre-show 17
Informa Events: vertical strength • Industry health a key growth driver for an exhibition • Focus on multi-platform strength across industry verticals • Global reach through geo-cloning and digital publishing • Leverage knowledge, contacts, brands across the group • Vertical strengths: Top 20 events revenue split by vertical • Healthcare & Life Sciences Leisure Health & 12% • Agri-Food & Commodities Beauty Energy 27% 12% • Anti-Aging & Beauty Finance 9% • Telecoms & Media TMT Food 20% 11% Property • Finance 9% 18
Agri-Food & Commodities 19
Anti-Aging & Beauty 20
Telecoms & Media 21
Future ambitions for Informa Events • Leverage vertical strengths • Leverage scale opportunities • Leverage economic value of events • Leverage data, technology and customer relationships • Conference format innovation – improve attendee experience • Event websites, booking, registration, social media, apps • Fully integrated, year round marketing platform - maximise ROI • Large events more than two thirds of E&T revenue • Emerging markets more than half of E&T revenue • E&T margin in the mid- 20’s percent 22
Summary • Events is a core business for Informa • Deep expertise across large events and conferences • Rebalancing of the portfolio is ongoing • Attractive M&A opportunities • Exciting emerging markets opportunity • Multi-platform vertical strength is a competitive advantage • Quality of earnings improving • Strong growth prospects 23
Vitafoods Overview 16 th May 2013 Peter Hall Managing Director peter.hall@informa.com 24
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