- Revenues up 9.3% to £972.3m – underlying revenue(a) growth of 7.9%
- Adjusted operating profit(b) up 17.5% at £201.9m
- Margin(c) up to 20.8% from 19.3%
- Fully diluted adjusted EPS(d) up to a record of 56.8p, 6.6p (13.1%) up on 2010
- Full year dividend up to a record of 26.3p, (2010: 25.0p)
- Cash generation from operating activities up 31.7% to £203.7m (100.7% cash conversion(e))
- Events profits up 44.6% to £135.2m, 62.5% of total excluding corporate costs
- Emerging Markets(f) revenues up 24.4% to £207.1m
- Emerging Markets operating profit up 33.4% to £65.6m representing 30.4% of total
- £71.2m invested in eight acquisitions
- Debt profile improved with maturities extended, net debt of 2.4x EBITDA
David Levin, UBM’s Chief Executive Officer, commented:
“2011 has been a strong year for UBM, with EPS up over 13% to a record 56.8p. An outstanding performance from our Q4 biennial events capped off a year of consistent delivery in which all our businesses met or exceeded their targets for the year. On the back of these results, the Board has declared a final dividend of 20p, up 1p over 2010, resulting in a record dividend for the year.”
“These results are the fruit of our consistent strategy to focus on providing marketing, communications and data services, in winning formats, to thriving business communities. Our Emerging Markets revenues grew by more than 24% during 2011 and contributed just under a third of our overall profits: in 2011 we generated more revenue in China than in Europe for the first time. Our Events business performed particularly well and 1.7 million people attended UBM events in 2011, up from 1.3 million in 2010 with profits growing by 45%. The solid performance of Data Services and PR Newswire in 2011 reflects the initial benefits of our continuing investment in these businesses. Our Marketing Services businesses also continue to develop well, with the combined effects of continuing strong digital growth and print disposals likely to result in online revenues outstripping print revenues in 2012.”
“2012 trading has started well. We anticipate continued underlying growth and a positive performance across the business whilst recognising the continuing uncertainties of the global economy.”
|
Business performance |
Full Year 2011 |
Full Year 2010 |
Change % |
Change at CC % |
Underlying Change % |
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|
Revenue |
£972.3m |
£889.2m |
9.3 |
11.3 |
7.9 |
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|
Adjusted operating profit |
£201.9m |
£171.8m |
17.5 |
19.8 |
2.3 |
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|
Adjusted operating profit margin |
20.8% |
19.3% |
1.5%pts |
|
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|
EBITDA |
£218.7m |
£188.2m |
16.2 |
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|
Adjusted PBT |
£177.4m |
£156.4m |
13.4 |
|
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Adjusted EPS Fully diluted adjusted EPS |
57.8p 56.8p |
51.0p 50.2p |
13.3 13.1 |
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Dividend per share |
26.3p |
25.0p |
5.2 |
|
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Cash generated from Operations |
£203.7m |
£154.7m |
31.7 |
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Operational Highlights
Segmental results
|
|
Full Year |
Full Year |
Change |
Change at CC |
Underlying Change |
|
£m |
2011 |
2010 |
% |
% |
% |
|
Revenue |
|
|
|
|
|
|
Events |
396.9 |
310.0 |
28.0 |
30.8 |
14.6 |
|
PR Newswire |
187.8 |
181.2 |
3.6 |
6.6 |
4.2 |
|
Data Services |
187.0 |
184.7 |
1.2 |
2.3 |
3.0 |
|
Marketing Services – Online |
88.5 |
69.2 |
27.9 |
31.7 |
16.4 |
|
Marketing Services - Print |
112.1 |
144.1 |
(22.2) |
(22.0) |
(4.6) |
|
Total Revenue |
972.3 |
889.2 |
9.3 |
11.3 |
7.9 |
|
|
|
|
|
|
|
|
Adjusted Operating Profit |
|
|
|
|
|
|
Events |
135.2 |
93.5 |
44.6 |
47.9 |
|
|
PR Newswire |
41.0 |
42.1 |
(2.6) |
0.2 |
|
|
Data Services |
30.3 |
34.1 |
(11.1) |
(11.1) |
|
|
Marketing Services – Online |
3.6 |
1.3 |
176.9 |
200.0 |
|
|
Marketing Services - Print |
6.1 |
10.0 |
(39.0) |
(40.2) |
|
|
Net corporate costs |
(14.3) |
(9.2) |
(55.4) |
(55.4) |
|
|
Total Adjusted Operating Profit |
201.9 |
171.8 |
17.5 |
19.8 |
|
|
|
|
|
|
|
|
|
Adjusted Operating Profit Margin |
|
|
|
|
|
|
Events |
34.1% |
30.2% |
3.9%pts |
|
|
|
PR Newswire |
21.8% |
23.2% |
(1.4)%pts |
|
|
|
Data Services |
16.2% |
18.5% |
(2.3)%pts |
|
|
|
Marketing Services – Online |
4.1% |
1.9% |
2.2%pts |
|
|
|
Marketing Services - Print |
5.4% |
6.9% |
(1.5)%pts |
|
|
|
Total Adjusted Operating Profit Margin |
20.8% |
19.3% |
1.5%pts |
|
|
Strong performance in Events (40.9% of revenues and 62.5% of adjusted operating profit)
- Revenue up 28.0% to £396.9m, with underlying growth up 14.6%
- Strong performance by high margin biennial events, notably in Q4, which contributed £36.2m in revenue, up from £18.5m in 2010
- Margin up to 34.1% (2010: 30.2%) reflecting positive biennial contribution
- Eight events-related acquisitions contributed £7.9m to 2011 revenues – c.£23.3m pro forma 2011
- Forward bookings for our top 20 events(g) as at 31 January 2012 are up 13.7% on prior year (the equivalent for 31 January 2011 was +18.3%)
- Deferred revenue for events up 44.4% to £147.1m as at 31 December 2011
- 2012: we expect underlying growth, excluding biennials, of between 7% and 9%, with margin likely to be between 31% to 32% reflecting a lower contribution from biennials and continued investment in the business
Resilient PR Newswire performance (19.3% of revenues and 19.0% of adjusted operating profit)
- Revenue up 3.6% with underlying growth of 4.2%
- Margin stabilised, at 21.8% for the full year
- Robust US distribution performance, with an underlying revenue increase of 4.6%
- Within US distribution, US wire underlying growth was 4.3%
- Broadening reach online and across social media with first of new generation of products in beta
- Continued expansion in PR Newswire’s European business where underlying revenue growth was 17.9%
- Good growth in Europe and Emerging Markets
- Significant growth in revenues under contract with deferred revenues at year end of £17.0m (2010: £13.0m)
- 2012: we expect underlying revenue growth of between 3% and 5% with stable margins
Solid revenue performance in Data Services (19.2% of revenues and 14.0% of adjusted operating profit)
- Revenue growth of 1.2% with underlying growth of 3.0% principally driven by UBM TechInsights
- Online conversion continues with digital and service revenues now 69.5% of total Data Services (2010: 66.7%)
- Margin of 16.2% (2010: 18.5%) reflecting continued investment, together with weakness in Trade and Transport, notably UBM Aviation
- 2012: as online conversion continues, we expect that revenue overall will be stable with margin improvement of around 1%
Marketing Services – Online & Print (20.6% of revenues and 4.5% of adjusted operating profit)
- Marketing Services – Online & Print revenue combined declined 6.0% while margin reduced to 4.8% (2010: 5.3%) reflecting print portfolio rationalisation and investment in online product development
- Underlying Online revenue growth of 16.4% driven principally by successful product innovation and development, especially around higher engagement products
- Investment in new products continued throughout the year, notably in building virtual environments, for which investment totalled £2.7m, with over 250 virtual events hosted during 2011 (2010: 103) for global communities
- Print underlying revenues declined by 4.6%. Print activities with revenues totalling £46.6m in 2010 were divested during 2010 and portfolio rationalisation continues with further print disposals announced in 2012 accounting for £17.9m of revenue in 2011
- Print margin reduced to 5.4% from 6.9% as the online integration process progressed, with disposals diluting margins
- 2012: for Marketing Services – Online & Print, we expect the combined marketing services segments to achieve underlying revenue growth of between 2% and 4% and for online revenue to exceed print for the first time. Margin for Marketing Services – Online & Print, is expected to be between 4% and 6%
Corporate costs
- Corporate costs including non-cash share based payment charges of £3.4m were £19.3m in 2011, up from £15.9m in 2010 (of which £1.3m were non-cash share based charges). The increase reflects an investment in a strengthened headquarters team
- As in prior years, corporate costs for 2011 were partially offset by disposal gains and other sundry income not attributable to any reporting segments’ operations. These offsetting gains totalled £3.8m in 2011, down from £6.4m in 2010
- These offsets are by their nature unpredictable but we expect them to become immaterial going forward
Strategic progress
Our consistent strategy of offering products in winning formats, targeting attractive business communities in growing economies, is building a strong platform for growth. Our Emerging Markets revenues grew 24.4% during 2011 (20.0% underlying) and now account for 21.3% of UBM’s revenues (2010: 18.7%) and 30.4% of total adjusted operating profit (2010: 27.2%).
We continue to build the business through organic development and acquisition. Initiatives to strengthen UBM’s foundations have included the further application of the ‘GEM’ best practice initiatives across all events; successful development of the geographic footprint for PR Newswire; strengthening Data Services through new products, core database development and geographic expansion; and enhancing our Marketing Services business within virtual events and by offering advanced high engagement products. Meanwhile our strategy of managing the contraction of the Print element of Marketing Services continues.
During the year we acquired full control of, or majority interests, in eight events businesses for an aggregate consideration of £71.2m. These include Rotaforte, Ecobuild and Renewable Energy India. These acquisitions are in attractive vertical sectors and have further increased our exposure to the attractive events industry – which now accounts for 62.5% of UBM’s adjusted operating profit (2010: 51.7%).
We now employ 1,935 people across our Emerging Markets businesses out of a total of 6,634 people (2010: 1,773 in Emerging Markets out of a total of 6,590).
Outlook
The outlook for UBM overall remains positive and we expect underlying growth of between 4% and 5%, and adjusted operating profit margin to exceed the 19.3% we reported in 2010. We believe that our global platform serving attractive communities is well positioned in what remains a challenging macro-economic back drop.
Please see the Segmental review in the attached pdf file for more detailed information about our outlook for each of UBM’s business segments.
Throughout this announcement:
(a) Where quoted, underlying growth rates exclude currency movements, discontinued revenues, proforma revenues from acquisitions and biennial events.
(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 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) Refers to the top 20 annual events based on revenue achieved during the 12 month period to 31 December 2011.
