Slide 1: 2012 Full Year Results
2012 Full Year Results Peter Rigby: Chief Executive Adam Walker: Finance Director 21 February 2013
Slide 2: Introduction
Introduction Peter Rigby
Slide 3: 2012 Overview
2012 Overview • Earnings ahead of market expectations • Ongoing strong cash generation • Proactive portfolio management • Delivering on all strategic objectives • Value accretive acquisitions • Improving mix = higher quality of earnings • Strong balance sheet • Attractive shareholder returns 3
Slide 4: Financial Summary
Financial Summary Adam Walker
Slide 5: Financial Highlights
Financial Highlights • Revenue broadly flat at £1.23bn • Adjusted operating profit growth of 4.0% to £349.7m • Record adjusted operating margin up 200bps to 28.4% • Record adjusted diluted EPS up 7.7% to 40.7p • Adjusted PBT up 7.3% to £317.4m • Cash conversion of 94%; free cash flow of £237.8m • Ba
Slide 6: Income Statement
Income Statement 2012 2011 £m £m Revenue 1,232.5 1,275.3 Adjusted operating profit 349.7 336.2 Amortisation -134.4 -137.9 Other adjusting items -90.9 -68.0 Operating profit 124.4 130.3 Net interest -30.9 -41.8 (Loss)/Profit on disposal -27.5 0.1 Fair value gain on non-controlling interest 1.0 - Tax
Slide 7: Divisional Summary
Divisional Summary 2012 2011 Actual Organic Revenue £m £m % % Academic Information 340.3 323.6 5.2 2.4 PCI 356.6 370.5 (3.8) (4.4) Events and Training 535.6 581.2 (7.8) (3.0) Total 1,232.5 1,275.3 (3.4) (2.0) Adjusted Operating Profit Academic Information 126.1 116.2 8.5 4.8 PCI 120.7 114.0 5.9 4.6
Slide 8: Cash Flow Summary
Cash Flow Summary 2012 2011 £m £m Adjusted operating profit 349.7 336.2 Depreciation and software amortisation 21.5 19.8 Share based payments 3.8 3.0 EBITDA 375.0 359.0 Net capital expenditure -25.8 -23.9 Working capital movement -20.2 -23.9 Operating cash flow 329.0 311.2 Adjusted cash conversion 9
Slide 9: Net Debt Movement
Net Debt Movement 2012 2011 £m £m Net Debt at 1 January -784.0 -779.1 Free cash flow 237.8 203.4 Dividends -107.4 -87.3 Net acquisition spend -174.4 -112.9 Foreign exchange 26.4 -5.7 Other items * -0.8 -2.4 Net Debt at 31 December -802.4 -784.0 Net Debt/EBITDA (using average exchange rates) 2.1 2.1
Slide 10: M&A activity
M&A activity • Investment focused around strategic objectives • Strict financial criteria • Strong track record of returns • 2012 highlights: • MMPI Canada in July for £30.0m* • Zephyr Associates in October for £38.2m* 2011 acquisitions – 1st year ROI: 12.0% 2010 acquisitions – 1st year ROI: 12.5% 2
Slide 11: Agrishow in Brazil
Agrishow in Brazil • Award of a 30-year license to manage Agrishow • Largest agricultural exhibition in Latin America • Brazil is one of the largest exporters of food in the world • 20th edition in São Paulo in April 2013: • Close to 800 exhibitors expected • Over 150,000 visitors • 440,000sqm • Add
Slide 12: Long-term performance
Long-term performance Adjusted operating margin (%) Adjusted EPS (p): CAGR 11% Dividend per share (p): CAGR 15% Net debt / EBITDA (x) 12
Slide 13: Financial summary
Financial summary • Another year of strong earnings and cash flow growth in 2012 • Dividend increase of 10.1% • Strong balance sheet • Bolt-on acquisitions and disposals • Budgeting for underlying growth in all three divisions in 2013 • A year of margin consolidation in 2013 • Healthy renewal rates
Slide 14: Strategy Update
Strategy Update Peter Rigby
Slide 15: Strategic drivers
Strategic drivers High Quality Digital Subscriptions Excellence Geographic Resilient Expansion Events 15
Slide 16: Proactive portfolio management
Proactive portfolio management • Deliberate product pruning • PCI Advertising, consulting, one-off reports • E&T Small conferences, local language, non- repeatable • Selective disposals Robbins Gioia, Austria/Hungary/Czech • E&T conferences • Reallocation of assets Medical Books moving to Academic •
Slide 17: Proactive portfolio management
Proactive portfolio management • Strategic acquisitions • AI • Focal Press Strong brands, niche content, digital • Hodder Health potential, cost/revenue synergies • PCI Digital subscriptions, high renewal • Zephyr rates, cost/revenue synergies • E&T • MMPI Annual large exhibitions, emerging • Agrish
Slide 18: New product development
New product development • Academic Information • SACHA • PCI • Healthcare Knowledge Centre • Verdict • China medical data • Events & Training • Vitafoods South America • Cityscape Qatar 18
Slide 19: Improving business mix
Improving business mix Revenue by type 2007 Revenue by type 2012 Revenue by type 2007 Revenue by type 2012 19
Slide 20: Improving geographic mix
Improving geographic mix Revenue split 2009 Revenue split 2012 Emerging market revenue 2009 Emerging market revenue 2012 20
Slide 21: Academic Information
Academic Information Revenue by geography 2012 • ‘Must have’ information • Digital subscriptions • Journal renewal rates >95% • 1,676 journal titles • 87,000 book titles Revenue by subject area 2012 • 16% of book revenue from ebooks • Two thirds HSS, one third STM • Open Access investment 21
Slide 22: Professional & Commercial Information
Professional & Commercial Information Revenue by geography 2012 • Proprietary content • Strong brands • Niche focus: narrow and deep • Digital subscriptions • Average renewal rate c80% Revenue by vertical 2012 • Analytics and workflow • Medical Books moving to Academic Information 22
Slide 23: Events & Training
Events & Training Revenue by geography 2012 • 6,500 events in 2012 • 17 new launches & geo-clones • Over 250 large events • 44% of revenue from large events • Local language conferences Revenue by product 2012 • Emerging markets 27% of E&T revenue • Corporate training still tough 23
Slide 24: Vertical strength
Vertical strength • Building multi-platform strength across industry verticals • Global reach through geo-cloning and digital publishing • Leverage knowledge, contacts, brands across the group • Vertical strengths: • Healthcare & Life Sciences • Agri-Food & Commodities • Anti-Aging & Beauty • Teleco
Slide 25: Healthcare & Life Sciences
Healthcare & Life Sciences 25
Slide 26: Agri-Food & Commodities
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Slide 27: Anti-Aging & Beauty
Anti-Aging & Beauty BEYOND BEAUTY EVENTS EXHIBITION & CONGRESS SF EuroMediCom {11° ANTI-AGING MEDICINE WORLD CONGRESS Aesthetic Dermatology and Surgery Preventive and Anti-Aging Medicine, Medical Spa MONTE CARLO APRIL 456 Principality of Monaco 2094 3 Grimaldi Forum Vitafoods Euro pe finished produc
Slide 28: Summary and outlook
Summary and outlook • Another year of healthy earnings growth • Delivered ahead of expectations • Improving quality of earnings • Increasing shareholder returns • Publishing – focus on subscriptions and digital excellence • Events – focus on large-scale brands • Focus on expanding emerging market pr
Slide 29: Appendix
Appendix
Slide 30: Balance Sheet
Balance Sheet 2012 2011 £’m £’m Intangibles and Goodwill 2,601.2 2,734.6 Fixed Assets 19.3 19.7 Other Non-Current Assets 20.4 1.3 Current Assets 269.3 295.1 Other Current Liabilities -593.5 -690.2 Net Debt -802.4 -784.0 Other Non-Current Liabilities -190.7 -196.1 1,323.6 1,380.4 30
Slide 31: Operating adjusting items
Operating adjusting items 2012 2011 £m £m Amortisation of intangible assets 134.4 137.9 Impairment 81.3 54.3 Restructuring and reorganisation costs 9.9 15.2 Acquisition related costs 1.3 1.4 Subsequent re-measurement of contingent consideration -1.6 -2.9 Total 225.3 205.9 31
Slide 32: Tax
Tax Effective Tax PBT Charge tax rate £m £m % Tax on statutory results 67.0 (23.7) (35.4) Adjusted for: Restructuring and reorganisation costs 9.9 2.6 Amortisation of intangible assets 134.4 26.7 Impairment 81.3 - Loss on disposal of investment 27.5 (0.3) Other adjusting items (2.7) 2.0 Deferred tax
Slide 33: Deferred Income
Deferred Income Constant 2012 2011 Actual Currency £m £m % % Publishing 198.5 218.7 (9.2) (8.5) Events 109.6 108.3 1.2 3.7 Total 308.1 327.0 (5.8) (4.5) 33
Slide 34: Currency
Currency Average Rates Closing Rates 2012 2011 2012 2011 USD 1.59 1.60 1.62 1.54 EUR 1.23 1.15 1.23 1.19 Movement of 1 cent on the full year USD EUR £m £m Revenue 3.6 1.0 Operating profit 1.5 0.4 Net debt 3.5 0.3 34
Slide 35: Return on Investment
Return on Investment 2011 acquisitions – 1st year ROI - 12.0% 2010 acquisitions – 1st year ROI - 12.5% 2009 acquisitions – 1st year ROI - 18.9% 2012 2011 2010 2009 2008 Group ROCE 9.2% 9.0% 8.8% 8.8% 8.1% ROI is defined as tax-affected Adjusted EBITDA in the First Year post-acquisition, as a proport
Slide 36: Thank you.
Thank you.