# Ascential Digital Commerce growing strongly

- Link: https://www.directorstalkinterviews.com/ascential-digital-commerce-growing-strongly/412968528
- Published: 2021-03-15T08:02:48+00:00
- Author: Anthony Fox

**Ascential plc** (LON:ASCL), the specialist information, data and analytics company,
has today announced results in line with expectations for the year ended 31 December
2020. 

**Strategic and operational highlights**

●     Strong delivery against long-term strategic priorities in a transitional year:

o  eCommerce: accelerated adoption driving strong growth in Digital Commerce.

o  Product Design: revenue expansion through newer products including launch of 
Food and Drink.

o  Events: despite significant in-year impact with revenues from events down £130m,
our marquee events are positioned for a physical and virtual hybrid-based recovery.

o  Streamlining: disposals and cost measures supporting investment and strong balance
sheet.

●     Segmental performance demonstrates resilience in a challenging backdrop:

o  Digital Commerce: very strong growth; revenue up 25%; EBITDA almost doubled; 
now largest segment.

o  Product Design: solid performance built on c.90% subscription base and expanding
end market.

o  Marketing: live events and advisory impacted by Covid-19 restrictions, but subscriptions
performing well.

o  Retail & Financial Services: focus on post pandemic relaunch of Money20/20 and
enhanced service for retailer offering.

●     Sale of non-core Built Environment & Policy business for £257.9m supports 
investment in organic growth and targeted acquisitions, while reinforcing the balance
sheet. Treated as a Discontinued Operation.

●     Acquisition of X Target in China and Intellibrand in Brazil further extends
capabilities and geographic reach for Digital Commerce; ongoing investment in Hudson
MX’s pioneering media-buying platform.

●     Paul Harrison, our former Audit Chair and CFO of Just Eat plc and The [Sage Group plc](https://www.directorstalkinterviews.com/ftse-company/sage-group/sge.l),
appointed as Chief Operating Officer.  New Audit Chair, and two other NEDs appointed
to an experienced and diverse Board.

**Financial highlights**

●     Results in line with expectations.

●     Revenue of £263.7m (2019: £380.3m) for continuing operations.

o  Revenue of £301.1m (2019: £416.2m) including discontinued operations.

o  Reported revenue reduction of 31%.

o  Digital subscriptions and platforms revenues (79% of the total) up by 11% proforma
driven by Digital Commerce.

●     Adjusted EBITDA of £28.5m (2019: £109.0m) for continuing operations.

o  EBITDA of £50.0m (2019: £128.5m) including discontinued operations.

o  Reported reduction of 74% resulting in margin of 10.8% (2019: 28.7%).

●     Resilience in pandemic underpinned by early and proactive reductions in cost
base.  Costs reduced by 13% year on year while maintaining capital investment in
product and business systems.

●     Reported operating loss of £166.5m (2019: profit of £1.8m) includes £97.6m(
2019: £33.1m) for deferred consideration mainly in respect of Flywheel Digital following
its extremely strong performance in 2020 and £28.4m impairment charge for goodwill
and acquired intangibles in the Retail & Financial Services segment.

●     Adjusted diluted EPS 1.9p (2019: 18.8p).  Statutory loss per share of 34.0p(
2019: EPS of 2.0p).

●     Operating cash flow conversion of 90% (2019: 86%), resulting in closing net
debt of £229.3m with available liquidity of £217m.  Net debt of £140m proforma for
post year-end M&A^(1).

●     Having considered its capital allocation priorities and the uncertain economic
environment, the Board has decided not to pay a dividend in respect of 2020.  The
Board will keep shareholder cash returns continually under review.

^(1) Proforma adjustments relating to cash flows in early 2021 are (a) Cash proceeds
from the sale of the BEP businesses (b) Initial Consideration for the acquisitions
of Intellibrand and X Target and (c) Deferred consideration payable in the first
half of 2021.

> **Duncan Painter, Ascential Chief Executive Officer, commented:**
> “The last year has underlined the importance of our strategic focus: serving brands
> that operate in digital marketplaces.  We were already operating in a highly digital
> world, and the fundamental shift towards online channels has only accelerated 
> since the pandemic.  This further drives demand for our data-driven insights in
> the three ways we support customers: creating the right products, maximising their
> marketing impact, and optimising their trading performance on eCommerce platforms.
> Despite the significant financial impact of Covid-19 on our business, I have been
> delighted by the business’s response to the pandemic crisis.  Our people and their
> dedication to ensuring we serve our customers, and their flexibility to ensure
> the Company has not missed a beat, has been remarkable.  We reacted quickly and
> decisively with measures that saw a 13% year on year reduction in our cost base
> whilst ringfencing continuing strong levels of investment in our innovative digital
> services.
> Digital Commerce is now our largest and fastest growing segment and is well placed
> to benefit from the structural gains arising from the acceleration in eCommerce
> adoption.  While our two marquee events are ready for a recovery as conditions
> allow, the Covid-19 pandemic restrictions continue to influence the timing of 
> a return to maximum participation at venues. The pace and effective delivery of
> vaccines will also be a critical factor.  Nevertheless, the resilience and underlying
> momentum within the business model, combined with our strong balance sheet and
> strong trading in the first two months of the year, give us confidence of further
> good progress in the year ahead.”

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