# Informa Plc Trading in line with expectations

- Link: https://www.directorstalkinterviews.com/informa-plc-trading-in-line-with-expectations/412761037
- Published: 2018-11-09T07:19:52+00:00
- Author: Charlotte Edwards

**[Informa Plc](https://www.directorstalkinterviews.com/ftse-company/informa-plc/inf.l)**(
LON: INF), the international B2B Events, Information Services and Upper Level Academic
Publishing Group, today released a trading update for the 10-months ending 31 October
2018

**KEY HIGHLIGHTS**

· Trading in line with expectations and on track for the full year

· Group underlying revenue growth of +3.9% for the ten months to 31 October 2018

· Combination phase of Accelerated Integration Plan for UBM completed on schedule

· 2019 Capital Markets Day confirmed for May 10th 2019 in London

> **Stephen A. Carter, Group Chief Executive, said:** “At Informa, we remain focused
> on delivering improving growth and returns, whilst effectively combining UBM into
> the Informa Group to create brands and platforms for future growth and scale.”
> “With more than 60% of our revenue forward booked and recurring, we have good 
> forward visibility. Similarly, our increased international breadth, in particular
> our strong positions in the US, Asia and the Middle East, leave us well placed
> to meet expectations.”
> “As ever, the last two months of the year are important, particularly in our more
> retail and transactional businesses but we remain confident of delivering a further
> year of growth in revenue, profit, earnings, dividends and cashflow.”

**TEN-MONTH TRADING HIGHLIGHTS**

We remain focused on delivery, reporting underlying revenue growth for the standalone
Informa Group, pre-combination, of +4.1% in the ten-month period to the 31 October
2018. Over the same period, the new combined Informa Group delivered underlying 
revenue growth of +3.9%. Reported revenue growth for the 10-month period was +31.8%.

This performance is in line with expectations, leaving us on track to meet our ambition
for underlying revenue growth of 3.5%+, even with the continued macro uncertainties
from US/China trade relations, Middle East political tensions and Brexit negotiations,
amongst others. On the latter, the Group’s international breadth and relatively 
small revenue base in mainland Europe mean related risks are low but we are still
taking necessary precautions and preparing for any potential knock-on impact in 
areas such as employment, treasury and inventory management.

**Academic Publishing…scholarly research and specialist reference-led content**

In a market seeing product and service changes, our Academic Publishing business
remains resilient, underpinned by its strong brands and specialist content. On Journals,
our investment in marketing and technology is delivering consistent subscription
renewals, whilst our investment in Open Access, including last year’s addition of
Dove Medical Press, is driving attractive growth in this area. We are applying Dove’s
highly effective production processes across our full OA business, creating a lower
cost, more efficient and scalable OA platform, which also offers a far better experience
to authors.

We also continue to deliver improved performance in our Books business on the back
of our operational effectiveness programme and against a more stable market backdrop.
Our investment in digital capabilities and more flexible approach to digital product
development is delivering a particularly good performance in eBooks, with strong
growth year-to-date. This has helped us to maintain the strong overall divisional
trading performance delivered in the first half, with underlying revenue growth 
in the 10-month period of +3.8%.

The last two months of the year are important, both for subscription renewals in
Journals and for Books. We remain confident in the business and our brands, and 
although we face a tough comparable after a strong performance closing out the year
in 2017, we are aiming to meet or exceed last year’s underlying revenue growth for
the year of 2%.

**Global Exhibitions…international B2B platforms for trade and commerce**

Despite the many activities associated with the combination, we remain equally focused
on delivering our targets within the historical Informa Exhibitions business, where
we continue to trade well.

Underlying growth in the 10-month period was +6.9%, slightly lower than the six-
month run-rate of +7.3%, reflecting the usual seasonality of our business, with 
fewer fast-growing major brands in the second half of the year. Those major brands
that have run have performed well, with notable recent highlights including in Agriculture(
Farm Progress), Health & Nutrition (SupplySide West) and International Yachting (
Monaco Yacht Show).

This puts us firmly on track to meet our target of between 6% and 6.5% growth for
2018, and continued strong advanced bookings into 2019 also give us confidence the
existing Global Exhibitions business can maintain growth levels and margins ahead
of the wider Exhibitions market.

**Knowledge & Networking…international B2B communities for learning and engagement**

Our strategy to focus the business around major brands in our three core end markets
of Global Finance, Life Sciences and TMT continues to deliver a steady improvement
in performance, with underlying revenue growth in the first 10 months of the year
of +1.0%, up from the +0.5% reported in the first half.

Our investment in upgrading technology platforms and strengthening our digital capabilities
is broadening our mix of revenue in the business and improving customer retention.
This has helped to deliver some particularly strong recent performances in Global
Finance (SuperReturn International, Inside ETFs) and Life Sciences (Biotech Showcase,
TIDES).

The last two months of the year remain important and the transactional nature of
the business means that even with improved mix and vertical focus, we trade all 
the way through to year-end. However, the strength of our brands and improved customer
propositions are delivering strong pacing on delegate numbers and sponsorship, which
gives us confidence we can maintain our current momentum and deliver underlying 
growth of 1-2% for the full year.

**Business Intelligence…specialist B2B insight and intelligence**

We continue to build on the foundations laid down by the Growth Acceleration Plan,
which led to a wholesale restructuring of the business to refocus on customers and
their end markets, a refresh of our talent and capabilities and major investment
to strengthen our core products and platforms.

This has delivered steady improvement in performance, taking a business that was
in consistent revenue decline to one with a portfolio of strong brands and businesses,
all in growth to varying degrees. This is evident in the 10-month performance, with
underlying revenue growth of +2.4% reflecting consistent subscription renewals and
continued growth across contingent products and services such as Consulting and 
Marketing Services.

With the business performing consistently, it is a natural moment to start to put
more focus on those areas where there is the greatest opportunity for long-term 
growth and scale. This is leading to more proactive portfolio management, and today
we are announcing that exclusive discussions are underway regarding the sale of 
our Agribusiness portfolio and IGM, our Credit and FX markets information business.
This will leave us more focused on attractive end markets such as Pharma, Retail
Banking and Maritime where we have strong brands and market positions.

The existing portfolio of businesses is targeting underlying revenue growth of between
2.5% and 3.0% for the year, up from 2.2% in 2017.

**UBM Brands and Businesses**

Since the summer, we have moved quickly to implement the AIP, in order to reduce
uncertainty and maintain operational momentum in UBM’s brands and businesses. This
has been achieved with minimal revenue leakage, reflected in robust trading, bar
ongoing weakness in the Fashion business. The absence of any performance discount
is testament to the positive and collaborative attitude of UBM colleagues, the spirit
of combination and the exciting potential of the new emerging business.

In contrast to the old Informa portfolio, the second half of the year includes a
greater proportion of UBM’s major brands and so tends to be seasonally stronger.
As we combine teams and finalise operating structures, we remain focused on the 
performance of these key brands and this is leading to a steadily improving growth
trend as the year progresses.

The 10-month pro-forma underlying revenue growth of the UBM businesses was +2.3%,
up from +1.1% reported for the first six months of the year. Within the Events, 
business, underlying revenue growth was +3.4%, reflecting strong performances in
Pharma (CPhI Worldwide), Technology (Black Hat) and Lifestyle & Brands (Furniture
China). Revenue in Other Marketing Services was -5.5% after 10-months.

We remain equally focused on delivery through the last two months of the year and
with strong forward bookings in verticals such as Beauty (Cosmoprof Asia), Pharma(
CPhI India) and Advanced Manufacturing (Manufacturing Indonesia), we are confident
we can deliver on 2018 expectations for the UBM business of around 3% growth overall
and c.4% growth in Events.

**2018: COMBINATION & COMPLETION**

The focus for the Informa Group in 2018 has been to maintain a positive trading 
performance and effectively combine UBM into the Informa Group, enabling us to enter
2019 as a single, scale international Group, positioned to reap the full benefits
of strong market positions.

Our one-year phased Accelerated Integration Plan (“AIP”) is delivering this, with
most parts of the programme due to be completed this year:

· AIP Operating Model: The allocation of UBM’s businesses and teams into the Informa
operating structure is largely complete. In Asia, Informa’s business has been folded
into the existing UBM operating structure. In EMEA and the Americas (North and South),
UBM’s businesses have been combined into Informa’s existing vertical and regional
structures.

· AIP Leadership & Talent: More than 100 Senior Management appointments have been
confirmed for the combined group and wider team structures and reporting lines are
also largely finalised. This ensures vertical/regional teams will have clear ownership
of 2019 targets and objectives.

· AIP Progressive Portfolio Management: Our programme of activity to increase the
focus on verticals and businesses where we have strong market positions and greater
opportunities for growth and scale, is underway. We are engaged with prospective
buyers for specific parts of our Information Services business, including our Agribusiness
portfolio and IGM, part of our Finance information business. More details will be
provided either before or within our full year results but we continue to see up
to £150m of revenue (c5% of Group) potentially within scope.

· AIP Synergies: As team structures and reporting lines have been confirmed, we 
are addressing obvious areas of overlap and duplication, reducing run-rate costs.
This puts us on track to meet our current cost synergy target of at least £50m in-
year in 2019, rising to a £60m run rate by end 2020 and £75m by end 2021 (targets
are pre-reinvestment into Fashion Growth Acceleration Plan).

After cost synergies, come revenue opportunities. Some are more immediate than others,
with cross-marketing initiatives likely to have a positive impact from 2019. We 
also see attractive digital opportunities over time, as we start to use our international
scale to greater effect. To this end, we have appointed and resourced a dedicated
Senior Executive to pursue Digital Services revenue growth in the Global Exhibitions
Division. John Van der Valk, who was previously Managing Director of the CPhI portfolio
within UBM, will lead this programme globally.

· AIP Fashion Growth Acceleration Plan: Our restructuring programme in Fashion is
well underway following the appointment of a new Managing Director of the Fashion
Exhibitions business in September (Mark Temple-Smith, previously Commercial Director
for Informa Exhibitions). He is leading an experienced team with strength-in-depth
and together they have quickly set about improving key areas including customer 
relations, pricing, brand positioning, in-event experience and digital marketing.

**2019: AMBITION & CREATION**

Since 2013, the strategy of the Informa Group has been to focus and organise the
business around our customers and end-markets, whilst investing to build the capabilities
and platforms for long-term sustainable growth and scale.

As part of this, we have been focused on building a scale, international position
in Exhibitions through both strong underlying growth and targeted expansion, latterly
through the combination with UBM.

As we enter 2019, we will be operating as a single, combined Group and are targeting
further profitable growth, as we start to reap the benefits of our increased scale
and more focused portfolio.

The future strategy and wider medium-term ambition for the Combined Group will be
the focus of Informa’s 2019 Capital Markets Day, scheduled to take place in London
on Friday May 10th 2019.

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