2011 News Releases

01 March

Preliminary Results for the Year Ended 31 December 2010

Solid results - Investing for growth

• Headline revenue growth of 4.9% – underlying revenue growth of 5.6%
• Adjusted operating profit broadly flat at £171.8m reflecting higher investment in new product development, sales and IT
• Adjusted EPS of 51.0p per share (2009: 55.1p)
• Final dividend of 19.0p to give full year dividend of 25.0p (2009: 24.2p) up 3.3%
• Emerging Markets^(a) now 28.6% of total adjusted operating profit, up 20.6%
• Acquisition strategy continues: 22 acquisitions with £258.0m invested during the year
• Canon integration on track; business performing well
• Cash generated from operations up 8.4% to £154.7m
• Comfortable debt maturity profile following successful $350m bond issue

David Levin, UBM’s Chief Executive Officer, commented:

“UBM has delivered a robust performance in 2010 achieving 4.9% headline revenue growth, bolstered by 20% growth in our largest Emerging Markets of China, India and Brazil which now account for a quarter of our adjusted operating profit.  Our consistent strategy of developing products in winning formats, targeting attractive business communities in growing geographies, provides us with a good platform for growth.  We are investing in our people, our products and services and, in addition, we made 22 acquisitions during 2010 which have strengthened our offering and geographic reach.  Initial trading in 2011 is encouraging and we are cautiously optimistic about our results for the full year.” 

Operational Highlights

Robust performance in Events (34.8% of UBM revenue and 54.4% of UBM adjusted operating profit^(c))

• Reported revenue growth of 7.8% with underlying revenues up 12.2%
• Strong margin^(e) of 30.2% (2009: 30.3%) despite dilutive effects of biennial cycle and new launches
• £4m of revenue from new 2010 launches worldwide – breakeven in aggregate
• Four new geo-cloned exhibitions launched in India, China, Abu Dhabi and the US
• Nine events-related acquisitions contributing £16.3m to 2010 revenues – c£49.5m pro forma 2010
• Forward bookings for our 2009 Top 20 events are up 18.3% with higher confidence resulting in earlier bookings
• Good visibility: current forward bookings for 2009 Top 20 events represents 59.7% of their 2010 revenues

Resilient Targeting, Distribution & Monitoring (“TD&M”) revenue performance (20.4% of UBM revenues and 24.5% of UBM adjusted operating profit^(c))

• Reported revenue growth of 12.3% at PR Newswire group, with underlying revenues up 5.6%
• Resilient US wire performance (+2.9%) with consistently solid margins
• Positive US non-wire revenue performance (+21.4%) as well as international growth (+18.8%)
• Margin^(e) of 23.2% (2009: 27.8%) reflecting revenue mix and investment in new products, IT infrastructure and significantly enhanced sales force
• Five acquisitions bolster Emerging Markets exposure and enhance TD&M’s product offering
• 2011: Continued investment in IT infrastructure, sales force and new product development

Solid revenue performance in Data Services (“DS”) (20.8% of UBM revenues and 19.8% of UBM adjusted operating profit^(c))

• Reported revenue growth of 3.1%
• Underlying revenue growth of 3.5% principally driven by improvements in sales to the electronics industry
• Margin^(e) of 18.5% (2009: 20.8%) largely reflecting investment to expand the business into Emerging Markets plus some margin dilution from product mix
• Print data to online conversion continues with online and service revenues now 66.7% of total DS (2009: 61.4%)
• 2011: Continuing investment into new products, core database development as well as geographic expansion

Good revenue growth in Online - Marketing services (“Online”) (7.8% of UBM revenues and 0.8% of UBM adjusted operating profit^(c))

• Improving advertising trends and innovations driving reported revenue growth of 28.6%
• Underlying growth of 20.2% driven principally by higher sales in the technology sector given improvements in that sector’s trading environment and UBM product innovations
• Significant investment in new products, notably virtual events – 103 virtual events hosted during 2010 (2009: 38) for communities in North America, Asia and Europe

Consistent Print – Magazines (“Print”) portfolio management delivering improved profit (16.2% of UBM revenues and 5.8% of UBM adjusted operating profit^(c))

• Reported revenues declined 13.1% - driven in part by closure of 13 titles during 2010
• Underlying revenues (which exclude c£18.0m of pro-forma Canon) declined 8.1%
• c.12.9% decline including Canon pro-forma
• Margin^(e) improvement to 6.9% (2009: 5.4%) reflecting cost rationalisation and title closures
• Systematic review of portfolio of titles continues
• Combined online and print revenues declined 2.9% while combined margin^(e) improved to 5.3% (2009: 4.3%)

Strategic progress

Our consistent strategy of developing products in winning formats, targeting attractive business communities in growing geographies, provides us with a good platform for growth.    It is worth noting that our Emerging Markets^(a) revenues grew 17.6% during 2010 and now account for 18.7% of UBM’s revenues (2009: 16.7%) and 28.6% of total adjusted operating profit^(c) (2009: 23.8%).

We have maintained our consistent strategy of building the business through organic development and acquisition.  Initiatives to strengthen UBM’s foundations have included; launching the ‘GEM’ best practice initiative during the year; investing in our technology, new product development and the sales force of our Targeting, Distribution and Monitoring (“TD&M”) business; strengthening Data Services (“DS”) through new products, core database development and geographic expansion; and, enhancing our Online - Marketing Services (“Online”), particularly in virtual events.  Meanwhile our strategy of managing the contraction of the Print – Magazines (“Print”) business continues, with the portfolio now contributing just 16.2% of UBM’s revenues and 5.8% of adjusted operating profits (2009: 19.6% and 5.2% respectively).  

During the year we acquired full control or majority interests in 22 businesses for an aggregate consideration of £258.0m.  The most notable of these was Canon Communications which provides UBM with market-leading media brands serving the medical device design and advanced manufacturing industry.  Canon brings geographically diverse revenues from a community which is complementary to our existing electronics industry presence, and its events portfolio also provides an attractive base for geo-cloning.  This acquisition and eight others have increased our exposure to the attractive events industry – which now accounts for 54.4% of UBM’s adjusted operating profit (2009: 50.9%) – while the remaining 13 acquisitions have further strengthened the offerings and geographic reach of our TD&M, DS and Online businesses. 
 
Outlook

We expect the improved quality and shape of the business to result in sustained underlying revenue growth during 2011 broadly in line with that enjoyed in 2010.  Overall we anticipate continued growth in profit largely driven by a full year of contribution from our acquisitions and continued momentum in our Events business tempered by targeted investment in Data Services, TD&M and Online.

Please see the Segmental review below for an Outlook for each of UBM’s business segments.

Throughout this announcement:

• Emerging Markets constituents are the non-G10 countries – most notably for UBM: China, Brazil, India, Thailand, Singapore, Indonesia, Malaysia, Philippines, Mexico and UAE.
• Where quoted, underlying growth rates exclude currency movements, discontinued revenues, revenues from acquisitions and biennial events
• 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. 
• Adjusted earnings per share is before amortisation of intangible assets arising on acquisitions, certain exceptional items, deferred tax on intangible assets, taxation relating to exceptional items and net financing expense – other.
• All references to margin are on the adjusted operating profit basis (as defined above) – additional information on these measures has been provided after the CEO Review.

Contacts

UBM will be hosting an analyst and investor presentation at 9am at the London Stock Exchange.  A live webcast of the results presentation will be made available from UBM’s website from around 9.00am, 1 March 2011. To access the webcast please go to www.ubm.com.

An on demand recording of the webcast will also be accessible from UBM’s website, www.ubm.com after midday.

Notes to Editors

About UBM

UBM focuses on two principal activities: worldwide information distribution, targeting and monitoring; and the development and monetisation of B2B communities and markets. UBM’s businesses inform markets and serve professional commercial communities - from doctors to game developers, from journalists to jewellery traders, from farmers to pharmacists – with integrated events, online, print and business information products. Our 6,000 staff in more than 30 countries are organised into specialist teams that serve these communities, bringing buyers and sellers together, helping them to do business and their markets to work effectively and efficiently.

For more information, go to www.ubm.com

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