UBM Q1 results

Highlights

  • Q1 revenue was up 13.7% to £237.7m (Q1 2010: £209.1m); underlying revenue growth of 7.5%.
  • Adjusted operating profit up by 18.6% to £44.6m (Q1 2010: £37.6m).
  • Operating profit margin rose to 18.8% (Q1 2010: 18.0%) driven by strong events margin.
  • Revenue patterns and margins reflect seasonal variations and our expectations remain in line with the outlook described in our 2010 results – for segmental detail see sections below.
  • We have continued to manage the portfolio actively during the period and have announced the acquisition of two Indian events businesses while disposing of print titles in France, the UK and the US.

David Levin, Chief Executive Officer, UBM said:
“We are pleased with the performance of the business in the first quarter where we have seen good underlying revenue growth of 7.5% and we remain on track to meet our expectations for the full year. As we said at the full year we expect the improved quality and shape of the business to result in sustained underlying revenue growth during 2011 broadly in line with the 5.6% growth 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.”

Unaudited results for the three months ended 31 March 2011
Revenue 2011 2010 Change Underlying Change
£m £m % %
Events 84.1 62.8 33.9 15.9
Targeting, Distribution & Monitoring 46.9 43.0 9.1 8.3
Data Services 55.6 54.6 1.8 4.9
Online – Marketing Services 19.7 13.8 42.8 14.2
Print – Magazines 31.4 34.9 (10.0) (13.1)
Total Revenue 237.7 209.1 13.7 7.5
   Margin
Adjusted operating profit 2011 2010 Change 2011 2010
£m £m % % %
Events 27.7 16.5 67.9 32.9 26.3
Targeting, Distribution & Monitoring 9.9 10.1 (2.0) 21.1 23.5
Data Services 12.5 13.3 (6.0) 22.5 24.4
Online – Marketing Services (2.1) (1.6) (31.3) (10.7) (11.6)
Print – Magazines 0.2 1.0 (80.0) 0.6 2.9
Corporate Operations (3.6) (1.7) nm n/a n/a
Total Adjusted Operating Profit 44.6 37.6 18.6 18.8 18.0

Events

  • YTD event revenues are up 33.9% to £84.1m (Q1 2010: £62.8m); underlying growth was 15.9%.
  • Key drivers were strong emerging markets performance, growth at our key US technology events and the newly acquired UBM Canon events, partially offset by some weaker performances for example at BSEC which is exposed to the UK education sector.
  • UBM Canon events have traded ahead of their 2010 editions and in line with the acquisition business case.
  • Adjusted operating margin of 32.9% (Q1 2010: 26.3%) reflected the contribution of UBM Canon, with major events concentrated early in the year.
  • We are encouraged by the performance of Events in Q1, traditionally the quietest quarter in the year, and reiterate our guidance of continued underlying growth, albeit at a slowing pace given the comparatives become more challenging as the year progresses.
  • As stated in February, we expect the positive margin impact from biennial events to be less pronounced than usual given their relative size within the overall portfolio and as we continue to invest in the development of new markets and events.
  • Forward bookings for UBM’s 2010 Top 20 events running in the next 12 months are up 20.7%.

Targeting, Distribution & Monitoring (“TD&M”)

  • PR Newswire’s revenues rose 9.1% to £46.9m (Q1 2010: £43.0m); underlying growth was 8.3%.
  • Continued growth in US non-wire products (especially MultiVu and Vintage) was accompanied by a robust performance in US wire and good international growth.
  • Adjusted operating margin of 21.1% (Q1 2010: 23.5%) reflects the step up in IT costs from Q3 2010, some margin dilution from a larger proportion of revenues generated from US non-wire and international activity as well as higher sales force and product investments relative to Q1 2010.
  • TD&M volumes and revenues reflect seasonal variations. We expect continued revenue growth in 2011, as set out in the full year results, and overall margins to be slightly ahead of the second half of 2010 (20.8%).

Data Services

  • Data Services revenues rose 1.8% to £55.6m (Q1 2010: £54.6m), with underlying revenue growth of 4.9%.
  • Performance reflect higher UBM TechInsights revenues, good growth in most digital data products and solid listing fees performance at Vidal, partially offset by lower print directory sales, declines in aviation advertising revenue and some weakness in our subscription driven Trade & Transport business.
  • The timing of the publication of print directories creates revenue and profit seasonality. Adjusted operating margin for the period was 22.5% (Q1 2010: 24.4%). The decline from Q1 2010 reflects a higher proportion of UBM TechInsights activity, lower print directory sales and related advertising and investment in new products.
  • As set out in the full year results, we expect that full year revenues will grow at the solid pace demonstrated in 2010, given comparatives become more challenging as the year progresses, and that full year margins will be broadly in line with those of the second half of 2010 (16.0%).

Online – Marketing services (“Online”)

  • Online revenues rose 42.8% to £19.7m (Q1 2010: £13.8m), with underlying revenue growth of 14.2%.
  • Continued strong growth in the technology community (most notably Information Week) was aided by contributions from acquisitions including Canon Communications, GAO and OBGYN.net.
  • Online adjusted operating margin was -10.7% during the period compared to -11.6% in Q1 2010.
  • Our outlook for online remains the same as at the full year results – we continue to expect good growth in revenues, although there is likely to be some moderation in underlying rates as the year progresses. Operating margins are expected to continue to reflect the dilutive effect of investment in new products, particularly Virtual Events and engagement offerings, and we do not currently anticipate margins being much higher than in 2010.

Print – Magazines (“Print”)

  • Print revenues fell by 10.0% to £31.4m (Q1 2010: £34.9m), with underlying revenues down 13.1%.
  • During the period we disposed of the Publican and French medical print titles. Since the end of the period we have transferred UBM Canon’s electronics titles in China to the eMedia Asia JV, in which we own a 39.9% interest, and have also disposed of the Consultant titles in the US.
  • Adjusted operating margin for the period was down to 0.6% (Q1 2010: 2.9%).
  • After taking into account the disposals and the £14.6m pro forma from 2010 acquisitions (adjusted for the transfer of Chinese electronics titles), we expect underlying revenues for the print portfolio to decline at rates broadly similar to those seen across our portfolio for 2010 (c-12%).
  • We continue to expect the margins in print to improve over time, however following the disposals (which had enjoyed 8.1% margins), 2011 margins are expected to be broadly similar to 2010.
  • UBM’s print magazine portfolio comprised 114 titles at 31 March 2011 (31 Mar 2010: 109).

Portfolio changes

  • During the period we announced the acquisitions of the Indian Travel show SATTE and a 60% stake in Famdent, India’s largest dental exhibition and conference business. The initial consideration for these two acquisitions will be c£3.0m and the combined revenues were approximately £1.6m in 2010.
  • The French medical, Publican and Consultant titles contributed £41.9m to full year 2010 revenues and £3.4m to profits.

Net debt

  • UBM’s consolidated net debt stood at £459.0m as at 31 March 2011.