UBM plc Annual Report and Accounts 2013 UBM plc Annual R eport

140 Pages·2014·7.85 MB·English

U UBM plc
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Introduction Welcome to the UBM plc
Annual Report and Accounts 2013.
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UBM plc Annual Report and Accounts 2013
S
Contents trate
g
ic R
e
p
o
Strategic Report rt
01 Highlights
02 Chairman’s statement
04 UBM’s business model
06 I ndustry trends and UBM’s competitive position
– Events – the marketplace
– Marketing services – the marketplace
– P ublic relations, investor relations and marketing communications:
press release distribution – the marketplace
10 U BM’s strategy – how we create value
12 S ummary of strategic progress in 2013
14 Key performance indicators
15 Chief Executive’s statement
– Events
– Other Marketing Services
– PR Newswire
20 People and culture
22 Responsible business
24 How we manage the business
28 Chief Financial Officer’s review
G
o
ve
rn
Governance an
ce
34 Board of Directors
36 Corporate governance statement
41 Nomination committee
42 Audit committee
44 2013 Directors’ remuneration report
59 Directors’ report
Financial statements
63 I ndependent auditor’s report to the members of UBM plc group
65 Consolidated income statement
66 C onsolidated statement of comprehensive income
67 C onsolidated statement of financial position
68 Consolidated statement of changes to equity
69 Consolidated statement of cash flows
70 N otes to the consolidated financial statements
122 Additional information
123 Independent auditor’s report to the members of
UBM plc parent company
124 Parent company profit and loss account
F
125 Parent company balance sheet inan
126 Notes to the parent company financial statements cial S
131 Glossary tate
m
132 Shareholder information e
n
ts
IBC Financial calendar 2014
IBC Cautionary statement
UBM plc Annual Report and Accounts 2013 02
Products Geographies
Focused offering International reach
We have a high quality portfolio of products and services designed to meet our customers’ We are an international business with good exposure to mature growth markets and a
marketing and communications needs. strong presence in faster-growth Emerging Markets, particularly Mainland China and
Hong Kong.
2013 Adjusted operating profit*
2013 Revenue split by segment split by segment 2013 Revenue by geography
Events Other Marketing Services Events Other Marketing Services 1. North America 48%
2. Emerging Markets1 30%
PR Newswire PR Newswire
3. UK 10%
4. Continental Europe 10%
5. RoW 2%
25% 22%
5%
59%
16%
73%
Pre corporate costs
Events
We organise tradeshows and other live ‘in UBM is the world’s second largest events 1. North America – £376.9m
person’ events which help businesses to do organiser; we ran more than 400 events
The majority of our revenues are
business, transact, learn and network as part of in 2013.
generated by PR Newswire’s American
a professional or commercial community.
and Canadian operations. The balance
Our portfolio is distinctive due to its bias
is generated from Events and Other
towards large tradeshows and our growing
Marketing Services mainly serving
presence in Emerging Markets.
various technology and advanced
manufacturing sectors.
Other Marketing Services 32% 23% 45%
We offer a range of high quality, sector-specific These products are closely related to Events
2. Emerging Markets1 –
digital and print products (such as community and support the same sectors.
£237.2m
websites, online publications, controlled
circulation publications and virtual events), which We make almost all our revenue from
enable our clients to reach their target audiences Events. Within the Emerging Markets
or enhance their professional knowledge. our two main markets are China 44%
and Hong Kong 30% where we operate
some of UBM’s largest events serving
the jewellery, beauty, furniture and
pharmaceutical ingredient sectors. UBM
PR Newswire also has a notable presence in Brazil,
India, Thailand, Singapore and Turkey,
and a growing presence in Indonesia,
PR Newswire: our core products enable PR Newswire is also one of the world’s Malaysia, the Philippines, and UAE.
organisations to communicate and reach largest press release distributors and a leading
targeted audiences (principally by distributing distributor of premium releases in the US and 3%
their releases and content across a range of Canadian markets. PRN has sent more than 91%
digital and traditional media channels) and then 350,000 releases worldwide. 6%
monitor how effectively those audiences
engage with their communications.
1 Emerging Markets constituents are the non-G10 countries – notably for UBM: Mainland China, Hong Kong, Brazil,
India, Thailand, Singapore, Turkey, Indonesia, Malaysia, Philippines, Mexico and Saudi Arabia.
See pages 16–19 for information about the performance of each segment
Products Geographies Communities
Financial calendar 2014
Focused offering International reach Key sectors
We have a high quality portfolio of products and services designed to meet our customers’ We are an international business with good exposure to mature growth markets and a We have strong brands serving professional and commercial communities in a
marketing and communications needs. strong presence in faster-growth Emerging Markets, particularly Mainland China and wide range of fast-growing sectors. This means we have a diversified customer
Hong Kong. base – our largest customer accounts for just 1.4% of continuing revenues – and
we are not overly exposed to the fortunes of any one sector. Record date for 2013 final dividend 2 May
2013 Adjusted operating profit*
2013 Revenue split by segment split by segment 2013 Revenue by geography Revenue by sector Annual General Meeting 20 May
Final dividend payment date 27 May
Announcement of interim results 1 August
Events Other Marketing Services Events Other Marketing Services 1. North America 48% 1. News Distribution 25% 5. Fashion 9% Interim dividend for 2014 payment date October
2. Emerging Markets1 30% 2. Technology 19% 6. Advanced Manufacturing 7%
PR Newswire PR Newswire
3. UK 10% 3. Lifestyle 12% 7. Built Environment 6%
4. Continental Europe 10% 4. Ingredients 11% 8. Trade & Transport 5%
5. RoW 2%
25% 22%
1. News Distribution – £201.8m 5. Fashion – £72.2m
PRN’s business falls into the News Top 20 events: Hong Kong Jewellery
Distribution sector. & Gem September, Hong Kong
5%
Jewellery & Gem June and Asian
59% Pacific Leather Fair (APLF).
100%
16%
5%
73% • Countries with office(s) of over 50 employees 2. Technology – £150.2m 95%
Top 20 events: Game Developer
Pre corporate costs Conference, Black Hat USA and Interop. Cautionary statement
6. Advanced Manufacturing – £53.4m
Events Top 20 events: Medical Device &
61% 39% Manufacturing West (MD&M).
We organise tradeshows and other live ‘in UBM is the world’s second largest events 1. North America – £376.9m 3. UK – £83.6m
person’ events which help businesses to do organiser; we ran more than 400 events The majority of our revenues are Our UK events principally serve 3. Lifestyle – £91.8m 66% 34%
business, transact, learn and network as part of in 2013.
generated by PR Newswire’s American our events in the Built Environment Top 20 events: Furniture China,
a professional or commercial community. and Canadian operations. The balance sector – with three of the UK shows Cosmoprof Asia, Children-Baby- This Annual Report has been prepared for, and only for, the
Our portfolio is distinctive due to its bias is generated from Events and Other featuring in the top 20. We also have Maternity Products Expo (CBME), 7. Built Environment – £51.1m members of UBM plc (the Company), as a body, and no other persons.
towards large tradeshows and our growing Marketing Services mainly serving operations within the lifestyle and Sign China, Interiors Birmingham and Top 20 events: Ecobuild and The Company, its Directors, employees, agents or advisers do not
presence in Emerging Markets. various technology and advanced technology sectors. Hotelex Shanghai. International Fire and Security accept or assume responsibility to any other person to whom this
manufacturing sectors. Exhibition and Conference (IFSEC). document is shown or into whose hands it may come and any such
4% responsibility or liability is expressly disclaimed. By their nature, the
59% 32% 9% 96% statements concerning the risks and uncertainties facing the Group
Other Marketing Services 32% 23% 45% 62% 38% in this Annual Report involve uncertainty since future events and
circumstances can cause results and developments to differ materially
We offer a range of high quality, sector-specific These products are closely related to Events 4. Continental Europe – 4. Ingredients – £84.3m from those anticipated.
digital and print products (such as community and support the same sectors. 2. Emerging Markets1 – £80.7m Top 20 events: CPhI Worldwide, 8. Trade & Transport – £38.5m
websites, online publications, controlled £237.2m The majority of our activities in International Contract Services Expo Top 20 events: World Routes and The forward-looking statements reflect knowledge and information
circulation publications and virtual events), which We make almost all our revenue from Continental Europe are Events; this (ICSE) and CPhI China. Cruise Shipping Miami. available at the date of preparation of this Annual Report and the
eonr aebnlhea onucre c tlhieenirt sp rtoof reesasciohn tahle kirn toawrgleedt gaue.d iences Eouver ntwtso. Wmiatihni nm tharek eEtms earreg inCgh iMnaa 4rk4e%ts pyeroaprso r–t iloikne is2 0p1a3rt –ic uwlaitrhly a h vigehry i nla orgded 3% 2% Cstoamtepmaennyt us.n Ndeortthaiknegs i nn oth oisb Alignantuioanl Rtoe pupordta steh othuelds eb ef ocrownasrtdru-leodo kaisn ga
and Hong Kong 30% where we operate biennial show serving the Food 97% 98% profit forecast.
some of UBM’s largest events serving Ingredients sector.
the jewellery, beauty, furniture and
4%
pharmaceutical ingredient sectors. UBM
PR Newswire also has a notable presence in Brazil, 83% 13%
India, Thailand, Singapore and Turkey,
and a growing presence in Indonesia,
PR Newswire: our core products enable PR Newswire is also one of the world’s Malaysia, the Philippines, and UAE. 5. RoW – £15.6m
organisations to communicate and reach largest press release distributors and a leading
The Rest of World relates to
targeted audiences (principally by distributing distributor of premium releases in the US and 3%
our activities in Japan.
their releases and content across a range of Canadian markets. PRN has sent more than 91%
digital and traditional media channels) and then 350,000 releases worldwide. 6%
monitor how effectively those audiences 77% 23%
engage with their communications.
1 Emerging Markets constituents are the non-G10 countries – notably for UBM: Mainland China, Hong Kong, Brazil,
India, Thailand, Singapore, Turkey, Indonesia, Malaysia, Philippines, Mexico and Saudi Arabia.
See pages 16–19 for information about the performance of each segment
UBM is a global business-to- At UBM we achieve
sustainable commercial
business events-led marketing success by focusing on
our chosen markets and
services and communications helping our customers
succeed. Our evolution
business. is fuelled by insight,
innovation, collaboration
and investment in people
and by our commitment
We help businesses do to having a positive
impact on society and
business by connecting them the environment.
Our UBM Commitments:
with a targeted, qualified
• We work collaboratively.
audience, through live events,
• We put customers at the heart
of what we do.
press releases and other digital
• We serve our communities.
and print media.
• We bring passion and expertise.
• We are bold.
• We do the right thing.
See page 20
UBM has:
• A high margin, cash generative (negative working
capital) business model.
• Strong brands serving fast-growing sectors.
• An international business with good exposure both to
mature growth markets and Emerging Markets.
• A market-leading portfolio of live B2B events, principally
large tradeshows.
• A range of quality products and services positioned
for growth in the digital age.
• PR Newswire is a leading North American press
release distributor with a unique global network.
• A strong board and management team.
• Committed, skilled people working in an innovative
and collaborative culture.
• Strong environmental credentials and awareness
of sustainability.
• A diversified customer base – UBM’s largest customer
accounts for just 1.4% of continuing revenues.
Highlights
S
Value creation Strategic Report trate
0012 CHhigahirlmighatns’s statement gic Re
Underlying Group Dividend 0046 UI nBduMs’tsr yb turseinndess sa nmdo UdBelM’s port
revenue growth1 per share
competitive position
– Events – the marketplace
3.7% 27.2p – Marketing services – the marketplace
– P ublic relations, investor relations and
marketing communications: press
release distribution – the marketplace
10 U BM’s strategy – how we create value
12 S ummary of strategic progress in 2013
14 Key performance indicators
15 Chief Executive’s statement
Key performance indicators – Events
– Other Marketing Services
– PR Newswire
20 People and culture
22 Responsible business
24 How we manage the business
Revenue Adjusted operating profit margin*
28 Chief Financial Officer’s review
3.2% 70 bps Governance
34 Board of Directors
36 Corporate governance statement
41 Nomination committee
42 Audit committee
754.1 769.4 793.9 23.1% 22.8% 23.5% 44 2013 Directors’ remuneration report
59 Directors’ report
Financial statements
63 I ndependent auditor’s report to the
G
20111 20121 20132 20111 20121 20131 65 Cmoenmsobleidrsa toefd U inBcMom pelc sgtraoteumpent overn
66 C onsolidated statement of an
comprehensive income ce
67 C onsolidated statement of
Fully diluted Adjusted EPS*2 Cash generated from operations financial position
68 C onsolidated statement of changes
12.8% –13% to equity
69 Consolidated statement of cash flows
70 N otes to the consolidated
financial statements
122 Additional information
48.3p 47.5p 53.6p 203.7 189.8 123 I ndependent auditor’s report to the
165.8 members of UBM plc parent company
124 P arent company profit and loss account
125 Parent company balance sheet
126 N otes to the parent company
financial statements
131 Glossary
20111 20121 20131 2011 2012 2013 132 Shareholder information
IBC Financial calendar 2014
IBC Cautionary statement
ROACE*2 Net Debt/Adjusted EBITDA*
250 bps 0.3x
2.4x 2.5x
17.9% 2.2x UBM uses a range of business
14.6% 15.4% performance indicators to help F
in
measure its development against an
2011 2012 2013 2011 2012 2013 sAwtlrilt anhto eang ‘-i*cIF’ aRannSdd m fiandeadansitcuioiranel asol bainjreefoc ntrimovteeastd.io n cial Statem
on these measures is set out on en
page 131. ts
1 Continuing only.
2 Remuneration metric from 2014.
UBM plc Annual Report and Accounts 2013 01
Strategic Report
Chairman’s statement
Dame Helen Alexander
Chairman
Dear Shareholder, it, and used an innovative scenario planning
process in assessing the associated risks.
UBM is now more clearly focused as an
events-led B2B marketing and communications We are focused on creating long-term
service provider, following the sale of the value for shareholders. As a Board we seek
data services businesses in April 2013 and shareholder views and, in order to enhance
the restructuring of our Marketing our understanding of them, we commissioned
Services operations. an independent investor survey during the
latter part of the year. New regulations in the
In 2013 I visited more of our operations financial marketplace mirror our own aims to
and tradeshows in North America, China, reduce complexity, to clarify communication,
Continental Europe, India and South America, to be transparent and to report in a balanced
and encountered very capable, energetic way. The Board has reviewed the process
and experienced teams in all those centres. by which we produce our Annual Report
Many of these people have taken part in and Accounts and is satisfied that, taken as
UBM’s leadership development programmes, a whole, they provide a fair, balanced and
Underlying revenue growth*1 and our staff survey results confirm that understandable assessment of the Group’s
they are highly engaged in the business, position as at 31 December 2013.
3.7% as are the people who report to them. The
calibre of these individuals shows that we Following analysis with our advisers and
are successfully attracting and developing engagement with shareholders, we are
talent. As an advocate of gender diversity recommending a new remuneration
in business, I am also pleased that in 2013 framework which is clearer, simpler and
Fully diluted Adjusted EPS*
the proportion of women in management more closely aligned with performance. The
positions continued to increase. The initiatives Directors’ Remuneration Report, on page 44,
53.6p related to corporate culture and our people are provides more detail on this.
important for our long-term strategy.
The Nomination Committee has also been
Our Board evaluation shows a number of busy during 2013, particularly since David
areas where the Board has improved its Levin informed the Board in September of
1 Continuing only. performance. We keep up-to-date with all his decision to step down as CEO. With
areas of the business through regular visits and his appointment as President and Chief
presentations from business managers. The Executive Officer of McGraw-Hill Education
Board takes the management of our portfolio in New York, David’s departure from UBM
and allocation of resources very seriously, will be effective as of 1 March 2014. I would
and particularly those decisions about which like to take this opportunity to thank David
geographies and sectors to invest in, and which for his commitment to UBM and wish him
media to focus on. For example, when the every success in the future. He has led the
Board reviewed our events business in China, remarkable transformation of the Company into
we looked at the market and our position in a focused, international events-led marketing
“ Our new remuneration
framework is clearer, simpler
and more closely aligned
with performance.”
02 UBM plc Annual Report and Accounts 2013
“We’re making progress
in our vision of becoming Strate
g
the leading events-led ic R
e
p
o
B2B marketing and rt
communications provider.”
communications business, during a time of
huge change in the media industry. He has
successfully laid the foundations for UBM’s
next phase of development.
I am very pleased to confirm that the Board
has appointed Tim Cobbold as our new CEO Tim Cobbold will join UBM Tim Cobbold
with effect from 6 May. Tim joins us from as Chief Executive on
security printers De La Rue where he has 6 May 2014.
served as CEO since 2011, and I am looking
forward very much to working with him. I will
become Executive Chairman for the few weeks
between David’s departure and Tim’s arrival.
G
o
ve
We have successfully recruited John rn
McConnell as a new Non-Executive Director ance
who will assume the role of Audit Committee
Chairman on 1 March 2014, taking over from
Jonathan Newcomb, who will remain on • Tim was previously Chief Chloride operates in Continental
the Board. Executive at De La Rue, an Europe, Asia, US, Middle East
international business employing and Australia.
Karen Thomson will leave the Board 4,000 people in more than 150 • After graduating from Imperial
on 31 March 2014, having served as an countries covering the Africa, Asia, College with a degree in
independent Non-Executive Director since Continental Europe, Latin America, Mechanical Engineering,
2006. I thank her warmly for her support and Middle East and the USA. Tim qualified as a Chartered
for her great contribution to the Board, and • His previous roles included UK Accountant with Price
also during the process of appointment of a engineering group TI Group and Waterhouse.
new CEO. Chloride Group plc, where he
became Chief Executive in 2008.
UBM is a high-quality international business
and we are making progress in our vision
of becoming the leading events-led B2B
marketing and communications provider. In
2013 we delivered 3.7% underlying revenue
growth while continuing fully diluted adjusted
EPS increased by 12.8% to 53.6p. I’m excited
to be part of UBM and look forward to further
progress in 2014.
F
in
an
DChaamirem Hanelen Alexander cial State
m
e
n
ts
UBM plc Annual Report and Accounts 2013 03
Strategic Report
UBM’s business model
UBM is structured to ensure that our 25%
PR Newswire
geographic and sector understanding benefits
our customers and helps them succeed. 59% 16%
Events Other
Marketing
Services
One of our key strengths is the
quality of our relationships with the
Business Model:
sectors we serve and understanding
Events and Other
the needs of our customers
Marketing Services
p
el Fo
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Events and
Sell in that en vir qoualni f emd aeu Snedll a itcecne scs e to t he e An vt ti rroa cnat mn M ad e S qAnmuta aOeatrtlhrkirfret tokevturdhineg iaaghecut eqcdierxuinpe atsnelgirc tte yis tc e oo nt h te a tn t Cr e act oe amn em nauv inrnio ctndym/ oetnt fotoarh otn rft rl aeenrs aacret, knrenotwn ( ce.eg ., tr adwes ,who eb sit e, p u)blniociat Create
Revenues are principally generated by selling:
• physical space, attendance or sponsorship at events;
• advertising and sponsorship on websites and in
publications; and
• lead generation services.
04 UBM plc Annual Report and Accounts 2013