7th May 2009 14:00
7 May 2009 Interim Management Statement UBM trading remains resilient in volatile markets
The management of United Business Media Limited today provides the following interim management statement on the occasion of UBM's Annual General Meeting being held today at the Westbury Hotel, Dublin, commencing at 2pm.
Overall, UBM's trading is proving resilient in the face of an extremely challenging economic environment. Careful, active management has ensured our businesses have continued to perform broadly in line with our expectations despite volatile trading conditions in many of our markets.
B2B Communities - High quality diversified portfolio
The resilient trading performance of UBM's businesses which serve b2b communities reflects our careful choice of specialist communities and markets in which to operate, coupled with the strength of the market-leading content, data and service brands we provide to our customers.
Events - Our globally diversified events portfolio contributed around 48% of UBM's profits in 2008 and is on track to deliver a similar percentage of profits in 2009. Of the revenue generated from events in 2008, around 90% was derived from exhibitors and sponsors, with only around 10% derived from those paying to attend our events. Exhibitor and sponsorship revenue - over which we have good visibility - continues to be in line with expectations. Our major events such as the September Hong Kong Jewellery & Gem Fair (www.jewellerynetasia.com), Marintec China (marine engineering, see www.marintecchina.com), CPhI (pharmaceutical ingredients, see www.cphi.com), Furniture China (see www.furniture-china.cn) and Food Ingredients (see http://fieurope.ingredientsnetwork.com) derive almost all of their revenue from exhibitors and sponsorship. These events are on track to deliver good growth in 2009. However, as anticipated, revenues were lower at some other events, such as the Furniture UK show.
Attendee revenue is significant principally for our technology events which are held mainly in the USA. Exhibitor and sponsorship revenue for these events is holding up well. However we anticipate that attendee revenue will be 25%-35% lower than in 2008. This equates to a revenue shortfall of around £10m out of total annual event revenue of approximately £300m. We have cancelled a small number of our secondary events.
The number and quality of attendees at all our market-leading exhibitor-paid events continues to be strong, thanks in part to our teams' redoubled marketing efforts which, for example, helped the Game Developer Conference sustain 2008 attendee numbers of more than 17,000 at the 2009 event in March. We remain alert to the potential impact of a wider outbreak of swine flu and continue to monitor the situation carefully. UBM hosts no events in Mexico.
Since the deepening of the credit crisis in September 2008, exhibitor and sponsorship bookings and rebookings for our key events scheduled for later in 2009 and into 2010 have continued to be good, although in some instances customers' internal processes are slowing the booking approval process. In 2009 a greater number of our large biennial events will take place during the second half of the year, unlike in 2008 when more of our biennial events occurred in the first half. This will affect the distribution of earnings across the two halves of the year.
Data and online services - In 2008 our data and online service businesses generated around 18% of UBM's overall profits and are on track to deliver both a higher percentage of profits and higher overall profits in 2009. Our drug information system products, notably Vidal (www.vidal.fr) and MIMS (http://asia.mims.com), are performing well. In aggregate our subscription data products - including RISI (paper & pulp industry data and analysis, see www.risiinfo.com), ABI Barbour (construction contract data, see www.barbour-abi.com), PIERS (import / export intelligence, see www.piers.com) and OAG (aviation industry data and analysis, see www.oag.com) are performing in line with expectations. However as noted in our annual report, we are experiencing revenue shortfalls in some print directory products and online banner advertising. The shortfall is currently expected to be approximately £5-10m out of total revenue of more than £250m. This reflects marketers' growing use of media products that are closely targeted towards, and tailored for, specific audiences, and which can provide clear empirical indications of their return on investment. UBM continues to develop products to meet this demand, including products such as the award-winning Internet Evolution product (www.internetevolution.com).
Print magazines - As noted in March, we anticipate that print magazine products will contribute less than 10% of UBM's profits in 2009. We continue to manage our print magazine portfolio actively in order to mitigate the effects of both its long term structural decline and of the more immediate cyclical downturn in print advertising. Our print magazine portfolio has a small subscription component but is largely dependent on advertising revenue. Management actions taken include closing titles where there is no clear path to profitability, reducing headcount, reducing publication frequency, converting titles from free to paid-for wherever possible and increasing subscriber numbers. Nonetheless we continue to produce high quality print products which remain in strong demand from the communities they serve, as evidenced by the growing market share of many of our magazines and by the 18 Professional Publishers' Association award nominations for UBM publications in the UK alone.
Distribution, Monitoring and Targeting - Developing broader market opportunities
There have been a number of positive developments in our Distribution, Monitoring and Targeting businesses. In the US text distribution market we have maintained market share and have won a number of new large clients. However this market is currently more volatile than in previous years. The enhanced functionality of our new editorial and distribution system is fully operational and is handling all of our customers' releases. Our targeting and multimedia businesses MediAtlas (http://mediatlas.prnewswire.com) and MultiVu (www.multivu.com) have continued to increase market share in their respective markets. We are investing to grow market share across our broadening product and service offering, and we continue to expand into new geographies. Despite forecasting being made difficult by the unusual degree of intra-month volatility, active management both of costs and of customer relationships have resulted in our Distribution, Monitoring & Targeting businesses being on track to deliver a greater share of our 2009 profits than the 24% they delivered in 2008.
Strong balance sheet and increasing available liquidity
UBM's balance sheet remains strong. Since September 2008 we have increased our long term available liquidity by £150m through extending our existing facilities and by arranging new facilities. We currently have around £250m of cash and unused committed facilities. Furthermore UBM's credit rating outlook has been upgraded recently by Standard and Poors. We continue to believe liquidity is a key asset in these difficult credit markets.
Consistent approach to acquisitions
In late 2007 and throughout 2008 we slowed our rate of investment in acquisitions because we believed inflated prices represented increasingly poor value for our shareholders. We continue to be presented with numerous acquisition opportunities but we believe most of these are of businesses that will struggle to adapt to the current economic and business environment. We have therefore made only a minimal investment in acquisitions so far in 2009. As we move beyond the refinancing phase of the credit crunch we expect to identify higher quality acquisition opportunities which provide better potential for creating shareholder value. We will continue to manage our liquidity position to take advantage of these opportunities as they arise.
Strengthening UBM's management team
In February we appointed Ninan Chacko as Chief Executive Officer of our Distribution, Monitoring and Targeting businesses. In April three further CEO appointments were made: John Day at UBM Global Trade, Peter von Moltke at UBM Aviation and Mike Coffey at RISI.
- Ends -
United Business Media Limited will report Interim results for the six months to 30 June 2009 on Friday 31 July 2009.
ContactsMedia Peter Bancroft Director of Communications, UBM E-mail communications@ubm.com Direct telephone +44 20 7921 5961 Analysts/Investors Email investorrelations@ubm.com Direct telephone +44 20 7921 5095 Nigel Wilson +44 20 7921 5019 Andrew Crow +44 20 7921 5940 Notes to Editors
1. About United Business Media Limited
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 6,500 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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