27th Jul 2012 07:00
27 July 2012 Strong first half - guidance confirmed Results for the six months ended 30 June 2012
- Revenues up 7.3% to £508.7m - underlying revenue growth of 6.8%
- Adjusted operating profit up 12.5% to £103.4m
- Fully diluted adjusted EPS up 13.9% to 28.6p
- Cash generation from operating activities up to £113.9m (112% conversion)
- Events operating profit up 29.6% to £74.8m, 66.5% of group total (excluding
corporate costs)
- Forward bookings for top 20 events up 12.7%
- Emerging Markets revenues up 20.9% to £93.1m, representing 18.3% of total
- Seven acquisitions completed in H1 for expected consideration of £26.6m
- Initiated strategic review of Data Services businesses
David Levin, UBM's Chief Executive Officer, commented:
"We have had a good first half of the year with underlying revenue growth of6.8% and margins up almost a percentage point to 20.3%. Our strategy isyielding positive results as we continue to improve the quality of thebusiness. We have decided to explore strategic options for the Data Servicesbusinesses to confirm we are allocating capital appropriately between thegrowing number of opportunities now available to us. Our events portfolio performed very well with good attendee-led technologyevents in the US, an above-plan performance at Ecobuild in its first editionunder UBM ownership, and strong results from our events in Emerging Markets,particularly in China. PR Newswire generated GDP-plus revenue growth andimproved its margins while also launching new products. Data Services resultsreflect specific challenges in two verticals but overall the business made goodprogress. Marketing Services - Online grew well, led by our community-focusedproducts, while the Print component declined more rapidly than anticipated. We remain on track to meet our expectations for the full year. We now expectimproved underlying growth for Events of 12%-14%. PR Newswire remains ontrack. We maintain full year guidance for Data Services where we expect animproved performance notably from UBM TechInsights in the second half. However,we now expect Marketing Services - Online and Print to deliver growth ofbetween 0%-2%. While our business is trending positively, we are retaining ourconsolidated guidance as we are mindful of the uncertain external environment." Change at Underlying Financial summary H1 2012 H1 2011 Change CC Change £m £m % % % Revenue 508.7 474.0 7.3 6.5 6.8 Adjusted operating profit 103.4 91.9 12.5 - - Adjusted operating profit 20.3% 19.4% 0.9%pt - - margin Adjusted EBITDA 111.4 100.6 10.7 - - Adjusted PBT 90.6 79.8 13.5 - - Diluted adjusted EPS (pence) 28.6p 25.1p 13.9 - - Dividend per share (pence) 6.7p 6.3p 6.3 - -
Cash generated from operations 113.9 112.4 1.3 - -
IFRS Statutory results H1 2012 H1 2011 Change £m £m % Revenue 508.7 474.0 7.3 Operating profit 83.8 72.6 15.4 Profit after tax 62.1 55.8 11.3 EPS (pence) 22.7 20.5 10.7
Weighted av. no. of shares (millions) 244.1 243.4 -
Net debt 536.8 482.2 - Operational Highlights H1 2012 H1 Change Underlying (1) 2011 Change at CC Change £m £m % % % Revenue Events 233.0 177.1 31.6 29.4 16.7 PR Newswire 100.1 95.2 5.1 3.2 3.9 Data Services 90.0 100.2 -10.2 -9.1 -2.1 Marketing Services - Online 46.2 41.8 10.5 8.5 8.2 Marketing Services - Print 39.4 59.7 -34.0 -33.4 -12.2 Total Revenue 508.7 474.0 7.3 6.5 6.8 Adjusted Operating Profit Events 74.8 57.7 29.6 26.7 PR Newswire 22.3 20.1 10.9 9.0 Data Services 13.3 17.4 -23.6 -20.0 Marketing Services - Online (0.1) 0.7 nm nm Marketing Services - Print 2.1 3.1 -32.3 -33.5 Net corporate costs (9.0) (7.1) -26.8
Total Adjusted Operating Profit 103.4 91.9 12.5 11.3
Adjusted Operating Profit Margin Events 32.1% 32.6% -0.5%pt PR Newswire 22.3% 21.1% 1.2%pt Data Services 14.8% 17.4% -2.6%pt Marketing Services - Online -0.2% 1.7% -1.9%pt Marketing Services - Print 5.3% 5.2% 0.1%pt
Total Adjusted Operating Profit 20.3% 19.4% 0.9%pt
Margin (1) Following the formation earlier this year of our UBM Technology businessunit, which we have formed to consolidate our Events and other MarketingServices businesses serving the global technology community, a number ofbusiness activities have been reallocated from the Data Services segment toEvents and Marketing Services - Online. The businesses affected include HDI,SharedVue, Demand Generation and Game Vault, now part of UBM Technology; andICMI, now part of UBM Live. The impact of this realignment on revenue andEBITA for the six month period ended 30 June 2012 is as set out in thefollowing table:
£m Data Services Events Marketing Services - Online
Revenue (5.4) 3.4 2.0 EBITA - (0.1) 0.1
As this change is not material from a group perspective, prior year resultshave not been restated. This detailed information is provided to facilitateanalysis of year on year performance of the affected segments. Underlyinggrowth rates shown for each vertical and segment have been adjusted for thischange.Events
- H1 Event revenues were up 31.6% to £233.0m (H1 2011: £177.1m); underlying
growth was 16.7%
- Underlying revenue growth in Emerging Markets was 20.0%
- Emerging Markets accounted for 30.8% of total event revenue in H1 2012, of
which 72.0% was China and 17.1% was South East Asia (2011: 7.2%)
- H1 2012 biennial event revenues were £14.7m (H1 2011: £9.4m; H2 2011: £26.8m)
- Forward bookings as at 30 June 2012, for our 2011 top 20 events running in
the next 12 months, were up 12.7% (12.9% a year ago)
- H1 adjusted operating profit was £74.8m (H1 2011: £57.7m) representing an
operating margin of 32.1% (H1 2011: 32.6%)
- The reduction in margin reflects organic growth initiatives. During the
period we launched nine geo-adapted events; we have also increased headcount,
including some 200 staff in Asia, to support continued growth
- The 29.6% increase in adjusted operating profit was due partly to the
acquisitions of Ecobuild, Malaysia International Furniture Fair and Airport
Cities, along with a good performance from existing shows, notably: Game
Developer Conference; the June Hong Kong Jewellery & Gem show; CPhI China; and
Sign China all of which showed double digit growth
- Five acquisitions contributed £4.7m to H1 revenues
- Outlook: we now expect underlying growth for Events for the full year will be
in the range of 12% to 14%, with operating profit margin between 31% and 32%
PR Newswire
- PR Newswire's revenues rose 5.1% to £100.1m (H1 2011: £95.2m); underlying
growth was 3.9%
- US revenue growth reflects resilient US distribution, an increase in text
wire average revenue per message and an increase in newer distribution products
that extend the core wire offerings, along with increased financial filing and
printing revenue
- European performance was strong (especially in the Nordic region) together
with continued good growth in Asia and Latin America
- Revenues at Canada Newswire remained flat, reflecting growth in distribution
offsetting broadcast and webcast production revenue declines
- H1 adjusted operating profit was £22.3m (H1 2011: £20.1m) representing an
operating margin of 22.3% (H1 2011: 21.1%)
- Improved margin reflects growth in US distribution and international business
as well as the benefit of investment and sales force development
- Agility, the integrated targeting, distribution and monitoring platform was
launched in June and has been well received. Previous product launches,
notably iReach, also continue to grow, albeit from a small base
- Outlook: we continue to expect that underlying growth for PR Newswire for the
full year will be in the range of 3% to 5%, with margins stable relative to
2011Data Services
- Reported H1 Data Services revenue fell 10.2% to £90.0m (H1 2011: £100.2m);
underlying decline was 2.1%
- The reduced reported revenue mainly reflects a reclassification of £5.1m of
revenue (H1 2011) away from Data Services into other segments following the
creation of UBM Technology; the underlying decline reflects negative phasing in
the Technology & IP businesses and continued declines in Trade & Transport
- Healthcare revenues were stable on an underlying basis
- Technology & IP revenues reflect lower TechInsights revenue relative to the
strong first half last year. The revenue decline principally reflects phasing;
TechInsights bookings for H2 are strong and the outlook for the remainder of
the year is positive
- Trade & Transport was down due to reduced advertising in print data
directories
- H1 adjusted operating profit of £13.3m (H1 2011: £17.4m) represents an
operating margin of 14.8% (H1 2011: 17.4%)
- The decrease in adjusted operating profit of £4.1m and a 2.6 percentage point
reduction in margin when compared to the same period last year was driven
primarily by TechInsights phasing
- Outlook: we continue to expect both stable revenue for Data Services and a
margin of 17% for the full year as TechInsights returns to growth with
significant margin improvement in the second half
- We are reviewing strategic options for the Data Services businesses in the
context of growing investment opportunities across the group
Marketing Services - Online & Print
- H1 Marketing Services - Online & Print combined revenue decreased 15.7% to £
85.6m (H1 2011: £101.5m); underlying decline was 1.9%
- Online accounted for 54.0% of Marketing Services combined, up from 41.2% in
H1 2011
- During H1 2012, print titles with 2011 revenues totalling £15.2m were
divested as portfolio rationalisation continues
- Underlying Online revenue growth of 8.2% to £46.2m (H1 2011: £41.8m) was
driven principally by webcasts and other engagement products, together with an
increasing number of products now incorporating social media. £2.0m of the
reported revenue increase was a result of a reclassification into the Marketing
Services - Online segment from Data Services
- Underlying Print revenue decline of 12.2% to £39.4m (H1 2011: £59.7m) was
driven predominantly by reduced advertising and general marketing spend,
notably in technology, construction and pharmaceutical communities
- H1 Marketing Services - Online & Print adjusted operating profit of £2.0m (H1
2011: £3.8m) representing an operating margin of 2.3% (H1 2011: 3.7%)
- Outlook: reflecting faster than previously anticipated declines in print
advertising, we now expect underlying growth for Marketing Services - Online &
Print for the full year will be in the range of 0% to 2%, with margin of
between 4% and 6%Outlook summary
We are mindful of the risks to the wider macroeconomic environment, particularly in Europe. However, we believe UBM is well aligned with the potential for global growth in terms of our geographic footprint, the markets we serve and the products and services we deliver.
Given strong performance year to date, we now project: Events underlying fullyear growth will be in the region of 12% to 14%; on the other hand, MarketingServices underlying growth between 0% and 2%, reflecting declines in printfaster than originally anticipated. Our other segments remain on track with ourpreviously articulated expectations as we anticipate improving performance fromour Data Services business through the year.
While segmental guidance is in the aggregate trending positively, we are retaining our consolidated guidance to reflect the uncertain external environment.
Throughout this announcement:Where quoted, underlying growth rates exclude currency movements, discontinuedrevenues, proforma revenues from acquisitions and biennial events. Thereclassification of certain products from the Data Services segment into theEvents segment and Marketing Services - Online segment is excluded from theunderlying growth calculations in all cases.
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 operating margin relates to our adjusted operating profit. It is adjusted operating profit expressed as a percentage of revenues.
Adjusted earnings per share is before amortisation of intangible assets arisingon acquisitions, certain exceptional items, deferred tax on intangible assets,share of taxation on profit from joint ventures and associates, taxationrelating to exceptional items and net financing income/expense - other.Cash conversion is the ratio of adjusted cash generated from operations toadjusted operating profit. Adjusted cash generated from operations representsadjusted operating profit, before depreciation and profit from associates andjoint ventures, after capital expenditure, movements in working capital,dividends from associates and joint ventures and non cash movements.UBM's Emerging Markets comprise the non-G10 countries - most notably: China,Brazil, India, Thailand, Singapore, Indonesia, Malaysia, Philippines, Mexicoand UAE.
Forward bookings refer to the top 20 annual events based on revenue achieved during the 12 month period to 31 December 2011.
ContactsMedia Peter Bancroft Director of Communications E-mail [email protected] Direct telephone +44 20 7921 5961 Chris Barrie Citigate Dewe Rogerson E-mail [email protected] Direct telephone +44 20 7282 2943 Mobile +44 796 872 72 89 InvestorsJames Davies Acting Head of Investor Relations E-mail [email protected] Direct telephone +44 20 7921 5963 James O'Shaughnessy Investor Relations Manager Email
Direct telephone +44 20 7921 5943 UBM will host a presentation at 11am at the CPC Venues Auditorium, 4 ChiswellStreet, EC1Y 4UP. A live webcast of the results presentation will be madeavailable from UBM's website. To access the webcast please go to www.ubm.com. A recording of the webcast will also be available on demand from UBM's website,www.ubm.com after 2pm.Notes to Editors About UBM plcUBM plc is a leading global business media company. We inform markets and bringthe world's buyers and sellers together at events, online, in print and providethem with the information they need to do business successfully. Our 6,500staff in more than 30 countries are organised into specialist teams which servecommercial and professional communities, helping them to do business and theirmarkets to work effectively and efficiently.
For more information, go to www.ubm.com;
Follow us at @UBM_plc to get the latest UBM news.
EVENTS H1 H1 Change Underlying 2012 2011 Change at CC Change £m £m % % % Annual Events Revenue 218.3* 167.7 30.2 28.0 16.7 Biennial Events Revenue 14.7 9.4 56.4 56.4 Total Revenue 233.0 177.1 31.6 29.4
Total Adjusted Operating Profit 74.8 57.7 29.6 Total Adjusted Operating Profit 32.1% 32.6% -0.5%pt
Margin
* Note that 2012 Annual Events Revenue includes £3.4m of revenue following the reclassification described in footnote 1 on page 2
We remain encouraged by the progress of our Events business which now accountsfor 45.8% of UBM revenues (H1 2011: 37.4%) and 66.5% of total group adjustedoperating profit excluding corporate costs (H1 2011: 58.3%). Total reported revenues grew by 31.6% over the period to £233.0m (H1 2011: £177.1m). This benefitted from good underlying performance, the addition of anumber of high performing new shows and a positive contribution from "evenyear" biennial events, which generated revenues of £14.7m.Annual event revenues grew 30.2% to £218.3m (H1 2011: £167.7m) with standrevenues up 31.3% to £153.6m (H1 2011: £117.0m), attendee revenues up 23.9% to£24.9m (H1 2011: £20.1m) and sponsorship and other revenues increasing 30.1% to£39.8m (H1 2011: £30.6m). A total of 30,500 exhibitors attended our annualevents during the period (H1 2011: 26,000) with square metres or our annualportfolio rising 23.0% to 713,350 and overall visitor numbers of 1,196,000being 34.1% ahead of the first half 2011.During the period we hosted over 225 events, including: 170 tradeshows, 50conferences and 8 awards in 27 different countries (H1 2011: over 140tradeshows, 55 conferences and 6 awards in 22 countries). This included ninenew geo-adaptations spread between China, India and the US. During the periodwe acquired five businesses and as part of the usual portfolio management,discontinued certain others which generated revenue of £2.6m in H1 2011.We invested £21.1m (excluding £4.7m of contingent and deferred consideration)buying outright or acquiring majority interests in the five acquired businesseswhich contributed £4.7m to 2012 reported events revenue in H1. On an underlying basis annual events revenue grew 16.7% over the prior period. Change Underlying H1 2012 H1 2011 Change at CC Change £m £m % % % Annual Events Revenue Emerging Markets 68.4 52.9 29.3 26.7 20.0 N. America 80.2* 62.6 28.1 25.3 16.7 UK 43.0 31.1 38.3 37.8 7.6 Europe 19.6 17.0 15.3 14.6 14.1 RoW 7.1 4.1 73.2 69.0 67.9 Annual Events Revenue 218.3 167.7 30.2 28.0 16.7
*Note that 2012 North America events revenue includes £3.4m of revenue following the reclassification described in footnote 1 on page 2
The table above shows H1 revenue for annual events split by geography. Emerging Markets now account for 31.3% of our annual event revenues, up 29.3%compared to H1 2011. This increase was partly due to the acquisition of theMalaysia International Furniture Fair, along with particularly goodperformances in CPhI China, Sign China and the June edition of the Hong KongJewellery and Gem show. Underlying event revenues for Emerging Markets were up20.0%.US revenues grew 16.7% underlying due to attractive growth in Game DeveloperConference (particularly from strong attendee revenues) and Enterprise Connect.Reported revenues also reflect the £3.4m of revenue reallocated from DataServices into the North American events line.
Reported revenues from UK annual events were up 38.3% with underlying UK annual event revenues rising, driven largely by a strong performance at Ecobuild. Underlying UK annual event revenues rose 7.6%.
European annual revenues rose 15.3% primarily as a result of double digit growth in the Turkey Jewellery show, Medtec, Pharmapack, Health IT and Breakbulk Europe. On an underlying basis, European annual revenues rose 14.1%. The reported Rest of World revenues were up 73.2%. The increase related predominantly to Japan.
Adjusted operating profit rose 29.6% to £74.8m (H1 2011: £57.7m); operatingmargin was 32.1% (H1 2011: 32.6%). The positive contribution from our acquiredevents, particularly Ecobuild, combined with operational leverage particularlyat other large shows, offset dilution from new geo-adaptations and launches.PR NEWSWIRE H1 H1 Change Underlying 2012 2011 Change at CC Change £m £m % % % Revenue US Distribution 48.0 44.9 6.9 4.1 4.0 US Other 9.7 10.8 -10.2 -12.6 -12.8 US Vintage 11.2 9.1 23.1 20.4 26.2 PR Newswire Europe 9.8 9.4 4.3 4.3 4.4 Canada Newswire 16.0 16.0 - - 0.4 PR Newswire Asia & LatAm 5.4 5.0 8.0 5.9 10.1 Total Revenue 100.1 95.2 5.1 3.2 3.9
Total Adjusted Operating Profit 22.3 20.1 10.9 Total Adjusted Operating Profit 22.3% 21.1% 1.2%pt
Margin
PR Newswire revenue for first half of 2012 grew 5.1% to £100.1m (H1 2011: £ 95.2m). Revenues were up 3.9% on an underlying basis.
US Distribution was strong with growth across all distribution productsresulting in underlying growth of 4.0% to revenues of £48.0m. US Distributionrevenue committed by contracts increased from £15.2m as at 30 June 2011 to £25.5m as at 30 June 2012.
US Other products fell 12.8% on an underlying basis to revenue of £9.7m. This decrease was driven by a reduction in broadcast services revenue reflecting reduced market demand and the termination of Vocus royalty revenue as we launched our proprietary targeting and monitoring product, Agility.
US Vintage revenues grew 26.2% on an underlying basis to £11.2m, driven largely by increased financial filing and printing revenue notably for XBRL filings.
Revenues generated at Canada Newswire remained flat at £16.0m reflecting a favourable variance in distribution, offset by reductions in broadcast and webcast production revenue against H1 2011.
Other international revenues rose 2.6% to £31.2m (H1 2011: £30.4m). PR NewswireEurope revenues rose by 4.4% on an underlying basis to £9.8m (H1 2011: £9.4m)largely driven by a continued strong performance within the Nordic region. PRNewswire Asia and Latin American businesses increased by 10.1% on an underlyingbasis, mainly due to continued expansion of services across China. Adjusted operating profit for PR Newswire was £22.3m resulting in a margin of22.3% (H1 2011: 21.1%). The increase of £2.2m and a 1.2 percentage pointincrease in margin when compared to the same period last year is a result ofimproved margins for US distribution and the international business, combinedwith the benefits of IT investment coming through.DATA SERVICES H1 H1 Change Underlying 2012 2011 Change at CC Change £m £m % % % Revenue Subscription & listing fees 66.0* 68.3 -3.4 -1.0 Professional Services 17.9* 25.4 -29.5 -31.2 Advertising 6.1 6.5 -6.2 -3.2 Total Revenue 90.0 100.2 -10.2 -9.1 -2.1
Total Adjusted Operating Profit 13.3 17.4 -23.6 Total Adjusted Operating Profit 14.8% 17.4% -2.6%pts
Margin *Note that 2012 Subscription & listing fees and Professional Services revenueexcludes £5.4m of revenue following the reclassification described in footnote1 on page 2
Data Services revenues were down 10.2% to £90.0m (H1 2011: £100.2m); the underlying revenue decline was 2.1%.
Subscription & listing fees decreased by £2.3m or 3.4% to £66.0m. Of thisdecrease £1.4m (H1 2011) was due to the reclassification of certain productsout of the Data Services segment. The remaining £0.9m decline was made up fromthe expected decline in mature print data products (in healthcare and aviation)more than off-setting the growth from digital subscriptions.Professional Services decreased by £7.5m or 29.5% to £17.9m. Of this decrease £3.7m (H1 2011) was due to the reclassification of certain products out of theData Services segment. The remainder was predominantly due to declines in theTechnology & IP vertical as a result of below expected revenues at TechInsightsthrough the period. That said, order intake in Q2 for TechInsights is strongand we anticipate that the business will return to growth in H2.
Advertising revenues declined by 6.2% to £6.1m largely driven by the ongoing decline in print advertising within certain print directory products. Healthcare and Trade & Transport are the principal sectors which are experiencing this weakness.
Change Underlying H1 2012 H1 2011 Change at CC Change £m £m % % % Revenue Health 41.7 44.2 -5.7 -0.7 - Technology & IP 16.5* 23.5 -29.8 -31.5 -3.7 Trade & Transport 17.9 18.9 -5.3 -6.3 -6.3 Paper 7.5 7.2 4.2 1.4 0.1 Built Environment 6.4 6.4 - - 0.5 Total DS Revenue 90.0 100.2 -10.2 -9.1 -2.1
*Note that 2012 Technology & IP revenue excludes £5.4m of revenue following the reclassification described in footnote 1 on page 2
The table above highlights revenue growth by community. Underlying revenuesfrom Health were flat across the period reflecting growth in digital dataproducts offset by expected pressure on the professional information productsacross the global medical brands.Reported Technology & IP revenues declined by £7.0m. The reported revenuedecline reflects principally the reclassification of certain businesses, forwhich revenue totalled £5.1m (H1 2011), into other segments. Underlying declineof 3.7% was due to softness in revenue from our TechInsights business inparticular geographies, including Japan, which more than offset gains fromother regions, notably Europe and China. The revenue decline from Japan waslargely driven by the timing of key client deliverables for IP campaigns.Bookings for TechInsights are strong and the outlook for the remainder of theyear is positive as clients ramp up their intellectual property campaigns.
Trade & Transport underlying revenues were down 6.3%, reflecting declining print data directory revenues in Aviation for both flight guides and cargo products and continued competitive pressure across the vertical. We are actively reviewing the product offering to maximise the digital migration opportunity within the attractive areas of the aviation industry as the print products remain in structural decline.
Revenues from Paper rose 0.1% on an underlying basis; Built Environment rose0.5% on an underlying basis as renewal rates remain good despite a challengingindustry back drop.Adjusted operating profit for Data Services fell 23.6% to £13.3m (H1 2011: £17.4m) with a corresponding decline in margin to 14.8% (H1 2011: 17.4%). Thisdecline is a result of reduced profitability in the Health vertical as printdirectories transition to digital formats which is leading to margin dilutionand TechInsights phasing.
Steps are in place to improve margins. These initiatives include strict product rationalisation and cost reduction together with launches and enhancements.
MARKETING SERVICES - ONLINE & PRINT
H1 H1 Change Underlying 2012 2011 Change at CC Change £m £m % % % Total Revenue 85.6 101.5 -15.7 -15.9 -1.9
Total Adjusted Operating Profit 2.0 3.8 -47.4 Total Adjusted Operating Profit 2.3% 3.7% -1.4%pt
Margin ONLINE H1 H1 Change Underlying 2012 2011 Change at CC Change £m £m % % % Revenue Advertising 28.0 26.9 4.1 1.8 Lead Generation & other 16.4* 13.6 20.6 19.3 Subscriptions 1.8 1.3 38.5 35.0 Total Revenue 46.2 41.8 10.5 8.5 8.2
Total Adjusted Operating Profit (0.1) 0.7 Total Adjusted Operating Profit (0.2)% 1.7%
Margin
*Note that 2012 Lead Generation & other revenue includes £2.0m of revenue following the reclassification described in footnote 1 on page 2
Online revenues grew to £46.2m with underlying revenue growth of 8.2%.
Growth was solid across advertising, lead generation and subscriptions, drivenprincipally by webcasts and higher engagement products across our communitiesand geographies, along with an increasing number of products focussed oncommunity engagement. The subscription element of the business grew 38.5% to £1.8m in revenues (H1 2011: £1.3m), largely in Asia. The Technology vertical increased by 15.2% driven by growth in higherengagement products and webcasts. This community is very receptive to continuedinnovation and is also evidence of the continued strength in the tradingenvironment for this sector. We continue to monitor trends closely in order toexplore potential new revenue opportunities and we are seeing higher levels ofaudience engagement as the popularity of key digital events grows. Online engagement products delivered through our UBM DeusM business made goodprogress. As at the end of the half, 35 online communities had been contractedby sponsors and the sites created attracted 2.5m unique visitors and 35,000whitepaper downloads. We expect DeusM to make a visible impact on Onlinerevenue growth and margin improvement in future periods
The adjusted operating profit for Online was £(0.1)m (H1 2011: £0.7m) with a margin of -0.2% (H1 2011: 1.7%).
PRINT H1 H1 Change Underlying 2012 2011 Change at CC Change £m £m % % % Total Revenue 39.4 59.7 -34.0 -33.4 -12.2
Total Adjusted Operating Profit 2.1 3.1 -32.3 Total Adjusted Operating Profit 5.3% 5.2% 0.1%pt
Margin
Print within the overall UBM business revenue mix continues to diminish and nowaccounts for 7.7% of total revenues (H1 2011: 12.6%) and 1.9% of total adjustedoperating profit excluding corporate costs (H1 2011: 3.1%). The structuraldecline in print continues especially within the technology and pharmaceuticalcommunities and we continue to focus our portfolio to offer print as oneelement of an integrated marketing solution.Revenues for the period fell by 34.0% to £39.4m. During H1 2012 we disposed ofthe UK agriculture portfolio - comprising the Farmers Guardian and Dairy Farmertitles, and the medical portfolios - including the Pulse and PracticalCommissioning magazines.
On an underlying basis revenues fell 12.2% over the prior year.
The structural declines of print and the disposal of assets resulted in a decline in adjusted operating profit to £2.1m (H1 2011: £3.1m) although operating margins rose 0.1%pt to 5.3%.
Summary Group income statement
The table below presents selected items from UBM's consolidated incomestatement (which accompanies this summary), together with a reconciliation tonon-GAAP measures. IFRS Measures As adjusted1 H1 H1 H1 H1 2012 2011 Change 2012 2011 Change £m £m % £m £m % Revenue 508.7 474.0 7.3 508.7 474.0 7.3 Operating expenses (excluding (a) line (405.3) (382.1) (405.3) (382.1) items below)
Share of tax on profit in JV & (0.3) (0.4) (b)
(b) associates (a)
Other exceptional items (a) (0.9) (0.3) (b)
(b) EBITA 102.2 91.2 12.1 103.4 91.9 12.5
Amortisation - intangible assets (18.4) (18.6) (b)
(b) arising on acquisition (a) Operating profit 83.8 72.6 15.4 103.4 91.9 12.5 Net interest expense (14.2) (13.4) (14.2) (13.4)
Financing income - pension schemes 1.4 1.3 1.4
1.3 Financing income - other 0.8 2.0 (b) (b) Financing expense - other (1.7) (0.3) (b) (b) PBT 70.1 62.2 12.7 90.6 79.8 13.5 Taxation (8.0) (6.4) (13.1) (11.8) PAT 62.1 55.8 11.3 77.5 68.0 14.0 Non-controlling interests (6.6) (5.8) (6.6) (5.8) Attributable profit 55.5 50.0 11.0 70.9 62.2 13.9 EBITDA 110.2 99.9 10.3 111.4 100.6 10.7 Weighted average no. of shares 244.1 243.4 244.1 243.4 (million) Fully diluted weighted average no. of 248.1 248.2 248.1 248.2 shares (million) Earnings per share (pence) 22.7 20.5 10.7 29.0 25.5 13.7 Earnings per share (diluted) (pence) 22.4 20.1 11.4 28.6 25.1 13.9 Dividend per share (pence) 6.7 6.3 6.3 6.7 6.3 6.3
(a) Expenses not included within operating expenses figure
(b) All non-IFRS measures and business performance measures have been designated with a 1 and additional information on these measures has been provided at the end of this section.
Corporate costs
Total corporate costs for H1 2012 were £10.8m (H1 2011: £10.8m). These corporate costs are partially offset by internal cost recoveries from UBM's operating businesses and by sundry income which is not attributable to any reporting segment, resulting in a net corporate cost of £9.0m (H1 2011: £7.1m).
Exceptional items
Exceptional items relating to acquisitions
Following the adoption of IFRS 3 (revised) from 1 January 2010, acquisitioncosts of £0.9m (H1 2011: £1.4m) have been expensed as exceptional items,rather than included in the calculation of goodwill on acquisition aspreviously required under IFRS. For the six months ended 30 June 2011 anexceptional credit of £1.1m (H1 2012: £nil) was recognised in relation to therevision of the estimates of contingent consideration. Details of theacquisitions made in the six months ended 30 June 2012 are given in Note 13 ofthe Interim Financial Report.
Financing and interest expense
Net interest expense represents interest costs on UBM's bonds and bank loans,net of interest receipts on cash and cash equivalents. Net interest expense inH1 2012 was £14.2m, compared with £13.4m in H1 2011. This is mainly a result ofa higher average debt for the year and higher costs from lengthening debtmaturity.
Financing income includes an IAS 19 pension interest credit of £1.4m (H1 2011: £1.3m).
Net financing income/(expense) - other includes net income of £0.5m (H1 2011:net income £2.0m) in respect of ineffective fair value hedges and netinvestment hedges and a charge of £0.4m (H1 2011: £0.3m) in respect of foreignexchange losses on forward contracts and other fair value adjustments. An exceptional finance expense for £1.0m was expensed in the six months ended30 June 2012 (H1 2011: £nil) in relation to the fair value movement on putoptions over non-controlling interests. H1 2012 H1 2012 H1 2011 H1 2011 £m £m £m £m Interest income - cash and cash equivalents 0.4 0.5 Interest expense (14.6) (13.9) Financing income - pension schemes 1.4
1.3
Net financing income/(expense) - other: 0.1 1.7 Ineffectiveness on hedges 0.5 2.0
Foreign exchange loss on forward contracts (0.4) (0.2)
Other fair value adjustments - (0.1) Net finance expense before exceptional items (12.7) (10.4) Exceptional financing expense (1.0) - Net finance expense (13.7) (10.4) Income tax
UBM's effective rate of taxation1 for the first half of 2012 was 14.5% (31 December 2011: 14.8%). As at 30 June 2012, UBM's tax creditor stood at £63.5m (31 December 2011: £70.2m). We have necessarily made judgements as to the outcome of tax matters not concluded. This creditor has been classified as short term, in line with our accounting policy.
Foreign currency
Our income statement exposure to foreign currency risk is shown (by way of sensitivity to changes in exchange rates) in the foreign currency risk table below.
30 June Average exchange Currency value Effect on Effect on adjusted 2012 rate in H1 2012 rises/ falls by revenue +/-£m operating profit1 +/-£m US 1.5768 1 cent 1.6 0.4dollar Euro 1.2139 1 cent 0.5 0.2
The average exchange rates used in our H1 2011 income statement were US$: 1.621 and Euro: 1.149.
The table below outlines the currency profile of our revenues and adjusted operating profits for H1 2012:
H1 2012 Revenue % Adjusted operating profit1 % US Dollar 49.8 57.1 UK Pound 13.6 3.9Sterling Euro 10.8 13.7 Renminbi 6.2 9.7 Canadian Dollar 5.1 4.5 HK Dollar 4.8 4.6 Japanese Yen 2.2 2.9 Brazilian Real 0.9 1.1 Other 6.6 2.5 Total 100.0 100.0 Euro revenues comprise a relatively small part of UBM total revenue, accountingfor 10.8% of total revenue in H1 2012, of which over 75% was intra-country andapproximately 7% related to customers in Spain and Portugal. Given our largeand diverse customer base, there is no significant concentration of creditrisk.The Group has ample liquidity. Whilst the Group's revolving credit facility isnormally at least partially drawn in Euros (£79.1m at 30 June 2012) it canalternatively be drawn in other currencies, and there is headroom of £153.7m onthe Group's borrowing facilities at 30 June 2012. The Group's treasury policydoes not allow significant exposures with counterparties that are rated lessthan A by Standard & Poor's, Moody's or Fitch and we continuously monitor theconcentration of our counterparty risk.Capital StructureCapital managementUBM maintains conservative capital ratios in order to support its businessesand maximise shareholder value. At 30 June 2012, the net debt to adjustedearnings before interest, taxation, depreciation and amortisation was 2.3 timesas shown below: 2012 2011 £m £m Financial liabilities 645.1 604.2 Financial assets (108.3) (122.0) Net debt1 536.8 482.2 LTM EBITDA1 229.0 197.7
Net debt to LTM EBITDA ratio 1 2.3 times 2.4 times
1Refer to the Explanation of UBM's business measures section below for additional information on these non-IFRS financial measures.
Debt and Liquidity
Our funding strategy is to maintain a balance between continuity of funding andflexibility through the use of capital markets, bank loans and overdrafts. Tofacilitate access to these sources of funds we seek to maintain a long terminvestment grade credit rating with Moody's (current rating Baa3 with a stableoutlook and Standard & Poor's (current rating BBB- with a stable outlook). Thetable below summarises our committed facilities and undrawn balance as at 30June 2012. Cash and cash equivalents totalled £108.3m at 30 June 2012,providing total headroom of £262.0m. Facility Drawn Undrawn Maturity £m £m £m £m Syndicated Bank Facility 300.0 146.3 153.7 May 2016
£250m fixed rate sterling bond 250.0 250.0 - Nov 2016
$350m fixed rate dollar bond 223.2 223.2 - Nov 2020 Total 773.2 619.5 153.7
Note: Amounts drawn exclude fair value movements on the debt instruments.
In March 2012, as provided in the terms, we redeemed the €53.1m floating ratereset loans by paying the fair value of the instruments on that date of €62.6m(£52.2m). PensionsAt 30 June 2012, the aggregate deficit under IAS 19 was £38.2m, an increase of£6.7m on the deficit of £31.5m at 31 December 2011. The IAS 19 interest creditwas £1.4m, representing the excess of expected asset growth during H1 2012 overthe interest accretion on the scheme liabilities.
Cash flow
Cash generated from operations rose to £113.9m from £112.4m in H1 2011, reflecting higher operating profit and lower restructuring payments. Cash conversion1 was 112.1% of adjusted operating profit (H1 2011: 119.7%). Free cash flow1 prior to cash invested in acquisitions was £80.0m, a slight increase on £77.7m in H1 2011.
We expect to continue to generate significant free cash flow in H2 2012 becauseof our business model and believe that our cash on hand, cash from ouroperations and available credit facilities will be sufficient to fund our cashdividends, debt service and acquisitions in the normal course of business.
Acquisitions
We invested £26.6m (including estimated contingent and deferred considerationof £4.8m) in the acquisition of seven businesses in H1 2012 and a further £1.5mfor the remaining 21% minority shareholding of RISI Inc. These acquisitionswere closely aligned to our strategic priorities and provide us with exposureto attractive communities and geographies.Our investment comprised £22.0m (net of working capital adjustments) andexpected contingent and deferred consideration of £6.1m. We also made paymentsin respect of earnouts relating to acquisitions made in prior years totalling £16.2m. H1 2012 acquisitions Estimated Initial Expected contingent and total consideration deferred consideration consideration £m £m £m Events 4G World 2.7 - 2.7 Airport Cities (75%) 0.9 0.1 1.0 Malaysian International Furniture Fair ('MIFF') 7.4 0.8 8.2 DenTech China (70%) 3.6 3.8 7.4 Negocios Trilhos ('NT Expo') 6.5 - 6.5 Data Services Official Board Markets ('OBM') 0.5 0.1 0.6 Benchsmart 0.2 - 0.2 Total prior to equity transaction 21.8 4.8 26.6 RISI (21% minority shareholding) 0.2 1.3 1.5 Total 22.0 6.1 28.1 Contingent and deferred consideration Contingent Deferred Total £m £m £m At 1 January 2012 37.3 5.7 43.0 Change in estimate - goodwill (1.0) - (1.0)
Change in estimate - exceptional items relating
to acquisitions - - - Acquisitions during the year 4.7 1.4 6.1 Consideration paid (15.0) (1.2) (16.2) Foreign exchange gain (0.5) (0.1) (0.6) At 30 June 2012 25.5 5.8 31.3
The 2012 acquisitions have contributed adjusted operating profit1of £1.7m since acquisition and are expected to achieve a pre-tax return on investment1 of 14.5% on a pro forma basis for the full year.
The following table shows the performance of our acquisitions since 2010 relative to our target pre-tax cost of capital threshold of 10%:
Consideration Return on Investment1 £m 2010 2011 2012 2010 acquisitions 257.2 10.6% 12.2% 13.5% 2011 acquisitions 71.7 8.3% 13.4% 2012 acquisitions2 28.1 14.5% Total 357.0 13.6%
1 Referto the Explanation of UBM's business measures section below for additional information on these non-IFRS financial measures.
2 2012Return on investment pro forma for full year 2012 results.
Disposals
During the first half we completed the sale of non core businesses. Total consideration (net of cash disposed) was £9.2m.
Dividends
The Board has declared an interim dividend of 6.7 pence per share (H1 2011: 6.3pence) in accordance with its policy of an interim dividend being equal to onethird of the prior year's final dividend. The interim dividend on ordinaryshares will be paid on 11 October 2012 to Shareholders on record on 24 August2012.Related party transactions
Details of related party transactions in the six months ended 30 June 2012 are given in Note 18 of the Interim Financial Report.
Going Concern
After making enquiries, the directors have a reasonable expectation that UBMhas adequate resources to continue in operational existence for the foreseeablefuture. Accordingly, they continue to adopt the going concern basis inpreparing the financial statements.
In reaching this conclusion, the directors have had due regard to the following:
- After taking account of available cash resources, committed bank facilities,
short term borrowings none of UBM's borrowings fall due within the next two
years that require refinancing from resources not already available.
- The strong cash generated from operations, committed facilities and UBM's
ability to access debt capital markets, taken together, provide confidence that
UBM will be able to meet its obligations as they fall due.
SUMMARY OF RISKS & UNCERTAINTIES
The principal risks and uncertainties affecting the business activities of theGroup were identified on pages 41 - 43 of the 2011 Annual Report and Accounts.This document is available on the Company's website at www.ubm.com. The principal risk factors that the directors believe could materially affectUBM are the same as those disclosed more fully in the 2011 Annual Reports andAccounts as detailed below.
The risks listed do not necessarily comprise all those associated with UBM, and are not set out in any order of priority.
- Marketplace risk
- In times of economic slowdown or recession, some companies spend less, particularly on advertising. - Ability to respond to changes in technological innovation.
- A disaster or natural catastrophe, terrorism, political instability or
disease could affect our ability to continue to do business if it renders offices unavailable or curtails travel (which will have an impact on the running of an event).
- Mergers & Acquisitions
- The availability of suitable acquisition candidates, obtaining regulatory
approval and changes in the availability or cost of financing may affect our
ability to execute on this strategy.
- Delays in integration or unexpected costs or liabilities, as well as the risk
of failing to realise operating benefits or synergies from completed
transactions may mean that the financial impact is less beneficial than
expected.
- Attracting and retaining key management personnel
- Operational
- Operations in new territories may present logistical and management
challenges due to different business cultures, laws and languages.
- The failure to manage and execute significant projects successfully could
lead to increased costs, delays or erosion of UBM's competitive position.
- Unfavourable legislation changes may have a negative impact.
- Financial
- Liquidity issues may curtail the ability to make certain acquisitions, while
local liquidity issues could have a negative reputational impact, particularly
with suppliers. - We seek to limit interest rate and foreign exchange risk by the use of
financial instruments. As a result we have an unsecured credit risk from the
potential non-performance by counterparties to these financial instruments.
- Tax risk - failure to comply with the necessary tax legislation or challenges
to legal structures.
- Pension fund risk - risk that asset returns are insufficient to cover changes
in the schemes liabilities over time.
Explanation of UBM's business measures
Financial How we define it Why we use it Measure
Underlying Underlying measures are The Group believes underlying revenue and adjusted for the estimated revenue and underlying underlying effects of acquisitions, operating profit assists operating discontinued products, foreign investors in their assessment
profit exchange and biennial events. and understanding of our underlying business trends, without distortion from the effect of acquisitions, discontinued products, biennial events and foreign currency movements during the period.
Adjusted Operating profit excluding The Group believes adjusted operating amortisation of intangible operating profit, adjusted profit and assets arising on operating margin and adjusted
EBITDA acquisitions, exceptional EBITDA assists investors in items and share of taxation on their assessment and joint ventures and understanding of our earnings associates. EBITDA is and is also a measure commonly adjusted group operating used by shareholders to profit before depreciation. measure our performance. Adjusted Margin relates to our adjusted margin operating margin. It is adjusted operating profit expressed as a percentage of total revenues Before amortisation of The Group believes adjusted Adjusted intangible assets on profit before tax and adjusted
profit before acquisitions, exceptional EPS assists investors in their tax and items, share of taxation on assessment and understanding
adjusted EPS profit from joint ventures and of our earnings and is also a
associates, net financing measure commonly used by income/ (expense) - other. shareholders to measure our EPS also excludes deferred tax performance on the amortisation of intangible assets. Diluted EPS includes the impact of share options. Net debt Net debt is current and Provides a measure of non-current borrowings less indebtedness in excess of the cash and cash equivalents. current cash available to pay down debt.
Net debt to Net debt divided by adjusted Provides a measure of EBITDA EBITDA. financial leverage. Net debt to EBITDA adjusted to include a LTM EBITDA full year of pro forma
operating profit from acquisitions made during 2011. Free cash flow Net cash provided by operating Helps assess our ability, over activities after meeting the long term, to create value obligations for interest, tax, for our shareholders as it dividends paid to non represents cash available to controlling interests, capital repay debt, pay dividends and expenditures and other fund future acquisitions. investing activities. Adjusted Adjusted to exclude The Group believes adjusted
operating cash non-operating movements in operating cash flow assists
flow working-capital, such as investors in their assessment expenditure against and understanding of our reorganisation and operating cash flows. restructuring provisions. Cash Cash conversion is the ratio conversion of adjusted cash generated from operations to adjusted operating profit.
Pre-tax return Attributable adjusted Helps us assess the on investment operating profit divided by performance of our
the cost of acquisitions. acquisitions relative to our Calculated on a pro forma target pre-tax cost of capital basis, as if the acquired threshold of 10%. business were owned throughout the year. Estimated Estimated total consideration Provides a measure of total total includes initial consideration consideration for businesses
consideration (net of cash acquired), the acquired.
latest estimate of expected earnouts and deferred consideration. Return on ROACE is operating profit Provides a measure of the average before exceptional items efficiency of profitability ofcapital divided by average capital our capital investment. employed employed. Average capital (ROACE) employed is the average of opening and closing total assets less current liabilities for each period.
Effective tax The effective tax rate on Provides a more comparable
rate adjusted profit before tax basis to analyse our tax rate. reflects the tax rate excluding movements on deferred tax balances on the amortisation of intangible assets.
Interim consolidated income statement
for the six months ended 30 June 2012
Before Before exceptional Exceptional exceptional Exceptional items items Total items items Total 30 June 30 June 30 June 30 June 30 June 30 June 2012 2012 2012 2011 2011 2011 Unaudited Unaudited Notes £m £m £m £m £m £m Continuing operations 4 Revenue 508.7 - 508.7 474.0 - 474.0 Other operating income 4.0 - 4.0 2.5 - 2.5 Operating expenses (410.7) - (410.7) (386.7) - (386.7) Amortisation of intangible assets arising on acquisitions (18.4) - (18.4) (18.6) - (18.6) Exceptional items relating to 5 acquisitions - (0.9) (0.9) - (0.3) (0.3) Share of results of joint ventures and associates (after tax) 1.1 - 1.1 1.7 - 1.7 Group operating profit 84.7 (0.9) 83.8 72.9 (0.3) 72.6 Finance income/ (expense) 6 Interest income 0.4 - 0.4 0.5 - 0.5 6 Interest expense (14.6) - (14.6) (13.9) - (13.9) 6 Financing income 1.4 - 1.4 1.3 - 1.3 Financing income - 6 other 0.8 - 0.8 2.0 - 2.0 Financing expense 6 - other (0.7) (1.0) (1.7) (0.3) - (0.3) Profit before tax 72.0 (1.9) 70.1 62.5 (0.3) 62.2 Taxation (8.0) - (8.0) (6.4) - (6.4) Profit for the period 64.0 (1.9) 62.1 56.1 (0.3) 55.8 Attributable to: Owners of the parent entity - ordinary shares 55.5 50.0 Non-controlling interests 6.6 5.8 62.1 55.8 Earnings per share (pence) 7 - basic 22.7p 20.5p 7 - diluted 22.4p 20.1p £m £m Adjusted Group 4 operating profit* 103.4 91.9 Amortisation of intangible assets arising on acquisitions (18.4) (18.6) 5 Exceptional items relating to acquisitions (0.9) (0.3) Share of taxation on profit in joint ventures and associates (0.3) (0.4) Group operating 4 profit 83.8 72.6 £m £m Dividends 8 Second interim dividend of 20.0p (2011: 19.0p) 48.9 46.2 8 Proposed interim dividend of 6.7p (2011: 6.3p) 16.4 15.3 *Adjusted Group operating profit represents Group operating profit excludingamortisation of intangible assets arising on acquisitions, exceptional itemsand share of taxation on profit in joint ventures and associates.
Consolidated income statement
for the year ended 31 December 2011
Before exceptional Exceptional Total items items 31 31 December 31 December December 2011 2011 2011 Audited Notes £m £m £m Continuing operations 4 Revenue 972.3 - 972.3 Other operating income 9.8 - 9.8 Operating expenses (783.8) - (783.8) Amortisation of intangible assets arising on acquisitions (37.5) - (37.5)
5 Exceptional items relating to acquisitions - (4.6) (4.6) 5 Impairment charge - (3.7) (3.7) Share of results from joint ventures and associates (after tax) 2.9 - 2.9 Group operating profit 163.7 (8.3) 155.4 Finance income/(expense) 6 Interest income 1.1 - 1.1 6 Interest expense (28.7) (8.5) (37.2) 6 Financing income 3.1 - 3.1 6 Financing income - other 1.2 - 1.2 6 Financing expense - other (0.7) (20.9)
(21.6) Profit before tax 139.7 (37.7) 102.0 Taxation (15.9) - (15.9) Profit for the year 123.8 (37.7) 86.1 Attributable to: Owners of the parent entity - ordinary shares 75.7 Non-controlling interests 10.4 86.1 Earnings per share (pence) 7 - basic 31.1p 7 - diluted 30.6p £m
4 Adjusted Group operating profit*
201.9
Amortisation of intangible assets arising on acquisitions (37.5) Exceptional reorganisation and restructuring 5 costs - 5 Exceptional items relating to acquisitions
(4.6) Impairment charge (3.7) Share of taxation on profit in joint ventures and associates
(0.7)
4 Group operating profit 155.4 £m Dividends 8 Interim dividend of 6.3p
15.3
8 Proposed second interim dividend of 20.0p 48.7 *Adjusted Group operating profit represents Group operating profit excludingamortisation of intangible assets arising on acquisitions, exceptional itemsand share of taxation on profit in joint ventures and associates.
Interim consolidated statement of comprehensive income
for the six months ended 30 June 2012
Six Six Year months months ended ended ended 31 30 June 30 June December 2012 2011 2011 Unaudited Unaudited AuditedNotes £m £m £m Profit for the period 62.1 55.8 86.1 Other comprehensive (losses)/income:
Currency translation differences on foreign 12 operations - Group (15.9) (4.7) 1.3 12 Net investment hedge 10.2 11.7 (0.7) Actuarial (losses)/gains recognised in the pension schemes (10.5) 13.9 (27.3) Irrecoverable element of pension surplus 0.7 (3.0) (1.0) Share of other comprehensive income/(expense) of joint ventures and associates: Currency translation differences on foreign 12 operations 0.2 (0.2) 0.1 Actuarial losses recognised in the pension schemes of associates (0.1) (0.2) (0.4) 0.1 (0.4) (0.3) Income tax relating to components of other comprehensive income - - - Other comprehensive (losses)/income for the period net of tax (15.4) 17.5 (28.0) Total comprehensive income for the period net of tax 46.7 73.3 58.1 Attributable to: Owners of the parent entity - ordinary shares 40.5 67.7 47.3 Non-controlling interests 6.2 5.6 10.8 46.7 73.3 58.1
Interim consolidated statement of financial position
at 30 June 2012 31 30 June 30 June December 2012 2011 2011 Unaudited Unaudited AuditedNotes £m £m £m Assets Non-current assets Goodwill 1,085.0 1,047.2 1,088.0 Intangible assets 155.4 156.4 162.8 Property, plant and equipment 36.0 41.0
40.8
Investments in joint ventures and associates 21.1 21.1
18.3
15 Retirement benefit surplus 9.7 14.8
10.9
Derivative financial assets 31.5 13.1 23.3 1,338.7 1,293.6 1,344.1 Current assets Inventories 3.1 4.3 6.3 Trade and other receivables 242.1 233.6 227.8 Derivative financial assets 0.1 - - Cash and cash equivalents 108.3 122.0 106.7 353.6 359.9 340.8 Total assets 1,692.3 1,653.5 1,684.9 Liabilities Current liabilities 10 Borrowings - 123.0
53.0 Derivative financial liabilities 3.5 0.3 0.2 Trade and other payables 424.5 408.4 407.8 Provisions 11.5 9.7 15.0 Current tax liabilities 63.5 70.2 65.9 503.0 611.6 541.9 Non-current liabilities 10 Borrowings 645.1 481.2 580.1 Derivative financial liabilities 27.1 25.2 35.6 Trade and other payables 7.5 15.2 13.7 Provisions 13.8 20.0 14.3
15 Retirement benefit obligation 47.9 11.7
42.4
Deferred tax liabilities 42.0 42.9 44.9 783.4 596.2 731.0 Total liabilities 1,286.4 1,207.8 1,272.9 Equity attributable to owners of the parent entity 11 Share capital 24.5 24.5 24.5 Share premium 5.6 3.8 4.1 12 Other reserves (608.5) (600.8) (605.1) Retained earnings 967.4 1,002.7 973.9
Put options over non-controlling interests (12.4) (12.4)
(12.4)
Total equity attributable to owners of the parent entity 376.6 417.8 385.0 Non-controlling interests 29.3 27.9 27.0 Total equity 405.9 445.7 412.0 Total equity and liabilities 1,692.3 1,653.5 1,684.9
Interim consolidated statement of changes in equity
for the six months ended 30 June 2012
Total Put equity options attributable over to owners Share Share Other Retained non-controlling
of parent Non-controlling Total
capital premium reserves earnings interests entity interests equityNotes £m £m £m £m £m £m £m £m At 1 January 2012 24.5 4.1 (605.1) 973.9 (12.4) 385.0 27.0 412.0 Profit for the period - - - 55.5 - 55.5 6.6 62.1 Other comprehensive losses - - (5.1) (9.9) - (15.0) (0.4) (15.4) Total comprehensive (losses)/income for the period - - (5.1) 45.6 - 40.5 6.2 46.7 Equity 8 dividends - - - (48.9) - (48.9) - (48.9) Non-controlling interest dividends - - - - - - (6.4) (6.4) 13 Non-controlling interest arising on business combinations - - - - - - 3.2 3.2 Acquisition of non-controlling 13 interest - - - (0.8) -
(0.8) (0.7) (1.5) Issued in respect of share option schemes and other entitlements - 1.5 - - - 1.5 - 1.5 Share-based payments - - - 2.1 - 2.1 - 2.1 Shares awarded 12 by ESOP - - 4.5 (4.5) - - - - Own shares purchased by
12 the Company - - (2.8) - - (2.8) - (2.8) At 30 June 2012 (unaudited) 24.5 5.6 (608.5) 967.4 (12.4) 376.6 29.3 405.9 At 1 January 2011 24.4 3.1 (608.7) 986.7 (8.5) 397.0 22.2 419.2 Profit for the period - - - 50.0 - 50.0 5.8 55.8 Other comprehensive income/(losses) - - 7.0 10.7 - 17.7 (0.2) 17.5 Total comprehensive income for the period - - 7.0 60.7 - 67.7 5.6 73.3 Equity 8 dividends - - - (46.2) - (46.2) - (46.2) Non-controlling interest dividends - - - - - - (3.6) (3.6) 13 Non-controlling interest arising on business combinations - - - - (3.9) (3.9) 3.7 (0.2) Issued in respect of share option schemes and other entitlements 0.1 0.7 - - - 0.8 - 0.8 Share-based payments - - - 2.4 - 2.4 - 2.4 Shares awarded 12 by ESOP - - 0.9 (0.9) - - - - At 30 June 2011 (unaudited) 24.5 3.8 (600.8) 1,002.7 (12.4) 417.8 27.9 445.7 At 1 January 2011 24.4 3.1 (608.7) 986.7 (8.5) 397.0 22.2 419.2 Profit for the year - - - 75.7 - 75.7 10.4 86.1 Other comprehensive income/(losses) - - 0.3 (28.7) - (28.4) 0.4 (28.0) Total comprehensive income for the year - - 0.3 47.0 - 47.3 10.8 58.1 Equity 8 dividends - - - (61.5) - (61.5) - (61.5) Non-controlling interest dividends - - - - - - (10.6) (10.6) Non-controlling interest arising on business combinations - - - - (3.9) (3.9) 4.7 0.8 Acquisition of non-controlling interests - - - - - - (0.1) (0.1) Issued in respect of share option schemes and other entitlements 0.1 1.0 - - -
1.1 - 1.1 Share-based payments - - - 5.0 - 5.0 - 5.0 Shares awarded by ESOP - - 3.3 (3.3) - - - - At 31 December 2011 24.5 4.1 (605.1) 973.9 (12.4) 385.0 27.0 412.0
Interim consolidated statement of cash flows
for the six months ended 30 June 2012
Six Six Year months months ended ended ended 31 30 June 30 June December 2012 2011 2011 Unaudited Unaudited AuditedNotes £m £m £m Cash flows from operating activities Reconciliation of profit to operating cash flows Profit for the period 62.1 55.8 86.1 Add back: Taxation 8.0 6.4 15.9 Depreciation 6.5 8.4 14.4 Amortisation of website development costs 1.5 0.3
2.4
Amortisation of intangibles arising on acquisitions 18.4 18.6 37.5 6 Interest income (0.4) (0.5) (1.1) 6 Interest expense 14.6 13.9 28.7 6 Financing income (1.4) (1.3) (3.1)
6 Financing income - other (0.8) (2.0)
(1.2)
6 Financing expense - other 1.7 0.3
0.7
Share of results from joint ventures and associates (after tax) (1.1) (1.7) (2.9) 5 Exceptional items and charges to provisions 0.9 1.4
39.6
Fair value adjustments of contingent 5 considerations - (1.1) (1.9) Other non-cash items 2.5 2.9 5.8 112.5 101.4 220.9 Payments against provisions (6.4) (8.5)
(14.2)
Pension deficit contributions (1.6) (1.6) (3.1) Decrease in inventories 3.1 3.4 1.0 Increase in trade and other receivables (15.5) (31.8)
(23.8)
Increase in trade and other payables 21.8 49.5
22.9
Cash generated from operations 113.9 112.4
203.7
Interest and finance income received 0.5 0.3 1.0 Interest and finance costs paid (13.8) (15.0) (28.8) Taxation paid (15.2) (10.8) (29.9) Dividends received from joint ventures and associates 0.1 0.3 1.3 Net cash flows from operating activities 85.5 87.2 147.3 Cash flows from investing activities Acquisition of interests in subsidiaries, net of 13 cash acquired (37.8) (27.8) (62.4) Purchase of property, plant and equipment and intangible assets (5.5) (9.5) (20.0) Proceeds from sale of businesses, net of cash disposed 9.2 7.8 12.1 Advances to joint ventures and associates (0.4) - - Net cash flows from investing activities (34.5) (29.5) (70.3) Cash flows from financing activities Proceeds from the issuance of ordinary share capital 1.5 0.8 1.1 Investment in own shares - ESOP (2.8) -
-
13 Acquisition of non-controlling interests (0.2) -
(0.1)
8 Dividends paid to shareholders (48.9) (46.2)
(61.5)
Dividends paid to non-controlling interests (6.4) (3.6)
(10.6)
10 Repayment of €53.1m floating rate reset loans (52.2) - - 10 Repayment of £75m floating rate reset bonds - - (94.1) Increase/(decrease) in £300m variable rate 10 multi-currency facility 2016 61.3 (11.2)
68.5
Net cash flows from financing activities (47.7) (60.2) (96.7) Net increase/(decrease) in cash and cash equivalents 3.3 (2.5) (19.7) Net foreign exchange difference (1.6) (1.3) 0.5 Cash and cash equivalents at beginning of period 106.6 125.8
125.8
Cash and cash equivalents at end of period 108.3 122.0
106.6 Cash at bank and in hand 31.3 34.8
28.2 Short-term deposits 77.0 87.2 78.5 Bank overdrafts (included in borrowings) - -
(0.1)
Cash and cash equivalents at end of period 108.3 122.0
106.6
Notes to the interim consolidated financial statements
for the six months ended 30 June 2012
1. General information
UBM plc is a company incorporated in Jersey under the Companies (Jersey) Law1991. The address of the registered office is Ogier House, The Esplanade, St.Helier, JE4 9WG, Jersey. UBM plc is tax resident in the Republic of Ireland. The nature of the Group's operations and its principal activities are detailedin Note 4.The interim condensed consolidated financial statements of the Group for thesix months ended 30 June 2012 were authorised for issue in accordance with aresolution of the directors on 27 July 2012. The interim condensedconsolidated financial statements are unaudited but have been reviewed by the auditors as set out in their report. 2. Basis of preparation
The interim condensed consolidated financial statements for the six months ended 30 June 2012 have been prepared in accordance with IAS 34 'Interim financial reporting' and with the Disclosure and Transparency Rules of the Financial Services Authority.
The interim condensed consolidated financial statements do not constitute theGroup's statutory financial statements. The Group's most recent statutoryfinancial statements, which comprise the Annual Report and Accounts for theyear ended 31 December 2011, were approved by the directors on 28 February 2012and have been filed with the Jersey Registrar of Companies. The auditors havereported on those financial statements and have given an unqualified reportwhich does not contain a statement under Article 113B(3) or Article 113B(6) ofthe Companies (Jersey) Law 1991. These interim condensed consolidatedfinancial statements should be read in conjunction with the Annual Report andAccounts for the year ended 31 December 2011, which were prepared in accordancewith International Financial Reporting Standards ('IFRSs') as issued by theInternational Accounting Standards Board ('IASB').The directors of UBM plc, having made appropriate enquiries, consider thatadequate resources exist for the business to continue in operational existencefor the foreseeable future and that, therefore, it is appropriate to adopt thegoing concern basis in preparing the financial information for the six monthsended 30 June 2012.
3. Accounting policies and estimates
The accounting policies, significant judgments made by management and keysources of estimation adopted in the preparation of the interim condensedconsolidated financial statements are consistent with those applied in thepreparation of the Group's Annual Report and Accounts for the year ended 31December 2011. The following amendments to standards have been adopted from 1January 2012 but have had no impact on the financial position or performance ofthe Group or presentation of the financial statements:
- IFRS 7 'Financial Instruments: Disclosures' (amended) - transfer of financial
assets - IAS 12 'Income Taxes' (amended)4. Segment informationOperating segmentsThe chief operating decision maker ('CODM') for the purpose of IFRS 8 reportingis the executive management team - the Group Chief Executive Officer and theGroup Chief Financial Officer. Consistent with the Annual Report and Accountsfor the year ended 31 December 2011, the Group considers there to be fivereportable operating segments organised around products and services. TheGroup operates in a number of different markets and communities and considersthat presentation of financial results on a products and services basis is themost appropriate way to demonstrate the performance of the Group.
The five reportable operating segments organised around products and services are:
- Events which provide face to face interaction in the form of exhibitions, trade
shows, conferences and other live events;
- PR Newswire which operates in the targeting and distribution of company
information and the evaluation of its impact on targeted audiences;
- Data Services which provide a range of services including data-based workflow
products, intellectual property consultancy and analytical services and sales
lead generation programs;
- Marketing Services - Online which provides website sponsorships and banner
advertising as well as online directory products; and
- Marketing Services - Print which publishes magazines and trade press to
specialist markets.
No operating segments have been aggregated to form the above reportable segments. The Group's management reporting and controlling systems use the accounting policies that are the same as those referred to in Note 3.
Segment measures
The Group measures the performance of its operating segments through a measureof segment profit or loss which is referred to as adjusted operating profit. Adjusted operating profit represents operating profit excluding amortisation ofintangible assets arising on acquisitions, exceptional items and share oftaxation on results of joint ventures and associates. This measure is reportedto the CODM for the purposes of resource allocation and assessment ofperformance and is consistent with the measure used in the Annual Report andAccounts for the year ended 31 December 2011.Finance income/expense and taxation are not included in the adjusted operatingprofit measure which is reviewed by the CODM. Treasury and taxation balancesare managed centrally.
Segment assets and liabilities are not regularly provided to the CODM. The Group has elected, as provided under IFRS 8 'Operating segments' (amended 2009), not to disclose a measure of segment assets or liabilities where these amounts are not regularly provided to the CODM.
Intersegment revenue is recorded at values that represent estimated third-partyselling prices.Six months ended 30 June 2012 Depreciation (including Share of Segment amortisation of pre-tax adjusted website results from operating External Intersegment Total development JVs and profit/ revenue* revenue revenue costs) associates (loss)* £m £m £m £m £m £m Events 233.0 0.1 233.1 (2.6) 0.3 74.8 PR Newswire 100.1 0.4 100.5 (3.4) 0.4 22.3 Data Services 90.0 - 90.0 (1.0) 0.2 13.3 Marketing Services - Online 46.2 - 46.2 (0.5) - (0.1) Marketing Services - Print 39.4 - 39.4 (0.4) - 2.1 Total Marketing Services 85.6 - 85.6 (0.9) - 2.0 Total segments 508.7 0.5 509.2 (7.9) 0.9 112.4 Corporate costs - - - (0.1) 0.5 (10.3) Internal cost recoveries and sundry income - - - - - 1.3 Eliminations - (0.5) (0.5) - - - 508.7 - 508.7 (8.0) 1.4 103.4 Amortisation of intangibles arising on acquisitions (18.4)
Exceptional items relating to
acquisitions (0.9)
Share of taxation on profit in joint ventures and associates
(0.3) Group operating profit 83.8 Interest income 0.4 Interest expense (14.6) Financing income 1.4 Financing income - other 0.8 Financing expense - other (1.7) Profit before tax 70.1
* Following the formation of the business unit UBM Technology, a number ofbusiness activities have been reallocated from the Data Services segment toEvents and Marketing Services - Online. The businesses affected include HDI,SharedVue, Demand Generation and Game Vault, now part of UBM Technology; andICMI, now part of UBM Live. The impact of this realignment is to reducereported Data Services segmental revenue by £5.4m for the six months ended 30June 2012 and increase Events and Marketing Services - Online revenue by £3.4mand £2.0m respectively, for the same period. Events adjusted operating profitis reduced by £0.1m and Marketing Services - Online profit is increased by £0.1m. As this change is not material from a group perspective, prior yearresults have not been restated. This detailed information is provided tofacilitate analysis of year on year performance of the affected segments.Total corporate costs for the period ended 30 June 2012 were £10.8m (periodended 30 June 2011: £10.8m; year ended 31 December 2011: £19.3m) before shareof pre-tax results from joint ventures and associates. The corporate costs areoffset by net gains on disposals and by sundry income which is not attributableto any of the Group's operations.Six months ended 30 June 2011 Depreciation (including Share of Segment amortisation of pre-tax adjusted website results from operating External Intersegment Total development JVs and profit/ revenue revenue revenue costs) associates (loss) £m £m £m £m £m £m Events 177.1 0.1 177.2 (2.4) 0.8 57.7 PR Newswire 95.2 0.1 95.3 (3.2) 0.5 20.1 Data Services 100.2 - 100.2 (1.4) 0.3 17.4 Marketing Services - Online 41.8 - 41.8 (0.6) - 0.7 Marketing Services - Print 59.7 - 59.7 (0.9) - 3.1 Total Marketing Services 101.5 - 101.5 (1.5) - 3.8 Total segments 474.0 0.2 474.2 (8.5) 1.5 99.0 Corporate costs - - - (0.2) 0.6 (10.2) Internal cost recoveries and sundry income - - - - - 3.1 Eliminations - (0.2) (0.2) - - - 474.0 - 474.0 (8.7) 2.1 91.9 Amortisation of intangibles arising on acquisitions (18.6)
Exceptional items relating to
acquisitions (0.3)
Share of taxation on profit in joint ventures and associates
(0.4) Group operating profit 72.6 Interest income 0.5 Interest expense (13.9) Financing income 1.3 Financing income - other 2.0 Financing expense - other (0.3) Profit before tax 62.2 Year ended 31 December 2011 Depreciation (including Share of Segment amortisation of pre-tax adjusted website results from operating External Intersegment Total development JVs and profit/ revenue revenue revenue costs) associates (loss) £m £m £m £m £m £m Events 396.9 0.5 397.4 (5.5) 1.2 135.2 PR Newswire 187.8 0.5 188.3 (5.6) 0.9 41.0 Data Services 187.0 - 187.0 (2.6) 0.6 30.3 Marketing Services - Online 88.5 - 88.5 (1.2) - 3.6 Marketing Services - Print 112.1 - 112.1 (1.6) (0.3) 6.1 Total Marketing Services 200.6 - 200.6 (2.8) (0.3) 9.7 Total segments 972.3 1.0 973.3 (16.5) 2.4 216.2 Corporate costs - - - (0.3) 1.2 (18.1) Internal cost recoveries and sundry income - - - - - 3.8 Eliminations - (1.0) (1.0) - - - 972.3 - 972.3 (16.8) 3.6 201.9 Amortisation of intangibles arising on acquisitions (37.5)
Exceptional items relating to
acquisitions (4.6) Impairment charge (3.7)
Share of taxation on profit in joint ventures and associates
(0.7) Group operating profit 155.4 Interest income 1.1 Interest expense (28.7) Financing income 3.1 Financing income - other 1.2 Financing expense - other (0.7)
Exceptional items relating to
financing income/expense (29.4) Profit before tax 102.0
Revenue by products and services
Revenue from external customers analysed by products and services is given inthe above segment tables. The Group's reportable segments are organised aroundproducts and services provided to external customers. There are no revenuesderived from a single external customer which are significant.
Geographic information
With respect to geographical regions, revenue is generally allocated tocountries based on the location where the products and services are provided. Non-current assets are disclosed according to the location of the businesses towhich the assets relate. Revenues from external customers Six months Six months
Year ended ended ended 30 June 30 June 31 December 2012 2011 2011 £m £m £m United Kingdom 72.7 67.9 122.1 Foreign countries United States and Canada 262.8 243.0 466.8 Europe 61.4 69.4 143.2 China 62.2 53.2 146.0 Emerging markets* 30.9 23.9 61.1 Rest of the world 18.7 16.6 33.1 436.0 406.1 850.2 Total revenue 508.7 474.0 972.3
* Emerging markets constituents are the non-G10 countries - most notably for the Group (after China): Brazil, India, Thailand, Singapore, Indonesia, Malaysia, Philippines, Mexico and UAE.
Non-current assets 30 June 30 June 31 December 2012 2011 2011 £m £m £m United Kingdom 278.2 244.4 286.8 Foreign countries United States and Canada 660.7 658.6 672.8 Europe 209.8 241.2 220.8 China 42.6 34.0 31.7 Emerging markets* 98.8 80.8 90.9 Rest of the world 7.4 6.7 6.9 1,019.3 1,021.3 1,023.1 Total non-current assets 1,297.5 1,265.7 1,309.9
Non-current assets for this purpose consist of goodwill, intangible assets, property, plant and equipment, investments in joint ventures and associates and other investments.
5. Exceptional itemsExceptional items are presented separately as, due to their nature or for theinfrequency of the events giving rise to them, this allows shareholders tounderstand better the elements of financial performance for the year, tofacilitate comparison with prior periods, and to assess better the trends offinancial performance. Six Six Year months months ended ended ended 31 30 June 30 June December 2012 2011 2011 £m £m £m
(Charged)/credited to operating profit
Integration costs - - (3.6)
Acquisition costs on business combinations (0.9) (1.4)
(2.9)
Changes in estimates of contingent consideration - 1.1
1.9
Exceptional items relating to acquisitions (0.9) (0.3)
(4.6)
Impairment of joint ventures and associates - -
(3.1)
Impairment of other investments - -
(0.6) Impairment charge - - (3.7)
Total charged to operating profit (0.9) (0.3)
(8.3) Charged to profit before tax
Re-assessment of amortised cost carrying amount of €53.1m - -
(8.5)
floating rate reset loans (Note 6) Fair value movement on put options over non-controlling
interests (Note 6) (1.0) - (1.8)
Fair value loss on redemption of £75m floating rate reset
bonds (Note 6) - - (19.1)
Total charged to profit before tax - -
(29.4)
Total charged to profit for the period (1.9) (0.3)
(37.7) Year ended 31 December 2011In 2011, the Group made significant progress in the integration of UBM Canon(formerly Canon Communications LLC), acquired in October 2010. The integrationexceptional charge of £3.6m includes £2.0m relating to redundancy and £1.6mrelating to business reorganisation costs.
The carrying value of investments in joint ventures and associates and other investments were impaired by £3.1m and £0.6m respectively.
6. Finance income/(expense) Before Before exceptional Exceptional Total Total exceptional Exceptional Total items items 30 30 items items 31 30 June 30 June June June 31 December 31 December December 2012 2012 2012 2011 2011 2011 2011 £m £m £m £m £m £m £m Interest income Cash and cash equivalents 0.4 - 0.4 0.5 1.1 - 1.1 Interest expense Borrowings and (27.8) (8.5) loans (14.2) - (14.2) (12.7) (36.3) Other (0.4) - (0.4) (1.2) (0.9) - (0.9) Total interest (14.6) - (14.6) (13.9) (28.7) (8.5) (37.2)expense for financial liabilities not classified at fair value through profit or loss Financing income Pension schemes 1.4 - 1.4 1.3 3.1 - 3.1 Financing income - other Foreign exchange - - - - 1.2 - 1.2 gain on forward contracts Ineffectiveness 0.7 - 0.7 0.6 - - - on net investment hedges Fair value 6.1 - 6.1 6.3 - - - movement on interest rate swaps Fair value movement on £250m bond (6.0) - (6.0) (4.9) - - - Ineffectiveness on fair value hedges 0.1 - 0.1 1.4 - - - 0.8 - 0.8 2.0 1.2 - 1.2 Financing expense - other Foreign exchange (0.4) - (0.4) (0.2) - - - loss on forward contracts Fair value - - - - 7.8 - 7.8 movement on interest rate swaps Fair value (8.1) (8.1)movement on £250m bond - - - - - Ineffectiveness (0.3) (0.3)on fair value hedges - - - - - Fair value 2.2 - 2.2 2.0 11.2 - 11.2 movement on interest rate swaps Fair value (11.6) (11.6)movement on $350m bond (2.5) - (2.5) (2.0) - Ineffectiveness (0.4) (0.4)on fair value hedges (0.3) - (0.3) - - Fair value - (1.0) (1.0) - - (1.8) (1.8)movement on put options over non-controlling interests (note 5) Fair value loss - - - - - (19.1) (19.1)on redemption of £75m floating rate reset bonds (Note 5) Other fair value adjustments - - - (0.1) - - - (0.7) (1.0) (1.7) (0.3) (0.7) (20.9) (21.6) Net finance (24.0) (29.4) expense (12.7) (1.0) (13.7) (10.4) (53.4)
The ineffectiveness on fair value hedges represents the difference between thefair value movement of the interest rate swaps designated as hedge instrumentsand the fair value movement of the hedged portions of the £250m fixed ratesterling bonds and the $350m fixed rate dollar bonds (Note 10).
Exceptional items in the six months ended 30 June 2012:
£1.0m relating to the fair value movement on put options over non-controlling interests.
Exceptional items in the year ended 31 December 2011:
- £8.5m relating to the re-assessment of amortised cost carrying amount of the
€53.1m floating rate reset loans that were subsequently redeemed in March 2012,
as detailed in Note 10.
- £1.8m relating to the fair value movement on put options over non-controlling
interests.
- In September 2011, UBM redeemed the £75m floating rate reset bonds. As
provided under their terms, the Group has also paid the fair value of the
options associated with the bonds, totalling £19.1m. This resulting loss has
been included in exceptional financing expense - other.
7. Earnings per share
Basic earnings per share amounts are calculated by dividing the net profit forthe period attributable to owners of the parent entity by the weighted averagenumber of ordinary shares outstanding during the period.Diluted earnings per share amounts are calculated by dividing the net profitattributable to owners of the parent entity by the weighted average number ofordinary shares outstanding during the period (adjusted for the effects ofdilutive options).The Group has one category of dilutive potential ordinary shares: those shareoptions granted to employees where the exercise price is less than the averagemarket price of the Company's ordinary shares during the period. The impact ofdilutive securities in the six months to 30 June 2012 would be to increaseweighted average shares by 4.0 million shares (30 June 2011: 4.8 millionshares; year to 31 December 2011: 4.3 million shares) for employee shareoptions.The weighted average number of ordinary shares for the period was 244,084,308(30 June 2011: 243,366,556; year to 31 December 2011: 243,490,804). Theweighted average number of shares excludes ordinary shares held by the EmployeeShare Ownership Plan ('ESOP') and the Qualifying Employee Share Ownership Trust('QUEST').Adjusted earnings per share is calculated on the net profit for the periodattributable to equity holders of the parent entity before amortisation ofintangible assets arising on acquisitions, deferred tax on amortisation ofintangible assets, exceptional items and net financing income/(expense) -other, divided by the weighted average number of ordinary shares outstandingduring the period. These adjustments are excluded from this calculation, asdue to their nature and the infrequency of the events giving rise to them,separate presentation allows shareholders to understand better the elements offinancial performance for the period, so as to facilitate comparison with priorperiods and to assess better the trends of financial performance.
The following reflects the income and share data used in basic and diluted earnings per share computations:
Six months ended Six months ended Year ended 30 June 2012 30 June 2011 31 December 2011 Earnings Earnings Earnings Earnings per share Earnings per share Earnings per share £m p £m p £m p Adjusted Group operating profit 103.4 91.9 201.9 Net interest expense (14.2) (13.4) (27.6) Financing income 1.4 1.3 3.1
Adjusted profit before tax 90.6 79.8 177.4
Taxation (13.1) (11.8) (26.3)
Non-controlling interests (6.6) (5.8) (10.4)
Adjusted earnings per share 70.9 29.0 62.2 25.6 140.7 57.8 Adjustments
Amortisation of intangible
assets (18.4) (7.5) (18.6) (7.7) (37.5) (15.4) Deferred tax on
amortisation of intangible
assets 4.8 2.0 5.0 2.0 9.7 4.0
Non-tax exceptional items (0.9) (0.4) (0.3) (0.1) (37.7)
(15.5)
Net financing (expense)/
income - other (0.9) (0.4) 1.7 0.7 0.5 0.2
Basic earnings per share 55.5 22.7 50.0 20.5 75.7
31.1 Dilution - Options - (0.3) - (0.4) - (0.5)
Diluted earnings per share 55.5 22.4 50.0 20.1 75.7
30.6 Adjusted earnings per share (as above) 70.9 29.0 62.2 25.6 140.7 57.8 Dilution - Options - (0.4) - (0.5) - (1.0)
Diluted adjusted earnings
per share 70.9 28.6 62.2 25.1 140.7 56.8 8. Dividends Six Six Year months months ended ended ended 31 30 June 30 June December 2012 2011 2011 £m £m £m
Declared and paid during the period Equity dividends on ordinary shares Second interim dividend for 2010 of 19.0p - 46.2
46.2
Interim dividend for 2011 of 6.3p - -
15.3
Second interim dividend for 2011 of 20.0p 48.9 -
- 48.9 46.2 61.5
Proposed (not recognised as a liability at the end
of the period)
Equity dividends on ordinary shares Interim dividend for 2011 of 6.3p - 15.3
-
Second interim dividend for 2011 of 20.0p - -
48.7
Interim dividend for 2012 of 6.7p 16.4 -
- Pursuant to the Dividend Access Plan ('DAP') arrangements put in place as partof the Scheme of Arrangement, shareholders in the Company are able to elect toreceive their dividends from a UK source (the 'DAP election'). Shareholderswho held 50,000 or fewer shares (i) on the date of admission of the Company'sshares to the London Stock Exchange and (ii) in the case of shareholders whodid not own the shares at that time, on the first dividend record date afterthey become shareholders in the Company, unless they elect otherwise, will bedeemed to have elected to receive their dividends under the DAP arrangements. Shareholders who hold more than 50,000 shares and who wish to receive theirdividends from a UK source must make a DAP election. All elections remain inforce indefinitely unless revoked. Unless shareholders have made a DAPelection, or are deemed to have made a DAP election, dividends will be receivedfrom an Irish source and will be taxed accordingly.
9. Property, plant and equipment and intangible assets
Movements during the period in property, plant and equipment and intangibleassets were: Six months Six months Year ended ended ended 30 June 30 June 31 December 2012 2011 2011 £m £m £m
Net book value at 1 January 203.6 218.6
218.6
Acquired with subsidiaries 12.3 6.9
27.1 Additions 5.5 9.5 20.0 Disposals (0.3) (0.3) (0.6) Disposal of subsidiaries (0.1) (7.2) (7.4)
Depreciation and amortisation (26.4) (27.3)
(54.3) Currency translation (3.2) (2.8) 0.2
Net book value at 30 June/31 December 191.4 197.4
203.6 10. Borrowings 30 June 30 June 31 December 2012 2011 2011 £m £m £m Non-current 645.1 481.2 580.1 Current - 123.0 53.0 645.1 604.2 633.1
Movements in borrowings are analysed as follows:
30 30 31 June June December 2012 2011 2011 £m £m £m At 1 January 633.1 610.5 610.5
Increase/(decrease) in £300m variable rate multi-currency
facility 2016 61.3 (11.2) 68.5 Decrease in overdraft (0.1) (0.1) -
Repayment and amortisation of €53.1m floating rate reset
loans 2012 (52.2) - 8.5
Repayment of £75m floating rate reset bonds - -
(75.0)
Amortisation and fair value adjustments on £250m fixed rate sterling bonds 2016 6.2 5.0
8.4
Amortisation and fair value adjustments on $350m fixed rate
dollar bonds 2020 2.7 2.1 11.6 Currency translation (5.9) (2.1) 0.6 At 30 June/31 December 645.1 604.2 633.1
The undrawn portion of all facilities at 30 June 2012 is £153.7m (30 June 2011: £290.0m; 31 December 2011: £212.2m).
In March 2012, as provided in the terms, the Group redeemed the €53.1m floating rate reset loans by paying the fair value of the instruments on that date, €62.6m (£52.2m).
£150m of the fixed rate sterling bonds and $150m of the fixed rate dollar bondsare subject to a fair value hedges with interest rate swaps. Under these swapsthe Group receives 6.50% and 5.75% respectively to match the bond coupons andpays six month LIBOR plus 2.90% and six month US LIBOR plus an average of 2.63%respectively. The interest rate swaps are used to increase the Group'sexposure to interest rates to maintain a balance of fixed and floating interestrate cost. The fair value movement on the bonds are partially offset againstthe fair value movement of the swaps and the ineffective elements arerecognised in the income statement within 'Financing income - other' as'Ineffectiveness on fair value hedges' (Note 6). 11. Share capital 30 30 31 June June December 2012 2011 2011 Authorised £m £m £m
1,217,124,740 (30 June 2011: 1,217,124,740; 31 December 2011 1,217,124,740) ordinary shares of 10p each 121.7 121.7
121.7 Ordinary Ordinary Shares shares Issued and fully paid Number £m At 1 January 2011 244,553,606 24.4
Issued in respect of share option schemes and other
entitlements 159,971 0.1 At 30 June 2011 244,713,577 24.5
Issued in respect of share option schemes and other
entitlements 65,458 - At 31 December 2011 244,779,035 24.5
Issued in respect of share option schemes and other
entitlements 407,057 - At 30 June 2012 245,186,092 24.5 Company share schemesAs at 30 June 2012, the holdings of the ESOP Trust are 640,987 ordinary shares(30 June 2011: 1,216,263 ordinary shares; 31 December 2011: 1,056,056 ordinaryshares).12. Other reserves Merger Foreign currency ESOP Other Total other reserve translation reserve reserve reserve reserves £m £m £m £m £m At 1 January 2012 (732.2) 7.3 (5.5) 125.3 (605.1) Total comprehensive income for the period* - (5.1) - - (5.1) Shares awarded by ESOP - - 4.5 - 4.5 Own shares purchased by
the Company - - (2.8) - (2.8) At 30 June 2012 (732.2) 2.2 (3.8) 125.3 (608.5) * The amount included in the foreign currency translation reserve for theperiod ended 30 June 2012 represents the currency translation difference onforeign operations on Group subsidiaries of £(15.5)m (excludes £(0.4)m relatingto non-controlling interests), on net investment hedges of £10.2m and on jointventures and associates of £0.2m.
Merger reserve
The merger reserve is used to record entries in relation to certainreorganisations that took place in previous accounting periods. The majorityof the balance on the reserve relates to the capital reorganisation that tookplace in 2008 which created a new holding company which is UK-listed,incorporated in Jersey and with its tax residence in the Republic of Ireland.
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differencesarising from the translation of the financial statements of foreignsubsidiaries. It is also used to record the effect of hedging net investmentsof foreign operations. ESOP reserve
The ESOP reserve records ordinary shares held by the ESOP to satisfy future share awards. The shares are recorded at cost. In the six months ended 30 June 2012, 450,000 ordinary shares were purchased by the ESOP (six months ended 30 June 2011: nil; year ended 31 December 2011: nil).
Other reserve
This reserve includes the unrealised gains and losses reserve which records theportion of the gain or loss on a hedging instrument in a cash flow hedge thatis determined to be an effective hedge.
13. Acquisitions
The Group has completed seven acquisitions and one equity transaction in thesix months ended 30 June 2012. The following table sets out the fair value ofthe identifiable assets and liabilities acquired in respect of the acquisitionof businesses (excluding equity transactions) during the period: 30 June 2012 £m Intangible assets 12.3 Property, plant and equipment - Cash and cash equivalents 0.2 Trade and other receivables 3.2 15.7 Trade and other payables (6.0) Deferred tax liability (2.9) (8.9) Identifiable net assets 6.8
Goodwill arising on acquisition
23.0
Net changes in estimates of pre 1 January 2010 contingent consideration
(1.0) Non-controlling interests (3.2) 25.6 Trade and other receivables acquired have been recognised at fair value whichequates to the gross contractual amounts receivable. All amounts recognisedare expected to be collected.
The total consideration paid and payable after working capital adjustments on acquisitions (excluding equity transactions) is shown below:
30 June 2012 £m Consideration:
Cash paid to acquire subsidiaries
21.8
Contingent consideration on acquisitions
3.4
Deferred consideration on acquisitions
1.4
Contingent consideration adjustments on pre 1 January 2010 acquisitions
(1.0)
Total consideration transferred
25.6
The Group has acquired 100% of the voting rights in all cases whereacquisitions involved the purchase of companies unless otherwise stated below. All acquisitions listed above where less than 100% of the voting rights of acompany were purchased have been accounted for using the full goodwill method,as provided by IFRS 3 (revised 2008). As none of these companies are listed,no market information is available about the fair value of the non-controllinginterest. Therefore, the fair value of the non-controlling interest for eachacquisition has been estimated using a multiples approach with adjustments forthe lack of control or marketability to reflect assumptions that marketparticipants would make when estimating the fair value of the non-controllinginterest.
Acquisition costs of £0.9m (30 June 2011: £1.4m; 31 December 2011: £2.9m) have been expensed as exceptional items in the income statement (Note 5) and are included in operating cash flows in the statement of cash flows.
Events acquisitions
On 1 February 2012, the Group acquired the annual 4G World telecoms and wireless trade show for consideration of $4.0m (£2.6m). The acquisition expands the Group's offering in the growing mobile broadband market, in line with the Group's strategy.
On 14 February 2012, the Group completed the acquisition of a 75% equity interest in Insight Media Limited, which owns the Airport Cities World Exhibition & Conference ('ACE'), for consideration of £1.7m. Together with its existing 25% stake in the company, the Group now owns 100% of the business.
ACE is an annual event which focuses on airport commercial activities and landuse, the development of Airport Cities and the associated urban planningissues. ACE supports the strategy to establish a leadership position withinthe airport infrastructure development sector.On 20 February 2012, the Group acquired the Malaysian International FurnitureFair ('MIFF'), an annual export-oriented furniture tradeshow, for considerationof MYR47.0m (£9.9m). The acquisition enhances the Group's position in thefurniture exhibition market, complementing Furniture China in Shanghai, theIndex Fairs in India and Interiors in the UK.On 22 March 2012, the Group acquired a 70% equity interest in Shanghai UBMShowStar Exhibition Co. Limited, a newly formed company which owns DenTechChina, China's leading dental industry exhibition, for initial consideration ofRMB40.0m (£4.0m) and further performance-related consideration of up toRMB34.0m (£3.4m) payable over the next three years. The fifteenth edition ofDenTech was held in October 2011 in Shanghai. The transaction is in line withthe Group's strategy to acquire established events in growing economies.On 12 April 2012, the Group acquired Negocios Nos Trilhos Participa§µes Ltda('NT Expo'), South America's leading railway industry exhibition, forconsideration of R$20.1m (£6.7m). Now in its fifteenth edition, thewell-established event complements the Group's existing events in the transportsector.Data Services acquisitions
On 1 May 2012, the Group acquired:
- the Bench$mart price benchmarking service and associated businesses for
consideration of $0.3m (£0.2m) and further performance-related consideration of
up to $0.1m (£0.1m) payable over the next year; and
- Official Board Markets ('OBM'), a North American paid-subscription price index,
for consideration of $1.0m (£0.6m).
Both acquisitions will accelerate the Group's expansion in the recovered paper market, allowing the augmentation of existing products and provision of new ones.
Equity transactionsOn 23 January 2012, the Group acquired the remaining 21% minority shareholdingof RISI Inc. for an initial consideration of $0.4m (£0.2m) and a furtherperformance related consideration of up to $6.8m (£4.3m) payable over the nextfour years. This equity purchase brings the Group's total shareholding in RISIInc. to 100%. As the Group already had control of RISI Inc. before thistransaction, the acquisition is accounted for as an equity transaction inaccordance with IAS 27 'Consolidated and separate financial statements'. 30 June 2012 £m Cash paid 0.2 Contingent consideration 1.3
Carrying amount of non-controlling interest at acquisition date
(0.7) Recognised in equity 0.8 Goodwill
The goodwill of £23.0m recognised on acquisitions in the period relates tointangible assets that cannot be individually separated. These include suchitems as customer loyalty, market share, skilled workforce and synergiesexpected to arise after the acquisition completion. Of the goodwill arising,an amount of £2.3m is expected to be deductible for tax purposes. The movementin goodwill during the period was: Six months ended 30 June 2012 £m Cost At 1 January 2012 1,238.8 Acquisitions 23.0
Contingent consideration adjustments on pre 1 January 2010 acquisitions
(1.0) Disposals (9.6) Currency translation (18.4) At 30 June 2012 1,232.8 Impairment At 1 January 2012 150.8 Currency translation (3.0) At 30 June 2012 147.8 Carrying value At 1 January 2012 1,088.8 At 30 June 2012 1,085.0
Contingent and deferred consideration
The potential undiscounted amount for all future payments that the Group couldbe required to make under the contingent consideration arrangements for 2012acquisitions is between nil and £3.5m being the aggregate of the maximumamounts disclosed on the previous page for each acquisition. The fair value ofcontingent consideration of £3.4m included in the total consideration has beendetermined by reference to the projected financial performance in relation tothe specific contingent consideration criteria for each acquisition, based onthe terms set out in the relevant purchase agreements. The maximum remaining payments that the Group could be required to make undercontingent consideration arrangements for acquisitions made in 2011 and 2010 is£25.0m and £46.0m respectively. The movement in the contingent and deferred consideration payable during theperiod was: Contingent Deferred consideration consideration Total £m £m £m At 1 January 2012 37.3 5.7 43.0 Acquisitions 3.4 1.4 4.8 Equity transactions 1.3 - 1.3 Consideration paid (15.0) (1.2) (16.2)
Changes in estimates (goodwill) (1.0) -
(1.0)
Changes in estimates (income statement) - -
- Currency translation (0.5) (0.1) (0.6) At 30 June 2012 25.5 5.8 31.3 Acquisition performance From their respective dates of acquisition to 30 June 2012, the acquisitionsmade in the period have contributed £1.7m to operating profit and £4.8m torevenue of the Group. If the acquisitions had taken place at the beginning ofthe period, they would have contributed £1.7m to operating profit and £4.9m torevenue of the Group for the six months ended 30 June 2012.
Cash flow effect of acquisitions
The aggregate cash flow effect of the acquisitions was as follows:
30 June 2012 £m
Net cash acquired with subsidiaries
(0.2)
Cash paid to acquire subsidiaries
21.8
Net cash outflow on 2012 acquisitions
21.6
Payment of contingent consideration on prior year acquisitions
15.0
Payment of deferred consideration on prior year acquisitions
1.2
Total cash outflow on acquisitions
37.8
None of the contingent or deferred consideration payments are individually material.
14. DisposalsOn 9 January 2012, the Group and Roularta Media Group ('Roularta') eachcontributed their Belgium medical print activities to their 50:50 jointventure, ActuaMedica. ActuaMedica will be the market leading provider ofmedia-based marketing services for Belgian healthcare professionals. A profitof £0.4m arose on the transfer, representing the portion of the gain which isattributable to the interest held by Roularta.On 19 March 2012, the Group disposed of its UK agriculture and medical generalpractitioner portfolios - including the Farmers Guardian and Pulse titles - fortotal cash consideration of £10.0m, subject to working capital adjustments. Aprofit of £1.5m was recognised on disposal, including directly attributablecosts.On 30 March 2012, the Group completed the sale of CME LLC, owner of the PsychCongress title, for consideration of $2.0m (£1.3m), subject to working capitaladjustments. A loss of £0.5m was recognised on disposal, including directlyattributable costs.
The aggregate net cash inflow on disposals is £9.2m net of cash disposed of £ 1.8m and working capital adjustments of £(0.3)m.
15. Retirement benefit obligations
The Group operates a number of defined benefit and defined contribution pensionschemes in the UK and overseas. The most recent actuarial valuations werecarried out during 2011 and updated to 30 June 2012 by independent qualifiedactuaries using the projected unit method.
The amounts recognised in the income statement were as follows:
Six months Six months Year ended ended ended 30 June 30 June 31 December 2012 2011 2011 £m £m £m Current service cost 0.3 0.4 0.6 Curtailments - (1.8) (1.8) Interest cost 11.1 12.9 25.5
Expected return on plan assets (12.5) (14.2) (28.6)
Total pension credit (1.1) (2.7) (4.3)
The curtailment in 2011 relates to the sale of the French medical newspaper and magazine business, detailed in the Annual Report and Accounts for the year ended 31 December 2011.
The amounts recognised in the balance sheet were as follows:
30 June 30 June 31 December 2012 2011 2011 £m £m £m Fair value of plan assets 475.2 470.9 463.4
Present value of defined benefit obligations (508.2) (459.9)
(489.0)
Irrecoverable element of pension surplus (5.2) (7.9)
(5.9)
Net (deficit)/surplus in the balance sheet (38.2) 3.1
(31.5) Retirement benefit surplus 9.7 14.8 10.9 Retirement benefit obligation (47.9) (11.7) (42.4)
Net (deficit)/surplus in the balance sheet (38.2) 3.1
(31.5) 16. Share-based paymentsThe Group's management awards share options to directors and employees, fromtime to time, on a discretionary basis. During the six months ended 30 June2012, the Group awarded 3,696,274 (six months ended 30 June 2011: 3,572,434;year ended 31 December 2011: 3,856,286) shares under the Group's shareincentive plans.
17. Commitments and contingencies
Capital expenditure contracted for but not provided in the financial statements amounts to £2.5m (30 June 2011: £0.2m; 31 December 2011: £1.6m).
18. Related party transactions
Transactions with related parties are made at arm's length. Outstandingbalances at the end of the period are unsecured and settlement occurs in cash. There are no bad debt provisions for related party balances as at 30 June 2012,and no related party transactions have been written off during the period. Unless otherwise stated above, there are no amounts owed by or due to relatedparties by the Group at 30 June 2012.The Group entered into the following transactions with related parties duringthe period: Balances Balances (owed (owed by)/ by)/ Balances due to due to (owed by)/ the the due to the Group at Value of Group at Value of Group at Value of 30 June transactions 30 June transactions 31December transactions Related
party and Nature of 2012 H1 2012 2011 H1 2011 2011 FY 2011 relationship transactions £m
£m £m £m £m £m eXalt Sub-lease -* -* - - - - Solutions Inc - Associate GML Advances 0.4 0.4 0.2 - - - Exhibitions (Thailand) Co Limited - Joint Venture
Guangzhou Commission 0.2 - 0.1 - 0.1 - Beauty Fair and - Joint management
Venture fees PA Group Newswire -* (0.3) - (0.3) - (0.6)Limited - service Associate
Shanghai IT services -* 0.1 -* -*
-* -* Tekview IC Analysis Technology Co Ltd - Investment
* Transactions and balances (owed by)/due to the Group less than £0.1m.
In the six months ended 30 June 2012, the Group and Roularta Media Group ('Roularta') each contributed their Belgium medical print activities to their 50:50 joint venture, ActuaMedica as detailed in Note 14.
In the six months ended 30 June 2011, the Group also disposed of Canon Communications Asia Pte. Limited and Beijing Reed Advertising Services Co., Limited to eMedia Asia Limited, one of the Group's joint ventures, as detailed in the Annual Report and Accounts for the year ended 31 December 2011.
In the year ended 31 December 2011, the Group provided services to EuromoneyInstitutional Investor Plc, an international publishing, events and electronicinformation group, for fees of £3,916. There were no transactions in theperiod ended 30 June 2012 or 30 June 2011. John Botts, Chairman of the Groupuntil 11 May 2012, is a Director of Euromoney Institutional Investor Plc.During the period, the Group has provided services to Microland, an ITinfrastructure management outsourcing services provider, for fees of £1,314(period ended 30 June 2011 and year ended 31 December 2011: £4,649). At 30June 2012, the Group had a trade receivable with Microland of nil (30 June2011: £1,001; 31 December 2011: nil). Pradeep Kar, a Non-Executive Director ofthe Group, is Founder, Chairman and Managing Director of Microland.Computacenter plc, a provider of IT infrastructure services, provided servicesto the Group during the period for fees of £13,506 (period ended 30 June 2011:£19,000; year ended 31 December 2011: £22,000). At 30 June 2011, the Group hada trade payable with Computacenter plc of nil (30 June 2011: £5,000; 31December 2011: nil). Greg Lock, a Non-Executive Director of the Group, is theChairman of Computacenter plc.During the period, the Group provided services to Kofax plc, a businesssolutions provider, for fees of nil (period ended 30 June 2011: £1,867; yearended 31 December 2011: £12,000). Greg Lock is the Non-Executive Chairman ofthe Board and Chairman of the Nomination Committee of Kofax plc.The Swets group of companies, information service providers, provided servicesto the Group during the year ended 31 December 2011 for fees of £13,719. Alsoduring the year ended 31 December 2011, the Group provided services to Swetsfor fees of £11,930. There were no transactions in the period ended 30 June2012 or 30 June 2011. At 30 June 2012 the Group had a trade receivable withSwets of nil (30 June 2011: nil; 31 December 2011: £9,420). Jonathan Newcomb,a non-executive director of the Group, is chairman of the Swets board.
19. Events after the balance sheet date
On 12 July 2012, the Group acquired the WineExpo tradeshow for consideration of RMB 5.8m (£0.6m). The transaction is in line with the group's strategy to acquire established events in growing markets.
On 27 July 2012 the Group announced that it is reviewing strategic options forthe Data Services businesses in the context of investment opportunities acrossthe group.
Statement of directors' responsibilities
The directors confirm that the interim condensed consolidated financialstatements for the period ended 30 June 2012 have been prepared in accordancewith IAS 34 as issued by the International Accounting Standards Board, and thatthe interim management report herein includes a fair review of the informationrequired by Rules 4.2.7 and 4.2.8 of the Disclosure and Transparency Rules ofthe United Kingdom Financial Services Authority.
The directors of UBM plc are listed in the Annual Report and Accounts for the year ended 31 December 2011 and on the UBM plc website: www.ubm.com.
By order of the BoardRobert GrayChief Financial Officer27 July 2012
Independent review report to UBM plc
Introduction
We have been engaged by the Company to review the condensed set of financialstatements in the half-yearly financial report for the six months ended 30 June2012 which comprises the Interim consolidated income statement, theConsolidated income statement, the Interim consolidated statement ofcomprehensive income, the Interim consolidated statement of financial position,the Interim consolidated statement of changes in equity, the Interimconsolidated statement of cash flows and the related explanatory notes 1 to 19that have been reviewed. We have read the other information contained in thehalf-yearly financial report and considered whether it contains any apparentmisstatements or material inconsistencies with the information in the condensedset of financial statements.This report is made solely to the Company in accordance with guidance containedin International Standard on Review Engagements 2410 (UK and Ireland) "Reviewof Interim Financial Information Performed by the Independent Auditor of theEntity" issued by the Auditing Practices Board. To the fullest extentpermitted by law, we do not accept or assume responsibility to anyone otherthan the company, for our work, for this report, or for the conclusions we
haveformed.Directors' ResponsibilitiesThe half-yearly financial report is the responsibility of, and has beenapproved by, the directors. The directors are responsible for preparing thehalf-yearly financial report in accordance with the Disclosure and TransparencyRules of the United Kingdom's Financial Services Authority.
As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting".
Our ResponsibilityOur responsibility is to express to the Company a conclusion on the condensedset of financial statements in the half-yearly financial report based on ourreview.Scope of Review
We conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410, "Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity" issued by the AuditingPractices Board for use in the United Kingdom. A review of interim financialinformation consists of making enquiries, primarily of persons responsible forfinancial and accounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an audit conducted inaccordance with International Standards on Auditing (UK and Ireland) andconsequently does not enable us to obtain assurance that we would become awareof all significant matters that might be identified in an audit. Accordingly,we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us tobelieve that the condensed set of financial statements in the half-yearlyfinancial report for the six months ended 30 June 2012 is not prepared, in allmaterial respects, in accordance with International Accounting Standard 34 andthe Disclosure and Transparency Rules of the United Kingdom's FinancialServices Authority.Ernst & Young LLPLondon27 July 2012
XLONRelated Shares:
UBM