Interim Results

Embargoed until 7am 1 August 2014 Solid performance - on track for the full year Results for the six months ended 30 June 2014 Financial Summary H1 2014 H1 2013(1) Change Change Underlying* £m £m % at CC % Change % Revenue 361.0 391.8 -7.9 0.3 2.0 Adjusted operating profit* 87.4 80.4 8.7 21.0 Statutory operating profit 95.0 53.5 77.6 Adjusted diluted EPS* (pence) 24.0p 21.4p 12.1 Statutory diluted EPS (pence) 28.2p 12.6p 123.8 Dividend per share (pence) 6.8p 6.7p 1.5 * Reported revenue of £361.0m (H1 2013: £391.8m), down 7.9% reflecting a strong currency headwind; broadly flat at constant currency (0.3%), with solid underlying growth of 2.0% * Adjusted operating profit up 8.7% to £87.4m (H1 2013: £80.4m), margins up by 3.7%pts, driven largely by non-recurring gains of £11.0m * Events underlying revenue growth of 4.8%(2), led by Emerging Markets with operating margins up 0.4%pts to 28.8% (H1 2013: 28.4%) * Other Marketing Services adjusted operating profit up to £4.4m (H1 2013: £3.6m) on reduced revenue of £48.5m (H1 2013: £66.4m) * PR Newswire revenue up 2.6% (underlying) at £98.3m (H1 2013: £105.0m) at an operating margin of 22.8% (H1 2013: 22.4%) * Adjusted diluted EPS up 12.1% to 24.0p (H1 2013: 21.4p) * Interim dividend of 6.8p (H1 2013: 6.7p) up 1.5%, in line with policy * Net Debt up at £452.1m (2013: £443.4m); Net Debt/EBITDA steady at 2.2x (2013: 2.2x) Tim Cobbold, Chief Executive Officer, commented: "UBM has had a solid first half and remains on track to meet expectations forthe full year." "Although the reported performance was adversely impacted by currencyheadwinds, the Group performed well with good underlying revenue growth in boththe Events and PR Newswire businesses and with higher operating margins in eachof the three businesses." "During my first three months as UBM's CEO I completed the first stage of myreview of the business. We will host a Capital Markets Day late in the year topresent the plan for UBM's future development." 1. Figures for 2013 reflect Continuing operations unless otherwise stated 2. Adjusted for product discontinuations, H1 revenue growth was 7.1% * UBM uses a range of business performance indicators. All non-IFRS measuresare noted with a * throughout this results announcement; additional informationon these measures is set out on page 13 IFRS Statutory results H1 2014 H1 2013(1) Change £m £m % Revenue 361.0 391.8 -7.9 Operating profit 95.0 53.5 77.6 Profit after tax 75.8 36.7 106.5 Attributable profit 69.9 51.7 35.2 Basic EPS (pence) 28.5p 12.8p 122.7 Basic EPS (pence) on profit for the 28.5p 21.1p 35.1period Weighted av. no. of shares (millions) 245.5 244.5 Segmental Summary H1 2014 H1 2013 Change Change Underlying* £m (1) % at CC % Change % £m Revenue Events 214.2 220.4 -2.8 5.8 4.8(2) Other Marketing Services 48.5 66.4 -27.0 -21.5 -9.4 PR Newswire 98.3 105.0 -6.4 2.6 2.6 Total Revenue 361.0 391.8 -7.9 0.3 2.0 Adjusted Operating Profit* Events 61.6 62.7 -1.8 8.6 Other Marketing Services 4.4 3.6 22.2 25.7 PR Newswire 22.4 23.5 -4.7 5.3 Net Corporate Costs (1.0) (9.4) 89.4 89.9 Total Adjusted Operating 87.4 80.4 8.7 21.0Profit* Adjusted Operating ProfitMargin* Events 28.8% 28.4% 0.4pt 0.8pt Other Marketing Services 9.1% 5.4% 3.7pt 3.5pt PR Newswire 22.8% 22.4% 0.4pt 0.6pt Total Adjusted Operating 24.2% 20.5% 3.7pt 4.1ptProfit Margin* Contacts Media Peter Bancroft Director of [email protected] +44(0) 207 921 5961 Communications Angharad Couch Citigate Dewe [email protected] +44(0) 207 282 2941 Rogerson Investor Relations Chantal IR Manager [email protected] +44(0) 207 921 5943Bradford UBM will host a presentation to analysts at 9am at the London Stock Exchange,10 Paternoster Square, EC4M 7LS. A live webcast of the results presentationwill be made available from UBM's website. To access the webcast please go towww.ubm.com. A recording of the webcast will also be available on demand fromUBM's website after 4pm. Notes to Editors UBM plc is a leading global events-led marketing services and communicationscompany. We help businesses do business, bringing the world's buyers andsellers together at events, online and in print. Our 5,000 staff in more than20 countries are organised into specialist teams which serve commercial andprofessional communities, helping them to do business and their markets to workeffectively and efficiently. For more information, go to www.ubm.com; for UBM corporate news, follow us onTwitter at @UBM_plc and go to http://media.ubm.com/social for more UBM socialmedia options. SUMMARY STATEMENT The financial results for the first half of 2014 reflect good progress for UBM,with underlying growth in our key Events and PR Newswire businesses and higheroperating margins across all three segments. In the half we made twoacquisitions of Events businesses and three small disposals in Other MarketingServices. Reported revenue in H1 2014 was £361.0m, 7.9% lower than in H1 2013 (2013: £391.8m) reflecting a foreign exchange headwind which had an adverse impact onrevenues of £31.7m. On a constant currency basis revenue was up 0.3%. Underlying revenue growth was2.0%, with underlying growth in the Events segment of 4.8% and of 2.6% at PRNewswire. Other Marketing Services revenue declined 9.4% on an underlyingbasis. Adjusted operating profit for H1 2014 was 8.7% higher at £87.4m (H1 2013: £80.4m), reflecting improved operating profit margin for each segment, as wellas non-recurring gains totalling £11.0m. These gains were made up of gains ondisposals and on a pension settlement which has been included in CorporateOperations. Improvements in segmental operating profit margin reflected goodperformance for Events, particularly at our large shows in Emerging Market, aswell as in our restructured Other Marketing Services activities. Marginincreased by 3.7%pts to 24.2% (H1 2013: 20.5%). Free cash flow (after capital expenditure, and before discretionaryinvestment), was lower at £55.1m (2013: £69.8m) because of a lower inflow ofworking capital in a down biennial year as well as an adjustment for non-cashoperating gains. Investment in acquisitions totalled £18.3m. We also receivedproceeds of £4.0m from business disposals. Following this investment and thepayment of the 2013 final dividend, net debt at 30 June 2014 was £452.1m,representing 2.2 times LTM EBITDA. Cash conversion was 101.8% (H1 2013:110.9%). Interim dividend The Board has declared an interim dividend of 6.8 pence per share (H1 2013: 6.7pence) in accordance with its policy of paying an interim dividend equal to onethird of the prior year's final dividend. The interim dividend on ordinaryshares will be paid on 9 October 2014 to Shareholders on record on 22 August2014. EVENTS H1 2014 H1 2013(1) Change Change Underlying* £m £m % at CC % Change(3)% Revenue Annual Events Revenue 201.8 212.4 -5.0 3.4 4.8 Biennial Events Revenue 12.4 8.0 55.0 70.1 1.7 Total Events Revenue 214.2 220.4 -2.8 5.8 Adjusted Operating Profit* 61.6 62.7 -1.8 8.6 Total Adjusted Operating Profit 28.8% 28.4% 0.4%ptMargin* 3. Biennial underlying growth computed as CAGR over prior editions H1 reported revenues declined 2.8% to £214.2m (H1 2013: £220.4m) largelyreflecting a foreign exchange headwind. Annual Events revenue was down 5.0% to £201.8m (H1 2013: £212.4m) due to astrong currency headwind; on an underlying basis growth was 4.8%. Annual stand revenues decreased 2.2% to £148.8m (H1 2013: £152.2m), sponsorshipand other revenues decreased 10.1% to £33.7m (H1 2013: £37.5m) and attendeerevenues decreased to £19.3m (H1 2013: £22.7m). Net square metres of annualevents increased to 797,000 (H1 2013: 775,000) while visitor numbers increasedby 16% to 1.5m (H1 2013: 1.3m). Twelve of our Top 20 shows (ranked by 2013 revenue) ran in H1, accounting foraround 45% of this period's annual event revenue. We saw very strong growthfrom events in China such as Sign China, Hotelex Shanghai and the JuneJewellery & Gem Fair. There was also good growth at US shows such as GameDevelopers Conference ("GDC") and Cruise Shipping. This, along with a goodperformance from IFSEC, more than offset the decline in Ecobuild. We hosted 23biennial events during the first half which contributed £12.4m of revenue (H12013: 18 events, £8.0m). We launched 10 new geo-adaptations and six new launches during the first half(including events in Turkey, Mexico and Indonesia). These events contributed £5.6m and £1.5m to underlying revenue growth respectively. We also discontinueda number of events which had generated revenues of £6.5m in H1 2013. Adjustedto exclude these discontinued products, underlying revenue growth was 7.1%. H1 2014 H1 2013 Change Change Underlying* £m (1) % at CC % Change % £m Emerging Markets 83.6 79.9 4.6 18.3 15.5 N. America 65.7 75.1 -12.5 -4.3 -0.7 UK 32.9 36.4 -9.6 -9.5 -5.0 Continental Europe 13.8 15.2 -9.2 -4.4 -2.1 RoW 5.8 5.8 0.0 12.8 12.8 Annual Events Revenue 201.8 212.4 -5.0 3.4 4.8 The geographic mix of our events portfolio continued to shift towards EmergingMarkets where we saw 15.5% underlying revenue growth. Emerging Marketsaccounted for 41.4% of annual Events revenue in the first half. Events in Chinaaccounted for 29.0% of annual Events (Mainland 19.2%, Hong Kong 9.8%).Underlying revenue growth in China was 15.3%. In addition to strongperformances from the Chinese shows which feature in our Top 20, TurkeyJewellery & Gem Fair also performed well. North America Events revenue decreased by 0.7% on an underlying basis. Goodgrowth in Top 20 shows (including Cruise Shipping and Game DeveloperConference) and growth in other shows (such as Enterprise Connect) was offsetby declines in smaller events and cancellations (notably of lower margin singlesponsor custom events) reflecting continued tail management. In the UK, growth in the second quarter, including a strong performance fromIFSEC and modest growth from Interiors Birmingham, was not enough to offset thedeclines in shows which ran in the first quarter, notably Ecobuild and otherevents related to the Built Environment. In Continental Europe, the revenuedecline was due principally to the discontinuation of ATC Global (which will bere-launched in China later in the year), as well as the soft performance of anumber of events serving the healthcare sector. Adjusted operating profit was £61.6m (H1 2013: £62.7m); operating margin was28.8% (H1 2013: 28.4%). Margin growth in H1 2014 was driven by large EmergingMarket shows; contribution from even year H1 biennials was offset by continuedinvestments in new market expansion, GEM initiatives and continued investmentin health and safety. OUTLOOK: We continue to expect full year underlying revenue growth in 2014broadly in line with 2013, and operating profit margin in the range of 30%.Forward bookings for our 2013 Top 20 events were up 7.5% over last year inconstant currency terms. As at 30 June 2014 Events deferred revenue was £190.5m, up 4.2% over 31 December 2013. OTHER MARKETING SERVICES H1 H1 2013 Change Change Underlying* 2014 (1) % at CC % Change % £m £m Other Marketing Services - 36.5 48.2 -24.3 -18.8 -5.5Online Other Marketing Services - 12.0 18.2 -34.1 -28.5 -19.1Print Total Other Marketing Services 48.5 66.4 -27.0 -21.5 -9.4Revenue Adjusted Operating Profit* 4.4 3.6 22.2 25.7 Total Adjusted Operating Profit 9.1% 5.4% 3.7%ptMargin* Other Marketing Services revenue was down 27.0% to £48.5m (H1 2013: £66.4m),principally reflecting management actions to focus the business on sustainableonline and print marketing services closely aligned with Events, and to improveprofitability. Adjusting for activities disposed of or discontinued throughrestructuring, the underlying revenue decline was 9.4%. Online revenuesdeclined 5.5% on an underlying basis. Half year adjusted operating profit was £4.4m (H1 2013: £3.6m), representing a9.1% margin (H1 2013: 5.4%). OUTLOOK: We expect FY revenue in the range of £90 -100m and operating margin of10% for Other Marketing Services. PR NEWSWIRE H1 2014 H1 2013 Change Change Underlying* £m (1) % at CC % Change % £m Revenue US Distribution 46.6 49.9 -6.6 2.2 2.2 US Other 9.7 9.8 -1.0 8.3 8.3 US Vintage 12.5 13.5 -7.4 1.7 1.7 CNW 14.1 16.3 -13.5 1.3 1.3 Europe 10.4 10.4 0.0 0.0 0.0 Asia & LatAm 5.0 5.1 -2.0 8.0 8.0 Total PR Newswire Revenue 98.3 105.0 -6.4 2.6 2.6 Adjusted Operating Profit* 22.4 23.5 -4.7 5.3 Total Adjusted Operating Profit 22.8% 22.4% 0.4%ptMargin* Reported PR Newswire revenue declined by 6.4% in H1 2014 to £98.3m (H1 2013: £105.0m). Revenue was up 2.6% on an underlying basis. US Distribution underlying revenue growth was 2.2%, reflecting continued slowgrowth in the text press release market, increased cross-selling ofattractively priced multimedia features, and the continued shift to revenuesunder contract, as well as very strong growth in iReach, our non-premiumdistribution product. US Other revenue grew 8.3% on an underlying basis, principally reflectingprogress in MediaVantage, our proprietary monitoring product, and growth inwebcast and digital content hosting services. US Vintage underlying revenue growth was 1.7%, as growth in EDGAR filingservices was partially offset by softness in XBRL revenue reflectingcompetitive market conditions. CNW underlying revenue growth was 1.3% as modest distribution revenue growthwas partly offset by softness in sales of MediaVantage monitoring product.There has been continued success in shifting customer relationships to longterm contracts. 30.5% of CNW distribution revenue was generated under contract,up from 21.4% in the prior year. Europe business growth was flat with progress in the UK and continued expansionin India offset by softness in France and the Nordic countries. For Asia and Latin America underlying growth was 8.0%, led by China domesticdistribution revenue, and distribution revenue growth in Mexico. Half year adjusted operating profit was £22.4m (H1 2013: £23.5m) representing a22.8% margin (H1 2013: 22.4%). OUTLOOK: We expect FY 2014 growth for PR Newswire to be in line with 2013, withcontinued stability in operating profit margin. CORPORATE OPERATIONS Total corporate costs for H1 2014 were £12.7m (H1 2013: £12.4m). Thesecorporate costs were partially offset by internal cost recoveries from UBM'soperating businesses, results from joint ventures and associates and sundryincome which was not attributable to any reporting segment, resulting in a netcorporate cost of £1.0m (H1 2013: £9.4m). Non-recurring items included withincorporate operations for H1 2014 include: the pension settlement gain of £5.8m(H1 2013: £1.9m) and gains on disposals of non-discontinued businessestotalling £5.2m. Net corporate costs for the full year are expected to be inline with 2013. FINANCIAL REVIEW The table below presents selected items from UBM's consolidated incomestatement (which accompanies this summary), together with a reconciliation toIFRS measures. Figures for H1 2013 have been restated for the impact ofdiscontinued operations. IFRS Measures As adjusted* H1 Restated Change H1 Restated Change 2014 H1 2013 % 2014 H1 2013 % £m £m £m £m Continuing Revenue 361.0 391.8 -7.9 361.0 391.8 -7.9 Operating expenses (excluding (a) (267.5) (305.1) (267.5) (305.1)line items below) Share of tax on profit in JV & (0.2) (0.4) (b) (b)associates (a) Exceptional operating items (a) 20.9 (9.3) (b) (b) Impairment (a) (1.1) (5.2) (b) (b) EBITDA 93.5 86.7 7.8 Depreciation (a) (6.1) (6.3) (6.1) (6.3) EBITA 87.4 80.4 8.7 Amortisation - intangible assets (12.0) (12.0) (b) (b)arising on acquisition (a) Operating profit 95.0 53.5 77.6 87.4 80.4 8.7 Net interest expense (10.6) (13.0) (10.6) (13.0) Exceptional financing expense (2.6) (0.8) (b) (b) Financing expense - pension (0.3) (0.9) (0.3) (0.9)schemes Financing income - other 1.0 1.7 (b) (b) PBT 82.5 40.5 103.7 76.5 66.5 15.0 Taxation (6.7) (3.8) (11.1) (7.7) PAT from continuing operations 75.8 36.7 106.5 65.4 58.8 11.2 Discontinued operations - 20.4 - 0.4 Profit for the period 75.8 57.1 32.7 65.4 59.2 10.5 Non-controlling interests (5.9) (5.4) (5.9) (5.4) Attributable profit 69.9 51.7 35.2 59.5 53.8 10.6 Weighted average no. of shares 245.5 244.5 245.5 244.5(million) Fully diluted weighted average no. 248.1 249.3 248.1 249.3of shares (million) Earnings per share (pence) Continuing operations - basic 28.5p 12.8p 122.7 24.3p 21.8p 11.5 Continuing operations - diluted 28.2p 12.6p 123.8 24.0p 21.4p 12.1 Profit for the year - basic 28.5p 21.1p 35.1 24.3p 22.0p 10.5 Profit for the year - diluted 28.2p 20.7p 36.2 24.0p 21.6p 11.1 Dividend per share (pence) 6.8p 6.7p 1.5 (a) Expenses not included within operating expenses figure (b) All non-IFRS measures and business performance measures have beendesignated with a * and additional information on these measures has beenprovided on page 13 The discontinued operations reported for H1 2013 relate to the UBM Channelbusiness and certain Built Environment Marketing Services activities which weresold in September 2013 and October 2013 respectively. Exceptional operating items Associate gain PA Group, the parent company of the Press Association, sold its weatherforecasting business, MeteoGroup. We report our 17% interest in PA Group as anassociate and have recognised our share of the MeteoGroup gain (£21.9m) as anexceptional gain from associates. Impairment We have reviewed the carrying value of goodwill and intangible assets (otherthan the assets held for sale) in light of current trading conditions andfuture outlook. As a result of this review, we have recognised an impairment of£1.1m for two small joint ventures in Asia. Acquisition exceptional items Acquisition costs of £0.4m (H1 2013: £0.1m) have been expensed as exceptionalitems. For the six months ended 30 June 2014 an exceptional charge of £0.6m (H12013: credit £1.7m) was recognised relating to revised contingent considerationestimates for prior year acquisitions. Foreign currency The sensitivity of our income statement to foreign currency risk for our mostsignificant foreign currencies is shown in the analysis below. Average Currency value Effect on Effect on exchange rate rises/ falls by revenue adjusted in H1 2014 operating profit +/- £m * +/- £m US dollar 1.6736 1 cent 1.3 0.4 Euro 1.2221 1 cent 0.3 0.1 The following table outlines the currency profile of our revenues and adjustedoperating profits for H1 2014: Revenue % Adjusted Average exchange Average exchange operating rate 2014 rate 2013 profit* % US Dollar 48.5 42.7 1.6736 1.5319 HK Dollar 11.7 20.7 12.9793 11.8866 UK Pound 10.1 6.0 1.0000 1.0000Sterling Euro 8.9 11.0 1.2221 1.1720 Renminbi 6.0 6.4 10.3386 9.4818 Canadian Dollar 3.9 5.0 1.8404 1.5693 Japanese Yen 2.5 3.0 171.5595 147.3725 Indian Rupee 1.0 - 101.5465 84.8653 Brazilian Real 1.0 0.9 3.8226 3.1348 Other 6.4 4.3 Total 100.0 100.0 We continue to monitor our exposure to foreign currency closely, and seek tomatch revenues and costs when possible. The revolving credit facility may bedrawn in currencies other than Sterling; we also hold cash and cash equivalentsin Sterling, US Dollar, the Renminbi and other currencies closely linked to theUS Dollar. Given our large and diverse customer base, there are no significantconcentrations of credit risk. Interest and financing expense Net interest expense represents interest costs on UBM's bonds and bank loans,net of interest receipts on cash and cash equivalents and vendor loan notes.Net interest expense in H1 2014 was £10.6m, compared with £13.0m in H1 2013.The decrease is due to lower borrowings in 2014 following the receipt ofdisposal proceeds and interest income on the Delta Vendor Loan Note. Net financing income - other includes a net gain of £1.2m (H1 2013: net loss £0.3m) in respect of ineffective fair value hedges and net investment hedges anda net loss of £0.2m (H1 2013: gain of £2.0m) in respect of foreign exchangelosses on forward contracts and other fair value adjustments. H1 2014 H1 2014 H1 2013 H1 2013 £m £m £m £m Cash and cash equivalents 0.9 0.4 Vendor loan notes 1.1 0.5 Interest income 2.0 0.9 Interest expense (12.6) (13.9) Financing expense - pension schemes (0.3) (0.9) Financing income - other 1.8 4.4 Financing expense - other (0.8) (2.7) Net finance income before exceptional items 0.7 0.8 Exceptional finance expense FV movement on put options over (2.6) (0.8)non-controlling interests Net finance expense (12.5) (13.0) Income tax UBM's effective rate of taxation for the first half of 2014 was 14.5% (H1 2013:11.5%). As at 30 June 2014, UBM's tax creditor stood at £47.5m (31 December2013: £45.4m). The tax creditor includes provision for tax settlements invarious jurisdictions in which UBM operates. During the period, tax has beenpaid in the following jurisdictions: £m China 3.0 Netherlands 1.8 France 1.3 Brazil 1.1 Canada 1.0 Other emerging markets 0.8 Other 0.9 Total 9.9 Acquisitions and disposals We invested £16.7m in the acquisition of two Mexican events businesses in H12014. These acquisitions are closely aligned to our strategic priorities andprovide us with exposure to attractive communities and geographies. We alsomade payments in respect of contingent and deferred consideration relating toacquisitions made in prior years totalling £2.3m. The 2014 acquisitions have contributed a loss of £0.1m since their respectiveacquisition dates and are expected to achieve a pre-tax return on investment of11.6% on a pro forma basis for the full year. The following table shows theperformance of our acquisitions since 2012 relative to our target pre-tax costof capital threshold of 10%: Consideration Return on investment* £m 2012 2013 2014 2012 acquisitions 28.7 16.2% 8.6% 8.2% 2013 acquisitions 12.5 13.5% 11.8% 2014 acquisitions(4) 16.7 11.6% Total 57.9 10.0% 4. 2014 Return on investment pro forma for full year 2014 results We generated £4.0m in net cash proceeds from the sale of three Other MarketingServices businesses in line with our restructuring program initiated in 2013.As these activities do not meet the IFRS 5 criteria to be classified asdiscontinued or held for sale, their results are included in continuingoperations. The aggregate gain on disposal of £5.2m has been reported in theCorporate Operations segment, consistent with our Group policy. Capital Structure 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 on our long term debt from Moody's (currentrating Baa3 - negative outlook) and Standard & Poor's (current rating BBB -stable outlook). Our debt facilities include £250m of 6.5% Sterling bonds maturing November2016; $350m of 5.75% UK bonds maturing November 2020; and a £300m syndicatedbank loan facility. In addition to the unutilised commitment of £214.9m, we hadcash in hand after overdrafts of £81.2m at 30 June 2014. Facility Drawn Undrawn Maturity £m £m £m £m Syndicated Bank Facility 300.0 85.1 214.9 May 2016 £250m fixed rate sterling 250.0 250.0 - Nov 2016bond $350m fixed rate dollar 205.6 205.6 - Nov 2020bond Total 755.6 540.7 214.9 Note: Amounts drawn exclude fair value movements on the debt instruments Capital management Our policy is to maintain prudent debt capital ratios to assure continualaccess to capital on attractive terms and conditions. At 30 June 2014, theratio of net debt to earnings before interest, taxation, depreciation andamortisation was 2.2 times as shown below. 30 June 2014 31 December 2013 30 June 2013 £m £m £m Financial liabilities 562.5 531.8 591.3 Financial assets (110.4) (88.4) (124.0) Net debt* 452.1 443.4 467.3 LTM EBITDA* 206.3 199.5 183.0 Net debt to LTM EBITDA ratio* 2.2 times 2.2 times 2.6 times Pensions At 30 June 2014, the aggregate deficit under IAS 19 was £23.5m, an improvementof £2.4m on the deficit of £25.9m at 31 December 2013 due to asset returns andone-off scheme settlements, partially offset by changes in actuarialassumptions. On 30 December 2013, the three main UK schemes (the United Pension Plan, theUnited Magazines Final Salary Scheme and the defined benefit section of theUnited Group Pension Scheme) were merged into the new UBM Pension Scheme.Members of the former schemes were offered the chance to take up a winding-uplump sum in lieu of pension benefits. As the amounts paid were less than theaccounting reserve held in respect of the liabilities that were extinguished, aresulting settlement gain of £5.8m has been recognised within CorporateOperations. Cash flow Cash generated from operations declined to £83.5m from £98.4m in H1 2013,reflecting the biennial cycle, higher restructuring payments and reported gainswhich will have a cash benefit in the next 12 months. Cash conversion was101.8% of adjusted operating profit (H1 2013: 110.9%). Discretionary free cashflow was £55.1m, compared to £69.8m in H1 2013. A reconciliation of net cash inflow from operating activities to free cash flowis shown below: H1 2014 H1 2013 £m £m Adjusted cash generated from operating 90.8 105.7activities* Restructuring payments (5.5) (3.0) Other adjustments (1.8) (4.3) Cash generated from operations (IFRS) 83.5 98.4 Dividends from JVs and associates - 2.5 Net interest paid (7.8) (9.9) Taxation paid (9.9) (8.3) Capital expenditure (10.7) (12.9) Discretionary free cash flow* 55.1 69.8 Acquisitions (18.3) (6.8) Proceeds from disposals 4.0 111.2 Advances to JVs, associates and minority 0.3 0.1partners Free cash flow* 41.1 174.3 Net share issues 0.4 0.7 Dividends (52.7) (49.5) Purchase of ESOP shares (2.1) (2.4) CORE and new office lease During 2014 we continued to invest in the implementation of CORE - our newglobal ERP system and outsourced finance processes. The project has beenfocussed on our Events-led businesses, and will result in improved managementinformation including benchmarking and best practice initiatives. CORE wasdeployed for our UK and Europe-based operations in February 2014, and we expectto roll the system out across the remainder of the Group's Events and OtherMarketing Services businesses in late 2014 and early 2015. £28.8m ofexpenditure has been capitalised to date (£22.7m to 31 December 2013). Of thisamount, £15.5m has been classified as an intangible asset in H1 2014 andcommenced amortisation over seven years. We expect to invest a further £14m inthe completion of CORE during 2014 and early 2015. We will consolidate our 700 London-based staff into new premises when the leaseon our principal UK office space expires in March 2015. The new modern buildingis open-plan and will facilitate a collaborative working environment. The15-year lease commenced in March 2014 and the leasehold fit out is underway. Weanticipate total capital expenditure including relocation costs ofapproximately £18m (net of the landlord's contribution) which will bedepreciated over the term of the lease. The new building will result in anincremental annual cost of approximately £2.8m including depreciation of thecapital expenditure. Related party transactions Details of related party transactions in the six months ended 30 June 2014 aredisclosed in Note 20 of the Interim Financial Report. Going Concern We expect to continue to generate significant free cash flow in H2 2014 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. 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 tothe following: * After taking account of available cash resources and committed bank facilities, none of UBM's borrowings fall due within the next two years that require refinancing from resources not already available. * The 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. Board of Directors changes The Directors who held office during the six months ended 30 June 2014 are thesame as those disclosed in the Annual Report and Accounts for the year ended 31December 2013, except for the following changes: * David Levin ceased to be a Director on 1 March 2014; * Karen Thomson ceased to be a Director on 31 March 2014; * Tim Cobbold was appointed as a Director and Chief Executive Officer of the Group on 6 May 2014; and * Mary McDowell was appointed as a Director on 1 August 2014 Summary of Major risks * Macro-economic slowdown and/or exchange rate fluctuations * + A slowdown in the macro environment could adversely impact revenue, as advertising, attendee, sponsorship and other discretionary revenue tends to be cyclical. A downturn may also result in slower debt collections, thereby affecting cash flow. + Foreign exchange rate fluctuations could adversely affect our reported earnings and the strength of our balance sheet. * Specific country risk and emerging market exposure * + Our business operates in many geographies, particularly Emerging Markets, which may present logistical and management challenges due to different business cultures, languages, anti-bribery laws, health and safety standards or unfavourable changes in applicable law or compliance requirements. + Expansion through joint ventures reduces logistical and management issues but can create governance challenges or affect our ability to extract rewards from our investment. * Inability to stage an event or inability of customers to travel to an event * + A disaster or natural catastrophe, terrorism, political instability or disease could affect people's willingness to attend our events, which could have an adverse effect on our revenues. + Similarly the business model relies on the availability of venues for hosting events. * Changes in our business environment * + We cannot predict all the changes which may affect the competitiveness of the business, such as changes in customer behaviour or technological innovations which would increase competition or make some products or services less relevant. Social media platforms, search engines and other online technologies could all pose a competitive threat to our businesses. + Similarly, additional venue capacity could introduce competition as well as enhance opportunities for growth. * Technological risk: security or execution * + System failure could have a significant impact on our business. Unauthorised access to our systems by external parties could lead to reputational damage and legal action. The collapse of the Cloud on which various products and systems are hosted could have negative consequences for our reputation. + UBM may need to carry out new projects or deliver new services which involve significant capital investment. Failure to deliver these efficiently could lead to increased costs, delays or erosion of UBM's competitive position. * Reduced access to capital and ability to pursue portfolio management element of strategy * + Changes in the availability or cost of financing, the availability of suitable acquisitions, the ability to obtain regulatory approval, integration issues or the failure to realise operating benefits or synergies may affect our acquisition strategy. Explanation of non-IFRS measures Financial Measure How we define it Why we use it Underlying revenue and Underlying measures are Underlying growth ratesunderlying operating adjusted for the estimated provide insight into theprofit effects of acquisitions, organic growth of the disposals, structural business. discontinued products, foreign exchange movements and biennial events. Adjusted operating profit Operating profit excluding Provides insight into amortisation of intangible ongoing profit generation,Margin assets arising on individually and relative acquisitions, exceptional to other companies. items and share of taxation on joint ventures and associates. Adjusted operating profit expressed as a percentage of revenues EBITDA Earnings before interest, Measure of earnings and tax, depreciation, cash generative capacity. amortisation and exceptional items Adjusted profit before Profit before tax before Facilitates performancetax amortisation of intangible evaluation, individually assets on acquisitions, and relative to otherAdjusted EPS exceptional items, share companies. of taxation on profit from joint ventures and associates and net financing expense adjustments. Adjusted EPS includes share of taxation on profit from joint ventures and associates but excludes deferred tax on the amortisation of intangible assets. Adjusted diluted EPS includes the impact of share options. Net debt Net debt is current and Measure of indebtedness in non-current borrowings and excess of the current cash derivatives associated available to pay down with debt instruments, debt. less cash and cash equivalents. Net debt to EBITDA Net debt divided by Commonly used measure of EBITDA. financial leverage.Net debt to LTM EBITDA Includes an annualised EBITDA figure for interim reporting. Discretionary free cash Net cash provided by Measure of cash availableflow operating activities after to repay debt, pay meeting obligations for dividends and invest in interest, tax and capital acquisitions after capital expenditures. expenditure. Adjusted operating cash Adjusted to exclude Provides an understandingflow non-operating movements in of our operating cash working-capital, such as flows.Cash conversion expenditure against reorganisation and restructuring provisions. Cash conversion is the ratio of adjusted cash generated from operations to adjusted operating profit. Pre-tax return on Attributable adjusted To assess returns oninvestment operating profit divided acquisitions relative to by the cost of our target pre-tax cost of acquisitions. Calculated capital threshold of 10%. on a pro forma basis, as if the acquired business were owned throughout the year. Estimated total Estimated total Provides a measure ofconsideration consideration includes total consideration for initial consideration (net businesses acquired. of cash acquired), the latest estimate of expected contingent consideration and deferred consideration. Return on average capital ROACE is operating profit Provides a measure of theemployed (ROACE) before exceptional items efficiency of our capital divided by average capital investment. employed. Average capital employed is the average of opening and closing total assets less current liabilities for each period. Effective tax rate The effective tax rate on Provides a more comparable adjusted profit before tax basis to analyse our tax reflects the tax rate rate. excluding movements on deferred tax balances on the amortisation of intangible assets. Interim consolidated income statement for the six months ended 30 June 2014 Notes Restated Before before Restated Restated exceptional Exceptional Total exceptional exceptional total items items 30 June items items 30 June 30 June 30 June 2014 30 June 30 June 2013 2014 2014 Unaudited 2013 2013 Unaudited £m £m £m £m £m £m Continuing operations 4 Revenue 361.0 - 361.0 391.8 - 391.8 5 Other operating income 8.1 - 8.1 3.5 - 3.5 Operating expenses (282.4) - (282.4) (316.2) - (316.2) 6 Exceptional operating - (1.0) (1.0) - (14.5) (14.5) items Amortisation of (12.0) - (12.0) (12.0) - (12.0) intangible assets arising on acquisitions 6 Share of results from 0.5 20.8 21.3 0.9 - 0.9 joint ventures and associates (after tax) Group operating profit 75.2 19.8 95.0 68.0 (14.5) 53.5 from continuing operations 7 Financing income 3.8 - 3.8 5.3 - 5.3 7 Financing expense (13.7) (2.6) (16.3) (17.5) (0.8) (18.3) Net financing expense (9.9) (2.6) (12.5) (12.2) (0.8) (13.0) Profit before tax from 65.3 17.2 82.5 55.8 (15.3) 40.5 continuing operations Tax (6.7) - (6.7) (3.8) - (3.8) Profit for the period 58.6 17.2 75.8 52.0 (15.3) 36.7 from continuing operations Discontinued operations 16 Profit for the period - - - 0.1 20.3 20.4 from discontinued operations Profit for the period 58.6 17.2 75.8 52.1 5.0 57.1 Attributable to: Owners of the parent 69.9 51.7 entity Non-controlling 5.9 5.4 interests 75.8 57.1 Earnings per share (pence) 8 Continuing operations - 28.5p 12.8p basic 8 Continuing operations - 28.2p 12.6p diluted 8 Profit for the period - 28.5p 21.1p basic 8 Profit for the period - 28.2p 20.7p diluted £m £m Group operating profit 95.0 53.5 from continuing operations 6 Exceptional operating (19.8) 14.5 items Amortisation of 12.0 12.0 intangible assets arising on acquisitions Share of tax on profit 0.2 0.4 in joint ventures and associates Adjusted operating - 0.4 profit from discontinued operations 4 Adjusted Group operating 87.4 80.8 profit* £m £m Dividends 9 Final dividend of 20.5p 50.3 48.8 (2013: 20.0p) 9 Proposed interim 16.7 16.4 dividend of 6.8p (2013: 6.7p) * 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 2013 Before exceptional Exceptional Total items items 31 December 31 December 31 December 2013 2013 2013 Audited £m £m £m Continuing operations 4 Revenue 793.9 - 793.9 5 Other operating income 6.5 - 6.5 Operating expenses (618.0) - (618.0) 6 Exceptional operating items - (33.2) (33.2) Amortisation of intangible assets arising (21.3) - (21.3) on acquisitions Share of results from joint ventures and 3.0 - 3.0 associates (after tax) Group operating profit from continuing 164.1 (33.2) 130.9 operations 7 Financing income 6.6 4.1 10.7 7 Financing expense (32.1) - (32.1) Net financing expense (25.5) 4.1 (21.4) Profit before tax from continuing 138.6 (29.1) 109.5 operations Tax (10.9) - (10.9) Profit for the year from continuing 127.7 (29.1) 98.6 operations Discontinued operations 16 Profit for the year from discontinued 1.8 16.6 18.4 operations Profit for the year 129.5 (12.5) 117.0 Attributable to: Owners of the parent entity 107.5 Non-controlling interests 9.5 117.0 Earnings per share (pence) 8 Continuing operations - basic 36.4p 8 Continuing operations - diluted 36.0p 8 Profit for the year - basic 43.9p 8 Profit for the year - diluted 43.4p £m Group operating profit from continuing 130.9 operations 6 Exceptional operating items 33.2 Amortisation of intangible assets arising 21.3 on acquisitions Share of tax on profit in joint ventures 0.9 and associates Adjusted operating profit from 2.1 discontinued operations 4 Adjusted Group operating profit* 188.4 £m Dividends 9 Interim dividend of 6.7p 16.4 9 Proposed final dividend of 20.0p 50.3 * Adjusted Group operating profit represents Group operating profit excludingamortisation of intangible assets arising on acquisitions, exceptional itemsand share of tax on profit in joint ventures and associates. Interim consolidated statement of comprehensive income for the six months ended 30 June 2014 Notes Six months Six months ended ended Year ended 30 June 30 June 31 December 2014 2013 2013 Unaudited Unaudited Audited £m £m £m Profit for the period 75.8 57.1 117.0 Other comprehensive (loss)/income Other comprehensive income to be reclassified to profit or loss in subsequent periods 14 Currency translation differences on (21.7) 31.9 (22.3) foreign operations - Group 14 Net investment hedge 8.5 (30.9) 6.9 Currency translation differences on - 0.7 (0.4) foreign operations - joint ventures and associates Reclassification adjustment for foreign - (26.0) (26.0) operations disposed of in the period Income tax relating to components of - - - other comprehensive income (13.2) (24.3) (41.8) Other comprehensive income not to be reclassified to profit or loss in subsequent periods Remeasurement of defined benefit (4.4) 28.6 18.1 obligation Irrecoverable element of pension surplus (0.2) (4.9) 0.4 Remeasurement of defined benefit (0.4) (0.4) (0.4) obligation of associates Income tax relating to components of - - - other comprehensive income (5.0) 23.3 18.1 Other comprehensive loss for the period, (18.2) (1.0) (23.7) net of tax Total comprehensive income for the 57.6 56.1 93.3 period, net of tax Attributable to: Owners of the parent entity 52.1 49.3 86.6 Non-controlling interests 5.5 6.8 6.7 57.6 56.1 93.3 Interim consolidated statement of financial position at 30 June 2014 Notes 30 June 30 June 31 December 2014 2013 2013 Unaudited Unaudited Audited £m £m £m Assets Non-current assets Goodwill 766.9 813.9 776.7 10 Intangible assets 107.7 121.3 111.4 10 Property, plant and equipment 20.5 28.8 21.3 Investments in joint ventures and 44.6 20.2 20.4 associates Other fixed asset investments 1.7 - 1.7 Vendor loan note 39.7 37.5 38.6 Derivative financial assets 14.8 19.8 14.4 18 Retirement benefit surplus 4.0 13.4 3.4 Deferred tax asset 5.4 5.6 3.7 1,005.3 1,060.5 991.6 Current assets Trade and other receivables 234.6 228.0 200.7 Derivative financial assets - 0.5 - 11 Cash and cash equivalents 95.6 103.7 74.0 16 Assets classified as held for sale 0.9 16.9 0.9 331.1 349.1 275.6 Total assets 1,336.4 1,409.6 1,267.2 Liabilities Current liabilities Current tax liabilities 47.5 54.5 45.4 Trade and other payables 392.6 405.8 349.2 Provisions 12.3 13.8 16.7 11 Borrowings 14.4 6.5 - Derivative financial liabilities 5.7 4.6 5.1 16 Liabilities associated with assets 0.4 9.0 0.4 classified as held for sale 472.9 494.2 416.8 Non-current liabilities Deferred tax liabilities 17.7 25.6 22.1 Trade and other payables 0.8 7.5 2.6 Provisions 10.6 12.2 11.6 11 Borrowings 548.1 567.5 530.5 Derivative financial liabilities 12.7 37.2 11.9 18 Retirement benefit obligation 27.5 38.1 29.3 617.4 688.1 608.0 Total liabilities 1,090.3 1,182.3 1,024.8 Equity attributable to owners of the parent entity 13 Share capital 24.6 24.6 24.6 Share premium 8.3 7.2 7.9 14 Other reserves (663.0) (640.8) (652.1) Retained earnings 865.8 825.1 854.7 Put options over non-controlling interests (19.4) (22.8) (19.4) Total equity attributable to owners of the 216.3 193.3 215.7 parent entity Non-controlling interests 29.8 34.0 26.7 Total equity 246.1 227.3 242.4 Total equity and liabilities 1,336.4 1,409.6 1,267.2 Interim consolidated statement of changes in equity for the six months ended 30 June 2014 Notes Total equity Put options attributable over non- to owners Non- Share Share Other Retained controlling of parent controlling Total capital premium reserves earnings interests entity interests equity £m £m £m £m £m £m £m £m At 1 January 24.6 7.9 (652.1) 854.7 (19.4) 215.7 26.7 242.4 2014 Profit for the - - - 69.9 - 69.9 5.9 75.8 period Other - - (12.8) (5.0) - (17.8) (0.4) (18.2) comprehensive loss Total - - (12.8) 64.9 - 52.1 5.5 57.6 comprehensive (loss)/income for the period 9 Equity - - - (50.3) - (50.3) - (50.3) dividends Non-controlling - - - - - - (2.4) (2.4) interest dividends Issued in - 0.4 - - - 0.4 - 0.4 respect of share option schemes and other entitlements Share-based - - - 0.5 - 0.5 - 0.5 payments 14 Shares awarded - - 6.8 (6.8) - - - - by ESOP 14 Own shares - - (4.9) 2.8 - (2.1) - (2.1) purchased by the Company At 30 June 2014 24.6 8.3 (663.0) 865.8 (19.4) 216.3 29.8 246.1 (unaudited) At 1 January 24.5 6.6 (618.5) 802.6 (13.0) 202.2 27.2 229.4 2013 Profit for the - - - 51.7 - 51.7 5.4 57.1 period Other - - (25.7) 23.3 - (2.4) 1.4 (1.0) comprehensive (loss)/income Total - - (25.7) 75.0 - 49.3 6.8 56.1 comprehensive (loss)/income for the period 9 Equity - - - (48.8) - (48.8) - (48.8) dividends Non-controlling - - - - - - (0.7) (0.7) interest dividends Non-controlling - - - - (9.8) (9.8) 0.7 (9.1) interest recognised on business combinations Issued in 0.1 0.6 - - - 0.7 - 0.7 respect of share option schemes and other entitlements Share-based - - - 2.1 - 2.1 - 2.1 payments 14 Shares awarded - - 13.4 (13.4) - - - - by ESOP 14 Own shares - - (10.0) 7.6 - (2.4) - (2.4) purchased by the Company At 30 June 2013 24.6 7.2 (640.8) 825.1 (22.8) 193.3 34.0 227.3 (unaudited) At 1 January 24.5 6.6 (618.5) 802.6 (13.0) 202.2 27.2 229.4 2013 Profit for the - - - 107.5 - 107.5 9.5 117.0 year Other - - (39.0) 18.1 - (20.9) (2.8) (23.7) comprehensive (loss)/income Total - - (39.0) 125.6 - 86.6 6.7 93.3 comprehensive (loss)/income for the year 9 Equity - - - (65.2) - (65.2) - (65.2) dividends Non-controlling - - - - - - (9.3) (9.3) interest dividends Non-controlling - - - - (7.8) (7.8) 3.0 (4.8) interest arising on business combinations Acquisition of - - - (0.6) 1.4 0.8 (0.9) (0.1) non-controlling interests Issued in 0.1 1.3 - - - 1.4 - 1.4 respect of share option schemes and other entitlements Share-based - - - 3.7 - 3.7 - 3.7 payments 14 Shares awarded - - 25.5 (25.5) - - - - by ESOP 14 Own shares - - (20.1) 14.1 - (6.0) - (6.0) purchased by the Company At 31 December 24.6 7.9 (652.1) 854.7 (19.4) 215.7 26.7 242.4 2013 Interim consolidated statement of cash flows for the six months ended 30 June 2014 Restated Notes Six six Year months months ended ended ended 31 30 June 30 June December 2014 2013 2013 Unaudited Unaudited Audited £m £m £m Cash flows from operating activities Reconciliation of profit to operating cash flows Profit for the period from continuing 75.8 36.7 98.6 operations Profit for the period from discontinued - 20.4 18.4 operations Profit for the period 75.8 57.1 117.0 Add back: Exceptional items (excluding fair value (17.8) (3.0) 14.7 adjustments below) Fair value adjustments of contingent 0.6 (2.0) (2.2) consideration Tax 6.7 3.8 10.9 Amortisation of intangible assets 12.0 12.3 21.6 Amortisation of website development costs 2.6 2.4 5.0 Depreciation 3.5 4.1 8.4 Share of results from joint ventures and (0.5) (0.9) (3.0) associates (after tax) 7 Financing income (3.8) (5.3) (6.6) 7 Financing expense 13.7 17.5 32.1 Other non-cash items (10.5) 2.4 3.8 82.3 88.4 201.7 Payments against provisions (5.5) (3.0) (12.9) Pension deficit contributions (1.8) (1.8) (3.5) Decrease in inventories 0.3 0.2 - (Increase)/decrease in trade and other (34.8) (1.7) 15.1 receivables Increase/(decrease) in trade and other 43.0 16.7 (34.6) payables Cash generated from operations 83.5 98.8 165.8 Cash generated from operations - continuing 83.5 98.4 164.4 Cash generated from operations - - 0.4 1.4 discontinued Interest and finance income received 0.7 0.4 1.4 Interest and finance costs paid (8.5) (10.3) (25.7) Tax paid (9.9) (8.3) (25.4) Dividends received from joint ventures and - 2.5 3.7 associates Net cash flows from operating activities 65.8 83.1 119.8 Net cash flows from operating activities - 65.8 82.7 118.4 continuing Net cash flows from operating activities - - 0.4 1.4 discontinued Cash flows from investing activities 15 Acquisition of interests in subsidiaries, (18.3) (6.4) (19.0) net of cash acquired Investment in joint ventures - - (0.1) Purchase of investments - (0.4) (0.4) Purchase of property, plant and equipment (3.6) (2.9) (5.8) Expenditure on intangible assets (7.1) (10.1) (16.3) Proceeds from sale of businesses, net of 4.0 99.7 107.9 cash disposed Advances to joint ventures and associates 0.3 0.1 (0.2) Advances to non-controlling interest - - - partners Net cash flows from investing activities (24.7) 80.0 66.1 Net cash flows from investing activities - (24.7) 91.6 78.3 continuing Net cash flows from investing activities - - (11.6) (12.2) discontinued Cash flows from financing activities Proceeds from the issuance of ordinary share 0.4 0.7 1.4 capital 15 Acquisition of non-controlling interests - - (0.3) 9 Dividends paid to shareholders (50.3) (48.8) (65.2) Dividends paid to non-controlling interests (2.4) (0.7) (9.3) Net movement in ESOP shares (2.1) (2.4) (6.0) 11 Increase/(decrease) in borrowings 24.8 (106.2) (117.8) Net cash flows from financing activities (29.6) (157.4) (197.2) Net cash flows from financing activities - (29.6) (157.1) (196.0) continuing Net cash flows from financing activities - - (0.3) (1.2) discontinued Net increase/(decrease) in cash and cash 11.5 5.7 (11.3) equivalents Net foreign exchange difference (4.3) 5.3 (1.4) Cash and cash equivalents at beginning of 74.0 86.7 86.7 period Cash and cash equivalents at end of period 81.2 97.7 74.0 (including bank overdraft) Notes to the interim consolidated financial statements for the six months ended 30 June 2014 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 United Kingdom. Thenature of the Group's operations and its principal activities are detailed inNote 4. The interim condensed consolidated financial statements of the Group for thesix months ended 30 June 2014 were authorised for issue by the Board ofdirectors on 1 August 2014. The interim condensed consolidated financialstatements are unaudited but have been reviewed by the auditors as set out intheir report. 2. Basis of preparation The interim condensed consolidated financial statements for the six monthsended 30 June 2014 have been prepared in accordance with IAS 34 `Interimfinancial reporting' and the Disclosure and Transparency Rules of the FinancialConduct 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 2013, were approved by the directors on 28 February 2014and 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 consolidated financialstatements should be read in conjunction with the Annual Report and Accountsfor the year ended 31 December 2013, which were prepared in accordance withInternational Financial Reporting Standards (IFRSs) as issued by theInternational Accounting Standards Board (IASB). Discontinued operations During the year ended 31 December 2013, the Board of directors approved a planas part of a strategic review of Marketing Services activities to dispose ofthe UBM Channel business and certain UBM Built Environment Marketing Servicesactivities (Built MS). The sale of UBM Channel completed on 16 September 2013and Built MS was disposed on 31 October 2013. In accordance with IFRS 5`Non-current assets held for sale and discontinued operations' the net resultsfor the year ended 31 December 2013 and six months ended 30 June 2013 arepresented within discontinued operations in the income statement. The Group classified a disposal group (Delta) as held for sale at 31 December2012. The sale of Delta was completed on 8 April 2013, with the exception ofcertain businesses in China, India and the UK. The sale of the China businessescompleted on 16 August 2013. The India businesses still require regulatoryapprovals and are reported as held for sale at 30 June 2014. Completion isexpected in the next three months. The UK business was retained by the Groupand is no longer classified as discontinued operations or held for sale. Under the terms of the sale agreement, Electra Partners LLP received thereturns of Delta from 1 January 2013. Consolidation of the Delta entitiestherefore ceased on this date in accordance with the requirements of IFRS 10`Consolidated Financial Statements'. Comparative information The comparative information in the income statement and associated notes hasbeen restated for the impact of certain products within Built MS that wereclassified as discontinued operations at 30 June 2013 but have been retained bythe Group. Trade receivables and deferred revenue have been increased by £36.3mto reclassify certain balances that were previously reported on a net basis. Going concern 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 2014. 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 for the six months ended 30 June 2014 areconsistent with those used in the preparation of the Group's Annual Report andAccounts for the year ended 31 December 2013, except for the adoption of thefollowing new and amended accounting standards: Accounting Requirements Impact on financialstandard statements IFRS 10 These amendments provide an exception None; none of the`Consolidated to the consolidation requirement for entities in the GroupFinancial entities that meet the definition of qualifies to be anStatements' an investment entity under IFRS 10 investment entity under(amended), IFRS Consolidated Financial Statements. The IFRS 10.12 `Disclosures exception to consolidation requiresof Interests in investment entities to account forOther Entities' subsidiaries at fair value through(amended) and profit or loss.IAS 27`Separate Adopted retrospectively from 1 JanuaryFinancial 2014.Statements'(amended) IAS 32 These amendments clarify the meaning None.`Financial of `currently has a legallyInstruments: enforceable right to set-off' and thePresentation' criteria for non-simultaneous(amended) settlement mechanisms of clearing houses to qualify for offsetting. Adopted retrospectively from 1 January 2014. IAS 39 These amendments provide relief from None; the Group has not`Financial discontinuing hedge accounting when novated any derivativesInstruments: novation of a derivative designated as during the current orRecognition and a hedging instrument meets certain prior periods.Measurement' criteria.(amended) Adopted retrospectively from 1 January 2014. IFRIC 21 The interpretation clarifies when an None.`Levies' entity recognises a liability for a levy imposed by governments under legislation, other than outflows that are within the scope of other standards and fines or other penalties for breaches of legislation. Adopted from 1 January 2014. 4. Segment information Operating segments The Group considers that operating segments presented on a products andservices basis are the most appropriate way to present the performance of theGroup. This is consistent with the internal reporting provided to the GroupChief Executive Officer and the Group Chief Financial Officer, together thechief operating decision maker (CODM), and reflects the way in which resourcesare allocated. On 8 April 2013, the Group sold the majority of the Delta businesses. As theDelta businesses are not consolidated by the Group from 1 January 2013, thereare no Delta discontinued operations from this date. In addition, the Groupsold UBM Channel on 16 September 2013 and Built MS on 31 October 2013. Theseoperations have been treated as discontinued as detailed in Note 2 and Note 16. The segment results do not include amounts for discontinued operations. TheCODM considers there to be four operating segments: * Events which provide face to face interaction in the form of exhibitions, trade shows, conferences and other live events; * Marketing Services - Online which provide website sponsorships and banner advertising as well as online directory and data products; * Marketing Services - Print which publishes magazines and trade press to specialist markets; and * PR Newswire which provides communications products and services to professionals working in marketing, public relations, corporate communications or investor relations roles - distributing messages, identifying target audiences and monitoring the impact. Marketing Services - Online and Marketing Services - Print have been aggregatedto form one reportable segment `Other Marketing Services'. The two operatingsegments have similar economic characteristics and meet the aggregationcriteria defined in IFRS 8 `Operating segments'. Segment measures The CODM assesses the performance of the operating segments and the allocationof resources using revenue and adjusted operating profit. Adjusted operatingprofit is IFRS operating profit excluding amortisation of intangible assetsarising on acquisitions, exceptional items and share of tax on results of jointventures and associates. Finance income/expense and tax are not allocated to operating segments and arereported to the CODM only in aggregate. Segment assets and liabilities are not reported to the CODM. Transactions between segments are measured on the basis of prices that wouldapply to third-party transactions. Six months ended 30 June 2014 Other Marketing PR Corporate Events Services Newswire operations Total £m £m £m £m £m Revenue Total segment 214.6 48.5 98.5 - 361.6revenue Intersegment revenue (0.4) - (0.2) - (0.6) External revenue 214.2 48.5 98.3 - 361.0 Result Depreciation (2.6) (0.6) (2.3) (0.6) (6.1)(includingamortisation ofwebsite developmentcosts) Share of pre-tax (0.1) - 0.1 0.7 0.7results from jointventures andassociates Segment adjusted 61.6 4.4 22.4 (1.0) 87.4operating profit Amortisation of intangible assets (12.0)arising on acquisitions Exceptional 19.8operating items Share of tax on profit in joint (0.2)ventures and associates Group operating 95.0profit Financing income 3.8 Financing expense (13.7) Exceptional items relating to net (2.6)financing expense Profit before tax 82.5 Tax (6.7) Profit for the 75.8period Total corporate costs for the period ended 30 June 2014 are net of gains on disposalsof £5.2m(six months ended 30 June 2013: £nil; year ended 31 December 2013: £nil),pensionsettlement gain of £5.8m (six months ended 30 June 2013: £nil; year ended 31 December2013: loss of £0.6m)and share of pre-tax results from joint ventures and associates of£0.7m (six months ended 30 June 2013: £1.1m; year ended 31 December 2013: £2.5m).Theseincome items are not attributable to any of the Group's reported segments. Six months ended 30 June 2013 (restated) Other Dis- Marketing PR Corporate Continuing continued Events Services Newswire operations total operations Total £m £m £m £m £m £m £m Revenue Total segment 220.6 66.4 105.4 - 392.4 15.5 407.9revenue Intersegment (0.2) - (0.4) - (0.6) - (0.6)revenue External revenue 220.4 66.4 105.0 - 391.8 15.5 407.3 Result Depreciation (2.3) (0.7) (3.0) (0.3) (6.3) (0.2) (6.5)(includingamortisation ofwebsite developmentcosts) Share of pre-tax (0.1) - 0.2 1.1 1.2 - 1.2results from jointventures andassociates Segment adjusted 62.7 3.6 23.5 (9.4) 80.4 0.4 80.8operating profit Amortisation of intangible assets (12.0) (0.3) (12.3)arising on acquisitions Exceptional (14.5) 20.3 5.8operating items Share of tax on profit in joint (0.4) - (0.4)ventures and associates Group operating 53.5 20.4 73.9profit Financing income 5.3 - 5.3 Financing expense (17.5) - (17.5) Exceptional items relating to net (0.8) - (0.8)financing expense Profit before tax 40.5 20.4 60.9 Tax (3.8) - (3.8) Profit for the 36.7 20.4 57.1period Year ended 31 December 2013 Other Dis- Marketing PR Corporate Continuing continued Events Services Newswire operations total operations Total £m £m £m £m £m £m £m Revenue Total segment 463.6 129.4 202.6 - 795.6 24.3 819.9revenue Intersegment (0.9) - (0.8) - (1.7) - (1.7)revenue External revenue 462.7 129.4 201.8 - 793.9 24.3 818.2 Result Depreciation (4.6) (1.3) (6.6) (0.7) (13.2) (0.2) (13.4)(includingamortisation ofwebsite developmentcosts) Share of pre-tax 1.0 - 0.4 2.5 3.9 - 3.9results from jointventures andassociates Segment adjusted 148.9 10.2 45.6 (18.4) 186.3 2.1 188.4operating profit Amortisation of intangible (21.3) (0.3) (21.6)assets arising on acquisitions Exceptional operating items (33.2) 0.3 (32.9) Exceptional discontinued items - 16.3 16.3 Share of tax on (0.9) - (0.9)profit in jointventures andassociates Group operating profit 130.9 18.4 149.3 Financing income 6.6 - 6.6 Financing expense (32.1) - (32.1) Exceptional items relating to 4.1 - 4.1net financing expense Profit before tax 109.5 18.4 127.9 Tax (10.9) - (10.9) Profit for the year 98.6 18.4 117.0 Geographic information Revenue is allocated to countries based on the location where the products andservices are provided. Non-current assets are allocated to countries based onthe location of the businesses to which the assets relate. Continuing revenue Restated Six six Year months months Ended ended ended 31 30 June 30 June December 2014 2013 2013 £m £m £m United Kingdom 52.3 54.2 83.6 Foreign countries United States and Canada 183.6 214.8 376.9 Europe 19.8 23.0 80.7 China 64.9 65.1 174.8 Other emerging markets* 31.5 26.3 62.3 Rest of the world 8.9 8.4 15.6 308.7 337.6 710.3 External revenue 361.0 391.8 793.9 * Emerging markets comprise the non-G10 countries - most notably for the Group:China, Brazil, India, Indonesia, Malaysia, Mexico, Saudi Arabia, Singapore,Thailand and Turkey. There are no revenues derived from a single external customer which aresignificant. Non-current assets 30 June 30 June 31 December 2014 2013 2013 £m £m £m United Kingdom 319.4 284.4 295.7 Foreign countries United States and Canada 473.9 534.7 480.7 Europe 21.4 22.6 22.2 China 30.2 34.3 32.8 Other emerging markets* 90.9 101.8 94.3 Rest of the world 5.6 6.4 5.8 622.0 699.8 635.8 Total non-current assets 941.4 984.2 931.5 Non-current assets for this purpose consist of goodwill, intangible assets,property, plant and equipment, investments in joint ventures and associates andother fixed asset investments. Discontinued operations The tables below show revenue and adjusted operating profit associated with UBMChannel and Built MS which were disposed in the comparative periods. Six months ended 30 June 2013 (restated) UBM Channel UBM Channel and Built MS and Built MS Adjusted Revenue operating profit £m £m Events 4.2 (0.2) Other Marketing Services 11.3 0.6 Total 15.5 0.4 Year ended 31 December 2013 UBM Channel UBM Channel and Built MS and Built MS Adjusted Revenue operating profit £m £m Events 8.0 1.4 Other Marketing 16.3 0.7Services Total 24.3 2.1 5. Other operating income 30 June 30 June 31 December 2014 2013 2013 £m £m £m Rental income 2.9 2.7 5.2 Disposal gains (Note 17) 5.2 - - Other income - 0.8 1.3 Other operating income 8.1 3.5 6.5 6. Exceptional operating items Certain items are recognised as exceptional items since, due to their nature orinfrequency, such presentation is relevant to an understanding of the Group'sfinancial statements. These items are not part of the Group's normal ongoingoperations. (Charged)/credited to continuing operating Six months Six months Yearprofit ended ended ended 30 June 30 June 31 December 2014 2013 2013 £m £m £m Acquisition costs on continuing business (0.4) (0.1) (0.8)combinations Aborted acquisition costs - (1.2) (1.2) Changes in estimates of contingent (0.6) 1.7 1.9consideration Exceptional items relating to acquisitions (1.0) 0.4 (0.1) Restructuring and business reorganisation - (9.6) (16.6) Global ERP and process outsourcing - - (8.6)implementation cost Other restructuring items - 2.5 2.5 Exceptional items relating to reorganisation - (7.1) (22.7)and restructuring Gain on disposals reported by associates 21.9 - - Exceptional items in share of results from 21.9 - -joint ventures and associates Impairment of goodwill and intangible assets - (3.7) (5.3) Impairment of assets - - (1.0) Impairment of joint ventures and associates (1.1) (1.5) (1.5) Impairment of joint venture loan note - (2.6) (2.6) Impairment charge (1.1) (7.8) (10.4) Total charged to continuing operating profit 19.8 (14.5) (33.2) Acquisition exceptional items Acquisition costs of £0.4m have been expensed as exceptional items, themajority of which has been paid in cash. For the six months ended 30 June 2014an exceptional charge of £0.6m was recognised relating to revised contingentconsideration estimates for prior year acquisitions. Exceptional items in joint ventures and associates PA Group, the parent company of the Press Association, sold its weatherforecasting business, MeteoGroup in January 2014. The Group accounts for its17% interest in PA Group as an associate. The Group as recognised its share ofthe gain on disposal of £21.9m as an exceptional item. Impairment The Group has reviewed the carrying value of goodwill and intangible assets inlight of current trading conditions and future outlook. As a result of thisreview, impairment charges for the Group's investments in Beijing Zhong Wen FaInternational Cultural Exchange Co. Limited and Cosmoprof Shanghai ExhibitionsLimited of £0.9m and £0.2m respectively have been recognised. The taxation effect of the exceptional items reported above on the amountscharged to the income statement is £nil. 7. Net financing expense Six months Six months Year ended ended ended 30 June 30 June 31 December 2014 2013 2013 £m £m £m Financing expense Borrowings and loans (12.4) (13.9) (26.5) Other (0.2) - (0.4) Total interest expense for financial (12.6) (13.9) (26.9)liabilities not classified at fair valuethrough profit or loss Pension schemes net finance expense (0.3) (0.9) (1.7) Net loss on financial instruments at fair - (0.3) (1.1)value through profit or loss Ineffective portion on net investment hedges - (0.4) - Other fair value movements (0.8) (2.0) (2.4) Financing expense before exceptional items (13.7) (17.5) (32.1) Exceptional financing expense Fair value movement on put options over (2.6) (0.8) -non-controlling interests Total financing expense (16.3) (18.3) (32.1) Financing income Cash and cash equivalents 0.9 0.4 1.3 Vendor Loan Note 1.1 0.5 1.6 Total interest income 2.0 0.9 2.9 Net gain on financial instruments at fair 0.2 - -value through profit or loss Ineffective portion on net investment hedges 1.0 - 0.8 Foreign exchange gain on forward contracts - 2.7 1.0 Other fair value movements 0.6 1.7 1.9 Financing income before exceptional items 3.8 5.3 6.6 Exceptional financing income Fair value movement on put options over - - 4.1non-controlling interests Total financing income 3.8 5.3 10.7 Net financing expense (12.5) (13.0) (21.4) 8. Earnings per share Basic earnings per share is calculated by dividing net profit for the periodattributable to owners of the parent entity by the weighted average number ofordinary shares outstanding during the period. Adjusted basic earnings per share excludes amortisation of intangible assetsarising on acquisitions, deferred tax on amortisation of intangible assets,exceptional items and net financing expense adjustments. Diluted earnings per share is calculated by dividing net profit for the periodattributable to owners of the parent entity by the weighted average number ofordinary shares outstanding during the period plus the weighted average numberof ordinary shares that would be issued on conversion of all the dilutivepotential ordinary shares into ordinary shares. The impact of dilutivesecurities in the six months ended 30 June 2014 would be to increase weightedaverage shares by 2.6 million shares (six months ended 30 June 2013: 4.9million shares; year ended 31 December 2013: 2.9 million shares). The weighted average number of shares excludes ordinary shares held by theEmployee Share Ownership Plan (the ESOP). Restated Six months ended Six months ended Year ended 30 June 2014 30 June 2013 31 December 2013 Continuing operations Earnings Earnings Earnings Earnings Earnings Earnings £m per £m per £m per share share share pence pence pence Adjusted Group operating 87.4 80.4 186.3profit Net interest expense (10.6) (13.0) (24.0) Pension schemes finance (0.3) (0.9) (1.7)expense Adjusted profit before tax 76.5 66.5 160.6 Tax (11.1) (7.7) (18.4) Non-controlling interests (5.9) (5.4) (9.5) Adjusted earnings per share 59.5 24.3 53.4 21.8 132.7 54.2 Adjustments Amortisation of intangible (12.0) (4.9) (12.0) (4.9) (21.3) (8.6)assets arising onacquisitions Deferred tax on amortisation 4.2 1.7 3.5 1.4 6.6 2.7of intangible assets Exceptional items 19.8 8.1 (15.3) (6.2) (33.2) (13.6) Net financing (expense)/ (1.6) (0.7) 1.7 0.7 4.3 1.7income - other Basic earnings per share 69.9 28.5 31.3 12.8 89.1 36.4 Dilution Options - (0.3) - (0.2) - (0.4) Diluted earnings per share 69.9 28.2 31.3 12.6 89.1 36.0 Adjusted earnings per share 59.5 24.3 53.4 21.8 132.7 54.2(as above) Options - (0.3) - (0.4) - (0.6) Diluted adjusted earnings per 59.5 24.0 53.4 21.4 132.7 53.6share Six months ended Six months ended Year ended 30 June 2014 30 June 2013 31 December 2013 Total Group Earnings Earnings Earnings Earnings Earnings Earnings £m per £m per £m per share share share pence pence pence Adjusted Group operating 87.4 80.8 188.4profit Net interest expense (10.6) (13.0) (24.0) Pension schemes finance (0.3) (0.9) (1.7)expense Adjusted profit before tax 76.5 66.9 162.7 Tax (11.1) (7.7) (18.4) Non-controlling interests (5.9) (5.4) (9.5) Adjusted earnings per share 59.5 24.3 53.8 22.0 134.8 55.1 Adjustments Amortisation of intangible (12.0) (4.9) (12.3) (5.0) (21.6) (8.8)assets arising onacquisitions Deferred tax on amortisation 4.2 1.7 3.5 1.4 6.6 2.7of intangible assets Exceptional items 19.8 8.1 5.0 2.0 (16.6) (6.8) Net financing (expense)/ (1.6) (0.7) 1.7 0.7 4.3 1.7income - other Basic earnings per share 69.9 28.5 51.7 21.1 107.5 43.9 Dilution Options - (0.3) - (0.4) - (0.5) Diluted earnings per share 69.9 28.2 51.7 20.7 107.5 43.4 Adjusted earnings per share 59.5 24.3 53.8 22.0 134.8 55.1(as above) Options - (0.3) - (0.4) - (0.7) Diluted adjusted earnings per 59.5 24.0 53.8 21.6 134.8 54.4share 9. Dividends Six months Six months Year ended ended ended 30 June 30 June 31 December 2014 2013 2013 £m £m £m Declared and paid during the period Equity dividends on ordinary shares Second interim dividend for 2012 of 20.0p - 48.8 48.8 Interim dividend for 2013 of 6.7p - - 16.4 Final dividend for 2013 of 20.5p 50.3 - - 50.3 48.8 65.2 Proposed (not recognised as a liability at theend of the period) Equity dividends on ordinary shares Interim dividend for 2013 of 6.7p - 16.4 - Final dividend for 2013 of 20.5p - - 50.3 Interim dividend for 2014 of 6.8p 16.7 - - 10. 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 2014 2013* 2013* £m £m £m Net book value at 1 January 132.7 140.4 140.4 Acquired with subsidiaries 7.3 0.5 4.9 Additions 4.4 4.8 9.6 Intangible asset construction in progress 6.3 18.4 22.7 Disposals (0.4) (0.2) (3.5) Disposal of subsidiaries (1.2) - (2.2) Depreciation and amortisation (18.1) (18.8) (35.0) Impairment - (0.6) (2.5) Classified as held for sale (Note 16) - (2.4) - Currency translation (2.8) 8.0 (1.7) Net book value at 30 June/31 December 128.2 150.1 132.7 * Cash flow expenditure in the six months ended June 2013 of £10.1m (December2013: £16.3m) on intangible assets included £8.2m (December 2013: £12.5m)invested in the implementation of a group-wide finance and reporting system,reported within intangible asset construction in progress. The remaining £10.2mintangible asset construction in progress was reported in prepayments at 31December 2012. Capital expenditure contracted for but not provided in the financial statementsamounts to £10.6m (30 June 2013: £nil; 31 December 2013: £15.6m). 11. Movement in net debt 1 January Non-cash Exchange 30 June 2014 items Cash flow movement 2014 £m £m £m £m £m Cash and cash equivalents 74.0 - 25.9 (4.3) 95.6 Bank overdrafts - - (14.4) - (14.4) Net cash 74.0 - 11.5 (4.3) 81.2 Bank loans due in more than (61.4) - (24.8) 1.1 (85.1)one year Bonds due in more than one (469.1) 0.3 - 5.8 (463.0)year Borrowings (530.5) 0.3 (24.8) 6.9 (548.1) Derivative assets associated 14.4 (2.1) - 2.5 14.8with borrowings Derivative liabilities (1.3) 1.3 - - -associated with borrowings Net debt (443.4) (0.5) (13.3) 5.1 (452.1) The undrawn portion available under committed lending facilities at 30 June2014 is £214.9m (30 June 2013: £224.2m; 31 December 2013: £238.6m). 1 January Non-cash Exchange 30 June 2013 items Cash flow movement 2013 £m £m £m £m £m Cash and cash equivalents 86.9 - 12.0 5.3 104.2 Bank overdrafts (0.2) - (6.3) - (6.5) Net cash 86.7 - 5.7 5.3 97.7 Bank loans due in more than (178.3) - 106.2 (3.7) (75.8)one year Bonds due in more than one (482.8) 6.3 - (15.2) (491.7)year Borrowings (661.1) 6.3 106.2 (18.9) (567.5) Derivative assets associated 26.5 (6.7) - - 19.8with borrowings Derivative liabilities (5.5) (11.8) - - (17.3)associated with borrowings Net debt (553.4) (12.2) 111.9 (13.6) (467.3) 1 January Non-cash Exchange 31 December 2013 items Cash flow movement 2013 £m £m £m £m £m Cash and cash equivalents 86.9 - (11.5) (1.4) 74.0 Bank overdrafts (0.2) - 0.2 - - Net cash 86.7 - (11.3) (1.4) 74.0 Bank loans due in more than (178.3) - 117.8 (0.9) (61.4)one year Bonds due in more than one (482.8) 9.7 - 4.0 (469.1)year Borrowings (661.1) 9.7 117.8 3.1 (530.5) Derivative assets associated 26.5 (12.1) - - 14.4with borrowings Derivative liabilities (5.5) 1.5 2.7 - (1.3)associated with borrowings Net debt (553.4) (0.9) 109.2 1.7 (443.4) 12. Financial instruments Fair values of financial assets and financial liabilities Valuation techniques Valuation techniques use observable market data where it is available and relyas little as possible on entity specific estimates. The fair values of interest rate swaps and forward exchange contracts aremeasured using discounted cash flows. Future cash flows are based on forwardinterest/exchange rates (from observable yield curves/forward exchange rates atthe end of the reporting period) and contract interest/forward rates,discounted at a rate that reflects the credit risk of the counterparties. The fair value of the £250m 6.5% sterling bonds due 2016 and the $350m 5.75%dollar bonds due 2020 have been measured at the present value of future cashflows discounted using market rates of interest. The fair values of put options over non-controlling interests (includingexercise price) and contingent and deferred consideration on acquisitions aremeasured using discounted cash flows models with inputs derived from theprojected financial performance in relation to the specific criteria for eachacquisition, as no observable market data is available. The changes inestimates of put options over non-controlling interests are reported withinexceptional financing expense. The changes in estimates of contingent anddeferred consideration on acquisitions are reported within exceptionaloperating items. The fair values are most sensitive to the projected financialperformance of each acquisition; management makes a best estimate of theseprojections at each financial reporting date and regularly assesses a range ofreasonably possible alternatives for those inputs and determines their impacton the total fair value. An increase of 20% to the projected financialperformance used in the put option measurements would increase the aggregateliability by £4.3m. The fair value of the contingent and deferred considerationon acquisitions is not significantly sensitive to a reasonable change in theforecast performance. Carrying Fair amount value £m £m Financial assets at fair value through profit or loss Interest rate swaps 13.4 13.4 Forward exchange contracts 1.4 1.4 14.8 14.8 Financial liabilities at amortised cost £250m 6.5% sterling bonds due 2016 (99.6) (107.2) $350m 5.75% dollar bonds due 2020 (144.4) (154.2) Financial liabilities at fair value through profit or loss £250m 6.5% sterling bonds due 2016 (157.1) (167.8) $350m 5.75% dollar bonds due 2020 (61.9) (66.1) Put options over non-controlling interests (18.4) (18.4) Contingent and deferred consideration on acquisitions (2.9) (2.9) (484.3) (516.6) The fair values of all other financial assets and liabilities do not differfrom their carrying amounts. The accounting policy for each of the Group's financial instruments is detailedin the Annual Report and Accounts for the year ended 31 December 2013. Fair value hierarchy The fair value measurements at the reporting date are classified according tothe significance of the inputs used in making the measurements. The level inthe hierarchy within which the fair value is categorised is determined based onthe lowest level input that is significant to the fair value measurement in itsentirety. Level 1: quoted prices (unadjusted) in active markets for identical assets orliabilities. Level 2: inputs other than quoted prices included in level 1 that areobservable for the asset or liability, either directly (e.g. prices) orindirectly (e.g. derived from prices). Level 3: inputs for the assets or liabilities that are not based on observablemarket data. For financial assets and financial liabilities that are recognised at fairvalue in the financial statements on a recurring basis, the Group determineswhether transfers have occurred between Levels in the hierarchy by re-assessingcategorisation (based on the lowest level input that is significant to the fairvalue measurement as a whole) at the end of each reporting period. For the purpose of fair value disclosures, the Group has determined classes ofassets and liabilities on the basis of the nature, characteristics and risks ofthe asset or liability and the level of the fair value hierarchy as explainedabove. At 30 June 2014, the Group held the following classes of financial instrumentsmeasured at fair value. 30 June 2014 Level 1 Level 2 Level 3 £m £m £m £m Financial assets at fair valuethrough profit or loss Forward exchange contracts - hedged 1.4 - 1.4 - Interest rate swaps - hedged 10.7 - 10.7 - Interest rate swaps - not hedged 2.7 - 2.7 - Financial liabilities at fair valuethrough profit or loss £250m 6.5% sterling bonds due 2016 (157.1) - (157.1) - $350m 5.75% dollar bonds due 2020 (61.9) - (61.9) - Put options over non-controlling (18.4) - - (18.4)interests Contingent and deferred consideration (2.9) - - (2.9)acquisitions During the six months ended 30 June 2014 there were no transfers between Level1 and Level 2 fair value measurements, and no transfers into and out of Level 3measurements. There were no movements in Level 3 measurements reported in othercomprehensive income. Reconciliation of recurring level 3 fair value measurements: Put options Contingent over non- and deferred controlling consideration interests on acquisitions 30 June 2014 30 June 2014 £m £m At 1 January (15.6) (4.0) Acquisitions (Note 15) - (0.7) Consideration paid - 2.3 Changes in estimates (income statement) (2.6) (0.6) Currency translation (0.2) 0.1 At 30 June (18.4) (2.9) 13. Share capital 30 June 30 June 31 December 2014 2013 2013 Authorised £m £m £m 1,217,124,740 (30 June 2013: 1,217,124,740; 31December 2013: 1,217,124,740) ordinary shares of 121.7 121.7 121.710p each Issued and fully paid Ordinary Ordinary Shares shares Number £m At 1 January 2013 245,467,129 24.5 Issued in respect of share option schemes and 134,325 0.1other entitlements At 30 June 2013 245,601,454 24.6 Issued in respect of share option schemes and 159,133 -other entitlements At 31 December 2013 245,760,587 24.6 Issued in respect of share option schemes and 95,632 -other entitlements At 30 June 2014 245,856,219 24.6 Company share schemes As at 30 June 2014, the ESOP Trust holds 0.1m ordinary shares (30 June 2013:0.7m ordinary shares; 31 December 2013: 0.4m ordinary shares). 14. Other reserves Foreign currency Total Merger translation ESOP Other other reserve reserve reserve reserve reserves £m £m £m £m £m At 1 January 2014 (732.2) (42.3) (2.9) 125.3 (652.1) Total comprehensive income for - (12.8) - - (12.8)the period* Shares awarded by ESOP - - 6.8 - 6.8 Own shares purchased by the - - (4.9) - (4.9)Company At 30 June 2014 (732.2) (55.1) (1.0) 125.3 (663.0) At 1 January 2013 (732.2) (3.3) (8.3) 125.3 (618.5) Total comprehensive income for - (25.7) - - (25.7)the period** Shares awarded by ESOP - - 13.4 - 13.4 Own shares purchased by the - - (10.0) - (10.0)Company At 30 June 2013 (732.2) (29.0) (4.9) 125.3 (640.8) At 1 January 2013 (732.2) (3.3) (8.3) 125.3 (618.5) Total comprehensive income for - (39.0) - - (39.0)the period*** Shares awarded by ESOP - - 25.5 - 25.5 Own shares purchased by the - - (20.1) - (20.1)Company At 31 December 2013 (732.2) (42.3) (2.9) 125.3 (652.1) * The amount included in the foreign currency translation reserve for theperiod ended 30 June 2014 represents the currency translation difference onforeign operations on Group subsidiaries of £(21.3)m (excluding £(0.4)mrelating to non-controlling interests) and on net investment hedges of £8.5m. ** The amount included in the foreign currency translation reserve for theperiod ended 30 June 2013 represents the currency translation difference onforeign operations on Group subsidiaries of £30.5m (excluding £1.4m relating tonon-controlling interests), on net investment hedges of £(30.9)m on thereclassification adjustment for foreign operations disposed of £(26.0)m and onjoint ventures and associates of £0.7m. *** The amount included in the foreign currency translation reserve for theyear ended 31 December 2013 represents the currency translation difference onforeign operations on Group subsidiaries of £(19.5)m (excluding £(2.8)mrelating to non-controlling interests), on the reclassification adjustment forforeign operations disposed of £(26.0)m, on net investment hedges of £6.9m andon joint ventures and associates of £(0.4)m. Merger reserve The merger reserve is used to record entries in relation to certainreorganisations that took place in previous accounting periods. The majority ofthe 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.The return of the Company's tax residency to the United Kingdom in 2012 has hadno impact on these balances. 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 Trust to satisfyfuture share awards. The shares are recorded at cost. In the six months ended30 June 2014, 700,000 ordinary shares were purchased by the ESOP (six monthsended 30 June 2013: 1,425,000; year ended 31 December 2013: 2,855,000). 15. Acquisitions The Group has completed two acquisitions of Events companies in the six monthsended 30 June 2014. These acquisitions continue the Group's strategy ofexpansion through acquisition of Events and Events portfolios in growthmarkets. Details of the acquisitions made by the Group in the prior year areavailable in the Annual Report and Accounts for the year ended 31 December2013. On 9 May 2014, the Group acquired the business of Expo CIHAC (`CIHAC'), anannual construction event in Mexico for cash consideration of £9.9m plusdeferred consideration of £0.7m. On 17 June 2014, the Group acquired the business of Abastur, an annual hotel,restaurant and catering event in Mexico for cash consideration of £6.1m. Thefigures reported below for Abastur have been disclosed on a provisional basis. The fair value of the identifiable assets and liabilities acquired in respectof acquisitions in 2014 was: All acquisitions 2014 £m Intangible assets 7.3 Trade and other receivables 1.2 Total assets 8.5 Trade and other payables (1.5) Total liabilities (1.5) Identifiable net assets acquired 7.0 Goodwill arising on acquisition 9.7 16.7 Trade and other receivables acquired have been measured at fair value which isthe gross contractual amounts receivable. All amounts recognised are expectedto be collected. The goodwill of £9.7m recognised relates to certain intangibleassets that cannot be individually separated. These include items such ascustomer loyalty, market share, skilled workforce and synergies expected toarise after the acquisition completion. All of the goodwill arising is expectedto be deductible for tax purposes. The intangible assets acquired as part of the acquisitions were: All acquisitions 2014 £m Brands 3.9 Order backlog 1.2 Customer contracts and relationships 2.0 Databases 0.2 Total 7.3 Cash flow effect of acquisitions The aggregate cash flow effect of the acquisitions was as follows: 30 June 2014 £m Net cash acquired with subsidiaries - Cash paid to acquire subsidiaries 16.0 Net cash outflow on 2014 acquisitions 16.0 Payment of contingent consideration on prior 2.3year acquisitions Payment of deferred consideration on prior year -acquisitions Total cash outflow on acquisitions 18.3 None of the contingent consideration payments are individually material. 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 2014acquisitions is £nil (maximum remaining for 2013, 2012 and 2011 acquisitions is£3.6m, £2.0m and £1.5m respectively). The contingent consideration for eachacquisition made during the period is based on the terms set out in therelevant purchase agreements. The movement in the contingent and deferred consideration payable during theperiod is disclosed in Note 12. Acquisition performance From the dates of acquisition to 30 June 2014, the acquisitions completed in2014 contributed a loss of £0.1m to operating profit and £nil to revenue of theGroup. If the acquisitions had taken place at the beginning of 2014,the acquisitionswould have contributed a loss of £0.3m to operating profit and £nil to revenue of the Group. 16. Discontinued operations and assets held for sale There are no reported discontinued operations in the six months ended 30 June2014. As disclosed in Note 2, the Group classified the UBM Channel business,Built MS and the Delta businesses as discontinued operations during the yearended 31 December 2013. The results of the discontinued operations which have been included in theconsolidated income statement and consolidated statement of cash flows are asfollows: Six months ended 30 June 2013 (restated) UBM Channel and Built MS Delta Total £m £m £m Revenue 15.5 - 15.5 Operating expenses (15.1) - (15.1) Adjusted operating profit from discontinued 0.4 - 0.4operations Amortisation of intangible assets arising on (0.3) - (0.3)acquisitions Exceptional operating items 0.3 - 0.3 Operating profit from discontinued operations 0.4 - 0.4 Financing income - - - Financing expense - - - Profit before tax attributable to discontinued 0.4 - 0.4operations Attributable tax - - - Profit after tax from discontinued operations 0.4 - 0.4 Loss on assets held for sale (5.6) - (5.6) Profit on disposal - 25.6 25.6 Attributable tax - - - (Loss)/profit for the period from discontinued (5.2) 25.6 20.4operations Earnings per share for discontinued operations Basic 8.3p Diluted 8.1p Net cash flows attributable to discontinuedoperations Net cash from operating activities 0.4 Net cash from investing activities (11.6) Net cash from financing activities (0.3) Net cash flows attributable to discontinued (11.5)operations The loss on assets held for sale reflects an impairment of UBM Channel goodwillof £5.6m. The classification as held for sale requires assets and liabilitiesto be measured at the lower of their carrying amounts and fair value less coststo sell. Year ended 31 December 2013 UBM Channel and Built MS Delta Total £m £m £m Revenue 24.3 - 24.3 Operating expenses (22.2) - (22.2) Adjusted operating profit from discontinued 2.1 - 2.1operations Amortisation of intangible assets arising on (0.3) - (0.3)acquisitions Exceptional operating items 0.3 - 0.3 Operating profit from discontinued operations 2.1 - 2.1 Financing income - - - Financing expense - - - Profit before tax attributable to discontinued 2.1 - 2.1operations Attributable tax - - - Profit after tax from discontinued operations 2.1 - 2.1 (Loss)/profit on disposal (4.2) 20.5 16.3 Attributable tax - - - (Loss)/profit for the year from discontinued (2.1) 20.5 18.4operations Earnings per share for discontinued operations Basic 7.5p Diluted 7.4p Net cash flows attributable to discontinuedoperations Net cash from operating activities 1.4 Net cash from investing activities (12.2) Net cash from financing activities (1.2) Net cash flows attributable to discontinued (12.0)operations Assets held for sale measured at the lower of their carrying amounts and fairvalue less costs to sell UBM Channel Delta and Built MS Delta Total Delta 30 June 30 June 30 June 30 June 31 December 2014 2013 2013 2013 2013 £m £m £m £m £m Goodwill - 5.6 - 5.6 - Intangible assets - 2.0 - 2.0 - Property, plant and equipment 0.1 0.3 0.1 0.4 0.1 Trade and other receivables 0.8 7.5 0.9 8.4 0.8 Cash and cash equivalents - - 0.5 0.5 - Assets classified as held for 0.9 15.4 1.5 16.9 0.9sale Trade and other payables (0.4) (8.4) (0.6) (9.0) (0.4) Current tax liability - - - - - Liabilities associated with (0.4) (8.4) (0.6) (9.0) (0.4)assets classified as held forsale Net assets classified as held for 0.5 7.0 0.9 7.9 0.5sale 17. Disposals Initial and Gain 2014 deferred on disposal consideration disposalDisposal date Activity Segment £m £m International 1 January Customer Events 0.3 0.2Customer managementManagement consultingInstitute (ICMI) Pyramid Research 1 January Telecoms research Other 2.0 0.1 Marketing Services Light Reading 31 January Telecoms marketing Other 9.2 4.8 and research Marketing Services Pharmalive 1 May Publications Other 0.1 0.1 database Marketing Services 11.6 5.2 None of the above disposals are classified as discontinued operations. The following table sets out the aggregate effect of the disposals on theGroup's assets and liabilities: 30 June 2014 £m Goodwill (5.9) Intangible assets (1.2) Trade and other receivables (3.9) Total assets (11.0) Trade and other payables 1.3 Total liabilities 1.3 Identifiable net assets (9.7) Costs associated with disposal (0.3) Fair value of retained interest 3.6 Profit on disposal (5.2) Consideration received 11.6 Vendor financing (7.4) Less deferred consideration (0.2) Net cash inflow 4.0 18. Retirement benefit obligations The Group operates funded 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 2014 for accounting purposes byindependent qualified actuaries. The amounts recognised in the income statement were as follows: Six months Six months Year ended ended ended 30 June 30 June 31 December 2014 2013 2013 £m £m £m Current service cost 0.2 0.4 0.4 Administration cost 0.2 0.6 0.8 Settlement (gain)/loss (5.8) - 0.6 Curtailments - (1.9) (1.9) Interest cost 0.3 0.9 1.7 Total pension (income)/expense (5.1) - 1.6 On 30 December 2013, the three main UK schemes (the United Pension Plan, theUnited Magazines Final Salary Scheme and the defined benefit section of theUnited Group Pension Scheme) were merged into the new UBM Pension Scheme.Members of the former schemes were offered the chance to take up a winding-uplump sum in lieu of pension benefits. As the amounts paid were less than theaccounting reserve held in respect of the liabilities that were extinguished, aresulting settlement gain of £5.8m has been recognised. This gain has beenreported within Corporate operations. The amounts recognised in the balance sheet were as follows: 30 June 30 June 31 December 2014 2013 2013 £m £m £m Fair value of plan assets 469.3 485.0 472.9 Present value of defined benefit obligations (490.7) (502.5) (496.9) Irrecoverable element of pension surplus (2.1) (7.2) (1.9) Net deficit in the statement of financial (23.5) (24.7) (25.9)position Retirement benefit surplus 4.0 13.4 3.4 Retirement benefit obligation (27.5) (38.1) (29.3) Net deficit in the statement of financial (23.5) (24.7) (25.9)position 19. Share-based payments The Group's management awards share options to directors and employees, fromtime to time, on a discretionary basis. During the six months ended 30 June2014, the Group awarded 2,282,413 (six months ended 30 June 2013: 2,515,567;year ended 31 December 2013: 2,856,693) shares under the Group's shareincentive plans. 20. 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 2014(30 June 2013; £nil; 31 December 2013: £nil), and no related party transactionshave been written off during the period. Unless otherwise stated above, thereare no amounts owed by or due to related parties by the Group at 30 June 2014. The Group entered into the following transactions with related parties duringthe period: Balances Balances Balances (owed by)/ (owed by)/ (owed by)/ due to due to due to the Group at Value of the Group at Value of the Group at Value of 30 June transactions 30 June transactions 31 December transactionsRelated party and Nature of 2014 H1 2014 2013 H1 2013 2013 FY 2013relationship transactions £m £m £m £m £m £m GML Exhibitions Advances and 0.1 0.1 0.4 -* 0.6 0.6(Thailand) Co managementLimited - Joint feesVenture Guangzhou Beauty Commission - - 0.2 - 0.2 -Fair - Joint andVenture management fees Guzhen Lighting Advances 0.2 - - - - -Expo CompanyLimited - JointVenture The Channel Company Management 0.2 0.1 - - - -- Associate fees * Transactions and balances (owed by)/due to the Group less than £0.1m. During the period, Leaders Quest, a non-profit organisation, organised variousmanagement conferences for the Group for fees of £nil (30 June 2013: £60,000;31 December 2013: £61,500). Lindsay Levin, wife of David Levin, Chief ExecutiveOfficer of the Group until 1 March 2014, is a partner of Leaders Quest. 21. Events after the balance sheet date On 23 July 2014, the Group received a special dividend payment of £10.2m fromPA Group Limited in relation to the disposal of MeteoGroup disclosed in Note 6. On 31 July 2014, the Group acquired 100% of the equity of SeatradeCommunications Limited, a global maritime events and publishing business, forcash consideration of £3.8m and deferred consideration of £0.5m subject toworking capital adjustments. The net assets acquired are subject tofinalisation. Statement of directors' responsibilities The directors confirm that the interim condensed consolidated financialstatements for the period ended 30 June 2014, as required by Rule 4.2.4R of theDisclosure and Transparency Rules of the United Kingdom Financial ConductAuthority (`DTR'): * have been prepared in accordance with IAS 34 as issued by the International Accounting Standards Board; and * give a true and fair view of the assets, liabilities, financial position and profit of the Group. The directors also confirm that the interim management report herein includes afair review of the information required by Rules 4.2.7R and 4.2.8R of the DTR. The directors of UBM plc are listed on the UBM plc website: www.ubm.com. By order of the Board Robert A. Gray Chief Financial Officer 01 August 2014 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 June2014 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 21.We have read the other information contained in the half yearly financialreport and considered whether it contains any apparent misstatements ormaterial inconsistencies with the information in the condensed set of financialstatements. 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 extent permittedby law, we do not accept or assume responsibility to anyone other than thecompany, for our work, for this report, or for the conclusions we have formed. Directors' Responsibilities The 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 Conduct Authority. As disclosed in note 2, the annual financial statements of the Group areprepared in accordance with IFRSs as issued by the International AccountingStandards Board (`IASB'). The condensed set of financial statements included inthis half-yearly financial report has been prepared in accordance withInternational Accounting Standard 34, "Interim Financial Reporting", as issuedby the IASB. Our Responsibility Our 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 2014 is not prepared, in allmaterial respects, in accordance with International Accounting Standard 34 asissued by the IASB and the Disclosure and Transparency Rules of the UnitedKingdom's Financial Conduct Authority. Ernst & Young LLPLondon01 August 2014