Preliminary Results

Euromoney

Institutional

Investor PLC

Preliminary Announcement

September 30 2012

EMBARGOED - NOT FOR RELEASE UNTIL 7am on 15/11/12

November 14 2012

EUROMONEY INSTITUTIONAL INVESTOR PLC

RESULTS FOR THE YEAR TO SEPTEMBER 30 2012

Chairman's Statement

·; Revenues increased by 9% to £394.1m

·; Adjusted profit before tax up 15% to £106.8m

·; Adjusted operating margin maintained at 30% with continued investment in new products and technology

·; Subscriptions account for more than 50% of revenues for the first time

·; Net debt reduced by £88.4m reflecting strong cash flows and operating cash conversion

·; Final dividend increased by 18% to 14.75p

·; First quarter trading has started in line with board's expectations

·; Uncertain macro-economic trading outlook, especially for advertising

Commenting on the results, chairman Richard Ensor said:

"The record results for the year reflect the challenging market conditions as well as the successful implementation of our strategy. Investment in online information businesses and emerging markets has created a global portfolio with a resilient business model. Subscription revenues now account for more than 50% of group revenues, and more than a third of our revenues is derived from emerging markets.

"In 2013, we will continue to invest in our products to ensure that we are well placed to benefit from any improvement in the global economy."

Highlights

Euromoney Institutional Investor PLC, the international online information and events group, achieved a record adjusted profit before tax of £106.8m for the year to September 30 2012, against £92.7m in 2011. Adjusted diluted earnings a share were 65.9p (2011: 56.1p). The directors recommend an 18% increase in the final dividend to 14.75p, giving a total for the year of 21.75p (2011: 18.75p), to be paid to shareholders on February 14 2013.

Total revenues for the year increased by 9% to £394.1m. Underlying revenues, excluding acquisitions, increased by 3%. The acquisition of Ned Davis Research (NDR) in August 2011 has helped increase the proportion of revenues generated from subscriptions to more than 50% for the first time. Headline subscription revenues increased by 17% to £199.7m and underlying subscriptions, excluding NDR, by 5%.

The adjusted operating margin was unchanged at 30%. Costs, particularly headcount, have remained tightly controlled throughout the year. At the same time, the group has increased its investment in technology and new products as part of its online growth strategy.

Net debt at September 30 was £30.8m compared with £88.5m at March 31 and £119.2m at September 30 2011. In the absence of any significant acquisitions, net debt has fallen by £88.4m since the start of the year, reflecting the group's strong cash flows and an operating cash conversion rate* in excess of 100%. The group's net debt is now at its lowest level for more than a decade and its robust balance sheet provides plenty of headroom for the group to pursue its acquisition strategy.

As highlighted in previous trading updates, market conditions became noticeably tougher from June. The uncertainty over Europe remains, as does a solution to the pending US fiscal cliff. Meanwhile global financial institutions face the combined challenges of difficult markets, increased capital requirements and a tougher regulatory environment. Inevitably they have responded by cutting costs, particularly people, and exiting some parts of their business. However, the outlook for emerging markets, which account for more than a third of the group's revenues, is more positive. The board expects this challenging trading background to continue at least into the early part of 2013.

Strategy

The group's strategy remains the building of a robust and tightly focused global online information business with an emphasis on emerging markets. This strategy is being executed through increasing the proportion of revenues derived from electronic subscription products; using technology efficiently to assist the online migration of the group's print products as well as developing new electronic information services; investing in products of the highest quality; eliminating products with a low margin or too high a dependence on print advertising; maintaining tight cost control at all times; retaining and fostering an entrepreneurial culture; and using a healthy balance sheet and strong cash flows to fund selective acquisitions.

Driving revenue growth from existing as well as new products is a key part of the group's strategy. Since 2010, the group has been investing heavily in technology and content delivery platforms, particularly for the mobile user, and in new digital products as part of its transition to an online information business. In 2012, as in 2011, the group spent approximately £10m on this transition. This level of expenditure is expected to continue in 2013. In addition, the group has recently started work on a project to build a new platform for authoring, storing and presenting its content, with a view to both improving the quality of its existing subscription products and increasing the speed to market of new online information services. This project is expected to have a capital cost of approximately £6m in 2013.

Acquisitions remain a key part of the group's strategy. The most recent was the purchase of Global Grain for £5.7m in February. Global Grain's main asset, Global Grain Geneva, is the world's leading event for international grain traders. The event is held in November each year and is on track to exceed last year's attendance by at least 10%, while an event for the Asia-Pacific region was launched successfully in March and two further new events are planned for 2013.

While the market for acquisitions of specialist online information businesses remains competitive and valuations challenging, the group will continue to use its robust balance sheet and strong cash flows to pursue further transactions in 2013.

Trading Review

Total revenues for the year increased by 9% to £394.1m. After a 13% increase in the first half, the headline rate of revenue growth dropped to 5% in the second as markets became tougher and the impact of the acquisition of NDR in August 2011 diminished. Underlying revenues, excluding NDR, increased by 1% in the second half against 6% in the first.

Subscriptions increased by 17% to nearly £200m and accounted for more than half the group's revenues for the first time. Underlying subscription revenues, excluding NDR, increased by 5%, with the growth driven largely by the group's electronic information services such as BCA Research and CEIC Data.

The 7% fall in advertising revenues reflects two very different trends. Financial titles have experienced falls of as much as 20% in the face of deep cuts by global financial institutions. But this has been partly offset by increases in online advertising, a greater appetite for print advertising from emerging markets and growth in advertising from sectors outside finance, particularly energy.

Event revenues broadly comprise an equal mix of sponsorship and paying delegates. Event sponsorship, which is heavily financial market focussed, has suffered in a similar way to advertising, although to a lesser degree. Events, particularly those outside the financial sector which tend to be more delegate driven, performed well in the first half but growth has been more difficult to achieve in the second and some smaller events were cut.

The group derives nearly two thirds of its total revenue in US dollars and movements in the sterling-US dollar rate can have a significant impact on reported revenues. However, this was not the case in 2012 and headline revenue growth rates are similar to those at constant currency (see table above).

The group's adjusted operating margin was 30.0%, the same as 2011. The increased spend on technology and digital products has reduced margins in the publishing businesses, while in the research and data division margins have improved following investments made in the previous two years. In the face of challenging markets, costs and margins have remained tightly controlled throughout the year. Permanent headcount at September 30 was 2,133 against 2,111 a year ago, with most of the increase coming in the second half. The average headcount (including temporary staff) increased by 3% during the year, mostly due to the acquisition of NDR at the end of 2011.

Business Review

Financial Publishing: revenues fell by 8% to £77.1m and adjusted operating profits by 12% to £24.9m. Advertising, which accounts for approximately half the division's revenues, has been under pressure all year from cuts in spend by global financial institutions as well as a gradual shift away from print advertising across the sector. As a result, financial advertising fell by 13%, although the impact of more severe cuts by Wall Street banks was offset by a stronger performance from emerging markets which helped sustain titles such as Euromoney and Asiamoney. Revenues from subscription products were flat, helped by the launch of new products.

Business Publishing: the group's activities outside finance cover a number of sectors including metals, commodities, energy, telecoms and law, and provide a strong counter balance to the more volatile financial publishing division. Revenues increased by 9% to £64.6m and adjusted operating profits by 5% to £24.5m, with growth achieved from both advertising, particularly in the energy sector, and subscriptions, for which Metal Bulletin is the biggest driver. This year is the first that profits from Business Publishing have been similar to those from Financial Publishing.

Training: the group's training division predominantly serves the global financial sector. However, more than half its revenues are derived from emerging markets, and this has helped mitigate the impact of cuts in bank headcount and training budgets. Training revenues fell by 4% to £31.2m and adjusted operating profits by 11% to £7.0m. The decline in operating margin from 24% to 22% was largely due to the completion at the end of 2011 of a long-term training contract in Asia, and the margin in the second half recovered to 25%.

Conferences and Seminars: revenues comprise both sponsorship and paying delegates and increased by 7% to £92.3m, with adjusted operating profits up 9% to £29.0m. After a strong first half, markets became more challenging during the third quarter, the most important of the year for the events businesses. Financial market events, with a heavy emphasis on sponsorship revenues, have been under pressure from cost cutting among global financial institutions. In contrast, events in sectors outside finance, particularly in the commodities and energy sectors, have performed better. The division also generates nearly 20% of its revenues from subscriptions to membership organisations for the asset management industry, and these have continued to grow, helped by a significant investment in Institutional Investor's Investor Intelligence Network, a private online community for senior executives from institutional investors and asset owners worldwide.

Research and Data: revenues are derived predominantly from subscriptions and increased by 25% to £130.3m. Underlying growth, excluding NDR, was 6%. The trends seen in the first half have continued, with the main drivers of growth being BCA, the group's independent macroeconomic research house, CEIC, the emerging market data provider, and the capital market databases run as a joint venture with Dealogic. Renewal rates for all these products have held up well, although new sales have been harder to generate. Adjusted operating profits increased by 30% to £55.4m including a £9.0m contribution from NDR.

Financial Review

The adjusted profit before tax of £106.8m compares to a statutory profit before tax of £92.4m. A detailed reconciliation of the group's adjusted and statutory results is set out in the appendix to this statement. The statutory profit is generally lower than the adjusted profit before tax because of the impact of acquired intangible amortisation. Exceptional charges of £1.6m (2011: £3.3m) were incurred, mainly as a result of the restructuring of one of the group's businesses.

The long-term incentive expense of £6.3m (2011 £9.5m before additional accelerated expense of £6.6m) relates largely to the amortisation of the £30m cost of the company's CAP scheme. The reduction in this year's expense partly reflects the acceleration of cost last year following the earlier than expected vesting of CAP 2010 (see below), as well as a credit of £1.8m for options lapsing under CAP 2004. This early vesting means the CAP 2010 expense for 2013 is expected to fall to approximately £2.0m.

Adjusted net finance costs for the group's committed borrowing facility fell by £1.6m to £5.6m, reflecting the rapid reduction in net debt, most of it in the second half. The average cost of funds for the year fell to 4.8% (2011: 5.7%) as the group's cheaper floating rate debt comprised a higher portion of total debt following the acquisition of NDR.

Statutory net finance costs of £3.6m (2011: £9.6m) include a £2.9m credit for the reduction in the expected consideration payable under the option agreement to acquire the outstanding 15% minority interest in NDR. The group acquired 85% of NDR for £68.5m in August 2011 and the integration with the rest of the group, including the consolidation of the back office functions, the restructuring of the sales teams and the opening of a sales office in London was completed according to plan. However, it has taken longer than expected to convert the business to the standard subscription model used by BCA, and to expand the sales team. This, combined with difficult markets in the US, has meant that the revenue growth from NDR in 2012 has been less than that expected at the time of acquisition, although the outlook for growth in 2013 and beyond remains positive. As a result, the expected amount payable under the NDR earn-out arrangement has fallen to £7.9m, of which £4.3m is payable in 2013.

The adjusted effective tax rate for the year was 22% against 26% in 2011. The tax rate depends on the geographic mix of profits and the group has benefited this year from the reduction in the UK corporate tax rate from 26% to 24%. The effective tax rate has also benefited from an increase in the tax deduction for goodwill amortisation on acquisitions in the US, following the purchase of NDR. The UK tax rate will fall to 23% in April 2013, although this benefit will be more than offset by the expiry of the US tax deduction for goodwill amortisation from the acquisition of Institutional Investor 15 years ago.

The group continues to generate two thirds of its revenues, including approximately 30% of the revenues from its UK businesses, and more than half its operating profits in US dollars. The group hedges its exposure to the US dollar revenues in its UK businesses by using forward contracts to sell surplus US dollars. This delays the impact of movements in exchange rates for at least a year. The group does not hedge the foreign exchange risk on the translation of overseas profits, although it does endeavour to match foreign currency borrowings with investments and the related foreign currency finance costs provide a partial hedge against the translation of overseas profits. The translation impact on overseas profits of a one cent movement in the average US dollar exchange rate is approximately £0.5m on an annualised basis. The average sterling-US dollar rate for the year was $1.58 (2011: $1.61) which increased operating profits by approximately £1.5m, most of it in the second half.

Net Debt, Cash Flow and Dividend

Net debt at September 30 was £30.8m compared with £88.5m at March 31, and has fallen by £88.4m since the start of the year. The group's net debt is now at its lowest level since the acquisition of Institutional Investor in 1997. The sharp fall in net debt during the year was helped by the offer of the scrip dividend alternative and the absence of any significant acquisitions. Cash generated from operations increased by £4.2m to £122.2m and the operating cash conversion rate* was 103% (2011: 108%). For 2013, the ending of the scrip dividend, combined with the £7.5m cash payment following the vesting of the first tranche of CAP options and an increase in technology capital expenditure, will reduce the group's free cash flows.

The group's debt is provided through a $300m (£190m) dedicated multi-currency committed facility from its parent company, Daily Mail and General Trust plc (DMGT). This facility expires in December 2013, after which the group has the option to access a further $300m facility from DMGT for the period through April 2016. The option to take up this facility must be exercised by November 2013.

The company's policy is to distribute a third of its after-tax earnings by way of dividends each year. Pursuant to this policy, the board recommends a final dividend of 14.75p a share (2011: 12.50p) giving a total dividend for the year of 21.75p a share (2011: 18.75p). Last year the additional accelerated CAP expense of £6.6m was not charged against earnings for dividend purposes. As explained at the time, this expense would instead be charged against earnings for dividend purposes over the period to which it originally related. Accordingly, earnings for dividend purposes were reduced by £1.1m in 2012, and will be similarly reduced by £4.0m in 2013 and £1.5m in 2014.

The final dividend will be paid on February 14 2013 to shareholders on the register at November 23 2012. As announced at the time of the interim results, acceptance levels for the scrip dividend alternative have been low and the company will no longer be offering a scrip dividend.

Capital Appreciation Plan (CAP)

The CAP is the group's long-term incentive scheme designed to retain and reward those who drive profit growth and is an integral part of the group's successful growth and investment strategy.

The terms of CAP 2010 broadly required an adjusted profit before tax (and before CAP expense) of £100m to be achieved, from a base profit of £62.3m in 2009, within the four year period ending in September 2013. The strong financial performance of the group meant the initial CAP profit target was achieved in 2011, two years earlier than expected. The CAP profit target for 2012 was increased to £105m following the acquisition of NDR, and this target has also been achieved.

Although the CAP profit target was first achieved in 2011, the rules of the plan prevent CAP options from vesting more than one year early. Individual CAP awards were therefore based on the profits for 2012, creating a strong incentive for profit growth this year. Accordingly, the first 50% of CAP awards will vest in February 2013 and be satisfied by the issue of approximately 3.5 million new ordinary shares and £15m in cash. The second 50% of CAP awards is subject to an additional performance test for 2013 and will vest in February 2014 provided the additional performance test is satisfied, thereby providing further incentive for profit growth in 2013.

The board believes the CAP has been an important driver of the fivefold increase in the group's profits since it was introduced in 2004. Subject to shareholder approval, the board expects to put a new long-term incentive plan in place from 2014.

Management

On October 15 2012, the company announced the sad news of the death of its chairman, Padraic Fallon, after a long battle with cancer. He had worked for the company for nearly 40 years and been executive chairman since 1992.

Mr Fallon had already announced his intention to retire at the AGM in January 2013, and a succession plan was announced in August after consultation with shareholders. Under this plan, I would assume the role of executive chairman and Christopher Fordham, an executive director since 2003 and the director responsible for the group's acquisition strategy, would take over my responsibilities as managing director. This succession plan has now been implemented. Further changes to the board are anticipated over the next few months, including the appointment of at least one new independent non-executive director.

Outlook

The uncertainty over Europe remains, as does a solution to the pending US fiscal cliff. Meanwhile global financial institutions face the combined challenges of difficult markets, increased capital requirements and a tougher regulatory environment. Inevitably they have responded by cutting costs, particularly people, and exiting some parts of their business. The board expects this challenging trading background to continue at least into the early part of 2013.

Subscriptions account for half the group's revenues and therefore provide some protection against weak markets in 2013, as does the group's reliance on emerging markets for more than a third of its revenues. However, the negative trends in advertising and delegate revenues in the last quarter are expected to continue into the first quarter of financial year 2013, although the outlook for event sponsorship is more positive. First quarter trading has started in line with the board's expectations but as usual at this time, forward revenue visibility beyond the first quarter is limited, other than for subscriptions.

For 2013, the group plans to continue its programme of investing in the digital transformation of its publishing businesses and in improving the quality of its products. The board is confident its strategy for investing in new products and digital publishing and using its strong balance sheet to fund acquisitions, its exposure to emerging markets, and its tight control of operating costs will continue to sustain it through these difficult market conditions. As the world economy begins an albeit slow recovery, financial and other markets will also gradually improve, enhancing our prospects.

Richard Ensor

Chairman

November 14 2012

\* The operating cash conversion rate is the percentage by which cash generated from operations covers adjusted operating profit.

END

For further information, please contact:

Euromoney Institutional Investor PLC

Richard Ensor, Chairman: +44 20 7779 8845; [email protected]

Christopher Fordham, Managing Director: +44 20 7779 8845; [email protected]

Colin Jones, Finance Director: +44 20 7779 8845; [email protected]

FTI Consulting

Charles Palmer: +44 20 7269 7180; [email protected]

NOTE TO EDITORS

Euromoney Institutional Investor PLC (www.euromoneyplc.com) is listed on the London Stock Exchange and a member of the FTSE-250 share index. It is a leading international business-to-business media group focused primarily on the international finance, metals and commodities sectors. It publishes more than 70 titles in both print and on-line format including Euromoney, Institutional Investor and Metal Bulletin, and is a leading provider of electronic research and data under the BCA Research, Ned Davis Research and ISI Emerging Markets brands. It also runs an extensive portfolio of conferences, seminars and training courses for financial markets. The group's main offices are in London, New York, Montreal and Hong Kong and more than a third of its revenues is derived from emerging markets.

Appendix to Chairman's Statement

Reconciliation of Consolidated Income Statement to adjusted results for the year ended September 30 2012

The reconciliation below sets out the adjusted results of the group and the related adjustments to the statutory Income Statement that the directors consider necessary in order to provide an indication of the adjusted trading performance.

Adjusted figures are presented before the impact of amortisation of acquired intangible assets (comprising trademarks and brands, databases and customer relationships), the additional accelerated long-term incentive expense, restructuring and other exceptional operating costs, movements in acquisition deferred consideration, and net movements in acquisition option commitment values. In respect of earnings, adjusted amounts reflect a tax rate that includes the current tax effect of the goodwill and intangible assets.

Further analysis of the adjusting items is presented in notes 3, 4, 5, 6, 8 and 10 to the Preliminary Statement.

Consolidated Income Statement

for the year ended September 30 2012

Consolidated Statement of Comprehensive Income

for the year ended September 30 2012

Consolidated Statement of Financial Position

as at September 30 2012

Consolidated Statement of Changes in Equity

for the year ended September 30 2012

The investment in own shares is held by the Euromoney Employees' Share Ownership Trust (ESOT). At September 30 2012 the ESOT held 58,976 shares (2011: 58,976 shares) carried at a historic cost of £1.25 per share with a market value of £454,000 (2011: £363,000). The trust waived the rights to receive dividends. Interest and administrative costs are charged to the profit and loss account of the ESOT as incurred.

The other reserve represents the share premium arising on the shares issued for the purchase of Metal Bulletin plc in October 2006.

Consolidated Statement of Changes in Equity

for the year ended September 30 2011

Consolidated Statement of Cash Flows

for the year ended September 30 2012

Note to the Consolidated Statement of Cash Flows

Notes to the Preliminary Statement

1 Basis of preparation

The financial information set out in this announcement is based on the group's financial statements which are prepared in accordance with International Financial Reporting Standards as adopted for use in the EU. This financial information does not constitute the group's statutory accounts for the year ended September 30 2012 or 2011 but is derived from those accounts. Statutory accounts for 2011 have been delivered to the Registrar of Companies, and those for 2012 will be delivered following the company's annual general meeting. The auditors have reported on those accounts; their report was unqualified and did not draw attention to any matters by way of emphasis without qualifying their report and did not contain a statement under s498 (2) or (3) Companies Act 2006.

Going concern, debt covenants and liquidity 

The results of the group's business activities, together with the factors likely to affect its future development, performance and financial position are set out in the Chairman's Statement..

The financial position of the group, its cash flows and liquidity position are set out in detail in this report. The group meets its day-to-day working capital requirements through its US$300 million dedicated multi-currency borrowing facility with Daily Mail and General Trust plc group (DMGT). The facility is divided into US dollar and sterling funds with a total maximum borrowing capacity of US$250 million (£155 million) and £33 million respectively and matures in December 2013. The facility's covenant requires the group's net debt to be no more than four times adjusted EBITDA on a rolling 12 month basis. At September 30 2012, the group's net debt to adjusted EBITDA covenant was 0.27 times and the committed undrawn facility available to the group was £144.7 million.

In addition, the group has agreed terms with DMGT that provide it with access to US$300 million of funding should the group require it during the period from December 2013 through April 2016.

The group's forecasts and projections, looking out to September 2015 and taking account of reasonably possible changes in trading performance, show that the group should be able to operate within the level and covenants of its current borrowing facility.

After making enquiries, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the directors continue to adopt the going concern basis in preparing this annual report.

2 Segmental analysis