Results for the twelve months ended 31.12.17

28 February 2018: for immediate release

UBM LEI: 213800KLMH5SP3247C87

Results for the twelve months ended 31 December 2017

· Group revenue up 16.2% at £1,002.9m (+13.3% at constant currency)

· Annual Events revenue growth of 5.3% on an adjusted underlying basis1 and 3.6% on an underlying basis (2016: +3.1% and +1.0% respectively)

· Allworld performance ahead of business case and integration progressing well

· Adjusted operating profit1 up 25.3% to £294.2m

· Adjusted operating profit margin1 up 2.1%pts to 29.3% (+1.7%pt excluding 2017 pension gain)

· Effective tax rate of 16.0%; unchanged by US Tax Cuts and Jobs Act

· Adjusted earnings1 up 27.7% to £212.3m

· Diluted adjusted EPS1 up 34.5% to 53.4p

· Free cash flow1 of £204.1m up 27.9% and cash conversion1 of 100%

· Net debt1 at 1.6 times EBITDA1 (2016: 2.3x2)

· Final dividend of 18.0p per share declared; full year 2017 dividend of 23.5p, up 6.8% 

Continuing Results only

1 See page 27 for definition of non-IFRS metrics

2 Proforma for Allworld Exhibitions

Tim Cobbold, CEO of UBM plc said:

"Over the last three years, Events First has focused UBM on the attractive events market and the team has built a high-quality events business with geographic breadth and strong brands, serving a wide range of industry sectors.

"In 2017 we delivered a strong financial performance with Annual Events adjusted underlying revenue growth accelerating to 5.3%, further margin expansion and strong cashflow. We saw excellent growth in Asia in particular and growth in all our major verticals bar Fashion.

"We enter 2018, a biennial 'down' year, with good momentum in the business as the Events First strategy translates into performance."

* See page 27 for definition of non-IFRS metrics

** CAGR compared to 2015 editions

3) Uses weighted average number of shares over the period of 397.2m (2016: 419.2m)

4) Uses post consolidation number of shares of 397.4m for 2016

On 30 January 2018 the Board of UBM recommended the offer from Informa plc. The Board believes that the terms of the offer are compelling for UBM shareholders in that it represents an attractive valuation for UBM and allows UBM shareholders to participate in ongoing value creation from the combination.

The expected timetable for the recommended offer is set out below:

Unless otherwise stated:

· Underlying revenue growth measures are adjusted for the effects of acquisitions, disposals, foreign exchange movements and peripatetic and biennial events

· Adjusted underlying growth measures additionally remove the impact of portfolio rationalisation

· 'Major' events refer to annual events generating more than £1m revenue

· Biennial events take place once every two years

· Biennial CAGR adjusts for the effects of acquisitions, disposals, foreign exchange movements and rationalisation

· Adjusted operating profit excludes amortisation of intangible assets arising on acquisitions, exceptional items and share of taxation on joint ventures and associates

· Strategic opex relates to Events First strategy implementation

See page 27 for explanation of non-IFRS items.

UBM will host a presentation today at 10.15am at the London Stock Exchange. A live webcast of the results presentation will be made available via UBM's website. To access the webcast please go to www.ubm.com/investor/results-and-reports. A recording of the webcast will also be available on-demand on UBM's website after 4pm.

Notes to Editors 

UBM plc is the largest pure-play B2B Events organiser in the world.

In an increasingly digital world, the value of connecting on a meaningful, human level has never been more important. At UBM, our deep knowledge and passion for the industry sectors we serve allow us to create valuable experiences where people can succeed. At our events people build relationships, close deals and grow their businesses.

Our 3,900+ people, based in more than 20 countries, serve more than 50 different industry sectors - from fashion to pharmaceutical ingredients. Our global networks, skilled, passionate people and market-leading events provide exciting opportunities for business people to achieve their ambitions. For more information, go to www.ubm.com; for UBM corporate news, follow us on Twitter at @UBM.

Forward Looking Statements 

This announcement may contain certain statements, statistics and projections that are or may be forward-looking. The accuracy and completeness of all such statements, including, without limitation, statements regarding the future financial position, strategy, projected costs, plans and objectives for the management of future operations of UBM plc ("UBM") and its subsidiaries (the "Group") are not warranted or guaranteed. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that may occur in the future. Although UBM believes that the expectations reflected in such statements are reasonable, no assurance can be given that such expectations will prove to be correct. There are a number of factors, many of which are beyond the control of the Group, which could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. These factors include, but are not limited to, factors such as: future revenues being lower than expected; increasing competitive pressures in the industry; and/or general economic conditions or conditions affecting the relevant industry, both domestically and internationally, being less favourable than expected. We do not intend to publicly update or revise these projections or other forward-looking statements to reflect events or circumstances after the date hereof, and we do not assume any responsibility for doing so.

This announcement contains inside information for the purpose of Article 7 of Regulation (EU) No 596/2014.

END

BUSINESS REVIEW

For the twelve months ended 31 December 2017

UBM's financial performance reflects the attractive characteristics of the Events industry with good organic growth, supported by acquisitions, high margins and strong cash generation. In 2017 the improvement in performance reflected good progress against our strategic objectives; 

Growth: In 2017 the adjusted underlying growth for the Group increased from 2.1% to 4.1% driven by strong growth in events in China, India, South East Asia and Continental Europe. Notwithstanding challenges in the Fashion sector, the adjusted underlying growth of the Annual Events portfolio was 5.3% with underlying growth at 3.6%. Biennial growth (on an underlying basis) was 3.7% CAGR versus the last edition.

Attractive margin: During 2017 the Group's adjusted operating margin increased from 27.2% to 29.3%. This was driven by improved portfolio mix and the drop through from stronger underlying growth together with procurement savings and the usual margin benefit of a biennial 'up' year. Operating cash conversion was 100%.

Best platform: The Sales Excellence (SX) programme to implement a common sales model enabled by Salesforce technology made good progress rolling out across EMEA and into Asia. The parallel process for the marketing model, enabled with Eloqua (a marketing automation tool), has begun in EMEA too. We continue to derive further benefit by leveraging the common Oracle financials platform with harmonised, standardised management information. The increasing maturity of our platform enables efficient integration of bolt-on acquisitions and our newly opened Asia Shared Service Centre will provide further support in this region.

Central to the Events First strategy and to delivering the strategic objectives, is a focus on enhancing the quality of the portfolio: organically (through improving performance), inorganically (through acquisition) and by rationalising and/or disposing of underperforming events and non-aligned OMS activities. 

In January 2017 we completed the final piece of the Allworld acquisition. Allworld has further strengthened our market-leading position in Asia and secured a leadership position in the high-growth ASEAN region. The integration is progressing well with performance ahead of the business case. The ROI of 6.3% in 2017 is slightly ahead of our expectations and we expect to deliver ROI greater than the risk-adjusted WACC in 2019, as set out when we announced the acquisition. 

We made four bolt-on acquisitions during 2017 for £13.6m, as detailed on page 44. The pipeline for further acquisitions remains good, and since the year-end we have completed two acquisitions, Creativity in China and Canal Energia in Brazil, for a combined initial consideration of £9.6m.

2017 was the final year of the three-year programme to dispose of or rationalise smaller, lower-margin, lower-growth events and OMS activities that are not well-aligned to events. During the year we rationalised or disposed of 37 events and various OMS activities which had generated £21.5m of Events revenue and £18.5m of OMS revenue in 2016. This programme has enhanced the group operating margin and contributed to group operating profit. Since the year-end we have disposed of some additional small media assets serving the US Fashion and UK Construction sectors. In 2017 these contributed £7.5m of revenue to OMS and £0.9m to Events.

Other portfolio improvements derived from a focus on "spotlight" (underperforming) events, from the second iteration of our "Event Plan" process and from the introduction of a more structured process around new launches. During 2017 we launched 21 new events, the largest being CPhI North America which, exceptionally, reached Platinum status (>£5m p.a.) in its first year.

Following the portfolio improvements 89% of our Annual Events revenues are now derived from 'Major' events (>£1m p.a.) These Major events generally grow faster (2017 'Majors' adjusted underlying growth +6.0%) and are more profitable.

We continue to work on improving the operational performance of the business by extending the adoption of the SX model in Asia and in planning for its roll out in the Americas during 2018. The roll out of the Salesforce CRM platform to support the new business model continues in parallel. We are adopting a similar approach to enhance our marketing capabilities. During 2017 we completed the planning of the Marketing Excellence (MX) model and in February 2018 we started to roll it out together with Eloqua. In 2017 we also launched a Data Excellence (DX) project to focus on enhancing our processes for collecting, storing, cleansing, connecting and enriching our data for more actionable insight while respecting regulations and privacy, including GDPR. 

During the year the Board approved a new technology strategy based on standard platforms, partnering for non-critical applications and shifting spend towards Event technology. The new technology organisation has been designed and is now being implemented with the first outsourcing project to be completed in 2018. We extended the use of event technology in the business during 2017 too. More events used Supplier Finder, Orbit, Touchplan and other tools which help to improve the customer experience whilst simultaneously providing our teams with valuable insight.

The procurement programme generated further savings and secured another £3.7m of annualised savings during 2017 to bring total procurement savings (including synergies) to £10.3m per annum.

A high performing, engaged and diverse team of people is key to delivering the Events First strategy. During 2017 we made further progress in developing a High Performing Culture. We improved the organisational capability within the Group, providing specialist skills training and a much stronger focus on performance management. New commission plan structures and the revised Divisional and Executive LTIPs incentivise organic revenue growth performance.

During 2017 strategic expenditure, which includes the costs of portfolio rationalisation, restructuring, strategy implementation and the development of the common Sales, Marketing and Data platforms was £15.9m. Of this £9.2m was capital expenditure and £6.7m opex. By the end of 2017, the Events First programme has delivered cumulative total savings of £15.8m at an annualised run rate of £17.0m. We remain confident of delivering annual savings of £20m by the end of 2019.

The Events First strategy is delivering value for shareholders and underpins the delivery of the goals we have articulated of underlying growth in line with the Events industry average and of a medium-term margin target of 30%.

It was with profound sadness that we learned that our Chairman, Dame Helen Alexander, had passed away on 5 August 2017 following a period of illness. Dame Helen was an exceptional leader and is deeply missed. She steered UBM through a time of significant change and we have continued to build on the strong foundations that she helped to lay. Shortly before Helen's passing, Greg Lock assumed the role of Acting Chairman, and on 30 January 2018, was appointed Non-Executive Chairman.

There were additional changes to the UBM Board during 2017. In May, Alan Gillespie stepped down having served as a Non-Executive Director since 2008. At that time Warren Finegold, the former Director of Strategy and Business Development for Vodafone, was appointed as a Non-Executive Director. On 30 January 2018, when Greg Lock was appointed Chairman, Warren Finegold was also appointed Senior Independent Director and Chairman of the Remuneration Committee.

There were also changes to the UBM Executive Committee. In October Lucy Dimes joined UBM as CEO of UBM EMEA. As part of shifting the balance of resource towards the operating businesses both Jane Risby-Rose and John (JP) Petevinos left UBM in 2017. They leave with our sincere thanks for the contributions they have made to UBM in general and to the development and implementation of Events First in particular.

Total Events revenue was £866.4m (2016: £711.6m), benefiting from good underlying growth in Annual Events, an FX tailwind of £22.7m, revenue from acquisitions (which in 2016 had generated £60.1m of Annual Events revenue) and the biennial 'up' year effect. During the period we rationalised 29 events which had contributed £11.2m of Annual Event revenues in 2016 and we disposed of events which had contributed £10.3m of revenues in 2016.

Adjusted underlying* revenue from Annual Events, which excludes the impact of portfolio rationalisation, grew 5.3% in 2017 (2016: 3.1%). Underlying* revenue from Annual Events grew 3.6% (2016: 1.0%). The overall growth of the events portfolio improved significantly during 2017, with strong growth from the existing portfolio (particularly in Asia), a good contribution from new launches (most notably CPhI North America) and growth in the Allworld events. This performance was tempered in part by the weaker North American Fashion portfolio.

Biennial Events contributed £85.8m of revenue (2016: £28.1m) reflecting the 'up' year portfolio and inclusion of revenue from Allworld biennial events, most notably HOFEX and Food & Hotel Indonesia. The existing UBM portfolio of biennial events showed 7.6% growth over their 2015 editions (3.7% CAGR) with good growth in Food Ingredients Europe partially offset by expected softness at Marintec China.

Unless otherwise stated, all commentary below relates to adjusted underlying* revenue growth for Annual Events.

The 'Food, Hospitality & Leisure' events grew 15.3%, helped by the additional capacity created by running Hotelex and Fine Food over two phases.

'Pharma & BioPharm' was up 13.2% with double-digit growth at CPhI Worldwide and its co-located events, and strong growth at CPhI China and CPhI India coupled with the successful CPhI North America launch.

'Lifestyle & Brands' grew 12.5%, with particularly strong performances at Furniture China, Cosmoprof Asia and CBME China, which are being helped by the growing affluence and aspiration of the middle class in China.

'Technology' events grew by 7.6% with particularly strong growth at our cybersecurity event, Black Hat and CommunicAsia which more than offset the impact of the refresh of InteropITX into a smaller, more focused event.

The remaining sectors other than 'Fashion' and 'Life Sciences' all showed improvements in the rate of growth compared to 2016. 'Jewellery' returned to growth in 2017, up 1.8%, driven by a good performance at the flagship September Hong Kong Jewellery & Gem show.

'Fashion' revenues were down 4.9%, broadly in line with our expectations. We continue to invest in this important sector, in initiatives to improve our market penetration, to expand into adjacencies and to make the events "must-attend" for visitors by improving the educational and experiential content at the shows. During 2017 we successfully launched the IFF MAGIC Japan Spring and Fall editions. Excluding these launches the revenue of Fashion was down 6.6%. We don't currently anticipate any improvement in performance in 2018.

'Life Sciences' & 'Healthcare' events is a small US, mainly conference, business which keeps practitioners appraised of regulatory changes. It was down 6.4% reflecting US healthcare regulatory uncertainty in 2017.

In 2017, North America accounted for 41.7% of Annual Events revenue (2016: 43%), China (including HK) 29.2% (2016: 30%) and Emerging Markets 14.4% (2016: 10.5%). The increase in Emerging Markets principally relates to the addition of the Allworld events, the largest of which take place in Singapore, Indonesia and Malaysia.

During 2017 North American revenue grew 0.2% with good performances in the 'Technology', 'Pharma & BioPharm', 'Advanced Manufacturing' and 'Transport & Logistics' sectors offset by 'Fashion' and 'Life Sciences'.

China (including HK) revenue grew 9.4% in 2017, with particularly strong growth in the 'Lifestyle & Brands', 'Food, Hospitality & Leisure' and 'Pharma & BioPharm' sectors. This strong growth was moderated slightly by the lower growth of 'Jewellery'.

Emerging Markets revenue grew 6.5%, principally driven by strong growth in South East Asia, which was partially offset by weakness in the much smaller businesses in Turkey and Brazil.

In Continental Europe revenue rose 10.2% principally driven by the strong performance in our 'Pharma & BioPharm' events. Revenues in the UK rose 5.7% driven by good growth in our 'Technology' and 'Lifestyle & Brand' events. The Rest of World events rose 24.8%, principally reflecting the successful launch of the two fashion events in Japan.

Adjusted operating profit* was £295.6m, up from £229.1m in 2016. The Annual Events adjusted operating margin* was 33.2% (2016: 32.3%). This strong margin progression was driven by drop-through from the faster organic growth, further procurement savings, overhead recovery in the biennial 'up' year, and from the benefits from rationalising and disposing of lower-margin events. The FX tailwind added 0.2%pts of margin during the year while cost actions helped to reduce the negative margin impact of the revenue contraction in 'Fashion'.

The Total Events adjusted operating margin* of 34.1% (2016: 32.2%) also benefited from the higher biennial margins in the 'up' year (2017: 42.5%; 2016: 29.3%) from the UBM portfolio together with the impact of including the Allworld biennials for the first time.

OMS revenue declined by 2.2% on an adjusted underlying basis. We rationalised and disposed of various non-aligned activities which had generated £11.3m and £7.2m of OMS revenue respectively, in the 2016 comparative.

The remaining online activities showed good adjusted underlying growth of 4.8%. However, our print business (which represents only 5.3% of total Group revenue) declined by 11.6%. This reflects the ongoing migration of the business from print into digital format but also, our Life Sciences business was specifically affected by market issues with the reduced level of mainstream drug approvals given uncertainties over healthcare reform in the US. The business is well-positioned to manage the ongoing migration from print to digital. 

Adjusted operating profit* was £19.4m (2016: £24.1m), representing an operating margin* of 14.2% (2016: 16.0%). The reduction in the margin was driven by the decline in print revenues and, as a result, cost savings actions were taken towards the end of the year.

SUMMARY INCOME STATEMENT

All non-IFRS measures are noted with a '*' and additional information on these measures is set out on page 27

Revenue in 2017 was £1,002.9m, up 16.2% (2016: £863.0m) largely due to the Allworld acquisition, strong organic event growth, a biennial 'up' year and favourable FX movements. This was partially offset by the impact of the final year of the product rationalisation programme under Events First. On an adjusted underlying basis, revenue grew 4.1% with 5.3% growth in Annual Events offset in part by a 2.2% decline in OMS.

Adjusted operating profit* rose by 25.3% to £294.2m (2016: £234.8m) reflecting the positive contribution from acquisitions, mainly Allworld, and from annual and biennial events offset in part by a reduction in OMS. The increase in Annual Events was delivered by growth across the portfolio with the exception of the 'Fashion' and 'Life Sciences' verticals which declined. Continued progress was made on the procurement programme with aggregate annual savings of £10.3m delivered by the end of 2017.

The adjusted operating margin* grew to 29.3% (2016: 27.2%) with strong performances in Annual and Biennial Events together with the benefit of the biennial 'up' year and the FX tailwind.

On a reported basis, operating profit from operations of £212.0m increased 38.8% (2016: £152.7m) mainly due to the operating performance noted above whilst adjusting items of £82.2m (2016: £82.1m) were consistent with the prior year.

Diluted adjusted EPS* - continuing

Continuing diluted adjusted EPS* increased by 34.5% to 53.4p (2016: 39.7p). The share consolidation in 2016 added 2.2p of benefit during the year. The earnings growth in the period was the main driver of the increase together with the benefit of FX, less the increase in the tax charge.

On a reported basis, diluted EPS from continuing operations of 34.8p increased 73.1% (2016: 20.1p) due to the factors explained above together with the impact of a lower level of adjusting items in the income statement compared with the prior year.

Corporate operations and strategic operating expense

Total corporate costs increased to £20.8m (2016: £18.4m). Corporate costs before non-recurring items decreased by 1.7% to £23.7m (2016: £24.1m).

Non-recurring items included:

- Pension credit in 2017 related to the finalisation of an initiative to allow members of the UBM Pension Scheme greater flexibility by exchanging future increases in return for a higher starting pension; and

- Restructuring charges in relation to corporate functions.

Strategic operating and capital expenses relate to the implementation of the Events First strategy. Strategic opex of £6.7m included costs relating to CRM and Marketing system development; £5.8m in Events and £0.9m in OMS (2016: £6.1m in Events, £1.1m in OMS). Strategic capital expenditure of £9.2m was invested in CRM platform development during the year, up from £3.6m in 2016.

Income statement adjusting items

The following table provides a summary of the income statement adjustments that have been excluded from the continuing adjusted operating profit* of £294.2m. The total charge to continuing operating profit for adjustments and exceptional items was £82.2m (2016: £82.1m).

Acquisition exceptional items

· Advanstar and BJI integration costs of £8.0m and £3.1m respectively were incurred during the year as the integrations were completed. Advanstar costs related to the concluding elements of the operational integration into the Americas business including alignment and migration of processes. BJI costs related mainly to venue contract break fees.

· Allworld integration costs of £5.1m were incurred during the period primarily relating to restructuring costs and consultancy fees for the operations and finance integrations. Total integration costs of $20m are expected with the balance being incurred over the next two years.

· Acquisition costs in the year of £2.2m related mainly to due diligence and professional fees for Allworld and bolt-on acquisitions. This was offset by a credit of £1.1m (2016: £0.4m charge) for changes in earnout estimates on prior year acquisitions.

· Transaction costs of £2.4m relate to professional fees incurred in 2017 in respect of the Informa transaction.

Disposal gains and losses

· Non-core businesses: the disposal of four events from the EMEA portfolio completed on 8 September 2017 resulting in a gain of £2.6m.

Net financing expense

The net interest expense of £25.4m (2016: £26.3m) represents interest payments on our US Dollar bond, US Private Placement Loan Notes, bank loans and pension interest, net of interest receipts on cash holdings. The net expense for the year is lower than the prior year primarily due to the beneficial interest charge on the US Private Placement Loan Notes and the $365m bridge facility during 2017. In the prior year, the £250m Sterling bond was in place until November 2016 which incurred a higher rate of interest.

Discontinued operations

The PR Newswire (PRN) disposal completed on 16 June 2016 and a gain on disposal was reported in 2016. During the year, the Group recognised an additional £7.8m gain primarily due to the release of expired provisions for warranties and indemnities which were originally recognised in accordance with specific clauses in the sale agreement.

TAX

Current tax

Our tax charge on adjusted operating profit* was £43.0m (2016: £29.2m), representing an effective tax rate* for the year of 16.0% (2016: 14.0%). The effective tax rate in the prior year benefited from certain one-off tax settlements which did not recur in 2017. A bridge showing the main factors affecting the 2017 effective tax rate is shown below:

In December 2017 the US Tax Cuts and Jobs Act was enacted. This Act made significant changes to US tax rules, the most relevant to the Group being the reduction in the federal rate of tax to 21%, the reduction in the amount of interest that can be deducted for tax purposes and the introduction of other measures designed to combat base erosion. The combined effect of these changes will not have a material impact on the Group's adjusted tax rate.

The total cash paid in respect of income taxes in 2017 was £42.2m (2016: £39.1m). The table below is a reconciliation of the 2017 expected tax charge to actual cash tax paid:

A breakdown of the main geographies in which we paid tax is as follows:

Our current tax liability as at 31 December 2017 was £52.6m (2016: £60.9m).

Movements in the liability during 2017 were as follows:

The current tax liability includes £35.9m (2016: £45.6m) in respect of accruals for uncertain tax positions in various jurisdictions in which UBM operates. We have necessarily made judgements as to the outcome of tax matters not concluded. The current tax liability has been consistently classified as a short-term liability in accordance with our accounting policy. The current tax liability can be further analysed as follows:

By geography By year

Deferred tax

During the year deferred tax assets recognised in respect of tax losses and other temporary differences reduced by £7.1m, bringing the total assets recognised to £19.7m. These assets have been recognised because the Group expects to generate taxable profits against which they will be used in the future. In addition, at 31 December 2017 the Group had unrecognised deferred tax assets, including those relating to tax losses carried forward, further details of which are included in Note 3.2.

Our total tax contribution

Our contribution to the economies in which we operate is predicated on our ability to run successful, profitable businesses that generate employment, stimulate economic growth and contribute to tax revenues. This is particularly important in Emerging Markets where the taxes which we pay to, and collect on behalf of, governments is an important part of our economic footprint.

In the year ended 31 December 2017, our total tax contribution was £66.8m (2016: £61.0m), this includes corporate income tax on our profits, as well as employee taxes and any other taxes that we bear. The geographical split of our total tax contribution is as follows:

In addition to the above, in 2017 we collected taxes on behalf of governments (e.g. employee taxes and sales taxes) amounting to £65.7m (2016: £56.2m).

CASH FLOW

Conversion of adjusted operating profit* into cash

The ability to turn profits into cash is a key focus for management, as it provides the funds necessary to invest in the business. We track this using the cash conversion* measure which expresses our adjusted cash generated from operations* as a percentage of adjusted operating profit*. Cash conversion* varies in line with our biennial cycle and event phasing.

Cash conversion* at 100% (2016: 96%) increased principally due to a positive working capital result in a biennial 'up' year.

Capital expenditure for the year was £20.9m (2016: £11.7m), and £9.2m of this expenditure related to the strategic spend on our new CRM platform.

Free cash flow*

Free cash flow* was £204.1m (2016: £159.6m).

Adjusted cash from operations* was £295.0m, whilst free cash flow* was £204.1m. Dividend payments and purchases of shares totalled £104.4m.

Free cash flow* increased because of the cash generated by Allworld's operations and by the existing events portfolio in a biennial 'up' year, partially offset by higher levels of spend on non-operating items such as integration costs and tax. We completed the acquisition of the Bahrain business of Allworld and made four additional bolt-on acquisitions in the year as well as one disposal (consisting of four events), resulting in a £69.9m increase to net debt* offset by a favourable FX movement on US Dollar denominated debt.

Reconciliation of IFRS to adjusted cash generated from operations*

ACQUISITIONS

We invested £48.4m in the acquisition of Arabian Exhibition Management WLL (AEM), the Bahrain business of Allworld Exhibitions which completed in January 2017. Completion of the acquisition of AEM was the final piece of the Allworld Exhibitions transaction, the rest of which had completed in December 2016. In addition, we invested a total of £13.6m acquiring Marmara, AMA Research, Green Thinking Services and The Aesthetic Show. We also acquired the remaining 20% shareholding of Rotaforte for cash consideration of £2.0m. Payments for contingent and deferred consideration for acquisitions made in prior years totalled £8.0m.

The 2017 acquisitions (excluding AEM) contributed adjusted operating profit* of £0.2m in 2017 following acquisition. The combined return on investment from the bolt-on acquisitions in the past three years is 13.0% with 2017 acquisitions contributing 9.4% in their first year. Including the larger acquisitions the return on investment for the past three years is 8.8%. The return on investment target framework requires acquisition returns in excess of our cost of capital in the first full year of ownership. The framework adjusts the cost of capital used and the period over which the return target must be reached to take into account the risk resulting from the scale, country, sector and complexity of the acquisition.

The following table shows the performance of our acquisitions since 2015:

3 Excluding working capital adjustments and including the earned contingent consideration

4 2017 return on investment only includes acquisitions where an event has traded under UBM ownership

5 Includes Bahrain

CAPITAL STRUCTURE

Net debt*

Our net debt* at 31 December 2017 was £511.3m, a ratio of 1.6 times EBITDA* (Proforma 2016: 2.3 times).

Our Financial Policy targets a leverage ratio of between 1.5-2.0 times net debt/EBITDA* which provides flexibility for biennial cycles, capacity to invest in bolt-on acquisitions, and is consistent with investment grade metrics. There is flexibility to move outside the corridor (up to 2.5 times and down to 1.0 times), specifically due to M&A activity, with the intention of returning into the corridor within 12-18 months. We have held investment grade ratings from each of Standard & Poor's and Moody's for over nine years. The Group continues to maintain a credit rating of BBB- for Standard and Poor's and a rating of Baa3 for Moody's, with Standard & Poor's outlook stable and Moody's having upgraded their outlook to stable during the year.

6 Includes fair value adjustments

7 2016 is continuing operations only

8 Includes Allworld proforma earnings of £23.5m, AEM consideration of £48.6m and cash acquired of £4.2m

Debt facilities

Our funding strategy is to maintain a balance between continuity of funding and flexibility through the use of capital markets, bank loans and overdrafts.

During the year, to replace the $365m bridge facility which was put in place in December 2016 to fund the Allworld acquisition, $370m US Private Placement Loan Notes were issued on 15 June 2017 in three tranches: $45m of five-year notes, $175m of seven-year notes and $150m of ten-year notes.

At 31 December 2017, we had drawn £57.5m from the revolving credit facility, leaving an un-utilised commitment of £342.5m available. Our debt facilities and maturities as at 31 December 2017 are summarised below:

Pensions

UBM operates defined benefit and defined contribution schemes, based primarily in the UK. 2017 is a triennial valuation year for the UBMPS and UNEPS defined benefit schemes where the Pension Scheme Trustees review the level of funding and agree with UBM the future level of contributions to the scheme.

At 31 December 2017, the aggregate deficit under IAS 19 was £5.8m, a reduction of £44.8m compared to the deficit of £50.6m at the previous year end. This is primarily due to improved asset performance and updated mortality projections and member data following the triennial valuation. This has been offset in part by a reduction to the discount rate due to market movements.

RETURN ON AVERAGE CAPITAL EMPLOYED (ROACE*)

ROACE* is defined as post tax adjusted operating profit* over average shareholders' funds plus net debt* (average capital employed). Capital employed has been adjusted for impairment charges from 1 January 2016 onwards.

9 Continuing operations and excluding Allworld capital employed at 31 December 2016

ROACE* has decreased since 2016 as the inclusion of Allworld's capital employed and respective earnings are incorporated into the measure.

RELATED PARTY TRANSACTIONS

Details of related party transactions in the 12 months ended 31 December 2017 are disclosed in Note 7.1.

FOREIGN CURRENCY

The Group closely monitors its exposure to foreign currencies, and seeks to match revenue and costs when possible. The revolving credit facility may be drawn in currencies other than Pound Sterling. We also hold cash and cash equivalents in Pound Sterling, the Renminbi and US Dollars and other currencies closely linked to the US Dollar. Given our large and diverse customer base, there are no significant concentrations of credit risk.

The following table outlines the currency profile of our revenues and adjusted operating profit* for 2017:

10 $ or quasi-$ pegged

Approximately 70% of UBM's revenues are generated in US Dollars or quasi-dollar pegged currencies, which has benefited the Group's reported financials given FX movements in 2017. The FX benefit added £25.8m to revenue and £8.6m to adjusted operating profit* during the year compared to 2016.

The income statement exposure to foreign exchange risk is shown for our most important foreign currency exposures in the sensitivity analysis below, based on 2017 operations:

11 The actual impact of currency on Group profit may be different to that implied due to the timing of profit receipts, with financials translated on a monthly basis using the average for that month

DIVIDENDS

Our existing progressive dividend policy, which targets two times cover through economic and biennial cycles, is unchanged for 2017. The Board has declared a final dividend of 18.0p (2016: 16.6p) to give a full year dividend of 23.5p (2016: 22.0p), an increase of 6.8% on prior year and dividend cover of 2.3 times. The final dividend will be paid on 24 May 2018 to shareholders on the register at close of business on 20 April 2018.

The Board undertook a review of the dividend policy during 2017 and confirmed a new policy to take effect from 2018. The revised policy is to pay a progressive dividend centred around 2x cover through economic and biennial cycles and taking into consideration the impact from currency movements. The policy has also been revised so that the interim dividend will in future represent approximately one-third of the expected full year dividend.

STATEMENT OF GOING CONCERN AND DIRECTORS' RESPONSIBILITIES

After making enquiries, the Directors have a reasonable expectation that UBM has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the financial statements. In reaching this conclusion, the Directors have had due regard to the following:

• After taking account of available cash resources and committed bank facilities, none of UBM's borrowings fall due within the next 12 months 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.

Further information on the financial position of UBM, its cash flows, financial risk management policies and available debt facilities are described in my review on the preceding pages. UBM's business activities, together with the factors likely to impact its future growth and operating performance are set out in the Strategic Report.

The Directors listed below (being all the Directors of UBM plc) confirm that the results in this preliminary announcement have been taken from the Group's 2017 Annual Report and Accounts which will be available on the Company's website in due course. The consolidated financial statements have been prepared and approved by the Directors in accordance with International Financial Reporting Standards (IFRS) as issued by the International Financial Reporting Interpretations Committee (IFRIC), give a true and fair view of the assets, liabilities, financial position and results of the Company and the undertakings included in the consolidation taken as a whole. The management report contains:

· an indication of important events that have occurred during the year ended 31 December 2017 and their impact on the consolidated financial statements, and a description of the principal risks and uncertainties facing the Group; and

· material related party transactions in the year ended 31 December 2017 and any material changes to the related party transactions described in the 2016 Annual Report and Accounts.

The basis of preparation and summary of accounting policies applicable to the Group's consolidated financial statements can be found in the Accounting policies sections of the 2017 Annual Report and Accounts. The preliminary announcement for the year ended 31 December 2017 does not constitute statutory accounts as defined by the Companies (Jersey) Law 1991 or the Companies Act 2006.

Signed on behalf of the Board by

Marina Wyatt

Chief Financial Officer

27 February 2018

UBM plc Board of Directors:

Executive Directors:

Tim Cobbold (Group Chief Executive)

Marina Wyatt (Chief Financial Officer)

Non-Executive Directors:

Greg Lock (Chairman)

Warren Finegold (appointed 19 May 2017)

John McConnell

Mary McDowell

Terry Neill

Trynka Shineman

David Wei

Macro-economic slowdown, geopolitical instability and/or exchange rate fluctuations

- The geo-political environment remains volatile and a subsequent slowdown in the global economy or a regional crisis could adversely impact the Company's revenue, as exhibitor, advertising, attendee, sponsorship and other discretionary revenue may decline. As an international business UBM is sensitive to this risk.

- Foreign exchange rate fluctuations, particularly the US Dollar, could adversely affect our reported earnings and the strength of our balance sheet.

Acquisition risk

- Acquisitions are an important part of our strategy. Acquisitions may not deliver their expected returns. Integration issues or failure to realise operating benefits or synergies may also impact expected returns.

Specific country risk and emerging market exposure

- Our business operates in many geographies, particularly Emerging Markets such as Turkey, the Middle East and Russia which may present logistical and management challenges due to different business cultures, languages or unfavourable changes in applicable law or compliance requirements. Maintaining our reputation as a responsible corporate entity in the countries we operate in is a focus for the company.

- Expansion through joint ventures reduces logistical and management issues but can create governance and control challenges.

Factors and incidents affecting our ability to stage 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. There is a reputational risk based on how effective our response to these risks might be.

- UBM utilises some of the largest global venues available creating the possibility of concentration where few or no alternatives exist.

- UBM relies on suppliers to help deliver effective events. Risks to the integrity and suitability of these key relationships could undermine the effectiveness of these events.

- A major incident at a venue during an event may give rise to significant contractual liabilities.

Changes in our business environment

- We cannot predict all the changes and impacts that 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, as could changes in legislation or compliance requirements where we operate.

Technological risk: execution, data breach and cyber security

- The increasing threat from unauthorised access to our systems by external parties could lead to reputational damage and regulatory action.

- As part of its strategy, UBM has continued to invest in the technology platforms of the business to ensure the data we hold remains protected despite the rapidly evolving cyber risk landscape.

- System failure could have a significant impact on our business. The collapse of the Cloud on which various products and systems are hosted could have negative consequences for our operational activity.

Access to capital

- With the changing macro-environment and currency changes, the availability or cost of financing may affect our acquisition strategy.

People recruitment and retention

- Changes in the operating model and competitive external landscape could see an increase in staff turnover.

Consolidated income statement

for the year ended 31 December 2017

* Adjusted Group operating profit represents Group operating profit excluding amortisation of intangible assets arising on acquisitions, exceptional items and share of tax on profit in joint ventures and associates.

Consolidated statement of comprehensive income

for the year ended 31 December 2017

Consolidated statement of financial position

at 31 December 2017

These financial statements were approved by the Board of Directors and were signed on its behalf on 27 February 2018 by:

Consolidated statement of changes in equity

for the year ended 31 December 2017