Results for the year ended 31 December 2016

22 February 2017: for immediate release

Results for the year ended 31 December 2016

Significant strategic progress and performance ahead of expectations

· PR Newswire (PRN) disposal completed - £490m net cash proceeds - £243.7m special dividend

· Allworld Exhibitions (Allworld) acquired for $485m (£392.9m)

· Excellent progress implementing the Events First strategy:

· £82.7m invested in bolt-on acquisitions

· Disposal of the Electronics Media business, Light Reading and Ecobuild

· Exit run rate of £11.5m of savings p.a. from operational initiatives

· Continuing revenue up 12.1% at £863.0m (0.1% at constant currency)

· Events revenue growth of 3.1% on an adjusted underlying basis*

· Continuing adjusted operating profit* up 19.2% to £234.8m

· Continuing adjusted operating profit margin* up 1.6%pts to 27.2% (+1.0%pts excl. pension gain)

· Continuing adjusted attributable profit up 23.4% to £166.3m

· Continuing diluted adjusted EPS* up 31.0% to 39.7p (tax rate of 14.0%)

· Free cash flow* of £159.6m and cash conversion* of 96%

· Year-end net debt* at 2.4 times continuing EBITDA*

· Final dividend declared of 16.6p per share - total 2016 ordinary dividend of 22.0p per share

*See page 3 and page 27 for definition of non-IFRS metrics

Tim Cobbold, CEO of UBM plc said:

"During 2016 we made significant strategic progress and delivered performance ahead of expectations.

"We took further steps to focus UBM on the attractive B2B events sector by completing the PRN disposal and, in December, acquiring Allworld. At the same time, we made excellent progress implementing the Events First strategy at an operational level and delivered a strong financial performance ahead of market expectations. In a favourable FX environment reported revenues grew 12.1%, the operating margin was 1.6% points higher at 27.2% and earnings per share increased by 31.0%.

"While remaining conscious of the global macro-economic and geopolitical uncertainties, in 2017 the Board expects to see higher underlying revenue growth (excluding the impact of further portfolio rationalisation), enhanced by the consolidation of Allworld and the positive impact of odd-year biennials. This growth coupled with Events First initiatives will drive further improvement in the margin and continued strong cash generation."

Key financial information

* See page 3 and page 27 for definition of non-IFRS metrics

** Compared to 2014

1) Uses weighted average number of shares over the period of 419.2m (2015: 445.5m)

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

Group IFRS results

Notes to business and financial review

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 occur once every two years

· 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.

Contacts

UBM will host a presentation today at 10.30am at Lincoln Centre, 18 Lincoln's Inn Fields, London, WC2A 3ED. 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 from 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 3,750+ people, based in more than 20 countries, serve more than 50 different industry sectors - from fashion to pharmaceutical ingredients. These 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 2016

Strategic progress

UBM is focused on delivering its Events First strategy, with the objective of becoming the world's leading events business. As a result, the Group's financial performance increasingly reflects the attractive characteristics of the events industry: organic growth supported by acquisitions, high margins and strong cash generation. Central to the strategy is the quality of the portfolio. The sectoral and geographic spread of the portfolio combined with its overall scale provides an inherent breadth and resilience which underpins the revenues and earnings of the business.

In line with the strategy a number of important and significant steps were taken in 2016 in refocusing the Group on the Events sector. The disposal of PRN coupled with the acquisition of Allworld and four small bolt-ons have significantly increased UBM's focus on the attractive, higher-margin, higher-growth events sector. On a pro forma basis, 84% of UBM's continuing revenues and 92% of operating profits are now derived from the Events sector. This proportion will increase further as more bolt-on acquisitions are made and the alignment of OMS activities to the Events portfolio increases.

On 15 December 2015 we announced the disposal of PRN for $841m (comprising $810m cash and $31m preferred equity). Following anti-trust clearance in the US, the transaction completed on 16 June 2016 and in July we returned £243.7m of the cash proceeds to shareholders via a special dividend with an accompanying share consolidation.

On 13 December 2016 we announced the acquisition of Allworld for $485m. Allworld, which generated revenues and operating profits of $97.2m and $37.6m respectively in the year to 30 June 2016, is a pure-play events business focused in Asia and the Middle East, with a record of strong organic growth, averaging c.7% CAGR over the last ten years. This is an important acquisition for UBM as it reinforces our market-leading position in Asia and secures a leadership position in the high-growth ASEAN region as well as improving the growth profile of the Events portfolio. Additionally, it provides useful market access to the Middle East, a region where UBM had only a small presence.

The UBM and Allworld portfolios are highly complementary, both geographically and sectorally and, over the next two-three years there are significant and exciting revenue synergy opportunities available. Examples include, co-locating adjacent shows, cross-marketing between the two portfolios, introducing value based pricing and moving to operate some biennial shows annually. Integration plans are already being implemented and we expect that in 2019 the acquisition will deliver a return on investment greater than our weighted average cost of capital.

We also enhanced the portfolio by spending a further £82.7m on four attractive bolt-on acquisitions. On 21 April 2016 we acquired Business Journals Inc (BJI), a New York-based portfolio of Fashion events and related media activities, for $69m in cash. This business complements UBM's existing Fashion portfolio exceptionally well, offering very significant cost synergies (relative to its size). BJI is being integrated and is performing in line with the business case with synergies coming through sooner than expected.

On 31 May 2016 we purchased Content Marketing Institute (CMI), the market-leading Content Marketing World event, conference and media business, based in Cleveland, Ohio for an initial consideration of $17.6m. CMI operates in a high-growth market segment and uses a format and approach to serving its community that has proven very successful in our existing technology shows. CMI is operating in line with the business plan. In addition, we acquired The Battery Show in Novi, Michigan for £14.3m and Secon in Korea for £2.2m.

The integration of Advanstar, which was acquired in late December 2014, continues to plan and will be concluded during 2017. Total synergies generated by the end of 2016 were $17.0m and a further $3m have been identified and will be realised in 2017. Despite some weakness in Fashion markets, Advanstar continues to deliver well ahead of the business plan established when it was acquired. The 2016 return on investment for the transaction is 10.7%. For all acquisitions made in the last three years the total return on investment during 2016 was 11.0%.

This refocusing on events is complemented by the disposal and rationalisation of smaller, lower-margin, lower-growth events and of OMS activities that are not well aligned to events, in line with our strategy. In 2016, 27 events and eight OMS properties, with revenues in 2015 of £11.7m and £3.8m respectively, were discontinued. We disposed of the US Electronics and eMedia business for £19.2m, the remaining investment in the Light Reading business for £16.1m, and some other small events and media properties. In December, we sold Ecobuild to its management for a nominal sum, incurring a total loss on disposal of £35.1m principally relating to the write-off of goodwill.

2016 was the second year of a three-year programme of portfolio rationalisation and although it subdued growth, it increased the operating profit and operating margin in 2016. Furthermore, once the rationalisation has been completed in 2017 the revenue growth in the business will strengthen.

Operationally, Events First implementation remains the priority and the focus. The roll-out of a common sales model and supporting CRM platform is largely complete in EMEA, where approximately 76% of event revenues are operating the new sales processes. The preparation phase is well advanced in Asia, with roll-out commencing before the end of the first half, and has begun in the Americas. The utilisation of Orbit and Touchplan, both of which improve the onsite rebooking experience, is increasing and the value-based pricing process has begun at MAGIC and Black Hat. Good progress has been made on the procurement programme with aggregate annualised savings of £6.6m secured (including synergies). Full year savings under this programme are now expected to be £8m p.a. by the end of 2017. Event plans are becoming a key mechanism for the ongoing operational management of the business and have significantly improved the long term planning process for the Group. New long-term incentives, which incorporate organic revenue growth targets underpinned by profit-based incentives, have been implemented at the event leadership level and for senior divisional management.

In the year to 31 December 2016 strategic expenditure, which includes the costs of portfolio rationalisation, restructuring, strategy implementation and development of the common Sales, Marketing and Data platform, was £10.8m. Of this £3.6m was capital expenditure and £7.2m opex of which £6.1m was in Events and £1.1m in OMS. In aggregate the Events First programme has delivered savings of £9.2m in 2016 at an annualized run rate of £11.5m p.a., already well ahead of what had been anticipated when the strategy was launched in 2014. Further savings opportunities have been identified. These increased and accelerated savings reflect the continuing good progress in implementing the initiatives within each of the Events First strategic priorities.

The Events First investment was originally estimated at £30m-£35m (split between strategic opex and capital expenditure) over the period 2015 to 2017. Overall savings were expected to be £10m p.a., building from 2016. Savings have been realised significantly faster than was originally expected and we see further opportunities with the overall level of annual savings now expected to increase to £20m p.a. by the end of 2019. Commensurate with this, the level of investment will increase to £40m-£45m with a greater proportion of the total expenditure being opex in nature. Post 2017 we will regard such as expenditure as "business as usual".

UBM has a strong, experienced and committed senior management team that share a common belief in what can be achieved through the Events First strategy. During the year the team was strengthened with Scott Schulman joining as CEO of UBM Americas, John Petevinos as Group Strategy Director and Simon Hollins as Group CIO. On 14 November 2016, Simon Foster resigned as CEO of UBM EMEA. In his absence, Tim Cobbold has taken responsibility for UBM EMEA, supported by its strong management team. A full-time successor is expected to be appointed in the first half of 2017.

Outlook

While remaining conscious of the global macro and geopolitical uncertainties, in 2017 the Board expects to see higher underlying revenue growth (excluding the impact of portfolio rationalisation), enhanced by the consolidation of Allworld for the first time and the positive impact of odd-year biennials. This growth coupled with Events First initiatives will drive further improvement in the margin and continued strong cash generation. Assuming current FX rates prevail, the performance will also benefit from a continued FX tailwind.

Events

Total Events revenue was £711.6m (2015: £630.6m), benefiting from an FX tailwind of £76.9m and £23.7m of revenue from the Hospitalar, BJI and CMI acquisitions (which did not contribute in 2015). Adjusted underlying* revenue from Annual Events, which excludes the impact of portfolio rationalisation, grew 3.1% in 2016. During the period £11.7m of Event revenues were rationalised. Unless otherwise stated, all commentary below relates to adjusted underlying* revenue.

Biennial Events contributed £28.1m of revenue (2015: £49.6m). Revenues were up 19.5% compared with the 2014 biennials, reflecting particularly strong growth at KBB Birmingham and Health Ingredients Europe.

The Events portfolio as a whole continued to be strengthened during the period through acquisition and portfolio rationalisation and UBM's geographic and sectoral diversity continues to provide resilience to the overall performance. In 2016 'Major' events grew by 3.9% on an underlying basis, with good performances at some of the larger events (top 20 +5.8%) moderated by some softness in fashion and jewellery, and weakness at Interop, Concrete Brazil, Sign China and Ecobuild. We have taken action to address recent performance in some of these events - we have re-launched Interop to address a more focused niche market, Ecobuild has been sold and the European Gem and Jewellery show is being discontinued.

In 2016, North America accounted for 43% of Annual Events revenue (2015: 43%) and Emerging Markets, accounted for 41% (2015: 41%).

North American revenue was up 0.5% on an adjusted underlying basis, with good performances at large events such as Black Hat, Game Developers Conference and segments of LVMagic (previously MAGICWeek) offsetting the decline at Interop and softness in certain segments of fashion during the second half of the year.

Emerging Markets revenue grew 4.9% with strong growth in events in China, notably CBME, Cosmoprof, Furniture China and Hotelex/Fine Foods offsetting softness at events such as Concrete Brazil, Sign China and the June Hong Kong Jewellery & Gem Fair. Hospitalar performed well and grew despite the tough economic backdrop in Brazil.

Revenues in the UK fell 0.5%, principally driven by the anticipated weakness at Ecobuild and IFSEC with strong growth at Decorex and Brand Licensing Europe. In Continental Europe revenue rose 9.6% driven principally by CPhI and ICSE. Rest of World events grew well, notably CPhI Japan.

Adjusted operating profit* was £229.1m, up from £202.5m in 2015. The Total Events adjusted operating margin* was 32.2% (2015: 32.1%) reflecting annual events margin progression plus an FX benefit (+0.7%pt) offset by the even-year biennial decline.

The Annual Events margin* was 32.3% (2015: 31.4%) after strategic opex of £6.1m (2015: £5.3m). Before strategic opex, the Annual Events margin* of 33.2% was up 0.8%pt driven by FX and a combination of the Events First benefits and synergies. The Biennial margin* was 29.3% (2015: 40.0%) reflecting the portfolio of lower-margin biennials in even-years.

Other Marketing Services (OMS)

OMS revenue declined by 2.3% on an adjusted underlying basis. In the period we rationalised £3.8m of OMS revenue, largely print, and completed the disposal of the Electronics Media business, which contributed £7.0m of revenues in 2016 prior to sale. The decline in online related to softness in the Americas technology portfolio and in Q4 we executed a restructuring to address this. This resulted in a rationalisation of OMS activities which contributed £9.6m of revenue in 2016.

Adjusted operating profit* was £24.1m (2015: £17.7m), representing an operating margin* of 16.0% (2015: 12.7%) driven higher by the positive effect of the rationalisation of lower margin OMS activities, procurement savings and synergies from the Advanstar integration. Strategic opex of £1.1m was slightly lower than in 2015.

PR Newswire (PRN)

PRN's reported revenues were £103.0m (2015: £104.2m) in 2016. This reflects the inclusion of the results of PRN for the period prior to the completion of its disposal on 16 June. The adjusted operating profit* contribution, prior to disposal, was £28.1m (2015: £23.8m), representing a 27.3% margin* (2015: 22.8%).  

FINANCIAL REVIEW

SUMMARY INCOME STATEMENT

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

Revenue - continuing

Continuing revenue in 2016 was £863.0m, up 12.1% (2015: £769.9m) largely due to favourable FX movements, growth in the annual events portfolio and a positive contribution from acquisitions including Hospitalar, BJI and CMI net of disposal of Electronics. This was partially offset by the biennial down year impact and by strategic rationalisation. On an adjusted underlying basis, revenue grew 2.1% with 3.1% growth in Events offset in part by a 2.3% decline in OMS.

Adjusted operating profit* - continuing

Continuing adjusted operating profit* rose by 19.2% to £234.8m (2015: £197.1m) reflecting favourable FX, the contribution from acquisitions and a one-off pension gain of £5.0m which is included in Corporate operations. This was partly offset by the biennial down year impact. There was growth in the adjusted operating profit* of both Annual Events and OMS delivered in the main by the positive impact of product rationalisation, synergies and procurement initiatives.

The continuing adjusted operating margin* grew to 27.2% (2015: 25.6%) with the benefit of FX, stronger Annual Events and OMS profitability and the one-off pension gain.

On a reported basis, operating profit from continuing operations of £152.7m increased 5.5% (2015: £144.7m) owing to the above 19.2% increase in continuing adjusted operating profit*, offset by a higher amortisation charge, acquisition-related costs and net loss on disposals.

Diluted adjusted EPS* - continuing 

Continuing diluted adjusted EPS increased by 31.0% to 39.7p (2015: 30.3p) reflecting the earnings growth in the period and the FX tailwind. The share consolidation completed on 27 June reduced the weighted average number of shares for 2016 to 419.2m (2015: 445.5m).

On a reported basis, diluted EPS from continuing operations of 20.1p increased 10.4% (2015: 18.2p) in line with the increase in the adjusted measure (see above), offset by higher charges from adjusting items (amortisation, acquisition-related costs and a net loss on disposals).

Corporate operations and strategic operating expense

Total corporate costs decreased to £18.4m (2015: £23.1m). Corporate costs before non-recurring items were up 6.6% at £24.1m (2015: £22.6m) due to the higher share-based payments charge. Non-recurring items included:

- Income from our Light Reading associate which returned to profit in H1. On 13 July the holding (33%) was divested in full; and

- Pension curtailment and settlement credits in relation to an initiative to allow members of the UBM Pension Scheme greater flexibility with regard to accessing their pension.

Strategic operating and capital expenses relate to the implementation of our Events First strategy. Strategic opex of £7.2m included costs relating to CRM and Marketing platform development, portfolio rationalisation and restructuring charges: £6.1m was in Events and £1.1m in OMS (2015: total costs of £7.6m of which £5.3m was in Events, £1.8m in OMS and £0.5m in corporate operations). Strategic capital expenditure of £3.6m was invested in CRM platform development during the year.

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 £234.8m. The total charge to continuing operating profit for adjustments and exceptional items was £82.1m (2015: £52.4m).

Acquisition exceptional items

· Advanstar integration costs of £8.1m were incurred in 2016 relating to the integration of the finance systems onto the Oracle platform and alignment and migration of processes. Further costs of approximately $7m will be incurred during 2017 when the finance transition is completed along with further operations integration into the Americas. The final costs are expected to be $33m.

· BJI integration costs of £3.2m relate to the early exit of venue contracts and systems integration. The total integration costs of $10m will continue to be incurred through 2017.

· Acquisition costs in the year relate to due diligence and professional fees for the Allworld, BJI, CMI, The Battery Show and Secon acquisitions. A charge of £0.4m (2015: £0.2m) has been recognised for changes in earnout estimates on prior year acquisitions.

Disposal gains and losses

· Investment: we recognised income of £2.2m from Janus, a former investment, which had previously been impaired, resulting in the income being recognised as exceptional.

· Associate: a gain on the disposal of our associate investment Light Reading of £9.0m was recognised. We also held a vendor loan note asset of £7.8m from the previous divestment of the business which has been recovered in full though the disposal proceeds. In 2015 income of £2.1m was received from an associate which had previously been impaired.

· Non-core businesses: the disposal of the Electronics portfolio completed on 29 July resulting in a gain of £9.2m.

· In December we divested Ecobuild, recognising a loss of £35.1m including a non-cash write off of goodwill and intangible assets of £36.1m.

Impairment charges

The impairment charge of £3.4m reduces the net assets of the Index business in India to fair value less costs to sell, reflecting the disposal which was signed on 27 January 2017. In the prior year, we recognised an impairment of £1.9m for the UBM Americas Print operations which continued to be rationalised as OMS activities are aligned to Events operations. In addition in the prior year, we recognised a re-measurement loss of £4.2m on the step acquisition of eMedia Asia Limited.

Net financing expense

Net interest expense of £26.3m (2015: £26.0m) represents interest payments on our bonds and bank loans and pension interest, net of interest receipts on cash holdings and vendor loan notes. The net expense is broadly flat against the prior year owing to a lower pension interest charge of £0.6m (2015: £1.7m) and repayment of the £250m sterling bond in November 2016. This reduction was offset by the lower interest income from the Delta and Light Reading vendor loan notes after repayment and interest on the new bridge financing put in place on 13 December to fund the Allworld acquisition.

Discontinued operations

The PRN disposal completed on 16 June 2016 and accordingly the adjusted operating profit*, for the period to 15 June, of £28.1m has been disclosed as discontinued operations in the income statement.

A profit on disposal of £389.1m has been recorded which is net of disposal costs of £34.8m, a loss on the deal contingent forward contract of £20.4m and the recycling of historic FX movements from reserves of £32.6m.

An exceptional charge of £8.2m has been recognised for the settlement agreed in April 2016 in relation to the Axio legal case, net of specific provisions, recoveries and legal costs.

TAX

Current tax

The tax charge on continuing adjusted operating profit* was £29.2m (2015: £25.2m), representing an effective rate of taxation* for the year of 14.0% (2015: 14.7%). A bridge showing the main factors affecting the rate is shown below:

Deferred tax and one-off settlements includes a credit of £4.9m following the successful conclusion of discussions with tax authorities on certain prior year matters. The total cash paid in respect of income taxes in 2016 was £39.1m including £2.4m in respect of PRN profits (2015: £31.0m). The table below is a reconciliation of the 2016 expected tax charge to actual cash tax paid:

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

Our current tax liability as at 31 December 2016 was £61.9m (2015: £56.4m). Movements in the balance during 2016 were as follows:

The current tax liability includes £45.6m (2015: £42.8m) 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:

Deferred tax

During the year we have recognised additional deferred tax assets of £4.7m in respect of tax losses and other temporary differences, bringing the total assets recognised to £27.2m. 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 2016 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 2016, the total tax contribution of our continuing business was £61.0m (2015: £47.8m) - 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 2016 we collected taxes on behalf of governments (e.g. employee taxes and sales taxes) amounting to £56.2m (2015: £49.1m).

CASH FLOW

Conversion of adjusted operating profit* into cash

The ability to turn our 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 96% (2015: 107%) decreased due to the less beneficial working capital movement in a down biennial year, partly offset by reduced capital expenditure.

Capital expenditure for the year was £11.7m (2015: £28.3m), reflecting the disposal of PRN and lower levels of spend after the completion of Project CORE and 240 Blackfriars in early 2015. £3.6m of this expenditure related to the strategic spend on our new CRM platform.

We generated adjusted cash from operations* of £252.9m whilst free cash flow* was £159.6m. Cash invested in acquiring Allworld, BJI, CMI, The Battery Show and Secon and four minority interests totalled £428.7m (after costs). Dividend payments and purchases of shares totalled £354.7m including the special dividend paid in July of £243.7m. We received £494.7m from the disposal of PR Newswire and £43.2m from the disposals of the Electronics media portfolio, Light Reading, Ecobuild and the Janus investment (net of costs).

Free cash flow

Free cash flow* was £159.6m (2015: £196.8m).

Free cash flow* in 2016 has been impacted by negative working capital in a down biennial year and a higher level of spend on tax, integration costs and provisions, offset in part by lower capital expenditure.

Reconciliation of IFRS to adjusted cash generated from operations

ACQUISITIONS

We invested £379.7m in the acquisition of Allword excluding the Bahrain part of the business which completed in January 2017 and £82.7m in aggregate in the acquisition of four Events businesses: BJI, CMI, The Battery Show and Secon. Had we owned these businesses from 1 January 2016 they would have contributed a further £18.0m of revenue. We also made payments for contingent and deferred consideration for acquisitions made in prior years totalling £0.8m.

The 2016 acquisitions contributed adjusted operating profit* of £4.4m from the date of acquisition. The combined return on investment* from acquisitions made in the past three years is 11.0% with 2016 acquisitions contributing 9.9% in their first year. Excluding Advanstar the three year return is 12.1%.

Our return on investment* target framework requires acquisition returns in excess of our cost of capital in the first full year of ownership. During 2016 the framework was refined to adjust, where appropriate, 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 table below shows the performance of our acquisitions since 2014:

3 excluding working capital adjustments and including the latest estimate of expected contingent consideration.

4 2016 Return on investment only includes acquisitions where an event has traded under UBM ownership.

No trading for Allworld has been included in our 2016 results as the acquisition completed late in the year. We expect to incur exceptional integration costs of $20m over the next two-three years.

CAPITAL STRUCTURE

Debt and liquidity

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, the revolving credit facility was extended by one year to April 2021, the £250m of 6.5% Sterling bonds matured in November 2016 and a $365m Bridge facility was put in place in December 2016 to part fund the acquisition of Allworld. The £250m bond repayment was made through surplus cash following the PRN disposal and drawings on the revolving credit facility. At 31 December 2016, we had drawn £106.1m from the revolving credit facility and £295.7m from the Bridge facility, leaving an unutilised commitment of £293.9m available. Our debt facilities and maturities as of 31 December 2016 are summarised below:

Capital management

Our Financial Policy is to target 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 of 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 continue to maintain investment grade ratings from each of Moody's and Standard & Poor's.

Our net debt at 31 December 2016 was £596.8m, up from £484.9m at the end of 2015 primarily due to increased borrowings to fund the Allworld acquisition.

The ratio of net debt to EBITDA was 2.4 times at 31 December 2016 up from December 2015 because of the acquisition of Allworld. On a proforma basis assuming that Allworld was fully owned throughout 2016 the ratio would have been 2.3 times.

5 Includes fair value adjustments.

6 2015 reflects continuing operations EBITDA of £215.1m and discontinued operations EBITDA of £55.1m. 2016 includes continuing operations only.

Pensions

UBM operates defined benefit and defined contribution schemes, based primarily in the UK. A number of initiatives have taken place in 2016 to give members of the defined benefit section of the UBM Pension Scheme greater flexibility in accessing their pension.

At 31 December 2016, the aggregate accounting deficit was £50.6m, an increase of £25.9m compared to the deficit of £24.7m at the previous year end. The increase was due to changes in actuarial assumptions and market conditions, partially offset by asset returns and the initiatives noted above.

RETURN ON AVERAGE CAPITAL EMPLOYED (ROACE)*

The return on average capital employed measure has been reviewed during the year and an updated definition has been adopted from 1 January 2016 which is in line with market practice. ROACE is defined as post tax adjusted operating profit* over average shareholders' funds plus net debt (average capital employed). Capital employed is adjusted for impairment charges from 1 January 2016 onwards and consequently at the end of 2016 has been adjusted to include both the Ecobuild goodwill write off and the 2016 impairment charge.

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

RELATED PARTY TRANSACTIONS

Details of related party transactions in the 12 months ended 31 December 2016 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 Pounds Sterling. We also hold cash and cash equivalents in Pounds 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 2016:

8 $ or quasi-$ pegged

Approximately 72% of UBM's continuing revenues and 85% of UBM's continuing adjusted operating profit* are generated in US Dollars or quasi Dollar-pegged currencies, which has benefited the Group's reported financials given FX movements during the year. During the year the FX tailwind added £92.0m to continuing revenue and £31.3m to continuing adjusted operating profit*. Had the current rates (USD 1.26) persisted throughout the entire year the total FX benefit would have been approximately £129.4m to continuing revenues and £42.7m to continuing adjusted operating profit*.

The income statement exposure to foreign exchange risk is shown for our most important foreign currency exposures in the sensitivity analysis below, based on 2016 operations:

9 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

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 Business review.

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 2016 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 Accounting Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC), give a true and fair view of the assets, liabilities, financial position and result 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 2016 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 2016 and any material changes to the related party transactions described in the 2015 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 2016 Annual Report and Accounts. The preliminary announcement for the year ended 31 December 2016 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

21 February 2017

UBM plc Board of Directors:

Executive Directors:

Tim Cobbold (Group Chief Executive)

Marina Wyatt (Chief Financial Officer)

Non-Executive Directors:

Dame Helen Alexander (Chairman)

Dr Alan Gillespie CBE (Senior Independent Director)

Greg Lock

John McConnell

Mary McDowell

Terry Neill

Trynka Shineman (appointed 1 March 2016)

David Wei (appointed 1 November 2016)

Summary of principal risks

Macro-economic slowdown and/or exchange rate fluctuations

- A slowdown in the macro-economic environment or changes to the geopolitical environment 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

- 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 the expected returns from acquisitions

Specific country risk and emerging market exposure

- The geopolitical environment remains dynamic and our business operates in many geographies, particularly Emerging Markets, which may present logistical and management challenges due to different business cultures, languages 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 value from our investment.

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

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

- 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

- Similarly, additional venue capacity is introducing competition as well as enhancing opportunities for growth

Technological risk: 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. Having completed a system enhancement for UBM EMEA, progress has been made with UBM Americas. Failure to deliver these projects effectively could lead to increased costs, delays or erosion of UBM's competitive position

- 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.

Explanation of non-IFRS measures

Consolidated income statement

for the year ended 31 December 2016

* 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 2016

Consolidated statement of financial position

at 31 December 2016

These financial statements were approved by the Board of Directors and were signed on its behalf on 21 February 2017 by:

Consolidated statement of changes in equity

for the year ended 31 December 2016