Strategy Update - Events First

NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLEOR IN PART, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR ANYJURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO. 3 November 2014 UBM plc Strategy Update - Events First UBM plc's Chief Executive Tim Cobbold will today deliver UBM's "Events First"strategy. The presentation will set out the strategic priorities for thebusiness over the next three to five years and in particular how UBM will driveprofitable growth by focusing its resources on its largest and most profitableshows, increasing its efficiency and effectiveness through the consistent useof standardised systems and focusing on operational excellence. Commenting on the strategy update, Tim Cobbold said: "Events First recognises that the Events industry is a highly attractive,growing, global industry in which UBM is already a leading player. We have theopportunity to establish UBM firmly as the leading B2B events business globallyand thereby to create substantial value for shareholders." "To achieve this goal we will focus on our clear priorities: applying ourresources to grow our largest and most profitable shows; effecting a stepchange in the efficiency and effectiveness of our operational performance; andinvesting in customer insight to enhance their event experience." "The strategy we are announcing today will enable us to grow revenues ahead ofglobal GDP in our Events business and provide a basis for margin expansion overthe medium term." Market Context The Events market is a large, attractive global market which is forecast togrow at around five per cent per annum. UBM is a leading operator in a highlyfragmented market, strongly positioned for growth given its geographicweighting towards Emerging Markets and its diversification across attractiveindustry verticals. Innovation in social media, data capture and analysis, andin content delivery has the capacity to make UBM's events even more effectivefor customers, increasing their engagement and driving strong returns on theirmarketing spend. Driving Growth UBM's top 100 shows by revenue generated more than 96% of Events EBITA in 2013.UBM will focus its resources on growing these higher margin shows through thesharing of operational best practice and application of common tools formarketing and customer relationship management. In the future UBM will moreactively manage the balance of more than 200 shows while investing in thoseshows with greater growth opportunity. UBM will look to invest between £25m and £50m per annum in acquisitions ofEvents businesses subject to strict criteria, including return on investmentgreater than UBM's weighted average cost of capital in the first full year ofownership. Driving Efficiency and Effectiveness UBM will deploy standardised systems and processes consistently across thebusiness to better leverage UBM's scale advantage, drive efficiency andeffectiveness, and to further enhance UBM's capability as a consolidator in theindustry. Enhancing Value for UBM's Customers UBM will invest in data acquisition and analysis to improve insight intocustomers' needs. This will enable UBM to innovate using digital technologiesto both enhance customers' experience at events and return on their investment.As part of this UBM will continue to more closely align its Other MarketingServices segment with the Events segment, and will rationalize and exit OtherMarketing Services activities that are not well aligned. PR Newswire PR Newswire continues to enjoy brand and market leadership, notably in premiumwire services in the US. The business has demonstrated consistent revenuegrowth and strong operating profit due to its diverse product set and itsdiversified and high quality revenue base. Reflecting UBM's focus onshareholder value, the strategy for PR Newswire concentrates on its corestrengths in distribution while also leveraging PR Newswire's globaldistribution network to support further international expansion. Overall PRNewswire's revenues are expected to grow in line with GDP and margins to bestable with modest upside potential. Financial Impact and Policy To implement the strategy outlined above UBM expects to make capitalinvestments of approximately £15m in the period 2015-2017 in the developmentand roll-out of standardised systems. UBM also anticipates associatedimplementation and rationalisation costs of between £15m and £20m over theperiod 2015-2017 expected to be taken as operating expense. These investmentsare expected to give rise to annualised cost savings beginning in 2016 whichwill build to £10m per annum. Revenue growth in 2015 is expected to reflect the decision to rationalise UBM'ssmaller Events and to exit over time from certain activities in the OtherMarketing Services segment. Underlying margins in Events and OMS are expectedto be stable before the additional implementation costs referred to above, withupside potential over the medium term. Going forward, UBM intends to target a leverage ratio of between 1.5-2.0 timesnet debt / EBITDA which is consistent with investment grade metrics, willprovide flexibility for biennial cycles, and will provide capacity to invest inthe business. The Board will maintain its progressive dividend policy, targeting a dividendcovered two times by adjusted earnings through the cycle. Update on Advanstar The proposed acquisition has received Hart-Scott-Rodino antitrust clearance,satisfying the only regulatory condition to closing. In addition, UBM expectsto publish its shareholder circular and prospectus in the coming days, with ageneral meeting expected to be convened for the end of November. The proposedacquisition is expected to close around the year end. * Ends - Contacts UBM plc Peter Bancroft Director of [email protected] +44 207 921 5961 Communications Kate Postans Head of Investor [email protected] +44 207 921 5023 Relations Chantal Investor Relations [email protected] +44 207 921 5943Bradford Manager Brunswick Jon Coles, Andy Rivett-Carnac [email protected] +44 207 404 5959& Craig Breheny Notes to Editors 1. Interview with Tim Cobbold A recorded video interview with Tim Cobbold about UBM's strategy is available -subject to regulatory constraints - from UBM's website, www.ubm.com 2. About UBM plc UBM plc is a leading global events-led marketing services and communicationscompany. We help businesses do business, bringing the world's buyers andsellers together at events, online and in print. Our 5,000 staff in more than20 countries are organised into specialist teams which serve commercial andprofessional communities, helping them to do business and their markets to workeffectively and efficiently. For more information, go to www.ubm.com; for UBM corporate news, follow us onTwitter at @UBM_plc and go to http://media.ubm.com/social for more UBM socialmedia options. Cautionary statement regarding forward-looking statements This announcement may contain certain forward-looking statements, beliefs oropinions, with respect to the financial condition, results of operations andbusiness of UBM, Advanstar and the Enlarged Group. These statements, which contain the words "anticipate", "believe", "intend","estimate", "expect", "may", "will", "seek", "continue", "aim", "target","projected", "plan", "goal," "achieve" and words of similar meaning, reflectthe Company's beliefs and expectations and are based on numerous assumptionsregarding the Company's present and future business strategies and theenvironment the Company and the Enlarged Group will operate in and are subjectto risks and uncertainties that may cause actual results to differ materially.No representation is made that any of these statements or forecasts will cometo pass or that any forecast results will be achieved. Forward-lookingstatements involve inherent known and unknown risks, uncertainties andcontingencies because they relate to events and depend on circumstances thatmay or may not occur in the future and may cause the actual results,performance or achievements of the Company or the Enlarged Group to bematerially different from those expressed or implied by such forward lookingstatements. Many of these risks and uncertainties relate to factors that arebeyond the Company's or the Enlarged Group's ability to control or estimateprecisely, such as future market conditions, currency fluctuations, thebehaviour of other market participants, the actions of regulators and otherfactors such as the Company's or the Enlarged Group's ability to continue toobtain financing to meet its liquidity needs, changes in the political, socialand regulatory framework in which the Company or Advanstar operates or ineconomic or technological trends or conditions. Past performance of the Companyor Advanstar cannot be relied on as a guide to future performance. As a result,you are cautioned not to place undue reliance on such forward-lookingstatements. The list above is not exhaustive and there are other factors thatmay cause the Company's or the Enlarged Group's actual results to differmaterially from the forward-looking statements contained in this announcementForward-looking statements speak only as of their date and the Company, itsparent and subsidiary undertakings, the subsidiary undertakings of such parentundertakings and any of their respective directors, officers, employees,agents, affiliates or advisers expressly disclaim any obligation to supplement,amend, update or revise any of the forward-looking statements made herein,except where it would be required to do so under applicable law. You are advised to read this announcement and, once published, the Prospectusin their entirety for a further discussion of the factors that could affectUBM's future performance. In light of these risks, uncertainties andassumptions, the events described in the forward-looking statements in thisannouncement may not occur. No statement in this announcement is intended as a profit forecast or a profitestimate and no statement in this announcement should be interpreted to meanthat earnings per share of UBM for the current or future financial years wouldnecessarily match or exceed the historical published earnings per share of UBM.