[PPT] - FY18 Half-year results presentation Andrew Rashbass and Colin Jones PowerPoint Presentation

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Andrew Rashbass and Colin Jones 17 May 2018

FY18 Half-year results presentation

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Strategy recap

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Euromoney’s capital allocation decisions can be understood along two dimensions

Structure

We characterise the business models of B2B information companies into three generations, which we call B2B Information 1.0, 2.0 and 3.0. We service fundamentally cyclical markets. Understanding which point in the cycle they are in is fundamental to our capital allocation decisions.

Cycle

Plotting the businesses along the axes supports our investment decisions, capital allocation and defines strategic priorities.

Quadrants

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Successful B2B information companies will be 3.0 businesses

Structure

+

B2B Information 1.0 Print Monologue Advertising-centric Product-centric B2B Information 2.0 B2B Information 3.0 Digital Dialogue Subscriptions Customer-centric Embedded in workflow Part of the industry structure Licensing revenues based on customer outcomes Solution-centric

We aim to anticipate our markets’ development to become 3.0

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Market cycles impact the sectors that we serve

Cycle

Equities Commodities Banking and financial institutions

Commodity index Equity index Bank shares index

50 100 150 200 250 300 350 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2,200 2,400 2,600 60 80 100 120 140 160 180 200 220 240 1990 1994 1998 2002 2006 2010 2014 2018 1991 1995 1999 2003 2007 2011 2015 2018 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Source: S&P 500 index Source: Bloomberg Commodity index Source: S&P Bank index

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Based on the cycle and structure we categorise the businesses in the portfolio

Quadrants

The quadrants guide investment decisions, capital allocation and also define strategic priorities

B2B Information 3.0

3

Prepare for the upturn

Protect and enhance competitive position
Selective investments for when cycle turns
Opportunistic revenue initiatives
Tight cost control
Fix any operational deficit

B2B Information 1.0 Challenged market Strong tailwinds

1

4 2

Cycle Structure

Invest Use the time wisely Disinvest

Modest investment to move to top-right quadrant
Maximise short-term profit and cash
Fix any operational deficit
Consider divestment
Maximise short-term profit and cash
Divest
Prevent future build-up
New product development
Sales and marketing
Acquisition
Fix any operational deficit
Accelerate transition to 3.0

+ +

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The actions dictated in the quadrant can be collected into our three key pillars of strategic activity

Prepare for the upturn Invest 3 4 1 2 Disinvest Use the time wisely Prepare for the upturn Invest 3 4 1 2 Disinvest Use the time wisely Prepare for the upturn Invest 3 4 1 2 Disinvest Use the time wisely

Invest around big themes

Actions depend on market characteristics

Disruption Semi-opaque market Inefficiency Barriers to entry Challenged business models

Transform the operating model Actively manage the portfolio

Product development and creating our future

perating model

3.0 Business model Must have, not nice to have Create once, sell many Best of both worlds

Recycling capital

Acquisition Disposal

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Our portfolio of businesses are split into four segments composed of six divisions with support from central functions

Telcoms Specialist Information Euromoney Institutional Investor PLC Banking & Finance Asset Management Banking & Finance Investment Research Institutional Investor Pricing, Data & Market Intelligence Commodity Events Price Reporting Central functions Corporate Development Finance HR IT Marketing Legal, Risk and Programmes

Legal Media Group Project and Asset Financing Insurance Derivatives

Segment Division

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Good first-half performance: total revenue up 3%, Adjusted PBT up 6%
Significant growth in Pricing, Data & Market Intelligence segment outpacing weak

Asset Management, particularly BCA

Strong growth from events businesses across all sectors, particularly from large,

annual events

Active portfolio management continues
Sale of Global Markets Intelligence Division completed in April
Strong underlying cash generated from operations, bringing net debt down to £37m

(before Global Markets Intelligence Division net cash of £103m)

Second half – more of the same, both ways

Headlines

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Half-year results

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H1 FY17 H1 FY18 Change Total revenue1 (£m) 203.2 209.6 3% Adjusted PBT1 (£m) 49.1 52.0 6% Adjusted operating margin1 24.1% 25.5% 1.4% Statutory PBT (£m) 9.3 121.1 Adjusted EPS1 (p) 32.7 38.4p 17% Dividend per share (p) 8.8 10.2 16% Net debt (£m) (83.6) (37.0) 46.6

1. Includes the results of continuing and discontinued operations and is reconciled in the appendix to the Interim Financial Report.

Half-year snapshot

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H1 FY17 to H1 FY18 total revenue1 bridge (£m)

1. Includes the results of continuing and discontinued operations.

203.1 209.6 203.2 (4.7) 4.6 6.5

H1 FY17 FX Net M&A (incl GMID) H1 FY17 underlying revenue (restated on H1 FY18 basis for continuing businesses) Business growth H1 FY18

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H1 FY17 to H1 FY18 total revenue1 bridge (by segment) (£m)

1. Includes the results of continuing and discontinued operations.

209.6 203.1 (4.0) 6.1 2.4 2.0

H1 FY17 underlying revenue (restated on H1 FY18 basis for continuing businesses) Asset Management Pricing, Data & Market Intelligence Banking & Finance Commodity Events H1 FY18

Business revenue growth £6.5m

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H1 FY17 to H1 FY18 Adjusted PBT1 bridge (£m)

1. Includes the results of continuing and discontinued operations.

50.7 52.0 49.1 0.3 1.3 (3.8)

H1 FY17 FX Net M&A (incl GMID) H1 FY17 Underlying Adjusted PBT (restated on H1 FY18 basis for continuing businesses) Central costs (incl interest) Business profit (incl Associates and JVs) H1 FY18

5.1

Interest (£1.2m) Central costs (£2.6m)

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H1 FY17 to H1 FY18 underlying1 segmental performance (£m)

Revenue Profit

Structural headwinds in Investment Research, profit protection Continued investment in top-right quadrant US and China events Mining Indaba

Total

6.5 5.1

1. At constant exchange rates, including pro forma prior year comparatives for acquisitions and excluding disposals, discontinued operations.

Banking & Finance Commodity Events Asset Management Pricing, Data & Market Intelligence Associates/JVs Restructuring of Zanbato ownership

1.9 1.0 3.1 (1.6) (4.0) 6.1 2.4 2.0 0.7

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1) 2017 and 2018 percentages include other revenues but excludes revenues from sold/closed businesses. In 2018 only, discontinued operations are excluded from the percentages for both quarters.

Underlying1 revenue by type

Y-o-Y % change FY17 Actuals H1 FY18 Actuals Q1 Q2 Q3 Q4 Q1 Q2

Proportional Split

Subscriptions and content 1% 2% 1% 1% 2% 1%

58%

Advertising (16%) (10%) (5%) (3%) (5%) (5%)

8%

Events (14%) 2% 4% (8%) 9% 12%

34%

Total (5%) 1% 2% (2%) 3% 4%

100% Revenue change by quarter

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H1 FY18 revenue and profit matrix by segment/type1 (incl GMID)

1. Figures are total revenues for the period; percentages are underlying growth rates compared to the same period in 2017. See slide 40 for notes and colour key Asset management

59.9

(6%)

5.7 (10%) 6.4

3%

0.0 (16%) 72.0

(5%)

27.1

(6%) Pricing, data & market intelligence

64.0

9%

5.5

(2%)

18.7

9%

0.5 (26%) 88.7

8%

30.5

13% Banking & finance

4.1

5%

3.8

(4%)

22.7

12%

0.5

(7%)

31.1

8%

6.5

19% Commodity events

15.2

15%

0.3 (33%) 15.5

15%

8.4

30% Total segment revenue/profit

128.0

2%

15.0

(5%)

63.0

11%

1.3 (21%) 207.3

4%

72.5

7% Closed & sold businesses/ central costs (incl FX/interest/associates & JVs)

2.3 (20.5)

Total revenue/Adjusted PBT

209.6

4%

52.0

4% Total Profit (£m) Revenue (£m) Other Total Events

N/A N/A

Subscriptions/ Content Advertising

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H1 FY18 revenue and profit matrix by segment/type1 (excl GMID)

Increasing divergence in subscriptions performance between Asset Management and Pricing,

Data & Market Intelligence

Strong underlying growth from events portfolio, reflecting focus on large ‘must-attend’ annual

events

Advertising drag, but represents only 8% of H1 revenue

Asset management

59.9

(6%)

5.7 (10%) 6.4

3%

0.0 (16%) 72.0

(5%)

27.1

(6%) Pricing, data & market intelligence

43.5

12%

5.5

(2%)

18.7

9%

0.5 (30%) 68.2

10%

23.9

15% Banking & finance

4.1

5%

3.8

(4%)

22.7

12%

0.5

(7%)

31.1

8%

6.5

19% Commodity events

15.2

15%

0.3 (33%) 15.5

15%

8.4

30% Total segment revenue/profit

107.5

1%

15.0

(5%)

63.0

11%

1.3 (23%) 186.8

4%

65.9

7% Closed & sold businesses/ central costs (incl FX/interest/associates & JVs)

2.3 (20.5)

Statutory revenue/Adjusted PBT

189.1

4%

45.4

3%

N/A N/A

Subscriptions/ Content Advertising Total Profit (£m) Revenue (£m) Other Total Events 1. Figures are total revenues for the period; percentages are underlying growth rates compared to the same period in 2017. See slide 40 for notes and colour key

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Adjusted operating margin: year-on-year movement

H1 FY17 adjusted operating margin 24.1% FX (incl hedging) 0.7% Net M&A (incl GMID) 0.1% Underlying business: Commodity Events 0.7% Asset Management (0.3%) Pricing, Data & Market Intelligence 0.8% Banking & Finance 0.2% 1.4% Central costs (0.8%) 0.6% H1 FY18 adjusted operating margin 25.5%

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£0.3m year-on-year FX benefit to adjusted

PBT: – GBP/USD rate strengthened 11 cents – £3.6m FX loss on translation of overseas profits – £2.4m FX loss on UK embedded revenues, offset by absence of hedging losses of £7.5m – £1.0m FX loss on balance sheet revaluation (H1 FY17: £0.2m gain)

Current rate $1.35 vs H2 rate last year $1.29
H2 will continue to benefit from the absence
f last years hedging losses

Impact of FX

GBP/USD rate

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1. As reconciled in appendix to Interim Financial Report.

H1 FY18 cash flow (£m)

95.4 65.3 (23.8) (2.0) (18.7) (2.5) 3.9 (37.0)

Net debt at Sept 30 2017 Net M&A Underlying cash generated from

perations

Dividends Capex Net tax Interest Other Net debt at Mar 31 2018

Underlying 12-month cash conversion 108%

(154.6)

Excludes GMID net proceeds £103m

(see slide 37)

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Outlook & summary

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Events

98,000 100,000 102,000 104,000 106,000 108,000 110,000 112,000 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

Events 52 week rolling sales at constant GBP/US$ rate (£000)

2015 2016 2017 2018

£7m, 7.0%

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Advertising

35,000 37,000 39,000 41,000 43,000 45,000 47,000 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

Advertising 52 week rolling sales at constant GBP/US$ rate (£000)

2015 2016 2017 2018

(£0.1m), (0.2%)

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Subscriptions book of business (excl GMID)

1. The Group’s total Book of Business also includes £7m relating to the Banking & Finance segment.

(8.0%) (6.0%) (4.0%) (2.0%)

2.0%

4.0% 6.0% 8.0% 10.0% 12.0% 14.0% May Jun Jul Aug Sep Oct Nov Dec Feb Mar Apr

Book of business growth at constant GBP/US$ rate adjusted for net M&A (%)

Group¹ Pricing, Data & Market Intelligence Asset Management

£79m, 10.1% £204m, 2.5% £119m, (1.8%) £205m, 0.6% £86m, 11.1% £112m, (6.0%)

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Page 26 1. FY18 reported revenue (excluding GMID)

Revenue by segment (first half1), proportion of total group revenue

Pricing, data and market intelligence, 36% Commodity events, 8% Institutional Investor, 16% BCA, 16% NDR, 6% 39% Asset management Other,1% Banking & Finance, 17%

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Asset management book of business

(12.0%) (10.0%) (8.0%) (6.0%) (4.0%) (2.0%)

2.0%

May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

Asset Management Book of Business growth at constant GBP/US$ rate adjusted for net M&A (%)

Asset Management II Memberships BCA NDR

NDR BCA II Memberships Asset Management £35m, (0.7%) £112m, (6.0%) £56m, (8.1%) £21m, (8.7%) £61m, 1.3% £119m, (1.8%) £35m, (4.3%) £23m, (5.6%)

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Mixture of factors:

– Pressure on research budgets – MiFID II – Sales and marketing “operational deficit” particularly in North America – Product maturity

Quasi “bottom left” but taking bottom-left actions:

– Cost management and profit protection – Investment in sales and marketing, particularly in North America – Investment in growth products

BCA different to Institutional Investor and somewhat different to NDR

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Colin retires in June, Wendy starts in August
Strong growth in Pricing, Data & Market Intelligence
Q3 events booking well (despite tougher comparatives)
BCA faces headwinds
Standalone costs bottoming out (and debt paydown means lower interest)
FX?
Strong cash and balance sheet

In summary, first-half trends continuing and we are confident of meeting Board expectations for the full year

H2 Outlook & summary

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Q&A

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Andrew Rashbass and Colin Jones 17 May 2018

FY18 Half-year results presentation

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Appendix: Supplementary information

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Adjusted Statutory Revenue (£m) 209.6 189.1 Operating profit (£m) 53.5 122.7 Operating margin (%) 25.5% 64.9% Profit before tax (£m) 52.0 121.1 EPS (p) 38.4p 101.8p

H1 FY18 adjusted and statutory results

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Statutory profit (£m)

0.8 121.1 52.0 (11.2) 84.8 (4.4) (0.9)

Adjusted PBT Acquired intangible amortisation Exceptional items (slide 35) GMID (slide 45) Associates/ JVs Acquisition commitments Statutory PBT

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1. See note 4 of the Interim Financial Report for fuller description.

Exceptional items1

£m H1 FY18 Profit on disposal of businesses 86.8 Impairment (3.0) Restructuring and other 3.0 Continuing operations 86.8 Discontinued operations (2.0) Total 84.8

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1. See note 5 of the Interim Financial Report.

Net finance costs1

£m H1 FY17 H1 FY18 Interest on DMGT debt facility (0.1)

Interest on cash deposit with DMGT

0.1

Interest on external borrowings

(0.9) (2.4) Interest on tax (0.1) 0.1 Other (0.1)

Adjusted net finance costs

(1.1) (2.3) Acquisition deferred consideration 0.1 (1.1) Acquisition commitments 2.1 1.8 Total net finance costs 1.1 (1.6)

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1. See note 6 of the Interim Financial Report.

Tax1

£m H1 FY17 H1 FY18 Adjusted PBT 49.1 52.0 Total tax charge (1.9) (15.5) Other tax adjustments (8.3) 5.1 Adjusted tax charge (10.2) (10.4) Adjusted effective tax rate 21% 20%

Full-year adjusted effective tax rate is expected to be 20% (FY17: 19%)
Rule changes enacted as part of US Tax Reform mean the adjusted effective tax rate is

expected to increase by approximately 3% to 23% in FY19

H1 cash tax outflows of £18.7m include one-off amounts of £5.6m

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Cash conversion

£m 12 months to H1 FY17 12 months to H1 FY18 Adjusted operating profit 103.6 111.6 Cash generated from operations 117.8 116.8 Exceptional items 10.1 5.9 Timing differences (3.8) (1.8) Underlying cash generated from operations 124.1 120.9 Cash conversion % 114% 105% Underlying 12-month cash conversion % 120% 108%

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Deferred revenue1

March-17 to March-18 £m Subscriptions Events Advertising Opening balance 90.9 34.7 3.1 Net M&A 11.8 1.3

FX

(7.7) (1.6) (0.1) Adjusted opening balance 95.0 34.4 3.0 Underlying movement 3.6 (0.6) (1.0) Closing balance 98.6 32.2 2.0 Underlying growth % 4% (2%) (33%)

1. Excludes deferred revenue classified within total liabilities of businesses held for sale.

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H1 FY18 revenue and profit matrix by segment/type (£m)

Notes  The absolute £ figures represent total segment revenue/profit, central costs and Adjusted PBT.  The percentages represent underlying growth rates, including pro forma prior year comparatives for acquisitions and excluding disposals, discontinued operations and significant event timing differences at constant exchange rates.  Total segment revenue of £209.6m includes FX on forward contracts (+£0.5m) and disposals (+£1.8m). Key  Dark green – growth more than 2%  Light green – growth of 0% to 2%  Amber – decline of 0% to -1%  Pink – decline of -1% to -5%  Dark red – decline more than -5%  The white cells have not been colour-coded due to their size

Asset management

59.9

(6%)

5.7 (10%) 5.8

3%

0.6

4%

0.0 (16%) 72.0

(5%)

27.1

(6%) Pricing, data & market intelligence

64.0

12%

5.5

(2%)

9.2

15%

9.5

4%

0.5 (30%) 88.7

10%

30.5

15% Banking & finance

4.1

5%

3.8

(4%)

11.8

27%

10.9

(1%)

0.5

(7%)

31.1

8%

6.5

19% Commodity events

3.6

5%

11.6

19%

0.3 (33%) 15.5

15%

8.4

30% Total segment revenue/profit

128.0

1%

15.0

(5%)

30.4

15%

32.6

7%

1.3 (23%) 209.6

4%

72.5

7% Central costs (incl FX/interest/associates & JVs)

(20.5)

Adjusted PBT

52.0

3%

N/A N/A

Subscriptions/ Content Advertising Sponsorship Total Profit (£m) Revenue (£m) Delegates Other Total

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Total revenue by segment

£m H1 FY17 H1 FY18 Total Underlying1 Asset management 82.5 72.0 (13%) (5%) Pricing, data & market intelligence 72.3 88.7 23% 10% Banking & finance 29.8 31.1 4% 8% Commodity events 13.7 15.4 12% 15% Sold/closed businesses 11.9 1.8

FX hedges

(7.0) 0.5

203.2

209.6 3% 4%

1. At constant exchange rates, including pro forma prior year comparatives for acquisitions and excluding disposals, discontinued operations and significant event timing differences.

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1. At constant exchange rates, including pro forma prior year comparatives for acquisitions and excluding disposals, discontinued operations and significant event timing differences.

Total revenue by type

£m H1 FY17 H1 FY18 Total Underlying1 Subscriptions and content 124.1 128.0 3% 1% Advertising 15.9 15.0 (6%) (5%) Sponsorship 26.5 30.4 14% 15% Delegates 30.2 32.6 8% 7% Other 1.6 1.3 (14%) (23%) Sold/closed businesses 11.9 1.8

FX hedges

(7.0) 0.5

Total

203.2 209.6 3% 4%

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1. At constant exchange rates, including pro forma prior year comparatives for acquisitions and excluding disposals and significant event timing differences. In FY18, discontinued

perations are also excluded from both years.

2. Includes other revenues but excludes revenues from disposal. FX hedging losses restated in prior year at current year level. In FY18, discontinued operations are also excluded from both years.

Underlying1 revenue change by quarter

Y-o-Y % change FY17 H1 FY18 Q1 Q2 Q3 Q4 Q1 Q2 Subscriptions and content 1% 2% 1% 1% 2% 1% Advertising (16%) (10%) (5%) (3%) (5%) (5%) Sponsorship (14%) 5% 5% (6%) 15% 15% Delegates (14%) 1% 2% (11%) 5% 9% Total2 (5%) 1% 2% (2%) 3% 4%

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Adjusted operating profit by segment1

£m H1 FY17 H1 FY18 Total Underlying2 Asset management 28.9 27.1 (14%) (6%) Pricing, data & market Intelligence 23.0 30.5 15% 15% Banking & finance 4.1 6.5 14% 19% Commodity events 6.3 8.4 23% 30% Sold/closed businesses 1.2 0.6

Central costs

(7.7) (19.1)

FX hedges/balance sheet

(6.8) (0.5)

Total

49.0 53.5 9% 3%

1. H1 FY18 figures reflect changes in FY18 internal cost allocations between segments and central functions. To calculate growth rates, H1 FY17 has been restated to reflect these changes in internal cost allocations. 2. At constant exchange rates, including pro forma prior year comparatives for acquisitions and excluding disposals and significant event timing differences.

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Sale of GMID in April for an equity value of $180.5m
Gross cash proceeds of $180.5m (£128.8m)
Expected net cash proceeds of $145m (£103.1m)
FY18 reflects estimated 7 months to April

GMID disposal1

£m H1 FY17 H1 FY18 FY17 FY18 Revenue 20.9 20.5 41.5 23.8 Adjusted operating profit 6.4 6.4 11.9 7.5 Statutory PBT 6.3 4.4 9.2

1. See note 9 of the Interim Financial Report for fuller description.

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Page 46 1. Based on rolling 12 months of reported revenue and profit for the period to 31 March 2018

Impact of FX1

GBP/USD H1 FY18 H1 FY17 Average rate 1.36 1.25 Closing rate 1.40 1.25 GBP/USD 1¢ movement (before hedging) Revenue +/- £1.7m Operating profit +/- £0.7m

US$, 69% £, 15% €, 7% Other, 9% REVENUE US$, 75% £, 18% €, 3% Other, 4%

OPERATING PROFIT