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Intelligent Media United Business Media.

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Presentation on theme: "Intelligent Media United Business Media."— Presentation transcript:

1 Intelligent Media United Business Media

2 2003 Highlights Strong profit growth Effective cost management
Improving yields and revenue Successful investment programme Outlook positive CMP Media and PR Newswire now highly leveraged : 75% and 90% Product launches when many competitors were retrenching Caution on acquisitions none for 18 months, then over £125m of acquisitions in 2003 Over 12 margin in H1 03 and again set to achieve this in H2 Net cash positive balance sheet despite acquisition investment

3 Financial Results 2003 2002 Change % Underlying % 12 months to 31:12
Turnover (£m) Profit before tax * (£m) EPS * (p) Operating margin * (%) Dividend per share (p) Net cash (£m) 746.7 103.3 24.0 13.3 9.0 46.5 793.4 72.9 16.5 8.2 7.0 93.5 (5.9) 41.7 45.5 62.7 28.6 (50.3) (3.0) 53.1 *before amortisation of intangibles and goodwill and prior year exceptionals 3

4 Financial Results Progress accelerated in H2
2003 H2 2002 H2 Change % Underlying % Turnover (£m) Operating profit * (£m) Profit before tax * (£m) EPS * (p) Operating margin * (%) 4.3 402.7 57.4 57.8 13.3 14.3 380.6 27.5 32.2 7.7 7.2 5.8 108.7 79.5 72.7 97.3 143.8 *before amortisation of intangibles and goodwill and prior year exceptionals

5 The Last Three Years Transforming the business model
Business fundamentally re-engineered Reduced 2000 fixed cost base by over 30 per cent Strengthened market position Yields defended Increased organic investment Strategic, well priced, acquisitions Margin targets per cent target secured Medium term target of 15 per cent Maximised operating cash inflow Balance sheet strength CMP Media and PR Newswire now highly leveraged : 75% and 90% Product launches when many competitors were retrenching Caution on acquisitions none for 18 months, then over £125m of acquisitions in 2003 Over 12 margin in H1 03 and again set to achieve this in H2 Net cash positive balance sheet despite acquisition investment

6 2003 Recovery Underway Publishing and exhibitions
Underlying healthcare revenue up by 31 per cent H2 continuing tech revenue recovers to 2002 levels Asia post-SARS H2 ahead of 2002 CMPi achieves 19 per cent margin with significant cost savings UAP delivers 10 per cent profit growth Offline ROW profit breakout to follow

7 2003 Recovery Underway News Distribution
US wire volumes recovering towards year end Yields improving Significant restructuring and investment costs Market Research Syndicated and continuous strong Healthcare recovering Major restructuring to improve margin Offline ROW profit breakout to follow

8 Trading Outlook H2 trends continuing
Publications and exhibitions Improving tech climate Growth in healthcare Asia returns to pre-SARS volumes UK business growing margins News distribution Volumes and yields improving Eliminating losses in Europe Market research Growth in year end order book Restructuring to improve margin and revenue growth Acquisitions delivering

9 FINANCIAL REVIEW

10 Financial Results 2003 2002 Change % 12 months to 31:12 Turnover (£m)
Operating profit * (£m) Net Interest (£m) Other finance expense (FRS17) PBT * (£m) Taxation (£m) EPS * (p) Dividend per share (p) Average $: £ rate 746.7 99.4 9.4 (5.5) 103.3 (22.7) 24.0 9.0 1.64 793.4 64.9 10.1 (2.1) 72.9 (16.0) 16.5 7.0 1.51 (5.9) 53.2 41.7 41.5 45.5 28.6 8.6 Include here comments on both: lower tax rate exceptional items *before amortisation of intangibles and goodwill and prior year exceptionals

11 Operating Cash Conversion
2003 £m 2002 £m 12 months to 31:12 Operating profit (before goodwill) Depreciation Capex Working capital/other Operating cash inflow Cash conversion 99.4 25.3 (6.9) 0.1 117.9 119% 64.9 23.2 (10.9) 13.8 91.0 140% Capex will be higher in second half but still lower than prior year

12 Cashflow 2003 £m 2002 £m 12 months to 31:12 Operating cash inflow
Dividends paid Tax received Net interest received Acquisitions and investments, net of disposals Payments relating to property and restructuring Foreign exchange Ordinary and B share repurchase Other Movement in cash 117.9 (26.3) 8.4 2.3 (127.8) (23.1) 13.0 (2.6) (8.8) (47.0) 91.0 (14.4) 15.3 4.4 (10.4) (35.1) 24.0 (7.4) (23.2) 44.2 12

13 Breakdown of Net Cash and Interest
£m 31:12:03 £m £ Cash £ Debt $ Cash (in £) $ Debt (in £) Other Net Cash Loans to five Other financial expenses - FRS17 P&L Interest 191.0 (14.9) 415.5 (526.9) (18.2) 46.5 160.3 9.5 (1.6) 7.5 (14.8) (0.0) 8.8 (5.5) 3.9 13

14 Segmental Analysis 12 months to 31:12:03 Group Turnover
Operating Profit Total Growth on Prior Year Growth £m Reported % Currency Acquisition Underlying CMP Media 210.5 (11.6) (7.5) 1.0 (5.4) 14.8 317.6 384.4 CMP Asia 44.4 (13.1) (7.4) 0.0 9.9 12.6 (8.0) 20.3 CMPi 135.0 5.8 (0.5) 13.9 (9.6) 25.3 150.5 130.1 UAP 58.1 0.5 14.0 10.2 12.4 PR Newswire 94.8 (10.1) (6.8) (3.4) 13.4 (22.5) (9.3) NOP World 203.9 (4.3) (4.4) 19.3 7.8 30.5 746.7 (5.9) (4.9) 2.7 (3.0) 99.4 53.2 67.4 14

15 Underlying 2003 Revenue Change
Acquisitions £21.7m Underlying Decline (£22.5m) (3.0%) Biennials £1.8m Forex (£38.8m) SARS (£8.8m)

16 Geographic Segmental Analysis
Pacific 5% Pacific 11% EMEA 5% EMEA 13% UK 30% US 60% US 51% UK 25% Revenue Operating Profit

17 Investment Net debt capacity increased to around £500m
Minimum interest cover of 5 times Conservative approach to financing $375m of debt to be retired in 2004 Acquisition financial criteria 8% post tax hurdle rate Generally eps enhancing first full year Organic investment target paybacks Publishing and events in 1 to 2 years PRN and NOP in 3 to 5 years

18 Investments Delivering On track to generate 2004 £13m operating profit
Acquisitions Consideration £m CMPi Builder / Barbour, Property Media 81.0 CMP Media Oncology / Cliggott 23.1 UAP This Caring Business 1.7 NOP Eurisko 24.1 Total 129.9 Contributed £2.9m in 2003 profit

19 Investments Delivering Organic initiatives
H1 £m H2 £m Total £m Turnover 16.4 24.2 40.6 Operating profit/(loss) (2.8) (1.3) (4.1)

20 2003 £m 2002 £m Change % 12 months to 31:12 * Turnover
Operating profit 259.9 8.5 244.7 (4.8) 6.2 277.1 Net book values: five £129.4 m Other investments £43.6 m Audience share up to 6.6% Advertising share up to 8.1% * Unaudited

21 OPERATIONAL REVIEW

22 Margin Performance TOTAL 13.3 8.2 2003 % 2002 CMP Media 7.0 - CMP Asia
28.4 26.8 CMPi 18.7 7.9 UAP 24.1 21.9 PR Newswire 14.1 16.4 NOP World 9.5 8.4

23 Professional Media: CMP Media
2003 2002 Change % Turnover (£m) 12 months to 31:12 210.5 238.2 (11.6) Operating Profit (£m) Operating Margin (%) 14.8 7.0 (6.8) - 317.6 -

24 CMP Media Product Areas Percentage $ revenue change

25 CMP Media 2003 Review Scale improvements in operating efficiency
Increased market share to 28.9 per cent Yields firm, up 4 per cent in ’03, 8 per cent in H2 Channel strong, also online and events Traction in organic product developments Over £10m in revenue in 2003 Adding £3m to operating profit Online revenues strong, same level as 2001 Event attendee numbers still strong, some niches up on 01

26 CMP Media High Tech Ad page volumes % change on same month in prior year
Large higher yielding titles trending better than total

27 CMP Media 2003 Review - Healthcare
CME, Print, Events, Online Healthcare H2 ad page volumes up 4 per cent Underlying revenues up 42 per cent in H2 Well positioned in fast growing sectors Psychiatry & Neurology Acquired leading Oncology titles Acquisition outperforming business case Benefiting from increase in new drug launches Online revenues strong, same level as 2001 Event attendee numbers still strong, some niches up on 01

28 Professional Media: CMP Asia
2003 2002 Change % Turnover (£m) 12 months to 31:12 44.4 51.1 (13.1) Operating Profit (£m) Operating Margin (%) 12.6 28.4 13.7 26.8 (8.0) 5.8

29 CMP Asia 2003 Review Post-SARS H2 performance well ahead of prior year
SARS – recovered £3.8m in insurance Growth in China Successful Japanese acquisition (KSS) H2 growth in jewellery and shipping 14 new launches during 2002 & 2003 7 scheduled for 2004 Online revenues strong, same level as 2001 Event attendee numbers still strong, some niches up on 01

30 Professional Media: CMPi
2003 2002 Change % Turnover (£m) 12 months to 31:12 135.0 127.6 5.8 Operating Profit (£m) Operating Margin (%) 25.3 18.7 10.1 7.9 150.5 136.8

31 CMP Information 2003 Review
Underlying revenue down 9.6 per cent Underlying profit up per cent Significant costs savings drive margin to 18.7 per cent Successful new products £81m of acquisitions on track to deliver £9m 2004 profit Online revenues strong, same level as 2001 Event attendee numbers still strong, some niches up on 01

32 Professional Media: UAP
2003 2002 Change % Turnover (£m) 12 months to 31:12 58.1 58.1 0.0 Operating Profit (£m) Operating Margin (%) 14.0 24.1 12.7 21.9 10.2

33 UAP 2003 Review Delivered strong profit growth on flat revenues
Achieved further operating efficiencies All major products grew profits Strengthening position in core markets Successful cross selling: Auto Exchange / E&M Strength of new products / online: DaltonsBusiness.com Integrated “This Caring Business” to plan Widens range of specialised titles Online revenues strong, same level as 2001 Event attendee numbers still strong, some niches up on 01

34 PR Newswire - News Distribution
2003 £m 2002 £m Change % 12 months to 31:12 Turnover America RoW 86.0 8.8 94.8 16.1 (2.7) 13.4 14.1 95.6 9.8 105.4 19.3 (2.0) 17.3 16.4 (10.0) (10.2) (10.1) (16.6) - (22.5) (13.9) Operating profit America RoW Margin

35 Quarterly Newswire Volumes Core US News Distribution in thousands
H1 volumes down 8%, H2 just ahead of prior year 54.8 54.7 35k->

36 PR Newswire – News Distribution 2003 Review
Message volumes up in Q4 2003 No of US companies declined again (down net 300) During 2003 IPOs started overtaking delistings Discretionary releases increasing New product announcements up 9 per cent Newswire H2 yields up 1 per cent Margins held back in H2 due to restructuring and organics Europe and Asia challenging High operational leverage Online revenues strong, same level as 2001 Event attendee numbers still strong, some niches up on 01

37 NOP World - Market Research
2003 £m 2002 £m Change % 12 months to 31:12 Turnover America RoW 127.6 76.3 203.9 14.0 5.3 19.3 9.5 138.2 74.8 213.0 13.0 4.9 17.9 8.4 (7.7) 2.0 (4.3) 8.6 6.7 7.8 12.6 Operating profit America RoW Margin

38 NOP World – Market Research 2003 Review
Strong performances from syndicated and continuous Healthcare and ad hoc improving Underlying margin growth Restructuring to improve margin and drive key sector growth Strengthened management team Substantial investment in new products Eurisko acquired Leading position in Italy & new products for NOP network Rapid growth in online Online revenues strong, same level as 2001 Event attendee numbers still strong, some niches up on 01

39 Summary 2003 Achievements 2004 Outlook Business model transformed
Yields and revenue improving Investment programme success Revenue and margin growth Investments delivering, more to come Trading climate improving

40 NOP World “Growing The Future”
Healthcare Financial Business & Technology Consumer & Retail Auto Brand Strategy Market Opportunity Customer Management Marketing Effectiveness Consulting Mystery Shopping MRI Syndicated Sales Key Account Management Client Satisfaction NOP World Growth Client Focus: SECTORS Industry Expertise Client Expertise Client Penetration Technology Operations Human Resources Finance


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