REG - Informa PLC - Ten-Month Trading Update

InformaAnnouncement

14/11/2023 07:15

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RNS Number : 3034T  Informa PLC  14 November 2023

 Informa LEI: 5493006VM2LKUPSEDU20

Informa PLC: Ten-Month Trading Update

14 November 2023

Accelerating Growth

Informa's major brands, geographic breadth and depth in specialist markets are
delivering further outperformance in 2023 and strong momentum into 2024

Informa (LSE: INF.L), the international B2B Events, Specialist Data, Digital
Services and Academic Markets Group today published a trading update,
confirming continuing strong growth across the portfolio, a further increase
to 2023 market guidance and an extended share buyback programme.

 Stephen A. Carter, Group Chief Executive, Informa, said:

 "At Informa, we have built leading positions serving B2B and Academic Markets
 around the world, embedding our products and services with customers, and
 creating long-term opportunities for growth and scale."

 He added: "We are confirming an upgrade to revenue and profit in 2023 and
 extending our share buyback programme to £1.15bn. In 2024, our task is to
 continue to improve our product and service offering, grow organically, and
 use our cash flows and balance sheet to seize opportunities to build and buy
 further scale."

Highlights

·      2023 Outperformance...Strength and momentum across the portfolio
(10-month Group underlying revenue growth of 31.7%), lead to a further
increase in 2023 full year expectations to Revenues of £3.15bn+ (from
£3.05bn) and Adjusted Operating Profit of £840m+ (from £790m);

·      Specialisation…75+ Research subject areas, 600+ major B2B
Brands, 20+ B2B market categories, 15 specialist Tech Research sectors, 40+
Digital Media Brands, 20m+ known, engaged audience;

·      First Party Data & Technology...The scale and depth of our
First Party Data, delivered by IIRIS, and the increasing application of
artificial intelligence in customer service, search, content and data
analytics, is enhancing customer value, improving efficiency and creating
growth opportunities;

·      B2B Leadership…In an increasingly digital world, demand for
high quality face-to-face connections, B2B market access and highly qualified
sales intelligence is higher than ever, fuelling strong underlying growth at
Informa Markets (+65.0% after 10 months), Informa Connect (+15.6%) and Informa
Tech (+5.6%);

·      Academic Strength…The market for specialist, verified knowledge
and research is also in structural growth, underpinning the continuing
strength of Taylor & Francis (+3.2%). Underlying strength in Pay-to-Read
Subscriptions and Advanced Learning is being supported by growth in open
research volumes and other Pay-to-Publish services;

·      International Breadth…The power of our Brands and operating
reach across 10+ major markets deliver breadth and growth, with full year
revenues expected to exceed 2019 pre-covid levels in North America, South
America, ASEAN, the Middle East, Europe and China;

·      Targeted Expansion...In 2023 we have redeployed £1bn+ of Informa
Intelligence proceeds (c.£2.5bn value / c.28x average EV/EBITDA) into
M&A, at an average post-synergy multiple of c.9x EV/EBITDA. These
businesses are immediately contributing to growth, whilst further
strengthening our market positions in Foodservice (Winsight), Specialist Tech
Research (Canalys), Packaging and Aviation (Tarsus) and Healthcare Technology
(HIMSS);

·      Accelerating shareholder returns...An improving underlying
performance, cash flow and balance sheet strength enables us to extend the
share buyback programme to £1.15bn, an increase of up to £150m through to
our Full Year Results on 7 March 2024.

 

Trading Update: Accelerating Growth

2023 Outperformance: Full Year Revenue and Adjusted Profit ahead of market
guidance

The strength, depth and international breadth of our portfolio of specialist
brands continues to deliver good performances across the Group, giving us
confidence in a strong outcome in 2023 and continuing momentum into 2024.

Our updated 2023 Group guidance is for Revenue of £3.15bn+ (up from £3.05bn)
and Group Adjusted Operating Profit of £840m+ (up from £790m, average
GBP/USD at 1.24).

This performance represents a c.10% increase on 2019 Group revenues or a c.20%
increase excluding the Informa Intelligence businesses that have since been
divested.

2024 Outlook

Ongoing conflict and macro-economic challenges in some countries, including
heightened inflation, higher interest rates and variable demand, is creating a
degree of market uncertainty and volatility.

Informa's strategic focus on growing, specialist B2B and Academic Markets
(rather than B2C Markets), combined with major brands and international
breadth, provides resilience and strength. Furthermore, our range of
specialist products and services, which are deeply embedded within our
customer markets, deliver forward visibility and predictability, including
subscription revenues in both academic research and B2B data and analytics,
and advance bookings across our B2B events portfolio, providing visibility on
c.£1bn of 2024 revenue to date.

Informa Markets...International Scale, Specialisation and Growth

Major B2B brands, reach and breadth across 10+ major international markets and
deep positions in 20+ growing market categories is delivering accelerating
growth across our portfolio of transaction-led, live and on-demand events.

Full year revenues will be ahead of 2019 levels in all major geographies,
including North America, South America, ASEAN,  Europe and China, the latter
having seen significant acceleration through the year following the removal of
COVID restrictions.

Similarly, we have seen growth in all major market categories in 2023, with
particularly strong performances in Healthcare (Arab Health, Medlab), Health
& Nutrition (Natural Products Expo West, Supplyside West), Pharma (CPhI
Worldwide, CPhI China), Beauty (China Beauty Expo) and Luxury (Fort Lauderdale
International Boat Show, Art Miami, Monaco Yacht Show).

Structural demand for face-to-face connections and B2B market access remains
high, and the quality of our product offering is improving, with technology
enabling better matchmaking between buyers and sellers, on-demand access to
content and data to support faster decision making and a range of other
value-added services.

Tarsus: Combination and Growth

The Tarsus business has continued to perform well post-acquisition ($940m
valuation / sub-9x post-synergy EV/EBITDA), delivering 65% underlying revenue
growth through the period to date, with strong performances in Healthcare
(Health Connect Partners), Anti-Aging & Aesthetics (A4M Spring Congress)
and Aviation (Dubai Airshow).

Alongside operational delivery, we have been focused on combining the Tarsus
businesses and brands with Informa and this process is now largely complete,
ensuring we will enter 2024 as one business. This sees c.60% of Tarsus' 2024
revenue included within Informa Markets (including all major biennial events),
with c.40% combined into Informa Connect, where we see increasing
opportunities for differentiated High Value, Branded, Specialist Professional
Content-led B2B Events (eg SuperReturn, Bio-Europe, IM Power, A4M).

It is our intention to report full year 2023 divisional revenue and operating
profit on an integrated basis, including the Tarsus contribution.

Informa Connect…Content, Community and Growth

Major content-led brands, international reach and depth across industries and
professional communities and increasingly powerful customer data and analytics
are delivering strong growth across Informa Connect.

Post the addition of Tarsus and Winsight brands, the business is generating
more than £600m of annual revenue, split broadly two thirds Live &
On-Demand Events and one third Digital Services, with 70%+ of revenue
generated in North America.

All major market categories are performing well in 2023, including Finance
(SuperReturn, SuperInvestor) Life Sciences (Bio-Europe, Biotech Showcase),
Foodservice (National Restaurant Show, FSTEC), Anti-Aging & Aesthetics
(Anti-Aging World Congress, A4M Winter Congress) and Pop Culture (FanExpo
Canada, Megacon Orlando).

In Finance, our retail banking data and analytics business, Curinos, is
delivering strong growth in subscriptions and we are investing to further
expand the product offering. Similarly, in our other subscription-led
businesses, Zephyr (Wealth Management Data & Reporting) and IGM (Fixed
Income/FX Data & Information), trading is robust, and we are targeting
additional growth through a combination of technology enhancement, service
expansion and cross promotion across the broader Finance portfolio.

Data and analytics are at the heart of all organic investment and product
innovation within Connect, with our first party data providing increasingly
powerful customer insights to support targeted marketing and product
development. More directly, our data is underpinning our Lead Insights
product, which has significantly enhanced the value proposition for event
sponsors and other partners by providing an end-to-end customer platform for
scoring, qualifying and activating leads.

Informa Tech…First Party Data, Diversified Services and Growth

Our focus on serving B2B markets and the strength of our specialist technology
brands, deep industry knowledge and relationships, breadth of first party data
through IIRIS (20m+ records) and growing range of high value B2B services have
combined to deliver good growth in 2023, despite the challenges and reductions
in some B2C and media budgets across the Technology sector.

As the broader technology market recovers, this puts us in a strong position
to build on our existing relationships and further expand our range of
audience-led B2B Digital Services for technology customers, where we see a
significant long-term opportunity to create value.

In B2B Live & On-Demand Events serving the Technology market, where we
have 15+ major franchises (Black Hat, Enterprise Connect, LEAP, Game Developer
Conference), demand for high quality face-to-face connections and accredited
training is strong and pacing into 2024 is currently ahead of last year.

In Specialist Market Research (Omdia), the quality of our data and specialist
content is supporting robust subscription renewals, whilst the recent addition
of Canalys has expanded our leadership across key sub-verticals such as
Artificial Intelligence, Cloud, Cybersecurity and Enterprise IT into the key
segments of Channels and Mobility, adding further depth to our research
offering.

Within Specialist Media (40+ brands including Light Reading, Heavy Reading, AI
Business, Information Week) and Specialist Lead Generation (Industry Dive,
NetLine), current end market uncertainty is creating attractive opportunities
to accelerate the expansion of our Digital Services offering, through the
launch of new products like Intentive (an intent-based lead generation
platform) and through targeted acquisition/combination.

Academic Markets...Consistent Growth

Structural growth in original research and specialist knowledge, combined with
the power of our specialist brands and a growing range of open research
services is underpinning continuing growth at Taylor & Francis. We remain
on track for our GAP 2 target of 3%+ underlying revenue growth in 2023, rising
to c.4% in 2024.

This improving growth profile is driven by the combination of continued
strength in traditional Pay-to-Read publishing and increasing focus and
momentum in Pay-to-Publish services.

In Pay-to-Read, our Researcher Services business is delivering consistent
growth, with high renewal rates for peer reviewed subscription research
supported by robust article volumes and the quality and relevance of our
specialist content across 75+ subject categories.

In Advanced Learning, demand for our specialist reference content remains
strong (8,000+ annual new titles and a backlist of 175,000 titles), benefiting
from increased emphasis on a number of growth subject categories.

In Pay-to-Publish, the market continues to grow healthily and our investment
in operational capacity and processing efficiency is reducing publication
timescales and increasing volume throughput, enabling us to secure more of
this growth. As a result, direct Open Research volumes have increased
significantly in 2023, which combined with the addition of several new
institutional Read and Publish contracts, is delivering accelerated levels of
growth in overall Pay-to-Publish revenues.

Accelerating Shareholder Returns

We continue to take a disciplined approach to capital allocation, balancing
strong returns to shareholders, organic investment and targeted acquisitions.
To date, in 2023 we have returned more than £650m to shareholders through a
mixture of dividends and share buybacks, with c.£1bn of shares bought back
since the divestment of our Intelligence portfolio in 2022 (c.10% of share
capital).

Today we are reporting continuing strong momentum in our business, with market
guidance raised for the full year. Alongside our improving operating
performance, cashflow generation is strong, with free cash flow of £575m+
expected in 2023, and leverage expected to be c.1.3x at year-end.

This strong cash flow performance and balance sheet strength is enabling us to
extend our share buyback programme to £1.15bn. Dependent on volumes and share
price movements, this will see us acquire shares up to a maximum value of
£150m between now and our Full Year Results on 7 March 2024.

Conference Call

A conference call to discuss the Trading Update will be held at 8.30am UK time
today, hosted by Group Finance Director, Gareth Wright, and Director of
Investor Relations, Richard Menzies-Gow.

Dial in details as follows:

Confirmation Code: 8807261

UK: 0800 279 0425 or +44 (0)330 165 4027

US: 800-289-0438 / France: 0805 101 219 / Germany: 0800 180 7799

 Enquiries
 Stephen A. Carter, Group Chief Executive                  +44 (0) 20 8052 0400
 Gareth Wright, Group Finance Director                     +44 (0) 20 8052 0400
 Richard Menzies-Gow, Director of IR & Communications      +44 (0) 20 8052 2787
 Simon Duke / Anthony Di Natale - Teneo                    +44 (0) 7815 779225 / +44 (0) 7880 715975

 

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