REG - Informa PLC - Trading Update

InformaAnnouncement

16/06/2022 07:00

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RNS Number : 0609P  Informa PLC  16 June 2022

Informa PLC Press Release

16 June 2022

Robust Trading, Increased Portfolio Focus and Accelerating Shareholder Returns

Robust Trading: Strong performances in all businesses, on track for upper end
of market guidance

Increased Portfolio Focus: £1.9bn value created through Pharma Intelligence
agreement

Accelerating Shareholder Returns: Share buyback programme increased from
£300m to £725m

Informa (LSE: INF.L), the international Academic Markets, B2B Markets and
Digital Services Group is today reconfirming full year guidance on the back of
robust year-on-year trading. The Group, which is issuing a trading update to
coincide with its Annual General Meeting, also reported continued progress on
the 2021-2024 Growth Acceleration Plan II ("GAP II").

 Stephen A. Carter, Informa Group Chief Executive said:

 "Our GAP II programme is delivering growth, portfolio focus and shareholder
 returns. Today we are reporting robust and consistent trading and are
 reconfirming guidance, which combined with strong divestment returns allows us
 to expand our share buyback programme to £725m, whilst significantly
 strengthening our balance sheet."

 He added:

 "We welcome the progressive reopening of Mainland China whilst continuing to
 monitor broader market fluctuations and macro volatility. Notwithstanding
 these external factors, we are confident in our ability to deliver on our
 forward growth ambitions, underpinned by the resilience of our subscription
 businesses, the continuing return of Live and On-Demand Events, and our
 growing range of Digital Services."

Trading Highlights

·      Robust trading: Group underlying revenue growth of 40%+, with
improving growth in Academic Markets (3.5% to end May), a strong return in
Live and On-Demand Events (100%+) and continued momentum in B2B Digital
Services (10%+). On track for upper-end of 2022 guidance, supported by
continuing return in all geographies and progressive re-opening in Mainland
China. Full year growth in revenue, adjusted operating profit and earnings per
share expected to be above historical trends.

·      Increased portfolio focus: Completion of £1.9bn Pharma
Intelligence agreement, with additional future returns through 15% equity
interest in the ongoing business. Next package of portfolio divestment,
Financial Intelligence, progressing well with continued significant interest;

·      Strong cash generation: The Company's deliberate shift to
implement enhanced cash management processes and challenging cash metrics is
continuing to deliver benefits, with further strong cash conversion and free
cash flow generation over the first five months of the year;

·      Strengthened balance sheet: Strong free cash flow and the
divestment of Pharma Intelligence effectively reduces net debt to zero,
significantly strengthening the balance sheet and providing additional funds
for growth and reinvestment. Outlook upgraded to Stable by major credit
ratings agencies (S&P Global, Moodys);

·      Accelerating shareholder returns: Share buyback programme further
expanded from £300m to £725m, representing c.50% of post-tax cash proceeds
received to date from the delivery of GAP II Portfolio Focus. Expanded
programme will take us through to year-end 2022, with 50.3m shares purchased
so far this year, equating to c.£290m of capital returned to shareholders.

·      Value in verticalisation: Informa's strategy of Market
Specialisation is accelerating through continued expansion in On-Demand and
B2B Digital Services in key markets. This is most evident in Informa Tech,
where the NetLine addition has added content syndication and platform
capabilities, helping to further expand the volume, quality and engagement of
our Tech audiences and accelerating the development of targeted lead
generation services.

Trading Update

Guidance re-confirmed at upper end of range

Trading through the first five months of 2022 has been robust across both our
Academic Markets and B2B Markets businesses, with Group underlying revenue
growth of more than 40%+.

Markets are open or opening in all our geographies around the world and with
Mainland China restrictions now progressively being removed, our current
assumption is we will resume Live B2B Events in that region from the third
quarter.

On that basis, the Group's performance year to date, combined with strong
forward visibility on subscriptions revenues in Taylor & Francis and
exhibitor and delegate bookings in Live and On-Demand Events, and favourable
currency trends, puts the Group on track for the upper-end of the full year
guidance range provided at our 2021 Full Year Results in March (Revenue of
£2,150m-£2,250m and adjusted operating profit of £470m-£490m).

Academic Markets & Knowledge Services

Taylor & Francis is continuing its track record of consistent growth,
delivering underlying revenue growth of 3.5% through the first five months of
2022 and on-target for 3% across the full year. This reflects consistent
performances in Pay to Read Subscriptions and Advanced Learning, and further
strong growth in Pay to Publish services.

In Pay to Read, Subscription renewals remain high, underpinned by continued
strong volumes of research submissions, which is translating into consistent
levels of validated and trusted specialist subscription content. In Advanced
Learning, increased discoverability of content and continued strength in
eBooks is delivering solid growth, most notably in our Professional and
Self-Learning categories.

In Pay to Publish, our GAP II investments to broaden our range of services,
improve customer marketing and drive submission rates, continue to deliver
benefits, with further strong revenue growth so far in 2022.

Continued expansion in this area, which widens our addressable market beyond
University Libraries into deeper global research and development funding,
underpins our underlying growth target of 4%+ across our Academic Markets
business by the end of GAP II.

B2B Markets & Digital Services

The Group's three B2B businesses (Informa Markets, Informa Connect, Informa
Tech) are all trading strongly year to date, in aggregate delivering 90%+
underlying revenue growth across the first five months of the year.

Live Events continue to return at pace across North America, the Middle East,
Europe, ASEAN and Latin America, with customer demand stronger than
anticipated and post-show feedback very positive, with record net promotor
scores underpinning high levels of rebooking, back at pre-pandemic levels.

In total, we have run more than 200 Live Event brands across the world this
year, attracting more than 1m participants, over 25k exhibitors and generating
more than £400m of revenue.

In Mainland China, COVID restrictions have limited the ability to run Live
Events through the first half and whilst this will inevitably lead to some
revenue leakage, our teams adapted quickly to reschedule our major brands to
the second half of the year. With restrictions now progressively being removed
we are planning to run the first of these major brands in August and, on that
basis, we currently expect to deliver 60%+ of the revenue we budgeted for the
region this year.

As Live Events return, we are progressively embedding more digital and
on-demand capability in and around the core product in areas such as
registration, enhanced use of digital product discovery and downloads, lead
identification and customer connectivity. This is increasing utility and value
for customers, enhancing the overall volume and quality of data capture and
underpinning pricing, yields and growth.

In addition, through GAP II, the Group continues to invest in broader product
diversification through a range of B2B Digital Services. Underpinning all our
digital developments is the continued roll out of IIRIS, our centralised B2B
customer data and analytics platform. As we embed its registration, tracking
and segmentation service offerings across core verticals, the increased volume
and quality of data is enhancing our existing business through more effective
sales and marketing, and building a consented first party data engine to fuel
the development of lead generation, lead qualification and audience
development products and services.

Informa Tech is at the forefront of these developments, reflecting its broad
portfolio of specialist B2B Media, B2B Events, Data and Research brands and a
more developed customer market for data-driven lead generation services. The
addition of NetLine has accelerated our market knowledge and understanding of
data discipline, content syndication and buyer intent, as well as underlining
the critical importance of curated specialist content to maintain the quality
and high level of engagement with our targeted audiences.

Accelerating Shareholder Returns

Completion of Pharma Intelligence agreement for £1.9bn

The £1.9bn Pharma Intelligence transaction completed on 1 June 2022, with the
Group receiving c.£1.7bn in cash before tax deductions and retaining a c.15%
shareholding in the ongoing business. It is expected that tax deductions will
amount to a little over £200m, payable through the second half of 2022.

The follow-on process for our Financial Intelligence portfolio is now underway
and is attracting strong interest. Our Maritime Intelligence business, the
smallest and most blended portfolio, with a mix of B2B Media, B2B Events, Data
and Intelligence products, will be the last portfolio to be reviewed in the
second half of the year.

Following the completion and receipt of cash for Pharma Intelligence, Informa
is expanding its GAP II Shareholder Returns. This began in February, when we
commenced a share buyback programme, initially up to £100m, which was
subsequently expanded to £300m.

After significant shareholder consultation, we can confirm our approach to
shareholder returns will continue to focus on share buybacks, and so we are
expanding our programme from £300m up to £725m, which represents c50% of the
post-tax cash proceeds received to date from our approach to GAP II Portfolio
Focus.(1)

Around £290m of shares have been acquired in the market so far in 2022, at an
average share price of 575.7p, leading to the cancellation of 50.3m shares.
Today's expansion of the programme is expected to see the Group maintain the
current level of buybacks through to year-end.

As previously announced, separate to the Share Buyback Programme, Informa PLC
will be re-starting ordinary dividends at the time of our Interim Results in
July 2022.

Board update

Informa will today host its 2022 Annual General Meeting at 11am at its offices
at 240 Blackfriars, London, SE1 8NW. Over the last twelve months, the Board
has undergone significant change and replenishment, adding three new
Non-Executive Directors, the appointment of a new Chair, new Senior
Independent Director, new Chair of Audit and new Chair of the Remuneration
Committee. It has also consulted extensively with shareholders on a new,
post-COVID Remuneration Policy, for which it is seeking approval at the AGM.

Stephen Davidson, who has been a Non-Executive Director on the Board for the
past seven years and who was yesterday appointed as Chair of Calnex Solutions
plc alongside his other responsibilities, will not seek re-election as an
Informa Director at today's AGM.

Full details of all the other resolutions being presented to shareholders are
included with the 2022 AGM Notice, which is available at
www.informa.com/investors/shareholder-centre/general-meetings
(http://www.informa.com/investors/shareholder-centre/general-meetings) .

 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
 Tim Burt / Simon Duke - Teneo                             +44 (0) 20 7240 2486

Notes to Editors

(1)At today's AGM, Informa will seek authorisation to continue to purchase its
own ordinary shares.  The maximum number of additional ordinary shares that
may be repurchased under those authorities is 147,771,000, and the authority
will apply until the earlier of the conclusion of the Company's next AGM or
close of business on 15 September 2023.

As such, Informa has extended its irrevocable and non-discretionary
arrangement with Merrill Lynch International, and entered into an irrevocable
and non-discretionary arrangement with Morgan Stanley & Co. International
Plc, to purchase, subject to authorisation being granted at the AGM, on its
behalf and within certain pre-set parameters, ordinary shares of 0.1 pence
each in the Company, with the intention to cancel those shares purchased.

The share buyback programme will take place in accordance with the Company's
approved buyback authorities and be effected in accordance with Chapter 12 of
the FCA's Listing Rules.  The programme will recommence shortly and run
through the Company's close period (30 days from 28 June 2022 to 27 July
2022).

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