Regulatory Announcements
REG-United Bus Media Ld: Interim Management Statement
Released: 06/11/2009
Interim Management Statement
Resilient trading keeps UBM on track for FY2009
United Business Media Limited today updates the market with the following
Interim Management Statement:
Since we reported UBM's Interim results in July, trading has been in line with
our expectations. We anticipate that UBM's full year earnings for 2009 will be
in line with market expectations. These trading and outlook statements are
based on trading up to the end of October 2009, together with management's
current expectations for the remainder of the year.
Underlying UBM's resilient aggregate trading is considerable variation in
performance across our individual products, across the range of professional
and commercial communities our businesses serve, and across the geographies in
which we operate.
Whilst we expect the detailed trading patterns noted below to be maintained,
the overall trading outlook for UBM's businesses remains stable, with no
indications of either further deterioration or of improvement. Our businesses
in Asia - with the exception of Japan - are showing good growth and are
performing in line with, or ahead of, our expectations, as are our businesses
in Latin America. Our businesses in continental Europe are generally trading in
line with our expectations. As noted in our July statement, our US businesses,
particularly those serving the technology and trade sectors, continue to be
affected by the challenging recessionary environment. Our UK businesses,
notably those in property and construction-related markets, also continue to
face tough trading conditions.
We continue to manage our businesses actively through current trading
conditions; our business planning is based on the assumption that these
conditions will continue in 2010.
B2B Communities
Events
In aggregate our events portfolio (which contributes around half of UBM's
earnings) is performing well. Our largest exhibitor-paid annual tradeshows
taking place during the second half in Asia (e.g. Hong Kong Jewellery & Gem
Fair, Furniture China) and in Europe (e.g. CPhI Worldwide) have traded in line
or somewhat ahead of previously indicated expectations. We also anticipate
strong performances from our forthcoming major biennial tradeshows Food
Ingredients Europe and Marintec China.
The softness in attendee-paid event revenues (which in 2008 represented around
10% of overall events revenues) that we noted in our May and July updates has
persisted as result of continued pressure on corporate travel and conference
expenditure.
We anticipate that forward booking of exhibitor revenues for our 2010 events
will reflect the broad patterns noted earlier in the year: growth at our Asian
and European exhibitor-paid tradeshows (which take place predominantly in the
second half of the year) offsetting softer results at our UK property-related
and US attendee-led technology tradeshows (which run mostly during the first
half of the year). A full update on forward bookings for our events portfolio
will be provided at our Preliminary results in March 2010.
Data, Services and Online
Trading across our data, services and online businesses has been mixed. After
experiencing poor trading conditions during the first half of the year we have
seen some improvement in our intellectual property service products for the
semiconductor industry. However we have also experienced weakness in other
sectors such as trade and transportation and in aviation. Our major drug
information system subscription product Vidal has performed in line with our
expectations. The two acquisitions made during the summer - Iasist (an Iberian
medical data business) and the remaining equity in RISI (our global forestry
and paper products data business) - have both traded satisfactorily.
Online advertising revenues have yet to show any improvement in the aggregate.
There is continued pressure on banner advertising models in general but, by
contrast, we see rising demand from marketers for products - such as lead
generation products - which can provide clear empirical evidence of their
return on investment. We also see growth in single sponsor-branded, rich
content `engagement' products such as Internet Evolution (see
www.internetevolution.com), an experimental B2B social network site focusing on
the future of the internet which recently won three major `Best of the Web'
awards: Digital Team of the Year, Best Community / Social Networking Site, and
Best B2B Magazine-Branded Video.
Print
The combination of difficult economic conditions and long term structural
decline continues to reduce print revenues. However our controlled circulation
print magazines remain in strong demand from the communities they serve and the
registration data derived from subscribers represent an important resource for
our non-print businesses, providing them with a significant competitive
advantage over their `internet only' competitors. We also have a range of
initiatives in progress across our businesses to monetise content that was
previously available at no cost to qualified readers. We believe that in the
medium term many (but not all) of the markets our businesses serve will
continue to support a small number of print titles. These titles are likely to
be complementary components of an integrated product portfolio. In anticipation
of this market trend, we are managing our portfolio towards a smaller set of
market-leading, commercially sustainable titles, each operating within an
integrated product portfolio.
Targeting, Distribution & Monitoring
Overall, trading in UBM's Targeting, Distribution & Monitoring businesses
remains soft, although we expect operating profit margins to remain consistent
with our first half results. As noted in the updates made earlier in the year,
the Targeting, Distribution & Monitoring businesses have been affected by poor
economic conditions, lower aggregate levels of corporate and market activity
and the associated general reduction in marketing and communications spend.
Although we continue to maintain market share, we have experienced lower
overall message volumes in the US news distribution market which contributes
around half of our Targeting, Distribution & Monitoring revenues. These lower
message volumes reflect generally lower levels of commercial activity,
affecting all major message categories including new product announcements,
personnel changes and contract wins. A similar trading pattern is evident in
the Canadian market. Tighter corporate spending across all areas of expenditure
has also had some impact on sales in MultiVu and in other non-wire targeting
and monitoring products. However the use of Multimedia News Releases, a market
in which we have a significant presence, continues to grow well.
Outside North America, our business in the UK and Europe has faced challenging
trading conditions. However our businesses in India and China continue to
demonstrate good growth.
Acquisitions
In 2009 to date we have invested a total of £20m in four acquisitions. We
continue to seek high quality acquisition opportunities which offer the
potential for UBM businesses to add value. The focus of our acquisition efforts
remains on tradeshows and IP-based data and service businesses, and on
opportunities in emerging markets, particularly in China, India and Brazil. We
anticipate that the flow of acquisition opportunities will improve over the
next year.
Foreign Exchange
In 2009 UBM expects that approximately 60% of revenues and operating profits
will be denominated in US dollars, and that approximately 20% of revenue and
25% of operating profits will be denominated in Euros. For H1 2009, the
principal average exchange rates used were £1: $1.50 and £1: #1.12. The average
exchange rates for the full year 2009, assuming no change to current rates over
the remainder of the year, are expected to be £1: $1.60 and £1: #1.10.
For 2010 we estimate that a one cent change in the US dollar exchange rate
would change revenues by £2.9m - £3.1m and operating profits by £500,000 to £
600,000. A one cent change in the Euro exchange rate would change revenues by £
1.2m - £1.4m and operating profits by £300,000 - £400,000.
Next trading update
United Business Media will announce Preliminary results for the twelve months
to 31 December 2009 on 5 March 2009.
- Ends-
Contacts
Media
Peter Bancroft Director of Communications, UBM
E-mail communications@ubm.com
Direct telephone +44 20 7921 5961
Analysts/Investors
Andrew Crow Deputy CFO, UBM
Email investorrelations@ubm.com
Direct telephone +44 20 7921 5940
Notes to Editors
1. About United Business Media Limited
UBM focuses on two principal activities: worldwide information distribution,
targeting and monitoring; and, the development and monetisation of B2B
communities and markets. UBM's businesses inform markets and serve
professional commercial communities - from doctors to game developers, from
journalists to jewellery traders, from farmers to pharmacists - with integrated
events, online, print and business information products. Our 6,500 staff in
more than 30 countries are organised into specialist teams that serve these
communities, bringing buyers and sellers together, helping them to do business
and their markets to work effectively and efficiently.
For more information, go to www.ubm.com
END