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Combination
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Annual Report and Financial Statements 2018
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1
8
New York
605 Third Avenue
New York, NY 10158
Toronto
20 Eglinton Avenue West
Toronto
Tokyo
Kanda 91 Building
Chiyoda-ku, Tokyo 101-0044
London
5 Howick Place
SW1P 1WG
(Registered Office)
t: +44 (0)20 7017 5000
e: info@informa.com
www.informa.com
London Blackfriars
240 Blackfriars
SE1 8BF
London Maple House
149 Tottenham Court Road
W1T 7AD
London Blue Fin Building
110 Southwark St
SE1 0SU
Colchester
Sheepen Place
Essex, CO3 3LP
Washington DC
2121 K Street NW
Washington DC, DC 20037
Philadelphia
530 Walnut Street
Philadelphia, PA 19106
Boston
Two International Place
Fort Hill Square, MA 02110
Boca Raton
6000 Broken Sound
Parkway NW
Boca Raton, FL
Kansas City
9800 Metcalf Avenue
Overland Park, KS 66212
Milton Park
2, 3 and 4 Park Square
Milton Park, OX14 4RN
Boulder
5541 Central Avenue
Boulder, CO 80301
Amsterdam
De Entreé 73
1101 BH, Amsterdam
Phoenix
2020 North Central Avenue
Phoenix, AZ 85004
Dallas
6191 N. State Highway
Suite 500
Irving, TX 75038
San Francisco
303 2nd Street
San Francisco, CA 94107
Santa Monica
28th St, Suite 100
Santa Monica, CA 90405
Mexico City
Benjamin Franklin 325
Delegacion Cuauhtemoc
Mexico DF 06100
São Paulo
Avenida Dra Ruth Cardoso
05425-902 São Paulo
Sydney
24 York Street
NSW 2000
Hong Kong
17/F China
Resources Building
26 Harbour Road
Wanchai
Dubai
Level 20, World Trade Centre
Tower
PO Box 9292, Dubai
Istanbul
Smart Plaza B Blok
Rüzgarlıbahçe Mah.
Kavak Sok
Kavacık Beykoz, Istanbul
Cairo
7H Building, Street 263
New Maadi, Cairo
Shanghai
9/F Ciros Plaza
No. 388 West Nanjing Road
Shanghai 200003
Singapore
Visioncrest Building
103 Penang
Singapore 238467
Kuala Lumpur
Sunway Visio Tower
Lingkaran SV, Sunway
Velocity 55100
Kuala Lumpur
Mumbai
Times Square
Andheri-Kurla Road
Mumbai 400 059
New Delhi
1, Jai Singh Road
New Delhi 110001
These are some
of Informa’s office
locations around
the world
1_Informa_AR18_COVER.indd 3
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Contents
Who we are
Informa is an international business-to-business events, academic
publishing and information services Group.
We are listed on the London Stock Exchange and a member of the FTSE 100.
What we do
We serve businesses, professionals and academics working in specialist
communities all over the world, by helping them connect, learn and do
business, and by providing access to content, intelligence and networks
that enable them to work smarter and make better decisions faster.
12
Group Chief Executive’s Review
22
Working in specialist markets
30
Engaging inside and outside Informa
40
Divisional Reviews
Contents
Strategic Report
Highlights
Informa at a glance
Chairman’s Introduction
Understanding the enlarged Group
Group strategy
Group Chief Executive’s Review
Business model
Our markets
Engaging inside and outside Informa
Non-financial information statement
A snapshot of our Divisions in 2018
Divisional Review
– Academic Publishing
– Business Intelligence
– Global Exhibitions
– Knowledge & Networking
– Global Support
Key performance indicators
Risk management and principal risks
and uncertainties
Viability Statement
Financial Review
Governance
Chairman’s introduction to governance
Board of Directors
Corporate Governance Report
Nomination Committee Report
Audit Committee Report
Directors’ Remuneration Report
Relations with Shareholders
Directors’ Report and
other statutory information
Directors’ responsibilities
Financial Statements
Independent Auditor’s report
Consolidated Income Statement
Consolidated Statement of
Comprehensive Income
Consolidated Statement of Changes in Equity
Consolidated Balance Sheet
Consolidated Cash Flow Statement
Reconciliation of Movement in Net Debt
Notes to the Consolidated Financial Statements
Company Balance Sheet
Company Statement of Changes in Equity
Notes to the Company Financial Statements
Five-year summary
Company Information
Shareholder information
Advisers
1
2
4
8
10
12
20
22
30
37
38
40
44
48
52
56
60
62
73
76
90
94
96
103
107
113
126
129
133
134
146
147
148
149
150
150
151
222
223
226
229
230
232
Informa is grateful to the following for
their support and contribution to the
production of this Annual Report:
Consultancy, design and production
by Luminous
www.luminous.co.uk
Cover, markets and divisional illustrations
by Janis Andzans
Board of Directors photography by
Simon Jarratt. CEO photography by
Chris Warren.
All information in this report is © Informa PLC
2018 and may not be used in whole or part
without prior permission.
The paper used in this report is produced
with FSC® mixed sources
pulp which is partially
recyclable, biodegradable,
pH neutral, heavy metal
free and acid free. It is
manufactured within
a mill which complies
with the international
environmental
ISO 14001 standard.
1_Informa_AR18_COVER.indd 4-6
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Strategic Report
Highlights
2018 Informa Group highlights
Revenue (£m)
2014
2015
2016
2017
2018
Operating profit (£m)
2014
2015
2016
2017
2018
Free cash flow (£m)
2014
2015
2016
2017
2018
£2,369.5m
1,137.0
1,212.2
1,344.8
*1,756.8
2,369.5
£363.2m
(2.8)
236.5
198.6
*344.7
363.2
£503.2m
237.2
303.4
305.7
400.9
503.2
Underlying revenue growth (%)
2014
2015
2016
2017
2018
Adjusted operating profit (£m)
2014
2015
2016
2017
2018
Dividend per share (p)
2014
2015
2016
2017
2018
3.7%
0.7
1.0
1.6
3.4
3.7
£732.1m
334.0
365.6
415.6
*544.9
732.1
21.90p
17.80
18.50
19.30
20.45
21.90
*
Restated for the impact of IFRS 15. See Note 4 for more information.
2018 business highlights
Combination with UBM, June 2018
• £3.9bn addition of UBM brought 3,500 new colleagues,
around 350 exhibitions and expanded the Group’s footprint
in Asia and the US.
Entry into the DJSI World Index, September 2018
Informa ranked among the top 10% of listed companies
•
according to performance on economic, social and
environmental factors.
SeetheFinancialReviewonpage76forfull2018financialsand
definitions for adjusted results, and key performance indicators
onpage60
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Strategic Report
Informa at a glance
An international business-to-business
events, academic publishing and
information services Group
We work with customers in a range of
specialist professional communities
Providing high value business-
to-business information services
• Critical data
• Peer reviewed research
• Face-to-face platforms for sales and
product promotion
• Targeted lead generation
• Trusted market and competitor intelligence
• Data analytics
• Actionable industry insight
• Access to qualified buyers
• High quality content
• Expanded business and professional networks
• Specialist data and marketing solutions
• Accredited professional training
• Consultancy services
• Sales enablement tools
Life Sciences, Aviation, Fashion
& Jewellery, Technology, Medical
Equipment, Pharmaceutical
Ingredients, Health & Nutrition,
Maritime, Humanities & Social
Sciences, Finance, Advanced
Manufacturing, Agriculture,
Construction & Real Estate,
Science, Technical & Medical,
Pharma & Biotech, Waste
Management, Telecoms, Beauty
& Aesthetics, Infrastructure, Pop
Culture, Transportation, Brand
Licensing, Hospitality & Leisure,
International Yachting
2
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INFORMA PLC ANNUAL REPORT 2018 Creating and delivering intelligence,
networks and connections
Through 11,000 colleagues working and
engaging to a shared set of common values
4m
scholarly research articles available for download
4.2msq.m
of exhibition space provided to businesses annually
Specialism and focus
Dedicated to and expert in our customers’
specialist markets
27m
marketing/lead generation database
of27mbusinessprofessionals
29
exhibitionsrankedintop250UStradeshowsbysize
26,000
partnering meetings held between investors
andlifesciencesfirmsatBIO-Europe2018
120,000
ebooks to search and download
5.5m+
people attend our events and exhibitions annually
700,000+
aviation professionals engage with our brands
R210m
value generated for attendees and exhibitors
atAfricaCom2017
Integrity and trust
Taking pride in our brands, with a focus
on quality and credibility
Think big, act small
Forward looking and seeing the bigger picture
while delivering on the detail
Freedom and authority
Distributed decision enables business teams
to be responsive to customer needs
Agility and speed
A dynamic environment, with a flexible
and commercial approach
3
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Strategic Report
Chairman’s Introduction
A year of
delivery,
combination
and creation
Derek Mapp
Chairman
4
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INFORMA PLC ANNUAL REPORT 2018 “ GAP created a Group
with greater balance and
breadth and this positive
momentum has given
your management team
and the Board the
confidence to do more.”
I am delighted to have the opportunity to address Informa
Shareholders and colleagues, and to express my thanks for
theirsupport,hardworkandcommitmentthrough2018.
It was another busy and productive period that saw the Group
report a fifth consecutive year of growth in revenue, profits,
cash flow and dividends. It was also a year when we took a
considerable step forward in our future growth and ambition
by adding UBM to the Informa portfolio.
From GAP to the AIP
The Informa Group has progressively and consistently evolved
overthepastfiveyears.Throughthe2014-2017Growth
Acceleration Plan (GAP), the Group was reshaped, restructured,
repaired and rebalanced.
GAP created a Group with greater balance and breadth and this
positive momentum has given your management team and the
Board the confidence to do more. It directly led us to push for
furtherscalein2018,whenaddingUBMprovidedaunique
opportunity to build on the progress made through GAP and
enhance the Group’s international breadth and depth in
specialist markets, particularly in exhibitions.
View from
the Board:
expansion
and scale
What led the Board to endorse
Informa’s 2018 expansion plans?
The Board’s view was that Informa had the potential
to create significant value for Shareholders as well
as opportunities for colleagues and other partners
through adding the UBM business. We knew the
business well and believed it was a good fit, with its
complementary brands, similarities in culture and
values, and a comparable recent history of change
and growth. The progress made through GAP and the
effective integration of Penton Information Services
had also increased our confidence in Informa’s
capability to combine the businesses effectively.
What role has the Board played so far?
As ever, the Board represents the interests of
Shareholders and other stakeholders by overseeing
the Group’s activities, guiding the management team
and challenging plans where appropriate. The Directors
provided support and input to the leadership team with
its decision making during the offer process, assessed
integration plans and received regular progress reports
in Board meetings and through informal conversations in
between. Board members also engaged with Shareholders
and colleagues. I attended ReInvent, a gathering of
around 100 leaders from across the enlarged Group, in
July, answering questions and getting direct feedback on
how the new Informa Group was coming together.
Did the Board have any concerns about the combination?
The impact on colleagues and our culture was foremost
in our minds. Informa is a people business, and we knew
an effective outcome would rely on the engagement,
support and efforts of all those in each business. It was
critical that combining the businesses would ultimately
add to the experience and opportunities available to
colleagues, rather than unduly disrupting or stretching
teams. Diligence gave us comfort that the business
cultures were aligned, and further work has been done
to more fully understand what is important to colleagues
and build a set of common principles and ways of
working for everyone in the Group.
What is the Board’s focus for 2019?
Aside from our ongoing wider responsibilities and
maintaining the focus on colleagues and culture, it is
to make sure we complete the AIP effectively and deliver
on our Shareholder promises by meeting our synergy
targets and pursuing revenue opportunities. At the
same time, we will work to ensure the Group continues
to deliver consistent underlying growth and performance
in each of our businesses, capitalising on our strengths
and the progress made through GAP.
WWW.INFORMA.COM
5
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INFORMA PLC ANNUAL REPORT 2018GovernanceFinancial StatementsStrategic Report Strategic Report
Chairman’s introduction continued
Twelve months later and well into our Accelerated Integration
Plan (AIP), the Board remains confident that this step will
deliver real long-term value and opportunity.
Following a period of intense activity, the AIP is ahead of
schedule with key decisions on leadership and structure
implemented. The Group is on track to deliver its cost synergy
targets, and as it starts to operate as a single enlarged business,
the benefits of increased scale and industry specialisation will
also come through new revenue opportunities.
New brands and depth in customer markets
One of the early decisions made within the AIP was to
reorganise and rename our Divisions as Informa Markets,
Informa Connect, Informa Intelligence, Informa Tech
and Taylor & Francis,asdescribedonpage8.
“ As Informa has expanded
in 2018, so has the Board,
welcoming two long-term
appointments in David
Wei and Mary McDowell
who bring invaluable
international experience
in Asia and North
America respectively.”
DavidWeijoinedtheexpandedInformaBoardduring2018
As we expand internationally, this approach aligns the enlarged
business more closely behind the Informa brand, and these
more descriptive divisional names provide our Divisions with
greater commercial flexibility. Our Academic Publishing
Division, which has long gone to market as Taylor & Francis,
is conducting a separate brand review to understand how it
might also adapt its approach in what is quite a distinct market.
The AIP has also enabled the Group to increase its focus on
specialisation and serving individual industry communities.
This approach has now been adopted at a divisional level
through the launch of Informa Tech, a market facing business
that brings together all our exhibitions, events, information,
data, media and marketing services brands serving Technology,
Media and Telecoms (TMT) under one structure and leadership.
In recent years, this increasingly vertical approach to customers
and markets has delivered consistent improvement in growth
andperformance.In2018,theGroupreportedunderlying
revenuegrowthof3.7%,upfrom3.4%in2017and0.7%in2014,
the year GAPlaunched.Totalrevenueswere£2.4bnandadjusted
earningspersharegrew7%to49.2p,withfreecashflowreaching
£503.2m,afigurethatwas£237.2mbackin2014.
Shareholder returns and governance
Over the last five years, as Informa has reaped the benefits of
growth and more predictable performance, we have progressively
increasedourannualdividendgrowthfrom2%to4%andthen
to6%in2017.
FollowingtheGroup’scontinuedprogressin2018,wehave
continued this commitment by proposing a final dividend for
theyearof14.85ppershare,bringingthetotal2018dividend
to21.90p,ayear-on-yearincreaseofjustover7%.Itremains
a priority to share the benefits of growth and our strong cash
generation by taking a progressive approach to dividends, and
6
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INFORMA PLC ANNUAL REPORT 2018 I am delighted Informa’s continued performance in the past year
has enabled us to do this.
AsInformahasexpandedin2018,sohastheBoard,welcoming
two long-term appointments in David Wei and Mary McDowell,
who bring invaluable international experience in Asia and North
America respectively.
Greg Lock also joined as Deputy Chairman for the period of the
AIP to ensure a smooth transfer and transition for colleagues and
businesses. Greg will step down at the Annual General Meeting
in May and on behalf of the Board I thank him for his valuable
contributions, both during the creation of the enlarged Informa
Group and in his wise counsel since.
As2018testifies,weregularlyreviewtheshape,sizeandcomposition
of the Board to ensure it has the skills and resources to govern
effectively, and more information on the Board’s developments
duringtheyearcanbefoundonpage98.
Part of the Board’s role is to stay abreast of wider economic and
geopolitical trends that could impact the Group and so we have
been closely monitoring the potential for disruption from the
UK’s exit from the European Union. While we remain vigilant,
there is little direct exposure and we do not believe there are
material risks for the Group. The Group’s increased international
scale and breadth means we are better placed than ever to
manage individual market turbulence.
MaryMcDowelljoinedtheexpandedInformaBoardduring2018
Creating opportunities in 2019 and beyond
Over recent years members of the Board have spent a
considerable amount of time with Shareholders, discussing
Informa, its performance, leadership and expansion plans
amongst many other topics, including on our recent Annual
Engagement Roadshow, described on page 114.
The overriding impression we have been left with is excitement
about the potential of the enlarged Informa Group, and belief
and confidence in the management team. To deliver on this
potentialwillrequireanotheryearofhardworkin2019,
maintaining focus and delivery across each Division, as we
complete the AIP, deliver our synergy targets and further adapt
to make the most of our increased reach and strengthened
market positions. I know the team is fully committed to this.
The Board remains equally committed to meeting our prior
obligations to deliver the first full year of the enlarged Group,
and so while acknowledging the latest guidance within the UK
Corporate Governance Code, we all remain focused on supporting
the leadership team to make this a reality. It is a privilege to be part
of this unique, dynamic and ambitious Company and I look forward
to seeing it move from strength to strength in the year ahead.
Derek Mapp
Chairman
6March2019
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Strategic Report
Understanding the enlarged Group
Understanding the
enlarged Group
New brands and
operating structure
Informa Group
2019
19%
Taylor & Francis
Publishes high quality scholarly
research and reference-led content
13%
Informa Intelligence
Provides specialist data-driven
insight and intelligence in targeted
customer markets
50%
Informa Markets
Connects buyers and sellers
in specialist markets at major
branded exhibitions and online
10%
Informa Connect
Creates content-driven events,
training and digital platforms
for learning and networking
8%
Informa Tech
Delivers research, insight, events and
exhibitions to specialist international
Technology communities
Group, operations and cross divisional
operations teams provide an enlarged
range of shared business services and
Group leadership
Figuresarebasedon2018
pro-forma12-monthrevenues
Informa Group in 2018
23%
11%
Academic Publishing
Publishes high quality scholarly
research and reference-led content
Knowledge & Networking
Creates content-driven events,
training and digital platforms
Informa Group
2018
16%
Business Intelligence
Provides specialist data-driven
insight and intelligence
24%
Global Exhibitions
Organises major branded
transaction-oriented exhibitions
26%
UBM
Business-to-business event and
exhibition organiser; joined the
InformaGroupinJune2018
Global Support teams providing shared
business services and Group leadership
Figuresareaproportionof2018Group
revenue, including six and a half months’
contribution from UBM
8
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INFORMA PLC ANNUAL REPORT 2018 As part of the Accelerated Integration Plan, the shape of the
Group is evolving as we continue to shift to a more customer
and market-led model and integrate UBM brands and portfolios.
This includes the creation of several new divisional brands that
align more closely to Informa and a fifth Division, Informa Tech.
The Academic Publishing Division, trading as Taylor & Francis,
isalsoundergoingabrandreviewin2019designedtoenhance
its customer proposition.
Why invest?
International reach and depth
Where we generate revenue (%)
1
6
Predictable and
recurring revenues
Track record of
consistent and
improving performance
2
International scale
7
3
Depth of content,
data and audiences
Breadth and balance
of Group portfolio
8
4
Strong cash
conversion and free
cash flow generation
Progressive dividend
approach
9
5
Major specialist
brands in attractive
customer markets
Low capital
requirements
and Balance
Sheet strength
10
Attractive margins
North America – 48%
Rest of World – 18%
China (including
Hong Kong) – 13%
Continental Europe – 13%
UK – 8%
High level of forward booked
revenues providing visibility
Type of revenue (%)
Exhibitor – 39%
Subscriptions – 25%
Unit sales – 12%
Attendee – 9%
Marketing and
advertising services – 9%
Sponsorship – 6%
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Strategic Report
Group strategy
Informa’s
growth strategy
The Accelerated Integration Plan
1
2
3
Adapt and strengthen the
Group operating model
Strengthen leadership
and talent
Adapt the Group operating model to best
fit Informa’s increased international
reach and specialism and our increasing
focus on customer end markets.
Strengthen expertise and talent in key
functions and leadership teams, adding
capabilities and experience and creating
the new roles necessary to operate
effectively at scale.
Rebalance and focus
through Progressive
Portfolio Management
Continue the focus under GAP to
prioritise customer markets where
the strength of our brands and
positions creates the greatest potential
for future growth. Assess alternative
ownership models for markets and
businesses where long-term returns
are less attractive.
One-year phased programme of activity
Phase 1
Discovery &
Validation
Phase 2
Combination
Phase 3
Completion
Phase 4
Creation &
Ambition
June – August 2018
August – November 2018
November 2018 – March 2019
March – June 2019
• Teams connect;
• Combination
• Enter2019asa
• New brands launch;
integration plans
tested and confirmed
activities start;
plansfor2019formed
combined business
commercially; further
cultural integration
realisation of synergies;
identifying new
customer opportunities
10
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Deliver benefits of
combination and scale
through synergies
Repair and return the
Fashion business to
growth, through the
Fashion GAP
Review, simplify and
strengthen brand value
Deliver cost synergies from operating
Address underperformance in the Fashion
Review Informa’s Group and divisional
as a combined Group, and explore
exhibitions business through a three-year
brands to build further value in the
and capture additional revenue
programme of change and operational
business and simplify our positioning
opportunities.Targettodeliver£75m
improvement, applying the methods and
across markets. Assess brand
run rate in cost synergies by end of
disciplines of Informa’s GAP programme
architecture, corporate positioning,
2021,with£50mtobedeliveredin2019.
to return the portfolio to growth.
and the articulation of culture and
common values across the Group.
INFORMA PLC ANNUAL REPORT 2018 Informa’s long-term focus is to build a business delivering
broad-based, predictable growth and consistent performance,
converting profits into cash to distribute to Shareholders and
reinvest for continued growth and scale.
Between2014and2017,thisstrategywasdeliveredthroughtheGrowth
Acceleration Plan, a four-year programme of measured change and investment,
under which all parts of the Group returned to growth.
As part of GAP, the Group built and bought a scale position in exhibitions, repaired
and returned the Business Intelligence Division to growth, simplified and focused
the Knowledge & Networking Division, and invested in Open Access and digital
capabilities in Academic Publishing. We purposefully built reach and capabilities
intheUSandinvestedover£80minproducts,peopleandplatforms.
In2018InformaintroducedanAccelerated Integration Plan, a phased one-year
programme designed to integrate the UBM portfolio quickly, building on the
disciplines and capabilities established through GAP.
The AIP is designed to minimise disruption, maintain operational focus
and create an enlarged Group that can make full use of its increased
international scale and depth in industry markets.
Adapt and strengthen the
Strengthen leadership
Group operating model
and talent
Rebalance and focus
through Progressive
Portfolio Management
Adapt the Group operating model to best
Strengthen expertise and talent in key
Continue the focus under GAP to
fit Informa’s increased international
functions and leadership teams, adding
prioritise customer markets where
reach and specialism and our increasing
capabilities and experience and creating
the strength of our brands and
focus on customer end markets.
the new roles necessary to operate
positions creates the greatest potential
effectively at scale.
for future growth. Assess alternative
ownership models for markets and
businesses where long-term returns
are less attractive.
4
5
6
Deliver benefits of
combination and scale
through synergies
Repair and return the
Fashion business to
growth, through the
Fashion GAP
Review, simplify and
strengthen brand value
Deliver cost synergies from operating
as a combined Group, and explore
and capture additional revenue
opportunities.Targettodeliver£75m
run rate in cost synergies by end of
2021,with£50mtobedeliveredin2019.
Address underperformance in the Fashion
exhibitions business through a three-year
programme of change and operational
improvement, applying the methods and
disciplines of Informa’s GAP programme
to return the portfolio to growth.
Review Informa’s Group and divisional
brands to build further value in the
business and simplify our positioning
across markets. Assess brand
architecture, corporate positioning,
and the articulation of culture and
common values across the Group.
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Strategic Report
Group Chief Executive’s Review
Stephen A. Carter
Group Chief Executive
Combination
and Creation
12
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INFORMA PLC ANNUAL REPORT 2018 “ It has been another busy
and significant period for
Informa. I am pleased to
report that 2018 marked
the fifth consecutive year
of positive performance.”
Measured change and improvement
This time 12 months ago, the Informa Group had just
come to the end of the 2014-2017 Growth Acceleration Plan.
GAP was a four-year programme of measured change,
improvement and investment in the business, designed to
return all parts of the Group to growth, to focus and build
positions in markets where we saw the greatest future potential,
and to simultaneously build the platforms and capabilities for
Informa’s long-term growth and development.
It enabled us to make significant individual progress in each
of our then Operating Divisions:
•
•
In Global Exhibitions, we significantly expanded, both
organically and through a series of targeted acquisitions,
taking a small business concentrated in the Middle East
to become the leading exhibitions operator globally,
with significant international scale and reach in attractive
business-to-business customer markets.
In Academic Publishing, we progressively invested and
refocused the business. This included consolidating our
Books business into a single, global operation and building
a digital platform that is delivering market and customer
benefits. In Journals, we invested significantly in Open
Access, organically and through the addition of Dove
Medical Press, building capacity and capabilities in a
fast-growing segment of the market.
•
•
In Business Intelligence, we reorganised and restructured
the business to be closer to its customer markets and
focused on subscriptions, introducing fresh leadership
and investing significantly in products and platforms.
This delivered a turnaround from negative growth as low
as -8.5% back to consistent positive underlying growth.
In Knowledge & Networking, we progressively focused
the business, moving it away from its roots as a volume
conference producer to concentrate on building major
events brands that repeat each year and are the convening
place for an industry. We invested in new leadership and
in strengthening our digital infrastructure, offering more
services to more customers with particular focus on TMT,
Life Sciences and Finance.
The success of GAP and Informa’s transformation over this
period gave us the confidence and capabilities to bring the UBM
portfolio into the Group in 2018. Like Informa, this is a business
that had been on a similar journey of focus and investment, with
a highly complementary footprint and reach in Asia that we had
not had previously. It is also a business based on the skills, energy
and commitment of its people, operating in a range of attractive,
specialist customer markets, where knowledge, information and
the ability to connect and transact are valued.
Through combination, we are creating a Group with operating
scale, international reach and deep industry specialisation
within these markets, capable of delivering consistent growth
and sustainable, long-term financial performance.
The offer for UBM was approved by Shareholders in April 2018
and completed on 18 June 2018, shortly followed by the detail
of our implementation plan for the combination, the Accelerated
Integration Plan.
I would like to thank Shareholders for their strong support
for this development, the Informa Board for its ongoing
guidance and stewardship, and all colleagues for the efforts
and contributions made during this period.
Thanks also go to colleagues from the UBM leadership team,
with whom we worked closely and collaboratively to plan and
transition the business into the Group, and a warm welcome
to the new Board Directors and colleagues who have joined
Informa through this process.
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Strategic Report
Group Chief Executive’s Review continued
“ The success of GAP and
Informa’s transformation
over this period gave
us the confidence and
capabilities to bring the
UBM portfolio into the
Group in 2018.”
Group consistency and delivery
In 2018, the first year after the completion of GAP, we delivered
further consistent and positive financial performance, underlining
the capacity and capabilities now within the Group.
At a Group level, business growth and addition lifted revenues to
just over £2.3bn, up nearly 35% on a reported basis. Underlying
revenue growth, a key focus of improvement under GAP, continued
to rise, from 3.4% in 2017 to 3.7% in 2018. Adjusted operating
profit grew by nearly 35% to just over £730m on a reported
basis and by 2.3% on an underlying basis.
Group adjusted operating margins remained steady and strong
at 30.9%. Free cash flow, which continues to be an important
metric for the Group, advanced to just over £500m from £400m
in 2017, underlining the strength of cash flow generation and
scale across the enlarged Group, which provides flexibility
for future targeted expansion, reinvestment for growth and
progressive Shareholder returns.
Positive growth in each Division
Following the investment in products, platforms and capabilities
under GAP, each of Informa’s Operating Divisions delivered
further growth in 2018.
In our Academic Publishing Division Taylor & Francis, underlying
growth improved to 2.2% from 2.0% the prior year, with revenues
of over £530m and adjusted operating profit of nearly £200m.
This included robust renewal rates and a consistent performance
from our subscription-based scholarly journals business, good
growth in our expanding Open Access journals business, and a
strong performance from our Books business following our GAP
investments in production, marketing, and the digitisation and
discoverability of our Books content.
Taylor & Francis remains focused on growing and maintaining
the quality of its specialist content, launching new formats and
developing new digital platforms and data products that provide
its customers – scholarly researchers, universities and research
institutions – with flexibility, value and benefits.
In Business Intelligence, following its restructuring and
positioning through GAP, the priority has been to convert its
investment in products and platforms into improved new
business momentum.
Having returned to growth for the first time in six years in 2016
and made a further step forward in performance in 2017, the
business improved again in 2018, posting underlying revenue
growth of 2.6% and total revenues of £385m.
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INFORMA PLC ANNUAL REPORT 2018 In June 2018, four colleagues from around the world were invited to London to interview
Stephen Carter for a film that would be part of the internal launch of the enlarged Group.
It was an opportunity to ask about the reasons for the combination, find out more about
what to expect and get to know the Group’s leadership a little better.
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Looking back on the day, Eva van de Pol from the
Amsterdam office recounted: “Meeting up with
Stephen, Kathryn, Ryan and Woolly was a great
experience. I loved meeting my colleagues from
around the globe and getting a sense of the
worldwide character of the business.”
For Kathryn Frankson from Minneapolis,
“my trip to London is still fresh in my mind! An
unexpected takeaway but a benefit of working
for a global company was realising just how similar
our challenges and opportunities are, wherever
in the world you work.”
Woolly Ko, who travelled from Hong Kong for the
interview, reflected that “it gave me a clear sense
of what our shared values are and what it means
to combine the two businesses”.
Looking back at how the business has developed
since the interview, Ryan Fell, who works on financial
reporting in London, explained: “Working with the
finance systems used by the business, we are seeing
a lot of change related to the Accelerated Integration
Plan, with various projects to streamline our finance
systems. There is lots of extra work but some new
and exciting challenges as well!”
For Woolly, “working in the Asia marketing and
communications team, we’ve seen changes in brand
architecture, an expansion of roles and changes of
operating structure in some businesses. Plus, some
teams have started to move into the same office,
such as in Singapore and Shanghai, giving us the
chance to join each other face to face.”
Looking at what lies ahead in 2019, Woolly shared:
“Right now, I’m working towards enhancing the
marketing capabilities and skills
of our Asia marketers by delivering
training programmes and coaching
sessions, mainly in China and Hong
Kong. I feel like the business is
encouraging more of us to share
knowledge and skills.”
In terms of feeling part of
a larger business, Ryan
commented that “as I work
with old and new colleagues on
establishing universal process
and routines, I’ll identify more
and more with Informa”.
Kathryn added: “I’m currently leading marketing
efforts for the Catersource Conference & Tradeshow
and I’ve been able to partner with several Informa
teams to great success. We look to employ an
engaging, human-centred brand approach and have
plenty of opportunities to grow our audience through
new and modern content, social and digital channels.”
And for Kathryn, there are exciting
times ahead. “I’m very much looking forward to
more face time and deeper relationships with new
colleagues in 2019. I genuinely feel like the year
ahead brings more fresh energy, which in my mind
equates to even more effective marketing
activations!” she said.
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report
Strategic Report
Group Chief Executive’s Review continued
Now firmly back in growth, we are using the AIP to focus on the
markets where our Intelligence businesses have the strongest
positions and best opportunities for growth, in the same way
GAP brought market focus to Global Exhibitions and
Knowledge & Networking.
This is leading to some portfolio management as we look to divest
businesses for which there may be a better owner and put greater
focus on areas such as Pharma and Consumer Retail Banking.
The Global Exhibitions Division became the largest part of the
Informa Group by revenue by the end of GAP, as a result of a
deliberate and targeted programme to expand our position in
the attractive and fast-growing exhibitions market.
This particularly focused on building scale in the US, the single
largest market for exhibitions, and deepening our presence in
specialist customer communities.
2018 was another strong year for the Division, which generated
revenues of £575m and underlying growth of 6.7%, meeting our
target for above-market growth while expanding as a business.
The Division is now focused around branded, content-driven
events in attractive and international markets that provide
professional communities with opportunities to connect,
network and learn.
This Division has particularly developed and scaled from the
addition of the UBM portfolio, which has brought 275 exhibitions,
around 2,500 colleagues, new capabilities and positions in
several new specialist markets to its existing portfolios.
These events are increasingly supported by digital content-
based forums and marketing services, and there are many
opportunities to expand what we offer to customers in these
areas in 2019 and beyond.
Most specifically, it has given us a much greater exposure to
the growing Asian region and a particularly strong presence in
Greater China, adding an exciting new dimension and growth
opportunity for the future.
For the leadership team and all colleagues within the Division, it
has been a huge effort to remain focused on performance and
customers while simultaneously combining with UBM teams.
As detailed elsewhere, our teams have also moved quickly to
identify synergies and commercial opportunities that put us
in a good position to grow and further develop in new areas
and markets in 2019.
Following a programme of simplification and investment in
technology and customer experience through GAP, Knowledge
& Networking returned to full-year growth in 2017.
This momentum continued in 2018, with a further improvement
in underlying growth to 2.3% and revenues of £260m, thanks to
strong performances from major brands in our three priority
markets: Life Sciences, Finance and TMT.
The UBM business became part of Informa from 15 June 2018 and
so Group financials reflect the business’s contribution for just over
six months, with revenues of £610m. Looking across the whole of
the year, UBM performed as expected, delivering underlying
revenue growth for 2018 of 2.8%, up from 1.4% in 2017.
Again, this performance is an encouraging one, indicating the
continued focus of the management team and colleagues on
business as usual during the combination period.
Combination and the AIP
One of the benefits of our expansion under GAP and the
addition of businesses such as Penton Information Services is
the experience and capabilities it has given us in integrating
portfolios, brands and teams.
In June 2018, we introduced the Accelerated Integration Plan
as the way in which our combination with UBM’s portfolio
and brands would be delivered.
As described on pages 10 and 11, the AIP is a one-year programme
with six aspects designed to integrate UBM promptly and
effectively, minimise disruption and maintain operational focus,
while creating an enlarged Company that can make full use of
its increased international reach and depth in industry markets.
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INFORMA PLC ANNUAL REPORT 2018 Informa enters
DJSI World Index
Under GAP, one of the areas in which Informa sought to
strengthen its capabilities was in sustainability. Having
created the role of Head of Sustainability and appointed
Ben Wielgus, the team’s priority has been to understand
how sustainability could be a competitive differentiator
for Informa and to improve the impact we have on our
key communities and partners.
To measure our progress, we set a Group KPI of continuing
to participate in the Dow Jones Sustainability Index (DJSI)
and to enhance our position and score. The DJSI is one of
the broadest measures of a company’s performance on
social, governance and environmental factors and provides
useful guidance on areas of future improvement.
In 2017, Informa was named an Industry Mover on
account of strong improvement in our absolute score.
In 2018, further improvements in areas including health
and safety practices, information security, environmental
management and the responsibility of our content led
to Informa’s inclusion in the headline DJSI World and
European Indices for the first time, having scored in the
top 10% of companies worldwide.
Chairman Derek Mapp commented: “Sustainability is
about building a strong and responsible business for the
long term, and I’m proud of the journey Informa has taken
in this regard. Entering the DJSI is a great achievement and
gives us plenty to build on in future years.”
Customer-focused markets and brands
Encouragingly, the AIP is running ahead of schedule, which
has allowed us to make a number of important changes to
the way the Informa Group goes to market in 2019.
One of the shifts we made across our businesses through GAP
was to focus increasingly around end customer markets. At this
moment in the Group’s evolution, we are seizing the opportunity
to further adapt our Group operating model. In Technology,
the breadth and scale of businesses we now have enable us
to create a standalone, customer market-focused Division:
Informa Tech.
This unites all our Tech product brands, whether focused on
exhibitions, events, information, media or marketing services,
allowing us to offer customers an array of business-to-business
services through a single channel.
As shown on page 8, this means the Informa Group will be
structured into five Operating Divisions for 2019. We have also
taken this opportunity to refresh our divisional brands, aligning
them more closely with the Informa brand with Informa Markets
(formerly Global Exhibitions), Informa Connect (formerly
Knowledge & Networking) and Informa Intelligence (formerly
Business Intelligence) sitting alongside Informa Tech.
Our Academic Publishing Division currently goes to market as
Taylor & Francis. This remains unchanged due to the value and
importance its distinct customer base places on the history and
reputation of individual publishing brands such as Routledge,
CRC Press and Dove Medical Press. The Division has launched
its own brand review to see how this brand architecture could
evolve over time.
In the same way our exhibitions and events Divisions became
more concentrated around priority markets through GAP, we are
increasing the focus of our information and content businesses
on markets where we have the strongest brands and best
long-term growth prospects.
Our Progressive Portfolio Management programme led to the
sale of the UBM Life Sciences media brands portfolio in January
2019, and we announced in November 2018 a review of IGM and
the Agribusiness portfolio within Business Intelligence.
Another area of specific focus under the AIP is our Fashion GAP,
a three-year plan to return the Fashion events portfolio within
Informa Markets to growth.
This began with the appointment of Mark Temple-Smith to lead
the turnaround, and the business has been quickly refocused on
customers, rebuilding and strengthening industry relationships,
revitalising brands and marketing, and improving the show
experience. The Group has committed to invest around £10m
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INFORMA PLC ANNUAL REPORT 2018GovernanceFinancial StatementsStrategic Report Strategic Report
Group Chief Executive’s Review continued
Talent and opportunities
As businesses combine and the structure of the Group evolves,
this has led to a series of leadership appointments including the
creation of a new Group Chief Operating Officer (COO) position.
Patrick Martell, previously Business Intelligence CEO, has taken
on this role to examine ways Group operations can be simplified to
make the most of our increased scale, whether through platforms
and systems, procurement or shared service operations.
Increased scale has also led to the creation of the dedicated roles
of Director of Group HR and Chief Information Officer, and the
appointments of Eleanor Phillips and Simon Hollins respectively.
“ The great strength of the Informa
detail and the specialism across
Group is that we all work in the
multiple customer markets.”
under this programme, and while it will take time to reap the full
benefits, we are encouraged by the early response internally and
from customers.
This investment is self-funded through the AIP’s Operating
Synergies programme and the cost savings we are creating by
removing duplication and leveraging scale. Our initial target was
£60m and this has since been increased to £75m of annualised
savings by the end of 2021, with £50m being delivered in 2019.
The pursuit of revenue opportunities created through our
increased depth in customer markets is underway. This includes
cross marketing customer lists and cross promoting brands to
longer-term projects around geo-cloning events, sponsorship,
data and digital services. In the latter area, we have created a
dedicated team to focus on developing initiatives and aligning
plans across Informa Markets.
I am also delighted that Lara Boro has been appointed as CEO for
the new Informa Intelligence Division and Gary Nugent as CEO
for the new Informa Tech Division. Both come from within the
Group, having worked closely with Patrick on the GAP programme
within the then larger Business Intelligence Division.
Combination, colleagues and culture
At a commercial level, the Informa Group enters 2019 as a single
business with teams operating to single budgets and starting to
go to market in a unified way.
Much of the practical and infrastructure-related work necessary to
combine UBM’s portfolios into Informa is also advanced. Beyond
this, and equally important to the success of the combination, is
the way in which each of us working within the Group feels part of
one Company.
Informa is a people business, and the business’s success is in large
part driven by the expertise of teams and individuals, partnering
with customers and participating in the life of the Company.
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INFORMA PLC ANNUAL REPORT 2018 Nearly 2,000 colleagues also contributed to an assessment
of business culture and values during the second half of 2018,
providing rich insight into what each of us believes matters in
the workplace and what engages and motivates in each area.
The immediate focus in 2019 is to complete the AIP, consolidate
our positions and maintain progressive improvements in our
operating performance. This will create the foundations for
Informa’s future performance, growth and scale.
This work is informing a brand and Values project to establish
a set of shared values and principles we can take forward
as a combined Group on completing the AIP in mid 2019.
The Group remains alive to geopolitical and economic trends
in the markets around us. At a macro level, we continue to
track discussions around the UK’s exit from the EU and, while
not complacent, we feel comfortable there are no material
risks for the Group from this.
“ The great strength of the Informa
detail and the specialism across
Group is that we all work in the
multiple customer markets.”
Consolidation, performance and growth
Informa is a distinctly different business today, compared with
when GAP launched in 2014.
The Group has a new scale in terms of the reach of our
international footprint, the breadth of specialist markets
and customer communities we serve, the number and
strength of our brands and the range of our business-to-
business information services.
The benefits and capabilities provide by GAP, the consistent
and improving performance of our businesses and the addition
of the UBM portfolio in 2018 have enabled us to evolve and
adapt, moving closer to our customers and creating new growth
opportunities. This gives us confidence that in 2019 and the
coming years, we can continue to deliver consistent, sustainable
growth, creating attractive returns for Shareholders, and the
ability to invest and provide further opportunities and benefits
for colleagues and customers.
The great strength of the Informa Group is that we all work in
the detail and the specialism across multiple customer markets,
with a focus on subject areas that are international, growing, and
where knowledge, information, data, connections, the ability to
transact, trade and network are prized. Some examples of these
can be found on page 22 and 23. This breadth and specialism
provide balance to the Group portfolio and build a level of
resilience into our performance.
It is this specialist focus, combined with the passion and energy
of colleagues around the world, that makes me as excited about
the potential and future of Informa today as I was when
I became Chief Executive in 2013. There is much work to be done
to capture the opportunities available to all of us, and I firmly
believe Informa’s best days lie ahead.
Thanks again to Shareholders for their support in 2018, and
to each of the 11,000 colleagues within the Group who care
and contribute to this business every day.
Stephen A. Carter
Group Chief Executive
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Strategic Report
Business model
How Informa
operates
1
Informa draws on…
2
We develop and support
our assets and resources
in various ways
Talent
The expertise, engagement and contribution of 11,000 colleagues, who
create and curate content, data and information services, deliver events,
provide access to audiences and networks, and serve customers
Our culture encourages professional development, active
participation and the exchange of ideas
Authority is close to the business; colleagues are empowered
to respond to customer needs and incentives are aligned to
business objectives
Colleagues are often experts in their markets, with a specialism
that builds trust and value for customers
Brands and intellectual property
Brands are protected and actively promoted within customer
communities, building recognition, value and profile among customers
Hundreds of unique product brands for specialist markets that customers
engage with and buy, plus the content and data we create and source
Technology
Digital and data platforms and capabilities that serve customers online
and at events, manage sales and operations and deliver content
Relationships and partnerships
Relationships formed with customers in specialist communities plus
critical business partnerships
Financing
The strength of the Group’s Balance Sheet and ability to access
external sources of equity and debt capital
We follow codes and standards around the quality, trustworthiness
and independence of content and data
Continuous investment in platforms and technology to improve how
content is delivered, support new product development, enhance
capabilities, safeguard the customer experience and maintain resilient
business operations
We seek to form close relationships with customers by understanding
their markets, working deeply in their communities and responding
to their needs in an agile way
We establish long-term, mutually beneficial partnerships with
businesses that support the delivery of our products and services,
such as event venues, trade associations and academic societies
We cultivate relationships with Shareholders and debt partners
to maintain access to flexible, competitive finance
We apply a disciplined approach to capital allocation and investment
decisions, including acquisition identification and funding
Access to dynamic and growing
customer markets
We focus resources and investment into building positions and
relationships in growing, dynamic markets where information
services are valued
Our access to and position in a diverse range of dynamic, international
and specialist customer markets from Life Sciences to Aviation,
Technology to Yachting, Finance to Aesthetic Medicine
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INFORMA PLC ANNUAL REPORT 2018 What makes Informa different?
• A focus on specialist communities and markets in which we have brands
•
and long-term positions to develop and grow
International reach allows us to better serve customers wherever they
do business and achieve benefits from scale
• A distributed business, with a common approach and values, where
decision making and the ability to act and adapt are distributed amongst
business teams
• The strength and specialism of our brands. Many are among the must-
attend events for a particular market or must-have sources of insight
• Unique content, trusted insight and high quality data sets, delivered
in ways that can be easily used and integrated
• Discipline in capital allocation and financial management
3
Our products and services are
delivered internationally through
a divisional operating structure
and common frameworks
4
Creating benefits for
Shareholders, colleagues,
partners and our communities
A market and product-focused
operating structure, with four
2018 Operating Divisions, moving
to a five Division structure in 2019
See page 8 for more
Operating Divisions are supported
by shared business services teams
and central leadership and
governance functions
Common culture of participation,
agility and freedom to act shared
throughout the business
Defined authority frameworks
give clarity to decision making
and business activity
Overarching guiding principles
of acting commercially, working
responsibly, striving for excellence
and having the freedom to succeed
Customers are located in 165+ countries,
with Informa offices in 30+ countries
• Long-term capital growth for Shareholders
– Underlying revenue growth of 3.7% in 2018 from
sales of subscriptions and access to data and
content, exhibition space, delegate event
attendance, sponsorship opportunities,
consulting and marketing services
– Total 2018 dividend of 21.90p
• Free cash flow funds dividends and reinvestment
in platforms and capabilities for future growth
– £503.2m free cash flow
• Delivery of intelligence and connections that allow
customers to work smarter and benefit their
businesses and markets
• Generate business activity that creates commercial
opportunity for suppliers and business partners
• Create rewarding work and ongoing professional
opportunities for colleagues
– Salaries paid and other contributions to
colleagues: £608.6m
• Economic contribution to the communities in which
the Group works
– Global total tax contribution of £316.9m
• Social contribution to our communities and partners
– Charitable donations and colleague time and
contribution to community activities
See page 30 for more
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Strategic Report
Our markets
Working in
specialist markets
Through the enlarged Group’s five Operating
Divisions, we work in a range of customer
markets, delivering intelligence, research,
content, connections and data through our
specialist brands. Here are a few examples.
For more information on our brands visit: informa.com
Health & Nutritionb bbvnnvbbbb
From hubs in Boulder, Colorado;
Phoenix, Arizona; Amsterdam; and
London, we deliver large-scale
exhibitions around the world, as
well as insight and intelligence, to
the growing international community
for health and nutrition products and
food and pharmaceutical ingredients.
New York
Aviation vvvvvvvvvvvvvvvvvvvv
The aviation and aerospace community
is a global one, and relies on the latest
data, analytics and intelligence, as well
as forums to source new services and
network. Our brands support specialists
working in air transport, defence and
space, network planning, aerospace, and
maintenance, repair and operations.
São Paulo
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INFORMA PLC ANNUAL REPORT 2018 Pharma, Life Sciences and Medical
From sourcing medical equipment to
analysing clinical trial data, finding Life
Sciences investment opportunities
and understanding the latest trends
in neurology, Informa’s brands help a
range of specialist communities research,
discover and do business in the Pharma,
Life Sciences and Medical markets.
London
Technology
Technology
The new Informa Tech Division brings
together all our brands that serve
areas of the technology community,
from information security to artificial
intelligence, 5G networks, the Internet
of Things, cloud computing, smart
cities and more.
Tokyo
Finance
In Finance, we provide major
branded events, opportunities to
connect and network, and data and
intelligence services to specialist
professional communities from
private equity to retail banks and
financial technology providers.
Sydney
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Strategic Report
Our markets continued
Trends in
our specialist
markets
The customer markets Informa focuses on
are typically highly specialist, international
and dynamic, with long-term growth
prospects. This section includes insight
into five of the markets we work in from
Informa sector experts:
• Artificial Intelligence
• Life Sciences
• Consumer Retail Banking
• Pharmaceutical Ingredients
• Asia
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INFORMA PLC ANNUAL REPORT 2018 e
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Endless opportunities
Artificial intelligence (AI) is entering a new growth
phase, driven by the convergence of three trends:
more data, faster hardware and better algorithms.
Together, they are accelerating research, development
and commercial investment in AI applications at
lightning speeds. Many organisations are scaling
from pilot deployments to full-scale, enterprise
rollouts of AI technology within months, rather
than years. Tractica forecasts that worldwide
annual revenue generated from the direct and
indirect application of AI software will increase
from $5.4bn in 2017 to $105.8bn by 2025.
The breadth and velocity of the AI market have,
however, led to increasing challenges for both
technology adopters and suppliers, in maintaining
the same pace of innovation with their products
and integration plans. AI’s manifestation will shift
alongside other technology macro trends: it is not the
only show in town. Numerous other technologies,
including the Internet of Things, augmented reality,
virtual reality, blockchain, renewable energy, genomics
and 3D printing will influence AI’s development,
adoption and regulation.
Developing use cases
As the creation of data continues to increase
exponentially and customers’ expectations of
AI technology shift, companies must navigate the
hype, adopt new capabilities and adapt their
strategies, all while demonstrating improved
efficiencies and generating new revenue streams.
Broadly, all AI falls into three macro categories: big
data, vision and language. Although most people
think of it as being driven by big data analytics, the
larger growth opportunity is related to vision and
language perception capabilities.
For end-users, AI interactions like robotics or
autonomously moving machines are obvious,
even tangible. But looking at other use cases,
profound opportunities lie in forecasting, empirical
decision making, operations automation, product
optimisation, new business models, greater access
to services, targeted services, enhanced user
experiences and even improved environmental
and public health. Simultaneously, AI poses
many urgent challenges, from data privacy and
re-skilling workforces to uncharted legal and
regulatory questions.
Human interactions
AI currently has a complex relationship with humans
that will change over time. While certain jobs will
become automated, AI is more often poised to
augment human labour and decision making.
Longer term, many applications will be designed
to empower humans with non-human capabilities,
memory, experiences and knowledge. Various
ethical, philosophical, cultural, societal and business
norms will be forced into reassessment.
The jury is still out regarding the ability of machines
to seamlessly interact as a human would. While
social media bots have effectively passed for Twitter
and Facebook users, neither robots nor virtual digital
assistants can disguise their code-based composition.
Another area to consider is how companies are
deploying AI to power virtual agents for consumer
facing interactions. They must balance unprecedented
opportunities for personalisation with significant
risk of failure, faux pas or backlash.
Fragmented maturity
Maturity and the metrics for success in AI vary widely
from application to application. Relatively low stakes
applications, such as movie recommendations, are
widely accepted and used, while others such as credit
scoring or medical treatment recommendations
remain regulatory grey areas and face significant
barriers to widespread adoption.
But AI applications mark the next evolutionary
step in digital transformation. Computing, sensing,
networking and data generation were only the
beginning. The ability to process data more quickly
and intelligently across systems, leveraging hardware,
sensors and cameras, and to digitise language itself,
marks the next era of enterprise transformation.
Clint Wheelock
Managing Director
Tractica, Informa Tech
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Our markets continued
The Welcome desk at
BIO-Europe, our Life Sciences
international partnering event
Clinical thinking
The Life Sciences industry enters 2019 with
cautious optimism amid a great deal of change.
Biotech innovation is booming, exit markets are
robust, and new drug classes are emerging and
gaining regulatory approval. At the same time,
Western companies face increasing competition,
the political and regulatory climate is mixed and
the economics of healthcare remains a challenge.
Investment and consolidation
Innovation is moving fast, particularly in the
US, where venture capital continues to pour
into biotech companies in areas such as oncology,
genomics and chronic diseases. In 2018, US Life
Sciences firms reached a decade high in venture
capital raised, while their European counterparts
saw a smaller-scale increase.
Mergers and acquisitions surged in the past
year, with 150-plus transactions worth a total
of $148bn in disclosed deal values among
therapeutics, diagnostics and medical device
companies. The consolidation trend is hitting
major players in pharmaceuticals and biotech.
Bristol-Myers Squibb’s $74bn buy-out of
Celgene, a merger of two oncology drug giants
announced in early 2019, will impact research,
development and drug pipelines worldwide.
Regulatory approvals
The drug industry continues to see an upswing in
regulatory approvals, with the US Food and Drug
Administration approving 59 new drugs in 2018,
up from 46 the previous year. The European
Medicines Agency approved 42 new active
substances, up from 35 in 2017.
Meanwhile, regulatory changes in China have made
it easier to develop drugs and get them approved
for the fast-rising domestic market. China recently
approved a drug developed by Western companies,
an anaemia treatment from AstraZeneca and
Fibrogen, before any other country.
Recent US drug approvals of note include the
first-ever RNA interference drug; the first-ever
cancer drug that targets a genetic fingerprint
instead of a tumour’s location; and a new class of
migraine medication. Conversely, despite breaking
new ground, CAR-T immunotherapies for blood
cancers have had mixed results commercially.
Progress in approvals should continue in 2019, with
key clinical results expected to impact public health
for years to come. After much hype and discussion
around safety and ethics, the first clinical trials of
CRISPR gene-editing therapeutics are slated to begin
in the US. New drugs for neural disorders, such as
depression and schizophrenia, are poised to receive
regulatory approval, while novel approaches to
Alzheimer’s and neurodegenerative diseases face
crucial tests in patients.
Rising prices
Software and analytics are playing an increasing
role in industry progress. Life Sciences companies
continue to apply AI techniques, particularly in
imaging, pathology and diagnostics.
Digital therapeutics have emerged, with regulatory
approvals granted for new kinds of software to treat
addiction and other disorders. Amazon, Microsoft
and other tech giants are moving deeper into health,
making advances in areas such as healthcare
delivery and infrastructure.
The high cost of healthcare remains a difficult issue.
Tension over rising drug prices is mounting, and
biotech and pharma companies are preparing for
new legislation. The US Government announced
policy proposals to lower drug prices but the
immediate future is unclear. Meanwhile, drug
companies and insurers are signing more outcomes-
based agreements, which tie the payment for a drug
to its performance in patients. Drug makers have
touted these approaches to control costs, but they
might only be useful for a small group of drugs.
With some uncertainty in the regulatory
environment, Life Sciences companies expect to
save more of their cash in the short term, even as
they navigate the substantial opportunities ahead.
Gregory Huang
Xconomy Editor in Chief
Informa Connect
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Digital payoff
The global banking sector is in good health, with
assets, profitability and capitalisation all having
materially increased since the global financial crisis.
Add the prospect of rising interest rates and relaxed
regulatory pressures, and the retail banking industry
appears in better shape than it has been for some time.
The landscape is changing, however. Technology,
demographics, customer expectations and new
competitors are forcing traditional retail banks,
credit unions and mortgage lenders to change
their business practices to avoid being left behind.
Forces of technology
Digital banking has transformed the way bank
services are delivered and consumed. Bank of
America announced in 2018 that, for the first
time, deposits made through smartphones and
tablets outpaced those made through branches.
And according to EY, 85% of banks say that
implementing a digital transformation programme
is a near-term business priority. The investment in
technology to drive efficiency, manage evolving
risks and capture growth opportunities will be
critical for sustainable success.
The emergence of non-traditional disrupters
means banks, credit unions, mortgage lenders
and insurers have been forced to turn to big data,
machine learning and advanced analytics to offer
more directed product placement and capture new
customers. Underpinning these goals and challenges
is the need to make investment decisions based on
real-time, granular data. The appetite for this type
of intelligence varies depending on the size of the
institution: larger institutions have developed
sophisticated analytics while smaller ones require
a synthesised view.
The traditional model of keeping all data in-house
is being turned on its head. Peer contributed data
exchanges are being formed across the financial
services world and having access to this data will
give retail banks important insights on price
elasticity, market share, revenue enhancement,
cost containment and more, helping them make
better investment decisions faster. Open Banking
in the EU, a regulation that allows the use of
open application programming interfaces (APIs)
to enable third party developers to build applications
and services for banks, is a clear example of how
this data and technology transformation is having
a direct impact.
Demographics and customer expectations
Ensuring the best customer experience in the
multi-channel world of brick and mortar branch,
online and mobile banking is critical. The emergence
of non-traditional banks is driving market opportunity
as innovative, fast-moving lenders like Quicken,
Freedom Mortgage, PennyMac and Nationstar have
rapidly taken share from traditional mortgage banks.
Quicken surpassed Wells Fargo as the single largest
mortgage originator in the US, largely due to its
customer experience.
Consumer loyalty to big bank brands has diminished
and satisfaction with mobile and online functionality
has decreased. Only 28% of US consumers say the
experience they receive from their bank’s branch,
online and mobile channels is seamless, according
to Accenture.
New competitors
Consumers are willing and desirous to transact
digitally, and nimble non-banks like Quicken have
used technology to enhance the customer experience
and reduce costs. Innovative fintech companies like
Blend promise to make transactions faster and more
consumer friendly, especially in the face of new
regulations. These technologies offer the potential
to jump ahead of incumbents with lower costs and
superior customer experience.
The net result is that traditional models face
significant margin pressure and must adapt or
risk being left behind. And this is happening
across lending, with companies like SoFi using
these technologies to disrupt student lending,
personal loans and other markets as well.
As consumers are forever wedded to their
smartphones, the banking sector has changed
forever. Matching attractive rates with the speed
and execution of world-class, multi-channel
customer experience are table stakes for retail
banks worldwide.
Craig Woodward
President, Financial Intelligence
Informa Intelligence
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Our markets continued
Recipe for growth
The global pharmaceutical ingredient, processing
and manufacturing market continues to mature,
with the start of 2019 heralding significant
acquisitions and major product announcements.
Businesses in emerging markets like China and India
are shaking up supply chains and bringing scrutiny
from regulators and customers.
Acquiring to stay ahead
Our CPhI Forecast predicts continued consolidation
through mergers and acquisitions of startups. Larger
companies will use their scale to bring these startups’
new technologies, biologics and drug delivery methods
to market; recent notable acquisitions have focused on
the development of cancer fighting drugs and the
continued growth of biopharma and biotech.
These trends suggest that if large pharma companies
want to keep filling their drug development pipelines,
they will need to innovate through acquisition and
continue to bring new technologies under larger
research and development (R&D) budgets.
A question of trust
In order to meet the growing demands of ageing
populations, global R&D investment is forecast to
reach over $183bn by 2020. While R&D continues
to be focused in Europe and the US, China and
India are making large investments, including in
large molecule biologics, and increasingly not only
to support the global market but the domestic
market as well.
The fastest-growing pharma countries realise the
importance of increasing their reputation as reliable,
reputable and transparent markets. According to
the latest CPhI Report, published in October 2018,
a survey of more than 2,000 industry professionals
found that India and China were the countries
whose reputations had increased the most in
the previous 12 months.
Flattening supply chain
While the Pharma industry is facing scrutiny from
regulators and the media, the pharma ingredients
market is facing pressure for transparency, traceability
and efficiency in production, pricing and delivery.
However, with markets including China and India
gaining industry trust and scale, the supply chain
for active pharmaceutical ingredients is flattening.
As companies from emerging markets mature in this
flattened supply chain, there is a growing expectation
for them not only to meet the needs of the clients they
are supplying but also to adhere to strict US Food and
Drug Administration and European Medicines Agency
regulations, to ensure they can reach consumers
across the globe. The result is a growing need for
pharma ingredients, contract services and packaging
providers to develop strategies that work not only
regionally but globally.
With the supply chain becoming more closely
controlled, integrated pharma supply companies
have an opportunity to offer multiple services and
solutions, from contract and lab services to sales.
But everyone, from pharma companies to healthcare
providers, needs to be able to trust the effectiveness
of the process and of the end products.
Digital future
The drug delivery and packaging market is becoming
highly competitive and is focusing on drug delivery
innovations that meet efficiency standards and
demand from digital healthcare systems.
The packaging community in particular has been
investing in digital solutions, with innovations and
research helping to bring new delivery methods
to consumers, as well as new ways to track usage,
dosage and efficiency. These digital offerings
complement the overall trend of digitisation within
healthcare, from patient records to drug usage, that
will continue to offer opportunities for the pharma
ingredients market.
Adam Andersen
Group Brand Director
Pharma, Informa Markets
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Diversity and growth
While Asia is by no means a homogenous region,
there are several business and economic trends
common to a number of Asian markets, which
make it an exciting place to do business and find
commercial opportunities, particularly in exhibitions.
Countries such as China, India and Vietnam are
growing at a much higher rate than the rest of the
world as their economies develop and mature, with
China’s GDP growth hitting 6.9% and India’s nearly
6.7% in 2017 according to the World Bank, compared
with 3.1% globally.
Asia is also home to three of the five most populous
countries in the world, creating large consumer
markets for businesses to target. According to IATA’s
2018 data, Asia-Pacific recorded the largest year-on-
year increase in international aviation traffic of any
region, and India’s domestic market for air travel
posted the highest annual growth rate of any
country, with an 18.6% increase in demand.
When it comes to exhibitions, one of the great
strengths of Asia is its appetite and level of national
support for business, commerce and innovation.
In industries like Manufacturing, Automotive and
Technology, Asia is increasingly taking a leading position
in the global supply chain, and this creates huge
Informa’s footprint in Asia
Presence in 10+ countries
New Delhi
Mumbai
Bangkok
Kuala Lumpur
Beijing
Seoul
Tokyo
Shanghai
Hong Kong
Ho Chi Minh City
Singapore
Jakarta
demand from businesses to connect with national
and international customers, something exhibition
platforms provide at scale.
This alignment is reflected in the rapid expansion
of the exhibitions industry in the region.
China became the world’s second largest exhibitions
market in 2015 and was valued at $2.7bn in 2017,
growing at 11%. Part of this growth is thanks to the
construction of new venues in tier two cities as well
as expansion of existing venues in the country’s
largest hubs. In late 2019, the Shenzhen World
Exhibition & Convention Center is slated to open, which
will ultimately offer over 500,000 sq. m of exhibition
space, the largest single exhibitions venue in the world.
This commitment to exhibitions as a source of
international investment is a trend being mirrored
in other countries across Asia.
For example, both Thailand and Indonesia have
formed a national Convention and Exhibition
Bureau, specifically to provide active support for
the exhibitions market.
In a region as large and diverse as Asia, there is not
a one-size-fits-all model for a successful exhibitions
operating approach but there are common factors
that are important. Local relationships are critical,
as individual markets have their way of doing things,
from dealing with local authorities and trade
associations, to collaborating with partners and
managing suppliers. Having a strong and recognised
brand also helps, as trust and reputation are key.
Perhaps the most important factor is attracting talent.
Exhibitions is by nature a people business, dependent
on the commitment and focus of individuals to bring
brands to life. With the growth and innovation
happening around us in other industries, attracting
high quality talent into the exhibitions industry is not
easy. One of the ways we are addressing this is through
local partnerships; for instance, we have collaborated
with the South China University of Technology to
create a training base for future event professionals.
In addition, our Asia operation is known for its internal
training programmes which have proved successful
in retaining and developing talent.
Margaret Ma Connolly
Informa Markets Asia CEO
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Engaging inside and outside Informa
Engaging inside and
outside Informa
To operate, grow and succeed, Informa relies on
many different communities and partners inside
and outside of the Company.
We actively manage our relationships and engage
with the communities most important to the
business: our colleagues, our customers and their
communities, the local communities we work with,
the many business partners that help deliver our
products and services, and the Shareholders whose
support provides funding for our operations. The
Group also is mindful of its relationship with the
environment and the use of natural resources.
At all times, Informa aims to participate in and
contribute to our key communities in a way that
creates a positive impact and supports the business’s
ongoing growth and success. This section provides
examples of how we work with our communities,
with Shareholder engagement detailed on page 126.
Inside Informa:
Growing with our colleagues
Informa is proudly a people business. Each of our
11,000 colleagues brings something different to
work; a unique set of abilities, experience, ideas,
energy and knowledge, the sum total of which
drives Informa’s success.
The Group takes a structured approach to fostering talent
focused on three areas: attracting the right mix of talent,
supporting colleagues to progress, develop and be the best
they can be, and engaging colleagues to create a rich and
dynamic culture based on participation and the exchange
of views and ideas.
Progress is measured in various ways, including through views
given in the regular Inside Informa engagement initiative (see
Group KPIs on page 60), exit surveys and informal feedback. The
Group’s Code of Conduct and suite of 14 global policies continue
to govern our ways of working, supported by the whistleblowing
service Speak Up for reporting and resolving issues confidentially.
Attracting the right mix of talent
Attracting colleagues with a diverse range of skills and experience
is fundamental to the Group’s long-term success, and we aim to
remove the potential for any bias at the point of recruitment and
beyond. In 2018, unconscious bias training was extended from
recruiters to managers in Academic Publishing and, following a
successful pilot in the European Shared Service Centre, Informa’s
UK-based Apprenticeship Scheme was expanded. There are
now approximately 50 apprentices across the Group, 30 of whom
began a newly launched management training programme
certified by the Chartered Management Institute.
Informa’s Graduate Fellowship Scheme continues to attract
hundreds of applicants from a broad range of UK universities,
and a demanding selection process saw six new Fellows join
the Group in 2018. Informa has deliberately made the scheme
as flexible as possible so it can be tailored to each graduate’s
skills, experience and interests and since it launched in 2014,
12 Fellows have taken permanent roles across the Group.
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INFORMA PLC ANNUAL REPORT 2018 strategy in a standardised way. Learning Councils of subject
matter experts met to approve learning needs and offerings
for colleagues in sales, marketing and operations roles. This
saw over 1,200 colleagues attending one of 200 classroom-
based learning sessions. At a cross Group level, 2018 saw the
completion of the first Informa Inspire programme, targeted
at those reporting to Senior Management teams to support
the development of future leaders.
In 2019, following a successful trial in Global Exhibitions and
Global Support, LinkedIn Learning will be expanded to more
areas of the business, offering on-demand online access to
a wide range of development resources.
Participating and engaging in work life at Informa
Creating an environment of openness, exchange and dialogue,
where all colleagues can equally contribute, be heard and
inspired, is at the heart of Informa’s culture.
A key area of engagement activity in 2018 was around the
combination with UBM. Throughout the process, colleagues
were kept informed and engaged via an integrated, visually
exciting campaign that included branded newsletters, videos,
emails, intranet stories and a dedicated microsite.
Midway through the year, 60% of colleagues gave feedback
on the combination via Inside Informa Pulse. This is a
regular platform for all colleagues to have their say on various
aspects of work life as well as providing a measure of overall
engagement levels that are used to drive change and action
across the Group.
Separately, colleagues were also asked for views on workplace
culture as part of a wider project to better understand the
brand, culture and purpose of Informa following the combination
with UBM. Over 1,800 colleagues gave feedback via an online
survey and 250 took part in a series of discussion groups.
Responses have helped to inform the Group’s new brand
rollout in 2019.
Informa uses various internal communication channels to
keep colleagues informed on business updates, important
news and key activities.
These include monthly CEO blogs, Group-wide town hall
webcasts, divisional and local newsletters and regular
campaign-based activity.
Informa 2018 Graduate Fellows
Rewarding and sharing in success
Informa invests in colleagues through competitive salaries
and flexible benefits, and we are accredited by the Living Wage
Foundation for ensuring those based in the UK are paid at least
the Living Wage, an independently calculated amount based on
the cost of living.
As well as providing benefits packages tailored to each region,
the Group now offers two equity/share plans that give colleagues
an attractive opportunity to share more directly in Informa’s
performance. In 2018 and in recognition of our expanded base
in the US, a new employee stock purchase plan (ESPP) launched
for those based in the country that lets colleagues buy Informa
stock at a 15% discount.
ShareMatch remains a popular way for colleagues in Australia,
Germany, the Netherlands, Singapore, Sweden, the UAE and
the UK to invest in the Group while receiving one free share
for every share purchased, and colleagues from UBM will be
able to participate in both the ESPP and ShareMatch on an
equal basis in 2019.
Investing in workplaces
Informa’s ongoing investment in work spaces is designed to
create environments that make work personally enjoyable
and professionally stimulating and productive.
In 2018 we opened a new hub office in New York, bringing
together over 300 colleagues from Business Intelligence,
Global Exhibitions, Knowledge & Networking and Global
Support into an upgraded, modern and collaborative single
base for the first time. New York-based colleagues from UBM
will move into the building in 2019.
Developing our talent
Informa’s learning and development programme is based on
a mix of role-specific accreditation, internal management and
leadership development programmes, and classroom-based
and online training courses.
In Global Exhibitions, a global training framework was
launched in 2018 to align personal development with business
Informa’s new New York office
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Engaging inside and outside Informa continued
Women in Publishing
Supporting and
celebrating women
Within Academic Publishing, the Women in Publishing
community is an internal forum, created voluntarily by
and for colleagues, that aims to celebrate success and
enhance women’s professional development.
Women in Publishing ran events in the UK and US in 2018
with a global reach, including a Women in Technology
panel, a session on imposter syndrome run by an external
coach, a presentation from CEO Annie Callanan on
leadership, and workshops on assertiveness. Debate is
encouraged and the community has an online forum to
share news and inspiration between events and connect
colleagues worldwide.
“We set out to encourage dialogue about the challenges
and opportunities for women in the workplace, but with
a practical approach and focus on making a demonstrable
difference to the working lives of our colleagues of all
genders. We’re proud that Women in Publishing activities
grew in scope in 2018 and we have exciting plans for 2019”,
said Fiona Counsell, Head of Open Access Operations and
Policy, and a Women in Publishing committee member.
Supporting inclusion
AllInforma is our approach to promoting a supportive and
inclusive working environment and engaging all colleagues
on diversity and inclusion, and is reinforced by the Group’s
Diversity and Inclusion Policy.
Building on 2017 activities, Informa launched AllInforma
Balance on International Women’s Day 2018, a platform
for supporting colleagues on matters relating to gender
and gender balance, which included new online access
to personal development resources.
The AllInforma Top Women series of interviews with leading
female colleagues are some of the most viewed features on
Informa’s intranet. Colleagues from the UK have also begun
planning for the launch of AllInforma Rainbow, a programme that
will support and engage colleagues on aspects of LGBTQI issues.
Supporting values and behaviour
Informa has a framework of policies that help guide and support
colleagues to act respectfully, lawfully and with integrity. At its
heart is the Code of Conduct. Translated into five languages, it
offers clear guidance on areas including human rights, modern
slavery, and dignity and respect in the workplace.
It is mandatory for colleagues joining the Group, including Board
members, to complete Code of Conduct and Anti-Bribery and
Corruption training, and non-compliance with the Code of
Conduct can result in disciplinary action.
Senior Managers and Board members also take part in office-
based forums around the Group where colleagues can ask
questions and provide opinions, and colleagues are also
encouraged to organise local forums and groups on topics
that interest them.
We continue to aim for a 100% completion rate while allowing
new joiners 30 days to complete training. As an enlarged Group,
our Code of Conduct and key policies are being reviewed and
will be relaunched, along with an exercise to align recording and
reporting practices.
Informa’s intranet and digital workplace Portal is an important
channel for finding and sharing views and information. Upgrades
in 2018 included the launch of a new social conversation tool
which lets colleagues start and contribute to discussions on all
aspects of work life.
Following the launch of the EU’s General Data Protection
Regulation, all colleagues were invited to take Privacy at Work
and Data Protection training to ensure widespread awareness
of the importance of proper data privacy practices, including
how we collect, use, share and store information and data.
The Informa Awards are another major engagement activity,
and a popular way to reward and celebrate outstanding
colleague achievements throughout the year. There were
over 1,000 submissions for the 2018 awards, more than
in any previous year.
Specialist training, endorsed by the Group Finance Director, on
how to spot and avoid facilitating tax evasion by third parties
was also delivered to around 1,000 colleagues in 2018.
The confidential whistleblowing service Speak Up lets anyone
report concerns relating to the Group, with no tolerance for
retaliation of any form for raising concerns. Investigation
training was conducted with HR and Compliance teams in
2018 to further improve the consistency and professionalism
of how any breach investigations are run.
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INFORMA PLC ANNUAL REPORT 2018 Putting
customers first
FAN EXPO
Year-round fan engagement
FAN EXPO Canada is one of the largest events in our pop
culture portfolio; an exciting and vibrant event where
comic, film and gaming fans meet actors and creators,
come together as a community and find the latest
products from our exhibitors.
Away from the show floor, in 2018 we ran a new market
research project to understand how the event and
brand could better serve fans and deliver an enhanced
experience next year. This included several facilitated
customer round tables in both the US and Canada, as
well as extensive surveys for each show.
Senior Marketing Executive Rija Tariq reported: “The direct
feedback from fans led to a number of quick wins, such as
fan-led advice sections on social media, in-app shopping
categories showcasing local artists and more designated
community meetup spaces for cosplayers. Plus, lots of the
ideas generated from our research have been fed into
long-term plans around how to keep FAN EXPO a premier
brand for comic fans in North America and a continued
celebration of fandom.”
Academic Publishing
Helping editors promote
research excellence
Our Academic Publishing teams support many elements
of the research publishing ecosystem, and one of their
most recent investments has been in upgrading the
resources available to journal editors.
A newly refreshed Editor Resources website launched
in November, promoted through a range of vehicles
including a new video, community events, social media
and direct editor outreach by teams around the world.
The site was designed around editors and the key parts
of their role to meet the needs of the community at every
stage of their career, with curated information and policies
from our teams, best practice guides, and blogs and case
studies where editors can share stories with one another.
As Lan Murdock, Communications Manager for Societies
and Editors, explained: “Our aim is to support our journal
editors more effectively and highlight the important
role they play in safeguarding the quality of journals
and promoting responsible research. The site has been
featured in the European Association of Science Editors
blog and online toolkit for journal editors. We’ve had other
good feedback on the content and how easy it is to use,
and will keep building on it this year.”
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Two examples of different customer communities we work with,
and the outcome of our engagement activities, can be found in our
pop culture events portfolio and in our global journals business in
the panel on the previous page.
Outside Informa:
Partnering for success
The Group relies on a range of business partners to
deliver our products and services, and through open
and proactive engagement we aim to establish
strong and mutually productive relationships that
have a positive effect on the wider supply chain.
To ensure business partners are aware of the standards we work
to and our expectations of them, engagement around Informa’s
Business Partner Code of Conduct continued to be a focus in
2018. This included a well-received training session for exhibition
partners in Egypt.
Strategic Report
Engaging inside and outside Informa continued
Outside Informa:
Putting customers at the heart
of what we do
Informa operates in many different specialist
markets, and a diverse range of customers draws on
our data, intelligence and content and engages with
our event, exhibition and lead generation services.
What is common throughout our business is that understanding
and staying in step with customers’ needs and market trends
are critical to our business success.
Colleagues across the Group engage with customers to inform
how we should develop our current products and strengthen
our brands, to pinpoint which new services we should focus
investment towards because they meet customer needs and
provide new commercial opportunity, and to understand where
we can deepen our relationships for mutual benefit.
Health, safety and security
Partnering for safe
and effective events
From a venue and its operations staff to contractors, exhibitor
teams and local authorities, it takes many parties to deliver
a safe, effective and successful event.
To ensure awareness of Informa’s standards, build on our Business
Partner Code of Conduct and play our part in enhancing safety
culture, the Group held a free-to-attend Safety Awareness
Training Day in Cairo for local contractors and venues.
Informa’s Health, Safety and Security team and experts from
key suppliers spoke on topics from hazard awareness to safe
working best practice and structural safety. The dual language
training was recorded so it could be disseminated throughout
the business partners’ teams.
Health, Safety and Security Manager Gary Buckett said: “Sessions
sparked healthy interaction amongst our business partners to
raise the local industry’s safety standards to international best
practices. The safety initiative has been a real success and is a
template we can introduce into other markets, to improve the
local industry safety culture and help continually improve
exhibition standards for everyone involved.”
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INFORMA PLC ANNUAL REPORT 2018 The Business Partner Code of Conduct includes our expectations
around the handling of information data, zero tolerance of bribery
and corruption, and standards in areas such as employment
conditions, child labour and modern slavery. It is available on our
website and delivered in five languages, and business partners
also have access to the Speak Up whistleblowing line for reporting
issues and concerns.
Our support for the principles laid out in the Universal
Declaration of Human Rights continues. Within the Group,
our major human rights-related risks are focused primarily
on colleagues, contractors and our value chain.
A Group-level human rights risk assessment is being conducted
to understand our potential human rights impact areas and
identify the mitigating actions we take to manage this risk.
The assessment, which has included the development of a
due diligence process and a new Human Rights Policy, to be
launched in 2019, has looked at the enlarged Group, including
the new countries in which we now operate.
In the specific area of modern slavery, we extended the training
developed in 2017 on how to spot and report issues to more
colleagues last year. Our full approach can be found in the
Modern Slavery Statement, approved by the Board, on the
Informa website.
In 2018 the Group prepared its first report on supplier payment
practices and performance for UK-related contracts under new
UK regulation. As an enlarged Group, we are aligning systems
and practices across the business with the aim of upholding
consistent payment practices while providing an effective
process for resolving any queries or complaints.
Outside Informa:
Contributing to our local communities
We are proud to be part of the communities in
which we live and operate, including the local
communities around our offices and those linked
to our events.
The Group aims to comply with tax laws and regulations
everywhere we operate. We believe that a fair and effective
tax system benefits society and business, and our approach
balances the interests of Shareholders, governments, colleagues
and the communities in which we operate. In 2018, the Group’s
global total tax contribution was over £300m.
Through the hundreds of events Informa produces each year,
we support local communities by providing jobs and supporting
suppliers and local businesses.
In 2018 Informa piloted a measurement tool to more effectively
gauge the positive economic impact our events have on local
areas, which will be made available to more of our brands in 2019.
We also take our responsibilities for helping to improve overall
event sustainability standards seriously. In 2018, we were
part of a group of 20 sustainability leaders from the industry
which convened to discuss the future of sustainable events
and identify ways to work together on key challenges. The
group identified over 25 shared sustainability issues and
voted on four core areas to focus and collaborate on.
Many of Informa’s events support community organisations
that operate in the same market sectors. Support is offered
both financially and by additional means such as promotional
opportunities at shows and in marketing materials.
At a Group level, Informa’s key annual fundraising initiative
Walk the World raised £171,000 for local organisations in 2018,
with a record 4,000+ colleagues from 85 offices taking part in
more than 60 walks and collectively covering over 26,000 miles,
further than the length of the Equator.
Some teams used Walk the World as an opportunity to form
deeper connections with their chosen charity partners: for
example, Informa’s Paris-based Beauty & Aesthetics team
developed a new partnership with Raconte-Moi Un Visage,
an association that helps patients with facial disfigurements.
The team promoted the partnership and collected donations
at its FACE show in London.
The Taylor & Francis team in Cape Town partnered with Read to
Rise, a non-governmental organisation committed to promoting
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Engaging inside and outside Informa continued
youth literacy in South Africa’s under-resourced communities.
As well as raising funds during Walk the World, several colleagues
volunteered at a local school along with members of the Read
to Rise team.
Informa’s volunteering programme encourages all colleagues
globally to use their full allocation of volunteering days to spend
time with a charitable organisation of their choice. Opportunities
where professional skills can be used and developed are particularly
encouraged. Following the combination with UBM, Informa is
reviewing its volunteering and charitable donation policies to
take the best aspects from both organisations and create
consistency across the Group.
Outside Informa:
Working responsibly with
natural resources
Informa takes its environmental responsibilities
seriously and aims to reduce its environmental
impact on natural resources wherever possible.
We take a considered approach to our consumption of natural
resources, which mostly relates to sourcing paper and minimising
energy and waste in our offices and at our events, and where
possible we seek to raise awareness around sustainability issues
with suppliers, customers and venue owners.
As an example, last year, a team from the Fashion business
partnered with the Mandalay Bay Convention Center in Las
Vegas to replace more than 1,000 light fittings with LED lighting,
increasing the overall brightness of the interior hall while
reducing energy use by 85%. The upgraded system was
used for the first time during our MAGIC show.
In terms of paper sourcing, any organisations supplying timber
and paper products to Informa are expected to source from
FSC or PEFC accredited suppliers as far as possible.
This is set out in Informa’s Paper and Timber Sourcing Policy, which
aims to ensure that all paper and timber used in our products
and services is responsibly sourced from legally harvested,
well-managed sources that have due diligence in place to ensure
there is no slavery in the supply chain, and we are sourcing more
than 90% of our paper from responsible sources now. This policy
will become part of an expanded Environmental Policy in 2019,
being introduced to bring greater consistency to the range of
practices and guidelines that exist across the enlarged Group.
36
Live Design International
Building community relationships
Many of Informa’s events and brands develop long-lasting
relationships with local community organisations, providing
both financial and non-financial support.
In 2018, Live Design International (LDI), the event for live
entertainment professionals, gave visitors the chance to
donate money to six charities upon registration, matching
contributions up to $10,000.
But its support for local communities went further: a
partnership with Families for Effective Autism Treatment (FEAT)
saw families affected by autism invited to walk the show
floor and visit the Live Experience Lounge, an immersive,
interactive sensory booth sponsored by exhibitors.
LDI show manager Jessi Cybulski explained: “Light can be
used as a form of therapy for children with autism, which
means many of the products we design, manufacture,
and operate in this industry have a therapeutic effect for
children. We hope working with the Nevada chapter of FEAT
is just the beginning of what we as an industry can do.”
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INFORMA PLC ANNUAL REPORT 2018 Non-financial
information statement
In various sections throughout this report, we describe the way Informa works with its most important
partners and communities, the purpose of doing so and how these activities are managed. This table provides
a quick guide to such non-financial activities and where to find more information on them. It also provides
compliance with Non Financial Reporting Directive requirements. Some of our policies are internal ones;
policies available on the Informa website are marked with an asterisk.
Key topic areas
Major supporting policies
Related risks and other information
Colleagues
and their
contribution
• Code of Conduct*
• Diversity and Inclusion Policy*
• Board Diversity Policy
• Health and Safety Policy
Respect for
human rights
• Modern Slavery Statement*
• Business Partner Code of Conduct*
• Diversity and Inclusion Policy*
• Editorial Code*
• Health and Safety Policy
• Data privacy
•
Inside Informa: Growing with our colleagues
• Risk: Inability to attract and retain key talent
• Risk: Ineffective change management
• Group KPIs: Colleague support and participation
• Nomination Committee report
• Outside Informa: Partnering for success
• Risk: Health and safety incident
• Group KPIs: Business sustainability
Regard for social
matters: our
local and
customer
communities
• Business Partner Code of Conduct*
• Responsible advertising*
• Editorial Code*
• Health and Safety Policy
•
• Volunteering and donation guidelines
International Trade Policy
• Outside Informa: Partnering for success
• Outside Informa: Contributing to our local communities
• Risk: Privacy regulation risk
• Group KPIs: Business sustainability and use of
natural resources
• Anti-Bribery and Corruption Policy
• Gifts and Entertainment Policy
Inside Informa: Growing with our colleagues
•
• Risk: Inadequate regulatory compliance
• Paper and timber sourcing*
• Group KPIs: Business sustainability and use
of natural resources
Page
30
70
68
60
103
34
71
60
34
35
72
60
30
72
60
Anti-bribery
and corruption
compliance
Managing
environmental
impact
Principal risks
and impact on
business activity
Business model
description
Non-financial
key performance
indicators
• Risk management and principal risks and uncertainties
62
• How Informa operates
• Understanding the enlarged Group
• Group KPIs
20
8
60
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Strategic Report
A snapshot of our Divisions in 2018
A snapshot of our Divisions
In 2018, Informa traded through four Operating Divisions. The UBM business reported
separately for the six months it was part of the Group in 2018. Read more about each
Division, its position and performance highlights on the following pages.
Academic Publishing:
Taylor & Francis
2.2%
underlying
revenue growth
£533.2m
23%
2018 revenue
of Group revenue
Serves scholarly researchers,
universities and research institutions
Delivers high quality books and
journals in print and digital formats
See pages 40 to 43 for more detail
Global Exhibitions
6.7%
underlying
revenue growth
£575.8m
24%
2018 revenue
of Group revenue
Serves businesses in a number
of specialist markets
Delivers large-scale branded exhibitions
and lead generation platforms
See pages 48 to 51 for more detail
Underpinned by:
Global Support
38
Serves Informa’s commercial teams
Delivers shared business services
and function-specific expertise
See pages 56 to 59 for more detail
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INFORMA PLC ANNUAL REPORT 2018 Business Intelligence
2.6%
underlying
revenue growth
£385.6m
16%
2018 revenue
of Group revenue
Knowledge & Networking
2.3%
underlying
revenue growth
£261.4m
11%
2018 revenue
of Group revenue
Serves businesses in specialist markets
including Pharma, Finance and Maritime
Delivers digital insight, intelligence
and data products, plus consulting
and marketing services
See pages 44 to 47 for more detail
Serves businesses in specialist
markets including Finance,
Life Sciences and Technology
Delivers content-driven events,
training and digital platforms
See pages 52 to 55 for more detail
UBM
Joined the Group in mid June 2018
2.8%
£613.5m
pro-forma 12 month
revenue growth
revenues
26%
of Group revenue
See Financial Review on
pages 76 to 89 for more detail
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Divisional Review Academic Publishing
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INFORMA PLC ANNUAL REPORT 2018 Divisional Review
Academic Publishing
High quality
scholarly research
Annie Callanan
Taylor & Francis CEO
How we serve customers
High quality, cutting edge and peer reviewed research is what
scientific discoveries, commercial research and development
and future scholarship are based on.
Our Academic Publishing Division Taylor & Francis commissions,
curates, produces and publishes scholarly research and reference-
led content in specialist subject areas that advances research and
enables knowledge to be discovered and shared.
We invest in maintaining and enhancing the technology that
makes current and historical content discoverable and usable
today, oversee the submission, independent review and
production process, maintain and promote research brands
and work closely with authors, editors and researchers to
support their work.
Our markets and brands
Taylor & Francis operates through highly regarded imprints
including Routledge, CRC Press, Taylor & Francis, Cogent OA
and Dove.
Our content spans a range of specialist subject categories
with particular strengths in Humanities & Social Sciences
including areas such as Archaeology, Psychology and Education,
and in the Biomedical, Life Sciences, Physical Sciences and
Engineering fields.
The Division publishes around 145,000 book titles in print
and digital formats, including 7,100 new books in 2018.
It publishes 2,700 journals from which 150m articles
were downloaded in 2018.
Financial performance in 2018
• The Division delivered another year of consistent
•
financial performance, with underlying growth of 2.2%.
In Journals, our subscription business remained solid,
maintaining high renewal levels alongside good growth
in our expanding Open Access (OA) business.
• After a strong end to 2017, the Books business maintained
good momentum into 2018, in part driven by our new ebooks
platform launched in late 2017.
• We signed a number of new publishing partnerships with
societies, including with the China Academy of Science and
the China Academy of Social Sciences.
Just over 50% of the Division’s revenues are subscription-
based, with high levels of visibility and predictability.
In 2018, ebook sales accounted for around 30% of total
book sales.
•
•
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Divisional Review Academic Publishing continued
Opportunities for growth and development
A stable market for Academic Publishing: Some of the main
purchasers of content are academic libraries. According to
consultants Outsell, total library spend on content grew by 2%
in 2018 and spend by academic libraries by 3.2%. In its latest
study, Simba Information predicted industry growth of 1.5%
in Humanities & Social Sciences books in 2018.
Choice and flexibility in publishing models: OA continues to
be a feature of the academic publishing market, particularly in
Europe, as an alternative publishing and payment model. Over
recent years, we have been steadily building our OA content
and capabilities, working with customers to tailor subscription
packages, converting journals to OA and adding new journals
and teams. In 2017 we acquired OA specialist Dove Medical
Press, adding valuable OA capacity and capabilities that are
being deployed across the business more broadly (see panel
opposite). Taylor & Francis now publishes over 320 pure OA
journals and offers hybrid OA options across the majority of
its subscription journal portfolio.
Digitisation and discoverability: As the corpus of research
grows, discoverability is paramount. When a keyword can
return thousands of results, relevance, refinement and
quality of search are crucial for a good reader experience
and must be continuously revised.
Taylor & Francis continues to invest in digitisation and
discoverability across Journals and Books. In 2018 we
embarked on a project to upgrade descriptions, bibliographic
data and chapter-level information, and brought our ebook
delivery platform in-house, making it easier to develop the
technology. Nearly 85% of the Division’s Books backlist has
now been digitised.
As authors and end-users look for ever more intuitive
navigation, faster and better searches, and content to be
delivered in a way that can be used and shared, we recently
added Code Ocean to the tandfonline platform, which enables
authors to include live code in their research and users to
extrapolate and run executable code. Investments in digital
discoverability and search engine optimisation mean that
our Journals platform tandfonline.com is among the world’s
top 900 most visited websites.
Attracting high quality content from around the world:
The market for academic research is a global one and
dominated by English language content. After years of
steady growth, a tipping point was reached in 2018 when
China became the largest source of research in the world.
Taylor & Francis has operated in China for a decade, and
building strong relationships with Chinese authors and
institutions has been a focus over the last three to five years.
“ Taking the building blocks of deep, specialist and high
quality content, we’re creating a digital-first business
that is dedicated to advancing research and knowledge
in the academic community and beyond.”
Annie Callanan
Taylor & Francis CEO
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INFORMA PLC ANNUAL REPORT 2018 Spotlight
Taylor & Francis in 2019
Worldwide demand for robust, validated and authoritative
content remains strong, and the Division is targeting another
year of 2%+ growth by continuing to enhance its content and
the experience of its digital platforms, and invest in new
capabilities and growth opportunities like OA.
Taking Open
Access to the
next level
OA research continues to grow. In a market that is increasingly
driven by choice, we aim to give researchers the publishing
models and exposure, and the formats and price points, that
deliver their work with maximum impact. This includes working
flexibly with research funders, institutions and authors, providing
tailored packages to suit markets that are gradually shifting
towards OA.
Geographically, we continue to explore opportunities and expansion
in markets such as China and India, where large populations and
strong tertiary education sectors offer opportunities for both
sourcing and providing scholarly knowledge.
We are also implementing a digital-first initiative to make
each step in the value chain between customers, suppliers
and ourselves an efficient, digital process.
While Informa’s other Divisions are moving to new brand
identities in 2019, Taylor & Francis is also undergoing a
brand review to assess whether an updated approach,
either aligned to the Informa brand or to another identity,
would provide greater value to the business and to
customers, and complement its existing strong and
well-known individual imprints.
Taylor & Francis has long offered the choice to
publish OA, where authors (or more typically,
their funders) pay for the cost of publishing
their research. The work is then offered free
for anyone to read, enabling knowledge to
be widely shared and accessed.
In 2017, our capabilities and reach in OA were extended
with the acquisition of Dove Medical Press. Dove brought
more than 90 high quality, fully OA journals into the
Division and added to our portfolio in specialist subject
areas such as diabetes, cancer, geriatrics, nanomedicine,
neurology and and psychiatry. Almost all Dove journals
have been indexed in the industry-recognised Web of
Science and in PubMed, and 14 have gained Impact
Factors, an industry-wide recognition of quality awarded
by Clarivate Analytics.
Publishing Director Deborah Kahn said: “Dove has an
unwavering focus on author service, as well as deep
and productive relationships in China. In addition to
their portfolio of journals, working with the team has
been a rich source of learning for us.”
Taylor & Francis has also brought its expertise and
resources to streamline Dove’s processes. In 2018 this
enabled Dove to handle a 50%+ surge in submissions
and a 25% increase in accepted papers while keeping
peer review and production times stable. All the while,
the two businesses worked to achieve a smooth
integration, where key team members in Dove
remained within the business.
This augurs well for 2019 and for expanding our
OA offering further. We are building a peer reviewer
development team in Beijing and a peer reviewer
selection team in Delhi. As China and India increasingly
become powerhouses of global research, the Division
is well placed to serve authors, libraries and research
institutions in vibrant new markets too.
WWW.INFORMA.COM
INFORMA PLC ANNUAL REPORT 2018
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Divisional Review Business Intelligence
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INFORMA PLC ANNUAL REPORT 2018 Divisional Review
Business Intelligence
Specialist insight
and intelligence
Lara Boro
Informa Intelligence CEO
How we serve customers
In every specialist sector, business and commercial decisions
are founded on trusted data, expert intelligence, research and
knowing the market deeply.
In the market for business intelligence, Informa provides digital
information products as well as consultancy and marketing
services that help companies make better informed decisions,
gain competitive advantage and enhance the return on their
investments, with an increasing focus on predictive and
actionable intelligence.
Our markets and brands
Over 25,000 businesses worldwide subscribe to our 100+
products, which range from insight-focused brands providing
market and trend analysis to intelligence products that provide
real-time data as well as bespoke solutions including consultancy
and direct access to experts.
In 2018, the Division operated in six specialist customer markets:
Agribusiness, Finance, Industry and Infrastructure, Pharma,
Transportation, and Technology, Media and Telecoms (TMT).
Within these markets, our product brands target specific
niches, from clinical trial data in Pharma to equity fund flows
in Finance, global shipping data in Transportation and payment
technology in TMT.
Financial performance in 2018
• 2018 was the Division’s third consecutive year of growth.
Underlying revenue growth reached 2.6% and the Division
represented just over 16% of the Group’s revenue.
• Our largest two markets, Pharma and Finance, performed well,
with strong customer demand through the key subscription
period supporting a growth in annualised contract values,
and continued growth across contingent products and services
such as Consulting and Marketing Services.
• After a major focus on customer management and sales
development, the Division also saw improving momentum
in new business.
• As part of our focus on growing, specialist markets, we
added the ICON Advisory business to our Finance vertical
in 2018, enhancing our position in the consumer finance
intelligence market.
Opportunities for growth and development
Growing market for business-to-business information
services: According to consultants Outsell, the global market
for business-to-business media and business information
now stands at $42bn and is growing at a rate of just under
5% a year. The US remains the single largest market, with
a share of 43% of the global total.
45
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Divisional Review Business Intelligence continued
“ Our customers are looking for specialist, on-demand
intelligence, data and analytics, which help them
solve the evolving challenges in their own markets.”
Lara Boro
Informa Intelligence CEO
Demand for integrated data: Providers of intelligence are
increasingly being challenged to supply live, high quality data
in ways that customers can actively use, not just access. We
are seeing growing demand for data that can pull through
application programming interfaces (APIs) and integrate into
workflows directly; for example, customers taking drug pipeline
and clinical investigator information directly into their customer
relationship management systems to minimise workflow.
Although driven by larger corporate customers with the
technology to integrate data, we see this demand widening
and growing as accessible technology drives down costs.
The Division continues to invest in its API capability, with a
target that all data products will be supported by APIs by the
close of 2019. This trend is also influencing the skills the Division
requires, and we are increasingly looking for talent in fields such
as analytics, data science, data engineering and informatics.
Investments in product and capabilities: Under GAP, Business
Intelligence saw a significant level of investment in products and
platforms, from technologies and products to sales support and
marketing automation, and the resulting benefits are flowing in
the form of improved customer engagement. One example of
continued investment is Citeline in the Pharma vertical (see panel
opposite), which was relaunched early in the year to enable
customers to access and process large amounts of data on
clinical trials and diseases across over 160 countries.
46
Informa Intelligence in 2019
Informa Intelligence enters 2019 with a more focused
portfolio, simplified brand identity, and under the new
leadership of CEO Lara Boro.
Our TMT business Ovum has been realigned to the newly created
Informa Tech Division. Further, as part of the AIP’s Progressive
Portfolio Management programme, the Division has reviewed the
markets in which it has the most opportunity for long-term growth,
with a view to focusing on a more concentrated set of verticals and
delivering an even deeper and richer offering to the specialist
customer communities in those markets.
In turn, in late 2018, we began exploring alternative opportunities
for the Agribusiness portfolio and IGM, our Credit and FX markets
information business. Depending on the outcome of these
discussions, the Division will, over the year, move to a greater focus
on the Pharma market, on the Consumer Retail Banking sector
within Finance, and on Maritime where we have strong brands
and market positions.
A result of the combination with UBM, Informa Intelligence
has added two specialist brands to its portfolio for 2019:
Chemist+Druggist, which focuses on the specialist Pharmacy
community, and Barbour ABI, which provides market intelligence
and lead generation in the construction sector, and adds a new
capability into our portfolio of asset and infrastructure brands.
Having performed consistently over the last three years and
having closed 2018 with a strong run of new business, the goal
is now to make the most of our investments in technology,
product and customer engagement by maintaining the value
and level of subscription renewals, enhancing the new business
pipeline, and taking advantage of contingent revenue streams
where they enhance the strength and depth of our relationship
with customers.
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INFORMA PLC ANNUAL REPORT 2018 Spotlight
Clinical trials with
added intelligence
For a new drug in clinical trials, the road to regulatory
approval is long and uncertain.
The full journey can take 12 to 15 years, but the failure rate along
the way is exceptionally high. But what is certain is that a clinical
trial can cost hundreds of thousands of dollars to run – every day.
With stakes this high, optimising decision making is not just
desirable, but imperative. Citeline is an industry leader in clinical
trials intelligence and informs the trial strategy of many top
Pharma organisations.
Nicola Marlin, VP of Product Management and Innovation, said:
“We have invested in and relaunched Citeline to take its quality
and usefulness to an entirely new level, responding to how our
customers plan and run clinical trials. It is now the product of
more than 100 sources of monitored information, interpreted
and curated by our own scientists and updated every day.”
This data feeds a suite of three Citeline tools. The first is
Pharmaprojects, which helps biopharma companies monitor
the competition and find new acquisition and partnering
targets. It gives sharp visibility of the drugs pipeline: who is
developing what new medicine; for which diseases; who is
moving into the clinical phase, with which trials, and where.
The second tool, Trialtrove, helps companies understand where
competitors are running trials and which types of trials they
should run. It captures data on planned, ongoing and completed
trials: which patients are eligible to take part; the current focus
(such as early-stage toxicity studies, or later-stage efficacy
testing); the overall trial design; and the trial results.
Thirdly, there is Sitetrove, which helps companies plan which
hospitals and clinics to partner with to run trials, and which
physicians to lead them. It shows which doctors have led which
types of trial, in which locations, and with what levels of success.
It updates them on competitor activity with rival products and
their progress; other trial designs and valuable learning to be
gained; and locations where the people, skills and resources
needed – key doctors, eligible patients, hospitals, institutes,
laboratories – might be available.
The new Citeline is the most comprehensive source of clinical
trials, sites and investigator data on the globe. It is more flexible
than ever before, and supports complex searches and analytics
to keep customers abreast of ever more complex clinical trials.
It is also delivering results with a new generation of functions
and infographics.
“Critically, customers can drive how they receive and use
that information. For example, new application programming
interfaces allow them to build dashboards on top of Citeline’s
data, interrogate our content and import it directly into
their workflows.”
This inflow of high quality data is not only optimising the trial
process but delivering a measurable return on investment.
“Some customers report savings on their trial from more
effective data, but it is the ability to get new drugs to market
faster that is the real benefit” said Nicola Marlin.
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Divisional Review Global Exhibitions
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INFORMA PLC ANNUAL REPORT 2018 Divisional Review
Global Exhibitions
Platforms for
international trade
and commerce
How we serve customers
Attracting new customers, meeting and selling to current
partners, generating leads, showcasing products and
discovering the latest solutions for business are common
requirements for hundreds of industries worldwide.
We create large-scale exhibitions where buyers and sellers
in a specialist market can meet face to face, see and show
products, conduct business and build relationships that persist
year-round. These are typically branded and annual events that
over time become must-attend forums for their communities
and provide a platform for trade and commerce in their market.
Exhibitors pay for stand space and other services, often well
in advance of the event, while qualified attendees typically
visit for free.
We work with a range of partners to deliver events, from
trade associations to venue owners, suppliers of stand
services and hotels.
Our markets and brands
Our exhibitions business operates in a number of specialist
markets including Healthcare & Pharma, Health & Nutrition,
Aviation, Beauty & Aesthetics and Agriculture. Some of our
major brands include Arab Health, Natural Products Expo
West, China Beauty Expo and World of Concrete.
Financial performance in 2018
• Global Exhibitions became Informa’s largest Division by
revenues in 2017, following the GAP programme to build
and buy a scale position in the attractive exhibitions
industry and invest in the capabilities for future growth.
• 2018 was a further year of strong performance and
expansion for the Division, with growth remaining at
our target of above-market average levels. Revenues
were £575.8m with underlying revenue growth of 6.7%
and adjusted operating profits of £200.1m.
• This performance was driven by an increase in space
sold at some existing events, selective new launches
and good trading at our largest 30 exhibitions. It was
also assisted by the successful rollout of value-based
pricing to more exhibitions.
Opportunities for growth and development
Strength of the global exhibitions market: According to
consultants AMR International, the global exhibitions market
grew by 3.5% in 2017 and is forecast to grow at an annualised
rate of 5% between 2017 and 2022, with revenues from digital
services estimated to grow at 11% over the period.
The US is the world’s largest exhibitions market, accounting
for over 50% of the markets AMR tracks, with China the second
largest. The overall exhibitions market is fragmented, where
the largest five organisers comprised under 20% of the global
market in 2017. AMR estimates typical exhibitor renewal rates
stand at 65% to 70%. At Informa, we steadily built our position
in the US under GAP and now have a much larger footprint in
China from the combination with UBM’s Asia portfolio.
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Divisional Review Global Exhibitions continued
“ Our ambition is to provide
exceptional visitor and
exhibitor experiences
and opportunities, at our
shows as well as beyond
the show floor, and to help
the specialist markets we
operate in prosper.”
Charlie McCurdy,
Informa Markets CEO
Ongoing product enhancements: To provide customers with
more choice and flexibility, we have been working to create better
differentiated exhibitor packages, with greater options around
stand location, size and access to other exhibition services. This
has also had a positive impact on yield at several exhibitions.
The Division’s MarkitMakr tool, which provides exhibitors with
a year-round online platform to showcase products and allows
buyers to research the market, was implemented more widely
in 2018; see the panel opposite for more data.
Building our capabilities: Under GAP, we invested in a range of
digital and data initiatives, designed to improve the effectiveness
of sales and marketing and to explore additional opportunities for
revenue growth and engagement with customers. The Division
also began the progressive rollout of a common CRM platform
for its sales and operations teams, designed to improve how
we capture and record sales data and ultimately provide better
intelligence for improved customer engagement and sales visibility.
Talent development: The Division has invested in new learning
and development opportunities for colleagues to ensure it
has the skills and expertise needed for an ever more digital
and technology-enabled business. During 2018, over 1,200
colleagues attended one of 200 classroom-based learning
sessions and all colleagues were given access to on-demand
digital learning.
50
Informa Markets in 2019
Informa Markets enters the year with significant new operating
scale, expanded international reach, positions in a broader
range of customer markets and the potential for additional
revenue opportunities from the combination of Informa’s and
UBM’s exhibitions portfolios. It is the largest organiser of
exhibitions in the world by revenue, organising around 500
exhibitions in around 30 countries with a particular presence
in the US and Asia.
The combination with UBM has increased the number of
specialist markets the Division operates in, with new sectors
such as Advanced Manufacturing, Licensing and Fashion, and
added complementary brands to markets in which Informa
already had a presence such as in Natural Products (addition
of CPhI and Food Ingredients), Aviation (Routes) and Maritime
(Seatrade Cruise Global).
After significant time planning and combining the businesses
during the second half of 2018, the Division entered 2019 as
one Informa Markets business with combined teams, single
structures and common budgets. It is now structured into eight
major portfolios, each run by a member of the now-expanded
divisional Senior Management team.
Common platforms, technology and processes will continue to
be rolled out in areas such as marketing to capture efficiencies
of scale, create a single engine to support customer facing
activities across the business and build on our GAP investments
in tools and capabilities. Efforts around consolidating supplier
relationships and co-ordinating elements of procurement will
continue, to create stronger partner relationships and deliver
greater efficiency.
Beyond these combination activities, bringing UBM together
with Informa creates additional customer, revenue and
effectiveness opportunities, which are a priority to explore
and start to capture over 2019.
They include cross marketing events to a larger international
customer base, leveraging new opportunities for sponsorship
across the portfolio and utilising a larger and richer pool of
data to develop new digital and marketing initiatives. In this
area, a new leadership role has been created to focus on
expanding digital services.
The aim for Informa Markets in 2019 continues to be
to outperform the wider exhibitions market and create
capabilities for our continued growth and innovation.
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INFORMA PLC ANNUAL REPORT 2018 Spotlight
Making markets online
The continued growth of the exhibitions market shows
the value of face-to-face forums where buyers and
sellers meet and products are shown and selected.
But what happens during the rest of the year?
Following GAP investment, in 2017 we introduced MarkitMakr,
a web platform that showcases exhibitor products and company
profiles, and allows buyers to conduct research and connect
with a company before and after the event.
“MarkitMakr provides benefits for everyone involved in an
exhibition,” explained Jason Brown, Chief Digital Officer. “For
attendees going to a large-scale exhibition, knowing where to
begin can be overwhelming. Using MarkitMakr means you can
research exhibitors and products in detail in advance, indicate your
interest, inform exhibitors about the products you’d like to discuss
and view there, and create and download a walking list of your top
products and suppliers to make navigating the venue easy.
“Exhibitors find out in advance what products people want
to see and receive qualified leads to use year-round. It also
provides our exhibition directors with useful information
on what the hot products and categories are, so they can
understand and adjust plans according to where foot traffic
is likely to be highest.”
MarkitMakr was first deployed under the Omnia brand for our
Dubai-based Life Sciences events and is now in place across
31 exhibitions. Around 80,000 products are listed across the
platform, with nearly 40,000 product listings on Omnia. In the
first eight weeks of 2019, Omnia generated over 10,000 leads
for exhibitors, with buyers spending an average of eight minutes
on the platform.
The platform continues to be developed by our in-house digital
team, with enhancements including upgrading the directory’s
search function to help customers find products faster,
improving search engine optimisation, creating matchmaking
functionality and meeting scheduling, and enabling integration
with third party mobile apps.
Jason continued: “We’re really excited to be rolling out MarkitMakr
to our Natural Products exhibitions in 2019. There’s nothing quite
like it in this market, and it’s an industry where the fine detail of
each product is critical: what ingredients a food product contains,
where they were sourced from, and so on. MarkitMakr makes it
easy to share and find that information, as well as enabling
suppliers of all sizes to connect with major buyers before,
during and after the show. It’s expanding the buyer–seller
relationship to create a year-round market.”
80,000
Products listed on MarkitMakr
8 minutes
Average time buyers spend on the site
A snapshot of the online
MarkitMakr product
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Divisional Review Knowledge & Networking
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INFORMA PLC ANNUAL REPORT 2018 Divisional Review
Knowledge & Networking
Engaging
communities, in
person and online
Andrew Mullins
Informa Connect CEO
How we serve customers
Fear of missing out is not just a phenomenon driven by social
media. Professionals in every specialist market have a need to
meet, learn, network and be seen at their community’s most
important events.
The rise of online information and the opportunity to access and
connect with experts digitally has affected parts of the events
industry. There is, however, enduring demand for branded events
that attract a sector’s most senior and respected players and
create imaginative environments in which to network with them.
Our markets and brands
In our connectivity and content Division, we operate more
than 800 content-driven events for global communities in Life
Sciences, Finance, TMT and a number of other specialist sectors.
In terms of scale, around 35 of our events generate over £1m
in revenue. Our major brands include SuperReturn, FundForum
and Inside ETFs in Finance; BIO-Europe, Biotech Showcase,
Bio-Process and TIDES in Life Sciences; and AI Summit, Internet
of Things US and 5G World in TMT.
Financial performance in 2018
• The Division exited 2017 with a modest 0.1% return to
growth. In 2018, the continued benefits of its focus on
major event brands and investment in digital infrastructure
under GAP drove further improvements in performance.
• Underlying revenue growth reached 2.3% and the Division
•
•
represented 11% of Group revenue for the year.
Its portfolio of major events performed strongly, with
particularly strong performances in Finance and Life Sciences.
Just over 40% of the Division’s revenue comes from attendees
to events, with sponsorship revenues advancing to 28% in 2018.
Our Knowledge & Networking Division aims to provide content
that you cannot Google; major annual events that are continually
developed and become the must-attend functions for their
markets. Delegates achieve a return on their investment in time
and cost, and the experience is complemented by year-round
branded digital engagement platforms.
Opportunities for growth and development
Enhancing the event experience: To maintain and deepen
customer engagement, many events are treated as a relaunch
in terms of applying fresh thinking, finding unique content,
and developing new features and technologies to maintain
and enhance the experience for customers.
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Divisional Review Knowledge & Networking continued
One example is our AfricaCom event, which brings Africa’s
telecoms and technology community together to network and
gain knowledge. At the 2018 event, we launched a 12-month
innovation competition to identify an economic, social or
environmental challenge that the event’s community could
harness telecoms and technology to solve, sustaining the
event’s momentum and creating a natural pathway towards
next year’s AfricaCom.
Another example is in our Life Sciences portfolio, where we have
invested in a more responsive partnering platform that helps
delegates and companies better target their time and meetings
at our events, improving their experience and supporting strong
return rates at our events.
Deepening digital engagement: The Division’s digital content
platforms and marketing services create year-round engagement
with brands, where prequel and sequel activities based on news,
opinion, research, customised video and webinars create digital
communities that keep customers informed and create sales
opportunities for sponsors.
One recent example is the relaunch of our Banking Technology
content brand under a new name – FinTech Futures – on a new
digital platform, with improved user experience especially when
browsing on mobile and more focus on making content search
engine optimised. Monthly page views have risen by 400%
year-on-year, with the increased audience driving more
opportunities for advertising and marketing services sales.
Informa Connect in 2019
Informa Connect’s portfolio of brands and events is developing
under the AIP and going into 2019.
As part of the combination with UBM, Informa Connect has
added several of UBM’s content-focused brands, including
Catersource, which focuses on the specialist catering and event
professional market, and the CBI Life Sciences business that
complements our existing Life Sciences events.
One of our content-focused events that previously sat within the
exhibitions business, the sustainable building event Greenbuild,
is moving into this Division, to benefit from its focus on driving
community engagement in live forums and online.
The Division’s TMT portfolio has moved to become part of the
Group’s new Informa Tech Division.
Under GAP, the Division’s portfolio was streamlined to focus on
its major brands, with new investments in upgrading marketing
technology, improving customer engagement and building out
the Division’s year-round digital capabilities. Informa Connect’s
target for 2019 is to further improve underlying revenue growth
by building on the customer benefits of this work and strength
of its brands.
“ Delegates expect a
quantifiable return
on their investment in
time and cost, and it’s
our role to deliver it.
We apply fresh thinking
and new technologies
to enhance both our
live event experiences
and our specialist
digital communities.”
Andrew Mullins
Informa Connect CEO
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INFORMA PLC ANNUAL REPORT 2018 Spotlight
Where the world’s
investors invest
their time
Every specialist professional community has one: an event
in the year whose place in the diary is a given. If you’re in
private equity or venture capital, that event is SuperReturn.
Now over 20 years old, the flagship SuperReturn
International is the product of a continuous programme
of product development, and a case example of listening
to, and understanding, your audience.
It has also grown into something of a world tour. SuperReturn
is now 16 events, running throughout the year across the US,
Germany, China, the UK, the Netherlands, Hong Kong, Dubai,
South Africa and Japan.
Dorothy Kelso, Global Head of SuperReturn, commented:
“Over 2,500 investment professionals converge on Berlin for
SuperReturn International, with many travelling from all over
the world to be part of it, in addition to the SuperReturn event
in their own country.
“This is anything but a passive conference. As well as hearing
world-class industry speakers, everything is designed around
an audience-first approach. It’s about a blended and bespoke
networking opportunity, and we do everything we can
to help everyone access the specific content and people
they’re looking for.”
A dedicated event app shows who is there, facilitates approaches
and schedules meetings. There are VIP breakfasts, and social
drinks and dinners; pre-arranged one-to-one introductions;
private meeting rooms for negotiation and deals; closed-door
sessions for full and frank discourse under the Chatham
House Rule; pre-conference summits on special areas of focus;
sponsorship and branding opportunities; and “speed dating”
investor pitches.
“The attendees can pick and choose from this menu of
additional services, selecting what’s most valuable to them
and tailoring their spend accordingly,” said Dorothy Kelso.
SuperReturn also goes on to deliver value throughout the year.
The live events are supported by continuous digital engagement
that keeps the conversation going, with a stream of high quality
content, analysis, thought leadership, a quarterly emagazine,
webinars and SuperReturn TV.
Julian Kirby, Managing Director for Informa Connect’s Global
Finance business, said: “There are many growth opportunities in
events if you deliver on the new demands of customers: a large
audience of genuine industry rainmakers; original content you
can’t find online; and outcome-oriented curated networking
between market buyers and sellers. Our SuperReturn range
ticks all the boxes.”
Super Return International
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Divisional Review Global Support
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INFORMA PLC ANNUAL REPORT 2018 Divisional Review
Global Support
The team
behind the teams
How we serve customers
Within each Informa Operating Division, our teams focus on
responding to the needs of customers, developing our brands
and products, looking for new opportunities in our markets
and delivering consistent performance.
Global Support provides shared, efficient business services
and function-specific expertise to each Informa Operating
Division, enabling our commercial teams to keep their focus
on customers, products, markets and performance. These
include maintaining core technology infrastructure, consistent
HR processes and policies and shared finance platforms,
providing a centre of expertise in areas such as Legal and
supporting Informa’s corporate operations.
In 2018, this Global Support community comprised around
850 colleagues working from three regional hubs: London
and Colchester in the UK, Sarasota in the US and Singapore.
Developments in 2018
Supporting the offer for UBM: Teams including Corporate
Development, Group Finance, HR, Investor Relations and
Communications, Legal and Treasury were involved with
supporting the UBM offer process and putting in place the
plans and structures necessary for delivering the successful
combination. Activity included ensuring Shareholders and
colleagues were appropriately informed and engaged, regulatory
requirements were followed and the financing structures
necessary for completing the transaction were in place.
Combination governance: An Integration Management
Office (IMO) was formed to oversee the AIP’s implementation,
comprising members of the Corporate Development, Finance
and Risk teams and senior representatives from several other
Global Support functions, supported by external consultants.
The IMO governed the process by which decisions were made,
assessing integration plans and measuring progress, tracking
integration expenditure and the delivery of cost synergies and
providing regular reports to the Executive Management Team
and the Board.
Service improvements: In January 2018, a single payroll system
and a common approach to timekeeping and salary payments for
all our businesses in the US were successfully introduced. This
consolidated and simplified systems inherited from business
additions, improving efficiency within HR service support.
Within Finance, 2018 saw the phased introduction of an upgraded
Group-wide SAP enterprise resource platform to consolidate
and standardise our financial operations globally and replace
out-of-date systems. During the year, the focus shifted to
improving the platform’s stability, embedding new practices
and ways of working and identifying areas of improvement.
Providing compliance leadership: With new requirements
on handling personal data coming into effect under the General
Data Protection Regulation, the Global Support team created
online training to create widespread awareness of the importance
of data privacy. This mandatory online training was tailored
by job type to ensure those who might directly handle data
received specific guidance, such as in HR and Marketing. Each
Division’s customer privacy policy was also reviewed ahead of
May 2018, with a focus on providing a clear explanation of how
we use data and how we manage any information requests.
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Divisional Review Global Support continued
Global Support in 2019
Global Support’s structure is evolving in 2019 to ensure it
continues to have the capabilities and capacity to support the
enlarged Group, and so that Informa can pursue the benefits
of scale in areas such as finance services.
It will now be organised into three areas: Group Functions,
Group Operations and Cross Divisional Operations. Group
Operations is being led by Patrick Martell in the newly created
role of Group Chief Operating Officer. Patrick and the Group
Operations leadership team have end-to-end responsibility for
delivering common operational services effectively, including
shared finance services, technology, procurement, property,
travel and health, safety and security.
In Group Functions, UBM’s in-house Internal Audit function has
been brought into Informa and expanded to cover the combined
Group. KPMG, which previously acted as Informa’s outsourced
Internal Audit provider, will supplement the in-house team in
a co-source Internal Audit arrangement.
Group HR has been expanded to add expertise in areas such
as rewards, benefits, and learning and development, and a new
role of Group Director of HR created to provide Company-wide
leadership on matters including the support and opportunities
available to colleagues, and the quality and effectiveness of
policies, practices and processes in place internationally.
Cross Divisional Operations represents a new operating approach
for Informa and reflects the scale and efficiency benefits possible
within a larger Group. This sees certain services that were
previously managed within Business Intelligence and
Knowledge & Networking separately, including central
marketing, HR, divisional finance and communications, being
delivered centrally and in a more common way across those
Divisions and the Informa Tech Division.
A structured
approach
to sustainability
Our
environment
Our
customers
Our
content
Our
communities
Our
colleagues
58
The Group Sustainability team provides leadership and
subject matter expertise on sustainability and responsible
business practice to all areas of Informa. It reports to the
Director of Investor Relations to ensure business alignment
and representation of sustainability at an Executive
Management Team level.
The team takes a structured approach to sustainability,
focusing its efforts on the five areas we believe are most
relevant to the Group and where our impact is greatest: the
responsibility and wider impact of the content we produce,
our relationships with customer communities, how we work
with local communities, the way colleagues are supported,
and the business’s use of natural resources and impact on
the environment.
2019 will see the introduction of a new Informa Sustainable
Event Management System, building on the Group’s previous
Sustainable Events Ladder and UBM’s 10 Sustainability
Principles, which will set out minimum sustainability standards
for our events and include a self-assessment toolkit for show
teams to deploy wherever they are.
We became part of the global Science Based Targets Initiative
in 2018, and in 2019 will be setting Company-specific targets
around reducing our emissions to help keep global temperature
rises below 1.5C.
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Continuous
improvement in health,
safety and security
The Group Health, Safety and Security (HSS) team acts as
a second line function, providing expert guidance, support
and advice to the Operating Divisions, putting in place
Company-wide systems and governance, and empowering
colleagues to make risk-aware decisions. In 2018 the team
focused on improving the processes and systems for managing
HSS risk while assessing the most appropriate structures and
approach for the enlarged Group.
During 2018, the Group HSS team continued to engage
with operations teams throughout the business, providing
recommendations and ensuring common minimum standards
are adhered to. This included delivering well-received training
to key event partners in Egypt (see page 34). In the second
half of the year, the team visited UBM businesses across the
world and attended team get-togethers in the US and several
parts of Asia to understand current practice and start to build
consistency and continuous improvement in Group reporting.
New HSS learning activities will be rolled out across Informa
in 2019, including business travel. It is common for colleagues
within the Group to travel for work, particularly in our events
Divisions, and this is designed to provide more guidance on
personal safety, appropriate behaviour and managing risk
when working outside a normal place of work.
The depth and regularity of HSS reporting to the Executive
Management Team and divisional management teams has
been increased, and the Group HSS team continues to report
to the Board through the Risk Committee.
Spotlight
Meet the COO:
Patrick Martell
How would you describe the new role of Group Chief
Operating Officer?
Informa has changed significantly over the past five years.
We are larger in exhibitions, more digital in our research and
content product mix, working in more geographic markets
and with more colleagues.
Under GAP, we added businesses in some areas and divested
others. All of this has created an operational architecture
that is quite complex in places. Looking through the lens of
Informa’s reach today, it is clear that by making considered
decisions about the systems and processes we use, there
is an opportunity to simplify the landscape and apply what
is working well at a larger scale.
That is the reason the COO role has been created: it is the right
time to start to optimise our common systems and architecture
and create efficiencies from doing so.
What is the opportunity in Global Support?
What I know from my time in Business Intelligence is how
dynamic Informa is. The business moves fast; we are agile
and customer focused and like to get things done. I think
that is true of each Operating Division even if the products
and the customers are different.
Take our events. We operate hundreds of exhibitions every year,
and for many of the largest ones, that means creating a mini city
from scratch over a matter of days. Anyone visiting a site during
its build stage could not fail to be struck by the scale of the task
and the deadlines the business works to.
The opportunity is to enable our commercial businesses to do
their work seamlessly and effectively, help them to meet their
deadlines and their customers’ needs, and not to get in the way.
What is your immediate focus?
Consistent, effective and high quality operations are where
it all comes together. It is about continuing to serve our
businesses while simplifying and improving our systems
in flight, with our shared finance platforms an early area of
focus. It is also about ways of working and the colleagues who
deliver these support services, making sure Global Support is
a supportive and enjoyable place to work while our approach
to supporting the wider Group evolves.
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Key performance indicators
Measuring performance and growth
Informa’s Directors and management team use a number of financial and non-financial measures to track the Group’s performance
and the delivery of strategy. Some of these are alternative performance measures, chosen because we believe they are the most
useful and appropriate explanations of the Group’s business performance. Each Informa Division additionally tracks a range of
other metrics that are relevant to its business model, such as subscription renewal rates, rebooking rates and customer satisfaction.
See more on Group strategy (page 10) and How Informa operates (page 20)
Group non-financial KPIs
Use of natural resources: Greenhouse gas emissions
2018
tonnes
CO2e2
1,630
2017
tonnes
CO2e
1,333
789
612
1,414
1,672
2016
tonnes
CO2e
1,136
520
62
2015
tonnes
CO2e
1,287
534
62
8,689
7,181
6,268
7,373
Scope 1 (Gas and
heating fuels)
Scope 1
(Refrigerant gases)
Scope 1 (Vehicle and
generator fuels)
Scope 2 (Electricity
and steam)
Total Scope 1 and 2
12,522
10,798
7,986
9,256
Scope 1 and 2
intensity
1.281
1.43
1.25
1.41
1. Data for intensity for 2018 is based on carbon emissions for the full year, for both
businesses, divided by the average headcount. This provides comparability in intensity.
2. Carbon emissions for 2018 show UBM data from date of acquisition with the
exception of the intensity metric.
About: Greenhouse gas
emission levels are one of several
commonly accepted measures
of a business’s carbon footprint
and the extent to which it relies
on natural resources, and we
recognise the importance of
understanding and controlling
our contribution to climate
change. Our calculations follow
GHG Protocol standards and
Defra guidelines.
Performance: Absolute emissions
have risen due to the expansion
of the Group. One of our yachting
exhibitions teams significantly
reduced its use of generator fuel
usage, which is a large component
of the total.
Target: By 2020, we aim to cut
our carbon footprint by 10%
per colleague against our 2017
baseline by identifying new
energy efficiency and renewable
opportunities, and for at least five
top 10 offices to have invested in
energy efficiency.
Business sustainability:
Dow Jones Sustainability Index
96th/68
2018 percentile/
absolute score
88th/61
2017 percentile/
absolute score
Colleague support
and participation:
Engagement Index
80%
January 2019
78%
December 2017
60
Definition: The DJSI ranks
listed companies on their
achievements in 22 economic,
social and environmental areas
relevant to long-term corporate
performance. For Informa, it is
one indicator of the business’s
operational performance and our
capabilities to grow and succeed
in the long term.
Performance: Informa ranked
in the top 10% of participating
companies in 2018 and in doing
so joined the DJSI World Index two
years ahead of target. The Group’s
absolute score improved by seven
points. Due to a methodology
change that affected all participating
companies, our 2017 score was
recalibrated to 61 from 67, with
our percentile ranking remaining
the same.
Target: To maintain and improve
our absolute score, through
progressively enhancing our
practices and performance in
areas such as health and safety,
customer engagement and
supply chain management.
Definition: Informa relies on the
skills, contribution and motivation
of colleagues for business
performance, and engagement
indices provide one measure of
this. Colleagues are invited to
participate in the confidential
Inside Informa questionnaire. The
index is calculated by averaging
responses to five questions,
including how strongly colleagues
believe in the goals of the business
and how far they recommend the
business as a good place to work.
Performance: 67% of
colleagues participated in the
January 2019 Inside Informa
Pulse, with engagement levels
rising by 2% following a period
of organisational change.
Target: To maintain Inside
Informa participation rates at
over 50% and maintain a strong
overall score, through measures
that ensure Informa remains a
good place to work, and that all
colleagues are able to perform
at their best.
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INFORMA PLC ANNUAL REPORT 2018 Group financial KPIs
Underlying revenue growth
(%)
2014
2015
2016
2017
2018
Free cash flow (£m)
2014
2015
2016
2017
2018
0.7
1.0
1.6
3.4
3.7
237.2
303.4
305.7
400.9
503.2
Definition: Measures underlying
financial performance and growth
of the business. This measure
includes year-on-year growth
of acquisitions from the day of
completion, as if they had been
owned in that period the year
before, and excludes the impact
of event phasing, disposals and
currency movements.
Performance: Fifth consecutive
year of improvement in the
Group’s growth rate.
Target: Consistent business
and revenue growth.
Adjusted diluted earnings
per share (p)
2014
2015
2016
2017
2018
* Restated for the impact
of IFRS 15.
Gearing ratio
2014
2015
2016
2017
2018
Definition: An indicator of
operational efficiency and
financial discipline, illustrating
the capacity to reinvest, fund
future dividends and pay down
debt. It is measured as cash flow
generated by the business before
cash flows relating to acquisitions,
disposals and related costs,
dividends and new equity
issuance or share purchases.
Performance: 2018 was another
year of strong cash generation,
reflecting higher underlying
profit, the contribution from
UBM and strong conversion
of profits into cash.
Target: Consistent growth
in free cash flow.
37.8
39.5
42.1
46.0*
49.2
2.2
2.2
2.6
2.5
2.9
Definition: One measure
of profitability and the value
created for Shareholders,
adjusted for equity issuance.
It is one of the measures
tracked within the Group’s
executive remuneration plans.
Performance: The 7.0% increase
on 2017 reflects another year
of improving performance, as
well as the combination with
UBM. This led to an increase
in the Group’s adjusted earnings
and the number of shares in issue,
following the issue of equity to
UBM Shareholders at the time
of the acquisition.
Target: Steady and consistent
improvement in earnings
per share.
Definition: Indicates the Group’s
leverage level and is a measure of
financial stability and discipline.
It is a calculation of earnings
before interest, tax, depreciation
and amortisation compared
with net debt.
Performance: Our long-term
target leverage is 2.0–2.5 times,
and the Directors are comfortable
with an increase to 2.9 times in
the short term to fund significant
acquisitions. As a result of the
combination with UBM, gearing
is currently at the upper end
of the range, with a target to
return to within our target
range through 2019.
Target: Return to target range
of 2.0–2.5 times, to maintain
financial stability and flexibility.
Adjusted operating profit (£m)
2014
2015
2016
2017
2018
334.0
365.6
415.6
544.9*
732.1
* Restated for the impact
of IFRS 15.
Definition: An alternative
measure of the Group’s operating
performance, representing profit
before tax, interest and adjusting
items in a way that is comparable
to prior year and Informa’s peers.
Performance: Strong growth in
adjusted operating profit reflects
improved underlying profits
combined with the contribution
from UBM.
Target: Consistent growth in
underlying operating profits.
Dividend per share (p)
2014
2015
2016
2017
2018
17.80
18.50
19.30
20.45
21.90
Definition: A measure of the
value created for Shareholders
through business performance
and growth.
Performance: Improving
underlying growth, resilient
margins and strong cash flow
conversion led to strong free
cash flow generation, enabling
the Board to pay a progressive
dividend in 2018 up 7.1% on 2017.
Target: Progressive dividend
payments, growing broadly in
line with free cash flow.
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Strategic Report
Risk management and principal risks and uncertainties
Responsible risk-taking
for performance and growth
As a growth-focused business, Informa takes measured risks.
These range from investing in new services and technologies
to acquiring and integrating new businesses into the Group.
•
the amount of risk we are prepared to take should
be balanced with proportionate reward; and
• our guiding principles determine our approach to risk
To enable the Group to pursue commercial opportunities,
Informa’s approach to risk management is to ensure that
significant risks are identified and understood, managed
appropriately, and monitored and reported to the Company’s
governance bodies.
Our risk management approach is guided by the Board’s Risk
Appetite and Tolerance Statement, which gives the direction that:
• we should only take risks that help us to achieve our objectives;
tolerance, for example in areas of ethics and compliance.
The Board encourages a culture of transparency and of acting
with integrity.
Risk governance
Informa’s risk framework is designed to provide the Board with
oversight of the most significant risks faced by the Group. The
Risk Committee and Audit Committee report independently to
the Board, as do steering committees for major projects.
Risk management governance framework
Governance
Risk governance function
Outputs
Board oversight
• Sets tone from the top
• Positions risk appetite and tolerance
• Challenges lines of defence
• Accounts to Shareholders
Guidance and direction
Audit Committee
3rd line of defence
•
Independently checks and challenges
1st and 2nd lines of defence
• Provides assurance to the Board
Audit and
Board reports
Risk Committee
2nd line of defence
•
Provides advice and guidance to the
1st and 2nd lines of defence
• Advises the Divisions and Board
• Accounts to Audit Committee
Group risk register
Principal risks
Audit and Board reports
Divisions
1st line of defence
•
Identifies and manages risks
• Receives guidance
• Reports to Risk Committee
Divisional risk registers
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INFORMA PLC ANNUAL REPORT 2018 Key 2018 activity
Market risk
• Global trading may affect attendance at our exhibitions
Health and safety incident
• Significant discovery process to ensure that our health
in certain sectors. We continue to monitor developments,
but currently see only minimal financial impacts.
and safety management system encompasses all activities
across the enlarged Group.
• Through the combination with UBM, the Group organises
exhibitions for the Fashion sector. This market is seeing
considerable change which presents both challenges
and opportunities and we are refreshing our offering,
with greater focus on how best to serve customers.
Acquisition and integration risk
• Substantial due diligence and analysis on business
additions including UBM, and rigorous management
and control of integration risk throughout 2018.
Ineffective change management
• As per page 57, we focused on combining talent, services
and products while delivering business as usual across
both companies.
Technology failure, data loss and cyber breach
• Considerable focus on understanding the enlarged
Group’s technology architecture.
• A technology vulnerability assessment was developed,
which supports risk-informed decision making for
remediation of systems and platforms.
• Privacy at work training was delivered across the Group
to inform colleagues on protection of systems and data.
Through the governance channels and reporting process
illustrated opposite, the Board monitors and reviews the
effectiveness of the Group’s internal control systems
and issues guidance for the management of risk.
During 2018, the Group continued to foster a culture and process
for responsible risk-taking. We maintained continuous improvement
in risk management rigour, including developing statements of
risk appetite and tolerance for each principal risk and enhancing
monitoring and reporting through key risk indicators. This work
will continue in 2019 and it, along with the Group’s risk framework,
will be aligned to Informa’s expanded operating model.
The methodology for rating the magnitude of the financial
impacts of our risks was reviewed during the year and adjusted
to reflect the increased financial scale of the enlarged Group.
• Consistent reporting metrics embedded across all regions.
• New security risk assessments and management guidance
was rolled out and new travel security training delivered
to operations teams.
In addition to internal training, the Health, Safety and
Security team is exploring how we can work with other
business partners to raise standards. Examples included
providing training to our venue provider and contractors
in Egypt. See page 59 for further information.
•
Major incident
•
Impacts from severe weather events, including typhoons
in Asia and hurricanes and wildfires in the US, were
managed in line with regional authority advice and
specialist advice from our Health, Safety and Security
team. Customers, colleagues and business partners
were kept safe and financial impacts were negligible.
• Emergency response training rolled out to events teams
and at our premises.
Inadequate regulatory compliance
• New training on anti-bribery and corruption to new joiners.
• Training on new tax evasion law delivered to around 1,000
targeted colleagues.
• Management training given to colleagues who deal with
regulatory breaches.
Privacy regulation risk
• New data protection policies and guidance rolled out
across the Group.
Risk management and the combination
Ineffective change risk is a principal risk to the Group as we
continue to expand, grow and change. In this reporting year, the
most significant change was the combination with UBM plc. Risk
management was applied throughout, and prior to recommending
the acquisition to Shareholders, the due diligence process
identified the potential risks of the deal. These were highlighted
in the Shareholder prospectus and included:
• The management attention required to integrate the
widened operations may detract from delivery of existing
business objectives:
– Delivery of commercial business as usual objectives
was addressed by providing risk management training
to the Global Exhibitions Senior Management team.
The team learned and applied risk management
practices to understand how the causes and impacts
of risks to commercial objectives should be mitigated.
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Strategic Report
Risk management and principal risks and uncertainties continued
– Additional resource was brought in for critical roles
so that ongoing operations and the combination could
be delivered simultaneously.
•
Increased exposure to developing markets:
– The expansion of the Informa Group brings greater
breadth to the business, increasing our exposure to both
developing and developed markets. Our increased scale
in developing markets is within our risk appetite as there
are growth and opportunity in these markets, which are
balanced by our business in developed markets. Market
risk is managed through our strategy, objectives and
regular planning meetings between the Executive
Management Team and the Divisions.
• Loss of Senior Management without adequate replacement:
– Changes to the Group’s organisational structure were
subject to multiple levels of review, and senior appointments
were approved by the combination steering committee.
A formal selection process ensured that Senior Management
roles and responsibilities were thoroughly planned for, and
appropriate skills are present in the enlarged Company.
Throughout the combination, each significant area of change
has had a designated lead responsible for change delivery. These
leads report to the Integration Management Office (IMO), led by
our Group COO and Director of Strategy and Business Planning.
Critical issues, risks and dependencies are surfaced to the IMO
and actions are owned and followed up until they are mitigated.
Further governance for the combination has been provided
through a dedicated steering committee, chaired by the
Group COO who reports directly to the Board. External
consultants were engaged during the process to support
due diligence, discovery and integration.
The discovery period was focused on building our understanding of
the enlarged business. This included consideration of risks within
the business itself and risks arising from the combination work.
Throughout the combination, colleague sentiment was also
closely monitored. A Pulse survey in January 2019 gauged our
colleagues’ feelings about the enlarged Group, which showed
that over 75% of colleagues would recommend Informa as a
good place to work.
As part of the combination, UBM’s risks were reviewed and
discussed by Senior Management from both companies and
the most significant risks were mapped and compared. The
Risk Committee is satisfied that all principal risks relating
to the combined Group are now captured through Informa’s
risk framework.
Principal risks and uncertainties
• Risks are identified and reported by the Divisions to the
Risk Committee.
• We record the most important and frequent risks reported
by the Divisions on the Group risk register.
• We also consider emerging risks at divisional and Group
levels throughout the year.
• We additionally recognise risks that only apply at Group level.
• The most significant of the Group-wide risks form our
principal risks.
• All principal risks are considered when we draw up severe
but plausible scenarios that could impact the financial
viability of the Company. The methods and results of our
viability modelling are on page 75.
There is a formal quarterly process to support risk recognition
throughout the Group. We have a consistent way of categorising
our risks and a common approach to risk management Information
on the causes, impacts and mitigation of risks is captured
through our risk registers and risk management system. Actions
are assigned and logged by the Divisions, and then monitored
by the Risk Committee until closed out. This gives us confidence
that we have sufficient knowledge of relevant risks and a robust
assessment of our principal risks.
Risk ratings
When we rate our risks, we consider the potential financial and
non-financial impacts they could have, and the likelihood of
them happening. We use a consistent grid to help us compare
and prioritise risks. We rate our risks twice:
• The first rating (gross risk rating) is based on the potential
exposure if nothing is done to manage or mitigate the risk,
to understand the importance of the risk and form a baseline.
• The second rating considers all the controls and mitigations
currently in place to either reduce the likelihood of the risk
occurring, or to address the impact, or both. This indicates
the current status (net risk rating).
This approach allows us to consider whether risks are being
managed appropriately or whether additional actions should
be taken, according to our risk tolerance.
We review risk ratings regularly to consider whether the external
or internal landscapes have changed, or whether the controls in
place are managing the risks to the previously recorded status.
Relative net risk ratings of principal risks,
and movement in risk ratings over 2018
Our principal risks relate directly to the delivery of our growth
strategy, including the people, culture and operations that
deliver it.
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INFORMA PLC ANNUAL REPORT 2018 Relative risk ratings of principal
risks and movement in net risk
ratings over 2018
7
2
6
8
1
4
11
5
12
3
9
10
d
o
o
h
i
l
e
k
L
i
Key
Risk related to growth
Risk related to people
Risk related to culture
Indicators of change
in the year
Increased during the year
Impact
Risks related to growth
1. Economic instability
2. Market risk
3. Acquisition and integration risk
4.
Ineffective change management
5. Reliance on key counterparties
6. Technology failure
7. Data loss and cyber breach
Inability to attract and retain key talent
Risks related to people
8.
9. Health and safety incident
10. Major incident
Risks related to culture
11. Inadequate regulatory compliance
12. Privacy regulation risk
An addition to the Group risk register was realisation
of a pensions deficit position, relating to UBM’s legacy
defined benefit pension scheme. The current position is
not significant to the combined Group and is therefore
not reported as a principal risk.
The risk rating for Brexit was raised during the year as the
deadline for the UK’s departure approached without clarity
of outcome. Based on a risk assessment of the most impactful,
no deal scenario, Brexit is not a principal risk to the Group.
The potential financial impacts are considered immaterial
due to the diversified international nature of our business
and a low reliance on cross EU/UK border goods movements
to deliver our services and products.
Risk assessments have taken place across the Group at
divisional and functional levels, informing more detailed
contingency planning. Where Brexit risks exist, we have put
actions in place to minimise interruptions to our business,
including areas such as the physical supply of our books to
customers in the EU, and planning for logistical and travel
challenges for events close to the proposed exit day.
Changes during the year
Where changes have occurred to the net mitigated risk ratings
of principal risks, during 2018, these are explained on pages 66
to 72 under the relevant risk.
Consideration of other risks
Informa keeps a range of risks under review. Amongst those
not considered principal risks to the Group are tax compliance
risk, climate change and currency fluctuation.
In 2018, we recognised that the threat of geopolitical risk
raised the potential for increased economic instability.
The net rating at the end of the year was unchanged, as
no material impacts or any increased likelihood existed.
This will remain under close monitoring.
We considered whether the net ratings for acquisition and
integration risk and ineffective change management should
be raised but believe that our management of these risks
and continuous scrutiny have kept the net ratings stable.
The net risk of health and safety incidents has been
raised to acknowledge that we are currently embedding
a consistent process across the enlarged Group. See page 71
for further information.
Informa is a responsible taxpayer. The Group takes a principled
and low risk approach which limits the likelihood of disputes
with tax authorities and makes unexpected material tax
liabilities unlikely.
Climate change is not viewed as a principal risk for the Group,
although severe weather events are recognised as one factor
in the risk of major incident on page 71.
Informa’s impact on the environment is relatively small and
largely related to routine energy consumption at our premises,
the use of paper in products in the supply chain, and business
travel by colleagues and customers to Informa’s exhibitions and
events. Informa seeks to minimise impacts through initiatives
detailed in the separate Sustainability Report.
We have also raised the rating of inability to attract and retain
key talent, recognising that when two companies of scale
combine, there is a heightened risk of voluntary departures.
The Group Treasury team continues to manage the risk of
currency fluctuation, particularly in the relative value of sterling
and the US dollar.
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Strategic Report
Risk management and principal risks and uncertainties continued
1. Economic instability
• 2018: no movement in net risk rating
• Has the potential to cause material financial impact
•
• Oversight: Group Finance Director
Is modelled for the Viability Statement
Impact
A negative impact on the Group’s ability to grow, whether in
particular geographies, verticals or overall.
Potential to weaken brands and value over time, leading to
reputational damage and impairing ability to raise funding.
Fluctuations in currency exchange rates can have both negative
and positive effects.
Relevance to Informa
When economies decline, our customers may retract
their budgets and choose not to exhibit or travel.
Changing patterns in global trading may impact specific
sectors and affect demand for related industry exhibitions
and conferences.
A global economic downturn could affect the Group’s ability
to deliver growth in the near term. However, it could also
present an opportunity to acquire businesses at a lower
cost and lay the foundation for long-term growth.
Mitigating activities
Informa has an international customer base, selling into around 170 countries, which dilutes the effect of downturns in specific
geographies. We provide the world’s leading exhibitions for certain industry sectors which drive our customers’ order books,
so even in economic downturns, attendance remains relatively stable. The breadth of the Group’s portfolio by verticals, products
and customer types also mitigates the impact of downturns in particular markets.
Many of our content and data products are subscription-based, making revenue more predictable. Exhibition revenue is often
contracted well in advance of the event. Credit exposure is minimised through advance payments, particularly for exhibition
stands, and through credit control activities.
Economic risk and opportunity are considered in the three-year planning process overseen by the Group Finance Director.
The annual budgets that result from the planning process are a control, against which results are monitored through the
monthly reporting process. This surfaces any effects of economic instability and informs commercial decision making.
Movements in currency can have positive and negative impacts on the Group’s reported earnings. This is managed through
hedging currency fluctuations so that our net debt profile is proportionate to our exposure to currency fluctuations in EBITDA.
Geopolitical volatility increases the likelihood of economic instability; however, our overall net rating remained stable at the
end of 2018.
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INFORMA PLC ANNUAL REPORT 2018 2. Market risk
• 2018: no movement in net risk rating
• Has the potential to cause material financial impact
•
Is modelled for the Viability Statement
• Oversight: Executive Management Team
Impact
If market risk is not addressed through strategy, investment,
development and innovation, products and services could be
perceived as less valuable, with revenues and margins eroded
and some products or services becoming obsolete.
Relevance to Informa
The markets which we serve experience growth and
decline, and, in some sectors, disruption. We may not be
able to innovate at a pace that ensures that our products,
services and brands remain relevant or we may lose custom
to our competitors.
Markets can be disrupted, for example fashion producers
selling directly to purchasers online.
Group strategy is informed by customer demand and
feedback. Wider market, strategic and investment decisions
are made with due consideration of market risk.
Mitigating activities
Market developments are thoroughly considered in decision making. They are addressed at strategic levels and through market
research into businesses and products operating in similar spaces. Acquisitions are considered for their portfolio fit for the
markets we serve.
The enlarged Group now operates in the Fashion & Jewellery sector and has a larger exposure to emerging markets. Fashion is
undergoing transformation as a sector, and we have launched the Fashion GAP programme to determine how we can enhance
our products and customer experience, and drive the ongoing relevance of our portfolio. The Executive Management Team
oversees market risk by conducting regular people, planning and product-focused meetings with each Division, typically on
a quarterly basis.
Market risk is also regularly addressed by the Board and addressed as part of Informa’s three-year planning cycle, with these
plans formally presented to the Board.
3. Acquisition and integration risk
• 2018: no movement in net risk rating
• Has the potential to cause material financial impact
• Not modelled for the Viability Statement
• Oversight: Board
Impact
Acquisitions could deliver lower than expected return on
investment, diminished growth, weaker acquired brand
assets, increased risk and inconsistent corporate culture.
Poor acquisitions may also lead to impairment charges
and the inability to obtain future funding.
Relevance to Informa
Growth through targeted acquisition is one part of the
Group’s strategy and a way to seize opportunities that
will create benefits for our stakeholders. The most
recent scale addition was UBM in June 2018.
As well as organic growth, Informa’s growth strategy
includes the acquisition of businesses in target verticals
and markets. The Group is prepared to take reasonable
risks to acquire new assets, talent, capabilities, products,
brands and innovations.
Mitigating activities
Informa actively monitors the market and engages with relevant parties to identify suitable acquisition targets. These are then
assessed to see if they form an attractive strategic and cultural fit. Investment decisions are made according to set financial
parameters and capital is allocated to the markets and Divisions in order to maximise long-term value creation. This process
is led by the Director of Strategy and Business Planning.
Capital allocation for acquisitions is determined at Group level. Targets are analysed by the Corporate Development team,
and a cross functional team of experts supports the commercial leads through due diligence prior to acquisition.
Integration plans are developed at Division level with support and oversight from the Group. All acquisitions have formal
governance, leadership and project management to deliver integration, with significant acquisitions receiving greater Group-
level governance. In the case of UBM, additional resources were brought in to support delivering business as usual while key
colleagues focused on the integration.
An annual review is reported to the Board on post-acquisition performance, including an assessment of any variation to the
expected return on investment. Progress on all acquisitions is also reported to the Board regularly throughout the year, with
commensurately more detail for significant acquisitions.
See the section on risk management and the combination on page 63 for more information on Informa and UBM.
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Strategic Report
Risk management and principal risks and uncertainties continued
4. Ineffective change management
• 2018: no movement in net risk rating
• The potential to cause material financial impact is considered low
• Not modelled for the Viability Statement
• Oversight: Executive Management Team
Impact
Change, if not managed effectively, could result in unrealised
opportunities, poor project delivery, colleague turnover, erosion
of value and failure to deliver growth.
Relevance to Informa
Culturally, Informa adopts an agile business approach
and pursues development and change in order to grow,
innovate and respond to new challenges and opportunities.
The breadth and pace of change can present strategic and
operational hurdles.
Bringing together new and different business cultures also
presents risk.
Growth requires change, and ineffective change management
may produce a lag on growth. Acquisitions may introduce
cultures that are not aligned with Informa’s culture of support
and inclusion. This could result in behaviours that undermine
and degrade performance and strategic direction.
Mitigating activities
Informa’s large-scale investment programmes and acquisitions adopt common programme and change management disciplines,
with defined governance and reporting structures in place.
The Executive Management Team oversees, and independently or collectively sponsors, key investment initiatives across Informa.
A team of programme directors and change delivery experts is deployed on core strategic projects. The stability in key
leadership roles allows a culture of continuous learning and improvement.
Where appropriate, we adapt reward structures to incentivise successful delivery of in-year or multi-year strategic programmes.
The Risk Committee acts as the overseer of the risk landscape with the authority to map risk profiles of large change initiatives,
and raise attention to areas of concern.
5. Reliance on key counterparties
• 2018: no movement in net risk rating
• The potential to cause material financial impact is considered low
• Not modelled for the Viability Statement
• Oversight: Risk Committee
Impact
If key counterparties fail, there could be serious disruption to
certain business activities, resulting in lower levels of trading
and revenues, and a decline in customer satisfaction.
Relevance to Informa
In certain conditions, markets and geographies, we rely
on key strategic partners who enable the delivery of our
business objectives.
Where we are dependent on key counterparties for
critical business delivery, these relationships are
identified and monitored.
Key relationships, services and venues could negatively
affect the Group’s ability to generate and deliver value,
or impact our operations if they fail.
Mitigating activities
The Group diversifies its reliance on key counterparties wherever possible and has a Treasury Policy to ensure the Company
is not over-reliant on a particular financing partner.
Each Division is required to identify key counterparties, explain the nature and extent of their exposure to them, and report
on activities in place to mitigate specific exposures to the Risk Committee when requested.
Mitigations include requiring counterparties to have robust and tested business continuity plans in place; service level agreements;
contracts; proactive relationship management; and ensuring suppliers are paid on time so that services are not suspended.
For Brexit planning, we are working with relevant business partners to ensure we can build resilience in areas where we may
be impacted. For example, we have drawn up plans with the printers of our books to ensure continuity of supply.
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INFORMA PLC ANNUAL REPORT 2018 6. Technology failure
• 2018: no movement in net risk rating
• The potential to cause material financial impact is considered low
• Not modelled for the Viability Statement
• Oversight: Risk Committee
Relevance to Informa
The Group relies on technology to make and deliver
products and services, engage with customers and pay
suppliers. This dependency is recognised in the risk of
a major technology failure.
Impact
A prolonged loss of critical systems networks or similar
services could inhibit our ability to deliver events, products
and services, increase costs, result in poor customer
experience and negatively impact the Group’s reputation.
Technology underpins all the Group’s business activity,
and enables future scale and innovation.
Mitigating activities
Informa has a Group-wide strategy to deploy cloud computing, due to its benefits in building resilience into our products
and services and in providing the foundations for scalable solutions.
To support this “Cloud First” strategy, technology service providers are assessed and selected on their capability to deliver
the required service reducing the risk of downtime. Colleagues can utilise secure cloud desktop services, facilitating mobility
and flexibility.
We continue to invest in backup and recovery technology and controls to mitigate the risk of data loss and extended
unavailability of key systems.
The Group continues to reduce complexity and on-premise physical infrastructure. The combination of Informa’s and UBM’s
systems and platforms is underway; a complex process that is prioritised and programmed through a defined roadmap,
monitored by the Combination Integration Management Office and Executive Management Team.
7. Data loss and cyber breach
• 2018: no movement in net risk rating
• The potential to cause material financial impact is considered low
• Not modelled for the Viability Statement
• Oversight: Risk Committee
Impact
Loss of sensitive data through mismanagement, theft, cyber crime
or security breaches could lead to losses for our stakeholders, and
investigations, fines and business interruption. If handled poorly,
reputational damage could also result.
Relevance to Informa
This risk encompasses major security breaches, and
any resulting loss of sensitive or valuable data, content
or intellectual property.
There could be significant reputational damage if
this risk materialises and is not handled in line with
stakeholders’ expectations.
The business and delivery of strategic objectives relies
on data. If a significant loss materialised, this would
distract from our strategic goals through excessive
demands on management time to respond to the loss.
Mitigating activities
The risk from criminal cyber activity continues to grow and attempts to attack and disrupt businesses are more common
and widespread. To address the risk to key systems we continue to invest in information security countermeasures, controls
and expertise.
A Group Chief Information Security Officer has been appointed to provide Group-wide leadership and governance, and drive
information security strategy and tactical initiatives.
Informa takes the security and privacy of Company, colleague and customer data seriously and employs a defence-in-depth
approach, comprising administrative, technical and physical controls aligned with industry good practice to protect the
confidentiality, availability and integrity of key systems.
Our information security awareness programme supports an information security culture across the Group. Internal and
external assurance programmes formally report the Group’s compliance with Informa policies, standards and controls
to the Audit Committee, Risk Committee and Executive Management Team.
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Risk management and principal risks and uncertainties continued
8. Inability to attract and retain key talent
• 2018: net risk rating increased
• The potential to cause material financial impact is considered low
• Not modelled for the Viability Statement
• Oversight: Executive Management Team
Impact
A talent shortage could lead to an increased turnover of
colleagues with an associated rise in costs; loss of knowledge;
decreased efficiency; and a demotivated workforce with the
associated lag on productivity and erosion of corporate value.
Relevance to Informa
The Company is dependent on appropriately skilled talent
to deliver its products and services. The inability to attract,
recruit and retain colleagues, and inadequate succession
planning at Senior Management levels, would erode the
Company’s performance.
Our colleagues create and deliver products and services
to our customers, and the innovation and operational
execution necessary for future growth.
Mitigating activities
During the year, the Company’s depth of talent expanded with over 3,000 colleagues joining from UBM.
Colleague engagement is evaluated at least annually, attrition is tracked through the year and leavers are surveyed to
understand root causes. These insights are drawn together to understand underlying themes and to inform corrective
action where it is necessary.
The Executive Management Team and Board review the depth of talent across Informa and the short and longer-term succession
plans for critical roles.
Informa redesigned and invested in the global HR function during 2018. Specialist roles were created with expertise in reward,
learning and development, recruitment and business partnering. The model and resource allocation placed our HR specialists
closest to our colleagues and communities. The newly created role of Group HR Director is part of the Executive Management
Team and sits on the Risk Committee.
Although attrition is inevitable, the Company seeks to protect the business through appropriate post-termination restrictions
for colleagues in business-critical roles.
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INFORMA PLC ANNUAL REPORT 2018 9. Health and safety incident
• 2018: net risk rating increased
• The potential to cause material financial impact is considered low
• Not modelled for the Viability Statement
• Oversight: Risk Committee
Impact
A major health and safety incident has the potential to cause
life-changing injuries and, at worst, fatalities. Mismanagement
of health and safety can also result in reputational damage,
investigations, fines and multiple claims for damages.
Relevance to Informa
Good standards of health, safety and security are of
primary importance.
Informa takes the welfare of its colleagues, customers
and business partners seriously and expects to operate
in safe and healthy conditions. This approach underpins
how we deliver our events, engage with venues and
manage our premises.
A serious failure in this area could undermine Informa’s
reputation as a leading and trusted business and organiser
of events.
Mitigating activities
Informa’s health and safety policies set out clear guidance on required standards across all areas of the Group.
To set the tone and direction, the Board has issued a Health and Safety Risk Appetite and Tolerance Statement, asserting that the
welfare of colleagues, customers and business partners is of primary importance and that anyone may raise health and safety
concerns without any fear of reprisal.
The Health and Safety function is focused on embedding consistent standards and approaches across the combined Group.
Quarterly reports are made to the Risk Committee, and during the year we introduced a reporting dashboard which gives the
Committee a good understanding of the status of health and safety developments and training.
Near-misses and incidents at our events and premises are reported to the Risk Committee. We audit events and premises, and
monitor required actions until they are completed.
A Group-wide travel management system allows us to book accommodation and travel that meet acceptable safety standards,
and to know where colleagues are in the event of an emergency.
We have established a skilled team of health and safety experts who are regionally based. They support our operations teams
in embedding high, consistent standards. We have raised the net risk rating to reflect that we are in the process of embedding
consistent standards across the enlarged Group.
10. Major incident
• 2018: no movement
• Has the potential to cause material financial impact
• Modelled for the Viability Statement
• Oversight: Risk Committee
Impact
Major incidents have the potential to cause harm and injury to
people, venues and premises and severely interrupt business.
If the Group’s response to a major incident is inadequate, this
could result in additional reputational damage.
Relevance to Informa
The nature of our global events businesses requires us to
organise large volumes of people all over the world, so there
is inherent potential to be impacted by major incidents.
We also operate in some countries where the infrastructure
and ability to respond to major incidents can be limited.
Mitigating activities
We consider extreme weather events in the planning of event schedules. In 2018, some events and premises were disrupted
by extreme weather. Our response is always to put the safety of people first, and this resulted in the evacuation of homes and
offices in California and a one-day closure of an event.
The Group also considers terrorism threats, proximity to likely terrorist targets, and potential unrest or protests in event planning.
We apply defined security risk assessments for high risk operations so that appropriate additional security measures can be
taken to protect customers, colleagues and business partners.
A key initiative of the Health, Safety and Security team in 2018 was to embed our emergency response planning, with training
rolled out across our combined Group for events and premises teams.
The team provides support and advice in the event of an emergency and, in severe circumstances, a dedicated Crisis Council
would convene to direct our response.
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Risk management and principal risks and uncertainties continued
11. Inadequate regulatory compliance
• 2018: no movement in net risk rating
• The potential to cause material financial impact is considered low
• Not modelled for the Viability Statement
• Oversight: Risk Committee
Impact
Failure to comply with applicable regulations could lead to fines,
imprisonment, reputational damage and the inability to trade in
certain jurisdictions.
Relevance to Informa
We have a commitment to ethical and lawful behaviour.
Where regulations are mandatory, we expect full compliance.
The Group’s licence to operate and grow is in part
determined by compliance with national and international
regulation and the support of stakeholders. This includes
customers, colleagues and Shareholders, who increasingly
favour companies that work in an ethical way.
Mitigating activities
Through the Group’s compliance programme, Informa aims to comply with all applicable regulations. The Group also supports
a culture of transparency, integrity and respect, which ensures individual behaviours align with corporate policy.
A review of UBM’s policies revealed a very similar approach, and during 2019 we will publish refreshed codes and policies
across the enlarged Group.
During 2018, we continued to deliver compliance training to new joiners during the year, including Code of Conduct and
Anti-Bribery and Corruption training. New starters receive these training modules promptly and are required to accept our
core policies, including Acceptable Use of Technology and Information Security standards.
Our compliance programme is structured to meet our obligations under material legislation and we monitor our status to
ensure continuous improvement.
Our Code of Conduct and Business Partner Code of Conduct together set out the behaviour we expect of all colleagues and
business partners. We provide speak-up facilities, including a confidential hotline, to encourage both internal and external
users to raise any concerns. Our policies make it clear that all issues reported are investigated promptly and that retaliation
for raising genuine concerns is not tolerated.
12. Privacy regulation risk
• 2018: no movement in net risk rating
• The potential to cause material financial impact is considered low
• Not modelled for the Viability Statement
• Oversight: Risk Committee
Impact
The potential impacts include changes to operations to comply
with regulations, and changes to the way the Company can
market its products, services and events. Non-compliance
can result in significant fines with associated customer
dissatisfaction and reputational damage.
Relevance to Informa
We rely on data to produce and market our products and
services. An inability to comply with the diverse tightening
and growing global privacy legislation may limit our access
to, and use of, data.
Compliance with privacy regulations will influence
marketing strategies and, therefore, the acquisition of
new customers. Over-compliance with privacy regulations,
such as applying the strictest rules globally, could result in
commercial disadvantage.
Mitigating activities
There is a global trend towards tightening privacy laws; the most significant to affect the Group was the introduction of the
General Data Protection Regulation (GDPR), which came into force in May 2018. There were also changes to data compliance
in Australia, Canada, Asia-Pacific and the US. This trend has a broad impact on the Group, from how we address privacy
compliance to how we adapt marketing strategies to ensure successful business operations under tighter regulations.
During 2018, we continued to focus on GDPR compliance, implementing a privacy framework along with policies and guidance
in key areas. This included updating terms and conditions with suppliers, web-based training to all colleagues, updated Customer
Privacy Policies on our websites and new rights management processes.
We have a Group Data Protection Officer to lead data privacy compliance, along with divisional Privacy Managers who work with
the Divisions to embed the standards into the business operations. A Data Protection Management Forum was established to
support and oversee privacy compliance initiatives. We continue to monitor external factors to provide guidance and support
to the Group and consider operational impacts.
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INFORMA PLC ANNUAL REPORT 2018 Viability Statement
Informa’s prospects
and viability
As part of the Group’s strategy of continued and consistent
growth and performance, Informa’s Directors, at all times,
maintain a sharp focus on assessing the Group’s long-term
prospects and the Company’s viability as a business on a
three-year basis.
The Directors have specifically assessed Informa’s viability
over the next three years, which they believe is an appropriate
time frame, since it is consistent with our three-year business
planning horizon and its associated three-year financial forecast,
the nature of Informa’s business and the previous time horizons
we have reported on.
Assessing Informa’s prospects
Informa operates in the market for knowledge and information
and has developed strong positions in many customer end
markets that offer the potential for long-term growth. It has many
of the elements necessary for greater future business success
– valuable brands, strong customer relationships and market
knowledge, talent and a culture of ideas with commercial focus.
The Group seeks to build on these strong foundations with
continued investment in its products and customer platforms,
alongside further expansion.
After GAP and through the combination with UBM, Informa is
seeking to benefit from having increased reach and the specialist
capabilities to capture the long-term growth potential of the
expanding market for business-to-business information services.
Informa runs a rigorous annual business planning and strategy
process, involving divisional and Group management with Board
input and oversight. This produces Group and divisional strategic
plans, which in turn generate three-year financial plans that
drive the setting of in-year budgets.
This process, and the plans that result from it are a significant
contributor to the assessment of the Group’s prospects.
Informa’s current position, Group-level strategy, business
model and the risks related to the business model are also
used in the assessment, as shown in the table on page 74.
Structured strategic and financial planning process
The Group’s prospects are assessed primarily through the
annual strategic planning process, which involves the creation
of business plans by divisional management that are then
reviewed in detail by the Group Chief Executive, Group Finance
Director and the Director of Strategy and Business Planning.
To create these plans, each Division assesses external factors,
such as peers and their activity, broad and specific risks and
market trends, and internal factors, including people, planning
and product-focused matters – that influence the business’s
approach today.
Objectives are set with consideration for what is known
about customer trends and demands, and emerging risks
and opportunities over that period, plus an analysis of what
each Division needs to do to achieve those objectives, whether
that is launching new activities, securing additional capabilities
or continuing existing programmes.
What results is a set of objectives and initiatives from which
each Division will derive a three-year financial plan including
detailed financial forecasts and a clear explanation of key
assumptions and risks. Plans are updated at key dates and
for significant events.
At its annual Board Strategy meeting, the Board reviews
and challenges these strategic and financial plans.
The latest set of three-year business plans was reviewed and
agreed by the Board in September 2018. The first year of these
plans is used to inform the 2019 budget, itself approved by the
Board in December 2018.
These detailed financial forecasts are also used as a basis for
the annual impairment review, to inform treasury funding
requirements and as an assessment of the liquidity available
for reinvestment and to return to Shareholders through
dividends. Divisional financial plans combine to produce the
Group’s overall financial forecast, where it is assumed that
dividends grow by at least 6% in line with Informa’s most
recently stated commitment.
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Strategic Report
Viability Statement continued
Factors in assessing long-term prospects
Group’s current position
Strategy and business model
Principal risks
• Recurring revenue streams with
strong cash dynamics, including
positive working capital driving
high cash conversion
• Diversified business model by
geography of operations and customers
• Diversified business model by
products and by the markets in
which Informa operates
• Strong market positions, brands
that customers value, and a focus
on long-term customer relationships
• Flexible cost structure, enabling the
business to respond effectively to
changes in demand or in markets
See the Finance Review on page 76
for more detail
• Consideration of the principal risks
directly related to the Group’s
business model
• Colleague and talent-focused
risks around retention and
change management
• Market risk related to brand
promotion and protection and
economic instability
• The risk of technology failure,
data loss and cyber breach
• Customers and relationships
impacted by privacy regulation risk
and reliance on key counterparties
• Acquisition and integration-related risk
See pages 66 to 72 for a description
of each principal risk
• Clear growth strategy
• Under the AIP, focus on maintaining
performance and integrating the UBM
business at pace while creating an
enlarged Informa Group with the
positions and opportunities for
continued growth and scale.
• Support the AIP through a six part
programme which includes:
1. Development of the Group
operating model
2. Strengthening talent and leadership
3. Rebalance and focus through
Progressive Portfolio Management
4. Delivering synergy benefits
5. Return Fashion business to growth
6. Simplify and strengthen
brand value
• Business model that draws on
talent, brands and intellectual
capital, technology, relationships
and partnerships, financing and
access to dynamic and growing
customer markets
See business model on page 20 and Group
strategy on page 10 for more detail
Assessing the Group’s viability
For each principal risk, a severe but plausible scenario is considered.
The Group is viable if gearing and interest cover ratios within its
financial covenants are maintained within prescribed limits, and
if there is available debt headroom and cash to fund operations.
Viability testing is carried out against Informa’s existing debt
facilities, assuming the renewal of the Group’s Revolving Credit
Facility, which was subsequently renewed on 15 February 2019.
In all cases, including after modelling the largest three scenarios
together, no mitigating actions are necessary in order for
Informa to remain viable.
Scenarios include a considerably worse performance than
anticipated from certain key markets, the impact of a general
economic downturn and a significant external event impacting
our most profitable events. In assessing the impact of a general
economic downturn we have specifically considered the impact
of Brexit and the sensitivity across our business.
Where a severe but plausible scenario creates a financial
impact of over 5% of EBITDA, the principal risk is modelled
against the three-year financial plan to test whether it would
adversely impact the Group’s viability. Additionally, the three
largest risks in terms of their potential financial impact are
modelled together as a single scenario, to understand their
combined financial impact.
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INFORMA PLC ANNUAL REPORT 2018 Principal risk
Economic instability
Market risk
Acquisition and integration risk
Ineffective change management
Reliance on key counterparties
Technology failure
Data loss and cyber breach
Inability to attract and retain talent
Health and safety incident
Major incident
Inadequate regulatory compliance
Privacy regulation risk
Viability modelling
Multi-year divisional
strategic plans created
From which three-year financial
plans are formed by Divisions
Plan tested against the three
principal risks where, in a severe
but plausible scenario, impact of
risk valued at over 5% of EBITDA
Group is viable if covenant
test passed and facility
headroom maintained
Risk assessed
Risk above
5% EBITDA
Impact on
viability
modelled
Multi-scenario
test
Market trends,
peers, customers
Capabilities,
people, products,
platforms
RIsk and
sustainability
Current
portfolio
Ambition
MULTI-YEAR GROUP STRATEGY PLAN
THREE-YEAR FINANCIAL PLAN
Tested against economic
instability
Tested against
market risk
Tested against
major incident
Tested against economic instability, market risk and major incident simultaneously
OUTCOMES ASSESSED AGAINST COVENANT AND FACILITY HEADROOM
Viability Statement
Based on the results of this analysis, the Directors have a reasonable expectation that the Group will be able to continue to operate
and meet its liabilities as they fall due over the three-year period to December 2021.
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Financial Review
Gareth Wright
Group Finance Director
76
A further year
of growth and
financial
performance
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INFORMA PLC ANNUAL REPORT 2018 “ Free cash flow
generation and the
conversion of profits
into cash continues
to be a priority and
one of the Group’s key
performance indicators.”
growth from some lower margin products such as Academic
Books, the currency impact of a weaker US dollar, and higher
depreciation from divisional GAP investments and from completing
an enterprise resource technology upgrade. Overall, margins
remain attractive and robust and reflect the quality of our
business-to-business information services portfolio.
Adjusted earnings for 2018 rose to £519.8m (2017: £380.4m),
increasing the Group’s diluted adjusted earnings per share
by 7.0% to 49.2p (2017: 46.0p), reflecting a 36.6% increase in
adjusted earnings and a 28.0% increase in the average number
of shares after issuing equity to help fund the offer for UBM.
Statutory diluted earnings per share decreased by 47.6% to 19.7p,
principally reflecting the increase in adjusting costs in the year.
Free cash flow generation and the conversion of profits into
cash continue to be a priority and are one of the Group’s key
performance indicators, providing flexibility for paying down
debt, future investment and consistent Shareholder returns.
Free cash flow advanced to £503.2m in 2018.
The Group’s stated target range for leverage is between 2.0
and 2.5 times, with the potential to reach around 3.0 times for
acquisitions. Given the strength of our cash flow generation,
we are targeting to reduce leverage from 2.9 times at year end
to within range by the end of 2019.
Informa had another busy and productive year in 2018,
delivering further improvement in our financial performance
while expanding through combination with UBM, and reporting
a fifth consecutive year of growth in revenue, adjusted
operating profit, adjusted earnings, cash flow and dividends.
2018 divisional performance
An overview of the performance of Informa’s four Operating
Divisions throughout 2018 can be found in the divisional review
section starting on page 40 and a detailed summary follows
in this section.
Group financial highlights
Group revenue increased by 3.7% on an underlying basis
(2017: 3.4%) adjusting for the effect of currency movements,
acquisitions, disposals and phasing. This met our stated target
of more than 3.5% and brought total revenues to £2,369.5m
(2017: £1,756.8m).
Adjusted operating profit reached £732.1m, reflecting a
reported growth rate of 34.4% and an underlying growth rate of
2.3%. Statutory operating profit increased by 5.4% to £363.2m.
The Group’s adjusted operating margin remained stable at
30.9% (2017: 31.0%). When excluding the contribution from
UBM, margins were slightly lower due to the effect of faster
£503.2m
2018 free cash flow
30.9%
Adjusted operating margin
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Financial Review continued
In 2018, the UBM portfolio contributed £613.5m to Group revenues
for the six months and 15 days it was part of Informa. It traded in
line with expectations, recording 2.8% underlying revenue growth
across the full year, up from 1.4% in 2017. Its events area grew by
+4.2%, offsetting a -5.8% decline in Other Marketing Services prior
to the disposal described later in this section.
Financing the combination
A considerable amount of work was undertaken to secure an
attractive funding package for the UBM offer. This was financed
through a combination of debt and equity, with around 428m
new shares issued to Shareholders and valued at £3,545.1m
and a short-term acquisition facility financing the cash
consideration of £643.5m.
The short-term facility was quickly refinanced while markets
were favourable, leading to our first public bond, through
oversubscribed issues for a €650m five-year Euro bond and
a £300m eight-year sterling bond.
In early 2019, we also refinanced the Group’s £855m Revolving
Credit Facility, with a syndicate of 11 banks funding a five-year
agreement for £600m and £300m for a three-year term, at lower
rates than previous arrangements. This pushes average debt
maturity to 5.2 years and our weighted average cost of funding
to 3.7%, providing flexibility at an attractive rate of funding.
Enlarged Group’s financial characteristics
A high proportion of the enlarged Group’s revenues continue to
be predictable and recurring in nature, giving us strong forward
visibility. This includes revenues from the sale of annual or
multi-year subscriptions to data and intelligence products and
scholarly journals, from selling stand space at events and from
multi-year sponsorship of events and exhibitions.
The Group’s international operations mean that currency
movements impact reported revenues and profits. The
majority of revenues continue to be generated in US dollars
and in currencies linked to the US dollar.
Our financial results are therefore particularly sensitive to
the movements in the USD/GBP exchange rate, which was
a headwind during 2018. Where there is a cash exposure,
we continue to hedge currency exposure using interest rate
swaps and other financial instruments.
Informa continues to take a low risk approach to tax planning,
recognising the importance of tax contributions to the economies
and communities in which we work. The Group’s effective tax rate
decreased to 17.9% in 2018 (2017: 21.2%) mainly due to the impact
of a lower tax rate in the US following the recent US tax reform
and the release of provisions for uncertain tax positions,
primarily in relation to legacy UBM matters.
Through the combination, the Group has inherited two defined
benefit pension schemes which, like Informa’s existing defined
benefit schemes, are closed to future accrual. The Group’s net
pension liability at the end of 2018 was a modest £33.0m.
“ Informa continues to take a low risk approach
to tax planning, recognising the importance of tax
contributions to the economies and communities
in which we work.”
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INFORMA PLC ANNUAL REPORT 2018 “ Through our new
divisional structure,
we are targeting
continuing growth
across all five Operating
Divisions as well as
improving margins
and strong cash flow.”
Combination and consolidation in 2019
Informa’s consistent financial performance and accelerated
integration during 2018 set the Group up well for delivering
further growth as a combined Group in 2019.
Through our new divisional structure, we are targeting
continuing growth across all five Operating Divisions, as
well as improving margins and strong cash flow.
As part of this, we remain focused on delivering on the promises
made to Shareholders, including generating at least £50m in
gross cost synergies in year during 2019, rising to a £60m run
rate by the end of 2020 and a £75m run rate by the end of 2021.
We continue to focus our businesses around key customer
markets that offer the greatest opportunity for growth and
attractive returns. Through the AIP, we are making further
choices about where to focus efforts and investment.
In January 2019, as part of the Progressive Portfolio
Management programme we completed the sale of UBM’s
Life Sciences media brands portfolio to MJH Associates
for just over $100m and continue to explore options for
other businesses, including the IGM financial information
business and the Agribusiness Intelligence portfolio within
Business Intelligence.
The proceeds of any disposals will be used to
reinvest in the core business, fund future returns to
Shareholders and maintain Balance Sheet flexibility.
Gareth Wright
Group Finance Director
6 March 2019
WWW.INFORMA.COM
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INFORMA PLC ANNUAL REPORT 2018GovernanceFinancial StatementsStrategic Report Strategic Report
Financial Review continued
Income statement
In 2018, the first year following the completion of the 2014-2017 Growth Acceleration Plan, we delivered a fifth consecutive year
of growth in revenue, adjusted profit, adjusted earnings and cash flow. Revenue increased by 34.9% to £2,369.5m and adjusted
operating profit by 34.4% to £732.1m, with revenue growing by 3.7% on an underlying basis and adjusted operating profit by 2.3%.
Statutory operating profit increased by 5.4% to £363.2m.
Revenue
Operating profit/(loss)
Profit/(loss) on disposal
Net finance (costs)/income
Profit/(loss) before tax
Tax(charge)/credit
Profit/(loss) for the year
Adjusted operating margin
Adjusted diluted EPS
1. 2017 restated for the implementation of IFRS 15.
Adjusted
results
2018
£m
2,369.5
732.1
–
(82.4)
649.7
(116.2)
533.5
30.9%
49.2p
Adjusting
items
2018
£m
Statutory
results
2018
£m
–
2,369.5
(368.9)
1.1
0.2
(367.6)
55.7
(311.9)
363.2
1.1
(82.2)
282.1
(60.5)
221.6
19.7p
Adjusted
results
20171
£m
1,756.8
544.9
–
(59.1)
485.8
(103.0)
382.8
31.0%
46.0p
Adjusting
items
20171
£m
–
(200.2)
(17.4)
–
(217.6)
148.0
(69.6)
Statutory
results
20171
£m
1,756.8
344.7
(17.4)
(59.1)
268.2
45.0
313.2
37.6p
Measurement and adjustments
In addition to the statutory results, adjusted results are prepared for the income statement, including adjusted operating profit
and adjusted diluted earnings per share. The Board considers these non-Generally Accepted Accounting Principles (GAAP)
measures as the most appropriate way to measure the Group’s performance because it is comparable to the prior year. This is
also in line with the similarly adjusted measures used by peers and therefore facilitates comparison. The adjusting items section
provides a reconciliation between statutory operating profit and adjusted operating profit by Division. Adjusted results are prepared
to provide a useful alternative measure to explain the Group’s business performance and include recurring and non-recurring items.
Underlying refers to results adjusted for acquisitions/disposals, the phasing of events, including biennials, and the effects of changes
in foreign currency. Year-on-year growth from acquisitions/disposals is included on a pro-forma basis from first day of ownership.
Reported figures exclude all such adjustments. Underlying revenue and adjusted operating profit growth are reconciled to reported
growth as follows:
Underlying
growth
Phasing and
other items
Acquisitions
and disposals
Currency
change
Reported
growth
3.7%
2.3%
3.4%
2.3%
(0.4%)
(0.1%)
0.1%
(0.4%)
35.4%
37.6%
21.4%
20.8%
(3.8%)
(5.4%)
5.7%
8.4%
34.9%
34.4%
30.6%
31.1%
2018
Revenue
Adjusted operating profit
2017
Revenue
Adjusted operating profit
80
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INFORMA PLC ANNUAL REPORT 2018 Adjusting items
The adjusting items below have been excluded from adjusted results. The total charge against operating profit for adjusting items
rose to £368.9m in 2018 (2017: £200.2m), mainly due to the combination with UBM, with the amortisation of acquired intangible
assets comprising by far the largest item in both years.
Intangible amortisation and impairment:
Intangible asset amortisation1
Impairment of goodwill and acquisition intangibles
Acquisition costs
Integration costs
Restructuring and reorganisation costs:
Redundancy and reorganisation costs
Vacant property costs
Remeasurement of contingent consideration
UAE VAT charge
Guaranteed Minimum Pension (GMP) equalisation
Adjusting items in operating profit
(Profit)/loss on disposal of subsidiaries and operations
Investment income
Finance costs
Adjusting items in profit before tax
Tax related to adjusting items
Tax adjusting item for US federal tax reform
Adjusting items in profit for the year
2018
£m
243.6
9.8
42.9
46.0
8.1
5.0
(0.1)
9.1
4.5
368.9
(1.1)
(1.2)
1.0
367.6
(55.7)
–
311.9
20172
£m
157.8
5.6
4.4
19.6
6.7
6.2
(0.1)
–
–
200.2
17.4
–
–
217.6
(62.6)
(85.4)
69.6
1.
Intangible asset amortisation is in respect of acquired intangibles and excludes amortisation of software and product development.
2. 2017 restated for the implementation of IFRS 15.
The increase in intangible asset amortisation in 2018 primarily reflects the six and a half months of amortisation of acquired
intangibles relating to the UBM acquisition. For the Group, other intangible amortisation relates to book lists and journal titles,
acquired databases, customer and attendee relationships, and brands related to exhibitions and conferences. Intangible asset
amortisation arising from software assets and product development is not treated as an adjusting item and so not included in
the table, as it is treated as an ordinary cost in the calculation of adjusted operating profit.
Acquisition costs of £42.9m included £41.1m of costs relating to the acquisition of UBM, with integration costs of £46.0m including
£39.5m relating to the integration of UBM.
Following the introduction of Value Added Tax on 1 January 2018 in the UAE the Group identified and reported an underpayment
during 2018 and made a correcting payment. In January 2019 the UAE tax authorities assessed a tax penalty of £9.1m in relation
to the late payment. The Group is disputing this penalty assessment; however, an amount of £9.1m has been provided for within
adjusting items in the year.
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Strategic Report
Financial Review continued
Following the completion of the Growth Acceleration Plan at the end of 2017, all four Operating Divisions delivered positive underlying
revenue growth in 2018. Combined with the stub period contribution from UBM, this produced Group underlying revenue growth of
3.7% and underlying profit growth of 2.3%, as illustrated in the following table:
Revenue
Reported revenue growth
Underlying revenue growth
Statutory operating profit
Add back:
Intangible asset amortisation1
Impairment of intangibles
Acquisition costs
Integration costs
Restructuring and reorganisation costs
Remeasurement of contingent consideration
UAE VAT charge
GMP equalisation
Adjusted operating profit
Underlying adjusted operating profit growth
GE
£m
575.8
2.7%
6.7%
116.4
67.5
5.7
0.7
1.8
0.9
(2.0)
9.1
–
200.1
6.0%
AP
£m
533.2
0.6%
2.2%
138.3
52.7
–
0.3
0.4
6.7
–
–
–
198.4
0.3%
BI
£m
385.6
0.6%
2.6%
69.3
K&N
£m
261.4
(7.6%)
2.3%
9.2
22.8
15.6
–
0.2
1.3
4.5
(7.3)
–
0.3
91.1
0.9%
4.1
–
0.6
1.0
9.2
–
0.2
39.9
(2.1%)
UBM
£m
613.5
n/a
3.7%
30.0
85.0
–
41.7
41.9
–
–
–
4.0
202.6
2.2%
Total
£m
2,369.5
34.9%
3.7%
363.2
243.6
9.8
42.9
46.0
13.1
(0.1)
9.1
4.5
732.1
2.3%
1.
Intangible asset amortisation is in respect of acquired intangibles, and excludes amortisation of software and product development.
Net finance costs
Adjusted net finance costs, consisting principally of interest costs on US private placement loan notes, bond and bank borrowings,
increased by £23.3m to £82.4m. The increase mainly reflects the effect of higher average debt levels following the acquisition of
UBM in June 2018. This increased net debt by £1,211.9m, taking into account a cash consideration of £643.5m and £568.4m of net
debt acquired. Finance costs also increased due to higher US LIBOR rates in the year.
Net interest paid increased by £12.4m to £64.2m, primarily associated with the interest payment on the additional debt finance
from the UBM acquisition.
Taxation
Approach to tax
The Group continues to recognise that taxes paid are part of the economic benefit created for the societies in which we operate,
and that a fair and effective tax system is in the interests of taxpayers and society at large. We aim to comply with tax laws and
regulations everywhere the Group does business. Informa has open and constructive working relationships with tax authorities
worldwide and our approach balances the interests of stakeholders including Shareholders, governments, colleagues and the
communities in which we operate.
Tax expense
The Group’s effective tax rate (ETR) reflects the blend of tax rates and profits in the jurisdictions in which we operate. In 2018,
the adjusted effective tax rate was 17.9% (2017: 21.2%).
The decrease in the ETR principally relates to the impact of a lower tax rate in the US following recent US tax reform and the release
of provisions for uncertain tax positions, primarily in relation to legacy UBM matters.
Tax payments
During 2018, the Group paid £82.4m (2017: £45.3m) of corporation and similar taxes on profits. The increase relates to tax payments
by UBM companies, the timing of which was weighted to the second half of the year.
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INFORMA PLC ANNUAL REPORT 2018 A breakdown of the main geographies in which the Group paid tax is as follows:
UK
Continental Europe
United States
China (including Hong Kong)
Rest of World
Total
The reconciliation of the adjusted tax charge to cash taxes paid is as follows:
Tax charge on adjusted profit before tax (PBT) per Consolidated Income Statement
Movement in deferred tax including US tax losses
Current tax deductions in respect of adjusting items
Movement in provisions for uncertain tax positions
Taxes paid in different year to charged
Taxes paid per Consolidated Cash Flow Statement
Less: tax relating to Penton acquisition forward contract
Taxes paid per free cash flow
1. 2017 restated for the implementation of IFRS 15.
2018
£m
39.9
7.7
1.7
25.2
7.9
82.4
2018
£m
116.2
(5.3)
(29.4)
5.6
(4.7)
82.4
–
82.4
2017
£m
39.0
2.3
(3.2)
3.3
3.9
45.3
20171
£m
103.0
(22.0)
(39.4)
(0.7)
4.4
45.3
(11.8)
33.5
At the end of 2018, the deferred tax asset relating to US tax losses was £106.0m (2017: £45.6m), which is expected to be utilised
against future US profits.
Goodwill is not amortised, and as a result, there is no charge to adjusting items for goodwill amortisation. However, there can be an
allowable tax benefit for certain goodwill amortisation in the US and elsewhere, and so where this benefit arises, it reduces the tax
charge on adjusted profits.
The amortisation of intangible assets is considered an adjusting item. Therefore, the £16.7m (2017: £27.3m) current tax deduction
taken in respect of the amortisation of intangible assets is also treated as an adjusting item and is included in the current tax
deductions in respect of adjusting items noted above.
Tax contribution
The Group’s total tax contribution, which comprises all material taxes paid out of profits and other material taxes paid by our
businesses, was £139.1m in 2018 (2017: £82.3m). The geographic split of our total tax contribution was as follows:
Profit taxes borne
Employment taxes borne
Other taxes (e.g. business rates)
Total
UK
£m
39.9
23.6
4.6
68.1
US
£m
1.7
17.8
1.7
21.2
Other
£m
40.8
7.5
1.5
49.8
Total
£m
82.4
48.9
7.8
139.1
In addition to the above, in 2018 we collected taxes on behalf of governments (e.g. employee taxes and sales taxes) amounting to
£177.8m (2017: £126.1m).
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Financial Review continued
Earnings per share
Diluted adjusted earnings per share (EPS) increased 7.0% to 49.2p (2017: 46.0p), calculated on the adjusted earnings for the year of
£519.8m (2017: £380.4m). The increase reflects a 36.6% increase in adjusted earnings together with a 28.0% increase in the average
number of shares. Statutory diluted earnings per share decreased by 47.6% to 19.7p, principally reflecting the increased cost of
adjusting items in the year. The share increase comes from the time-pro-rated effect of the equity issued as part of Informa’s
acquisition of UBM, with 427.5m shares issued to the Shareholders of UBM on 18 June 2018.
Adjusted profit for the year
Non-controlling interests
Adjusted earnings
Weighted average number of shares used in diluted EPS (m)
Adjusted diluted EPS (p)
1. 2017 restated for the implementation of IFRS 15.
2018
£m
533.5
(13.7)
519.8
1,057.2
49.2p
20171
£m
382.8
(2.4)
380.4
826.1
46.0p
Dividends
In 2018, £201.9m (2017: £162.0m) of dividends were paid to external Shareholders and £8.6m (2017: £2.0m) of dividends were
paid to non-controlling interests.
On 28 June 2018, in the post-acquisition ownership period of UBM, there was also a special dividend payment of £59.0m to the
former Shareholders of UBM. This settled a dividend liability whose payment had been agreed prior to the acquisition date.
The Group maintains a progressive dividend policy, with the aim to grow dividends broadly in line with earnings year-on-year.
This approach aims to achieve a balance between sufficiently rewarding Shareholders, and retaining the financial strength and
flexibility to reinvest in the business and pursue growth opportunities.
The Board has proposed a final dividend of 14.85p per share (2017: 13.80p per share). Subject to Shareholder approval at the AGM,
the final dividend will be paid on 31 May 2019 to Ordinary Shareholders registered as at the close of business on 26 April 2019. This
will result in total dividends for the year of 21.90p per share (2017: 20.45p) representing a 7.1% year-on-year increase. The growth
in earnings in 2018 means dividend cover against adjusted earnings was 2.2 times (2017: 2.2 times).
Translation impact
As a result of the Group’s strategic expansion in the US since 2014, the Group has a high exposure to US dollar revenues and costs.
In 2018, the Group received in its revenue approximately 61% (2017: 65%) in USD or currencies pegged to USD, 6% (2017: 5%) in Euro
and 7% (2017: 2%) in Chinese renminbi and incurred in its costs approximately 53% (2017: 55%) in USD or currencies pegged to USD,
2% (2017: 4%) in Euro and 6% (2017: 2%) in Chinese renminbi. Each one cent ($0.01) movement in the USD to GBP exchange rate has
a circa £11.4m (2017: £8.5m) impact on annual revenue, a circa £4.5m (2017: £3.5m) impact on annual adjusted operating profit and
a circa 0.4p (2017: 0.3p) impact on full-year adjusted diluted EPS, based on the 31 December 2018 closing rate.
The following USD rates versus GBP were applied during the year:
USD
2018
2017
Closing rate Average rate
Closing rate
Average rate
1.27
1.33
1.35
1.29
For the purposes of testing debt covenant levels and calculating Informa’s leverage, both profit and net debt are translated using the
average exchange rate during the relevant year.
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INFORMA PLC ANNUAL REPORT 2018
Free cash flow
Cash flow generation remains one of the Group’s priorities and strengths, providing the funds and flexibility for future investment.
The following table shows the adjusted operating profit reconciled to free cash flow. Free cash flow is a key financial measure of cash
generation and represents the cash flow generated by the business before cash flows relating to acquisitions and disposals and their
related costs, dividends, and any new equity issuance or purchases.
Adjusted operating profit
Depreciation of property and equipment
Software and product development amortisation and impairment
Share-based payments
Pension curtailment gain
Adjusted share of joint venture and associate results
Adjusted EBITDA1
Net capital expenditure
Working capital movement2
Pension deficit contributions
Operating cash flow
Restructuring and reorganisation
Net interest
Taxation3
Free cash flow
2018
£m
732.1
13.1
42.5
8.1
(0.8)
(1.0)
794.0
(59.4)
(62.3)
(4.4)
667.9
(18.1)
(64.2)
(82.4)
503.2
20174
£m
544.9
9.2
24.8
5.4
–
–
584.3
(79.0)
(10.5)
–
494.8
(8.6)
(51.8)
(33.5)
400.9
1. Adjusted EBITDA represents adjusted operating profit before interest, tax, and non-cash items including depreciation and amortisation.
2. Working capital movement excludes movement on restructuring, reorganisation, acquisition and integration accruals.
3. Tax payment for 2017 excludes £11.8m of tax relating to adjusting item for Penton derivative forward contract gain of £58.9m.
4. 2017 restated for the implementation of IFRS 15.
The Group’s focus on cash generation led to another year of strong operating cash conversion at 91.2% (2017: 90.8%). The 91.2%
result is calculated by dividing the operating cash flow (£667.9m) by the adjusted operating profit (£732.1m).
Net capital expenditure was £59.4m (2017: £79.0m), equivalent to 2.5% of 2018 revenue, and with the reduction year-on-year
reflecting the end of the Growth Acceleration Plan investments. Going forward, net capital expenditure is expected to be in the
range of 3% to 4% of revenue.
The working capital outflow of £62.3m was £51.8m higher than the outflow in 2017, largely due to the timing of the acquisition
of UBM, with UBM working capital outflows of £84.5m in the post-acquisition period.
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Financial Review continued
The following table reconciles net cash inflow from operating activities, as shown in the Consolidated Cash Flow Statement, to free
cash flow:
Net cash inflow from operating activities per statutory cash flow
Interest received
Purchase of property and equipment
Proceeds on disposal of property and equipment
Purchase of intangible software assets
Product development cost additions
Add back: acquisition and integration costs paid
Add back: tax paid on Penton-related derivative forward contract
Free cash flow
2018
£m
486.3
2.1
(23.4)
0.4
(30.2)
(6.2)
74.2
–
503.2
2017
£m
433.9
0.2
(14.7)
1.0
(52.2)
(13.1)
34.0
11.8
400.9
The following table reconciles cash generated by operations, as shown in the Consolidated Cash Flow Statement, to operating cash
flow shown in the free cash flow table above:
Cash generated by operations per statutory cash flow
Net Capex paid
Add back:
Acquisition and integration costs paid
Restructuring and reorganisation costs paid
Operating cash flow per free cash flow statement
1. 2017 restated for the implementation of IFRS 15.
2018
£m
635.0
(59.4)
74.2
18.1
667.9
20171
£m
531.2
(79.0)
34.0
8.6
494.8
The following table reconciles free cash flow to net debt, which increased by £1,308.8m to £2,681.9m during the year. This included £1,211.9m
related to the UBM acquisition, and a £150.9m adverse foreign exchange impact primarily due to a strengthening in the US dollar.
2018
£m
503.2
(690.4)
(201.9)
(59.0)
(8.6)
2.0
(454.7)
(702.6)
(0.6)
(150.9)
2017
£m
400.9
(250.6)
(162.0)
–
(2.0)
(0.9)
(14.6)
–
(2.2)
129.1
(1,373.1)
(2,681.9)
(1,485.4)
(1,373.1)
Free cash flow
Acquisitions and disposals
Dividends paid
Dividend paid to settle UBM acquisition liability
Dividends paid to non-controlling interests
Net share proceeds/(payments)
Net funds flow
Borrowings acquired with acquisition of UBM
Non-cash movements
Foreign exchange
Net debt at 1 January
Net debt at 31 December
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INFORMA PLC ANNUAL REPORT 2018 Financing and leverage
Our focus on maintaining a robust and flexible financing framework resulted in a number of developments in the Group’s debt
financing arrangements during the year, including the Group’s inaugural public debt market issuance, to refinance the borrowings
used for the acquisition of UBM.
Our leverage strategy is to target a ratio of net debt to EBITDA in the range of 2.0 to 2.5 times, with the potential to increase to around
3.0 times in the short term for a large acquisition. We used the Balance Sheet efficiently in financing the UBM acquisition, increasing
leverage to 3.1 times at completion, before starting to manage leverage down to our target range, reaching 2.9 times leverage by
the end of 2018.
Before UBM, on 4 January 2018, the Group issued $400m of private placement loan notes, with a maturity of 7 years ($200m)
and 10 years ($200m), at an average interest rate of 4.03%. In March 2018 we extended a bank term loan facility for $200m, with
a maturity of up to 12 months; this was subsequently repaid in February 2019.
Shortly after completing the acquisition of UBM, on 5 July 2018, we issued two Euro Medium Term Loan Notes, with an 8-year bond
for £300m and a 5-year bond for €650m. These bonds were used to refinance acquisition debt facilities used to acquire UBM.
On 15 February 2019 the Revolving Credit Facility (RCF) was replaced with a new facility with two tranches: £600m for a 5-year
term to February 2024 and £300m for a 3-year term to February 2022.
The net impact of these actions is to increase the Group’s overall debt capacity, whilst extending the average maturity to 5.2 years
and reducing the weighted average cost of debt to 3.7%.
At 31 December 2018, the Group had £3.6bn of committed facilities (£2.0bn at 31 December 2017), of which £0.8bn was undrawn.
Cash at bank and in hand
Bank overdraft
Private placement loan notes
Private placement fees
Bond borrowings
Bond borrowing fees
Bank borrowings – Revolving Credit Facility (RCF)
Bank borrowings – term loan facility
Bank loan fees
Derivative assets associated with borrowings
Derivative liabilities associated with borrowings
Net debt
Borrowings (excluding derivatives, fees and overdrafts)
Unutilised committed facilities (undrawn portion of RCF)
Total committed facilities
31 December
2018
£m
31 December
2017
£m
(168.8)
43.9
1,396.4
(3.4)
1,163.0
(7.4)
78.5
156.9
(0.9)
(1.5)
25.2
(54.9)
6.7
841.0
(1.6)
–
–
287.6
296.3
(2.0)
–
–
2,681.9
1,373.1
2,794.8
776.5
3,571.3
1,424.9
567.4
1,992.3
Under the private placement loan notes and RCF in place at 31 December 2018, the principal financial covenant ratios are a maximum
net debt to EBITDA of 3.5 times and a minimum EBITDA to interest cover of 4.0 times, tested semi-annually. The new RCF launched on
15 February 2019 has removed these covenants.
At 31 December 2018, the ratio of net debt to EBITDA was 2.9 times (31 December 2017: 2.5 times), calculated according to our facility
agreements and using average exchange rates and including a full year’s trading for acquisitions. The ratio of EBITDA to net interest
payable was 9.5 times (at 31 December 2017: 9.8 times).
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Strategic Report
Financial Review continued
Corporate development
The Group’s most significant acquisition in 2018 was UBM, with several other smaller additions to the portfolio. Total net expenditure
on acquisitions and disposals was £690.4m (2017: £250.6m), with £616.2m relating to acquisition and disposal of businesses and
£74.2m to integration and acquisition costs.
Acquisition expenditure in the period relating to UBM was £509.3m, with a cash payment to UBM Shareholders of £643.5m, less
cash acquired of £134.2m. Total consideration was £4,190.0m, with the remaining £3,545.1m being satisfied through the issue of
427,536,794 shares in Informa at a price of £8.29 per share, and with £1.4m of deferred consideration relating to the settlement
of UBM share save scheme awards that exercised after the acquisition date.
The first disposal under the Progressive Portfolio Management programme was signed on 19 December 2018, with the agreement to
sell the Life Sciences media brands portfolio that was previously part of UBM to MJH Associates, for consideration of just over $100m.
The sale completed on 31 January 2019, and this business has been disclosed as held for sale in the Consolidated Balance Sheet at
31 December 2018.
Pensions
The Group continues to meet all commitments to its pension schemes, which consist of six defined benefit schemes that are closed
to future accrual. The acquisition of UBM added two defined benefit schemes to the Group, adding a net pension liability of £12.5m
at 31 December 2018.
At 31 December 2018, the Group had a net pension liability of £33.0m (2017: £23.6m), represented by a pension deficit of £37.5m
(2017: £23.6m) and a pension surplus of £4.5m (2017: £nil). Gross liabilities were £679.2m at 31 December 2018 (2017: £176.3m). Net
pension liabilities increased by £4.5m in 2018 following the recognition of additional liabilities arising from the estimated financial
impact of equalising Guaranteed Minimum Pensions (GMP) amongst members.
The net deficit remains manageable and relatively small compared with the size of the Group’s Balance Sheet. All schemes are closed
to future accrual and there were £4.4m of employer deficit payments during 2018, with £4.7m payments expected to be paid in 2019.
Restatement of 2017 results
Results for the year ended 31 December 2017 have been restated following the adoption of IFRS 15 Revenue from Contracts with
Customers in 2018.
There were also restatements to the 2017 income statement from amounts previously recognised on a percentage complete basis.
This resulted in reductions of £0.8m to revenue, £0.6m to profit before tax and £0.5m to profit after tax. These adjustments only
affected the Business Intelligence Division. This resulted in basic EPS being restated from 37.8p per share to 37.7p per share,
diluted EPS being restated from 37.7p to 37.6p and adjusted diluted EPS being restated from 46.1p to 46.0p.
This also resulted in the Consolidated Balance Sheet at 31 December 2017 being adjusted for the reclassification of £72.1m of
deferred income against trade receivables, for amounts that have been invoiced and where services have not yet been provided
and amounts are not yet due.
The Group also adopted IFRS 9 Financial Instruments from 1 January 2018. There was no material impact from the adoption
of this standard and therefore there is no restatement to previously reported results.
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INFORMA PLC ANNUAL REPORT 2018 New accounting standards
The only impact from new accounting standards in 2019 is from the adoption of IFRS 16 Leases.
IFRS 16 Leases will replace the existing leasing standard, IAS 17 Leases. It will treat all leases in a consistent way, eliminating the
distinction between operating and finance leases, and will require lessees to recognise all leases on the Balance Sheet, except for
low value leases and those with a term of less than 12 months. The most significant effect of the new standard will be an increase
in lease assets and lease liabilities for leases currently categorised as operating leases. The new standard also changes the nature of
expenses related to those leases, replacing the straight line operating lease expense with a depreciation charge for the right-of-use
lease asset (included within operating costs) and an interest expense on the finance lease liability (included within finance costs).
Adoption of IFRS 16 is expected to result in an increase in assets of between £300m and £320m and a corresponding increase in
liabilities of between £300m and £320m as at 1 January 2019. Operating profit for the year ending 31 December 2019 is estimated
to increase by between £4m and £6m, being the difference between the lease expense and depreciation, and profit before tax will
decrease by between £7m and £9m, reflecting a higher total lease interest expense in the initial years. Profit after tax is estimated
to decrease by between £6m and £8m and adjusted diluted EPS and diluted EPS will decrease approximately between 0.4p and 0.6p.
There are several practical expedients and exemptions available under IFRS 16. The Group has elected to apply use of the modified
retrospective method of implementation where there is no restatement of the comparative period and using the practical expedient
where, at the adoption date, right-of-use lease assets are set to equal the lease liabilities. The Group will exclude leases of low value
assets and short-term leases, with a duration of less than 12 months, from the application of IFRS 16, with payments for these leases
continuing to be expensed directly to the income statement as operating leases. The major classes of leases impacted by the new
standard are property and event space leases. The half-year results for the six months ending 30 June 2019 will include an update
on the actual impact of IFRS 16.
Gareth Wright
Group Finance Director
6 March 2019
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Governance
Chairman’s introduction to governance
Progress and performance:
The Chairman’s review of 2018
The Board’s view was that following GAP, we had both the
capacity and the capability to create significant value from the
acquisition, with our increased international scale and depth
in verticals providing strong foundations for future long-term
growth and returns. This confidence led to our unanimous
endorsement for the offer. More details on the Board’s role
can be found on page 5.
Whilst there was much activity and discussion on this project
through 2018, the Directors were equally focused on the
continued progress and performance of all our businesses,
and it was particularly pleasing to see Academic Publishing,
Business Intelligence and Knowledge & Networking all
deliver improved growth through the year, despite the obvious
distractions. It is testament to the operational fitness and
strengthened capabilities now inherent within these businesses
following their respective GAP programmes.
More broadly, the Board also continued to scrutinise and
monitor progress on other significant operational matters,
from data protection and risk appetite to culture, engagement
and talent development across the Group. More on these
activities can be found in the reports that follow.
Expanded Board
Over the last five years, initially through GAP and now through
the AIP, the Informa Group has progressively built greater
scale, reach and specialism in its operations, markets and
brands. In the same way as the operating structure and
management team have evolved with the Group through this
period, the Board’s composition has also been continually
reviewed and updated to make sure we have the necessary
expertise, capacity and experience to perform our duties
and govern effectively.
Derek Mapp
Chairman
Dear Shareholder
I would like to start by thanking Shareholders for their support
and engagement with the Informa Group and its Board during
what was another very busy and productive year.
The Board’s primary goal is to encourage and promote Informa’s
long-term success, the creation of value for Shareholders and
the wider benefits for other stakeholders, including colleagues
and customers.
Our progress and performance in the year covered by this
Annual Report primarily reflects improving underlying growth
in the historical Academic Publishing, Business Intelligence,
Global Exhibitions and Knowledge & Networking businesses,
which builds on the operational improvements and strengthened
capabilities gained through the 2014-2017 Growth Acceleration
Plan (GAP).
As highlighted elsewhere in this report, in 2018 Informa took
a further step forward in ambition and reach through the
acquisition of UBM. The Board took an active role in this
process, from the initial assessment and review of the proposal
through the Shareholder approval process and launch of the
Accelerated Integration Plan (AIP). We rightly held the leadership
team to account on the logic, strategic benefits and financial
rationale, as well as its ability to integrate and operate the
enlarged business effectively.
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INFORMA PLC ANNUAL REPORT 2018 In 2018, as Informa expanded, we chose to add two new
long-term independent Non-Executive Directors to the Board:
David Wei, who brings invaluable executive experience in Asia,
now a significant region for the enlarged Group, and Mary
McDowell, who brings significant executive experience in North
America and the Telecoms and Tech space. In addition, I would
like to pay thanks to Greg Lock, who joined the Board as Deputy
Chairman for one year following the acquisition and will step
down at the Annual General Meeting (AGM) in May. Greg was
instrumental in the creation of the enlarged Informa Group and
has offered wise and experienced counsel throughout his time
on the Board.
Our new Board members received a detailed and tailored
induction programme, including an introduction to all our
Operating Divisions and many of their senior leadership
teams. I am pleased to say that they have settled in quickly
and are already making valuable contributions.
These appointments also provided the opportunity to refresh
the Audit, Nomination and Remuneration Committees, and the
current membership of each Committee is detailed in the
reports that follow.
How the Board operates and meets
its responsibilities
The aim of all the Directors is to encourage, support and
challenge Informa’s management teams by adopting an
open, collaborative and engaged approach. There is a clear
governance structure for decision making, summarised on
page 96 of this report.
As Chairman, I aim to ensure sufficient time for a thorough
discussion of key matters at formal Board meetings and during
informal exchanges, and to ensure each Director can contribute
effectively. Board decisions are made collectively, with input
from each Director, and it is our aim that the Board’s culture
reflects that of the Informa Group as a whole: engaged, dynamic
and collaborative.
During 2018, the Board continued to comply with the
responsibilities set out in the 2016 UK Corporate Governance
Code (the 2016 Code). For ease of review and reading, the
following section of this report is structured according to
the Code’s five principal areas. I can confirm that for the year
ended 31 December 2018, Informa has complied with each of
the Principles of the 2016 Code and that each Director is aware
of their duties and discharges them with due care and attention.
Our formal statement of compliance with the 2016 Code can
be found on page 93.
During 2018, the Board also spent time reviewing its key policies
and processes, including the terms of reference of its standing
Committees, in advance of the introduction of the new UK
Corporate Governance Code (the 2018 Code) from January 2019.
Your Directors are fully aware of and support the requirements
of section 172 of the Companies Act 2006, which include acting
in ways that are most likely to promote the success of the
Company for the benefit of its members as a whole. At all
times, it is our aim to generate continued sustainable value for
Shareholders, consider the interests of our colleagues in the
Group, and maintain positive relationships with our customers,
suppliers and other stakeholders. Further details on the Group’s
key communities and the way in which the business interacted
with them during 2018 can be found on pages 30 to 36.
Shareholder discussion and engagement
The Board places significant value on regular, two-way engagement
with Shareholders and investors, and through 2018, in a year
of busy corporate activity, both the Group’s Directors and its
Executive Management Team were very active in this respect. The
Chairman, accompanied by some of his Board colleagues, met in
person with Shareholders representing almost two-thirds of the
Group’s equity base through the year, while the leadership team
conducted more than 400 institutional investor meetings.
The Board appreciates the strong support from Shareholders for
Informa’s acquisition of UBM. Similarly, we value and appreciate
the input and views provided through the consultation on our
updated Directors’ Remuneration Policy, which was approved at
the AGM in May 2018. We remain committed to engaging on a
regular basis with Shareholders on this and other matters going
forward, and I was delighted how many Shareholders were keen
to meet in early 2019 as part of my Annual Engagement Roadshow.
Colleagues, culture and communities
One of the strengths of Informa is its engaged and collaborative
culture, with minimal hierarchy and an openness to ideas and
input from all areas of the organisation. Reflecting this, the
Directors also seek to engage with a wide range of colleagues
throughout the year, both formally and informally. This helps
to get beneath the surface of the Company and understand the
business and colleagues’ interests more deeply, whilst answering
questions and contributing to the culture of the Group ourselves.
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Governance
Chairman’s introduction to governance continued
The Board and Executive Management Team interact regularly.
The Executive Management Team attends Board meetings, joined
by divisional Senior Management as well as subject matter experts,
presenting and answering questions on specific business matters
at Board, Committee and our annual Board Strategy meetings.
Regular Board papers from the Group Chief Executive, Group
Finance Director, Strategy Director, Director of Investor Relations,
Communications & Brand and the Group General Counsel &
Company Secretary also provide insight and reflections on the
day-to-day activities within the Group, and often include internal
communications circulated to the wider business.
As Chairman I work particularly closely with the Group Chief
Executive, having weekly discussions and exchanges, and
planning agendas collaboratively.
During July 2018, I was fortunate enough to attend an annual
senior leadership gathering called ReInvent, where nearly
100 leaders across the Group came together. ReInvent gave
me an opportunity to speak to the group, get to know new
colleagues and hear first-hand of both the challenges and
opportunities created by Informa’s expansion. My Board
colleagues also continue to enjoy participating in Group-wide
initiatives like Walk the World, which gives an opportunity for
less formal interaction with colleagues in various locations.
The Group’s Board meetings rotate around Informa’s offices
and external venues close to key locations and events, and
they often provide further opportunities to meet different
communities of colleagues. It is our intention to hold a Board
meeting in Hong Kong, an increasingly sizeable hub for the
Group, as well as in the UK in 2019.
As these activities indicate, we believe there is a good level
of engagement across and within the Group, and the Board
has good access and regular interaction at all levels of the
organisation. However, as structured engagement with
colleagues becomes a more significant matter under the 2018
Code, I have asked Helen Owers to lead the Board’s thinking
on the formal and informal mechanisms by which we receive
the views and feedback of colleagues. Helen will be monitoring
the current approach and numerous activities that already
take place through 2019 and assessing whether additional
mechanisms or tools could be beneficial to Informa.
“ One of the strengths of
Informa is its engaged
and collaborative culture,
with minimal hierarchy
and an openness to ideas
and input.”
Looking ahead
As Informa undertakes its first full year as a combined Group
in 2019, your Board will remain very attentive to continued
delivery and focus across all our businesses. At the same
time, we will closely monitor the progress of the AIP to ensure
we fulfil the promises made to Shareholders at the time of the
transaction in delivering on synergy targets and building a
Group with the capabilities and commitment to reap the full
benefits of our increased scale and international reach.
As many Shareholders impressed upon us in our recent
Annual Engagement Roadshow, retaining management and
Board stability and continuity through this important period
of integration is critical to its success. For this reason, whilst
acknowledging the latest guidance from the 2018 Code, the
Board remains committed to meeting our prior obligations to
deliver the first full year of the enlarged Group, something we
were very supportive of at the time and remain equally positive
about today.
Thank you once again to all our colleagues, Shareholders and
other stakeholders for your continued support for the Group
and I look forward to working closely with you through 2019.
Derek Mapp
Chairman
6 March 2019
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INFORMA PLC ANNUAL REPORT 2018 Compliance Statement
Informa’s Board is accountable to the Group’s Shareholders for
its standards of governance and is committed to the principles
of corporate governance contained in the Financial Reporting
Council (FRC) Corporate Governance Code.
The Board is pleased to report that during 2018, Informa continued
to apply the main Principles and complied with all relevant
Provisions of the 2016 UK Corporate Governance Code (the
2016 Code). The Corporate Governance Report, and the Audit
Committee, Nomination Committee and Directors’ Remuneration
Reports which follow, explain how Informa applied the principles
of good governance set out in the 2016 Code.
The Board has noted the changes to the UK Corporate Governance
Code as set out in the 2018 edition (the 2018 Code) which is
applicable for accounting periods beginning on or after
1 January 2019. The Company will report on its compliance
with the 2018 Code in the 2019 Annual Report and Accounts.
Both the 2016 Code and the 2018 Code can be found on the
FRC’s website at http://www.frc.org.uk.
The Audit Committee has been provided with suitable
supporting material to review the Annual Report and, in
accordance with the 2016 Code, has provided assurances for
the Board to confirm that the Annual Report, taken as a whole,
is fair, balanced and understandable. The Board also confirms
that the Annual Report contains sufficient information for
Shareholders to assess the Company’s performance, business
model and strategy.
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Governance
Board of Directors
Strength in depth
Derek Mapp
Chairman
Greg Lock
Non-Executive Deputy Chairman
Stephen A. Carter CBE (Lord Carter)
Group Chief Executive
Date of appointment: March 2008
Date of appointment: June 2018
Date of appointment: September 2013
Skills and experience: Derek brings a wealth of
commercial and governance experience to the Group.
He joined Taylor & Francis as a Non-Executive Director
in 1998 before becoming a Non-Executive Director at
Informa in 2005 and Chairman in 2008.
Derek won the Quoted Companies Non-Executive
Director of the Year award in 2017 for his work as
Chairman of Huntsworth plc (from which position
he retired in March 2019). Derek founded and was
Managing Director of Tom Cobleigh PLC and Imagesound
Plc. He has a keen interest in sports and served as
Chairman of the British Amateur Boxing Association.
Other current appointments: Derek is Chairman
of Mitie Group plc and two private companies.
Skills and experience: Greg joined the Board in June
2018 having previously served as a Non-Executive
Director and latterly as Chairman of UBM plc. He
has been Chairman of five public companies during
the past 15 years and a Board member of several
private companies.
Greg has more than 45 years’ experience in the
technology, software and computer services industry.
In a 30-year career at IBM, he held a range of senior
roles including that of Global General Manager for
the Industrial sector.
Greg holds an MA from Churchill College, Cambridge.
Other current appointments: Greg is Chairman
of Computacenter plc and a Trustee of the Lock
Foundation Charitable Trust.
Skills and experience: Stephen joined Informa as a
Non-Executive Director in 2010, before being appointed
as Group Chief Executive in 2013.
Stephen previously held senior positions in a range of
Media & Technology businesses including as President
and Managing Director EMEA of Alcatel Lucent Inc. and
Managing Director and COO of ntl. In the public sector,
he was the founding CEO of Ofcom before serving as
Chief of Strategy to Prime Minister, The Right Hon.
Gordon Brown, and as Minister for Telecommunications
and Media.
Other current appointments: Stephen is a
Non-Executive Board member of United Utilities
Group PLC and the Department for Business,
Energy & Industrial Strategy.
Gareth Wright
Group Finance Director
Gareth Bullock
Senior Independent Director
Cindy Rose OBE
Non-Executive Director
Date of appointment: July 2014
Date of appointment: January 2014
Date of appointment: March 2013
Skills and experience: Gareth has extensive Senior
Executive experience in finance roles. He joined
Informa in 2009 and held various roles within the
Company, including Deputy Finance Director and
Acting Group Finance Director, prior to his appointment
as Group Finance Director in July 2014.
Prior to joining Informa, Gareth held a range of
positions at National Express plc including Head
of Group Finance and Acting Group Finance Director.
He qualified as a chartered accountant with Coopers
& Lybrand (now part of PwC), and worked in its audit
function from 1994 to 2001.
Other current appointments: Gareth has no current
external appointments.
Skills and experience: Gareth retired from the Board
of Standard Chartered PLC, where he was Group
Executive Director responsible for Africa, Middle East,
Europe and the Americas as well as chairing Risk and
Special Assets Management, in 2010. He had both wide
functional and international experience, having been
Head of Corporate Banking in Hong Kong, CEO Africa,
Group Chief Information Officer and Head of Strategy.
Gareth has held numerous board positions, inter
alia, Tesco PLC, Tesco Personal Financial Group Ltd,
Spirax-Sarco Engineering PLC, Fleming Family &
Partners Ltd, British Bankers’ Association and Global
Market Group Ltd (in China). He has just finished his
term as a Trustee of the British Council.
Gareth holds an MA from St Catharine’s College,
Cambridge.
Other current appointments: Gareth is Chairman
of Development Bank of Wales PLC.
Skills and experience: Cindy brings present-day
operational experience to the Board as well as
expertise in the TMT and digital sectors. She is
currently Chief Executive Officer of Microsoft UK having
spent nearly three years as the Managing Director of
Vodafone’s UK Consumer Division. Prior to this, Cindy
was an Executive Director of Digital Entertainment at
Virgin Media and held various Senior Executive roles
at The Walt Disney Company.
Cindy holds a BA from Columbia University and
trained at the New York Law School before working
as an attorney in the US and the UK.
Other current appointments: Cindy is Chief Executive
Officer of Microsoft UK and will be appointed as a
Non-Executive Director of WPP PLC with effect from
1 April 2019.
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INFORMA PLC ANNUAL REPORT 2018 Committee membership
Audit
John Rishton (Chairman)
Gareth Bullock
David Flaschen
Greg Lock
Cindy Rose
Nomination
Remuneration
Derek Mapp (Chairman)
Mary McDowell
Stephen Davidson (Chairman)
Gareth Bullock
Stephen Davidson
David Flaschen
Greg Lock
Helen Owers
John Rishton
Cindy Rose
David Wei
Gareth Bullock
Helen Owers
Mary McDowell
David Wei
Helen Owers
Non-Executive Director
Date of appointment: January 2014
Skills and experience: Helen has extensive
international Senior Executive experience within
the Media sector, notably in business information
from her role as President of Global Businesses and
Chief Development Officer with Thomson Reuters.
Helen previously worked as a media and telecoms
strategy consultant at Gemini Consulting and also
has skills in professional publishing having worked at
Prentice Hall. She holds an MBA from IMD Business
School and a BA from the University of Liverpool.
Other current appointments: Helen is a
Non-Executive Director of PZ Cussons plc
and Eden Project International Limited.
Stephen Davidson
Non-Executive Director
Chairman of the Remuneration Committee
David Flaschen
Non-Executive Director
Date of appointment: September 2015
Skills and experience: Stephen brings extensive
media, telecommunications, corporate and financial
market experience to Informa, having been Chief
Financial Officer and then Chief Executive of Telewest,
Executive Chairman of Mecom Group plc and
Vice-Chairman of Investment Banking at WestLB.
Throughout his career, Stephen has held various
positions in both industry and investment banking.
He has also held numerous Chairman and
Non-Executive positions on the boards of
media, telecoms and technology companies.
Stephen holds an MA from the University of Aberdeen.
Other current appointments: Stephen is Chairman of
Rosenblatt plc, Datatec Limited, Actual Experience Plc
and PRS for Music Ltd.
Date of appointment: September 2015
Skills and experience: David has 20 years of executive and
leadership experience in information services, including
roles at Thomson Financial and Dun & Bradstreet.
David has significant expertise in online companies,
having held Non-Executive Directorships at companies
such as TripAdvisor Inc. and BuyerZone.com. He is a
frequent speaker on corporate governance and was
cited as one of 10 “Next Generation of Directors” by
Corporate Board Member Magazine.
A professional football player, David was a founding
member of the Executive Committee of the North
American Soccer League Players Association. He holds an
MBA from the Wharton School, University of Pennsylvania.
Other current appointments: David is a Non-Executive
Director and Audit Committee Chair of Paychex Inc.
John Rishton
Non-Executive Director
Chairman of the Audit Committee
Date of appointment: September 2016
Skills and experience: John brings significant
international experience to Informa. He became
a Non-Executive Director of Rolls-Royce Group plc
in 2007 before being appointed to the position of
CEO from 2011 to 2015. Before joining Rolls-Royce,
he was Chief Executive and President of the Dutch
international retailer, Royal Ahold NV, and, prior to that,
their Chief Financial Officer. John also formerly held the
position of Chief Financial Officer of British Airways plc.
John is a fellow of the Chartered Institute of
Management Accountants.
Other current appointments: John is a Non-Executive
Director and Chairman of the Audit Committee at both
Unilever PLC and Serco Group plc, and a Non-Executive
Director of Associated British Ports Ltd.
Mary McDowell
Non-Executive Director
David Wei
Non-Executive Director
Date of appointment: June 2018
Date of appointment: June 2018
Skills and experience: Mary joined the Board in
June 2018 having previously been a Non-Executive
Director of UBM plc. Mary has experience as a
technology company CEO and has also led both
enterprise and consumer divisions in multinational
companies in the technology industry.
Mary was CEO of Polycom from 2016 until its acquisition
by Plantronics in 2018. She was an Executive Partner
at Siris Capital LLC prior to that. Mary spent nine years
at Nokia, most recently as Executive Vice-President
in charge of Nokia’s Mobile Phones (feature phones)
unit. Before joining Nokia, she served 17 years at
HP-Compaq, including five years as Senior Vice
President and General Manager in charge of the
company’s industry-standard server business.
Other current appointments: Mary is a Non-
Executive Director of Autodesk, Inc. where she
chairs the Compensation Committee.
Skills and experience: David joined the Board in June
2018 having previously served as a Non-Executive
Director at UBM plc. He has extensive experience of
both investing and managing operations in China.
David was CEO of Alibaba.com to February 2011,
leading its listing on the Hong Kong Stock Exchange.
He also held numerous senior positions at Kingfisher
PLC, including CEO of B&Q China, served as Head of
Investment Banking for Orient Securities Co. and held
Non-Executive directorships at HSBC Bank China and
the China Advisory Board of IMI plc.
Other current appointments: David is Chairman
of Vision Knight Capital and holds Non-Executive
positions at PCCW Limited, Zhong Ao Home Group
Limited, OneSmart International Education Group
Limited, Leju Holdings Limited and JNBY Design
Limited. He is an Executive Director of Zall
Development Group Limited.
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Governance
Corporate Governance Report
Corporate governance
Informa PLC is the ultimate holding company of the Group
and is controlled by its Board of Directors. This report has
been prepared in accordance with the 2016 Code and the
Company’s statement of compliance is on page 93.
Corporate governance framework
and reporting structure
This report explains the role and function of the Board. As
required under the 2016 Code, the Board has established three
standing Committees and has delegated certain responsibilities
to them. Details of these responsibilities, and the Committees’
activity during the year ended 31 December 2018, can be found
on the following pages:
Nomination Committee
Audit Committee
Remuneration Committee
Pages 103 to 105
Pages 107 to 112
Pages 113 to 125
The Company has established a governance structure which
enables the Board to focus on the key areas of responsibility
that affect the long-term success of the business:
Board of Directors
The Board develops strategy and leads Informa to achieve long-term success; determines the risks faced by the business; gauges
the level of risk it is prepared to take to achieve its strategy; and ensures that systems of risk management and control are in place.
It gives leadership and governance to the Company as a whole, having regard to the views of Shareholders and other stakeholders.
The Board has reserved certain matters for its own approval (see http://www.informa.com) with others being delegated to
Board or management Committees as appropriate.
Audit Committee
Oversees financial and narrative
reporting; provides assurance on
the effectiveness of internal control,
risk management systems and
audit processes; and reviews
the effectiveness and objectivity
of external and internal auditors.
Nomination
Committee
Leads the process for Board appointments
and succession planning; ensures that
Board and Senior Management have
appropriate skills, knowledge and
experience to operate effectively and
deliver strategy; and reports on diversity.
Remuneration
Committee
Approves the Executive Directors’
Remuneration Policy; sets the
remuneration of the Chairman, Executive
Directors and, from 2019, Senior
Management; and approves annual
and long-term performance
objectives and awards.
Group Chief Executive
Overall responsibility for day-to-day management of the business and implementation of approved strategy
lies with the Group Chief Executive with financial matters managed by the Group Finance Director.
Executive Management Team
Manages all operational aspects of the Group under the direction and leadership of the Group Chief Executive. Membership
comprises both Executive Directors, Managing Directors of the Group’s Operating Divisions and key central Group functions.
Management Committees
Risk Committee Treasury Committee
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INFORMA PLC ANNUAL REPORT 2018 Leadership
Leadership
A.1 The role of the Board
The role of the Board is to provide leadership to the Company
and to deliver Shareholder value over the long term. The Board
sets the Company’s values and standards, making sure that they
align with its strategic aims and the desired business culture.
The Board also ensures that the Company’s obligations to its
Shareholders and other stakeholders, including colleagues,
suppliers, customers and the environment in which the business
operates, are understood.
The Board has overall responsibility for the management and
oversight of the Group and its activities, providing entrepreneurial
leadership within a control framework. It is responsible for
approving the Group’s strategic objectives and ensuring that the
necessary financial and human resources are made available
to meet those objectives. Through the Audit Committee, the
Board also reviews the Company’s risk management and
internal control systems on an ongoing basis.
Regular Board and Committee meetings are scheduled throughout
the year and the Directors ensure that they allocate sufficient time
to discharge their duties effectively. Occasionally, Board meetings
may be held at short notice when Board-level decisions of a time-
critical nature need to be made.
The table below sets out details of each Director’s attendance at
Board meetings during the year ended 31 December 2018 and
changes that took place.
The Board maintains, and annually reviews, a schedule of matters
reserved for its decision, which include but are not limited to:
• approval of the Company’s strategic objectives and
overseeing their delivery;
• assessment and monitoring of the Company’s culture to
ensure alignment with its purpose, values and strategy;
• changes to the structure, size and composition of the Board
following recommendations from the Nomination Committee;
• determining the Remuneration Policy for Directors, the
Company Secretary and, from 2019, Senior Management;
• approval of significant investments/divestments;
• approval of the Company’s full-year and half-year financial
results and the Annual Report and Accounts;
• setting the dividend policy, approval of the interim dividend
and recommendation of the final dividend;
Derek Mapp
Stephen A. Carter1
Gareth Wright
Gareth Bullock
Stephen Davidson2
David Flaschen2,5
Helen Owers2,5
John Rishton2
Cindy Rose5
Greg Lock3,5
Mary McDowell4,5
David Wei4,5
Scheduled
Board meetings
Unscheduled
Board meetings
7/7
7/7
7/7
7/7
7/7
7/7
6/7
7/7
6/7
3/4
3/4
3/4
2/2
2/2
2/2
2/2
2/2
2/2
2/2
2/2
2/2
n/a
n/a
n/a
Audit
Committee
meetings
Remuneration
Committee
meetings
Nomination
Committee
meetings
n/a
n/a
n/a
4/4
n/a
3/4
n/a
4/4
4/4
2/2
n/a
n/a
n/a
n/a
n/a
7/7
7/7
n/a
5/7
n/a
n/a
n/a
2/2
1/2
4/4
1/1
n/a
4/4
1/1
1/1
1/1
1/1
3/4
1/1
1/1
1/1
1. Stephen A. Carter ceased to be a member of the Nomination Committee on 27 February 2018.
2. Stephen Davidson, David Flaschen, Helen Owers and John Rishton were appointed to the Nomination Committee on 25 May 2018.
3. Greg Lock was appointed as Deputy Chairman of the Board and a member of the Audit and Nomination Committees on 15 June 2018.
4.
5.
Mary McDowell and David Wei were appointed as Non-Executive Directors of the Board and as members of the Nomination and Remuneration Committees
on 15 June 2018.
Cindy Rose, Greg Lock, Mary McDowell and David Wei missed one Board meeting each last year due to prior commitments. Due to extenuating personal
circumstances, Helen Owers was unable to attend one Board meeting and two Committee meetings during the early part of the year. David Flaschen missed
one Committee meeting during the year due to a prior commitment.
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Governance
Leadership continued
Board activity in 2018
During the year ended 31 December
2018, particular areas considered by
the Board, either directly or through
its standing Committees, included:
Operational performance
• Establishment of the
Accelerated Integration Plan
• Divisional performance and
structure post acquisition
Strategy
• Group and divisional strategy
• Acquisition of UBM
• Other acquisition opportunities
• Competitive landscape
• External factors potentially
impacting the businesses
People and culture
• Group culture post acquisition
• Talent and skills development
• Charitable activities
• Gender pay reporting and
mitigating actions
• Sustainability pillars,
indices and benchmarks
Finance
• Three-year plan
• Dividend policy post acquisition of
UBM and dividend payments in 2018
• Establishment of Euro Medium
Term Notes (EMTN) Programme
and Bonds issuance
• Group debt considerations
• Pension considerations
Shareholder relations
• Consideration and approval
of the 2017 Annual Report
• Shareholder engagement and feedback
relating to the annual and half-year
results presentations, the AGM, the
revised Directors’ Remuneration
Policy and proxy agency reports
Governance
• Board size, structure
and composition
• Committee membership
• Conflicts of interest
• Outcome of the internal
Board evaluation
• Succession planning for the
Board and Senior Management
• Governance changes as a
result of the 2018 Code and
related regulations
Risk management and compliance
• Board’s risk appetite and
tolerance statement
• Principal risks, mitigating
•
actions and controls
Impact of GDPR and data
protection legislation
• Renewal of insurance cover
• appointment, reappointment and removal of the Company’s
external auditor (subject to Shareholder approval);
• setting the Company’s risk management strategy and
maintaining a sound system of internal controls; and
• determining appropriate methods of engagement with
A.3 The Chairman
The Company’s Chairman, Derek Mapp, was deemed to be
independent on appointment and continues to be considered
so by the Board. Further details on Derek’s qualifications
and experience can be found in his biography on page 94.
the workforce.
Board priorities for 2019
The Board will continue to monitor the Group’s financial
performance and the performance and progress of each
Division, while overseeing completion of the combination and
maintaining a focus on the Group’s culture and its engagement
with, and support for, colleagues. As in previous years, and in
compliance with the 2018 Code, Shareholder relations, risk
management and governance will continue to be priorities
for the Board.
A.2 Division of responsibilities
The roles of Chairman and Group Chief Executive are exercised
by separate individuals and have clearly defined responsibilities.
The division of responsibilities between the Chairman, Deputy
Chairman, Group Chief Executive, Senior Independent Director
and the Non-Executive Directors is set out in writing and reviewed
by the Board on a regular basis. It is available on our website.
A.4 Non-Executive Directors
The Board includes nine independent Non-Executive Directors
(excluding the Chairman) who help develop and constructively
challenge proposals on strategy. They bring strong, independent
judgement, knowledge and experience to the Board’s deliberations
and have been selected for their expertise. Their views carry
significant weight in the Board’s decision-making process.
As Senior Independent Director, Gareth Bullock is available
for Shareholders to contact should the usual channels of
communication be inappropriate or have broken down.
No such concerns were raised by Shareholders during the
year under review. He is also available for the Chairman
and other Directors to discuss any concerns which may
arise and ensures that the Non-Executive Directors meet
to assess the Chairman’s performance annually.
The Non-Executive Directors (including the Chairman) also hold
meetings without the presence of the Executive Directors.
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INFORMA PLC ANNUAL REPORT 2018 Non-Executive Directors
• Constructively challenge and help develop
proposals on strategy
• Scrutinise the performance of the Executive
Management Team in meeting agreed goals
and objectives
• Monitor the reporting of performance
• Satisfy themselves on the integrity of
financial information
• Ensure that financial controls and systems of
risk management are robust and defensible
• Determine appropriate levels of remuneration
for the Executive Directors, the Chairman and,
from 2019, Senior Management
• Play a primary role in succession planning and appointing
and, where necessary, removing Executive Directors
• Meet without the Executive Directors present
• Attend meetings with major Shareholders to discuss
governance and strategy
Chairman
• Leads the Board and sets the tone and agenda,
promoting a culture of openness and debate
• Ensures the effectiveness of the Board and that
Directors receive accurate, timely and clear information
• Ensures effective communication with Shareholders
• Acts on the results of the Board performance
evaluation and leads on the implementation of any
required changes
• As Chairman of the Nomination Committee, leads the
consideration of any changes to the Board
• Holds periodic meetings with Non-Executive Directors
without the Executive Directors present
Company Secretary
• Responsible for advising the
Board, through the Chairman,
on all governance matters
• All Directors have access
to the Company Secretary’s
advice and service
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Group Chief Executive
• Runs the Company and is in direct charge
of the Group day to day
• Accountable to the Board for the Group’s
operational performance
• Responsible for implementing the Company’s
strategy, including driving performance and
optimising the Group’s resources
• Primary responsibility for managing
the Group’s risk profile, identifying and
executing new business opportunities, and
management development and remuneration
Senior Independent Director
• Available to meet Shareholders on request
• Ensures that the Board is aware of any
Shareholder concerns
• Assists where Shareholder issues are not
resolved through existing mechanisms for
investor communications
• Acts as a sounding board for the Chairman and,
if and when appropriate, serves as an intermediary
for the other Directors
• Leads the annual evaluation of the
Chairman’s performance
Group Finance Director
• Accountable to the Board for the Group’s financial performance
• Responsible for raising the finance required to fund the
Group’s strategy, servicing the Group’s financing and
maintaining compliance with its covenants
• Maintains a financial control environment capable of
delivering robust financial reporting information to indicate
the Group’s financial position
• Leads the Finance functions and has day-to-day responsibility
for Finance, Tax, Treasury and Internal Audit
• Chairs key internal committees such as
the Risk Committee and the Treasury Committee
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report
Governance
Effectiveness
Effectiveness
B.1 The composition of the Board
Informa’s Board consists of the Chairman, two Executive
Directors and nine independent Non-Executive Directors.
Their biographies, including skills, qualifications, experience
and external commitments, are set out on pages 94 and 95.
As part of its ongoing review on Board effectiveness, the
annual evaluation considers whether each Non-Executive
Director continues to be independent and to appropriately
challenge management, as well as each other, in Board and
Committee meetings.
Each of the Non-Executive Directors is able to offer an external
perspective on the business allowing constructive challenge and
scrutiny. Following the 2018 evaluation, the Board considers that
each of the Non-Executive Directors continues to be independent
in character and judgement, has the required experience and
is of the stature necessary to perform his or her role as an
independent Director.
Directors’ conflicts of interest
In accordance with the Articles of Association (Articles) of the
Company, the Board is able to authorise any matter that would
otherwise result in a Director breaching his or her duty to avoid
a conflict of interest. The Board has adopted procedures which
require Directors to notify the Chairman and the Company
Secretary of all new external interests and any actual or
perceived conflicts of interest that may affect their role as a
Director of the Company. As part of this process, the Board will:
• consider each conflict situation separately according to the
particular situation;
• consider the conflict situation in conjunction with the Articles;
• keep records and Board minutes on authorisations granted
by Directors and the scope of any approvals given; and
• regularly review conflict authorisations.
In particular, the Board has previously noted and approved
the following:
•
John Rishton is a Director of Majid Al Futtaim, a company
that takes part in Global Exhibitions’ Cityscape Global event.
• David Flaschen previously worked with adviser Bruce Fador,
who now acts as a consultant to an Informa-owned finance
business in the US.
• Cindy Rose is Chief Executive Officer at Microsoft UK, a key
Informa supplier and customer.
• Each of the Directors has a shareholding in the Company,
none of which is considered significant. Full details of the
Directors’ shareholdings are set out in the Directors’
Remuneration Report on pages 113 to 125.
B.2 Appointments to the Board
The Nomination Committee leads the process in relation to Board
appointments and their report follows on pages 103 to 105.
All Non-Executive Directors are appointed for an initial three-
year term subject to their election by Shareholders at the first
AGM following their appointment. The expectation is that two
further three-year terms will follow.
With the exception of Cindy Rose, none of the independent
Non-Executive Directors have served for more than five years.
As of March 2019, Cindy Rose has served on the Board for six
years and her continued appointment was subject to particular
review during the 2018 Board evaluation process, as required
by the 2016 Code. The Nomination Committee concluded that
Cindy continued to show commitment to the Company and
was pleased to recommend her reappointment for a further
three-year term.
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INFORMA PLC ANNUAL REPORT 2018 B.3 Commitment
As required by the 2016 Code, the Nomination Committee, on
behalf of the Board, reviewed the ability of all Non-Executive
Directors to allocate sufficient time to the business in order
to discharge their responsibilities effectively.
B.5. Information and support
The Directors regularly receive written briefings on the Group’s
business and market environments and gain insights and
updates through meetings with Senior Executives at every
scheduled Board meeting.
The letters of appointment for the Chairman and Non-Executive
Directors set out the anticipated time commitment, being an
average of 15–18 days a year. In addition, Directors are expected
to allocate sufficient time to meet the expectation of their roles,
including attending meetings, spending time in the business and
ongoing development requirements.
All Directors are required to disclose any additional appointments
or other significant commitments. Details of these can be found
in the biographies on pages 94 and 95. In particular it should be
noted that it was announced in December 2018 that Derek Mapp
would be stepping down from his role as Chairman and a Director
of Huntsworth plc with effect from 6 March 2019.
B.4. Development
All Directors receive a formal induction to the Group on first
joining the Board. The programme is designed to provide new
Directors with a good understanding of Informa’s business
structure, Operating Divisions and markets. They visit various
Informa offices and forums to meet colleagues and management
team members. Together with meetings with the Executive
Directors and members of the Executive Management Team,
the programme equips new Directors to become effective
Board members from the outset.
Following the acquisition, three members of the former UBM
Board were appointed as Directors of the Company: Greg Lock,
Mary McDowell and David Wei. All three had the advantage of
learning about the Informa business during the detailed due
diligence process undertaken during the acquisition process.
Even so, each completed a formal induction in July 2018 when
they spent two days attending meetings and receiving
presentations from the various Group Divisions. They also held
private meetings with members of the Executive Management
Team, including the Company Secretary, to gain an insight into
the Company’s investor relations, legal and financial functions,
and other operational aspects.
The Board agenda is set by the Chairman, in conjunction with
the Group Chief Executive and the Company Secretary. Each
scheduled meeting includes a Management Report delivered
by the Group Chief Executive, a financial update from the
Group Finance Director and regular updates on the activities of
various standing and management Committees. Presentations
are also given on matters of topical interest, and discussions
centre on strategic proposals, major acquisitions, disposals
and developments, the investor relations programme, and
legal and governance matters.
Before meetings, Board and Committee members receive
papers with the appropriate level of detail in order to inform
them of developments inside and outside the Group that may
impact, or have impacted, the business. Papers are circulated
in advance of Board and Committee meetings using a secure
Board portal.
The Board has adopted a policy which allows any Director to seek
independent professional advice on any matters relating to the
Company’s affairs at the Company’s expense. Additionally, all
Directors have access to the advice and services of the Company
Secretary who liaises frequently with all Board members and
ensures good information flows within the Board, its Committees
and Senior Management.
B.6 Evaluation
A performance evaluation of the Board, its Committees and
its individual members is carried out annually to ensure that
each remains effective.
During 2018, an internal evaluation was led by the Chairman,
Derek Mapp. This was carefully timed to ensure that the
contributions of the three former UBM Directors were
meaningful and allowed for experiences on the expanded
Board to be taken into consideration.
In this growing and evolving business, the Company Secretary
and Chairman regularly review the need for further training
and take into consideration any areas of development identified
during the annual Board evaluation.
The Chairman met with each of the Board members
individually to obtain their views on the Board and its
effectiveness with discussions focusing on Board structure
following the acquisition of UBM, meeting content and
preparedness, informal meetings and Board Committees.
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Governance
Effectiveness continued
No areas of major concern were raised during the evaluation
and its findings were presented to the Board and actions
agreed against the key themes. The evaluation concluded
that the Board continued to work well, with a good quality
of challenge and debate. The Board agreed areas of focus
for 2019, which included:
Recommendations by Independent
Audit in 2017
Appointment of an additional
Non-Executive Director who has
the skills and experience to meet
the Group’s future strategic needs
Succession planning at all levels
• continual assessment of the structure of the Board.
Although the Board’s skill-set has been enhanced by the
appointment of three UBM Directors, its relatively large
size should be kept under review to ensure that meetings
continue to be run effectively;
further increasing the Directors’ contact with divisional
colleagues to enhance their understanding of the business
and assess talent;
increasing the frequency of Non-Executive Director only
meetings and discussions;
•
•
• stakeholder engagement, and in particular, how to enhance
the work already being done on colleague engagement; and
• giving greater consideration to succession planning for the
Board and Senior Management by the Nomination Committee.
Progress against these focus areas will be detailed in the 2019
Annual Report.
As required by the 2016 Code, an external evaluation is carried out
every three years. The last one was performed by Independent
Audit Limited in 2017 and details of the process are shown in the
2017 Annual Report. The recommendations made have been
reviewed during the year and progress has been made against
the key themes:
Further development on
Informa’s approach to risk
and risk management
More time dedicated to discussing
innovation and strategy
Evolution of the management
structure to meet the needs
of the Group as it grows in
size and complexity
Consider the level of information
required by the Board to facilitate
meaningful and effective discussion
on operational and strategic issues
Action taken
Three UBM Directors appointed
to the Board, bringing additional
knowledge and experience of
the US and Asian markets.
An in-depth discussion was held
on the roles and responsibilities
of the Executive Directors and
Senior Management. Short and
long-term succession plans were
reviewed with further consideration
to be undertaken in 2019.
Comprehensive risk reports have
been developed for each of the
Group’s principal risks and overseen
by the Risk Committee, with key
risk indicators showing the status
of internal controls.
Board meetings have been
attended by divisional Senior
Management, allowing the Board
an opportunity to discuss strategy
at an operational level and to see
innovation in action. Board dinners
have been useful, providing an
informal setting to share ideas
and a broader discussion on
strategy without the formal
constraints of the boardroom.
Talent management has been
a key focus for the Executive
Management Team. The revised
operating structure post acquisition
has led to the creation of a new
Informa Tech Division and to
the appointment of five new
colleagues to our Executive
Management Team.
The Board has reviewed the
quality and content of Board
and Committee papers. In general,
these are viewed as informative
without being overly granular
although continued improvement
is still possible.
B.7 Re-election
The outcome of the performance evaluation of the Board,
and the review of the Non-Executive Directors’ commitment
to their roles, concluded that each Director remains effective
and committed, and is able to devote the required time to
their role. In particular, the additional time and diligence given
by all members of the Board during the acquisition of UBM
demonstrated their dedication to the Company and their
ongoing flexibility.
With the exception of Greg Lock, all Directors will stand for
election or re-election as appropriate at the 2019 AGM in
accordance with the Articles and the 2016 Code.
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INFORMA PLC ANNUAL REPORT 2018 Nomination Committee Report
Nomination Committee Report
The Committee’s terms of reference, which are reviewed
annually and approved by the Board, most recently
in December 2018, are available on our website:
http://www.informa.com.
A verbal report is given to the Board on the outcome of
Committee meetings and all Directors receive the minutes
of Committee meetings for information.
The Committee met four times during the year. The Group
Chief Executive, Company Secretary and former Director
of Talent & Transformation attended meetings by invitation
where appropriate.
Membership and attendance
Members of the Committee during the year, and to the date
of this report, are:
Members
Derek Mapp (Chairman)
Gareth Bullock
Stephen Davidson
David Flaschen
Greg Lock
Mary McDowell
Helen Owers
John Rishton
Cindy Rose
David Wei
Stephen A. Carter1
Committee
member since
10 March 2008
24 July 2014
25 May 2018
25 May 2018
15 June 2018
15 June 2018
25 May 2018
25 May 2018
24 July 2014
15 June 2018
1 January 2015
Attendance
during 2018
4/4
4/4
1/1
1/1
1/1
1/1
1/1
1/1
3/4
1/1
1/1
1.
Stephen A. Carter ceased to be a member of the Nomination Committee
on 27 February 2018.
Full biographies of the Committee members and their attendance
at all meetings during the year are on pages 94 to 97.
103
Derek Mapp
Chairman of the Nomination Committee
Dear Shareholder
I am pleased to present the Report of the Nomination Committee
(the Committee) for the year ended 31 December 2018.
Responsibilities
The Committee has been tasked by the Board to continuously
assess and review how the Board is structured, consider whether
any changes are required, and monitor the engagement and
retainment of talent across the Group, focusing on the following
key areas:
• Reviewing the size, structure and composition of the Board;
identifying and recommending suitable candidates for Board
appointments; the reappointment and the annual re-election
of Directors by Shareholders; and their membership of the
Board’s standing Committees.
• Ensuring appropriate succession plans are in place for the
Board and reviewing similar plans for Senior Executives.
• Reviewing colleague engagement activities in line with
legal requirements such as gender pay gap reporting, and
monitoring diversity and inclusion initiatives across the Group.
• Assisting the Chairman with implementing the annual Board
evaluation process, ensuring that an externally facilitated
evaluation is performed at least every three years.
• Reviewing and approving the Committee’s disclosures in
the Annual Report and reviewing the Committee’s terms
of reference on a regular basis.
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Nomination Committee Report continued
The Committee made these additional recommendations
to the Board during the year and to the date of this report:
•
the appointment of Stephen Davidson, Helen Owers,
David Flaschen and John Rishton to the Nomination
Committee with effect from 25 May 2018;
• reappointment of Stephen Davidson for a second three-year
term with effect from 1 September 2018;
• reappointment of David Flaschen for a second three-year
term with effect from 1 September 2018;
• reappointment of Cindy Rose for a third three-year term
with effect from 1 March 2019; and
• election or re-election of continuing Directors at the AGM.
Before recommending resolutions to reappoint any Non-
Executive Directors to the Board, or the election or re-election
of Directors at the AGM, the Committee assesses their
continued independence, the time commitment required and
whether the continued appointment would be in the best
interests of the Company. It gives detailed consideration to
each Non-Executive Director’s contribution to the Board and
its Committees, together with the overall balance of knowledge,
skills, experience and diversity on the Board as a whole.
Cindy Rose will have served for more than six years at the time
of the 2019 AGM. In considering her reappointment to the
Board, and her re-election by Shareholders, the Committee gave
detailed consideration to the expertise she brings to the Board
and the Committees on which she serves. The Committee
unanimously concluded that Cindy Rose continued to bring
expertise in technology and digital media to the Board,
remained independent in character and judgement and
continued to discharge her responsibilities effectively.
The Committee also believes that each of the remaining Non-
Executive Directors continues to demonstrate commitment
to their role as a member of the Board and its Committees,
discharges their duties effectively and makes valuable
contributions to the leadership of the Company for the
benefit of all stakeholders. Greg Lock will retire at the conclusion
of the 2019 AGM and will not therefore be seeking election
by Shareholders. Accordingly, the Committee recommended to
the Board that resolutions to elect or re-elect each continuing
Non-Executive Director be proposed as appropriate to the AGM
alongside the resolutions to re-elect the Executive Directors.
Biographies for each Director can be found on pages 94 and 95.
Key activities during 2018
Board and Committee membership, independence
and re-election
This year, the Committee has focused on the benefits of
appointing former UBM Directors to the Board following the
combination. In addition to the continuity of knowledge these
appointments would bring, the Committee considered the areas
of experience which would most benefit the combined Group,
and agreed that:
• knowledge of the US and Chinese markets would be
highly beneficial and help to further internationalise
Board membership;
• expertise in digital media, technology and analogous
•
sector/content would be beneficial; and
finance and capital markets experience would be helpful
since the Group would be looking to refinance over the
next 12 months.
The Committee considered the attributes offered by each of
the UBM Non-Executive Directors and, noting that each offered
excellent and relevant experience, made the following
recommendations to the Board:
• appointment of Greg Lock as Deputy Chairman of the Board
and as a member of the Audit and Nomination Committees;
• appointment of Mary McDowell as a Non-Executive Director
and as a member of the Nomination and Remuneration
Committees; and
• appointment of David Wei as a Non-Executive Director and as
a member of the Nomination and Remuneration Committees.
Each appointment was effective from completion of the
combination. Details of each Director’s professional experience
is shown in their biographies on pages 94 and 95, and an
overview of the entire Board’s skill-set is set out below.
Board balance by experience and skills
Experience and skills
Media and Technology sector
Business-to-business operations
US market experience
Digital and technology
Financial management
Governance and risk control
Marketing engagement
M&A
International experience
PLC expertise
104
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INFORMA PLC ANNUAL REPORT 2018
Directors do not participate in any debate or decision about
their own reappointment.
Board balance by independence
Executive Directors – 17%
Independent
Non-Executive
Directors – 83%
Succession planning
The Committee keeps succession planning for the Board and the
Executive Management Team under review. It specifically considers
the succession plans for the Chairman and Executive Directors, and
monitors talent and performance management of Senior Executives
across the Divisions.
The Committee undertook an in-depth discussion regarding
the performance of the Executive Management Team and
other Senior Management during the year, particularly in
relation to the combination with UBM, and reviewed both
short and long-term succession plans.
Diversity
Informa aims to recognise diversity in its broadest sense,
including but not limited to gender, age, disability, ethnicity,
education and social background, and to uphold a working
environment that is welcoming, stimulating, based on respect
and providing opportunity to all.
The Board continues to support the findings of the Hampton-
Alexander Review on women’s representation in senior
leadership positions, and the Parker Review on the ethnic
diversity of Boards. The Group Chief Executive is a member of
the 30% Club, an international organisation working to increase
the representation of women and diverse talent at all levels, and
the Group is also involved in the organisation of the 30% Club’s
annual flagship event. The appointment of Mary McDowell to the
Board has increased the number of women on our Board to three
and increased the percentage of female Board members to 25%
(2017: 22%). The Board’s international breadth also developed
with the appointment of both Mary McDowell and David Wei.
Board balance by gender
Female – 25%
Male – 75%
Informa believes that colleagues are amongst our most
important assets and we set great store by difference and
diversity. There is a focus throughout the business on attracting,
supporting and engaging colleagues wherever they work, and
maintaining a culture of openness and respect. In turn, the
Committee receives updates and monitors the application of
talent and colleague-focused policies in the wider Group.
The Committee believes that diversity and maintaining a balanced
mix of talent at all levels brings competitive advantage to the
Group and supports the business’s future growth and potential.
Informa operates an Apprenticeship Scheme and a Graduate
Fellowship Scheme as an additional way of attracting early-career
talent. Informa is accredited by the UK Living Wage Foundation
and UK colleagues are paid at least the independently calculated
Living Wage, above the Government’s National Minimum Wage,
which is regularly audited.
The Group will shortly publish the second of its Colleagues and
Pay reports, which include the difference between the average
pay of UK female and male colleagues as required under UK
legislation. As at April 2018, the Group’s UK gender pay gap
stood at 21.5% (2017: 23.2%) compared with a UK national
average pay gap of 17.9% (2017: 18.4%). The bonus pay gap was
37.3% (2017: 17.6%) after a material increase in the amount of
female and male colleagues participating in a bonus scheme
in one of our businesses.
Informa continues to undertake a range of initiatives designed
to ensure that all colleagues can develop their careers on an
equal basis and have opportunities to participate and engage
fully in work life at the Group. For more information on some
of these, see pages 30 to 36 and the Colleagues and Pay reports
available on the Informa website.
Board and colleague balance by gender:
Colleagues
Senior
Leadership
Team
Directors
Average over 2018
Average over 2017
F 6,649
M 4,548
F 80
M 170
F 3
M 9
F 59%
M 41%
F 32%
M 68%
F 25%
M 75%
F 4,220
M 3,305
F 46
M 123
F 2
M 7
F 56%
M 44%
F 27%
M 73%
F 22%
M 78%
Effectiveness
The review into the Committee’s effectiveness was carried out
as part of the internal Board evaluation. I am pleased to report
it found that the Committee continued to operate effectively
and that the inclusion of all Non-Executive Directors in its
membership had been welcomed. Nevertheless, the Board felt
that further work could be undertaken on succession planning
and talent management and this will be the key focus for the
Committee in 2019.
Derek Mapp
Chairman of the Nomination Committee
6 March 2019
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Governance
Accountability
Accountability
C.1 Financial and business reporting
The Directors are responsible for preparing the Annual Report
and Accounts. The Statement of Directors’ Responsibilities
can be found on page 133 and includes an explanation of how
the Directors ensured that the Annual Report for the year
ended 31 December 2018 is fair, balanced and understandable.
Details of the business model and how the Company generates
value for stakeholders are set out on pages 20 and 21 of the
Strategic Report.
C.2 Risk management and internal control
The Board is responsible for ensuring that Informa maintains a
sound system of internal controls and reviewing its effectiveness.
It recognises that risks must be taken to achieve the Company’s
business objectives and has mandated a responsible and
balanced approach to managing risk through its risk appetite
and tolerance statement.
Informa’s system of internal controls is designed to manage
risks by addressing causes and mitigating their potential impact.
It can only provide reasonable, rather than absolute, assurance
against material misstatement or loss, a concept that recognises
that the cost of control procedures should not exceed their
expected benefits.
Responsibility for the day-to-day management of the Group
rests with the Group Chief Executive, supported by the
Executive Management Team. The Executive Management
Team includes the CEO of each Division together with key Senior
Management from Group functions. During 2018 the Executive
Management Team met bi-weekly by phone and bi-monthly in
person to consider the implementation of Group strategies,
plans and policies, to monitor operational and financial
performance and to manage risks. As far as possible, each
Division is given operational autonomy within an internal
control framework. Details of the activities of the Operating
Divisions are set out on pages 38 to 59.
As illustrated in the Risk Management section on page 62,
the Board has adopted a risk management framework for
identifying, evaluating and managing the significant risks
faced by the Group which is overseen by the Risk Committee.
Informa’s internal control and risk management systems and
procedures around financial reporting include the following:
106
• Business planning – each Operating Division produces
and agrees an annual business plan against which the
performance of the business is regularly monitored.
• Financial analysis – each Division’s operating profitability
and capital expenditure are closely monitored. Management
incentives are tied to annual and longer-term financial
results. These results include explanations of variance
between forecast and budgeted performance and are
reviewed in detail by the Executive Management Team
on a monthly basis. Key financial information is regularly
reported to the Board.
• Group Authority Framework – the framework provides
clear guidelines on approval limits for capital and operating
expenditure and other key business decisions for all Divisions.
• Risk assessment – risk assessment is embedded into the
operations of the Group and reports are provided to the
Executive Management Team, Risk Committee, Audit
Committee and the Board.
• Compliance – compliance controls are based on the
US Federal Sentencing Guidelines.
The Board regularly reviews the effectiveness of the Group’s
system of internal controls, including financial, operational
and compliance controls, risk management and the Group’s
high level internal control arrangements.
The Audit Committee has been charged by the Board with
oversight of these controls and has considered the following
factors in determining the overall effectiveness of the Group’s
risks and associated control environment:
• The Risk Committee, a sub-committee of the Audit Committee,
reports on the effectiveness of risk management, governance
and compliance activity within the Group.
• The Audit Committee approved a schedule of work to be
undertaken by the Group’s Internal Audit team during the
year. It receives reports on any issues identified during
these audits and follows up on the implementation of
management action plans, ensuring any identified
control weaknesses are addressed.
C.3 Audit Committee and auditors
The Audit Committee Report, including details on the
Company’s auditors, follows.
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INFORMA PLC ANNUAL REPORT 2018 Audit Committee Report
Audit Committee Report
John Rishton
Chairman of the Audit Committee
Dear Shareholder
I am pleased to present the report of the Audit Committee
(the Committee) for the year ended 31 December 2018.
Responsibilities
The Committee’s key responsibilities continue to be to:
• review the integrity of the Group’s financial statements
and reporting;
• review and monitor the effectiveness of the Group’s risk
management programme and internal control procedures;
• oversee the relationship with the external auditor including
appointments, qualifications, independence, fees and
performance; and
• review the effectiveness of the Internal Audit function and
the annual Internal Audit plan
The Committee’s terms of reference, which are reviewed annually
and approved by the Board, most recently in December 2018, are
available on our website: http://www.informa.com.
Membership and attendance
Members of the Committee during the year, and to the date
of this report, are:
Members
Committee
member since
Attendance
during 2018
John Rishton (Chairman)
1 September 2016
Gareth Bullock
David Flaschen
Greg Lock
Cindy Rose
1 January 2015
1 October 2015
15 June 2018
1 August 2013
4/4
4/4
3/4
2/2
4/4
Full biographies of the Committee members and their attendance
at all meetings during the year are set out on pages 94 to 97.
The Committee continues to be entirely comprised of
independent Non-Executive Directors, with Greg Lock joining,
on the recommendation of the Nomination Committee, following
his appointment to the Board in June 2018. Greg has an in-depth
knowledge of the technology, software and computer services
industry having held a number of senior roles in the UK, Europe
and US for IBM, as well as board memberships of both listed and
private companies.
All members of the Committee are independent in judgement
and mindset. Both the Committee and the Board are satisfied
that the Committee’s members have the broad commercial
knowledge and competence in the business-to-business
information services market and vertical industries in which
Informa operates. Each also offers a relevant mix of business
and financial experience that positions them to effectively
discuss, challenge and oversee critical financial matters and
fulfil their responsibilities. For the purposes of the 2016 Code,
I have been deemed to meet the specific requirement of
having significant, recent and relevant financial experience.
There were four meetings in 2018, structured to allow a full,
open and robust investigation into key accounting, audit and
risk issues relevant to the Group.
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Audit Committee Report continued
All members of the Board have an open invitation to attend
Committee meetings. Members of the Senior Management
Team, including the Chief Financial Officer, the Head of Group
Finance, the Head of Internal Audit and the General Counsel
& Company Secretary attend each meeting together with
representatives of the external auditor. When appropriate,
the Head of Group Tax, Head of Group Risk, Head of Group
Compliance and the Group Treasurer are also invited to attend
to facilitate information-sharing and discussion. Twice a year,
Committee meetings conclude with private meetings between
the members and the external and internal auditors without
management being present.
In addition, I hold regular meetings with the Board Chairman,
the Group Chief Executive and the Group Finance Director,
as well as other members of management to obtain a good
understanding of issues affecting the Group and to identify
matters which require meaningful discussion at Committee
meetings. I also meet the external audit partner and Head
of Internal Audit privately to discuss any matters they wish
to raise or concerns they may have.
Training and external advice
As noted in the Corporate Governance Report on page 101, all
new members of the Board and the Committee follow a formal
induction programme on appointment, to provide them with
Activities during the year
The Committee performed the following activities to the date of this report:
Financial reporting Considered the accuracy and integrity of the Group’s full-year and half-year financial results and the Annual Report and Accounts
Assessed whether the Annual Report and Accounts and half-year press release were fair, balanced and understandable
Reviewed the opinions of management and the external auditor on the carrying values of the Group’s assets
Reviewed the information and underlying assumptions in support of the Viability Statement and the going concern assessment for the
18-month period to 31 December 2020
Discussed different presentational options for the Group’s financial statements following the combination with UBM
Considered key accounting matters and new accounting standards
Reviewed non-financial KPIs relevant to the Group
Considered the FRC thematic review of alternative performance measures
External Audit
Approved the external auditor’s audit plan for the Group’s 2018 financial statements and associated audit fee schedule including a review of
the scope of work subsequent to the acquisition of UBM and a review of the key risks
Reviewed and approved non-audit services and related fees payable to the Group’s external auditor
Reviewed external auditor effectiveness including confirmation of independence
Reviewed the external auditor’s report on the 2017 full-year and 2018 half-year financial statements
Assessed the materiality levels applied to the financial statements by the external auditor
Internal Audit
Reviewed and approved the annual Internal Audit plan
Risk management
and internal
controls
Reviewed the work done by Internal Audit and monitored the subsequent actions
Considered and approved the structure of a revised Internal Audit function following the acquisition of UBM
Reviewed the effectiveness of Internal Audit
Continued monitoring the implementation of the new enterprise resource planning system across shared service centres
Reviewed the adequacy and appropriateness of the Group’s system of controls and its effectiveness, with relevant input from the
Company’s internal and external auditors
Reviewed work undertaken by the Risk Committee and the Governance Risk sub-committee
Reviewed risk appetite and tolerance, the Group’s principal risks and the material controls in place to mitigate those risks
Managed risks following the acquisition of UBM and streamlining processes for the new combined Group
Reviewed IT risk and the appointment of a Chief Information Security Officer responsible for cyber security and technology risk
Reviewed tax, treasury and other risks relating to the increased size and complexity of the Group following the acquisition of UBM
Corporate
Governance
Reviewed fraud and fraud reporting across the Group including cyber attacks
Reviewed reports on the Group’s whistleblowing, anti-bribery and corruption procedures
Other key matters
considered
Reviewed the Group treasury policy
Reviewed the Group tax strategy
Considered the outcome of the annual effectiveness review and updated the Committee’s terms of reference
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INFORMA PLC ANNUAL REPORT 2018 detailed information about the Group. Directors are given
updated information on legal and governance requirements
on an ongoing and timely basis. Members of the Committee are
able to obtain training at the Company’s expense on any legal
or accounting requirements required to carry out their roles.
The Committee’s terms of reference also allow members of the
Committee to obtain independent legal and professional advice at
the Company’s expense. No such advice was obtained during 2018.
incorporated financial statements provide a fair, balanced and
understandable assessment of the Group’s financial reporting.
In approaching this, the Committee assesses whether suitable
accounting policies have been adopted. It also considers
accounting papers prepared by management that provide
details on the main financial reporting judgements and on the
approach taken to ensure that the Annual Report as a whole is
fair, balanced and understandable.
Financial reporting
At the request of the Board, the Committee continues to review
the content and tone of the preliminary results announcement,
Annual Report and Accounts and the half-year financial results.
Drafts of the Annual Report are reviewed by the Committee
Chairman and the Committee as a whole prior to formal
consideration by the Board.
Fair, balanced and understandable reporting
As in previous years, the Committee has given significant time
and attention to ensuring that this Annual Report and the
The Committee considers how the overall position and
prospects of the Group are disclosed, in particular:
• whether the overall message of the narrative reporting is
consistent with the primary financial statements, the
industry as a whole and the wider economic environment;
• whether the Annual Report is consistent with messages already
communicated to investors, analysts and other stakeholders;
the consistency of the Strategic Report and the financial
statements; and
the linkage between the Company’s performance, business
model and strategy.
•
•
Significant judgement areas
The critical accounting judgements and key accounting matters considered by the Committee in relation to the financial statements
during the year ended 31 December 2018 are set out below:
Valuation of
separately
identifiable
intangible assets
To determine the value of separately identifiable intangible assets on a business combination, and deferred tax on these intangibles, the
Group is required to make judgements when using valuation methodologies. These include the use of discounted cash flows, revenue
forecasts and estimates for the useful economic lives of intangible assets.
There are significant judgements involved in assessing what amounts are recognised as the estimated fair value of assets and liabilities
acquired through business combinations; in particular the amounts attributed to separate intangible assets such as titles, brands, acquired
customer lists and associated customer relationships. These judgements impact the amount of goodwill recognised on acquisitions. Any
provisional amounts are subsequently finalised within the 12-month measurement period, as permitted by IFRS 3. In 2018 the significant
judgements are in relation to the acquisitions of UBM plc and ICON Advisory Group, Ltd.
Measurement
of retirement
benefit
obligations
Impairment
of assets
Contingent
consideration
The Group has built up considerable knowledge of these valuation techniques, and for major acquisitions, defined as when consideration is
£75m or above, the Group also considers the advice of third party independent valuers to identify and calculate the valuation of intangible
assets arising on acquisition. Details of acquisitions in the year are set out in Note 18.
The measurement of the retirement benefit obligation and surplus involves using a number of assumptions. The most significant of these
relate to the discount rate, the rate of increase in salaries and pension and mortality assumptions. Note 34 details the principal assumptions
which have been adopted following advice received from independent actuaries. It also provides sensitivity analysis with regard to changes
to these assumptions.
Identifying indicators of asset impairment involves estimating future cash flows based on a good understanding of the value drivers behind
the asset. At each reporting period, an assessment is performed to determine whether there are any such indicators of impairment, which
involves considering the performance of our businesses, any significant changes to the markets in which we operate and future forecasts.
For impairment testing purposes, goodwill is allocated to the specific groups of cash generating units (CGUs) that are expected to benefit from
the goodwill. When there are changes in business structure, judgement is required to identify any changes to the CGU groups, taking account
of the lowest level of independent cash inflows being generated, among other factors.
The Group has considered a number of assumptions in performing impairment reviews of assets, which are set out in Note 16. The
determination of whether assets are impaired requires an estimation of the value in use of the CGU groups to which assets have been
allocated, except where a fair value less costs to sell methodology is applied. The value in use calculation requires the Group to estimate the
future cash flows expected to arise from each CGU group, using three-year projections and determining a suitable discount rate to calculate
present value and the long-term growth rate. The Directors are satisfied that the Group’s CGU groups have a value in use in excess of their
Balance Sheet carrying value. The sensitivities considered by the Directors for CGUs that have less headroom are described in Note 16.
When the consideration transferred by the Group in a business combination includes assets or liabilities from a contingent consideration
arrangement, it is measured at its acquisition-date fair value and is included as part of the consideration transferred in a business
combination. The contingent consideration is based on future business valuations and profit multiples and has been estimated on an
acquisition by acquisition basis using available profit forecasts. The higher the profit forecast, the higher the fair value of any contingent
consideration (subject to any maximum payout clauses). Changes in fair value of the contingent consideration that qualify as measurement
period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. These adjustments will result in a
restatement to previous reported results if the changes relate to amounts arising in previously reported periods.
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Audit Committee Report continued
The Committee also reviews reports by the external auditor on
the full-year and half-year results, which highlight any issues
identified in their audit process.
Risk management and internal controls
The Board has delegated responsibility for overseeing the
effectiveness of the Group’s risk management and internal
control systems to the Audit Committee. The Committee has
established, and has oversight of, an executive Risk Committee,
receiving minutes of all its meetings and discussing any
significant matters raised.
Systems, security and data capabilities
As part of its remit, the Committee regularly monitors the
Group’s investment and approach in areas that are critical
to performance, the protection of its intellectual property
and the integrity of its data and financial reporting.
Risk Committee
The Audit Committee is responsible for ensuring Group risk
is managed effectively. The Risk Committee monitors business
risks and their impact on the Group and reports its findings
to the Committee. During the year under review, the Risk
Committee comprised the Chief Financial Officer of each Division,
the Group Chief Information Security Officer, the Group General
Counsel & Company Secretary, the Group HR Director, the Head
of Group Finance, the Head of Group Risk, the Head of Internal
Audit and the Head of Compliance. Gareth Wright, Group Finance
Director, is Chairman of the Risk Committee.
The Risk Committee meets quarterly and its principal
duties include:
• providing guidance to the Board and the Audit
Committee regarding the Group’s overall risk
appetite, tolerance and strategy;
• overseeing and advising the Board and the Audit
Committee on the Group’s current risk exposures and
recommending which risks should be recognised as
the Group’s principal risks;
• ensuring that a robust assessment is completed of the
principal risks facing the Group, including those that
would threaten its business model, future performance,
solvency or liquidity;
• reviewing the Group’s overall risk assessment processes,
the parameters of the qualitative and quantitative metrics
used to review the Group’s risks, and monitoring the
actions taken to mitigate them;
•
• monitoring and reviewing all material controls;
• reviewing the effectiveness of the Group’s internal
controls and risk management systems, including
all material operational and compliance controls;
110
In 2018 the Committee’s focus areas included the following:
Cyber security: The Risk Committee continued its work in
establishing a Cyber Security Capability Roadmap with additional
initiatives and frequent reporting on the improvements made.
During the year the IT Security team’s priorities were email
security and phishing, systems vulnerabilities and raising
awareness of IT security issues. The acquisition of UBM also
required a remodelling exercise on the IT risk framework and
a reassessment of the key issues faced by the enlarged Group.
Data management: In May 2018, the General Data Protection
Regulation (GDPR) came into force, imposing new rules on
the handling of personal data. As reported in the 2017 Annual
Report, the Company began its preparations early in order
to consider the impact of any issues that might arise. In this
reporting year, the Group Data Protection Officer continued
work on building a GDPR framework setting out the Company’s
• reviewing the Group’s approach to, and management
of, health and safety risks, including the Health and
Safety Risk Appetite Statement;
• reviewing the adequacy and security of the Company’s
whistleblowing arrangements for colleagues and contractors
to raise concerns in confidence about possible wrongdoing
in financial reporting or other matters;
• reviewing the Group’s instances of fraud and fraud
reporting to the Committee; and
• reviewing the Group’s insurance arrangements.
The Risk Committee monitors the divisional risk registers on
a quarterly basis and assesses changes and emerging risks,
updates the Group risk register and recommends the principal
risks and any changes to risk ratings.
Recommendations for the treatment of significant risks, and
reports on the progress and status of risks that require action,
are made to the Board.
In addition to the regular engagement with the Knowledge &
Networking and Business Intelligence leaderships, the risk
management function also:
• worked with training the Global Exhibitions senior
leadership team to identify risks to business as usual
resulting from the combination and developed mitigations
for these risks; and
facilitated Academic Publishing’s deep dive on emerging
and significant risks facing that business and used a
structured risk and problem-solving approach to identify
new mitigations.
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INFORMA PLC ANNUAL REPORT 2018 “ The Committee takes
seriously its responsibility
for the development,
implementation and
monitoring of the
Group’s policy on
external audit.”
objectives on data protection compliance and embedding the
ways to achieve them within the Divisions. A programme of
training was rolled out from Group level through to the
Divisions, and a Data Protection Management Forum was
established comprising key individuals within the business.
GDPR remains an agenda item at every Risk Committee meeting
and the Audit Committee continues to monitor and shape the
approach taken to data privacy.
The Committee takes seriously its responsibility for the
development, implementation and monitoring of the
Group’s policy on external audit. This policy assigns oversight
responsibility for monitoring independence, objectivity and
compliance with ethical and regulatory requirements to the
Committee, and day-to-day responsibility to the Group Finance
Director. It states that the external auditor is jointly responsible
to the Board and the Committee, with the Committee as the
primary contact. The policy also sets out which categories of
non-audit services the external auditor will and will not be
allowed to provide to the Group, subject to de minimis levels.
Non-audit services
The Committee considers that certain non-audit services
should be provided by the external auditor, because its existing
knowledge of the business makes this the most efficient and
effective way for non-audit services to be carried out.
The Committee regularly reviews the Non-Audit Fees Policy in
order to safeguard the ongoing independence of the external
auditor and ensure the Group complies with the FRC’s Ethical
Standard for Auditors and other EU audit regulations.
The policy defines and describes:
Enterprise resource platform: Following the 2017 rollout of
a new SAP enterprise resource platform across the Group, the
Committee monitored a programme of operational stabilisation
which was completed in 2018 and involved a project team to
resolve issues identified in 2017. With the acquisition of UBM
in June 2018, the Group now has a second major enterprise
resource platform which is Oracle-based and covers the
majority of UBM legacy legal entities.
•
•
•
•
those services the auditor is and is not permitted to provide;
those services where provision by the external auditor has
been pre-approved by the Committee or where the specific
approval of the Committee is required before the auditor
provides the service;
the fee arrangements appropriate for external auditor
engagements; and
the internal approval and external reporting mechanisms.
External auditor
Deloitte LLP (Deloitte) was reappointed as the Group’s external
auditor following a competitive tender in 2016. Full details of
the process are set out in the 2016 Annual Report. Deloitte was
first appointed as the Group’s external auditor in 2004. The
Committee will keep its external auditor under review on an
annual basis and, in accordance with legislation and its own
terms of reference, will ensure that a competitive tender for
external audit services takes place every 10 years. Deloitte’s
last eligible year to serve as the Group’s external auditor is
the year ending 31 December 2023.
With effect from August 2018, the external audit engagement
partner is Anna Marks. She is a qualified accountant, a senior
audit partner in the London audit practice and a Vice-Chairman
of the UK firm. Anna replaces William Touche who was
appointed as the Group’s external audit engagement partner
in July 2015.
The policy allows the external auditor to provide the following
non-audit services to the Informa Group:
• Audit-related services.
• Reporting accountant services.
• Assurance services in relation to financial statements within
an M&A transaction such as providing comfort letters in
connection with any prospectus that Informa may issue.
• Tax advisory and compliance work for non-EEA subsidiaries.
• Expatriate tax work.
• Other non-audit services not covered in the list of
prohibited and permitted services, where the threat
to the auditor’s independence and objectivity is considered
trivial and safeguards are applied to reduce any threat
to an acceptable level.
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Audit Committee Report continued
Details of all fees charged by the external auditor during the year
are set out in Note 7. During the year ended 31 December 2018,
the non-audit fees paid to Deloitte totalled £2.8m (2017: £0.3m)
and were 88% (2017: 14%) of the 2018 audit fee. The increase in
non-audit fees relates to Deloitte’s engagement to assist with
the acquisition of UBM which incurred £2.6m in exceptional
non-audit fees. The Audit Committee approved the appointment
of Deloitte in relation to the acquisition on the basis that they
were best placed to provide these services and that there was
no conflict of interest with their external auditor role.
The remainder of the non-audit fees were for advisory services
relating to the Company’s launch of the EMTN programme
and the closure of a subsidiary company in Saudi Arabia.
The non-audit fees incurred were disclosed to the Committee
in accordance with Group policy and were approved by the
Chairman of the Committee.
The Audit Committee reviewed Deloitte’s independence
following the completion of the UBM acquisition and Deloitte
ceased providing services which had created a conflict of interest.
External auditor effectiveness
In accordance with best practice, the performance of the
external auditor is reviewed annually to assess the delivery of
the external audit service and identify areas for improvement.
The review takes into account the quality of planning, delivery
and execution of the audit (including the audit of subsidiary
companies), the technical competence and strategic knowledge
of the audit team and the effectiveness of reporting and
communication between the audit team and management.
Performance is assessed according to whether the audit
exceeds, meets or is below expectations against a variety
of factors, with a questionnaire completed by Group and
divisional colleagues in different locations.
Deloitte’s performance was assessed as to whether it exceeded,
met or was below expectations for each of these factors. The
evaluation concluded that Deloitte continues to be viewed
as a strong and effective auditor by the business.
Internal Audit
During the first half of 2018, the Internal Audit function continued
to be outsourced to KPMG. KPMG provided independent assurance
through planned audit activities, identifying controls on a sample
and rotational basis and reviewing whether these controls are
adequately designed and implemented.
Following the acquisition of UBM, the Informa outsourced
model was combined with UBM’s Internal Audit function and
UBM’s Head of Internal Audit was appointed as Group Head
of Internal Audit.
At the beginning of each year the Committee approves the
annual Internal Audit plan with an emphasis on the Group’s
key risk areas and certain key financial controls. The Head
of Internal Audit attends each Audit Committee and Risk
Committee meeting, tabling reports on:
• any issues identified around the Group’s business processes
•
and control activities during the course of their work;
the implementation of management action plans to address
any identified control weaknesses; and
• any management action plans where resolution is overdue.
An Internal Audit effectiveness review is carried out each year to
assess the delivery of the function and areas for improvement.
The last review, which was carried out prior to the Internal Audit
function being restructured, concluded that KPMG continued
to work well and provided the Company with assurance over
its risk and control environment.
Committee effectiveness
The 2018 evaluation of the Committee’s performance was
undertaken as part of the broader performance evaluation
conducted by the Chairman of the Board. Details of the
evaluation process are set out on pages 101 and 102 and I am
pleased to confirm that its conclusion was that the Committee
continued to operate effectively. Nevertheless, continuing to
spend time understanding the enlarged business, particularly
the newly acquired elements, will improve the Committee’s
effectiveness over the coming year.
John Rishton
Chairman of the Audit Committee
6 March 2019
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INFORMA PLC ANNUAL REPORT 2018 Directors’ Remuneration Report
Directors’ Remuneration Report
Stephen Davidson
Committee Chairman
Annual Statement from the
Remuneration Committee Chairman
Dear Shareholder
On behalf of the Remuneration Committee (the Committee),
I am pleased to present the Directors’ Remuneration Report for
2018. This report is split into two sections: my Annual Statement
as Chairman of the Remuneration Committee and the Annual
Report on Remuneration.
The Committee’s primary focus is to align Director and Senior
Management remuneration to the strategic priorities of the
Group and the creation of long-term value for Shareholders.
As well as taking into consideration Shareholder feedback and
market practice, the challenging performance measures and
targets set for management are based on a range of factors
including internal budgets, strategic priorities, market growth
and sellside analyst expectations.
In 2018, we updated our Remuneration Policy and this was
approved by Shareholders at the AGM in May. The changes
made reflect continued adoption of the latest best practice
recommendations in areas such as malus and clawback, as well
as updates to reflect the significant evolution of the Informa
Group, in terms of its scale, complexity and international
diversity, since the Policy was previously updated.
As detailed below, we consulted extensively with Shareholders as
part of this process, both early in 2018 to gather input and views
and then again leading up to the AGM. I also accompanied the
Chairman of the Board on his Annual Engagement Roadshow with
Shareholders early this year, which provided a further opportunity
to discuss the updated Policy and how we are implementing it.
As ever, these discussions were engaging and valuable,
underlining the many different and evolving views on incentives,
and these were taken into account in finalising the updated Policy
and in its implementation. I would like to thank Shareholders for
supporting the updated Policy at last year’s AGM, particularly
given the timing was somewhat complicated by the separate vote
to approve the UBM transaction.
In implementing the Policy in 2018, the Committee set measures
and targets it felt were fair and appropriate, with the maximum
award potential for Directors set below the thresholds approved in
the Policy and with additional performance measures introduced
to align management ever closer to Shareholders. Given the
significance of Informa’s acquisition of UBM, the Committee felt
it was important that management was incentivised directly
against the successful delivery of related synergies and return
on investment and so these two Accelerated Integration Plan
performance measures were introduced as part of the 2018
Long-Term Incentive Plan (LTIP) award.
Our overall remuneration philosophy remains the same: to focus
on incentivising the Executive Directors in a way that closely aligns
to Shareholders’ interests; is linked directly to the Group’s strategy;
and continues to focus on pay for performance, with the emphasis
on variable incentives ahead of increases to fixed pay. This ethos
will be reflected in how we implement the Policy going forward,
and we will remain flexible in adapting our approach as the Group
grows and evolves to ensure the Directors are incentivised in the
best interests of the Group and its Shareholders.
This approach is also mirrored further through the organisation.
Informa is an increasingly international Group and we operate
in highly competitive markets for talent across the world, and
so we adapt our approach by market and geography to remain
relevant and competitive. The reward structure for all Informa
colleagues is set out on pages 120 and 121 and a comparison of
CEO to average colleague pay is also included in this report.
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Directors’ Remuneration Report continued
In 2018, we also reviewed Board compensation for Non-
Executive Directors and this led to an increase in salary for
the Chairman to align more closely to peers of a similar size
and complexity, reflecting the increasing demands and
responsibility attached to this role.
2018 performance and incentive outcomes
As detailed in the Strategic Report, 2018 was another busy and
productive year for Informa. Building on our increased focus
and strengthened capabilities following the 2014-2017 Growth
Acceleration Plan, we delivered a fifth consecutive year of growth
in underlying revenue, adjusted profits, adjusted earnings, cash
flow and dividends. Alongside continuing improvement in our
financial performance we also took a considerable step forward
in scale and ambition through Informa’s acquisition of UBM.
Executing and completing such a large and complex transaction
whilst maintaining focus and delivery on day-to-day trading and
activity is no easy task and the successful outcome in 2018 is
testament to the commitment and focus of the Executive
Directors, wider leadership team and all colleagues in the Group.
Short-term incentive
For the 2018 Short-Term Incentive Plan (STIP), the two measures
for the Executive Directors were adjusted diluted earnings per
share (EPS) and underlying revenue growth (URG). The reported
adjusted diluted EPS of 48.28p reflected 105.88% of the target
and, combined with URG of 3.70%, led to a total annual bonus of
93.33% of the maximum potential being awarded to both Executive
Directors. Further details can be found on pages 115 and 116.
Long-term incentive
The 2016 LTIP performance period ended on 31 December 2018.
The measures for the Executive Directors within this plan cycle
were total shareholder return compared to the FTSE 51–150
peer group excluding financial services and natural resources
companies, and the compound annual growth rate in adjusted
EPS. The Group’s performance against these measures resulted
in an overall outcome of 93.90% of the original award for both
Executive Directors.
Shareholder engagement
The Board of Informa places significant importance on regular
and detailed discussions with Shareholders, both through
formal consultation on specific matters and more general
engagement. In 2018, we held very active discussions with
our major Shareholders, partly to consult on our updated
Remuneration Policy but also to discuss and gather views
and input in relation to Informa’s offer for UBM. In March and
April, the Chairman and I met with more than 15 institutions,
representing around 60% of our ownership by value, to discuss
our thinking on the updated Remuneration Policy and we
followed this up with a number of letters and additional
phone calls and meetings in the lead up to the AGM in May.
114
More recently, in early 2019 the Senior Independent Director
and I accompanied the Chairman of the Board during his Annual
Engagement Roadshow. As part of this programme, we wrote to
our top 30 Shareholders, inviting them to meet and discuss any
issues in relation to the Group, its performance, the Board and
Executive Management Team. We met in person with more than
half of those contacted, representing more than 40% of our
ownership by value, as well as several of the proxy agencies,
providing a valuable opportunity to informally discuss the
performance of the Group, corporate activity, management,
engagement, culture, Board structure and many other matters,
including remuneration.
Employee share plans
The Board and Executive Directors believe that equity
ownership is an effective and important way to connect and
align colleagues to the progress and performance of the Group.
We actively encourage participation in colleague share plans,
the largest of which is ShareMatch, a share matching scheme
that gives participants one free share for every one they
purchase, subject to a holding period. Over the last five years
this has led to a significant increase in share ownership amongst
colleagues. In 2018, this meant that 21.3% of eligible colleagues
in countries where ShareMatch is offered were members.
To make it easier and more efficient for US colleagues to invest
in the Group’s shares, a US Employee Stock Purchase Plan was
launched in January 2019 and has seen an immediate take-up of
10.6%. This year we will also be asking Shareholders to approve
a new Save As You Earn plan as a potential future benefit to
colleagues in various countries, further details of which can be
found in the AGM Notice of Meeting.
Looking forward
As the Group continues to grow and expand internationally,
we will monitor and review incentive plans for the Executive
Directors accordingly to ensure we maintain a strong link
between pay and performance. As part of this process, we will
continue to regularly engage with Shareholders, particularly
if any changes are proposed, whilst also closely monitoring
the latest remuneration guidance and best practice detailed
through the 2018 Code.
As always, we welcome comments and feedback on our executive
remuneration arrangements from all our Shareholders.
Stephen Davidson
Committee Chairman
6 March 2019
Remuneration Policy
Following consultation in March and April 2018, the
Remuneration Policy was approved by Shareholders at the
AGM on 25 May 2018. The full Policy can be found on the
Company’s website at https://informa.com/investors/
corporate-governance/terms-of-reference/.
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INFORMA PLC ANNUAL REPORT 2018 Annual Report on Remuneration
This section of the Report provides details of how Informa’s existing Remuneration Policy was implemented during the financial year
ended 31 December 2018. Any information contained in this section of the Report that is subject to audit is highlighted.
Single total figure of remuneration for Executive Directors (audited)
(£)
Stephen A. Carter
Gareth Wright
2018
2017
2018
2017
Salary1
829,398
825,271
472,912
470,559
Taxable
benefits
46,281
57,574
16,861
16,475
Pension
207,349
206,316
118,226
117,636
Total
fixed
pay
STIP2
LTIP3
Total
variable
pay
Total fixed
and variable
pay
1,083,028
1,166,935
1,824,905
2,991,840
4,074,868
1,089,161
1,020,035
2,023,023
3,043,058
4,132,219
607,999
604,670
665,371
581,611
780,392
860,876
1,445,763
2,053,762
1,442,487
2,047,157
1. The Executive Directors’ base salaries increased halfway through the year as detailed in the notes below.
2. STIP awards in excess of 100% of base salary are deferred in shares for a further three years in line with the Company’s Deferred Share Bonus Plan (DSBP).
3.
The LTIP award granted in 2016, which becomes exercisable on 17 March 2019, is expected to vest at 93.90%. The estimated value of the LTIP award has been
calculated using the average share price over a three-month period from 1 October 2018 to 31 December 2018, being 698.9p. The value of the 2015 LTIP awards
included in the single total figure of remuneration for 2017 have been updated to reflect the actual share price on vesting (being 668.6p on 12 February 2018)
rather than the average for the three months to 31 December 2017 which was used in the 2017 Annual Report.
Notes to the single total figure of remuneration table (audited)
Fixed pay
Salary
Executive Directors’ salaries were reviewed in May 2018. In the spirit of previous years and in line with our overall remuneration
philosophy to put the emphasis on performance-related pay ahead of fixed pay, the Committee kept base salary increases to 1.0%
for both Stephen A. Carter and Gareth Wright, effective from 1 July 2018.
Stephen A. Carter
Gareth Wright
Salary from
1 July 2018
Salary to
30 June 2018
£833,524
£475,265
£825,271
£470,559
Taxable benefits
Benefits include private health and dental insurance, expenses incurred for accompanied attendance at certain corporate events,
company car allowance or chauffer costs in lieu of company car allowance, travel insurance, health screening and professional advice.
Pension
The Group makes a cash payment of 25% of basic salary to the Executive Directors in lieu of pension contributions. Neither Executive
Director is a member of the defined benefit schemes provided by the Group or any of its subsidiaries, and accordingly they have not
accrued entitlements under these schemes.
Variable pay
Short-Term Incentive Plan (STIP)
For 2018, the STIP was linked to the achievement of budgeted adjusted diluted EPS (weighted 80% of total) and URG (weighted 20%).
Under the EPS element, if threshold performance is achieved, 30% of bonus will vest. This increases on a straight line basis to
on-target performance where 90% of bonus will vest. Under the URG element, if threshold performance is achieved, 0.1% of bonus
will vest. This also increases on a straight line basis to on-target performance where 10% of bonus will vest. The maximum STIP
opportunity was 150% of salary for both Executive Directors.
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Directors’ Remuneration Report continued
The EPS measure is based on budgeted exchange rates, in line with market practice, and therefore the targets and outturn shown
below have been adjusted for the impact of exchange rates to enable constant currency comparison.
Measure
EPS
URG
Total STIP
Weighting (%
of maximum)
80%
20%
100%
Performance targets
Threshold
43.3p
2.20%
Target
45.6p
3.20%
Maximum
47.9p
4.20%
Actual
outcome
Payout (% of
maximum)
48.28p
3.70%
80%
13.33%
93.33%
Informa performed well through 2018, delivering further improvement in underlying revenue growth and another year of growth
in profit, earnings and cash flow. This led to an EPS outcome for 2018 above the maximum, resulting in a payout of 80.0%, being
the maximum. URG for the year was 3.70%, resulting in a payout between target and maximum of 13.33%.
The Committee approved the overall STIP outcome for 2018 being 93.33% of maximum, equal to 140% of salary for each Executive
Director, having determined that the general financial underpin had been satisfied.
In line with the Directors’ Remuneration Policy, the equivalent of 100% of base salary will be paid in cash, with the remainder
(40% of base salary) being deferred into shares for a further three years under the rules of the DSBP, and subject to malus and
clawback provisions.
Long-Term Incentive Plan
On 17 March 2016, Stephen A. Carter and Gareth Wright received LTIP awards as set out in the table below and which will become
exercisable on 17 March 2019:
Stephen A. Carter
Gareth Wright
Date of award
17 March 2016
17 March 2016
Number of
shares
awarded1
235,136
100,553
Price at date
of award
Value as a
percentage of
base salary
Value at date
of award (£)
695.0p
695.0p
200%
150%
1,634,195
698,843
1
Following the rights issue on 26 October 2016, the number of options awarded increased by a factor of 1.0862, resulting in an amended total award of 255,400
options for Stephen A. Carter and 109,218 options for Gareth Wright.
Vesting of the awards is based on two equally weighted performance conditions over the three years to 31 December 2018. The first
measured relative total shareholder return (TSR) vs. the FTSE 51–150 peer group (excluding financial services and commodities
companies) while the second measured the compound annual growth rate (CAGR) in adjusted EPS.
Measure
TSR against comparator group
EPS CAGR
Total LTIP
Weighting (%
of maximum)
Performance targets
Threshold
Maximum
Actual
outcome
Payout (% of
maximum)
50%
50%
Median
2%
80th
percentile
75th
percentile vs.
peer group
6%
7.59%
43.90%
50.0 %
93.90%
Under the TSR element, if Informa ranks at median, 20% of the award subject to this measure will vest. This increases on a straight
line basis to full vesting for ranking at or above the 80th percentile. A ranking below median will result in the lapsing of the TSR
element. Willis Towers Watson has confirmed that Informa’s TSR over the period was ranked at the 75th percentile vs. the peer
group, resulting in a vesting outcome of 43.90% for that element.
Under the EPS element, 2% p.a. growth will result in 20% of the award subject to this measure vesting, 4% p.a. growth will result
in 50% vesting, and 6% p.a. growth or higher will result in full vesting; vesting occurs on a straight line basis between these points.
Growth below 2% p.a. will result in the lapsing of the EPS element. Informa’s compound annualised growth rate over the period
was 7.59%, resulting in a vesting outcome of 50% for that element.
The total amount expected to become exercisable is therefore 93.90% of the total award.
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INFORMA PLC ANNUAL REPORT 2018 The performance outcomes above have resulted in the following LTIP vesting levels:
Stephen A. Carter
Gareth Wright
1. Figures adjusted for the rights issue on 26 October 2016.
2. Accrued dividends are included to 31 December 2018.
Number of
shares
granted1
Number of
shares to
lapse
255,400
109,218
15,580
6,663
Number of
shares to
become
exercisable2
261,111
111,660
Estimated
value3
(£)
1,824,905
780,392
3.
Based on the three-month average share price to 31 December 2018 of 698.9p. The actual value of the exercisable options will be disclosed in the 2019
Remuneration Report.
Share scheme interests awarded during the year (audited)
LTIP
Stephen A. Carter
Gareth Wright
Type of
award
LTIP (option)
LTIP (option)
Number of
options
awarded
337,3501,2
144,2651,2
Value as a
percentage of
base salary
Face value
at date of
award3
300%
225%
£2,475,810
£1,058,760
1.
On 22 March 2018 the Company granted an LTIP award equal to 200% of salary to Stephen A. Carter (228,848 options) and 150% of salary to Gareth Wright
(97,865 options). The performance conditions attached to this award are TSR vs. FTSE 51–150 and EPS CAGR. The measures for these performance conditions
are: (i) TSR ranked between the median to upper quintile and (ii) EPS between 3% and 8%. The performance conditions will be measured over the three years
to 31 December 2020 and 20% of this award will vest in the event that threshold performance is achieved.
2. On 30 May 2018 the Company granted an AIP LTIP award equal to 100% of salary to Stephen A. Carter (108,502 options) and 75% of salary to Gareth Wright
(46,400 options). The performance conditions are (i) to achieve a run rate of £60m–£70m of cost synergies by the end of 2020 (weighting of 60%) and (ii)
a post-tax return on invested capital in line with or ahead of the Group’s WACC (calculated at 7.2–7.95%) by the end of 2021 (weighting of 40%). 25% of this
award will become exercisable in the event the threshold performance is achieved.
3. The face value of award granted on 22 March 2018 was calculated using the five-day average share price prior to the grant date (721.24p) and the face value
of the award granted on 30 May 2018 was calculated using the closing share price immediately prior to the grant date (760.60p).
The Committee will disclose details of its assessment of performance following the conclusion of the performance period.
All options granted in 2018 will be subject to an additional two-year holding period once the award becomes exercisable. During the
two-year holding period, Executive Directors are only allowed to dispose of shares to meet income tax, National Insurance or other
regulatory obligations.
Executive Directors’ shareholdings and share interests (audited)
Shareholding requirements
The Committee believes that equity ownership by the Executive Directors and wider management team and colleague base is an important
and effective way of connecting them to the progress and performance of the Group, closely aligning them with Shareholders. For this
reason, under the terms of the 2018 Remuneration Policy, Executive Directors are required to hold a percentage of their salary in shares
or in exercisable options over shares equivalent to their largest outstanding LTIP award, which is currently 300% of salary for Stephen A.
Carter and 225% of salary for Gareth Wright. Executive Directors are expected to meet the guideline within five years of appointment,
or 25 May 2018 (being the date of the 2018 AGM), whichever is the later, and maintain this holding throughout their term of office.
Both Stephen A. Carter and Gareth Wright comfortably exceed the Group’s current share ownership guidelines.
Stephen A. Carter
300%
Gareth Wright
225%
Contractual shareholding minimum %
Shareholding % as at 17 March 2019
847%
602%
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Directors’ Remuneration Report continued
Shareholdings
The beneficial interest of each Executive Director in the Company’s shares (including those held by connected persons) as at
31 December 2018 and their anticipated beneficial interests as at 17 March 2019 are set out below:
Exercisable
options over
shares (not
exercised)
607,623
258,928
Beneficial
holding1
103,695
14,493
ShareMatch2
2,689
4,284
DSBP
awards3
35,056
20,139
Total
interests as
at 31
December
20184
Shareholding
as % of salary
as at 31
December
20185
749,063
297,844
628%
438%
Anticipated
total interests
as at 17
March 2019
1,010,174
409,504
2016 LTIP
award6
261,111
111,660
Anticipated
shareholding
as % of salary
as at
17 March
2019
847%
602%
Stephen A. Carter
Gareth Wright
1. Stephen A. Carter’s beneficial shareholding receives share dividends through the Dividend Reinvestment Plan (DRIP).
2. Shares held under ShareMatch are made up of shares purchased by the Executive Director, shares “matched” by the Group and dividend shares.
3.
Includes DSBP awards granted in 2016 and 2018 and accrued dividends to 31 December 2018.
4. Total interests are shares held legally or beneficially and those held by connected persons, and exercisable options held in the LTIP, and shares held
in ShareMatch, in accordance with the Company’s Executive Shareholding Guidelines.
5.
The average share price for the three months from 1 October 2018 to 31 December 2018 has been taken for the purpose of calculating the current
shareholding as a percentage of salary.
6. The 2016 LTIP will become exercisable from 17 March 2019. Full details are set out on page 116.
Scheme interests
The table below shows details of outstanding awards held by Executive Directors, including awards granted in 2018. LTIP awards are
subject to the achievement of performance conditions set at grant and DSBP awards are based on the prior achievement of annual
performance conditions and will become exercisable on the third anniversary of grant.
Director/
Scheme
Date of
grant
Stephen A. Carter
LTIP
08/09/2014
12/02/2015
17/03/2016
15/03/2017
22/03/2018
30/05/2018
30/05/2018
DSBP
17/03/2016
02/03/2018
Gareth Wright
LTIP
08/09/2014
12/02/2015
17/03/2016
15/03/2017
22/03/2018
30/05/2018
30/05/2018
DSBP
17/03/2016
02/03/2018
Held at
1 January
20181
Exercised/
released
during
2018
Vested but
unexercised
Granted
during
2018
Lapsed
during
2018
Held at 31
December
20181
Accrued
dividend
shares at 31
December
2018
Total held
at 31
December
20182
Date
options
exercisable
Exercise
period to
263,755
332,832
255,400
253,345
–
–
–
6,016
–
112,521
141,634
109,218
108,341
n/a
n/a
n/a
3,413
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
263,755
276,183
–
–
–
–
–
–
–
112,521
117,527
–
–
–
–
–
–
–
–
–
–
–
228,848
65,101
43,401
–
28,039
–
–
–
–
97,865
27,840
18,560
–
15,987
–
56,649
–
–
–
–
–
–
–
–
24,107
–
–
–
–
–
–
–
263,755
276,183
255,400
253,345
228,848
65,101
43,401
6,016
28,039
112,521
117,527
109,218
108,341
97,865
27,840
18,560
3,413
15,987
33,013
34,672
22,674
14,470
6,262
1,781
1,187
534
467
296,768 08/09/2017 07/09/2024
310,855 12/02/2018 11/02/2025
278,074 17/03/2019 16/03/2026
267,815 15/03/2020 14/03/2027
235,110 22/03/2021 21/03/2028
66,882 30/05/2021 29/05/2028
44,588 01/03/2022 29/05/2028
6,550 17/03/2019 16/03/2026
28,506 02/03/2021 01/03/2028
14,126
126,647 08/09/2017 07/09/2024
14,754
132,281 12/02/2018 11/02/2025
9,696
6,188
2,678
761
507
302
437
118,914 17/03/2019 16/03/2026
114,529 15/03/2020 14/03/2027
100,543 22/03/2021 21/03/2028
28,601 30/05/2021 29/05/2028
19,067 01/03/2022 29/05/2028
3,715 17/03/2019 16/03/2026
16,424 02/03/2021 01/03/2028
1. Excludes accrued dividends.
2. Includes accrued dividends.
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INFORMA PLC ANNUAL REPORT 2018 Payments to past Directors (audited)
No payments were made to past Directors during the year ended 31 December 2018.
Payments for loss of office (audited)
No payments for loss of office were made during the year ended 31 December 2018.
Other disclosures
Service contracts
The Executive Directors have rolling service contracts with the Company which have notice periods of 12 months on either side.
Stephen A. Carter1
Gareth Wright
Date of
service
contract
9 July 2013
9 July 2014
1.
Stephen A. Carter was appointed as a Non-Executive Director on 11 May 2010, CEO-Designate on 1 September 2013 and became Group Chief Executive
on 1 December 2013.
In accordance with the Code, all continuing Directors stand for election or re-election by the Company’s Shareholders on an annual
basis. The Company may terminate an Executive Director’s appointment with immediate effect without notice or payment in lieu
of notice under certain circumstances, prescribed within the Executive Director’s service contract. The Executive Directors’ service
contracts are available for inspection at the registered office during normal business hours and at the AGM.
External appointments
The Executive Directors are entitled to accept external board appointments provided that the Chairman determines that it is appropriate.
The Executive Director is entitled to retain any fees in relation to such external appointments.
Stephen A. Carter has been a Non-Executive Director of United Utilities Group PLC since September 2014. During the year to
31 December 2018, he received fees of £78,033 in respect of this role (2017: £74,866). Stephen A. Carter is also a Non-Executive Board
member of the Department for Business, Energy & Industrial Strategy (BEIS) and chooses not to receive remuneration for this role.
Gareth Wright has no external appointments.
Relative importance of spend on pay
Informa is a people business, and is driven by the contributions and expertise of its 11,000+ colleagues around the world. The Group
believes in the importance of investing in colleagues and offering market competitive salaries, as well as flexible benefits and further
opportunities such as ShareMatch. The table below shows the aggregate colleague remuneration, dividends paid, revenue and
operating profit as stated in the financial statements, for the years ended 31 December 2018 and 31 December 2017:
Total number of colleagues¹
Aggregate colleague remuneration (£m)1
Remuneration per colleague (£)
Dividends paid in the year2 (£m)
1. Figures taken from Note 9 to the Consolidated Financial Statements.
2. Figures taken from Note 14 to the Consolidated Financial Statements.
2018
9,832
526.2
53,519
201.8
2017
7,539
413.3
54,822
162.2
Percentage
change
30.4%
27.3%
-2.4%
24.4%
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Governance
Directors’ Remuneration Report continued
Total shareholder return and Group Chief Executive pay
The graphs below illustrate the Group’s TSR performance compared with the performance of the FTSE All-Share Media Index, the
FTSE 350 Index excluding Investment Trusts and the FTSE 51–150 peer group (excluding financial services and natural resources),
in the 10-year period ended 31 December 2018. These indices and peer group have been selected for this comparison because
the Group is a constituent company of all three.
Historical TSR performance
Growth in the value of a hypothetical £100 holding invested in Informa over 10 years:
£900
£800
£700
£600
£500
£400
£300
£200
£100
£0
D ec 0 8
D ec 0 9
D ec 1 0
D ec 1 1
D ec 1 2
D ec 1 3
D ec 1 4
D ec 1 5
D ec 1 6
D ec 1 7
D ec 1 8
£900
£800
£700
£600
£500
£400
£300
£200
£100
£0
D ec 0 8
D ec 0 9
D ec 1 0
D ec 1 1
D ec 1 2
D ec 1 3
D ec 1 4
D ec 1 5
D ec 1 6
D ec 1 7
D ec 1 8
£900
£800
£700
£600
£500
£400
£300
£200
£100
£0
D ec 0 8
D ec 0 9
D ec 1 0
D ec 1 1
D ec 1 2
D ec 1 3
D ec 1 4
D ec 1 5
D ec 1 6
D ec 1 7
D ec 1 8
Informa
FTSE All-Share Media
Informa
FTSE 51–150 peer group median
FTSE 51–150 peer group average
Informa
FTSE 350 excluding Investment Trusts
Over the same period, the total remuneration of the individual holding the role of Group Chief Executive has been as follows:
Year
CEO
2009
2010
2011
2012
2013
2013
2014
2015
2016
2017
2018
Peter Rigby
Peter Rigby
Peter Rigby
Peter Rigby
Peter Rigby
Stephen A.
Carter
Stephen A.
Carter
Stephen A.
Carter
Stephen A.
Carter
Stephen A.
Carter
Stephen A.
Carter
CEO single
figure of
remuneration £1,651,200
CHF
3,067,504
CHF
5,231,269
CHF
3,987,897
CHF
3,718,566
£588,3651
£1,794,152 £2,083,275 £3,407,650 £4,132,219 £4,074,868
STIP payout
(% of
maximum)
LTIP vesting
(% of
maximum)
83.6%
86.3%
75.7%
65.9%
n/a
59.0%
66.7%
69.8%
40.0%
82.4%
93.33%
40.2%
0%
74.0%
42.5%
–
n/a
n/a
34.6%
79.3%
83.0%
93.90%
1.
Group Chief Executive remuneration for Stephen A. Carter for 2013 covers the period from 1 September 2013 to 31 December 2013. The LTIP award made
in 2013 was pro-rated to reflect his time as CEO-Designate during that year.
CEO and colleague remuneration changes and ratios
An analysis of the average total compensation for the Senior Management Team, which represents a group of around 250 colleagues
based around the world, compared with the CEO has been carried out, and results in a ratio of 12.9 times.
The key annual remuneration averages in the Group, and the CEO multiples, are:
• Senior Management Team – £317k (12.9x multiple)
• Group-wide – £57k (71.4x multiple)
Comparing the 2018 single total figure of remuneration for the Group Chief Executive with the average total compensation for
UK colleagues results in a ratio of 72.9 times, where the average UK colleague total compensation is £55,905.
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INFORMA PLC ANNUAL REPORT 2018 The total compensation figures include salary, bonus payments and benefits package, and, where appropriate, LTIP earnings.
The CEO comparator figure is that of total fixed and variable pay as set out in the single total figure of remuneration on page 115.
The ratio calculations are consistent with prior year disclosures. The methodology prescribed in the Companies (Miscellaneous
Reporting) Regulations 2018 will be followed in the 2019 Annual Report and Accounts.
The following table shows the percentage change in salary, benefits and bonus from 2017 to 2018 for the Group Chief Executive and
the average percentage change from 2017 to 2018 for all colleagues in the Group:
Group Chief Executive
All colleagues
Salary %
Benefits %
Bonus %
1%
3.9%
-20%
1.6%
14%
12.9%
Single total figure of remuneration for Non-Executive Directors (audited)
The remuneration of the Chairman is determined by the Committee in consultation with the Group Chief Executive. The remuneration
of the Non-Executive Directors is determined by the Chairman and the Executive Directors within the limits set by the Articles.
The fees for the Chairman and other Non-Executive Directors were reviewed during the year and increased as follows with effect
from 1 July 2018:
Chairman
Deputy Chairman
Non-Executive Directors
Audit Committee Chairman
Remuneration Committee Chairman
Senior Independent Director
Current fee
(£) Effective date
Previous fee
(£)
Effective date
375,000
1 July 2018
269,256 1 January 2017
92,920
64,649
13,826
10,419
10,419
1 July 2018
1 July 2018
1 July 2018
1 July 2018
1 July 2018
92,000
15 June 2018
64,009 1 January 2017
13,689 1 January 2017
10,316 1 January 2017
10,316 1 January 2017
The table below show the actual fees paid to our Non-Executive Directors for the years ended 31 December 2018 and 2017:
Derek Mapp
Greg Lock¹
Gareth Bullock
Helen Owers
Cindy Rose
Stephen Davidson
David Flaschen
John Rishton
Mary McDowell1
David Wei1
2018
2017
Total fees
(£)
322,128
49,999
74,697
64,329
64,329
74,697
64,329
78,087
34,786
34,786
Taxable
benefits2
(£)
12,098
–
3,045
7,025
295
4,160
10,088
4,487
2,570
3,528
Total fees
(£)
269,256
–
74,325
64,009
64,009
74,325
64,009
72,205
–
–
Taxable
benefits2
(£)
4,855
–
2,935
5,238
–
1,717
8,210
1,630
–
–
1. Greg Lock, Mary McDowell and David Wei were appointed to the Board on 15 June 2018 following completion of the acquisition of UBM plc.
2. Taxable benefits disclosed relate to the reimbursement of taxable relevant travel and accommodation expenses for attending Board meetings and
professional advice and include tax which is settled by the Company.
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Directors’ Remuneration Report continued
Non-Executive Directors’ shareholdings (audited)
Non-Executive Directors are not subject to a shareholding requirement. Details of their interests in shares (including those held
by connected persons) as at 31 December 2018 and 2017 are set out below:
Non-Executive Director
Derek Mapp
Greg Lock
Gareth Bullock
Cindy Rose
Helen Owers
Stephen Davidson
David Flaschen1
John Rishton
Mary McDowell
David Wei
Shareholdings
as at 31
December
2018
Shareholdings
as at 31
December
2017
132,061
50,000
13,204
4,375
3,867
3,350
7,000
8,681
6,299
1,902
128,594
n/a
12,859
4,375
3,767
3,350
7,000
8,681
n/a
n/a
1. David Flaschen holds 3,500 American Depository Receipts (ADRs). One ADR is equivalent to two Ordinary Shares.
There have been no changes to these holdings between 31 December 2018 and the date of this report.
Non-Executive Directors are not eligible to participate in any of the Company’s share plans or join any Group pension scheme.
Letters of appointment
All Non-Executive Directors have a letter of appointment with the Company, which are available for inspection at the registered
office during normal business hours and at the AGM. The effective dates of appointment are shown below:
Derek Mapp1
Greg Lock
Cindy Rose
Gareth Bullock
Helen Owers
Stephen Davidson
David Flaschen
John Rishton
Mary McDowell2
David Wei3
1. Derek Mapp was appointed as a Non-Executive Director on 10 May 2004 before being appointed as Chairman on 17 March 2008.
2. Mary McDowell was appointed as a Non-Executive Director of UBM plc on 1 August 2014 before being appointed to the Informa PLC Board.
3. David Wei was appointed as a Non-Executive Director of UBM plc on 1 November 2016 before being appointed to the Informa PLC Board.
Effective date of
appointment
17 March 2008
15 June 2018
1 March 2013
1 January 2014
1 January 2014
1 September 2015
1 September 2015
1 September 2016
15 June 2018
15 June 2018
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INFORMA PLC ANNUAL REPORT 2018 Implementation of the Directors’ Remuneration Policy in 2019
A summary of how the Directors’ Remuneration Policy will be applied for the year ending 31 December 2019 is set out below.
Base salary and fees
The base salaries of the Executive Directors increased by 1% effective from 1 January 2019. For comparison, the typical rate
of salary increase for UK colleagues is 0–3%.
The fees payable to the Chairman and the Non-Executive Directors will similarly increase by 1% effective from 1 April 2019.
Pension
The Group will continue to make a cash payment of 25% of basic salary to the Executive Directors in lieu of pension contributions.
STIP
The maximum bonus opportunity is 175% of base salary for the Group Chief Executive and 150% of base salary for the Group
Finance Director.
The performance measures and weightings for 2019 will be as follows:
Measure
Adjusted diluted EPS
Underlying revenue growth
Engagement and culture
As a percentage of maximum
bonus opportunity
Group Chief
Executive
69%
17%
14%
Group
Finance
Director
80%
20%
–
• Performance below threshold will not result in a payout for any element of the STIP.
• For the EPS-related measure, threshold and on-target performance will result in payouts of 25% and 75% of the maximum
respectively.
• For the URG-related measure, threshold and on-target performance will result in payouts of 20% and 33.3% of that element
•
respectively.
In respect of the Group Chief Executive’s engagement and culture measure, performance will be judged in the round against
a range of non-financial KPIs.
The targets themselves, as they relate to the 2019 financial year, are commercially sensitive. However, retrospective disclosure of the
targets and performance against them will be provided in next year’s Directors’ Remuneration Report unless they remain commercially
sensitive at that time.
LTIP
We intend to make LTIP awards of 300% of base salary to the Group Chief Executive and 225% of base salary to the Group Finance
Director in respect of the 2019 financial year. The performance measures and weightings for each element will mirror those of the
2018 awards set out on page 117 with the exception of the EPS element. Under the EPS element, 3.5% p.a. growth will result in 25%
of the award subject to this measure vesting and 8.5% p.a. growth or higher will result in full vesting. Vesting will occur on a straight
line basis between these points. Growth below 3.5% p.a. will result in the EPS element lapsing.
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Governance
Directors’ Remuneration Report continued
Remuneration Committee membership and responsibilities
Membership of the Committee was changed during the year following the acquisition of UBM. Throughout the year ended
31 December 2018, and as at the date of this report, the Committee was comprised wholly of independent Non-Executive
Directors. Members of the Committee during the year, and to the date of this report, are:
Members
Stephen Davidson (Chairman)
Gareth Bullock
Mary McDowell
Helen Owers
David Wei
Committee member since
1 September 2015
11 February 2016
15 June 2018
1 January 2014
15 June 2018
Attendance
during 2018
7/7
7/7
2/2
5/7
1/2
Full biographies for the Committee members and attendance at all meetings during the year are shown on pages 94 to 97.
The Chairman of the Board and the Group Chief Executive attend meetings by invitation only and are not present when matters
relating to their own fees or remuneration are discussed.
In determining the Executive Directors’ remuneration, the Committee consulted the Chairman about its proposals. In addition,
the former Director of Talent & Transformation, Company Secretary and the Company’s remuneration advisers attended meetings
and provided assistance to the Committee during the year, other than for any item relating to their own remuneration.
There is regular communication between the Committee Chairman, Chairman of the Board, Group Chief Executive and Group HR
Director on all aspects of remuneration within the Group. The Committee Chairman is also available to the remuneration adviser
to discuss matters of governance or the Remuneration Policy.
Key responsibilities of the Remuneration Committee
The Committee’s terms of reference were last reviewed in December 2018 and are available on the Company’s website:
http://www.informa.com. The Committee’s key areas of responsibility are:
• setting the Remuneration Policy for Executive Directors and the Company Chairman;
• reviewing the Remuneration Policy and strategy for members of Senior Management, whilst having regard to pay and
employment conditions across the Group;
• determining the total remuneration package of the Executive Directors and Senior Management;
• approving the design and implementation of all colleague share plans and pension arrangements;
• approving the design of, determining targets and monitoring performance against conditions attached to all annual and
long-term incentive awards to Executive Directors and Senior Management and approving the vesting and payment outcomes
of these arrangements; and
• selecting, appointing and setting the terms of reference of any independent remuneration advisers.
Activities of the Remuneration Committee during 2018
The Committee met seven times in the year ended 31 December 2018 during which the following activities were undertaken:
• recommended the revised Directors’ Remuneration Policy for approval by the Board and Shareholders;
• approved the 2017 Directors’ Remuneration Report;
• reviewed the base salaries of the Executive Directors and other members of Senior Management together with the fees for
the Chairman and Deputy Chairman;
• assessed the level of achievement of targets for the 2017 STIP and set targets for the 2018 STIP;
• assessed the achievement of targets for the LTIP awards made in 2015 and set targets for the LTIP awards made in 2018;
• reviewed and approved awards made under the STIP (including the DSBP) and LTIP;
• approved changes to the structure of executive and all-employee schemes in relation to GDPR;
• reviewed the Committee’s terms of reference; and
• received updates and training on corporate governance and remuneration matters from the independent remuneration consultant.
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INFORMA PLC ANNUAL REPORT 2018 Remuneration consultants
Mercer Kepler was appointed as independent remuneration consultant by the Committee in May 2017. Mercer Kepler is a member
of the Remuneration Consultants Group and follows its voluntary Code of Conduct. It does not provide any other material services
or have any other connection to the Group. The Committee is satisfied that the advice it has received is independent and objective.
Fees paid to Mercer Kepler during the year ended 31 December 2018, which are charged on a time basis, amount to £102,025
(2017: £81,010) and relate to attendance at Committee meetings, Remuneration Policy review and advice to the Committee. The
Committee has not requested advice from any other external remuneration advisory firm during the year ended 31 December 2018.
Voting at the AGM
We engage regularly with our Shareholders and are aware of the variety of views expressed around executive remuneration, both
publicly and in recent discussions. The Committee has a clear commitment to governance, best practice and listening to Shareholder
views. As noted on page 114, the Committee consulted with its major Shareholders on the Directors’ Remuneration Policy and the
setting of targets prior to the 2018 AGM. Following the outcome, which included a minority vote against the updated Remuneration
Policy, the Board engaged deeply and extensively with Shareholders in early 2019. This feedback has been reflected upon by the
Committee, along with other input from Shareholders and Shareholder representative bodies, and will be taken into account in
determining how the Policy is implemented going forward.
The following table summarises the voting outcomes of the resolutions put to Shareholders at the 2018 AGM regarding the Annual
Report on Remuneration and the Directors’ Remuneration Policy:
Annual Report on Remuneration
Directors’ Remuneration Policy
Votes for
Votes against
Number
628,334,895
426,506,481
%
93.21
64.19
Number
45,796,471
237,979,957
%
Total votes
cast
Votes
withheld
(abstentions)
6.79
674,131,366
767,534
35.81
664,486,438
10,412,463
This report was approved by the Board and signed on its behalf by
Stephen Davidson
Chairman of the Remuneration Committee
6 March 2019
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Governance
Relations with Shareholders
Relations with Shareholders
E.1 Dialogue with Shareholders
As described on page 30, Shareholders are one of Informa’s
most important stakeholders.
The support of our equity and debt holders provides the
financial capital that enables Informa to fund ongoing
operations, reinvest in people, products and platforms
and add new businesses that extend the Group’s scale,
reach and specialism.
Informa’s Directors and Executives participate in a proactive
Shareholder engagement programme designed to maintain
positive and constructive relations with investors, analysts
and debt holders throughout any given year. The Group
also engages with the proxy agencies that advise certain
Shareholders on governance and voting matters.
We aim to provide clear, timely and balanced corporate and
financial information, in person and through the latest digital
channels, enabling Shareholders to engage with the Executive
Management Team while meeting all necessary standards for
public company disclosure.
Informa operates a Level I sponsored American Depository
Receipts (ADR) programme through BNY Mellon to facilitate
investment from US-based Shareholders, with ADR ownership
accounting for 1.1% of Informa’s share capital at the end of
December 2018.
Director and Executive participation and engagement
On a day-to-day basis, Shareholder engagement is led by the
Director of Investor Relations, Corporate Communications &
Brand, who is a member of the Executive Management Team and
attends all main Board meetings. The Group Chief Executive and
Group Finance Director are also heavily involved in institutional
investor and analyst engagement, and Informa’s divisional CEOs
take part where practical and where Shareholders have a
particular interest in meeting them.
All Board members attend the AGM, where they are available
to engage with, and answer questions from, Shareholders. They
also make themselves available for ad hoc meetings and the
Chairman, Derek Mapp, undertakes his own Annual Engagement
Roadshow to meet Shareholders. Most recently, he was joined
on his Roadshow by the Senior Independent Director, Gareth
Bullock, and the Chairman of the Remuneration Committee,
Stephen Davidson.
A detailed Investor Relations Report is submitted to every Board
meeting and the Director of Investor Relations provides an
update on investor activities in person. The report includes
detailed shareholding information, movements, sector news
flow and feedback from analysts and institutional investor
meetings, as well as the latest analyst reports on the Group.
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INFORMA PLC ANNUAL REPORT 2018 Year-round digital communications
The Group’s Investor Relations and Communications
team provides relevant materials online in an engaging
and accessible format. To ensure that investors have access
to the latest information no matter their location, size of
holding or communication preference, presentations are
streamed live through Informa’s website, with audio, video
and written transcripts and presentation materials published
online promptly afterwards. Major news is also delivered
via social media.
Shareholders are encouraged to access corporate materials
online, as a way of reducing the cost and resources involved
with printed materials and to ensure the prompt delivery
of information. Colleagues who are Shareholders are also
encouraged to use these facilities to stay up to date on
developments, as well as receiving major news through
internal communication channels.
2018 Shareholder engagement
During a typical year, formal Shareholder engagement takes
place to coincide with Informa’s financial reporting calendar.
This includes in-person presentations at full and half-year
results and at the time of the AGM, and statements and
conference calls at the time of quarterly trading updates.
Informa also attends major investor conferences as an efficient
way to meet with current Shareholders and non-holders. In any
given year, there will also be ad hoc individual meetings with
investors, as well as pre-planned roadshows to meet current
and potential Shareholders and analysts, in London and in
cities throughout the world.
The Investor Relations and Communications team is available
for individual information requests on an ongoing basis and,
where it is of interest, provides investors with the opportunity
to visit Informa events and access our data and content
products for research purposes.
During 2018, the Executive Management Team participated
in an extensive investor engagement programme to discuss
and answer questions on Informa’s offer for UBM. In total, in
2018 it undertook over 450 meetings with institutions. For the
purposes of the offer for UBM, it also created a dedicated and
legally compliant hub on Informa’s website for information
about the offer, including formal documentation, Company
information, video interviews and media commentary.
Informa’s Directors also met with a range of Shareholders to
discuss views and feedback on our updated Remuneration
Policy ahead of the AGM in May. Further information on this
consultation can be found on page 114 of the Directors’
Remuneration Report.
Key 2018 engagement forums
January
February
May
30 January
Presentation on Informa’s
offer for UBM
28 February
2017 full-year results presentation
23–24 May
Investor meetings at Berenberg
US Conference
25 May
Annual General Meeting and
trading update
July
September
November
25 July
2018 half-year results presentation
4 September
Investor meetings at Barcap Media
& Telco Conference
9 November
10-month trading update statement
and conference call
7 September
Investor meetings at Deutsche
Media Conference
14–15 November
Investor meetings at Morgan Stanley
TMT Conference
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Governance
Relations with Shareholders continued
Relations with debt holders
Informa also runs an active programme of engagement with
debt holders.
In July 2018, the Group entered the public bond market for the
first time, issuing €650m five-year notes and £300m eight-year
notes. In addition, at the end of December 2018, the Group had
£1,396.4m of private placement loan notes held by over 30
institutions and a further $350m of US public bonds originally
issued by UBM plc.
The Group regularly holds conference calls and face-to-face
meetings with debt investors to keep them updated with
developments and the latest financial results. These are
co-ordinated through the Treasury and Investor Relations
and Communications teams.
Planned engagement in 2019
A programme is underway to refresh and update all the
Group’s materials and digital platforms, reflecting Informa’s
new operating structure and brands and the position of the
combined Group after the AIP. Informa’s Investor Relations and
Communications team is expanding in 2019 to meet increased
demand for information and interaction with the Group.
Informa’s 2019 Investor Day is scheduled for 10 May in London.
Investors will have the opportunity to hear from the Executive
Management Team as well as divisional Senior Management.
The event and all materials presented will be made available
online shortly afterwards.
E.2. Constructive use of general meetings
We value the AGM as a major forum for engaging with
investors, and retail investors in particular. All Directors
attend, and an update is given on the Company’s performance.
Shareholders are encouraged to ask questions to individual
Directors and the Chairmen of the Board Committees are
available for specific questions relating to Audit, Nomination
and Remuneration matters.
The Directors are also available to meet with Shareholders
on an individual basis after the AGM.
AGM 2018
The last AGM was held in London on 25 May 2018 with all
Directors in attendance. A poll was taken on each resolution
and all were passed by the required majority.
The Board noted the voting outcome on the resolutions in
relation to Informa’s updated Directors’ Remuneration Policy and
the amendments to the Long-Term Incentive Plan, which received
64.2% and 69.5% support from Shareholders respectively.
Informa maintains a regular dialogue with its Shareholders
to establish an open forum for discussion on key market
and Company-specific issues, and the Board had consulted
extensively before the proposals were put to the AGM. It was
clear at the time that there were many differing views, which
were reflected in the minority vote against these resolutions.
In line with the majority of our Shareholders, the Board firmly
believe the updated Directors’ Remuneration Policy is in the
best interests of the Company. However, given our clear
commitment to governance best practice and proactive
stakeholder engagement, the Board has since written to all its
major Shareholders inviting further discussion, and a series of
face-to-face meetings took place in early 2019. Further details
are given on page 114 of the Directors’ Remuneration Report.
AGM 2019
The 2019 AGM will be held on Friday 24 May 2019 at 240
Blackfriars Road, London SE1 8BF at 11.00 am. The formal
Notice of Meeting is being dispatched as a separate document
to all Shareholders and is also available on Informa’s website.
It sets out the resolutions to be proposed at the AGM and an
explanation of each resolution.
All members are invited to attend the AGM and, as required
by the 2016 Code, at least 20 working days’ notice is given
to allow Shareholders time to consider the resolutions being
proposed. Shareholders are encouraged to attend in person
or may appoint a proxy if they are unable to do so. Details on
proxy appointments and the voting process can be found in
the Notice of Meeting.
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INFORMA PLC ANNUAL REPORT 2018 Governance
Directors’ Report and other statutory information
Directors’ Report and
other statutory information
The Directors present their Report on the affairs of the Group
together with the audited financial statements and report of
the auditor for the year ended 31 December 2018.
This Directors’ Report forms part of the Strategic Report of the
Company as required by the Companies Act 2006 (Strategic
Report and Directors’ Report) Regulations 2013. The Strategic
Report also forms the Management Report for the purposes
of Disclosure and Transparency Rule 4.1.8R and includes the
reporting requirements of the EU Non-Financial Reporting
Directive. Information that is relevant to the report, and
information required in accordance with the Companies Act
2006 and Listing Rule 9.8.4R, is incorporated by reference and
can be found in the following sections:
Section in Annual Report
Page
Information
Future developments
of the Company
Strategic Report
Risk factors and principal risks
Strategic Report
Use of financial instruments,
financial risk management
objectives and policies
Sustainability
Strategic Report
Strategic Report
Greenhouse gas emissions
Strategic Report
Viability and going concern
statements
Governance arrangements
Directors
Employment policies and
employee involvement
Strategic Report
Governance
Governance
Strategic Report
Post balance sheet events
Financial statements
Dividends
Strategic Report
4–75
62–72
Note 32
195–203
17, 36, 60
60
73–75
90–133
94–95
30–32
221
84
Articles of Association
The Company’s Articles of Association (Articles) may only
be amended by special resolution at a general meeting of
Shareholders. The Articles are available on the Company’s
website: http://www.informa.com.
Directors
The names and biographical details of all the Directors and
details of their Board Committee membership are set out on
pages 94 and 95.
In accordance with the Articles and the 2016 Code, all continuing
Directors will offer themselves for election or re-election by
Shareholders at the 2019 AGM.
Directors’ interests
Details of the remuneration paid to the Directors, their interests
in the shares of the Company and any awards granted to the
Executive Directors under any of the Company’s all-employee
or executive share schemes are set out in the Directors’
Remuneration Report on pages 113 to 125. The service contracts
of the Executive Directors and the letters of appointment of
the Non-Executive Directors are summarised in the Directors’
Remuneration Report and are available for inspection at the
Company’s registered office.
No Director had a material interest in any contract in relation
to the Company’s business at any time during the year.
Appointment and replacement of Directors
The rules for appointment and replacement of the Directors
are set out in the Articles. Directors can be appointed by
ordinary resolution of the Company or by the other members
of the Board. The Company can remove a Director from office,
including by the passing an ordinary resolution, or by notice
being given by all of the other members of the Board.
Powers of the Directors
The powers of the Directors are set out in the Articles and
provide that the Board may exercise all the powers of the
Company. The Company may by ordinary resolution authorise
the Board to issue shares, and increase, consolidate, sub-divide
and cancel shares in accordance with its Articles and English law.
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Governance
Directors’ Report and other statutory information continued
Directors’ indemnities
The Company has agreed to indemnify the Directors, to the
extent permitted by English law and the Articles, in respect of any
liability arising from or in connection with the execution of their
powers, duties and responsibilities as a Director of the Company,
any of its subsidiaries or as a Trustee of an occupational pension
scheme for colleagues. The indemnity would not provide
coverage where the Director is proved to have acted fraudulently
or dishonestly. The Company purchases and maintains Directors’
and Officers’ insurance cover against certain legal liabilities and
costs for claims in connection with any act or omission by its
Directors and officers in the execution of their duties.
Substantial shareholdings
As at 31 December 2018, the Company had received notice
in accordance with the Financial Conduct Authority’s (FCA)
Disclosure and Transparency Rules (DTR 5) of the following
notifiable interests in the Company’s issued share capital.
The information provided below was correct at the date of
notification to the Company:
Shareholder
BlackRock, Inc.
Newton Investment Management Limited
Lazard Asset Management LLC
Artemis Investment Manager LLP
Invesco Ltd
APG Asset Management N.V.
%
Shareholding
5.49%
5.30%
4.30%
3.59%
3.56%
3.49%
No additional notifications have been received by the Company
between 31 December 2018 and the date of this report.
All notifications made to the Company under DTR 5 are
published on the Regulatory Information Service and made
available on the Investors section of our website.
Share capital
Informa PLC is a public company limited by shares and
incorporated in England and Wales. It has a premium listing
on the London Stock Exchange and is the holding company
of the Informa Group of companies.
The Company has one class of shares, being Ordinary Shares
of 0.1p each, all of which are fully paid. As at 31 December 2018,
the Company’s issued share capital comprised 1,251,798,534
Ordinary Shares of 0.1p each.
During the year, 427,536,794 new Ordinary Shares were issued
pursuant to the recommended offer by the Company for UBM
plc which was completed on 15 June 2018. A further 256,689
shares were issued during the year to satisfy awards under
UBM plc’s Save As You Earn share scheme.
130
At the 2018 AGM, the Directors were granted authority by the
Shareholders to make market purchases of Ordinary Shares
representing up to 10% of its issued share capital at that time,
being 82,400,505 Ordinary Shares. This authority, which has
not been exercised during the year ended 31 December 2018
or to the date of this report, will expire at the conclusion of
the 2019 AGM, when the Directors intend to propose that the
authority is renewed.
See Note 35 for further information on the Company’s
share capital.
Rights and obligations attaching to shares
The rights attaching to the Company’s Ordinary Shares are set
out in the Articles, available on the Company’s website. Subject
to relevant legislation, any share may be issued with or have
attached to it such preferred, deferred or other special rights
and restrictions as the Company may by ordinary resolution
decide or, if no such resolution is in effect, or so far as the
resolution does not make specific provision, as the Board
may decide. No such resolution is currently in effect.
The Company may pass an ordinary resolution to declare a
dividend to be paid to holders of Ordinary Shares subject to
the recommendation of the Board as to the amount. On
liquidation, holders of Ordinary Shares may share in the assets
of the Company. Holders of Ordinary Shares are also entitled
to receive the Company’s Annual Report and, subject to certain
thresholds being met, may requisition the Board to convene
a general meeting or the proposal of resolutions at AGMs.
None of the Ordinary Shares carry any special rights with
regard to control of the Company.
Voting rights
Holders of Ordinary Shares are entitled to attend and speak at
general meetings of the Company and to appoint one or more
proxies or, if the holder of shares is a corporation, a corporate
representative. On a show of hands, each holder of Ordinary
Shares who, being an individual, is present in person, or,
being a corporation, is present by a duly appointed corporate
representative not being themselves a member, shall have one
vote and on a poll, every holder of Ordinary Shares present in
person or by proxy shall have one vote for every share of which
they are the holder. Electronic and paper proxy appointments
and voting instructions must be received no later than 48 hours
before a general meeting. A holder of Ordinary Shares can lose
the entitlement to vote at general meetings where that holder
has been served with a disclosure notice and has failed to
provide the Company with information concerning interests
held in those shares. Except as set out above and as permitted
under applicable laws, there are no limitations on voting rights
of holders of a given percentage, number of votes or deadlines
for exercising voting rights.
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INFORMA PLC ANNUAL REPORT 2018 Restrictions on transfer of securities in the Company
There are no restrictions on the transfer of securities in the
Company, except that:
Political donations
Neither the Company nor the Group made any political
donations during the financial year (2017: nil).
•
•
•
•
the Directors may from time to time refuse to register a
transfer of a certificated share which is not fully paid,
provided it meets the requirements given under the Articles;
transfers of uncertificated shares must be carried out using
CREST and the Directors can refuse to register a transfer of
an uncertificated share in accordance with the regulations
governing the operation of CREST;
legal and regulatory restrictions may be put in place from
time to time, for example insider-trading laws;
in accordance with the Listing Rules of the FCA, the Directors
and certain employees of the Company require approval to
deal in the Company’s shares;
• where a Shareholder with at least a 0.25% interest in the
Company’s certificated shares has been served with a
disclosure notice and has failed to provide the Company
with information concerning interests in those shares; or
the Directors may decide to suspend the registration of
transfers, for up to 30 days a year, by closing the register of
Shareholders. The Directors cannot suspend the registration
of transfers of any uncertificated shares without obtaining
consent from CREST.
•
Overseas branches
The Company operates branches in the following countries:
Australia, China, Hong Kong, Ireland, Japan, Luxembourg,
Malaysia, the Netherlands, Singapore, South Africa, South
Korea, Switzerland, Taiwan, the UAE, the US and Vietnam.
Audit and auditor
Each of the Directors at the date of approval of this report
confirms that:
•
•
to the best of their knowledge there is no relevant audit
information that has not been brought to the attention
of the auditor; and
they have taken all steps required of them to make
themselves aware of any relevant audit information
and to establish that the Company’s auditor was aware
of that information.
This confirmation is given and should be interpreted in accordance
with the provisions of section 418 of the Companies Act 2006.
There are no agreements between holders of Ordinary Shares
that are known to the Company which may result in restrictions
on the transfer of securities or on voting rights.
Deloitte LLP has indicated its willingness to continue in office
as auditor and, on the recommendation of the Audit Committee,
a resolution to reappoint Deloitte as the Company’s auditor will
be proposed at the 2019 AGM.
Shares held on trust
From time to time, shares are held by a Trustee in order to
satisfy entitlements of employees to shares under the Group’s
share schemes. Usually the shares held on trust are no more
than sufficient to satisfy the requirements of the Group’s share
schemes for one year. The shares held by these trusts do not
have any special rights with regard to control of the Company.
While these shares are held on trust, their rights are not
exercisable directly by the relevant employees. The current
arrangements concerning these trusts and their shareholdings
are set out in Note 36.
Change of control
There are no significant agreements to which the Company
is a party that take effect, alter or terminate upon a change of
control following a takeover bid except for the Group’s principal
borrowings described in Note 29. The Company does not have
agreements with any Director or employee that would provide
compensation for loss of office or employment resulting from
a change of control on takeover, except that provisions in the
Company’s share schemes and plans may cause options and
awards granted to employees under such schemes and plans
to vest on a change of control on takeover.
Colleague engagement
Informa has a continuous and proactive programme of internal
communications and colleague engagement activities, designed
to support and inform colleagues and foster a dynamic and
engaged culture throughout the Group.
Further details are given on pages 30 to 36. Colleagues are kept
informed about major Group and divisional developments by
various digital, physical and in-person channels, including written
and video blogs from the Group Chief Executive, divisional
newsletters, email campaigns, stories and discussions on
the Group’s Portal digital workspace and both in person and
through online town halls and meetings. Colleagues are also
able to chat, share ideas and ask questions using the Portal’s
social capabilities and are encouraged to create local groups
and forums based around activities and topics of interest.
Colleagues receive regular updates on the Company’s
performance and the Group Chief Executive holds an online
town hall to coincide with half-year and full-year results, as well
as at other times, where colleagues can ask questions directly.
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Governance
Directors’ Report and other statutory information continued
The Group actively seeks feedback from colleagues on their
experience of working in the Company and takes that feedback
into account when prioritising investment in talent and workplaces
among other matters. Informa was, once again, named as a UK
Top Employer for 2018 by the Top Employers Institute.
Equal opportunities
Informa sets great store by diversity and aims to attract and
retain talented colleagues with a wide range of backgrounds,
skills and experiences. This breadth is both an essential business
need and, the Group believes, the only and right way to operate.
We recognise the value that differences bring, including but
not limited to difference of gender, age, race, nationality,
social background, professional and personal experiences
and preferences. We comply fully with all national equal
opportunities legislation and make recruitment and
promotion decisions based solely on the ability to perform
each role. Colleagues, and potential colleagues, receive
the same treatment regardless of age, gender, sexual
orientation, disability, ethnicity or religion. In the event
that a colleague’s circumstances change, every effort is
made to ensure that their employment with the Group
continues including, where possible, providing specialised
training and adjusting their working environment.
The Directors’ Report was approved by the Board on
6 March 2019 and signed on its behalf by
Gareth Wright
Group Finance Director
Informa PLC
Company Number: 08860726
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INFORMA PLC ANNUAL REPORT 2018 Directors’ responsibilities
Statement of Directors’ responsibilities
The Directors are responsible for preparing the Annual Report,
the Directors’ Remuneration Report and the financial
statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the
Directors are required to prepare the Group financial
statements in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the European
Union and Article 4 of the International Accounting Standards
(IAS) Regulation and have elected to prepare the Parent
Company financial statements in accordance with United
Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards and applicable law), including
FRS 102 The Financial Reporting Standard applicable in the UK
and Republic of Ireland.
Under Company law, the Directors must not approve the
financial statements unless they are satisfied that they give
a true and fair view of the state of affairs of the Group and
the Company and of the profit or loss of the Group for that
period. In preparing the Parent Company financial statements,
the Directors are required to:
• select suitable accounting policies and then apply
them consistently;
• make judgements and accounting estimates that are
reasonable and prudent;
• state whether applicable UK Accounting Standards have
been followed, subject to any material departures disclosed
and explained in the financial statements; and
• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
In preparing the Group financial statements, IAS 1 requires
that Directors:
• properly select and apply accounting policies;
• present information, including accounting policies,
in a manner that provides relevant, reliable, comparable
and understandable information;
• provide additional disclosures when compliance with the
specific requirements in IFRSs are insufficient to enable users
to understand the impact of particular transactions, other
events and conditions on the entity’s financial position and
financial performance; and
• make an assessment of the Company’s ability to continue
as a going concern.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company’s
transactions and disclose with reasonable accuracy at any time
the financial position of the Company and the Group and enable
them to ensure that the financial statements and the Directors’
Remuneration Report comply with the Companies Act 2006
and, as regards the financial statements, Article 4 of the IAS
Regulation. They are also responsible for safeguarding the
assets of the Company and the Group and hence for taking
reasonable steps for the prevention and detection of fraud
and other irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company’s website. Legislation in the UK governing the
preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
In accordance with DTR 4.1.12R, the Directors, whose names
and roles appear on pages 94 and 95 confirm that to the best
of their knowledge:
•
•
the Consolidated Financial Statements, which have been
prepared in accordance with IFRSs as adopted by the EU, give
a true and fair view of the assets, liabilities, financial position
and profit of the Group and the Parent Company; and
the Management Report (which includes the Strategic
Report and the Directors’ Report) includes a fair review
of the development and performance of the business and
the position of the Group, together with a description of
the principal risks and uncertainties that it faces.
In addition, each of the Directors as at the date of this report
considers the Annual Report and financial statements, taken
as a whole, is fair, balanced and understandable and provides
the information necessary for Shareholders to assess the
Company’s position, performance, business model and strategy.
Approved by the Board and signed on its behalf by
Gareth Wright
Group Finance Director
6 March 2019
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Financial Statements
Independent Auditor’s report to the members of Informa PLC
Independent Auditor’s report
to the members of Informa PLC
Report on the audit of the financial statements
Opinion
In our opinion:
•
•
•
•
the financial statements of Informa PLC and its
subsidiaries (the “Group”) give a true and fair view of
the state of the Group’s and of the parent company’s
affairs as at 31 December 2018 and of the Group’s profit
for the year then ended;
the Group financial statements have been properly prepared
in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the European Union;
the parent company financial statements have been properly
prepared in accordance with United Kingdom Generally
Accepted Accounting Practice, including FRS 102 “The
Financial Reporting Standard applicable in the UK and
Republic of Ireland”; and
the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006 and,
as regards the Group financial statements, Article 4 of
the IAS Regulation.
We have audited the financial statements which comprise:
•
•
•
•
•
•
•
the Consolidated Income Statement;
the Consolidated Statement of Comprehensive Income;
the Consolidated and Parent Company Balance Sheets;
the Consolidated Cash Flow Statement;
the Consolidated and Parent Company Statements
of Changes in Equity;
the related notes 1 to 42 to the Consolidated Financial
Statements; and
the related notes 1 to 12 to the Parent Company
Financial Statements.
The financial reporting framework that has been applied in
the preparation of the Group financial statements is applicable
law and IFRSs as adopted by the European Union. The financial
reporting framework that has been applied in the preparation
of the parent company financial statements is applicable law
and United Kingdom Accounting Standards, including FRS 102
“The Financial Reporting Standard applicable in the UK and
Republic of Ireland” (United Kingdom Generally Accepted
Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further
described in the auditor’s responsibilities for the audit
of the financial statements section of our report.
We are independent of the Group and the parent company in
accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the
Financial Reporting Council’s (the FRC’s) Ethical Standard as
applied to listed public interest entities, and we have fulfilled
our other ethical responsibilities in accordance with these
requirements. We confirm that the non-audit services
prohibited by the FRC’s Ethical Standard were not provided
to the Group or the parent company.
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
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INFORMA PLC ANNUAL REPORT 2018 Summary of our audit approach
Key audit
matters
The key audit matters that we identified in the current year were:
•
•
•
the valuation of intangible assets acquired through the business combination with UBM;
the recoverability of the carrying value of goodwill and intangible assets; and
the timing of revenue recognition.
In 2017, we identified the phased implementation of the Group’s SAP system as a key audit matter. This is no
longer a key audit matter in 2018, as the implementation is substantially complete and deficiencies identified
in 2017 have been remediated.
In 2017, we identified a key audit matter in relation to the identification and valuation of intangible assets and
associated goodwill in business combinations; we continue to consider this a key audit matter, which in 2018,
is specifically in relation to the acquisition of UBM.
Materiality
The audit materiality that we agreed with the Audit Committee for the current year was £27.0 million. This
represents 5% of statutory pre-tax profit adjusted for impairment charges and amortisation of intangible
assets acquired in business combinations.
The increase in materiality over the prior year materiality figure (£22.0 million) reflects the inclusion of the
post-combination results of UBM, acquired on 15 June 2018.
Scoping
Following the UBM combination, we have reassessed the audit scope for the enlarged Group, in order to
reflect the business operations, finance function structure, and geographic scope of UBM. Similar to Informa,
UBM’s finance function is primarily structured through shared service centres in each region.
We performed full scope audits or specified audit procedures at the principal business units within the
enlarged Group’s shared service centres in the UK, USA, China, Hong Kong and Singapore. These in-scope
locations represent the principal business units within the Group’s operating divisions and account for 73%
(2017: 72%) of the Group’s revenue and 78% (2017: 74%) of the Group’s adjusted operating profit.
Our planned audit approach was discussed with the Audit Committee in May 2018, prior to the UBM combination.
Following the combination in June 2018 and our appointment as auditor to the enlarged Group, our audit plan
was revised. The most significant changes to our audit plan were in relation to:
Significant
changes in
our approach
• an increase in audit materiality to reflect UBM’s post-acquisition contribution to the Group’s results;
•
the inclusion of a number of new components in our audit scope to incorporate UBM’s primary regional
finance functions;
the identification of a key audit matter in relation to valuation of intangible assets acquired through the
UBM business combination;
the identification of a controls approach for the legacy-UBM business, which included a controls-reliant
audit approach for the purchase-to-pay cycle; and
the extension of our analytics approach to legacy-UBM components.
•
•
•
Our revised audit plan was discussed with the Audit Committee in November 2018; there have been no
significant changes in our approach since then.
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Conclusions relating to going concern, principal risks and viability statement
Going concern
We have reviewed the directors’ statement in Note 2 to the financial statements about whether they
considered it appropriate to adopt the going concern basis of accounting in preparing them and their
identification of any material uncertainties to the Group’s and company’s ability to continue to do
so over a period of at least twelve months from the date of approval of the financial statements.
We confirm that we have
nothing material to report,
add or draw attention to in
respect of these matters.
We considered as part of our risk assessment the nature of the Group, its business model and
related risks including where relevant the impact of Brexit, the requirements of the applicable
financial reporting framework and the system of internal control. We evaluated the directors’
assessment of the Group’s ability to continue as a going concern, including challenging the
underlying data and key assumptions used to make the assessment, and evaluated the directors’
plans for future actions in relation to their going concern assessment.
We are required to state whether we have anything material to add or draw attention to in relation
to that statement required by Listing Rule 9.8.6R(3) and report if the statement is materially
inconsistent with our knowledge obtained in the audit.
Principal risks and viability statement
Based solely on reading the directors’ statements and considering whether they were consistent
with the knowledge we obtained in the course of the audit, including the knowledge obtained in
the evaluation of the directors’ assessment of the Group’s and the company’s ability to continue
as a going concern, we are required to state whether we have anything material to add or draw
attention to in relation to:
•
•
•
the disclosures on pages 64 to 72 that describe the principal risks and explain how they are
being managed or mitigated;
the directors’ confirmation on page 63 that they have carried out a robust assessment of the
principal risks facing the Group, including those that would threaten its business model, future
performance, solvency or liquidity; or
the directors’ explanation on pages 73 to 75 as to how they have assessed the prospects
of the Group, over what period they have done so and why they consider that period to be
appropriate, and their statement as to whether they have a reasonable expectation that
the Group will be able to continue in operation and meet its liabilities as they fall due over
the period of their assessment, including any related disclosures drawing attention to any
necessary qualifications or assumptions.
We are also required to report whether the directors’ statement relating to the prospects of the
Group required by Listing Rule 9.8.6R(3) is materially inconsistent with our knowledge obtained
in the audit.
We confirm that we have
nothing material to report,
add or draw attention to in
respect of these matters.
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INFORMA PLC ANNUAL REPORT 2018 Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to
fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy; the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
The valuation of intangible assets acquired through the business combination with UBM
Key audit matter
description
On 15 June 2018, Informa acquired 100% of the issued share capital of UBM plc for £4.2 billion.
How the scope of our
audit responded to the
key audit matter
The key audit matter identified relates to the valuation of the acquired intangible assets and, in particular,
to the appropriateness of the assumptions used in the valuation methodology. This includes the revenue
and contribution forecasts used in the model, and the acquisition model assumptions such as customer
retention rates, royalty rates, discount rates and expected lives over which projections are forecast.
Management have engaged independent valuation specialists to assist with the valuation of acquired
intangible assets, which primarily relate to trade names and customer relationships. Provisionally,
£2,315.7 million of intangible assets have been recognised in relation to the UBM combination.
Management discusses the policies and procedures around business combinations in Note 2, and
discloses business combinations in Note 18 to the Consolidated Financial Statements. In Note 3, the
valuation of intangible assets acquired in business combinations is identified by management as a
critical accounting judgement.
This judgement area is also referred to within the Audit Committee report on page 107.
We assessed the design and implementation of controls around the valuation of intangible assets in the
UBM combination, including management’s review controls around the work of the valuation specialists.
Our procedures to respond to this key audit matter included the following:
• We engaged Deloitte internal valuation specialists to assist in testing the key assumptions used within
the valuation process. Our specialists reviewed the valuation approaches applied for reasonableness,
and benchmarked the input assumptions, including discount rates and customer retention rates, to
external data.
• Our valuation specialists also considered the appropriateness of the valuation model methodology
against applicable standards and accepted valuation practices.
• We tested the underlying revenue and contribution forecasts used in the valuation model by
challenging the growth assumptions within the 3-year-plan on a Group-wide basis as well as
for a sample of individual events, based on historical performance, and our understanding
of developments within the business and the wider industry.
Key observations
We reported to the Audit Committee that out audit procedures were performed satisfactorily and
we did not identify any material exceptions as a result of our audit procedures.
We note that management has elected to show the fair value amounts within Note 18 as provisional
as permitted by IFRS 3 for finalisation within 12 months of the acquisition date.
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The recoverability of the carrying value of goodwill and intangible assets
Key audit matter
description
The Group has expanded significantly through acquisition. As at 31 December 2018, total
goodwill and intangible assets were stated at £6,257.3 million and £3,910.3 million respectively
(2017: £2,608.2 million and £1,701.4 million respectively). The UBM combination resulted in an
additional £3,470.0 million goodwill and £2,315.7 million intangible assets being recognised.
Where goodwill exists, accounting standards require that management perform an annual impairment
test, computing the “recoverable amount” based on the higher of “value in use” and “fair value less
costs to sell”. The recoverable amount is then compared to the balance sheet carrying value of each
cash generating unit or group of cash generating units (CGU). This same impairment test is required for
intangible assets where indicators of potential impairment have been identified. This year management
have performed their impairment assessment in respect of goodwill on a divisional basis by aggregating
the CGUs at the divisional level, reflecting the level at which they monitor goodwill.
To perform its impairment review, management prepares forecasts for three years, using the budget
for year one and the strategic plan for years two and three, and then applies a terminal value beyond
year three using growth factors and discount rates applicable for each CGU. The selection of the growth
rates and the discount rate assumptions requires judgement and is fundamental to this audit risk.
Management engages independent expert valuation advisers to assist in deriving appropriate
long-term growth rates and discount rates.
We considered the recoverability of the carrying value of goodwill and intangible assets as a key audit
matter for two reasons:
•
the significant amount of audit resources and effort applied in respect of testing the impairment
review of goodwill and intangible assets. This reflects the significance of the carrying value of
goodwill and intangible assets on the Group balance sheet; and
• we identified a significant risk of material misstatement in respect of two specific CGUs.
The carrying value of these CGUs at the date of the impairment review was £44.8 million and
£56.8 million respectively. The assessment that led to the identification of these CGUs as being
at significant risk of material misstatement focussed on performance against budget in 2018
and the prior year and where the level of headroom relative to the carrying value is small.
Management discusses the policies and processes followed in respect of the impairment review
in Notes 2 and 16 to the Consolidated Financial Statements, and impairment of assets is identified
as a key source of estimation uncertainty in Note 3. This key source of estimation uncertainty is also
referred to within the Audit Committee report on page 107.
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INFORMA PLC ANNUAL REPORT 2018
How the scope of our
audit responded to
the key audit matter
We audited management’s impairment review for goodwill and other intangible assets using a range of
audit procedures. The audit procedures that we performed with respect to all CGUs included the following:
Assessing management’s methodology:
• obtaining an understanding of the basis of preparation of the forecasts and impairment review, and
assessing the design and implementation of key controls within the impairment review process;
• assessing recent forecasting accuracy against actual performance;
• assessing the impairment review of goodwill at both an individual CGU, and an aggregation of
CGUs, basis for this year, reflecting 2018 being a transition year in terms of the approach taken
by management to the goodwill impairment review;
involving our internal valuation specialists to assess the appropriateness of the key assumptions
including the discount rates and long-term growth rates prepared by management’s expert valuation
adviser; and
•
• considering the reasonableness of sensitivities applied by management and reperforming this
sensitivity analysis.
Assessing the cash flow forecasts:
• determining whether the 2019 forecast performance for each CGU was consistent with the budgets
adopted by management and approved by the Board of Directors;
• assessing the appropriateness of short-term forecasts for each CGU against historical performance
to assess the reasonableness of the budgets; and
• determining whether the growth rates selected by management were reasonable, in line with the
requirements of accounting standards and reflected industry trends. We involved our internal
valuations specialists in these procedures.
The incremental audit procedures that we performed in respect of the two CGUs that we identified
as being at a significant risk of material misstatement were:
• assessing the design and implementation of key controls within the budget preparation and
•
•
review process in relation to these specific CGUs;
further challenging the cash flow forecasts used within the impairment model based on our
understanding of the business and developments within the year, discussions with finance and
divisional management, and external industry information;
further considering historical forecasting accuracy by comparing actual performance to budgets
over a 5-year lookback period;
• performing breakeven analysis to identify the period over which the CGU’s carrying value would be
recovered by forecast cash flows; and
• performing further sensitivity analyses on the impairment model for the two CGUs identified, based
on historical performance against budget.
Key observations
We reported to the Audit Committee that the audit response procedures were performed satisfactorily
and that the assumptions management had applied in their impairment review were reasonable.
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The timing of revenue recognition
Key audit matter
description
The specific nature of the risk of material misstatement in revenue recognition varies across the
Group’s revenue streams and operating divisions. We identified a risk in relation to the cut-off of
revenue and whether the release of deferred revenue is allocated appropriately; this was identified
as an area of potentially fraudulent management manipulation, as required by auditing standards.
How the scope of our
audit responded to
the key audit matter
In respect of the events revenue stream, within the Global Exhibitions, Knowledge & Networking
and UBM divisions, customers are generally billed in advance and a key risk in revenue recognition
is that revenue from events and conferences might be recognised in the wrong period, particularly
if events are held close to year-end.
In respect of subscriptions revenue within the Academic Publishing, Business Intelligence and
UBM divisions, we identified a risk that the deferral and release of subscription revenues does
not appropriately match the subscription period in customer contracts.
In Academic Publishing, for the unit sales revenue stream, we identified a key risk relating to sales
cut-off, being that revenue for books or e-books is not recognised in line with the agreed delivery terms,
and that expected post year end returns are not appropriately provided for.
The Group’s revenue recognition accounting policies are disclosed in Note 2 to the Consolidated
Financial Statements with an analysis by revenue stream and by segment in Notes 5 and 6 respectively.
We confirmed our understanding of each of the divisions’ business models and our understanding of the
principles set out in customer contracts and the sales process. We then confirmed our understanding
of the design and implementation of controls by performing sample transaction walkthroughs of the
revenue recording process, from order processing to invoice production through to cash collection.
These procedures enabled us to design and perform substantive audit procedures to respond to each
of the specific risks of material misstatement we identified.
The procedures we performed across the entities within our audit scope included the following:
•
•
•
In relation to events revenue:
– we performed detailed testing of a sample of transactions, obtaining invoices, payments,
exhibitor contracts and evidence of event occurrence to determine whether revenue was
recognised at the appropriate time; and
– we used data analytics techniques to identify the revenue and cost profile of all events in
the year, comparing this to the calendar of events and testing occurrence by reference to
third party sources.
In relation to subscriptions revenue:
– we performed detailed testing of a sample of subscription transactions, obtaining and reviewing
the relevant order confirmations and contracts to validate whether revenue was appropriately
recorded across the term; and
– we used data analytics techniques to recalculate the deferred revenue in relation to subscription
revenue for contracts spanning the year end.
In relation to unit sales revenue:
– we performed detailed testing of a sample of transactions close to year end, examining supporting
documentation to determine whether revenue recognition criteria has been met and whether the
revenue has been appropriately recognised in the period or deferred at the period end.
Key observations
We reported to the Audit Committee that our audit procedures were performed satisfactorily.
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INFORMA PLC ANNUAL REPORT 2018
Our application of materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic
decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope
of our audit work and in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Materiality
Basis for
determining
materiality
Group financial statements
£27.0 million (2017: £22.0 million)
Parent company financial statements
£10.8 million (2017: £11.0 million)
Our materiality is based on a percentage of statutory
pre-tax profit adjusted for impairment charges and
amortisation of intangible assets acquired in business
combinations. £27.0 million represents 5% of this
measure (2017: 5%).
£27.0 million represents 9.2% of statutory profit
before tax (2017: 8.3%) and 4.2% of reported
adjusted profit before tax (2017: 4.5%).
Materiality is capped at 40% of Group materiality
(2017: 50%), which equates to 0.1% of net assets
(2017: 0.3% of net assets).
Rationale for the
benchmark applied
We adjust for impairment charges and amortisation
of intangible assets acquired in business combinations
to use a profit measure also used by analysts, and
because profits adjusted for these items more closely
align with current cash flows.
Net assets is typically considered an appropriate
benchmark for materiality as the parent company
is a holding company, but given the quantum of the
net assets on the parent company balance sheet we
have limited materiality to 40% of Group materiality.
We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of £1.3 million
(2017: £1.1 million), as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds.
We also report to the Audit Committee on disclosure matters that we identified when assessing the overall presentation of the
financial statements.
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including Group-wide controls, and
assessing the risks of material misstatement at the Group level. Following the UBM combination, we have reassessed the audit scope
for the enlarged Group, in order to reflect the business operations, finance function structure, and geographic scope of UBM. Similar
to Informa, UBM’s finance function is primarily structured through shared service centres in each region.
Based on that assessment, we performed full scope or specified audit procedures at the principal business units within the legacy-
Informa shared service centres in Colchester (UK), Sarasota, Florida (USA), Cleveland, Ohio (USA) and Singapore. We also performed
full scope or specified audit procedures at the principal business units within the legacy-UBM business in Kent (UK), New York (USA),
Shanghai (China), Hong Kong, and Singapore. The parent company is located in the UK and audited directly by the Group audit team.
The in-scope locations (those at which a full scope audit or specified audit procedures were performed as part of the Group audit)
represent 73% (2017: 72%) of the Group’s revenue and 79% (2017: 74%) of the Group’s adjusted operating profit. The Group audit
team directly audit the entirety of the Group’s goodwill and acquired intangible assets. Our audit work at all the locations in the
Group audit scope was executed to a materiality of up to £14.9 million, and therefore not exceeding 55% of Group materiality
of £27.0 million.
Full audit scope
Specified audit procedures
Review at Group level
Revenue
65%
8%
27%
100%
Adjusted
operating
profit
68%
10%
22%
100%
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Independent Auditor’s report to the members of Informa PLC continued
At the Group level, we also tested the consolidation process and carried out analytical procedures to confirm our conclusion that
there were no significant risks of material misstatement in the aggregated financial information of the remaining components not
subject to audit.
IT specialists within the Group team tested the Group’s two main ERP systems, SAP ECC (legacy-Informa) and Oracle (legacy-UBM),
centrally. We tested the design, implementation and operating effectiveness of key controls within the legacy-UBM purchase-to-pay
cycle and relied on these controls in the execution of our audit procedures.
The Group audit team continued to follow a programme of planned visits that has been designed so that the Senior Statutory Auditor
or a designate visits each of the locations in the Group audit scope at least once every two years and the most significant of them
at least once a year. In the course of the 2018 audit, visits were undertaken to all of the audit locations identified above with the
exception of Cleveland, Ohio (USA), which was visited in 2017 and 2016. For each component, we included the component audit team
in our team briefings, to discuss the Group risk assessment and audit instructions, to confirm their understanding of the business,
and to discuss their local risk assessment. Throughout the audit, we maintained regular contact in order to support and direct their
audit approach. We also attended (either in person or dial in) local audit close meetings with local management, performed on-site
or remote reviews of their working papers, and reviewed their reporting to us of the findings from their work.
Other information
The directors are responsible for the other information. The other information comprises the
information included in the annual report, other than the financial statements and our auditor’s
report thereon.
We have nothing to report
in respect of these matters.
Our opinion on the financial statements does not cover the other information and, except to
the extent otherwise explicitly stated in our report, we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the audit or otherwise appears to
be materially misstated.
If we identify such material inconsistencies or apparent material misstatements, we are required
to determine whether there is a material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are required to report that fact.
In this context, matters that we are specifically required to report to you as uncorrected material
misstatements of the other information include where we conclude that:
•
fair, balanced and understandable – the statement given by the directors that they consider the
annual report and financial statements taken as a whole is fair, balanced and understandable
and provides the information necessary for shareholders to assess the Group’s position and
performance, business model and strategy, is materially inconsistent with our knowledge
obtained in the audit; or
• Audit Committee reporting – the section describing the work of the Audit Committee does not
appropriately address matters communicated by us to the Audit Committee; or
• directors’ statement of compliance with the UK Corporate Governance Code – the parts of the
directors’ statement required under the Listing Rules relating to the company’s compliance with
the UK Corporate Governance Code containing provisions specified for review by the auditor
in accordance with Listing Rule 9.8.10R(2) do not properly disclose a departure from a relevant
provision of the UK Corporate Governance Code.
142
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INFORMA PLC ANNUAL REPORT 2018 Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is
necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s and the parent company’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the Group or the parent company or to cease operations, or have
no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
Details of the extent to which the audit was considered capable of detecting irregularities, including fraud are set out below.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Extent to which the audit was considered capable of detecting irregularities, including fraud
We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design
and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to
provide a basis for our opinion.
Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws
and regulations, our procedures included the following:
• enquiring of management, internal audit, and the Audit Committee, including obtaining and reviewing supporting documentation,
concerning the Group’s policies and procedures relating to:
– identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;
– detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;
– the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations;
• discussing among the engagement team including significant component audit teams and involving relevant internal specialists,
including tax, valuations, pensions, IT, and analytics specialists regarding how and where fraud might occur in the financial
statements and any potential indicators of fraud; and
• obtaining an understanding of the legal and regulatory framework that the Group operates in, focusing on those laws and
regulations that had a direct effect on the financial statements or that had a fundamental effect on the operations of the Group.
The key laws and regulations we identified that have a direct effect on the determination of the financial statements are the UK
Companies Act, Listing Rules, pensions legislation and tax legislation. Other key laws and regulations which could have a material
effect on the financial statements include GDPR, anti-bribery legislation and anti-money laundering regulations.
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143
INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Financial Statements
Independent Auditor’s report to the members of Informa PLC continued
Audit response to risks identified
As a result of performing the above procedures, we identified the timing of revenue recognition as a key audit matter. The key
audit matters section of our report explains this matter in more detail and also describes the specific procedures we performed
in response to that key audit matter.
In addition to the above, our procedures to respond to risks identified included the following:
• reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with relevant laws
and regulations discussed described as having a direct effect on the financial statements above;
• enquiring of management, the Audit Committee and in-house legal counsel concerning actual and potential litigation and claims;
• performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material
misstatement due to fraud;
• reading minutes of meetings of those charged with governance and reviewing internal audit reports; and
•
in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other
adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and
evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members including
internal specialists and significant component audit teams, and remained alert to any indications of fraud or non-compliance with
laws and regulations throughout the audit.
Report on other legal and regulatory requirements
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the directors’ remuneration report to be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
•
•
the information given in the strategic report and the directors’ report for the financial year for which the financial statements
are prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and of the parent company and their environment obtained in the
course of the audit, we have not identified any material misstatements in the strategic report or the directors’ report.
Matters on which we are required to report by exception
Adequacy of explanations received and accounting records
Under the Companies Act 2006 we are required to report to you if, in our opinion:
We have nothing to report
in respect of these matters.
• we have not received all the information and explanations we require for our audit; or
• adequate accounting records have not been kept by the parent company, or returns adequate
for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns.
•
Directors’ remuneration
Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures
of directors’ remuneration have not been made or the part of the directors’ remuneration report
to be audited is not in agreement with the accounting records and returns.
We have nothing to report
in respect of these matters.
144
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INFORMA PLC ANNUAL REPORT 2018 Other matters
Auditor tenure
Following the recommendation of the Audit Committee, we were reappointed by the members at the AGM on 24 May 2018 to audit
the financial statements for the year ending 31 December 2018. The period of total uninterrupted engagement including previous
renewals and reappointments of the firm is 15 years, covering the years ending 2004 to 2018. The most recent external audit tender
was finalised in June 2016.
Consistency of the audit report with the additional report to the Audit Committee
Our audit opinion is consistent with the additional report to the Audit Committee we are required to provide in accordance with ISAs (UK).
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our
audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an
auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone
other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Anna Marks FCA
Senior statutory auditor
For and on behalf of Deloitte LLP
Statutory Auditor
London
6 March 2019
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145
INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Financial Statements
Consolidated Income Statement
for the year ended 31 December 2018
Adjusted
results
2018
£m
Adjusting
items
2018
£m
Statutory
results
2018
£m
Notes
Adjusted
results
2017
(restated)1
£m
Adjusting
items
2017
(restated)1
£m
Continuing operations
Revenue
Net operating expenses
Operating profit/(loss) before joint ventures
and associates
Share of results of joint ventures and associates
Operating profit/(loss)
Profit/(loss) on disposal of subsidiaries and operations
Investment income
Finance costs
Profit/(loss) before tax
Tax (charge)/credit
Profit/(loss) for the year
Attributable to:
– Equity holders of the Company
– Non-controlling interests
Earnings per share
– Basic (p)
– Diluted (p)
1. 2017 restated for implementation of IFRS 15 (see Note 4).
5
7
20
21
11
12
13
15
37
15
15
2,369.5
(1,638.4)
–
2,369.5
(368.9)
(2,007.3)
1,756.8
(1,211.9)
731.1
1.0
732.1
–
7.0
(89.4)
649.7
(116.2)
533.5
(368.9)
–
(368.9)
1.1
1.2
(1.0)
(367.6)
55.7
(311.9)
362.2
1.0
363.2
1.1
8.2
(90.4)
282.1
(60.5)
221.6
519.8
13.7
(311.9)
–
207.9
13.7
49.4
49.2
19.7
19.7
544.9
–
544.9
–
0.2
(59.3)
485.8
(103.0)
382.8
380.4
2.4
46.2
46.0
Statutory
results
2017
(restated)1
£m
1,756.8
(1,412.1)
344.7
–
344.7
(17.4)
0.2
(59.3)
268.2
45.0
313.2
–
(200.2)
(200.2)
–
(200.2)
(17.4)
–
–
(217.6)
148.0
(69.6)
(69.6)
–
310.8
2.4
37.7
37.6
146
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INFORMA PLC ANNUAL REPORT 2018
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2018
Profit for the year
Items that will not be reclassified subsequently to profit or loss:
Actuarial (loss)/gain on defined benefit pension schemes
Tax credit/(charge) relating to items that will not be reclassified to profit or loss
Total items that will not be reclassified subsequently to profit or loss
Items that may be reclassified subsequently to profit or loss:
Recycling of exchange gains arising on disposal of foreign operations
Exchange gain/(loss) on translation of foreign operations
Exchange (loss)/gain on net investment hedge debt
Loss on derivative hedges
Total items that may be reclassified subsequently to profit or loss
Other comprehensive income/(expense) for the year
Total comprehensive income for the year
Total comprehensive income attributable to:
– Equity holders of the Company
– Non-controlling interests
1. 2017 restated for implementation of IFRS 15 (see Note 4).
Notes
34
22
2018
£m
221.6
(14.3)
1.3
(13.0)
–
224.6
(91.3)
(22.4)
110.9
97.9
319.5
303.3
16.2
2017
(restated)1
£m
313.2
14.2
(4.2)
10.0
(3.7)
(183.5)
56.7
–
(130.5)
(120.5)
192.7
190.3
2.4
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147
INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report
Financial Statements
Consolidated Statement of Changes in Equity
for the year ended 31 December 2018
At 1 January 2017
IFRS 15 restatement
At 1 January 2017 – as restated
Profit for the year (restated)1
Recycling of exchange gains arising
on disposal of foreign operations
Exchange loss on translation
of foreign operations
Exchange gain on net investment
hedge debt
Actuarial gain on defined benefit
pension schemes
Tax relating to components of other
comprehensive income
Total comprehensive income
for the year
Dividends to Shareholders
Dividends to non-controlling interests
Share award expense
Own shares purchased
Transfer of vested LTIPs
Non-controlling interest (NCI) arising
from purchase of subsidiary
Acquisition of NCI
NCI adjustment arising from disposal
At 31 December 2017 (restated)1
Profit for the year
Exchange gain on translation
of foreign operations
Exchange loss on net
investment hedge debt
Loss arising on derivative hedges
Actuarial loss on defined benefit
pension schemes
Tax relating to components of other
comprehensive income
Total comprehensive income
for the year
Dividends to Shareholders
Dividends to non-controlling interests
Share award expense
Issue of share capital
Own shares purchased
Transfer of vested LTIPs
NCI arising from purchase of subsidiary
Adjustment to NCI arising from
exercise of put option
At 31 December 2018
Share capital
£m
0.8
–
0.8
–
Share
premium
account
£m
905.3
–
905.3
–
Translation
reserve
£m
74.0
–
74.0
–
Other
reserves
£m
(1,570.8)
–
(1,570.8)
–
Retained
earnings
(restated)¹
£m
2,777.3
(1.2)
2,776.1
310.8
Total
(restated)¹
£m
2,186.6
(1.2)
2,185.4
310.8
Non-
controlling
interests
£m
1.2
–
1.2
2.4
Total equity
(restated)¹
£m
2,187.8
(1.2)
2,186.6
313.2
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0.8
–
–
–
–
–
–
–
–
–
–
0.5
–
–
–
–
1.3
–
–
–
–
–
–
–
–
–
–
–
–
–
–
905.3
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
905.3
(3.7)
(183.5)
56.7
–
–
(130.5)
–
–
–
–
–
–
–
–
(56.5)
–
222.1
(91.3)
(22.4)
–
–
108.4
–
–
–
–
–
–
–
–
51.9
–
–
–
–
–
–
–
–
5.4
(0.9)
(2.1)
–
0.1
(0.4)
(1,568.7)
–
–
–
–
–
–
–
–
–
8.1
3,546.8
(3.5)
(3.9)
–
(4.3)
1,974.5
(3.7)
(183.5)
56.7
14.2
(4.2)
190.3
(162.2)
–
5.4
(0.9)
–
–
0.1
(0.4)
2,217.7
207.9
–
–
–
–
–
2.4
–
(2.0)
–
–
–
(1.1)
–
10.8
11.3
13.7
(3.7)
(183.5)
56.7
14.2
(4.2)
192.7
(162.2)
(2.0)
5.4
(0.9)
–
(1.1)
0.1
10.4
2,229.0
221.6
222.1
2.5
224.6
–
–
–
14.2
(4.2)
320.8
(162.2)
–
–
–
2.1
–
–
–
2,936.8
207.9
–
–
–
(91.3)
(22.4)
(14.3)
(14.3)
1.3
1.3
194.9
(201.8)
–
–
–
–
3.9
–
–
2,933.8
303.3
(201.8)
–
8.1
3,547.3
(3.5)
–
–
(4.3)
5,866.8
–
–
–
–
16.2
–
(8.6)
–
–
–
–
176.8
(2.3)
193.4
(91.3)
(22.4)
(14.3)
1.3
319.5
(201.8)
(8.6)
8.1
3,547.3
(3.5)
–
176.8
(6.6)
6,060.2
1. 2017 restated for implementation of IFRS 15 (see Note 4).
148
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INFORMA PLC ANNUAL REPORT 2018 Consolidated Balance Sheet
as at 31 December 2018
Non-current assets
Goodwill
Other intangible assets
Property and equipment
Investments in joint ventures and associate
Other investments
Deferred tax assets
Retirement benefit surplus
Other receivables
Derivative financial instruments
Current assets
Inventory
Trade and other receivables
Current tax asset
Cash and cash equivalents
Assets classified as held for sale
Total assets
Current liabilities
Borrowings
Current tax liabilities
Provisions
Trade and other payables
Deferred income
Derivative financial instruments
Liabilities directly associated with assets classified as held for sale
Non-current liabilities
Borrowings
Derivative financial instruments
Deferred tax liabilities
Retirement benefit obligation
Provisions
Non-current tax liabilities
Trade and other payables
Total liabilities
Net assets
Equity
Share capital
Share premium account
Translation reserve
Other reserves
Retained earnings
Equity attributable to equity holders of the parent
Non-controlling interest
Total equity
1. 2017 restated for implementation of IFRS 15 (see Note 4).
Notes
2018
£m
2017
(restated)1
£m
16
17
19
20
20
22
34
23
24
25
23
28
26
29
30
31
24
26
29
24
22
34
30
31
35
35
36
6,237.3
3,882.0
70.4
19.1
5.1
22.0
4.5
6.3
1.5
10,248.2
50.9
402.7
15.9
168.8
79.5
717.8
10,966.0
(200.8)
(96.2)
(63.4)
(443.0)
(701.2)
(10.1)
(16.1)
(1,530.8)
(2,626.2)
(27.0)
(620.3)
(37.5)
(30.1)
–
(33.9)
(3,375.0)
(4,905.8)
6,060.2
1.3
905.3
51.9
1,974.5
2,933.8
5,866.8
193.4
6,060.2
2,608.2
1,701.4
31.8
1.5
4.6
9.0
–
0.1
–
4,356.6
54.1
326.1
25.4
54.9
–
460.5
4,817.1
(303.0)
(30.5)
(25.1)
(296.6)
(462.5)
–
–
(1,117.7)
(1,125.0)
–
(251.0)
(23.6)
(33.0)
(11.1)
(26.7)
(1,470.4)
(2,588.1)
2,229.0
0.8
905.3
(56.5)
(1,568.7)
2,936.8
2,217.7
11.3
2,229.0
These financial statements were approved by the Board of Directors and authorised for issue on 6 March 2019 and were signed
on its behalf by
Stephen A. Carter
Gareth Wright
Group Chief Executive
Group Finance Director
149
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report
Financial Statements
Consolidated Cash Flow Statement
for the year ended 31 December 2018
Operating activities
Cash generated by operations
Income taxes paid
Interest paid
Net cash inflow from operating activities
Investing activities
Interest received
Purchase of property and equipment
Proceeds on disposal of property and equipment
Purchase of intangible software assets
Product development costs additions
Purchase of intangibles related to titles, brands and customer relationships
(Costs)/proceeds on disposal of other intangible assets related to titles and brands
Acquisition of subsidiaries and operations, net of cash acquired
Acquisition of non-controlling interests
Acquisition of investment
Proceeds from disposal of subsidiaries and operations
Net cash outflow from investing activities
Financing activities
Dividends paid to Shareholders
Dividends paid to non-controlling interests
Dividend paid in settlement of UBM acquisition liability
Proceeds from EMTN bond issuance
Repayment of loans
New loan advances
Repayment of private placement borrowings
New private placement borrowings
Borrowing fees paid
Cash inflow from other loan receivables
Cash inflow/(outflow) from the issue/purchase of shares
Net cash inflow/(outflow) from financing activities
Net increase in cash and cash equivalents
Effect of foreign exchange rate changes
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year
Reconciliation of Movement in Net Debt
for the year ended 31 December 2018
Increase in cash and cash equivalents in the year (including cash acquired)
Cash flows from net drawdown of borrowings and derivatives associated with debt instruments
Increase in net debt resulting from cash flows
Borrowings acquired with UBM plc
Other non-cash movements including foreign exchange
(Increase)/decrease in net debt in the year
Net debt at beginning of the year
Net debt at end of the year
150
Notes
33
19
18
18
14
14
14
27
27
27
27
27
27
28
28
2018
£m
635.0
(82.4)
(66.3)
486.3
2.1
(23.4)
0.4
(30.2)
(6.2)
(21.0)
(3.2)
2017
£m
531.2
(45.3)
(52.0)
433.9
0.2
(14.7)
1.0
(52.2)
(13.1)
(30.7)
5.2
(593.6)
(193.2)
(5.3)
(0.5)
7.4
–
(0.5)
14.4
(673.5)
(283.6)
(201.9)
(8.6)
(59.0)
872.7
(1,179.4)
644.0
(101.5)
313.6
(10.0)
–
2.0
271.9
84.7
(8.0)
48.2
124.9
(162.0)
(2.0)
–
–
(1,292.1)
1,070.8
(159.7)
406.4
(0.7)
0.2
(0.9)
(140.0)
10.3
(2.3)
40.2
48.2
Notes
27
27
27
27
33
33
2018
£m
84.7
(539.4)
(454.7)
(702.6)
(151.5)
(1,308.8)
(1,373.1)
(2,681.9)
2017
£m
10.3
(24.9)
(14.6)
–
126.9
112.3
(1,485.4)
(1,373.1)
11_Informa_AR18_FINANCIAL STATEMENTS.indd 150
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INFORMA PLC ANNUAL REPORT 2018
Notes to the Consolidated Financial Statements
for the year ended 31 December 2018
1. General information
Informa PLC (the Company) is a company incorporated in the United Kingdom under the Companies Act 2006 and is listed on the
London Stock Exchange. The Company is a public company limited by shares and is registered in England and Wales with registration
number 08860726. The address of the registered office is 5 Howick Place, London, SW1P 1WG. The nature of the Group’s operations
and its principal activities are set out in the Strategic Report.
The Consolidated Financial Statements as at 31 December 2018 and for the year then ended comprise those of the Company and its
subsidiaries and its interests in joint ventures and associates (together referred to as the Group).
These financial statements are presented in pounds sterling (GBP), the functional currency of the Parent Company, Informa PLC.
Foreign operations are included in accordance with the policies set out in Note 2.
2. Significant accounting policies
Basis of accounting
The Consolidated Financial Statements have been prepared in accordance with International Financial Reporting Standards (IFRSs)
adopted by the European Union and therefore comply with Article 4 of the EU International Accounting Standards (IAS) Regulations.
The Directors have, at the time of approving the Consolidated Financial Statements, a reasonable expectation that the Company and
the Group have adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the
going concern basis of accounting in preparing the Consolidated Financial Statements. Further detail is contained in the Strategic
Review on page 73.
The Consolidated Financial Statements have been prepared on the historical cost basis, except for derivative financial instruments
and hedged items which are measured at fair value. The principal accounting policies adopted are set out below, all of which have
been consistently applied to all periods presented in the Consolidated Financial Statements.
Basis of consolidation
The Consolidated Financial Statements incorporate the accounts of the Company and all its subsidiaries. Control is achieved where
the Company has the power to govern the financial and operating policies of an investee entity, has the rights to variable returns
from its involvement with the investee and has the ability to use its power to affect its returns. The results of subsidiaries acquired
or sold are included in the Consolidated Financial Statements from the effective date of acquisition or up to the effective date of
disposal, as appropriate. Where necessary, adjustments are made to the results of acquired subsidiaries to bring their accounting
policies into line with those used by other members of the Group.
All intra-Group transactions, balances, income and expense are eliminated on consolidation.
Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the Group’s equity and consist
of the amount of those interests at the date of the original business combination plus their share of changes in equity since that date.
Joint ventures are joint arrangements in which the Group has the rights to the net assets through joint control with a third party.
Joint operations arise where there is the contractually agreed sharing of control of an arrangement, which exists only when decisions
about the relevant activities require the unanimous consent of the parties sharing control, and where the joint operators have
rights to the assets and obligations for the liabilities relating to the arrangement. Associates are undertakings over which the Group
exercises significant influence, usually from 20–50% of the equity voting rights, in respect of the financial and operating policies.
The Group accounts for its interests in joint ventures and associates using the equity method. Under the equity method, the investment
in the joint venture or associate is initially measured at cost. The carrying amount of the investment is adjusted to recognise changes
in the Group’s share of net assets of the joint venture or associate since the acquisition date. The income statement reflects the Group’s
share of the results of operations of the entity. The statement of comprehensive income includes the Group’s share of any other
comprehensive income recognised by the joint venture or associate. Dividend income is recognised when the right to receive the
payment is established. Where an associate or joint venture has net liabilities, full provision is made for the Group’s share of liabilities
where there is a constructive or legal obligation to provide additional funding to the associate or joint venture.
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 31 December 2018 continued
2. Significant accounting policies (continued)
Foreign currencies
Transactions in currencies other than the entity’s functional currency are recorded at the rates of exchange prevailing on the dates of
the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated at the rates
ruling at that date. These translation differences are included in net operating expenses in the Consolidated Income Statement.
Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the
date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency
are not retranslated.
The balance sheets of foreign subsidiaries are translated into pounds sterling at the closing rates of exchange. The income statement
results are translated at an average exchange rate, recalculated for each month between that month’s closing rate and the equivalent
for the preceding month.
Foreign exchange differences arising from the translation of opening net investments in foreign subsidiaries at the closing rate are taken
directly to the translation reserve. In addition, foreign exchange differences arising from retranslation of the foreign subsidiaries’ results
from monthly average rate to closing rate are also taken directly to the Group’s translation reserve. Such translation differences are
recognised in the Consolidated Income Statement in the financial year in which the operations are disposed of. The translation
movement on matched long-term foreign currency borrowings, qualifying as hedging instruments under IFRS 9 Financial Instruments,
are also taken directly to the translation reserve.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign
entity and translated at the acquisition closing rate.
Business combinations
The acquisition of subsidiaries and other asset purchases that are assessed as meeting the definition of a business under the rules
of IFRS 3 Business Combinations are accounted for using the acquisition method. The consideration for each acquisition is measured
at the aggregate of fair values of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in
exchange for control of the acquiree. If the accounting for business combinations involves provisional amounts, which are finalised
in a subsequent reporting period during the 12-month measurement period as permitted under IFRS 3, restatement of these
provisional amounts may be required in the subsequent reporting period. Acquisition and integration costs incurred are expensed
and included in adjusting items in the Consolidated Income Statement.
If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest
in the acquiree is remeasured to fair value at the acquisition date through profit or loss.
Put option arrangements that allow non-controlling interest Shareholders to require the Group to purchase the non-controlling
interest are treated as derivatives over equity instruments and are initially recognised at fair value within derivative financial
liabilities, with a corresponding charge directly to equity. Interest rate swaps, forward exchange contracts, put options over non-
controlling interests and other derivatives are classified as financial assets or financial liabilities at fair value through profit or loss
and are measured at each reporting date at fair value. Changes in the fair values are included in profit or loss within financing
income/expense unless the instrument has been designated as a hedging instrument.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent
changes to the fair value of the contingent consideration which is classified as a financial liability that is within the scope of IFRS 9
will be recognised in profit or loss.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised
for non-controlling interests over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the
fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss. On an acquisition by acquisition
basis, the Group recognises any non-controlling interest either at fair value (under the full goodwill method) or at the proportionate
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INFORMA PLC ANNUAL REPORT 2018 share of the acquiree’s identifiable net assets. Goodwill and fair value adjustments arising on the acquisition of a foreign entity are
treated as assets and liabilities of the foreign entity and translated at the acquisition closing rate. This is then revalued at the year end
rate with any foreign exchange difference taken directly to the translation reserve.
Disposal
At the date of a disposal, or loss of control, joint control or significant influence over a subsidiary, joint venture or associate, the
Group derecognises the assets (including goodwill) and liabilities of the entity, with the carrying amount of any non-controlling
interest and any cumulative translation differences recorded in equity. The fair value of consideration including the fair value of
any investment retained is recognised. The consequent profit or loss on disposal that is not disclosed as a discontinued operation
is recognised in profit and loss within “profit or loss on disposal of subsidiaries and operations”.
Equity transactions
Where there is a change of ownership of a subsidiary without a change of control, the difference between the consideration and
the relevant share of the carrying amount of net assets acquired or disposed of the subsidiary is recorded in equity. The carrying
amounts of the controlling and non-controlling interests are adjusted to reflect changes in their relative interests in the subsidiary.
Any difference between the amount at which the non-controlling interests are adjusted and the fair value of the consideration is
recognised directly in equity.
IFRS 15 Revenue from Contracts with Customers
IFRS 15 Revenue from Contracts with Customers provides a single, principles-based five-step model to be applied to all sales contracts.
It is based on the transfer of control of goods and services to customers and replaces the separate models for goods, services and
construction contracts previously included in IAS 11 Construction Contracts and IAS 18 Revenue. The major change is the requirement
to identify and assess the satisfaction of delivery of each performance obligation in contracts in order to recognise revenue.
Revenue
Revenue is measured at the fair value of consideration received or receivable and represents amounts receivable for goods and
services provided in the normal course of business, net of discounts, VAT and other sales-related taxes, and provisions for returns
and cancellations.
Subscription income for online services, information and journals is normally received in advance and is therefore deferred and
recognised evenly over the term of the subscription.
Revenue from exhibitions, trade shows, conferences and learning events, together with attendee fees and event sponsorship, is recognised
when the event is held, with advance receipts recognised as deferred income in the Balance Sheet. Transaction prices for performance
obligations are fixed within contracts and for example relate to an event attendee ticket or exhibition stand. Where material, transaction
prices and discounts are appropriately allocated between performance obligations based on the market price of products.
Unit sales revenue is recognised on the sale of books and related publications when title passes, depending on the terms of the sales
agreement. The performance obligations for subscription and unit sales revenue streams are distinct within customer contracts. The
performance obligations are to deliver goods, deliver subscription contracts over time, or provide access to databases either on a
one-off basis or over a period of time. If access is indefinite then revenue is recognised at the point access is provided. Transaction
prices for performance obligations are fixed within contracts and each book or journal has a value and each subscription has a value.
A provision is recognised for future returns and is debited against revenue for subscriptions and unit sales. The cost of processing
returns is immaterial.
Marketing and advertising services revenues are recognised on issue of the related publication, over the period of the advertising
subscription or over the period when the marketing service is provided. The performance obligations are distinct, being events held
or publications issued. Transaction prices for performance obligations are fixed within contracts and recognised in line with the
performance obligations.
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 31 December 2018 continued
2. Significant accounting policies (continued)
Revenue relating to barter transactions is recorded at fair value and recognised in accordance with the Group’s revenue recognition
policies. Expenses from barter transactions are recorded at fair value and recognised as incurred. Barter transactions typically
involve the trading of advertisements and trade show space in exchange for services provided at events.
Due to the nature of the business, there is an immaterial value of transaction price allocated to unsatisfied performance obligations
and there are no material contract assets or liabilities arising on work performed in order to deliver performance obligations.
Pension costs and pension scheme arrangements
Certain Group companies operate defined contribution pension schemes for colleagues. The assets of the schemes are held
separately from the individual companies. The pension cost charge associated with these schemes represents contributions payable
and is charged as an expense when incurred.
The Group also operates funded defined benefit schemes for colleagues. The cost of providing these benefits is determined using the
Projected Unit Credit Method, with actuarial valuations being carried out at regular intervals. There is no service cost due to the fact
that these schemes are closed to future accrual. Net interest is calculated by applying a discount rate to the opening net defined
benefit liability or asset and shown in finance costs, and the administration costs are shown as a component of operating expenses.
Actuarial gains and losses are recognised in full in the period in which they occur, outside of the Consolidated Income Statement and
in the Consolidated Statement of Comprehensive Income.
The retirement benefit obligation recognised in the Consolidated Balance Sheet represents the actual deficit or surplus in the Group’s
defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available
in the form of refunds from the plans or reductions in future contributions to the plans.
Share-based payments
The Group issues equity-settled share-based payments to certain colleagues. These are measured at fair value at date of grant.
An expense is recognised to spread the fair value of each award over the vesting period on a straight line basis, after allowing for
an estimate of the share awards that will actually vest. At each balance sheet date, the Group revises its estimate of the number
of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss
such that the cumulative expense reflects the revised estimate.
For awards under the Long-Term Incentive Plan (LTIP), where the proportion of the award is dependent on the level of total shareholder
return, the fair value is measured using a Monte Carlo model of valuation, which is considered to be the most appropriate valuation
technique. The valuation takes into account factors such as non-transferability, exercise restrictions and behavioural considerations.
Where the proportion of the award is dependent on earnings per share performance conditions, which are non-market-based measures,
the fair value is remeasured at each reporting date to reflect updates for expected or actual performance. For awards issued under
ShareMatch, the fair value is expensed on a straight line basis over the vesting period, based on the Group’s estimate of shares that will
eventually vest. For cash-settled share-based payments, a liability is recognised over the vesting period, with the fair value remeasured
at each reporting date and any changes recognised in the Consolidated Income Statement.
Own shares are deducted in arriving at total equity and represent the cost of the Company’s Ordinary Shares acquired by the
Employee Share Trust (EST) and ShareMatch in connection with certain of the Group’s colleague share schemes.
Interest income
Interest income is recognised on an accruals basis, by reference to the principal outstanding and at the effective interest rate applicable.
Taxation
The tax expense represents the sum of the current tax payable and deferred tax. Current tax is based on taxable profit for the year.
Taxable profit differs from net profit as reported in the Consolidated Income Statement because it excludes items of income or
expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting date.
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INFORMA PLC ANNUAL REPORT 2018 A current tax provision is recognised when the Group has a present obligation as a result of a past event, it is probable that the Group
will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation. The provision is the best
estimate of the consideration required to settle the present obligation at the balance sheet date, taking into account the risks and
uncertainties surrounding the obligation.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using
the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred
tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary
differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the
initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax nor
accounting profit.
Deferred tax is calculated for all business combinations in respect of intangible assets and properties. A deferred tax liability is
recognised to the extent that the fair value of the assets for accounting purposes exceeds the value of those assets for tax purposes
and will form part of the associated goodwill on acquisition. Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries and associates except where the Group is able to control the reversal of the temporary
difference and it is probable that the temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable
that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax
rates that are expected to apply in the period when the liability is settled or the asset is realised.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax
assets and liabilities on a net basis.
Current and deferred tax are recognised in the Consolidated Income Statement, except when they relate to items that are recognised
in other comprehensive income or directly in equity, in which case the current and deferred tax are also recognised in other
comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting for
a business combination, the tax effect is included in the accounting for the business combination.
The Group is a multinational group with tax liabilities arising in many geographic locations. This inherently leads to complexity in the
Group’s tax structure. Therefore, the calculation of the Group’s current tax liabilities and tax expense necessarily involves a degree of
estimation and judgement in respect of items whose tax treatment cannot be finally determined until resolution has been reached
with the relevant tax authority or, as appropriate, through a formal legal process. The resolution of issues is not always within the
control of the Group and issues can, and often do, take many years to resolve.
Payments in respect of tax liabilities for an accounting period result from payments on account and on the final resolution of open
items. As a result, there can be substantial differences between the tax charge in the income statement and tax payments. The final
resolution of certain of these items may give rise to material profit and loss and/or cash flow variances. Any difference between
expectations and the actual future liability will be accounted for in the period identified.
Goodwill
Goodwill arising on the acquisition of subsidiary companies and businesses is calculated as the excess of the fair value of purchase
consideration over the fair value of identifiable assets and liabilities acquired at the date of acquisition. It is recognised as an
asset at cost, assessed for impairment at least annually and subsequently measured at cost less accumulated impairment losses.
Any impairment is recognised immediately in the Consolidated Income Statement and is not subsequently reversed. Fair value
measurements are based on provisional estimates and may be subject to amendment within one year of the acquisition in line
with IFRS 3 Business Combinations, resulting in an adjustment to goodwill.
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 31 December 2018 continued
2. Significant accounting policies (continued)
For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash generating units (CGUs), as determined
by the Executive Directors, which are expected to benefit from the combination. Goodwill is tested for impairment annually or more
frequently when there is an indication that it may be impaired. In 2018, the Group revised the approach to impairment testing of
goodwill to reflect a change in the level at which goodwill is monitored. This reflects the completion of the Group’s 2014-2017 Growth
Acceleration Plan in which the operating structure of the business changed to four market facing Operating Divisions plus the UBM
Division, with monitoring of goodwill now undertaken at the segment level representing an aggregation of CGUs rather than at the
individual CGU level. As 2018 is the year of change in the approach for goodwill impairment testing we have undertaken testing at
both the former CGU level and the new segment level. Where an impairment test is performed, the carrying value is compared with
the recoverable amount which is the higher of the value in use and the fair value less costs to sell. Value in use is the present value
of future cash flows and is calculated using a discounted cash flow analysis based on the cash flows of the CGU compared with the
carrying value of that CGU, including goodwill. The Group estimates the discount rates as the risk-adjusted cost of capital for the
particular CGUs. If the recoverable amount of the CGU is less than the carrying amount of the unit, the impairment loss is allocated
first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis
of the carrying amount of each asset in the unit. At each reporting date, the Group reviews the composition of its CGUs to reflect the
impact of changes to cash inflows associated with reorganisations of its reporting structure.
On disposal of a business which includes all or part of a CGU, any attributable goodwill is included in the calculation of the profit
or loss on disposal.
Intangible assets
Intangible assets are initially measured at cost. For intangible assets acquired in business combinations, cost is calculated based on
the Group’s valuation methodologies (Note 17). These assets are amortised over their estimated useful lives on a straight line basis,
as follows:
Book lists
Journal titles
Brands and trademarks
Customer relationships databases and intellectual property
Non-compete agreements
Software
Product development
20 years1
20 years1
5–30 years
5–30 years
1–3 years
3–5 years
3–10 years
1. Or licence period if shorter.
Software which is not integral to a related item of hardware is included in intangible assets. Capitalised internal-use software costs
include external direct costs of materials and services consumed in developing or obtaining the software, and payroll and other
direct costs for employees who devote substantial time to the project. Capitalisation of these costs ceases when the project is
substantially complete and available for use. These costs are amortised on a straight line basis over their expected useful lives.
Product development expenditure is capitalised as an intangible asset only if all of certain conditions are met, with all research
costs and other development expenditure being expensed when incurred. The capitalisation criteria are:
• an asset is created that can be separately identified, and which the Group intends to use or sell;
•
•
•
it is technically feasible to complete the development of the asset for use or sale;
it is probable that the asset will generate future economic benefit; and
the development cost of the asset can be measured reliably.
The expected useful lives of intangible assets are reviewed annually. The Group does not have any intangible assets with indefinite
lives (excluding goodwill).
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INFORMA PLC ANNUAL REPORT 2018
Property and equipment
Property and equipment is recorded at cost less accumulated depreciation and provision for impairment. Depreciation is provided to
write off the cost less the estimated residual value of property and equipment on a straight line basis over the estimated useful lives
of the assets. Freehold land is not depreciated. The rates of depreciation on other assets are as follows:
Freehold buildings
Leasehold land and buildings
Equipment, fixtures and fittings
50 years
Over life of the lease
3–15 years
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the net sale proceeds
and the carrying amount of the asset and is recognised in the Consolidated Income Statement.
Assets classified as held for sale
Non-current assets or disposal groups are classified as held for sale if: their carrying amount will be recovered principally through
sale, rather than continuing use; they are available for immediate sale; and the sale is highly probable. A disposal group consists
of assets that are to be disposed of, by sale or otherwise, in a single transaction together with the directly associated liabilities.
Goodwill arising from business combinations is included for CGUs which are part of the disposal group.
On initial classification as held for sale, non-current assets or components of a disposal group are remeasured at the lower of their
carrying amount and fair value less costs to sell. Any impairment on a disposal group is first allocated to goodwill and then to remaining
assets and liabilities on a pro-rata basis. Impairment on initial classification as held for sale and subsequent gains or losses on
remeasurement are recognised in the income statement. Gains are not recognised in excess of any cumulative impairment.
No amortisation or depreciation is charged on non-current assets (including those in disposal groups) classified as held for sale.
Assets classified as held for sale are disclosed separately on the face of the Consolidated Balance Sheet and classified as current
assets or liabilities, with disposal groups being separated between assets held for sale and liabilities held for sale.
Impairment of tangible and intangible assets
At each reporting date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is
any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset
is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are
independent from other assets, the Group estimates the recoverable amount of the CGU to which the asset belongs.
The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future
cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset, for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset
(or CGU) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately, unless the relevant
asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report
Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 31 December 2018 continued
2. Significant accounting policies (continued)
Investments in joint ventures and associates
An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint
venture. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the
net assets of the arrangement. The results and assets and liabilities of associates and joint ventures are accounted for under
the equity method and stated in the Balance Sheet at cost adjusted for post-acquisition changes in the Group’s share of net
assets, less any impairments in value.
Other investments
Other investments are entities over which the Group does not have significant influence (where the Group holds less than 20%
interest in the voting interests of the entity). Other investments are classified as assets held at fair value through profit and loss,
with changes in fair value reported in the income statement.
Inventory
Inventory is stated at the lower of cost and net realisable value. Cost comprises direct materials and expenses incurred in bringing
the inventory to its present location and condition. Net realisable value represents the estimated selling price less marketing and
distribution costs expected to be incurred. Pre-publication costs are included in inventory, representing costs incurred in the
origination of content prior to publication. These are expensed systematically, reflecting the expected sales profile over the
estimated economic lives of the related products (typically over one to five years).
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership
to the lessee. All other leases are classified as operating leases.
Assets held under finance leases would be capitalised at their fair value on the inception of the lease and depreciated over the
shorter of the period of the lease and the estimated useful economic lives of the assets. The corresponding liability to the lessor
is included in the Consolidated Balance Sheet as a finance lease obligation. Finance charges are allocated over the period of the
lease in proportion to the capital amount outstanding and are charged to the Consolidated Income Statement.
Operating lease rentals are charged to the Consolidated Income Statement in equal annual amounts on a straight line basis
over the lease term. Lease incentives where these are received from the lessor, such as rent-free periods and contributions
to leasehold improvements, are treated as a reduction in lease rental expense and spread over the term of the lease.
Rental income from sub-leasing property space is recognised on a straight line basis over the term of the relevant lease.
Financial assets
Financial assets are recognised in the Group’s Consolidated Balance Sheet when the Group becomes a party to the contractual
provisions of the instrument.
Financial assets are classified into the following categories: trade and other receivables, and cash at bank and on hand.
Trade and other receivables
Trade receivables and other receivables are measured on initial recognition at fair value, and are subsequently measured
at amortised cost using the effective interest rate method, less any impairment.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and balances with banks and similar institutions. Cash equivalents comprise bank
deposits and money market funds, which are readily convertible to known amounts of cash and with a maturity of three months or
less and are subject to an insignificant risk of changes in value. Bank overdrafts that are repayable on demand and form an integral
part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the Consolidated
Cash Flow Statement.
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INFORMA PLC ANNUAL REPORT 2018 Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date. Financial assets are impaired where there is
objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the
estimated future cash flows of the investment have been negatively impacted.
For unlisted shares classified as fair value through profit or loss, a significant or prolonged decline in the fair value of the security
below its cost is considered to be objective evidence of impairment.
For all other financial assets, objective evidence of impairment could include:
• significant financial difficulty of the issuer or counterparty; or
• default or delinquency in interest or principal payments; or
• a probability that the borrower will enter bankruptcy or financial reorganisation.
For certain categories of financial assets, such as trade receivables, assets that are assessed not to be impaired individually are
subsequently assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could
include the Group’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the
average credit period of 30 days, as well as observable changes in national or local economic conditions that correlate with increased
default risk on receivables. A specific provision will also be raised for trade receivables when there is objective evidence that the
Group will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties
of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments
(more than 90 days overdue) are considered indicators that the trade receivable is impaired.
The Group always recognises lifetime expected credit losses (ECL) for trade receivables and contract assets. The ECL on these
financial assets are estimated based on the Group’s historical credit loss experience, adjusted for factors that are specific to the
debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the
reporting date, including time value of money where appropriate.
For all other financial instruments, the Group recognises lifetime ECL when there has been a significant increase in credit risk since
initial recognition. However, if the credit risk on the financial instrument has not increased significantly since initial recognition, the
Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECL.
Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial
instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a
financial instrument that are possible within 12 months after the reporting date.
For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s carrying amount
and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade
receivables, where the carrying amount is reduced through the use of a provision account. When a trade receivable is considered
uncollectible, it is written off against the provision account. Subsequent recoveries of amounts previously written off are credited
against the provision account. Changes in the carrying amount of the provision are recognised in the Consolidated Income Statement.
Financial liabilities and equity instruments issued by the Group
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into.
An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities.
Equity instruments issued by the Group are recorded at the proceeds received, net of direct issue costs.
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Notes to the Consolidated Financial Statements
for the year ended 31 December 2018 continued
2. Significant accounting policies (continued)
Borrowings
Interest-bearing loans and overdrafts are recorded at the proceeds received, net of direct issue costs and stated at amortised cost
using the effective interest rate method. The amortised cost calculation is revised when necessary to reflect changes in the expected
cash flows and the expected life of the borrowings including the effects of the exercise of any prepayment, call or similar options.
Any resulting adjustment to the carrying amount of the borrowings is recognised as interest expense in the income statement.
Net debt
Net debt consists of cash and cash equivalents and includes bank overdrafts, borrowings, derivatives associated with debt
instruments, and other loan receivables where these are interest bearing and do not relate to deferred consideration arrangements
and finance leases.
Debt issue costs
Debt issue costs, including premium payable on settlement or redemption, are accounted for on an accrual basis in the Consolidated
Income Statement using the effective interest rate method and added to the carrying amount of the instrument to the extent that
they are not settled in the period in which they arise.
Trade and other payables
Trade payables and other payables are initially measured at fair value, and are subsequently measured at amortised cost, using the
effective interest rate method.
Other financial liabilities
Other financial liabilities are initially measured at fair value, net of transaction costs. Other financial liabilities are subsequently
measured at amortised cost using the effective interest rate method, as set out above, with interest expense recognised on an
effective yield basis.
Derivative financial instruments and hedge accounting
The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates.
The derivative instruments utilised by the Group to hedge these exposures are primarily interest rate swaps and cross currency
swaps. The Group does not use derivative contracts for speculative purposes.
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to
their fair value at each reporting date. The method of recognising the resulting gain or loss depends on whether the derivative is
designated as a hedging instrument and, if so, the nature of the item being hedged. The Group designates certain derivatives as either:
• hedges of a change of fair value of recognised assets and liabilities or firm commitments (fair value hedge);
• hedges of a particular risk associated with a recognised asset or liability or a highly probable forecast transaction (cash flow
hedge); or
• hedges of a net investment in a foreign operation (net investment hedge).
The Group documents at the inception of the transaction the relationship between hedging instruments and hedged items, as well
as its risk management objectives and strategy for undertaking various hedging transactions. Furthermore, at the inception of the
hedge and on an ongoing basis, the Group documents whether the hedging instrument is highly effective in offsetting changes in
fair values or cash flows of the hedged item.
Fair value hedge
Changes in the fair value of derivative financial instruments that are designated and qualify as fair value hedges are recorded in profit
or loss immediately, together with any changes in the fair value of the hedged asset or liability that is attributable to the hedged risk.
The change in the fair value of the hedging instrument and the change in the hedged item attributable to the hedged risk are
recognised in the line of the Consolidated Income Statement relating to the hedged item.
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INFORMA PLC ANNUAL REPORT 2018 Cash flow hedge
Changes in fair value of derivative financial instruments that are designated, and effective cash flow hedges of forecast transactions
are recognised in other comprehensive income. The cumulative amount recognised in other comprehensive income is reclassified
into the Consolidated Income Statement out of other comprehensive income in the same period when the hedged item is recognised
in profit or loss.
Hedges of net investment in foreign operations
Hedges of net investment in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the hedging
instrument in relation to the effective portion of the hedge is recognised in other comprehensive income and accumulated in the
foreign currency translation reserve. The gain or loss relating to the ineffective portion is recognised immediately in the Consolidated
Income Statement. Gains and losses on the hedging instrument relating to the effective portion of the hedge accumulated in the
foreign currency translation reserve are reclassified to profit or loss when the hedged item is disposed of.
Changes in the fair value of derivative financial instruments that do not qualify for hedge accounting are recognised in the
Consolidated Income Statement as they arise.
Discontinuation of hedge accounting
Hedge accounting is discontinued when the hedge instrument expires or is sold, terminated or exercised, or no longer qualifies for
hedge accounting. At that time, any cumulative gain or loss on the hedging instrument recognised in equity is retained in equity until
the forecast transaction occurs. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognised in
equity is transferred to the Consolidated Income Statement in the period.
A derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the instrument is more than 12 months
and it is not expected to be realised or settled within 12 months. Other derivatives are presented as current assets or current liabilities.
Further details of derivative financial instruments are disclosed in Notes 24 and 32.
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, and it is
probable that the Group will be required to settle that obligation. Provisions are measured at the Directors’ best estimate of the
expenditure required to settle the obligation at the reporting date, and are discounted to present value where the effect is material.
Any difference between the amounts previously recognised and the current estimates is recognised immediately in the Consolidated
Income Statement.
Restructuring provisions are recognised when the Group has a detailed formal plan for the restructuring that has been
communicated to the affected parties or implementation has commenced.
Use of non-Generally Accepted Accounting Principles (GAAP) measures
In addition to the statutory results, adjusted results are prepared for the income statement, including adjusted operating profit
and adjusted diluted earnings per share, as the Board considers these non-GAAP measures to be the most appropriate way to
measure the Group’s performance in a way that is comparable to the prior year.
Adjusted results (Notes 8 and 15)
The Group presents adjusted results (Note 8) and adjusted diluted earnings per share (Note 15) to provide additional useful
information on business performance trends to Shareholders. These results are used for performance analysis and incentive
compensation arrangements for employees. Adjusted results exclude items that are commonly excluded across the media sector:
amortisation and impairment of goodwill and intangible assets relating to businesses acquired and other intangible asset purchases
of titles and exhibitions, acquisition and integration costs, profit or loss on disposal of businesses, restructuring costs and other
items that in the opinion of the Directors would distort underlying results. The term “adjusted” is not a defined term under IFRSs
and may not therefore be comparable to similarly titled profit measurements reported by other companies. It is not intended
to be a substitute for, or superior to, IFRS measurements of profit. Refer to Note 8 for details of adjusting items recorded for the
year and reconciled to statutory operating profit.
161
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 31 December 2018 continued
2. Significant accounting policies (continued)
Adoption of new and revised IFRS
Standards and interpretations adopted in the current year
The accounting policies, significant judgements and key sources of estimation adopted in the preparation of the condensed set
of Consolidated Financial Statements are consistent with those applied by the Group in its Consolidated Financial Statements for the
year ended 31 December 2017 except for the adoption of new standards and interpretations effective as of 1 January 2018 listed below.
IFRS 9 Financial Instruments
IFRS 15 Revenue from Contracts with Customers
•
•
• Amendments to IFRS 4: Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts
•
• Amendments to IFRS 2: Classification and Measurement of Share-based Payment Transactions
• Annual improvements to IFRS Standards 2014-2016 Cycle
• Amendments to IAS 40: Transfer of Investment Property
Interpretation IFRIC 22: Foreign Currency Transactions and Advance Consideration
With the exception of IFRS 15, the adoption of these standards and interpretations has not led to any significant changes to the
Group’s accounting policies or had any other material impact on the financial position or performance of the Group. Following an
assessment of the financial impact of the changes required from the adoption of this new standard, there is no material change
to the Consolidated Income Statement of the Group. The change only affects the recognition of consultancy revenue within the
Business Intelligence Division, where we are no longer able to recognise revenue over the course of a contract, but instead must
recognise revenue once consultancy performance obligations have been delivered.
The Consolidated Balance Sheet has been adjusted by the requirement to net down the contract liabilities against trade receivables
for amounts that have been invoiced but are not yet due, together with the restatement of unbilled income (see Note 4).
The Group adopted IFRS 15 on 1 January 2018 using the “full” retrospective approach. As a result, the prior period results have been
restated as detailed in Note 4.
Other amendments to IFRS effective for the period ended 31 December 2018 have no impact on the Group.
Standards and interpretations in issue, but not yet effective
At the date of authorisation of these financial statements, the following standards and interpretations which have not been applied
in these financial statements were in issue but have not yet come into effect:
Effective from 1 January 2019:
IFRS 16 Leases – EU endorsed
IFRIC 23 Uncertainty over Income Tax Treatments – EU endorsed
•
• Amendments to IAS 28: Long-term Interests in Associates and Joint Ventures – EU endorsed
•
• Amendments to IFRS 9: Prepayment Features with Negative Compensation – EU endorsed
• Annual improvements to IFRS standards 2015-2017 cycle – not yet EU endorsed
• Amendements to IAS 19: Plan Amendment, Curtailment or Settlements – not yet EU endorsed
Other items applicable in subsequent periods:
IFRS 17 Insurance Contracts – not yet EU endorsed
•
• Amendments to References to the Conceptual Framework in IFRS Standards – not yet EU endorsed
• Amendment to IFRS 3: Business Combinations – not yet EU endorsed
• Amendments to IAS 1 and IAS 8: Definition of Material – not yet EU endorsed
The Directors anticipate that the adoption of these standards and interpretations in future periods will not have a material impact
on the financial statements of the Group, except as described below in relation to IFRS 16 Leases.
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INFORMA PLC ANNUAL REPORT 2018 IFRS 16 Leases (effective for the 2019 financial year) will replace the existing leasing standard, IAS 17 Leases. It will treat all leases in a
consistent way, eliminating the distinction between operating and finance leases, and require lessees to recognise all leases, except
for low value leases and those with a term of less than 12 months, on the Balance Sheet. The most significant effect of the new
requirements will be an increase in lease assets and lease liabilities for leases currently categorised as operating leases. The new
standard also changes the nature of expenses related to those leases, replacing the straight line operating lease expense with a
depreciation charge for the right-of-use lease asset (included within operating costs) and an interest expense on the finance lease
liability (included within finance costs).
Adoption of IFRS 16 is expected to result in an increase in assets of between £300m to £320m and a corresponding increase in
liabilities of between £300m and £320m as at 1 January 2019. Operating profit for the year ending 31 December 2019 is estimated
to increase by between £4m and £6m, being the difference between the lease expense and depreciation, and profit before tax
will decrease by between £7m and £9m, reflecting a higher total lease interest expense in the initial years. Profit after tax is
estimated to decrease by between £6m and £8m and adjusted diluted earnings per share and diluted earnings per share will
decrease approximately between 0.4p and 0.6p. Note 38 provides further information on the Group’s operating lease obligations.
There are several practical expedients and exemptions available under IFRS 16. The Group has elected to apply the modified
retrospective method of implementation where there is no restatement of the comparative period and using the practical expedient
where, at the adoption date, right-of-use lease assets are set to equal the lease liabilities. The Group will exclude leases of low value
assets and short-term leases, with a duration of less than 12 months from the application of IFRS 16, with payments for these leases
continuing to be expensed directly to the income statement as operating leases. The major classes of leases impacted by the new
standard are property and event space leases.
The half-year results for the six months ending 30 June 2019 will include an update on the actual impact of IFRS 16.
3. Critical accounting judgements and key sources of estimation uncertainty
In the application of the Group’s accounting policies, which are described in Note 2, the Directors are required to make judgements,
estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources.
The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant.
Actual results may differ from these estimates.
Critical accounting judgements
In addition to the judgement taken by the Group in selecting and applying the accounting policies set out above, the Directors have
made the following judgements concerning the amounts recognised in the Consolidated Financial Statements.
Identification of cash generating units (Note 16)
For impairment testing purposes, judgement is used to allocate goodwill to the specific groups of CGUs that are expected to benefit
from this goodwill. When there are changes in business structure, judgement is required to identify any changes to the CGU groups,
taking account of the lowest level of independent cash inflows being generated, amongst other factors.
Key sources of estimation uncertainty
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised.
Impairment of assets (Note 16)
Identifying indicators of asset impairment involves estimating future cash flows based on a good understanding of the drivers of
value behind the asset. At each reporting period, an assessment is performed to determine whether there are any such indicators
of impairment, which involves considering the performance of our businesses, any significant changes to the markets in which we
operate, and future forecasts.
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Notes to the Consolidated Financial Statements
for the year ended 31 December 2018 continued
3. Critical accounting judgements and key sources of estimation uncertainty continued
The Group has considered a number of assumptions in performing impairment reviews of assets, which can be found in Note 16.
The determination of whether assets are impaired requires an estimation of the value in use of the CGU groups to which assets have
been allocated, except where a fair value less costs to sell methodology is applied. The value in use calculation requires the Group
to estimate the future cash flows expected to arise from each CGU group, using three-year projections and determining a suitable
discount rate to calculate present value and the long-term growth rate. The Directors are satisfied that the Group’s CGU groups have
a value in use in excess of their Balance Sheet carrying value. The sensitivities considered by the Directors for CGUs that have less
headroom are described in Note 16.
Valuation of separately identifiable intangible assets (Notes 17 and 18)
To determine the value of separately identifiable intangible assets on a business combination, and deferred tax on these intangibles,
the Group is required to make estimates when utilising valuation methodologies. These methodologies include the use of discounted
cash flows, revenue forecasts and the estimates for the useful economic lives of intangible assets.
There are significant estimates involved in assessing what amounts are recognised as the estimated fair value of assets and liabilities
acquired through business combinations, particularly the amounts attributed to separate intangible assets such as titles, brands,
acquired customer lists and associated customer relationships. These estimates impact the amount of goodwill recognised on
acquisitions. Any provisional amounts are subsequently finalised within the 12-month measurement period, as permitted by IFRS 3.
In 2018, the significant estimates are in relation to the acquisitions of UBM plc and ICON Advisory Group, Ltd.
The Group has built considerable knowledge of these valuation techniques, and for major acquisitions, defined as when consideration
is £75m or above, the Group also considers the advice of third party independent valuers to identify and support the valuation of
intangible assets arising on acquisition. Details of acquisitions in the year in relation to this are set out in Note 18.
Contingent consideration (Notes 18 and 30)
When the consideration transferred by the Group in a business combination includes assets or liabilities from a contingent
consideration arrangement, it is measured at its acquisition-date fair value and included as part of the consideration transferred
in a business combination. The contingent consideration is based on future business valuations and profit multiples and has been
estimated on an acquisition by acquisition basis using available profit forecasts. The higher the profit forecast, the higher the fair
value of any contingent consideration (subject to any maximum payout clauses). Changes in fair value of the contingent consideration
that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill.
These adjustments will result in a restatement to previous reported results if the changes relate to amounts arising in previously
reported periods.
Measurement of retirement benefit obligations (Note 34)
The measurement of the retirement benefit obligation and surplus involves the use of a number of assumptions. The most significant of
these relate to the discount rate, the rate of increase in salaries and pension and mortality assumptions. The most significant scheme is
the UBM Pension Scheme (UBMPS). Note 34 details the principal assumptions which have been adopted following advice received from
independent actuaries and also provides sensitivity analysis with regards to changes to these assumptions.
164
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INFORMA PLC ANNUAL REPORT 2018 4. Restatement
The results for the year ended 31 December 2017 have been restated following the adoption in 2018 of IFRS 15 Revenue from Contracts
with Customers.
This resulted in the Consolidated Balance Sheet at 31 December 2017 being adjusted for the reclassification of £72.1m of deferred
income against trade receivables, for amounts that have been invoiced and where services have not yet been provided and amounts
are not yet due, together with the adjustment for unbilled income described below.
There were also restatements to the 2017 income statement from amounts previously recognised on a percentage complete basis.
This resulted in reductions of £0.8m to revenue, £0.6m to profit before tax and £0.5m to profit after tax. These adjustments only
affected the Business Intelligence Division. This resulted in basic earnings per share being restated from 37.8p per share to 37.7p
per share, diluted earnings per share being restated from 37.7p to 37.6p and adjusted diluted earnings per share being restated from
46.1p to 46.0p.
Consolidated Balance Sheet: as at 31 December 2017 – restatement
IFRS 15
Adjustments:
Percentage
complete
£m
IFRS 15
Adjustments:
Net-down
£m
Previously
reported
£m
Non-current assets
Current assets: Trade and other receivables
Other current assets
Total assets
Current liabilities: Trade and other payables
Current liabilities: Deferred income
Other current liabilities
Non-current deferred tax liabilities
Other non-current liabilities
Total liabilities
Net assets
4,356.6
401.1
134.4
4,892.1
(297.2)
(534.6)
(358.6)
(251.6)
(1,219.4)
(2,661.4)
2,230.7
−
(2.9)
−
(2.9)
0.6
−
−
0.6
−
1.2
(1.7)
Consolidated Income Statement: for the year ended 31 December 2017 – restatement
Revenue
Net operating expenses
Operating profit/(loss)
Profit/(loss) before tax
Tax (charge)/credit
Profit/(loss) for the period
Earnings per share
– Basic (p)
– Diluted (p)
Previously reported
Adjusting
items
2017
£m
–
(200.2)
(200.2)
(217.6)
148.0
(69.6)
Adjusted
results
2017
£m
1,757.6
(1,212.1)
545.5
486.4
(103.1)
383.3
46.3
46.1
IFRS 15
adjustments
2017
£m
(0.8)
0.2
(0.6)
(0.6)
0.1
(0.5)
Statutory
results
2017
£m
1,757.6
(1,412.3)
345.3
268.8
44.9
313.7
37.8
37.7
Adjusted
results
2017
£m
1,756.8
(1,211.9)
544.9
485.8
(103.0)
382.8
46.2
46.0
−
(72.1)
−
(72.1)
−
72.1
−
–
−
72.1
–
Restated
Adjusting
items
2017
£m
–
(200.2)
(200.2)
(217.6)
148.0
(69.6)
Restated
£m
4,356.6
326.1
134.4
4,817.1
(296.6)
(462.5)
(358.6)
(251.0)
(1,219.4)
(2,588.1)
2,229.0
Statutory
results
2017
£m
1,756.8
(1,412.1)
344.7
268.2
45.0
313.2
37.7
37.6
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 31 December 2018 continued
4. Restatement continued
Segment revenue and results restatement of 2017
The tables below set out the previously reported amounts and restated amounts for each segment for the year ended 31 December 2017:
Academic
Publishing
£m
Business
Intelligence
£m
Global
Exhibitions
£m
Knowledge &
Networking
£m
Unallocated
£m
Total
£m
Revenue
Previously reported
IFRS 15 restatement
Restated
Operating profit/(loss)
Previously reported
IFRS 15 restatement
Restated
Adjusted operating profit
Previously reported
IFRS 15 restatement
Restated
Segment assets
Previously reported
IFRS 15 net-down adjustment
IFRS 15 other adjustment
Restated
530.0
–
530.0
154.1
–
154.1
208.0
–
208.0
384.2
(0.8)
383.4
47.8
(0.6)
47.2
92.2
(0.6)
91.6
560.4
–
560.4
126.2
–
126.2
201.4
–
201.4
1,157.9
(16.0)
–
1,144.5
(30.1)
(2.9)
1,898.7
(20.9)
–
1,141.9
1,111.5
1,877.8
283.0
–
283.0
17.2
–
17.2
43.9
–
43.9
558.2
(7.8)
–
550.4
5. Revenue
An analysis of the Group’s revenue is as follows:
Exhibitor
Subscriptions
Unit sales
Attendee
Marketing and advertising services
Sponsorship
Total revenue
1. 2017 restated for classification changes including the implementation of IFRS 15 (see Note 4).
–
–
–
–
–
–
–
–
–
1,757.6
(0.8)
1,756.8
345.3
(0.6)
344.7
545.5
(0.6)
544.9
132.8
4,892.1
2.7
–
(72.1)
(2.9)
135.5
4,817.1
2018
£m
921.1
583.1
279.9
226.5
219.2
139.7
2017
(restated)1
£m
433.2
566.7
278.0
177.2
182.0
119.7
2,369.5
1,756.8
166
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INFORMA PLC ANNUAL REPORT 2018
6. Business segments
Business segments
The Group has identified reportable segments based on financial information used by the Executive Directors in allocating
resources and making strategic decisions. We consider the chief operating decision maker to be the two Executive Directors.
The Group’s five identified reportable segments under IFRS 8 Operating Segments are as described in the Strategic Report.
UBM is a new reportable segment in 2018 following acquisition of the business on 15 June 2018 (see Note 18).
Segment revenue and results
The Group’s primary internal income statement performance measures for business segments are revenue and adjusted operating
profit. A reconciliation of adjusted operating profit to statutory operating profit and profit before tax is provided below:
Year ended 31 December 2018
Revenue
Adjusted operating profit before joint ventures and associates
Share of adjusted results of joint ventures and associates (Note 20)
Adjusted operating profit
Intangible asset amortisation1
Impairment (Note 17)
Acquisition and integration costs (Note 8)
Restructuring and reorganisation costs (Note 8)
Subsequent remeasurement of contingent consideration (Note 8)
UAE VAT charge (Note 8)
GMP equalisation (Note 8)
Operating profit
Profit on disposal of businesses (Note 21)
Investment income (Note 11)
Finance costs (Note 12)
Profit before tax
Global
Exhibitions
£m
Academic
Publishing
£m
Business
Intelligence
£m
Knowledge &
Networking
£m
575.8
200.3
(0.2)
200.1
(67.5)
(5.7)
(2.5)
(0.9)
2.0
(9.1)
–
533.2
198.4
–
198.4
(52.7)
–
(0.7)
(6.7)
–
–
–
116.4
138.3
385.6
91.1
–
91.1
(22.8)
–
(1.5)
(4.5)
7.3
–
(0.3)
69.3
261.4
39.8
0.1
39.9
(15.6)
(4.1)
(0.6)
(1.0)
(9.2)
–
(0.2)
9.2
UBM2
£m
613.5
201.5
1.1
202.6
(85.0)
–
(83.6)
–
–
–
(4.0)
30.0
1. Excludes acquired intangible product development and software amortisation.
2. UBM segment results are for the post-acquisition period to 31 December 2018 (see Note 18).
Year ended 31 December 2017 (restated)2
Global
Exhibitions
£m
Academic
Publishing
£m
Business
Intelligence2
£m
Knowledge &
Networking
£m
560.4
201.4
–
201.4
(66.7)
(0.4)
(6.7)
(1.2)
(0.2)
530.0
208.0
–
208.0
(50.1)
(2.0)
(1.5)
(0.3)
–
126.2
154.1
383.4
91.6
–
91.6
(24.0)
(3.2)
(10.2)
(7.0)
–
47.2
283.0
43.9
–
43.9
(17.0)
–
(5.6)
(4.4)
0.3
17.2
Revenue
Adjusted operating profit before joint ventures and associates
Share of adjusted results of joint ventures and associates (Note 20)
Adjusted operating profit
Intangible asset amortisation (Note 17)1
Impairment (Note 8)
Acquisition and integration costs (Note 8)
Restructuring and reorganisation costs (Note 8)
Subsequent remeasurement of contingent consideration (Note 8)
Operating profit
Loss on disposal of businesses (Note 21)
Investment income (Note 11)
Finance costs (Note 12)
Profit before tax
1. Excludes acquired intangible product development and software amortisation.
2. 2017 restated for implementation of IFRS 15 (see Note 4).
Total
£m
2,369.5
731.1
1.0
732.1
(243.6)
(9.8)
(88.9)
(13.1)
0.1
(9.1)
(4.5)
363.2
1.1
8.2
(90.4)
282.1
Total
£m
1,756.8
544.9
–
544.9
(157.8)
(5.6)
(24.0)
(12.9)
0.1
344.7
(17.4)
0.2
(59.3)
268.2
167
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report
Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 31 December 2018 continued
6. Business segments continued
The accounting policies of the reportable segments are the same as the Group’s accounting policies described in Note 2. Adjusted
operating result by operating segment is the measure reported to the Executive Directors for the purpose of resource allocation and
assessment of segment performance. Finance costs and investment income are not allocated to segments, as this type of activity is
driven by the central Treasury function, which manages the cash positions of the Group.
Segment assets
Academic Publishing
Business Intelligence
Global Exhibitions
Knowledge & Networking
UBM
Total segment assets
Unallocated assets
Total assets
31 December
2018
£m
31 December
2017
(restated)1
£m
1,022.5
1,127.4
1,803.3
517.2
6,186.7
10,657.1
308.9
10,966.0
1,141.9
1,111.5
1,877.8
550.4
–
4,681.6
135.5
4,817.1
1. 2017 restated for implementation of IFRS 15 (see Note 4).
For the purpose of monitoring segment performance and allocating resources between segments, the Group monitors the tangible,
intangible and financial assets attributable to each segment. All assets are allocated to reportable segments except for certain
centrally held balances and held for sale assets, including some intangible software assets relating to Group infrastructure, balances
receivable from businesses sold and taxation (current and deferred). Assets used jointly by reportable segments are allocated on the
basis of the revenues earned by individual reportable segments.
Segment revenue by type
The Group’s revenues from its major products and services were as follows:
Year ended 31 December 2018
Exhibitor
Subscriptions
Unit sales
Attendee
Marketing and advertising services
Sponsorship
Total
Year ended 31 December 20171
Exhibitor
Subscriptions
Unit sales
Attendee
Marketing and advertising services
Sponsorship
Total
Global
Exhibitions
£m
Academic
Publishing
£m
Business
Intelligence
£m
Knowledge &
Networking
£m
408.8
–
–
61.6
63.7
41.7
575.8
–
282.3
250.9
–
–
–
533.2
–
286.1
29.0
–
70.5
–
385.6
40.6
–
–
107.0
39.4
74.4
261.4
UBM2
£m
471.7
14.7
–
57.9
45.6
23.6
Total
£m
921.1
583.1
279.9
226.5
219.2
139.7
613.5
2,369.5
Global
Exhibitions
£m
385.9
–
–
57.5
71.3
45.7
560.4
Academic
Publishing
£m
Business
Intelligence
£m
Knowledge &
Networking
£m
–
279.1
250.9
–
–
–
530.0
–
287.6
27.1
–
68.7
–
383.4
47.3
–
–
119.7
42.0
74.0
283.0
Total
£m
433.2
566.7
278.0
177.2
182.0
119.7
1,756.8
1. 2017 restated for classification changes including the implementation of IFRS 15 (see Note 4).
2. UBM segment results are for the post-acquisition period to 31 December 2018 (see Note 18).
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INFORMA PLC ANNUAL REPORT 2018
Geographic information
The Group’s revenue by location of customer and information about its segment assets by geographic location are detailed below:
UK
Continental Europe
North America
China (including Hong Kong)
Rest of World
Revenue
Segment assets
2018
£m
182.2
297.8
1,135.5
317.2
436.8
2017
(restated)1
£m
153.1
236.7
939.1
77.1
350.8
2018
£m
7,352.1
68.2
3,226.0
124.6
195.1
2017
(restated)1
£m
1,386.7
69.7
3,080.9
98.4
181.4
2,369.5
1,756.8
10,966.0
4,817.1
1. 2017 restated for implementation of IFRS 15 (see Note 4).
No individual customer contributes more than 10% of the Group’s revenue in either 2018 or 2017.
7. Operating profit
Operating profit has been arrived at after charging/(crediting):
Adjusted
results
2018
£m
Adjusting
items
2018
£m
Statutory
results
2018
£m
Notes
Adjusted
results
(restated)1
2017
£m
Adjusting
items
(restated)1
2017
£m
Statutory
results
(restated)1
2017
£m
Cost of sales
Staff costs (excluding adjusting items)
Amortisation of other intangible assets
Impairment – goodwill
Impairment – intangibles
Depreciation
Acquisition-related costs
Integration-related costs2
Restructuring and reorganisation costs
Subsequent remeasurement
of contingent consideration
Operating lease expense
– Land and buildings
– Other
UAE VAT charge
GMP equalisation
Net foreign exchange loss
Auditor’s remuneration for audit services
Other operating expenses
Total net operating expenses
before joint ventures and associates
9
17
8
8
19
8
8
8
8
38
38
8
8
780.8
596.8
42.5
–
–
13.1
–
–
–
–
35.0
1.0
–
–
7.6
3.2
158.4
–
–
243.6
–
9.8
–
42.9
46.0
13.1
780.8
596.8
286.1
–
9.8
13.1
42.9
46.0
13.1
(0.1)
(0.1)
–
–
9.1
4.5
–
–
–
35.0
1.0
9.1
4.5
7.6
3.2
537.2
467.8
24.8
–
–
9.2
–
–
–
–
26.7
1.1
–
–
4.9
2.1
–
–
157.8
3.4
2.2
–
4.4
19.6
12.9
537.2
467.8
182.6
3.4
2.2
9.2
4.4
19.6
12.9
(0.1)
(0.1)
–
–
–
–
–
–
–
26.7
1.1
–
–
4.9
2.1
138.1
158.4
138.1
1,638.4
368.9
2,007.3
1,211.9
200.2
1,412.1
1. 2017 restated for implementation of IFRS 15 (see Note 4).
2.
Integration costs include £3.8m of impairment of other intangible assets.
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report
Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 31 December 2018 continued
7. Operating profit continued
Amounts payable to the auditor and its associates, Deloitte LLP, by the Company and its subsidiary undertakings are provided below:
Fees payable to the Company’s auditor for the audit of the Company’s annual financial statements
Fees payable to the Company’s auditor and its associates for other services to the Group:
Audit of the Company’s subsidiaries
Total audit fees
Fees payable to the Company’s auditor for non-audit services comprises:
Transaction support services
Half-year review
Taxation services
Other services
Total non-audit fees1
2018
£m
2.4
0.8
3.2
2.6
0.2
–
–
2.8
2017
£m
1.7
0.4
2.1
–
0.1
0.1
0.1
0.3
1.
In addition to these amounts for 2018 there were non-audit fees totalling £1.6m for UBM fees paid to the Company’s auditors in the pre-acquisition period
from 1 January 2018 to 14 June 2018. These related to £1.5m of spend supporting the development of the global Sales Solution (Salesforce) as part of the
Events First Strategy, and the change management of the global marketing model within the Events First Sales and Marketing programme. The remaining
£0.1m is related to spend on tax and other services which were concluded in accordance with applicable independence guidelines.
Fees payable to Deloitte LLP and its associates for non-audit services to the Company are included in the consolidated disclosures above.
The Audit Committee approves all non-audit services within the Company’s policy. The Audit Committee approved the use of the
auditor for transaction support services in relation to the reporting requirements associated with the Company’s acquisition of
UBM plc, having concluded that the auditor was best placed to perform these services due to its knowledge of the Company and
the timescales involved.
The Committee considers that certain non-audit services should be provided by the external auditor, because its existing knowledge
of the business makes this the most efficient and effective way for those non-audit services to be carried out. In 2018 the non-audit
fees paid to Deloitte, excluding any pre-acquisition Deloitte fees incurred by UBM in 2018, totalled £2.8m (2017: £0.3m), which
represented 88% (2017: 14%) of the 2018 audit fee. The majority of non-audit fees in 2018 related to the UBM project where there
was £2.6m of accounting services required for the UBM acquisition. In awarding this non-audit work to Deloitte, the Committee took
account of Deloitte’s knowledge of the Group as auditor, the benefits of Deloitte reviewing the financial data in detail before the
announcement, and considered Deloitte able to provide an effective service.
In the prior year, other services relate to services provided by Market Gravity Limited, a training organisation which was acquired
by Deloitte on 31 May 2017. Market Gravity Limited was contracted by Informa, prior to the acquisition by Deloitte, to support in
delivering the London Tech Week Innovation Mini MBA from 12–16 June. Knowledge & Networking engaged Market Gravity Limited
for a further three events in 2017.
A description of the work of the Audit Committee is set out in the Corporate Governance Statement on pages 107 to 112 and includes
an explanation of how auditor objectivity and independence is safeguarded when non-audit services are provided by the auditor.
No services were provided under contingent fee arrangements.
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INFORMA PLC ANNUAL REPORT 2018
8. Adjusting items
The Board considers certain items should be recognised as adjusting items since, due to their nature or infrequency, such presentation
is relevant to an understanding of the Group’s performance. These items do not relate to the Group’s underlying trading and are
adjusted from the Group’s adjusted operating profit measure. The following charges/(credits) are presented as adjusting items:
Intangible amortisation and impairment
Intangible asset amortisation
Impairment – goodwill
Impairment – acquisition-related intangible assets
Acquisition costs
Integration costs
Restructuring and reorganisation costs
Redundancy costs
Reorganisation costs
Vacant property costs
Subsequent re measurement of contingent consideration
UAE VAT charge
GMP equalisation charge
Adjusting items in operating profit
(Profit)/loss on disposal of subsidiaries and operations
Investment income
Finance costs
Adjusting items in profit before tax
Tax related to adjusting items
Tax adjusting item for US federal tax reform
Adjusting items in profit for the year
The principal adjusting items are in respect of:
Notes
17
16
17
7
7
7
7
34
21
11
12
13
13
2018
£m
243.6
–
9.8
42.9
46.0
7.3
0.8
5.0
(0.1)
9.1
4.5
368.9
(1.1)
(1.2)
1.0
367.6
(55.7)
–
311.9
2017
£m
157.8
3.4
2.2
4.4
19.6
5.7
1.0
6.2
(0.1)
–
–
200.2
17.4
–
217.6
(62.6)
(85.4)
69.6
•
•
intangible asset amortisation – the amortisation charges in respect of intangible assets acquired through business combinations
or the acquisition of trade and assets;
impairment – the Group tests for impairment on an annual basis or more frequently when an indicator exists. Impairment charges
are individually disclosed and are excluded from adjusted results;
• acquisition costs are the costs and fees incurred by the Group in acquiring businesses and totalled £42.9m, with £41.1m relating
•
to the UBM plc acquisition and £1.8m for other acquisitions;
integration costs related to the costs incurred by the Group in integrating share and asset acquisitions. Integration costs totalled
£46.0m, with £39.5m relating to the acquisition of UBM plc;
• restructuring and reorganisation costs – these costs are incurred by the Group in business restructuring and operating model
changes. These include vacant property costs arising from restructuring activities;
• subsequent remeasurement of contingent consideration is recognised in the year as a charge or credit to the Consolidated Income
•
Statement unless qualifying as a measurement period adjustment arising within one year from the acquisition date;
following the introduction of Value Added Tax on 1 January 2018 in the UAE the Group identified and reported an underpayment
during 2018 and made a correcting payment. In January 2019 the UAE tax authorities assessed a tax penalty of £9.1m in relation
to the late payment. The Group is disputing this penalty assessment; however, an amount of £9.1m has been provided for within
adjusting items in the year;
• GMP equalisation charge relates to the additional pension liability arising in the UK from the requirement to equalise the
guaranteed element of pensions as described in Note 34;
• profit on disposal of subsidiaries and operations – the profit on disposal primarily relates to the £5.4m profit on disposal from
the release of indemnity provisions associated with the disposal of PR Newswire that UBM plc completed in 2016, partly offset
by the £3.3m loss on disposal of ehi Live, see Note 21 for further details;
investment income of £1.2m relates to the fair value gain on derivatives relating to the EMTN during the unhedged period (see Note 11);
finance costs of £1.0m relate to the one-off refinancing costs associated with the UBM plc acquisition (see Note 12); and
the tax items relate to the tax effect on the items above and are analysed in Note 13.
•
•
•
171
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report
Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 31 December 2018 continued
9. Staff numbers and costs
The monthly average number of persons employed by the Group (including Directors) during the year, analysed by segment, was as follows:
Academic Publishing
Business Intelligence
Global Exhibitions
Knowledge & Networking
UBM1
Total
Number of employees
2018
2,205
2,338
1,772
1,241
2,276
9,832
2017
2,137
2,549
1,519
1,334
–
7,539
1. The average number of persons for UBM represents the average number for the period of ownership divided by 12 months. If UBM had been owned for the
whole year the average would have been approximately 3,639 and the total for the Group would have been 11,195.
Their aggregate remuneration comprised:
Wages and salaries
Social security costs
Pension costs associated with staff charged to adjusted operating profit (Note 34)
Share-based payments (Note 10)
Staff costs (excluding adjusting items)
Redundancy costs
GMP equalisation charge (Note 34)
2018
£m
526.2
46.2
15.3
9.1
596.8
7.3
4.5
608.6
2017
£m
413.3
37.0
10.6
6.9
467.8
5.7
–
473.5
The remuneration of Directors, who are the key management personnel of the Group, is set out below in aggregate for each of the
categories specified in IAS 24 Related Party Disclosures (Note 39). Further information about the remuneration of individual Directors
is provided in the audited part of the Remuneration Report on pages 113 to 125.
Short-term employee benefits
Post-employment benefits
Share-based payments (Note 10)
2018
£m
4.1
0.3
2.0
6.4
2017
£m
3.7
0.3
1.7
5.7
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INFORMA PLC ANNUAL REPORT 2018
10. Share-based payments
The Group recognised total expenses of £9.1m (2017: £6.9m) related to share-based payment transactions in the year ended
31 December 2018 with £7.1m (2017: £4.8m) relating to equity-settled LTIPs, £1.0m (2017: £0.6m) relating to equity-settled ShareMatch
and £1.0m (2017: £1.5m) relating to cash-settled awards.
The Group’s Long-Term Incentive Plans (LTIP) provide for nil-cost options and have a grant price used in the valuation of the awards
equal to the closing share price from the day prior to the grant date. The performance period is three years starting with the year in
which the grant is made. LTIP awards are conditional share awards with specific performance conditions. To the extent that they are
met or satisfied then awards will be exercisable following the end of the relevant performance period. LTIP allocations are equity-
settled and will lapse if the colleague leaves the Group before an LTIP grant is exercisable, unless the employee meets certain
eligibility criteria.
Long-Term Incentive Plans
The 2018 LTIP award was granted on 22 March 2018, with the 2017 LTIP award granted on 15 March 2017 and the 2016 LTIP award
granted on 17 March 2016. The performance conditions for each of these awards to Executive Directors are relative total shareholder
return (TSR for FTSE 51–150 constituents, excluding financial services and commodities), earnings per share (EPS) and compound
annual growth rate (CAGR).
The movement during the year is as follows:
Outstanding at 1 January
LTIPs granted in the year
LTIPs exercised in the year
LTIPs lapsed in the year
Outstanding at 31 December
Exercisable awards included in outstanding number at 31 December
2018
Number of
options
2,931,757
2,354,031
(161,878)
(51,020)
2017
Number of
options
2,897,323
1,223,006
(279,035)
(909,537)
5,072,890
2,931,757
1,182,939
414,227
The TSR award components of the LTIPs were valued using a Monte Carlo simulation model. The inputs into the Monte Carlo
simulation model for the LTIP performance conditions are:
8 September 2014
13 February 2015
17 March 2016
15 March 2017
22 March 2018
1. Share price at grant restated for bonus element of 2016 rights issue.
2. From 1 January of year in which grant was made.
Share price at
grant date1
Expected
volatility
Expected life
(years)2
Risk-free
rate
£4.77
£4.86
£6.37
£6.52
£7.19
20.0%
21.0%
20.4%
20.0%
19.1%
3
3
3
3
3
0.9%
0.8%
0.6%
0.1%
0.9%
In order to satisfy share awards granted under the LTIP, the share capital would need to be increased by 4,508,800 shares
(2017: 2,543,639 shares) taking account of the 564,091 shares (2017: 388,118 shares) held in the Employee Share Trust (Note 36).
The Company will satisfy the awards either through the issue of additional share capital or the purchase of shares as needed
on the open market. The weighted average share price during the year was £7.40 (2017: £6.81).
Expected volatility was determined by calculating the historical volatility of the Group’s share price over one, two and three years
back from the date of grant. The expected life used in the model has been adjusted, based on the Group’s best estimate, for the
effects of non-transferability, exercise restrictions and behavioural considerations.
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report
Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 31 December 2018 continued
10. Share-based payments continued
ShareMatch (Share Incentive Plan)
In June 2014, the Company launched ShareMatch, a global Share Incentive Plan (tax qualifying in the UK), under which eligible
colleagues can invest up to the limit of £1,800 per annum in the Company’s shares. The Scheme includes a matching element,
whereby for every one share purchased by the colleague, the Company will award the participant one matching share. Matching
shares are subject to forfeiture if the purchased shares are withdrawn from the Scheme within three years of purchase or if the
colleague leaves the Group, unless the reason for leaving is due to restructuring or retirement. In addition, both the purchased
and matching shares are eligible to receive any dividends payable by the Company, which are reinvested in more shares. Employee
subscriptions can be made on a monthly or one-off lump sum basis and matching shares are purchased on a monthly basis,
through a UK Trust. Further details are set out in the remuneration section of the financial statements.
Outstanding at 1 January
Purchased in the year
Transferred to participants in the year
Outstanding at 31 December
11. Investment income
Interest income on bank deposits
Fair value gain on financial instruments through the income statement
Investment income before adjusting items
Adjusting item: fair value gain on derivatives associated with EMTN borrowings
Total investment income
12. Finance costs
Interest expense on borrowings and loans1
Interest cost on pension scheme net liabilities
Total interest expense
Fair value loss on financial instruments through the income statement
Financing costs before adjusting items
Adjusting item: financing expense associated with UBM plc acquisition2
Total financing expense
2018
ShareMatch
Number of
share
awards
2017
ShareMatch
Number of
share awards
273,560
178,148
(39,896)
411,812
141,814
147,785
(16,039)
273,560
2018
£m
3.8
3.2
7.0
1.2
8.2
2018
£m
87.6
1.1
88.7
0.7
89.4
1.0
90.4
2017
£m
0.2
–
0.2
–
0.2
2017
£m
58.1
1.1
59.2
0.1
59.3
–
59.3
Note
34
1.
Included in interest expense above is the amortisation of debt issue costs of £2.5m (2017: £2.2m).
2.
The adjusting item for finance income relates to a £1.0m charge related to the amortisation of the fees associated with the UBM plc Revolving Credit Facility
that was repaid in June 2018.
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INFORMA PLC ANNUAL REPORT 2018
13. Taxation
The tax charge/(credit) comprises:
Current tax:
UK
Continental Europe
US – excluding US federal tax reform
US – charge arising from US federal tax reform
China (including Hong Kong)
Rest of World
Current year
Deferred tax:
Current year
Credit arising from US federal tax reform
Credit arising from UK Corporation Tax rate change
Total deferred tax
Total tax charge/(credit) on profit on ordinary activities
1. 2017 restated for implementation of IFRS 15 (see Note 4).
The tax adjusting items within the Consolidated Income Statement relates to the following:
Amortisation of other intangible assets
Deferred tax charge arising from revised treatment
of certain non-UK intangible assets
Benefit of goodwill amortisation for tax purposes only
Impairment of goodwill and intangibles
Acquisition and integration related costs
Restructuring and reorganisation costs
Subsequent remeasurement of contingent consideration
UAE VAT charge
GMP equalisation charge
Profit/(loss) on disposal of subsidiaries and operations
Investment income
Finance costs
Deferred tax credit on intangible assets arising from UK Corporation Tax rate change
Tax on adjusting items
Tax adjusting item for US federal tax reform
Total tax adjusting items
Notes
8
8
8
8
8
8
8
21
8
8
22
Gross
2018
£m
(243.6)
–
–
(9.8)
(88.9)
(13.1)
0.1
(9.1)
(4.5)
1.1
1.2
(1.0)
–
(367.6)
–
(367.6)
Tax
2018
£m
55.2
–
(15.1)
2.1
9.6
2.9
–
–
0.8
–
–
0.2
–
55.7
–
55.7
2018
£m
40.5
13.4
(7.9)
–
26.2
9.3
81.5
(21.0)
–
–
(21.0)
60.5
Gross
2017
£m
(157.8)
–
–
(5.6)
(24.0)
(12.9)
0.1
–
–
(17.4)
–
–
–
(217.6)
–
2017
(restated)1
£m
30.7
(0.6)
3.4
9.2
3.9
4.3
50.9
(0.9)
(94.6)
(0.4)
(95.9)
(45.0)
Tax
2017
£m
58.6
(3.1)
(12.7)
–
9.3
3.8
–
–
–
6.3
–
–
0.4
62.6
85.4
(217.6)
148.0
The current and deferred tax are calculated on the estimated assessable profit for the year. Taxation is calculated in each jurisdiction
based on the prevailing rates of that jurisdiction. US federal tax reform refers to the Tax Cuts and Jobs Act enacted in December 2017.
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 31 December 2018 continued
13. Taxation continued
The total tax charge/(credit) for the year can be reconciled to the accounting profit as follows:
Profit before tax
Tax charge at effective UK statutory rate of 19.0% (2017: 19.25%)
Non-deductible impairments
Other non-deductible expenses and similar items
Different tax rates on overseas profits
Adjustments for prior years
Adjustments to deferred tax on intangible assets
Acquisitions and disposals related items
Benefits from financing structures
Tax incentives and foreign tax credits
Movements in deferred tax not recognised
Deferred tax credit arising from UK Corporation Tax rate change
Non-taxable income
Net movement in provisions for uncertain tax positions
Net tax credit arising from US federal tax reform
Tax charge/(credit) and effective rate for the year
1. 2017 restated for implementation of IFRS 15 (see Note 4).
2018
£m
282.1
53.6
–
8.0
10.1
(6.1)
–
12.6
(4.7)
(2.4)
1.8
–
(6.8)
(5.6)
–
60.5
%
19.0
–
2.8
3.6
(2.2)
–
4.5
(1.7)
(0.9)
0.6
–
(2.4)
(2.0)
–
21.3
2017
(restated)1
£m
268.2
51.6
1.1
2.0
(3.5)
(3.0)
(0.8)
(0.7)
(1.4)
(4.6)
0.1
(0.4)
–
–
(85.4)
(45.0)
%
19.3
0.4
0.7
(1.3)
(1.1)
(0.3)
(0.3)
(0.5)
(1.7)
–
(0.1)
–
–
(31.9)
(16.8)
In addition to the income tax charge to the Consolidated Income Statement, a tax credit of £1.3m (2017: charge of £4.2m) has been
recognised directly in the Consolidated Statement of Comprehensive Income during the year.
Current tax liabilities include £57.4m (2017: £12.2m) in respect of provisions for uncertain tax positions. In 2017 the European
Commission announced that it would be opening a State Aid investigation into the UK’s Controlled Foreign Company regime and in
particular the exemption for group finance companies. Like many UK-based multinational companies, the Group has made claims in
relation to this exemption and will potentially have an additional tax liability if a negative State Aid decision is upheld. The maximum
amount that could become payable by the Group in relation to this matter is £37.2m. As part of the acquisition accounting relating to
contingent liabilities, an amount of £8.0m has been provided in relation to UBM companies. We do not currently believe it is probable
that we will ultimately have to make a payment in respect of this issue and therefore have not provided for any additional liabilities.
14. Dividends
Amounts recognised as distributions to equity holders in the year:
Final dividend for the year ended 31 December 2016
Interim dividend for the year ended 31 December 2017
Final dividend for the year ended 31 December 2017
Interim dividend for the year ended 31 December 2018
2018
Pence per
share
–
–
13.80p
7.05p
20.85p
2018
£m
–
–
113.6
88.2
201.8
2017
Pence per
share
13.04p
6.65p
–
–
2017
£m
107.4
54.8
–
–
19.69p
162.2
Proposed final dividend for the year ended 31 December 2018 and actual dividend for the
year ended 31 December 2017
14.85p
185.8
13.80p
113.7
On 28 June 2018 a special dividend payment of £59.0m was made to the former Shareholders of UBM plc, settling a dividend liability
agreed to be paid prior to the acquisition date.
176
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INFORMA PLC ANNUAL REPORT 2018
As at 31 December 2018, £0.1m (2017: £0.2m) of dividends were still to be paid, and total dividend payments in the year were £201.9m
(2017: £162.0m). The proposed final dividend for the year ended 31 December 2018 of 14.85p (2017: 13.80p) per share is subject to
approval by Shareholders at the Annual General Meeting and has not been included as a liability in these financial statements. The
payment of this dividend will not have any tax consequences for the Group.
In the year ended 31 December 2018 there were dividend payments of £8.6m (2017: £2.0m) to non-controlling interests.
15. Earnings per share
Basic
The basic earnings per share calculation is based on profit attributable to equity Shareholders of the parent of £207.9m
(2017: £310.8m profit, restated). This profit on ordinary activities after taxation is divided by the weighted average number of
shares in issue (less those shares held by the Employee Share Trust and ShareMatch), which is 1,052,752,894 (2017: 823,352,304).
Diluted
The diluted earnings per share calculation is based on the basic EPS calculation above except that the weighted average number of
shares includes all potentially dilutive options granted by the reporting date as if those options had been exercised on the first day
of the accounting period or the date of the grant, if later, giving a weighted average of 1,057,236,186 (2017: 826,146,627).
The table below sets out the adjustment in respect of dilutive potential Ordinary Shares:
Weighted average number of shares used in basic earnings per share
Potentially dilutive Ordinary Shares
Weighted average number of shares used in diluted earnings per share
2018
2017
1,052,752,894
823,352,304
4,483,292
2,794,323
1,057,236,186
826,146,627
Earnings per share
In addition to basic EPS, adjusted diluted EPS calculations have been provided as this is useful additional information on underlying
performance. Earnings are based on profits attributable to equity Shareholders and adjusted to exclude items that, in the opinion
of the Directors, would distort underlying results with the items detailed in Note 8.
Earnings per share
Profit for the year
Non-controlling interests
Earnings for the purpose of statutory basic EPS/statutory basic EPS (p)
Effect of dilutive potential Ordinary Shares
Earnings for the purpose of statutory diluted EPS/statutory diluted EPS (p)
1. 2017 restated for implementation of IFRS 15 (see Note 4).
Earnings
2018
£m
221.6
(13.7)
207.9
–
207.9
Per share
amount
2018
Pence
Earnings
2017
(restated)1
£m
Per share
amount
2017
(restated)1
Pence
313.2
(2.4)
310.8
–
310.8
19.7
–
19.7
37.7
(0.1)
37.6
11_Informa_AR18_FINANCIAL STATEMENTS.indd 177
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177
INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report
Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 31 December 2018 continued
15. Earnings per share continued
Adjusted earnings per share
Earnings for the purpose of statutory basic EPS/statutory basic EPS (p)
Adjusting items:
Intangible amortisation and impairment (Note 8)
Acquisition and integration costs (Note 8)
Redundancy and restructuring costs (Note 8)
Subsequent remeasurement of contingent consideration (Note 8)
UAE VAT charge
GMP equalisation
(Profit)/loss on disposal of subsidiaries and operations (Note 8)
Investment income (Note 8)
Finance costs (Note 8)
Tax related to adjusting items (Note 8)
Tax adjusting items for US federal tax reform (Note 8)
Earnings for the purpose of adjusted basic EPS/adjusted basic EPS (p)
Effect of dilutive potential Ordinary Shares
Earnings for the purpose of adjusted diluted EPS/adjusted diluted EPS (p)
1. 2017 restated for implementation of IFRS 15 (see Note 4).
Earnings
2018
£m
207.9
253.4
88.9
13.1
(0.1)
9.1
4.5
(1.1)
(1.2)
1.0
(55.7)
–
519.8
–
519.8
Per share
amount
2018
Pence
19.7
24.1
8.4
1.3
–
0.9
0.4
(0.1)
(0.1)
0.1
(5.3)
–
49.4
(0.2)
49.2
Earnings
2017
(restated)1
£m
310.8
163.4
24.0
12.9
(0.1)
–
–
17.4
–
–
(62.6)
(85.4)
380.4
–
380.4
16. Goodwill
Cost
At 1 January 2017
Additions in the year
Disposals
Exchange differences
At 1 January 2018
Additions in the year (Note 18)
Disposals
Transfer to held for sale
Exchange differences
At 31 December 2018
Accumulated impairment losses
At 1 January 2017
Impairment losses for the year (Note 8)
Disposals
Exchange differences
At 1 January 2018
Impairment losses for the year
Disposals
Exchange differences
At 31 December 2018
Carrying amount
At 31 December 2018
At 31 December 2017
178
Per share
amount
2017
(restated)1
Pence
37.7
19.8
2.9
1.6
–
–
–
2.2
–
–
(7.6)
(10.4)
46.2
(0.2)
46.0
£m
2,892.1
114.6
(101.4)
(173.0)
2,732.3
3,499.2
(2.2)
(31.4)
160.4
6,358.3
(192.6)
(3.4)
67.8
4.1
(124.1)
–
1.2
1.9
(121.0)
6,237.3
2,608.2
11_Informa_AR18_FINANCIAL STATEMENTS.indd 178
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INFORMA PLC ANNUAL REPORT 2018
Impairment review
As goodwill is not amortised, it is tested for impairment annually, or more frequently if there are indicators of impairment. The
impairment review took place on 31 December 2018. The testing involved comparing the carrying value of assets in each cash
generating unit (CGU) at the segment level with value in use calculations or assessments of fair value less costs to sell, derived
from the latest Group cash flow projections.
In 2018 there was £nil impairment of goodwill (2017: £3.4m impairment charge) and there was a £9.8m (2017: £2.2m) impairment
charge in relation to intangible assets arising on acquisition of businesses or assets, with £5.7m arising in the ICRE CGU in Global
Exhibitions associated with a business that was subsequently sold and £4.1m in the TMT CGU in Knowledge & Networking
associated with an event that was no longer operated in 2018.
In 2018 the Group revised the approach to impairment testing of goodwill to reflect a change in the level at which goodwill is
monitored. This reflects the completion of the Group’s 2014–2017 Growth Acceleration Plan in which the operating structure of the
business changed to four market facing Operating Divisions plus the UBM Division, with monitoring of goodwill now undertaken at
the segment level representing an aggregation of CGUs rather than at the individual CGU level. As 2018 is the year of change in the
approach for goodwill impairment testing we have undertaken testing at both the former CGU level and the new segment level. This
has involved testing for impairment at a segment level by aggregating the carrying value of assets across CGUs in each Division and
at the segment level and comparing this to value in use calculations or assessments of fair value less costs to sell, derived from the
latest Group cash flow projections.
Following this change, there were five groups of CGUs for goodwill impairment testing and segment reporting in 2018. The carrying
amount of goodwill recorded in the CGU groups is set out below:
CGU groups
Academic Publishing
Business Intelligence
Global Exhibitions
Knowledge & Networking
UBM
2018
Number of
CGUs
2017
Number of
CGUs
1
6
11
4
1
23
1
6
12
7
–
26
2018
£m
541.4
811.6
1,037.5
342.4
3,504.4
6,237.3
2017
£m
527.4
766.1
983.4
331.3
–
2,608.2
The recoverable amounts of the CGU groups are determined as the greater of the value in use calculations or fair value less costs to
sell, which are based on the cash flow projections for each CGU group. The key assumptions are those regarding the revenue and
operating margin growth rates together with the long-term growth rate and the discount rate applied to the forecast cash flows.
Estimated future cash flows are determined by reference to the budget for the year following the balance sheet date and forecasts
for the following two years, after which a long-term perpetuity growth rate is applied. The most recent financial budget approved
by the Board of Directors has been prepared after considering the current economic environment in each of our markets.
Long-term market growth rates
Pre-tax discount rates
Key assumptions
Academic Publishing
Business Intelligence
Global Exhibitions
Knowledge & Networking
UBM
2018
2.2%
2.1%
2.4%
2.1%
2.4%
2017
2.5%
2.0–2.5%
1.7–3.9%
1.7–2.5%
n/a
2018
2017
9.9%
9.6%
10.1% 10.2–10.5%
7.2–12.9%
10.5%
9.3%
10.4%
9.2–11.8%
n/a
The pre-tax discount rates used in the value in use calculations reflect the Group’s assessment of the current market and other risks
specific to the CGUs. Long-term growth rates are applied after the forecast period. Long-term growth rates are based on external
reports on long-term CPI inflation rates for the geographic market in which each CGU operates and therefore do not exceed the
long-term average growth prospects for the individual markets.
179
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report
Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 31 December 2018 continued
16. Goodwill continued
The Group has undertaken a sensitivity analysis taking into consideration the impact on changes to key impairment test assumptions
arising from a range of possible future trading and economic scenarios including the potential impact of Brexit. These have been
applied across all CGUs and CGU groups. For the UBM CGU an increase in the pre-tax discount rate by 0.6%, or a decrease in the
terminal growth rate of 0.7%, or a reduction to the operating profit growth rate of 6.4%, reduces the headroom to nil. There were
no impairments to other CGUs or CGU groups under the following scenarios, which are summarised as follows:
• An increase in the pre-tax discount rate by 1%
• A decrease in the terminal growth rate by 0.5%
• A decrease in the operating profit growth rate by 5%
• An increase in the pre-tax discount rate by 1% and a decrease in the terminal growth rate by 0.5%
17. Other intangible assets
Database and
intellectual
property,
brand and
customer
relationships
£m
Exhibitions
and
conferences,
brand and
customer
relationships
£m
Publishing
book lists and
journal titles
£m
Sub-total
£m
Intangible
software
assets
£m
Product
development1
£m
567.3
1,385.0
2,863.7
Cost
At 1 January 2017
Disposals following review of register
Arising on acquisition of subsidiaries and operations
Additions
Reclassification
Disposals
Disposal of subsidiaries
Exchange differences
At 1 January 2018
Arising on acquisition of subsidiaries and operations
Additions2
Disposals
Transfer to held for sale (Note 26)
Exchange differences
At 31 December 2018
Amortisation
At 1 January 2017
Disposals following review of register
Charge for the year
Impairment losses
Reclassification
Disposals
Disposal of subsidiaries
Exchange differences
At 1 January 2018
Charge for the year
Impairment losses (Note 16)
Disposals
Transfer to held for sale (Note 26)
Exchange differences
At 31 December 2018
Carrying amount
At 31 December 2018
At 31 December 2017
3,681.5
5,236.7
252.5
(410.5)
(474.2)
(300.0)
(1,184.7)
911.4
–
14.4
7.8
–
–
(19.0)
(46.2)
868.4
–
1.2
–
–
27.1
896.7
(1.7)
14.9
6.3
(3.0)
(0.2)
(10.8)
(34.7)
538.1
61.2
0.8
–
–
58.4
658.5
–
(51.3)
(2.0)
–
–
14.7
22.5
1.7
(15.5)
(0.1)
0.1
0.1
10.8
29.1
(426.6)
(52.7)
(448.0)
(52.9)
–
–
–
(22.6)
(523.5)
–
–
–
(15.1)
(494.4)
402.3
441.8
(13.0)
90.1
18.1
3.0
(0.6)
(3.8)
(111.0)
1,367.8
2,270.7
14.7
(6.8)
(35.5)
70.6
(14.7)
119.4
32.2
–
(0.8)
(33.6)
(191.9)
2,774.3
2,331.9
16.7
(6.8)
(35.5)
156.1
13.0
(91.0)
(0.1)
(0.1)
0.5
2.6
19.9
(355.2)
(138.0)
(9.8)
3.9
1.2
(11.3)
(509.2)
14.7
(157.8)
(2.2)
–
0.6
28.1
71.5
(1,229.8)
(243.6)
(9.8)
3.9
1.2
(49.0)
(1,527.1)
135.0
90.1
3,172.3
1,012.6
3,709.6
1,544.5
156.1
–
0.1
49.6
(2.4)
(0.4)
(0.7)
(5.5)
196.8
21.2
31.4
(1.3)
–
4.4
(68.7)
–
(16.0)
–
–
0.3
0.7
2.9
(80.8)
(27.8)
–
2.1
–
(3.0)
(109.5)
143.0
116.0
Total
£m
3,070.7
(14.7)
120.3
94.5
–
(1.3)
(34.3)
(200.6)
3,034.6
2,353.1
54.3
(8.6)
(35.5)
162.5
5,560.4
(1,268.6)
14.7
(182.6)
(2.2)
–
0.9
28.8
75.8
(1,333.2)
(286.1)
(13.6)
6.5
1.2
(53.2)
(1,678.4)
3,882.0
1,701.4
50.9
–
0.8
12.7
2.4
(0.1)
–
(3.2)
63.5
–
6.2
(0.5)
–
2.0
71.2
(15.2)
–
(8.8)
–
–
–
–
1.4
(22.6)
(14.7)
(3.8)
0.5
–
(1.2)
(41.8)
29.4
40.9
1. All product development in 2018 and 2017 is internally generated.
2. Additions includes business asset additions and product development. Of the £54.3m total additions, the Consolidated Cash Flow Statement shows £57.4m for
these items with £30.2m for intangible software assets, £6.2m for product development and £21.0m for titles, Brands and customer relationships.
180
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INFORMA PLC ANNUAL REPORT 2018
Intangible software assets includes a gross carrying amount of £208.4m (2017: £171.0m) and accumulated amortisation of £95.7m
(2017: £68.0m) which relates to software that has been internally generated. The Group does not have any of its intangible assets
pledged as security over bank loans.
18. Business combinations
Cash paid on acquisition net of cash acquired
Current period acquisitions
UBM plc
ICON Advisory Group, Ltd
CitiExpo
ECMI ITE
Other
Prior period acquisitions
2017 acquisitions:
Yachting Promotions, Inc. (YPI)
Dove Medical Press Limited
Futurum Media Limited
Skipta, LLC
Guangzhou Informa Yi Fan Exhibitions Co., Limited
Karnac Books Limited
New AG International Sarl
Mapa International Limited
Other
2010-2016 acquisitions:
Penton
Other
Total prior period acquisitions
Total cash paid in year net of cash acquired
Segment
UBM
Business Intelligence
Global Exhibitions
UBM
Global Exhibitions
Academic Publishing
Knowledge & Networking
Business Intelligence
Global Exhibitions
Academic Publishing
Knowledge & Networking
Business Intelligence
2018
£m
509.3
42.7
7.0
3.2
0.1
562.3
–
0.6
5.0
1.4
0.4
0.4
2.5
0.2
3.9
16.9
–
31.3
593.6
2017
£m
–
–
–
–
–
–
111.1
43.0
1.6
4.6
4.2
3.9
5.5
2.0
5.7
(4.5)
16.1
193.2
193.2
181
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 31 December 2018 continued
18. Business combinations continued
Acquisitions
The provisional amounts recognised in respect of the estimated fair value of identifiable assets and liabilities for the acquisitions
made in 2018 and payments made in 2018 relating to prior year acquisitions was:
Intangibles
Property and equipment
Investments in joint ventures and associates
Deferred tax assets
Retirement benefit surplus
Trade and other receivables
Cash and cash equivalents
Current tax liabilities
Trade and other payables1
Deferred income
Provisions
Retirement benefit obligation
Derivative liabilities
Borrowings including derivatives associated with borrowings
Deferred tax liabilities
Identifiable net assets acquired
Put options over non-controlling interests
Non-controlling interest
Goodwill
Total consideration
Satisfied by:
Cash consideration
Deferred and contingent cash consideration
Deferred consideration
Initial share consideration
Total consideration
Net cash outflow arising on acquisitions:
Initial cash consideration
Deferred and contingent consideration paid
Less: net cash acquired
Net cash outflow arising on acquisitions
ICON
Advisory
Group, Ltd
£m
22.0
0.1
–
–
–
0.6
1.6
–
(0.7)
(0.2)
–
–
–
–
–
23.4
–
–
20.9
44.3
44.3
–
–
–
44.3
44.3
–
(1.6)
42.7
UBM plc
£m
2,315.7
30.1
16.5
2.6
6.0
225.6
134.2
(66.0)
(213.8)
(426.9)
(44.8)
(0.9)
(17.1)
(702.6)
(370.2)
888.4
6.6
(175.8)
3,470.8
4,190.0
643.5
–
1.4
3,545.1
4,190.0
643.5
–
(134.2)
509.3
Other
acquisitions
£m
15.5
–
–
–
–
1.1
6.7
(0.3)
(4.2)
–
–
–
–
–
(6.8)
12.0
–
(1.0)
7.5
18.5
17.0
1.5
–
–
18.5
17.0
–
(6.7)
10.3
Prior year
acquisitions
and deferred
consideration
£m
–
–
–
–
–
–
–
–
–
31.3
–
–
–
–
31.3
–
–
–
31.3
–
31.3
–
–
31.3
–
31.3
–
31.3
Total
£m
2,353.2
30.2
16.5
2.6
6.0
227.3
142.5
(66.3)
(218.7)
(427.1)
(13.5)
(0.9)
(17.1)
(702.6)
(377.0)
955.1
6.6
(176.8)
3,499.2
4,284.1
704.8
32.8
1.4
3,545.1
4,284.1
704.8
31.3
(142.5)
593.6
1. Included within trade and other payables was £59.0m paid to former UBM Shareholders on 28 June 2018.
Business combinations made in 2018
UBM plc
On 15 June 2018, the Group acquired 100% of the issued share capital of UBM plc. Total consideration was £4,190.0m, of which
£643.5m was paid in cash, £3,545.1m was settled by the issue of 427,536,794 shares in Informa PLC at a price of £8.29 per share,
and there was £1.4m of deferred consideration relating to the costs to settle share save scheme awards that were exercised after
the acquisition date, with £2.5m of deferred consideration settled in shares and cash less £1.1m of SAYE option proceeds. There
was cash acquired of £134.2m and debt acquired at fair value of £702.6m including associated derivatives.
182
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INFORMA PLC ANNUAL REPORT 2018 The provisional fair value of the identifiable assets acquired, and liabilities assumed, at the acquisition date are shown below:
Book
value1
£m
Provisional
fair value
adjustments
£m
Provisional
fair value
£m
2,287.8
2,315.7
Intangibles
Property and equipment
Investment in joint ventures and associates
Deferred tax assets
Retirement benefit surplus
Trade and other receivables
Cash and cash equivalents
Current tax liabilities
Trade and other payables
Deferred income
Provisions
Retirement benefit obligation
Derivative liabilities
Borrowings including derivatives associated with borrowings
Deferred tax liabilities
Identifiable net assets acquired
Put options over non-controlling interests
Non-controlling interest
Provisional goodwill
Total consideration
Consideration
Cash
Share consideration
Deferred consideration
Total
27.9
30.1
17.1
86.3
6.0
229.0
134.2
(58.0)
(213.8)
(426.9)
(41.2)
(0.9)
(17.1)
(688.6)
–
–
(0.6)
(83.7)
–
(3.4)
–
(8.0)
–
–
(3.6)
–
–
(14.0)
(370.2)
(915.9)
1,804.3
6.6
(32.9)
–
(142.9)
30.1
16.5
2.6
6.0
225.6
134.2
(66.0)
(213.8)
(426.9)
(44.8)
(0.9)
(17.1)
(702.6)
(370.2)
888.4
6.6
(175.8)
3,470.8
4,190.0
643.5
3,545.1
1.4
4,190.0
1. Book value excludes UBM goodwill, acquisition intangible assets and the related deferred tax liability on these intangibles as these amounts are replaced
at acquisition date.
The fair values are described as provisional and will be finalised in the reporting for the six months ending 30 June 2019. Provisional
fair values of acquisition intangibles and goodwill are based on a detailed fair value exercise, which involved support from a third
party valuation specialist.
The provisional goodwill arising from the acquisition has initially been identified as relating to the following factors:
Increased scale and industry specialisation in business-to-business information services.
•
• Access to new markets where Informa previously had less presence, with the benefit of global reach of the highly complementary
geographic fit of the combined portfolios.
• Synergy opportunities from cost savings and incremental revenue opportunities.
• Enhanced quality of earnings as increased scale and international breadth provide resilience and greater revenue predictability.
• Greater levels of product and platform innovation facilitated increased operating and financial scale.
The provisional fair value of acquired intangible assets is £2,294.5m offset by a £6.7m fair value reduction in sales and marketing
software and consolidation finance systems that will not be utilised in the combined Group. A further £3.4m of sales and marketing
software work in progress was reported within trade and other receivables and is reduced to a fair value of £nil.
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 31 December 2018 continued
18. Business combinations continued
The associated deferred tax liability recognised on the acquisition intangible assets is £525.5m. Deferred tax assets of £157.9m are
recognised in the 15 June 2018 Balance Sheet relating to brought forward losses and other tax attributes in the UK, US and Brazil.
Of this balance, £71.6m previously not recognised by UBM as it was uncertain that they would be utilised. £2.6m of the total deferred
tax asset recognised as an asset, the remainder is offset as permitted against the deferred tax liability.
A fair value decrease to joint ventures and associates of £0.6m and a fair value increase to non-controlling interests of £142.9m have
been recognised with support from a third party valuation specialist. The increase in non-controlling interest is primarily driven by
overseas businesses (most notably China) having been established with local partners a number of years ago.
There is a fair value provision of £8.0m in respect of the European Commission’s State Aid investigation into the UK’s Controlled
Foreign Company regime. Further information is given in Note 13.
A fair value provision of £3.6m has been recognised for an unfavourable property contract in London.
The provisional fair value adjustment to borrowings is an increase of £14.0m to the private placement loan notes and Bond
borrowings. This fair value reflects the market rate of interest on these borrowings at the acquisition date.
Acquisition costs charged to operating profit (included in adjusted items in the Consolidated Income Statement) amounted to
£41.1m for adviser and related external fees.
The business generated adjusted operating profit of £202.6m, profit after tax of £21.4m, and £613.5m of revenue for the period
between the date of acquisition and 31 December 2018. If the acquisition had completed on the first day of the financial year, it
would have generated profit after tax of £54.8m and £988.4m of revenue for the year ended 31 December 2018.
ICON Advisory Group, Ltd
Informa purchased ICON Advisory Group, Ltd on 26 July 2018 for total consideration of £44.3m ($58.2m), settled in cash.
The provisional fair value of the identifiable assets acquired and liabilities assumed at the acquisition date are shown below:
Intangible assets
Property and equipment
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Deferred income
Current tax liabilities
Identifiable net assets acquired
Provisional goodwill
Total consideration
Consideration
Cash
Total
Book
value1
£m
Provisional
fair value
adjustments
£m
Provisional
fair value
£m
–
0.1
0.6
1.6
(0.7)
(0.2)
–
1.4
22.0
–
–
–
–
–
–
22.0
22.0
0.1
0.6
1.6
(0.7)
(0.2)
–
23.4
20.9
44.3
44.3
44.3
1. Book value excludes goodwill, acquisition intangible assets and the related deferred tax liability on these intangibles as these amounts are replaced
at acquisition date.
184
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INFORMA PLC ANNUAL REPORT 2018 The provisional goodwill arising from the acquisition has initially been identified as relating to the following factors:
• Providing Informa with greater presence in the growing Business Intelligence financial market.
• Providing a strong operational and management team to the Group.
The fair value of acquisition intangible assets was estimated to be £22.0m. No deferred tax liability has been recognised on
acquisition as a result of claiming a tax deduction for goodwill and intangible assets which gives rise to a deferred tax asset
equal to the deferred tax liability.
Acquisition costs charged to operating profit (included in adjusted items in the Consolidated Income Statement) amounted
to £0.2m for adviser and related external fees.
The business generated an adjusted operating profit of £1.3m, profit after tax of £1.0m, and £3.1m of revenue for the period between
the date of acquisition and 31 December 2018. If the acquisition had completed on the first day of the financial period, it would have
incurred a profit after tax of £2.1m and generated £6.5m to the revenue of the Group for the year ended 31 December 2018.
Other business combinations made in 2018
There were three other acquisitions completed in the year ended 31 December 2018 for a total consideration of £18.5m, of which
£10.3m was paid in cash, net of cash acquired of £6.7m with £1.5m of deferred consideration.
Update on deferred and contingent consideration paid in 2018 relating to business combinations
completed in prior years
In the year ended 31 December 2018 there were contingent and deferred net cash payments of £31.3m relating to acquisitions
completed in prior years.
There were no further adjustments made in 2018 in respect of the fair value of the acquired assets and assumed for acquisitions
completed in 2017 which were disclosed in the 2017 Annual Report and Accounts.
Equity transactions
When there is a change in ownership of a subsidiary without a change in control, the difference between the consideration paid/
received and the relevant share of the carrying amount of net assets acquired/disposed of the subsidiary is recorded in equity.
The carrying amounts of the controlling and non-controlling interests are adjusted to reflect the changes in their relative interests
in the subsidiary. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the
consideration paid is recognised directly in equity.
Cash paid
Contingent consideration
Put option liability
Carrying amount of non-controlling interest at acquisition date
Recognised in equity
2018
£m
(5.3)
(1.0)
6.3
(2.3)
(2.3)
2017
£m
–
–
–
–
–
On 6 July 2018, the Group acquired the remaining 15% minority shareholding of UBM ICC Fuarcilik ve Organizasyon Ticaret A.Ş
and the remaining 25% of UBM Istanbul Fuarcılık ve Gösteri Hizmetleri A.Ş. and NTSR Fuar ve Gösteri Hizmetleri A.Ş. for initial
consideration of £5.3m and contingent consideration of £1.0m. This equity purchase brings the Group’s total shareholding in
these entities to 100%.
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 31 December 2018 continued
19. Property and equipment
Cost
At 1 January 2017
Additions1
Acquisition of subsidiaries
Disposals
Disposal of subsidiaries
Exchange differences
At 1 January 2018
Additions1
Acquisition of subsidiaries
Disposals
Transfer to held for sale (Note 26)
Exchange differences
At 31 December 2018
Depreciation
At 1 January 2017
Charge for the year
Disposals
Disposal of subsidiaries
Exchange differences
At 1 January 2018
Charge for the year
Disposals
Impairment
Transfer to held for sale (Note 26)
Exchange differences
At 31 December 2018
Carrying amount
At 31 December 2018
At 31 December 2017
Freehold
land and
buildings
£m
Leasehold
land and
buildings
£m
Equipment,
fixtures
and fittings
£m
3.1
–
–
–
–
(0.1)
3.0
–
–
–
–
0.1
3.1
(0.3)
(0.1)
–
–
–
(0.4)
(0.1)
–
–
–
(0.1)
(0.6)
2.5
2.6
17.6
6.0
–
(1.0)
(0.5)
(1.0)
21.1
15.6
27.9
(2.7)
(0.4)
3.1
64.6
(7.5)
(2.5)
0.7
0.3
0.4
(8.6)
(5.0)
2.3
(2.6)
0.3
(1.5)
44.7
10.3
3.7
(2.5)
(0.9)
(2.9)
52.4
7.8
2.3
(8.3)
(1.2)
5.5
58.5
(33.5)
(6.6)
1.7
0.8
1.9
(35.7)
(8.0)
8.2
(0.1)
0.5
(5.0)
(15.1)
(40.1)
49.5
12.5
18.4
16.7
Total
£m
65.4
16.3
3.7
(3.5)
(1.4)
(4.0)
76.5
23.4
30.2
(11.0)
(1.6)
8.7
126.2
(41.3)
(9.2)
2.4
1.1
2.3
(44.7)
(13.1)
10.5
(2.7)
0.8
(6.6)
(55.8)
70.4
31.8
1. £23.4m (2017: £14.7m) additions represents cash paid.
The Group does not have any of its property and equipment pledged as security over bank loans.
20. Other investments and investments in joint ventures and associates
Investments in joint ventures and associates
The carrying value of investments in joint ventures and associates is set out below:
At 1 January
Arising on acquisition of subsidiaries and operations
Share of results of joint ventures and associates
Foreign exchange
At 31 December
186
2018
£m
1.5
16.5
1.0
0.1
19.1
2017
£m
1.5
–
–
–
1.5
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INFORMA PLC ANNUAL REPORT 2018 The following represents the aggregate amount of the Group’s share of assets, liabilities, income and expenses of the Group’s
joint ventures:
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net assets
Operating profit
Profit before tax
Profit after tax
100% of
results
2018
£m
88.4
73.4
161.8
(48.6)
(100.4)
12.8
5.9
5.9
5.6
Group
share
2018
£m
16.5
13.7
30.2
(9.8)
(20.1)
0.3
1.1
1.1
1.0
100% of
results
2017
£m
Group
share
2017
£m
–
2.8
2.8
–
(0.9)
1.9
0.1
0.1
0.1
–
1.4
1.4
–
(0.5)
0.9
–
–
–
The Group’s investments in joint ventures at 31 December 2018 are as follows:
Company
Lloyd’s Maritime Information Services Limited
Independent Materials Handling Exhibitions Limited
Informa Tharawat LLC
Cosmosprof Shanghai Exhibitions Limited
Guangdong International Exhibitions Limited
Guzhen Lighting Expo Co., Ltd
GML Exhibition (Thailand) Co., Ltd
Games for Good Causes plc
PT Dyandra UBM International
MedtecLive GmbH
Country of
incorporation
and operation
Class of
shares held
Shareholding
or share of
operation
Accounting
year end
Division
BI
GE
K&N
UBM
UBM
UBM
UBM
UBM
UBM
UBM
UK
UK
State of Qatar
China
China
China
China
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
50% 31 December
50% 31 December
49% 31 December
50% 31 December
50% 31 December
51% 31 December
49% 31 December
UK
Ordinary
36% 31 December
Indonesia
Germany
Ordinary
Ordinary
49% 31 December
49% 31 December
The Group’s investments in associates at 31 December 2018 are as follows:
Company
Pestana Management Limited1
Independent Television News Limited
PA Group
1. Pestana Management Limited is incorporated in Cyprus and operates in Russia.
Other investments
The Group’s other investments at 31 December 2018 are as follows:
At 1 January
Additions in year
At 31 December
Country of
incorporation
and operation
Cyprus1
UK
UK
Class of
shares held
Ordinary
Ordinary
Ordinary
Division
K&N
UBM
UBM
Shareholding
or share of
operation
Accounting
year end
49% 31 December
20% 31 December
17% 31 December
2018
£m
4.6
0.5
5.1
2017
£m
1.6
3.0
4.6
Other investments include investments in unlisted equity securities and convertible loan notes which are redeemable through the
issue of equity.
187
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 31 December 2018 continued
21. Disposal of subsidiaries and operations
During the year, the Group generated the following profit/(loss) on disposal of subsidiaries and operations:
Delicious Living
ehi Live exhibition
PR Newswire
Euroforum conference business in Germany and Switzerland
Compendium Contech
Garland Science
Biotechniques
Lloyd’s List Australia
Australia Bulk Handling Review
Corporate Training businesses loan recovery
Other operations (loss)/profit on disposal
Profit/(loss) for the year from disposal of subsidiaries and operations
2018
£m
0.2
(3.3)
5.4
(0.7)
–
–
–
–
–
–
(0.5)
1.1
2017
£m
–
–
–
15.5
(1.6)
(7.5)
(19.2)
(4.6)
(0.7)
0.6
0.1
(17.4)
On 17 September 2018, the Group disposed of the ehi Live exhibition and recorded a loss on disposal of £3.3m. In August 2018, there
was a £5.4m profit on disposal relating to the release of indemnity provisions associated with the 2016 disposal of PR Newswire by
UBM plc. On 19 June 2018, there was a loss on disposal of £0.7m relating to a payment for the finalisation of working capital amounts
in relation to the 2017 disposal of Euroforum.
22. Deferred tax
Deferred tax liabilities
Accelerated capital allowances
Intangibles
Pensions (Note 34)
Losses
Other
The movement in deferred tax balance during the year is:
Net deferred tax liability at 1 January
(Credit)/charge to other comprehensive income for the year
Acquisitions and additions
Disposal
Transfer to held for sale
Credit to profit or loss for the year excluding US federal tax reform
Credit to profit or loss for the year arising from US federal tax reform
Credit to profit or loss for the year arising from UK Corporation Tax rate change
Other rate change movements
Foreign exchange movements
Net deferred tax liability at 31 December
Consolidated Balance Sheet
at 31 December
Consolidated Income
Statement year ended
31 December
2018
£m
(3.0)
764.5
(7.5)
(120.4)
(35.3)
598.3
2017
£m
2.7
306.6
(5.8)
(45.6)
(15.9)
242.0
2018
£m
0.9
(34.1)
(0.5)
14.8
(2.1)
(21.0)
2018
£m
242.0
(1.3)
373.8
(0.4)
(8.7)
(21.0)
–
–
–
13.9
598.3
2017
£m
(0.2)
(146.2)
(0.1)
46.3
4.3
(95.9)
2017
£m
335.5
4.2
26.4
–
–
(4.3)
(94.6)
(0.4)
(0.7)
(24.1)
242.0
Certain deferred tax assets and liabilities have been offset. The following is the analysis of deferred tax balances for the Consolidated
Balance Sheet.
188
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INFORMA PLC ANNUAL REPORT 2018 Deferred tax liability
Deferred tax asset
2018
£m
620.3
(22.0)
598.3
2017
£m
251.0
(9.0)
242.0
Deferred tax assets have been recognised because, based on the Group’s current forecasts, it is expected that there will be taxable
profits against which these assets can be utilised.
The Finance Act 2016 enacted a reduction in the UK Corporation Tax rate to 17.0% from 1 April 2020. Deferred tax has been provided
on UK temporary timing differences at the UK rate at which they are expected to reverse.
The Group has the following unused tax losses in respect of which no deferred tax assets have been recognised:
• £270.8m (2017: £nil) of UK tax losses.
• £109.7m (2017 £2.2m) of US federal tax losses which expire between 2019 and 2038. In addition, there are unrecognised
deferred tax assets in respect of US state tax losses of £5.4m (2017: £4.0m).
• £251.6m (2017: £nil) of UK capital losses which are only available for offset against future capital gains.
• £5.0m (2017: £37.9m) of US capital losses which are only available for offset against future capital gains.
• £7.5bn (2017: £nil) of Luxembourg tax losses.
• £36.1m (2017: £41.9m) of Brazilian tax losses.
• £40.4m (2017: £29.0m) of tax losses in other countries.
No deferred tax has been recognised in respect of these tax losses as it is not considered probable that these losses will be utilised.
In addition, the Group has unrecognised deferred tax assets in relation to other deductible temporary differences of £2.6m
(2017: £nil). No deferred tax assets have been recognised in respect of these amounts as it is not considered probable that they
will be utilised.
At the reporting date, deferred tax liabilities of £0.7m (2017: £nil) have been recognised in respect of withholding tax on post-acquisition
undistributed earnings of the Group’s subsidiaries. The aggregate amount of withholding tax on post-acquisition undistributed earnings
for which deferred tax liabilities have not been recognised was £1.2m (2017: £1.2m). No liability has been recognised because the Group,
being in a position to control the timing of the distribution of intra-Group dividends, has no intention to distribute intra-Group dividends
in the foreseeable future that would trigger withholding tax.
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 31 December 2018 continued
23. Trade and other receivables
Current
Trade receivables
Less: loss allowance
Trade receivables net
Other receivables
Prepayments and accrued income
Total current
Non-current
Other receivables
2018
£m
250.1
(37.7)
212.4
33.8
156.5
402.7
2017
(restated)1
£m
231.6
(27.2)
204.4
22.6
99.1
326.1
6.3
409.0
0.1
326.2
1. 2017 restated for implementation of IFRS 15 (see Note 4).
The average credit period taken on sales of goods is 48 days (2017: 52 days) applying consistent methodology. The Group has
provision policies for its various Divisions which have been determined by reference to past default experience. Under the
normal course of business, the Group does not charge interest on its overdue receivables.
The Group’s exposures to credit risk and impairment losses related to trade and other receivables are disclosed in Note 32.
The Directors consider that the carrying amount of trade and other receivables approximates to their fair value.
24. Derivative financial instruments
Financial assets – non-current
Interest rate swaps – hedged
Interest rate swaps – not hedged
Financial liabilities – current
Put options over non-controlling interests
Financial liabilities – non-current
Interest rate swaps – hedged
Put options over non-controlling interests
2018
£m
0.4
1.1
1.5
10.1
10.1
25.2
1.8
27.0
2017
£m
–
–
–
–
–
–
–
–
Interest rate swaps are associated with debt instruments and are included within net debt (see Note 27). There were £1.5m of
derivative financial assets and £25.2m of derivative financial liabilities relating to interest rate swaps (£24.1m in relation to cross
currency interest rate swaps – see Note 32 for further details).
Put options over non-controlling interests relate to options over previous acquisitions (see Note 32 for further details).
190
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INFORMA PLC ANNUAL REPORT 2018
25. Inventory
Work in progress
Finished goods and goods for resale
2018
£m
8.2
42.7
50.9
2017
£m
11.3
42.8
54.1
Write-down of inventory during the year amounted to £3.0m (2017: £3.0m).
26. Assets classified as held for sale and liabilities directly associated with assets classified as held for sale
On 19 December 2018, the Group agreed the disposal of the UBM Life Sciences business, with the sale completing on 31 January 2019
(see Note 42). In accordance with IFRS 5, the Group has classified the assets and liabilities of UBM Life Sciences as held for sale in the
Consolidated Balance Sheet at 31 December 2018 as it does not meet the requirement of a discontinued operation.
The major classes of assets and liabilities of the UBM Life Sciences business at 31 December 2018 were as follows:
Goodwill
Intangibles
Property and equipment
Trade and other receivables
Assets of business classified as held for sale
Trade and other payables
Deferred tax liability
Provisions
Liabilities of business associated with assets classified as held for sale
Net assets of business held for sale
2018
£m
31.4
34.3
0.8
13.0
79.5
(7.1)
(8.7)
(0.3)
(16.1)
63.4
27. Movements in net debt
Net debt consists of cash and cash equivalents and includes bank overdrafts, borrowings, derivatives associated with debt instruments,
and other loan note receivables where these are interest bearing and do not relate to deferred contingent arrangements.
Cash at bank and in hand
Overdrafts
Cash and cash equivalents
Bank loans due in less than one year
Bank loans due in more than one year
Bank loan fees due in less than one year
Bank loan fees due in more than one year
Private placement loan notes due in less than one year
Private placement loan notes due in more than one year
Private placement loan note fees
Bond borrowings due in more than one year
Bond borrowing fees
Derivative assets associated with borrowings
Derivative liabilities associated with borrowings
Net debt
At 1 January
2018
£m
Non-cash
movements
£m
54.9
(6.7)
48.2
(296.3)
(287.6)
–
2.0
–
(841.0)
1.6
–
–
–
–
(1,373.1)
–
–
–
–
–
(2.5)
(1.1)
183.1
(182.4)
(0.6)
1.1
(0.9)
–
2.7
(0.6)
UBM net
debt
acquired
£m
134.2
–
134.2
(151.0)
–
–
–
(284.6)
–
1.3
(12.4)
(37.1)
(49.5)
307.9
227.5
2.5
–
101.5
(313.6)
0.9
(269.1)
(872.7)
1.7
1.5
(2.4)
(568.4)
6.6
–
–
(588.9)
Cash flow
£m
Exchange
movements
£m
At 31
December
2018
£m
(7.9)
(0.1)
(8.0)
(17.5)
(18.4)
–
–
–
(59.4)
0.2
(22.3)
–
–
168.8
(43.9)
124.9
(156.9)
(78.5)
–
0.9
–
(1,396.4)
3.4
(1,163.0)
7.4
1.5
(25.5)
(150.9)
(25.2)
(2,681.9)
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report
Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 31 December 2018 continued
27. Movements in net debt continued
Included within the net cash outflow of £588.9m (2017: outflow of £14.6m) is £1,179.4m (2017: £1,292.1m) of loan repayments,
£644.0m (2017: £1,070.8m) of facility loan drawdowns, £872.7m of proceeds from the EMTN bond issuance, £101.5m of private
placement repayments (2017: £159.7m) and £313.6m of private placement drawdowns (2017: £406.4m).
28. Cash and cash equivalents
Cash at bank and on hand
Bank overdrafts
Cash and cash equivalents in the Consolidated Cash Flow Statement
Note
29
2018
£m
168.8
(43.9)
124.9
2017
£m
54.9
(6.7)
48.2
The cash at bank and on hand is presented net of the Group’s legal right to offset overdrafts. The Group’s exposure to interest rate
risks and a sensitivity analysis for financial assets and liabilities is disclosed in Note 32.
29. Borrowings
Total borrowings, excluding derivative assets and liabilities associated with borrowings, are as follows:
Current
Bank overdraft
Bank borrowings ($400.0m) – due March 2018
Bank borrowings ($200.0m) – due March 2019
Total current borrowings
Non-current
Bank borrowings – Revolving Credit Facility – due October 2020
Bank debt issue costs
Bank borrowings – non-current
Private placement loan note ($385.5m) – due December 2020
Private placement loan note ($45.0m) – due June 2022
Private placement loan note ($120.0m) – due October 2022
Private placement loan note ($55.0m) – due January 2023
Private placement loan note ($76.1m) – due June 2024
Private placement loan note ($80.0m) – due January 2025
Private placement loan note ($200.0m) – due January 2025
Private placement loan note ($130.0m) – due October 2025
Private placement loan note ($365.0m) – due January 2027
Private placement loan note ($116.0m) – due June 2027
Private placement loan note ($200.0m) – due January 2028
Private debt issue costs
Private placement – non-current
Bond borrowings ($350.0m) – due November 2020
Euro Medium Term Note (€650.0m) – due July 2023
Euro Medium Term Note (£300.0m) – due July 2026
Bond borrowings issue costs
Bond borrowings – non-current
Total non-current borrowings
Notes
28
27
27
2018
£m
43.9
–
156.9
200.8
78.5
(0.9)
77.6
302.5
36.5
94.2
43.1
60.9
62.8
156.9
102.0
286.4
94.2
156.9
(3.4)
27
1,393.0
279.1
583.9
300.0
(7.4)
1,155.6
2,626.2
2,827.0
27
2017
£m
6.7
296.3
–
303.0
287.6
(2.0)
285.6
285.5
–
88.9
40.7
–
59.2
–
96.3
270.4
–
–
(1.6)
839.4
–
–
–
–
–
1,125.0
1,428.0
There have been no breaches of covenants under the Group’s bank facilities and private placement loan notes during the year.
The Group does not have any of its property and equipment and other intangible assets pledged as security over loans.
192
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INFORMA PLC ANNUAL REPORT 2018
At 31 December 2018, the Group had private placement loan notes amounting to $1,772.6m (2017: $1,135.5m). As at 31 December
2018, the note maturities ranged between two and nine years (2017: three and ten years), with an average duration of 5.8 years
(2017: 6.1 years), at a weighted average interest rate of 4.1% (2017: 4.1%).
For the purpose of refinancing the UBM plc acquisition borrowings the Group issued the following Euro Medium Term Notes (EMTNs),
which are debt instruments traded outside of the USA and Canada. On 2 July 2018, the bonds were priced with an issue date of 5 July 2018:
• A 5-year fixed term note, until July 2023, of value €650m.
• An 8-year fixed term note, until July 2026, of value £300m.
The Group maintains the following lines of credit:
• £855.0m (2017: £855.0m) Revolving Credit Facility, of which £78.5m (2017: £287.6m) was drawn down at 31 December 2018.
Interest is payable at the rate of LIBOR plus a margin based on the ratio of net debt to EBITDA.
• £156.9m (USD 200.0m) bank term loan facility with a maturity of up to March 2019 and issued by Bank of America Merrill Lynch.
This was repaid in February 2019.
• £167.1m (2017: £134.0m) comprising a number of bilateral bank uncommitted facilities that can be drawn down to meet short-term
financing needs, of which £43.9m (2017: £6.7m) was drawn at 31 December 2018. These facilities consist of £101.0m (2017: £81.0m),
USD 25.0m (2017: USD 15.0m), €42.0m (2017: €43.0m), AUD 1.0m (2017: AUD 1.0m), CAD 2.0m (2017: CAD 2.0m), SGD 2.3m
(2017: SGD 2.3m) and CNY 50.0m (2017: CNY 50.0m). Interest is payable at the local base rate plus a margin.
• Four bank guarantee facilities comprising in aggregate up to USD 10.0m (2017: USD 10.0m), €7.0m (2017: €7.0m), £2.0m (2017: £nil)
and AUD 1.5m (2017: AUD 1.5m).
The effective interest rate for the year ended 31 December 2018 was 3.8% (2017: 3.8%).
The Group’s exposure to liquidity risk is disclosed in Note 32(g).
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193
INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 31 December 2018 continued
30. Provisions
At 1 January 2017
Increase in year
Utilisation
Release
At 1 January 2018
Increase in year
Acquisition of subsidiaries
Currency translation
Utilisation
Transfer to held for sale
Release
At 31 December 2018
2018
Current liabilities
Non-current liabilities
2017
Current liabilities
Non-current liabilities
Contingent
consideration
£m
Acquisition
& integration
£m
Property
leases
£m
Restructuring
provision
£m
Other
provision
£m
21.2
33.9
(15.7)
0.1
39.5
9.7
12.8
0.5
(21.9)
–
–
40.6
28.5
12.1
15.5
24.0
12.3
5.0
(14.7)
(0.4)
2.2
9.0
7.9
–
(12.7)
–
(1.2)
5.2
5.2
–
2.2
–
8.4
7.9
(3.1)
(1.9)
11.3
6.7
10.8
–
(5.8)
–
(0.3)
22.7
7.7
15.0
3.3
8.0
4.3
7.9
(9.4)
(0.1)
2.7
8.6
3.6
–
(10.8)
(0.3)
–
3.8
4.0
(0.2)
2.7
–
–
2.4
–
–
2.4
17.9
–
0.1
6.1
–
(5.3)
21.2
18.0
3.2
1.4
1.0
Total
£m
46.2
57.1
(42.9)
(2.3)
58.1
51.9
35.1
0.6
(45.1)
(0.3)
(6.8)
93.5
63.4
30.1
25.1
33.0
The contingent consideration will be paid primarily in one to two years. The contingent consideration is based on future business
valuations and profit multiples (both Level 3 fair value measurements) and has been estimated on an acquisition by acquisition
basis using available profit forecasts (a significant unobservable input). The higher the profit forecast, the higher the fair value of
any contingent consideration (subject to any maximum payout clauses), and if all future business valuations and profit multiples
were achieved, the maximum undiscounted amounts payable for contingent consideration would be £221.3m.
The property lease provision represents a provision for vacant property. This is calculated as the estimated excess of rent payable
on surplus property leases, plus dilapidation provisions, less rent receivable via sub-leases. The property lease provisions will be
fully utilised between one and five years.
See Note 8 for details of items included in restructuring provisions and details of the remeasurement of contingent consideration.
Amounts included within restructuring provisions are expected to be utilised in 2019.
194
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INFORMA PLC ANNUAL REPORT 2018 31. Trade and other payables
Current
Deferred consideration
Trade payables
Accruals
Other payables
Total current
Non-current
Deferred consideration
Other payables
Total non-current
2018
£m
3.4
115.8
265.7
58.1
443.0
–
33.9
33.9
476.9
2017
(restated)1
£m
2.0
68.6
200.4
25.6
296.6
17.0
9.7
26.7
323.3
1. 2017 restated for implementation of IFRS 15 (see Note 4).
Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit
period taken for trade purchases is 46 days (2017: 49 days) applying consistent methodology. There are no suppliers who represent
more than 10% of the total balance of trade payables in either 2018 or 2017. The Group has financial risk management policies in
place to ensure that all payables are paid within the credit time frame. Therefore, under the normal course of business, the Group
is not charged interest on overdue payables. The Directors consider that the carrying amount of trade payables is approximate to
their fair value.
32. Financial instruments
(a) Financial risk management
The Group has exposure to the following risks from its use of financial instruments:
• Capital risk management
• Market risk
• Credit risk
• Liquidity risk
This note presents information about the Group’s exposure to each of the above risks, the Group’s management of capital, and the
Group’s objectives, policies and procedures for measuring and managing risk.
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework.
The Board has established a Treasury Committee which is responsible for developing and monitoring the Group’s financial risk
management policies. The Treasury Committee meets regularly and reports to the Audit Committee on its activities.
The Group Treasury function provides services to the Group’s businesses, co-ordinates access to domestic and international financial
markets, and monitors and manages the financial risks relating to the operations of the Group. These risks include market risk
(including currency risk and price risk), credit risk, liquidity risk and interest rate risk.
The Treasury Committee has put in place policies to identify and analyse the financial risks faced by the Group and has set
appropriate limits and controls. These policies provide written principles on funding investments, credit risk, foreign exchange
and interest rate risk. Compliance with policies and exposure limits are reviewed by the Treasury Committee. This Committee is
assisted in its oversight role by Internal Audit, which undertakes both regular and ad hoc reviews of risk management controls
and procedures, the results of which are reported to the Audit Committee.
195
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report
Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 31 December 2018 continued
32. Financial instruments continued
Capital risk management
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising
the return to stakeholders as well as sustaining the future development of the business. In order to maintain or adjust the capital
structure, the Group may adjust the amount of dividends paid to Shareholders, return capital to Shareholders, issue new shares
or sell assets to reduce debt.
The capital structure of the Group consists of net debt, which includes borrowings (Note 29), cash and cash equivalents (Note 28),
and equity attributable to equity holders of the parent, comprising issued capital (Note 35), reserves and retained earnings.
Cost of capital
The Group’s Treasury Committee reviews the Group’s capital structure on a regular basis and, as part of this review, the Committee
considers the weighted average cost of capital and the risks associated with each class of capital.
Gearing ratio
The principal financial covenant ratios under the Group’s borrowing facilities are maximum net debt to EBITDA of 3.5 times and
minimum EBITDA interest cover of 4.0 times, tested semi-annually. At 31 December 2018, both financial covenants were achieved,
with the ratio of net debt (using average exchange rates) to EBITDA being 2.9 times (2.5 times at 31 December 2017). The ratio of
EBITDA to net interest payable in the year ended 31 December 2018 was 9.5 times (2017: 9.8 times). EBITDA is calculated from
earnings before interest, tax, depreciation and amortisation, with earnings stated before adjusting items.
(b) Categories of financial instruments
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement
and the basis on which income and expenses are recognised in respect of each class of financial asset, financial liability and equity
instrument, are disclosed in Note 2.
Financial assets
Trade receivables
Other receivables
Cash at bank and on hand
Derivative assets associated with borrowings
Investments in unquoted companies
Total financial assets
Financial liabilities
Bank overdraft
Bank borrowings
Private placement loan notes
Bond borrowings
Derivative liabilities associated with borrowings
Derivative liabilities associated with put options over non-controlling interests
Trade payables
Accruals
Other payables
Deferred consideration
Contingent consideration
Total financial liabilities
1. 2017 restated for implementation of IFRS 15 (see Note 4).
196
Notes
23
23
28
27
20
29
29
29
29
27
24
31
31
31
31
30
2018
£m
212.4
40.1
168.8
1.5
5.1
427.9
43.9
234.5
1,393.0
1,155.6
25.2
11.9
115.8
265.7
92.0
3.4
40.6
20171
£m
204.4
22.7
54.9
–
4.6
286.6
6.7
581.9
839.4
–
–
–
68.6
200.4
35.3
19.0
39.5
3,381.6
1,790.8
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INFORMA PLC ANNUAL REPORT 2018
(c) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange and interest rates, will affect the Group’s income or the
value of its holdings of financial instruments.
The Group manages these risks by maintaining a mix of fixed and floating rate debt and currency borrowings using derivatives where
necessary. The Group does not use derivative contracts for speculative purposes.
The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise adverse
effects on the Group’s financial performance. Risk management is carried out by a central treasury department under policies
approved by the Board of Directors.
(d) Interest rate risk
The Group has no significant interest-bearing assets at floating rates, except cash, but is exposed to interest rate risk as entities in
the Group borrow funds at both fixed and floating interest rates. Borrowings issued at variable rates expose the Group to cash flow
interest rate risk. Borrowings issued at or converted to fixed rates expose the Group to fair value interest rate risk.
The interest rate risk is managed by maintaining an appropriate mix of fixed and floating rate borrowings and by the use of interest
rate swap contracts. The Group’s exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity
risk section of this note.
The following table details financial liabilities by interest category:
Bank overdraft
Bank borrowings
Private placement loan notes
Bond borrowings
Derivatives liabilities associated
with borrowings
Derivative liabilities
associated with put options
over non-controlling interests
Trade payables
Accruals
Other payables
Deferred consideration
Contingent consideration
2018
2017 (restated)1
Fixed
rate
£m
–
–
1,356.5
1,155.6
24.1
Floating
rate
£m
43.9
234.5
36.5
–
1.1
–
–
–
–
–
–
–
–
–
–
–
–
Non-
interest
bearing
£m
–
–
–
–
–
11.9
115.8
265.7
92.0
3.4
40.6
Total
£m
43.9
234.5
1,393.0
1,155.6
25.2
11.9
115.8
265.7
92.0
3.4
40.6
Fixed
rate
£m
–
–
839.4
–
–
–
–
–
–
–
–
Floating
rate
£m
6.7
581.9
–
–
–
–
–
–
–
–
–
Non-
interest
bearing
£m
–
–
–
–
–
–
68.6
200.4
35.3
19.0
39.5
Total
£m
6.7
581.9
839.4
–
–
–
68.6
200.4
35.3
19.0
39.5
2,536.2
316.0
529.4
3,381.6
839.4
588.6
362.8
1,790.8
1. 2017 restated for implementation of IFRS 15 (see Note 4).
Interest rate sensitivity analysis
88% of borrowings are at fixed interest rates; hence the Group’s interest rate sensitivity would only be affected by the exposure
to variable rate debt.
If interest rates had been 100 basis points higher or lower and all other variables were held constant, the Group’s profit for the year
would have decreased or increased by £3.2m (2017: £5.9m).
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197
INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report
Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 31 December 2018 continued
32. Financial instruments continued
Fair value hedges
Interest rate swaps – derivative financial assets
Interest rate swaps – derivative financial liabilities
2018
£m
1.5
(25.2)
2017
£m
–
–
At 31 December 2018, interest rate swaps were in place for $76.1m matched against $76.1m of the US private placement loan notes
due 2024. Under this swap, the Group receives a fixed rate of 4.45% and pays a floating rate of interest semi-annually in arrears.
At 31 December 2018, the fair value of this swap was a financial liability of £1.1m.
Interest rate swaps at 31 December 2018 also relate to the floating rate swaps for $100.0m matching against $100.0m of the $350.0m
5.75% bond borrowings due in November 2020. Under these swaps the Group receives interest of 5.75% to match the bond coupons
and pays a floating rate of interest semi-annually in arrears. At 31 December 2018 the fair value of these swaps was a financial asset
of £0.4m.
There were also cross currency interest rate swaps over the EMTN borrowings where the Group receives a fixed rate of interest for
£300.0m of EMTN borrowings for the duration of the 8 year bond and pays a fixed rate of interest for $393.7m; also where the Group
receives a fixed rate of interest on €150.0m of EMTN borrowings for the duration of the 5 year bond and pays a fixed rate of interest
for $174.1m. At 31 December 2018, the fair value of these swaps was a financial liability of £24.1m.
The interest rate swaps are used to increase the Group’s exposure to interest rates to maintain a balance of fixed and floating
interest rate cost. These hedges were assessed to be highly effective at 31 December 2018 with the small ineffective portions
of the hedging contracts included in financing income.
(e) Foreign currency risk
The Group is a business with significant net US dollar (USD) transactions; hence exposures to exchange rate fluctuations arise.
Allied to the Group’s policy on the hedging of surplus foreign currency cash inflows, the Group will usually seek to finance its net
investment in its principal overseas subsidiaries by borrowing in those subsidiaries’ functional currencies, primarily USD. This policy
has the effect of partially protecting the Group’s Consolidated Balance Sheet from movements in those currencies to the extent that
the associated net assets are hedged by the net foreign currency borrowings.
The carrying amounts of the Group’s foreign currency denominated monetary assets and liabilities at the reporting date are as follows:
USD
EUR
Other
Assets
2018
£m
379.9
44.6
191.2
615.7
2017
£m
208.4
23.2
259.1
490.7
Liabilities
2018
£m
2017
£m
(2,527.6)
(1,791.3)
(723.3)
(900.5)
(25.9)
(310.8)
(4,151.4)
(2,128.0)
The foreign currency borrowings of £2,494.8m (2017: £1,292.3m) are used to hedge the Group’s net investments in foreign subsidiaries.
Average rate
Closing rate
2018
1.33
2017
1.29
2018
1.27
2017
1.35
USD
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INFORMA PLC ANNUAL REPORT 2018
Foreign currency sensitivity analysis
In 2018, the Group earned approximately 61% (2017: 65%) of its revenues and incurred approximately 53% (2017: 55%) of its costs in
USD or currencies pegged to USD. The Group is therefore sensitive to movements in USD against GBP. In 2018, each $0.01 movement
in the USD to GBP exchange rate has a circa £11.4m (2017: £8.5m) impact on revenue and a circa £4.5m (2017: £3.5m) impact on
adjusted operating profit. Offsetting this are reductions to the value of USD borrowings, interest and tax liabilities. This analysis
assumes all other variables, including interest rates, remain constant.
(f) Credit risk
The Group’s principal financial assets are trade and other receivables (Note 23) and cash and cash equivalents (Note 28), which
represent the Group’s maximum exposure to credit risk in relation to financial assets.
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group.
The Group has adopted a policy of assessing creditworthiness of counterparties as a means of mitigating the risk of financial loss
from defaults.
The Group’s exposure and the creditworthiness of its counterparties are continuously monitored and the aggregate value of
transactions concluded is spread amongst approved financial institutions. Credit exposure is controlled by counterparty limits
that are reviewed and approved as part of the Group’s treasury policies.
The carrying amount of financial assets recorded in the financial statements, which is net of impairment losses, represents the
Group’s maximum exposure to credit risk.
The Group’s current credit risk grading framework is comprised of the following categories:
Category
Performing
Doubtful
In default
Write-off
Description
Basis for recording expected credit losses (ECL)
The counterparty has a low risk of default and does not have any past-due amounts 12-month ECL
Amount is > 30 days past due or there has been a significant increase in credit risk
since initial recognition
Lifetime ECL – not credit impaired
Amount is > 90 days past due or there is evidence indicating the asset is
credit-impaired
Lifetime ECL – credit impaired
There is evidence indicating that the debtor is in severe financial difficulty and the
Group has no realistic prospect of recovery
Amount is written off
Trade receivables
The Group’s credit risk is primarily attributable to its trade and other receivables. The amounts presented in the Consolidated
Balance Sheet are net of allowances for doubtful receivables, estimated by the Group based on prior experience and its assessment
of the current economic environment.
Trade receivables consist of a large number of customers, spread across diverse industries and geographic areas, and the Group’s
exposure to credit risk is influenced mainly by the individual characteristics of each customer.
The Group does not have significant credit risk exposure to any single counterparty or any group of counterparties having similar
characteristics. The Group defines counterparties as having similar characteristics if they are related entities. Concentration of credit
risk did not exceed 5% of gross monetary assets at any time during the year.
The Group always measures the loss allowance for trade receivables at an amount equal to lifetime ECL. The ECLs on trade
receivables are estimated by reference to past default experience of the debtor and an analysis of the debtor’s current financial
position, adjusted for factors that are specific to the debtors, general economic conditions of the industry in which the debtor
operates and an assessment of both the current as well as the forecast direction of conditions at the reporting date.
There has been no significant change in the estimation techniques or significant assumptions made during the current reporting period.
199
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 31 December 2018 continued
32. Financial instruments continued
The Group writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and
there is no realistic prospect of recovery, e.g. when the debtor has been placed under liquidation or has entered into bankruptcy
proceedings, or when the trade receivables are overdue and considered irrecoverable, whichever occurs earlier. None of the trade
receivables that have been written off are subject to enforcement activities.
All customers have credit limits set by credit managers and are subject to the standard terms of payment of each Division. As the Global
Exhibitions and Knowledge & Networking Divisions and the Journals part of the Academic Publishing Division work predominantly
on a prepaid basis, they are not subject to the same credit controls and they have a low bad debt history. The Group is exposed to
normal credit risk and potential losses are mitigated as the Group does not have significant exposure to any single customer.
The Directors consider that the carrying amount of trade and other receivables approximates their fair value.
Non-current other receivables
Non-current other receivables arose from disposals made in the current and prior years as disclosed in Note 23. The Risk Committee
reviews these receivables and the credit quality of the counterparties on a regular basis.
Ageing of trade receivables:
Not past due
Past due 0–30 days
Past due > 31 days
Books provision (see below)
Gross
2018
£m
124.6
41.4
84.1
–
250.1
Provision
2018
£m
Gross
2017
(restated)1
£m
Provision
2017
£m
–
–
(17.0)
(20.7)
(37.7)
54.2
89.9
87.5
–
231.6
–
–
(10.2)
(17.0)
(27.2)
1. 2017 restated for implementation of IFRS 15 (see Note 4).
Trade receivables that are less than three months past due for payment are generally not considered impaired. For trade receivables
that are more than three months past due for payment, there are debtors with a carrying amount of £10.4m (2017: £24.4m) which
the Group has not provided for, as there has not been a significant change in the credit quality and the amounts are considered
recoverable. The Group does not hold any collateral over these balances.
A provision relating to returns on books of £20.7m (2017: £17.0m) has been disclosed separately in the table above. This is based on
the Group’s best estimate of previous returns trends, and the amount is included as part of the overall provision balance of £38.3m
(2017: £27.2m).
Movement in the provision:
1 January
Arising on acquisition of subsidiaries and operations
Provision recognised
Receivables written off as uncollectible
Amounts recovered during the year
31 December
2018
£m
27.2
22.3
2.3
(7.7)
(6.4)
37.7
2017
£m
31.3
–
5.7
(2.8)
(7.0)
27.2
There are no customers who represent more than 10% of the total gross balance of trade receivables in either 2018 or 2017.
200
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INFORMA PLC ANNUAL REPORT 2018
(g) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. Ultimate responsibility for
liquidity risk management rests with the Board of Directors, though operationally it is managed by Group Treasury with oversight
by the Treasury Committee. Group Treasury has built an appropriate liquidity risk management framework for the management of
the Group’s short, medium and long-term funding. The Group manages liquidity risk by maintaining adequate reserves and debt
facilities, together with continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial
assets and liabilities. Included in Note 29 is a summary of additional undrawn facilities that the Group has at its disposal.
Historically and for the foreseeable future the Group has been, and is expected to continue to be, in a net borrowing position.
The Group’s policy is to fulfil its borrowing requirements by borrowing in the currencies in which it operates, principally USD
and EUR; thereby providing a natural hedge against projected future surplus USD cash inflows.
(h) Liquidity and interest risk tables
The following tables detail the Group’s remaining contractual maturity for its financial assets and liabilities.
The table below presents the contractual maturities of the financial assets including interest that will be earned on those assets
except where the Group anticipates that the cash flow will occur in a different period.
31 December 2018
Non-derivative financial assets
Non-interest bearing
31 December 2017
Non-derivative financial assets
Non-interest bearing
Carrying
amount
£m
Contractual
cash flows1
£m
Less than
1 year
£m
1–2 years
£m
2–5 years
£m
Greater than
5 years
£m
426.4
426.4
286.6
286.6
426.4
426.4
286.6
286.6
415.0
415.0
281.9
281.9
11.4
11.4
4.7
4.7
–
–
–
–
–
–
–
–
1. Under IFRS 7 contractual cash flows are undiscounted and therefore may not agree with the carrying amounts in the Consolidated Balance Sheet.
The following tables present the earliest date on which the Group can settle its financial liabilities. The table includes both interest
and principal cash flows.
31 December 2018
Non-derivative financial liabilities
Variable interest rate instruments
Fixed interest rate instruments
Trade and other payables
Deferred consideration
Contingent consideration
31 December 2017
Non-derivative financial liabilities
Variable interest rate instruments
Fixed interest rate instruments
Trade and other payables2
Deferred consideration
Contingent consideration
Carrying
amount
£m
Contractual
cash flows1
£m
Less than
1 year
£m
1–2 years
£m
2–5 years
£m
Greater than
5 years
£m
314.9
2,512.1
473.5
3.4
40.6
320.5
2,992.9
473.5
3.4
40.6
3,344.5
3,830.9
588.6
839.4
304.3
19.0
39.5
588.6
1,054.30
304.3
19.0
39.5
1,790.8
2,005.7
202.5
89.9
439.6
3.4
28.4
763.8
303.0
34.1
294.6
2.0
15.5
649.2
80.2
666.6
33.9
–
12.2
792.9
285.6
34.1
9.7
17.0
24.0
37.8
891.7
–
1,344.7
–
–
–
–
–
–
929.5
1,344.7
–
450.1
–
–
–
–
536.0
–
–
–
370.4
450.1
536.0
1. Under IFRS 7 contractual cash flows are undiscounted and therefore may not agree with the carrying amounts in the Consolidated Balance Sheet.
2. 2017 restated for implementation of IFRS 15 (see Note 4).
201
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 31 December 2018 continued
32. Financial instruments continued
(i) Fair value of financial instruments
Financial assets and financial liabilities measured at fair value in the Consolidated Balance Sheet:
Financial assets
Derivative financial instruments in designated hedge accounting relationships
Unhedged derivative financial instruments
Equity investments in unquoted companies
Financial liabilities
Derivative financial instruments in designated hedge accounting relationships
Derivative liabilities associated with put options over non-controlling interests
Contingent and deferred consideration on acquisitions
Carrying
amount
2018
£m
Estimated
fair value
2018
£m
Carrying
amount
2017
£m
Estimated
fair value
2017
£m
0.4
1.1
5.1
6.6
25.2
11.9
44.0
81.1
0.4
1.1
5.1
6.6
25.2
11.9
44.0
81.1
–
–
4.6
4.6
–
58.5
58.5
–
–
4.6
4.6
–
58.5
58.5
(j) Fair values and fair value hierarchy
Valuation techniques use observable market data where it is available and rely as little as possible on entity-specific estimates. The
fair values of interest rate swaps and forward exchange contracts are measured using discounted cash flows. Future cash flows are
based on forward interest/exchange rates (from observable yield curves/forward exchange rates at the end of the reporting period)
and contract interest/forward rates, discounted at a rate that reflects the credit risk of the counterparties.
The fair values of put options over non-controlling interests (including exercise price) and contingent and deferred consideration
on acquisitions are measured using discounted cash flow models with inputs derived from the projected financial performance
in relation to the specific contingent consideration criteria for each acquisition, as no observable market data is available. The fair
values are most sensitive to the projected financial performance of each acquisition; management makes a best estimate of these
projections at each financial reporting date and regularly assesses a range of reasonably possible alternatives for those inputs and
determines their impact on the total fair value. An increase of 20% to the projected financial performance used in the put option
measurements would increase the aggregate liability by £1.8m. The fair value of the contingent and deferred consideration on
acquisitions is not significantly sensitive to a reasonable change in the forecast performance. The potential undiscounted amount
for all future payments that the Group could be required to make under the contingent consideration arrangements for all
acquisitions is disclosed in Note 30.
Financial instruments that are measured subsequently to initial recognition at fair value are grouped into Levels 1 to 3, based on
the degree to which the fair value is observable, as follows:
Level 1: fair value measurements are those derived from unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2: fair value measurements are those derived from inputs, other than quoted prices included within Level 1, that are
observable for the asset or liability, either directly (as prices) or indirectly (derived from prices).
Level 3: fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are
not based on observable market data (unobservable inputs).
202
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INFORMA PLC ANNUAL REPORT 2018 Financial assets and liabilities measured at fair value in the statement of financial position and their categorisation in the fair value hierarchy:
Financial assets
Derivative financial instruments in designated hedge accounting relationships
Unhedged derivative financial instruments
Equity investments in unquoted companies
Financial liabilities at amortised cost
Bank borrowings (including bank overdraft)
Private placement loan notes
Bond borrowings
Financial liabilities at fair value through profit or loss
Private placement loan notes
Bond borrowings
Derivative financial instruments in designated hedge accounting relationships1
Contingent and deferred consideration on acquisitions
Put options over non-controlling interests
1. £24.1m relates to interest rate swaps associated with Euro Medium Term Notes. Refer to Note 29.
Financial assets
Derivative financial instruments in designated hedge accounting relationships
Equity investments in unquoted companies
Financial liabilities
Derivative financial instruments in designated hedge accounting relationships
Contingent and deferred consideration on acquisitions
Level 1
2018
£m
Level 2
2018
£m
Level 3
2018
£m
–
–
–
–
–
–
–
–
–
–
–
–
–
0.4
1.1
5.1
6.6
278.4
1,318.2
1,072.9
59.2
80.3
25.2
–
–
2,834.2
–
–
–
–
–
–
–
–
–
–
44.0
11.9
55.9
Level 1
2017
£m
Level 2
2017
£m
Level 3
2017
£m
–
–
–
–
–
–
–
4.6
4.6
–
–
–
–
–
–
–
58.5
58.5
Total
2018
£m
0.4
1.1
5.1
6.6
278.4
1,318.2
1,072.9
59.2
80.3
25.2
44.0
11.9
2,890.1
Total
2017
£m
–
4.6
4.6
–
58.5
58.5
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 31 December 2018 continued
33. Notes to the cash flow statement
Profit before tax
Adjustments for:
Depreciation of property and equipment
Amortisation of other intangible assets
Impairment – goodwill
Impairment – acquisition intangible assets
Impairment – other intangible assets
Impairment – property and equipment
Share-based payments
Subsequent remeasurement of contingent consideration
(Profit)/loss on disposal of businesses
Pension curtailment gain
GMP equalisation charge
Investment income
Finance costs
Share of adjusted results of joint ventures and associates
Operating cash inflow before movements in working capital
Decrease/(increase) in inventories
Decrease/(increase) in receivables
(Decrease)/increase in payables
Movements in working capital
Pension deficit contributions
Cash generated by operations
1. 2017 restated for implementation of IFRS 15 (see Note 4).
Notes
19
17
8
17
17
19
10
8
21
34
34
11
12
20
2018
£m
282.1
13.1
286.1
–
9.8
3.8
2.7
8.1
(0.1)
(1.1)
(0.8)
4.5
(8.2)
90.4
(1.0)
689.4
3.2
89.7
(142.9)
(50.0)
(4.4)
635.0
2017
(restated)1
£m
268.2
9.2
182.6
3.4
2.2
–
–
5.4
(0.1)
17.4
–
–
(0.2)
59.3
–
547.4
(2.2)
(40.5)
26.5
(16.2)
–
531.2
34. Retirement benefit schemes
(a) Charge to operating profit
The charge to operating profit for the year in respect of pensions, including both defined benefit and defined contribution schemes,
was £19.8m (2017: £10.6m). This consisted of a £0.8m credit to operating profit related to a past service cost curtailment gain on the
closure of the UBM Retirement Medical Plan in the US, a £4.5m past service cost charge to adjusting items within operating profit for
the GMP equalisation cost and a £16.1m charge to operating profit relating to defined contribution schemes (2017: £10.6m).
(b) Defined benefit schemes – strategy
The Group operates four defined benefit pension schemes in the UK (the UK Schemes): the Informa Final Salary Scheme, the
Taylor & Francis Group Pension and Life Assurance Scheme and, following the UBM acquisition, the UBM Pension Scheme (UBMPS)
and the United Newspapers Executive Pension Scheme (UNEPS). These are for qualifying UK colleagues and provide benefits based
on final pensionable pay. The Group has two defined benefit schemes in the US, the Penton Media, Inc. Retirement Plan and the
Penton Media, Inc. and Supplemental Executive Retirement Plan. All schemes (the Group Schemes) are closed to future accrual.
Contributions to the UK Schemes are determined following triennial valuations undertaken by a qualified actuary using the Projected
Unit Credit Method. Contributions to the US Schemes are assessed annually following valuations undertaken by a qualified actuary.
For the UK Schemes, the defined benefit schemes are administered by separate funds that are legally separated from the Company.
The Trustees are responsible for running the UK Schemes in accordance with the Group Schemes’ Trust Deed and Rules, which sets out
their powers. The Trustees of the UK Schemes are required to act in the best interests of the beneficiaries of the Group Schemes. There
is a requirement that one-third of the Trustees are nominated by the members of the UK Schemes. The Trustees of the pension funds
are responsible for the investment policy with regard to the assets of the fund. Neither of the Schemes has any reimbursement rights.
The Group’s pension funding policy is to provide sufficient funding, as agreed with the Trustees, to ensure any pension deficit will
be addressed to ensure pension payments made to current and future pensioners will be met.
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For the Penton Schemes, the defined benefit scheme is administered by Penton Media, Inc. and is subject to the provisions of the
Retirement Income Security Act 1974. The Company is responsible for the investment policy with regard to the assets of the fund.
The Scheme has no reimbursement rights.
The investment strategies adopted by the Trustees of the UK Schemes include some exposure to index-linked gilts and corporate
bonds. The investment objectives of the US Penton Schemes are to maximise plan assets within designated risk and return profiles.
The current asset allocation of all schemes consists primarily of equities, bonds, property, diversified growth funds, credit funds,
LIBOR funds, bespoke funds and annuity contracts. All assets are managed by a third party investment manager according to
guidelines established by the Company.
(c) Defined benefit schemes – risk
Through the Group Schemes the Company is exposed to a number of potential risks as described below:
• Asset volatility: the Group Schemes’ defined benefit obligation is calculated using a discount rate set with reference to corporate
bond yields; however, the Group Schemes invest significantly in equities. These assets are expected to outperform corporate
bonds in the long term, but provide volatility and risk in the short term.
• Changes in bond yields: a decrease in corporate bond yields would increase the Group Schemes’ defined benefit obligation;
•
however, this would be partially offset by an increase in the value of the Schemes’ bond holdings.
Inflation risk: a significant proportion of the Group Schemes’ defined benefit obligation is linked to inflation; therefore higher
inflation will result in a higher defined benefit obligation (subject to caps for the UK Schemes). The majority of the UK Schemes’
assets are either unaffected by inflation, or only loosely correlated with inflation, therefore an increase in inflation would also
increase the deficit.
• Life expectancy: if the Group Schemes’ members live longer than expected, the Group Schemes’ benefits will need to be paid
for longer, increasing the Group Schemes’ defined benefit obligations.
The Trustees and the Company manage risks in the Group Schemes through the following strategies:
• Diversification: investments are well diversified, such that the failure of any single investment would not have a material impact
on the overall level of assets.
Investment strategy: the Trustees are required to review their investment strategy on a regular basis.
•
There are three categories of pension Scheme members:
• employed deferred members: currently employed by the Company;
• deferred members: former colleagues of the Company; and
• pensioner members: in receipt of pension.
The defined benefit obligation is valued by projecting the best estimate of future benefit payments (allowing for future salary
increases for UK employed deferred members, revaluation to retirement for deferred members and annual pension increases
for UK members) and then discounting to the balance sheet date. UK members receive increases to their benefits linked to inflation
(subject to caps for the UK Schemes). There are no caps on benefits in the US Schemes as benefits are not linked to inflation in these
Schemes. The valuation method used for all Schemes is known as the Projected Unit Credit Method.
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 31 December 2018 continued
34. Retirement benefit schemes continued
The approximate overall duration of the Group Schemes’ defined benefit obligation as at 31 December 2018 was as follows:
Overall duration (years)
Penton US
Schemes
14
2018
UBM UK
Schemes
14
2017
Other UK
Schemes
Penton US
Schemes
UK Schemes
19
15
20
The assumptions which have the most significant effect on the results of the IAS 19 valuation for the Schemes are those relating to the
discount rate, the rates of increase in price inflation, salaries, and pensions and life expectancy. The main assumptions adopted are:
Discount rate
Rate of price inflation
Rate of increase for deferred pensions
Rate of increase for pensions in payment
Life expectancy:
For an individual aged 60 – male (years)
For an individual aged 60 – female (years)
Penton US
Schemes
4.10%
n/a
n/a
n/a
84
88
2018
UBM UK
Schemes
2.80%
Other
UK Schemes
2.80%
2.15% (CPI)
3.15% (RPI)
2.15% (CPI)
3.15% (RPI)
2.15%
2.15%
1.85–3.60%
1.95–3.05%
86
89
87
89
2017
Penton US
Schemes
3.25%
n/a
n/a
n/a
85
87
Other UK
Schemes
2.4%
2.1% (CPI)
3.1% (RPI)
2.1%
1.9–3.0%
87
89
For the UK Schemes, mortality assumptions used in the IAS 19 valuations are taken from tables published by Continuous Mortality
Investigation (CMI). The latest base tables for the other UK schemes use S2PMA (males) and S2PFA (females), with UBM UK Schemes
using 105% of the “SAPS’ S2” tables based on the year of birth, and all UK Schemes use life expectancy improvements taken from
CMI 2017 (2017: CMI 2016) with the long-term rate of improvement of 1.25% (2017: 1.25%). For the valuation of US Scheme liabilities,
the RP-2014 mortality tables adjusted to 2006 total data set mortality have been used (2017: RP-2014 adjusted to 2006 total data set
mortality), with life expectancy improvements using scale MP-2018 (2017: scale MP-2017).
(d) Defined benefit schemes – individual defined benefit scheme details
Informa Final Salary Scheme
The Trustees are required to carry out an actuarial valuation every three years. The result of this valuation determines the level
of contributions payable by the Group. The last actuarial full valuation of the Informa Final Salary Scheme was performed by the
Scheme actuary for the Trustees as at 31 March 2017. This valuation revealed a funding shortfall of £5.5m. The recovery plan shows
annual employer contributions of £2.0m in the 12 months to 31 March 2019 and 31 March 2020 and £1.5m in the 12 months to
31 March 2021. The next triennial actuarial valuation of the Informa Final Salary Scheme will be as at 31 March 2020, at which
point the recovery plan will be reassessed.
The Scheme was closed to new entrants on 1 April 2000 and closed to future accrual on 1 April 2011. The Group’s contribution over
the year was £1.5m (2017: £nil). The weighted average duration of pension scheme liabilities was 19 years at 31 December 2018.
An actuarial valuation was carried out for IAS 19 purposes as at 31 December 2018 by a qualified independent actuary.
Taylor & Francis Group Pension and Life Assurance Scheme
The Trustees are required to carry out an actuarial valuation every three years. The result of this valuation determines the level of
contributions payable by the Group. The last actuarial full valuation of the Taylor & Francis Group Pension and Life Assurance Scheme
was performed by the Scheme actuary for the Trustees as at 30 September 2017. The valuation as at 30 September 2017 revealed a
funding surplus of £1.7m and no recovery plan was required. The next triennial actuarial valuation of the Taylor & Francis Group
Pension and Life Assurance Scheme is due as at 30 September 2020.
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INFORMA PLC ANNUAL REPORT 2018
The Scheme was closed to new entrants on 1 April 2000 and closed to future accrual on 1 April 2011. The Group’s contribution over
the year was £nil (2017: £nil). The weighted average duration of pension scheme liabilities was 19 years at 31 December 2018.
An actuarial valuation was carried out for IAS 19 purposes as at 31 December 2018 by a qualified independent actuary.
UBM Pension Scheme (UBMPS)
The Trustees are required to carry out an actuarial valuation every three years. The result of this valuation determines the level
of contributions payable by the Group. The last actuarial full valuation was performed by the Scheme actuary for the Trustees as
at 31 March 2017. This valuation revealed a funding shortfall of £11.2m. The recovery plan shows annual employer contributions
of £2.5m per annum for three years and two months from 1 January 2019. The next triennial actuarial valuation will be as at
31 March 2020, at which point the recovery plan will be reassessed.
The Scheme was closed to future accrual on 31 August 2016.
An actuarial valuation was carried out for IAS 19 purposes as at 31 December 2018 by a qualified independent actuary.
United Newspapers Executive Pension Scheme (UNEPS)
The Trustees are required to carry out an actuarial valuation every three years. The result of this valuation determines the level
of contributions payable by the Group. The last actuarial full valuation was performed by the Scheme actuary for the Trustees as
at 5 April 2017. This valuation revealed a funding surplus of £4.7m and no recovery plan was required. The next triennial actuarial
valuation is due as at 5 April 2020.
The Scheme now has only members who are pensioners in payment.
An actuarial valuation was carried out for IAS 19 purposes as at 31 December 2018 by a qualified independent actuary.
Penton Media, Inc. Retirement Plan
Actuarial valuations are undertaken every year, with the result determining the level of contributions payable by the Group. The last
actuarial valuation of the Scheme was performed by the Scheme actuary as at 31 December 2018. The Group’s contribution over the
year was £1.3m (2017: £nil). The employer expects to pay contributions during the accounting year beginning 1 January 2019 of £0.7m,
with contributions for future years dependent on the level of deficits arising from future valuations. The weighted average duration
of pension scheme liabilities was 14 years at 31 December 2018.
Penton Media, Inc. Supplemental Executive Retirement Plan
Actuarial valuations are undertaken every year, with the result determining the level of contributions payable by the Group. The last
actuarial valuation of the Scheme was performed by the Scheme actuary as at 31 December 2018. The employer expects to pay £nil
contributions to the Scheme during the accounting year beginning 1 January 2019.
The sensitivities regarding the principal assumptions used to measure the IAS 19 pension scheme liabilities are set out below:
Sensitivity analysis at 31 December 2018
Impact on scheme liabilities: Increase
Discount rate – decrease by 0.1%
Rate of price inflation pre-retirement – increase by 0.25%
Life expectancy – increase by 1 year
Informa
£m
1.8
4.1
2.8
Taylor &
Francis
£m
0.4
0.9
0.8
UBMPS
£m
6.9
16.6
21.9
UNEPS
£m
Penton
£m
0.1
0.3
1.5
0.4
n/a
0.7
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 31 December 2018 continued
34. Retirement benefit schemes continued
(e) Defined benefit schemes – individual defined benefit scheme details
Amounts recognised in respect of these defined benefit schemes are as follows:
Recognised in profit before tax
Past service curtailment gain on closure of the UBM US Scheme
Past service cost associated with GMP equalisation1
Interest cost on net pension deficit
Total cost
2018
£m
(0.8)
4.5
1.1
4.8
2017
£m
–
–
1.1
1.1
1.
Guaranteed Minimum Pension (GM) equalisation relates to the 26 October 2018 High Court judgement requiring Trustees to equalise for the unequal effect
of GMPs for members earning GMPs between 17 May 1990 and 5 April 1997. This requires that compensation is to be paid on a basis that is no more or less
favourable regardless of gender.
Recognised in the Consolidated Statement of Comprehensive Income
Return on Scheme assets
Experience (loss)/gain
Change in demographic actuarial assumptions
Change in financial actuarial assumptions
Effect of movement in foreign currencies
Actuarial gain/(loss)
Movement in net deficit during the year
Net deficit in schemes at beginning of the year
New schemes associated with the UBM plc acquisition
Net finance cost
Past service cost from curtailment gain on closure of UBM US Scheme
Past service cost associated with GMP equalisation1
Actuarial (loss)/gain
Other payments to/(from) Schemes
Effect of movement in foreign currencies
Net deficit in Schemes at end of the year before irrecoverable tax
Irrecoverable tax associated with UBM acquisition1
Movement in irrecoverable element of pension surplus1
Irrecoverable tax1
Net deficit in Schemes at end of the year after irrecoverable tax
2018
£m
(30.6)
2.1
0.7
13.7
(0.2)
(14.3)
2018
£m
(23.6)
8.3
(1.1)
0.8
(4.5)
(14.3)
4.4
(0.5)
(30.5)
(3.2)
0.7
(2.5)
(33.0)
2017
£m
11.1
3.4
(0.9)
0.9
(0.3)
14.2
2017
£m
(38.0)
–
(1.1)
–
–
14.2
(0.4)
1.7
(23.6)
–
–
–
(23.6)
1.
Under IFRIC 14, any surplus on the UK Schemes ultimately to be paid to the Company by the Trustees would be subject to a 35% tax charge prior to being
repaid. New Schemes include £3.2m of irrecoverable element of pension surplus at the acquisition date.
208
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INFORMA PLC ANNUAL REPORT 2018
The amounts recognised in the Consolidated Balance Sheet in respect of the Group Schemes are as follows:
Present value of defined benefit obligations
Fair value of Scheme assets
Irrecoverable element of pension surplus1
Net deficit
Reported as:
Retirement benefit surplus recognised in the Consolidated Balance Sheet
Deficit in Scheme and liability recognised in the Consolidated Balance Sheet
Net deficit
1. The UBM UNEPS Scheme was in surplus at 31 December 2018 and the irrecoverable element of pension surplus was £2.5m.
Changes in the present value of defined benefit obligations are as follows:
Opening present value of defined benefit obligation
New Schemes from UBM plc acquisition
Service cost associated with curtailment gain on closure of UBM US scheme
Past service cost associated with GMP equalisation
Interest cost
Benefits paid
Actuarial gain
Effect of movement in foreign currencies
Closing present value of defined benefit obligation
Changes in the fair value of scheme assets are as follows:
Opening fair value of Scheme assets
New schemes from UBM plc acquisition1
Return on Scheme assets
Actuarial (loss)/gain
Benefits paid
Contributions from the employer to the Schemes
Other payments made from Schemes
Effect of movement in foreign currencies
Closing fair value of Scheme assets
2018
£m
(679.2)
648.7
(2.5)
(33.0)
4.5
(37.5)
(33.0)
2018
£m
(176.3)
(526.7)
0.8
(4.5)
(11.7)
25.0
16.5
(2.3)
2017
£m
(176.3)
152.7
–
(23.6)
–
(23.6)
(23.6)
2017
£m
(184.4)
–
–
–
(5.1)
5.4
3.4
4.4
(679.2)
(176.3)
2018
£m
152.7
535.0
10.6
(30.6)
(25.0)
4.4
–
1.6
2017
£m
146.4
–
4.0
10.8
(5.4)
–
(0.4)
(2.7)
648.7
152.7
1. New Schemes’ assets from the UBM plc acquisition are stated before the irrecoverable element amount of the surplus of £3.2m.
The assets of the Taylor & Francis Group Pension and Life Assurance Scheme include assets held in managed funds and cash funds
operated by Legal & General Assurance (Pensions Management) Limited, Zurich Assurance Limited, Partners Group AG, BlackRock
Investment Management (UK) Limited, Standard Life Investments and Insight Investment Management Limited.
The assets of the Informa Final Salary Scheme include assets held in managed funds and cash funds operated by BlackRock
Investment Management (UK) Limited, Partners Group AG, Zurich Assurance Limited, Standard Life Investments and Insight
Investment Management Limited.
209
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report
Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 31 December 2018 continued
34. Retirement benefit schemes continued
The assets of the UBM Pension Scheme include assets held in equities, absolute return bonds and bespoke Liability Driven
Investment funds with Legal & General, diversified growth funds with Newton and Schroders, long-lease property with Aviva
and M&G and an illiquid credit fund with M&G.
The assets of the United Newspapers Executive Pension Scheme include assets held in absolute return bonds and index-linked gilt
funds with Legal & General.
The assets of the Penton Media, Inc. Retirement Plan and the Penton Media, Inc. Supplemental Executive Retirement Plan Schemes
include assets held in managed funds and cash funds operated by New York Life Insurance Company, BlackRock Institutional Trust
Company NA, Invesco Asset Management Limited and others.
The fair values of the assets held are as follows:
31 December 2018
Equities
Bonds
Property
Diversified Growth Fund
Illiquid credit funds
Absolute Return Bond Fund
Bespoke funds (Liability Driven Investment)
Annuity contracts
Cash
Total
31 December 2017
Equities
Bonds
Property
Diversified Growth Fund
Other
Cash
Total
Informa
£m
38.8
4.4
9.1
11.7
–
–
5.7
–
20.2
89.9
Taylor &
Francis
£m
10.3
1.2
3.7
3.5
–
–
2.0
–
5.4
26.1
UBMPS
£m
135.1
–
52.6
109.3
50.1
52.2
72.4
5.9
2.1
UNEPS
£m
–
21.0
–
–
–
1.8
–
–
–
479.7
22.8
Informa
£m
42.6
6.7
8.4
23.8
11.4
1.3
94.2
Taylor &
Francis
£m
11.2
1.9
3.3
7.1
3.8
0.3
27.6
Penton
£m
11.8
11.3
4.3
–
–
–
–
–
2.8
30.2
Penton
£m
21.8
1.1
–
–
7.9
0.1
30.9
Total
£m
196.0
37.9
69.7
124.5
50.1
54.0
80.1
5.9
30.5
648.7
Total
£m
75.6
9.7
11.7
30.9
23.1
1.7
152.7
All the assets listed above have a quoted market price in an active market. The Group Schemes’ assets do not include any of the
Group’s own financial instruments, nor any property occupied by, or other assets used by, the Group.
210
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INFORMA PLC ANNUAL REPORT 2018 35. Share capital and share premium
Share capital
Share capital as at 31 December 2018 amounted to £1.3m (2017: £0.8m). For details of options issued over the Company’s shares see
Note 10.
Issued and fully paid
1,251,798,534 (2017: 824,005,051) Ordinary Shares of 0.1p each
At 1 January
Issue of new shares in relation to consideration for the acquisition of UBM plc
Other issue of shares
At 31 December
Share premium
At 1 January and 31 December
2018
£m
1.3
2017
£m
0.8
2018
Number of
shares
2017
Number of
shares
824,005,051
824,005,051
427,536,794
256,689
–
–
1,251,798,534 824,005,051
2018
£m
905.3
2017
£m
905.3
36. Other reserves
This note provides further explanation for the “Other reserves” listed in the Consolidated Statement of Changes in Equity.
At 1 January 2017
Share award expense
Own shares purchased
Transfer of vested LTIPs
Adjustment to non-controlling interest arising from put option
Non-controlling interest adjustment arising from disposal
At 1 January 2018
Fair value loss on derivative
Issue of new shares in relation to consideration for acquisition of UBM plc
Other issue of shares associated with settlement of UBM SAYE awards
Share award expense
Own shares purchased
Transfer of vested LTIPs
Non-controlling interest adjustment arising from disposal
At 31 December 2018
Reserves for
shares to be
issued
£m
6.5
5.4
–
(2.1)
–
–
9.8
–
–
–
8.1
–
(3.9)
–
14.0
Merger
reserve
£m
578.6
Other
reserve
£m
(2,154.3)
–
–
–
–
–
–
–
–
0.1
(0.4)
Employee
Share Trust
and
ShareMatch
shares
£m
(1.6)
–
(0.9)
–
–
–
Total
£m
(1,570.8)
5.4
(0.9)
(2.1)
0.1
(0.4)
578.6
(2,154.6)
(2.5)
(1,568.7)
–
3,544.6
2.2
–
–
–
–
–
–
–
–
–
–
(4.3)
–
–
–
–
(3.5)
–
–
–
3,544.6
2.2
8.1
(3.5)
(3.9)
(4.3)
4,125.4
(2,158.9)
(6.0)
1,974.5
Reserve for shares to be issued
This reserve relates to LTIPs granted to colleagues reduced by the transferred and vested awards. Further information is set out
in Note 10.
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211
INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report
Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 31 December 2018 continued
36. Other reserves continued
Merger reserve
The merger reserve was created in 2004 when the merger of Informa PLC and Taylor & Francis Group plc resulted in a merger
reserve amount of £496.4m being recorded. On 2 November 2016, the Group acquired Penton Information Services and the £82.2m
share premium on the shares issued to the vendors was recorded as an increase in the merger reserve in accordance with the merger
relief rules of the Companies Act 2006. There were 427,536,794 shares issued on 18 June 2018 in connection with the acquisition of
UBM plc, which at the acquisition date closing share price of £8.29 resulted in an increase in the merger reserve of £3,544.6m. From
19 July 2018 to 13 December 2018 there were 256,689 shares issued in connection with the satisfaction of SAYE awards in the UBM
business and resulted in an increase in the merger reserve of £2.2m.
Other reserve
The other reserve includes the inversion accounting reserve of £2,189.9m which was created from an issue of shares under a Scheme
of Arrangement in May 2014.
Employee Share Trust and ShareMatch shares
As at 31 December 2018, the Informa Employee Share Trust (EST) held 564,091 (2017: 388,118) Ordinary Shares in the Company
at a market value of £3.6m (2017: £2.8m). As at 31 December 2018, the ShareMatch scheme held 411,812 (2017: 273,560) matching
Ordinary Shares in the Company at a market value of £2.6m (2017: £2.0m). At 31 December 2018 the Group held 0.1% (2017: 0.1%)
of its own called up share capital.
37. Non-controlling interests
The Group has subsidiary undertakings where there are non-controlling interests. At 31 December 2018, these non-controlling interests
were composed entirely of equity interests and represented the following holding of minority shares by non-controlling interests:
• Brazil Design Show (45%, 2017: 45%)
• Chengdu Wiener Meibo Exhibitions Co., Ltd (40%, 2017: 40%)
• Shanghai Yingye Exhibitions Co., Ltd (40%, 2017: 40%)
• Agra CEAS Consulting Limited (18.2%, 2017: 18.2%)
• Bureau Européen de Recherches SA (18.2%, 2017: 18.2%)
• Shanghai Baiwen Exhibitions Co., Ltd (15%, 2017: 15%)
• Shanghai Meisheng Culture Broadcasting Co., Ltd (15%, 2017: 15%)
•
Informa Tianyi Exhibitions (Chengdu) Co., Ltd (40%, 2017: 0%)
• Guangzhou Informa Yi Fan Exhibitions Co., Ltd (40%, 2017: 0%)
• Monaco Yacht Show S.A.M. (10%, 2017: 10%)
• Yachting Promotions, Inc. (10%, 2017: 10%)
• APLF Ltd (40%)
• UBM BN Co. Ltd (formerly Boannews co. (40%)
• China International Exhibitions Limited (30%)
• Shanghai Expobuild International Exhibition Co., Ltd (30%)
• Shanghai UBM Showstar Exhibitions Co., Ltd (30%)
• Shanghai UBM Sinoexpo International Exhibitions Co., Ltd (30%)
• UBMMG Holdings Sdn Bhd (4.1%)
• UBM Creativity Exhibition (Shenzhen) Company Ltd (35%)
• UBM Sinoexpo Holdings Ltd (30%)
• UBM Sinoexpo Ltd (30%)
• UBM Trust Company Ltd (30%)
• Shenzhen Herong Exhibition Company Limited (30%)
• United Business Media (M) Sdn Bhd (4.1%)
• UBM Exhibitions Ltd (4.1%)
• UBM Asia (Thailand) Co., Ltd (4.1%)
• DSA (Malaysia) (4.1%)
• Singapore Exhibition Services Ltd (4.1%)
• Sea Asia Singapore (13.7%)
• Seatrade Communications Singapore (4.1%)
• Myanmar Trade Fair Management (4.1%)
• SES Vietnam Exhibitions (4.1%)
• Malaysian Exhibitions Services (4.1%)
•
• Eco Exhibitions (4.1%)
• Bangkok Exhibition Services (4.1%)
• PT UBM Pamerindo Niaga Indonesia (35.7%)
• UBM Exhibitions Philippines (4.1%)
• Trade Link ITE (4.1%)
• Premier ITE (4.1%)
• ECMI ITE ASIA Sdn Bhd (4.1%)
• Navalshore Organizacao De Eventos Ltda (40%)
• UBM Mexico Exposiciones, S.A.P.I. (20%)
• Sea Asia Singapore Pte Limited (10%)
International Expo Management (4.1%)
212
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INFORMA PLC ANNUAL REPORT 2018 38. Operating lease arrangements
Minimum lease payments under operating leases recognised in Consolidated Income Statement for the year
2018
£m
36.0
2017
£m
27.8
At the reporting date, the Group had outstanding commitments for total future minimum lease payments under non-cancellable
operating leases, which fall due as follows:
Within one year
Within two to five years
After five years
2018
Land and
buildings
£m
47.3
132.1
130.1
309.5
Other
£m
1.0
1.1
–
2.1
2017
Land and
buildings
£m
27.6
71.7
30.7
130.0
Other
£m
0.7
1.3
–
2.0
Operating lease payments on land and buildings represent rentals payable by the Group for certain properties.
39. Related party transactions
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and
are not disclosed in this note. The transactions between the Group and its joint ventures and associates are disclosed below.
The following transactions and arrangements are those which are considered to have had a material effect on the financial
performance and position of the Group for the year.
Transactions with Directors
There were no material transactions with Directors of the Company during the year, except for those relating to remuneration
and shareholdings. For the purposes of IAS 24 Related Party Disclosures, Executives below the level of the Company’s Board are
not regarded as related parties.
During the period, the Group incurred expenses of £2.7m (2017: £2.2m) and generated revenue of £3.2m relating to Microsoft UK.
One of the Group’s Non-Executive Directors is the Chief Executive Officer of this organisation.
Further information about the remuneration of individual Directors is provided in the audited part of the Remuneration Report
on pages 113 to 125 and Note 9.
Other related party disclosures
At 31 December 2018, Informa Group companies have guaranteed the pension scheme liabilities of the Taylor & Francis Group
Pension and Life Assurance Scheme, the Informa Final Salary Scheme and the UBM Pension Scheme.
Transactions with related parties are made at arm’s length. Outstanding balances at year end are unsecured and settlement occurs
in cash. There are no bad debt provisions for related party balances as at 31 December 2018, and no debts due from related parties
have been written off during the year. During the period, Informa entered into related party transactions to the value of £0.2m
(2017: £0.2m) with a balance of £0.06m (2017: £0.07m) outstanding at 31 December 2018.
11_Informa_AR18_FINANCIAL STATEMENTS.indd 213
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report
Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 31 December 2018 continued
40. Subsidiaries
The listing below shows the subsidiary undertakings as at
31 December 2018.
Company name
Country
Academic Publishing
Informa Limited
Hong Kong
Taylor & Francis Books India
Pvt Limited
India
Colwiz Limited
Dove Medical Press (Z)
Limited
Informa Healthcare AS
Colwiz Pakistan (Private)
Limited
Taylor & Francis (S) Pte
Limited
Co-Action Publishing AB
Taylor & Francis AB
Afterhurst Limited
Cogent OA Limited
Colwiz UK Limited
Dove Medical Press Limited
H. Karnac (Books) Ltd
Karnac Books Ltd
Psychology Press New Co.,
Limited
Routledge Books Limited
Taylor & Francis Books
Limited
Taylor & Francis Group
Limited
Ireland
New Zealand
Norway
Pakistan
Singapore
Sweden
Sweden
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
Taylor & Francis Group, LLC
United States
Taylor & Francis Limited
Taylor & Francis Publishing
Services Limited
Business Intelligence
Datamonitor Pty Limited
Ovum Pty Limited
Agra CEAS Consulting –
Bureau Européen de
Recherches S.A.
Informa Economics FNP
Consultoria Ltda
United
Kingdom
United
Kingdom
Australia
Australia
Belgium
Brazil
INet Interactive Canada, Inc.
Canada
F.O. Licht
Zuckerwirtschaflicher Verlag
und Marktforschung GmbH
Germany
Datamonitor Publications
(HK) Limited
Informa Global Markets
(Hong Kong) Limited
Hong Kong
Hong Kong
214
Ordinary
Shares held
Registered
office
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
82%
100%
100%
100%
100%
100%
HK2
IN2
IR1
NZ1
NO1
PK1
SG1
SE1
SE1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
US14
UK1
UK1
AU1
AU1
BE1
BR4
CA3
GE2
HK1
HK1
Company name
Country
Penton Media Asia Limited
Hong Kong
NND Biomedical Data
Systems Private Limited
Informa Global Markets
(Japan) Limited
Informa Global Markets
(Singapore) Private Limited
Marketworks Datamonitor
(Pty) Limited
India
Japan
Singapore
South Africa
Agra Ceas Consulting Limited United
Agra Informa Limited
Datamonitor Limited
Ebenchmarkers Limited
Informa Global Markets
(Europe) Limited
James Dudley International
Limited
Mapa International Limited
MRO Exhibitions Limited
MRO Network Limited
MRO Publications Limited
OTC Publications Limited
Penton Communications
Europe Limited
TU-Automotive Holdings
Limited
TU-Automotive Limited
Informa Telecoms & Media
Limited
Duke Investments, Inc.
Farm Progress Limited
Farm Progress/VX LLC
Icon Advisory Group LLC
Informa Business Intelligence,
Inc.
Informa Business Media
Holdings, Inc.
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United States
United States
United States
United States
United States
United States
Informa Business Media, Inc. United States
Informa DataSources, Inc.
United States
Informa Media, Inc.
Informa Operating Holdings,
Inc.
United States
United States
Internet World Media, Inc.
United States
Ovum, Inc.
Spotlight Financial, Inc.
Skipta, LLC
Trimtabs Investment
Research, Inc.
United States
United States
United States
United States
Ordinary
Shares held
Registered
office
100%
100%
100%
100%
100%
82%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
HK3
IN1
JA1
SG1
ZA1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
US1
US3
US12
US17
US5
US2
US2
US6
US2
US2
US10
US2
US13
US4
US15
11_Informa_AR18_FINANCIAL STATEMENTS.indd 214
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INFORMA PLC ANNUAL REPORT 2018
Ordinary
Shares held
Registered
office
100%
100%
55%
100%
100%
60%
60%
100%
60%
60%
85%
85%
60%
100%
100%
100%
100%
100%
90%
100%
100%
100%
100%
90%
100%
100%
100%
100%
100%
AU2
BM1
BR1
BR2
CA1
CH22
CH8
CH4
CH9
CH1
CH5
CH6
CH7
EG1
FR1
FR1
FR1
MC1
MC1
SA1
SA2
SG1
UAE1
UK1
UK1
UK1
UK1
UK1
UK1
Company name
Country
Global Exhibitions
Informa Fashion Pty Limited
Australia
Informa Middle East Limited
Bermuda
Brasil Design Show – Eventos,
Midias, Consultorias,
Treinamentos e Participações
Ltda
Brazil
BTS Informa Feiras Eventos e
Editora Ltda
Brazil
Informa Canada, Inc.
Guanzhou Citiexpo Jianke
Exhibition Co., Ltd
Guangzhou Informa Yi Fan
Exhibitions Co., Ltd
Informa Exhibitions (Beijing)
Co., Ltd
Informa Tianyi Exhibitions
(Chengdu) Co., Ltd
Informa Wiener Exhibition
(Chengdu) Co., Ltd
Shanghai Baiwen Exhibitions
Co., Ltd
Shanghai Meishing Culture
Broadcasting Co., Ltd
Shanghai Yingye Exhibitions
Co., Ltd
Informa Egypt LLC
Euromedicom SAS
Eurovir SAS
Itec Edition Sarl
Informa Monaco SAM
Monaco Yacht Show SAM
Canada
China
China
China
China
China
China
China
China
Egypt
France
France
France
Monaco
Monaco
Informa Saudi Arabia LLC
Saudi Arabia
Informa Saudi Arabia Limited Saudi Arabia
Informa Exhibitions Pte
Limited
Singapore
Informa Middle East Media FZ
LLC
United Arab
Emirates
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
Design Junction Limited
E-Health Media Limited
IIR Exhibitions Limited
IIR Management Limited
IIR (U.K. Holdings) Limited
Informa Exhibitions Limited
Fort Lauderdale Convention
Services, Inc.
Informa Exhibitions Holding
Corp.
Informa Exhibitions LLC
Informa Exhibitions U.S.
Construction & Real Estate,
Inc.
United States
100%
US16
United States
100%
United States
United States
100%
100%
US7
US7
US8
Company name
Informa Life Sciences
Exhibitions, Inc.
Country
United States
Informa Marine Holdings, Inc. United States
Informa Pop Culture Events,
Inc.
United States
Southern Convention
Services, Inc.
United States
Yachting Promotions, Inc.
United States
Knowledge & Networking
IIR Pty Limited
IBC Conferencesand Event
Management Services
(Shanghai) Co., Ltd.
Australia
China
New AG International Sarl
France
EBD Group GmbH
Informa Holding Germany
GmbH
Germany
Germany
EBD GmbH
Switzerland
Futurum Media Limited
IIR Limited
Light Reading UK Limited
United
Kingdom
United
Kingdom
United
Kingdom
Knect365 US, Inc.
United States
UBM
International Exhibition
Holdings Limited
Arabian Exhibition
Management Limited
CTEE (Centro De
Treinamento e Estudos
em Energia Ltda
Live Healthcare Midia SA
Navalshore Organizacao
de Eventos Limiteda
Sienna Interlink
Comunicacoes Ltda
UBM Brazil Feiras e
Eventos Ltda
China International
Exhibitions Limited
Cosmosprof Shanghai
Exhibitions Limited
Guangdong International
Exhibitions Limited
Bahamas
Bahrain
Brazil
Brazil
Brazil
Brazil
Brazil
China
China
China
Guzhen Lighting Expo Co., Ltd China
Shanghai Expobuild
International Exhibition
Company Limited
Shanghai UBM Showstar
Exhibition Co Limited
Shanghai UBM Sinoexpo
International Exhibitions
Company Limited
Shenzhen UBM Herong
Exhibition Company
China
China
China
China
Ordinary
Shares held
Registered
office
100%
100%
100%
100%
90%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
60%
100%
100%
70&
50%
50%
51%
70%
70%
70%
US6
US16
US6
US16
US16
AU1
CH2
FR1
GE1
GE1
SW1
UK1
UK1
UK1
US11
BH1
BA1
BR5
BR6
BR7
BR8
BR8
CH10
CH11
CH12
CH13
CH14
CH15
CH10
70%
CH16
215
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report
Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 31 December 2018 continued
40. Subsidiaries continued
Company name
UBM China (Beijing) Co.,
Limited
UBM China (Beijing)
Exhibition Company Limited
UBM China (Guangzhou) Co.,
Limited
UBM China (Hangzhou)
Company Limited
UBM China (Shanghai) Co.,
Limited
Country
China
China
China
China
China
UBM Trust Company Limited
China
Stormcliff Limited
UBM Medica Holding
France SNC
UNM Holdings Ireland
CMP Media GmbH
Think Services Game Group
Germany GmbH
UBM Canon Deutschland
GmbH
APLF Limited
Cosmoprof Asia Limited
Hong Kong Exhibition Services
Limited
MAI Brokers (Asia & Pacific)
Limited
Mills & Allen Holdings
(Far East) Limited
UBM Asia Group Limited
UBM Asia Holdings (HK)
Limited
UBM Asia Limited
UBM Asia Partnership
UBM Creativity Exhibition
(Shenzhen) Co., Ltd
UBM SinoExpo Limited
UBM South China
Cyprus
France
Republic of
Ireland
Germany
Germany
Germany
Hong Kong
Hong Kong
Hong Kong
Hong Kong
Hong Kong
Hong Kong
Hong Kong
Hong Kong
Hong Kong
Hong Kong
Hong Kong
Hong Kong
UBM India Private Limited
India
PT Pamerindo Indonesia
PT UBM Pameran Niaga
Indonesia
UNM International
Holdings Limited
UNM Overseas Holdings
Limited
Indonesia
Indonesia
Isle of Man
Isle of Man
Miller Freeman (Israel) Limited Israel
UBM Japan Limited
Miller Freeman Investments I
Limited
Miller Freeman Investments II
Limited
MWFWAHC Investments
Unlimited
Japan
Jersey
Jersey
Jersey
MWFWAHC Investments No.2
Limited
Jersey
UBM (Jersey) Limited
UBM Investments Unlimited
Jersey
Jersey
216
70%
100%
100%
100%
100%
100%
100%
60%
50%
100%
100%
100%
100%
100%
100%
99%
65%
70%
100%
100%
95.9%
64.3%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Ordinary
Shares held
Registered
office
Company name
Country
Ordinary
Shares held
Registered
office
100%
CH17
UBM plc
100%
CH17
100%
CH18
100%
CH19
100%
CH20
UBMI UAE Jersey Limited
United Finance (Jersey)
Unlimited
United Jersey Holdings
Unlimited
CMP Holdings Sarl
CMP Intermediate
Holdings Sarl
Jersey
Jersey
Jersey
Jersey
Luxembourg
Luxembourg
CH21
CY1
FR2
UBM Finance Sarl
Luxembourg
UBM IP Luxembourg Sarl
Luxembourg
United Brazil Holdings Sarl
Luxembourg
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
JE2
JE2
JE2
JE2
LU1
LU1
LU1
LU1
LU1
LU1
LU1
LU1
LU1
LU1
LU1
LU1
MA1
MA1
MA1
MA1
MA2
MA2
MA1
MA1
ME2
MY1
NE3
NE3
NE4
NE3
NE3
NE3
PH2
RI1
RI1
RI1
RI1
GE3
GE4
GE5
HK4
HK5
HK6
HK7
HK7
HK7
HK7
HK7
HK4
HK8
HK7
HK7
IN3
ID1
ID2
IM1
IM1
IS1
JA2
JE2
JE2
JE2
JE2
JE2
JE2
United Commonwealth
Holdings Sarl
United Consumer Media
Holdings Sarl
Luxembourg
Luxembourg
100%
United CP Holdings Sarl
Luxembourg
United News Distribution Sarl Luxembourg
United Professional Media Sarl Luxembourg
UNM Holdings Sarl
Vavasseur International
Holdings Sarl
DSA Exhibition and
Conference SDN BHD
ECMI ITE Asia Sdn Bhd
Eco Exhibitions Sdn Bhd
Malaysian Exhibition
Services Sdn Bhd
Premier ITE Sdn Bhd
Trade Link ITE Sdn Bhd
Luxembourg
Luxembourg
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
UBMMG Holdings Sdn Bhd
Malaysia
United Business Media
(M) Sdn Bhd
UBM Mexico Exposiciones,
S.A.P.I.
Malaysia
Mexico
100%
100%
100%
100%
100%
100%
95.9%
95.9%
95.9%
95.9%
95.9%
95.9%
95.9%
80%
Myanmar
95.9%
Myanmar Trade Fair
Management Company
Limited
Kuben Holding B.V.
UBM Asia BV
UBMi BV
Netherlands
Netherlands
Netherlands
United Pascal France B.V.
Netherlands
United Pascal Holdings B.V.
Netherlands
UPRN 1 SE
UBM Exhibitions
Philippines, Inc.
Chartbay Limited
CX Properties
Donytel Limited
Netherlands
Philippines
Republic of
Ireland
Republic of
Ireland
Republic of
Ireland
100%
100%
100%
100%
100%
100%
95.9%
100%
100%
100%
11_Informa_AR18_FINANCIAL STATEMENTS.indd 216
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INFORMA PLC ANNUAL REPORT 2018 Company name
Garragie Investments
Hickdale Limited
MAI Finance Ireland
MAI Holdings Ireland
Maypond Limited
MFWWnet
Springport Limited
Tanahol Limited
UBM Ireland No 1 Limited
UBM Ireland No 2 Limited
UBM Ireland No 3 Limited
UBM Ireland No 4 Limited
UBM Ireland No 5 Limited
UBM Ireland No 6 Limited
UBM Ireland No 8 Limited
UBM Ireland No 9 Limited
Country
Republic of
Ireland
Republic of
Ireland
Republic of
Ireland
Republic of
Ireland
Republic of
Ireland
Republic of
Ireland
Republic of
Ireland
Republic of
Ireland
Republic of
Ireland
Republic of
Ireland
Republic of
Ireland
Republic of
Ireland
Republic of
Ireland
Republic of
Ireland
Republic of
Ireland
Republic of
Ireland
Ordinary
Shares held
Registered
office
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
RI1
RI1
RI1
RI1
RI1
RI1
RI1
RI1
RI1
RI1
RI1
RI1
RI1
RI1
RI1
RI1
UBM Financial Services Ireland Republic of
100%
RUI1
100%
100%
100%
60%
100%
95.9%
UBM IP Ireland Limited
Ireland
Republic of
Ireland
United Media Finance Ireland Republic of
Ireland
Republic of
Ireland
Republic of
Korea
Republic of
Korea
Singapore
Wenport Limited
UBM BN Co. Ltd
UBM Korea Corporation
International Expo
Management (Pte) Limited
Sea Asia Singapore
Pte Limited
Singapore
86.3%
Seatrade Communications
Singapore Pte Limited
Singapore
Singapore Exhibition Services
(Pte) Limited
Singapore
UBM Exhibition Singapore
Pte Limited
Bangkok Exhibition
Services Ltd
Singapore
Thailand
UBM Asia (Thailand) Co Ltd
Thailand
UBM I C Fuarcilik ve
Organizasyon Ticaret A.Ş.
Turkey
95.9%
95.9%
95.9%
95.9%
95.9%
100%
RI1
RI1
RI1
RK1
RK2
SG2
SG3
SG3
SG4
SG3
TH1
TH2
TU1
Company name
UBM Istanbul Fuarcilik ve
Gosteri Hizmetleri A.Ş.
UBM NTSR Fuar ve Gosten
Hizmetleri A.Ş.
UBM Rotaforte Ullararasi
Fuarcolik
ABI Building Data Limited
Advanstar Communications
(UK) Limited
Airport Strategy and
Marketing Limited
AMA Research Limited
Aztecgem
Bank of Europe
Blessmyth Limited
CMP Information (2004)
Limited
CMP Information Holdings
CMP Maritime Limited
CMP Media (UK) Limited
CMP Media Limited
CMPI Group Limited
CMPI Holdings Limited
Colonygrove Limited
Crosswall Nominees Limited
DIVX Express Limited
Farming Press Limited
Great Tactic Limited
GNC Media Investments
Limited
Green Thinking (Services)
Limited
Hirecorp Limited
Insight Media Limited
Ithaca Media Limited
London On-Water
MAI
MAI Luxembourg (UK)
Limited
Country
Turkey
Turkey
Turkey
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
Ordinary
Shares held
Registered
office
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
TU2
TU3
TU4
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
217
11_Informa_AR18_FINANCIAL STATEMENTS.indd 217
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 31 December 2018 continued
40. Subsidiaries continued
Company name
MAI Luxembourg SE
Miller Freeman Worldwide
Limited
Morgan Grampian
(Farming Press) Limited
Country
United
Kingdom
United
Kingdom
United
Kingdom
Nexgrove Investments Limited United
OES Exhibitions Limited
Research Solutions for
Airports Limited
Roamingtarget Limited
Safefine Limited
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
Seatrade Communications Ltd United
Smarter Shows (Power)
Europe Holdings Limited
Smarter Shows (Power)
Holdings Limited
Smarter Shows (Power)
Europe Limited
Smarter Shows (Power)
Limited
Syndicate Nine Limited
The Builder Group Limited
Turtle Diary Limited
UAP Admin No.6 Limited
UBM (GP) No 1 Limited
UBM (GP) No 2 Limited
UBM (GP) No 3 Limited
UBM (UK) Limited
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
UBM Aviation Routes Limited United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
UBM Aviation Worldwide
Limited
UBM Canon Europe Limited
UBM Canon UK Holdings
Limited
UBM Canon UK Limited
UBM Holdings Limited
UBM International
Holdings SE
UBM Property Limited
UBM Property Services
Limited
218
Ordinary
Shares held
Registered
office
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
Company name
UBM Shared Services
Limited
UBM TrUnited
Statestees Limited
UBM Worldwide Group
Limited
UBMA Holdings Limited
UBM Holdings Limited
UBM Limited
United Advertising
Publications Limited
United Consumer
Magazines Limited
United Consumer Media SE
United Executive
Trustees Limited
United Finance Limited
United Newspapers
Publications Limited
United Trustees Limited
UNM Investments Limited
Vavasseur Overseas
Holdings Limited
WCN 2 Limited
Workyard Limited
Country
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
Advanstar Communications Inc United States
Canon Communications
(France) Inc.
United States
CBI Research Inc.
United States
CMP Childcare Center, Inc.
United States
ENK International LLC
Healthcare Holdings, Inc
Ludgate USA LLC
Miller Freeman Acquisition
Corp
Rocket Holdings, Inc
Roast LLC
Spectrum ABM Corp
The Verecom Group, Inc
UBM Canon LLC
UBM Delaware LLC
UBM Finance Inc
UBM Holdings, Inc
UBM Investments Inc
UBM LLC
UBM Medica Group LLC
UBM UK LLC
UBMi Princeton LLC
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
Ordinary
Shares held
Registered
office
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
US17
US18
US19
US21
US18
US18
US18
US20
US18
US20
US17
US20
US17
US20
US20
US18
US20
US20
US18
US18
US18
11_Informa_AR18_FINANCIAL STATEMENTS.indd 218
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INFORMA PLC ANNUAL REPORT 2018 Company name
Country
Ordinary
Shares held
Registered
office
Company name
United States
100%
US20
Informa UK Limited
Country
United
Kingdom
Informa US Holdings Limited United
LLP Limited
Informa Academic and
Business, LLC
Kingdom
United
Kingdom
United States
Informa Export, Inc.
United States
Informa Global Sales, Inc.
United States
Informa Support Services, Inc. United States
Informa USA, Inc.
United States
Ordinary
Shares held
Registered
office
100%
100%
100%
100%
100%
100%
100%
100%
UK1
UK1
UK1
UK1
US6
US6
US6
US9
* Name changed from Informa Group Plc to Informa Group Ltd in 2018.
United Business Media
Community Connection
Foundation
United Delaware
Investments Limited
United States
100%
UK1
SES Vietnam Exhibition Services
Company Limited
Vietnam
Wenport Limited
Workyard Limited
Republic of
Ireland
United
Kingdom
Group
Informa Australia Pty Limited Australia
Informa Holdings (Australia)
Pty Limited
Australia
Informa Enterprise
Management
(Shanghai) Co., Ltd.
China
Informa European Financial
Shared Service Centre GmbH
Germany
Informa Switzerland Limited
Jersey
IIR South Africa B.V.
Informa Europe B.V.
Lesbistes B.V.
Informa Finance B.V.
Netherlands
Netherlands
Netherlands
Netherlands
IBC Asia (S) Pte Limited
Singapore
IIR Espana S.L.
Informa Finance GmbH
Informa IP GmbH
IBC (Ten) Limited
IBC (Twelve) Limited
IBC Fourteen Limited
Informa Final Salary Pension
Trustee Company Limited
Informa Finance UK Limited
Spain
Switzerland
Switzerland
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
Informa Finance USA Limited United
Informa Group Holdings
Limited
*Informa Group Ltd
Informa Holdings Limited
Informa Investment Plan
Trustees Limited
Informa Overseas
Investments Limited
Informa Quest Limited
Informa Six Limited
Informa Three Limited
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
United
Kingdom
95.9%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
VI1
RI1
UK1
AU1
AU1
CH3
GE1
JE1
NE1
NE2
NE2
NE2
SG1
ES1
SW1
SW1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
UK1
11_Informa_AR18_FINANCIAL STATEMENTS.indd 219
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219
INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report
Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 31 December 2018 continued
Company registered office addresses
UK
UK1
5 Howick Place, London, SW1P 1WG, United Kingdom
The Americas
US1
US2
US3
US4
US5
US6
US7
US8
US9
748 Whalers Way, Building E., Fort Collins, CO 80525, USA
1166 Avenue of the Americas, 10th Floor, New York, NY 10036, USA
255 38th Avenue, Suite P, Saint Charles, IL 60174-5410, USA
8N. Queen Street, Suite 800, Lancaster, PA 17603, USA
52 Vanderbilt Avenue, 11th Floor, New York, NY 10017, USA
101 Paramount Drive, Suite 100, Sarasota, FL 34232, USA
2020 N. Central Avenue, Suite 400, Phoenix, AZ 85004, USA
6191 N. State Highway, Suite 500, Irving, TX 75038, USA
One Research Drive, Westborough, MA 01581, USA
US10
1100 Superior Avenue, 8th Floor, Cleveland, OH 44114-2518, USA
US11
US12
US13
US14
US15
US16
US17
US18
US19
708 Third Avenue, 4th Floor, New York, NY 10017, USA
4580 Scott Trail, Suite 100, Eagan, MN 55122, USA
2225 SE 60th Avenue, Portland, OR 97215, USA
6000 NW Broken Sound Parkway, Suite 300, Boca Raton, FL 33487, USA
1 Harbour Drive, Suite 211, Sausalito, CA 94965, USA
1115 NE 9th Avenue, Fort Lauderdale, FL 33304, USA
2901 28th Street, Suite 100, Santa Monica, CA 90405, USA
2 Penn Plaza, 15th Floor, NY 10121, New York, USA
70 Blanchard Road, Suite 301, Burlington, MA 01803, USA
US20
1983 Marcus Avenue Suite 250, Lake Success NY 11042, USA
US21
600 Community Drive, Manhasset, NY 11030, USA
BH1 M B & H Corporate Services Limited, Mareva House, 4 George Street,
Nassau, Bahamas
BM1
BR1
BR2
BR3
BR4
BR5
BR6
BR7
BR8
CA1
CA2
CA3
ME1
Canon’s Court, 22 Victoria Street, Hamilton, Bermuda
Rue Bela Cintra 967, 11th Floor, Suite 112-C, Consolação, São Paulo
01415-003, Brazil
Rue Bela Cintra 967, 11th Floor, Suite 112-A, Consolação, São Paulo
01415-003, Brazil
Rue Bela Cintra 967, 11th Floor, Suite 111, Consolação, São Paulo
01415-003, Brazil
Rue Bela Cintra 967, 11th Floor, Suite 112-B, Consolação, São Paulo
01415-003, Brazil
Av Evandro Lins E Silva, 840, Sala 1206/1207/1209a1211, 22631-470,
Rio de Janiero, Brazil
Rua Olimpiadas, São Paulo (Vila Olimpia) – 04551-000, Brazil
Centro de Apolo II, Alphaville, Santana de Parnaiba, São Paulo,
06541-060, Brazil
Alameda Tocatins, 75, Sala 1402, Edificio West Gate, Alphaville,
Barueri, CEP 06455-020, São Paulo, Brazil
112th Floor, 20 Eglinton Avenue West, Yonge Eglinton Centre, Toronto,
ON M4R 1K8, Canada
c/o McMillan LLP, Brookfield Place, 181 Bay Street, Suite 4400, Toronto,
Ontario M5J 2T3, Canada
c/o McMillan LLP, 1500 Royal Centre, 1055 West Georgia Street,
Vancouver BCV6E 4N7, Canada
Cintermex, Primer Nivel, Local 45, Av. Parque Fundidora, 501, Col.
Obrera, Monterrey 64010, Mexico
ME2
Av. Benjamin Franklin 235-4, DF06100, Mexico
China & Asia
Building 1, Road 22, Block 414, Al-Daih, Po Box 20200, Jidhafs, Bahrain
No. 6 & 7, Fl 10, Block 1, No. 19, Section 4, South Renmin Road, Wuhou
District, Chengdu, China
BA1
CH1
220
CH2
CH3
CH4
CH5
CH6
CH7
CH8
CH9
Room 2072, 2nd Floor, 124 Building, No. 960 Zong Xing Road, Jian’an
District, Shanghai, China
Room 2201, Hong Kong New Tower, No. 300 Huai Hai Middle Road,
Huang Pu District, Shanghai, China
Room 802, 8th Floor, No. 87, Building No. 4, Worker’s Stadium North
Road, Chaoyang District, Beijing 100027, China
Room 1010, 10F, No. 93 Nanjing West Road, Jian’an District, Shanghai,
China
Room 101-75, No. 15 Jia, No.152 Alley, Yanchang Road, Zhabei District,
Shanghai, China
Room 234, 2nd Floor, M Zone, 1st Building, No. 3398, Hu Qing Ping
Road, Zhao Xiang Town, Qing Pu District, Shanghai, China
Room 1103-1104, No. 996, East Xingang, Haizhu, Distrct, Guangzhou
No. 1, 2, 3, Fl 10, Block 1, No. 19, Section 4, South Renmin Road, Wuhou
District, Chengdu, China
CH10
Floor 7/8, Urban Development International Tower, No. 355 Hong Qiao
Road, XU Hui District, Shanghai 200030, China
CH11
10/F Xian Dai Mansion, 218 Xiangyang Road, Shanghai 200031, China
CH12
CH13
Room 405 Parkview Square, 960 Jie Fang Bei Road, Guangzhou
510040, China
2F, Guzhen Convention & Exhibition Center, Zhongshan, Guangdong,
China
CH14
Room 1019, 39 Weigaojiao, Shanghai, China
CH15
CH16
9/F Ciro’s Plaza, 388 West Nanjing Road, Huangpu District, Shanghai
200003, China
Room 607, East Block, Coastal Building, Haide 3rd Road, Nanshan
District, Shenzhen, Guangdong 518054, China
CH17 Unit 01-02, 12/F, Tower A, Park View Green, 9 Dongdaqiao Road,
Chaoyang District, Beijing 100020, China
CH18
CH19
Room 1159-1164, China Hotel Office Tower, Liu Hua Road, Guangzhou,
China
Room 129, Floor 1, Building 1, No. 108 Kangqiao Road, Gongshu
District, Hangzhou, China
CH20 Room 207, No.453 Fahuazhen Road, Shanghai, China
CH21 Room 1806-1807, Fu Li Tian He Business Mansion, No. 4, Hua Ting
Road, Lin He Dong Road, Guangzhou 510610, China
CH22 Room 902, No. 996, East Xingang Road, Haizhu District, Guangzhou,
China
HK1
HK2
HK3
HK4
HK5
HK6
HK7
HK8
ID1
ID2
IN1
IN2
IN3
Suite 1106-8, 11/F Tai Yau Building, No 181 Johnston Road, Wanchai,
Hong Kong
Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong
Level 15 Langham Place, 8 Argyle Street, Mong Kok, Kowloon,
Hong Kong
Room 812, Silvercord, Tower 1, 30 Canton Road, Tsimshatsui, Kowloon,
Hong Kong
17/F China Resources Building, 26 Harbour Road, Wanchai, Hong Kong
Unit 1203, 12/F Harcourt House, 39 Gloucester Road, Wanchai,
Hong Kong
Room 812, Silvercord, Tower 1, 30 Canton Road, Tsimshatsui Kowloon,
Hong Kong
Unit 201, Building A, No. 1 Qianwan Road One, Qianhai Shenzhen &
Hong Kong Cooperation Zone, Shenzhen, China
Menara Utara Gedung Menara Jamsotek Lt. 12 unit TA 12-04 JI Jend.
Gabot Subroto No. 38, Jakarta, Indonesia
Jalan Sultan Iskandar Muda, No 7 Arteri Pondok Indah,
Kebayoran Lama, Jakarta Selantan, 12240, Indonesia
2nd & 3rd Floor, The National Council of YMCAs of India,
1 Jai Singh Road, New Delhi 110001, Delhi, India
Flat No. 104, Dhanunjaya Residence, Plot No. 143, Kalyan Nagar III,
Hyderabad, Andhra Pradesh 500018, India
Unit No. 1&2, Times Square, Andheri Kurla Road, Marol, Andheri East,
400 059, Mumbai, India
11_Informa_AR18_FINANCIAL STATEMENTS.indd 220
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INFORMA PLC ANNUAL REPORT 2018 JA1
JA2
MA1
MA2
MY1
PH1
PH2
PK1
RK1
RK2
SG1
SG2
SG3
SG4
TH1
TH2
VI1
5F Iwanami Hitotsubashi Building, 2-5-5 Hitotsubashi, Chiyoda-Ku,
Tokyo 101-003, Japan
Kanda 91 Building, 1-8-3 Kajicho, Chiyoda-ku, Tokyo, 101-0044, Japan
Unit 30-01, Level 30, Tower A, Vertical Business Suite, Avenue 3,
Bangsar South, No 8, Jalan Kerinchi 59200 Kuala Lumpur, Malaysia
B-13-15, Level 13, Menara Prima Tower B, Jalan PJU 1/39, 47301
Petaling Jaya, Selangor Darul Ehsan, Malaysia
Apartment 203/204, Residence G, 12 A Kokkine Yeik Tha Street,
Shwe Taung Gyar, Bahan Township, Yangon 11041 Myanmar
Unit 1003, Autel 2000 Corporate Centre, Valero Street Corner,
Herrera Street, Saleedo Village, Makati City, Philippines
Unit 1 Mezzanine Floor Fly Ace Corporate Center, 13 Coral Way
Barangay 76, Pasay City, NCR Fourth District, Philippines
6th Floor, City View, Block-3, Bahadur Yar Jung Co-operative Housing
Society, Shaheed Millat Road, Karachi, Pakistan
8F, Woodo Building, 214 Mangu-ro, Jungnang-gu, Seoul 02121,
Republic of Korea
8F, Woodo Building, 129-3 Sangbong-dong Chungnang-gu, Seoul,
Republic of Korea
111 Somerset Road, #10-05 Tripleone Somerset, 238164, Singapore
10 Kallang Avenue, 09-15, Aperia, 339510, Singapore
10 Hoe Chaing Road, 20-05 Keppel Towers, 089315, Singapore
80 Robinson Road, 02-00, 068898, Singapore
252 SPE Tower, 9th Floor, Phaholyothin Road, Samsennai, Phayathai,
Bangkok, Thailand
428 Ari Hills Building, 18th Floor, Phahonyothin Road, Samsen Nai,
Phaya Thai, Bangkok 10400, Thailand
10th Floor, Ha Phan Building, 17-17A-19, Ton That Tung Street,
District 1, HCMC Vietnam
Australia & New Zealand
AU1
AU2
NZ1
Level 18, 347 Kent Street, Sydney, NSW 2000, Australia
Level 5, 267 Collins Street, Melbourne, VIC 3000, Australia
c/o Hall & Parsons CA Limited, 145 Kitchener Road, Milford, Auckland
0620, New Zealand
Middle East & Africa
EG1
SA1
7H, 263 Street, New Maadi, Cairo, Egypt
Aziziya District Bin, Mahfouz Centre, PO Box 4100, Jeddah 21491,
Saudi Arabia
SA2
UAE1
ZA1
Office 110, Leaders Tower 2 King Fahad Road, PO Box 16743, Riyadh
12333, Saudi Arabia
17th & 18th Floor, Creative Tower, P.O. Box 422, Fujairah, UAE
Broadacres Business Centre, Corner Cedar and 3rd Avenue,
Broadacres Sandton, Gauteng 2021, South Africa
Europe
BE1
CY1
ES1
FR1
FR2
GE1
GE2
GE3
GE4
GE5
IM1
IR1
IS1
JE1
JE2
LU1
MC1
NE1
NE2
NE3
NE4
NO1
RI1
SE1
SW1
TU1
TU2
Rue de Commerce 20/22, B-1000 Brussels, Belgium
2nd Floor, Sotiri Tofini 4, Agios Athanasios, Limassol 4102, Cyprus
C/Azcona, 36 Bajo, 28028 Madrid, Spain
37 avenue de Friedland, 75008, Paris, France
21/23, rue Camille Desmoulins, 92130 Issy les Moulineaux, France
Isartorplatz 4, 80331, Munich, Germany
AM Muhlengraben 22, 23909, Ratzeburg, Germany
Prielmayerstr. 3, c/o Rüter und Partner Steuerberatungsgesellschaft,
80335 Munich, Germany
Kaiser-Wilhelm-Str. 30, 12247, Berlin, Germany
Friedensplatz 13, 53721, Siegburg, Germany
First Names House, Victoria Road, Douglas, Isle of Man, IM2 4DF
70 Sir John Rogerson’s Quay, Dublin 2, Ireland
Silver Building, Suite 112-115, 7 Abba Hillel Street, Ramat Gan 52522,
Israel
22 Grenville Street, St Helier, JE4 8PX, Jersey
44 The Esplanade, St Helier, JE4 9WG Jersey
17 Boulevard Prince Henri, L-1724 Luxembourg
Le Suffren, 7 Rue Suffren-Reymond, 98000, Monaco
Kabelweg 37, 1014 BA, Amsterdam, Netherlands
Schimmelt 32, Kantoor C, 7E Verdieping, 5611 ZX, Eindhoven,
Netherlands
Coengebouw, Kabelweg 37, 1014 BA Amsterdam, Netherlands
De Entree 73, 1101 BH, Toren A, Amsterdam, Netherlands
c/o Wahl-Larson, Advokatfirma AS, Fridtjof Nansens Plass 5, Oslo
0160, Norway
68 Merrion Square, Dublin, Republic of Ireland
Box 3255, 103 65, Stockholm, Sweden
Baarerstrasse 139, 6300 Zug, Switzerland
Rüzgarlıbaçe Mah. Kavak Sok, Smart Plaza B Blok, No: 31/1 Kat:8,
34805 Kavacık-Beykoz, Istanbul, Turkey
Molla Fenari Mah, Bab-i Ali Cad, No:9 K:3-4, Fatih 34120, Istanbul,
Turkey
The proportion of voting power held is the same as the proportion of ownership interest. The Consolidated Financial Statements
incorporate the financial statements of all entities controlled by the Company as at 31 December each year. Refer to Note 2 for
further description of the method used to account for investments in subsidiaries.
41 Contingent liabilities
Consideration for the acquisition of Penton Information Services on 2 November 2016 included deferred consideration payable in
October 2018 for anticipated future tax benefits. The estimated fair value of this consideration of £16.9m ($21.9m) was paid in
October 2018. The final amount payable is under dispute with the seller, as a remaining amount of approximately £13.4m ($17m) is
expected by the seller. No provision has been made for this potential additional amount as the Directors do not consider it probable
that an additional amount is due.
42 Post balance sheet events
On 19 December 2018, the Group agreed the disposal of the Life Sciences media brands portfolio which was previously part of
UBM plc for consideration of just over $100m, with the sale completing on 31 January 2019. As a result, the balance sheet of the
Life Sciences business was shown as held for sale in the Consolidated Balance Sheet as at 31 December 2018.
On 15 February 2019 the Revolving Credit Facility was replaced with a new facility with two tranches: £600m for a 5-year term to
February 2024 and £300m for a 3-year term to February 2022.
221
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Financial Statements
Company Balance Sheet
as at 31 December 2018
Fixed assets
Investment in subsidiary undertakings
Other debtors: amounts falling due after one year
Current assets
Debtors due within one year
Cash at bank and on hand
Creditors: amounts falling due within one year
Net current assets
Creditors: amounts falling due after more than one year
Net assets
Capital and reserves
Share capital
Share premium account
Reserve for shares to be issued
Merger reserve
Employee Share Trust and ShareMatch shares
Capital redemption reserve
Profit and loss account
Equity Shareholders’ funds
(Loss)/profit for the year ended 31 December
Notes
2018
£m
2017
£m
3
4
5
6
7
8
9
9
9
7,861.2
867.8
8,729.0
3,175.1
0.2
3,175.3
(1,572.5)
1,602.8
(2,737.5)
7,594.3
1.3
905.3
12.1
4,501.9
(0.7)
(2.3)
2,176.7
7,594.3
3,664.0
–
3,664.0
2,202.9
0.1
2,203.0
(732.5)
1,470.5
(842.3)
4,292.2
0.8
905.3
8.7
955.1
(0.7)
–
2,423.0
4,292.2
(48.4)
22.6
The financial statements of this Company, registration number 08860726, were approved by the Board of Directors and authorised
for issue on 6 March 2019 and were signed on its behalf by
Stephen A. Carter
Gareth Wright
Group Chief Executive
Group Finance Director
222
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INFORMA PLC ANNUAL REPORT 2018
Company Statement of Changes in Equity
for the year ended 31 December 2018
At 1 January 2017
Share-based payment charge
Profit for the year
Equity dividends
Transfer of vested LTIPs
At 1 January 2018
Issue of share capital
Purchase of own shares
Share-based payment charge
Exercise of share awards
Loss for the year
Equity dividends
Transfer of vested LTIPs
At 31 December 2018
Share capital
£m
0.8
–
–
–
–
0.8
0.5
–
–
–
–
–
–
Share
premium
account
£m
905.3
–
–
–
–
905.3
–
–
–
–
–
–
–
1.3
905.3
Reserve for
shares to be
issued
£m
6.0
4.8
–
–
(2.1)
8.7
–
–
7.3
–
–
–
(3.9)
12.1
Merger
reserve
£m
955.1
–
–
–
–
955.1
3,544.6
–
–
2.2
–
–
–
Employee
Share Trust
shares
£m
Capital
redemption
reserve
£m
Profit and
loss account
£m
Total
£m
(0.7)
–
–
–
–
(0.7)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(2.3)
–
–
–
–
–
2,560.5
4,427.0
–
22.6
(162.2)
2.1
2,423.0
–
–
–
–
(48.4)
(201.8)
3.9
4.8
22.6
(162.2)
–
4,292.2
3,545.1
(2.3)
7.3
2.2
(48.4)
(201.8)
–
4,501.9
(0.7)
(2.3)
2,176.7
7,594.3
11_Informa_AR18_FINANCIAL STATEMENTS.indd 223
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223
INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Financial Statements
Notes to the Company Financial Statements
for the year ended 31 December 2018
1. Corporate information
Informa PLC (the Company) is a company incorporated in the United Kingdom under the Companies Act 2006 and is listed on the
London Stock Exchange. The Company is a public company limited by shares and is registered in England and Wales with registration
number 08860726. The address of the registered office is 5 Howick Place, London, SW1P 1WG.
Principal activity and business review
Informa PLC is the Parent Company of the Informa Group (the Group) and its principal activity is to act as the ultimate holding
company of the Group.
2. Accounting policies
Basis of accounting
The Company meets the definition of a qualifying entity under Financial Reporting Standard 100 (FRS 100) issued by the Financial
Reporting Council. The financial statements have therefore been prepared in accordance with FRS 102 The Financial Reporting
Standard applicable in the UK and Republic of Ireland as issued by the Financial Reporting Council.
The last financial statements under previous UK GAAP were for the year ended 31 December 2014 and the date of transition to
FRS 102 was therefore 1 January 2015. There were no material adjustments recorded for the transition from UK GAAP to FRS 102.
As permitted by FRS 102, the Company has taken advantage of the disclosure exemptions available under that standard in relation
to share-based payments, financial instruments, presentation of a cash flow statement, standards not yet effective and related party
transactions. The Directors’ Report, Corporate Governance Statement and Directors’ Remuneration Report disclosures are on pages
96 to 125 of this report. The financial statements have been prepared on the historical cost basis except for the remeasurement of
the derivative financial instruments which are measured at fair value at the end of each reporting period. The financial statements
have been prepared on the going concern basis as explained in Note 2 to the Consolidated Financial Statements.
There were no critical accounting judgements that would have a significant effect on the amounts recognised in the Company
financial statements or key sources of estimation uncertainty at the balance sheet date that would have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities within the next financial year. The principal accounting policies
adopted are the same as those set out in Note 2 to the Consolidated Financial Statements, with the exception of the merger reserve
accounting treatment arising from the Scheme of Arrangement in 2014. The Company’s financial statements are presented in pounds
sterling being the Company’s functional currency.
Profit and loss account
As permitted by section 408 of the Companies Act 2006, the Company has elected not to present its own profit and loss account
or statement of comprehensive income for the year. The Company’s revenue for the year is £nil (2017: £nil), and loss after tax for
the year is £48.4m (2017: profit after tax £22.6m).
Share-based payment amounts that relate to employees of subsidiary Group companies are recorded as capital contributions
to the relevant Group company.
Investments in subsidiaries and impairment reviews
Investments held as fixed assets are stated at cost less any provision for impairment. Where the recoverable amount of the
investment is less than the carrying amount, an impairment is recognised. Impairment reviews are undertaken at least annually
or more frequently where there is an indication of impairment.
224
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INFORMA PLC ANNUAL REPORT 2018 3. Investments in subsidiary undertakings
Cost
At 1 January
Additions – initial cash consideration relating to UBM plc
Additions – share consideration relating to UBM plc
Additions – other1
At 31 December
2018
£m
3,664.0
643.5
3,545.1
8.6
2017
£m
3,659.6
–
–
4.4
7,861.2
3,664.0
1. Additions – other includes deferred consideration of £2.5m related to UBM plc and £6.1m (2017: £4.4m) related to the fair value of share incentives issued to
employees of subsidiary undertakings during the year.
The listing below shows the direct subsidiary and other subsidiary undertakings as at 31 December 2018 which affected the profit
or net assets of the Company:
Company
Country of registration and operation
Principal activity
Informa Switzerland Limited
England and Wales
Holding company
Informa Global Sales, Inc.
UBM plc
US
UK
Domestic international sales corporation
Holding company
Ordinary
Shares held
100%
100%
100%
Details of subsidiaries controlled by the Company are disclosed in the Consolidated Financial Statements (Note 40).
4. Debtors falling due after one year
Amounts owed from Group undertakings
2018
£m
867.8
2017
£m
–
Amounts owed to Group undertakings falling due after one year are unsecured, interest bearing and repayable on demand. Interest
rates on amounts owed from Group undertakings is 0% (2017: n/a).
5. Debtors falling due within one year
Amounts owed from Group undertakings
Prepayments and accrued income
2018
£m
3,174.9
0.2
3,175.1
2017
£m
2,202.8
0.1
2,202.9
Amounts owed to Group undertakings falling due within one year are unsecured, interest bearing and repayable on demand. Interest
rates on amounts owed from Group undertakings range from 0% to 5.25% (2017: 0% to 4.25%).
6. Creditors: amounts falling due within one year
Term loan
Bank overdraft
Amounts owed to Group undertakings
Other creditors and accruals
Current tax liabilities
2018
£m
156.9
24.0
1,364.5
23.5
3.6
1,572.5
2017
£m
296.3
–
423.8
8.1
4.3
732.5
Amounts owed to Group undertakings falling due within one year are unsecured, interest bearing and repayable on demand. Interest
rates on amounts owed to Group undertakings range from 0% to 5.1% (2017: 0% to 3.75%).
225
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report
Financial Statements
Notes to the Company Financial Statements
for the year ended 31 December 2018 continued
7. Creditors: amounts falling due after one year
Revolving Credit Facility1
Private placement loan notes1
Euro Medium Term Notes1
Derivative financial instruments
Amounts owed to Group undertakings
Other payables
1. Stated net of arrangement fees.
2018
£m
77.6
900.4
877.9
24.1
854.1
3.4
2,737.5
2017
£m
285.6
554.1
–
–
–
2.6
842.3
On 4 January 2018, the Company issued $400.0m of private placement loan notes with maturities of 7 years and 10 years.
On 23 October 2014, the Company entered into a five-year Revolving Credit Facility for an equivalent of £900.0m. In July 2017, this
facility was reduced to £855.0m of which £78.5m was drawn down at 31 December 2018 (2017: £287.6m), and is stated net of £0.9m
(2017: £2.0m) of arrangement fees. The facility matures in October 2020, but on 15 February 2019 the Revolving Credit Facility was
replaced with a new facility with two tranches: £600m for a 5-year term to February 2024 and £300m for a 3-year term to February
2022. Interest is payable at the rate of LIBOR plus a margin based on the ratio of net debt to EBITDA.
The private placement loan notes total £902.3m ($1,150.0m) and are stated net of £1.9m of arrangement fees.
For the purpose of financing the UBM plc acquisition Informa issued Euro Medium Term Notes (EMTNs), which are debt instruments
traded outside of USA and Canada. On 2 July 2018, the bonds were priced with an issue date of 5 July 2018:
• An 8-year fixed term note, until July 2026, of value £300m with a 3.125% coupon rate
• A 5-year fixed term note, until July 2023, of value €650m with a 1.50% coupon rate
8. Share capital
Issued and fully paid
1,251,798,534 (2017: 824,005,051) Ordinary Shares of 0.1p each
At 1 January
Issue of shares in relation to acquisition of UBM plc
Other issue of shares in relation to satisfying UBM SAYE shares
31 December
2018
£m
1.3
2017
£m
0.8
2018
Number of
shares
2017
Number of
shares
824,005,051
824,005,051
427,536,794
256,689
–
–
1,251,798,534
824,005,051
9. Capital and reserves
Share capital
On 30 May 2014, under a Scheme of Arrangement, 603,941,249 Ordinary Shares of 435p each in the Company were allotted to
Shareholders. On 4 June 2014, a capital reduction took place which resulted in a reduction in share capital of £2,626.5m and the
establishment of a distributable reserve of the same amount. This involved the nominal value per share of the issued share capital
of the Company of 603,941,249 shares being reduced from 435p per share to 0.1p per share. During 2014, the Company also issued
45,000,000 Ordinary Shares of 0.1p for consideration of £207.0m.
On 11 October 2016, the Group issued 162,234,656 Ordinary Shares of 0.1p each through a 1-for-4 rights issue to part-fund the Penton
acquisition. The shares were issued at £4.41 each and raised gross proceeds before expenses of £715.5m. On 2 November 2016, the
Group issued 12,829,146 Ordinary Shares to the sellers of the Penton business in part consideration for the sale (Consideration Shares).
Share capital as at 31 December 2016 and 2017 amounted to £0.8m (824,005,051 shares at 0.1p).
226
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INFORMA PLC ANNUAL REPORT 2018
There were 427,536,794 shares issued on 18 June 2018 in connection with the acquisition of UBM plc, which at the acquisition date
closing share price of £8.29 resulted in an increase in share capital of £0.5m. There were also 256,689 shares issued in 2018 to satisfy
UBM SAYE Scheme awards maturing in the post-acquisition period.
Share premium
In 2014, the Company issued 45,000,000 Ordinary Shares of 0.1p with the share premium (net of transaction costs) being £204.0m.
Share premium as at 31 December 2014 and 2015 amounted to £204.0m. On 11 October 2016, the Group issued 162,234,656
Ordinary Shares of 0.1p each through a 1-for-4 rights issue. The shares were issued at £4.41 each and resulted in share premium
(net of transaction costs) of £701.3m. Share premium as at 31 December 2018 and 2017 amounted to £905.3m.
Merger reserve
On 30 May 2014, under a Scheme of Arrangement, the Company subscribed to shares in Informa Switzerland Limited, formerly Old
Informa, a subsidiary undertaking, which were valued at £3,500.0m. This resulted in new share capital of £2,627.1m from the issue
of 603,941,249 shares at a nominal value of 435p and the creation of a merger reserve of £872.9m.
On 2 November 2016, the Group acquired Penton Information Services and the Group issued 12,829,146 Ordinary Shares to the
vendors, with the £82.2m share premium on the shares issued recorded against the merger reserve in accordance with the merger
relief rules of the Companies Act 2006.
The Group acquired UBM plc on 15 June 2018 and issued 427,536,794 shares resulting in an increase in the merger reserve of
£3,544.6m. There were also 256,689 shares issued in 2018 to satisfy UBM SAYE Scheme awards maturing in the post-acquisition
period and there was an increase in the merger reserve of £2.2m in relation to the issue of these shares.
Profit and loss account
On 4 June 2014, a capital reduction took place which resulted in a reduction in share capital of £2,626.5m and the establishment of
a distributable reserve of the same amount. This involved the nominal value per share of the issued share capital of the Company
of 603,941,249 shares being reduced from 435p per share to 0.1p per share.
The distributable reserves of the Company are not materially different to the profit and loss account balance, with distributable
reserves of £2,169.4m at 31 December 2018 (31 December 2017: £2,419.6m).
As at 31 December 2018, the Informa Employee Share Trust (EST) held 564,091 (2017: 388,118) Ordinary Shares in the Company
with a market value of £3.6m (2017: £2.8m). The shares held by the EST have not been allocated to individuals and the remaining
shares have been allocated to individuals in accordance with the Deferred Share Bonus Plan as set out in the Directors’ Remuneration
Report on page 113 to 125. As at 31 December 2018, the ShareMatch Scheme held 411,812 (2017: 273,560) matching Ordinary Shares
in the Company at a market value of £2.6m (2017: £2.0m).
Details of the description of reserves are disclosed in the Consolidated Financial Statements (Note 36).
10. Share-based payments
Details of the share-based payments are disclosed in the Consolidated Financial Statements (Note 10).
11. Dividends
During the year, an interim dividend of £88.2m (2017: £54.8m) and a final dividend for the prior year of £113.6m (2017: £107.4m) were
recognised as distributions by the Company. Details of dividends are disclosed in the Consolidated Financial Statements (Note 14).
12. Related parties
The Directors of Informa PLC had no material transactions with the Company or its subsidiaries during the year other than service
contracts and Directors’ liability insurance. Details of Directors’ remuneration are disclosed in the Remuneration Report. The
Company has taken advantage of the exemption that transactions with wholly owned subsidiaries do not need to be disclosed.
227
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INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Financial Statements
Notes to the Company Financial Statements
for the year ended 31 December 2018 continued
Audit exemption
The following UK subsidiaries will take advantage of the audit exemption set out within section 479A of the Companies Act 2006 for
the year ended 31 December 2018:
Audit exempt companies
Advanstar Communications (UK) Limited
Afterhurst Limited
Agra Informa Limited
AMA Research Limited
Blessmyth Limited
Colonygrove Limited
Colwiz UK Ltd
Datamonitor Limited
Design Junction Limited
DIVX Express Limited
Dove Medical Press Limited
Ebenchmarkers Limited
E-Health Media Limited
Futurum Media Limited
Green Thinking (Services) Limited
Hirecorp Limited
IBC Fourteen Limited
IBC (Ten) Limited
IBC (Twelve) Limited
IIR Exhibitions Limited
IIR Limited
IIR Management Limited
IIR (U.K. Holdings) Limited
Informa Exhibitions Limited
Informa Finance UK Limited
Informa Finance USA Limited
Informa Global Markets (Europe) Limited
Informa Holdings Limited
Informa Overseas Investments Limited
Informa Six Limited
Registration
numbers
03287275
01609566
00746465
04501364
03805559
04109768
08164609
02306113
Audit exempt companies
Informa Three Limited
Informa US Holdings Limited
James Dudley International Ltd
Karnac Books Ltd
Light Reading UK Limited
LLP Limited
London On-Water Limited
Mapa International Ltd
07634779
Miller Freeman Worldwide Limited
03212879
04967656
04159695
04214439
09813559
05803263
04790559
03119071
01844717
03007085
02972059
01835199
02922734
02748477
05202490
08774672
08940353
03094797
03849198
05845568
04606229
MRO Exhibitions Limited
MRO Network Limited
MRO Publications Limited
OES Exhibitions Limited
OTC Publications Ltd
Penton Communications Europe Limited
Roamingtarget Limited
Routledge Books Limited
Seatrade Communications Limited
Smarter Shows (Power) Europe Holdings Limited
Smarter Shows (Power) Europe Limited
Taylor & Francis Books Limited
Taylor & Francis Group Limited
Taylor & Francis Publishing Services Limited
TU-Automotive Holdings Limited
TU-Automotive Limited
UBM (GP) No 1 Limited
UBM Property Limited
UBM Property Services Limited
UBMG Services Limited
United Newspapers Publications Limited
Registration
numbers
04595951
09319013
02394118
03194381
08823359
03610056
10621549
04757016
01750865
02737787
09375001
02732007
09958003
02765878
02805376
05419444
03177762
00495334
10025028
09893244
03215483
02280993
03674840
09823826
09798474
03259390
08227422
03212363
03666160
00235544
228
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INFORMA PLC ANNUAL REPORT 2018 Five-year summary
Results from operations
Revenue
Adjusted operating profit
Statutory operating profit/(loss)
Statutory profit/(loss) before tax
Profit/(loss) attributable to equity holders of the parent
Free cash flow
Net assets
Non-current assets
Current assets
Current liabilities
Non-current liabilities
Net assets
Key statistics from continuing operations (in pence)
Earnings per share
Diluted earnings per share
Adjusted earnings per share
Adjusted diluted earnings per share
Dividends per share
2018
£m
20171
£m
2016
£m
2015
£m
2014
£m
2.369.5
1,756.8
1,344.8
1,212.2
732.1
363.2
282.1
207.9
503.2
544.9
344.7
268.2
310.8
400.9
415.6
198.6
178.1
171.5
305.7
10,248.2
717.8
(1,530.8)
(3,375.0)
6,060.2
4,356.6
460.5
(1,117.7)
(1,470.4)
2,229.0
4,542.3
489.3
(1,048.8)
(1,795.0)
2,187.8
19.7
19.7
49.4
49.2
21.90
37.7
37.6
46.2
46.0
20.45
23.6
23.6
42.2
42.1
19.30
365.6
236.5
219.7
171.4
303.4
2,731.9
327.9
(650.0)
(1,141.7)
1,268.1
24.3
24.3
39.5
39.5
18.50
1,137.0
334.0
(2.8)
(31.2)
(52.4)
237.2
2,612.7
306.2
(658.3)
(1,028.9)
1,231.7
(7.9)
(7.9)
37.8
37.8
17.80
1. 2017 restated for implementation of IFRS 15 (see Note 4 of the Consolidated Financial Statements).
11_Informa_AR18_FINANCIAL STATEMENTS.indd 229
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229
INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report
Financial Statements
Shareholder information
Shareholder information
Annual General Meeting (AGM)
The 2019 AGM will be held at 240 Blackfriars Road, London, SE1 8BF
on Friday 24 May 2019 and will commence at 11.00 am. Details
of the resolutions to be considered at the AGM are set out in
the Notice of Meeting which is available on our website:
http://www.informa.com.
Registrars
All general enquiries concerning holdings of Ordinary Shares
in Informa PLC should be addressed to our Registrar:
Computershare Investor Services PLC
The Pavilions, Bridgwater Road, Bristol BS99 6ZZ
Helpline: +44 (0)370 707 1679
Website: http://www.investorcentre.co.uk
The helpline is available between Monday and Friday,
8.30 am to 5.30 pm.
To access your shareholding details online, go to http://www.
investorcentre.co.uk. To register to use the website, you will
need your Shareholder reference number as shown on your
share certificate or dividend voucher.
The website enables you to:
• view and manage all of your shareholdings;
• register for electronic communications;
• buy and sell shares online with the dealing service; and
• deal with other matters such as a change of address,
transferring shares or replacing a lost certificate.
Electronic Shareholder communications
As part of Informa’s commitment to the sustainable use of
natural resources and reducing our environmental impact,
we offer all Shareholders the opportunity to elect to register
for electronic communications. To elect to receive all future
Shareholder communications by email, please visit
http://www.investorcentre.co.uk/ecomms.
Dividend
Informa generally pays dividends in June and September each year.
Shareholders who do not currently mandate their dividends,
and who wish to do so, should complete a mandate instruction
form available online at www.investorcentre.co.uk or by
contacting our Registrar using the details above.
If you wish to receive your dividends in a different currency,
you will need to register for the global payments service
provided by our Registrar. Further information is available
at http://www.investorcentre.co.uk.
Shareholders can also elect to join Informa’s Dividend
Reinvestment Plan (DRIP), using their cash dividends to buy
further Informa shares in the market. Further details and full
terms and conditions, including eligibility for Shareholders based
outside of the UK, are available at http://www.investorcentre.com.
Share dealing
Shareholders are able to buy or sell Informa PLC shares
using a share dealing facility operated by our Registrar.
Shareholders can deal on the internet or by phone. Log on to
http://www.investorcentre.co.uk or call +44 (0)370 703 0084
between 8.00 am and 4.30 pm Monday to Friday for more
information on this service, including eligibility and costs.
You should have your Shareholder Reference Number (SRN)
to hand when logging on or calling.
Please note that UK regulations require the Registrar to check
that you have read and accepted the Terms & Conditions
before being able to trade. This could delay your first
phone trade. If you wish to trade quickly, we suggest visiting
http://www.investorcentre.co.uk having first registered
online at http://www.computershare.trade.
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INFORMA PLC ANNUAL REPORT 2018 If you think that you may have been targeted, you should report
the matter to the FCA as soon as possible. Further information
can be found on the FCA’s website http://www.fca.org.uk or by
calling their consumer helpline on 0800 111 6768 from the UK
or +44 20 7066 1000 from outside the UK. You should also notify
the Registrar by calling +44 (0)370 707 1679.
Tips on protecting your shareholding:
• Ensure all your certificates are kept in a safe place or hold
your shares electronically in CREST via a nominee.
• Keep all documentation containing personal share
information in a safe place and destroy any correspondence
you do not wish to keep by shredding it.
•
• Know when the dividends are paid and consider having your
dividend paid directly into your bank rather than by cheque.
If you change address or bank account, inform the Registrar
immediately. If you receive a letter from the Registrar
regarding a change of address or bank details that you did
not instigate, please ensure that you contact them
immediately on +44 (0)370 707 1679.
If you are buying or selling shares, only deal with brokers
registered in the UK or in your country of residence.
•
ShareGift
ShareGift (registered charity no. 1052686) is an independent
charity which specialises in releasing value from small
shareholdings generating funding for thousands of charities.
ShareGift accepts donations of small uneconomic numbers of
shares which it then aggregates, sells and donates the proceeds
to a wide range of registered charities, based on the suggestions
of its donors and supporters. Further information about
ShareGift can be found on http://www.ShareGift.org, by
emailing help@sharegift.org or by calling 020 7930 3737.
ADR programme
On 1 July 2013, Informa established a Level I American
Depositary Receipt (ADR) programme with BNY Mellon, the
global leader in investment management and investment
services. Each Informa ADR represents two Ordinary Shares
and they trade on the “Over-the-Counter” market in the US
under the symbol “IFJPY” (ISIN US45672B2060).
Investors can find information on Informa’s ADRs at
http://www.bnymellon.com/dr. Informa’s Ordinary Shares
continue to trade on the Premium Main Market of the London
Stock Exchange under the symbol “INF” (ISIN: GB00BMJ6DW54).
Protecting your investment from share register fraud
Shareholders should be aware that they may receive unsolicited
phone calls or correspondence concerning investment matters.
Shareholders are advised to be very wary of any unsolicited
investment advice or offers to buy or sell any shares. If you
receive any unsolicited phone calls or correspondence:
• Do not give out or confirm any personal information.
• Make sure you record the correct name of the person who
contacted you and the name of the organisation.
• Do not hand over any money without first checking that the
organisation is properly authorised by the Financial Conduct
Authority (FCA) and doing further research. You can check at
http://www.fca.org.uk.
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231
INFORMA PLC ANNUAL REPORT 2018WWW.INFORMA.COMGovernanceFinancial StatementsStrategic Report Financial Statements
Advisers
Auditor
Deloitte LLP
2 New Street Square
London EC4A 3BZ
UK
www.deloitte.com
Stockbrokers
Joint Stockbroker
BAML
2 King Edward Street
London EC1A 1HQ
UK
www.bofaml.com
Joint Stockbroker
Morgan Stanley
25 Cabot Square
London E14 5AB
UK
Principal Solicitors
Clifford Chance LLP
10 Upper Bank Street
London E14 5JJ
UK
www.cliffordchance.com
Strategic Financial Advice
Rothschild
New Court
St Swithin’s Lane
London EC4N 8AL
UK
www.rothschild.com
Communications Advisers
Teneo
6 More London Place
London SE1 2DA
UK
www.morganstanley.com
www.teneo.com
Depository Bank
BNY Mellon
Depositary Receipts
101 Barclay Street, 22nd Floor
New York NY 10286
United States
Registrars
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
UK
www.adrbnymellon.com
www.computershare.com
Legal notices
Notice concerning forward-looking statements
This Annual Report contains forward-looking statements. Although the Group believes that the expectations reflected in such forward-
looking statements are reasonable, these statements are not guarantees of future performance and are subject to a number of risks
and uncertainties and actual results and events could differ materially from those currently being anticipated as reflected in such
forward-looking statements. The terms “expect”, “estimate”, “forecast”, “target”, “believe”, “should be”, “will be” and similar expressions
are intended to identify forward-looking statements. Factors which may cause future outcomes to differ from those foreseen in forward-
looking statements include, but are not limited to, those identified under “Principal Risks and Uncertainties” on pages 62 to 72 of this
Annual Report. The forward-looking statements contained in this Annual Report speak only as of the date of publication of this Annual
Report and the Group therefore cautions readers not to place undue reliance on any forward-looking statements.
Except as required by any applicable law or regulation, the Group expressly disclaims any obligation or undertaking to release publicly
any updates or revisions to any forward-looking statements contained in this document to reflect any change in the Group’s expectations
or any change in events, conditions or circumstances on which any such statement is based.
Website
Informa’s website www.informa.com gives additional information on the Group. Information made available on the website
does not constitute part of this Annual Report.
232
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INFORMA PLC ANNUAL REPORT 2018 Contents
Who we are
Informa is an international business-to-business events, academic
publishing and information services Group.
We are listed on the London Stock Exchange and a member of the FTSE 100.
What we do
We serve businesses, professionals and academics working in specialist
communities all over the world, by helping them connect, learn and do
business, and by providing access to content, intelligence and networks
that enable them to work smarter and make better decisions faster.
12
Group Chief Executive’s Review
22
Working in specialist markets
30
Engaging inside and outside Informa
40
Divisional Reviews
Contents
Strategic Report
Highlights
Informa at a glance
Chairman’s Introduction
Understanding the enlarged Group
Group strategy
Group Chief Executive’s Review
Business model
Our markets
Engaging inside and outside Informa
Non-financial information statement
A snapshot of our Divisions in 2018
Divisional Review
– Academic Publishing
– Business Intelligence
– Global Exhibitions
– Knowledge & Networking
– Global Support
Key performance indicators
Risk management and principal risks
and uncertainties
Viability Statement
Financial Review
Governance
Chairman’s introduction to governance
Board of Directors
Corporate Governance Report
Nomination Committee Report
Audit Committee Report
Directors’ Remuneration Report
Relations with Shareholders
Directors’ Report and
other statutory information
Directors’ responsibilities
Financial Statements
Independent Auditor’s report
Consolidated Income Statement
Consolidated Statement of
Comprehensive Income
Consolidated Statement of Changes in Equity
Consolidated Balance Sheet
Consolidated Cash Flow Statement
Reconciliation of Movement in Net Debt
Notes to the Consolidated Financial Statements
Company Balance Sheet
Company Statement of Changes in Equity
Notes to the Company Financial Statements
Five-year summary
Company Information
Shareholder information
Advisers
1
2
4
8
10
12
20
22
30
37
38
40
44
48
52
56
60
62
73
76
90
94
96
103
107
113
126
129
133
134
146
147
148
149
150
150
151
222
223
226
229
230
232
Informa is grateful to the following for
their support and contribution to the
production of this Annual Report:
Consultancy, design and production
by Luminous
www.luminous.co.uk
Cover, markets and divisional illustrations
by Janis Andzans
Board of Directors photography by
Simon Jarratt. CEO photography by
Chris Warren.
All information in this report is © Informa PLC
2018 and may not be used in whole or part
without prior permission.
The paper used in this report is produced
with FSC® mixed sources
pulp which is partially
recyclable, biodegradable,
pH neutral, heavy metal
free and acid free. It is
manufactured within
a mill which complies
with the international
environmental
ISO 14001 standard.
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8
New York
605 Third Avenue
New York, NY 10158
Toronto
20 Eglinton Avenue West
Toronto
Tokyo
Kanda 91 Building
Chiyoda-ku, Tokyo 101-0044
London
5 Howick Place
SW1P 1WG
(Registered Office)
t: +44 (0)20 7017 5000
e: info@informa.com
www.informa.com
London Blackfriars
240 Blackfriars
SE1 8BF
London Maple House
149 Tottenham Court Road
W1T 7AD
London Blue Fin Building
110 Southwark St
SE1 0SU
Colchester
Sheepen Place
Essex, CO3 3LP
Washington DC
2121 K Street NW
Washington DC, DC 20037
Philadelphia
530 Walnut Street
Philadelphia, PA 19106
Boston
Two International Place
Fort Hill Square, MA 02110
Boca Raton
6000 Broken Sound
Parkway NW
Boca Raton, FL
Kansas City
9800 Metcalf Avenue
Overland Park, KS 66212
Milton Park
2, 3 and 4 Park Square
Milton Park, OX14 4RN
Boulder
5541 Central Avenue
Boulder, CO 80301
Amsterdam
De Entreé 73
1101 BH, Amsterdam
Phoenix
2020 North Central Avenue
Phoenix, AZ 85004
Dallas
6191 N. State Highway
Suite 500
Irving, TX 75038
San Francisco
303 2nd Street
San Francisco, CA 94107
Santa Monica
28th St, Suite 100
Santa Monica, CA 90405
Mexico City
Benjamin Franklin 325
Delegacion Cuauhtemoc
Mexico DF 06100
São Paulo
Avenida Dra Ruth Cardoso
05425-902 São Paulo
Sydney
24 York Street
NSW 2000
Hong Kong
17/F China
Resources Building
26 Harbour Road
Wanchai
Dubai
Level 20, World Trade Centre
Tower
PO Box 9292, Dubai
Istanbul
Smart Plaza B Blok
Rüzgarlıbahçe Mah.
Kavak Sok
Kavacık Beykoz, Istanbul
Cairo
7H Building, Street 263
New Maadi, Cairo
Shanghai
9/F Ciros Plaza
No. 388 West Nanjing Road
Shanghai 200003
Singapore
Visioncrest Building
103 Penang
Singapore 238467
Kuala Lumpur
Sunway Visio Tower
Lingkaran SV, Sunway
Velocity 55100
Kuala Lumpur
Mumbai
Times Square
Andheri-Kurla Road
Mumbai 400 059
New Delhi
1, Jai Singh Road
New Delhi 110001
These are some
of Informa’s office
locations around
the world
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