UBM has delivered “solid if unspectacular” 2013 results, according to analyst William Packer at BNP Paribas.
The business media and events and exhibitions company reported revenue growth from continuing operations up 3.2 percent to £793.9 million (organic revenue growth of 3.7 percent) and adjusted operating profit from continuing operations up 6.3 percent to £186.3 million, with a margin of 23.5 percent.
UBM’s Events arm saw continuing revenue growth of 8.3 percent (underlying growth of 6.3 percent) to £462.7 million from last year’s £427.2 million, with operating profit up 5.1 percent to £148.9 million – a margin of 32.2 percent.
Underlying biennial event revenues grew 25.4 percent to £38.1 million, driven by strong growth in second half shows, especially Marintec China in Shanghai and Food Ingredients Europe in Frankfurt.
Underlying annual event revneues increaed 6.3 percent to £424.6 million, driven by a strong second half which offset poor performance in H1. Emerging markets generated 47.3 percent of annual event revenues.
UBM also spent £12.1 million on majority interests in five new events businesses in China, Turkey and Indonesia, as well as increasing its stakes in its existing Turkish and Malaysian joint ventures.
Marketing Services (which has been restructured to align with Events and “to focus on key communities”, says UBM) reported a drop in underlying growth of 1.7 percent to £129.4 million. Adjusted operating profit however grew 41.7 percent to £10.2 million but represents a margin of 7.9 percent, excluding the exceptional restructuring costs.
Restructuring-wise, UBM stopped printing several titles, particularly those for the US technology communities – flagship tech title Information Week went digital-only.
PR Newswire saw 2.7 percent revenue growth (underlying 1.9 percent) to £201.8 million, and adjusted operating profit of £45.6 million – up 4.8 percent with a 22.6 percent margin.
US distribution – which makes up the lion’s share of revenue – remained stagnant at 0.3 percent growth (to £96.2 million), while Europe’s business showed good growth of 8.9 percent to £21 million driven by strong performances in France, Germany, Israel, the Nordics, and the Middle East.
UBM also received £22.7m exceptional charges over the Marketing Services restructuring and the implementation of a new company-wide finance and reporting system.
CEO David Levin, who announced in September that he would step down before 31 July 2014, said:
“2013 was a year of strategic progress and operational achievement for UBM against a difficult economic backdrop; the company can look forward to 2014 with confidence.”
“2013’s good revenue and profit growth was bolstered by a strong performance from our biennial events in the second half of the year. PR Newswire had a solid year in its core business and maintained its strong profitability.”
“We disposed of our Data Services business and substantially restructured our Marketing Services activities to focus on the professional communities our events serve.”
“We end the year with significantly higher quality earnings and with the business better positioned for structural growth.”
Despite good progress in the last few years, the challenges for UBM remain the same as when Levin announced his departure.
He has done an impressive job of overseeing the company’s transformation, which is clear to see from the results and the way the business has shifted to focus on media brands that tie in closely with events (while selling off Pulse, Farmer’s Guardian, Property Week, and other publications that didn’t fit with its plans).
But will Levin’s replacement, Tim Cobbold, continue on the same path, or will he look at pruning the company further?