Informa (INF) H2 2019 earnings summary

Executive summary

• Strong 2019 performance: reported revenue rose 22%, underlying revenue grew 3.5%, adjusted operating profit increased 27.5%, and free cash flow exceeded £700m.

• All five divisions grew; market specialization and operating improvements remained central, with subscription-led businesses providing ~35% of revenue.

• COVID-19 prompted extensive event postponements and active cost, cash and liquidity management; planning assumed a return to more normal trading in H2 2020.

Financial highlights

• Reported revenue increased 22% to almost £2.9bn; underlying growth was 3.5%, including a full year of UBM trading.

• Adjusted operating profit rose 27.5% to £933m; adjusted diluted EPS increased 4% reported and 16% pro forma.

• Free cash flow grew over 40% to £722m; reported EPS increased 4%, with 51p of earnings covering the proposed dividend 2.2x.

• Revenue growth included ~15% from the UBM combination, ~3% from currency and 0.2% from biennials; underlying trading contributed 3.5%.

• The board recommended a 7.3% increase in the full-year dividend.

Outlook and guidance

• Planning assumption: events activity recovers in H2 2020; subscription businesses were trading on or ahead of plan, with forward subscription indicators stable.

• No revenue or EBIT guidance was given amid rapidly changing conditions; fuller guidance was expected after reassessing visibility by the June AGM or half-year.

• Forward bookings were tracking well; smaller, localized events were expected to continue in some markets through Q2.

• Medium-term effective tax rate was expected to remain 19%, matching 2019.