TIDMERM
RNS Number : 1748L
Euromoney Institutional InvestorPLC
20 December 2018
EUROMONEY INSTITUTIONAL INVESTOR PLC
ANNUAL REPORT AND ACCOUNTS 2018 AND
NOTICE OF ANNUAL GENERAL MEETING 2019
20 December 2018
Euromoney Institutional Investor PLC ("Euromoney") the
international business information and events group, has published
the following documents on its website www.euromoneyplc.com:
Document Location
Annual Report and Accounts 2018 www.euromoneyplc.com/investor-relations/reports-and-presentations
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Notice of Annual General Meeting www.euromoneyplc.com/investor-relations/shareholder-services/agm-information
2019
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The Annual Report and Accounts 2018, together with the Notice of
Annual General Meeting 2019 and Form of Proxy have been posted or
otherwise made available to shareholders. These documents have been
uploaded to the National Storage Mechanism and will shortly be
available for inspection at www.morningstar.co.uk/uk/NSM.
The Company's Annual General Meeting 2019 is scheduled to be
held at 9.30am on 1 February 2019 at 8 Bouverie Street, London,
EC4Y 8AX.
The information set out below, which is extracted from the
Annual Report and Accounts 2018, is provided solely for the purpose
of complying with DTR 6.3.5R. The information should be read in
conjunction with the Preliminary Statement announcement made on 22
November 2018.
Statement of Directors' responsibilities in respect of the
Financial Statements
The Directors are responsible for preparing the Annual Report
and the Financial Statements in accordance with applicable law and
regulation. Company law requires the Directors to prepare Financial
Statements for each financial year. Under that law the Directors
have prepared the Group Financial Statements in accordance with
International Financial Reporting Standards (IFRSs) as adopted by
the European Union and Company Financial Statements in accordance
with United Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards, comprising FRS 102 'The Financial
Reporting Standard applicable in the UK and Republic of Ireland',
and applicable law). 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 Company and of the profit or loss of the Group and Company for
that period. In preparing the Financial Statements, the Directors
are required to:
-- select suitable accounting policies and then apply them consistently
-- state whether applicable IFRSs as adopted by the European
Union have been followed for the Group Financial Statements and
United Kingdom Accounting Standards, comprising FRS 102, have been
followed for the Company Financial Statements, subject to any
material departures disclosed and explained in the Financial
Statements
-- make judgements and accounting estimates that are reasonable and prudent and
-- prepare the Financial Statements on the going concern basis
unless it is inappropriate to presume that the Group and Company
will continue in business
The Directors are also responsible for safeguarding the assets
of the Group and Company and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities. The
Directors are responsible for keeping adequate accounting records
that are sufficient to show and explain the Group and Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Group and Company and enable them to
ensure that the Financial Statements and the Directors'
Remuneration Report comply with the Companies Act 2006 and, as
regards the Group Financial Statements, Article 4 of the IAS
Regulation.
The Directors are responsible for the maintenance and integrity
of the Company's website. Legislation in the United Kingdom
governing the preparation and dissemination of Financial Statements
may differ from legislation in other jurisdictions.
Each of the Directors confirm that to the best of their
knowledge:
-- the Company's Financial Statements, which have been prepared
in accordance with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards, comprising FRS 102
'The Financial Reporting Standard applicable in the UK and Republic
of Ireland', and applicable law), give a true and fair view of the
assets, liabilities, financial position and profit of the
Company
-- the Group Financial Statements, which have been prepared in
accordance with IFRSs as adopted by the European Union, give a true
and fair view of the assets, liabilities, financial position,
profit and cash flows of the Group and
-- 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 and Company, together with a
description of the principal risks and uncertainties that it
faces.
Principal risks and uncertainties
The principal risks and uncertainties the Group faces vary
across its different businesses. Management of significant risk is
the responsibility of the Board and during the year was overseen by
the Risk Committee. For the year ahead, the Risk Committee will
continue to operate as a management committee, reporting into our
reconstituted Audit and Risk Committee which will result in
management providing the Board with a more regular and detailed
review of the management of the Group's principal risks. In tandem
with this, the Group plans to review the controls in place across
the business and update its risk management framework. The Group's
principal risks and uncertainties are summarised below.
Downturn in key geographic region or market sector (cyclical
downturn)
Key factors Mitigation Risk appetite
Risk tolerant
* Concentration of customers in financial services * The Group actively manages cyclical risk through its Prior years
sector makes this exposure acute strategic framework (relative
position)
2017: Risk
* Global economic and geopolitical risk has further * The Group continues to carry out tolerant
increased this year driven by continuing uncertainty 2016: Risk
in the UK and Europe over the UK's EU exit and the tolerant
increasingly protectionist trade policies of the US comprehensive risk 2015: Risk
and China reviews of its asset tolerant
management businesses
resulting in Post-mitigation
* Headwinds in the asset management detailed mitigation risk
plans for each business trend
and continuous tracking
market including the of effective risk This risk is
shift towards passive management increasing
portfolio management, * A significant restructuring exercise has
new technologies and Description of
the impact of MiFID risk
II continue to affect been carried out to change
clients in the sector 'right-size' our BCA
and NDR businesses Global economic
and ensure focus on and
core products geopolitical
* The Group operates in many geographical markets uncertainty
is increasing
following
* Some diversification in sector mix the US
election, US
and Chinese
* Ability to cut some costs temporarily and quickly protectionism,
limited
progress of
the
UK's EU exit
negotiations
and disruption
in
a sector with
concentrated
Group revenues
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Board's view
There are limited options to mitigate impact of a significant
cyclical downturn in the short and medium term. The residual
risk will remain high. The Board also wishes to continue to
serve the Asset Management segment because it considers it
to be sufficiently attractive over the medium term.
Product and market transformation/disruption (structural
change)
Key factors Mitigation Risk appetite
Risk tolerant
* Competition from existing competitors, new disruptive * Strategy designed to appraise and evaluate structural Prior years
players and new entrants risks and respond to them, taking advantage of (relative
opportunities where identified position)
2017: Risk
* New technologies change how customers access and use tolerant
our products * Regular CEO-led reviews across all divisions 2016: Risk
tolerant
2015: Risk
* Changing demographics can affect customer needs and * Entrepreneurial approach tolerant
opportunities
Post-
* Effective management reporting with regular forecast mitigation risk
* Structural pressure on customer business models will reviews trend
affect demand for the Group's products and services,
particularly in financial services This risk is
* Portfolio spreads risk to some degree unchanged
* Regulations such as MiFID II creating both challenges Description of
and opportunities in asset management sector * Portfolio management allows the Group to sell risk
structurally challenged businesses and to buy change
structurally strong ones
* Free content available via the internet increases the As an
threat to paid subscription model entrepreneurial
* Cyclical review of divisional activities by the Risk business, the
Committee Group
* Lower barriers to entry for new entrants is experienced
at
managing this
* Not acquiring the types of assets that the Group's risk
strategy requires
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Board's view
Controls are in place but exposure to this risk will remain
moderate.
Exposure to US dollar exchange rate
Key factors Mitigation Risk appetite
Risk tolerant
* Approximately two-thirds of revenues and profits are * US dollar forward contracts are used to hedge 80% of
generated in US dollars, including approximately 40% UK based US dollar revenues for the coming 12 months Prior years
of the revenues in the UK-based businesses. This and 50% of these revenues for a further six months (relative
gives significant exposure to movements in the US position)
dollar for both UK revenues and the translation of 2017: Risk
results of foreign subsidiaries * Exposure from the translation of US tolerant
dollar-denominated earnings is not directly hedged 2016: Risk
but is partially offset by US dollar costs and the tolerant
* A significant strengthening of sterling against the use of US dollar-denominated debt when debt is 2015: Risk
US dollar could reduce profits and dividends required tolerant
Post-mitigation
* The Group also undertakes transactions in many other * Sensitivity analysis is performed regularly to assess risk
currencies, although none currently provides a the impact of currency risk and is reviewed by the trend
significant risk to the results Tax & Treasury Committee
This risk is
unchanged
* The UK's exit from the EU may result in * Given heightened volatility, the Group
Description of
risk
significant currency hedging strategy is change
fluctuations depending under frequent review
on the terms of the and includes regular The Group is
exit impact analysis of experienced
various exchange rate at managing
scenarios together risks
with internal risk related to its
mitigations such as exposure
natural hedging of to the US
non-sterling earnings dollar and
this risk
remains
unchanged
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Board's view
Although the Group considers this risk unchanged, the increased
volatility and uncertainty of sterling against the US dollar
after the UK's exit from the EU is expected to continue for
some time.
Information security breach resulting in challenge to data
integrity
Key factors Mitigation Risk appetite
Risk averse
* Integrity of data products is fundamental to the * Governance provided by Risk Committee and Information Prior years
success of the business Security Steering Group (relative
position)
2017: Risk
* The Group relies on large quantities of data * Approved information security standards and policies averse
including customer, employee and commercial data which are reviewed on a regular basis 2016: Risk
averse
2015: Risk
* Increasing number of cyber-attacks affecting * Continuing education and awareness programmes for all neutral
organisations globally staff Post-mitigation
risk
trend
* The Group has many websites and is reliant on * Active information security programme (including
distributed technology, increasing exposure to access management and cyber-resilience planning) to This risk is
threats align all parts of the Group with its information increasing
security standards
Description of
* A successful cyber-attack could cause considerable risk
disruption to business operations, lost revenue, * Crisis management and business continuity frameworks change
regulatory fines and reputational damage cover all businesses including disaster recovery
planning for IT systems Most industry
information
* The EU General Data Protection Regulation increases security
regulatory scrutiny and penalties * Multi-layered defence strategy analysts agree
that
this risk is
* Technological innovations in mobile working, * New, more robust IT security due diligence framework increasing and
cloud-based technologies and social media introduce for acquisitions warn
new information security risks that companies
will continue
* Access to key systems and data is restricted, to face
* Threats such as ransomware and monitored and logged with auditable data trails in more regular
place and
sophisticated
cryptomining require cyber-attacks
the Group to adapt * Comprehensive backups for IT infrastructure, systems
to a continually shifting and business data
landscape
* Phishing remains one of the most serious threats to
network security * Increase in number of dedicated IT security roles in
Central Technology
* Professional indemnity insurance provides cover for
cyber risks including cyber-attack and data breach
incidents
* Information security is reviewed as part of our
internal audit process
* Regular information security training for employees,
contractors and freelancers
* Incident response playbook
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Board's view
The use of technology creates this inherent risk. The Group
strives to balance the need to innovate through the use of
technology while responsibly managing risk, including through
the use of third party expertise. Controls to prevent an information
security breach or cyber-attack are reviewed regularly and,
where required, enhanced. However, the rising number of cyber-attacks
affecting organisations globally, the Group's greater dependency
on technology and the growing threat from cyber-crime are
increasing this risk.
Reputational damage from a legal, regulatory or behavioural
issue arising from operational activities
Key factors Mitigation Risk appetite
Risk averse
* The Group operates in many jurisdictions and must be * Processes and methodologies for assessing commodity
compliant with all applicable laws and regulations prices and calculating benchmarks and indices are Prior years
clearly defined and documented (relative
position)
* The Group's businesses publish, market and license 2017: Risk
increasingly complex content and data which in some * Compliance staff appointed in key positions averse
cases is data on which its customers may choose to 2016: Risk
rely when executing transactions averse
* Compliance with International Organization of 2015: Risk
Securities Commissions (IOSCO) standards achieved for averse
* Success of the Group is dependent on client relevant pricing products
confidence in integrity of products and brands Post-mitigation
risk
* Code of conduct and other key policies in place for trend
* Claimants can forum shop when determining where to price assessment, benchmark and index reporting
litigate or threaten legal proceedings activities This risk is
unchanged
* Compliance risk is increasing for information * Refreshed anti-bribery and corruption training and Description of
providers as price, benchmark and index reporting awareness programme rolled out globally in 2018 risk
activities are coming into scope of new regulations change
being introduced as a result of the financial crisis
of 2008 and LIBOR scandal * A review and update of the Group's Information
providers
face increased
* Risk or reputational damage can arise from errors in trade sanctions controls compliance
underlying data or content, failures of data and policy was risks as a
integrity, failure to educate customers on completed result
appropriate usage of data, inappropriate reliance on * Review processes for operation of events and awards of the
third party data or content to create proprietary undertaken in 2018 complexity
content or errors in content creation, or a failure of data they
to comply with applicable law or regulation publish
* Specialist training in publishing law issues provided which customers
to relevant staff may
rely on for
certain
* Company-wide speak up policy in place business
decisions
* Comprehensive legal disclaimers in place
* Professional indemnity insurance
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Board's view
We have a zero-tolerance approach to certain legal and regulatory
risks such as bribery. At the same time, the publication of
data and content in digital businesses inevitably exposes
the Group to global legal and regulatory risk. The manner
in which we conduct our businesses can also result in risk
if policies are not complied with. Our divisions have access
to the Group's central functions such as legal, risk and internal
audit, which provide more specialist resource to raise awareness
of, manage and mitigate risk. Legal and regulatory compliance
risk for the Group is unchanged.
Disruption to operations from a business continuity failure
Key factors Mitigation Risk appetite
Risk averse
* Significant reliance on third-party technology * Crisis management and business continuity framework
hosting services covers all businesses including disaster recovery Prior years
planning for IT systems (relative
position)
* Many products are dependent on specialist, technical 2017: Risk
and editorial expertise * Crisis management exercise programme for the senior averse
management team 2016: Risk
averse
* A significant incident affecting one or more of the 2015: Risk
Company's key offices (London, New York, Montreal or * Group-wide IT disaster recovery testing conducted averse
Hong Kong) could lead to disruption to Group every six months and business continuity testing
operations and reputational damage conducted every 12 months Post-mitigation
risk
trend
* Potential impact of the UK's exit from the EU without * Clear responsibilities for business continuity
a deal in place could cause disruption to global planning established across divisions This risk is
business travel. This could affect both our unchanged
employees' and customers' ability to travel
* Substantial central and business group investment in Description of
cloud-based platforms and software risk
* Information security breach impacting wider business change
operations
* Risk assessments for new suppliers and technologies The Group
consider operational and financial resilience recognises
that business
continuity
* Disposal of a number of businesses this year has events will
reduced the number of office locations globally arise
from time to
time
* Migration of the Group's websites to cloud hosting and remains
solution committed
to active
management
of this risk
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Board's view
Business disruption is an unavoidable risk but can be mitigated
if business continuity plans are well developed and managed.
In spite of challenges such as extreme weather in Asia and
the US and unplanned technology downtime, all businesses maintained
operations successfully throughout the year which demonstrated
that effective controls are in place. However, regular IT
and business continuity planning and testing will continue
to be an important control.
Catastrophic or high impact incident affecting key events or
wider business
Key factors Mitigation Risk appetite
Risk averse
* The Group has a number of large events which are * A new event risk management framework is being
exposed to one-off risks including natural hazards rolled-out in 2019 Prior years
and security incidents (relative
position)
* Divisional Directors with responsibility for events
* Risk affects customers as well as staff and revenue, sit on the Risk Committee 2017: Risk
and can also adversely impact brand reputation averse
* Crisis management and business continuity framework 2016: Risk
* Prolonged interruption to business travel will harm requires all businesses to plan for high impact averse
event revenues and disrupt management and sales events
operations 2015: Risk
neutral
* Specialist security and medical assistance services
* The Group operates in regions with higher risk of engaged to support all staff working away from the Post-mitigation
natural hazards office risk
trend
* Mandatory security and risk management training This risk is
programme for event staff and business travellers unchanged
Description of
* Close co-ordination between central risk
change
functions such as The Group
risk and information recognises
risk with events teams that
to ensure robust approach international
to risk management events
* With sufficient notice, events can be moved to businesses
non-affected regions are exposed to
this
risk and the
* Cancellation insurance for the Group's largest events introduction
of its event
risk
management
framework
will enable
further
mitigation of
this
risk in 2019
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Board's view
The Group continues to invest in training and resources to
keep staff safe when travelling and to improve event/conference
resilience.
Acquisition or disposal fails to generate expected returns
Key factors Mitigation Risk appetite
Risk neutral
* Active portfolio management means the Group continues * M&A strategy and execution is a regular topic of
to make strategic acquisitions and disposals Board focus Prior years
(relative
position)
* Significant growth has been M&A related, through both * Investment Committee established
acquired profit and growth in acquired businesses 2017: Risk
neutral
enabling quicker decision-making
* Failure to successfully acquire either the right and detailed Board 2016: Risk
businesses (meaning businesses in our top-right oversight of M&A transactions neutral
quadrant or which can be developed and moved into our * CEO and CFO closely involved in M&A execution
top-right quadrant), or a failure to successfully 2015: Risk
make acquisitions at all, will negatively impact our neutral
ability to deliver the Group strategy * Active portfolio management with a clear framework
and operating in line with agreed strategy Post-mitigation
risk
* Increasingly high multiples and competitive auction trend
processes for high quality assets can favour private * Development of key objective criteria
equity buyers This risk is
unchanged
against which acquisition
* Failure to integrate as intended may mean an acquired or disposal Description of
business does not generate the expected returns decisions are tested risk
* Appropriate approvals process in place change
* Risk of impairment loss if an acquired business does A need to
not generate the expected returns for transactions execute
* Investment in a larger Corporate successful M&A
in
* Disposal risks arise from failing to identify the a
time at which businesses should be sold or failing to Development team competitive
achieve optimal price * Emphasis on and investment in carrying out external, market
independent commercial due diligence at an early combined with
stage robust
* Group strategy relies on successful recycling of risk management
capital and therefore M&A execution impacts core and
strategy controls means
this
risk is
unchanged
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Board's view
The Board's focus on M&A combined with management's experience
enables the Group to remain disciplined in its approach, minimising
the risk of unsuccessful execution or a failure to make the
right acquisitions, or any acquisitions at all.
Unforeseen tax liabilities
Key factors Mitigation Risk appetite
Risk averse
* The Group operates within many increasingly complex * Audit Committee and Tax and Treasury Committee
tax jurisdictions oversight Prior years
(relative
position)
* Changes in legislation and interpretation * New Global Head of Tax and Treasury recruited in 2018
to lead dedicated Tax and Treasury team 2017: Risk
averse
* The disposal of a number of businesses in 2018 has 2016: Risk
reduced the number of office locations globally averse
2015: Risk
* Making financial provisions averse
Post-mitigation
where appropriate risk
* Policy to comply with tax laws in a trend
This risk is
responsible manner increasing
* Appropriate care taken to protect the Group's
reputation and have open and constructive Description of
relationships with fiscal authorities risk
change
* Internal audit programme covers tax The Group is
experienced
at managing the
tax
risks arising
from
its
international
business
portfolio.
However,
uncertainty
over the terms
of
the UK's exit
from
the EU means
this
risk is
increasing
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Board's view
Effective controls are in place but the Group cannot eliminate
this risk entirely due to the complexity of the Group's structure
and the number of jurisdictions in which it operates. The
Group has made appropriate provisions for historical potential
liabilities in line with
advice from external advisors.
Failure to implement the strategy effectively due to a loss of
key staff
Key factors Mitigation Risk appetite
Risk neutral:
* The strategy is embedded across the * Significant investment in staff budgeted for 2019 becoming
across a range of areas, including salary more averse
benchmarking and training
Group and is having Prior years
a positive impact (relative
on financial performance. * Ensuring compensation for critical staff including a position)
Its implementation balance of short-term and long-term incentives 2017: Risk
is partially dependent neutral
on the retention and
performance of key * Remuneration Committee oversight of Group Management Post-mitigation
staff Board rewards risk
* Our segments and divisions have individual strategies trend
dependent on divisional staff with specific skills,
expertise and industry knowledge * Investment in training such as Leadership 3.0 and This risk is
Management 3.0 programmes unchanged
* An inability to recruit, retain and train for Description of
critical roles will adversely impact our ability to * Plan to launch an employee forum risk
deliver the strategy successfully change
during the year, allowing Successful
for improved employee implementation
engagement of the Group's
* Proactive relationship management of recruitment strategy
search companies to ensure our hiring needs are met remains
dependent
on hiring and
* New recruitment policy, process and retaining
key staff. The
Group
training to be rolled has
out in 2019 invested in the
* Maintaining the Group's reputation for an recruitment
entrepreneurial approach, making it an attractive and training of
place to work staff
and accelerated
succession
* There are sufficient businesses within each segment planning
within the Group to mitigate the impact of
'business-as-usual' departures of critical staff
* Succession planning accelerated in
2018. Plans are now
in place for most
key staff and our
new succession planning
framework will help
businesses identify
and manage key staff
* Contractual notice periods are designed to manage the
risk of critical staff leaving on short notice
* Culture survey results have led to a number of
employee initiatives across the Group, designed to
improve career progression and staff retention
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Board's view
The Board recognises the importance of retaining critical
staff to ensure effective delivery of Group, segmental and
divisional strategies. A range of approaches are used to manage
this risk effectively, and succession planning accelerated
in 2018.
Impact on people and operations of the UK exiting the EU
Key factors Mitigation Risk appetite
Risk averse
* The UK is scheduled to leave the European Union (EU) * Contingency plans seek to address the key risks and
in March 2019 and the potential consequences of that leverage opportunities we identify This is a new
are unknown risk
* The Group is assessing the potential Post-mitigation
* The terms on which the UK will exit the EU are risk
unknown trend
impact on affected
staff This risk is
* The length of any transition period following the * The Group has a global geographical footprint increasing
UK's EU exit is unknown
Description of
* Hedging is in place to partially offset the impact of risk
* There is no precedent data or facts on which to model US dollar exchange rate risk in the UK change
the likely consequences of an EU exit, in particular
without agreed terms in place The possibility
* A small percentage of Group revenue is generated in of
the EU outside of the UK a 'nodeal' exit
* The Group, its staff, customers, suppliers and other is
stakeholders are unable to plan with precision for increasing,
the uncertainty resulting from the above factors * Small number of EU nationals in leading
to increased
economic
our workforce uncertainty,
* Potential travel disruption can be mitigated by using therefore
international locations and planning longer lead-time this risk is
for travel increasing
* We use geographically diverse
technology suppliers
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Board's view
The Board notes that this risk is increasing for all UK companies.
The Company is carrying out contingency planning in a range
of areas in light of likely continued uncertainty in the UK
market during 2019.
Ends
For further information, please contact:
Euromoney Institutional Investor PLC
Tim Bratton, General Counsel & Company Secretary: +44 (0)20
7779 8288;
About Euromoney Institutional Investor PLC
Euromoney is a global, multi-brand information business which
provides critical data, price reporting, insight, analysis and
must-attend events to financial services, commodities, telecoms and
legal markets. Euromoney is listed on the London Stock Exchange and
is a member of the FTSE 250 share index.
www.euromoneyplc.com
LEI number: 213800PZU2RGHMHE2S67
This information is provided by RNS, the news service of the
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Authority to act as a Primary Information Provider in the United
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END
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