TIDMINF
RNS Number : 2765W
Informa PLC
22 April 2021
Informa LEI: 5493006VM2LKUPSEDU20
Informa PLC Press Release
22 April 2021
2020 Full-Year Results
Continuing Stability and Security
Informa (LSE: INF.L), the Information Services, Advanced
Learning, B2B Exhibitions and Events Group today announced its
financial results for the 12 months ended 31 December 2020 and
provided an update on trading to date in 2021, in what will be The
Transition Year for physical events.
Key 2020 Highlights
-- Full Year 2020 Results: Adjusted Operating Profit(1) of
GBP267.8m (2019: GBP933.1m) on revenues of GBP1,660.8m (2019:
GBP2,890.3m), in line with guidance and reflecting the significant
pandemic-impact on physical Events business; One-off COVID-19
non-cash impairment of goodwill and other exceptional costs result
in statutory operating loss of GBP880.4m (2019: GBP538.1m
profit);
-- Continuing Stability & Security: Strength in
Subscriptions-led businesses in 2020, combined with our COVID-19
Action Plan, have delivered Stability and Security; costs matched
to current activity levels through GBP600m+ cost savings, and
balance sheet secured, with liquidity of more than GBP1bn, removal
of all financial covenants and positive cash generation in the
first quarter of 2021;
-- Subscriptions Strength & Performance: Strong performances
by our Subscriptions businesses have continued into Q1 2021,
reflecting consistent investment in specialist content and digital
platforms. Full year target is for positive underlying(1) growth at
Taylor & Francis and 4%+ underlying(1) growth at Informa
Intelligence. Growth underpinned by consistent performance in
clinical trials intelligence, supported by addition of TrialScope,
and strong growth in intelligence products for US retail banks,
with further opportunities for product expansion through a
potential combination with Novantas.
-- 2021 - The Transition Year: 2021 will be The Transition Year
for B2B physical events, as permissions progressively return and
B2B customer confidence rebuilds. This will vary by region and
customer market, with Mainland China, North America and the Middle
East, in that order, tracking ahead of Europe. The pace of return
in B2B physical events will determine the extent of improvement
beyond this year's baseline Group revenue commitment of
GBP1.7bn.
-- 2022-2024 - Revitalisation and Growth: Demand for B2B Event
platforms that connect buyers and sellers efficiently, at scale,
remains strong, as evidenced through the return of our business in
Mainland China (45+ events and 1.2m attendees since June).
Confidence in a period of Revitalisation and Growth through
2022-2024 is underpinned by the strength of our portfolio, built
around major B2B brands (75% of revenue) in major locations (65%+
Mainland China and North America).
-- Expanding Digital Services: We continue to expand our range
of adjacent B2B digital services. Across the portfolio, we
delivered more than GBP100m of revenue in 2020 from virtual and
hybrid events, with further growth targeted in 2021. In addition,
our belief in the power and value of data is being accelerated
through Iris, a centralised platform for collating, managing and
curating all our customer data across B2B events and digital
services;
-- Board update: John Rishton confirmed as next Chair of
Informa, effective from the AGM in June, bringing significant
business and Board experience to the role. Gill Whitehead confirmed
as Chair of Audit and Group Chief Operating Officer, Patrick
Martell, appointed to the Board.
Stephen A. Carter , Group Chief Executive, Informa PLC, said:
"The strength and performance of Informa's subscriptions businesses,
combined with actions undertaken in 2020 to protect and preserve
our brands and customer relationships in B2B Events, are delivering
continuing Stability and Security in 2021, in what will be the
year of transition."
He added: "This Transition Year will be defined by continued strength
and improving growth in our subscriptions-led businesses, further
growth in B2B digital services and a progressive reopening of
physical events, led by Mainland China and North America, which
will ensure we deliver our revenue commitments for 2021, and remain
cashflow positive throughout."
He concluded: "The experience of COVID-19 has underscored the
value of market specialisation and the power of data and applied
technologies for the benefit of our specialist market customers,
all of which will underpin a period of Revitalisation and Growth
through 2022-2024."
2020 Key Financial Highlights
Financial results reflect the strength and resilience of
Informa's subscription-led businesses and the significant impact of
COVID-19 on the Group's physical events portfolio:
-- Statutory Group Revenue: GBP1,660.8m (2019: GBP2,890.3m),
reflecting strength in Subscriptions-led businesses and the reality
of COVID-19 disruption to physical B2B events businesses,
accompanied by an active and extended Postponement Programme;
-- Adjusted Operating Profit(1) : GBP267.8m (2019: GBP933.1m),
with more than GBP400m of direct savings to adjusted operating
profit and GBP200m+ of annualised indirect savings delivered by the
end of 2020;
-- Statutory Operating Loss: Full-year accounting loss of
GBP880.4m (2019 profit: GBP538.1m), including one-off COVID-19
non-cash impairment of goodwill (GBP592.9m) and one-off COVID-19
costs (GBP52.6m), as well as traditional non-cash intangible
amortisation (GBP291.8m);
-- Cash Flow(1) : Positive operating cash flow(1) of GBP230.8m
(2019: GBP965.4m), with debt restructuring and rescheduling, and
one-off COVID-19 costs resulting in free cash outflow of
GBP153.9m;
-- Net Debt:(1) Reduction to GBP1,756.7m before leases (2019:
GBP2356.3m) and GBP2,029.6m including leases (2019: GBP2,657.6m),
reflecting positive operating cash flow and addition of fresh
capital; all financial covenants removed from capital
structure.
Faster Forward on ESG in 2020
Despite the upheaval of the last year, Informa continued to
develop and deliver FasterForward, our five-year programme to
become a sustainable, positive impact business:
-- Faster to Zero: Certified as a Carbon Neutral Company for the
first time and Science-Based Targets re-confirmed at more ambitious
levels to limit global warming to less than 1.5deg by 2030;
-- Sustainability Inside: Informa Sustainable Events Management
framework established; more than 100 brands assessed and advised on
depth and quality of sustainability content;
-- Impact Multiplier: New Open Research content programmes from
Taylor & Francis and Global Learning Scholarship launched for
scientists from low income backgrounds by Informa Connect;
-- Industry recognition: Third consecutive year in the Dow Jones
Sustainability Index, scoring in the 99th percentile, A- score in
the Carbon Disclosure Project and AA MSCI ESG rating.
(1) In this report we refer to non-statutory measures including
underlying results, as defined in the Financial Review on page 9
and Glossary on page 50.
Enquiries
Stephen A. Carter, Group Chief Executive +44 (0) 20 7017 5771
Gareth Wright, Group Finance Director +44 (0) 20 7017 7096
Richard Menzies-Gow, Director of IR
& Communications +44 (0) 20 3377 3445
Tim Burt / Zoë Watt - Teneo +44 (0) 20 7240 2486
----------------------------------------- --------------------
2020 Financial Summary
2020 2019 Reported Underlying(1)
GBPm GBPm % %
---------------------------------------------------------- -------------- ---------- ----------- ------------------
Revenue 1,660.8 2,890.3 (42.5) (41.0)
Statutory operating (loss)/profit (880.4) 538.1 n/a
Adjusted operating profit(2) 267.8 933.1 (71.3) (70.8)
Adjusted operating margin (%)(2) 16.1 32.3
Operating cash flow(2) 230.8 965.4 (76.1)
Statutory (loss)/profit before tax (1,139.7) 318.7 n/a
Adjusted profit before tax(2) 170.4 821.4 (79.3)
Statutory diluted earnings per share (p) (73.4) 17.8 n/a
Adjusted diluted earnings per share (p)(2) 9.9 51.0 (80.6)
Dividend per share (p) n/a 7.5 n/a
Free cash flow(2) (153.9) 722.1 n/a
Net debt (inc IFRS 16)(2) 2,029.6 2,657.6 (23.6)
---------------------------------------------------------- -------------- ---------- ----------- ------------------
2020 Divisional Highlights 2020 2019 Reported Underlying(1)
GBPm GBPm % %
------------------------------------- -------- ------- --------- --------------
Informa Markets
Revenue 524.4 1437.7 (63.5) (62.7)
Statutory operating (loss)/profit (597.4) 244.4 n/a
Adjusted operating profit(2) (25.7) 490.6 n/a n/a
Adjusted operating margin(2) (%) n/a 34.1
------------------------------------- -------- ------- --------- --------------
Informa Connect
Revenue 124.2 286.1 (56.6) (55.1)
Statutory operating (loss)/profit (175.8) 22.2 n/a
Adjusted operating (loss)/profit(2) (23.6) 46.6 n/a n/a
Adjusted operating margin(2) (%) n/a 16.3
------------------------------------- -------- ------- --------- --------------
Informa Tech
Revenue 150.9 256.2 (41.1) (45.9)
Statutory operating (loss)/profit (316.7) 36.9 n/a
Adjusted operating (loss)/profit(2) (1.9) 71.4 n/a n/a
Adjusted operating margin(2) (%) n/a 27.9
------------------------------------- -------- ------- --------- --------------
Informa Intelligence
Revenue 305.3 350.7 (12.9) 1.8
Statutory operating profit 63.4 72.0 (11.9)
Adjusted operating profit(2) 103.0 107.3 (4.0) 4.7
Adjusted operating margin(2) (%) 33.7 30.6
------------------------------------- -------- ------- --------- --------------
Taylor & Francis
Revenue 556.0 559.6 (0.6) (0.2)
Statutory operating profit 146.1 162.6 (10.1)
Adjusted operating profit(2) 216.0 217.2 (0.6) 1.3
Adjusted operating margin(2) (%) 38.8 38.8
------------------------------------- -------- ------- --------- --------------
(1) In this document we refer to Underlying and Reported
results. Underlying figures are adjusted for acquisitions and
disposals, the phasing of events, including biennials, the impact
of changes from new accounting standards and accounting policy
changes, and the effects of currency by adjusting the current year
and prior year amounts to use consistent exchange rates. Phasing
and biennial adjustments relate to the alignment of comparative
period amounts to the timing of events in the current year. Where
an event originally scheduled for 2020 was either cancelled or
postponed there was an adverse impact on 2020 underlying growth as
no adjustment was made for these in the calculation. The results
from acquisitions are included on a pro-forma basis from the first
day of ownership in the comparative period. Disposals are similarly
adjusted on a pro-forma basis to exclude results in the comparative
period from the date of disposal. Alternative performance measures
are detailed in the Glossary.
(2) In this document we also refer to Statutory and Adjusted
results, as well as other non-statutory financial measures.
Adjusted results are prepared to provide an alternative measure to
explain the Group's performance. Adjusted results exclude adjusting
items as set out in Note 7 to the Financial Statements. Operating
cash flow, free cash flow, net debt and other non-statutory
measures are discussed in the Financial Review and the
Glossary.
Trading Outlook
From Continuing Stability & Security in 2021 to
Revitalisation & Growth in 2022-2024
Informa's commitment to long-term value and our focus on acting
early and decisively from the start of the COVID-19 pandemic, has
enabled the Group to enter 2021 with Stability and Security
embedded in our costs and financing, in our customer relationships
and, critically, across our Colleague communities.
We view 2021 as the transition year, with continued growth in
both our Subscriptions-led businesses and further expansion in B2B
digital services, supported by a progressive return in B2B physical
events, as COVID-19 restrictions are steadily relaxed and customer
confidence gradually rebuilds.
Our minimum commitment through the 2021 transition year is to
deliver baseline revenues of GBP1.7bn and remain cashflow positive
throughout, as we outlined at our half year results. This is a
similar revenue outcome to 2020, albeit 2020 had the benefit of 2-3
months of full trading in our B2B Events businesses prior to COVID
lockdown, contributing c.GBP275m of the 2020 revenue outcome.
The extent of any further revenue growth will be dependent on
the pace and scale of return of physical events outside of Mainland
China, which we will update on when we have a clearer view by the
half-year.
Our priority remains managing our brands and businesses for the
long-term, with a focus on ensuring the Group is well placed to
make the most of a period of Revitalisation and Growth through
2022-2024.
Continuing strength in Subscriptions-led businesses
Our subscriptions-led businesses continue to deliver strong
performances, with improving levels of growth in the first quarter
of 2021, in what is an important period for renewals.
In Taylor & Francis, the COVID-19 pandemic has underscored
the importance of verified science and research, as well as the
increasing value of speed-to-market for article submissions, the
quality of independent peer review and discoverability of content.
In recent years we have been modernising our business and shifting
focus to meet these demands, investing in master data management
and digital infrastructure, as well as improved customer workflows
and accelerated new product development. This has included further
expansion in Open Research, with more than 20,000 open access
articles published in 2020, an increase of +100% over four
years.
Our business continues to develop, both in products and services
and, therefore, in the mix and quality of revenues. We are
committed to delivering positive underlying revenue growth in 2021,
despite COVID-19 restrictions continuing to disrupt some university
campuses. This is underpinned by continued strong renewal rates for
digital subscriptions, the successful completion of a range of read
and publish agreements and a pipeline of new products across
journals, open research, advanced learning and academic
services.
In Informa Intelligence, over recent years, through a
combination of operational fitness, consistent investment and
portfolio focus, we have rebuilt this business from a disparate
collection of assets into a product, data and technology-led
business, focused on three core markets: Pharma (including clinical
trials intelligence and Medtech market data), Finance (including
mortgage pricing intelligence for US banks and international fund
flow data) and Maritime (including real-time tracking of global
shipping and cargo). This has included consistent investment in
technology and product management, strengthening our product mix
and improving customer value in the three specialist markets we
serve.
This strategy has delivered for customers and thereafter in
financial performance, progressing from four years of shrinking
revenues to consistent underlying growth, robust margins and strong
cash flows, as well as high levels of customer engagement, 90%+
renewal rates and positive annualised contract values.
Having established consistency in performance and forward
visibility, we are now actively pursuing additional product and
service development to unlock further growth. In Pharma
Intelligence, over recent years we have developed real strength and
depth in specialist data and intelligence for clinical trials
through Citeline and its portfolio of specialist brands. This
strong market position, when combined with last year's addition of
TrialScope, which has particular strength in reporting compliance
for clinical trials, has enabled us to further develop our offer in
the adjacent and growing market for patient recruitment and
retention.
Similarly, in Financial Intelligence, through FBX we have
developed a strong position in competitive intelligence and data
solutions for retail banks in mortgage products and digital
banking. Our consistent performance has led us to pursue a value
partnership with private equity group Inflexion, to potentially
combine FBX with Novantas and further expand our customer
proposition, including in consumer deposits.
We are targeting a return to pre-COVID performance levels in
Informa Intelligence this year, with underlying revenue growth of
4%+, whilst retaining our long-term commitment to 5%+ underlying
growth per annum.
Specialist B2B Events and Digital Services
Across Informa Markets, Informa Connect and Informa Tech, our
customer research confirms the long-term product and service value
of our physical B2B brands for those customers seeking to launch
products and meet their customers, suppliers and distributors, at
scale, efficiently. This has been evidenced in Mainland China, and
in both forward commitments and low levels of refund requests in
other regions.
We are treating 2021 as The Transition Year, with activity
levels dependent upon the pace and scale of re-opening of physical
events, which understandably is varying by region and customer
market. Our early decision last September to extend our Events
Postponement Programme to late Spring/early Summer 2021, is
providing us with greater flexibility to secure permissions for
events.
Encouragingly, in the US, we have seen a progressive return of
B2B physical events on a state-by-state basis. In February we ran
two of our five US B2B mid-market and luxury super yachting brands
(Palm Beach International Boat Show, St Petersburg Power &
Sailboat Show). In Orlando, within our Fashion portfolio, we worked
with industry partners to run a targeted event built around our
Magic brand to gauge customer confidence and trial onsite rapid
testing as part of our AllSecure safety standard. Application
approvals have now been received for the return of three major B2B
marketplace brands in Las Vegas from June within Real Estate &
Construction (World of Concrete, TISE, Waste Expo). The state of
California is now confirmed to reopen from mid-June and we are in
discussions with a series of other state-based locations.
In our second largest market, Mainland China, we have now run 45
B2B events post-COVID, including 13 of this year's Top 30
international brands. Six of these events delivered revenues in
line or ahead of 2019 levels, with significant domestic and
regional participation.
Elsewhere, the return of physical B2B events is more phased. We
have seen or have now confirmed a return to physical B2B events in
Australia, Dubai, Egypt, Japan, Malaysia, Taiwan, Thailand and the
UK, amongst others. There remains continued uncertainty over the
pace and rate of return in Continental Europe, where we generated
less than 15% of Events revenue in 2019.
Building a virtual and hybrid platform
Pre-COVID-19 we were investing in a range of digital services
that complement our B2B Event brands, including specialist content
and data, digital directories and marketing services. 2020 saw us
expand significantly into virtual and hybrid events, delivering
more than 500 products across 15+ customer markets, with attendees
from around 120 countries. We are building on this experience and
customer feedback in 2021, partnering with Swapcard and Totem to
accelerate core platform development and working with a range of
other key partners to enhance functionality and capabilities in
video search, virtual matchmaking, online lead qualification,
product specification and digital registrations, amongst
others.
B2B customer insight, knowledge and service delivery
The increasing use of technology in and around all our physical
events, as well as to stage and deliver virtual events and other
digital services, has further enhanced the quantity and quality of
customer data we generate. Therefore, we are building a unified,
centralised platform for collating, curating and managing all our
B2B customer profile and behavioural data, with appropriate
consents. The increasing importance and richness of this data
engine has led us to establish a separate, non-trading operating
unit within Informa called Iris. Greater rigour around the volume
and accuracy of customer data we collect and the development of
consistent taxonomies across our B2B Events and Digital Services
portfolio will help us gain deeper customer insights and market
knowledge, enabling us to deliver higher quality connections and
improved customer value, as well as the potential, over time, to
develop a further range of data solutions.
Continuing Stability & Security
Informa's long stated strategy of Market Specialisation, with an
ambition to build depth and international reach in a series of
attractive specialist markets through our subscription businesses
and portfolio of B2B brands, has served us well over the last year,
keeping us close to our markets and customers, whilst enabling us
to focus on building Stability and Security more broadly across the
Group.
Stability and Security
From the outset of the COVID-19 pandemic, we adopted an approach
that prioritised our Colleagues and Customers, whilst focusing on
preserving and protecting the long-term value of our Brands and
Businesses.
Stability and Security has been delivered through our COVID-19
Action Plan, a flexible programme that enabled the Group to respond
quickly to the fast-moving environment and, where possible, stay
ahead of the effect of the pandemic for our Colleagues, businesses
and markets.
Our Action Plan has been built on five key pillars, with the
initial focus on securing and supporting our talent, without the
need to access UK Government furlough, funding or other support
schemes. This included a wide range of Colleague initiatives and
programmes:
Supporting Colleagues
-- The Informa Colleague Support Fund, initially funded by
Senior Management Salary Sacrifice, providing direct assistance to
those Colleagues and their families facing financial hardship due
to COVID-19;
-- Introduction of unlimited volunteering, enabling Colleagues
to support their local communities;
-- Flexible working options, including a sabbatical programme and part-week flexi-work offer;
-- An additional week's vacation allowance in 2022 to support
holidays and re-connecting with family;
-- A rapid and seamless shift to remote working, with full tech
and home office support and funding;
-- Bio-secure offices, as soon as permitted, to support Colleagues unable to work at home;
-- Enhanced pastoral support, Colleague assistance and healthcare funded wellbeing services;
-- A Balanced Working Programme, providing greater working
flexibility for Colleagues in the future;
-- Multi-platform communication and engagement, with direct
management access, regular Colleague surveys and detailed guidance
on directives and safety measures in countries where we
operate.
Operating Flexibility
-- An extended Postponement Programme through to late
Spring/early Summer 2021, rescheduling more than GBP300m of events
revenue to later in the year;
-- Accelerated development of virtual events and connected
digital services, with more than 500 virtual events run effectively
in 2020;
-- The AllSecure safety standard, providing a detailed set of
measures and recommendations for ensuring the highest standards of
safety and hygiene at events;
-- Localisation of selected Event brands to increase customer
participation and forward commitment.
Effective Cost & Cash Management
-- Effective cost recovery at postponed/cancelled events,
including venues, general contractors and marketing, with more than
GBP400m of direct savings to adjusted operating profit by the end
of 2020;
-- Annualised net indirect cost savings of GBP200m+ by the end of 2020, including through:
-- Removal of discretionary expenditure, such as travel and professional fees;
-- Postponement of recruitment and reward reviews in affected businesses;
-- Voluntary salary sacrifice by Senior Management and the Board
through first full lockdown period;
-- Launch of sabbatical programmes, Flexi-work offers and
voluntary severance packages, alongside some targeted redundancies,
largely in North America and EMEA;
-- Postponement of all non-essential projects and capital expenditure;
-- Review and renegotiation of major supplier contracts and
review of all contractors and consultants;
-- Introduction of Balanced Working Programme to provide greater
working flexibility for Colleagues; and improve the utilisation and
efficiency of our real estate portfolio;
-- Enhanced controls and cash management to secure liquidity and strengthen balance sheet.
Championing Customers
-- Targeted funds and support lines for customers affected by
the pandemic, including major fund to support SMEs within the
Natural Products Expo community;
-- Accelerated publication of virus-related research by Taylor & Francis and F1000 platform;
-- Open Access publication of all critical COVID-19 related research by Taylor & Francis;
-- An open access portal for clinical trial data and information
resources by Pharma Intelligence;
-- Full maintenance of service levels, product quality and
customer support throughout the pandemic.
Stable & Secure Financing
-- Access secured to short-term GBP750m Surplus Credit Facility in March 2020;
-- Oversubscribed equity addition to raise GBP1bn of fresh
capital and strengthen financing flexibility;
-- Issue of GBP640m Euro Bonds and GBP150m follow-on Sterling Bonds with five-year maturities;
-- Cancellation of GBP750m Surplus Credit Facility and repayment
of GBP1.1bn US Private Placement loan notes;
-- Removal of all financial covenants from balance sheet and
extension of debt maturities to 2023;
-- Positive cash flow in Q1 2021 and beyond; available liquidity of over GBP1bn.
Unlocking Further Growth in Specialist Data and Intelligence
One of the foundations of Stability and Security has been the
strength and resilience of our Subscriptions-led businesses. In
Informa Intelligence, this performance is the result of an
extensive restructuring and organic investment programme that
started with the Growth Acceleration Plan when the business was
reoriented around its customers and markets. Since then, the
business has been transformed from a disparate collection of
independent brands into a coherent and consistently performing
subscriptions-led business focused on three core markets: Pharma,
Finance and Maritime.
This strategy has delivered consistent improvement in the level
and quality of growth and, as we move to the other side of
COVID-19, we see an opportunity to extend this further and move
closer towards our long-term ambition of 5%+ annual underlying
revenue growth.
One of the ways we are supporting this ambition is by
identifying opportunities to unlock growth in market segments
adjacent to where we already have strong brands and customer
relationships. Some of these are accessible through organic
investment and others through value partnerships or targeted
addition.
Unlocking growth in Patient Recruitment and Patient
Retention
In Pharma Intelligence, over time we have built a strong
position in the clinical trials intelligence market through
Citeline and its suite of data and workflow brands such as
TrialTrove, Sitetrove and Skipta. The addition of TrialScope to our
portfolio last year reinforced our position in clinical trials by
providing customers with workflow solutions that address their
needs around data reporting compliance. This is a new product
segment for our business that sits naturally alongside some of our
other clinical trials products, deepening the connection with
customers and underpinning retention rates. However, the
combination of TrialScope with Skipta, our online platform for
medical communities, has also enabled us to enter the adjacent
market for patient recruitment and patient retention. This is a
growing area, as pharma companies seek to minimise inefficiencies
across the clinical trials process, where we have a long-standing
market position.
New Value Partnership to accelerate growth in information
services within US Retail Banking
Similarly, within Financial Intelligence, where we have market
positions in retail banking intelligence, fund flow data and
specialist fixed income information, Informa is pursuing a Value
Partnership with mid-market private equity firm, Inflexion. This
would see us combine our existing US-based Financial Intelligence
business, FBX, with US-based financial data services company,
Novantas. The combination would extend our current product offering
and unlock further growth opportunities in the provision of
specialist information services to US retail banking customers. FBX
has a leading position in competitive intelligence and benchmarking
of real estate lending products and pricing. Our strategy has been
to expand this range of services whilst building a position in the
adjacent market for depository products.
Combining FBX and Novantas would accelerate this ambition,
establishing a leading position in the provision of retail banking
information services in the US, with strength across mortgages,
consumer lending, consumer deposits and digital banking.
The value partnership structure would see a new business created
that combines the brands and operations of FBX and Novantas. This
combination would involve no cash contribution from Informa and,
hence, it is expected it would be credit neutral from a Group
perspective. Informa would retain a majority stake in the combined
business, with Inflexion and the Novantas shareholders investing
alongside Informa to retain significant minority stakes.
Board Update
In January, we confirmed that John Rishton had been appointed as
the next Chair of the Informa Board, taking over from Derek Mapp at
the Annual General Meeting in June. John brings extensive business
and board experience to the role, most recently as Chair of Audit
at Unilever and Chair-Elect at Serco.
Having been a Non-Executive Director of Informa since 2016 and
serving as Chair of the Audit Committee, John also has a good
understanding of Informa's business model and culture, ensuring a
smooth handover and strong continuity around the Board table.
In June, Gill Whitehead, who has served on Informa's Audit
Committee over the last year, will take over from John Rishton as
Chair of the Audit Committee.
Separately, in March, Patrick Martell was appointed to the Board
as an Executive Director, having successfully led Informa
Intelligence since 2014, helping to transform it from a disparate
collection of brands with shrinking revenues into an international
digital subscription business delivering consistent underlying
growth. Patrick also led the integration of Penton Information
Services in 2016/17 and, in his current role as Chief Operating
Officer, is responsible for driving digital product and service
acceleration more broadly.
Financial Review
Income Statement
The 2020 financial year was dominated by the impact of COVID-19,
which led to enforced lockdown and major travel restrictions in
most countries around the world for much of the year, severely
disrupting many industries. At Informa, we demonstrated resilience
and strength in our subscription-led businesses and the power of
our data and relationships in our specialist B2B media, marketing
services and virtual events activities. Our physical events
portfolio started the year positively before being severely
disrupted by COVID-19. Our response was to launch a major Cost
Management Programme, a range of financing initiatives and an
extended Postponement Programme, including the launch of more than
500 virtual events. Our COVID-19 Action Plan helped to limit the
overall impact on the Group's financial performance but revenues
and profits were significantly lower than 2019.
Adjusted Adjusting Statutory Adjusted Adjusting Statutory
results items results results items results
2020 2020 2020 2019 2019 2019
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------- -------------- --------------- -------------- -------------- --------------- --------------
Revenue 1,660.8 - 1,660.8 2,890.3 - 2,890.3
-------------------- -------------- --------------- -------------- -------------- --------------- --------------
Operating
profit/(loss) 267.8 (1,148.2) (880.4) 933.1 (395.0) 538.1
(Loss)/profit on
disposal - (8.4) (8.4) - (95.4) (95.4)
Net finance costs (97.4) (153.5) (250.9) (111.7) (12.3) (124.0)
-------------------- -------------- --------------- -------------- -------------- --------------- --------------
Profit/(loss)
before tax 170.4 (1,310.1) (1,139.7) 821.4 (502.7) 318.7
Tax(charge)/credit (25.6) 127.7 102.1 (156.1) 83.5 (72.6)
-------------------- -------------- --------------- -------------- -------------- --------------- --------------
Profit/(loss) for
the period 144.8 (1,182.4) (1,037.6) 665.3 (419.2) 246.1
-------------------- -------------- --------------- -------------- -------------- --------------- --------------
Adjusted operating
margin 16.1% 32.3%
Adjusted diluted
EPS (1) 9.9p (73.1)p 51.0p 17.8p
-------------------- -------------- --------------- -------------- -------------- --------------- --------------
1. 2019 Restated for share placement
Statutory income statement results
The disruption to our physical events portfolio led to a 42.5%
decrease in reported revenue to GBP1,660.8m.
The Group reported a statutory operating loss of GBP880.4m
compared to an operating profit of GBP538.1m for the year ended 31
December 2019. This reflects the reduction in revenue as well as an
increase in adjusting items, with a significant proportion relating
to a non-cash goodwill impairment of GBP592.9m.
This impairment reflected the impact of COVID-19 on the
long-term trading outlook for our physical events portfolio within
Informa Markets, Informa Connect and Informa Tech. The impairment
review was based on forecasts as at 30 June, when the continued
inability to run physical events in our largest market, North
America, and most other locations, was expected to significantly
impact the full-year outcome in 2020, before the assumption of a
gradual recovery over the next few years.
For modelling purposes, it was assumed that the Group returns to
2019 levels of operating cash flow by 2025. This resulted in a
non-cash impairment of GBP231.1m for Informa Markets, GBP105.9m for
Informa Connect and GBP255.9m for Informa Tech.
Since 30 June, the expected outlook in Mainland China has
improved with physical events operating throughout the second half
of 2020 and in 2021. In addition, a number of other regions,
including the US, are expected to gradually see physical events
return in the second half of 2021, as the progressive rollout of
COVID-19 vaccines leads to a relaxation in restrictions and
permissions to hold face-to-face events return. The annual
impairment review performed at 31 December 2020 showed no further
impairment being required.
Statutory net finance costs increased by GBP126.9m to GBP250.9m,
comprising GBP266.2m of finance costs and GBP15.3m of finance
income. The main driver of the increase was one-off costs
associated with the restructuring and rescheduling of debt.
The combination of all these factors led to a statutory loss
before tax of GBP1,139.7m, compared with a profit before tax of
GBP318.7m in the prior year. This statutory loss led to a tax
credit for the year of GBP102.1m, compared with a tax charge of
GBP72.6m in the prior year.
The statutory operating loss flowed through to a statutory
diluted loss per share of 73.4p, compared to an earnings per share
of 17.8p for the year ended 31 December 2019. The difference
primarily reflected the impact of the COVID-19 pandemic on trading
and the related non-cash impairment charge, partially offset by the
favourable tax charge for the year. There was also a 155.5m
increase in the weighted average number of shares used for
calculating diluted earnings per share compared with 2019,
reflecting the impact of the equity addition in April/May 2020,
which saw 250.3m new shares being issued.
Measurement and Adjustments
In addition to statutory results, adjusted results are prepared
for the Income Statement. These include adjusted operating profit,
adjusted diluted earnings per share and other underlying measures.
A full definition of these metrics can be found in the glossary of
terms on page 49. The Divisional table on page 12 provides a
reconciliation between statutory operating profit and adjusted
operating profit by Division.
Underlying revenue and adjusted operating profit growth on an
underlying basis are reconciled to reported growth in the table
below. For the calculation of underlying growth, where an event
originally scheduled for 2020 was either cancelled or postponed to
2021, no adjustment to 2019 revenue was made.
Underlying Phasing Acquisitions Currency Reported
(decline)/ and other and disposals change (decline)/
growth items growth
2020
Revenue (41.0%) (0.6%) (0.6%) (0.3%) (42.5%)
Adjusted operating
profit (70.8%) (0.8%) (0.2%) 0.5% (71.3%)
--------------------- ------------ ----------- --------------- --------- ------------
2019
Revenue 3.5% 0.2% 15.3% 3.0% 22.0%
Adjusted operating
profit 6.5% 2.1% 12.1% 6.8% 27.5%
--------------------- ------------ ----------- --------------- --------- ------------
Adjusting Items
The items below have been excluded from adjusted results. The
total adjusting items in the period increased to GBP1,148.2m (2019:
GBP395.0m), largely due to the non-cash impairment of goodwill,
one-off COVID-19-related onerous contract costs and one-off costs
relating to the Group's voluntary severance programme and some
targeted redundancies.
2020 2019
GBPm GBPm
Intangible amortisation and impairment:
Intangible asset amortisation (1) 291.8 312.4
Impairment - goodwill 592.9 0.9
Impairment - acquisition-related intangible assets 38.5 3.8
Impairment - right of use assets 36.1 4.6
Impairment - property and equipment 8.8 -
Impairment - investments 3.9 -
Acquisition
costs 2.8 3.3
Integration
costs 46.3 56.4
Redundancy and reorganisation costs 47.6 6.4
Vacant property and finance lease modification costs 30.0 2.2
Onerous contracts associated with COVID-19 47.3 -
Other items associated with COVID-19 5.3 -
Subsequent remeasurement of contingent consideration (3.1) 3.2
VAT
charges - 1.8
===================================================== ======= ======
Adjusting items in operating profit 1,148.2 395.0
Loss on disposal businesses 8.4 95.4
Finance
income (8.3) (1.2)
Finance
costs 161.8 13.5
===================================================== ======= ======
Adjusting items in (loss)/profit before tax 1,310.1 502.7
Tax related to adjusting items (127.7) (83.5)
===================================================== ======= ======
Adjusting items in (loss)/profit for the year 1,182.4 419.2
===================================================== ======= ======
1. Excludes acquired intangible product development and software
amortisation
Intangible amortisation of GBP291.8m relates to the historical
additions of book lists and journal titles, acquired databases,
customer and attendee relationships and brands related to
exhibitions, events and conferences. As it relates to acquisitions,
it is not treated as an ordinary cost. By contrast, intangible
asset amortisation arising from software assets and product
development is treated as an ordinary cost in the calculation of
operating profit, so is not treated as an adjusting item.
Non-cash impairment of goodwill of GBP592.9m arises from the
impact of the COVID-19 pandemic on the carrying value of our
physical events portfolio as noted in the Statutory income
statement results section. See Note 13 to the Consolidated
Financial Statements for further details.
Impairment of acquisition-related intangibles of GBP38.5m
reflects impairment for assets where businesses are no longer
expected to trade or where the impairment review has shown the
carrying value was not supportable.
Impairment of right of use assets of GBP36.1m, together with the
vacant property and finance lease modification costs of GBP30.8m
arose from our Balanced Working Programme and the decision to
permanently vacate a number of office properties from June
2020.
Integration costs of GBP46.3m include GBP27.5m relating to the
acquisition of UBM, consisting mainly of process, property and
colleague-related reorganisation costs. The remaining GBP18.8m of
integration costs includes one-off costs relating to the addition
of IHS Markit's TMT research and intelligence portfolio.
Redundancy and reorganisation costs of GBP47.6m include the
one-off costs relating to our voluntary and targeted severance
programmes that were undertaken in the second half of 2020.
Onerous contracts associated with the pandemic were GBP47.3m
through the period, arising from costs for events which were
cancelled or postponed due to COVID-19, where the costs could not
be recovered, typically related to venues and event set-up. The
other items associated with COVID-19 of GBP5.3m are one-off
indirect costs largely relating to contractual commitments to the
owner of an event that was cancelled.
The table below shows the results and adjusting items by
Division, highlighting a robust performance by our subscription-led
businesses, Informa Intelligence and Taylor & Francis, offset
by the impact of COVID-19 on physical events at Informa Markets,
Informa Connect and Informa Tech.
Informa Informa Informa Informa Taylor Group
Markets Connect Tech Intelligence & Francis GBPm
GBPm GBPm GBPm GBPm GBPm
------------------------------------------ -------- -------- -------- ------------- ---------- -------
Revenue 524.4 124.2 150.9 305.3 556.0 1,660.8
Underlying revenue (decline)/growth (62.7%) (55.1%) (45.9%) 1.8% (0.2%) (41.0%)
------------------------------------------ -------- -------- -------- ------------- ---------- -------
Statutory operating (loss)/profit (597.4) (175.8) (316.7) 63.4 146.1 (880.4)
Add
back:
Intangible asset amortisation
(1) 185.7 16.8 20.7 16.6 52.0 291.8
Impairment of goodwill 231.1 105.9 255.9 - - 592.9
Impairment - acquisition-related
intangible assets 24.1 4.5 6.2 2.7 1.0 38.5
Impairment - right of use assets 15.0 5.3 2.5 7.0 6.3 36.1
Impairment - property and equipment 4.2 1.3 0.8 1.0 1.5 8.8
Impairment - investments - 2.5 - 1.4 - 3.9
Acquisition
costs 0.9 - 0.4 1.3 0.2 2.8
Integration
costs 24.0 1.6 16.9 3.0 0.8 46.3
Redundancy and reorganisation 26.9 6.4 9.6 2.9 1.8 47.6
Vacant property & finance lease
modification costs 12.6 5.3 2.2 3.6 6.3 30.0
Onerous contracts associated with
COVID-19 41.0 3.3 2.9 0.1 - 47.3
One-off costs associated with
COVID-19 5.3 - - - - 5.3
Remeasurement of contingent consideration 0.9 (0.7) (3.3) - - (3.1)
------------------------------------------ -------- -------- -------- ------------- ---------- -------
Adjusted operating (loss)/profit (25.7) (23.6) (1.9) 103.0 216.0 267.8
Underlying adjusted operating
profit (decline)/growth (70.8%) (106.7%) (153.4%) (103.3%) 4.7% 1.3%
========================================== ======== ======== ======== ============= ========== =======
1. Intangible asset amortisation is in respect of acquired
intangibles, and excludes amortisation of software and product
development
Adjusted Net Finance Costs
Adjusted net finance costs, consisting of the interest costs on
our US private placement loan notes and our corporate bonds and
bank borrowings, decreased by GBP14.3m in the year to GBP97.4m. The
decrease primarily relates to lower interest rates following the
refinancing of a US dollar bond and certain private placement notes
in October 2019 and February 2020.
Adjusting items for finance costs of GBP161.8m and finance
income of GBP8.3m primarily relate to our COVID-19 Financing Action
Plan, which removed financial covenants from our balance sheet,
pushed our earliest debt maturity out to 2023 and improved
available liquidity to north of GBP1bn. The costs and income
associated with this restructuring and rescheduling of debt, which
included make-whole interest payments to debt holders, was
GBP161.7m.
The reconciliation of adjusted net finance costs to the
statutory finance costs and investment income is as follows:
2020 2019
GBPm GBPm
Finance
income (15.3) (10.1)
Finance
costs 266.2 134.1
Add back: Adjusting items relating to finance income 8.3 1.2
Add back: Adjusting items relating to finance costs (161.8) (13.5)
===================================================== ======= ======
Adjusted net finance costs 97.4 111.7
===================================================== ======= ======
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.
The Group's effective tax rate reflects the blend of tax rates
and profits in the jurisdictions in which we operate. In 2020, the
adjusted effective tax rate was 15.0% (2019: 19%).
The calculation of the adjusted effective tax rate is as
follows:
2020 2019
GBPm GBPm
--------------------------- ----- -----
Adjusted tax charge 25.6 156.1
Adjusted profit before tax 170.4 821.4
=========================== ===== =====
Adjusted tax rate % 15.0% 19.0%
=========================== ===== =====
Tax payments
During 2020, the Group paid GBP32.9m (2019: GBP100.6m) of
corporation and similar taxes on profits, with the year-on-year
reduction reflecting the lower profit before tax reported in the
year.
A breakdown of the main geographies in which the Group paid tax
is as follows:
2020 2019
GBPm GBPm
UK 4.5 25.8
Continental
Europe 2.7 10.7
US 1.6 19.9
China 14.1 21.8
Rest of world 10.0 22.4
============== ===== =====
Total 32.9 100.6
============== ===== =====
The reconciliation of the adjusted tax charge to cash taxes paid
is as follows:
2020 2019
GBPm GBPm
Tax charge on adjusted profit before tax per Consolidated
Income Statement 25.6 156.1
Movement in deferred tax including tax losses 2.8 (27.1)
Net current tax credits in respect of adjusting items (3.0) (20.1)
Movement in provisions for uncertain tax positions (1.1) 4.3
Taxes paid in different year to charged 8.6 (12.6)
========================================================== ===== ======
Taxes paid per statutory cash flow 32.9 100.6
========================================================== ===== ======
At the end of 2020, the deferred tax assets relating to US and
UK tax losses were GBP124.9m (2019: GBP69.2m) and GBP42.3m (2019:
GBP9.5m) respectively. These are expected to be utilised against
future taxable profits.
Goodwill is not amortised as it is subject to impairment review,
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. Where this
benefit arises, it reduces the tax charge on adjusted profits.
The amortisation of intangible assets is considered an adjusting
item. Therefore, the GBP13.4m (2019: GBP14.4m) of current tax
credits taken in respect of the amortisation of intangible assets
is also treated as an adjusting item, and is therefore included in
the tax credits in respect of adjusting items.
Tax contribution
The Group's total tax contribution, which comprises all material
taxes paid to, and collected on behalf of, governments globally was
GBP257.2m in 2020 (2019: GBP375.2m). The geographic split of taxes
paid by our businesses was as follows:
UK US Other Total
GBPm GBPm GBPm GBPm
Profit taxes borne 4.5 1.6 26.8 32.9
Employment taxes borne 20.1 18.9 8.1 47.1
Other
taxes 6.1 0.9 0.8 7.8
======================= ===== ===== ===== =====
Total tax contribution 30.7 21.4 35.7 87.8
======================= ===== ===== ===== =====
In addition to the above, in 2020 we collected taxes on behalf
of governments (e.g. employee taxes and sales taxes) amounting to
GBP169.4m (2019: GBP209.9m).
Earnings Per Share
Adjusted diluted earnings per share (EPS) decreased to 9.9p
(2019: 51.0p). This reflects the decrease in adjusted earnings to
GBP140.9m (2019: GBP644.7m), combined with a 12.8% increase in the
weighted average number of shares. In April, as part of our
COVID-19 Financing Action Plan, an equity addition led to the issue
of 250.3m new shares, priced at 400p per a share, a 4% discount to
the previous closing share price of 416.8p on 15 April 2020. The
weighted average number of shares for the prior year has been
restated to reflect the new shares issued, leading to a restatement
of EPS and dividends per share as well. The restated EPS figures
are detailed below.
An analysis of adjusted diluted EPS and statutory diluted EPS is
as follows:
2020 2019
GBPm GBPm
=================================================== ========= =======
Statutory (loss)/profit for the year (1,037.6) 246.1
--------------------------------------------------- --------- -------
Add back: Adjusting items in (loss)/profit for the
year 1.182.4 419.2
=================================================== ========= =======
Adjusted profit for the year 144.8 665.3
--------------------------------------------------- --------- -------
Non-controlling
interests (3.9) (20.6)
=================================================== ========= =======
Adjusted
earnings 140.9 644.7
=================================================== ========= =======
Weighted average number of shares used in adjusted
diluted EPS (m) 1,426.5 1,264.2
=================================================== ========= =======
Adjusted diluted EPS (p) 9.9p 51.0p
=================================================== ========= =======
2020 2019
GBPm GBPm
=================================================== ========= =======
Statutory (loss)/profit for the year (1,037.6) 246.1
--------------------------------------------------- --------- -------
Non-controlling interests (3.9) (20.6)
=================================================== ========= =======
Statutory Earnings (1,041.5) 225.5
=================================================== ========= =======
Weighted average number of shares used in diluted
EPS (m) 1,419.7 1,264.2
=================================================== ========= =======
Statutory diluted EPS (p) (73.4p) 17.8p
=================================================== ========= =======
Dividends
In April 2020, as part of the Group's response to the COVID-19
pandemic through our COVID-19 Action Plan, and following
consultation with shareholders, the Board announced the temporary
suspension of dividends, including the withdrawal of the 2019 final
dividend.
Currency Impact
One of the Group's strengths is its international reach and
balance, with colleagues and businesses located in most major
regions of the world. This means the Group generates revenues and
costs in a mixture of currencies, with particular exposure to the
US dollar, as well as some exposure to the Euro and the Chinese
Renminbi.
In 2020, approximately 63% (2019: 59%) of Group revenue was
received in USD or currencies pegged to USD, with 5% (2019: 7%)
received in Euro and around 9% (H1 2019: 8%) in Chinese
Renminbi.
Similarly, we incurred approximately 48% (2019: 53%) of our
costs in USD or currencies pegged to USD, with 2% (2019: 3%) in
Euro and around 7% (2019: 7%) in Chinese Renminbi.
Each one cent ($0.01) movement in the USD to GBP exchange rate
has a circa GBP8m (2019: circa GBP13m) impact on annual revenue,
and a circa GBP3m (2019: circa GBP5m) impact on annual adjusted
operating profit.
The following rates versus GBP were applied during the year:
2020 2019
=======
Closing Average Closing Average
rate rate rate rate
----------
US
dollar 1.37 1.29 1.32 1.28
Euro 1.11 1.13 1.17 1.14
Chinese
Renminbi 8.94 8.88 9.17 8.80
---------- ------- ------- ------- -------
Free Cash Flow
Cash generation remains a key priority and focus for the Group,
providing the funds and flexibility for paying down debt, future
organic and inorganic investment, and consistent shareholder
returns. Our businesses typically convert adjusted operating profit
into cash at an attractive rate, reflecting the relatively low
capital intensity of the Group. In 2020, absolute levels of
cashflow were significantly lower and conversion rates reflected
the impact of COVID-19 on our events-led businesses.
The following table reconciles statutory operating (loss)/profit
to operating cash flow and free cash flow. See the glossary of
terms for the definition of free cash flow and operating cash
flow.
2020 2019
GBPm GBPm
Statutory operating (loss)/profit (880.4) 538.1
Add back: Adjusting items 1,148.2 395.0
------------------------------------------------------ ------- -------
Adjusted operating profit 267.8 933.1
Depreciation of property and equipment 16.8 17.2
Depreciation of right of use assets 30.3 33.1
Software and product development amortisation 41.1 41.9
Share-based
payments 11.2 10.4
Loss on disposal of other assets 0.9 -
Adjusted share of joint venture and associate results (0.8) (1.5)
====================================================== ======= =======
Adjusted EBITDA (1) 367.3 1,034.2
Net capital expenditure (48.4) (49.8)
Working capital movement (2) (81.9) (13.6)
Pension deficit contributions (6.2) (5.4)
====================================================== ======= =======
Operating cash flow 230.8 965.4
Restructuring and reorganisation (35.6) (9.9)
Onerous contracts and one-off costs associated with
COVID-19 (44.6) -
Net interest (3) (271.6) (132.8)
Taxation (32.9) (100.6)
====================================================== ======= =======
Free cash flow (153.9) 722.1
====================================================== ======= =======
1. Adjusted EBITDA represents adjusted operating profit before
interest, tax, and non-cash items including depreciation and
amortisation
2. Working capital movement excludes movements on restructuring,
reorganisation, COVID-19 costs and acquisition and integration
accruals as the cash flow relating to these amounts is included
other lines in the free cash flow and reconciliation from free cash
flow to net funds flow. The variance between the working capital in
the Free Cash Flow and the Consolidated Cash Flow Statement is
driven by the non-cash movement on these items.
3. Amount includes GBP161.7m (2019: GBP13.5m) of make-whole
interest paid in respect of the early repayment of private
placement and bond debt
The decrease in cash generated compared with 2019 is largely
driven by the impact of COVID-19 on operating profit, together with
the one-off costs associated with COVID-19 and its adverse impact
on working capital movement. The calculation of operating and free
cash flow conversion is as follows:
Operating cash Free cash flow
flow conversion conversion
------------------ ----------------
2020 2019 2020 2019
GBPm GBPm GBPm GBPm
Operating cash flow/free cash flow 230.8 965.4 (153.9) 722.1
Adjusted operating profit 267.8 933.1 267.8 933.1
==================================== ======== ======== ========= =====
Operating cash flow conversion/Free
cash flow conversion 86.2% 103.5% (57.5%) 77.4%
==================================== ======== ======== ========= =====
Net capital expenditure was GBP48.4m (2019: GBP49.8m),
equivalent to 2.9% of 2020 revenue (2019: 1.7%).
The working capital outflow of GBP81.9m was GBP68.3m higher than
the GBP13.6m outflow in 2019, reflecting the impact of COVID-19 on
working capital phasing within the event-led businesses. This was
primarily driven by lower cash collections in the year due to the
cancellation of events in 2020 and, hence, lower levels of
rebooking. It also reflects a small amount of refunds paid to
customers in the year, where events were cancelled and lower
forward commitments to events scheduled for H1 2021, due to ongoing
COVID-19 uncertainty.
The Group continues to hold cash in advance of events, with
GBP466m of cash relating to future events and services held as at
31 December 2020. The strength of our brands and demand for our
products led to relatively few customers asking for refunds of cash
committed to events that were postponed or cancelled, with only
GBP102m requested during the year.
Net cash interest payments of GBP271.6m were GBP138.8m higher
than the prior year, largely reflecting the payments made to US
private placement note holders in November 2020, as part of the
restructuring and rescheduling of our debt. In 2020 borrowing fees
of GBP17.6m were paid relating to new financing facilities,
following the successful issuances in the Euro bond market for a
combined GBP790m and the increase in our revolving credit facility
(RCF) of GBP150m to total GBP1,050m.
The following table reconciles net cash inflow from operating
activities, as shown in the consolidated cash flow statement to
free cash flow:
2020 2019
GBPm GBPm
Net cash (outflow)/inflow from operating activities
per statutory cash flow (139.5) 719.6
Interest
received 5.7 5.5
Borrowing fees paid (17.6) -
Purchase of property and equipment (10.7) (17.5)
Purchase of intangible software assets (23.8) (25.3)
Product development cost additions (13.9) (7.0)
Add back: Acquisition and integration costs paid 45.9 46.8
==================================================== ======= ======
Free cash flow (153.9) 722.1
==================================================== ======= ======
Net cash from operating activities decreased by GBP859.1m to
record an outflow of GBP139.5m, principally driven by the reduction
in adjusted operating profit and the increased interest payments
associated with the restructuring and rescheduling of our debt.
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:
2020 2019
GBPm GBPm
Cash generated by operations per statutory cash flow 153.1 958.5
Capex
paid (48.4) (49.8)
Add back: Acquisition and integration costs paid 45.9 46.8
Add back: Restructuring and reorganisation costs
paid 35.6 9.9
Onerous contracts and one-off costs paid associated
with COVID 44.6 -
===================================================== ====== ======
Operating cash flow per free cash flow statement 230.8 965.4
===================================================== ====== ======
The following table reconciles free cash flow to net funds flow
and net debt, with net debt reducing by GBP628.0m to GBP2,029.6m
during the year ended 31 December 2020, primarily due to the net
receipt of GBP973.7m from the proceeds of the equity addition,
partly offset by the free cash outflow of GBP153.9m, acquisitions
investment of GBP176.3m and GBP59.9m unfavourable movement in
exchange rates, mainly driven by the movement in the USD to GBP
exchange rates.
2020 2019
GBPm GBPm
Free cash flow (153.9) 722.1
Acquisitions (176.3) (311.1)
Disposals 10.4 179.3
Dividends paid to shareholders (0.2) (280.0)
Dividends paid to non-controlling interests (13.6) (17.5)
Issuance of shares 973.7 -
Purchase of shares (1.3) (15.9)
=================================================== ========= =========
Net funds flow 638.8 276.9
Non-cash
movements 61.3 5.7
Foreign
exchange (59.9) 87.4
Net finance lease additions in the year1 (12.2) (16.5)
IFRS 16 leases at 1 January 2019 - (343.6)
IFRS 16 finance lease receivable at 1 January 2019 - 14.4
Net debt b/f (2,657.6) (2,681.9)
=================================================== ========= =========
Net
debt (2,029.6) (2,657.6)
=================================================== ========= =========
1. Amount excludes finance lease cash repayments or receipts
Financing and Leverage
Net debt was GBP2.0bn at 31 December 2020 (2019: GBP2.7bn), with
the year-on-year improvement reflecting positive funds flow,
supported by the equity addition in April/May. Unutilised committed
financing facilities relating to the Group's RCF were GBP1,050.0m
(2019: GBP843.1m). Combined with GBP299.4 of cash, this resulted in
available liquidity at 31 December 2020 of GBP1,349.4m.
On 24 February 2020, we made an early repayment to US private
placement holders of the $200.5m debt maturing in December
2020.
On 6 October 2020, we issued a Euro Medium Term Note (EMTN) of
EUR700m with a maturity of October 2025. Additionally, on 3
November 2020 we issued an EMTN of GBP150m with a maturity of July
2026.
On 6 November 2020, as part of the Group's COVID-19 Financing
Action Plan, we made an early repayment to the US private placement
holders of $1,387.1m, with the associated fees being recognised in
the Income Statement.
On 26 November 2020, the Group's RCF was increased by GBP150m to
GBP1,050m. On 14 December 2020, there were extensions to the RCF
resulting in facilities of GBP30m (2019: GBP30m) maturing in
February 2023, GBP420m (2019: GBP270m) maturing in February 2024,
GBP60m (2019: GBP60m) maturing in February 2025 and GBP540m (2019:
GBP540m) maturing in February 2026.
Following the proactive management of our financing structure,
the average debt maturity on our drawn borrowings is currently 4.8
years (5.5 years as at 31 December 2019), with no significant
maturities until July 2023.
Net debt and committed facilities 2020 2019
GBPm GBPm
Cash and cash equivalents (299.4) (195.1)
Private placement loan notes - 1,212.8
Private placement fees - (2.7)
Bond
borrowings 2,111.1 1,279.1
Bond borrowing fees (15.3) (11.0)
Bank borrowings - revolving credit facility (RCF) - 56.9
Bank borrowing fees (2.6) (2.2)
Derivative assets associated with borrowings (44.6) (3.9)
Derivative liabilities associated with borrowings 7.5 22.4
====================================================== ========= =========
Net debt before leases 1,756.7 2,356.3
Finance lease liabilities 280.8 316.6
Finance lease receivables (7.9) (15.3)
====================================================== ========= =========
Net
debt 2,029.6 2,657.6
====================================================== ========= =========
Borrowings (excluding derivatives, leases and fees) 2,111.1 2,548.8
Unutilised committed facilities (undrawn portion
of RCF) 1,050.0 843.1
====================================================== ========= =========
Total committed facilities 3,161.1 3,391.9
====================================================== ========= =========
Following the repayment of the US private placement loan notes
in November 2020, there are no financial covenants on our debt
facilities in issue at 31 December 2020. Based on previous
calculations, our covenant leverage ratio at 31 December 2020 was
5.6 times (31 December 2019: 2.5 times), and the interest cover
ratio was 3.6 times (31 December 2019: 9.4 times). Both are
calculated in accordance with our historical note purchase
agreements which no longer applied at 31 December 2020.
See the glossary of terms on page 50 for the definition of
leverage ratio and interest cover.
The calculation of the leverage ratio is as follows:
2020 2019
GBPm GBPm
==================================================== ======= =======
Net debt as reported 2,029.6 2,657.6
Adjusted EBITDA 367.3 1,034.2
Leverage 5.5x 2.6x
Adjustment to EBITDA for covenant calculation (1) 0.8x 0.2x
Adjustment to net debt for covenant calculation (1) (0.7x) (0.3x)
---------------------------------------------------- ------- -------
Leverage ratio per previous debt covenants 5.6x 2.5x
==================================================== ======= =======
1. Refer to Glossary for details of the nature of debt covenant
adjustments to EBITDA and Net Debt for leverage ratio
The calculation of interest cover is as follows:
2020 2019
GBPm GBPm
--------------------------------------------------- ------ -------
Adjusted EBITDA 367.3 1,034.2
=================================================== ====== =======
Adjusted net finance costs 97.4 111.7
=================================================== ====== =======
Interest cover 3.8x 9.3x
=================================================== ====== =======
Interest cover covenant EBITDA adjustment to ratio
(1) (0.2x) 0.1x
=================================================== ====== =======
Interest cover per previous debt covenant 3.6x 9.4x
=================================================== ====== =======
1. Refer to Glossary for details of the nature of debt covenant
adjustments to EBITDA for interest cover
Equity Addition
As part of our COVID-19 Action Plan, on 15 April 2020 the
Company announced a share issue of 250,318,000 new ordinary shares,
representing approximately 19.99% of the Company's existing issued
share capital. 125,159,000 new ordinary shares were issued on 20
April 2020 and, as part of the same process, a further 125,159,000
on 5 May 2020. The share issue Placing Price was 400p per share,
representing a discount of 4% to the closing share price of 416.8p
on 15 April 2020. The gross proceeds raised through the placement
were GBP1,001.3m, with net proceeds of GBP973.7m.
Corporate development
Informa has a proven track record in creating value through
identifying, executing and integrating complementary businesses
effectively into the Group. In 2020, cash invested in acquisitions
was GBP176.3m (2019: GBP311.1m), with GBP84.6m relating to
acquisitions including GBP7.3m of cash paid for business assets
(2019: GBP227.1m), GBP45.9m (2019: GBP46.8m) relating to
acquisition and integration costs, GBP28.1m (2019: GBP32.2m)
relating to the cash settlement on the exercise of an option
relating to minority interests in certain Fashion shows in the US,
GBP16.8m (2019: GBPnil) relating to the settlement of options
relating to a 4.1% minority holder of certain parts of our ASEAN
businesses and GBP0.9m (2019: GBP5.0) relating to other
investments. Net proceeds from disposals amounted to GBP10.4m
(2019: GBP179.3m).
Acquisitions
On 9 January 2020, the Group acquired F1000 Research Limited for
cash consideration of GBP14.9m. The business is an open research
publishing company and forms part of the Taylor & Francis
business.
On 2 October 2020, the Group acquired the business of TrialScope
Inc. for cash consideration, net of cash acquired, of GBP54.1m.
TrialScope is a pharmaceutical subscription software business and
forms part of the Informa Intelligence Division.
Pensions
The Group continues to meet all commitments to its pension
schemes, which include six defined benefit schemes. At 31 December
2020, the Group had a net pension liability of GBP71.4m (31
December 2019: GBP30.1m). Gross liabilities were GBP786.8m at 31
December 2020 (31 December 2019: GBP730.8m). The increase in
liabilities is predominantly driven by the decrease to the discount
rates used for calculating the present value of the pension
liability.
The net deficit remains relatively small compared with the size
of the Group's balance sheet. All schemes are closed to future
accrual.
Condensed Consolidated Income Statement
For the Year Ended 31 December 2020
Adjusted Adjusting Statutory Adjusted Adjusting Statutory
results Items results results Items results
2020 2020 2020 2019 2019 2019
GBPm GBPm GBPm GBPm GBPm GBPm
================================= ========= =========== ========= ========= ========= =========
Revenue 1,660.8 - 1,660.8 2,890.3 - 2,890.3
================================== ========= =========== ========= ========= ========= =========
Net operating expenses (1,393.8) (1,148.2) (2,542.0) (1,958.7) (395.0) (2,353.7)
================================== ========= =========== ========= ========= ========= =========
Operating profit/(loss) before
joint ventures
and associates 267.0 (1,148.2) (881.2) 931.6 (395.0) 536.6
================================== ========= =========== ========= ========= ========= =========
Share of results of joint
ventures and associates 0.8 - 0.8 1.5 - 1.5
================================== ========= =========== ========= ========= ========= =========
Operating
profit/(loss) 267.8 (1,148.2) (880.4) 933.1 (395.0) 538.1
================================== ========= =========== ========= ========= ========= =========
Loss on disposal of subsidiaries
and operations - (8.4) (8.4) - (95.4) (95.4)
================================== ========= =========== ========= ========= ========= =========
Finance
income 7.0 8.3 15.3 8.9 1.2 10.1
================================== ========= =========== ========= ========= ========= =========
Finance
costs (104.4) (161.8) (266.2) (120.6) (13.5) (134.1)
================================== ========= =========== ========= ========= ========= =========
(Loss)/profit before tax 170.4 (1,310.1) (1,139.7) 821.4 (502.7) 318.7
================================== ========= =========== ========= ========= ========= =========
Tax
(charge)/credit (25.6) 127.7 102.1 (156.1) 83.5 (72.6)
================================== ========= =========== ========= ========= ========= =========
(Loss)/profit for the year 144.8 (1,182.4) (1,037.6) 665.3 (419.2) 246.1
================================== ========= =========== ========= ========= ========= =========
Attributable
to:
================================== ================================= ===============================
- Equity holders of the Company 140.9 (1,182.4) (1,041.5) 644.7 (419.2) 225.5
================================== ========= =========== ========= ========= ========= =========
- Non-controlling interests 3.9 - 3.9 20.6 - 20.6
================================== ========= =========== ========= ========= ========= =========
Earnings per share
================================== ================================= ===============================
- Basic (p)1 9.9 (73.4) 51.2 17.9
================================== ========= =========== ========= ========= ========= =========
- Diluted (p)1 9.9 (73.4) 51.0 17.8
================================== ========= =========== ========= ========= ========= =========
1. 2019 restated for share placement (see Note 3).
All amounts in 2020 and 2019 relate to continuing
operations.
Condensed Consolidated Statement of Comprehensive Income
For the Year Ended 31 December 2020
2020 2019
GBPm GBPm
============================================================== ========= =======
(Loss)/profit for the year (1,037.6) 246.1
============================================================== ========= =======
Items that will not be reclassified subsequently to
profit or loss:
============================================================== ========= =======
Remeasurement of the net retirement benefit pension
obligation (47.6) (1.6)
============================================================== ========= =======
Tax credit relating to items that will not be reclassified
to profit or loss 8.3 0.7
============================================================== ========= =======
Total items that will not be reclassified subsequently
to profit or loss (39.3) (0.9)
============================================================== ========= =======
Items that have been reclassified subsequently to profit
or loss:
============================================================== ========= =======
Recycling of exchange gain arising on disposal of foreign
operation - 1.2
============================================================== ========= =======
Items that may be reclassified subsequently to profit
or loss:
============================================================== ========= =======
Exchange loss on translation of foreign operations (46.2) (233.5)
============================================================== ========= =======
Exchange (loss)/gain on net investment hedge debt (13.0) 73.1
============================================================== ========= =======
Loss on derivatives in net investment hedging relationships (42.0) (28.2)
============================================================== ========= =======
(Loss)/gain on derivatives in cash flow hedging relationships (1.1) 3.8
============================================================== ========= =======
Movement in cost of hedging reserve 1.3 3.2
============================================================== ========= =======
Tax credit relating to items that may be reclassified
subsequently to profit or loss 11.9 -
============================================================== ========= =======
Total items that may be reclassified subsequently to
profit or loss (89.1) (180.4)
============================================================== ========= =======
Other comprehensive expense for the year (128.4) (181.3)
============================================================== ========= =======
Total comprehensive (expense)/income for the year before
initial application of IFRS 16 (1,166.0) 64.8
============================================================== ========= =======
Effect of initial application of IFRS 16 that will
not be reclassified subsequently to profit or loss - 4.1
============================================================== ========= =======
Total comprehensive (expense)/income for the year (1,166.0) 68.9
============================================================== ========= =======
Total comprehensive (expense)/income attributable to:
============================================================== ========= =======
- Equity holders of the Company (1,169.8) 48.2
============================================================== ========= =======
- Non-controlling interests 3.8 20.7
============================================================== ========= =======
Condensed Consolidated Statement of Changes in Equity
For the Year Ended 31 December 2020
Share Share Translation Other Retained Total Non- controlling Total
capital premium Reserve reserves earnings GBPm interests equity
GBPm account GBPm GBPm GBPm GBPm GBPm
GBPm
================= ======== ======== =========== ========= =========== =========== ================ ===========
At 31 December
2018 1.3 905.3 63.3 1,974.5 2,933.8 5,878.2 193.4 6,071.6
================= ======== ======== =========== ========= =========== =========== ================ ===========
Effect of initial
application
of IFRS 16
on 1 January
2019 - - - - 4.1 4.1 - 4.1
================= ======== ======== =========== ========= =========== =========== ================ ===========
At 1 January 2019
as
restated for
initial
application of
IFRS 16 1.3 905.3 63.3 1,974.5 2,937.9 5,882.3 193.4 6,075.7
================= ======== ======== =========== ========= =========== =========== ================ ===========
Profit for the
year - - - - 225.5 225.5 20.6 246.1
================= ======== ======== =========== ========= =========== =========== ================ ===========
Exchange loss on
translation
of foreign
operations - - (233.6) - - (233.6) 0.1 (233.5)
================= ======== ======== =========== ========= =========== =========== ================ ===========
Exchange gain on
net
investment
hedge debt - - 73.1 - - 73.1 - 73.1
================= ======== ======== =========== ========= =========== =========== ================ ===========
Loss arising on
derivative
hedges - - (21.2) - - (21.2) - (21.2)
================= ======== ======== =========== ========= =========== =========== ================ ===========
Foreign exchange
recycling
of
disposed
entities - - 1.2 - - 1.2 - 1.2
================= ======== ======== =========== ========= =========== =========== ================ ===========
Actuarial loss on
defined
benefit
pension schemes - - - - (1.6) (1.6) - (1.6)
================= ======== ======== =========== ========= =========== =========== ================ ===========
Tax relating to
components
of other
comprehensive
income - - - - 0.7 0.7 - 0.7
================= ======== ======== =========== ========= =========== =========== ================ ===========
Total
comprehensive
(expense)/
income for the
year - - (180.5) - 224.6 44.1 20.7 64.8
================= ======== ======== =========== ========= =========== =========== ================ ===========
Dividends to
Shareholders - - - - (280.3) (280.3) - (280.3)
================= ======== ======== =========== ========= =========== =========== ================ ===========
Dividends to
non-controlling
interests - - - - - - (17.5) (17.5)
================= ======== ======== =========== ========= =========== =========== ================ ===========
Share award
expense - - - 10.4 - 10.4 - 10.4
================= ======== ======== =========== ========= =========== =========== ================ ===========
Issue of share - - - - - - -
capital -
================= ======== ======== =========== ========= =========== =========== ================ ===========
Own shares
purchased - - - (15.9) - (15.9) - (15.9)
================= ======== ======== =========== ========= =========== =========== ================ ===========
Transfer of
vested LTIPs - - - (5.7) 5.7 - - -
================= ======== ======== =========== ========= =========== =========== ================ ===========
Disposal of
non-controlling
interests - - - 1.3 - 1.3 (0.5) 0.8
----------------- -------- -------- ----------- --------- ----------- ----------- ---------------- -----------
At 31 December
2019 1.3 905.3 (117.2) 1,964.6 2,887.9 5,641.9 196.1 5,838.0
================= ======== ======== =========== ========= =========== =========== ================ ===========
Loss for the year - - - - (1,041.5) (1,041.5) 3.9 (1,037.6)
Exchange gain on
translation
of foreign
operations - - (46.1) - - (46.1) (0.1) (46.2)
Exchange loss on
net
investment hedge
debt - - (13.0) - - (13.0) - (13.0)
Loss arising on
derivative
hedges - - (41.8) - - (41.8) - (41.8)
Actuarial loss on
defined
benefit pension
schemes - - - - (47.6) (47.6) - (47.6)
Tax relating to
components
of other
comprehensive
income - - 11.9 - 8.3 20.2 - 20.2
----------------- -------- -------- ----------- --------- ----------- ----------- ---------------- -----------
Total
comprehensive
income/
(expense) for
the year - - (89.0) - (1,080.8) (1,169.8) 3.8 (1,166.0)
================= ======== ======== =========== ========= =========== =========== ================ ===========
Dividends to
non-controlling
interests - - - - - - (13.6) (13.6)
Share award
expense - - - 11.2 - 11.2 - 11.2
Issue of share
capital 0.2 973.5 - - - 973.7 - 973.7
Own shares
purchased - - - (1.3) - (1.3) - (1.3)
Transfer of
vested LTIPs - - - (4.9) 4.9 - - -
Acquisition of
non-controlling
interest - - - - 9.3 9.3 (9.3) -
----------------- -------- -------- ----------- --------- ----------- ----------- ---------------- -----------
At 31 December
2020 1.5 1,878.8 (206.2) 1,969.6 1,821.3 5,465.0 177.0 5,642.0
----------------- -------- -------- ----------- --------- ----------- ----------- ---------------- -----------
(1) Total attributable to equity holders of the parent
Consolidated Balance Sheet
For the Year Ended 31 December 2020
2020 2019
GBPm GBPm
===================================================== ========= =========
Goodwill 5,576.6 6,144.4
===================================================== ========= =========
Other intangible assets 3,094.5 3,437.4
===================================================== ========= =========
Property and equipment 49.1 69.0
===================================================== ========= =========
Right of use assets 209.9 264.4
===================================================== ========= =========
Investments in joint ventures and
associates 20.0 19.8
===================================================== ========= =========
Other investments 7.3 10.1
===================================================== ========= =========
Deferred tax assets 8.4 6.7
===================================================== ========= =========
Retirement benefit surplus - 4.9
===================================================== ========= =========
Finance lease receivables 6.4 13.0
===================================================== ========= =========
Other receivables 20.2 27.8
===================================================== ========= =========
Derivative financial instruments 44.6 3.9
===================================================== ========= =========
Non-current assets 9,037.0 10,001.4
===================================================== ========= =========
Inventory 31.3 38.5
===================================================== ========= =========
Trade and other receivables 358.1 476.1
===================================================== ========= =========
Current tax asset 4.9 8.9
===================================================== ========= =========
Cash and cash equivalents 299.4 195.1
===================================================== ========= =========
Finance lease receivables 1.5 2.3
===================================================== ========= =========
Derivative financial instruments - 1.0
===================================================== ========= =========
Current assets 695.2 721.9
===================================================== ========= =========
Total assets 9,732.2 10,723.3
===================================================== ========= =========
Borrowings - (152.2)
===================================================== ========= =========
Lease liabilities (33.4) (34.2)
===================================================== ========= =========
Derivative financial instruments (0.2) (36.4)
===================================================== ========= =========
Current tax liabilities (78.0) (97.5)
===================================================== ========= =========
Provisions (44.7) (35.0)
===================================================== ========= =========
Trade and other payables (343.7) (482.8)
===================================================== ========= =========
Deferred income (700.6) (746.5)
===================================================== ========= =========
Current liabilities (1,200.6) (1,584.6)
===================================================== ========= =========
Borrowings (2,093.2) (2,380.7)
===================================================== ========= =========
Lease liabilities (247.4) (282.4)
===================================================== ========= =========
Derivative financial instruments (7.5) (22.4)
===================================================== ========= =========
Deferred tax liabilities (406.4) (540.4)
===================================================== ========= =========
Retirement benefit obligation (71.4) (35.0)
===================================================== ========= =========
Provisions (44.8) (19.1)
===================================================== ========= =========
Trade and other payables (16.2) (17.4)
===================================================== ========= =========
Deferred income (2.7) (3.3)
===================================================== ========= =========
Non-current liabilities (2,889.6) (3,300.7)
===================================================== ========= =========
Total liabilities (4,090.2) (4,885.3)
===================================================== ========= =========
Net assets 5,642.0 5,838.0
===================================================== ========= =========
Share capital 1.5 1.3
===================================================== ========= =========
Share premium account 1,878.8 905.3
===================================================== ========= =========
Translation reserve (206.2) (117.2)
===================================================== ========= =========
Other reserves 1,969.6 1,964.6
===================================================== ========= =========
Retained earnings 1,821.3 2,887.9
===================================================== ========= =========
Equity attributable to equity holders of the parent 5,465.0 5,641.9
===================================================== ========= =========
Non-controlling interest 177.0 196.1
===================================================== ========= =========
Total equity 5,642.0 5,838.0
===================================================== ========= =========
1. Restated for updates to provisional acquisition accounting (see Note 3).
These financial statements were approved by the Board of
Directors and authorised for issue on 22 April 2021 and were signed
on its behalf by
Stephen A. Carter Gareth Wright
Group Chief Executive Group Finance Director
Consolidated Cash Flow Statement
2020 2019
GBPm GBPm
======================================================= ========= =======
Operating
activities
======================================================= ========= =======
Cash generated by operations 153.1 958.5
======================================================= ========= =======
Income taxes paid (32.9) (100.6)
======================================================= ========= =======
Interest
paid (259.7) (138.3)
======================================================= ========= =======
Net cash (outflow)/inflow from operating activities (139.5) 719.6
======================================================= ========= =======
Investing
activities
======================================================= ========= =======
Interest
received 5.7 5.5
======================================================= ========= =======
Purchase of property and equipment (10.7) (17.5)
======================================================= ========= =======
Purchase of intangible software assets (23.8) (25.3)
======================================================= ========= =======
Product development costs additions (13.9) (7.0)
======================================================= ========= =======
Purchase of intangibles related to titles,
brands and customer relationships (7.3) (59.4)
======================================================= ========= =======
Acquisition of subsidiaries and operations,
net of cash acquired (77.3) (167.7)
======================================================= ========= =======
Acquisition of investment (0.9) (5.0)
======================================================= ========= =======
Proceeds from disposal of subsidiaries and operations 10.4 179.3
======================================================= ========= =======
Net cash outflow from investing activities (117.8) (97.1)
======================================================= ========= =======
Financing
activities
======================================================= ========= =======
Dividends paid to Shareholders (0.2) (280.0)
======================================================= ========= =======
Dividends paid to non-controlling interests (13.6) (17.5)
======================================================= ========= =======
Proceeds from EMTN bond issuance 788.3 443.7
======================================================= ========= =======
Repayment of loans (61.3) (499.7)
======================================================= ========= =======
New loan advances - 41.2
======================================================= ========= =======
Repayment of private placement borrowings (1,227.8) (143.4)
======================================================= ========= =======
Borrowing fees paid (17.6) (9.4)
======================================================= ========= =======
Repayment of the principal lease liabilities (37.1) (34.5)
======================================================= ========= =======
Finance lease receipts 2.3 2.3
======================================================= ========= =======
Acquisition of non-controlling interests (44.9) (32.2)
======================================================= ========= =======
Cash outflow from purchase of shares (1.3) (15.9)
======================================================= ========= =======
Cash inflow from issue of shares 973.7 -
======================================================= ========= =======
Net cash inflow/(outflow) from financing activities 360.5 (545.4)
======================================================= ========= =======
Net increase in cash and cash equivalents 103.2 77.1
======================================================= ========= =======
Effect of foreign exchange rate changes 1.1 (6.9)
======================================================= ========= =======
Cash and cash equivalents at beginning of
the year 195.1 124.9
======================================================= ========= =======
Cash and cash equivalents at end of the year 299.4 195.1
======================================================= ========= =======
For the Year Ended 31 December 2020
Notes to the Condensed Consolidated Financial Statements
For the Year Ended 31 December 2020
1. General information and basis of preparation
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 Consolidated Financial Statements as at 31 December 2020 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), which is the currency of the primary economic environment in
which the Group operates and the functional currency of the Parent
Company, Informa PLC.
2. Basis of preparation
The financial information for the year ended 31 December 2020
does not constitute the statutory financial statements for that
year, but is derived from those audited financial statements for
the year ended 31 December 2020 which will be published on
www.informa.com. While the financial information in these Full Year
Results has been prepared in accordance with International
Financial Reporting Standards (IFRS), these results do not in
isolation contain sufficient information to comply with IFRS. Those
financial statements have not yet been delivered to the Registrar
of Companies, but include the auditor's report which was
unqualified and did not contain a statement under Section 498 (2)
or (3) of the Companies Act 2006.
The Directors have considered the company's ability to be a
going concern over the assessment period to June 2022 based on the
Group's financial plan, a downside scenario and a reverse stress
test case. The Group's financial plan assumes physical events
outside of Asia start to return from June 2021 and there is a
slower recovery for physical events compared with GDP forecasts for
the same period in those geographies. In this scenario, the Group
maintains liquidity headroom of more than GBP1.3bn.
Based on these scenarios, the Directors believe that the Group
is well placed to manage its financing and other business risks
satisfactorily. The Directors have been able to form a reasonable
expectation that the Group has adequate resources to continue in
operation for at least twelve months from the signing date of the
Annual Report and Accounts, and therefore consider it appropriate
to adopt the going concern basis of accounting in preparing the
financial statements.
The accounting policies, significant judgements and key sources
of estimation adopted in the preparation of the financial
information are consistent with those applied by the Group in its
Consolidated Financial Statements for the year ended 31 December
2019, subject to new accounting standards, and are disclosed in
full in the audited financial statements for the year ended 31
December 2020 which will be published on www.informa.com.
3. Restatement
Fair value restatement
Finalisation of the acquisition balance sheet of Centre for Asia
Pacific Aviation Pty Ltd (CAPA)
In 2020 the group completed the IFRS 3 fair value exercise in
relation to the acquisition of CAPA within the 12-month
remeasurement period from the acquisition date. This has resulted
in the following restatements to the balance sheet as at 31
December 2019, with no impact to the income statement for the year
ended 31 December 2019:
-- An increase of GBP0.7m in provisions and a corresponding increase in goodwill
-- Increase in accruals of GBP0.1m and a corresponding increase in goodwill
-- Impairment of GBP0.2m in fixed assets and a corresponding increase in goodwill
Fair value restatements to the acquisition balance sheet of the
TMT Research and Intelligence portfolio from IHS Markit (TMT)
An update to the provisional fair value 1 August 2019
acquisition balance sheet of TMT has resulted in the following
restatements to the balance sheet as at 31 December 2019, with no
impact on the income statement for the year ended 31 December
2019:
-- A reduction in trade receivables of GBP0.3m, with a corresponding increase in goodwill
Restatement of EPS and Dividends per Share due to discount on
the share placement
On 15 April 2020 the Company announced a share placement of
250,318,000 new Ordinary Shares, representing approximately 19.99%
of the Company's existing issued share capital. 125,159,000 new
Ordinary Shares were issued on 20 April 2020 and a further
125,159,000 on 5 May 2020. The share placement price was 400 pence
per share and represented a discount of 4 per cent to the closing
share price of 416.8 pence on 15 April 2020. The gross proceeds
raised through the placement were GBP1,001.3m.
The issue of shares at a discount required the restatement of
prior years' weighted average number of shares, earnings per share
and dividends per share.
Year ended 31 Year ended
December 2019 31 December
(Restated) 2019
(as previously
reported)
======================================= ============== ===============
Basic EPS (p) 17.9 18.0
--------------------------------------- -------------- ---------------
Diluted EPS (p) 17.8 18.0
--------------------------------------- -------------- ---------------
Adjusted basic EPS (p) 51.2 51.5
--------------------------------------- -------------- ---------------
Adjusted diluted EPS (p) 51.0 51.3
--------------------------------------- -------------- ---------------
Weighted average number of shares used
in basic EPS calculation 1,259,117,620 1,250,660,231
--------------------------------------- -------------- ---------------
Weighted average number of shares used
in diluted EPS calculation 1,264,230,940 1,255,739,205
--------------------------------------- -------------- ---------------
Dividends per share (p) 7.50 7.55
======================================= ============== ===============
Restatement of 2019 operating segments and revenue by type
The operating segments results for the year ended 31 December
2020 were restated to reflect moves of certain businesses between
operating segments with no impact on reported total income
statement results.
2019 revenue by type disclosure has been restated to align
revenue types with 2020 following the refinement to the
classification. See note 4 for restated amounts and amounts
previously reported.
4. Revenue
An analysis of the Group's revenue by type is as follows;
Year ended 31 December 2020 Informa Informa Informa Informa Taylor Total
Markets Connect Tech Intelligence & GBPm
GBPm GBPm GBPm GBPm Francis
GBPm
============================ ======== ============ ========= ============= ======== =======
Exhibitor 359.1 21.6 12.2 - - 392.9
============================ ======== ============ ========= ============= ======== =======
Subscriptions 26.1 1.6 59.3 279.4 316.2 682.6
============================ ======== ============ ========= ============= ======== =======
Transactional
sales 12.9 4.1 30.5 13.1 239.2 299.8
============================ ======== ============ ========= ============= ======== =======
Attendee 26.7 54.7 17.3 0.2 - 98.9
============================ ======== ============ ========= ============= ======== =======
Marketing and advertising
services 77.1 14.7 21.0 11.7 0.6 125.1
============================ ======== ============ ========= ============= ======== =======
Sponsorship 22.5 27.5 10.6 0.9 - 61.5
============================ ======== ============ ========= ============= ======== =======
Total 524.4 124.2 150.9 305.3 556.0 1,660.8
============================ ======== ============ ========= ============= ======== =======
Year ended 31 December Informa Informa Informa Informa Taylor Total
2019 (1) Markets Connect Tech Intelligence & Francis GBPm
GBPm GBPm GBPm GBPm GBPm
========================== ================ ======== ======= ============= ========== =======
Exhibitor 1,140.8 58.6 64.8 0.5 - 1,264.7
========================== ================ ======== ======= ============= ========== =======
Subscriptions 23.9 2.0 38.2 293.9 302.0 660.0
========================== ================ ======== ======= ============= ========== =======
Transactional
sales 12.7 5.7 23.0 18.7 256.7 316.8
========================== ================ ======== ======= ============= ========== =======
Attendee 80.7 138.7 76.8 2.0 - 298.2
========================== ================ ======== ======= ============= ========== =======
Marketing and advertising
services 101.2 21.1 16.8 33.0 0.9 173.0
========================== ================ ======== ======= ============= ========== =======
Sponsorship 78.4 60.0 36.6 2.6 - 177.6
========================== ================ ======== ======= ============= ========== =======
Total 1,437.7 286.1 256.2 350.7 559.6 2,890.3
========================== ================ ======== ======= ============= ========== =======
1. Restated for restructure of operating segments and alignment
of revenue types across the Group (see Note 3).
5. Business Segments
The Group has identified reportable segments based on financial
information used by the Directors in allocating resources and
making strategic decisions. We consider the chief operating
decision maker to be the Executive Directors.
The Group's five identified reportable segments under IFRS 8
Operating Segments are Informa Markets, Informa Connect, Informa
Tech, Informa Intelligence and Taylor & Francis. There is no
difference between the Group's operating segments and the Group's
reportable segments.
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 2020 Informa Informa Informa Informa Taylor Total
Markets Connect Tech Intelligence & GBPm
GBPm GBPm GBPm GBPm Francis
GBPm
================================== ======== ======== ======= ============= ======== ========
Revenue 524.4 124.2 150.9 305.3 556.0 1,660.8
================================== ======== ======== ======= ============= ======== ========
Adjusted operating profit/(loss)
before joint ventures
and associates1 (26.1) (24.0) (1.9) 103.0 216.0 267.0
================================== ======== ======== ======= ============= ======== ========
Share of adjusted results
of joint ventures and associates 0.4 0.4 - - - 0.8
================================== ======== ======== ======= ============= ======== ========
Adjusted operating profit/(loss) (25.7) (23.6) (1.9) 103.0 216.0 267.8
================================== ======== ======== ======= ============= ======== ========
Intangible asset amortisation
(2) (185.7) (16.8) (20.7) (16.6) (52.0) (291.8)
================================== ======== ======== ======= ============= ======== ========
Impairment- goodwill (231.1) (105.9) (255.9) - - (592.9)
================================== ======== ======== ======= ============= ======== ========
Impairment - acquisition-related
intangibles (24.1) (4.5) (6.2) (2.7) (1.0) (38.5)
================================== ======== ======== ======= ============= ======== ========
Impairment - IFRS 16 right
of use assets (15.0) (5.3) (2.5) (7.0) (6.3) (36.1)
================================== ======== ======== ======= ============= ======== ========
Impairment - property and
equipment (4.2) (1.3) (0.8) (1.0) (1.5) (8.8)
================================== ======== ======== ======= ============= ======== ========
Impairment - external investments - (2.5) - (1.4) - (3.9)
================================== ======== ======== ======= ============= ======== ========
Acquisition and integration
costs (24.9) (1.6) (17.3) (4.3) (1.0) (49.1)
================================== ======== ======== ======= ============= ======== ========
Restructuring and reorganisation
costs (39.5) (11.7) (11.8) (6.5) (8.1) (77.6)
================================== ======== ======== ======= ============= ======== ========
Onerous contracts and one-off
costs associated with COVID-19 (46.3) (3.3) (2.9) (0.1) - (52.6)
================================== ======== ======== ======= ============= ======== ========
Subsequent remeasurement of
contingent consideration (0.9) 0.7 3.3 - - 3.1
================================== ======== ======== ======= ============= ======== ========
Operating
(loss)/profit (597.4) (175.8) (316.7) 63.4 146.1 (880.4)
================================== ======== ======== ======= ============= ======== ========
Loss on disposal of businesses (8.4)
================================== ==============================================================
Finance income 15.3
================================== ==============================================================
Finance costs (266.2)
================================== ==============================================================
Loss before tax (1,139.7)
================================== ==============================================================
1. Adjusted operating profit before joint ventures and
associates included the following amounts for depreciation and
other
amortisation: GBP38.8m for Informa Markets, GBP8.2m for Informa
Connect, GBP19.2m for Informa Intelligence, GBP3.7m for I
nforma Tech and GBP18.3m for Taylor and Francis.
2. Excludes acquired intangible product development and software
amortisation.
Year ended 31 December 2019 Informa Informa Informa Informa Taylor Total
(restated)(3) Markets Connect Tech Intelligence & GBPm
GBPm GBPm GBPm GBPm Francis
GBPm
================================== ======== ======== ======= ============= ======== =======
Revenue 1,437.7 286.1 256.2 350.7 559.6 2,890.3
================================== ======== ======== ======= ============= ======== =======
Adjusted operating profit
before joint ventures and
associates (1) 489.2 46.5 71.4 107.3 217.2 931.6
================================== ======== ======== ======= ============= ======== =======
Share of adjusted results
of joint ventures and associates 1.4 0.1 - - - 1.5
================================== ======== ======== ======= ============= ======== =======
Adjusted operating profit 490.6 46.6 71.4 107.3 217.2 933.1
================================== ======== ======== ======= ============= ======== =======
Intangible asset amortisation
(2) (197.6) (17.9) (21.7) (23.2) (52.0) (312.4)
================================== ======== ======== ======= ============= ======== =======
Impairment - goodwill (0.9) - - - - (0.9)
================================== ======== ======== ======= ============= ======== =======
Impairment - acquisition-related
intangibles (3.8) - - - - (3.8)
================================== ======== ======== ======= ============= ======== =======
Impairment - IFRS 16 right
of use assets (1.4) - - (0.9) (2.3) (4.6)
================================== ======== ======== ======= ============= ======== =======
Acquisition and integration
costs (39.3) (4.6) (12.2) (3.3) (0.3) (59.7)
================================== ======== ======== ======= ============= ======== =======
Restructuring and reorganisation
costs (3.0) (0.2) (0.6) (4.8) - (8.6)
================================== ======== ======== ======= ============= ======== =======
Subsequent remeasurement
of contingent consideration 1.6 (1.7) - (3.1) - (3.2)
================================== ======== ======== ======= ============= ======== =======
VAT charges (1.8) - - - - (1.8)
================================== ======== ======== ======= ============= ======== =======
Operating
profit 244.4 22.2 36.9 72.0 162.6 538.1
================================== ======== ======== ======= ============= ======== =======
Loss on disposal of businesses (95.4)
================================== ======== ======== ======= ============= ======== =======
Finance income 10.1
================================== ======== ======== ======= ============= ======== =======
Finance costs (134.1)
================================== ======== ======== ======= ============= ======== =======
Profit before tax 318.7
================================== ======== ======== ======= ============= ======== =======
1. Adjusted operating profit before joint ventures and
associates included the following amounts for depreciation and
other amortisation: GBP37.0m
for Informa Markets, GBP9.2m for Informa Connect, GBP23.1m for
Informa Intelligence, GBP3.7m for Informa Tech and GBP19.2m for
Taylor and Francis.
2. Excludes acquired intangible product development and software
amortisation.
3. Restated for restructure of operating segments (see Note
3)
6. Operating profit
Operating profit has been arrived at after
charging/(crediting)
Adjusted Adjusting Statutory Adjusted Adjusting Statutory
results Items results results Items results
2020 2020 2020 2019 2019 2019
GBPm GBPm GBPm GBPm GBPm GBPm
================================== ======== ========= ========= ======== ========= =========
Cost of sales 527.3 - 527.3 981.3 - 981.3
================================== ======== ========= ========= ======== ========= =========
Staff costs (excluding
adjusting items) 634.8 - 634.8 692.8 - 692.8
================================== ======== ========= ========= ======== ========= =========
Amortisation of other
intangible assets 41.1 291.8 332.9 41.9 312.4 354.3
================================== ======== ========= ========= ======== ========= =========
Impairment - goodwill - 592.9 592.9 - 0.9 0.9
================================== ======== ========= ========= ======== ========= =========
Impairment - acquisition-related
intangibles - 38.5 38.5 - 3.8 3.8
================================== ======== ========= ========= ======== ========= =========
Impairment - IFRS 16 right
of use assets - 36.1 36.1 - 4.6 4.6
================================== ======== ========= ========= ======== ========= =========
Impairment - Property
and equipment - 8.8 8.8 - - -
================================== ======== ========= ========= ======== ========= =========
Impairment - Investments - 3.9 3.9 - - -
================================== ======== ========= ========= ======== ========= =========
Depreciation - Property
and equipment 16.8 - 16.8 17.2 - 17.2
================================== ======== ========= ========= ======== ========= =========
Depreciation - IFRS 16
right of use assets 30.3 - 30.3 33.1 - 33.1
================================== ======== ========= ========= ======== ========= =========
Acquisition-related
costs - 2.8 2.8 - 3.3 3.3
================================== ======== ========= ========= ======== ========= =========
Integration-related
costs - 46.3 46.3 - 56.4 56.4
================================== ======== ========= ========= ======== ========= =========
Restructuring and reorganisation
costs - 77.6 77.6 - 8.6 8.6
================================== ======== ========= ========= ======== ========= =========
Onerous contracts and
one-off costs associated
with COVID-19 - 52.6 52.6 - - -
================================== ======== ========= ========= ======== ========= =========
Subsequent remeasurement
of contingent consideration - (3.1) (3.1) - 3.2 3.2
================================== ======== ========= ========= ======== ========= =========
VAT
charges - - - - 1.8 1.8
================================== ======== ========= ========= ======== ========= =========
Net foreign exchange gain (3.1) - (3.1) (9.3) - (9.3)
================================== ======== ========= ========= ======== ========= =========
Auditor's remuneration for
audit services 3.2 - 3.2 3.4 - 3.4
================================== ======== ========= ========= ======== ========= =========
Other operating expenses 143.4 - 143.4 198.3 - 198.3
================================== ======== ========= ========= ======== ========= =========
Total net operating expenses
before share of joint ventures
and associates 1,393.8 1,148.2 2,542.0 1,958.7 395.0 2,353.7
================================== ======== ========= ========= ======== ========= =========
7. Adjusting Items
The Board considers certain items should be recognised as
adjusting items (see glossary on page 49) 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:
2020 2019
GBPm GBPm
======================================================== ======= ======
Intangible amortisation and impairment
======================================================== ======= ======
Intangible asset amortisation 291.8 312.4
======================================================== ======= ======
Impairment - goodwill 592.9 0.9
======================================================== ======= ======
Impairment - acquisition-related intangible
assets 38.5 3.8
======================================================== ======= ======
Impairment - IFRS 16 right of use assets 36.1 4.6
======================================================== ======= ======
Impairment - property & equipment 8.8 -
======================================================== ======= ======
Impairment - investments 3.9 -
======================================================== ======= ======
Acquisition
costs 2.8 3.3
======================================================== ======= ======
Integration
costs 46.3 56.4
======================================================== ======= ======
Restructuring and reorganisation costs
======================================================== ======= ======
Redundancy and reorganisation costs 47.6 6.4
======================================================== ======= ======
Vacant property and finance lease modification costs 30.0 2.2
======================================================== ======= ======
Onerous contracts associated with COVID-19 47.3 -
======================================================== ======= ======
Other one-off costs associated with COVID-19 5.3 -
======================================================== ======= ======
Subsequent remeasurement of contingent consideration (3.1) 3.2
======================================================== ======= ======
VAT
charges - 1.8
======================================================== ======= ======
Adjusting items in operating loss/profit 1,148.2 395.0
======================================================== ======= ======
Loss on disposal of subsidiaries and
operations 8.4 95.4
======================================================== ======= ======
Finance
income (8.3) (1.2)
======================================================== ======= ======
Finance
costs 161.8 13.5
======================================================== ======= ======
Adjusting items in loss/profit before tax 1,310.1 502.7
======================================================== ======= ======
Tax related to adjusting items (127.7) (83.5)
======================================================== ======= ======
Adjusting items in loss/profit for the year 1,182.4 419.2
======================================================== ======= ======
The principal adjusting items are in respect of the
following:
-- 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 separately disclosed and are excluded from adjusted
results. Note 13 provides details of the impairment of
goodwill.
-- Impairment of right of use assets relate to the permanent
closure of a number of office properties in 2020.
-- Acquisition costs are the costs and fees incurred by the Group in acquiring businesses.
-- Integration costs are the costs incurred by the Group in
integrating share and asset acquisitions and included GBP27.5m
relating to the integration of UBM.
-- Restructuring and reorganisation costs are incurred by the
Group in business restructuring and operating model changes and in
2020 this included voluntary and targeted redundancy programmes
-- Vacant property and finance lease modification costs arose
from the permanent closure of office properties in 2020.
-- Onerous contracts associated with COVID-19 relate to onerous
contract costs for events which have been cancelled or postponed
and the costs cannot be recovered. The costs largely relate to
venue, marketing and event set-up costs.
-- Other one-off costs associated with COVID-19 are the one-off
indirect cost incurred as a result of COVID-19, largely relating to
a contractual commitment to the owner of an event that was
cancelled.
-- 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.
-- VAT charges related to an increase of the existing provisions
for VAT penalties relating to the UAE which the group is
disputing.
-- Loss on disposal of subsidiaries and operations - the loss on
disposal primarily relates to the impairment of loan note
receivables.
-- Finance income reflects the fair value movement on an acquisition put option.
-- Finance costs relate to the one-off costs in relation to the
issue of EMTNs and repayment of the Group's US private placements
in 2020.
-- The tax items relate to the tax effect on the items above and
adjusting tax items which are analysed in Note 10.
8. Finance Income
Interest income on bank deposits 5.5 4.7
========================================================= ==== ====
Interest income finance lessor leases 0.1 0.8
========================================================= ==== ====
Fair value gain on financial instruments through the
Income Statement 1.4 3.4
--------------------------------------------------------- ---- ----
Finance income before adjusting items 7.0 8.9
========================================================= ==== ====
Adjusting item: finance income associated with debt
issuance and fair value gain on acquisition put options 8.3 1.2
========================================================= ==== ====
Total Finance income 15.3 10.1
========================================================= ==== ====
9. Finance Costs
2020 2019
GBPm GBPm
======================================================== ======= ======
Interest expense on borrowings and loans (1) 92.3 105.5
======================================================== ======= ======
Interest on IFRS 16 leases 12.2 14.3
======================================================== ======= ======
Interest cost on pension scheme net liabilities 0.7 1.4
======================================================== ======= ======
Total interest expense 105.2 121.2
======================================================== ======= ======
Fair value loss on financial instruments through the
Income Statement (0.8) (0.6)
======================================================== ======= ======
Financing costs before adjusting items 104.4 120.6
======================================================== ======= ======
Adjusting item: financing expense associated with early
repayment of debt and associated termination of put
options (2) 161.8 13.5
======================================================== ======= ======
Total finance costs 266.2 134.1
======================================================== ======= ======
1. Included in interest expense above is the amortisation of
debt issue costs of GBP12.4m (2019: GBP5.1m).
2. The adjusting item for finance costs in 2020 and 2019
primarily relates to the finance fees associated with early
repayment of debt.
10. Taxation
The tax (credit)/charge comprises:
2020 2019
GBPm GBPm
======================================================= ======= ======
Current
tax:
======================================================= ======= ======
UK (1.1) 21.6
======================================================= ======= ======
Continental
Europe (1.1) 23.2
======================================================= ======= ======
US 4.2 12.0
======================================================= ======= ======
China 11.8 29.6
======================================================= ======= ======
Rest of world 11.6 22.6
======================================================= ======= ======
Total current tax 25.4 109.0
======================================================= ======= ======
Deferred
tax:
======================================================= ======= ======
Current
year (132.7) (19.5)
======================================================= ======= ======
Credit arising from tax rate changes 5.2 (16.9)
======================================================= ======= ======
Total deferred tax (127.5) (36.4)
======================================================= ======= ======
Total tax (credit)/charge on (loss)/profit on ordinary
activities (102.1) 72.6
======================================================= ======= ======
The tax on adjusting items within the Consolidated Income
Statement relates to the following:
Gross Tax Gross Tax
2020 2020 2019 2019
GBPm GBPm GBPm GBPm
================================================ ========= ====== ========== =======
Intangible assets amortisation (291.8) 57.2 (312.4) 92.1
================================================ ========= ====== ========== =======
Benefit of goodwill amortisation for tax
purposes only - (22.6) - (23.0)
================================================ ========= ====== ========== =======
Deferred tax recognised on fair value
adjustments - - - 16.5
================================================ ========= ====== ========== =======
Impairment of intangibles and goodwill (631.4) 16.5 (4.7) 1.0
================================================ ========= ====== ========== =======
Impairment of IFRS 16 right of use assets (36.1) 8.0 (4.6) 0.9
================================================ ========= ====== ========== =======
Impairment of property and equipment (8.8) 2.1 - -
================================================ ========= ====== ========== =======
Impairment of investments (3.9) - - -
================================================ ========= ====== ========== =======
Acquisition and integration-related costs (49.1) 8.2 (59.7) 11.4
================================================ ========= ====== ========== =======
Restructuring and reorganisation costs (77.6) 17.4 (8.6) 1.8
================================================ ========= ====== ========== =======
Onerous contracts and other items associated
with COVID-19 (52.6) 10.9 - -
================================================ ========= ====== ========== =======
Subsequent remeasurement of contingent
consideration 3.1 (0.1) (3.2) 0.7
================================================ ========= ====== ========== =======
VAT
charges - - (1.8) -
================================================ ========= ====== ========== =======
Loss on disposal of subsidiaries and operations (8.4) 2.2 (95.4) (20.4)
================================================ ========= ====== ========== =======
Finance
income 8.3 (1.6) 1.2 -
================================================ ========= ====== ===================
Finance
costs (161.8) 29.5 (13.5) 2.5
================================================ ========= ====== ========== =======
Total tax on adjusting items (1,310.1) 127.7 (502.7) 83.5
================================================ ========= ====== ========== =======
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. On
3 March 2021 the UK Government announced its intention to increase
the UK Corporation Tax rate from 19% to 25% from 1 April 2023. If
this change had been enacted by 31 December 2020, it would not have
had a material impact on the amount of deferred tax recognised.
A reconciliation of the actual tax expense to the expected tax
expense at the applicable statutory rate is shown below:
2020 2019
---------------------------------------------- ================= =============
GBPm % GBPm %
---------------------------------------------- --------- ------ ------ -----
(Loss)/profit before tax (1,139.7) 318.7
============================================== ========= ====== ====== =====
Tax (credit)/charge at effective UK statutory
rate of 19.0% (2019: 19.0%) (216.5) 19.0 60.6 19.0
============================================== ========= ====== ====== =====
Different tax rates on overseas profits (27.3) 2.4 22.8 7.1
============================================== ========= ====== ====== =====
Disposal related items (0.1) - 36.9 11.6
============================================== ========= ====== ====== =====
Non-deductible
expenditure 121.9 (10.7) 10.9 3.4
============================================== ========= ====== ====== =====
Non-taxable
income (2.1) 0.2 (6.2) (1.9)
============================================== ========= ====== ====== =====
Benefits from financing structures (5.5) 0.5 (6.1) (1.9)
============================================== ========= ====== ====== =====
Tax
incentives (1.7) 0.1 (1.9) (0.6)
============================================== ========= ====== ====== =====
Adjustments for prior years 6.6 (0.6) (6.9) (2.2)
============================================== ========= ====== ====== =====
Net movement in provisions for uncertain
tax positions 1.1 (0.1) (4.3) (1.3)
============================================== ========= ====== ====== =====
Impact of changes in tax rates 5.2 (0.4) (16.9) (5.3)
============================================== ========= ====== ====== =====
Deferred tax recognised on fair value
adjustments - - (16.5) (5.2)
============================================== ========= ====== ====== =====
Movements in deferred tax not recognised 16.3 (1.4) 0.2 0.1
============================================== ========= ====== ====== =====
Tax (credit)/charge and effective rate
for the year (102.1) 9.0 72.6 22.8
============================================== ========= ====== ====== =====
In addition to the income tax charge to the Consolidated Income
Statement, a tax credit of GBP20.2m (2019: credit of GBP0.7m) has
been recognised directly in the Consolidated Statement of
Comprehensive Income during the year.
Current tax liabilities include GBP54.2m (2019: GBP53.1m) 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. On 3 March 2021, a charging notice was
issued by HMRC to Informa in relation to certain group companies
and periods and on 1 April 2021, Informa paid an amount of GBP5.5m
to HMRC. The Group is awaiting confirmation from HMRC as to the
position for other group companies and periods where the exemption
was claimed and we believe that the maximum amount that could
become payable in addition to the GBP5.5m already paid is GBP19.1m
including interest.
As part of the acquisition accounting relating to contingent
liabilities, an amount of GBP8m has been provided in relation to
UBM companies. We do not currently believe it is probable that we
will ultimately have a liability in relation to this matter and
therefore have not provided for any additional amounts.
11. Dividends
2020 2020 2019 2019
Pence per GBPm Pence Per GBPm
Share Share(1)
p p
---------------------------------------------- ---------- ----- ---------- -----
Amounts recognised as distributions to
equity holders in the year:
============================================== ========== ===== ========== =====
Final dividend for the year ended 31 December - - - -
2019
============================================== ========== ===== ========== =====
Interim dividend for the year ended 31 - - - -
December 2020
============================================== ========== ===== ========== =====
Final dividend for the year ended 31 December
2018 - - 14.75p 185.8
============================================== ========== ===== ========== =====
Interim dividend for the year ended 31
December 2019 - - 7.50p 94.5
============================================== ========== ===== ========== =====
- - 22.25p 280.3
============================================== ========== ===== ========== =====
Proposed final dividend for the year ended
31 December 2020 and the year ended 31 - - - -
December 2019
============================================== ========== ===== ========== =====
1. Restated for share placement (see Note 3).
In April 2020 the Group announced the temporary suspension of
dividend payments, including the withdrawal of the proposed 2019
final dividend. There was no interim dividend for the six months
ended 30 June 2020 or proposed final dividend for the year ended
2020. As at 31 December 2020 GBP0.2m (2019: GBP0.4m) of dividends
were still to be paid, and total dividend payments in the year were
GBP0.2m (2019: GBP280.0m).
In the year ended 31 December 2020 there were dividend payments
of GBP13.6m (2019: GBP17.5m) to non-controlling interests.
12. Earnings Per Share (EPS)
Basic EPS
The basic earnings per share calculation is based on the loss
attributable to equity shareholders of the parent of GBP1,038.0m
(2019: Profit GBP225.5m). This loss 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 1,419,707,507 (2019: 1,259,117,620).
Diluted EPS
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 1,419,707,507 (2019:
1,264,230,940).
In 2020 there were 6,813,614 potential ordinary shares which are
anti-dilutive and are therefore excluded from the weighted average
number of ordinary shares for the purpose of calculating diluted
earnings per share.
The table below sets out the adjustment in respect of dilutive
potential Ordinary Shares for use in the calculation of diluted
EPS:
2020 2019(1)
================================================== ============= =============
Weighted average number of shares used in basic
earnings per share 1,419,707,507 1,259,117,620
================================================== ============= =============
Effect of dilutive potential Ordinary Shares - 5,113,320
================================================== ============= =============
Weighted average number of shares used in diluted
earnings per share 1,419,707,507 1,264,230,940
-------------------------------------------------- ------------- -------------
1. Restated for share placement (see Note 3).
The table below sets out the adjustment in respect of dilutive
potential Ordinary Shares for use in the calculation of diluted
adjusted EPS:
2020 2019(1)
================================================== ============= =============
Weighted average number of shares used in basic
earnings per share 1,419,707,507 1,259,117,620
================================================== ============= =============
Effect of dilutive potentially Ordinary Shares 6,813,614 5,113,320
================================================== ============= =============
Weighted average number of shares used in diluted
adjusted earnings per share 1,426,521,121 1,264,230,940
================================================== ============= =============
1. Restated for share placement (see Note 3).
In addition to basic EPS, adjusted diluted EPS has been
calculated to provide useful additional information on underlying
earnings performance. Adjusted diluted EPS is based on profit
attributable to equity shareholders which has been adjusted to
exclude items that, in the opinion of the Directors, would distort
underlying results with the items detailed in Note 7.
Earnings Per Share Earnings Per Share
2020 Amount 2019 Amount
GBPm 2020 GBPm 2019(1)
Earnings per share Pence Pence
======================================= ========= ========= ======== =========
(Loss)/profit for the year (1,037.6) 246.1
======================================= ========= ========= ======== =========
Non-controlling interests (3.9) (20.6)
======================================= ========= ========= ======== =========
Earnings for the purpose of statutory
basic EPS/statutory basic EPS (p) (1,041.5) (73.4) 225.5 17.9
--------------------------------------- --------- --------- -------- ---------
Effect of dilutive potential Ordinary
Shares - - - (0.1)
======================================= ========= ========= ======== =========
Earnings for the purpose of statutory
diluted EPS/statutory diluted EPS (p) (1,041.5) (73.4) 225.5 17.8
--------------------------------------- --------- --------- -------- ---------
1. Restated for share placement (see Note 3).
Earnings Per Share Earnings Per Share
2020 Amount 2019 Amount
GBPm 2020 GBPm 2019(1)
Adjusted earnings per share Pence Pence
================================================ ========= ========= ======== =========
Earnings for the purpose of statutory
basic EPS/statutory basic EPS (p) (1,041.5) (73.4) 225.5 17.9
================================================ ========= ========= ======== =========
Adjusting
items:
================================================ ========= ========= ======== =========
Intangible asset amortisation 291.8 20.5 312.4 24.8
================================================ ========= ========= ======== =========
Impairment - goodwill 592.9 41.8 0.9 0.1
================================================ ========= ========= ======== =========
Impairment - acquisition-related intangible
assets 38.5 2.7 3.8 0.3
================================================ ========= ========= ======== =========
Impairment - IFRS 16 right of use assets 36.1 2.5 4.6 0.4
================================================ ========= ========= ======== =========
Impairment - property and equipment 8.8 0.6 - -
================================================ ========= ========= ======== =========
Impairment - investments 3.9 0.3 - -
================================================ ========= ========= ======== =========
Acquisition and integration costs 49.1 3.5 59.7 4.7
================================================ ========= ========= ======== =========
Restructuring and reorganisation costs 77.6 5.5 8.6 0.7
================================================ ========= ========= ======== =========
Onerous contracts associated with COVID-19 47.3 3.3 - -
================================================ ========= ========= ======== =========
Other items associated with COVID-19 5.3 0.4 - -
================================================ ========= ========= ======== =========
Subsequent remeasurement of contingent
consideration (3.1) (0.2) 3.2 0.2
================================================ ========= ========= ======== =========
VAT
charges - - 1.8 0.1
================================================ ========= ========= ======== =========
Loss on disposal of subsidiaries and operations 8.4 0.6 95.4 7.6
================================================ ========= ========= ======== =========
Finance
income (8.3) (0.6) (1.2) (0.1)
================================================ ========= ========= ======== =========
Finance
costs 161.8 11.4 13.5 1.1
================================================ ========= ========= ======== =========
Tax related to adjusting items (127.7) (9.0) (83.5) (6.6)
================================================ ========= ========= ======== =========
Earnings for the purpose of adjusted basic
EPS/adjusted basic EPS (p) 140.9 9.9 644.7 51.2
------------------------------------------------ --------- --------- -------- ---------
Effect of dilutive potential Ordinary
Shares (p) - - - (0.2)
================================================ ========= ========= ======== =========
Earnings for the purpose of adjusted diluted
EPS/adjusted diluted EPS (p) 140.9 9.9 644.7 51.0
------------------------------------------------ --------- --------- -------- ---------
1. Restated for share placement (see Note 3).
13. Goodwill
GBPm
------------------------------ -------
Cost
============================== =======
At 1 January 2019 6,464.9
------------------------------ -------
Additions in the year (1) 128.3
------------------------------ -------
Disposals (149.7)
------------------------------ -------
Exchange differences (182.4)
============================== =======
At 1 January 2020 (1) 6,261.1
============================== =======
Additions in the year 57.5
============================== =======
Disposals (0.8)
============================== =======
Exchange differences (79.9)
============================== =======
At 31 December 2020 6,237.9
============================== =======
Accumulated impairment losses
============================== =======
At 1 January 2019 (121.0)
============================== =======
Disposals 1.1
============================== =======
Impairment loss for the year (0.9)
============================== =======
Exchange differences 4.1
============================== =======
At 1 January 2020 (116.7)
============================== =======
Disposals 0.8
============================== =======
Impairment loss for the year (592.9)
============================== =======
Exchange differences 47.5
============================== =======
At 31 December 2020 (661.3)
------------------------------ -------
Carrying amount
------------------------------ -------
At 31 December 2020 5,576.6
============================== =======
At 31 December 2019 (1) 6,144.4
============================== =======
1. 2019 restated for updates to provisional acquisition
accounting (see Note 3).
The Group tests for impairment of goodwill at the business
segment level (see Note 5 for business segments) representing an
aggregation of CGUs reflecting the level at which goodwill is
monitored. Intangible assets are tested for impairment at the
individual CGU level. The impairment testing of goodwill involved
testing for impairment at a segment level by aggregating the
carrying value of assets across CGUs in each Division and comparing
this to value in use calculations derived from the latest Group
cash flow projections.
There were five groups of CGUs for goodwill impairment testing
in 2020 and these were identical to the business segment reporting
detailed in Note 5 (2019: five CGU groups).
Carrying Amount Carrying Amount Number Number
31 December 31December of of
2020 2019 CGUs CGUs
CGU groups GBPm GBPm 2020 2019
================= =============== =============== ====== ======
Informa
Markets 3,598.8 3,848.3 6 8
================= =============== =============== ====== ======
Informa
Connect 328.3 436.7 3 5
================= =============== =============== ====== ======
Informa
Tech 433.3 678.0 1 1
================= =============== =============== ====== ======
Informa
Intelligence 678.6 648.0 4 4
================= =============== =============== ====== ======
Taylor & Francis 537.6 533.4 1 1
================= =============== =============== ====== ======
5,576.6 6,144.4 15 19
================= =============== =============== ====== ======
Impairment review
As goodwill is not amortised, it is tested for impairment at
least annually, or more frequently if there are indicators of
impairment. During the year, an impairment indicator was identified
in three of our groups of CGUs, namely the business segments which
derive the majority of their revenue from operating physical
events: Informa Markets, Informa Tech and Informa Connect. This was
as a result of the containment measures to prevent the spread of
COVID-19 and the resulting reduction in forecast events
revenues.
The outbreak of COVID-19 has led to the cancellation or
postponement of the majority of physical events since March 2020,
and therefore a reduction in the revenue generated by these
businesses. The short term and potential longer-term impact was
considered as an indicator of impairment. Because of this, an
impairment analysis was carried out at 30th June 2020 and an
impairment of GBP592.9m was recognised. Due to the ongoing
restrictions, and in line with our accounting policy, an annual
impairment review was performed on 31 December 2020. The testing
involved comparing the carrying value of assets in each cash
generating unit (CGU) with value in use calculations or assessments
of fair value less costs to sell, derived from the latest Group
cash flow projections.
At 30 June, long term growth rates were 2.3% for Informa
Markets, 1.7% for Informa Connect and 1.9% for Informa Tech. The
pre-tax discount rates were 10.1% for Informa Markets, 10.7% for
Informa Connect and 11.8% for Informa Tech.
The goodwill impairment test at 30th June 2020 resulted in an
impairment to the following CGU groups
Impairment of goodwill Year ended Year ended
31 December 31 December
2020 2019
GBPm GBPm
======================= ============ ============
Informa
Markets 231.1 -
======================= ============ ============
Informa
Connect 105.9 -
======================= ============ ============
Informa
Tech 255.9 -
======================= ============ ============
Total 592.9 -
======================= ============ ============
Management have used the following assumptions in their
impairment analysis as at 31 December 2020:
Key assumption
Projected cash flows
For 2021, management have used the budget to provide the
forecast for the year. For the periods 2022-2025, management have
made a judgement as to the likely shape and length of recovery in
the sectors they operate. Management's short to medium term
forecasts from 2022 to 2025 reflect a deeper economic impact and
slower recovery on the events industry when compared to GDP
forecasts for the same period in the relevant geographies. This is
based on management expecting large scale physical events to be one
of the last parts of the economy to return to normal trading
levels
Considering these inputs to the financial forecasts, this
results in a recovery to 2019 cash flow levels for the events
revenues for these CGUs over the course of the period from 2021 to
2025. These projections represent the directors' best estimate of
the future performance of these businesses. For non-events
revenues, there is a stable growth trajectory over the medium to
longer term.
Across each of these time horizons, management have considered
external metrics, market data and publicly available economic
outlooks, taking these into account when determining the
estimate.
Long-term growth rate
For the Group's value in use calculation, a perpetual growth
rate has been applied to the 2025 operating cash flow. Long-term
growth rates are based on external reports on long-term GDP growth
rates for the main geographic markets in which each CGU and
Division operates and therefore are not considered to exceed the
long-term average growth prospects for the individual markets. Long
term growth rates have not been risk adjusted to reflect any of the
uncertainties noted above, as these uncertainties are reflected in
the forecasts.
Discount rate applied
We have calculated the weighted average cost of capital for each
CGU and CGU group. For the cost of debt, we have considered market
rates, based on entities with a comparable credit rating. The cost
of equity is calculated using the Capital Asset Pricing Model
(CAPM). Discount rates have not been risk adjusted to reflect any
of the uncertainties noted above, as these uncertainties are
reflected in the forecasts.
Management have concluded that there was no impairment indicated
in the impairment test conducted as at 31 December 2020, noting
headroom as follows:
Headroom Long-term market Pre-tax discount
on CGU groups growth rates rates
2020
============================= ============== ================== ==================
Key assumptions and headroom GBPm 2020 2019 2020 2019
============================= ============== ======== ======== ======== ========
Informa Markets 170.4 2.5% 2.2% 11.1% 9.3%
============================= ============== ======== ======== ======== ========
Informa Connect 64.7 1.8% 1.7% 11.7% 9.6%
============================= ============== ======== ======== ======== ========
Informa Tech 44.1 2.0% 1.9% 11.3% 10.9%
============================= ============== ======== ======== ======== ========
Informa
Intelligence 894.7 1.9% 1.7% 10.4% 10.2%
============================= ============== ======== ======== ======== ========
Taylor & Francis 2,337.3 1.7% 1.6% 8.8% 8.9%
============================= ============== ======== ======== ======== ========
The headroom shown above represents the excess of the
recoverable amount over the carrying value.
Sensitivity analysis
The sensitivities provided represent areas assessed by
management to be a key source of estimation uncertainty.
Key uncertainties relate to the depth of the economic impact
from COVID-19 containment measures, the speed of recovery, and the
variability in impact across the geographies in which the group
operates, which may impact our future cash flows, discount rates
and LTGR.
Our cash flow sensitivity analysis scenario considers a
potentially extended and severe restriction on our ability to run
events into the future. The sensitivity specifically considers the
impact on cash flows if COVID-19 restricted our ability to run
events outside of Mainland China in 2021, as well as the impact
that would have on our business in the medium to longer term.
When taken together these would be equivalent to a further 11.9%
reduction in cash flow from 2021 to 2025.
Sensitivity analysis scenarios also considered changes to the
key assumptions including the rate of WACC and LTGR. We based this
sensitivity analysis on reasonably possible changes to the cost of
capital and LTGR in the markets in which we operate.
These sensitivities show the impact of WACC rates increasing by
1.0% and LTGR reducing by 1.0%.
The results from the sensitivity analysis would indicate the
following impairments to CGU groups, in addition to the GBP592.9m
impairment that has been recorded in the results for the year:
Cash flow WACC rates increasing LTGR reduction
reduction by 0.5% by 1.0%
GBPm GBPm GBPm
--------------------- ---------- --------------------- --------------
Informa Markets (603.8) (393.5) (256.1)
===================== ========== ===================== ==============
Informa Connect (30.5) - -
===================== ========== ===================== ==============
Informa Tech (16.7) (39.1) (22.0)
===================== ========== ===================== ==============
Informa Intelligence - - -
===================== ========== ===================== ==============
Taylor & Francis - - -
===================== ========== ===================== ==============
Total (651.0) (432.6) (278.1)
===================== ========== ===================== ==============
The above sensitivities indicate management's assessment of
reasonably plausible, material changes which could lead to a
further impairment.
14. Business combinations
The provisional amounts recognised in respect of the estimated
fair value of identifiable assets and liabilities for 2020,
acquisitions and payments made in 2020 relating to prior year
acquisitions were:
TrialScope Other acquisitions Deferred Total
GBPm including consideration GBPm
deferred and finalisation
consideration of working
GBPm capital
GBPm
=========================================== ========== ================== =================== =====
Acquisition related intangibles 19.1 3.9 - 23.0
=========================================== ========== ================== =================== =====
Other
intangibles 2.5 - - 2.5
=========================================== ========== ================== =================== =====
Trade and other receivables 1.7 0.2 - 1.9
=========================================== ========== ================== =================== =====
Cash and cash equivalents 3.4 - - 3.4
=========================================== ========== ================== =================== =====
Trade and other payables (1.8) (0.1) - (1.9)
=========================================== ========== ================== =================== =====
Deferred
income (5.2) (0.1) - (5.3)
=========================================== ========== ================== =================== =====
Deferred tax liabilities (4.9) (0.7) - (5.6)
=========================================== ========== ================== =================== =====
Identifiable net assets acquired 14.8 3.2 - 18.0
=========================================== ========== ================== =================== =====
Goodwill 44.8 12.7 - 57.5
=========================================== ========== ================== =================== =====
Total
consideration 59.6 15.9 - 75.5
=========================================== ========== ================== =================== =====
Satisfied
by:
=========================================== ==========================================================
Cash
consideration 57.5 15.9 - 73.4
=========================================== ========== ================== =================== =====
Deferred and contingent cash consideration 1.2 - 8.3 9.5
=========================================== ========== ================== =================== =====
Non-cash
consideration 0.9 - - 0.9
=========================================== ========== ================== =================== =====
Total 59.6 15.9 8.3 83.8
=========================================== ========== ================== =================== =====
Net cash outflow arising on acquisitions:
=========================================== ==========================================================
Initial cash consideration 57.5 15.9 - 73.4
=========================================== ========== ================== =================== =====
Deferred and contingent consideration
paid - - 8.3 8.3
=========================================== ========== ================== =================== =====
Less: cash settlement in 2019 - (1.0) - (1.0)
=========================================== ========== ================== =================== =====
Less: cash acquired (3.4) - - (3.4)
=========================================== ========== ================== =================== =====
Net cash outflow arising on acquisitions 54.1 14.9 8.3 77.3
=========================================== ========== ================== =================== =====
15. Movements in net debt
Net debt consists of cash and cash equivalents and includes bank
overdrafts, borrowings, derivatives associated with debt
instruments, finance leases and other loan note receivables where
these are interest bearing and do not relate to deferred contingent
arrangements
At 1 January Non-cash Cash flow Exchange At 31
2020 Movements GBPm movements December
GBPm GBPm GBPm 2020
GBPm
================================== ============ ============== ========= ============== =========
Cash at bank and on hand 195.1 - 103.2 1.1 299.4
================================== ============ ============== ========= ============== =========
Overdrafts - - - -
================================== ============ ============== ========= ============== =========
Cash and cash equivalents 195.1 - 103.2 1.1 299.4
================================== ============ ============== ========= ============== =========
Bank loans due in less than one - - - - -
year
================================== ============ ============== ========= ============== =========
Bank loans due in more than one
year (56.9) - 61.3 (4.4) -
================================== ============ ============== ========= ============== =========
Bank loan fees due in more than
one year 2.2 0.4 - - 2.6
================================== ============ ============== ========= ============== =========
Private placement loan notes due
in less than one year (152.2) - 153.0 (0.8) -
================================== ============ ============== ========= ============== =========
Private placement loan notes due
in more than one year (1,060.6) 3.7 1,074.8 (17.9) -
================================== ============ ============== ========= ============== =========
Private placement loan note fees 2.7 (2.7) - - -
================================== ============ ============== ========= ============== =========
Bond borrowings due in more than
one year (1,279.1) - (788.3) (43.7) (2,111.1)
================================== ============ ============== ========= ============== =========
Bond borrowing fees 11.0 4.3 - - 15.3
================================== ============ ============== ========= ============== =========
Derivative assets associated with
borrowings 3.9 40.7 - - 44.6
================================== ============ ============== ========= ============== =========
Derivative liabilities associated
with borrowings (22.4) 14.9 - - (7.5)
================================== ============ ============== ========= ============== =========
Lease
liabilities (316.6) (6.8) 37.1 5.5 (280.8)
================================== ============ ============== ========= ============== =========
Finance lease receivables 15.3 (5.4) (2.3) 0.3 7.9
================================== ============ ============== ========= ============== =========
Net
debt (2,657.6) 49.1 638.8 (59.9) (2,029.6)
================================== ============ ============== ========= ============== =========
Included within the net cash inflow of GBP638.8m (2019: inflow
of GBP276.9m) is GBP61.3m (2019: GBP499.7m) of loan repayments,
GBPnil (2019: GBP41.2m) of facility loan drawdowns, GBP788.3m
(2019: GBP433.7m) of proceeds from EMTN bond issuances, and
GBP1,227.8m (2019: GBP143.4m) of private placement repayments.
16. Borrowings
Total borrowings, excluding derivative assets and liabilities
associated with borrowings, are as follows:
2020 2019
GBPm GBPm
========================================================= ======= =======
Current
========================================================= ======= =======
Bank borrowings ($200.0m) - repaid March 2019 - -
========================================================= ======= =======
Private placement loan note ($200.5m) - repaid February
2020 - 152.2
========================================================= ======= =======
Total current borrowings - 152.2
========================================================= ======= =======
Non-current
========================================================= ======= =======
Bank borrowings - revolving credit facility (1) - 56.9
========================================================= ======= =======
Bank debt issue costs (2.6) (2.2)
========================================================= ======= =======
Bank borrowings - non-current (2.6) 54.7
========================================================= ======= =======
Private placement loan note ($385.5m) - repaid November - -
2020
========================================================= ======= =======
Private placement loan note ($45.0m) - repaid November
2020 - 35.0
========================================================= ======= =======
Private placement loan note ($120.0m) - repaid November
2020 - 91.1
========================================================= ======= =======
Private placement loan note ($55.0m) - repaid November
2020 - 41.7
========================================================= ======= =======
Private placement loan note ($76.1m) - repaid November
2020 - 61.8
========================================================= ======= =======
Private placement loan note ($80.0m) - repaid November
2020 - 60.7
========================================================= ======= =======
Private placement loan note ($200.0m) - repaid November
2020 - 151.8
========================================================= ======= =======
Private placement loan note ($130.0m) - repaid November
2020 - 98.7
========================================================= ======= =======
Private placement loan note ($365.0m) - repaid November
2020 - 277.1
========================================================= ======= =======
Private placement loan note ($116.0m) - repaid November
2020 - 90.9
========================================================= ======= =======
Private placement loan note ($200.0m) - repaid November
2020 - 151.8
========================================================= ======= =======
Private debt issue costs - (2.7)
========================================================= ======= =======
Private placement - non-current - 1,057.9
========================================================= ======= =======
Bond borrowings ($350.0m) - repaid in November 2019 -
========================================================= ======= =======
Euro Medium Term Note (EUR650.0m) - due July 2023 583.6 553.4
========================================================= ======= =======
Euro Medium Term Note (EUR700m) - due October 2025 628.5 -
========================================================= ======= =======
Euro Medium Term Note (GBP450.0m) - due July 2026 (2) 450.0 300.0
========================================================= ======= =======
Euro Medium Term Note (EUR500.0m) - due April 2028 449.0 425.7
========================================================= ======= =======
Bond and EMTN borrowings issue costs (15.3) (11.0)
========================================================= ======= =======
Bond and EMTN borrowings - non-current 2,095.8 1,268.1
========================================================= ======= =======
Total non-current borrowings 2,093.2 2,380.7
========================================================= ======= =======
2,093.2 2,532.9
========================================================= ======= =======
1. On 26 November 2020, the Group's RCF was increased by GBP150m
to GBP1,050m. On 14 December 2020 there were extensions to the RCF
resulting in facilities of GBP30m (2019: GBP30m) maturing February
2023, GBP420m (2019: GBP270m) maturing February 2024, GBP60m (2019:
GBP60m) maturing February 2025 and GBP540m (2019: GBP540m) maturing
in February 2026.
2. On 3 November 2020 the Group issued an additional GBP150m
EMTN to increase the borrowings in this tranche to GBP450m (2019:
GBP300m)
Following debt repayments in November 2020 there are no longer
any debt covenants on any of the Group's bank facilities. The Group
does not have any of its property and equipment and other
intangible assets pledged as security over loans.
At 31 December 2020, the Group had private placement loan notes
amounting to $nil (2019: $1,587.6m). All US Private Placement loan
notes were repaid on 6 November 2020, with any associated fees
being recognised in the Income Statement. The decision to repay the
US Private Placement loan notes was taken in 2020.
For the purpose of refinancing the borrowings the Group issued
the following Euro Medium Term Notes (EMTNs), which are debt
instruments traded outside of the US and Canada.
On 22 October 2019 EMTN fixed term loan notes were issued
totalling EUR500.0m with a maturity of 22 April 2028. In addition,
the Group issued the following EMTNs during 2020:
-- EUR700.0m on 6 October 2020 with a maturity of 6 October 2025
-- GBP150.0m on 3 November 2020 with a maturity of 5 July 2026
The average debt maturity on our drawn borrowings is currently
4.8 years (2019: 5.5 years).
The Group maintains the following lines of credit:
-- GBP1,050.0m (2019: GBP900.0m) revolving credit facility, of
which GBPnil (2019: GBP56.9m) was drawn down at 31 December 2020.
Interest is payable at the rate of LIBOR plus a margin.
-- GBP109.7m (2019: GBP152.9m) comprising a number of bilateral
bank uncommitted facilities that can be drawn down to meet
short-term financing needs, of which GBPnil (2019: GBPnil) was
drawn at 31 December 2020. These facilities consist of GBP60.0m
(2019: GBP70.0m), USD 22.3m (2019: USD 22.3m), EURnil (2019:
EUR40.0m), AUD 1.0m (2019: AUD 1.0m), CAD 2.0m (2019: CAD 2.0m),
SGD 2.3m (2019: SGD 2.3m) and CNY nil (2019: 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 (2019: USD 10.0m), EUR7.0m (2019: EUR7.0m), GBP16.0m
(2019: GBP9.0m) and AUD 1.5m (2019: AUD 1.5m).
The effective interest rate for the year ended 31 December 2020
was 3.3% (2019: 3.9%)
17. Notes to the Cash Flow Statement
2020 2019
GBPm GBPm
=========================================================== ========= ======
(Loss)/profit before tax (1,139.7) 318.7
=========================================================== ========= ======
Adjustments
for:
=========================================================== ========= ======
Depreciation of property and equipment 16.8 17.2
=========================================================== ========= ======
Depreciation of right of use asset 30.3 33.1
=========================================================== ========= ======
Amortisation of other intangible assets 332.9 354.3
=========================================================== ========= ======
Impairment - goodwill 592.9 0.9
=========================================================== ========= ======
Impairment - investments 3.9 -
=========================================================== ========= ======
Impairment - acquisition intangible assets 38.5 3.8
=========================================================== ========= ======
Impairment - property and equipment 8.8
=========================================================== ========= ======
Impairment - IFRS 16 right of use assets 36.1 4.6
=========================================================== ========= ======
Share-based
payments 11.2 10.4
=========================================================== ========= ======
Subsequent remeasurement of contingent
consideration (3.1) 3.2
=========================================================== ========= ======
Finance lease modifications (2.2) -
=========================================================== ========= ======
Loss on disposal of businesses 8.4 95.4
=========================================================== ========= ======
Loss on disposal of Plant and equipment and software 0.9 -
=========================================================== ========= ======
Finance
income (15.3) (10.1)
=========================================================== ========= ======
Finance
costs 266.2 134.1
=========================================================== ========= ======
Share of adjusted results of joint ventures
and associates (0.8) (1.5)
=========================================================== ========= ======
Operating cash inflow before movements in working capital 185.8 964.1
=========================================================== ========= ======
Decrease in inventories 7.2 12.3
=========================================================== ========= ======
Decrease in receivables 114.8 20.6
=========================================================== ========= ======
Decrease in payables (148.5) (33.1)
=========================================================== ========= ======
Movements in working capital (26.5) (0.2)
=========================================================== ========= ======
Pension deficit recovery contributions (6.2) (5.4)
=========================================================== ========= ======
Cash generated by operations 153.1 958.5
=========================================================== ========= ======
18. Share Capital
Share capital as at 31 December 2020 amounted to GBP1.5m (2019:
GBP1.3m).
2020 2019
GBPm GBPm
============================================= ============= =============
Issued, authorised and fully paid
============================================= ============= =============
1,502,137,804 (2019: 1,251,798,534) Ordinary
Shares of 0.1p each 1.5 1.3
============================================= ============= =============
2020 2019
Number of Number of
Shares Shares
============================================= ============= =============
At 1 January 1,251,798,534 1,251,798,534
============================================= ============= =============
Issue of new shares in relation to share
placements in 2020 250,318,000 -
============================================= ============= =============
Other issue of shares 21,270 -
============================================= ============= =============
At 31 December 1,502,137,804 1,251,798,534
On 15 April 2020 the Company announced a share placement of
250,318,000 new Ordinary Shares in the capital of the Company,
representing approximately 19.99% of the Company's existing issued
share capital. 125,159,000 new Ordinary Shares were issued on 20
April 2020 and a further 125,159,000 on 5 May 2020. The shares were
issued at GBP4.00 per share resulting in gross proceeds of
GBP1,001.3m and net proceeds of GBP973.7m.
19. 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.
Other related party disclosures
At 31 December 2020, Informa Group companies have guaranteed the
UK 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 2020, 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
GBP0.5m (2019: GBP0.2m) with a balance of GBP0.2m (2019: GBP0.2m)
outstanding at 31 December 2020.
Glossary of terms: Alternative Performance Measures
The Group provides adjusted results and underlying measures in
addition to statutory measures, in order to provide additional
useful information on business performance trends to Shareholders.
The Board considers these non-GAAP measures as the most appropriate
way to measure the Group's performance because it aids
comparability to the prior year and is also in line with the
similarly adjusted measures used by peers and therefore facilitates
comparison.
The terms "adjusted" and "underlying" are not defined terms
under IFRS and may not therefore be comparable with similarly-
titled measurements reported by other companies. These measures are
not intended to be a substitute for, or superior to, IFRS
measurements. The Financial Review provides reconciliations of
alternative performance measures (APMs) to statutory measures and
also provides the basis of calculation for certain APM metrics.
These APMs are provided on a consistent basis with the prior
year.
Adjusted results and adjusting items
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 book lists, journal titles, acquired
databases and brands related to exhibitions and conferences,
acquisition and integration costs, profit or loss on disposal of
businesses, restructuring costs and other items that in the opinion
of the Directors would impact the comparability of underlying
results. Adjusting items are detailed in Note 8 to the Consolidated
Financial Statements.
Adjusted results are prepared for the following measures which
are provided in the Consolidated Income Statement on page 21:
Adjusted operating profit, Adjusted net finance costs, Adjusted
profit before tax (PBT), Adjusted tax charge, Adjusted profit after
tax (PAT), Adjusted earnings, and Adjusted diluted earnings per
share. Adjusted operating margin, Adjusted tax rate and Adjusted
EBITDA are used in the Financial Review on pages 9, 13 and 16
respectively.
EBITDA
Adjusted EBITDA is earnings before interest, tax, depreciation,
amortisation and other non-cash items such as share-based payments
and before adjusting items
Covenant-adjusted EBITDA for interest cover purposes under the
Group's previous debt covenants is earnings before interest, tax,
depreciation and amortisation and adjusting items. It is adjusted
to be on a pre-IFRS 16 basis
Covenant-adjusted EBITDA for leverage purposes under the Group's
previous debt covenants is earnings before interest, tax,
depreciation and amortisation and adjusting items. It is adjusted
to include a full year's trading for acquisitions and remove
trading results for disposals, and adjusted to be on a pre-IFRS 16
basis
Effective tax rate
The effective tax rate is shown as a percentage and is
calculated by dividing the adjusted tax charge by the adjusted
profit before tax. The Financial Review on page 13 provides the
calculation of the effective tax rate.
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 and debt
issues or repayments. Free cash flow is one of the Group's key
performance indicators, and is an indicator of operational
efficiency and financial discipline, illustrating the capacity to
reinvest, fund future dividends and repay down debt. The Financial
Review on page 17 provides a reconciliation of free cash flow to
statutory measures.
Interest cover
Debt covenants ceased to apply to all the group's borrowing
facilities from November 2020 following the repayment of debt
subject to debt covenants. Interest cover is calculated according
to the Group's previous debt covenants and is the ratio of
covenant-adjusted EBITDA for interest cover purposes to adjusted
net finance costs and excluding finance fair value items. It is
provided to enable the assessment of our debt position together
with our compliance with these previous specific debt covenants.
The Financial Review on page 19 provides the basis of the
calculation of interest cover.
Leverage ratio
The leverage ratio is calculated according to the Group's
previous debt covenants and is the ratio of net debt to covenant-
adjusted EBITDA for leverage information purposes, and is provided
to enable the assessment of our debt position together with
compliance with these previous specific debt covenants.
Covenant-adjusted net debt is translated using average exchange
rates for the 12-month period and is adjusted to include deferred
consideration payable, to exclude derivatives associated with
borrowings and to be on a pre-IFRS 16 basis. The Financial Review
on page 19 provides the basis of the calculation of the leverage
ratio.
Operating Cash flow and operating cash flow conversion
Operating cash flow is a financial measure used to determine the
efficiency of cash flow generation in the business and is measured
by and represents free cash flow before interest, tax,
restructuring and reorganisation costs. The Financial Review on
page 17 reconciles operating cash flow to statutory measures.
Operating cash flow conversion is a measure of the strength of
cash generation in the business and is measured as a percentage by
dividing operating cash flow by adjusted operating profit in the
reporting period. The Financial Review on page 16 provides the
calculation of operating cash flow conversion.
Underlying measures of growth
Underlying measures of growth refer to revenue and adjusted
operating profit results adjusted for acquisitions and disposals,
the phasing of events, including biennials, the impact of changes
from implementing new accounting standards and accounting policy
changes and the effects of changes in foreign currency by adjusting
the current year and prior year amounts to use consistent currency
exchange rates. Phasing and biennial adjustments relate to the
alignment of comparative period amounts to the timing of events in
the current year. Where an event originally scheduled for 2020 was
either cancelled or postponed there was an adverse impact on 2020
underlying growth as no adjustment was made for these in the
calculation.
The results from acquisitions are included on a pro-forma basis
from the first day of ownership in the comparative period.
Disposals are similarly adjusted for on a pro-forma basis to
exclude results in the comparative period from the date of
disposal. Underlying measures are provided to aid comparability of
revenue and adjusted operating profit results against the prior
year. The Financial Review on page 10 provides the reconciliation
of underlying measures of growth to reported measures of growth in
percentage terms.
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END
FR SELSLEEFSEDL
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April 22, 2021 02:00 ET (06:00 GMT)
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