2002 interim results

1

2002 INTERIM RESULTS 2002 INTERIM RESULTS

Continuing turnover (£m)

PBT * (£m)

EPS * (p)

Dividend per share (p)

Net cash (£m)

Margin (%)

Financial Results Financial Results Six month performance

20022002H1H1

2001H2

2001H1

*before exceptionals and amortisation of intangibles

441.1

25.1

6.3

1.0

49.3

4.9

412.8

40.7

8.9

3.0

50.4

8.8

489.4

71.7

11.8

11.0

250.7

12.2 2

3United Business Media

2002 Review of First Half 2002 Review of First Half YearYear

Very challenging market conditions

Strong performance from businesses in Asia, UK and Europeunderlying profit of £21m, up 68% on £13m in H1 2001

Lower US revenue mitigated by continuing action on costs CMP Media revenue down 38 % on 2001PR Newswire revenue down 21 % on 2001

Market share gains continueNOP UK sales up 3% to end July, BMRA down 2.6% to end JunePRN Disclose over 10% of LSE announcementsCMP Media H1 29% vs 25%


2002 Review of First Half 2002 Review of First Half YearYear

Improvement on second half of 2001EPS of 8.9p vs 6.3p

Additional £55m of cost savings secured Now total of £165m (24%) off 2000 fixed cost base

113.5% cash conversion – net cash positive £50.4 m

Balance sheet strength is a competitive advantageControlling costs to deliver profits


Implementation of StrategyImplementation of StrategyBuilding a leader in business information by investing in core businesses

Emphasis on products and value

Organic investment programme increased to extend product range

Improving competitive position

Improving operational leverage

Retaining strong balance sheet

Building and realising value in non core assets


Key Investor IssuesKey Investor Issues

Leverage

Quality of Earnings

Acquisition Risk

Dependency on US High Tech

Longer Term Growth

No net borrowings

Over 100% cash conversion andprudent accounting policies

Committed to areas of expertise

Cautious on values

High Tech currently loss making

Attractive upside potential

Market leading positions in growth markets

GENERAL MARKET ISSUES

UBM SPECIFIC ISSUES


OutlookOutlook

UK, Asia and Europetrading well, with strong margin growth in UK

UScontinuing low visibilitytrading climate difficult with deflationary pressures and no expectation of any improvement in 2002

NOPUK and US syndicated trading wellHealthcare and US ad hoc revenue pressures


OutlookOutlook

PR Newswirecorporate scandals and cost pressure curtailing client expenditure

CMP Mediaplanning assumption

• dollar revenues down 45 per cent on 2000further efficiencies being delivered

• approaching break-even in H2

Marginon target to improve margins in H2 to 9% to 10% (4.9% H2 2001)

2003 margins should improve to in excess of 11%

9

FINANCIAL REVIEW


Continuing turnover (£m)

Continuing operating profit* (£m)

Discontinued operating profit* (£m)

Total operating profit* (£m)

Interest (£m)

PBT * (£m)

Taxation* (£m)

EPS * (p)


Financial Results Financial Results Six months to 30 June

20022002 2001 Change %


489.4

59.5

(19.1)

40.4

31.3

71.7

(14.3)

11.8

11.0

412.8

36.4

-

36.4

4.3

40.7

(9.8)

8.9

3.0

(15.7)

(38.8)

-

(9.9)

(86.3)

(43.2)

(31.5)

(25.0)

-


Turnover (£m)

Total operating profit* (£m)

Interest (£m)

PBT * (£m)

Taxation* (£m)

EPS * (p)


Financial Results Financial Results 1st half 2002 Vs 2nd half 2001

20022002H1H1

2001H2 Change

%


412.8

36.4

4.3

40.7

(9.8)

8.9

3.0

441.8

20.6

4.5

25.1

(10.7)

6.3

1.0

(6.6)

76.7

(4.4)

62.2

8.4

41.3

-


Operating profit (before goodwill & exceptionals)

Depreciation

Capex

Working capital/other

Operating cash inflow

Cash conversion

20022002£m’s£m’s

36.4

12.1

(5.8)

(1.4)

41.3

113.5%

Cash ConversionCash ConversionSix months to 30 June

Further Cash FlowsFurther Cash FlowsSix months to 30 June

Operating cash inflow

Investments (including Channel 5)

Dividends paid

Tax refunded

Net interest paid

Payments relating to prior year disposals

Payments against restructuring and exceptionals

Other

Increase in cash in the period

20022002£m’s£m’s

41.3

(6.1)

(4.3)

14.4

(5.5)

(25.0)

(23.3)

9.6

1.1 13


Segmental AnalysisSegmental AnalysisSix months to 30 June

20022002£m£m

20022002£m£m

Group TurnoverGroup Turnover Operating Operating ProfitProfitChange

%Change

%Underlying

%Underlying

%

NOP World

PR Newswire

CMP Media

CMP Asia

CMP Information

UAP

Total Continuing

101.5

57.5

136.5

25.5

62.3

29.5

412.8

33.4

(20.5)

(37.8)

5.8

(8.1)

-

(15.7)

11.4

12.3

(9.2)

7.7

7.3

6.9

36.4

7.5

(42.8)

-

(6.1)

-

43.8

(38.8)

(6.8)

(21.2)

(31.2)

(7.7)

(5.9)

-

(18.9)

(5.9)

(30.5)

-

(6.2)

-

57.8

(43.0)


UBM by GeographyUBM by GeographySix months to 30 June 2002

UK28.9%

US 64.7%

E&ME0.8%

Asia5.6%

REVENUE

UK39.3%

US43.4%

Asia17.3%

OPERATING PROFIT


Investment CriteriaInvestment Criteria

Net debt capacity around £400m

minimum interest cover of 5 times

conservative approach to financing

Acquisition financial criteria

cost of capital 8%

generally eps enhancing first full year


Investment Criteria Investment Criteria

Investment targets

exhibitions - break even in year 2

organic - 2 to 4 year payback

benchmarked against returns on buying back shares

Acquisition and investment performance

mixed performance from acquisitions

integration and cost benefits on track

impacted by general US economic pressures

organic initiatives on target


ACCOUNTING CHECKLISTACCOUNTING CHECKLIST

Off balance sheet financing/SPV

Capitalisation of costs

Reported sales revenue

Restructuring costs

“Underlying” growth rates

Goodwill amortisation period

FRS17

Derivatives

Balance sheet

None

None

No % completion accounting

2002 costs expensed

Acquisitions stripped out

Lives shortened to ten years

£60m deficit

Fully disclosed

Net cash positive

19

OPERATIONAL REVIEW


Delivery of Performance Delivery of Performance TargetsTargets

Cost savings

Margins

Market Share

Successful organic investments

A Stronger Business for Today AND TOMORROWA Stronger Business for Today AND TOMORROW

Constantly Improving Operational Constantly Improving Operational EfficiencyEfficiencyCost savings Vs 2000 fixed cost base

August 2001

March 2002

August2002

£60m

£110m

£165m

700Staff

1400Staff

1900Staff

Staffing down by over 30% inPRN, CMP Media and CMPi

21

Operational ObjectivesOperational Objectives Margin TargetsMargin Targets

2001H1

MediumTerm

2002H2

12.2%9% to10%

15%

8.8%

2002

H1

4.9%

2001H2

2003

11% +

22


NOP World - Market NOP World - Market ResearchResearchSix months to 30 June

20022002£m£m

2001£m

Change%

Underlying%

Turnover

US

RoW

Operating profit

US

RoW

Margin

70.6

30.9

101.5

8.0

3.4

11.4

11.2%

43.9

32.2

76.1

8.2

2.4

10.6

60.8

(4.0)

33.4

(2.4)

41.7

7.5

(4.7)

(9.6)

(6.8)

(24.4)

56.5

(5.9)


NOP WorldNOP WorldSix months to 30 June 2002

Revenue and profit boosted by acquisitions

Underlying revenue down 6.8% and profit down 5.9%

Downturn in health sector, especially US

Underlying margin 13.6% holding firm on last year

Roper pre-acquisition had margins of 5%

Strength in syndicated and in UK

Rapid growth in online research


NOP WorldNOP WorldActions and outlook

Intensified client focus

Key new client wins

Healthcare issues peculiar to FDA pipeline & drugs off patent

Pipeline of product launches continues

Market growth outlook: UK and US both flat to down

NOP US: broadly in line with market

NOP UK: positive growth, better than market


PR Newswire - News PR Newswire - News DistributionDistributionSix months to 30 June

20022002£m£m

2001£m

Change%

Underlying%

Turnover

US

RoW

Operating profit

US

RoW

Margin

51.1

6.4

57.5

13.4

(1.1)

12.3

21.4%

64.3

8.0

72.3

22.3

(0.8)

21.5

(20.5)

(20.0)

(20.5)

(39.9)

(37.5)

(42.8)

(20.9)

(23.4)

(21.2)

(31.2)

(100.0)

(30.5)


Volume down 13.2% and revenue per message down 5.6%

cautious customers trading down

continuing absence of M&A, IPO’s

in market turmoil corporates want low profile

30% reduction in staff since end of 2000

Robust performance from key evaluation products

grown from 13% to 15% of turnover

60% Fortune 500

News DistributionNews DistributionSix months to 30 June 2002


Action on margins to mitigate effect of market conditions

Corporate publicity aversion is temporary

Investors and regulators will increase disclosure


building on strength of “evaluation” products

Market share gains in both US and UK,

UK Disclose taking market share faster than expected

News DistributionNews DistributionActions and outlook


Operating Profit

Professional MediaProfessional Media: CMP : CMP MediaMediaSix months to 30 June

Turnover

(9.2) 14.0 -

20022002£m£m

2001£m

Change%

Underlying%

136.5 219.6 (37.8

)(31.2

)

-


CMP Media CMP Media Six months to 30 June 2002

Loss of £9.2m this half Vs £22.2m in second half of 2001

additional revenue pressure

further significant cost reductions realised in first half 2002

Significant market share gains: 28.7% Vs 24.6% last year

Yields down 11.2% on H1 2000, in line with H2 2001

Growth in revenue & margin driving medical division forward

CMP MediaCMP MediaActions and outlook

Now planning on $ revenue down around 45% on 2000 continuing levels

Further cost savings in H2 should still leave profits in line with expectations

37% reduction in staff since end 2000

approaching breakeven in second half 2002

Balance sheet strength ensuring improved competitive position

consolidating leveraged position for market recovery

Further process improvements in 2003


Limited visibility, industry indicators suggesting gradual recovery

31


Operating Profit

Professional MediaProfessional Media: CMP : CMP AsiaAsiaSix months to 30 June

20022002£m£m

2001£m

Change%

Underlying%

Turnover 25.5 24.1 5.8

7.7 8.2 (6.1)

(7.7)

(6.2)

Margins over 30%, above budget

KSS acquisition in Japan performing well

Over 13,000 sq mtrs for 3 new events successfully launched

Weak US events – cruises and leather down after Sept 11

Record year in jewellery fairs – fashion jewellery up 23%

Operating Profit

Professional MediaProfessional Media: CMP : CMP InformationInformationSix months to 30 June20022002

£m£m2001£m

Change%

Underlying%

Turnover

62.3 67.8 (8.1) (5.9)

7.3 0.4 - -

Margins transformed, over 11.7% compared to breakeven last year

Radical cost cutting programme

36% reduction in staff since end 2000

nine titles/events either closed or merged

Five new launches:

including IFSEC Shanghai, Firex South and Intra 33


UAP - Consumer MediaUAP - Consumer MediaSix months to 30 June

Strong increase in margins from 16% to 23%

Significant cost savings

Strength in used car and homes & leisure markets

• boosted Exchange & Mart

Recovery from impact of foot and mouth

• boosted Dalton’s Weekly

Auto Exchange titles now moved into profit

29.5 29.5 - -

20022002£m£m

2001£m

Change%

Underlying%

Turnover

6.9 4.8 43.8 57.8Operating Profit


20022002£m£m

2001£m

Change%

Turnover

Operating profit

Channel 5Channel 5Six months to 30 June

113.7

(2.2)

98.2

(17.8)

15.8

-

Audience share up to 6.4% (5.6%)

Advertising share up to 7.3% (6.2%)


United Business MediaUnited Business MediaStrategic Priorities

Managing effectively in very challenging markets

Investing in products to build market share and drive growth

A time of opportunity for the prudent

On course to again improve margins in second half and 2003

Breakdown of Net Cash and Breakdown of Net Cash and Interest Interest First half 2002 30 June

2002£m

AverageBalance

£m

Interest Rate

% InterestInterest

£m£m

737

(687)

50

154

815

(766)

3.8

4.0

15.5

(15.5)

4.3

4.3

Cash

Debt

Net Cash

Channel 5*

Net Interest

*C5 loan includes shareholder funding loans and working capital** £180m convertible bond repaid Jan 02

**

38


Source: IMS/Auditor

0%

5%

10%

15%

20%

25%

30%

35%

CMP Media

IDG

ZD

Reed Business

Penton

2000 2002

2001

Monthly Market Share Analysis by Ad Page Volumes

CMP Media – High-techCMP Media – High-tech


CMP Media US RevenuesCMP Media US RevenuesRestated to exclude closures

H1 2002

H1 2000

Continuing revenues $m

Ad page volumes – Month of

June

Ad page volumes – YTD June

329.7

3,585

18,992

189.3

2,015

11,615

Change%

(42.6)

(43.8)

(38.8)


CMP Media US RevenuesCMP Media US Revenues2000 restated to exclude closuresTwelve months to 31 December

2001$m

2000$m

As reported

Titles and events

closed

Continuing revenues

741

(88)

653

501

(43)

458

Semiconductor Worldwide Semiconductor Worldwide MarketMarketThree Month Moving AverageThree Month Moving Average

02468

101214161820

2000 2001 2002

$Bn’s

Source: Semiconductor Industry Association42

Semiconductor Worldwide Semiconductor Worldwide MarketMarketThree Month Moving AverageThree Month Moving Average

$Bn’s

Source: Semiconductor Industry Association

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

Europe Japan Americas Asia Pacific

2002 to end of May

43

Investment confidence has not changed significantly in the UK and the US between March and July 2002.

In the US and UK, growth rates of around 4% in IT spending are predicted for 2002 compared to 2001.

Confidence in Germany is lower than in the other markets, with an increase of only 0.2% expected for the full year 2002 compared to 2001.

There are moderate levels of optimism for 2003 however in all three markets, with predicted increases in expenditure of between 5% and 7% compared to 2002.

The top product areas for growth in 2002 are Security software, Web-based applications, High-speed data transmission (broadband) and Virtual Private Networks, while Consulting and Outsourcing are the areas where zero growth is forecast this year.

Technology Confidence BarometerTechnology Confidence Barometer

RoperNOPRoperNOP: July 2002: July 2002

44

Operating Profit

CMP Media

CMP Asia

CMP InformationTotal

Professional MediaProfessional MediaSix months to 30 June

20022002£m£m

2001£m

Change%

Underlying%

Turnover

CMP Media

CMP Asia

CMP Information

Total

136.5

25.5

62.3

224.3

219.6

24.1

67.8

311.5

(37.8)

5.8

(8.1)

(28.0)

14.0

8.2

0.422.6

-

(6.1)

-(74.3)

(31.2)

(7.7)

(5.9)

(23.7)

-

(6.2)

-(84.3)

(9.2)

7.7

7.35.8

45


UBM by Revenue TypeUBM by Revenue TypeSix months to 30 June 2002Continuing turnover

64.5%Information

Services

20.3%High TechAdvertising

15.2%Other

Ad’

High Tech Advertising is currently loss making

2002 interim results

Documents