Progress and Performance in 2015
Informa’s performance in 2015 was a credit to the Group, and to every colleague within the Group.
Like many businesses, we overcame challenges in specific markets. Our trading environment was impacted by energy price volatility, adverse currency movements, and geo-political upheaval in several parts of the world. Throughout, we stuck to our plans and I am pleased to report that we are on track with action to:
• Repair and recover our position in Business Intelligence;
• Accelerate our growth and size and scale in Global Exhibitions;
• Maintain our position as a leading publisher in Academic Publishing, with deep content and strong customer relationships; and
• Rethink and re-energise our approach to conferences and learning in Knowledge & Networking by focusing on communities and content.
This Annual Report reflects the progress we achieved in all these areas during 2015.
It was a year in which we improved the management of our business operations, including how we deliver customer support, subscription renewals, cash collection and cash management, and imposed greater discipline around integrating acquisitions into the Group. This effort, combined with Informa’s unique blend of passion, professionalism and personality, helped deliver a strong annual performance.
We have managed to invest at scale in our own business, by acquisition and through organic investment, whilst meeting our commercial performance targets and rewarding our Shareholders. Those Shareholder returns include dividend growth and the share price appreciation we have seen over the past three years, with gains for over 16% of Colleagues who participate in Informa’s employee share ownership scheme ShareMatch.
Over the past year, we have also seen initial benefits emerge from GAP, particularly in the Business Intelligence and Global Exhibitions Divisions. Our Academic Publishing Division has performed with resilience in a steadily changing marketplace, and the Knowledge & Networking Division has been enhanced by a streamlined operating structure under a new Leadership Team.
Improved Financial Performance
In the period covered by this report – the second year of GAP – Informa delivered financial results that reflect the work undertaken to simplify our operating structure, strengthen our systems, enhance our products and extend our customer focus.
Our improved capabilities in these areas, combined with an extended market reach particularly in the US, enabled Informa to generate revenues of £1.2bn for 2015, representing an increase of more than 6.5% on the previous year, and adjusted profits of £365.6m, an increase of almost 10% on the previous year.
//We have managed to invest at scale in our own business whilst meeting our commercial performance targets.//
Importantly, in the fourth quarter all four Divisions returned to growth, which is an important measure of future potential. For the year as a whole, our Global Exhibitions Division represented 22% of our revenues. The Division’s organic revenue grew by 10.5% as successful events and acquisitions contributed strongly to overall performance.
Academic Publishing grew in line with the market in 2015. Some softness in the US Medical Books market and the wider lower level academic market had a marginally negative impact on the Division, but our balanced mix of books and journals, subscription and open access options, print and online formats, and our geographic reach and focus on upper level academia mitigated these negatives.
Business Intelligence moved towards organic revenue growth, reporting negative growth of -1.9% for the full year but moving into positive growth in the fourth quarter. This represents significant progress on its 2014 performance, reflecting improved customer retention. The Division has brought forward its growth ambition and is targeting positive organic growth for the full year of 2016.
We implemented a number of restructuring measures in 2015 in Knowledge & Networking. The Division moved towards a positive growth rate as the year progressed and has put in place a new operating structure for 2016 as part of its plan to generate sustained positive growth.
Overall we have delivered improved free cash flow and a better working capital performance as a result of our simplified operating model, tight financial control, improved subscription renewals and scale in the US market.
Our debt levels remain within our target range at just over two times earnings. The success of these metrics follows measures put in place to improve our financial fitness since 2013. This has given us the flexibility and the confidence to pursue our growth and acceleration strategy.
As the Chairman of the Board noted in his introduction, our performance in 2015 has enabled the Group to exceed the 2% minimum growth in dividend commitment we made at the outset of GAP, increasing the total Dividend Per Share by 4.1% to 20.1p and committing to increase the dividend by at least 4% for the remaining period of the Plan.