Global exhibition, publishing and business information multinational, Informa plc has reported an underlying operating profit of £268m (US$372.8m) on revenues of £1.6bn in its FY2020 results, although its Informa Markets division, which includes exhibitions, was hit hard and saw a 63.5% revenue drop for the year.
The FY plc results also reflect a one-off Covid-19 non-cash impairment of goodwill (£592.9m) and exceptional costs that led to a statutory operating loss of £880.4m (compared to an operating profit of £538.1m) for the year ended 31 December 2019).
Informa also delivered £600m of cost-savings, a 30% reduction in net debt, while securing the balance sheet with over £1bn of liquidity and removed all financial covenants.
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.
Stephen A. Carter (pictured), 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.”
The Informa Markets division, which includes the exhibitions business, was hit particularly hard by Covid-19 and posted revenues for FY2020 of £524.4m against £1,437 for the previous year. A statutory operating loss of £597.4m for FY2020 compared to the pre-pandemic year of 2019 profit of £244.4m. Adjusted loss for FY2020 was £25.7m compared to a £490.6m profit in 2019.
The Informa plc financial statement for FY2020 stressed the company had acted early and decisively from the start of the Covid-19 pandemic, which had “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 £1.7bn and remain cashflow positive throughout,” the financial statement said. If achieved, that would represent a similar revenue outcome to 2020, albeit 2020 had the benefit of 2-3 months of full trading in the B2B Events businesses prior to Covid lockdown.
The extent of any further revenue growth will be dependent on the pace and scale of return of physical events outside of Mainland China, the company noted. “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,” the statement added.
The company also said its customer research confirmed the long-term product and service value of its 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,” Informa said.
“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,” the company statement continued.
“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, among 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.”
On the subject of building a virtual and hybrid platform, the Informa statement noted that, pre-Covid-19, the company had been investing in a range of digital services that complement its 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, among others,” Informa said.
The company reported it was building a unified, centralised platform for collating, curating and managing all its B2B customer profile and behavioural data, with appropriate consents. It has established 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,” Informa said..
In terms of cost and cash management, including around venues, general contractors and marketing, more than £400m of direct savings to adjusted operating profit by the end of 2020 had been made, the company noted.
Annualised net indirect cost savings of £200m+ by the end of 2020, had been made 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 the real estate portfolio;
- Enhanced controls and cash management to secure liquidity and strengthen balance sheet.
