Our Aim: To create long term value while generating attractive returns for shareholders.
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John Botts
Chairman |
In 2010 our revenues have been restored to 2008 levels, despite the £72m contraction in print and a relatively mixed global recovery. In 2010 UBM revenue grew by 5% to £889.2m. Statutory IFRS operating profit, after exceptional items, increased to £132.3m (2009: £25.8m loss) and basic EPS was 37.3p (2009: 30.9p). 2010 is both about operational progress and building and investing in UBM to prosper in the future.
Our aim
Our main aim is to create long term value and generate attractive returns for shareholders. The dividend graph shows our strong track record of dividend growth for shareholders. For 2010 the Board has announced a second interim dividend of 19.0p (2009: 18.2p) to bring the total dividend for 2010 to 25.0p (2009: 24.2p) representing a 3.3% increase.
The Total Shareholder Return graph shows we outperformed the sector during 2010 although our performance dipped during 2009.
UBM’s strategic progress
As David Levin describes in more detail in his review, our strategy of enhancing our range of quality products and services while expanding our presence in high growth Emerging Markets and attractive business communities, remains unchanged. Through both organic initiatives and targeted acquisitions we are creating a portfolio which will benefit from structural growth going forward.
Initiatives to strengthen UBM’s foundations have included: launching the ‘GEM1’ best practice initiative during the year; investing in our technology, new product development and sales force of PR Newswire, our Targeting, Distribution and Monitoring (‘TD&M’) business; strengthening Data Services (‘DS’) through new products, core database development and geographic expansion; and, enhancing our Online – Marketing Services (‘Online’), particularly in virtual events. Meanwhile our strategy of managing the contraction of the print portfolio continues.
During the year we acquired full or majority interests in 22 businesses. The most notable of these was Canon Communications, which provides UBM with market leading media brands serving the medical device design and advanced manufacturing industry. Canon brings geographically diverse revenues from a complementary electronics community and its events portfolio also lends itself well to geo-cloning. This acquisition and eight others have increased our exposure to the attractive events industry – which now accounts for 54.4% of UBM’s adjusted profit2 (2009: 50.9%) – while the remaining 13 acquisitions have further strengthened the offerings and geographic reach of our TD&M, DS and Online businesses. It is worth noting that in total, Emerging Markets3 now account for 18.7% of UBM’s revenues and 28.6% of adjusted profits (2009: 16.7% and 23.8% respectively).
Our people
Our people are UBM’s key asset and, motivating and supporting them is a major priority for delivering on our strategy. Further details on our people is set out in 'UBM Strategy' section.
During 2010 we have continued to make progress in developing our management talent including re-scoping and expanding the Business Leaders Programme (‘BLP’) and the European Leadership Development Programme (‘E-LDP’) (further details set out in Corporate Responsibility). To reflect the global nature of UBM, programme modules have been hosted in the UK, US and India. 58 people have now graduated from the programmes, nine of whom have since made cross-divisional transfers. We have also introduced a formal mentoring programme of rising managers by board members and senior executives, which facilitates a shared perspective on leadership talent across UBM and enhances engagement of our non-executive directors.
Communication within UBM has continued to develop during 2010. Usage of the Wiki, our online UBM community, has grown 28% and is helping our cross-UBM relationships to grow stronger and multiply with the transfer of knowledge and best practice. Our UBM-wide employee engagement survey highlighted our meritocratic/innovative work environment and commitment to social responsibility as areas of strength. (Further details set out in Corporate Responsibility.)
The Board
Our Board composition provides UBM with a broad range of sector, geographical and management experience. This breadth of knowledge is particularly appropriate given the global nature of UBM, its range of products and services and the emerging digital trends. There is a high degree of engagement with the business and in addition to the usual presentations from divisional CEOs the Board also visited two of our largest exhibitions in Brazil and India and hosted the offsite strategy meeting in India, reflecting the growing importance of Emerging Markets for UBM. (More details set out in Corporate governance statement.)
Corporate responsibility
UBM’s commitment to environmental and social responsibility continues to expand and is a key priority. In Corporate Responsibility section we detail our continued progress in managing our environmental impact and supporting the communities in which we work. Two successes stand out: first, the Non Government Organisation (‘NGO’) Event programme – for the second year running our staff volunteered significant time to organising our second event in São Paulo which had more than 500 exhibiting NGOs (2009: 270) and almost 13,000 visitors (2009: 2,500). NGO Brazil 2011 is in hand and we are soon launching our first Responsible Business conference in the UK. Secondly, we are implementing an internal global environmental reporting system for 156 office locations in 35 countries which significantly improves our ability to monitor and manage our carbon footprint.
In short, UBM has made good strategic progress in 2010. The appointment of executives to cross divisional roles is giving us organisational cohesion and the growing cadre of graduates from our management training programmes is playing an increasingly significant part in directing our businesses. We are investing significantly in organic initiatives as well as in targeted acquisitions. This investment is building our business in Emerging Markets as well as strengthening our existing core operations, increasing our exposure to attractive business communities and improving our ability to capitalise on opportunities created by the digital revolution.
Finally, the Board would like to thank everyone at UBM for their vision and efforts during 2010. We have now largely completed the process to reshape UBM and we have established strong foundations on which to build our business’s future growth.
John Botts
Chairman
United Business Media Limited