TIDMINF
RNS Number : 7398P
Informa PLC
12 June 2020
Informa LEI: 5493006VM2LKUPSEDU20
Informa PLC Press Release
12 June 2020
Trading Update
Continued Stability and Strength
London: Informa Group PLC ("Informa" or "the Group"), the
International Exhibitions, Events, Information Services and
Advanced Learning Group, is today providing an update on trading to
coincide with its Annual General Meeting in London, outlining
further progress with its COVID-19 Action Plan and a continuing
focus on managing its Brands and customers for long-term growth and
value creation.
Stephen A. Carter, Group Chief Executive, Informa PLC, said:
"At Informa, our Subscriptions businesses continue to perform resiliently
against a tough market backdrop, whilst our Events businesses -
in the absence of physical exhibitions, events and conferences
- are working closely with customers to provide alternative digital
services, with a focus on long-term relationships ahead of short-term
revenue."
He added:
"The prospect of a return for some of our major Events brands in
Mainland China from July is now real. Elsewhere, we are deploying
AllSecure biosafety measures as permission emerges to operate events,
although we expect the pace and shape of recovery to be gradual
and phased by market. Despite continued near-term unpredictability,
our strengthened balance sheet, continuing cost controls and strong
liquidity is enabling us to focus on the other side of COVID-19.
This includes how to get the most out of Return and Recovery in
2021, and identifying and evaluating future strategic opportunities."
==========================================================================
Current Trading: a mixed picture
As countries and locations around the world steadily relax
pandemic control measures and exit lockdown, it is clear that the
return to normal daily and business life will be phased, with
enhanced hygiene and social distancing measures likely to remain a
feature for some time. For Informa, and the Events-related
businesses in particular, this suggests the pace and shape of
recovery is also likely to be gradual, varying by region, by
customer market and by event format.
Subscriptions-related businesses (c35% of Group revenue in
2019)
Our Subscriptions-related businesses provide an anchor for the
Group and, in the main, continue to trade well. Informa
Intelligence continues to deliver steady growth, supported by solid
subscription renewals and positive annualised contract values. The
business is seeing particular strength across its clinical trials
and drug development brands in the Pharma Intelligence
business.
Similarly, in Taylor & Francis, our journal subscriptions
business remains robust, with consistent renewals and steady
growth, supported by our expanding presence in open access and open
research. Our books business is seeing some increased disruption to
physical book sales from COVID-19 due to product availability and
supply-chain issues, with most universities temporarily closed.
This is being partially offset by stronger e-books revenue.
Events-related businesses (c65% of Group revenue in 2019)
As expected, in the two months since the First Quarter Trading
Update, the Events-related businesses have not traded any physical
product anywhere in the world due to COVID-19. The events teams
have focused on further events rescheduling where possible and,
where not, looked at other ways to engage and provide value to
customers through digital or hybrid events, marketing services and
targeted lead generation.
Looking forward, as expected, there is minimal physical product
scheduled for June but we are now planning to run a number of major
events in China from early July, with China Beauty Expo in Shanghai
the first scheduled major Informa brand to be held on the other
side of the COVID-19 pandemic.
Activity in China has picked up pace through the past month,
with authorities recognising the controlled nature of trade shows
and with exhibitors confident and keen to participate to help
rekindle trading activity. Absent any resurgence of the virus and
reimposition of more restrictive control measures, the outlook for
those brands due to run in the region through the second half looks
encouraging.
Elsewhere, it remains a mixed picture and it is clear that some
locations will take a lot longer to come out of the other side of
COVID-19, both in terms of the permissions and practicalities of
running an event and the confidence of participants to return. For
similar reasons, international travel looks set for a gradual
recovery, which will impact those events more reliant on
international, rather than solely domestic participation.
In Informa's largest market, the United States, the Group is now
assuming a low probability that any physical events will run before
September, with most brands due to run in July/August either
rescheduled, cancelled or switched to a fully digital event,
including Blackhat, our major Cyber Security brand. Even within the
United States, it is clear that the pace of return and recovery
will vary state-to-state, with different local guidelines and
restrictions in place and varying attitudes amongst local
communities.
Informa...All Secure Standard for Events
One of the ways the Group is building permission with
authorities to run events and confidence with Colleagues and
Customers to participate, is by introducing enhanced measures that
raise the level of hygiene and bio-safety at events.
Following collaboration amongst leading organisers, association
partners and a range of suppliers, we have helped to establish the
All Secure standard for the events industry, a best-practice
playbook of processes and guidelines that can be incorporated to
ensure the highest standards of hygiene, safety and
cleanliness.
Informa AllSecure is the adoption of this industry standard for
our business and includes 10 key commitments that all Informa
events will meet in future, ranging from enhanced cleaning
processes, to non-contact registration, the potential use of face
masks and physical distancing measures.
Update on COVID-19 Action Plan
Informa's COVID-19 Action Plan continues to shape the Group's
response to the pandemic, ensuring the company reacts quickly to
the evolving situation, prioritising the safety and wellbeing of
Colleagues and Customers whilst managing the business for long-term
growth and value creation.
This includes continued support for Colleagues, both personally
and professionally, providing flexibility, guidance and support
wherever possible and ensuring everyone has the tools necessary for
effective remote working. In addition, targeted financial
assistance continues to be made available to any Colleagues in
particular hardship due to COVID-19 through the Informa Colleague
Support Fund.
From an operating standpoint, The Postponement Programme is now
largely complete. As part of this, 160+ brands have now been
cancelled or rephased from 2020 to 2021, representing +/-GBP300m
revenue, and a further 300+ brands have committed to a digital
rather than a physical event in 2020. Encouragingly, where events
have been cancelled and the focus shifted to 2021, customer demand
for rebates has been relatively low, underlining the quality of our
brands and pent-up demand for product.
Further rescheduling of events within 2020 is unlikely given the
volume of brands now scheduled in the final four months of the
year, with limited remaining venue capacity available. The brand
schedule is constantly reviewed to assess the likelihood that each
of the Informa events planned will be able to run and the expected
level of exhibitor and attendee participation. This will enable the
Group to make individual brand and event decisions on whether to
continue as planned or shift the focus to 2021.
This review is ongoing, but the early indications suggest that,
at the current pace and rate of recovery outside of China, the
outcome for 2020 is likely to be somewhere between the Vigilant and
Operating Case scenarios that were outlined earlier in the year.
This outlook remains unpredictable, something reflected in the
current range of market forecasts, but based on what we can see
today it implies Group revenue for the year is likely to be
+/-GBP2bn.
In this context, Cost Management remains a key focus across the
Group, albeit there is a balance between managing costs
appropriately in 2020 and managing for capability in 2021. We
continue to recover direct costs where events have been cancelled,
whilst controlling indirect costs sensibly through initiatives such
as an ongoing recruitment freeze, the further deferral of salary
reviews and merit rises, the removal of all discretionary costs and
the extension of voluntary sabbaticals.
In total, GBP400m+ of cost savings have been identified within
adjusted operating profit, including direct savings on events
already cancelled and those that have switched from physical to
digital. The Group continues to review other areas of potential
cost savings, particularly in the context of the continuous
reassessment of our events schedule for the remainder of 2020.
In addition, Financing Control measures continue to be
strengthened to ensure Informa has Stability and Strength to the
other side of the COVID-19 pandemic, whatever the pace and shape of
recovery. In April, we successfully raised GBP1 billion of equity,
significantly strengthening the balance sheet and providing the
flexibility to focus on the long-term strength and value of our
brands and customer relationships.
Constructive discussions with our US private placement debt
holders are ongoing and a decision on when or whether to change
these discussions to a formal request for a covenant waiver will be
made once there is greater visibility on the performance of the
Events businesses in the second half of the year.
2020 Half-Year Results
Given all of the above, it is our intention to publish the 2020
Half-Year Results after the Summer in September (date to be
confirmed), when we anticipate greater clarity on the pace and
shape of recovery of Informa's Events-related businesses through to
the year-end.
Enquiries
Informa PLC
Stephen A. Carter, Group Chief Executive
Gareth Wright , Group Finance Director +44 (0)20 7017 5771
Richard Menzies-Gow , Director of IR +44 (0)20 7017 7096
& Comms +44 (0)20 3377 3445
Teneo
Tim Burt +44 (0) 7583 413254
Zoe Watt +44 (0) 7713 157561
========================================== =====================
Notes to Editors
Informa Group PLC
Informa is a leading international Exhibitions, Events,
Information Services and Scholarly Publishing Group. It helps
commercial, professional and academic communities work smarter and
make better decisions faster, through specialist content and
intelligence, and opportunities to connect and learn. For more
information, please visit www.informa.com .
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