Daily Mail and General Trust Plc Thursday 29Th September Full Year Pre-Close Trading Update

Daily Mail and General Trust plc Thursday 29th September Full Year Pre-Close Trading Update Paul Zwillenberg, Chief Executive Good morning ladies and gentlemen and welcome to the conference call for DMGT’s Full Year Trading Update. I am Paul Zwillenberg, Chief Executive, and I am joined by Stephen Daintith, Finance Director, and Adam Webster, Head of Management Information and Investor Relations. Thank you for taking the time to join this call this morning. I’m delighted to be speaking to you today, nearly four months into my role as Chief Executive of DMGT. I’d like to share with you some of my initial impressions of the Group and tell you about the actions we are taking to counter some difficult tradition conditions in certain sectors. I will also outline the opportunities we have to deliver good long-term growth. I will be presenting our strategy in more detail at our Full Year Results on 1 December and look forward to seeing many of you there. So, firstly, turning to the trading update itself and our 11-month performance: The Group has produced stable underlying revenues in the 11-month period, and the results for the Full Year are expected to be in line with current market expectations. This has been a resilient performance in increasingly difficult economic conditions across several of our markets. Reported revenues, up 4% year-on-year, benefitted in particular from FX gains related to the stronger US Dollar relative to the British Pound. Overall, our B2B companies generated a solid 2% underlying revenue growth in the 11-month period, with a broadly based positive performance across RMS, dmg information and dmg events. For dmg media, underlying revenues were 2% lower in the period. This is particularly impressive in the context of very challenging market conditions for print advertising and reflects continued strong digital growth. In terms of portfolio management activity, as you know, DMGT has continued with its active approach this year in both acquiring and disposing of businesses. Most recently, Euromoney 1 bought FastMarkets for £13m, extending Metal Bulletin’s capabilities into real-time data delivery. Now, let me turn to my initial impressions: Soon after I joined the Group, it became clear to me that DMGT is at a pivotal point in its long history. The significant organic investment programmes that have been implemented across the Group over the past few years are starting to bear fruit, and have laid the foundations for good long-term growth. The newspaper business, which has faced remarkably challenging market conditions over several years, has produced a resilient set of results year after year and has created, in MailOnline, an engine for future growth. DMGT has also taken some significant M&A and disposal activity to become a more focused portfolio of assets with strong brands and leading market positions. We must now deliver on the excellent revenue and profit potential within the existing portfolio, and our focus therefore will be progressively on operational execution. You will have read in the trading update about the reorganisation initiatives which are now underway at DMGT: It is clear that there are some sectors and businesses that continue to face very difficult market conditions, particularly in print advertising, property information and energy information. We have therefore implemented some reorganisation initiatives, including headcount reductions and office space consolidation, to help protect profitability across the Group. These initiatives will create a greater strategic focus and enable quicker and more effective decision-making, with the aim of generating further opportunities for long-term growth. And I would like to make it clear at this early stage that the reductions in costs will not be at the expense of product investment and quality, as this remains at the cornerstone of DMGT’s future growth. Finally, it will come as no surprise to you that as part of reviewing DMGT’s strategy, we are conducting a strategic review of all our businesses to create greater focus within the portfolio. As a result of the reorganisation programme, we expect to take a cash-related exceptional operating charge in the current financial year of approximately £50 million, rather than the £15 million previously guided to in May. As we’ve indicated, approximately £35 million of the expected costs directly relate to the reorganisation we have instigated. I look forward to providing more detail on these initiatives and on our strategy at the Full Year Results on 1 December. Then, I will also be speaking to you about what I believe are the exciting long-term growth opportunities for DMGT: Firstly, the continued rollout of RMS(one) to support the business’s market-leading risk modelling products. 2 For dmg information, delivering on the range of projects that have been implemented over the past few years. We will continue our investment to harness attractive sector growth prospects. Another area will be delivering profitable growth at MailOnline, a business which as expanded rapidly in recent years and still has significant potential. These are just a handful of examples which support my belief that DMGT has a very good foundation for long-term growth. And finally, turning to recent management changes: As you all will have seen, last week we announced that Stephen Daintith would be standing down as Finance Director. He is to become Finance Director at Rolls Royce plc and I sincerely wish him all the best in his new role, and thank him for all his hard work and dedication and support here at DMGT. Stephen will continue to support to DMGT as CFO pending the appointment of his replacement. The Board has commenced the process to identify appropriate candidates and we will update you in due course. And now I would like to hand over to Stephen, who will give you some more detail on each of our businesses. Stephen Daintith, Financial Director Thank you, Paul. Morning everyone. I’m just going to run through a few of the key figures and dynamics within the different businesses and then we will have our usual Q&A session. So, for the 11-month period, within B2B: RMS’s underlying revenues were up 1% in the period whilst reported revenues increased by 10% due to the strengthening US dollar. The underlying revenue growth is in line with our expectations and has been achieved against a consolidating client environment. Importantly, in July, RMS successfully released the first application to run on RMS(one), Exposure Manager. It is now being licensed and used by a large client and several existing clients are in the final evaluation stage. We look forward to updating you further on this significant milestone at the Full Year results. As expected, amortisation of the RMS(one) asset commenced in August. dmg information delivered a good level of revenue growth in the 11-month period, up 6% underlying and up 16% on a reported basis, helped by the stronger US dollar and acquisitions. In terms of the individual sectors within dmg information: Genscape, our energy business, delivered double-digit underlying growth in the period. Hobsons, our education business, saw underlying growth accelerate in the second half, as we expected, and also delivered underlying double-digit growth over the 11-months. The property information portfolio, which includes Landmark and SearchFlow in the UK and EDR, Trepp, Xceligent, Buildfax and SiteCompli in the US, delivered low single-digit underlying growth. 3 As we flagged at the Q3 trading update in July, trading at SearchFlow, Landmark and EDR has been adversely impacted by continuing low commercial and residential property transaction volumes, especially in the second half. Whilst the underlying growth rate is very slightly below where we thought it would be, I just want to flag that Full Year reported revenue, including the benefit of acquisitions and the stronger US dollar, is still expected to be very much in line with market expectations. Moving on to dmg events: dmg events produced underlying growth of 2% in the 11-month period, reflecting the impact of the weak Canadian energy market on our Global Petroleum Show, which occurred in June. Reported revenues were up a strong 13%, reflecting good performance at the non-annual Gastech event and the stronger US dollar. Euromoney: Euromoney released its pre-close trading update earlier today, although it does not report 11- month figures. Trading has continued in line with expectations since the Q3 update on 21 July. Euromoney continues to face challenging financial market conditions, although subscription revenues in the fourth quarter are expected to accelerate to show underlying growth of 2% and advertising revenue declines remain consistent with long-term trends. Revenues from commodity events and training, however, have deteriorated. For the Full Year, revenues are expected to decline by an underlying 4%, although reported revenues for the Full Year are expected to decrease by 1%, including the benefit of the stronger US dollar. Moving on to our Consumer business: dmg media’s underlying revenues were down 2% in the 11-month period, with continued declines in print advertising revenues being partly offset by the growth in digital advertising revenues and a robust circulation revenue performance. Circulation revenues were supported by the implementation of cover price increases at both The Daily Mail in February and The Mail on Sunday in July. Looking at advertising, total advertising revenues at dmg media were down an underlying 4% in the 11 months, a resilient performance in the context of steep declines in the overall UK print advertising market. Print advertising for our business was down 12% and was partly offset by the 17% growth in digital advertising, which is mainly MailOnline.

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