COVER ARTWORK 08:Layout 1 25/3/08 14:32 Page 1 Global Information Specialist Mortimer House 37 – 41 Mortimer Street London, W1T 3JH T +44 (0)20 7017 5000 F +44 (0)20 7017 4286 www.informa.com Annual Report and Financial Statements 2007 COVER ARTWORK 08:Layout 1 25/3/08 14:32 Page 2 Informa Annual Report and Financial Statements 2007 What’s Inside Informa provides specialist, high value information to the global Academic & Scientific, Professional, 03 Chairman’s and Chief Executive’s Statement and Commercial markets via Publishing, Events 06 Financial Highlights and Performance Improvement. 08 Chairman’s and At the heart of every Informa product and service is research-based, Chief Executive’s Report proprietary information for a highly targeted expert audience. Informa Business Streams publishes approximately 2,500 subscription based products and services 12 Publishing delivered both electronically and in hardcopy, and 45,000 books. Each year 16 Performance Improvement (PI) Informa produces over 12,000 events around the world powered by a 20 Events marketing database of over 20 million contacts. We have an extensive portfolio Divisions of prominent brands including Lloyd’s List, Routledge, Taylor & Francis, IIR, IBC, 24 Academic & Scientific AchieveGlobal, ESI, Euroforum and Datamonitor. Informa operates in over 80 28 Professional countries, employing more than 10,000 people. 32 Commercial 36 Trading Outlook 40 Financial Review 45 Officers and Advisers 48 Corporate and Risk Information 54 Senior Independent Director’s Report 60 Directors’ Remuneration Report Financial Statements Publishing Performance Events 69 Statement of Directors’ Revenue £495.0m Improvement Revenue £408.8m Responsibilities Pages 12 - 15. Revenue £225.3m Pages 20 - 23. 70 Independent Auditors’ Pages 16 - 19. Report (Group) 71 Consolidated Income Statement 71 Consolidated Statement of Recognised Income and Expense 72 Consolidated Balance Sheet 73 Consolidated Cash Flow Statement Academic & Professional Commercial Scientific 74 Notes to the Consolidated Revenue £393.3m Revenue £396.3m Financial Statements Revenue £339.5m Pages 28 - 31. Pages 32 - 35. Pages 24 - 27. 129 UK GAAP Parent Company Financial Statements 142 Five-Year Summary IMPORTANT: Please note the notices concerning limitations on the liability of Directors 143 Legal Notices under English law and forward-looking statements set out on page 143 of this document. Design and Artwork by - www.dh-design.co.uk This report is printed on Zanders Mega which is made from 50% recycled fibre, the balance is sourced from fully sustainable forests. Zanders Mega is totally chlorine free, 2 • Informa plc Annual Report and Financial Statements 2007 and has been awarded a Nordic Swan environmental label. Chairman’s and Chief Executive’s Statement Your Dividend Informa had another year of significant achievement in 2007. We achieved 9% pro forma revenue growth, 19% pro forma adjusted operating 16.9p profit growth and a 23% adjusted operating profit margin. All three of our business streams, publishing, events and performance improvement, Total dividend traded strongly. All geographies and market sectors performed well. As we connect more of our brands, to more of our media formats to more of our geographies, we are growing a dynamic network of business units that enables us to benefit from 5.6p our size, while keeping the passion and speed of our entrepreneurial roots. Interim dividend We have transformed Informa in recent years. We have built a business based on recurring revenue streams which provides strong defensive qualities, but not at the expense of continuing good growth. 11.3p We are of course aware of the current uncertainty in the financial markets, but Final dividend at this point the board sees no signs in our trading to alter its expectations that Informa will deliver another strong performance in 2008. Our confidence in the future of the business is reflected by a 39% increase in the dividend over 2006. Peter Rigby and David Gilbertson Business Highlights ✓ Academic & Scientific division grows adjusted operating profit by 25% to achieve a 29% margin Strong yield increases and drop through from electronic delivery ✓ Professional division benefits from Performance Improvement extending global reach Non-US revenues increase by 29% ✓ Commercial division growth fuelled by extension of Large Scale Events portfolio and 38% increase in Dubai revenues Informa plc Annual Report and Financial Statements 2007 • 3 Peter Rigby – Chairman The business is now four times the size it was in 2001. 37% of our profits come from the Academic & Scientific markets. Informa plc Annual Report and Financial Statements 2007 • 5 Financial Highlights Revenue by Type Financial Highlights ✓ Revenue £1.13 billion – 9% pro forma growth ✓ Adjusted operating Events 36% Performance Improvement 20% profit £261.0m – 19% Copy sales 14% pro forma growth Subscriptions 27% Advertising 3% ✓ Adjusted operating margin rises above 23% ✓ Strong trading across all three divisions (Academic & Scientific, Revenue by Professional and Commercial) and all three business streams Geography (Publishing, Performance Improvement and Events) ✓ Datamonitor delivers 22% pro forma revenue growth for the full year ✓ Adjusted cash conversion 110% of adjusted operating profit ✓ Total dividend increases 39% ✓ Confident of 2008 outlook United Kingdom 15% North America 37% Continental Europe 29% Rest of the World 19% 6 • Informa plc Annual Report and Financial Statements 2007 Financial Highlights Revenue by Division 2007 2006 Increase Pro forma 1 £m £m % % Revenue 1,129.1 1,039.1 9 9 Operating profit 154.0 128.3 20 Adjusted2 operating profit 261.0 219.1 19 19 Profit before tax 124.4 86.5 Academic & Scientific 30% Professional 35% Adjusted3 profit before tax 202.6 178.1 Commercial 35% Profit for period 100.1 67.8 Adjusted4 profit for period 151.9 132.2 Basic earnings per share (p) 23.4 16.0 Diluted earnings per share (p) 23.3 15.9 Adjusted4 diluted earnings per share (p) 35.5 31.1 Adjusted Operating Dividend per share (p) 16.9 12.2 Profit by Division Adjusted cash conversion5 110% 103% 1. Adjusted for material acquisitions and effects of changes in foreign currency exchange rates. This also adjusts for the reduction in revenue of £18m in 2007 from the new 3GSM contract and the impact of the quadrennial IPEX exhibition which contributed £21m to 2006 revenues. The related adjusted operating profit impact for 3GSM was £nil and for IPEX was £7.7m. 2. Excludes restructuring and reorganisation costs of £7.7m (2006:£7.2m), and intangible asset amortisation of £99.3m (2006: £83.1m). 3. Excludes restructuring and reorganisation costs of £7.7m (2006:£7.2m), non recurring finance costs of £4.6m (2006:£nil), intangible asset amortisation of £99.3m (2006: £83.1m) and profit on disposal of available for sale investments of £33.4m (2006: loss £0.8m). 4. Excludes restructuring and reorganisation costs of £7.7m (2006:£7.2m), non recurring finance costs of £4.6m (2006:£nil), intangible asset amortisation of £99.3m (2006: £83.1m), profit on disposal of available for sale investments of £33.4m (2006: loss £0.8m) and related tax of £26.4m (2006:£27.3m). 5. Adjusted cash generated by operations (note 36) divided by adjusted operating profit. Academic & Scientific 37% Professional 32% Commercial 31% Informa plc Annual Report and Financial Statements 2007 • 7 David Gilbertson – Chief Executive By connecting more of our brands to more of our media formats to more of our geographies, we delivered 19% growth and cemented our market leadership positions. Informa plc Annual Report and Financial Statements 2007 • 9 Chairman’s and Chief Executive’s Report Chairman’s and Chief Executive’s Report Our 2007 performance successfully builds subscription. Its subscriptions renew annually at 90%, upon the excellent results achieved in 2006. constituting a powerful recurring revenue stream. But Datamonitor has high growth too. It achieved a 22% We have built a pool of information assets in Informa which pro forma revenue increase and a pro forma adjusted cover many different vertical markets as well as geographic operating profit rise of 59% for the full year on the same territories, and which deliver content in a broad range of period a year earlier. Datamonitor’s internet-delivered media formats. This is designed to enable us to capture the knowledge centres of international data in the healthcare, different requirements of individual users within industries telecoms, finance, automotive, energy and retail sectors and meet global and local needs with equal proficiency. are all now fully XML coded, enabling users to interrogate We believe that our business now has the characteristics its information intuitively to obtain their own uniquely not only to demonstrate superior growth in expanding customised solutions. economies but also to protect profitability. As we enter 2008 Datamonitor’s products will be Our major acquisition of 2007 contributes significantly to increasingly co-marketed to our conference, publishing both these capabilities. Datamonitor, for which we paid and performance improvement customers and audiences. £510m in July, is an electronic information business serving The inter-relationship between the different parts of six global sectors predominantly through Informa is one of the key contributors to the superior growth we have seen over the last few years. Many large media businesses structure themselves in silos and find it difficult to sell different product types to the same customer bases. At Informa we work hard at making sure we offer as much relevant content as we can, whatever the mode of delivery, to customers likely to find value in it. In so doing we grow and develop brands which our customers trust and return to. The marketing requirements of our conference business, with more than 12,500 events produced in 2007, are such that we have many opportunities to put relevant related products in front of potential customers. Informa benefits here from a unique advantage: our database of 20m names of individual customers, clients and prospects in more than 150 countries across the world.