Annual Report & Accounts 2013 Annual Report & Accounts 2013 Annual Report & Accounts Euromoney Institutional Investor PLC Euromoney Institutional Investor PLC 22706.04 13 December 2013 6:27 PM Proof 4 Euromoney Institutional Investor PLC www.euromoneyplc.com Euromoney Institutional Investor PLC is listed on the London Stock Exchange and is a member of the FTSE 250 share index. It is a leading international business-to-business media group focused primarily on the international finance, metals and commodities sectors. The group publishes more than 70 titles in both print and online, including Euromoney, Institutional Investor and Metal Bulletin, and is a leading provider of electronic research and data under the BCA Research, Ned Davis Research and ISI Emerging Markets brands. It also runs an extensive portfolio of conferences, seminars and training courses for financial markets. The group’s main offices are in London, New York, Montreal and Hong Kong and more than a third of its revenues are derived from emerging markets. “We have continued, and will continue, to invest across the business to drive organic growth and through selective acquisitions. The five businesses acquired since the beginning of last year build on our existing strengths but also take us into exciting new sectors. First quarter trading in the new financial year is in line with the board’s expectations and sentiment in financial markets remains broadly positive. This encourages us to believe that we can continue to grow our revenues and gives us confidence that our investment programme for the digital Visit us online transformation of our businesses, in www.euromoneyplc.com particular via the Delphi content management system, is the right strategy to pursue.” Richard Ensor Chairman 22706.04 13 December 2013 6:27 PM Proof 4 Annual Report and Accounts 2013 01 Highlights Contents Overview Highlights 01 Our Divisions 02 Chairman’s Statement 04 Overview Revenue Adjusted Operating Profit* Appendix to Chairman’s Statement 07 Highlights Strategy and Performance £404.7m £121.1m Strategic Report 08 2013 404.7 2013 121.1 Directors’ Report 30 Directors’ Responsibility Statement 32 2012 394.1 2012 118.2 2011 363.1 2011 109.0 Operating Profit Adjusted Profit before Tax* Governance Directors and Advisors 33 Corporate Governance 35 £105.6m £116.5m Corporate and Social Responsibility 44 2013 105.6 2013 116.5 Directors’ Remuneration Report 49 Report from the Chairman of the Governance 2012 95.9 2012 106.8 Remuneration Committee 49 Remuneration Policy Report 52 2011 77.8 2011 92.7 Annual Report on Remuneration 58 Profit before tax Adjusted Diluted Earnings per Share* £95.3m 71.0p 2013 95.3 2013 71.0 Financial Statements Group Accounts 2012 92.4 2012 65.9 Independent Auditor’s Report 74 Consolidated Income Statement 77 2011 68.2 2011 56.1 Consolidated Statement of Comprehensive Income 78 Consolidated Statement of Diluted Earnings per Share Dividend Financial Position 79 Accounts Group Consolidated Statement of Changes in Equity 80 56.7p 22.75p Consolidated Statement of Cash Flows 82 2013 56.7 2013 22.75 Note to the Consolidated Statement of Cash Flows 83 2012 55.2 2012 21.75 Notes to the Consolidated Financial Statements 84 2011 37.3 2011 18.75 Company Accounts Company Balance Sheet 150 Notes to the Company Accounts 151 Net debt £9.9m 2013 9.9 Company Accounts 2012 30.8 2011 119.2 * See reconciliation of Consolidated Income Statement to adjusted results on page 7. Other Five Year Record 162 Financial Calendar and Other Shareholder Information 163 22706.04 13 December 2013 6:27 PM Proof 6 Euromoney Institutional Investor PLC 02 www.euromoneyplc.com HeadingOur Divisions StraplineActivities FINANCIAL Financial publishing includes an extensive portfolio of titles PUBLISHING covering the international capital markets as well as a number of specialist financial titles. Products include magazines, newsletters, journals, surveys and research, directories, and books. A selection of the company’s leading financial brands includes: Euromoney, Institutional Investor, EuroWeek, Latin Finance, Asiamoney, Global Investor, Project Finance, Air Finance and the hedge fund title EuroHedge. Revenue £75.6m BUSINESS The business publishing division produces print and online PUBLISHING information for the metals and mining, legal, telecoms and energy sectors. Its leading brands include: Metal Bulletin, American Metal Market; International Financial Law Review, International Tax Review and Managing Intellectual Property; Capacity; Petroleum Economist, World Oil and Hydrocarbon Processing. Revenue £68.9m CONFERENCES The group runs a large number of sponsored conferences and AND SEMINARS seminars for the international financial markets, mostly under the Euromoney, Institutional Investor, Metal Bulletin and IMN brands. Many of these conferences are the leading annual events in their sector and provide sponsors with a high quality programme and speakers, and outstanding networking opportunities. Such events include: Euromoney’s Covered Bond Congress; the Global Revenue Borrowers and Investors Forum; the Annual Global Hedge Fund Summit; the European £99.4m Airfinance Conference; and Global ABS and ABS East for the asset-backed securities market. In the commodities sector, events include Metal Bulletin’s International Ferro Alloys conference and the world’s leading annual coal conferences, Coaltrans and Coaltrans Asia; TelCap runs International Telecoms Week, the worldwide meeting place for telecom carriers and service providers; and MIS runs a leading event for the information security sector in the US, InfoSec World. 22706.04 13 December 2013 6:27 PM Proof 6 Annual Report and Accounts 2013 03 Overview Overview Group revenue GROUP REVENUE SPLIT Our Divisions ● Financial publishing 19% Strategic Report ● Business publishing 17% £404.7m ● Conferences and seminars 25% » For more information go to the ● Training 7% Strategic report on pages 8-29 ● Research and data 32% TRAINING The training division runs a comprehensive range of banking, finance and legal courses, both public and in-house, under the Euromoney and DC Gardner brands. Courses are run all over the world for both financial institutions and corporates. In addition the company’s Boston-based subsidiary, MIS, runs a wide range of courses for the audit and information security market. Revenue £30.1m RESEARCH The group provides a number of subscription-based research and AND DATA data services for financial markets. Montreal-based BCA Research is one of the world’s leading independent providers of global macro economic research. In 2011, the group expanded its independent research activities with the acquisition of US-based Ned Davis Research, a leading provider of independent financial research to institutional and retail investors. The company’s US subsidiary, Internet Securities, Inc. provides the world’s most comprehensive service for Revenue news and data on global emerging markets under the Emerging Markets Information £131.4m Service (EMIS) brand, and includes CEIC, one of the leading providers of time-series macro-economic data for emerging markets. The group also offers global capital market databases through a venture with its partner, Dealogic (Holdings) plc. Principal Brands Ned Davis Research Group Design Shell Euromoney Institutional Investor PLC 04 www.euromoneyplc.com Chairman’s Statement Richard Ensor Highlights been offset by savings on central costs. Costs the fivefold increase in the group’s profits since Euromoney Institutional Investor PLC, the and margins remained tightly controlled it was first introduced in 2004. Accordingly, international online information and events throughout the year and, as highlighted in subject to shareholder approval at the AGM in group, achieved a record adjusted profit before previous announcements, the group has January 2014, the board proposes to introduce tax of £116.5 million for the year to September continued to invest in technology and new a new CAP, CAP 2014, which will be structured 30 2013, against £106.8 million in 2012. products as part of its online growth strategy. along similar lines to CAP 2010. Adjusted diluted earnings per share were 71.0p (2012: 65.9p). The directors recommend a 7% Net debt at September 30 was £9.9 million As highlighted in previous trading updates, the increase in the final dividend to 15.75p, giving a compared with £38.1 million at March profitability of banks and asset managers has total for the year of 22.75p (2012: 21.75p), to 31 and £30.8 million last year-end. The group’s improved during 2013, particularly in the US. be paid to shareholders on February 13 2014. net debt is at its lowest level since the acquisition However, continuing litigation against banks, of Institutional Investor in 1997. The group often leading to significant financial settlements, Total revenues for the year increased by spent £28.1 million on four acquisitions during combined with increasing regulation and 3% to £404.7 million. Underlying revenues, the year, and since the year-end has put in place demands for stronger capital bases, continues excluding acquisitions, increased by 1%. a new $160 million multi-credit facility providing to put pressure on the profits of the banking Headline subscription revenues increased by 3% headroom for a larger acquisition if and when industry. As a result, the broadly positive outlook to £206.3 million, after a flat first half, and again the opportunity arises. for markets and economic growth is taking time accounted for just over half of group revenues. to translate into a recovery in the spending of The board believes the Capital Appreciation Plan financial institutions on marketing, training and The adjusted operating margin was unchanged (CAP), the group’s long-term incentive scheme information buying. at 30%. While the operating margins of some designed to retain and reward those who drive divisions have come under pressure, this has profit growth, has been an important driver of 22706.04 13 December 2013 6:27 PM Proof 6 Annual Report and Accounts 2013 05 Strategy Overview The group’s strategy remains the building of a robust and tightly focused global online information business with an emphasis on emerging markets.