Annual Report & Accounts 2011 Annual Report & Accounts Annual Report & Accounts 2011 www.euromoneyplc.com Euromoney Institutional Investor PLC Nestor House, Playhouse Yard, London EC4V 5EX Euromoney Institutional Investor PLC Euromoney Institutional Investor PLC 20899-04 12/12/2011 Proof 8 20899-04 12/12/2011 Proof 8 Euromoney Institutional Investor PLC Annual Report and Accounts 2011 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 on-line format, 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. Details of the group’s legal entities can be found in note 14. ContentsContents Our Performance Group Accounts Highlights 01 Independent Auditor’s Report 53 Our Divisions 02 Consolidated Income Statement 54 Chairman’s Statement 04 Consolidated Statement of Comprehensive Income 55 Appendix to Chairman’s Statement — Consolidated Statement of Financial Position 56 Reconciliation of Group Income Consolidated Statement of Changes in Equity 57 Statement to Underlying Results 06 Consolidated Statement of Cash Flows 59 euromoneyplc.com Directors’ Report 07 Note to the Consolidated Statement of Cash Flows 60 Notes to the Consolidated Financial Statements 61 Queen’s Award for Enterprise 2008 in the International Category Our Governance Company Accounts Directors’ Responsibility Statement 23 Independent Auditor‘s Company Report 119 Directors and Advisors 24 Company Balance Sheet 120 Novatech Matt A white coated paper and board Corporate Governance 26 Notes to the Company Accounts 121 made using 100% ECF pulp Corporate Social Responsibility 32 Other Directors’ Remuneration Report 38 Five Year Record 131 Financial Calendar and Shareholder Information 132 20899-04 12/12/2011 Proof 8 20899-04 12/12/2011 Proof 8 Euromoney Institutional Investor PLC Annual Report and Accounts 2011 www.euromoneyplc.com Highlights HighlightsRecord Profits Record Profits Our Performance “The environment’s getting tougher and more volatile revenues like advertising have shown signs of weakness, but cash flows are very strong and the immediate outlook is fairly positive.” Padraic Fallon Chairman Our Governance Revenue Adjusted Operating Profit* Operating Profit £363.1m £109m £77.8m 363.1 109.0 82.1 77.8 317.6 330.0 100.1 79.4 27.2 2009 2010 2011 2009 2010 2011 2009 2010 2011 Adjusted Profit before Tax* Profit/(Loss) before Tax Adjusted Diluted Earnings Accounts Group £92.7m £68.2m Per Share* 56.1p 92.7 71.4 86.6 68.2 53.5 56.1 63.0 40.4 2009 2010 2011 (17.4) 2010 2011 2009 2010 2011 2009 Diluted Earnings/(Loss) Dividend Net Debt Per Share 18.75p £119.2m 37.3p Company Accounts 49.5 18.0 18.75 165.1 37.3 14.0 128.8 119.2 (6.7) 2010 2011 2009 2010 2011 2009 2010 2011 2009 * See reconciliation of Consolidated Income Statement to adjusted results on page 6. 01 20899-04 12/12/2011 Proof 8 Euromoney Institutional Investor PLC Annual Report and Accounts 2011 www.euromoneyplc.com Our Divisions Activities FINANCIAL PUBLISHING TRAINING 23% 9% of group of group £83.8m Revenue turnover £32.5m Revenue turnover Financial publishing includes an The training division runs a extensive portfolio of titles covering comprehensive range of banking, the international capital markets as finance and legal courses, both public well as a number of specialist financial and in-house, under the Euromoney titles. Products include magazines, and DC Gardner brands. newsletters, journals, surveys and research, directories, and books. Courses are run all over the world for both financial institutions and corporates. In addition A selection of the company’s leading financial the company’s Boston-based subsidiary, MIS, runs a brands includes: Euromoney, Institutional Investor, wide range of courses for the audit and information EuroWeek, Latin Finance, Asiamoney, Global security market. Investor, Project Finance, Futures & Options World and the hedge fund titles EuroHedge, InvestHedge, AsiaHedge and AR. BUSINESS PUBLISHING 16% of group £59.5m Revenue turnover The business publishing division Principal Brands produces specialist magazines and other publications covering 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. 02 20899-04 12/12/2011 Proof 8 Euromoney Institutional Investor PLC Annual Report and Accounts 2011 www.euromoneyplc.com Our Divisions CONFERENCES and SEMINARS RESEARCH and DATA Our Performance 24% 28% of group of group £86.2m Revenue turnover £104.3m Revenue turnover The group runs a large number The group provides a number of of sponsored conferences and subscription-based research and data seminars for the international services for financial markets. financial markets, mostly under the Euromoney, Institutional Investor, Montreal based BCA Research is one of the world’s Metal Bulletin and IMN brands. leading independent providers of global economic research. During the year, the group expanded its Our Governance Many of these conferences are the leading independent research activities with the acquisition annual events in their sector and provide sponsors of US-based Ned Davis Research, a leading provider with a high quality programme and speakers, of independent financial research to institutional and outstanding networking opportunities. Such and retail investors. The company’s US subsidiary, events include: The Global Borrowers and Investors Internet Securities, Inc. provides the world’s most Forum; the Annual Global Hedge Fund Summit; comprehensive service for news and data on global the European Airfinance Conference; the Super emerging markets under the Emerging Markets Bowl of Indexing®; and Global ABS and ABS East Information Service (EMIS) brand, and also includes for the asset–backed securities market. In the CEIC, one of the leading providers of time-series energy sector, the group runs the world’s leading macro-economic data for emerging markets. The annual coal conferences, Coaltrans and Coaltrans group also offers global capital market databases Asia; TelCap runs International Telecoms Week, the through a venture with its AIM-listed partner, worldwide meeting place for telecom carriers and Dealogic plc. Accounts Group service providers; and MIS runs a leading event for the information security sector in the US, InfoSec World. Ned Davis Research Company Accounts Group 03 20899-04 12/12/2011 Proof 8 Euromoney Institutional Investor PLC Annual Report and Accounts 2011 www.euromoneyplc.com Chairman’s Statement Padraic Fallon In 2012 your company is expected to pass a significant milestone in its We have, as we said we would, continued with the strategy of developing longer-term strategy to increase the quality of its earnings, when revenues as a robust and tightly focused global online information business from subscriptions will exceed half of the total. What is more, much of the with a strong emphasis on emerging markets. This involves increasing growth in subscriptions is expected to arise from products that are delivered the proportion of revenues derived from subscription products; using electronically, and that generate higher margins. technology efficiently to assist the online migration of the group’s print products as well as developing new electronic information services; Our margin was remarkably stable at 30% in the year to September 30 investing in products of the highest quality that customers will value last in spite of a heavy investment programme. We also generated more in tough times as well as good; eliminating products with a low margin cash than ever, achieved record adjusted profits and record revenues, and or too high a dependence on advertising; maintaining tight cost hit the Capital Appreciation Plan’s profit target two years ahead of plan, control at all times; retaining and fostering an entrepreneurial culture; clear signals that our strategy has been working well. The recommended and using a healthy balance sheet and strong cash flows to fund selective final dividend, if you approve it, will increase the total by 4% to 18.75p acquisitions. a share. During 2011 the group continued its ambitious programme of investing in The operating climate for many of our businesses, though, remains harsh. new technology and content delivery platforms, particularly for the mobile Some markets look more volatile than ever and some revenue streams user, and in new digital information products, as part of its migration are flat or weak. In spite of that, the immediate trading outlook is fairly to a global online information business. Over the year the group spent positive, while the balance sheet is strong and getting stronger. We are more than £9 million enhancing its existing products, all of it expensed also pleased that the integration of Ned Davis Research, acquired in from profits, and expects a similar level of investment in 2012. In addition, August last for £65 million in cash, has so far gone according to plan. the group has undertaken a substantial investment programme at two of its most important electronic information businesses, BCA Research and CEIC Data, with a view to building rapidly the quality and coverage of their products and expanding their global sales resources. In 2012, the company intends to continue to pursue its successful strategy of tight cost control while investing in digital publishing and selective acquisitions of specialist online information businesses to drive further long-term revenue growth.