Strategic Report

Operating Business Reviews B2B

Summary Outlook Our B2B companies operate in five sectors, namely Insurance Risk, Our B2B companies are collectively expected Property Information, Education Technology (EdTech), Energy Information, to deliver low single-digit underlying revenue Events and Exhibitions. growth in FY 2018, although revenues will be adversely affected by the disposals that have taken place in the past year and the planned disposal of EDR. In the Insurance Risk sector, 2016 RMS will continue to expand the client 2017 Pro formaΩ Movement Underlying^ Total B2B £m £m % % base for the RMS(one) software platform and associated applications, laying the Revenue# 976 899 +9% +2% groundwork for revenue acceleration Operating profit* 152 160 (5)% (15)% in FY 2019 and beyond. In the Property Operating margin* 16% 18% Information sector, the European businesses # Revenue from continuing and discontinued operations. are expected to continue to experience * Adjusted operating profit and operating margin; see pages 29 to 31 for details. relatively subdued market conditions and ^ Underlying growth rates give a like-for-like comparison; see page 31 for details. Ω Pro forma FY 2016 figures have been restated to treat as a c.67% owned subsidiary during the first three months the remaining US businesses to continue and as a c.49% owned associate during the nine months to September 2016, consistent with the ownership profile during to deliver growth. Following the disposal FY 2017. See reconciliation on page 28. of Hobsons’ Admissions and Solutions businesses, the remaining EdTech business is expected to benefit from increased focus Euromoney of Group corporate costs, were £152 million, and to continue to deliver growth. In the In December 2016, DMGT reduced its stake a reduction of 5% on a pro forma basis and Energy Information sector, Genscape is in Euromoney and the company ceased to an underlying decline of 15%, largely driven also expected to deliver growth across most be a subsidiary of DMGT and became an by RMS, where amortisation costs increased, of its sub-sectors, albeit the challenging associate. To allow a like-for-like comparison, and within dmg information, by Xceligent market conditions are expected to persist. 2016 pro forma results have been presented and Genscape. The overall B2B operating Despite challenges in some Events and based on a c.67% stake in Euromoney during margin declined to 16%, down from 18% on Exhibitions end markets, notably the energy the first quarter of the year and a c.49% a pro forma basis in FY 2016, reflecting lower sector and some Gulf Cooperation Council stake during the final three-quarters, margins across each of RMS, dmg information countries, and the expected reduction in consistent with the actual holding during and dmg events. revenues from Gastech reflecting the change FY 2017. Underlying revenue and operating dmg information restructure in location in 2018, dmg events is well profit growth rates exclude Euromoney. positioned to continue delivering underlying DMGT has historically reported the results The results of Euromoney are described revenue growth. of Property Information, EdTech and within JVs & Associates on page 24. Energy Information businesses within There continues to be a focus on improving Performance dmg information. In FY 2017, DMGT undertook operational execution, combined with laying Revenues from B2B totalled £976 million, a management delayering project to the foundations for long-term growth. The up 9% on a pro forma basis, including the reduce complexity and move the operating adjusted operating profit margin for B2B is benefit of the stronger US dollar versus companies closer to decision-making by expected to be in the mid-teens in FY 2018. the British pound. On an underlying basis, the Group’s central management team. B2B revenues grew 2%, with growth from For the purposes of this Annual Report, Hobsons, dmg events, RMS and Genscape these businesses will appear as part of and stable revenues from the Property dmg information and from FY 2018 will be Information businesses. B2B adjusted presented as part of the overall B2B portfolio, operating profits, excluding any allocation with dmg information no longer in place.

Revenue# (%) B2B Sectors

Insurance Risk 24 RMS EdTech 12 Insurance Risk Property Information 34 dmg information Energy Information 9 Property Information Events and Exhibitions 12 EdTech Euromoney 9 Energy Information dmg events Events and Exhibitions

16 and General Trust plc Annual Report 2017

Insurance Risk: RMS B2B

Revenue Operating profit Strategic Report Key developments • Risk Modeler released in April 2017 £233m £33m – the second application to run on the RMS(one) risk management platform with clients starting to migrate onto the new system. 2017 2016 Movement Underlying^ £m £m % % • Release of RiskLink17 with an unprecedented model release Revenue 233 205 +14% +2% programme delivering updates Operating profit* 36 (9)% (25)% 33 to five models, notably the North Operating margin* 14% 18% American Earthquake model, * Adjusted operating profit and operating margin; see pages 29 to 31 for details. and three new models covering ^ Underlying growth rates give a like-for-like comparison; see page 31 for details. natural disasters in Asia. • Management team strengthened with a new RMS President appointed. RMS is focused on execution and 25% to £33 million with an operating margin investment for organic growth, in both of 14%, broadly in line with the low-teens its modelling business and the new guidance provided in December 2016. RMS Priorities in the year ahead risk management platform, RMS(one). continue to invest strongly in its modelling The main areas of focus for the RMS RMS has delivered an unprecedented business to underpin its market position management team in FY 2018 will be on level of modelling solutions in FY 2017, and long-term growth trajectory. Excluding the continued successful development with updates to the North American the benefit of the £13 million of RMS(one) and delivery of its core and new models to Earthquake and North American capitalisation in the prior period, as well as clients and managing the gradual migration Hurricane models, new models for Asian depreciation and amortisation, the EBITDA of clients to the RMS(one) platform. earthquakes and typhoons, and further margin was 24%, an improvement on the expansion into new lines of risk with 17% in FY 2016. The RMS model pipeline remains strong, reflecting an ongoing commitment to the second release of our cyber models. RMS continues to lead in the risk modelling strengthen the business’s market-leading The release of the second RMS(one) market. In April 2017, RMS released position. The model pipeline for 2018 covers application, Risk Modeler, was also a key RiskLink17, which included updates to a wide range of perils, including North milestone for the business in FY 2017. five models, notably North American America Flood, Central and Western Earthquake, and three new models: South Business model European Storm, Indian Flood, Japanese East Asia Earthquake, Taiwan Typhoon RMS offers models, data, services and Earthquake and Typhoon and North American and South Korea Typhoon. software to insurers, brokers and reinsurers. Wild Fire. The pipeline includes high Its solutions are also increasingly in demand A major milestone was achieved in April 2017, definition models, which provide increased from capital market entrants into the risk with the release of Risk Modeler, the second granularity, as a key differentiated offering. and insurance market. application to run on the RMS(one) risk management platform, and over a dozen Go online to read the RMS case study Revenues are derived mainly from annual www.dmgt.com subscriptions to its models and data clients are now using applications on intellectual property. RMS also offers RMS(one). Given the enterprise acceptance a variety of analytical, managed and testing required during the clients’ adoption hosted services. processes and the relatively slow roll-out, the revenues from RMS(one) are expected Performance highlights to have a more significant impact on RMS produced underlying revenue growth RMS’s overall revenue growth and margin of 2%. Reported revenues were up 14% to improvement in FY 2019 and beyond. £233 million reflecting the benefit of the The increasing pace of digitalisation across stronger US dollar versus the British pound. the risk and insurance market combined The business achieved this solid revenue with the requirement for real-time risk performance, in line with expectations, assessment on one risk modelling evaluation despite the continuing adverse impact of platform that has integrated data analytics some client consolidation. There was good is expected to create progressive demand demand for RMS core subscription services, for the RMS(one) platform. with renewal rates remaining above 95%. The appointment of a new President, As previously indicated, capitalisation of reporting to the CEO, to lead RMS RMS(one) development activities ceased market‑facing activities has increased the and the amortisation of the RMS(one) asset client focus during 2017, especially in the started in August 2016. Consequently, areas of client service and delivering operating profit declined by an underlying high-value solutions to clients.

17 Strategic Report dmg information B2B

Revenue Operating profit £531m £69m

Introduction dmg information is a portfolio of companies with market-leading positions in the Property Information, EdTech and Energy Information sectors.

2017 2016 Movement Underlying^ £m £m % % Revenue Property Information 328 307 +7% +0% EdTech 114 115 +0% +9% Energy Information 88 76 +16% +1% Total dmg information 531 498 +7% +2% Operating profit* 69 77 (10)% (13)% Operating margin* 13% 15%

* Adjusted operating profit and operating margin; see pages 29 to 31 for details. ^ Underlying growth rates give a like-for-like comparison; see page 31 for details.

Property Information – EdTech – Energy Information – key developments key developments key developments • Stable underlying revenues despite • Refocus and restructure of • Robust performance from core challenging market conditions. Hobsons with disposal of Energy areas of power, oil and Admissions and Solutions natural gas, despite sustained low • Good revenue growth from US-based businesses in September and oil prices and low price volatility companies, despite subdued October 2017 respectively. impacting customer budgets. commercial property market. • Continued strong growth from • Solar business faced challenging • European property information Naviance, Starfish and Intersect. market conditions. delivered profit growth despite revenue decline. • More challenging trading • Continued investment in building conditions for Admissions. global product offerings and in • The carrying values of Xceligent and providing analytics and forecasts. SiteCompli were both fully impaired, • Development underway to upgrade reflecting disappointing progress Naviance platform. • Difficult market conditions resulted in an impairment to the carrying with expansion plans. • Appointment of new CEO value of Genscape. • Good product development and in May 2017. expansion into insurance sector by Landmark.

For the purposes of this Annual Report Performance summary Operating profit decreased by an underlying for FY 2017, these businesses will appear dmg information revenues were £531 million, 13% to £69 million, with an operating margin as part of dmg information and from up 7% on a reported basis and 2% on an of 13%. The decline in profit compared to FY 2018 will be presented as part underlying basis. Growth from the US the previous year was due in large part to of the overall B2B portfolio, with Property Information, EdTech and Energy investment in the roll-out of Xceligent, one dmg information no longer in place. Information businesses was partly offset of the US Property Information companies. by a decline in revenues from the European More detail on the performance of each of Property Information businesses. the sectors can be found in the following Operating Business Reviews.

18 Daily Mail and General Trust plc Annual Report 2017 dmg information B2B

Property Information continued to grow in the year. Xceligent’s EdTech Strategic Report revenue growth in new markets, notably New York, has been slower than previously Revenue expected and, given the significant further Revenue investment and time required to achieve full national coverage, a decision has been taken £328m to reduce the carrying value of the business £114m to zero, resulting in an impairment charge of £42 million. Similarly, SiteCompli’s planned Business model expansion into the national retail market has Business model The Property Information portfolio proved more challenging than previously Hobsons operates in the education operates in the US, UK and Germany. expected and an impairment charge of technology market and is a leading provider Companies within the portfolio derive their £24 million has been taken in respect of of college and career readiness and student revenues from providing services that use its carrying value. Xceligent now has a new success solutions in the US. Hobsons helps technology, data and workflow to streamline management team in place and a strategic students identify their strengths, explore and help reduce the risk associated with review of the business is in progress, careers, create academic plans and match commercial and residential property whilst the SiteCompli management team these to educational opportunities. transactions. In addition, Trepp in the US are focusing on growth opportunities. Hobsons’ revenues are mainly derived provides risk, valuation and data solutions from subscription contracts with a wide for the CMBS market. Revenues are Europe range of educational institutions. generated from subscriptions as well The European Property Information as volume-related transactions. businesses, which include Landmark Performance highlights and SearchFlow in the UK and On-Geo in Hobsons produced another year of Performance highlights Germany, experienced a modest underlying underlying growth with revenues up 9%. The Property Information portfolio’s revenue decline as lower residential There was continued strong growth from its revenues grew by 7%, including the benefit property transaction volumes and mortgage K-12 career and college planning platform, of the stronger US dollar and Euro relative to approvals adversely impacted trading. Naviance, its college matching business, the British pound, and were in line with the In the legal property market, SearchFlow Intersect and its higher education student prior year on an underlying basis. The five delivered a major upgrade of its ordering retention business, Starfish. Hobsons’ US-based businesses collectively delivered platform while Landmark continued to Admissions business was operating in underlying revenue growth of 5%, offset by deliver enhancements to its range of an increasingly competitive environment a 3% decline in underlying revenue in Europe. conveyancing searches. In the mortgage and experienced declining revenue. Adjusted operating profit declined by 4% on lending market, Landmark successfully Following a strategic review of Hobsons, a reported basis and 9% on an underlying deployed its new Valuation Risk Hub with the the business underwent a refocusing and basis, reflecting planned investment in first lender and surveyor clients. Landmark restructuring programme. Hobsons was Xceligent, which more than offset operating has also made significant first steps into split into two distinct areas to provide a profit growth from the European businesses. the UK household insurance market with dedicated management team for each, long-term agreements to provide its risk US namely the fast-growing student success models to leading providers in the industry. businesses for college and career readiness, Trepp, the securitised mortgage data and At the same time, Landmark has continued analytics business, delivered another year matching and retention (Naviance, Intersect to focus on operational efficiencies, and Starfish) and the more mature of underlying revenue growth, reflecting delivering operating margin improvement continued investment in its core services. Admissions and Solutions businesses. despite lower revenues, and evolving its Following this restructure, the Admissions EDR, which is a leading provider of data and cost base as the business develops. workflow for US commercial real estate due and Solutions businesses were sold diligence, was adversely impacted by lower Priorities in the year ahead in September and October 2017 respectively. real estate transaction volumes and the In the US, there will be continued investment business experienced an underlying decline in several growth initiatives across the in revenues in the year. EDR is pursuing portfolio. There will also be ongoing product growth opportunities in managed services, development at Trepp to enhance its an area the market is expected to transition market-leading position. In Europe, towards. Service industries are not a Landmark expects to continue with its preferred area of growth for DMGT and dynamic new product development and consequently a process is underway to launch programme. dispose of EDR to a more appropriate owner. This will further increase the focus within Go online to read the Property the portfolio and enhance DMGT’s financial Information case study www.dmgt.com flexibility. The earlier stage businesses, Xceligent, SiteCompli and BuildFax,

19 Strategic Report dmg information B2B

Operationally, Hobsons made good progress Energy Information There was a solid profit performance in core in strengthening its core products and Energy areas which was more than offset by services. The first phase of Naviance weaker trading performance at Locus Energy platform modernisation was launched, Revenue and our planned investment in building new improving the user interface and mobile products and enhancing existing services. responsiveness of the student-facing Genscape is bringing transparency to global components of Naviance. Naviance was £88m energy markets by building global product also successfully transitioned to a cloud offerings and continuing to move up the computing platform during the year. A new value chain by providing analytics and centralised modern platform for Intersect Business model forecasts. For example, Genscape Power was built. Two new products were delivered Genscape delivers innovative solutions to has expanded its services to deregulated on the platform and progress is underway improve market transparency and efficiency markets in Mexico and Japan. Genscape to incorporate all existing matching across several asset classes including oil, is developing a real-time, comprehensive products into the new platform. In July 2017 power, natural gas and liquid natural gas, and accurate global crude oil supply and Hobsons released Starfish 7 which includes agriculture, maritime and renewables. demand product and is expanding its predictive analytics based on the research Genscape provides its customers with proprietary sensor network to monitor and methodologies developed by PAR fundamental data, intelligence and real-time industrial facilities. Framework, a business acquired in 2016, alerts, workflow tools and predictive Given the continued challenges facing the that will deliver useful data to advisers analytics to better manage volatility, Energy Information sector, notably solar, and institutional leadership teams. This make complex decisions and increase the and the likely time required before the product is expected to help support the efficiency of their supply chains. Revenues business becomes a major cash generator, continued growth of this early-stage business. are mainly subscription based through the carrying value of the Genscape business annual and multi-year client contracts. A major project to upgrade the sales force has been reduced to £141 million, resulting was also undertaken. A more structured, Performance highlights in an impairment charge of £140 million. focused and data-driven approach has Genscape delivered underlying revenue Priorities in the year ahead been adopted to enhance team capabilities growth of 1% in the year. The core Under Genscape’s new management team, and better profile and target customers. businesses operating in the power, oil the business will continue to invest in new and gas sectors continued to grow despite Priorities in the year ahead products and service development and its the sustained low oil price and low price FY 2018 will be another year of transition long-term growth trajectory remains strong, volatility environment, reflecting good for Hobsons as it continues to refocus despite the current challenging market ongoing product development and client and strengthen its high-value, high-growth conditions. One of the key priorities will be expansion. The solar business, Locus Energy, core products and services. Operational to reposition the Locus Energy product suite experienced challenging market conditions, improvements are expected to flow given recent market changes in distribution. with sales of monitors adversely affected through as the cost base is streamlined and by a market shift in distribution channels. After delivering some pricing model an agile methodology is adopted across core improvements this year, Genscape will internal processes. Hobsons will continue continue to drive operational improvements, with its long-term objective to become particularly around pricing and an enhanced the trusted partner for institutions and go-to-market strategy. communities using digital solutions to drive student success. Go online to read the Energy case study Go online to read the www.dmgt.com EdTech case studies www.dmgt.com

20 Daily Mail and General Trust plc Annual Report 2017

Events and Exhibitions: dmg events B2B

Revenue Strategic Report Key developments • Robust revenue growth despite £117m challenging energy event market conditions: Gastech revenues in Japan grew by over 20% on the previous event. 2017 2016 Movement Underlying £m £m % % • Geo-cloning: strong performance of new geo-clones in key sectors. Revenue 117 105 +11% +3% Operating profit* 31 29 +6% (7)% • Spin-offs: successful development Operating margin* 26% 28% of spin-off events.

* Adjusted operating profit and operating margin; see pages 29 to 31 for details. • Prior year acquisition of Exhibition ^ Underlying growth rates give a like-for-like comparison; see page 31 for details. Management Services drove two new launches in FY 2017: Oil & Gas Africa and The Hotel Show Africa. dmg events is focused on seeking new Performance highlights opportunities for customers in emerging dmg events produced a resilient markets, leading to 10 new events performance in FY 2017, delivering 3% Priorities for the year ahead being launched in FY 2017 with five underlying revenue growth, despite the dmg events will remain focused on more planned for FY 2018. dmg events continued weakness in the oil price. developing its key large-scale market-leading hosted over 50 events attracting over Reported revenues grew by 11% due events. These events have the potential to 300,000 visitors and exhibitors from to the strength of the US dollar relative continue to grow and are key brands capable more than 100 different countries. to the British pound. of future geo-cloning and generating new spin-off events. The teams will continue to Business model The key branded events of the Big 5, create new relevant event content whilst dmg events is an organiser of B2B exhibitions ADIPEC and Gastech all produced good also focusing on enhancing the customer and associated conferences with industry- levels of visitor and exhibitor growth. experience through the increased use of leading events in the energy, construction, Gastech produced double-digit levels of mobile technology and data analytics. interiors, hotel, hospitality and leisure revenue growth due to a larger conference The five launches planned for 2018 in North sectors. The strong market and brand programme, increased popularity with Africa, the Middle East and South East Asia positions, emerging market experience and sponsors and exhibitors and the positive illustrate the continued strong commitment entrepreneurial culture create opportunities effect of changing the location to Japan, the to organic growth. for growth through geo-cloning existing world’s largest liquefied natural gas market. events into new locations and by creating The Global Petroleum Show, however, was spin-off sections to become standalone impacted by the tough Canadian energy events. The key branded events are the Big 5, sector which has experienced strong ADIPEC, INDEX, Gastech and The Hotel Show headwinds during FY 2017. which all provide opportunities to develop dmg events continued to geo-clone shows our spin-off and geo-clone strategy. by launching into new locations, including Revenues are derived from exhibitor, two South African events, The Hotel Show sponsorship and delegate fees and over Africa and Oil & Gas Africa, as well as East 60% of revenues are generated from the Africa Big 5 and Saudi Stone. A number top five events. of new spin-off events launched into adjacencies from the existing construction, energy and hospitality sectors. Operating profit declined by 7% on an underlying basis reflecting the tough conditions in the Canadian energy events market and investment in the strong launch programme for both FY 2017 and FY 2018. Action was taken to address the challenging market conditions, through disposing of five events and closing three events during the year. Operating margins were, however, a healthy 26% due to strong cost control, low overheads and a more effective digital marketing approach.

21 Strategic Report Consumer Media

Revenue Operating profit Key developments • Another year of good performance £683m £77m with multi-year investment programme driving results. • Strong digital advertising growth drove underlying increase in 2017 2016 Movement Underlying^ £m £m % % dmg media’s profits. Revenue 683 706 (3)% +1% • Mail Advertising, dmg media’s Operating profit* 77 77 +0% +10% cross-media partnership for Operating margin* 11% 11% advertising solutions, is gaining traction. * Adjusted operating profit and operating margin; see pages 29 to 31 for details. ^ Underlying growth rates give a like-for-like comparison; see page 31 for details. • Circulation and advertising outperformance of the market for the Daily Mail, dmg media has continued to focus on Performance highlights and Metro. delivering quality, popular journalism dmg media delivered an encouraging • Disposal of in April 2017 to a large audience on a global basis. performance in the year. Revenues were to focus digital resources on A multi-year investment programme, up 1% on an underlying basis, with the MailOnline. positioning dmg media as a modern news decline in print advertising revenues of • Cost reduction initiatives continue media company, has ensured that the 5% being more than offset by digital with the closure of the Didcot business has prospered in an increasingly advertising growth, up 18%, and a stable printing plant facilities. digital-oriented consumer market. circulation performance. The combined strength of the Mail and • Successful launch of DailyMailTV joint Revenues were £683 million, representing Metro brands creates opportunities to venture in the US in September 2017. position dmg media’s proposition to an absolute decline of 3%, with the benefit advertisers through a sophisticated of the strong US dollar and the inclusion of MailOnline Australia’s revenue being offset and targeted omni-channel approach. Total advertising revenues from the Mail by the disposal of Elite Daily in April 2017 titles were £248 million, up £7m, representing and the decline in revenues from reselling Business model an increase of 2% on an underlying basis. newsprint. The disposal of Elite Daily has dmg media’s portfolio of news media Whilst the UK newspaper advertising market enabled dmg media to concentrate its businesses includes two of the UK’s most continued to decline, Mail Newspapers digital resources on MailOnline. read paid-for newspapers, the Daily Mail outperformed the market. Print advertising and The Mail on Sunday, and MailOnline, Adjusted operating profit was £77 million, decreased by an underlying 10%, compared which attracts an average 15 million unique an underlying increase of 10%, reflecting to the 13% decline during FY 2016. browsers each day. The Mail brand has the growth in digital revenues, good progress The Daily Mail and The Mail on Sunday largest reach of any commercial news media on MailOnline’s path to profitability and continue to outperform their markets, brand in the UK and has achieved scale in cost savings in the newspaper businesses, holding significant market shares, averaging other geographic markets, including the primarily the closure of the Didcot printing 23.4% and 22.1% for the year respectively. US and Australia. Metro, dmg media’s plant. These were partially offset by the The robust revenue performance was , has the largest weekday decline in print advertising revenues. achieved due to the full-year benefit of newspaper readership in the UK each month. The operating margin remained relatively cover price increases in FY 2016 and FY 2017 Combined, the Mail and Metro brands reach healthy at 11%. c.70% of the UK’s adult population each offsetting the declining circulation volumes. month. dmg media’s revenues are generated Mail businesses Since the year-end price of The Mail mainly from advertising and circulation Revenues for the combined newspaper and on Sunday increased from £1.70 to £1.80 revenues. While the newspaper businesses website businesses (the Daily Mail, The Mail in October 2017. continue to generate strong profits and cash on Sunday and MailOnline) were in line flow, the digital businesses are the driver on an underlying basis, at £574 million, of dmg media’s future growth. despite continued challenging conditions in the print advertising market. The 10% underlying decline in print advertising revenue to £131 million was offset by the strong performance at MailOnline, which grew revenues by an underlying 20% to £119 million, whilst circulation revenues of £308 million remained stable on an underlying basis.

22 Daily Mail and General Trust plc Annual Report 2017

MailOnline generated strong levels of Metro Outlook Strategic Report underlying revenue growth in FY 2017 Metro delivered a strong revenue Consumer Media is expected to continue of 20%. In the US, MailOnline’s revenues performance in the context of a declining to benefit from digital advertising growth grew by an underlying 36%, reflecting the print advertising market, growing underlying and to experience circulation volume increased traffic, further product innovation revenues by 7% over the year. The and print advertising declines, although and the partnerships with Facebook and performance reflects increased circulation advertising revenues will remain volatile. Snapchat. The audience on the core sites in as well as taking on four regional In FY 2018, the underlying rate of decline of continues to grow, with 14.9 million average franchises from Trinity Mirror in January dmg media’s revenues is expected to be in daily global unique browsers during the year, 2017. Metro has the largest circulation of any the mid-single digits. The operating margin up 4%, and the site attracted on average weekday newspaper in the UK, is read by an is expected to be around 10% in FY 2018, 227 million monthly global unique browsers average of 3.1 million people each day and compared to the 11% delivered in FY 2017, during the year. has the largest Monday to Friday advertising with the revenue reduction being partly Engagement levels have also increased market share by volume. The challenging offset by the benefit of continued cost which, alongside the growth in global print advertising market conditions are efficiencies within the newspapers and by audiences and ability to provide expected to continue and Metro will MailOnline achieving profitability for the full programmatic advertising solutions with remain focused on defending its profitability year in FY 2018. data analytics, creates a compelling offering whilst ensuring that the quality of the newspaper and its creative approach Go online to read the dmg media for advertising clients. MailOnline has case study www.dmgt.com continued to focus on increasing the size to advertising remains. and engagement level of its global audience, Priorities in the year ahead particularly in the US and Australian dmg media will continue to harness the markets. The growth strategy is far-reaching value of the Mail brands for both readers and includes providing new video advertising and advertisers and invest in the quality of formats, working in collaboration with its popular journalism to drive and engage our key commercial partners, Facebook, its global audiences. Operating efficiently Snapchat and Google. It also includes with a relentless focus on an agile cost base, DailyMailTV, a joint venture which launched combined with initiatives like the partnership successfully in the US in September 2017 advertising team, will also be important and which attracted an average of 1.3 million priorities. Significant investment has been viewers a night by its eighth week. This made to establish MailOnline as a global makes DailyMailTV the highest-rated debut market leader over the last few years of a national news magazine show since 2007. and it is expected to achieve its first year In the UK, the Mail Advertising team has of profitability in the coming year. created a compelling, multi-channel advertising solution which continues to gain traction and has supported continued market outperformance. dmg media’s approach has created a more effective, creative and increasingly targeted proposition to advertisers which is vital in the dynamic market conditions in which we operate.

23 Strategic Report

JVs & Associates

Share of adjusted In April 2017, Euromoney completed the operating profit acquisition of RISI, the leading price reporting agency for the global forest products market, for US$125 million. £69m ZPG – DMGT holding c.30% ZPG was founded in 2007 and has a highly experienced management team. The group 2016 2017 Pro formaΩ Movement has a multi-brand, multi-channel approach, £m £m % with its portfolio consisting of: Euromoney Institutional Investor PLC 47 42 +11% • Zoopla – the UK’s most comprehensive ZPG Plc 25 21 +15% property website that combines hundreds Other (2) (3) (18)% of thousands of property listings with Total share of operating profit 69 61 +14% market data and local information;

Ω Pro forma FY 2016 figures have been restated to treat Euromoney as a c.67% owned subsidiary during the first three months • PrimeLocation – one of the UK’s leading and as a c.49% owned associate during the nine months to September 2016, consistent with the ownership profile during property websites, helping the middle FY 2017. See reconciliation on page 28. and upper tiers of the market explore dream homes from the top estate and letting agents; As well as a diverse portfolio of operating Euromoney – DMGT holding c.49% • uSwitch – the UK’s leading comparison businesses, DMGT holds two large Euromoney was founded in 1969 by the then website for home services switching; associate interests, in Euromoney City editor of the Daily Mail and has grown Institutional Investor PLC (Euromoney) into a FTSE 250, international business-to- • Property Software Group – the UK’s and ZPG Plc, formerly Zoopla Property business information and events group. largest supplier of software and workflow Group Plc. Euromoney and ZPG are The portfolio consists of over 50 specialist solutions to the property industry; and both UK listed companies and as at businesses, spread across primary • Hometrack – the UK’s leading provider 30 September 2017 had a combined sectors including: market value to DMGT of £1,101 million. of residential property market insights • Asset management – provides and analytics. Other current JVs & Associates include: independent research, critical news and The share of adjusted operating profits from data and runs networks and conferences • Insurance Risk – c.30% stake in Praedicat, ZPG increased to £25 million. In October for the asset management industry which is dedicated to improving the 2017 ZPG acquired Money.co.uk, one – e.g. BCA Research, Ned Davis Research, underwriting and management of of the UK’s leading financial services Institutional Investor; casualty risk; comparison websites. • Property Information – c.40% stake in • Pricing, data and market intelligence – provides information and analysis Go online to read about Real Capital Analytics, an authority on Euromoney and ZPG critical to clients’ business processes the deals, the players and the trends www.euromoneyplc.com that drive the US commercial real estate and workflows across the metals and www.zpg.co.uk investment markets; mining, telecoms, insurance, airline and banking industries – e.g. , • Consumer Media – c.24% stake in TelCap, CEIC; Excalibur, which operates the online discount businesses Wowcher and • Banking and finance – provides market LivingSocial UK; and intelligence, news, training and conferences to the global finance industry • Consumer Media – c.50% stake in – e.g. Euromoney, IMN, Global Capital; and DailyMailTV. • Commodity events – leading conferences In FY 2017, the Group’s share of adjusted in the metals, agriculture and energy operating profits from its JVs & Associates sectors – e.g. Indaba, Global Grain. was £69 million, including £47 million in respect of Euromoney for the nine months Following the reduction in stake to to September 2017, following the reduction c.49%, Euromoney’s balance sheet is in the Group’s stake in Euromoney to c.49%. now independent of DMGT’s, increasing Euromoney’s financial flexibility to be acquisitive and to accelerate the implementation of its strategy.

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