Annual Report & Accounts 2012 Annual Report & Accounts 2012 2012 Annual Report & Accounts Euromoney Institutional Investor PLC Euromoney Institutional Investor PLC Euromoney AR2012.indd 3 13/12/2012 15:54:26 21833.04 13/12/12 Proof 7 Euromoney Institutional Investor PLC is listed on the London Stock Exchange and 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 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. 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 Adjusted Results 07 Consolidated Statement of Cash Flows 59 Directors’ Report 08 Note to the Consolidated Statement of Cash Flows 60 Notes to the Consolidated Financial Statements 61 Our Governance Company Accounts Directors’ Responsibility Statement 27 Independent Auditor‘s Company Report 121 Directors and Advisors 28 Company Balance Sheet 122 Corporate Governance 30 Notes to the Company Accounts 123 Corporate Social Responsibility 36 Other Directors’ Remuneration Report 41 Five Year Record 133 Financial Calendar and Shareholder Information 134 Euromoney AR2012.indd 4 13/12/2012 15:54:26 21833.04 13/12/12 Proof 7 Euromoney Institutional Investor PLC Annual Report and Accounts 2012 www.euromoneyplc.com Highlights HighlightsRecord Profits Record Profits Our Performance “The record results for the year reflect the challenging market conditions as well as the successful implementation of our strategy. Investment in online information businesses and emerging markets has created a global portfolio with a resilient business model. Subscription revenues now account for more than 50% of group revenues, and more than a third of our revenues is derived from emerging markets. In 2013, we will continue to invest in our products to ensure that we are well placed to benefit from any improvement in the global economy.” Richard Ensor Chairman Our Governance Revenue Adjusted Operating Profit* Operating Profit £394.1m £118.2m £95.9m 394.1 118.2 95.9 363.1 109.0 330.0 100.1 82.1 77.8 2010 2011 2012 2010 2011 2012 2010 2011 2012 Adjusted Profit before Tax* Profit before Tax Adjusted Diluted Earnings Accounts Group £106.8m £92.4m Per Share* 65.9p 106.8 92.4 65.9 86.6 92.7 56.1 71.4 68.2 53.5 2010 2011 2012 2010 2011 2012 2010 2011 2012 Diluted Earnings Dividend Net Debt Per Share 21.75p £30.8m 55.2p Company Accounts 55.2 21.75 128.8 49.5 119.2 18.0 18.75 37.3 30.8 2010 2011 2012 2010 2011 2012 2010 2011 2012 * See reconciliation of Consolidated Income Statement to adjusted results on page 7. 01 Euromoney AR2012.indd 1 13/12/2012 15:54:27 21833.04 13/12/12 Proof 7 Euromoney Institutional Investor PLC Annual Report and Accounts 2012 www.euromoneyplc.com Our Divisions Activities FINANCIAL PUBLISHING TRAINING 20% 8% of group of group £77.1m Revenue turnover £31.2m 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, Air Finance and the hedge fund title EuroHedge. BUSINESS PUBLISHING 16% of group £64.6m Revenue turnover The business publishing division Principal Brands produces print and online 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. 02 Euromoney AR2012.indd 2 13/12/2012 15:54:28 21833.04 13/12/12 Proof 7 Euromoney Institutional Investor PLC Annual Report and Accounts 2012 www.euromoneyplc.com Our Divisions CONFERENCES and SEMINARS RESEARCH and DATA Our Performance 23% 33% of group of group £92.3m Revenue turnover £130.3m Revenue turnover The group runs a large number of The group provides a number of sponsored conferences and seminars subscription-based research and data for the international financial services for financial markets. markets, mostly under the Euromoney, Institutional Investor, Metal Bulletin Montreal-based BCA Research is one of the world’s and IMN brands. leading independent providers of global macro economic research. In 2011, the group expanded its Our Governance Many of these conferences are the leading annual independent research activities with the acquisition events in their sector and provide sponsors with of US-based Ned Davis Research, a leading provider a high quality programme and speakers, and of independent financial research to institutional outstanding networking opportunities. Such events and retail investors. The company’s US subsidiary, include: Euromoney’s Covered Bond Congress; the Internet Securities, Inc. provides the world’s most Global Borrowers and Investors Forum; the Annual comprehensive service for news and data on global Global Hedge Fund Summit; the European Airfinance emerging markets under the Emerging Markets Conference; and Global ABS and ABS East for the Information Service (EMIS) brand, and includes CEIC, asset-backed securities market. In the commodities one of the leading providers of time-series macro- sector, events include Metal Bulletin’s International economic data for emerging markets. The group Ferro Alloys conference and the world’s leading also offers global capital market databases through annual coal conferences, Coaltrans and Coaltrans a venture with its partner, Dealogic (Holdings) plc. Asia; TelCap runs International Telecoms Week, the Accounts Group 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. Principal Brands Ned Davis Research Company Accounts Group 03 Euromoney AR2012.indd 3 13/12/2012 15:54:30 21833.04 13/12/12 Proof 7 Euromoney Institutional Investor PLC Annual Report and Accounts 2012 www.euromoneyplc.com Chairman’s Statement Richard Ensor Highlights Total revenues for the year increased by 9% to The adjusted operating margin was unchanged Euromoney Institutional Investor PLC, the £394.1 million. Underlying revenues, excluding at 30%. Costs, particularly headcount, have international online information and events acquisitions, increased by 3%. The acquisition remained tightly controlled throughout the year. group, achieved a record adjusted profit of Ned Davis Research (NDR) in August 2011 At the same time, the group has increased its before tax of £106.8 million for the year to has helped increase the proportion of revenues investment in technology and new products as September 30 2012, against £92.7 million in generated from subscriptions to more than part of its online growth strategy. 2011. Adjusted diluted earnings a share were 50% for the first time. Headline subscription 65.9p (2011: 56.1p). The directors recommend revenues increased by 17% to £199.7 million Net debt at September 30 was £30.8 million an 18% increase in the final dividend to and underlying subscriptions, excluding NDR, compared with £88.5 million at March 31 and 14.75p, giving a total for the year of 21.75p by 5%. £119.2 million at September 30 2011. In the (2011: 18.75p), to be paid to shareholders on absence of any significant acquisitions, net February 14 2013. debt has fallen by £88.4 million since the start of the year, reflecting the group’s strong cash flows and an operating cash conversion rate* in excess of 100%. The group’s net debt is now at its lowest level for more than a decade and its robust balance sheet provides plenty of headroom for the group to pursue its acquisition strategy. As highlighted in previous trading updates, market conditions became noticeably tougher from June. The uncertainty over Europe remains, as does a solution to the pending US fiscal cliff. Meanwhile global financial institutions face the combined challenges of difficult markets, increased capital requirements and a tougher regulatory environment. Inevitably they have responded by cutting costs, particularly people, and exiting some parts of their business. However, the outlook for emerging markets, which account for more than a third of the group’s revenues, is more positive. The board expects this challenging trading background to continue at least into the early part of 2013. 04 Euromoney AR2012.indd 4 13/12/2012 15:54:31 21833.04 13/12/12 Proof 7 Euromoney Institutional Investor PLC Annual Report and Accounts 2012 www.euromoneyplc.com Chairman’s Statement Chairman’s Our Performance Strategy Driving revenue growth from existing as well Acquisitions remain a key part of the group’s The group’s strategy remains the building of as new products is a key part of the group’s strategy.