Annual Report and Accounts 2016 Introduction Welcome to the UBM Annual Report for 2016. This interactive pdf allows you to easily access the information that you require. Use the page icons within the text or the document controls located at the top of each page to navigate through the report. How to use this document Search by keyword Print a single page or whole section Return to the contents page Return to previous view Forward Backward Annual Report and Accounts 2016 Strategic Report 02 Chairman’s Statement 06 Our Business Explained 08 Business Model 10 Why own UBM? 11 Market Context 13 2016 Highlights 14 Chief Executive’s Review 20 Our People 24 Strategic Priorities and KPIs 26 Strategic Review UBM Annual ReportStrategic and Accounts 2016 Report 36 Sustainability Report Strategic Report page 04-44 40 Risk Management Our Business Model 42 Principal Risks UBM B2B Events: exceptional experiences 46 Operating and Financial Review for our customers EXPERT OUR ISE E ENC LL E EV Governance Report XC E Intimately understand E OMER TY N Create fully featured, ST PES T G CU E our customers’ needs to IN Buyers X highly valued experiences T P E E create propositions that K R for our customers R I 58 Board of Directors E bring the right buyers, A to meet, interact and N L M C s Activate and e sellers, leaders and r E trade – harnessing the D a e d N n promote global e learners together r power of face-to-face A r 60 Corporate Governance Statement a s S e trade and and digital E L L B2B commerce A S 62 Leadership R Sellers S E IP L H AT S 62 Nominations Committee IO ER NS TN HIPS AND PAR 67 Effectiveness Partner with the world’s leading cities, venues, exhibition services providers and creative 69 Accountability agencies to deliver more for our customers 70 Audit Committee BRANDS AND MARKET INSIGHT pg 28 76 Relations with Shareholders DATA AND TECHNOLOGY pg 32 77 Directors’ Remuneration Report PEOPLE AND SKILLS pg 34 97 Directors’ Report Our strengths Our Our BusinessOPERATIONAL Model pageEXPERTISE 08-09 pg 30 CEO’s Review page 14-19 Financial Statements Tradeshow model in action 104 Independent auditor’s report to CPhl Worldwide 2016 Sales and marketing excellence To attract our 26,763 visitors to the event our 26,763visitors Marketing team executed over 86 di erent segmented 86 the members of UBM plc campaigns via email. The digital team ran 83 online segmented email customer campaigns and had 6458 requests for campaigns Barcelona exhibitors from 4-6 October 2016 2,179 information on the directory in the month prior to the show. Across all our marketing channels including 113 Financial statements social media, telemarketing and PPC we reached out to countries 83 e 151 almost 2.4m people. online customer ltur Co-located with: cu Ag We also garnered c€1.8m worth of media coverage in campaigns ce ile ICSE, P-MEC, FDF and InnoPack n g 118 Section 1: Basis of preparation sqm 2016 through 670 cuttings. a r 85,000 rm ow At the 2015 edition, 39 UBM sales people rebooked 598 o AC t Other CPhI geo-adaptations: China, rf h India, Turkey, Japan, Korea, North Europe peripatetic annual event exhibitors for the 2016 edition using UBM’s ORBIT and c€1.8m e worth of media p PR America, Russia and Southeast Asia. 27th edition Touchplan rebooking tools. h 122 Section 2: Segment information coverage ig More than 6 weeks before the 2016 event ran we had H pre-booked 303 exhibitors for the 2017 edition. 08 We succeeded in encouraging a number of exhibitors to 125 Section 3: Operating profit and tax also attend one of our eight CPhI geo-adaptations. Overmatter A S t Increasing risk size 133 Section 4: Financial position a n d M/ER O a r p d e 143 Section 5: Capital structure and i r s a e SC t d i T o t n e a financial policy c l ISE h e n x o c l e o l l e 155 Se ction 6: Acquisitions and g y n c a e n CBE d d disposals a t a C n 163 Section 7: Employee benefits ust tio om ova er insight and inn 170 Section 8: Other notes Operating and 178 Additional Information Financial Review page 45-55 Risk Management page 40-44 179 UBM plc parent company financial statements and related notes Cross linking Throughout this document we have linked content together in order to provide a more coherent and integrated report. In PDF these link to related content elsewhere in the document Online at www.ubm.com/ar2016 Governance Report page 56-101 1 This section is the Strategic Report in accordance with the UK Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 Throughout this document, non-IFRS measures are noted with an (*) and additional information on these measures is set out on page 188. The Board has assessed this report and Front cover image considers it, taken as a whole, as fair, Allworld balanced and understandable. Shanghai INCREDIBLE THINGS HAPPEN WHEN PEOPLE COME TOGETHER. Routes Asia INCREDIBLE THINGS HAPPEN Okinawa WHEN PEOPLE COME TOGETHER. Strategic Report > Governance Report Financial Statements UBM is the world’s leading ‘pure-play’ organiser of business-to-business (B2B) events. Living Events First Our market-leading events are helping our customers succeed through the power of collective, human interactions that ignite trade, knowledge and networks. Our 2016 report tells the story of how, 52 weeks of the year, our skills, global reach and use of technology are delivering value to our customers and shareholders. Welcome to our world. 01 UBM Annual Report and Accounts 2016 Strategic Report Chairman’s Statement We have taken further significant steps during 2016 in line with our Events First strategy. This strategy of focusing on events is yielding tangible results for our shareholders. During 2016 we returned £244m to shareholders, increased our exposure to events through the Allworld Exhibitions acquisition and delivered a strong financial performance. Dame Helen Alexander Chairman Revenue1 Key Board activities during the year £863.0m +12.1% 2015: £769.9m Strategy People • Completed PR Newswire disposal • Approved the new proposed 2017 Adjusted operating profit* margin1 • Held two-day Board and Executive Remuneration Policy after Committee strategy meeting shareholder consultation focusing on the implementation • Reviewed Group-wide talent 27.2% of Events First management strategies and +1.6% pts 2015: 25.6% • Acquired Allworld Exhibitions, progress Business Journals Inc. and Content • Engaged with key employee groups, Reported operating profit margin1 Marketing Institute including high potential female 17.7% (2015: 18.8%) talent on diversity in UBM Diluted adjusted EPS*1 Values and governance Financial 39.7p • Continued the Board succession • Approved 2015 financial results +31.0% 2015: 30.3p planning process, appointing two • Approved 2016 interim results new Independent Non-Executive • Maintained the progressive Diluted reported EPS1 20.1p Directors dividend policy (2015: 18.2p) • Completed the annual Board effectiveness review and Dividend per share implemented its recommendations 22p +1.9% 2015: 21.6p Governance pages 56–101 1 Continuing Group only 02 Strategic Report > Governance Report Financial Statements Strategic progress as well as it possibly can, across This year we have taken further steps all areas of responsibility. To the to shape UBM. In June we completed left you can see a summary of the the disposal of PR Newswire (PRN), Board’s key activities in 2016. returned £244m to shareholders and, in December, reinvested the Sustainability remaining proceeds in acquiring Sustainability remains a principal tenet the attractive Allworld Exhibitions of our business and on page 36 you can (Allworld) business, focused on read more about our progress this year. Asia. These steps strengthened I would like to highlight the following: our position as the leading ‘pure- play’ B2B events organsiser. In 2016, UBM received two awards from the Carbon Disclosure Project (CDP) The Events First strategy is now for prior year carbon reductions and yielding results. In the Chief setting a science-based target for Executive’s Review (on page 14) you future carbon reductions. We extended will find details of our progress and our sustainability goals to include our its impact on the business. We will events and launched the ‘Sustainable We are confident continue to build on these initiatives. 10’ across UBM – a simple ten-point plan for enhancing event sustainability. in our Events First 2016 performance UBM performed well in 2016. UBM is also making good progress strategy and Continuing diluted adjusted EPS* in gender equality in the workplace, was 39.7p up 31.0%. The Board something I feel particularly passionate expect it to deliver believes this is a strong performance about. With Trynka joining, UBM now and illustrates good progress. has four female members on the Board sustainable value and was ranked joint 11th in the for shareholders in Board changes FTSE 250 in the Hampton-Alexander As UBM has changed we have continued review of performance at board level. 2017 and beyond to refresh the membership of the Board. This report includes reference to gender pay gaps and the Company In March Trynka Shineman, who is is committed to analysing and CEO of Vistaprint, was appointed addressing any inconsistencies. Having as a Non-Executive Director. the data, and then identifying the Trynka, who is based in the US, patterns, is a significant first step brings strong strategic marketing, in finding the solutions to achieving e-commerce and digital expertise.