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DAILY MAIL AND GENERAL TRUST PLC ANNUAL REPORT 2014 SATISFYING THE NEED TO KNOW Daily Mail and General Trust plc Annual Report 2014 HIGHLIGHTS Revenue# Net debt/EBITDA Adjusted profit before tax#* £1,864m 1.5x £291m 2013: £1,802m 2013: 1.5x 2013: £267m Statutory profit before tax † Adjusted earnings per share#* Dividend per share £267m 55.7p 20.4p 2013: £179m 2013: 49.9p 2013: 19.2p Digital share of revenues# International share of revenues#◊ Adjusted profit before tax#* 2014 £291m 46% 47% 2013 £267m 2013: 42% 2013: 48% 2012 £247m 2 011 £220m 2010 £230m Subscriptions share of revenues# Operating margin#* Profit split by B2B and Consumer #* 2014 B2B 75% Consumer 25% 28% 17% 2013 2013: 29% 2013: 17% B2B 77% Consumer 23% * Before exceptional items, other gains and losses, impairment of goodwill and intangible assets, pension finance charges, premiums on bond redemptions and amortisation of intangible assets arising on business combinations; see Consolidated Income Statement on page 81 and the reconciliation in Note 13 to the Accounts. # From continuing and discontinued operations. † Statutory profit before tax is for continuing operations only (excluding the disposed of Evenbase and Northcliffe Media businesses). ◊ Non UK revenues by destination. CONTENTS Overview Strategic Report Governance Highlights IFC Chairman’s Statement 02 Board of Directors 38 DMGT 01 DMGT at a Glance 04 Directors’ Report 40 Our Business Model 06 Chairman’s Statement on Governance 40 Market Overview 08 Corporate Governance 41 Chief Executive’s Review 10 Remuneration Report 51 Key Performance Indicators 14 Statutory Information 74 Operating Review 16 Annual General Meeting 2015: Risk Management Solutions 16 Resolutions 77 dmg information 18 Independent Auditor’s Report 78 dmg events 20 Financial Statements 81 Euromoney Institutional Investor 22 Shareholder Information 180 dmg media 24 Financial Review 26 Principal Risks 30 Our People 34 Corporate Responsibility Review 35 OVERVIEW STRATEGIC GOVERNANCE FINANCIAL SHAREHOLDER REPORT STATEMENTS INFORMATION DMGT DMGT is an international business built on entrepreneurship and innovation. We bring together leading companies and talented people to provide businesses and consumers with high-quality analysis & insight, information, news and entertainment. Find out more about our businesses page 16. THE NEED-TO-KNOW Our portfolio and Our Business Model The opportunities Our CEO’s global reach within our markets Review p04 p06 p08 p10 Our Key Performance The risks we face and Our sustainable Financial Statements Indicators how we manage them practices p14 p30 p35 p81 DAILY MAIL AND GENERAL TRUST PLC ANNUAL REPORT 2014 01 STRATEGIC REPORT CHAIRMAN’S STATEMENT BUILDING ON OUR SUCCESS The Viscount Rothermere Chairman I am delighted to write to you following In consumer media, the Mail titles During the financial year, DMGT unlocked another successful year at DMGT. The consolidated their position as pioneers significant value from the sale of Evenbase results we have delivered are a testament of quality popular journalism. MailOnline and through the IPO of Zoopla Property to the quality of our assets, the creativity continued to win new global audiences, Group Plc, in which we remain a supportive of our workforce and the entrepreneurial whilst increasing its editorial coordination and engaged financial investor. We also approach of our management team. with Daily Mail and The Mail on Sunday. made a number of acquisitions to Advertising revenues have remained solid strengthen our B2B information capabilities. DMGT remains at the forefront of the and our print titles have gained market The twin approach of organic investment international business-to-business (B2B) share despite the challenges faced by and bolt-on acquisitions has continued to and consumer media sectors. We have a traditional print media. diversify the Group by business area diverse asset portfolio which has delivered and geography. a strong underlying performance and total Among our B2B assets, RMS maintained shareholder returns (as shown in the charts its leading position for catastrophe risk DMGT will continue to pursue international on page 03). modelling. We took the decision to delay expansion in high-growth markets. In the the deployment of RMS(one) during the period covered by this Annual Report, On behalf of the Board and as the largest year, which reflected a determination to I witnessed those growth opportunities shareholder in DMGT, I would like to thank roll out this technology only when it fully at first hand with a visit to our businesses Martin Morgan and his management meets clients’ expectations. Your Board in Asia. I was delighted to see how well team for continuing to expand our B2B regrets the impact the delay in the launch dmg information has established itself, with companies and develop our consumer of RMS(one) has had on us, as shareholders, its hub office in Singapore. Our expansion media presence. and the executive team is working hard to continues in other geographies, with support RMS to deliver on its revised plan. Euromoney acquiring Mining Indaba, The management strategy, fully endorsed an investment forum in South Africa, by the Board, is focused on building a We saw further expansion in our whilst dmg events has expanded its global growth company in the media and information businesses. The acquisition of overseas businesses to include Mexico B2B markets we serve. DMGT’s operating Decision Insight Information Group (DIIG), and Morocco. margin has improved from 13% in 2009 to a leading property search group in the UK 17% in 2014. This is due to the combination and Ireland, reflects our ability to make The implementation of our Group strategy of the improving consumer margin and the acquisitions that will deliver further growth. is overseen by the Board, which continues increased proportion of the business that is At dmg events, we successfully increased to maintain high standards of governance. B2B (as shown in the charts on page 03). the frequency and geographic presence The Governance Report (pages 40 to 50) of flagship events which have continued sets out the framework for operating In the financial year covered by this report, to be the must-attend exhibitions and performance and shareholder value that is this strategy helped deliver organic growth networking opportunities for their central to the growth of DMGT. The strategy and returns on our recent investments. respective communities. is overseen by a Board of Executive and As a result, adjusted earnings per share rose Non-Executive Directors with relevant skills by 12% to 55.7 pence. DMGT generated Meanwhile, Euromoney is improving its and experience. The Board’s commitment healthy cash flow, and the Board is digital capabilities through the launch of to diversity is explained in the Corporate recommending a 7% increase in the final its Delphi content management system. Governance section of this report. dividend per share for 2014. The project will enhance coordination and the use of technology across the At the operating level, the benefits of Euromoney portfolio. our global footprint, entrepreneurialism and creativity were evident across our businesses. DAILY MAIL AND GENERAL TRUST PLC 02 ANNUAL REPORT 2014 OVERVIEW STRATEGIC GOVERNANCE FINANCIAL SHAREHOLDER REPORT STATEMENTS INFORMATION “ Although market trends are changing rapidly in many parts of the media and business information market, DMGT is well positioned to withstand volatility.” At the senior management level, remuneration and incentives are aligned Revenue by sector (%): 2009 vs. 2014 with performance. The value creation metrics and related payments are set out in the Remuneration Report on pages 51 to 73. 43 The operational performance and 39 strategic vision set out in this Annual 2009 2014 Report demonstrates that we have the 61 57 right strategy in place and the right management to deliver it. At the same time, the family control of DMGT means we B2B take a long-term perspective, creating an Consumer environment to drive sustained returns for all investors. Operating margin by sector (%): 2009 vs. 2014 Throughout its history, DMGT has relied 2009 2014 upon the talent, experience and skills of B2B: 24% B2B: 22% its employees. As Chairman of the Board, Consumer: 6% Consumer: 10% I want to thank all our staff for their dedication and hard work. Total shareholder returns 2009 – 2014 The media and business information 350 markets continue to change rapidly. Our balanced portfolio and geographical spread positions us well for the future. DMGT is well positioned to participate in future developments and withstand market 350 volatility. The Board remains confident in DMGT’s long-term growth prospects. 250 200 150 The Viscount Rothermere Chairman 100 50 0 Sep 09 Dec 09 Mar 10 Jun 10 Sep 10 Dec 10