Euromoney Institutional Investor
KEY DEVELOPMENTS
- Resilient performance due to successful subscription driven diversification strategy
- Further growth from emerging markets
- Continued strength in sectors outside finance
Euromoney had another record year and
increased its operating profit* by 12%.
This operating performance is stated
after deducting a charge for its
management incentive scheme, the
CAP , £5 million lower than last year,
without which the increase was 4%.
KEY FIGURES††
Throughout 2008 the business demonstrated its resilience in the face of problems in global credit markets, a gloomier economic outlook, and more recently the major impact of the credit crisis on the world’s leading financial institutions.
The diversity of Euromoney’s revenue streams, geographic markets, product offerings and customers helped sustain its trading through this difficult period. Subscription revenues increased by 18% and the proportion of revenues derived from subscription products increased from 34% to 37%. Growth from emerging markets continued to compensate for weakness in the developed financial markets, and emerging markets now account for nearly 50% of total revenues.
Euromoney's strengths in sectors outside finance, particularly metals, commodities and energy, led to a 16% increase in revenues from business publishing activities, which helped offset the weakness in some financial sectors.
FINANCIAL PUBLISHING
Revenues, which comprise a mix of advertising and subscriptions, were unchanged at £84 million. They fell for those titles more reliant on revenues from global financial institutions, or on sectors particularly exposed to the credit crisis such as structured finance and hedge funds. In contrast, those titles with a strong emerging markets exposure held up well: Euromoney, for example, had its best September issue ever and increased its advertising revenues for the year by 7%. Investment in new electronic products targeted at niche financial sectors continued, and many financial titles have now moved successfully from a print-first to a web-first publishing model.
BUSINESS PUBLISHING
The metals and commodities, energy, legal and telecoms sectors all continued to perform well, helped by strong commodity markets and high levels of investment in infrastructure, particularly in emerging markets. Revenues increased by 16% to £53 million with growth from both advertising and subscription products. Metal Bulletin’s revenues continued to benefit from the increased investment in marketing and technology since its acquisition, while TelCap, which publishes Capacity magazine for the wholesale telecoms market, achieved strong growth through the launch of new products.
CONFERENCES AND SEMINARS
Revenues increased by 8% to £88 million, although operating margin* fell, largely due to the impact of the credit crisis on events in the structured finance sector, particularly securitisation, and cuts by global financial institutions in their spend on capital markets conferences. In contrast, events in areas outside finance performed well, particularly those covering the coal and alternative energy markets under the Coaltrans brand, and the metals and commodities markets under Metal Bulletin.
TRAINING
Revenues increased by 10% to £41 million. They are heavily dependent on the headcount and training and travel budgets of financial institutions, and to date have held up well despite the cost pressures triggered by the problems in the credit markets. This has been achieved through a mix of investment in new course content, effective marketing and an ability to roll out successful courses quickly to emerging markets.
DATABASES AND INFORMATION SERVICES
Revenues increased by 28% to £66 million. BCA continued to achieve strong revenue growth on the back of its expansion into new geographic markets and increases in sales resource. ISI increased its local currency subscription revenues by 21%.
Operating margin* fell as a result of ISI's continued investment in new products, most notably the expansion of the CEIC emerging market economic data business into new regions.
OUTLOOK
There have been some recent signs of weakening in the face of the extreme credit market conditions and continued uncertainty over the economic outlook. Visibility beyond the first quarter is limited, as usual, and revenues will come under increasing pressure from the second quarter. The outlook for trading is inevitably uncertain in these markets, but Euromoney is better positioned than ever to meet the challenges of this difficult environment.
* Adjusted operating profit (before exceptional items and amortisation and impairment of tangible assets).
†† Percentages are calculated on actual numbers to one decimal place.