Euromoney’s strategy is to build a more resilient and better focused global information business, with a strong emphasis on emerging markets. While tight cost management was maintained throughout the year, the strategic focus has shifted to driving revenue growth, both from existing products as markets recover, and from investment in technology platforms and new products as part of the migration to an online information business. During the year, Euromoney invested in online products and started to execute long-term investment programmes for two of its most important electronic information businesses: BCA, the independent economic research business, and CEIC, the provider of emerging market databases for economists and analysts around the world, with a view to building rapidly the quality and coverage of their products as well as expanding their global sales resources. This increased level of investment is being undertaken with a view to driving revenue growth for 2012 and beyond.

In August, Euromoney acquired Arete Consulting, the definitive global data and news source for structured retail investment products. Euromoney will continue to pursue its successful strategy in 2011, with an emphasis on investing in technology and new subscription-based electronic information services, supplemented with small strategic acquisitions, to drive revenue growth.

Traditionally the recovery in revenue at the end of a downturn tends to be slower than the fall at the start, but this has not been the case following the credit crisis, when the recovery has happened much earlier and faster than expected.

The faster than expected recovery of subscription revenues was the most encouraging trading sign during the second half. The pick up in subscription renewal rates began in the summer of 2009, and has been followed by a recovery in sales of new subscriptions. This reflects a combination of stronger markets, increased investment in marketing and electronic publishing, as well as many new customers identified in the aftermath of the credit crisis. Subscriptions continue to account for nearly 50% of revenues.

Most of Euromoney’s biggest subscription businesses have seen revenues and renewal rates return to pre-credit crisis levels earlier than expected.

Advertising revenues were the first to suffer during the credit crisis, and the first to recover. Advertising budgets and campaigns tend to be linked to the calendar year, although the rate of recovery has improved each quarter as global financial institutions became more confident about the outlook for financial markets. In addition, the financial year closed with a particularly strong September, the key month of the year for many of Euromoney’s advertising-led businesses.

Revenues from events, which comprise both sponsorship and paying delegates, experienced the most rapid recovery in 2010. Event revenues were hit hard during the credit crisis as customers exercised tight controls over training, event attendance and travel. At the same time Euromoney cut event volumes by eliminating many of its smaller, low margin events, and continued to invest to enhance the market leading positions of its annual conferences and meetings. As markets have recovered, so attendance at these events has returned rapidly to pre-credit crisis levels or better.

Emerging markets, which account for more than a third of the group’s revenue, continued to hold up reasonably well, with Asia and Latin America providing the main sources of growth.

Revenues increased by 3% to £77 million. Margin improved partly due to the cost cuts made in 2009 and partly to the strong end to the year as many of the titles publish their biggest issue of the year in September. Among the best performers were Euromoney, EuroWeek and Latin Finance, all of which have a significant emerging market exposure.

Euromoney’s activities outside finance are less volatile, reflecting the spread of sectors covered, including metals, commodities, energy, telecoms and law, and the higher proportion of revenues derived from subscriptions. These sectors held up relatively well during the credit crisis and were not subject to significant costs cuts, leaving limited margin upside. Revenues increased by 5% to £59 million. Metal Bulletin was again the best performer as subscription revenues continued to grow, driven by a combination of product investment and increased marketing spend.

This division predominantly serves the global financial sector and was the hardest hit by the credit crisis and cuts in training spend, headcount and travel budgets. Training revenues, which are mostly derived from paying delegates, fell by 6% to £30 million, as the impact of the credit crisis continued into the early part of the financial year. From January, as customer training budgets returned, delegate bookings gradually improved, although course volumes have been held back until there is more certainty over the recovery.

Revenues comprise both sponsorship and paying delegates and increased by 4% to £79 million. The recovery in margin demonstrates the success of the group’s strategy to cut low margin events in a downturn, while continuing to focus on building its larger, must-attend annual events in niche markets. As markets have recovered, the group’s bigger events have seen a sharp recovery in demand and attendance has improved. Growth has come across all sectors, with some, such as structured finance and hedge funds, rebounding faster than expected, and others, such as metals, coal and telecoms, with their strong emerging markets exposure, achieving record attendance and revenues.

Revenues are predominantly derived from subscription contracts of 12 months or longer, and the performance of this division therefore tends to lag the others. Revenues increased by 3% to nearly £90 million. Revenue growth recovered in the second half. BCA returned to growth from the third quarter, earlier than expected. CEIC continued to experience strong growth in revenue from its emerging markets data service, which helped offset weaker demand for ISI's emerging markets information service.

The recent strength of equity and commodity markets, and the positive outlook for emerging markets, all provide momentum for further recovery. However, the broader outlook for global economic growth remains challenging. This, together with lingering concerns over sovereign debt levels in Europe, and the effectiveness of measures to avoid a repeat of the credit crisis, creates uncertainty over the outlook beyond December.

Nevertheless, Euromoney expects its good second half revenue performance to continue into the first quarter of the new financial year. Furthermore, subscriptions provide support for further revenue growth in 2011.

The level of spending on technology and new product investment will increase further in 2011. In the short term, this may reduce operating margins. Euromoney will also continue to execute significant long-term investment programmes for BCA and CEIC with a view to building rapidly the quality and coverage of their products as well as expanding their global sales resources.

Euromoney will continue to pursue its successful strategy in 2011, with an emphasis on investing in technology and new subscription-based electronic information services, supplemented with small strategic acquisitions.