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Informa PLC 2022 Full-Year Results

09 March 2023

Informa (LSE: INF.L), the international Academic Markets, B2B Markets and Digital Services Group today published its full year results for 2022, confirming strong performances in all businesses, continuing operating momentum into 2023 and further progress on the Growth Acceleration Plan 2 ("GAP 2").

Stephen A. Carter, Group Chief Executive, Informa PLC, said:

"Informa is firmly back in growth. Growth in revenues, growth in profits, growth in cash flow and, importantly, growth in shareholder returns."

He added: "Following a strong operating performance in 2022, combined with c.£2.5bn of value from divestments, we are seeking to deliver further growth and expansion in 2023. This includes strong underlying growth in all businesses, continuing digital acceleration, increased dividends and share buybacks, and further expansion, including today's addition of Tarsus."

Strong Operating Performance

2022 Full Year Results confirm strong growth and positive outlook for 2023

·      Strong delivery in 2022: Revenue (£2,389.3m), Adjusted Operating Profit¹ (£535.0m) and Free Cash Flow¹ (£466.4m) from continuing and discontinued businesses all ahead of Company guidance;

·      Accelerating Underlying Growth^1,2: Underlying revenue growth of 31.4% and underlying adjusted operating profit growth of 47.0% in 2022, reflecting improving growth in Academic Markets, strong growth in Live and On-Demand B2B Events and continued progress in B2B Digital Services;

·      Increased Operating Margin^1,2: A 2% increase (210bpts) in adjusted operating margin in 2022 to 21.9%, driven by strong underlying revenue growth, operating leverage and four months contribution from Industry Dive; Further 2.5%+ (250bpts+) increase expected in 2023;

·      Growing Earnings per Share^1,2: Adjusted diluted earnings per share +89% to 24.4p in 2022 (2021: 12.9p), reflecting strong growth in adjusted earnings and a reduced share count from share buybacks;

·      Improving Statutory Performance²: 2022 statutory revenue of £2,262.4m (2021: £1,583.3m), operating profit of £184.1m (2021: £34.4m), and diluted EPS of 9.4p (2021: 2.3p), reflecting strong profit growth; Including discontinued businesses, diluted EPS up to 111.4p, reflecting £1,740.3m profit before tax on divestment of Informa Intelligence portfolio;

·      Higher Free Cash Flow^1,2: Growth in adjusted operating profit, strong cash conversion and continuing momentum in forward event bookings and subscriptions delivers Free Cash Flow¹ of £417.9m in 2022, +15% year-on-year, or £466.4m including discontinued businesses;

·      Further strong growth in 2023¹: Strong Q1 trading and forward bookings, with 2023 revenue guidance confirmed at £2,750m to £2,850m and adjusted operating profit at £675m to £725m, including six-month contribution from Tarsus; Implies 20%+ year-on-year growth in revenue and 35%+ growth in adjusted operating profit from continuing businesses;

·      China reopening: Progressive removal of COVID restrictions and strong rebound in business activity is accelerating Live & On-Demand Events schedule in China, with full return expected through 2024;

·      ESG momentum: No.1 position in Dow Jones Sustainability Index (Media Sector) for second consecutive year, reflecting continuing operationalisation of FasterForward ESG programme.

¹In this report, we refer to non-statutory measures, as defined in the Financial Review on page 10 and Glossary on page 56. / ²Continuing businesses

 

Continuing Strategic Progress

GAP 2 delivering increased focus, accelerated growth and expanded digital opportunities

·      Increased Portfolio Focus: Decision to divest Intelligence portfolio delivers c.£2.5bn of value (at c.28x EBITDA) and focuses the group on two leadership businesses and expanded digital opportunities;

·      Open Research expansion: Growth and diversification at Taylor & Francis, with accelerating shift towards broader Pay-to-Read and Pay-to-Publish services, expanding the addressable market and delivering faster growth and higher quality revenue mix;

·      Live B2B Events acceleration: Strong growth in B2B Events in Informa Markets and Informa Connect driven by continuing return of major brands, enhanced customer value via smart technology and data capture, and strong growth in partnerships in the US and Saudi Arabia;

·      IIRIS growth: Strong momentum in first party data, with IIRIS fully consented audience over 15m, delivering enhanced customer knowledge, more effective marketing and incremental revenues;

·      Informa Tech scale: Creation of leading digital Tech business, providing market insight and market access via Specialist Market Research, Specialist Media, Audience Development, Lead Generation and Live B2B Events. Expected revenues of $500m+ in 2023, including product launches in Specialist Media/Audience Development (Industry Dive) and Syndicated Audience/Lead Generation (NetLine).

Capital Allocation Discipline

Increased share buybacks, strong dividend return and earnings enhancing expansion

·      Balance sheet strength¹: Strong cash flow generation, combined with c.£2.5bn value from divestments delivers Net Cash Before Leases of £19.1m at year-end 2022, providing significant flexibility for further organic investment, shareholder returns and targeted expansion;

·      Strong dividend growth¹: Ordinary dividends return in 2022 at 9.8p, with ongoing commitment to pay a minimum of 40% of Adjusted Earnings implying strong double digit dividend growth in 2023;

·      £1bn Share Buyback Programme: Strong cash flow performance and divestment returns enable further increase in share buybacks to £1bn, up from £725m, with £589m completed to date;

·      Addition of Tarsus for $940m: Highly complementary geographic, portfolio and cultural fit, further strengthening Live & On-Demand Events in Asia, China, the Middle East and the Americas, and deepening position in Healthcare, Beauty & Aesthetics, Packaging, Infrastructure, Aviation, Fashion and Sustainability; Sub-9x acquisition multiple on 2024/25 average EBITDA (averaging to remove biennial effect), delivering high single digital earnings accretion and post-tax return on capital.

Board Update

·      Non-Executive Director Appointment: Andy Ransom, the Chief Executive of Rentokil Initial plc, to be appointed to the Informa PLC Board at the 2023 AGM on 15 June, bringing extensive and current international Chief Executive experience to the Group, including a strong track record of leading successful product innovation, digital transformation and developing a high-performance culture. On appointment, Andy will join the Remuneration and Nominations Committees.

Andy will succeed Helen Owers, following the completion of her nine-year term on the Board.

¹In this report we refer to non-statutory measures, as defined in the Financial Review on page 10 and Glossary on page 56.

Enquiries
Stephen A. Carter, Group Chief Executive	+44 (0) 20 8052 0400
Gareth Wright, Group Finance Director	+44 (0) 20 8052 0400
Richard Menzies-Gow, Director of IR & Communications	+44 (0) 20 8052 2787
Tim Burt / Simon Duke - Teneo	+44 (0) 7583 413254 / +44 (0) 7815 779225

 

 

2022 Financial Summary

	2022	20215	Reported		Underlying3
	£m	£m	%		%
Continuing operations:
Revenue	2,262.4	1,583.3	42.9		31.4
Statutory operating profit	184.1	34.4
Adjusted operating profit4	496.3	313.2	58.5		47.0
Adjusted operating margin (%)4	21.9	19.8
Statutory profit before tax	168.8	78.4
Adjusted profit before tax4	451.0	245.4
Statutory diluted earnings per share (p)	9.4	2.3
Adjusted diluted earnings per share (p)4	24.4	12.9
Free cash flow4	417.9	362.3
Discontinued operations:
Revenue	126.9	215.4	(41.1)		5.8
Statutory operating profit	37.8	59.4
Adjusted operating profit4	38.7	75.2	(48.5)		45.4
Adjusted operating margin (%)4	30.5	34.9
Statutory profit before tax	1,778.1	58.7
Adjusted profit before tax4	38.7	75.2
Continuing and Discontinued operations:
Revenue	2,389.3	1,798.7	32.8		29.6
Statutory operating profit	221.9	93.8
Adjusted operating profit4	535.0	388.4	37.7		46.9
Adjusted operating margin (%)4	22.4	21.6
Statutory profit before tax	1,946.9	137.1
Adjusted profit before tax4	489.7	320.6
Statutory diluted earnings per share (p)	111.4	5.2
Adjusted diluted earnings per share (p)4	26.4	16.7
Cash flow from operating activities4	450.9	471.6
Free cash flow4	466.4	438.7
Net debt/(cash) (incl. IFRS 16)4	244.6	1,434.6
Full year dividend per share	9.8	n/a

 

 

2022 Divisional Highlights - Continuing Operations   2022  20215 Reported Underlying3   £m £m % % Informa Markets Revenue 952.1 608.5 56.5 47.0 Statutory operating loss (4.3) (89.9) Adjusted operating profit4 171.5 67.4 154.5 154.3 Adjusted operating margin4 (%) 18.0 11.1 Informa Connect Revenue 395.9 231.9 70.7 45.9 Statutory operating loss 14.6 (16.7) Adjusted operating profit4 56.2 17.3 224.9 238.2 Adjusted operating margin4 (%) 14.2 7.5 Informa Tech Revenue 320.8 165.9 93.4 42.6 Statutory operating loss 19.7 (19.8) Adjusted operating profit4 61.5 11.2 449.1 76.4 Adjusted operating margin4 (%) 19.2 6.8 Taylor & Francis Revenue 593.6 545.4 8.8 3.0 Statutory operating profit 154.1 152.8 Adjusted operating profit4 207.1 204.1 1.5 (5.4) Adjusted operating margin4 (%) 34.9 37.4

 

³In this document we refer to Statutory (Reported) and Underlying results. Underlying figures are adjusted for acquisitions and disposals, the phasing of events including biennials, the impact of changes from new accounting standards and accounting policy changes, and the effects of currency. It includes, on a pro-forma basis, results from acquisitions from the first day of ownership in the comparative period and excludes results from sold businesses from the date of disposal in the comparative period. Statutory figures exclude such adjustments. Alternative performance measures are detailed in the Glossary.

⁴In this document we also refer to Statutory (Reported) and Adjusted results, as well as other non-statutory financial measures. Adjusted results are prepared to provide an alternative measure to explain the Group's performance. Adjusted results exclude adjusting items as set out in Note 8 to the Financial Statements. Operating Cash Flow, Free Cash Flow, Net Debt and other non-statutory measures are discussed in the Financial Review and the Glossary.

⁵Re-presented for the transfer of the Curinos, IGM and Zephyr businesses from Informa Intelligence to Informa Connect. In 2021, total divisional revenue and adjusted operating profit includes a contribution from businesses divested in 2021 that is not included in the table above, including Asset Intelligence, Barbour ABI and Barbour EHS.

 

 

Trading Outlook...Strong Operating Performance

High inflation, rising interest rates and low economic growth are creating a challenging backdrop for all companies and, at a human level, this is putting significant pressure on the cost-of-living in many regions around the world.

Informa has low direct exposure to energy and food costs but is not immune to the wider impacts, although our focus on specialist brands in specialist markets provides resilience and continuing opportunities for growth in the majority of market categories we serve. Our prime focus is on supporting colleagues who are most affected by cost-of-living pressures through a range of targeted initiatives.

2023 Guidance: Reported Group Revenue +20% and Adjusted Operating Profit +35%

We are targeting further strong growth in both underlying and reported revenue and adjusted operating profit in 2023, including continuing strength in Academic Markets and further strong growth in Informa Markets, Informa Connect and in our increasingly diverse, multi-service Informa Tech business.

As our first quarter trading is demonstrating, our business is performing in all regions, including strong growth in North America, the Middle East, Latin American, ASEAN and Europe, alongside progressive reopening in China.

The combination of strong revenue growth and improving operating performance means we are targeting a further 250+ basis points improvement in Adjusted Operating Margins on continuing businesses in 2023. We expect this to step up a further c.200 basis points in 2024. As we exit the GAP 2 programme into 2025, continuing revenue growth, operating leverage, the diversification of our product portfolio and the reinvestment of our balance sheet will see Informa return to be a c.30% margin business.

Guidance for 2023 reflects this strong growth outlook and includes six months contribution from newly acquired Tarsus, with the transaction expected to complete by 1 July 2023.

On this basis, 2023 Reported Group Revenue is expected to be £2,750m to £2,850m and Group Adjusted Operating Profit £675m to £725m (GBP/USD exchange rate of 1.25).

B2B Markets...Creation of $500m+ leader in B2B Digital Services in Informa Tech

Informa Tech is leading Informa's first party data strategy and expansion into adjacent B2B markets for audience-led services, including Specialist Market Research, Specialist Media and Lead Generation.

In 2022, growth and expansion in high value B2B services delivered 93% revenue growth at Informa Tech, including four months of Industry Dive (Specialist Media / Audience Development) and a full year of NetLine (Syndicated Audience / Lead Generation). In 2023, we are targeting further strong double-digit growth, with Informa Tech revenues expected to exceed $500m, with Live B2B Events now accounting for around one third of the total.

One of the founding pillars of Informa Tech is its Specialist Market Research business, Omdia, which was created through the combination of brands and talent from Datamonitor, Ovum and the IHS Tech portfolio. Following significant investment in product development, platform capability and regional sales talent, it has established itself as one of the leading sources of subscription-based tech analysis and insight, driving record annualised contract values in 2022 and strong momentum into 2023.

At the heart of our expansion in B2B Digital Services is our B2B customer data engine, IIRIS (First Party Data), which reports through Informa Tech and is now embedded and collecting data from 90%+ of our B2B portfolio. It is industrially gathering, opted-in, segmented customer data, having tracked over 1.8 billion online interactions and built a total known, engaged and marketable audience (KEMA) of over 15m.

IIRIS data is being used to deliver revenue benefits through more targeted marketing and service delivery, including smart events initiatives that improve the live experience and deliver more value for participants.

Within Informa Tech, IIRIS is also directly supporting the expansion of our increasingly diverse B2B service offering to deliver increasingly rich market insights and market access to technology customers.

IIRIS is unique in gathering both offline and online, fully opted-in, first party B2B data, providing a deep understanding of markets and access to highly specified audiences which deliver high ROI for customers.

 

IIRIS is fuelling expansion at Industry Dive (Specialist Media / Audience Development) supporting the launch of its most successful new Dive to date, Manufacturing Dive, with a number of other launches scheduled in 2023.

Similarly, later in 2023 NetLine (Syndicated Audience / Lead Generation) will launch a new Lead Generation product which will also be powered by fully permissioned, segmented first party IIRIS data.

The increasing importance, value and future growth potential of Informa Tech will be profiled within our Full Year Results presentation by IIRIS President, Max Gabriel and Informa Tech CEO, Gary Nugent.

Academic Markets & Knowledge Services...Growth and diversification of service offering

Taylor & Francis is expanding its operating focus from traditional Pay-to-Read publishing into broader Pay-to-Publish services. This puts researchers (i.e. knowledge makers) at the heart of the business, extending addressable markets and creating further growth opportunities.

Underlying Revenue Growth¹ increased from 2.4% in 2021 to 3.0% in 2022, and we expect further modest acceleration in 2023, moving towards our target for 4% growth as we exit the GAP 2 programme. The year has started strongly on subscription renewals and related cash collections, underlining the continuing demand for specialist, authenticated research. The US remains by far the largest market, and we are investing in further operating capacity to target further growth here.

In Advanced Learning, we are investing in our front list and in the quality of digital access, as digital discovery grows. Around half of annual sales in Advanced Learning and c.80% of total Taylor and Francis revenues are now delivered in a digital format.

In Open Research, we secured several new read and publish contracts, including with the Tokyo Institute of Technology and the Council of Australia University Libraries, with several more scheduled for completion in 2023. These contracts provide access to a combination of Pay-to-Read content and Open Research services.

We are also targeting researchers and research funds directly through our growing range of Open Research services, focusing on subject categories where we have a strong presence and where funding flows are increasing and research volumes growing.

B2B Markets...Strong demand for Live & On-Demand B2B Events

Customer feedback confirms that in an increasingly digital world, the power of live B2B Events for building relationships and doing business is more valued than ever. Our brands provide highly efficient access to specialist markets and this is reflected in the pace of customer return, high levels of engagement and strong Net Promoter Scores.

Within our transaction-driven B2B events business, Informa Markets, 2023 is the first normal calendar schedule and full twelve-month sales cycle (ex-China) since 2019 and this is reflected in the strength of forward bookings, with Q1 and Q2 forecasts largely secure and strong visibility through the second half.

Highlights to date include strong performances in Healthcare (Arab Health, Medlab), Infrastructure & Real Estate (World of Concrete, TISE West) and Health & Nutrition (Natural Products Expo West).

Within Greater China, which typically accounts for c.20%+ of Informa Markets revenue, rapid progress in the government reopening programme means Live Events now look possible in 2023, with a full return in participation expected through 2024.

At Informa Connect, which delivers content-led events, specialist digital content and training, momentum in sponsorship and delegate revenue remains strong, with forward pacing and commitments supporting further strong growth in 2023. Highlights to date include strong performances in Life Sciences (BioTech Showcase) and FinTech (Private Placements Industry Forum).

Across Informa Markets, Informa Connect, Informa Tech, in 2022 we delivered c.87% of 2019 equivalent Live Events revenue (ex-China) and in 2023 we expect this to be 95%+ (ex-China), with a number of major brands expected to exceed 2019 levels.

¹In this report we refer to non-statutory measures, as defined in the Financial Review on page 10 and Glossary on page 56.

 

Strong operating performance and capital allocation discipline

Accelerating Shareholder Returns: £550m+ capital returns in 2022, £600m+ in 2023

As confidence grew, trading accelerated and we delivered our GAP 2 divestments in 2022, we increased the pace of shareholder returns. Today we are further accelerating this commitment through strong dividend growth and an expansion in our share buyback programme, underlining the operating momentum across our businesses, the strength of our cash generation and our confidence in the forward outlook.

We commenced our Share Buyback Programme in February 2022 as part of our GAP 2 Portfolio Focus Programme, initially committing £100m and progressively increasing this to £725m. To date, we have completed £589m, at an average share price of 584p, leading to the cancellation of over 100m shares, c7% of our share capital at the outset of the programme.

Today we are increasing this commitment by £275m to the full £1bn originally outlined within GAP 2, representing over half the post-tax cash proceeds delivered through our Portfolio Focus Programme. On current course and speed, this will take us until at least the end of 2023 to complete.

In addition, we recommenced ordinary dividends at our 2022 interim results and are proposing a 9.8p dividend for the full year. Going forward, we are committed to paying out a minimum of 40% of adjusted earnings from continuing businesses. Based on our guidance range, this implies strong double-digit growth in ordinary dividends in 2023.

Subject to buyback completion, the Group is committing to total shareholder returns of £600m+ in 2023.

B2B growth acceleration through addition of Tarsus

Informa has reached agreement with Charterhouse Capital Partners to acquire Tarsus, the international B2B Events group for an initial enterprise value of $940m, funded through cash resources and $210m of new Informa shares with a two-year lock-up period.

Tarsus owns and operates a portfolio of 160+ major international Live and On-Demand B2B Event brands. Similar to Informa, it has been built with a focus on growing, specialist B2B markets with international reach, fragmented supply chains and high levels of innovation. There is a strong commercial, operational and cultural fit between the two businesses, with the combination creating further reach and depth in Asia, China, the Middle East and the Americas.

Taking the average for 2024/2025 to remove the biennial event impact, Tarsus EBITDA, including synergies, is expected to imply an EV/EBITDA multiple of less than 9x. On the same basis, Tarsus is expected to deliver mid-single digit accretion to Informa's Adjusted Earnings Per Share.

Additionally, in this first full blended year post completion, we expect to deliver a high single digit post-tax return on invested capital, ahead of Informa's long-term weighted average cost of capital.

The transaction is subject to customary regulatory clearances, including Hart-Scott Rodino in the US. Completion is expected by 1 July 2023.

Full details of the combination are detailed within a separate press release, available at www.informa.com.

B2B growth acceleration through Partnerships

Informa has a strong track record of developing commercial partnerships with suppliers, local government and trade associations to accelerate the growth of a market, a region or a specific brand. This includes successful partnerships with the Principality of Monaco in Luxury & Lifestyle, the National Marine Manufacturers Association in International Yachting and the Brazilian Association of the Machinery and Equipment Industry in Agriculture.

In 2023, two new partnerships have expanded our market positions and through combination and new launch activity, are contributing significant Underlying Revenue Growth¹.

¹In this report we refer to non-statutory measures, as defined in the Financial Review on page 10 and Glossary on page 56.

 

 

In the Kingdom of Saudi Arabia, we launched Tahaluf (Alliance in Arabic) in association with the Saudi Federation, SAFCSP, to bring world class events to the region and support the goals of Vision 2030 to diversify the economy and create new growth opportunities.

Two brands have been successfully launched in the country to date, Black Hat Middle East and LEAP, with the latter attracting c.170k visitors, c.700 speakers and c.900 exhibitors in February and making it one of the leading Technology events globally in only its second year.

Our roadmap for Tahaluf includes the launch of three or more brands in each of 2023 and 2024 in markets including Artificial Intelligence (DeepFest), Real Estate (Cityscape) and Food (Feast).

Within the Beauty market, in 2022 we established an agreement with the BolognaFiere Group and the Professional Beauty Association to help expand the growing Beauty market in North America through a combination of new live event launches and enhancements to existing brands.

In 2023, this will see the venture expand its portfolio of North American Beauty brands to include Premiere Beauty events in Anaheim, Orlando, San Antonio and Columbus, alongside the leading US-based Beauty event, Cosmoprof North America, held in Las Vegas in July.

Financial strength and flexibility

The Group's relentless focus on cash management and cash conversion has consistently delivered strong cash generation over recent years. In 2022, strong operating cash flows and high cash conversion was further enhanced by the returns from our divestment programme, which generated c.£2.5bn of value at an average EV/EBITDA multiple of 28x.

This performance delivered Net Cash Before Leases¹ at year-end of £19.1m, providing the Group with significant financial strength and flexibility.

Our gross borrowings of c.£1.9bn, which is all funded through covenant free bonds, have fixed coupon rates, so recent interest rises have not had an immediate impact on interest costs. However, we are receiving more interest income on cash balances, reducing our like-for-like net interest costs.

The strength of our balance sheet and strong trading outlook, has enabled us to extend our £1,050m Revolving Credit Facility to February 2026, with no change in terms, including the coupon rate and absence of covenants.

The acquisition of Tarsus, which is predominantly funded with cash and is expected to complete by 1 July, will reduce our interest income and thus increase net interest costs. On a pro-forma basis, at completion, Net Debt to Adjusted EBITDA¹ is expected to be c.1x, providing significant ongoing flexibility for further organic investment, shareholder returns and targeted expansion.

Further embedded value through retained investments

Our balance sheet strength is further supported by significant embedded value in our portfolio of retained investments. These investments do not materially contribute to reported revenue and adjusted operating profit but provide access to adjacent markets and technology, whilst also offering significant future cash flow benefits if and when value is realised.

Brand	Category	Equity Interest
Norstella	Pharma intelligence	6.7%
Lloyd's List Maritime	Maritime intelligence	20.0%
Curinos	Retail Banking intelligence	56.2%
Founder's Forum	Live & On-Demand B2B Events and B2B Communities	22.3%
Independent Television News	Creative Content Production	20.0%
PA Media Group	Specialist Media and News Services	18.2%
Bridge Events Technologies	On-Demand Event Technology	14.9%

¹ In this report we refer to non-statutory measures, as defined in the Financial Review on page 10 and Glossary on page 56.

 

Strong ESG progress through FasterForward

Informa has a long-term commitment to become a more sustainable business by embedding best practice ESG principles into all our brands and businesses.

This is formalised through our FasterForward programme, a ten-year strategy built around a series of commitments to reduce Informa's carbon and waste footprint, to use content to accelerate sustainable developments in our customer markets, and to multiply the positive impact we have on disadvantaged and disconnected communities.

Through GAP 2, we are investing to accelerate these initiatives through greater education and awareness amongst Informa teams and external partners, enhanced data collection and reporting, and changes in processes and procurement to reduce our impact.

This has seen Informa gain certification as a CarbonNeutral® Company for the last three years and independently verified Science-Based Targets. In Academic Markets, we have also gain recognition for CarbonNeutral® Publications and a number of individual brands within B2B Markets have been classified CarbonNeutral® Events.

External recognition as a leader within Dow Jones Sustainability Index

Our progress to date has also consistently been recognised in independently ranked sustainability indices and surveys. This includes the gold standard Dow Jones Sustainability Index, which ranked Informa as the No 1 group globally in the Media Sector in 2022 for the second consecutive year, the sixth time we have been included in the overall index.

We also received an A- ranking in the Carbon Disclosure Project, an AA ranking in MSCI ESG Ratings and a running score of 9.3 from Sustainalytics.

 

Financial review

Income Statement

The results for the year ended 31 December 2022 reflect a strong trading performance in our continuing businesses, comprising our three B2B Markets businesses (Informa Markets, Informa Connect and Informa Tech) and our Academic Markets business Taylor & Francis. The reported revenues and profits for these businesses in 2022 were significantly higher than 2021, reflecting underlying growth in all businesses and particular strength in B2B Markets following the successful return of live and on-demand events after the disruption caused by the pandemic in 2021. In addition, we saw growth in digital revenues reflecting our investment in this revenue stream. The divestment of Pharma Intelligence, EPFR and Maritime Intelligence concluded during the year with these businesses classified as discontinued operations and therefore presented separately on the income statement.

 

 

	Adjusted results 2022	Adjusting items  2022	Statutory results 2022	Adjusted results  20211,2	Adjusting items  20211,2	Statutory results 20211,2
	£m	£m	£m	£m	£m	£m
Continuing operations
Revenue	2,262.4	-	2,262.4	1,583.3	-	1,583.3
Operating profit/(loss)	496.3	(312.2)	184.1	313.2	(278.8)	34.4
Profit on disposal of subsidiaries and operations	-	11.6	11.6	-	111.8	111.8
Distributions received from investments	-	20.6	20.6	-	-	-
Fair value loss on investments	-	(0.9)	(0.9)	-	-	-
Net finance costs	(45.3)	(1.3)	(46.6)	(67.8)	-	(67.8)
Profit/(loss) before tax	451.0	(282.2)	168.8	245.4	(167.0)	78.4
Tax (charge)/credit	(81.2)	54.5	(26.7)	(36.7)	2.6	(34.1)
Profit/(loss) for the year from continuing operations	369.8	(227.7)	142.1	208.7	(164.4)	44.3
Discontinued operations
Profit/(loss) for the year from discontinued operations	29.5	1,463.7	1,493.2	57.4	(13.5)	43.9
Profit/(loss) for the year	399.3	1,236.0	1,635.3	266.1	(177.9)	88.2
Adjusted operating margin from continuing operations	21.9%			19.8%
Adjusted diluted and statutory diluted EPS from continuing operations	24.4p		9.4p	12.9p		2.3p

¹ Re-presented for discontinued operations (see note 3 to the Condensed Consolidated Financial Statements).

² Includes the results of Barbour EHS, Barbour ABI and our Asset Intelligence portfolio, including Equipment Watch, which were disposed in 2021. These businesses contributed £31.6m to revenue, £13.2m to adjusted operating profit and £8.0m to statutory operating profit and are included within continuing operations as the disposal did not meet the criteria for being disclosed as a discontinued operation.

 

 

Statutory Results

The growth in our businesses noted above represents a 42.9% increase in revenue from continuing operations to £2,262.4m, and a 31.4% increase on an underlying basis. Every Division delivered underlying revenue growth in the year.

For continuing operations, the Group reported a statutory operating profit of £184.1m in 2022, compared with a statutory operating profit of £34.4m for the year ended 31 December 2021. Both periods reflect some impact from pandemic disruption, albeit less so in 2022, and accordingly we saw a strong continued return in our live and on-demand events in all geographies outside China. Adjusted operating profit from continuing operations was £496.3m which reflected growth of 58.5% on a reported basis, again with growth delivered in all our Divisions.

Statutory net finance costs reduced by £21.2m to £46.6m, with adjusted net finance costs reducing £22.5m to £45.3m. Lower net finance costs were driven by interest earned on higher cash balances arising from the divestments related to the completion of our portfolio focus programme as part of our GAP 2 strategy.

The Group received a distribution, subsequent to the disposal, of £20.6m from its retained investment in the Pharma Intelligence business.

The combination of all these factors led to a statutory profit before tax for continuing operations of £168.8m in 2022, compared with a profit before tax of £78.4m in the year ended 31 December 2021. The profit in the year led to a statutory tax charge of £26.7m in 2022 compared with a tax charge of £34.1m in the prior year.

This profit outcome translated into a statutory diluted earnings per share for continuing operations of 9.4p compared with 2.3p for the year ended 31 December 2021. This improvement reflects stronger trading and the lower number of shares in issue as a result of the share buyback programme. Adjusted diluted earnings per share (EPS) from continuing operations grew to 24.4p from 12.9p in the prior year.

Discontinued operations

The divestments of Pharma Intelligence on 1 June 2022, the EPFR fund flow business on 3 October 2022 and Maritime Intelligence on 1 December 2022 resulted in part-year contributions from these businesses during 2022. The results of these businesses have been treated as discontinued operations. In total, the contributions during the year from these activities amounted to revenues of £126.9m (2021: £215.4m), adjusted operating profit of £38.7m (2021: £75.2m), statutory operating profit of £37.8m (2021: £59.4m) and adjusted diluted earnings per share of 2.0p (2021: 3.8p).

Within discontinued operations there was also a profit on disposal before tax of the three Informa Intelligence divestments which totalled £1,740.3m, partially offset by £0.9m of operating expenses treated as adjusting items, in the year.

The results for the year ended 31 December 2021 have been re-presented to reflect the impact of discontinued operations following the sale of Pharma Intelligence on 1 June 2022, the EPFR fund flow business on 3 October 2022 and Maritime Intelligence on 1 December 2022. The effect of this re-presentation is shown in Note 3 to the Condensed Consolidated Financial Statements.

 

 

Measurement and Adjustments

In addition to statutory results, adjusted results are prepared for the Income Statement. These include adjusted operating profit, adjusted diluted earnings per share and other underlying measures. A full definition of these metrics can be found in the glossary of terms on page 56. The divisional table on page 13 provides a reconciliation between statutory operating profit and adjusted operating profit by division.

Underlying revenue and adjusted operating profit growth on an underlying basis are reconciled to statutory growth in the table below:

	Underlying growth/ (decline)	Phasing and other items	Acquisitions and disposals	Currency change	Reported growth/ (decline)
2022 continuing operations
Revenue	31.4%	(0.3%)	2.1%	9.7%	42.9%
Adjusted operating profit	47.0%	0.5%	(1.6%)	12.6%	58.5%
2021 continuing operations1
Revenue	4.6%	5.2%	1.9%	(4.3%)	7.4%
Adjusted operating profit	40.3%	33.4%	2.7%	(18.0%)	58.4%

¹ Re-presented for discontinued operations

Adjusting Items

The items below have been excluded from adjusted results. The total adjusting items included in the operating profit in the year for continuing operations were £312.2m (2021: £278.8m). The £33.4m increase in adjusting items is primarily due to increased acquisition costs and increased amortisation arising from the acquisition of Industry Dive, the full year-effect of acquisitions in 2021 and last year's one-off COVID-19 insurance credit of £23.6m. The most significant item in 2022 was intangible asset amortisation of £275.3m.

	2022	2021
	£m	£m
Continuing operations
Intangible amortisation and impairment
Intangible asset amortisation1	275.3	261.8
Impairment - acquisition-related and other intangible assets	6.9	7.9
(Reversal) / impairment - IFRS 16 right of use assets	(0.1)	9.2
(Reversal) / Impairment - property and equipment	(0.7)	3.1
Acquisition costs	11.8	2.7
Integration costs	10.2	7.3
Restructuring and reorganisation costs	(1.6)	3.2
One-off insurance credits associated with COVID-19	-	(23.6)
Onerous contracts associated with COVID-19	4.7	9.7
Subsequent remeasurement of contingent consideration	5.7	3.8
VAT credits	-	(6.3)
Adjusting items in operating profit from continuing operations	312.2	278.8
Profit on disposal of subsidiaries and operations	(11.6)	(111.8)
Distributions from investments	(20.6)	-
Fair value loss on investments	0.9	-
Finance costs	1.3	-
Adjusting items in profit before tax from continuing operations	282.2	167.0
Tax related to adjusting items	(54.5)	(2.6)
Adjusting items in profit for the year from continuing operations	227.7	164.4
Discontinued operations
Intangible asset amortisation	0.4	6.6
(Reversal) / impairment - IFRS 16 right of use assets	(0.5)	2.6
Impairment - property and equipment	-	1.3
Acquisition costs	0.1	0.6
Integration costs	1.1	1.3
Restructuring and reorganisation costs	(0.2)	3.0
Subsequent measurement of contingent consideration	-	0.4
Adjusting items in operating profit from discontinued operations	0.9	15.8
(Profit) / loss on disposal of subsidiaries and operations	(1,740.3)	0.7
Adjusting items in profit before tax from discontinued operations	(1,739.4)	16.5
Tax related to adjusting items	275.7	(3.0)
Adjusting items in profit for the year from discontinued operations	(1,463.7)	13.5
Adjusting items in profit for the year from continuing and discontinued operations	(1,236.0)	177.9

1.        Excludes acquired intangible product development and software amortisation.

Intangible amortisation on continuing operations of £275.3m relates to the historical additions of book lists and journal titles, acquired databases, customer and attendee relationships and brands related to exhibitions, events and conferences. As it relates to acquisitions, it is not treated as an ordinary cost. By contrast, intangible asset amortisation arising from software assets and product development is treated as an ordinary cost in the calculation of operating profit, so is not treated as an adjusting item.

Acquisition costs on continuing operations of £11.8m principally relate to the acquisition of Industry Dive.

Onerous contracts, on continuing operations, associated with the pandemic reduced significantly compared with the prior year with a charge of £4.7m in 2022 (2021: £9.7m). This reflects the reduction in the level of events cancelled or postponed due to the pandemic, where the costs could not be recovered, typically relating to venues and marketing. The prior year also included a one-off insurance credit of £23.6m associated with insurance cash receipts related to events cancelled due to the pandemic.

The profit on disposal of discontinued operations of £1,740.3m reflects the gain recognised following the sale of the Intelligence Division, of which £1,352.2m related to the disposal of Pharma Intelligence, £111.1m to EPFR and £277.0m to Maritime Intelligence. See Note 15 to the Condensed Consolidated Financial Statements.

The table below shows the results and adjusting items by Division for continuing operations, highlighting the continued growth in our B2B Markets Divisions as live and on-demand events returned strongly to most geographies, supported by a further acceleration of growth at Taylor & Francis.

	Informa Markets	Informa Tech	Informa Connect	Taylor & Francis	Group
	£m	£m	£m	£m	£m
Revenue from continuing operations	952.1	320.8	395.9	593.6	2,262.4
Underlying revenue growth	47.0%	42.6%	45.9%	3.0%	31.4%
Statutory operating profit/(loss) from continuing operations	(4.3)	19.7	14.6	154.1	184.1
Add back:
Intangible asset amortisation1	168.7	27.0	26.8	52.8	275.3
Impairment - acquisition-related and other intangible assets	6.7	-	0.2	-	6.9
Impairment - IFRS 16 right of use assets	(2.5)	(0.3)	3.6	(0.9)	(0.1)
Impairment - property and equipment	(0.4)	(0.1)	-	(0.2)	(0.7)
Acquisition costs	0.1	11.1	0.3	0.3	11.8
Integration costs	0.4	1.7	8.3	(0.2)	10.2
Restructuring and reorganisation costs	(2.3)	(0.8)	2.2	(0.7)	(1.6)
Onerous contracts associated with COVID-19	5.0	(0.5)	0.2	-	4.7
Subsequent remeasurement of contingent consideration	0.1	3.7	-	1.9	5.7
Adjusted operating profit from continuing operations	171.5	61.5	56.2	207.1	496.3
Underlying adjusted operating profit growth/(decline)	154.3%	76.4%	238.2%	(5.4)%	47.0%

1.          Intangible asset amortisation is in respect of acquired intangibles and excludes amortisation of software and product development.

Adjusted Net Finance Costs

Adjusted net finance costs from continuing operations, consisting of the interest costs on our corporate bonds and bank borrowings, decreased by £22.5m to £45.3m. The decrease in net finance costs primarily relates to higher interest income on the increased cash balance due to improved Free Cash Flow and cash proceeds of £2.1bn following the disposal of the Intelligence Division.

During the year, the Group repaid €200m of Euro Medium Term Note (EMTN) borrowings from surplus funds. The borrowings were due to be repaid in July 2023 and were repaid early to reduce interest costs. Unamortised fees relating to the repaid borrowings of £1.3m were charged to the income statement as an adjusting item.

The reconciliation of adjusted net finance costs to the statutory finance costs and finance income is as follows:

        

	2022	2021
	£m	£m
Finance income	(27.5)	(5.7)
Finance costs	74.1	73.5
Statutory net finance costs	46.6	67.8
Add back: adjusting items relating to finance costs	(1.3)	-
Adjusted net finance costs	45.3	67.8

 

Taxation

Approach to tax

The Group continues to recognise that taxes paid are part of the economic benefit created for the societies in which we operate, and that a fair and effective tax system is in the interests of tax-payers and society at large. We aim to comply with tax laws and regulations everywhere the Group does business and Informa has open and constructive working relationships with tax authorities worldwide. Our approach balances the interests of stakeholders including shareholders, governments, colleagues and the communities in which we operate.

The Group's effective tax rate on adjusted profits (as defined in the glossary) reflects the blend of tax rates and profits in the jurisdictions in which we operate. In 2022, the effective tax rate on adjusted profits for continuing operations was 18.0% (2021: 15.0%).

The calculation of the Effective Tax Rate on Adjusted Profits for continuing operations is as follows:

 

	2022	20211
	£m	£m
Adjusted tax charge for continuing operations	81.2	36.7
Adjusted profit before tax for continuing operations	451.0	245.4
Effective Tax Rate on Adjusted Profits for continuing operations %	18.0%	15.0%

 

 

 

 

Tax payments

During 2022, the Group paid £71.7m (2021: £41.6m) of corporation tax and similar taxes in relation to continuing operations, with the year-on-year increase reflecting the higher profit before tax reported in the year.

 

A breakdown of the main geographies in which the Group paid tax is as follows:

	2022	2021
	£m	£m
UK	6.9	3.2
Continental Europe	18.8	15.0
US	32.0	(0.7)
China	9.0	23.0
Rest of world	5.0	1.1
Total	71.7	41.6

 

 

 

The reconciliation of the adjusted tax charge to cash taxes paid is as follows:

	2022	2021
	£m	£m
Tax charge on adjusted profit before tax per Consolidated Income Statement	81.2	36.7
Movement in deferred tax including tax losses	(18.8)	6.1
Net current tax credits in respect of adjusting items	(9.0)	(2.1)
Movement in provisions for uncertain tax positions	(6.5)	6.6
Taxes paid in different year to charged	24.8	(5.7)
Taxes paid per statutory cash flow	71.7	41.6

 

In addition, tax of £205.4m was paid in relation to profit on disposal and discontinued operations.

At the end of 2022, the recognised deferred tax assets relating to US and UK tax losses were £20.0m (2021: £106.8m) and £29.7m (2021: £34.7m) respectively. These are expected to be utilised against future taxable profits.

 

Goodwill is not amortised as it is subject to impairment review, and as a result there is no charge to adjusting items for goodwill amortisation. However, there can be an allowable tax benefit for certain goodwill amortisation in the US and elsewhere. Where this benefit arises, it reduces the tax charge on adjusted profits.

 

The amortisation of intangible assets is considered an adjusting item. The £10.7m (2021: £13.6m) of current tax credits taken in respect of the amortisation of intangible assets is therefore also treated as an adjusting item and included in the tax credits in respect of adjusting items.

 

Tax contribution

The Group's total tax contribution, from continuing and discontinued operations, which comprises all material taxes paid to, and collected, on behalf of governments globally was £590.7m in 2022 (2021: £267.2m). The geographic split of taxes paid by our businesses was as follows:

 

	UK	US	Other	Total
	£m	£m	£m	£m
Profit taxes borne	7.9	236.4	32.8	277.1
Employment taxes borne	27.8	26.1	12.7	66.6
Other taxes	5.0	0.8	2.2	8.0
Total	40.7	263.3	47.7	351.7

 

In addition to the above, in 2022 we collected taxes on behalf of governments (e.g. employee taxes and sales taxes) amounting to £239.0m (2021: £166.6m).

 

Earnings Per Share

Adjusted diluted EPS from continuing operations was 89.1% higher at 24.4p (2021: 12.9p), largely reflecting higher adjusted earnings of £356.5m (2021: £194.4m) together with a 3% decrease in the weighted average number of shares following the share buybacks during the year.

An analysis of adjusted diluted EPS and statutory diluted EPS is as follows:

	2022	20211
	£m	£m
Statutory profit for the year from continuing operations	138.3	34.0
Add back: Adjusting items in profit/loss for the year	227.7	164.4
Adjusted profit for the year	366.0	198.4
Non-controlling interests relating to adjusted profit	(9.5)	(4.0)
Adjusted earnings from continuing operations	356.5	194.4
Weighted average number of shares used in adjusted diluted EPS (m)	1,464.3	1,510.2
Adjusted diluted EPS (p) from continuing operations	24.4p	12.9p

 

	2022	20211
	£m	£m
Statutory profit for the year from continuing operations	142.1	44.3
Non-controlling interests	(3.8)	(10.3)
Statutory earnings from continuing operations	138.3	34.0
Weighted average number of shares used in diluted EPS (m)	1,464.3	1,510.2
Statutory diluted EPS (p) from continuing operations	9.4p	2.3p

1.           Re-presented for discontinued operations (see note 3).

Dividends

Following the temporary suspension of dividend payments as part of the Group's response to the pandemic, the Group has resumed ordinary dividend payments. An interim dividend of 3.0p per share (2021: nil pence per share) was paid on 9 September 2022. The total amount paid was £43.3m (2021: £nil).

As previously announced the Group intends to declare dividends at an annual payout ratio of at least 40% of annual continuing adjusted earnings. Accordingly, the Board has proposed a final dividend of 6.8p per share (2021: nil pence per share). The final dividend is scheduled expected to be paid on 14 July 2023 to ordinary shareholders registered at the close of business on 2 June 2023. This will result in total dividends for the year of 9.8p (2021: nil pence).

The growth in earnings in 2022 means dividend cover (see Glossary of Terms for definition) was 2.5 times (2021: n/a), being adjusted diluted EPS on continuing operations of 24.4p (2021: 12.9p) divided by total dividends per share of 9.8p (2021: nil). Our dividend payout ratio was 40%, being total dividends per share of 9.8p divided by the adjusted diluted EPS on continuing operations of 24.4p.

Currency Movements

One of the Group's strengths is its international reach and balance, with colleagues and businesses located in most major economies of the world. This means the Group generates revenues and costs in a mixture of currencies, with particular exposure to the US dollar, as well as some exposure to the euro and the Chinese renminbi.

In 2022 across our continuing and discontinued operations, approximately 65% (2021: 58%) of Group revenue was received in USD or currencies pegged to USD, with 8% (2021: 8%) received in euro and 1% (2021: 9%) in Chinese renminbi.

Similarly, on continuing and discontinued operations we incurred approximately 54% (2021: 48%) of our costs in USD or currencies pegged to USD, with 3% (2021: 8%) in Chinese renminbi and 3% (2021: 3%) in euro.

For continuing and discontinued operations, each one cent ($0.01) movement in the USD to GBP exchange rate has a circa £13m (2021: circa £8m) impact on annual revenue, and a circa £5m (2021: circa £3m) impact on annual adjusted operating profit.

The following rates versus GBP were applied during the year:

	2022			2021
	Closing rate	Average rate	Closing rate		Average rate
US Dollar	1.21	1.24	1.35		1.38
Renminbi	8.34	8.30	8.57		8.87
Euro	1.13	1.17	1.19		1.16

 

Free Cash Flow

Cash management and cash generation remain a key priority and focus for the Group, providing the funds and flexibility for paying down debt, future organic and inorganic investment and consistent shareholder returns. Our businesses typically convert adjusted operating profit into cash at a strong conversion rate, reflecting the relatively low capital intensity of the Group. In 2022, absolute levels of cash flow showed continued improvement on the prior year period despite cash being held at 31 December 2021 against 2022 events, previously postponed.

The following table reconciles the statutory operating profit to operating cash flow (OCF) and free cash flow (FCF), both of which are defined in the glossary.

	2022	20213
	£m	£m
Statutory operating profit	184.1	34.4
Add back: Adjusting items	312.2	278.8
Adjusted operating profit	496.3	313.2
Depreciation of property and equipment	11.7	12.7
Depreciation of right of use assets	24.8	24.2
Software and product development amortisation	35.2	31.6
Share-based payments	17.5	15.0
Loss on disposal of other assets	0.3	0.1
Adjusted share of joint venture and associate results	(2.1)	(3.0)
Adjusted EBITDA1	583.7	393.8
Net capital expenditure	(67.5)	(38.4)
Working capital movement2	65.3	144.7
Pension deficit contributions	(6.9)	(6.3)
Operating Cash Flow	574.6	493.8
Restructuring and reorganisation	(14.1)	(29.4)
Onerous contracts and one-off (payments)/receipts associated with COVID-19	(5.5)	13.9
Net interest	(65.4)	(74.4)
Taxation	(71.7)	(41.6)
Free Cash Flow from continuing operations	417.9	362.3
Free Cash Flow from discontinued operations	48.5	76.4
Free Cash Flow	466.4	438.7

1.          Adjusted EBITDA represents adjusted operating profit before interest, tax, and non-cash items including depreciation and amortisation.

2.         Working capital movement excludes movements on restructuring, reorganisation, COVID-19 costs and acquisition and integration accruals or provisions as the cash flow relating to these amounts is included in other lines in the Free Cash Flow and reconciliation from Free Cash Flow to net funds flow. The variance between the working capital in the Free Cash Flow and the Consolidated Cash Flow Statement is driven by the non-cash movement on these items.

3.         Re-presented for discontinued operations (see note 3 to the Condensed Consolidated Financial Statements).

 

 

 

Free cash flow from continuing operations was £55.6m higher than 2021 principally due to the £183.1m higher adjusted operating profit, partially offset by higher cash tax of £30.1m, higher capex investment of £29.1m and a reduction of £79.4m in the working capital inflow. The calculation of operating cash flow conversion and free cash flow conversion is as follows:

	Operating Cash Flow conversion		Free Cash Flow conversion
	2022	20211	2022	20211
	£m	£m	£m	£m
Operating / Free Cash Flow from continuing operations	574.6	493.8	417.9	362.3
Adjusted operating profit from continuing operations	496.3	313.2	496.3	313.2
Operating / Free Cash Flow conversion from continuing operations	115.8%	157.7%	84.2%	115.7%

1.          Re-presented for discontinued operations (see note 3 to the Condensed Consolidated Financial Statements).

 

Net capital expenditure from continuing operations increased to £67.5m (2021: £38.4m) reflecting initial investments as part of our GAP 2 strategy. Capital expenditure was equivalent to 3.0% of 2022 continuing revenue (2021: 2.4%), and we expect full-year 2023 capital expenditure to be at a level closer to 4.0% relative to revenue as further GAP 2 investments are made.

 

The continuing working capital inflow of £65.3m was £79.4m lower than the inflow in 2021, which benefited from the restart in live and on-demand events after the pandemic, whereas 2022 benefited from the ongoing recovery in live and on-demand revenues.

Net cash interest payments of £65.4m were £9.0m lower than the prior year, largely reflecting interest income on the Group's increased cash balances generated by the divestment of the businesses within the Intelligence division.

The following table reconciles net cash inflow from operating activities for continuing operations, as shown in the consolidated cash flow statement, to Free Cash Flow from continuing operations:

	2022 Continuing	20211 Continuing
	£m	£m
Net cash inflow/(outflow) from operating activities for continuing operations per statutory cash flow	397.2	385.9
Interest received	25.7	5.6
Borrowing fees paid	-	-
Purchase of property and equipment	(14.5)	(6.9)
Purchase of intangible software assets	(37.9)	(25.2)
Product development cost additions	(15.1)	(6.3)
Add back: Acquisition and integration costs paid	18.2	9.2
Add back: Pension payment into escrow	28.2	-
Add back: Additional pension payments	16.1	-
Free Cash Flow from continuing operations	417.9	362.3

1. Re-presented for discontinued operations (see note 3 to the Condensed Consolidated Financial Statements).

 

 

Net cash from operating activities for continuing operations increased by £11.3m to record an inflow of £397.2m, principally driven by the increased profits in the year, together with improved cash collections related to forward event bookings.

The following table reconciles cash generated by operations for continuing operations, as shown in the Consolidated Cash Flow Statement to operating cash flow from continuing operations shown in the free cash flow table above:

	2022 Continuing	20211 Continuing
	£m	£m
Cash generated by operations for continuing operations per statutory cash flow	560.0	507.5
Capital expenditure paid	(67.5)	(38.4)
Add back: Acquisition and integration costs paid	18.2	9.2
Add back: Restructuring and reorganisation costs paid	14.1	29.4
Add back: Pension payment into escrow	28.2	-
Add back: Additional pension payments	16.1	-
Onerous contracts and one-off (credits received)/costs paid associated with COVID-19	5.5	(13.9)
Operating Cash Flow from continuing operations	574.6	493.8

1.          Re-presented for discontinued operations (see note 3 to the Condensed Consolidated Financial Statements).

 

The following table reconciles free cash flow from continuing and discontinued operations to net funds flow and net debt, with net debt reducing by £1,190.0m to £244.6m during the year. This reduction in net debt is primarily due to the proceeds from the divestment of the businesses within the Intelligence division, positive cash from operations offset by the acquisition of Industry Dive, the share buyback programme and the resumption of ordinary dividends.

	2022	20211
	£m	£m
Free Cash Flow from continuing and discontinued operations	466.4	438.7
Acquisitions	(405.3)	(90.9)
Disposals	1,896.8	280.9
Additional pension payments	(16.1)	-
Pension payment into escrow	(28.2)	-
Add back: repayment of acquired debt	36.6	-
Dividends paid to shareholders	(43.3)	-
Dividends paid to non-controlling interests	(9.5)	(8.6)
Dividends received from investments	1.8	2.8
Distributions received from investments	20.6	-
Issuance of shares	-	(0.2)
Purchase of own shares through share buyback	(513.3)	-
Purchase of shares for Trust	(3.3)	(2.5)
Net funds flow	1,403.2	620.2
Non-cash movements	(133.0)	(78.9)
Foreign exchange	(31.8)	106.2
Net finance lease additions in the year	(11.8)	(18.8)
Net debt at 1 January	(1,434.6)	(2,029.6)
Acquired debt	(36.6)	(33.7)
Net cash/(debt)	(244.6)	(1,434.6)

1.          Re-presented for discontinued operations (see note 3 to the Condensed Consolidated Financial Statements).

 

 

 

 

Financing and Leverage

The strong free cash flow performance in the year, together with disposal proceeds helped to reduce net debt by £1.2bn in the year to £244.6m at 31 December 2022 (31 December 2021: £1.4bn).

The Group retains significant available liquidity, with unutilised committed financing facilities available to the Group of £1,099.9m (31 December 2021: £1,094.6m). Combined with £2,125.8m of cash (2021: £884.8m), this increased available Group-level liquidity at 31 December 2022 to £3,225.7m (31 December 2021: £1,979.4m).

The average debt maturity on our drawn borrowings is currently 3.1 years (31 December 2021: 3.9 years). The EUR EMTN maturity of GBP equivalent €450.0m (£398.4m) in July 2023 notwithstanding, there are no significant maturities until October 2025.

	2022	2021
Net debt and committed facilities	£m	£m
Cash and cash equivalents	(2,125.8)	(884.8)
Bond borrowings	1,910.7	2,001.3
Bond borrowing fees	(8.8)	(12.1)
Bank borrowings	41.3	36.8
Bank borrowing fees	(2.4)	(3.4)
Derivative assets associated with borrowings	(2.2)	(3.4)
Derivative liabilities associated with borrowings	168.1	40.7
Net (cash)/debt before leases	(19.1)	1,175.1
Lease liabilities	270.4	265.9
Finance lease receivables	(6.7)	(6.4)
Net (cash)/debt	244.6	1,434.6
Borrowings (excluding derivatives, leases, fees & overdrafts)	1,952.0	2,038.1
Unutilised committed facilities (undrawn RCF)	1,050.0	1,050.0
Unutilised committed facilities (undrawn Curinos facilities)	49.9	44.6
Total committed facilities	3,051.9	3,132.7

 

The Informa leverage ratio at 31 December 2022 was (0.2) times (31 December 2021: 2.8 times), and the Informa interest cover ratio was 16.6 times (31 December 2021: 7.8 times). Both are calculated consistently with our historical basis of reporting of financial covenants which no longer applied at 31 December 2022. See the Glossary of terms for the definition of Informa leverage ratio and Informa interest cover.

The calculation of the Informa leverage ratio is as follows:

	2022	2021
	£m	£m
Net (cash)/debt	244.6	1,434.6
Adjusted EBITDA	625.5	478.1
Adjusted leverage	0.4x	3.0x
Adjustment to EBITDA1	-	0.4x
Adjustment to net cash/debt1	(0.6)x	(0.6x)
Informa Leverage ratio	(0.2)x	2.8x

1.     Refer to Glossary for details of the adjustments to EBITDA and Net Debt for Informa leverage ratio.

The calculation of Informa interest cover is as follows:

	2022	2021
	£m	£m
Adjusted EBITDA	625.5	478.1
Adjusted net finance costs	45.3	67.8
Adjusted interest cover	13.8x	7.1x
Adjustment to EBITDA1	2.8x	0.7x
Informa Interest cover	16.6x	7.8x

1.       Refer to Glossary for details of the adjustments to EBITDA for Informa interest cover.

 

There are financial covenants over £41.3m (2021: £36.8m) of drawn borrowings in the Curinos business. These financial covenants are ring-fenced to borrowings against the Curinos business only.

Corporate Development

During the year, the Group completed the divestment of the Intelligence division as a key element of the Group's GAP 2 Portfolio Focus strategy. Informa has a proven track record in creating value through identifying, executing and integrating complementary businesses effectively into the Group. In 2022, cash invested in acquisitions was £405.3m (2021: £90.9m), with £315.1m of net spend relating to acquisitions net of cash acquired (2021: £68.2m),, £9.8m (2021: £3.3m) to cash paid for business assets, £20.1m (2021: £10.3m) to acquisition and integration spend, £1.5m (2021: £1.5m) to the cash settlement on the exercise of an option relating to non-controlling interests, £22.2m to the acquisition of the convertible bond, £36.6m to the repayment of debt in relation to Industry Dive, and £nil (2021: £7.6m) relating to other investments.

Net proceeds from disposals amounted to £1,896.8m (2021: £280.9m), with £1,664.9m relating to the divestment of Pharma Intelligence, £165.2m to the divestment of EPFR, £302.5m to the divestment of Maritime Intelligence in the year and tax paid on disposals of £204.4m. 

Acquisitions

In September 2022 Informa completed the share acquisition of Industry Dive. Industry Dive brings capabilities in audience development and lead generation through high-quality specialist content and business journalism. Industry Dive has more than 2.5m active subscribers and a total engaged audience of circa 13m, across 24 specialist B2B markets via 27 specialist dives. Industry Dive forms part of the Informa Tech division.

Cash consideration was £309.0m ($359.3m) with estimated contingent consideration, based on the future revenue performance of the business, of £126.1m ($146.6m). The contingent consideration was fair valued at year end to £125.3m with the decrease due to a movement in the discount rate and USD to GBP exchange rate. In addition to the cash consideration of £309.0m, Industry Dive debt of £36.6m was immediately repaid upon completion. See Note 14 to the Consolidated Financial Statements for further details.

Divestments and Share BuyBack

A central theme of the GAP 2 strategy was the decision to focus and accelerate investment in the two markets where the Group has leadership positions of scale and which offer attractive opportunities for further growth and expansion: Academic Markets & Knowledge Services and B2B Markets & Digital Services and divest certain businesses in the Informa Intelligence division.

On 1 June 2022, the divestment of Pharma Intelligence completed, having been first announced on 10 February 2022. The terms of the deal saw the Group receive £1.66bn in cash before tax and a 15% shareholding in the ongoing business. This 15% equity interest ranks pari passu with Warburg Pincus' equity (the acquirer), enabling Informa to realise significant value today, whilst sharing in the future value created from further growth and portfolio expansion in the ongoing business. Pharma Intelligence was the largest business that was held within the Informa Intelligence Division and is a leading provider of specialist intelligence and data for clinical trials, drug development and regulatory compliance. The profit on disposal before tax was £1.35bn. Subsequent to the disposal, a distribution of £20.6m was received following the post-disposal merger between Citeline, previously Pharma Intelligence, and Norstella. Informa's stake in the expanded business has been diluted to 6.7% following the merger however a 15% stake in the holding company is maintained.

On 3 October 2022, the divestment of EPFR completed for an overall consideration before tax of £165.2m. EPFR provides fund flows and asset allocation data to financial institutions domiciled globally, delivering a complete picture of institutional and retail investor flows and fund manager allocations driving global markets. The profit on disposal before tax was £111.1m.

On 1 December 2022, the divestment of Maritime Intelligence completed for cash consideration of £302.5m together with a 20% equity and 23.5% preference shares holding in the ongoing business. This ongoing interest ranks pari passu with Montagu (the acquirer), enabling Informa to realise value today, while being able to participate in the future value created from further growth in the ongoing business. Maritime Intelligence is at the heart of global seaborne transport and trade, providing the information needed by professionals at the right time and in the right format, to help them make better decisions, more quickly. The profit on disposal before tax was £277.0m.

As part of the GAP 2 strategy, the Group has also committed to return value to shareholders through a share buyback programme of £1bn and, by 31 December 2022, £517.0m of shares had been repurchased with 89.0m shares cancelled. The shares acquired were at an average price of 573p per share, with prices ranging from 506p to 628p.

Pensions

The Group continues to meet all commitments to its pension schemes, which include six defined benefit schemes, all of which are closed to future accruals.

At 31 December 2022, the Group had a net pension surplus of £49.1m (31 December 2021: £1.6m), comprising a pension surplus of £55.8m (31 December 2021: £15.5m) and pension deficits of £6.7m (31 December 2021: £13.9m). Gross liabilities were £477.3m at 31 December 2022 (31 December 2021: £735.2m). The decrease in liabilities is predominantly driven by the increase in the discount rates used for calculating the present value of the pension liability, with rates for UK schemes increasing 305 basis points from 1.90% in the prior year to 4.95% at 31 December 2022, in line with increased yields on benchmark high-quality corporate bonds.

The Pharma Intelligence disposal which completed on 1 June 2022 resulted in an agreement with the Trustees of the UK schemes to accelerate agreed deficit repair contributions for the UK schemes. This resulted in a one-off payment of £16.1m and a contribution of £28.2m into an escrow fund, with payment from this fund to the pension schemes being dependent on the future financial strength of the UK pension schemes. Payment of both these amounts was made in the second half of 2022. As part of the Schedule of Contributions agreed at the time of the last valuation of the UBM Pension Scheme there is also an agreement to pay £0.7m of additional contributions to that scheme at each dividend payment date.

Audit Tender Update

As announced at our interim results and following an audit tender process, PricewaterhouseCoopers LLP (PwC) will, subject to shareholder approval at the 2023 AGM, be appointed Informa's auditor commencing 1 January 2023. Transition planning is already underway and, as is usual during the transition of auditors, PwC attended key meetings, as observers, throughout the year end audit of the 2022 results.