Informa PLC 2023 Half-Year Results

27 July 2023

Accelerating Growth in B2B Events, Specialist Data and Digital Services

Informa (LSE: INF.L), the international B2B Events, Specialist Data, Digital Services and Academic Markets Group today published half year results for 2023, delivering strong operating and financial performance and continued progress on its Growth Acceleration Plan 2 ("GAP 2").

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

"We are focused on building a better, broader and more scalable business, which is reflected in a very strong first half performance, putting us on track to meet or beat our guidance for 2023, with further momentum visible into 2024 and 2025."

He added: "As The Leading and Largest Owner/Operator of B2B Events, Specialist Data and Digital Services Internationally, we see continuing strong demand from B2B customers, giving us confidence in further growth."

Accelerating growth in revenues, profits and cashflows

2023 Half Year Results reflect strong performances in all businesses¹

·      Strong Reported Growth in H1 2023: Further strong growth in Revenue (+53.0% to £1,520.5m), Adjusted Operating Profit¹ (+102.9% to £413.5m) and Free Cash Flow¹ (+62.8% to £224.6m);

·      Underlying Growth Acceleration¹: Underlying revenue growth of 31.9% and an increase in underlying adjusted operating profit of 56.5% in H1 2023, reflecting an improved performance in Academic Markets, strong growth in B2B Events and further progress in B2B Digital Services;

·      Increased Operating Margin¹: Significant increase in adjusted operating margin (+670bpts to 27.2%), ahead of full year guidance, driven by higher underlying revenues and strong operating leverage.

·      Significant increase in Earnings per Share¹: Adjusted diluted earnings per share +134.4% to 22.5p (H1 2022: 9.6p), reflecting strong growth in earnings and the benefit from recent share buybacks;

·      Improving Statutory Performance: H1 2023 statutory revenue of £1,520.5m (2022: £993.5m), statutory operating profit of £298.9m (H1 2022: £62.0m), and statutory diluted EPS of 17.9p (2022: 2.6p) all significantly higher year-on-year;

·      Higher Free Cash Flow¹: Growth in adjusted operating profit, high cash conversion and strong forward bookings for events and subscriptions delivers Free Cash Flow¹ of £224.6m in H1 2023, +62.8% year-on-year;

·      Disciplined Capital Allocation: Additional long-term growth opportunities captured through acquisitions of Tarsus and Winsight in the first half (combined post-synergy multiple sub-9x EV/EBITDA), further enhanced by today's addition of Canalys within our specialist Tech research business, Omdia, and the announcement of exclusivity to acquire the HIMSS Global Health Exhibition/Conference, a TSNN Top 30 US trade show serving the Healthcare Technology market (combined post-synergy multiple also sub-9x EV/EBITDA);

·      Full Year Results at Top-End of Range¹: Strong H1 trading and forward bookings puts us on track for the top-end of guidance on both Revenue (£2.95bn to £3.05bn) and Adjusted Operating Profit (£750m to £790m), implying 30%+ growth in revenue and 50%+ growth in adjusted operating profit;

¹In this report, we refer to non-statutory measures, as defined in Glossary on page 74. All numbers refer to Continuing Operations unless stated

Continuing Strategic Progress

GAP 2 delivering accelerated revenue growth and digital expansion¹

·      Strong growth at Informa Markets: Strong underlying growth (+63.8%), reflecting full return of Live & On-Demand B2B Event brands in all regions and markets, accelerated expansion through Tahaluf partnership in the Middle East, and enhanced customer value via smart technology and data;

·      Accelerating growth at Informa Connect: Continuing double-digit underlying expansion (+18.5%), reflecting strong demand for content-rich live experiences providing high value networking, specialist content and accredited training. Expected revenue of $600m+ in 2023, with major strength in Finance, Life Sciences and Foodservice, the latter boosted by recently acquired Winsight;

·      Diversified growth at Informa Tech: Leading digital Tech business delivering robust underlying growth (+7.4%) in the face of broader Tech market volatility, reflecting specialist brands, high value Live Events, expansion in Specialist Media/Audience Development and leading position in Specialist Research through Omdia, further strengthened by today's addition of Canalys;

·      B2B data growth through IIRIS: Continuing momentum in first party data, with IIRIS fully consented audience of 20m+, delivering market intelligence, customer knowledge and marketing effectiveness;

·      On-target growth and leadership update at Taylor & Francis: Improving underlying revenues (+3.3%) reflects strong performance in traditional Pay-to-Read products and continuing expansion in Pay-to-Publish services; With its GAP 2 plan on track, CEO of Taylor & Francis, Annie Callanan, to step down after six years in the role, with process to identify next leader underway;

·      Growing use of Artificial Intelligence: AI technology deployed across the Group in areas such as content indexing and classification, video to text transcription and B2B recommendation and matchmaking. Group-wide GAP 2 investment programme to further expand opportunity, including in content validation, marketing segmentation and buyer sentiment analysis.  

Capital Allocation Discipline

Accelerating shareholder returns and accretive capital reinvestment¹

·      Accelerating shareholder returns: Strong earnings growth and cash conversion delivering accelerating returns for shareholders, with £650m+ total cash returns expected in 2023 through a combination of growing ordinary dividends and completion of £1bn share buyback programme;

·      90%+ dividend growth¹: Strong dividend growth (+93.3% to 5.8p in H1), with an ongoing commitment to a 40% minimum payout of adjusted earnings;

·      £1bn Share Buyback Programme: Strong cash flow generation and robust balance sheet supporting an ongoing share buyback programme, with over £800m of £1bn programme completed;

·      Targeted additions delivering further Market Specialisation: Following the divestment of Informa Intelligence for c.£2.5bn (average multiple c.28x EV/EBITDA), we are redeploying capital into accretive acquisitions, further strengthening our positions in specialist markets, including in Foodservice (Winsight), Specialist Tech Research (Canalys) and Packaging/Aviation/Healthcare/Beauty & Aesthetics (Tarsus) and in Healthcare Technology (where we have announced exclusivity to acquire the HIMSS Global Health Exhibition/Conference);

·      Balance sheet strength¹: Year-end leverage currently tracking to c.1.3x, providing continuing flexibility for further organic and inorganic investment, and ongoing shareholder returns;

¹In this report, we refer to non-statutory measures, as defined in the Glossary on page 74. All numbers refer to Continuing Operations unless stated

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

2023 H1 Financial Summary (Continuing Operations)

	H1 2023	H1 2022	Reported	Underlying2
	£m	£m	%	%
Revenue	1,520.5	993.5	53.0	31.9
Statutory operating profit	298.9	62.0
Adjusted operating profit3	413.5	203.8	102.9	56.5
Adjusted operating margin (%)3	27.2	20.5
Statutory profit before tax	314.6	41.5
Adjusted profit before tax3	416.3	174.4
Statutory diluted earnings per share (p)	17.9	2.6
Adjusted diluted earnings per share (p)3	22.5	9.6	134.4
Cash flow from operating activities3	188.6	154.3
Free cash flow3	224.6	138.0	62.8
Net debt/(cash) (incl. Leases)3	1,214.1	(15.3)
Dividend per share (p)	5.8	3.0	93.3
2023 H1 Divisional Highlights (Continuing Operations)
	H1 2023	H1 2022	Reported	Underlying2
	£m	£m	%	%
Informa Markets
Revenue	758.9	421.4	80.1	63.8
Statutory operating profit / (loss)	156.3	(3.0)	n/a
Adjusted operating profit3	241.1	81.6	195.5	139.3
Adjusted operating margin3 (%)	31.8	19.4
Informa Connect
Revenue	250.5	174.5	43.6	18.5
Statutory operating profit / (loss)	20.6	(2.9)	n/a
Adjusted operating profit3	50.2	18.4	172.8	31.9
Adjusted operating margin3 (%)	20.0	10.5
Informa Tech
Revenue	196.8	136.0	44.7	7.4
Statutory operating profit / (loss)	87.0	10.2	752.9
Adjusted operating profit3	27.2	19.3	40.9	(18.4)
Adjusted operating margin3 (%)	13.8	14.2
Tarsus
Revenue	30.9	0.0	n/a	50.0
Statutory operating profit / (loss)	(24.6)	0.0	n/a
Adjusted operating profit3	7.9	0.0	n/a	n/a
Adjusted operating margin3 (%)	25.6	n/a
Taylor & Francis
Revenue	283.4	261.6	8.3	3.3
Statutory operating profit / (loss)	59.6	57.7	(3.3)
Adjusted operating profit3	87.1	84.5	3.1	(5.3)
Adjusted operating margin3 (%)	30.7	32.3

²In 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 disposals from the date of disposal in the comparative period. Statutory figures exclude such adjustments. Alternative performance measures are detailed in the Glossary.

³In 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 5 to the Financial Statements. Operating Cash Flow, Free Cash Flow, Net Debt and other non-statutory measures are detailed in the Financial Review and Glossary. This is consistent with prior periods.

Trading Outlook...Strong momentum and forward visibility

The combination of ongoing geo-political uncertainty, heightened inflation and rising interest rates in many regions of the world, is continuing to create a volatile trading backdrop for all Companies.

As the Leading and Largest Owner/Operator of B2B Events, Specialist Data and Digital Services Internationally, Informa's geographic breadth and depth in specialist markets is serving us well, delivering consistent growth and strong forward momentum, amidst this broader macro uncertainty.

2023 Expectations Confirmed at the Top-End of the Guidance Range

The strength of trading through the first half of 2023, combined with forward visibility, provides confidence we can deliver further underlying and reported revenue growth in the second half of 2023 and into 2024.

Accelerating growth, combined with operating discipline is delivering improved profitability, with the Group adjusted operating margin increasing to 27.2% in the first half. This is ahead of the schedule laid out at the start of the year and whilst our first half margins are traditionally higher, we expect full year margins to remain ahead of previous guidance, c.400 basis points higher year-on-year.

We are targeting a further improvement to c.28% in 2024 and a return to c.30% operating margins as we exit the GAP 2 programme into 2025.

The combination of volume and value growth, operating leverage and strong performances from recent acquisitions should allow us to deliver at the top-end of our 2023 market guidance range for both Reported Group Revenue (£2.95bn to £3.05bn) and Group Adjusted Operating Profit (£750m to £790m, assuming GBP/USD exchange rate of 1.25).

B2B Markets: The Leading and Largest Owner/Operator of B2B Events, Specialist Data and Digital Services

Over the last decade, through Informa Markets, Informa Connect and Informa Tech, we have progressively built and bought a portfolio of 600+ major B2B brands serving 20+ attractive and growing market categories in all major regions of the world. During COVID we protected these brands and nurtured our customer relationships, whilst investing in digital and data to improve the quality of our product and its value to customers. Our investment in first party data is also allowing us to expand into high value adjacent B2B markets, through a growing range of audience-led digital services.

B2B Markets…International Scale, Market Specialisation and Growth at Informa Markets

Within Informa Markets, our commitment and consistent investment in our portfolio of transaction led B2B brands has enabled us to return at pace as markets have reopened around the world, with demand for our brands stronger than ever. So far this year, across our B2B Markets businesses, we have run 150 Tier 1 and Tier 2 major Live Events, attracting 120,000+ exhibitors and 5m+ attendees, and revenues are now tracking ahead of 2019, pre-COVID, on a like-for-like basis.

This strength is evident in all major market categories, with particular strength through the first half in Healthcare (Arab Health, Medlab Middle East), Infrastructure & Real Estate (World of Concrete, TISE), Health & Nutrition (Natural Products Expo West, Vitafoods Europe) and Beauty (China Beauty Expo).

Similarly, we are delivering strong performances in all major regions of the world, including North America, the Middle East, ASEAN, Europe and now China, where we have seen rapid progress since COVID restrictions started to be removed earlier this year. Strong demand to access specialist B2B markets, launch new products and build sales pipelines means we also now expect revenues in China this year to be at similar levels to 2019.

Market Specialistion: Expanded partnership in the Middle East through Tahaluf

The strength of our brands is enabling us to expand events into new regions and launch new brands. A particular focus is the Middle East, where we have built a significant business, from Informa's local headquarters in Dubai, to growing brands and operations in Bahrain, Qatar, Egypt and Türkiye, amongst others.

In Saudi Arabia, we recently established a joint venture with SAFCSP called Tahaluf (meaning 'Alliance' in Arabic), and today we are announcing its expansion through an investment by the Events Investment Fund, who will become a significant shareholder and partner. In addition, Sela has also committed to becoming a partner.

Tahaluf's mission is to expand the MICE (Meetings, Incentives, Conventions, Exhibitions) industry in the region and support the country's Vision 2030 plan, which seeks to diversify and expand the economy and opportunities for its highly educated 30 million population.

Tahaluf's inaugural event, LEAP, was the largest Tech event launch ever, and it has since brought established brands in Cyber Security (Black Hat) and Real Estate & Construction (Cityscape Global in September) to the region, with plans for many more over the next few years, including in specialist markets such as Healthcare & Life Sciences, Food & Hospitality, Aerospace & Aviation, Industrial & Manufacturing and Pharma & Biotech.

Market Specialisation: Further depth in Healthcare Technology

Today we have also announced exclusivity to acquire the HIMSS Global Health Exhibition/Conference, the leading international trade show for Healthcare technology and information management systems.

HIMSS Global Health Exhibition/Conference, a TSNN Top 30 US Trade Show which will next take place in March 2024, attracts 35k+ healthcare professionals from more than 90 countries each year, including physicians, nurses, analysts, government officials, investors and technology partners. It is a major B2B trade show, combining 1200+ exhibitors and more than 200 specialist education sessions to provide specialist market access and rich content and insights into the latest trends and innovations in Healthcare information and technology.

B2B Markets...Content, Community and Commercial Edge at Informa Connect

In Informa Connect, we have built a portfolio of dynamic, content led B2B brands that provide industries and professional communities with specialist knowledge and data, high value networking, and increasingly powerful customer data and analytics.

Our core verticals of Finance (SuperReturn, IM Power), Life Sciences (BioEurope Spring, Biotech Showcase) and Foodservice (National Restaurant Association Show, Catersource) are all performing well, with strong demand for access to our specialist audiences.

In addition, our portfolio of fan-oriented Pop Culture events (MegaCon Orlando, FanExpo) is delivering good growth, with strong talent commitment and forward pacing for the rest of the year.

The addition of Winsight in May significantly expanded our position in the attractive B2B Foodservice market, adding further depth in Live & On-Demand Events (National Restaurant Association Show), Specialist Data & Research (Technomic) and Specialist Media (Restaurant Business). The business has performed strongly since being acquired, including a successful National Restaurant Association Show in May, which, encouragingly, is already almost fully booked for 2024.

Within our Finance business, we are investing in our specialist data and content businesses, IGM (Fixed Income/FX Data & Information) and Zephyr (Wealth Management Data & Reporting), strengthening core technology platforms and expanding our service offer. Both are subscription-based businesses and are trading steadily and with some targeted investment, combined with cross-promotion across our other connected Finance brands, we believe we can accelerate growth and enhance value.

Within these businesses and more broadly across Informa Connect's portfolio, the importance and value of data is increasing. Through our B2B customer data and analytics platform, IIRIS, we are now collecting, managing and enriching our first party data and this is enabling us to better understand our markets and customers, leading to more efficient product development and more effective marketing.

Our focus on data is also allowing us to increase the value we provide customers through new products, including Lead Insights, an end-to-end customer platform for scoring, qualifying and activating leads.

Customers can access event and digital leads in near real-time, rank them on various parameters, segment and enrich them and directly launch and track targeting campaigns. Within Informa Connect, this is significantly increasing the utility and value of our event/online data for sponsors.

Our expanded Finance and Foodservice businesses, combined with strong underlying growth across the broader portfolio, means Informa Connect now has significant scale, with expected revenues across its range of content-led B2B services of more than $600m in 2023.

Tarsus…Combination and Growth

Since the Tarsus acquisition completed in the second quarter (valuation of $940m, sub-9x post-synergy EV/EBITDA multiple), the business has traded strongly, reflecting the strength of its specialist brands and long-term customer relationships.

Through this period, the business delivered underlying revenue growth of 50% and absolute revenues of over £30m, ahead of plan, with particular strength in Healthcare (Health Connect Partners), Anti-Aging & Aesthetics (A4M Spring Congress) and Fashion (Shanghai International Brand Underwear Fair).

The focus for the remainder of 2023 is to maintain this strong trading momentum, minimising disruption and maximising delivery, whilst using the time to combine Tarsus' brands and businesses within Informa Markets and Informa Connect, and enabling us to enter 2024 as one business.

Whilst still early in the Tarsus Combination Programme, the current signs are encouraging, with good underlying performances across its portfolio, strong cultural alignment between teams and clear opportunities identified where we can benefit from each other's market depth and established customer relationships.

B2B Markets…A c.$500m leader in B2B Digital Services in Informa Tech

We continue to see a significant opportunity to create value from our first party data through the development of a range of adjacent, audience-led B2B Digital Services. Our current focus for this investment and expansion is Informa Tech, where the market for data-driven Audience Development and Digital Demand Generation services is already well established.

To meet this demand, over the last four years, we have been building our multi-service B2B offering within Informa Tech, which now incorporates 20+ major B2B Live & On-Demand Event franchises, a leading Specialist Market Research/Data business in Omdia, a portfolio of 40+ Specialist Media brands and a growing capability in specialist Lead Generation services.

Combined with IIRIS' 20m+ first party data records, this is enabling us to offer an increasingly powerful range of audience-led services and we are continuing to invest behind this to build further strength. At Industry Dive, we are expanding our portfolio through new Dive launches, with six so far this year, including Hotel Dive, Fashion Dive and Packaging Dive, and with a further two planned in the second half.

At NetLine, we recently launched a new intent-based lead generation platform, Intentive, which provides real time B2B insights to marketers at both a company and individual buyer-level.

These new products and services are building good market momentum, albeit current tech market volatility has moderated our near-term growth expectations at Informa Tech, with our target for 2023 now at mid to high single digit underlying revenue growth.

Current market uncertainty is, however, creating some attractive opportunities to accelerate the expansion of our service offering and build further scale through targeted acquisitions.

Market Specialistion: Addition of Canalys creates $100m+ leader in Specialist Market Research

This includes Informa Tech's addition today of specialist Tech research business, Canalys, which adds highly regarded research expertise and a loyal, high value subscriber base.

As part of our strategy of Market Specialisation, over the last five years we have been investing in Omdia to build leadership in specialist Tech research, focusing on building strength in key Tech sub-verticals including Artificial Intelligence, Cloud, Cybersecurity, Enterprise IT and Critical Communications. In prior years, this has seen us combine our portfolio with IHS Markit Tech and acquire Tractica.

Canalys will further expand our leadership into Channels (distributors, value added resellers, systems integrators and managed service providers) and Mobility (consumer and business devices), two critical sub-verticals of scale and commercial importance.

Combined, Omdia's revenues will move comfortably over $100m, almost three times where they were when we set about building a position, giving us leadership in Specialist Tech Market Research to complement our leading position in Live & On-Demand Events and growing strength in Audience Development and Digital Demand.

Academic Markets & Knowledge Services...Improving underlying growth

Taylor & Francis continues to perform well, reporting an underlying revenue increase of 3.3% over the first six months of 2023, in line with our GAP 2 target of 3%+ for the year.

With the business performing well and its GAP 2 plan on track, after six years, Annie Callanan is returning to the US and so will step down as CEO, with a process to find the next leader of Taylor & Francis underway.

Stephen A. Carter, Group Chief Executive, Informa PLC, said: "On behalf of Informa, I'd like to thank Annie for her leadership over the last six years, during which time the business has grown in scale and quality."

The steady improvement in growth at Taylor & Francis reflects continuing strength in traditional Pay-to-Read publishing combined with our expanding focus into broader Pay-to-Publish services, increasing our addressable market and putting researchers (i.e. knowledge makers) at the heart of the business.

In Pay-to-Read, demand for our specialist, peer reviewed research remains robust, which is reflected in high subscription renewals and consistent new business, the latter benefiting from recent investment in sales capacity in North America and Asia.

Additionally, our specialist reference business in Advanced Learning continues to perform consistently, supported by an expanded front list of 8,000+ annual new titles and a back list of over 175,000 specialist titles, all available digitally on-demand through a growing range of channels and platforms.

In Open Research, we continue to invest in the depth and range of services we offer to authors and funders, targeting research budgets directly alongside more traditional institutional budgets. This has seen us secure a number of new Read and Publish contracts this year, as well as some major renewals, including our recent three-year agreement with Ohio State University.

In line with our GAP 2 plan, investment in the range, speed and efficiency of our open research service offering is impacting near-term margins but increasing our direct exposure to growth in research volumes and research funding. In H1, margins were also affected by the mix of revenue and the phasing of costs through the period, something we expect to unwind in the second half, leaving full year margins broadly consistent with 2022.

 

            Financial review

Income Statement

The results for the six months to 30 June 2023 ("H1 2023") reflect a strong trading performance in our continuing businesses, comprising our four B2B Markets businesses (Informa Markets, Informa Connect, Informa Tech and Tarsus) and our Academic Markets business, Taylor & Francis. The reported revenues and profits for these businesses in 2023 were significantly higher than 2022, driven by strong underlying revenue growth in all businesses, with particular strength in B2B Markets as our leading portfolio of live and on-demand events continued to return and rebound after the disruption caused by the pandemic.

 

	Adjusted results H1 2023	Adjusting items  H1 2023	Statutory results H1 2023	Adjusted results  H1 20221	Adjusting items  H1 20221	Statutory results H1 20221
	£m	£m	£m	£m	£m	£m
Continuing operations
Revenue	1,520.5	-	1,520.5	993.5	-	993.5
Operating profit/(loss)	413.5	(114.6)	298.9	203.8	(141.8)	62.0
Fair value gain/(loss) on investments	-	9.4	9.4	-	(0.9)	(0.9)
Profit on disposal of subsidiaries and operations	-	4.3	4.3	-	9.8	9.8
Net finance income/(costs)	2.8	(0.8)	2.0	(29.4)	-	(29.4)
Profit/(loss) before tax	416.3	(101.7)	314.6	174.4	(132.9)	41.5
Tax (charge)/credit	(79.1)	34.4	(44.7)	(31.2)	25.7	(5.5)
Profit/(loss) for the year from continuing operations	337.2	(67.3)	269.9	143.2	(107.2)	36.0
Profit for the year from discontinued operations	-	-	-	23.1	1,130.8	1,153.9
Profit/(loss) for the year	337.2	(67.3)	269.9	166.3	1,023.6	1,189.9
Adjusted operating margin from continuing operations	27.2%			20.5%
Adjusted diluted and statutory diluted EPS from continuing operations	22.5		17.9	9.6		2.6

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

 

Financial Results

Our businesses delivered a 53.0% increase in revenue from continuing operations in the first half to £1,520.5m, including a 31.9% increase on an underlying basis. Every Division delivered revenue growth through the period.

The Group reported statutory operating profit from continuing operations of £298.9m, compared with a statutory operating profit of £62.0m for the six months to 30 June 2022. In 2023 we have continued to see strong return in live and on-demand events, including in China, reflecting the strength of our specialist brands in providing access to a range of growing specialist markets. Adjusted operating profit from continuing operations was £413.5m which was 102.9% higher year-on-year on a reported basis.

Statutory net finance income was £2.0m for H1 2023 (H1 2022: net finance cost £29.4m), and adjusted net finance income was £2.8m (H1 2022: net finance cost £29.4m). Lower net finance costs were driven by interest earned on higher cash balances arising from the divestment of our Informa Intelligence portfolio as part of our GAP 2 strategy.

The combination of all these factors led to a statutory profit before tax for continuing operations of £314.6m, compared with £41.5m in the six months ended 30 June 2022. The profit in the period led to a statutory tax charge of £44.7m in H1 2023 compared with a tax charge of £5.5m in the six months ended 30 June 2022.

This profit outcome translated into a statutory diluted earnings per share (EPS) for continuing operations of 17.9p compared with 2.6p for the six months ended 30 June 2022. This improvement reflects stronger trading and the lower number of shares in issue as a result of the share buyback programme. Adjusted diluted EPS from continuing operations more than doubled to 22.5p from 9.6p in the prior six months to 30 June 2022.

Discontinued operations

The results for the six months ended 30 June 2022 have been re-presented to reflect the impact of discontinued operations following the sale of EPFR 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. Following this re-presentation, the results for discontinued operations for the six months ended 30 June 2022 include EPFR, Maritime Intelligence and Pharma Intelligence, which was disposed of on 1 June 2022.

 

Measurement and Adjustments

In addition to statutory results, adjusted results are prepared for the Income Statement. These include adjusted operating profit, adjusted diluted EPS and other underlying measures. A full definition of these metrics can be found in the glossary of terms on page 74. The divisional table on page 11 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	Phasing and other items	Acquisitions and disposals	Currency change	Reported growth
H1 2023 continuing operations
Revenue	31.9%	3.3%	11.5%	6.3%	53.0%
Adjusted operating profit	56.5%	5.9%	24.7%	15.8%	102.9%

 

 

 

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 £114.6m (H1 2022: £141.8m). The most significant item in H1 2023 was intangible asset amortisation of £151.0m.

 

		H1 2023	H1 20221	FY 2022
		£m	£m	£m
Continuing operations
Intangible asset amortisation1		151.0	131.5	275.3
Impairment - acquisition-related and other intangible assets		-	3.9	6.9
(Reversal)/impairment - right of use assets		(0.5)	2.7	(0.1)
Reversal of impairment - property and equipment		-	(1.1)	(0.7)
Acquisition costs		36.5	0.6	11.8
Integration costs		3.1	4.3	10.2
Restructuring and reorganisation costs		0.3	(2.6)	(1.6)
Onerous contracts associated with COVID-19		-	0.7	4.7
	Fair value loss on contingent consideration	3.0	1.8	5.7
	Fair value gain on contingent consideration	(78.8)	-	-
Adjusting items in operating profit from continuing operations		114.6	141.8	312.2
Fair value (gain)/loss on investments		(9.4)	0.9	0.9
	Distributions received from investments	-	-	(20.6)
	Profit on disposal of subsidiaries and operations	(4.3)	(9.8)	(11.6)
Finance costs		0.8	-	1.3
Adjusting items in profit before tax from continuing operations		101.7	132.9	282.2
Tax related to adjusting items		(34.4)	(25.7)	(54.5)
Adjusting items in profit for the period from continuing operations		67.3	107.2	227.7

 

Discontinued operations
Intangible asset amortisation1	-	0.2	0.4
Reversal of impairment - right of use assets	-	(0.3)	(0.5)
Acquisition costs	-	0.6	0.1
Integration costs	-	1.4	1.1
Restructuring and reorganisation costs	-	(0.1)	(0.2)
Adjusting items in operating profit from discontinued operations	-	1.8	0.9
Profit on disposal of subsidiaries and operations	-	(1,366.5)	(1,740.3)
Adjusting items in profit before tax from discontinued operations	-	(1,364.7)	(1,739.4)
Tax related to adjusting items	-	233.9	275.7
Adjusting items in profit for the period from discontinued operations	-	(1,130.8)	(1,463.7)
Adjusting items in profit for the period from continuing and discontinued operations	67.3	(1,023.6)	(1,236.0)

1. Excludes acquired intangible product development and software amortisation.

Adjusting Items (continued)

 

Intangible amortisation of £151.0m 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 of £36.5m principally relate to the acquisitions of Tarsus and Winsight. Fair value gain/(loss) on contingent consideration principally reflects a fair value gain in relation to the Industry Dive contingent consideration.

 

Divisional Performance

The table below shows the H1 2023 results and adjusting items by Division for continuing operations, highlighting the continued strong growth in our B2B Markets Divisions, supported by improving growth at Taylor & Francis.

 

	Informa Markets	Informa Tech	Informa Connect	Taylor & Francis	Tarsus	Group
	£m	£m	£m	£m	£m	£m
Revenue from continuing operations	758.9	196.8	250.5	283.4	30.9	1,520.5
Underlying revenue growth	63.8%	7.4%	18.5%	3.3%	50.0%	31.9%
Statutory operating profit/(loss) from continuing operations	156.3	87.0	20.6	59.6	(24.6)	298.9
Add back:
Intangible asset amortisation1	84.1	18.8	14.6	26.6	6.9	151.0
Reversal of impairment - right of use assets	-	-	(0.5)	-	-	(0.5)
Acquisition costs	0.2	(1.5)	12.8	0.2	24.8	36.5
Integration costs	0.1	0.6	1.6	-	0.8	3.1
Restructuring and reorganisation costs	(0.7)	0.3	0.7	-	-	0.3
Fair value gain/(loss) on contingent consideration	1.1	(78.0)	0.4	0.7	-	(75.8)
Adjusted operating profit from continuing operations	241.1	27.2	50.2	87.1	7.9	413.5
Underlying adjusted operating profit growth/(decline)	139.3%	(18.4%)	31.9%	(5.3%)	N/A	56.5%

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

 

Adjusted Net Finance Income

Adjusted net finance income for the period was £2.8m compared to the net finance cost of £29.4m in H1 2022. Net statutory finance income from continuing operations was £2.0m compared to a net finance cost of £29.4m in H1 2022. The movement in net finance income primarily relates to higher interest income on the increased cash balance due to cash proceeds of £2.1bn from the divestment of the Intelligence portfolio and improved Free Cash Flow.

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

        

	H1 2023	H1 2022	FY 2022
	£m	£m	£m
Finance income	(37.9)	(5.6)	(27.5)
Finance costs	35.9	35.0	74.1
Statutory net finance (income)/costs	(2.0)	29.4	46.6
Add back: adjusting items relating to finance costs	(0.8)	-	(1.3)
Adjusted net finance (income)/costs	(2.8)	29.4	45.3

 

Taxation

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 taxpayers 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 H1 2023, the effective tax rate on adjusted profits for continuing operations was 19.0% (H1 2022: 17.9%).

 

Earnings Per Share

Adjusted diluted EPS from continuing operations was 134.4% higher at 22.5p (H1 2022: 9.6p), largely reflecting higher adjusted earnings of £318.7m (H1 2022: £142.0m) together with a 5.0% 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:

	H1 2023	H1 20221	FY 2022
	£m	£m	£m
Statutory profit for the year from continuing operations	253.5	39.1	138.3
Add back: Adjusting items in profit/loss for the year	67.3	107.2	227.7
Adjusted profit for the year	320.8	146.3	366.0
Non-controlling interests relating to adjusted profit	(2.1)	(4.3)	(9.5)
Adjusted earnings from continuing operations	318.7	142.0	356.5
Weighted average number of shares used in adjusted diluted EPS (m)	1,414.3	1,488.4	1,464.3
Adjusted diluted EPS (p) from continuing operations	22.5	9.6	24.4

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

 

Earnings Per Share (continued)

 

	H1 2023	H1 20221	FY 2022
	£m	£m	£m
Statutory profit for the year from continuing operations	269.9	36.0	142.1
Non-controlling interests	(16.4)	3.1	(3.8)
Statutory earnings from continuing operations	253.5	39.1	138.3
Weighted average number of shares used in diluted EPS (m)	1,414.3	1,488.4	1,464.3
Statutory diluted EPS (p) from continuing operations	17.9	2.6	9.4

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

 

Dividends

The Group resumed dividend payments in 2022 based on a payout ratio of a minimum of 40% of full year adjusted earnings from continuing operations. The Group will look to continue to grow dividends in line with this approach, striking a balance between rewarding shareholders and retaining the financial strength and flexibility to reinvest in the business and pursue growth opportunities.

For H1 2023, the Board has recommended an interim dividend of 5.8p per share (H1 2022: 3.0p per share). The interim dividend will be paid on 15 September 2023 to ordinary shareholders registered as at the close of business on 11 August 2023.  The Dividend Reinvestment Plan (DRIP) will be available for the interim dividend and the last date for receipt of elections for the DRIP will be 29 August 2023.

 

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 expenses 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 H1 2023 across our continuing operations (H1 2022: continuing and discontinued operations), approximately 65% (H1 2022: 69%) of Group revenue was received in USD or currencies pegged to USD, with 6% (H1 2022: 5%) received in Euro and 11% (H1 2022: 1%) in Chinese renminbi.

Similarly, on continuing operations in H1 2023 (H1 2022: continuing and discontinued operations) we incurred approximately 55% (H1 2022: 69%) of our costs in USD or currencies pegged to USD, with 8% (H1 2022: 3%) in Chinese renminbi and 3% (H1 2022: 5%) in Euro.

For continuing operations in H1 2023 (H1 2022: continuing and discontinued operations) each one cent ($0.01) movement in the USD to GBP exchange rate has a circa £16m (H1 2022: circa £12m) impact on annual revenue, and a circa £6m (H1 2022: circa £4m) impact on annual adjusted operating profit.

The following rates versus GBP were applied during the period:

 

	H1 2023			H1 2022		FY 2022
	Closing rate	Average rate	Closing rate		Average rate	Closing rate	Average rate
US dollar	1.26	1.23	1.21		1.30	1.21	1.24
Chinese renminbi	9.18	8.57	8.12		8.38	8.34	8.30
Euro	1.17	1.14	1.16		1.19	1.13	1.17

 

        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 2023, absolute levels of free cash flow continued to grow year-on-year despite cash being held at 31 December 2022 against 2023 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.

 

	H1 2023	H1 20223	FY 2022
	£m	£m	£m
Statutory operating profit	298.9	62.0	184.1
Add back: Adjusting items	114.6	141.8	312.2
Adjusted operating profit	413.5	203.8	496.3
Depreciation of property and equipment	6.4	5.6	11.7
Depreciation of right of use assets	12.6	12.0	24.8
Software and product development amortisation	18.8	18.1	35.2
Share-based payments	11.5	8.4	17.5
(Profit)/loss on disposal of other assets	(0.1)	0.1	0.3
Adjusted share of joint venture and associate results	(1.1)	(0.9)	(2.1)
Adjusted EBITDA1	461.6	247.1	583.7
Capital expenditure	(41.5)	(27.1)	(67.5)
Working capital movement2	(149.3)	(3.4)	65.3
Pension deficit contributions	(1.2)	(2.9)	(6.9)
Operating Cash Flow	269.6	213.7	574.6
Restructuring and reorganisation	(5.5)	(5.9)	(14.1)
Onerous contracts and one-off costs paid associated with COVID-19	(0.9)	(1.1)	(5.5)
Net interest receipts/(payments)	2.6	(28.3)	(65.4)
Taxation	(41.2)	(40.4)	(71.7)
Free Cash Flow from continuing operations	224.6	138.0	417.9
Free Cash Flow from discontinued operations	-	40.4	48.5
Free Cash Flow	224.6	178.4	466.4

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 (continued)

 

Free cash flow from continuing operations was £86.6m higher than H1 2022 principally due to the £209.7m higher adjusted operating profit, partially offset by higher capex investment of £14.4m and an increase of £145.9m in working capital outflow which largely relates to events run in the period for which the Group had already received cash in advance, principally in China. The calculation of operating cash flow conversion and free cash flow conversion is as follows:

	H1 2023 Continuing	H1 20221 Continuing	FY 2022 Continuing
	£m	£m	£m
Operating Cash Flow from continuing operations	269.6	213.7	574.6
Adjusted operating profit from continuing operations	413.5	203.8	496.3
Operating Cash Flow conversion from continuing operations	65.2%	104.9%	115.8%
	H1 2023	H1 20221	FY 2022
	£m	£m	£m
Free Cash Flow from continuing operations	224.6	138.0	417.9
Adjusted operating profit from continuing operations	413.5	203.8	496.3
Free Cash Flow conversion from continuing operations	54.3%	67.7%	84.2%

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

Net capital expenditure from continuing operations increased to £41.5m (H1 2022: £27.1m) reflecting ongoing investments as part of our GAP 2 strategy. We expect full-year 2023 capital expenditure to be c.4% relative to revenue as further GAP 2 investments are made.

 

Net cash interest receipts of £2.6m were £30.9m higher than the prior year, largely reflecting interest income on the Group's increased cash balances generated by the divestment of the Intelligence portfolio.

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:

 

	H1 2023 Continuing	H1 20221 Continuing	FY 2022 Continuing
	£m	£m	£m
Net cash inflow/(outflow) from operating activities for continuing operations per statutory cash flow	188.6	154.3	397.2
Interest received	38.4	4.7	25.7
Purchase of property and equipment	(9.1)	(6.7)	(14.5)
Purchase of intangible software assets	(22.3)	(13.8)	(37.9)
Product development costs	(10.1)	(6.6)	(15.1)
Add back: Acquisition and integration costs paid	39.1	6.1	18.2
Add back: Pension payment into escrow	-	-	28.2
Add back: Additional pension payments	-	-	16.1
Free Cash Flow from continuing operations	224.6	138.0	417.9

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

Net cash from operating activities from continuing operations increased by £34.3m to record an inflow of £188.6m, principally driven by the increased adjusted profit in the year, offset by the working capital outflow as outlined above.

 

        Free Cash Flow (continued)

 

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:

 

	H1 2023 Continuing	H1 20221 Continuing	FY 2022 Continuing
	£m	£m	£m
Cash generated by operations for continuing operations per statutory cash flow	265.6	227.7	560.0
Capital expenditure paid	(41.5)	(27.1)	(67.5)
Add back: Acquisition and integration costs paid	39.1	6.1	18.2
Add back: Restructuring and reorganisation costs paid	5.5	5.9	14.1
Add back: Pension payment into escrow	-	-	28.2
Add back: Additional pension payments	-	-	16.1
Onerous contracts associated with COVID-19	0.9	1.1	5.5
Operating Cash Flow from continuing operations	269.6	213.7	574.6

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 increasing by £969.5m to £1,214.1m during the year. This increase in net debt is primarily due to the acquisitions of Tarsus and Winsight and the ongoing share buyback programme.

 

	H1 2023	H1 2022	FY 2022
	£m	£m	£m
Free Cash Flow from continuing and discontinued operations	224.6	178.4	466.4
Acquisitions	(924.9)	(16.8)	(405.3)
Disposals	(8.5)	1,683.5	1,896.8
Additional pension payments	-	-	(16.1)
Pension payment into escrow	-	-	(28.2)
Add back: repayment of acquired debt	443.9	-	36.6
Dividends paid to shareholders	-	-	(43.3)
Dividends paid to non-controlling interests	(1.1)	(1.5)	(9.5)
Dividends received from investments	0.5	-	1.8
Distributions received from investments	-	-	20.6
Purchase of own shares through share buyback	(289.9)	(291.6)	(513.3)
Purchase of shares for Trust	(3.0)	(2.2)	(3.3)
Net funds flow	(558.4)	1,549.8	1,403.2
Non-cash movements	40.3	(122.3)	(133.0)
Foreign exchange	4.8	23.1	(31.8)
Net lease additions in the year	(12.3)	(0.7)	(11.8)
Net debt as at 1 January	(244.6)	(1,434.6)	(1,434.6)
Acquired debt	(443.9)	-	(36.6)
Net (debt)/cash	(1,214.1)	15.3	(244.6)

 

Financing and Leverage

Net debt increased by £969.5m in the period to £1,214.1m at 30 June 2023 (30 June 2022: net cash £15.3m; 31 December 2022: net debt £244.6m). This was largely due to the acquisitions of Tarsus and Winsight and the ongoing share buyback programme, which were partly offset by a strong free cash flow performance in the period.

The Group retains significant available liquidity, with unutilised committed financing facilities available to the Group of £1,098.3m (30 June 2022: £1,099.4m; 31 December 2022: £1,099.9m). Combined with £1,057.5m of cash (H1 2022: £2,509.3m), this resulted in available Group-level liquidity at 30 June 2023 of £2,155.8m.

The average debt maturity on our drawn borrowings is 2.6 years at 30 June 2023 (30 June 2022: 3.4 years; 31 December 2022: 3.1 years). Besides the EUR EMTN of GBP equivalent €450.0m (£386.2m) maturing in July 2023, there are no significant maturities until October 2025.

 

	30 June 2023	30 June 2022	31 December 2022
Net debt and committed facilities	£m	£m	£m
Cash and cash equivalents	(1,057.5)	(2,509.3)	(2,125.8)
Bond borrowings	1,865.9	2,039.4	1,910.7
Bond borrowing fees	(7.3)	(10.5)	(8.8)
Bank borrowings	38.8	40.8	41.3
Bank borrowing fees	(3.0)	(2.9)	(2.4)
Derivative assets associated with borrowings	-	-	(2.2)
Derivative liabilities associated with borrowings	123.9	157.3	168.1
Net debt/(cash) before leases	960.8	(285.2)	(19.1)
Lease liabilities	264.7	277.6	270.4
Finance lease receivables	(11.4)	(7.7)	(6.7)
Net debt/(cash)	1,214.1	(15.3)	244.6
Borrowings (excluding derivatives, leases, fees & overdrafts)	1,904.7	2,080.2	1,952.0
Unutilised committed facilities (undrawn RCF)	1,050.0	1,050.0	1,050.0
Unutilised committed facilities (undrawn Curinos facilities)	48.3	49.4	49.9
Total committed facilities	3,003.0	3,179.6	3,051.9

 

The Informa leverage ratio at 30 June 2023 is 1.2 times (30 June 2022: (0.9) times; 31 December 2022: (0.2) times), and the Informa interest cover ratio is 179.3 times (30 June 2022: 11.0 times; 31 December 2022: 16.6 times). Both are calculated consistently with our historical basis of reporting of financial covenants which no longer apply at 30 June 2023. 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:

	30 June 2023	30 June 2022	31 December 2022
	£m	£m	£m
Net debt/(cash)	1,214.1	(15.3)	244.6
Adjusted EBITDA (12 months)	807.0	641.8	625.5
Adjusted leverage	1.5x	0.0x	0.4x
Adjustment to EBITDA1	-	(0.1)x	-
Adjustment to net cash/debt1	(0.3)x	(0.8)x	(0.6)x
Informa leverage ratio	1.2x	(0.9)x	(0.2)x

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

 

 

Financing and Leverage (continued)

 

The calculation of Informa interest cover is as follows:

	30 June 2023	30 June 2022	31 December 2022
	£m	£m	£m
Adjusted EBITDA (12 months)	807.0	641.8	625.5
Adjusted net finance costs (12 months)	13.1	53.2	45.3
Adjusted interest cover	61.6x	12.1x	13.8x
Adjustment to EBITDA1	117.7x	(1.1)x	2.8x
Informa Interest cover	179.3x	11.0x	16.6x

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

There are no financial covenants on any Group level borrowings. There are covenants on £38.8m (30 June 2022: £40.8m; 31 December 2022: £41.3m) of drawn borrowings in the Curinos business. These relate to borrowings of the Curinos business only.

Corporate Development

Informa has a proven track record in creating value through identifying, executing and integrating complementary businesses effectively into the Group. In H1 2023, cash invested in acquisitions was £924.9m (H1 2022: £16.8m); with £434.9m, net of cash acquired, relating to acquisitions (H1 2022: £6.4m), £7.0m (H1 2022: £0.4m) to cash paid for business assets, £443.9m to the settlement of acquired debt (H1 2022: £nil), £39.1m (H1 2022: £8.5m) for acquisition and integration spend and £nil (H1 2022: £1.5m) for the acquisition of non-controlling interests.

Net spend from disposals amounted to £8.5m (H1 2022: £1,683.5m net proceeds).

Acquisitions

Informa completed the share acquisition of both the Tarsus Group and Winsight, LLC in the period to 30 June 2023.

On 17 April 2023, Informa acquired 100% of the shares in Tiger Acquisitions (Jersey) Limited, which ultimately owns the Tarsus Group. Tarsus owns and operates a portfolio of over 160 Live and On-Demand B2B Event brands across a number of markets. Total consideration for Tarsus was £359.4m, of which £168.1m was paid in cash, £169.8m was settled by the issue of 26.0m shares in Informa Plc at a price of £6.56 per share, and the remainder represented by deferred Informa equity, determined to have a fair value of £21.5m at acquisition date, which is contingent upon the Informa Plc share price reaching £8.50 by 1 June 2025. Immediately upon completion, Informa repaid £443.9m of Tarsus's external debt, resulting in an overall cost, excluding fees and the deferred Informa equity, of £781.8m.

On 16 May 2023, Informa completed the share purchase of Winsight which will be reported within the Informa Connect Division. Winsight provides a range of specialist B2B Services to the food services industry, including events, data and research and media. Total consideration was £324.0m, of which £314.3m was paid in cash and £9.7m was contingent cash consideration, to be paid depending upon 2023 revenue and EBITDA performance.

See note 16 to the Consolidated Financial Statements for further details.

Share Buyback

As part of the GAP 2 strategy, the Group has committed to return value to shareholders through a share buyback programme of £1bn and, during the six months to 30 June 2023, £290.3m of shares had been repurchased with 41.5m shares cancelled. Cumulatively by 30 June 2023, £808.0m of shares had been repurchased with 131.1m shares cancelled. The shares acquired during the six months to 30 June 2023 were at an average price of 690.3p per share, with prices ranging from 627p to 737p.

 

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 30 June 2023, the Group had a net pension surplus of £49.0m (31 December 2022: £49.1m, 30 June 2022: £46.9m), comprising pension surplus of £55.8m (31 December 2022: £55.8m, 30 June 2022: £58.4m) and pension deficits of £6.8m (31 December 2022: £6.7m, 30 June 2022: £11.5m). Gross liabilities were £448.1m at 30 June 2023 (31 December 2022: £477.3m, 30 June 2022: £561.8m). 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 45 basis points from 4.95% at 31 December 2022 and 165 basis points from 3.75% at 30 June 2022 to 5.40% at 30 June 2023, in line with increased yields on benchmark high-quality corporate bonds.

 

 

 

Principal Risks and Uncertainties

Risks arise as a natural consequence of doing business. At Informa we take a balanced and considered approach to risk. We consciously identify, understand and take risk only where it is consistent with the Company's strategy, aligns with our overall risk appetite and tolerance, and represents an opportunity to deliver benefits for the Group and its stakeholders.

The assessment, management and oversight of risk is an ongoing activity. We continue to innovate and enhance our risk management approach year-on-year as well as to adapt to changes in the broader market and economy, to updates in business strategy and to regulatory developments. Informa's approach to risk management is focused:

·      To identify and understand business strategic, commercial, and operating environment risks, to ensure we are being curious, conscious, and open about the risks we choose to take according to our risk appetite and risk management philosophy.

·      To develop and deploy appropriate and effective risk strategies to address these risks and take advantage of opportunities.

·      To clearly monitor and report on risk through the Company's governance and management channels and bodies.

Informa has an established risk management framework that is designed to provide the Board, Audit Committee and executive management with oversight of the most significant risks faced by the Group. Through the Company's risk management framework, risks are identified, assessed, mitigated, and monitored in an effective and consistent way, from wherever in the Group's operations they arise. Regular analysis and scanning for emerging risks are embedded in our risk management process and overseen by the Risk Committee. The Risk Committee reports through the Audit Committee which in turn reports through to the Board. The purpose of the framework is to minimise the impact of risks and uncertainties on delivering our strategy and to ensure the Company can respond in an agile way where the nature of a risk means it cannot be fully managed in advance. We continue to believe this framework is robust and works well for Informa, and we report publicly on risk twice a year.

The framework comprises:

·      Risk methodology: The approach to identify, assess, respond, manage, monitor, and report on risks, threats, and opportunities within the operating environment. 

·      Risk profile and appetite: The nature of the risks Informa is exposed to and a consistent articulation of our appetite to take and manage risk where it creates business opportunity.

·      Governance: The structures, expertise and accountabilities that govern the management of risk and ensure opportunities and risks align with strategy.

·      Policies, processes, and controls: Consistent and rigorous identification, assessment, management, monitoring and reporting activities.

·      Culture: The wider business culture that supports the right behaviours.

·      Tools and infrastructure: Capabilities and systems that enable effective risk management.

 

In the first half of 2023, Informa has been managing risks associated with the uncertain macro environment, although we have delivered a strong trading performance in 2023 to date. In addition, we have been managing the risk associated with the transformation and change activity connected with the deliver of GAP 2, which has and continues to be the subject of proactive mitigation activity. Furthermore, Informa continues to pursue a growth strategy that includes entering new markets through organic investment in product development, and inorganic investment in targeted acquisitions. These naturally come with some associated risk and, as part of our risk appetite and risk philosophy we continue to mitigate and manage risks from these activities as they arise. Lastly, the continually evolving risks of cyber security and economic instability were areas of ongoing focus.

The business has worked to mitigate these risks, and others, through response plans managed and delivered across our 12 Group Principal Risks. These responses plans and the tracking of delivering the risk mitigations have been regularly reported by the Group's Risk Committee, to both the Board and Audit Committee.

Risk Profile at Half Year 2023

COVID-19 is increasingly seen as a virus that we must live alongside, and our exposure has significantly decreased with the re-opening of all our Live and On-demand Events markets around the globe. As a result, we will no longer consider Pandemic as a stand-alone principal risk from Half Year 2023 and, instead, manage it as part of the risk of an inadequate response to a major incident, as it was before 2020.

The risk of Economic Instability continues to be assessed as high due to the potential for impacts to businesses and consumers from a variety of dynamics, including persistent inflationary pressures and the heightened potential for an economic downturn. Looking beyond the macroeconomic factors, there are several dynamics that could influence the 2023 financial year.  For example, it is uncertain whether the continued impacts from localized fiscal policies are driving different behaviours in different markets, which could impact customers' willingness to acquire our products and services.

In response, the Group is continuing to pursue its investment and delivery of the GAP 2 Strategy to broaden the portfolio of products and services we offer, for example, investing in digital and data products and services with a focus on further expanding in open research, smart events and audience development and building a position in audience development and digital demand generation. For Informa, digital services comprise a range of products and services that help businesses connect with customers, marketers reach target audiences and professionals find the knowledge they need via digital platforms, digital content and data-driven services.

The risks of Economic Instability, and Market Risk are further mitigated through the breadth and diversity of our portfolio of businesses. In addition, we continue to grow our B2B Digital Services through GAP 2, including Specialist Content, Media, and Specialist Marketing Services activities.

The strength of the Group's brands and customer relationships has also enabled us to continue to build and strengthen our portfolio of digital and smart events. This increased focus on Digital Services has the potential to expand our addressable markets, although we recognize that it carries a degree of execution risk. The Company has, therefore, maintained the Market Risk assessment as high.

Through the continued delivery of the GAP 2 programme, and our capital allocation decisions following the divestment of Informa Intelligence, acquisition and integration activity increased in H1 2023.  Consequently, the risks associated with acquisition activity, such as those relating to integration, pricing, and performance, have naturally increased. The Acquisition and Integration Risk assessment has, therefore, maintained a heightened management focus. Whilst it is recognized that this risk is material to the Group, it is deemed to be manageable given the enhancement to our change management frameworks, coupled with strong procedures supplementing our track record of successful delivery of M&A activity.

 

As our business continues to grow, significant levels of change and transformation are occurring in the business, whether this is around our technology, operating model enhancements, delivery of products, or expansion into new adjacent markets. It is recognised that ineffective change management practices could lead to detrimental effects on the business and its customers. We continue to enhance our change management capabilities by developing our colleagues' capabilities and introducing new skills as well as improving our change delivery frameworks, tools, reporting, and governance. This has led to improvement on our risk profile across our change management activities.

The Company places reliance on Key Counterparties in certain activities and areas of business operations. Global economic uncertainty, and reduced revenue and capacity constraints may lead to individual Key Counterparties becoming less reliable and, consequently, this risk continues to be monitored closely, together with continued enhancements being made to our key counterparty risk management frameworks.

Data Privacy related risks remain relevant for Informa with recognition that the risk is increasing as delivery of GAP 2 accelerates, and our Digital Services offering expands and increasingly becomes part of our BAU environment. The Company maintains compliance with the relevant data privacy requirements, with ongoing review and focus on the evolving privacy regulations in the countries in which we operate.

Over the first half of 2023, we have further developed our data and privacy management practices through enhancement of our risk management capabilities and approach around our data governance journey. A significant part of our GAP 2 investment is going into IIRIS, Informa's customer data engine, to build more sophisticated products and services in the B2B data market. We are also looking at data governance within IIRIS and Informa more broadly as we incorporate machine learning into new products and services. Data and AI governance is an ongoing journey and one that will be a big focus for us in the remainder of 2023 and beyond. We additionally, recognize as we expand our digital services offering, and use of data, that cyber risk may increase and, as a result, we continue to invest more into our cyber and technology capabilities and enhance our controls, frameworks, and practices. We will continue to invest in this over the remainder of 2023.

For the Half Year 2023 Report, the Group recognises 12 Principal Risks which have the potential to cause the most significant impact to the delivery of its strategic objectives, performance, future prospects and reputation. These risks are summarised below (not in order of magnitude):

·      Economic instability

·      Market risk

·      Acquisition and integration risk

·      Ineffective change management

·      Reliance on key counterparties

·      Technology failure

·      Data loss and cyber breach

·      Privacy regulation risk

·      Inability to attract and retain key talent

·      Health and safety incident

·      Inadequate response to major incidents

·      Inadequate regulatory compliance