Informa PLC 2023 Full-Year Results Replacement

8 March 2024

Informa (LSE: INF.L), the international B2B Events, B2B Digital Services and Academic Markets Group today published full year results for 2023, confirming 30%+ revenue growth and £700m+ of shareholder returns, as well an update to 2024 guidance following a strong start to the year.

Strong Outperformance in 2023

·      2023 Outperformance^1,2: Revenue £3,189.6m (2022: £2,262.4m), Adjusted Operating Profit¹ £853.8m (2022: £496.3m) and Free Cash Flow¹ £631.7m (2022: £417.9m), significantly ahead of market guidance set at the start of the year;

·      Strong Underlying Growth^1,2: Underlying revenue growth of 30.4% and underlying adjusted operating profit growth of 59.1% in 2023, including strong growth in B2B Markets and continuing growth in Academic Markets;

·      Increasing Operating Margin^1,2: Significant increase in adjusted operating margin to 26.8% (2022: 21.9%), driven by strong underlying revenue growth, operating leverage and efficient cost management; Further margin increase targeted in 2024;

·      Growing Earnings per Share^1,2: Adjusted diluted earnings per share +86% to 45.3p (2022: 24.4p), reflecting strong growth in adjusted earnings and the benefit of our share buyback programme;

·      Improving Statutory Performance²: 2023 statutory revenue +41% to £3,189.6m (2022: £2,262.4m), statutory operating profit +176% to £507.8m (2022: £184.1m), and statutory diluted EPS +218% to 29.9p (2022: 9.4p), reflecting the strong growth in reported revenues and profits;

·      Balance Sheet Strength: Strong free cash flow growth and disciplined capital allocation delivers year-end leverage of 1.4x Net Debt/EBITDA, including more than £90m of capital expenditure and c.£550m of share buybacks.

Momentum and Growth in 2024

·      Strong Q1 Trading and Forward Visibility: More than £500m revenue already delivered in 2024, with all businesses on track for full year expectations, and with a further £1bn+ in subscriptions and other forward booked revenues committed or visible;

·      IMEA Growth Engine: Expansion of our brand portfolios in the UAE, Kingdom of Saudi Arabia, Kingdom of Bahrain, India, Egypt and Turkey is driving strong regional growth, where there is growing demand for B2B market access, live experiences and specialist knowledge;

·      Updated 2024 Market Guidance: The combination of all the above drives an increase in guidance to Reported Revenue of £3,450m-£3,500m, Adjusted Operating Profit of £950m-£970m and Free Cash Flow of £720m+ (excluding the proposed combination with TechTarget; GBP/USD 1.25);

¹In this report, we refer to non-statutory measures, as defined in the Financial Review on page 9 and Glossary on page 45. / ²Continuing businesses

Momentum and Growth in Growth Acceleration Plan 2 ("GAP2")

·   Live B2B Events: Strong underlying growth in Live & On-Demand Events, including in Pharma, Healthcare, Technology, Aviation, Food and Beauty; Combined with targeted inorganic expansion in 2023 and the prospective combination with TechTarget, total B2B revenues increase to c.£3bn;

·      International expansion: Continuing organic expansion in fast growth economies, including multiple new event launches across IMEA, China and ASEAN in 2024;

·     New TechTarget: Continuing progress on prospective combination of Informa Tech's digital businesses and US-listed TechTarget to create a leading platform in B2B Digital Services; Initial regulatory filings completed, alongside preparation of the Proxy Statement and the operating model for New TechTarget, keeping us on track for completion in second half of the year;

·    Informa Connect: Strong organic growth, combined with portfolio additions from Tarsus, Winsight and Informa Tech Events will increase Informa Connect's annual revenues to $1bn+, delivering high value, content-led events and subscription data to six growth markets (Biotech & Life Sciences, Finance, Foodservice, Anti-Aging & Aesthetics, Lifestyle and Technology);

·     First Party Data: Further momentum in B2B first party data, with IIRIS consented audience over 20m, underpinning initiatives to enhance B2B customer experience and improve marketing effectiveness, as well as the proposed TechTarget combination;

·     Academic Markets: Growing Open Research volumes and Pay-to-Publish services at Taylor & Francis are complementing our underlying strength in traditional Pay-to-Read publishing, driving improving underlying revenue growth, with a step up to 4% targeted in 2024;

Momentum and Growth in Shareholder Returns

·    Increasing shareholder returns in 2023: More than £700m returned through dividends and buybacks in 2023 (2022: £550m);

·     Strong dividend growth¹: Total ordinary dividends of 18.0p per share in 2023, +84% year-on-year;

·    Expanded share buyback programme: c.£550m of share buybacks in 2023, taking total returns since divestment of Intelligence portfolio to £1.15bn, with c.180m shares cancelled;

·    Capital allocation framework: Consistent organic investment and strong shareholder returns combined with focused inorganic investment, with target leverage of 1.5x to 2.5x Net Debt/EBITDA;

·     Strong shareholder returns in 2024: A progressive dividend and £340m+ of in-year share buybacks (£90m year-to-date, £250m further commitment), with the potential to increase buybacks if attractive inorganic investment opportunities do not materialise.

Momentum and Growth in ESG

·      FasterForward on sustainability: Continuing progress on FasterForward ESG strategy, including the Sustainable Events Fundamentals Programme, recognised through inclusion in Dow Jones Sustainability Index for sixth consecutive year and AAA ESG Rating from MSCI for the first time.

¹In this report, we refer to non-statutory measures, as defined in the Financial Review on page 9 and Glossary on page 45.

2023 Financial Summary - Continuing Operations

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 7 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 Aesthetic Medicine business from Informa Markets to Informa Connect, and for a change in central cost allocation methodology between business segments which was revised in 2023.

Trading Outlook...Momentum and Growth

The macro-economic environment remains varied across the world. Ongoing conflict and geopolitical uncertainty, combined with heightened inflation and higher interest rates, are impacting confidence and demand in some developed markets. This is balanced by continuing growth in other regions, where investment in innovation and economic diversification is driving expansion and commercial opportunities.

Informa's focus on major specialist brands, combined with our continuing expansion in rapidly growing geographies and structurally growing customer markets, is enabling the Group to deliver consistently strong performances, with good forward momentum and growth.

2024 Market Guidance: Further strong growth in Revenues and Adjusted Operating Profit

In 2024, we are targeting high single digit revenue growth, double-digit growth in adjusted operating profit and a further increase in operating margin. This reflects strong underlying growth in B2B Markets (Informa Markets, Informa Connect and Informa Tech), and improving underlying growth in Academic Markets. We will also benefit from a full year contribution from acquisitions made in 2023, partially offset by lower biennial revenues, reflecting the smaller portfolio of biennial events that traditionally run in even years.

2024 has started strongly, with £500m+ of Group revenues delivered and a further £1bn+ booked, committed or visible. All businesses are on track for full year expectations, with particular strength in IMEA, as we continue to expand our brand portfolios in the region on the back of strong demand for our specialist products and services.

Final outperformance in 2023 and the strong start to 2024 leads us to update market guidance, with an increase in Revenue, Adjusted Operating Profit and Free Cash Flow.

Updated 2024 guidance is Group Revenue of £3,450m to £3,500m, Group Adjusted Operating Profit £950m to £970m and Free Cash Flow of £720m+ (excluding any effect of the proposed combination with TechTarget; GBP/USD 1.25).

Informa Markets…Transaction-led Live & On-Demand B2B Events

In an increasingly digital world, underlying demand for high quality live experiences continues to grow. This was evident in the pace and rate of return of our transaction-led live event brands in 2022 and 2023 and it is reflected in strong forward bookings and customer commitments in 2024.

We have built a portfolio of world class specialist brands to meet this growing demand, providing unique access to 20+ specialist markets and powerful platforms for buyers and sellers to trade. This makes them must-attend events for customers and key drivers of innovation and growth in those markets.

The strength of this portfolio is delivering further strong growth in 2024, with first quarter trading giving us confidence in our full year target for high single digit underlying growth and further improvement in adjusted operating margins.

In recent years we have invested significantly in technology and data to enhance our products and the value they create for exhibitors and attendees, including through customer experience, targeted matchmaking and lead qualification. This is enabling us to improve average yields and drive value growth across the portfolio, with a strong pipeline of further enhancements over the next few years.  

At the same time, we are delivering volume growth, both from established brands, as more companies seek access to markets and deeper B2B relationships, and through the launch of new brands.

In 2024, across the five regions where we have built international platforms (IMEA, ASEAN, China, Americas and Europe), we are planning to launch around 20 new or geo-adapted events. The majority are in the rapidly growing economies of China, the United Arab Emirates, the Kingdom of Saudi Arabia and Indonesia, where there is strong demand for specialist knowledge, B2B connections and live experiences.

Informa Connect…Content-led Live & On-Demand B2B Events

Informa Connect is a market leader in content-led live and on-demand experiences, specialist content and accredited training. Across six growth markets (Biotech & Life Sciences, Finance, Foodservice, Anti-Aging & Aesthetics, Lifestyle and Technology), we operate more than 400 specialist live and on-demand brands, as well as three growing subscription data businesses in Finance (Curinos, IGM, Zephyr).

The strength of these brands and market positions is delivering further momentum and growth in 2024, with first quarter trading underpinning our full year target for high single digit underlying revenue growth and further improvement in adjusted operating margin.

The rich content and depth of connectivity that characterises Informa Connects' events is providing valuable insights into customer preferences. Through the IIRIS analytics platform, we are collecting detailed firmographic and behavioural data which is increasingly being used to deliver value-added products eg Lead Insights, an end-to-end lead generation platform. This platform provides event sponsors and exhibitors with near real-time access to leads that can be scored, ranked, segmented, enriched and then used in targeting campaigns launched and tracked directly from the platform. It significantly enhances the value customers can derive from our events.

The scale and reach of Informa Connect has increased significantly in recent years. Strong underlying growth, combined with the addition of brands from Tarsus, Winsight, Informa Markets (the Anti-Aging and Aesthetics portfolio) and, post the proposed TechTarget combination⁶, the Informa Tech events portfolio, will take Informa Connect's annual revenues to over $1bn, with more than 70% delivered in the US.

This expanded portfolio includes a range of marquee brands, which are the annual convening place for their industry, providing unique access to high value networking, cutting edge content and live experiences. These are major growth engines deeply embedded within their markets, with the expanded Informa Connect's Top 50 brands delivering c.60% of event revenue.

Informa Tech…B2B Digital Services

Informa Tech is performing to plan in 2024, with first quarter trading delivering strong subscription renewals in Specialist Research (Omdia, Canalys), further stabilisation in Media & Demand Generation and continuing momentum in Live Events, with the following major live brands running in March (LEAP, Enterprise Connect, GDC).

In January, we announced the proposed combination of Informa Tech's digital businesses (Industry Dive, Omdia, Canalys, NetLine and the Digital Media Brands) with US-listed TechTarget. New TechTarget, which will be headquartered and listed in the US, will accelerate Informa's ambition in B2B Digital Services, creating a leading platform in B2B Data and Market Access, with forecasted annual sales of c.$500m.

The procedural elements of the combination are progressing to plan as we prepare the Informa Tech businesses to be combined with TechTarget, including filing Hart-Scott Rodino documents and preparing the Proxy Statement and other regulatory documents.

A Combination Director has been appointed and work on the operating model for New TechTarget is well advanced, building on the due diligence completed pre-announcement.

The response to the announcement from key stakeholders (customers, colleagues, shareholders) has been encouraging, recognising the opportunities the combination will create and benefits the enlarged business can bring to expanded data access, end-to-end product capability and product development.

We remain on track to complete in the second half of the year.

Taylor & Francis…Specialist Academic Research, Advanced Learning and Open Research

The market for specialist knowledge remains strong, underpinned by international growth in higher education and professional qualifications, and state-level investment in research and innovation. This is increasing the number of researchers and volume of research output globally, fuelling demand for specialist verification, indexation and distribution services.

This plays to the strengths of Taylor & Francis, with its portfolio of specialist publishing brands (Routledge, CRC Press, F1000), and growing portfolio of subject-specific academic content (c.2,700 journals, 140k+ annual articles, 170k+ reference titles). In 2024, this is delivering good momentum as we look to accelerate underlying growth from 3% to 4% this year.

⁶ Subject to majority shareholder approval and customary regulatory clearances

This growth acceleration reflects recent GAP2 investments, which have expanded the range of services we offer to authors, institutions and funders, developing more flexible Pay-to-Publish Open Research platforms alongside our traditional Pay-to-Read publishing services. This is enabling us to address broader audiences, target additional budgets and capture more value.

At the heart of our expansion in Open Research is the increasing use of technology and artificial intelligence to drive efficiencies in editorial and production, leading to improving article acceptance rates and reduced processing times. We are also seeing a flight to quality in the market, as researchers put greater emphasis on verification and authentication as well as speed to market, and this is playing to our advantage.

In the traditional Pay-to-Read area of the business, we are continuing to deliver strong subscription renewals and further traction in Read and Publish agreements with libraries and consortia. We have a strong pipeline for published article volumes, underpinning the long-term value of our subscription journal portfolio.

In Advanced Learning, we continue to invest in our front list, commissioning in under-served subject areas, with a focus on publishing more premium titles. We are also deploying technology across our backlist of 170k titles, using artificial intelligence to synthesise content into new formats and derivative products.

New Informa Group PLC: Focus, Scale and Growth

The strong performance of our businesses over recent years, combined with the benefit of inorganic investments, including the proposed combination with TechTarget, strengthens Informa's operating model:

¹In this report we refer to non-statutory measures, as defined in the Financial Review on page 9 and Glossary on page 45.

Momentum and Growth in Shareholder Returns and ESG

Further strong shareholder returns in 2024

A core strength and attraction of Informa is the cash generative nature of our business, with a high conversion of operating profit into operating cash flow, and with relatively low capital expenditure requirements.

With the business back to a more normalised trading backdrop and delivering consistent growth and expansion, we are generating significant cashflows, with £720m+ of free cash flow forecast in 2024, up from £632m in 2023 and in line with the free cashflow generated in 2019.

Balance sheet strength

As part of GAP2, we increased our portfolio focus, divesting Informa Intelligence for c.£2.5bn (at an average multiple of c.28x EV/EBITDA). Around £1.15bn of this capital has been returned to shareholders via share buybacks and we have also reinvested capital into the additions of Tarsus, Winsight and HIMSS, amongst others (average post-synergy multiple of c.9x EV/EBITDA).

We have significant balance sheet strength, with 2023 year-end leverage at 1.4x.

In addition, our debt is funded through covenant free bonds with fixed coupon rates, meaning recent interest rate rises are not immediately impacting interest costs. We also have no major near-term maturities to manage, with the first debt refinancing due in October 2025 (€700m), having extended our £1,050m Revolving Credit Facility last year.

Capital Allocation - Momentum and growth in Dividends and Share Buybacks

The strength of our balance sheet and scale of cash generation puts us in a strong position, with the ability to reinvest in our business organically and inorganically, whilst delivering strong shareholder returns.

Our approach to capital allocation is as follows:

·      Consistent organic investment in the business, typically in the range of 3-5% of Group revenue (c.£100-175m per annum);

·      Progressive ordinary dividends (c.£250m per annum);

·      A blend of annual share buybacks and inorganic investment, which will be flexed depending on available opportunities and potential returns, with a higher level of buybacks possible if attractive portfolio additions do not materialise and/or share buybacks are viewed as a better use of capital;

·      Target Group leverage is within the range of 1.5x to 2.5x Net Debt/EBITDA.

In 2024, the minimum level of in-year share buybacks will be £340m, reflecting £90m+ already completed this year and a further commitment of £250m. This commitment could be increased further through the year, depending on the availability of attractive inorganic opportunities and Group leverage meeting our thresholds.

Further embedded value through retained investments

Our financial strength is further underpinned by a series of valuable strategic investments that are not fully consolidated in our accounts. These provide the group with market access, market intelligence and technology, as well as a potential source of significant future capital if and when value is realised.

ESG momentum and growth through FasterForward

Informa remains committed to becoming an ever more sustainable business, including a long-term goal to become net zero carbon and net zero waste by 2030.

Our approach to deliver this is encapsulated within our FasterForward strategy, which includes a series of commitments to reduce Informa's carbon and waste footprint (Faster to Zero), to embed content within all our brands to help accelerate sustainability in our customer markets (Sustainability Inside), and to multiply the positive impact we have on disconnected communities (Impact Multiplier).

These commitments are operationalised across Informa through a series of programmes and initiatives which help to embed group-wide practices, such as the transition to renewable energy, educate and influence suppliers and partners, and provide direct support to individual teams on improving their approach to doing business in a sustainable way.

The most important of these is the Sustainable Event Fundamentals Programme, which requires events teams globally to accept, adopt and embed operating structures and activities that directly improve the impact of each individual brand, with major emphasis on carbon and waste reduction (e.g. Reusable stands, renewable electricity, carbon reduction, travel efficiency etc), as well as embedding sustainability content inside our brands and enhancing our economic and social impact on our host cities.

Over the next three years, increasing the number of events accredited to our Fundamentals standard across the Group is critical to meeting our long-term ESG targets.

Standards and recognition as a sustainability leader

Progress on FasterForward has seen Informa gain certification as a CarbonNeutral® Company for the last four years and independently verified Science-Based Targets. In addition, at a product level, in Academic Markets we are certified for CarbonNeutral® Publications and in B2B Markets, a number of our brands have been certified as CarbonNeutral® Events.

Independently rated sustainability indices and surveys also continue to recognise our progress, including the gold standard Dow Jones Sustainability Index, where Informa ranked in the Top 1% of the Media Sector globally in 2023, and in the MSCI ESG Ratings where we received a AAA ranking for the first time.

Financial Review

Income Statement

Informa delivered a strong set of results for the year ended 31 December 2023, including over 30% underlying revenue growth and c. 60% underlying adjusted operating profit growth. This reflected strong trading performances in both B2B Markets (Informa Markets, Informa Connect and Informa Tech) and Academic Markets (Taylor & Francis) buoyed by the full return of live events around the world, further international expansion and the continuing benefits of our GAP 2 strategy.

Financial Results

Our performance includes a 41.0% increase in revenue from continuing operations to £3,189.6m, and a 30.4% increase on an underlying basis. Every division delivered underlying revenue growth in the year. The Group reported a statutory operating profit of £507.8m in 2023, compared with a statutory operating profit of £184.1m for the year ended 31 December 2022, on a continuing basis. The growth in 2023 results reflected strong trading performance across all regions, including China, where demand returned rapidly following the re-opening of the market. Adjusted operating profit from continuing operations was £853.8m, growing 59.1% year-on-year on an underlying basis, again with growth delivered in all our divisions.

Statutory net finance costs reduced by £26.6m to £20.0m, with adjusted net finance costs reducing by £26.1m to £19.2m. This reflected additional interest earned on higher cash balances following the Informa Intelligence divestment in 2022, and higher average interest rates, as well as lower interest costs following the repayment of a Euro Medium Term Note (EMTN) in July 2023.

The combination of all these factors led to a statutory profit before tax from continuing operations of £492.1m in 2023, compared with a statutory profit before tax of £168.8m in the year ended 31 December 2022. The profit in the year led to a statutory tax charge of £29.4m in 2023 compared to a tax charge of £26.7m in the prior year.

This profit outcome translated into a statutory diluted earnings per share for continuing operations of 29.9p compared to 9.4p for the prior year, with the improvement reflecting growth in profits as well as a lower number of shares in issue following the share buyback programme. Adjusted diluted EPS from continuing operations grew to 45.3p from 24.4p in the prior year, an increase of 85.7%.

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 45. 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:

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 £346.0m (2022: £312.2m). The increase in adjusting items is primarily due to increased amortisation arising from the acquisitions made in the period and the associated costs of acquisition and integration. This is offset by a net fair value gain from the remeasurement of contingent consideration.

¹Excludes intangible product development and software amortisation of £41.1m (2022: £35.2m).

Intangible amortisation on continuing operations of £312.8m (2022: £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 of £53.3m (2022: £11.8m) principally relate to the acquisitions of Tarsus and Winsight, which both completed in FY23, and the proposed combination of the digital businesses of Informa Tech with TechTarget which was announced on 10 January 2024.

The table below shows the results and adjusting items by division for continuing operations, highlighting strong growth in the B2B Markets businesses, supported by another strong performance by Taylor & Francis.

¹Intangible asset amortisation is in respect of acquired intangibles and excludes amortisation of software and product development of £41.1m (2022: £35.2m)

Adjusted Net Finance Costs

Adjusted net finance costs from continuing operations, which consists of interest costs on our corporate bond borrowings and loans, partially offset by interest income on bank deposits, decreased by £26.1m to £19.2m. The decrease primarily relates to higher interest income from higher interest rates on increased cash balances that resulted from strong free cash flow generation and the cash proceeds from the divestment of Informa Intelligence assets in 2022. Additionally, interest costs decreased following the repayment of an EMTN in July 2023.

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

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 adjusted effective tax rate (as defined in the Glossary) reflects the blend of tax rates and profits in the jurisdictions in which we operate. In 2023, the adjusted effective tax rate for continuing operations was 18.7% (2022: 18.0%).

The calculation of the adjusted effective tax rate for continuing operations is as follows:

Tax payments

During 2023, the Group paid £112.4m (2022: £71.7m) 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:

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

At the end of 2023, the recognised deferred tax assets relating to US and UK tax losses were £37.6m (2022: £20.0m) and £9.8m (2022: £29.7m) respectively. These are expected to be utilised against future taxable profits.

Goodwill is not amortised as it is subject to impairment reviews, 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 £12.6m (2022: £10.7m) 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 £510.3m in 2023 (2022: £590.7m). The geographic split of taxes paid by our businesses was as follows:

In addition to the above, in 2023 we collected taxes on behalf of governments (e.g. employee taxes and sales taxes) amounting to £316.2m (2022: £239.0m).

Earnings Per Share

Adjusted diluted EPS from continuing operations was 85.7% higher at 45.3p (2022: 24.4p), largely reflecting higher adjusted earnings of £635.1m (2022: £356.5m) together with a 4.2% decrease in the weighted average number of shares following the share buybacks completed during the year.

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

Dividends

The Group resumed dividend payments in 2022 and in 2023 the dividend was increased significantly to reflect the strong growth in Group earnings. Going forward, the Group will look to continue progressively growing dividends to strike a balance between rewarding shareholders and retaining the financial strength and flexibility to invest in the business and pursue growth opportunities.

An interim dividend of 5.8p per share (2022: 3.0p per share) was paid on 15 September 2023.  The total amount paid in 2023 relating to the final dividend for 2022 and interim dividend for 2023 was £176.6m (2022: £43.3m). The Board has recommended a final dividend of 12.2p per share for FY23 (2022: 6.8p per share). The final dividend is scheduled to be paid on 12 July 2024 to ordinary shareholders registered at the close of business on 7 June 2024. This will result in total dividends for the year of 18.0p per share (2022: 9.8p per share). The Dividend Reinvestment Plan (DRIP) will be available for the final dividend and the last date for receipt of elections for the DRIP will be 21 June 2024.

Dividend cover (see Glossary of Terms for definition) was 2.5 times (2022: 2.5 times), being adjusted diluted EPS on continuing operations of 45.3p (2022: 24.4p) divided by total dividends per share of 18.0p (2022: 9.8p pence). Our dividend pay-out ratio was 40%, being total dividends per share of 18.0p divided by adjusted diluted EPS on continuing operations of 45.3p.

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 2023 across our continuing operations approximately 62% (2022: 65%) of Group revenue was received in USD or currencies pegged to USD, with 8% (2022: 8%) received in Euro and 9% (2022: 1%) in Chinese renminbi.

Similarly, on continuing operations we incurred approximately 54% (2022: 54%) of our costs in USD or currencies pegged to USD, with 4% (2022: 3%) in Euro and 7% (2022: 3%) in Chinese renminbi.

For continuing operations, each one cent ($0.01) movement in the USD to GBP exchange rate has a circa £16m (2022: circa £13m) impact on annual revenue, and a circa £6m (2022: circa £5m) impact on annual adjusted operating profit.

The following rates versus GBP were applied during the year:

Free Cashflow

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.

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.

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

²Working 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.

FCF  from continuing operations was £213.8m higher than 2022 principally due to the £357.5m higher adjusted operating profit and a reduction of £26.2m in net interest paid, which was partly offset by an increase in cash tax of £40.7m, an increase in capex investment of £26.3m and working capital outflows of £55.2m in the year (2022: £65.3m inflows).  The calculation of OCF conversion and FCF conversion is as follows:

Net capital expenditure from continuing operations increased to £93.8m (2022: £67.5m) reflecting continuing GAP 2 investments and other capital expenditure. This investment was equivalent to 2.9% of 2023 continuing revenue (2022: 3.0%).

Net cash interest payments of £39.2m were £26.2m lower than the prior year, largely reflecting interest income on the Group's increased cash balances following the divestment of the Informa Intelligence portfolio in 2022, some of which has since been reinvested in targeted acquisitions such as Tarsus and Winsight.

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:

Net cash from operating activities for continuing operations increased by £223.0m to £620.2m, principally driven by the increase in adjusted profit in the year, partly offset by a working capital outflow of £55.2m, which compared to a £65.3m inflow in 2022.  The working capital outflow in 2023 reflected the recognition of revenue for events where the cash collections had been received before 2023, but the events were postponed until 2023 because of COVID-19. This was particularly relevant for 2023 events in China.  

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

The following table reconciles free cash flow from continuing and discontinued operations to net funds flow and net debt, with net debt increasing by £1,211.8m to £1,456.4m during the year.

¹Includes free cash flow for discontinued operations of £48.5m for 2022

Financing and Leverage

Net debt increased by £1,211.8m in the year to £1,456.4m (2022: £244.6m). This was largely due to the addition of a number of businesses during the year, as well as the growth in dividends and ongoing share buyback programme, all of which were partially offset by strong growth in free cash flow.

The Group retains significant available liquidity, with unutilised committed financing facilities available to the Group of £1,097.1m (31 December 2022: £1,099.9m). Combined with £389.3m of cash (2022: £2,125.8m), the available group level liquidity at 31 December 2023 was £1,486.4m (31 December 2022: £3,225.7m).

The average debt maturity on our drawn borrowings is currently 2.7 years (31 December 2022: 3.1 years). Following the EUR EMTN of GBP equivalent €450.0m (£386.0m) which matured in July 2023, there are no significant maturities until October 2025.

The Informa leverage ratio at 31 December 2023 was 1.4 times (31 December 2022: (0.2) times), and the Informa interest cover ratio was 75.2 times (31 December 2022: 16.6 times). Both are calculated consistently with our historical basis of reporting of financial covenants which no longer applied at 31 December 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:

¹Includes adjusted EBITDA for discontinued operations of £41.8m for 2022

²Refer 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:

¹Includes adjusted EBITDA for discontinued operations of £41.8m for 2022

²Refer to Glossary for details of the adjustments to EBITDA for Informa interest cover

There are financial covenants over £30.4m (2022: £41.3m) of drawn borrowings in the Curinos business. These financial covenants are ring-fenced to borrowings against 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 2023, cash invested in acquisitions was £1,125.1m (2022: £405.3m). Of this, £596.7m (2022: £315.1m) related to spend on acquisitions net of cash acquired, £22.8m (2022: £9.8m) to cash paid for business assets, £57.4m (2022: £20.1m) to acquisition and integration spend, £nil (2022: £1.5m) to the cash settlement on the exercise of an option relating to non-controlling interests, £nil (2022: £22.2m) to the acquisition of the convertible bond, £443.9m (2022: £36.6m) to the repayment of acquired debt and £4.3m (2022: £nil) to a further investment in the Group's interest in BolognaFiere.

Share Buyback

A central theme of GAP 2 was the decision to increase portfolio 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 and B2B Markets.

Under GAP 2, the Group committed to return capital to shareholders through a share buyback programme which was expanded to £1.15bn in November 2023. In the year ended 31 December 2023, £548.3m of shares were repurchased with 77.1m shares cancelled. Cumulatively by 31 December 2023, £1,065.3m of shares had been repurchased with 166.1m shares cancelled. The shares acquired during the year ended 31 December 2023 were at an average price of 711p per share, with prices ranging from 626p to 790p.

Pensions

The Group continues to meet all commitments to its pension schemes, which include five (2022: six) defined benefit schemes, all of which are closed to future accruals.

At 31 December 2023, the Group had a net pension surplus of £41.7m (31 December 2022: £49.1m), comprising a pension surplus of £48.1m (31 December 2022: £55.8m) and pension deficits of £6.4m (31 December 2022: £6.7m). Gross liabilities were £478.2m at 31 December 2023 (31 December 2022: £477.3m).