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2002 INTERIM RESULTS Financial Results Six month performance 2002 H1 2001 H2 2001 H1 Continuing turnover (£m) PBT * (£m) EPS * (p) Dividend per share (p) Net cash (£m) Margin (%) 412.8 40.7 8.9 3.0 50.4 8.8 441.1 25.1 6.3 1.0 49.3 4.9 489.4 71.7 11.8 11.0 250.7

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financial results six month performance
Financial Results Six month performance

2002

H1

2001

H2

2001

H1

Continuing turnover (£m)

PBT * (£m)

EPS * (p)

Dividend per share (p)

Net cash (£m)

Margin (%)

412.8

40.7

8.9

3.0

50.4

8.8

441.1

25.1

6.3

1.0

49.3

4.9

489.4

71.7

11.8

11.0

250.7

12.2

2

*before exceptionals and amortisation of intangibles

2002 review of first half year
2002 Review of First Half Year
  • Very challenging market conditions
  • Strong performance from businesses in Asia, UK and Europe
    • underlying profit of £21m, up 68% on £13m in H1 2001
  • Lower US revenue mitigated by continuing action on costs
    • CMP Media revenue down 38 % on 2001
    • PR Newswire revenue down 21 % on 2001
  • Market share gains continue
    • NOP UK sales up 3% to end July, BMRA down 2.6% to end June
    • PRN Disclose over 10% of LSE announcements
    • CMP Media H1 29% vs 25%
2002 review of first half year4
2002 Review of First Half Year
  • Improvement on second half of 2001
    • EPS of 8.9p vs 6.3p
  • Additional £55m of cost savings secured
    • Now total of £165m (24%) off 2000 fixed cost base
  • 113.5% cash conversion – net cash positive £50.4 m
  • Balance sheet strength is a competitive advantage

Controlling costs to deliver profits

implementation of strategy
Implementation of Strategy
  • Building a leader in business information by investing in core businesses
  • Emphasis on products and value
  • Organic investment programme increased to extend product range
  • Improving competitive position
  • Improving operational leverage
  • Retaining strong balance sheet
  • Building and realising value in non core assets
key investor issues
Leverage

Quality of Earnings

Acquisition Risk

Dependency on US High Tech

Longer Term Growth

No net borrowings

Over 100% cash conversion andprudent accounting policies

Committed to areas of expertise

Cautious on values

High Tech currently loss making

Attractive upside potential

Market leading positions in growth markets

Key Investor Issues

GENERAL MARKET ISSUES

UBM SPECIFIC ISSUES

outlook
Outlook
  • UK, Asia and Europe
    • trading well, with strong margin growth in UK
  • US
    • continuing low visibility
    • trading climate difficult with deflationary pressures and no expectation of any improvement in 2002
  • NOP
    • UK and US syndicated trading well
    • Healthcare and US ad hoc revenue pressures
outlook8
Outlook
  • PR Newswire
    • corporate scandals and cost pressure curtailing client expenditure
  • CMP Media
    • planning assumption
      • dollar revenues down 45 per cent on 2000
    • further efficiencies being delivered
      • approaching break-even in H2
  • Margin
    • on target to improve margins in H2 to 9% to 10% (4.9% H2 2001)
    • 2003 margins should improve to in excess of 11%
financial results six months to 30 june
Financial Results Six months to 30 June

Change %

2002

2001

(15.7)

(38.8)

-

(9.9)

(86.3)

(43.2)

(31.5)

(25.0)

-

489.4

59.5

(19.1)

40.4

31.3

71.7

(14.3)

11.8

11.0

Continuing turnover (£m)

Continuing operating profit* (£m)

Discontinued operating profit* (£m)

Total operating profit* (£m)

Interest (£m)

PBT * (£m)

Taxation* (£m)

EPS * (p)

Dividend per share (p)

412.8

36.4

-

36.4

4.3

40.7

(9.8)

8.9

3.0

*before exceptionals and amortisation of intangibles

financial results 1 st half 2002 vs 2 nd half 2001
Financial Results 1st half 2002 Vs 2nd half 2001

2002

H1

2001

H2

Change %

Turnover (£m)

Total operating profit* (£m)

Interest (£m)

PBT * (£m)

Taxation* (£m)

EPS * (p)

Dividend per share (p)

441.8

20.6

4.5

25.1

(10.7)

6.3

1.0

(6.6)

76.7

(4.4)

62.2

8.4

41.3

-

412.8

36.4

4.3

40.7

(9.8)

8.9

3.0

*before exceptionals and amortisation of intangibles

cash conversion six months to 30 june
Cash ConversionSix months to 30June

2002

£m’s

Operating profit (before goodwill & exceptionals)

Depreciation

Capex

Working capital/other

Operating cash inflow

Cash conversion

36.4

12.1

(5.8)

(1.4)

41.3

113.5%

further cash flows six months to 30 june
Further Cash FlowsSix months to 30June

2002

£m’s

Operating cash inflow

Investments (including Channel 5)

Dividends paid

Tax refunded

Net interest paid

Payments relating to prior year disposals

Payments against restructuring and exceptionals

Other

Increase in cash in the period

41.3

(6.1)

(4.3)

14.4

(5.5)

(25.0)

(23.3)

9.6

1.1

13

segmental analysis six months to 30 june
Segmental AnalysisSix months to 30 June

Operating Profit

Group Turnover

2002

£m

Change

%

2002

£m

Change

%

Underlying

%

Underlying

%

101.5

57.5

136.5

25.5

62.3

29.5

412.8

NOP World

PR Newswire

CMP Media

CMP Asia

CMP Information

UAP

Total Continuing

33.4

(20.5)

(37.8)

5.8

(8.1)

-

(15.7)

11.4

12.3

(9.2)

7.7

7.3

6.9

36.4

7.5

(42.8)

-

(6.1)

-

43.8

(38.8)

(6.8)

(21.2)

(31.2)

(7.7)

(5.9)

-

(18.9)

(5.9)

(30.5)

-

(6.2)

-

57.8

(43.0)

ubm by geography six months to 30 june 2002
UBM by GeographySix months to 30 June 2002

Asia

5.6%

E&ME

0.8%

Asia

17.3%

UK

28.9%

UK

39.3%

US

64.7%

US

43.4%

REVENUE

OPERATING PROFIT

investment criteria
Investment Criteria
  • Net debt capacity around £400m
    • minimum interest cover of 5 times
    • conservative approach to financing
  • Acquisition financial criteria
    • cost of capital 8%
    • generally eps enhancing first full year
investment criteria17
Investment Criteria
  • Investment targets
    • exhibitions - break even in year 2
    • organic - 2 to 4 year payback
    • benchmarked against returns on buying back shares
  • Acquisition and investment performance
    • mixed performance from acquisitions
      • integration and cost benefits on track
      • impacted by general US economic pressures
    • organic initiatives on target
accounting checklist
Off balance sheet financing/SPV

Capitalisation of costs

Reported sales revenue

Restructuring costs

“Underlying” growth rates

Goodwill amortisation period

FRS17

Derivatives

Balance sheet

None

None

No % completion accounting

2002 costs expensed

Acquisitions stripped out

Lives shortened to ten years

£60m deficit

Fully disclosed

Net cash positive

ACCOUNTING CHECKLIST
delivery of performance targets
Delivery of Performance Targets
  • Cost savings
  • Margins
  • Market Share
  • Successful organic investments

A Stronger Business for Today AND TOMORROW

constantly improving operational efficiency cost savings vs 2000 fixed cost base
Constantly Improving Operational EfficiencyCost savings Vs 2000 fixed cost base

£165m

1900

Staff

Staffing down by over 30% in

PRN, CMP Media and CMPi

£110m

1400

Staff

£60m

700

Staff

August

2001

March

2002

August

2002

21

operational objectives
Operational Objectives

Margin Targets

15%

11%

+

12.2%

9% to

10%

8.8%

4.9%

2001

H1

2001

H2

2002

H1

2002

H2

Medium

Term

2003

22

nop world market research six months to 30 june
NOP World - Market ResearchSix months to 30 June

2002

£m

2001

£m

Change

%

Underlying

%

Turnover

US

RoW

70.6

30.9

101.5

8.0

3.4

11.4

43.9

32.2

76.1

8.2

2.4

10.6

60.8

(4.0)

33.4

(2.4)

41.7

7.5

(4.7)

(9.6)

(6.8)

(24.4)

56.5

(5.9)

Operating profit

US

RoW

Margin

11.2%

nop world six months to 30 june 2002
NOP WorldSix months to 30 June 2002
  • Revenue and profit boosted by acquisitions
  • Underlying revenue down 6.8% and profit down 5.9%
    • Downturn in health sector, especially US
  • Underlying margin 13.6% holding firm on last year
    • Roper pre-acquisition had margins of 5%
  • Strength in syndicated and in UK
  • Rapid growth in online research
nop world actions and outlook
NOP WorldActions and outlook
  • Intensified client focus
  • Key new client wins
  • Healthcare issues peculiar to FDA pipeline & drugs off patent
  • Pipeline of product launches continues
  • Market growth outlook: UK and US both flat to down
    • NOP US: broadly in line with market
    • NOP UK: positive growth, better than market
pr newswire news distribution six months to 30 june
PR Newswire - News DistributionSix months to 30 June

2002

£m

2001

£m

Change

%

Underlying

%

Turnover

US

RoW

51.1

6.4

57.5

13.4

(1.1)

12.3

64.3

8.0

72.3

22.3

(0.8)

21.5

(20.5)

(20.0)

(20.5)

(39.9)

(37.5)

(42.8)

(20.9)

(23.4)

(21.2)

(31.2)

(100.0)

(30.5)

Operating profit

US

RoW

Margin

21.4%

news distribution six months to 30 june 2002
News DistributionSix months to 30 June 2002
  • Volume down 13.2% and revenue per message down 5.6%
    • cautious customers trading down
    • continuing absence of M&A, IPO’s
    • in market turmoil corporates want low profile
  • 30% reduction in staff since end of 2000
  • Robust performance from key evaluation products
    • grown from 13% to 15% of turnover
  • 60% Fortune 500
news distribution actions and outlook
News DistributionActions and outlook
  • Action on margins to mitigate effect of market conditions
  • Corporate publicity aversion is temporary
    • Investors and regulators will increase disclosure
  • Pipeline of product launches continues
    • building on strength of “evaluation” products
  • Market share gains in both US and UK,
    • UK Disclose taking market share faster than expected
professional media cmp media six months to 30 june

2002

£m

2001

£m

Change

%

Underlying

%

136.5

219.6

(37.8)

(31.2)

Professional Media: CMP MediaSix months to 30 June

Turnover

Operating Profit

-

-

(9.2)

14.0

cmp media six months to 30 june 2002
CMP Media Six months to 30 June 2002
  • Loss of £9.2m this half Vs £22.2m in second half of 2001
    • additional revenue pressure
    • further significant cost reductions realised in first half 2002
  • Significant market share gains: 28.7% Vs 24.6% last year
  • Yields down 11.2% on H1 2000, in line with H2 2001
  • Growth in revenue & margin driving medical division forward
cmp media actions and outlook
CMP MediaActions and outlook
  • Now planning on $ revenue down around 45% on 2000 continuing levels
  • Further cost savings in H2 should still leave profits in line with expectations
    • 37% reduction in staff since end 2000
    • approaching breakeven in second half 2002
  • Balance sheet strength ensuring improved competitive position
    • consolidating leveraged position for market recovery
  • Further process improvements in 2003
  • Pipeline of product launches continues
  • Limited visibility, industry indicators suggesting gradual recovery

31

professional media cmp asia six months to 30 june
Professional Media: CMP AsiaSix months to 30 June

2002

£m

2001

£m

Change

%

Underlying

%

Turnover

25.5

24.1

5.8

(7.7)

  • Margins over 30%, above budget
  • KSS acquisition in Japan performing well
  • Over 13,000 sq mtrs for 3 new events successfully launched
  • Weak US events – cruises and leather down after Sept 11
  • Record year in jewellery fairs – fashion jewellery up 23%

Operating Profit

7.7

(6.1)

(6.2)

8.2

professional media cmp information six months to 30 june

2002

£m

2001

£m

Change

%

Underlying

%

62.3

67.8

(8.1)

(5.9)

Professional Media: CMP InformationSix months to 30 June

7.3

0.4

  • Margins transformed, over 11.7% compared to breakeven last year
  • Radical cost cutting programme
    • 36% reduction in staff since end 2000
    • nine titles/events either closed or merged
  • Five new launches:
    • including IFSEC Shanghai, Firex South and Intra

Turnover

Operating Profit

-

-

33

uap consumer media six months to 30 june

2002

£m

2001

£m

Change

%

Underlying

%

UAP - Consumer MediaSix months to 30 June

29.5

29.5

-

-

6.9

4.8

  • Strong increase in margins from 16% to 23%
  • Significant cost savings
  • Strength in used car and homes & leisure markets
      • boosted Exchange & Mart
  • Recovery from impact of foot and mouth
      • boosted Dalton’s Weekly
  • Auto Exchange titles now moved into profit

Turnover

Operating Profit

43.8

57.8

channel 5 six months to 30 june
Channel 5Six months to 30 June

2002

£m

2001

£m

Change

%

Turnover

Operating profit

98.2

(17.8)

15.8

-

113.7

(2.2)

Audience share up to 6.4% (5.6%)

Advertising share up to 7.3% (6.2%)

united business media strategic priorities
United Business MediaStrategic Priorities
  • Managing effectively in very challenging markets
  • Investing in products to build market share and drive growth
  • A time of opportunity for the prudent
  • On course to again improve margins in second half and 2003
breakdown of net cash and interest first half 2002
Breakdown of Net Cash and Interest First half 2002

30 June

2002

£m

Average

Balance

£m

Interest

Rate

%

Interest

£m

737

(687)

50

154

815

(766)

3.8

4.0

15.5

(15.5)

4.3

4.3

Cash

Debt

Net Cash

Channel 5*

Net Interest

**

*C5 loan includes shareholder funding loans and working capital

** £180m convertible bond repaid Jan 02

38

slide39

2002

2001

2000

CMP Media – High-tech

Monthly Market Share Analysis by Ad Page Volumes

CMP Media

IDG

Reed Business

ZD

Penton

Source: IMS/Auditor

cmp media us revenues restated to exclude closures
CMP Media US RevenuesRestated to exclude closures

H1

2002

H1

2000

Change

%

Continuing revenues $m

Ad page volumes – Month of June

Ad page volumes – YTD June

189.3

2,015

11,615

329.7

3,585

18,992

(42.6)

(43.8)

(38.8)

cmp media us revenues 2000 restated to exclude closures twelve months to 31 december
CMP Media US Revenues2000 restated to exclude closuresTwelve months to 31 December

2001

$m

2000

$m

As reported

Titles and events closed

Continuing revenues

501

(43)

458

741

(88)

653

semiconductor worldwide market three month moving average
Semiconductor Worldwide MarketThree Month Moving Average

$Bn’s

42

Source: Semiconductor Industry Association

semiconductor worldwide market three month moving average43
Semiconductor Worldwide MarketThree Month Moving Average

$Bn’s

2002 to end of May

43

Source: Semiconductor Industry Association

slide44

Technology Confidence Barometer

RoperNOP: July 2002

  • Investment confidence has not changed significantly in the UK and the US between March and July 2002.
  • In the US and UK, growth rates of around 4% in IT spending are predicted for 2002 compared to 2001.
  • Confidence in Germany is lower than in the other markets, with an increase of only 0.2% expected for the full year 2002 compared to 2001.
  • There are moderate levels of optimism for 2003 however in all three markets, with predicted increases in expenditure of between 5% and 7% compared to 2002.
  • The top product areas for growth in 2002 are Security software, Web-based applications, High-speed data transmission (broadband) and Virtual Private Networks, while Consulting and Outsourcing are the areas where zero growth is forecast this year.

44

professional media six months to 30 june
Professional MediaSix months to 30 June

2002

£m

2001

£m

Change

%

Underlying

%

Turnover

CMPMedia

CMP Asia

CMP Information

Total

136.5

25.5

62.3

224.3

219.6

24.1

67.8

311.5

(37.8)

5.8

(8.1)

(28.0)

(31.2)

(7.7)

(5.9)

(23.7)

Operating Profit

CMP Media

CMP Asia

CMP Information

Total

-

(6.1)

-

(74.3)

-

(6.2)

-

(84.3)

(9.2)

7.7

7.3

5.8

14.0

8.2

0.4

22.6

45

ubm by revenue type six months to 30 june 2002 continuing turnover
UBM by Revenue TypeSix months to 30 June 2002Continuing turnover

15.2%

Other

Ad’

20.3%

High Tech

Advertising

64.5%

Information

Services

High Tech Advertising is currently loss making