Informa PLC - AGM Trading Update
Informa LEI: 5493006VM2LKUPSEDU20
Continued Stability and Strength
"At Informa, our Subscriptions businesses continue to perform resiliently against a tough market backdrop, whilst our Events businesses - in the absence of physical exhibitions, events and conferences - are working closely with customers to provide alternative digital services, with a focus on long-term relationships ahead of short-term revenue."
"The prospect of a return for some of our major Events brands in Mainland China from July is now real. Elsewhere, we are deploying AllSecure biosafety measures as permission emerges to operate events, although we expect the pace and shape of recovery to be gradual and phased by market. Despite continued near-term unpredictability, our strengthened balance sheet, continuing cost controls and strong liquidity is enabling us to focus on the other side of COVID-19. This includes how to get the most out of Return and Recovery in 2021, and identifying and evaluating future strategic opportunities."
Current Trading: a mixed picture
As countries and locations around the world steadily relax pandemic control measures and exit lockdown, it is clear that the return to normal daily and business life will be phased, with enhanced hygiene and social distancing measures likely to remain a feature for some time. For Informa, and the Events-related businesses in particular, this suggests the pace and shape of recovery is also likely to be gradual, varying by region, by customer market and by event format.
Subscriptions-related businesses (c35% of Group revenue in 2019)
Our Subscriptions-related businesses provide an anchor for the Group and, in the main, continue to trade well. Informa Intelligence continues to deliver steady growth, supported by solid subscription renewals and positive annualised contract values. The business is seeing particular strength across its clinical trials and drug development brands in the Pharma Intelligence business.
Similarly, in Taylor & Francis, our journal subscriptions business remains robust, with consistent renewals and steady growth, supported by our expanding presence in open access and open research. Our books business is seeing some increased disruption to physical book sales from COVID-19 due to product availability and supply-chain issues, with most universities temporarily closed. This is being partially offset by stronger e-books revenue.
Events-related businesses (c65% of Group revenue in 2019)
As expected, in the two months since the First Quarter Trading Update, the Events-related businesses have not traded any physical product anywhere in the world due to COVID-19. The events teams have focused on further events rescheduling where possible and, where not, looked at other ways to engage and provide value to customers through digital or hybrid events, marketing services and targeted lead generation.
Looking forward, as expected, there is minimal physical product scheduled for June but we are now planning to run a number of major events in
Elsewhere, it remains a mixed picture and it is clear that some locations will take a lot longer to come out of the other side of COVID-19, both in terms of the permissions and practicalities of running an event and the confidence of participants to return. For similar reasons, international travel looks set for a gradual recovery, which will impact those events more reliant on international, rather than solely domestic participation.
In Informa's largest market,
Informa…All Secure Standard for Events
One of the ways the Group is building permission with authorities to run events and confidence with Colleagues and Customers to participate, is by introducing enhanced measures that raise the level of hygiene and bio-safety at events.
Following collaboration amongst leading organisers, association partners and a range of suppliers, we have helped to establish the All Secure standard for the events industry, a best-practice playbook of processes and guidelines that can be incorporated to ensure the highest standards of hygiene, safety and cleanliness.
Informa AllSecure is the adoption of this industry standard for our business and includes 10 key commitments that all Informa events will meet in future, ranging from enhanced cleaning processes, to non-contact registration, the potential use of face masks and physical distancing measures.
Update on COVID-19 Action Plan
Informa's COVID-19 Action Plan continues to shape the Group's response to the pandemic, ensuring the company reacts quickly to the evolving situation, prioritising the safety and wellbeing of Colleagues and Customers whilst managing the business for long-term growth and value creation.
This includes continued support for Colleagues, both personally and professionally, providing flexibility, guidance and support wherever possible and ensuring everyone has the tools necessary for effective remote working. In addition, targeted financial assistance continues to be made available to any Colleagues in particular hardship due to COVID-19 through the
From an operating standpoint, The Postponement Programme is now largely complete. As part of this, 160+ brands have now been cancelled or rephased from 2020 to 2021, representing ±
Further rescheduling of events within 2020 is unlikely given the volume of brands now scheduled in the final four months of the year, with limited remaining venue capacity available. The brand schedule is constantly reviewed to assess the likelihood that each of the Informa events planned will be able to run and the expected level of exhibitor and attendee participation. This will enable the Group to make individual brand and event decisions on whether to continue as planned or shift the focus to 2021.
This review is ongoing, but the early indications suggest that, at the current pace and rate of recovery outside of
In this context, Cost Management remains a key focus across the Group, albeit there is a balance between managing costs appropriately in 2020 and managing for capability in 2021. We continue to recover direct costs where events have been cancelled, whilst controlling indirect costs sensibly through initiatives such as an ongoing recruitment freeze, the further deferral of salary reviews and merit rises, the removal of all discretionary costs and the extension of voluntary sabbaticals.
In total, £400m+ of cost savings have been identified within adjusted operating profit, including direct savings on events already cancelled and those that have switched from physical to digital. The Group continues to review other areas of potential cost savings, particularly in the context of the continuous reassessment of our events schedule for the remainder of 2020.
In addition, Financing Control measures continue to be strengthened to ensure Informa has Stability and Strength to the other side of the COVID-19 pandemic, whatever the pace and shape of recovery. In April, we successfully raised
Constructive discussions with our US private placement debt holders are ongoing and a decision on when or whether to change these discussions to a formal request for a covenant waiver will be made once there is greater visibility on the performance of the Events businesses in the second half of the year.
2020 Half-Year Results
Given all of the above, it is our intention to publish the 2020 Half-Year Results after the Summer in September (date to be confirmed), when we anticipate greater clarity on the pace and shape of recovery of Informa's Events-related businesses through to the year-end.
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Notes to Editors
Informa Group PLC
Informa is a leading international Exhibitions, Events,
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