2002 INTERIM RESULTS
Financial Results
Six month performance
Continuing turnover (£m)
2002
H1
2001
H2
2001
H1
412.8
441.1
489.4
40.7
25.1
71.7
EPS * (p)
8.9
6.3
11.8
Dividend per share (p)
3.0
1.0
11.0
50.4
49.3
250.7
8.8
4.9
12.2
PBT * (£m)
Net cash (£m)
Margin (%)
*before exceptionals and amortisation of intangibles
2
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%
United Business Media
3
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
United Business Media
4
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
United Business Media
5
Key Investor Issues
GENERAL MARKET ISSUES
Leverage
No net borrowings
Quality of Earnings
Over 100% cash conversion and
prudent accounting policies
UBM SPECIFIC ISSUES
Acquisition Risk
Committed to areas of expertise
Cautious on values
Dependency on US High Tech
High Tech currently loss making
Attractive upside potential
Longer Term Growth
Market leading positions in growth markets
United Business Media
6
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
United Business Media
7
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%
United Business Media
8
FINANCIAL REVIEW
Financial Results
Six months to 30 June
2002
2001
Change %
412.8
489.4
(15.7)
36.4
59.5
(38.8)
-
(19.1)
-
36.4
40.4
(9.9)
4.3
31.3
(86.3)
PBT * (£m)
40.7
71.7
(43.2)
Taxation* (£m)
(9.8)
(14.3)
(31.5)
EPS * (p)
8.9
11.8
(25.0)
Dividend per share (p)
3.0
11.0
-
Continuing turnover (£m)
Continuing operating profit* (£m)
Discontinued operating profit* (£m)
Total operating profit* (£m)
Interest (£m)
*before exceptionals and amortisation of intangibles
United Business Media
10
Financial Results
1st half 2002 Vs 2nd half 2001
2001
H2
Change %
412.8
441.8
(6.6)
36.4
20.6
76.7
4.3
4.5
(4.4)
PBT * (£m)
40.7
25.1
62.2
Taxation* (£m)
(9.8)
(10.7)
8.4
EPS * (p)
8.9
6.3
41.3
Dividend per share (p)
3.0
1.0
-
Turnover (£m)
Total operating profit* (£m)
Interest (£m)
*before exceptionals and amortisation of intangibles
2002
H1
United Business Media
11
Cash Conversion
Six months to 30 June
2002
£m’s
Operating profit (before goodwill & exceptionals)
36.4
Depreciation
12.1
Capex
(5.8)
Working capital/other
(1.4)
Operating cash inflow
41.3
Cash conversion
113.5%
United Business Media
12
Further Cash Flows
Six months to 30 June
2002
£m’s
Operating cash inflow
41.3
Investments (including Channel 5)
(6.1)
Dividends paid
(4.3)
Tax refunded
14.4
Net interest paid
(5.5)
Payments relating to prior year disposals
(25.0)
Payments against restructuring and exceptionals
(23.3)
Other
9.6
Increase in cash in the period
1.1
13
Segmental Analysis
Six months to 30 June
Group Turnover
2002
Change
£m
%
Operating Profit
Underlying
%
2002
£m
Change
%
Underlying
%
NOP World
101.5
33.4
(6.8)
11.4
7.5
(5.9)
PR Newswire
57.5
(20.5)
(21.2)
12.3
(42.8)
(30.5)
CMP Media
136.5
(37.8)
(31.2)
(9.2)
-
-
CMP Asia
25.5
5.8
(7.7)
7.7
(6.1)
(6.2)
CMP Information
62.3
(8.1)
(5.9)
7.3
-
-
UAP
29.5
-
-
6.9
43.8
57.8
412.8
(15.7)
(18.9)
36.4
(38.8)
(43.0)
Total Continuing
United Business Media
14
UBM by Geography
Six months to 30 June 2002
E&ME
0.8%
Asia
5.6%
US
64.7%
UK
28.9%
Asia
17.3%
UK
39.3%
US
43.4%
REVENUE
OPERATING PROFIT
United Business Media
15
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
United Business Media
16
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
United Business Media
17
ACCOUNTING CHECKLIST
Off balance sheet financing/SPV
None
Capitalisation of costs
None
Reported sales revenue
No % completion accounting
Restructuring costs
2002 costs expensed
“Underlying” growth rates
Acquisitions stripped out
Goodwill amortisation period
Lives shortened to ten years
FRS17
£60m deficit
Derivatives
Fully disclosed
Balance sheet
Net cash positive
United Business Media
18
OPERATIONAL REVIEW
Delivery of Performance Targets
Cost savings
Margins
Market Share
Successful organic investments
A Stronger Business for Today AND TOMORROW
United Business Media
20
Constantly Improving Operational Efficiency
Cost savings Vs 2000 fixed cost base
Staffing down by over 30% in
PRN, CMP Media and CMPi
£60m
£165m
1900
Staff
£110m
1400
Staff
700
Staff
August
2001
March
2002
August
2002
21
Operational Objectives
Margin Targets
15%
12.2%
8.8%
9% to
10%
11%
+
4.9%
2001
H1
2001
H2
2002
H1
2002
H2
2003
Medium
Term
22
NOP World - Market Research
Six months to 30 June
Turnover
2002
£m
2001
£m
Change
%
Underlying
%
US
70.6
43.9
60.8
(4.7)
RoW
30.9
32.2
(4.0)
(9.6)
101.5
76.1
33.4
(6.8)
US
8.0
8.2
(2.4)
(24.4)
RoW
3.4
2.4
41.7
56.5
11.4
10.6
7.5
(5.9)
Operating profit
Margin
11.2%
United Business Media
23
NOP World
Six 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
United Business Media
24
NOP World
Actions 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
United Business Media
25
PR Newswire - News Distribution
Six months to 30 June
Turnover
2002
£m
2001
£m
Change
%
Underlying
%
51.1
64.3
(20.5)
(20.9)
6.4
8.0
(20.0)
(23.4)
57.5
72.3
(20.5)
(21.2)
US
13.4
22.3
(39.9)
(31.2)
RoW
(1.1)
(0.8)
(37.5)
(100.0)
12.3
21.5
(42.8)
(30.5)
US
RoW
Operating profit
Margin
21.4%
United Business Media
26
News Distribution
Six 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
United Business Media
27
News Distribution
Actions 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
United Business Media
28
Professional Media: CMP Media
Six months to 30 June
2002
£m
Turnover
Operating Profit
2001
£m
Change
%
136.5
219.6
(37.8)
(9.2)
14.0
-
Underlying
%
(31.2)
United Business Media
-
29
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
United Business Media
30
CMP Media
Actions 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
2002
£m
2001
£m
Turnover
25.5
24.1
Operating Profit
7.7
8.2
Change
%
5.8
(6.1)
Underlying
%
(7.7)
(6.2)
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%
United Business Media
32
Professional Media: CMP Information
Six months to 30 June
2002
£m
Turnover
Operating Profit
2001
£m
Change
%
Underlying
%
62.3
67.8
(8.1)
(5.9)
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
33
UAP - Consumer Media
Six months to 30 June
2002
£m
Turnover
Operating Profit
2001
£m
Change
%
Underlying
%
29.5
29.5
-
-
6.9
4.8
43.8
57.8
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
United Business Media
34
Channel 5
Six months to 30 June
2002
£m
Turnover
Operating profit
2001
£m
Change
%
113.7
98.2
15.8
(2.2)
(17.8)
-
Audience share up to 6.4% (5.6%)
Advertising share up to 7.3% (6.2%)
United Business Media
35
United Business Media
Strategic 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
United Business Media
36
Breakdown of Net Cash and Interest
First half 2002
30 June Average Interest
2002 Balance Rate Interest
£m
£m
%
£m
Cash
737
Debt
(687) **
Net Cash
Channel 5*
815
3.8
15.5
(766)
4.0
(15.5)
50
154
Net Interest
*C5 loan includes shareholder funding loans and working capital
** £180m convertible bond repaid Jan 02
4.3
4.3
38
CMP Media – High-tech
Monthly Market Share Analysis by Ad Page Volumes
CMP Media
IDG
Reed Business
ZD
Penton
2000
2001
2002
Source: IMS/Auditor
United Business Media
39
CMP Media US Revenues
Restated to exclude closures
H1
2002
H1
2000
Change
%
Continuing revenues $m
189.3
329.7
(42.6)
Ad page volumes – Month of June
2,015
3,585
(43.8)
11,615
18,992
(38.8)
Ad page volumes – YTD June
United Business Media
40
CMP Media US Revenues
2000 restated to exclude closures
Twelve months to 31 December
2001
$m
2000
$m
As reported
501
741
Titles and events closed
(43)
(88)
Continuing revenues
458
653
United Business Media
41
Semiconductor Worldwide Market
Three Month Moving Average
$Bn’s
20
18
16
14
12
10
8
6
4
2
0
2000
Source: Semiconductor Industry Association
2001
2002
42
Semiconductor Worldwide Market
Three Month Moving Average
$Bn’s
2002 to end of May
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
Europe
Japan
Source: Semiconductor Industry Association
Americas
Asia Pacific
43
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
Turnover
CMP Media
2002
£m
2001
£m
Change
%
Underlying
%
136.5
219.6
(37.8)
(31.2)
CMP Asia
25.5
24.1
5.8
(7.7)
CMP Information
62.3
67.8
(8.1)
(5.9)
Total
Operating Profit
224.3
311.5
(28.0)
(23.7)
(9.2)
14.0
-
-
CMP Asia
7.7
8.2
(6.1)
(6.2)
CMP Information
Total
7.3
5.8
0.4
22.6
(74.3)
(84.3)
CMP Media
45
UBM by Revenue Type
Six months to 30 June 2002
Continuing turnover
15.2%
Other
Ad’
20.3%
High Tech
Advertising
64.5%
Information
Services
High Tech Advertising is currently loss making
United Business Media
46