Today it was the turn of United Business Media (UBM) to release their results. I was expecting UBM to have been hit harder than most during the downturn – given their exposure to the events industry and tech magazine publishing in the US.
However, their overall numbers came in a lot better than analysts had expected and their share price received a significant bounce this morning as a result.
UBM’s CEO, David Levin gave a very confident and strong presentation this morning. He spoke a lot of sense explaining the nature of the business that he was trying to build and saying that the world had changed. He wanted analysts to stop looking to the past and instead to concentrate on where UBM was going.
A few highlights of his presentation for me were:
- UBM’s biggest activity is in the events field but they are a very different business from Informa, who also released their numbers this week. Whereas Informa is largely a conferences business UBM is clearly exhibition led. It is important to understand the difference between the two. Large exhibitions businesses generally have significantly higher margins than conferences and benefit from greater forward visibility of earnings from stand re-bookings.
- In spite of the global downturn UBM have been very actively developing their events portfolio in emerging markets. In 2009 the company generated 20% of group profits from activities in China and China was their largest single market. They have successfully made the jump that a lot of media businesses have tried to do away from declining, and more crowded, markets.
- David pointed out client spend on stand bookings for exhibitions had been ‘rock solid’ during the past year. This made up c. 80% of their events revenues. The remaining 20% – sponsorship and attendee revenue – had been hit much harder. He showed some strong figures to back up these arguments although I do wonder about how successful their re-booking was in 2009 during the height of the market turmoil. Maybe there is more to come out here?
- For their print publishing operations – the old core of UBM – David was very clear that many of their B2B markets were over-published. UBM had closed 31 titles over the past 12 months, seen revenues contract dramatically and cut a lot of costs. Whilst he argued that there was still a place for print in the mix David said that we would rapidly move to a situation of ‘the last man standing’ in individual verticals. Unless you were a leader, or strong number two in a market with good dynamics you were unlikely to prosper.
- It was clear that there had been a significant overhaul of the divisional leadership at UBM. They explained that in the past they had a lot of media people making decisions on technology developments and inferred that they hadn’t been qualified to do so. Their emphasis over the past 18 months had been to bring in more people from a technology and web background to aid their evolution.
Overall, these were clearly a good set of results. UBM had managed to clear up some long-running tax issues, highlight the success of their acquisition policy, expand their operations in high growth markets and largely move away from the past. They are clearly prioritising further opportunities in the exhibitions space and explained that this market was highly fragmented and ripe for further consolidation.
It will also be interesting to see what the lead player in the market – Reed Exhibitions – decides to do.
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