Tag Archives: Reed Elsevier

United Business Media, Informa and Reed Elsevier results – the health of big B2B media?

I know. I’m a bit odd. But I love ‘results season’.

Watching the results come through from the big media firms you get a unique perspective on how the industry is shaping up. They give you a pretty forensic view of markets, strategy and platforms. An overview you never usually get unless you’re employed directly in those firms.

In previous years I have covered the results of UBM, Informa and Reed Elsevier individually on this blog. This year I’ve been a bit busy building our new business – The Media Briefing – so it wasn’t until today that I got a chance to catch up and watch the board presentations to analysts.

Each year I try not to read analysts reports or look at share-price movements. I don’t claim to be a financial analyst. Instead I am far more interested in:

  1. How the strategy is presented
  2. What levels of confidence are the management team giving off
  3. Which parts of the business show opportunity or weakness
  4. Are there any wider industry trends being highlighted

After watching the webcasts this is my feeling about the health of the big three.

Reed were the first of the companies to release their results. You can view the full report and view the webcast here.

Reed have been through the wringer in recent years. Chief executives have come and gone. Reed Business Information has been up for sale and then not. The company has spent big to buy a ‘non-traditional’ media company – Choicepoint. There have been continual questions about Reed Exhibitions…

All of this has meant that the analyst presentations have been made very much on the back foot.

This year Erik Engstrom was able to put on a more confident show. You could almost see his relief.

Broadly the company’s results were fairly static year on year with a small growth in revenue and a small decline in profits. On the surface, stable.

But under the surface there are clearly some big issues. The main one seemed to be the weakness of the Lexis Nexis part of the business and the high level of investment required. The legal markets are obviously still struggling, the Westlaw platform seems to be taking market share and their profits were down 12%.

It was interesting that the Choicepoint part of the business had managed to grow margins from 24% at the time of aquisition to a staggering 38% now. At the same time Lexis Nexis margins were just 14%.

So, what I took away from the Reed presentation was a perception of a company still very much in transition. Choicepoint and the re-bound of the exhibition business were collectively masking some deep underlying problems in Lexis Nexis and the continual re-positioning of Reed Business Information.

Informa’s results felt more predictable. They are still benefitting from cost control measures implemented across the business – especially in the events field where it is easier for a conference and training company to quickly cut marginal events and overheads.

Overall Informa had flat revenues but a decent growth in profits. Peter Rigby and his management team projected confidence and an uncomplicated outlook for the business. Clearly there are still challenges – for renewals in academic markets and Datamonitor sales – but this is a company firmly looking forwards.

They will continue to focus on large events, geo-clone successful formats to new territories and move subscription products up the value chain.

A theme that came from the presentation was that Informa were concentrating on premium intelligence and increasingly looking at enterprise sales of subscription content. I hear this more and more from business media companies as they search for the ‘holy grail’ of data and ‘workflow’ based products. The move from providing information to intelligence

All in all I felt that Informa were the strongest and most confident of the 3 companies.  They announced unequivocally that they “would have a good 2011” and that “interesting acquisition opportunities were opening up”. Their debt was under control and Adam Walker joked that for the first time in a long while the phrase “under-leveraged” had been used to describe them in an investor meeting.

We recently interviewed Peter Rigby on TheMediaBriefing and asked him what worried him most. His answer was geo-political risk and so I suppose that whilst the company seems strong he is keeping a close eye on events in the Middle East.

The UBM results yesterday (1 March) were the most intriguing. Last year I wrote about a company that was weathering the global storm pretty successfully. I suggested that they were transforming themselves steadily – and via a long stream of acquisitions – into an emerging markets exhibition company.

It’s pretty easy to understand the strategy here. Whatever is happening in individual business verticals it appears clear that the strength of growth over the next 10 years is going to come from the emerging economies of, in particular, the Asia Pacific and Indian sub-continent. Exhibitions are a market that really benefits from scale and by acting as a consolidator I thought UBM was putting itself in a good position.

A strategy of acquiring assets in these regions – as well as the Americas – seems sensible and David Levin has always impressed me as a no-nonsense leader of the business.


… looking at their analysts presentation today gave me some cause for concern. In spite of the company’s “fastest rate of revenue growth in a decade” their profits were flat. This was put down to an increasing investment in new products, sales and IT systems but I suspect it is much more than that.

There was an emphasis on ‘targeting, distribution and monitoring’  (PR Newswire) side of the business that I hadn’t seen before. I cannot see how the margins for this type of service are not going to be adversely affected by the easier distribution of information online and social media. In previous presentations I got the feeling that this service was not seen as core to UBM’s future.

Likewise the focus on virtual events and development of better marketing services with print and online platforms combining to generate leads for sponsors was different. I suspect that the old CMP business is really struggling.

There was also the announcement of the sale of The Publican (and some related brands) at what sounded a virtual fire sale price compared to the valuations it enjoyed relatively recently.

I suspect what has been happening at UBM is that everyone has been extremely busy running around acquiring and integrating businesses. I know from bitter experience what a time-consuming task this can be – especially in overseas markets – and it must have been a significant management distraction. One which wasn’t helped by the global downturn and writedown of the print portfolio.

UBM’s analyst presentation was by far the most confused of the three. It felt over-long and complicated. Sometimes less is more and the clear strategy that they had shown last year seemed to have been muddied.

David Levin also gave an exclusive interview to TheMediaBriefing in October last year in which he highlighted the fact that there would be inevitable ups and downs for the company. I can’t help but feel that UBM could do with a period of stability to really concentrate upon building a world-class emerging markets events business.

I admire the company and am a long-term shareholder but David’s assertion that the re-focus of the company was done had a bit of a hollow ring to it.



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7 strategic questions business media leaders should be asking

Over the last few weeks a major swathe of the quoted business media companies have been reporting their results. While I have covered some of them on this blog I have not done so from the perspective of a financial analyst. Instead, I find it fascinating to see the leadership teams of these companies present their strategy for their businesses.

Individually these results presentations tell a lot about how an individual business is shaping up. What are the threats to their traditional markets? How are they making the transition to a digital future? How strong is the management team? etc. What gets more interesting though is when you aggregate these presentations and try to distil some key themes from them.

So here I would like to pull out 7 key questions that I believe business media companies should be asking themselves if they are to prepare themselves for the years ahead.

1) What business am I in?

Before any company starts down this road it is probably worth reviewing your company’s mission statements, goals and values.  The media landscape has changed radically in the past 5 years. It will change radically again in the next 5 but there should be some key underlying themes that remain true and consistent. Try to document in real language what your business is and, please, don’t just sit there waiting for things to return to the past *cough, recruitment revenue, Centaur results presentation*

2) What does my company do really well?

It’s all well and good to have many spokes to your wheel and a multi-platform strategy is sensible. However, underneath that each company should be able to easily identify their key strengths. What do you do better than your competitors? What is your key advantage as an organisation? Shouldn’t you be spending a lot more time trying to build on those strengths and add complementary offerings around those particular skills rather than worrying about areas where you are weaker?

3) In which markets do we own brands with ‘last-man standing’ advantage?

In the UBM results presentation David Levin spoke about the business media industry being ‘over-published’ in many key verticals. He was specifically talking about print products but we all know that strong media brands don’t work with only one channel. In which media markets do you have real strength? Where do you own real brands rather than just products? Concentrate on those and get out of the markets where you don’t – sell them quickly (there are still plenty of buyers..), close them or accept that you are running them for short-term cash.

4) What is our emerging markets strategy?

Healthy business media properties rely on underlying growth in the markets they serve. Geographically it is clear that the major growth in the world economy is likely to come from the developing rather than the developed world. What is your company doing to benefit from these markets? What operations or partnerships do you have in the BRIC countries (Brazil, Russia, India, China) and other growth economies?

5) What are we doing to move up the value chain of information in our chosen markets?

In all but the most specialist markets, news is becoming commoditised. Businesses that in the past have relied on charging for news are rapidly finding that their business models no longer work. If you want to stay in these market sectors what are you doing to move your content and services up the value chain? Where are you able to add data and analysis to your content mix? What about the development of workflow solutions and software products? It’s not easy and is no quick fix but a drive towards higher value and renewable revenue streams should obviously be a goal for all business media companies.

6) Is my business structured for the past or the future?

In the UBM presentation it was interesting to hear Levin talk about a significant re-engineering of management teams in the past year. Whilst modern media businesses clearly still need a lot of the skill sets they always have – content development,  relationship building and talent management – increasingly technology is playing a much bigger role. Do you have the right people in place? Are there bottle-necks in your structures? Are there people in charge of business units who are responsible for making decisions on areas in which they have little experience?

7) Can I explain my company strategy clearly, simply and believably?

A couple of the CEO’s who presented their results recently gave me very little confidence in their company’s future strategy. While you don’t have to be a great presenter to run a great business; you do have to be able to give confidence to your customers, investors and staff that you have a plan about where you are going and why.  After the recent turmoil in many media markets I’m not convinced that some companies have made up their minds.

Here are 7 questions.

Any others that you’d like to contribute? Please put in the comments below.

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Thomson Reuters results

More results today – this time from Thomson Reuters.

On the surface they are fairly similar in trends to those of Reed Elsevier that I covered last week – pressure on headline revenues, significant cost cutting and highlighting the ‘late cycle’ nature of the business. However, when I listened to the results presentation this afternoon I came away with a very different perception of the business.

Whilst it is obviously a much larger business that Reed Elsevier, Tom Glocer and his team gave a very measured performance on their call. Their message was similar with the same period last year. There was stability and a consistent strategy of product investment for growth in the medium term.

Some of the things they highlighted were:

  • WestLawNext – Tom said that results were coming through well and that WestLaw had achieved it’s best sales in the last quarter since Q4 2007. He said that in a period of market difficulties that it was great for sales teams to have something new to sell. Since it launched earlier this year he claimed that 400 new sales had been secured in the first month and that he was confident of a significant uplift in market share.
  • Transition from print to online – In what sounded like a bit of dig at the competition Tom said that they had been slower than organisations like LexisNexis in transitioning products from print to online. He inferred that LexisNexis had made a mistake in abandoning print aggressively and early. He said that Thomson Reuters had ‘managed the transition without the chasms of profit drop out’ and that there were elements of their portfolio that remained better suited to print.
  • Utah – Thomson Reuters’ new standardised desktop platform was another example of the company’s investment. It was running a bit behind schedule but currently ‘in alpha’.

Overall, I took away  a lot more confidence in Thomson Reuters’ strategy than I did from the Reed Elsevier call last week. They obviously still have a lot of market pressures on various parts of their business but the positioning of the company for growth in 2011,2012 and beyond sounded believable and robust.

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Thoughts on the Reed Elsevier results presentation today

It’s results season again and one of the biggest business information companies have just announced their results this morning. Reed Elsevier are an organisation that have really gone through the mill over the past couple of years. Let’s remind ourselves of what has happened in this venerable company:

  • 3 Chief Executives – Sir Crispin Davis left this time last year to be replaced by a non-media man, Ian Smith. Ian lasted just 9 months and was replaced by Erik Engstrom the head of the Elsevier division.
  • 1 huge acquisition – Choicepoint at a relative high point in the market
  • 1 failed disposal – the Reed Business Information business was publicly put up for sale, then withdrawn from sale and now seems to be being sold off piecemeal
  • 1 major notes issue – to reduce debt after the acquisition of Choicepoint and failed sale of RBI

Torrid times for any company – even one with a solid range of defensive subscription income.

On the surface of things the results that they announced today seemed not too bad but having listened to their presentation webcast this morning it is easy to see why they have under-performed the sector by 30% since the start of the global downturn.

It is clear that the changing strategy in relation to RBI has been hugely damaging. A business that was already in severe structural decline was left rudderless during the prospective sale. It has then had to radically cut costs in the face of a collapse in revenues (18% down on the year). I would imagine that it has been a brutal time to work there and the continuing uncertainty of headcount reductions, closures and sales cannot be providing a great environment.

Even worse than the performance of RBI has been the downturn in the Reed Exhibitions markets. Here revenue is 22% down on the year which is not really surprising given that a lot of exhibiting companies would have been making re-booking decisions during the high-points of market uncertainty. Erik was keen to emphasise that the problems in exhibitions were cyclical rather than structural. This is partly true but once large companies have taken a decision to drop from major industry shows it is often hard to get them back.

Whilst the poor performance of RBI and RE had been flagged up and was expected, the real underlying concern I picked up from the presentation was the longer term worry about LexisNexis. It wasn’t stated but there seemed to be a general feeling from the Q&A that there were severe competitive pressures on the LexisNexis platform as a result of the Thomson Reuters investment in WestlawNext.  I suspect that this is causing them a lot more concern than they were letting on.

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Knowledge driven solutions – the growth sector of business media?

354644527_356eea99742In my last post I had a look at Reed Elsevier’s results presentation and suggested that the real growth area of business media was in building tools and workflow solutions for customers. It is an area that a lot of B2B media companies highlight as part of their strategy and an area that I was working to develop with Incisive Media before I left the company.

Whilst you will hear plenty of senior publishing figures talk about ’embedding their products in their customer’s workflow’ & ensuring that they are providing resilient ‘must-have’ information; in my experience very few of the people working in business media have much of an idea of what this involves. 

I do not claim to be an expert on the subject but my interest was really piqued at an e-Publishing innovation forum which my division organised in May 2008.

One of our presenters, Josh Bottomley, MD of LexisNexis, explained how his company had evolved from providing information in print; to print and online; to print, online and knowledge driven solutions. Josh showed several examples of how these products were developed and the commercial results in terms of subscription fees which could be charged and renewal rates that were achieved when you get these products right.

One example I remember him using was for the process of residential conveyancing. He showed a flowchart of what was involved for a solicitor undertaking this task on behalf of a client. The flowchart mapped all of the forms that needed completing, in what order and with the relevant points where they had to go outside the firm for relevant bits of information – land registry searches etc. A lot of these tasks were relatively menial but time consuming and each was being carried out in a fairly regimented fashion over and over again. By spending time with solicitors to map this process LexisNexis could start to look at ways in which they could automate and speed up the tasks.

Josh explained that the process was very much an iterative one. Researchers sat with clients to watch and document all the tasks they undertook. These were then presented back to the research participants in a flowchart to check that nothing had been missed. The agreed flowchart was then used as the basis for creating a technology driven solution – ideally embedding some of the proprietary data that LexisNexis already held – that could be presented back to the client on a subscription basis.

The aim was to create a product that sat on the desktop of their community. A product where it was easy to demonstrate the ROI of their spend. A product that their community couldn’t do without – real ‘must-have’ information.

Josh was at pains to point out that just producing a fantastic product didn’t guarantee its implementation. A large part of LexisNexis’ job was to push the concept of behavioural change within the end-user organisations. However, when they worked, these knowledge driven solutions were incredibly successful.

It was interesting that Sir Crispin Davis highlighted this area as a real focus of investment at Reed Elsevier in his results presentation – specifically mentioning a research performance visualiser for academic institutions and a tool for the health service that allowed easy ranking and trend information for the performance of their staff.

I believe knowledge driven solutions may well be a phrase you hear a lot more about once business media companies are able to come up for air. As news distribution, recruitment and advertising models struggle to grow – even in buoyant markets – the search is on for an area of reinvention.

Subscription based workflow products could be the solution.


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Listening to the Reed Elsevier results presentation




Over my years in business publishing I have always loved monitoring the reporting season for publicly quoted media companies. You gain an enormous amount of insight into the broader trends in the industry & it gives a much better perspective into the general market conditions – away from your particular coal face.

Today, one of the largest business media companies – Reed Elsevier – announced its results and Sir Crispin Davis, their outgoing CEO gave his commentary on the numbers. For anyone involved in business media it’s worth a listen.

Reed Elsevier is obviously a robust and well managed company. Their results today, and the reaction of their share price to those results, clearly show that Reed is a lot more resilient to market conditions than other business media organisations.

Why is this? 

Sure, they have scale & a depth of resources but ultimately they are serving many markets that other publishers also try to serve – the legal sector, pharma, insurance etc. It’s just that they are serving these communities in a very different way.

The vast majority of Reed Elsevier’s revenues and profits do not come from a ‘buyer meets seller’ introduction service that a lot of publishers cling to. Instead they are providing valuable data and workflow solutions that help their customers do their jobs better, more efficiently, with more transparency and faster. 

This is the growth sector of business media. This is the reason that Reed Elsevier have been trying to sell RBI. And this is the reason why they have announced today that they are taking £100m of costs out of the RBI business between now and 2011 in further preparation for a sale.

I wouldn’t be surprised if next time the sale comes around Reed Exhibitions aren’t added to the pot.


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