Informa plc (INF) Earnings Call Transcript & Summary

Good morning, everybody. And for those who are here today, thanks very much for joining in person. For those who are on the live stream, welcome to our half year results, which we announced this morning. And hopefully, some people have had a chance to read it. I'm going to give you a quick canter through an update and then try and use most of the time for questions, if we could. Just to kind of step out to step in, this reminds -- this is designed just to remind us why we're in the markets we're in. These are the 2 markets we operate in as a business, B2B Live Events and Specialist Knowledge. I just wanted to pick out 2 points on both as to why these are good markets with good macro conditions and forward runway. On Live Events, there's absolutely no doubt at all that specialist market categories are in growth. You'll see it later if you just stop and look at our portfolio. We're servicing at-scale markets that 10, 15 years ago, when I started trying to do this for living, didn't really exist as markets. And that methodization of market categories and extended supply chains provides us with significant forward growth potential. The other side, which maybe we didn't predict so much, but really is coming home to roost is the power of live for those of us who did watch the World Cup with enthusiasm. Live events in sport and entertainment, in music and in business are having more and more traction, more and more value and more and more uniqueness. Lots of reasons for that. We can get into it, but there's absolutely no doubt that live is a great market to be in. On specialist knowledge, trust and trusted content, the more knowledge that's available, the more important finding trusted content is. And beyond trust, the thing that really matters is verification and authority. There's endless information supply. The question is which information are you going to pay attention to and which information comes with validation and authentication. If you're in both of those markets, we've chosen to hang out in some 2 pretty good neighborhoods. And so how good is the house? If we're in 2 good neighborhoods, how good is our house? Well, we think our house is pretty good. And I think you see it in our numbers today. I would -- if you wanted a single word to sum up our performance today, I would say it's a living demonstration of resilience. And there are many bricks in the wall that give us resilience as a business. We have a brand portfolio, which I'm going to come back to, which is certainly in the markets we're in pretty close to unique. We are genuinely an international business. We operate at some version of reasonable scale in about 26 countries around the world. And if you operate in the world, you know there is volatility. Much discussion for understandable reasons about the volatility in the Middle East and in particular, in how that impacts one country in the Middle East. But there are many countries in the world and certainly in most years in which I've been doing this, there's volatility somewhere in the world. So breadth really matters. If you're going to have a portfolio, try and have leading positions, that makes a big difference. It gives you a competitive advantage. And then most of all, the increasing importance of audience. We started out as a space business. We're migrating to becoming an audience business. And to be an audience business, you really need data. And our investment in data and understanding what our customers are doing, what our buyers are doing, what our sellers are doing is really allowing us the opportunity to bring additional products and services to our customers. Many years back, we wrote down after an intensive internal work exercise, 3 words that we thought would summarize what it is we do. Champion the Specialist. It's not quite putting a man on the moon, but nevertheless, it sums up the essence of what we do. And specialism is a fantastic set of markets to be in. Generalism is a bit out of fashion, specialism is highly in fashion. If you can be a mile deep rather than a mile wide, you can build moats and boundaries around what you do, and that gives you both advantage and protection. And that really has been a very strong North Star for us over the period. This is the shape of the business that we now are. We are predominantly now a B2B business. That wasn't the case back in the day. We still have a very significant position in the academic markets business and a growing position in B2B digital services. Geographically, we are in absolute terms, nearly 50% an Americas business. I've just come back from spending a chunk of time in the Americas and the American economy right now is basically pretty strong. We've built our position in Asia. We've built our position in Europe. We've built our position in EMEA. And as a net consequence, our position in the United Kingdom is becoming an increasingly de minimis part of the group. Our market vertical position has expanded to my earlier point, as markets have arrived or we've decided to go into different markets. And I often say to potential investors in the company, it's often worth looking not at the markets that we do serve, but the markets that we don't serve because generally, we've tried to focus on industry verticals that provide for us the fertile ground where we think we can be the best version of ourselves, particularly in B2B, large markets, international markets, high-margin end markets, very, very extended supply chains, diversified supply. And if you get that lined up, that makes our product really very attractive. This is just a great slide if you do what we do for a living. There are only 5 brands on there that we owned when we started out on this journey as a company. And if I went through each of those 5. Anti-aging today is 12x what it was back then. SuperReturn today is 22x in revenue, what it was back then. Monaco Yacht Show is 3x what it was back then. Middle East Energy is 2.5x what it was back then. And the other 45 weren't brands that either existed in some cases or were ours in some cases. This is an absolutely world-class portfolio of brands, markets, categories and geographic positions and provides us with a real position, both in the ability to retain and attract customers, but also to retain and attract clients. Look here in the half year, if you just take these brands that have run in the first half of the year, Cannes Lions, which some of you were at, WHX, which some of you were at, Natural Products Expo, which some of you are at, Money20/20 in Europe, which some of you were at CPHI in China, which I suspect a few of you are at London Tech Week actually, which has been a lovely brand that we bought out of administration and turned into a real thing and SuperReturn, which literally lived up to its name. It was super and the returns were okay. And if you added that up, that's nearly $1 billion of revenue just in those brands alone. And the franchises that they afford us around the world is really quite something. That's what adds up to our half year performance. And I think we're pleased with where we are. It's been a volatile 6 months in 2026. And if someone had told me in late March, early April, this is where we'd be at the half year, I'd have more than taken it. 6.8% underlying revenue growth. Our profit is slightly ahead of our underlying growth, which is really quite an achievement because we've had no revenues in the Middle East, and that really speaks to the underlying gearing in the business in the first half. We've had strong performances in both our main businesses, live events and in academic markets. You can see the cost of running all of our businesses in the Middle East with virtually no revenue since March in the profit comparison in -- on the reported numbers, where we're slightly behind where we were this time last year. And actually, if you just flick those numbers, then our underlying profit this year would have been nearly 10% at the half year rather than 6.9%, but still a very robust performance given where we are. We've got very, very good full year visibility through to the end of the year. Our balance sheet is in good order. We're reaffirming our guidance. And on shareholder returns, we've taken our buyback up again for this year. We still believe our shares afford a good return, and therefore, we're happy to be a willing buyer, and we've increased the interim dividend in line with our performance at the half year for our dividend-orientated shareholders. In B2B Live Events, 8% growth in the half year in aggregate, varies a bit depending on where you are by geography, by category, by brand, but very strong performance. And the strength has been pretty universal Actually, if you look at it through a geographic lens, it varies more by some individual categories, which maybe we'll get into in questions. The second half matters to us and actually in a good way. We see that accelerating in the second half, which will be helpful because it will take us strongly into the beginning of 2027. But net, we enter the second half of the year in live events feeling good about what we're doing. As those colleagues on the live stream or in the room will know, these are -- this stairway to heaven for our B2B business is really just how we're knife and forking our way through our planning, our approach to brand development and market position. price for value, look at the markets we serve, see what level of penetration we have got and how much more we can get. Look at what we can do in geo expansion, whether it's brand expansion or syndication or doing more with global cities, which really is becoming quite a power lever for us as a company. Taking advantage of capacity and supply where it's coming into markets, which it is, really driving value into attendees. That was a Rubicon, which 10 years ago, no one was crossing. You can charge people to participate in a B2B event. Ticketing didn't feature. Now it does. And then there's more value you can bring to your attendees if you've got the data and you understand your audience. And then what more can you do around an event to blow out and glam up the reality of being a participant, an exhibitor or a sponsor. So there are routes to revenue. We're not doing them all of the time, every day in every brand in every country for every customer. But the good news is we're not doing that yet, but that doesn't mean we can't tomorrow. So there's a real opportunity for further expansion. Geographically, we're pretty much everywhere we'd want to be. We've got no need or desire to buy another business to give us a platform to operate geographically. And so now in M&A, we're focused on category and market vertical expansion or brand expansion. And I think that, that is serving us well. Just to double-click on what's actually happening in the B2B market given what's going on in the Middle East because this will be a question. So -- please take this as your answer, so I might refer you to see Slide 11. First of all, as you can see in our numbers, when you find yourself in that situation, well, what do you do? Well, you make everything else work harder. So you seek to deliver outperformance in other markets, and you can see us doing that. Secondly, you see what you can do in terms of performance in those markets with domestic brands and with intra-regional participation because where we are seeing participation leakage, it's not local or intra-regional, it's international. So can you swap out local and intra-regional for international? Thirdly, double down on future business return through not doing what some people are doing, which is reduce your headcount, reduce your costs, exit the market, remove your brands and run for the hills. Because that might serve you well for a month or a quarter, but it doesn't serve you too well for 3 years or 5 years, and we're building this business for the long term. Fourthly, defend the long-term value of the brands. I say all the time to shareholders, this is an annuity business. We do this well. We do this right. You're looking at a business that will recur for 5 years, for 10 years, for 15 years, for 20 years. That's where the real long-term value is. And to do that, you need to look after your brands and how they're judged and within that, your customers. And as a practical matter, that means being very, very close to your customers and where needed, providing -- provide them with contract flexibility or rollover options or future credits in order to not feel that they're being strong armed to participate if it doesn't suit their commercial position. That's our approach. It's serving us pretty well. And then on top of that, we're using our relationships and our market position to reschedule the brands, I think we're a bit -- the battery is a bit dead in this, to reschedule the brands from the first half to the second half. And this gives you a sense. There are about 65 events that we're going to run in the region. The other thing I would say when people say to me, what's going on in the region. The region is a big place. And what's happening in India is completely different from what's happening in Egypt, which is completely different what's happening in Nigeria, which is completely different what's happening in the UAE. So you've really got to forensically unpeel that onion. We've got about 65 events that are running in region in the second half, and there are about 7 of those that are scale events that are running in what you might call the more directly impacted markets, just to give you a bit of a flavor. The first 2 events of the taxi rank for us in the second half of the year, in region are Middle East Energy in Dubai, at the beginning of September and almost exactly coterminously our Future Technology Event Leap in Riyadh. And both of those are kind of in market and trading as we speak. To switch into academic markets. And this has really been a second or third improving quarter in a row or half in a row. Penny and the team are really getting into their strides, strong underlying growth in the first year, just over 5%. Some of that is phasing, some of that's prebooking. Some of that is a function of some things that will not recur. But the underlying shift in this business is this has gone from being a 1% to 2% growth business to being, hopefully, a 4% plus growth business. And I'm pretty confident that we can get this to our 5% minimum threshold by 2026 -- sorry, about 2027. We're investing in this business. We see an increasing demand for trusted content. As I said in the opening validated, authenticated content. We're investing in international sales because we think here we can do more in geo expansion, a bit like we did in B2B, and we were a little bit cautious in academic. So we think there's an upside there. We think we can do better in some underserved and unserved market segments, as described here, corporate and prosumer. It's one of those words that probably won't make it into popular language. But nevertheless, it's a segment that we can serve and we can serve well given the nature of our content. And we're also investing in our own platform capability to make it easier for customers to discover, to use, to share and to work with our content. The ambition for this business, we've laid out very clearly, this is where we were. This is where we are. This is where we're going. Those are the building blocks and underpinning it is turning this business into a knowledge platform that allows us to demonstrate progress in each of these areas, more volumes, more product, more a focus on more markets and not just the librarian, but adding customers and market. segments, making it easier for people through technology capabilities to discover and use, to maybe reshape the culture a bit, the culture is very strong in Taylor & Francis, but making it a bit more customer focused, a bit more market focused, a bit more commercial and at the same time, simplifying how we operate and being a bit more commercial on cost management, vendor consolidation and the input side of the business. And all of that discipline is adding up to a consistently better performance. And that, alongside what we're doing in our B2B markets business is really what gives us our half year number. Our latest venture, our newest venture, Informa TechTarget, shades of British Rail for those of you who are as old as I am, it's getting there. This is not yet doing what we wanted it to do when we acquired this business or created this business. Lots of reasons for that, some of it to do with AI displacement revenues. Some of it to do with the challenges facing the U.S. enterprise technology market. Some of it to do, frankly, with us getting it in the way of our own knitting and some of it to do with the complexity of a multilayered combination. Put all of that in the operational blender, you end up at minus 1% rather than plus 6%. And that differential in revenue terms actually is about $30 million to $50 million of revenue. It's not a mountain that we can't climb but it's $30 million to $50 million of revenue that's in the wrong place. The growth rates are leveling out, all the negative growth rates are leveling out. We've got a simple target for this year, get it into growth. And then we're planning how we get into '27 and get this business to begin to do what it was designed to do. Do we think the fundamentals are still there? We do. And what we need to do is get to a point whereby that's visible enough to shareholders for us to regain their confidence in our judgment in that market. Underpinning it all, this is probably the most important thing going on inside the company at the moment and the good thing about it is it was going on inside the company last year. It's going on inside the company this year, it will be going on inside the company next year and the year after. If you go back to my brand slide, if the battery is now working, which it is, when you go from 3 or 4 brands to 500 brands at pace, as I often used to say to people who were considering joining our company, particularly in senior roles and particularly in technology and system roles, I make no apology for the fact that as a business, we learned to run before we could walk. When you do that, what you find is that your back office is not as robust as your front office. That's the price you pay for accelerated acquisition-led growth. The question is, how do you then reverse engineer the back office and the platforms to enable you to get even more out of the front office than you're getting just from a sales and commercial-led business. That's really a large part of what's behind One Informa. What do we do in order to provide platform capability, system ability horizontal capability in everything from data discovery, data capture, data usage, new product development, marketing platforms, sales platforms, brand development, and more recently, how do we use AI to accelerate that, which actually for us is probably a net benefit because one of the only advantages of being late is that technology then comes along and allows you to do it cheaper, quicker, better. And if we do that and we bring those AI-empowered enhancements to our operations, One Informa will give us a better bedrock to further enhance the front office performance. In summary, this is where we are. The One Informa program continues at pace. It's putting stability and performance and maturity and capability into the hands of teams at a time, brands at a time, geographies at a time. We are keeping a weather eye on our top line because absent growth, nothing happens. We set ourselves a threshold, have never dropped below 5%, and we're knocking that out quarter-on-quarter, half-on-half. We still think our shares are not at a point whereby they represent an appropriate value equation, and therefore, we're a happy buyer, hence, the increase in the buyback. Our B2B Live Events business is our biggest engine, so it needs to grow at the fastest rate. The market is growing at about 5%, 5.5%, we're the biggest player. We need to beat that. We're targeting ourselves 7% plus for the year. We did 8% at the half year. We want T&F to be a reliable 5% plus growth business, so it's not a drag on our growth ambition. It's getting there. TechTarget. I've talked about, we need to make that a growth business because then you get the benefit of the operational gearing. And all of that then flows through to EPS growth which we want to see continue coming for our shareholders. Looking forward, what do you see? In '26, we can see about 85% of our revenue. That means we can all focus on the 15%, which shouldn't be too difficult. Our subscription revenues in academic are way ahead of where they normally were. That's part of the operating discipline that Penny and the team have brought. And actually, looking into '27, we can already see about $800 million of our '27 revenues which is a nice position to be in as we begin to plan for '27. And for those of you who follow the company and have done for a long time, you'll know that uneven years are bigger years for us and even years because of the return of our biennials, which are all conveniently in uneven years. And the biennials sort of, not surprisingly, tend to be higher-growth businesses, partly because they only happen every 2 years. So the level of pent-up demand is a bit higher. And so you don't just get a cash lift. You also bring into the portfolio, big brands that tend to perform at a slightly higher growth pace performance. We're always keen to meet our investors. So we did a field trip to the NRA Show in May, which I was not at, but apparently was a really outstanding brand and performance, and I gave a real insight, I think, how for many big food brands, household food brands, brought to life the power of a trade show at scale in a key market. And then for those of you who have never been to a CPHI event, that really is well worth the time. Milan is so tricky to get to. And it's -- I think I'm correct in saying our single biggest brand is the meeting place for that industry, which right now is a real feature of innovation and new product, and it's a really great way to see what we do live. That's where we will throw down to questions.

Who would like to go first? We could run an auction. We'll take questions in the room first, and I think we'll start over here on the far side, if you don't mind. The lady in white is [indiscernible].

Annick Maas from Bernstein. I think My 3 questions are for Gareth, sorry. The first 1 is on T&F and the Anthropic court case that was settled with publishers. I think depending on the assumptions you take, you will benefit from 25 million to 50 million. I was wondering if you could just give us an idea of where in that range we will be and how it will be accounted for? I have other questions as well.

I think what we would say is we're still working through that. There are various variables in the numbers in terms of what titles are in there, what are the costs, et cetera. So we're working through that. We deliberately haven't put a number in this deck or these results for that reason. We'll update you in the second half of the year as the number becomes clearer. But I suspect there will be a number in our second half results for the settlement. We're working through the accounting, but I think it's, at the moment, I don't think it will be revenue. I think it's a settlement number. So we don't change our full year revenue outlook for Taylor & Francis. But as Stephen has mentioned, we're confident about an improving performance in the business on a full year basis in '26 versus a full year basis in '25 regardless of that.

The rest is for B2B markets. So I understand you're still negotiating with some exhibitors that were due to attend this year, and they now want to maybe switch to next year. If all of those decide to not stay in this year and move into next and vice versa, if they all go, does that mean you have revenue upside or downside to your guidance for this year?

We've accounted for what we know at the moment in terms of our potential revenue deferrals. I mean you're right, there is some revenue deferral from existing customers. There's some revenue deferral for launches that we had planned to make in 2026 that we're now not going to launch in 2026. We'll do those in '27. But on the other hand, we're also still working hard to identify opportunities and there are 1 or 2 opportunities to do targeted, in-country launches in the second half of 2026 that we're looking at both in the UAE and in the Kingdom of Saudi Arabia that where we think could come to fruition. So. We're still working hard to maximize the '26 revenue outcome. But we've accounted for what we know and what's visible in the fact that we can meet guidance at the moment.

Okay. My last one is easy. China, you mentioned in the release, does that mean that China is now growing? Or what...

China is performing as we thought it would at the start of the year. We never needed a big uptick in the performance in China to get to the guidance for the full year, and it's pretty much performing in line with those projections. I mean the bull case on China would be a lot of the trading is in the second half of the year. So it's still to come. And therefore, we'll hope for a better outcome, but we don't need a better outcome. It's in growth, but relatively low levels of growth lower than it's done historically as in going back a couple of years, but consistent with where it was, say, in 2025.

It's James Tate from Goldman Sachs. Just a couple of questions, please. I guess, firstly, on the Middle East as we start to think about 2027, could you just talk about forward bookings for the shows scheduled through '27? How are they looking now versus historically at this sort of stage of the year? . And just to follow up on that, I guess, there's a lot of variation by show, but how are forward bookings for the shows running this year tracking into H2. So is around 10% down, a fair assumption or some tracking better? And I guess, secondly could you just comment on the level of pricing growth you're putting through this year for 2027 events? It's around 3% to 4% on average about the right ballpark?

Everywhere or in the Middle East?

Everywhere.

Probably maybe a bit less depends because China is not really a price-led market. So if you took everywhere, the number might be nearer 2% to 3% than 3% to 4%, but it might vary depending on where you are in the world. If you're just thinking about space pricing, which I think you are. Forward pacing for '27, pretty good. You see that in our forward booking number. It's pretty similar. I don't know, Richard, 800 versus this time last year's, It's just slight -- H1 is I think it's slightly ahead of where we were this time last year. I don't know, to be honest. I don't -- but I -- there's no significant variance number that's sort of flashing in my mind. So I don't think that's an issue. -- brackets yet, close brackets, but not a visible one. What was your other question?

The Middle East shows that are running in H2. So how do you expect them to run versus last year in terms of revenues?

Look, there is such a difficult question to answer without turning this presentation into an operating review brand by brand and country by country because what's going to happen in India is going to be totally different than what happens in the UAE to what happens in KSA to what happens in another country. And then within that, to the point Gareth made, we've got an event coming in Abu Dhabi, I think, on the 29th, 29th of September LIVEX, which is a investment livability Summit. I think we've got 20,000 attendees, registered about 50 exhibitors. Last time I looked at it, we got 50 country participants. That is going to have a completely different profile of attendees than Middle East Energy, which is going to be more -- has got a bigger international profile and that the decline rate is probably higher. Saudi Arabia, I have a strong confidence will be pretty robust year-on-year. So it varies really by geography and by brand. But in the round, I think we can -- what we're really trying to communicate today is based on what we know today, we can see a way of navigating it through a combination of all the things I said on Slide 11, which is you outperform where you can in other markets. You bring new product to market, which might be a bit more domestically focused, which might compensate for some of your rollover. You roll over into '27, which actually should help '27 numbers, where you need to, and net, that should end up being an outcome we can all live with.

Will Larwood from Berenberg. Just firstly, in terms of are you seeing any sort of delays to supply coming online, particularly in the Middle East? I know that was a key point that we spoke about at the CMD. Secondly, you called out sort of further looking at other licensing deals for data in Taylor & Francis. Just wondering if you could provide some more color there, particularly what you're seeing in regards to pricing? And then finally, just in terms of -- I was wondering if you could give us a margin -- a guide on the margin, particularly given the moving parts into H2 for the full year. .