Earnings Call: H2 2013

Feb 21, 2014

Summary

2013 earnings rose 5%, adjusted EPS reached 40.1p and cash conversion improved to 99%, despite Business Intelligence contraction. For 2014, management targeted measured operational change and sustainable growth, without specific guidance.

Good morning to you all. As some of you know, I have been the Chairman of Informa since 2008. I normally leave the results presentation to the executive team, but I felt it was appropriate today to stand up on this occasion, given the change in leadership that took place at the start of the year. First up, I would like to say a special thank you to Peter and Adam for all their contributions to Informa. In particular, Peter, who has been the Chief Executive for the last 25 years. Following such a long-standing CEO is never going to be easy for anyone. The board were very cognizant that a successor would need to have good experience of the media and technology space, strong leadership skills, and an international perspective. Also a very strong understanding and sympathy for the culture of the people at Informa. We are absolutely a people business, and to transition the business effectively following the long stewardship, ensuring continuity and commercial stability will need the full appreciation and respect of that. We are therefore delighted to appoint Stephen to the role. He very much ticks all those boxes. As I am sure you know, he has very relevant and broad experience across the corporate regulation landscape in media, telecoms, and technology. Stephen also has been on the board for the last three years, making him somewhat of an insider as well as an outsider, something I think that will prove invaluable. As the insider's outsider, he therefore started the role with good momentum. I would stress, especially before your questions, that he is only officially been in the job for 40 days. While I am sure he will give you an early sense of the business that he sees, he is clearly not going to be able to give you all of the answers, but will no doubt be able to do so after today. 2013 financials are obviously the fruit of the previous management team, but I am pleased to report another solid year of earnings and cash generation for Informa. I am pleased that Gareth Wright, our Deputy Chief Financial Officer, is here to talk you through them in greater detail. Over to you, Gareth. Cheers. Thanks, Derek. Good morning, everyone. My name is Gareth Wright. I am the Deputy Finance Director at Informa, and as Derek said, I am going to talk you through the financial results. The 2013 results represent another solid performance from Informa. They have been delivered against a backdrop of not the easiest trading conditions, especially for our Business Intelligence division, as well as the degree of uncertainty in the second half of the year caused by the CEO transition process. I am pleased to report that we have delivered a 5% increase in earnings, with adjusted earnings per share improving to GBP 0.401, which is marginally ahead of consensus. The ability to turn OP into cash is a strength of the group. It has been demonstrated again in 2013 as operating cash conversion has improved to 99%. Organic revenue growth of 1.5% is ahead of the 1.1% year-to-date growth reported in the Q3 management statement, thanks to improvements from our Academic Publishing and Global Events divisions in Q4. The group's balance sheet remains robust and healthy. The ratio of net debt to EBITDA is 2.2 at the year-end, a level we're very comfortable with. The full-year dividends increased to 18.9 pence per share, a 2.2% increase on the 2012 payout, a payout which was set against a full year of profits from corporate training. The 18.9p payout leaves our dividend cover slightly lower at 2.1 times continuing earnings. Moving to the income statement, I'll start by talking you through the revenue and adjusted operating profit results by division. Before we get into the detailed results, I wanted to comment on the changes in the names to each of the divisions that you're seeing in the press release. The key message is there's been no change in the distribution of the businesses between the divisions. What you've modeled is directly applicable to the results as they're being reported. Starting with Academic Publishing's results, the full-year organic revenue growth of 5.3% is driven by a strong end to the year, particularly in the U.S. books business. However, we think there may have been an element of phasing in this result based on the slightly weaker than expected books revenue result we saw in January. The 2013 Academic Publishing operating margin is 35.7%, lower than in 2012, as we'd flagged previously, for four main reasons. Revenue mix, with more revenue growth coming from the lower margins books business. The impact of the medical books transfer, which was transferred from the Business Intelligence division at the end of 2013. We've added a large number of society journals in Academic, which was good business, come at a slightly lower margin. Finally, the biggest factor, the Cogent OA startup operation, which has staffed up across 2013 and launched at the end of the year. Moving to Business Intelligence, the full-year organic revenue decline of 3.9% was a little behind our expectations after the 3.6% year-to-date decline we saw in the Q3 IMS. The reality is the fourth quarter has not seen any great improvement in our two key verticals, pharma and financial, and we continue to see subscription negotiations taking longer to close. Following down from the revenue contraction, the Business Intelligence operating profits decreased year on year. Finishing with Global Events, the full-year organic growth of 3% represents a mix of large and e- Exhibition events where we're seeing high single-digit percentage revenue growth, and small local language conferences where revenue fell in 2013, reflecting weak demand and a proactive reduction in volumes. The number of large events increased almost 8% in 2013, demonstrating both our organic growth strategy and our targeted acquisitions. The most significant example of the decline in local language conferences is in Europe, which has resulted in the impairment that I will outline on the next slide. Finally, the 2013 operating profit margin for Global Events has improved year on year, reflecting the change in the mix of trading. The revenue growth is coming from high margin, like exhibition businesses and large events businesses, and the revenue decline has occurred in the lower margin small conferences businesses such as Europe and Australia. If we move down the income statement from adjusted operating profit, we get to other adjusting items, which at GBP 83.7 million, are similar in quantum to 2012. The details of these items are analyzed out on page 27 of the slide deck providers. There are three key areas I want to focus on, but before we get into the detail, I want to emphasize there are no incremental cash outflows as a result of any of these three exceptional charges. We'll start with European conferences, where a challenging trading environment has continued to impact the financial performance of the business during the year. In response, updated long-term projections have been produced, which have resulted in an impairment of the carrying value. Despite this impairment, we continue to believe that Informa has a future operating profitable events in Germany and the Netherlands. It's worth noting this goodwill mainly arose from the IIR acquisition in 2006, an acquisition which in totality has delivered post-tax returns in excess of 10% each year. We've also impaired certain software intangible assets which were capitalized as part of a multi-stream IT project. Technology has moved forward faster than expected, and the main systems introduced in the project will not be used after 2013. The carrying value of the assets was reviewed as part of the year-end process and has been fully impaired. Finally, the Robbins Gioia loan receivable, which arose from the disposal of the group's shareholding in RG in May 2012. Following a review of RG's financial results for the second half of 2013 and projections for 2014, the decision was taken to provide for the loan in full. However, the group still intends to recover as much value as possible from the loan receivable, and we are remaining in close contact with RG management as they look to improve the business' prospects. Net interest fell year-on-year due to the expiry of the last of the interest rate swaps entered into at the time of the Datamonitor acquisition. Our all-in effective cost of debt in 2013 was 3.2%. Moving on to tax. The effective tax rate reduced to 21.5% in 2013. The year-on-year reduction is generated half by lower tax rates in the U.K., and half by change in the geographic mix of our business, including growth in Dubai, which is a low tax jurisdiction. Finally, on dividends, we increased the total dividend by 2.2% to 18.9 pence per share. Last year's payout was based on earnings, including a full year of profit from corporate training business, whereas in 2013, corporate training's contribution to profits before disposal was minimal. But despite the reduction in total group earnings, the board has approved a 2.2% increase above the 18.5 pence per share that was paid out in 2012. This represents dividend cover on continuing earnings of 2.1 times. The ability to turn profit into cash flow is a key strength in Informa. The headline cash conversion rate in 2013 is 99%, an improvement on the 94% achieved in 2012. This means we've generated just over GBP 20 million more cash year-on-year. Before tax, the group's free cash flow increases GBP 17 million year-on-year. Actual free cash flow was GBP 210 million. You will remember from this time last year that we announced we had resolved a number of outstanding tax issues in the U.K. and elsewhere. Actual free cash flow is lower than in 2012, principally because of the payment of GBP 15 million of historic tax liabilities in the U.K. relating to these agreed issues. These cash outflows and provision releases to the income statement mark the final resolution of these outstanding tax issues, and together they remove material uncertainty from our balance sheet and are a positive development for the group's financial position. The free cash flow of GBP 210 million has financed acquisitions and dividends. We have spent GBP 138 million on acquisitions this year, including consideration in respect of prior year acquisitions. We have maintained our focus on acquisitions and stuck to the acquisition criteria we set ourselves as a benchmark. This is a successful formula, as evidenced by the 11% return on investment generated in 2013 from 2012's acquisitions. In 2013, we also completed the disposal of two businesses that no longer fitted into the group's long-term strategic objectives. The disposal of the corporate training businesses completed in September, and the group received 100 million US dollars on completion. On a smaller scale, the local language conference businesses in Spain and Italy were sold in the first half of the year. The year-end financial position is strong, with a net debt EBITDA ratio of 2.2 times and headroom on our facilities of over GBP 250 million at year-end. Having talked you through the net debt, let's turn to the rest of the balance sheet. Net assets at 31 December 2013 are just under 1.2 billion, with a reduction in the year resulting from the disposal of the corporate training businesses. Year-end deferred income increases 8% year-on-year on a constant currency basis to GBP 316 million. The publishing businesses have grown by low single-digit percentages. Global Events deferred income has grown substantially. As we always say to you on deferred income, it's only a snapshot in time and does reflect timing differences, but nevertheless, it's a positive result. In summary, the balance sheet is robust and healthy and leaves the group well-placed to deliver on its future ambitions. I am now going to hand it over to Stephen Carter. Thanks, Gareth. Good morning, everybody. Thanks very much, Gareth, for taking us through last year's results. What I am going to do is give you a little overview of where my thinking and approach is so far. I am going to reinforce at least once, and probably more than once, Derek's point that it is day 40. On the management of expectations, I give you that health warning. The first thing I would like to do is to echo Derek's thanks to Peter and indeed to Adam. Peter ran this company for a significant period of time, did it in a very distinctive and very successful way, and had an enormous passion for the business. I know that because he has just sent me an email to tell me how to do the results presentation. I have taken the job with much enthusiasm and excitement, with a very clear sense of my own independence, but also a very real sense of managing the transition of leadership. As Derek said, this is a people business. People businesses are not about processes and contracts. They are about people and talent. Approaching the business in that way is really encapsulated in what we put in the press release today, which is this will be a year of measured change. That is a very deliberative executive decision and one that I think the board wholly supports. Having said that, I was thinking as I was coming in today that one measured change we might make is that next year we might avoid having the annual results presentation in half-term week. So that those of you who, like me, have had to sacrifice the opportunity to spend some rare time with their children who are off school will not have to repeat the experience, so watch this space on that. Generally, measured change. A bit of background on myself. Just to give you a little bit of my professional background. This tells you nothing about me as a person, as CVs never do. You can make your own judgment on that. I started out as a trained as a Scottish lawyer. I then spent the first 15, 16 years in media, telecoms, and marketing services. Then I spent a term as the regulator for the media telecoms industry, and then a period as the minister for the media and telecoms and technology industries. In the last three or four years, I have been in France working for a French-American technology equipment business. Derek says I have been on the board of the company for just over three years. I think I have a feel for the culture of the business and I have an understanding of the model, the operating model. But I took over from Peter, who worked, believe you me, till the last day, at the beginning of the year. These are two of my younger children's favorite characters, and I put it up just to say that clearly, when you come in as a Chief Executive of a business, you have choices. You can be very Tiggerish about the business. You can be very excited and optimistic about the market, the opportunities, the platform, the positions, and the growth opportunities. Or you can be terribly Eeyore-ish. It is all terrible. It is all woeful. There is much to be changed. How could it be like this? My intention is actually to be neither of those two caricatures. I am being as objective as I can be about the business, and I am using the opportunity for refresh and newness to take a cold, hard look at how we operate, where we operate, and what businesses we have. But it is neither extreme of those spectrum. This chart, which hopefully you cannot read on the screen and probably cannot read certainly in the shrunken down takeaway pack that we provided you, is a summary of the questions that certainly many of you, some of whom I have had the chance to meet before today, many of your colleagues on the investment banking side for certain, have posed. As I have gone around the business and I have looked at the markets, these are clearly some, not all, of the questions. Some of them operating questions, some of them strategic questions, some of them capital allocation questions. I am going to disappoint you because I am probably not going to give you immediate clarity and answer to those questions today, but I think it would be unwise and ill-thought through if I attempted to. I will just give you a little bit of guidance on question 19. We are looking to appoint a new Group CFO. You have seen this morning we are very ably served and accompanied by a very strong Deputy CFO and very strong finance team. The day-to-day management of the finances of the company is robust, and we are taking time on that. It is work in progress. I have nothing in particular to add today, but that is an ongoing activity. What have I been doing? I have been getting around the business. I put this chart up not to demonstrate how my air miles are ratcheting, but to just give you a very clear visual sense that this is an international business. It is definitely the case that we are a U.K.-listed company. Clearly, a significant part of our business is in the U.K. A significant part of our business is in the U.S., and a slightly larger portion of our business is denominated more broadly in U.S. dollars. The market is internationalizing, and I will talk a little bit about the market more broadly and where I think the opportunities are for us. As you go around the business, and I have been in most places, there are two or three I have not been to yet. I am spending some time in China, where we have made a strategic investment in the next couple of weeks. I am spending some time in South America, where we bought a couple of businesses, in the next month or so. But I have been around most of our locations and most of our operations, and you get a very, very real sense of the commercial appetite and hunger in the business. Informa is a very entrepreneurial business. That is definitely something we wish to retain. It drives performance. It drives a sense of owner/manager attitude in the running of the business. Those are, I think, strong cultural truths of the company that give us strength. Step out of the business a bit, and a bit out of me, and look at the market that we are in. This is the market that I think we are in. We are in the knowledge and information markets. The macro trends in the knowledge and information markets, particularly if you are an English language-based company, are strong. Whether that is due to technology and the ability to shift and move data around, consume and interpret data, whether that is the appetite for learning and development, whether that is the scale of the economy, whether that is the strength of U.K.-based businesses that have those skills and can take them into international markets, or whether that is simply the level of connectivity that is growing exponentially around the world, and that allows the moves and the shaping of information and information services. The macro market that we operate in is broadly positive. If you look a little bit more narrowly into the information industry, what are the ingredients for businesses that are successful in this category? I have taken a view on what it seems to me, looking at some of our competitors, some of our own businesses, some of the businesses that we have bought and others that we track. You see a mixture of success ingredients. The two that I want to highlight on because they are the two that I highlight in the press release today are operational effectiveness, operational focus. The better businesses in this market are the ones that really do drive standardization, replicability, sharing of information, and also the use of very user-based technology platforms. We are not a platform business. We are definitely not going to become one. We are a content business. One of the great advantages of the advances in software and technology is actually you can move your product into your customers' workflow systems, into your customers' hands in an increasingly easier and lower cost way. I think there are opportunities for us in both those areas. What is going to be my approach through 2014? I lay it out for you so it is as transparent as it can be. I would draw your attention to the two boxes on that side of the slide. I am going to use the discovery period. I am going to use the fact of being new to the business as the Group Chief Executive. I will get that chance only once. I am being measured about the way in which we will deploy change within the company. We are a people business, so identifying talent, maybe bringing in a little bit of new talent in key areas to give us more competency and more capability, and to focus around the products, the brands, the operating platforms we have got, and the people. The two areas inside the company, and I started this on January the 1st when I came in, and I now have a sort of comms platform that we use interactively within the business. The two areas of focus for me I laid out very clearly were operational fitness and generating growth. You look at the business and you say, this is a strong business with solid platforms, but building platforms for future growth are clearly important for any business, and particularly so for us in a couple of areas I will come on to. What do I mean by operational fitness? Just to drill down on that a little bit. I think there is an opportunity for some simplification. The business has been run consistently and in a particular way for a long period of time. I think any business that has done that has a chance for a little bit of tidy up, a little bit of reorganization, a little bit of simplification of reporting lines and operating units, and that we will progressively do throughout the year. The shared service and group support activities which started two or three years ago have been very effective, but definitely an area where we can accelerate. As we internationalize, bring more businesses into the group, we can scale those up and get increasing economies of scale and efficiency for our newly acquired businesses. We are internationalizing the business and we intend to continue to do that. The speed with which we do that when we go into new markets is an area where I think we can learn and improve. Then look at the sectors where we have scale already, healthcare, pharma, technology, financial services, and telecoms. Then how do we take that scale, which exists in all three of our businesses, and then leverage it both in the individual markets and then across the group. On growth, that is always a more elusive thing and always more difficult and always slower to really see the immediate returns. But at a very simple level, tomorrow's profit is today's growth. Looking at how we generate growth across the business is something that I definitely want to spend time focused on, whether that is on the top line, whether it is in the way in which we get returns from investments we made, whether it is how we exploit the platforms we have got, or whether it is even more tactically, how do we improve yield and look at our pricing positions in some of our markets and place some notes on that. To take it down, finally, before we go to questions, to how am I thinking about the business, this is just a little way of laying out the business. It gives you a slight sense of how we think about it. The Academic Publishing business, which is a tale of two cities, books and journals, run as a very coherent operating business, has a very strong position, has strong brands, has strong imprints. As Gareth said, we launched a new imprint last year, deliberately, separately, as a standalone in the open access market, Cogent. We have done good work in looking at opportunities in emerging markets as English language and English language teaching and learning expands. We think there is more to do in archives. We think there is more to do in international exploitation. Open access is clearly a change in this market, but also brings with it some opportunities as well, which is why we have decided to play. Clearly, you cannot talk about this market without being aware of Amazon and the rise of alternative consumption. But equally, e-books is a new form of revenue and a new form of distribution and consumption for our backlist, as well as our emerging frontlist. Business Intelligence, if you look at the performance from last year, is the business which probably needs the most attention. Fortunately for me, as I come in, it is the business that I am most instinctively and personally excited about. I think the information services market is a market definitely in growth and change. The rise and rise of specialisms and the demand for ever more actionable data goes up almost in direct proportion to the amount of ever-increasing available information on almost everything. Creating those specialist positions and specialist products is something we are very good at. Those are the sectors that we operate in at the moment in broad terms, financial, health, and pharma being the biggest. Maritime, we are a very strong position. Professional. Consumer, where we are a much smaller player. In technology and media, where we have good assets and good brands. Right now, here today, probably our biggest issue is that our two main end markets, healthcare, pharmaceutical, and financial services, which is about 65% of the business, those end markets have been having their own operating and structural challenges. If you are selling into those businesses, there are questions around repeat revenues, pricing, license levels, and the need to drive more innovation into the product just to maintain your position. We do not see any settling in that yet, and you see that a little bit in the Q4 numbers in that business. It is also a market where there are very scale competitors. Understanding exactly what are our points of differentiation and how do we compete distinctively against those scale players is an area that needs a bit of work. This will be a business I will be spending quite a bit of my own time on. Global Events, an increasingly global business, an increasingly international business. As Gareth said, it is not one business. It is exhibitions and events and conferences. The exhibition and events business, where we have made significant investments over the last few years, strong. It is in a good point in the cycle. We have good brands, big brands. We started trading this year well in our two major events in January in Arab Health and Middle East Electricity. We see broadly 2014 as a positive market based on the visibility we have got here today. We clearly have got some operating and product challenges in the conference business, particularly in Europe, hence the reason for the writedown. That gives us a bit of freedom to rebase that business and then take the profit and the performance we have got, which is at the scale that matches the goodwill we are now carrying, and then replenish that. We are not exiting those businesses or exiting those markets. What we do need to do is a bit of a refresh in that area. On the left-hand side and the right-hand side, you have what you might think of as the growth or, sorry, just the support functions. Actually, I slightly distinguish them because I think on marketing, on sales, and technology, and you could also say on talent, they are the growth enablers of our business. Those will be areas on the central functions of the company where, again, I will be looking to see how we drive some operational performance throughout 2014. On the support side, as we grow, as we get more international, as we diversify into new markets, using our central support functions to give us a lower cost to market and an ability to identify targets, acquire them, integrate them at speed, and then operationalize them, which is something Informa does well and is an area where I think we can sharpen our performance over time. If I summarize how we are thinking about the business, you have seen the results for 2013. I think we have described them as they are, which was a solid performance in cash and in earnings. The dividend level matches that appropriately, and the board is very conscious of shareholder returns at the dividend level and also conscious of total shareholder returns, and we always try to get that balance right. For me, 2014 is going to be a very focused year around operational enhancement, operational simplification, operational improvement, and using the chance of newness to, in a measured way, bring some refresh to the company. We are in a position where we've got two businesses that are performing well, in Academic Publishing and Global Events, albeit within Global Events, there's a bit of work out that needs to be done on the conferencing business, and that will get quite a bit of attention too. The macro market broadly at the moment feels positive in most of the geographies that we operate in. Not absolutely everywhere in the world, but broadly true. So we've got two businesses performing reasonably well. The macro market feels good, as best you can tell at this early stage in the year. That, I think, will give us a bit of space and breathing room to be able to spend some proper time looking at the Business Intelligence business and getting that back into growth because, clearly where you'd want to be is in a position where all three of your businesses were on a growth trajectory sustainably over time. What we're saying about 2014 is we see, and certainly our ambition, is to have a positive outcome in 2014. We never and won't be giving much more specific guidance than that. It is as said. Within the company, the mantra is this is going to be a year of change, but measured change, not radical revolution. Measured change after a long period of consistent management. Operational focus around performance and building that platform for future growth. I hope that gives you some sense of how we're thinking about the company. I'm very interested to hear people's questions. Thank you very much. Gentleman in the front row. Thank you. Thank you. Ian Whittaker from Liberum. Three questions, please. First of all, just want to pick up on something you said about events. The events and exhibitions part you said would be broadly positive in 2014. That suggests that maybe some parts are performing maybe a little bit behind trend. Could you just talk a little bit more about potential areas of weakness there? The second thing just has to do with the Business Intelligence part and the recovery. I know you've only been there 40 days, but what's your initial feel as to when we can expect Business Intelligence to return some sort of organic revenue growth? Because obviously expectations were taken down in 2013. The third part is just on the academic side, and you mentioned there was some slight. Looks as though there's some slight timing issues in books. Can you perhaps quantify that in terms of, again, what your feel is for the potential impact that had on the organic revenue growth rate in the full year? Well, I'll kick off with the fourth one then, or the third one rather. The Q4 trading, as we said, in Academic was a bit ahead of what we expected, with the full-year organic growth coming in around 5%. We're not getting unduly excited about that, just like we're not getting unduly concerned about the fact the January numbers were slightly weaker than we expected. Books revenues are inherently a little bit lumpy, depending on when orders come in, and how things get processed. Overall that sort of strong December isn't really changing our outlook, going forward, just like the slightly weaker start in January, as I say, is not changing our view either. On your first two questions. I think you'd be cautious if you were me, I hope. It's January or February, so it's early in the year. Broadly, we're looking at the Events business and feeling positive about it for the year. Helped by the fact that January traded well, and we have three or four good size events, but in different sectors. It's not determinative, but you get a feel. There are a couple of geographic markets which are having some of their challenges. Australia would be one of them, where there's, A, some currency issues there. There's dollar depreciation. And a couple of the sectors there in which we have brands and marks are facing some of their own issues, which is sort of fashion and retail. So there's a little bit of softness, but in the broad, we're positive about it. Conferences, because when we talk about Global Events, we always think both. Conferences, again, is a mixed picture where we've taken the write down on European conferences, which I think we were right to do. And that, I think, gives us a plain platform. But we have strong conference businesses too in other parts of the world, actually, not least here in the U.K. and indeed in the U.S. So the kind of blended picture is kind of cautiously positive, I'd say on that. On Business Intelligence, I'm going to hopefully not disappoint you in not answering your question. I don't know what the timeline is. My judgment is that there was a hope, last year, that the end markets would, particularly in, I think, pharma would come through, and we haven't seen evidence of that. But I think more broadly, it is a good chance for us to stop and just take stock of our products, their robustness, their positioning in the markets, all of the sectors we operate in, and use the time. As to how long, I am not going to give you. That is going to take six months, a year, two years, 2.5 years. What I will say is we want to use the time that we have got with two other businesses that feel solid and a broad external market to do that work properly. Gentleman there. Hi. Thank you, sir. William Packer from the Exane BNP Paribas Media team. Three questions from me, please. Firstly, could you comment in more detail around the very strong books performance in Q4? How did the performance split between the e-books and the print books? What is really driving growth here? Is it expanding front list? Is it price increases? Is it more big deals in emerging markets? Stephen, with your digital and tech background, how do you see Informa's e-book model versus some of the peers who have quite divergent business models? Secondly, just to follow up on Ian's question. The conferences business is obviously the most cyclical part of the events business. Are there geographies where you are seeing green shoots, and what is your visibility there? Finally, just to be completely clear on PCI, should we think that Q1 2014 trends in the underlying markets for financial and pharma are in line with H2 2013 trends? To what extent is the financial issues are purely Informa Global Markets issues versus the wider business? Give me the last one again, sorry. For your financial services exposure within PCI, to what extent is that Informa Global Markets- Right. Or the whole business? Yeah. Thanks. Anything else you want? While you have got the floor. Let us try and give you some color on all of those. I do not know if I can. Even if I knew the answer, I am not sure I am going to give them all to you. I might defer to Gareth on the detail of the performance in the end of last year and how that breaks down. But I would echo what he said, it was a strong year-end performance, but I would not guide people to track that forward from now. We think some of that was a little bit of bring forward. That would be my view on that. But Gareth will give you some color. Green shoots. I wish I knew who invented green shoots. Was that Alan Greenspan? I do not know who came up with green shoots, but it is definitely stuck in the lexicon. In some sectors, yeah, I think we would say. Financial services seems actually in that market to be coming strong. Actually, depending on where you are in the world, for example, you go to the Middle East and Africa, HR conferences are doing well. So in markets where you see, if you like, expansion of large international corporates and internationalization, some of those professional service conference products are doing well. As a format observation, I think this is relevant to how we do product renovation, content in all of them is becoming more and more key. So I definitely think there's an imperative for us to look at the content richness in our conference products. Then on the revenue side, to look at how you blend delegate revenue, spex revenue, and sponsorship revenue that's related to that content. So there's a bit of work to be done on the revenue mix and on the content mix. On digital books, personally, I'm broadly positive about that as it relates to our market, which, hopefully, isn't Tiggerish. If I look at other markets, I think this market has had a pretty good digital revolution. If you look at the analog to digital transition in other markets, certainly other markets I've worked in, it's been tough. Very tough. You've seen sectors where actually there's been a material structural decline before a recovery in either new revenues or in materially reduced margins. Actually, we've done the analog to digital transition pretty well as a group. In some areas, we've seen pure digital product as the answer. In other areas, there's a perfectly legitimate analog and digital business model. In digital books, it's been a new route to market in some geographies. We're beginning to see a bit more competition in devices and in platforms in digital books. That's not bad for us. So actually, we feel reasonably good about that. Just to reiterate, I think there's work for us to do on the technology, how would I put it, usability of our products. But we don't need to compete with the software platforms. We want to enable our product to be used anywhere. We're not trying to build our own platforms and compete with people on those terms. On financial services, definitely IGM is an area that needs some work, and you would understand that better than I. Equally, the reverse is the case. We've had some of our businesses that have done really well. So the Fund Flow business has done well. Yeah, that's definitely one of the financial product areas we need to do some more work on. Do you want to go into the detail on price lists and e-books? Yeah, as we said, the good performance in Q4 in the academic division was in the books business. As we said, purchasing patterns do shift around a bit in the books business, so they can be a bit lumpy. In this case, the reason for your interest is because that lumpiness has fallen straight across the year-end. It doesn't yet particularly concern us in terms of volumes moving from month to month. The upside was primarily in print books in the U.S., so it wasn't e-books, and it was therefore volume-led rather than being yield, et cetera. There are no major sort of one-off sales in that Q4 number. We're always looking for one-off sales, and the T&F sales team are constantly around the world negotiating them, but there's nothing in those numbers from one-off sales. Finally, being U.S. books, there'll certainly be an FX impact on that when we come to report that in 2014, being U.S. dollar revenues, which as we know, will be weaker in 2014 in the reported results than they were in 2013. Great. Thanks very much. Next question. Gentleman in the second row. Yes, good morning. Thank you, gentlemen. It's Andrea Beneventi from Kepler Cheuvreux. You have actually wiped out all the questions from my list with your slide 15, so I have to try a couple of new ones. You don't have to ask a question. It's okay. No, no. Let me try some different ones. Both for Stephen Carter. What skills do you think are needed to make Informa a better company? That's my question number one. The second one is, you're now running the most profitable company within the professional publishing peer group. Do you have the feeling that this focus on profitability has been pushed too far in the past and become, say, detrimental to organic growth? Is there something that could be changed in this sense, please? Gee, I wish you hadn't asked any more questions. I've just been told, by the way, that it was Norman Lamont, not Alan Greenspan, so apologies, who invented green shoots. As well as making Threshers famous, he invented the word green shoots. I'll maybe take them in reverse order. We deliberately didn't get drawn in this in the presentation and the release, and I don't know enough yet to be able to give you a quantified answer. Because if I attempt to answer your question, which I'm going to, your follow-on is going to be, "So how much?" That question I'm not going to answer. But clearly, this is a very profitable business, and as you say, with strong margins. Do we need to adjust those in order to drive for growth? I don't know yet, but it's definitely an area where I want to do some further digging. That's all I'm going to say on that. On the skills, to make this a better company. I'm very conscious. I promised Peter a couple of things, but one of them was I'd never make a historical reference. I'm not talking about making it a better company in any judgmental way. I'm talking about doing my job, which started on January 1. What skills? This is a people business, so you need to be able to attract and retain talent. It's an entrepreneurial business, so we need to continue to make ourselves an attractive home for entrepreneurial talent. Often we're competing with other buyers, and some of that boils down to price. For sure it does. But sometimes it's more than price. It's what's it going to be like? What's the management environment? How much control, how much freedom, how much innovation, how much scope for development? Will I be able to come in and still feel like an entrepreneur, but have the benefits of scale and leverage? That we definitely want to maintain. I think, if I'm honest, even though self-evidently I'm not as continental as you are, definitely one of the things I learned in the last four years in living and working in France is the world's a very international place, and we want to become an international company. Our expansion will most evidently not come probably from the U.K. So becoming more international and more diverse, I think is definitely something we'd want to bring into the skills mix. Attitudinally, most of all, we want to make it a place where people want to work. That's why I've laid out my approach in the way that I have. Hope that answers your questions. Gentleman in the next row. Thank you. It's Mark Braley from Deutsche Bank. Just two questions. The software intangible write-down. Can you tell us how many years those assets would normally have been amortized over? Reading the statement, I wasn't quite sure whether is there a replacement system that's going to be built to replace whatever this multi-stream IT platform was going to do. Have we actually avoided costs through the P&L going forward or not? The second question on Business Intelligence. The statement talks about subscription negotiations, protracted demands, often unreasonable and visibility limited. Are you sort of saying there's been a step change in the procurement department pressure that you're experiencing, or is it just the incremental process that seems to be in place in every corporate that we see? I don't have a comparison, so I can't really. Hopefully, I can't tell. Maybe Gareth can talk to that. I think you're right. Procurement has just become more of a fact of life across the board, and particularly in businesses that are looking to their own costs, and particularly in pharma and indeed in financial services, as you will know. Cost management cost lines has become a day-to-day reality. My own view is that's the new new. I've just come out of a heavily procured industry. I just think we're going to have to. That's what I mean by I think there's work we can do about how do we price, how do we innovate, how do we do more sophisticated multi-location site licenses. How do you bleed in new product innovation remotely without people having to pay for it as a way of justifying your price position. I think it's the new new. That would be my view. On the software, my understanding is historically we were going to amortize over 10 years. Actually, in a number of instances, we have already brought in new systems, so it just made sense to take that down now. That is right. There were systems that were capitalized a number of years ago under a project that completed then, and the technology had just moved on faster than we anticipated at the time we capitalized them. So we have already introduced the systems that will replace them or were in one or two instances. One of the systems actually that we capitalized was in relation to PI, which we have sold in the year. So that central asset was therefore written off. Otherwise, the replacement systems are in place, and therefore, there were no CapEx in 2014 required to replace these systems that we are writing off now. Gentleman right next to you. Hi, it is Tom Singlehurst from Citigroup. The one part of the outlook that slightly surprises me at least is the fact that you are talking about support from the broader economy. Reason being, I guess if growth does not come through, you cannot blame it on the macro. So the question is, what parts of the business are directly geared to that generally improving macro outlook, and where should we see a delta 2014 on 2013? Well, probably the area that's most is Global Events, I think is the obvious one. To a degree, conferences and books, probably in that order. You're right, it varies from market to market, and sentiment is a difficult thing to land entirely correctly. How would I describe it? We're not exuberant about the macroeconomy. We're kind of cautiously positive. That's how I would put it. Gentleman in the front. Thank you. Thank you, guys. It's Alex DeGroote at Panmure Gordon. Just on the dividend, please. At first glance, 2% increase looks a bit mean, but I suppose if we benchmark that against free cash flow, taking into account the effects you've mentioned about tax, it's maybe more explicable. Is that the case, or should we see more clear-cut signaling qualities in what looks a pretty mean divvy decision? I think when you say it's mean, perhaps you're looking at consensus and the fact that it's a touch below the arithmetic mean on consensus, which I would agree with. I think the reality is the consensus was all over the place. That's a factor of people taking different views on what the cover would be at year-end, and also people taking different views on whether the cover will be calculated against continuing earnings or total earnings or where the final results would be. So consensus was certainly all over the place, in terms of what the dividend might be. I think the actual payment we've made, it's a 2% increase year on year and also represents a reduction in the dividend cover down to 2.1 times. I think you could debate whether it would be regarded as stingy, but I certainly agree with you that it could be regarded as a touch below the consensus. Are there sort of implicit signaling qualities there as well? I mean, the outlook felt a little bit vague. Normally, when companies put the divvy up by relatively no number, it is an indication that visibility on trading in general is not great. I would not have said that is necessarily the case for us. I think it is more around sort of a period of discovery that we are going through with Stephen Carter. I think as a new Chief Executive coming into the group, I think to make big promises on dividends or to talk about share buybacks or anything like that would be premature. I think you have got to allow Stephen Carter to go through the discovery stage before you commit the group's capital in any one direction. He is telling me what to do. Thanks, guys. Gentleman just there in the middle. Yeah. Hi, it's Nick Dempsey from Barclays. Two questions, Stef, please. The first one, when you talked about platform as one way that you expect to drive growth, that sounded a bit like CapEx to me. You've got very low CapEx as a percentage of sales, certainly compared to your publishing peers. Is that something that you think could go up over time? The second question, just on corporate training, which I know is no longer part of you, but I think we're expecting a payment maybe this year from that, and also there's a PIK loan. I just wonder if you could tell us how that's been progressing and how that might affect what you can still get out from that sale. You want to take the second one first? Yeah. In terms of the consideration on the corporate training deal, we received $100 million in September on completion. There's a $50 million loan note that is still outstanding. That has a six-year term on it, so we will not necessarily receive cash for that in 2014. Clearly, if the acquirer wants to pay it early, they can do. But we will not necessarily receive any cash on that $50 million loan note in 2014. And then finally, when we announced the deal, we talked about consideration up to a higher figure because there's some ratcheted payments based on revenue targets. In reality, the businesses have failed to hit those revenue targets, so there'll be no further consideration from those ratcheted targets. It's the $50 million loan note that we're expecting to come in in the future. On your first question, apologies if it was a lazy use of language. I definitely wasn't signaling we're about to try and build a proprietary sector-wide industry platform. I was using platforms in the sense of market positions and places from which we can develop. Do I believe that we need to look at our publishing capabilities, which you could describe as publishing platforms? Yeah, I think we need to look at that, and then see how they develop and how competitive they are. As we all know this week, the world's putting an increasingly high premium on mobility, and the sharing of content and information. We would want our business information products to be completely liberated from the desktop. That doesn't mean we don't want them to be usable on the desktop, but we want them to be a completely mobile product. Partly because, going back to the gentleman's question about procurement, that allows you to have a different discussion about usage rates, and therefore price. I'm not trying to signal a major software building program, but I do want to look at our technology capabilities. Gentleman there. Hi, it's Joson Salati from Redburn. A couple of questions, please. First, on a historically Informa, or at least at your origins, it was a very decentralized company, and I think you mentioned something on that line. You also spoke about operational efficiencies. How far you think you want to push or you can push centralization, that being buildings or reporting line, without changing the company too much and having to start everything from scratch? Secondly, you visited 16 different centers across the globe. What is the one most common remark you had from local or divisional management? If I told you the real answer to that it would definitely be the headline of the meeting. Maybe we'll take that one offline. I think on your first question, the decentralization thing, it slightly depends which business you look at. Our Academic Publishing business is not decentralized in the way that you describe. That's a very clear U.S., U.K., dual central gravity, and then pushing out into emerging and developing markets. Indeed, we're making a few changes in China and Asia just to build up our sales and distribution capability there. In Business Intelligence, maybe a little bit more decentralized because, you've got teams working in different specialist markets, and we trade a number of different brands. Then in events and conferences, maybe a little bit more decentralized again. It's not a single approach. I think the answer is, and that's really what I mean by measured change, and this is a people-based business. I'm definitely not arriving saying, "We're all like this," because we're not, "And we're going to change it to be like this," because that would be wrong. But we're a growing business. We're an internationalized business. And I think there are some things we can do to simplify. There's some duplication we can remove, and we can get more benefits of scale than we're currently getting. But it'll be a judgment. And you and others will judge whether we make those judgments correctly. On the common rejoinder around the business, genuinely, and this is the quotable remark. I'll give you the unquotable remark offline. I've been pleasantly surprised by the warmth of the welcome across the company. I think the company is up for change, and that's really made arriving in the business as the new chief executive a nice thing to do. Any other questions? Okay. I'm very appreciative of people's half-term time. I hope it's been useful, and a little bit more color on the press release and on the public numbers. A number of you were getting to me individually, and maybe we can have a deeper conversation. And always available if people want to have one-on-one or individual discussions.