Informa plc (LON:INF)
London · Delayed Price · Currency is GBP · Price in GBX 801.20
-4.20 (-0.52%)
At close: May 5, 2026
← View all transcripts
Earnings Call: H1 2021
Jul 29, 2021
Well, good morning, and welcome to the Informa Half Year Results for 2021. Good morning and welcome to those people who are joining us here in 240 Blackfriars in London. And hello to everyone who has logged in online and he's joining us from a wide variety of places around the world. Gareth and I are going to talk about really three things today, not just the half year results for 2021. We're going to give a bit of a sense of our outlook through to the end of the year.
And then we're also going to touch a little on our forward plans for 2021 through to 2024, what we're calling our growth acceleration plan, a term of description or art that will be familiar to some, which we have used before and we'll get into that as we go through the presentation. So as I say, thanks again for joining and if you bear with me. On the next slide, this should be familiar to all the disclaimer. It stands as normal. And hopefully this slide will be as familiar to some as well.
We at Informa see ourselves very firmly as a business that trades in and around the knowledge and information economy. We operate in 3 markets: the market for advanced learning, peer reviewed original research and reference Specialist Learning through our Taylor and Francis business in the business information market or the information Services market is often referred to in the United States, where we specialize in 3 areas increasingly in Pharma in Maritime and in the Financial Services market. And in the B2B Events market where we operate through 3 different businesses, which we'll talk about, but essentially providing a range of event led services and increasingly more to our B2B customers. All three of those markets are really part of what you could broadly call the knowledge and information economy. I don't think it's appropriate to describe anyone as a beneficiary of the COVID circumstance, but if there is an industry or an economy That has come to the fore through the COVID circumstance.
It's definitely been the knowledge and information economy. All of us have spent much of the last 20 months living either attached to or altogether to connected to a computer screen and a complete provision of knowledge and information through connectivity, either within a business, around a business, in a market or around a market. You see that in some of the statistics and some of the realities outlined on this slide. We've seen some of that in our subscription led businesses, which as you'll see today are performing increasingly strongly. But we've also seen some of it in and around our B2B Events business where The move to virtual, the move to attendant digital services has both accelerated and compressed work that we were engaged in pre COVID, but the COVID circumstances forced us to up our game.
And again, we'll touch on that later. Our strategy in that market is a simple one, which is we focus on specialists. We take the view that the world of the gifted generalist is certainly not a world As we focus on specialist expertise in key markets in all three of our businesses and we build franchises, brands, content, data information, service offerings around those specialist markets. And in the layering and the deepening of that specialist expertise, we increased both our relevance to our customers and also our competitive strength. We started this really back in 2014 when we launched our 1st growth acceleration plan.
Back then for those of you with longer memories or longer investment positions, you will recall But the Informa company at the time was dominated really by the Taylor and Francis business and then secondarily by a very large scale international volume based unit conference business. We took the view then that the 3 markets that we were in were attractive, but our way of going to market needed renovation and some degree of investment and expansion. We scaled down our position in the conference market or certainly in what was called the spot conference market, scaled up our business in the exhibition and trade show business. We invested moderately, but purposefully in product and technology in both our Taylor and Francis business, but also Importantly, in our markets that we chose to play in, in Information Services to build what we now know as Informa Intelligence. And up until the point that COVID came along in early 2020, we were at a point whereby we were ready to further diversify and expand in that business.
Of course, for the last 20 months, because of the scale of our position in the B2B Events business, We have been very focused on stabilizing and securing the business through a combination of cost reduction, cost management, refinancing and effective continuous engagement with our customers to maintain the accuracy and relevance of our data. The good news that we, I think, are communicating clearly today is that we see ourselves shifting out of that period of stability Security and focusing on what does growth look like for this company over the next 3 to 4 years. Where will this business be by 2024 a decade on from 2014. And we'll touch on that at the end of Maher's presentation. But to come to today rather than to tomorrow, where are we halfway through 2021?
Well, many will have seen the release that we issued this morning. At a headline level, we're making it very clear that we're seeing our revenues, our cash flows returning and increasing. And we're issuing profit guidance for the first time in a while. And never did I think that profit guidance would be something I look forward to issuing. Our full year revenues were stepping up to $1,800,000,000 as a function of the return of physical events in North America alongside Mainland China and the Middle East.
And we're indicating the strength of the continuing strength actually of the performance of our subscription led businesses, in particular Taylor and Francis and Informa Intelligence. Our cash flows, which Gareth will set you through in some detail, have remained positive through the entirety of the first half, and we feel positive about our forward picture on cash and the net consequence of all of the above improves or lowers at least our net debt position. To look at the businesses in a little bit more detail, start with Informa Intelligence. I talked a little earlier about where this business was or more accurately wasn't Back in 2014, it was a very disparate business. We'd never really invested in it.
We were not sure that actually we had a portfolio that was competitive. It was a very sales led business. It was very content driven in what you might call the old fashioned view of that word. And The revenues were in terminal or certainly double digit decline. We took a view to invest in that business to focus the portfolio, which we're pretty much completed on.
Now you'll notice As a small side point but an important one, in our release today, we've confirmed the disposal of 1 of our Asset Intelligence businesses, EHS Barber. We have 2 other businesses remaining in that portfolio which are under review. So by the end of this year as this business moves into 2021, We will have a firm and strong position in the 3 markets where we see growth and that growth is consistently delivering. It now looks Like the sort of business we always wanted it to be, it's a 90% plus subscription business. It has a high speed and velocity of product development and product delivery in its markets, Our forward annual contract values are growing steadily, our forward new business pipelines are strong and our brands are strong within those individual markets.
We also confirmed today the launch of a new brand, Combination of our Retail Banking Data business with the Novantis Retail Banking business, which we'll be taking to market in August. And we're delighted to see that combination coming together and coming to market formally. So a full year underlying growth upgrade on revenue guidance to 4.5% and a continuingly strong performance. Taylor and Francis, which has always been an enormous part of company and continues to be so. Similarly, back in 2014, was really a much more robust business than our now intelligence portfolio was in its market, but candidly was very focused solely on the Library market, the institutional market and really had well next to no presence in the open access or what we now know as open research or Open Science Business.
It also was a business much like our intelligence business that was in need of some digital renovations, some improvement in its product. Our TNF online proposition is now unrecognizable to where it was then as well as continuing the investment in content expansion, speed to market, volume and flexibility of usage. This business is continuing to improve in its performance. And similarly, you see an upgrade in revenue guidance here to 2% for the year. But to come to the subject that has understandably dominated commentary and questioning around our company for the last 18 months, What's happening in the major markets in which we are a B2B events operator?
Well, the first point to make given that I am conducting this Presentation from London, England as people are fond of saying. Our major markets are not really here. Geographically, our business has footprint around the world. We built that or bought that over the years. Our major markets are Mainland China and Asia, North America and the Middle East, we do have a business in parts of Continental Europe and Southern America, but the major footprint is in those three markets.
And at a macro level, what's happening in those three markets that's kind of relevant to us? The first, of course, is that Travel restrictions are still a feature of those markets. You will be following this as much as we are. But as you can see, There still remain travel restrictions, particularly on international travel, but also on some intra regional travel. But Vaccines and vaccination, which of course is largely being done differently and with different vaccines in different countries, which may speak to some of the remaining travel frictions are also vaccination rates on a per percentage of the population are growing at pace and rate in those three locations.
And as a consequence, that is producing an increase in human activity and in human commercial activity. And you see that most easily through the lens of traffic volume, seat sales, passenger activity in the aviation industry. We have an Aviation Data business inside our Informa Markets portfolio, CAPA, And we've provided you with a handy link in our release. For those of you who are sufficiently captivated by it, please feel free to become a subscriber. And that gives you a very interesting insight into trend data in the aviation industry in the major markets of the world.
What it shows you is in these three markets where we have a major B2B events footprint, actually business traffic volumes are returning domestically. And in the major domestic markets of Mainland China and North America that is very advantageous for our returning trade show business. We have seen that probably most vividly in Mainland China, which has been on that path now for nearly 12 months. And so in many ways looks very like our business there looked before COVID, absent international participation. That is obviously having some effect on margin, some effect on overall revenues.
But reassuringly, actually the forward pacing and the forward tracking rate into 2022 is looking really quite attractive. America, which we did trade a little bit in, particularly in the Florida region in the early part of 2021, but in the main started to come back in scale product in July June, July is beginning to pick up pace. And we see very encouraging forward signs of both participation, forward bookings and importantly customer satisfaction post event as a result of participation. We also see it in the forward cash collection number, which indicates a return to trading not just for the back half of twenty twenty one, but importantly for 2022. And then we see similar indications and activities in the Middle East where, in particular Dubai, where we have a major footprint, is a kind of regional hub.
And in that area, we have run 2 or 3 very successful events. What does the remainder of 2021 look like? Well, it looks like a build. And in round numbers, if you look at that build of events by category and in those major geographies, based on what we can see today and of course Absent a major reversal either for health care reasons or public policy reasons, we would anticipate that we would do probably about twice the revenues in the second half in our Events businesses that we did in the first half. And that will build nicely into 2022.
As I said, the re bookings and the cash numbers are key metrics that we follow as you would expect us to. And we've given an indication here as to how they are operating. 2 kind of or maybe 2.5 warning shots. The first is But a significant proportion of our events that are running in 2021 for reasons you will understand are in the jargon of the industry off cycle. So they are in a slot, but not in the slot for the industry that they would naturally be in.
And we've had to make point decisions in many places at many times as to whether it's worth running an off cycle event in order to reengage with the industry or should we hold and return in normal cycle in 2022. We have decided almost always in consultation with our industry partners, our key customers, trade associations, advisers and the location. There is value in having an off cycle event, but by definition that off cycle event ends up being a more small but perfectly formed version of what we would have done in 2019. But we don't always make that decision. And candidly, as we move through the back end of 2021, I think we'll be more inclined when faced with that decision to hold and focus on 2022, so you don't end up with another fully distorted year in 2022.
China is probably the exception to that because China has been back for longer. We reopened in China in June of last year, So we've had more time to get that calendar cycle back into something that you would describe as normality. What about the power of face to face? How many of you have said or read or thought or felt that during COVID, post COVID or after COVID, we would never meet again, We would never leave our house, our bedroom, our attic, our garden shed or wherever we've worked our way through COVID and that the world is going to remain a digitally connected, highly efficient, non moving entity. That is not our belief, but then we would say that here, wouldn't we?
But it's also not our discovery. We have done much customer research in many markets, amongst many customer groups in many geographies, and the conclusions are consistent clear. The first is that for the small to medium sized enterprise customer, which is 70% to 75% of our customer base, The value of participating in a trade show or a commercial B2B event as a route to market is essential, because unlike large corporates, they do not have the scale or the ability to be able to build their own distribution, their own market access or their own efficient route to their customers. Secondly, the business development, particularly for small to medium sized enterprises, but also for corporates, is extremely hard to do virtually. You can nurture a customer you know online.
It's very hard to build a customer relationship of scale virtually. Business development is an activity that requires face to face physical contact. Thirdly, we have discovered, and this candidly has been news to us, that hybrid works. But actually much as we're demonstrating here today, you can have 50 or 60 people in a room and you can have another 400 people connected online. And the ability to do both requires both technology, which we'll talk about, and a different product, which we'll talk about.
And if you do that, you get the best of the face to face and you get an extension of your audience and you improve your addressable market. Fourthly, if you're launching a product, if you're bringing a product to market, particularly in an industrial market, physicality matters. And it's very hard to launch a scale industrial product absent physical participation, physical access or physical engagement. And then finally, for industries and localities, The trade show is a perfect vehicle for rebirthing an industry or a locality. If you want to reopen a city or a state or a country to business tourism, a large scale industrial trade show that brings high value business tourism to a location is very valuable and very attractive.
If you are in an industry which is facing challenges either on supply chain or supply chain access or supply chain refilling or supply chain facilitation, a large scale industrial trade show is a very effective way of reenergizing an industry that has been traumatized or ravaged by the COVID circumstance. So for those reasons and many other, we step back into trading in our trade show business and our events business with confidence. But equally, we don't step back in any longer as a monoline business because one of the consequences of COVID is that it's taught us the business that previously we left on the table because frankly we didn't need it, Actually, we can both deliver and we can deliver well. And so over the last year to 18 months, we've seen the increasing value of providing further services, further access, further capability to our customers and to our markets. That could be as simple as deep product discovery directories.
It could be as simple as deep customer analytics. It could be as simple as more efficient meeting management. It could be as simple as more informed, more effective lead qualification and quantification. But one of the things that we will talk about under the banner of Gap 2 is that by the time we get to 2024, This will not be a business, if we do our job properly, that will be described as the world's leading events business. It will be described for what it is doing, which is providing a range of products and services to B2B markets with deep specialism, deep expertise and a multiproduct service offering of which Face to face trade shows or events, conferences or conflicts will be a very large part, but they will not be the only part.
But for now, let me hand over to Gareth, who will take us through the specific outcomes in the first half and the forward trajectory into 2022. Gareth?
Thank you, Stephen. Good morning, everyone. Thank you for joining us here today in 240 Blackfriars or on the webinar. As Stephen said, I'm going to talk a bit to the half year twenty twenty one results and talk also a little bit to the full year outlook that we're seeing now. And that should give you a sense of the returning confidence we have in the business and as a result the improving revenues, improving profits and improving cash flows.
So if we start off with the headlines, the group has generated £89,000,000 of revenue in the first half and converted that into operating profit of £69,000,000 This results An improving and strong performance from our subscription revenues, a progressive recovery in the face to face events revenues as events reopen and a solid performance from the non face to face events revenues in our events led businesses. A real highlight of the first half of the year has been the strong performance of the subscription led businesses with both Taylor and Francis and Informa Intelligence delivering strong underlying revenue growth performances, enabling us to upgrade the full year guidance for revenue growth in both of those business. The progressive recovery face to face as we continued in our major markets. Mainland China has traded well through H1, although in reality Q1 is quite quiet in that business because of the Chinese New Year, but Q2 has been strong. And in June, we saw the first re openings of events in our very important U.
S. And Middle Eastern markets, which gives us confidence around continuing recovery into the second half of twenty twenty one. Free cash flow was well ahead of the cash flow neutral cash flow positive guidance that we gave for the year. And this was really underpinned by the fact that In the end of 2020, we reset the cost base for the levels of revenues that we felt confident about delivering in 2021 and then we've maintained strict cost controls around the cost base going through the first half of the year. And that means our liquidity position has increased in the first half of the year from 1,350,000,000 at the 1st January to more like €1,450,000,000 at the 30th June and that gives us a robust financial position from which we can continue to recover.
So looking to the outlook, what that first half performance has enabled us to do is to increase the revenue guidance for the full year from £1,700,000,000 at the start of the year to now £1,800,000,000 plus or minus. And off the back of that, we've been able to instigate OP guidance, which was starting off at £375,000,000 plus or minus for the full year.
So So if
you look at the specifics of the half year income statement, you can see there the group has generated £689,000,000 worth of revenue in the 1st 6 months compared to GBP 814,000,000 in the 1st 6 months of last year. There are a few moving parts in there, so I'm going to come back to a revenue bridge of that a minute and explain that in some more detail. The interest costs reduced year on year because of the lower level of average debt in the business following the equity raise in the first half of 2020, but also because of a mixed benefit in the cheaper EMTN borrowings that we have now compared to the U. S. PP borrowings we had in the first half of twenty twenty.
The effective tax rate is 17% in the first half of the year. So this is lower than our pre COVID medium term expected tax rate around about 19%, which is a result of the lower profitability in the business, particularly the events business, but also the fact that some of our tax deductions are quite fixed in nature and therefore have more of an effect where we have a lower overall level of profitability. However, that tax rate is above the 13% tax rate that we reported this time last year and that's really been a The increase in profitability of the U. S. Business and the China business, which operate in higher tax jurisdictions and therefore have more of an overall effect on the rate when they're a larger part of the mix.
And the final point I'd comment on is the non controlling interests. These were a loss last year because the primarily the JVs in China weren't trading. As China has come back into trading in the first half of this year those have turned profitable overall in the mix. So moving on to the next slide. We'll start to talk about some of the divisions in a bit more detail and kind of unpick some of the divisional factors.
And as I said on the headline slide, One of the real highlights of the first half of the year has been the strong performance of the subscription and their businesses. Informa Intelligence has delivered excellent results in the first half of the year with 7.9% underlying revenue growth. Subscription has been really good. We're seeing good ACV growth across all parts of the business and we're seeing a good forward sales pipeline for the second half of the year underpinning our confidence. We're also continuing to focus Informa Intelligence on the Specialist markets that we think is best positioned to deliver long term outperformance in.
And to that end today, we've announced the sale of the Barbour EHS business around £35,000,000 consideration and about a 14 times multiple, really demonstrating the value in these subscription businesses. We're reviewing the 2 other Asset Intelligence businesses and we'll reach a conclusion on those reviews before the end of the year. The operating profit margin intelligence is 2.8 percentage points lower than it was last year. About 0.5 percentage point of that is from the weaker U. S.
Dollar with the balance because of a trade in the trading mix a change in the trading mix in the portfolio. And looking forward, we're tracking to 4.5 plus 1% growth for the full year, which is an acceleration on our 2020 performance. It's a bit behind the H1 'twenty one performance because of revenues in the year. Turning to Taylor and Francis. Again subscription revenues remain really strong in that business.
It's also supported by good performance in the open research part of the business and the forward pipeline of submissions in that bit of the business gives us confidence going into H2. And also e books have been a strong feature of the mix in that business in the first half of the year. The operating profit margin is about is 2.8 percentage points lower year on year, but 2.7 percentage points of that is because of the FX effect of the weaker dollar in a business where we have strong dollar revenues, but a sterling cost base. Looking forward, we're tracking to 2 percentage 2% plus underlying revenue growth for the full year, which is a step up from where we were at the time when we announced the full year results. So turning our attention to the event led businesses where we're seeing returning confidence in the product.
As I said at the time of the year end results, I think there's going to be 2 sort of key dynamics in the year this year. Firstly, we see 2021 as the transition year And the activity levels will be very much dependent on the pace and scale of the reopening of events in local markets. And that obviously depends on the variability of local markets and what's happening in the end markets the exhibitions serve. But secondly, we remain very confident in the product. We remain very confident in the model and confident in the belief that face to face is coming back.
Stephen's touched on some of the sort of commercial and customer feedback points in his power of the face to face slide, But to touch on a couple of the finance specific points, we get I get confidence from the very low level of refunds that we're seeing from customers requesting their money back, which enables us to retain a lot of the deferred income in the balance sheet and also you get confidence from the forward bookings that we're receiving For H2 2021 and into 2022 now from customers. So in terms of how we see this playing out, events in mainland China have traded strongly As the largely domestic attendance has not been impacted by international travel restrictions. And where we brought our brands back to market in the Middle East And in North America, we're seeing good participation levels broadly as expected. So the number of exhibitors round about half of twenty nineteen levels on participation around about 40% of 2019 levels. But we continue to collect cash for H2 'twenty one and in 2022, what gives us this confidence around the progressive forward recovery of the business.
So I said I'll come back to the revenue bridge in a second and here it is on this slide here. So the starting point of the bridge is that in Q1 2020, as you can see there, We traded around about £280,000,000 worth of revenue before COVID-nineteen began to disrupt the face to face events business. Our H1 'twenty one revenue is around 60% of the prior year figure as it's been really restricted to Mainland China in Q2 and then the Middle East and the U. S. In June.
B2B Digital Services have grown in the period and that's not simply a substitutional effect around virtual events. That's an increase in the overall level of digital product we've been bringing to market. And the 4 months although not huge in the mix at this point is one of the things that gives us confidence around the future strategy that Stephen is going to talk to you more in the second piece of his presentation. I've already commented on the subscriptions led growth in the first half, which has been great. And finally, there's been a currency headwind from the U.
S. Dollar being weaker when compared to 2020. And that's added up to give us revenue of £689,000,000 in the first half of the year. So taking that into operating profit, the revenue has generated £69,000,000 worth of operating profit in H1. We get the benefits of the savings delivered in 2020, which we've maintained through strong cost controls in 2021.
So you see obviously a benefit of the cost management program coming through in the bridge. The revenue the COVID impact is really the revenue impact that I outlined on the previous slide. And then finally again there's the currency impact from the weakening U. S. Dollar in the mix overall.
The cash flow story has been a really good one from the first half of twenty twenty one. As you know, we targeted positive free cash flow or neutral free cash flow in the year and we've come in well ahead of that with free cash flow of £134,000,000 In terms of the bridge, the EBITDA impact is what you'd expect from the previous slide on AP. The working capital performance has been really strong with roundabout £80,000,000 working capital inflow in the first half of the year, largely driven from the inflow of revenues in terms of events in H2, 2021 and 2022. And we explode that out a little bit in the top left hand corner of the chart, so you can see that move as an individual dynamic. Interest is favorable year on year.
There's the reasons I mentioned in terms of the P and L around the EMTN debt, but also the EMTN debt is phased in terms of its payments much more to the second half of the year in the first half of the year, which increases the cash flow benefit in that bridge. And the net one off COVID rated costs are COVID cash outflows from the first half of twenty twenty that we didn't have to repeat obviously in the first half of twenty twenty one. Around three quarters of that relates to onerous costs and the costs of not being able to run events and about a quarter of it relates to our financing response to COVID from the first half of twenty twenty. And our refinancing work in 2020 has given us real sense of strength and flexibility in our balance sheet. We have substantial liquidity of £1,450,000,000 at the year end, at the year half year.
Our RCF is fully undrawn, has remained fully undrawn for the last 6 months. On top of that, we have about £400,000,000 worth of cash in the balance sheet. We're maintaining sort of above normal levels of cash in the balance sheet to increase that and enhance that liquidity. We have no borrowing maturities until July 2023. Based on our current forecast and our current liquidity, we could pay off that July 2023 debt out of our existing liquidity without going back to the debt markets.
So in summary, we have substantial liquidity at £1,450,000,000 We're increasing that liquidity because we're maintaining our cash flow positive generation and dynamic in the business. We have no maturities until July 2023 and we have no financial covenants on any of our group level debt, which say all in the mix gives us a real sense of strength and flexibility around our financial position. So pulling it all together in terms of the key financial messages, our returning confidence in terms of the face to face events revenue performance enables us to increase our revenue guidance from £1,700,000,000 to £1,800,000,000 plus or minus now at the half year. And that enables us in turn to set a OP expectation for the year at £375,000,000 plus or minus. The improving growth in performance in Taylor and Francis and Informa Intelligence enables us to upgrade the revenue expectations in both of those businesses to 2% plus and 4.5% plus respectively.
And we'll continue to drive our cash flow in the business until we have months to months of that and manage that very closely in the second half of the year As we have done in the first half of the year, which will continue to deliver a cash flow positive result for the group, which will increase our Available liquidity above the €1,450,000,000 we currently have giving us real balance sheet strength. So I'm going to hand you back to Stephen for the second part of his presentation. Thanks Gareth.
One of the many advantages of the last 20 months has been that it's allowed us time to look back and reflect on what happened before the extraordinary circumstance of COVID and what does it mean for our business going forward. And like many businesses, I hope we've used this time to think about how things that we did before might be done differently. And that's in part what led us to our thinking around how do we frame our growth and acceleration plans for the next 3 years. But to go back before we go forward, When we set out as a company on our growth and acceleration program back in 2014, In our minds, we set out to do 3 or 4 things. We set out to diversify and extend our Taylor and Francis business, materially move it into Open Access and Open Research and frankly begin the path of giving it some much needed investment in technology and product.
We set out to become a business that knew how to run a business in the information services market and similarly build product technology and sales and customer management capability. And we set out to take advantage of the market opportunity that we saw in large scale events and focus our remaining conference business, now known as Informa Connect, more around high quality branded rich content connection events. What actually happened at the other end of it, I mean commercially the results were certainly pleasing, But the summary of it was we became the world's leading events company. But actually, underneath that, there were many other things going on within the group. So as we think about growth acceleration from 2021 to 2024, what is the broad ambition of the company?
And at the headline, the broad ambition is that our stated strategy of market specialization, identifying markets, Subject matter specialisms, category markets, industry sectors and then deepening our specialization and our digital Service capability around those markets will be where the company is single mindedly focused. We want to grow. We believe that value is correlated to growth. We had all of our businesses in growth, but actually we'd like to up that growth potential. Now as a statement of probably the obvious, there will be a reinflation growth in the physical events business progressively as physical events return.
But it isn't just absolute growth, it's the quality of that growth, the mix, the type of the revenue, the resilience of that revenue, the proportion of that revenue that is predictable and your ability to deepen that relationship with your customer by expanding your revenue relationships through other products and services. Clearly, we want to maximize the return that we are going to see and we are seeing in physical events. We need to use that physical return in order to return to engagement with our customers, not just with the same old product, but with a better product, both a smarter event product, but also some additional products and services around those events. And that will require us to deepen our digital service offering, and that is demanding a material change inside our own company around skills, around capabilities and frankly, around operating discipline in what previously has been a more fragmented business. Underneath all of that, that is requiring us to step up and manage our data platforms both for ourselves and our customers in a more industrial way.
And I will talk about that. And underpinning all of that, importantly, by the time we get to 2024, what in the jargon is talked about as ESG, Gee, what inside our company we talk about is fast forward, what in the real world people talk about is climate change. The responsibilities around sustainability will be center stage and mainstream. And so we as a business need to ensure that our products and our services are best in class in sustainability, whether that is the simple everyday realities of ensuring that we are a carbon neutral business, that we're using clean and renewable energy, that we're minimizing waste, that we're maximizing reusability and recyclability where we can. And critically in our events business, we are prosecuting the truth of that product, which it is the most effective efficient consolidator of carbon efficient business travel that you can find because it removes the need for multiple bilateral single point meetings.
And I'll return to that in a second. And it will be relevant to all of our businesses market specialization, whether it's our Advanced Learning business or our Intelligence business or our B2B business. In our Advanced Learning business, Increasingly, under the leadership of Annie Callanan and her team, the intention is to move this business from being a product business to being a services business, to move this business from being a single point business to being a multi point business and to improve the service offering not just to our institutional customers that will remain important, but also really to those people who create the knowledge, the authors, the researchers and ensure that you get that balance right of prioritization in the customer relationship. That we believe will allow us to continue to improve our relevance, continue to improve our reach and continue to extend our ability to access funding for original research that goes beyond the Institutional Library. In our Intelligence business, we believe that the demand in businesses And in the 3 markets that we're in, for increasing specialist information in real time to make for better business decisions will increase.
That if we can keep our products and our services relevant, that mix of proprietary data, original content, insight wrapped with real time analytics becomes increasingly valuable, and we feel very comfortable about the 3 markets that we have chosen as forward runway for us for continued growth. We long ago set ourselves the target of being a 5% plus compound growth business with a 90% subscription. That seemed like a mountain to climb when we were a minus 10% business with a 65% subscription business. But it now seems a very achievable and realizable ambition. And in our B2B Events business, how will that digital acceleration represent itself?
One of the questions I get asked often is, but after COVID, aren't travel patterns going to be materially different? And the answer is, I frankly don't know any more than anyone else knows. I follow the data and I follow the commentators. I have opinions on it and we have opinions on it and we research this regularly. We take the view that the internal meetings market probably will change.
Internal company meetings. I look at our own Board as a corporation. Will we physically meet 10 times a year like we did pre COVID? Discuss. I look at internal management meetings.
Will they happen with the same requirement for constant international travel? Discuss. But multilateral meetings, industry meetings, customer meetings, engagement meetings, there is nothing that is more compelling for an industry than to be able to operate in a neutrally convened space where you can meet every customer, every wholesaler, every distributor, every competitor, every adviser, every player in the industry in the space of 5 days. And the efficiency and the power of that proposition will, I suspect, end up being enhanced by those changing travel patterns not reduced. Because the less other travel that people do, the higher the value of the travel that people will do.
And if you can get that proposition right and surround it by other digital products and services that extend the life cycle of that contact, then you have the ability to really be able to add value to your customer. And to add value to your customer relationship, The key thing is you need to know who your customer is. And that for us has been one of the key lines that we've crossed during the last 18 months is that whilst we have deep, deep relationships inside our franchises, our collection and collation of that customer information, either at the profile level. My name is Stephen Carter. My job is Chief Executive of Informa.
My budget authority is discussed. My responsibilities are discussed. That profile data we have. But what about the behavioral data? What do I do when I engage with the Informa product?
Who do I meet? What am I interested in? What things do I track? What areas do I have interest in? That behavioral and attitudinal data, if you combine those 2 and you compound that over time, That gives you a level of knowledge about your customer and what they're doing, which enables you to increase your relevance.
And that led us to the conclusion that we needed more operating business sorry, more operating discipline in the businesses in Charlie's Markets business, in Andy's Connect business, in Gary's Tech business, so that we could collect and collate our millions of customer profiles in a manner that would allow us to be able to develop and market products better. This will not happen overnight, But Iris, our base level internal data warehouse is now more than in flight. When we meet in the quarter at the Capital Markets Day, we will give a full, unexpedated explanation of what that capability will provide us with. And underneath that is work ongoing on how we develop additional services. We've begun to talk about it inside our own company in this way, the way in which you can think about how you can expand your relationship with your customers.
At the base level, you've got what do we do for our markets? When we talk about market specialization, what do we mean? How deeply do we know our communities? What market specific content, programming, data, events, B2B Media platforms do we have to enable us to build, develop, produce, launch products and services that bring the audience. Then when you bring the audience, how do you allow them to engage?
Of course, you want them to engage physically, You want them to turn up in person when there's an in person event. But alongside that, you also want other people to be able to engage on a hybrid platform. And that requires you to build a technology capability that allows for simultaneous hybrid product, which is as useful and as valuable as a physical product. That has required us to contract and build with inside and outside parties service capability on everything from to participation, to meeting management, to product discovery, to search. And that activity is well progressed inside all of our event led businesses.
Then what you need to do is collect and collate the data that comes from that, which I've just talked about, which is IRS to give you profiles which are consent driven, are detailed, are accessible and which drives information and behavioral signals from which you can then develop new products. And what could those new products be? Well, that takes you to the 4th level. Those could be products around audience monetization, lead qualification, more accurate advertising targeting or just at a simple level, more accurate discovery. You need to do all of that with discipline.
You need to do all of that with clear registered and consent driven data protocols, and we are doing that. But if you do that purposefully, you do that well and you do that over time, you build a very powerful engine to drive your day to day business. You also build a very powerful capability to develop a new business. We'll get into more of this when we meet in December. For those of you who feel By December, you can meet in person.
We would hope that number will increase, not that we're not pleased to see everybody on the webinar today, where we will have presentations from all 5 of the businesses as to what the detail of our plans and ambitions are from now through to 2024. And by then, we'll have a very clear sense of where we're landing at the end of 2021 and what our forward trajectory into 2022 is. So in summary, where are we as we meet here in July 2021? At a headline level, I think we feel in a way that we didn't in July 2020 that we're looking up and looking out. We are moving the company out from stability and security, which was needed and well earned and hard worked by many colleagues across the company for which I put certainly my thanks on the record.
Our revenues are returning in our Physical Events business at different paces and rates in different geographies, but the trend lines are clear and are consistent. We're alive to the fact that there could be exogenous obstacles or bumps on the path. There may even be occasional reversals. We've seen that in Australia. We've seen that in Brazil.
But we believe the forward trend lines are consistent. We're seeing really outstanding performances in our subscription and content led businesses. And that's largely a function, frankly, of much of the work that was done in the Gap program back in 2014, 2015, 2016 and 2017 that is reaping benefits combined with excellent management, leadership and focus on product and customers. We will bring that product focus to our customers as we see our physical events returning. Our cash position is much more robust and we're beginning to see That cash engine that is the driver of our company and has been part of the investment thesis for many shareholders returning that improves our balance sheet, gives us strength and confidence in the strength of our balance sheet and has resulted in us ticking up our guidance for 2021.
But more importantly, I think looking out with positive interest and excitement to 2022, 2023 and 2024. That's enough for me, and we're very happy to take questions. I think we'll start with questions in the room. I think I've been guided to do that. I have.
Richard's telling me what to do. So are there any questions in the room? We have 2 questions here, please.
Good morning. Annik Mas, Exaneve and Paperiva. So my first question is, you've highlighted that your forward booking and your rebate rates are quite strong. I'm interested to hear how the deposits have changed that you request Exhibitors now versus pre pandemic. Secondly, in terms of Informa Markets operating profit, I would be keen to hear what that looked like if you isolate China.
And finally, if you could just I guess now you have a better idea which shows are coming back post pandemic. So if you could give us an idea of what your exhibition portfolio looked pre pandemic And how many of those are not coming back respectively have been merged? Thank you.
What was your last comment, Annick, have been?
Have been merged. I guess some have. I mean you can yes exactly, yes.
Okay. Why don't I start with your last question, try and dodge your second question and hand the first question to Gareth on forward bookings. I don't think we know is the answer to your third question. So what will our folio looked like post pandemic. So let's maybe work through the businesses.
So in Informa Tech, I think the events dimension of the Informa Tech portfolio will look virtually the same, largely because we had gone through a very significant pruning exercise in that business anyway pre pandemic to focus on brands that had footprint scale, original content that were very blended with our media brands and our research product in that sector. And so I think off the top of my head, I think we have between 45 to the event brands in that market. And I suspect we'll have 45 to 50 there or thereabouts post the pandemic. The first of those at scale is actually happening this weekend, Black Hat, which is happening as a hybrid event in Vegas with I think at the moment we're tracking to about 4000 physical attendees and about 8000, 9000 virtual attendees. Last time we ran it physically, we had about 15,000 physical attendees and no virtual attendees, if you get my point.
And we will see the rest of that portfolio return. In Connect, I think similarly, Andy is here, so he can nod or shake his head if I get it wrong. But I think there we again Andy had led that business to be much more focused around the larger brands, what we used to call the Millionaire Club, the bigger brands. And I think that focus will continue. And similarly, the market specialization in that portfolio very much revolves around Pharma and Biotech, Life Sciences and Finance, and I think that will continue.
So I don't think you'll see a material change. There are a couple of smaller portfolios where we might prune at the edges, but not materially. Markets, I think, is a different picture because there it was a much bigger portfolio anyway pre of Events because it was more of an Events only business then. And so I think there will be some of that portfolio that simply will not return. In our sort of Mental math, we've kind of assumed that somewhere around 80% to 85% of the business will return over time naturally.
And then we might warehouse some and judge the market. But here's a perversity of the pandemic is that the natural inclination is to conclude that large is better, but it may not necessarily be the case. Actually, what is better is do you have a defensible event that's providing a mixture of content and access that you can't get elsewhere. And hybrid, of course, creates a scenario where you could have a smaller physical event and a much larger attendant hybrid event. So Initially, we thought that pruning exercise might be larger, but it may not actually play out like that.
So it's a bit of a mixed picture. Will we isolate the profit on China? Of course we do, but we won't publish that. So it's a good question. I mean as a general rule As you know very well, the business in Asia generally or in ASEAN and Mainland China is a lower margin business historically than in North America for probably 2.5 reasons.
Firstly, real estate prices historically have been higher in that part of the world. And secondly, it's a much more distributed community, so we're covering many more geographies. That might be a geography where we do prune a bit because I think we will probably focus on our major markets, Mainland China, Hong Kong, Malaysia, India, Singapore, Japan, Indonesia, I think, Thailand, I think that will be our focus. And but it's a very profitable market and we think it will continue to be so. On forward booking and deposits, do you want to speak to that, Gary?
Yes. Just on that. Just on the events numbers, just to go back to that, we've done quite a lot of work on that internally. And what we're finding is reality Event numbers and the profile of the recovery is actually not that informative around revenue recovery because there's so many other variables around international travel or domestic travel recovery, Off cycle, on cycle. And all those factors matter as much in the mix of the overall revenue number as does actually the number of events we're operating.
So a bit of a caveat on event numbers as a KPI. In terms of payment terms, what we're seeing overall is that the cash flow benefits of the Events business, particularly the Markets business Remain intact. So you do get a lot of the money in well before operating the event and generally all of it in, in terms of people attending before the event. So that remains a dynamic. It's worth pointing out that within the business there is actually a bit of a dynamic between China and the rest of the world.
The rest of the world has always had earlier cash flow payments. China has always been a bit later. So in terms of the Chinese events that we're operating, we're seeing no change in the payment characteristics there, but that's a bit later. And then elsewhere, I think over time, which at the moment in Place like the U. S.
Is a bit behind where it would normally be, but we're kind of riding that because we want to get customers back engaged with the product and we don't want to be Really forcing them upfront hand all the money over. We'd much rather they come with us and pay on payment cycles and come to the show. And just the final dynamic I mentioned is as you saw on that cash flow blowout So we've got about £400,000,000 of events revenue already in the balance sheet. So actually quite a lot of the cash the events we're going to run-in the second half of the year will be utilizing that deferred Income rather than receiving new cash in.
Tom, would you mind if we went to the webinar? I know it seems harsh, but I've been guided to go to the should we take a question from the webinar?
Thank you. We do have
a question now from Mick Dempsey from Barclays. Please go ahead. Yes. Good morning, guys. I've got three questions, please.
So first of all, GAAP 1, I believe, if I remember rightly, it involved about GBP 100,000,000 of investment over 3 years. Can you give us any indication of what GAAP 2 might cost And how much we might see in 2022? Second question. You're pointing to forward bookings suggesting World of Concrete and Arab Health might run at 60% of 2019 and 2022. How much have you factored in that those might get Much later bookings than normal into that 60%.
And then you've run a few other shows now in the U. S, I believe. Are the forward bookings that you're seeing there showing that same kind of trend? And third question, I just wonder if you can give us some example So how you can generate some digital offerings around events? So how that business model might work?
And how comfortable you can be that it won't just become like a hygiene factor that every big event provider provides digital services and it's just Part of the exhibitor fee, you don't really get incremental spend.
Okay. Thanks, Nick. On your the back half of your second and the beginning of your third question, here you went into sort of rapid time echo. So we had you in sort of triplicate, which
was an
experience. So if we misheard your question, then correct me. But if I heard your questions correctly, I might get Gareth to come back on the first and the second, but I'll have a go, so have a think on that. You're correct in your memory. I think in Gap 1, our investment our kind of CapEx investment over the period was around £100,000,000 We have not yet fully costed how we'll approach GAAP 2, but I don't think you're a 1000000 miles away.
So we are we're not talking about a material uptick. It will be focused around product and technology and some service and skills capability. And much like Gap 1, the intention will be to do that in a manner where there is a very direct return in either revenue growth or margin. On bookings, I mean it's such a mixed picture. I'm sort of looking at Charlie as I speak.
You're absolutely correct that there is some and lateness in the bookings that varies from category to category. I mean my own personal view is that as the world progressively returns, forward confidence progressively increases. And as forward confidence progressively increases, I suspect we'll find the pace rate of forward bookings will also progressively increase. But the only place we've got to evidence that is in China, because that's really the only place that's now a full year on from restarting post COVID. And it's early days in America, so it's really very hard to draw a conclusion from What have we run Charlie 8, 9 events in America so far of scale?
Yes, getting that. Yes, getting that. So I'm not sure I would draw a direct conclusion from that. But at the moment, there is a little bit of Wait for understandable customer reasons, I'll wait until the latest possible point before I completely commit. But the more events that come back, the more activity that you see, the more it becomes renormalized behavior.
And then there's a not unimportant point, which is this is not true of all companies, but it's true of probably the vast majority. They operate to calendar years. So budgets tend to work to the calendar. And in many instances, budgets were just not made available because the budget that we're all living in, which is the 2021 budget, was by and large set by people like Gareth in November of 2020. And people like Gareth in November of 2020, well, they were a little bit bearish on what was going to happen in 2021.
People like Gareth In the November of 2021, even they are going to be slightly more bullish about what's going to happen in 2022, I would surmise. So I think you will find that budget provision and budget allocation for business development, customer meetings, product launches, industry engagement. They're all going to start to tick up. And therefore, there will be available budgets internally for customers to turn to. And that I think will have an effect on forward bookings once we start getting into 2022, because most companies by and large operate around a business discipline.
On your new business model, I think you make a very powerful point, Nick, if I understood it correctly. And I think the truth is that there will be aspects of what we have introduced through COVID that will absolutely become business as usual. Digital registration is probably a good example of that. I mean digital registration just doesn't just happen, but it requires a degree of technology and service capability and accuracy and operating discipline. But by and large, I suspect that's going to become standard operating practice.
I think that might be also true on what you might call base level product directories in some industries. And so you're correct, we're going to have to work very hard to ensure that the other services that we are offering in and around our events either before, during or after add value on that. But that takes you all the way back to the more you know about your audience, the better engaged you are with that audience, then the easier it is to devise and design products that allow you to market services to them that are genuinely valuable to their specific need. So the circle becomes continuous. But there will definitely be an upping of requirement.
My own personal view again is I think that speaks very well to businesses like ours because the customer expectation is just going to go up and you need a certain level of size to be able to amortize the cost of doing that to be able to provide the kind of base level of service delivery that customers are going to demand from those sort of services. But Gareth, do you want to come in on funding for GAAP 2? Have you got any views on that?
Yes. Well, I think I mean in terms Quantum, as you say, we're still working up our plans and specific numbers around it. We've really kind of announced GAAP 2 today rather than being in a position to go through all the details. By the time we get to the Capital Markets Day in December, I'd expect to have much more specificity around that. But at the moment, sort of £100,000,000 over 3 years is probably a good way to think about it in terms of the overall investment.
And in terms of funding, I mean, we're obviously looking quite carefully at the capital allocation in the business over the period. We've got various things we want to fund in terms of organic investment, but also inorganic investment to help deliver some of the skills and capabilities that we feel will benefit the increase in the digital services that we want to deliver in the business. So there's a mix of considerations we're putting into the mix for the CMD.
Thanks, Gareth. Tom? Actually, we're going to take a We're going to take a question from the room actually, if you don't mind.
Perfect. Yes, Tom from Citi. Three questions. First one, very simple. Talk about the off cycle impact, should that work through by 2023?
Is that the sort of effective time line For when that should work through. 2nd question on the guidance. Effectively, the new guidance is Suggesting the possibility of £100,000,000 more revenue and £100,000,000 more profit. You've got the £60,000,000 of follow through from the sort of permanent cost savings from last year, Which suggests a 40% drop through of incremental revenue. Is that the sort of new normal?
Because on the way down, obviously, it was slightly worse, wasn't it? It was Sort of 60% or 70% drop through.
I'm just trying to work
out whether there's additional investment going in as we recover. And then the final question, sort of slightly anticipating the CMD. Are you essentially hinting that everything's going to look a little bit more like Informa Tech going forward, I. E, we're going to have a collapsing of some of the sort of specialist subjects, if that's the way. We're going to have Informa Pharma, Informa Retail Banking and Informa Maritime.
Great questions, Tom. Let me start the last one, Touch on the second, Gareth might want to expand. And then I'll take your cycle question. On the last one, yes, but not organizationally. I mean it is definitely the case that we will increasingly focus on markets and We will identify and in fact Charlie already has a kind of candidate list of 6 to 7 markets within his portfolio where we could build that level of specialization.
In some of those, we already do have either media products or data products or other products that we could put alongside it. We showcased 1 in our release today, Aviation. We have a great events portfolio in Aviation. We have a media, a B2B media platform in Aviation. We have a data and research products in Aviation.
And so market specialization will increasingly be the case. Andy is already doing it in the Connect business in at Biotech Life Sciences and in Finance and in some others. So increasingly surrounding markets which have the features and the needs and the customer appetite for an increasing range of B2B services is where we think we can see growth. And that's sort of what I meant when I was talking about more quality of growth. We are not in the market for building more scale in the trade Show our Events business unless it serves our market specialization.
My comment on the 40% drop through would be, I mean, yes, your math is correct, I think, I would describe it as the now norm, not the new norm. In other words, that's what's happened in 2021. It is not what we're positing is going to be the drop through in 2020 2023, but Gareth might want to expand on that in a second. On the cycle, Yes, I think you're probably right. I mean there are 2 aspects to the cycle that are worth registering.
One is, it's just off cycle. So if you imagine yourself a citizen of an industry, So let's take a live example. You're in the U. S. Construction industry In January, you're used to going to World of Concrete in January for practical reasons.
It's the beginning of the year. It probably is a time when many of the players in the industry aren't out actually deploying construction activity or laying concrete or building. And therefore, it's an appropriate and convenient time for that industry to take time out, meet its customers, meet its suppliers, meet its wholesalers. When you conduct that event in June, there are a lot of better things you could be doing. And you're also halfway through a year.
So it has that off cycle effect. The other side is, if you then if we then run World of Concrete in January 2022, which we will do, actually it's pacing well. You've only got a 6 month sales cycle for the 2022 event. So you've got the off cycle reality for the industry. You've also got a shortened sales cycle for the team who are working with the industry to build the next product.
And that the combination of those two things will probably take until 2023 to fully wash through. But it's more than just the date. It's what it means in terms of your time to market and your ability to be able to work with your customers and your partners your suppliers. Do you want to expand on the drop through point Gareth?
Yes. I think we're kind of just slightly mixing 2 things up, which is one is the kind of year on year Change in the numbers for the full year. And then the other thing is the movement on the guidance, because what we've announced today is a £100,000,000 increase in the revenue guidance, Because we hadn't put any OP guidance out before such we're not moving the OP guidance. So to give you your drop throughput I think that's very easy to work off last year's number which I think was about $268,000,000 of OP. If you then put on the £60,000,000 extra indirect cost savings, which you remember from year end we said weren't crystallized in 2020 That gets you up to a certain point.
Then you have the revenue increase at about say 50% drop through in terms of this year's numbers and then you have the FX headwind on it And that gets you to about €375,000,000 overall in terms of the movements.
All right, John. I'm going to take one from the webinar, if I may, so I may come to you. We take a question from the webinar, please?
Certainly. Our next question comes from Matthew Walker from Credit Suisse. Please go ahead.
Thanks a lot. Good morning, everybody. Good morning, Steve and good morning, Gareth. First of all, Stephen, I don't want to still need to do yourself out of the job, but have you had any private equity interest in any of your assets for the whole company? Or do you expect to do so?
Because with the growth coming in Intelligence and TNF going up, It looks like quite an attractive proposition. That's the first question. The second thing is on travel budgets. Obviously, we hear a lot about how travel budgets are not going to be fully restored. But when you look at the SME base, Is that a different discussion?
I can see why people might be fighting with a large corporate to get their travel budget for anything Even including Exhibitions restored. But if 75% of customer base is SMEs and they're kind of their own boss, Can they just basically decide what their travel budget is? And so are we over worrying about travel budget As it pertains to exhibitors and attendees. That's the second question. And then the last question is we just heard from Velez talking about analytics growth in different divisions.
What percentage of analytics as you would define it in your FTM business Taylor and Francis?
Sorry, Matthew, I didn't catch the last bit of your last question. I apologize.
It was just a question about analytics As opposed to journals and open access and books. What's the proportion or percentage of analytics Revenue in Taylor and Francis.
Okay. Well, thanks for your questions. I will I think look I think I'll try and answer these ones. Come in if you want to Gareth. First of all, I'm glad that someone else is concerned about my job security Matthew, so thank you for that.
And I agree with you that we have a very attractive portfolio of businesses and we remain very confident in their future growth value. And I mean all joking aside, we're a public company. We clearly pay attention to any declaration of interest and we'll continue to do so. But right now, we're focused on what we're laying out today, and we feel very confident about the future growth potential of the individual businesses in the portfolio. The only businesses that we're actively engaged in discussions about disposal of the 3 businesses in Informa Intelligence in our asset intelligence portfolio.
And we intend to go into 2022 with a very focused portfolio in Informa Intelligence and we think there is real value there. But more importantly, we think there is real opportunity for further growth and even greater value on a going forward basis. And we believe the same is true in advanced learning and in the B2B events market, both physically and digitally. On travel budgets, I 100% agree with both of your comments. I think there is an entire difference between how you view travel if you are running an SME or indeed if you own an SME or indeed if you're running 1 than if you're in a corporate.
I mean, A, it's your money often. And B, as we tried to indicate earlier on, the value of trade show participation is directly correlated to your customer retention scores, your revenue growth and your ability to expand distribution and market access. And the efficacy of that participation way outweighs, way outweighs the travel or participation costs. We've talked about this pre COVID many times. Matthew, as you know, I mean for customers in that category, they're making a 10, 20, 30, 40x return on their investment in participation in a trade show.
And if you've had the pleasure that I've had over the many years now of wandering around trade shows speaking to those customers, If you're ever feeling depressed, that's a very enjoyable experience. So we are very confident that for the SME community, they have a completely different view on corporates. I think therefore corporate travel will be slower to return. But that I think requires us to be a little bit adept and flexible about how you encourage corporates to participate maybe in a different form. It could be less physically and more digitally, and that might lead to bundled offers, which we're already trialing in some markets.
It might mean that they have a lower physical presence, but a higher digital presence. That doesn't necessarily change the revenue mix. It doesn't change the revenue outcome for us, but it might change the revenue mix for us. So I think there are different ways in which you can address what might be a slight a greater degree of caution in 2022 for corporates than for SMEs. On the analytics question, I've been buying myself time to Try and think and talk at the same time.
I just don't know the answer to that question because and I'm not asking you to tell me, I don't know what RELX meant by that reference or that categorization. I mean at one level, every single thing we do in Our academic publishing business in some way, shape or form requires a level of analytics because you have the process of screening for accuracy or plagiarism or sourcing or links or uses data analytics and platform services to read the documents, read the manuscripts, to do reviews. So there's an embedded level of machine learning activity in that business anyway. For every institutional customer relationship of scale, we're providing significant analytics services to those institutions on usage levels by subject, by category, by author, by datetime, by search. So I find it quite difficult to put a number around that, but I'm sort of in the room looking at Richard and visually throwing that question to him to come back to you with a deeper answer at another time.
Should we take a question in the room?
Thank you. It's Fiona Ralford, Williams from Edison. First of all, can you give us some more color on the pricing environment and the subscription growth, A little bit of whether there's volume or pricing in there and what sort of resistance levels there are to Pricing in the market. And the second is on costs. What's your experience at the moment in terms of both The venue pricing situation and more generally across the group in terms of people costs, particularly if you're expanding your capabilities in data and analytics.
And the third was on hybrid. Just as things progress and the balance shifts Towards more people in the room and fewer people attending virtually, how do you ensure that you still deliver good value for those people who are not physically with you?
That's a great last question. So I'll come to it last. Let me touch briefly on the volume not price or volume and price. And Gareth, you might want to come back to that. And I'll touch on cost, go back to hybrid.
My Understanding is that in the main, our performance in all of our markets is largely volume. I'm not saying there's no price, but it's largely volume. I mean, as a general rule, and we've touched on this historically, we tend to be modest on price in all of our markets for a whole variety of reasons, which we can get into. But generally speaking in all of our businesses, if you think about our business model, whether it's in the Events business or in the Academic Publishing business or in the our Information Services business, we are part of a market. And I've certainly I've always taken the view that you never want to be on the wrong side of over earning your position in your market.
Some of our industries are more alive to that, of which probably the advanced learning market for understandable reasons is probably the most. But ironically, the deeper you get into a market, the more secure your position is, but you just don't want to abuse it. And that's kind of where our dial is at. It doesn't mean that we don't ever increase prices, we do, but we are very sensitive to how we do that. And when we do, we try to do it alongside new products, additional services, more value.
And that seems to have served us well over time. And I see no reason I don't see anything about the COVID circumstance that changes that. On costs, Venues is a mixed picture. I think generally speaking, Charlie and Andy are in the room. I think we would say that the venues by and large around the world have been responsible.
I think that would be they've been very responsible partners, flexible, in many instances, way beyond our contract entitlement on timing, on payment method, on volume. So I would put on record that we have deep and meaningful relationships with many venues around the world and they have served us well and I think that has served the industry as well. On a going forward basis, I think things will change. They run businesses, we run businesses. And so I think there will be more of a commercial engagement over the next year to 2 years about how do you maintain the same level of commercial flexibility on a pay as you use or pay as you don't use basis or don't pay as you don't use basis.
And who shares Who takes the hit for the on cost for some of the hygiene and security costs of keeping? But I think we feel that we have been very open with our partners and by and large they've been responsive and we would hope that that would continue. On hybrid, well look, I think the analogy is, I'm sure you know this yourself from running meetings. If you run a meeting and everybody is in the room, you all talk to each other. If you run a meeting and No one is in the room, then everyone is in the same place.
It's when it gets to be hybrid that it gets more different. And that's no different if you're dealing with a meeting of 20 You're dealing with an event of 20,000. It just requires a lot more technology if you're dealing with an event of 20,000. And that's kind of what I meant on my layer chart I was talking about layer 2, what we call in jargon the technology service stack. You have to have a capability to enable you to allow a non physical participant to be having an experience that doesn't feel like they're a sort of awkward unwanted participant in a happy event that they're not really enjoying.
And that speaks to access. It speaks to the ability to be able to go offline and online simultaneously to be able to move across meetings, to be able to dip in and dip out of meeting rooms, to be able to listen and participate in real time without kind of bad linkage and poor access. It speaks to how you provide information in advance of the event and after the event. And all of that requires a lot of differing capability at different levels of of the product offering. And there are many people in the room who've been burning the midnight oil on building that.
And I think our product has got better and better. Initially, I think we would describe our activities in that area broadly as a very enthusiastically organized scramble to stage 500 virtual hybrid events in real time immediately from a standing start. A year on, We've become quite a sophisticated operator of how to do it. And in some instances, I would say best in class. And I think there was a brief window everyone thought this was a secret sauce that no one else could do.
I think we now feel very confident we know exactly how to do that. On costs, on people, Yes, you're correct. I mean, look, our people, some of whom are in the room, like many people in many businesses that have been affected by COVID, have been living on thinner rations than would ordinarily be the case. And that's you can't continue in that position forever or else You'll wake up one day and there'll be you'll be a smaller company for the wrong reasons. So we need to adjust for that.
And in data and analytics, you're correct, that's a market that's very hot for talent and prices are high. So I think there is some cost pressure. And the challenge for us is how do we manage our cost profile and our revenue return and our expansion. We We're confident that our subscription and data businesses are now in something resembling permanent growth mode. So that gives us some lift.
We're pretty confident that maybe with some bumps on the road, our Physical Events business is now in reinflation. We could debate pace and rate. So that gives us some return. We're increasingly confident that we can see revenue in attendant digital services, but that probably requires costs before revenue. And that speaks to, I think it was Nick Dempsey's question online about how much investment might be needed in GAAP to accelerate that by 'twenty three and 'twenty four.
But I think we know how to do that. I think we know how to do that.
Should Should we take
a question online from the webinar, please?
Thank you. We move on to Patrick Wellington from Morgan Stanley for
I've got some mundane questions About some of the remarks that you've made. So Stephen, you said at the beginning that exhibitions would see 2 times the revenue That we did in the first half in the second half. So which revenue number are you referring to? Because if you add up the events divisions, that's revenue of €281,000,000 But there was also a number of €150,000,000 for physical So which number should we be seeing twice the amount of in the second half? While you're thinking about that one, The second question relates to your choice of shows and their performance in 20 and 2022.
As Nick was pointing out earlier, World of Concrete and Aripitof Medlab, you think will run about 60% of 2019 In 'twenty two and the Chinese showed 100%. So working roughly on the basis that Asia is 40%, the U. S. Is 40% and Europe is 20%. Are we basically saying that 60% of the business is going to run at 60% of the 2019 level, 40% is going to work at 100% and the whole thing is going to come out at about 18% and knock a bit off because Europe will do a bit worse.
So we're looking at 75%, 18% as an index for 2019. Is that The subliminal message that you're trying to send us there. And then my third question goes back to the €1,700,000,000 before it became the €1,800,000,000 If you remember the slide, when that was originally announced, euros 840,000,000 of that was coming from the subscription businesses, euros 250,000,000 from events mainly in China and euros 550,000,000 from a mix of Virtual Events and Digital Services. If we were to recreate that slide now for the SEK 1,800,000,000, How would those 3 components look?
Do you
want to take the second one?
Patrick, thank you very much for your question. And that's a shining example of how you can have powerful contribution during a hybrid event. Let me try and get some of these half right and then Gareth will polish them a bit for me. What I was referring to in my 2x number was I just was carrying in my head what the total revenue was for all three of our events led businesses in the first half and what I think it will end up being in the second half. It wasn't a specific comment on exhibition.
So in round numbers, In my head, our event led businesses did around £300,000,000 of revenue in the first half. That's about right, isn't it? And I think we'll probably end up doing about £600,000,000 in the second That's roughly what so that's what that number is referring to. Now clearly underneath that revenue of £900,000,000 It is not all face to face events. It's a mixture of other products and services because as we exchange, we have some data revenues, we have some research revenues, we have some media revenues.
So it was an aggregate number, not a specific number. I hope that's clear. I'm looking at Richard and Gareth, But I think my answer to your ready your teaser number 2 is broadly yes. I think that's roughly about right. And whether we get there through the route that you're describing, I don't think we yet quite know.
But I would share your view that I think China will continue to be strong, possibly even stronger, Mainland China. It's an open question about Hong Kong at the moment, but I'm marginally more optimistic about Hong Kong through 2022 than I have been in 2021. I think you're correct that in North America, I mean, we know what some of the pace rates are in North America already for 2022, but it's early. And if confidence continues to compound, there might be some upside there. But based on what we know today, I think your math is broadly correct.
And probably the googly in that is what happens in Continental Europe and whether Continental Europe returns in the second half, which we believe it will in 2021 and how that then leads into 2022. But I think as a planning assumption, I think around 75% to 80% is rational to me. Would you agree with that guys?
Yes. I think on Berry and the mix, you say by geography As Patrick outlined, it will vary by geography. But I think in terms of number of events, we're going to be operating a few more events next year. And then in terms of how it comes back overall in the recovery maybe sort of 65%, 70% of 2019 levels come 2022, but that sort of recovery feels about right. They're all broadly in the mix.
Did you I don't know if you heard that offside contribution from Richard, which is your forty-forty-twenty split is an accurate split in round terms of Informa Markets. It's not so true of Connect and Tech. So there might be some nuance there. But in essence, I think we're broadly agreeing, although it would appear that the CFO is slightly more cautious than the Chief Executive. On your third question, I have absolutely no idea.
Richard, Gareth?
Yes. So in terms of the increase from 1.7% to 1.8%, I think you've got a couple of different dynamics in there. What you've got In the subscription businesses, a bit ahead as both Taylor and Francis and Inform Intelligence approving to trade a bit better in the mix than we had, so a bit of upside from there. Moving into events, Mainland, China and Outdoor is as we said before that's performing to plan and performing well. And then we've got to be a little bit of a shift between The face to face events revenues, which are obviously coming back more than we thought when we set the 1.7%.
But conversely, what we're seeing is some of the budget switching out of, say, some of the media or virtual products switching back into face to face. So what you've got is a bit of a kind of decline off the numbers that were in the 1.7% for media and virtual events and hybrid events and then an offsetting increase in the mix, which more than offsets that to get you up to the 1.8% overall for the full year. So I think those are the three dynamics, a bit better in subscriptions, a bit off in terms of virtual, but more than compensated by an increase in face to face.
Thanks, Gareth. Patrick, are you happy with that?
I'm content. Thank you very much.
I'll take that. We'll take a question in the room, if we may.
Mine is much simpler. So Kaustub Joshi from Standard Chartered. You mentioned about Iris, right? So is the plan going forward or is the vision going forward to have a multidivisional relationship With existing and new customers, what you referred to as bundling and then probably having a subsidization of 1 division with the other. Is there potential within the existing portfolio of clients to do that?
And is there an upside in the wider scale and the margin at the end of that? Is that how you look at it?
It's a very fair question. The answer is, in short, that's not our thinking. It is our intention that Iris will be a multi divisional capability across our 3 event led businesses. So all of the data from Informa Connect, Informa Tech and Informa Markets will be part of our Iris platform. But that will then be executed on a by market or by submarket basis.
So If you like, the data engine will be multidivisional, but the go to market will be by division or by sector. Question on the webinar?
Thank you. We move on to Sarah Simon from Berenberg for our question. Please go ahead. Yes. Morning, I've got a couple of more kind of conceptual questions about strategy rather than Patrick's very helpful numbers ones.
First one was, I think if people look at Informa, there's been always a thought that in time you could potentially split the business apart or somebody might want to By the company, it's split the business apart. So first question would be on Taylor and Francis. That sounds like it's probably relatively separate from the GAAP program In the Intelligence and Events businesses, is that fair that TNF is still going to be Quite separate. And then the second part of that would be you mentioned buying more SKA and the best just for that but more to Market specialization. Would you actually be interested in selling any of your events if they don't fit with Existing data or let's say complementary data and intelligence assets that you have.
And conversely, would you be interested in buying intelligence related businesses that would fit with the Events business as part of the kind of Closer integration strategy. Thanks.
Thanks, Sarah. You'll forgive me, But for obvious reasons, I won't comment on the kind of the attractiveness or otherwise of individual businesses and whom I may not be interested in. Although Your question prompted me to reflect earlier this week, we had a dinner to say thank you to our I'd like to Chairman departed from the company, not departing anyone else, Derek Mapp, who and that caused us to reflect on the Taylor and Francis business in particular because he came to the company through the Taylor and Francis acquisition. And it reminded us that when Taylor and Francis joined the group, it had, I think revenues of £30,000,000 I think we now have a business with revenues of £550,000,000 And even in my time in the group, Sarah, which is now just over a decade, that business is pretty close to twice the size it was when I joined the group. We've always taken the view that we own these businesses because we are good operators of them, not for some conceptual reason.
We think they hang together, but they also hang separately. And it's that combination of a shared culture, shared values, a high degree of commercial agility and ability to service niche markets with a low cost but a high flexibility. That doesn't happen by accident. That happens by design and by daily execution. And we've been doing that daily execution for nearly 20 years and certainly in my case for coming on for April 9 years, and we spend a lot of time trying to be good at that.
If other people felt that these businesses were more valuable in someone else's hands, then We're always open to that conversation in a way that we should be. But meanwhile, we see real value in our ownership of those businesses. And in Taylor and Francis, yes, that will be part of the GAAP-two program. We do believe there's a case for investment in that business. We think the expansion of access to Further funding sources in international research and development beyond libraries is a real market opportunity for that business.
We think we can get the growth rate of that business up. We think we can diversify the product and service offering beyond just format based product into other knowledge services. So we do see that. On our Events portfolio, I mean, again, I mean, I would never say absolutely not. But one of the advantages of our business is we it didn't arrive the way it is by accident.
We were really quite purposeful over the last period of those businesses that we acquired. And we did it in markets, which we believed had the attractiveness for long term value. And yes, we might be interested in adding what you described as intelligence like assets around those businesses. Indeed, we've done that. The Capra Aviation Data Business, which sits in our Aviation portfolio we acquired 2 years ago, before COVID, as part of our market specialization strategy just sit alongside our B2B Aviation Week brand and our MRO Events portfolio.
And that operates as a market category. Pre COVID, that was a $100,000,000 business, tracking very nicely in growth in all three products and services. So we would be very interested in expanding our service offering around our Events franchises, but we believe that in the main, not necessarily 100%, Sarah, but in the main, The event brands we own, the franchises that we operate and the industries that we serve are ones where we can round out the service offering either through organic skills and service capability or by spot acquisition and addition, and we're very open to that. And I hope that helps answer your question. Have I Have I addressed your question, Sarah?
Yes, that's perfect. Thanks a lot.
Thank you. Is there another question on the webinar?
Thank you. We take a question from Adam Berlin from UBS. Please go ahead.
Yes. Hi, everyone. Thanks for taking these two quick questions from me. I enjoyed the conversation before about whether 2022 event revenues will be Somewhere between 65% to 80% of 2019 event revenues. I just wondered, can you clarify exactly what the right number is to multiply About 65% to 80% buy because obviously since 2019, currencies moved.
You talked about some bad brands that won't come back or will only come back as 5 good events. And there's some other issues with things moving in and out of Informa Tech. So just can you help us Work out what the right 2019 rebased number is to kind of think about. And then second quick question is when you then model that 2022 revenue, what Block through should we be assuming on EBIT into 2022 versus 2021?
Thanks, Adam. I am going to hand both of those questions to Gareth.
Thank you very much. In terms of 2022 revenues, yes, I mean 5% to 80% you said in the question. I think in terms of sort of consensus and things, the numbers are broadly around that sort of level off of the 2019 levels. And that's really because we're anticipating things like international travel restrictions, domestic recovery, Off cycle events were sort of things and why we're not seeing that come back greater than we did previously. We're not really set in stone in terms of the number of events we're going to operate and also therefore what events are going to come back versus what's not going to come back.
I think the major events probably will all be operating in 2022, some still off cycle, but more on cycle. In terms of the small events, they may be slower to come back and they may be the events that we ultimately decide not to bring back at all. But I think really at this stage in terms of our planning assumptions Around 2022, we haven't really firmly decided on the smaller brands exactly what we do want to bring back and what we don't want to bring back. I think overall sort of consensus for 2022 revenue is around about £2,300,000,000 for the group based on that sort of shape of recovery from the Events businesses. If you sort of look at OP, I think you've got revenues to say And about a third of the levels of 2019 and it's 20 nineteen's reported levels I think we're talking to.
You'll see some costs come back into the business. To the earlier question Steve mentioned there are some costs that we will see come back into the business. That will be a mix in the cost base of things like Property and technology costs, which we'll be working hard to keep out of the cost base that we saved, but some of the things like some of the staff costs and some of the things like bonuses, We'd be delighted to pay bonuses again in 2022, because our colleagues definitely deserve that after everything they've been through in the last 18 months. So There'll be a return of some costs coming back into the business of things I think which will be an important part of the mix. But in terms of specific OP margin in 2022, I think that's something we'll come back to Capital Markets Day, we've got a clear idea of what we want to do in the growth acceleration plan too.
Is that helpful enough Adam?
I look forward to December.
You and me both. You and me both. Another question on the webinar?
At the moment, we have no further questions on the webinar.
Okay, great. Is there a further question in the room? No, well on that note, I will thank you very much. Thank you to everyone who joined us on the webinar. Thank you very much to those people who came here today in person.
Invitations for the Capital Markets Day will be open. So please do, if you can, come along either in person, and I think we will run that also as a hybrid event as well, or certainly the main forum part of it. And in the meantime, if you're having a summer, have a good one. Thank you very much.