UBM Says Outlook Stable As It Takes More Of Its Business Digital


Credit: UBM

Revenues and profits are down for United Business Media (LSE: UBM), but the company says its future outlook is stable as it focusses more on emerging markets and diversifying its business even further away from its print legacy. It also benefited from a better-than-expected bill from the UK tax man. For the year to December 31, revenues were £847.6 million, a fall of more then 4 percent from 2008’s figure of £887 million, while operating profit was £171.2 million, a drop of 1.3 percent.

UBM is continuing to look for ways of making more money out of digital. This week, it put up a paywall around Building magazine’s online content — one of the print magazines that Levin acknowledges is working as a business. Yesterday it relaunched its Comdex trade show as a virtual event. And last month UBM announced it would buy in-game advertising agency Game Advertising Online for $1 million (plus a potential earn-out of $7 million).

David Levin, CEO of UBM, says that 95 percent of profits now come from three of its four business divisions: events (51 percent); data/services/online (22 percent);and targeting/distribution/monitoring, which includes businesses like PRNewswire (26 percent). Print now represents only “a very thin sliver” of profits at 5 percent, compared to 14 percent a year ago. Emerging markets revenue went up by nearly 40 percent, with China, India and Brazil accounting for 20 percent of its operating profits, compared to 15 percent a year ago.

Print: The legacy of the business saw “a bloody hard time” in the last year, says Levin. The printed publications division had a 23 percent reduction in revenue (taking currency adjustments into account) to £165.8 million and its operating profits fell by more than 60 percent, to £8.9 million. UBM shut down 31 titles in 2009 and now has 109 remaining, yet this only makes up 5 percent of the company’s profit. “Our legacy biz in the UK is print, which is why we are so unprofitable here.” Levin emphasized UBM still sees a lot of opportunities: “There is a definite place for print…we still think there are too many B2B titles out there.” He says UBM is taking the “last man standing” approach to the business now: “The ones that have made it are the ones which will make it.”

Events: Still the company’s largest source of revenue, UBM is also continuing to diversify here as well. Today it announced two more trade show acquisitions, E Commerce Expo in London for £0.6 million and Sign China in Guangzhou for $10.7 million. UBM’s new “virtual trade show” concept comes at an opportune time: although stand sales have remained constant over the last year, UBM — like other events companies such as Reed Elsevier (NYSE: RUK) and Informa — says the number of people attending and sponsoring the shows has dropped as companies reduce travel budgets in the tight economy. Events revenues were down by 1.5 percent to £288 million.

Data, services and online: Levin says the aim will be to “focus on niches in which we work.” Tech and healthcare remain the two biggest sectors for UBM. Levin says that although online marketing and advertising revenues were down, “overall profitability was up after significant cost reduction,” a rise of nearly 22 percent to £37.9 million. Revenues were up, but only after you take currency changes into account: £233 million, a rise of 3.4 percent. The company’s goal is to get margins up to 20 percent by the end of this year. Expect to see more of its online publications erecting paywalls, then?

Targeting, Distribution and Marketing: UBM put out 108,000 press releases last year and says it now has 80,000 customers, covering a massive range of categories such as financial information, trade shows and new products. Levin says he still sees a “tremendous opportunity” to make further acquisitions in this space. PRnewswire has new leadership and “we

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