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Euromoney Institutional Investor PLC

Euromoney Institutional Investor PLC. Analyst and Investor Seminar January 31, 2008. Group Overview. Colin Jones, Finance Director. Trading Update / IMS. Q1 revenue growth in line with board expectations Continued strong growth in subscription products and delegate revenues

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Euromoney Institutional Investor PLC

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  1. Euromoney Institutional Investor PLC Analyst and Investor Seminar January 31, 2008

  2. Group Overview Colin Jones, Finance Director

  3. Trading Update / IMS • Q1 revenue growth in line with board expectations • Continued strong growth in subscription products and delegate revenues • Some signs of slowdown in advertising and sponsorship from global financial institutions esp in credit and structured products • Emerging markets remain in good shape • Current trading remains in line with board expectations and Q2 visibility consistent with 2007 • Net debt reduced by £13m to £192m since year end • 2.5m new shares to be issued mid February under CAP incentive 3

  4. Strategy is working……. • Maintain operating margin: • Continued focus on high margin product and tight cost control • High operational gearing but low fixed cost base • Drive organic growth: • Opportunities for geographic and product expansion esp. emerging markets • Emphasis on high growth subscription products • Investment in electronic info services • More of the same (bigger & better) remains key growth driver • Acquisitions: • Focus on bolt-on acquisitions esp. in data and electronic publishing • Readily financed from strong operating cash flows • Success of strategy reflected in record 2007 results • Group more focused, more robust and higher quality than 2001 – better downside protection 4

  5. More diverse business… £m Operating profit before unallocated costs 5

  6. …with higher margins… Operating margin % 6

  7. …a better revenue mix… 2001 Other 2007 12% Advertising Other Delegates Advertising 5% 24% 37% Delegates 22% 24% 6% Sponsorship 21% 15% 34% Sponsorship Subscriptions Subscriptions Significant growth in revenues from subscriptions 7

  8. … a broad geographic spread… 2007 UK 16% Rest of World 37% 47% North America Revenues by destination 8

  9. ... and higher quality earnings… EM/II brands account for only35% of profit (2001 65%) 9

  10. Three hidden gems 10

  11. Diane Alfano Managing Director Institutional Investor Memberships 11

  12. What is a membership? Institutional Investor Memberships are private peer-group networks for senior executives at leading asset and alternative asset management firms in the US and Europe who come together at roundtables to discuss critical issues. 12

  13. II Memberships • First membership launched in 1970 • Currently serve 12 distinct executive roles – 881 memberships • Exclusive and Invitation Only – we serve the largest investment managers • 88% of the worlds largest asset management firms have a membership • Members are drawn from 21 countries • Members are Peers / Competitors – Buy Side Only • Average annual Subscription Fee of $25,000 • Director retains editorial control of content. Content is not sponsored. Editorial objectivity and impartiality are its hallmark • Focus on client service 13

  14. Financials 14

  15. Key Characteristics of Memberships • High level face-to-face interaction can’t be replicated by the web • High barriers to entry/strong defensible niches against competition • Proven resilience to economic downturns • Predictable and stable revenue stream and cash flow - Subscription-based model - High renewal rates- in excess of 88% for the last three years - Not advertising dependent • Fees pre-paid annually / pricing power / pricing leader • High operating margins average 40% • Brand loyalty 15

  16. LAUNCHED MEMBERS Institutional Investor Institute (Heads of marketing) 1970 111 TraderForum (Heads of Trading) 1984 167 European Institute (C-Suite Executives) 1988 92 Fixed Income Forum (Heads of Fixed Income) 1993 51 Financial Technology Forum (Chief Technology Officers) 1995 104 Investment Funds Institute (Heads of Retail) 1995 43 European TraderForum (Heads of Trading) 1999 24 US Institute (C-Suite Executives) 2000 90 Global Fixed Income Institute (Heads Of Global Fixed Income) 2000 43 Hedge Fund Institutional Forum (Heads of Marketing) 2004 78 European Institutional Investor Institute(Heads of Marketing) 2006 36 The Legal Institute (General Counsels) 2007 42 Total 881 members II Memberships - diversified with changing markets 16

  17. Bespoke Membership Benefits • Research and surveys • Website: Interactive password-protected. Facilitates knowledge sharing; member Q & A’s • Exclusive access to topical ad-hoc meetings • Intimate regional member breakfasts, lunches and dinner meetings • Post-event access to summaries and presentations • Discounted access to ultra high paid ticket events e.g. Sovereign Wealth Funds Roundtables 17

  18. Clients and Market • Money management firms • Hedge funds • Banks and insurance companies • Corporate in house pension funds • Sovereign funds • Geographical split of members 2007 • 71% US • 29% European 18

  19. Growth Strategy • New membership launches • COO Hedge Fund Forum – 2008 • Private Wealth Institute – 2009 • Sovereign Wealth Funds – 2009 • Scalable model • Replicating US memberships in Europe and Asia • Replicating memberships for new client base – hedge funds • Creating new ultra-high paid ticket meetings for members such as Asian and Latin American Sovereign Funds • Enhance pricing power through Web based research • Potential to sell additional products based on depth of relationship with member firms 19

  20. Business strengths • Subscription based business model • Diversified group of members/decision makers within the same company that control separate budget pools mitigating risk • 40 year track record of established demand for exclusive, high level forums • Member growth over the last six months • July 06 to Dec 06 – renewal rate was 89.6% with 71 new members • July 07 to Dec 07 Membership renewal rate was 90.1% added 101 new members 20

  21. Q&A 21

  22. Gary Mueller Chairman, ISI 22

  23. Mission Statement To be the recognized leading provider of emerging market economic, company and industry data and information 23

  24. Internet Securities Inc (ISI Emerging Markets) • Founded in 1994; acquired by Euromoney in 1999 • Delivers hard-to-get information on more than 80 Emerging Market countries through its award-winning online Emerging Markets Information Service, and several other products • Acquired CEIC Data Company Ltd (“CEIC”) in March 2005, the instrument of choice for economic research on Asia and the Emerging Markets by Economists around the globe • 480 People • 30 offices globally 24

  25. Financials 25

  26. Products • EMIS - Emerging Markets Information Service • CEIC Asia Databases • IFIS - Islamic Finance Information Service • IntelliNews • iSearch A complementary range of subscription products 26

  27. Revenues by Sector FY 2001 Consultants FY 2007 Corporates Consultants Financial Institutions Others Financial Institutions Government Corporates Academics Others Academics Government 27

  28. Revenues by Geography FY 2001 FY 2007 UK/ Western Europe Latam Latam UK/ Western Europe North America North America CEE CEE Asia Asia Successfully capitalising on demand from emerging markets 28

  29. New Product Initiatives • CEIC Expansion Countries: added 43 new non-Asia countries, service now covers 64 countries • Developed and launched CEIC Data Management platform (CDM), enabling global Internet access to the service. • DealWatch: Comprehensive data and forward looking editorial coverage of Emerging Markets M&A and ECM activity. • Compliance: Accurate information on key persons and companies critical to the Financial industry for customer verification and customer due diligence. Derogatory news from the EMIS database is included. Anticipating changing client needs 29

  30. ISI Growth Strategy • Market conditions • Emerging markets growth set to continue • Drive the Current Businesses • Grow existing customers and revenue streams • Upgrade existing products • Sector penetration • Seek New Revenues • Add new geographies • Develop new products • Bolt-on acquisitions 30

  31. Business strengths • Subscription-based model • High renewal rate • Business has grown every quarter • Business is diversified across geographies and sectors (financial services only 42%) • Established local sales force globally; in 2002 sales force was 29 people, now 52 people (80% in Emerging Markets) • Diverse customer base 31

  32. Q&A 32 32

  33. Bashar Al-Rehany Chief Executive Officer BCA Research 33 33

  34. Vision The leading independentprovider of top-down, macro economic investment research to financial institutions, corporations, governments and individuals globally 34 34

  35. Overview Founded in 1949 with The Bank Credit Analyst Independent provider of global investment research Coverage of all major asset classes and regions Client accounts range significantly in spend Current average account size increased 4 fold in 5 years 123 staff located in Montreal, London, New York, Hong Kong, San Francisco, Buenos Aires 35 35

  36. Financials 36 36

  37. Research Philosophy Define big picture (macro) environment and key themes “Connect the dots” - countries and asset classes Key Ingredients: Fundamentals Technicals Models Judgement and intuition Complementary objectives: Thoughtful and leading edge research Timely and accurate market calls 37 37

  38. Product Philosophy 38 38

  39. Products Investment Strategy Global Investment Strategy U.S. Investment Strategy European Investment Strategy Emerging Markets Strategy China Investment Strategy The Bank Credit Analyst - Monthly Daily Insights Market Analysis U.S. Equity Sector Strategy Global Fixed Income Strategy Foreign Exchange Strategy U.S. Bond Strategy Commodity and Energy Strategy 39 39

  40. Key Performance Indicators 40

  41. Business Development Philosophy Accelerated Sales Development Aggressive business development strategy Established geographic expertise Successful account managed model Global sales presence with 50 sales professionals 9 cities including London, New York and Hong Kong 41 41

  42. Clients and Market Clients Span Various Segments Money management firms Hedge funds Brokerage firms Banks and insurance companies Corporate pension funds Private investors Governments Sovereign funds 42 42

  43. Clients and Market Geographic Client Distribution 43 43

  44. Strategy and Prospects New product development Commodities and Energy, fiscal 2007 Premium Service – launched October 2007 Global Equity product, fiscal 2009 Real Estate product, fiscal 2010 Research group development Add breadth and depth Develop more bench strength Business development Strategically locate sales people globally Strong prospect pipeline Improve historically low trial conversion rate 44 44

  45. Strategy and Prospects Leverage Euromoney relationship Global presence Telesales expertise for lead generation BCA presence at conferences and events Enhance content delivery platform Webcasts Teleconferences BCA Portal 45 45

  46. Business Strengths High-end value added research content Strong brand and reputation Editorial and business independence Unique research philosophy Global research perspective Proprietary models and vast database of historical data Subscription model – strong deferred revenues Broad and diverse client base Established sales force in all major markets Historically demand has remained high in volatile markets 46 46

  47. Q&A 47 47

  48. Conclusion • Group more focused and more robust with higher quality earnings than 5 years ago • 5 year track record supports successful strategy for growth • Better downside protection from growing subscription businesses and more diverse sectors • Further cyclical balance from significant emerging market exposure • Strong balance sheet and highly cash generative • Well supported dividend strategy • Continue to invest in new products to drive growth • Growth strategy remains focused on investment in new products, leveraging the group’s strong brands and geographical expansion • Thank you and ….lunch 48

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