logo-loader
RNS
viewEuromoney Institutional Investor

Euromoney Ins.InvPLC - Publication of Annual Report and Notice of AGM

RNS Number : 2963X
Euromoney Institutional InvestorPLC
18 December 2019
 

EUROMONEY INSTITUTIONAL INVESTOR PLC

Publication of Annual Report and Accounts 2019
and Notice of Annual General Meeting 2020

 

18 December 2019

Euromoney Institutional Investor PLC ("Euromoney"), the global information business providing essential B2B information to global and specialist markets, has today published the following documents on its website www.euromoneyplc.com:

Document

Location

Annual Report and Accounts 2019

www.euromoneyplc.com/investors/reports-and-presentations/year/2019

Notice of Annual General Meeting 2020

www.euromoneyplc.com/investors/agm

 

The Annual Report and Accounts 2019, together with the Notice of Annual General Meeting 2020 and the Form of Proxy, have been posted or otherwise made available to shareholders. These documents have been uploaded to the National Storage Mechanism and will shortly be available for inspection at www.morningstar.co.uk/uk/NSM.

 

The Company's 2020 Annual General Meeting is scheduled to be held at 9.30am on Tuesday 28 January 2020 at 8 Bouverie Street, London, EC4Y 8AX.

 

The information set out below, which is extracted from the Annual Report and Accounts 2019, is provided solely for the purpose of complying with Disclosure and Transparency Rule 6.3.5R. The information should be read in conjunction with the Preliminary Statement announcement made on 21 November 2019.

 

Statement of Directors' responsibilities in respect of the financial statements

 

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulation.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have prepared the Group financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and Company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company and of the profit or loss of the Group and Company for that period.

 

In preparing the financial statements, the directors are required to:

 

•          Select suitable accounting policies and then apply them consistently;

•          State whether applicable IFRSs as adopted by the European Union have been followed for the Group financial statements and United Kingdom Accounting Standards, comprising FRS 102, have been followed for the Company financial statements, subject to any material departures disclosed and explained in the financial statements;

•          Make judgements and accounting estimates that are reasonable and prudent; and

•          Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and Company will continue in business.

 

The Directors are also responsible for safeguarding the assets of the Group and Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group and Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and Company and enable them to ensure that the financial statements and the Directors' Remuneration Report comply with the Companies Act 2006 and, as regards the Group financial statements, Article 4 of the IAS Regulation.

 

The Directors are responsible for the maintenance and integrity of the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

 

Each of the Directors, whose names and functions are listed on pages 54 and 55 in the Annual Report and Accounts confirm that, to the best of their knowledge:

 

•          The Company's Financial Statements, which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', and applicable law), give a true and fair view of the assets, liabilities, financial position and profit of the Company;

•          The Group Financial Statements, which have been prepared in accordance with IFRSs as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position, profit and cash flows of the Group; and

•          The Strategic Report and the Directors' Report includes a fair review of the development and performance of the business and the position of the Group and Company, together with a description of the principal risks and uncertainties that it faces.

 

Principal risks and uncertainties

 

The Board maintains overall responsibility for risk management under its schedule of reserved matters, whilst the Audit & Risk Committee has delegated responsibility for risk. The Risk Committee operates as a management committee and focuses on the day-to-day management of operational risk in the Group's divisions and functions, and reports to the Audit & Risk Committee.

 

The Risk Committee is chaired by the CFO and attended by the CEO. Our risk team is well integrated into our governance frameworks through regular reporting to the Audit & Risk and Risk Committees,

and when appropriate, the Board.

 

Euromoney continues to be exposed to different risks and uncertainties as a result of (1) the Group's global footprint; (2) the variety of its different products, services, markets and customers; and (3) the Group's approach to managing its portfolio of businesses in accordance with the strategic quadrants discussed in more detail on page 10 (of the Annual Report). On a practical level, this means that the Group allocates capital to assets more likely to generate a return in line with strategy, and divests businesses no longer meeting the 3.0 characteristics chosen by the Board. The Group is therefore frequently involved in transactional activity, which can present risks that need to be carefully managed.

 

The Group's principal risks and uncertainties are summarised below.

Downturn in key geographic region or market sector (cyclical downturn)

Key factors

Mitigation

Risk appetite

·      Concentration of customers in financial services sector

·      Global economic and geopolitical risk continues to create uncertainty in the UK and Europe over the UK's EU exit, the increasingly protectionist trade policies of the US and China and political unrest in Hong Kong. This puts clients budgets under greater scrutiny

·      Market shifts in the asset management market, including the shift towards passive portfolio management, pricing transparency regulation and new technologies continue to put downward pricing pressure on fees received by asset managers

·      Downward performance in certain commodity markets results in market participants having less discretionary spend

·      The Group actively manages cyclical risk through its strategic framework

·      The Group is undertaking a strategic review of Asset Management

·      The Group continues to carry out comprehensive risk reviews of its asset management businesses resulting in detailed mitigation plans for each business and continuous tracking of effective risk management

·      The Group's strategy is to increasingly provide services which are embedded in our customer's workflow which makes them more likely to be non-discretionary purchases

·      Marketing and sales operations in BCA Research and NDR have been restructured and increased investment allocated

·      The Group operates in many geographical markets and our businesses are encouraged to explore new ones

·      Diversification exists in sector mix and particularly so following acquisition of BoardEx

·      Ability to cut some costs temporarily and quickly

Risk tolerant
Prior years
(relative position)

2018: Risk tolerant

2017: Risk tolerant

2016: Risk tolerant

Post-mitigation risk trend

Increasing

Description of risk change

Global economic and geopolitical uncertainty is continuing

Board's view

There are limited options to mitigate impact of a significant cyclical downturn in the short and medium term. The residual risk will remain high.

The Board is carrying out a strategic review of Asset Management to assess whether the Group remains the best owner of the businesses over the medium term.

 



 

Product and market transformation/disruption (structural change)

Key factors

Mitigation

Risk appetite

·      Competition from existing competitors, new disruptive players and new entrants

·      Certain competitors can be less disciplined in capital allocation when investing in new products/
technology than a public company

·      New technologies change how customers access and use our products

·      Changing demographics can affect customer needs and opportunities

·      Structural pressure on customer business models will affect demand for the Group's products and services, particularly in financial services

·      Regulations such as MiFID II creating both challenges and opportunities in asset management sector

·      Free content available via the internet increases the threat to paid subscription model

·      Inability to make acquisitions in line with the Group strategy

·      Strategy designed to appraise and evaluate structural risks and respond to them, taking advantage of opportunities where identified

·      Regular CEO-led reviews across all divisions

·      Entrepreneurial approach

·      Effective management reporting with regular forecast reviews

·      Portfolio spreads risk to some degree

·      Portfolio management allows the Group to sell structurally challenged businesses and to buy structurally strong ones

·      Cyclical review of divisional activities by the Risk Committee

·      Streamlining of operations in our Investment Research businesses and improved sales co-ordination in our Institutional Investor division results in a more joined-up approach to understanding our customers

·      Creation of larger divisions such as Fastmarkets and Financial & Professional Services provides those businesses with scale and better ROI outcomes

·      The Group has over 350 staff in its Chennai and Sofia offices allowing it to access and invest in skilled staff

Risk tolerant
Prior years
(relative position)

2018: Risk tolerant

2017: Risk tolerant

2016: Risk tolerant

Post-mitigation risk trend

Unchanged

Description of risk change

As an entrepreneurial business, the Group is experienced at managing this risk and our larger divisions are starting to invest more in product and client-facing technology

 

Board's view

Controls are in place, and scaling individual businesses helps, but exposure to this risk will remain moderate.

 

Exposure to US dollar exchange rate

Key factors

Mitigation

Risk appetite

·      Approximately three-quarters of revenues and profits are generated in US dollars, including approximately 40% of the revenues in the UK-based businesses. This gives significant exposure to movements in the US dollar for both UK revenues and the translation of results of foreign subsidiaries

·      A significant strengthening of sterling against the US dollar would reduce profits and dividends

·      The Group also undertakes transactions in many other currencies, although none currently pose a significant risk to the results

·      The UK's exit from the EU may result in significant currency fluctuations depending on the terms of the exit

·      US dollar forward contracts are used to hedge up to 80% of UK based US dollar revenues for the coming 12 months and 50% of these revenues for a further six months

·      Exposure from the translation of US dollar-denominated earnings is not directly hedged but is partially offset by US dollar costs and the use of US dollar-denominated debt when debt is required

·      Sensitivity analysis is performed regularly to assess the impact of currency risk and is reviewed by the Tax & Treasury Committee

·      Given heightened volatility, the Group hedging strategy is under frequent review and includes regular impact analysis of various exchange rate scenarios together with internal risk mitigation such as natural hedging of non-sterling earnings

Risk tolerant
Prior years
(relative position)

2018: Risk tolerant

2017: Risk tolerant

2016: Risk tolerant

Post-mitigation risk trend

Unchanged

Description of risk change

The Group is experienced at managing risks related to its exposure to the US dollar and this risk remains unchanged

Board's view

Although the Group considers this risk unchanged, the increased volatility and uncertainty of sterling against the US dollar in the event of the UK's exit from the EU is expected to continue for some time.

Information security breach resulting in challenge to data integrity

Key factors

Mitigation

Risk appetite

·      As an information services business, the integrity of the data embedded in our products is critical in terms of trust and reputation

·      The Group is a data business and creates high volumes of proprietary, commercial data, while also processing B2B customer personal data and employee personal data

·      Increasing number of cyber-attacks affecting organisations globally

·      The Group has many websites and is reliant on distributed technology, increasing exposure to threats

·      A successful cyber-attack could cause considerable disruption to business operations, lost revenue, regulatory fines and reputational damage

·      Privacy regulations (eg GDPR in Europe, Californian Consumer Privacy Act in the US) are increasingly stringent and regulators vigilant in relation to data breaches, increasing the risk of a breach and associated fine, civil proceedings or reputational damage

·      Technological innovations in mobile working, cloud-based technologies and social media introduce new information security risks

·      Threats such as ransomware and crypto mining require the Group to adapt to a continually shifting landscape

·      Phishing remains one of the most serious threats to network security

·      Chief Information Security Officer appointed in November 2018

·      Increased the size of the Information Security team

·      New Information Security strategy approved and in process of rolling out

·      Investment in 'BISO programme' (Business Information Security Officers) for non-security specialists who will attain accreditation and know-how, leading to increased awareness and expertise in businesses

·      Security governance provided by Risk Committee and Information Security Steering Group

·      Approved information security standards and policies which are reviewed on a regular basis

·      Continuing education and awareness programmes for all staff

·      Active information security programme (including access management and cyber-resilience planning) to align all parts of the Group with its information security standards

·      Crisis management and business continuity frameworks cover all businesses including disaster recovery planning for IT systems

·      Multi-layered defence strategy

·      Robust IT security due diligence framework for acquisitions

·      Access to key systems and data is restricted, monitored and logged with auditable data trails in place and project underway for bolstered identity access management

·      Comprehensive backups for IT infrastructure, systems and business data

·      Continued investment in dedicated IT security roles in Central Technology

·      Professional indemnity insurance provides cover for cyber risks including cyber-attack and data breach incidents

·      Information security is reviewed as part of our internal audit process

·      Regular information security training for employees, contractors and freelancers

·      Incident response playbook

Risk tolerant
Prior years
(relative position)

2018: Risk averse

2017: Risk averse

2016: Risk averse

Post-mitigation risk trend

Increasing

Description of risk change

Most industry information security analysts agree that this risk is increasing and warn that companies will continue to face more regular and sophisticated cyber-attacks

 

Board's view

The use of technology creates this inherent risk. The Group strives to balance the need to innovate through the use of technology while responsibly managing risk, including through the use of third party expertise. While controls are in place to detect and prevent attacks, attacks are inevitable. Therefore, controls must extend to effective attack identification, management as well as mitigating impact. Controls are reviewed regularly and, where required, enhanced. However, the rising number of cyber-attacks affecting organisations globally, the Group's greater dependency on technology and the growing threat from cyber-crime are increasing this risk.

A failure to comply with law, regulation or contractual obligations resulting in financial loss
and/or reputational damage

Key factors

Mitigation

Risk appetite

·      The Group operates in many jurisdictions and must be compliant with all applicable laws and regulations

·      The Group's businesses publish, market and license increasingly complex content and data which in some cases its customers may choose to rely on when executing transactions

·      Risk or reputational damage can arise from inappropriate reliance on third party data, errors in underlying data or content, failures of data integrity and failure to educate customers on appropriate usage of data

·      A number of our businesses operate in an environment where privacy regulations are increasingly stringent

·      The Group relies on third parties, usually in non-core markets, to represent the Group and the Group may be legally responsible for their failure to comply with law or regulation

·      The Group conducts business globally in a geopolitical environment in which we see 'sanctions creep' thereby increasing the risk of unintentionally being in technical breach of sanctions

·      Success of the Group is dependent on client confidence in integrity of products and brands

·      Claimants can forum shop when determining where to litigate or threaten legal proceedings

·      Compliance risk is increasing for information providers as price, benchmark and index reporting activities are coming under the scrutiny and remit of different regulators

·      A failure to comply with regulatory frameworks would result in reputational damage, and potential regulatory censure

·      We invest in a central Legal, Risk & Secretariat function and employ specialists across a range of areas to help our businesses manage these risks

·      Senior management at both a Group and divisional level are collectively responsible for managing risk

·      Our divisions employ compliance and/or risk specialists where required

·      Event Risk Framework in place to facilitate management of operational risk in respect of events

·      Many key company policies updated and made available on Intranet, including a range of different awareness initiatives relating to
anti-bribery, modern slavery, sanctions and data privacy

·      Processes and methodologies for assessing commodity prices and calculating benchmarks and indices are clearly defined and documented

·      Compliance with International Organization of Securities Commissions (IOSCO) standards achieved for relevant pricing products

·      Code of Conduct and other key policies in place for price assessment, benchmark and index reporting activities

·      Creation of online geopolitical risk assessment tool for use by businesses

·      Specialist training in media law issues provided to relevant staff

·      Company-wide Speak-Up policy in place and awareness initiative undertaken

·      Comprehensive legal disclaimers in place in contracts/within products

·      Access to appropriate professional advisers where required

·      Professional indemnity insurance

Risk averse
Prior years
(relative position)

2018: Risk averse

2017: Risk averse

2016: Risk averse

Post-mitigation risk trend

Unchanged

Description of risk change

Large global organisations face increased regulatory and compliance risks due to their global footprint. In addition, information providers face increased compliance risks as a result of the complexity of data they publish which customers may rely on for certain business decisions. The Group is in the fourth year of its strategy moving towards becoming a B2B 3.0 information services business therefore there is greater awareness of how to manage the associated risks. The Board believes that the risk profile is unchanged.

 

Board's view

We have a zero-tolerance approach to certain legal and regulatory risks such as bribery. At the same time, the publication of data and content in digital businesses inevitably exposes the Group to global legal and regulatory risk. The manner in which we conduct our businesses can also result in risk if policies are not complied with. Our divisions have access to the Group's central functions such as Legal, Risk and Internal Audit, which provide more specialist resource to raise awareness of, manage and mitigate risk. Legal and regulatory compliance risk for the Group is unchanged.

 



 

Material disruption to business operations resulting in financial loss or reputational damage

NB: we previously reported this risk as two separate principal risks (Disruption to operations from a business continuity failure and Catastrophic or high impact incident affecting key events of wider business)

Key factors

Mitigation

Risk appetite

·      The Group operates in regions with higher risk of natural hazards, works with suppliers based in higher risk areas and runs large events exposed to risks such as natural hazards, travel disruption and security incidents

·      Disruption affects customers as well as staff and revenue, and can also adversely impact brand reputation

·      Prolonged interruption to business travel would harm event revenues and disrupt management and sales operations

·      Significant reliance on third-party technology including hosting services

·      A significant incident affecting one or more of the Group's key offices could lead to disruption to Group operations and reputational damage

·      Information security breach impacting wider business operations

·      Political or civil unrest in a country or region may discourage customers from participating or attending

·      Governance oversight of risk sits with the Audit & Risk Committee and a separate management Risk Committee

·      The Risk Committee focuses on the management of operational risk and all divisions and key functions are represented

·      The Group Risk team carries out a detailed assessment of divisional risk registers at least twice yearly

·      A new Enterprise Risk Framework has been approved for roll-out

·      Crisis management and business continuity framework requires all businesses to plan for high impact events and conduct regular testing of plans

·      Specialist security and medical assistance services engaged to support all staff working away from the office

·      Security and risk management training available for event staff and business travellers

·      With sufficient notice, events can be moved to non-affected regions

·      Cancellation insurance for the Group's largest events

·      Substantial central and business group investment in cloud-based platforms and software

·      Risk assessments for new suppliers and technologies consider operational and financial resilience

·      Close monitoring of situations which may disrupt events and appropriate communication with customers

Risk averse
Prior years
(relative position)

2018: Risk averse

2017: Risk averse

2016: Risk averse

Post-mitigation risk trend

Unchanged

Description of risk change

The Group recognises that business continuity events will arise from time to time and remains committed to active management of this risk. It also recognises that global businesses operating in different countries across the world with staff regularly travelling are more likely to experience business disruption due to 'force majeure' type issues. We have a reasonably high degree of tolerance to business risk in operating a global business, save in respect of the safety and security of our staff and customers where the opposite is true.

Board's view

Business disruption is an unavoidable risk but can be mitigated if business continuity plans are well developed and managed. The Group provides staff with access to training, services and other resources to keep staff safe when travelling. There has been no material disruption to business operations during the year. However, the Group recognises a need to ensure that each of its divisions and functions is equally consistent and robust in relation to its business continuity planning which will be of increased focus in 2020.

 



 

Failure to execute acquisitions or disposals in line with strategy

 

Key factors

Mitigation

Risk appetite

·      Active portfolio management means the Group continues to make strategic acquisitions and disposals

·      Significant growth has been M&A related, through both acquired profit and growth in acquired businesses

·      Failure to successfully acquire either the right businesses (meaning businesses in our top-right quadrant or which can be developed and moved into our top-right quadrant), or a failure to successfully make acquisitions at all, will negatively impact our ability to deliver the Group strategy, including transitioning the Group to becoming a B2B 3.0 information services business

·      Increasingly high multiples and competitive auction processes for high quality assets can favour private equity buyers

·      Larger transactions contingent on obtaining shareholder support

·      Making multiple smaller acquisitions in lieu of material acquisitions increases execution risk

·      Failure to integrate as intended may mean an acquired business does not generate the expected returns

·      Risk of impairment loss if an acquired business does not generate the expected returns

·      Disposal risks arise from failing to identify the time at which businesses should be sold or failing to achieve optimal price

·      Group strategy relies on successful recycling of capital and therefore M&A execution impacts the core strategy

·      M&A strategy and execution is a regular topic of Board focus

·      Investment Committee enables quick decision-making and detailed Board oversight of M&A transactions

·      CEO and CFO closely involved in M&A execution

·      Active portfolio management with a clear framework and operating in line with agreed strategy

·      Development of key objective criteria against which acquisition or disposal decisions are tested

·      Appropriate approvals process in place for transactions

·      Continued investment in Corporate Development team

·      Emphasis on and investment in carrying out external, independent commercial due diligence at an early stage

·      Larger divisions facilitate effective integration and creation of synergies

·      Professional advisors well known to the Company facilitate ability to execute quickly and effectively

·      Ongoing dialogue with investors regarding the strategy, including our approach to M&A

Risk neutral
Prior years
(relative position)

2018: Risk neutral

2017: Risk neutral

2016: Risk neutral

Post-mitigation risk trend

Unchanged

Description of risk change

A need to execute successful M&A in a competitive market combined with robust risk management and controls means this risk is unchanged

Board's view

The Board's focus on M&A combined with management's experience enables the Group to remain disciplined in its approach, minimising the risk of unsuccessful execution or a failure to make the right acquisitions, or any acquisitions at all. The Board is mindful of the importance of ongoing investor dialogue in respect of the M&A strategy.

 



 

Uncertain tax liabilities

Key factors

Mitigation

Risk appetite

·      The Group operates within many increasingly complex tax jurisdictions

·      Changes in legislation and interpretation

·      Identification and disclosure of historic tax issues relating to VAT and employment tax

·      Tax strategy takes a low risk and responsible approach to management of taxes

·      Appropriate care taken to protect the Group's reputation and have open and constructive relationships with fiscal authorities

·      Audit & Risk Committee and Tax & Treasury Committee oversight

·      Fully resourced tax function, including appointment of a new Global Head of Indirect Tax in early 2020

·      Global footprint of Group has reduced in last 24 months through disposals

·      Internal Audit team leading
roll-out of tax 'self-assessment' questionnaires to ensure regular and detailed review of potential exposures

·      New framework and policies in place for engagement of contractors

·      Experienced professional advisors engaged in a range of areas

·      Making financial provisions where appropriate

Risk averse
Prior years
(relative position)

2018: Risk averse

2017: Risk averse

2016: Risk averse

Post-mitigation risk trend

Increasing

Description of risk change

The Group is experienced at managing the tax risks arising from its international business portfolio. However, the Group has a complex structure, large global footprint and operates in an ever-changing tax environment

 

Board's view

The Company has identified two tax exposures: (i) under-payments of PAYE and NI to HMRC in respect of contractors; and (ii) VAT arising on supplies made between entities in the Group. The quantum of these exposures, including the impact to 2019, is £19.2m.

Over the last 24 months, the Company has invested in developing an experienced Tax & Treasury team and continues to enhance controls to minimise the likelihood of any similar prior year adjustments from reoccurring.

The Group cannot entirely eliminate the risk of tax liabilities due to the complexity of the Group's structure, the number of jurisdictions in which it operates and an ever-changing tax environment. However, the Board is confident that the investment made in these areas significantly mitigate this risk.

 



 

Failure to implement the strategy effectively due to failure to attract or retain staff

Key factors

Mitigation

Risk appetite

·      The strategy is embedded across the Group. Its implementation is partially dependent on the ability to attract and retain staff

·      As the Group continues to move towards becoming a B2B 3.0 information services business, the skills required within the Group will change

·      Our segments and divisions have individual strategies dependent on divisional staff with specific skills, expertise and industry knowledge

·      An inability to recruit, retain and train for critical roles will adversely impact our ability to deliver the strategy successfully

·      Competitors able to poach key talent both provides them with a competitive advantage and means institutional knowledge is not built-up within our businesses

·      Lack of in-house recruitment capability slows down recruitment processes

·      Failure to address specific feedback from staff, including via staff survey and other forums, may lead to a lack of engagement

·      The Group needs to provide an employment environment which appeals to emerging talent as a place they want to work

·      Salary benchmarking undertaken and implemented for 2019 pay review with a particular focus on lower paid staff. Further salary benchmarking and implementation will occur in 2020

·      Senior Management Group conference focused on topic of employee engagement

·      Remuneration Committee oversight of Group Management Board rewards

·      Continued investment in training such as Leadership 3.0 and Management 3.0 programmes

·      Broadening of Early Career Academy workshops facilitated by senior management

·      Launch of secondment programmes, including intra-division secondments and to the CEO's office

·      Employee forum launched, allowing for improved employee engagement

·      New recruitment policy, process and training rolled out in 2019

·      Maintaining the Group's reputation for an entrepreneurial approach, making it an attractive place to work

·      Sufficient businesses within each segment in the Group to mitigate the impact of 'business-as-usual' departures of critical staff

·      Contractual notice periods are designed to manage the risk of critical staff leaving on short notice

·      Culture survey results have led to a number of employee initiatives across the Group, designed to improve career progression and staff retention

Risk averse
Prior years
(relative position)

2018: Risk neutral

2017: Risk neutral

Post-mitigation risk trend

Unchanged

Description of risk change

Successful implementation of the Group's strategy remains dependent on hiring and retaining key staff. We have made significant improvements to staff engagement, particularly in relation to the Group's culture and training and development opportunities. The Group will continue to respond to common themes raised by staff in the annual survey or in other forums in order to further improve employee engagement

Board's view

The Board recognises the importance of attracting and retaining the right staff to ensure effective delivery of Group, segmental and divisional strategies. A range of approaches are used to manage this risk reasonably effectively but the Board is mindful that the Group will be constantly competing for talent and further work is required to improve the perception of the Group's 'employer brand'.

 



 

Business risks arising from the global geopolitical environment

Key factors

Mitigation

Risk appetite

·      The US-China trade war creates trading tensions

·      US foreign policy approach to sanctions increases risk of carrying out business in certain countries or with certain companies

·      Political and civil unrest in Hong Kong creates uncertainty for the Group's operations in Hong Kong, including staff, customers and the operation of events

·      Mistreatment of journalists in certain countries may impact journalists' willingness to travel

·      The date and terms of the UK's departure from the European Union continues to be uncertain therefore the potential consequences are unknown

·      Pending UK election creates further uncertainty both in relation to Brexit and the future business landscape for UK PLC

·      The Group, its staff, customers, suppliers and other stakeholders are unable to plan with precision for the uncertainty resulting from the above factors

·      The Group's global footprint means it is not overly reliant on any single country or region for its revenue

·      The Group's Brexit Committee has met regularly during the year to monitor potential impact and the Group's stated of preparedness

·      Group management has delegated certain decision-making to local senior management to optimise the Group's management of the disruption in Hong Kong, appropriate contingency measures have been taken

·      Trade sanctions guidance available to Group businesses and access to internal and external expertise where required

·      Contingency plans seek to address the key risks and leverage opportunities we identify

·      Assessments to date report no material adverse Brexit impact on existing staff due to small number of EU nationals in our workforce and small number of UK nationals working in the EU outside of the UK

·      Hedging is in place to partially offset the impact of US dollar exchange rate risk in the UK

·      A small percentage of Group revenue is generated in the EU outside of the UK

·      Potential travel disruption can be mitigated by using international locations and planning longer
lead-time for travel

·      We use geographically diverse technology suppliers

Risk neutral
Prior years
(relative position)

This is a new risk

Post-mitigation risk trend

Increasing

Description of risk change

Geopolitical factors are creating increasing instability at a macro-level, therefore this risk is increasing

Board's view

The Board notes that Brexit risk in particular continues to increase for all UK companies. The Company continues to carry out contingency planning in a range of areas in light of likely continued uncertainty in the UK market during 2020. The Group's global footprint means that the impact of geopolitical factors will always be a constant macro risk, but at the same time the size of the footprint decreases reliance on particular countries or regions and therefore mitigates risk.

 



 

Under-investment in products and technology

Key factors

Mitigation

Risk appetite

·      Under-investment in products and technology will lengthen the Group's transition to becoming a B2B 3.0 information services business and provide our competitors with an advantage

·      The relative size of the Company means that significant investment can have a material impact on the Group's financial performance

·      The Group may be a less attractive employer to technologists and product specialists than other brands

·      Division of responsibilities between Central Technology (back-end infrastructure) and Divisions (client-facing UI etc) provides clarity for technology and product teams on their remit

·      Product capability and in particular workflow technology an important focus when considering acquisitions

·      Leveraging expertise of our staff base in Chennai which includes product specialists

·      Hiring product specialists at both senior management and product owner level

·      Realignment of divisional management compensation to influence behaviours

·      Success of divisional investment such as Fastmarkets platform demonstrates ROI to other divisions and businesses

·      Management will allocate capital for product/technology investment where there is a clear business case for doing so

·      Our strategic framework enables the Group to allocate capital where it will be used most effectively

·      Increased scale of larger divisions reduces impact of specific investments

Risk averse
Prior years
(relative position)

This is a new risk

Post-mitigation risk trend

Increasing

Description of risk change

This is a newly identified risk for the Group's acceleration to becoming a B2B 3.0 information services business and therefore is increasing

Board's view

The Board will continue to balance short-term and long-term issues for the benefit of shareholders, customers and other stakeholders. The Group will continue to invest capital in projects such as the Fastmarkets platform where the short-term cost impact is outweighed by the long-term development of the Group's products and technology.

Ends

For further information, please contact:

Euromoney Institutional Investor PLC

Tim Bratton, General Counsel & Company Secretary: +44 (0)20 7779 8288; [email protected]

 

About Euromoney Institutional Investor PLC

Euromoney is a global information business providing essential B2B information to global and specialist markets. Euromoney provides price discovery, market intelligence and events across our segments. Euromoney is listed on the London Stock Exchange and is a member of the FTSE 250 share index.

www.euromoneyplc.com 

LEI number: 213800PZU2RGHMHE2S67


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
END
 
 
MSCGCBDDSGBBGCI

Quick facts: Euromoney Institutional Investor

Price: 819

Market: LSE
Market Cap: £895.08 m
Follow

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

FOR OUR FULL DISCLAIMER CLICK HERE