Strategy
In the course of 2005 we simplified UBM to focus on two principal businesses – PR Newswire, our global news distribution business, and CMP, our international events, print and online publishing business. In achieving this, we disposed of assets for a total of nearly £750m, including NOP for £383m and our 35% stake in five for £248m. We demonstrated our continuing commitment to shareholder value and returned £550m of capital, including a special dividend of £298m.

UBM is well placed to capitalise on the new audience dynamics as the audience for media shifts from using horizontal media to vertical media. UBM is now focused on businesses that support buyers and sellers, through the distribution of market information (PR Newswire), and through providing media channels within many specific vertical markets that support our customers (CMP’s trade shows, print and online publishing). We will grow these businesses organically and by making ‘bolt-on’ acquisitions, with a focus on B2B markets, on faster growing economies, on vertical markets where we already have a strong position, and in markets where we can leverage a leading position with an audience in one medium into another, for example from print into exhibitions or online.

We intend to keep investing and acquiring to develop our business. We intend to accelerate the rate of acquisitions from the £105m achieved in 2005 towards the £150m to £250m level annually whilst maintaining our strict financial criteria. At the same time it is our intention to move towards a prudent leveraged balance sheet over the next two years. In so doing, and of course subject to our trading over these few years, we expect to be in a position to return in excess of £300m to shareholders during that period.

Business environment
Our customers increasingly look to reach their target audiences within a given vertical market across multiple media, with online media taking a growing proportion of advertising spend. We are seeking to manage this structural shift while recognising that there will continue to be very significant demand for print in many markets.

We look to meet our customers’ needs to access their audiences by using our three main media forms (print, events, online), offering them a rich and integrated mix of products each with distinct benefits and attributes. We continue to see a critical role for print as a part of the media mix and we have acquired and launched new titles, including the acquisition of Le Quotidien du Medecin (a daily newspaper for doctors in France) and the launch of Global Services (a monthly magazine for the global outsourcing and offshoring industry). The underlying revenue of our print titles varied by geography with aggregate underlying revenues falling in the US, flat in Europe and growing in Asia, resulting in a decline of 2% overall. At an aggregate level we did, however, reduce our exposure to print by selling or closing titles where we felt UBM was not able to develop or grow the franchise (including the disposal of Exchange & Mart). We will continue to review our portfolio of all products (and indeed all media) and will maintain the discipline of selling where we believe our ability to add value is unlikely.

We are increasingly focused on further development of our portfolio of events and online assets alongside print. In doing so, we seek to drive profitable revenue growth and to transition the business to revenue streams that are sustainable in the digital era that we foresee in the longer term.

In the course of 2005 and early 2006, we acquired a range of new events, including, among others, Informex (chemical ingredients), Black Hat (IT security), Bar Show, the Japan Jewellery Fair and RFID World. During 2005 we also acquired successful, innovative online media businesses through the purchase of Light Reading and TechOnLine.

The need to do business face-to-face at exhibition and trade show events remains as strong as ever. Paradoxically in our increasingly digital world, the face-to-face meeting is becoming a more and more important part of doing business. Our events business showed healthy growth in 2005 with total revenues rising by 21% to £161.5m (and an underlying growth rate of around 10%). The business will continue to be a major focus for organic development and acquisitions in the future.

Revenues across UBM’s online businesses grew to £42.7m in 2005 with an underlying growth rate of 24.4%. The online media business environment continues to be highly dynamic as the new generation of broadband digital technology and content media emerge and are adopted more widely. The current imbalance of advertising spend between online and more traditional media relative to their respective audiences suggests there will be a substantial demand for online advertising over the coming years. However, given the unproven profitability of many such business models, particularly in comparison to their print equivalents, we will continue to invest carefully in the development of our online products and their associated business models. We will look particularly towards achieving more comprehensive integration of our offerings across multiple media.

Investments in acquisitions & organic growth
In 2005 we invested £105m in ‘bolt-on’ acquisitions of 11 businesses that complemented existing market positions and enhanced our businesses’ growth opportunities. We also continued to invest to support organic growth initiatives. We remain committed to our record of delivering shareholder value by effective financial and operational management of our owned businesses and our new acquisitions. Integration of acquisitions made in both 2004 and 2005 has progressed well and the performance of these businesses has met our expectations.

People & management
Since my arrival in 2005 we appointed Steve Weitzner as CEO of CMP Media and early in 2006 Gary Hughes joined us as CEO of CMP Information. Charles Gregson relocated to New York to focus exclusively on the role as CEO of PR Newswire. Henry Elkington was also appointed Group Corporate Development Director.

Outlook
2006 has begun with a solid performance. PR Newswire is continuing to perform well. Our events business remains strong worldwide and forward bookings are ahead of the prior year. Our performance in print is mixed, for example a good performance in France being offset by weaker revenue in the UK. Whilst our online revenues are growing rapidly (albeit from a small base) and we plan to accelerate that growth through further investment, we will focus on improving profitability of our online offerings.