TIDMERM
RNS Number : 7557V
Euromoney Institutional InvestorPLC
15 December 2021
EUROMONEY INSTITUTIONAL INVESTOR PLC
PUBLICATION OF ANNUAL REPORT AND ACCOUNTS 2021 AND
NOTICE OF ANNUAL GENERAL MEETING 2022
15 December 2021
Euromoney Institutional Investor PLC ("Euromoney") the global
B2B information services provider, has today published the
following documents on its website euromoneyplc.com:
Document Location
Annual Report and euromoneyplc.com/investors/reports-and-presentations/year/2021
Accounts 2021
---------------------------------------------------------------
Notice of Annual General euromoneyplc.com/investors/agm
Meeting 2022
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The Annual Report and Accounts 2021, together with the Notice of
Annual General Meeting 2022 and 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
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
The Company's Annual General Meeting in 2022 is scheduled to be
held at 9.30am on Wednesday 9 February 2022 at 8 Bouverie Street,
London, EC4Y 8AX. UK Government measures may change and impact on
arrangements for the AGM. If there are any changes to the
arrangements for the AGM from those set out in the Notice of Annual
General Meeting, this will be communicated to shareholders before
the meeting through the Company's website (euromoneyplc.com) and,
where appropriate, by RIS announcement.
The information set out in the Appendix below, which is
extracted from the Annual Report and Accounts 2021, is provided
solely for the purpose of complying with the FCA's Disclosure and
Transparency Rules. The information should be read in conjunction
with the Full Year Results announcement made on 18 November 2021.
Together these constitute the information required by DTR 6.3.5 to
be communicated to the media in unedited full text through a
Regulatory Information Service. This information is not a
substitute for reading the full Annual Report and Accounts
2021.
Ends
For further information, please contact:
Euromoney Institutional Investor PLC
Tim Bratton, General Counsel & Company Secretary: +44 (0)20
7779 8288; tim.bratton@euromoneyplc.com
About Euromoney Institutional Investor PLC
Euromoney Institutional Investor PLC ("Euromoney") is a global
B2B information-services business. We provide actionable data,
analysis, intelligence and access through three divisions in
markets where information and convening market participants are
valued. Euromoney is listed on the London Stock Exchange and is a
member of the FTSE 250 share index. ( euromoneyplc.com )
LEI number: 213800PZU2RGHMHE2S67
APPIX: ADDITIONAL INFORMATION REQUIRED BY DTR 6.3.5
Page and note references in this appendix refer to page numbers
and notes in the Annual Report and Accounts 2021
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 accounting standards in conformity with the
requirements of the Companies Act 2006 and the Company financial
statements in accordance with international financial reporting
standards adopted pursuant to Regulation (EC) No 1606/2002 as it
applies in the European Union. 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 international accounting standards in conformity with the requirements of the Companies
Act 2006 and international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it
applies in 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.
Directors' confirmations
In addition, in accordance with DTR 4.1.12R, each of the
Directors, whose names and functions are listed on pages 65 and 66
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 Accounting
Standards, comprising FRS 102, and 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 international accounting standards in
conformity with the requirements of the Companies Act 2006 and international financial reporting standards
adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union, give a true and fair view
of the assets, liabilities, financial position and profit 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.
Directors are also required to provide a broader assessment of
viability over a longer period, which can be found on page 61.
The Directors consider that the Annual Report and Accounts,
taken as a whole, is fair, balanced and understandable and provides
the information necessary for shareholders to assess the Group and
parent company's performance, business model and strategy.
The statement of Directors' responsibilities and the Strategic
report are approved by a duly authorised committee of the Board of
Directors on 17 November 2021 and signed on its behalf by Wendy
Pallot, Group Chief Financial Officer.
Principal Risks
The Group's Principal Risks are outlined below and are extracted
from pages 51 to 60 of the 2021 Annual Report and Accounts.
Description Mitigation Risk appetite
Risk 1: Slow post-covid economic recovery or poor business
economic conditions in major markets or environmental concerns
hinder the recovery of in-person events, and organic revenue
growth
Risk tolerant
Prior years
(relative position)
2020: Risk tolerant
2019: Risk tolerant
2018: Risk tolerant
Post-mitigation
risk trend
Unchanged
Description of
risk change
In addition to
the long-term
impact
of the pandemic,
cyclical and
geopolitical
economic
uncertainty
continues
--------------------
* The Group's 3.0 strategy is to provide services that
are embedded in our customers' workflow, which makes
them more likely to be non-discretionary purchases,
and the resulting revenue is therefore more resilient
* We have invested in the capability to deliver fully
digital and blended events, which helps mitigate any
* Post-pandemic travel and public gathering in-person restrictions that continue to operate
restrictions continue to cause disruption and
recovery constraints to our event-related businesses
* We have increased people and technology investment in
sales and marketing in a number of businesses which
* Unrelated to covid-19 or triggered by it, there is an helps improve our performance even in tough times
inherent risk of recession, a period of high
inflation, or poor market conditions in countries and
regions where we operate
* A high proportion of our revenue comes from
subscriptions, which are typically more resilient
than other revenue in a downturn
* Ongoing economic pressures could cause a more
structural shift away from travel and large functions,
resulting in more structural pressure on events
recovery * Investment in new technology to allow virtual or
blended events will enable the business to adapt to
structural changes in the events industry
* The increased concern about and focus on the
environment reduces appetite for global business
travel or environmental legislation could result in * The Group operates in many geographical markets,
air travel becoming either economically unattractive which provides some diversification; likewise, the
or socially disapproved of, which creates further Group serves customers in different industries
challenges in the recovery of our in-person events
* The Group serves large numbers of customers in nearly
* More than half our revenue comes from North America, every business and is not dependent on a small group
and therefore a downturn in the US in particular of customers for a large proportion of its revenue
could reduce our customers' profitability and
therefore their willingness and ability to buy our
services
* The Group is sharing more resources across all its
businesses, for instance around event operations, in
* We have exposure to financial services companies and order to make them operate as efficiently as possible
any cyclical downturn that affects them will have an
impact on us
* The Group is considering the environmental footprint
and climate impact of events as part of its ESG work.
* Lower demand for commodities stemming from a The blended event model enables event access should
slow-down in China in particular, could have a customers choose not to travel due to environmental
knock-on effect on Fastmarkets concerns
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Description Mitigation Risk appetite
Risk 2: Compliance and Controls: failure to comply with group
policies and processes, complex global regulations and a litigious
environment causes reputational, legal or financial damage
Risk averse
Prior years
(relative position)
2020: Risk averse
2019: Risk averse
2018: Risk averse
Post-mitigation
risk trend
Unchanged
Description of
risk change
Large global
organisations
face multiple
regulatory
and compliance
risks due to their
global footprint.
There are
additional
requirements for
information and
price reporting
business. Customers
may increasingly
rely on our
services
and data when
making
their own business
decisions. The
Group continues
to focus on
managing
these compliance
and regulatory
risks through
investment
in internal
resource,
enhanced internal
policies, and an
ongoing programme
of training
--------------------
* The Group has a central Legal, Risk & Secretariat
function and employs specialists across a range of
areas to help our businesses manage these risks
* Our divisions employ compliance and/or risk
specialists where required
* Access to external advisors who are expert in
specific areas
* There is a Group sanctions compliance programme,
recently updated, that uses in-house expertise,
accredited software, and external specialist advice
to minimise the risk of a sanctions breach
* The Group operates in multiple jurisdictions and must
be compliant with all applicable laws and regulations
* An updated Event Risk Framework is in place to
facilitate management of covid-19 and operational
* The Group's businesses publish, market and license risks in respect of events
increasingly complex content and data which in some
cases its customers may choose to rely on when
executing transactions * An updated Anti-Bribery and Corruption Policy was
launched during the year, supplemented with online
and classroom training, as well as the roll-out of an
* Risk or reputational damage can arise from automated gifts and entertainment register
inappropriate reliance on third-party data, errors in
underlying data or content, failures of data
integrity and failure to educate customers on * All key Group policies are updated at least annually
appropriate usage of data and made available on the Intranet, as well as having
compulsory online training for key risk areas
* Several of our businesses operate in an environment
where privacy regulations are increasingly stringent * Processes and methodologies for assessing commodity
prices and calculating benchmarks and indices are
clearly defined and documented
* 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 * Compliance with International Organization of
comply with law or regulation Securities Commissions (IOSCO) standards achieved for
relevant pricing products
* Geopolitical risks have increased the scope and
severity of sanctions, particularly from the US, UK, * Code of Conduct and other key policies in place for
and EU. The Group has a legal obligation to comply price assessment, benchmark and index reporting
and it is customary for bank financing arrangements activities
to include cross-default provisions
* Specialist training in media law issues provided to
* Claimants can forum shop when determining where to relevant employees
litigate or threaten legal proceedings
* Group-wide Speak-up policy in place
* Compliance risk is increasing for
information-providers as price, benchmark and index
reporting activities are coming under the scrutiny * Comprehensive legal disclaimers in place in
and remit of different regulators contracts/within products
* A failure to comply with regulatory frameworks would * The Group holds a comprehensive set of insurance
result in reputational damage, and potential policies that help mitigate the financial impact of
regulatory censure these risks, should they materialise
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Description Mitigation Risk appetite
Risk 3: Inability to execute M&A strategy or integrate acquisitions
successfully into the Group on a timely basis prevents the
delivery of the strategy
Risk neutral
Prior years
(relative position)
2020: Risk neutral
2019: Risk neutral
2018: Risk neutral
Post-mitigation
risk trend
Reduced
Description of
risk change
Successful
portfolio
management remains
part of the Group's
strategy and,
despite
the challenges
posed
by the pandemic,
the Group's strong
balance sheet and
robust risk and
controls framework
means that the risk
is unchanged
--------------------
* M&A strategy and execution is a regular topic of
Board discussions
* We buy and sell businesses within a clear and agreed
framework for identifying and evaluating acquisition
and disposal candidates and for integrating
businesses we buy
* The CEO and CFO are closely involved in all M&A
* The Board regularly delegates authority to an
Investment Committee to make sure there is detailed
* The Group continues to make strategic acquisitions Board oversight of acquisitions and disposals and to
and disposals as part of its strategy. Active enable quick decision-making, particularly where the
portfolio management remains important for schedule of Board meetings does not match a
accelerating the Group's strategy of becoming a fully particular transaction timetable
3.0 company
* We typically use external and independent firms to
* The risks are that the Group fails to acquire at all, help with commercial due diligence to analyse the
acquires a business that does not have expected 3.0 quality of a business and the market in which it
characteristics, or we fail to integrate the acquired operates
business sufficiently to get expected benefits
* We retain professional advisors who know the Group
* The strongest 3.0 businesses attract valuations which well in order to execute transactions quickly and
are high multiples of profit. Competitive auction effectively
processes for high-quality assets can favour private
equity companies and large corporations, who can use
more debt to fund an acquisition than is prudent for * Acquisitions are subject to specific financial and
us. They are therefore sometimes able to justify a other targets and these are monitored and reported to
higher price. Furthermore, an acquisition which is the Board regularly
large for the Group may be relatively small for a
larger corporation who can therefore complete a
transaction more quickly and offer a higher
likelihood of completion to a seller given that we * The divisional structure facilitates effective
may require shareholder approval integration and creation of synergies
* Acquiring smaller companies rather than fewer large * The Group regularly discusses the role of M&A in the
ones makes integration more complex, which increases strategy with investors
risk
* Although we will be prudent in our funding of
* Failure to integrate the acquisition may mean an acquisitions, our strong balance sheet means we still
acquired business does not generate expected returns, have some acquisition firepower.
which can lead to an impairment of value
* We have regular meetings with our shareholders and
* Larger transactions require shareholder approval listen to their views on M&A, including funding
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Description Mitigation Risk appetite
Risk 4: Geopolitical upheaval has a major impact on the business
environment
Risk neutral
Prior years
(relative position)
2020: Risk neutral
2019: Risk neutral
(new risk)
Post-mitigation
risk trend
Increasing
Description of risk
change
Multiple
geopolitical
factors continue
to create
instability
at a macro level
therefore the risk
is increasing
--------------------
* Politics in and between major markets can have large
and sometimes sudden impacts on our business. The
nature of geopolitics is that even though we know
there is a risk, we often do not know how the
situation will play out e.g. changes in Chinese
regulations
* Despite an exit deal being reached between the UK and
the EU, there continues to be outstanding issues to
be negotiated and ongoing logistics and supply chain
issues causing ongoing disruption
* The Group's global footprint means we are not
completely reliant on any single country or region
for our revenue
* Fuel or power supply challenges in the UK and Europe
could increase political tensions with countries such
as Russia, with whom there are already tensions * The Group is relatively insulated from logistics
following the invasion of Crimea disruptions, as it does not trade in physical
products and our UK-based workforce was not overly
reliant on EU nationals
* US-China trade hostilities could reduce trade volumes
or economic growth or increase restrictions on doing
business internationally, which would affect our * A trade sanctions policy and processing framework is
customers and us in place and used by all Group businesses, who also
have access to internal and external experts
* Sanctions policies in the US and elsewhere increase
the risk of carrying out business in certain * Hedging is in place to offset some of the impact of
countries or with certain companies and individuals US dollar exchange rate movements against sterling
* Mistreatment of journalists in certain countries may
put some of our employees at risk, or make our * The Group uses country risk-tracking services to
journalists unwilling to travel monitor current and emerging risks in different
markets
* The socioeconomic environment in certain countries
may make them unattractive jurisdictions in which to * We have global sales teams who have multiple touch
base our business, or our customers may leave these points with larger customers meaning that our
countries business with customers is not location dependent
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Description Mitigation Risk appetite
Risk 5: Cyber security and information security threats compromise
data integrity or result in a loss of key data
Risk averse
Prior years
(relative position)
2020: Risk averse
2019: Risk averse
2018: Risk averse
Post-mitigation
risk trend
Unchanged
Description of
risk change
Cyber security and
information risks
continue to
increase
across nearly all
sectors as the
frequency
and sophistication
of cyber attacks
increases and
therefore
the Group continues
to invest in the
area of information
security
--------------------
* Chief Information Security Officer continues to
manage these threats
* A new Chief Privacy Officer has joined the Group to
create a robust strategy for compliance with global
data protection regulations. We have also recruited a
Chief Privacy Officer to the FPS People Intelligence
pillar
* Information security strategy is demonstrating
effectiveness and is on schedule
* Investment continues 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 the Risk Committee
and Information Security Steering Group
* Approved information security standards and policies
which are reviewed on a regular basis
* Continuing education and compulsory training
programmes for all employees, on a regular basis
* As an information services business, the integrity of
the data embedded in our products is critical in * Active information security programme (including
terms of trust and reputation access management and cyber-resilience planning) to
align all parts of the Group with its information
security standards
* The Group is a data business and creates high volumes
of proprietary, commercial data, while also
processing B2B customer personal data and employee * Crisis management and business continuity frameworks
personal data cover all businesses including disaster recovery
planning for IT systems
* Increasing number of cyber attacks are affecting
organisations globally * Multi-layered defence strategy
* The Group has many websites and is reliant on * Robust IT security due diligence framework for
distributed technology, increasing exposure to acquisitions
threats
* Review carried out of data integrity issues and risks
and discussed with Board during the year
* A successful cyber attack could cause considerable
disruption to business operations, lost revenue,
regulatory fines and reputational damage * Access to key systems and data is restricted,
monitored and logged with auditable data trails in
place and project underway for bolstered identity
* Privacy regulations (e.g. GDPR in Europe, Californian access management
Consumer Privacy Act in the US) are increasingly
stringent and regulators vigilant in relation to data
breaches, increasing the risk of a breach and * Comprehensive backups for IT infrastructure, systems
associated fine, civil proceedings or reputational and business data
damage
* Increased assurance controls to ensure businesses are
meeting required standards
* Extended remote working - from home - has introduced
new, and heightened existing, information security
threats (e.g. phishing) * Investment in improved cloud security controls that
have been rolled out The Group holds appropriate
insurance cover for cyber risks including cyber
* Threats such as ransomware and crypto mining malware attack and data breach incidents
require the Group to adapt to a continually shifting
landscape
* Information security is reviewed as part of our
internal audit process
* Phishing and similar enhanced attacks remain one of
the most serious threats to network security, and are * Incident response playbook and supporting policies
increasing and processes
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Description Mitigation Risk appetite
Risk 6: Inadequate ability of the business to manage talent
churn effectively results in the loss of key personnel in critical
roles
Risk averse
Prior years
(relative position)
2020: Risk averse
2019: Risk averse
2018: Risk averse
Post-mitigation
risk trend
Increasing
Description of
risk change
The Group remains
committed to hiring
and retaining key
employees in order
to implement its
strategy. Over
the past 12 months,
the Group has
invested
in training,
employee
forums, diversity
and inclusion
initiatives,
and town halls
to improve skills
and employee
engagement
--------------------
* The Group has launched a Working 3.0 strategy, which
is enhancing flexible working for employees. This not
only allows employees to improve their well-being, it
will also support sustainable performance. The
approach improved our ability to attract talent,
* The covid-19 crisis created significant uncertainty including work-life balance, it also widens the
for employees, particularly in managing virtual geographic range of potential talent to recruit from,
working with home responsibilities. With some and our ability to retain talent
countries in which the Group has employees still
subject to lockdowns or other mobility restrictions,
supporting employees with this is important to reduce * The Working 3.0 programme is being supplemented with
retention risk and to attract new employees employee training to provide managers with the tools
to effectively and sustainably manage remote teams
* Those markets that have seen restrictions lifted are
also seeing very active recruitment markets with * Regular and transparent Town Halls led by the CEO and
upward wage pressures, creating more competition to CFO replicated through the business
recruit and retain employees
* Our individual businesses have strong brands in their
* Increasing well-being challenges directly from the own verticals making them attractive places to work
pandemic and also underlying challenges that have for sector specialists
become more visible during this period e.g. mental
health affecting day-to-day productivity as well as
retention * Increased support and awareness of mental health
issues and broader well-being issues
* The importance of providing an inclusive culture to
attract and retain diverse talent remains critical * The global Inclusion & Diversity Council is fully
supported across the business, with several
specialist network groups being formed to provide
* As the Group continues to move towards becoming a B2B support to relevant groups, including a new group
3.0 information services business, the skills focused on disabilities
required within the Group will change
* We continue to benchmark and review remuneration
* An inability to recruit, retain and train for packages with the objective of paying fairly
critical roles will adversely impact our ability to according to benchmarks
deliver the strategy successfully
* Core training solutions are available, and we have
* Competitors may poach key talent which would provide implemented a common online training platform during
them with a competitive advantage and means that the 2021 to provide more consistently available
Group loses institutional knowledge from its development opportunities for all our employees
businesses
* Maintaining the Group's reputation for an
* Partnership with the global Staff Forum to identify entrepreneurial approach, making it an attractive
and address both concerns and opportunities to place to work
strengthen the experience of employees
* The large number of employees and roles in each
* The Group needs to provide an employment environment division mitigates the impact of departures of
which appeals to emerging talent as a place they want critical staff
to work
* Contractual notice periods are designed to manage the
risk of critical staff leaving on short notice
* General business, societal and work environment along
with changes in Group organisation and staff levels
impact well-being and morale of employees, as well as
employee engagement, which adversely affects * Implementing actions resulting from culture surveys
productivity and performance and other sources of employee sentiment
------------------------------------------------------------- --------------------
Description Mitigation Risk appetite
Risk 7: Uncertain tax liabilities lead to material cash outflows
Risk averse
Prior years
(relative position)
2020: Risk averse
2019: Risk averse
2018 Risk averse
Post-mitigation
risk trend
Unchanged
Description of
risk change
The Group is
experienced
at managing the
tax risks that are
inherent in a
multinational
business.
Nonetheless,
the Group has a
complex structure
with an
international
footprint, subject
to an ever-changing
tax environment
--------------------
* Tax strategy is to take a low-risk approach to the
management of tax. This is signed off by the Board
and communicated to all individuals who have a
responsibility for tax
* Increased engagement with tax authorities, including
quarterly meetings with HMRC. Open and transparent
communication with local tax authorities
* Continued investment in the tax team to ensure they
are sufficiently qualified and resourced
* The Group is a multinational group with tax affairs
in many complex geographical locations. Tax
legislation is not always clear cut and often * Third-party advisors are engaged to resolve known
requires judgement and interpretation which may be issues or where there is sufficient tax technical
challenged by tax authorities uncertainty
* Disputes with tax authorities could lead to * New transfer pricing policy in place with supporting
unexpected tax costs and tax litigation which could benchmarking study and documentation to reduce risk
take many years to resolve of challenge
----------------------------------------------------------- --------------------
Description Mitigation Risk appetite
Risk 8: Existing and emerging competitor activity creates
product and pricing pressures, as well as potentially eroding
margins
Risk tolerant
Prior years
(relative position)
2020: Risk tolerant
2019: Risk tolerant
2018: Risk tolerant
Post-mitigation
risk
trend
Unchanged
Description of risk
change
The Group ensures
it invests in
high-quality
products for its
customers,
as well as
implementing
the 3.0 strategy to
embed our products
into our client's
workflows and
create
long-term business
relationships
--------------------
* Our 3.0 strategy seeks to embed our products and
services in customers' workflow. This creates greater
value for the client. The more tightly the products
are embedded, the less likely the client is to move
to a competitor
* One of our key strategic pillars is to invest in,
develop, and release new products and features to
keep our products functionally competitive
* Divisional senior teams regularly discuss competitor
activity and it is also covered in regular reviews
between the CEO and CFO and the divisional leadership,
particularly in respect to its impact on financial
performance
* We have improved the sophistication of how we price
our products and services in our most important
sectors, and the analysis that has underpinned that
has included scrutiny of perceived value of our
products relative to competitors
* In most of our subscription businesses, account
cancellations are analysed including identifying
where a competitor has won the account and these
trends are monitored
* Group-wide sales training includes handling
competitive pitches; authority to discount is tightly
* Although the Group has no single competitor competing controlled; and businesses have gross margin targets
in all the markets in which the Group operates, every
business within the Group has at least one strong
competitor * Marketing materials and sales collateral highlight
the benefits of our solutions over other providers
* As well as taking market share or putting pressure on
pricing, competitors can also seek to recruit key * Where appropriate and available, we maintain a list
employees. There is also the additional risk of new of competitive products and services, and
entrants into the market offering the same or similar periodically review to understand where we have
services to our Group's businesses, but with threats and opportunities and update product and
aggressive pricing, impacting margins sales and marketing plans accordingly
* Competitors may invest in superior products or * All employees are regularly made aware of our
technology that attracts potential new customers away policies to prevent unlawful anti-competitive
from our businesses behaviour
------------------------------------------------------------- --------------------
Description Mitigation Risk appetite
Risk 9 : Exposure to USD exchange rate leads to unexpected
swing in reported results
Risk tolerant
Prior years
(relative position)
2020: Risk tolerant
2019: Risk tolerant
2018: Risk tolerant
Post-mitigation
risk trend
Unchanged
Description of
risk change
The Group is
experienced
in managing risks
related to its
exposure to the
US dollar, but
recognises that
domestic political
volatility in the
short term could
increase the risk
--------------------
* Sensitivity analysis is performed regularly to assess
the impact of currency risk
* 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 the following 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
* Exposures are well communicated in the Annual Report
* Approximately three-quarters of revenue and profit is and in investor presentations meaning our
generated in US dollars, including approximately 40% shareholders are aware of the USD exposures when
of the revenue in the UK-based businesses. This gives investing in the Company.
significant exposure to movements in the US dollar
for both UK revenue and the translation of results of
foreign subsidiaries * Natural hedging is put in place where possible
------------------------------------------------------------ --------------------
Description Mitigation Risk appetite
Risk 10: Changing customer needs, new technology or changing
governmental priorities cause structural changes in markets
reducing the value delivered by our products and services
Risk tolerant
Prior years
(relative position)
2020: Risk tolerant
2019: Risk tolerant
2018: Risk tolerant
Post-mitigation
risk trend
Unchanged
Description of
risk change
As an
entrepreneurial
business, the Group
is experienced at
managing this risk,
with the divisions
investing in their
products and
technologies
to mitigate the
challenges
--------------------
* As well as the risk of the Group's results being
affected by the ups and downs of the business cycle, * Our 3.0 strategy is designed to evaluate structural
we also have the risk of structural changes to our risks and opportunities and respond to them
markets. In these situations, revenue can decline and
never rebound because of permanent changes to
customer needs or demographics or the introduction of * We hold regular CEO-led reviews across all divisions
disruptive technology. In addition, new competitors including discussion around structural change
sometimes give away, or sell at a low price, content
or services similar to that which we sell
* The Group can deliver either more localised events or
blended events which could be more attractive to
* Environmental or Climate Risk legislation could attendees who cannot or will not engage in high
result in air travel becoming either economically levels of air travel
unattractive or socially disapproved of, which
creates further challenges in the recovery of our
in-person events * We encourage product development based on market need
rather than Group capability, and aim to foster an
entrepreneurial approach to stay aligned with
* Some competitors have a capital structure and customers' emerging requirements
investors such that they never have to make a profit,
or can sustain large losses for many years, allowing
them to invest massively in technology or on * Effective management reporting with regular forecast
marketing and promotion including giving away their reviews means the financial impact of disruptive
product to build market share change can be spotted early
* Government policy or new regulations, particularly in * The range of our business spreads the risk to some
financial services, but in other markets too, can degree
permanently disrupt markets. For example, governments
can mandate that information that we collect from a
market and then sell is made public by market * We outsource our technology requirements to
participants for free. Although this is often a third-party experts where it makes no sense to manage
source of opportunity, it can also undermine our them in-house
business or business model
* Our commitment to active portfolio management allows
* Typically, acquiring businesses who use disruptive the Group to sell structurally challenged businesses
techniques can be prohibitively expensive for us and to buy structurally strong ones
because they are attractive to many possible buyers
and so sell for very high prices. Typically, they
have low margins or are loss-making, so that they do * The Risk Committee regularly reviews each division
not generate the financial returns we require from and function, which present their key risks to the
our acquisitions Committee for debate and challenge
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