FT Group
The FT Group is a leading provider of essential information in attractive niches of the global business information market. These include insight and analysis through the Financial Times, FT.com, Money-Media and The Economist, and intelligence, valuations and indices through Mergermarket, Interactive Data and FTSE.
Overview
In recent years, the FT Group has significantly shifted its business towards digital and subscription revenues. We have sold our largely print and advertising-based national media companies (Recoletos in Spain, Les Echos in France, FT Deutschland in Germany); acquired digital businesses with international opportunities (Mergermarket, Exec-Appointments. com, Money-Media, Mandate Wire and Medley Global Advisors); and invested steadily in our global and digital businesses including the Financial Times, FT.com and Interactive Data.
As a result of this strategy, in 2009 digital products and services accounted for 73% of FT Group revenues, up from 28% in 2000; and in 2009 advertising accounted for 19% of FT Group revenues, down from 52% in 2000. On a continuing business basis, FT Group sales have increased at a headline compound average growth rate of 11% (from £546m in 2005 to £842m in 2009) and profits by 18% (from £97m to £187m).
Looking ahead, we believe that the FT Group's premium and global positions, combined with our digital and subscription businesses, put us in a good position to weather tougher economic conditions.
FT Group: Key performance indicators
| £ millions | 2009 | 2008 | Headline growth | CER growth | Underlying growth |
|---|---|---|---|---|---|
| Sales | 2,470 | 2,002 | 23% | 5% | 5% |
| FT Publishing Interactive Data | 484 | 406 | (19)% | (5)% | (2)% |
| Total | 842 | 796 | 6% | (3)% | (5)% |
| Adjusted operating profit | 39 | 74 | (47)% | (42)% | (42)% |
| FT Publishing Interactive Data | 148 | 121 | (22)% | (7)% | (2)% |
| Total | 187 | 195 | (4)% | (12)% | (14)% |
FT circulation revenue growth
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The FT Newspaper's year-on-year growth in circulation revenue.
The average monthly number of unique users of FT.com for the year
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The average monthly number of unique users of FT.com for the year.
Mergermarket renewal rates
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The current year value of sales to existing customers as a percentage of their spend in the previous year.
Interactive Data customer retention
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The number of customers renewing contracts as a percentage of total customer base.
FT Publishing Highlights in 2009 include:
FT Publishing's margins sustained at more than 10%, despite double digit revenue declines caused by tough market conditions for financial and corporate advertising. FT Publishing revenues declined 12% as the impact of advertising revenue declines was partly mitigated by growth in content revenues and the resilience of our subscription businesses.
A growing audience
We continued to see good demand for high-quality analysis of global business, finance, politics and economics resulting in:
A 15% increase in FT.com's paying online subscribers to more than 126,000, and 750 direct corporate licences.
Registered users on FT.com up 85% to 1.8m and up 12% to 1.4m on FTChinese.com.
While Financial Times worldwide circulation was 7% lower at 402,799 (for the July – December 2009 ABC period), subscription circulation grew modestly.
Digital publishing
We continued to invest in fast-growing digital formats. We launched a new luxury lifestyle website, to complement our existing How To Spend It magazine; a new iPhone application which has received more than 200,000 downloads; and, in association with Longman, Lexicon, an online glossary of economic, financial and business terms.
See more at www.howtospendit.com
Mergermarket faced challenging conditions in some of its markets with reduced Mergers and Acquisition activity impacting the merger arbitrage sector serviced by dealReporter whilst Debtwire benefited from an increased focus on distressed debt.
Mergermarket
Mergermarket continued to launch new products and expand globally. Our newest product, MergerID, launched in September 2009, provides a secure online environment for principals and professionals to post and view M&A opportunities globally and has secured over 1,500 active users in more than 450 companies across the globe.
The Economist, in which Pearson owns a 50% stake, increased global weekly circulation by 2.2% to 1.42m (for the July – December 2009 ABC period).
FTSE, our 50% owned joint-venture with the London Stock Exchange, increased revenues 17% and made a strong improvement in profits.
Interactive Data Highlights in 2009 include:
Interactive Data revenues up 5% and operating profit up 7% to £148m (£121m in 2008) driven by its Institutional Services segment, despite difficult market conditions in the financial services industry. In the fourth quarter we began to see continued signs of trading conditions easing in certain markets that were difficult earlier in the year, principally in our new sales.
Interactive Data continued to benefit from growth trends including: heightened scrutiny around the valuation of securities; increasing regulation and related investment in compliance and risk management processes; increasing adoption of low latency data for algorithmic trading; and continuing need to costeffectively differentiate wealth management offerings with bespoke web-based client solutions.
Pricing and Reference Data (66% of Interactive Data revenues) continued to generate good growth in North America and Europe. Growth was primarily organic and also benefited from bolt-on acquisitions, most recently NDF, a leading provider of financial pricing and services in Japan, and Kler's Financial Data Service, a leading provider of reference data to the Italian financial industry.
Real-Time Services (19% of Interactive Data revenues) faced challenging market conditions as solid demand for web-based Managed Solutions was more than offset by higher cancellations of real-time market data services. In December 2009, we formed the Real-Time Market Data and Trading Solutions Group which combines the resources of our eSignal, Managed Solutions and Real-Time Services businesses into a single organisation. This initiative supports plans to integrate the company's suite of real-time market data and innovative, hosted technology services and solutions to more effectively capitalize on opportunities in the wealth management and electronic trading sectors. In addition, Interactive Data recently completed two acquisitions, 7ticks and the data and tools assets of Dow Jones' Online Financial Solutions business, that help further strengthen its real-time capabilities in the wealth management and electronic trading sectors.
Interactive Data made a number of bolt-on acquisitions in late 2009 and into early 2010 including: the data and tools assets of Dow Jones and Company's OFS business, which expands the growing web-based solutions business in North America; Dubai-based Telerate Systems Limited (completed on 14 January 2010), a long-time eSignal sales agent; and 7ticks (completed on 15 January 2010), an innovative provider of very fast electronic trading networks and managed services.
Interactive Data's full year earnings announcement and outlook for 2010 is available at: www.interactivedata-rts.com
On 15 January 2010, Pearson and Interactive Data announced that Interactive Data's Board of Directors is conducting a preliminary review of strategic alternatives for the Company. As previously stated, there can be no assurance on the potential outcome or timing of this review process.
