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Edited Transcript of ASCL.L earnings conference call or presentation 22-Jul-19 8:00am GMT

Half Year 2019 Ascential PLC Earnings Call

London Jul 31, 2019 (Thomson StreetEvents) -- Edited Transcript of Ascential PLC earnings conference call or presentation Monday, July 22, 2019 at 8:00:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Amanda Jane Gradden

Ascential plc - CFO & Director

* Duncan Anthony Painter

Ascential plc - CEO & Director

* Jamie Ricketts

FTI Consulting, Inc. - Senior Director

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Conference Call Participants

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* Gareth Rhys Davies

Numis Securities Limited, Research Division - Director of Media Equity Research

* Giasone Ulisse Salati

Macquarie Research - Senior Media Analyst

* Katherine Tait

Goldman Sachs Group Inc., Research Division - Associate

* Natasha Brilliant

Citigroup Inc, Research Division - VP

* Nicholas Michael Edward Dempsey

Barclays Bank PLC, Research Division - Research Analyst

* Patrick Thomas Wellington

Morgan Stanley, Research Division - MD and Head of the European Media Equity Research

* William Henry Packer

Exane BNP Paribas, Research Division - Executive Director of Media Equity Research

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Presentation

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Jamie Ricketts, FTI Consulting, Inc. - Senior Director [1]

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Good morning, everybody, and welcome to Ascential's 2019 half year results. Duncan Painter and Mandy Gradden will give today's presentation.

And before we kick off, a few very quick bits of housekeeping. If you wouldn't mind, please turning off your mobile phones. If there's a fire, follow the instructions, and you can read the disclaimer at your leisure. Here's a short video.

(presentation)

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Jamie Ricketts, FTI Consulting, Inc. - Senior Director [2]

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Today's agenda. Duncan will start with the highlights. Mandy will present the financials. Duncan will come back to cover the summary and outlook followed by Q&A.

Over to you, Duncan.

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Duncan Anthony Painter, Ascential plc - CEO & Director [3]

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Thanks, Jamie, and I hope you all enjoyed the highlights video. Good morning and welcome to our results presentation for our first half for 2019.

I'd like to thank all of you for coming this morning and particularly for those who are joining us via the digital broadcast. We very much appreciate your continued interest in our company.

For those of you I have not had the opportunity to meet, I'm Duncan Painter, the Chief Executive; and as Jamie just said, I'm joined by Mandy Gradden, our Chief Financial Officer.

Right. Well, with the introductions over, let's just move straight into the result.

We saw strong performance for the company in the first half with organic growth of 8.7% on the top line and 9.3% organic profit growth. Or alternatively, with all products in our business today as if they were in our business from the 1st of January 2018, 11% pro forma revenue growth and 10.8% pro forma profit growth. Overall, we were very pleased with these results for the half.

Slightly stepping back, before we review the performance of the individual segments, at a high level, what we have achieved is a rate of growth we have been targeting through the last 18 months at the top line but also a strong overall performance in profit across most of our product lines. This has not only allowed us to both deliver a strong company profit number but also gave us the headroom to accelerate our investment in our e-commerce product lines of Edge and Flywheel.

We have ambitious plans for our company. We are already delivering world-leading capabilities in high-growth end markets of digital commerce. Getting the balance right in our execution so that we deliver strong growth in both revenues and profits for the overall company while also ensuring we're able to invest in our future is critical -- will be critical over the coming 3 years. We are delighted that the actions we took in 2018 enabled us to deliver so well in this first half of 2019.

Now looking at the details of each segment. For Product Design, we continue to have a very strong performing half with the fundamentals of customer retention and very high levels of engagement across the base underpinning the strong economic results. We achieved 9% revenue growth, up from 7% last year. However, this was slightly flatted by the strong demand for our Mindset consulting services. Again, we are seeing a combination of good underlying growth, the ability to launch new products like Beauty to sustain future growth while combining this with strong operating leverage.

The WGSN product lines are our most advanced in implementing our operating model design and are consistently our most -- our highest-performing subscription products.

Global market leadership, record customers' engagement and retention, strong innovation combined with a world-class leadership team with the strongest depth of expert talent globally, all means we remain very confident in the performance of the Product Design segment going forward.

Turning to marketing. We set a clear objective for marketing -- for the marketing segment to return for growth in 2019, and we were very pleased to see it firmly achieve this with a 13% top line growth. All of our marketing product lines, Cannes Lions, including its digital products, MediaLink and WARC, contributed double-digit growth for the half. This growth was driven through a combination of strong performances in our traditional product lines, the refocus last year into higher-value, more stable end markets, and the successful launch of new combined product lines such as CLX.

We're particularly pleased with the impact of the Make it WARC campaign launched in Cannes Lions. The WARC product lines are continuing to perform above expectations. For those of you who had the opportunity to be in Cannes this year for the event, you would have, of course, seen MediaLink performing at the top of its game in the new venue called MediaLink Beach. This was a new launch and concept for this year's event, and it proved to be very successful.

Moving to our sales segment. Money20/20 overall delivered good growth in the first half. Europe, the second biggest market after the U.S., delivered well and achieved double-digit growth. As we have previously commented on, our Asia show in the year -- in year 2 slightly declined due to a combination of a very strong comp from year 1 and, of course, increased competition in the market from the Singapore FinTech Festival, which is a government-run event.

Edge product revenue was tempered in the half primarily due to the lower cross-sell and up-sell activity across digital shelf and market share products while we move our major customers through the migration to the new platforms. We also had lower nonsubs revenue than last year.

Growth within the Price & Promotion product line was also impacted due to Sears entering Chapter 11. This did have a reasonable impact on the overall trading growth numbers for BrandView, but we were compensated by this in the reduction of the purchase price for the BrandView company.

We also saw continued small declines in the Retail Insight product. However, these had a minimal impact on the overall Edge result. Through the half, we have maintained high customer retention levels with all major customers remaining with us, and we did achieve the new logo additions that we had been targeting. Due to these new logos primarily being in Europe as we said and expected from last February, the average order value of these deals was lower than in previous periods.

We are pleased with the progress the Edge team are making on the integration of the products. They remain on track, and we expect to complete this work in the first half of 2020. We do not expect to see the Edge business return to significant billings growth until post this period, and as a subscriptions business, this means we would anticipate 2021 being the year that Edge revenue growth returns to the high rates that the end market serves.

Finishing on the Sales segment, we have seen very strong performances in the new Flywheel product lines. The acceleration of the technology investment, the expansion of the service teams in Europe and Asia, plus the launch of support for the new Walmart self-serve platform have set the business up very well to maintain its high growth rates going forward.

We have completed all of the integration activities for Flywheel, and so the business is now fully set to leverage the Ascential platform to drive continued high performance. There is no doubt the Flywheel organization have certainly been a key contributor in this half, and it's been an absolute pleasure to have them part of the Ascential team.

And then finally, the Built Environment & Policy team. We achieved a very positive result of 4% growth in difficult U.K. markets. We're very pleased to see these product lines not only continue to gain share across all their key strategic customers, but they also execute in a very disciplined and professional manner.

Chart 6, the target operating model for our services to customers. Our strategy is to deliver an integrated capability set of product lines to our primary end customers. These customers are organizations who design and create consumer products and wish to maximize the marketing and sales of these within the digital economy. We have a unique and valuable set of information across these 3 disciplines. Combined, we believe this data provides our customers with the competitive advantage to win in their markets. Over the medium term, we will be focusing our product development to enable our customers to get this joined-up view.

The fundamental step to enable us to be able to link all of this unique information we own today, will be implementing the new Edge dynamic product catalog system into every product. This will enable us to join up across the customer taxonomy for our product ranges and the segments they serve. For our customers, it will be critical in the future to be able to get to an integrated consumer to product view.

Let me walk through the wheel and map each of our existing product lines into the descriptions of each of the slices that you see. Starting at the top within the Product Design segment, we got future consumers. WGSN's Insight product has created a framework to map consumer and market demands, which we will then be able to link to specific product trends they predict that will be there for demand in the future.

Then we move into influences and communities. Building products today in isolation and not understanding the major influencers and consumer communities that are likely to impact these groups going forward will be very risky. We have adopted -- adapted our WGSN core product lines to predict not just product trends but how these specifically match into the end market influencers and consumer communities so our customers can plan on a 2- to 5-year horizon how to optimize and position to win when these trends arrive.

We then move to product and packaging. The type, style, range and design of products and how are they delivered is a critical consideration for future success of companies in a digital economy. We have all seen the power of design when it's consistently applied to products to enable them to drive greater customer loyalty as well as higher prices. Apple is perhaps the greatest example of this.

However, if you wish to sell a premium brand in the future, maximizing engagement through the digital marketplaces and their logistics networks while also then delivering a high-value designed experience will be critical to maintaining price and margin differentiation. The WGSN product line and team are uniquely positioned to guide our customers to how they can stand out or fit in, in the consumers' eyes.

However, combining this unique information with the unique information we own on the performance and profitability in e-commerce platforms through our Edge and Flywheel product lines, we are uniquely positioned to help them get the balance right to optimize for design but to maximize for sales distribution efficiency.

Moving into the marketing segment and the first slice, best practice. Most critical element for our customers to understand is what does best practice performance look like in both brand-building and performance-marketing techniques. This is particularly amplified now that over 50% of marketing investment is spent in digital media.

Cannes Lions is the world's leading benchmark for this. Again, we started -- as we start to link brand customer products to the detailed benchmark data we hold in the digital Cannes Lions platforms, we can enable customers to not only know what it takes to jump the bar of best practice but also select the right partners for them to achieve it.

Once the creative and campaign message work has been initiated, it is critical for our customers to maximize the spend and optimization of media and mix they use in the market. In the media strategy and management slice, the media review practice in MediaLink enables the world's leading brands to optimize their investment strategy. Our aim is to develop products that provide greater granularity and measurement for these teams that enable our customers to both plan but also create a framework to manage their media partner's execution on a much more regular cadence.

Once our customers have maximized the creative and media plans, they then need to select the right global partners to go to market with. This is where we move into the partnership slice. Combining Cannes Lions, MediaLink and WARC, we can now uniquely guide them to select the right organizations across the marketing ecosystem to achieve their goals. This then, of course, rolls into effectiveness measurement on how they then measure the effectiveness of the media they have bought and are getting the results they need. Again, both MediaLink combined with WARC are well positioned to provide this insight.

Finally, in the marketing segment, we are now in the media optimization slice. As the cadence of the product life cycle accelerates, our clients are looking for their media to be optimized on a real-time basis by a third party who remains neutral to the media companies themselves. We are building up a set of unique data sources to uniquely enable us to deliver this information and capability for our customers to then review the performance of their media partners.

Now as we move into sales, customers need to consider carefully their distribution and retail strategies, what is the best multichannel routes to mark-to-market model? They should adopt to maximize their economic results this year, this quarter today.

Our Edge Retail Insights product has the most comprehensive distribution planning database in the market and has been market leader in this space for many years. Now that we are starting to combine our bricks-and-mortar models with the e-commerce distribution performance we monitor, we can start to help our customers produce a holistic go-to-market strategy underpinned by accurate model data.

Next, they need to consider the latest multichannel in-store technology and experiences for their customers. Over the last 10 years, the Edge Insights team have been expert in advising on retail partners, assessing which will be the most advanced in technological terms to enable the brand to maximize their consumer engagement and messaging. The key difference now is we're able to provide detailed e-commerce platform capabilities into this mix.

And then we step into price and promotion. Optimizing price and balancing promotions is only getting more complicated. As transparency on the price and offers to the consumer has never been so clear and our customers having to manage it in an algorithm-driven minute-by-minute world, their challenge in this space is only increasing. As we integrate the price and promotion algorithms of Edge, we can enable our target customers in the brands to take a more active role in managing their position and price in the market.

Once they take their products into the market, they then enter our capability slice of digital shelf optimization and digital market share. We have the most powerful market-leading platforms in Edge Shelf and Share, plus Flywheel, for our customers to enable them to real-time optimize their digital trading, sales performance and share measurement to ensure they are deploying winning strategies at a product level on an automated basis.

And finally, as with the previous commerce evolutions, knowing and having insight on who are running the leading consumer payment capabilities but probably more important the credit offerings in the market, will shape heavily the choices for product distribution strategies. Today, Money20/20 enables us to see these capabilities at a macro level by market. Over the next few years, we want to be able to build on this in market knowledge and add performance and benchmarking data on the success rates of the platforms for our customers to have real visibility.

As we've been combining and building out our capabilities to be able to provide this integrated information service to our customers, we identified 2 critical areas we had to address. Creating an integrated and dynamic product catalog system that is unique to each customer's internal taxonomy is critical.

Being able to then join up all of our information into this taxonomy so they can easily operationalize it, plus run their business model using it, is the fundamental next step we needed to take. This move offers -- this moves our offer, sorry, from a set of interesting stand-alone products to a set of integrated Information Services they can run their business on in a real-time daily world.

We have in Edge the most advanced single dynamic cataloging platform in the market today. The current integration programs ensure we are creating a long-term market-leading capability. No other organization has successfully deployed this at individuation or SKU level. Once we have completed the capability to build these highly accurate catalogs, we can then systematically link each element of our products into this master view for our customers.

The second was being able to link all of this product-orientated information into a highly robust and at-scale view of engagement of their consumers. Having the product view is critical. Being able to then link that into an at-scale consumer digital usage source that is not blocked or limited by the rapidly growing proliferation of walled gardens, will be the real breakthrough moment for our customers.

The first of these critical objectives we have been addressing through the integration of the Edge platform. The second, the single catalog capability this is building will enable all of our other information sources to have one common link or glue.

The second element we have been researching the answer for, for nearly 3 years. Consumer-level information sources at scale are extremely rare. Ones that have long-term information and consumer referentiality and high-quality access to the information are even rarer. We have, through this 3-year period, tested and reviewed a wide range of potential sources.

However, none really match the requirements of our customers or the quality of the supply at a high-enough level. Most digital consumer insight panels being provided in the market today are measured in low single-digit millions of consumers and due to the in-browser collection methods they use, they're often blocked from the critical information you need like the exact advert served or the actual price being offered due to the differential price methods being deployed in buy baskets.

Today, we are announcing a strategic venture with Avast plc to purchase 35% of their Jumpshot company, which we are confident over the medium term will provide this last very important ingredient into our model. This will enable us to link the world's most unique product view information with the world's largest consumer cross-platform digital engagement data.

So Jumpshot itself. Jumpshot is a wholly owned subsidiary of Avast plc, the leading Internet cybersecurity services company. We have made an initial investment in the company to buy 35% of the share capital, which, subject to the achievement of some key success criteria, will expand to 50% ownership by 2021. As part of the joint venture, we will be developing a range of new products that will underpin our information wheel.

We have deliberately set up our partnership to maximize the unique skills of each partner at each stage of the defined ownership periods. In this initial stage between now and the end of 2021, the primary activity will be high-scale data engineering to create the unique products we and the markets require. Jumpshot and Avast are world class at high-scale consumer information processing.

We will, in parallel, be building out the go-to-market and customer engagement for the existing Jumpshot products and the new ones we are jointly creating. At the end of 2021, we then plan to take the majority ownership of the company, 51%, as the shifting balance moves to maximizing the distribution of sales of these products into the global client set and more tightly integrating the information experience for our customers.

So what is unique about Jumpshot? Jumpshot is a business that has a rare set of information products. It is drawn together from tens of millions of anonymized consumers across 180 countries, covering their full digital engagement across mobile, tablet and PC devices, but it is particularly strong across the G8 countries. Due to the way this information is collected, they have full transparency on the digital engagement of the consumer and it's not limited in its views by the walled garden systems of the major technology platforms.

Jumpshot has built a set of information products to allow brands to identify and optimize their path to purchase on the leading digital marketplaces. It is from these unique products, plus the expansion to use our unique customer catalog system, plus our market share information, that become the basis of the new products we will generate.

Just to give you a sense of the scale of information captured, they're currently processing around 5 billion records a day across tens of millions of anonymized consumers. The scale, size and level of access to the consumer community is many multiples greater in scale than any existing digital consumer product in the market today.

With the uniqueness of the consumer data collection, we are optimistic about the impact the Jumpshot information will deliver across every element of our consumer product platform. The combination of this product line, the new Edge-integrated products, Flywheel, WGSN and the unique information we hold across other brands, makes this a very valuable combination for our customers.

And then finally, on Chart 8, just quickly going through progress before I hand over to Mandy. We set 4 objectives for the year.

On execution, we've seen very strong execution in WGSN, Flywheel and the Built Environment brands. We've got good progress in establishing our strategic client management program, so we can start to position our major clients for the new capabilities we are delivering.

On the integration of Edge, the integration program is on track and the key benefits we saw at the start of the program remain very clear to us and with the announcement of Jumpshot today, even clearer.

From a market segment back to growth, we are very pleased, not just with the financial results that our marketing segment has delivered, but the quality of the product delivery from all of the product lines in this segment. We had a record MPS result for Cannes Lions. MediaLink hit a record engagement levels of meetings at the Cannes Lions Beach of circa 1,000, and the Make it WARC campaign has resonated extremely well.

Our One Ascential operating model continues as all of the steps we've been taking in the background to join up our organization and position it in readiness for our more integrated product offerings is progressing well and to plan.

At this stage, I will now hand over to Mandy for her to walk you through the financial performance in greater detail, and then I will return later for the outlook statement and Q&A.

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Amanda Jane Gradden, Ascential plc - CFO & Director [4]

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Thank you very much, Duncan. So before I look at the overall shape of our results, I thought it would be useful just to remind you of the shape of the business overall.

As you can see from our wheel here, over 90% of our revenues and profits come from our 3 core segments of Product Design, Marketing and Sales, and we have just around 8% of revenue and 10% of profits that come from our Built Environment & Policy segment. And you can see quite clearly in the wheel and looking at the product brands within that wheel, our big 6 products of WGSN, Cannes Lions, MediaLink, Edge, Flywheel and Money20/20 are very much a considerably simpler picture than it was a few years ago.

So turning to the headlines. Before we dive into this, I just wanted to make 2 notes on the basis of preparation of these numbers. So obviously, these are all continuing operations. You'll remember that this time last year in the first half, we still owned Ascential Exhibitions, so we had about 4p of earnings per share in discontinued operations last year. The only time we see that hitting today is in the profit after-tax line in the comparative figure.

And secondly, we are adopting for the first time, IFRS 16 lease standard, which in short, has a favorable impact on EBITDA, an adverse impact on depreciation and interest and no impact at all on profits before or after tax or earnings per share.

So in summary, as Duncan has already said, our organic growth in top line revenue is 8.7% or 11% on a pro forma basis, and we delivered GBP 236 million of revenue.

At EBITDA, we grew slightly ahead of that organic revenue at 9.3% EBITDA level for organic and 10.8% for pro forma. And you'll see also from this slide that margins reduced slightly from 33% to 32.5%, driven by a couple of factors: first of all, the notably -- the inclusion of BrandView and WARC, which was acquired in the second half of last year; and secondly, the integration -- I'm sorry, the investment in Edge.

Despite the slightly higher tax charge, we grew our profits after tax by 23% and our EPS by 22%. We had a strong cash generation at 102% conversion of operating profit, finished with leverage of 0.9x.

And then in terms of our dividend, we've recommended an interim dividend -- or we declared an interim dividend, rather, of 1.8p, marginally lower than the 1.9p from last year, which is in reference to the absence of those discontinued earnings that we had this time last year. We'll cover this in more detail in capital allocation section.

Looking at our organic revenue growth. You've probably seen many of the headlines here, and we have our typical bridges where we remove the impact of exchange on the left. We then handle organic growth in the middle, and then we bring in the acquisitions on the right-hand side. And what you can see from this chart is that the -- in H1, the marketing segment was the key driver of growth. At 13% growth, they added GBP 11 million of revenue organically. And then the Product Design segment came behind that, contributing strongly with that 2% expansion to 9% organic revenue growth and adding GBP 3.4 million of revenue.

And of course, our acquisitions, on the right-hand side, WARC, Flywheel and BrandView, none of those were there in the first half of last year. They were all second half acquisitions.

And this is the picture, if you count them in, as though they had been there for the whole year and take their results from the 1st of January 2018. And here, this is the measure -- this pro forma growth measure is the thing that we use internally to measure the growth of the business, and it gives you a much better view of what the actual flying speed of the company is, and you'll see overall that the underlying growth of the brands here is 11%. And you'll see effectively the key components there. In particular, you can see the growth of 13% again on the Marketing segment and then 11% growth on the Sales segment compared to the 3% that we saw on the prior slide.

Let's talk IFRS 16. It's a very numeric chart list and it's literally there for -- to hope to be useful to people after the event, and it literally sets out what the numbers would have been before or after IFRS 16. But let me give you the headlines, which are the sort of -- the things that have the circles around them.

The first is that first half EBITDA was improved by GBP 4.2 million by virtue of removing essentially the property rent expense from EBITDA. And as a general observation, if you look at all periods, both historic and we've done some modeling prospectively, the impact of this is they add between 1 and 2 percentage points to the EBITDA margin of the company.

You can also see that depreciation increased by GBP 3.6 million in the first half. Both of these numbers we broadly expect -- as well as the interest impact, broadly expect to be double for the full year. And so what that means is for 2019 where our pre-IFRS 16 depreciation consensus was GBP 13 million, we're expecting that to move to about GBP 20 million by the time we amend these -- the depreciation numbers.

Finally, we've got interest costs which has increased by GBP 0.7 million, and as I said earlier, we would expect that to double for the full year. You can see that the impact on profit before tax is 0 or negligible in all years.

From a balance sheet perspective, that's not on this slide, but you can see in it the back, we've added GBP 26 million to our fixed assets and GBP 29 million to our lease liabilities. We've got quite a few of our lenders here in the room today. And just to sort of confirm, we haven't changed our calculation of how we calculate leverage, so we've done that when we come to the leverage slide using pre-IFRS 16 numbers, which we understand to be in line with how the banks are going to be treating things for the next couple of years.

Then -- now we know what the margins are post-IFRS 16, here's how they've actually changed and here are the key features of the changes.

The first thing we've got to do is to look at the M&A impact in H1 last year, so these are the dilutive impacts of our acquisitions, those 3 that weren't present in the first half, and that was 1.1 percentage point. So effectively our H1 pro forma as restated for IFRS 16 is 32.5%, which is exactly the same as the 32.5% we've just delivered.

What you can see from this slide is that although foreign exchange has various impacts across the segments, it nets out to 0 in the end from a margin perspective. But most importantly, from an underlying change perspective, you can see that we've got growth in Product Design, in Marketing and in Built Environment & Policy margins, which have all basically allowed us to make the additional investment in Edge. Net impact from an underlying change perspective is 0.

We'll continue to invest in our Sales segment in the medium term as we bring together both our Edge businesses but also as Flywheel expands outside the U.S. and into new platforms, and that's going to be balanced by operating leverage in those other segments. And that's the reason that we continue to give the guidance that we've given for the last couple of times we've done this, which is that we're targeting EBITDA margins on a pre-IFRS basis of 29% to 30%. And given the application of IFRS 16, that would be sort of 30.5% to 32% range. So that continues to be our guidance for EBITDA over the next couple of years.

We then move into the same slide in terms of the EBITDA growth on an organic basis where we see the Sales segment profits impacted, as we've discussed, by the investment in Edge. And I should also mention that although it's much smaller, we did have a small decline in Retail Week, World Retail Congress, which is facing obviously the mainly U.K. retail environment and is having slightly more challenging end markets, obviously offset to a great degree by that excellent growth in marketing profits that you can see there.

A similar picture if you go to pro forma although, of course, the very strong growth of Flywheel that we've mentioned when it's taken into account in the profitability of the Sales segment reduces that decline -- that year-on-year decline somewhat.

Looking at our segmental performance, our segmental revenues. For the sake of simplicity, I'm only going to comment on pro forma growth. All the numbers, however, are there in the little boxes on top of the bars.

As Duncan has already said, Product Design, which is, of course, WGSN and its various subproducts, grew by 9%. Growth has been driven, not just by recent launches, Insight and Barometer are great examples, but also, as Duncan has mentioned, the specialist advisory business Mindset.

Overall, for our subscriptions business, we grew customer volumes in this segment by 1%, and we grew average revenues per customer, which is a mixture of price, yields in terms of how much they take of each and cross-sell in terms of new products, we grew that by 5% in the half.

Overall, the marketing segment grew 13%. Cannes Lions, MediaLink, both double-digit growth. All 3, as you'll see from the release, all 3 of Cannes Lions revenue streams, award entries, partnership and digital and delegates, all grew. And of course, the return of Publicis was certainly helpful and boosted the growth rate by around 3%.

Although smaller, I'm very pleased to see that WARC also did double-digit growth, driven by the launch of new products, both last year and the first half of this year. And as we've mentioned, the new CLX product, the summit that was a venture between MediaLink and Cannes Lions, also contributed to the growth in this segment.

In the sales segment, the growth of 11%, driven by -- pro forma growth of 11%, driven by Flywheel's extremely strong growth rate, supported by overall good growth from Money20/20 where the European show was double digit, offsetting that small decline in Singapore. And as we discussed in June, our Edge growth rates reduced from the 2018 levels, driven by those temporary impacts of the integration and reduced levels of nonsubscription revenues with the latter taking down growth by 3 percentage points.

As expected, we did, however, deliver a strong growth in subscriptions revenue for both Market Share and Digital Shelf, which are, of course, the 2 largest pieces of the business.

We've already mentioned the Retail Week and World Retail Congress impact in terms of sales. And Built Environment & Policy had a very solid 4% growth rate. All of Groundsure, Glenigan and DeHavilland were in positive territory contributing to that growth rate.

This chart here really just covers exactly the same trends, following the positive direction of revenue growth, amplified by operating leverage. And the patterns, you can see very visible in the change in each of the segments' margin where we see positive margin improvement in Product Design, marketing and Built Environment & Policy and that reduction in sales that we've anticipated.

As you all know, those of you that have covered us for a while, there is quite a bit of seasonality in our business driven by the fact that Cannes Lions, which is a large product, takes place in the first half. And that means that our margins in H1 are always higher than they are in H2, and this year will be no different.

Taxation. Our effective tax rate was 24.1%, in line with our guidance of between 24% and 25%. We don't expect that tax rate of between 24% and 25% to change much over the next 2 or 3 years. Although we've got a growing proportion of profits coming from the States, we also have a growing proportion of profits covering -- coming from non-U. K., non-U. S. sources, which are taxed at less than the U.S. rate of 26%.

In the first half, we paid just GBP 3 million net in terms of our cash tax, and that was because we had a recovery of an overpayment that we made in the first half of last year. And of course, that continues to be quite low because we see the benefit of our tax losses, which are on our balance sheet, which don't give us benefit in our P&L account but do give us benefit in our cash tax, so that was GBP 4.6 million of cash tax benefit in the half.

We've got GBP 16.7 million of deferred tax assets on our balance sheet for U.K. and U.S. losses, plus another GBP 20.7 million that relates to deferred consideration. When we buy our U.S. businesses, we often get attractive tax treatments associated with those considerations. And the combination of deferred tax assets of GBP 37 million will turn into cash over the next 10 years, but about half of it will come through in the next 2 years, which will keep our cash tax rate -- our cash tax low for 2019 and '20 and into 2021.

Our net debt bridge, what you can see here is how our net debt on a pre-IFRS 16 basis has evolved over the period, gone from 1.1x leverage to 0.9x leverage. And you can see that the core elements are, firstly, operating cash conversion of 102%, it's a touch below last year's operating cash conversion, and that's really driven by Flywheel. Flywheel is a working-capital positive business and is growing extremely strongly. And therefore, the sort of 120% that we saw last year, we haven't been able to replicate because we've been funding that working capital to grow -- to drive Flywheel.

By the time we then take out CapEx and tax, we get a free cash flow of 85%. We then -- our CapEx guidance is unchanged over the next 2 to 3 years of between 5% and 6% of revenues with about 5% of revenues in this particular financial year.

It's worth noting that this is reasonably modest CapEx relative to sort of the more pure-play digital information businesses where they often have CapEx levels at more than 10% of revenue.

Moving across the chart, combination of exceptionals and M&A. We basically spent GBP 38 million of our cash inflow in the half on M&A and deferred consideration. And as normal in the Appendix to the deck, we've shown the rollout of the deferred consideration obligations and our estimate of what's still to come, and we estimate that there's between GBP 90 million and GBP 110 million of deferred consideration yet to pay. Obviously, we also announced Jumpshot this morning, which was, if not deferred consideration, will be a use of cash in the second half.

Lastly, dividends and some smaller FX items before ending at 0.9x. I'd expect to have a very modest reduction in leverage between now and the end of the second half.

My final slide is on our capital allocation approach. And as you can see from the chart, there's a number of things that the Board of Ascential considers on a regular basis in terms of where the capital is deployed, and obviously, the leverage target is unchanged from what we've published at 1.5 to 2x.

And we're obviously substantially below that at the moment, so we consider uses of cash around organic investment, primarily in CapEx, that I've mentioned already. Secondly, M&A, we've got obviously the deferred consideration obligations I just mentioned. And whilst we're focusing much more on integration this year, we still have a number of bolt-on acquisition opportunities, Jumpshot was one of them, to give us key capabilities that we're continuing to pursue.

We then pay -- our dividend policy is completely unchanged, so 30% of our adjusted net profit. That was GBP 15.7 million paid out in the first half. And then, of course, as and when any sort of form of surplus arises, we would consider other efficient ways of returning cash to our shareholders.

So I'm now going to pass you back to Duncan, who will summarize and mention the outlook.

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Duncan Anthony Painter, Ascential plc - CEO & Director [5]

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Thank you, Mandy, as ever for that very thorough review of the economics for the business.

Just in summary then, we have a very clear strategy for our business, we've been progressing well through that and our sense was that the first half was a very successful half in achieving the key steps that we need to.

We set 4 operational goals for the year, and we remain clearly on track for those.

And then finally, for our full outlook for the year, we believe we are trading in line with expectations, and therefore, our overall Board takes confidence in our outlook for 2019 performance and the prospects of our company on a longer-term basis.

So at this point, we're now going to move to Q&A.

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Amanda Jane Gradden, Ascential plc - CFO & Director [6]

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Why don't we start with Katherine, then Nick, then Will, and then Natasha.

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Questions and Answers

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Katherine Tait, Goldman Sachs Group Inc., Research Division - Associate [1]

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It's Katherine Tait from Goldman Sachs. Just to start perhaps on the overall medium-term target for double-digit growth. You talked about Edge returning to that sort of higher level of growth in 2021. Does that mean that we should not expect the double-digit medium-term growth until 2021? Or given the strong pro forma performance in the first half, could we see that next year?

Second question just on Jumpshot. Can you talk through how you've thought about the risks around the data that you're clearly going to have through that acquisition and any -- I understand it's not impacted by GDPR today, but given the sort of increasing concerns around data security and anonymity, et cetera, can you just talk a little bit around your confidence that, that won't be affected in the future?

And then finally, on MediaLink Beach, obviously strong contributor to the growth in the first half. Can you talk about how much that can grow in 2020? Is it -- can we see that 1,000 meetings go to 2,000? Or how should we think about that growth trajectory going forwards?

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Amanda Jane Gradden, Ascential plc - CFO & Director [2]

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Shall I do the first, Duncan?

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Duncan Anthony Painter, Ascential plc - CEO & Director [3]

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Yes, please. Why don't you take the first one, Amanda?

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Amanda Jane Gradden, Ascential plc - CFO & Director [4]

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So yes, in terms of double-digit growth, as we reiterated, that is our medium-term target. We, in line with how we wouldn't be drawn on what medium-term meant previously, I think we're still not confirming whether or not we will be able to deliver that in accordance with our current forecasts in 2021 -- 2020 or 2021. So I think it's important the points Duncan has made about the sort of flow-through of billings into revenue for Edge is an important factor, so -- but unfortunately, we're not going to be drawn on it.

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Duncan Anthony Painter, Ascential plc - CEO & Director [5]

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And then on the Jumpshot data confidence, well, what I can assure you is that the -- firstly, the method in which consumers are joining, they understand that the data is being used. The second element is that none of the data will be used for targeting purposes.

So the key concern I think of most consumers is when they find that, as I'm sure it is for yourselves when you experience it, is where your data is being used and then you're being obliterated in messaging and so that's definitely not the intention of these products. And in fact, we have no intention of using them for that purpose.

The third is the manner in which the collection and obviously the certainty around the way we collect it means that it's -- by the time -- there's at least 3 stages of anonymization before it reaches the source to which we have in Jumpshot. So it is very much then anonymized to device and tracking of what -- basically trying to see the flows of what people do. And our intention is to build products that improve service and experience or product's ability within the ecosystem, as I say, not to generate products that are then utilized for targeting and individual analysis.

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Amanda Jane Gradden, Ascential plc - CFO & Director [6]

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MediaLink Beach?

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Duncan Anthony Painter, Ascential plc - CEO & Director [7]

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Yes, so I think MediaLink overall has obviously gone on a consistent growth of the meeting profile, MediaLink Beach clearly gave it a significant uplift. We do have exciting plans for 2020 around what we're looking to use that space for and it will be for both MediaLink and wider Ascential businesses.

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Amanda Jane Gradden, Ascential plc - CFO & Director [8]

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Nick?

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Nicholas Michael Edward Dempsey, Barclays Bank PLC, Research Division - Research Analyst [9]

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Nick Dempsey from Barclays. Three, please. So maybe I should dig a bit more on Edge beyond this year. So if we're saying it's not going to get to the growth of its industry until 2021, which is double digit or 10% to 15%, I guess, then are we kind of gradually getting there, ramping up from 3% to double digit during 2020? Or how should we think about that progression?

Second question on Jumpshot. I guess as I understand it, the data here is kind of an output of what Avast does. How would it necessarily make sense strategically for you guys to own more than 50% if they were still effectively in control of the data?

Third question, MediaLink. I know you've said it's much lumpier, much harder to predict now. Can you just give us a bit of help in terms of the pipeline or the outlook for the next few months for that business?

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Amanda Jane Gradden, Ascential plc - CFO & Director [10]

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Sure. So in terms of -- shall I take the?

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Duncan Anthony Painter, Ascential plc - CEO & Director [11]

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Why don't you take the first and the last, Mandy?

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Amanda Jane Gradden, Ascential plc - CFO & Director [12]

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Sure. I'll do the first one. So in terms of Edge, we haven't confirmed what the growth rate of Edge was in terms of the first half, other than to say it is reduced from last year. But obviously, it's within a segment which itself is growing at -- its segment is growing at 3% organic and 11% pro forma.

From a progression perspective though, the -- we would expect in 2020 to start to capture the billings growth that is driven by the growth of the segment, which will flow through to revenues towards the back end of 2020 and into 2021.

So it's really -- it's a mechanical piece around when the integration is completed so that we can execute upon the cross-sell, for example, move that into billings and then move that into revenue. So that's the sort of commentary around Edge.

From a MediaLink perspective, the pipeline looks very good. As you point out, MediaLink has less retainer revenue today than it did a couple of years ago and much more project revenue, and that was a key driver of them being -- delivering their double-digit growth in the half. But the pipeline looks strong for the second half, but we're certainly not guiding that it's a double-digit growth half. We still would expect overall MediaLink to grow well for the year, but we can't guarantee at this stage that it would be a double-digit grower.

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Duncan Anthony Painter, Ascential plc - CEO & Director [13]

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And then sort of coming to your Jumpshot question, I think I understand it, but we might need to clarify as I go. But effectively, we do see this very much as a partnership to start with in the long term because the reality is we're into very, very, very high-volume data processing with this asset and it's very specialist work.

So we definitely welcome the fact that Avast have wished to be a partner beyond the sort of initial stage of 2021 where we have the right to step-up to the majority ownership. We welcome their environment but of course, as you would expect, should they wish to sell their equity in the future, we're obviously in a position, through the terms, where we have the rights to take that first, and beyond that, we have long-term licensing agreements for the data.

So we're well protected in that respect should it happen, but there's nothing would indicate to us that Avast have any other objective but to remain long-term partners in what they also see as a very exciting opportunity.

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Amanda Jane Gradden, Ascential plc - CFO & Director [14]

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Great. Will?

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William Henry Packer, Exane BNP Paribas, Research Division - Executive Director of Media Equity Research [15]

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It's Will Packer from Exane BNP Paribas. Three from me, please. Firstly, on Edge, H1 '19 growth suffered from difficult comps associated with consulting work that I assume that's receding now. You're adding -- you've added 40 customers, the same as last year, and yet you're talking to growth for 2020 of remaining relatively weak versus history.

Should I assume that you're losing customers elsewhere? Or the revenue generated per customer is falling because of specific challenges? Just it would be helpful to put those pieces of the puzzle together.

Secondly, some of your competitors are looking to achieve a similar end-to-end solution, perhaps not as wide an end-to-end solution with the big wheel, but within the e-commerce analytics space. Could you just update us on the progress of your competitors and how -- your key differentiators?

And then finally, on Money20/20 China, I assume you have a decent visibility on forward bookings. Could you just help us think about how that business is doing?

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Amanda Jane Gradden, Ascential plc - CFO & Director [16]

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Want me to take the -- I'll take average revenue per customer and China, if you want. And do you want to do competitors' analytics?

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Duncan Anthony Painter, Ascential plc - CEO & Director [17]

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Yes, of course.

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Amanda Jane Gradden, Ascential plc - CFO & Director [18]

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So in terms of your question, yes, H1 had -- it wasn't consulting, it was specific data feed sales in H1 '18. And the impact of that, as I mentioned, was about 3 percentage points off of the first half growth rate for this year. And yes, that will become a smaller thing, as you rightly say.

As Duncan mentioned, adding those 40 new customers, many of them are in Europe, and that comes with a smaller average revenue per customer. And yes, that has impacted the overall average revenue per customer of Edge. And so yes, that is a feature, and yes, it would be slightly lower on a per-customer basis because of the expansion.

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Duncan Anthony Painter, Ascential plc - CEO & Director [19]

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But coming back to your other point around -- in the retention, no, we're not losing retention challenges in retention of customers, and in fact as I referenced, we've kept all of our major customers. So we're not losing growth to competitors in that respect. They're not winning customers off us. In fact, all the major companies in the world have renewed.

I think the challenge is, and you know this from the previous retention value growth rates, that what we're not now getting is that upsell into those big customer sets where they're expanding because they're waiting for the new product. So if you diagnose the results of Edge, really what you get down to is it's that feature that's having the biggest impact to growth combined with, as Mandy said, the one-off orders.

And then in terms of competitors themselves, as -- I think the retention speaks for itself, we're not really seeing competitors enter our customer set or our territory and win major clients. We are very optimistic actually around winning a number of major clients of other competitive organizations so that gives you a general sense.

And I think the landscape of competitors remains the same, which is broadly a small set in the main of organizations with low capitalization in comparison trying to obviously deploy solutions that you can see from the initiatives that we've had to make, require significant value and significant investment. I mean, just to put it in context, I mean, what we invested in the first half over and above in run rate expense in our Edge business would be greater than some of the capitalizations of some of those companies.

So it just gives you a general sense of this is quite a sport where you need to have reasonable scale and size to execute. And so our -- we don't see any weakness in our competitive advantages. I think in fact, we see it strengthening. And of course, Amazon, particularly if we look at that marketplace, but also now, the same will come with Walmart, with its own self-serve, having the ability to manage the sophistication of variations and the new features that Amazon are putting in the platform means that you need more and more broad data sets. And in fact, things like Jumpshot and the scale of the data of Jumpshot are what are going to enhance what we get through the platform.

So if anything, we feel, through the half, what we've done is extend our competitive moat, not make it smaller.

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Amanda Jane Gradden, Ascential plc - CFO & Director [20]

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In terms of Money20/20 China, it's a very late booking market, particularly for delegates. And yes, it's a very late booking as it was last year. And as we've said in terms of China, we're looking at a different pricing strategy, so we're pricing for volume of delegates in the Chinese market. But we wouldn't expect to know much more about how successful we've been on that until we get into the fourth quarter. Natasha?

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Natasha Brilliant, Citigroup Inc, Research Division - VP [21]

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It's Natasha Brilliant from Citi. I just wanted to come back on Edge. I had in my mind that next year, you talked about a rebound year and now it feels as if the tone has just moderated a little bit. So maybe you hadn't really given the detail on the kind of the first half, second half split, but I sort of assume that growth would come back more in the first half.

So I just wanted to clarify whether anything has changed, whether sort of within your own budget, so your own sort of visibility, anything's changed there?

Then secondly, coming back to Money20/20 and Singapore. I assume the competitive threat is sort of here to stay, so is there anything that you can do to mitigate that slightly? And are there any plans for new launches in the pipeline?

And then thirdly, on WGSN. At Cannes, you talked about launching some new categories, so could you just remind us of what those might be and the pipeline, and whether in the medium term, this is a business that could get to double-digit growth?

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Amanda Jane Gradden, Ascential plc - CFO & Director [22]

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Do you want to cover the Edge?

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Duncan Anthony Painter, Ascential plc - CEO & Director [23]

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Yes. So I think, yes, so I think on Edge, the messaging is no different actually, Natasha. I think it's just simply reinforcing for everyone here the mechanics of how a subscriptions business works because I know some people can get a bit carried away with their revenue growth, not realizing that you actually need to recognize the billings first and then defer that over 12 months. So I think that's nothing more than just reinforcing, so you think about the modeling of billings through to revenues. So no, nothing's changed in that respect at all.

And then on Money20/20, I think we referenced in the last update and certainly at Cannes, for instance, when people ask me about Money20/20 Singapore, I think the first thing is, as we said, we had a -- with those 2 things we're trying to work through, the first is we had a huge first year because we effectively had 2 years of selling to get to the first year. And the overall retention rates, et cetera, of that much, much bigger income stream don't vary hugely. So it's -- so you've then got a bigger battle into the second year against those comps.

And so from my perspective, it's unclear as we go into the third year how much of the results were because of just that enormous year 1 comparative to year 2 versus the Singapore FinTech Festival as true competition. I mean there's no doubt that just the economics and the distraction that it causes with our customers, because they are 2 very different products, I mean, I would -- I don't think we want to set the impression that in any way that what Money20/20 would provide to the Asian customer set would be comparable to what people are going to the Singapore FinTech Festival for. But where the distraction comes is around -- in that first few years, their belief that perhaps the 2 are similar, and one is basically free and one is sold for quite a lot of money, right? So it's -- so that's the confusion I think sits in that Singapore market.

So we'd like to see, as we trade through into the third year, what happens. But effectively, Asia is, as you know, a pretty big place, and our only commitment to Singapore is this last third year show. So if we need to move it after that, then we will do if we just, at the end of the day, can't naturally compete against a government who's willing to give things away for free.

And then from -- the respective new launches, nothing scheduled as at this stage. I mean it really is around the fintech markets themselves getting to scale. And unfortunately, our monitoring of those markets suggests that other regions just still aren't getting quite the scale that you'd want to bring the show in for. So that's really where we are on that.

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Amanda Jane Gradden, Ascential plc - CFO & Director [24]

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And in terms, Natasha, of WGSN and new categories, yes, a lot of the growth of WGSN has been -- over the last few years, has been because we've expanded beyond fashion. And you're quite right to sort of remind us that effectively, our plans are to move beyond the existing categories that we have today.

And the most important one of those, and we literally got the budget submission and investment case last week, is to launch in food and beverage. And we've yet to decide which specific subset within food and beverage would be most attractive for us to approach, but trends within food and beverage are an extension of trends within general consumer. So yes, that's the plans.

In terms of whether WGSN will get to double digit, I mean, at 9%, we're sort of feeling good, but we're still reiterating that we're trying to make 7% the new normal. So that's what we said at the half -- at the full year in February. And we were -- Duncan was quite clear in his wording that we had a good boost from the Mindset advisory business in the first half. So 7% is our sort of long-range target for WGSN.

I do actually have a question from the phones, so I'm going to read it to you, Duncan. This is from Silvia Cuneo of Deutsche Bank, and she says, whilst talking about the partnership with Avast, you described that as -- that as the very last important ingredient for your integrated offer for your customers. Does this mean the focus will now be on integrating existing products rather than on more acquisitions? Is there any capability that Edge cannot grow organically, for example, in the Chinese market?

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Duncan Anthony Painter, Ascential plc - CEO & Director [25]

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So I think again, just coming back to that just for clarity, I think what we're talking about is we see Jumpshot as, particularly with consumer data, as a whole new ingredient set into our offerings, and it's certainly not, which I think a couple of people noted first thing this morning that it's all about Edge. I mean Jumpshot really -- clearly, Edge gets some benefit from Jumpshot, but it's much wider and much broader, our intentions for the products that we want to create. In fact, our suspicion is that the area that has the most potential within that -- in that product set, is actually around marketing and giving brands genuinely, for the first time, true transparency on their link and ratio to the money they spend in digital marketing and how that actually plays out in sales.

And so the core attraction, to be fair to Jumpshot, in the partnership with us was that their recognition -- and this comes back I suppose to your point earlier, Will, around their clear recognition that we're, by far, the market leader in digital sales information. And if you want to link the 2, it's best to work with the one who's #1. So that was really on that.

We do see the potential for bolt-ons. It's not about basically massive new ingredients but enhancing the recipes that we have, and China remains certainly an area we're very focused on. And we would hope to be in a position in the next 12 months to update on all the work we've done there around looking at how we really enhance our offerings, particularly around Edge in the Chinese market, because it still remains a massively high-growth market, so -- and very important for our Western brands wanting to really get traction in that market.

So yes, we've not stepped back from that. We're very focused on that, and continue on that. And perhaps you'd be delighted to know that I continued on that just after I finished on the Jumpshot close at the early hours of this morning. So it's kind of -- it's a continuation.

And then finally, we will -- look, we're a business that's doing well, generating cash, growing strongly. We have a really clear focus of what we want to do for our customers. And if we can see continuation of bolt-ons that are going to enhance that wheel and that service to our customers, then we're going to buy them.

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Amanda Jane Gradden, Ascential plc - CFO & Director [26]

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Any other questions? Yes? We'll do Gareth, and then come to you, Giasone.

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Gareth Rhys Davies, Numis Securities Limited, Research Division - Director of Media Equity Research [27]

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Gareth Davies, Numis. Just the 2 Money20/20s we've not talked about. So Europe, good double-digit growth this year. Can you maybe talk around the dynamics of that, customer-driven or sort of space expansion, et cetera?

And then also sustainability of that double-digit growth into next year, should we think it trending towards the Vegas show at sort of mid-single-digit? Or are you sort of confident at double-digit growth looking forward?

And then pretty much the same question for Vegas. I mean should we -- presumably you've got good visibility on that now. Mid-single digit realistic for this year? And sort of any thoughts in terms of refresh around that show that could help boost that growth looking forward? Or is that a sort of a steady state?

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Amanda Jane Gradden, Ascential plc - CFO & Director [28]

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Sure, I'm happy to do those.

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Duncan Anthony Painter, Ascential plc - CEO & Director [29]

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Yes. Why don't you do those, Amanda.

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Amanda Jane Gradden, Ascential plc - CFO & Director [30]

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So in terms of Europe and double-digit growth, all of the areas grew. So we had good growth in delegate volume, delegate revenue, space sold. Obviously, it's different from an exhibition. There is some exhibition space, but there's a lot of meeting rooms, so expansion of the space sold and expansions of the space and sponsorship revenues.

So it was across the piece really. I think our guidance has not been for double-digit growth for Money20/20 and I would -- for Money20/20 Europe, and I would expect that growth to come off a little bit as the product matures and the sort of 4% that we saw last year in year 7 of the U.S., 4% to 5% is the sort of rate we would expect from a mature product. I'm not sure we would yet say that, that product -- Europe has reached maturity, but it's certainly trending in that direction.

We do have reasonable visibility in terms of Vegas and the sorts of levels of growth that we delivered last year are the sorts of levels of growth that we are expecting going forward. At our last results announcement, we talked about opportunities to capture the Latin American market might be served by a potential reevaluation of the location of the show. That would only be in a couple of years' time because we do have contractual commitments. And certainly, that's something we're continuing to explore.

Giasone, and then we'll go to Patrick.

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Giasone Ulisse Salati, Macquarie Research - Senior Media Analyst [31]

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Giasone Salati from Macquarie. Just a couple of questions, please. On Edge platform integration, can you give us an update? We've seen a very detailed plan from your COO in Cannes. So just where we stand, any slippage or are you very happy how that is going?

And secondly, on Jumpshot, at risk of stealing the presentation from the next results appointment, can you give us an impression of the product rollout, how you're thinking about that timing? Do you have a January -- sorry, 2021 target in mind for a second, take at valuation. The cap of GBP 300 million looks like it's very optimistic, so just an idea. It seems like you have a product in mind the next 12 months.

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Amanda Jane Gradden, Ascential plc - CFO & Director [32]

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So just in terms of on Edge, we obviously gave you that 1-hour presentation in -- at the Cannes Lions deep dive on the progress, and that was a month ago. And progress in the last month has continued to track in accordance with that.

So multiple streams, multiple objectives, continuing to get some good proof points, but no real change over the last month in terms of the integration progress.

Duncan, do you want to comment on the Jumpshot and product in 2021?

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Duncan Anthony Painter, Ascential plc - CEO & Director [33]

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Yes. So effectively, we do have -- we are taking products to market in the meantime, even with our minority shareholdings, which we will have revenue-share arrangements in place until we take majority ownership. And we obviously have plans for that. But I think what I would suggest people really -- our main focus there is getting the products manufactured to the scale that we want as we come out the back of 2021. So as I said in my speech, we really do see this first phase about the focus of engineering rather than the focus of sales.

We will take the product out, but I think it's really important that what we also ensure we do is come out with products that customers can truly rely on, and I think that's been the sort of historic detriment of sort this isn't a panel business, but I think it's natural to compare it to sort of panel businesses. And the problem with panels is they're very low scale, and therefore, the quality out of them, apart from a very high-level macro kind of sentiment, can be quite low. And that's really been some of the problem over time of that sort of business model.

So we just want to ensure that we're getting it absolutely right with accuracy coming out because we genuinely believe -- and look, in every meeting I have with every major CMO of the world, what they tell me is that their biggest frustration is that lack of transparency around digital media expense and how that relates to what they're doing and the continual barriering actually of media brands putting in more and more wall gardens to make it harder and harder for them to assess that. And cracking that problem is one of the key objectives of what we want to do in the next 2 years.

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Amanda Jane Gradden, Ascential plc - CFO & Director [34]

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And if I may just go to your point around GBP 300 million looking very high. Typically, whenever we do one of these transactions, we would set a high barrier, but we have to set a max -- we have to set a maximum price from a stock exchange -- from a listing-rules perspective, and we would typically set it at anything up to double what we would expect to pay. And certainly, when we look at the business plan, though, we're not expecting to pay GBP 300 million for the 2 tranches of the business. Although obviously, if we did, it would mean that the business was doing unbelievably well, which would be a good-quality problem.

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Giasone Ulisse Salati, Macquarie Research - Senior Media Analyst [35]

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And just a quick follow-up, if I may. Do we have to account for any extra cost in marketing or else related to Jump?

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Amanda Jane Gradden, Ascential plc - CFO & Director [36]

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The guidance we've given in terms of the impact is that it will be reasonably neutral at an EPS level through the end of 2021 where we've got small contributions through the associate accounting. There'll be some costs, which will be included within that overall guidance of earnings' neutrality. And then we've got obviously the interest cost.

So we'd expect 2 to 3 years of reasonably neutral impact on EPS before an uplift in 2020 -- end of '21, early 2022 in accordance with the business plan that we signed up to. Patrick?

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Patrick Thomas Wellington, Morgan Stanley, Research Division - MD and Head of the European Media Equity Research [37]

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It's Patrick Wellington at Morgan Stanley. Just a couple of metrics' questions really. Just on Edge. Can we just check that this is the lowest point of growth for Edge, therefore, and that revenue growth will now pick up?

And because we're going to be looking at, as Duncan says, the billings revenue nexus next year, will you be giving us information about billings subscription growth and so on as we go into the first half of 2020 so we can keep an eye on that?

And then secondly, same thing for Jumpshot really, which is it becomes an associate, so it could disappear at this point. So maybe you'd like to tell us something about its present rate of revenue growth and whether you'll be putting some sort of depiction of its revenue growth into your pro forma revenue growth in the future?

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Amanda Jane Gradden, Ascential plc - CFO & Director [38]

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I hadn't thought about that there. Yes. No. Look, Jumpshot in terms of its revenue growth, as we said earlier, we aren't publishing Jumpshot revenues themselves. But the revenue growth of the business is high. It grew by over 50% last year and is on track for 2019 to continue that sort of rate of revenue growth, so it's a high-revenue-growth business.

We haven't considered whether or not we would give any sort of pro forma-ing. I suspect while it is not an entity that we controlled, that might be a little racy for us, so probably not.

In terms of Edge, based on our current projections, we'd expect 2019 is the lowest point in terms of the revenue growth, and we'll certainly consider giving indications. We won't -- we're not going to commit to giving specific billings metrics, but we'll certainly consider giving indications to indicate that the business is on track, pending the revenue growth coming through.

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Patrick Thomas Wellington, Morgan Stanley, Research Division - MD and Head of the European Media Equity Research [39]

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How will we tell how Jumpshot is getting along? Because as you say, it will disappear as an associate-neutral earnings contribution. What are we going to hear about that in the future?

And Duncan, could you remind us how its revenue rises? Is it mainly subscription-based as well?

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Duncan Anthony Painter, Ascential plc - CEO & Director [40]

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So we'll happily mention it in dispatches for you, Patrick, in terms of its performance as we go forward. But as you are right, it will naturally disappear, and you'll see the consolidation, and that's pretty much all you're going to see.

And then on revenues, it's nearly -- I think it's 94% subscription income.

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Amanda Jane Gradden, Ascential plc - CFO & Director [41]

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Any other questions? No? And there's nothing more on the lines.

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Duncan Anthony Painter, Ascential plc - CEO & Director [42]

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Any more digitally? No?

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Amanda Jane Gradden, Ascential plc - CFO & Director [43]

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No more digital questions.

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Duncan Anthony Painter, Ascential plc - CEO & Director [44]

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No phone a friend. Okay. So well, thank you very much, everyone, again for your interest in the company. We do appreciate so many of you coming out for these updates, and we look forward to seeing you now, in fact, at the end-of-year update because there won't be another Capital Markets Day this year from Ascential. So thank you very much.

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Amanda Jane Gradden, Ascential plc - CFO & Director [45]

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Thank you.