Ascential Regulatory News (ASCL)

27 February 2017

Ascential plc

Audited results for the year ended 31 December 2016

Successful first year as a listed company with strong organic revenue and profits growth

Continuing portfolio optimisation

London: Ascential plc (LSE: ASCL.L), the global, business-to-business media company with a focused portfolio of market-leading events and information services brands, today announces its results for the year ended 31 December 2016.

Highlights

· 2016 results in line with Group expectations

· Another year of strong Organic revenue growth and successful new product launches

· Revenue from continuing operations of £299.6m (2015: £256.6m) a constant currency Organic growth rate of 9.5% (a reported growth of 16.8%)

· Total revenue, including discontinued operations, of £357.5m (2015: £319.1m) a constant currency Organic growth rate of 5.6% (a reported growth of 12.0%)

· Robust Organic Adjusted EBITDA growth and margin expansion

· Adjusted EBITDA from continuing operations of £95.9m (2015: £76.6m) a constant currency Organic growth rate of 11.5% with expansion of margin to 32.0% (2015: 29.9%)

· Total Adjusted EBITDA, including discontinued operations, of £107.5m (2015: £90.9m) a constant currency Organic growth rate of 6.5% with expansion of margin to 30.1% (2015: 28.5%)

· Reported operating profit from continuing operations growth of 32.1% to £32.1m (2015: £24.3m)

· Adjusted operating profit from continuing operations growth of 36.5% to £83.0m (2015: £60.8m)

· Adjusted proforma earnings per share of 15.5p up 47.6% (2015: 10.5p)

· Recommended final dividend of 3.2p, making a total dividend of 4.7p for the year, representing a 30% payout ratio in line with our stated dividend policy

· Substantial progress on evolving the portfolio towards higher growth products with:

· Heritage Brands held for sale in a separate operating entity and discontinued (with HSJ sold after the year end)

· Acquisition of One Click Retail

· Announced the acquisition of MediaLink after the year end

· Strong cash generation with free cash flow after tax and capex of £90.9m (2015: £79.9m), combined with IPO proceeds of £183m, resulting in closing external debt leverage of 2.1x (2015: 4.2x) despite continued business and M&A investment.

Duncan Painter, Chief Executive Officer, commented:

"2016 was a good year with strong Organic growth for Ascential. We grew both revenues and profits driven by our focus on our leading brands and on customer retention. The launch of new products such as WGSN Insight, Money20/20 Europe and Lions Entertainment were contributors to our 2016 success.

We also made substantial progress to reshape the Group towards higher organic growth through the acquisition of US-based One Click Retail in August 2016 and the acquisition of MediaLink announced in February 2017, as well as the proposed sale of the Group's Heritage Brands. Our active portfolio management continues to drive our growth rate and geographically diversify the business.

The new financial year has started well. Since the year end, Spring Fair, Bett London and Pure Spring have taken place and performed overall in line with our expectations. While still early in 2017, we are encouraged by the current level of forward bookings and are confident of another good year of growth for the Group."

Contacts

Ascential will host a presentation for analysts and investors at 9.00am on 27 February 2017 at the offices of Numis Securities at The London Stock Exchange Building, 10 Paternoster Square, London EC4M 7LT.

The presentation will also be webcast live at 9.00am from www.ascential.com, allowing the slides to be viewed. A recording of the webcast will also be available on-demand from our website in due course.

References to non-GAAP alternative performance measures ("APMs") are explained further below.

Financial Highlights

1"Organic" growth is calculated to provide a more meaningful analysis of underlying performance. The following adjustments are made: (a) constant currency (restating FY15 at FY16 exchange rates), (b) event timing differences between periods (if any) (c) excluding the part-year impact of acquisitions (of RNG and OCR) and disposals (of MBI). There were no event timing differences in 2015 or 2016. See the reconciliation below.

2 Adjusted EBITDA is IFRS operating profit before expensing (a) depreciation of tangible fixed assets and amortisation of software, (b) exceptional items, (c) amortisation of acquired intangible assets (d) impairment of tangible fixed assets and software intangibles and (e) share-based payments.

3 Adjusted operating profit is IFRS operating profit before expensing (a) exceptional items, (b) amortisation of acquired intangible assets (c) impairment of tangible fixed assets and software intangibles and (d) share-based payments.

4 Free cash flow is cash generated from operations before exceptional items, less capital expenditure and tax paid. Free cash flow conversion is this measure of free cash flow divided by Adjusted EBITDA from both Continuing and Discontinued Operations. See the reconciliation below.

5 Leverage is Net debt divided by Adjusted EBITDA from both Continuing and Discontinued Operations

Operating and financial highlights

Exhibitions & Festivals

· Strong Organic revenue growth of 12.3% to £180.0m.

· Adjusted EBITDA of £73.5m grew 17.5% on an Organic basis

· Adjusted EBITDA margin of 40.8% (2015: 37.8%) reflecting currency impacts and drop through from the exceptional revenue growth.

· Top brand performance:

· Cannes Lions grew revenue 18% on an Organic basis, attracting over 10,000 paying delegates and over 43,000 entries, including strong growth from the third year of Lions Health and second year of Lions Innovation.

· Money20/20 increased revenues by 60% on an Organic basis. The launch of Money20/20 Europe produced revenue of £7.8m, attracting more than 3,000 paying delegates to Copenhagen. Money20/20 USA grew by 17% in its fifth year with delegates up 10% and exhibition space and meeting rooms up 27%.

· Spring and Autumn Fair grew revenue by 3% including the positive benefits from the introduction of location-based pricing offset by a decline in exhibitor numbers.

Information Services

· Organic revenue growth of 5.4% to £119.6m.

· Adjusted EBITDA grew 4.7% on an Organic basis to £35.1m

· Adjusted EBITDA margin increased from 28.0% to 29.3% reflecting operating leverage supported by a positive currency impact.

· Top brand performance:

· WGSN grew its revenues by 6% and billings by 6% on an Organic basis despite recessionary headwinds in Latin America. Retention rates remained strong at 92%.

· Groundsure increased its revenues by 8% driven by a strong first half boosted in the first quarter by volumes driven by changes to stamp duty regulations and a successful market share programme deployed through H2.

· Continued evolution of the portfolio with the acquisition of One Click Retail in August 2016 and the acquisition of MediaLink in February 2017.

Discontinued operations: Heritage Brands

· Organic revenue decline of 10.2% to £57.9m driven by continued poor economic conditions in the Middle East and the expected decline in print advertising of 36%.

· EBITDA decline of 19.7% to £11.6m adjusted for that element of allocated overhead that has not been discontinued.

· Continued portfolio management with the Heritage Brands now held for sale with sale of the first of them, Health Service Journal, to Wilmington plc shortly after the year end.

Chairman's Statement

As Chairman, it is my pleasure to report full-year results which demonstrate a strong performance for the year ended 31 December 2016.

The hallmark of this past year has been rapid, assured and continual progress against all of our priority goals. The IPO served as catalyst for the seamless evolution of our focused portfolio of events and information services brands into a more integrated and customer-centric group.

Our larger, market-leading and scalable brands continued to lead the way with the development of new products and delivered strong organic growth. We augmented our capabilities with enhanced, data-driven, forecasting and digital tools that enable more engagement with our customer communities. The acquisition of One Click Retail in August 2016 strengthened our e-commerce analytics offering across the fashion and consumer product industries and our most recent announcement - the transaction with Cannes Lions' long-time partner MediaLink announced in February 2017 - reinforces our digital advisory expertise to sectors not limited to the branded communication industry. Both of these high-growth acquisitions improve the diversification of Ascential's footprint outside of the UK.

The Company continues to refine its portfolio and after year end, announced the planned disposal of 13 publishing-led Heritage Brands, the first of which, Health Service Journal, was sold in January 2017.

Credit for this year's performance is squarely placed with our talented and energetic management team who have been open to advice from a newly-formed plc Board. Our Board was fully code-compliant shortly after the IPO with a broad range of relevant capabilities and a gender diversity that was recognised to be the best amongst the 350 most valuable FTSE companies with 57% female representation - a profile that is reflective of our broader employee base.

Our former principal shareholders participated in an orderly disposal of the majority of their shares resulting in a diversified share register of quality institutional investors. We are grateful to have been the beneficiaries of sound guidance received from former Chairman, Tom Hall of Apax, and non-executive director David Pemsel of Guardian Media Group, both of whom stepped down from the Board in September 2016 with our thanks for their contributions.

Continual customer engagement and a commitment to improve our proposition by our 1,600+ talented employees have led to admirable accomplishments in 2016. On behalf of the Board, I would like to take this opportunity to thank all our employees and customers for what has been a very successful year.

Group performance

The 2016 financial year was another successful one. Reported revenues from continuing operations grew by 16.8% including the beneficial impacts of both acquisitions and currency. Revenue from continuing operations grew 9.5% on an Organic basis, Adjusted EBITDA was up 11.5% to £95.9m, margins expanded from 29.9% to 32.0% and free cash flow conversion was 85%. As these results show, we place a premium on organic growth. We are also committed to enhancing our proposition and capabilities through selective acquisitions.

Dividend

Ascential plc was incorporated in January 2016 and, as indicated at the time of the IPO, the Board targets a dividend pay-out ratio of 30% of adjusted profit after tax. Consequently, the Board is recommending a final dividend of 3.2p per share to be paid on 15 June 2017 to shareholders on the register on 19 May 2017 which, together with the Company's maiden interim dividend of 1.5p paid in November 2016, makes a total dividend for the 2016 financial year of 4.7p.

Outlook

While still early in 2017, we are encouraged by the current level of forward bookings and solid performances at events that have already taken place. The market is very dynamic and the Board is confident about our prospects for continued success in 2017.

Chief Executive's review

2016 was another year of strong organic growth as we grew both revenues and profits driven by our focus on our top brands and customer retention as well as the innovative and creative nature of our organisation. The launch of new products such as WGSN Insight, Money20/20 Europe and Lions Entertainment made a significant contribution to our 2016 success and we also made substantial progress in reshaping our portfolio of market leading brands towards those with higher organic growth.

Track record of growth, high margins and good cash generation

We delivered a strong operating performance in 2016 with a 9.5% Organic growth in revenue from continuing operations to £299.6m and an 11.9% Organic growth in Adjusted EBITDA from continuing operations to £95.9m with an expansion in margin from 29.9% in 2015 to 32.0% in 2016.

We also continued to generate good cash flow with free cash flow of £90.9m (2015: £79.9m) representing free cash conversion of 85% (2015: 88%). This cash generation, in combination with the net proceeds of the IPO, has enabled us to invest in the business whilst also acquiring high quality growth companies, managing our balance sheet and returning capital to shareholders through dividends.

Clear organic growth strategy

We continue to deploy multiple initiatives for growth across our brands with the aim of firstly retaining existing customers, secondly increasing the number of new customers and thirdly growing the average revenue per customer. Our 2016 growth initiatives built on those deployed over recent years and included the launch of new digital products (such as WGSN Insight and a newly expanded and upgraded version of WGSN Instock), geographical expansion of our events (such as Bett Middle East and Money20/20 Europe) and show extensions (such as Lions Entertainment).

Focused portfolio of market-leading brands underpinned by diversified and recurring revenue streams

Brand portfolio

Following our decision to separate and hold the Group's 13 Heritage Brands for sale and our acquisitions of One Click Retail and, after the year end, the acquisition of MediaLink, we will now operate a focused portfolio of 20 market-leading brands. 16 of these hold clear number one positions in their respective markets. We firmly believe that our focus of management time on a smaller group of market-leading brands is a key driver of our continued organic growth success.

Our top five brands, by Adjusted EBITDA, are:

· in Information Services: WGSN and Groundsure; and

· in Exhibitions & Festivals: Cannes Lions, Spring and Autumn Fair and Money20/20.

These top brands remain our primary focus for capital allocation. Through this focus together they grow faster than our other brands and their contribution is an increasing proportion of the Group's revenues and profits. In 2016, our top five brands represented 69% of the Group's revenue from continuing operations (2015: 66%) and 81% of our Adjusted EBITDA (2015: 75%).

Revenue by type

The Group benefits from diverse revenue streams, the majority of which have recurring characteristics. Following the treatment of the Heritage Brands as discontinued, the most significant change over the last year has been a reduction in print advertising which now represents less than 1% of Group revenue (2015: 4%).

Revenue by geography

Ascential is growing strongly in international markets. The majority of our brands serve a global customer base. Accelerated by our acquisition of One Click Retail and the treatment of the Heritage Brands as discontinued, our share of revenue from overseas markets increased again and now just 38% of revenues come from customers based in the UK (2015: 48%). The recently announced acquisition of MediaLink will further reduce the dependence on UK markets.

The proportion of revenues from the Americas grew to 29% despite recessionary headwinds in Brazil driven by the performance of Money20/20, WGSN and Cannes Lions and the acquisition of One Click Retail. Asia Pacific, Middle East and Africa and other Europe contributed 11%, 4% and 18% respectively.

Disciplined operational approach

The foundation of our growth is, and will continue to be, our focus on customer retention. There is no better way to judge the quality of our products than to measure how many customers choose to renew their contracts with us each year and we spend considerable time reviewing those customers who do churn. Retention rates have again performed well across our top brands. We have also seen our broader Net Promoter Scores and product usage statistics increasing.

Portfolio management

We regularly adjust and optimise our portfolio of brands. We continue to assess both a range of bolt-on acquisition opportunities as well as the potential disposal of certain lower growth or sub-scale elements of our portfolio.

Joint venture in China

We were pleased to see WGSN's long-anticipated Chinese joint venture with CTIC start trading in April 2016 and have now further solidified our relationship and funded the joint venture with an investment of £4.5m to develop a specific product for the Chinese domestic and international markets.

One Click Retail

In August 2016 we acquired One Click Retail, a fast growing US-based provider of analytics that helps major brands optimise their e-commerce activities. Customers include consumer products companies such as Procter & Gamble, HP, Unilever, Hamilton Beach, Nestle and Panasonic. Revenue is generated predominantly through recurring annual subscriptions to the company's Dashboard product, which provides insights to help customers drive sales through Amazon and other eCommerce retailers - an increasingly important channel for many of them. The insights focus on product market share, its drivers, and the actions that can be taken to increase sales. We introduced analysts and investors to the product in detail during our November Capital Markets Day. One Click Retail more than doubled its revenues in 2016.

Heritage Brands

As part of our growth strategy to focus our resources and investment on our largest brands and those with the highest growth potential, after the year end, in January 2017 we announced that we had separated 13 Heritage Brands into a separate operating entity that is held for sale. The Heritage Brands are Health Service Journal, MEED, Drapers, Nursing Times, Local Government Chronicle, Construction News, New Civil Engineer, Ground Engineering, H&V News and RAC, Retail Jeweller, Materials Recycling World and the architecture titles including Architects' Journal, The Architectural Review and the associated World Architecture Festival. Each provides essential content to the loyal subscribers and industries they serve across three platforms - digital, events and print. The Heritage Brands generated revenue of £57.9m in 2016 (2015: £62.5m) and £11.6m of Adjusted EBITDA (2015: £14.3m), constant currency declines of 10.2% and 19.7% respectively.

Consistent with the evolution of our internal management reporting structure during 2016, we have reported the Heritage Brands as a separate segment. As a result of on-going discussions, the Board now considers a sale of the segment to be highly probable and has therefore classified it as a discontinued operation.

In January 2017, we were pleased to announce the sale of the first of the Heritage Brands, Health Service Journal, to Wilmington plc. This was the first key milestone in finding the right future home for these brands and highlighted their attractiveness to new owners.

MediaLink

After the year end, in February 2017, we announced the acquisition of US-based MediaLink. MediaLink provides advisory and business services to media platforms and brands seeking to drive growth through better marketing. Serving the consumer goods and services segment, it has worked with Cannes Lions' customers since 2011 where it hosts content and client-oriented meetings and events as part of the official Festival fringe. MediaLink fits Ascential's strategy to own market-leading brands in selected complementary marketplaces that offer trusted information and valuable connections to businesses.

Management

Effective 1 August 2016, the two operating companies in the Exhibitions & Festivals segment were combined under the leadership of Philip Thomas, formerly CEO of the Lions Festivals operating company. Mark Shashoua, formerly CEO of i2i Events, left the Company to pursue other opportunities with our sincere thanks for his achievements. We are delighted that Jose Papa, formerly CEO of WGSN, accepted the leadership of Cannes Lions and that Kevin Silk, formerly COO of WGSN, assumed the leadership of WGSN, with Natasha Christie-Miller remaining as CEO of Plexus.

Our former Strategy Director, Michael Lisowski, has taken on an expanded role as Chief Operating Officer for Ascential. His new position covers proposition development, customer insight and research and product management and is a critical investment in skills and capabilities to assist our brand teams to continue our growth and also to raise the bar on the quality and ambition of the products we create.

We were also pleased to welcome Stephen Martincic to the Group as Chief Brand and Marketing Officer from FCB, the global, fully-integrated marketing communications company, where he was responsible for building FCB's brand across the globe. Stephen has taken on a critical new role for the Group to ensure we are truly focussing on the fast changing needs of our customers and honing how we position and message our capabilities to maximise customer engagement and our organic growth objectives.

These changes illustrate the strength and depth of our management team and we are delighted that our succession planning has allowed us to be able to promote from within the Company as well as attract exciting new talent.

Strategic priorities for 2017

Our strategy and priorities for 2017 are on track - we will continue to focus most of our efforts on organic growth opportunities underpinned by customer retention as well as leveraging the competencies of newly-acquired companies. Throughout 2017 we expect to benefit from the increasing convergence of event products that connect our customers and information services that inform them.

Outlook

The new financial year has started well. Since the year end, Spring Fair, Bett London and Pure Spring have taken place and performed overall in line with our expectations. While still early in 2017, we are encouraged by the current level of forward bookings and are confident of another good year of growth for the Group.

Our customers and our people

Our continued strong performance and results would simply not have been possible without the dedication and commitment of our teams across the business and their passion to serve our long, loyal and valued customers.

I want to thank our customers and our teams for continuing to be at the heart of Ascential's continued success.

Financial Review

Overview

These results for 2016 are the first for Ascential plc following its IPO in February. Immediately prior to the offering, the Group underwent a pre-IPO reorganisation as part of which Ascential plc was incorporated and acquired the Group. The basis of preparation note below describes how the pre-IPO reorganisation has been accounted for under the principles of "reverse acquisition accounting" such that these financial statements are presented as if the Company had always owned the Group.

In 2015 the Group had two reportable trading segments - Exhibitions & Festivals and Information Services. During 2016, and consistent with the evolution of its internal management reporting structures, the Group has reported the Heritage Brands referred to above as a separate, third, trading segment. As a result of on-going discussions, the Board now considers a sale of the segment to be highly probable and has therefore reclassified it as a discontinued operation. This means that the results of the Heritage Brands for both 2016 and 2015 are included as a single line item within profit after tax on the face of the income statement. This Financial Review therefore firstly addresses the key trends in continuing operations and then, as a separate section, discontinued operations.

The results for the year are set out in the consolidated profit and loss statement and show, for continuing operations, revenue of £299.6m (2015: £256.6m), an Organic growth of 9.5%, and reported operating profit of £32.1m (2015: £24.3m). Adjusted EBITDA was £95.9m (2015: £76.6m) an Organic growth of 11.5%. The Group also delivered strong cash flow in 2016 with free cash flow of £90.9m (2015: £79.9m) a conversion of 85% (2015: 88%).

A core KPI and strategic goal of the Group is Organic revenue growth as this is the most efficient method of growth that measures the underlying health of the business and is a key driver of shareholder value creation. Organic revenue growth eliminates the distorting impact of acquisitions and disposals and that element of growth which is driven by changes in foreign exchange rates. It is an alternative performance measure and is discussed in more detail below.

Adjusted EBITDA is also an alternative performance measure discussed in detail on page X. It is used in the day-to-day management of the Group in order to aid comparisons with peer group companies, manage banking covenants and provide a reference point for assessing the operational cash generation of the Group. It eliminates items arising from portfolio investment and divestment decisions, and from changes to capital structure. Such items arise from events which are non-recurring or intermittent, and while they may generate substantial income statement amounts, do not relate to the ongoing operational performance that underpins long-term value generation.

The Group monitors its operational balance sheet efficiency with reference to operational cash conversion, defined as Free Cash Flow as a percentage of Adjusted EBITDA. The section on alternative performance measures below also defines these terms.

Segmental results

A summary of the operational performance of the Group across the three segments is given in the table below.

*Growth is presented on an Organic, constant currency, basis, which excludes the impact of acquisitions and disposals and movements in foreign exchange rates as further described below.

CONTINUING OPERATIONS

Revenue

Revenues from continuing operations in 2016 grew to £299.6m (2015: £256.6m), an increase of £43.0m. However, direct comparability was affected by the disposal of the MBI business in January 2015, the acquisition of RetailNet Group in June 2015, the establishment of WGSN's 49% joint venture with CTIC whereby revenue of the joint venture is no longer consolidated, the acquisition of One Click Retail in August 2016 and movements in exchange rates between the two years. Adjusting for these factors, Organic growth in revenue from continuing operations was as follows:

Adjusted EBITDA

Adjusted EBITDA from continuing operations increased to £95.9m (2015: £76.6m) an increase of £19.3m on a reported basis and an expansion in Adjusted EBITDA margin of 2.1 percentage points to 32.0%. The reported growth in Adjusted EBITDA was impacted by the same factors described above. On an Organic basis Group Adjusted EBITDA grew by 11.5%, with Exhibitions & Festivals growing at 17.5% and Information Services growing at 4.7%.

Foreign currency translation impact

Following the Group's acquisition of One Click Retail and the growth of Cannes Lions and Money20/20, the Group's reported performance is increasingly sensitive to movements in both the euro and US dollar against pounds sterling. In 2016, Sterling weakened substantially against both the US dollar and euro compared to 2015 as can be seen in the table below:

When comparing 2016 and 2015, changes in currency exchange rates had a favourable impact of £13.7m on Group revenue and £7.7m on Group Adjusted EBITDA. On a segmental basis, the favourable impact of changes in foreign currency exchange rates was as follows:

· Exhibitions & Festivals: £9.9m impact on revenue and £5.7m impact on Adjusted EBITDA.

· Information Services: £3.8m impact on revenue and £2.0m impact on Adjusted EBITDA.

In 2016, on a continuing basis, the Group:

· received approximately 29% of its revenue, incurred 9% of its costs and generated 70% of its Adjusted EBITDA in euros; and

· received approximately 22% of its revenue, incurred 14% of its costs and generated 37% of its Adjusted EBITDA in US dollars.

The Group's external borrowings are denominated 50% in euros with the balance split between US dollars and pounds sterling. Following the Group's recent US acquisitions and planned disposal of the Heritage Brands, in 2017 the Group will review the denomination of the currency of its external borrowings.

Amortisation and impairment

Amortisation of intangible assets acquired through business combinations was £28.8m in 2016 (2015: £26.6m) with the increase of £2.2m due to the acquisition of One Click Retail as well as the impact of the strength of the US Dollar against sterling in respect of the Group's US intangibles. The Group undertakes a periodic review of the carrying value of its intangible assets and as a result of this review there was no impairment recognised in the current or prior year relating to intangible assets acquired through business combinations.

Share-based payments

The charge for share-based payments of £1.4m for Continuing operations (2015: £0.5m) incorporates the Share Incentive Plan, the SAYE and the Performance Share Plan as well as a small charge for the pre-IPO Long Term Incentive Plan ("LTIP").

Exceptional items

The following table sets out the exceptional items incurred by the Group that have been excluded from Adjusted EBITDA. As further explained below, the Group considers that separately identifying such items improves comparability of the financial results.

The acquisition-related contingent employment costs relate primarily to deferred consideration on the acquisition of Money20/20 and of One Click Retail which, absent the link to continued employment, would have been treated as consideration. Under the sale and purchase agreements approximately half the deferred consideration is contingent on both (i) the results of the business in the post-acquisition period and (ii) the continued employment of the founders. In accordance with IFRS, this element of the deferred consideration is treated as an expense recognised over the contractual service periods. In 2016 this expense amounted to £9.7m (2015: £5.5m) and further exceptional expense is expected in 2017-2019 in respect of these two acquisitions.

In addition, an adjustment to deferred consideration of £7.8m arose in respect of the initial recognition of the deferred consideration as capital as a result of the excellent performance of Money20/20 Europe in 2016 which was significantly better than original expectations.

Net finance costs

The Group's net finance expense (net finance cost less net finance income) for the year was £33.8m (2015: £72.7m) with the substantial reduction driven by the reduction in external leverage and borrowing costs and the repayment of shareholder debt on IPO.

The non-recurring costs of the shareholder debt that existed prior to the IPO of £5.3m (2015: £43.9m) and the write off of unamortised loan arrangement fees that occurred on refinancing of £10.7m (2015: £4.3m) have been treated as adjusting items. The adjusted net finance expense after eliminating these non-recurring items was as follows:

The interest expense on the Group's borrowings was £10.1m (2015: £28.3m) with the reduction driven by the repayment of debt as well as the reduced rate of interest payable following the Group's IPO in mid-February 2016.

Taxation

The Group's tax charge on profit from continuing operations was a credit of £13.4m (2015: £11.3m) and was made up of a current tax charge of £4.1m (2015: £0.3m) and a deferred tax credit of £17.5m (2015: £11.6m). This comprised:

· an adjusted tax charge of £10.9m up from £4.6m in the prior year being an effective tax rate of 17% (2015: 13%); and

· a tax credit of £24.3m (2015: £15.9m) on loss on adjusting items of £66.9m (2015: £79.9m), primarily relating to the credit on the unwind of the deferred tax liability relating to acquired intangibles

The effective tax rate of 17% on adjusted profit before tax benefitted from £8.3m (2015: £5.8m) of further recognition of US tax losses as a deferred asset following a later than expected change of control restriction and an increase in the value of the US group at the point of that change of control. Absent this further loss recognition, the effective tax rate on adjusted profit before tax would have been 29%.

Cash tax paid was a small cash outflow of £3.5m (2015: £1.2m) as the Group continued to benefit by £8.7m (2015: £1.7m) from the utilisation of historic tax losses in the UK and US which are expected to benefit the Group's cash flow over the medium term.

The Group has a total deferred tax asset of £54.9m (2015: £40.2m) relating to UK and US losses, accelerated capital allowances and US acquired intangibles and deferred consideration and this is expected to convert into cash savings over the next 15 years. Its deferred tax liability amounted to £30.3m (2015: £40.7m) and related to acquired intangibles.

As described in detail below, the recognition of deferred tax assets on US losses requires considerable judgements to be made including overall future trading performance of the US Group, assessment of future earn-outs payable and valuation of the US Group at the point of change of control. In total a net deferred tax asset of £17.4m (2015: £11.5m) has been recognised in respect of US taxes. It is notable that each 1% change in the US Federal Tax Rate by the US tax authorities would impact the balance sheet and tax charge by £0.7m.

DISCONTINUED OPERATIONS

Revenue from discontinued operations in 2016 was £57.9m (2015: £62.5m) a reduction of £4.6m or 10.2% on an Organic basis. The key driver of the reduction was the performance of the MEED brand where, despite a strong performance from its high value digital subscriptions product MEED Projects, revenue fell by £1.9m mainly attributable to the conferences line of revenue. In addition, print advertising revenue in the UK brands fell by £3.1m.

Adjusted EBITDA was £11.6m down by £2.7m from the £14.3m in the prior year as the business was only able to partially mitigate the £4.6m revenue drop. In discontinued operations, the Group also incurred £1.9m of exceptional costs in preparing the Heritage Brands for sale including vendor diligence, legal fees, separation costs and write off of leasehold improvements. In the prior year, the Group had incurred exceptional costs of £1.7m as a result of the creation of the Plexus operating company from the combination of EMAP, MEED, 4C Group and Planet Retail.

The Adjusted tax charge attributable to discontinued operations was £1.8m (2015: £2.1m) being an adjusted effective tax rate of 18.4% (2015: 16.7%).

Capital structure and the IPO refinancing

On 12 February 2016, in order to achieve an opening leverage ratio of c.2.5x, the Group refinanced its borrowing facilities and entered into new post-IPO term loan facilities of £66m, €171m and $96m as well as a revolving credit facility of £95m. Together with the net proceeds of the IPO of £183m the Group used the new term loan facilities to repay all amounts under the Group's existing senior facilities and to cancel certain related hedging arrangements.

The facilities mature in February 2021, have an initial rate of interest of 2.25% over LIBOR and are subject to a net leverage ratio covenant of 4.5x which is measured at December 2016 and then semi-annually thereafter. The covenant ratio falls to 4.0x in December 2017. Arrangement fees of £5.3m were incurred and will be amortised over the term of the facility.

The Group's strong operating cash flow was partially deployed on the acquisition of One Click Retail, and after accounting for adverse foreign exchange and derivatives movements of £32.6m during the year, the Group's leverage ratio reduced to 2.1x at 31 December 2016 from 2.5x immediately following the IPO and 4.2x at the end of the prior year. The Group's leverage target is 1.5-2.0x to allow a healthy mix of dividends and cash for investment in bolt-on acquisitions.

Acquisitions and disposals

As part of the management of its focused portfolio of products, Ascential regularly assesses opportunities to acquire high-growth products operating in sectors with the potential for scale that may benefit from Ascential's know-how and infrastructure. The Group actively managed its portfolio of product brands in 2016 and 2017 to date.

One Click Retail

In August 2016, the Group acquired 100% of US-based e-commerce analytics provider Oneclickretail.com LLC ("One Click Retail") for initial cash consideration of $44m plus future earn outs expected to total $85m. The future earn outs are based on multiples of adjusted EBITDA of the business for the four years 2016 to 2019 payable in cash or, for certain elements, shares at Ascential's option. A portion of the earn-out payments is also subject to founders remaining in employment with the company. The total aggregate consideration, including initial consideration and earn out payments, is capped at $225m in the event that stretching profit targets are reached, and will be paid over the period to February 2020. The Group incurred £0.9m of professional fees on the acquisition which it recorded as an exceptional cost and the business contributed £3.1m of revenue and £2.2m of Adjusted EBITDA to the Group's 2016 results.

Heritage Brands

As part of its growth strategy to focus its resources and investment on its largest brands and those with the highest growth potential, after the year end, in January 2017 the Group announced that it had separated 13 Heritage Brands into a separate operating entity that is held for sale. Consistent with the evolution of its internal management reporting structure during 2016, the Group has reported the Heritage Brands as a separate segment. As a result of on-going discussions, the Board now considers a sale of the segment to be highly probable and has therefore reclassified it as a discontinued operation. The Heritage Brands generated revenue of £57.9m in 2016 (2015: £62.5m) and £11.6m of Adjusted EBITDA (2015: £14.3m).

Also in January 2017, the Group announced the sale of the first of the Heritage Brands, Health Service Journal to Wilmington plc for a consideration of £19m, payable in cash subject to normal working capital adjustments at completion. In 2016 HSJ generated revenue of £10m and EBITDA of £2.8m.

MediaLink

In February 2017, the Group announced that, subject to customary regulatory approvals, it had agreed to acquire 100% of US-based media advisory and business services provider MediaLink for an initial cash consideration of $69m plus future earnouts expected to total between $42m and $62m payable in cash or, for certain elements, shares at Ascential's option. A portion of the earn-out payments is subject to founders remaining in employment with the company. MediaLink is growing rapidly and delivered unaudited revenue of $54m and adjusted PBT of $14m in 2016, with year-on-year growth of 29% and 24% respectively.

Cash flow

The Group's cash flow statement and net debt position can be summarised as follows:

The Group generated Adjusted operating cash flow of £107.5m (2015: £92.0m) an increase of 17%, due to the strong operational performance of the business.

A major feature of the Group's cash flow in 2016 was the IPO which generated proceeds of £200.0m or £188.5m net of expenses which was used to reduce the Group's indebtedness. Capex was slightly ahead of 2015 at £13.1m (2015: £10.9m) reflecting a fit out of the Group's Paddington offices to accommodate the entire Exhibitions & Festivals business following the combination of the i2i and Lions operating companies under a single leadership.

The Group therefore generated free cash flow of £90.9m (2015: £79.9m) an increase of 14%, which was used to fund interest payments, acquisition costs and exceptional items with the balance reducing net indebtedness.

Earnings per share

Earnings per share has been presented on both a statutory and Proforma basis. The Proforma basis is based on the 400.0m shares in issue upon IPO (as opposed than those in issue at part way through the IPO restructuring) and is therefore more relevant to ongoing shareholders of the Group.

Adjusted diluted Proforma EPS of 15.5 pence per share is 48% ahead of the 10.5 pence per share recorded for 2015 and total diluted Proforma EPS of 3.9 pence per share is substantially ahead of the prior year loss per share of 6.3 pence.

Capital reduction

Ascential plc was incorporated in January 2016 and acquired the Group's business operations in February 2016. As part of the IPO restructuring, the Company completed a reduction of its share capital, whereby:

(i) the entire amount standing to the credit of the Company's share premium account was cancelled;

(ii) 876m deferred shares (which were issued by way of a bonus issue for the purpose of capitalising the Company's capital reserve) were cancelled; and

(iii) the nominal value of each issued ordinary share in the capital of the Company was reduced from £0.10 to £0.01 each (the "Capital Reduction").

Following the Capital Reduction, as at 8 June 2016, the issued share capital of the Company consists of 400,542,500 ordinary shares of £0.01 each. The distributable reserves created by the Capital Reduction amount to £476.2m.

Dividends

Ascential plc was incorporated in January 2016 and, as indicated at the time of the IPO, the Board targets a dividend pay-out ratio of 30% of adjusted profit after tax. Consequently, the Board is recommending a final dividend of 3.2p per share to holders on the register on 19 May 2017 which, together with the Company's maiden interim dividend of 1.5p paid in November 2016, makes a total dividend for the 2016 financial year of 4.7p.

Segmental review: Exhibitions & Festivals

The Exhibitions & Festivals segment comprises large-scale exhibitions, congresses and festivals that bring communities together to connect and trade; to be inspired, to learn and to celebrate. In 2016, the Exhibitions & Festivals segment delivered revenues of £180.0m, (2015: £150.4m), up 19.7% or 12.3% on an Organic basis driven by the launch of Money20/20 Europe and continuing strong performance from Cannes Lions.

The division continued to invest in its key products, ensuring that content at each event is relevant and valuable to its customers and the quality of visitors remains high. The division also continued to benefit from initiatives introduced in prior years, including on-site rebooking for the following year's event and location-based exhibition stand pricing.

Ascential's events are broadly divided into three product types:

1. Those of significant scale, which define the markets they serve and deliver multiple streams of revenue. At these high-growth events, which include Cannes Lions and Money20/20, content for the audience is critical and requires constant innovation and investment.

2. Global, market-leading, exhibition brands - such as CWIEME and Bett, which have both delivered several successful new editions in additional geographies over recent years. Content is becoming increasingly important at these events, and great care is taken to improve all elements of the shows to ensure the events remain valued and relevant to both visitors and exhibitors.

3. UK-based exhibition brands, with loyal followings with many exhibitors returning year after year. This segment includes Spring and Autumn Fair, the UK's largest trade fair. All products in this segment deliver large audiences and are trusted barometers of the industries they serve. All would be difficult to geo-clone internationally, but offer strong cash flow and a large repeat business.

The top five events of this segment are Cannes Lions, Money20/20, Spring/Autumn Fair, Bett and CWIEME. These products contributed 83% of the segment's revenue.

Cannes Lions

Cannes Lions serves the branded communications industry and is the largest creative community for networking, inspiration, learning and celebration. Each year, more agencies, media owners and clients attend the week-long Cannes Lions Festival of International Creativity as the centrepiece of a year-round campaign for creativity. In 2016, Cannes again received a record number of award entries, up 8% over 2015 to more than 43,000 and grew paying delegates by 5% to more than 10,000. Overall, revenues for Cannes Lions increased to £55.5m in 2016 (2015: £42.5m), up 18% on an Organic basis.

Cannes Lions has taken steps to strengthen brand advocacy by both improving customer experience across both live and digital touch-points, and by putting creativity first:

· A key aim for 2016 was to improve the customer experience with the launch of online accommodation booking, a new VIP welcome experience, dramatically reduced waiting time for badge collection, improved event signposting and content navigation. The improvements made resulted in a net improvement of overall event NPS of 4% points to 47%.

· An ambitious content-led campaign, "Thank you Creativity", was developed by the Cannes Lions in-house team which delivered 55,500 sessions on its own microsite, 291,000 video views and 6.8m media impressions.

As a result of these and other initiatives, delegate engagement grew significantly. More than 16,000 people attended 23 Official Fringe events, while the official app was downloaded 12,500 times and there were 762,000 swipes on the new networking app.

To maintain its relevance in its core sectors, and deepen the Festival's appeal to new and associated industries, the Lions - the awards presented at the Festival - and the format of the event itself are under constant review. As a result, Cannes Lions has launched adjacent festivals events, all of which have performed well.

· Lions Health was launched in 2014, meeting the unique needs of the healthcare industry. In its third year, Lions Health grew 77% to deliver revenue of £2.5m. It received over 2,000 entries for the Pharma and Health & Wellness Lions, an increase of 40% compared to the previous year.

· Now in its second year, Lions Innovation grew 19% to deliver revenues of £1.8m, attracted more than 1,000 entries to the Creative Data and Innovation Lions, up 30% versus 2015.

· 2016 saw the launch of Cannes Lions' third adjacent festival in as many years, which delivered first year revenues of £1.4m. Lions Entertainment brought together creative power-players from the music, film, gaming, sports and television industries. Across two days delegates enjoyed live content on four stages. From more than 600 entries, the inaugural Grand Prix in the new Entertainment Lions for Music went to the music video of "Formation" by Beyoncé, made by Prettybird Culver City.

These events underpin the strategy of Cannes Lions, as it seeks to expand its customer base across the full spectrum of the branded communications industry, and retain its long-standing reputation as the barometer of excellence in creativity.

Money20/20

Money20/20, the world's leading FinTech event, is well positioned in a strong market. It delivered revenues of £34.7m in 2016 (2015: £18.7m), up 60% over a year earlier. Founded five years ago, Money20/20 has grown very strongly and the volume of paying delegates now stands at more than 13,000. Over the same period, volume of exhibitors rose from 77 in 2012 to 562 in 2016. 

In its third year of Ascential ownership, Money20/20 welcomed more than 10,700 attendees (2015: 10,400) at the most recent US edition, held in Las Vegas in October 2016. The event also continued to attract increasing numbers of CEOs and C-suite executives, with more than 1,700 attending. In total, more than 3,100 companies were represented, from 85 countries around the world. The event ran four distinct content streams and welcomed over 500 speakers including Jack Dorsey of Twitter and Square and Douglas Feagin of Ant Financial Group, the financial services arm of Alibaba.

Following discussions with customers, April 2016 saw the launch of Money20/20 Europe, created to specifically address the unique needs and challenge of the European markets. In its first year, the event welcomed 3,700 attendees, 420 industry-leading speakers, 200 sponsors, 100 media partners and C-level executives from 75 countries. This was a significant 2015 investment, and delivered revenues of £7.8m. It was Ascential's biggest launch to date and a superb example of getting a launch right.

Following the success of Money20/20 Europe, we further assessed the global FinTech market and announced the launch of Money20/20 Asia to be held in March 2018 in Singapore. This will provide the platform for pan-Asian and global companies to join forces and explore the unique opportunities fuelling the growth of the Asia Pacific payments landscape.

Spring and Autumn Fair

Spring Fair is the UK's largest trade exhibition and is amongst Europe's biggest home and gift events. Together with its Autumn edition, it is the gateway to UK retailing and attracts around 60,000 UK and international visitors from independent and major multiple retailers to e-commerce specialists and department stores. The show covers 13 key buying sections which are regularly evolved in line with the evolution of UK retail generally. Locations of each section are also reviewed to ensure each one is working to best effect for those attending the event and to allocate the most space to those sections with the highest demand.

All revenue at Spring and Autumn Fairs is derived from exhibitors as the events are free to attend for visitors. 2016 revenues were £34.3m up 3% (2015 £33.1m). On-site rebooking, enabling customers to secure their stand location a year ahead, continues to be a major focus. In 2016, Spring and Autumn Fairs achieved contracted bookings of over 70% of stand revenue within three months of the previous year's event. This feature gives good forward visibility and enables the sales team to focus on customer service and new business sales.

Location based pricing (differentiating stand price based on position in the hall and stand design) improved yield overall by 5%. It is important to deliver return on investment for exhibitors and visitors alike and operational excellence - driving retention through relevance and value - remains the overall focus at the event.

Bett

Bett is the leading educational technology series of global events and leadership summits. Bett brings together people, ideas, practices and technologies so that educators and learners can fulfil their potential. Across the global series, Bett welcomed almost 50,000 visitors from 139 countries in 2016, including 80 Ministries of Education. It delivered revenues of £15.7m, up 9% on the prior year (despite challenging economic conditions for its Brazilian edition) and deepened its strategic partnerships with both Microsoft and TES.

Since 2012, Bett has expanded beyond the UK and now has a presence in five key geographies - Brazil, Mexico, Middle East, Malaysia and the UK. The main edition is held in London each January and attracts leading industry speakers, educationalists, major sponsorship partners, education bodies and Government Ministers who have chosen this platform to announce changes to Government education policy. In 2016 Bett held its inaugural event in the Middle East in Abu Dhabi and successfully rolled out value based pricing in London across four pricing zones aligned to stand location.

CWIEME

CWIEME serves the automotive, consumer electronics and power generation sectors. In 2016, CWIEME delivered revenues of £8.8m (2015: £8.9m) up 2% in local currency.

Berlin is the main CWIEME event connecting engineers with suppliers for electric motors and transformers. The event has also several regional editions: Istanbul in Europe; Chicago in the US and Shanghai, China. As Berlin continues to mature, CWIEME works closely with its customers worldwide to ensure all the shows remain relevant, with appropriate content at all events. This enables it to continually improve its proposition thereby driving retention. CWIEME is also evolving regional and trade partnerships, particularly in the US and China.

Other Exhibitions & Festivals product performance

Beyond the top five products in this segment, revenues at our smaller products declined by 9% to £31.0m (2015: £32.8m). The main element of the £1.8m decline was a £2.2m decline in revenues from the service we supply to UK Trade and Investment following delays stemming from a departmental restructuring.

The other brands or products within the Exhibitions & Festivals segment are:

· Pure (trend-inspired fashion trade shows)

· Lions Regionals (Eurobest, Lynx, Spikes and Tanagrams)

· RWM (resource efficiency trade show)

· World Retail Congress (global retail congress held in Dubai)

· Glee (garden and outdoor living trade show)

· UKTI (exporter introduction services)

· Broadcast Video Expo (broadcast and video trade show)

· Naidex (disability aids trade show - sold in July 2016)

Industry awards

To be acknowledged by our peers is a great source of pride and industry awards are always hard-fought. At the recent AEO Excellence Awards we were delighted that Money20/20 won in three categories: the Innovation Award, Best Marketing Campaign and, for the second year in a row, Best Tradeshow Exhibition Overseas. At the Conference Awards in July, Bett topped the podium in the Best Conference Series category, and Money20/20 took the Best Marketing Award and Overseas Conference of the Year Award. At the Exhibition News Awards, CWIEME Istanbul was recognised as the best brand expansion and Giovanni Musio was awarded the Best Organiser Marketer Award.

Looking ahead

Over recent years, the Exhibitions and Festivals segment has created a fast-growing business with market-leading, international products. It aims to deliver market-defining customer engagement and harness technology to further improve digital experiences around the events. This shift will deliver year round access to the event and its content, by bringing the digital space closer to the physical attendee experience. In 2017 Ascential's Exhibitions and Festivals division aims to offer more customer-focused, data-led products that bring the membership communities of each event together year round.

Segmental review: Information Services

Ascential's Information Services segment provides high-quality, industry-specific business intelligence and forecasting with high customer engagement and retention. The division delivered revenues of £119.6m in 2016 (2015 £106.2m), up 12.6% or 5.4% on an Organic basis.

Brands within Information Services are WGSN, Groundsure, Glenigan, DeHavilland, Planet Retail/RetailNet Group and Retail Week. Following its acquisition in August 2016, we also welcomed One Click Retail to the Information Services segment.

All products within the Information Services' division serve customers with must-have information through multiple digital formats. They are targeted to specific job roles and often embedded in customer workflows making them more difficult to disrupt. Expert content teams on each brand craft and curate answers to important questions to help customers make smarter business decisions and succeed.

75% of Information Services revenues are derived from subscriptions, with transactional revenues contributing 13%. The balance of revenues relate to advisory services (5%), conferences and awards (5%) and digital and other marketing solutions (2%). We have continued to migrate towards a digital-only business and, following the discontinuance of the Heritage Brands, print advertising revenue now represents less than 1% of Group revenue.

Dynamics of digital products

Our digital products have the following characteristics:

· Answers or insights we provide are important to our customers' decisions

· Unique or critical insights that are hard to replicate. Built on strong historical information assets that, in the main, cannot be easily recreated

· Continuously leverage these unique assets to create new valuable information products

· Track record of delivery of accurate projections or insights

· Industry-leading customer retention is underpinned by their trust and confidence

Multiple levers of growth

Within Information Services the Group uses multiple levers to drive its future growth:

· Expansion into adjacent markets

· Geographic expansion

· New Product development

· Expansion across the functional areas of the customer

WGSN

WGSN is the clear global leader for market intelligence, insight and trend forecasts to the fashion industry and design-led companies around the world. It is Ascential's largest product, representing 22% of the business. It delivered revenues of £67.4m in 2016 (2015: £60.5m), up 6% on an Organic basis.

WGSN serves more than 6,000 customer organisations and enjoys a customer value retention rate of 92%. Many years ahead of a WGSN global trend forecast launch, WGSN filters global influences through its experts to determine trend direction. Insights are supplemented by big data analytics and WGSN produces reports in six languages, as well as an extensive images library.

Its strategy is to deliver multiple products to help designers, buyers, merchandisers and marketers plan as well as trade their product lines more effectively.

In April 2016, WGSN launched its new single subscription platform, which unites all its services onto one platform. Customers can now access all WGSN products with a single sign on. This is the first time customers have been able to seamlessly navigate all products and instantly get access to fashion; lifestyle design; consultancy and other WGSN products. This visibility has helped deliver an increase in average product holding from 1.13 in 2015 to 1.19 in 2016.

Also in April 2016, the first of WGSN's joint ventures with CTIC started trading which marked a major milestone towards growing and developing the Chinese market for WGSN's products.

In today's fast fashion marketplace, it is vital for retailers to understand trend adoption and offer the right product, at the right time, at the right price. Businesses cannot rely on intuition alone. To meet this need and mitigate pressure on margins, WGSN launched Instock in 2013 and today there are more than 200 retailers tracked in Instock every day. In October 2016, WGSN launched WGSN Insight, offering customers deeper insight into fast changing consumer behaviours to enable them to discover the future consumer with the best in class consumer, marketing and retail insights customers.

Groundsure

Groundsure, a transactional business, is a market-leading provider of environmental risk data. It addresses the needs of conveyancers, architects, engineers and other participants in the UK residential and commercial property industry. Groundsure assesses risk related to flood, contaminated land, ground stability, planning and other environmental matters.

Mainly operating through resellers, the business delivered £15.3m in 2016 (2015: £14.2m), up 8% year on year. Revenue was up 14% in the first half and up 3% in the second half performing somewhat better than the overall market in which residential transactions in England and Wales in the first half grew by 11% and declined by 8% in the second half driven in part by changes to the stamp duty regulations.

One Click Retail

Ascential regularly assesses opportunities to acquire high-growth products operating in sectors with the potential for scale that may benefit from its know-how and infrastructure. Information services to the e-commerce industry was identified as an attractive part of the retail vertical and as a result, Ascential acquired One Click Retail, a leading e-commerce data analytics service provider, to help accelerate it globally through, for example, cross-selling their products to existing clients of Ascential.

One Click Retail's customers include Procter & Gamble, HP, Unilever, Hamilton Beach, Nestle and Panasonic. Revenue is generated predominantly through recurring annual subscriptions to the company's Dashboard product which provides insights to help customers drive sales through e-commerce, including Amazon and Walmart, the two largest on line retailers in the world.

One Click Retail grew revenues to £7.4m in 2016 a growth of 103% with a 142% customer value retention rate. £3.1m of this revenue was delivered in the four months following its acquisition. As a high-growth, globally scalable subscription information service product, One Click Retail fits with Ascential's strategy of owning scalable, global, market-leading products with synergy potential with existing brands.

Other Information Services products

Planet Retail helps consumer goods companies identify and execute sales and new market opportunities with retailers utilising its global retailer distribution model. The business also provides a leading executive education programme and successful advisory service.

Retail Week was established in 1988 and has more than 8,000 subscribers. With an attractive revenue mix, Retail Week is transitioning to a corporate subscriptions model, with more than 40% of subscribers now on a corporate subscription. Retail Week Prospect, launched in 2015 is the brand's high-value data product extension.

Glenigan helps clients identify and win construction contracts and leads. During the year, it has continued its migration to a single interface, with enhanced search functionality, deliverable across all media devices. Glenigan grew its revenues in 2016 by 11%. Finally DeHavilland, our online political intelligence service grew revenues by 10% in 2016.

Industry awards

Many of our talented individuals and leading information services brands were award winners in 2016. Retail Week, (the PPA's "Business Media Brand of the Year") which sits at the very heart of the UK retail industry, and its MD Chris Brook-Carter were rewarded by the UK Government Equalities Office (Women's Business Council's "Men as Agents of Change") and Victoria Hart, Retail Week's Head of Operations - Conferences & Bespoke Events was also recognised (PPA's Connect Awards "Events Leader of the Year").

Also acknowledged last year were WGSN (the "Stackmaster Marketo Award" winner, which recognises the power of marketing technology and its use in enhancing marketing effectiveness), Glenigan (the PPA's "Digital Innovation of the Year" - the award that was won by HSJ Intelligence in 2015) and Nursing Times, (PPA's "Business Editor of the Year" for Jenni Middleton and British Media Award's "Website of the Year"). The digital success of Nursing Times, Glenigan and Retail Week led to Plexus being named as PPA's Digital Publisher of the Year (Business Media).

Cautionary statement

Certain statements in this announcement constitute, or may be deemed to constitute, forward looking statements (including beliefs or opinions). Any statement in this announcement that is not a statement of historical fact including, without limitation those regarding the Group's future expectations, operations, financial performance, financial condition and business is a forward looking statement. Such forward looking statements are subject to risks and uncertainties that may cause actual results to differ materially. These risks and uncertainties include, among other factors, changing economic, financial, business or other market conditions. These and other factors could adversely affect the outcome and financial effects of the plans and events described in this announcement. As a result you are cautioned not to place reliance on such forward looking statements. Except as is required by the Listing Rules, Disclosure and Transparency Rules and applicable laws, no undertaking is given to update the forward-looking statements contained in this announcement, whether as a result of new information, future events or otherwise.

Nothing in this announcement should be construed as a profit forecast. This announcement has been prepared for the Group as a whole and therefore gives greater emphasis to those matters which are significant to Ascential plc and its subsidiary undertakings when viewed as a whole.

Alternative Performance Measures

The Group aims to maximise shareholder value by optimising potential for return on capital through strategic portfolio investment and divestment, by ensuring the Group's capital structure is managed to support both strategic and operational requirements, and by delivering returns through a focus on organic growth and operational discipline. The Board considers that it is helpful to provide, where practicable, performance measures that distinguish between these different factors - these are also the measures that the Board uses to assess the performance of the Group. Accordingly, the annual report presents the following non-GAAP measures alongside standard accounting terms as prescribed by IFRS and the Companies Act, in order to provide this useful additional information.

Adjusted Profit Measures

The Group uses Adjusted profit measures to assist readers in understanding underlying operational performance. These measures exclude income statement items arising from portfolio investment and divestment decisions, and from changes to capital structure. Such items arise from events which are non-recurring or intermittent, and while they may generate substantial income statement amounts, do not relates to the ongoing operational performance that underpins long-term value generation. The income statement items that are excluded from Adjusted profit measures are referred to as Adjusting items.

Both Adjusted profit measures and Adjusting items are presented together with statutory measures on the face of the income statement. In addition, the Group presents a non-GAAP profit measure, Adjusted EBITDA, in order to aid comparisons with peer group companies and provide a reference point for assessing the operational cash generation of the Group. Adjusted EBITDA is defined as Adjusted Operating Profit before depreciation. The Group measures operational profit margins with reference to Adjusted EBITDA.

Adjusting items are not a defined term under IFRS, so may not be comparable to similar terminology used in other financial statements. Details of the charges and credits presented as Adjusting items are set out in note 7 to the financial statements.

The basis for treating these items as Adjusting is as follows:

Exceptional items

Exceptional items are recorded in accordance with the Group's policy set out in note 1 to the financial statements. They arise from both portfolio investment and divestment decisions, and from changes to the Group's capital structure, and so do not reflect current operational performance.

Amortisation of intangible assets acquired through business combinations

Charges for amortisation of acquired intangibles arise from the purchase consideration of a number separate acquisitions. These acquisitions are portfolio investment decisions that took place at different times over several years, and so the associated amortisation does not reflect current operational performance.

Share based payments

As a result of the IPO a number of employee share schemes have been introduced, as set out in note 10 to the financial statements. As a result, there is a lack of comparability between periods in respect of share scheme costs. As this arises from a change triggered by the IPO change in capital structure, these costs have been treated as Adjusting items.

Gain on disposal

Gains on disposal of businesses arise from divestment decisions that are part of strategic portfolio management, and do not reflect current operational performance.

Finance costs

Certain elements of finance costs incurred as a result of debt refinancing and are therefore a result of changes to the Group's capital structure. In addition, as part of the IPO Shareholder debt was converted to equity, and as a result there is a lack of comparability between periods in respect of the interest previously incurred on this Shareholder debt. As this arises from a change triggered by the IPO change in capital structure, these costs have been treated as Adjusting items.

Tax related to adjusting items

The elements of the overall group tax charge relating to the above Adjusting items are also treated as Adjusting. These elements of the tax charge are calculated with reference to the specific tax treatment of each individual Adjusting item, taking into account its tax deductibility, the tax jurisdiction concerned, and any previously recognised tax assets or liabilities.

Adjusted Cash Flow Measures

The Group uses Adjusted cash flow measures for the same purpose as Adjusted profit measures, in order to assist readers of the accounts in understanding the ongoing operational performance of the group. The two measures used are Adjusted Cash Generated from Operations, and Free Cash Flow. These are reconciled to IFRS measures as follows:

The Group monitors its operational balance sheet efficiency with reference to operational cash conversion, defined as Free Cash Flow as a percentage of Adjusted EBITDA.

Organic Growth Measures

In order to assess whether the Group is achieving its strategic goal of driving organic growth it is helpful to compare like-for-like operational results between periods. Reported income statement measures, both Adjusted and statutory, can be significantly affected by the following factors which mask like-for-like comparability.

· Acquisitions and disposals of businesses lead to a lack of comparability between periods due to consolidation of only part of a year's results for these businesses.

· Changes in exchange rates used to record the results of non-sterling businesses results in a lack of comparability between periods as equivalent local currency amounts are recorded at different sterling amounts in different periods

· Event timing differences between periods. The Group has no significant biennial events, but when annual events are held at different times of year this can affect the comparability of half-year results

The Group therefore defines Organic growth measures, which are calculated with the following adjustments:

· Results of acquired and disposed businesses are excluded where the Group results include only part-year results in either current or prior periods

· Prior year consolidated results are restated at current year exchange rates for non-sterling businesses

· Prior year results are adjusted such that comparative results of events that have been held at different times of year are included in the same period as the current year results

Organic growth is calculated as follows:

Proforma EPS

Changes to the Group's capital structure affecting the number of shares in issue will affect the comparability of earnings per share between periods. In order to present a consistent measure of earnings between periods, the Group presents Proforma measures of EPS in which major changes to the number of shares in issue are presented as if they had occurred on the first day of the comparative period. In presenting the 2016 financial statements, the IPO which completed on 12 February 2016 is treated as such a major change, and so accordingly Proforma EPS is calculated using a weighted average number of shares as if the IPO had occurred at the beginning of the 2015 financial year. Details are set out in note 14 of the financial statements.

Glossary of Alternative Performance Measures

Consolidated Statement of Profit and Loss

For the year ended 31 December

Consolidated Statement of Other Comprehensive Income

For the year ended 31 December

Consolidated Statement of Financial Position

As at 31 December

Consolidated Statement of Changes in Equity

For the year ended 31 December

(i) Share capital and merger reserve at 1 January 2015 and 31 December 2015 reflect the statutory share capital and merger reserve of Ascential plc on 8 February 2016, when a restructure of the Group took place. Refer to Note 14 for further details.

(ii) The £0.2 million issue of shares relates to shares issued under management incentive plans in the year ended 31 December 2015.

(iii) The restructure of the Group between 8 and 12 February 2016 resulted in the Company issuing 300,000,000 ordinary £0.10 shares to become the ultimate parent of the Group, and to convert existing shareholder debt to equity. This resulted in the recognition of £252.9 million in share premium, £8.8 million in the capital reserve and £157.9 million in a group restructure reserve. Refer to Note 14 for further details.

(iv) At IPO 100,000,000 additional ordinary £0.10 shares were allotted and issued at a price of £2.00 per share, representing a premium of £1.90 per share. £11.6 million of share issue costs were incurred. The premium was recorded in the Company's share premium account.

(v) On 8 March 2016, 542,500 ordinary £0.10 shares were issued to employees under the Share Incentive Plan ("SIP").

(vi) On 8 June 2016, the Company completed a reduction of its share capital, whereby its nominal share capital was reduced to approximately £4.0 million, the amount standing to the share premium account was cancelled, and 876,266,690 deferred shares of £0.01 each which were issued by way of a bonus issue on 7 June 2016 for the purpose of capitalising the Company's capital reserve were cancelled. These steps resulted in distributable reserves of approximately £476.2 million. Refer to Note 14 for further details.

Consolidated Statement of Cash Flows

For the year ended 31 December

1. Operating Segments

The Group has three reportable segments under IFRS 8 Operating Segments. In addition, there is a Group corporate function providing central services including finance, management and IT services to the Group's reportable segments. The reportable segments offer different products and services, and are managed separately because they require different capabilities, technology and marketing strategies. For each of the reportable segments, the Board (the chief operating decision maker) reviews internal management reports on a monthly basis. The following summary describes the operations in each of the Group's reportable segments:

· Exhibitions & Festivals: organiser of market-leading exhibitions, congresses and festivals.

· Information Services: produces intelligence, analysis and forecasting tools, subscription content including real-time online resources, live events and awards, across a number of industry sectors including fashion, retail, property, construction and politics.

· Discontinued operation: The disposal group of 13 "Heritage Brands" previously formed part of the Information Services segment before it was separately classified as held for sale and a discontinued operation. Given the different growth trajectories and risks of the Heritage Brands and the change in internal management reporting presented to the Board, the disposal group is separated into a third reportable segment. Refer to Note 2 for further details on the discontinued operation.

Information regarding the results of each reportable segment is included below. Reportable segment profits are measured at an adjusted operating profit level, representing reportable segment Adjusted EBITDA, less depreciation costs and amortisation in respect of software intangibles, without allocation of central Group costs. This is the measure included in the internal management reports that are reviewed by the Board. Reportable segment Adjusted EBITDA and reportable segment Adjusted operating profit are used to measure performance as management believes that such information is the most relevant in evaluating the results of certain reportable segments relative to other comparable entities. Total assets and liabilities for each reportable segment are not disclosed because they are not provided to the Board on a regular basis. Total assets and liabilities are internally reviewed on a Group basis.

Year ended 31 December 2016

Year ended 31 December 2015

Exceptional items of £22.6 million (2015: £11.1 million) include £10.4 million, £6.1 million, £1.9 million (2015: £5.7 million, £1.1 million and £1.7 million) which are attributable to Exhibitions & Festivals, Information Services and discontinued operation respectively.

Finance costs and finance income are not allocated to segments, as these types of activity are driven by the Group corporate function.

An analysis of the Group's non-current assets (excluding deferred tax, financial instruments and assets classified as held for sale) by geographical location is as follows:

2. Discontinued Operation and Disposal Group Held for Sale

During 2016, the Board committed to a plan to sell 13 Heritage Brands within the Information Services reportable segment. The Heritage Brands are Health Services Journal, MEED, Drapers, Nursing Times, Local Government Chronicle, Construction News, New Civil Engineer, Ground Engineering, H&V News and RAC, Retail Jeweller, Materials Recycling World and the architecture titles including Architects' Journal, The Architectural Review and the associated World Architecture Festival. Each provides content to subscribers and industries across three platforms - digital, events and print.

The 13 Heritage Brands were not previously classified as held for sale or as a discontinued operation. The comparative consolidated statement of profit and loss has been restated to show the discontinued operation separately from continuing operations.

Results of discontinued operation