Euromoney Institutional Investor PLC

1
Euromoney Institutional Investor PLC

• Analyst and Investor Seminar
• January 31, 2008

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Group Overview

• Colin Jones,
• Finance Director

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Trading Update / IMS

• Q1 revenue growth in line with board expectations
• Continued strong growth in subscription products
  and delegate revenues
• Some signs of slowdown in advertising and
  sponsorship from global financial institutions
  esp in credit and structured products
• Emerging markets remain in good shape
• Current trading remains in line with board
  expectations and Q2 visibility consistent with
  2007
• Net debt reduced by 13m to 192m since year end
• 2.5m new shares to be issued mid February under
  CAP incentive

4
Strategy is working.

• Maintain operating margin
• Continued focus on high margin product and tight
  cost control
• High operational gearing but low fixed cost base
• Drive organic growth
• Opportunities for geographic and product
  expansion esp. emerging markets
• Emphasis on high growth subscription products
• Investment in electronic info services
• More of the same (bigger better) remains key
  growth driver
• Acquisitions
• Focus on bolt-on acquisitions esp. in data and
  electronic publishing
• Readily financed from strong operating cash flows
• Success of strategy reflected in record 2007
  results
• Group more focused, more robust and higher
  quality than 2001 better downside protection

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More diverse business
m
Operating profit before unallocated costs
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with higher margins
Operating margin
7
a better revenue mix
2001
Other
2007
12
Advertising
Other
Delegates
Advertising
5
37
24
Delegates
22
24
6
Sponsorship
21
34
15
Sponsorship
Subscriptions
Subscriptions
Significant growth in revenues from subscriptions
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a broad geographic spread
2007
UK
16
Rest of World
37
47
North America
Revenues by destination
9
... and higher quality earnings
EM/II brands account for only 35 of profit (2001
65)
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Three hidden gems
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• Diane Alfano
• Managing Director
• Institutional Investor Memberships

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What is a membership?

• Institutional Investor Memberships are private
  peer-group networks for senior executives at
  leading asset and alternative asset management
  firms in the US and Europe who come together at
  roundtables to discuss critical issues.

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II Memberships

• First membership launched in 1970
• Currently serve 12 distinct executive roles 881
  memberships
• Exclusive and Invitation Only we serve the
  largest investment managers
• 88 of the worlds largest asset management firms
  have a membership
• Members are drawn from 21 countries
• Members are Peers / Competitors Buy Side Only
• Average annual Subscription Fee of 25,000
• Director retains editorial control of content.
  Content is not sponsored. Editorial objectivity
  and impartiality are its hallmark
• Focus on client service

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Financials
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Key Characteristics of Memberships

• High level face-to-face interaction cant be
  replicated by the web
• High barriers to entry/strong defensible niches
  against competition
• Proven resilience to economic downturns
• Predictable and stable revenue stream and cash
  flow
• - Subscription-based model
• - High renewal rates- in excess of 88 for the
  last three years
• - Not advertising dependent
• Fees pre-paid annually / pricing power / pricing
  leader
• High operating margins average 40
• Brand loyalty

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II Memberships - diversified with changing
markets

• LAUNCHED MEMBERS
• Institutional Investor Institute (Heads of
  marketing) 1970 111
• TraderForum (Heads of Trading) 1984 167
• European Institute (C-Suite Executives)
  1988 92
• Fixed Income Forum (Heads of Fixed Income)
  1993 51
• Financial Technology Forum (Chief Technology
  Officers) 1995 104
• Investment Funds Institute (Heads of Retail)
  1995 43
• European TraderForum (Heads of Trading)
  1999 24
• US Institute (C-Suite Executives) 2000
  90
• Global Fixed Income Institute (Heads Of Global
  Fixed Income) 2000 43

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Bespoke Membership Benefits

• Research and surveys
• Website Interactive password-protected.
  Facilitates knowledge sharing member Q As
• Exclusive access to topical ad-hoc meetings
• Intimate regional member breakfasts, lunches and
  dinner meetings
• Post-event access to summaries and presentations
• Discounted access to ultra high paid ticket
  events e.g. Sovereign Wealth Funds Roundtables

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Clients and Market

• Money management firms
• Hedge funds
• Banks and insurance companies
• Corporate in house pension funds
• Sovereign funds
• Geographical split of members 2007
• 71 US
• 29 European

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Growth Strategy

• New membership launches
• COO Hedge Fund Forum 2008
• Private Wealth Institute 2009
• Sovereign Wealth Funds 2009
• Scalable model
• Replicating US memberships in Europe and Asia
• Replicating memberships for new client base
  hedge funds
• Creating new ultra-high paid ticket meetings for
  members such as Asian and Latin American
  Sovereign Funds
• Enhance pricing power through Web based research
• Potential to sell additional products based on
  depth of relationship with member firms

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Business strengths

• Subscription based business model
• Diversified group of members/decision makers
  within the same company that control separate
  budget pools mitigating risk
• 40 year track record of established demand for
  exclusive, high level forums
• Member growth over the last six months
• July 06 to Dec 06 renewal rate was 89.6 with
  71 new members
• July 07 to Dec 07 Membership renewal rate was
  90.1 added 101 new members

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QA
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• Gary Mueller
• Chairman, ISI

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Mission Statement

• To be the recognized leading provider of emerging
  market economic, company and industry data and
  information

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Internet Securities Inc (ISI Emerging Markets)

• Founded in 1994 acquired by Euromoney in 1999
• Delivers hard-to-get information on more than 80
  Emerging Market countries through its
  award-winning online Emerging Markets Information
  Service, and several other products
• Acquired CEIC Data Company Ltd (CEIC) in March
  2005, the instrument of choice for economic
  research on Asia and the Emerging Markets by
  Economists around the globe
• 480 People
• 30 offices globally

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Financials
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Products

• EMIS - Emerging Markets Information Service
• CEIC Asia Databases
• IFIS - Islamic Finance Information Service
• IntelliNews
• iSearch
• A complementary range of subscription products

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Revenues by Sector
FY 2001
Consultants
FY 2007
Corporates
Consultants
Financial Institutions
Others
Financial Institutions
Government
Corporates
Academics
Others
Government
Academics
28
Revenues by Geography
FY 2001
FY 2007
UK/ Western Europe
Latam
Latam
UK/ Western Europe
North America
North America
CEE
CEE
Asia
Asia
Successfully capitalising on demand from emerging
markets
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New Product Initiatives

• CEIC Expansion Countries added 43 new non-Asia
  countries, service now covers 64 countries
• Developed and launched CEIC Data Management
  platform (CDM), enabling global Internet access
  to the service.
• DealWatch Comprehensive data and forward looking
  editorial coverage of Emerging Markets MA and
  ECM activity.
• Compliance Accurate information on key persons
  and companies critical to the Financial industry
  for customer verification and customer due
  diligence. Derogatory news from the EMIS database
  is included.
• Anticipating changing client needs

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ISI Growth Strategy

• Market conditions
• Emerging markets growth set to continue
• Drive the Current Businesses
• Grow existing customers and revenue streams
• Upgrade existing products
• Sector penetration
• Seek New Revenues
• Add new geographies
• Develop new products
• Bolt-on acquisitions

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Business strengths

• Subscription-based model
• High renewal rate
• Business has grown every quarter
• Business is diversified across geographies and
  sectors (financial services only 42)
• Established local sales force globally in 2002
  sales force was 29 people, now 52 people (80 in
  Emerging Markets)
• Diverse customer base

32

• QA

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• Bashar Al-Rehany
• Chief Executive Officer
• BCA Research

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Vision

• The leading independent provider of top-down,
• macro economic investment research to financial
  institutions, corporations, governments and
  individuals globally

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Overview

• Founded in 1949 with The Bank Credit Analyst
• Independent provider of global investment
  research
• Coverage of all major asset classes and regions
• Client accounts range significantly in spend
• Current average account size increased 4 fold in
  5 years
• 123 staff located in Montreal, London, New York,
  Hong Kong, San Francisco, Buenos Aires

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Financials
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Research Philosophy

• Define big picture (macro) environment and key
  themes
• Connect the dots - countries and asset classes
• Key Ingredients
• Fundamentals
• Technicals
• Models
• Judgement and intuition
• Complementary objectives
• Thoughtful and leading edge research
• Timely and accurate market calls

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Product Philosophy
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Products

• Investment Strategy
• Global Investment Strategy
• U.S. Investment Strategy
• European Investment Strategy
• Emerging Markets Strategy
• China Investment Strategy
• The Bank Credit Analyst - Monthly
• Daily Insights
• Market Analysis
• U.S. Equity Sector Strategy
• Global Fixed Income Strategy
• Foreign Exchange Strategy
• U.S. Bond Strategy
• Commodity and Energy Strategy

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Key Performance Indicators
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Business Development Philosophy

• Accelerated Sales Development
• Aggressive business development strategy
• Established geographic expertise
• Successful account managed model
• Global sales presence with 50 sales professionals
• 9 cities including London, New York and Hong Kong

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Clients and Market

• Clients Span Various Segments
• Money management firms
• Hedge funds
• Brokerage firms
• Banks and insurance companies
• Corporate pension funds
• Private investors
• Governments
• Sovereign funds

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Clients and Market
Geographic Client Distribution
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Strategy and Prospects

• New product development
• Commodities and Energy, fiscal 2007
• Premium Service launched October 2007
• Global Equity product, fiscal 2009
• Real Estate product, fiscal 2010
• Research group development
• Add breadth and depth
• Develop more bench strength
• Business development
• Strategically locate sales people globally
• Strong prospect pipeline
• Improve historically low trial conversion rate

44
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Strategy and Prospects

• Leverage Euromoney relationship
• Global presence
• Telesales expertise for lead generation
• BCA presence at conferences and events
• Enhance content delivery platform
• Webcasts
• Teleconferences
• BCA Portal

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Business Strengths

• High-end value added research content
• Strong brand and reputation
• Editorial and business independence
• Unique research philosophy
• Global research perspective
• Proprietary models and vast database of
  historical data
• Subscription model strong deferred revenues
• Broad and diverse client base
• Established sales force in all major markets
• Historically demand has remained high in volatile
  markets

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• QA

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Conclusion

• Group more focused and more robust with higher
  quality earnings than 5 years ago
• 5 year track record supports successful strategy
  for growth
• Better downside protection from growing
  subscription businesses and more diverse sectors
• Further cyclical balance from significant
  emerging market exposure
• Strong balance sheet and highly cash generative
• Well supported dividend strategy
• Continue to invest in new products to drive
  growth
• Growth strategy remains focused on investment in
  new products, leveraging the groups strong
  brands and geographical expansion
• Thank you and .lunch