UBM: Core Media Brands for Core Audiences

United Business Media's reshuffling of resurgent U.S. publisher CMP follows a number of recent successful moves by CEO David Levin

by Jennifer L. Schenker

London-based United Business Media (UBM.L) is hardly a household name. But ask people in the tech industry if they have heard of Interop or Web 2.0 conferences—all now fully or partially owned by UBM—and they will immediately recognize those brands. Or ask U.S. tech-heads if they know CMP, a well-known U.S. publisher behind core technology publications such as InformationWeek, and few would know UBM is the parent. That relative obscurity suits UBM Chief Executive Officer David Levin just fine. "We do not need the corporate brand to be well known, we need the individual brands to be known because that is where the passion is in these narrow communities," Levin says.

Levin is an activist boss. The former mobile industry executive has achieved a radical transformation at CMP, which was once heavily and disastrously dependent on print products for its revenue. On Feb. 29, UBM announced that CMP would be broken up and integrated into four market-focused businesses, a move UBM says it hopes will allow each new entity to operate closer to its customer base. While CMP used to get only 25% of its revenue from nonprint sources, now it gets 62%. CMP's profits, which were $70 million in 2000, plunged into losses of $12 million by 2001. In 2007 they shot up 30%, to $50 million, from $38 million in 2006.

Mixed Media Aimed at Business

The turnaround at CMP is an example of how UBM, a low-profile company with a market cap of $2.5 billion, is getting the mix between print, community, and Internet right in ways few media companies have managed. Levin has been quietly building a tightly integrated multimedia empire, purchasing 52 online and exhibition companies since 2005 with an average return on investment of over 13%. UBM looks to make another $1 billion in acquisitions in the next two years, says Levin.

Under Levin's watch UBM has exited seven noncore businesses, selling them for a total of $1.4 billion, and made a big push into emerging markets such as India, Brazil, and China, where it is now the largest private trade fair organizer. The company, which is now in 30 countries and derives only 15% of its profits from business in Britain, reported 2007 revenue for the group was up 8.5%, to $1.6 billion, while profit was up 11.5%, to $330 million. Through dividends and stock buybacks, some $1.5 billion has been given back to shareholders under Levin's watch. He hopes to give back another $400 to $600 million to shareholders by the end of 2009.

The company's margins, which were around 8% in 2002 and are now 21%, are roughly in line with media companies like Pearson (PSON), Reed Elsevier (REL), and exhibition organizer Informa (INF). But UBM was starting from way behind and is now among the best positioned going forward, say financial analysts. All media groups are going through portfolio changes. Pearson has made small bolt-on acquisitions, Informa has merged with an academic publisher to make it less vulnerable to cyclical changes, and Reed Elsevier is trying to sell its print magazines. But none has made as radical a transformation as UBM.