The Global Media Weekly for executives and entrepreneurs

What will Ascential do next?

The UK-based Ascential is repaying investors a total of £850mn in dividends and share buybacks from the the sale of its Flywheel eCommerce data and WGSN fashion forecasting. Now, the listed B2B events and intelligence company can get down to business with Cannes Lions and Money 20/20. That’s what executives have been thinking this week as they hosted Elon Musk (and more than 10,000 others) in sun-drenched Cannes.

What was once an advertising industry festival is now as crucial a gathering for the world’s biggest brands, digital platforms and media. Despite the almost unnoticed detail that awards entries were down on the previous year, the mood music was all positive: two years after the end of the pandemic, Cannes Lions is back – and more profitable than ever. The attendance of some 300 broadcasters, journalists and YouTubers confirms its global primacy.

It was the perfect setting to present analysts and fund managers with the “new” Ascential, described by CEO Philip Thomas as “a focused events-led business with a compelling strategic framework, built around two of the world’s leading event platforms.”

Its Capital Markets Day entertained analysts who had spent much of the previous two years trying to understand whether (and why) the company’s previous incarnation was so under-valued by shareholders and what, if anything, was going to happen as a result. The upshot had been a protracted but, ultimately, highly-rewarding auction – almost an echo of that conducted 16 years before by the company’s EMAP predecessor.

Now, the whole game starts again.

The big question is whether the £1bn Ascential can regain its growth and win the confidence of investors, some of whom had dismissed its chances even before the sell-off had completed; re-making strategy from the “rump” of a larger company sometimes has that effect.

The Cannes session provided a high-definition picture of the winners and worries.

Thomas, who has been responsible for Lions for most of the 20 years since it was acquired, has multiplied its revenue by 10x. The 70-year-old event – bought for £52mn in 2004 – may now be worth more than £700mn to one of the large consulting businesses. But that’s only the start of the attraction of a brilliant B2B media brand that has raced past the sponsor boycotts and pandemic which had once seemed to threaten its very existence.

In a world where trade show organisers dream of diverse revenues, year-round relationships and data ownership, Cannes Lions is that dream. It has 5,000 customers from 100 countries and a spread of revenue, 70% of which is divided almost equally between subscriptions, sponsorship and awards entries. Given that the so-called benchmark awards were successfully organised remotely during the pandemic, Cannes Lions can credibly claim that 54% of its revenue is no longer dependant on the live event. And the growth of advisory and consulting revenue (7% of the total in 2023) can clearly become an increasingly strategic part of the customer relationships which (lest we forget) include delegate passes that cost anywhere from £4,095 to £10,495 per head.

Key parts of the “glue” are the data and insights of the 39-year-old WARC whose subscription-led revenues have doubled to £22mn (£6mn EBITDA) in the six years since it was acquired for £24mn. As if to emphasise the contrast with mere trade shows, the Ascential CEO is quick to point out that Cannes Lions last year had a net promoter score of +58. Something else for the others to dream about.

The tech-smart Lions story is burnished by EBITDA margins of 40%+, and the awards programme that has progressively expanded into healthcare, entertainment, technology, sport, B2B, gaming and luxury. The way that the awards entries and judging have been used to create a high-value information business – feeding its £30mn subscriptions revenue – is a model for all other B2B awards.

That – and the speedy moves to embrace the influencers of the red-hot Creator Economy – shows what Ascential wants to build elsewhere, maybe in tech, energy or pharma.

But that’s the challenge.

For all the fact that CEO Thomas compares the “large and fast growing addressable markets” and “multiple levers for organic growth” of Cannes Lions and the Money 20/20, the company’s presentations this week seemed actually to illuminate the differences.

The Money 20/20 fintech events are in: Las Vegas (£47mn revenue in 2023), Amsterdam (£28mn) and the newly-launched Bangkok (£6mn in 2024). The business had been acquired in 2014, two years after its launch in the US and two years before the launch in Europe. Total revenue (of the US and Europe events) increased from £35mn in 2016 (the year of the Europe launch) to £50mn in 2019. After the pandemic, both events bounced back to a revenue total of £80mn (60% above 2019). But 2023 saw revenue falling back to £76mn due to industry “headwinds”. This year is being forecast at just £78mn for all three events (ie a £4m reduction for the US and Europe).

Ascential was wooing investors with its determination to develop Money 20/20 on the lines of Cannes Lions for revenue diversity, geographical leadership – and growth. The fact that Money 20/20 already generates 40% of its revenue from delegates seems like a promising start, although the dependance on sponsorship makes it especially vulnerable to cyclical downturn.

But – apart from all else – a key difference is that the Cannes festival had been entrenched since 1954, while Money 20/20 is growing up in a fiercely competitive environment and with new-era geopolitical challenges. The recent numbers seem to reflect that.

There’s more.

There’s always a basic truth in how even the most proficient executives explain their businesses. That was clear from the Cannes assertion that Money 20/20’s principal strengths included being a “focal point for the entire industry where business gets done”. That is, after all, what is claimed by almost all the trade shows from which Ascential wants to distance itself. It seemed to confirm that Money 20/20 is no Cannes Lions, at least not yet.

But, despite the current loss of growth, there is no mistaking the success of Money 20/20 as a brand which – even now – generates some £25mn of EBITDA. However, it underlines how difficult the task will be for listed company Ascential to win the hearts and minds of investors, let alone find hoped-for acquisition targets that have the potential to resemble, well, Cannes Lions.

The numbers spell out the challenge of a very cash-generative business with good margins but relatively modest growth:

Revenue (growth)230 (7%)215 (4%)206 (8%)191
   Marketing140136131  99
   Fintech 90  78  75  92
EBITDA** 76  71  69  50
   Marketing 62  59  56  40
   Fintech 27  25  27  32
Headcount  700703737
*Flashes & Flames estimates
**Includes £13mn of head office costs

Although the slowish growth seems to involve the Marketing/ Cannes Lions sector almost as much as Fintech/ Money 20/20, this week’s announcement of a major eLearning initiative might just turbocharge Ascential’s best market. We have previously identified the strategic logic of it acquiring the under-loved marketing B2B Centaur Media, whose largest and fastest-growing business is its “Mini MBA” for marketing people. But not only is Ascential ruling out almost any M&A, other than small bolt-on deals or strong individual events, it’s also branding the new online courses the Creative MBA (cMBA). It will be a direct challenge to Centaur.

We don’t know what Professor Mark Ritson, founder and director of Centaur’s Mini MBA, thinks about the potential Ascential rivalry but he was in Cannes to hear all about it. For Ascential, it’s a great opportunity to build a new Cannes Lions-linked business that can dramatically enhance subscriptions revenue from the cMBA and also follow-on courses. In another prompt for B2B media elsewhere, it is not only getting into online learning but also into loyalty-inducing qualifications. That’s real IP.

Ascential needs this. But it must also get Money 20/20 growing strongly again and find a new market or two to prove the transferability of its business model. If not, Phil Thomas might find himself living through another year or two of shareholder attacks – followed, perhaps, by acquisition by (or merger with) an events company hungry to own a portfolio that really is different.

Being a listed company can be tough, even for the owner of Cannes Lions.

Ascential Plc