UK-based Informa (INF), the world’s largest events and exhibitions business, reported generally positive FY19 results in terms of revenue, earnings, and growth, including what Informa leadership describes as a “secure balance sheet”. But, more important is the storm brought about by coronavirus that is facing the events-focused business and the impact this may have on the company’s already-poor cyber governance. In its earnings call, the company described strong headwinds from coronavirus and possible uncertainties around the larger disruption over the course of 2020. Indeed, INF has already taken a £450mn revenue hit as a result of postponing and cancelling 100 events.
Though the company highlighted the value generated by an upgrade to its technology platforms and digital tools in this week’s earnings call, INF has a poorly protected corporate IT network, as noted in a December Cyberhedge Cyber Governance Alert. A further rollout of digitalization tools without the necessary security controls increases the likelihood of further operational disruption to two areas of its business already being undercut by coronavirus—events and exhibitions. This is significant because it accounts for a majority of revenue and profit across the group.
How is the current disruption and weaker outlook related to cyber? A weaker 2020 outlook, steep drop in share price, and significant loss of revenue put further financial constraints on INF’s ability to address its cyber governance in the short term. Management should still consider immediate steps to improve its governance rating by addressing its overly complex corporate IT network, better protecting its valuable digital workflow assets, and hiring more security staff. Despite the near-term financial constraints, now is the time for the company to better secure itself against another downside financial risk.
Though cost reductions are a focus for C-suites around the world today, INF would be prudent to resist trimming its security budget at a time when it actually needs to increase investment in this area to address its key weaknesses. A cyber-related operational disruption to INF’s events/exhibitions business would only further compound the company’s current macro-challenges.