Last checked at 28 Jul 2016 07:00
Issued on behalf of RELX PLC and RELX NV
28 July 2016
INTERIM RESULTS FOR THE SIX MONTHS TO 30 JUNE 2016
RELX Group, the global professional information and analytics company, reports continued underlying growth in revenue, operating profit and earnings in the first half of 2016.
Highlights Ø +4% underlying revenue growth; H1 total £3,257m/€4,169m Ø +6% underlying adjusted operating profit growth; H1 total £1,003m/€1,284m Ø Underlying revenue and adjusted operating profit growth across all four business areas Ø +8% adjusted EPS growth constant currency; +13% to 34.0p (30.1p); +6% to €0.435 (€0.410) Ø Reported EPS for RELX PLC 26.9p (21.0p); RELX NV €0.344 (€0.313) Ø Interim dividend growth: +39% to 10.25p for RELX PLC; +6% to €0.122 for RELX NV Ø Strong financial position & cash flow; leverage 2.4x EBITDA, pensions & lease adjusted (1.9x unadjusted) Ø Approximately £500m share buybacks completed in H1; further £200m to be deployed in remainder of 2016 |
Commenting on the results, Anthony Habgood, Chairman, said:
"RELX Group has continued to execute well on its strategic priorities, and the slight improvement in our revenue growth rate in the first half reflects the progress that has been made. We have announced a larger than usual PLC interim dividend increase primarily due to exchange rate movements. Our full year dividend policy is unchanged."
Chief Executive Officer, Erik Engstrom, commented:
"We achieved good underlying revenue growth in the first half of 2016, and continued to generate underlying operating profit growth ahead of revenue growth."
"Our number one priority remains the organic development of increasingly sophisticated information-based analytics and decision tools that deliver enhanced value to our customers. We believe that the systematic evolution of our business is driving an improvement in our business profile and the quality of our earnings, with more predictable revenues, a higher growth profile, and improving returns."
"As we enter the second half of 2016, key trends across our business are unchanged, and we are confident that, by continuing to execute on our strategy, we will deliver another year of underlying revenue, profit, and earnings growth in 2016."
FINANCIAL RESULTS
Revenue of £3,257m/€4,169m; underlying growth +4%: The underlying growth rate reflects good growth in electronic and face-to-face revenues (88% of the total), and the further development of our analytics and decision tools, partially offset by continued print revenue declines.
Adjusted operating profit of £1,003m/€1,284m; underlying growth +6%: Growth expressed in sterling was +10%, and expressed in euros was +4%.
Reported operating profit: Reported operating profit, including amortisation of acquired intangible assets, was £823m (£737m) or €1,053m (€1,002m).
Interest and tax: Adjusted net interest expense was £83m (£75m) or €106m (€102m), with the increase reflecting higher net borrowings and currency translation effects. Adjusted tax was £213m (£194m) or €273m (€263m). The adjusted effective tax rate was 23.1%.
Adjusted EPS growth in constant currencies +8%: Adjusted EPS expressed in sterling was 34.0p (+13%), or €0.435 (+6%) expressed in euros. The difference in growth rates between the sterling and euro EPS reflects the movement in exchange rates.
Reported EPS: Reported EPS was 26.9p (21.0p) for RELX PLC and €0.344 (€0.313) for RELX NV.
Dividend: We have announced an interim dividend increase of +39% to 10.25p for RELX PLC and +6% to €0.122 for RELX NV. The larger than usual difference in growth rates between the two dividends reflects movement in the £/Euro exchange rate since July 2015, and the elimination of the 10% UK tax credit gross up earlier this year (see page 13 for details).
The total full year dividend policy is unchanged. We will continue to grow the dividend broadly in line with adjusted earnings per share, subject to exchange rate considerations, whilst maintaining cover of at least two times over the longer term.
Net debt/EBITDA 2.4x on a pensions and lease adjusted basis (unadjusted 1.9x): Net debt was £4.6bn/€5.5bn on 30 June 2016. The adjusted cash flow conversion rate was 89% (85%), with capital expenditure as a percentage of revenues unchanged at 5%. For the full year we expect the cash conversion rate to be over 90%, in line with prior years.
Portfolio development: We completed 6 acquisitions of small content, data and exhibition assets for a total consideration of £33m, and we are nearing completion of a number of transactions which will bring us close to our five year average run rate.
Share buybacks: In the first half of 2016 we deployed approximately £500m of the previously announced full year total of £700m. In the remainder of 2016 we intend to deploy a further £200m, the same amount as we deployed in H2 2015 and 2014.
FULL YEAR 2016 OUTLOOK
As we enter the second half of 2016, key trends across our business are unchanged, and we are confident that, by continuing to execute on our strategy, we will deliver another year of underlying revenue, profit, and earnings growth in 2016.
ReLX GROUP FINANCIAL SUMMARY
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| € |
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Six months ended 30 June |
| Six months ended 30 June |
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2016£m | 2015 £m | Change
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| 2016€m | 2015 €m | Change
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| Underlyinggrowthrates | |
Revenue | 3,257 | 2,964 | +10% |
| 4,169 | 4,031 | +3% |
| +4% |
Adjusted operating profit | 1,003 | 909 | +10% |
| 1,284 | 1,236 | +4% |
| +6% |
Adjusted operating margin | 30.8% | 30.7% |
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| 30.8% | 30.7% |
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Reported operating profit | 823 | 737 | +12% |
| 1,053 | 1,002 | +5% |
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Adjusted net interest expense | (83) | (75) |
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| (106) | (102) |
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Adjusted profit before tax | 920 | 834 | +10% |
| 1,178 | 1,134 | +4% |
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Adjusted tax | (213) | (194) |
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| (273) | (263) |
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Non-controlling interests | (2) | (2) |
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| (3) | (3) |
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Adjusted net profit | 705 | 638 | +11% |
| 902 | 868 | +4% |
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Reported net profit | 558 | 464 | +20% |
| 714 | 631 | +13% |
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Reported net margin | 17.1% | 15.7% |
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| 17.1% | 15.7% |
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Adjusted earnings per share | 34.0p | 30.1p | +13% |
| €0.435 | €0.410 | +6% |
| +8%* |
Net borrowings | 4,572 | 3,870 |
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| 5,486 | 5,457 |
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PARENT COMPANIES | RELX PLC | RELX NV |
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Reported earnings per share | 26.9p | 21.0p | +28% |
| €0.344 | €0.313 | +10% |
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Ordinary dividend per share | 10.25p | 7.40p | +39% |
| €0.122 | €0.115 | +6% |
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*Change at constant currencies
RELX Group uses adjusted and underlying figures as additional performance measures. These measures are used by management, alongside the comparable GAAP measures, in evaluating the business performance. Adjusted figures primarily exclude the amortisation of acquired intangible assets and other items related to acquisitions and disposals, and the associated deferred tax movements. Reconciliations between the reported and adjusted figures are set out on page 29. Underlying growth rates are calculated at constant currencies, and exclude the results of all acquisitions and disposals made in both the year and prior year and of assets held for sale. Underlying revenue growth rates also exclude the effects of exhibition cycling and timing. Constant currency growth rates are based on 2015 full year average and hedge exchange rates.
ENQUIRIES:
| Colin Tennant (Investors) +44 (0)20 7166 5751 | Paul Abrahams (Media) +44 (0)20 7166 5724 |
FORWARD-LOOKING STATEMENTS
This Results Announcement contains forward-looking statements within the meaning of Section 27A of the US Securities Act of 1933, as amended, and Section 21E of the US Securities Exchange Act of 1934, as amended. These statements are subject to a number of risks and uncertainties that could cause actual results or outcomes to differ materially from those currently being anticipated. The terms "outlook", "estimate", "project", "plan", "intend", "expect", "should be", "will be", "believe", "trends" and similar expressions identify forward-looking statements. Factors which may cause future outcomes to differ from those foreseen in forward-looking statements include, but are not limited to competitive factors in the industries in which the Group operates; demand for the Group's products and services; exchange rate fluctuations; general economic and business conditions; legislative, fiscal, tax and regulatory developments and political risks; the availability of third-party content and data; breaches of our data security systems and interruptions in our information technology systems; changes in law and legal interpretations affecting the Group's intellectual property rights and other risks referenced from time to time in the filings of the Group with the US Securities and Exchange Commission.
RELX Group is a world‐leading provider of information and analytics for professional and business customers across industries. The group serves customers in more than 180 countries and has offices in about 40 countries. It employs approximately 30,000 people of whom half are in North America. RELX PLC is a London listed holding company which owns 52.9% of RELX Group. RELX NV is an Amsterdam listed holding company which owns 47.1% of RELX Group. The shares are traded on the London, Amsterdam and New York Stock Exchanges using the following ticker symbols: London: REL; Amsterdam: REN; New York: RELX and RENX. The total market capitalisation is approximately £28bn/€34bn/$37bn.
For more information about RELX Group, visit www.relx.com.
Click on, or paste the following link into your web browser, to view the associated PDF document.
http://www.rns-pdf.londonstockexchange.com/rns/4506F_1-2016-7-27.pdf