Last checked at 26 Jul 2018 07:00
Issued on behalf of RELX PLC and RELX NV
26 July 2018
INTERIM RESULTS FOR THE SIX MONTHS TO 30 JUNE 2018
RELX Group, the global professional information and analytics company, reports continued underlying growthin revenue, operating profit and earnings in the first half of 2018.
Highlights Ø Underlying revenue growth +4%; H1 reported total £3,653m/€4,164m Ø Underlying adjusted operating profit growth +6%; H1 total £1,149m/€1,310m Ø Adjusted EPS growth constant currency +7%; in sterling +3% to 41.1p (39.9p); in euro +1% to €0.469 (€0.463) Ø Reported operating profit £969m (£942m); €1,105m (€1,093m) Ø Reported EPS 34.1p (33.6p); €0.389 (€0.390) Ø Interim dividend growth: +6% to 12.4p for RELX PLC; +6% to €0.140 for RELX NV Ø Strong financial position and cash flow; net debt/EBITDA 2.5x (including leases and pensions) Ø £500m of share buybacks completed in H1, further £200m to be deployed in H2 |
Simplification of corporate structure Ø Dual parent company structure to be simplified into a single parent company; effective 8 September Ø RELX PLC and RELX NV shareholder approvals received; over 99.9% of votes cast in favour Ø Single parent to be listed in London, Amsterdam and New York Ø Full weighting in FTSE 100 index from 10 September; full weighting in AEX index expected by year end |
Commenting on the results, Sir Anthony Habgood, Chairman, said:
"RELX Group continued its positive development in the first half of 2018. Adjusted earnings per share in constant currencies grew +7%, and we have announced an interim dividend increase of +6% for RELX PLC and +6% for RELX NV. This will be the last time that we will announce two separate dividends, as the measures to remove complexity and increase the transparency of our corporate structure that we announced in February 2018 were approved by RELX PLC and RELX NV shareholders in June, and will become effective in September."
Chief Executive Officer, Erik Engstrom, commented:
"We achieved good underlying revenue growth in the first half of 2018, and continued to generate underlying operating profit growth ahead of revenue growth."
"We continued to make good progress on our strategic objectives. 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 have also had an active first half for acquisitions, focusing on targeted data sets, analytics and assets that support our organic growth strategies."
2017 figures restated for new accounting standards (see note 1 on page 22)
FINANCIAL RESULTS
Revenue of £3,653m/€4,164m; underlying growth +4%: The underlying growth rate reflects good growth in electronic and face-to-face revenues (91% of the total), and the further development of our analytics and decision tools, partially offset by continued print revenue declines.
Adjusted operating profit of £1,149m/€1,310m; underlying growth +6%: Growth was driven by revenue growth and close control of costs. When expressed in sterling adjusted operating profit was unchanged, and was -2% lower when expressed in euros.
Reported operating profit: Reported operating profit, including amortisation of acquired intangible assets, was £969m (£942m) or €1,105m (€1,093m).
Interest and tax: Adjusted net interest expense was £95m (£96m) or €108m (€112m). Adjusted tax was £234m (£239m) or €267m (€277m). The adjusted effective tax rate was 22.2%. Reported tax was £192m (£178m) or €219m (€206m).
Adjusted EPS growth in constant currencies +7%: Adjusted EPS expressed in sterling was 41.1p (+3%), or €0.469 (+1%) expressed in euros. The difference in growth rates between the sterling and euro EPS reflects the movement in exchange rates.
Reported EPS: Reported EPS expressed in sterling was 34.1p (33.6p) and expressed in euros was €0.389 (€0.390).
Dividend: We have announced an interim dividend increase of +6% to 12.4p for RELX PLC and +6% to €0.140 for RELX NV.
Net debt/EBITDA 2.5x including leases and pensions: Net debt, including leases as per IFRS 16, was £6.2bn/€7.0bn at 30 June 2018. The adjusted cash flow conversion rate was 93% (90%), with capital expenditure as a percentage of revenues of 4%. Excluding leases and pensions, net debt/EBITDA was 2.3x.
Portfolio development: In the first half of 2018 we completed five acquisitions of content, data analytics and exhibition assets for a total consideration of £694m, including ThreatMetrix acquired by Risk & Business Analytics, and disposed of three assets for a total of £26m.
Share buybacks: We deployed £500m on share buybacks in the first half of 2018, and we intend to deploy a further £200m in the second half, bringing the full year total to the previously announced £700m. Of the £200m second half total, £25m has already been completed since 1 July 2018.
Corporate simplification: The simplification measures which we announced in February 2018 have been approved by RELX PLC and RELX NV shareholders, with more than 99.9% voting in favour of the simplification measures in both parent companies. The effective date of the simplification will be 8 September 2018, and RELX PLC shares will be included in the FTSE 100 index with a full weighting when dealings in the new shares commence on 10 September 2018. We expect RELX PLC also to be included in the AEX index, with a full weighting by year end.
FULL YEAR 2018 OUTLOOK
As we enter the second half of 2018, key business trends are unchanged, and we are confident that, by continuing to execute on our strategy, we will deliver another year of underlying growth in revenue and in adjusted operating profit, together with growth in adjusted earnings per share on a constant currency basis.
ReLX GROUP FINANCIAL SUMMARY
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Six months ended 30 June |
| Six months ended 30 June |
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2018£m | 2017† £m | Change
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| 2018€m | 2017† €m | Change
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Revenue | 3,653 | 3,704 | -1% |
| 4,164 | 4,297 | -3% |
| +4% UL |
Adjusted operating profit | 1,149 | 1,147 | 0% |
| 1,310 | 1,331 | -2% |
| +6% UL |
Adjusted operating margin | 31.5% | 31.0% |
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| 31.5% | 31.0% |
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Reported operating profit | 969 | 942 | +3% |
| 1,105 | 1,093 | +1% |
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Adjusted net interest expense | (95) | (96) |
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| (108) | (112) |
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Adjusted profit before tax | 1,054 | 1,051 | 0% |
| 1,202 | 1,219 | -1% |
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Adjusted tax | (234) | (239) |
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| (267) | (277) |
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Non-controlling interests | (2) | (2) |
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| (2) | (2) |
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Adjusted net profit | 818 | 810 | +1% |
| 933 | 940 | -1% |
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Reported net profit | 678 | 682 | -1% |
| 773 | 791 | -2% |
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Reported net margin | 18.6% | 18.4% |
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| 18.6% | 18.4% |
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Adjusted earnings per share | 41.1p | 39.9p | +3% |
| €0.469 | €0.463 | +1% |
| +7% CC |
Reported earnings per share | 34.1p | 33.6p | +1% |
| €0.389 | €0.390 | 0% |
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Net borrowings | 6,200 | 5,351 |
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| 7,006 | 6,100 |
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PARENT COMPANIES | RELX PLC |
| RELX NV |
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Ordinary dividend per share | 12.4p | 11.7p | +6% |
| €0.140 | €0.132 | +6% |
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† Comparative financial information has been restated following the adoption of IFRS 9 Financial Instruments, IFRS 15 Revenue from Contracts with Customers and IFRS 16 Leases, see note 1 to the consolidated financial information on page 22.
| UL: underlying CC: constant currency | ||||||||
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 31. 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 exhibition cycling, and timing effects. Constant currency growth rates are based on 2017 full-year average and hedge exchange rates.
ENQUIRIES:
| Colin Tennant (Investors) +44 (0)20 7166 5751 | Paul Abrahams (Media) +44 (0)20 7166 5724 |
Disclaimer regarding forward-looking statements
This 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: current and future economic, political and market forces; changes in law and legal interpretations affecting the RELX Group intellectual property rights; regulatory and other changes regarding the collection, transfer or use of third party content and data; demand for the RELX Group products and services; competitive factors in the industries in which the RELX Group operates; compromises of our data security systems and interruptions in our information technology systems; legislative, fiscal, tax and regulatory developments and political risks; exchange rate fluctuations; and other risks referenced from time to time in the filings of RELX PLC and RELX N.V. with the US Securities and Exchange Commission.
RELX Group is a global 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 almost 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 £33bn/€37bn/$43bn.
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/7961V_1-2018-7-25.pdf