Relx Plc · LSE:REL
Relx — H1 2021 Earnings Presentation
33 slides from Relx's earnings presentation, Jul 29, 2021
Slide 1: Interim Results 2021
Interim Results 2021 Erik Engstrom, CEO, and Nick Luff, CFO 29 July 2021
Slide 2: Disclaimer Regarding Forward-Looking Statements
DISCLAIMER REGARDING FORWARD-LOOKING STATEMENTS This presentation 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 risks and uncer
Slide 3: Erik Engstrom, CEO
Erik Engstrom, CEO @RELX
Slide 4: RELX H1 2021 progress
RELX H1 2021 progress • Financial performance – Underlying growth trends across almost all market segments returning to the improving trajectory that we saw in the early part of 2020 – Double digit growth in adjusted operating profit and earnings per share at constant currencies • Operational and st
Slide 5: H1 2021 financial highlights
H1 2021 financial highlights • Revenue growth +4% • Adjusted operating profit growth +11% • Adjusted EPS growth +10% • Interim dividend growth +5% Growth rates at constant currencies; dividend growth in sterling 5
Slide 6: Revenue by business area
Revenue by business area Revenue H1 2021: £3,394m Underlying growth nm +3% Exhibitions +10% Legal Risk Scientific, Technical & Medical +4% nm - not meaningful 6
Slide 7: Risk
Risk Underlying growth Revenue • Transactional revenue growth strong; subscription revenue growth more recently returning to historical trends +10% • Business Services double digit growth driven by demand for fraud prevention +3% analytics and decision tools HY 2020 HY 2021 • Insurance strong growth
Slide 8: Scientific, Technical & Medical
Scientific, Technical & Medical Underlying growth Revenue • Good growth in electronic revenue continued; print revenue stabilised • Primary research growth driven by broader content sets and increasingly sophisticated analytics +4% +1% • Strong growth in articles published; market share gains in bot
Slide 9: Legal
Legal Underlying growth Revenue • Legal analytics continuing to drive good growth in electronic revenue; print declines moderated • Continued release of broader data sets, application of machine learning and +3% natural language processing +1% HY 2020 HY 2021 • Further enhancement of functionality o
Slide 10: Exhibitions
Exhibitions Revenue • Gradual reopening in key geographies; improved operating result £m 201 • 87 face-to-face events held in the first half, mostly in China and Japan, recently 121 in the US • Positive reaction from exhibitors and attendees; revenue opportunity often HY 2020 HY 2021 limited by regu
Slide 11: Operational and strategic progress
Operational and strategic progress • Organic growth: Number one strategic priority: organic development of increasingly sophisticated information-based analytics and decision tools that deliver enhanced value to our customers – Further roll out of analytics and decision tools across market segments
Slide 12: Nick Luff, CFO
Nick Luff, CFO @RELX 12
Slide 13: H1 2021 financial highlights
H1 2021 financial highlights Income statement highlights • Constant currency revenue growth +4% • Constant currency adjusted operating profit growth +11% • Adjusted operating profit margin 30.1% • Adjusted EPS change at constant currencies +10% Cash flow and balance sheet highlights • Adjusted cash
Slide 14: Revenue
Revenue change 2020 2021 constant change 6 months to 30 June £m £m change currency underlying Risk 1,209 1,228 +2% +10% +10% Scientific, Technical & Medical 1,276 1,264 -1% +5% +4% Legal 815 781 -4% +2% +3% Exhibitions 201 121 -40% -36% nm RELX 3,501 3,394 -3% +4% nm nm – not meaningful 14
Slide 15: Adjusted operating profit
Adjusted operating profit change 2020 2021 constant change 6 months to 30 June £m £m change currency underlying Risk 445 457 +3% +13% +12% Scientific, Technical & Medical 467 467 0% +4% +4% Legal 150 151 +1% +6% +6% Exhibitions (66) (48) nm nm nm Unallocated items (6) (4) RELX 990 1,023 +3% +11% nm
Slide 16: Adjusted operating margin
Adjusted operating margin 6 months to 30 June 2020 2021 Risk 36.8% 37.2% Scientific, Technical & Medical 36.6% 36.9% Legal 18.4% 19.3% Exhibitions nm nm RELX 28.3% 30.1% nm – not meaningful 16
Slide 17: Exhibitions revenue and cost
Exhibitions revenue and cost £m H1 2019 H1 2020* H1 2021 • Gradual reopening Revenue 684 201 121 Cost (480) (272) (184) • Structurally lower cost Owned portfolio profit contribution 204 (71) (63) • Positive start to second half: – July revenue c£50m – Positive operating result for the month JV contr
Slide 18: Adjusted income statement
Adjusted income statement 2020 2021 change constant 6 months to 30 June £m £m change currency Revenue 3,501 3,394 -3% +4% Operating profit 990 1,023 +3% +11% Operating margin 28.3% 30.1% Net interest expense (81) (70) Effective interest rate 2.2% 2.1% Profit before tax 909 953 +5% +13% Tax charge (1
Slide 19: Reported profit
Reported profit Reconciliation of adjusted to reported profit before tax 2020 2021 6 months to 30 June £m £m change Adjusted profit before tax 909 953 +5% Adjustments: Amortisation of acquired intangible assets (164) (143) Exhibitions exceptional costs (51) - Acquisition-related items (26) (16) Disp
Slide 20: Free cash flow
Free cash flow 2020 2021 6 months to 30 June £m £m Adjusted operating profit 990 1,023 Depreciation 204 208 Capital expenditure (168) (150) Repayment of lease principal (net) (42) (38) Working capital and other items 17 107 Adjusted cash flow 1,001 1,150 Cash flow conversion rate 101% 112% Cash inte
Slide 21: Uses of free cash flow
Uses of free cash flow 2020 2021 6 months to 30 June £m £m Free cash flow 580 886 Disposals: total consideration* 12 175 Acquisitions: total consideration (720) (46) Dividends (617) (634) Share buybacks (150) - Other** (10) 41 Currency translation (415) 160 Movement in net debt (1,320) 582 Net debt
Slide 22: Erik Engstrom, CEO
Erik Engstrom, CEO @RELX 22
Slide 23: Summary
Summary H1 2021 • Underlying growth trends across almost all market segments returning to the improving trajectory that we saw in the early part of 2020 • Continued investment behind strategic priorities FY 2021 outlook • Based on the improved performance in Risk, STM and Legal in the first half, we
Slide 24: Appendices
Appendices 25 RELX revenue by segment 26 Risk: revenue split 27 Risk: underlying revenue growth 28 STM: revenue split 29 Legal: revenue split 30 Exhibitions: revenue split 31 Balance sheet 32 Exchange rates and shares outstanding 33 Corporate responsibility – external recognition 24
Slide 25: RELX revenue by segment
RELX revenue by segment Exhibitions News & business Exhibitions Risk Legal print Business services Electronic reference & decision tools: − International − North Legal America Insurance Print books and pharma Data services Government Databases & tools and electronic reference Primary research: −Acad
Slide 26: Risk
Risk H1 2021 revenue £1,228m Format Geography Type Face-to-face Rest of world 1% 7% Europe Subscription 14% 39% Electronic North America Transactional 99% 79% 61% 26
Slide 27: Risk underlying revenue growth
Risk underlying revenue growth +10% +9% +8% +8% +7% +7% Base market +6% +6% growth +5% contribution* +3% +3% Contribution from recent product introductions** 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 H1 * Products more than 5 years old ** Products less than 5 years old 27
Slide 28: Scientific, Technical & Medical
Scientific, Technical & Medical H1 2021 revenue £1,264m Format Geography Type Print 12% Rest of world Transactional 32% North 24% America 45% Electronic Europe Subscription 88% 23% 76% 28
Slide 29: Legal
Legal H1 2021 revenue £781m Format Geography Type Print Rest of world 12% 12% Transactional 21% Europe 22% Electronic Subscription North America 88% 79% 66% 29
Slide 30: Exhibitions
Exhibitions H1 2021 revenue £121m Format Geography Source North America Electronic 6% Admission fees 15% Europe and other 28% 13% Rest of world Face-to-face 81% 85% Exhibitor fees 72% 30
Slide 31: Balance sheet
Balance sheet 30 June 2020 31 Dec 2020 30 June 2021 £m £m £m Goodwill & acquired intangible assets 10,212 9,405 9,198 Internally developed intangible assets 1,341 1,244 1,219 Property, plant & equipment and investments 447 524 350 Right-of-use assets 254 216 190 Net pension obligations (611) (624) (
Slide 32: Exchange rates and shares outstanding
Exchange rates and shares outstanding At 31 Dec At 30 June Average Average Average 2020 2021 H1 2020 FY 2020 H1 2021 Exchange rates £:$ 1.37 1.38 1.26 1.28 1.39 £:€ 1.12 1.16 1.14 1.12 1.15 Shares outstanding Total: 1,926m 1,928m 1,927m 1,926m 1,927m 32
Slide 33: Corporate responsibility - external recognition
Corporate responsibility - external recognition Among best in our peer group; strong ESG performance MSCI ESG ratings AAA rating since 2016 Sustainalytics Top 1% of 14,000 companies; 1st in Media sector Dow Jones Sustainability Indices 3rd in professional services sector Responsibility100 Index 3rd