Relx Plc · LSE:REL
Relx — H1 2016 Earnings Presentation
24 slides from Relx's earnings presentation, Dec 29, 2016
Slide 1: RELX Group Interim Results 2016
RELX Group Interim Results 2016 Erik Engstrom, CEO Nick Luff, CFO 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. Th
Slide 2: RELX Group H1 2016 progress
Erik Engstrom, CEO 3 RELX Group H1 2016 progress • Positive financial performance – Underlying revenue and operating profit growth across all four business areas • Further strategic and operational progress – Continued improvement in business profile – Organic development remains number one priority
Slide 3: H1 2016 financial highlights
H1 2016 financial highlights • Underlying revenue growth +4% • Underlying adjusted operating profit growth +6% • Adjusted EPS growth at constant currencies +8% 5 Underlying revenue and adjusted operating profit Growth across all business areas Underlying revenue growth Underlying adjusted operating
Slide 4: Scientific, Technical & Medical; Risk & Business Analytics
Scientific, Technical & Medical Underlying growth Revenue (80% electronic) • Key business trends remained positive • In primary research strong growth in usage and article submissions continued; good progress on journal quality +2% +2% • Good growth in databases & tools, and in electronic reference
Slide 5: Legal; Exhibitions
Legal Underlying growth Revenue (83% electronic) • Underlying revenue growth improved slightly • Continued growth in electronic revenues partially offset by print declines +1% +2% • US and European markets stable but subdued; other international market revenue grew well H1 2015 H1 2016 Adjusted oper
Slide 6: RELX Group strategic direction: unchanged
RELX Group strategic direction: unchanged Where we are going • Deliver improved outcomes to professional customers • Combine content & data with analytics & technology in global platforms • Build leading positions in long term global growth markets • Leverage institutional skills, assets and resourc
Slide 7: Business profile: higher growth; Strategic cash priorities
Business profile: higher growth 15% 12% • Print to electronic largely complete 19% 18% 22% 21% 27% 25% 37% 33% • Face-to-face continuing to grow 17% 15% 52% 51% 15% 16% 56% 60% 58% 15% 15% 64% 64% 14% 14% • Primary focus: 17% 15% Transition from electronic reference to electronic decision tools to d
Slide 8: H1 2016 financial highlights
Nick Luff, CFO 15 H1 2016 financial highlights • Underlying revenue growth +4% • Underlying adjusted operating profit growth +6% • Adjusted EPS growth at constant currencies +8% • Cash flow conversion 89% • Net debt / EBITDA 2.4x* • Interim dividend PLC +39%; NV +6% • Share buyback £502m in H1 2016;
Slide 9: Income statement; Earnings per share
Income statement change 2015 2016 constant change 6 months to 30 June £m £m change currency underlying Revenue 2,964 3,257 +10% +5% +4% * Adjusted operating profit 909 1,003 +10% +5% +6% Adjusted operating margin 30.7% 30.8% Adjusted net interest expense (75) (83) Adjusted profit before tax 834 920
Slide 10: Dividends per share; Revenue
Dividends per share Interim dividend 2015 2016 Growth PLC (p) 7.40p 10.25p +39% Exchange rate x €1.40 x €1.19 Tax credit x 100/90 (10%) - NV (€) €0.115 €0.122 +6% • Full year dividend policy unchanged. Continue to grow dividends broadly in line with adjusted earnings per share, subject to exchange r
Slide 11: Adjusted operating profit; Adjusted operating margin
Adjusted operating profit Underlying growth in all business areas change 2015 2016 constant change 6 months to 30 June £m £m change currency underlying Scientific, Technical & Medical 349 374 +7% +3% +4% Risk & Business Analytics 291 327 +12% +6% +9% Legal 120 131 +9% +5% +12% Exhibitions 153 178 +1
Slide 12: Currency profile; Free cash flow
Currency profile H1 2016 Revenue by geographic market • Revenue by currency broadly matches geographic split • Hedging smooths volatility in sterling Rest of World and euro reported results 20% • At current exchange rates: North Rest of America – Significant positive impact on full year Europe 55% a
Slide 13: Uses of free cash flow
Uses of free cash flow 2015 2016 6 months to 30 June £m £m Free cash flow 506 587 Disposals: total consideration 6 7 Acquisitions: total consideration (69) (33) Dividends (421) (464) Share buybacks (300) (502) Other* (67) (54) Currency translation 25 (331) Movement in net debt (320) (790) Net debt a
Slide 14: Summary
Erik Engstrom, CEO 27 Summary H1 2016 • Continued positive financial performance • Further strategic and operational progress 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 wil
Slide 15: Appendices Contents
Appendices 29 Contents Further information Financial information in euros 32 Reconciliation of operating profit 40 Income statement 33 STM growth and currency analysis 41 Revenue underlying growth by business area 34 Exhibitions: cycling impact 42 Adjusted operating profit growth by business area 35
Slide 16: Reconciliation of operating profit
Further information 31 Reconciliation of operating profit Adjusted to reported 2015 2016 6 months to 30 June £m £m change Adjusted operating profit 909 1,003 +10% Adjustments: Amortisation of acquired intangible assets (146) (159) Acquisition related costs (16) (16) Reclassification of tax in joint
Slide 17: STM growth and currency analysis; Exhibitions cycling impact
Scientific, Technical & Medical Growth and currency analysis £ Period Acquisitions/ Constant change in Other Total Underlying disposals currency hedge rates currency currency Total H1 2016 Revenue +2% 0% +2% 0% +5% +5% +7% Adjusted operating profit +4% -1% +3% -1% +5% +4% +7% Adjusted operating marg
Slide 18: Debt profile; Exchange rates and shares outstanding
Debt profile Debt as at 30 June 2016: Gross debt: $6.4bn (£4.8bn); Net debt: $6.1bn (£4.6bn) Maturity Currency <1 Other year >5 Euro US years 1-3 Dollar years 3-5 Sterling years • H1 2016 interest rate on gross debt of 3.8% (FY 2015: 3.8%) 35 Exchange rates and shares outstanding At 31 Dec At 30 Jun
Slide 19: Balance sheet
Balance sheet 30 Jun 2015 31 Dec 2015 30 Jun 2016 £m £m £m Goodwill & acquired intangible assets 7,122 7,509 8,188 Internally developed intangible assets 803 878 1,003 Property, plant & equipment and investments 408 471 490 Net assets held for sale 29 6 10 Net pension obligations (592) (384) (601) W
Slide 20: Financial information in euros: Income statement
Financial information in euros 39 Income statement change 2015 2016 constant change 6 months to 30 June €m €m change currency underlying Revenue 4,031 4,169 +3% +5% +4%* Adjusted operating profit 1,236 1,284 +4% +5% +6% Adjusted operating margin 30.7% 30.8% Adjusted net interest expense (102) (106)
Slide 21: Revenue; Adjusted operating profit (euros)
Revenue Underlying growth in all business areas change 2015 2016 constant change 6 months to 30 June €m €m change currency underlying Scientific, Technical & Medical 1,342 1,352 +1% +2% +2% Risk & Business Analytics 1,091 1,149 +5% +6% +8% Legal 955 965 +1% +3% +2% Exhibitions 643 703 +9% +11%* +6%
Slide 22: Free cash flow; Uses of free cash flow (euros)
Free cash flow 2015 2016 6 months to 30 June €m €m Adjusted operating profit 1,236 1,284 Capital expenditure (195) (196) Depreciation 151 150 Working capital and other items (148) (96) Adjusted cash flow 1,044 1,142 Cash flow conversion rate 85% 89% Cash interest paid (71) (69) Cash tax paid (269) (
Slide 23: Reconciliation of operating profit; STM (euros)
Reconciliation of operating profit Adjusted to reported 2015 2016 6 months to 30 June €m €m change Adjusted operating profit 1,236 1,284 +4% Adjustments: Amortisation of acquired intangible assets (199) (204) Acquisition related costs (22) (21) Reclassification of tax in joint ventures (13) (6) Repo
Slide 24: Balance sheet (euros)
Balance sheet 30 Jun 2015 31 Dec 2016 30 Jun 2016 €m €m €m Goodwill & acquired intangible assets 10,042 10,212 9,826 Internally developed intangible assets 1,132 1,194 1,204 Property, plant & equipment and investments 575 641 588 Net assets held for sale 41 8 12 Net pension obligations (835) (522) (