RELX GROUP 2015 INTERIM RESULTS

Issued on behalf of RELX PLC and RELX NV

23 July 2015

 

CONSOLIDATED INTERIM RESULTS FOR THE SIX MONTHS TO 30 JUNE 2015

 

RELX Group, the global professional information company, reports continued underlying growth in revenue, operating profit and earnings in the first half of 2015.

 

Highlights Ø +3% underlying revenue growth; H1 total £2,964m/€4,031m Ø +5% underlying adjusted operating profit growth; H1 total £909m/€1,236m Ø Underlying revenue and adjusted operating profit growth across all four business areas Ø +8% adjusted EPS growth constant currency; +8% to 30.1p (27.8p); +21% to €0.410 (€0.339) Ø Reported EPS for RELX PLC 21.0p (20.0p); RELX NV €0.313 (€0.268) Ø Interim dividend growth: +6% to 7.40p for RELX PLC; +17% to €0.115 for RELX NV Ø Strong financial position & cash conversion; leverage 2.5x EBITDA pension & lease adjusted (1.9x    unadjusted) Ø £300m of share buybacks completed in H1; further £200m to be deployed in remainder of 2015 Ø New corporate structure, share listings, and entity name changes implemented 1 July 2015 Ø Parent company boards fully aligned 21 July 2015 and consolidated accounts introduced for H1 results

 

Commenting on the results, Anthony Habgood, Chairman, said:

"RELX Group continued to execute on its strategic and financial priorities in the first half of 2015, and we have announced a +6% increase in the interim dividend for RELX PLC and a +17% increase for RELX NV. We have implemented a set of measures that simplify our corporate structure and increase transparency for our shareholders. Earlier this week we took the additional step of fully aligning the parent company boards, and today we are introducing consolidated accounts for our first half results."

 

Chief Executive Officer, Erik Engstrom, commented:

"We achieved good underlying revenue growth in the first half of 2015, and, through further process innovation across our business, we continued to generate underlying operating profit growth ahead of underlying revenue growth, driving +8% growth in adjusted EPS at constant currencies."

 

"Our financial position and cash flow remain strong, and investment in organic growth remains our number one priority for cash use, supported by small acquisitions of datasets and analytics."

 

"The key drivers within our business remain positive, and we are confident that we will deliver another year of underlying revenue, profit, and earnings growth in 2015."

 

FINANCIAL RESULTS HIGHLIGHTS

 

Revenue of £2,964m/€4,031m; underlying growth +3%: The underlying growth rate reflects continued growth in electronic and face to face revenues (86% of the total), partially offset by continued print revenue declines.

 

Adjusted operating profit of £909m/€1,236m; underlying growth +5%: Growth expressed in sterling was +6%, and expressed in euros +18%, reflecting the sharp decline in the euro since the first half of 2014.

 

Reported operating profit: Reported operating profit, including amortisation of acquired intangible assets, was £737m (£697m) or €1,002m (€850m).

 

Interest and tax: Adjusted net interest expense was £75m (£69m) or €102m (€84m), with the £6m/€18m increase reflecting higher net borrowings and currency translation effects partly offset by a lower average interest rate. Adjusted tax was £194m (£186m) or €263m (€227m). The adjusted effective tax rate was 23.3%.

 

Adjusted EPS growth in constant currencies +8%: Adjusted EPS expressed in sterling was +8% to 30.1p, or +21% to €0.410 expressed in euros. The difference in growth rates between the sterling and euro EPS reflects the movement in average exchange rates to €1.36:£1 from €1.22:£1 in the first half of 2014.

 

Reported EPS: Reported EPS was 21.0p (20.0p) for RELX PLC and €0.313 (€0.268) for RELX NV.

 

Dividend: We have announced an interim dividend increase of +6% to 7.40p for RELX PLC and +17% to €0.115 for RELX NV. Following the UK government announcement that dividend tax credits will be abolished, future RELX PLC and RELX NV dividends will be equalised without any tax credit gross up (see page 12 for details).

 

Net debt/EBITDA 2.5x on a pensions and lease adjusted basis (unadjusted 1.9x): Net debt was £3.9bn/€5.5bn on 30 June 2015. The adjusted cash flow conversion rate was 85% (89%). For the full year we expect this rate to be over 90%, in line with prior years.

 

Organic development: In the first half we continued to develop our global technology platforms across the business, launch new products and services in both existing and adjacent market segments, and extend our reach in high growth markets and geographies. Capital expenditure as a percentage of revenues remained at 5%.

 

Portfolio development: We completed 11 small acquisitions of content, data and exhibition assets for a total consideration of £69m in the first half, and disposed of assets for £6m.

 

Share buybacks: In the first half we deployed £300m on share buybacks. In the remainder of 2015 we intend to deploy a further £200m, bringing the full year total to the previously announced £500m (in addition to annual employee share plan purchases of around £30m).

 

Corporate structure simplification: On 1 July 2015 we implemented the previously announced simplification of our corporate structure, our share listings, and our corporate entity names. In addition, we have now fully aligned the boards of the two parent companies, and we have presented our first half results on a consolidated, rather than combined, basis. The move to consolidated accounts has no impact on any figures, except for a minor positive restatement of the reported EPS for RELX NV.

 

FULL YEAR 2015 OUTLOOK

The full year outlook is unchanged. The key drivers within our business remain positive, 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 2015.

 

ReLX GROUP FINANCIAL SUMMARY

 

		£				€
	Six months ended 30 June				Six months ended 30 June
	2015 £m	2014 £m	Change		2015 €m	2014 €m	Change		Underlying growth rates
Revenue	2,964	2,847	+4%		4,031	3,473	+16%		+3%
Adjusted operating profit	909	860	+6%		1,236	1,049	+18%		+5%
Adjusted operating margin	30.7%	30.2%			30.7%	30.2%
Reported operating profit	737	697	+6%		1,002	850	+18%
Adjusted net interest expense	(75)	(69)			(102)	(84)
Adjusted profit before tax	834	791	+5%		1,134	965	+18%
Adjusted tax	(194)	(186)			(263)	(227)
Non-controlling interests	(2)	(2)			(3)	(2)
Adjusted net profit	638	603	+6%		868	736	+18%
Reported net profit	464	454			631	554
Reported net margin	15.7%	15.9%			15.7%	15.9%
Adjusted earnings per share	30.1p	27.8p	+8%		€0.410	€0.339	+21%		+8%*
Net borrowings	3,870	3,278			5,457	4,097
PARENT COMPANIES	RELX PLC				RELX NV
Reported earnings per share	21.0p	20.0p	+5%		€0.313	€0.268	+17%
Ordinary dividend per share	7.40p	7.00p	+6%		€0.115	€0.098	+17%

*Change at constant currencies

 

Adjusted and underlying figures are additional performance measures used by management. Reconciliations between the reported and adjusted figures are set out in note 6 to the condensed consolidated financial information on page 27. The reported operating profit figures are set out in note 2 on page 22. 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 assets held for sale. Underlying revenue growth rates also exclude the effects of exhibition cycling and timing. Constant currency growth rates are based on 2014 full year average and hedge exchange rates. RELX NV comparative reported earnings per share has been restated to reflect the bonus issue of shares declared on 30 June 2015, and the presentation of condensed consolidated financial information. See note 3 to the condensed consolidated financial information on page 23.

 

ENQUIRIES:

Colin Tennant (Investors) +44 (0)20 7166 5751

Paul Abrahams (Media) +44 (0)20 7166 5724

 

 

 

RELX Group is a world-leading provider of information solutions for professional customers across industries. The group employs about 29,500 people of whom about half are in North America. RELX PLC, the London Stock Exchange listed shareholding vehicle, holds 52.9% of the shares in RELX Group. RELX NV, the Amsterdam Stock Exchange listed shareholding vehicle, holds 47.1% of the shares in 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 £22.6bn/€32.4bn.  

 

The 2015 Interim Results are available on the RELX Group website at www.relx.com and from the respective companies:

 

 

RELX PLC 1-3 Strand London WC2N 5JR United Kingdom

RELX NV Radarweg 29 1043 NX Amsterdam The Netherlands

 

 

For more information, visit www.relx.com

 

Click on, or paste the following link into your web browser, to view the associated PDF document.

 

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