RELX GROUP 2016 RESULTS

Issued on behalf of RELX PLC and RELX NV

23 February 2017

 

RESULTS FOR THE YEAR TO DECEMBER 2016

 

RELX Group, the global professional information and analytics company, reports another year of underlying growth in revenue, operating profit and earnings in 2016.

 

Highlights Ø Underlying revenue growth +4%; full year reported total £6,895m/€8,412m Ø Underlying adjusted operating profit growth +6%; full year total £2,114m/€2,579m Ø Adjusted EPS growth constant currency +8%; +19% to 72.2p (60.5p); +5% to €0.880 (€0.835) Ø Reported operating profit £1,708m (£1,497m); €2,084m (€2,066m) Ø Reported EPS for RELX PLC 56.3p (46.4p); RELX NV €0.687 (€0.682) Ø Proposed full year dividend growth: +21% to 35.95p for RELX PLC; +5% to €0.423 for RELX NV Ø Return on invested capital up 0.3 percentage points to 13.0% Ø Strong financial position & cash flow; leverage 2.2x EBITDA, pensions & lease adjusted (1.8x unadjusted) Ø £700m of share buybacks completed in 2016; announcing total of £700m for 2017

 

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

"RELX Group has continued to execute well on its strategic priorities, and the gradual improvement in our revenue growth rate reflects the progress that has been made. We are proposing a larger than usual PLC full year dividend increase primarily due to exchange rate movements. Our long term dividend policy is unchanged."

 

Chief Executive Officer, Erik Engstrom, commented:

"We achieved good underlying revenue growth in 2016, and continued to generate underlying operating profit growth ahead of revenue growth, with underlying revenue and adjusted operating profit growth across all four business areas."

 

"Our strategy is unchanged: 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 has driven an improvement in our business profile and the quality of our earnings, with more predictable revenues, a higher growth profile, and improving returns."

 

"Key business trends in the early part of 2017 are consistent with the early part of 2016, 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 2017."

 

FINANCIAL RESULTS

 

Revenue of £6,895m/€8,412m; underlying growth +4%: The underlying growth rate reflects good growth in electronic and face-to-face revenues (87% of the total), and the further development of our analytics and decision tools, partially offset by continued print revenue declines.

 

Adjusted operating profit of £2,114m/€2,579m; underlying growth +6%: Growth expressed in sterling was +16%, and expressed in euros was +3%.

 

Reported operating profit: Reported operating profit, including amortisation of acquired intangible assets, was £1,708m (£1,497m) or €2,084m (€2,066m).

 

Interest and tax: Adjusted net interest expense was £180m (£153m) or €220m (€211m), with the increase reflecting higher net borrowings and currency effects. Adjusted tax was £438m (£388m) or €534m (€535m). The adjusted effective tax rate was 22.7%.

 

Adjusted EPS growth in constant currencies +8%: Adjusted EPS expressed in sterling was 72.2p (+19%), or €0.880 (+5%) 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 56.3p (46.4p) for RELX PLC and €0.687 (€0.682) for RELX NV.

 

Dividend: We are proposing a full year dividend increase of +21% to 35.95p for RELX PLC and +5% to €0.423 for RELX NV. The difference in growth rates between the two dividends reflects movement in the £/Euro exchange rate since February 2016, and the elimination of the 10% UK tax credit gross up (see page 25 for details).

 

The long term 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.

 

ROIC: Return on invested capital increased by 0.3 percentage points to 13.0%.

 

Net debt/EBITDA 2.2x on a pensions and lease adjusted basis (unadjusted 1.8x): Net debt was £4.7bn (£3.8bn) or €5.5bn (€5.1bn) on 31 December 2016, with the difference between the sterling and euro increases reflecting movements in exchange rates. The adjusted cash flow conversion rate was 95% (94%), with capital expenditure as a percentage of revenues unchanged at 5%.

 

Portfolio development: We completed 17 acquisitions of small content, data and exhibition assets for a total consideration of £338m, and disposed of assets for £16m.

 

Share buybacks: In 2016 we deployed £700m on share buybacks. In 2017 we intend to deploy a total of £700m, of which £100m has already been completed.

 

2017 OUTLOOK

Key business trends in the early part of 2017 are consistent with the early part of 2016, 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 2017.

 

ReLX GROUP FINANCIAL SUMMARY

 

		£				€
	Year ended 31 December				Year ended 31 December
	2016 £m	2015 £m	Change		2016 €m	2015 €m	Change		Underlying growth rates
Revenue	6,895	5,971	+15%		8,412	8,240	+2%		+4%
Adjusted operating profit	2,114	1,822	+16%		2,579	2,514	+3%		+6%
Adjusted operating margin	30.7%	30.5%			30.7%	30.5%
Reported operating profit	1,708	1,497	+14%		2,084	2,066	+1%
Adjusted net interest expense	(180)	(153)			(220)	(211)
Adjusted profit before tax	1,934	1,669	+16%		2,359	2,303	+2%
Adjusted tax	(438)	(388)			(534)	(535)
Non-controlling interests	(8)	(6)			(10)	(8)
Adjusted net profit	1,488	1,275	+17%		1,815	1,760	+3%
Reported net profit	1,161	1,008	+15%		1,416	1,391	+2%
Reported net margin	16.8%	16.9%			16.8%	16.9%
Adjusted earnings per share	72.2p	60.5p	+19%		€0.880	€0.835	+5%		+8%*
Net borrowings	4,700	3,782			5,499	5,144
PARENT COMPANIES	RELX PLC				RELX NV
Reported earnings per share	56.3p	46.4p	+21%		€0.687	€0.682	+1%
Ordinary dividend per share	35.95p	29.70p	+21%		€0.423	€0.403	+5%

*Change at constant currencies

 

RELX Group uses adjusted and underlying figures as additional performance measures. 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 30. 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 effects. 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

 

 

 

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 £29bn/€35bn/$36bn.

 

The Annual Reports and Financial Statements 2016 will be available on the RELX Group website at www.relx.com from 7 March 2017. Copies of the Annual Reports and Financial Statements 2016 are expected to be posted to shareholders in RELX PLC on 20 March 2017, and will be available to shareholders in RELX NV on request. Copies of the 2016 Results Announcement are available to the public on the RELX Group website and from the respective companies:

 

 

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

RELX NV Radarweg 29 1043 NX Amsterdam The Netherlands

 

 

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

 

http://www.rns-pdf.londonstockexchange.com/rns/6105X_-2017-2-22.pdf