Slide 1: RELX Group interim results 2018
RELX Group interim results 2018 Erik Engstrom, CEO Nick Luff, CFO 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
Slide 2: RELX Group H1 2018 progress
Erik Engstrom, CEO 3 RELX Group H1 2018 progress • Positive financial performance • Further strategic and operational progress • Simplification of corporate structure approved by shareholders 4 2
Slide 3: H1 2018 financial highlights
H1 2018 financial highlights • Underlying revenue growth +4% • Underlying adjusted operating profit growth +6% • Adjusted EPS growth at constant currencies +7% 5 Underlying revenue and adjusted operating profit Underlying revenue growth Underlying adjusted operating profit growth H1 2018 H1 2018 +5%
Slide 4: Scientific, Technical & Medical; Risk & Business Analytics
Scientific, Technical & Medical Underlying growth • Key business trends remained positive; underlying Revenue revenue growth slightly higher than prior year • Continued growth in electronic revenues; print declines +2% +3% moderated • Primary research value enhancement: content sets; H1 2017 H1 2018
Slide 5: Legal; Exhibitions
Legal Underlying growth Revenue • Underlying revenue growth in line with prior year • Operating profit margin increase reflects ongoing process improvement, system decommissioning, and +2% +2% portfolio effects • Continued growth in electronic revenues partially offset H1 2017 H1 2018 by print decli
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: Corporate structure simplification
Corporate structure simplification • Dual parent company structure to be simplified into a single parent company • RELX PLC & RELX NV shareholder approvals received; over 99.9% of votes cast in favour • Single parent to be listed in London, Amsterdam and New York • Full weighting in FTSE 100 from 10
Slide 8: H1 2018 financial highlights
Nick Luff, CFO 15 H1 2018 financial highlights Income statement highlights • Underlying revenue growth +4% • Underlying adjusted operating profit growth ahead of revenue growth +6% • Adjusted operating profit margin 50 basis points higher 31.5% • Adjusted EPS growth at constant currencies +7% Cash f
Slide 9: Income statement; Earnings per share
Income statement change 2017 2018 constant change 6 months to 30 June £m £m change currency underlying Revenue 3,704 3,653 -1% +4% +4% Adjusted operating profit 1,147 1,149 0% +4% +6% Adjusted operating margin 31.0% 31.5% Adjusted net interest expense (96) (95) Adjusted profit before tax 1,051 1,054
Slide 10: Revenue; Adjusted operating profit
Revenue Underlying growth in all business areas change 2017 2018 constant change 6 months to 30 June £m £m change currency underlying Scientific, Technical & Medical 1,158 1,193 +3% +6% +3% Risk & Business Analytics 1,073 1,020 -5% +2% +8% Legal 845 783 -7% -1% +2% Exhibitions 628 657 +5% +9%* +5% R
Slide 11: Adjusted operating margin; Currency profile
Adjusted operating margin 6 months to 30 June 2017 2018 Scientific, Technical & Medical 34.9% 35.7% Risk & Business Analytics 36.8% 36.7% Legal 17.9% 18.1% Exhibitions 32.5% 32.6% RELX Group 31.0% 31.5% All prior year results restated for adoption of IFRS 9, 15 and 16 21 Currency profile Revenue by
Slide 12: Free cash flow; Uses of free cash flow
Free cash flow 2017 2018 6 months to 30 June £m £m Adjusted operating profit 1,147 1,149 Capital expenditure (173) (161) Depreciation 137 130 Working capital and other items (73) (50) Adjusted cash flow 1,038 1,068 Cash flow conversion rate 90% 93% Cash interest paid (88) (66) Cash tax paid (222) (2
Slide 13: Debt profile
Debt profile Gross bank and bond borrowings at 30 June 2018 $7.9bn (£6.0bn)* Maturity Currency Other <1 year >5 US years Euro 1-3 Dollar years 3-5 years Sterling • HY 2018 interest rate on gross debt of 3.2% (HY 2017: 3.4%; FY 2017: 3.2%) *Net debt of £6.2bn consists of gross bank and bond borrowing
Slide 14: Summary and 2018 outlook
Erik Engstrom, CEO 27 Summary H1 2018 • Positive financial performance; strong financial position • Further strategic and operational progress • New simplified corporate structure effective September 2018 2018 Outlook As we enter the second half of 2018, key business trends are unchanged, and we are
Slide 15: Appendices contents
Appendices 29 Contents Further information Financial information in euros 31 Reconciliation of operating profit 39 Income statement 32 STM: growth and currency analysis 40 Revenue 33 Exhibitions: cycling impact 41 Adjusted operating profit 34 Exchange rates and shares outstanding 42 Free cash flow 3
Slide 16: Reconciliation of operating profit
Reconciliation of operating profit Adjusted to reported 2017 2018 6 months to 30 June £m £m change Adjusted operating profit 1,147 1,149 0% Adjustments: Amortisation of acquired intangible assets (181) (142) Acquisition related costs (18) (32) Reclassification of tax in joint ventures (6) (6) Report
Slide 17: Exhibitions: cycling impact; Exchange rates and shares outstanding
Exhibitions: cycling impact H1 Revenue growth 2013 2014 2015 2016 2017 2018 Total at constant currencies +2% +11% +1% +9% +1% +9% Impact of portfolio changes 0% +2% +1% +1% +1% +1% Underlying with cycling +2% +9% 0% +8% +0% +8% Impact of cycling* shows -5% +2% -5% +3% -6% +3% Underlying +7% +7% +5%
Slide 18: Balance sheet; Restatement due to accounting standards
Balance sheet 30 June 31 Dec 30 June 2017 2017 2018 £m £m £m Goodwill & acquired intangible assets 8,336 8,023 8,799 Internally developed intangible assets 1,106 1,136 1,182 Property, plant & equipment and investments 436 437 435 Right-of-use assets 307 287 279 Net assets held for sale 57 - - Net pe
Slide 19: Restatement: Earnings per share
Restatement due to changes to accounting standards Earnings per share H1 2017 H1 2017 as as reported Impact of restated Income statement £m IFRS 9 IFRS 15 IFRS 16 Total £m Adjusted net interest (87) (1) - (8) (9) (96) expense Adjusted net profit 823 (1) (10) (2) (13) 810 Adjusted EPS (p) 40.5p (0.6)
Slide 20: Income statement; Revenue (euros)
Income statement change 2017 2018 constant change 6 months to 30 June €m €m change currency underlying Revenue 4,297 4,164 -3% +4% +4% Adjusted operating profit 1,331 1,310 -2% +4% +6% Adjusted operating margin 31.0% 31.5% Adjusted net interest expense (112) (108) Adjusted profit before tax 1,219 1,
Slide 21: Adjusted operating profit; Free cash flow (euros)
Adjusted operating profit Underlying growth in all business areas change 2017 2018 constant change 6 months to 30 June €m €m change currency underlying Scientific, Technical & Medical 469 486 +4% +3% +3% Risk & Business Analytics 458 426 -7% +3% +8% Legal 175 162 -7% 0% +9% Exhibitions 237 244 +3% +
Slide 22: Uses of free cash flow; Reconciliation of operating profit (euros)
Uses of free cash flow 2017 2018 6 months to 30 June €m €m Free cash flow 831 826 Disposals: total consideration 24 30 Acquisitions: total consideration (17) (791) Dividends (607) (625) Share buybacks (580) (570) Other* (27) (57) Currency translation 185 (172) Movement in net debt (191) (1,359) Net
Slide 23: STM growth and currency analysis; Balance sheet (euros)
Scientific, Technical & Medical Growth and currency analysis € Period Portfolio Constant change in Other Total Underlying changes currency hedge rates currency currency Total H1 2018 Revenue +3% +3% +6% +1% -6% -5% +1% Adjusted operating profit +3% 0% +3% +3% -2% +1% +4% Adjusted operating margin 0.