Slide 1: Preliminary Results 2007 Highlights
Preliminary Results 2007 Highlights Strong 2007 results Significant opportunities to accelerate performance further Divestment of Reed Business Information Reed Elsevier Preliminary Results 2007 Acquisition of ChoicePoint Sir Crispin Davis Mark Armour Major restructuring to accelerate margin growth
Slide 2: Strong 2007 Performance Driving Online Solutions
Preliminary Results 2007 Strong 2007 Performance Driving Online Solutions $bn Online growth +11% Online revenues 47% • Revenue growth ahead of market • Strong underlying margin improvement • Good cash generation, and growing returns on capital • 12% adjusted EPS growth at constant currencies 1.1 1.5
Slide 3: Growing Business Momentum, Consistent Strategy
Preliminary Results 2007 Growing Business Momentum Consistent Strategy +6% +5% +5% Underlying revenue +3% Delivering authoritative content through leading brands growth 2004 2005 2006 2007 Driving online workflow solutions +10% +8% Underlying operating +6% +3% Improving cost efficiency and margin pr
Slide 4: Key Objectives for the Future; Divestment of Reed Business Information
Preliminary Results 2007 Key Objectives for the Future Divestment of Reed Business Information Accelerate growth further • Advertising based, fragmented markets increasingly differ from rest of Reed Elsevier More consistent growth • Market growth profile, and performance, less consistent • Content b
Slide 5: Divestment of Reed Business Information; ChoicePoint Acquisition
Preliminary Results 2007 Divestment of Reed Business Information ChoicePoint Acquisition 12 months to 31 December 2007 % change* Revenue £906m +4% Adjusted operating profit £119m +10% Adjusted operating margin 13% Capital employed £1,152m • Reed Elsevier to acquire ChoicePoint Inc – All-cash transac
Slide 6: Strategic Rationale; Risk Market Fundamentals
Preliminary Results 2007 Strategic Rationale Strong Risk Market Fundamentals • Creates $1.5bn leadership position in high growth Risk Analytics TH sector R OW • Builds on strongly performing LN RIAG business and workflow T G solutions base KE • Complementary positions in insurance, screening and fin
Slide 7: ChoicePoint: Core Businesses and Growth Record
Preliminary Results 2007 LexisNexis Risk and Information Analytics: ChoicePoint: Core Businesses Growth Record Insurance • 82% of business profits • Consistent 10% a year revenue growth • Continuous double-digit growth over 20 years • Strong leadership position • $506m revenues • Strong gearing driv
Slide 8: ChoicePoint: Synergy Opportunities and Financial Returns
Preliminary Results 2007 ChoicePoint: Synergy Opportunities ChoicePoint: Financial Returns • Migration of full product line up to LN RIAG platform Acceleration of revenue and profit growth ! • Integration of parallel data storage centres Earnings accretive in year one ! • Elimination of public compa
Slide 9: Restructuring Programme
Preliminary Results 2007 Restructuring Programme Restructuring Programme Phase 1 Phase 2 (07-09) (08-10) • Opportunity driven by more cohesive portfolio IT Infrastructure Production Data Hosting Customer Service • Targeted at accelerating margin progress Procurement Finance and Administration Real E
Slide 10: Restructuring Programme; Reed Elsevier Conclusions
Preliminary Results 2007 Restructuring Programme Reed Elsevier Conclusions £m (pre tax) 2008 2009 2010 2011 Total Good momentum and progress on core business Restructuring charges (e) (140) - - - (140) Net cost savings (e) 15 50 80 100 245 Online solutions gaining traction, driving growth • Savings
Slide 11: ChoicePoint: Insurance
Preliminary Results 2007 ChoicePoint: Insurance • Revenue growth of >10% for >10 years; margins > 50% delivering >80% of continuing business profit • CLUE claims database for P&C underwriting – Most comprehensive, “must have” claims database; contributed by major US P&C carriers for >20 years – Link
Slide 12: ChoicePoint: Insurance; Screening & Authentication
Preliminary Results 2007 ChoicePoint: Insurance ChoicePoint: Screening & Authentication • Increased competition, online migration and risk management • Screening and authentication services for virtually all types of identity driving growth in current offerings based screening • Significant market o
Slide 13: ChoicePoint: Business Services; Integration
Preliminary Results 2007 ChoicePoint: Business Services ChoicePoint: Integration • Complementary to LN RIAG’s existing operations - LN RIAG: historical revenue growth >10%; margins >30% • Provision of public records data and related analysis in – Financial, legal and collections sectors • Combine wi
Slide 14: Significant Synergy Potential; Conclusions
Preliminary Results 2007 Significant Synergy Potential Conclusions • Integration of public records data centres • Migration to LN RIAG’s technology platform: Proprietary insurance assets underpin high growth, high margin – Faster more accurate answer sets business – More efficient operating systems
Slide 15: 2007 Financial Performance
Preliminary Results 2007 2007 Financial Performance Continuing Operations: Revenue +6%; Adjusted operating profit +11% • Good revenue and profit performance across the business • Operating margin up 0.8% pts (+1.0% pts underlying) • 97% cash flow conversion • 11.8% post tax return on invested capita
Slide 16: Adjusted Profit and Loss; Revenue
Preliminary Results 2007 Adjusted Profit and Loss: Revenue: Continuing Operations Continuing Operations 2007 2006 % change 12 months to % change constant 12 months to 31 December £m £m constant 31 December 07 total underlying £m Revenue 4,584 4,509 +6% Elsevier +4% +6% Adjusted operating profit 1,13
Slide 17: Adjusted Operating Profit; Elsevier
Preliminary Results 2007 Adjusted Operating Profit: Elsevier Continuing Operations 12 months to % change constant 2007 2006 % change 12 months to 31 December £m £m constant £m 31 December 07 total underlying Revenue 1,507 1,521 +4% Elsevier +9% +10% Adjusted operating profit 477 465 +9% 260 Adjusted
Slide 18: LexisNexis and Reed Business
Preliminary Results 2007 LexisNexis Reed Business 2007 2006 % change 2007 2006 % change 12 months to 31 December £m £m constant 12 months to 31 December £m £m constant Revenue 1,594 1,570 +8% Revenue 1,483 1,418 +7% Adjusted operating profit 406 380 +14% Adjusted operating profit 260 241 +10% Adjust
Slide 19: Adjusted Operating Cashflow; Free Cashflow
Preliminary Results 2007 Adjusted Operating Cashflow: Free Cashflow Continuing Operations 2007 2006 2007 2006 £m £m % change 12 months to 31 December £m £m Adjusted operating cashflow 1,108 1,086 +2% Adjusted operating profit 1,137 1,081 Interest and tax paid (391) (330) +18% Capital expenditure (14
Slide 20: Sale of Harcourt Education; Adjusted Earnings and Dividends
Preliminary Results 2007 Sale of Harcourt Education and Adjusted Earnings and Dividends: Return of Capital Total Operations % Reed Elsevier Reed Elsevier change • Sale now completed (mostly 2007, Harcourt Assessment in PLC NV constant January 2008) • Total proceeds of $4.95bn: 3.0x 2006 revenue; 20.
Slide 21: Acquisition of ChoicePoint; Balance Sheet
Preliminary Results 2007 Acquisition of ChoicePoint Balance Sheet • Definitive merger agreement signed • Focus on capital efficiency – Subject to ChoicePoint shareholder approval and regulatory approvals – Tight management of working capital; strong cash generation – Unanimous support and recommenda
Slide 22: Appendices: Financial Information in Euros
Preliminary Results 2007 Appendices Financial Information in Euros
Slide 23: Revenue and Adjusted Operating Profit; Adjusted Profit and Loss
Preliminary Results 2007 Revenue and Adjusted Operating Profit: Adjusted Profit and Loss: Continuing Operations Continuing Operations % Revenue: €m Profit: €m 2007 2006 2007 2006 change 12 months to 31 December £m £m €m €m constant Revenue 4,584 4,509 6,693 6,628 +6% Adjusted operating profit 1,137
Slide 24: Elsevier and LexisNexis
Preliminary Results 2007 Elsevier LexisNexis 2007 2006 2007 2006 % change 2007 2006 2007 2006 % change 12 months to 31 December £m £m €m €m constant 12 months to 31 December £m £m €m €m constant Revenue 1,507 1,521 2,200 2,236 +4% Revenue 1,594 1,570 2,328 2,308 +8% Adjusted operating profit 477 465
Slide 25: Reed Business; Adjusted Operating Cashflow
Preliminary Results 2007 Adjusted Operating Cashflow: Reed Business Continuing Operations 2007 2006 2007 2006 % change 2007 2006 2007 2006 12 months to 31 December £m £m €m €m constant 12 months to 31 December £m £m €m €m Revenue 1,483 1,418 2,165 2,084 +7% Adjusted operating profit 1,137 1,081 1,66
Slide 26: Reported Profit Attributable; Free Cashflow
Preliminary Results 2007 Reported Profit Attributable: Free Cashflow Continuing Operations % % 2007 2006 2007 2006 2007 2006 2007 2006 12 months to 31 December change change £m £m €m €m £m £m €m €m £ € Adjusted profit before tax 998 923 1,457 1,356 Adjusted operating cashflow 1,108 1,086 1,618 1,596
Slide 27: ChoicePoint: Financial Summary
Preliminary Results 2007 ChoicePoint: Financial Summary Operating Principal businesses: Revenues income* Margin Year to 31 December 2007 $m $m % Insurance Services 506 258 51% Screening and Authentication Services 253 47 18% Business Services 142 7 5% Marketing Services / Other 81 2 3% Corporate exp
Slide 28: Revenue and Adjusted Profit Before Tax Reconciliation
Preliminary Results 2007 Revenue : Continuing Operations Adjusted Profit Before Tax: Reconciliation Continuing Operations Reconciliation % % % % 12 months to 31 December 12 months to 31 December £m change €m change £m change €m change 2006 Revenue 4,509 6,628 2006 Adjusted profit before tax 923 1,35
Slide 29: Reported Profit Attributable; Elsevier Growth and Currency Analysis
Preliminary Results 2007 Reported Profit Attributable: Elsevier Growth and Currency Analysis Continuing Operations 2007 2006 Year on 12 months to 31 December Acquisitions/ Constant year change Other £m £m Organic Disposals currency in hedge currency Total Adjusted profit before tax 998 923 rates Amo
Slide 30: Currency Profile; Balance Sheet
Preliminary Results 2007 Currency Profile Balance Sheet 2007 2006 2007 2006 Average rates for year: £m £m €m €m £ 2007 2006 Goodwill & intangible assets 4,551 5,326 6,189 7,936 Adjusted profit before tax US dollar 2.00 1.84 Tangible fixed assets 298 325 444 239 Euro 1.46 1.47 Investments & net asset
Slide 31: Debt Ratios; Return on Invested Capital
Preliminary Results 2007 Return on Invested Capital: Debt Ratios Acquisitions 2005-2007 2007* 2006 2007 Revenue post-tax All Acquisitions CAGR* return Funds from operations / net debt 31% 32% Including: Retained cashflow / net debt 17% 21% 2005 MediMedia MAP, PC Law, Univentio, Examen 9% 10% Net deb
Slide 32: Return on Invested Capital
Preliminary Results 2007 Return on Invested Capital: Return on Invested Capital Reed Elsevier continuing (post tax) 2007 2006 11.8% £m £m 12% 11.0% Adjusted operating profit 1,137 1,081 11% Less tax at effective rate (261) (252) 10.2% 10% 9.4% 876 829 9% Capital employed 4,638 4,125 8% WACC Cumulati
Slide 33: Dividend Equalisation; Shares Outstanding
Preliminary Results 2007 Dividend Equalisation Shares Outstanding Interim Final Post 7 January 2008 Share Consolidation: % % (effective 18 January 2008 for EPS calculation purposes) 2007 2006 change 2007 2006 change Reed Elsevier PLC (p) 4.50 4.10 +10% 13.6 11.8 +15% Reed Elsevier PLC Reed Elsevier
Slide 34: Information for US Institutions
Preliminary Results 2007 Information for US Institutions • Reed Elsevier PLC ADR (ticker: RUK) and Reed Elsevier NV ADR (ticker: ENL) traded on NYSE This presentation contains forward-looking statements within the meaning of Section 27A of the US Securities Act 1933, as amended, and Section 21E of •