Relx PLC · LSE:REL
Relx — FY2019 Earnings Presentation
22 slides from Relx's earnings presentation, Feb 13, 2020
Slide 1: Results 2019
Results 2019 Erik Engstrom, CEO, and Nick Luff, CFO 13 February 2020 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
Slide 2: RELX 2019 progress
Erik Engstrom, CEO 3 RELX 2019 progress • Positive financial performance – Underlying revenue growth across all four business areas – Underlying profit growth ahead of underlying revenue growth • Further strategic and operational progress – Further organic development of analytics and decision tools
Slide 3: 2019 financial highlights
2019 financial highlights • Underlying revenue growth +4% • Underlying adjusted operating profit growth +5% • Adjusted EPS growth at constant currencies +7% • Full year dividend growth +9% 5 Underlying revenue and adjusted operating profit Underlying revenue growth Underlying adjusted operating prof
Slide 4: Scientific, Technical & Medical; Risk & Business Analytics
Scientific, Technical & Medical Underlying growth Revenue • Key business trends remained positive; underlying revenue growth in line with prior year • Good growth in electronic revenues partially offset by print declines +2% +2% • Primary research customer value enhancement: broader content sets; mo
Slide 5: Legal; Exhibitions
Legal Underlying growth Revenue • Underlying revenue growth in line with prior year • Margin increase reflects ongoing process improvement as platform transition comes to an end +2% +2% • Continued growth in electronic revenues partially offset by print declines; legal 2018 2019 market environment s
Slide 6: Strategic direction: Organic growth and portfolio reshaping
Strategic direction : Organic growth Number one strategic priority: The organic development of increasingly sophisticated information-based analytics and decision tools that deliver enhanced value to our customers • Deep customer understanding • Better customer decisions • Leading content and data s
Slide 7: Strategic direction: Corporate responsibility and sustainability
Strategic direction: Corporate responsibility and sustainability Core corporate External recognition Unique contributions responsibilities ― examples • Universal sustainable access to information • Governance ― Research4Life • 2nd in S&P 1200 • Advance of science and health • People (CSRHub) ― Coron
Slide 8: 2019 financial highlights
Nick Luff, CFO 15 2019 financial highlights Income statement highlights • Underlying revenue growth +4% • Underlying adjusted operating profit growth ahead of revenue growth +5% • Adjusted operating profit margin 30 basis points higher 31.6% • Adjusted EPS growth at constant currencies +7% Cash flow
Slide 9: Revenue and adjusted operating profit
Revenue change 2018 2019 constant change Year to 31 December £m £m change currency underlying Scientific, Technical & Medical 2,538 2,637 +4% +1% +2% Risk & Business Analytics 2,117 2,316 +9% +5% +7% Legal 1,618 1,652 +2% -1% +2% Exhibitions 1,219 1,269 +4% +2%* +6% RELX 7,492 7,874 +5% +2% +4% *inc
Slide 10: Adjusted operating margin; Income statement
Adjusted operating margin Year to 31 December 2018 2019 Scientific, Technical & Medical 37.1% 37.2% Risk & Business Analytics 36.7% 36.8% Legal 19.8% 20.0% Exhibitions 25.7% 26.1% RELX 31.3% 31.6% 19 Income statement change 2018 2019 constant change Year to 31 December £m £m change currency underlyi
Slide 11: Return on invested capital; Free cash flow
Return on invested capital 2018 2019 Year to 31 December £m £m Adjusted operating profit 2,346 2,491 Tax at effective rate (509) (438) Effective tax rate 21.7% 17.6% Adjusted operating profit after tax 1,837 2,053 Average invested capital (at average FX rates) 13,924 15,050 Return on invested capita
Slide 12: Uses of free cash flow; Uses of cash - priorities
Uses of free cash flow 2018 2019 Year to 31 December £m £m Free cash flow 1,593 1,700 Disposals: total consideration 45 63 Acquisitions: total consideration (978) (416) Dividends (796) (842) Share buybacks (700) (600) Other* (53) (190) Currency translation (246) 271 Movement in net debt (1,135) (14)
Slide 13: Corporate responsibility and sustainability performance; Modelling considerations
Corporate responsibility and sustainability performance People Community Socially responsible suppliers (SRS) Percentage of female senior operational Percentage of staff volunteering (%) Percentage signing supplier code of conduct managers 89% 91% 42% 45% 28% 33% 2018 2019 2018 2019 2018 2019 Energy
Slide 14: Summary and 2020 outlook
Erik Engstrom, CEO 27 Summary 2019 • Positive financial performance • Further strategic and operational progress 2020 outlook Key business trends in the early part of 2020 are consistent with recent years, and we remain confident that, by continuing to execute on our strategy, we will deliver anothe
Slide 15: Appendices; RELX revenue by category
Appendices 30 RELX revenue by category 31 STM: revenue split 32 R&BA: revenue split 33 Legal: revenue split 34 Exhibitions: revenue split 35 STM: growth and currency analysis 36 R&BA: underlying revenue growth 37 Legal: revenue, profit and margin progression 38 Exhibitions: cycling impact 39 Reconci
Slide 16: STM and R&BA revenue splits
Scientific, Technical & Medical 2019 revenue £2,637m Format Geography Type Advertising Print 2% Rest of world North Transactional 16% 31% America 23% 45% Electronic Europe Subscription 84% 24% 75% 31 Risk & Business Analytics 2019 revenue £2,316m Format Geography Type Face-to-face Print Rest of worl
Slide 17: Legal and Exhibitions revenue splits
Legal 2019 revenue £1,652m Format Geography Type Print Rest of world 12% Transactional 15% 22% Europe 21% Electronic Subscription North America 85% 78% 67% 33 Exhibitions 2019 revenue £1,269m Format Geography Source Electronic Admissions 4% Rest of world North America & other 40% 20% 28% Face-to-fac
Slide 18: STM growth and currency analysis; R&BA underlying revenue growth
Scientific, Technical & Medical Growth and currency analysis Constant Period change in Other Underlying Portfolio changes currency hedge rates currency Total currency Total FY 2019 Revenue +2% -1% +1% +1% +2% +3% +4% Adjusted operating profit +3% -1% +2% +1% +1% +2% +4% Adjusted operating margin +0.
Slide 19: Legal progression; Exhibitions cycling impact
Legal revenue, profit and margin progression Revenue growth Adjusted operating profit growth Margin Constant Constant Underlying currency Reported Underlying currency Reported 2019 +2% -1% +2% +8% +1% +3% 20.0% 2018 +2% -1% -4% +10% 0% -2% 19.8% 2017 +2% -1% +4% +11% +1% +7% 19.6% 2016 +2% +2% +12%
Slide 20: Reconciliation of operating profit; Balance sheet
Reconciliation of operating profit Adjusted to reported 2018 2019 Year to 31 December £m £m change Adjusted operating profit 2,346 2,491 +6% Adjustments: Amortisation of acquired intangible assets (288) (295) Acquisition related costs (84) (84) Reclassification of tax in joint ventures (11) (12) Rec
Slide 21: Capital expenditure and depreciation by business area
Capital expenditure by business area 2018 2019 Year to 31 December £m % of revenue £m % of revenue Scientific, Technical & Medical 100 4% 104 4% Risk & Business Analytics 87 4% 96 4% Legal 145 9% 154 9% Exhibitions 30 2% 26 2% Total capital expenditure 362 4.8% 380 4.8% 41 Depreciation by business a
Slide 22: Currency profile; Exchange rates and shares outstanding
Currency profile Revenue by geographic market 2019 Rest of • Revenue by currency broadly matches geographic split world 21% • Hedging smooths volatility in sterling reported results UK North 7% America 56% • Exchange rates impact on FY 2019 sterling adjusted EPS Rest of growth positive relative to c