Relx Plc · LSE:REL
Relx — H1 2017 Earnings Presentation
22 slides from Relx's earnings presentation, July 2017
Slide 1: RELX Group interim results 2017
RELX Group interim results 2017 Erik Engstrom, CEO Nick Luff, CFO 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 1934, as amended. Th
Slide 2: RELX Group H1 2017 progress
Erik Engstrom, CEO 3 RELX Group H1 2017 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 – Improvement in business profile – Organic developm
Slide 3: H1 2017 financial highlights
H1 2017 financial highlights • Underlying revenue growth +4% • Underlying adjusted operating profit growth +5% • Adjusted EPS growth at constant currencies +8% 5 Underlying revenue and adjusted operating profit Underlying revenue growth Underlying adjusted operating profit growth H1 2017 H1 2017 +6%
Slide 4: Scientific, Technical & Medical; Risk & Business Analytics
Scientific, Technical & Medical Underlying growth Revenue • Key business trends remained positive • Primary research value enhancement: content sets; analytics; technology platforms +2% +2% • Good growth in databases & tools; electronic reference products H1 2016 H1 2017 • Print book declines in lin
Slide 5: Legal and Exhibitions
Legal Underlying growth Revenue • Underlying revenue growth in line with prior year • Continued growth in electronic revenues partially offset by print declines +2% +2% • Roll out of new platform releases continued; broader datasets and expansion of early stage legal analytics H1 2016 H1 2017 Adjust
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: H1 2017 financial highlights
Nick Luff, CFO 13 H1 2017 financial highlights Income statement highlights • Underlying revenue growth +4% • Underlying adjusted operating profit growth ahead of revenue growth +5% • Adjusted operating profit margin 20 basis points higher 31.0% • Adjusted EPS growth at constant currencies +8% Cash f
Slide 8: Income statement and earnings per share
Income statement change 2016 2017 constant change 6 months to 30 June £m £m change currency underlying Revenue 3,257 3,718 +14% +3% +4% Adjusted operating profit 1,003 1,154 +15% +4% +5% Adjusted operating margin 30.8% 31.0% Adjusted net interest expense (83) (87) Adjusted profit before tax 920 1,06
Slide 9: Dividends per share and revenue
Dividends per share Exchange PLC rate NV Interim dividend 2017 11.70p x €1.13/£ €0.132 Growth +14% +8% • Full year dividend policy unchanged. Continue to grow dividends broadly in line with adjusted earnings per share, subject to exchange rate considerations, while maintaining cover of at least two
Slide 10: Adjusted operating profit and margin
Adjusted operating profit Underlying growth in all business areas change 2016 2017 constant change 6 months to 30 June £m £m change currency underlying Scientific, Technical & Medical 374 414 +11% +2% +4% Risk & Business Analytics 327 394 +20% +8% +8% Legal 131 150 +15% 0% +9% Exhibitions 178 203 +1
Slide 11: Currency profile and free cash flow
Currency profile Revenue by geographic market H1 2017 • Revenue by currency broadly matches Rest of geographic split World 21% • Hedging smooths volatility in sterling and euro reported results North Rest of America Europe 56% • At current exchange rates impact on FY 16% 2017 adjusted EPS growth pos
Slide 12: Uses of free cash flow
Uses of free cash flow 2016 2017 6 months to 30 June £m £m Free cash flow 587 722 Disposals: total consideration 7 21 Acquisitions: total consideration (33) (15) Dividends (464) (523) Share buybacks (502) (500) Other* (54) (41) Currency translation (331) 16 Movement in net debt (790) (320) Net debt
Slide 13: Summary and 2017 outlook
Erik Engstrom, CEO 25 Summary H1 2017 • Continued positive financial performance • Further strategic and operational progress 2017 Outlook As we enter the second half of 2017, key business trends are unchanged, and we are confident that, by continuing to execute on our strategy, we will deliver anot
Slide 14: Appendices contents
Appendices 27 Contents Further information Financial information in euros 30 Reconciliation of operating profit 37 Income statement 31 STM growth and currency analysis 38 Revenue by business area 32 Exhibitions: cycling impact 39 Adjusted operating profit by business area 33 Debt profile 40 Free cas
Slide 15: Reconciliation of operating profit
Further information 29 Reconciliation of operating profit Adjusted to reported 2016 2017 6 months to 30 June £m £m change Adjusted operating profit 1,003 1,154 +15% Adjustments: Amortisation of acquired intangible assets (159) (181) Acquisition related costs (16) (18) Reclassification of tax in join
Slide 16: STM growth and currency analysis; Exhibitions cycling impact
Scientific, Technical & Medical Growth and currency analysis £ Period Acquisitions/ Constant change in Other Total Underlying disposals currency hedge rates currency currency Total H1 2017 Revenue +2% -1% +1% 0% +10% +10% +11% Adjusted operating profit +4% -2% +2% 0% +9% +9% +11% Adjusted operating
Slide 17: Debt profile; exchange rates and shares outstanding
Debt profile Debt as at 30 June 2017: Gross debt: $6.7bn (£5.2bn); Net debt: $6.5bn (£5.0bn) Maturity Currency <1 Other year 1-3 US >5 years Dollar Euro years 3-5 years Sterling • HY 2017 interest rate on gross debt of 3.4% (FY 2016: 3.8%) 33 Exchange rates and shares outstanding At 31 Dec At 30 Jun
Slide 18: Balance sheet
Balance sheet 30 June 2016 31 Dec 2016 30 June 2017 £m £m £m Goodwill & acquired intangible assets 8,188 8,911 8,336 Internally developed intangible assets 1,003 1,085 1,106 Property, plant & equipment and investments 490 481 454 Net assets held for sale 10 1 57 Net pension obligations (601) (636) (
Slide 19: Income statement and revenue in euros
Income statement change 2016 2017 constant change 6 months to 30 June €m €m change currency underlying Revenue 4,169 4,313 +3% +3% +4% Adjusted operating profit 1,284 1,339 +4% +4% +5% Adjusted operating margin 30.8% 31.0% Adjusted net interest expense (106) (101) Adjusted profit before tax 1,178 1,
Slide 20: Adjusted operating profit and free cash flow in euros
Adjusted operating profit Underlying growth in all business areas change 2016 2017 constant change 6 months to 30 June €m €m change currency underlying Scientific, Technical & Medical 479 480 0% +2% +4% Risk & Business Analytics 418 457 +9% +8% +8% Legal 168 174 +4% 0% +9% Exhibitions 228 236 +4% +1
Slide 21: Uses of free cash flow; reconciliation in euros
Uses of free cash flow 2016 2017 6 months to 30 June €m €m Free cash flow 752 837 Disposals: total consideration 9 24 Acquisitions: total consideration (42) (17) Dividends (594) (607) Share buybacks (643) (580) Other* (70) (47) Currency translation 246 166 Movement in net debt (342) (224) Net debt a
Slide 22: STM growth analysis and balance sheet in euros
Scientific, Technical & Medical Growth and currency analysis € Period Acquisitions/ Constant change in Other Total Underlying disposals currency hedge rates currency currency Total H1 2017 Revenue +2% -1% +1% 0% -1% -1% 0% Adjusted operating profit +4% -2% +2% 0% -2% -2% 0% Adjusted operating margin