Relx Plc · LSE:REL
Relx — FY2015 Earnings Presentation
31 slides from Relx's earnings presentation, February 2016
Slide 1: RELX Group Results 2015
RELX Group Results 2015 Erik Engstrom, CEO Nick Luff, CFO 2 1
Slide 2: Forward-looking statements
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. These statements are subject to a number of risks and uncertainties
Slide 3: Erik Engstrom, CEO
Erik Engstrom, CEO G.RELX Group G.RELX Group
Slide 4: RELX Group 2015 progress; 2015 financial highlights
RELX Group 2015 progress • Continued positive financial performance – Underlying revenue and operating profit growth across all four business areas • Further strategic and operational progress – Organic development remains number one priority 7 2015 financial highlights • Underlying revenue growth +
Slide 5: Financial performance
Financial performance Underlying revenue growth* Underlying adjusted operating profit growth +6% +5% +5% +5% +5% +3% +3% +3% +3% +3% 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 * excluding exhibition cycling effects Earnings per share growth Return on invested capital Constant currency 12.8% 1
Slide 6: Scientific, Technical & Medical; Risk & Business Analytics
Scientific, Technical & Medical Underlying growth Revenue (76% electronic) • Key business trends remained positive • Strong growth in usage and article submissions to primary research subscription journals continued +2% +2% • Good growth in databases & tools, and in electronic reference across segme
Slide 7: Legal; Exhibitions
Legal Underlying growth Revenue (79% electronic) • Underlying revenue growth trends unchanged • Good growth in electronic revenues, partly offset by print declines +1% +1% • US and European markets remained stable but subdued; other international markets continued to see 2014 2015 good growth Adjust
Slide 8: 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 9: Portfolio reshaping; Strategic cash priorities
Portfolio reshaping 2015: Strategy consistent Selective acquisitions: Focused on data sets, analytics and high growth markets • 19 acquisitions completed; total consideration £171m • Including Bair Analytics, First4Farming, Korbitec, Lex Machina, Jewelers International Showcase Selective disposals o
Slide 10: Nick Luff, CFO: 2015 financial highlights
Nick Luff, CFO 19 2015 financial highlights • Underlying revenue growth +3% • Underlying adjusted operating profit growth +5% • Adjusted profit before tax growth at constant currencies +6% • Adjusted EPS growth at constant currencies +8% • Cash flow conversion 94% • Return on invested capital 12.7%
Slide 11: Simplification of corporate structure; Income statement (£)
Simplification of corporate structure RELX Group RELX RELX • Creation of combined operating entity PLC NV • Elimination of cross-holding 52.9% 47.1% • All 4 share listings now 1:1 equivalent • Move to consolidated accounts • Elimination of tax credit on UK RELX Group plc dividends 21 Income statemen
Slide 12: Income statement (€); Dividend per share equalisation
Income statement (€) change 2014 2015 constant change Year to 31 December €m €m change currency underlying Revenue 7,159 8,240 +15% +2% +3% Adjusted operating profit 2,156 2,514 +17% +5% +5% Adjusted operating margin 30.1% 30.5% Adjusted net interest expense (182) (211) Adjusted profit before tax 1,
Slide 13: Revenue; Adjusted operating profit
Revenue Underlying growth in all business areas change change 2014 2015 reported constant change Year to 31 December £m £m sterling currency underlying Scientific, Technical & Medical 2,048 2,070 +1% +2% +2% Risk & Business Analytics 1,439 1,601 +11% +6% +7% Legal 1,396 1,443 +3% +1% +1% Exhibitions
Slide 14: Adjusted operating margin; Currency profile
Adjusted operating margin 2014 2015 Year to 31 December % % Scientific, Technical & Medical 37.2% 36.7% Risk & Business Analytics 35.2% 35.9% Legal 18.6% 19.0% Exhibitions 24.4% 25.3% RELX Group 30.1% 30.5% 27 Currency profile 2015 Revenue by geographic market Rest of World 20% North Rest of America
Slide 15: Balance sheet; Return on invested capital
Balance sheet 31 Dec 2014 31 Dec 2015 £m £m Goodwill & acquired intangible assets 7,365 7,509 Internally developed intangible assets 780 878 Property, plant & equipment and investments 464 471 Net (liabilities)/assets held for sale (2) 6 Net pension obligations (632) (384) Working capital (1,124) (1
Slide 16: Free cash flow; Uses of free cash flow
Free cash flow 2014 2015 Year to 31 December £m £m Adjusted operating profit 1,739 1,822 Capital expenditure (270) (307) Depreciation 237 228 Working capital and other items (44) (31) Adjusted cash flow 1,662 1,712 Cash flow conversion rate 96% 94% Cash interest paid (126) (132) Cash tax paid (363)
Slide 17: Uses of cash - priorities
Uses of cash - priorities 2012 2013 2014 2015 • Organic development 333 308 307 Average: 270 Capex (£m) c5% of sales 1 2 3 4 • Acquisitions 385 Average: 313 Total consideration (£m) 230 171 c£300m 1 2 3 4 565 583 549 • Dividends 521 Average dividend growth*: Total payout (£m) +9% 1 2 3 4 • Leverage
Slide 18: Summary and 2016 outlook
Erik Engstrom, CEO 35 Summary 2015 • Continued positive financial performance • Further strategic and operational progress • Simplified corporate structure 2016 Outlook • “Trends in the early part of 2016 are consistent with 2015 across our business, and we are confident that, by continuing to execu
Slide 19: Appendices Contents
Appendices 37 Contents Further information Financial information in euros 40 Revenue: year over year change 52 Revenue: year over year change 41 Adjusted operating profit: year over year change 53 Adjusted operating profit: year over year change 42 Reconciliation of net profit: adjusted to reported
Slide 20: Revenue year over year change
Further information 39 Revenue Year over year change Year to 31 December £m change 2014 Revenue 5,773 Underlying growth 166 +3% Exhibition cycling (38) -1% Acquisitions 101 +2% Disposals (95) -2% Currency effects 64 +1% 2015 Revenue 5,971 +3% 40 20
Slide 21: Adjusted operating profit; Reconciliation of operating profit
Adjusted operating profit Year over year change Year to 31 December £m change 2014 Adjusted operating profit 1,739 Underlying growth 90 +5% Acquisitions 14 +1% Disposals (14) -1% Currency effects (7) 0% 2015 Adjusted operating profit 1,822 +5% 41 Reconciliation of operating profit Adjusted to report
Slide 22: Capital expenditure and depreciation by business area
Capital expenditure by business area 2014 2015 % of % of Year to 31 December £m revenues £m revenues Scientific, Technical & Medical 56 3% 74 4% Risk & Business Analytics 49 3% 56 4% Legal 142 10% 150 10% Exhibitions 23 3% 27 3% Total capital expenditure 270 4.7% 307 5.1% 43 Depreciation by business
Slide 23: 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 FY 2015 Revenue +2% 0% +2% -1% 0% -1% +1% Adjusted operating profit +3% +1% +4% -2% -2% -4% 0% Adjusted operating margi
Slide 24: Term debt maturities; Debt profile
Term debt maturities At 31 December 2015 $m 1,000 800 600 993 400 857 842 819 589 598 482 200 150 207 - 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 >2026 Term debt translated at 31 December 2015 exchange rates, stated at par value 47 Debt profile Debt as at 31 December 2015: Gross debt: $
Slide 25: Summary of other financial matters; Dividends per share
Summary of other financial matters At At 31 31 December December Average Average 2014 2015 2014 2015 £:$ 1.56 1.47 1.65 1.53 FX rates £:€ 1.29 1.36 1.24 1.38 RELX PLC: 1,128m 1,107m 1,140m 1,116m Shares RELX NV*: 1,000m 985m 1,014m 992m outstanding Total: 2,128m 2,092m 2,154m 2,109m * Adjusted for t
Slide 26: Financial information in euros: Revenue
Financial information in euros 51 Revenue Year over year change Year to 31 December €m change 2014 Revenue 7,159 Underlying growth 206 +3% Exhibition cycling (47) -1% Acquisitions 124 +2% Disposals (118) -2% Currency effects 916 +13% 2015 Revenue 8,240 +15% 52 26
Slide 27: Adjusted operating profit; Revenue (euros)
Adjusted operating profit Year over year change Year to 31 December €m change 2014 Adjusted operating profit 2,156 Underlying growth 112 +5% Acquisitions 17 +1% Disposals (17) -1% Currency effects 246 +12% 2015 Adjusted operating profit 2,514 +17% 53 Revenue Underlying growth in all business areas c
Slide 28: Adjusted operating profit; Free cash flow (euros)
Adjusted operating profit Underlying growth in all business areas change change 2014 2015 reported constant change Year to 31 December €m €m euros currency underlying Scientific, Technical & Medical 945 1,049 +11% +4% +3% Risk & Business Analytics 627 794 +27% +7% +7% Legal 322 378 +17% +5% +7% Exhi
Slide 29: Uses of free cash flow; Reconciliation of operating profit
Uses of free cash flow 2014 2015 Year to 31 December €m €m Free cash flow 1,433 1,638 Disposals: total consideration 92 101 Acquisitions: total consideration (477) (236) Dividends (701) (805) Share buybacks (744) (690) Other* (98) (164) Currency translation (398) (409) Movement in net debt (893) (56
Slide 30: Capital expenditure and depreciation by business area (euros)
Capital expenditure by business area 2014 2015 % of % of Year to 31 December €m revenues €m revenues Scientific, Technical & Medical 69 3% 102 4% Risk & Business Analytics 61 3% 78 4% Legal 176 10% 206 10% Exhibitions 29 3% 38 3% Total capital expenditure 335 4.7% 424 5.1% 59 Depreciation by busines
Slide 31: STM growth and currency analysis; Balance sheet (euros)
Scientific, Technical & Medical Growth and currency analysis € Period Acquisitions/ Constant change in Other Total Underlying disposals currency hedge rates currency currency Total FY 2015 Revenue +2% 0% +2% -1% +11% +10% +12% Adjusted operating profit +3% +1% +4% -2% +9% +7% +11% Adjusted operating