Relx Plc · LSE:REL
Relx — Reed Elsevier — H1 2007 Earnings Presentation
46 slides from Relx's earnings presentation, 2007
Slide 1: Reed Elsevier Interim Results 2007
&ee( )lse,ier .nteri1 &esults 2007 !i Cris6in !ir C i i %a,is % i a :r1our 8ar9 ou
Slide 2: 2007 Interim Results: Highlights
2007 .nteri1 &esults< =ig?lig?ts @oo( 1o1entu1 across t?e Businesses @roCing i16act oD Online !olutionsF %igital re,enues u6 12%F noC 45% oD re,enues Kir1 6rogress on 6lans to (ri,e Durt?er cost eDDiciencies =arcourt )(ucation sale on ,ery goo( ter1s 2007< On trac9 Dor 1ini1u1 oD 10% )M! groCt? groC
Slide 3: Focused Strategy
Kocuse( !trategy %eli,er aut?oritati,e content t?roug? lea(ing Bran(s %ri,e online solutions .16ro,e cost eDDiciency O6gra(e 6ortDolio 3
Slide 4: Deliver Authoritative Content Through Leading Brands
%eli,er :ut?oritati,e Content T?roug? Rea(ing Sran(s %e,elo61ents to (ate in 2007 Seilstein Rea(ing (ataBase oD 65% oD Uournals increase( Srea(t? an( (e6t? oD content c?e1ical co16oun(s i16act Dactors eW6an(e( acVuire( Rancet an( Cell Ci(ene( lea( X Yor9 XeC Y 9 online li DDor1s XeC [ersey s6eciDic
Slide 5: Drive Online Solutions
%ri,e Online !olutions %e,elo61ents to (ate in 2007 &elaunc?e( Cit? .ntegrate( Cit? clinical 500 eBoo9s a((e(] :((itional 1o(ules to en?ance( (iagnostic tools an( 56 titles Dro1 T?e eWten( reac? oD Dunctionality an( Cor9DloC a66lications Clinics series 6roDessional (e,elo61ent ease oD use online sol
Slide 6: Drive Online Solutions: Digital revenues
%ri,e Online !olutions %igital re,enues u6 12%F noC 45% oD re,enues %igital re,enues< )Wcee( ^4 Billion in 2007 ^Bn ^ ^Bn 11 1.1 15 1.5 18 1.8 21 2.1 24 2.4 28 2.8 33 3.3 37 3.7 `4 0 `4.0 1999 2000 2001 2002 2003 2004 2005 2006 2007) 6
Slide 7: Improve Cost Efficiency
.16ro,e Cost )DDiciency • Consoli(ation C li( ti oDD ((ata t centres t an(( .T su66ortt un(erCay ( • XeC C?ieD Tec?nology ODDicer a66ointe( • Suil( stronger outsourcing ca6aBilities • C?ieD Outsourcing an( ODDs?oring ODDicer a66ointe( • 8o,e Dro1 coor(inate( to centralise( 6urc?asing • C?ieD Mrocure
Slide 8: Upgrade Portfolio
O6gra(e MortDolio Suil( synergy an( co?esi,eness Kocus on attracti,e Dast groCt? sectors Kinancial (isci6line ,s. estaBlis?e( criteria 8
Slide 9: Upgrade Portfolio
O6gra(e MortDolio !ale oD =arcourt )(ucation agree( g :cVuisitions Buil(ing content] solutions] gloBal Doot6rint !cT • Beilstein dc?e1ical co16oun(s (ataBaseeF solutions to 6?ar1a-Biotec? 1ar9et Regal • Juris dO! legal ti1e an( BillingeF eW6an( Total Mractice !olutions !olutions in 1i( sife laC Dir1
Slide 10: Upgrade Portfolio: Acquisition Performance 2004-2006
O6gra(e MortDolio :cVuisition MerDor1ance< 2004-2006 2006 2007) &e,enue 6ost-taW 6ost-taW :ll :cVuisitions C:@&N C:@& return return .nclu(ing< 2004 !eisint] !eisint !aWon] !aWon .nterDace .nterDace] Or(inate 18% 10% 12% 2005 8e(i8e(ia 8:M] 8:M MC RaC] RaC Oni,entio] Oni,entio 7% 6% 8% )Wa1en 2006 @o
Slide 11: Reed Elsevier
&ee( )lse,ier 8ar9et en,iron1ent 66ositi,e 8ore co?esi,e Business Consistent Docuse( strategy @oo( Business 1o1entu1 !igniDicant online o66ortunity 8ini1u1 10% )M! groCt? targete(N * Adjusted eps growth at constant currencies 11
Slide 12: Mark Armour, Chief Financial Officer
8ar9 :r1our C?ieD Kinancial ODDicer
Slide 13: 2007 First Half Performance
2007 Kirst =alD MerDor1ance Continuing O6erations< &e,enue +6%F 6%F :(Uuste( o6erating 6roDit +10% 10% • @oo( re,enue an( 6roDit 6erDor1ance across Business • @oo( suBscri6tion reneCals an( (e1an( Dor online solutions • RoCer =1 contriBution Dro1 Biennial eW?iBitionsF largely re,erses in =2 • O6erat
Slide 14: Adjusted Profit and Loss: Continuing Operations
:(Uuste( MroDit an( Ross Continuing O6erations 2007 2006 % c?ange ? 6 1ont?s to 30 [une j1 j1 constant &e,enue 2 235 2]235 2 237 2]237 +6% :(Uuste( o6erating 6roDit 530 513 +10% :(Uuste( o6erating 1argin 23.7% 22.9% Xet interest eW6ense d70e d77e :(Uuste( 6roDit BeDore taW 460 436 +12% Adjusted figu
Slide 15: Revenue: Continuing Operations
&e,enue< Continuing O6erations 6 1ont?s to % c?ange constant j1 30 [une total un(erlying )lse,ier +4% +5% 711 ReWisXeWis +8% +6% 760 &ee( Susiness +6% +6% 764 Continuing + 6% +6% Susinesses 15
Slide 16: Adjusted Operating Profit: Continuing Operations
:(Uuste( O6erating MroDit< Continuing O6erations 6 1ont?s to % c?ange constant j1 30 [une total un(erlying )lse,ier +10% +9% ReWisXeWis +13% +11% 155 201 &ee( Susiness +7% +4% 176 Continuing +10% +9% Susinesses 16
Slide 17: Elsevier
)lse,ier 2007 2006 % c?ange 6 1ont?s to 30 [une j1 j1 constant &e,enue 711 721 +4% :(Uuste( o6erating 6roDit 201 196 +10% :(Uuste( o6erating 1argin 28% 27% ! On(erlying< re,enues u6 5%F a(Uuste( o6erating 6roDits u6 9% ! !trong suBscri6tion reneCals] groCing online salesF goo( groCt? eW6ecte( Dro1 =
Slide 18: LexisNexis
ReWisXeWis 2007 2006 % c?ange 6 1ont?s to 30 [une j1 j1 constant &e,enue 764 768 +8% :(Uuste( o6erating 6roDit 176 169 +13% :(Uuste( o6erating 1argin 23% 22% ! On(erlying< re,enues u6 6%F a(Uuste( o6erating 6roDits u6 11% ! !trong !t suBscri6tion B i ti sales] l neC total t t l solutions l ti sales
Slide 19: Reed Business
&ee( Susiness 2007 2006 % c?ange 6 1ont?s to 30 [une j1 j1 constant &e,enue 760 748 +6% :(Uuste( o6erating 6roDit 155 152 +7% :(Uuste( o6erating 1argin 20% 20% )W?iBitions ! On(erlying re,enues u6 12%F 6roDits (oCn 4% reDlecting s?oC cycling ! !trong 6erDor1ance across 6ortDolio MuBlis?ing ! On(erly
Slide 20: Adjusted Operating Cash Flow: Continuing Operations
:(Uuste( O6erating Cas?DloC< Continuing O6erations 2007 2006 6 1ont?s to 30 [une j1 j1 :(Uuste( o6erating 6roDit 530 513 Ca6ital eW6en(iture d 65e d70e % %e6reciation i ti 76 73 11 3 !?are Base( !? B ( 6ay1ents t 17 24 kor9ing ca6ital an( ot?er ite1s d 79e d108e :(Uuste( o6erating cas?DloC 479 432 C
Slide 21: Free Cash Flow
Kree Cas?DloC % % 2007 2006 c?ange g c?ange g 6 1ont?s to 30 [une j1 j1 j l :(Uuste( o6erating cas?DloC 479 432 +11% +12% .nterest an( taW 6ai( d193e d167e +16% +18% Kree Cas?DloC 286 265 +8% +9% %i,i(en(s d299e d269e SuyBac9s d61e d288e !? o6tion !?are ti 6rocee(s( 156 43 :cVuisitions dnet oD (is6o
Slide 22: Harcourt Divestment
=arcourt %i,est1ent ! !ale Dor ^950 1illion oD =arcourt :ssess1ent an( =arcourt )(ucation .nternational Businesses to Mearson g sale oD .nternational Business largely co16lete( ! !ale ! l Dor D ^4.0 ^4 0 Billion Billi oDD =arcourt = t O! !c?ools ! ? l )(ucation )( ti Businesses B i to t =oug?ton 8iD
Slide 23: Harcourt Education: Discontinued Operations
=arcourt )(ucation< %iscontinue( O6erations 2007 2006 % c?ange 6 1ont?s to 30 [une j1 j1 constant &e,enue 322 390 -10% :(Uuste( o6erating 6roDit d12e 10 :(Uuste( o6erating 1argin -4% 3% ! On(erlying y g re,enues (oCn 8% % ! earlier 6ro(uct call in 2006 ! so1e Cea9ness in su66le1ental an( o6en territ
Slide 24: Adjusted Profit and Loss: Total Operations
:(Uuste( MroDit an( Ross< Total O6erations Continuing %iscontinue( Total 6 1ont?s to 30 [une j1 j1 j1 :(Uuste( o6erating 6roDit 530 d12e 518 .nterest d70e - d70e :(Uuste( 6roDit BeDore taW 460 d12e 448 TaW dd106ee dd1ee dd107ee 8inorities d1e - d1e :(U t ( 6roDit :(Uuste( Dit attriButaBle tt iB t Bl
Slide 25: Adjusted Earnings and Dividends: Total Operations
:(Uuste( )arnings an( %i,i(en(s< Total O6erations % &ee( )lse,ier &ee( )lse,ier c?ange MRC Xh constant :(Uuste( )M! 14.36 +1% l0.32 0% +8% )Vualise( (i,i(en(s 4.56 +10% l0.114 +12% Adjusted figures are stated before amortisation of acquired intangible assets, acquisition integration costs and dispos
Slide 26: 2007 Outlook
2007 Outloo9 !Continue( Continue( 1o1entu1< goo( suBscri6tion reneCals] strong Boo9 6rogra11e] groCing online sales !Mositi,e outloo9< groCing (e1an( Dor online ser,ices an( total solutions] an( ris9 inDor1ation an( analytics !@oo( @ ( =2 groCt?<t? cycling li in i oDD Biennial Bi i l s?oCsF ? contin
Slide 27: Appendices
From print... wuto lobal Appendices GC. Reed Elsevier
Slide 28: Financial Information in Euros
Kinancial .nDor1ation in )uros
Slide 29: Revenue and Adjusted Operating Profit Continuing Operations (in Euros)
&e,enue an( :(Uuste( O6erating MroDit Continuing O6erations din )urose &e,enue< l1 MroDit< l1 1]052 229 1]125 298 1]131 260 29
Slide 30: Adjusted Profit and Loss Continuing Operations
:(Uuste( MroDit an( Ross Continuing O6erations % 2007 2006 2007 2006 c?ange 6 1ont?s to 30 [une j1 j1 l1 l1 constant &e,enue 2]235 2]237 3]308 3]266 +6% :(Uuste( o6erating 6roDit 530 513 784 749 +10% :(Uuste( o6erating 1argin 23 7% 22.9% 23.7% 22 9% 23.7% 23 7% 22.9% 22 9% Xet interest eW6ense d70e
Slide 31: Elsevier
)lse,ier 2007 2006 2007 2006 % c?ange 6 1ont?s to 30 [une j1 j1 l1 l1 constant &e,enue 711 ] 721 1]052 1]053 ] +4% :(Uuste( o6erating 6roDit 201 196 298 286 +10% :(Uuste( o6erating 28% 27% 28% 27% 1argin ! On(erlying< re,enues u6 5%F a(Uuste( o6erating 6roDits u6 9% ! !trong suBscri6tion reneCals] g
Slide 32: LexisNexis
ReWisXeWis 2007 2006 2007 2006 % c?ange 6 1ont?s to 30 [une j1 j1 l1 l1 constant &e,enue 764 ] 768 1]131 1]121 ] +8% :(Uuste( o6erating 6roDit 176 169 260 247 +13% :(Uuste( o6erating 23% 22% 23% 22% 1argin ! On(erlying< re,enues u6 6%F a(Uuste( o6erating 6roDits u6 11% ! !trong !t suBscri6tion B i t
Slide 33: Reed Business
&ee( Susiness 2007 2006 2007 2006 % c?ange 6 1ont?s to 30 [une j1 j1 l1 l1 constant &e,enue 760 ] 748 1]125 1]092 ] +6% :(Uuste( o6erating 6roDit 155 152 229 222 +7% :(Uuste( o6erating 20% 20% 20% 20% 1argin )W?iBitions ! On(erlying re,enues u6 12%F 6roDits (oCn 4% reDlecting s?oC cycling ! !trong 6
Slide 34: Harcourt Education
=arcourt )(ucation 2007 2006 2007 2006 % c?ange g 6 1ont?s to 30 [une j1 j1 l1 l1 constant &e,enue 322 390 477 569 -10% :(Uuste( o6erating 6roDit d12e 10 d18e 15 :(Uuste( o6erating -4% 3% -4% 3% 1argin ! On(erlying y g re,enues (oCn 8% ! earlier 6ro(uct call in 2006 ! so1e Cea9ness in su66le1ental a
Slide 35: Adjusted Operating Cash Flow Continuing Operations
:(Uuste( O6erating Cas?DloC Continuing O6erations 2007 2006 2007 2006 6 1ont?s t? to t 30 [[une j1 j1 l1 l1 :(Uuste( U o6erating 6 g 66roDit 530 513 784 749 Ca6ital eW6en(iture d 65e d70e d 96e d102e 6 %e6reciation 76 73 112 107 11 3 16 5 !?are Base( 6ay1ents 17 24 25 35 kor9ing ca6ital an( ot?er it
Slide 36: Free Cash Flow
Kree Cas?DloC % % 2007 2006 2007 2006 c?ange c?ange 6 1ont?s to 30 [une j1 j1 l1 l1 j l :(Uuste( o6erating cas?DloC 479 432 709 631 +11% +12% .nterest an( taW 6ai( d193e d167e d286e d243e +16% +18% Kree Cas?DloC 286 265 423 388 +8% +9% %i i( ( %i,i(en(s d299e d269e d443e d393e SuyBac9s d61e d288e d9
Slide 37: Further Information
Further Information GC. Reed Elsevier
Slide 38: Revenue: Continuing Operations Reconciliation
&e,enue< Continuing O6erations &econciliation % % 6 1ont?s to 30 [une j1 c?ange l1 c?ange 2006 &e,enue 2]237 3]266 Sase Business 123 +6% 178 +6% :cVuisitions 45 +2% 67 +2% %is6osals d35e -2% 2% d49e -2% 2% Currency eDDects d135e -6% d154e -5% 2007 &e,enue 2]235 +0% 3]308 +1% Results for Harcourt Edu
Slide 39: Adjusted Operating Profit: Continuing Operations Reconciliation
:(Uuste( O6erating MroDit< Continuing O6erations &econciliation % % 6 1ont?s to 30 [une j1 c?ange l1 c?ange 2006 :(Uuste( :(U ( o6erating i 6roDit Di 513 749 Sase Business 43 +9% 9% 63 +9% 9% :cVuisitions m (is6osals 9 +1% 13 +1% Currency eDDects d35e -7% d41e -5% 2007 :(Uuste( o6erating 6roDit 530
Slide 40: Elsevier Growth and Currency Analysis
)lse,ier @roCt? an( Currency :nalysis Year on :cVuisitionsm Constant year c?ange Ot?er Organic Total %is6osals currency in ?e(ge currency rates 6 1ont?s to 30 [une 2007 &e,enue +5% -1% +4% -1% -4%N -1% :(Uuste( o6erating 6roDit +9% +1% +10% -4% -3% +3% :(Uuste( o6erating 1argin +0.9% +0.5% +1.4% -0.
Slide 41: Currency Profile
Currency MroDile 6 1ont?s to 30 [une 2006 :(U t ( 6roDit :(Uuste( Dit BeDore B D taWt Kirst ?alD a,erage rates< 2007 2006 ^<j 1.97 1.79 !terling ^<l 1.33 1.23 16% l<j 1 48 1.48 1 46 1.46 O! (ollar 34% Kull year a,erage rates< )uro 2007N 2006 Ot?er 40% ^<j 2.01 1.84 10% ^<l 1 36 1.36 1 25 1.25 l<j 1.
Slide 42: Balance Sheet
Salance !?eet 30 [une 31 %ec 30 [une 31 %ec 2007 2006 2007 2006 j1 j1 l1 l1 @oo(Cill an( intangiBle assets 4]520 5]326 6]735 7]936 TangiBle DiWe( assets 235 298 350 444 .n,est1ents 157 123 234 183 Xet 66ensions assets m ddoBligationse g e 196 dd236ee 292 dd351ee kor9ing ca6ital d315e d71e d674e d106
Slide 43: Dividend Equalisation
%i,i(en( )Vualisation . t i .nteri1 2007 2006 % c?ange &ee( )lse,ier MRC d6e 4.50 4.10 +10% OZ taW cre(it rate 10% 10% &ee( )lse,ier MRC dgrossed6e 5.00 4.56 )Vualisation ratio 1.538 1.538 )Wc?ange rate dl<je 1 48 1.48 1 46 1.46 &ee( )lse,ier Xh dle 0.114 0.102 +12% 43
Slide 44: Reported Profit Attributable
&e6orte( MroDit :ttriButaBle 2007 2006 2007 2006 6 1ont?s to 30 [une 2006 j1 j1 l1 l1 :(Uuste( 6roDit BeDore taW 460 436 680 636 :1ortisation acVuisition integration] :1ortisation] integration ot?er d110e d126e d162e d184e &e6orte( 6roDit BeDore taW 350 310 518 452 :(Uuste( taW c?arge d106e d108e d1
Slide 45: Information for US Institutions
.nDor1ation Dor O! .nstitutions ! &ee( )lse,ier MRC :%& dtic9er< &OZe an( &ee( )lse,ier Xh :%& dtic9er< )XRe tra(e( on XY!) ! )ac? &ee( )lse,ier MRC :%& re6resents 4 &ee( )lse,ier MRC or(inary s?ares ! )ac? &ee( )lse,ier Xh :%& re6resents 2 &ee( )lse,ier Xh or(inary s?ares ! MRC an( Xh :%&s 1e1Bers
Slide 46: This presentation contains forward looking statements
T?is 6resentation T?i t ti contains t i DorCar( D ( loo9ing l 9i state1ents t t t Cit?in it?i t?e t? 1eaning i oDD !ection 27: oD t?e O! !ecurities :ct 1933] as a1en(e(] an( !ection 21) oD t?e O! !ecurities )Wc?ange g :ct 1934] as a1en(e(. T?ese state1ents are suBUect to a nu1Ber oD ris9s an( uncert