Slide 1: Reed Elsevier PLC AGM 24 April 2014
Reed Elsevier PLC AGM 24 April 2014 Erik Engstrom, CEO
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: Reed Elsevier 2013 progress
Reed Elsevier 2013 progress • Continued positive operating and financial momentum – Underlying revenue growth trends sustained – Improved profitability through process innovation – Strong cash generation • Further transformation of business profile and improvement in earnings quality – Organic devel
Slide 4: Underlying revenue growth
Underlying revenue growth Excluding biennial exhibition cycling +3% +3% +3% +1% 2010 2011 2012 2013 4
Slide 5: Underlying adjusted operating profit growth
Underlying adjusted operating profit growth +6% +5% +5% -1% 2010 2011 2012 2013 5
Slide 6: Earnings per share growth
Earnings per share growth Constant currency +8% +7% +6% 2010 2011 2012 2013 -6% 6
Slide 7: Return on invested capital
Return on invested capital 11.7%* 12.1% 11.2% 10.6% 2010 2011 2012 2013 * 2012 ROIC restated post IAS19 Employee Benefits (revised) 7
Slide 8: Reed Elsevier strategic direction
Reed Elsevier strategic direction 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 resources acros
Slide 9: Organic development
Organic development Revenue by format 22% 21% 19% -5-7%* 27% 25% • Organic transformation #1 priority 15% 15% +6-7%* • Investing in new technology platforms 14% 15% 14% • Launching new products and services • Reformatting print reference into electronic reference 61% 63% 64% 66% +5-6%* 59% • Transfo
Slide 10: Portfolio reshaping
Portfolio reshaping 2013 Acquisitions: • 20 transactions; total consideration £230m • Including Enclarity, Mapflow, Verid, World Compliance, Mendeley, Expo Ferretera, Capsule, IPSA Disposals: • 26 transactions; total consideration £331m • Including Screening Solutions, Martindale Hubbell, RBI Austra
Slide 11: Leverage maintained in recent range
Leverage maintained in recent range Net debt / EBITDA* 2.5x 2.3x 2.2x 2.1x 2010 2011 2012 2013 * Pensions and lease adjusted; 2013 unadjusted net debt / EBITDA 1.6x 11
Slide 12: Implications for use of cash
Implications for use of cash • Strong balance sheet and cash flow characteristics • Average acquisition spend comfortably covered by free cash flow • Pragmatic approach to ensuring value compounding translates into shareholder value • Long term dividend growth in line with earnings per share growth
Slide 13: Financial highlights
Financial highlights 2013 2012 Year to 31 December £m £m Revenue 6,035 6,116 Adjusted operating profit 1,749 1,688 Adjusted net profit 1,197 1,121 Reported net profit 1,110 1,044 Reed Elsevier PLC Adjusted EPS 54.0p 49.4p Reported EPS 48.8p 44.8p Total dividend* (proposed) 24.6p 23.0p Adjusted figur
Slide 14: Summary
Summary 2013 • Continued positive operating and financial momentum • Further transformation of business profile and improvement in earnings quality 2014 • “First quarter underlying revenue growth rates across Reed Elsevier, excluding biennial exhibition cycling, remained broadly consistent with full
Slide 15: Reed Elsevier PLC AGM 24 April 2014
Reed Elsevier PLC AGM 24 April 2014 Erik Engstrom, CEO