Relx Plc · LSE:REL
Relx — Reed Elsevier — H1 2008 Earnings Presentation
29 slides from Relx's earnings presentation, Jul 31, 2008
Slide 1: Reed Elsevier Interim Results 2008 Highlights
Reed Elsevier 2008 Interim Results Presentation 31 July 2008 Reed Elsevier Interim Results 2008 Sir Crispin Davis Mark Armour Highlights Strong performance across the business Restructuring on track to deliver further margin improvement Divestment of RBI in progress ChoicePoint expected to close in
Slide 2: Consistent Strategy
Reed Elsevier 2008 Interim Results Presentation 31 July 2008 Consistent Strategy Deliver authoritative content through leading brands Drive online workflow solutions Improve cost efficiency and margin Upgrade portfolio 3 Deliver Authoritative Content Through Leading Brands • Continued growth in scie
Slide 3: Deliver Authoritative Content Through Leading Brands
Reed Elsevier 2008 Interim Results Presentation 31 July 2008 Deliver Authoritative Content Through Leading Brands • Continued demand ggrowth in litigation, g compliance p and regulatory g y • High quality publishing: new products, and practice specific tools: lawyer.com, state legislation impact rep
Slide 4: Drive Online Solutions
Reed Elsevier 2008 Interim Results Presentation 31 July 2008 Drive Online Solutions • Workflow solutions drive ‘stickiness’: greater usage, high renewals, longer contracts, new revenue streams, price leverage, etc • Science: innovative products to deepen market penetration Workflow solutions for cor
Slide 5: Improve Cost Efficiency and Margin: Restructuring Programme
Reed Elsevier 2008 Interim Results Presentation 31 July 2008 Improve Cost Efficiency and Margin: Restructuring Programme IT • Modernisation and consolidation of data centres Infrastructure/ • IBM co-sourcing agreement for open systems Data Hostingg • Rationalisation and upgrade pg of IT structures •
Slide 6: Improve Cost Efficiency and Margin: Savings on Track
Reed Elsevier 2008 Interim Results Presentation 31 July 2008 Improve Cost Efficiency and Margin: Savings on Track £m (pre tax) 2008 2009 2010 2011 Total Restructuring charges (e) (140) - - - (140) Net cost savings (e) 15 50 80 100 245 • Savings after increased investment behind workflow solutions •
Slide 7: Upgrade Portfolio: Reed Business Information and ChoicePoint
Reed Elsevier 2008 Interim Results Presentation 31 July 2008 Upgrade Portfolio: Reed Business Information • Encouraging revenue performance • Online revenues up 20% ((18% underlying); y g) 34% of total UK NL US International +16% +19% +15% +30% • Diversified revenue streams International 18% UK Onli
Slide 8: 2008 Outlook
Reed Elsevier 2008 Interim Results Presentation 31 July 2008 2008 Outlook • Strong subscription renewals, growing online sales, positive outlook for H2 book programme • Growing demand for online solutions; more challenging but manageable economic conditions; strong growth in Risk • Good exhibition d
Slide 9: 2008 First Half Performance
Reed Elsevier 2008 Interim Results Presentation 31 July 2008 Mark Armour Chief Financial Officer 2008 First Half Performance Continuing Operations: Revenue +5%; Adjusted operating profit +12% • Good revenue and profit performance across the business • Strong subscription renewals; rapidly growing on
Slide 10: Adjusted Profit and Loss: Continuing Operations
Reed Elsevier 2008 Interim Results Presentation 31 July 2008 Adjusted Profit and Loss: Continuing Operations 2008 2007 % change 6 months to 30 June £m £m constant Revenue 1,970 1,790 +5% Adjusted operating profit 557 475 +12% Adjusted operating margin 28.3% 26.5% Net interest expense (67) (70) Adjus
Slide 11: Adjusted Operating Profit; Elsevier
Reed Elsevier 2008 Interim Results Presentation 31 July 2008 Adjusted Operating Profit: Continuing Operations 6 months to % change constant £m 30 June 2008 total underlying y g Elsevier +12% +10% 128 LexisNexis +9% +9% 236 Reed +16% +19% Exhibitions 194 Continuing +12% +11% Businesses 21 Elsevier 20
Slide 12: LexisNexis and Reed Exhibitions
Reed Elsevier 2008 Interim Results Presentation 31 July 2008 LexisNexis 2008 2007 % change 6 months to 30 June £m £m constant Revenue 822 764 +6% Adjusted operating profit 194 176 +9% Adjusted operating margin 24% 23% • Underlying: y g revenues up 5%; adjusted j operatingg profits up 9% • Good growt
Slide 13: Adjusted Operating Cashflow; Reed Business Information
Reed Elsevier 2008 Interim Results Presentation 31 July 2008 Adjusted Operating Cashflow: Continuing Operations 2008 2007 6 months to 30 June £m £m Adjusted operating profit 557 475 Capital expenditure (56) (56) Depreciation 65 65 9 9 Share based payments 18 15 Pension financing credit (20) (19) Wor
Slide 14: Adjusted Profit and Loss: Total Operations; Earnings and Dividends
Reed Elsevier 2008 Interim Results Presentation 31 July 2008 Adjusted Profit and Loss: Total Operations 2008 2007 Continuing Discontinued Total Total % change 6 months to 30 June £m £m £m £m constant Adjusted operating profit 557 62 619 518 +14% Interest (67) - (67) (70) Adjusted profit before tax 4
Slide 15: Free Cashflow and Balance Sheet
Reed Elsevier 2008 Interim Results Presentation 31 July 2008 Free Cashflow 2008 2007 % 6 months to 30 June £m £m change Adjusted operating cashflow from continuing 523 426 +23% operations Interest paid (57) (55) Tax paid* (90) (120) Free cashflow from continuing operations 376 251 +50% before divide
Slide 16: Appendices: Financial Information in Euros
Reed Elsevier 2008 Interim Results Presentation 31 July 2008 Appendices Financial Information in Euros 16
Slide 17: Revenue and Adjusted Operating Profit in Euros
Reed Elsevier 2008 Interim Results Presentation 31 July 2008 Revenue and Adjusted Operating Profit: Continuing Operations (in Euros) 6 months to 30 June 2008 Revenue: €m Profit: €m 486 165 995 304 1,060 250 33 Adjusted Profit and Loss: Continuing Operations % 2008 2007 2008 2007 change 6 months to 3
Slide 18: Elsevier and LexisNexis (Euros)
Reed Elsevier 2008 Interim Results Presentation 31 July 2008 Elsevier % 2008 2007 2008 2007 change 6 months to 30 June £m £m €m €m constant Revenue 771 711 995 1,052 +3% Adjusted operating profit 236 201 304 298 +12% Adjusted operating margin 31% 28% 31% 28% • Underlying: revenues up 5%; adjusted op
Slide 19: Reed Exhibitions; Adjusted Operating Cashflow
Reed Elsevier 2008 Interim Results Presentation 31 July 2008 Reed Exhibitions 2008 2007 2008 2007 % change 6 months to 30 June £m £m €m €m constant Revenue 377 315 486 466 +9% Adjusted operating profit 128 100 165 148 +16% Adjusted operating margin 34% 32% 34% 32% • Underlying: revenues up 11%; prof
Slide 20: Reed Business Information; Free Cashflow
Reed Elsevier 2008 Interim Results Presentation 31 July 2008 Discontinued Operations: Reed Business Information 2008 2007 2008 2007 % change 6 months to 30 June £m £m €m €m constant Revenue 484 445 624 659 +3% Adjusted operating profit 62 55 80 81 +7% Adjusted operating margin 13% 12% 13% 12% • Unde
Slide 21: Further Information: ChoicePoint Financial Summary
Reed Elsevier 2008 Interim Results Presentation 31 July 2008 Further Information ChoicePoint: Financial Summary 2008 2007 Operating Operating Revenues income* Margin Revenues income* Margin 6 months to 30 June $m $m % $m $m % Insurance Services 284 141 50% 250 128 51% Screening and 128 23 18% 127 23
Slide 22: Revenue and Adjusted Profit Before Tax Reconciliation
Reed Elsevier 2008 Interim Results Presentation 31 July 2008 Revenue: Continuing Operations Reconciliation % % 6 months to 30 June £m change €m change 2007 Revenue 1,790 2,649 Base business 103 +6% 151 +6% Acquisitions 30 +1% 44 +1% Disposals (37) -2% (55) -2% Currency effects 84 +5% (248) -9% 2008
Slide 23: Adjusted Profit and Loss: Total Operations
Reed Elsevier 2008 Interim Results Presentation 31 July 2008 Adjusted Profit and Loss: Total Operations (£) 2008 2007 % Continuing Discontinued Total Continuing Discontinued Total change 6 months to 30 June £m £m £m £m £m £m Adjusted operating profit 557 62 619 475 43 518 +19% Interest (67) - (67) (
Slide 24: Adjusted Earnings Per Share; Shares Outstanding
Reed Elsevier 2008 Interim Results Presentation 31 July 2008 Adjusted Earnings Per Share 2008 2007 % 2008 2007 % Adjusted profit attributable for total operations: Combined business £421m £340m +24% €543m €503m +8% Reed Elsevier PLC (52.9%) £223m £180m +24% Reed Elsevier NV (50.0%) €272m €252m +8% A
Slide 25: Dividend Equalisation; Reported Profit Attributable
Reed Elsevier 2008 Interim Results Presentation 31 July 2008 Dividend Equalisation Interim 2008 008 2007 00 % cchange a ge Reed Elsevier PLC (p) 5.3 4.50 +18% UK tax credit rate 10% 10% Reed Elsevier PLC (gross)(p) 5.89 5.00 q Equalisation ratio 1.538 1.538 Exchange rate (€:£) 1.26 1.48 Reed Elsevie
Slide 26: Elsevier Growth and Currency Analysis; Currency Profile
Reed Elsevier 2008 Interim Results Presentation 31 July 2008 Elsevier Growth and Currency Analysis Year on Acquisitions/ Constant year change Other Organic Total disposals currency in hedge currency rates 6 months to 30 June 2008 Revenue +5% -2% +3% -1% +6% +8% Adjusted operating profit +10% +2% +12
Slide 27: Net Debt and Balance Sheet
Reed Elsevier 2008 Interim Results Presentation 31 July 2008 Net Debt £m €m Net debt at 31 December 2007 (492) (669) Free cash flow from continuing operations 376 485 2007 final dividend ((298)) ((385)) Special distribution (net of payment to EBT) (1,986) (2,655) Cash inflow from discontinued operat
Slide 28: Debt Ratios; Information for US Institutions
Reed Elsevier 2008 Interim Results Presentation 31 July 2008 Debt Ratios LTM June 2008 Funds from operations / net debt 31% Retained cashflow / net debt 17% Net debt / EBITDA 2.3x A- (negative) S&P Long term credit rating Baa1 (stable) Moody Moody’ss A- (stable) Fitch LTM June 2008 ratios adjusted t
Slide 29: Forward-looking statements
Reed Elsevier 2008 Interim Results Presentation 31 July 2008 This presentation contains forward-looking statements within the meaning of Section 27A of the US Securities Act 1933, as amended, and Section 21E of the US Securities Exchange Act 1934, 1934 as amended. amended These statements are subjec