RELX PLC RELX 2019 RESULTS (8364C)

TIDMREL

RNS Number : 8364C

RELX PLC

13 February 2020

News release

13 February 2020

RESULTS FOR THE YEAR TO 31 DECEMBER 2019

RELX, the global provider of information-based analytics and decision tools, reports continued growth in revenue, operating profit and earnings in 2019.

 
           Highlights 
            Ø Revenue GBP7,874m +5%, underlying growth +4% 
            Ø Adjusted operating profit GBP2,491m +6%, underlying growth +5% 
            Ø Adjusted EPS 93.0p +10%, constant currency growth +7% 
            Ø Reported operating profit GBP2,101m +7% 
            Ø Reported EPS 77.4p +8% 
            Ø Proposed full year dividend 45.7p +9% 
            Ø Strong financial position; cash conversion rate 96%; net debt/EBITDA 
            2.5x 
            Ø Completed 14 acquisitions for total consideration of GBP416m; 
            announced two further acquisitions in 2020 
            Ø GBP600m of share buybacks completed in 2019, announcing total 
            of GBP400m for 2020 
            2020 outlook 
            Ø Key business trends in the early part of 2020 are consistent 
            with recent years, and we are confident that, by continuing to execute 
            on our strategy, we will deliver another year of underlying growth 
            in revenue and in adjusted operating profit, together with growth in 
            adjusted earnings per share on a constant currency basis 
 

Commenting on the results, Sir Anthony Habgood, Chair, said:

"RELX continued to execute well on its strategic priorities in 2019. This was reflected in strong earnings, with adjusted earnings per share growth of +10% in sterling, and +7% at constant currencies, and we have proposed an increase in the dividend of +9%. We also continued to build on our strong ESG performance during the year, and this was again recognised in the high ratings given to us by a number of external agencies."

Chief Executive Officer, Erik Engstrom, commented:

"RELX continued to make good progress in 2019. Our number one strategic priority is unchanged: the organic development of increasingly sophisticated information-based analytics and decision tools that deliver enhanced value to our customers, supplemented by selective acquisitions of targeted data, analytics and exhibition assets that support our organic growth strategies."

"We achieved good underlying revenue growth, with underlying adjusted operating profit growth slightly ahead of underlying revenue growth, and adjusted earnings per share growth at constant currencies ahead of underlying profit growth."

2019 RESULTS

Revenue GBP7,874m (GBP7,492m) +5%; underlying growth +4%: The underlying growth rate reflects good growth in electronic and face-to-face revenues (91% of the total), and the further development of our analytics and decision tools, partially offset by continued print revenue declines.

Adjusted operating profit GBP2,491m (GBP2,346m) +6%; underlying growth +5%: Growth was driven by revenue growth and continued operating process innovation.

Reported operating profit GBP2,101m (GBP1,964m) +7%: Reported operating profit includes amortisation of acquired intangible assets of GBP295m (GBP288m) and acquisition-related costs of GBP84m (GBP84m).

Interest and tax: Adjusted net interest expense was GBP291m (GBP201m), with the increase including a charge of GBP99m in respect of the early redemption of bonds that were scheduled to mature in October 2022, partially offset by lower average interest rates on borrowings. The adjusted tax charge was GBP388m (GBP465m), and includes a credit of GBP89m in respect of a substantial resolution during the year of certain historical tax issues, giving an effective tax rate of 17.6%. Excluding this item, the adjusted effective tax rate would have been 21.7%, in line with the prior year.

Reported net interest expense was GBP305m (GBP211m), and the reported tax charge was GBP338m (GBP292m).

Adjusted EPS 93.0p (84.7p) +10%; constant currency growth +7%

Reported EPS 77.4p (71.9p) +8%: Reported EPS includes a credit for gains on disposals and other non-operating items of GBP51m (GBP33m charge).

Dividend: We are proposing a full year dividend of 45.7p (42.1p) +9%.

ROIC: Return on invested capital was 13.6% (13.2%), benefitting from the lower adjusted tax rate mentioned above. Based on a tax rate of 21.7% ROIC would have been 13.0%.

Net debt/EBITDA 2.5x (2.4x) including leases and pensions: Net debt, including leases as per IFRS 16, was GBP6.2bn (GBP6.2bn) at 31 December 2019. Excluding leases and pensions, net debt/EBITDA was 2.2x. The adjusted cash flow conversion rate was 96% (96%), with capital expenditure as a percentage of revenues remaining at 5%.

Portfolio development: In 2019 we completed 14 acquisitions of content, data analytics and exhibition assets for a total consideration of GBP416m, and disposed of a number of small assets for a total of GBP63m. Since the year end we have completed the acquisition of ID Analytics, a provider of credit and fraud risk solutions, and agreed to acquire Emailage, a provider of email based fraud prevention solutions.

Share buybacks: We deployed GBP600m on share buybacks in 2019. We intend to deploy a total of GBP400m in 2020, of which GBP100m has already been completed.

Environmental, social and governance (ESG) recognition: In 2019 RELX was ranked second in the S&P Global 1200 for ESG performance based on CSRHub data, and sixth in the newly launched Responsibility 100 index of FTSE 100 companies measured against the United Nations 17 Sustainable Development Goals (SDGs). In 2019 RELX retained its AAA ESG rating with MSCI for the fourth consecutive year, and in January 2020 a Sustainalytics ESG report put RELX in the top one percent of over 12,000 companies covered.

RELX FINANCIAL SUMMARY

 
                                            Year ended 31 December 
------------------------------  ---------------------------------------------- 
                                                            Change 
                                 2019   2018           at constant  Underlying 
                                 GBPm   GBPm  Change    currencies      growth 
------------------------------  -----  -----  ------  ------------  ---------- 
Revenue                         7,874  7,492     +5%           +2%         +4% 
------------------------------  -----  -----  ------  ------------  ---------- 
Adjusted operating profit       2,491  2,346     +6%           +3%         +5% 
Adjusted operating margin       31.6%  31.3% 
------------------------------  -----  -----  ------  ------------  ---------- 
Reported operating profit       2,101  1,964     +7% 
------------------------------  -----  -----  ------  ------------  ---------- 
Adjusted net interest expense   (291)  (201) 
------------------------------  -----  -----  ------  ------------  ---------- 
Adjusted profit before tax      2,200  2,145     +3%            0% 
------------------------------  -----  -----  ------  ------------  ---------- 
Adjusted tax                    (388)  (465) 
Non-controlling interests         (4)    (6) 
------------------------------  -----  -----  ------  ------------  ---------- 
Adjusted net profit             1,808  1,674     +8%           +5% 
------------------------------  -----  -----  ------  ------------  ---------- 
Reported net profit             1,505  1,422     +6% 
------------------------------  -----  -----  ------  ------------  ---------- 
Reported net margin             19.1%  19.0% 
------------------------------  -----  -----  ------  ------------  ---------- 
Adjusted earnings per share     93.0p  84.7p    +10%           +7% 
------------------------------  -----  -----  ------  ------------  ---------- 
Reported earnings per share     77.4p  71.9p     +8% 
------------------------------  -----  -----  ------  ------------  ---------- 
Net borrowings                  6,191  6,177 
------------------------------  -----  -----  ------  ------------  ---------- 
Ordinary dividend per share     45.7p  42.1p     +9% 
------------------------------  -----  -----  ------  ------------  ---------- 
 
 
 

RELX uses adjusted and underlying figures as additional performance measures. Adjusted figures primarily exclude the amortisation of acquired intangible assets and other items related to acquisitions and disposals, and the associated deferred tax movements. In 2018 we excluded exceptional tax credits. Reconciliations between the reported and adjusted figures are set out on page 30. Underlying growth rates are calculated at constant currencies, excluding the results of acquisitions until twelve months after purchase, and excluding the results of disposals and assets held for sale. Underlying revenue growth rates also exclude exhibition cycling. Constant currency growth rates are based on 2018 full-year average and hedge exchange rates.

 
ENQUIRIES:  Colin Tennant (Investors)  Paul Abrahams (Media) 
             [phone]        [phone] 
 

Disclaimer regarding forward-looking statements

This Announcement 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 risks and uncertainties that could cause actual results or outcomes of RELX PLC (together with its subsidiaries, "RELX", "we" or "our") to differ materially from those expressed in any forward-looking statement. The terms "outlook", "estimate", "project", "plan", "intend", "expect", "should", "will", "believe", "trends" and similar expressions may indicate a forward-looking statement. Important factors that could cause actual results or outcomes to differ materially from estimates or forecasts contained in the forward-looking statements include, among others, current and future economic, political and market forces; changes in law and legal interpretations affecting RELX intellectual property rights and internet communications; regulatory and other changes regarding the collection, transfer or use of third-party content and data; demand for RELX products and services; competitive factors in the industries in which RELX operates; ability to realise the future anticipated benefits of acquisitions; significant failure or interruption of our systems; compromises of our data security systems or other unauthorised access to our databases; legislative, fiscal, tax and regulatory developments and political risks; exchange rate fluctuations; and other risks referenced from time to time in the filings of RELX PLC with the US Securities and Exchange Commission.

RELX is a global provider of information-based analytics and decision tools for professional and business customers. RELX serves customers in more than 180 countries and has offices in about 40 countries. It employs over 33,000 people, of whom almost half are in North America. The shares of RELX PLC, the parent company, are traded on the London, Amsterdam and New York stock exchanges using the following ticker symbols: London: REL; Amsterdam: REN; New York: RELX. The market capitalisation is approximately GBP39bn/EUR47bn/$51bn.

The Annual Report and Financial Statements 2019 are expected to be available on the RELX website at www.relx.com from 20 February 2020. Copies of the Annual Report and Financial Statements 2019 are expected to be posted to shareholders of RELX PLC on 5 March 2020. Copies of the 2019 Results Announcement are available to the public on the RELX website and from:

 
RELX PLC 
 1-3 Strand 
 London WC2N 5JR 
 United Kingdom 
 

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February 13, 2020 02:00 ET (07:00 GMT)