RELX PLC RELX 2020 RESULTS (6943O)

TIDMREL

RNS Number : 6943O

RELX PLC

11 February 2021

11 February 2021

RESULTS FOR THE YEAR TO 31 DECEMBER 2020

RELX, the global provider of information-based analytics and decision tools, reports results for 2020.

 
      2020 Highlights 
       Our three largest business areas, STM, Risk and Legal, which together 
       accounted for 95% of RELX revenue in 2020, all continued to deliver 
       underlying growth in revenue and in adjusted operating profit. 
       Electronic revenue, representing 87% of the total, grew well across 
       all divisions, in line with recent years. Print revenue, which represented 
       8% of the total, declined more steeply than in recent years. 
       Exhibitions, which accounted for 5% of revenue in 2020, has been impacted 
       significantly by the Covid-19 pandemic. 
       We are proposing a 3% increase in the full year dividend to 47.0p (45.7p).                                               2020              2019             Change 
                                                      GBPm              GBPm 
       ---------------------------------  ----------------  ----------------  ----------------- 
                  Three largest business 
                   areas: 
                  Revenue                            6,748             6,605                +2% 
                  Adjusted operating 
                   profit                            2,245             2,165                +4% 
                  Exhibitions: 
                  Revenue                              362             1,269               -71% 
                  Adjusted operating 
                   profit                            (164)               331              -150% 
       ---------------------------------  ----------------  ----------------  ----------------- 
 
                  RELX revenue by 
                  format: 
                  Electronic                         6,179             5,929                +4% 
                  Print                                586               685               -14% 
                  Face-to-face                         345             1,260               -73% 
       ---------------------------------  ----------------  ----------------  ----------------- 
 
 
       2020 Results summary 
       Ø Revenue GBP7,110m (GBP7,874m) 
       Ø Adjusted operating profit GBP2,076m (GBP2,491m) 
       Ø Adjusted profit before tax GBP1,916m (GBP2,200m) 
       Ø Reported operating profit GBP1,525m (GBP2,101m) 
       Ø Reported profit before tax GBP1,483m (GBP1,847m) 
       Ø Adjusted EPS 80.1p (93.0p) 
       Ø Proposed full year dividend 47.0p (45.7p) 
       Ø Reported EPS 63.5p (77.4p) 
       Ø Net debt/EBITDA 3.3x; cash conversion rate 97% 
       Ø Completed 11 acquisitions for total consideration of GBP878m 
 
       2021 Outlook 
       We expect each of our three largest business areas, STM, Risk and Legal, 
       to deliver another year of underlying revenue and adjusted operating 
       profit growth in 2021, similar to pre-Covid-19 trends. The timing and 
       pace of recovery in Exhibitions remains uncertain. 
 

Commenting, Sir Anthony Habgood, Chair, said:

"In a truly extraordinary year in which the Covid-19 pandemic significantly impacted the global economy and many of our customer markets, RELX continued consistently to pursue its strategic priorities, delivering another year of underlying growth in revenue, profit and cash in each of our three largest business areas. Earnings per share is currently being impacted by Covid-19 related disruption to our exhibitions business, but we are proposing a 3% increase in the dividend to 47.0p reflecting our consistent track record and our confidence in the outlook for the company. We also continued to build on our strong ESG performance of recent years, making progress on many important metrics and maintaining or improving our key external ratings."

"I believe that overall the company is well positioned managerially, financially and strategically as I prepare to hand over the Chair to Paul Walker in March. Paul's strong record of value creation, deep understanding of corporate governance, and extensive international experience in sectors relevant to RELX's business, make him ideally suited to the role of Chair, and I am confident that RELX will continue to prosper under his stewardship."

Chief Executive Officer, Erik Engstrom, commented:

"Since the start of the Covid-19 pandemic our first priority has been the health and safety of our colleagues, our customers, and the wider community in which we operate, with Elsevier in particular supporting the scientific and medical response."

"Early in the year we decided that it was important not to curtail investment in our three largest business areas to offset any potential shortfall in financial performance from Exhibitions. Accordingly, we continued to invest behind our strategic priorities, the organic development of increasingly sophisticated information-based analytics and decision tools that deliver enhanced value to our customers, and we continued to make targeted acquisitions that support our organic growth strategies. Throughout 2020 the three largest business areas continued to perform well, with our focus on analytics driving good growth in electronic revenue."

"In Exhibitions, we focused on continuing to serve our customers through the disruption caused by venue closures, whilst taking appropriate steps for the future of the business, accelerating the development of digital tools, and adjusting the ongoing operating cost structure."

"I would like to thank Sir Anthony Habgood for his exemplary leadership as Chair of RELX. For over a decade, he has expertly led the board, helped shape the strategic direction of the company, and provided constant and invaluable advice, support and guidance to me and the executive team."

"I would also like to welcome Paul Walker as our new Chair. I believe that he is uniquely positioned to chair RELX during the next stage of the company's development and I look forward to working closely with him.

Operating and financial review

Revenue GBP7,110m (GBP7,874m) : Our three largest business areas, STM, Risk and Legal, reported combined revenue of GBP6,748m (GBP6,605m), 95% of the group total. All three business areas continued to deliver underlying revenue growth. Electronic revenue, 87% of the RELX total, grew 3% underlying, print revenue, 8% of the total, declined 12% underlying, and face-to-face revenue, 5% of the total, was down by 71% underlying. The Exhibitions business, which accounted for 5% of the group total in the year (down from 16% in 2019), was significantly impacted by Covid-19 in 2020, with revenue of GBP362m (GBP1,269m).

Adjusted operating profit GBP2,076m (GBP2,491m): Our three largest business areas reported combined adjusted operating profit of GBP2,245m (GBP2,165m) with all three delivering underlying growth in line with or ahead of underlying revenue growth. Exhibitions moved into an adjusted loss of GBP164m (GBP331m profit).

Reported operating profit GBP 1,525m (GBP2,101m): Reported operating profit includes amortisation of acquired intangible assets of GBP376m (GBP294m) and a portfolio related credit of GBP12m (GBP84m charge). It also includes an exceptional charge in Exhibitions of GBP183m, primarily comprised of event cancellation costs and a one-off restructuring charge.

Adjusted profit before tax GBP1,916m (GBP2,200m): Adjusted profit before tax benefited from lower adjusted net interest expense of GBP160m (GBP291m) with the reduction reflecting lower average interest rates on borrowings and the absence of last year's GBP99m charge in respect of the early redemption of bonds.

Reported profit before tax GBP1,483m (GBP1,847m): Reported profit before tax includes a credit for disposals and other non-operating items of GBP130m (GBP51m), mainly due to disposal and revaluation gains in the Ventures portfolio. Reported net interest expense was GBP172m (GBP305m).

Tax: The adjusted tax charge was GBP373m (GBP388m), including non-recurring credits. The adjusted effective tax rate was 19.5% (2019: 17.6%). The reported tax charge was GBP275m (GBP338m).

Earnings per share: Adjusted EPS 80.1p (93.0p); Reported EPS 63.5p (77.4p).

Dividend: We are proposing a full year dividend of 47.0p (45.7p). Our long term dividend policy is unchanged.

ROIC: Return on invested capital was 10.8% (13.6%) primarily reflecting the impact of Covid-19 on Exhibitions.

Net debt/EBITDA 3.3x (2.5x) including leases and pensions: The leverage ratio was unusually high primarily due to the impact of Covid-19 on Exhibitions EBITDA. Net debt, including leases, was GBP6.9bn (GBP6.2bn) at 31 December 2020, down from GBP7.5bn at the end of the first half reflecting currency movements and operating cash inflows. Excluding leases and pensions, net debt/EBITDA was 2.9x (2.2 x). Adjusted cash flow conversion was 97% (96%).

Portfolio development: In 2020 we completed 11 acquisitions of content, data analytics and exhibition assets for a total consideration of GBP878m, and disposed of a number of small assets for a total consideration of GBP15m.

Share buybacks : As previously announced, the share buyback was suspended in April 2020 after GBP150m had been spent in the first four months of the year. The Board does not intend to resume the programme this year.

Environmental, social and governance (ESG) recognition: RELX held a AAA MSCI ESG rating for a fifth consecutive year; was placed second in its industry sector in Sustainalytics ESG rankings; came fourth in the Responsibility100 Index, a ranking of the FTSE 100 on performance against the UN Sustainable Development Goals; and was one of 41 LEAD companies of the UN Global Compact among approximately 10,000 business signatories.

RELX FINANCIAL SUMMARY

 
                                             Year ended 31 December 
------------------------------  ------------------------------------------------ 
                                                             Change 
                                  2020   2019           at constant       Change 
                                  GBPm   GBPm  Change    currencies   underlying 
------------------------------  ------  -----  ------  ------------  ----------- 
Revenue                          7,110  7,874    -10%          -10%          -9% 
------------------------------  ------  -----  ------  ------------  ----------- 
Adjusted operating profit        2,076  2,491    -17%          -18%         -18% 
Adjusted operating margin        29.2%  31.6% 
------------------------------  ------  -----  ------  ------------  ----------- 
Reported operating profit        1,525  2,101    -27% 
------------------------------  ------  -----  ------  ------------  ----------- 
Adjusted net interest expense    (160)  (291) 
------------------------------  ------  -----  ------  ------------  ----------- 
Adjusted profit before tax       1,916  2,200    -13%          -15% 
------------------------------  ------  -----  ------  ------------  ----------- 
Adjusted tax                     (373)  (388) 
Adjusted net profit              1,543  1,808    -15%          -16% 
------------------------------  ------  -----  ------  ------------  ----------- 
Reported net profit              1,224  1,505    -19% 
------------------------------  ------  -----  ------  ------------  ----------- 
Reported net margin              17.2%  19.1% 
------------------------------  ------  -----  ------  ------------  ----------- 
Adjusted earnings per share      80.1p  93.0p    -14%          -15% 
------------------------------  ------  -----  ------  ------------  ----------- 
Reported earnings per share      63.5p  77.4p    -18% 
------------------------------  ------  -----  ------  ------------  ----------- 
Net borrowings                   6,898  6,191 
------------------------------  ------  -----  ------  ------------  ----------- 
Ordinary dividend per share     47.0 p  45.7p     +3% 
------------------------------  ------  -----  ------  ------------  ----------- 
 
 
 

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 2020, we also excluded exceptional costs in the Exhibitions business. Reconciliations between the reported and adjusted figures are set out on page 33. Underlying growth rates are calculated at constant currencies, excluding the results of acquisitions until 12 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 2019 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. We consider any statements that are not historical facts to be "forward--looking statements". The terms "outlook", "estimate", "forecast", "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; the impact of the COVID--19 pandemic as well as other pandemics or epidemics; 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; changes in the payment model for our products; 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; exhibitors' and attendees' ability and desire to attend face--to--face events and availability of event venues; 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 (SEC). You should not place undue reliance on these forward--looking statements, which speak only as of the date of this Annual Report. Except as may be required by law, we undertake no obligation to publicly update or release any revisions to these forward--looking statements to reflect events or circumstances after the date of this announcement or to reflect the occurrence of unanticipated events.

RELX is a global provider of information-based analytics and decision tools for professional and business customers. The Group

serves customers in more than 180 countries and has offices in about 40 countries. It employs more than 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 GBP34bn/EUR39bn/$47bn.

The Annual Report and Financial Statements 2020 are expected to be available on the RELX website at www.relx.com from 18 February 2021. Copies of the Annual Report and Financial Statements 2020 are expected to be posted to shareholders of RELX PLC on 8 March 2021. Copies of the 2020 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 11, 2021 02:00 ET (07:00 GMT)