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)
+44 (0)20 7166 5751 +44 (0)20 7166 5724
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
Click on, or paste the following link into your web browser, to
view the associated PDF document.
http://www.rns-pdf.londonstockexchange.com/rns/6943O_1-2021-2-10.pdf
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