RELX GROUP 2015 RESULTS

RNS Number : 0830Q

RELX PLC

25 February 2016

 

Issued on behalf of RELX PLC and RELX NV

25 February 2016

CONSOLIDATED RESULTS FOR THE YEAR TO DECEMBER 2015

RELX Group, the global professional information and analytics company, reports another year of underlying growth in revenue, operating profit and earnings in 2015.

Highlights Ø +3% underlying revenue growth; full year total £5,971m/€8,240m Ø +5% underlying adjusted operating profit growth; full year total £1,822m/€2,514m Ø Underlying revenue and adjusted operating profit growth across all four business areas Ø +8% adjusted EPS growth constant currency; +7% to 60.5p (56.3p); +20% to €0.835 (€0.698) Ø Reported EPS for RELX PLC 46.4p (43.0p); RELX NV €0.682 (€0.568) Ø Proposed full year dividend growth: +14% to 29.7p for RELX PLC; +5% to €0.403 for RELX NV Ø Strong financial position & cash flow; leverage 2.2x EBITDA, pension & lease adjusted (1.8x unadjusted) Ø £500m of share buybacks completed in 2015; announcing total of £700m for 2016

Commenting on the results, Anthony Habgood, Chairman, said:

"RELX Group continued to execute well on its financial and strategic priorities in 2015, and we are recommending a 14% increase in the full year dividend for RELX PLC and a 5% increase for RELX NV. During 2015 we implemented a number of measures that simplified our corporate structure and our share listings, increasing transparency for our shareholders."

Chief Executive Officer, Erik Engstrom, commented:

"We achieved good underlying revenue growth in 2015, and continued to generate underlying operating profit growth ahead of revenue growth through continuous process innovation. Our financial position and cash flow profile remain strong."

"Our number one priority remains the organic development of increasingly sophisticated information-based analytics and decision tools that deliver enhanced value to our customers. In 2015 we continued to support our organic strategy with a number of small acquisitions."

"Trends in the early part of 2016 are consistent with 2015 across our business, and we are confident that, by continuing to execute on our strategy, we will deliver another year of underlying revenue, profit, and earnings growth in 2016."

FINANCIAL RESULTS

Revenue of £5,971m/€8,240m; underlying growth +3%: The underlying growth rate reflects continued good growth in electronic and face to face revenues (85% of the total), partially offset by continued print revenue declines.

Adjusted operating profit of £1,822m/€2,514m; underlying growth +5%: Growth expressed in sterling was +5%, and expressed in euros was +17%. The difference in growth rates reflects the sharp decline in the euro relative to sterling in 2015.

Reported operating profit: Reported operating profit, including amortisation of acquired intangible assets, was £1,497m (£1,402m) or €2,066m (€1,738m).

Interest and tax: Adjusted net interest expense was £153m (£147m) or €211m (€182m), with the £6m/€29m increase reflecting higher net borrowings and currency translation effects partly offset by a lower average interest rate. Adjusted tax was £388m (£374m) or €535m (€464m). The adjusted effective tax rate was 23.2%.

Adjusted EPS growth in constant currencies +8%: Adjusted EPS expressed in sterling was 60.5p (+7%), or €0.835 (+20%) expressed in euros. The difference in growth rates between the sterling and euro EPS reflects the movement in exchange rates.

Reported EPS: Reported EPS was 46.4p (43.0p) for RELX PLC and €0.682 (€0.568) for RELX NV.

Dividend: We are proposing a full year dividend increase of +14% to 29.7p for RELX PLC and +5% to €0.403 for RELX NV. Following the UK government announcement that dividend tax credits will be abolished, the 2015 final dividends have been equalised without any UK tax credit gross up (see page 26 for details), removing the one remaining difference between the economics of the two shares.

ROIC: Return on invested capital increased from 12.8% to 13.4% at constant currencies. At reported exchange rates, ROIC was 12.7%.

Net debt/EBITDA 2.2x on a pensions and lease adjusted basis (unadjusted 1.8x): Net debt was £3,782m/€5,144m on 31 December 2015. The adjusted cash flow conversion rate was 94% (96%), with capital expenditure as a percentage of revenues unchanged at 5%.

Portfolio development: We completed 19 small acquisitions of content, data and exhibition assets for a total consideration of £171m, and disposed of assets for £73m.

Share buybacks: In 2015 we deployed £500m on share buybacks. In 2016 we intend to deploy a total of £700m, of which £100m has already been completed.

Corporate structure simplification: In 2015 we implemented a simplification of our corporate structure, and have presented our 2015 full year results on a consolidated, rather than combined, basis. The move to consolidated accounts has no impact on any figures, except for a minor positive restatement of the reported EPS for RELX NV.

2016 OUTLOOK

Trends in the early part of 2016 are consistent with 2015 across our business, and we are confident that, by continuing to execute on our strategy, we will deliver another year of underlying revenue, profit, and earnings growth in 2016.

ReLX GROUP FINANCIAL SUMMARY

		£				€
	Year ended 31 December				Year ended 31 December
	2015 £m	2014 £m	Change		2015 €m	2014 €m	Change		Underlying growth rates
Revenue	5,971	5,773	+3%		8,240	7,159	+15%		+3%
Adjusted operating profit	1,822	1,739	+5%		2,514	2,156	+17%		+5%
Adjusted operating margin	30.5%	30.1%			30.5%	30.1%
Reported operating profit	1,497	1,402	+7%		2,066	1,738	+19%
Adjusted net interest expense	(153)	(147)			(211)	(182)
Adjusted profit before tax	1,669	1,592	+5%		2,303	1,974	+17%
Adjusted tax	(388)	(374)			(535)	(464)
Non-controlling interests	(6)	(5)			(8)	(6)
Adjusted net profit	1,275	1,213	+5%		1,760	1,504	+17%
Reported net profit	1,008	955	+6%		1,391	1,184	+17%
Reported net margin	16.9%	16.5%			16.9%	16.5%
Adjusted earnings per share	60.5p	56.3p	+7%		€0.835	€0.698	+20%		+8%*
Net borrowings	3,782	3,550			5,144	4,579
PARENT COMPANIES	RELX PLC				RELX NV
Reported earnings per share	46.4p	43.0p	+8%		€0.682	€0.568	+20%
Ordinary dividend per share	29.7p	26.0p	+14%		€0.403	€0.383	+5%

*Change at constant currencies

RELX Group 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. Reconciliations between the reported and adjusted figures are set out on page 30. Underlying growth rates are calculated at constant currencies, and exclude the results of all acquisitions and disposals made in both the year and prior year and of assets held for sale. Underlying revenue growth rates also exclude the effects of exhibition cycling. Constant currency growth rates are based on 2014 full year average and hedge exchange rates. RELX NV comparative earnings and dividends per share have been adjusted retrospectively to reflect the bonus issue of shares effective 30 June 2015, with reported earnings per share also adjusted for the presentation of consolidated financial information. See note 3 to the condensed consolidated financial information on page 24.

ENQUIRIES:

Colin Tennant (Investors) [phone]

Paul Abrahams (Media) [phone]

FORWARD-LOOKING STATEMENTS

This Results 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 a number of risks and uncertainties that could cause actual results or outcomes to differ materially from those currently being anticipated. The terms "outlook", "estimate", "project", "plan", "intend", "expect", "should be", "will be", "believe", "trends" and similar expressions identify forward-looking statements. Factors which may cause future outcomes to differ from those foreseen in forward-looking statements include, but are not limited to, competitive factors in the industries in which RELX Group operates; demand for RELX Group's products and services; exchange rate fluctuations; general economic and business conditions; legislative, fiscal, tax and regulatory developments and political risks; the availability of third party content and data; breaches of our data security systems and interruptions in our information technology systems; changes in law and legal interpretations affecting RELX Group's intellectual property rights and other risks referenced from time to time in the filings of RELX Group with the US Securities and Exchange Commission.

NOTES FOR EDITORS

About RELX Group

RELX Group is a world‐leading provider of information and analytics for professional and business customers across industries. The group serves customers in more than 180 countries and has offices in about 40 countries. It employs approximately 30,000 people of whom half are in North America. RELX PLC is a London listed holding company which owns 52.9% of RELX Group. RELX NV is an Amsterdam listed holding company which owns 47.1% of RELX Group. The shares are traded on the London, Amsterdam and New York Stock Exchanges using the following ticker symbols: London: REL; Amsterdam: REN; New York: RELX and RENX. The total market capitalisation is approximately £25bn/€31bn/$35bn*.  

*Note: Current market capitalisation can be found at http://www.relx.com/investorcentre

The Annual Reports and Financial Statements 2015 will be available on the RELX Group website at www.relx.com from 8 March 2016. Copies of the Annual Reports and Financial Statements 2015 are expected to be posted to shareholders in RELX PLC on 21 March 2016, and will be available to shareholders in RELX NV on request.  Copies of the 2015 Results Announcement are available to the public on the RELX Group website and from the respective companies:

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

RELX NV Radarweg 29 1043 NX Amsterdam The Netherlands

For more information, visit www.relx.com

Click on, or paste the following link into your web browser, to view the associated PDF document:

http://www.rns-pdf.londonstockexchange.com/rns/0830Q_1-2016-2-24.pdf

 

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