Trading Statement
Reed Elsevier PLC
17 November 2005
News Release
Issued on behalf of Reed Elsevier PLC and Reed Elsevier NV
17 November 2005
REED ELSEVIER PROVIDES UPDATE ON TRADING AND REAFFIRMS OVERALL FINANCIAL TARGETS
Reed Elsevier today reaffirmed that it is on track to deliver on its targets
this year of organic revenue growth of 5% and double digit growth in adjusted
earnings per share at constant currencies.
Trading performance in three of its four divisions is on track to deliver on or,
in the case of LexisNexis, exceed individual divisional targets for organic
revenue growth, whilst Harcourt Education is now expected to fall short of its
target of high single digit organic revenue growth.
In scientific and medical markets, demand remains strong for scientific research
and medical information within a more supportive funding environment
particularly for online product and in the expanding health professions. In
legal markets, good demand growth is being seen for online productivity tools
and practice solutions, and in international online expansion and risk
management. In education markets, strong growth in the US K-12 basal business,
driven by success in an expanded state textbook adoptions market, is in large
part offset by weak supplemental and international markets and a disappointing
sales performance in supplemental and assessment. In business to business
markets, continuing improvement in demand is seen particularly for online
services and exhibitions.
The performance trends in Reed Elsevier's businesses are as follows:
Elsevier is performing well, with strong subscription renewals, growing online
sales and a successful second half medical book publishing programme. Elsevier
continues to target 5% organic revenue growth for the year. The renewals process
for 2006 subscriptions is progressing well, and the integration of the MediMedia
MAP businesses acquired in August is on track.
LexisNexis continues to show good growth with strong demand for online
information and workflow tools in North American and International legal
markets. US corporate and federal markets continue to see recovery in online
news and business, higher volumes of patent applications and strong demand in
risk management, with Seisint on track to deliver the targeted 20% year on year
sales growth. LexisNexis is now expected to deliver organic revenue growth of 6%
this year before taking into account the faster growth at Seisint.
Harcourt Education, in its US basal business, is performing well in a strong
state textbook adoptions market despite slow implementation in Texas. Harcourt
is taking the leading share in new textbook adoptions in the core curriculum
subjects. However, in the last two months, it is seeing significant weakness in
its supplemental and assessment businesses. The shortfalls are due to a sharp
fall-off in backlist sales and much slower than expected demand for new
products, with a cut back on uncommitted spending by schools. Sales shortfalls
in these businesses are not likely to be recovered this year, and, given
continuation of current trends, low organic revenue growth is now expected,
against the high single digit growth targeted.
Reed Business continues to see improvement overall in its markets, with
particularly strong demand for online services and recovery in exhibitions
markets, whilst print advertising remains variable by geography and sector, in
part reflecting migration to strongly growing online services. The second half
is seeing good performances from biennial exhibitions cycling in. Reed Business
continues to target 4-5% organic revenue growth for the year.
Commenting, Sir Crispin Davis, Chief Executive Officer, said:
'Our business is performing well overall, with organic revenue growth building
and margin expected to improve through continued cost efficiency. The
accelerating performance of LexisNexis is particularly pleasing. While growth
this year in the Harcourt supplemental and testing businesses will be lower than
expected, we remain confident in the longer term prospects of the education
market and our business.
'With continuing revenue growth momentum in our markets and in our business and
ongoing cost efficiency, as well as growing returns from investment, we are
again targeting to deliver next year organic revenue growth of at least 5% and
double digit growth in adjusted earnings per share at constant currencies.'
This announcement 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, as amended. These statements are subject to a
number of risks and uncertainties and actual results, and events could differ
materially from those currently being anticipated as reflected in such forward
looking statements. The terms 'expect', 'should be', 'will be' 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: general economic conditions in Reed Elsevier's markets;
exchange rate fluctuations; customers' acceptance of our products and services;
the actions of competitors; legislative, fiscal and regulatory developments;
changes in law and legal interpretations affecting Reed Elsevier's intellectual
property rights and internet communications; and the impact of technological
change.
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Enquiries
Sybella Stanley Tel: +44 (0) 20 7166 5630
(Investors)
Patrick Kerr Tel: +44 (0) 20 7166 5646
(Media)
Notes to editors
Reed Elsevier Group plc
Reed Elsevier Group plc is a world leading publisher and information provider.
It is owned equally by its two parent companies, Reed Elsevier PLC and Reed
Elsevier NV. The parent companies are listed on the London, Amsterdam and New
York Stock Exchanges, under the following ticker symbols: London: REL;
Amsterdam: REN; New York: RUK and ENL. The group employs 35,600 people,
including approximately 20,000 in North America. Operating in the scientific,
legal, educational and business-to-business sectors, Reed Elsevier provides high
value and flexible information solutions to professional end users, with
increasing emphasis on internet delivery. For further information, please visit
the company website www.reedelsevier.com
This information is provided by RNS
The company news service from the London Stock Exchange