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RELX Group, the global professional information and analytics company, reports another year of underlying growth in revenue, operating profit and earnings in 2015.
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.
ENQUIRIES:
Colin Tennant (Investors)
+44 (0)20 7166 5751
Paul Abrahams (Media)
+44 (0)20 7166 5724
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.