RELX, the global provider of information-based analytics and decision tools, reports continued growth in revenue, operating profit and earnings in 2019.
. Revenue £7,874m +5%, underlying growth +4%
. Adjusted operating profit £2,491m +6%, underlying growth +5%
. Adjusted EPS 93.0p +10%, constant currency growth +7%
. Reported operating profit £2,101m +7%
. Reported EPS 77.4p +8%
. Proposed full year dividend 45.7p +9%
. Strong financial position; cash conversion rate 96%; net debt/EBITDA 2.5x
. Completed 14 acquisitions for total consideration of £416m; announced two further acquisitions in 2020
. £600m of share buybacks completed in 2019, announcing total of £400m for 2020
. Key business trends in the early part of 2020 are consistent with recent years, and we are confident that, by continuing to execute on our strategy, we will deliver another year of underlying growth in revenue and in adjusted operating profit, together with growth in adjusted earnings per share on a constant currency basis
Commenting on the results, Sir Anthony Habgood, Chair, said:
“RELX continued to execute well on its strategic priorities in 2019. This was reflected in strong earnings, with adjusted earnings per share growth of +10% in sterling, and +7% at constant currencies, and we have proposed an increase in the dividend of +9%. We also continued to build on our strong ESG performance during the year, and this was again recognised in the high ratings given to us by a number of external agencies.”
Chief Executive Officer, Erik Engstrom, commented:
“RELX continued to make good progress in 2019. Our number one strategic priority is unchanged: the organic development of increasingly sophisticated information-based analytics and decision tools that deliver enhanced value to our customers, supplemented by selective acquisitions of targeted data, analytics and exhibition assets that support our organic growth strategies.”
“We achieved good underlying revenue growth, with underlying adjusted operating profit growth slightly ahead of underlying revenue growth, and adjusted earnings per share growth at constant currencies ahead of underlying profit growth.”
Revenue £7,874m (£7,492m) +5%; underlying growth +4%: The underlying growth rate reflects good growth in electronic and face-to-face revenues (91% of the total), and the further development of our analytics and decision tools, partially offset by continued print revenue declines.
Adjusted operating profit £2,491m (£2,346m) +6%; underlying growth +5%: Growth was driven by revenue growth and continued operating process innovation.
Reported operating profit £2,101m (£1,964m) +7%: Reported operating profit includes amortisation of acquired intangible assets of £295m (£288m) and acquisition-related costs of £84m (£84m).
Interest and tax: Adjusted net interest expense was £291m (£201m), with the increase including a charge of £99m in respect of the early redemption of bonds that were scheduled to mature in October 2022, partially offset by lower average interest rates on borrowings. The adjusted tax charge was £388m (£465m), and includes a credit of £89m in respect of a substantial resolution during the year of certain historical tax issues, giving an effective tax rate of 17.6%. Excluding this item, the adjusted effective tax rate would have been 21.7%, in line with the prior year.
Reported net interest expense was £305m (£211m), and the reported tax charge was £338m (£292m).
Adjusted EPS 93.0p (84.7p) +10%; constant currency growth +7%
Reported EPS 77.4p (71.9p) +8%: Reported EPS includes a credit for gains on disposals and other non-operating items of £51m (£33m charge).
Dividend: We are proposing a full year dividend of 45.7p (42.1p) +9%.
ROIC: Return on invested capital was 13.6% (13.2%), benefitting from the lower adjusted tax rate mentioned above. Based on a tax rate of 21.7% ROIC would have been 13.0%.
Net debt/EBITDA 2.5x (2.4x) including leases and pensions: Net debt, including leases as per IFRS 16, was £6.2bn (£6.2bn) at 31 December 2019. Excluding leases and pensions, net debt/EBITDA was 2.2x. The adjusted cash flow conversion rate was 96% (96%), with capital expenditure as a percentage of revenues remaining at 5%.
Portfolio development: In 2019 we completed 14 acquisitions of content, data analytics and exhibition assets for a total consideration of £416m, and disposed of a number of small assets for a total of £63m. Since the year end we have completed the acquisition of ID Analytics, a provider of credit and fraud risk solutions, and agreed to acquire Emailage, a provider of email based fraud prevention solutions.
Share buybacks: We deployed £600m on share buybacks in 2019. We intend to deploy a total of £400m in 2020, of which £100m has already been completed.
Environmental, social and governance (ESG) recognition: In 2019 RELX was ranked second in the S&P Global 1200 for ESG performance based on CSRHub data, and sixth in the newly launched Responsibility 100 index of FTSE 100 companies measured against the United Nations 17 Sustainable Development Goals (SDGs). In 2019 RELX retained its AAA ESG rating with MSCI for the fourth consecutive year, and in January 2020 a Sustainalytics ESG report put RELX in the top one percent of over 12,000 companies covered.
RELX FINANCIAL SUMMARY
Year ended 31 December 2019 £m 2018 £m Change Change at constant currencies
Revenu 7,874 7,492 +5% +2% +4%
Adjusted operating profit 2,491 2,346 +6% +3% +5%
Adjusted operating margin 31.6% 31.3%
Reported operating profit 2,101 1,964 +7%
Adjusted net interest expense (291) (201)
Adjusted profit before taks 2,200 2,145 +3% 0%
Adjusted taks (388) (465)
Non-controlling interests (4) (6)
Adjusted net profit 1,808 1,674 +8% +5%
Reported net profit 1,505 1,422 +6%
Reported net margin 19.1% 19.0%
Adjusted earnings per share 93.0p 84.7p +10% +7%
Reported earnings per share 77.4p 71.9p +8%
Net borrowings 6,191 6,177
Ordinary dividend per share 45.7p 42.1p +9%
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 2018 we excluded exceptional tax credits. Reconciliations between the reported and adjusted figures are set out on page 30. Underlying growth rates are calculated at constant currencies, excluding the results of acquisitions until twelve 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 2018 full-year average and hedge exchange rates.
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