REG - Reed Elsevier PLCReed Elsevier NV. - REED ELSEVIER 2014 INTERIM RESULTS <Origin Href="QuoteRef">ELSN.AS</Origin> <Origin Href="QuoteRef">REL.L</Origin>

RelxAnnouncement

06/09/2014 20:29

For best results when printing this announcement, please click on the link
below:

http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com:20140724:nRSX1714Na


RNS Number : 1714N
Reed Elsevier PLC
24 July 2014 
 
Issued on behalf of Reed Elsevier PLC and Reed Elsevier NV 
 
24 July 2014 
 
INTERIM RESULTS FOR SIX MONTHS TO 30 JUNE 2014 
 
Reed Elsevier, the global professional information company, reports continued
underlying growth in revenue, operating profit and earnings in the first half
of 2014. 
 
 Financial highlightsØ Underlying revenue growth +4% (+3% excluding exhibition cycling); H1 total £2,847m/E3,473mØ Underlying adjusted operating profit growth +5%; H1 total £860m/E1,049m Ø Adjusted EPS growth at constant currencies +11% Ø Adjusted EPS  for Reed Elsevier PLC 27.8p (26.5p); for Reed Elsevier NV E0.52 (E0.48)Ø Reported EPS for Reed Elsevier PLC 20.0p (22.0p); for Reed Elsevier NV E0.39 (E0.42)Ø Interim dividend growth for Reed Elsevier PLC +5% to 7.00p; for Reed Elsevier NV +14% to E0.151Ø     
 Leverage 2.3x EBITDA pensions and lease adjusted (1.8x unadjusted), in line with prior years                                                                                                                                                                                                                                                                                                                                                                                                                                    
 
 
 Operational and strategic highlightsØ Underlying revenue and profit growth across all major business areasØ Improvement in profitability driven by process innovation and portfolio reshaping Ø Improvement in business profile; electronic & face-to-face 84% of H1 revenue, underlying growth +5-7% Ø Strong financial position and cash conversion Ø £400m of share buybacks completed in H1 2014; further £200m to be deployed in remainder of 2014  
 
 
Commenting on the results, Anthony Habgood, Chairman, said: 
 
"Reed Elsevier grew underlying revenue, operating profit and earnings in the
first half of 2014, and continues to execute on its strategic and financial
priorities. We are recommending a 5% increase in the interim dividend for Reed
Elsevier PLC and a 14% increase for Reed Elsevier NV, which, in combination,
are broadly in line with adjusted earnings per share growth at constant
currencies." 
 
Chief Executive Officer, Erik Engstrom, commented: 
 
"In the first half we continued the transformation of our business, adding
datasets and analytics and building out our leading global platforms,
primarily through organic development." 
 
"Our financial position and cash flow profile remain strong, and in the first
half we have deployed £400m on share buybacks, leaving a further £200m to be
completed in the remainder of the year." 
 
"Underlying trends in our business continue to be positive as we enter the
second half, and we remain confident that we will deliver another year of
underlying revenue, profit, and earnings growth in 2014." 
 
REED ELSEVIER FINANCIAL AND OPERATIONAL HIGHLIGHTS 
 
Reed Elsevier continued to make good progress against its strategic and
financial priorities in the first half of 2014. 
 
Revenue of £2,847m/E3,473m; underlying growth +4% (+3% excluding biennial
exhibition cycling): The overall underlying growth rate reflects continued
growth of +5-7% in electronic and face-to-face revenues, which accounted for
84% of the first half total, partially offset by continuing print revenue
declines. 
 
Adjusted operating profit of £860m/E1,049m; underlying growth +5%: The
improvement in profitability reflects a combination of underlying revenue
growth, process innovation and portfolio development. Reported operating
profit, after amortisation of acquired intangible assets, was up +2% to
£697m/+5% to E850m. 
 
Interest and tax: Adjusted net interest expense was £23m/E25m lower at
£69m/E84m reflecting the benefits of term debt refinancings and other
initiatives over the last 18 months. The adjusted effective tax rate was
unchanged at 23.5%. 
 
Adjusted EPS: Growth at constant currencies +11%; first half EPS benefited
from timing of term debt refinancing and share buybacks. Reed Elsevier PLC
27.8p (26.5p); Reed Elsevier NV E0.52 (E0.48). 
 
Reported EPS: Reed Elsevier PLC 20.0p (22.0p), Reed Elsevier NV E0.39 (E0.42),
reflecting the absence in the first half of 2014 of a non-recurring deferred
tax credit recognised in the first half of 2013. 
 
Equalised interim dividend growth for Reed Elsevier PLC +5% to 7.00p; for Reed
Elsevier NV +14% to E0.151: The difference in interim dividend growth rates
reflects exchange rate movements since July 2013. 
 
Net debt/EBITDA2.3x on a pensions and lease adjusted basis (unadjusted1.8x):
Net debt was £3.3bn/E4.1bn at 30 June 2014. The adjusted operating cash flow
conversion rate was 89% (85%). For the full year we continue to expect a cash
conversion rate of over 90%, in line with prior years. 
 
Organic development: In the first half of 2014 we continued to develop our
global technology platforms across the business, launch new products and
services in both existing and adjacent market segments, and extend our reach
in high growth markets and geographies. Capital expenditure as a percentage of
revenues was slightly lower at 4.3% (5.0%) due to phasing. 
 
Acquisitions & disposals: We completed 10 small acquisitions of content, data
assets and exhibitions in the first half of 2014 for a total consideration of
£95m. We also completed the disposal of 6 assets for a total consideration of
£26m. 
 
Share buybacks: We previously announced our intention to deploy a total of
£600m on share buybacks in 2014 as part of our pragmatic approach to ensuring
that the value compounding within the business translates into shareholder
value. So far we have completed £400m of this total, leaving a further £200m
to be deployed by the end of the year. 
 
FULL YEAR 2014 OUTLOOK 
 
The full year outlook is unchanged. Underlying trends in our business continue
to be positive as we enter the second half, and we remain confident that, by
continuing to execute on our strategy of delivering improved outcomes to our
professional customers, primarily through organic investment, we will deliver
another year of underlying revenue, profit, and earnings growth in 2014. 
 
Reed Elsevier FINANCIAL SUMMARY 
 
                                        £                                            E                                  
 Six months ended 30 June               Six months ended 30 June             
 2014                           2013£m  Change                         2014  2013Em  Change       Underlying  
 £m                                                                    Em                         growth      
                                                                                                  rates       
 Revenue                        2,847   3,025                     -6%        3,473   3,570   -3%              +4%/+3%*  
 Adjusted operating profit      860     870                       -1%        1,049   1,027   +2%              +5%       
 Adjusted operating margin      30.2%   28.8%                                30.2%   28.8%                              
 Reported operating profit      697     684                       +2%        850     807     +5%                        
 Adjusted net interest expense  (69)    (92)                                 (84)    (109)                              
 Adjusted profit before tax     791     778                       +2%        965     918     +5%                        
 Adjusted tax                   (186)   (183)                                (227)   (217)                              
 Non-controlling interests      (2)     (3)                                  (2)     (3)                                
 Adjusted net profit            603     592                       +2%        736     698     +5%                        
 Reported net profit            454     509                                  554     601                                
 Reported net margin            15.9%   16.8%                                15.9%   16.8%                              
 Net borrowings                 3,278   3,339                                4,097   3,906                              
                                                                                                                        
 
 
*    Excluding biennial exhibition cycling 
 
PARENT COMPANIES 
 
                              Reed Elsevier PLC                            Reed Elsevier NV                
 Six months ended 30 June                        Six months ended 30 June                          
 2014                         2013               Change                                      2014  2013    Change        Change at constant currencies  
 Adjusted earnings per share  27.8p              26.5p                     +5%                     E0.52   E0.48   +8%                                  +11%  
 Reported earnings per share  20.0p              22.0p                     -9%                     E0.39   E0.42   -7%                                  -2%   
 Ordinary dividend per share  7.00p              6.65p                     +5%                     E0.151  E0.132  +14%                                       
 
 
Adjusted and underlying figures are additional performance measures used by
management. Reconciliations between the reported and adjusted figures are set
out in note 4 to the combined financial information on page 26. The reported
operating profit figures are set out in note 2 on page 23. 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 assets
held for sale. Constant currency growth rates are based on 2013 full year
average and hedge exchange rates. 
 
 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 Reed Elsevier
operates; demand for Reed Elsevier'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 Reed Elsevier's intellectual property rights and
other risks referenced from time to time in the filings of Reed Elsevier with
the US Securities and Exchange Commission. 
 
Reed Elsevier Group plc is a world leading provider of professional
information solutions. The group employs more than 28,000 people, including
almost 14,000 in North America. Reed Elsevier Group plc is owned equally by
two parent companies, Reed Elsevier PLC and Reed Elsevier NV; the combined
market capitalisation of the two parent companies is approximately
£19bn/E24bn. Their shares are traded on the London, Amsterdam and New York
Stock Exchanges using the following ticker symbols: London: REL; Amsterdam:
REN; New York: RUK and ENL. 
 
Copies of the 2014 Interim Results Announcement are available to the public on
the Reed Elsevier website and from the respective companies: 
 
 Reed Elsevier PLC  Reed Elsevier NV               
 1-3 Strand         Radarweg 291043 NX Amsterdam   
 London WC2N 5JR    The Netherlands                
 United Kingdom                                    
 
 
For more information, visit www.reedelsevier.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/1714N_-2014-7-23.pdf 
 
This information is provided by RNS
The company news service from the London Stock Exchange