REG - RELX PLC - RELX 2023 INTERIM RESULTS

RelxAnnouncement

27/07/2023 07:15

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RNS Number : 3300H  RELX PLC  27 July 2023

27 July 2023

 

RESULTS FOR THE SIX MONTHS TO 30 JUNE 2023

 

RELX, the global provider of information-based analytics and decision tools,
reports results for the first half of 2023 and reaffirms the full year
outlook.

 

 First half highlights

 Ø Revenue £4,499m (£3,969m), underlying growth +8%

 Ø Adjusted operating profit £1,486m (£1,239m), underlying growth +16%

 Ø Adjusted profit before tax £1,350m (£1,163m), constant currency growth
 +12%

 Ø Adjusted EPS 56.2p (47.2p), constant currency growth +14%

 Ø Reported operating profit £1,308m (£1,081m)

 Ø Reported profit before tax £1,137m (£998m)

 Ø Reported EPS 46.0p (39.5p)

 Ø Interim dividend 17.0p (15.7p) +8%

 Ø Net debt/EBITDA 2.2x; adjusted cash flow conversion 95%

 Ø Completed two acquisitions for a total consideration of £111m

 Ø Completed £550m of the previously announced £800m share buyback

 Full year outlook

 Ø As we enter the second half, momentum remains strong across the group, and
 we expect underlying growth rates in revenue and adjusted operating profit to
 remain above historical trends, driving another year of strong growth in
 adjusted earnings per share on a constant currency basis.

 

Chief Executive Officer, Erik Engstrom, commented:

 

"RELX delivered strong revenue and profit growth in the first half of 2023.
The improving long-term growth trajectory continues to be driven by the
ongoing shift in business mix towards higher growth analytics and decision
tools that deliver enhanced value to our customers across market segments."

 

"By embracing artificial intelligence technologies for well over a decade we
have been able to develop and deploy these analytics and decision tools across
the company, and we believe that our ability to leverage AI, as it evolves,
will continue to be an important driver of our business going forward."

 

"In recognition of our strong cash flow and financial position we have
announced an 8% increase in the interim dividend to 17.0p."

 

 ENQUIRIES:  Colin Tennant (Investors)  Paul Abrahams (Media)

             +44 (0)20 7166 5751        +44 (0)20 7166 5724

 

 

Operating and financial review

 

Revenue £4,499m (£3,969m); underlying growth +8%: Electronic revenue,
representing 84% of the total, grew +7%, with a further recovery in
face-to-face activity more than offsetting the print drag, bringing the
overall group underlying revenue growth rate to +8%.

 

Adjusted operating profit £1,486m (£1,239m); underlying growth +16%: Our
strategy of driving continuous process innovation to manage cost growth below
revenue growth, together with the recovery in face-to-face activity, resulted
in an improvement in the group adjusted operating margin to 33.0% (31.2%).

 

Reported operating profit £1,308m (£1,081m): Reported operating profit
includes amortisation of acquired intangible assets of £143m (£143m).

 

Adjusted profit before tax £1,350m (£1,163m); constant currency growth +12%:
the adjusted net interest expense increased to £136m (£76m). The average
interest rate on gross debt was 4.2% (2.3%).

 

Reported profit before tax £1,137m (£998m) Reported profit before tax
includes a loss on disposal-related items of £35m (£5m). Reported net
interest was £136m (£78m).

 

Tax: The adjusted tax charge was £284m (£255m). The adjusted effective tax
rate was 21.0% (21.9%), with the current period benefitting from non-recurring
tax credits. The reported tax charge was £264m (£238m).

 

Adjusted EPS 56.2p (47.2p) +19%; constant currency growth +14%.

 

Reported EPS 46.0p (39.5p)

 

Dividend: We are declaring an interim dividend of 17.0p (15.7p), an increase
of +8%, returning dividend cover to 2.0x on a 12 month trailing basis.

 

Net debt/EBITDA 2.2x (2.3x): Net debt at 30 June 2023 was £6.9bn (£6.9bn).
Adjusted cash flow conversion was 95% (103%), in line with historical trends.

 

Portfolio development: In the first half of 2023 we completed two small
acquisitions, for a total consideration of £111m, and one small disposal.

 

Share buybacks: Of the previously announced £800m share buybacks, £550m was
completed in the first half. A further £50m has been completed since 1 July,
and the remaining £200m will be deployed before the end of the year.

 

Environmental, social and governance (ESG) recognition: In 2023, RELX achieved
a AAA MSCI ESG rating for an eighth consecutive year; maintained its first
place sector ranking on ESG by Sustainalytics; placed fifth in the
Responsibility100 Index, which measures FTSE 100 companies against the UN
Sustainable Development Goals; and was a constituent of the Bloomberg Gender
Equality Index for a fifth consecutive year.

 

RELX FINANCIAL SUMMARY

 

                                                                                                                                                   Six months ended 30 June
 Adjusted figures                                                                                                                                  2022                         2023   Change  Change at constant currencies  Change underlying

£m

                                                                                                                                                                                £m
 Revenue                                                                                                                                           3,969                        4,499  +13%    +9%                            +8%
 Operating profit                                                                                                                                  1,239                        1,486  +20%    +15%                           +16%
 Operating margin                                                                                                                                  31.2%                        33.0%
 Net interest expense                                                                                                                              (76)                         (136)
 Profit before                                                                                                                                     1,163                        1,350  +16%    +12%
 tax
 Tax charge                                                                                                                                        (255)                        (284)
 Net profit attributable to shareholders                                                                                                           909                          1,067  +17%    +13%
 Cash flow                                                                                                                                         1,280                        1,408  +10%    +4%
 Cash flow conversion                                                                                                                              103%                         95%
 Earnings per share                                                                                                                                47.2p                        56.2p  +19%    +14%

 Dividend                                                                                                                                          2022                         2023   Change
 Ordinary dividend per share                                                                                                                       15.7p                        17.0p  +8%

 Reported figures                                                                                                                                                        2022   2023   Change

£m

                                                                                                                                                                                £m
 Revenue                                                                                                                                                                 3,969  4,499  +13%
 Operating profit                                                                                                                                                        1,081  1,308  +21%
 Profit before tax                                                                                                                                                       998    1,137  +14%
 Net profit attributable to shareholders                                                                                                                                 761    874    +15%
 Net margin                                                                                                                                                              19.2%  19.4%
 Net debt                                                                                                                                                                6,932  6,883
 Earnings per share                                                                                                                                                      39.5p  46.0p  +16%

 

RELX uses adjusted 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. 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, and timing effects.
Constant currency growth rates are based on 2022 full-year average and hedge
exchange rates.

 

Disclaimer regarding forward-looking statements

This 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 risks and uncertainties that could cause actual results or outcomes
of RELX PLC (together with its subsidiaries, "RELX", "we" or "our") to differ
materially from those expressed in any forward‐looking statement. We
consider any statements that are not historical facts to be "forward‐looking
statements". The terms "outlook", "estimate", "forecast", "project", "plan",
"intend", "expect", "should", "could", "will", "believe", "trends" and similar
expressions may indicate a forward‐looking statement. Important factors that
could cause actual results or outcomes to differ materially from estimates or
forecasts contained in the forward‐looking statements include, among others:
compromises of RELX cyber security systems or other unauthorised access to our
databases; regulatory and other changes regarding the collection, transfer or
use of third‐party content and data; changes in law and legal
interpretations affecting RELX intellectual property rights and internet
communications; current and future geopolitical, economic and market
conditions; changes in economic cycles, communicable disease epidemics or
pandemics, severe weather events, natural disasters and terrorism; changes in
tax laws and uncertainty in their application; changes in the payment model
for RELX products; competitive factors in the industries in which RELX
operates and demand for RELX products and services; failure of third parties
to whom RELX has outsourced business activities; breaches of generally
accepted ethical business standards or applicable laws; significant failure or
interruption of RELX systems; inability to realise the future anticipated
benefits of acquisitions; inability to retain high-quality employees and
management; exchange rate fluctuations and other risks referenced from time to
time in the filings of RELX PLC with the US Securities and Exchange
Commission. You should not place undue reliance on these forward‐looking
statements, which speak only as of the date of this announcement. Except as
may be required by law, we undertake no obligation to publicly update or
release any revisions to these forward‐looking statements to reflect events
or circumstances after the date of this announcement or to reflect the
occurrence of unanticipated events.

 
Notes for Editors

 

About RELX

RELX is a global provider of information-based analytics and decision tools
for professional and business customers. RELX serves customers in more than
180 countries and has offices in about 40 countries. It employs more than
35,000 people over 40% of whom are in North America. The shares of RELX PLC,
the parent company, are traded on the London, Amsterdam and New York stock
exchanges using the following ticker symbols: London: REL; Amsterdam: REN; New
York: RELX. The market capitalisation is approximately £48bn/€56bn/$62bn.

RELX PLC
1‑3 Strand

London WC2N 5JR

United Kingdom

 

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