Reed Elsevier – results for the six months to 30 June 2012

Reed Elsevier, the global professional information company, has reported revenue, profit and earnings growth in the six months to 30 June 2012.

Financial and Operational Highlights 

Underlying revenue growth across all five business areas: Underlying revenue growth +5% (+3% excluding biennial event cycling) after adjusting for acquisitions and disposals and currency translation. Total reported revenues grew +5% to £3,053m or +12% to €3,725m.

Underlying adjusted operating profit growth across all five business areas: Underlying adjusted operating profit growth +7% after adjusting for acquisitions, disposals and currency translation. Total adjusted operating profit grew +9% to £845m or +16% to €1,031m; +8% at constant currencies. Margins increased by 1.1 percentage points to 27.7%, driven by improvements in all five business areas.

Stable interest and tax: Interest charge slightly lower at £107m/€131m; adjusted effective tax rate increased by 0.4 percentage points to 23.7%.

Adjusted EPS growth: Reed Elsevier PLC +11% to 24.7p; Reed Elsevier NV +18% to €0.47; +10% at constant currencies. Reported EPS after amortisation of acquired intangible assets and acquisition related costs +52% to 24.0p for Reed Elsevier PLC and +57% to €0.47 for Reed Elsevier NV including disposal gains.

Interim dividend: Reed Elsevier PLC +6% to 6.00p; Reed Elsevier NV +18% to €0.130. The difference in dividend growth rates reflects movement in euro/sterling exchange rates since last year’s interim dividend announcement date.

Balance sheet & cash flow: Net debt of £3.3bn/€4.1bn at 30 June 2012, 2.3 times adjusted 12 month trailing EBITDA on a pension and lease adjusted basis (1.7 times on an unadjusted basis). Adjusted operating cash flow conversion rate of 92%. Capital expenditure represented 5% of revenue (6% expected for full year).

Organic investment in transforming core business: Continued investment in digital platforms and products across Reed Elsevier. Range of insurance data services extended along carrier workflow. Positive customer reaction to Lexis Advance releases. Launch of online clinical reference tool ClinicalKey, and roll out of Nova platform across exhibitions globally.

Organic build out of new products into adjacent markets and geographies: 15 new exhibitions launched, the majority in high growth markets; XpertHR launched in US market; insurance data services introduced in UK; new legal practical guidance products released internationally.

Acquisitions: Buyout of leading Brazilian exhibitions joint venture completed; other acquisitions of small high growth exhibitions and paid content and data businesses.

Divestments: Process accelerated in H1. Disposals of Totaljobs, MarketCast, and other small publishing and services assets completed. Planned disposals of Variety and RBI Australia announced.  We expect completed and planned disposals to be mildly dilutive to EPS in the short term. However, we intend to use gross divestment proceeds to buy back shares this year, mitigating this impact. In H1 gross cash proceeds from disposals were £158m/€193m.


Elsevier (41% of adjusted operating profit)

  • ·     Underlying revenue growth +2%; unit volume and usage growth in research, particularly in emerging markets, and strong revenue growth in databases and tools driving +5% revenue growth in Science & Technology. Health Sciences flat, with double digit growth in electronic revenues offset by declines in print books and pharma promotion
  • ·     Double digit growth in article submissions and usage across science and health; successful launch of ClinicalKey
  • ·     Underlying operating profit +4%; reflecting ongoing process efficiencies
  • ·     FY 2012 outlook: H1 trends continuing into H2 generating modest underlying growth

LexisNexis Risk Solutions (22% of adjusted operating profit)

  • Underlying revenue growth +5%; Insurance +7% driven by product extensions across carrier workflow; good growth in Business Services. Modest growth in Screening; moderating declines in Government
  • New product rollouts across Insurance and Business Services continuing
  • Underlying operating profit +5%; reported margin expansion reflects disposal of low margin business
  • FY 2012 outlook: Continued good growth in Insurance and Business Services supported by new products; Government remains mixed

LexisNexis Legal & Professional (12% of adjusted operating profit)

  • Underlying revenue growth +1%; continued good growth in new sales and usage of legal research in law firms and corporate customers and in international online; moderated by print and marketing services declines
  • Lexis Advance releases progressing well
  • Underlying operating profit +2%; process efficiencies more than offset continued development costs
  • FY 2012 outlook: Customer markets remain subdued, limiting upside to revenue growth and further margin expansion

Reed Exhibitions (18% of adjusted operating profit)

  • Underlying revenue growth +23% (+12% ex cycling); H1 revenues benefited from timing of annual shows adding around 4 percentage points to growth, and strong growth in emerging markets
  • Investment in higher growth markets through new launches and small selective acquisitions
  • Underlying operating profits +30%; margin improvement partially reflecting positive impact of show timing in H1
  • FY 2012 outlook: Continued strong underlying revenue growth (excluding cycling), albeit moderated from H1 double digit rate as annual show timing unwinds

Reed Business Information (7% of adjusted operating profit)

  • Underlying revenue growth +1%; continued good growth in data services and marketing solutions, leading brands broadly stable, declines in other magazines & services
  • Integration of CBI China, Accuity and Ascend on track. Totaljobs, MarketCast, and other small disposals completed; further disposals announced
  • Underlying operating profits +10%; record margin of 18% reflects process efficiency and portfolio changes
  • FY 2012 outlook: Good growth in data services, stable leading brands, continued weakness in other magazines & services

UK, London

Related articles

%d bloggers like this: