RELX - Results for the year to 31 December 2018
Ø Underlying revenue growth +4%; full year reported total £7,492m
Ø Underlying adjusted operating profit growth +6%; full year total £2,346m
Ø Adjusted EPS growth constant currency +7%; in sterling +6% to 84.7p
Ø Reported operating profit £1,964m (£1,905m)
Ø Reported EPS 71.9p (81.6p); prior year included exceptional non-cash credit relating to US tax reforms
Ø Proposed full year dividend growth +7% to 42.1p
Ø Return on invested capital up to 13.2% (12.9%)
Ø Strong financial position; cash conversion rate 96%, net debt/EBITDA 2.4x including leases and pensions
Ø Completed nine acquisitions for a total consideration of £978m
Ø £700m of share buybacks completed in 2018, announcing total of £600m in 2019
2017 figures restated for new accounting standards (see note 1 on page 23)
Commenting on the results, Sir Anthony Habgood, Chairman, said:
"RELX continued its positive development in 2018. Adjusted earnings per share in constant currencies grew +7%, and we have announced a dividend increase of +7%. In 2018 we simplified our corporate structure into a single parent company, removing complexity and increasing transparency for shareholders. Shares in the single parent company are now listed in London, Amsterdam and New York, and with a full weighting in both the FTSE 100 and AEX indices."
Chief Executive Officer, Erik Engstrom, commented:
"In 2018 we again achieved our objective to deliver good underlying revenue growth, with underlying adjusted operating profit growth ahead of underlying revenue growth, and adjusted earnings per share growth at constant currencies ahead of underlying profit growth."
"We also had an active year for acquisitions, focusing on targeted data sets, analytics and assets that support our organic growth strategies."
"Our number one strategic priority remains unchanged: the organic development of increasingly sophisticated information-based analytics and decision tools that deliver enhanced value to our customers."
"Key business trends in the early part of 2019 are consistent with 2018, 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 2019."
2018 FINANCIAL RESULTS
(2017 comparatives): restated for new accounting standards
Revenue of £7,492m (£7,341m); underlying growth +4%: The underlying growth rate reflects good growth in electronic and face-to-face revenues (90% of the total), and the further development of our analytics and decision tools, partially offset by continued print revenue declines. When expressed in sterling revenue growth was +2%.
Adjusted operating profit of £2,346m (£2,284m); underlying growth +6%: Growth was driven by revenue growth and close control of costs. When expressed in sterling adjusted operating profit growth was +3%.
Reported operating profit: Reported operating profit, including amortisation of acquired intangible assets, was £1,964m (£1,905m).
Interest and tax: Adjusted net interest expense was £201m (£183m). Adjusted tax was £465m (£473m). The adjusted effective tax rate was 21.7%. Reported tax was £292m after a £112m exceptional tax credit. The prior year reported tax charge was £65m after an exceptional tax credit of £346m related to the US Tax Cuts and Jobs Act.
Adjusted EPS growth in constant currencies +7%: Adjusted EPS expressed in sterling was +6% to 84.7p (80.2p).
Reported EPS: Reported EPS was 71.9p (81.6p) with a lower benefit in 2018 from the exceptional tax credits referred to above.
Dividend: We are proposing a full year dividend increase of +7% to 42.1p (39.4p) for RELX PLC. The long term dividend policy is unchanged. We will continue to grow the dividend broadly in line with adjusted earnings per share, subject to exchange rate considerations, whilst maintaining cover of at least two times over the longer term.
ROIC: Return on invested capital increased to 13.2% (12.9%).
Net debt/EBITDA 2.4x including leases and pensions: Net debt, including leases as per IFRS 16, was £6.2bn (£5.0bn) at 31 December 2018. The adjusted cash flow conversion rate was 96% (96%), with capital expenditure as a percentage of revenues of 5%. Excluding leases and pensions, net debt/EBITDA was 2.2x.
Portfolio development: In 2018 we completed nine acquisitions of content, data analytics and exhibition assets for a total consideration of £978m, and disposed of eight assets for a total of £45m.
Share buybacks: In 2018 we deployed £700m on share buybacks. Following acquisition spend above historical averages in 2018, we intend to deploy a total of £600m in 2019, of which £100m has already been completed.
Corporate simplification: The simplification measures which we announced in February 2018 were approved by RELX PLC and RELX NV in June, with over 99.9% of both parent company shareholders voting in favour, and became effective on 8 September 2018. Shares in RELX PLC are now listed in London, Amsterdam and New York, with full weightings in both the FTSE 100 and AEX indices.
Key business trends in the early part of 2019 are consistent with 2018, 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.