TIDMREL
7.00am BST
8 April 2020
TRADING UPDATE
RELX, the global provider of information-based analytics and
decision tools, comments on current trading and revises the full
year outlook in the light of the evolving COVID-19 pandemic.
Highlights In our three largest business areas, Scientific, Technical &
Medical, Risk & Business Analytics, and Legal, which together accounted for
84% of revenue and 87% of adjusted operating profit in 2019, the rate of
underlying revenue growth in the first quarter of 2020 was slightly higher
than in the same period of the prior year. These business areas saw only a
limited impact from COVID-19 in the first quarter, although the full year
outcome may be affected by changes in the evolving economic environment and by
activity levels in our customer markets. The Exhibitions business, which
accounted for 16% of revenue and 13% of adjusted operating profit in 2019, is
being impacted significantly by COVID-19, making the outlook for this business
area highly uncertain. As a result, we are unable to provide full year
guidance for the group as a whole. We have a strong balance sheet position
and our financing arrangements provide us with ample liquidity.
Our priority during the COVID-19 pandemic remains the health and
safety of our colleagues, our customers, and the wider community in
which we operate, whilst continuing to operate our businesses and
provide services to our customers. Given the electronic nature of
our business, almost all our staff are able to work from home. In
recent weeks, most of our 265 offices in 39 countries around the
world have switched to remote working, whilst some have re-opened
after a period of closure. With the exception of Exhibitions, and
some minor challenges with physical delivery of print products, the
business is operating with service delivery and product quality
being maintained at high levels, and we remain focused on improving
the services that we provide to our customers throughout and beyond
the COVID-19 pandemic.
Scientific, Technical & Medical (34% of FY 2019 revenue)
-- The year to date underlying revenue growth rate is slightly higher than
in the same period of the prior year. In primary research, subscription
renewal rates are in line with recent years, and growth in author-pays
open access revenue is very strong. Article submission growth rates, to
both subscription and author-pays open access journals, remain strong.
Databases & tools revenue is growing well, partly offset by declines in
print books. We have seen only a limited impact from COVID-19 so far.
-- Since January Elsevier has mobilised all of its research content, data
analytics know-how, and clinical insights to support the scientific and
medical response to the COVID-19 pandemic. The Novel Coronavirus
Information Centre, which provides researchers with free access to over
20,000 articles, has had almost three quarters of a million visitors to
date. Working with WHO, OSTP, NIH and the Wellcome Trust, Elsevier has
also made this significant body of knowledge available to global medical
research databases for full AI-enabled data mining.
-- Full year outlook: Positive revenue momentum continued through the first
quarter. As we go through the year, we could see some impact from the
COVID-19 pandemic in our customer markets, and prolonged restrictions on
movement could potentially impact our ability to conduct new sales in
person and distribute print products, but overall revenue stability is
supported by 75% being subscription based.
Risk & Business Analytics (29% of FY 2019 revenue)
-- The year started strongly and first quarter underlying revenue growth was
at a slightly higher rate than in the same period of the prior year.
Since the introduction of more extensive restrictions on movement in
parts of the US in the second half of March, transactional volumes have
softened and become more volatile in both Insurance and Business
Services. Subscription revenues, which represent almost 40% of the
divisional total, have continued to grow strongly across Insurance,
Business Services and Data Services.
-- Full year outlook: Notwithstanding the strong revenue performance across
the business in the early part of the year, the full year outcome will
depend on the extent and duration of the slowdown in business activity in
the US and on the level of transactional activity in our customer
markets.
Legal (21% of FY 2019 revenue)
-- The underlying revenue growth rate is currently slightly higher than in
the same period of the prior year, primarily driven by good growth in
legal analytics. We have seen only a limited impact from COVID-19 so far.
-- Full year outlook: Positive revenue momentum continued through the first
quarter. As we go through the year, we could see some impact if the
COVID-19 pandemic causes a prolonged slowdown in the legal services
industry, or from potential limitations on our ability to conduct new
sales in person and distribute print products, but overall revenue
stability is supported by nearly 80% being subscription based.
Exhibitions (16% of FY 2019 revenue)
-- In the first quarter around two thirds of the events that were originally
scheduled to take place went ahead as planned with revenues slightly
ahead of the same events in the prior year. In response to the COVID-19
pandemic, events representing around 5% of expected 2020 revenues have
been cancelled. Events representing around 30% of this year's expected
revenues, that were scheduled to take place in the first half, have been
postponed and are currently scheduled to take place later in the year, in
some cases in combination with other second half events. These events are
likely to experience some revenue attrition and extra costs associated
with the rescheduling. Following these actions, the majority of this
year's events are now scheduled to take place in the September-December
period. We are taking action to save costs across the business, whilst
continuing to serve our customers and maintain market presence to support
the long-term value of our brands.
-- Full year outlook: Depending on the impact and duration of the
restrictions resulting from the COVID-19 pandemic, further rescheduling
or cancellation of events may be necessary, making the full year outlook
highly uncertain.
Balance sheet & liquidity
-- We have a strong balance sheet position. This has been further
strengthened by the issuance of EUR2bn of long-term bonds in March 2020,
refinancing all of our term debt maturities for this year. After funding
our acquisition spend in the year to date, we had only around $250m of
net short term debt outstanding at the end of March. Our drawn debt
facilities do not contain any financial covenants. In addition, we have
approximately $3.5bn of undrawn, committed facilities which include a
covenant limiting the ratio of net debt to EBITDA to 3.75 times. For this
purpose, net debt includes leases but excludes pensions. At 31 December
2019 our net debt was GBP6.2bn and, measured on the basis used in the
covenant calculation, the ratio of net debt to EBITDA was below 2.2
times. On 22 April the current tranche of the share buyback programme
will be completed with GBP150m of the planned full year total of GBP400m
having been deployed. The Board of RELX has decided not to continue with
the next tranche of the share buyback programme at this time, and will
review this decision later in the year.
Chair succession update
-- As announced on 13 February 2020, a search process has commenced to
appoint a successor to Sir Anthony Habgood as Chair of the Company. This
process, which is being led by the Senior Independent Director and
overseen by the Nominations Committee, is continuing. However, in light
of the COVID-19 pandemic, and resulting practical issues including
personal movement, travel and other restrictions, it is possible that the
search process may take longer than originally anticipated, including
potentially extending into next year. Recognising these practical issues
and the importance of continuity of leadership during this time, Sir
Anthony remains willing to continue in his role until a successor has
been appointed. A further announcement will be made in due course once a
successor has been identified and the date of Sir Anthony's departure
from the role is known.
-S-
ENQUIRIES: Colin Tennant (Investors) Paul Abrahams (Media)
+44 (0)20 7166 5751 +44 (0)20 7166 5724
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.
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", "project", "plan",
"intend", "expect", "should", "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, current and
future economic, political and market forces, including the impact
of epidemics or pandemics; changes in law and legal interpretations
affecting RELX intellectual property rights and internet
communications; regulatory and other changes regarding the
collection, transfer or use of third-party content and data; demand
for RELX products and services; competitive factors in the
industries in which RELX operates; ability to realise the future
anticipated benefits of acquisitions; significant failure or
interruption of our systems; compromises of our data security
systems or other unauthorised access to our databases; legislative,
fiscal, tax and regulatory developments and political risks;
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 over 33,000 people, of whom almost half 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
GBP33bn/EUR38bn/$41bn.
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CONTACT:
RELX PLC
SOURCE: RELX PLC
Copyright Business Wire 2020
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