REED ELSEVIER 2009 RESULTS
(Thomson Reuters ONE) -
Issued on behalf of Reed Elsevier PLC and Reed Elsevier NV
18 February 2010
Robust financial performance in unprecedented global recession
* Core professional information revenues held up relatively well
* Advertising and promotion markets significantly impacted
* Costs reduced substantially
* Excellent first year profit growth from ChoicePoint acquisition
* Strong cash generation and improved financial position
Business trends continue in 2010; longer term prospects encouraging
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| Change at constant |
| Reed Elsevier 2009 2008 Change currencies |
| £m £m % % |
| |
| Revenue 6,071 5,334 +14% 0% |
| |
| Adjusted operating profit 1,570 1,379 +14% +1% |
| |
| Adjusted operating margin 25.9% 25.9% |
| |
| Reportedoperating profit 787 901 -13% -22% |
| |
| Adjusted pre tax profit 1,279 1,205 +6% -6% |
| |
| Adjusted operating cash flow 1,558 1,407 +11% -2% |
| |
| Net borrowings 3,931 5,726 |
+----------------------------------------------------------------------------+
+-----------------------------------------------------------------------+
|Parent Companies Reed Elsevier PLC Reed Elsevier NV |
| |
| 2009 2008 Change % 2009 2008 Change %|
| |
|Adjusted earnings per share 45.9p 44.6p +3% ?0.79 ?0.87 -8%|
| |
|Reported earnings per share 17.2p 22.1p -22% ?0.32 ?0.44 -27%|
| |
|Ordinary dividend per share 20.4p 20.3p 0% ?0.400 ?0.404 -1%|
+-----------------------------------------------------------------------+
Adjusted figures are supplemental performance measures used by
management.Reconciliations between the reported and adjusted figures are set out
in note 5 to the Combined Financial Information on page 30.
Commenting on the results, Anthony Habgood, Chairman of Reed Elsevier, said:
"We are pleased that our 2009 results were relatively robust given the depth of
the global recession. In addition, during the second half we substantially
strengthened our balance sheet both through an equity placing and through good
cash generation. In November, Erik Engstrom took over as CEO and, as expected,
has hit the ground running. The late cycle nature of some of our markets makes
for a tough environment in 2010 but the fundamentals of our businesses are
strong, our balance sheet is in good shape and new management is in place with
the background, experience and ambition to drive the business forward."
Reed Elsevier's Chief Executive Officer, Erik Engstrom, commented:
"Our professional information revenues held up relatively well in what was a
difficult year for most of our customers. However businesses dependent on our
customers' marketing budgets were hit hard.
In the near term, some of our customer markets remain under pressure but longer
term our prospects are encouraging. We have high quality assets in attractive
global growth markets and we are focusing each business on its own top
priorities in order to capture these growth opportunities. Across Reed Elsevier
we are committed to delivering world class information and tools that enable our
customers to make critical decisions, enhance productivity and improve outcomes
and this is combined with a relentless pursuit of process innovation and cost
efficiency. I am convinced that these goals will deliver increased value for our
shareholders."
Robust financial performance in unprecedented global recession
- Core professional information revenues held up relatively well
Elsevier (44% of adjusted operating profits)
* Revenue growth +4%, adjusted operating profit +9%, at constant currency
* Strong growth in electronic clinical reference, clinical decision support
and nursing and health professional education; continued weakness in pharma
promotion
* Solid science journal subscription renewals from 2008 supported 2009 revenue
growth
LexisNexis (42% of adjusted operating profits)
* Revenue growth +14%, adjusted operating profit +13%, at constant currency,
including full year contribution of ChoicePoint acquisition
* Core law firm markets flat in US and marginally lower internationally
reflecting downturn in legal services industry
* US directory listings well behind prior year; corporate, government and
academic markets lower
* Risk Solutions sees strong growth in Insurance and Government markets but
decline in other markets; profits grow strongly
- Advertising and promotion markets significantly impacted
Reed Exhibitions (10% of adjusted operating profits)
* Revenues -21%, adjusted operating profits -28%, at constant currency
* Lower space sales and fewer paying delegates as corporations cut back on
marketing spend; net cycling out of biennial exhibitions
Reed Business Information (6% of adjusted operating profits)
* Revenues -18%, adjusted operating profits -35%, at constant currency
* Advertising markets depressed; subscriptions less impacted; growth in data
services
- Costs reduced substantially
* Significant actions across the cost base including the previously announced
restructuring programmes
* Underlying costs (i.e. excluding acquisitions and disposals) were 5.4% or
£227m lower
* Adjusted operating margin flat; 0.8% points lower underlying, despite 6%
underlying revenue decline
- Excellent first year profit growth from ChoicePoint acquisition
* Proforma revenues +1%, adjusted operating profits +44%, at constant
currency
* Strong revenue growth in Insurance business; declines in employment
screening and other markets
* Strong growth in profitability driven by Insurance business and significant
integration benefits
- Strong cash generation and improved financial position
* Conversion of adjusted operating profit into cash at 99%
* Free cash flow of £1,051m before restructuring spend and dividends
* £829m net proceeds of equity placing in July 2009 used to reduce debt
* Net debt at 31 December 2009 £3.9bn ($6.3bn; ?4.4bn)
* Net debt/adjusted ebitda: 2.9x (pensions and lease adjusted) (LTM June
2009: 3.6x)
Parent company earnings per share and dividends
* Adjusted earnings per share +3% to 45.9p for Reed Elsevier PLC and -8% to
?0.79 for Reed Elsevier NV; -9% at constant currencies
* Equity placing in July 2009 has 4% dilutive effect on adjusted earnings per
share; further 4% full year effect expected in 2010 (8% in first half)
* Reported earnings per share -22% to 17.2p for Reed Elsevier PLC and -27% to
?0.32 for Reed Elsevier NV: principally reflects RBI intangible asset and
goodwill impairment and higher charges for intangible asset amortisation,
exceptional restructuring and acquisition integration
* Reed Elsevier PLC final dividend flat at 15.0p; equalised Reed Elsevier NV
final dividend +1% to ?0.293. Total dividends for 2009 +0.5% to 20.4p for
Reed Elsevier PLC and -1% to ?0.400 for Reed Elsevier NV. (Difference in
growth rates in the equalised dividends reflects changes in the
euro:sterling exchange rate since prior year dividend announcement dates)
Outlook
As expected, business trends seen in the second half are continuing in 2010,
particularly with regard to late cycle effects in our relatively resilient
professional markets. Advertising and promotion and certain other markets, such
as employee screening, remain difficult. The rate of revenue decline is,
however, expected to slow as comparatives get easier. A modest reduction in
adjusted operating margin is expected due to a weak revenue environment and
increased investment in legal markets.
* Elsevier: Good growth is expected to continue in electronic medical
reference, clinical decision support and health professions, although pharma
promotion remains weak. Completion of subscription renewals for 2010 is well
progressed. Academic budget pressures are continuing. Lower overall revenue
growth is expected.
* LexisNexis: Trends in US legal and international markets are expected to
continue, reflecting pressures on the legal industry and late cycle effects
on subscription revenues. Good growth is continuing in the insurance
segment in Risk Solutions. Adjusted operating margin is expected to be
lower, reflecting a weak revenue environment and increasing product,
marketing and infrastructure spend in the legal businesses, partially
mitigated by continuing cost actions and the growing profitability of the
ChoicePoint business.
* Reed Exhibitions: Forward bookings remain cautious with exhibitors
committing later. Annual show revenues are expected to be lower. 2010 will
see benefit of net cycling in of biennial shows.
* Reed Business Information: Current trends are expected to continue with
advertising markets remaining difficult, late cycle effects maintaining
pressure on print subscriptions and good growth in data services. Revenues
are expected to be lower and re-engineering of portfolio and costs will
continue.
Late cycle effects are continuing in 2010 and will be particularly severe in the
first half which will also see dilution from the July 2009 share placings. We
are confident that Reed Elsevier has high quality assets in attractive global
growth markets and that the longer term prospects are encouraging.
ENQUIRIES: Sybella Stanley (Investors) Patrick Kerr (Media)
+44 (0)20 7166 5630 +44 (0)20 7166 5646
The complete results can be downloaded below
[HUG#1385816]
Reed Elsevier 2009 Results: http://hugin.info/142946/R/1385816/344553.pdf
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Datum: 18.02.2010 - 01:27 Uhr
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