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Reed Elsevier Interim Results 2014

July 28, 2014

ENP Newswire - 28 July 2014

Release date- 25072014 - Reed Elsevier, the global professional information company, reports continued underlying growth in revenue, operating profit and earnings in the first half of 2014.

Commenting on the results, Anthony Habgood, Chairman, said: 'Reed Elsevier grew underlying revenue, operating profit and earnings in the first half of 2014, and continues to execute on its strategic and financial priorities. We are recommending a 5% increase in the interim dividend for Reed Elsevier PLC and a 14% increase for Reed Elsevier NV, which, in combination, are broadly in line with adjusted earnings per share growth at constant currencies.'

Chief Executive Officer, Erik Engstrom, commented: 'In the first half we continued the transformation of our business, adding datasets and analytics and building out our leading global platforms, primarily through organic development.'

'Our financial position and cash flow profile remain strong, and in the first half we have deployed GBP400m on share buybacks, leaving a further GBP200m to be completed in the remainder of the year.' 'Underlying trends in our business continue to be positive as we enter the second half, and we remain confident that we will deliver another year of underlying revenue, profit, and earnings growth in 2014.'


Reed Elsevier continued to make good progress against its strategic and financial priorities in the first half of 2014.

Revenue of GBP2,847m/EUR3,473m; underlying growth +4% (+3% excluding biennial exhibition cycling): The overall underlying growth rate reflects continued growth of +5-7% in electronic and face-to-face revenues, which accounted for 84% of the first half total, partially offset by continuing print revenue declines.

Adjusted operating profit of GBP860m/EUR1,049m; underlying growth +5%: The improvement in profitability reflects a combination of underlying revenue growth, process innovation and portfolio development. Reported operating profit, after amortisation of acquired intangible assets, was up +2% to GBP697m/+5% to EUR850m.

Interest and tax: Adjusted net interest expense was GBP23m/EUR25m lower at GBP69m/EUR84m reflecting the benefits of term debt refinancings and other initiatives over the last 18 months. The adjusted effective tax rate was unchanged at 23.5%.

Adjusted EPS: Growth at constant currencies +11%; first half EPS benefited from timing of term debt refinancing and share buybacks. Reed Elsevier PLC 27.8p (26.5p); Reed Elsevier NVEUR0.52 (EUR0.48).

Reported EPS: Reed Elsevier PLC 20.0p (22.0p), Reed Elsevier NVEUR0.39 (EUR0.42), reflecting the absence in the first half of 2014 of a non-recurring deferred tax credit recognised in the first half of 2013.

Equalised interim dividend growth for Reed Elsevier PLC +5% to 7.00p; for Reed Elsevier NV +14% to EUR0.151: The difference in interim dividend growth rates reflects exchange rate movements since July 2013.

Net debt/EBITDA 2.3x on a pensions and lease adjusted basis (unadjusted 1.8x): Net debt was GBP3.3bn/EUR4.1bn at 30 June 2014. The adjusted operating cash flow conversion rate was 89% (85%). For the full year we continue to expect a cash conversion rate of over 90%, in line with prior years.

Organic development: In the first half of 2014 we continued to develop our global technology platforms across the business, launch new products and services in both existing and adjacent market segments, and extend our reach in high growth markets and geographies. Capital expenditure as a percentage of revenues was slightly lower at 4.3% (5.0%) due to phasing.

Acquisitions & disposals: We completed 10 small acquisitions of content, data assets and exhibitions in the first half of 2014 for a total consideration of GBP95m. We also completed the disposal of 6 assets for a total consideration of GBP26m.

Share buybacks: We previously announced our intention to deploy a total of GBP600m on share buybacks in 2014 as part of our pragmatic approach to ensuring that the value compounding within the business translates into shareholder value. So far we have completed GBP400m of this total, leaving a further GBP200m to be deployed by the end of the year.


The full year outlook is unchanged. Underlying trends in our business continue to be positive as we enter the second half, and we remain confident that, by continuing to execute on our strategy of delivering improved outcomes to our professional customers, primarily through organic investment, we will deliver another year of underlying revenue, profit, and earnings growth in 2014.

Investor Contact:

Colin Tennant

Tel: +44 (0)20 7166 5751

Media Contact:

Paul Abrahams

Tel: +44 (0)20 7166 5724

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Source: ENP Newswire

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