REL: Reed Elsevier: Interim Management Statement
UK Regulatory Announcement
First Nine Months Trading in Line with Expectations, Full Year Outlook
Reed Elsevier, the global professional information company, has today issued a
statement relating to the first nine months trading performance and outlook
for the full year.
*Underlying revenue growth +4% (+3% excluding the effect of biennial
*All five business areas contributing to underlying growth.
*On track to deliver underlying revenue and profit growth in line with
Chief Executive Officer, Erik Engstrom, commented:
“In the first nine months of 2012 we have made good progress in systematically
transforming our business, primarily through organic investment, supplemented
by selective portfolio developments. The macro economic environment and its
impact on our customers’ markets remain uncertain, but by focusing on the
fundamentals of our business, we expect to continue to improve the quality of
Nine month trading performance and full year 2012 outlook by business area:
*Underlying revenue growth +2%.
*Growth in databases and tools has remained strong. Double digit growth in
usage and submissions has continued to drive good revenue growth in
scientific and health research. Continued declines in print books and
pharma promotion revenues.
*In August 2012 the management structure of Elsevier was reorganised,
combining the leadership of Science & Technology and Health Sciences. The
pro forma revenue streams that formerly made up Science & Technology would
have grown +5% underlying in the first nine months, and Health Sciences
would have remained flat.
*Full year outlook: We expect the trends for the first nine months to
continue, with good growth in electronic revenues and declines in print
books and pharma promotion.
LexisNexis Risk Solutions
*Underlying revenue growth +6%.
*Insurance solutions growth +7%, underpinned by good growth in established
and new applications and services. Business Services growth +6% reflecting
demand for risk management tools across financial institutions and other
*Continued modest growth in Screening, largely driven by new product
initiatives and new business wins. Good growth in state & local government
revenues. Moderating declines in federal government revenues.
*Full year outlook: We expect the good growth in Insurance and Business
Services to continue. Screening continues to be subject to US hiring, and
the outlook for government spending remains mixed.
LexisNexis Legal & Professional
*Underlying revenue growth +1%.
*Growth in usage and new sales of online research and litigation tools,
partially offset by declines in print books and listings.
*Roll out of the new technology platform is on track and new applications
have been well received by customers. Plans for international releases on
the New Lexis platform are proceeding well.
*Full year outlook: Customer markets remain subdued reflecting the
uncertain economic conditions in many of our markets. We expect the trends
of the first nine months to continue as we execute against our plans to
improve the business.
*Underlying revenue growth +15% (+7% excluding biennial cycling); first
half annual exhibition phasing reversed in Q3, eliminating phasing impact
on year to date growth rate.
*Strong growth in the US. Modest growth in Europe, with good growth in core
franchises moderated by slowing growth in southern Europe. Outside the US
and Europe strong growth continued, with emerging markets growth well into
*New launch activity focused on high growth sectors and geographies, with
20 new launches in the first nine months.
*Full year outlook: Full year results will reflect positive biennial
cycling. Excluding cycling, we expect strong growth outside Europe to
continue. Growth rates in Europe will continue to be impacted by the
economic environment in southern Europe.
Reed Business Information
*Underlying revenue growth +1%.
*Major Data Services continued to generate good underlying growth, with
ICIS, BankersAccuity and XpertHR all delivering double digit growth,
moderated by continued weakness in US construction data.
*Leading Brands and Online Marketing Solutions saw some growth, but revenue
from Other Magazines & Services continued to decline.
*Full year outlook: We expect the trends of the first nine months to
continue, with good growth in Major Data Services partially offset by
declines in Other Magazines & Services.
Portfolio development and share buy backs
*We intend to continue to transform our business through organic
development, and by disposing of businesses that no longer fit our
strategy. We expect disposals to be mildly dilutive to EPS in the short
term, and we intend to use gross divestment proceeds to buy back shares,
mitigating this impact.
*Based on transactions either completed or well progressed so far this
year, we are raising the amount that will be deployed on share buybacks
this year to £250m (€310m), of which £158m (€193m) has already been
deployed. In the event that additional disposals are completed or
announced this year, gross disposal proceeds will also be used to buy back
*Reed Elsevier’s financial position remains strong with good cash
*Since the interim results we have issued €550m of 8 year term debt at a
coupon of 2.5%, and $560m of 10 year term debt with a coupon of 3.125%.
Related to these transactions, we have retired $300m of high coupon term
- ENDS -
Paul Abrahams (Media)
Tel : +44 20 7166 5724
Colin Tennant (Investors)
Tel: +44 20 7166 5751
Notes to editors
About Reed Elsevier
Reed Elsevier Group plc is a world leading provider of professional
information solutions to the science, medical, legal, risk management, and
business to business sectors. The group employs more than 30,000 people,
including 16,000 in North America. Reed Elsevier Group plc is owned equally by
two parent companies, Reed Elsevier PLC and Reed Elsevier NV; the combined
market capitalisation of the two parent companies is approximately
£13bn/€16bn. Their shares are traded on the London, Amsterdam and New York
Stock Exchanges using the following ticker symbols: London: REL; Amsterdam:
REN; New York: RUK and ENL.
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