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interims 2003b

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Information about interims 2003b
News-Reports

Published on June 19, 2007

Author: Tarzen

Source: authorstream.com

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Slide1:  I N T E R I M R E S U L T S 2 0 0 3 Highlights:  Highlights Good performance in challenging markets Continuing strong progress against strategic priorities Acceleration of growth in second half On track to deliver 2003 targets Financial Update:  Financial Update Mark Armour Chief Financial Officer Adjusted Profit And Loss:  Adjusted figures exclude amortisation of goodwill and intangible assets and exceptional items Turnover Adjusted operating profit Operating margin Net interest expense Adjusted profit before tax % % % % change constant 2002 €m 2003 €m 2002 £m 2003 £m 2,467 813 505 20.5% 20.5% (172) (107) 641 398 6 months to 30 June 3,972 2,345 496 21.2% (88) 408 3,424 724 21.2% (128) 596 0 0 +3 Adjusted Profit And Loss Reported results reflect currency translation effects Science & MedicalRevenues up 6% - operating profit up 5% - margin 33.9%:  Revenues Operating profit Science andamp; Medical Revenues up 6% - operating profit up 5% - margin 33.9% Underlying revenues up 4%; operating profit up 5% Strong subscription renewals and growing online sales Science andamp; Technology revenues up 4% Health Sciences revenues up 3% Book publishing programme to accelerate second half £m €m £m €m LegalRevenues up 4% - operating profit up 17% - margin 20.7%:  Legal Revenues up 4% - operating profit up 17% - margin 20.7% Underlying revenues up 2%; operating profit up 13% Strong operating margin improvement in first half US Legal revenues up 3%; Online up 7% - strong small law US Corporate andamp; Federal Markets flat; strong risk solutions International underlying revenues up 3%; accelerating demand for online £m £m €€ €m €m Revenues Operating profit EducationRevenues down 5% - operating profit down 32% - margin 7.5%:  Education Revenues down 5% - operating profit down 32% - margin 7.5% Underlying revenues down 6%; operating profit down 35% First half growth unrepresentative; revenues and profit second half weighted US K-12 revenues flat; orders deferred to second half Testing revenues down 27%; loss of California contract International revenues up 1%; UK funding shortfalls £m £m €m €m Revenues Operating profit BusinessRevenues down 6% - operating profit down 12% - margin 17.2%:  Business Revenues down 6% - operating profit down 12% - margin 17.2% Underlying revenues down 6%; operating profit 12% Rate of decline in advertising markets slowed; few signs of recovery Margins defended through continued cost actions Investment in product quality and disciplined yield management Exhibitions resilient: revenues down 3% excluding cycling £m £m €m €m Revenues Operating profit Adjusted Profit Before Tax: Reconciliation:  Adjusted Profit Before Tax: Reconciliation -7% 596 +3% 408 2003 Adjusted profit before tax -10% (64) - (3) Currency translation effect +1% 7 +1% 5 Acquisitions/Disposals +2% 12 +2% 8 Base business 641 398 2002 Adjusted profit before tax % change €m % change £m 6 months to 30 June Adjusted figures exclude amortisation of goodwill and intangibles and exceptional items Cash Flow:  Cash Flow Total cash outflow before financing Free cash flow after dividends Other exceptional items Disposals Acquisition spend % conversion 2002 €m 2003 €m 2002 £m 2003 £m 6 months to 30 June Adjusted operating cash flow 177 36% (5) (209) (214) (97) 89 (41) (263) 160 32% (36) (190) (226) (90) 113 (37) (240) 258 36% (8) (305) (313) (141) 130 (59) (383) 258 32% (58) (306) (364) (145) 182 (59) (386) Dividends Free cash flow before dividends Reported Profit Attributable:  Reported Profit Attributable €0.10 €0.09 Reed Elsevier NV EPS 3.9p 3.9p Reed Elsevier PLC EPS 156 142 97 97 Reported profit attributable 117 36 73 25 Exceptional items (433) (332) (269) (228) Amortisation of goodwill and intangible assets 472 438 293 300 Adjusted profit attributable 2002 €m 2003 €m 2002 £m 2003 £m 6 months to 30 June Adjusted Earnings and Dividends:  Adjusted Earnings and Dividends -11% €0.08 +3% 3.3p Equalised dividends +3% -7% €0.28 +2% 12.6p Adjusted EPS % change constant Reed Elsevier NV Reed Elsevier PLC Strategy & Execution:  Strategy andamp; Execution Crispin Davis Chief Executive Officer Reed Elsevier:Key Objectives For 2003:  Reed Elsevier: Key Objectives For 2003 Maximise above market organic growth from four core businesses Execute and deliver on all strategic milestones Improve operating margin further through increased efficiency Deliver double digit earnings growth ON TRACK ON TRACK ON TRACK ON TRACK Science & Medical:ScienceDirect: Increasing Usage:  Science andamp; Medical: ScienceDirect: Increasing Usage Article downloads (millions) * 12 months to 30 June Science & Medical:ScienceDirect: Expanding Content:  Science andamp; Medical: ScienceDirect: Expanding Content Full text articles (millions) * At 30 June Science & Technology:Continued Low Attrition:  Science andamp; Technology: Continued Low Attrition * Full Year Estimate 2003* 2001 2000 1999 2002 Science & Medical: Health Sciences:  Science andamp; Medical: Health Sciences Successful front list publishing programme Accelerating electronic information business MD Consult 13% ahead Wide ranging introduction of new products Significant online education training opportunities Accelerating international expansion Local versioning of authoritative content Acquisition of Holtzbrinck STM in Germany Integration of book production and distribution on track Science & Medical: 2003 Outlook:  Science andamp; Medical: 2003 Outlook Revenue growth to accelerate Strong 2003 book publishing programme Continued growth in electronic sales Cost efficiencies and operational gearing to drive further margin improvement Expansion of content and innovative electronic services Legal:US Legal Online Usage Growing:  Legal: US Legal Online Usage Growing Growth in commercial searches Online revenues up 7% 1999 2002 2001 2000 2003* * To 30 June Legal: Risk Solutions: Long Term Growth:  Legal: Risk Solutions: Long Term Growth Growth in public records Legal:Optimising Cost Efficiency:  Legal: Optimising Cost Efficiency Operating margin 2003* c.22.5% *Full Year Estimate Legal: 2003 Outlook:  Legal: 2003 Outlook Maintain above market revenue momentum in US markets Acceleration of growth from new product initiatives and acquired businesses Margin improvement from focused cost actions, releasing funds for investment International – strong growth in online sales mitigated by print migration and weak corporate markets Education:US Schools Market:  Education: US Schools Market Attractive long term growth market Strong federal and state commitment Short term market weakness in 2003/2004 Low point in adoption cycle State budget pressures 2003 impact from federal funding modest Education:Winning Performance in 2003 Adoption Revenues:  Education: Winning Performance in 2003 Adoption Revenues # 1 # 1 Science # 4 # 1 Social Studies # 3 # 1 Mathematics # 1 # 1 Language Arts # 1 # 3 Reading/Literature Secondary Elementary Overall # 1 Overall # 1 = Based on estimated share of total available adoption revenues Education:Harcourt Assessment:  Education: Harcourt Assessment 2003 revenues impacted by loss of California Momentum regenerated: management, product, scoring, operations New edition of Stanford Achievement Test launched Awarded 7 out of 11 state contracts tendered Strong pipeline of state level bids Education: 2003 Outlook:  Education: 2003 Outlook US schools market broadly flat; small decline possible Success in state adoptions will come through as second half sales Continued success in state Testing contracts Margin improvement through continuing process efficiency Business: Trading environment:  Business: Trading environment No marked deterioration; no real sign of recovery Overall Variability by sector: Growth in Entertainment; Manufacturing and Electronics still weak; Construction late cycle US Economic conditions weaker; resilient subscription revenues mitigated advertising declines across all sectors Continental Europe UK Variability by sector; Aerospace, Social Services and Property holding up Impact of economic weakness, SARS and Iraq; cycling out of non-annual shows Global Exhibitions Business:Online Revenue Growth:  Business: Online Revenue Growth 2002 2001 2000 1999 2003* * Full year estimate Business: Market Outperformance:  Business: Market Outperformance Continuing to build market share on magazines Further improvement in yield management Tight control of costs Exhibitions challenging, but showing resilience Business: 2003 Outlook:  Business: 2003 Outlook Continued tough trading conditions across markets Product quality, sales effectiveness and yield management restrict revenue decline Continued margin improvement, mitigating impact on profitability Significant upside as economy recovers Product Upgrade Initiatives: :  State annotated codes e-Filing, e-Access, e-Discovery Integrated Risk Solutions capability Industry Dossier Global Legal Platform Reference works online Scirus search engine MD Consult upgrade EVOLVE medical education platform ScienceDirect multimedia capability Market leading adoption programmes Online HRW Basal Stanford 10 Texas STARgate Alzheimer Quicktest Totaljobs.com KellySearch 14 magazines relaunched RCD Connect 16 new exhibitions launched Product Upgrade Initiatives: Slide33:  Elsevier Dedicated Engineering/ Life Sciences/Chemistry sales forces Reed Business Customer research programme for all magazines LexisNexis Strengthened small law programme All Divisions Execution of sales audit programmes Elsevier Coordinated global price increase programme Elsevier/LexisNexis Implementation of global branding programme Harcourt Major upgrade of Open Territories sales force Harcourt Global Library marketing programme Reed Business RCD national accounts programme Reed Business Successful yield management programme LexisNexis Key account relationship programme Elsevier Introduction of Health Sciences telesales Sales and Marketing Initiatives: Infrastructure and Cost Initiatives::  Infrastructure and Cost Initiatives: New content management systems New customer fulfilment systems New editorial systems Off-shore printing/outsourcing Pre-plate restructuring Electronic author workbench New CRM systems 2000-2002: $500m of savings achieved 2003: $150m further savings “Shooting Stars”:  Risk Management e-Discovery, e-Filing, e-Access Endeavor Library Services International Healthcare e-Healthcare Clinical Testing Customised State Testing On-line recruitment, directories Variety franchise 'Shooting Stars' All businesses outperforming in dynamic growth sectors Annual revenue growth at high single/double digit Total revenue c.$700m Reed Elsevier:Key Objectives For 2003 Unchanged:  Reed Elsevier: Key Objectives For 2003 Unchanged Maximise above market organic growth from four core businesses Execute and deliver on all strategic milestones Improve operating margin further through increased efficiency Deliver double digit earnings growth ON TRACK ON TRACK ON TRACK ON TRACK Slide37:  I N T E R I M R E S U L T S 2 0 0 3 Appendices:  Appendices Turnover: Reconciliation:  Turnover: Reconciliation % change €m % change £m -14% 3,424 -5% 2,345 2003 Turnover -14% (541) -5% (117) Currency translation effect - (19) - (13) Disposals +1% 54 +1% 37 Acquisitions -1% (42) -1% (29) Base businesses 3,972 2,467 2002 Turnover 6 months to 30 June Currency Profile:Adjusted Profit Before Tax:  First half average rates: 2003 2002 $:£ 1.61 1.44 $:€ 1.10 0.90 €:£ 1.46 1.61 Full year average rates: 2003* 2002 $:£ 1.62 1.50 $:€ 1.13 0.94 €:£ 1.43 1.59 Currency Profile: Adjusted Profit Before Tax Euro 41% Sterling 21% US Dollar 33% Other 5% *2003 average rates (approx) if recent spot rates continue ($1.62:£1; $1.15:€1; €1.41:£1) Free Cash Flow:  2003 2002 2003 2002 £m £m €m €m Adjusted operating cash flow 177 160 258 258 Interest (85) (108) (124) (174) Tax (97) (88) (142) (142) Dividends (209) (190) (305) (306) Free cash outflow (214) (226) (313) (364) 6 months to 30 June Free Cash Flow Cash Flow Seasonality:  Cash Flow Seasonality Cash flow conversion % 90% 36% 136% 1,027 177 850 £m 12 months to 30 June £m £m 2003 2002 2003 90% 36% 136% 1,499 258 1,241 €m 12 months to 30 June €m €m 2003 2002 2003 H1 H2 H1 H2 Adjusted operating cash flow Exceptional Items:  Exceptional Items 153 (12) 95 (9) Net tax (charge)/credit (36) 48 (22) 34 Exceptional credit/(charge) before tax 14 82 9 57 Net profit on sale of fixed asset investments and businesses (50) (34) (31) (23) Charged to operating profit (36) (22) (22) (15) Acquisition related costs (14) (12) (9) (8) Reorganisation costs 2002 €m 2003 €m 2002 £m 2003 £m 6 months to 30 June 117 36 73 25 Total exceptional credit Balance Sheet:  Balance Sheet 1,030 1,000 669 694 Net debt 5,076 4,209 3,296 2,923 Other net liabilities/minorities 4,403 3,767 2,859 2,616 Shareholders’ funds 10,509 8,976 6,824 6,233 248 206 161 143 Investments 764 704 496 489 Tangible fixed assets 9,563 7,979 6,210 5,541 Goodwill/intangible assets 2002 €m 2003 €m 2002 £m 2003 £m (66) 87 (43) 60 Working capital 10,509 8,976 6,824 6,233 At 30 June Dividend Equalisation:  Dividend Equalisation Reed Elsevier PLC (p) 2003 2002 % Change Interim 3.3 3.2 UK tax credit rate Gross (p) Equalisation ratio Exchange rate (€:£) Reed Elsevier NV (€) 10% 10% 3.67 3.56 1.538 1.41 0.08 1.538 1.59 0.09 -11% +3% Slide46:  Slide47:  I N T E R I M R E S U L T S 2 0 0 3

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