RELX Plc Q2 FY2025 earnings call

Management Statement and Operational Highlights

• Financial Performance: Underlying revenue growth 7%, underlying adjusted operating profit growth 9%, adjusted earnings per share growth 10% at constant currency. Interim dividend increased by 7% to 19.5p per share.
• Print Transition: Print has gone from 64% of revenue to 4% over 25 years. Now managing and reporting remaining print separately, focusing on customer service and value.
• Strategic Direction: Shift towards higher growth analytics and decision tools. Risk to sustain strong long-term growth, STM and Legal to continue improving growth trajectories, Exhibitions to sustain strong long-term growth.
• Acquisitions and Buybacks: Spent GBP 262 million on 3 acquisitions in H1, deployed GBP 1 billion on share buybacks, leaving GBP 425 million remaining for the year.

Segment Performance

• Risk: Underlying revenue growth 8%, underlying adjusted operating profit growth 9%. Over 90% of divisional revenues from machine-to-machine interactions. Driven by financial crime compliance, digital fraud, identity solutions, and strong new sales.
• STM (excluding print and print-related): Underlying revenue growth 5%, underlying adjusted operating profit growth 7%. Driven by higher value-add analytics and decision tools. Generative AI capability extended across majority of revenue base. Primary research with article submissions up over 20%, articles published up 10%.
• Legal (excluding print and print-related): Underlying revenue growth 9%, underlying adjusted operating profit growth 11%. Driven by shift to higher growth, higher-value legal analytics. Lexis+ AI and Protégé AI legal assistant progressing well.
• Exhibitions: Underlying revenue growth 8%, underlying adjusted operating profit growth 9%. Established strong ongoing growth above pre-pandemic levels. Margins significantly above pre-pandemic levels.

Guidance

• Full Year: Expect continued strong underlying revenue growth. Risk: underlying adjusted operating profit growth slightly exceeding revenue growth. STM: continued good underlying revenue growth, underlying adjusted operating profit growth slightly exceeding revenue growth. Legal: continued strong underlying revenue growth, underlying adjusted operating profit growth exceeding revenue growth. Exhibitions: continued strong underlying revenue growth, improvement in adjusted operating margin over prior full year.

Risks

• Market Factors: Potential impact of U.S. government spending and policy changes on revenue, though no material impact seen in H1.
• Print Transition: Revenue could step down more quickly due to proactive steps like outsourcing and joint ventures, but profit decline expected to be in high single digits annually.

Question and Answer

Q: Any additional revenues from NIH's open access policy change?

A: Erik Engstrom says no material impact seen yet, as single institution changes unlikely to affect trajectory.

Q: Rationale for partnership with Harvey in Legal?

A: Erik Engstrom explains it adds value to customers by providing seamless interaction with their tools and leveraging their traditional strength in legal content.

Q: Impact of print resegmentation on working capital?

A: Nicholas Luff says no material impact, cash conversion was strong due to timing of receipts/payments.

Q: Exhibitions margin guidance for full year?

A: Nicholas Luff says full year margins expected to improve, though seasonality may mean not as much as H1, but benefit from disposals and underlying performance.

Q: Print disposal impact on revenue?

A: Nicholas Luff says revenue could step down more quickly due to proactive steps, but focus on profit and value.

Q: Risk insurance growth in second half?

A: Erik Engstrom says main driver is new product rollout, market factors like shopping events not the main driver, and Risk continues to grow strongly.

Q: U.S. university spend pressures on STM?

A: Erik Engstrom says no significant historical impact, and they work with customers to fit within budget constraints.

Q: Exhibitions event forward booking trends?

A: Nicholas Luff says diverse portfolio, no specific region/vertical called out, business in good shape.

Q: Group like-for-like growth excluding print?

A: Nicholas Luff explains print impact and how like-for-like figures are calculated, aligning with the 7% growth.