RELX PLC — FY2020 Form 20-F summary
Reporting period: Year ended December 31, 2020; filed February 18, 2021. Although the request identifies 2020 Q4, this is an annual report and does not provide standalone fourth-quarter results. Financial statements are prepared under IFRS as issued by the IASB. Ernst & Young gave unqualified opinions on the financial statements and internal controls.
Financial results and liquidity
| Metric | FY2020 | FY2019 | Change / context |
|---|---|---|---|
| Revenue | £7,110m | £7,874m | Down 10%; underlying revenue down 9% |
| Reported operating profit | £1,525m | £2,101m | Down 27%; reported margin 21.4%, versus 26.7% |
| Adjusted operating profit | £2,076m | £2,491m | Down 17%; adjusted margin 29.2%, down 2.4 percentage points |
| Profit before tax | £1,483m | £1,847m | Down 20% |
| Net profit attributable to RELX PLC shareholders | £1,224m | £1,505m | Down 19%; EPS 63.5p versus 77.4p |
| Adjusted net profit attributable to shareholders | £1,543m | £1,808m | Down 15%; adjusted EPS 80.1p, down 14% |
| Cash generated from operations | £2,264m | £2,724m | Lower year over year |
| Net borrowings | £6,898m | £6,191m | Increased £707m; excluding currency effects, increased £673m |
| Total assets / shareholders’ equity | £14,145m / £2,099m | £13,789m / £2,166m | At December 31 |
Revenue mix shifted toward subscriptions (60%, £4,279m, versus 52% in 2019) and electronic delivery (87%, £6,179m, versus 75%). Face-to-face revenue fell to £345m from £1,260m. Staff costs were £2,555m, up from £2,498m.
Cash, investment and shareholder returns: Capital expenditure on property, equipment and internally developed intangibles was £364m. Acquisition cash paid was £872m, compared with £429m. Dividends paid were £880m; the Board proposed a 2020 final dividend of 33.4p, taking the full-year dividend to 47.0p versus 45.7p. Share repurchases were £150m, and the buyback programme was suspended in April 2020. Cash and cash equivalents at year-end were £88m. The company reported undrawn committed bank facilities of $3.6bn and described liquidity as ample.
Business performance and changes versus 2019
RELX provides information-based analytics and decision tools across Scientific, Technical & Medical (STM), Risk, Legal and Exhibitions. The pandemic drove the steep group decline, particularly through cancellation and postponement of in-person events; digital and subscription businesses were comparatively resilient.
| Segment | FY2020 revenue | FY2020 adjusted operating profit | Key comparison |
|---|---|---|---|
| STM | £2,692m | £1,021m | Revenue +2% reported; underlying +1%. Adjusted profit +4% reported. |
| Risk | £2,417m | £894m | Revenue +4% reported; underlying +3%. Adjusted profit +5% reported. |
| Legal | £1,639m | £330m | Revenue down 1% reported; underlying +1%. Adjusted profit unchanged reported. |
| Exhibitions | £362m | (£164m) | Revenue down 71%; adjusted operating loss versus £331m profit in 2019. |
STM and Legal experienced steeper declines in print, partly due to distribution disruption and customer office closures. Risk growth reflected analytics and decision tools, though some customer markets faced delays and disruption. Exhibitions held 169 physical events in 22 countries and 71 digital events, but venues were broadly closed outside parts of Asia for much of the year.
Unusual items, outlook and risks
- Exhibitions recorded £183m of exceptional costs excluded from adjusted operating profit: £61m for cancelled events, £82m of restructuring costs and £40m of impairment charges. The associated tax credit was £45m.
- Reported operating profit included £376m of acquired-intangible amortisation, including £65m of impairment in Legal and Exhibitions. Acquisition-related items were a £12m credit, versus an £84m charge in 2019.
- Disposals and other non-operating items produced a £130m net gain, largely from revaluation and disposal of venture-capital investments. Net finance costs were £172m, compared with £305m in 2019, which included a £99m charge for early bond redemption.
- Management said the 2021 Exhibitions schedule was being managed flexibly, with most events outside Japan and China then scheduled for the second half. Events remained subject to cancellation or postponement, and those held could have lower revenue. Virtual events generated up to around 20% of the equivalent physical event’s revenue.
- No quantitative group-wide earnings or revenue guidance is stated in the supplied filing text. Management’s longer-term capital policy targets cash-flow conversion of 90% or higher and a solid investment-grade credit profile; dividend policy targets at least two times adjusted-EPS dividend cover.
- Principal risks include Covid-19 and economic conditions; event closures and travel limits; competition and changes in technology or customer demand; data privacy, cybersecurity and regulatory compliance; access to content and data; intellectual property; acquisition benefits; pension assumptions; tax uncertainty; currency movements; refinancing and credit markets; and goodwill impairment. Goodwill was £7,224m at year-end.
- RELX reported that data-security and privacy proceedings and investigations had principally been settled; insurance and third-party indemnities reimbursed a substantial portion of agreed cash payments. The company said ongoing compliance and monitoring costs were not expected to materially affect financial position or results. Other ordinary-course legal proceedings were not expected to have a material adverse effect.
Important facts for investors to verify
- Review the incorporated 2020 annual report and financial statements for full cash-flow, segment, debt-maturity, pension and tax disclosures; this 20-F incorporates substantial financial detail by reference.
- Assess whether Exhibitions revenue and profitability recover, and how much of the planned 2021 event calendar actually proceeded.
- Track leverage and refinancing: net borrowings rose to £6,898m, while £986m of contractual debt and interest payments were due within one year.
- Reconcile reported and adjusted performance, especially the £183m Exhibitions exceptional costs, acquisition-related adjustments and £130m non-operating gain.
- Monitor cash conversion, acquisition spending, dividend coverage and the recovery of subscription and transactional demand.
- Consider the sensitivity of goodwill and intangible-asset valuations, uncertain tax positions, data-related obligations and currency exposure.