RELX PLC (REL) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by, and welcome to the RELX trading update call. [Operator Instructions] Today's conference is being recorded today. And I would now like to hand over the conference to your speaker, Nick Luff. Please go ahead.

Thank you, Sarah. Good morning, everybody. I'm Nick Luff, CFO of RELX, and with me this morning is Colin Tennant, our Head of Investor Relations. I will make an initial introduction, and then we will take your questions. As you've seen from the statement this morning, our 3 largest business areas, STM, Risk and Legal, have continued to see a gradual improvement in underlying revenue growth rates since the end of the first half, and the full year outlook for these 3 businesses is unchanged. Exhibitions has been significantly impacted by COVID-19, of course, and we now have much greater visibility on the impact on the full year results for 2020. Our operating cash conversion remains strong, and we've continued to make selective acquisitions that support our organic growth strategies. In Scientific, Technical & Medical, underlying revenue growth for the 9 months was 2%, in line with the prior full year and slightly ahead of the first half of 2020, with continued good growth in electronic revenues. In primary research, we continue to see exceptionally strong growth in the number of articles submitted to our journals. Submissions to our subscription journals are up by around 25% so far this year, and submissions to our open access journals have roughly doubled, driving strong growth in author pays revenues. We have continued to launch new -- dedicated author pay of open access journals, adding around 100 new titles to the portfolio so far this year. In databases and tools, we have seen particularly strong demand across the corporate life sciences, research management and health education segments and strong growth in many of our clinical solutions. In life sciences, RELX has recently strengthened its content enrichment and analytics capabilities and the recent acquisition of SiByte adds enhanced text and data mining capabilities to our life sciences offering. In academic research management, we have seen both cyber and pure growing well into double digits. In health education, as you would expect, we have seen strong demand for remote learning solutions. And already this year, we have set up remote participation facilities for over 600 nursing schools. [Sharepath], our digital courseware service, has seen strong growth, and our 3D anatomy platform acquired at the end of last year has seen activity levels almost double. In print books, the rate of decline has moderated, but remains variable and higher than historical averages for the year-to-date as we enter the important fourth quarter. On the flip side, we have seen an acceleration in the long-term migration of print digital as a result of the pandemic, with strong growth from electronic reference products. In Risk & Business Analytics, underlying revenue growth was 3% in the first 9 months, in line with the position at the half year. Transactional revenues have continued to see improved growth rates in both insurance and business services since the end of the first half. In Insurance, shopping activity continues to grow well. Driven miles in the U.S. are picking up and are now running at over 90% of pre-COVID levels, with claims volumes continuing to increase gradually. We have also seen some recovery in new driver additions as motor vehicle offices reopen following the closures earlier in the year. We've continued to gain momentum in our connected car business, leveraging contributory data sets from the OEMs to offer new services to both insurance carriers and car manufacturers, and the number of manufacturers contributing data continues to grow. In Business Services, as you would expect, areas serving online commerce are performing strongly. We continue to see high growth in products providing services for online identity verification, fraud prevention and financial crime compliance. Both ThreatMetrix, a provider of digital identity solutions, and Emailage, a provider of e-mail-based fraud prevention solutions, are growing in the 30% range. The integration of Emailage, which we acquired earlier this year, is now largely complete and the development of products combining new data sets is progressing well. Subscription revenue and risk has been resilient overall. In data services, which is mainly subscription-based, some segments, such as aviation, have been impacted by COVID-19-related disruption, but overall, renewals are currently going well. We have also seen a step-up in new sales in recent weeks, albeit we're still experiencing some delays in customer product implementations. Our government business within risk is performing strongly. In Legal, underlying revenue growth was 1%, in line with the first half. Electronic revenues have continued to grow well, driven by the development and rollout of Legal analytics and new integrated functionality. In September, we launched Access Plus in the U.S., using natural language processing to unite multiple legal research and analytics functions, including advanced research, practical guidance and brief analysis and a fast, modern and efficient user experience. Since launch, the response of Access Plus from both customers and the legal press has been very positive. As in STM, we've seen an acceleration in migration from print to digital and legal. Print revenue declines have moderated since the end of the first half, although the rate of decline for the year-to-date remains higher than historical averages. In Exhibitions, we have seen a reopening of venues in a number of countries. We've been able to run physical events in China since June, in Korea since July, in Japan since August, in Russia since September and in Turkey from this month. We have more events scheduled in all 5 of those countries between now and the year-end as well as in Thailand and in India. We have run some very small events in France and Austria, but the main exhibition venues in Europe and the U.S. remain closed. The events that have run have typically been smaller than their prior editions, sometimes only half the size, but a few have seen higher revenues than they did last year. To give you a sense of the level of activity, in September, we had 22 physical events with more than 4,000 exhibitors and over 200,000 visitors, and satisfaction measures were generally higher for both groups. The physical events we are running are being supported by enhanced digital services, including remote participation by both exhibitors and attendees. In addition, we've held a number of stand-alone virtual events, such as MIPCOM, the TV rights event, which would normally be in Canada at this time of year, but which took place entirely online just last week. As we said in the statement, we now expect full year revenue for Exhibitions to be between GBP 330 million and GBP 360 million, with most of the physical event revenue still to come this year being from Japan and China. Our costs will vary to some extent with the revenue, but we expect cost for 2020, direct and indirect, to total between GBP 530 million and GBP 540 million. We are taking action to reduce the cost base of the business and are incurring some one-off restructuring charges to do that. The cost guidance I gave excludes those one-off restructuring costs as well as costs relating to canceled events, most of which were already accrued in the first half when we were rescheduling and canceling events at very short notice. We will now open the call to questions.

[Operator Instructions] And your first question comes from the line of Patrick Wellington from Morgan Stanley.

A couple of questions. At the very start, you said you saw a gradual improvement in STM, Legal and Risk. Of those, only one of them actually saw an improvement over the half year growth rate. So are you suggesting that within the confines of the decimal points that the -- those businesses actually saw a higher growth rate in Q3 than Q2? That's the first question. Second question is, can you give us an idea of the size of the exceptionals in the Exhibitions business? And the third question is, in the risk business, are you -- or can you talk around that a little bit more? It sounds as if the transactional businesses are growing at above the divisional growth rate and that you've been slightly let down by the subscription businesses in this quarter. So can you kind of walk us through that dynamic?

Yes. Well, I might answer the third one and as part of the answer to the first one. I mean, directionally, you're absolutely right. You're right, Patrick. As you say, STM, there was a moderation in the print declines, electronic growth continued well, and you saw that as a result it went up from 1% growth to 2% growth. The other 2, Legal had a similar dynamic with the print declines moderating, but continue to get decent growth out of the electronic side. It just wasn't enough to change the reported growth number. And Risk, as we've said, we are running slightly better than half of what you might call the normal rate from historical averages, which is better than what we said at the time at -- at the time of the midterm results in July, but again, within the growth rate figures, it hasn't changed it. And there's a bit of a mix in there, as your question suggests. Good recovery [Audio Gap] in some of the transactional volumes. Subscription side actually holding up pretty well, but we did have some challenges with new sales earlier in the year and, of course, that will flow through into the numbers a bit later. And there is sort of some delays as we mentioned in customer products implementation, which is just holding it back a bit. But overall, I think it's going well, and we are seeing -- add it all up, there is an uptick. Your second question was on the size of exceptionals. Yes. Just -- I mean, to -- we've got in there -- you're talking about Exhibitions, of course, and exactly what the final presentation and accounting treatment of all these things, we'll have to see and see what's appropriate in the context of the full year results. But the guidance we're giving does explicitly exclude the cost related to canceled events and the restructuring charges. The cost of the canceled events will probably be in the GBP 60 million to GBP 70 million range. Of that, about GBP 50 million was in the first -- we actually accrued in the first half. So obviously, that was when it was more difficult in terms of canceling at very short notice. And the restructuring costs, add those in, you will be into triple digits. We haven't yet finalized exactly how much that will be, but we are looking to take a substantial chunk out of the cost base, and that does involve some one-off charges to do it.

And what level of annual savings would you expect from that restructuring cost, just as a broad indicator, GBP 50 million, GBP 100 million?

Yes. We're looking to -- I mean, if you take the indirect costs of the business, which are about 40% of the cost base in a normal year, then we're looking to reduce those costs by 20%, 25%. So that's at the top end of your range that you just gave.

Great. So circa GBP 100 million hit start for next year?

Yes. Clearly, in the environment we have, we want to make sure the business has got a cost base and as well that's appropriate for the size of the business we're running and this gives it the best position to move forward from.

Your next question comes from the line of Katherine Tait from Goldman Sachs.

Two questions from me. Firstly, on STM, good to see the sort of acceleration over this quarter. I noticed within the sort of details that you gave there, there was no sort of commentary around renewals and sort of update there. So curious if you can kind of give us a sense on how renewals are trending, not just the sort of submissions rates, and also remind us how much of your sort of revenue within subscriptions is up for renewal over the next 12 months. And then my second question sort of dovetails into -- from Patrick's on the cost base for acquisitions next year. Across a sort of range of different scenarios ranging from a sort of a more [firm] recovery versus sort of a more varied outlook on what can restart next year, how should we think about the cost base? You talked about that sort of indirect cost element coming down by 20%, 25%. Would you look to push that further if that was -- if we did see a sort of more challenging year next year? And if you could just give us sort of some thoughts on how you're thinking about that would be super helpful.

Okay. So on the first question on STM, as you say, the submissions to the journals, both subscription and author pays, very strong. I think good evidence that the whole pace of scientific research, the information intensity of scientific research continues to increase. Your question on renewals, and I presume you're talking specifically about the academic institutions and their subscriptions, which, of course, is about 40% of STM's overall revenue base. So just bear that in mind. They are, as you know, mostly multiyear contracts. So we do typically have between 0.5 and 1/3 of those contracts coming up for renewal each year. We are just at this -- in this moment in the year, we are just entering the renewal season for most contracts. And that renewal season does last several months. So it's too early to make any comments on how that is going, and we'll have to see. Just remember also that the -- there's another 60% of revenue in STM and the environment there is whether it's corporate life sciences or in the research management tools, health education, overall, quite a positive environment. Your second question was about the Rx cost base. Yes. I mean, clearly, managing the costs for different scenarios is very important. We're very focused on how we do that. Clearly, the direct costs are the things that you manage based on which shows are running and making sure we stay flexible with those and for different scenarios, we'll be looking to flex those because you can flex those as you've seen this year, you can flex those quite quickly. It obviously takes a bit longer to manage and change the indirect cost base. So we're obviously implementing plans and getting ourselves in the right position going into 2021 on indirect costs. Clearly, we'll have to look at where we are and how things progress, but it does take time to adjust the indirect cost base. So the short-term focus in different scenarios is more perhaps more in the direct costs.

Your next question comes from the line of Sami Kassab from Exane BNP Paribas.

Three questions, if I may, as well. On Exhibitions, can you comment on how you have addressed the calendar and the scheduling of the shows for 2021? And in particular H1, have you moved shows that traditionally are held in H1, like, I don't know, the [midam] or the PTA, to later dates? Or are you keeping the traditional show schedule with -- for 2021? Secondly, you've referred to delays in implementations within Risk. Can you give us a little bit more color on what type of products you're referring to? What kind of end market are these delays referring to? Is it just aviation or other markets as well? And lastly, an update on the ongoing subscription renewal process, not in STM, but in Legal, please.

Okay. So the first question is about the Rx calendar Yes. Obviously, we're looking very hard at next year's calendar and what fit that should be. We are aiming at this point to run -- if you take the annual events and go back to sort of 2019, the last normal year, if you like, we are aiming to run about 90% of the annual events that we ran in 2019 in 2021. Cycling is a little bit more confused because of some shows that were obvious cycling of becoming even and vice versa as we've juggled the program. But overall, looking to run most of the shows. We are, as you've suggested in your question, pushing things back in the calendar to reduce the risk and give ourselves the best opportunity to operate the events. So of the things we have scheduled for '21 at this point, only 10% of them, and it would normally be more like 25%, only 10% are in the first quarter. And so we've pushed them back in the year and are managing the program accordingly to reduce the risk profile. Your second question was about the customer product implementations in Risk. That's mainly in data services, I think where we're specifically pointing to, but it includes things where the customer has to -- a lot of these products are very, very embedded into the workflow, into the processes of the customer. And if you take anti-money laundering product, the bank uses, obviously, that's all machine to machine, it's having to operate in real time. And it does require, therefore, the customer, the bank to make changes to their own processes and systems and ensure -- embed our product and the links into our systems that are needed to do that. And there's been a natural reluctance on customers as they move to different working arrangements, remote working arrangements to make significant changes to their systems. And that's easing up, but the IT departments were perhaps focused on how to manage remote working for a few months rather than dealing with product outlays and new module implementation. So it's that sort of thing that's just slowed us down a bit. But I would point it most specifically at data services and just a few things where it's very embedded. In Legal, on the market environment there and renewals, obviously, there's less of a renewal season in Legal. It's more of a continuous process spread across the year. It's a similar dynamic with customers on multiyear contracts with a portion of the base coming up every year. And that is going in a normal fashion. There are obviously some customers who perhaps are in a different position to others, but our sense is, in talking to our guys in the Legal division, they actually think the market's tone is reasonably positive at the moment. So no significant news one way or the other on that.

Your next question comes from the line of Adam Berlin from UBS.

Three from me. Firstly, on Exhibitions. Do you think if we don't have events running in North America and Europe you'd still make a loss next year or can you avoid a loss even if those events don't come back? And what do you think are that -- are you seeing any positive signs that we might get from events running next year in North America and Europe? What are you particularly looking for from the news flow that would get you more positive around that? That's the first question. The second question is, some of your peers have talked about working capital outflows because of the situation with COVID-19 in Exhibitions. Can you give any updated guidance on free cash flow conversion for this year based on what you're seeing at the moment? And then thirdly, just a follow-up question on STM academic renewals. I know that you're still early in the renewal season, but can you give us a sense of whether the tone from customers going into those renewal discussions is any different from previous years? Are they more aggressive asking for discounts or is it fairly normal?

Okay. Yes. Look, the -- your first question about next year. The revenue mix of the business, as you know, is 20% North America, 40% Europe and 40% rest of world, and the rest of world is mainly Asia and within that mainly Japan and China. And obviously, we are, as you know, already up and running in Japan and China. The '21 mix based on the program we have at the moment is -- you would be surprised to know, it shifts a bit more towards the rest of world and Asia, in particular, but it still only represents a bit over 40% of the total. So I'll let you do your math as to what you need to come to any particular outcome in terms of the profit or loss of the business. Your question on working capital outflows, yes, there's a -- I recognize the dynamic you've described clearly with the event program pushed back in the year, as I described, then you'll likely be less of a way through the booking process as you -- at the end -- on December 31. And that clearly could affect working capital within the Exhibitions business. Having said that, these are relatively small numbers. So in the context of the overall group cash conversion, so I still expect a pretty decent cash conversion for the group as a whole, maybe with a little bit of noise from working capital in Exhibitions. And your final question on STM and the renewals. I'm obviously not going to comment on the -- we're just not far enough into the process to make any overall comments. But clearly, institutions are being impacted by COVID-19, and we will be supporting our customers as they work through that impact. It is quite different in scope, depending on what type of institution you're talking about, depending which geography. But where customers have budgetary pressure, we will look to work with them as we always do on an individual customer basis based on their circumstances and look to give them the choices that enable them to achieve what they're trying to achieve and to do that on terms that work for them. And in doing that, we just have that overriding objective of wishing to be competitive, offering higher quality at a lower cost than the other major providers. And that's the approach we'll be taking.

Our next question comes from the line of Rajesh Kumar from HSBC.

On the risk and Legal business, can you give us some color on the opportunities that might have come in a world that is shaped by the pandemic in terms of fraud or other segments that might allow you to innovate?

Yes. Okay. Yes. Look, I mean, I think we've seen an acceleration of a number of trends that were already taking place. And the shift towards more e-commerce and what, therefore, we can do, particularly around digital identity, et cetera, is very clear. I think the risk business, as a whole, is well positioned. Clearly, you've got some pockets of -- where there are some challenges, but if you look at it overall, it's performing well. We -- the data -- the availability of data, the customers' willingness to engage with us on the potential for new products and if you take Insurance, where I mentioned the connected car strategy, there's a lot of interest in those products and bringing together data on people, assets, in an Insurance context, in a identity verification context, in fraud prevention, as you say, as more and more of commerce goes online. So I think we remain very excited about what the -- what we can do with those -- the new technology, new data sets. In Legal, the same. I think the acceleration from print to digital is a good thing. And once people are using digital reference products, you then have the opportunity to get the analytics products in front of them and with new natural language processing techniques, machine reading, call it, AI, but what you can now do things that even a few years ago you couldn't, and the analytics you can then bring to bear on legal information is that much greater and the value you can add. And we see continued interest in those products and good growth in those products, and we're continuing to innovate and develop them and add value to our customers and, ultimately, add revenue for ourselves.

Understood. So just when you think about the future capital allocation strategy for RELX, what are the areas where you would probably deploy more capital?

Yes. Look, I mean, I think this is not a capital-intensive business, and going after those opportunities that I just described, it's about resource allocation and organizational focus and it's rarely about capital. We actually support the internal CapEx is needed for product development is very easy to approve from my perspective. And we put all the capital in around those businesses where there are opportunities to develop products, roll out products using new data sets, using the new analytics, but it's an organizational capacity point rather than a market -- pace of market development point rather than us just throwing capital -- more capital at it. Clearly on the M&A side then our focus is on things that can bolt-on and plug into our existing organic strategies, and that naturally tends to go into these spaces where it's the faster-moving areas where we can add new data sets, new analytical tools. And that's -- I mean, as you've seen this year, it's been mostly into risk with the acquisitions of Emailage and ID Analytics, in particular, but we're also doing -- have opportunities in Legal and STM, and we've made acquisitions in those businesses as well. But the -- if you look back the last few years, the -- it's risk that has tended to take more of the overall M&A spend.

Your next question comes from the line of Matthew Walker from Crédit Suisse.

A few questions, please. The first is on the exceptionals, can you confirm that those are going to be all cash? Second question is on the open access you mentioned very strong growth. Can you update us on what percentage of our business is open access in STM? And how fast the growth is? And then on Exhibitions, if you could give us an idea of the -- for Asia or rest of world, what percentage of normal revenue are those events running at on average? And whether you'd expect the exhibitions to be down year-on-year from the GBP 200 million you did in the first half of '20 because you won't have a strong Q1 and it's unlikely you get U.S. and European events up and running in the second quarter? So do you think it's likely that the first half will actually be down, and you'll have to bunch into the second half? And then the final question is, obviously, if you look at the other information services peers, they're all doing very well partly if they've got mortgage data. Does that make you want to go into mortgage data?

Okay. So your first question was about the one-off restructuring charges and the canceled events costs. The event -- cost related to canceled events will -- is almost all cash, in year cash. The restructuring charges will -- some of that will fall into 2021 from a cash point of view in terms of exactly when the cash costs fall. We expect to take the accounting and accrue for it in 2020, but some of the cash will fall into '21. Your second question was about open access. And yes, look, in terms of the proportions of our business it represents, what was the -- growth rates are different. It doesn't change that quickly in one quarter. So as I think we said at the half year, in terms of the proportion of articles that it represents, the author pays open access and sponsored articles are just over 10% of the overall article count. And they're a bit under that in terms of their revenue share because of the positioning within the quality tiering and how we're approaching that. The open access article submissions, as you saw, roughly doubled in the first 9 months of this year. I won't give a exact number on the revenue, but you can imagine, it's, therefore, growing pretty fast, albeit there's always a lag between when our tools get submitted and when they ultimately get published. Your third question was about exhibitions and how the events that are running at the moment are running. It's quite a mixed picture. We've -- generally, they're down on the prior additions. In some cases, reasonably materially. I think I said in the introduction some running at just half the size of normal, but others are doing well. And we've even had some where the revenue is up on the prior year. So it's quite a range. It depends on the geography, the sector, how much international participation there is in the event. But generally -- it's a mixed picture, but generally lower. Your question about the first half of 2021. I mean, look, I mean, I'm not going to speculate. Clearly, there's still significant uncertainty as to exactly when we'll be able to run events. And we're trying to stay flexible with the program, as I described, pushing it back in the calendar. And we'll have to see where that comes out for the revenue picture for the first half of '21. As you point out, we had a couple of months of this year with no disruption at the beginning. But we'll see how we go through the first half of 2021. And clearly, we are looking to be -- by the second quarter, would hope to be in a better position, but we'll have to see. And your last question was about mortgage data. I mean look, we -- our business has got a profile that is driven by different dynamics to others. Obviously, we focus on things like shopping patterns in insurance and in the underlying transactions that drive the demand for the identity verification products and the like. So it's less oriented towards the credit markets and the mortgage market in particular. That's a cyclical market that's quite variable, goes up and down, but so inevitably, you have some periods when it's strong and some periods when it isn't, but that's not what we are particularly exposed to. So our business is in focus of different areas. We think those are good growth opportunities in every -- across the board in what we do in the risk business, and we'll focus on what we do and what we are good at.

Your next question comes from the line of Matti Littunen from Bernstein.

The first question on Exhibitions. Do you expect material revenue contribution from virtual events next year? And then another one on Exhibitions. So considering that the Olympics still appears to be taking place next summer and some of the venues that originally were scheduled to be part of the Olympics are again signed up for it, do you expect disruption from the venues like a big site in Tokyo being requisitioned that way for the event schedule in Asia? And then finally, on risk, you mentioned the data sets coming in from automotive OEMs, data comes from cars. Previously, you've said that the bulk of the data behind the Lexisnexis Risk Solutions products comes from public records. Do you think there's a shift towards more nonpublic data in that business?

Yes. Okay. So the first question was about Exhibitions and virtual events. Yes, we have been holding virtual events this year. I mentioned one in the introduction. And those have been well received. I think they've been -- we've been experimenting with different things and different ways of doing that, experimenting with different experiences for the attendees and the exhibitors and different revenue models. Clearly, in 2020, the revenue from that won't be that material in the context of the overall financials, but it's an important development as keeping a presence in the market. What happens in '21 will, of course, depend on our ability to hold physical events. And of course, our preference would be to be able to hold the events physically. We will look to enhance those and add digital capabilities around them. And we've already seen that in the events we're running in Japan and China, where the concept that you can attend the physical event, either as an exhibitor or as a visitor, but attend that in a virtual way is definitely there and something that's worked very well. So we may see more of that. But the extent to which we're running stand-alone virtual events next year will clearly depend on the -- what happens around the physical events. Your second question about the Olympics and, I mean, it is specifically Tokyo big site that is the -- which is -- you referred to, which is the big exhibition hall in Tokyo, which is being used as one of the -- it's actually being used as a media center for the Olympics. That does mean that the lack of venue availability that we were expecting in 2020 actually has now shifted to '21. So we are having to work around that. We have been aware of that, of course, for many years, although it's now in a different year to sort of what we're expecting. So we've been developing, in markets outside of Tokyo, the ability to hold -- move some of the events to other locations of the cities and indeed move things in the calendar as we did this year. So we actually dragged forward some events that would normally take place in the middle of the year into January, February in Tokyo this year, which, of course, in the end, proved to be a good thing to have done. So we'll have to manage our way through that and around that, but it's something that is well known and something we always sort of had a full plan and preparation around for -- in 2020 already. Your third question was about the -- noting the information with cars and about the data sources in risk. I think it's been -- whilst the public records part of the data sources for risk has been very important for a number of years, it is -- for some time, has been only one -- it's just one of the data sources. So we have public record information, we have licensing data, we have contributory data that comes from customers. And it's actually the power and the value-add that we can do by applying the analytics to those data sources is through the combinations, actually. And we've clearly, in recent times, been adding new data sets, like the device identity, information from ThreatMetrix, now the e-mail-based information from of Emailage, the connected car information that you talk about and it's the combination and the insight you can get through combining that with our existing data sources that can really add significant value. And that's -- so we're constantly seeking and looking at expanding the range of data, but that's right across public record, contributed data, licensing data and self-generated data, it's -- all sources are important.

Your next question comes from the line of Tom Singlehurst from Citi.

It's Tom here from Citi. I think I know the answer to it, but I'll ask anyway. When you're talking about the renewals within academic, it sounds like you're taking a client-by-client approach. So I presume that means you're assuming any sort of notion of just blanket flat pricing for 2021 like some of your peers. That was the first question. Second question was, we've seen a comment from the University of California saying negotiations are back on for a transformative deal. Can you -- are you -- you're clearly not going to tell us whether that's going to happen and when it's going to happen. But can you at least tell us what the revenue contribution was when they last were contributing revenue, which I think would have been 2018? And then the final question, I'll be surprised if I get a clean answer out of you given it's a 9-month trading update and Erik is not on the line, but I would love your perspective on whether you think having an Exhibitions business is worth all the hassle given it is so very fundamentally different from the rest of the group's activities and what's happened over the last 6 months is a big reminder of its inherent cyclicality versus the defensiveness of the rest of the portfolio.

Yes. Thank you, Tom. I think I'd just try and give you the best answer I can to those. STM pricing, our approach and philosophy on pricing in all of our businesses, with SDM very much so, is about providing better and better value all the time. And the volumes, as you know and have seen, the volumes that we handle and that we -- in the -- whether it's the journals part of the business or in the other areas has been going up faster than the revenue. And you can see from that, the actual -- the pricing in terms of the cost per unit for the customer base is coming down all the time, and that's our objective. We want to make sure we continue to be competitive, offering higher quality than our major competitors and doing that at a lower effective cost, and that's the pricing philosophy and something we'll continue. As you say, in the renewal process for the academic journals in particular, then we will work on a customer-by-customer basis and work with them to provide them what they need on terms that work for them, and that's our objective. I think on your second question on the -- about negotiations, and you mentioned one particular customer. Look, as you anticipated, we're not going to comment on individual customers. Clearly, our objective is to serve all research institutions and all researchers, and we interact with customers and potential customers as much as we can. And we'll see where those go in terms of overall discussions. We wouldn't comment on the revenue generation or precise nature of discussions with any one particular party. And your third question, which -- even though Erik is not on the line, let me see if I can tackle it, the Exhibition business. Look, I mean, we've always recognized that the Exhibition business carries event risk, if you like, and carries the risk of disruption. We've seen things in the past, SARS, Ash cloud, things like that. Clearly, this is very unusual in being something that's disrupted a very large part of the business for quite a long extended period. But it is still a valuable business. And we think, judging by the demand we've had and the response we've had from the shows, we have been able to run the exhibitors wanting us to run shows in other markets, if at all possible. I think we continue to see the value in face-to-face interaction, and we have been good owners of this business. It's been developed largely organically under our ownership. We see potential for adding more value to it through bringing more digital and data skills to bear in the industry. But clearly, in the immediate term, the focus is on recovery and getting the business through what's a challenging period and going from there.

Your next question comes from the line of Henk Slotboom from The Idea.

Sorry to ask you a question that has been asked again, but the operator asked for the spelling of my name. So I missed a crucial part when you discussed the restructuring costs of acquisitions. Was it a triple-digit number for the restructuring or was it a triple-digit number for the one-offs as a whole? That's my first question. The second question is, and how long are exhibitors booking exhibitions in advance? Is it fair to assume that, that is, let's say, half year, 3/4 of a year in advance? And if I'm right, does that include the risk that -- suppose that the pandemic takes longer, that like [Informa] you won't organize any events in the first quarter, maybe not in the second quarter either, that people have -- will begin to reallocate marketing budgets to other purposes instead of attending live shows? And then my third question would be, you discussed virtual events. You said it's not going to be a major part of our revenues in 2021. If I look at the 2019 annual report, then online revenues in Exhibitions accounted for roughly 4% of total income in that division. Can you perhaps say whether that has grown? And what is -- online revenue really is?

Yes. So your first question about the one-off costs in Exhibitions. I was referring to the combined costs relating to canceled events and the restructuring charges combined being into triple digits was the guidance we're giving. Your question about advanced booking in Exhibitions. Look, we -- there's a reasonably long sales cycle in Exhibitions. We clearly would prefer to have as much certainty as possible around a physical event taking place. Pushing the events back in the calendar in '21, as we've been doing, is a way of giving ourselves a longer selling cycle. So that will help with that process. There has been a reasonable degree of rollover from people who booked to come to this year's events, which, when we've not been able to hold it, rolled over their booking into next year. So there's a -- that will, again, help the picture. But we clearly want the longest clear, certain selling cycle we've got the better. I think to your point about where people spend, it's all about value. And people -- these are mostly B2B events, where the exhibitors see significant valuing from coming, being able to get to a wider audience, to meet potential buyers, to -- potential buyers to see their products. And if there's value there, they will continue to come. So I think we feel confident that face-to-face will remain an important part of the selling process for many, many industries, including -- vary from sector to sector and as it has done over the years anyway, and it's incumbent on us to adapt our business and evolve and focus on the areas where we can add most value to the physical event. And your question about electronic revenues that we -- you obviously picked out the number from 2019. Clearly, in 2020, it will be higher because the overall revenue has -- the revenue from physical events hasn't been there in the normal way. What is in that electronic revenue includes some platform revenue, where we've got an electronic platform associated with a periodic event that's operating -- in electronic platforms operating all the time? It also includes electronic services directly linked to the physical event, such as the remote attendance that I was describing. So that's something we've been developing anyway and we'll continue to develop as we get into the -- into 2021.

Is it fair to assume that the absolute number of online revenues this year is higher than last year as well?

Yes. It depends exactly what you include in that. I mean, clearly, it's -- some digital revenues are linked -- are only earned when the physical event takes place. So it will be a mix. Clearly, revenue from stand-alone virtual events is definitely higher.

There are no further questions at this time. Please continue.

Okay. If there are no further questions, thank you for your joining us today. I'm sure if you need to follow up with Colin at all, you can do that. But thanks for joining us. Thank you, operator.

That does conclude our conference for today. Thank you for participating. You may all disconnect.