RELX PLC (REL) Earnings Call Transcript & Summary

Good morning, everybody, and welcome to you all. Thank you for taking the time to join this audiocast. My name is Paul Walker, and I'm the Chair of the RELX Board. Before turning to the performance of the business, I would like to say a few words regarding some changes to the Board following the Annual General Meeting, which took place this morning. Linda Sanford, Non-Exec Director of RELX PLC, has stepped down from the Board following the conclusion of this morning's meeting, having served on the board for over 9 years. I'd like to thank Linda for her exceptional service to RELX, her support and her advice during this period. Linda leaves RELX with our very best wishes. We released a trading statement to the market at 7:00 this morning, and I will comment on this shortly. But firstly, I would like to comment briefly on the company's progress during 2021. As Chair of RELX PLC, I have been impressed by RELX's resilience, the strength of the company's strategy and business model and its ability to innovate and deliver value to our customers. I'm particularly proud that over the last 2 years, the company has played an important role in informing the global public health response to the COVID-19 pandemic. In 2021, RELX delivered strong underlying revenue growth of 7% and underlying adjusted operating profit growth of 13%. Underlying revenues and profits grew across all of our 4 business areas. Exhibitions' underlying revenue growth benefited from the gradual reopening of exhibition venues during the latter half of 2021. Earnings per share growth in 2021 was 17% on a constant currency basis. In 2021, we completed 12 acquisitions of content and data analytics and exhibitions assets for a total consideration of GBP 255 million. And we disposed of 5 small nonstrategic assets for a total consideration of GBP 22 million. These targeted acquisitions support our organic growth strategy and are aligned with our strategic priorities for use of cash generated by the company. This prioritizes investments in organic growth and development of our business to drive underlying revenue growth as we continue to migrate all of our information solutions across RELX towards higher-value decision tools, adding broader data sets and embedding more sophisticated analytics and leveraging more powerful technology. Given our strong balance sheet and the cash-generative nature of the business, the Board announced earlier this year that it would resume the share buyback program and deploy a total of GBP 500 million on our share buyback program for 2022. We also recommended a final dividend for 2021 of 35.5p per share, which, together with the interim dividend of 14.3p paid in September, gives us a full dividend for 2021 of 49.8p, an increase of 6% on the total dividend declared for 2020. The final dividend will be paid to shareholders on 7 June 2022. We also continue to prioritize corporate responsibility. In 2021, we continue to develop the RELX SDG Resource Center to advance awareness, understanding and implementation of the United Nations 17 sustainable development goals, which aims to end poverty, protect the planet and ensure prosperity to all people by 2030. We expanded content on this site by 63% during the year. We also held our first investor seminar focused exclusively on environmental, social and governance issues, otherwise often known as ESG. During the year, we helped more citizens gain access to credit through LexisNexis alternative credit sources, extending pilot programs in Colombia and Mexico. We facilitated 1.1 million research for life science direct downloads to more than 10,000 institutions in over 125 low and middle-income countries and also held RELX Rule of Law Cafes in the U.K., Asia and South Africa to bring together the legal community, corporate peers, government representatives and nongovernmental organizations to share information going beyond legal minimums to advance the rule of law. Turning to our trading thus far in 2022. RELX has started the year well. Key growth metrics for STM and Legal have remained above historical averages in the early part of the year. And key growth metrics for Risk have remained in line with historical averages thus far in 2022. The reopening of exhibition venues has continued to drive strong growth in Exhibitions. As a result, RELX's growth in key business metrics overall remain ahead of historical trends thus far in 2022.

I will now address the questions which have been submitted to us by shareholders. I've grouped the similar questions together. First question. We have been asked how the company is being impacted by the general inflationary environment. Our overall approach of ensuring that cost growth remains below revenue growth applies in all inflationary environments. RELX does not have much in the way of direct product cost and is not exposed to inflationary pressures on raw materials, energy or transportation. Our largest cost category is people, and we are used to managing wage inflation in certain sectors, such as U.S. technology and certain geographic markets, including some parts of Asia. A lot of unit costs around technology have been coming down over time. And if there are any inflationary pressures, we would look to deliver efficiencies elsewhere, managing costs as we have done historically, looking to drive process efficiencies, keeping cost growth below revenue growth despite rapid increases in the volumes of data and content we process and analyze. Our objective is to provide more value to customers over time. Measured on a unit basis per article published or downloaded, per legal case, per account checked, per insurance policy underwritten, our effective unit prices are typically coming down, reflecting the extra value we are providing. The general inflationary environment will influence our pricing and may reduce the pace of effective price decline, but our revenue growth is driven mainly by higher volumes and increased adoption of our products, not by price increases. Second question is we have also been asked about the company's corporate responsibility activities and especially on environmental, social and governance issues. So RELX prioritizes corporate responsibility and ESG. It is embodied into our corporate strategy and culture and, we believe, gives us a competitive advantage. We focus on our unique contributions as a business where we make a positive impact through our knowledge, resources and skills, including universal sustainable access to information, protection of society and advancement of science and health, promotion of the rule of law and justice and fostering communities. RELX's ESG performance has once again been recognized externally. RELX held a AAA MSCI ESG rating for a 6th consecutive year, and we have listed 4th in MSCI's U.K. ESG Leaders Index. RELX was ranked 11th out of over 14,000 companies globally and 1st in our sector by Sustainalytics for its ESG activities. It was also ranked 4th in the Responsibility 100 Index, a ranking of FTSE 100 companies on performance against the UN Sustainable Development Goals. And we're 3rd in its sector in the Dow Jones Sustainability Index, was 1 of 38 lead companies of the UN Global Compact amongst more than 12,000 signatures, a record we are extremely proud of. They were the 2 questions, and there being no further questions, I'd like to thank you all for listening in today and for your continuing support of the business.